Software License and Distribution Agreement - webMethods Inc. and SAP AG
SAP DEVELOPMENT PARTNER
SOFTWARE LICENSE DISTRIBUTION AGREEMENT
FOR EMBEDDED PRODUCTS
This Software License and Distribution Agreement for Embedded Products
("Agreement" entered into as of March 31, 1999 by and between webMethods, Inc.
("Licensor"), corporation having principal offices at 3975 University Drive,
Suite 390, Fairfax, Virgin SAP AG ("SAP"), a German company having principal
offices at Neurottstrabe 16, 69 Germany.
PREAMBLE
WHEREAS, SAP designs, develops, markets and sells worldwide certain
business software based on client-server architecture;
WHEREAS, Licensor designs, develops, markets and sells certain
software business to business electronic commerce application
integration; and
WHEREAS, SAP wishes to obtain a license to integrate and embed
certain software products into SAP's software.
NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS
1.1. "Applicable Entity/Entities" shall mean SAP's subsidiaries and! or
distributors partners or training partners authorized by SAP.
1.2. "Attachments" shall mean all attachments to this Agreement.
1.3. "Effective Date" shall mean the date of execution of this Agreement.
1.4. "Embedded Licensed Software" shall mean the version(s) of the
Licensed Software into and embedded into SAP Software, as defined in
Section 3.2 hereof.
1.5. "End-User" shall mean a third party end-user who licenses proprietary
software documentation for internal use.
1.6. "Essential Third Party Software" shall mean the Third Party Software
included in Software as described in Attachments A and E hereto,
along with any Third Party added to the Licensed Software by Licensor
during the term hereof which either any meaningful portion of the
functionality provided by the Licensed Software as of the date of
this Agreement or (ii) is otherwise essential to the continued
installation, use and maintenance of the Licensed Software (with
respect to the functions generally provided by the Licensed Software
as of the date of this Agreement).
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1.7. "Internal Use" shall mean use of the Licensed Software by SAP and its
employees solely for internal use in SAP's operations.
1.8. "Licensed Software" shall mean all of Licensor's software products to
be embedded in SAP Software, and/or any combinations of Licensor's
software products to be embedded in SAP Software, as listed in
Attachment A hereto, together with such updates, upgrades and new
versions as Licensor shall provide to SAP hereunder during the term
hereof, and applicable End-User documentation. For purposes of this
Agreement, "Licensed Software" shall include any Essential Third
Party Software and shall not include any Non-Essential Third Party
Software.
1.9. "License Fee" shall mean the license fee payable by SAP to Licensor
for the Licensed Software licensed by SAP hereunder as stipulated in
Article 8 hereof.
1.10. "Non-Essential Third Party Software" shall mean any Third Party
Software which is not Essential Third Party Software.
1.11. "Not For Distribution Use" or "NDR" shall mean use of the Licensed
Software only for Internal Use, for internal training, for testing,
for provision of implementation consulting services with respect to
SAP Software and for demonstrations to prospects and their personnel.
1.12. "Object Code" shall mean the executable, machine-readable form of
Licensed Software.
1.13. "SAP Software" shall mean all SAP software products, including all
updates, upgrades, new versions and applicable End-User
documentation, as well as third party products other than Licensed
Software, marketed and licensed to End-Users by SAP or Applicable
Entity/Entities.
1.14. "Source Code" shall mean the form of the Licensed Software that is
intelligible to trained programmers and is capable of being
translated into Object Code form by means of a compiler or
interpreter.
1.15. "Steering Committee" shall mean a committee to be made up of one
development manager of Licensor and one development manager of SAP to
supervise the Development Services (as defined in Article 7).
1.16. "Territory" shall mean all countries of the world.
1.17. "Third Party Software" shall mean all third-party-owned software
products, components and data which are incorporated into or provided
with the Licensed Software as of the Effective Date (a description of
which, through Version 3.0 of the Licensed Software, is set forth in
Attachment E hereto) or which is incorporated into or provided with
the Licensed Software after the Effective Date but during the term of
this Agreement. For the purposes hereof, "third-party-owned" shall
mean owned by a person or entity which is unaffiliated with
webMethods, its executive officers and holders of 20% or more of its
outstanding equity.
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2. SCOPE OF AGREEMENT
2.1. Scope. This Agreement, including any Attachments hereto, sets forth
the terms and conditions pursuant to which SAP will license Licensed
Software from Licensor and will be permitted to modify, market and
sublicense the Licensed Software (and any derivative works thereof)
embedded in SAP Software.
2.2. Inconsistent Terms. Deviating terms and conditions, including,
without limitation, those contained in either party's standard terms
and/or standard contracts, purchase orders, invoices and
acknowledgments, shall not apply even if referred to by one party and
not expressly objected to by the other party. Silence by one party
amounts to rejection of the other party's terms and conditions.
3. RIGHTS OF SAP
3.1. NDR Object Code License. Licensor hereby grants to SAP and the
Applicable Entities a non-exclusive, non-transferable, limited
license to use the current commercial release of the Licensed
Software and any releases or updates thereto made during the term
hereof, in each case in Object Code form only, for NDR Use basis and
an Internal Use basis. Licensor shall provide SAP one (1) copy of the
Licensed Software for such purpose, and SAP shall have the right to
distribute the necessary number of copies of the Licensed Software to
the Applicable Entities for such purpose. SAP and the Applicable
Entities shall not use such software for any purpose other than NDR
Use and Internal Use, and shall not use the Licensed Software to
provide external connectivity or service bureau services to any third
party (but SAP and the Applicable Entities may use SAP Software which
embeds Embedded Licensed Software to provide such services to third
parties).
3.2. Licensed Software Source Code License. Licensor hereby grants to SAP
(and, as necessary for the development of SAP Software, SAP Labs,
Inc. and other SAP subsidiaries identified to Licensor in writing by
SAP from time to time) a non-exclusive, non-transferable, limited
license to use the Licensed Software in Source Code form solely for
the purpose of integrating and embedding the Licensed Software into
the SAP Software. Licensor understands that it may be necessary to
create derivative works of the Licensed Software in the process of
implementing such integration and embedding and hereby grants SAP
(and, as necessary for the development of SAP Software, SAP Labs,
Inc. and any other SAP subsidiaries identified to Licensor in writing
by SAP from time to time) the right to create derivative works of the
Licensed Software for such purpose. Any portion of such a derivative
work that is created solely or jointly by either party, shall be
owned by SAP, and, except as may otherwise be specifically provided
in this Agreement or agreed upon in writing by the parties, SAP and
the Applicable Entities shall not be restricted with respect to
usage, modification, marketing or licensing such portions. For the
purpose of ensuring interoperability and supportability of the
Licensed Software, within a reasonable period, SAP shall deliver to
Licensor one copy of the Source Code representing the portion of each
such derivative work that performs the function or functions
generally performed by the Licensed Software. Subject to the
restrictions set forth in Article 4.4, SAP grants (or shall cause SAP
Labs, Inc. or such other SAP
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subsidiary to grant) to Licensor a fully paid up, perpetual,
worldwide license to use, modify, distribute or otherwise make use of
such derivative works delivered to Licensor pursuant to the prior
sentence. Any patches, work arounds or bug fixes to the Licensed
Software, created solely or jointly by either party, shall remain the
sole property of Licensor. SAP shall deliver or cause to be delivered
to Licensor any fixes to the Licensed Software as soon as reasonably
practicable but in no event later than once each quarter. The version
of the Licensed Software or its derivative that is incorporated into
the SAP Software shall be referred to herein as the "Embedded
Licensed Software". Except as provided herein solely with respect to
certain application programming interfaces delivered with the
Embedded Licensed Software, in no event shall SAP or the Applicable
Entities have the right to market, distribute, sell, disclose or
sublicense the Source Code form of the Licensed Software.
Licensor shall provide SAP with one (1) copy of the Source Code, and
one (1) backup copy of such Source Code. SAP shall maintain the
primary backup copies of the Source Code in locked safes in secure
facilities, and shall install the Source Code on not more than two
networked computer systems in secure facilities and accessible by
only those employees of SAP (and, as necessary for the development of
SAP Software, SAP Labs, Inc. and any other identified SAP
subsidiaries) with a need to have access to it for the purpose of
integrating or embedding Licensed Software into SAP Software or
providing customer support of the Embedded Licensed Software, which
the parties recognize will only include software developers, second
and third level support personnel and systems administrators (with
respect to standard back-up and administrative procedures). SAP
agrees to use (and to cause its subsidiaries to use) the same degree
of care in protecting the Source Code form of the Licensed Software
as it generally uses to protect its own or its other development
partners' Source Code, but in no event less than reasonable care to
prevent access to source code by any other employees of SAP, SAP's
subsidiaries or any other third party. SAP shall provide Licensor
upon reasonable request with a written report indicating the
locations of the Source Code and listing all employees, consultants
or agents of SAP, SAP Labs, Inc. and any other identified SAP
subsidiaries that have access to the Source Code.
3.3. Embedded Licensed Software Object Code License. Licensor hereby
grants to SAP and the Applicable Entities a non-exclusive, non
transferable, limited right and license to make copies of the master
media copies of the Embedded Licensed Software, and to use, modify,
sublicense and distribute the Embedded Licensed Software, in Object
Code form only to End-Users and SAP partners only (except as
otherwise permitted herein), within the Territory. SAP and the
Applicable Entities shall not have the right to copy, distribute or
sublicense the Embedded Licensed Software except as a component of
SAP Software containing meaningful functionality in addition to the
functionality provided by the Licensed Software; provided, that the
parties acknowledge that the offering by SAP and the Applicable
Entities of the Licensed Software as a component of a bundled package
which includes other SAP Basis software development and integration
tools shall be permissible hereunder. The Embedded Licensed Software
(including any Derivative Products) will be distributed by SAP and
the Applicable Entities pursuant to terms no less restrictive than
those contained in the license agreements used by SAP and the
Applicable Entities for the licensing of SAP Software to End Users.
SAP and the
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Applicable Entities shall be entitled to determine the license fees
that SAP or such entities charge End-Users for the SAP Software
independently of Licensor. However, if at any time during the term of
this Agreement SAP begins to charge End-Users separately to obtain
the functionality of the Embedded Licensed Software, Licensor and SAP
agree to attempt in good faith to negotiate a payment arrangement
that will fairly compensate Licensor under such circumstances to
replace the License Fee provided for in this Agreement.
3.4. Scope Limitation. Notwithstanding any other provision of this
Agreement to the contrary, the rights granted to SAP and the
Applicable Entities hereunder shall be limited solely to use of the
Embedded Licensed Software for connection over the internet, over a
distributed network or otherwise of (a) SAP Software with SAP
Software or (b) SAP Software with browsers and other human interface
software using HTML and XML.
3.5. Publication and Ownership of Interface Data Structures. Licensor
agrees that SAP shall own and shall have the right to publish the
interface data structures and protocols which permit the SAP Software
to pass data to and from the Embedded Licensed Software (the "R/3-B2B
Protocols"). SAP agrees that Licensor shall own the interface data
structures and protocols developed by Licensor which permit the
Embedded Licensed Software to pass data over the internet, over a
distributed network or otherwise to and from other SAP Software,
browsers or other human interface software using HTML or XML (whether
in XML or a proprietary format) or Licensor Software (including,
without limitation, the Licensed Software) (collectively, the "WM-XML
Protocols"). Licensor agrees that SAP shall own any interface data
structures and protocols developed by SAP which permit the Embedded
Licensed Software to pass data over the internet, over a distributed
network or otherwise to and from other SAP Software, browsers or
other human interface software using HTML or XML (collectively, the
"SAP-XML Protocols"). Licensor agrees that SAP is hereby provided a
worldwide, fully-paid, nonexclusive license for the use, distribution
and modification of the WM-XML Protocols. SAP agrees that Licensor is
hereby provided a worldwide, fully-paid, nonexclusive license for the
use, distribution and modification of the R/3-B2B Protocols and the
SAP-XML Protocols. SAP and Licensor hereby agree to publish the
WM-XML. Protocols to a standards body competent in establishing
industry interface specification as promptly as practicable (or, if
the parties cannot mutually agree upon such standards body, the
parties will jointly submit the specification to the World Wide Web
consortium). Following such joint publication, SAP shall have the
right to publish the WM-XML Protocols from time to time. Each party
hereby agrees that the other party and any third parties shall be
permitted to create products using the WM-XML Protocols and the
SAP-XML Protocols without any obligation to account to such party.
Accordingly, Licensor acknowledges that, following the publication of
the WM-XML Protocols, third parties will be permitted to use the
WM-XML Protocols to develop products which may be competitive with
the Licensed Software. Prior to the joint publication of the WM-XML
Protocols, SAP may distribute API sample code for the WM-XML
Protocols.
3.6. SAP has the right to develop software competitive to the Licensed
Software and to embed competitors' software in SAP Software,
provided, however, that at no time during or after the term hereof
shall SAP (a) use any confidential or proprietary information of
Licensor
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to develop such software, or (b) employ or retain any person having
exposure to the Source Code form of the Licensed Software for or in
connection with any such development effort (except in connection
with Microsoft's BizTalk software products).
3.7. Reasonable Efforts to Embed. SAP will use reasonable efforts to embed
the Licensed Software (or Derivative Products thereof) in SAP's
Business-to-Business Procurement and Business Connector solutions,
but SAP shall have no obligation to do so.
3.8. No Implied License. Except for the express license granted herein, no
other licenses are granted by implication, estoppel or otherwise.
4. LICENSOR'S OBLIGATIONS
4.1. Installation. Licensor's personnel shall install, within five
business days after the Effective Date, on one (1) network file
server, the Source Code copy of the Licensed Software at the SAP
location identified in Attachment A. If necessary to conform to
applicable export restrictions with respect to the development or
distribution of Embedded Licensed Software, promptly following SAP's
request, Licensor shall install a Source Code copy of the Licensed
Software on one (1) network file server at SAP Labs, Inc.'s location
in Palo Alto, California. Licensor shall be responsible for
compliance with applicable U.S. export control laws in connection
with the initial export of the Licensed Software to SAP's site in
Walldorf, Germany, and the export of any new versions, upgrades or
updates of the Licensed Software to SAP's site in Walldorf, Germany.
Except as set forth above in this Section 4.1, SAP shall be solely
responsible for compliance with all U.S., German and other import and
export control laws applicable to the Licensed Software, including,
without limitation, the shipment, installation and use of the
Embedded Licensed Software to distributors and End Users and the
installation and use of the Licensed Software by End Users.
4.2. Updates. During the term hereof, Licensor shall provide to SAP master
media copies and NDR Use copies, including applicable user
documentation, of the Licensed Software, updates and new releases, on
a preferred basis, but in all events not later than its first
shipment to its own similarly situated customers, distributors or
development partners.
4.3. Training. Licensor shall provide initial training to SAP developers
and trainers with respect to the Licensed Software for the number of
days as mutually agreed upon by SAP and Licenser.
4.4. Licenser's Restrictions. Licensor shall refrain from, and shall use
reasonable efforts to cause its distributors to refrain from,
licensing the Licensed Software (including B2B Server and B2B
Developer) for use in connecting SAP software with SAP Software or
SAP Software with human interfaces (HTML and XML). The foregoing
restriction shall not apply to Licensor or its distributors in the
event that:
(i) SAP does not make meaningful features and functions
of the Licensed Software generally available for
shipping to SAP R/3 customers (Release
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Confidential material omitted
and filed separately with the
Securities and Exchange
Commission pursuant to Rule 406
under the Securities Act of
1933, as amended Asterisks
denote such omissions
3.1 and higher) as part of the SAP Business Connector
product within ninety (90) calendar days following
the release by Licensor for general availability of
Licensor's B2B Server Version 3.0 and the delivery of
the Source Code form of such release to SAP;
(ii) SAP agrees in writing (in its sole discretion) that
Licensor may license the Licensed Software for use
with SAP R/3 Release 3.0 and prior releases for
particular SAP customers; or
(iii) SAP embeds in SAP Software, resells or otherwise
distributes to End Users software (which is not
Licensed Software or a derivative work of the
Licensed Software), whether developed internally by
SAP or licensed or otherwise acquired by SAP from a
third party, with substantially the same
functionality as the Licensed Software or which
otherwise is directly competitive with the Licensed
Software. SAP shall provide Licensor with 90 days'
prior written notice of any such event, the
restriction shall expire upon receipt of such notice
and SAP agrees that (a) it shall not announce
publicly its planned distribution of the competitive
product until the earlier to occur of (I) a public
announcement by Licensor that it will commence
distribution of the Licensed Software to End Users
for the uses set forth above in this Section 4.4 and
(II) the expiration of thirty (30) days following the
delivery of such written notice to Licensor and (b)
it shall not deliver the competitive product to
customers during such 90-day notice period.
4.5. Inter-Operability. Each party agrees to use commercially reasonable
efforts to work together to ensure that the Embedded Licensed
Software is and will continue to be during the entire term of this
Agreement compatible with SAP Software, including new versions or
releases thereof.
4.6. Essential Third Party Software. For the purposes of this Agreement,
Essential Third Party Software shall be treated by the parties in all
respects as Licensed Software for the purposes of the parties'
obligations with respect to delivery, support, services and
restrictions upon use and distribution. Without limiting the
foregoing, Licensor shall cause to be developed and incorporated into
its B2B Server Version 3.0 (for general availability) the necessary
interfaces to the * software included in the Essential Third Party
Software, which will be provided to SAP on or prior to June 30, 1999.
Licensor shall provide SAP with, or cause SAP to be provided with,
necessary maintenance and support with respect to the * software
included in the Essential Third Party Software, and Licensor shall be
responsible for any and all license and maintenance fees payable to
third parties in respect of all Essential Third Party Software
(provided, however, that SAP shall be responsible for any fees or
payments due to RSA Data Security, Inc. with respect to the
distribution of SAP Software in the United States of America). Solely
to the extent permissible under its licensing arrangement with the
relevant vendor, Licensor will use reasonable efforts to provide SAP
access to the Source Code form of Essential Third Party Software for
reference and informational purposes. Notwithstanding anything
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Confidential Material omitted
and filed separately with the
Securities and Exchange
Commission pursuant to Rule 406
under the Securities Act of
1933, as amended. Asterisks
denote such omissions.
contained herein to the contrary, other than the * software or as
otherwise mutually agreed in writing by the parties, third party
encryption software shall be considered "Non-Essential Third Party
Software", rather than "Essential Third Party Software", for the
purposes of this Agreement.
4.7. Non-Essential Third Party Software. Licensor will use its reasonable
efforts to cooperate with SAP to obtain access for SAP to any
Non-Essential Third Party Software for embedding in SAP Software with
the Licensed Software. To the extent that any Non-Essential Third
Party Software is embedded in SAP Software with the Licensed
Software, Licensor shall be responsible for maintenance and support
thereof (subject to the terms and conditions applicable to
maintenance and support by Licensor of the Licensed Software).
5. SAP'S OBLIGATIONS
5.1. Internal Use and NDR License Terms. SAP agrees to utilize the
Licensed Software for NDR Use and Internal Use only under the terms
of Licensor's form of end-user license agreement, a copy of which is
attached hereto to as Attachment F, as set forth herein and in any
Attachments hereto, and on such terms as may be mutually agreed upon
by Licensor and SAP.
5.2. End User License Terms. SAP and the Applicable Entities shall enter
into legally enforceable, written license agreements with each End
User containing the terms and conditions under which the Embedded
Licensed Software is to be sublicensed in compliance with this
Agreement. Such terms and conditions shall be no less protective of
Licensor's interests than those set forth in the standard license
agreements then employed by SAP or the Applicable Entities.
5.3. SAP R/3 License. SAP shall provide Licensor with a standard
demonstration/test license for SAP R/3 at no charge for the term of
this Agreement, provided that Licensor shall be responsible for any
cost associated with obtaining any necessary database software
license.
5.4. Development Partner. SAP hereby designates Licensor as "Development
Partner" for the terms of this Agreement. SAP shall extend such
benefits to Licensor as SAP generally extends to its other
Development Partners as a group.
6. JOINT OBLIGATIONS OF LICENSOR AND SAP
6.1. Notice of Changes. Each party shall use reasonable efforts to give
advance prior written notice to the other party of any changes to its
software products which such party believes may have an adverse
impact on the other party's products hereunder and agrees otherwise
to consult with the other party on such changes.
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6.2. Nonsolicitation. Neither Licensor nor SAP shall, during the term of
the Agreement and for a period of one (1) year following termination,
solicit for employment any of the other party's employees without the
prior written approval of the other party.
6.3. Support. SAP and Licensor shall provide the necessary experienced
personnel to provide support services in a timely manner to
End-Users. SAP shall be responsible for providing First and Second
Level Support to the Applicable Entities and End Users, as defined
and in compliance with the standards set forth in Attachment C.
Licensor shall be responsible for providing Third Level Support to
Second-Level and Third-Level support personnel of SAP at the regional
and development support centers listed in Attachment C. Licensor will
provide support directly to the Applicable Entities, or directly to
End-Users, solely in emergency situations under the escalation
procedures to be defined mutually by the parties consistent with the
escalation procedures set forth in Attachment C.
7. CO-DEVELOPMENT EFFORT
7.1. Licensor agrees to provide the professional services to SAP described
in this Article 7 and in Attachment B hereto entitled "Development
Services" (the "Development Services") to SAP to enable the embedment
of the Licensed Software into the SAP Software, to repair existing
bugs in the Licensed Software and to work with SAP to define
interfaces to Embedded Licensed Software. Licensor agrees to provide
the Development Services of two experienced full-time consultants
(the "Development Consultants") to SAP at no charge for the term of
this Agreement. Such Development Consultants shall be located in
Walldorf, Germany (unless otherwise agreed by the parties), but shall
remain employees of Licensor. The activities of such development
consultants shall be guided by SAP, but such development consultants
will be supervised by Licensor.
7.2. Modifications and Enhancements. In addition to the Development
Services to be performed by the development consultants pursuant to
Section 7.1 above, SAP may request Licensor to make modifications or
enhancements to the Licensed Software. Licensor shall use
commercially reasonable efforts to make any requested modifications
or enhancements that Licensor and SAP mutually agree are critical to
the performance or commercial viability of the Licensed Software or
the SAP Software embedding the Licensed Software, including, without
limitation, those specific modifications, enhancements or bug fixes
listed in Attachment B hereto promptly within the time period agreed
upon by the Steering Committee, without any additional charge. SAP
may also make suggestions for non-critical modifications to Licensed
Software for consideration in Licensor's standard product planning
process. Licensor may, at its sole discretion, elect to incorporate
such suggestions into the Licensed Software but shall have no
obligation to do so. If Licensor rejects SAP's suggestions, SAP may
request Licensor to provide a quote for the addition of the
non-critical modifications. For the fees and expenses mutually agreed
upon by the parties, Licensor shall use commercially reasonable
efforts to complete such non-critical modifications or enhancements
to the Licensed Software requested by SAP within a reasonable time
period. Notwithstanding the foregoing, Licensor reserve the right to
refuse a request by SAP to provide such non-critical
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Confidential Materials omitted
and filed separately with the
Securities and Exchange
Commission pursuant to Rule 406
under the Securities Act of
1933, as amended. Asterisks
denote such omissions.
modifications or enhancements to the Licensed Software to the extent
that such effort would negatively impact the availability of Licensor
developers for other Licensor priorities.
7.3. Development Support. SAP shall provide free of charge to Licensor all
required reasonable development support to Licensor's development
consultants. Development shall take place in Walldorf, Germany,
unless otherwise agreed by the parties in writing.
7.4. Termination of Development Services. SAP may terminate the
Development Services, in whole or in part, upon not less than thirty
days' prior written notice. Such termination will result in the
termination of Licensor's obligations under Sections 7.1 and 7.2
hereof but will not terminate or otherwise affect any other rights or
obligations arising under this Agreement.
7.5. Expenses. SAP shall reimburse Licensor a fixed amount equal to * per
calendar month (payable quarterly to Licensor with the License Fee)
per Development Consultant with respect to such Development
Consultant's relocation and lodging expenses while such Development
Consultant is located in Walldorf. In addition, SAP shall reimburse
Licensor for the cost of one round-trip coach class airfare with
respect to the relocation of each Development Consultant to Walldorf.
All travel and lodging expenses otherwise incurred by each of the
parties in connection with the performance of its obligations
hereunder shall be borne by such party, unless otherwise agreed in
writing by the responsible party.
7.6. Steering Committee. Both parties shall form a joint "Steering
Committee" of one responsible development manager from each party to
supervise the Development Services, review the work product of the
Development Services, agree on further Development Services and to
discuss any other matters concerning the Development Services.
7.7. Other Services. Any other services requested by SAP and not provided
for herein or in Attachment B shall be performed only pursuant to the
terms and conditions of a separately negotiated and executed services
agreement.
8. PAYMENT TERMS
8.1. License Fee. SAP shall make the following payments to Licensor as a
License Fee under this Agreement:
(i) * within fifteen (15) calendar days following the date
of execution of this Agreement by both parties hereto,
with respect to certain Development Services provided
by Licensor to date; and
(ii) The excess, if any, of * to RSA Data Security, Inc. in
connection with procurement by SAP of a patent license
for distribution of Secure Socket Layer (SSL)
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Confidential Material Omitted
and filed separately with the
Securities and Exchange
Commission pursuant to
Rule 406 under the Securities
Act of 1933, as amended.
Asterisks denote such
omissions.
encryption technology in the United States of America
as part of SAP's Business-to-Business procurement/SAP
Requisitioner software (such excess, the "RSA Excess
Amount"), within thirty (30) calendar days following
the execution by SAP and RSA Data Security, Inc. of
such patent license (provided that, such excess shall
be deemed to be zero in the event that SAP is unable
to obtain such patent license from RSA Data Security,
Inc.);
(iii) * within fifteen (15) days following the
commencement of each calendar quarter, commencing
with the calendar quarter commencing April 1, 1999
and ending with the calendar quarter commencing
October 1, 2001 (representing, prior to any extension
hereof, an aggregate amount of * (the
"Aggregate License Fee Amount").
8.2. Development Services Fees. The parties may agree to further payments
for Development Services from time to time pursuant to Article 7
hereof.
8.3. Extensions. The parties shall use reasonable efforts to agree by June
30, 2001 on a new license fee for the extended period of the
Agreement (beyond March 31, 2002). If such agreement is not reached
and neither party terminates this Agreement effective March 31, 2002
by prior written notice pursuant to Section 9.1 hereof, then SAP
shall pay a license fee of * per calendar quarter of such
extended term (with the first extension payment to occur by April 15,
2002 with respect to the calendar quarter commencing April 1, 2002).
8.4. Taxes. The parties agree that the amounts paid pursuant to this
Agreement are not subject to sales and use tax; provided, however,
that SAP shall provide Licensor with satisfactory documentation
(including but not limited to resale exemption or other certificates)
supporting such status, as reasonably requested by Licensor. SAP
shall be solely responsible for payment of any and all international,
federal, state and local sales, use value-added and excise taxes, any
other taxes or duties or any nature whatsoever assessed upon or with
respect to the Licensed Software provided and licensed under this
Agreement, or otherwise arising from this Agreement and the
transactions contemplated hereby, except items of tax based in whole
or in part on Licensor's net income.
9. TERM AND TERMINATION
9.1. Term. The initial term of this Agreement shall commence on the
Effective Date and shall continue in effect until 31 March 2002 (the
"Initial Term"). Licensor shall continue to provide the Development
Services of the Development Consultants until 31 March 2002.
Thereafter, this Agreement shall automatically renew for additional
one (1) year periods until terminated for convenience by either party
upon not less than three (3) months' prior written notice and
provided that such termination shall be effective on the last day of
a calendar quarter. Whether or not this Agreement is terminated
effective on 31 March 2002, SAP shall have no obligation to make any
license fee payment to Licensor with
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respect to the calendar quarter ended on such date or the calendar
quarter ended on December 31, 2001.
9.2. Termination for Cause. Either party may terminate this Agreement for
Cause, as set forth below. For the purposes of this Agreement,
"Cause" shall me an any situations where (a) either party neglects or
fails to perform a serious, material obligation hereunder, and such
neglect or failure continues unremedied for a period of one (1) month
after written notice (setting forth the particulars of such default)
is provided by the non-breaching party; or (b) either party becomes
insolvent, or proposes any dissolution, liquidation, composition,
financial reorganization or similar proceedings with respect to its
property or business, and such continues unremedied for a period of
sixty (60) days after written notice is provided by the other party.
9.3. Consequences of Termination by Licensor for Cause. Upon any
termination of this Agreement by Licensor for Cause, the licenses
granted hereunder and this Agreement shall terminate automatically
and SAP shall pay Licensor the difference between the Aggregate
License Fee Amount and the sum of all License Fee amounts already
paid to Licensor; provided, however, unless such Termination for
Cause relates to a material, unremedied breach by SAP of its
obligations with respect to the restrictions on its license grants
under Articles 3 and 5 hereof, SAP's License Fee obligations under
Article 8 hereof or SAP's indemnity obligations under Article 13
hereof, SAP and the Applicable Entities shall be deemed to be granted
a nonexclusive, non-transferable, limited, perpetual and fully
paid-up license to use, modify, distribute and sublicense the
Embedded Licensed Software as it exists at the time of such
termination on the same basis (and with the same restrictions) as set
forth in Article 3 hereof.
9.4. Consequences of Termination by SAP for Cause. Upon any termination of
this Agreement by SAP for Cause, SAP and the Applicable Entities
shall be deemed to be granted a non-exclusive, non- transferable,
limited, perpetual and fully paid-up license to use, modify,
distribute and sublicense the Embedded Licensed Software as it exists
at the time of such termination on the same basis (and with the same
restrictions) as is set forth in Article 3 hereof, and SAP shall have
no further obligation to make license fee payments to Licensor
hereunder.
9.5. Termination for Convenience by SAP. SAP shall have the right to
terminate this Agreement for convenience ("Termination for
Convenience") upon written notice to Licensor (a) if any major
competitor of SAP in the enterprise resource planning software or
supply chain software markets acquires an equity interest in Licensor
which, as a percentage of Licensor's then outstanding equity, exceeds
SAP's equity investment in Licensor, (b) Licensor assigns to any
third party (other than its wholly-owned subsidiaries) the assets
representing the Licensed Software or (c) a party (or affiliated
group of entities) other than Phillip Merrick acquires beneficial
ownership of 30% of more of Licensor's outstanding voting shares, and
such party or affiliated group is not reasonably acceptable to SAP.
In such event (i) SAP shall be deemed to be granted a non-exclusive,
non- transferable, limited, perpetual and fully paid-up license to
use, modify, distribute and sublicense the Embedded Licensed Software
as it exists at the time of such Termination for Convenience on the
same basis (and with the same restrictions) as are set
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forth in Article 3 hereof, and (ii) SAP shall pay to Licensor, within
fifteen (15) days following such termination, an amount equal to the
sum of (A) the difference between the Aggregate License Fee Amount
and the sum of all License Fee amounts then having been paid by SAP
to Licensor and (B) all amounts then due to Licensor for Development
Services.
9.6. Consequences of Expiration or Termination or Convenience After the
Initial Term. Upon the expiration of this Agreement or any
termination, other than for cause as set forth above, effective after
31 March 2002, SAP shall be deemed to be granted a non-exclusive,
non-transferable, limited, perpetual and fully paid-up license to
use, modify, distribute and sublicense the Embedded Licensed Software
as it exists at the time of such expiration or termination on the
same basis (and with the same restrictions) as is set forth in
Article 3 hereof, and SAP shall have no further obligation to make
license fee payments to Licensor hereunder.
9.7. End-User Relationships. Termination or expiration of this Agreement
shall not affect any of the individual sublicense agreements between
SAP or the Applicable Entities and End Users. SAP and the Applicable
Entities shall remain entitled to make copies of the Embedded
Licensed Software to the extent required in order to fulfill all
contracts with End Users concluded in the ordinary course of business
prior to the date on which the termination becomes effective
(including for the provision of support to such End Users).
9.8. Communications. The parties hereto agree that communications to End
Users and any publications/press releases regarding any termination
of this Agreement shall be mutually agreed upon, in writing, prior to
distribution.
9.9. Survival. The following provisions shall survive any expiration or
termination of this Agreement: Section 3.4, Section 3.5, Section 6.2,
Section 8.4, this Article 9, Article 10, Article 11, Article 13,
Article 14 and Article 16.
9.10. Payment on Termination. Except as may otherwise be specifically
provided herein, any payments owing or accrued as of the effective
date of termination shall be promptly paid by the respective party to
the other.
9.11. Extension beyond March 31, 2002. This Agreement may be extended
beyond 31 March 2002 for a further five (5) years upon a written
statement by SAP delivered to Licensor by 31 December 2001. Either
party may terminate this Agreement during the extension hereof
without cause with a termination notice of six (6) months to the end
of a calendar quarter.
9.12. Post-Termination Services. In the event of a Termination for Cause or
a Termination for Convenience by SAP, Licensor shall continue to make
available to SAP in Walldorf the two Development Consultants then
provided by Licensor to SAP for performance or the Development
Services for a period of six (6) months after termination of the
Agreement, provided that (i) in the event of a Termination for Cause
by SAP, SAP shall reimburse Licensor with respect to the relocation
expenses of such Development Consultants in the amounts set forth in
Section 7.5 hereof and (ii) in the event of a Termination for
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Convenience by SAP or a Termination for Cause by Licensor, SAP shall
reimburse Licensor for Licensor's reasonable documented burdened
costs in respect of such Development Consultants (which will be
limited to salary, pro rata employee benefit plan costs and
reasonable documented travel and relocation expense reimbursements).
10. COPYRIGHT NOTICE
SAP shall preserve and permit the display of Licensor's copyright
notices in all copies of the Source Code of the Licensed Software and
the Embedded Licensed Software. SAP has the irrevocable right to
refrain from providing notice to End-User's of Licensor's copyright
claims in the opening or "splash" screen of the SAP Software.
However, SAP shall display Licensor's copyright notice in the "About"
box in SAP Software containing the Embedded Software.
11. PROPRIETARY RIGHTS; CONFIDENTIALITY
11.1. Title. Title to and ownership of the Licensed Software shall remain
with Licensor and/or with the respective manufacturer or author of
such Licensed Software (in the case of Third Party Software). All
rights to patents, copyrights, trademarks and trade secrets and other
intellectual property rights in the Licensed Software shall remain
with Licensor and/or with the respective manufacturer or author of
such Licensed Software (in the case of Third Party Software). All
intellectual property rights, confidentiality and proprietary
provisions, rights to patents, copyrights, trademarks and trade
secrets in SAP Software shall remain with SAP and/or with the
respective manufacturer or author of such SAP Software.
11.2. Treatment of Confidential Information. Licensor and SAP recognize
that, in the course of marketing the Licensed Software, Licensor and
SAP may learn or be exposed to confidential and/or proprietary
information which is the property of the other party or other third
parties. Such information will be marked or otherwise identified in
writing as confidential, or will be reasonably identifiable as
confidential. In order to provide an unrestricted basis of
communication, each of Licensor and SAP agrees that it will protect
the other's valuable confidential information with at least the same
degree of care as it protects its own confidential information. Each
party shall restrict disclosure of the other's confidential
information only to those of its employees with a need to know it and
who are under a written obligation to protect the confidential
information in accordance with this Agreement. The particular
provisions of this Agreement shall be deemed confidential in nature
and neither party hereto shall divulge any provisions as set forth
herein to any third parties except to their respective attorneys or
accountants and except as may be required by law.
11.3. Exceptions. Neither party's non-disclosure obligations hereunder
shall extend to any confidential or proprietary information or any
portion thereof which the receiving party can establish:
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(a) was known to the receiving party without restriction prior to
disclosure by the other party or was independently developed
by the receiving party without access to or use, directly or
indirectly, of the disclosing party's confidential
information; or
(b) is now or becomes publicly known through no fault of the
receiving party; or
(c) is required by operation of law to be disclosed, provided,
however, that the disclosing party is given reasonable advance
notice of the intended disclosure and reasonable opportunity
to challenge such disclosure; or
(d) is disclosed to the receiving party without restriction on
disclosure by a third party who has the lawful right to make
such disclosure.
11.4. Use of Names. Unless expressly agreed to in writing, and other than
as specified above or in the parties' joint marketing plan, each
party expressly prohibits any direct use or reference to its name,
trademarks or trade name.
12. WARRANTIES
12.1. Rights. Licensor represents and warrants that it is the owner of the
Licensed Software, and has sufficient copyright, patent, trademark
trade secret and other intellectual property rights therein to enter
into and perform its obligations under this Agreement, and that it
has the right to authorize the use of the Licensed Software, the
modification of the Licensed Software and the sublicensing of the
Embedded Licensed Software to End Users by SAP.
12.2. No Conflict. Licensor represents and warrants that the execution of
this Agreement by Licensor does not conflict with any provision of
any other agreement, court decision or administrative order binding
upon it.
12.3. No Infringement. Licensor represents and warrants that the Licensed
Software does not infringe any copyright, trademark, trade secret,
patent registered in the United States of America, Canada, Japan or
any member country of the European Union or other intellectual
property right of any third party, and that it has no knowledge of
any claims of or rights to claim infringement by the Licensed
Software of any patents registered in jurisdictions other than the
United States of America, Canada, Japan and any member countries of
the European Union.
12.4. Conformity with Specifications. Licensor warrants that the Licensed
Software will conform in all material respects to the specifications
contained in Licensor's then-current applicable documentation.
12.5. Warranty Period. The warranty period for all Licensed Software
delivered hereunder shall extend for six (6) months from the initial
delivery of each version or major release (not including patches and
maintenance releases) of the Licensed Software to SAP.
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12.6. Physical Defects. With respect to any physical defects of the master
media copies of the Licensed Software which SAP reports to Licensor
prior to the expiration of the warranty period, Licensor shall
replace the master media copies free of charge.
12.7. Licensor's Obligations. Licensor's sole obligations in the event of a
warranty claim hereunder (other than under Sections 12.1, 12.2 and
12.3) shall be to provide Third Level Support to SAP under Section
6.3, or, in the event that Licensor is unable to perform its support
obligations hereunder, Licensor shall return to SAP any and all
payments for License Fees and Development Services made by SAP to
Licensor hereunder following the initial delivery of the version or
major release of the Licensed Software causing such breach of
warranty (which, in the case of the delivery of the first version of
the Licensed Software, shall include all payments made by SAP
hereunder for License Fees and fees for Development Services), and
shall release SAP from any further obligations to pay License Fees to
Licensor thereafter.
12.8. Year 2000. Licensor represents and warrants that the Licensed
Software is, and in future releases will be, Year 2000 Compliant. As
used in this Agreement, "Year 2000 Compliant" shall mean the ability
of applicable software to provide the following functions:
(a) consistently handle date information before, during, and after
January 1, 2000, including but not limited to accepting date
input, providing date output, and performing calculations on
dates or portions of dates;
(b) function accurately in all material respects in accordance
with the relevant specifications and without interruption
before, during, and after January 1, 2000, without any change
in operations associated with the advent of the new century
and/or the occurrence of February 29, 2000 (leap day);
(c) respond to two-digit year-date input in a way that resolves
the ambiguity as to century in a disclosed, defined, and
predetermined manner; and
(d) store and provide output of date information in ways that are
unambiguous as to century
provided, however, that the foregoing warranty is made only to the
extent all software and data other than the Licensed Software with
which the Licensor Software interacts is itself Year 2000 Compliant.
12.9. Prior to the date hereof, Licensor has furnished SAP with copies of
its Export License D259464 validated March 11, 1999 from the United
States Department of Commerce, Bureau of Export Administration
("BXA"), and the related Application (Application Control Number
Z163090)) and attached Letter of Explanation. To the best of
Licensor's knowledge, such Export License is in full force and
effect. Except as set forth in the Application and attached Letter of
Explanation, Licensor has not made any representations to BXA with
respect to the export of the Licensed Software to SAP and the
re-export of the Licensed Software by SAP.
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12.10. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 12, LICENSOR DISCLAIMS
ANY AND ALL WARRANTIES WITH RESPECT TO THE LICENSED SOFTWARE AND THE
EMBEDDED LICENSED SOFTWARE, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. LICENSOR DOES NOT WARRANT THAT THE SOFTWARE WILL
OPERATE UNINTERRUPTED OR ERROR-FREE OR THAT ALL ERRORS WILL BE
CORRECTED. THE FOREGOING EXCLUSIONS AND DISCLAIMERS ARE AN ESSENTIAL
PART OF THIS AGREEMENT AND FORMED THE BASIS FOR DETERMINING THE FEES
CHARGED FOR THE LICENSED SOFTWARE.
13. INDEMNIFICATION
13.1. Indemnity by Licensor. Licensor shall fully indemnify, hold harmless
and defend SAP against suits based on any claim that the Licensed
Software infringes any copyright. trademark, trade secrets, patent
rights in the United States of America, Canada, Japan or any member
country of the European Union or other proprietary rights, provided
that the entity concerned gives Licensor prompt written notice of
such suits and permits Licensor to control the defense and settlement
thereof. In the event that, as a result of any such claim of
infringement, SAP is enjoined from using, marketing, or licensing the
Licensed Software, Licensor, at its option, may procure the right for
SAP to continue to use, market, and license the Licensed Software, or
replace or modify at its expense the Licensed Software so as to make
it non-infringing. Licensor, at its sole discretion, may, in lieu of
the remedies above, provide a full refund of License Fees paid
hereunder, amortized on a straight-line basis over a three (3) year
period.
13.2. Exclusions. Licensor shall have no obligation under this Article 13
to the extent any claim of infringement or misappropriation results
from: (i) use of the Licensed Software in combination with the SAP
Software or any other product, end item, or subassembly if the
infringement would not have occurred but for such combination; (ii)
use or incorporation in the Licensed Software of any design,
technique or specification furnished by SAP, if the infringement
would not have occurred but for such incorporation or use; (iii) any
claim based on SAP's use of the Licensed Software as shipped after
Licensor has informed the SAP of modifications or changes in the
Licensed Software required to avoid such claims and offered to
implement those modifications or changes, if such claim would have
been avoided by implementation of Licensor's suggestions. Licensor
shall not be liable hereunder for enhanced or punitive damages which
could have been avoided or reduced by actions within the reasonable
control and knowledge of SAP.
13.3. Indemnity by SAP. SAP shall fully indemnify, hold harmless and defend
Licensor against suits based on any claim arising out of (i) any
third party claim which alleges that the SAP Software incorporating
the Licensed Software infringes upon, misappropriates or violates any
copyrights, trade secrets, patent rights in the United States of
America, Canada, Japan or any member country of the European Union or
registered trademarks of persons, firms or entities who are not
parties to this Agreement where such unlawful
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activity is completely independent of the Licensed Software; (ii) any
warranties or representations SAP or the Applicable Entities make to
End Users beyond the scope of this Agreement; and (iii) for any levy
made pursuant to any transaction under this Agreement in the nature
of customs duties, value added tax (VAT), national sales tax, or any
similar tariffs and fees, provided that the entity concerned gives
SAP prompt written notice of such suits and permits SAP to control
the defense and settlement thereof.
13.4. THE FOREGOING PROVISIONS OF THIS ARTICLE 13 STATE THE ENTIRE
LIABILITY AND OBLIGATIONS OF LICENSOR AND THE EXCLUSIVE REMEDY OF SAP
AND ITS CUSTOMERS, WITH RESPECT TO ANY VIOLATION OR INFRINGEMENT OF
ANY PROPRIETARY RIGHTS, INCLUDING BUT NOT LIMITED TO PATENTS AND
COPYRIGHTS, BY THE LICENSED SOFTWARE OR ANY PART THEREOF.
14. LIMITATION OF LIABILITY
14.1. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, STATUTORY, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR ANY LOST PROFITS, BUSINESS OR REVENUE, LOSS OF USE OF
GOODWILL, OR OTHER LOST ECONOMIC ADVANTAGE, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE LIKELIHOOD OF SUCH DAMAGES; PROVIDED, HOWEVER,
THAT SUCH LIMITATION SHALL NOT APPLY IN RESPECT OF DAMAGES CLAIMED
AGAINST A PARTY BY A THIRD PARTY AS A RESULT OF ALLEGED INFRINGEMENT
OF SUCH THIRD PARTY'S INTELLECTUAL PROPERTY RIGHTS (AS INDEMNIFIED
PURSUANT TO ARTICLE 13 HEREOF).
15. JOINT MARKETING: PUBLICITY
15.1. The parties shall issue a joint press release upon execution of this
Agreement outlining the parties' relationship. The parties shall
agree upon the Joint Marketing Plan attached hereto as Attachment D
upon execution of this Agreement. The Steering Committee shall review
joint marketing plan on a bi-annual basis unless otherwise agreed by
the parties.
15.2. Permitted Use of Trademarks. Each party shall have the right to use
the other party's Trademarks and certifications solely in accordance
with the guidelines set forth in the Joint Marketing Plan.
16. GENERAL
16.1. Notices. All notices shall be in writing and delivered personally, by
mail, recognized overnight courier service or via facsimile. All
notices shall be addressed to the addresses appearing in the
introductory section of this Agreement and shall be deemed delivered
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upon receipt. Each party may change its address by written notice in
accordance with this section.
16.2. Modification. This Agreement may only be modified in writing by SAP
and Licensor. This also applies to any waiver of this written form
requirement.
16.3. Nonwaiver of Rights. The failure of either party to this Agreement to
object to any conduct of the other party that is in violation of the
terms of this Agreement shall not be construed as a waiver thereof,
or as waiver of any future breach or subsequent wrongful conduct.
16.4. Entire Agreement. This Agreement, including all attachments hereto,
shall represent the entire understanding between the parties hereto
relating to the matters herein and supersedes any and all prior
proposals or agreements, whether written or oral, that may exist
between the parties with respect to such matters. No oral side
agreements exist.
16.5. Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of Germany without reference to
the conflicts of law principles. This Agreement shall not be governed
by the United Nations Convention of Contracts for the International
Sale of Goods, the application of which is hereby expressly excluded.
Exclusive venue for all claims arising out of or in connection with
this Agreement shall be the courts of Zurich, Switzerland.
16.6. Severability. If a court finds any provision of this Agreement
invalid or unenforceable, this will not affect any other provision of
this Agreement.
16.7. Independent Contractors. Both parties represent that they are
independent contractors in performing all obligations hereunder, and
nothing contained herein shall be deemed or construed to create any
employer/employee relationship or any partnership or joint venture
between the parties or their respective directors, officers,
employees, or independent contractors.
16.8. Assignments. Unless otherwise provided for in this Agreement, neither
party shall transfer, assign or sublicense its rights or obligations
under this Agreement to any other third party' in whole or in part,
without the prior written consent of the other party, which consent
may be withheld, in the discretion of such party, for any or no
reason.
16.9. Basis of Bargain. EACH PARTY RECOGNIZES AND AGREES THAT THE WARRANTY
DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT
ARE MATERIAL BARGAINED FOR BASES OF THIS AGREEMENT AND THAT THEY HAVE
BEEN TAKEN INTO ACCOUNT AND REFLECTED IN DETERMINING THE
CONSIDERATION TO BE GIVEN BY EACH PARTY UNDER THIS AGREEMENT AND IN
THE DECISION BY EACH PARTY TO ENTER INTO THIS AGREEMENT.
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17. ATTACHMENTS
The following documents are incorporated as an integral part of this
Agreement:
Attachment A -- Licensed Software
Attachment B -- Development Services
Attachment C -- Support Services
Attachment D -- Joint Marketing Plan
Attachment E -- Third Party Software
Attachment F -- webMethods End User License Agreement
WEBMETHODS, INC. SAP AG
BY: BY:
------------------------------------------- -------------------------------------------
TYPED: TYPED:
----------------------------------------- -----------------------------------------
TITLE: TITLE:
----------------------------------------- -----------------------------------------
DATE: DATE:
------------------------------------------ ------------------------------------------
SAP AG
BY:
-------------------------------------------
TYPED:
----------------------------------------
TITLE:
----------------------------------------
DATE:
-----------------------------------------
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ATTACHMENT A
Licensed Software
1. webMethods, Inc. B2B Server
2. webMethods, Inc. B2B Server for R/3
3. webMethods, Inc. B2B Developer
including updates, new Versions and Releases and resulting Licensed Software.
A-1
<PAGE> 22
ATTACHMENT B
Development Services
See Attached
B-1
<PAGE> 23
ATTACHMENT B
Support Services
This Attachment sets forth the terms and conditions pursuant to which SAP and
Licensor will cooperate in providing support services for Software Products to
End Users.
1. DEFINITIONS
For the purposes of this Attachment, the following expressions shall
have the meaning as set forth below. Expressions not specifically
defined in this Attachment shall have the meaning as set forth in
Section 1 of this Agreement.
1.1. "Case" shall mean the support incident starting with the complete
failure or the functional impairment of the Embedded Licensed Software
or with the reasonable probability that a defect is caused by the
Embedded Licensed Software. As soon as either party's support
organization is informed, the incident becomes a Case.
1.2. "Case Remedy" shall mean the remedy for a Case taking the form of
eliminating the defect, providing a new program version, or
demonstrating how to avoid the effects of the defect with reasonable
effort. Case Remedy corresponds with error corrections, patches, bug
fixes, workarounds, replacement deliveries or any other type of
software or documentation corrections or modifications.
1.3. "Common Case Priorities" shall mean the priorities as referenced in
Exhibit C hereto.
1.4. "End User" shall mean any End User as defined in Article 1 of the
Agreement who has a valid support contract with SAP for SAP Software
which contains Embedded Licensed Software.
1.5. "Licensor Support Terminology" shall mean the structure of Licensor's
support organization and the internal assignment of tasks as described
in Exhibit A hereto.
1.6. "SAP Support Terminology" shall mean the structure of SAP's support
organization and the internal assignment of tasks as described in
Exhibit B hereto.
1.7. "Support Site" shall mean the location out of which either of the
parties provide support services for analysis and remedy of Cases. The
Support Sites act as interfaces between either Support Partner's
technical support organization. The Support Sites correspond with the
locations of either party's technical support departments as
referenced in Exhibit H hereto.
2. GEOGRAPHIC SCOPE
The geographic scope of this Attachment extends to all countries to which SAP
sells and licenses SAP Software under this Agreement.
B-2
<PAGE> 24
3. SUPPORT SERVICES
The parties agree on the following principles for providing support
services for Embedded Licensed Software to End Users.
3.1. SAP's support organization shall be solely responsible for receiving
Cases and providing initial problem evaluation to End Users
("First-Level Support"), and attempting to provide End Users with a
Case Remedy in accordance with the requirements set forth by the
Common Case Priorities and in Section 5 of this Attachment.
3.2. The parties agree to the Common Case Priorities as the basis for the
classification of and adequate response to cases.
3.3. In the event that SAP, despite reasonable review and/or effort by its
Development Support organization, cannot provide End Users with a Case
Remedy in accordance with the requirements set forth by the Common
Case Priorities and in Section 5 of this Attachment, SAP's Development
Support organization will notify Licensor of the details of the Case
(including, if possible, the replication of any bug or error). Upon
receipt of such notification and information, Licensor agrees to
provide End Users with a Case Remedy in accordance to the requirements
set forth by the Common Case Priorities and in Section 5 of this
Attachment. Both parties will use reasonable efforts to assist the
other party in resolving the End User Cases in a prompt manner.
3.4. The parties agree that at least one technical support contact (Section
4.1 of this Attachment) is available locally or remotely to assist the
other party when needed.
3.5. The parties agree that escalation contacts (Section 4.1 of this
Attachment) will be available on a 24 hours, 7 days a week basis to
handle emergency situations.
3.6. With respect to different priority categories pursuant to the Common
Case Priorities, Licensor agrees that priority 1 problems are handled
24x7 and all other priorities (2, 3 and 4) during normal business
hours.
3.7. Both parties agree on a problem transfer and escalation procedure
worldwide for End User problems. Details are given in the Support
Process Description in Exhibit D hereto. The procedure might be
changed at any time on mutual agreement in accordance with the
business plan described in Section 4.3 hereof and business needs.
3.8. Licensor will establish on-site resources in accordance to Section 6
of this Attachment dependent upon the business plan described in
Section 4.3 and business requirements as mutually agreed, for best
performance Case Remedy and Case Remedy of non-specific (gray zone)
Cases. Establishing on-site resources requires to adapt the Support
Process Description (Exhibit D hereto) accordingly.
3.9. Either party's support organization will ensure that the support
personnel are trained on the other party's products in accordance to
Section 7 of this Attachment.
B-3
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CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. ASTERISKS
DENOTE SUCH OMISSIONS.
3.10. SAP's support organization will use reasonable efforts in tracking any
Case down to the level of investigation specified in Exhibit F before
transferring the Case to Licensor's support organization.
4. OBLIGATIONS OF BOTH PARTIES
4.1. Each party will designate in Exhibit H hereto the names and contact
information of the technical support departments and in Exhibit I the
names and contact information of individuals within its respective
support organization that will be providing technical support
(technical support contacts) and escalation support (escalation
contacts) to the other party. The contact information includes,
without limitation, direct dial telephone/fax number. special reseller
support ID (if applicable), electronic access (Internet/WWW: user,
password, special ID). The designated contacts may be changed at any
time by verbal notice to the other party confirmed in writing at least
10 business days prior to such changes.
4.2. Each party will designate in Exhibit I the names and contact
information of the primary individuals responsible for facilitating
communications between the parties. Each party may change such
information at any time by written notice to the other party.
4.3. The parties will set up a business plan which should include expected
case load, breakdown of current issues, mean time to repair (mttr),
mean time between failure (mtbf), engineering change policy and
procedures, software release strategy, overall support strategy and
locations of offices, subsidiaries and number of on-site engineers.
The parties will review the business plan with special emphasize on
numbers, quality of the dedicated personnel and resources, on a
quarterly basis and will mutually agree on additional commitments as
business circumstances require.
5. SUPPORT LEVELS
5.1. The Common Case Priorities apply to the support of the Embedded
Licensed Software.
5.2. In order to ensure SAP's support of the Embedded Licensed Software
toward End Users in compliance with the Common Case Priorities,
Licensor agrees to respond to SAP in accordance with the times as
shown in the table below. These are the times Licensor gives SAP
feedback about the case acceptance (initial response time) and status
of the solution process (update period). Start time is the date and
time of the Case receipt by Licensor. If the Case could not be solved
in the time passed (update period), SAP will escalate the Case within
Licensor. Thereafter Licensor will use its best efforts to solve the
case within the last period (solving period).
*
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Priority 1: minutes, hours and days are in real-time
Priority 2, 3, 4: hours and days are in business time
6. ON-SITE RESOURCE
In accordance with Article 7 of the Agreement, Licensor will send the
agreed upon number of Development Consultants to the designated SAP
development site(s). Licensor's Development Consultants are highly
skilled in the Licensed Software, with a support point of view, and
have profound product knowledge in SAP's Software. At SAP's request,
the Development Consultants will work with the SAP technical support
department to resolve End User Cases. If necessary, the Development
Consultants will provide support in direct communication with End
Users.
7. TECHNICAL TRAINING
7.1. SAP and Licensor will train an adequate number of personnel of its
technical support contacts in the other parties software product as
needed due to the business plan, to handle the problem load and to
fulfill the level of Case Investigation specified in Exhibit F hereto.
7.2. Training sessions shall be provided by the technical support or
education organizations of each party in the training facilities in
which it generally provides such training or at such other location as
the parties may mutually agree. The content and scheduling of the
training sessions shall be determined by the party providing the
training and shall be substantially similar to the standard training
sessions it provides to its own employees.
8. TECHNICAL/SUPPORT INFORMATION DATABASES
8.1. Licensor posts technical information to its technical information
database.
8.2. SAP posts the support knowledge in its support information database in
the form of notes and Hot News.
8.3. Each party shall provide the other party free of charge the right to
(a) access those portions of its technical/support information
database that the other party determines, in its sole discretion, are
reasonably necessary for the purpose of facilitating the resolution of
specific End User Cases; and to (b) use such portions of the
technical/support information database for the foregoing purpose.
8.4. Neither party may license, transfer, sell, lease, loan, distribute or
otherwise provide the other party's technical/support information
database, or any portion thereof, to any third party, unless expressly
agreed to in writing in advance by the parties.
B-5
<PAGE> 27
9. TECHNOLOGY AND INFORMATION EXCHANGE
9.1. Both parties will cooperate in providing automatic case transmission
between either party's call management system. This includes the
provision of interface specifications and implementation/test support.
This statement does not constitute any commitment as to the
responsibility for implementation costs of automatic case
transmission.
10. REVIEW MEETINGS
10.1. The parties will meet quarterly at a mutually agreed upon time and
location to review and discuss the worldwide support performance
pursuant to this Attachment.
10.2. On executive level both parties will meet during the SAP partner
congress (special event, once a year) to discuss the strategic view of
the support cooperation.
11. COSTS. FEES AND EXPENSES
Costs, fees and expenses are due as stipulated generally in the
Agreement. Otherwise, support services are free of charge to the other
party.
B-6
<PAGE> 28
EXHIBIT A
Licensor Support Terminology
A-1
<PAGE> 29
EXHIBIT B
SAP Support Terminology
Support Organization and Assignment of Tasks
- Local Support (First-Level Support)
- Country specific support
- Only available during business hours (prime shift)
- Generalist skills
- Primary Tasks
- Translation from customer native language to English
- Assign problem record to specific product component
- Secondary Tasks
- Search technical support database for known defects (i.e. notes or old
cases)
- Check functionality of customers remote connection
- Regional Support (First and Second Level Support)
- Located in the following regions:
- USA (Philadelphia) North and South America
- Europe (Walldorf and Ireland): Europe, South Africa, Middle East
- Singapore: South West Asia and Pacific (Australia. New Zealand)
- Japan: Northeast Asia, Japan
- Worldwide coverage (Follow the Sun principal, covered by USA, Europe
and Singapore)
- Product specific skills
- Primary Tasks
- Search technical support database for known defects (i.e., note or old
cases)
- Secondary Tasks
- Check customizing
- Analyze dumps, write traces or traps, reproduce problems
- Provide circumvention
- Write notes describing customer fix
- Development Support (Third Level Support)
- Located in Walldorf (Germany) and Palo Alto (USA)
- Available during business hours, callout on exception basis
B-1
<PAGE> 30
- In depth product specific skills
- Provides code fixes to customers (Hot Packages)
- Works closely with, or may be a part of the development team
B-2
<PAGE> 31
EXHIBIT C
Common Case Priorities
The End User himself defines the case priority/severity in accordance to the
following general rules.
- Priority 1: Very high:
A message with priority "very high" is justified when extremely
serious interruptions in normal operations occur: Tasks that brook no
delay whatsoever cannot be executed. This is caused by a complete
crash of or by interruptions in main functions of the respective
software product.
The message requires immediate processing, as the breakdown can result
in significant losses.
- Priority 2: High:
A message with priority "high" is justified when serious interruptions
in normal operations occur: Important tasks cannot be performed. This
is caused by a malfunctioning or unavailable function in the
respective software product that is urgently required to deal with the
current situation.
The message requires quick processing, as a lasting malfunction could
cause serious interruptions to all work in the production system
- Priority 3: Medium:
A message with priority "medium" is justified when interruptions in
normal operations occur This is caused by a malfunctioning or
unavailable function in the respective software product.
- Priority 4: Low:
A message with priority "low" is justified when only minor
interruptions in normal operations occur. This is caused by a
malfunctioning or unavailable function in the respective software
product that is not required on a daily basis or not used regularly.
- Classification of Test Systems:
Identical problem situations in test systems will normally justify a
priority that is one level lower than the equivalent priority in a
production system.
C-1
<PAGE> 32
EXHIBIT D
Support Process Description
1. PROCESS DESCRIPTION
1.1. SAP's support organization shall be solely responsible for receiving
Cases and providing initial problem evaluation to End Users. Before
transferring the case to Licensor, SAP will make reasonable efforts to
track any case down to the level of investigation specified in Exhibit
F. If SAP is unable to resolve the problem in a timely manner, SAP
will initially contact the designated technical support department(s),
and, if needed, the technical support contact(s) of Licensor.
1.2. SAP will supply the technical support department/contact with the
required End User information specified in Exhibit E. Licensor's
technical support department/contact will then use reasonable efforts
to provide the End User with a Case Remedy that is satisfactory to the
End User in accordance with the applicable priority category of the
Common Case Priorities.
1.3. Each party shall respond to and use reasonable efforts to resolve End
User Cases in a prompt manner. The solving party will inform the other
of the final resolution to achieve a Case closure. The decision on
whether and when a Case is successfully resolved and can therefore be
closed is done by the End User. Each party acknowledges that, despite
a party's reasonable efforts, not all problems may be solvable.
2. ESCALATION OF END-USER PROBLEMS
2.1. The escalation procedure ("escalation") will be followed if either
party believes a Case requires additional attention by the other party
to resolve the problem. The escalation process is mainly in progress
when a technical problem situation arises, however, solution of this
problem requires non technical support for solving it. Escalation is
triggered by high levels of End User anxiety when either case occurs:
(a) A case remedy leads to a not satisfactory End User solution by
either party involved;
(b) SAP concerns about the solution given by Licensor (or v.v.);
(c) the End User who reported the original case is dissatisfied
with a given solution and comes back to SAP.
2.2. For direct escalation, either party's escalation contact or support
engineer may call the other party's escalation contact or support
engineer to start a case escalation.
Once a party requests escalation a mutual action plan will be
developed which defines steps, to resolve End User problem. The steps
are at minimum:
D-1
<PAGE> 33
(a) address resources or increase them if already addressed, and
(b) define responsibilities for each action, and
(c) expected completion date and time of each action, and
(d) contingency/next steps if desired results are not achieved.
2.3. This action plan will be modified by mutual agreement among the
designated contacts whenever the situation requires.
2.4. When the End User states the problem is resolved or the situation no
longer requires escalation, the escalation is closed. Each party will
exchange with the other party the final reports summarizing the
actions taken and results of these actions, likelihood of problem
recurrence and recommended future actions.
2.5. A review of the case will be provided for the End User at the End
User's request or upon the request of SAP.
D-2
<PAGE> 34
EXHIBIT E
Required End User Information
SAP REQUIRED END USER INFORMATION:
- End User Name
- Company Name/Address
- End User Telephone Number
- SAP Contract Number (i.e., customer number, installation number)
- R/3 Release, Database Type and Release, Operating-System-Type
- System type (Production, Testsystem)
- Description of Problem
- Name and local Phone Number of Respective Licensor
- Technical Contact Transferring the Call
- Case number of End Users incident in Licensor call tracking system
LICENSOR REQUIRED END USER INFORMATION:
- End User Name
- Company Name/Address
- End User Telephone Number
- Licensor Support Contract Number
- Description of Problem
- Name and Local Phone Number of Respective SAP Technical Contact
Transferring the Call
- Case number in SAP's call tracking system
E-1
<PAGE> 35
EXHIBIT F
Level of Investigation
SAP will provide the initial problem evaluation through Local and Regional
Support. The Regional Support will make a determination of whether a Case is
due to a problem with the integration or the Embedded Licensed Software. All
Cases requiring Development Support will initially be transferred to SAP'S
Development Support organization. If the Case appears to be due to incorrect
installation of the Embedded Licensed Software, due to a defect in the Embedded
Licensed Software's modules of integration, due to use of the Embedded Licensed
Software or due to a defect in the Embedded Licensed Software, SAP Development
Support will refer the Case to Licensor.
If available, SAP Development Support will include specific identification of
the cause of the problem where possible and providing test cases of same, to
the extent practicable in the circumstances.
F-1
<PAGE> 36
Exhibit 10.2
Exhibits G and H to Attachment B and Attachment C to Exhibit 10.2 to the
Registration Statement have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The omitted attachments do not contain information that is
necessary to understand the terms of the agreement or relevant to investors in
making an investment decision. The Registrant agrees to furnish the omitted
attachments supplementally to the Commission upon request.
<PAGE> 37
ATTACHMENT D
Joint Marketing Plan
SAP to provide the following to Licensor:
- issuing a joint press release with respect to an initial announcement
of the intent of this Agreement;
- participation in industry analyst activities;
- upon reasonable request SAP agrees to provide reasonable references to
Licensor customers;
- presenting and exhibiting at SAP Tech Ed and Sapphire at standard cost
for SAP partners;
- case studies/customer solutions;
- promotion in SAP properties - SAPFlash, SAPInfo Magazine series, etc.,
and other user groups;
- use of approved SAP quotes in ads, and other collateral;
- listing as Development Partner on SAP Web site.
<PAGE> 38
CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406
UNDER THE SECURITIES ACT OF
1933, AS AMENDED. ASTERISKS
DENOTE SUCH OMISSIONS.
ATTACHMENT E
Third Party Software
I. Essential Third Party Software
1. *
2. *
3. *
4. *
II. Non-Essential Third Party Software
1. ODI Object Store (for high availability)
2. RSA Data Security, Inc. BSafe and JSafe encryption software.
<PAGE> 39
ATTACHMENT F
webMethods End User License Agreement
See Attached.
<PAGE> 40
WEBMETHODS, INC. SOFTWARE LICENSE AGREEMENT
Licensee: __________________________________________________________________
Address: __________________________________________________________________
Order number: __________________________________________________________________
Software:
Name and Version of Software: B2B Developer, Version _______________
Number of Licenses Granted: ______________________________________
Name and Version of Software: B2B Integration Server, Version ______
Number of Identified Users: ______________________________________
Number of Client-side B2B
Deployments ______________________________________
Term: Two (2) years from delivery
--------------------------------------------------------------------------
License fee:
-------------------------------------------------------------------
The License fee also includes the following training and/or consulting:
Training:
----------------------------------------------------------------------
Consulting:
--------------------------------------------------------------------
Name, email address and telephone number of the Licensee's designated contact
person for receipt of software activation keys and download instructions:
--------------------------------------------------------------------------------
Name, email address and telephone number of the Licensee's designated technical
contact person:
--------------------------------------------------------------------------------
Additional terms/remarks:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THIS SOFTWARE LICENSE AGREEMENT (THIS "AGREEMENT") IS MADE AS OF THE DATE SET
FORTH BELOW BY AND BETWEEN WEBMEUHODS, INC. ("WEBMETHODS") AND THE LICENSEE
NAMED BELOW ("LICENSEE"). THIS AGREEMENT IS GOVERNED BY IRE TERMS SET FORTH ON
TH1S PAGE (THE "COVER PAGE") AND THE TERMS AND CONDITIONS ATTACHED TO THIS
<PAGE> 41
AGREEMENT AS SCHEDULE A. WEBMETHODS AND LICENSEE HAVE READ AND AGREE TO BE BOUND
BY SUCH TERMS.
WEBMETHODS LICENSEE:
---------- ---------
WEBMETHODS, INC.
---------------------------------
Company Name
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------ ------------------------------
Address: Address:
---------------------------- ----------------------------
---------------------------- ----------------------------
Date: Date:
------------------------------- -------------------------------
<PAGE> 42
SCHEDULE A
TERMS AND CONDITIONS OF SOFTWARE LICENSE AGREEMENT
1. LICENSE GRANT.
1.1 Subject to the terms of this Agreement, webMethods hereby grants to
License a nontransferable, nonexclusive, limited license to use the webMethods
computer software product(s) described on the Cover Page, together with all
documentation and other materials accompanying such product(s) (together, the
Software").
1.2 Licensor will supply to Licensee a single master copy of the
Software, and Licensee may make that number of copies of the Software which is
specified on the Cover page. Licensee may make one (1) additional copy of the
Software for archival purposes. At no time will Licensee permit the Software to
be used by more than that number of users which is specified on the Cover Page.
Licensee will keep records of each copy made, where such copy is located and the
authorized user thereof. Such records will be available for inspection at any
reasonable time by Licensor upon ten (10) days' notice.
1.3 The license granted hereunder is not perpetual but is granted for a limited
term (the "Term"), as set forth on the Cover Page and described in Section 3.1.
1.4 The license granted hereunder is for Licensee's internal use only. Neither
this Agreement nor the Software may be sold, leased, assigned, sublicensed or
otherwise transferred, in whole or in part, to any third person.
1.5 Licensee has the right to develop interfaces to the Software for use by
Licensee in conjunction with Licensee's use of the Software. Such
Licensee-developed software interfaces will remain the property of Licensee.
1.6 From time to time after the date hereof Licensee may wish to license
additional copies of the Software. Upon Licensee's order and webMethods'
acceptance of such additional license request, such additional copies will be
licensed to Licensee on the terms and subject to the conditions of this
Agreement, and this Agreement will be deemed amended to reflect such increased
number of copies.
2. DELIVERY: INSTALLATION.
2.1 The Software is distributed electronically over the internet through a
password-protected web page. Upon execution and delivery of this Agreement and
acceptance by webMethods, webMethods will deliver a software activation password
key and software download instructions to the Licensee via an e-mail message
sent to the designated contact person specified on the Cover page. Licensee
agrees that acceptance of the Software will occur upon delivery, via e-mail, of
the software activation key and download instructions.
2.2 Licensee will be solely responsible for installation of the Software.
3. TERM; TERMINATION.
3.1 The term of this Agreement will commence on the date on which the last
party hereto executes this Agreement and will terminate upon the expiration of
the
<PAGE> 43
time period specified in the "Term" section of the Cover page.
3.2 In addition, webMethods may terminate this Agreement any time if Licensee
fails to comply with any of the terms or conditions of this Agreement.
3.3 Upon the termination of this agreement for any reason, Licensee will
discontinue all use of the Software and will uninstall and return or destroy it
together with all backup, archival and other copies then in its possession or
control. At webMethods' request, Licensee will verify in writing to webMethods
that such actions have been taken.
4. PAYMENT.
4.1 Licensee will pay to webMethods the License Fee specified on the Cover Page
not later than thirty (30) days from the date the software activation key is
delivered to Licensee.
4.2 Licensee agrees to pay interest, at the rate of one and one-half percent
(1.5%) per month, on any amounts not paid within such thirty (30) day period.
4.3 All payments under this Agreement are exclusive of taxes and duties, and
Licensee agrees to bear and be responsible for the payment of all taxes and
duties including, but not limited to, all sales, use, rental, receipt, personal
property and other taxes (but excluding taxes based upon webMethods' income),
which may be levied or assessed in connection with this Agreement.
5. PROPRIETARY INFORMATION.
5.1 Licensee acknowledges that webMethods is the owner of the Software, that
the Software is confidential in nature and not in the public domain, that
webMethods claims all intellectual and industrial property rights granted by law
therein and that, except as set forth herein, webMethods does not hereby grant
any rights or ownership of the software to Licensee or any third party. Except
as set forth herein, Licensee agrees not to copy or otherwise reproduce the
Software or any part thereof, in whole or in part, without webMethods' prior
written consent. Licensee further agrees not to reverse engineer, disassemble or
decompile the Software in whole or in part or otherwise attempt to discover or
reproduce the source code thereof or its equivalent. Licensee further agrees to
take all reasonable steps to ensure that no unauthorized persons having access
to the Software and that al authorized persons having access to the Software
will refrain from any such disclosure, duplication, or redistribution except to
the extent reasonably required in the performance of Licensee' duties under this
Agreement.
5.2 Licensee agrees to accord the Software and the Documentation and all other
confidential information relating to this Agreement the same degree and methods
of protection as Licensee undertakes with respect to its confidential
information, trade secrets and other proprietary data.
5.3 Licensee agrees not to challenge, directly or indirectly, the right, title
and interest of webMethods in and to the Software, nor the validity or
enforceability of webMethods' rights under applicable law. Licensee agrees not
to directly or indirectly, register, apply for registration or attempt to
acquire any legal protection for any of the Software or any proprietary rights
therein or to take any other action which may adversely affect webMethods'
right, title or interest in or to the Software in any jurisdiction.
<PAGE> 44
5.4 Licensee acknowledges that, in the event of a breach by Licensee of its
obligations under this Article 5, webMethods may immediately terminate this
Agreement, without liability to Licensee and may bring an appropriate legal
action to enjoin any such breach hereof, and will be entitled to recover from
Licensee reasonable legal fees and costs in addition to other appropriate
relief.
5.5 Licensee agrees to notify Licensor immediately and in writing of all
circumstances surrounding the unauthorized possession or use of the Software and
Documentation by any person or entity. Licensee agrees to cooperate fully with
Licensor in any litigation relating to or arising from such unauthorized
possession or use.
5.6 Notwithstanding any other provision of this Agreement, the obligations set
forth in this Article 5 will survive the termination of this Agreement for any
reason.
6. WARRANTIES.
6.1 webMethods hereby represents and warrants that it has the right to grant a
license to use the Software and that it has the right and power to enter into
this Agreement. webMethods warrants that the Software, when properly used, will
operate substantially in accordance with the specifications contained in its
documentation, for a period of ninety (90) days from the date of delivery.
webmethods' entire liability and Licensee's exclusive remedy under this
warranty, which is subject to Licensee providing webMethods with a written
statement of defects, will be that webMethods will:
A. Use reasonable commercial efforts to correct, or provide a workaround
for, malfunctions in the Software;
B. Provide reasonable telephone consultation during webMethods' normal
business hours (8 a.m. EST - 6 p.m. EST) with webMethods' technical support
staff on the use of the Software; and
C. Provide updates and enhancements to the Software, provided all
updates and enhancements are generally made available to licensees of the
Software.
6.2 webMethods does not warrant that Software will operate uninterrupted or
error free, that the functions contained in the Software will operate in the
combination with other software or hardware selected by Licensee, or that the
Software will meet Licensee's requirements. webMethods' warranty obligations
will be void if the Software is modified without the written consent of
webMethods. The warranties set forth in this Article 5 are expressly subject to
the limitations of Article 8.
6.3 EXCEPT AS SPECIFICALLY SET FORTH HEREIN, WEBMETHODS DOES NOT MAKE ANY
EXPRESS OR IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTIES
ARISING BY STATUTE, COURSE OF DEALING, CUSTOM OR USAGE, TRADE PRACTICE OR
OTHERWISE.
7. INDEMNIFICATION.
7.1 webMethods will defend Licensee against any claim that the Software
licensed hereunder infringes any United States patent, trade secret or
copyright, provided that Licensee notifies webMethods promptly in writing of
such claim and provided further that such claim does not arise from (i) use of
any version of the Software other than the original, unmodified version
<PAGE> 45
provided to Licensee; (ii) use of the Software with any third party software or
hardware; (iii) use of the Software in a manner inconsistent with the
documentation accompanying the Software; or (iv) use of the Software in a manner
which breaches this Agreement. Licensee will permit webMethods to defend,
compromise or settle such claim in webMethods' sole discretion and will provide
all available information and assistance to enable webMethods to do so. Licensee
will have no authority to compromise or settle such claim on behalf of
webMethods. If webMethods determines that the Software is or is likely to be the
subject of a claim of infringement, webMethods will have the right (i) to
replace Licensee's copy of the Software with non-infringing software that has
substantially equivalent functionality; (ii) to modify the Software so as to
cause the Software to be free of infringement; (iii) to procure, at no
additional cost to Licensee, the right to continue to use the Software; or (iv)
to terminate the license to use the Software and related documentation, and
refund to License the applicable license fee as depreciated on a straight-line
three (3)-year basis.
7.2 webMethods will have no liability for any claim of patent, trade secret or
copyright infringement based on (a) Licensee's use of other than the then latest
release of the Software, if such infringement could have been avoided by the use
of the latest release of the Software and such latest version has been made
available to Licensee, (b) use of the Software in combination with software,
hardware or other materials not provided by webMethods, including, without
limitation, any software interfaces developed by Licensee pursuant to Section
1.5 hereof.
7.3 In no event will webMethods be liable for any claim of infringement of any
copyright, patent, trade secret, database right or other intellectual property
right based on Licensee's use of Software to obtain or process any data or
information from any third party. Licensee acknowledges that it is solely
responsible for securing the appropriate rights to use any such data or
information.
7.4 THIS ARTICLE 7 STATES THE ENTIRE LIABILITY OF WEBMETHODS WITH RESPECT TO
THE INFRINGEMENT OF PATENT, TRADE SECRET AND COPYRIGHT RIGHTS BY THE SOFTWARE OR
ANY PARTS THEREOF AND WEBMETHODS WILL HAVE NO ADDITIONAL LIABILITY TO LICENSEE
WITH RESPECT TO ANY ALLEGED OR PROVEN INFRINGEMENT THEREOF.
8. LIMITATION OF LIABILITY.
8.1 IN NO EVENT WILL WEBMETHODS BE LIABLE FOR ANY LOST REVENUES, PROFITS,
BUSINESS OR INTERRUPTION OF BUSINESS OR OTHER SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, EVEN IF WEBMETHODS HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY OF ANY KIND, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY.
WEBMETHODS' MAXIMUM LIABILITY TO LICENSEE FOR ANY REASON (OTHER THAN DEFENSE OF
INFRINGEMENT CLAIMS UNDER SECTION 7.1 HEREOF) WILL BE LIMITED TO THE LICENSE
FEES PAID BY LICENSEE HEREUNDER.
9. GENERAL
<PAGE> 46
9.1 If the Software is acquired under the terms of a proposal or agreement with
the United States Government or any contractor thereof, the Software is licensed
to the United States Government with restricted rights and is subject to the
following: (a) For acquisition by or on behalf of civilian agencies, as
necessary to obtain protection as "commercial computer Software" and related
documentation in accordance with the terms of this Commercial Software Agreement
as specified in 48 C.F.R. 12.212 of the Federal Acquisition Regulations and its
successors; (b) For acquisition by or on behalf of units of the Department of
Defense ("DoD") as necessary to obtain protection as "commercial computer
Software" and related documentation in accordance with the terms of this
commercial computer Software license as specified in 48 C.F.R. 227-7202-2 of the
DoD F.A.R. Supplement and its successors.
9.2 If the performance of this Agreement or any obligation hereunder, except
for the making of payments hereunder, is prevented, restricted or interfered
with by reason of fire, flood, earthquake, explosion or other casualty or
accident, strikes or labor disputes, inability to procure or obtain delivery of
parts, supplies or power, war or other violence, any law, order, proclamation,
regulation, ordinance, demand or requirements or any governmental agency, or any
act or condition whatsoever beyond the reasonable control of the affected party,
the party so affected will take all reasonable steps to avoid or remove such
cause of nonperformance and will resume performance hereunder with dispatch
whenever such causes are removed.
9.3 Licensee will not export, re-export or transfer, whether directly or
indirectly, the Software or any system containing the Software outside the
United States of America without first obtaining the prior written consent of
webMethods and thereafter complying with the applicable export and import laws
of the United States of America and the country in which the Software is to be
used.
9.4 This Agreement is made and will be governed by and construed in accordance
with the laws of the Commonwealth of Virginia, without giving effect to its
conflicts-of-laws provisions. Licensee consents to personal jurisdiction in the
Commonwealth of Virginia.
9.5 Licensee acknowledges that a breach by Licensee of the terms of this
Agreement relating to Licensee's use or misuse of the Software will cause
webMethods irreparable harm, the exact value of which is not readily
ascertainable. Therefore, the parties agree that webMethods may, in addition to
any other remedies available to it, obtain injunctive relief in order to prevent
further breach of any provision of this Agreement.
9.6 This Agreement sets forth the entire agreement and understandings between
the parties hereto with respect to the subject matter hereof. This Agreement
merges all previous discussions and negotiations between the parties and
supersedes and replaces any and every other agreement, which may have existed
between webMethods and Licensee with respect to the subject matter hereof.
9.7 Any modification or amendment of any provision of this Agreement must be in
writing and bear the signature of the duly authorized representative of each
party.
9.8 The failure of either party to exercise any right granted herein, or to
require the performance by the other party hereto of any provision of this
Agreement, or the waiver by either party of any breach of this Agreement, will
not prevent a subsequent
<PAGE> 47
exercise or enforcement of such provisions or be deemed a waiver or any
subsequent breach of the same or any other provision of this Agreement.
9.9 In any provision of this Agreement is determined by a court of competent
jurisdiction to be in violation of any applicable law or otherwise invalid or
unenforceable, such provision will to such extent as it will be determined to be
illegal, invalid or unenforceable under such law be deemed null and void, but
this Agreement will otherwise remain in full force and effect.