<PAGE>
EXHIBIT 10.16
LICENCE AND CO-MARKETING AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of the 26/th/ day of May, 2000
("Effective Date") by and between Docent Netherlands B.V. whose principal place
of business is at Planetenbaan 100, 3606 AK Maarssenbroek, The Netherlands
("Docent") and FT Knowledge Limited, a company registered in England and Wales
under number 2970324, with its registered office at Number One Southwark Bridge,
London SE1 9HL ("FTK") (Docent and FTK may be referred to individually as a
"Party," or collectively as the "Parties").
WHEREAS:
A Docent has developed software programs and technology enabling a World
Wide Web distributed learning system for use by organisations to
facilitate course management, information exchange, personal information
management, campus portal, assessment, management and electronic commerce.
FTK is one of the world's leading providers of business education and
management development and specialises in providing courses and learning
resources that are highly relevant to the needs of the business and those
people who work within it.
B FTK desires to licence certain of Docent's software programs and
technology and purchase certain services related thereto to make FTK's
courses and learning resources available through the World Wide Web to its
corporate customers, and to their customers.
C Each Party also desires to co-operate in marketing the other Party's
products and services and referring potential customers to the other
Party.
NOW, THEREFORE, in consideration of the promises and mutual covenants herein,
the Parties agree as follows:
1. DEFINITIONS.
"Affiliate" shall mean:
(1) with respect to FTK, any other
entity from time to time within the
operational control of FTK, and (a)
which is within the Pearson Group,
whether directly or indirectly, through
one or more intermediaries, including
but not limited to FT Knowledge Inc.,
FT Knowledge LLC, New York Institute of
Finance Inc., and NYIF (Holdings) LDC;
or (b) in respect of which FTK, FT
Knowledge Inc., FT Knowledge LLC, New
York Institute of Finance Inc. or NYIF
(Holdings) LDC owns more than 50% of
the equity or other ownership interest
of the entity; or (c) the principal
business activity of which is the
providing of courses and learning
resources relating to business
education and management development;
and
(2) with respect to Docent, any
company within the direct or indirect
ownership of the ultimate parent
company of Docent.
For the avoidance of doubt, all rights
and benefits accruing to an Affiliate
under this Agreement shall cease
immediately upon such Affiliate ceasing
to be an Affiliate.
"Confidential Information" shall mean any non-public information
about a Party, including, without
limitation, the Party's business,
vendors, customers, products, services,
employees, finances, costs, expenses,
financial or competitive condition,
policies and practices.
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
1
<PAGE>
"Corrections" shall mean changes (e.g., fixes,
workarounds and other modifications)
made by or for Docent that correct
Software Errors in the Software,
provided in temporary form such as a
patch, and later issued in the
permanent form of an Update.
"Docent Marks" shall mean the trademarks, service
marks, or logos of Docent as Docent may
designate from time to time.
"Docent Services" shall mean such services as may be
offered by Docent to its customers from
time to time.
"Documentation" shall mean the standard documentation
provided by Docent to its customers and
their users in connection with their
use of the Software, including, but not
limited to, program procedures and
descriptions (but excluding
descriptions of source code and build
procedures for executable code),
procedures for permitted maintenance
and modification, testing data and
similar written material relating to
the design, structure and
implementation of the Software, as well
as help files and user documentation to
allow individual users to use the
Software.
"Error Report" shall mean the document created by
Docent in performing the Support and
Maintenance Services when FTK reports a
Software Error.
"FTK Corporate Customer" means any customer of FTK or its
Affiliates which is a corporation or
other legal entity (not being a natural
person) and which is granted a licence
by Docent to host a copy of the
Software within that customer's
firewalls for use only with courses and
products supplied by FTK or its
Affiliates;
"FTK Enhancement" shall mean any customisation of the
Software produced at FTK's request by
Docent and which is neither an Update
nor an Upgrade.
"FTK Marks" shall mean the trademarks, service
marks, or logos of FTK or its
Affiliates as FTK may designate from
time to time.
"FTK Named User" means a Named User who is registered on
a copy of the Software which is hosted
by or on behalf of FTK or its
Affiliates. This shall not include
Named Users who are registered on a
copy of the Software which is hosted
other than by or on behalf of FTK or
its Affiliates.
"FTK Product" shall mean those products or courses
supplied by FTK or its Affiliates as
are set out in Schedule 1 from time to
time, which Schedule 1 may be amended
by FTK upon written notice to Docent
should FTK wish to remove some or all
titles from, or add additional titles
to, the scope of this Agreement.
"General Corporate Customer" means any corporation or other legal
entity (not being a natural person)
which is granted a licence by Docent to
host a copy of the Software within that
customer's firewalls for use
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
2
<PAGE>
with any courses and products (i.e. a
General Corporate Customer shall not be
restricted to using its copy of the
Software only with courses and products
supplied by FTK or its Affiliates).
"Intellectual Property Rights" shall mean all intellectual property
rights worldwide arising under
statutory or common law, whether or not
perfected, including, without
limitation, all (i) patents and patent
applications owned or licensed by
either Party; (ii) rights associated
with works of authorship (including,
without limitation, copyrights,
computer programs, underlying code,
user interfaces, databases and
documentation therefor); (iii)
trademarks, service marks, logos, brand
names and trade dress; and (iv) any
other proprietary rights relating to
intangible property.
"Licence" shall mean the licence granted by
Docent to FTK under Clause 2 of this
Agreement.
"Marketing Materials" shall mean any advertising, press
releases, publicity, marketing
collateral or similar materials.
"Named User" means a named individual user (being a
natural person) who is registered on
the Software. For the avoidance of
doubt, a registered user who ceases to
be enrolled on any course on the
Software but at a later date enrols on
a new course on the Software, shall be
deemed to be a single Named User (i.e.
when an existing Named User enrols on a
new course s/he shall not be deemed to
be a new Named User). Further, an
individual who is registered on the
Software for more than one course shall
be deemed to be a single Named User.
"Net Revenues" shall mean the #####
"Pearson Group" shall mean any company within the
ultimate ownership or control of
Pearson plc.
"Referral Fee" shall mean #####
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
3
<PAGE>
"Rental Fee" shall mean #####
"Severity Level" means the level of severity of a
Software Error, in accordance with the
Severity Level definitions below:
a. Severity Level 1. Severity Level 1
implies that the Software is completely
not functioning, for example because
the Software has crashed or frozen and
will not restart.
b. Severity Level 2. Severity Level 2
implies that the Software is failing to
function correctly and is generating a
data corruption condition, possibly
including loss of data or suspect data
integrity.
c. Severity Level 3. Severity Level 3
implies that the Software is running
but that FTK is unable to use major
portions of the Software capability and
there is no "work - around".
d. Severity Level 4. Severity Level 4
implies that the Software is operating
close to normal but there is a non-
critical Software Error or a failure in
a major portion of the Software
capability, but a "work -around" is
available.
e. Severity Level 5. Severity Level 5
implies that there is a cosmetic
problem with the Software.
"Software" shall mean Docent Enterprise version
4.5.
"Software Error" means a reproducible defect or
combination of reproducible defects in
the Software (or any Corrections,
Upgrades, Updates or FTK Enhancements)
that results in a failure of the
Software (or any Corrections, Upgrades,
Updates or FTK Enhancements), when used
in accordance with the Documentation,
to function substantially in accordance
with the Specifications. A reproducible
defect shall mean a defect that Docent
can reproduce using that version of the
Software as delivered by Docent to FTK
hereunder. Software Errors do not
include those errors caused by (i) the
negligence of FTK, (ii) any
modification or alteration of the
Software made by FTK, (iii) operator
error, (iv) use on any system other
than the operating system specified in
the Documentation, (v) accident or
misuse or (vi) failure to load any
Correction, Upgrade or Update as
instructed by Docent.
"Specifications" shall mean the technical specifications
for the Software as set out in the
Documentation.
"Support and Maintenance Fee" shall mean #####
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
4
<PAGE>
"Support and Maintenance shall mean the support and maintenance
Services" services described in Schedule 2.
"Taxes" shall mean any federal, state, local,
or foreign income, gross receipts,
license, payroll, employment, excise,
severance, stamp, occupation, premium,
windfall profits, environmental,
customs duties, capital stock,
franchise, profits, withholding, social
security (or similar), unemployment,
disability, real property, personal
property, sales, use, transfer,
registration, value added, estimated,
or other tax of any kind whatsoever
(including any interest, penalty, or
addition thereto).
"Updates" shall mean any bug fixes, patches, or
other revisions or changes to or
modifications of the Software that are
made generally available to Docent's
customers at no additional charge as a
part of Support and Maintenance
Services, which would typically be
designated by a change in the version
number to the right of the first
decimal point, and does not include
Upgrades.
"Upgrade" means any new releases of, or revisions
or modifications to, the Software which
would typically be designed by a change
in the version number to the left of
the first decimal point, such as those
that provide additional features,
require additional hardware or perform
additional functions not provided or
performed by the Software previously
licensed to FTK; provided that such
Upgrades are made generally available
to Docent's customers at no additional
charge as a part of Support and
Maintenance Services.
Other terms used in this Agreement are defined in the context in which
they are used and have the meanings there stated.
2. LICENCE
2.1 Deliverables. Within fourteen (14) days from the Effective Date, Docent
------------
will deliver to FTK one copy of the Software (plus applicable
Documentation) to be installed subsequently on to any number of servers of
FTK's choice.
2.2 Licence Grant. Subject to the provisions of this Agreement, Docent hereby
-------------
grants to FTK a ##### licence from the date hereof until 31 December 2003
for FTK and its Affiliates to:
(a) use,
(b) enhance and/or modify through the use of any documented or
undocumented Application Programming Interface (such as, by way of
example only, Docent "App files"),
(c) perform,
(d) transmit,
(e) display,
(f) provide access to FTK Named Users to; and
(g) make an unlimited number of copies, as necessary to support FTK Named
Users, of the Software and any FTK Enhancements, Corrections, Updates
and/or Upgrades, all for the purpose of providing on-line training to
third parties.
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
5
<PAGE>
2.3 Docent hereby agrees, at FTK's option, to convert the licence granted
under clause 2.2 into an indefinite licence with effect from 1 January
2004. FTK shall be entitled to exercise this option at any time by notice
in writing to Docent. FTK shall pay Docent the sum of ##### in
consideration for the conversion of the licence granted under clause 2.2
into an indefinite licence, such sum to be payable within 30 days after
the date of receipt of Docent's invoice therefor.
Notwithstanding the foregoing, any failure by Docent to request or invoice
FTK for the aforementioned ##### shall not delay, affect or invalidate the
conversion of the licence granted under clause 2.2 into an indefinite
licence, provided such notice in writing shall have been delivered to
Docent.
2.4 The licence granted to FTK and its Affiliates pursuant to clause 2.2 shall
only apply to copies of the Software which are hosted by or on behalf of
FTK or its Affiliates. This licence shall not apply to any copy of the
Software which is hosted other than by or on behalf of FTK or its
Affiliates. Any FTK Corporate Customer or General Corporate Customer who
wishes to host the Software within its own firewalls shall be obliged to
enter a separate licence agreement with Docent in accordance with clause
3.2.
Should any customer who does not wish to host the Software within its own
firewalls request that FTK or its Affiliates host on the Software any
courses which are supplied by or on behalf of the customer, then FTK shall
pay to Docent a hosting fee in accordance with Schedule 4, Part A, section
5.
2.5 Copies. The licence granted to FTK hereunder shall apply to all copies of
------
the Software created by FTK hereunder, provided that FTK reproduces on any
copies of the Software, FTK Enhancements, Corrections, Updates and/or
Upgrades all copyright notices and any other confidential or proprietary
legends that are on or encoded in the Software.
2.6 Restrictions. Except in order to allow FTK's Affiliates to exercise the
------------
licence under section 2.2, or as otherwise expressly set forth in this
Agreement, FTK may not modify, decompile, disassemble, decrypt, extract,
or otherwise reverse engineer the Software or any part thereof.
2.7 Source Code Escrow. From one month after the Effective Date, Docent will
------------------
maintain for the period of this Agreement a copy of the source code of the
latest version from time to time of the Software (including all FTK
Enhancements, Upgrades and Updates) with National Computer Centre ("NCC").
FTK shall be entitled to access, use, copy and modify the source code
pursuant only to the terms and conditions of a separate source code escrow
agreement among Docent, FTK and NCC, and only if:
(a) a Security Level 1 Software Error occurs and remains unresolved for a
period of 6 weeks, in which event (i) access to the source code shall
be limited to 3 individuals, each of which shall sign a
confidentiality agreement; and (ii) the source code shall be released
to FTK only for the period during which FTK uses it to try to resolve
such Software Error and shall be destroyed at the end of such period;
or
(b) Docent ceases, or threatens to cease, to operate as a business; or
(c) Docent terminates the Support and Maintenance Services in accordance
with clause 8.2.1; or
(d) this Agreement is terminated by FTK for Docent's material breach in
accordance with clause 8.2.3.
FTK shall be responsible for all costs associated with the establishment
and maintenance of a source code account with NCC.
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
6
<PAGE>
2.8 FTK Enhancements. Should FTK request an FTK Enhancement, FTK shall
----------------
provide Docent with full written details of the proposed FTK Enhancement.
Within two weeks of receipt of such details, Docent will notify FTK of the
charges and timescale associated with the proposed FTK Enhancement.
Docent shall not commence work on a proposed FTK Enhancement unless and
until it receives written confirmation of acceptance of the proposed
charges and timescale from FTK.
On receipt of a request for an FTK Enhancement, Docent will notify FTK if
it reasonably considers the proposed FTK Enhancement would compete with
the Software. If Docent does so notify FTK, the parties agree that they
shall negotiate in good faith to determine a mutually acceptable release
date for an Update or Upgrade (as the case may be) to include such
proposed FTK Enhancement. If within 10 working days of the date of FTK's
request the parties are not able to reach agreement on an acceptable
release date, Docent shall be obliged to produce the FTK Enhancement.
Should Docent produce an FTK Enhancement pursuant to this clause 2.8, it
undertakes not for a period of 4 months after the FTK Enhancement has been
accepted by FTK to include such FTK Enhancement in an Upgrade or Update,
or to release such FTK Enhancement to, or make it available to, third
parties, PROVIDED THAT this 4 month period shall not apply if Docent can
demonstrate to FTK before it produces the FTK Enhancement that the
proposed FTK Enhancement was already incorporated in Docent's development
plans for the next Upgrade or Update and that such Upgrade or Update was
due to be released no later than 6 months after the date of FTK's request.
3 MARKETING AND SALES OF SOFTWARE AND DOCENT SERVICES BY FTK.
3.1 Marketing. Subject to the terms and conditions of this Agreement, FTK and
---------
FTK's Affiliates may market and refer the Software, (including any
Corrections, Upgrades, Updates or FTK Enhancements), and/or Docent
Services to their potential or existing customers from time to time in
order to procure orders for the Software (including any Corrections,
Upgrades, Updates or FTK Enhancements), and/or Docent Services. Any such
marketing efforts will be consistent with good business ethics. FTK will
refrain from engaging in any illegal, unfair or deceptive trade practices,
unethical business practices whatsoever, or making any representations
inconsistent with specifications provided by Docent with respect to the
marketing of the Software and/or Docent Services.
3.2 Terms of Sale. #####. FTK shall not market or quote for the Software
-------------
without making clear to FTK's customers that they must also pay for Docent
maintenance and support for the period during which they license the
Docent Software, such maintenance and support to be at #####. FTK and
FTK's Affiliates shall supply their customers with a copy of Docent's
standard terms and conditions and shall arrange for these to be executed
by the customer and forwarded to Docent for execution by Docent. #####.
Docent may change at any time and without liability, (i) Software or
Docent Services, (ii) prices, (iii) availability and delivery schedules,
and (iv) terms and conditions. Docent will endeavour to notify FTK within
sixty (60) days prior to any such changes.
3.3 Acceptance. All orders for Software (including any Corrections,
----------
Upgrades, Updates or FTK Enhancements) or Docent Services procured by FTK
or its Affiliates are subject to Docent's final acceptance, which
acceptance shall not be unreasonably withheld or delayed. Docent will use
its reasonable efforts to promptly approve or reject orders procured by
FTK or its Affiliates.
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
7
<PAGE>
If Docent should reject an order procured by FTK or its Affiliates it
shall at the time of the rejection give FTK written reasons for such
rejection.
3.4 Invoices and Payment. FTK shall be responsible for invoicing and
--------------------
collecting monies from FTK's customers in respect of purchases of Software
and Docent Services procured by FTK or its Affiliates. #####. Failure by
FTK to invoice or collect monies due from customers shall not negate FTK's
obligation to remit any monies due to Docent from FTK or its Affiliates.
3.5 Marks. Docent grants FTK and its Affiliates a ##### licence to use the
-----
Docent Marks solely in connection with performing its rights and
obligations under this Agreement. FTK acknowledges that its utilisation of
the Docent Marks will not create in it, nor will it represent it has any
right, title or interest in or to such Docent Marks other than the
licences expressly granted herein. FTK will comply with Docent's standard
trademark usage guidelines as Docent may provide from time to time. FTK
and its Affiliates shall be free to inform third parties that they are
using the Docent Software in respect of FTK and its Affiliates' on-line
courses, but may not otherwise use Docent's name or identify Docent in any
capacity, without Docent's prior written permission, not to be
unreasonably withheld or delayed. FTK will not to do anything contesting
or impairing the trademark rights of Docent.
3.6 Marketing Materials. FTK will submit to Docent for Docent's prior written
-------------------
approval any Marketing Materials to be used in connection with performing
its obligations or rights under this Agreement solely so that Docent may
monitor use of the Docent Marks. Docent will respond to any such request
for approval within 10 working days. Docent reserves the right to
disapprove such Marketing Materials if it determines that the Docent Marks
are improperly used, in which event FTK shall not use such Marketing
Materials.
3.7 Reserved Rights. Subject to section 2.8, Docent shall at all times have
---------------
the right to market, sell, lease, license, provide, ship or otherwise
distribute or perform the Software and/or Docent Services to third
parties. FTK shall not be entitled to receive any compensation for sales
of Software and/or Docent Services consummated by Docent unless and except
to the extent provided herein.
4. MARKETING AND SALES OF FTK PRODUCT BY DOCENT
4.1 Marketing. Subject to the terms and conditions of this Agreement, Docent
---------
may market and refer the FTK Product to its potential or existing
customers from time to time in order to procure orders for such FTK
Product. Any such marketing effort will be consistent with good business
ethics. Docent will refrain from engaging in any illegal, unfair or
deceptive trade practices, unethical business practices whatsoever, or
making any representations inconsistent with specifications provided by
FTK with respect to the marketing of the FTK Product.
4.2 Prices and Terms of Sale. Docent shall not market or quote for FTK Product
------------------------
except in accordance with ##### and standard terms and conditions. FTK
may change at any time and without liability, (i) product or service
offerings within the FTK Product, (ii) prices, (iii) availability and
delivery schedules, and (iv) terms and conditions. FTK will endeavour to
notify Docent within sixty (60) days prior to any such change.
Docent will forward to FTK any enquiries or orders for FTK Product which
it may receive.
4.3 Acceptance. All sales of FTK Product procured by Docent are subject to
----------
FTK's final acceptance, which acceptance shall not be unreasonably
withheld or delayed. FTK will use all reasonable efforts promptly to
approve or reject orders procured by Docent. If FTK should reject an order
procured by Docent it shall at the time of the rejection give Docent
written reasons for such rejection.
#### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
8
<PAGE>
4.4 Invoices and Payment. FTK shall fulfil all orders procured by Docent which
--------------------
it accepts, and shall invoice such customers and their payments shall be
made directly to FTK. FTK shall remit the Referral Fee to Docent in
accordance with Schedule 4, Part A, Section 4.
4.5 Marks. FTK grants Docent a ##### licence to use the FTK Marks solely in
-----
connection with performing its rights and obligations under this Agreement.
Docent acknowledges that its utilisation of the FTK Marks will not create
in it, nor will it represent it has any right, title or interest in or to
such FTK Marks other than the licenses expressly granted herein. Docent
will not to do anything contesting or impairing the trademark rights of FTK
and will comply with FTK's standard trademark usage guidelines as FTK may
provide from time to time.
Docent may not use FTK's or FTK's Affiliates names or identify FTK or FTK's
Affiliates in any capacity, without FTK's prior written permission, not to
be unreasonably withheld or delayed.
4.6 Marketing Materials. Docent will submit to FTK for FTK's prior written
-------------------
approval any Marketing Materials to be used in connection with performing
its obligations or rights under this Agreement solely so that FTK may
monitor use of the FTK Marks. FTK will respond to any such request for
approval within 10 working days. FTK reserves the right to disapprove such
Marketing Materials if it determines that the FTK Marks are improperly
used, in which event Docent shall not use such Marketing Materials.
4.7 FTK Named Users. Nothing in this Agreement shall entitle Docent to use, or
---------------
permit a third party to access or use, the personal contact details of any
FTK Named User unless as required by law or the FTK Named User (in which
such case, subject to FTK's approval).
4.8 Reserved Rights. Notwithstanding any other provision in this Agreement,
---------------
FTK shall at all times have the right to market, sell, lease, license,
provide, ship or otherwise distribute the FTK Product to third parties.
Docent shall not be entitled to receive any compensation for sales of FTK
Product consummated by FTK unless and except to the extent provided herein.
5. SUPPORT AND MAINTENANCE
5.1 Support and Maintenance Services. Docent will perform the Support and
--------------------------------
Maintenance Services. FTK shall be responsible for procuring, installing
and maintaining all equipment, telephone lines, communications interfaces,
and other hardware necessary to operate the Software, unless Docent agrees
in writing to undertake any of these responsibilities under a separate
hosting agreement.
5.2 Additional Services. Any time services are carried out by Docent in
-------------------
diagnosing or fixing problems that are not caused by the Software or are
not covered by this Agreement such services shall be billable to FTK at
Docent's then-existing rates.
5.3 Implementation Services. On request from FTK or its Affiliates, Docent
-----------------------
shall provide the necessary services to FTK Corporate Customers to enable
such customers to install the Software. Such services shall be provided in
accordance with Docent's standard terms and prices from time to time for
professional services.
Docent shall be entitled to use sub-contractors to provide such
professional services, provided the standard of such professional services
shall be no lower than if they had been performed by Docent, and further
provided that Docent shall be responsible for the acts and omissions of
such sub-contractors.
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
9
<PAGE>
6. PAYMENTS.
6.1 To Docent. FTK shall make payments to Docent in accordance with #####. If
---------
FTK does not pay Docent any sum when due then Docent may charge FTK daily
interest on overdue sums at an annualised rate equivalent to ##### above
the base rate of Barclays Bank plc from time to time from the date when
payment was due until the date of actual payment of all sums due (including
interest).
6.2 Taxes. FTK agrees to pay any sales, use, excise, import or export, value-
-----
added or similar tax and interest, as well as any costs associated with the
collection or withholding thereof, and all government permit fees, license
fees and customs and similar fees levied on the delivery of the Software to
FTK by Docent. All payments due under this Agreement shall be made without
any deduction or withholding, unless such deduction or withholding is
required by any applicable law of any relevant governmental revenue
authority then in effect.
6.3 Right of Audit. By prior arrangement and during FTK's normal business
--------------
hours, Docent shall have the right for the sole purpose of ensuring
compliance with this Agreement, to conduct a reasonable and necessary
inspection of portions of the books and records of FTK which are solely
relevant to the amounts payable by FTK hereunder, and/or to the number of
FTK Named Users who have access to the Software through FTK at any time.
Such inspections shall be made no more frequently than once in any 12 month
period, and all information obtained by Docent as a result of such
inspection shall be deemed to be Confidential Information of FTK. Any
audit undertaken shall be conducted at Docent's sole expense, unless the
payments made by FTK to Docent are determined to have been less than #####
of the payments actually owed to Docent, in which case FTK will be
responsible for the payment of the reasonable fees for such inspection. In
addition, FTK shall immediately remit payment to Docent for the full amount
of any disclosed shortfalls. The audit rights set forth herein shall
continue for one (1) year following the termination or expiry of this
Agreement for any reason, or for such period as FTK continue to make
payments to Docent, whichever is longer
7. [Intentionally omitted]
8. TERM; TERMINATION.
8.1 Term. This Agreement shall commence as of the Effective Date and, unless
----
FTK exercises its option under clause 2.3 to convert the Licence granted by
Docent into an indefinite licence, then this Agreement shall expire on 1
January 2004.
Should FTK exercise its option under clause 2.3 to convert the Licence
granted by Docent into an indefinite licence, then this Agreement shall
continue until terminated by either party in accordance with the terms
hereof.
8.2 Termination.
-----------
8.2.1 By Docent without cause. Docent may terminate the Support and
-----------------------
Maintenance Services upon no less than 6 months' written notice to
FTK, such notice period to expire on or at any time after the 10/th/
anniversary of the Effective Date.
8.2.2 By FTK without cause. FTK may terminate this Agreement upon no less
--------------------
than 6 months' written notice to Docent, such notice period to
expire on or at any time after 31 December 2003.
8.2.3 Material Breach. Either Party may terminate this Agreement upon
---------------
written notice to the other upon the occurrence of any material
breach of the other Party's material representations, warranties,
covenants or other agreements contained herein, which
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
10
<PAGE>
breach remains uncured for a period of thirty (30) days after
receipt of a written notice from the non-breaching Party with
respect to such breach. Late payment will not constitute a material
breach of this Agreement.
8.3 Survival. Any provision of this Agreement which contemplates performance or
--------
observance subsequent to any termination or non-renewal of this Agreement
(in whole or in part) shall survive any termination of this Agreement (in
whole or in part, as applicable) and continue in full force and effect.
8.4 Effect of Termination or expiry.
-------------------------------
Upon termination or expiry of this Agreement:
8.4.1 each Party shall return or destroy any Confidential Information of
the other Party it has in its possession and certify in writing
within ten (10) working days of termination that all Confidential
Information in its possession or control has been so returned or
destroyed;
8.4.2 any amounts owed to Docent under this Agreement before such
termination will be immediately due and payable;
8.4.3 unless the Support and Maintenance Services have been terminated by
Docent under clause 8.2.1 or this Agreement has been terminated by
FTK under clause 8.2.3, the Licence granted hereunder will
immediately cease and FTK must promptly discontinue all use of the
Software, destroy all copies of the Software in its possession and
certify in writing within ten (10) working days after the
termination of the Licence to Docent that it has complied with the
above. In the event of termination of the Support and Maintenance
Services by Docent under clause 8.2.1 or termination of this
Agreement by FTK under clause 8.2.3, the Licence granted hereunder
shall not be affected and shall continue in full force and effect.
For so long as the Licence continues, all FTK's related payment
obligations hereunder shall continue, save in respect of Support and
Maintenance Services.
This clause 8.4 shall survive termination of this Agreement.
9. OWNERSHIP.
9.1 Docent. As between Docent and FTK, Docent has and shall have sole and
------
exclusive ownership of all right, title and interest in and to the
Software, Corrections, Updates, Upgrades, FTK Enhancements and
Documentation, including without limitation, all Intellectual Property
Rights associated therewith. Nothing in this Agreement shall be construed
to grant FTK or Affiliates any ownership right in, or license to, the
Software, Corrections, Updates, Upgrades, FTK Enhancements or Documentation
except as expressly provided in this Agreement.
9.2 FTK. As between Docent and FTK, FTK has and shall have the sole and
---
exclusive ownership of all right, title and interest in and to the FTK
Product including, without limitation, all Intellectual Property Rights
associated therewith. Nothing in this Agreement shall be construed to grant
Docent any ownership right in, or license to the FTK Product except as
expressly provided in this Agreement.
10. CONFIDENTIALITY.
10.1 Nondisclosure and Non-use. Each Party receiving Confidential Information
-------------------------
shall (a) disclose such Confidential information to only those directors,
officers, employees and agents of such
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
11
<PAGE>
Party (or, in the case of FTK, the employees, directors and/or officers of
the Pearson Group) (i) whose duties justify their need to know such
information and (ii) who have been informed of their obligation to
maintain the confidential, proprietary and/or trade secret status of such
Confidential Information; and (b) use such Confidential Information only
for the purposes set forth in this Agreement. Each Party receiving
Confidential Information shall treat such information as strictly
confidential, and shall use the same care to prevent disclosure of such
information as such Party uses with respect to its own confidential and
proprietary information, which shall not be less than the care a
reasonable person would use under similar circumstances. Notwithstanding
the foregoing, each Party may disclose Confidential Information to the
extent necessary pursuant to applicable national or local law, regulation,
court order, or other legal process, provided the receiving Party has
given the disclosing Party prior written notice of such required
disclosure and, to the extent reasonably possible, has given the
disclosing Party an opportunity to contest such required disclosure at the
disclosing Party's expense.
Each Party acknowledges that the other already has extensive knowledge of
and expertise in the business of developing, designing, marketing and
distributing training and education products and services and therefore
nothing in this Agreement shall serve to impair either Party's right to
make, procure and market products or services now or in the future which
may be similar to those developed or in the process of being developed by
the other Party.
10.2 Exclusions from Confidential Information. Confidential Information shall
----------------------------------------
not include that which:
(a) is or has been independently developed by the receiving Party or, in
the case of FTK, any of its Affiliates;
(b) is or has been rightfully received by the receiving Party or, in the
case of FTK, any of its Affiliates, without an obligation of
confidentiality;
(c) is or becomes publicly available without breach of this Agreement;
(d) is trivial or obvious;
(e) is approved for release by the disclosing Party.
10.3 Confidential Treatment of Agreement. Neither Party shall disclose the
-----------------------------------
terms of this Agreement to any third party; provided, however, that either
Party may disclose the terms of this Agreement (i) to its legal advisers
and accountants, or to any potential investor or acquiror of a substantial
part of such Party's business (whether by merger, sale of assets, sale of
stock or otherwise) that is bound by a written agreement to keep such
terms confidential, (ii) to, in the case of FTK, any company within the
Pearson Group, or (iii) as may be required by law.
11. WARRANTY; DISCLAIMER; LIMITATION OF LIABILITY.
11.1 Docent hereby warrants and represents that:
a. it has used all reasonable endeavours to ensure (including without
limitation by the use of generally available and accepted anti-virus
software and procedures) that the Software, Corrections, Updates,
Upgrades and FTK Enhancements are free from harmful code of any
description (whether called locks, viruses, worms or otherwise)
including any computer code, programming instructions or sets of
instructions that are intentionally constructed to damage, interfere
with or otherwise adversely affect computer programs and/or datafiles
and/or hardware and/or computer systems and/or networks; and
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
12
<PAGE>
b. it has the right and power to make this Agreement and that the
Software, Corrections, Updates, Upgrades, FTK Enhancements and
Documentation will not violate any existing Intellectual Property
Right nor breach any existing agreement; and
c. for a period of ninety (90) days from delivery of the Software (the
"Warranty Period"), the Software will perform substantially in
accordance with its associated Documentation. If FTK reports a
reproducible failure of the Software to perform substantially in
accordance with its associated Documentation during the Warranty
Period, FTK's sole and exclusive remedy for breach of this warranty
shall be that Docent will either provide FTK with a workaround or
make the Software conform to such Documentation, or in Docent's sole
discretion, will refund the Licence Fee which FTK paid for the non-
conforming Software upon FTK's certification that it has destroyed
all copies, and ceased all use, of the non-conforming Software. Any
replacement Software will be warranted for the remainder of the
original 90-day warranty period or for thirty (30) days from the date
FTK receives the replacement, whichever is longer. This warranty is
void if failure of the Software is due to modification, abuse,
misapplication or accident. This clause 11.1c shall not in any way
restrict or limit Docent's liability for failure to perform the
Support and Maintenance Services in accordance with this Agreement.
d. Docent warrants that the Docent Services will be performed in a
professional, workmanlike and skilful manner. If FTK reports a breach
of this warranty within ninety (90) days after performance of the
defective services, FTK's sole and exclusive remedy shall be to
require Docent to re-perform the defective Docent Services.
e. Docent does not warrant third party products provided hereunder. Any
third party warranties shall, to the extent permissible by the
applicable mandatory law, be passed through to FTK.
f. Docent disclaims, on behalf of itself and its suppliers, all express,
implied or statutory warranties, conditions, terms and
representations related to the Software other than as expressly set
forth in this Agreement, including, but not limited to, implied
warranties of merchantability, satisfactory quality, fitness for a
particular purpose to the maximum extent permitted by law.
11.2 FTK hereby warrants and represents that:
a. it has the right and power to make this Agreement and the FTK Product
will not violate any existing Intellectual Property Right nor breach
any existing agreement;
b. it has used all reasonable endeavours to ensure (including without
limitation by the use of generally available and accepted anti-virus
software and procedures) that the FTK Products are free from harmful
code of any description (whether called locks, viruses, worms or
otherwise) including any computer code, programming instructions or
sets of instructions that are intentionally constructed to damage,
interfere with or otherwise adversely affect computer programs and/or
datafiles and/or hardware and/or computer systems and/or networks;
and
c. FTK disclaims, on behalf of itself and its suppliers, all express,
implied or statutory warranties, conditions, terms and
representations related to the FTK Product other than as expressly
set forth in this Agreement, including, but not limited to, implied
warranties of merchantability, satisfactory quality, fitness for a
particular purpose to the maximum extent permitted by law.
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
13
<PAGE>
12. INDEMNIFICATION.
12.1 Indemnification by Docent. Docent shall indemnify, defend and hold
-------------------------
harmless FTK and its Affiliates from and against any and all loss, damage,
injury, liability or suit, including any reasonable legal fees and costs,
incurred by FTK or its Affiliates as a result of or arising from any
actual or threatened claim or action against FTK or any of FTK's
Affiliates, to the extent such claim or action is based on an allegation
that the Software, Corrections, Updates, Upgrades, FTK Enhancements or
Documentation infringe any Intellectual Property Right, provided that they
notify Docent promptly in writing of such actual or threatened claim or
action, they give Docent sole control of the defence thereof, that they
co-operate in the defence thereof at Docent's expense and that they do not
admit liability or settle any such claims or actions or make any payment
on account of the same without the prior written consent of Docent, except
under an order from the Court. Docent's obligation to indemnify FTK and
its Affiliates shall not extend to a claim based on any alleged
infringement arising from (a) any material supplied to Docent by FTK or
its Affiliates which is relied upon or incorporated in the Software; or
(b) any incorporation of the Software or any component thereof into any
other product or process, unless such incorporation was carried out by or
on behalf of Docent; or (c) any use by FTK or its Affiliates of a non-
infringing Update, Upgrade or otherwise superseding version of such
Software PROVIDED THAT Docent's obligation to indemnify FTK and its
Affiliates shall apply in respect of any reasonable legal fees and costs
incurred in defending such a claim, and in respect of any monies that may
be paid by Docent in order to settle such a claim, or (d) use of the
Software other than as permitted by this Agreement. This provision shall
be the sole and exclusive remedy of FTK and its Affiliates in respect of
infringement and alleged infringement.
Docent shall, at FTK's cost, consult FTK as to the selection of lawyers,
will consult with FTK's lawyers and shall keep FTK informed at all times
as to the progress of the claim or action.
If the Software, Corrections, Updates, Upgrades, FTK Enhancements or
Documentation or any component thereof becomes, or in Docent's sole
opinion is likely to become, the subject of such an allegation of
infringement, then FTK and its Affiliates shall permit Docent, at Docent's
option and expense, either to (i) procure the right to continue using the
component of the Software, Corrections, Updates, Upgrades, FTK
Enhancements or Documentation alleged to be infringing, or (ii) replace or
modify that component of the Software, Corrections, Updates, Upgrades, FTK
Enhancements or Documentation so that it becomes non-infringing. FTK and
its Affiliates shall not incur any costs or expenses for the account of
Docent under or pursuant to this Section without Docent's prior written
consent.
12.2 FTK Indemnity. FTK shall indemnify, defend and hold harmless Docent and
-------------
its Affiliates from and against any and all loss, damage, injury,
liability or suit, including any reasonable legal fees and costs, incurred
by Docent or its Affiliates as a result of or arising from any actual or
threatened claim or action against Docent or any of Docent's Affiliates to
the extent such claim or action is based on an allegation that the FTK
Product infringe any Intellectual Property Right, provided that they
notify FTK promptly in writing of such actual or threatened claim or
action, they give FTK sole control of the defence thereof, that they co-
operate in the defence thereof at FTK's expense and that they do not admit
liability or settle any such claims or actions or make any payment on
account of the same without the prior written consent of FTK, except under
an order from the Court. FTK's obligation to indemnify Docent and its
Affiliates shall not extend to a claim based on any alleged infringement
arising from (a) any material supplied to FTK by Docent for incorporation
in the FTK Product; or (b) any incorporation of the FTK Product or any
component thereof into any other product or process, unless such
incorporation was carried out by or on behalf of FTK; or (c) any use by
Docent or its Affiliates of a non-infringing FTK Product PROVIDED THAT
FTK's obligation to indemnify Docent and its Affiliates shall apply in
respect of any reasonable legal fees and costs incurred in defending such
a claim, and in respect of any monies that may be paid by FTK in order to
settle such a claim, or (d) use of the FTK Product other than as permitted
by this Agreement. This provision
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
14
<PAGE>
shall be the sole and exclusive remedy of Docent and its Affiliates in
respect of infringement and alleged infringement.
FTK shall, at Docent's cost, consult Docent as to the selection of
lawyers, will consult with Docent's lawyers and shall keep Docent informed
at all times as to the progress of the claim or action.
12.3 In no event shall either party be liable for any damages for loss of
profits, business interruption, or loss of information or for any
consequential or indirect damages whatsoever.
#####
13. GENERAL PROVISIONS.
13.1 Relationship of the Parties. This Agreement does not contemplate, create
---------------------------
or constitute a joint venture, partnership, agency or similar relationship
between the Parties. Neither Party shall have the right, authority or
power to represent, or act on behalf of, the other unless expressly
authorised to do so in this Agreement. Both Parties shall at all times
maintain their own separate organisations and legal integrity.
13.2 Governing Law. This Agreement shall for all purposes be governed by and
-------------
interpreted in accordance with the laws of England and Wales and each
Party hereby irrevocably submits to the non-exclusive jurisdiction of the
courts of England and Wales.
13.3 Force Majeure. Neither Party will be responsible for any failure to
-------------
fulfil its obligations under this Agreement due to causes beyond its
reasonable control, including, without limitation, acts or omissions of
government or military authority, acts of God, fires, floods, riots or
wars.
13.4 Binding Nature and Assignment. FTK shall be entitled to assign any
-----------------------------
benefit or transfer, delegate or sub-contract any of its duties or
obligations under this Agreement to any company within the Pearson Group
which is the successor business to all or a substantial part of FTK's
business without the prior written consent of Docent, but neither party
may otherwise assign this Agreement or delegate such Party's obligations
hereunder without the prior written consent of the other, which such
consent shall not be unreasonably withheld. Subject to the preceding
sentence, this Agreement, including any Schedules, shall be binding upon
the Parties, their heirs and assigns.
115 Notices. All notices, requests, demands, and determinations under this
-------
Agreement (other than routine operational communications), shall be in
writing and shall be deemed duly given (i) when delivered by hand, (ii)
one (1) business day after being given to an express, overnight courier
with a reliable system for tracking delivery, (iii) when sent by confirmed
facsimile with a copy delivered by another means specified in this
Section, or (iv) four (4) business days after the day of mailing, when
mailed by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the address below:
If to Docent, to
Docent Inc.
2444 Charleston Road
Mountain View
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
15
<PAGE>
CA 94043
Attn: Don Lundgren, Chief Finance Officer
Fax: + 1 650 962 9411
With a copy to the Docent Inc company attorney at the above address
If to FTK, to
FT Knowledge Limited
Wellington House
8 Upper St. Martin's Lane
London WC2H 9DL
Attn: Pippa Wicks, Chief Executive
Fax: + 44 20 7845 0701
With a copy to the FT Knowledge company secretary at its registered
office.
A Party may from time to time change its address or designee for
notification purposes by giving the other prior written notice of the new
address or designee and the date upon which it will become effective.
13.6 Severability. In the event that any provision of this Agreement conflicts
------------
with the law under which this Agreement is to be construed or if any such
provision is held invalid by an arbitrator or a court with jurisdiction
over the Parties, such provision shall be deemed to be restated to
reflect as nearly as possible the original intentions of the Parties in
accordance with applicable law. The remainder of this Agreement shall
remain in full force and effect.
13.7 Consents and Approval. Except where expressly provided as being in the
---------------------
sole discretion of a Party, where agreement, approval, acceptance,
consent, or similar action by either Party is required under this
Agreement, such action shall not be unreasonably delayed or withheld. An
approval or consent given by a Party under this Agreement shall not
relieve the other Party from responsibility for complying with the
requirements of this Agreement, nor shall it be construed as a waiver of
any rights under this Agreement, except as and to the extent otherwise
expressly provided in such approval or consent.
13.8 Waiver of Default No waiver or discharge hereof shall be valid unless in
-----------------
writing and signed by an authorised representative of the Party against
which such amendment, waiver, or discharge is sought to be enforced. A
delay or omission by either Party hereto to exercise any right or power
under this Agreement shall not be construed to be a waiver thereof. A
waiver by either of the Parties of any of the covenants to be performed
by the other or any breach thereof shall not be construed to be a waiver
of any succeeding breach thereof or of any other covenant.
13.9 Cumulative Remedies. Except as otherwise expressly provided, all remedies
-------------------
provided for in this Agreement shall be cumulative and in addition to and
not in lieu of any other remedies available to either Party at law, in
equity or otherwise.
13.10 Public Disclosures. All media releases, public announcements, and public
------------------
disclosures relating to this Agreement or the subject matter of this
Agreement, including promotional or marketing material, but not including
announcements intended solely for internal distribution or disclosures to
the extent required to meet legal or regulatory requirements beyond the
reasonable control of the disclosing Party, shall be co-ordinated with
and shall be subject to approval by each Party prior to release.
13.11 Third Party Beneficiaries. Except as otherwise provided in this
-------------------------
Agreement, this Agreement shall not be deemed to create any rights in
third parties, including suppliers, end users and customers of a Party,
or to create any obligations of a Party to any such third parties.
##### CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
16
<PAGE>
13.12 Amendment. This Agreement, including any Schedule, shall not be modified,
---------
amended or in any way altered except by an instrument in writing signed
by both Parties.
13.13 Interpretation.
--------------
a. Terms other than those defined in this Agreement shall be given
their plain English meaning, and those terms, acronyms and
phrases known in the telecommunications and information
technology services industries shall be interpreted in accordance
with their generally known meanings. Unless the context otherwise
requires, words importing the singular include the plural and
vice-versa.
b. References to "Clause," "Section," and "Schedule" mean references
to a clause, section or schedule of this Agreement, as
appropriate, unless otherwise specifically stated.
c. The clause and schedule headings in this Agreement are intended
to be for reference purposes only and shall in no way be
construed to modify or restrict any of the terms or provisions of
this Agreement.
d. The words "include," "includes" and "including," when following a
general statement or term, are not to be construed as limiting
the general statement or term to any specific item or matter set
out or to similar items or matters, but rather as permitting the
general statement or term to refer also to all other items or
matters that could reasonably fall within its broadest scope.
e. All dollar amounts referred to in this Agreement are in United
States dollars.
f. References to one gender import references to all genders.
13.14 Counterparts. This Agreement may be executed in several counterparts,
------------
all of which taken together shall constitute one single agreement between
the Parties.
13.15 Entire Agreement. Save with respect to fraudulent misrepresentation, this
----------------
Agreement, including any attached Schedules, constitutes the entire
agreement between the Parties with respect to the subject matter in this
Agreement, and supersedes all prior agreements, whether written or oral,
as well as any terms which may be incorporated on any purchase order,
with respect to the subject matter contained in this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.
Signed for and on behalf of Signed for and on behalf of
Knowledge Limited Docent Netherlands B.V.
/s/ ##### /s/ Dave Ellett
--------------------------------------------- ------------------------------
Authorised Signature Authorised Signature
##### President & CEO
--------------------------------------------- ------------------------------
Title Title
##### Dave Ellett
--------------------------------------------- ------------------------------
Name (print) Name (print)
26 May 2000 26 May 2000
--------------------------------------------- ------------------------------
Date Date
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
17
<PAGE>
SCHEDULE 1
FTK PRODUCT
Product Medium Referral Fee ##### [#####]
------- ------ --------------------------
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
18
<PAGE>
SCHEDULE 2
SUPPORT AND MAINTENANCE
1 Corrections. Docent will provide Corrections for the resolution of
-----------
Severity 3 Software Errors. Such Corrections may be made available to FTK
through Docent's Web site. Any Corrections shall be deemed to be Software and
subject to the terms of this Agreement.
2. Updates and Upgrades. Docent will provide FTK with Updates and Upgrades as
--------------------
it provides to other licensees of the Software from time to time. Any Updates
or Upgrades shall be deemed to be Software and subject to the terms of this
Agreement.
3. Installation Assistance. FTK is responsible for installation of
-----------------------
Corrections, Updates and/or Upgrades provided pursuant to this Agreement.
4. Telephone Support. With the exception of American and English national
-----------------
holidays, when no support will be available, Docent telephone support
representative(s) shall be available to receive FTK telephone calls 24 hours per
day, 7 days per week, 52 weeks per year. Such telephone support
representative(s) will serve as FTK's interface with Docent, will accept Error
Reports and will ensure that reported Software Errors are handled in a timely
manner. All Software Errors will be investigated and if the Software Errors
relates to the Software, or is directly caused by the Software, (a) an Error
Report will be created, (b) the Software Error will be assigned a Severity
Level, and (c) the Software Error will be resolved in accordance with the
procedures and processes for error resolution below.
5. E-mail Support. Docent shall be able to receive e-mail from FTK that will
--------------
serve as an alternate interface with Docent. Docent agrees to accept Error
Reports by e-mail and will ensure that Software Errors reported in this manner
are handled in a timely manner. All Software Errors reported via e-mail will be
investigated in the same manner as telephone calls and as described under
Telephone Support above, and e-mail support will, with the exception of American
and English national holidays, when no support will be provided, be available 24
hours per day, 7 days per week, 52 weeks per year. Proof as to the sending of
an email does not equate to proof of receipt.
6. Error Resolution.
----------------
6.1 Severity Level 1. Docent will take immediate steps toward solving the
----------------
Software Error. Docent will use its best endeavours to resolve Severity Level 1
Software Errors as soon as practicable with due consideration as to the
seriousness of the implications of an error of this magnitude. When a Severity
Level 1 Software Error is reported, Docent will assign resources necessary to
correct the Software Error. If system access is required, FTK will provide a
contact available to Docent and access to its system and software for the
duration of the error correction procedures. Docent shall not be liable for any
delay caused through failure by FTK to provide such a contact in a prompt
manner.
6.2 Severity Level 2. Docent will analyse Severity Level 2 Software
----------------
Errors in the order that they are reported and will use all reasonable
endeavours to respond in each instance within twenty-four (24) hours. Docent
will use all reasonable endeavours to resolve Severity Level 2 Software Errors
as soon as practicable and will respond within 24 hours with a report as to its
understanding of the seriousness of the error and an estimate as to how long it
should take to correct such an error. Severity Level 1 Software Errors will take
priority over Severity Level 2 Software Errors. Docent will assign appropriate
technical resources to Severity Level 2 Software Errors.
6.3 Severity Level 3. Docent will research Severity Level 3 Software
----------------
Errors in the order that they are reported and will use all reasonable
endeavours to respond in each instance within thirty-six (36) hours. Docent will
use all reasonable endeavours to resolve Severity Level 3 Software Errors as
soon as practicable and will respond within 36 hours with a report as to its
understanding of the seriousness of the error and an estimate as to how long it
should take to correct such an error.
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
19
<PAGE>
Severity Levels 1 and 2 Software Errors will take priority over Severity Level 3
Software Errors. Docent will assign appropriate technical resources to Severity
Level 3 Software Errors.
6.4 Severity Level 4. Docent will research Severity Level 4 Software Errors
----------------
in order that they are reported and will use all reasonable endeavours; to
respond in each instance within five working days. Docent will endeavour to
resolve Severity Level 4 Software Errors in the next scheduled Update or Upgrade
or make Corrections available to FTK on Docent's website. In addition Docent
will endeavour to provide FTK with advice as to how a work-around may be
achieved as soon as it reasonably can. Severity Levels 1,2 and 3 Software Errors
will take priority over Severity Level 4 Software Errors.
6.5 Severity Level 5. Docent will research Severity Level 5 Software Errors
----------------
after all other Severity Level Software Errors. Docent may correct Severity
Level 5 Software Errors in the next scheduled Update or Upgrade or make
Corrections available to FTK on Docent's website.
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
20
<PAGE>
SCHEDULE 3
PRICE LIST FOR DOCENT SOFTWARE AND SERVICES
#####
#####
. #####.
. #####
--------------------------------------------------------------------------------
##### ##### ##### ##### ##### #####
#####
--------------------------------------------------------------------------------
##### ##### $##### $##### $##### $#####
--------------------------------------------------------------------------------
##### ##### ##### $##### $##### $##### $#####
--------------------------------------------------------------------------------
##### ##### ##### $##### $##### $##### #####
--------------------------------------------------------------------------------
##### ##### ##### $##### $##### $##### #####
--------------------------------------------------------------------------------
##### ##### ##### $##### $##### $##### #####
####.
Example: #####
Maintenance & Support Fee
#####
#####
Professional Services - Consulting
$ #####
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
21
<PAGE>
SCHEDULE 4
PAYMENTS
#####
-----
1. Rental Fee
----------
1.1 #####:
Date Payment
##### $#####
##### $#####
##### $#####
2. Licence Fee
-----------
2.1 #####
2.2 #####
#####.
#####.
3. Support and Maintenance
-----------------------
3.1 #####.
#####.
#####.
3.2 #####
#####.
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
22
<PAGE>
3.3 #####.
4. Referral Fees
-------------
4.1 #####
-----
#####.
#####.
4.2 #####
-----
#####.
4.3 #####
-----
#####
5. #####
-----
#####.
#####.
------
#####
-----
1. Licence
-------
1.1 #####.
1.2 #####,
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
23
<PAGE>
#####
#####:
___________________________________________________________________
##### #####
-------------------------------------------------------------------
##### #####%
-------------------------------------------------------------------
##### #####%
-------------------------------------------------------------------
##### #####%
-------------------------------------------------------------------
2. Support and Maintenance
-----------------------
2.1 #####:
(a) #####; or
(b) $#####.
Part C - Payments by General Corporate Customers
------------------------------------------------
1. Licence
-------
1.1 #####.
2. Support and Maintenance
-----------------------
2.1 #####.
#####CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION
24
