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EXHIBIT 10.3
IBM/OEM Software Agreement
Base Agreement #4999FA0932
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Thank you for doing business with IBM. The IBM OEM Software Agreement
("Agreement") describes the items that IBM provides to you to include in your
Offerings. The Agreement is out complete agreement and replaces all prior oral
or written communications between us regarding the transactions described in the
Transaction Documents.
By signing below for our companies, each of us agrees to the terms of this Base
Agreement. When signed, each Transaction Document and the Base Agreement form a
separate agreement between the parties. Once signed, 1) both parties agree any
reproduction of the Agreement made by reliable means (for example, photocopy or
facsimile) is an original unless prohibited by local law and 2) all Programs are
subject to it.
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Agreed to: Agreed to:
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International Business Machines Corporation Conversit.com, Inc.
By: /s/ Peter Blacklock By: /s/ Dean Weber
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Name: Peter Blacklock Name: Dean Weber
Date: 9/21/99 Date: 9/21/99
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Agreement No. 4999FA0932
IBM Address: Conversit.com Address:
1555 Palm Beach Lakes Blvd., Ste. 700 6333 Greenwich Dr., Ste. 240
West Palm Beach, FL 33401 San Diego, CA 92122
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After signing, please return a copy of this Base Agreement to the local "IBM Office Address" shown above.
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IBM/OEM Software Agreement
Base Agreement #4999FA0932
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1 DEFINITIONS
Capitalized items in the Agreement have the following meanings. A Transaction
Document may define additional terms; however, those terms apply only to that
Transaction Document.
1.1 Customer is an end user authorized to use this Offering for its intended
use and not for remarketing. Customers do not include you or your
Subsidiaries.
1.2 Distributors are any business entities you use to distribute Offerings.
1.3 Level 1 Service shall mean the service provided in response to the initial
phone call placed by a Customer which identifies and documents an error in
the Programs. This includes problem source identification assistance,
problem analysis, problem resolution, installation planning information
and preventive and corrective service information.
1.4 Level 2 Service shall mean the service provided to analyze or reproduce
the error or to determine that the error is not reproducible. This
includes problem recreation and in-depth technical analysis.
1.5 Level 3 Service is the service provided to isolate the error to a
component level of the Programs. An attempt is to be made to provide an
error correction or circumvention or notification that no correction or
circumvention is available.
1.6 License Agreement is the applicable agreement and/or conditions of use
that IBM provides you for licensing the Programs or your license agreement
as specified in the Transaction Document.
1.7 Maintenance Modifications are revisions that correct errors in the
Programs.
1.8 Offerings are what you market and distribute to Customers only under your
company name and logo and which contain at least the Programs and the
Value-Add Components.
1.9 Programs are one or more of the Programs defined below as specified in the
Transaction Document:
a) Package Programs are individual packages described in the Transaction
Document which contain software media (for example CD-ROMs, diskettes
and other storage mediums) and provided to you as finished goods which
IBM authorizes you to package with designated Value-Add components
described in the Transaction Document;
b) Embedded Programs are the software programs described in the
Transaction Document that IBM authorizes you to reproduce and install
onto Hardware; and
c) Manufactured Programs are the software programs described in the
Transaction Document which IBM authorizes you to reproduce and package
with designated Value-Add components described in Transaction
Document.
Programs include machine-readable instructions, machine-readable data such
as data base or multimedia production and Related Licensed Materials.
1.10 Related Licensed Materials are the Program publications that IBM generally
provides for use by its customers.
1.11 Restricted License is a license to you, your Distributors and Customers
which prohibits the use of the Program(s) except when used in conjunction
with the Offerings. The Transaction Document will specify the Program(s)
for which a Restricted License applies.
1.12 Hardware System is a nonvolatile storage device or CPU computer system,
Value-Add Component identified in the Transaction Document that you must
include in Offerings.
1.13 Subsidiary is an entity during the time that more than 50% of its voting
stock or, if no voting stock, decision-making power is owned or
controlled, directly or indirectly, by another entity.
1.14 Territory is identified in the Transaction Document except, in no event,
shall Territory include prohibited countries under the applicable export
laws.
1.15 Value-Add Components are the required product components identified in the
Transaction Document that you must include in Offerings. Your Value-Add
Components must be of higher value than the Programs.
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2 AGREEMENT STRUCTURE
2.1 The Agreement consists of:
a) this Base Agreement that defines the basic terms and conditions of our
relationship; and
b) Transaction Documents that specify the details of your purchase of
Programs including the prices, Territory, Value-Add Components,
replication requirements, term, and other applicable terms. Both
parties accept the terms of a Transaction Document by signing it.
2.2 If there is a conflict among the terms of the documents, Transaction
Document terms prevail over Base Agreement terms. Terms in your purchase
orders and IBM's invoices are void unless identified otherwise in the
Agreement.
3 OUR RELATIONSHIP
3.1 Each party is an independent contractor. Neither party is, nor will claim
to be, a legal representative, partner, franchisee, agent or employee of
the other except as specifically stated in the Agreement. Neither party
will assume or create obligations for the other. Each party is responsible
for the direction and compensation of its employees.
3.2 Each party may have similar agreement with others. Each party may design,
develop, manufacture, acquire or market competitive products and services
and conduct its business in whatever way it chooses provided there is no
conflict with the Agreement. You will independently establish prices and
terms for Offerings. However, your terms will include those required by the
Agreement.
3.3 All information exchanged is nonconfidential. Where confidential
information must be exchanged, it will be done under a signed
confidentiality agreement. However, you will not disclose the terms of the
Agreement to a third party except a) to your accountants, lawyers or other
professional advisors under a confidentiality agreement or b) as required
by law provided you get all available confidential treatment for them.
3.4 The Transaction Document will identify coordinators that represent each
party and where to send all notices, which must be in writing. A party will
provide notice to the other when its coordinators change.
3.5 Neither party relies on any promises, inducements, representations made by
the other or expectations of more business dealings except as expressly
provided in the Agreement. The parties intend the Agreement as the complete
and final statement of our business agreement.
3.6 You will maintain relevant records to support invoices issued or payments
made to IBM and to show you have otherwise complied with the Agreement. For
each Program licensed, these records must include the Program
Identification, Value-Add Component model numbers and sales and returns
data. You will retain and make available records for three years from the
date of the related transaction or payment. If IBM requests, you will make
financial records available to an independent auditor chosen and
compensated by IBM. IBM's requests will be in writing and will not occur
more than once each year. The auditor will sign a confidentiality agreement
and will only disclose to IBM any amounts due and payable for the period
examined.
If an audit discovers that you underpaid IBM, you will pay the amount due
plus interest. Interest accrues from the payment due date. The interest
rate is the lower of 2% per month or the highest interest rate allowed by
law. If you have underpaid IBM by more than 5%, you will reimburse IBM for
all expenses associated with the audit.
On IBM's request, you will provide assurances satisfactory to IBM,
including substantiating documentation, showing that you have been and are
in compliance with the terms of the Agreement. If you are not in
compliance with the Agreement, you will refund any applicable discount you
received from IBM.
IBM may also have other remedies under the law and the Agreement.
3.7 You may not assign or transfer the Agreement or your rights under it or
delegate or subcontract your obligations without IBM's prior written
approval. Any attempt to do so is void.
4 IBM'S RESPONSIBILITIES
4.1 For Packaged Programs, IBM will provide to you:
a) Programs on dates to be mutually agreed to;
b) if applicable, the IBM Technical Support Document and Administrative
Guide;
c) Related Licensed Materials; and
d) service training as specified in the Transaction Document, for your
personnel at a location to be determined by us. IBM is not responsible
for your cost of said training or any associated expenses.
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4.2 For Manufactured Programs and Embedded Programs, IBM will provide to you:
a) one copy of master replication media of the Programs listed in the
Transaction Document;
b) installation Programs and/or instructions for the Programs, if
applicable;
c) one copy of the Programs with Maintenance Modifications, if any,
released by IBM during the term of the Transaction Document;
d) as applicable, one original copy of each Program License Agreement and
the IBM Technical Support Document and Administrative Guide;
e) Related Licensed Materials and, if applicable, specific instructions
for its customization; and
f) service training as specified in the Transaction Document, for your
personnel at a location to be determined by us. IBM is not responsible
for your cost of said training or any associated expenses.
5 YOUR RESPONSIBILITIES
5.1 You will:
a) ensure that all Value-Add Components listed in the Transaction Document
work with the Programs before you ship your Offerings;
b) ensure that trademarks, copyrights and other notices included in
Embedded Programs continued to appear on the first screens when the
Customer runs the Program in the Offering;
c) retain all references to IBM and other notices in Programs;
d) include Programs with the Value-Add Components in the Offering;
e) provide the Program code in the form provided by IBM (i.e. in object
code) only as part of your Offering;
f) obtain Customer agreement to the License Agreement;
g) distribute a copy of the License Agreement, Related Licensed Materials
and marketing materials identified in the Transaction Document with
your Offering.
h) not internally use Programs other than a reasonable quantity (in no
event more than 20 copies) necessary for you to perform your
responsibilities under this Agreement;
i) ensure that your employees comply with this Agreement and the License
Agreement for Programs they are authorized to use internally; and
j) incorporate Maintenance Modifications on all Embedded or Manufactured
Programs in a commercially reasonable time period after receipt by IBM
but in no event later than 90 days after such receipt.
You will not:
a) reverse assemble, reverse compile or translate the Program code except
as permitted by law without the possibility of contractual waiver;
b) rent, lease, assign or otherwise transfer the Programs, or any copy of
them; or
c) modify translate, patch, alter or otherwise change the Programs.
5.2 Your Distributor agreements for Offerings will be consistent with your
obligations under the Agreement. You will ensure that your Distributors
conduct their business in a way that does not conflict with these
obligations. You will contractually require your Distributors to the
following:
a) Programs will not be sold unbundled from Value-Add Components;
b) if the Programs are sold unbundled, the Distributor is liable to you
for the full retail price as established by IBM plus the cost of
collection;
c) the Distributor must maintain proof of bundled sale for 3 years;
d) Program licensors will have the right to audit or access your records
to demonstrate compliance for 3 years from the date of execution of a
Transaction Document;
e) sales may be suspended and products recalled by you if the Distributor
is in breach (in addition to other legal remedies);
f) the Distributor's rights and licenses are limited to the Territory;
g) the Distributor will not reverse assemble, reverse compile or translate
the Program code except as permitted by law without the possibility of
contractual waiver; and
h) if the Distributor sells to another distributor, it must bind that
distributor to the terms of this paragraph.
5.3 For all Package Programs licensed under the terms of the License Agreement
provided by IBM, you will accept returned Programs with the Value-Add
Components from your Customers and refund the amount paid for (i) defective
Package Programs returned to you under the terms of its warranty; (ii)
Package Programs returned when the Customer does not accept the terms of
the License Agreement. You are responsible for ensuring that your
Distributors provide Customer refunds accordingly. For each return (or
disposal at IBM's request), IBM will give you a credit for the amount you
paid for the Package Program.
5.4 In the event IBM determines that a Distributor has breached the terms of
its Distributor agreement, IBM may require you to, and you will, suspend
further sales to and recall Programs from the offending Distributor at your
expense.
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5.5 You will promptly suspend distribution of Programs, and you will notify
your Distributor to promptly suspend Program sales to countries IBM or its
licensors identify from time to time as not having sufficient copyright
protection.
5.6 You will educate and instruct, both formally and informally, your sales
force and Distributors on relevant terms of this Agreement, including the
requirement that Programs may only be licensed when bundled with Offerings.
5.7 You will market Offerings in a manner which does not enable the Distributor
or Customer to determine a separate cost or price for the Programs alone.
5.8 On request, you will provide IBM with reasonable access to Offerings for
IBM's review to determine compliance with the Agreement.
6 ORDERS AND PAYMENT
6.1 You will order Packaged Programs by issuing a written purchase order which
identifies internal use quantities and includes the information specified
in the Transaction Document. You will place purchase orders for Packaged
Programs before you include them in Offerings. You will pay IBM, its
Subsidiary or its or their designee for Package Programs within thirty (30)
days after receiving an invoice.
6.2 For Embedded Programs or Manufactured Programs, you shall provide to IBM,
within fifteen (15) days after the conclusion of each month, a monthly
accounting, and payment based on such accounting, of all payments accruing
to IBM for all copies of Products distributed externally or installed
internally during such month by you or your Distributors. You shall send a
copy of such accounting to the person specified in the Transaction
Document, and with payments, to:
International Business Machines Corporation
Branch Office JWQ
Internal Zip 261
150 Kettletown Road
Southbury, CT 06488
Each such accounting shall include a statement summarizing for the
preceding month and for each country in the Territory, the following: (i)
the number of copies of the Programs distributed externally or installed
internally; (ii) total revenue for such Programs so placed; and (iii) an
explanation of how the payment was calculated.
6.3 Except as provided in Section 10.2, the price you pay for Programs is
specified in the Transaction Document. All payments will be made in U.S.
dollars. If you do not pay in the time period specified by the Agreement,
in addition to other remedies available to IBM, you will be invoiced for,
and you will pay, interest on late payments at a rate of the lower of 2%
per month or the highest interest rate allowed by law. If you have not
ordered Package Programs or paid for Embedded Programs or Manufactured
Programs for the total committed volume of Programs specified in the
Transaction Document by forty-five (45) days prior to the end of each term
IBM may invoice you for the remaining balance. If you make timely payments
on the invoice, your license rights will continue as provided in this
Agreement. Payment in full is due on receipt of the invoice. You will pay
IBM, its Subsidiary or its or their designee within thirty (30) days after
receiving the invoice.
6.4 You will pay amounts equal to any applicable taxes resulting from any
transaction under the Agreement unless you can show that you are exempt.
This does not include taxes based on IBM's net income. You are responsible
for personal property taxes for each Package Program from the date IBM
delivers it to the carrier. You will pay any import or export duties or
tariffs resulting from the shipment, import or export of any Offerings.
If you are exempt, you will provide IBM with valid reseller-exemption
documentation (or equivalent) for each applicable taxing jurisdiction to
which IBM ships Programs before placing any purchase orders. Otherwise,
IBM may charge you all applicable taxes and duties. You will promptly
provide IBM notice if this documentation is revoked or modified. You are
liable for any claims or assessments that result from any taxing
jurisdiction refusing to recognize your exemption. You are responsible for
any applicable taxes and duties on Programs you use internally.
In the event income taxes are required to be withheld by any non-US
government from any payments required under the Agreement, you may deduct
such taxes from the amount owed IBM and pay them to the appropriate tax
authority. You will promptly deliver to IBM an official receipt for any
such taxes withheld or other documents necessary to enable IBM to claim a
USA Foreign Tax Credit. You will make certain that any taxes withheld are
minimized to the extent permitted by the applicable law.
6.5 IBM may withdraw Programs either on a temporary or permanent basis. If the
withdrawal is based on an infringement claim or a significant Program
defect, you will suspend further distribution of Programs. For other
withdrawals, you and your Distributors will only distribute copies that IBM
has previously authorized before the date of withdrawal. IBM will use
commercially reasonable efforts to provide you notice at least 60 days
before a permanent withdrawal and provide you with as much notice as
possible for temporary withdrawals.
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6.6 IBM may require you to establish an irrevocable letter of credit in favor
of IBM or to prepay for Programs if you do not comply with your payment
obligations.
7 INTELLECTUAL PROPERTY AND GRANTS
7.1 IBM provides Programs with limited and restricted rights for U.S.
Government users.
7.2 Each party keeps title to its copyrights, patents and any other
intellectual property rights in the materials in your Offerings. IBM does
not transfer title to the copyright in the Programs to you.
7.3 IBM will notify you in written guidelines of the IBM, IBM Subsidiary and
its and their licensor trademarks or service marks (Trademarks) which you
are authorized to use. You may not modify the Trademarks in any way.
7.4 You may use Trademarks only:
a) in conjunction with the authorized sale of all Offerings; and
b) as described in the written guidelines provided to you.
The royalty normally associated with the non-exclusive use of the
Trademarks will be waived provided they are used only in conjunction with
the sale of Offerings.
You agree to promptly modify any advertising or promotional materials that
do not comply with the guidelines. If you receive any complaints about
your use of a Trademark, you agree to promptly notify us. When the
Agreement ends, you agree to promptly stop using applicable Trademarks. If
you do not, you agree to pay any expenses and fees we incur in getting you
to stop.
Trademarks and any goodwill resulting from them, belong to their respective
owners.
7.5 For Embedded Programs, IBM grants you (and not your Distributors) a
nontransferable, nonexclusive copyright licenses to install each Embedded
Program onto the specified Hardware Value-Add Component. IBM grants you
(and not your Distributors) a nontransferable, nonexclusive copyright
license to copy Related Licensed Materials associated with the Embedded
Program for inclusion in your Offerings. These licenses extend to Embedded
Programs which include Maintenance Modifications, if any.
7.6 For Embedded Programs, IBM grants you (and not your Distributors) a
nontransferable, nonexclusive copyright license to copy each Manufactured
Program for inclusion in your Offering. IBM grants you (and not your
Distributors) a nontransferable, nonexclusive copyright license to copy
Related Licensed Materials associated with the Manufactured Program for
inclusion in your Offerings. These licenses extend to Manufactured Programs
which include Maintenance Modifications, if any.
7.7 IBM grants you a nontransferable, nonexclusive copyright license for you to
distribute copies of the Programs with the Value-Add to Customers only as
part of Offerings directly or through your Distributors and as specified in
this Agreement. This license extends to Programs which include Maintenance
Modifications, if any.
7.8 Except as expressly provided in this Agreement or a separate agreement, IBM
does not grant you, your Distributors or Customers any rights or licenses
under IBM's patents, copyrights, trademarks or other intellectual property
rights, or to prepare derivative works of the Program.
7.9 Your rights and licenses to the Programs are limited to the Territory.
8 WARRANTY
8.1 All warranties that each party provides under the Agreement are solely for
the other party's benefit. You may not transfer or assign any of these
warranties.
8.2 Each party warrants to the other that:
a) it has the necessary expertise, capabilities and resources to perform
all its obligations under the Agreement; and
b) it is not under and will not assume any contractual obligation that
conflicts with its obligations or the rights granted in the Agreement.
8.3 Except for Programs, you warrant that you have the rights and licenses
needed to develop Offerings and transfer them to your Distributors and
Customers.
8.4 The only warranties and indemnities provided for Programs are those granted
to Customers in the License Agreement.
8.5 IBM DOES NOT WARRANT TO YOU THAT THE PROGRAMS OR YOUR OFFERIGS WILL MEET
THE REQUIREMENTS OF YOU, YOUR DISTRIBUTORS OR CUSTOMERS, OR THAT THEIR
OPERATION WILL BE
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UNINTERRUPTED OR ERROR FREE. EXCEPT AS EXPRESSLY PROVIDED IN THE AGREEMENT,
IBM PROVIDES THE PROGRAMS TO YOU "AS IS" WITHOUT WARRANTY. IBM DISCLAIMS
ALL OTHER WARRANTIES, EXPRESS OR IMPLED, INCLUDING THE IMPLIED WARRANTIES
OF NONINFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE.
8.6 You will not make any representations or warranties about IBM or the
Programs other than those authorized by IBM.
9 INDEMNIFICATION
9.1 If an infringement claim appears likely or is made about a Program in your
possession, you will let IBM:
a) modify or replace it; or
b) obtain the necessary rights for you to continue to market and use the
Program.
If IBM concludes that none of these alternatives is reasonably available,
you will return or destroy the Programs on IBM's written request. IBM will
reimburse you for the price you paid IBM for Programs in your possession.
This is IBM's entire obligation to you for these claims.
9.2 If a third party makes a claim against IBM based on your representations
not authorized by IBM, your Offerings or warranties, you will indemnify IBM
against that claim at your expense.
9.3 The indemnifying party will pay any settlement amounts it authorizes and
all costs, damages and attorneys' fees that a court finally awards if the
other party:
a) promptly provides the indemnifying party with written notice of the
claim; and
b) allows the indemnifying party to control and cooperates with it in the
defense of the claim and settlement negotiations.
The other party may participate in the proceedings at its option and
expense.
10 LIMITATION OF LIABILITY
10.1 Circumstances may arise where, because of a breach or other liability, one
party may recover damages from the other. Regardless of the type of claim,
the following terms apply.
10.2 Each party is only responsible for:
a) payments referred to in Indemnification; and
b) the amount of any other actual loss or damage, up to the greater of
$100,000 or the charges for the Programs that are the subject of the
claim. This limitation does not apply to payments due under the
Agreement.
Notwithstanding any terms to the contrary in the Agreement, in the event
You or your Distributors fail to comply with the packaging and retailing
obligations required by the Agreement, you are also liable to IBM (in
addition to other remedies available to IBM) for the full retail price as
established by IBM plus the cost of collection for all Programs you cannot
prove were licensed in an authorized bundled Offering.
10.3 IBM is also responsible for bodily injury (including death) and damage to
real property or tangible personal property caused by the Programs as
provided by IBM. You are also responsible for bodily injury (including
death) and damage to real property or tangible personal property caused by
your Offerings. IBM is not responsible for damages arising from or related
to the use of the Programs outside of the Territory
10.4 Neither party is liable to the other for economic consequential damages
(including lost profits or savings) or incidental damages, even if informed
that they may occur. Under no circumstances will IBM indemnify you or be
liable for any of the following:
a) third party claims against you for losses or damages other than those
described in Indemnification;
b) loss of, or damage to, any records or data;
c) testing, safety or performance of your Offerings;
d) the use of a Program in other than its specified operating environment;
e) the combination, operation or use of a Program with any other program,
product, data or apparatus;
f) infringement by a non-IBM branded Program alone; or
g) the use of Programs for medical applications or with nuclear materials
or other hazardous activities.
Terms in Indemnification and Limitation of Liability are subject to this
subpart.
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11 TERM AND TERMINATION
11.1 Each Transaction Document will specify the term of a particular
transaction.
11.2 Either party may terminate this Base Agreement or a Transaction Document:
a) on sixty (60) days' written notice without cause;
b) on thirty (30) days' written notice for breach, provided that such
termination shall not be effective if the breach is cured within the
notice period; or
c) on written notice of the other party:
1) becomes insolvent or is the subject of any legal insolvency
proceedings;
2) transfers 50% or more of its assets to another organization; or
3) acts or fails to act in a way that is so serious as to warrant
immediate termination, including but not limited to unauthorized
sale of Programs, sales of Programs other than when bundled with
Value-Add Components, or violation of intellectual property
rights.
11.3 In the event IBM elects to terminate this Agreement pursuant to Section
11.2(a) you and your Distributors may:
1) fill applicable order received before the termination or
expiration;
2) fill new orders for up to twelve (12) months after the date of the
last party to sign to this Agreement ("Commencement Date")
provided such termination occurs after receipt of your second
payment to IBM, as specified in Section 10(c) of the Transaction
Document below, and up to twelve (12) months after receipt of your
third payment to IBM, as specified in Section 10(c) of the
Transaction Document below; and
3) keep one archival copy of the applicable Program and Related
Licensed Material. You must destroy all other copies.
Termination or expiration of the Agreement or any Transaction Document
does not affect previously granted paid-up licenses to Customers or any
rights or licenses granted to you under any other Agreements. Accordingly,
the following terms shall extend beyond termination or expiration: (i)
Orders and Payment; (ii) Intellectual Property; (iii) Indemnification;
(iv) Limitation of Liability; and (v) Term and Termination. These terms
will apply to either party's successors and assigns.
12 ADVERTISING AND MARKETING
12.1 Neither party will issue press releases or other publicity regarding the
Agreement or our relationship under it without the prior written approval
of the other party.
12.2 A Transaction Document will state if a Marketing Review Board (MRB)
applies. In the event a MRB applies, you will comply with the obligations
specified in the Transaction Document. MRB is an IBM established marketing
review board, comprised of representatives of IBM and its licensors, which
determines product packaging and promotional material requirements for
Programs.
13 GENERAL
13.1 Each party will comply with all applicable laws and regulations at its
expense. This includes all export and import laws and regulations. You
will not provide Programs, Offerings or technical data to countries or
individuals if prohibited by law or regulation.
13.2 If any provision of the Agreement is unenforceable at law, the rest of the
provisions remain in effect. The headings in the Agreement are for
reference only. They will not affect the meaning or interpretation of the
Agreement.
13.3 Neither party will bring a legal action against the other more than two
years after the cause of action arose. This does not apply to actions
brought to enforce intellectual property rights or obligations under
Indemnification and Limitation of Liability. Both parties will act in good
faith to resolve disputes. Each party waives its rights to a jury trial in
any resulting litigation. Litigation will only be commenced in the State
of New York.
13.4 Except as specifically provided in the Agreement, for a change to the
Agreement to be valid, both parties must sign it. No approval, consent or
waiver will be enforceable unless signed by the granting party. Failure to
insist on strict performance or to exercise a right when entitled does not
prevent a party from doing so later for that breech or a future one.
13.5 The substantive laws of the State of New York govern the Agreement. The
United Nations' Convention on International Sale of Goods does not apply.
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IBM/OEM Software Agreement
Transaction Document Number 4999FA01063
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Thank you for doing business with IBM. This is a Transaction Document under the
IBM/OEM Software Agreement No. 4999FA0932 ("Agreement'). This Transaction
Document becomes effective when signed by both parties.
By signing below for our companies, each of us agrees to the terms of this
Transaction Document. Once signed, 1) both parties agree any reproduction of
the Agreement made by reliable means (for example, photocopy or facsimile) is an
original unless prohibited by local law and 2) all Programs are subject to it.
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Agreed to: Agreed to:
<S> <C>
International Business Machines Corporation Conversit.com, Inc.
By: /s/ Peter Blacklock By: /s/ Dean Weber
------------------------------------------------ --------------------------------------
Name: Peter Blacklock Name: Dean Weber
Date: 9/21/99 Date: 9/21/99
--------------------------------------------- --------------------------------------
IBM Address: Conversit.com Address:
1555 Palm Beach Lakes Blvd., 6333 Greenwich Dr.,
Suite 700 Suite 240
West Palm Beach, FL 33433 San Diego, CA 92122
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IBM/OEM Software Agreement #4999FA0932
Transaction Document Number 4999FA01063
---------------------------------------
CONTINUOUS DICTATION DISTRIBUTION PKG.
--------------------------------------
1. Program(s)/Prices: You will pay IBM the applicable amount identified below
for each copy of the following Program(s) that you distribute. For the
purposes of this Agreement, these are Embedded Programs.
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Part Description ISV 24 Month
Number Price Volume
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4300810 One title for Continuous Dictation $900,000 Unlimited for
Distribution Package 5.3 one title
(Continuous Dictation, Text-to-Speech and
Command & Control for U.S. English, U.K.
English, Spanish, German, French and Italian)
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2. Value-Add Components which must be included in Offerings:
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Vendor Application SKU
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Conversit.com (Name TBD) U.S. English TBD
" " U.K. English TBD
" " Spanish TBD
" " German TBD
" " French TBD
" " Italian TBD
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3. Related Licensed Materials which must be included in Offerings:
Related Licensed Materials will be included in your Offering in the
appropriate languages and with the appropriate terms for the geographies in
which it will be distributed.
4. Terms of Use
a) Prior to shipment, Conversit.com shall provide IBM the Application name
associated with the single title as well as the SKU's of the associated
language versions listed in Section 2, "Value-Add Components", above.
b) Conversit.com's rights hereunder shall not apply to any languages other
than those specified in Section 1, "Description", above.
c) Variances between SKU's shall be limited solely to those necessary to
differentiate between languages.
d) Conversit.com's rights hereunder shall not apply to new releases of the
single title Application defined in Section 2, "Value-Add Components",
above, other than an "Update" release, which shall be designated as a
change in the hundredths digit [x.x(x)] of any component of the single
title granted.
5. Territory is World Wide, with the exception of prohibited countries which
include Cuba, Iraq, Iran, Libya, and North Korea.
6. Term: Notwithstanding Section 11.2a above, the term of this Transaction
Document will be two (2) years from the "Commencement Date".
7. License Agreement Requirement: You will include in your Offering(s) the
License Agreement in the appropriate languages and with the appropriate
terms for the geographies in which it will be distributed.
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8. Technical Support: You or your Distributors will provide Level 1 Service
and Level 2 Service to Customers. You will include with your Offerings a
conspicuous description of Level 1 and Level 2 Services and the method and
means the Customer shall use to contact your Level 1 and Level 2 Services.
IBM will provide Level 3 Service to you during the time that such service
is available to all other IBM customers of the IBM Product.
9. Coordinators: The following contract coordinators are authorized to
receive notices under this Transaction Document and the Base Agreement:
<TABLE>
<CAPTION>
Name Peter Blacklock Dean Weber
<S> <C> <C>
Company IBM Conversit.com, Inc.
Address 1555 Palm Beach Lakes Blvd. 6333 Greenwich Drive
Suite 700 Suite 240
City, State West Palm Beach, FL San Diego, CA 92122
Telephone: (561) 615-7080 858-552-4466
Fax: (561) 615-7008 858-525-4474
</TABLE>
10. Purchase Order Requirements:
a) Your purchase order will contain the following information: purchase
order number, order quantity, requested delivery date, a contact name
and phone number, and your shipping location.
Your orders will be sent to:
IBM Branch Office JWQ
Accounts Receivable - Internal Zip 261
150 Kettletown Road
Southbury, CT 06488
b) For a period of two years after the "Commencement Date", Conversit.com
shall receive unlimited distribution rights to use the Embedded
Programs with the single title Application defined in Section 2,
"Value-Added Components" (and not its Derivative Works), for a total
fee of $900,000.
c) Conversit.com shall pay IBM an initial payment of $300,000 the
commencement Date and Conversit.com shall pay IBM $150,000 within
thirty (30) days of receipt of initial payment. Conversit.com shall
pay IBM $450,000 upon the first anniversary of the Commencement Date.
11. Miscellaneous Terms/Conditions:
a) Price includes Golden Master/license, soft copy documentation, level 3
support and support training, including IBM participation at
Conversit.com roadshow events up to ten (10) days. Conversit.com shall
pay for all travel expenses incurred by IBM at such events.
b) Price excludes documentation, microphone, additional media and levels
1 & 2 support.
c) No product returns are allowed.
d) Conversit.com will pay shipping and freight charges.
e) Conversit.com will attribute IBM Technology in packaging and
advertising via print, radio, T.V., etc. as mutually agreed upon in
writing.
f) Subject to IBM's prior written approval, such approval not to be
unreasonably withheld or delayed, Conversit.com shall be allowed to
issue a press release referencing this Agreement between IBM and
Conversit.com. In addition, IBM shall use commercially reasonable
efforts to provide a quote from a senior Speech executive within ten
(10) business days of receiving the press release from Conversit.com
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g) Conversit.com will receive Updates on the runtime, as they are made
available, at no charge, during the terms of this Agreement.
h) Provided IBM list a business partners on the ViaVoice homepage, and
Conversit.com has signed an IBM Business Partner Agreement with IBM,
Conversit.com will be afforded the same attribution rights as other
IBM Business Partners, subject to the term of this Agreement.
i) A representative from IBM's Speech and Pen Systems, will be a member
of the Conversit.com advisory board for the initial term of this
Agreement.
In the event IBM elects to terminate this Agreement pursuant to Section 11.2(a)
above, IBM's obligations under this Section 11(f); (g); (h) and (i) shall cease.
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