<PAGE>
Exhibit 10.7
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
--------------------------------------------------------------------------------
MERANT INC.
DISTRIBUTOR LICENSE AGREEMENT
This Agreement is made between MERANT Inc., a California corporation, with
offices at 9420 Key West Avenue, Rockville, Maryland 20850 ("MERANT") and
Desktalk Systems Inc., with offices at 19401 S. Vermont Avenue, 9th Floor,
Torrance, CA 90502 ("Distributor"), and takes effect on July 15, 2000
("Effective Date").
This Agreement is based on the following understandings between the
parties:
A. MERANT is willing to provide to Distributor, under business terms
specified in Schedule A, the MERANT Products specified in Schedule B; and
B. Distributor wishes to obtain the rights to include these MERANT
Products in Distributor's software products.
Therefore, in consideration of the mutual promises, rights, and
responsibilities described below, the parties agree as follows:
1. Definitions. When used in this Agreement and its Schedules, the
underlined phrases in this Section shall have the following meanings:
1.1 MERANT Product(s) shall mean those software products listed in
-----------------
Schedule B, including all revisions, enhancements, upgrades, and new versions
thereof released generally to MERANT's customers as part of support and
maintenance. Further, unless specified otherwise in Schedule B, the definition
of MERANT Product is restricted to the OEM Version of the MERANT Product, where
the OEM Version is a MERANT Product restricted for use with Distributor's
application using MERANT's Branding Toolkit or other such locking mechanism
approved by MERANT.
1.2 Distributor Application(s) shall mean software products developed
--------------------------
by Distributor or for which Distributor otherwise has distribution rights that
are listed in Schedule A and all revisions, enhancements, upgrades, and new
versions thereof. In addition, Distributor's Applications must: (a) be in
compiled, executable form; (b) not provide substantially the same functionality
as the MERANT Products or have as one of their purposes to build other
applications that would compete with the MERANT Products; and (c) not expose the
source code or methodologies or document in any manner the programmatic
functions of the MERANT Products. Additionally, unless otherwise provided in
Schedule A, Distributor Applications shall not include "runtime" product
versions - i.e., versions of the Distributor Applications that allow end-user
applications created with Distributor Applications to be utilized by another
end-user.
1
<PAGE>
2. Grant of Distributorship.
------------------------
2.1. Appointment of Distributor. Subject to the terms and conditions
--------------------------
of this Agreement, MERANT authorizes Distributor to distribute and sublicense
the MERANT Products but only to the extent those Products are incorporated into
or are part of permitted Distributor Applications. Distributor may not
distribute or sublicense a MERANT Product as a stand-alone product. The
distribution rights granted hereunder shall be worldwide, except that
Distributor shall be solely responsible at all times for strict compliance with
all laws governing the exportation of the MERANT Products. Distributor agrees
not to reverse compile, translate, or disassemble the MERANT Products, in whole
or in part, and further agrees that it will provide the same level of security
for MERANT Products as it provides for its own products, but in no event less
than reasonable care, to prevent third parties from performing such activities.
MERANT reserves all rights not expressly granted to Distributor in this License.
2.2 Distribution Procedure. MERANT will provide Distributor with the
----------------------
MERANT Products, which may be used only in the form specified in Schedule B.
2.3 Restriction on Licensing/Distribution. All distribution of the
-------------------------------------
MERANT Products to end-users must be done pursuant to a software license
agreement that provides for limitation of damages for breaches of product
performance, reasonable intellectual property protection, and other
representations and warranties, limiting remedies to the license fees paid for
the product, and that excludes the recovery of special, consequential, and
indirect damages.
2.4 Title to Software. Subject to the rights granted to Distributor
-----------------
herein, all right, title, and interest in and to the MERANT Products, including
code, sequence, logic, structure and screens, and Documentation, and in and to
any improvements, enhancements, updates, or upgrades thereto, including concepts
and technology inherent in the MERANT Products, are, and at all times shall
remain, the sole and exclusive property of MERANT. Nothing contained in this
Agreement shall be construed directly or indirectly to assign or grant to
Distributor any right, title, or interest in or to trademarks, copyrights,
patents, or trade secrets of MERANT, or any ownership rights in or to the MERANT
Products.
3. Royalty Fees.
------------
3.1 Royalties for Applications. For each license granted by
--------------------------
Distributor allowing use of a Distributor Application, Distributor shall pay the
royalty as specified in Schedule A.
3.2 Minimum Annual Guaranteed Royalty. For each annual period
---------------------------------
("Period") during which this Agreement is in effect, Distributor shall pay to
MERANT a Minimum Annual Guaranteed Royalty in the amount specified in Schedule A
for the right to use the MERANT Products in Distributor Applications.
Distributor shall pay this Minimum Annual Guaranteed Royalty as agreed to by the
parties as set forth in Schedule A to the extent it has not already been paid
under the procedures of Section 3.4.
3.3 Advance Royalty Payment. Upon execution of this Agreement,
-----------------------
Distributor shall prepay to MERANT a non-refundable royalty in the amount
specified in Schedule A. This Advance Royalty Payment shall be credited against
the first royalties reported under the
2
<PAGE>
procedures specified in Section 3.4. It shall be refimded to Distributor only
upon MERANT's material, uncured breach of this Agreement.
3.4 Reports and Payments Due. At such times as indicated in Exhibit
------------------------
A, Distributor shall provide reports in a form substantially similar to the
sample form attached as Exhibit D. To the extent that such reports indicate
royalty payments due in excess of the scheduled payment installment, such
amounts shall be included on the invoice for the next scheduled payment
indicated in Schedule A. In the case of royalties to be paid after the final
scheduled payment (if any), or after the Minimum Annual Guaranteed Royalty has
been met, MERANT shall deliver an invoice for such royalties within thirty (30)
days of receiving the report. Distributor shall make payment upon receipt of the
invoice from MERANT. All sums are to be paid in United States dollars. Any
payment not received when due shall bear interest at the rate of 18% per annum,
calculated monthly. Any payments (NLAR, royalties, etc.) made during a Period
shall not be applied to the Minimum Annual Guaranteed Royalty of any other
Period. Distributor's failure to provide reports as indicated in Schedule A
shall be considered a material breach of this Agreement, and MERANT shall be
entitled to terminate this Agreement for cause under the provisions of Section
10.2 below.
3.5 Records. Distributor shall keep true and accurate records of all
-------
Applications and MERANT Products distributed, in accordance with generally
accepted accounting principles, consistently applied. No more frequently than
once per year, MERANT shall have the right (upon ten business days prior notice)
to have a certified public accountant selected by MERANT audit the books of
Distributor to determine whether all royalties due have been paid. MERANT shall
pay the cost of such investigation, except in the event that such accountant
finds that royalties due for a period investigated have been underpaid by ten
percent (10%) or more, in which case the entire cost of the investigation shall
be bome by Distributor. Distributor shall immediately pay to MERANT any amounts
discovered to be owed as a result of the investigation, plus interest at the
rate of eighteen percent (1 8%) per annum, calculated monthly for each month the
amount due was outstanding.
3.6 Financial Considerations. MERANT may assign and sell to a bank
------------------------
to be named, the amounts set forth herein due MERANT. The parties acknowledge
and agree that, in documents evidencing any such assignment, there will be
provisions, among others, providing that any such bank: (a) disclaims any
representation, guaranty or warranty, express or implied, including any implied
warranty of merchantability or fitness for a particular purpose regarding any
goods or services to be provided hereunder; and (b) will not be liable for any
loss or injury caused to MERANT Product licensees or any other person or
property (including lost profits and consequential, incidental or special
damages) directly or indirectly produced by any such goods, their failure to
operate properly, or any services.
4. Representation and Warranties of Distributor.
--------------------------------------------
4.1 Copyright. Distributor warrants that any publication of
---------
Distributor Applications will contain a copyright notice in the name of MERANT
in the following manner: "Portions of this software are copyrighted by MERANT,
1991-2000" and the copyright notice encoded in the MERANT Products shall be
reproduced with the MERANT Products. Distributor
3
<PAGE>
shall display the MERANT copyright notice in those places where Distributor's
copyright notice is displayed.
4.2 Authority. Distributor represents and warrants that it has the
---------
authority to enter into this Agreement, and to distribute the Distributor
Applications as contemplated hereunder, and that the performance of this
Agreement shall not cause a breach of any other obligation of Distributor.
5. Duties of Distributor.
---------------------
5.1 Support. Distributor will provide support to its customers
-------
consistent with its customary support policies and through its standard support
channels.
5.2 Licenses. If Distributor believes, or is made aware, that any of
--------
MERANT's contractual, statutory, intellectual property or other rights are being
violated, it agrees to notify MERANT promptly and cooperate in any
investigation.
5.3 Compliance with Export Regulations. Distributor agrees that it
----------------------------------
shall at all times comply with all export laws and regulations of the United
States, as such laws and regulations may exist from time to time. Distributor
will indemnify and defend MERANTT from and against any claim that Distributor's
exportation of the MERANT Products violate such laws, and will pay all costs,
fines, damages or fees related to claims or findings of such violations.
6. Duties of MERANT.
----------------
MERANT shall provide support as specified in Schedule C for the fees
set forth in Schedule A ("Support Fees"). Such support shall be for the
exclusive benefit of Distributor; MERANT shall not provide support to any
dealer, agent, representative, assignee or end-user customer of Distributor.
Such Support Fees are due and payable as specified in Schedule A.
7. Trademarks and Trade names.
--------------------------
7.1 Acknowledgment of Rights. Distributor acknowledges MERANT's
------------------------
representation that MERANT is the owner of all right, title, and interest in and
to those trademarks listed in Schedule B and Distributor agrees not to adopt or
use the Trademarks in any manner whatsoever except as expressly provided in this
Agreement.
7.2 Use of Trademarks in Connection with Software and Services.
----------------------------------------------------------
Distributor agrees to use the Trademarks only to identify the MERANT Products or
to identify the authorized support and warranty services described.
Distributor's use of the Trademarks shall at all times be in accordance with
such styles and together with such Trademark notices as MERANT may require.
Distributor shall not combine the Trademarks with any other names or marks, and
agrees that this Agreement does not constitute any conveyance of any right,
title or interest in or to any Trademarks, except for the permitted uses
provided herein.
7.3 Infringements. Distributor shall promptly notify MERANT if
-------------
Distributor believes, or has been made aware, that there has been an
infringement or attempted infringement
4
<PAGE>
of any MERANT Trademark, and shall assist MERANT at MERANT's expense in taking
such action against such infringement as MERANT, in its discretion, may elect.
8. Warranty.
--------
8.1 Warranty on Software. MERANT warrants that the MERANT Products
--------------------
will conform in all material respects to their written Documentation at the time
of delivery to Distributor and for a period of thirty days (30) thereafter.
MERANT makes no warranty to the end-users of Distributor Applications, any such
warranty to be made and honored by Distributor alone. NO OTHER WARRANTY OR
CONDITION, EXPRESSED OR IMPLIED, INCLUDING WARRANTIES OR CONDITIONS RELATED TO
FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, IS GRANTED TO DISTRIBUTOR
OR ENDUSERS, AND ALL SUCH WARRANTIES AND CONDITIONS ARE EXPRESSLY EXCLUDED.
8.2 Defective Software. Should the MERANT Products fail to meet the
------------------
warranty set forth above, MERANT will, at its sole option, repair or replace the
MERANT Products such that they conform to their Documentation. In the event such
options are not commercially practical, MERANT shall return any Advance Royalty
Payment specified under Section 3.3.
8.3 Remedies. Sections 8 and 9 CONTAIN THE EXCLUSIVE
--------
REPRESENTATIONS, WARRANTIES AND ASSOCIATED REMEDIES FOR ANY CLAIM ASSOCIATED
WITH THE PERFORMANCE OF THE MERANT PRODUCTS, REGARDLESS OF WHETHER SUCH CLAIM IS
MADE IN CONTRACT, TORT OR ON OTHER LEGAL THEORY.
9. Liability and Indemnification.
-----------------------------
9.1 Limitations on Liability. Distributor agrees that, regardless of
------------------------
the form of any claim, DISTRIBUTOR'S SOLE REMEDY AND MERANT'S SOLE OBLIGATION
SHALL BE GOVERNED BY THIS AGREEMENT, AND IN NO EVENT SHALL MERANT'S LIABILITY
EXCEED THE ROYALTIES ACTUALLY PAID FOR THE MERANT PRODUCT(S) THAT GAVE RISE TO
THE CLAIM DURING THE 12 MONTH PERIOD IMMEDIATELY PRECEDING THE CLAIM, PROVIDED
THAT THE ABOVE LIMITATION SHALL NOT APPLY TO CLAIMS FOR INFRINGEMENT PURSUANT TO
SECTION 9.3 OF THIS AGREEMENT. DISTRIBUTOR EXPRESSLY AGREES THAT IN NO EVENT
SHALL MERANT BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES
ARISING FROM SECTION 9.3, BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, OR
ANY OTHER LEGAL THEORY, WHETHER IN TORT OR CONTRACT, EVEN IF MERANT HAS BEEN
APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING, INCLUDING WITHOUT
LIMITATION DAMAGES FROM INTERRUPTION OF BUSINESS, LOSS OF PROFITS OR BUSINESS
OPPORTUNITIES, LOSS OF USE OF SOFTWARE, LOSS OF DATA, COST OF RECREATING DATA,
COST OF CAPITAL, COST OF ANY SUBSTITUTE SOFTWARE, OR LOSSES CAUSED BY DELAY.
MERANT shall not be responsible for any damages or
5
<PAGE>
expenses resulting from alteration or unauthorized use of the MERANT Products,
or from unintended or unforeseen results obtained by Distributor resulting from
such use.
9.2 Warranty Exclusions. Should any law under which this Agreement
-------------------
is interpreted prohibit exclusion of certain conditions or warranties, the
required conditions or warranties shall be deemed included. The liability of
MERANT for any breach of such term, condition or warranty shall be limited, at
the option of MERANT, to any one or more of the following: (a) replacement of
the MERANT Products with functionally comparable software; (b) repair of the
MERANT Products to meet the required warranty or condition; (c) payment of the
cost of replacing the MERANT Products or of acquiring equivalent software; (d)
payment of the cost of having the MERANT Products repaired; or (e) a refund of
the royalties paid for the software giving rise to the claim.
9.3 Intellectual Property Right Infringement. MERANT shall, at its
----------------------------------------
cost, defend or, at its sole option, settle any claim or suit brought against
Distributor for infringement by an MERANT Product of a United States copyright,
patent, trademark or trade secret provided that Distributor (a) notifies MERANT
promptly in writing of any such claim or suit; (b) gives MERANT full information
and assistance in settling and/or defending the suit; and (c) gives MERANT full
authority and control of the defense and/or settlement of any such action.
MERANT shall not be liable for any costs or expenses incurred by Distributor (a)
without MERANT's prior written authorization; (b) for any claim that arises in
whole or in part from the use of non-MERANT products in Distributor Application;
(c) for any claim based on Distributor's modification of the MERANT Products; or
(d) from use of other ffim the latest or second most recent available version of
the MERANT Products. If the MERANT Products become subject to a claim of
infringement for which MERANT may become liable, MERANT may at its option (a)
obtain the right to continue using the MERANT Products; (b) replace or modify
the MERANT Products to make them non-infringing, so long as the replacement or
modification meets substantially similar specifications; or (c) terminate this
Agreement and refimd to Distributor the royalties paid under this Agreement.
EXCEPT FOR THESE REMEDIES, MERANT SHALL HAVE NO LIABILITY TO DISTRIBUTOR OR ITS
CUSTOMERS FOR COPYRIGHT, PATENT, TRADEMARK OR TRADE SECRET OR ANY OTHER CLAIM
ASSOCIATED WITH INFRINGEMENT OF A PROPRIETARY RIGHT, NOR ANY LIABILITY TO
DISTRIBUTOR OR ANY SUBLICENSEE FOR DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES
FROM INFRINGEMENT.
10. Term and Termination.
--------------------
10.1 Tenn. This Agreement shall have an initial term from the
----
Effective Date through the date specified on Schedule A and shall thereupon
terminate automatically. This Agreement may be renewed subsequently, however,
for any specified period of time upon mutual written consent of the parties.
10.2 Termination for Cause. MERANT may terminate this Agreement if
---------------------
Distributor fails to make any payment, or provide any required reports, when
due, including but not limited to failure to timely pay the Minimum Annual
Guaranteed Royalty, and thereafter fails to make payment in full, or provide any
required reports, within ten (10) days of notice by MERANT of its intention to
terminate. In the event of such Termination by MERANT for
6
<PAGE>
Cause, the unpaid portion of all Minimum Annual Guaranteed Royalties specified
in Schedule A shall be immediately due and payable.
10.3 Termination by Either Party. Either party may terminate this
---------------------------
Agreement upon the happening of one of the following events if the other party
fails to cure the problem within thirty (30) days of notice of an intent to
cancel.
a. The other party materially breaches any warranty or other
term of this Agreement or fails to perform any material duty
required hereunder; or
b. The other party materially fails to comply with any legal
prerequisites, formalities, and/or government regulations.
10.4 Effect of Termination. Distributor agrees that upon expiration
---------------------
or termination of this Agreement under this Section 10, MERANT is discharged
from any further obligations under this Agreement and Distributor's rights to
distribute and license the MERANT Products and to use MERANT's trade name and
trademarks shall cease as of the date of such expiration or termination except
as follows: Within forty five (45) days of the delivery by MERANT or receipt by
MERANT of a notice of termination at the end of any term or expiration, or
within ten (10) days after automatic termination or termination for cause,
Distributor shall: (1) return to MERANT all MERANT Product media, if any; and
(2) destroy all copies of the MERANT Products in whatever for-zn they exist,
including the deletion of all copies from any electronic memories or remove the
MERANT Products from all Distributor Applications not yet shipped.
Notwithstanding the foregoing, with respect to any Distributor Applications that
are in finished product form and that have been sold (with no return option) to
Distributor's dealers or distributors prior to the termination date, Distributor
may grant the approved license to use the MERANT Products to end-users of these
specific copies of the Distributor Applications; provided, however, that this
permission does not allow Distributor, after the date of termination, to fill
orders of dealers or distributors that have not been filled on the date of
termination or that are received after that date, or to grant additional
licenses to users who already have a license for the Distributor Application on
the date of termination. All licenses for Distributor Applications previously
given to end-users by or through Distributor, provided they were in accordance
with the terms of this Agreement, shall continue in effect after termination or
expiration of the Agreement. Distributor may not license any inventory of
Distributor Applications containing the MERANT Products after the termination
date without prior written consent of MERANT.
10.5 Survival of Certain Provisions. All requirements of
------------------------------
inderimification, payment, and terms related to use or protection of
intellectual property or confidential information, and provisions related to
venue and choice of laws, shall survive termination or expiration of this
Agreement.
11. No Agency, Representation or Joint Venture. It is expressly
------------------------------------------
understood that Distributor and MERANT are business entities independent of one
another. Neither the making of this Agreement nor the performance of any part of
its terms shall be construed to constitute Distributor as an agent or
representative of MERANT for any purpose. Nor shall this Agreement be deemed to
establish a joint venture or partnership.
7
<PAGE>
12. Publicity and Press Releases. Upon execution of this Agreement,
----------------------------
Distributor grants MERANT the right to announce its relationship with
Distributor, including the announcement of any joint marketing product release,
upgrade, or modification thereof. MERANT agrees to place Distributor's copyright
notice on any and all press releases, publicity or marketing collateral that is
used in conjunction with an announcement of an MERANT Product and a Distributor
Application.
13. Force Maieure. Failure of MERANT or Distributor to perform
-------------
obligations hereunder or a portion thereof if occasioned in whole or in
substantial part by any act of God, fire, explosion, perils of sea, flood, war,
or action of any governmental authority, shall excuse the non-performing party
from performing for the duration of such excusing event.
14. Assignment. The rights granted herein to Distributor are personal,
----------
nontransferable, and non-assignable in whole or in part without prior written
consent of MERANT, which consent shall not be unreasonably withheld. Assignment
shall be deemed to occur upon transfer of more than fifty percent of the equity
in Distributor within a period of twelve months. Notwithstanding the above,
Distributor may assign this Agreement in whole to any subsidiary, division, or
parent company of Distributor, provided MERANT is so notified in writing prior
to such transfer.
15. Headings. The headings contained in this Agreement are for
--------
convenience only and should not be construed to limit or expand any terms
otherwise provided.
16. Notices. Any notice made in relation to this Agreement shall be sent
-------
to the addresses set forth above, or such other address as the intended
recipient has previously designated by written notice. The notice shall be sent
by courier or overnight service, which requires signature for receipt, or by
facsimile the receipt of which is confirmed in writing.
17. Legal Review. It is acknowledged that this Agreement was initially
------------
prepared by MERANT. Both parties, however, have had an opportunity for legal
review of all terms. The parties therefore agree that, in interpreting any
issues which may- arise, any rules of construction related to who prepared the
Agreement shall be inapplicable, each party having contributed or having had the
opportunity to clarify any issue.
18. Partial Illegality. It is agreed that if any provision, or part of a
------------------
provision, of this Agreement is held to be invalid or unenforceable under any
applicable statute or rule of law, then the parties shall use their best efforts
to replace the invalid or unenforceable provision by a provision that, to the
extent permitted by applicable law, achieves the purposes intended under the
original provision and allows the parties the intended benefit of their bargain.
If it cannot be so reformed, it shall be omitted. The balance of this Agreement
shall remain valid and unchanged and in full force and effect.
19. Waiver of Compliance. Any failure by either party to enforce at any
--------------------
time any term or condition under this Agreement shall not be considered a waiver
of that party's right thereafter to enforce each and every term and condition of
this Agreement.
8
<PAGE>
20. Applicable Law. The parties agree that this Agreement shall be
--------------
governed and construed by the laws of the state of California, and that no
conflict-of-laws provision shall be invoked to permit application of the laws of
any other state or jurisdiction.
21. Amendments. All amendments to or changes in this Agreement must be
----------
memorialized in a writing executed by both parties.
22. Extension of Rights. MERANT may, in its discretion, extend any of its
-------------------
rights and obligations contained in this Agreement to MERANT plc (MERANT's
parent company) and/or any of MERANT plc's direct and indirect subsidiaries and
affiliates as though they were MERANT under this Agreement, but MERANT shall
continue to be liable in all respects for all obligations under the terms of
this Agreement for its own actions as well as those of MERANT plc and its direct
and indirect subsidiaries and affiliates.
23. Entire Agreement. This Agreement constitutes the entire agreement and
----------------
understanding between the parties on the subject matter herein, and supersedes
any and all prior agreements (written and oral) between the parties.
MERANT and Distributor agree that they have read this Agreement, understand
it, and intend to be bound by its terms and conditions. Tle parties or their
authorized representatives signify their agreement and acceptance by their
signatures below on duplicate originals.
AGREED AND ACCEPTED:
MERANT Inc. Desktalk Systems Inc.
By: /s/ LEO MILLSTEIN By: /s/ DAVID WOODALL
__________________________ _____________________________
Name: Leo Millstein Name: David Woodall
________________________ ___________________________
Title: VP, GENERAL COUNSEL Title: CEO
_______________________ __________________________
Date: July 19, 2000 Date: July 13, 2000
________________________ ___________________________
9
<PAGE>
SCHEDULE A
FEE SCHEDULE
1. The Termination Date (Paragraph 10.1) is 11/15/02.
2. For the purposes of this Schedule, the following provision shall apply in
lieu of Sections 3.1 - 3.5: Unlimited Count Distribution Royalty Fee. For
the period beginning July 15, 2000 and ending November 15, 2002, MERANT
grants Distributor a license to distribute an unlimited number of copies of
MERANT Products listed in Schedule B that are embedded within the
Distributor Applications defined in this Schedule A (the "Unlimited Count
License"). In return Distributor shall pay MERANT an unlimited count
distribution royalty equal to ***** (the "Unlimited Count Distribution
Royalty Fee"). This Unlimited Count Distribution Royalty Fee is due and
payable as follows: ***** on or before August 15, 2000 and ***** on
or before November 15, 2001.
No royalty reports shall be due for those MERANT Products licensed pursuant
to the Unlimited Count License.
3 The Minimum Annual Support Fee is included as part of the Unlimited Count
Distribution Royalty Fee.
4. The software products developed by Distributor, or for which Distributor
otherwise has distribution rights, that are products with which MERANT
Products may be combined for creation of a Distributor Application are as
follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Application Name Platforms Royalty Rate Per Royalty Rate Per SupportNet per
Period 1 Period 2 Period
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trend(TM) NT & Unix ***** ***** included
---------------------------------------------------------------------------------------------
</TABLE>
6. Notwithstanding the terms and conditions in Section 1.2 of the Agreement,
the Distributor Applications may include "runtime" product versions;
provided, however, that any reports/programs developed with such "runtime"
product versions may not contain the MERANT Products.
7. The terms of this Agreement will be held open for signing until July 15,
2000.
Please initial acceptance:
/s/ DW
__________________________
__________________________
10
__________
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
SCHEDULE B
MERANT PRODUCTS
MERANT Products shall include the English language version of the products
listed below. Distributor acknowledges that any other MERANT products, are not
included in the definition of MERANT Products and may not be distributed without
a separate agreement or written modification to this Agreement.
Workstation / Client based licenses of:
DataDirect SequeLink* OEM JDBC client (both the strong encryption and no
encryption version)
DataDirect SequeLink* Server for all currently available platforms and
databases excluding NWS (both the strong encryption and no encryption
version)
Server based licenses of:
DataDirect SequeLink* OEM JDBC client (both the strong encryption and no
encryption version)
DataDirect SequeLink* Server for all currently available platforms and
databases excluding MVS (both the strong encryption and no encryption
version)
*These products have two versions: one with security features that contain
strong (greater, than 64-bit key) encryption and one with security features
which contain no encryption. The versions with encryption are subject to the
authority of the U.S. Bureau of Export Administration ("BXA") and may only be
distributed outside the United States pursuant to a license from the BXA. Unless
otherwise noted on this Schedule B, the products licensed under this Agreement
are the versions with security features that contain no encryption, which may be
distributed outside of the United States without a license. MERANT agrees that
it shall provide reasonable assistance to Distributor to facilitate the
application for any such license to distribute the MERANT Products outside of
the United States.
______________________________________________________________________________
Unless otherwise specified on this Schedule B, the MERANT Products licensed
under this Agreement are limited to English language versions of the MERANT
Products (i.e., Documentation, help files, and error messages are in English
language form only).
______________________________________________________________________________
MERIT Products outside of the United States
Please initial acceptance:
/s/ DW
__________________________
11
<PAGE>
SCHEDULE C
SUPPORT
"SupportNet" support shall include toll free Answerline support between 8:30 AM
and 8:00 PM EST Mon-Fri, 24 hour emergency beeper service, World Wide Web forum
support, e-Mail as well as maintenance releases and new releases as they become
generally available. These services are provided pursuant to payment of the
Support Fees defined herein. Support services will be provided in MERANT's North
American support organization only.
12
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Amendment Number 1
to Distributor License Agreement
Effective July 15, 2000
By and Between
MERANT Inc.
And
Desktalk Systems, Inc.
This Amendment I ("Amendment") dated July 15, 2000 ("Effective Date") by and
between MERANT Inc. ("MERANT") and Desktalk Systems, Inc. ("Distributor"),
hereby amends the above referenced Distributor License Agreement (the
"Agreement"). All capitalized terms used herein and not otherwise defined shall
have the meaning given them in the Agreement.
1. The first sentence in Section 2.1 of the Agreement is hereby deleted in its
entirety and is replaced as follows:
"Subject to the terms and conditions of this Agreement, MERANT
authorizes Distributor to distribute and sublicense the MERANT
Products, directly or through Distributor's authorized channel
partners, but only to the extent those Products are incorporated
into or are part of permitted Distributor Applications."
2. Section 7.2 of the Agreement is hereby amended by adding the following text
after the first sentence in this Section:
"Distributor further agrees that it shall require its authorized
channel partners to use the Trademarks only to identify the MERANT
Products or to identify the authorized support and warranty
services described."
3. The first sentence in Section 8.1 of the Agreement is hereby deleted in its
entirety and is replaced as follows:
"MERANT warrants that the MERANT Products will conform in all material
respects to their written Documentation at the time of delivery to
Distributor and for a period of ninety days (90) thereafter."
4. Section 8.2 of the Agreement is hereby deleted in its entirety and is
replaced as follows:
"8.2 Defective Software. Should the MERANT Products fail to meet the
------------------
warranty set forth above, MERANT will, at its sole option, repair or
replace the MERANT Products such that they conform to their
Documentation. In the event such options are not commercially
practical, MERANT shall return any payments received under this
Agreement."
5. A New Section 8.4 is hereby added as follows:
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"8.4 Year 2000 MERANT warrants that the MERANT Products are Year 2000
compliant, which means that such MERANT Products will operate
correctly when the century changes from December 31, 1999 to January
1, 2000 and thereafter, and continue to be used in the full manner for
which it was licensed pursuant to this Agreement. The following
limitations and disclaimers shall apply, however: (a) MERANT's Year
2000 Statements are based upon commercially reasonable testing; (b)
due to the inherent fallibility of all software and the inherently
uneven quality of all data, MERANT does not warrant that MERANT's
software products are ertor-free or will produce accurate results, (c)
MERANT does not represent or warrant that any third party products
will be Year 2000 compliant, nor does MERANT represent or warrant the
interoperability of such third party products with any MERANT software
product; and (d) MERANT makes no representations or warranties with
respect to performance of MERANT's software products beyond the year
2035.
If the MERANT Products or any part thereof fail to conform to the
warranty specified above, the sole and exclusive remedy available to
Distributor shall, at MERANT's sole option and at no charge to
Distributor, be either (a) the repair or replacement of the MERANT
Products by MERANT within a reasonable period of time in order to make
the MERANT Products Year 2000 compliant as specified above or (b) the
upgrade of Distributor's version of the MERANT Products to a compliant
version of the MERANT Products."
6. A New Section 8.5 is hereby added as follows:
"8.5 MERANT hereby represents and war-rants to Distributor that MERANT
has not incorporated into the MERANT Products any viruses, won-ns,
bombs, traps, Trojan horses or other code designed to interrupt normal
processing ("Illicit Code") and has used commercially reasonable and
up-to-date methods to check for such Illicit Code prior to the
delivery of the MERANT Products to Distributor."
7. Section 9.3 of the Agreement is hereby deleted in its entirety and is
replaced as follows:
"9.3 Intellectual Property Right Infringement. MERANT shall, at its
----------------------------------------
cost, defend or, at its sole option, settle any claim or suit brought
against Distributor for infringement by an MERANT Product of any
copyright, patent, trademark or trade secret provided that Distributor
(a) notifies MERANT promptly in writing of any such claim or suit
within a reasonable time after Distributor receives notice of the
same; (b) gives MERANT full information and assistance in settling
and/or defending the suit; and (c) gives MERANT full authority and
control of the defense and/or settlement of any such action. MERANT
shall not be liable for any costs or expenses incurred by Distributor
(a) without MERANT's prior written authorization; (b) for any claim to
the extent that arises from the use of nonMERANT products in
Distributor Application; (c) for any claim based on
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Distributor's modification of the MERANT Products; or (d) from use of
other than the latest or second most recent available version of the
MERANT Products that is available to Distributor pursuant to this
Agreement. If the MERANT Products become subject to a claim of
infringement for which MERANT may become liable, MERANT may at its
option (a) obtain the right to continue using the MERANT Products; (b)
replace or modify the MERANT Products to make them non-infringing, so
long as the replacement or modification meets substantially similar
specifications; or (c) terminate this Agreement and refund to
Distributor the royalties paid under this Agreement. EXCEPT FOR THESE
REMEDIES, MERANT SHALL HAVE NO LIABILITY TO DISTRIBUTOR OR ITS
CUSTOMERS FOR COPYRIGHT, PATENT, TRADEMARK OR TRADE SECRET OR ANY
OTHER CLAIM ASSOCIATED WITH RIFRINGEMENT OF A PROPRIETARY RIGHT, NOR
ANY LIABILITY TO DISTRIBUTOR OR ANY SUBLICENSEE FOR DIRECT, INDIRECT
OR CONSEQUENTIAL DAMAGES FROM INFRINGEMENT."
8. Section 10.2 of the Agreement is hereby deleted in its entirety and is
replaced as follows:
"10.2 Termination for Cause. MERANT may terminate this Agreement if
---------------------
Distributor fails to make any payment, or provide any required
reports, when due, including but not limited to failure to timely pay
the Minimum Annual Guaranteed Royalty, and thereafter fails to make
payment in full, or provide any required reports, within fifteen (15)
days of notice by MERANT of its intention to terminate. In the event
of such Termination by MERANT for Cause, the unpaid portion of all
Minimum Annual Guaranteed Royalties specified in Schedule A shall be
immediately due and payable."
9. Section 10.4 of the Agreement is hereby amended by adding the following
text to the end of the Section:
"Notwithstanding the foregoing, Distributor may retain a copy of the
MERANT Products for the sole purpose of providing support to licensed
end-users of Distributor Applications."
10. The last sentence in Section 14 of the Agreement is hereby deleted in its
entirety and is replaced as follows:
"Notwithstanding the above, Distributor may assign this Agreement in
whole to any subsidiary, division, or parent company of Distributor,
provided MERANT is so notified in writing."
11. If there is a conflict between the Agreement and this Amendment, then this
Amendment shall govern. Otherwise, the Agreement shall remain in full force
and effect.
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AGREED AND ACCEPTED:
MERANT Inc. Desktalk Systems Inc.
By: /s/ LEO MILLSTEIN By: /s/ DAVID WOODALL
____________________________ ____________________________
Name: Leo Millstein Name: David Woodall
__________________________ __________________________
Title: VP, General Counsel Title: CEO
_________________________ _________________________
Date: July 19, 2000 Date: July 13, 2000
__________________________ __________________________
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