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Use this template/format as an OEM Agreement for Software.


OEM Agreement for Software Form

OEM Agreement for Software Form

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THIS OEM AGREEMENT (the “Agreement”) is entered into as of this ______ day of _________, 20_____ (the “Effective Date”), by and between _____________________, a _________________corporation having its principal place of business at ______________________________________ (together with any Affiliates, “First Party”) and ________________________, a ________________ corporation having its principal place of business at ______________________________________ (together with any Affiliates, “SECOND PARTY”).

RECITALS

WHEREAS, First Party is engaged in the design and manufacture of certain products, incorporating both hardware and software elements, which products are utilized in __________________________ ; and

WHEREAS, SECOND PARTY is engaged in the design and manufacture of certain products, incorporating both hardware and software elements, which products are utilized in _______________________________ ; and

WHEREAS, SECOND PARTY desires to port First Party’s software to SECOND PARTY’S platform, and to incorporate additional SECOND PARTY software and hardware elements to create an _____________________ and to distribute such product.

NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1. DEFINITIONS

1.1 “AFFILIATE” means an entity controlling, controlled by, or under common control with a party, such control being exercised through ownership or control, directly or indirectly, of 50% or more of the voting power of the shares.

1.2 “SECOND PARTY PRODUCT” means SECOND PARTY’S product that incorporates the Ported Software, and which provides all the functionality detailed in ATTACHMENT F (“Specifications for SECOND PARTY Product”), and no greater or lesser functionality than that detailed therein. In addition to the Ported Software, the SECOND PARTY Product includes the following components:

1.2.1 “SECOND PARTY SOFTWARE” means the software portion of the SECOND PARTY Product (other than the Ported Software) developed by SECOND PARTY. The SECOND PARTY Software has been partially developed as of the Effective Date. The SECOND PARTY Software will be integrated with First Party Software only through the First Party API (See Section 1.5.3).

1.2.2 “SECOND PARTY HARDWARE” means the hardware portion of the SECOND PARTY Product.

1.3 PACKAGES. The First Party Software comprises a single OEM software component that includes the following packaging options:

1.3.1 “APPLICATION DISCOVERY SOFTWARE PACKAGE” means the First Party Software for ___________________________________________ , as described in the ____________________ OEM Deliverables document referenced in ATTACHMENT A (“First Party Software”).

1.3.2 “RATE CONTROL SOFTWARE PACKAGE” means the First Party Software for ________________________________ , as described in the ____________________________ document referenced in ATTACHMENT A (“First Party Software”)

1.4 “FIRST PARTY DOCUMENTATION” means the training manuals and end user manuals supplied to SECOND PARTY by First Party relating to the First Party Software.

1.5 “FIRST PARTY SOFTWARE” means that software listed as “First Party Software” in ATTACHMENT A (“First Party Software”), and any Updates thereto provided under this Agreement. The First Party Software includes the following components:
____________________________________________________________ .

1.5.1 “FIRST PARTY SOFTWARE SOURCE” means the ____________________________. The First Party Software Source does not include any third party software or materials that First Party is unable to sublicense in source code form.

1.5.2 “FIRST PARTY SOFTWARE INFORMATION” means supporting information provided by First Party to enable a programmer reasonably skilled in the art to make use of the First Party Software Source.

1.5.3 “FIRST PARTY API” means an application programming interface developed by First Party to permit third party software (such as the SECOND PARTY Software) to _______________________________________. The First Party API is described in detail in ATTACHMENT B (“_________________”), (the “__________________________, DATED __________ , 20_____.

1.6 “PORTED SOFTWARE” means the software, in object code form only, resulting from SECOND PARTY’S _____________________________________________________.

1.7 “SOURCE CODE SITES” means those geographic locations at which SECOND PARTY may access, store and use the First Party Software Source and that are specified in ATTACHMENT H (“Source Code Sites”). The Source Code Sites may be changed upon mutual written agreement of the parties.

1.8 “UPDATES” means those additions, modifications, error corrections, bug fixes, enhancements, updates, upgrades, future versions and any derivative works made by First Party (or by a third party on First Party’s behalf) to the First Party Software (or any component thereof) and made generally commercially available by First Party. Updates is not meant to include other modules or plug-ins which have unique characteristics for specific markets and that are designed to be used in connection with the feature set (and no more than the feature set) of the First Party Software provided to SECOND PARTY in accordance with ATTACHMENT A (“First Party Software”).

2. LICENSE GRANTS

2.1 LIMITED SOURCE CODE LICENSE. Subject to the terms and conditions of this Agreement, First Party hereby grants to SECOND PARTY a non-exclusive, non-transferable license to use the First Party Software Source at a Source Code Site for the sole purpose of _______________________________________________________________.

2.2 DISTRIBUTION LICENSE. Subject to the terms and conditions of this Agreement, First Party hereby grants to SECOND PARTY a non-exclusive, non-transferable, royalty-bearing license to reproduce the Ported Software and sublicense and distribute (through multiple tiers of distribution) the Ported Software solely as integrated with the SECOND PARTY Product, by way of licenses to end user customers (“End User Licenses” and “End Users,” respectively),and through hardware OEMs (re-labeled Second Party Product). Notwithstanding the foregoing, SECOND PARTY will be permitted to distribute Updates to existing End Users and OEMs on an unbundled basis.

2.3 EXCLUSIONS.

2.3.1 THIRD PARTY TOOLS. No license is granted hereunder to any third party development tools or other software required to replicate the First Party Software development environment (“Third Party Tools”). A complete list of the Third Party Tools is set forth in ATTACHMENT A (“First Party Software).

2.3.2 OTHER EXCLUDED COMPONENTS. The First Party Software may contain certain third party software that First Party has no right to redistribute in source code form (“Excluded Components”). A complete list of Excluded Components is set forth in ATTACHMENT A (“First Party Software).

2.3.3 NO ADDITIONAL RIGHTS. SECOND PARTY specifically acknowledges that, other than as expressly set forth above, no rights to the First Party Software are granted to SECOND PARTY hereunder and there are no implied licenses under this Agreement. Without limiting the generality of the foregoing, SECOND PARTY acknowledges that it has no right to modify the First Party Software Source or First Party API except for the limiting porting activities licensed under PARAGRAPH 2.1 (“Limited Source Code License”), and that any modification will be deemed a material breach of the Agreement. In addition to any remedies available to First Party for such breach, First Party will have no obligations to support the modified First Party Software or the resulting SECOND PARTY Product, and SECOND PARTY shall assign all right, title and interest in such unpermitted modifications to First Party. Except as expressly set forth above, SECOND PARTY will have no right to sublicense or transfer the rights granted herein to any third party.

2.4 DOCUMENTATION. Subject to the terms and conditions hereof, First Party grants to SECOND PARTY a royalty-free non-exclusive, non-transferable, sub-licensable license to localize, reproduce, distribute, reformat, modify and sublicense the First Party Documentation so as to apply to the SECOND PARTY Product. SECOND PARTY recognizes that its ownership of any derivative works of the First Party Documentation is subject to First Party’s underlying ownership of the First Party Documentation. SECOND PARTY agrees that it will not modify or delete any copyright notices or other proprietary notices included in the First Party Documentation without written approval of First Party. First Party will have the right to inspect the modified First Party Documentation to ensure that it meets First Party’s quality standards.

2.5 TRADEMARK LICENSE. Subject to compliance with the terms of this Agreement (including, but not limited to, PARAGRAPH 11 (“Trademarks”)) and ATTACHMENT D (“First Party Trademarks”), First Party hereby grants to SECOND PARTY a non-exclusive, non-transferable, limited license to use the trademarks set forth in ATTACHMENT D (“First Party Trademarks”) in connection with the marketing and distribution of the SECOND PARTY Products.

2.6 END USER LICENSE. SECOND PARTY will take all steps necessary to protect First Party’s proprietary rights in the First Party Software and to ensure that each SECOND PARTY Product will be accompanied by a localized copy of SECOND PARTY’S standard software license agreement applicable to such software which will include terms and conditions no less protective of First Party’s interests as those set forth in ATTACHMENT C (“First Party End User License Agreement”).

2.7 OWNERSHIP OF PORTED SOFTWARE. First Party will own all right, title and interest in all Ported Software created by SECOND PARTY. SECOND PARTY hereby assigns to First Party the entire right, title and interest in the Ported Software. SECOND PARTY will deliver all such Ported Software to First Party in source and object code form as such Ported Software is created, or upon First Party’s request, but in no event less frequently than once per calendar quarter. SECOND PARTY agrees to render reasonable cooperation to First Party in the procurement and maintenance of First Party’s rights in the Ported Software and to sign all papers which First Party may deem necessary and desirable for vesting First Party with such rights throughout the world, including litigation of applicable patents, copyrights and other proceedings, and execution of an assignment of copyright.

3. DELIVERY

3.1 INITIAL DELIVERY; ACCEPTANCE. Upon receipt of the Initial Delivery Fee, First Party will deliver the First Party Software to SECOND PARTY, including the First Party Software Source, the First Party Software Information, the First Party API, and the First Party Documentation, all in electronic form, and where suitable, also in paper form. The First Party Software will be deemed accepted upon delivery.

3.2 MAINTENANCE DELIVERIES. So long as SECOND PARTY is current on maintenance fees and First Party is still offering maintenance releases for the First Party Software, First Party will deliver applicable Updates to the First Party Software as such Updates are made generally available to First Party’s customers. Such deliveries will be deemed accepted upon delivery.

3.3 INCORPORATING UPDATES. SECOND PARTY will have the option to incorporate such Updates into the SECOND PARTY Product, provided that if SECOND PARTY fails to successfully incorporate such Updates within one (1) year such Update is made generally available, (a) the trademark license set forth in PARAGRAPH 2.5 (“Trademark License”) will terminate and SECOND PARTY will cease to use the Trademarks in connection with such SECOND PARTY Product, and (b) First Party will bear no obligation to continue to provide technical support (but will continue to provide Updates during the Maintenance Period) for such out-of-date SECOND PARTY Product.

4. SUPPORT AND MAINTENANCE

4.1 DEMONSTRATION. First Party will provide a “walk-through” demonstration (not to exceed one day) for the First Party Software, and periodically for each Update it delivers.

4.2 MODIFICATIONS TO FIRST PARTY SOFTWARE. In the course of developing the SECOND PARTY Product, SECOND PARTY may from time to time request that First Party make changes to the First Party Software in order to provide additional functionality. During the period in which SECOND PARTY is paying First Party for maintenance and is in compliance with its maintenance obligations (a “Maintenance Period”), First Party agrees to consider such requested changes promptly, and if it finds, in its sole discretion, such requested changes to be reasonable to the future development of the First Party Software, to implement such changes promptly as an Update, all without additional charge to SECOND PARTY.

4.3 END USER SUPPORT. SECOND PARTY will be solely responsible for providing all support and maintenance for End Users of the SECOND PARTY Product. SECOND PARTY will provide its End Users with reasonable documentation, warranty service, and e-mail or telephone support for the use of the SECOND PARTY Product consistent with good industry practice and the terms of this Agreement.

4.4 TECHNICAL SUPPORT. During the Maintenance Period, First Party will provide SECOND PARTY (but not SECOND PARTY’S End Users, distributors or resellers) with development support (including access to technical, engineering and management staff) in the form of telephone and e-mail responses to questions that SECOND PARTY may have with respect to the current version of the First Party Software and any previous versions released by First Party within the past twelve (12) months. First Party will provide support solely for questions related to the unmodified First Party Software. In the event that such technical support requests become unduly burdensome, the parties shall confer to discuss whether the number of hours per month which First Party spends providing support should be reduced, or if the fee for such support should be increased. In this scenario support will not be withheld during such discussions.

4.5 COMPATIBILITY. Updates provided hereunder for functionality that has previously been implemented by SECOND PARTY will be “backwards compatible” (so that there will be no substantial loss of functionality) with the previously released version and any versions released in the preceding twelve (12) months.

5. PAYMENTS

5.1 INITIAL DELIVERY. On the Effective Date, SECOND PARTY will pay First Party a fee (the “Initial Delivery Fee”) in SCHEDULE 1.

5.2 MAINTENANCE. For each calendar quarter for which SECOND PARTY desires to receive Updates and technical support, it will pay First Party a maintenance fee (the “Maintenance Fee”) as set forth on SCHEDULE 1 (“Fees”). Any failure by SECOND PARTY to pay a Maintenance Fee shall terminate those obligations by First Party to provide Updates under PARAGRAPH 3.2 (“Maintenance Deliveries”) and technical support under PARAGRAPHS 4.2 (“Modifications to First Party Software”) and 4.4 (“Technical Support”) but shall not otherwise terminate the licenses granted in PARAGRAPHS 2.1 (“Limited Source Code License”) and 2.2 (“Distribution License”) or other obligations of the Parties to this Agreement. Any failure by SECOND PARTY to pay a Maintenance Fee shall not relieve SECOND PARTY from any of its obligations under this Agreement including, without limitation, the payment of the Royalties under PARAGRAPH 5.3 (“Royalties”). Upon a failure by SECOND PARTY to successfully incorporate any Update as contemplated in PARAGRAPH 3.3 (“Incorporating Updates”) within one (1) year after it is made generally available by First Party, (a) SECOND PARTY will cease to use the Trademarks (as described in PARAGRAPH 3.3 (“Incorporating Updates”)), and (b) First Party shall have the option not to accept any further Maintenance Fees from SECOND PARTY and to terminate its obligations to provide Updates under PARAGRAPH 3.2 (“Maintenance Deliveries”) after the current Maintenance Period.

5.3 ROYALTIES. The royalties and other fees payable will be as set forth on SCHEDULE 1 (“Fees”).

5.4 TAXES. SECOND PARTY agrees to pay, and to indemnify and hold First Party harmless from, any sales, use, excise, import or export, value added or similar tax, not based on First Party’s net income, as well as the collection or withholding thereof, including penalties and interest, as well as any costs associated with the collection or withholding thereof, and all government permit or license fees and all customs, duty, tariff and similar fees levied upon the delivery of, the SECOND PARTY Product or related products, as well as any costs associated with the collection of any of the foregoing items in the event that it is deemed not to be a sale for resale under applicable state law by the relevant taxing authority. SECOND PARTY will be responsible for obtaining, at its expense, all required import licenses, permits or other governmental orders. If a resale certificate or other certificate, document or other evidence of exemption or payment or withholding of taxes by SECOND PARTY is required in order to exempt the distribution or licensing of the First Party Software, SECOND PARTY Product or other related product from any such liability or to enable First Party to claim any tax exemption, credit, or other benefit, SECOND PARTY will promptly furnish such certificate or document to First Party.

5.5 REPORTING. On a quarterly basis, SECOND PARTY will, within [*] following the end of such quarter, provide First Party a report including the following: (a) the number of units of the SECOND PARTY Product sold during that quarter; (b) geographic information related to the units of SECOND PARTY Product sold during that quarter, including, at least, by the country of the sale, by the State and postal (zip) code of the sale; (c) the royalty payments due during that quarter.

5.6 AUDIT. Each party will keep and maintain, for a period of three (3) years, proper records and books of account relating to licenses of the SECOND PARTY Product to customers and End Users. Upon reasonable notice to the other party, a party may have a reputable independent auditor inspect, at the requesting party’s expense, such records to verify the other party’s payments hereunder no more than once every six (6) months; however, if the audit reveals a discrepancy of more than 5%, then the recordkeeper will pay for the cost of the audit and the auditing party will have the right to conduct another audit within the six (6) month period.

5.7 MANNER OF PAYMENT. All payments due hereunder are in U.S. Dollars. SECOND PARTY shall include royalty payments with each report.

5.8 OVERDUE PAYMENTS. Overdue payments will be subject to a finance charge of the lesser of one and one-half percent (1 1/2%) per month or the highest interest rate allowed by law, for each month or fraction thereof that such amounts are past due.

6. DEVELOPMENT AND TESTING

6.1 SECOND PARTY DEVELOPMENT RESPONSIBILITIES. SECOND PARTY will be responsible for creating the Ported Software, the SECOND PARTY Product, and incorporating Updates in the SECOND PARTY Product in compliance with the terms of the Agreement. In addition, SECOND PARTY will be responsible for creating and delivering to First Party a list of errors found prior to First Party’s certification or testing of the SECOND PARTY Product pursuant to ATTACHMENT G (“Test Certification Procedures”).

6.2 TESTING AND CERTIFICATION OF SECOND PARTY PRODUCTS. SECOND PARTY will test each version of the SECOND PARTY Product. Once yearly, First Party will certify SECOND PARTY’S tests results or perform independent testing in accordance with the procedures in ATTACHMENT G (“Test Certification Procedures”). If the SECOND PARTY Product passes First Party’s Test Certification Procedures, then SECOND PARTY shall be entitled to market and distribute the SECOND PARTY Product under the Trademarks under the terms of this Agreement. SECOND PARTY will provide First Party with reasonable access to the SECOND PARTY Software and Ported Software, including, but not limited to, exposing command line interfaces for the SECOND PARTY Software in order to permit First Party to perform regression testing and to confirm that no unpermitted modifications have been made to the First Party Software. Such regression testing will not be designed to permit First Party to analyze the SECOND PARTY Software (its source or object code) to determine the manner and methods utilized in supporting its functionality without the prior written permission of SECOND PARTY.

6.3 LOANED EQUIPMENT. SECOND PARTY will loan First Party all necessary equipment for such certification testing. All equipment loaned by SECOND PARTY to First Party will remain the property of SECOND PARTY, will be fully insured by First Party, and will be returned to SECOND PARTY at its request after termination of First Party’s testing activities hereunder. SECOND PARTY will pay all shipping and other costs (including, without limitation, custom fees and duties) resulting from delivery of such loaned equipment to First Party. Any loaned equipment will be returned to SECOND PARTY by First Party, shipping, insurance and any other applicable costs prepaid by SECOND PARTY. While in the possession of First Party, the loaned equipment will be maintained by SECOND PARTY in good working order.

7. MARKETING

7.1 PROMOTIONAL EFFORTS. SECOND PARTY will use its reasonable efforts to market and distribute the SECOND PARTY Product to End Users. SECOND PARTY may advertise the SECOND PARTY Product in advertising media of SECOND PARTY’S choice. SECOND PARTY will use the Trademarks in accordance with the terms of this Agreement in conducting such marketing efforts.

7.2 PRESS RELEASE. The parties will create a mutually agreeable press release to announce the execution of this Agreement. Neither party will disclose any terms of the Agreement, except pursuant to a mutually agreeable press release or as otherwise required by law.

8. WARRANTY

8.1 FIRST PARTY WARRANTY. First Party warrants for a period of ninety (90) days from delivery (the “Warranty Period”) that the unmodified First Party Software Source will compile in the development environment specified by First Party to yield the corresponding object code version of such source code (excluding any Excluded Components). First Party also warrants for the Warranty Period that the unmodified First Party Software Source when used in accordance with the First Party Documentation shall share substantially equivalent functionality (excluding functionality corresponding to the excluded components) with First Party’s _____________ software delivered to SECOND PARTY for testing on or about _____________, 20____. If SECOND PARTY reports to First Party a failure of the First Party Software Source to conform to the foregoing warranties during the Warranty Period, and provides such detail as First Party may require to permit First Party to reproduce such failure, First Party, at its expense, shall use reasonable commercial efforts to modify or replace the First Party Software Source to correct such failure. SECOND PARTY acknowledges that the First Party Software Source delivered by First Party to SECOND PARTY will require adaptation by SECOND PARTY or First Party for compatibility with SECOND PARTY platforms and configurations, which platforms and configurations will generally be different from the development environment and platform used by First Party. SECOND PARTY acknowledges that the First Party Software is of such complexity that it may have inherent defects, and agrees that First Party makes no other warranty, either express or implied, as to any matter whatsoever. The foregoing states First Party’s sole and exclusive warranty to SECOND PARTY concerning the First Party Software Source and SECOND PARTY’S sole and exclusive remedy for breach of warranty.

8.2 DISCLAIMER. EXCEPT AS SET FORTH IN PARAGRAPH 8.1 (“FIRST PARTY WARRANTY”), THE FIRST PARTY SOFTWARE IS PROVIDED TO SECOND PARTY “AS-IS” AND WITHOUT ANY WARRANTY OF ANY KIND, EXPRESS, IMPLIED, OR STATUTORY. FIRST PARTY EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY.

9. INDEMNITY

9.1 BY FIRST PARTY. First Party agrees to defend and otherwise hold SECOND PARTY harmless from any costs, damages and reasonable attorneys’ fees resulting from any claim that the uses permitted hereunder of the First Party Software infringe any U.S. patents or U.S. copyrights, or misappropriate the trade secrets of any third party, provided that SECOND PARTY gives First Party prompt written notice of any such claim, tenders to First Party the defense or settlement of such a claim at First Party’s expense, and cooperates with First Party, at First Party’s expense, in defending or settling such claim. If First Party receives notice of an alleged infringement or if SECOND PARTY’S use of the First Party Software is prevented by permanent injunction, First Party may, at its sole option and expense, procure for SECOND PARTY the right to continued use of the First Party Software, modify the First Party Software such that it is no longer infringing, or replace the First Party Software with software of similar functional capability (in either of the latter two options, the revised or replacement software must be backwards compatible as that term is defined in PARAGRAPH 4.5 (“Compatibility”)), or terminate the license and return to SECOND PARTY the Initial Delivery Fee. FIRST PARTY’S OBLIGATIONS UNDER THIS SECTION WILL BE SECOND PARTY’S SOLE AND EXCLUSIVE REMEDY FOR ANY ALLEGED INFRINGEMENT OF MISAPPROPRIATION OF ANY PROPRIETARY RIGHT. FIRST PARTY WILL HAVE NO LIABILITY TO SECOND PARTY IF ANY ALLEGED INFRINGEMENT OR CLAIM THEREOF IS BASED UPON THE USE OF THE FIRST PARTY SOFTWARE IN CONNECTION OR IN COMBINATION WITH EQUIPMENT, DEVICES, OR SOFTWARE NOT DELIVERED BY FIRST PARTY (IF SUCH INFRINGEMENT OR CLAIM COULD HAVE BEEN AVOIDED BY THE USE OF THE UNMODIFIED FIRST PARTY SOFTWARE WITH OTHER EQUIPMENT, DEVICES OR SOFTWARE), OR THE USE OF THE FIRST PARTY SOFTWARE OTHER THAN AS PERMITTED UNDER THIS AGREEMENT OR IN A MANNER FOR WHICH IT WAS NOT INTENDED, OR USE OF OTHER THAN THE MOST CURRENT RELEASE OF THE FIRST PARTY SOFTWARE (IF SUCH CLAIM WOULD HAVE BEEN PREVENTED BY THE USE OF SUCH RELEASE).

9.1.1 UPDATES. IF FIRST PARTY GIVES SECOND PARTY NOTICE THAT A SPECIFIC UPDATE IS REQUIRED IN ORDER TO AVOID INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY, AND IF WITHIN SIXTY (60) DAYS SECOND PARTY FAILS TO USE SUCH UPDATE AND TO DISTRIBUTE SUCH UPDATE TO ITS END USERS, THEN FIRST PARTY WILL HAVE NO LIABILITY TO SECOND PARTY UNDER PARAGRAPH 9.1 FOR INFRINGING SUCH INTELLECTUAL PROPERTY RIGHTS IF THERE WOULD HAVE BEEN NO INFRINGEMENT HAD SECOND PARTY ADOPTED SUCH UPDATE.

9.2 BY SECOND PARTY. SECOND PARTY agrees to defend and otherwise hold First Party harmless from any costs, damages and reasonable attorneys’ fees resulting from any claim that the uses permitted hereunder of the SECOND PARTY Product infringe any U.S. patents or U.S. copyrights, or misappropriate the trade secrets of any third party, provided that First Party gives SECOND PARTY prompt written notice of any such claim, tenders to SECOND PARTY the defense or settlement of such a claim at SECOND PARTY’S expense, and cooperates with SECOND PARTY, at SECOND PARTY’S expense, in defending or settling such claim. SECOND PARTY’S OBLIGATIONS UNDER THIS SECTION WILL BE FIRST PARTY’S SOLE AND EXCLUSIVE REMEDY FOR ANY ALLEGED INFRINGEMENT OF ANY PROPRIETARY RIGHT.

10. PROTECTION OF PROPRIETARY RIGHTS

10.1 FIRST PARTY OWNERSHIP. First Party and its suppliers are the sole and exclusive owners of all rights, title and interest, including all Trademarks, copyrights, patents, trade names, trade secrets, and other intellectual property rights to the First Party Software, and in any modifications made to the First Party Software at SECOND PARTY’S request or suggestion under PARAGRAPH 4.2 (“Modifications to First Party Software”). Except for the rights expressly enumerated herein, SECOND PARTY is not granted any rights to patents, copyrights, trade secrets, trade names, trademarks (whether or not registered), or any other rights, franchises or licenses with respect to the First Party Software. SECOND PARTY agrees to protect the First Party Software in accordance with PARAGRAPH 10 (“Protection of Proprietary Rights”) and ATTACHMENT E (“Secure Procedures”). Failure to protect the proprietary rights of First Party and its suppliers in the First Party Software, as required by this Agreement, will be considered a material breach of this Agreement.

10.2 SECOND PARTY OWNERSHIP. First Party acknowledges SECOND PARTY’S statement that SECOND PARTY and its suppliers are the sole and exclusive owners of all rights, title and interest, including all trademarks, copyrights, patents, trade names, trade secrets, mask works, and other intellectual property rights to the SECOND PARTY Product (excluding the Ported Software). Except for the rights expressly enumerated herein (e.g., the right to perform certain regression testing), First Party is not granted any rights to patents, copyrights, trade secrets, mask works, trade names, trademarks (whether or not registered), or any other rights, franchises or licenses with respect to the SECOND PARTY Product. First Party agrees to protect the SECOND PARTY Product in accordance with PARAGRAPH 12 (“Confidentiality”).

10.3 COOPERATION. The parties agree to cooperate and execute documents reasonably requested to confirm such ownership or to obtain protection under any intellectual property law.

10.4 PROPRIETARY NOTICES. SECOND PARTY agrees that as a condition of its rights hereunder, each copy of the Ported Software will contain the same proprietary notices which appear on or in such First Party Software provided by First Party to SECOND PARTY. More specifically, SECOND PARTY agrees that a valid First Party copyright notice will appear on the media or will be displayed on any screen visible to a user when the SECOND PARTY Product is first initialized in the following format or such other format as First Party specifies by written notice to SECOND PARTY: the name of the program, the word “Copyright” and the “(c)” symbol, the year 20___ (the date of first creation of the First Party Software), followed by a hyphen and the year of the most recent version of the Ported Software, and the name of the copyright owner and the words “All Rights Reserved.” Presence of a copyright notice does not constitute an acknowledgment of publication. SECOND PARTY will ensure that the trademark notices are displayed in the SECOND PARTY Product as set forth in PARAGRAPH 11 (“Trademarks”).

10.5 UNAUTHORIZED DISTRIBUTION OR COPYING. SECOND PARTY agrees that (except as expressly permitted by this Agreement): (a) distributing, copying, duplicating or otherwise reproducing all or any part of the First Party Software, (b) distributing or using copies of all or any portion of the First Party Software other than as embedded in a royalty-bearing SECOND PARTY Product, or (c) failing to ensure that each End User receives a license agreement as required by PARAGRAPH 2.6 (“End User License”) will constitute a material breach of this Agreement.

10.6 GOVERNMENT AGREEMENTS. SECOND PARTY will take all reasonable steps in making proposals to and agreements with governments that involve the SECOND PARTY Product and related documentation to ensure that First Party’s proprietary rights receive the maximum protection available from such governments for commercial computer software and related documentation developed at private expense.

10.7 CERTIFICATION. At First Party’s request, SECOND PARTY will provide First Party with written certification by an officer of SECOND PARTY of SECOND PARTY’S compliance with its obligations under this PARAGRAPH 10 (“Protection of Proprietary Rights”) and ATTACHMENT E (“Secure Procedures”).

10.8 FIRST PARTY TRADE SECRETS. First Party represents that the First Party Software and those techniques, algorithms, and processes contained in the First Party Software which have been developed, acquired or licensed by First Party, or any modification or extraction thereof, constitute trade secrets of First Party and/or its suppliers, and SECOND PARTY agrees they will be used by SECOND PARTY only in accordance with the terms of this Agreement. SECOND PARTY will take all measures reasonably required to protect the proprietary rights of First Party and its suppliers in the First Party Software Information.

10.9 ACCESS. In consideration of the licenses and access to proprietary information and technology of First Party granted under this Agreement, SECOND PARTY hereby agrees: (a) not to use the First Party Software to develop, manufacture or distribute GOODS OUTSIDE OF THOSE DEFINED IN ATTACHMENT F (SPECIFICATIONS FOR SECOND PARTY PRODUCT); and (b) to obtain the First Party Software only from First Party. Subject to the terms of restrictions on use of proprietary information (including, but not limited to this PARAGRAPH 10 (“Protection of Proprietary Rights”), ATTACHMENT D (“First Party Trademarks”), and ATTACHMENT E (“Secure Procedures”) provided under this Agreement, this Agreement does not preclude SECOND PARTY from independently developing similar technologies or products, where SECOND PARTY can demonstrate by competent proof that such independent development has been created without reference to the First Party Software Source, First Party Software Information, or First Party Documentation.

11. TRADEMARKS

11.1 PROPER USE. Unless SECOND PARTY or First Party opt to terminate the following requirement of trademark usage and the trademark license of PARAGRAPH 2.5 (“Trademark License”) under the conditions set out below, SECOND PARTY will make use of the First Party Trademarks in accordance with the guidelines and requirements set forth in ATTACHMENT D (“First Party Trademarks”) and the standard guidelines and usage requirements as promulgated by First Party from time to time regarding the Trademarks. If First Party promulgates any changes to the standard guidelines and usage requirements, then SECOND PARTY: (a) shall have six (6) months to continue operating under the old guidelines; (b) shall have six (6) months to continue operating under the old guidelines for existing inventory. Either First Party or SECOND PARTY shall have the right to terminate the trademark usage requirement of this PARAGRAPH 11.1 (“Proper Use”) if SECOND PARTY does not pay an annual Maintenance Fee as set out in PARAGRAPH 5.2 (“Annual Maintenance”) when such Maintenance Fee is due. Furthermore, First Party shall, under the same instance, additionally be able to prohibit SECOND PARTY from using any First Party Trademark.

11.2 RIGHT OF REVIEW. In order to assure the First Party Trademarks are associated only with products and services of First Party’s high quality standards, First Party will have the right to inspect and review all such products and services. In the event that any use of the First Party Trademark does not comport with the quality standards set by First Party, First Party will advise SECOND PARTY, and SECOND PARTY will improve the quality within thirty (30) days so as to comport with First Party’s standards or cease use of the First Party Trademarks immediately.

11.3 NO COMPETITIVE EXPLOITATION OF TRADEMARKS. With respect to any Competitive Products which SECOND PARTY develops or markets, SECOND PARTY agrees that SECOND PARTY will not exploit its access to the First Party Software, its relationship with First Party, or the existence of the Ported Software to promote ATTACHMENT I “Competitive Products”. Furthermore, so long as SECOND PARTY is marketing the SECOND PARTY Product under the Trademarks, SECOND PARTY agrees to use best efforts to distinguish the SECOND PARTY Product from any ATTACHMENT I “Competitive Product” when displaying or referring to the SECOND PARTY Product in advertisements, catalogs, brochures and at trade shows by (a) identifying the SECOND PARTY Product prominently and exclusively with the Trademarks in such proximity that the viewer is unlikely to associate the SECOND PARTY Product with the Competitive Product, and (b) not associating the Trademarks with any Competitive Product in advertising, press releases, and other promotional and marketing materials.

12. CONFIDENTIALITY

12.1 RESTRICTION ON USE. Except as expressly permitted by this Agreement, each party (“Recipient”), its employees, and its contractors will not use in any way for its own account or the account of any third party, nor disclose to any third party, any Confidential Information revealed to it by the other party (“Disclosing Party”) without the Disclosing Party’s prior written consent; provided, however, that if any Confidential Information of the other party is required to be disclosed pursuant to any statute, regulation, order, subpoena or document discovery request, then the Recipient shall provide written notice thereof to the Disclosing Party as soon as practicable in order to afford the Disclosing Party an opportunity to seek a protective order (it being agreed that if the Disclosing Party is unable to obtain or does not seek a protective order and the Recipient is legally compelled to disclose such information, disclosure of such information may be made without liability).

12.2 DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this Agreement, “Confidential Information” consists of (a) any information designated by the Disclosing Party in writing as confidential, (b) the First Party Software Source and the First Party Software Information, (c) the source code and technical documentation for the SECOND PARTY Product, and (d) the terms and conditions of this Agreement. Information in oral form will be considered Confidential Information only to the extent it is (x) identified as confidential prior to disclosure and (y) summarized in writing and transmitted to the Recipient, identified as proprietary, within thirty (30) days after the oral disclosure.

12.3 EXCLUSIONS FROM DEFINITION OF CONFIDENTIAL INFORMATION. Confidential Information will not include, and this PARAGRAPH 12 (“Confidentiality”) will not apply to information that (a) was known to the Recipient prior to its receipt from the Disclosing Party; (b) is or becomes public knowledge without fault of Recipient; (c) is acquired by Recipient from a third party with the right to disclose same and without binder of secrecy; (d) is independently developed by a party without using the other party’s Confidential Information; or (e) has been approved for release by written authorization of the Disclosing Party.

12.4 STANDARD OF CARE. Each party will use the same standard of care that it applies to its own Confidential Information, but in no event less than reasonable care. Each party agrees to notify the other promptly in the event of any breach of confidentiality or security under conditions in which it would appear that any Confidential Information was prejudiced or exposed to loss, and will, upon request of the other, take all reasonable steps necessary to recover any compromised trade secrets disclosed to it or placed in its possession by virtue of this Agreement. Without limiting the generality of the foregoing, SECOND PARTY agrees to comply with the terms of ATTACHMENT E (“Secure Procedures”) regarding the handling of the First Party Software.

13. LIMITATION OF LIABILITY

EXCEPT IN THE CASE OF WILLFULNESS OR GROSS NEGLIGENCE, NEITHER FIRST PARTY NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, OR AGENTS WILL BE LIABLE TO SECOND PARTY OR TO ANY THIRD PARTY FOR ANY LOSS OF USE, INTERRUPTION OF BUSINESS, OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR REVENUES) OR SIMILAR DAMAGES, WHETHER BASED ON TORT (INCLUDING WITHOUT LIMITATION, NEGLIGENCE OR STRICT LIABILITY), CONTRACT, OR OTHER LEGAL OR EQUITABLE GROUNDS, EVEN IF FIRST PARTY HAS BEEN ADVISED OR HAD REASON TO KNOW OF THE POSSIBILITY OF SUCH DAMAGES AND EVEN IN THE EVENT OF FAILURE OF EXCLUSIVE REMEDIES. In no event will First Party’s liability under this Agreement, including claims for contribution or indemnity, exceed the greater of US $100,000 (One Hundred Thousand Dollars) and all fees paid pursuant to this Agreement in the twelve (12) months preceding the claim giving rise to such liability.

14. TERM AND TERMINATION

14.1 TERM. The initial term of this Agreement will be five (5) years from the Effective Date; provided however, in the event First Party assigns this Agreement pursuant to PARAGRAPH 16.11 during such initial term, and First Party’s assignee fails to perform all or substantially all of its obligations pursuant to such assignment and such failure remains uncured for a period of thirty (30) days, SECOND PARTY may at its option renew this Agreement with First Party for a term of three (3) years by giving written notice to First Party. Such option shall be exercisable, if at all, only within ninety (90) days of such failure; thereafter, this Agreement shall not be renewable except by written agreement of the parties.

14.2 TERMINATION FOR MATERIAL BREACH. Either party may terminate this Agreement if the other party has breached any material term of this Agreement and such breach remains uncured for forty five (45) days after written notice of such breach (which notice will, in reasonable detail, specify the nature of such breach).

14.3 BANKRUPTCY. A party may terminate this Agreement upon written notice to the other in the event the other (a) becomes insolvent or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; (b) files a petition under any foreign, state, or United States bankruptcy act, receivership statute, or the like, as they now exist, or as they may be amended; (c) any third party files against it such a petition, or an application for a receiver of either party is made by anyone and such petition or application is not resolved favorably within sixty (60) days; or (d) discontinues its business.

14.4 OBLIGATIONS ON CANCELLATION, TERMINATION OR EXPIRATION. Upon cancellation, termination, or expiration of this Agreement:

14.4.1 LICENSES TERMINATED. The licenses granted pursuant to PARAGRAPH 2 (“License Grants”) will terminate immediately; provided, however, that SECOND PARTY will be permitted to sell (for a period of ninety (90) days from termination) any finished inventory of SECOND PARTY Product then in stock.

14.4.2 SAFEGUARDING OF PROPRIETARY RIGHTS. SECOND PARTY will continue to be responsible for safeguarding the proprietary rights of First Party and First Party’s suppliers in accordance with this Agreement, including PARAGRAPHS 10 (“Protection of Proprietary Rights”), 11 (“Trademarks”), and ATTACHMENT E (“Secure Procedures”) after such cancellation, termination, or expiration.

14.4.3 RETURN OR DESTRUCTION OF FIRST PARTY INFORMATION. Except for the limited exemption set forth in PARAGRAPH 14.4.1 (“Licenses Terminated”) permitting SECOND PARTY to sell out existing inventory, SECOND PARTY will immediately discontinue use and distribution of the First Party Software, and return or destroy all copies of the First Party Software and any First Party deliverables in its possession (including copies placed in any storage device under SECOND PARTY’S control); provided, however, that SECOND PARTY may keep a reasonable number of copies for supporting existing End Users. Upon First Party’s request, SECOND PARTY will warrant in writing to First Party compliance with this PARAGRAPH 14.4.3.

14.4.4 PAYMENT. The payment date of all monies due First Party will automatically be accelerated so that they will become due and payable on the effective date of termination, even if longer terms had been provided previously.

14.4.5 CONTINUED USE BY END USERS. End Users will be permitted the continued and uninterrupted use of the SECOND PARTY Products for the balance of the term of their End User agreements, as specified in such agreements, provided that and so long as the End Users are not in default of their End User agreements.

14.4.6 SURVIVAL. The following sections will survive the termination of expiration of this Agreement: PARAGRAPHS 1 (“Definitions”), 8 (“Warranty”), 9 (“Indemnity”), 10 (“Protection of Proprietary Rights”), 12 (“Confidentiality”), 13 (“Limitation of Liability”), 14 (“Term and Termination”), 15 (“No Patent License.”), and 16 (“General”).

15. NO PATENT LICENSE.

15.1 FIRST PARTY PATENTS. As used herein, “First Party Patent Right” means any right arising under any United States or foreign patent now owned by, or later issued or assigned to First Party, applicable to the First Party Software. First Party covenants that, to the extent that SECOND PARTY, SECOND PARTY’S sublicensees as authorized in this Agreement, SECOND PARTY’S End Users, and SECOND PARTY’S other direct and indirect customers of First Party Software (collectively “Customers”) exercise the rights expressly granted in PARAGRAPH 2 (“License Grants”) to SECOND PARTY, or which SECOND PARTY is authorized to grant to Customers herein, First Party will not (a) assert any First Party Patent Right against SECOND PARTY, (b) assert any First Party Patent Right against Customers, or (c) require any additional fee or royalty from SECOND PARTY or Customers based upon any First Party Patent Right. Except to the extent of such covenant not to assert any First Party Patent Right, nothing contained herein will be construed as conferring, by implication, estoppel, or otherwise, any license or right with respect to any First Party Patent Right.

15.2 SECOND PARTY PATENTS. As used herein, “SECOND PARTY Patent Right” means any patent right arising under any United States or foreign patent issued or assigned to SECOND PARTY and having a filing date after the inventor had access to the First Party Software in which (a) an inventor is (a) an employee of SECOND PARTY who has had access to the First Party Software or (b) an independent contractor who has had access to the First Party Software and has assigned patent rights in the claimed invention to SECOND PARTY and (b) the First Party Software contributed to the claimed invention. SECOND PARTY Patent Right will not include any patent applications filed three (3) years after termination or expiration of this Agreement. SECOND PARTY covenants that it will not (a) assert any SECOND PARTY Patent Right against First Party or against its sublicensees or customers for products of a similar nature to that distributed by SECOND PARTY, or (b) require any fee or royalty from First Party or such sublicensees or customers for the sale of such products based upon SECOND PARTY Patent Rights. Except to the extent expressed above, nothing contained herein will be construed as conferring, by implication, estoppel, or otherwise any license or right with respect to any SECOND PARTY Patent Right.

16. GENERAL

16.1 GOVERNING LAW. This Agreement will be governed in all respects by the laws of the United States of America and the State of __________ as such laws are applied to agreements entered into and to be performed entirely within ___________ between ______________ residents. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement.

16.2 GOVERNING LANGUAGE. This governing language and any interpretation or construction of this Agreement will be English.

16.3 FORUM. All disputes arising under this Agreement may be brought in the state and federal courts located in ____________, _______________, or ____________________, _________________ as permitted by law. SECOND PARTY and First Party consent to the personal jurisdiction of the above courts.

16.4 NOTICES. All notices or reports permitted or required under this Agreement will be in writing and will be delivered by personal delivery, telegram, telex, telecopier, facsimile transmission, or by certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, five (5) days after deposit in the mail, or upon acknowledgment of receipt of electronic transmission. Notices will be sent to the addresses set forth in the introductory paragraph of this Agreement and shall be sent to the attention of the Chief Financial Officer, or to such other address or person as may be designated in writing.

16.5 INJUNCTIVE RELIEF. It is understood and agreed that, notwithstanding any other provisions of this Agreement, breach of the provisions of this Agreement relating to the protection of intellectual property rights (including, but not limited to, PARAGRAPHS 2 (“License Grants”), 10 (“Protection of Proprietary Rights”), 11 (“Trademarks”), 12 (“Confidentiality”), ATTACHMENT D (“First Party Trademarks”), and ATTACHMENT E (“Secure Procedures”) may cause the other party irreparable damage for which recovery of money damages would be inadequate, and that a party will therefore be entitled to obtain timely injunctive relief (whether by arbitral or judicial authority) to protect its rights under this Agreement in addition to any and all remedies available at law.

16.6 NO AGENCY. Nothing contained herein will be construed as creating any agency, partnership, or other form of joint enterprise between the parties.

16.7 FORCE MAJEURE. Neither party will be liable hereunder by reason of any failure or delay in the performance of its obligations hereunder (except for the payment of money) on account of strikes, shortages, riots, insurrection, fires, flood, storm, explosions, acts of God, war, governmental action, labor conditions, earthquakes, material shortages or any other cause which is beyond the reasonable control of such party.

16.8 WAIVER. The failure of either party to require performance by the other party of any provision hereof will not affect the full right to require such performance at any time thereafter; nor will the waiver by either party of a breach of any provision hereof be taken or held to be a waiver of the provision itself.

16.9 SEVERABILITY. In the event that any provision of this Agreement will be unenforceable or invalid under any applicable law or be so held by applicable court decision, such unenforceability or invalidity will not render this Agreement unenforceable or invalid as a whole, and, in such event, such provision will be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law or applicable court decisions.

16.10 HEADINGS. The Paragraph headings appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or extent of such Paragraph or in any way affect this Agreement.

16.11 ASSIGNMENT. Neither this Agreement nor any rights or obligations of SECOND PARTY hereunder may be assigned or transferred by SECOND PARTY in whole or in part, whether by operation of law or otherwise, without the prior written approval of First Party which shall not unreasonably be withheld. For the purposes of this Paragraph, a change in ownership or sale of substantially all of the assets of SECOND PARTY or the business division of SECOND PARTY primarily involved in this Agreement shall not be considered an assignment or transfer of SECOND PARTY’S rights. First Party may exercise full transfer and assignment rights in any manner at First Party’s discretion and specifically may sell, pledge, or otherwise transfer it’s right to receive royalties under this Agreement.

16.12 EXPORT. SECOND PARTY acknowledges that the laws and regulations of the United States restrict the export and re-export of commodities and technical data of United States origin, including the First Party Software licensed hereunder. SECOND PARTY agrees that it will not export or re-export the First Party Software or SECOND PARTY Product in any form, without the appropriate United States and foreign governmental licenses, if legally required. SECOND PARTY agrees that its obligations pursuant to this Paragraph will survive and continue after any termination or expiration of rights under this Agreement.

16.13 FULL POWER. Each party warrants that it has full power to enter into and perform this Agreement, and the person signing this Agreement on each party’s behalf has been duly authorized and empowered to enter into this Agreement. Each party further acknowledges that it has read this Agreement, understands it and agrees to be bound by it.

16.14 ENTIRE AGREEMENT. This Agreement together with the Attachments and appendices completely and exclusively states the agreement of the parties regarding its subject matter. It supersedes, and its terms govern, all prior proposals, agreements, or other communications between the parties, oral or written, regarding such subject matter. This Agreement will not be modified except by a subsequently dated written amendment signed on behalf of all parties by their duly authorized representative and any provision of a purchase order purporting to supplement or vary the provisions hereof will be void.

16.15 COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which will be considered an original, but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this OEM Agreement to be executed by their duly authorized representatives as of the Effective Date.

_____________________ _____________________
First Party Second Party

By: __________________ By: ____________________
Signature Signature

_____________________ _____________________
Name Name

_____________________ _____________________
Title Title

ATTACHMENT A
FIRST PARTY SOFTWARE

FIRST PARTY SOFTWARE
The First Party Software components that Second Party has the right to use and distribute are defined with check marks in the following table, and by reference to ________________________________ which is fully incorporated into this agreement in Attachment B.
_____________________________________________________________
_____________________________________________________________

THIRD PARTY TOOLS
[List of development tools required to replicate the development environment, as well the vendor who offers such tools]
_____________________________________________________________
_____________________________________________________________

EXCLUDED COMPONENTS
_____________________________________________________________
_____________________________________________________________

ATTACHMENT B

____________________________________ GUIDE

THE DOCUMENT ENTITLED “_________________________________ “ IS FULLY INCORPORATED WITHIN THIS ATTACHMENT B AND IS DIRECTLY ATTACHED HERETO.

ATTACHMENT C

FIRST PARTY END USER LICENSE AGREEMENT

THE FOLLOWING IS A SAMPLE FORM OF THE FIRST PARTY END USER AGREEMENT AS OF THE EFFECTIVE DATE:

“THIS AGREEMENT IS PROOF OF YOUR RIGHT TO USE THE SOFTWARE CONTAINED IN THE FIRST PARTY ___________________ PRODUCT AND CONTAINS ADDITIONAL INFORMATION CONCERNING FIRST PARTY’S PRODUCT WARRANTY AND LIMITATIONS OF LIABILITY. PLEASE READ IT CAREFULLY.

THIS AGREEMENT IS BETWEEN YOU (EITHER AN INDIVIDUAL OR AN ENTITY) AND FIRST PARTY, INC. (“FIRST PARTY”). FIRST PARTY IS WILLING TO GRANT YOU THE FOLLOWING RIGHTS TO USE THE SOFTWARE INCORPORATED IN OR SUPPLIED WITH THE FIRST PARTY _______________________ PRODUCT AND ITS ACCOMPANYING DOCUMENTATION (COLLECTIVELY, THE “FIRST PARTY SOFTWARE”) ONLY IF YOU AGREE TO BE BOUND BY ALL OF THE TERMS OF THIS AGREEMENT. BY INSTALLING THE PRODUCT (THE “EQUIPMENT”) OR USING THE FIRST PARTY SOFTWARE, YOU AGREE TO BE BOUND BY ALL THE TERMS OF THIS AGREEMENT. IF YOU DO NOT AGREE TO BE BOUND BY ANY OF THE TERMS OF THIS AGREEMENT, FIRST PARTY IS UNWILLING TO GRANT YOU ANY RIGHTS TO USE THE FIRST PARTY SOFTWARE AND YOU MUST NOT USE THE FIRST PARTY SOFTWARE OR THE EQUIPMENT; INSTEAD YOU MUST PROMPTLY RETURN THE EQUIPMENT AND FIRST PARTY SOFTWARE FOR A FULL REFUND TO FIRST PARTY OR TO THE AUTHORIZED FIRST PARTY RESELLER THAT PROVIDED YOU WITH THE PRODUCT.

1. OWNERSHIP: The First Party Software is and shall remain a proprietary product of First Party. First Party and First Party’s suppliers shall retain ownership of all patents, copyrights, trademarks, trade names, trade secrets and other proprietary rights relating to or residing in the First Party Software and Equipment. Except for the license grant provided in Paragraph 2, you shall have no right, title or interest in or to the First Party Software. The First Party Software is licensed, not sold, to you for use only under the terms of this Agreement.

2. GRANT OF LICENSE: First Party grants you a non-transferable (except as set forth in this Paragraph) non-exclusive, restricted right to use the First Party Software as incorporated in or supplied with the Equipment and solely in connection with the operation of the Equipment for your own internal business purposes. You understand that First Party may update the First Party Software at any time and in doing so incurs no obligation to furnish such updates to you pursuant to this Agreement. You may transfer the license to use the First Party Software only in connection with a sale or transfer of the Equipment and as included with the Equipment and not on a standalone basis, provided the buyer or transferee agrees to be bound by the terms and conditions of this Agreement.

3. RESTRICTIONS: First Party reserves all rights in the First Party Software not expressly granted to you. Except as permitted in Paragraph 2, you may not use, copy, modify, create derivative works of, distribute, sell, assign, pledge, sublicense, lease, loan, rent, timeshare, deliver or otherwise transfer the First Party Software, nor permit any other party to do any of the foregoing. You may not remove from the First Party Software, or alter, any of the trademarks, trade names, logos, patent or copyright notices or markings, or add any other notices or markings to the First Party Software. To the extent permissible by applicable law, you may not derive or attempt to derive the source code of the First Party Software by any means, nor permit any other party to derive or attempt to derive such source code. To the extent permissible by applicable law, you may not reverse engineer, decompile, disassemble, or translate the First Party Software or any part thereof.

4. LIMITED WARRANTY: First Party does not warrant that the functions contained in the First Party Software and Equipment will meet your requirements or that the operation of your First Party Software or Equipment will be uninterrupted or error free. First Party warrants that for a period of ninety (90) days from your date of receipt of the Equipment and First Party Software, (a) the Equipment will be free of any defects in materials and workmanship and (b) the First Party Software will perform substantially in accordance with the accompanying documentation. This limited warranty is void if failure of the Equipment or First Party Software to conform with the warranty has resulted from improper installation, testing, misuse, neglect, accident, fire or other hazard, or any breach of this Agreement.

5. LIMITED REMEDIES: In the event of a breach of the foregoing limited warranty, you must return the Equipment and First Party Software to First Party or the First Party authorized reseller that provided you with the First Party Software, postage prepaid, before the expiration of the warranty period, with a copy of the invoice for the unit. First Party’s sole and exclusive obligation and your sole and exclusive remedy shall be, at First Party’s sole discretion, to either (a) repair the First Party Software or Equipment; (b) provide a replacement Equipment unit or a replacement copy of the First Party Software or (c) refund the amount you paid for the unit and terminate this Agreement. Any replacement copy of the First Party Software or replacement Equipment unit will be warranted for the remainder of the original warranty period or thirty (30) days, whichever is longer.

6. NO OTHER WARRANTIES: OTHER THAN THE FOREGOING LIMITED WARRANTY, FIRST PARTY HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY. SOME JURISDICTIONS DO NOT ALLOW THE DISCLAIMER OF IMPLIED WARRANTIES, SO THE ABOVE DISCLAIMER MAY NOT APPLY TO YOU, IN WHICH CASE THE DURATION OF ANY SUCH IMPLIED WARRANTIES IS LIMITED TO SIXTY (60) DAYS FROM THE DATE THE EQUIPMENT AND FIRST PARTY SOFTWARE ARE RECEIVED BY YOU. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS. YOU MAY HAVE OTHER LEGAL RIGHTS WHICH VARY FROM JURISDICTION TO JURISDICTION.

7. LIMITATION OF LIABILITY: FIRST PARTY’S AGGREGATE LIABILITY IN CONNECTION WITH THIS AGREEMENT, THE FIRST PARTY SOFTWARE AND THE EQUIPMENT, REGARDLESS OF THE FORM OF THE ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT OR OTHERWISE), SHALL NOT EXCEED THE AMOUNT PAID BY YOU TO FIRST PARTY. FIRST PARTY SHALL NOT BE LIABLE TO YOU FOR ANY INDIRECT, EXEMPLARY, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION LOSS OF DATA, EQUIPMENT DOWNTIME OR LOST PROFITS), EVEN IF FIRST PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME JURISDICTIONS DO NOT ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU. THE LIMITED WARRANTY, LIMITED REMEDIES AND LIMITED LIABILITY PROVISIONS CONTAINED IN THIS AGREEMENT ARE FUNDAMENTAL PARTS OF THE BASIS OF FIRST PARTY’S BARGAIN HEREUNDER, AND FIRST PARTY WOULD NOT BE ABLE TO PROVIDE THE _________________ TO YOU ABSENT SUCH LIMITATIONS.

9. GOVERNMENT END USERS: The First Party Software is comprised of “commercial computer software” and “commercial computer software documentation” as such terms are used in 48 C.F.R. 12.212 (__________ , 20_____) and is provided to the Government (a) for acquisition by or on behalf of civilian agencies, consistent with the policy set forth in 48 C.F.R. 12.212; or (b) for acquisition by or on behalf of units of the Department of Defense, consistent with the policies set forth in 48 C.F.R. 227-7202-1 ((__________ , 20_____)) and 227.7202-3 ((__________ , 20_____)).

10. EXPORT CONTROL: Since the First Party Software is subject to the export control laws of the United States, you may not export or re-export the First Party Software without the appropriate United States and foreign government licenses. You shall otherwise comply with all applicable export control laws and shall defend, indemnify and hold First Party and all First Party suppliers harmless from any claims arising out of your violation of such export control laws.

11. GENERAL: The United Nations Convention on Contracts for the International Sale of Goods is specifically disclaimed. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable for any reason, the remaining provisions hereof shall be unaffected and remain in full force and effect. This Agreement is the final, complete and exclusive agreement between the parties relating to the subject matter hereof, and supersedes all prior or contemporaneous understandings and agreements relating to such subject matter, whether oral or written. Should you have any questions regarding this Agreement, or if you desire to contact First Party for any reason, please write to: First Party, Inc., __________________, ______________, ________________, U.S.A.”

ATTACHMENT D
FIRST PARTY TRADEMARKS

First Party may adopt certain trademarks, trade names, marks, and logos (“Trademarks”) from time to time in its sole discretion. The following First Party Trademarks are licensed to SECOND PARTY pursuant to this Agreement:

[____________________ LOGO]

The above trademark is designated to be included on the back panel of the Second Party Box Level Product (Attachment F). Pending platform(s) design of the System Level Products (Attachment F), use of this trademark will be determined prior to shipping.

The Trademarks may be modified at any time by First Party.

USE OF FIRST PARTY TRADEMARKS

1. OWNERSHIP OF TRADEMARKS. SECOND PARTY acknowledges the ownership of the First Party Trademarks in First Party. SECOND PARTY agrees that it will do nothing inconsistent with such ownership and that all use of the Trademarks by SECOND PARTY will inure to the benefit of and be on behalf of First Party. SECOND PARTY acknowledges that Trademarks are valid under applicable law and that SECOND PARTY’S utilization of the Trademarks will not create any right, title or interest in or to such Trademarks. SECOND PARTY acknowledges First Party’s exclusive right to use of the Trademarks and agrees not to do anything contesting or impairing the trademark rights of the First Party. Any use of the Trademarks must identify First Party as the owner of such Trademarks.

2. QUALITY STANDARDS. First Party hereby appoints SECOND PARTY as its representative for the limited purpose of controlling the quality of the SECOND PARTY Products and any other products or services it supplies in connection with the use of the Trademarks. SECOND PARTY agrees that (a) the nature and quality of the SECOND PARTY Products and any other products or services it supplies in connection with use of the Trademarks will conform to the standards set by First Party, and (b) it will cooperate with First Party in facilitating First Party’s monitoring and control of the nature and quality of such products and services. Such assistance will include supplying First Party, upon its request, with specimens of its use of the Trademarks, including supplying samples of reprinted documentation, translations, product packaging and promotional materials that use the Trademarks in conjunction with SECOND PARTY’S marketing of SECOND PARTY Products. Upon reasonable notice to SECOND PARTY and at First Party’s sole expense, First Party may conduct an inspection of such specimens at facilities of its choosing to determine conformance with the standards.

SECOND PARTY will, at First Party’s request and expense, assist First Party in conducting such inspection and testing including, but not limited to, providing First Party with applicable hardware. If, at any time, First Party determines that SECOND PARTY has not met the First Party quality standards, First Party will so advise SECOND PARTY and, upon SECOND PARTY’S receipt of such notice by any means, SECOND PARTY will have thirty (30) days to improve the quality to the standard previously approved by First Party, or to cease the use of all Trademarks. SECOND PARTY will comply with all applicable laws and regulations pertaining to the use of the Trademarks and to the distribution and advertising of the SECOND PARTY Products; however, First Party shall obtain all appropriate government approvals pertaining to the use of the Trademarks.

3. INFRINGEMENT PROCEEDINGS. SECOND PARTY agrees to notify First Party of any unauthorized use of the Trademarks by others promptly as it comes to SECOND PARTY’S attention. First Party will have the sole right and discretion to bring infringement or unfair competition proceedings involving the Trademarks.

4. SECOND PARTY’S USE OF TRADEMARKS. Except as set forth otherwise in the Agreement, SECOND PARTY agrees that it will (a) prominently and permanently include the First Party Trademarks on all copies of the First Party Software and on any SECOND PARTY Products distributed to End Users (b) use the First Party Trademarks, including the _______________ logo, in any advertising or printed materials concerning the SECOND PARTY Products, (c) use all applicable Trademarks on all copies, advertisements, brochures, manuals, packaging and other appropriate uses made in the promotion, sale or use of the SECOND PARTY Products, and (d) ensure that the logo set forth above will appear prominently on the logon screen, splash screen, or other first display created by the First Party Software when End Users initialize the First Party Software.

5. TRADEMARK REGISTRATIONS. SECOND PARTY, at First Party’s request and expense, will (a) promptly provide First Party with any specimens, (b) execute all applications for trademark registrations, assignments or other applicable documents, and (c) perform any other act reasonably necessary for First Party to secure or maintain any and all trademark rights in any country in which SECOND PARTY is marketing the SECOND PARTY Products in association with a Trademark. SECOND PARTY’S responsibilities will include complying with the formalities of local law, including, but not limited to, executing any application for registration as a registered user, executing additional license agreements suitable for recording with the appropriate authorities or providing proof of use of the trademarks in any other applicable documents.

6. NO UNITARY OR COMPOSITE TRADEMARKS. SECOND PARTY agrees not to use any other trademark or service mark in close proximity to any of the First Party Trademarks or combine the marks so as to effectively create a unitary composite mark without the prior written approval of First Party.

ATTACHMENT E
SECURE PROCEDURES

1. AUTHORIZED EMPLOYEES AND CONTRACTORS. SECOND PARTY agrees that it will only disclose all or any portion of the First Party Software to authorized employees (“Authorized Employees”) and authorized contractors (“Authorized Contractors”) (subject to SECOND PARTY’S having obtained authorization for use of such contractors in accordance with PARAGRAPH 2 of this ATTACHMENT E, below) who (a) require access thereto for a purpose authorized by this Agreement, (b) have signed an employee or contractor agreement in which such employee or contractor agrees to protect third party confidential information and (c) in the case of disclosure of First Party Software Source or First Party Software Information (“Source Information”), have received a notice of confidentiality prior to access to such Source Information, and again upon any termination of such access, that contains, at a minimum provisions substantially in accordance with the following:

“Recipient has previously signed an agreement with SECOND PARTY pursuant to which Recipient has agreed to maintain the confidentiality of confidential information of SECOND PARTY and its suppliers (the “Confidential Information”) and to use the Confidential Information solely for SECOND PARTY’S benefit. The purpose of this notice is to apprise Recipient that Recipient will be receiving certain proprietary information of First Party, including internal source code, interface specifications and related documentation for the First Party product and related First Party information, all of which is of a confidential nature and which contains valuable trade secrets, know-how, and proprietary information of First Party (the “First Party Information”) and which constitutes Confidential Information under Recipient’s agreement with SECOND PARTY.

This is to inform Recipient that the First Party Information cannot be used for any purpose except for the specific purposes which SECOND PARTY or First Party authorize in writing and that Recipient is not authorized to disclose the First Party Information to any person at any time except to employees of First Party and to those Authorized Employees and Authorized Contractors which SECOND PARTY informs Recipient are authorized to receive such First Party Information.

All materials including, without limitation, programs, recorded information, documents, drawings, models, apparatus, sketches, designs, and lists furnished to Recipient by SECOND PARTY or First Party which are designated in writing to be the property of First Party remain the property of First Party and must be returned to First Party promptly at its request, together with any copies or modifications thereof.”

SECOND PARTY guarantees the compliance of all such Authorized Employees and Authorized Contractors with their obligations under such confidentiality agreements.

2. APPROVAL OF CONTRACTORS. Notwithstanding the provisions in this ATTACHMENT E permitting Authorized Contractors to have access to Source Information, SECOND PARTY may not permit a contractor to come into contact with Source Information, or engage in the development of the Enhanced Software hereunder unless SECOND PARTY has first obtained a non-disclosure agreement which protects against the unauthorized use of Source Information, and assures that the contractor is not engaged in Competitive Product development.

3. FIRST PARTY SUPPORT INFORMATION.

3.1 SECOND PARTY will ensure that all Source Information received from First Party, and copies made thereof, will be properly marked or otherwise appropriately identified as First Party Information before being made available to Authorized Employees and Authorized Contractors hereunder. First Party will properly mark all material and Source Information as First Party Information.

3.2 SECOND PARTY will ensure that the same degree of care is used to prevent the unauthorized use, dissemination, or publication of the Source Information as SECOND PARTY uses to protect its own confidential information of a like nature, but in no event will the safeguards for protecting such First Party Support Information be less than a reasonably prudent business would exercise under similar circumstances. SECOND PARTY will take prompt and appropriate action to prevent unauthorized use or disclosure of Source Information.

3.3 SECOND PARTY will instruct Authorized Employees and Authorized Contractors not to copy Source Information on their own, and not to disclose Source Information to anyone not authorized to receive it.

3.4 Source Information will be handled, used, and stored solely at the Development Site. The Source Information will not be stored on any computer or network which is accessible from outside of the Development Site or by people other than Authorized Employees or Authorized Contractors.

3.5 SECOND PARTY will provide First Party with a list of all Authorized Employees and Authorized Contractors who have access to the Source Information and who have had access in the preceding five (5) years.

4. TRADE SECRETS. The First Party Software, including the techniques, algorithms, and processes contained in the First Party Software which have been developed, acquired, or licensed by First Party, or any modification or extraction thereof, constitute trade secrets of First Party and/or its suppliers, and will be used by SECOND PARTY only in accordance with the terms of this Agreement. SECOND PARTY will take all measures reasonably required to protect the proprietary rights of First Party and its suppliers in the First Party Software and will promptly notify First Party of any lost or missing items and take all reasonable steps to recover such items. SECOND PARTY agrees that it will not attempt to reverse engineer any portion of the First Party Software which is provided to SECOND PARTY solely in object code form.

5. NO COMMINGLING OF TECHNOLOGY. If SECOND PARTY engages in development of products (other than the Ported Software) that are comparable to the First Party Software (“Comparable Products”) during the term of this Agreement, it will ensure that there is no sharing with such Comparable Products development any of the following: (a) design documents or schematics supplied by First Party; (b) Source Information or other information based upon or derived from the Source Information; or (c) any facilities (including, but not limited to, computer systems and network storage devices), or (f) personnel with access to any of (a)-(c) above. SECOND PARTY will ensure that all Authorized Employees and Authorized Contractors who have had previous access to the First Party Software will be precluded for a period of twenty-four (24) months after their latest access to such First Party Software from being employed in any Comparable Product development (either internally or externally) by or for SECOND PARTY or any Competitive Product (as defined in PARAGRAPH 10.9 (“Access”) of this AGREEMENT) or Comparable Product development for any third parties. “Employment in any Competitive (or Comparable) Product development” will be defined as having direct access to, or producing any specifications, documentation, or source code for, components of a Competitive (or Comparable) Product.

6. CERTIFICATION. At First Party’s request SECOND PARTY will provide First Party with written certification by an officer of SECOND PARTY of SECOND PARTY’S compliance with its obligations under PARAGRAPHS 1 and 5 of this ATTACHMENT E.

7. PROPRIETARY RIGHTS AUDIT. During the term of the Agreement and for a period of twenty-four (24) months thereafter, an independent auditor selected by First Party will have access to such portion of SECOND PARTY’S records and premises to allow First Party to determine whether SECOND PARTY is substantially in compliance with this ATTACHMENT E and PARAGRAPH 10 (“Protection of Proprietary Rights”) of the Agreement. In no event will audits be made hereunder more frequently than twice per year. Such access will be (a) during SECOND PARTY’S regular business hours, (b) arranged so that, to the extent possible, SECOND PARTY’S regular business activities are minimally disrupted and (c) under the terms of an appropriate confidentiality agreement executed by the individual(s) conducting such audit. If First Party determines, after conducting such audit, that SECOND PARTY is not substantially in compliance with its obligations to protect First Party’s proprietary rights, SECOND PARTY will pay the costs of such audit. Otherwise, First Party will pay the costs of such audit. Such payment will not preclude First Party from exercising any right which it may have under the Agreement. SECOND PARTY will immediately correct any deficiencies discovered in the course of the audit.

ATTACHMENT F
SPECIFICATIONS FOR SECOND PARTY PRODUCT

_____________________________________________________________________________

_____________________________________________________________________________

ATTACHMENT G
TEST CERTIFICATION PROCEDURES

INTRODUCTION.

This document describes proposed requirements for the software verification testing that First Party, Inc. will perform

The areas are
– Support materials
Software requirements
– Hardware requirements
– Testing Methods
– Reporting results

SUPPORT MATERIALS

Second Party must provide documentation on the following areas:

– A set of manuals and a complete description of the feature set of the Device Under Test (DUT)

– A description of current revision level, how this version differs from any previous version, and estimated ship date of the next version.

– A complete set of test plans, test scripts, test tools and test results from Second Party’s own internal testing effort. This must include a list of known bugs.

SOFTWARE REQUIREMENTS

– DUT must have implement the complete First Party Command Line Interface (CLI) for each First Party module implemented in the DUT.

– This CLI must be accessible through Telnet through any port (Inband or Outband) of the DUT.

– This CLI need not be accessible for normal customers, but in this event, First Party must be given some means of putting the DUT into this First Party test mode.

HARDWARE REQUIREMENTS

– Second Party will provide at least two (2) end-to-end test rigs for the DUT.

– These test rigs must be capable of placing the DUT into an IP/Ethernet based test harness. Thus, for example, if the DUT were a frame-relay access device, each test rig would consist of at least two Ethernet frads (one of which would be the DUT), connected back to back across the frame-relay link by either a frame-relay router or a null-cable.

– If the DUT features require cross-traffic to test, then the rig must be capable of passing such traffic. This may require a central router with 3 or more interfaces.

– The test rig must also have Sun Sparc 20′s (or equivalent) running Solaris 2.6, with Ethernet interfaces, to function as test traffic generators.

TESTING METHODS

First Party testing will consist of two parts

– Automated testing. In this phase, a series of automated tests will be performed where the DUT is placed into various traffic modes, loaded with traffic, and the results compared with expected.

– Limited manual testing. In this phase, various features which are awkward to test in an automated fashion are executed manually.

REPORTING RESULTS

First Party will provide a complete test report upon completing the tests.

This report will include all automated and manual tests run, the expected results, the actual results, and whether the result constitutes a test pass or fail.

ATTACHMENT H
SOURCE CODE SITES

SECOND PARTY facility.

_______________________________________________
_______________________________________________
_______________________________________________

SCHEDULE-1.
ATTACHMENT I
COMPETITIVE PRODUCTS

PRODUCT WITH TRAFFIC SHAPING FUNCTIONALITY FROM THESE VENDORS:

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

SCHEDULE 1
FEES

SECOND PARTY shall make the following payments to First Party:

Initial Delivery Fee payable on the Effective Date.
_____________________________________________________________________________
_____________________________________________________________________________

Prepaid royalties shall be paid upon the following schedule:
_____________________________________________________________________________
_____________________________________________________________________________

for a total of $_________________ of prepaid royalties. The prepaid royalties shall be fully creditable against royalties according to the following schedule:

From the Effective Date to ______________ , 20____ at a rate of 100% against a unit’s royalty due;

Beginning ______________, 20____ at a rate of ______% against a unit’s royalty due. Cash will make up the remainder of the royalty due.

ROYALTY SCHEDULE:

Cumulative Royalties are an aggregate of all products defined in Attachment F:

– For box level products

Computed as a percentage of list price(s) of the base unit plus any add-on amount designated for ___________________.
_____________________________________________________________________________
_____________________________________________________________________________

For system level products:

Computed as a percentage of list price(s) of the component unit as described in Attachment F plus any add-on amount designated for __________________.
_____________________________________________________________________________
_____________________________________________________________________________

MAINTENANCE FEE:
_____________________________________________________________________________
_____________________________________________________________________________

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