Pro-OEM OEM Agreement
[VERSION WHICH FAVORS THE OEM (ACQUIRER OF TECHNOLOGY)]
WHEREAS, OEM develops and markets certain software and other computer-related products and services and desires to include Supplier's software product as a component of OEM's product or services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree to the following terms and conditions, which set forth the rights, duties, and obligations of the parties.
The following terms, when used with initial capital letters in this Agreement, shall have the following definitions, unless the context in which the term is used expressly provides otherwise.
"Derivative Works" means a revision, modification, translation, abridgment, condensation or expansion of the Supplier Product or Documentation or any form in which the Supplier Product or Documentation may be recast, transferred, or adapted, which, if prepared without the consent of Supplier, would be a copyright infringement.
"Distributor" means any third party which acquires possession of the Supplier Product from OEM and is not a Reseller or End User and distributes it to a Reseller.
"Documentation" means those software user manuals, reference manuals and installation guides, or portions thereof, which are distributed in conjunction with the Supplier Product including but not limited to those set forth in Exhibit A.
"End User" means an entity that acquires the Supplier Product for Internal Use and is not an affiliate of OEM's enterprise. "End User" does not include an entity that distributes, resells, sells, licenses, rents or leases the Supplier Product to other parties in the regular course of business.
"Expiration Date" means the date identified as the expiration of the term of this Agreement, as set forth in paragraph 3 below.
"OEM" means _________________.
"Internal Use" means use for purposes that do not directly produce revenue for the user.
"Major and Minor Updates" means updates, if any, to the Supplier Product. Major Updates involve additions of substantial functionality while Minor Updates do not. Major Updates are customarily designated by a change in the number to the left of the decimal point of the number appearing after the product name while Minor Updates are customarily designated by a change in such number to the right of the decimal point. Major Updates exclude software releases which are reasonably designated by Supplier as new products. Where used herein “Updates” shall mean Major Updates or Minor Updates interchangeably.
"Marks" means Supplier's trademarks, service marks, logos, designations and insignias.
"Object Code" means any computer programming code that loads and executes without further processing by a software compiler or linker or that results when Source Code is processed by a software compiler.
"Program Errors" means any mistake, problem or defect that causes either an incorrect functioning of the Supplier Product or an incorrect or incomplete statement or graphic in Documentation, including any mistake, problem or defect that (a) renders the Supplier Product inoperable, (b) causes the Supplier Product to fail to meet any specifications or acceptance tests, (c) causes the Documentation to be inaccurate or inadequate in any material respect, (d) causes incorrect results, or (e) causes incorrect functions to occur.
"Reseller" means any third party which is not a Distributor but acquires the Supplier Product from OEM or an authorized Distributor and resells, licenses, rents, or leases to End Users.
"sale," "sell" and other similar terms, when used in connection with the marketing and distribution of the Supplier Product shall mean the granting of a license or sublicense and shall not be deemed for any purpose to mean a transfer of title or other rights of ownership to the Supplier Product, other than the rights to copy and use as specifically set out in this Agreement.
"Source Code" means the human-readable form of programming code and related system documentation, including all comments and any procedural language. Source Code does not include End User Documentation.
"Supplier" means the company identified as such on the signature page to this Agreement.
"Supplier Product" means the Supplier Product identified in Exhibit A that OEM is authorized to sublicense, market or sell under this Agreement.
2. GRANT OF LICENSES.
Subject to the terms and conditions of this Agreement, Supplier grants to OEM a non-exclusive, worldwide, perpetual license to the Supplier Product: (i) to use, reproduce and distribute the Supplier Product internally within OEM; (ii) if this license is identified in Exhibit A as including the right to Source Code, to create or have created Derivative Works by modifying the Source Code of the Supplier Product and to reproduce and distribute internally the Derivative Works in Source Code form or in Object Code form; (iii) to create or have created Derivative Works by modifying the Documentation of the Supplier Product and to reproduce and distribute internally such Derivative Works in any form; (iv) to distribute externally to End Users, either directly or through distributors, but only in bundled form with OEM’s products, copies in Object Code form only of the Supplier Product or Derivative Works and copies in any form of the Documentation or any Derivative Works of the Documentation, such distribution shall be in accordance with OEM's standard software distribution license agreement for a particular channel of distribution; (v) to exercise all rights to the Supplier Product with regard to pictorial, graphic or audio/visual works, including icons, screens, music and characters, that are created as a result of execution of any code or any Derivative Work thereof in accordance with the granted license; and (vi) to use development tools to produce Object Code that is identical to, or differs from, that produced by Supplier.
The initial term of this Agreement shall commence on the date it is executed by an authorized Supplier signatory and end on the date set forth in Exhibit A, unless terminated earlier as provided herein, and will automatically renew for a period of one year from the date otherwise expiring unless, not later than sixty (60) days prior to the scheduled expiration date, either party notifies the other that it does not desire this Agreement to continue.
4. SUPPORT, MARKETING AND DISTRIBUTION.
(a) Maintenance and Support.
Supplier shall provide OEM with maintenance and support according to the terms and conditions specified in Exhibit B.
OEM understands that Supplier reserves the right to appoint other OEM's without restriction as to number or location.
(c) Use of Authorized OEM Title.
OEM may refer to itself, in connection with exercising its rights under this Agreement, as a Supplier "Authorized OEM".
(d) Public Announcements and Promotional Materials.
Supplier and OEM shall cooperate with each other so that each party may issue a press release other than as a customer reference concerning this Agreement, provided that each party must approve such press release prior to its release.
When marketing products incorporating the Supplier Product, OEM agrees to exercise commercially reasonable efforts to ensure that each End User receiving the products or services through OEM or OEM’s lines of distribution understands and agrees to be bound by a OEM standard Software License Agreement.
(f) Use of Supplier Marks and Trade Names.
OEM is authorized to use the Supplier Marks applicable to the Supplier Product in connection with its marketing of products or services incorporating the Supplier Product. OEM agrees not to alter, erase or overprint any notice provided by Supplier without the prior written consent of Supplier or affix any Supplier Marks. OEM recognizes Supplier's ownership and title to the Trade Names and Marks.
5. FEES AND PAYMENT.
(a) Royalty and License Fees.
As license fees for the rights herein granted, OEM shall pay to Supplier royalties on OEM sales and related licensing or sublicensing of product incorporating or bundled with the Supplier Product at the rates and on the terms specified in Exhibit A hereto. OEM shall pay Supplier such license fees accrued during each calendar quarter, within forty-five (45) days following the end of such calendar quarter, and shall be accompanied by a report in reasonable detail showing the calculation of such fees. All payments shall be made in United States dollars. Prices are exclusive of all applicable taxes. OEM agrees to pay all sales and use taxes, but excluding taxes on Supplier's net income.
(b) Records Examinations.
OEM agrees to allow Supplier to examine its records to determine compliance or noncompliance with this Agreement. Any examination will be conducted only by an authorized representative of Supplier, and will occur during regular business hours at OEM's offices and will not interfere unreasonably with OEM's business activities. Examinations will be made no more frequently than annually, and Supplier will give OEM fifteen (15) business days or more prior written notice of the date of the examination and the name of Supplier’s authorized representative who will be conducting the examination. The audit will be conducted at Supplier’s expense. All information obtained by Supplier’s authorized representative conducting the audit will be maintained confidential by the representative. The examiner will give OEM and Supplier an examination report containing only the information necessary to indicate compliance or non-compliance with this Agreement.
6. INTELLECTUAL PROPERTY RIGHTS & INDEMNIFICATION.
Supplier will indemnify, defend and hold OEM, its affiliates and, subsidiaries, and its and their respective directors, officers, employees and agents (collectively, "OEM Persons") harmless from any and all damages, liabilities, costs and expenses incurred by any OEM Person as a result of any claim, judgment or adjudication against OEM Person that alleges that the Supplier Product, Trade Names or the Marks infringe any trademark, copyright patent or other intellectual property rights of any third party. OEM shall promptly notify Supplier in writing of any claim for which it seeks indemnification, provided the failure or delay in doing so shall not relieve Supplier from any obligation to indemnify any OEM Person except to the extent such delay or failure materially prejudices the defense of any such claim. Supplier will have control of the defense of any action and all negotiations for settlement and compromise, but shall not make any settlement binding on any OEM Person without OEM's consent except if such settlement provides a complete and absolute release of such person. OEM shall provide Supplier with reasonable assistance and information necessary to perform the above, with Supplier to be responsible for any out-of-pocket expenses of any OEM Person in providing such assistance. If any OEM Person desires to have separate legal representation in any such action, such OEM Person shall be responsible for the costs and fees of its separate counsel.
(b) Limitation on Indemnification.
Supplier shall have no liability for infringement based on (a) modification of the Products by OEM, or (b) the combination or use of the Supplier Product with any other computer program, equipment, product, device, item or process to the extent (i) such program, equipment, product, device or process is not furnished by Supplier and (ii) such program, equipment, product, device or process is not specified as appropriate for the use of the Supplier Product by Supplier (e.g. operating system software) and (iii) such infringement would have been avoided by the use of the Supplier Product alone and in its unmodified form.
(c) Proprietary Nature of Products and Ownership.
No title to or ownership of software acquired under this Agreement or proprietary technology in hardware acquired under this Agreement is transferred to OEM. Notwithstanding any provision of this Agreement to the contrary, Supplier, or the licensor through which Supplier obtained the rights to distribute the Supplier Product, owns and retains all title and ownership of all intellectual property rights in the Supplier Product, including all software, firmware, software master diskettes, copies of software, master diskettes, documentation and related materials that are acquired, produced or shipped by Supplier under this Agreement, and all modifications to and derivative works of software acquired under this Agreement that are made by Supplier or any third party (other than on behalf of OEM). Supplier does not transfer any portion of such title and ownership, or any of the associated goodwill, to OEM. Supplier shall own all Derivative Works of the Supplier Product produced or created by or on behalf of OEM provided that Supplier shall have no rights independently to market or sublicense any Derivative Works created by OEM without OEM’s prior written approval. OEM shall have rights to use such Derivative Works subject to the terms and conditions of this Agreement.
(d) Effect of Bankruptcy.
If "Source Code Escrowed" is indicated on Exhibit A, upon request of OEM, Supplier agrees to execute a standard software escrow agreement (the "Escrow Agreement") supplied by an escrow agent selected by OEM and reasonably acceptable to Supplier (the "Escrow Agent"), and in connection therewith Supplier agrees that from time to time upon request of OEM, Supplier shall deposit in escrow with the Escrow Agent the latest versions of all intellectual property, as defined in section 101 of Title 11 of the United States Code, with respect to software and other technology incorporated in the Supplier Product (the "Technology") including without limitation all Source Code, designs, patents and Documentation ("Supplier Product Materials"), to be made available to OEM upon the conditions set forth in this Section.
Regardless of whether "Source Code Escrowed" is indicated on Exhibit A and regardless of whether this license is identified in Exhibit A as including the right to Source Code, in the event that a trustee in bankruptcy is appointed for Supplier, then unless and until such trustee has rejected this Agreement, the trustee shall, at the written request of OEM, (i) continue to perform all of the obligations of Supplier under this Agreement, or (ii) promptly deliver to OEM the Technology, including all Supplier Product Materials held by the trustee, including any embodiment of such intellectual property to the extent protected by applicable nonbankruptcy law, and in either case not interfere with the rights of OEM to such intellectual property (including such embodiment) as provided in this Agreement or any agreement supplementary hereto, including any right to obtain such intellectual property or such embodiment from any Escrow Agent under an Escrow Agreement.
Regardless of whether "Source Code Escrowed" is indicated on Exhibit A and regardless of whether this license is identified in Exhibit A as including the right to Source Code, if the trustee rejects this Agreement, and OEM elects under Section 365(n)(1)(B) of Title 11 of the United States Code to retain its rights under this Agreement, the trustee shall promptly deliver to OEM all intellectual property, as defined in Section 101 of Title 11 of the United States Code, with respect to the Technology, including all Supplier Product Materials held by the trustee, including any embodiment of such intellectual property to the extent protected by applicable nonbankruptcy law, and not interfere with the rights of OEM to such intellectual property (including such embodiment) under this Agreement or any agreement supplementary hereto, including any right to obtain such intellectual property or such embodiment from any Escrow Agent under any Escrow Agreement.
7. CONFIDENTIAL INFORMATION.
The parties agree that any Confidential Information provided under this Agreement shall be held and maintained in strict confidence. Each party agrees to protect the confidentiality of such information in a manner consistent with the way a reasonable person would protect similar Confidential Information. "Confidential Information" means the information and materials noticed or marked by Supplier or OEM as confidential and proprietary. "Confidential Information" does not include information that (i) is already known to the receiving party at the time it is disclosed and has not been obtained wrongfully, (ii) becomes publicly known without fault of the receiving party, (iii) is independently developed by the receiving party, (iv) is approved for release in writing by the disclosing party, (v) is disclosed without restriction by the disclosing party to a third party, or (vi) is disclosed pursuant to legal obligations beyond the control of the disclosing and receiving parties.
Supplier represents and warrants (1) that the Supplier Product was prepared in a workmanlike manner and with professional diligence and skill; (2) that the Supplier Product will function on the machines and with operating systems for which it was designed; (3) that the Supplier Product conforms to the specifications and functions (including any related Documentation); and (4) that Supplier will perform all services hereunder in compliance with applicable law manner and with professional diligence and skill. Supplier further represents and warrants that (1) (except as disclosed on Exhibit A) it is the sole author of all works employed by Supplier in preparing the Supplier Product; (2) it has and will have full and sufficient right to assign or grant the rights and/or licenses granted in the Supplier Product pursuant to this Agreement; and (3) the Supplier Product does not and will not infringe any patents, copyrights, trademarks, or other intellectual property rights (including trade secrets), privacy or similar rights of any third party, nor has any claim (whether or not embodied in an action, past or present) of such infringement been threatened or asserted, nor is such a claim pending, against Supplier (or, insofar as Supplier is aware, any entity from which Supplier has obtained such rights).
9. LIMITATION OF REMEDIES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER SUPPLIER NOR OEM WILL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) SUSTAINED OR INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE SUPPLIER PRODUCT THAT IS SUBJECT TO THIS AGREEMENT REGARDLESS OF THE FORM OF ACTION AND WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE. Supplier's liability to OEM under this Agreement shall not exceed the greater of (i) amounts paid by OEM to Supplier under this Agreement or (ii) $50,000. OEM's liability to Supplier under this Agreement shall not exceed the amounts payable by OEM to Supplier under Section 5.
The limitation set forth in subsection (a) above do not apply to any payment under Section 6; to claims by OEM for personal injury or damage to real property or tangible personal property caused by Supplier's negligence; or in the case of fraud.
(a) Termination for Cause.
Either party may terminate this Agreement for the substantial breach by the other party of a material term. The terminating party will first give the other party written notice of the breach and a reasonable period of at least sixty (60) days in which to cure the alleged breach. If a cure is not achieved during the cure period, then the non-breaching party may terminate this Agreement upon written notice.
(b) Termination by Supplier.
Supplier may terminate this Agreement if OEM fails to meet its payment obligations under this Agreement and this failure continues for thirty (30) days following receipt of written notice from Supplier.
(c) Insolvency, Assignment, or Bankruptcy.
Either party may terminate this Agreement upon written notice to the other party if the other party (i) is not paying its debts as such debts generally become due, (ii) becomes insolvent, (iii) files or has filed against it a petition (or other document) under any Bankruptcy Law or similar law that is unresolved within sixty (60) days of the filing of such petition (or document), (iv) proposes any dissolution, liquidation, composition, financial reorganization or recapitalization with creditors, (v) makes a general assignment or trust mortgage for the benefit of creditors, or (vi) if a receiver, trustee, custodian or similar agent is appointed or takes possession of any of its property or business.
(d) Effect of Termination on Obligations.
Termination of this Agreement will not affect any pre-termination obligations of either party under this Agreement, and any termination is without prejudice to the enforcement of any undischarged obligations existing at the time of termination. Within thirty (30) calendar days after termination of this Agreement, OEM shall either deliver to Supplier or destroy all copies of the Supplier Product and Documentation and any other materials provided by Supplier to OEM hereunder in its possession or under its control, and shall furnish to Supplier an affidavit signed by an officer of OEM certifying that, to the best of its knowledge, such delivery or destruction has been fully effected. Notwithstanding the foregoing, (i) all sublicenses to the Supplier Product or any Derivative Work thereof granted to End Users by or on behalf of OEM and in connection with products incorporating the Supplier Product shall survive any termination of the Agreement, and in particular, it is agreed that upon expiration or termination of the Agreement for any reason, such expiration or termination shall not abridge or diminish in any way the rights of End Users to the licensed use and enjoyment of any product utilizing or incorporating the Supplier Product or any Derivative Work already distributed in accordance with the Agreement prior to its expiration or termination; and (ii) for a period of up to one year after the date of the termination of this Agreement OEM may continue, subject to payment of amounts which may be due as of the date of such termination and at any time thereafter, to sell the Supplier Product and grant End User licenses to in connection therewith, under the provisions of this Agreement solely to (A) work off existing inventory, (B) fulfill contract commitments existing at the date of expiration, or (C) satisfy binding quotations in effect at the date of termination, and may thereafter retain such rights as are necessary to support users at the release level existing at the time of termination or expiration.
11. GENERAL PROVISIONS.
(a) Force Majeure.
If either party is prevented from performing any portion of this Agreement (except the payment of money) by causes beyond its control, including labor disputes, civil commotion, war, governmental regulations or controls, casualty, inability to obtain materials or services or acts of God, such defaulting party will be excused from performance for the period of the delay and for a reasonable time thereafter.
(b) Choice of Law; Jurisdiction.
The validity, construction and performance of this Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts executed in and performed entirely within such Commonwealth, without reference to any choice of law principles of such Commonwealth. With respect to any suit, action or other proceeding arising out of this Agreement, or any other transaction contemplated thereby, the parties hereto expressly waive any right they may have to a jury trial and agree that any proceeding hereunder shall be tried by a judge without a jury. The parties agree to non-exclusive personal jurisdiction and venue of the United States District Court for Massachusetts (and any Massachusetts State Court) for that purpose.
(c) Survival of Terms.
The provisions of this Agreement that by their nature extend beyond the Expiration Date or other termination of this Agreement will survive and remain in effect until all obligations are satisfied. Confidentiality provisions of Section 7 shall remain in effect until the Confidential Information is no longer Confidential.
(d) Entire Agreement.
This Agreement, including the following Exhibits, constitutes the entire Agreement between the parties pertaining to the subject matter and supersedes all prior agreements and understandings between the parties, written or oral, with respect to such subject matter. No representations or statements of any kind made by any representative of either party which are not stated in this Agreement shall be binding on such party. No course of dealing or course of performance shall be relevant to explain or supplement any term expressed in this contract. In the event of any conflict between this Agreement and any purchase order or acknowledgment, this Agreement shall take precedence over any written or typed instructions in a written or electronic purchase order or acknowledgment. References to Sections without decimals (such as "Section 2") shall include all sections numbered with decimals in such Section (i.e. Section 2.1, 2.2, etc.). The pre-printed provisions of any written or electronic purchase order or acknowledgment shall be void and of no effect. This Agreement shall be valid when signed by authorized officers of both parties. The parties agree that this Agreement, together with any appendices, addenda or exhibits attached hereto, may be amended from time to time in writing by mutual agreement of the parties. No party shall be bound by any change, alteration, amendment, modification or attempted waiver of any of the provisions of this Agreement unless in writing and signed by an authorized officer of the party against whom it is sought to be enforced.
(i) The rights and liabilities of the parties hereto will bind and inure to the benefit of their respective successors, executors and administrators, as the case may be; provided that neither party may assign or delegate its obligations under this Agreement either in whole or in part, expressly or by operation of law, without the prior written consent of the other, except that each party may assign this Agreement (A) to any Subsidiary (as defined below) or company of which it is a Subsidiary so long as it remains responsible for such Subsidiary's performance or (B) to a person or entity into which it has merged or which has otherwise succeeded to all or substantially all of its business and assets to which this Agreement pertains, by purchase of stock, assets, merger, reorganization or otherwise, and which has assumed in writing or by operation of law its obligations under this Agreement. Any attempted assignment in violation of the provisions of this Section will be void.
(ii) All rights and licenses granted to a party under this Agreement shall apply to that party's Subsidiaries so long as such Subsidiaries agree to comply fully with the obligations imposed on that party by this Agreement and so long as such Subsidiary continues to be a Subsidiary of a party. Each party shall remain fully liable for the actions and omissions of its Subsidiaries relative to rights granted under this Section 11(f). The parties agree, however, that they may not seek to enforce any obligation of the other party (or its Subsidiaries) through a legal action brought against a Subsidiary except to the extent that such action seeks injunctive relief against that particular Subsidiary.
(iii) "Subsidiary" of an entity means a corporation, company or other entity (A) more than fifty percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are; or (B) which does not have outstanding shares or securities, as may be the case in a partnership, joint venture or unincorporated association, but more than fifty percent (50%) of whose ownership interest (representing the right to make decisions for such corporation, company or other entity) is; in each of (A) and (B) now or hereafter, owned or controlled, directly or indirectly, by the entity in question, as the case may be, but such corporation, company or other entity shall be deemed to be a Subsidiary only so long as such control exists.
All notices, demands, requests or other communications that may be or are required to be given, served or sent by any party pursuant to this Agreement will be in writing (and shall be deemed to have been duly given upon receipt), will reference this Agreement and shall be mailed by first class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by express courier or hand delivery or facsimile transmission, addressed to the address below the party's name on the signature page of this Agreement. Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice that is mailed, delivered or transmitted in the manner described above shall be deemed sufficiently given, served, sent and received for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt or the affidavit of messenger or courier being deemed conclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.
If any term, provision, covenant or condition of this Agreement is held invalid or unenforceable for any reason, the remainder of the provisions will continue in full force and effect as if this Agreement had been executed with the invalid portion eliminated. The parties further agree to substitute for the invalid provision a valid provision that most closely approximates the intent and economic effect of the invalid provision.
(h) Independent Contractors.
Each party acknowledges that the parties to this Agreement are independent contractors and that it will not, except in accordance with this Agreement, represent itself as an agent or legal representative of the other.
(i) Export Control.
Each party agrees that it will comply with the provisions of United States laws restricting export of any software, technical data or other information or materials, including without limitation the United States Export Administration Act and regulations thereunder, and will not export any software, technical data or other information or materials to any country in violation thereof. This clause shall survive termination or cancellation of this Agreement.
The headings provided in this Agreement are for convenience only and will not be used in interpreting or construing this Agreement.
Executed as of the date first above written.
(name of organization)
(name of organization)