License Agreement - Accrue Software Inc. and Pilot Software Acquisition Corp.
This License Agreement (this "Agreement") is made and entered into as
of May 30, 2002 (the "Effective Date"), by and between Accrue Software,
Inc., a Delaware corporation ("Accrue") and Pilot Software Acquisition Corp.,
a Delaware corporation ("Licensor").
WHEREAS, Accrue and Licensor are party to a certain Asset Purchase
Agreement dated May 30, 2002 pursuant to which Licensor purchased certain
assets from Accrue, including the Software (as defined below); and
WHEREAS, pursuant to the transaction contemplated by the Asset Purchase
Agreement, Licensor desires to grant, and Accrue desire to obtain, a license to
the Software on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereby agree as follows:
"Accrue Products" means Accrue's G2 product and any other current or future
products owned by Accrue prior to any Change In Control Event.
"Affiliate" means any corporate entity which, directly or indirectly, through
one or more intermediaries, Controls or is Controlled by, or is under common
Control with, another corporate entity, where "Control" means the ownership or
control, either directly or indirectly, of greater than fifty percent (50%) of
the voting rights of such entity.
"Bundled Product" means an Accrue Product that is combined with the Software so
that the combined product performs a substantially different function than that
performed by the Software alone and wherein the percentage of executable
instructions contained in the Accrue Product portion of the combined product
constitutes greater than forty percent (40%) of the total executable
instructions in the "off the shelf" combined product as a whole at the time the
combined product is licensed to the customer.
"Derivative Works" shall have the meaning set forth in the United States
Copyright Act, 17 U.S.C. Section 101, et seq.
"Documentation" means all documentation, manuals and specifications with respect
to the Software that are generally made available to customers of the Software.
"Hit List Software" means the Hit List Software Products (as that term is
defined in the Asset Purchase Agreement) excluding the third party software
embedded therein pursuant to the agreements set forth in Section 1.01(a)(iv) --
5 of the Disclosure Schedule of the Asset Purchase Agreement.
"Intellectual Property Rights" means all patents, patent rights, copyrights,
mask work rights, rights of publicity, trademark, trade dress and service mark
rights, goodwill, trade secret rights and other intellectual property rights, as
may now exist or hereafter come into existence, and all applications therefor
and registrations, renewals and extensions thereof, under the laws of any state,
country, territory or other jurisdiction.
"Object Code" mean computer-executable binary code.
"Licensor Competitor" means each of the entities listed in Appendix A and their
"Pilot Software" means the Pilot Software Products (as that term is defined in
the Asset Purchase Agreement) excluding the third party software embedded
therein pursuant to the agreements set forth in Section 1.01(a)(iv) -- 5 of the
Disclosure Schedule of the Asset Purchase Agreement.
"Source Code" means the human-readable version of a software program that can be
compiled into Object Code, including all accompanying programming notes,
programming guides and commentary.
"Software" means the Hit List Software and the Pilot Software, in both Source
Code and Object Code format.
2.1 Licensor hereby grants to Accrue a worldwide, non-exclusive,
non-transferable (except as set forth in Section 9.4), perpetual (except as set
forth in Article 7), non-sublicensable license to: (i) internally use, reproduce
and create Derivative Works of the Source Code of the Software or portions
thereof for internal business purposes only, and not on behalf of any third
party or otherwise on a "service bureau" basis, (ii) internally integrate the
Software, or portions thereof, to make Bundled Products, (iii) use, reproduce,
display, perform, distribute (directly and indirectly, including through
distributors, resellers, OEMs and VARS), license, host and market Object Code
versions of the Bundled Products and (iv) use, reproduce, and distribute the
Documentation in connection with Bundled Products. The license agreement(s)
under which Accrue, or its distributors, license Bundled Products to customers
shall contain provisions substantially equivalent to the provisions set forth in
Appendix B. Accrue shall not under any circumstances distribute, license or
market the Software on a stand alone basis.
2.2 Notwithstanding Section 6, Accrue shall have the right to place the Source
Code of the Software in escrow with a reputable third party escrow agent
pursuant to an escrow agreement between Accrue, the escrow agent and an Accrue
customer, if required by a customer as a
condition to licensing an Accrue Product; provided however that the terms of any
such escrow agreement shall be no less favorable to Licensor than the terms of
escrow agreements that Accrue enters into with respect to its own products.
2.3 Accrue's Affiliates shall have the same rights under this Agreement as
Accrue, providing such Affiliates agree to be bound by all obligations of Accrue
hereunder that pertain thereto.
2.4 Accrue shall comply with the following restrictions regarding the Source
Code for the Software:
(a) The Source Code for the Software may only be accessed or viewed by
employees or consultants of Accrue who need to access the code for the purpose
of exercising Accrue's rights hereunder ("Authorized Work").
(b) Accrue will maintain an access log identifying who has access to the
Source Code for the Software ("Authorized Employees"), which may be viewed by
Licensor upon its written request. Upon Licensor's written request, Accrue shall
certify that all Authorized Employees have executed a confidentiality agreement
with terms no less restrictive than those contained herein.
(c) Accrue shall keep all back-up copies of the Source Code for the
Software in a locked room or vault or other secure storage space. All hardcopies
of the Source Code shall be labeled "highly confidential" or with a similar
designation and must be shredded after use. Upon termination of this Agreement,
all copies of the Source Code shall be returned to Licensor.
2.5 In the event of a merger or acquisition or other change in control of Accrue
in which a Licensor Competitor acquires or is merged into Accrue (each, a
"Change In Control Event"), the following additional restrictions regarding the
Source Code for the Software shall apply:
(a) The Source Code for the Software shall not be used by Accrue in
connection with any products of Accrue other than those currently being marketed
by Accrue immediately prior to such Change In Control Event.
(b) The Source Code for the Software will reside on a single server
dedicated exclusively for use by Authorized Employees for Authorized Work. The
server will not be connected to any network accessible to anyone other than
Authorized Employees for the purpose of performing Authorized Work. Only
machines utilized by Authorized Employees for performing Authorized Work will be
connected to this server. The Source Code for the Software shall only be
transferred or downloaded to a dedicated workstation for an Authorized Employee
performing Authorized Work. Under no condition will the Source Code for the
Software be copied, transferred or downloaded to any other computer.
(c) Without limiting any of Accrue or the surviving entity's
confidentiality obligations under this Agreement, Accrue and the surviving
entity shall maintain the Source Code for the Software in strict confidence and
shall protect the Source Code for the Software with the same
measures that Accrue or the surviving entity uses to protect its own source
code. Accrue and the surviving entity shall promptly notify Licensor in writing
of any actual or suspected misuse or unauthorized use or disclosure of the
(d) Notwithstanding the provisions of Section 2.1, upon a Change In
Control Event, the Source Code for the Software shall not be combined with any
new products of Accrue other than those being commercialized by Accrue
immediately prior to such Change In Control Event.
(e) Licensor shall have the right to have an independent third party audit
Accrue's use of the Source Code to determine if Accrue has complied with the
conditions set forth in Sections 2.4 and 2.5, provided that Licensor may only
conduct one (1) such audit each year. Any material breach of Section 2.4 or 2.5
shall be deemed a material breach of this Agreement.
2.6 With respect to the software licensed under the "Software License Agreement"
between Accrue and infoShark, Inc. dated January 22, 2002 (which agreement is
being assigned to Licensor pursuant to the Asset Purchase Agreement), and to the
extent permitted by the underlying license agreement with infoShark, Inc.,
without any additional consideration, Licensor hereby grants to Accrue a
worldwide, non-exclusive, non-transferable (except as set forth in Section 9.4),
perpetual (except as set forth in Article 7), non-sublicensable license to,
reproduce, display, perform, distribute (directly and indirectly, including
through distributors, resellers, OEMs and VARS), license, host and market Object
Code versions of such software when incorporated into Bundled Products.
2.7 To the extent permitted by the underlying license agreement for such third
party software, Licensor hereby grants to Accrue a worldwide, non-exclusive,
non-transferable (except as set forth in Section 9.4), perpetual (except as set
forth in Article 7) license to internally use and exploit all know-how and other
technical information retained by Accrue employees and Accrue consultants
related to the third party software covered by the agreements set forth in
Section 1.01(a)(iv) -- 6 of the Disclosure Schedule of the Asset Purchase
3.1 In consideration of the licenses granted in Section 2, Accrue shall pay
Licensor a license fee of two hundred thousand dollars ($200,000) payable as
follows: Accrue shall pay eight thousand three hundred and thirty-three dollars
and thirty three cents ($8,333.33) per month for twenty-four (24) calendar
months, with the first payment being due on the last day of the first full
calendar month following the Effective Date.
3.2. All payments shall be made within thirty (30) days after receipt of a valid
3.3 Accrue agrees to pay all sales, use, value-added, excise or similar taxes
imposed as a result of the licenses granted to Accrue hereunder (other than
taxes based on Licensor's income).
4.1 By Licensor. Subject to the licenses granted herein, Licensor retains all
right, title and interest in and to the Software, including all Intellectual
Property Rights therein and thereto. Accrue acknowledges that the licenses
granted herein do not provide Accrue with title to or ownership of the Software,
but only the rights set forth herein. No rights are granted other than the
rights expressly set forth herein.
4.2 By Accrue. Accrue retains all right, title and interest in and to any and
all modifications, improvements and Derivative Works of the Software created by
Accrue within the scope of the licenses granted to Accrue herein, including all
Intellectual Property Rights therein and thereto.
5. DISCLAIMER OF WARRANTIES.
5.1 LICENSOR MAKES NO WARRANTIES WITH RESPECT TO THE SOFTWARE, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
6. CONFIDENTIAL INFORMATION.
6.1 Confidential Information. "Confidential Information" means any nonpublic and
proprietary information or materials relating to a party's marketing business or
technology which the disclosing party marks as "confidential" at the time of
disclosure or confirms in writing is confidential within a reasonable time (not
to exceed thirty (30) days) after disclosure. The terms and conditions (but not
the existence) of this Agreement shall be deemed Confidential Information of
each party. Notwithstanding the foregoing, Confidential Information does not
include, and nothing in this Agreement shall prohibit or limit either party's
use of, information (including but not limited to ideas, concepts, know-how,
techniques, and methodologies) (i) previously known to it, (ii) independently
developed by it, (iii) acquired by it from a third party which was not, to the
receiving party's knowledge, under an obligation to the disclosing party not to
disclose such information, or (iv) which is or becomes publicly available
through no breach by the receiving party of this Agreement.
6.2 Protection of Confidential Information. During the terms of this Agreement
and for a period of seven (7) years after initial disclosure, neither party will
provide, disclose or otherwise make available to any third party any of the
disclosing party's Confidential Information. Except as expressly provided
herein, the receiving party will not use or disclose such Confidential
Information without the disclosing party's prior written consent, except to the
receiving party's employees or consultants on a need-to-know basis, provided
that any such consultants have executed written agreements restricting use or
disclosure of such Confidential Information that are at least as restrictive as
the receiving party's obligations under this Section 6. In addition to the
foregoing nondisclosure obligations, the receiving party agrees to use at least
the same care and precaution in protecting such Confidential Information as the
receiving party uses to protect the receiving party's own confidential and
proprietary information and trade secrets, and in no
event less than reasonable care. The receiving party shall return all
Confidential Information promptly upon the request of the disclosing party or
upon termination of this Agreement.
6.3 Equitable Remedy. Each party acknowledges that due to the unique nature of
the other party's Confidential Information, the disclosing party will not have
an adequate remedy in money or damages in the event of any unauthorized use or
disclosure of such party's Confidential Information. In addition to any other
remedies that may be available in law, in equity or otherwise, each party shall
be entitled to seek any injunctive relief that may be appropriate to prevent
such unauthorized use or disclosure.
6.4 Indemnification. Accrue shall indemnify Licensor and its directors,
officers, employees and agents and defend and hold each of them harmless from
and against any and all losses, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) in connection with any and
all third party liability, suits, investigations, claims or demands
(collectively, "Losses"), arising from or occurring as a result of Accrue's
activities with respect to the Software or the Bundled Products. Accrue shall,
at its expense, pay for all costs and attorney's fees in defending any action
brought against Accrue or Licensor based on a claim that Accrue's activities
with respect to the Software or the Bundled Products infringes any patents,
copyrights, trademarks or other proprietary or intellectual property right of
any third party. Each party shall immediately notify the other party in writing
of such claim. In no event will Licensor indemnify Accrue or any third party or
be liable for any damages awarded to Accrue or such third party. Licensor and
Accrue shall cooperate in any legal process concerning alleged infringement of
any third party's alleged rights arising from Licensor's or Accrue's use of the
Software. Each party shall make available to the other its employees, records,
information and the like to the extent reasonably necessary for the legal
process. Accrue shall have sole control over any litigation with respect to
indemnifiable Losses hereunder and any settlement thereof.
7. TERM AND TERMINATION.
7.1 Term. This Agreement is effective as of the Effective Date, and will
continue in effect in perpetuity unless earlier terminated pursuant to this
7.2 Termination By Licensor. Licensor may terminate this Agreement, including
the licenses granted under Section 2, only if (i) Accrue fails to make payment
under Section 3 or (ii) Accrue materially breaches Section 2.1, Section 2.4 or
Section 2.5; and, in the case of any occurrence of an event described in either
subsection (i) or subsection (ii) of this sentence, such failure is not cured
within sixty (60) days of written notice thereof. Notwithstanding anything
herein to the contrary, Licensor may not terminate this Agreement, or the
licenses granted under Section 2, for any other reason. However, nothing herein
shall prevent Licensor from seeking an injunction or money damages with respect
to any breach of this Agreement.
7.3 Termination By Accrue. Accrue may terminate this Agreement if Licensor
materially breaches this Agreement and such breach has not been cured within
sixty (60) days after written notice thereof.
7.4 Effect of Termination. Without limiting any other rights and remedies
available to the terminating party, upon termination of this Agreement, all
licenses granted to Accrue hereunder shall terminate and all payment obligations
due to Licensor after the effective date of termination shall terminate. Accrue
may retain sufficient copies of the Software and Documentation beyond
termination solely to support its then-existing customers.
7.5 Survival. Articles 3, 4, and 8, and Sections 6.1, 6.2, 6.3, and 6.4, as well
as any accrued but unpaid payment obligations, shall survive the termination of
8. LIMITATION OF LIABILITY.
8.1 LICENSOR'S LIABILITY ARISING UNDER THIS AGREEMENT WILL NOT EXCEED THE
AMOUNTS RECEIVED BY LICENSOR FROM ACCRUE HEREUNDER. IN NO EVENT SHALL EITHER
PARTY BE LIABLE UNDER THIS AGREEMENT OR FOR BREACH HEREOF FOR ANY INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING WITHOUT
LIMITATION LOST PROFITS OR LOSS OF BUSINESS, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF THE
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. ACCRUE ACKNOWLEDGES THAT FEES AGREED
UPON BY LICENSOR AND ACCRUE ARE BASED IN PART UPON THESE LIMITATIONS, AND THAT
THESE LIMITATIONS WILL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF
ANY LIMITED REMEDY.
9.1 Independent Contractor Status. Each party agrees and acknowledges that in
its performance of its obligations under this Agreement, it is an independent
contractor of the other party, and is solely responsible for its own activities.
Neither party shall have any authority to make commitments or enter into
contracts on behalf of, bind or otherwise obligate the other party in any manner
whatsoever. No joint venture, franchise or partnership is intended to be formed
by this Agreement.
9.2 Entire Agreement; Amendment. This Agreement constitutes the entire Agreement
between the parties with respect to the subject matter hereof and supersedes all
prior contemporaneous oral or written understandings or agreements among the
parties which relate to the subject matter hereof. No modification or amendment
of this Agreement or any of its provisions shall be binding upon any party
unless made in writing and duly executed by authorized representatives of all
9.3 Governing Law and Jurisdiction. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California without
regard to the conflicts of laws principles thereof. All disputes arising out of
or related to this Agreement will be subject to the exclusive jurisdiction and
venue of the California state and federal courts located in Santa Clara
County, California and the parties hereby consent to such jurisdiction and
venue. The United Nations Convention on Contracts for the Sale of Goods does not
apply to this Agreement.
9.4 Assignment. Neither party may assign or transfer, whether voluntarily, by
operation of law, or otherwise, any rights or delegate any duties under this
Agreement without the prior written consent of the other party. Any purported
transfer, assignment or delegation without such prior written consent will be
null and void and of no force or effect. Notwithstanding the foregoing, both
parties shall have the right to assign this Agreement to any successor to
substantially all of its business or assets to which this Agreement relates,
whether by merger, sale of assets, sale of stock, reorganization or otherwise.
Subject to the foregoing, this Agreement will bind and inure to the benefit of
the parties and their respective successors and permitted assigns.
9.5 Notices. All notices, requests, consents and other communications which are
required or permitted hereunder shall be in writing, and shall be delivered by
registered U.S. mail, postage prepaid (effective three (3) days after mailing)
or sent by facsimile or electronic mail, with a confirmation copy simultaneously
sent by U.S. mail, postage prepaid (effective upon transmission), at the
addresses set forth on the signature page. Notice of change of address shall be
given in the same manner as other communications.
9.6 Severability. If any provision of this Agreement is held to be invalid,
illegal or unenforceable for any reason, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
9.7 Export Control. Accrue shall comply, and shall cause its distributors to
comply, with all United States laws and regulations controlling the export of
certain commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce. Among
other things, these laws and regulations prohibit or require a license for the
export of certain types of commodities and technical data to specified
countries. Accrue hereby gives written assurance that it will comply, and will
cause its Distributors to comply, with all United States export control laws and
regulations, that it bears sole responsibility for any violation of such laws
and regulations by it and or its distributors.
9.8 Counterparts. This Agreement may be executed in two counterparts, both of
which taken together shall constitute a single instrument. Execution and
delivery of this Agreement may be evidenced by facsimile transmission.
IN WITNESS WHEREOF Accrue and Licensor, intending to be legally bound by
the terms of this Agreement, have caused this Agreement to be executed by their
duly authorized representatives as of the Effective Date.
ACCRUE SOFTWARE, INC.
PILOT SOFTWARE ACQUISITION CORP.
Ab Initio Software
Ascential Software, Inc. (ASCL)
Brio Technology (BRIO)
Business Objects (BOBJ)
Computer Associates (CA)
Evolutionary Technologies International
Hyperion Solutions (HYSL)
Informatica Corp (INFA)
Sagent Technology Inc. (SGNT)
1. Accrue or its licensors retain exclusive ownership of all intellectual
property rights in or to the licensed software, and no title to such
intellectual property rights is transferred to the customer.
2. The customer shall not reverse engineer, disassemble, decompile, or otherwise
attempt to derive source code from the licensed software.
3. The customer shall comply with all export and re-export restrictions and
regulations of the Department of Commerce or other United States agency or
authority, and not to transfer, or authorize the transfer, of the Products to a
prohibited country or otherwise in violation of any such restrictions or
4. Accrue's licensors make no warranties in connection with the licensed
software, and expressly disclaim any implied warranties of merchantability or
fitness for a particular purpose.
5. Under no circumstances shall Accrue's licensors be liable for any indirect,
consequential, incidental or special damages.