Sun Channel Agreement Master Terms - Sun Microsystems Inc. and Intraware Inc.
SUN CHANNEL AGREEMENT
THIS SUN CHANNEL AGREEMENT MASTER TERMS ('Master Terms'), is made as of
September 1, 1999 ('Effective Date') between Sun Microsystems, Inc., with its
address at 901 San Antonio Road, Palo Alto CA 94303 ('Sun'), and Intraware Inc.,
with its address at 25 Orinda Way, Orinda, CA 94563 ('Customer').
The parties agree as follows:
1. SCOPE OF AGREEMENT
1.1 EXHIBITS AND SCHEDULES. These Master Terms describe the general
terms by which, Customer may purchase Product and Service from Sun. The specific
terms related to the purchase of Equipment, Software and Service are described
in the appropriate Product or Service Exhibits and Schedules (collectively
referred to as 'Exhibits'). The Exhibit will specify whether Customer will
purchase Equipment and/or Service directly from Sun or a Sun authorized
reseller. Each Exhibit and these Master Terms together constitute a separate
agreement ('the Agreement'). Exhibits may be added or deleted from time to time
by the agreement of the parties, but Customer is only authorized to purchase
Product or Service hereunder to the extent that one or more applicable Exhibits
is executed and in force.
1.2 ORDER OF PRECEDENCE. The provisions of any Exhibit will take
precedence over these Master Terms, to the extent that they are inconsistent.
2.1 EQUIPMENT means the hardware components (may also be referred to as
'hardware') of Product and includes the media on which Software is pre-loaded.
2.2 PRODUCT means any Equipment and Software delivered by Sun directly
or indirectly to Customer under the Agreement.
2.3 SERVICE means any consulting, educational and support services
provided directly or indirectly to Customer under the Agreement.
2.4 SOFTWARE means any binary software (and related documentation)
provided by Sun directly or indirectly to Customer under the Agreement.
3. TERM AND TERMINATION
3.1 TERM. These Master Terms commence on the Effective Date and will
continue until the expiration or termination of all Exhibits. Each Exhibit shall
detail the commencement date of the Exhibit ('Exhibit Effective Date').
3.2 TERMINATION AT WILL. Either party may terminate these Master Terms
and/or any Exhibits without cause, for any reason, on one hundred eighty (180)
days written notice to the other party.
3.3 TERMINATION FOR CAUSE: Either party may terminate these Master
Terms and any or all Exhibits:
(a) immediately, by written notice, upon material breach by the
other party of the Agreement, if such breach cannot be remedied;
(b) by written notice, if the other party fails to cure any
material remediable breach of the Agreement within thirty (30) days of
receipt of written notice of such breach;
(c) automatically if Customer ceases to do business in the
normal course, becomes or is declared insolvent or bankrupt, is the subject
of any proceeding relating to the liquidation or insolvency of Customer which
is not dismissed within ninety (90) days or makes an assignment for the
benefit of its creditors;
(d) immediately by written notice if Customer undergoes any
material change in ownership or control (whether by way of voting or contract
rights or otherwise) or in its business, which change Sun considers material,
in the light of the fact that Customer has been appointed by Sun because of
its present financial, technical and managerial conditions.
3.4 TERMINATION BY SUN. In addition to the general reasons set forth in
Sections 3.2 and 3.3 above, Sun may terminate these Master Terms and any or all
Exhibits, immediately by written notice if Customer:
(a) breaches any Sun Software license;
(b) breaches Section 5 (Confidential Information) of these
(c) breaches (or Sun reasonably believes Customer will breach)
the U.S. Export Administration Regulations, the U.S. Foreign Corrupt
Practices Act or similar laws or regulations of any other government; or
(d) infringes or challenges the validity of any Sun copyright or
Sun Trademark (as defined herein.)
3.5 CONSEQUENCES OF TERMINATION OR EXPIRATION. Upon any expiration or
termination of the Agreement (or all of them), the following will occur:
(a) all outstanding invoices and amounts owing from Customer to
Sun will there upon become immediately due and payable;
(b) Sun will have the right of first refusal to repurchase
Product in Customer's inventory at the lower of net invoice price or the then
fair market value, as may be adjusted for any amounts due but unpaid pursuant
to Section 3.5(a). If Sun desires to exercise this right, it will do so
by written notice. Except in the case of Sun's termination for material
breach, for a period of ninety (90) days from the date of termination or
expiration, Customer may sell and/or license under the terms of the Agreement
any inventory Sun elects not to repurchase;
(c) Sun will have the right to cancel by written notice all or
part of any unfulfilled order previously accepted by Sun. To the extent that
Sun does not cancel any such order, the Agreement will continue to apply to
(d) except as otherwise provided in sub-section 3.5(b), Customer
will immediately return all Sun property under Customer's control (including
without limitation all Sun confidential information, schematics, manuals,
Software and Sun business plans) and remove, cancel and/or cease to use the
Sun Trademarks, any signs or other advertising materials referring to Sun, or
Product or Service or to Customer as an authorized reseller of Sun; and
(e) except as otherwise provided in sub-section 3.5(b), all
Customer's rights under the Agreement shall immediately cease and Customer
shall at no time in the future represent that it is an authorized reseller of
Sun or that it is in any way associated with Sun or Products.
3.6 SURVIVAL. Rights and obligations under the Agreement which by their
nature should survive, will remain in effect after termination or expiration of
the Agreement. All provisions of these Master Terms shall continue to apply to
any Exhibit which by its terms survives termination of these Master Terms.
3.7 NO LIABILITY FOR TERMINATION OR EXPIRATION. The right of
termination or expiration provided herein is absolute. Each party waives and
releases the other from any claim to compensation or indemnity related to the
permitted or lawful termination of the business relationship established under
4. COMMERCIAL TERMS
4.1 Commercial terms for Customers who purchase Products or Services
from a Sun authorized reseller will be determined by Customer's agreement with
such reseller. This Section 4.1 applies only to Customers who purchase Products
or Services directly from Sun.
(a) PRICES AND TAXES. Prices and fees for Product and Service
are [DDP excluding VAT (INCOTERMS 1990) or exclusive of all shipping and
insurance charges, and do not include sales tax or any other tax based upon the
value of Product and/or Service. Customer is responsible for payment of all such
charges and taxes. To the extent that Customer is required to withhold taxes
based upon Sun's income in any country, Customer will provide Sun with written
evidence of such withholding suitable for Sun to obtain a tax credit in the
(b) PAYMENTS. If Customer satisfies Sun's credit requirements,
payment terms are net thirty (30) days from the date of Sun's invoice or
shipment whichever is the later. Otherwise terms are cash in advance of
delivery. Sun in its reasonable commercial judgment may place Customer on
credit hold, in which event, Sun will promptly inform Customer and may: (i)
with respect to Product purchases, delay or reschedule Customer orders, and
(ii) with respect to Service, discontinue delivery upon thirty (30) days'
written notice to Customer. Interest will accrue from the
date on which payment is due at the lesser of fifteen percent (15%) per annum
or the maximum rate permitted by applicable law. Customer will not be
required to pay the disputed portion of any invoice, pending resolution of
that dispute, provided that written notice of the dispute has been forwarded
to Sun in writing within (15) days of the date of that invoice.
4.2 RECORDS AND AUDITS. During the term of the Agreement and for a
period of three (3) years thereafter, Customer will maintain accurate records as
necessary to verify compliance with the Agreement. Sun may audit these records
at any time after reasonable written notice to verify compliance. Sun will
conduct this audit through an independent auditor of Sun's choice ('Auditor'),
during Customer's normal business hours. Auditor will be bound to keep
confidential the details of the business affairs of Customer and to limit
disclosure of the audit results to only the sufficiency of the records,
including, whether Customer is in compliance with the terms of the Agreement and
the amount, if applicable, of any required additional payment or other payment
adjustment. Except as described below, Sun will bear all costs and expenses
associated with the exercise of its audit rights. Any errors in payments
identified will be corrected by Customer by appropriate adjustment in payment
for the quarterly period during which the error is discovered. In the event of
an underpayment of more than five percent (5%), Customer will reimburse Sun the
amount of the underpayment, the reasonable charges of the Auditor in performing
the audit that identified the underpayment, and interest on the overdue amount
at the maximum allowable interest rate from the date the obligation accrued.
5. CONFIDENTIAL INFORMATION
If either party desires that information provided to the other party
under the Agreement be held in confidence, that party will, prior to or at the
time of disclosure, identify the information in writing as confidential or
proprietary. The recipient may not disclose such confidential or proprietary
information, may use it only for purposes specifically contemplated in the
Agreement, and must treat it with the same degree of care as it does its own
similar information, but with no less than reasonable care. These obligations do
not apply to information which: a) is or becomes known by recipient without an
obligation to maintain its confidentiality; b) is or becomes generally known to
the public through no act or omission of recipient, or c) is independently
developed by recipient without use of confidential or proprietary information.
This section will not affect any other confidential disclosure agreement between
6. LIMITED WARRANTIES
6.1 PRODUCT AND SERVICE WARRANTIES. Any warranties for Product and Service
will be specified in the Exhibit(s).
6.2 YEAR 2000 WARRANTY.
(a) Sun warrants that specified versions of Product identified
on Sun's external Web site (url: www.sun.com/y2000/cpl.html) as being Year 2000
compliant ('Listed Product') will not produce errors in the processing of date
data related to the year change from December 31, 1999 to January 1, 2000. Date
representation, including leap years, will be accurate when Listed Product
are used in accordance with their accompanying documentation, provided that
all hardware and software products used in combination with Listed Product
properly exchange date data with them.
(b) In addition to the Listed Products, the warranty also
applies to the Products identified in Attachment A to the Software Exhibit
(c) Versions of Product identified on Sun's external Web site
as not yet compliant, but which are scheduled to be made compliant, will become
Listed Product when remedial replacement parts, patches, software updates or
subsequent releases ('Y2K Fixes') are issued and properly installed.
(d) Other Product are not covered by these warranties.
(e) To the extent that Sun installs Y2K Fixes or performs
other Service under the Agreement for Customer, Sun respectively warrants that:
(i) upon installation of the Y2K Fixes, Product will
become Listed Product; and
(ii) Service performed on Listed Product will not
result in them ceasing to be Listed Product.
(f) Customer's sole and exclusive remedy for Sun's breach of
these warranties will be for Sun: (i) at Sun's expense, to use commercially
reasonable efforts to provide Customer promptly with equivalent Year 2000
compliant Product; or (ii) if (i) is commercially unreasonable, to refund to
Customer its net book value for non-compliant Listed Product.
6.4 DISCLAIMER OF WARRANTIES. UNLESS SPECIFIED IN THE AGREEMENT, OR IN
ANY EXHIBIT, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS AND WARRANTIES,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH
DISCLAIMERS ARE HELD TO BE LEGALLY INVALID.
7. IMPORT AND EXPORT LAWS
All Product, Service and technical data delivered under the Agreement
are subject to U.S. export control laws and may be subject to export or import
regulations in other countries. Customer agrees to comply strictly with all such
laws and regulations and acknowledges that it has the responsibility to obtain
such licenses to export, re-export or import as may be required after delivery
8. NUCLEAR APPLICATIONS
Customer acknowledges that Products are not designed or intended for
use in the design, construction, operation or maintenance of any nuclear
facility. Sun disclaims any express or implied warranty of fitness for such
9.1 TRADEMARKS. 'Sun Trademarks' means all names, marks, logos,
designs, trade dress and other brand designations used by Sun in connection with
Product and Service. Customer may refer to Product and Service by the associated
Sun Trademarks provided that such reference is not misleading and complies with
Sun's Trademark and Logo Policies. Customer may not remove or alter any Sun
Trademarks, nor may it co-logo Product. Customer agrees that any use of Sun
Trademarks by Customer will inure to the sole benefit of Sun or its licensors.
Customer agrees not to incorporate any Sun Trademarks into Customer's
trademarks, service marks, company names, internet addresses, domain names, or
any other similar designations.
9.2 SPECIAL PROGRAM LOGOS. Customer may use the special program logo,
if any, applicable to Customer's appointment, as established in any Exhibit
(e.g. Authorized Reseller Logo) only: (a) as shown in the art work provided by
Sun; (b) in pre-sale marketing materials and advertising, but not on goods,
packaging, product labels, documentation or other materials distributed with
Product; (c) in a manner no more prominent than Customer's corporate name and
logo; and (d) otherwise in accordance with the then current Sun Trademark and
9.3 USE OF CUSTOMER INFORMATION. Each party has the right to disclose
and publish the other party's name, address and profile information in
connection with it's Customer programs.
10. INTELLECTUAL PROPERTY CLAIMS
Sun will defend or settle at its option and expense any legal
proceeding brought against Customer, to the extent that it is based on a
claim that the use of Product (or the use of the replacement parts,
enhancements, maintenance releases, and patches ('Materials') provided to
Customer by Sun) directly infringe a [*], and will pay all damages and costs
awarded by a court of final appeal attributable to such claim, provided that
Customer: (a) gives written notice of the claim promptly to Sun; (b) gives
Sun sole control of the defense and settlement of the claim; (c) provides to
Sun all available information and assistance; and (d) has not compromised or
settled such claim. If any Product or Materials are found to infringe, or in
Sun's opinion are likely to be found to infringe, Sun may elect to: (a)
obtain for Customer the right to use such Product and/or Materials; (b)
replace or modify such Product and/or Materials so that they become
non-infringing; or if neither of these alternatives is reasonably available,
(c) remove such Product and/or Materials and refund Customer's net book value
for these Product and/or Materials. Sun has no obligation under this Section
10 for any claim which results from: (a) use of Product and/or Materials in
combination with any equipment, software or data not provided by Sun,
provided such infringement claim would have been avoided had the Product not
been used in combination with such equipment, software or data; (b) Sun's
compliance with designs or specifications of Customer; (c) modification of
Product and/or Materials; or (d) use of an allegedly infringing version
of any Product and/or Materials, if the alleged infringement could be avoided
by the use of a different version made available to Customer. THIS SECTION 10
STATES THE ENTIRE LIABILITY OF SUN AND EXCLUSIVE REMEDIES OF CUSTOMER FOR
CLAIMS OF INFRINGEMENT.
11. LIMITATION OF LIABILITY
11.1 Except for obligations under Section 10 (Intellectual Property
Claims), or Section 12 (Indemnity and Insurance) or breach of any applicable
license grant, and to the extent not prohibited by applicable law, each party's
aggregate liability to the other for claims relating to the Agreement, whether
for breach or in tort, will be [*].
11.2 Neither party will be liable for any indirect, punitive, special,
incidental or consequential damage in connection with or arising out of the
Agreement (including loss of business, revenue, profits, use, data or other
economic advantage) however it arises, whether for breach or in tort, even if
that party has been previously advised of the possibility of such damage.
11.3 Liability for damages will be limited and excluded even if any
exclusive remedy provided for in the Agreement fails of its essential purpose.
12. INDEMNITY AND INSURANCE
Except for claims arising under Section 10 (Intellectual Property
Claims), Customer will indemnify Sun and its suppliers from and against all
claims, liabilities, damages and costs (including legal fees and costs),
relating to (i) Customer's use or distribution of Product and Service under the
Agreement or (ii) any acts or omissions of Customer. Customer shall carry
liability insurance to protect Sun from all such claims, pay the premiums
therefor, and deliver to Sun, upon request, proof of such insurance (which shall
require thirty (30) days' written notice to Sun in event of modification or
13. FORCE MAJEURE
A party is not liable under the Agreement for non-performance caused by
events or conditions beyond that party's control, if the party makes reasonable
efforts to perform. This provision does not relieve either party of its
obligation to make payments then owing.
14. WAIVER OR DELAY
Any express waiver or failure to exercise promptly any right under the
Agreement will not create a continuing waiver or any expectation of
Neither party may assign or otherwise transfer any of its rights or
obligations under the Agreement, without the prior written consent of the other
party, which consent shall not be unreasonably withheld, except that Sun may
assign its right to payment, assign the Agreement to an
affiliated company, or subcontract the delivery of Service or Product. If Sun
elects to subcontract Service or Product delivery, Sun will remain primarily
responsible for delivery.
16. RELATIONSHIP OF THE PARTIES
An Agreement is not intended to create a relationship such as a
partnership, franchise, joint venture, agency, or employment relationship.
Neither party may act in a manner which expresses or implies a relationship
other than that of independent contractor, nor bind the other party.
All written notices required by the Agreement must be delivered in
person or by means evidenced by a delivery receipt and will be effective upon
If any provision of the Agreement is held invalid by any law or
regulation of any government or by any court or arbitrator, such invalidity will
not affect the enforceability of any other provisions.
19. GOVERNING LAW
Disputes which cannot be settled amicably will be governed by the laws
of the US and the state of California. Choice of law rules of any jurisdiction
and the United Nations Convention on Contracts for the International Sale of
Goods will not apply.
20. ENTIRE AGREEMENT
20.1 An Agreement (which includes the applicable Exhibit) is the
parties' entire agreement relating to its subject matter. It supersedes all
prior or contemporaneous oral or written communications, proposals, conditions,
representations and warranties and prevails over any conflicting or additional
terms of any quote, order, acknowledgment, or other communication between the
parties relating to its subject matter.
20.2 No modification to the Agreement will be binding, unless in
writing and signed by an authorized representative of each party.
IN WITNESS WHEREOF, THE DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES
HAVE EXECUTED THESE MASTER TERMS AS OF THE EFFECTIVE DATE.
SUN MICROSYSTEMS, INC. INTRAWARE
By: /s/ Alton D. Page By: /s/ Donald M. Freed
Name: Alton D. Page Name: Donald M. Freed
Title: VP Operations Title: EVP/CFO
Date: 8/31/99 Date: 8/31/99
DIRECT VALUE ADDED RESELLER (DVAR)
This SMI Software Exhibit ('Software Exhibit') between Sun Microsystems, Inc.
and Customer is an attachment to the Master Terms between Sun and Customer and
is effective as of the date of execution by Sun ('Exhibit Effective Date'). The
Master Terms are an integral part of this Software Exhibit and are incorporated
by reference herein.
1.1 'BCL' means the Sun binary code license contained in Software or
1.2 'Channel Web' means Sun's proprietary software channel information
1.3 'End User' means the entity licensed to use Software under a BCL.
If End User is a corporation or other entity, then, for license fee purposes,
'End User' includes each individual within such corporation or entity licensed
to use Software under the BCL.
1.4 'Error' means any reproducible failure of Software to perform its
intended function or any significant inaccuracy in its related documentation.
1.5 'Error Correction' means a modification, procedure, patch or
routine intended to correct the practical adverse effect of an Error.
1.6 'Fees' means the fees set forth in the Price List.
1.7 'Guide' means the Sun Channel Program Guide or Guides relating to
Software ordered under this Software Exhibit.
1.8 'NFR Software' means Software designated on the Channel Web as 'not
for resale' software.
1.9 'Price List' means the applicable Sun Price List current at the
time of execution of this Software Exhibit and any subsequent price changes made
by Sun under Section 3.4 of this Software Exhibit.
1.10 'Software', in addition to the definition in the Master Terms,
includes Error Corrections, upgrades, NFR Software and Subscription Kits.
1.11 'Software Release' means a release of Software that is designated
by Sun in its sole discretion by a change in the digit(s) to the left of the
decimal point in the Software version number [(x).x.x].
1.12 'Subscription Kit' means tangible or electronically downloadable
materials designated in the Price List as a Sun Software Subscription Program
Product and delivered in kit form.
1.13 'Territory' means the countries or geographic regions
identified in SCHEDULE 1 to this Software Exhibit.
1.14 'Update' means a release of a Software that is designated by Sun
in its sole discretion by a change in the digit(s) to the right of the tenths
digit in the Software version number [x.x.(x)].
1.15 'Upgrade' means Updates, Version Releases, or Software Releases
that Sun makes generally commercially available.
1.16 'Version Release' means a release of a Software that is designated
by Sun in its sole discretion by a change in the tenths digit in the Software
version number [x.(x).x.]
2. APPOINTMENT OF CUSTOMER
2.1 APPOINTMENT. Sun appoints Customer as a nonexclusive 'Authorized
Software Enterprise Partner' and grants Customer the nonexclusive and
nontransferable right to distribute Software to End Users in the Territory
identified in Schedule 1.
2.2 SOFTWARE CATEGORIES. Sun will segregate the Software in three (3)
categories (Level I, Level II, and Level III), as provided in Attachment A.
Level I Software do not require product training and authorization of Customer
by Sun to sell such Software. Customer must be trained and authorized by Sun to
sell Level II and Level III Software to its end user customers. Customer agrees
to successfully complete and pass all training and authorization obligations for
Level II and Level III Software offered by Sun.
2.3 GUIDE. The Guide sets forth additional terms and information
concerning special promotions and programs relating to the Sun Software Channel
Program. Customer may participate in the promotions and programs, provided that
Customer is in compliance with its other obligations under the Agreement, and
any other agreement with Sun or its affiliated companies, including payment and
reporting obligations. Certain Software as identified in the Guide, may only be
purchased from Sun Authorized Distributors. Customer will not advertise, sell,
lease, or ship Software outside the Territory without Sun's prior written
consent, which shall not be unreasonably withheld. Customer may not open
Software prior to delivery to End User. Sun has the right to change the Guide at
any time withhold notice. Changes to the Guide may be provided via the Channel
Web and Customer agrees to be bound by these changes. For Customers who do not
have regular access to the internet and Channel Web, printed copies of changes
to the Guide will be provided by Sun upon written request.
2.4 OBLIGATIONS. Customer agrees to: (a) actively market and support
Software; (b) follow up on any leads provided by Sun (which will be considered
Sun Confidential Information); (c) ensure that the marketing and support efforts
for Software are conducted identified and trained personnel within Customer who
have knowledge of Software and meet the training requirements the Guide; (d)
provide Sun on a quarterly basis with relationship planning document as
described in the Guide; (e) provide Sun monthly 'sales out' activity (including,
but not limited to, end user name and address, dollar volume, and type and
quantity of Software shipped; (f) submit a quarterly, non-binding forecast of
Customer's projected shipments for Software; and (g) not misrepresent Software
or make any representation or warranty inconsistent with the Master Terms, this
Software Exhibit or a BCL.
2.5 ELECTRONIC DISTRIBUTION. Customer may electronically distribute any
Software appearing on Attachment A, excluding Software pending Sun approval for
electronic distribution in the following Level II and Level III Software
categories: ISP Services Product Speciality, Network Security Product
Speciality, Messaging Product Speciality, Application Server Product Speciality,
and Portal Services Product Speciality. Prior to any electronic distribution,
Customer shall: (a) manufacture a secure, electronic version of the Product in a
digital wrapper or 'envelope'; (b) appropriate mechanisms to ensure that (i)
Customer can accurately secure and account for the number of electronic
downloads and (ii) electronic distribution occurs only as expressly set forth
herein and that such file transfer protocol (FTP), HTTP and/or SHTTP and/or
other agreed upon site shall not permit any other person or entity to download
or otherwise electronically access any Product except as expressly set forth
herein; and (c) institute systems to accrue payment hereunder for each copy of
Product prior to or contemporaneous with such distribution. Customer represents
and warrants that the secure wrapper oar 'envelope' cannot be unlocked and the
Product installed until the End User has registered with, and obtained an
authorized password or key from Customer.
2.6 LIMITED TERRITORY LICENSE. Customer may, on a case by case basis as
approved in advance in writing by Sun, and as part of its electronic
distribution service to U.S. end users, permit downloading to non-U.S.
subsidiaries or to other non-U.S. business sites in the European and
3. COMMERCIAL TERMS
3.1 REPORTING. Customer will provide to Sun a written [*] by the [*]
working day of each month that includes the [*] and other information
described in the Guide. Customer acknowledges that it will not receive
marketing funds unless it has met all point-of-sale requirements. In
addition, on the first business day of each calendar quarter, upon request
from Sun, Customer will provide Sun a [*] Customer will also provide a
completed relationship management document as described in the Guide. [*]
3.2 RETURNS. Commencing on the Exhibit Effective Date, on a
quarterly basis Customer may request to return for credit, a quantity of
Software (other than NFR Software) the net Fees for which will not exceed [*]
of the cumulative net Fees for Software shipped to Customer during the
immediately preceding quarter. Before returning any Software, Customer must
obtain from Sun a 'Return Material Authorization' (RMA). Customer must place
an offsetting order with Sun for Software of dollar value at least equal to
any credit issued hereunder. No more than [*] of all returned Software may be
in opened packages. Customer may not deduct the amount of any credit from
outstanding invoices. Customer will be responsible for paying
all freight and shipping charges for Software returned under this Section
3.3. Stock rotation is not available for discontinued Software.
3.3 PAYMENTS. For all Software purchased under this Software Exhibit,
Customer will pay Sun an amount equal to the Fee, less the applicable discount
set forth in SCHEDULE 1.
3.4 PRICE CHANGES. Sun reserves the right to change the Price List,
discounts and Fees for any Software [*]. Changes which result in decrease in
Fees will take effect [*]. In the event of a change which increase Fees, Sun
will provide Customer with [*] days prior written notice. If, during the term
of this Software Exhibit Sun decreases the Fee for any Software, Customer
will be entitled to a credit toward new orders for any Software placed within
[*] after announcement by Sun. This credit will be equal to the difference
between the new Fee and the Fee paid by Customer less any previous credit
provided, for the affected Software multiplied by the quantity of that
Software in Customer's inventory as of the date of the announcement. In order
to claim this credit Customer must, within [*] days of announcement of a
change which decreases Fees, supply Sun with a written report including: (a)
the identification of all affected Software which were in Customer's
inventory immediate prior to announcement of the decrease; (b) the net Fee
for this Software before and after the decrease and (c) other information as
Sun may reasonably request. Sun will issue the credit to Customer within
sixty (60) days from the date Sun receives the report. All orders for
Software scheduled for shipment or in transit to Customer at the time of the
announcement will be adjusted to the decreased Fee.
3.5 DELIVERY AND TITLE. Software purchase orders will be submitted to
Sun by Customer under the terms of the Software Exhibit and subject to a minimum
of Five Thousand Dollars ($5,000) per order. Sun will delivery Software Ex
Works, Sun facilities. Customer assumes all risk of loss or damage upon delivery
of Software. Customer acknowledges that it does not take title to Software, with
the exception of media and printed materials, but rather licenses Software under
the terms of this Agreement.
3.6 UPDATES, VERSION RELEASES AND SOFTWARE RELEASES. Fees are for the
Software releases current as of the Effective Date. Except as provided in
Section 4 of this Software Exhibit, Updates, Version Releases and Software
Releases may require additional payment and be subject to addition terms. Sun
may, without Customer's approval and without incurring any liability to
Customer, modify Software discontinue its manufacture, sale or support upon
thirty (30) days prior written notice to Customer.
4. UPGRADES AND OBSOLESCENCE
4.1 DIRECT PURCHASES ONLY. This Section 4 applies only to Customer's
purchase of Software directly from Sun.
4.2 UPGRADES. Subject to the terms below, Customer may upgrade unopened
Software in its inventory before the date Sun commences shipment of a new
Upgrade ('Commencement Date'):
(a) Updates from the immediately proceeding Update version
will be provided to Customer at no charge.
(b) Upgrades to a Version Release or Software Release from the
immediately preceding Version Release or Software Release will be provided to
Customer at no charge unless Sun increases its Fees for the new release. If Sun
increases its Fees, the new release will be made available to Customer at the
incremental price difference between the original Fee paid by Customer and the
Fee for the new release.
(c) To receive Upgrades under this Section 4, Customer must
provide Sun with a written request for the Upgrade, obtain an RMA and return
to Sun all Software to be upgraded. Customer will pay all shipping charges
for returned Software and Upgrades ordered under this Section 4. Sun will
credit Customer with the total amount Customer paid for the returned Software
if the return is accompanied by a firm order for the immediate delivery of
Upgrades whose total payment amount at least equals that of the returned
Software. Customer is limited to [*] upgrade requests for each Update,
Version Release and Software Release. The first request must be received by
Sun within thirty (30) days of the Commencement Date and the second request
within ninety (90) days of the Commencement Date. If Customer fails to make
the requests within the time frame described, Customer will no longer have
the right to upgrade Software under this Section 4.
(d) For a period of [*] days after Sun discontinues
offering Software, Customer will have the right, shipping prepaid and
retaining all risk of loss, to return the unopened discontinued Software to
Sun. Sun will credit Customer with the total amount Customer paid for the
discontinued Software if the return is accompanied by a firm order for the
immediate delivery of other Software whose total payment amount at least
equals that of the returned Software.
5. SUBSCRIPTION KITS
5.1 DISTRIBUTION OF SUBSCRIPTION KITS. Sun grants to Customer a
non-transferable, nonexclusive, limited license to distribute Subscription Kits
within the Territory. 'Subscription Kit' means tangible or electronically
downloadable materials for Licensed Products designated in the applicable Sun
price list as a Sun Software Subscription products and delivered in a kit form.
Subscription Kits contain (i) a certificate for the Sun Software Subscription
services entitling an End User to receive drop-shipments of upgrades for
Licensed Products directly from Sun; (ii) Sun Software Subscription services
program terms; (iii) End User registration and acceptance forms to be completed
and returned to Sun; and (iv) marketing collateral.
5.2 RESTRICTIONS. Customer may not open any Subscription Kit prior to
delivery to End Users. Customer may not sell or distribute Subscription Kits
unless the End User has first provided satisfactory proof of its license for the
most current version of the Licensed Products. Proof of End User's current
license will be satisfied by the End User showing Customer copies of its license
or install disk, cover page of the install disk manual or other form of proof
satisfactory Sun that End User is licensed to the current version level.
Subscription Kits may be purchased only from Authorized Distributors or Sun.
5.3 RETURNS. In the event an End User does not accept terms provided
in the Subscription Kit and elects within [*] days of purchase to return the
Subscription to Customer, Customer must accept return of the Subscription Kit
and refund the fees paid by End User. Customer may return, shipping prepaid,
to the Authorized Distributor from which the Subscription Kit was purchased,
the Subscription Kit returned by the End User for a refund of the fees paid
by Customer, provided, however, that: (i) the Subscription Kit was properly
returned to Customer by the End User within [*] days of its purchase; and
(ii) Customer requests and has received a Return Material Authorization
('RMA') number from the Authorized Distributor within five (5) business days
of the Subscription Kit's return by the End User to Customer.
5.4 OTHER PROGRAMS. Any additional subscription offerings and
requirements are set forth in the Guide.
6. NOT FOR RESALE SOFTWARE
6.1 PURCHASE. As part of the Sun Software Channel Program, Customer may
obtain not-for-resale copies Licensed Products ('NFR Software'). Licensed
Products available as NFR Software are designated on the Channel Web and may be
ordered only from Authorized Distributors and Sun. Customer may use no more than
one (1) copy of each NFR Software at each Customer business location (including
field sales offices). Each location at which NFR Software is used must be
staffed with Customer employees who have met all applicable training, testing
and authorization requirements set forth in the Guide.
6.2 LABELING AND USE. NFR Software must at all times clearly labeled
'Not For Resale Software' and may be used only for purposes of internal staff
training, presales support, customer demonstrations and Sun approved marketing.
6.3 DESTRUCTION OF NFR SOFTWARE. Applicant must destroy NFR Software:
(i) upon notice that the NFR Software has been discontinued or is available as a
new revision release or (ii) if it is no longer being used on a regular basis by
Applicant for the purposes described in Section 6. To obtain new revision
releases of NFR Software, Applicant may provide Authorized Distributor or Sun
with written certification that the NFR Software has been destroyed.
6.4 RESTRICTIONS. Applicant may not use the NFR Software development of
software programs; nor copy, resell or distribute the NFR Software to any third
party. In addition this Section 6, Applicant's use of NFR Software is further
subject to the terms of the BCL which accompanies the software.
During the term of this Agreement, Customer will provide prospective
End Users with complete pre-sale support, and End Us with post-sale support as
provided in the Guide.
8. SUN SOFTWARE CHANNEL PROGRAM WEB SITE
Subject to the following, Sun will provide Customer with an account
login, password and the site URL for the Channel Web.
8.1 USE OF WEB CONTENTS. Title to and ownership in all products,
including software products, documents and other program information contained
in the Channel Web ('Web Contents') will solely and exclusively be and remain in
Sun and its licensors. Customer may use Web Contents only for: (a) its internal
evaluation purposes and (b) at its primary business facility. If the software
products accessed as part of Web Contents contain third party code, Customer's
use of the products may be subject to additional terms. Customer is not
authorized to make any modifications or revisions to Web Contents nor distribute
Web Contents to any third party. Customer will indemnify Sun from all liability,
expense, and damage of any type arising from Customer's violation of this
8.2 NO SUPPORT FOR WEB CONTENTS. Customer acknowledges that Sun is not
obligated to make any of Web Contents available as a final Sun product. Sun
retains the right to make any modifications or changes to Web Contents at any
time without prior notice to Customer. Web Contents are provided strictly on an
'AS IS' basis. Customer acknowledges that no support will be provided by Sun for
the software product(s) contained in the Web Contents.
9. WARRANTIES AND DISCLAIMER
Sun warrants that for a period of ninety (90) days from Customer's
receipt of Software provided under this Software Exhibit the media on which the
Software is furnished will be free of defects in materials and workmanship under
normal use. Customer's exclusive remedy and Sun's entire liability under this
limited warranty will be for to replace the Software media.
10. ADDITIONAL LIMITATIONS
IN NO EVENT WILL ANY ENTITY WORKING WITH SUN THE DEVELOPMENT AND SUPPLY
OF ANY LICENSED PRODUCT OR PART THEREOF BE LIABLE UNDER THIS AGREEMENT.
11. TERM AND TERMINATION.
This Software Exhibit will commence upon the Software Effective Date.
Unless earlier terminated as provided in the Master Terms, this Software Exhibit
will remain in effect until the date established in following schedule:
EFFECTIVE DATE EXPIRATION DATE
(OF THE FOLLOWING YEAR)
July 1 - September 30 September 30
October 1 - December 31 December 31
January 1 - March 31 March 31
April 1 - June 30 April 30
IN WITNESS WHEREOF, the parties have authorized their representatives
to execute this Software Exhibit effective as of the Effective Date written
SUN MICROSYSTEMS, INC. INTRAWARE, INC.
By: /s/ Alton D. Page By: /s/ Donald M. Freed
Name: Alton D. Page Name: Donald M. Freed
(printed or typed) (printed or typed)
Title: VP Operations Title: EVP/CFO
Effective Date: 8/31/99 Effective Date: 8/31/99
TO SOFTWARE EXHIBIT
1. Territory: United States and Canada
2. Discount Schedule: Customer's discount for the Sun-Netscape Alliance
Software shall be [*] off the MSRP as set forth in the Sun-Netscape Alliance
Price List for the first [*] of revenue from fees. Customer's discount for
revenue in excess of [*] shall be [*] off the MSRP as set forth in the
Sun-Netscape Alliance Price List.
3. Discretionary Rebates/Offset: If and to the extent Sun makes
available to its resellers a discretionary rebate program to which Customer,
as a Sun reseller would be entitled, then the rebate will not initiate until
it exceeds [*]. In the event Customer is entitled to such rebate, then Sun
will only be obligated to pay a rebate in the amount that exceeds [*].
4. 'Accumulated Savings' is calculated as [*] of MSRP, as set forth in
the Sun-Netscape Alliance Price List, of Products sold by Customer plus the
total of discretionary rebates forfeited by Customer at any point in time.
Accumulated Savings shall not exceed [*]. As of September 30, 2000, or
sooner, if terminated, if the Accumulated Savings is not equal to [*],
Customer will remit to Sun an amount equal to the difference between the
Accumulated Savings and [*], or the prorated portion thereof, within thirty
days from September 30, 2000 or the date of termination. This provision shall
survive termination of the Agreement.
5. Co-op Accrual Program: Customer will accrue [*] Co-op funds on
Alliance Software net revenue sold, and be eligible to access Market
Development Funds pursuant to the Guide.
ALLIANCE PRODUCTS - LEVEL I, LEVEL II AND LEVEL III
I. LEVEL I ALLIANCE PRODUCTS(S)
Netscape Directory Server
Netscape Certificate Management System
Netscape Delegated Administrator
Netscape Directory for Secure E-Commerce
Netscape Process Manager
Netscape Calendar Server
Netscape Messaging Server
Netscape Messaging Server Hosting
Netscape Hosting Suite
Netscape Enterprise Server
Netscape FastTrack Server
Netscape SuiteSpot Standard
Netscape SuiteSpot Professional
II. LEVEL II AFFIANCE PRODUCT(S)
ISP SERVICES PRODUCT SPECIALITY
Solaris ISP Server
NETWORK SECURITY PRODUCT SPECIALITY
SUITESPOT PRODUCT SPECIALITY
Netscape SuiteSpot (Standard/Professional)
III. LEVEL III ALLIANCE PRODUCT(S)
MESSAGING PRODUCT SPECIALITY
Sun Internet Mad Server
Sun Calendar Server
APPLICATION SERVER PRODUCT SPECIALITY
Netscape Application Server
Netscape Application Builder
Netscape Extension Building
Netscape Extension for MQSeries
Netscape Extension for Tuxedo
Netscape Application Server for R/3
Netscape Application Server for CICS/MS
NetDynamics Application Server
NetDynamics PAC for COM
Net Dynamics PAC for SAP
NetDynamics PAC for PeopleSoft
NetDynamics PAC SDK
Net Dynamics Developer Studio
E-Commerce Product Speciality
Netscape ECXpert Enterprise
Netscape ECXpert Extension for MQSeries
Netscape ECXpert Extension for Oracle Applications
Netscape ECXpert Extension for SAP R/3
Netscape ECXpert Mercator Authoring Tool
Netscape ECXpert SAP R/3 Authoring Tool
PORTAL SERVICES PRODUCT SPECIALITY