Exhibit 10.20
Relationship Agreement
This Relationship Agreement (Agreement) is made and entered into as of the
31st day of December, 1997 by and between Effective Management
Systems, Inc., a Wisconsin corporation, through its Intercim division with
offices at 501 East Highway 13, Burnsville, MN 55337 (Intercim) and CIMx,
an Ohio Liability Company with offices at 400 TechneCenter Drive,
Cincinnati, OH 45150(Cimx).
Recitals:
Intercim and Cimx desire to enter into a relationship that leverages their
respective products and services in such a way as to provide superior
solutions to the manufacturing marketplace.
Both parties have a operating philosophy that i) makes customer
satisfaction their highest priority, ii) maintains the highest levels
of integrity, and iii) pursues excellence in products and services.
Cimx is engineering centric' with a focus and domain expertise on the
manufacturing engineer while Intercim is manufacturing centric' with
a focus and domain expertise on the production manager.
Definitions. The following terms, when used in this Agreement shall have
the following meanings
"Products" means the application software, in object code form only, as
updated from time to time and released for general use, including the
official user documentation, in whatever media, released for general
use with the application software, all as more particularly set forth
on the attached Exhibit A, which is incorporated herein by this
reference.
"Support" means the support assistance provided relating to the Product on
an annual basis, such as telephone support and updates, including
corrections.
"Services" means the services provided on a time and materials, project by
project basis, relating to the Products, such as installation,
consulting, training, and modifications.
Authorizations.
Cross Licensing. Each party hereby grants the other the non-exclusive,
non-assignable, right to market the other's Products and sell its
Services, utilizing agreement forms which comply with and are subject
to the terms and conditions herein set forth. Each party reserves
the right to decline any specific engagement for business reasons. To
the extent any proposed license of the other's Product involves use
outside the United States, the obligation to comply with any
applicable export or import restrictions are those of the user first
and the party obtaining the business second. Each parties' License
Agreement attached as Exhibit C. All payments and currency
conversions will be in U.S. dollars. All contracts will be in
English language.
Commitments.
Engagement Registration Process. The procedures for notifying the Product
owner of a prospect obtained by the other party and the resulting
classification of such prospect for purposes of compensation are as
set forth on the attached Exhibit B, which is incorporated herein by
this reference. However, in case of a conflict as to priority of
registration for compensation classification, the party who gave the
first Product demonstration prior to a registration shall control.
Source Code Escrow. Having in mind the parties' above referenced highest
priority of customer satisfaction, each party will place their
respective Product's source code in escrow with NBD Bank, N.A. of
Indianapolis, IN or such other third party as they may agree, at
their own cost, under the same form of escrow agreement which shall
provide for source code release in the event that the party becomes
insolvent or is unable or unwilling to support or competitively
develop their Product.
Sales Effort and Collateral. Both parties will develop and maintain their
capability to market and sell the other party's Products consistent
with effective high quality industry standards. Both parties will
make available to the other any sales and marketing collateral,
including demonstration copies, as may be reasonably requested.
Product Support. Both parties will develop and maintain their
capabilities to provide technical first line support for the other
parties' Products they license consistent with high quality industry
standards. Each party will provide reasonable back up support on its
own Products where the other was the seller and is the first line
support provider.
Each Other's Practices, Customers, and Statements. Each party will use
its best efforts to understand and respect the other party's business
practices and customer commitments and obligations not in conflict
with the express rights and obligations herein set forth. Consistent
with this provision and the Recitals above, neither party will make
any statements, warranties, or representations with respect to the
other party, its Products, Support, Services, or operations except as
authorized and in furtherance of this Agreement.
Periodic Meetings and Reports. The parties will meet periodically each
year for the purpose of reviewing all aspects of this relationship
and ongoing planning and cooperation efforts.
Training. With respect to selling and technical support capability, each
party will provide, without a training charge, two day courses to the
other party's sales people and three day courses to the other party's
support people who will be acting as such with respect to the
training party's Products.
Payments.
4.1 Amounts. Amounts owing the Product owner on Product, Support, and
Services sold by the other are due in the proportions called for under
Exhibit B from all receipts of payments as and when received by the
seller.
Term.
Initial Term. The initial Term of this Agreement shall be one year.
Renewal. This Agreement shall automatically renew for additional one year
Terms unless terminated in writing at least 90 days in advance of the
end of any given Term.
Non-Exclusivity and Non-competition.
Non-Exclusivity. Nothing in this Agreement will preclude either party
from entering into similar relationships with other parties in the
same technology or business; however, any party doing so must first
give the other party 60 day written notice of its intent to do so.
Non-Competition. Neither party will develop a feature/function capability
that would be considered to be in the domain expertise of the other
party, as referenced in the recitals above, without first giving the
other party 60 day written notice of its intent to do so.
Warranty, Remedy, and Limitation of Liability.
Warranty. The parties warrant that their respective Products will perform
in substantial compliance with the material written product
specifications as set forth in user documentation materials supplied
with the Product to customers, for one year from the date of license.
Corrections. The parties will promptly, upon written notification of a
breach of the above warranty, work to resolve the problem. If unable
to resolve within a reasonable period of time, the party owning the
product in question will offer to refund the entire license and any
services fees received from the client in question. Prompt and
reasonable effort depends upon the severity of the problem to the
customer's operations.
Infringement. Each party warrants and represents that its Product,
including the documentation and collateral provided hereunder, does
not infringe the U.S. property rights of any third party and that it
will indemnify and hold the other and its licensees harmless from any
and all costs it incurs in connection with any such claim so long as
such indemnified party promptly advises it of such a claim, turns
over defense of such claim, and cooperates in the defense of any such
claim.
No Consequential Damages. Except as set forth above, there are no other
warranties, express or implied, pertaining to the matters covered in
this Agreement, and all such other warranties, including those of
fitness for a purpose and merchantability, are hereby disclaimed. In
no event shall either party be liable for any consequential, general,
or special damages even though the parties may be aware of the
possibility of such damages. In the event of a non-warranty breach
of this Agreement by either party, the breaching party's sole
obligation and the other's sole recovery shall be for its actual
damages, not to exceed any fees it actually paid the breaching party
pursuant to this Agreement.
Confidentiality and Proprietary Property.
Confidentiality. The parties acknowledge that their Products,
documentation, business operations and plans, and other information
which they will exchange and become aware of during the course of
this relationship contain confidential and Trade Secret information.
Each will maintain this information as confidential, treating it at
least as carefully as it would its own confidential and Trade Secret
information, and will only use it as authorized in the furtherance of
this Agreement and will only disclose it to those in a need to know
who are subject to a written confidentiality agreement consistent
with this provision. Products provided to Licenses for internal use
is not a breach of confidentiality.
Proprietary Property. Each will use reasonably and normal efforts to
procedurally protect the proprietary information of the other through use
of proprietary notices and legends as requested. Each will notify the
other of any suspected violations of the other's property rights by third
parties that it becomes aware of. Neither will lay claim to the other's
proprietary property.
Public Disclosure. The parties will consult with each other before any
public disclosure of information regarding the other.
9. Dispute Resolution Procedure.
Management Effort. If a dispute arises between the parties arising out of
or relating to this Agreement and the performance of their respective
obligations hereunder, they shall first advise the other in writing
of the matter and management of each shall meet to attempt to resolve
the matter before taking any other action.
Arbitration. If the parties are unable to resolve a dispute as above, it
may only be settled in accordance with the Commercial Rules of the
American Arbitration Association at the location closest to the party
against whom the claim is filed and judgment upon any award rendered
by the arbitrator may be entered in any court having jurisdiction
thereof.
10. Termination.
Termination Procedures. Both parties may terminate this Agreement upon 90
days written notice for convenience, and may terminate it upon 30
day written notice and cure period for other material breach except
that, if the reason for termination is breach of confidentiality,
insolvency, or failure to pay sums due, the notice and cure period
shall be 10 days.
After Termination. If the termination is for convenience, the party which
did not choose to terminate the Agreement shall be able to complete,
within a reasonable amount of time, all sales efforts in process
where the prospect had received a demonstration of the Product prior
to such notice. No termination will affect the rights previously
granted to third party licensees in accordance with the terms of this
Agreement. All ongoing obligations to such licensees shall continue
to be performed by the party who made the sale.
11. General Provisions.
Each Other's Employees. Neither party will directly or indirectly
solicit, encourage, or hire any employees of the other during and for
one year after the termination of this Agreement without the written
consent of the other.
Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to its subject matter, superseding any prior
proposals or agreements, whether oral or written, all such prior
agreements or understandings being hereby revoked. Any changes to this
Agreement must be in writing, signed by the parties, and reference this
Agreement.
Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed by and construed in accordance with the
laws of the State of Minnesota.
Further Actions. The parties agree to take any and all further actions,
including the execution of documents required to fully effect the
provisions and intent of this Agreement.
In Witness Whereof, each party represents that it has full power and
authority to enter into and perform this Agreement, that the person
signing on behalf of each party has been properly authorized and empowered
to do so, and that each has carefully reviewed it and consulted with such
experts as each deemed necessary.
Cimx: Intercim:
By: ____________________________ By: ____________________________
Name: Anthony Cuilwik Name: Joseph Poirier
Title: President Title: President, CEO
Exhibit A
Products:
Intercim Products:
FACTORYnet/R/ (Advanced application software, an integrated information
management system for the entire factory floor
Cimx Products: [ " " ]
CS/CAPP( Client Server/Computer Aided Process
Planning
CS/TOOL( Client Server/Tool Management
QCAP( Quality Characteristic Accountability
Planning
ShopBrowser( Web Enabled Shop Floor Viewing
Best Practice Implementor( Generative Planning
Exhibit B
Registration Process:
For those engagements that are applicable to this agreement, both parties
will maintain a joint customers/prospects list identifying:
1. The type of engagement (per table 1)
2. The registering party
3. An estimate of each parties products and services involved in the sale
4. The next action needed to close the sale
The joint list will be updated monthly, or as required, should a
significant change occur.
It is the responsibility of each party to notify the other party whenever
a change or update is required.
Table 1
Engagement Nature of Engagement Compensation Services
Prime/Sub Both parties have been 10% to 20% of the The prime will uplift
involved in the selling product, depending the standard rates by
cycle. The customer on the level of 25% to 35%. The prime
wishes to have a single support provided, will provide "level 1
point of accountability as compensation to support".
through one party, or Prime on sale of
it is determined that Subs' product.
this is the best way of
serving this customer.
OEM Either company acting 50% of the product Services provided to
as an agent of the gross revenue paid the other party at
other sells a deal that to agent who sells standard rates.
includes both parties it.
products.
Leads Either company finds an 5% on product 0% on N/A
opportunity that does services paid to
not include their company providing
products and/or decides the lead.
not to pursue the
engagement.