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ITEM 4
EXHIBIT 10.24
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DATED 8 JANUARY 1996
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SYNON DEUTSCHLAND GmbH (1)
- and -
CGI INFORMATIK GmbH (2)
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NON EXCLUSIVE
INTERNATIONAL DISTRIBUTORSHIP AGREEMENT
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INDEX
1. DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. APPOINTMENT OF DISTRIBUTOR: RELATIONSHIP BETWEEN THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . 4
3. UNDERTAKINGS OF SYNON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. UNDERTAKINGS OF THE DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. PRODUCT ORDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. PRODUCT LICENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. PRICE, PAYMENT AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. TRADE SECRETS AND PROPRIETARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9. USE OF TRADE NAMES AND TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
11. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
13. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Part I - The Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Part II - Price Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
The Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
APPENDIX C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Sales Quota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
APPENDIX D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Form of Current Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
APPENDIX E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
The Maintenance Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
APPENDIX F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Form of License and Maintenance Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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THIS DISTRIBUTION AGREEMENT is made the 8th January 1996 BETWEEN:
(1) SYNON DEUTSCHLAND GmbH a company registered with the Amtsgericht
Darnstadt as number 6265 with a place of business in Germany at Im
Leuschbnerpark 3, 64347 Griesheim ("Synon"); and
(2) CGI INFORMATIK GmbH a company organised and existing under the laws of
Germany having its principal place of business located at Hardt9-11,
40764 Langenfeld ("the Distributor")
RECITALS:
(A) Synon develops, markets, installs, licenses and supports certain
proprietary computer software products (consisting of programs and
related documentation).
(B) The Distributor markets and supports computer Software products in the
Territory (as defined herein) and is knowledgeable of the market for
the Products (as defined herein) in the Territory.
(C) Synon and the Distributor desire to enter into this Agreement
authorising the Distributor to promote, market and support the Products
to End Users (as defined herein) in the Territory upon the terms and
provisions stated herein.
The parties intending to be legally bound,
HEREBY AGREE as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement except where there is a specific provision to the
contrary or where the context otherwise requires, each of the expressions set
out below shall bear the meaning ascribed to it below:
"Affiliate" - in relation to either party means
any person, company, partnership or
other entity controlled by,
controlling, or under common control
with that party
"Change of Control" - of the Distributor shall be deemed
to have occurred if any third party
acquires de facto control of, or
more than 50% of, the voting shares
then issued of the Distributor
"Confidential Information - any information developed, owned or
controlled by Synon which Synon
treats or maintains as confidential,
proprietary, restricted or disclosed
generally (including without
prejudice to the generality of the
foregoing information and knowledge
that pertains to the Products).
Confidential Information, however,
shall not include: (i) information
in the public domain at the time of
disclosure, (ii) information
published after disclosure (unless
such publication is breach of this
Agreement), (iii) information shown
to have already been in the
Distributor's possession prior to
disclosure by Synon, and (iv)
information disclosed by a third
party, as a matter of right, without
restrictions on disclosure and use
"Documentation" - information recorded or otherwise
stored in any type of media, in
whatever form or notation, which
documents the design or details of
software, explains the capabilities
of it, provides operating
instructions, problem descriptions,
and similar material that aids in
understanding, completion, or
application of it, provides general
or special education or instructions
with respect to it, or documents
different or various configurations
of it
"End User" - a person or entity which has
indicated to the Distributor an
interest in licensing one or more of
the Products within the Territory
"Licensee" - any End User which is grated a
sub-license by the Distributor to use
one or more of the Products
"Licence Agreement or
Maintenance Agreement" - a sub-licence agreement between the
Distributor and each licensee or any
maintenance agreement between the
distributor and the user of any
product within the territory both in
a form attached to this Agreement as
Appendix F (as revised or amended
from time to time by the parties in
accordance with sub-Clauses 6.1 and
6.2 of this Agreement respectively)
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"Products" - authorised copies of those computer
software programs listed in Appendix
A (as revised or amended from time
to time by the parties in accordance
with sub-Clause 5.6) as such
products are varied from time to
time by Synon, and related
Documentation (as defined above)
"Territory" - the country or countries or
geographic areas stated in Appendix B
to this Agreement
"Trademarks" - the name "SYNON" and any trademark,
service mark or other commercial
designation, whether or not
registered, used to represent or
describe the products or services of
Synon, including the Products, and
shall include those trade names,
trademarks, service marks, trademark
or service mark registrations, and
pending applications for such
registrations, registered or filed
in any part of the world which are
or may hereafter be owned by Synon
1.2 Additional terms are defined elsewhere in this Agreement and shall
have the respective meanings so ascribed thereto throughout this
Agreement.
1.3 In this Agreement except where there is a specific provision to the
contrary or where the context otherwise requires any reference to:
(a) a "person" shall be construed as a reference to any person,
firm, company, corporation, government, state or agency of a
state or any association or partnership (whether or not having
separate legal personality) of two or more of the foregoing
(b) a Clause, sub-Clause or Schedule or Appendix shall be
construed as a Clause or sub-Clause of or a Schedule or
Appendix to this Agreement and the Schedule and Appendices
form a part of and are deemed incorporated into this
Agreement.
1.4 Clause headings are for ease of reference only.
2. APPOINTMENT OF DISTRIBUTOR: RELATIONSHIP BETWEEN THE PARTIES
2.1 GRANT OF DISTRIBUTION RIGHTS
(a) Synon hereby grants to the Distributor the non-exclusive right
to purchase (by way of licence) Products from Synon for sub-
licensing to End Users in the Territory, and the Distributor
agrees to so purchase the Products exclusively from Synon and
to support the Products, for the term set out in Clause 10 and
subject to and in accordance with the provisions of this
Agreement.
(b) The Distributor may appoint sales agents for the purpose of
obtaining orders of the Products on behalf of the Distributor
after receiving Synon's prior written consent thereto in
accordance with sub-Clause 13.1 hereof.
(c) The Distributor shall promptly inform Synon in writing, of
changes in its underlying ownership and structure at every
level and in particular of any proposed Change of Control.
2.2 EQUIVALENT PRODUCTS
The Distributor warrants that neither it nor any of its Affiliates
produces goods that are identical or equivalent to the Products. The
Distributor agrees that should it or any of its Affiliates undertake
such production during the term of this Agreement or any renewal
thereof, either through a start up venture or as a result of an
acquisition or merger anywhere in the world, the Distributor shall
promptly notify Synon of such undertaking and Synon shall have the
right to immediately terminate this Agreement upon giving written
notice to the Distributor.
2.3 PARALLEL IMPORTS
The parties hereby acknowledge that nothing contained herein shall
oblige Synon to take any actions to impede parallel imports of the
Products into the Territory. Neither party shall make it difficult for
wholesalers or other customers in the Territory to obtain the Products
from other suppliers within the European Community (the "EC") or,
insofar as no alternative source of supply is available from within
the EC, from outside the EC.
2.4 RELATIONSHIP BETWEEN THE PARTIES
The relationship between Synon and the Distributor under this
Agreement is that of licensor and licensee. Neither the Distributor
nor its officers, employees or agents are or will be deemed to be the
agents or representatives, legal or otherwise of Synon for any purpose
whatsoever. Neither the Distributor nor its officers, employees or
agents, are granted by this Agreement, or otherwise, any express or
implied right or authority (neither shall the Distributor nor its
officers, employees or agents take any action which would have the
effect of creating the appearance of such authority) to assume or
create any obligation or responsibility on behalf of or in the name of
Synon or to bind Synon in any manner whatsoever. The Distributor, its
officers, employees and
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agents shall not act or purport to act as agents or representatives of
Synon when (a) endeavouring to make sales of Products under the terms
of this Agreement, (b) supporting Products, (c) executing Licence
Agreements with customers (d) dealing with employees or third parties
(e) executing Maintenance Agreements or (f) undertaking any other
activity, related or unrelated to this Agreement. The Distributor
agrees to adopt such descriptive titles in the Territory as are
acceptable to Synon to convey to the public the limited rights
conferred upon the Distributor by this Agreement.
2.5 CAPACITY
The Distributor warrants that it is legally qualified and authorised
in the Territory to market, license and support the Products as
contemplated by this Agreement.
3. UNDERTAKINGS OF SYNON
3.1 DUTIES OF SYNON
Synon agrees to provide to the Distributor, from Synon's executive
offices the following materials and technical support services, which
shall be provided in the English Language (unless the parties agree to
different language) and in accordance with Synon's standard operating
procedures
(a) the number of Products ordered by the Distributor pursuant to
this Agreement;
(b) a sufficient number of Product fixes, Product enhancements and
Product releases authorised for distribution to Licensees as
required by Licence Agreements, or customers as required by
Maintenance Agreements, entered into with respect to the
Territory or one copy thereof for copying by the Distributor
solely for distribution to Licensees and customers in
accordance with the terms of Licence Agreements and
Maintenance Agreements, as aforesaid;
(c) copies of all relevant promotional materials that Synon
develops from time to time to assist the Distributor in
promoting the Products in the Territory;
(d) the training of the Distributor's employees who will be
responsible for training the Distributor's sales and technical
support personnel; and
(e) reasonable "second level" technical consultation and advice to
the Distributor's technical employees concerning the
installation and operation of the Products, including, but not
limited to, identification and resolution of Product "bugs".
3.2 STANDARD OF PERFORMANCE
Synon agrees to use its reasonable endeavours to provide the
Distributor with the materials and technical support services
described in sub-Clause 3.1.
3.3 PRODUCT WARRANTY AND LIABILITY
(a) Synon warrants to the Distributor that, at the time of
delivery to the Distributor and for ninety days thereafter,
each Product, Product fix, Product enhancement and new Product
release shall be free from defects in workmanship and
materials and shall perform substantially in accordance with
applicable product specifications. The Distributor's remedy
with respect to any breach of this Product warranty shall be
limited to the prompt repair or replacement of such item at
Synon's expense. The repair or replacement of any such
Product is conditional on the Distributor giving prompt notice
to Synon of any such fault, together with full information and
fully documented examples thereof and the fault not being
attributable to a malfunction of equipment or software other
than the Products. The foregoing product warranty is in lieu
of all other warranties, written or oral, express or implied
(which are hereby excluded), including, but without limitation
of the generality of the foregoing, the implied warranties of
merchantability and fitness for a particular purpose, whether
imposed by contract, statute, course of dealing, custom or
usage or otherwise. The remedies under this warranty are
exclusive and Synon neither assumes nor authorises anyone to
assume for it any other obligation.
(b) Except as specified in this sub-Clause 3.3 Synon shall not be
liable to the Distributor (or to any Licensee or End User) in
contract, tort, negligence or otherwise for any loss or damage
that may arise in connection with the delivery, installation,
use or performance of the Products, in excess of the amount
paid therefore by the Distributor.
(c) In no event shall Synon suffer any liability in contract,
tort, negligence or otherwise arising out of or in connection
with this Agreement, for any indirect, special, incidental,
economic or consequential loss or damage, including, without
limitation to the generality of the foregoing loss of profits,
business, contracts or anticipated savings even if Synon has
been advised of the possibility thereof.
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(d) The above warranty shall constitute the sole remedy of the
Distributor and the sole liability of Synon whatsoever, and
the Distributor hereby waives all other remedies, warranties,
guarantees, causes of action or claims, express or implied,
arising by law or otherwise against Synon. Nothing in this
Agreement seeks to or does exclude or limit the liability of
Synon for death or personal injury arising from its
negligence.
(e) Synon shall in no event be responsible or liable for
modifications made to the Products, or any of them, by the
Distributor or others, or for damage caused thereto by
negligence, accident or improper use or installation by the
Distributor or others.
(f) Each paragraph and provision of this sub-Clause 3.3 excluding
or limiting liability shall be construed separately,
continuing and surviving even if for any reason one or other
of those paragraphs or provisions is held inapplicable or
unenforceable in any circumstances and shall remain in force
notwithstanding the termination or expiration of this
Agreement.
3.4 INFRINGEMENT INDEMNITY
Synon agrees to indemnify and hold the Distributor harmless from any
final award of costs and damages against a Licensee for any action
based on infringement of any patent right or copyright as a result of
the use of the Products under the terms and conditions specified in
the Licence Agreement and under normal use; Provided that Synon is
promptly notified in writing of any such suit or claim against the
Distributor (to which the Distributor shall not make any admission)
and Further Provided that the Distributor permits Synon to defend,
compromise or settle the same and gives Synon all available
information, assistance and authority to enable Synon to do so. The
foregoing states the entire liability of Synon with respect to
infringements of any copyrights or patents by the Products or any part
thereof.
4. UNDERTAKINGS OF THE DISTRIBUTOR
4.1 DUTIES OF THE DISTRIBUTOR
In addition to its other duties specified herein, the Distributor
agrees to use its best endeavours to promote, distribute and support
the Products within the Territory as follows:
(a) to advertise the Products in appropriate commercial
advertising media to identify and contact End Users in person
and by telephone and direct mailings, and to advise End Users
on the specifications, selection, use, functionality and
price/performance characteristics of the Products;
(b) to provide a telephone helpline service for all Licensees
during normal business hours in the Territory (Public and Bank
Holidays excepted) and to provide technical support concerning
the installation and operation of the Products and the
identification and resolution of Product "bugs" to Licensees
and to End Users evaluating the Products, and in that regard,
to maintain an adequate number of experienced personnel who
are properly trained to provide such support and maintenance
services in the products;
(c) to distribute the Products, Product fixes, Product
enhancements and new Product releases to licensees in a timely
fashion;
(d) to maintain reasonably detailed records, including prospect
records, concerning End Users, Licensees, Product licensing,
financial data and such other information as Synon may
reasonably request (including details of what hardware the
Products are used on/with by Licensees) concerning the
Distributor's performance of its duties hereunder and
forthwith on having a Licence Agreement or a Maintenance
Agreement signed by a customer to provide details of that
Agreement to Synon in such a format as Synon shall request and
such other information relating to that Agreement as Synon
shall request. The provisions of this paragraph (d) shall
continue for 12 months following termination or expiration of
this Agreement;
(e) to notify Synon promptly of any Product "bugs" or other
unresolved technical problems arising in connection with the
installation or use of the Products;
(f) to maintain properly equipped and located premises with
suitable fixtures and a competent marketing personnel
dedicated to the promotion of the Products;
(g) effectively to develop and promote the marketing the Products
in the Territory and in that regard prior to the date of this
Agreement in respect of the balance of that year and
thereafter prior to the commencement of each calendar year in
respect of the immediately following year the distributor
shall submit to Synon for Synon's approval a proposed
marketing plan including a forecast of sales for the
immediately following calendar year.
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(h) to acquire one networked computer system on which the Products
will operate and at least one copy of each of the Products for
use in training personnel, conducting demonstrations of the
Products and internal use by the Distributor, at the prices
specified in sub-Clause 7.1(a) below. The Distributor having
purchased the aforesaid one copy will be issued with up to
three temporary authorisation codes to use the Products solely
for the purposes of training and demonstration as aforesaid.
On termination or expiration of this Agreement for whatever
reason the distributor will be granted one permanent
authorisation code to use the product in accordance with the
standard Synon Licence Agreement (Appendix F);
(i) to offer and provide those maintenance services set out in
Appendix E in the Territory in respect of the Products, by
Synon trained personnel;
(j) to notify Synon as soon as a Maintenance Agreement is
terminated or if sooner as soon as it receives notice of such
termination;
(k) The Distributor shall upon Synon's instructions and in
accordance with a reasonable timescale perform National
language translations for new releases of existing products
and any new products to be added to Appendix A. Ownership of
all translations rests with Synon in accordance with Clause 8
and the Distributor hereby assigns Synon by way of future
assignment all copyright and other intellectual property
rights that exist in or relate to the said translation of the
software.
4.2 In connection with the foregoing the Distributor hereby specifically
agrees as follows:
(a) Exclusive Purchasing Obligation
The Distributor shall not, for the entire term of this
Agreement and any extension thereof, and without the express
written consent of Synon, obtain the Products for distribution
and sale in the Territory from anyone other than Synon.
(b) Competing Products
Neither the Distributor nor any of its Affiliates shall,
during the entire term of this Agreement and any extension
thereof, without the express prior written consent of Synon,
either for its own account (including as a manufacturer,
distributor, representative, agent or consultant) or as a
partner, joint venture or shareholder (other than as a
beneficial holder of not more than 5% of the voting shares or
stock of a publicly traded company) in another entity, engage
in the manufacture, sale, lease, marketing or distribution in
the Territory of products that compete with the Products.
(c) Obligation to Sell
Distributor shall not without an objectively justified reason
refuse to supply potential customers located within the
Territory who cannot otherwise obtain the Products on suitable
terms.
(d) Personnel
The Distributor represents that it will continue to have at
all times throughout the term of this Agreement, an adequate
number of properly trained and competent sales, installation
and service personnel. Synon may, at its discretion, provide
sales, installation and/or service training courses to assist
employees of the Distributor in their sale and/or service
Products. If Synon provides such training courses, the
Distributor shall require its personnel performing functions
covered by any training course to attend the said courses.
All costs or expenses incurred by the Distributor in attending
or participating in such training courses shall be for the
account of the Distributor. Synon shall not be liable to
reimburse the Distributor or its employees for transportation
or any other expenses incurred in attending such training
courses.
(e) Stock of Products
Distributor shall maintain during the term of this Agreement
an adequate stock of Products for sub-licensing within the
Territory as agreed between the Distributor and Synon.
(f) Sales Quotas
The Distributor confirms that during the term of this
Agreement, it will use its best endeavours to ensure that the
sales quota set out in Appendix C is varied from time to time
in accordance with Appendix C, shall be met.
(g) Sales Meetings
The Distributor shall arrange for the attendance (at its cost)
of a specified number of delegates who are responsible for the
performance of this Agreement at all distributor sales
meetings held by Synon of which it is notified. The
Distributor shall not be obliged to send a delegate to such
sales meetings more than once a quarter.
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which it is notified. The Distributor shall not be obliged to
send a delegate to such sales meetings more than once a
quarter.
(h) Promotional Material
The Distributor shall produce education, advertising and sales
literature and brochures promoting the Products in the
Territory. All such promotional material shall be disclosed
to Synon for its approval prior to publication. The
Distributor shall make such amendments, inclusions, deletions
and variations thereto as Synon shall reasonably request and
shall only publish the same with Synon's prior written
approval.
4.3 STANDARD OF PERFORMANCE
Without prejudice to the provisions of sub-Clause 4.2 the Distributor
agrees to use its best endeavours to perform each of the duties
described in sub-Clause 4.1 in a manner that preserves and protects
Synon's business reputation and its proprietary rights in the
Products.
5. PRODUCT ORDERS
5.1 LIMITATION OF LIABILITY ETC.
(a) The parties hereby agree that Synon shall not have any
liability to Distributor or to any third party for any
compensation, damages, penalties or otherwise in the event
that the Distributor shall fail to submit a quotation,
proposal or tender to an End User, or after submission thereof
withdraws such quotation, proposal or tender, or shall refuse
an order from an End User for a Product, or shall fail to
deliver a Product in accordance with an End User's order and a
Licence Agreement.
(b) The Distributor agrees not to make the Products available to
any End User unless and until such End User shall have
executed and delivered to the Distributor a signed Licence
Agreement and details thereof have been given to Synon.
(c) The Distributor agrees not to provide or procure the provision
of any maintenance services (including the provision of
updates of the Products) in respect of any of the Products
unless and until such party to whom such services are to be
provided shall have executed and delivered to the Distributor
a Maintenance Agreement and details thereof have been give to
Synon.
(d) The Distributor agrees not to enter a Maintenance Agreement
with a term of over twelve (12) months duration in aggregate
without obtaining the prior written consent of Synon.
5.2 DELIVERY
Synon agrees to pay all direct costs of transporting one copy of each
of the Products and copies of user manuals to the Distributor's place
of business in accordance with Synon's standard operating procedures.
Synon shall not bear any liability resulting from any delay in the
delivery of a Product or any user manuals to the Distributor or to any
End User or Licensee. Risk of loss or of damage to the Products shall
pass to the Distributor when such Products are delivered to the
Distributor's place of business or to such other address in the
Territory as the Distributor shall request delivery to. The
Distributor shall then pack the Products for despatch and arrange for
such despatch (at the Distributor's cost) to Licensees. The
Distributor shall insure the Products and the user manuals whilst
under its control including transit to the Licensee.
5.3 TAXES AND OTHER CHARGES
The Distributor agrees to pay, collect and remit all value-added,
sales, use, withholding, and other taxes and charges, including,
without limitation to the generality of the foregoing, import duties,
border taxes, brokerage fees, and other import charges or expenses,
imposed in the Territory in respect of the Products (other than income
taxes imposed directly on Synon in the Territory). The Distributor
further agrees to indemnify and hold Synon harmless against any such
liabilities. In addition the Distributor shall provide to Synon all
relevant withholding tax certificates within thirty (30) days of
either payment of any sum due to Synon hereunder or the Distributor's
receipt of such certificate from the appropriate revenue authority (if
later). The provisions of this sub-Clause 5.3 and sub-Clause 5.5
shall survive termination or expiration of this Agreement.
5.4 CUSTOMS AND OTHER CLEARANCES
The Distributor agrees to obtain at its expense all necessary customs,
import and other governmental authorisations and approvals in the
Territory relating to this Agreement (including, without limitation to
the generality of the foregoing, foreign exchange, foreign investment
and transfer of technology approvals and notifications). Synon's
obligations under this Agreement shall be specifically subject to the
grant and effectiveness of all necessary authorisations and approvals.
5.5 EXPORT REQUIREMENTS
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Agreement the Distributor agrees not to export or otherwise make
available the Products to any third party for use outside the
Territory, or to make the Products available to any third party within
the Territory, if the Distributor knows, or has reasonable grounds to
suspect, that such third party is planning to use or otherwise
transfer the Products outside of the Territory in violation of such
export laws, regulations or orders or in violation of any Licence
Agreement.
5.6 NO WARRANTY OF CONTINUED AVAILABILITY
Synon does not represent or guarantee to the Distributor the continued
availability for sale of any of the Products and assumes no liability
in connection with any loss or damage to the Distributor, arising out
of Synon's failure to accept or fill orders of the Products due to
their unavailability. Synon at its sole discretion, may at any time,
change any Product or withdraw any Product from its current list of
Products or limit available quantities of any product, or Products, or
remove or add to the list of Products which the Distributor is
authorised hereunder to distribute and support. If Synon removes from
the list of Products set out in Appendix A, it shall give ninety (90)
days written notice thereof to the Distributor.
6. PRODUCT LICENSES
6.1 USE OF LICENCE AGREEMENTS
The Distributor agrees to license the Products to End Users in the
Territory only in accordance with the terms and provisions of the
Licence Agreements, and to obtain Synon's prior written approval of
any proposed amendment of any Licence Agreement.
6.2 USE OF MAINTENANCE AGREEMENTS
The Distributor agrees to maintain and supply the Products in the
Territory only in accordance with the terms and provisions of the
Maintenance Agreements, and to obtain Synon's prior written approval
of any proposed amendment of any Maintenance Agreement.
6.3 TRANSLATION OF THE LICENSE AND MAINTENANCE AGREEMENTS
(a) Subject to the Distributor's compliance with the provisions of
this Sub-Clause 6.3 the Distributor may at its expense and
subject to Synon's prior written approval, translate the
Licence Agreement and/or the Maintenance Agreement into such
languages as may be necessary or desirable for its use in the
Territory and to make such modifications as may be necessary
or desirable to conform such agreement to customary commercial
practices in the Territory (as reflected in licence agreements
or maintenance agreements (as the case may be) commonly used
in the Territory for similar computer software products).
(b) No such translation or modification shall (i) diminish or
limit any of Synon's rights (proprietary or otherwise) in the
Products, (ii) diminish or limit the enforceability of such
rights, (iii) convey any rights of ownership in the Products,
(iv) permit the use or copying of the Products except for the
limited purposes permitted under the Licence Agreement, (v)
permit disclosure of any proprietary information regarding the
Products or (vi) permit reverse-engineering, disassembly or
decompilation of the Products.
(c) The Distributor agrees (i) to provide to Synon upon Synon's
request, for review by Synon and its legal advisers copies of
any such translated or modified version of the Licence
Agreement and the Maintenance Agreement and copies of the
literal English translations thereof and (ii) to obtain
Synon's written approval thereof prior to providing copies
thereof to any End User or Licensee.
(d) In the event that any legislation or judicial or
administrative action in the Territory renders any provision
of a Licence Agreement or a Maintenance Agreement invalid or
unenforceable, the Distributor agrees to so notify Synon in
writing, and to assist Synon in appropriately modifying such
agreement. The provisions of this paragraph shall survive
termination or expiration of this Agreement.
6.4 ENFORCEMENT OF LICENCE AND MAINTENANCE AGREEMENTS
The Distributor agrees to use its best endeavours to enforce each
Licence Agreement and each Maintenance Agreement to the full extent of
applicable law and to safeguard all rights (proprietary or otherwise)
and interests of Synon in the Products. The Distributor agrees to
notify Synon in a timely manner of any legal notices serviced on, or
legal actions brought against, the Distributor concerning the Products
or the Distributor's performance of its duties hereunder. The
Distributor agrees not to institute any legal action or other
proceedings with respect to a Licence Agreement or a Maintenance
Agreement or the Products (or to enter into any compromise in respect
thereof) without the prior written consent of Synon. The provisions
of this sub-Clause 6.4 shall survive termination or expiration of this
Agreement.
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7. PRICE, PAYMENT AND REPORTS
7.1 PRICE AND PAYMENT
(a) Synon agrees to supply a demonstration and training version of
each of the Products to the Distributor (in accordance with
sub-Clause 4.1(h)) at no charge to supply all other copies of
the Products to the Distributor at the prices specified in
Appendix A Part II paragraph (a) (as varied from time to
time).
(b) The Distributor shall pay to Synon commission of all Licence
Agreements and Maintenance Agreements calculated in accordance
with Part II, of Appendix A.
(c) The prices and commission (including the percentage
calculation) specified in Appendix A may be changed by Synon
from time to time upon giving not less than ninety (90) days
prior written notice to the Distributor. All prices are
exclusive of customers charges, fees and applicable taxes
which shall be paid in addition.
(d) The Distributor shall pay to Synon all amounts due under this
Clause 7 not later than the twenty eighth (28th) day of the
second calendar month following the calendar month in which
the Distributor is invoiced for payment whether or not the
Distributor has received payment from Licensees. Payment
shall be deemed to be made pursuant to this Clause 7 on actual
receipt of the monies due into Synon's bank account and not
before. For example, a sale with an invoice date 31 December
will be due for payment on 28 February.
(e) All amounts payable by the Distributor pursuant to this Clause
7 shall be paid to Synon directly to such bank account as
Synon may designate and shall be paid in sterling (or in such
other currency as Synon may specify in writing from time to
time). Any sum due to Synon hereunder and not paid on the due
date for payment shall bear interest at the rate of five per
cent above the base lending rate of Midland Bank plc (or such
other UK Clearing bank as Synon may specify) from time to
time, or the maximum rate otherwise permitted by applicable
law, which ever shall be the lower, from the date such sum
falls due for payment until the date payment is received by
Synon, and shall be compounded at half yearly intervals.
(f) In the event that the central bank or similar governing body
in the Territory shall impose any restrictions preventing
payment of funds due to Synon in accordance with this Clause
7, and the Distributor shall not otherwise remit such amounts
to Synon, Synon may, in its discretion, terminate this
Agreement pursuant to sub-Clause 10.2(f) and may instruct the
Distributor to deposit such funds in a specified account of
Synon in a banking institution located in the Territory.
(g) Notwithstanding any provision of this Agreement, in the event
that the Distributor shall fail to pay all amounts due to
Synon hereunder within the time specified in sub-Clause 7.1(d)
on two consecutive occasions, Synon shall have the right to
terminate this Agreement in accordance with sub-Clause 10.2(h)
as a material breach. The parties hereby agree that such
action of non- payment by the Distributor would be a material
breach of this Agreement.
(h) Synon reserves the right to off-set any outstanding amounts
due to the Distributor hereunder against any amounts due from
the Distributor hereunder or arising from any breach by the
Distributor of its duties and obligation hereunder. The
provisions of this sub-Clause 7.1 shall survive termination or
expiration of this Agreement.
7.2 MONTHLY REPORTS
On the first working day of each calendar month the Distributor agrees
to transmit Synon by telefax a properly completed sales report in a
form supplied by Synon from time to time setting forth such
information concerning the licensing of the Products and names of
Licensees as Synon may request and including a six monthly sales
forecast. Such sales reports shall set out what the Distributor
believes to be the number of Licence Agreements and Maintenance
Agreements to be signed up during that six month period. The type of
information required by Synon for completion by the distributor is set
out at Appendix D, and is subject to variation and change by Synon
from time to time. The Distributor shall use its best endeavours to
ensure the accuracy of the information given to Synon in each of these
reports.
7.3 ACCOUNTS
The Distributor shall provide to Synon each year a copy of its audited
annual accounts within one month of the audit report being signed by
its auditors. If the Distributor does not have audited accounts it
shall in each 12 month period from the date of this Agreement supply
to Synon a copy of the management accounts it does have for the
previous 12 month period, and the Distributor shall ensure that such
accounts shall represent a true and fair view of the Distributor's
business.
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7.4 REFERENCES
The Distributor hereby authorises Synon to apply to any of its banks,
(as Synon shall decide from time to time), to obtain references in
respect of the financial standing of the Distributor. The Distributor
shall give written notice to Synon as soon as it changes any bank with
whom it does business.
7.5 REVIEW OF RECORDS
Synon shall have the right at any time during the term of this
Agreement, directly or through an independent third party, upon thirty
(30) days' prior written notice to the Distributor, to conduct a
review at the Distributor's principal business offices of the
Distributor's books and records relating hereto and to make copies
thereof at Synon's expense. If the results of such a review shall
disclose a deficiency in amounts payable by the Distributor to Synon
in excess of five percent (5%) of the amounts actually paid or
reported as being payable to Synon hereunder for any period which is
so reviewed, then the Distributor shall promptly reimburse Synon for
the entire cost of such review, including, but not limited to,
professional fees and travel and lodging expenses. The provisions of
this sub-Clause 7.5 shall survive for the period of twelve (12) months
following termination or expiration of this Agreement.
7.6 LETTER OF CREDIT
Synon reserves the right, at any time during the term of this
Agreement, to request that the Distributor provide an open letter of
credit to Synon in respect of maximum estimated sums due to Synon
hereunder during the immediately following twelve (12) month period
and thereafter for each consecutive twelve (12) month period of this
Agreement (or part thereof). The Distributor shall, within ten (10)
days of receiving such request in writing procure, at its cost, the
provision of such letter of credit from such bank as Synon shall
specify (acting reasonably) and for such sum as Synon shall specify,
(acting reasonably), to be a predetermined estimate of maximum sums
due to it hereunder during that immediately following twelve (12)
month term (or part thereof as the case may be).
8. TRADE SECRETS AND PROPRIETARY INFORMATION
8.1 PROPRIETARY NAME OF PRODUCTS
(a) The Distributor acknowledges that the Products are proprietary
in nature, that Synon owns all trade secret, copyright,
trademark and patent rights granted by law therein, and that
Synon neither grants nor otherwise transfers any rights of
ownership therein to the Distributor. The Distributor agrees
not to duplicate or otherwise reproduce any Product or any
Documentation in whole or in part save as authorised in
writing by Synon for distribution pursuant to Licence
Agreements or Maintenance Agreements. The Distributor further
agrees to take all reasonable steps to ensure that no
unauthorised persons shall have access to any of the Products
and that all authorised personal having access to the Products
shall refrain from any such disclosure, duplication or
reproduction except to the extent reasonably required in the
performance of the Distributor duties under this Agreement.
All officers, employees and agents of the Distributor having
access to any of the Products must be subject to nondisclosure
or similar agreements consistent with the Distributor's
obligations hereunder, which the Distributor agrees to enforce
to the full extent of applicable law. If, pursuant to this
Agreement, the Distributor does copy the Products or the
Documentation it shall ensure that all proprietary notices of
Synon are shown on such copies.
(b) The Distributor shall not, directly or indirectly, register,
apply for registration or attempt to acquire any legal
protection for the Products or any proprietary rights therein
in its own name or take any other action which may adversely
affect Synon's right, title or interest in or to the Products.
(c) The Distributor shall promptly notify Synon as soon as it
becomes aware of any breach by any third party of any of
Synon's intellectual property rights in any of the Products or
the Documentation or any unauthorised use of any of the
Products.
(d) In the event of a breach by the Distributor or any of its
officers, employees or agents of its or their obligations
under this Clause 8 or if the Distributor at any time
challenges, directly or indirectly, the right, title or
interest of Synon in and to any of the Products or the
validity or enforceability of Synon's claimed rights therein
under applicable law Synon may immediately terminate this
Agreement without liability to the Distributor by giving
written notice to the Distributor. In addition Synon may
bring an appropriate legal action in respect of any such
breach or challenge (as the case maybe), and shall be entitled
to recover from the Distributor its legal fees and costs in
addition to other appropriate relief.
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8.2 NO PRODUCT MODIFICATIONS
The Distributor shall not have the right under this Agreement or
otherwise to receive the source code to any of the Products. The
Distributor agrees not to modify or alter, or attempt to modify or
alter, any of the Products or the Documentation without the prior
written authorisation of Synon. In the event that the Distributor
makes any modification or alteration, the Distributor shall promptly
deliver and assign the same to Synon and the Product or Documentation
as modified or altered shall be and shall remain the sole and
exclusive property of Synon but Synon shall thereupon grant a
non-exclusive licence to the Distributor for it to use the
modification or alteration for the purposes of its business.
8.3 CONFIDENTIAL INFORMATION
The parties agree that all information furnished by Synon to the
Distributor hereunder, in whatever form, except promotional and
advertising material, is Confidential Information. The Distributor
agrees that it will use all Confidential Information disclosed to it
by Synon only in furtherance of its performance hereunder, and for no
other purpose. Except as provided above, the Distributor agrees that
it will not disclose Confidential Information to any other person or
entity without the express prior written consent of Synon. The
Distributor agrees that it will protect the confidentiality of
Confidential Information with the same degree of care with which it
protects its own Confidential Information.
8.4 OWNERSHIP OF CONFIDENTIAL INFORMATION
All Confidential Information furnished to the Distributor hereunder
(including all copies thereof) is and shall remain the property of
Synon and shall be returned to or otherwise disposed of as instructed
by Synon promptly upon demand or upon the termination or expiration of
this Agreement.
8.5 The provisions of this Clause 8 shall survive termination or
expiration of this Agreement.
9. USE OF TRADE NAMES AND TRADEMARKS
9.1 SCOPE OF USE
(a) The Distributor hereby acknowledges the validity and Synon's
ownership of Synon's Trademarks throughout the world, whether
or not registered. The Distributor further acknowledges that,
except as provided herein or as otherwise expressly provided
in writing, (i) it has no rights or interest of any kind in or
to Synon's Trademarks, including, without limitation to the
generality of the foregoing, the name "SYNON/2", (ii) it shall
acquire no rights or interest therein by virtue of this
Agreement or the performance by the Distributor of its duties
and obligations hereunder, and (iii) it will not assert any
rights or interests therein by virtue of the rights granted to
the Distributor hereunder. The provisions of this paragraph
shall survive termination or expiration of this Agreement.
(b) Synon hereby grants to the Distributor during the term of this
Agreement the non-exclusive, limited right to use the
proprietary Product names and marks in marketing the Products
in the Territory pursuant to this Agreement. All rights
arising from such use by the Distributor shall inure to Synon.
Notwithstanding the foregoing, the Distributor shall be
prohibited from using the name "SYNON", any of the Product
names or marks, or any confusingly similar name or symbol, in
whole or in part with any products other than the Products.
Synon makes no warranty, express or implied, as to the use or
validity of such marks.
(c) The Distributor shall identify Synon as the owner of the
Trademarks in all Documentation and Product advertising and it
shall specify (in such form as Synon shall approve). Products
are licensed products of Synon. Synon reserves the right to
approve all advertising and marketing materials of the
Distributor, inter alia, to ensure the proper use of the
Trademarks. The Distributor's rights hereunder shall continue
only during the term of this Agreement and, upon termination
or expiration of this Agreement, the Distributor shall cease
to use such Product names or any marks or variants sounding
like or appearing to be similar thereto.
(d) The Distributor shall not remove, alter or obliterate, or
cause to be removed, altered or obliterated, any trademarks,
trade names, copyright or other symbols placed upon Products
or Documentation delivered to the Distributor, provided,
however, that the Distributor may apply its own name and
address to the packaging of the Products.
9.2 PROTECTION AGAINST INFRINGEMENT
(a) The Distributor agrees to inform Synon promptly of all legal
requirements for protecting the proprietary rights of Synon in
and to the Products in the Territory, and agrees to cooperate
fully with Synon in protecting the Products from infringement.
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(b) The Distributor agrees to report to Synon any known uses by
third parties in the Territory of marks or trade or product
names similar to the marks and trade and product names of
Synon. The Distributor agrees to assist Synon in enforcing or
obtaining protection of such items in the Territory and
acknowledges that Synon shall have the sole right to bring a
legal action or suit for infringement thereof.
(c) The provisions of this sub-Clause 9.2 shall survive
termination or expiration of this Agreement.
9.3 REGISTRATION OF TRADEMARKS
Unless prior registration of any Trademark is required by the laws of
the Territory as a prerequisite for importation of the Products, Synon
reserves the right to decide where and when to apply for the
registration of the Trademarks in the Territory. Any trademark
registration shall be in the name and for the benefit and the account
of Synon.
10. TERM AND TERMINATION
10.1 TERM OF AGREEMENT
The term of this Agreement shall commence on the date hereof and shall
continue for the period of five (5) years terminating at 12 noon
London local time on the fifth anniversary hereof unless prior to that
date it is terminated by either party giving to the other not less
that ninety (90) days notice in writing of termination of such notice
to expire on the third, fourth or fifth anniversary date of the date
of this Agreement.
10.2 TERMINATION BY SYNON
Notwithstanding the provisions of sub-Clause 10.1 Synon may terminate
this Agreement, in while or in part as provided below, at any time
after the occurrence of any of the following events upon not less than
ten (10) days' prior written notice thereof to the Distributor (or
such other period of notice specified below):
(a) The Distributor fails in any two consecutive quarters to meet
the sales quota for those quarters notified to the Distributor
in accordance with Appendix C. In the vent that Synon chooses
to exercise its right to terminate the Distributor's rights in
respect of one or more but not all of the Products or in
respect of one or more parts of the Territory, written notice
must be given to the Distributor at least one hundred and
eighty (180) days before the effective date of any such
partial termination of Product distribution rights;
(b) forthwith on notice to the Distributor if it becomes or is
declared insolvent or otherwise unable to pay its debts as
they become due;
(c) forthwith on notice to the Distributor if it enters into or
proposes a voluntary arrangement or composition with its
creditors or shall cease or threaten to cease to carry on its
business or substantially the whole of its business;
(d) forthwith on notice to the Distributor if it shall have a
receiver or an administrative receiver appointed to its
undertaking or any of its assets or shall become subject to an
administration order or shall enter into liquidation whether
compulsory or voluntary or pass a resolution for its
winding-up (other than for the purpose of a bona fide scheme
of solvent amalgamation or reconstruction where the resulting
entity assumes all of the obligations of the Distributor), or
shall, if an individual be made or declared bankrupt or commit
any act of bankruptcy (of if a partnership any one of the
partners shall commit such an act) or shall be the subject of
any equivalent or similar or analogous provision or
arrangement or appointment or any analogous step is taken in
connection with the Distributor's insolvency, bankruptcy or
dissolution, applicable to the laws and regulations in the
Territory, or the country in which the Distributor is
incorporated or established or carries on business;
(e) there is a Change of Control of the Distributor;
(f) the central bank or similar governing body in the Territory
imposes a restriction preventing the Distributor from making
payment of funds payable to Synon hereunder for a period in
excess of three (3) months;
(g) forthwith on notice to the Distributor if it assigns or
transfers the Agreement, or any of its rights or obligations
hereunder or purports or attempts to do so without Synon's
prior written consent;
(h) forthwith on notice to the Distributor if it breaches any
provision of this Agreement that Synon considers to be
material (acting reasonably in all the circumstances);
(i) in accordance with sub-Clauses 8.1(d) and 2.2
10.3 ACTIONS FOLLOWING TERMINATION
(a) In the event of the termination of this Agreement, whether by
the expiration of the original or any extended term hereof or
otherwise, the Distributor agrees promptly (i) to provide
Synon with all
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outstanding reports and payments due to Synon pursuant to
Clause 7 or otherwise pursuant to this Agreement, (ii) cease
holding itself out as having any connection with Synon or the
Products (other than as provided in paragraph (b) below);
(iii) in the event of termination pursuant to sub-Clause
10.2(b), (c) or (d) to assign, and do all that is necessary to
procure the assignment, to Synon or as it may direct all
Licence Agreements and Maintenance Agreements and (iv) to
report to Synon in reasonable detail the status of all
discussions and negotiations with End Users and all services
which the Distributor is obliged to provide to such End Users
and Licensees with respect to the Products.
(b) Subject to paragraph a) above in respect to Maintenance
Agreements already entered at the date of termination or
expiration of this Agreement the Distributor shall continue to
provide maintenance services in accordance with this Agreement
until the expiration of the then existing term of the
Maintenance Agreement. At the end of each such Maintenance
Agreement the provisions of this sub-Clause 10.3 shall apply
in respect of the Products the subject of the Maintenance
Agreement.
(c) In the event of expiration or termination hereof, all of the
Distributor's rights hereunder to promote, distribute and
support the Products, and to use the Product names and
identifying marks, shall automatically terminate and the
Distributor shall cease any use thereof (save as may be agreed
in writing with Synon for the purpose of the Distributor
complying with paragraph (b) hereof). The Distributor agrees
to return to Synon all Products, marketing materials and other
information of Synon in any form (proprietary or otherwise) in
the Distributor's possession or under its control or, with the
prior written consent of Synon, to destroy the same, and in
either case to certify in writing to Synon that such actions
have been taken.
(d) Following the effective date of termination or expiration of
this Agreement the Distributor shall remit forthwith Synon all
sums due to it herein. In the vent that the Distributor shall
fail to assign to Synon or as it may direct all Licence
Agreements immediately following such termination date (in the
even of termination being pursuant to sub-Clauses 10.2(b), (c)
or (d), Synon shall (directly or through its authorised
representatives), (i) be entitled to deal with such End Users
and Licensees, and (ii) be subrogated to the Distributor under
all Licence Agreements.
(e) In connection with any termination of this Agreement, the
parties agree to cooperate fully and to provide promptly all
information necessary or useful relating hereto. At any time
for twelve (12) months following the termination or expiration
of this Agreement Synon shall have the right, directly or
through an authorised representative, to review the books and
records of the Distributor (including prospect records)
relating to this Agreement and to make copies thereof at
Synon's expense. If the results of such review shall disclose
a deficiency in amounts payable by the Distributor to Synon in
excess of five per cent (5%) of the amounts actually paid or
reported as being payable to Synon hereunder for any period so
reviewed then the Distributor shall promptly reimburse Synon
for the entire cost of such review in accordance with
sub-Clause 7.5.
(f) The provisions of this sub-Clause 10.3 and the sub-Clause 10.5
shall survive termination or expiration of this Agreement.
10.4 CONTINUING OBLIGATIONS
Expiration of the original or any extended or renewed term hereof or
any other termination of this Agreement shall be without prejudice to
any rights or obligations of the parties hereto which have accrued
prior to such expiry or termination and shall not affect any provision
of this Agreement which is expressly or by implication provided to
come into effect on or to continue after such expiry or termination.
10.5 LIABILITY ON TERMINATION
Synon shall not be liable to the Distributor, as a result of any
termination of this Agreement, with or without cause, and shall not
otherwise have any obligation (statutory or otherwise) to compensate
or reimburse the Distributor for any claims or damages whatsoever
(including, but not limited to, termination indemnities, lost revenues
or profits, the Distributor's expenditures, investments, leasehold or
employment obligations or other continuing commitments of the
Distributor). The Distributor specifically (i) waives all
compensation and damages, whether direct, consequential or otherwise,
to which it may otherwise have a right under applicable law in the
Territory; (ii) agrees to indemnify and hold Synon harmless from and
against all claims of the employees and agents of the Distributor for
compensation or severance, disability, social security or similar
payments; and (iii) agrees not to register as the agent or distributor
of Synon in any jurisdiction within the Territory without the prior
written consent of Synon.
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10.6 GOODWILL
The Distributor acknowledges and agrees that any and all goodwill
associated with the promotion, distribution and support of the
Products in the Territory shall accrue directly to the benefit of
Synon and shall be the sole and exclusive property of Synon.
11. INDEMNIFICATION
The Distributor shall indemnify and hold Synon and its Affiliates
harmless from and against any and all claims, liability, costs and
expenses (including legal fees) arising out of (a) the improper
installation, support or maintenance of the Products by the
Distributor or its employees, (b) any misrepresentations by the
Distributor or its employees in respect of the Products, (c) any
breach by the Distributor of any of the provisions of this Agreement
or (d) any negligent, wrongful or intentional acts or omissions on the
part of Distributor or its employees. The provisions of this Clause
11 shall survive termination or expiration of this Agreement.
12. FORCE MAJEURE
12.1 Neither Synon nor the Distributor shall be liable for failure to
perform any obligation under this Agreement if the failure is caused
by war, insurrection, riot, fire, explosion, flood, strike, lock-out,
injunction, inability to obtain fuel, power, raw materials, labour,
containers or transportation, accident, malfunction of machinery or
apparatus, national defence requirements, acts or regulations or
national or local governments, denial of export or import licenses, or
act of God, or any other cause beyond the control of the party.
12. Notwithstanding the foregoing, the occurrence of a force majeure event
or condition described in sub-Clause amounts then due and owing to
Synon pursuant to the terms of this Agreement.
12.3 The Party claiming relief pursuant to sub-Clause 12.1 shall promptly
notify the other Party in writing of the facts indicating the
existence of any force majeure event or condition and the relief
claimed. The Parties agree to use all reasonable endeavours to
overcome such conditions. Sub-Clause 12.1 shall not relieve any Party
of its obligation to perform its part of this Agreement at such time
and to such extent as may be possible subsequent to the occurrence of
the events or conditions described in sub-Clause 12.1 and within
reasonable time thereafter. Should such event or conditions continue
unabated despite the parties' reasonable endeavours to overcome them
for three (3) months from the date of notice given pursuant hereto,
then the party receiving such notice shall have the option to
terminate this Agreement without liability to the other party for the
consequences of such termination by giving written notice.
13. GENERAL PROVISIONS
13.1 ASSIGNABILITY
(a) Subject as provided in sub-Clause 13.1(b) the Distributor
shall not sell, assign, transfer convey, delegate or encumber
its duties and obligations hereunder, or any rights or
interests hereunder, and the Distributor shall not suffer or
permit any voluntary assignment or transfer or encumbrance
thereof, by operation of law or otherwise, without the prior
written consent of Synon.
(b) The Distributor shall not without the prior written consent of
Synon or as provided in this Agreement employ sub contractors;
if with such consent or as provided in this Agreement it does
so, every act or omission of the sub contractor shall for the
purposes of this Agreement be deemed to be the act of omission
of the Distributor.
(c) Synon reserves the right to assign or transfer this Agreement
or any of its duties, obligations, rights or interests
hereunder, to any direct or indirect subsidiary or Affiliate
of Synon or a subsidiary of such Affiliate of Synon.
13.2 NOTICES
All notices, requests, reports, submissions and other communications
permitted or required to be given under this Agreement shall be in the
English language, and shall be deemed to have been duly given if such
notice or communication shall be in writing and sent by personal
delivery or by airmail, telex, facsimile transmission (in both cases,
if a hard copy is also sent by airmail) or other commercial means of
rapid delivery, postage or costs of transmission and delivery prepaid,
to the parties at the following addresses until such times as either
party hereto shall give the other party hereto not less than ten (10)
days' prior written notice of a change of address in accordance with
the provisions hereof:
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If to Synon: Mr Victor Bhalla
Synon Europe Ltd.
91 St Paul's Road
London N1 2YU
Tel: 0171 226 5164
Fax: 0171 226 1259
If to the Distributor: Mr Klaus Maerz
CGI Informatik GmbH
Hardt 9-11
40764 Langenfeld
Tel: 02173 9080
Fax: 02173 908 122
13.3 NO IMPLIED WAIVERS
The failure of either party to exercise any right or option it is
granted herein, or to require their performance by the other party
hereto of any provision of this Agreement, shall not prevent a
subsequent exercise or enforcement of such provisions or be deemed a
waiver of any subsequent breach of the same or any other provision of
this Agreement.
13.4 MODIFICATION OR AMENDMENT
Except to the extent and in the manner specified in this Agreement,
any modification or amendment of any provision of this Agreement must
be in writing and bear the signature of the duly authorised
representatives of both parties.
13.5 LANGUAGE
The language of this Agreement is expressly stipulated to be the
English language. In the event that this Agreement shall be
translated into one or more other languages, the English language
version of this Agreement shall be the governing version for purposes
of interpreting and enforcing this Agreement. All Products,
Documentation and technical assistance to be provided hereunder by
Synon shall be in the English language unless otherwise agreed between
the parties. In the event that the applicable law of the Territory
shall require this Agreement to be governed by such law or shall
require any of the foregoing items to be in a language other than
English language, the Distributor shall promptly notify Synon and,
subject to the provisions of this Agreement, shall undertake to comply
therewith in a manner satisfactory to Synon.
13.6 CONFORMITY WITH LOCAL LAWS
The rights and obligations of the parties hereunder are subject to all
applicable laws, orders, regulations, directions and restrictions of
the various governmental authorities having jurisdiction over the
parties. In the event that any of the foregoing (excluding a law,
order, regulation, direction or restriction of the European
Commission) shall result in a modification or alteration of this
Agreement, either party hereto may request that this Agreement be
modified with respect thereto, to the reasonable satisfaction of the
parties hereto, and the parties shall so amend this agreement. If
such modification amounts to a material amendment or variation to this
agreement either party hereto may, in its sole discretion, terminate
this Agreement on ten (10) days prior written notice.
13.7 PRIOR AUTHORISATION
If any notification or approval of any governmental or other authority
in the Territory is required prior to, or following, the execution of
this Agreement (or any Licence Agreement or Maintenance Agreement) the
Distributor agrees to notify Synon promptly of such requirements and
to comply fully therewith. In the event that (a) any such authority
shall require the parties to amend this Agreement as a condition
precedent to such approval or (b) any such approval shall not be
received within one hundred twenty (120) days following submission of
a written request for such approval, either party may terminate this
Agreement without liability except with respect to any prior breach to
the other party upon thirty (30) days' prior written notice to such
party. All monies due to Synon shall be paid in accordance with
Clause 10.3(a) and all other actions following termination shall
apply.
16
17
13.8 DEEMED AMENDMENT
If any term or provision or any part thereof (in this sub-Clause 13.8
called the offending provision) contained in this Agreement shall be
declared or become unenforceable, invalid or illegal for any reason
whatsoever including but without derogating from the generality of the
foregoing a decision by any competent domestic or European Economic
Court, the European Commission, domestic or European Community law,
the other terms and provisions of this Agreement shall remain in full
force and effect as if this Agreement had been executed without the
offending provision appearing herein and with any required amendment
and any offending provision shall thereupon cease to have effect. At
the request of Synon the Distributor shall assist Synon and provide
all necessary information and support to Synon for the purpose of
making an application to the European Commission for negative
clearance of this Agreement pursuant to Article 2 of Council
Regulation No. 17 or for notification of this Agreement with a view to
obtaining exception under Article 85(3) of the Treaty of Rome.
Furthermore the distributor agrees to Synon making such amendments to
this agreement as it considers necessary to obtain such negative
clearance or exemption or any comfort letter in relation thereto and
shall thereby be bound by any such amendments.
13.9 PUBLICITY
The Distributor shall not publicise or disclose to any third party by
other means any of the terms or provisions of this Agreement, or the
discussions relating thereto, without the prior written consent of a
duly authorised officer of Synon, except as required by law.
13.10 SEVERABILITY
If any provision of this Agreement is determined by a court of
competent jurisdiction to be in violation of any applicable law or
otherwise invalid or unenforceable, such provision shall to such
extent as it shall be determined to be illegal, invalid or
unenforceable under such law be deemed null and void, but this
Agreement shall otherwise remain in full force and effect.
13.11 ENTIRE AGREEMENT
This Agreement sets forth the entire agreement between the parties
hereto with respect to the subject matter hereof and merges all
discussions between them and supersedes and replaces any and every
other agreement which may have existed between Synon and the
Distributor to the extent that any such agreement relates or related
to the establishment of any arrangement for the distribution,
marketing, sale or support of any of the Products. Each of the
parties acknowledges that, in entering into this Agreement, it does
not do so on the basis of and does not rely on, any representation,
warranty or other provision except as expressly provided herein, and
all conditions, warranties or other terms implied by statute or common
law are hereby excluded to the fullest extent permitted by law.
13.12 PROPER LAW AND JURISDICTION
The validity of this Agreement and the rights, obligations and
relations of the parties hereunder shall be construed and determined
under and in accordance with the laws of England and each party hereby
agrees to submit to the jurisdiction of the English Courts.
13.13 COUNTERPARTS
The Agreement may be executed in any number of separate counterparts,
each of which shall be deemed to be an original but which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
by their duly authorised representatives the day and year first above written.
SIGNED BY: /s/ D. MOORE for and on behalf of SYNON
---------------------
Print Name: D. Moore
---------------------
in the presence of:
[SIG]
----------------------------
17
18
Witness Name:
Witness Signature:
Witness Address:
Witness Occupation:
SIGNED BY /s/ [SIG] for and on behalf of the DISTRIBUTOR
-------------------------
Print Name: [ILLEGIBLE]
-----------------------
in the presence of:
Witness Name: [SIG]
-------------------------------
Witness Signature: [SIG]
-------------------------------
Witness Address: [ILLEGIBLE]
-------------------------------
Witness Occupation: Sales Mgr.
-------------------------------
18
19
APPENDIX A
PART I - THE PRODUCTS
LICENCE SALES: Trials, Rental, Sales and Upgrades
Synon/1E - AS/400 Based CASE Tool Utilities
Synon/2E - AS/400 Based CASE Tool
Synon/CSG and CSD - Client Server Generator and Driver for both Microsoft Windows and IBM OS/2
Synon/Gateway - Bi-directional Import/Export Bridge for Synon/2E
Synon/1M - Change Management
Synon/CM - Change Management and Version Control with full Synon/2E Integration
Synon/RW - AS/400 Based Report Writer
Synon/Open - Synon/2E UNIX Generators for Hewlett Packard HP9000 and IBM RS/6000
SILVERRUN - Upper/CASE Tool for Microsoft Windows, IBM OS/2, and Apple MacIntosh
Synon/PE - Synon/2E Performance Expert Product
Synon/Translator - Translation Product
Obsydian - Object Engineering Microsoft Windows 3.1 Based CASE Tool
Obsydian Generators - For IBM AS/400, Hewlett Packard HP9000, IBM RS/6000 and Microsoft NT
In each case including supporting documentation but excluding source code.
MAINTENANCE
The distributor shall offer related maintenance services for all the products
listed above.
Synon reserves the right to add to or delete from the list of products which
are the subject of this distribution agreement in accordance with sub-Clause
5.6
19
20
PART II - PRICE SCHEDULE
(a) The current licence fees and maintenance fees on which all commission
payable to Synon shall be calculated are as enclosed. All prices are
expressed in Deutschmarks and these prices may be changed by Synon in
accordance with Clause 7.1(c).
Such fees are subject to variation from time to time at the sole
discretion of Synon and any such increases shall be notified to the
Distributor by Synon in writing in accordance with sub-Clause 7.1.
(b) The commission payable to Synon by the Distributor (or vice versa)
under this Agreement shall be calculated as follows, except in years
one and two where the Document of Understanding will rule:
i) If the Distributor shall enter a Licence Agreement and install
the software pursuant thereto - [ ]* of Synon's then current
licence fee.
ii) The Distributor shall pay to Synon [ ]* of Synon's then current
annual maintenance fee for each Maintenance Agreement it shall
enter, and [ ]* of Synon's then current maintenance fee on each
renewal of such maintenance agreement, provided Synon has not
received prior written notice of termination of any such
agreement.
(c) The Distributor is not in any way restricted or limited to licence the
Products at the fees listed in paragraph (a) above. Those are the
fees (as amended from time to time) on which Synon's commission shall
be calculated in accordance with this Appendix.
(d) If there is an MAI agreement with IBM in force in the territory or if
Synon pays a royalty to any third party for distribution rights of any
product [ ]*. If the distributor is to make the payment then it
warrants that it will pay IBM or any third party in accordance with its
terms and Synon will invoice the distributor at the appropriate share
of the price schedule, less Synon's share of the MAI or other third
party royalty. This shall only apply to products covered by MAI or
third party royalty agreements. [ ]*
If Synon is to make the payment then Synon will invoice the
distributor at the appropriate share of the price schedule plus the
distributors share of a MAI or other third party royalty agreement.
This shall apply to products covered by the MAI or other third party
royalty agreements. [ ]*
* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
20
21
APPENDIX B
THE TERRITORY GERMANY
21
22
APPENDIX C
SALES QUOTA
(a) Synon shall, prior to each calendar year consult with the Distributor
to try and agree the sales quota for each 3 month period of the
immediately following 12 month period. If agreement cannot be reached
between the parties prior to the commencement of each calendar year
Synon shall specify the sales quota, for the twelve month period
aforesaid, and give written notice thereof to the Distributor, and
such specified quota will be the sales quota for the purposes of this
Agreement for that next following calendar year.
(b) The sales quota for the remainder of the first calendar year or
remainder thereof shall be:
SYNON SHARE OF
INVOICES LICENCE
FEES
----------------
UK Pound
January - March
April - June
July - September
October - December
-----
Total for the Calendar Year [ ]*
=====
* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
22
23
APPENDIX D
FORM OF CURRENT REPORTS
The following information should be provided on a monthly basis in accordance
with Clause 7.2: -
- Six month forecast on a month by month basis of licence sales
and maintenance (split by new and renewal)
- Six month prospect list
- Proposed marketing activity
- Maintenance cancellations
Any substantial variances between the forecast and the sales quota (Appendix C)
should be explained.
23
24
APPENDIX E
THE MAINTENANCE SERVICES
Firstline telephone support during normal business hours (excluding
public holidays)
Delivery of new releases and bug fixes of the software and associated
documentation to end users provided they have a current maintenance
contract.
Liaison with Synon over the correct of program faults which have been
reported by an end user.
Synon may vary the Maintenance Services to be provided by the
Distributor in accordance with sub-Clause 4.1(i) by giving ten (10)
days written notice to the Distributor.
24
25
APPENDIX F
FORM OF LICENCE AND MAINTENANCE AGREEMENTS
As supplied by Synon Europe Ltd.
25
26
DOCUMENT OF UNDERSTANDING (DoU)
Version 2
PREAMBLE
Synon Deutschland GmbH will appoint CGI INFORMATIK GMBH to be their Distributor
in Germany for a minimum period of three years from the date of signature of
this agreement.
A Non-Exclusive International Distributor Agreement will be signed between
Synon Deutschland GmbH and CGI INFORMATIK GMBH. This Document of Understanding
will be additional to that Agreement and will affect the first two years of its
operation only.
CGI INFORMATIK COMMITMENTS
To recognise that Synon Deutschland GmbH is transferring the valuable asset of
a going concern with a substantial customer base and an assured revenue stream,
CGI INFORMATIK will commit: -
1.0 PEOPLE FOR YEAR END 1996
1.1 SALES
Three sales executives, dedicated to Synon software sales,
will be trained and in territory by the end of 1996. One
software engineer will be assigned full-time to each sales
executive.
1.2 NOTE
To achieve 1996 goals, see Appendix 1, a minimum of two sales
executives and two software engineers should be trained and in
territory by the end of March 1996.
1.3 POST-SALES
Three staff will be assigned to first level support on the
helpdesk. Two teachers/trainers will be assigned for training
customers on all Synon products released for the German
market.
1.4 MARKETING
Sufficient funds will be committed to execute marketing
programs to achieve revenue objective.
SYNON/CGI CONFIDENTIAL
Page 1 of 6
27
2.0 GUARANTEE OF 1996/97 ROYALTIES FOR SYNON EUROPE LTD
2.1 CGI INFORMATIK will guarantee Synon Deutschland GmbH a minimum
royalty in 1996 of [ ]*. This is calculated from the 1996
projected figures in Appendix 1. [ ]*
This can be achieved in several ways:
[ ]*
[ ]*
[ ]*
This can be achieved:
[ ]*
[ ]*
3.0 PERFORMANCE INCENTIVES
1996 and 1997
[ ]*
[ ]*
[ ]*
SYNON/CGI CONFIDENTIAL
* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
Page 2 of 6
28
4.0 MARKET SEGMENTS
AS/400 and RS/6000
CGI INFORMATIK will market, sell and support Synon products in the
AS/400 and RS/6000 markets in Germany. Neither Synon Europe nor Synon
Deutschland have plans to appoint another distributor in this market
sector but reserves the right to deal direct with any organisation in
the sector, especially software and services companies, which decide
not to licence Synon software from CGI. In these cases all sales and
support will be from Synon Europe. We expect these situations to be
few in number and will work with CGI to avoid the need for any such
action.
HP/UX and NT
CGI will be entitled to market, sell and support all the Synon
products made available to the German market. However, Synon
Deutschland GmbH will have the right to appoint other distributors or
agents for the HP/UX and Microsoft NT environments.
For the duration of this agreement CGI shall not offer Complementary
Marketing Agreements to any of the following companies for the AS/400
market; Progress, Lansa, JBA, Powersoft, Gupta.
If such an agreement is made by CGI with the above companies, Synon
reserves the right to appoint other distributors for the German AS/400
and RS 6000 markets.
5.0 CONTRACT TERM
The term of the contract will be a minimum of three years from the
date of signature, after which it will be renewable as stated in
clause 10.1 of the International Distribution Agreement.
6.0 TRANSFER STRATEGY
All Synon Deutschland employees and those of Synon Europe working in
Germany will get an offer from CGI for suitable employment under CGI
INFORMATIK terms and conditions from the date of this contract. CGI
will make the payments for all the costs caused by their transfer to
CGI and for the costs of terminating those who are unwilling to be
transferred. This costs are calculated in the one-time costs of 375 K
Pound and all payments will be seen as payments to SYNON and quoted
at 100%.
The same procedure is planned for all fixed assets and leasing or
renting agreements which are also calculated in the one-time cost (see
attached list).
7.0 SOFTWARE AND SERVICE COMPANY CONFLICT
We do not expect there to be any problems with the above companies,
but if a conflict should arise and if the company concerned asks to
deal direct with Synon Europe Ltd, then it shall be able to do so.
SYNON/CGI CONFIDENTIAL
Page 3 of 6
29
8.0 ANNOUNCEMENT PLAN
INTERNAL
- 2nd week of January 1996 (assuming this agreement is signed by
12.01.96).
- Distributor Kick-Off for Synon Europe Ltd in mid-January 1996.
EXTERNAL
- Common letter to Users in January 1996
- Kick-Off User meeting in 1st Quarter 1996.
- Press Releases.
- Road Shows in IBM Branch offices.
9.0 SYNON MAINTENANCE AGREEMENTS
Maintenance agreements that are transferred to CGI under the terms of
this agreement and all those agreements signed by CGI as Synon's
distributor shall revert to Synon at the end of this agreement unless
extended or whenever the terms of this agreement are breached.
10.0 INITIAL INVESTMENT FOR CGI INFORMATIK'S SERVICES & APPLICATIONS
DEVELOPMENT BUSINESS
CGI INFORMATIK will licence the date of this contract for use in its
professional services and application development business but not for
resale a 15 pack of Obsydian with three generators per seat (one AS/400
client server, one 5250 and one ODBC), plus one NT Generator, plus one
HP/UX generator, plus Import Facility plus DB2/400 import plus
Application Framework Class Library. The price list for such software
is [ ]* which after CGI's discount would reduce to [ ]*. It is further
agreed to reduce the price by the [ ]* giving the final price of [ ]*.
Upgrades for these seats will be charged at [ ]*. Additional copies for
sales demonstrations and customer support will be provided at no
charge.
11.0 Exceeding the estimated existing maintenance
[ ]*
12.0 Collecting receivables
SYNON Deutschland will be responsible for collecting all receivables
due as of the date of the agreement between us.
13.0 Licence or service backlog
[ ]*
SYNON/CGI CONFIDENTIAL
Page 4 of 6
* Confidential treatment has been requested from the
Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
30
[ ]*
SYNON/CGI CONFIDENTIAL
* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions have been filed separately with the Commission.
Page 5 of 6
31
Pound 375 K one-time costs
Space Pound 50 K
Fixed assets Pound 70 K
Leases Pound 25 K
Professional fees Pound 15 K
-----------
Pound 160 K
Staff costs Pound 215 K
-----------
Pound 375 K
CIG INFORMATIK GMBH SYNON EUROPE Ltd.
[SIG] 26/1/96 /s/ DUNCAN MOORE
- -------------------------------- -----------------------------------
Date Date Duncan Moore
Page 6 of 6