EXHIBIT 10.1
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OPTION PURCHASE AGREEMENT
This Option Purchase Agreement (the "Agreement") is entered into as of April 29,
2004 (the "Effective Date") by and among DATAWATCH CORPORATION, a Delaware
corporation with offices located at 175 Cabot Street, Lowell, Massachusetts
01854 ("DATAWATCH") jointly and severally with PERSONICS CORPORATION, a Delaware
corporation with offices located at 175 Cabot Street, Lowell, Massachusetts
01854 ("PERSONICS") (Datawatch and Personics are collectively referred to herein
as "BUYER"), on the one hand, and RAYMOND J. HUGER ("HUGER"), a sole proprietor
doing business as Math Strategies, having its principal place of business at 600
Green Valley Road, Suite 304, Greensboro, North Carolina 27408 ("MATH
STRATEGIES"), on the other hand.
WHEREAS, Personics and Math Strategies entered into a Software
Development and Marketing Agreement dated as of January 19, 1989 (which
Agreement, as amended to date, is hereinafter referred to as the "LICENSE
AGREEMENT") which is attached hereto as Exhibit A;
WHEREAS, Datawatch has acquired Personics and has become a party to
the License Agreement;
WHEREAS, pursuant to the License Agreement, Math Strategies
developed, maintained and licensed to Buyer on an exclusive basis a number of
software products (as defined below, the "SOFTWARE PRODUCTS");
WHEREAS, Buyer has requested an option to purchase the Software
Products ;
WHEREAS, Math Strategies has agreed to accommodate Datawatch and to
grant such option on the terms and conditions set forth below;
NOW THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the parties covenant and agree as follows:
1. Definitions. As used herein, the following capitalized terms
shall have the following meanings:
"CLOSING" has the meaning set forth in Section 6.
"OPTION" has the meaning set forth in Section 2 .
"PURCHASE PRICE" has the meaning set forth in Section 5 .
"SOFTWARE PRODUCTS" means the (i) the software programs developed by
Math Strategies under the License Agreement including those listed
on Exhibit B attached hereto and any additional software programs
which become subject to the License Agreement prior to the date of
exercise of the Option, (ii) all past and current bug fixes,
releases, enhancements, modifications, updates, upgrades and
versions thereof, (iii) all existing Source Code related thereto,
and (iv) all intellectual property rights embodied therein,
including, without limitation, copyrights.
"SOURCE CODE" means the human readable, English language code of a
Software Product, together with such explanatory notes and
description of the Software Product, all in such form as Math
Strategies has maintained for itself.
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2. OPTION GRANT AND TERM. For one hundred dollars ($100) paid to
Math Strategies, the receipt and sufficiency of which is acknowledged by Math
Strategies, and otherwise subject to the provisions of this Agreement, Math
Strategies hereby grants to Buyer an option ("OPTION") to purchase the Software
Products. The right of Buyer to exercise the Option shall commence as of the
Effective Date and shall expire two (2) years from the Effective Date ("OPTION
PERIOD"). If Buyer fails to exercise the Option in a timely manner, the Option
shall expire automatically.
3. CONDITIONS TO EXERCISE. The exercise of the Option by Buyer is
conditioned on the continuing compliance with the provisions of the License
Agreement by Buyer through the date of Buyer's exercise of the Option,
including, without limitation, timely payment of all royalty and other sums due
Math Strategies thereunder through the date of exercise; provided, however, that
Math Strategies will provide Buyer with notice of noncompliance and a reasonable
period to cure prior to enforcing this provision.
4. EXERCISE OF OPTION. Subject to the provisions of Section 3 above,
Buyer may exercise the Option by delivering written notice thereof to Math
Strategies on or before the last day of the Option Period. Exercise of the
Option shall be irrevocable and constitute the binding agreement of Buyer to
purchase the Software Products for the Purchase Price and in accordance with the
provisions hereof.
5. PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the
Software Products payable to Math Strategies at Closing shall be eight million
dollars ($8,000,000).
6. CLOSING. If Buyer exercises the Option in accordance with this
Agreement, the closing of the purchase of the Software Products ("CLOSING")
shall take place at 125 High Street, Boston, Massachusetts 02110, at the offices
of Testa, Hurwitz & Thibeault, LLP or such other time and place as the parties
shall agree in writing, on the thirtieth (30th) day next following the date of
the Option Notice, or if such day is a weekend day or a state banking holiday in
either Massachusetts or North Carolina, on the next day on which banks in both
such states are open ("CLOSING Date").
(a) Buyer Closing Deliveries. At Closing, Buyer shall execute and
deliver to Math Strategies the following:
(i) A fully executed copy of the Intellectual Property
Assignment in substantially the form of Exhibit C; and
(ii) Payment of the Purchase Price, in immediately
available funds, delivered by wire transfer and directed in
accordance with the instructions provided by Math Strategies;
and
(iii) Payment of any amounts accrued for the benefit of,
or due, Math Strategies under the License Agreement.
(b) Math Strategies Closing Deliveries. At Closing, Math Strategies
shall execute and deliver to Buyer the following:
(i) A fully executed copy of the Intellectual Property
Assignment in substantially the form of Exhibit C; and
(ii) The Software Products.
(c) Failure to Close by Buyer. If for any reason (other than a
reason for which Math Strategies is solely and directly responsible or a force
majeure event), the Closing fails to occur on or before the Closing Date and
Math Strategies has not, by written consent, extended the Closing Date, then the
Option shall lapse, the License Agreement shall continue in full force and
effect, and Buyer shall pay Math Strategies, as
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liquidated damages and not as a penalty, the sum of five hundred thousand
dollars ($500,000) (the "LIQUIDATED AMOUNT") which payment shall be Math
Strategies' sole remedy. Datawatch acknowledges and agrees that the exercise of
the Option by Datawatch will cause Math Strategies to make significant changes
to its business operations, that the failure of Datawatch to close the purchase
of the Software Products will cause significant damage to Math Strategies not
capable of being fully ascertained, and that the Liquidated Amount is reasonable
under the circumstances.
(d) Transition. During the period between the exercise of the Option
and the Closing, Math Strategies will (i) provide reasonable technical
assistance to Buyer and its personnel regarding the Software Programs and (ii)
reasonably cooperate with Buyer's efforts to employ any employees and
consultants of Math Strategies and will waive any noncompete or other
restrictions with such employees and consultants to the extent necessary for
such employment.
(e) Effect. Upon completion of the Closing, the License Agreement
shall terminate and the parties thereto (including Huger individually) shall be
released from any further obligations to each other under the License Agreement,
including, without limitation, any maintenance obligations, any rights of first
negotiation, and non-competition covenants or restrictions, provided, however
that any obligation of a party to the License Agreement to pay any unpaid
amounts due, accrued for the benefit of, or owing to Math Strategies as of the
Closing Date, shall continue until fully paid.
7. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties. Math Strategies represents and
warrants to Buyer that: (i) it has full right and authority to enter into this
Agreement, (ii) the Software Products are owned exclusively by Math Strategies
(or Huger) without any encumbrance as of the Effective Date, except for the
License Agreement, (iii) to Huger's actual knowledge, the Software Products do
not infringe any intellectual property rights of any other person or entity, and
(iv) this Agreement is a binding agreement upon Math Strategies and is
enforceable in accordance with its terms. Buyer represents and warrants to Math
Strategies that: (i) it has full right and authority to enter into and perform,
and has obtained all consents necessary to enter into and perform, this
Agreement, and (ii) this Agreement is a binding agreement upon Buyer and is
enforceable in accordance with its terms.
(b) Disclaimer. except as expressly provided herein, Neither party
makes any REPRESENTATION OR warranty of any kind, WHETHER EXPRESS, IMPLIED, OR
STATUTORY, REGARDING THE SOFTWARE PRODUCTS, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND
NON-INFRINGEMENT OF THIRD-PARTY RIGHTS.
8. CONTINUATION OF LICENSE AGREEMENT. Nothing contained in this
Agreement shall modify either party's rights and obligations under the License
Agreement, including but not limited to the obligation of Buyer to pay royalties
to Math Strategies under such License Agreement. The License Agreement shall
remain in full force an effect unless and until it is terminated or expires on
its own terms, or is terminated pursuant to the execution of the Assignment
Agreement as contemplated by this Agreement.
9. CONFIDENTIALITY. Upon Closing, the Software Products will be
confidential information of Buyer.
10. NONCOMPETE. For a period of three (3) years following the
Closing Date, neither Huger nor Math Strategies shall on their own behalf or on
behalf of any other person or entity, directly or indirectly develop,
manufacture, license, sell, lease or otherwise distribute any software products
that reasonably competes with the Software Products as they are constituted as
of the Closing Date.
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11. FURTHER ASSURANCES. At the sole cost of Buyer or its successors
and assigns, Math Strategies agrees for itself and its successors and assigns to
execute all applications, deeds or other instruments, and to do all acts,
reasonably necessary or proper to secure the transfer of the Software Products
to Buyer and its successors and assigns in the United States and all other
countries, and to vest and confirm in Buyer and its successors and assigns, the
legal title to the Software Products and to otherwise give full effect to and
perfect the rights of Buyer and its successors and assigns in the Software
Products.
12. ASSIGNMENT. Buyer may assign this Agreement only to, and solely
in whole to, a successor in interest to substantially all of the business or
assets of Buyer, whether by merger, sale of stock or assets, or otherwise,
provided, however, Buyer notifies Math Strategies of any such assignment at
least thirty (30) days prior to the effective date thereof. Any attempted
assignment or other transfer in violation of the foregoing shall be void and of
no effect. Neither Math Strategies nor Huger will transfer or assign the
Software Products to any third party without the prior written consent of
Datawatch, which consent will not be unreasonably withheld or delayed; provided
that Math Strategies and/or Huger may assign or transfer any of the software
Products or other assets of Math Strategies (subject to the provisions of this
Agreement and the License Agreement) to a corporation, limited liability
company, partnership, limited partnership, trust or other entity of which Huger
owns or controls more than fifty percent (50%) of the equity or voting rights.
13. TERMINATION OF OPTION. Anything in this Agreement to the
contrary notwithstanding, the Option shall terminate in the event of the
insolvency of Buyer or its successor in interest, the filing by Buyer or its
successor in interest of a voluntary petition in bankruptcy, or the filing
against Buyer or its successor of an involuntary petition in bankruptcy that is
not dismissed or stayed within sixty (60) days of such filing.
14. INDEMNIFICATION.
(a) General. Each party ("INDEMNITOR") shall indemnify, defend and
hold harmless the other party (including, without limitation, such other's
employees, agents, directors, officers, and proprietors) (collectively,
"INDEMNITEE") from and against any liability, damages, causes of action, claims
and expenses (including, without limitation, attorneys' fees) ("CLAIMS") that
the Indemnitee may incur as a result of any breach of this Agreement, including,
without limitation, any breach of Indemnitor's representations and/or
warranties.
(b) Buyer. In addition to and not in limitation of the foregoing,
Buyer (as Indemnitor) shall indemnify, defend and hold harmless Math Strategies
(as Indemnitee), together with its employees, agents, directors, officers, and
proprietors, from and against any and all Claims relating to the infringement of
any third party intellectual property rights arising from the sale,
exploitation, export, or any other use of the Software Products whatsoever by
Buyer, its successors, customers, employees, agents or any other person,
occurring on or after the Closing Date; provided, however, Buyer shall have no
obligation to indemnify, defend or hold harmless Math Strategies with respect to
any infringement by any of the Software Products (as they are constituted as of
the Closing Date) of any third party intellectual property rights arising from
any willful infringement of any third party patent or other intellectual
property rights by Math Strategies, or any theft of any third party trade
secrets by Math Strategies.
(c) Procedure. The foregoing indemnification obligations are
conditioned on the Indemnitee: (x) providing the Indemnitor with notice of the
relevant Claim; (y) cooperating with the Indemnitor, at the Indemnitor's
expense, in the defense of such Claim; and (z) giving the Indemnitor the right
to control the defense of any such Claim, provided that the Indemnitor may not
enter into any settlement affecting the Indemnitee's rights without the
Indemnitee's written agreement. The Indemnitee will have the right to
participate in the defense of any Claim with counsel of its choice at its own
expense.
15. COSTS. In the event a party deems it necessary to enforce the
provisions of this Agreement against the other party in a court of competent
jurisdiction or an arbitral proceeding, the prevailing party in any such
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action shall be entitled to reimbursement from the non-prevailing party for all
of the prevailing party's costs of enforcement or defense, as the case may be,
including, without limitation, attorneys' fees and court costs.
16. NOTICES. All notices, consents and approvals under this
Agreement must be delivered in writing by courier, by electronic facsimile
(fax), or by certified or registered mail, (postage prepaid and return receipt
requested) to the other Party at the address set forth in the first paragraph of
this Agreement, and will be effective upon receipt or when delivery is refused
or three (3) business days after being deposited in the mail as required above,
whichever occurs sooner. Either party to this Agreement may change its address
by giving written notice of the new address to the other Party.
17. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement, including
the Exhibits attached to this Agreement, state the entire agreement between the
parties relating to the subject matter hereof. This Agreement may be modified or
amended and rights under this Agreement waived, only in a writing signed by each
of the parties. Any waiver or failure to enforce any provision of this Agreement
on one occasion will not be deemed a waiver of any other provision or of such
provision on any other occasion.
18. SUCCESSORS. This Agreement shall bind and benefit the parties
and their respective successors and permitted assigns.
19. INDEPENDENT CONTRACTORS. The parties are independent contractors
and nothing in this Agreement shall imply any principal or agent relationship or
other joint relationship and neither party shall have the power or authority,
express or implied, to obligate the other party.
20. ARBITRATION. Except as set forth below, any dispute between the
parties shall be finally resolved by binding arbitration. The arbitration shall
be in accordance with the Commercial Arbitration Rules ("Rules") then in effect
of the American Arbitration Association ("AAA"), which shall administer the
arbitration, and act as appointing authority; provided that the arbitrator(s)
appointed with regard to the arbitration proceeding shall not be the same
persons who served as mediated in any mediation between the parties. The parties
agree to permit discovery proceedings of the type provided by the Federal Rules
of Civil Procedure both in advance of, and during recesses of, the arbitration
hearings, and any disputes relating to such discovery will be resolved by the
arbitrator(s). In the event of any conflict between the Rules and the provisions
of this Section, the provisions of this Section shall govern. If the amount in
controversy exceeds $50,000, then the arbitration shall be heard and determined
by a panel of three arbitrators selected in accordance with the procedures of
the AAA. The arbitration, including the rendering of the award, shall take place
in (i) Greensboro, North Carolina, if brought by Buyer against Math Strategies;
or (ii) Lowell, Massachusetts, if brought by Math Strategies against Buyer.
Judgment upon the award of the arbitrators may be entered in any court having
jurisdiction thereof. The parties hereby waive their respective rights to
further appeal or redress in any other court or tribunal except solely for the
purpose of obtaining execution of the judgment rendered by the arbitration
proceeding. In the event of any arbitration or other legal proceeding brought by
any party against another party with regard to any matter arising out of or
related to this Agreement, each party hereby expressly agrees that the final
award decision shall also provide for an allocation and division between or
among the parties to the arbitration, on a basis which is just and equitable
under the circumstances, of all costs of arbitration, including court costs and
arbitrators' and attorneys', accountants' and expert witness fees, costs and
expenses fees (including disbursements) incurred in connection with such
proceedings. Notwithstanding the foregoing, neither the provisions of this
Section nor the exercise of any rights hereunder shall limit the right of either
party to institute and maintain litigation in a court of competent jurisdiction
in order to obtain equitable remedies including, without limitation, attachment,
specific performance and other injunctive relief; the institution and
maintenance of such litigation shall not constitute a waiver of the right of
either party to submit any controversy or claim to arbitration as herein
provided.
21. LAW. This Agreement shall be governed by the laws of the State
of Massachusetts, without regard to its conflicts of laws provisions. The rights
and obligations of the parties under this Agreement will
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not be governed by the provisions of the 1980 United Nations Convention on
Contracts for the International Sale of Goods or the United Nations Convention
on the Limitation Period in the International Sale of Goods, as amended.
22. SEVERABILITY. If any provision of this Agreement is
unenforceable, such provision will be changed and interpreted to accomplish the
objectives of such provision to the greatest extent possible under applicable
law and the remaining provisions will continue in full force and effect.
23. CUMULATIVE RIGHTS; REMEDIES. Except as may be specifically
provided herein, the parties' rights and remedies under this Agreement are
cumulative and the election of one remedy will not preclude any other remedy.
24. NO THIRD PARTY RIGHTS. Nothing contained herein, express or
implied, is intended or will be construed to confer upon or give any person,
other than the parties hereto, any rights or remedies under or by reason of the
Agreement.
25. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which will be considered an original, but all of which together will
constitute the same instrument.
26. DATAWATCH AND PERSONICS. For purposes of this Agreement, all
covenants, agreements, warranties, representations, and other obligations of
Buyer shall be deemed to be the joint and several covenants, agreements,
warranties, representations and other obligations of Datawatch and Personics.
27. CONSTRUCTION. The section headings in this Agreement are for
convenience of reference only, will not be deemed to be a part of this
Agreement, and will not be referred to in connection with the construction or
interpretation of this Agreement. Any rule of construction to the effect that
ambiguities are to be resolved against the drafting party will not be applied in
the construction or interpretation of this Agreement. As used in this Agreement,
the words "include" and "including," and variations thereof, will not be deemed
to be terms of limitation, but rather will be deemed to be followed by the words
"without limitation." When used in this Agreement, the words "hereof," "herein,"
"hereunder" and words of similar import shall refer to the Agreement as a whole
and not to any particular provision of this Agreement.
In Witness Whereof, the parties have executed this Agreement as of
the Effective Date first above written.
THIS AGREEMENT CONTAINS BINDING ARBITRATION PROVISIONS THAT ARE ENFORCEABLE BY
THE PARTIES.
MATH STRATEGIES DATAWATCH CORPORATION
By: /s/ Raymond J. Huger By: /s/ Robert W. Hagger
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Raymond J. Huger, individually Name: Robert W. Hagger
and as a Sole Proprietorship -----------------------
Title: President and CEO
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Duly Authorized
PERSONICS, INC.
By: /s/ Robert W. Hagger
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Name: Robert W. Hagger
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Title: President
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Duly Authorized
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EXHIBIT A
LICENSE AGREEMENT
SOFTWARE DEVELOPMENT AND MARKETING AGREEMENT
This agreement is made and entered into as of January 19th, 1989 by Personics
Corporation, a Delaware Corporation having its principal place of business at 63
Great Road, Maynard, Massachusetts 01754, and Raymond Huger, a sole proprietor
doing business as Math Strategies having its principal place of business at 604
Green Valley Road, Suite 306, Greensboro, North Carolina 27408.
RECITALS
A. Huger is in the process of developing a software product presently known
as "Down-To-Size."
B. Personics wishes to manufacture and market such software under an
exclusive license granted by Huger.
In consideration of the mutual promises contained herein, Personics and
Huger agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
(a) "Down-To-Size" ("DTS") shall mean the computer software product
presently known as "Down-To-Size" as more fully described in
Exhibit A to this Agreement. "Down-To-Size" shall also mean all
versions of "Down-To-Size" as defined in subparagraphs (i), (ii)
and (iii) below, as well as any improved versions of the original
computer software product ("Down-To-Size") developed by Huger.
(i) "DOS version" shall mean the version or versions of DTS that
run on personal computers and network workstations whose
operating system is DOS, OS/2 or another operating system
that is generally regarded as a successor or extension to
DOS or OS/2.
(ii) "non-DOS version" shall mean the version or versions of DTS
that run on personal computers and network workstations
whose operating system is not DOS, OS/2 or a successor
operating system. (Clarifying examples: A version of DTS
that runs on a standard Apple Macintosh would be regarded as
a non-DOS version. A version of DTS that runs on an Apple
Macintosh operating in DOS emulation mode would be regarded
as a DOS version.)
(iii) "Host version" shall mean the version or versions of DTS
that run on mainframe and mini computers supporting remote
terminals, PC's and workstations.
(iv) "the commercial introduction of DTS" shall mean the date on
which the product announcement press release is made by
Personics.
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(b) Specifications. "Specifications" shall mean the description of
Down-To-Size set forth in Exhibit A to this Agreement.
2. Development of Down-To-Size for Personics; License; Exclusivity.
(a) Development. Huger shall, at his own expense, develop DTS in
accordance with the Specifications set forth in Exhibit A.
them in an indexed subsystem.
end-user documentation and packaging materials for DTS which meet
the same standards for quality and production value as found in
other Personics products such as "LOOK & LINK" and "@BASE."
Personics shall coordinate in-house testing and field testing of
DTS during the development period.
(b) License. Personics shall have and Huger hereby grants to Personics
the exclusive (subject to subparagraphs (c) and (d) below)
world-wide right and license (i) to reproduce, market, copy,
publish, sell copies of, license and distribute DTS and (ii) to
sublicense others to reproduce, market, copy, publish, sell copies
of, license and distribute DTS; provided however, that any
licensing or sublicensing in accordance with this paragraph shall
not impair Huger's right to receive royalties as defined in Exhibit
B hereto for products distributed in any way by licensees or
sublicensees of Personics.
(c) Exclusivity. The license granted under this Agreement is exclusive
and shall continue to be exclusive as long as this Agreement is in
effect provided that Personics meets the following minimum
performance tests.
(i) Minimum Project Expenditures. Between the date of this
agreement and the end of the seventh month following the
commercial introduction of DTS Personics shall spend not
less than $140,000 on the development and market
introduction of DTS. Such expenditures may include, but are
not limited to, development of DTS documentation and
packaging materials, preparation of advertising and
promotional materials, placement of product introduction
advertising (first six month media costs), tooling and
pre-launch inventory investment, and other direct
out-ofpocket costs associated with the DTS project.
(ii) Minimum Advertising Exposures. Personics shall provide for
not less than 12 advertising exposures per year of DTS in
major computer publications such as PC Magazine, PC
Computing, ComputerWorld, InfoWorld, Byte, PC Week, Personal
Computing, Lotus and PC World. Such exposures may include
single and multiproduct ads in which DTS is featured.
Exposures shall be counted quarterly beginning at the end of
the first quarter following the commercial introduction of
DTS.
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Period Minimum # of Exposures
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1st quarter following introduction 3
1st and 2nd quarters (cumulative) 5
1st, 2nd and 3rd quarters (cumulative) 8
First full year (cumulative) 12
Subsequent years (rolling 12 months) 12
(iii) Minimum Distribution. Personics shall provide for national
distribution of DTS through at least one major software
reseller such as Softsel, Micro D, Kenf11, Ingram, Corporate
Software and Egghead Discount Software. Distribution shall
be defined as the inclusion of DTS in the reseller's price
book or catalog. Such distribution must be in place by the
end of the 12 month period following the commercial
introduction of DTS, beyond which time no more than one
quarter may pass without such distribution in place.
(d) Rights Retained by Huger. The exclusive license granted to
Personics under this Agreement shall exclude (i) non-DOS versions
of DTS and (ii) host versions of DTS specifically designed to run
on Wang VS computer systems. Huger shall retain the exclusive right
to manufacture and market such nonDOS and Wang versions of DTS,
subject to Paragraphs 9 and 11.
3. Delivery.
(a) Deliverable Items. Huger shall deliver DTS in accordance with the
Specifications, and Huger shall test DTS and all deliverable items
thoroughly as set forth in the Specifications prior to delivery.
The deliverables shall include the following items:
(i) Complete source code listing, including hardcopy and IBM PC
diskette versions. The source code package should also
include explanatory comments and a description of the
operation of the program in the English language.
(ii) Debugged (tested) batch files for these tasks:
a) Read files from source diskettes, build required file
structure on hard disk.
b) Print all source files and directories in a form
convenient for reference.
c) Compile, assemble and link the source code to produce
the program binaries.
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(iii) Program binaries required by Personics to reproduce, market,
copy, publish, sell copies of, license and distribute DTS.
(b) Delivery Schedule. Huger shall in good faith do his best to provide
the deliverable items in conformance with the Specifications and
Development Schedule set forth in Exhibit A. The items listed in
(3)(a) shall also be delivered by Huger upon completion of upgrades
and new versions of DTS.
(c) Failure to Deliver. If Huger fails to deliver the completed items
listed in (3)(a) within 180 days after their expected delivery date
as set forth in the Development Schedule, or if the completed work
is not materially in conformance with the Specifications, Personics
shall have the option, upon written notice within thirty (30) days
thereafter to (i) give Huger sixty (60) days following receipt of
written notice to supply, correct, or complete DTS or (ii) cause a
third party to do so and to deduct any amount equal to Personics'
reasonable costs, as determined by industry standards, incurred
therein from any payments due Huger under this Agreement. Huger
shall cooperate with Personics if third-party development is deemed
to be necessary under this paragraph. In such case, Personics will
permit Huger to oversee any development work undertaken by the
third-party.
4. Acceptance of Completed Work. The completed work (DTS), as developed by
Huger or third-party under the direction of Huger shall be deemed
accepted by Personics, unless within thirty (30) days of delivery (and
written notice thereof) to Personics, Personics gives Huger written
notice that DTS does not materially conform to its specifications. In
such event, Huger shall have sixty (60) days from receipt of such notice
to make and submit to Personics such changes as shall be reasonably
required to correct the material deficiencies set forth in the notice.
In the event that such changes are submitted to Personics by Huger,
Personics shall have an additional thirty (30) day period in which to
reexamine and retest DTS. If no changes are submitted, or the changes
submitted do not correct the deficiencies, then Personics may, at its
option, after written notice to Huger, correct or complete DTS, with the
cooperation of Huger, and deduct an amount equal to Personics'
reasonable costs incurred from any payments due Huger under this
Agreement.
5. Marketing.
(a) Marketing Effort. Personics agrees that it will use its best good
faith efforts to market DTS through sales and/or licenses.
Personics and Huger shall cooperate to permit Personics to commence
marketing. Personics makes no representations or warranty that DTS
will be successfully marketed or that any minimum level of sales or
licensing will be achieved except to the extent that Personics must
meet certain minimum performance obligations as described in
Paragraph 2(c) in order to retain exclusivity.
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(b) Marketing Rights. Personics shall have the right to prepare, copy,
publish, sell, distribute and license DTS throughout the world (1)
in any variety of forms, including without limitation human and
machine readable forms, binary code forms, subrecorded forms such
as cassettes, tapes and disks, and solid state forms such as
read-only memories, and (2) by any variety of methods, including
without limitation distribution of copies (either separately or
with other works), licensing or sublicensing and offering the use
of DTS through a timesharing or videotext service. All aspects of
the distribution and marketing of DTS shall be in Personics' sole
control including without limitation determining the versions and
upgrades to be prepared and marketed, the methods of marketing,
pricing, naming, packaging, labeling and identification,
protection, advertising, terms and conditions of sale and/or
license, collection of customers' names and use of warranty or user
registration procedures. Personics shall consult with Huger
regarding pricing, documentation, support, packaging, advertising,
and promotion concepts and designs related to DTS, or to Huger.
(c) Personics shall have the right to use, publish and permit others to
use and publish Huger's name, likeness, voice, biographical
material, or any reproduction or simulation thereof in connection
with the marketing, advertising, sale, distribution, exploitation,
production and manufacture of DTS, as reasonably may be necessary,
provided that such use shall be subject to Huger's approval which
approval shall not be unreasonably withheld.
6. Royalties and Expense Reimbursements.
(a) Huger shall earn a royalty calculated as the greater of (i) a
minimum per unit royalty or (ii) a percentage of Net Receipts,
based on the sale of DTS by Personics or an affiliate owned or
controlled by Personics or parent company to an unaffiliated
customer, as set forth in Exhibit B(1). (Net Receipts shall be
defined as gross receipts less credits or refunds for returns, and
exclusive of reasonable shipping costs, reasonable insurance, and
sales, use, excise and other taxes reimbursed by customers, from
sales of DTS.) In some cases, DTS may be sold under volume
site-license agreements. In such cases, Personics shall compute
royalties for such sales based on the percentages presented in
Exhibit B(2). (For each site-license, Net Receipts shall be defined
as above where gross receipts is defined as all receipts
attributable to the site-license purchase transaction.)
(b) Royalties shall also be earned by Huger for sales of upgrades to
previous owners as set forth in Exhibit B, except that the minimum
unit royalty for such upgrades shall be computed as follows:
(UPGRADE MINIMUM ROYALTY) = (DTS MINIMUM ROYALTY) X (UPGRADE LIST
PRICE) / (DTS LIST PRICE)
5
(c) If DTS is sold or licensed in a package or on a single medium for a
single price with other Personics products, or with the products of
an affiliate owned or controlled by Personics or parent company,
the Net Receipts attributable to DTS shall be determined by
prorating the receipts from the package or medium according to the
suggested retail prices established for the separate products when
sold separately.
(d) Payments due Huger shall be calculated on a calendar quarterly
basis, and shall be made within forty-five days after the close of
each calendar quarter.
(e) At the time of payment Personics shall deliver to Huger a report
which shall provide all reasonably necessary information for
computation of such payments.
(f) An auditor or certified public accountant who is retained by Huger
on other than a contingent fee basis and is reasonably acceptable
to Personics may, upon reasonable notice, and during normal
business hours, but only once in each calendar quarter, inspect the
records of Personics on which such reports are based, provided that
such accountant or auditor shall hold such reports in strict
confidence except as necessary to report to Huger and Personics on
the accuracy of Personics' reports. If a discrepancy is discovered
by Huger's auditor or CPA in the royalty amount reported by
Personics, then Personics shall pay the discrepancy and reimburse
Huger for reasonable accounting fees associated with the discovery.
(g) Replacement and Promotional Copies. Net Receipts shall not include
any receipts from copies of DTS which are distributed by Personics
to existing customers for free or for a nominal fee approximating
Personics manufacturing and handling costs as back-up, replacement
or corrected copies whether provided to such customers under a
back-up, warranty or maintenance policy, and no amount shall be
credited or paid to Huger with respect to any receipts from no more
than 1,000 copies per year per version supplied for free or for a
nominal fee for promotional purposes to the press, trade, sales
representatives or potential customers. Huger shall be entitled up
to 50 free copies per year of DTS. Huger's copies are not for
resale.
(h) Personics shall reimburse Huger for reasonable travel expenses
incurred in association with the development and\or marketing of
DTS. In addition, Personics shall pay Huger a reasonable per diem
for any time spent out of his office promoting or supporting DTS.
(i) Miscellaneous. Amounts received by Personics as deposits or
advances shall not be deemed to have been received until deliveries
have been made against such deposits or advances. In the event of a
partial payment of an invoice which includes DTS and other items,
Personics shall calculate its Net Receipts by prorating the payment
received over the invoiced
6
amounts for DTS and other items absent specific acceleration by the
customer. Amounts received by Personics in foreign currencies shall
be deemed converted into United States Dollars at the average
exchange rates used by Personics in its financial statements for
the month of receipt, except that "blocked funds" which cannot be
remitted to the United States in Dollars shall not be deemed
received until they can be so remitted, provided that, at Huger's
request and if reasonably practicable, Personics shall deposit in a
foreign back account established by Huger the amount due in the
foreign currency of the royalties that would be due Huger with
respect to such blocked funds.
7. Maintenance. Huger shall promptly deliver to Personics, at no charge to
Personics, all corrections or modifications necessary to correct any
errors in DTS developed by Huger, of which errors Personics notifies
Huger during the period while payments are accruing to Huger hereunder.
As used in this Paragraph, the term "errors" shall mean any deviations
from the Specifications and any deviations from commonly accepted
standards for normal and correct operation of computer programs, even if
not explicitly mentioned in the Specifications, such as any cases where
DTS abnormally ceases functioning, produces incorrect or misleading
information or erroneously interprets information given to it, and
similar deviations.
8. Continuation Engineering and Support.
(a) Huger agrees to provide continuation engineering services, as
reasonably requested by Personics, and with reasonable notice, at
any time during the commercial life of DTS. Such services may be
employed for product maintenance, bug fixes, upgrades,
enhancements, extensions, development of new versions and other
modifications to the DTS product. At his option, Huger may
subcontract such continuation engineering services, subject to
Personics' approval of the subcontractor.
(b) Huger agrees to provide consulting services, upon reasonable
request by Personics, for the purpose of educating Personics
personnel in regards to DTS operation, at no charge to Personics.
9. Protection of Proprietary Rights. Huger and Personics acknowledge that
DTS is of a character which is or may be protectable by patent, trade
secrecy and/or copyright under the laws of the United States and other
countries. Personics shall treat documentation regarding DTS as
proprietary, confidential information, especially listings of source
code for DTS, not including instructions, manuals or other elements of
the publicly marketed form of the work. Personics shall use reasonable
efforts to obtain and maintain proprietary protection for DTS consistent
with Personics' ability to effectively market DTS in each country in
which DTS is distributed. Huger agrees to cooperate with Personics, at
Personics' expense, in obtaining patent, copyright or other
7
statutory protections for DTS in each country in which it is sold,
distributed or sublicensed, and Huger hereby authorizes Personics to
execute and prosecute in Huger's name as author or inventor and/or
Personics' name as exclusive licensee an application for patent or
copyright registration of DTS, and Huger shall execute such other
documents of registration and recordation as may be necessary to perfect
in Personics, or protect, the exclusive rights granted Personics
hereunder in each country in which such items are sold or distributed.
Personics shall place or cause to be placed in and on each copy that is
distributed an appropriate copyright notice.
Huger shall be the owner of the copyright and all other proprietary
rights in DTS. Personics shall be the owner of the copyright and all
other proprietary rights in the user documentation and promotional
materials for DTS. Personics agrees that Huger may use portions of the
DTS documentation in connection with his sale of non-DOS and Wang VS
versions of DTS. Huger agrees that if substantial portions of such
documentation are used, Huger will negotiate in good faith with
Personics to determine a fair price to be paid by Huger to Personics for
use of such documentation.
Huger represents and warrants to Personics that, to the best of his
knowledge, the DTS code developed under this agreement will be the
original work of Huger, or programmer(s) engaged by Huger, or will
employ third-party code licensed to Huger, and will not infringe upon
any U.S. patent, copyright, trade secret, or other proprietary rights of
others.
10. Nondisclosure. Huger agrees that the trade secrets and technology
embodied in DTS to which Personics acquires the rights hereunder, any
information disclosed by Personics to Huger or Huger's accountants,
auditors or attorneys under Paragraph 6 and any other information
concerning Personics' marketing plans, Personics' existing or future
products, any methods of protection employed by Personics to prevent
unauthorized duplication of software programs, the terms of this
Agreement, and any other confidential business or technical information
disclosed by Personics to Huger in the futherance of this Agreement
shall be held in strict confidence and shall not be disseminated or
disclosed to any other party without the express written consent of
Personics. Personics agrees that the source code of DTS, the unique
programming techniques or underlying algorithms developed independently
by Huger, third-party manufacturers' existing or future plans disclosed
to Huger, any development aids developed by Huger and information
identified as confidential when disclosed by Huger to Personics in the
futherance of this Agreement shall be held in strict confidence. The
obligations of this Paragraph shall survive the expiration or
termination of this Agreement. Notwithstanding the foregoing, if this
Agreement is terminated or Personics' license becomes nonexclusive,
Huger may disclose to third parties such information that is proprietary
to Huger as is reasonably necessary to enter into license agreements
with such third parties.
8
11. Trademarks. Any trademarks adopted and used by Personics in the
marketing of DTS shall be the property of Personics. Personics shall
have the sole responsibility for ensuring that any such trademarks do
not infringe the rights of third parties. Huger understands and agrees
that he may not use the trademarks of Personics in any way without
permission of Personics.
12. Infringement by Others. Each party will notify the other of any
infringements of rights in DTS that come to such party's attention. In
the event of any infringement of any rights granted to Personics
hereunder, Personics shall have the first option to bring any action for
such infringement on behalf of itself and Huger, and Huger shall
cooperate fully with Personics in such action; and in such event
Personics shall bear the expenses of the action and shall recover its
expenses from any sums recovered in the action. The balance of the
proceeds of such action shall be deemed to be Net Receipts within the
meaning of Paragraph 6 and shall be divided between Personics and Huger
according to the percentages specified in Exhibit B(1). If Personics
declines in writing to bring any such action, Huger may proceed and
shall bear all expenses of the action, and shall recover his expenses
from any sums recovered in the action. The balance of such recovery, if
any, shall be deemed to be Net Receipts and shall be divided as provided
above.
13. Term and Termination.
(a) Term. The term of this Agreement shall commence on the date first
set forth above and shall continue for ten (10) years thereafter,
unless earlier terminated as provided in this Agreement. Upon
expiration of such initial term, this Agreement and the licenses
granted Personics hereunder shall automatically be renewed for
successive one year periods unless either party notifies the other
in writing at least 90 days prior to the expiration of such initial
or any renewal term that it elects not to renew this Agreement.
(b) Breach by Personics. In the event of (i) the bankruptcy of
Personics (ii) the failure to pay any sums hereunder within thirty
(30) days from their due date or (iii) a material breach by
Personics of a material provision hereof (which breach is not cured
within sixty (60) days after written notice thereof by Huger), then
Huger may, effective sixty (60) days after written notice thereof
to Personics, terminate this Agreement, and the rights granted to
Personics hereunder shall thereupon revert to Huger as provided in
subparagraph 13(f) hereof. A good faith dispute as to the
determination or calculation of payments due Huger hereunder shall
not be considered a breach of this Agreement provided that
Personics deposits the disputed amount in an interest bearing
escrow account with a commercial bank and offers to arbitrate the
dispute in accordance with the Rules of the American Arbitration
Association in Boston, Massachusetts. In addition to or in lieu of
his rights to terminate this Agreement upon a material breach by
Personics, Huger shall have the right
9
to pursue any remedies Huger may have at law or in equity, provided
that in no event will Personics be liable to Huger for incidental
or consequential damages or the loss of anticipated profits arising
from any breach of this Agreement by Personics.
(c) Breach by Huger. In the event of a material breach by Huger of a
material provision hereof, which breach is not cured within sixty
(60) days after written notice thereof by Personics, then Personics
may, effective sixty (60) days after written notice thereof to
Huger, terminate this Agreement, and the rights granted to
Personics hereunder shall revert to Huger as provided in
subparagraph 13(f) hereof. In addition to or in lieu of its rights
to terminate this Agreement upon material breach by Huger,
Personics shall have the right to pursue any remedies at law or in
equity, and Personics shall pay into an interest bearing escrow
account with a commercial bank any payments due Huger hereunder as
security for payment of any damages arising from any material
breach by Huger of any provision of this Agreement. Upon resolution
of the claim, the amounts in escrow INCLUDING interest thereon
shall be distributed to Huger after deduction of the amounts, if
any, required to be paid to Personics. Huger shall not be liable to
Personics for incidental or consequential damages or the loss of
anticipated profits arising from any breach of this Agreement by
Huger.
(d) Voluntary Termination by Personics. Notwithstanding subparagraph
(a) above, if after executing this Agreement Personics determines
that due to changes in market conditions or for any other reason
Personics will not market or will not continue to market or
distribute DTS, Personics shall have the right, without further
liability to Huger except as specified below, to terminate this
Agreement by giving written notice to Huger.
(e) Voluntary Termination by Huger. Notwithstanding subparagraph (a)
above, if after executing this Agreement Personics does not meet
the Minimum Project Expenditures obligation defined in Paragraph
2(c)(i), Huger shall have the right, if exercised within the first
10 months following the commercial introduction of DTS, without
further liability to Personics except as specified below, to
terminate this Agreement by giving written notice to Personics.
(f) Effect of Termination. Upon any termination of this Agreement: (1)
the licenses granted in Paragraph 2 shall terminate and Personics
shall promptly return to Huger any development and DOCUMENTATION
work in process, and all master copies, source code, and production
materials relating to DTS; (2) Personics shall promptly execute and
deliver to Huger all documents necessary to assign to Huger
Personics' interest in any patent, copyright or trademark in such
works. (3) all rights and licenses granted by Personics to third
parties
10
shall continue in full force and effect; (4) Personics shall in any
event have the right to retain copies of any version of DTS for
Personics' own use and for the purpose of providing support to its
then existing customers; and (5) Personics' obligation to pay Huger
royalties then due or which may thereafter become due under
Paragraph 6 with respect to Net Receipts received by Personics
shall continue.
14. Right of First Negotiation. Provided that the licenses granted hereunder
are exclusive, if Huger develops any new software product or products,
he will be obligated to negotiate in good faith with Personics for at
least thirty (30) days after the demonstration by Huger of a working
prototype, for exclusive distribution rights to such product, before
negotiating with any other potential publisher or distributor. If, after
negotiating with Personics without reaching an agreement, Huger
subsequently modifies the new product in any significant way, Huger must
once again offer the new modified product to Personics under the terms
of this Paragraph.
15. General.
(a) Entire Agreement. This Agreement including Exhibits A and B states
the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior negotiations,
understandings and agreements between the parties hereto concerning
the subject matter hereof. No amendment or modification of this
Agreement shall be made except by an instrument in writing signed
by both parties.
(b) Force Majeure. No party shall be deemed in default of this
Agreement to the extent that performance of their obligations or
attempts to cure any breach are delayed or prevented by reason of
any act of God, fire, natural disaster, accident, or act of others
beyond the control of such party ("Force Majeure"), provided that
such party gives the other party written notice thereof promptly
and, in any event, within fifteen (15) days of discovery thereof
and uses its best efforts to cure the default for a period equal to
the duration of the Force Majeure but not in excess of six (6)
months.
(c) Assignment. This Agreement may not be assigned in whole or part by
either party without consent of the other party, which consent
shall not be unreasonably withheld, except that Huger may assign
(subject to any rights of Personics) Huger's interest in all or
part of the payments due Huger hereunder upon notice in writing to
Personics and Personics may assign (subject to any rights of Huger)
any or all of its rights under this Agreement to any subsidiary or
affiliate or to any third party which succeeds to the business of
Personics by operation of law, who purchases or otherwise acquires
substantially all of the assets of Personics or a subsidiary or
affiliate thereof and assumes such party's obligations hereunder,
upon written notice to Huger. As used in this subparagraph,
"subsidiary" shall mean any company which is
11
controlled, directly or indirectly, by the relevant party, and
"affiliate" shall mean any company which controls, is controlled by or
is under common control with such party where "control" shall mean
possession of more than fifty percent (50%) of the equity interest or
voting power of the company.
(d) Governing Law. This Agreement shall be governed by and interpreted
in accordance with the substantive laws of the Commonwealth of
Massachusetts.
(e) Severability. Should any provision of this Agreement be held to be
void, invalid or inoperative, the remaining provisions of this
Agreement shall not be affected and shall continue in effect as
though such provisions were deleted.
(f) Notices. Any notice required or permitted to be sent hereunder
shall be deemed delivered if hand delivered or if mailed, postage
prepaid, by registered or certified mail, return receipt requested,
to any party at the address listed above, or such other addresses
which either party may so notify the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PERSONICS CORPORATION
By: /s/ Marc Peterson /s/ Raymond J. Huger
------------------------------- -----------------------------
Raymond Huger
Name: Marc Peterson
-----------------------------
Title: President
----------------------------
12
Exhibit A - Specifications
Marketing Overview Page A-2
Our Customer
His Alternatives
Marketing Handle
Application Scenarios Page A-3
Functional Specification Page A-4
User Interface Page A-5
Compatibility
Development Schedule
Deliverable Product
Defining the Input Page A-6
Customizing the Output Page A-7
A-1
MARKETING OVERVIEW
------------------
The Environment
- ---------------
In the corporate/institutional marketplace the primary data storage machine is a
minicomputer or mainframe. Paradoxically, the primary data analysis machine is
the PC. This creates an ongoing need to download information from mainframe to
PC.
Downloading has two components, data transfer and data query. The former is
generally addressed as a byproduct of the termainal emulation process. This is
to say, because no one wants two workstations on his desk, the PC is given a
board and terminal emulation software that allow it to communicate with the
mainframe. This is sometimes done through a LAN gateway but the effect is the
same - the PC can log onto the mainframe and run a job. One function within
terminal emulation generally PROVIDED is file transfer.
The data query function is more problematic. The user will either use custom
mainframe software or a query language. We believe that neither approach
addresses the real need of the PC user. This is because most PC users view a
mainframe information system not as a series of files but as reports that come
out on green and white paper. These reports give the user highly selected,
sorted, joined, and summarized views of the information system. However, since
these reports were meant to be read by people not by machines it can be
difficult to capture the data they contain in a way that PC programs such as
1-2-3 can exploit. We want to give the user this capability with Down To Size.
Our Customer
- ------------
The customer profile is the non DP professional in a large organization who
wants to use mainframe data as a starting point for some ad hoc work in a PC
package.
His Current Alternatives
- ------------------------
1. Rekeying data from a printou .
2. Scanning the data via OCR. 3. Using 1-2-3 Data Parse.
4. Custom software on mainframe or PC. This can be difficult on both mainframe
and PC because of the need to write the WK1 format. The first time you do this
it is very difficult especially the floating point numbers in their IEEE 64 bit
format.
5. Zeno. This PC product is now being reviewed.
Marketing Handle
- ----------------
Show a big pile of paper as input, a nice spreadsheet as output, and tell him we
will cut it Down To Size.
A-2
APPLICATION SCENARIOS
---------------------
1. Inventory. Distributor keeps his inventory on a VAX. Turnover is bad. Wants
sales manager to propose disposition of all stock with value greater than
$50,000.
Solution: Download Stock Status Report to laptop. Select DESCRIPTION, ON
HAND, ON ORDER, YTD SALES UNITS. Bring into 1-2-3. Walk the floor with plant
manager verify On Hand note condition of goods. Make report to VP finance
using 1-2-3.
2. Asset management. Mortgage finance company wants to determine the effect of
a law changing state tax depreciation.
Solution: Download 1987 State Tax Payment Report. Select all records whose
STATE=46. Select LEASE NUMBER, LEASE TERM, ACCUM DEPRECIATION, DATE
PURCHASED, 1987 PROPERTY TAX. Add columns with current depreciation schedule
and proposed.
A-3
FUNCTIONAL SPECIFICATIONS
-------------------------
INPUT
- -----
Limit line length to 255 characters (132 is typical).
User tests by "COPY FILE.DAT PRN".
OUTPUT
- ------
WK1, DBF, Comma Delim ASCII.
Also possibly: Supercalc, DIF, MACINTOSH TAB-TEXT.
PRIMARY FUNCTIONS
- -----------------
Recognize record types via masking mechanism on first line of record.
Select records via logical filtering mechanism similar to @BASE criteria.
Output records per output specification.
USER ACTIVITIES
- ---------------
Specify input & output file names.
Optionally allow loading of parameters
input template
Masks
Fields
selection criteria boolean string
and or
> >= < <= <> =
()
output specifications
field names
field selection
field order
format (eg. LOTUS date or number of decimals)
Optionally create/edit parameters
Execute to create the output file from the input file in terms of the
parameters.
Optionally save parameters
A-4
USER INTERFACE
--------------
MENU STRUCTURE Have yet to determine whether traditional 1-2-3 style or framer.
HELP On line, context sensitive. Get to Help with Fl. Exit from Help with Esc.
INPUT TEMPLATE See "Defining the input"
REPORT VIEW
To see the effect of the current parameters, user could scroll through the
input.
Would have option of seeing effect of all parameters or just Page title, or
A heading, etc.
Would have the option of "emphasizing" either the fields or the
prototype sets. For B&W monitor emphasis would be reverse video. For color
monitors the various levels would determine colors. For example: Backround
White, Page title Brown, A heading Blue, B heading Green, C Heading Yellow,
Detail Red.
SPREADSHEET VIEW To see what has been selected user could scroll through the
output. Each record would be a row each field would be a column.
MASK TESTING Done with report view- prototype option.
FIELD TESTING Done either in report or spreadsheet view.
RECORD SELECTION CRITERIA See "Customizing the output"
CUSTOMIZE FIELDS See "Customizing the output"
GO The execute function will return back to menu. Bar graph showing %completion
will be included.
COMPATIBILITY
-------------
Program will be written in C. Compilation will be optimized for 80286 but will
also support 8088 and 80386. As a standalone program it should be able to work
with all levels of MSDOS and PCDOS. if possible will test with OS/2.
Explicit Ultravision support will make 132 column view easier.
DEVELOPMENT SCHEDULE
--------------------
Deadline is July 1, 1989. Intention is to deliver fully functional main program
by April 15, 1989. The installation batch procedure, security, and example files
are to be determined.
Whenever requested will send current version of main program.
DELIVERABLE PRODUCT
-------------------
Product to be delivered debugged with initial testing done by developer. Bug
fixes by developer as soon as possible.
A-5
DEFINING THE INPUT
------------------
The input template is a set of parameters that constitute a view of the input
file. The use of the name, template, is intended to convey the idea of drawing
boxes around only the important data in the input file.
In a very short input file, such as a one page balance sheet, one could have a
template that would cover the whole file. Usually, the report will be longer and
less predictable in length. For this reason the template describes only a
section of the input file and then describes how the patterns in that section of
the report are repeated throughout.
These repeating sections are most easily defined by using a sample from a
typical input file. These samples are called prototypes. If the input file were
one column out of the yellow pages a prototype would be one company's address
and phone number. By drawing one box around the address and another around the
phone number the pattern for all lines containing the fields, address and phone
number, would be established.
In addition to drawing boxes around the fields, it is necessary to tell
Down-To-Size where a repetion of the desired data is to begin. In the yellow
pages example it is necessary to distinguish between the address and phone
number lines and the advertisements. To do this Down-To-Size uses a mask to look
for a repeating character pattern in each line. In, the yellow pages
Down-To-Size might be told to look for "three digits, a dash, and then four more
digits" on the right side of a line.
Since the designer of the input file might have had many records that shared
some common data fields, he might have chosen to put this common data in a
heading over the data. Since Down-To-Size wants to create a data set where each
record can stand on its own and not within a context, a method is needed to
append fields from these headings to the unique detail data.
These headings can exist at several levels within the data. Also some heading
data may be repeated on every page in the title lines at the top. For this
reason Down-To-Size needs to be able to distinguish several different types of
headings repeating throughout the input file. The input template uses the same
method for these headings as for the detail data. A prototype is selected and
used-to help create the mask and fields.
In a consolidated yellow pages example the title at the top of each page might
show the name of the town. The first heading might be Restaurants, the second
heading might be Pizza Hut, the detail might have the five locations with phone
numbers. To analyze the data out of the context of the yellow pages a typical
record would be.
Greensboro, Restaurants, Pizza Hut, 600 College Road,294-6298
Only the last two fields come from the detail record but without the supporting
heading information they are useless. Similarly, the heading information has no
value unless it is attached to usable detail.
A-6
CUSTOMIZING THE OUTPUT
----------------------
Down-To-Size will not work unless the user explicitly defines the input. The
output, however, can be created using default values. Many users will want to
customize the output. There are two forms of customization, record selection
criteria and field customization.
RECORD SELECTION CRITERIA
- -------------------------
For large input files the user may not want all possible records. The masks can
provide a rudimentary record selection capability. Since masks rely on character
string matching on the first line of a record set, mask based record selection
is frequently inadequate.
Down-To-Size will give the user the ability to associate alias names with the
fields defined with boxes on the input template and use these names in boolean
logic strings for record selection. The format for record selection will follow
that of @BASE criteria.
This record selection will not be limited to detail records but will extend to
heading fields. In the yellow pages example we might choose "all attorneys and
physicians whose phone number starts with 855 or 273".
FIELD CUSTOMIZATION
- -------------------
There are several ways Down-To-Size will help the user to exercise control over
the output. These are:
o Output order. The default order is primary by level (Page Heading, A
Heading, B Heading, C Heading, Detail), secondary by input location. The
user will be able to overide this default order.
o Field off/on. By default it is assumed that all input fields are to be
output. There are at least two occasions when the user will not want to
output an input field. The first is when the input template has been
defined in general without the needs of a particular user in mind. The
second is when an' input field is used in the record selection criteria but
is not needed in the output file.
o Output format. By default Down-To-Size will take each field and try to
convert it to number, if this is impossible the field will be interpreted
as a label. Instead the user may want to force certain numbers, such as
account numbers, to be interpreted as labels. Also the user may want to
translate dates into LOTUS date format. For these reasons the user will be
able to explicitly state output format.
o Field alias. The user may want to give names to the fields. Since the
official Down-To-Size field names will be simple numeric ones (e.g. Al, A2,
etc.), the names supplied by the user are called aliases. The aliases will
be helpful in defining selection criteria, as headers over the first row of
spreadsheet output, and as DBF field names.
A-7
Exhibit B(1)
Royalty Percentage Applied to Net Receipts
Product Royalty - The Greater Of:
- --------------------------------------------------------------------------------
DTS - DOS Version 10% of Net Receipts
or
$22 per unit.
Exhibit B(2)
Royalty Percentage Applied to Net Receipts
For Volume Site-License Agreements
Product Royalty:
- --------------------------------------------------------------------------------
DTS - DOS Version 12% of Net Receipts
DTS - Host Version 24% of Net Receipts
AGREEMENT BETWEEN MATH STRATEGIES AND PERSONICS CORPORATION
OVERVIEW
This agreement is an amendment to the "Software Development and Marketing
Agreement" entered into January 19, 1989 by the parties.
1. DEFINITIONS.
"Monarch for Windows" ("MFW") shall mean the version of the Monarch computer
software product designed for the Microsoft Windows environment. The features of
MFW shall be similar to Monarch 1.1 but shall additionally include others
consistent with the monarch mission of allowing the user to view, manipulate,
and extract text file information.
"Optical and Archiving Product" ("OAP") shall refer to an as yet undeveloped
product idea whose primary mission shall be the creation, indexing, and
simultaneous access to an information warehouse based on a large number of text
or other files.
2. INCLUSION.
This agreement is for the development and marketing of MFW not OAP. Regarding
OAP both parties acknowledge a common interest in such a project and agree to
consult with the other before either pursues OAP without the participation of
the other.
3. ROYALTIES.
Product Royalty
-----------------------------------------------------------------------
MFW The greater of 12% Net
Receipts or $25 per unit.
MFW - Site License agreements 12% of Net Receipts.
4. EXPENSE REIMBURSEMENTS.
a) Personics shall advance to Math Strategies funds to offset expenses
Math Strategies shall have for:
(i). Payments to Math Strategies employees or contractors other
than Mr. Huger himself who are directly involved in the
programming of MFW.
(ii). Computer hardware to support MFW development.
(iii). Design Expenses.
MATH STRATEGIES/PERSONICS CORPORATION AGREEMENT - PAGE 2
b) The above advances shall cease upon 60 days notice by Personics or
upon commercial introduction of MFW.
c) the advances shall be repaid to Personics by deducting them from
quarterly royalty payments for MFW. However, no more than one third
of a quarter's royalty payment can be so deducted.
5. DESIGN EXPENSES.
Personics and Math strategies will equally share the cost of a MFW designer. The
designer shall be retained and report directly to Personics. Math Strategies
authorizes Personics to spend up to $10,000 as the Math Strategies share of the
total expense for the designer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date indicated below.
PERSONICS CORPORATION
By: /s/ Marc Peterson Date: 3/5/92
------------------------------- -----------
Marc Peterson
MATH STRATEGIES
By: /s/ Ray Huger Date: 3/6/92
------------------------------- -----------
Ray Huger
Amendment To Software Development and Marketing Agreement
This document serves as an amendment to the "Software Development and Marketing
Agreement" dated January 19, 1989, and amended March 6, 1992.
The parties agree to extend the term of the Agreement until January 19,
2009. The following paragraph shall be substituted for paragraph 13(a):
13a. Term. The term of this Agreement shall commence on the date first
set forth above and shall continue until January 19, 2009, unless
earlier terminated as provided in this Agreement. Upon expiration
of such initial term, this Agreement and the licenses granted
Personics hereunder shall automatically be renewed for successive
one year periods unless either party notifies the other in
writing at least 90 days prior to the expiration of such initial
or any renewal term that it elects not to renew this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date indicated below.
PERSONICS CORPORATION
By: /s/ Marc Peterson Date: 2/11/93
------------------------------- -----------
Marc Peterson
MATH STRATEGIES
By: /s/ Ray Huger Date: 2/12/93
------------------------------- -----------
Ray Huger
Amendment To Software Development and Marketing Agreement
This document serves as an amendment to the "Software Development and Marketing
Agreement" dated January 19, 1989, as amended on March 6, 1992 and February 12,
1993, in which Personics has been granted exclusive worldwide publishing rights
to Monarch for DOS (formerly known as "Down-To-Size") and Monarch for Windows.
(Collectively, "Monarch")
The parties agree as follows:
1. Math Strategies shall develop, at its own expense, report archive products
which are based on popular document management systems such as Lotus Notes
and Novell Groupwise. The document management-based archive ("DMBA") is
intended to give users of document management systems the ability to create,
manage and maintain a repository of report files. Users will access reports
held in the archive using Monarch running on a PC or workstation. DMBA
requires a document management system already in place at the customer's
site and does not operate as a stand-alone product.
2. Personics intends to acquire distribution rights for a report archive
product which runs in association with popular local area networks. The
LAN-based archive ("LBA") is intended to give LAN users the ability to
create, manage and maintain a repository of report files. Users will access
reports held in the archive using Monarch running on a PC or workstation.
3. Personics agrees to cooperate with Math Strategies to enable the timely
development of DMBA. Such cooperation would include (1) providing feedback
to Math Strategies, as requested, regarding the DMBA product specification;
(2) providing access by Math Strategies to selected Monarch customers for
the purpose of soliciting the customer's feedback regarding the DMBA product
specification; and (3) providing access by Math Strategies to selected
Monarch customers for the purpose of soliciting and managing the customer's
participation in a beta test program for DMBA.
4. Math Strategies agrees to cooperate with Personics to enable the timely
integration of Monarch with LBA. Such cooperation would include making
changes to Monarch as necessary to support (1) smooth launch-integration
with LBA, (2) page-oriented file input, (3) saving temporary files, index
files, page database files, etc. (4) enabling Monarch to be used as the tool
for creation of report recognition templates, and (5) any other changes that
may reasonably be requested by Personics to support the integration of
Monarch with LBA. Personics agrees, however, that if any such changes are
deemed by Math Strategies to require effort beyond that which would
ordinarily be provided at no charge to OEM customers of Personics for
Monarch, then Math Strategies shall be reimbursed by Personics for
programming effort associated with such changes at the rate of $50 per hour.
5. Subject to paragraph 11, Math Strategies shall have the right to sell DMBA
to resellers and endusers under any pricing, terms and conditions of its
choice, and under any tradename of its choice, except that any use of the
tradename "Monarch" shall be subject to prior written approval by Personics.
Personics agrees that Math Strategies can represent itself as "the
programmers of
Monarch", but such representation shall not be made in formal marketing
materials without prior written approval by Personics.
6. Math Strategies agrees that the client software used in association with
DMBA for report viewing and report access shall be Monarch, and shall be
purchased by Math Strategies from Personics. Personics agrees to sell
Monarch to Math Strategies under favorable OEM/VAR discounts, terms and
conditions. Personics and Math Strategies understand that some end-users and
resellers of DMBA may choose to purchase Monarch directly from Personics or
Personics' resellers. Personics agrees that the standard text viewers used
in association with the document management systems underlying DMBA may be
supported by DMBA.
7. Personics agrees that the client software used in association with LBA for
report viewing and report access shall be Monarch, for which Math Strategies
shall receive a royalty as set forth in the Software Development and
Marketing Agreement, and summarized in paragraph 9 below.
8. Personics shall have the right to sell LBA and DMBA to resellers and
end-users under any pricing, terms and conditions of its choice, and under
any tradename of its choice, except that any use of the tradename(s) chosen
by Math Strategies, as described in paragraph 5 above, shall be subject to
prior written approval by Math Strategies. Math Strategies agrees to sell
DMBA to Personics under favorable OEM/VAR discounts, terms and conditions,
comparable to those under which Monarch clients are sold to Math Strategies,
as described in paragraph 6.
9. Royalty rates and prospective VAR/OEM prices paid by Personics to Math
Strategies are summarized below:
- ----------------------------------------------------------------------------------------------------------------------
WHEN SOLD WHEN SOLD UNDER
PERSONICS' UNDER SINGLE NETWORK, SITE OR WHEN SOLD
PRODUCT LICENSE USER LICENSE OEM LICENSE As UPGRADE
- ----------------------------------------------------------------------------------------------------------------------
The greater of: The greater of
MONARCH/DOS Exclusive 10% of net sales 12% of net sales 10% of net sales
or $22 each or $P each*
- ----------------------------------------------------------------------------------------------------------------------
The greater of: The greater of:
12% of net sales 12% of net sales
Monarch/Windows Exclusive or $25 each 12% off net sales or $P each*
- ----------------------------------------------------------------------------------------------------------------------
Other future versions of
Monarch that run on a
PC or workstation
(including stand-alone
and client PCs.) as well Exclusive 12% of net sales 12% of net sales 12% of net sales
as Monarch derivatives or $M each** or $P each*
such as the Monarch
Mini-Pump
- ----------------------------------------------------------------------------------------------------------------------
Favorable OEM/VAR Favorable OEM/VAR
Lotus Notes-Based Non-exclusive N/A discounts, comparable discounts, comparable
Report Archive to discounts given to to discounts given to
(DMBA) Math Strategies for Math Strategies for
Monarch clients Monarch clients
- ----------------------------------------------------------------------------------------------------------------------
* Note - Minimum royalty for upgrades is computed as follows:
P = (Single user minimum royalty) X (Upgrade list price) /
(Single user list price)
Example for Monarch/Windows 2.0 upgrade: $25 X $99 / $499 = $5
** Note - Minimum royalty for other future versions of Monarch is computed as
follows: M = $25 X (future version list price) / $499
10. Math Strategies shall be the owner of the copyright and all other
proprietary rights in DMBA, except that Personics shall be the owner of the
trademarks made by Personics and used in association with its sales and
marketing of DMBA.
11. Both parties acknowledge a common interest in maintaining Monarch as the
leading product for accessing data held in reports. The parties agree to
remain focused on Monarch and its core technology while pursuing the DMBA
and LBA market opportunities.
12. Personics agrees to cooperate with any third-party designated and paid by
Math Strategies to conduct an audit of the royalty accounting process, but
no more than once each year. Personics understands that Math Strategies
intends to engage a third-party auditor to conduct such an audit for the
year ended September 30, 1995.
13. Personics agrees that royalty payments shall be express mailed or wired to
Math Strategies on or before their due date, as set forth in the Software
Development and Marketing Agreement, and that the royalty amount shall
include a late payment amount at the rate of 12% per annum for each day the
royalty payment is late.
AGREED:
PERSONICS CORPORATION
By: /s/ Marc Peterson Date: 8/14/95
------------------------------- -----------
Marc Peterson
MATH STRATEGIES
By: /s/ Ray Huger Date: 8/25/95
------------------------------- -----------
Ray Huger
Amendment No. 4 to Software Development
and Marketing Agreement
This Amendment No. 4 is made and entered into as of December 22, 1995 by
Datawatch Corporation ("Datawatch"), a Delaware corporation having its principal
place of business at 234 Ballardvale Street, Wilmington, Massachusetts 01887,
Personics Corporation ("Personics"), a Delaware corporation wholly-owned by
Datawatch having its principal place of business at 234 Ballardvale Street,
Wilmington, Massachusetts 01887, and Raymond Huger, a sole proprietor doing
business as Math Strategies ("Math Strategies") having its principal place of
business at-6-04 Green Valley Road, Suite 388`; Greensboro, North Carolina
27408.
WHEREAS, Math Strategies and Personics are parties to a Software
Development and Marketing Agreement dated as of January 19, 1989, as amended
March 6, 1992, February 12, 1993 and August 25, 1995 (the "Software Agreement");
WHEREAS, Math Strategies and Datawatch intend to enter into an escrow
agreement (the "Escrow Agreement") with Fort Knox Escrow Services, Inc. or
another mutually acceptable escrow agent ("Escrow Agent") whereby Math
Strategies shall deposit the (i) source code (consisting of a diskette
containing complete source code, batch file to compile, assemble and link the
code) for the software (the "Software") specified in the Software Agreement (the
"Source Code") with Escrow Agent along with (ii) all information necessary to
enable Datawatch to maintain such software for the support of Datawatch's
customers and end users (together, (i) and (ii) being referred to herein as the
"Escrowed Materials"); and
WHEREAS, Math Strategies and Personics desire to amend the Software
Agreement to provide for the deposit of the Escrowed Materials with Escrow
Agent, to provide Datawatch access to the Escrowed Materials under certain
circumstances and to add Datawatch as a party to the Software Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. The Software Agreement shall be amended to incorporate the following
terms:
(a) Addition of Datawatch as a Party to Software Agreement. Math
Strategies acknowledges that Personics is a wholly-owned subsidiary
of Datawatch and agrees that for all purposes under the Software
Agreement any and all references to "Personics" shall include
Datawatch and Personics. The rights and obligations of Datawatch
under the Software Agreement shall be identical to those of
Personics and such rights and obligations shall be enforceable as
if Datawatch were a party to the Software Agreement as originally
entered into between Math Strategies and Personics.
-2-
(b) Establishment of Escrow. Math Strategies shall deposit the Escrowed
Materials with Escrow Agent in accordance with the terms of the
Escrow Agreement.
(c) License to Escrow Materials. Upon the occurrence of an Event of
Default (as defined below), upon notice by Datawatch and in
accordance with the Escrow Agreement, Escrow Agent shall deliver
the Escrowed Materials to Datawatch. Math Strategies hereby grants
to Datawatch, contingent upon Datawatch's valid receipt of the
Escrowed Materials pursuant to the first sentence hereof, a
non-transferable, world-wide, exclusive license (the "Escrow
License") to use the Escrowed Materials to reproduce, market, copy,
publish, sell copies of, license and distribute the Software and to
sublicense others to do the same. Except as provided below, the
cost (the "Development Costs") of modifying and maintaining the
Software shall be borne by Datawatch. With respect to the software
sold or licensed by Datawatch under the Escrow License, Datawatch
shall continue to pay the royalties due under the Software
Agreement; provided, however that the amount of royalty owed Math.
Strategies shall be reduced by the Development Costs. After the
Escrow License has become effective, no termination of the Software
Agreement shall terminate the Escrow License. "Event of Default"
shall mean the occurrence of any of the following:
(i) Math Strategies shall cease conducting business in the
normal course; be adjudicated insolvent; make a general
assignment for the benefit of creditors; petition, apply for,
suffer or permit with or without his consent the appointment
of a custodian, receiver, trustee in bankruptcy or similar
officer for all or any substantial part of his business or
assets; or avail himself or become subject to any proceeding
under the Federal Bankruptcy Code or any similar state,
federal or foreign statute relating to bankruptcy, insolvency,
reorganization, receivership, arrangement, adjustment of
debts, dissolution or liquidation, which proceeding is not
dismissed within one hundred and twenty (120) days of
commencement thereof; or
(ii) default shall be made by Math Strategies in the
observance or performance of any material term, covenant or
agreement contained in the Software Agreement for a period of
thirty (30) days from the date of receipt of written notice
from Datawatch advising of such default and Math Strategies
has not cured such default and so notified Datawatch within
such thirty (30) day period.
-3-
(d) Establishment of Escrow for Datawatch Licensees. Math Strategies
shall deliver an additional set of the Escrowed Materials to Escrow
Agent for the benefit of Datawatch licensees. Math Strategies
hereby authorizes the release of the Escrowed Materials to
Datawatch licensees upon the occurrence of any one of the following
events described below or any substantially similar event:
(i) Datawatch shall cease conducting business in the normal
course; be adjudicated insolvent; make a general assignment
for the benefit of creditors; petition, apply for, suffer or
permit with or without its consent the appointment of a
custodian, receiver, trustee in bankruptcy or similar officer
for all or any substantial part of its business or assets; or
avail itself or become subject to any proceeding under the
Federal Bankruptcy Code or any similar state, federal or
foreign statute relating to bankruptcy, insolvency,
reorganization, receivership, arrangement, adjustment of
debts, dissolution or liquidation, which proceeding is not
dismissed within one hundred and twenty (120) days of
commencement thereof; or
(ii) default shall be made by Datawatch in the observance or
performance of any material term, covenant or agreement
contained in a license agreement with any Datawatch licensee
for a period of thirty (30) days from the date of receipt of
written notice from the Datawatch licensee advising of such
default and Datawatch has not cured such default and so
notified the Datawatch licensee within such thirty (30) day
period;
provided, however, the release of the Escrowed Materials to such
Datawatch licensees pursuant to this Section 1(d) shall be
contingent upon (A) Math Strategies being provided written notice
of the events under subparagraphs (i) and/or (ii) above on which
the release of the Escrowed Materials would be based and Math
Strategies being provided true and complete copies of Datawatch's
agreements with its applicable licensees upon the occurrence of any
of such events, (B) Math Strategies being provided a sixty (60) day
time period after receipt of Datawatch's agreements with its
licensees in which, at its option, Math Strategies may fulfill
Datawatch's obligations under Datawatch's agreements with its
licensees prior to release of the Escrowed Materials to such
licensees and (C) the failure of Math Strategies within such sixty
(60) day period to fulfill Datawatch's obligations under
Datawatch's agreements with its licensees.
-3-
2. Amendment. Except as amended as set forth herein, the Software Agreement
shall remain in full force and effect. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
3. Counterparts. This Amendment No. 4 may be executed in any number of
counterparts, each of which shall be an original but all of which taken together
shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 4 as
of the date first above written.
DATAWATCH CORPORATION
By: /s/ Marc Peterson
--------------------------------
Title: Vice President
-----------------------------
PERSONICS CORPORATION
By: /s/ Marc Peterson
--------------------------------
Title: President
-----------------------------
MATH STRATEGIES
By: /s/ Raymond Huger
--------------------------------
Raymond Huger
OCTOBER 1999 AMENDMENT TO
SOFTWARE DEVELOPMENT AND MARKETING AGREEMENT
This document serves as an amendment to the Software Development and Marketing
Agreement among Math Strategies, Datawatch Corporation and Personics
Corporation. dated January 19th, 1989, as amended (the "Software Agreement").
The purpose of this Amendment (the "October 1999 Amendment") is to set forth
license fees for various software components to be provided by Math Strategies
to Datawatch Corporation ("Datawatch"), and to modify our understanding
regarding certain matters agreed in our letter dated June 4, 1998 as accepted on
June 8, 1998 (the "June 1998 Letter"), and in a prior Amendment which was agreed
and accepted by Personics on August 14, 1995 and by Math Strategies on August
25, 1995 (the "August 1995 Amendment").
The parties agree, effective as of October 1st, 1999, as follows:
1. That this October 1999 Amendment replaces and supersedes the June 1.998
Letter and the August 1995 Amendment.
2. That Math Strategies agrees to use all commercially reasonable efforts
to develop, and then provide certain software components, as more fully
described in Exhibit A, and license those components to Datawatch on an
exclusive worldwide basis for internal use and for sublicense to third
parties directly or indirectly under and for the same term as the
Software under the Software Agreement. Datawatch shall have no right to
license or disclose the source code for such software components
without the prior written consent of Math. Strategies.
3. That the license fees payable to Math Strategies with respect to the
sublicensing of such software components shall be the amounts shown in
Exhibit A.
4. That Datawatch would like Math Strategies to provide certain additional
components that collectively comprise the product now known as
PalozzoTM, and that the parties agree to negotiate in good. faith to
establish the license fees under which the additional components will
be licensed to Datawatch on an exclusive worldwide basis for internal
use and for sublicense to third parties directly or indirectly under
and for the same term as the Software under the Software Agreement.
Datawatch shall have no right to license or disclose the source code
for the Software without the prior written consent of Math Strategies.
For purposes of this October 1999 Amendment, "Palozzo" is a software
tool set that enables enterprise document management software systems
to utilize the Software.
5. The parties acknowledge a desire to offer a "zero-client" option for
Monarch/ES under which users can query the Monarch/ES system and gain
access to reports and report information using a standard Web-browser
rather than using the Hyland. Software "client software application"
with Monarch and/or Monarch Report Explorer. Customers who choose this
option will purchase a license for "access rights" rather than a
license to install and use Monarch or Monarch Report Explorer and the
Hyland Software client software application. The parties agree that the
license fee payable to Math Strategies with respect to the sublicensing
of such access rights shall be 7% of the license revenues received by
Datawatch for such access rights.
6. Datawatch agrees to pay Math Strategies 50% of maintenance revenues
received by Datawatch from OEM partners for maintenance associated with
Monarch, Monarch Report Explorer, and all products that incorporate one
or more of the components listed in Exhibit A. In addition, Datawatch
agrees to pay Math Strategies a 15% per year maintenance fee on all
components sublicensed to third-parties who purchase an annual
maintenance contract from Datawatch covering products that incorporate
components listed in Exhibit A. For example, the annual maintenance fee
payable to Math Strategies with respect to a maintenance contract
associated with a product that incorporates Indexer would be 15% of
$1,000, or $150 per year. Math Strategies agrees to support and
maintain the components listed in Exhibit A under and for the same term
as the Software under the Software Agreement.
7. Datawatch agrees that its payments to Math Strategies shall be express
mailed or wired on or before their due date, as set forth in the
Software Agreement, and that the amount paid shall include a late
payment amount at the rate of 12% per annum for each day the royalty
payment is late.
8. Datawatch agrees to cooperate with any third party designated and paid
by Math Strategies to conduct an audit of the royalty accounting
process, but no more than once each year. If a discrepancy is
discovered by such third party in the royalty or license amount
reported by Datawatch, then Datawatch shall pay the discrepancy and
reimburse Math Strategies for reasonable fees associated with such
audit.
9. That, except as amended hereby, the Software Agreement shall continue
in full force and effect.
Agreed to and Accepted as of October 25, 1999
DATAWATCH CORPORATION
By: /s/ Bruce Gardner
--------------------------------
Bruce Gardner
PERSONICS CORPORATION
By: /s/ Marc Peterson
--------------------------------
Marc Peterson
MATH STRATEGIES
By: /s/ Raymond Huger
--------------------------------
Raymond Huger
2
OCTOBER 1999 AMENDMENT TO SOFTWARE DEVELOPMENT AND MARKETING AGREEMENT
EXHIBIT A
- -------------------------------------------------------------------------------------------------
COMPORT NAME DESCRIPTION License Fee
- -------------------------------------------------------------------------------------------------
Indexer extracts text from report pages as they $1,000.
Indexer are stored in the Monarch/ES system, and
provides associated index values.
- -------------------------------------------------------------------------------------------------
PRF Exporter exports Monarch Portable $750.
PRF Exporter Report Files (PRF).
- -------------------------------------------------------------------------------------------------
Table/Summary Exporter exports Monarch $1,250.
Table/Summary Exporter tables and summaries as the basis
for delivering HTML views of such tables and
summaries.
- -------------------------------------------------------------------------------------------------
$750.
ISAM Exporter ISAM Exporter exports data ino
popular ISAM formats including XLS, DB, DBF,
etc.
- -------------------------------------------------------------------------------------------------
12% of the license
Combined Exporter This component serves as the basis for revenues received by
Monarch Data Pump and Monarch Publisher Datawatch for any
and combines key features from the other and all versions of
exporter components. Monarch Data. Pump
and Monarch
Publisher.
- -------------------------------------------------------------------------------------------------
3
APRIL 2000 AMENDMENT TO
SOFTWARE DEVELOPMENT AND MARKETING AGREEMENT
This document serves as an amendment to the Software Development and Marketing
Agreement among Math Strategies, Datawatch Corporation and Personics Corporation
dated January 19 , 1989, as amended (the "Software Agreement").
The purpose of this Amendment (the "April 2000 Amendment") is to amend the
license fee schedule for various software components to be provided by Math
Strategies to Datawatch Corporation ("Datawatch"), and to modify our
understanding regarding certain matters agreed in an Amendment agreed and
accepted on October 25, 1999 (the "October 1999 Amendment"), and in our letter
dated June 4, 1998 as accepted on June 8, 1998 (the "June 1998 letter"), and in
a prior Amendment which was agreed and accepted by Personics on August 14, 1995
and by Math Strategies on August 25, 1995 (the "August 1995 Amendment").
The parties agree, effective as of January 1, 2000, as follows:
1. That this April 2000 Amendment replaces and supercedes the October 1999
Amendment, the June 1998 letter and the August 1995 Amendment.
2. That the license fees payable to Math Strategies with respect to the
sublicensing of software components shall be the amounts shown in Exhibit A.
Agreed to and Accepted as of April 10, 2000
DATAWATCH CORPORATION
By: /s/ Bruce Gardner
--------------------------------
Bruce Gardner
PERSONICS CORPORATION
By: /s/ Marc Peterson
--------------------------------
Marc Peterson
MATH STRATEGIES
By: /s/ Raymond Huger
--------------------------------
Raymond Huger
APRIL 2000 AMENDMENT TO
SOFTWARE DEVELOPMENT AND MARKETING AGREEMENT
EXHIBIT A
- -------------------------------------------------------------------------------------------------------------
Component Description Standard License' Fee
Name License Fee for Sales to
NSA
- -------------------------------------------------------------------------------------------------------------
Indexer Indexer extracts text from report The greater
pages as they are stored in the of $300 or
Monarch/ES system, and provides $1,000 30% of the
associated index value license
revenues
received by
Datawatch
- -------------------------------------------------------------------------------------------------------------
PRF Exporter PRF Exporter exports Monarch
Portable Report Files (PRF). $750 n/a
- -------------------------------------------------------------------------------------------------------------
Table/Summary Table/Summary Exporter exports
Exporter Monarch tables and summaries as
the basis for delivering HTML $1,250 n/a
views of such tables and summaries.
- -------------------------------------------------------------------------------------------------------------
ISAM Exporter ISAM Exporter exports data in
popular ISAM formats including $750 n/a
XLS, DB, DBF, etc.
- -------------------------------------------------------------------------------------------------------------
Combined This component serves as the basis 12% of the 12% of the
Exporter for Monarch Data Pump and license revenues license
Monarch Publisher and combines received by revenues
key features from the other exporter Datawatch for received by
components. any and all Datawatch
versions of
Monarch Data
Pump and
Monarch
Publisher
- -------------------------------------------------------------------------------------------------------------
Recognizer/ These 3 components are provided as 50% of the
Burster/Filer a bundled solution for the purpose of license
recognizing report types based on n/a revenues
content, bursting them, and filing received by
them in an indexed subsystem. Datawatch
- -------------------------------------------------------------------------------------------------------------
Migrator Migrator provides the ability to 50% of the
move reports that have been stored license
in the filing system. n/a revenues
received by
Datawatch
- -------------------------------------------------------------------------------------------------------------
EXHIBIT B
SOFTWARE PRODUCTS
DESKTOP PRODUCTS CURRENT NON-CURRENT NON-CURRENT
RELEASE SUPPORTED RELEASES (NOT SUPPORTED)
RELEASES
Monarch Standard and Professional
English 7.01 6.0, 5.0 4.x, 3.x, 2.x, 1.x
French 7.01 6.0, 5.0 4.x, 3.x
German 7.01 6.0, 5.0 4.x, 3.x
Spanish 5.02 None None
Monarch Workstore 1.00 N/A N/A
Monarch Report Explorer
English 5.00 1.0 None
German 5.00 1.0 None
French 5.00 1.0
SERVER PRODUCTS
Monarch Data Pump (in development 7.00 N/A N/A
VorteXML Designer 3.00 2.0 2.x, 1.x
VorteXML Server 1.00 None None
VorteXML Server for Tamino 1.00 None None
SERVER COMPONENTS
Monarch Indexer OCX 7101 7xxx, 6xxx 5,4,3
Monarch Exporter OCX 7014 7xxx, 6xxx 5,4,3
OEM PRODUCTS
Monarch for Ceyoniq (OEM Ceyoniq) 6.01
Monarch for EZPickins (OEM BCD) 7.01 6.0 4.x, 5.x
EZ-Pickin's Report Explorer (OEM BCD) 5.00 1.x
Monarch Pro for Cypress (OEM Cypress) 6.01 5.x
DocuAnalyzer (OEM Mobius) 6.01 4.x, 5.x
STARS (Rogers Lynch OEM) 4.x
Monarch for Fundware (American Fundware OEM) 4.x
Monarch for Coinserv (INSCI OEM) 4.x
ValetMiner (Momentum OEM) 4.x
ValetXplore (MRE OEM Momentum) 1.x
Report.Web Modeler (NSA OEM) 4.x
Report.Web Insight (NSA MRE OEM) 1.x
Bookworm (Vanguard OEM) 4.x
Bookworm Report Explorer (Vanguard MRE OEM) 1.x
CRG (Your Communications OEM) 5.x
Monarch for Vista Plus (Quest OEM) 5.x
Notes: Monarch Data Pump was developed by Datawatch for release 6.0 and earlier using the Monarch Exporter OCX.
9
EXHIBIT C
FORM OF INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT
ASSIGNMENT OF INTELLECTUAL PROPERTY
THIS INTELLECTUAL PROPERTY ASSIGNMENT ("Assignment"), dated as of
the _____ day of ________________, 200_ (the "Effective Date"), is made between
Raymond J. Huger, a sole proprietor doing business as Math Strategies, having
its principal place of business at 600 Green Valley Road, Suite 304, Greenboro,
North Carolina 27408 ("Assignor") and Datawatch Corporation, a Delaware
corporation with offices located at 175 Cabot Street, Lowell, Massachusetts
01854 ("Assignee") (each a "Party," and collectively, the "Parties").
WHEREAS, Assignor has developed and licensed to Assignee certain
Software Products, as defined in an Option Purchase Agreement dated as of April
___, 2004 among the Parties (the "Option Agreement"); and
WHEREAS, pursuant to the Option Agreement, Assignor granted to
Assignee an option (the "Option") to purchase the Software Products including
all intellectual property rights as embodied therein; and
WHEREAS, Assignee has exercised the Option and on the date hereof
has met the closing delivery conditions of the Option Agreement;
NOW, THEREFORE, for valuable consideration furnished by Assignee to
Assignor, receipt and sufficiency of which is hereby acknowledged, the parties
hereby agree as follows:
1. Assignment. Subject to the provisions of Section 2 below,
Assignor hereby assigns, transfers, sells and conveys to Assignee, its
successors and assigns, all of Assignor's right, title and interest throughout
the world in and to the Software Products and all intellectual property embodied
in the Software Products (collectively, "Rights"), including, but not limited
to, the following:
a. all patent rights, if any, including, but not limited to,
all provisional and nonprovisional applications for patents, utility models,
designs or other industrial property rights that incorporate, embody, describe
or are otherwise relevant to technology embodied in the Software Products, and
any patents that are or may be granted therefrom or based thereon, whether in
the United States or any other country or jurisdiction, including, without
limitation, any continuations, continuations-in-part, divisions, reissues,
reexaminations, renewals, provisionals, nonprovisionals, revisions, substitutes
and extensions thereof;
b. all copyright rights, including, but not limited to, all
copyrighted or copyrightable works embodied in the Software Products, and all
applications for copyright registration and any copyright registrations that are
or may be granted therefrom, whether in the United States or any other country
or jurisdiction, including, without limitation, all renewals and extensions
thereof;
c. all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or referred to as "moral
rights" ("Moral Rights"). To the extent such Moral Rights cannot be assigned
under applicable law and to the extent the following is allowed by the laws in
the various countries where Moral Rights exist, Assignor hereby waives such
Moral Rights and consents to any action of Assignee, its successors and assigns,
that would violate such Moral Rights in the absence of such consent;
d. all trademarks rights, including, but not limited to, all
trademarks, service marks,
trade names, domain names, logos, and trade dress used by Datawatch in
connection with the Software Products, together with all translations,
adaptations, derivations and combinations thereof, and any common law rights
therein and goodwill associated therewith, and all corresponding applications
for trademark registration, and any trademark registrations that are or may be
granted therefrom, whether in the United States or any other country or
jurisdiction, but excluding the right to use the name "Math Strategies", and the
trademark, "Catch the Web(R)";
e. all computer code embodied in the Software Products
(including, without limitation, source and object code), in whatever form or
medium, including any proprietary rights therein and all related documentation
and other materials related to the computer code,;
f. all trade secrets, know-how, technology and other
confidential business information embodied in the Software Products, however
embodied or documented,;
g. all notes, analysis, compilations, studies, summaries, and
other material prepared by or for Assignor to the extent relevant or necessary
in order to use any information included in any of the foregoing subsections (a)
through (f), however documented, provided that Assignor may retain copies of
same; and
h. all rights and privileges pertaining to the subject matter
of subsections (a) through (g), including, without limitation, all causes of
action, choses of action, claims or demands presently or hereafter accruing with
respect to the same, including the right to sue or bring other actions for past,
present and future infringement thereof anywhere in the world.
2. Certain Additional Rights and Reservations. Assignor also hereby
assigns, transfers, sells and conveys to Assignee such methods, tools,
techniques, logic, and know-how used by Assignor (other than any tools or
software that may require a third party license for their use) to create the
Software Products (as limited by (i), the "Tools"); provided, however, (i) the
Tools are assigned, transferred, sold and conveyed only to the extent such Tools
are actually embodied in the Software Products or are reasonably necessary for
Assignee to make use of the Software Products in any manner Assignee or
Assignee's successors and assigns deems appropriate ; and (ii) Assignee hereby
grants Assignor and Assignor's successors and assigns, a perpetual,
non-exclusive, royalty-free right and license to use the Tools in any manner
Assignor or Assignor's successors and assigns deem appropriate, provided that
such use does not violate the provisions of the Option Agreement or infringe the
copyrights embodied in the Software Products. In addition, nothing herein shall
permit Assignor to use any source code or executable code actually embodied in
the Software Products in any products developed or sold by Assignor that
reasonably compete with the Software Products as they are constituted as of the
date of this Assignment.
3. Protection. Assignor further assigns all rights, and empowers
Assignee, its successors, assigns and nominees, to make applications for patent,
trademark, copyright or other intellectual property registration or protection
anywhere in the world, to claim and receive the benefit of any applicable rights
of priority or in connection with such applications, to prosecute such
applications to issue, and to have any and all registrations issued in the name
of Assignee.
4. Confidentiality.
a. Upon execution of this Assignment, the Software Products
(other than the Tools) will be confidential information of Assignee ("Assignee
Confidential Information") and the Tools will be deemed the confidential
information of both Assignee and Assignor ("Joint Information"). The Assignee
Confidential Information and the Joint Information are referred to collectively
as the "Confidential Information." Until such time as the Confidential
Information meets of the exceptions set forth in Section 4(b)
below, (i) Assignor shall not disclose any Assignee Confidential Information to
any third parties without Assignee's prior written consent, and (ii) neither
party shall disclose any Joint Information (a) without the other party's prior
written consent, or (b) except as may be combined with or embodied in the
confidential information of that party which is being disclosed under a
non-disclosure obligation. Each party will protect the applicable Confidential
Information from disclosure in the same manner as it protects its own
confidential information, but in any event in a reasonable manner.
b. The confidentiality obligations with respect to any
Confidential Information will terminate if such information: (i) is disclosed to
Assignor or Assignee, as applicable, by a third party who had the right to make
such disclosure without any confidentiality restrictions; or (ii) is, or through
no fault of the Assignor or Assignee, as applicable, has become, generally
available to the public. In addition, each party will be allowed to disclose
Confidential Information to the extent that such disclosure is necessary for the
such party to enforce its rights under this Agreement in connection with a legal
proceeding or is required by law or by the order or a court of similar judicial
or administrative body, provided that the party required to disclose notifies
the other party of such required disclosure promptly and in writing and
cooperates with such party, at its reasonable request and expense, in any lawful
action to contest or limit the scope of such required disclosure.
c. The provisions of this Section 4 shall survive the
execution and delivery of this Assignment.
5. Further Assurances. Assignor further agrees that Assignor will,
at Assignee's cost: (a) cooperate with Assignee in the filing and prosecution of
any and all patent, trademark, copyright or other intellectual property
registrations or applications; (b) execute, verify, acknowledge and deliver all
such further papers, including applications and instruments of transfer as may
be reasonably necessary; and (c) perform such other acts as Assignee lawfully
and reasonably may request, to facilitate Assignees right to obtain, protect,
maintain, defend or enforce any of the Rights granted hereunder. In the event
that Assignee is unable for any reason whatsoever to secure Assignor's signature
to any document when so required after making reasonably efforts to do so,
Assignor hereby irrevocably designates and appoints Assignee and Assignee's duly
authorized officers and agents, as Assignor's agents and attorneys-in-fact to
act for and on its behalf and instead of it, to execute and file any such
document and to do all other lawfully permitted acts to further the purposes of
the foregoing, with the same legal force and effect as if executed by Assignor.
6. General.
a. NOTICES. All notices required under this Assignment shall
be in writing and shall be by personal delivery, facsimile transmission,
international courier with tracking capabilities or by certified or registered
mail, return receipt requested, and shall be deemed given upon receipt of
delivery. Notices and payments hereunder shall be sent to the addresses set
forth at the beginning of this Agreement or such other address as either party
may specify in writing.
b. WAIVER. The failure of a party to require performance by
another party of any provision hereof shall not affect the full right to require
such performance at any time thereafter; nor shall the waiver by either party of
a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
c. SEVERABILITY. If any provision of this Assignment is held
to be illegal or unenforceable, such provision shall be limited or eliminated to
the minimum extent necessary so that the remainder of this Assignment will
continue in full force and effect and enforceable.
d. CONTROLLING LAW; ARBITRATION. This Assignment shall be
interpreted and controlled by and construed and enforced according to the laws
of the Commonwealth of Massachusetts without regard to conflicts of laws
provisions thereof. Any disputes under this Assignment shall be resolved as
provided in the Option Agreement.
e. ENTIRE AGREEMENT; MODIFICATION. This Assignment and the
Option Agreement constitute the entire agreement between the parties concerning
the subject matter hereof. This Agreement shall not be modified except by a
subsequently dated written amendment signed by a duly authorized representative
of each party. This Assignment shall be binding upon and inure to the benefit
and detriment of the parties and their respective successors and assigns.
f. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be considered an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has caused this
Assignment to be executed as an instrument under seal by the signature of its
duly authorized officer as of the date above first written.
MATH STRATEGIES DATAWATCH CORPORATION
By: By:
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Raymond J. Huger, individually and Name:
as a Sole Proprietorship ----------------------------
Title:
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