Master Software License Agreement Dated 12/1/99

EXE TECHNOLOGIES, INC.


MASTER SOFTWARE LICENSE AGREEMENT


THIS MASTER SOFTWARE LICENSE AGREEMENT (this "Agreement") is entered into on this 1st day of December, 1999, between EXE TECHNOLOGIES, INC., a Delaware corporation ("EXE"), and HOME INTERIORS & GIFTS, INC., a Texas corporation ("Customer"). Intending to be legally bound hereby, EXE and Customer agree to the following terms and conditions:


1. DEFINITIONS.


(a) "Documentation" means the user guides and manuals for installation and use of the Licensed Product.


(b) "Exhibit Index" means the original Exhibit Index to Master Software License Agreement that follows the signature page of this Agreement and each new Exhibit Index that may be attached subsequently to this Agreement pursuant to Sections 2 and 170).


(c) "Licensed Product" means the object code version of the software listed on the Order Forms. "Licensed Product" does not include, however, any third party software that is subject to a separate written agreement between Customer and such third party even if listed on an Order Form.


(d) "Nodes" means any and all devices (including, without limitation, workstations, terminals and handheld RF devices) that permit an individual to input data into, or otherwise access or Use, the Licensed Product.


(e) "Order Form" means each sequentially numbered order form, beginning with the number 1, in the form attached hereto as Exhibit AI, and which the parties have attached and may subsequently attach to this Agreement pursuant to Section 2.


(f) Source Code means, for the applicable Licensed Product, such Licensed Product in source code format, together with a copy of all relevant, available and existing technical documentation.


2. ORDERING. Customer hereby orders the Licensed Product listed on Order Form 1. Customer may, from time to time, order additional Licensed Product at EXE's then current list price or agreed upon price subject to the following procedure: the parties shall: (1) complete an Order Form; (2) execute a new Exhibit Index indicating that such Order Form has been incorporated into this Agreement by marking the relevant "Applicable" box; and (3) attach such Order Form and Exhibit Index to this Agreement.


3. LICENSE & SCOPE OF USE.


(a) Operating Licenses. With respect to each Licensed Product ordered by Customer pursuant to Section 2, EXE


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grants to Customer a non-exclusive license (each, an "Operating License") to install, store, load, execute and display (collectively, "Use") the Licensed Product according to the applicable License Type (as defined in Section 3(b)) listed in the Order Form. Each Operating License shall be perpetual unless earlier terminated pursuant to Section 14. Customer's Use of the Licensed Product shall be limited to the United States of America and its territories and possessions unless Exhibit C (the "International Addendum") is marked as "Applicable" on the Exhibit Index and attached hereto.


(b) License Types. The available types of licenses ("License Types") are as follows:


(i) Site License. A Site License authorizes Customer to make the Licensed Product available for Use at the facility or facilities, and by the number of Nodes, listed in the applicable Order Form in support of Customer's internal business activities. Upon written notice to EXE, Customer may relocate the Licensed Product from the facility or facilities where it was originally installed and Use the Licensed Product at another facility or facilities; provided that Customer Uses the Licensed Product obtained under a Site License at no more than the number of facilities, and by no more than the number of Nodes, listed in the applicable Order Form. (License Type Code: SL).


(ii) Business Unit License. A Business Unit License authorizes Customer to make the Licensed Product available for Use by the number of Nodes listed in the applicable Order Form in support of the internal business activities of Customer's division or other business unit, whether or not incorporated, listed in the applicable Order Form. (License Type Code: BUL).


(c) Transfer and Other Restrictions. Except as specifically authorized in another provision of this Agreement, Customer may not copy, relocate, move, sublicense, rent, timeshare, loan, lease, or otherwise distribute the Licensed Product or operate the Licensed Product for the benefit of third parties without EXE's prior written consent and any attempt to the contrary shall be void and of no legal effect. If, Customer is or becomes a third party logistics provider and Customer has disclosed such fact to EXE, then the foregoing restriction against operating the Licensed Product for the benefit of third parties shall not be applicable. Further restrictions are contained in Section 10 of this Agreement.


(d) Backup Exception. Customer may make copies of the Licensed Product solely for archival/backup purposes.


(e) Outsourcing Exception. Subject to Section 10 of this Agreement, Customer may engage an outsourcing provider to provide information technology services to Customer.


4. VERIFICATION AND AUDIT.


(a) Verification. Within ten (10) days after a written request by EXE,


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which request shall occur no more often than once annually, Customer shall furnish to EXE a certification signed by an appropriate officer of Customer certifying that Customer is Using the Licensed Product in accordance with the terms of this Agreement.


(b) Audit. No more often than once annually, EXE may conduct audits of Customer's Use of the Licensed Product to ensure compliance with this Agreement (each, a "Compliance Audit"). Customer shall grant EXE, within ten (10) days after EXE's written request, access to Customer's facilities during Customer's regular business hours for the purpose of conducting the Compliance Audit. EXE shall not unreasonably interfere with Customer's business activities while conducting the Compliance Audit. If an audit reveals that Customer has Used the Licensed Product in breach of this Agreement, then EXE may, at its option: (i) charge Customer additional fees that reflect Customer's actual Use of the Licensed Product, at EXE's then-current list price(s); or (ii) if such breach is material and is not cured by Customer within ten (10) days of EXE's written notice, EXE may terminate this Agreement; provided, however, if any such breach results solely from Customer's Use of the Licensed Product on a temporary basis in excess of the number of licensed Nodes to accommodate Customer's increased orders resulting from seasonal variations, promotions, or similar reasons such use is not a material breach of this Agreement, then EXE's sole remedy under this Section 4(b) is to charge Customer additional license fees that reflect Customer's actual Use of the Licensed Product at EXE's then-current list prices. If EXE chooses to charge additional fees pursuant to this Section 4(b), then Customer shall pay such additional fees promptly upon receipt of EXE's invoice.


5. SOURCE CODE. Customer acknowledges that no source code or technical-level documentation is licensed under this Agreement , unless Exhibit E-Source Code License Addendum is checked as Applicable on the Exhibit Index and attached to this Agreement.


6. DOCUMENTATION. EXE shall provide to Customer one (1) copy of the Documentation on computer readable media- Customer may reproduce the Documentation solely for the purposes of any Use of the Licensed Product by Customer authorized herein.


7. DELIVERY. EXE shall deliver the Licensed Product ordered under this Agreement to Customer on mutually acceptable media and by mutually acceptable means. Customer shall be deemed to have accepted each such shipment of the Licensed Product upon shipment or complete transmission of the Licensed Product to Customer, whichever occurs first.


8. SOFTWARE UPGRADES AND SUPPORT.


(a) Software Upgrades and Support. EXE shall not provide Customer with error corrections, updates or other releases of the Licensed Product unless Exhibit B 1 (the "Software Upgrade and Support Addendum") is marked as "Applicable" on the Exhibit Index and attached hereto.


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(b) EXE does not provide any services under this Agreement, other than warranty coverage as described in Section 11(a) and software upgrade and support services pursuant to the Software Upgrade and Support Addendum.


9. PRICES & PAYMENT. The Order Form sets forth the fees for the Licensed Product (the "License Fees"). Customer shall pay EXE the License Fees due hereunder in accordance with the payment schedules set forth in the applicable Order Form. Such payments become non-refundable upon shipment or transmission in accordance with Section 7. All other invoiced amounts shall be paid within thirty (30) days from Customer's receipt of EXE's invoice therefor. Customer may not withhold or setoff any amounts due hereunder. Any late payment shall be subject to EXE's costs of collection (including reasonable legal fees and costs) and shall also bear interest at the rate of one and one-half percent (1.5%) per month (or part thereof) or, if lower, the highest rate permitted by applicable law until paid. Prices quoted do not include, and Customer shall pay all sales/use, , value-added, GST, personal property or other similar taxes (including interest and penalties imposed thereon which are caused by Customer's late payment or failure to pay) arising from the transactions contemplated herein, except for taxes levied on EXE's net income.


10. CONFIDENTIAL INFORMATION.


(a) Customer acknowledges that: (i) the Licensed Product and the Source Code are and shall remain the exclusive property of EXE, its third party suppliers, and their respective successors and assigns; and (ii) Customer has no right, title or interest to or in the Licensed Product or the Source Code, except as expressly granted in this Agreement.


(b) Acknowledgment. Customer hereby acknowledges that the Licensed Product (including any Documentation, source code, translations, compilations, partial copies and derivative works) and those materials provided under Section 17(P) of this Agreement contain confidential and proprietary information belonging exclusively to EXE or a third party supplier of EXE ("Confidential and Proprietary Information"). Confidential and Proprietary Information does not include: (i) information already known or independently developed by Customer outside the scope of this Agreement by personnel not having access to any Confidential and Proprietary Information; (ii) information already in the public domain through no wrongful act of Customer; or (iii) information received by Customer from a third party who was free to disclose such information.


(c) Covenants. With respect to the Confidential and Proprietary Information, and except as expressly authorized herein, Customer shall not use or commercialize the Confidential and Proprietary Information or disclose


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the Confidential and Proprietary Information to any person or entity including any entity that is an affiliate of Customer, except to its own employees having a "need to know" (and who themselves are bound by equivalent non-use and non-disclosure obligations applicable to the Licensed Product), and to such third parties, including, but not limited to, third party logistics providers and outsourcing providers that (i) have first executed a confidentiality agreement in the form attached hereto as Exhibit F; and (ii) are not an EXE Competitor (as hereafter defined) or an affiliate of an EXE Competitor (such third parties being "Authorized Third Parties"). An EXE Competitor means any person or entity that offers to the public a software product that directly competes with a Licensed Product or with EXE's other software products offered, on the Effective Date, for warehouse distribution. Upon the written request of EXE, Customer shall provide EXE with copies of the confidentiality agreement(s) signed by the Authorized Third Parties. Neither Customer nor any Authorized Third Parties shall: (i) alter or remove from any Licensed Product or associated Documentation any proprietary, copyright, trademark or trade secret legend; or (ii) attempt to decompile, disassemble or reverse engineer the Licensed Product or other Confidential and Proprietary Information (and any information derived in violation of such covenant shall automatically be deemed Confidential and Proprietary Information owned exclusively by EXE) Customer and its Authorized Third Parties shall use at least the same degree of care in safeguarding the Confidential and Proprietary Information as Customer uses in safeguarding its own confidential information, but in no event less than reasonable due diligence and care. Upon termination of this Agreement, Customer shall, and shall cause its Authorized Third Parties to, cease all use of, and return or destroy, all Confidential and Proprietary Information in its or their possession or control. The appropriate officer of Customer shall certify to EXE in writing, within fifteen (15) days after such termination, that Customer has complied with the obligations of the foregoing sentence.


11. WARRANTIES & INDEMNIFICATION.


(a) Limited Performance Warranty. EXE warrants to Customer that for a period of one (1) year following delivery of the Licensed Product under Section 7 (the "Warranty Period") the Licensed Product will operate substantially in accordance with the applicable Documentation; provided that: (i) the Licensed Product is installed and operated in accordance with the Documentation; (ii) Customer notifies EXE of any alleged malfunction within ten (10) days after Customer's discovery thereof; (iii) Customer has properly installed all releases made available by EXE with respect to the Licensed Product and updates recommended by EXE with respect to any third party software products (including operating system software) that materially affect the performance of the Licensed Product; (iv) Customer has properly maintained all associated equipment, software and environmental conditions in accordance with applicable specifications and industry standards that


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materially affect the performance or functionality of the Licensed Product; (v) Customer has not introduced other equipment or software creating an adverse impact on the Licensed Product that materially affects the performance or functionality of the Licensed Product; and (vi) Customer has paid all amounts due hereunder not the subject of a bona fide dispute and Customer is not in material default of any provision of this Agreement.


(b) Surreptitious Code Warranty. EXE warrants to Customer that, except as otherwise provided in the International Addendum (if applicable), the Licensed Product will not contain any software lock, "time bomb" or similar disabling device (other than security features described in the Documentation) that is intended to disable or intentionally impair the ability of the Licensed Product to operate in accordance with this Agreement.


(c) Year 2000 Warranty; Third-Party Product Disclaimer. EXE warrants that the Licensed Product accurately, correctly and consistently processes date/time data (including without limitation accepting, calculating, comparing, sorting, sequencing and returning) prior to, during and after the calendar year 2000 A.D., including leap year calculations ("Year 2000 Ready"). NOTWITHSTANDING THE FOREGOING, EXE MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND/OR USE), WITH RESPECT TO ANY THIRD-PARTY PRODUCTS, INCLUDING, WITHOUT LIMITATION, WHETHER SUCH THIRD-PARTY PRODUCTS ARE OR WILL BE YEAR 2000 READY OR WILL PROPERLY EXCHANGE DATA WITH THE LICENSED PRODUCT, WHETHER OR NOT SUCH THIRD-PARTY PRODUCTS ARE USED IN CONJUNCTION WITH, OR SHARE DATA WITH, THE LICENSED PRODUCT.


EXCEPT AS OTHERWISE AGREED TO BY EXE IN WRITING, AS BETWEEN EXE AND CUSTOMER, ANY AND ALL THIRD-PARTY PRODUCTS ARE EXPRESSLY PROVIDED "AS IS." EXE's sole obligation with respect to third-party products shall be to use commercially reasonable efforts to pass through and assign to Customer any warranties provided by the third-party vendors or suppliers that are reasonably capable of being assigned.


(d) Warranty Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 11, THE LICENSED PRODUCT IS PROVIDED TO CUSTOMER WITHOUT, AND EXE EXPRESSLY DISCLAIMS, ANY AND ALL OTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, WHETHER ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF ACCURACY,


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COMPLETENESS, PERFORMANCE, CURRENCY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR TITLE. FURTHERMORE, THE WARRANTIES IN SECTIONS 11(a), 11(b) AND 11(c) DO NOT EXTEND TO MODIFICATIONS OF THE LICENSED PRODUCT MADE BY CUSTOMER OR A THIRD PARTY OR TO APPLICATIONS CREATED BY CUSTOMER OR A THIRD PARTY THROUGH USE OF A LICENSED PRODUCT, AND SUCH WARRANTIES ARE VOID TO THE EXTENT THAT SUCH MODIFICATIONS OR APPLICATIONS CAUSE THE WARRANTY CLAIM.


(e) Non-Infringement Indemnity. EXE shall indemnify, defend and hold harmless Customer from and against any and all claims, actions, judgments and expenses suffered by Customer in connection with a claim or action that a Licensed Product infringes or misappropriates any United States copyright, patent or trade secret provided that: (i) the claimed infringement or misappropriation does not relate to, or result from, Customer's or any third party's modifications) of the Licensed Product or use of the Licensed Product in combination with software or hardware not supplied or expressly approved in writing by EXE; and (ii) Customer gives EXE prompt, written notice of any such claim and allows EXE to control the defense and all related settlement negotiations. If any infringement claim has occurred or in EXE's reasonable judgment is likely to occur and EXE is required to indemnify and defend Customer by virtue of the foregoing sentence, then Customer shall allow EXE, at EXE's option and expense, to procure the right for Customer to continue using the Licensed Product that is the subject of such claim, or to replace or modify such Licensed Product so that such Licensed Product becomes non-infringing yet remains functionally equivalent. If neither of the foregoing alternatives is available on terms that are reasonable, in EXE's sole discretion, then Customer shall, upon the request of EXE, return the Licensed Product to EXE, whereupon EXE shall return to Customer an equitable portion of the License Fees paid by Customer for such Licensed Product. This Section 11(e) states Customer's sole and exclusive remedy arising from copyright, patent and trade secret infringement claims made against Customer with respect to the Licensed Product, and EXE shall incur no liability to Customer relating to such infringement claims except as provided in this Section I 1(e).


12. LIMITATIONS OF REMEDIES & LIABILITIES. The parties acknowledge that the following provisions have been negotiated by them, reflect a fair allocation of risk and such allocation is reflected in the fees payable under this Agreement:


(a) Remedies. Except as otherwise provided by Section 11(e), Customer's sole and exclusive remedies for EXE's default hereunder shall be: (i) to obtain the repair, replacement or correction of the defective Licensed Product; or (ii) if EXE reasonably determines that such remedy is not


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economically or technically feasible, to obtain a refund of an equitable portion of the License Fees actually paid by Customer with respect to the defective Licensed Product.


(b) Limitations of Liability.


(i) General. EXCEPT FOR EXE'S LIABILITY ARISING UNDER SECTION I 1(e), IN NO EVENT SHALL EXE'S OR ITS THIRD PARTY SUPPLIERS LIABILITY, IN THE AGGREGATE, FOR DAMAGES ARISING OUT OF THE USE OR LICENSING OF THE LICENSED PRODUCT OR ARISING UNDER THIS AGREEMENT OR THE EXHIBITS HERETO, WHETHER IN TORT, CONTRACT OR OTHERWISE, TO CUSTOMER OR ANY OTHER PERSON OR ENTITY EXCEED THE LICENSE FEES ACTUALLY PAID BY CUSTOMER.


(ii) Consequential Damages, Etc. as to Customer. IN NO EVENT SHALL EXE OR ITS THIRD PARTY SUPPLIERS BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL, OR SIMILAR DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, LOSS OF GOOD WILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, LOSS OF WORK PRODUCT, OR ANY AND ALL OTHER COMMERCIAL DAMAGES OR LOSSES, WHETHER DIRECTLY OR INDIRECTLY CAUSED, WHETHER IN TORT, CONTRACT, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.


(iii) Consequential Damages as to EXE. IN NO EVENT SHALL CUSTOMER BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL, OR SIMILAR DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF GOOD WILL, WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, LOSS OF WORK PRODUCT, OR ANY AND ALL OTHER COMMERCIAL DAMAGES OR LOSSES, WHETHER DIRECTLY OR INDIRECTLY CAUSED, WHETHER IN TORT, CONTRACT, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED HOWEVER, THE PARTIES ACKNOWLEDGE THAT ANY DIRECT OR INDIRECT DAMAGES FOR LOSS OF PROFITS BY REASON OF A BREACH BY CUSTOMER OF SECTION 3 OR SECTION 10 OF THIS AGREEMENT SHALL NOT BE LIMITED BY THIS SECTION.


13. TIME LIMIT FOR CLAIMS. Each party shall have two (2) years from the accrual of a cause of action to bring such action. If a party fails to bring such action within two (2) years of its accrual, then such party shall be deemed to have waived whatever rights it may have had in relation to such cause of action including all legal and equitable remedies.


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14. TERM AND TERMINATION.


(a) Term. This Agreement shall commence on the day first written above and shall continue until terminated in accordance with this Section 14. Notwithstanding the foregoing, services under the Software Upgrade and Support Addendum shall commence and terminate as provided in the Software Upgrade and Support Addendum.


(b) Termination. Either party may, in addition to other relief, terminate this Agreement or any license granted hereunder if the other party breaches any material provision hereof and fails, within thirty (30) days after receipt of notice of such breach, to: (i) correct the breach if the breach is capable of correction within such thirty (30) day time period; or (ii) commence corrective action reasonably acceptable to the aggrieved party and proceed with due diligence to completion of such action if the breach cannot be remedied within such thirty (30) day time period.


(c) Effect of Termination. Upon termination of this Agreement, all Operating Licenses terminate automatically, and Customer shall promptly destroy or return to EXE all copies of the Licensed Product and Documentation. The appropriate officer of Customer shall certify to EXE in writing, within fifteen (15) days of such termination, that Customer has complied with the obligations of the foregoing sentence.


(d) Survival. The provisions contained in Sections 3(c), 9, 10, 11 (e) and 12-17 shall survive the termination of this Agreement for any reason in accordance with their respective terms.


15. DISPUTES. Exclusive venue for any and all actions arising out of this Agreement shall lie in Dallas County, Texas.


16. EXPORT REGULATIONS.


The transfer of technology across national boundaries is regulated by the United States Government. Customer shall not acquire, ship, transport, export or re-export the Licensed Product, directly or indirectly, into any country in violation of any applicable law (including, but not limited to, the United States Export Administration Act and the regulations promulgated thereunder) nor will Customer use the Licensed Product for any purpose prohibited by such laws.


17. MISCELLANEOUS.


(a) Force Majeure. Neither party hereto shall have any liability for delay or non-fulfillment of any terms of this Agreement caused by any cause not within such party's direct control (but excluding financial inability) such as an act of God, war, riots or civil disturbance, strikes, accident, fire, transportation conditions, labor and/or material shortages, governmental controls, regulations and permits and/or embargoes.


(b) Notice. All notices, certifications and other required communications hereunder (each a "Notice") shall be in writing and shall be given to the receiving party: (1) personally; (2) by sending a copy of


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such Notice by first class, certified mail, postage prepaid, return receipt requested; (3) by recognized overnight courier service, charges prepaid; or (4) by facsimile, to such party's address or facsimile number set forth below or such other address or facsimile number as the receiving party may modify from time to time by giving notice as provided in this Section 17(b). A Notice shall become effective on the earlier of receipt or: (i) five (5) days after deposit in the United States mail if such Notice is properly addressed as set forth below and sent as provided above; (ii) one (1) business day after deposit with the courier service in the continental United States if such Notice is properly addressed as set forth below and sent as provided above; and (iii) upon transmission if such Notice is sent by facsimile as provided above, successful transmission is confirmed by facsimile report, and a confirming copy of such Notice is sent by first class, certified mail, postage prepaid, return receipt requested.


To EXE:


EXE Technologies, Inc. 8787 Stemmons Freeway Dallas, TX 75247 Attention: C.F.O. Facsimile: 214-775-0913


With copy to:


EXE Technologies, Inc. 300 Baldwin Tower Blvd. Eddystone, PA 19022 Attention: General Counsel Facsimile: 610-447-1824


To Customer before January 1, 2000:


Home Interiors & Gifts, Inc. 4550 Spring Valley Road Dallas, TX 75234 Attention: Jim Livingston Facsimile: ____________________


With copy to:


Home Interiors & Gifts, Inc. 4550 Spring Valley Road Dallas, TX 75234 Attention: General Counsel Facsimile: 972-386-1106


To Customer after January 1, 2000:


Home Interiors & Gifts, Inc. 4055 Valley View Lane, Suite 500 Dallas, TX 75244-5074 Attention: Jim Livingston Facsimile: ____________________


With copy to:


Home Interiors & Gifts, Inc.

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