International Distributor Agreement

International Distributor Agreement


between


Robocom Systems, Inc.


and


C&C Consultores, Argentina


March 28, 1996


NOTE: SECTIONS MARKED WITH AN (*) HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE COMMISSION.


================================================================================



International Distribution Agreement

Robocom Systems. Inc. and C&C Consultores - -------------------------------------------------------------------------------


This Agreement is made this 2 Day of April, 1996 between ROBOCOM Systems, Inc., a New York State Corporation having an office at 511 Ocean Avenue Massapequa, NY 11758 ("ROBOCOM"') and C&C Consultores an Argentinean Corporation having an office at F.D. Roosevelt 2445-Piso 9, (1428) Buenos Aires, Argentina ("Distributor").


Non-Exclusive Territory: Argentina, Chile, Uruguay


WHEREAS:


ROBOCOM owns the right to license proprietary software products (consisting of programs and related documentation); and


Distributor desires to market and sublicense software products of this type; and


ROBOCOM and Distributor wish to enter into an agreement authorizing Distributor to market directly and make copies of certain software products available to End Users in the Territory through Distributor, with Distributor making certain payments to ROBOCOM with respect thereto.


NOW IT IS HEREBY AGREED as follows:


1.0 DEFINITIONS.


1.1 "Programs" mean the actual ROBOCOM computer programs in machine-readable object code or other form covered by this Agreement, including all ROBOCOM provided modifications and enhancements thereto.


1.2 "Documentation" means ROBOCOM user manuals and other materials in printed form which facilitate the use of the Programs by End Users.


1.3 "Software Products" mean any combination of a Program object code and Documentation licensed by ROBOCOM under the terms of this Agreement. "Product" means either a Program or documentation, without drawing a distinction.


1.4 "End User" means an entity authorized for productive use of Software Products. "Productive Use" means any use of any of the Software Products in their application purposes.


1.5 "Territory" means the Non-Exclusive Territory first identified above.


1.6 "Demonstration License" means a license to Distributor for distributor use of Software Product object code for marketing demonstrations, copying for distribution to End Users, maintenance and training, and for use of Software Product source code solely for use in providing End-User support. Neither the source code nor the object code shall be otherwise used or copied. The source code shall be kept only at a single identified Distributor site and shall not be disclosed to third parties.


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 2 Dated: March 28, 1996


International Distribution Agreement

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1.7 "The Commencement Date" means the effective date of the Agreement first written above.


2.0 APPOINTMENT OF DISTRIBUTOR


2.1 License Grant. During the term of this Agreement and subject to all other conditions herein, ROBOCOM hereby grants to Distributor a nonexclusive right to sublicense by itself to End Users in the territory in Distributor's name from Distributor's Territory-resident offices copies of Software Products upon distributor's own terms and conditions, such terms and conditions to be approved by ROBOCOM. Certain Exhibit 1 Products may be identified as requiring or including third party software which, if available from ROBOCOM shall be licensed through ROBOCOM and may be required to be licensed under different or additional terms and conditions.


2.2 Translations. Translation rights and covenants in this agreement relate solely to the translation of information on RIMS screens and reports. During the term of this Agreement and so long thereafter as distributor is furnishing maintenance services to End Users in accordance with this agreement, and subject to all other conditions herein, ROBOCOM grants to Distributor nonexclusive translation and distribution rights in the Territory in RIMS screens and reports and in all ROBOCOM-furnished modifications and updates thereto. All translations shall be exact translations and shall meet ROBOCOM appearance standards. Copyright in such translations shall vest in ROBOCOM immediately at all times and Distributor agrees that all present and future copyright in every translation is hereby assigned, including, but not limited to, rights to create derivative work and any renewal rights and Distributor agrees to execute any documents necessary to vest full copyright ownership in ROBOCOM including a waiver of any distributor moral rights. Distributor agrees that it will provide copies of such translations to ROBOCOM at no charge prior to any distribution, and will provide ROBOCOM with reasonable assistance in securing and enforcing the copyrights(s). Distributor is not permitted to translate or attempt to translate the Programs.


2.3 Title in Products and Modifications. Title and all proprietary rights in the Products, any permitted Distributor modifications in the Products, and any translations thereof shall at all times remain the properties of ROBOCOM or ROBOCOM's Licensor.


Inventions. Any modifications, changes, or improvements made by Distributor to ROBOCOM'S Software will be the sole and exclusive property of ROBOCOM, and will promptly be provided to ROBOCOM. ROBOCOM will have the right to review at the functional design stage, and to review and test code to ensure compatibility with RIMS. In the event the change is incorporated into RIMS as part of the standard package, it will then be available for resale through all channels. In the event it is not incorporated, then for so long as this Agreement is in effect, Distributor will have the right to use and/or sell, subject to the terms of this agreement, such modifications, changes, or improvements, without payment of royalties to ROBOCOM. Maintenance will be the responsibility of Distributor on all changes not incorporated into the standard RIMS product.


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 3 Dated: March 28, 1996


International Distribution Agreement

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2.4 Trade Secret and Confidential Information. Distributor acknowledges that ROBOCOM has advised it that the Software and related documentation are valuable proprietary information and trade secrets of ROBOCOM and that the software (including, but not limited to, the design, programming techniques, flow charts, source code and documentation thereof) is confidential information disclosed to Distributor to be used only as expressly permitted by the terms of this Agreement, whether or not any portion thereof is or may be validly copyrighted or patented. Distributor will take all reasonable steps to protect the software on magnetic tape or disk or in any other form of disclosure by using the same standard of care Distributor uses to protect its own confidential information of a similar nature. Distributor agrees that it will require all those individuals having access to the Software under this Agreement sign a Non-Disclosure Statement. Exhibit 2 attached.


Distributor further acknowledges that, in the event of an actual or threatened violation of the foregoing provision of which Distributor has actual knowledge, Distributor will take immediate steps to stop such threatened violation; that ROBOCOM may not have an adequate monetary remedy and will be entitled to such injunctive relief as may be deemed proper by a court of competent jurisdiction, in addition to any other available remedies. The provisions of the Section 8 will survive the termination of this Agreement.


ROBOCOM agrees that Distributor's obligation to keep confidential any data will not apply to any information or data which: (1) is or becomes publicly known through no wrongful act of Distributor (2) is known to Distributor at the time of disclosure; (3) is rightfully received by Distributor from a third party without breach of this Agreement; (4) is furnished to a third party by ROBOCOM without a similar restriction on the third party's rights; (5) is approved for release by authorization from ROBOCOM; or (6) is disclosed pursuant to the lawful requirement or request of a Governmental Agency or disclosure is permitted by operation of law, provided that Distributor has given prior notice to ROBOCOM and has made a reasonable attempt to obtain a protective order limiting disclosure and use of the information so disclosed.


3.0 CERTAIN ROBOCOM OBLIGATIONS


3.1 Copies of Software Products. ROBOCOM will provide Distributor a single current production UNIX runtime copy of its Software for demonstration and training purposes only. ROBOCOM will also provide Distributor with three copies of all of its User Documentation, for demonstration and training purposes only.


3.2 Maintenance Services. ROBOCOM will provide Distributor the maintenance services as described in Exhibit 3. Distributor will promptly translate documentation, as necessary, and distribute maintenance documentation and unmodified code updates to its End Users.


3.3 Distributor Training. ROBOCOM will provide Distributor training as in Exhibit 4.


3.4 Export Licenses. ROBOCOM will promptly apply for any licenses, if required


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 4 Dated: March 28, 1996


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from the Office of Export Administration, United States Department of Commerce or any other United States Agency for shipment of ROBOCOM software.


3.5 Warranties. ROBOCOM warrants to Distributor that ROBOCOM's proprietary software products as furnished to distributor (excluding those which are categorized as third party software) will work substantially as described in the applicable ROBOCOM published documentation. Distributor acknowledges and accepts that software is inherently susceptible to error and that ROBOCOM's sole obligation shall be to use reasonable efforts to remedy substantial malfunctions of the software by correcting errors or developing a suitable work around. This warranty is subject to ROBOCOM receiving notification in sufficient detail to enable ROBOCOM to demonstrate the error and certify its rectification or the devising of a suitable work around, ROBOCOM does not warrant that all errors are correctable or avoidable.


This warranty shall not apply to software identified as third party software or otherwise identified as being furnished in "AS IS" condition and shall not apply to Distributor or End User modified portions of Software Products or other portions of Software Products to the extent affected by such modifications. ROBOCOM may charge Distributor at ROBOCOM's then-standard rates for ROBOCOM attempts to diagnose and/or remedy problems attributable to Distributor or Distributor's End User modifications or misuse.


3.6 New Versions, Enhancements. ROBOCOM may, from time-to-time, add to Exhibit 'A' new authorized computer models or configurations or new or modified ROBOCOM software and enhancements which, in ROBOCOM's judgment, are appropriate for distribution in the Territory by Distributor.


3.7 Advertising Materials. ROBOCOM will provide Distributor with 500 copies of its existing marketing literature initially, thereafter, copies of advertising and promotional materials, as available and appropriate, at ROBOCOM's cost plus 15 percent (15%). At no charge, ROBOCOM will provide Distributor with a current example proposal for a US End User and the accompanying general system description.


4.0 CERTAIN Distributor OBLIGATIONS


4.1 Compliance. Distributor agrees to comply fully with all of Distributor's obligations under this Agreement.


4.2 Reporting; Copies of Agreements. Within fifteen (15) days of the end of each calendar quarter beginning with the quarter ending ______, 1996, send ROBOCOM a report for the quarter and cumulatively for the contract year a detailed account of all fees due to ROBOCOM under this Agreement including: identification of each sublicensee by name and specific End User site location; specific Programs licensed to the End User and authorized type/model and number of computers; date of sublicense; date of each Program installation; effective dates of maintenance agreements; and ROBOCOM fees and charges (in US dollars) accrued and paid.


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 5 Dated: March 28, 1996


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Robocom Systems. Inc. and C&C Consultores - -------------------------------------------------------------------------------


Distributor represents and warrants that it has the expertise, experience, knowledge of the regional market and financial resources to successfully market, technically support and license the Software in the Territory and to achieve significant market penetration in the Territory.


Distributor will designate one or more individuals to act as sales and application specialist(s) in the area of warehouse and distribution matters, and to professionally present ROBOCOM's Software to interested parties. At its own expense, Distributor will have this specialist(s) spend at least two weeks per year for formal and informal training at a location agreeable to both Robocom and Distributor. The location may be changed by mutual written agreement. Initial training will take place concurrently with the first install in the territory.


Distributor will devote its best efforts to maximizing profitable sales of ROBOCOM's Software in the Territory. This will include undertaking of formal marketing and sales programs, including direct mailing, seminars, and individual in person presentations to prospective customers. Within 90 days from the signing of this agreement, Distributor will submit to ROBOCOM a detailed marketing plan, describing how Distributor intends to market ROBOCOM's Software, and the resources Distributor will devote to this effort.


Distributor will prepare its own price and technical proposals for prospective customers. For customers requiring services other than or in addition to ROBOCOM's standard Software, ROBOCOM will not be bound by the provisions of Distributor's proposal except by prior written agreement. Distributor will require that all customers for ROBOCOM's Software sign a Software License Agreement identical to that shown in Exhibit 6, and that they comply with other reasonable conditions to protect ROBOCOM's interests.


Distributor will provide initial technical support for its customers using ROBOCOM software.


In addition, Distributor shall keep executed End User licenses, maintenance agreements and disclosure agreements on file, and on request from ROBOCOM, will provide at no charge copies of such licenses or agreements to ROBOCOM. If any license or agreement is in a language other than English, an English translation shall be made available by Distributor.


4.3 Examination of Records. Distributor will allow ROBOCOM representatives to examine Distributor's records to confirm accurate and timely payment of royalties by Distributor. Any such examination shall be conducted within fifteen (15) days of Distributor's receipt of ROBOCOM's written request and shall be performed during normal business hours, at a time mutually agreed upon by ROBOCOM and Distributor. ROBOCOM's cost of such an examination shall be borne by ROBOCOM unless late payment or a discrepancy in excess of two (2%) in payments of royalties is discovered for any quarter, in which case ROBOCOM's cost of the examination shall be born by Distributor. Any confidential information belonging to Distributor will be kept confidential by ROBOCOM.


Distributor will maintain proper accounting records, and allow reasonable inspection by


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 6 Dated: March 28, 1996


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ROBOCOM, to verify amounts payable to ROBOCOM. ROBOCOM will have the right, at any time, and at ROBOCOM's expense, to appoint an independent auditor to verify the Distributor has not violated any portions of this agreement. If an independent auditor is appointed by ROBOCOM for this purpose, Distributor will provide said auditors with access to its records during normal business hours.


4.4 Proprietary Notices. Distributor agrees to reproduce on all permitted copies ROBOCOM and/or ROBOCOM's licensor's copyright and other proprietary notices and, according to ROBOCOM instruction, any trademark notices as included in the Software Products and in any ROBOCOM-furnished marketing materials, training aids and other ROBOCOM-furnished materials and on any permitted translations thereof. Distributor recognizes and agrees that Distributor obtains no rights in the Software Products and other ROBOCOM materials except for the limited rights specifically granted under this Agreement.


4.5 Modifications; License Enforcement. Distributor agrees that it will not modify software Products except for End User support, not duplicate software Products otherwise than as expressly authorized herein and use its best efforts to ensure that its End Users do not use Software Products in violation of the agreement and the End User license agreement, including, but not limited to, productive use on more than the authorized number of computers or on a model of computer bearing a higher sublicense fee than paid by Distributor to ROBOCOM, or use the software Products for the benefit of entities other than the End User. Distributor shall promptly notify ROBOCOM and provide reasonable assistance to ROBOCOM without charge to assist ROBOCOM in prosecution of any trade secret, copyright or trademark infringements which come to Distributor's attention, and shall be undertaken by ROBOCOM and at its expense.


4.6 Technical Support. Distributor agrees to provide all direct technical support for the software Products to Distributor's end User licensees. Direct technical support is defined as:


A. Providing all End User training and application support and answering
all End User operational and use questions;


B Reproducing reported problems and reporting them in writing to
ROBOCOM's technical support center;


C. Endeavoring to answer technical End User questions prior to requesting
assistance from the ROBOCOM support center, and documenting the
answers furnished to End Users;


D Using the Development License source code at Distributor's site solely
to understand and fix or develop a work around for reported software
problems. In each instance of modification of the source code for this
purpose or development of a work around, Distributor will coordinate
the change with ROBOCOM and will promptly provide ROBOCOM with a copy
of the commented source code modifications and identification of the
End User(s) to which the change relates; and


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 7 Dated: March 28, 1996


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E. Providing weekly written reports to ROBOCOM support center of all
support activity and any new problems reported and solutions to
problems, if known.


4.7 Technical Staffing. Distributor agrees to establish and maintain at all times a capable trained technical support staff sufficient to provide technical support as defined in item 4.6 above, including, but not limited to, having two senior systems analysts trained on the Software Products at all times.


4.8 End User Communications. Distributor agrees to ensure that each supported End User CPU includes a 2400 baud modem available for support purposes and communications adequate for the provision of support functions.


4.9 Distributor communications. Distributor agrees to provide ROBOCOM with the telephone numbers on which Distributor provides voice and modem technical support and with the End User telephone numbers on which each End User receives voice and modem technical support.


4.10 Support Services. Distributor agrees that it will provide support services only to End Users for whom all required royalties and maintenance fee payments to ROBOCOM are current.


4.11 Warranties Solely on Behalf of Distributor. Distributor agrees that it will make any warranties or other representations and maintenance commitments to End Users solely for Distributor and not on behalf of ROBOCOM and will indemnify and save ROBOCOM harmless from any claimed by Distributor End Users for maintenance services, breach of warranty, performance failure or failure of any Product to meet a description.


4.12 Translations. At its sole expense, Distributor will make any translations of the RIMS screens and reports and all modifications and updates thereto for itself and End Users in accordance with this Agreement Such translations shall be subject to the provisions of Paragraphs 2.2 and 2.4 above Any services requested by Distributor and furnished by ROBOCOM will be furnished at ROBOCOM's then standard rates and reasonable expenses.


4.13 Source Code. Distributor agrees to hold all Program source code in strict confidence and as valuable confidential information belonging to ROBOCOM and not to disclose such code to any person except Distributor's employees on a need to know basis.


4.14 Return of Materials upon Termination. Upon any termination of this Agreement, Distributor will immediately return or certify destruction of the Programs and documentation, including any copies, information or notes relating thereto except to the extent temporary retention is reasonably necessary for not more than one year from termination to fulfill End User maintenance commitments made by Distributor in good faith and in accordance with this Agreement. ROBOCOM agrees that it will offer software Product maintenance services to such End Users following the termination of this Agreement for ROBOCOM supported then-current versions of Software Products.


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 8 Dated: March 28, 1996


International Distribution Agreement

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4.15 Payments. Distributor will make all payments in United States currency at ROBOCOM's offices, first stated above, or as otherwise directed by ROBOCOM and without deductions based on any currency control restrictions, import duties, or sales, use, value-added or other taxes or withholdings. Distributor will bear all taxes, however designated, imposed as a result of the existence or operation of this Agreement, including, but not limited to, any tax which Distributor is required to withhold or deduct from payment to ROBOCOM, except, (a) any such tax imposed upon ROBOCOM by any governmental entity in the United States and (b) any such tax imposed upon ROBOCOM in the country in which the office of Distributor is located or in which the End User is located if such tax is allowable as a credit against United States income taxes of ROBOCOM. To assist ROBOCOM in obtaining such credit, Distributor shall furnish ROBOCOM with such evidence as may be required by United States taxing authorities to establish that such tax has been paid. Currency conversion shall be made as of the exchange rate on the last business day before the day payment is due. All monetary amounts in this Agreement are in US dollars.


4.16 Import and Export Controls. At Distributor expense, Distributor will obtain any necessary import certificates or permissions and provide all necessary assistance to ROBOCOM in obtaining any required export or other licenses from United States governmental agencies, including, but not limited to, certifications as to use and ultimate destination and/or written agreement not to knowingly transmit directly or indirectly software Products to certain named countries. Any such licenses or other documents shall become attachments to this Agreement and part of Distributor's obligations hereunder. Concurrent with signing this agreement Distributor will sign an Export Controls letter.


4.17 Competitive Products. Distributor agrees to permit termination of this Agreement by ROBOCOM if Distributor sells and promotes products competitive with ROBOCOM products permitted to be marketed under this Agreement. Prior to any action being taken by ROBOCOM, a discussion would take place to allow Distributor to explain the method of marketing and sale and demonstrate that these products were not competitive to ROBOCOM's products.


4.18 Product Names; Trademarks. Distributor agrees to use ROBOCOM Product names in association with the products and use any ROBOCOM trademarks as instructed by ROBOCOM so as to protect ROBOCOM rights and continue identification of the Products with ROBOCOM in the Territory.


4.19 Sales Projections. Provide ROBOCOM with quarterly sales projections covering at least the next six quarters.

4.20 Fees and Payment; Maintenance Payments. Beginning with the first system installed, for ROBOCOM Standard Software sold to Distributor customers headquartered in the Territory, or elsewhere (as long as the right to distribute ROBOCOM's Software has not been revoked), for which Distributor takes primary installation and support responsibility, Distributor will charge customers the list prices and pay ROBOCOM an amount equal to *% of the current list prices (shown on the attached price list, Exhibit 5) or *% of a mutually agreed discounted price which is commercially satisfactory to both ROBOCOM and Distributor, for their modules purchased and


*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. FILED SEPARATELY
WITH THE COMMISSION.


- -------------------------------------------------------------------------------- ROBOCOM SYSTEMS, INC./ Name Page 9 Dated: March 28, 1996


International Distribution Agreement

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installed. Should Distributor for any reason decline to take primary i ...