OEM AGREEMENT

SEARCH'97(TM) OEM AGREEMENT

VERITY, INC.

894 ROSS DRIVE

SUNNYVALE, CALIFORNIA 94089

("VERITY")



ELOQUENT, INC.

("LICENSEE")



1710 SOUTH AMPHLETT BLVD., SUITE 200

SAN MATEO, CALIFORNIA 94402-2703





1. DEFINITIONS. Certain of the defined terms used in this Agreement are as follows:



1.1 "SOFTWARE" means the computer software, in object code form only, which Verity owns or has the right to license to Licensee under this Agreement, including the Development Software and the Run-Time Software, for use in connection with Application. The specific Verity products incorporating the Software to be licensed to Licensee are listed in Exhibit A.



1.2 "RUN-TIME SOFTWARE" means the portion of the Software which must be incorporated in the Application to execute the search, retrieval and other functionality of the Software.



1.3 "DEVELOPMENT SOFTWARE" means the tools and other portions of the Software (including, without limitation, LIBVDL(#).LIB and LIBVDL(#).a code) which are used to incorporate the Run-Time Software in the Application and enable the Run-Time Software to provide search, retrieval and other functionality within the Application.



1.4 "DOCUMENTATION" means the documentation, instructions and user's guides, including updates thereto, relating to the Software, whether in printed or electronic format, provided by Verity to Licensee for the purposes of this Agreement.



1.5 "APPLICATION" means the software application program, including content or data owned or licensed by Licensee from third parties, which is developed by Licensee with the use of the Development Software and which executes the Run-Time Software for the purposes described in Exhibit C. The Application shall be enabled solely for the "Basic Search" and "Advanced Search" functionality (as defined in Exhibit A) incorporated in the Software. The Application shall not provide direct or exposed access to the development tools or capabilities of the Development Software. The Application shall access, modify, and/or manipulate only those Collections which it creates.



1.6 "COLLECTIONS" means the data structures created by Software and required for the Run-Time Software to operate.



1.7 "PLATFORM" means a binary compatible combination of hardware and operating system software supported by Verity that will run the Software and the associated Application. The supported Platforms upon which Licensee may operate the Software and the Application are set forth in Exhibit C.



1.8 "TERRITORY" means worldwide.



2. LICENSE GRANT.









2.1 APPOINTMENT OF LICENSEE. Verity appoints Licensee as a Search'97Tm OEM and, subject to the terms and conditions of this Agreement, grants to Licensee certain rights to the Software during the term of the Agreement, as set forth below. The parties acknowledge that the Software may contain software licensed by Verity from third parties (the "Verity Licensors. Verity reserves all rights not expressly granted hereunder.



2.2 THE DEVELOPMENT SOFTWARE.



2.2.1 DEVELOPMENT OF APPLICATION. Verity grants to Licensee a nonexclusive and nontransferable right to use the Development Software on the Platforms at Licensee's locations solely in the United States and solely for internal development of the Application and related internal demonstration and training of its personnel. In connection with such use, Licensee shall have the right to make a reasonable number of copies of the Development Software for normal backup and archival purposes only.



2.3 APPLICATION DISTRIBUTION. Verity grants to Licensee a nonexclusive and nontransferable right to use, market, reproduce and distribute the Run-Time Software solely as an embedded component of the Application and only in the Territory. Licensee's right to distribute the Application is limited to those persons who sublicense the Application for their own business or personal use ("End Users") and those persons who sublicense the Application for redistribution to End Users ("Resellers"). To help assure quality, the Application may only be licensed for use on the Platforms. Licensee acknowledges that Licensee has no right to use, or sublicense others to use, the Software for any dial-up, remote access, interactive, Internet-based or other on-line service except that Licensee does have the right to use and sublicense Resellers and End Users the Application for any dial up, remote access, interactive, Internet based, extranet based, intranet based or other on-line service, provided that such is made via the use of the Licensee Application on the client as well as on the server site.



2.4 DOCUMENTATION. Verity grants to Licensee a nonexclusive and nontransferable right to reproduce the Documentation only in the United States solely: (i) to distribute the End User portions of the Documentation in the Territory with the Application and (ii) for use internally by Licensee's personnel in the United States in connection with the support of the Application.



2.5 SUBLICENSE RIGHTS.



(a) REPRODUCTION. Licensee may sublicense its right to reproduce the Application and the Documentation only to subcontractors (other than Resellers) in the United States who agree in writing to be bound by terms substantially similar to Section 9 ("Confidentiality"). Licensee and its subcontractors will manufacture each copy of the media containing, the Software under a quality assurance program designed to accurately reproduce the Application without introduction of a virus or other embedded device or code in the Software (e.g., back door, time bomb, Trojan Horse or worm) that is intended to obstruct or prevent use of the Software.



(b) SUBLICENSE AGREEMENTS. Any distribution of the Application shall be accomplished under a license agreement ("Sublicense Agreement") between the Licensee and the person to whom the distribution is made. Each Sublicense Agreement pertaining to a distribution to a Reseller (including Resellers through multiple tiers of distribution) shall be signed by the Reseller and shall contain terms and conditions at least as protective of Verity's proprietary rights as the terms and conditions of this Agreement, including, without limitation, the applicable provisions of Sections 2.3 (subject to section 2.5(a)), 7, 8, 9, 10 (disclaimer only), 11.2, 12, 13, 15.4, 15.6 and 15.7. Any Sublicense Agreement pertaining to a distribution to an End User in the United States may be through a shrink-wrap substantially in the form attached as Exhibit D, so long as the End User is required to take an affirmative act of consent to the terms of such shrink-wrap by opening the Application package or clicking a button to initiate installation only after an opportunity to view the applicable terms and conditions. Licensee will promptly notify Verity of any violation of a Sublicense Agreement of which it becomes aware, and will take commercially reasonable efforts to enforce each Sublicense Agreement with at least the same degree of diligence used in enforcing similar agreements governing end users of Licensee's own products. Such Sublicense Agreements shall also state that Verity is a third party beneficiary of such agreements with respect to provisions relating to use of the Application, and that such provisions are also enforceable by Verity.









2.6 SAMPLE APPLICATIONS. Licensee agrees to deliver to Verity ten (10) copies of a Demo Disk Application within thirty (30) days of execution of this Agreement. Licensee grants to Verity a worldwide, nonexclusive, nontransferable, royalty-free and fully-paid right and license solely to use such copies internally and to demonstrate such copies to existing and potential customers for marketing purposes subject to the terms and conditions set forth for each Demo Disk.



3. TERM. This Agreement shall remain in effect for an initial term of three (3) years from the Effective Date, unless terminated earlier in accordance with Section 14. The Agreement will renew automatically for successive one (1) year terms unless written notice of termination is received by either party at least thirty (30) days prior to the end of the then-current initial term or renewal term.



4. LICENSE AND OTHER FEES. Fees (including sublicense fees) for the Software and for all related support, training and other services offered by Verity are set forth in Exhibit A. Licensee will pay all applicable shipping charges and taxes (except for taxes based upon Verity's net income). All amounts required to be paid to Verity hereunder shall be paid within thirty (30) days from the date of Verity's valid applicable invoice.



5. SOFTWARE SUPPORT AND TRAINING.



5.1 INTERNAL SOFTWARE SUPPORT. During the term of this Agreement, Licensee may obtain Software support, as further described in Exhibit B from Verity for the purpose of Licensee's provision of support to its End Users and Resellers. All items delivered by Verity in providing such support, including Error Corrections and Software Updates, shall be deemed to become a part of the applicable Software and shall be subject to all terms and conditions of this Agreement.



5.2 SECOND-LINE SOFTWARE SUPPORT. Licensee is responsible for providing front-line support to its End Users and Resellers with respect to Software installation, on-going technical support, training and consultations relating to the Application. Any direct request to Verity for support services by the Licensee's End Users or Resellers; will be referred to Licensee.



6. ORDERING AND DELIVERY OF SOFTWARE. All orders for Software or other products or services issued by Licensee shall be deemed subject to this Agreement and shall specify the quantity ordered, the discounted price, Platform, and the location thereof Licensee understands and agrees that any additional terms and conditions of the Licensee's order shall be void and of no effect. No orders shall be binding until the earlier of Verity's written confirmation or shipment. Upon receipt of Licensee's initial purchase order, Verity shall deliver to Licensee (i) the number of copies of Verity products comprising the Software described on Exhibit A, (ii) one (1) golden master copy of the Run-Time Software on magnetic media and (iii) one (1) copy of the Documentation. Verity shall deliver to Licensee one (1) copy of any Error Corrections or Software Updates to the Software on magnetic media and one (1) copy each of the applicable Documentation, if any, promptly upon distribution by Verity of such Error Corrections and Updates to other Verity OEMs. All shipments shall be FOB shipping point. All orders delivered shall be deemed accepted by Licensee upon delivery.



7. RECORDS AND REPORTS. Licensee shall keep complete and accurate records relating to its use and marketing of the Application in accordance with standard business practices in the computer industry and generally accepted accounting principles. Within thirty (30) days after each calendar quarter, Licensee shall provide Verity with a written sales report in the form supplied by Verity. Such reports shall, at a minimum, contain information detailing each Application distributed for the applicable reporting quarter, including (i) the number of copies sold during the reporting period and the region of distributions, broken down by month and on a cumulative basis; (ii) an accounting of the sublicense fees associated with such copies; and (iii) second-line support fees due to Verity associated with such copies. To assure compliance with the payment and reporting requirements of this Agreement, Verity's independent auditors may inspect Licensee's applicable records from time to time, but no more frequently than once per year, upon ten (10) days notice and during normal business hours. In the event any inspection of Licensee's records indicates an underpayment of an amount equal to or greater than five percent (5%) of any amounts due hereunder, Licensee shall promptly reimburse Verity for all reasonable expenses associated with such inspection along with the deficient amounts.







8. TITLE, USE OF TRADE NAMES AND TRADEMARKS.



8.1 PROPRIETARY RIGHTS. Title and ownership of all proprietary rights in the Software, including any copyright, patent, trade secret, trademark or other intellectual property rights, will at all times remain the property of Verity and the Verity Licensors. Licensee agrees not to remove or obliterate any copyright, trademark or proprietary rights notices of Verity or the Verity Licensors from the Software or Documentation and shall reproduce all such notices on all authorized copies of the Software or Documentation. Licensee shall not modify, translate, disassemble, decompile, reverse engineer or cause or allow discovery of the source code of the Software in any way. In addition, Licensee shall include a copyright notice in the "About" screen.



8.2 TRADEMARKS. Verity hereby grants to Licensee a non-exclusive, limited license to use the applicable Verity trademarks and logos ("Trademarks") solely as permitted in this Agreement. Licensee agrees to cooperate with Verity in facilitating Verity's monitoring and control of the nature and quality of such products and services, and to supply Verity with specimens of use of the Trademarks upon request. Licensee understands and agrees that the use of any Trademark in connection with this Agreement shall not create any right, title or interest, in or to the use of the Trademark and that all such use and goodwill associated with the Trademark will inure to the benefit of Verity. Licensee agrees not to register or attempt to register any Trademarks.



8.3 BRANDING; COOPERATIVE EFFORTS. The parties agree to determine mutual co-marketing obligations at a later date.



9. CONFIDENTIALITY. Each party shall hold in confidence all materials or information disclosed to it in confidence hereunder ("Confidential Information") which are marked as confidential or proprietary, or if disclosed verbally, reduced to writing and marked confidential within thirty (30) days after the date of disclosure. Confidential Information shall also include any new product information or the results of any bench mark or similar tests on the Software conducted by Licensee or divulged by Licensee to Verity. Each party agrees to take precautions to prevent any unauthorized disclosure or use of Confidential Information consistent with precautions used to protect such party's own confidential information, but in no event less than reasonable care. The obligations of the parties hereunder shall not apply to any materials or information which; (a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving party, generally known or available; (b) is known by the receiving party at the time of receiving such information as evidenced by its records; (c) is hereafter furnished to the receiving party by a third party, as a matter of right and without restriction on disclosure; (d) is independently developed by the receiving party without any breach of this Agreement; or (e) is the subject of a written permission to disclose provided by the disclosing party. ...