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Confidential treatment has been requested with

respect to certain information contained in this

document. Confidential portions have been omitted

from the public filing and have been filed separately

with the Securities and Exchange Commission









STRATEGIC MARKETING ALLIANCE AGREEMENT







This Strategic Marketing Alliance Agreement (the "Agreement") is made and entered into as of December 17, 1997 (the "Effective Date") between Portable Software Corporation ("Portable"), a Washington corporation and American Express Company ("AmEx"), a N ew York corporation.



R E C I T A L S



A. Portable has developed and is licensing and marketing its Xpense Management Solution enterprise software products to customers;



B. AmEx provides, inter alia, personal and corporate credit card products and services, travel agency services, and electronic travel booking services and products;



C. Portable and AmEx desire to enter into a strategic worldwide ma rketing alliance providing for the integration of XMS with complementary products and services of AmEx and for the marketing of XMS to Customers and Prospects of AmEx on the terms and conditions set forth in this Agreement.



NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:



1. DEFINITIONS.



1.1 [*]



1.2 "Affiliate" shall mean with respect to any person (which for purposes of this definition shall include individuals and all legal entities), any other person directly or indirectly controlling , controlled by, or under common control with such person. For purposes of this definition, "control" shall mean the power to direct or cause the direction of, the management and policies of such person whether through the ownership of voting interests, b y contract, or otherwise.



1.3 "Authorized User" shall have the meaning given to it in the Volume License Agreement and shall include [*].



1.4 "AXI" shall mean AmEx's corporate travel booking software product.



1.5 "Closing" shall mean conversion of a Lead into a Referred Customer.



1.6 "Corporate Card" shall mean a corporate charge, credit or procurement card issued by AmEx to the employees and agents of Customers for use in connection





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with travel and entertainment expenses or procurement expenses incurred on behalf of Customers.



1.7 "Customer" shall mean a business enterprise that is authorized to use the Corporate Card, [*] or XMS for its own internal business purposes.



1.8 [*]



1.9 [*]



1.10 "Incremental Net Software License Revenue" is the Net Software License Revenue received by Portable from an [*] during the [*] period beginning on the effective date of the Volume License Agreement, that is attributable to [*]



1.11 "Integration Program" shall mean the integration of product and servic e offerings of the Parties in order to add value to the customer experience in using such products and services, including providing compatibility between certain software products and enabling the communication of data between such products.



1.12 "Lead Referral Sales Cycle" shall mean the length of time that elapses between acceptance of a Lead by Portable and the closing of the applicable license transaction.



1.13 Net Software License Revenues shall have the meaning set forth in Section 7.4.



1.14 "Party" shall mean Portable or AmEx.



1.15 "Prospect" shall mean a potential Customer.



1.16 "Referred Customer" shall mean a Prospect with respect to which (i) AmEx has submitted a Lead (as defined in Section 7.1 hereof) , (ii) Portable has accepted the Lead, and (iii) Portable has entered into a Volume License Agreement on or before the Lead Expiration Date. Referred Customers include [*] to the extent XMS is licensed for [*]



1.17 [*]



1.18 "Technical Inf ormation" shall mean all technical information of a Party that is reasonably necessary in order to carry out the Integration Program, including data technologies, specifications, designs, plans, drawings, data prototypes, processes, methods, know-how, sof tware, and copyrighted or copyrightable materials.



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1.19 "Volume License Agreement" shall mean Portable's standard enterprise customer license agreement, a copy of which is attached as Exhibit A.



1.20 "Work Plan" shall mean a plan setting forth the specifications for a component of the Inte gration Program, a description of the development tasks to be accomplished to complete production of such component of the Integration Program, and a schedule for completion of those tasks.



1.21 "XMS" shall mean Portable's Xpense Management Solution software product.



2. MARKETING AND LICENSING OF XMS TO [*]



[*]



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[*]



3. MARKETING AND LICENSING OF XMS TO OTHER CUSTOMERS.



3.1 General. Portable and AmEx wish to cooperate in marketing XMS to Customers and Prospects who are [*]. Portable agrees that it will offer XMS to such Customers on pricing terms no less favorable than those set forth in the then current Master Price List (a copy of which (a) has been provided to AmEx prior to the execution of this Agreement and (b) shall be provided to AmEx whenever such list is revised). Portable represents and warrants to AmEx that it has, or will obtain as promptly as is commercially practicable, the necessary personnel and capacity to adequately provide the services set forth in the Volume License Agreement if such Prospect becomes a Referred Customer.



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3.2 Rebate. In consideration of AmEx's efforts in promoting the use of XMS, Portable agrees to pay a rebate to AmEx in accordance with the provisions of Section 7 of this Agreement.



3.3 Future Negotiations. Upon notice from AmEx given on o r before [*], Portable agrees to enter into negotiations regarding the remarketing and/or reselling of XMS by AmEx to Prospects. Portable and AmEx each agree to negotiate in good faith, the terms and conditions of a remarketing or reseller license. While e stablishment of a reseller relationship is the long term intent of the Parties, nothing in this Agreement shall bind either Party to enter such a relationship or any other relationship other than the relationship defined in this Agreement and neither Part y shall have any liability to the other should a reseller relationship not be established.



4. INTERNAL LICENSE.



4.1 License Option. AmEx shall have the right, exercisable at any time on or before [*] after the Effective Date, to acquire a lic ense (the "License") to use the current version of XMS for its internal data processing operations on the terms and subject to the conditions set forth in Section 4.2 and in the Volume License Agreement, subject to such modifications thereto as may be agr eed through good faith negotiations of the Parties. The License will permit use of XMS by a maximum of [*] North America-based Authorized Users.



4.2 License Pricing. If AmEx exercises its option to acquire a License, AmEx agrees to pay to Portable, on the terms set forth in the Volume License Agreement, (i) a license fee of [*] and (ii) annual maintenance fees equal to [*] of the aggregate software license fees paid under the Volume License Agreement. Licenses covering additional Authorized Users m a y thereafter be purchased at a rate of [*] per Authorized User. Portable agrees, that for the [*] period commencing on the exercise of the License option, it will provide AmEx with consulting services related to AmEx's implementation of XMS at a rate of [ *]. AmEx shall reimburse Portable for its actual travel and out-of-pocket expenses incurred in connection with providing consulting services.



5. PRODUCT INTEGRATION.



5.1 Integration Program. Both Parties agree (i) that they will mutually deve lop Work Plans regarding the Integration Program, (ii) that each will commit and utilize sufficient resources to meet the milestones set forth in any aspect of the Integration Program and to complete development of each Integration Program component in ac c ordance with the Work Plans (including the schedule set forth therein), (iii) that each will use reasonable best efforts to maintain the compatibility of their respective products and services [*] that are part of the Integration Program either currently (as listed in the following sentence) or as later added to the Integration Program by mutual agreement, and (iv) that each will provide to the other, from time to time, a set of features and possible product extensions for





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inclusion in the Integration Program. The initial portion of the Integration Program will be the design and development of [*]. The currently contemplated features of the initial portion of the Integration Program are set forth in Exhibit C-1. [*]



5.2 Technical Information. Each Party agrees to grant to the other Party a nontransferable limited license, d uring the term of this Agreement, to use its Technical Information in connection with the other Party's development of Integration Program components; provided, however, if any such Technical Information is owned by a third party and is non-assignable, pr ior to any use by any Party, the other Party shall (a) first obtain the consent of the owner to such transfer and (b) use its reasonable best efforts to obtain such consent.





5.3 No Financial Obligation. Neither Party shall have any fin ancial obligation with respect to any development work undertaken by the other Party, except as may be set forth in a separate written agreement, or amendment to this Agreement, executed in either case by both Parties.



5.4 Support After Terminatio n. Each Party agrees that following any termination of this Agreement it will take such actions as are reasonably necessary to maintain for each Customer that is a Customer of both AmEx and Portable the level of product and service integration that existe d at termination.



6. MARKETING AND SUPPORT.



6.1 Joint Marketing Responsibilities.



(a) AmEx shall participate with Portable in the development and delivery of a press release announcing the relationship between AmEx and Portable. The press release shall be subject to the prior written approval of both AmEx and Portable.



(b) All information to be disseminated externally about the relationship between Portable and AmEx and the products marketed hereunder shall be reviewed and approved by both Parties prior to any use or other publication.



(c) Portable and AmEx each agree, upon reasonable request, to provide training to one another's sales and marketing personnel regarding the products and services that are being marketed to Customers and Prospects under this Agreement and the Integration Program.





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(d) The Parties agree to participate in a committee (the "Steering Committee") through designated personnel of equal number. The Parties intend that the Steering Committee shall meet at least once per calendar quart er to review the status and direction of the Parties' relationship, the Integration Program, and any issues of concern to either Party regarding the matters that are the subject of this Agreement. All details regarding time, manner, place and agenda for s uch meetings shall be decided by the Steering Committee.



6.2 Marketing and Support Responsibilities of Portable.



(a) Portable shall provide AmEx with Portable marketing literature in such quantities as are reasonably requested from time to time by AmEx for distribution to its Customers and other valid purposes.



(b) Portable shall provide AmEx with such reasonable access to appropriate sales and marketing personnel of Portable as may be mutually agreed by the Partie s in order to present information about AmEx's products or services, the Integration Program, and to conduct the training referenced in Section 6.1(c).



(c) Portable may provide a link from its Website to AmEx's corporate services Website if requested by AmEx, and in that connection agrees to enter into a Hyperlink Agreement in the form annexed hereto as Exhibit D subject to such modifications thereto as may be agreed through good faith negotiations of the Parties. Any material presented on Portable's Website regarding AmEx shall be prepared by AmEx, approved in writing by Portable and subject to the continuing approval of Portable and AmEx.



(d) Portable will provide warranty service and support and Customer One Services to Customers, including [*] under the terms of its Volume License Agreement with each Customer.



(e) Portable agrees that copies of XMS licensed to [*] and Referred Customers shall include an AmEx logo on the splash screen and other mutually agreed areas in a manner proposed by AmEx, and subject to reasonable approval of Portable.



6.3 Marketing Responsibilities of AmEx.



(a) AmEx shall provide Portable with marketing literature of AmEx in such quantities as are reasonably requested from time to time by Portable for distribution to Customers and other valid purposes.



(b) AmEx may arrange for Portable's participation in events sponsored or attended by AmEx that provide a forum for the joint marketing of XMS a nd the products and/or services of AmEx (e.g. user groups, vendor fairs, trade shows, seminars). Each Party will be responsible for its own out-of-pocket expenses incurred in connection





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with these events.



(c) AmEx shall provide Portable with such reasonable access to appropriate sales and marketing personnel of AmE x as may be mutually agreed by the Parties in order to present information about Portable's products and services, the Integration Program, and to conduct the training referenced in Section 6.1(c).



(d) AmEx may provide a link from its corpo rate services Website to Portable's Website if requested by Portable, and in that connection agrees to enter into the Hyperlink Agreement in the form annexed hereto as Exhibit D subject to such modifications thereto as may be agreed through good faith neg otiations of the Parties. Any material presented on AmEx's Website regarding Portable shall be prepared by Portable, approved in writing by AmEx, and subject to the continuing approval of AmEx and Portable.



(e) AmEx shall make no representat ions, warranties, or guarantees to Prospects, Expense Manager Customers, Customers, or the trade with respect to the specifications, features, or capabilities of XMS or the Customer One Services that are substantively inconsistent with the documentation P ortable supplies with XMS, the warranties and disclaimers contained in the Volume License Agreement, or the XMS literature supplied by Portable.



7. LEAD REFERRALS AND ACCEPTANCE.



7.1 Lead Referrals. AmEx agrees to provide Portable with qualif ied XMS customer leads (a "Lead") and shall be responsible for the customer development, marketing, and support functions set forth in Exhibit D for which it is designated a Responsible Party. In order to be eligible to receive a rebate in connection with the referral of a Lead, AmEx must complete and submit within thirty (30) days of pre-qualifying a referral, a "Lead Referral Worksheet" in the form of the attached Exhibit E for each sales opportunity AmEx identifies for XMS. Each Lead Referral Worksheet must be completed in all material respects. A Lead Referral Worksheet may be submitted in either paper or electronic form. [*]



7.2 Lead Acceptance. Portable shall act diligently in responding to Leads submitted by AmEx; a Lead shall be deemed accepted by Portable unless rejected within [*] from the date Portable receives the Lead Referral Worksheet. Portable may [*]





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[*]. Any conflicts will be submitted to the Steering Committee for resolution. With respect to Leads that it has accepted, Portable shall be responsible for the customer development, marketing, and support activi ties set forth in Exhibit E for which it is designated a Responsible Party.



7.3 Rebate Payment Eligibility. Rebate payments shall be payable by Portable to AmEx on each Lead accepted during the term of this Agreement, which is converted into a Ref erred Customer on or before the Lead Expiration Date. The Lead Expiration Date shall be [*] after the date a Lead is accepted by Portable. Leads may be resubmitted by AmEx after the Lead Expiration Date and will be treated pursuant to the terms of Section 7.2 above.



7.4 Rebate Program. For each Referred Customer, Portable shall pay to AmEx a rebate payment [*]



(a) Standard Rebate Rate. For transactions in which the Lead Referral Sales Cycle is [*] the applicable Rebate Rate shall be determined as follows:





Range of [*]

Where The Closing Occurs in This Lead Rebate [*]

Referral Sales Cycle Applicable Within Each Range



------------------------------------- -----------------------------

Level 1 [*] [*]



Level 2 [*] [*]



Level 3 [*] [*]





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(b) Preferred Rebate Rate. For transactions in which the Lead Referral Sales Cycle is [*] the applicable Rebate Rate shall be determined as follows:





Range of [*]

Where The Closing Occurs in This Lead Rebate [*]

Referral Sales Cycle Applicable Within Each Range

------------------------------------- -----------------------------

Level 1 [*] [*]



Level 2 [*] [*]



Level 3 [*] [*]



(c) [*]



7.5 Reporting and Payment. (a) Portable will provide a monthly report to AmEx within thirty (30) days following the end of a calendar month of all accepted or rejected Leads submitted by AmEx and a quarterly report of [*]. Additional reports shall be provided by Portable at AmEx's reasonable re quest. Portable shall use diligent efforts to transition to reporting on [*] on a monthly basis by September 1, 1998.



(b) Rebate payments will not be paid to AmEx until the [*] to which the payment relates are collected by Portable from a Referred Customer. Portable will make such payments to AmEx not later than thirty (30) days following the end of a calendar quarter (or calendar month, after the transition to a monthly reporting system has occurred) based on the [*] collected by Portable during t he applicable period.



7.6 Audit. AmEx may from time to time, but not more than once every twelve (12) months, perform an audit upon reasonable notice to Portable to determine compliance with the terms of this Agreement. Any audit must be conducted during the hours of 8 AM and 5 PM Pacific Time by an indepe n dent certified public accountant selected by AmEx and reasonably satisfactory to Portable and all costs of an audit shall be borne by AmEx; provided, however, that if the results of an audit disclose a shortfall, Portable shall promptly pay to AmEx the am ount of such underpayment and, if the results





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disclose a shortfall of more than two percent (2%) shall also promptly pay to AmEx interest on such underpayment at the rate of twelve percent per annum and the reasonable costs of the audit.



8. TERM AND TERMINATION.



8.1 This Agreement shall commence on the Effective Da te and, unless sooner terminated as provided in this Agreement, shall remain in full force and effect for a term of [*] (the "Initial Term"). Thereafter, this Agreement shall automatically renew for successive [*] (each, a "Renewal Term"), provided, howev er, that a Party may terminate this Agreement on the expiration of the Initial Term or any Renewal Term by delivering written notice of termination to the other not less than sixty (60) days before the expiration of such Initial or Renewal Term.



8.2 Termination. This Agreement may be terminated at any time prior to the expiration of its term, as follows:



(a) By either Party by written notice to the other Party if a receiver shall have been appointed over the whole or any substantial part of the assets of the other Party, a petition or similar document is filed by the other Party initiating any bankruptcy or reorganization proceeding, or such a petition is filed against the other Party and such proceeding shall not have been dismissed or stayed within sixty (60) days after such filing;



(b) By either Party upon written notice if the other Party has breached the terms of this Agreement in any material respect and fails to cure such breach within thirty (30) days after receipt of written notice of such default;



(c) by AmEx if the Financial Statements provided by Portable pursuant to Section 12.4 do not demonstrate that Portable is solvent and able to pay its commercial insurance premiums in commercially reasonable amounts;



(d) by either Party upon written notice given upon the Acquisition (as defined in Section 13.5) of Portable by a [*]; and



(e) by AmEx upon the acquisition of [*] or more of the voting or equity securities of Portable by an AmEx Competitor.



8.3 Effect of Termination. Upon any termination or expiration of this Agreement:



(a) For a period of one year after the date of termination, all applicable books and records of Portable shall be made available to AmEx for the purpose of determining compliance by Portable with its obligations under this Agreement;





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(b) Each Party shall immediately cease distribution of all items in its possession which bear the trademarks of the other Party, shall as promptly as is practicable cease all use of the trademarks of the other Party, and will not use any mark which is confusingly similar to any trademarks of the other Party;



(c) Each Party shall return to the other Party marketing literature and materials of the other Party in its possession or shall destroy such items and certify their destruction to the other Party; and



(d) Each Party's rights and obligatio ns with respect to payments due hereunder as well as the provisions of Sections 2.3, 3.2, 4.1 (unless the Agreement has been terminated by AmEx), 4.2, 5.4, 7.4, 7.5, 7.6, 8.3, 8.4, 9, 10, 11, 12, and 13 shall survive termination of this Agreement. In addi t ion, upon a termination of this Agreement pursuant to Section 8.2(d) or Section 8.2(e), the Parties agree that the provisions of Sections 3.1, 5.1, 5.2, 5.3, 6.1(b), 6.1(d), 6.2, 6.3, 7.1, 7.2, and 7.3 (or such other provisions as may be negotiated pursua nt to Section 3.3 hereof) shall survive termination for a period of twelve (12) months.



8.4 No Damages. NEITHER PORTABLE NOR AMEX SHALL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY KIND, INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSS OF GOODWILL OR LOSS OF PROSPECTIVE PROFITS, ON ACCOUNT OF THE TERMINATION OR EXPIRATION OF THIS AGREEMENT STRICTLY IN ACCORDANCE WITH THE TERMS OF 8.1 OR 8.2; PROVIDED, HOWEVER, THAT A PARTY TERMINATING THE AGREEMENT FOR BREACH PURSUANT TO SECTION 8.2 (b) SHALL BE EN T ITLED TO RECOVER FOR DIRECT DAMAGES CAUSED BY THE BREACH. EACH OF AMEX AND PORTABLE WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS. THE PARTIES ACKNOWLEDG E THAT THIS SECTION 8.4 HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT AND THAT THE PARTIES WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, BUT FOR THE LIMITATIONS OF LIABILITY AS SET FORTH HEREIN.



9. TITLE AND COPYRIGHT.



9.1 General Overview. The Parties contemplate that the Integration Program will include the joint development of technical specifications
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