ISM Subscription Services Agreement

ISM®
SUBSCRIPTION SERVICES AGREEMENT

THIS SUBSCRIPTION SERVICES AGREEMENT (this “Agreement”) is made and entered into as of the date on which payment of the Fixed Royalty is made pursuant to Section 4 (the “Effective Date”) by and between Institute for Supply Management, Inc., a New York not- for-profit corporation having a business address of 2055 East Centennial Circle, Tempe, Arizona 85284 (“ISM”), and the person identified as the subscriber on acceptance of this Agreement (“Subscriber”, and together with ISM, the “Parties”).

WHEREAS, ISM is the author of the ISM Manufacturing and Non-Manufacturing REPORT ON BUSINESS® published monthly, and owns all right, title and interest therein (collectively, the “ROB”).

WHEREAS, ISM offers access to the historical data included in the ROB as updated from time to time (the “Historical Data”) to third parties through a paid subscription service.

WHEREAS, Subscriber wishes to avail itself of ISM’s subscription service so that it may access and use the Historical Data.

NOW, THEREFORE, in consideration of the promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Section 1. Use of the Historical Data.

a.Use of the Historical Data is according to three mutually exclusive categories (“Use Categories”):

(i)“Internal Use Only”: Subscriber and the Subscriber’s employees (the “Internal Authorized Users”) are authorized to use the Historical Data strictly within Subscriber’s business for internal business purposes by Internal Authorized Users (“Internal Use”) with no distribution of the Historical Data beyond Internal Authorized Users, in whole or in part, either as provided by ISM or within derivative works produced by Internal Authorized Users,

(ii)“Internal Use and Article Authoring”: Subscriber and its Internal Authorized Users are authorized to use the Historical Data for Internal Use and to use the Historical Data in quotations, charts, graphics, or other visual representations that do not include more than six months of Historical Data within a journalistic article made available to the public, or

(iii)“Internal Use and Redistribution”: Subscriber and its Internal Authorized Users are authorized to use the Historical Data for Internal Use and in Subscriber’s products that incorporate the Historical Data in whole or in part, and that are made available by Subscriber (“Redistribution”) to its third party customers solely for Internal Use by those third party customers and their employees (the “External Authorized Users”).

b.Internal Use Only or Internal Use and Article Authoring shall require the Subscriber to abide by the requirements of Section 4(a) and 5 and all other applicable terms and conditions.

c.Internal Use and Redistribution or any disclosure of the Historical Data by Internal Authorized Users or External Authorized Users to any third parties not authorized to access the Historical Data, whether willfully or inadvertently, beyond the strictly limited scope of Internal Use Only or Internal Use and Article Authoring shall change the Subscriber’s Use Category to Internal Use and Redistribution of the Historical Data and shall require the Subscriber to abide by the requirements of Sections 4, 5, 7, and 12 and all other applicable terms and conditions. Once a Subscriber’s Use Category is changed to Internal Use and Redistribution, that Category and the related rights and responsibilities shall apply for the remainder of the Initial Term or current Renewal Term.

Section 2. License. Subject to the terms and provisions of the Agreement, ISM hereby grants to Subscriber a non-exclusive, non-assignable, non-sublicensable and non- transferable limited right and license (“License”) to use the Historical Data for Internal Use Only, Internal Use and Article Authoring, or Internal Use and Redistribution during the Term (as defined below in Section 3), so long as Subscriber has met all payment and other obligations set forth in the Agreement. The Parties acknowledge and agree that Subscriber shall have the right to use the Historical Data (as defined in Section 1) solely in accordance with the terms of this Agreement. Subscriber expressly acknowledges and agrees that neither Internal Authorized Users nor External Authorized Users shall have any right to make use of the Historical Data in any way except as set forth in this agreement.

Section 3. Term. The term of the Agreement begins on the Effective Date and will continue for one year, unless otherwise terminated pursuant to the Agreement (the “Initial Term”). Unless Subscriber provides written notice of its intention not to renew the subscription prior to the expiration of the Initial Term or any Renewal Term or the Agreement is otherwise terminated as permitted herein, this Agreement automatically will be renewed for additional and successive periods of one year each (each a “Renewal Term” and, collectively, the “Renewal Terms”) commencing on the next day following the Initial Term or the immediately preceding Renewal Term.

Section 4. Royalties.

a.For the Initial Term, Subscriber will pay to ISM an “Annual Subscription Royalty” of (a) $2,500, due on the Effective Date (the “Fixed Royalty”), and (b) if Subscriber is in the Internal Use and Redistribution Use Category it also shall pay to ISM the greater of $2,500 or 15% of the Subscriber’s gross revenues realized

from its distribution of the Historical Data or any product incorporating the Historical Data in whole or in part to External Authorized Users during the Initial Term and any Renewal Term (the “Variable Royalty).

b.The Fixed Royalty is due and payable upon acceptance of this Agreement by the Subscriber and at the commencement of each Renewal Term. The Variable Royalty is due and payable as set forth in Section 7(d).

c.Subscriber hereby authorizes ISM to automatically charge the Fixed Royalty portion of the Annual Subscription Royalty to Subscriber’s credit card or billing information on file with ISM.

d.Upon Subscriber’s failure to timely pay any portion of the Annual Subscription Royalty to ISM, ISM may immediately suspend the License granted to Subscriber and discontinue Subscriber’s access to the Historical Data.

e.ISM reserves the right to adjust the amount of the Annual Subscription Royalty from time to time and in its sole discretion. Any such adjustment will become effective as of the start of Subscriber’s next Renewal Term.

Section 5. Restrictions.

a.At the outset of the Initial Term and upon receipt and first use of each monthly publication of the Historical Data, , Subscriber shall provide written notice to its Internal Authorized Users that (i) the Historical Data is provided only for their internal use; (ii) the Internal Authorized User is expressly prohibited from redistributing the Historical Data in whole or in part or any work or publication incorporating the Historical Data; and (iii) any Redistribution or disclosure of the Historical Data in whole or in part to External Authorized Users or other third- parties constitutes Internal Use and Redistribution and binds subscriber to all applicable sections of this Agreement.

b.Subscriber is obligated to inform ISM if its Use Category converts to Internal Use and Redistribution. Upon conversion to that Use Category, Subscriber (i) must inform ISM of its conversion and (ii) is immediately bound to perform upon all of the obligations and requirements of that Use Category, including but not limited to payment of the Variable Royalty as set forth in Sections 4(a) and 4(b).

c.Subscriber is solely responsible for each Authorized User’s compliance with the terms and conditions of this Agreement. Subscriber shall use commercially reasonable efforts to prevent unauthorized third parties from accessing the Historical Data, including by restricting access to Subscriber’s related login information solely to Authorized Users. Any breach by an Authorized User shall be deemed a breach by Subscriber..

d.Except as otherwise provided herein, Subscriber will not: (i) copy, reproduce, disclose or publicly display the Historical Data; (ii) directly or indirectly license, distribute, resell, rent, lease, subcontract, operate as a service bureau or otherwise

make available to any third party, the Historical Data; (iii) develop a competitive product or service using the Historical Data or any portion thereof; (iv) disclose its passwords or other security or authentication device with respect to the Historical Data to any entity other than an Authorized User; or (v) use the Historical Data in a manner that constitutes a violation of any applicable law, rule or regulation..

Section 6. Intellectual Property Rights. The Parties acknowledge and agree that ISM is and shall be the sole owner of any and all right, title and interest in and to the Historical Data, including all copyrights therein and all trademarks associated therewith, including but not limited to the trademarks ISM®, INSTITUTE FOR SUPPLY MANAGEMENT®, REPORT ON BUSINESS®, PMI® and NMI®. The Parties further acknowledge and agree that ISM has the exclusive right to license and manage the Historical Data and its intellectual property rights. The Historical Data is protected by United States copyright laws and international treaty provisions. The Agreement provides Subscriber with only a limited-use license and no ownership of the Historical Data or its intellectual property, features or development methodologies.

Section 7. Audit and Inspection.

a.ISM, on ten (10) days’ written notice, is entitled once per year to audit the books and records of Subscriber which relate to the calculation of the royalty payable to ISM under this Agreement. Subscriber shall make such books and records available to ISM for inspection during normal business hours at a location reasonably designated by Subscriber. ISM will comply with Subscriber’s reasonable security, operational and confidentiality procedures when inspecting Subscriber’s records.

b.If ISM disputes the amount of the Annual Subscription Royalty due to it, ISM will notify Subscriber in writing. The amount of the Annual Subscription Royalty due to ISM will then be determined on an expedited basis by an independent accountant to be appointed by agreement between the Parties (the “Accountant”). Each Party will make available in confidence all relevant documents which the Accountant may reasonably require for purposes of the Accountant’s determination. The decision of the Accountant, who will act as an expert and not an arbitrator, is final and binding between the parties except in the presence of manifest error on the face of the Accountant’s decision.

c.Upon a determination by the Accountant pursuant to Section 7(b) above, Subscriber shall pay to ISM any additional amounts which the Accountant determines are due to ISM, and ISM shall repay any overpayments by Subscriber which the Accountant determines have been made. The reasonable costs of the Accountant will be borne by Subscriber if the Accountant determines that Subscriber has underpaid ISM by more than 10% during the period being audited. In all other cases, the cost will be borne by ISM.

d.The Variable Royalty shall be paid to ISM at the end of each quarter during the Initial Term and any Renewal Term by wire transfer in accordance with wire instructions provided by ISM from time to time, as follows: the greater of $625

or an amount based on the percentage formula in Section 4(a) calculated from the Effective Date and taking into account any prior quarterly payments made pursuant to this Section 7(d).

Section 8. Termination.

a.Right to Terminate. ISM may terminate the Agreement without prejudice to any of its rights in law, equity or otherwise, if: (i) Subscriber fails to materially comply with or perform any provision of the Agreement and such failure continues for more than 5 days after receiving written notice thereof; (ii) Subscriber fails to pay any Annual Subscription Royalty within 5 days of the date on which an Annual Subscription Royalty payment becomes due and payable; (iii) Subscriber is insolvent or unable to pay its debts as they mature, as evidenced by filing a petition or other proceeding under bankruptcy, insolvency, or similar laws; (iv) Subscriber is named in, or its property is the subject of, a suit for the appointment of a receiver; or (v) Subscriber is dissolved or liquidated.

b.Effect of Termination or Expiration. Upon termination or expiration of this Agreement, (i) all unpaid Annual Subscription Royalties through the date of termination or expiration are due and payable in full to ISM; (ii) the License granted hereunder shall terminate immediately, and all rights and interests granted hereunder to Subscriber under such License cease immediately; and (iii) the parties acknowledge and agree that there will be no refund of the Initial Royalty or any royalty for a Renewal Term in the event that Subscriber terminates this Agreement prior to the end of the Initial Term or any Renewal Term.

Section 9. Notices. All notices, requests, demands and other communications to any Party or given under this Agreement will be in writing and delivered personally, by overnight delivery or courier, by registered mail, or by electronic transmission (with confirmation of receipt of transmission) to the Parties at the address or electronic mail address specified below. All notices, requests, demands and other communications will be deemed delivered when actually received.

If to ISM: Institute for Supply Management, Inc.
  2055 E. Centennial Circle
  Tempe, AZ 85284-1898
  Attn: Thomas W. Derry, CEO
  Phone: (800) 888-6276 X3034
  Fax: (480) 152-3902
  Email: tderry@ism.ws
  
  
With a copy to (which shall Gibbons P.C
not constitute notice): One Pennsylvania Plaza, 37th Floor
  New York, NY 10119-3701
  Attn: Catherine M. C. Farrelly, Esq.
  Phone: (212) 613-2071
  Fax: (212) 554.9651
  Email: cfarrelly@gibbonslaw.com
  
  
If to Subscriber: To the contact information provided upon
  acceptance of this Agreement.

Section 10. Successors and Assigns. This Agreement is binding upon and shall inure to the benefit of each Party and their respective permitted successors and assigns.

Section 11. Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that (i) it has full power and authority to execute and deliver the Agreement and perform its obligations hereunder; (ii) it has duly executed and delivered the Agreement; (iii) the Agreement constitutes the legal, valid and binding obligation of it, enforceable against it in accordance with the terms hereof; and (iv) its execution, delivery and performance of the Agreement will not conflict with, result in the breach of, or constitute a default under any arrangement or agreement to which it is a Party or by which it is bound.

Section 12. Irreparable Harm. The Parties acknowledge and agree that ISM shall be irreparably harmed by any breach by Subscriber of its agreements to (a) restrict access and use of the Historical Data to Internal Authorized Users and External Authorized Users, and (b) prevent Internal Authorized Users and External Authorized Users from using the Historical Data other than as expressly permitted by this Agreement. Subscriber agrees that ISM shall be entitled to

(a) injunctive relief to restrain any such breach or anticipated breach thereof and to specifically enforce the provisions hereof, and (b) liquidated damages of $2,500 per unauthorized disclosure or use of the Historical Data. ISM and Subscriber further acknowledge that the foregoing rights and recourses are in addition to any other rights and recourses available to ISM as a result of such breach or anticipated breach.

Section 13. Limited Warranty; Disclaimer of Certain Warranties. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, ISM PROVIDES THE HISTORICAL DATA “AS-IS.” ISM SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. ISM MAKES NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH REGARD TO THE USE AND FUNCTIONALITY OF THE HISTORICAL DATA. EXCEPT AS EXPRESSLY STATED IN THE AGREEMENT, THERE IS NO WARRANTY OR GUARANTEE THAT THE HISTORICAL DATA IS VIRUS-FREE, THAT IT WILL OPERATE IN A MANNER THAT IS UNINTERRUPTED, ERROR-FREE OR TRANSFERABLE, OR THAT THE HISTORICAL DATA WILL MEET ANY PARTICULAR CRITERIA OF PERFORMANCE OR QUALITY. SUBSCRIBER ASSUMES THE ENTIRE RISK OF SELECTION AND USE OF THE HISTORICAL DATA AND THE CONTENT AND INFORMATION CONTAINED THEREIN.

Section 14. Indemnity. Subscriber shall indemnify, defend and hold harmless ISM and any of its officers, directors, partners, managers, employees, agents and other advisors and representatives, and successors and assigns (each, an “Indemnified Party”) against any and all claims, actions, damages, obligations, losses, liabilities, costs and expenses (including reasonable attorneys’ fees, costs of collection, and other costs of defense) (collectively, “Damages”), resulting or arising from the Subscriber’s breach of its obligations under the Agreement.

Section 15. No Partnership. Nothing contained in the Agreement is intended or shall be construed to place the Parties in the relationship of partners, joint venturers or agents. Notwithstanding anything contained herein, neither Party nor any of its representatives, agents, employees or officers shall be considered or treated as agents or employees of the other Party for any purposes.

Section 16. Severability. In the event that any provision of the Agreement is determined to be invalid, unlawful, void or unenforceable to any extent, such provision or any portion thereof shall be interpreted to best reflect the Parties’ intent, and the remainder of the Agreement shall not be affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

Section 17. Force Majeure. Each Party agrees that the other Party shall not be liable for any delay in performance that results from acts of God, public enemy, or the United States or any state therein, or any foreign government, fire, flood strikes, civil disturbance, or any other action or omission beyond the other Party’s control.

Section 18. Entire Agreement. The Agreement, including all attachments hereto, constitutes the entire agreement between the Parties concerning the subject matter herein. The Agreement supersedes any previous written or oral agreements between the Parties. The Agreement may not be modified except by written document signed by authorized representatives of the Parties.

Section 19. Assignment. ISM may assign this Agreement, without the prior consent of Subscriber, to an affiliate or to any entity acquiring all or substantially all of the assets or a controlling interest in the voting power (or other means of control) of ISM or any affiliate of ISM upon written notice to Subscriber. Subscriber may not assign this Agreement without obtaining the written consent of ISM.

Section 20. Publicity. Upon the date 30 days after the Effective Date, unless or until Subscriber notifies ISM in writing not to do so, ISM may (a) include Subscriber’s name and logo in a list of subscribers of the Historical Data and (b) use Subscriber’s name in a press release issued by ISM regarding Subscriber’s use of the Historical Data. ISM may also from time to time send Subscriber additional information about products, services and ISM’s other offerings via U.S. mail, facsimile, email or other means.

Section 21. Applicable Law and Venue. This Agreement will be governed by the laws of the State of New York and the laws of United States applicable thereto. All disputes arising from or relating to this Agreement will be adjudicated in the United States District Court for the Southern District of New York, or in the event that such court does not have subject matter jurisdiction, in the state courts of New York located in New York County, New York. The parties hereby irrevocably consent to the jurisdiction of the foregoing courts and agree that mailing of process or papers in connection with such action or proceeding in the manner provided in Section 8 shall be valid and sufficient service thereof.

Section 22. No Waiver. No delay or failure of either Party in exercising any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other right. Failure by either Party to enforce any right under this Agreement will not be deemed a waiver of future enforcement of that or any other right.

Section 23. Headings. The headings and captions used in the Agreement are used for convenience only and are not to be considered in construing or interpreting the Agreement.

Section 24. Construction. Each Party has had the opportunity to consult with its counsel with respect to the Agreement. The Agreement will be interpreted fairly in accordance with its terms and without any strict construction in favor of or against any Party based on draftsmanship of the Agreement or otherwise.

Section 25. Acceptance of Agreement. By registering with ISM as a subscriber for the Historic Data, Subscriber acknowledges and agrees to the terms and conditions of this Agreement, as amended from time to time.

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