BUSINESS TERMS SOFTWARE AG PARTNER. 1 Definitions EXHIBITS & FORMS SEPTEMBER 2017

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1 EXHIBITS & FORMS SEPTEMBER 2017 SOFTWARE AG PARTNER BUSINESS TERMS 1 Definitions 1.1 Definitions: Unless the context requires otherwise the following words and expressions shall bear the meanings set out below where used in these Business Terms: Authorised Opportunity Business Plan Cloud Services Cloud Services Committed Period Co-Selling Fees Contract Close Incentive Fee Customer License Agreement Opportunity Opportunity Registration & Sales Assist Qualifying Process Means an Opportunity agreed between the parties and identified in a duly completed and signed Opportunity Registration & Sales Assist Qualifying Process. Means a SELECT Program Business Plan to be agreed between the parties in the form attached as Form C. Means cloud-based services that Supplier offers to end users over the internet on a subscription basis and which will mainly consist of the Software hosted in a cloud environment. Means the period during which a Customer agrees to unconditionally and irrevocably take the Cloud Services as set out in the Customer License Agreement. Means the Referral Fee, Sales Assist Fee and/or the Contract Close Incentive Fee. Means an amount payable by Supplier to Partner based on a percentage of the Net Software License Revenue or the Net Cloud Services Revenue which has been generated by Supplier pursuant to a Customer License Agreement as set out in the Business Terms in recognition of Partner s efforts in the closing of a deal. This includes the following variants: (a) contract is closed between the Partner and Customer on partner paper; (b) invoicing is done by Partner through its book; (c) transaction is significantly done by Partner; and in the case of co-sell activities a Sales Assist Qualifying Form applies. Means any of Supplier s or Partner s standard forms of written contract setting out the terms and conditions under which the Customer may be granted a license to the Software or to use the Cloud Services and protecting Supplier s and its licensor s Intellectual Property Rights (as defined below) to the Software or the Cloud Services. In the event that a Customer License Agreement is signed between Partner and Customer, the respective Customer License Agreement shall contain terms and conditions at least as restrictive and protective of the Software as the minimum terms and conditions set forth in Exhibit C and the product specific license restrictions set forth in Exhibit B. Means a Lead (as defined in the Sales Partner Terms and Conditions) that has expressed an interest in Supplier s Software and that Partner has pre-qualified by: i) preparing a dedicated account plan for the Lead; and/or ii) arranging a prospective meeting between Lead and Supplier. The compulsory form or Process referred to in the Forms & Processes section below to be submitted by Partner via the Partner360 so as to enable Supplier to qualify (i) a particular Opportunity and to accept or reject it; and (ii) the sales effort conducted by Partner as a prerequisite for Partner to receive a Sales Assist Fee. 1

2 Net Cloud Services Revenue Net Software License Revenue Partner360 Process Referral Fee Reseller Discount Resell-With Sales Assist Fee SELECT Program Sell-Through Target Markets Means gross revenue received by Supplier during the Cloud Services Committed Period for the Cloud Services pursuant to a Customer License Agreement entered into during the term of this Agreement less applicable transaction fees, taxes, duties, collection fees, support and maintenance fees, service fees, third party royalty fees, commissions, any other ancillary charges and amounts paid or payable as refunds or credits. Means gross revenue received for the Software either i) by Supplier pursuant to a Customer License Agreement entered into during the term of this Agreement; or ii) in resell scenarios, by the Partner pursuant to a Customer License Agreement entered into during the term of this Agreement, less applicable transaction fees, taxes, duties, collection fees, support and maintenance fees, service fees, third party royalty fees, commissions, any other ancillary charges and amounts paid or payable as refunds or credits. means Supplier s web-based application available at that allows Partner to submit Processes and access information such as contractual information or documentation, Partner capabilities, Partner leveling, Opportunity registration and sales assist qualification. Means Supplier s specific processes which can be accessed via partner360 or the Partner Portal and that Partner is required to follow. Means an amount based on a percentage of the Net Software License Revenue or the Net Cloud Services Revenue which is payable by Supplier to Partner in recognition of Partner identifying an Opportunity as set out in the associated Opportunity Registration & Sales Assist Qualifying Process. Means an amount based on a percentage of the Net Software License Revenue as set out in the Business Terms in recognition of Partner s efforts in generating the Opportunities and subsequently driving the majority of the sales cycle towards closing the Opportunity. Means the Customer requests the Customer License Agreement direct with Supplier but payment will be made by the Partner on the Customer s behalf. Means an amount either payable by Supplier to Partner or a discount granted to Partner based on a percentage of the: Net Software License Revenue or Net Cloud Services Revenue which has been generated by Supplier pursuant to a Customer License Agreement; or b) the net prepaid first year s Software Maintenance and Support Revenue which has been generated by Supplier pursuant to a Software Maintenance and Support Agreement as set out in the Business Terms in recognition of Partner s efforts in the sales cycle. Means a specific program with additional incentives offered by Supplier to its Partners for reselling into defined Target Markets, which will be agreed between the regionally responsible entity of Supplier and the local Partner. Partner is eligible by written approval from Supplier regional COO s to sell into non named accounts, that are defined as a SELECT Target Markets between Supplier and Partner. Partner closes the transaction on Partner s paper. Can be defined as countries, market segments, industry verticals, solution areas or a mixture out of these, pre-agreed with Supplier classified for a limited term. 2 General partner program information 2.1 Document Purpose: These Business Terms are incorporated in and form part of the Agreement and describe in more detail the basis on which Partner is authorized to resell and/or assist Supplier in connection with the promotion, marketing and reselling of Software and/or Maintenance and Support Services. 2.2 Variation: The Partner understands and agrees that Supplier, at its sole discretion, may change, add or remove portions of these Business Terms at any time in accordance with the terms of the Agreement. 2

3 3 Sales engagement model 3.1 Sales Engagement Models: The following table provides an overview of the Sales Engagement Models available, as further described in the clauses below. Benefits Form A: Opportunity Registration Form & Sales Assist Qualifying Form Form B: Partner Training T&Cs Form C: SELECT Program Business Plan Form D: SELECT Account Registration Form E: Product Support and Maintenance Service Terms Form F: Minimum Pass Through Terms Form G: Partner Order Form and Partner Software Attachment Joint Selling Co-Selling Refers an Referral Fee (or Sell With) Opportunity Assists a Sales Assist Deal Fee Transacts a Close Deal Incentive Fee Re-Sell With Reselling Sell Through Reseller Discount and SELECT Reseller Program Sales Assist Fee Reseller Discount 3.2 Co-Selling (or sell with): This model is available for both Software and Cloud Services opportunities. In this model Partner works closely with Supplier during the sales cycle and may help to find the opportunity ( Refers an Opportunity ) and/or assist Supplier in closing the deal ( Assists a Deal ) and/or transact the deal ( Transacts a Deal ). These three levels of engagement (stand-alone or combined) are further defined below: (a) Refers an Opportunity: Partner provides an Opportunity to Supplier by the submission to Supplier of a completed Opportunity Registration & Sales Assist Qualifying Form. Supplier will make all reasonable efforts to notify Partner whether the Opportunity is accepted or rejected within ten (10) days of receipt of a duly completed Opportunity Registration & Sales Assist Qualifying Form. Supplier may, in its sole discretion, either accept or decline any Opportunity provided that Supplier will not accept Opportunity which have already been accepted from another partner or identified by Supplier itself. Opportunities which are accepted shall become Authorized Opportunities for the purposes of the Agreement. (b) Assists a Deal: Partner assists Supplier during the sales cycle. The level of assistance required from Partner will be agreed by the parties in a relevant Opportunity Registration & Sales Assist Qualifying Form. (c) Transacts a Deal: Under this engagement model, Partner supports the contract negotiations and collects the signed license agreement. The level of assistance required from Partner will be agreed by the parties in a relevant Opportunity Registration & Sales Assist Qualifying Form. 3

4 3.3 Reselling: This model is only available for Software opportunities. In this model, Partner is responsible for invoicing the Customer. This can happen in one of two ways: a) Sell-Through: Partner orders the software and/or maintenance and support services from Supplier and enters into a Customer License Agreement with the Customer with minimal support from Supplier. Partner may also be eligible to receive a Sales Assist Fee of up to 10% on the first year s maintenance and support fee paid by Customer to Supplier if agreed in an Opportunity Registration & Sales Qualifying Form. (b) Resell-With: Partner requests Supplier to enter into a Customer License Agreement with the Customer but Partner is responsible for collecting payment from the Customer. 3.4 SELECT Reseller Program: The SELECT program is an offering for partners closely to cooperate in markets where Supplier does not sell and implement directly (Software AG white spaces). Upon invitation, partners can participate in this program which offers additional discounts, joint marketing and Opportunity generating campaigns. The SELECT program will be agreed between the parties on the basis of the Business Plan. 4 Commercial partner benefits 4.1 Fees and Discounts: (a) Referral Fee: In accordance with the clause Sales Engagement Model Co-Selling (or sell with) Refers an Opportunity above Partner may be eligible to receive Referral Fee from Supplier. The Referral Fee is based on a percentage of the Net Software License Revenue and/or the Net Cloud Services Revenue as agreed in the Opportunity Registration & Sales Assist Qualifying Form, up to 5%, not to exceed Fifty Thousand Euro (50,000 EUR); (b) Sales Assist Fee: In accordance with the clause Sales Engagement Model Co-Selling (or sell with) Assists an Opportunity above the Partner may be eligible to receive a Sales Assist Fee from Supplier. The Sales Assist Fee is based on a percentage of the Net Software License Revenue and/or the Net Cloud Services Revenue as agreed in the Sales Assist Qualifying Form, up to 5%, not to exceed a total of Fifty Thousand Euro (50,000 EUR). (c) Contract Close Incentive Fee: In accordance with the clause Sales Engagement Model Co-Selling (or sell with) Transacts a Deal above the Partner may be eligible to receive Contract Close Incentive Fee from Supplier. The Contract Close Incentive Fee is based on a percentage of the Net Software License Revenue and/or the Net Cloud Services Revenue as agreed in the Sales Assist Qualifying Form, up to 5%, not to exceed a total of Fifty Thousand Euro (50,000) EUR). (d) Sell Through: For Sell Through opportunities only, a Sales Assist Fee for Maintenance & Support Services resell is available if the Partner facilitates a Software Maintenance & Support Agreement between Supplier and Customer. Partner is eligible to receive a Sales Assist of up to 10% on the first year s maintenance and support fee paid by Customer to Supplier. (e) Reseller Discount and SELECT Reseller Discount: In a resell scenario, where Partner wishes to enter into a Customer Software License Agreement directly with the Customer, Partner will request a quotation from Supplier. Quotations will be based on Supplier s current list price. Any special pricing or Reseller Discount will be agreed once Partner has completed the Opportunity Registration & Sales Assist Qualifying Form and it has been mutually agreed upon by the parties. The agreed price will then be reflected in the Partner Order Form at the point of ordering. Nothing in this Agreement will be construed in any sense to limit Partner s ability freely to determine the Net Software License Revenue which the Partner is free to determine at its discretion. Reselling Maintenance and Support Services is not subject to any payment of commission Fees or Discounts to Partner. 4.2 Additional Requirements for Sell Through and Resell With: (a) Sell Through: Sell Through has the following additional requirements: Prior to entering into a Customer License Agreement with a Customer, Partner shall reflect Supplier s Minimum Pass- Through Terms in a Customer License Agreement between Partner and Customer; and Partner shall place orders for Production use licenses of Supplier Software and the first year of Support Services using the Partner Order Form (see Forms) with every such order. All Partner Order Forms have to be sent to the contact as defined under the Agreement and are subject to Supplier s approval; and Partner must provide evidence of the minimum pass through requirements (see Forms) and Supplier s Product Support and Maintenance Service Terms and Conditions (see Forms) are incorporated into the Customer License Agreement; and 4

5 Supplier shall deliver the ordered Supplier Software to Partner promptly after receiving evidence of the transaction. If the transaction is on Partner s paper, Partner must provide evidence that the minimum pass through requirements (see Forms) and Supplier s Product Support and Maintenance Service Terms and Conditions (see Forms) are incorporated into the Customer License Agreement; (b) Resell With: Resell With has the following additional requirements: Partner must have contributed significantly to the sale (for example identified the opportunity or driven the sales cycle with minimal assistance from Supplier); and Partner must have an overall project responsibility vis-à-vis the end-customer or is the preferred software purchasing channel to the end customer; and Customer has designated Partner to pay Supplier the License - and Software Support Fee in the Customer License Agreement; and Supplier shall deliver the ordered Supplier Software to Customer promptly after execution of the Customer License Agreement. 5 Support & maintenance fees 5.1 Support and Maintenance Fees: In a resell scenario, where Partner wishes to enter into a Support and Maintenance Agreement directly with the Customer, Partner will request a quotation from Supplier. Quotations will be based on Supplier s current list price. Any special pricing or Reseller Discount will be agreed once Partner has completed the Opportunity Registration & Sales Assist Qualifying Form and it has been mutually agreed upon by the parties. The agreed price will then be reflected in the Partner Order Form at the point of ordering. Nothing in this Agreement will be construed in any sense to limit Partner s ability freely to determine the Support & Maintenance Fees payable by the Customer which the Partner is free to determine at its discretion. Supplier reserves the right to increase the standard percentage rate for Supplier Support Services charged to Partner on an annual basis after the initial term of the maintenance period. The annual increase rate shall be calculated based on the maintenance increase stated in the Customer License Agreement. 5

6 6 Digital market place access 6.1 Digital Market Place Access: In the event that Partner would like to become a Solution build partner, then Partner should contact their Supplier Partner Manager. Supplier provides all Solution build Partners access to Supplier s digital market place at no additional cost in order to promote the Partner s products to the Supplier customer community. 7 Partner business portal access 7.1 Partner Business Portal Access: Supplier will grant Partner access to the Partner Portal which can be found at: empower.softwareag.com/partnerlogin/login.html. Partner may use this portal as a point of reference for purposes of accessing product information, marketing material, forms, updates to Exhibits, and other benefits that may be available to Partner. 8 Partner enablement 8.1 Learning Management System: Learning Management System: In order to participate in the Supplier enablement program, Partner must register a certain number of resources in the Supplier learning management system dependent on the partner s engagement model and medallion level. 8.2 Certification of Consultants: Partners who want to deliver services within implementation projects shall ensure a minimum number of Partner s consultants remain current at all times with Supplier certification as provided by Supplier Global Education services. 8.3 Qualification of Sales & Pre-Sales Staff: Partner shall ensure a minimum number of Partner s employees in the Territory are sufficiently trained and skilled to sell Supplier Software to Customers. 8.4 PRIME for Partners: Prime (Platform rapid implementation methodology) is Supplier s solution deployment methodology to deliver better time-to-value for the Digital Enterprise. (a) Access Conditions: Any partner of Supplier is entitled to access Prime and use Prime in their customer projects for the project duration using valid customer Supplier software licenses or partner project licenses. (b) Extended Prime: Partners who want to get access to further Prime tools (such as SOW generator), want to incorporate Prime into their own delivery methodology or want to modify Prime for specific customer engagements can receive an offline Prime database if they have valid Supplier software licenses and after they have run through Supplier s Prime enablement workshop and certification. 9 Medallion levels 9.1 Introduction: Supplier may apply a tiered structure for benefits granted to partners in line with partners contribution and fulfilment of obligations. For Sales under the Supplier PowerUp Sales Partner Program, Supplier differentiates three (3) tiers of partner levels ( Medallion Levels ): Associate, Preferred, and Premier. The particular program is at the discretion of the respective Supplier region. 9.2 Medallion Level Evaluation: Supplier will evaluate the Medallion Level on an annual basis in Q1 of any year within the term of the Agreement. Supplier will communicate the result of the evaluation to the Partner together with the data set applied for the evaluation. The effective date of the new Medallion level ( Medallion Level Effective Day ) shall be the first day of the next month following the Medallion Level evaluation. 9.3 Verification: After notification of the evaluation result Partner will have a period of fifteen (15) days to verify Supplier s assessment. Should Partner have clear factual evidence that the evaluation did not consider all relevant data, Partner shall inform Supplier by written notice. For the avoidance of doubt, as long as a potential dispute between Partner and Supplier on the correctness of a certain Medallion Level evaluation is ongoing, terms & conditions as per Supplier s evaluation result shall apply. Should Supplier find that Partner s objections are valid, Supplier will correct Medallion Level effective retrospectively and adjust potential differentials in partner compensation or costs within thirty (30) days. 9.4 Public Representation: Partner is entitled to promote the nature of proficiency of his business with Supplier Software as well business relationship with Supplier as official Partner of Supplier to Customers within the Territory. When doing so, Partner shall use the designated descriptors, logos and other qualifiers for Partners under the Supplier PowerUp Sales Partner Program which reflects the then current Medallion Level. Should a Medallion Level change as a result of the regular Medallion Level evaluation process as laid out in the Section Medallion Level Evaluation above Partner must make a reasonable effort to adjust the representation of the appropriate medallion level within one month after Supplier s communication of the Medallion level evaluation. 6

7 9.5 Medallion Level Minimum Requirements: (a) Minimum Sales Partner Requirements: To qualify for a Medallion Level, a Partner must commit to a specific amount of minimum partner revenue (resell) per year as set forth below. The levelling will be evaluated per country where the Partner is active. A joint assessment for more than one country is not possible. Only for marketing reasons the Partner is allowed to use the highest level achieved in one of his activity regions (e.g. presentation on Partner or Supplier website). Medallion Level Associate Minimum partner revenue commitment per year in Euro or No. of transactions 50,000 or 4 transactions Preferred 250,000 Premium 500,000 (b) Minimum Partner Requirements: Partner shall ensure a minimum number of Partner s consultants depending on the Medallion Level as set forth in the following table remain current at all times with Supplier certification as provided by Supplier Global Education services per product and Territory, where the Partner is active: Medallion Level Number of technical specialists per site Number of pre sales specialists per site Associate 1 1 Preferred 3 1 Premium 5 2 (c) Achievement within Territory: All Partner achievements and fulfilment of obligations to be recognized for the Medallion Level levelling must be booked under the regional entity of the Partner who has closed this agreement with Supplier as set forth under Section 1 of the Agreement. Aggregation from multiple territories is not possible. 9.6 Medallion Level Incentives: (a) Additional Incentive Levels: In addition to the above, the Partner can get an additional incentive dependent on the Medallion Level as set forth in the following table: Medallion Level Additional incentive per Medallion Level Preferred +3% Premium +5% (b) Fee/Discount Calculation: This additional fee is based on the Net Software License Revenue contribution of the Partner for the full last fiscal year for the Territory. (c) Information Term: Supplier shall inform Partner promptly and in no event later than 3 month after the closing of the fiscal year of any Customer License Agreement that Supplier has concluded with an Authorized Opportunity following a reselling by Partner. Partner must issue an invoice for the additional incentive Fee due promptly and in no event later than thirty (30) days after having been informed by Supplier. The Fee shall be due for payment thirty (30) days after the invoice date. 7

8 10 Annual PowerUp partner program membership fee 10.1 Annual PowerUp Sales Partner Program Membership Fee: Partner s participation in Supplier s PowerUp Sales Partner Program is subject to the payment of a non-refundable annual membership fee (the Annual Membership Fee ) in respect of each Program Year Current Annual Membership Fee: The current Annual Membership Fee for up to three (3) Territories is two thousand five hundred Euros ( 2.500,-). Additional Territories may be subject to the payment of an additional fee 10.3 Program Year: Notwithstanding the Term of the Agreement, each Program Year starts on 1 January and end on 31 December of the calendar year. The Annual Membership Fee shall be due and payable by Partner: (a) for the first Program Year, upon signature of the Agreement; and (b) for the second and subsequent Program Years, if the Agreement is active and in force on the first day of the Program Year. 11 Fee for software licenses and digital marketplace access 11.1 Licenses of Software: Licenses of Software are charged as follows: (a) License for Test & Demo, Evaluation and non commercial Development purposes: Free of charge; and (b) License for Distribution to Customers/End Users: Pricing to be requested from assigned Supplier partner manager Digital Marketplace Access: Digital Marketplace access is charged as follows: (a) Free of Charge. 12 Partner reporting 12.1 Partner Reporting: Partners whether Co- or Resellers-are expected to establish an ongoing communication with their Supplier Partner Managers. As such, Partners will have the following reporting requirements: (a) The Partner will work with his responsible Supplier Partner Manager or Sales Executive to agree on the joint Go-to- Market strategy and the contribution from the Partner. This Go-to-Market plan shall be agreed in writing in a mutually agreed document. (b) Partner shall submit to the designated Supplier Partner Manager on a regular basis a detailed forecast (including backlog) for prospective customers to be targeted within the following six (6) month period. The forecast shall include anticipated orders of Supplier Software to be generated as set forth in the Agreement. 8

9 13 Payment terms 13.1 Payment Terms: (a) For Co-sell deals and Support- & Maintenance Sale deals. Supplier shall inform Partner promptly of any Customer License Agreement that Supplier has concluded with an Authorized Opportunity ( Relevant Contract ). Partner must issue an invoice for the Co-Selling Fees due promptly and in no event later than thirty (30) days after having been informed by Supplier. Unless otherwise agreed, invoicing of Co-Selling Fees for Customer License Agreement for Cloud Services will mirror the payment profile agreed in the Customer License Agreement and will only be payable in respect of those invoices which have been paid in full by the relevant Customer. Supplier shall be under no obligation to pay Partner any Co-Selling Fee: a) where Partner has not been an effective cause of Customer entering into the Customer License Agreement with Supplier; b) in respect of any subsequent fees received by Supplier from Customer under the Customer License Agreement whether by way of additional license, renewals of Maintenance and Support Services or otherwise. c) in respect of any Customer License Agreement signed after the termination of this Agreement, however caused. (b) For Sell-Through resell deals and SELECT Program. Invoices will be issued by Supplier upon signature of the Partner Order Form. (c) For Resell-With deals. Provided Customer has designated Partner to pay Supplier the License and Software Support Fee for the Software set forth in the Agreement and/or a respective Partner Order Form in such Resell-With scenario, Partner shall pay Supplier in accordance with the applicable terms and conditions of the Customer License Agreement. Partner and Supplier shall document the Customer order by executing a Partner Order Form. Supplier will issue an invoice to Partner for the License and Support fee due. (d) For Annual Membership Fees. Invoices will be issued by Supplier in advance each Program Year and are due and payable upon receipt of the invoice. Specific invoice dates vary by region but invoices are normally raised between 1 January and 31 March of the relevant Program Year. 14 Forms & processes 14.1 Forms: The most recent versions of the Forms referred to in this Agreement are attached to this Agreement but these Forms are subject to amendment from time to time by Supplier. The most recently amended versions can be accessed at: softwareag.com/other-resources/exhibits/. In the event of any conflict or discrepancy between the online version and either the versions of the Forms attached to this Agreement or any printed version of the Forms made available to or downloaded by Partner, the online version shall be considered authoritative and take precedence Processes: Processes can be accessed by Partner via Partner360 system Applicable Forms and Processes (a) Form A: Opportunity Registration & Sales Qualifying Process. This form is available as a Process via Partner360 at (b) Form B: Supplier Partner Training Terms and Conditions. (c) Form C: SELECT Program Business Plan. (d) Form D: SELECT Account Registration (New SELECT Target Markets). (e) Form E: Supplier Product Support and Maintenance Service Terms. (f) Form F: Minimum Pass Through Terms for Sell Through Reselling. (g) Form G: Partner Order Form and Partner Order Form Software Attachment. ABOUT SOFTWARE AG Software AG offers the world s first Digital Business Platform. Recognized as a leader by the industry s top analyst firms, Software AG helps you combine existing systems on premises and in the cloud into a single platform to optimize your business and delight your customers. With Software AG, you can rapidly build and deploy digital business applications to exploit real-time market opportunities. Get maximum value from big data, make better decisions with streaming analytics, achieve more with the Internet of Things, and respond faster to shifting regulations and threats with intelligent governance, risk and compliance. The world s top brands trust Software AG to help them rapidly innovate, differentiate and win in the digital world. Learn more at Software AG. All rights reserved. Software AG and all Software AG products are either trademarks or registered trademarks of Software AG. Other product and company names mentioned herein may be the trademarks of their respective owners. SAG_Partner_Business_Terms_Sep17 9