Alliance Agreement Checklist
The following are some of the issues that should be addressed in drafting or reviewing a software alliance agreement:
- Is the scope of the alliance -- geographic, product and market appropriate?
- Are pricing and compensation terms clear-cut and balanced? What about related issues such as taxes, delivery schedule, payment terms and credit, returns, record-keeping and audits, price protection, bonuses and rebates?
- Is the discount program reasonably structured, with appropriate incentives for alliance partners to expand marketing efforts and increase sales?
- Is the alliance exclusive or non-exclusive?
- Is the license grant from software vendor to alliance partner narrowly tailored to the requirements of the relationship?
- Are the partner’s sublicense rights and limitations clear and explicit?
- Is the alliance partner required to meet specific quotas within a specified period of time?
- Does the alliance partner have obligations to conduct marketing and advertising on behalf of the software vendor?
- Are the parties required to jointly draft a business plan? What elements must the business plan contain, in terms of achieving strategic goals, meeting quarterly targets, preparing monthly reports, etc.?
- What training courses must the alliance partner complete, and for which employees?
- Which party is responsible for handling import and export license requirements?
- Is the alliance partner required to enforce the end user license?
- Is the alliance partner prohibited from making false representations regarding software performance?
- Is the alliance partner restricted from promising customers that the software vendor will provide any free or discounted services, training or products?
- Is the alliance partner required to provide feedback regarding customer complaints, requests for services and product modifications?
- Are software vendor obligations appropriately limited to licensing, discounts payment of referral fees, technical updates, and perhaps training?
- Do the “three horsemen” clauses of warranty, indemnity and limitation of liability do their job to protect the software vendor’s interests?
- How are maintenance and support obligations allocated? Can the software vendor step in and replace the alliance partner as the M&S provider?
- Does the confidentiality clause adequately do its job of protecting the software vendor’s “crown jewels”?
- Under what circumstances may the alliance be terminated, and what is the exit strategy?
- Have the often-overlooked “boilerplate provisions” regarding, for example, independence of parties, trademark usage, governing law, dispute resolution, and no assurances been adequately vetted?
- If the alliance crosses national boundaries, does the agreement address the special considerations that arise when going international?