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?