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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) DECEMBER 12, 1997
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ARBOR SOFTWARE CORPORATION
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(EXACT NAME OF REGISTRATION AS SPECIFIED IN CHARTER)
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<CAPTION>
<S> <C> <C>
DELAWARE 000-26934 77-0277772
(STATE OR OTHER JURISDICTION OF (COMMISSION (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION FILE NUMBER)
</TABLE>
1344 CROSSMAN AVENUE, SUNNYVALE, CALIFORNIA 94089
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (408) 744-9500
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Total pages: 27
Exhibit Index on Page 4
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ITEM 5. OTHER EVENTS.
On December 12, 1997, Arbor Software Corporation, a Delaware
corporation (the "Company"), and Comshare, Incorporated, a Michigan corporation
("Comshare"), entered into the Second Amendment to License Agreement between the
Company and Comshare (the "Second Amendment") which amended the License
Agreement dated as of December 23, 1993 between the Company and Comshare, as
amended by the First Amendment to License Agreement effective March 1, 1994,
between the Company and Comshare (collectively, the "License Agreement"). The
License Agreement was previously filed with the Securities and Exchange
Commission on September 19, 1995 as Exhibit 10.7 to the Company's Registration
Statement on Form S-1 (File No. 33-97098). The Second Amendment was executed in
connection with the settlement by the Company and Comshare of all claims and
counterclaims relating to the License Agreement and asserted by each of the
parties in Arbor Software Corporation v. Comshare, Incorporated, Civil Action
No. C-96-20812 RMW (PVT) (U.S.D.C. Northern District of California).
The preceding description of the Second Amendment is qualified in its
entirety by reference to the copy of the Second Amendment included as Exhibit
10.8 of this Current Report on Form 8-K and which is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(c) EXHIBITS.
Exhibit No. Description
10.8* Second Amendment to License Agreement dated December
12, 1997, between the Company and Comshare.
99.1 Press Release dated December 15, 1997.
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* Confidential treatment has been requested for certain portions of this
exhibit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Arbor Software Corporation
(Registrant)
Date: December 24, 1997 By: /s/Stephen V. Imbler
-----------------------------------------
Stephen V. Imbler
Senior Vice President and Chief Financial
Officer (Duly Authorized Officer and
Principal Financial Officer)
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ARBOR SOFTWARE CORPORATION
EXHIBIT INDEX
<TABLE>
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SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE NUMBER
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10.8* Second Amendment to License Agreement dated December 12, 1997, between the 5
Company and Comshare.
99.1 Press Release dated December 15, 1997. 26
</TABLE>
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* Confidential treatment has been requested as to certain portions of this
exhibit.
4
<PAGE> 1
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
EXHIBIT 10.8
SECOND AMENDMENT TO LICENSE AGREEMENT
THIS SECOND AMENDMENT TO LICENSE AGREEMENT (this "Second Amendment") is made and
entered into as of the _____ day of December, 1997 by and between (i) ARBOR
SOFTWARE CORPORATION, a Delaware corporation ("Arbor"), and (ii) COMSHARE,
INCORPORATED, a Michigan corporation ("Comshare") (individually, a "Party", and
collectively, the "Parties"), with reference to the following:
RECITALS
A. Arbor and Comshare entered into that certain License Agreement dated as of
December 23, 1993.
B. Arbor and Comshare entered into the First Amendment to License Agreement
effective March 1, 1994 (the "First Amendment"). The License Agreement, as
modified by the First Amendment, is referred to collectively as the "License
Agreement".
C. Arbor and Comshare have been engaged in litigation regarding the License
Agreement and related issues pending in the United States District Court for the
Northern District of California, Civil Action No. C-96-20812 RMW (the
"Litigation").
D. Arbor and Comshare are entering into the Settlement Agreement dated
concurrently herewith, pursuant to which the Parties agree to fully settle and
resolve the Litigation and all claims and controversies existing between them.
As a condition to the Settlement Agreement, the Parties agree to modify and
amend the License Agreement, in accordance with Section 16(i) of the License
Agreement, as set forth in this Second Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein and in
the Settlement Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree to amend the License Agreement as follows:
1. Rules of Construction. Unless otherwise defined herein, capitalized
words and phrases used in this Second Amendment shall have the meanings set
forth in the License Agreement. To the extent the meaning of any term as used
herein is inconsistent with the meaning of such term in the License Agreement,
the meaning set forth in this Second Amendment shall prevail.
1
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
2. Definitions. In addition to the other capitalized terms defined
elsewhere in this Second Amendment, the following terms shall have the meanings
set forth below:
(a) "Software" means: (i) all Core Software (as hereinafter
defined), and all technical and user documentation and training materials
(courseware) related thereto; (ii) the Arbor software product known as the
"Essbase Web Gateway"; (iii) all software utilities and subroutines incidental
to the operation of such software, such as operating system dynamic link
libraries (".dll's"), database connectivity drivers, and end-user installation
tools, that Arbor licenses from third parties and embeds at the source or object
code level in such computer software; and (iv) all Related Works (as hereinafter
defined) provided by Arbor pursuant to Section 4 (Related Works) below.
"Software" excludes: (1) any Related Works not provided to Comshare under
Section 4 below; and (2) any software that is not expressly included in this
definition.
(b) "Related Works" means: (i) all ports of the Software to
various hardware and software operating systems platforms other than Windows NT,
Windows 95, OS/2, HP-UX, Sun Solaris, DEC Alpha, Macintosh, and AIX operating
system platforms and their successors; (ii) any software interface developed on
any operating system or hardware platform for the purpose of permitting the
Essbase Data Analysis Server to work with a third-party database product, such
as the IBM relational storage interface; (iii) any software on any operating
system or hardware platform that results from the combination or integration of
the Essbase Data Analysis Server with a third party database product including
without limitation IBM's DB2 relational database product, whether the software
products are sold independently on a stand-alone basis or as a combined or
integrated product; and (iv) any translations of the Software into local
languages.
(c) "Limited Use" means the category of Software sublicenses
described in Section I(A) of Exhibit D attached to this Second Amendment.
(d) "Application Specific Use" means the category of Software
sublicenses described in Section I(B) of Exhibit D attached to this Second
Amendment.
(e) "Full Use" means the category of Software sublicenses
described in Section I(C) of Exhibit D attached to this Second Amendment.
3. License Grant. The first full paragraph of Section 1 of the License
Agreement (titled "License Grant") is hereby deleted in its entirety and
replaced with the following language:
"Subject to the restrictions contained herein, Arbor grants to
Comshare and its subsidiaries the non-exclusive, worldwide right and
license to use, reproduce, adapt, distribute and sublicense to
Comshare Distributors and customers the Software (as defined in the
Second Amendment to the License Agreement). Any and all rights not
expressly granted to Comshare hereunder are reserved by Arbor."
4. Related Works. Arbor will provide to Comshare all Related Works
owned and developed by Arbor. If a Related Work is developed by a third party
and Arbor retains for itself or obtains from the third party, as the case may
be, the right to distribute the Related Work to Arbor's customers and
distributors, Arbor will use reasonable commercial efforts to obtain or retain
the right to provide the Related Work to Comshare for distribution by Comshare
under this
2
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
License Agreement. In such event, Arbor agrees that it will not withhold or
encourage any third party to withhold from Arbor the right to relicense the
Related Work to Comshare; provided, however, that Arbor does not guarantee that
it will be able to retain or obtain such right for Comshare. Notwithstanding the
foregoing and by way of limitation, the Parties agree that the rights granted by
Arbor to Comshare hereunder shall in no event be greater than the rights granted
to or retained by Arbor with respect to the Related Works. In addition, and
notwithstanding anything to the contrary herein, (i) with respect to any Related
Work owned by a third party, Arbor makes no different representations or
warranties to Comshare than those provided by the third party to Arbor and (ii)
with respect to any Related Work owned or developed by a third party, Arbor
undertakes no obligation of support or maintenance greater than that provided by
Arbor to any of its other distributors. In the event that Arbor does retain or
obtain rights for Comshare with respect to any Related Work of a third party,
Comshare shall pay Arbor an additional royalty as described in Section I(E) of
Exhibit D to the License Agreement.
5. Core Software. Subject to Sections 11(b) (Indemnification) and 16(d)
(Force Majeure) of the License Agreement and Section 7 (Discontinuance of
Support) of this Second Amendment, Arbor agrees to ensure Comshare's right
during the Term of the License Agreement to distribute and sublicense for use by
third parties, under the terms of the License Agreement, (i) all versions of the
Essbase Data Analysis Server (including the partitioning option), Essbase
Spreadsheet Add-In, Essbase Application Manager, Essbase Spreadsheet Toolkit,
Essbase Currency Conversion Module, SQL Drill Thru, SQL Interface, Essbase
Objects, and Essbase Application Programming Interface ("API"), including all
successors to such products, and (ii) any and all computer software in object
code form related to multi-dimensional modeling software that Arbor owns,
develops, or acquires ownership of during the Term of the License Agreement and
that functions by making calls to the source code of the Essbase Data Analysis
Server (or its successors) using calls not available to Comshare through a
commercially-available Arbor application program interface, in each of cases (i)
and (ii) designed to run on the Windows NT, Windows 95, OS/2, HP-UX, Sun
Solaris, DEC Alpha, Macintosh, and AIX operating system platforms, including all
successors to such platforms, but excluding all Related Works (the "Core
Software"). Any sale or license by Arbor of the Core Software (or any portion of
the Core Software) during the Term of the License Agreement shall be subject to
this obligation.
6. Essbase Translations. In the event that there is more than one (1)
version of the Software available in a single language in a particular
territory, Arbor may select a single translation to be distributed by the
Parties and shall notify Comshare in writing which translation shall be
distributed. Provided that Arbor has obtained for Comshare the right to
distribute the selected translation to its Comshare Distributors and customers
under the License Agreement, each Party shall, and shall use reasonable
commercial efforts to cause its respective distributors to, cease distributing
all other translated or localized versions of the Software for such language
within sixty (60) days of the date of Arbor's delivery of the selected
translated version. In particular, Arbor shall provide to Comshare the Japanese
translation of the Software designated as "Essbase Version 4.1.3J" as soon as
Arbor makes such release generally available to its distributors.
7. Discontinuance of Support. Neither Arbor nor any third party shall
be required to continue to develop new releases of the Software, including any
Core Software, on operating system platforms that Arbor, in its sole judgment,
finds commercially undesirable. In connection with any decision by Arbor to
discontinue development of new releases on any operating system platform, Arbor
may also discontinue providing bug fixes, workarounds, or "how-to" support for
existing versions of the Software on any discontinued operating system
platforms; provided that Arbor shall give Comshare twelve (12) months' notice
prior to implementation of the decision to discontinue support (i.e., bug fixes,
workarounds, and "how-to" support). Arbor will provide
3
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
Comshare with maintenance and support on discontinued platforms to the same
extent that Arbor provides maintenance and support to its own end users. Solely
in the circumstances contemplated by this Section 7, if Arbor permits its
distributors or end users to exchange Software running on a discontinued
operating system platform free or at a reduced charge for Software that runs on
a supported platform, Comshare may offer Comshare customers similar rights of
exchange and pay Arbor a correspondingly reduced or eliminated royalty. The
discontinuance of development, maintenance or support under this Section shall
in no way trigger a Release Condition under the Escrow Agreement described in
Section 9 of the License Agreement or give Comshare any other rights to the
source code of the Software.
8. Arbor Attribution.
(a) Applicable to All Software. The words "any Software
sublicensed as described in Section I.A of Exhibit D", appearing in Section
1(e)(ii) of the License Agreement are hereby deleted from that Section and
replaced with the words "all Software". The words "(if applicable)" are inserted
between the words "application" and "and" in Section 1(e)(ii) of the License
Agreement.
(b) Patent Marking. The following language is added as new Section
1(e)(iii) of the License Agreement:
"With respect to all sublicenses of the Software, Comshare shall also
ensure that Arbor's patent number (U.S. Patent No. 5,359,724), and
other patent numbers as Arbor may designate, are marked on the
documentation, packaging, and physical media of Comshare's
application."
9. Essbase Training Materials. During the Term of the License
Agreement, Comshare may copy and redistribute Software training materials
(courseware) directly or through Comshare Distributors to Comshare customers for
training purposes in connection with the Software, at no charge, provided that
Comshare ensures that all Arbor copyright attribution and notices on such
materials are preserved.
10. Pricing and Royalties. Exhibit D attached to the License Agreement
is hereby deleted in its entirety and replaced by a new Exhibit D, attached to
this Second Amendment. All references to Exhibit D in the License Agreement
shall be deemed to refer to Exhibit D attached hereto.
11. Audit. The second and third sentences of Section 5(b) of the
License Agreement are hereby deleted in their entirety. Mutual audit rights of
the Parties are set forth in Section V of Exhibit D attached hereto.
12. Minimum Fees. Sections 5(c) and 5(d) of the License Agreement are
hereby deleted in their entirety from the License Agreement. Exhibit E attached
to the License Agreement (titled "Examples of Minimum Payment Calculations") is
hereby deleted in its entirety.
13. Exclusivity Minimum. Section 5(e) of the License Agreement is
hereby deleted in its entirety from the License Agreement. Exhibit F attached to
the License Agreement (titled "Exclusivity Companies") is hereby deleted in its
entirety.
14. Arbor Limitation. Sections 6(a) and 6(b) of the License Agreement
are hereby deleted in their entirety from the License Agreement.
4
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
15. Comshare Distributors. The Parties acknowledge that Comshare has
added to and amended the List by replacing Schedule 6(c) (titled "Comshare
Distributors") attached to the License Agreement with "Schedule 6(c) Amendment"
attached hereto. Section 6(c) of the License Agreement is hereby deleted in its
entirety and replaced with the following language:
"During the Term of the License Agreement, neither Arbor, nor Arbor's
parent, nor any of Arbor's direct or indirect subsidiaries, may
directly market the Software through an entity (i) that is then a
Comshare Distributor or (ii) that was formerly a Comshare Distributor
and that was solicited by Arbor to terminate its distribution
arrangement with Comshare. In the event that during the Term of the
License Agreement, Arbor markets the Software through an entity that
was, but is no longer, a Comshare Distributor, Arbor shall pay to
Comshare ************ of all software license and maintenance fee
royalties paid by such former Comshare Distributor to Arbor with
respect to Software sublicenses sold by the distributor during the one
(1) year period following the date on which such distributor ceased to
be a Comshare Distributor. This obligation shall not survive with
respect to any royalties paid to Arbor for periods after the earlier of
(1) the expiration of the Term of the License Agreement or (2) the
effective date of termination of the License Agreement, if terminated
by Arbor for reason of Comshare's breach pursuant to Section 8(a) of
the License Agreement. Solely for purposes of this Section 6(c),
Comshare has provided a list of Comshare Distributors for each
geographic territory as of the date hereof (the "List"), attached
hereto as Schedule 6(c) Amendment, and may add to the List, subject to
all of the following conditions:
(i) Comshare may not add names to the List for the
territory of the United States.
(ii) For territories outside of the United States,
Comshare may add a name to the List only if Comshare
has a distribution arrangement with that entity
pursuant to a written contract and that entity has
the right to grant Application Specific Use and Full
Use sublicenses of the Software.
(iii) Notwithstanding the above subsection, Arbor may
distribute its software through an entity that is
added to the List without payment to Comshare if
Arbor has established a distribution arrangement with
that Comshare Distributor for that territory pursuant
to a written contract prior to the date on which
Arbor receives written notice that the entity was
added to the List."
16. Right of Offer. Section 7 of the License Agreement is hereby
deleted in its entirety from the License Agreement. Schedule 7(b) attached to
the License Agreement (titled "Comshare Competitors") is hereby deleted in its
entirety.
17. Termination.
(a) By Comshare. Section 8(b) of the License Agreement is hereby
deleted in its entirety.
(b) Early Termination. Section 8(c) of the License Agreement is
hereby deleted in its entirety.
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
(c) Effect of Termination. Section 8(d) of the License Agreement
is hereby deleted in its entirety and replaced with the following language:
"All sublicenses to the Software granted by Comshare and Comshare
Distributors to customers under this License Agreement shall continue
in effect, in accordance with their terms, after termination of this
License Agreement. Regardless of the reason for such termination,
consistent with and under the terms of Section 3(c) of the License
Agreement, Comshare may request of Arbor and Arbor shall, subject to
Section 7 (Discontinuance of Support) of the Second Amendment, provide
technical support and maintenance services to Comshare related to the
Software, for Comshare's and Comshare Distributors' existing customer
sublicensees of the Software as of the date of termination of the
License Agreement in accordance with the terms of the Second Amendment.
Comshare may continue to use the Software for its internal business
purposes and may also possess a reasonable number of copies of the
Software necessary for the sole purpose of customer support. Arbor has
prepared a letter to be provided to Comshare customers upon execution
of this Second Amendment, and which is attached hereto as Exhibit G,
which confirms Comshare's right to receive maintenance of the Software
for such customers after termination of the License Agreement. In
addition, following termination of the License Agreement, Arbor shall
have no obligation under Section 2 of Exhibit C to create any
enhancements to the Software, provided that if Arbor does make any
enhancements generally available for its maintenance customers,
Comshare will be entitled to receive such enhancements in accordance
with the terms of this Section 8(d)."
18. Arbitration and Escalation of Disputes. Section 15 of the License
Agreement is hereby deleted in its entirety and replaced with the following
language:
"(a) In the event that a dispute arises between the Parties
regarding any provision of this License Agreement, the Parties
shall in good faith invoke the following escalation procedure
prior to commencing arbitration, litigation, or any other form
of dispute resolution: (i) the controller of one party shall
contact the controller of the other to discuss and attempt to
resolve the dispute; (ii) if the dispute is not resolved, the
chief financial officer of one party shall contact the chief
financial officer of the other to discuss and attempt to
resolve the dispute; (iii) if the dispute is not resolved, the
president of one party shall contact the president of the
other to discuss and attempt to resolve the dispute.
(b) In the event of a dispute that remains unresolved despite the
Parties' good faith negotiations over (i) the applicable
Commonly Used Retail Price ("CUR") or (ii) amounts properly
payable by Comshare hereunder, the dispute shall be resolved
through binding arbitration in accordance with the
Non-Administered Arbitration Rules of the CPR Institute for
Dispute Resolution, by three (3) arbitrators, of whom each
Party shall appoint one, and the third shall be selected by
the two arbitrators chosen by the Parties. The arbitration
shall be governed by the United States Arbitration Act, 9
U.S.C. Sections 1-16, and judgment upon the award rendered by
the arbitrators may be entered by any court having
jurisdiction thereof. The place of the arbitration shall be
Chicago, Illinois.
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
(c) If the dispute has not been resolved by the means provided in
the above Subsection 15(b) within ninety (90) days of the
initiation of such procedure, either Party may initiate
litigation upon thirty (30) days written notice to the other
Party; provided, however, that if one Party has requested the
other to participate in the arbitration procedure described in
the above Subsection 15(b) and the other has failed to
participate, the requesting Party may initiate litigation
before expiration of the above period."
19. Notices. The addresses for notices provided in Section 16(c) of the
License Agreement shall be amended as follows:
If to Arbor, to:
Arbor Software Corporation
1344 Crossman Avenue
Sunnyvale, California 94089
ATTN: Legal Department
Telecopy: (408) 744-0400
If to Comshare, to:
Comshare, Incorporated
555 Briarwood Circle
Ann Arbor, Michigan 48108
ATTN: President
Telecopy: (313) 994-4140
20. Assignment. The second sentence of Section 16(h) of the License
Agreement is hereby deleted in its entirety and replaced with the following
language:
"Notwithstanding the foregoing, the rights granted to Comshare under
this Agreement are assignable (i) in whole but not in part without
permission in connection with a merger, consolidation, reorganization,
assignment to direct or indirect subsidiaries or with a sale or
exclusive license of substantially all the Comshare software used in
conjunction with the Software or (ii) in part without permission in
connection with the sale or exclusive license of a Comshare product or
product line used in conjunction with the Software. In the event that
Comshare assigns its rights in part pursuant to clause (ii) above,
Comshare may not include as part of that assignment its rights under:
Section 6(c) of the Agreement (Comshare Distributors), Section 9
(Essbase Training Materials) of the Second Amendment to the Agreement,
the provision of Exhibit B entitled "Ongoing Support," Section 2
(Enhancements) of Exhibit C, and Sections III (Support and Training
Prices) and V (Mutual Audit Rights) of Exhibit D. Arbor may, subject to
Section 5 (Core Software) of the Second Amendment, assign its rights
and obligations under this Agreement without permission in connection
with a merger, consolidation, reorganization, assignment to direct or
indirect subsidiaries, or as part of a sale of substantially all of its
assets or substantially all of its intellectual property rights in the
Software."
21. Effect of License Agreement. The First Amendment to License
Agreement, effective March 1, 1994, is replaced in its entirety and superseded
by this Second Amendment
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
and Exhibit D attached hereto. The Second Amendment shall take effect upon
execution hereof; provided, however, that the provisions of Exhibit D (other
than Sections II (Maintenance Royalties) and V (Mutual Audit Rights) thereof)
shall take effect on January 1, 1998. Except as specifically set forth in this
Second Amendment, all terms and conditions set forth in the License Agreement
shall remain in full force and effect and continue to bind the Parties and their
respective successors and permitted assigns. In the event of any inconsistency
or conflict between the provisions of the License Agreement and this Second
Amendment, this Second Amendment shall prevail and govern. This Second Amendment
may be executed in one or more counterparts, by facsimile, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument.
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
IN WITNESS WHEREOF, the Parties have caused this Second Amendment to be executed
by their duly authorized representatives as of the date first written above.
ARBOR SOFTWARE CORPORATION COMSHARE, INCORPORATED
By:______________________ By:______________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
Date:____________________ Date:____________________
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
EXHIBIT "D"
TO
LICENSE AGREEMENT
PRICING
Comshare shall pay Arbor for sublicenses of Software and for Arbor
services as follows:
I. SOFTWARE SUBLICENSE ROYALTIES.
A. Limited Use Tier.
1. Comshare shall pay Arbor ******** of Arbor's Commonly Used
Retail Price ("CUR"), as defined in Section IV(A) below, for each unit of the
Software distributed by Comshare or a Comshare Distributor as a component module
of a Comshare- packaged application including, without limitation, Comshare's
Arthur Merchandise Planning, Commander Sales Analysis, BudgetPLUS (version
without "ad hoc" spreadsheet write capability), and Performance Measurement
applications, in each case where all of the following restrictions are
satisfied:
a. No delivery to customer of any of the following:
(1) Essbase API (except for run-time dynamic link libraries
embedded in the Comshare application);
(2) Essbase Spreadsheet Toolkit;
(3) Essbase Objects or similar future application
development tools;
(4) Essbase Adjustment Module; or
(5) Essbase Web Gateway.
b. Use of the Software is contractually limited to use by a
customer with a single specified Comshare application. The
Comshare customer license agreement governing the use of the
Software must be in a hard copy (i.e., paper) form delivered
to and executed by the customer, and must prominently
display the following language:
THE ARBOR ESSBASE SOFTWARE PROVIDED WITH THIS COMSHARE
APPLICATION SOFTWARE IS LIMITED TO USE ONLY WITH THIS
COMSHARE PRODUCT. WITHOUT LIMITING THE FOREGOING, LICENSEE
MAY NOT (1) USE THE ESSBASE SOFTWARE OR ANY THIRD-PARTY
PROGRAMMING LANGUAGE, TOOLS, OR PRODUCTS TO CREATE
ADDITIONAL APPLICATIONS DESIGNED TO WORK WITH THE ESSBASE
SOFTWARE, (2) ACCESS DATA FROM THE ESSBASE SERVER USING
THIRD-PARTY SOFTWARE, OTHER THAN A SPREADSHEET, COMPATIBLE
WEB BROWSER AND THE REPORT WRITER SOFTWARE INCLUDED WITH
THIS SOFTWARE PACKAGE, OR (3) USE ANY OF THE FOLLOWING:
ESSBASE APPLICATION PROGRAMMING INTERFACE, ESSBASE
SPREADSHEET TOOLKIT, ESSBASE OBJECTS, ESSBASE
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* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
ADJUSTMENT MODULE, OR ESSBASE WEB GATEWAY. USE OF THE
ESSBASE APPLICATION MANAGER IS RESTRICTED TO LICENSEES OF
THE COMSHARE BUILDER PACKS.
Where Commander Decision (or any successor product) is
delivered to the customer solely for use with a
Comshare-packaged application, such as BudgetPLUS (version
without "ad hoc" spreadsheet capability), such combination
shall be deemed a single Comshare-packaged application for
purposes of this Subsection I(A)(1)(b), provided that the
Comshare customer license agreement governing the use of the
Software must be in a hard copy (i.e., paper) form delivered
to and executed by the customer, and must prominently
display the following language:
THE ARBOR ESSBASE AND COMMANDER DECISION SOFTWARE PROVIDED
WITH THIS COMSHARE APPLICATION SOFTWARE ARE LIMITED TO USE
ONLY WITH THIS COMSHARE APPLICATION. WITHOUT LIMITING THE
FOREGOING, LICENSEE MAY NOT (1) USE THE ESSBASE SOFTWARE OR
ANY THIRD-PARTY PROGRAMMING LANGUAGE, TOOLS, OR PRODUCTS TO
CREATE ADDITIONAL APPLICATIONS DESIGNED TO WORK WITH THE
ESSBASE SOFTWARE, (2) ACCESS DATA FROM THE ESSBASE SERVER
USING THIRD-PARTY SOFTWARE, OTHER THAN A SPREADSHEET,
COMPATIBLE WEB BROWSER AND THE REPORT WRITER SOFTWARE
INCLUDED WITH THIS SOFTWARE PACKAGE, OR (3) USE ANY OF THE
FOLLOWING: ESSBASE APPLICATION PROGRAMMING INTERFACE,
ESSBASE SPREADSHEET TOOLKIT, ESSBASE OBJECTS, ESSBASE
ADJUSTMENT MODULE, OR ESSBASE WEB GATEWAY. USE OF THE
ESSBASE APPLICATION MANAGER IS RESTRICTED TO LICENSEES OF
THE COMSHARE BUILDER PACKS.
c. Comshare and Comshare Distributors shall not provide or
permit end-user access to data on the Essbase Data Analysis
Server through third-party report writers or other
third-party software, except for report writers that provide
formatted production reports such as Crystal Info for
Essbase Version 5 (as it exists in its current version as of
the date of this Second Amendment). Comshare may include
future versions of such report writers so long as they do
not include On Line Analytical Processing ("OLAP")
functionality such as multidimensional viewing for "ad hoc"
drill-through or pivoting of data. Comshare may, however,
provide access to data on the Essbase Data Analysis Server
(i) through software technology licensed from third parties
if such software is embedded in and integrated into the
Comshare application with which the Software is licensed for
use, or (ii) through a Comshare or third-party web browser.
Comshare may provide or permit access to data on the Essbase
Data Analysis Server by a customer
2
<PAGE> 12
through a standard object (e.g., Visual Basic) "container"
or equivalent software included as part of the Comshare
application, so long as such inclusion does not facilitate
"ad hoc" spreadsheet access or the use, creation or design
of custom Essbase applications.
d. SQL Drill-Through module may be provided to end users for a
period not to exceed six (6) months after the date Arbor
provides Comshare with an API for it.
e. "Ad hoc" spreadsheet access to the data on the Essbase Data
Analysis Server may be provided only through a third-party
spreadsheet used in conjunction with the Essbase Spreadsheet
Add-In. As used in this Exhibit D, "ad hoc" spreadsheet
access generally means the loading, retrieval or viewing of
data through a generic or application non-specific
spreadsheet interface. In this Limited Use Tier, however,
such ad hoc end-user spreadsheet access shall be read-only
(i.e., no writing or loading of data), with the "lock and
send" and "calculation" functions programmatically disabled
from the Essbase Spreadsheet Add-In. The foregoing shall not
preclude or restrict Comshare from providing to its
customers read and write access to the Essbase data through
a predefined Comshare spreadsheet-based,
application-specific user interface template included in the
Comshare application.
f. The Essbase Data Analysis Server delivered to the customer
is programmatically restricted to permit establishment of a
single application "folder" in the Essbase Application
Management/Data Management hierarchy, so as to permit the
end user to administer only a single application through the
Essbase Application Manager. Any sample databases provided
by Arbor with the Software shall be delivered by Arbor in
the single application folder. This restriction shall not
limit the number of databases that may be created for a
single application.
g. The Software sold for use with a Comshare application in its
"basic offering" configuration as stated on Comshare's price
list may represent no more than ********* of the combined
value of the Comshare and Arbor software sold. For purposes
of determining value, the Parties shall use their respective
U.S., European, and Japanese list prices for software (i.e.,
the Comshare list price for Comshare software and the Arbor
list price for fully functional versions of the Arbor
software), provided that in no event shall this be
interpreted as setting a list price for either Comshare or
Arbor software. In cases where a programmatically restricted
version of the Software is involved, the applicable Arbor
list price shall be the list price of the fully functional
version of the Software.
2. Comshare's (i) failure to comply with any of the restrictions
in Subsections I(A)(1)(a), (c), (d), (e), (f), or (g) above, or (ii) its
compliance with Subsection I(B)(1) and not with Subsection I(A)(1)(b), will
result in the sublicense being subject to the royalty rate of the Application
Specific Use Tier in Section I(B) below. Comshare's failure to comply with any
of
3
<PAGE> 13
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
the restrictions in either Subsection I(A)(1)(b) above or I(B)(1) below will
result in the sublicense being subject to the royalty rate of the Full Use Tier
in Section I(C) below. *************************************
3. The Limited Use sublicense royalty in Subsection I(A)(1) shall
be further subject to the volume discounts in Section I(D) below.
4. Comshare is not obligated to pay royalties to Arbor for any
past or future upgrades from (i) single processor to multi-processor platforms,
or (ii) for Software exchanges between versions on different operating system
platforms, provided that Software on the new operating system platform delivered
has the same or lower Arbor list price than Software on the operating system
platform being exchanged.
5. In the event that Comshare assigns to a third party its rights
under the License Agreement in connection with the sale or exclusive license of
a particular Comshare product or product line, the applicable Limited Use
royalty rate under this Section I(A) for the distribution or sublicense of the
Software by such third party assignee shall be *********** of Arbor's then
current local country list price for the Software. Such royalty rate shall not
be subject to any volume discounts.
B. Application Specific Use Tier.
1. Comshare shall pay Arbor ************* of Arbor's CUR, as
defined in Section IV(A) below, for each unit of the Software distributed by
Comshare or a Comshare Distributor as a component of a Comshare-packaged
application, including without limitation the current versions of Comshare's
BudgetPLUS (ad hoc spreadsheet read/write version) and Commander Decision
(general purpose) applications, in each case where all of the following
requirements are satisfied:
a. The Software provided does not qualify for the
Limited Use royalty rate in Subsection I(A)(1) above.
b. Where a single Comshare-packaged application is
delivered to the customer, use of the Software is
contractually-limited to use by the customer with the
single Comshare application delivered. The Comshare
customer license agreement governing the use of the
Software must be in a hard copy (i.e., paper) form
delivered to and executed by the customer, and must
prominently display the following language:
THE ARBOR ESSBASE SOFTWARE PROVIDED WITH THIS
COMSHARE APPLICATION SOFTWARE IS LIMITED TO USE ONLY
WITH THIS COMSHARE PRODUCT.
Where Commander Decision (or any successor product)
is delivered to the customer solely for use with a
Comshare-packaged application, such as BudgetPLUS,
such combination shall be deemed a single
Comshare-packaged application for purposes of this
Subsection I(B)(1)(b), provided that the Comshare
customer license agreement governing the use of the
Software must be in a hard copy (i.e., paper) form
delivered to and executed by the customer, and must
prominently display the following language:
4
<PAGE> 14
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
THE ARBOR ESSBASE AND COMMANDER DECISION SOFTWARE
PROVIDED WITH THIS COMSHARE APPLICATION SOFTWARE ARE
LIMITED TO USE ONLY WITH THIS COMSHARE APPLICATION.
c. Where Commander Decision (or any successor product)
is delivered to the customer as a general purpose
application or non-application specific development
platform, use of the Software is
contractually-limited to use by a customer with
Commander Decision and for the development and use of
a single application. The Comshare customer license
agreement governing the use of the Software must be
in a hard copy (i.e., paper) form delivered to and
executed by the customer, and must prominently
display the following language:
THE ARBOR ESSBASE SOFTWARE PROVIDED WITH THIS
COMSHARE APPLICATION SOFTWARE IS LIMITED TO USE ONLY
WITH COMMANDER DECISION FOR THE DEVELOPMENT AND USE
OF A SINGLE APPLICATION.
d. The Essbase Data Analysis Server delivered to the
customer is programmatically restricted to permit
establishment of a single application "folder" in the
Essbase Application Management/Data Management
hierarchy, so as to permit the end user to administer
only a single application through the Essbase
Application Manager. Any sample databases provided by
Arbor with the Software shall be delivered by Arbor
in the single application folder. This restriction
shall not limit the number of databases that may be
created for a single application.
2. Any distribution or sublicense of the Software (whether or not
as a component module of a Comshare application including without limitation
Comshare's Arthur Merchandise Planning, Commander Sales Analysis, BudgetPLUS
(version without "ad hoc" spreadsheet write capability), or Performance
Measurement applications) which in any manner does not meet the requirements set
forth either in Section I(A) or Subsections I(B)(1)(b), (c), or (d) above will
result in the sublicense being subject to the royalty rate of the Full Use Tier
in Section I(C) below. ******************************************
3. The Application Specific Use sublicense royalty in Subsection
I(B)(1) above shall be further subject to the volume discounts in Section I(D)
below.
4. In the case of a customer that has previously purchased from
Comshare or a Comshare Distributor a Limited Use sublicense, the royalty for an
upgrade to an Application Specific Use sublicense for each server shall be the
difference between the royalty as calculated in this Section I(B) and the amount
Comshare has previously paid to Arbor for that customer's Limited Use sublicense
on that server. For customers of Comshare or a Comshare Distributor that have
purchased a sublicense that was granted by Comshare prior to January 1, 1998 and
reported to Arbor as a "Limited Use" sublicense, the purchase of Software that
is licensed as Application Specific Use in full compliance with the terms of
this Section I(B) shall not require such customer to upgrade or pay any
additional amounts for such "Limited Use" sublicenses purchased before the date
of execution of the Second Amendment unless Comshare or the
5
<PAGE> 15
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
Comshare Distributor charges such customer an upgrade fee in connection with
such purchase. Comshare will provide the customer with the appropriate
registration number/key to reflect the upgrade of the license. In the event that
Comshare has previously paid Arbor higher fees for the Limited Use sublicenses
on a server that would be due for the substituted Application Specific Use
sublicense, Comshare shall not be entitled to a refund.
5. Arbor will provide Comshare with all copies of the Software and
documentation required for Application Specific Use sublicenses. Comshare will
give Arbor reasonable advance forecasts of its inventory requirements for
documentation, and Arbor will use commercially reasonable efforts to provide
Comshare with the required inventory level. If Comshare produces the
documentation itself, then Comshare may subtract its reasonable costs of
producing the documentation from amounts otherwise owed by Arbor; provided,
however, that such costs shall not exceed Arbor's own costs by more than
********* Arbor will deliver to Comshare (at locations designated by Comshare):
three (3) copies of the Software on appropriate media and three (3) hard copies
and one (1) electronic media copy of the documentation and training materials as
it changes from time to time.
6. In the event that Comshare assigns to a third party its rights
under the License Agreement in connection with the sale or exclusive license of
a particular Comshare product or product line, the applicable Application
Specific Use royalty rate under this Section I(B) for the distribution or
sublicense of the Software by such third party assignee shall be *********** of
Arbor's then current local country list price for the Software. Such royalty
rate shall not be subject to any volume discounts.
C. Full Use Tier.
1. Comshare shall pay Arbor ********** of Arbor's CUR, as defined
in Section IV(A) below, for each of the following distributed by Comshare or a
Comshare Distributor:
a. Any distribution or sublicense of the Software that is
not contractually-limited to use with a Comshare
application in the manner prescribed by Subsections
I(A)(1)(b) or I(B)(1)(b) or (c) above.
b. Any distribution or sublicense of the Software on a
stand-alone basis. For purposes of this Subsection
I(C)(1)(b), an "add-on" sale of additional ports or
components of the Software for use with an Essbase Data
Analysis Server previously licensed to a customer in
accordance with the requirements of Sections I(A) or I(B)
above is not a "stand-alone" sale.
2. The Full Use sublicense royalty in Subsection I(C)(1) above
shall be further subject to the volume discounts in Section I(D) below.
3. Notwithstanding the above, Comshare shall pay Arbor *********
of the applicable CUR for all Full Use sublicenses distributed by Comshare
through its agents, resellers, and distributors located outside the United
States (provided that such agents', resellers', or distributors' fee is at least
********** of the applicable CUR), but not for sublicenses distributed through
Comshare's subsidiaries or Comshare's direct sales force. This **********
royalty rate shall not be subject to any volume discounts.
6
<PAGE> 16
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
4. Arbor will provide Comshare with all copies of the Software and
documentation required for Full Use sublicenses. Comshare will give Arbor
reasonable advance forecasts of its inventory requirements for documentation,
and Arbor will use commercially reasonable efforts to provide Comshare with the
required inventory level. If Comshare produces the documentation itself, then
Comshare may subtract its reasonable costs of producing the documentation from
amounts otherwise owed by Arbor; provided, however, that such costs shall not
exceed Arbor's own costs by more than ***********. Arbor will deliver to
Comshare (at locations designated by Comshare): three (3) copies of the Software
on appropriate media and three (3) hard copies and one (1) electronic media copy
of the documentation and training materials as it changes from time to time.
5. In the case of a customer that has previously purchased from
Comshare or a Comshare Distributor (i) a sublicense granted by Comshare prior to
January 1, 1998 and reported to Arbor as a "Limited Use" sublicense, (ii) a
Limited Use sublicense as defined in Section I(A) above, or (iii) an Application
Specific Use sublicense as defined in Section I(B) above, the royalty for
upgrade to a Full Use sublicense for each server shall be the difference between
the royalty as calculated in this Section I(C) and the amount Comshare has
previously paid to Arbor for that customer's sublicense on that server. Comshare
will provide the customer with the appropriate registration number/key to
reflect the upgrade of the license. In the event that Comshare has previously
paid Arbor higher fees for the Limited Use or Application Specific Use
sublicense on a server that would be due for the substituted Full Use
sublicense, Comshare shall not be entitled to a refund.
6. In the event of (i) a sale, transfer or other disposition of
all or substantially all of Comshare's assets, (ii) a sale or exclusive license
of substantially all the Comshare software used in conjunction with the
Software, (iii) acquisition by a single person, entity or group acting in
concert of greater than fifty percent (50%) of the voting securities of
Comshare, (iv) a merger, consolidation or reorganization of Comshare in which
Comshare is not the surviving entity, (v) a merger in which Comshare is the
surviving entity but in which ownership of fifty percent (50%) or more of the
outstanding voting securities of Comshare is transferred to holders different
from those that held the stock immediately prior to such merger, or (vi) the
sale, transfer or other disposition of all or substantially all the Comshare
software used in conjunction with the Software (each, a "Corporate
Transaction"), the Full Use royalty rate set forth in Subsection I(C)(1) shall
increase to ********** of Arbor's CUR, as defined in Section IV(A) below. There
shall be no reduction from this rate for volume discounts. Comshare or its
successors or permitted assigns, however, shall be permitted to continue to sell
Full Use sublicenses to existing customers (as of the effective date of the
Corporate Transaction) at the applicable royalty rate in effect immediately
prior to the Corporate Transaction, and to continue to provide maintenance and
add-on sales to the existing Comshare customers, in accordance with the terms of
the License Agreement. For purposes of this Subsection, a "customer" is the
legal entity or entities that are party to a Comshare license agreement
governing the use of Software.
7. In the event that Comshare assigns to a third party its rights
under the License Agreement in connection with the sale or exclusive license of
a particular Comshare product or product line, the applicable Full Use royalty
rate under Section I(C) for the distribution or sublicense of the Software by
such third party assignee shall be ********** of Arbor's then current list price
for the Software. Such royalty rate shall not be subject to any volume
discounts.
7
<PAGE> 17
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
D. Volume Discounts.
The sublicense prices described in Subsections I(A)(1) and I(B)(1)
above shall be further reduced in each contract Year as follows in the event
that the amounts payable by Comshare to Arbor for Software sublicenses under
Sections I(A), I(B), and I(C) above in the aggregate reach the following levels
in that Year:
<TABLE>
<CAPTION>
SECTION I(A) SECTION I(B)
RATES RATES
For Amounts Rdctn. Royalty Rdctn. Royalty
in Excess of: Pctge. Rate Pctge. Rate
------------- ------ ---- ------ ----
<S> <C> <C> <C> <C>
*** ** ** ** **
*** ** ** ** **
</TABLE>
The sublicense prices described in Subsection I(C)(1) above shall be further
reduced in each Contract Year as follows in the event that the amounts payable
by Comshare to Arbor for Software sublicenses under Section I(C) above reach the
following levels in that Year:
<TABLE>
<CAPTION>
For Amounts Rdctn. Royalty
in Excess of: Pctge. Rate
<S> <C> <C>
*** ** **
</TABLE>
Each reduction percentage in the tables above applies only to sublicenses
granted after the corresponding amount in the table has been achieved. These
royalty rates also apply to upgrades of Software from (i) Limited Use to
Application Specific Use or to Full Use, and (ii) from Application Specific Use
to Full Use.
E. Related Works.
For each unit of a Related Work (as defined in Section 2(b) of the
Second Amendment) distributed to a customer by Comshare, Comshare shall pay
Arbor a royalty in the amount of (i) the applicable royalty as provided in
Subsection I(A)(1), I(B)(1) or I(C)(1) above plus (ii) **********. Arbor shall
bear any one time payment or lump sum fee payable by Arbor to a third party for
distribution rights to a Related Work where the rights obtained include
distribution rights for any party in addition to Comshare.
II. MAINTENANCE ROYALTIES.
A. For the maintenance services described on Exhibit C to the License
Agreement, Comshare shall pay, for each of the sublicensees that purchase or
renew annual maintenance of the Software on or after the date of execution of
the Second Amendment, a maintenance rate of *********** times the royalties
actually paid to Arbor for the sublicensed Software under maintenance.
8
<PAGE> 18
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
B. Comshare shall provide its quarterly royalty reports to Arbor via
e-mail in electronic form in an Excel or similar computer spreadsheet.
III. SUPPORT AND TRAINING PRICES.
For the support and training services described on Exhibit B to the
License Agreement, Comshare shall pay ************** of Arbor's standard hourly
rate for that service, plus reasonable travel, room and board. Travel, room and
board expenses shall conform to Comshare's standard policies and must be
approved in advance by Comshare at the time Comshare requests Arbor to provide
the services.
IV. COMMONLY USED RETAIL PRICE.
A. "Commonly Used Retail Price" ("CUR") means the average discounted
price which Arbor realizes for the corresponding units of Software sublicensed
by Comshare. Comshare shall pay royalties to Arbor under Sections I(A), I(B),
and I(C) of this Exhibit D based on Arbor's average discounted price rather than
Arbor's list price of software. The CUR provides the mechanism to determine
Arbor's average discounted sales price for different-sized transactions during
different periods of time. The CUR shall be calculated as follows:
1. Arbor shall consider each transaction involving the sale of
a Software license and shall allocate the revenue among different revenue types
(e.g., software license fees, maintenance, training and consulting) as required
by SOP 91-1 and successor accounting pronouncements. For purposes of this
calculation, only the revenue from the transaction attributable to software
license fees under such SOP shall be considered revenue from Software license
sales.
2. Arbor shall then segregate based on Arbor's applicable
country or regional list price, all of its Software license sales, both direct
and through local country distributors, within ********** bands ranging from
********** to ************ with bands of ************* thereafter.
3. Arbor shall further segregate, its Software license sales
by country or region including *********** or more countries, for each country
or region that includes ********** or more Software licenses to *********** or
more customers during the previous twelve (12) months. Arbor shall determine the
configuration of regions. Once determined, the regions are fixed except that
regions may be subdivided once ********** transactions are completed.
4. Direct sales of development or similarly restricted
Software licenses by Arbor to Arbor application partners, original equipment
manufacturers ("OEMs"), systems integrators, and other strategic partners or
customers shall be excluded from the transaction bands.
5. For each country- or region-specific transaction band,
Arbor shall aggregate Arbor Software license sales during the prior twelve (12)
months at list price (either U.S. or appropriate local country list price for
particular country or region) and at actual sales price. By comparing the
aggregate actual sales price and the aggregate list price, Arbor shall determine
the "average discounted price percentage" ("ADPP") for each country- or
region-specific transaction band. Stated otherwise, if the average sales price
in a transaction band is
9
<PAGE> 19
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
********** less than the average list price, the ADPP for that transactional
band would be **********.
6. Comshare shall then segregate the Software license sales of
Comshare and the Comshare Distributors in the quarter by the regions and
transaction bands reported by Arbor using the applicable Arbor list price (U.S.
or local foreign price) for such Software license sales. The ADPP for each
country- or region-specific transaction band multiplied by the appropriate Arbor
list price (U.S. or local foreign price) for each Software license sale by
Comshare or a Comshare Distributor in that country- or region-specific
transaction band constitutes the CUR for that Software license sale. For
countries or regions that include less than ********** Software transactions in
the prior twelve (12) months, the U.S. ADPP shall be used for the applicable
CUR.
7. If Arbor changes its list price, the ADPP will be
calculated using the revised list price and actual sales price for those
transactions that occur on or after the effective date of the price change. The
CUR will be calculated using the price list in effect at the time of the
transaction; provided that during the first six (6) months following the
effective date of any new Arbor price list, Comshare may, at its option, use
either the new price list or the most recent prior price list in calculating the
CUR. If the effective date of the new price list occurs after the first day of a
month, the six (6) month period shall begin on the first day of the following
month. If at any time during such six (6) month period Comshare chooses to use
the new price list, Comshare shall use the new price list for the remainder of
the period.
8. The Parties agree that for transaction bands in which no
sales occurred in the applicable country or region within the prior twelve (12)
months, Arbor shall extrapolate the ADPP. In order to perform such
extrapolation, the surrounding transaction bands for that country or region
immediately above and below the transaction band with no sales must have sales
during the prior twelve (12) months. The extrapolated ADPP shall be calculated
from the surrounding transaction bands by use of linear regression analysis. If
there are no sales in both surrounding transaction bands, the ADPP from the
transaction band from the most recent past quarter shall be applied.
9. Until the earlier of (i) twelve (12) months from the first
day of the first full calendar quarter following the date of execution of the
Second Amendment or (ii) such point as there are ********** Software license
sales transactions in Japan, the parties agree that the applicable CUR for Japan
in any quarter shall equal *********** of the U.S. CUR for that period. At such
point as there are ********** Software license sales transactions in Japan, with
respect to those transactions on which Comshare has paid a royalty based on a
predetermined CUR equal to *********** of the U.S. CUR, Arbor shall credit
Comshare for the amount actually paid by Comshare using *********** of the U.S.
CUR in excess of the amount, if any, that would have been owed by Comshare using
the Japanese CUR for that period.
B. Arbor shall calculate the ADPP as described in Section IV(A) above
and report it to Comshare on a quarterly basis, no later than sixty (60) days
after the end of each quarter.
C. Comshare shall use the ADPP to determine the CUR and the appropriate
royalty to pay Arbor for sales of Software within each transaction band by
multiplying the appropriate royalty rate (Limited Use, Application Specific Use,
or Full Use) by the CUR for each transaction in a particular transaction band.
Comshare shall use only the Essbase Software portion at list price for each
Comshare sale to determine the appropriate transaction band to use in
calculating the royalties owed to Arbor.
10
<PAGE> 20
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
D. Comshare may request a special royalty quote intended to override
the CUR for a specific transaction, and shall specify the requested royalty to
be paid on the specific transaction. In order for such special royalty quote to
be effective, Arbor and Comshare must agree in writing to the royalty amount to
be paid on the transaction. If any substantive element of the transaction
changes Comshare must request a new special royalty quote. Arbor's consent to
the special royalty quote must be provided in writing to Comshare within thirty
(30) days of agreement to the special quote. Comshare must execute and return
the written consent to the Arbor legal department within thirty (30) days of
receipt of Arbor's written consent.
E. Comshare shall provide its quarterly royalty reports to Arbor via
e-mail in electronic form in an Excel or similar computer spreadsheet.
F. Arbor shall deliver its new price lists for each of its territories
to Comshare ********** days in advance of the effective date of such price list,
to Comshare's chief financial officer by the means and at the address as
indicated in Section 16(c) of the License Agreement, as amended in Section 19 of
the Second Amendment.
V. MUTUAL AUDIT RIGHTS
A. By Arbor. Upon twenty (20) days' written notice and not more than
one (1) time per calendar year, Arbor may examine Comshare's (or, if Comshare
has merged or been acquired, the surviving entity's) books and records related
to the calculation or payment of royalties owed by Comshare to Arbor hereunder,
at Arbor's own expense, using Arbor's internal auditor, internal staff, or its
certified public accounting firm; provided, however, that if any such
examination uncovers an underpayment by Comshare in excess of ***********, then
Comshare shall be liable for the full costs of such audit. Comshare shall
reasonably cooperate with Arbor during the performance of any such examination.
Comshare is not required to provide Arbor with the names of its customers for
purposes of such examination, but must provide an auditable list of customer
numbers. Comshare may, however, provide customer names to Arbor's finance
department on a confidential basis, not to be disclosed to third parties or to
Arbor personnel outside of that department.
B. By Comshare. Upon twenty (20) days' written notice and not more than
one (1) time per calendar year, Comshare may examine Arbor's (or, if Arbor has
merged or been acquired, the surviving entity's) books and records related to
the calculation of CUR and maintenance royalties hereunder, at Comshare's own
expense, using Comshare's internal auditor, internal staff, or its certified
public accounting firm; provided, however, that if any such examination uncovers
an overpayment amount in excess of **********, then Arbor shall be liable for
the full costs of such audit. Arbor shall reasonably cooperate with Comshare
during the performance of any such examination. Arbor is not required to provide
Comshare with the names of its customers for purposes of such examination, but
must provide an auditable list of customer numbers. Arbor may, however, provide
customer names to Comshare's finance department on a confidential basis, not to
be disclosed to third parties or to Comshare personnel outside of that
department.
C. Notwithstanding anything to the contrary contained in the License
Agreement and the Second Amendment, the Software sublicenses that were granted
prior to January 1, 1998 and reported by Comshare to Arbor as "Limited Use"
shall not be subject to additional royalty payments, except as provided in
Subsections I(B)(4) and I(C)(5) above, and are not in any event subject to
question or audit by Arbor; provided, however that if Comshare lessens or
cancels the contractual restrictions with respect to the use of the Software in
any "Limited Use" sublicense
11
<PAGE> 21
* Indicates that information has been omitted and confidential
treatment has been requested therefore. All such omitted
information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
granted prior to January 1, 1998, such sublicense shall be subject to
reclassification and royalty payments under Section I(B) or I(C) above, as
applicable, and may be deemed an upgrade of such sublicense in accordance with
the terms of those Sections. Comshare shall not be required to implement any
additional restrictions set forth in Sections I(A) or I(B) above with respect to
Software shipped as an update to Software licensed as "Limited Use" prior to
January 1, 1998 under a maintenance contract.
D. Notwithstanding anything to the contrary contained in this Exhibit
D, all information provided by Arbor to Comshare related to the CUR prior to the
execution of the Second Amendment and with respect to periods prior to execution
of the Second Amendment shall be deemed to have been accurate and proper and are
not subject to question or audit by Comshare.
VI. MISCELLANEOUS
A. With respect to sublicense and maintenance fees in countries other
than the United States, Comshare will pay Arbor in U.S. dollars or local
currency, at Comshare's election and if permitted by applicable law, at the
exchange rates used by Comshare for its own internal transaction purposes in
effect at the time payment to Arbor becomes due, less any exchange fees actually
incurred. Any tax, duty or withholding on such funds, except for any tax on
Comshare's income, shall be the responsibility of Arbor, and all payments will
be net thereof.
12
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EXHIBIT 99.1
COMSHARE AND ARBOR SOFTWARE CORPORATION SETTLE DISPUTE
All Litigation Between Partners Dismissed
ANN ARBOR, MI, December 15, 1997--Arbor Software (NASDAQ:ARSW), a leading
provider of enterprise OLAP software for management reporting, analysis, and
planning applications, and Comshare(R), Inc. (NASDAQ:CSRE), a market leader in
performance measurement, budgeting, financial consolidation, and retail
merchandise management applications, announced today that they have settled
their dispute over royalties due under their license agreement.
The litigation between the two companies in the U.S. District Court for the
Northern District of California will be dismissed, and all related claims
between the companies dropped. "We're glad to conclude this unhappy chapter of
our relationship with Comshare," commented John Dillon, Arbor's president and
chief operating officer, "and look forward to a successful partnership in the
future."
"This dispute has been a major distraction for Comshare, and we are pleased to
have resolved the differences between the two companies," said Dennis Ganster,
Comshare's president and chief executive officer. "Comshare's Commander Decision
2.1, which was recently announced, will support Arbor Essbase 5.0 when it is
commercially released." Arbor announced and demonstrated Arbor Essbase 5.0 at
its Users Conference in Orlando, Florida last October, but has not yet announced
a shipment date.
About Comshare
Comshare is a market leader in performance measurement, budgeting, consolidation
and retail merchandise management software applications. Comshare develops,
markets, and supports complete client/server and Web-based decision support
software applications. These applications are designed to improve
decision-making for enhanced competitiveness and improved profitability.
Comshare's applications are popular among major corporations in many industries,
with particular concentration in the retail, financial services, utilities,
manufacturing, and consumer goods industries. One of the top 100 independent
software companies, Comshare has customers around the world, many of which are
Fortune 1000 and Financial Times Top 1000 companies. Comshare, Inc. is a
Microsoft Solution Provider.
For more information, call 800/922-7979, email [email protected], or visit
Comshare's Web site at http://www.comshare.com .
Comshare is a registered trademark; Commander Decision is a trademark of
Comshare, Inc. All other trademarks are the property of their respective
holders.
About Arbor Software
Arbor Software Corporation (NASDAQ:ARSW) develops and markets enterprise OLAP
software for management reporting, analysis, and planning applications. Arbor's
products are
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used by more than 1,200 corporations worldwide, spanning a broad range of
industries, business applications, and enterprise data warehousing
architectures. Arbor's customers include BankBoston, Los Angeles Times, PEPSICO,
Prudential and Sears.
Arbor's products are sold direct, as well as through system integrators and
resellers worldwide, including Comshare, Fujitsu, i2, IBM, Lawson, Mitsubishi,
Peoplesoft, and Walker Interactive Systems. Arbor's offices are located in
Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, New York, Sunnyvale,
Washington D.C., Frankfurt, Hamburg, London, Munich, Paris, and Sydney.
Information on Arbor products and services can be found at
http://www.arborsoft.com . Arbor can also be reached via e-mail at
[email protected], or by calling 800/858-1666.
Arbor and Essbase are registered trademarks of Arbor Software Corporation. Any
other product names may be trademarks or registered trademarks of their
respective owners.
CONTACT: Comshare, Inc.
Doug Hockstad, 313/994-6036
[email protected]
or
Lippert/Heilshorn & Associates, Inc.
Kris Otridge, 415/433-3777
or
Arbor Software
Joanna McMillan, 408/541-4035
[email protected]
or JONA Group
Jamie O'Donnell, 415/552-1515
[email protected]
