<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 11, 1998
REGISTRATION NO. 333-47117
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MOBIUS MANAGEMENT SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7372 13-3078745
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
120 OLD POST ROAD
RYE, NEW YORK 10580
(914) 921-7200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------
MITCHELL GROSS
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
120 OLD POST ROAD
RYE, NEW YORK 10580
(914) 921-7200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
KENNETH P. KOPELMAN, ESQ. MARK G. BORDEN, ESQ.
KRAMER, LEVIN, NAFTALIS & FRANKEL JEFFREY A. STEIN, ESQ.
919 THIRD AVENUE HALE AND DORR LLP
NEW YORK, NEW YORK 10022 60 STATE STREET
(212) 715-9100 BOSTON, MASSACHUSETTS 02109
(617) 526-6000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-47117)
of Mobius Management Systems, Inc. is filed solely for the purpose of filing
with the Commission copies of the exhibits listed in Item 16(a) of Part II
hereto.
<PAGE> 3
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
1.1* -- Form of Underwriting Agreement.
3.1* -- Second Amended and Restated Certificate of Incorporation of
the Registrant.
3.2* -- Restated By-Laws of the Registrant.
4.1** -- Specimen certificate representing the Common Stock.
5.1* -- Opinion of Kramer, Levin, Naftalis & Frankel.
10.1** -- Mobius Management Systems, Inc. 1996 Stock Incentive Plan.
10.2 -- Amendment No. 1 to Mobius Management Systems, Inc. 1996
Stock Incentive Plan.
10.3 -- Mobius Management Systems, Inc. 1998 Employee Stock Purchase
Plan.
10.4 -- Mobius Management Systems, Inc. 1998 Non-Employee Director
Stock Option Plan.
10.5 -- Mobius Management System, Inc. 1998 Executive Incentive
Plan.
10.6** -- Form of Grantee Option Agreement.
10.7** -- Lease dated December 4, 1997 by and between Old Boston Post
Road Associates LLC and the Registrant.
10.8** -- Lease dated February 14, 1983 by and between American
National Bank and Trust Company of Chicago and the
Registrant.
10.9** -- Stock Purchase Agreement dated as of May 12, 1997 by and
among the Registrant and the other parties listed on the
signature pages thereto.
10.10** -- Stockholders' Agreement dated as of May 12, 1997 by and
among the Registrant and the other parties listed on the
signature pages thereto.
10.11** -- Registration Rights Agreement dated May 12, 1997 by and
among the Registrant and the other parties listed on the
signature pages thereto.
10.12 -- Employment Agreement between the Registrant and Mitchell
Gross, dated February 26, 1998.
10.13 -- Employment Agreement between the Registrant and Joseph
Albracht, dated February 26, 1998.
10.14** -- Severance Agreement dated as of September 30, 1997 between
the Registrant and Joseph Tinnerello.
10.15** -- Option Agreement dated as of September 30, 1997 between the
Registrant and Joseph Tinnerello.
10.16** -- Letter Agreement, dated as of December 28, 1997 between the
Registrant and Joseph Tinnerello.
10.17** -- Stockholder Agreement, dated as of December 30, 1997 between
the Registrant and Joseph Tinnerello.
10.18** -- Loan and Security Agreement dated as of October 21, 1997
between Silicon Valley Bank and the Registrant.
10.19+ -- Software Assets Purchase Agreement dated as of December 10,
1990 among the Registrant, Compucept of Nevada and Software
Assist Corporation.
10.20+ -- OEM Agreement between the Registrant and CDP Communications,
Inc. dated as of October 15, 1993.
10.21+ -- Source Code License and Amendment to OEM Agreement between
the Registrant and CDP Communications Inc. dated as of
August 12, 1997.
10.22+ -- Amendment #1 to License and Amendment to OEM Agreement
between the Registrant and CDP Communications, Inc. dated
November 21, 1997.
21.1** -- Subsidiaries of the Registrant.
23.1** -- Consent of KPMG Peat Marwick LLP.
23.2* -- Consent of Kramer, Levin, Naftalis & Frankel (included in
Exhibit 5.1).
24.1** -- Power of Attorney.
</TABLE>
- ---------------
* To be filed by amendment
** Previously filed
+ Confidential treatment requested as to certain portions of this Exhibit.
Omitted portions will be filed separately with the Securities and Exchange
Commission.
II-1
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 11, 1998.
MOBIUS MANAGEMENT SYSTEMS, INC.
By: /s/ MITCHELL GROSS
------------------------------------
Mitchell Gross
Chairman of the Board, Chief
Executive
Officer and President
POWER OF ATTORNEY AND SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE(S) DATE
---------- -------- ----
<C> <S> <C>
/s/ MITCHELL GROSS Chairman of the Board, Chief March 11, 1998
- --------------------------------------------------- Executive Officer, President
Mitchell Gross (Principal Executive Officer)
and Director
* Executive Vice President, March 11, 1998
- --------------------------------------------------- Chief Operating Officer,
Joseph J. Albracht Secretary and Director
* Vice President, Finance, Chief March 11, 1998
- --------------------------------------------------- Financial Officer and
E. Kevin Dahill Treasurer (Principal Financial
and Accounting Officer)
* Director March 11, 1998
- ---------------------------------------------------
Peter J. Barris
* Director March 11, 1998
- ---------------------------------------------------
Edward F. Glassmeyer
* Director March 11, 1998
- ---------------------------------------------------
Kenneth P. Kopelman
*
/s/ MITCHELL GROSS
- ---------------------------------------------------
Mitchell Gross
Attorney in Fact
</TABLE>
II-2
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- ----------
<C> <C> <S> <C>
1.1* -- Form of Underwriting Agreement..............................
3.1* -- Second Amended and Restated Certificate of Incorporation of
the Registrant..............................................
3.2* -- Restated By-Laws of the Registrant..........................
4.1** -- Specimen certificate representing the Common Stock..........
5.1* -- Opinion of Kramer, Levin, Naftalis & Frankel................
10.1** -- Mobius Management Systems, Inc. 1996 Stock Incentive
Plan........................................................
10.2 -- Amendment No. 1 to Mobius Management Systems, Inc. 1996
Stock Incentive Plan........................................
10.3 -- Mobius Management Systems, Inc. 1998 Employee Stock Purchase
Plan........................................................
10.4 -- Mobius Management Systems, Inc. 1998 Non-Employee Director
Stock Option Plan...........................................
10.5 -- Mobius Management System, Inc. 1998 Executive Incentive
Plan........................................................
10.6** -- Form of Grantee Option Agreement............................
10.7** -- Lease dated December 4, 1997 by and between Old Boston Post
Road Associates LLC and the Registrant......................
10.8** -- Lease dated February 14, 1983 by and between American
National Bank and Trust Company of Chicago and the
Registrant..................................................
10.9** -- Stock Purchase Agreement dated as of May 12, 1997 by and
among the Registrant and the other parties listed on the
signature pages thereto.....................................
10.10** -- Stockholders' Agreement dated as of May 12, 1997 by and
among the Registrant and the other parties listed on the
signature pages thereto.....................................
10.11** -- Registration Rights Agreement dated May 12, 1997 by and
among the Registrant and the other parties listed on the
signature pages thereto.....................................
10.12 -- Employment Agreement between the Registrant and Mitchell
Gross, dated February 26, 1998..............................
10.13 -- Employment Agreement between the Registrant and Joseph
Albracht, dated February 26, 1998...........................
10.14** -- Severance Agreement dated as of September 30, 1997 between
the Registrant and Joseph Tinnerello........................
10.15** -- Option Agreement dated as of September 30, 1997 between the
Registrant and Joseph Tinnerello............................
10.16** -- Letter Agreement, dated as of December 28, 1997 between the
Registrant and Joseph Tinnerello............................
10.17** -- Stockholder Agreement, dated as of December 30, 1997 between
the Registrant and Joseph Tinnerello........................
10.18** -- Loan and Security Agreement dated as of October 21, 1997
between Silicon Valley Bank and the Registrant..............
10.19+ -- Software Assets Purchase Agreement dated as of December 10,
1990 among the Registrant, Compucept of Nevada and Software
Assist Corporation..........................................
10.20+ -- OEM Agreement between the Registrant and CDP Communications,
Inc. dated as of October 15, 1993...........................
10.21+ -- Source Code License and Amendment to OEM Agreement between
the Registrant and CDP Communications Inc. dated as of
August 12, 1997.............................................
10.22+ -- Amendment #1 to License and Amendment to OEM Agreement
between the Registrant and CDP Communications, Inc. dated
November 21, 1997...........................................
21.1** -- Subsidiaries of the Registrant..............................
23.1** -- Consent of KPMG Peat Marwick LLP............................
23.2* -- Consent of Kramer, Levin, Naftalis & Frankel (included in
Exhibit 5.1)................................................
24.1** -- Power of Attorney...........................................
</TABLE>
- ---------------
* To be filed by amendment
** Previously filed
+ Confidential treatment requested as to certain portions of this Exhibit.
Omitted portions will be filed separately with the Securities and Exchange
Commission.
<PAGE> 1
Exhibit 10.2
AMENDMENT NO 1 TO
MOBIUS MANAGEMENT SYSTEMS, INC. 1996 STOCK INCENTIVE PLAN
Pursuant to Section 3.1 of the Mobius Management Systems, Inc. 1996
Stock Incentive Plan (the "Plan"), and in accordance with the resolutions of the
Board of Directors of Mobius Management Systems, Inc. (the "Company") adopted on
February 19, 1998 and the resolutions of the stockholders of the Company adopted
on February 25, 1998, Section 1.5.1 of the Plan is amended to read as follows:
1.5.1 The total number of shares of Class A Non-Voting Common Stock of the
Company, par value $0.01 per share ("Class A Common Stock"), which may be
transferred pursuant to awards granted under the Plan (the "share limit")
shall be 34,800 shares, subject to the following sentence. As of any
January 1 following the completion of an initial public offering of common
stock of the Company, the Board in its discretion may increase the share
limit by a number that is no more than 3% of the total number of shares of
common stock issued and outstanding at such date. Notwithstanding the
foregoing, no more than 75,000 shares of Class A Common Stock may be
transferred upon the exercise of incentive stock options. Shares
transferred pursuant to awards granted under the Plan may be authorized
but unissued Class A Common Stock or authorized and issued Class A Common
Stock held in the Company's treasury or acquired by the Company for the
purposes of the Plan. The Committee may direct that any stock certificate
evidencing shares issued pursuant to the Plan shall bear a legend setting
forth such restrictions on transferability as may apply to such shares
pursuant to the Plan.
<PAGE> 1
Exhibit 10.3
MOBIUS MANAGEMENT SYSTEMS, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose of Plan.
The purpose of the Mobius Management Systems, Inc. 1998 Employee Stock
Purchase Plan (the "Plan") is to provide eligible employees who wish to acquire
shares of common stock of Mobius Management Systems, Inc. (the "Company") with a
convenient method of doing so. The Company's Board of Directors (the "Board")
believes that employee participation in ownership of the Company on this basis
will be to the mutual benefit of the employees and the Company. It is intended
that the Plan shall constitute an "employee stock purchase plan" within the
meaning of section 423(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Employees Eligible to Participate.
Any employee of the Company or of any subsidiary of the Company which
adopts the Plan with the consent of the Company (a "Participating Corporation")
is eligible to participate in the Plan, other than:
(a) an employee whose customary employment is 20 hours or
less per week;
(b) an employee whose customary employment is for not more than 5 months
per year; and
<PAGE> 2
(c) an employee who has not been employed for at least ninety (90) days
as of the commencement of an Offer (as defined in section 5).
The term "employee" includes any officer or director of a Participating
Corporation who is otherwise an employee of a Participating Corporation. The
term "subsidiary" has the meaning set forth in section 424(f) of the Code.
3. Administration of the Plan.
3.1 The Plan shall be administered by a committee (the "Committee") of the
Board, which shall consist of not less than two directors. The members of the
Committee shall be appointed by, and serve at the pleasure of, the Board.
3.2 The Committee shall have the authority (a) to exercise all of the
powers granted to it under the Plan, (b) to construe, interpret and implement
the Plan, (c) to prescribe, amend and rescind rules and regulations relating to
the Plan, including rules governing its own operations, (d) to delegate some or
all of its authority under the Plan to one or more of its members or one of more
employees of the Company, (e) to make all determinations necessary or advisable
in administering the Plan, (f) to correct any defect, supply any omission and
reconcile any inconsistency in the Plan, and (g) to amend the Plan to reflect
changes in applicable law.
3.3 Actions of the Committee shall be taken by the vote of a majority of
its members. Any action may be taken by a written
2
<PAGE> 3
instrument signed by a majority of the Committee members, and action so taken
shall be fully as effective as if it had been taken by a vote at a meeting.
3.4 The determination of the Committee on any matters relating to the Plan
shall be final, binding and conclusive.
3.5 No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan.
3.6 Notwithstanding anything to the contrary contained herein: (a) until
the Board shall appoint the members of the Committee, the Plan shall be
administered by the Board; and (b) the Board may, in its sole discretion, at any
time and from time to time, resolve to administer the Plan. In either of the
foregoing events, the Board shall have all of the authority and responsibility
granted to the Committee herein.
4. Shares Subject to Plan.
4.1 The total number of shares of common stock of the Company, par value
$.01 per share ("Common Stock"), which may be transferred pursuant to the Plan
shall be 300,000 shares. Such shares may be authorized but unissued Common Stock
or authorized and issued Common Stock held in the Company's treasury or acquired
by the Company for the purposes of the Plan. Shares subject to any lapsed or
expired option shall again become available for transfer pursuant to options
granted or to be granted under the Plan.
3
<PAGE> 4
4.2 Subject to any required action by the shareholders of the Company, the
number of shares available for issuance both in the aggregate and with respect
to each outstanding option, and the Base Option Price per share under each
outstanding option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option. After any adjustment pursuant to
this Section 4.2, the number of shares subject to each outstanding option shall
be rounded to the nearest whole number.
5. Offer Date.
5.1 The Committee shall determine the date or dates upon which one or more
offers ("Offer(s)") shall be made under the
4
<PAGE> 5
Plan. The term of each Offer shall be twelve (12) months, or such other term as
the Committee shall determine prior to the commencement of an Offer, which shall
not exceed 27 months.
5.2 In order to participate in an Offer, an eligible employee must submit
such enrollment forms as shall be prescribed by the Committee (which shall
include a payroll deduction authorization form) at such time and in such manner
as shall be prescribed by the Committee. The payroll deductions authorized by a
participant on a payroll deduction authorization form shall be expressed as a
whole number percentage of the participant's "regular compensation" for each pay
period during the term of the Offer, up to a maximum of ten percent (10%) of
such compensation. For purposes of the Plan, a participant's "regular
compensation" for a pay period shall include the participant's base
compensation, targeted commissions and targeted bonus (but shall exclude
variable items such as, by way of example and not limitation, commissions and
bonus in excess of targeted amounts, overtime, sick pay, severance pay, expense
reimbursements and allowances and other special payments).
6. Participation.
6.1 On the effective date of an Offer, each eligible employee shall be
granted an option to purchase, through payroll deductions, as many whole shares
of Common Stock, subject to the limitation set forth in Section 7.1, as he or
she may purchase
5
<PAGE> 6
with the amount to be deducted from his or her pay during the term of the Offer.
6.2 All employees granted options under the Plan shall have the same
rights and privileges under the Plan, except that the number of shares each
participant may purchase will depend upon his or her regular compensation and
the percentage payroll deduction he or she authorizes.
6.3 Each participant in an Offer shall agree to notify the Company of any
disposition of shares of Common Stock purchased pursuant to the Plan prior to
the expiration of the holding periods set forth in section 423(a) of the Code.
7. Participation Limitations.
7.1 The maximum number of shares which an employee may purchase pursuant
to any one Offer shall be the number of shares determined by multiplying (a) ten
percent (10%) by (b) the amount of the participant's regular compensation in the
pay period immediately preceding the effective date of the Offer and (c) the
number of pay periods during the term of the Offer, and dividing the product of
(a), (b) and (c) by (d) 85% of the Fair Market Value (as defined in Section 8.2)
of a share of Common Stock on such date.
7.2 Notwithstanding any other provision of the Plan, no employee shall be
granted an option under the Plan if:
(a) the employee, immediately after such grant, owns shares (including
all shares which may be purchased under
6
<PAGE> 7
outstanding options, whether or not such options qualify for the
special tax treatment afforded by section 421(a) of the Code)
possessing 5% or more of the total combined voting power or value of
all classes of capital stock of the Company or of any subsidiary
corporation; for purposes of this limitation, the rules of section
424(d) of the Code and the regulations promulgated thereunder
(relating to attribution of stock ownership) shall apply; or
(b) such grant would permit, under the rules set forth in section
423(b)(8) of the Code and the regulations promulgated thereunder,
the employee's rights to purchase stock under this Plan and all
other employee stock purchase plans maintained by the Company and
its subsidiary corporations, to accrue at a rate in excess of
$25,000 in Fair Market Value of such stock (determined at the time
such option is granted) for each calendar year in which such option
is outstanding at any time; for purposes of this limitation, only
options to which section 423 of the Code applies shall be counted.
8. Option Price.
8.1 The option price at which shares of Common Stock may be purchased
under any option granted under the Plan shall be the lesser of:
7
<PAGE> 8
(a) 85% of the Fair Market Value of a share of Common Stock on the date
of grant of the option (the "Base Option Price"), or
(b) 85% of the Fair Market Value of a share of Common Stock on the date
the option is deemed exercised pursuant to Section 9.1 (the
"Alternative Option Price").
8.2 The Fair Market Value of a share of Common Stock on any day shall be:
(a) If the principal market for the Common Stock (the "Market") is a
national securities exchange or the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") National
Market, the last sale price or, if no reported sales take place on
the applicable date, the average of the high bid and low asked price
of Common Stock as reported for such Market on such date or, if no
such quotation is made on such date, on the next preceding day on
which there were quotations, provided that such quotations shall
have been made within the ten (10) business days preceding the
applicable date;
(b) If the Market is the NASDAQ National List, the NASDAQ Supplemental
List or another market, the average of the high bid and low asked
price for Common Stock on the applicable date, or, if no such
quotations shall have been made on such date, on the next preceding
day on which there were quotations, provided that such
8
<PAGE> 9
quotations shall have been made within the ten (10)
business days preceding the applicable date; or,
(c) In the event that neither paragraph (a) nor (b) shall apply, the
Fair Market Value of a share of Common Stock on any day shall be
determined in good faith by the Committee.
9. Exercise of Options.
9.1 At the end of each payroll period, the amount authorized shall be
deducted from the pay of each participant. On the last day of the term of an
Offer, all amounts deducted from the participant's pay during the term shall be
aggregated, and the participant shall be deemed to have exercised his or her
option to purchase, at the lower of the then applicable Base Option Price or the
Alternative Option Price, that number of whole shares of Common Stock which may
be purchased with such amount. Any excess of funds not expended to purchase
shares on such date shall be refunded to the participant.
9.2 The purchase of shares of Common Stock by a participant under the Plan
shall be recorded on the stock transfer records of the Company in the name of
the participant to reflect the shares purchased on such date. Subject to such
procedures as the Committee may establish from time to time, a certificate
representing the number of shares purchased by the participant will be issued to
the participant upon written request. A participant shall have no rights as a
shareholder of the Company
9
<PAGE> 10
until the purchase of shares pursuant to the foregoing provisions. Except as
otherwise provided in Section 4.2, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) for which the record date is prior to the
date of purchase.
10. Withdrawal; Termination; Suspension of Deductions.
10.1 Subject to procedures and forms prescribed by the Committee, a
participant may at any time elect to withdraw from further participation in an
Offer. Deductions from the pay of the participant shall cease as soon as
practicable following such election and all amounts deducted from the
participant's pay prior to such cessation shall be refunded to the participant.
10.2 Upon termination of a participant's employment with the Company and
its subsidiaries for any reason, the participant shall cease participation in
the Plan, and all amounts deducted from the participant's pay prior to such
cessation shall be refunded to the participant (or, in the event of the death of
the participant, to his or her estate). The Committee may in its discretion
determine whether any leave of absence constitutes a termination of employment
for purposes of the Plan.
10.3 Subject to procedures and forms prescribed by the Committee, a
participant may elect to suspend payroll deductions at any time during the term
of an Offer, in which case deductions shall cease as soon as practicable
following such election. No
10
<PAGE> 11
more than once during the remainder of the term of an Offer, an employee who has
suspended payroll deductions may elect, pursuant to procedures and forms
prescribed by the Committee, to recommence deductions at the same rate as in
effect prior to such suspension. Deductions from the participant's pay shall
begin as soon as practicable following the Company's receipt of such election.
On the last day of the term of the Offer, all amounts deducted from the
participant's pay during the term (both before and, if applicable, after the
suspension of contributions) shall be applied to purchase shares pursuant to
Section 9.
11. Rights not Transferable.
A participant's rights under the Plan shall not be assignable or
transferable, voluntarily or involuntarily, by operation of law or otherwise,
any such assignment or transfer which may be attempted shall be null and void
and of no effect; provided, however, that this Section 11 shall not prevent
transfers by will or by the laws of descent and distribution. If any action is
taken by a participant in contravention of this Section 11, such action may, at
the discretion of the Committee, be treated as a notice of withdrawal pursuant
to the provisions of Section 10.1.
12. Interest.
No Interest will be paid or allowed on any money paid into the Plan by
participants except upon a refund of accumulated payroll deductions pursuant to
Sections 9.1, 10.1, 10.2, 14, 15.1
11
<PAGE> 12
and 19. In each case, interest will be calculated in the manner and at the rate
determined by the Committee prior to the commencement of each Offer.
13. Approval of Shareholders.
The Plan was adopted by the Board on February 19, 1998 and approved by the
Company's shareholders on February 25, 1998.
14. Termination.
The Plan, and all rights of employees under any Offer, shall terminate
upon the first to occur of:
(a) the date as of which the Committee determines that the total number
of shares available for sale under the Plan is not sufficient to
meet all unfilled purchase requirements; or
(b) the date as of which the Plan is terminated by the Board.
Upon termination of the Plan, all payroll deductions shall cease and all amounts
credited to participants shall be either refunded to each participant or
equitably applied to the purchase of the whole shares then available under the
Plan (with any remaining funds refunded to participants as soon as practicable),
as determined by the Committee in its discretion.
15. Amendment.
15.1 The Board may from time to time suspend, discontinue, revise or amend
the Plan in any respect whatsoever. Upon any
12
<PAGE> 13
such suspension, discontinuance, revision or amendment of the Plan during the
term of an Offer, the Committee may in its discretion determine that the Offer
shall immediately terminate and that all amounts credited to participants shall
be either refunded to each participant or equitably applied to the purchase of
whole shares (with any remaining funds refunded to participants as soon as
practicable).
15.2 Shareholder approval of any amendment shall be obtained to the extent
necessary to comply with section 423 of the Code or other applicable law or
regulation.
16. Expenses.
All expenses of administering the Plan, including any expenses incurred in
connection with the purchase by the Company of shares for sale to participants,
shall be borne by the Company.
17. Consents.
17.1 If the Committee shall at any time determine that any Consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any option under the Plan, the issuance or
purchase of shares or other rights thereunder, or the taking of any other action
thereunder (each such action being hereinafter referred to as a "Plan Action"),
then such Plan Action shall not be taken, in whole or in part, unless and until
such Consent shall have been effected or obtained to the full satisfaction of
the Committee.
13
<PAGE> 14
17.2 The term "Consent" as used herein with respect to any Plan Action
means (a) any and all listings, registrations or qualifications in respect
thereof upon any securities exchange or under any federal, state or local law,
rule or regulation, (b) any and all written agreements and representations by
the participant with respect to the disposition of shares, or with respect to
any other matter, which the Committee shall deem necessary or desirable to
comply with the terms of any such listing, registration or qualification or to
obtain an exemption from the requirement that any such listing, qualification or
registration be made and (c) any and all consents, clearances and approvals in
respect of a Plan Action by any governmental or other regulatory bodies.
18. Additional Restrictions
Prior to the exercise of an option under the Plan, and as a condition
precedent to such exercise and the issuance of any shares, the Committee may
require the participant to represent and warrant that the shares are being
acquired for investment purposes only, and may impose such other restrictions on
the issuance of such shares as the Committee in its discretion deems necessary
or advisable.
19. Merger; Dissolution
In the event of a merger or consolidation of the Company with or into any
other corporation or entity, or a dissolution or liquidation of the Company, all
payroll deductions shall cease
14
<PAGE> 15
and all amounts credited to participants shall be refunded to each participant
immediately prior to the consummation of such action. For purposes hereof,
"merger" shall include any transaction in which another corporation acquires all
of the issued and outstanding common stock of the Company.
20. Notices
Any notice to be given to the Company under the Plan shall be in writing
and shall be addressed to Mobius Management Systems, Inc. 120 Old Post Road,
Rye, NY 10580, or to such other address as the Company may hereafter designate
by notice in the manner set forth herein. Notice to a participant shall be
addressed to the address of the participant on the human resources records of
the Company, or to such other address as the participant may designate by notice
in the manner set forth herein. A notice shall be deemed to have been duly given
when personally delivered or, if mailed by registered or certified mail to the
party entitled to receive it, five days after the date the notice was so mailed.
21. Right of Discharge Reserved
Nothing in the Plan shall confer upon any participant the right to
continue in the employ of the Company or any subsidiary or affect any right
which the Company or any subsidiary may have to terminate such employment.
15
<PAGE> 16
22. Section Headings
The section headings contained herein are for the purpose of convenience
only and are not intended to define or limit the contents of the sections.
23. Governing Law.
The Plan shall be interpreted, construed and administered in accordance
with the laws of the State of New York, without giving effect to principles of
conflict of laws, to the extent not preempted by federal law.
16
<PAGE> 1
Exhibit 10.4
MOBIUS MANAGEMENT SYSTEMS, INC.
NON-EMPLOYEE DIRECTORS' 1998 STOCK OPTION PLAN
1. Purpose
The purpose of the Mobius Management Systems, Inc. Non-Employee
Directors' 1998 Stock Option Plan (the "Plan") is to provide an incentive to
those directors of Mobius Management Systems, Inc. (the "Company") who are not
employees of the Company to serve on the board of directors of the Company (the
"Board") and to maintain and enhance the Company's long-term performance.
2. Administration
The terms of the stock options to be awarded under the Plan are set forth
herein and may not be varied other than by amendment of the Plan in accordance
with Section 10. To the extent that any administrative action is required in
connection with the Plan, such action shall be taken by the Board, whose
determination in such case shall be final, binding and conclusive.
3. Shares Available for Awards
The total number of shares of common stock of the Company, par value $.01
per share ("Common Stock"), which may be transferred upon the exercise of
options granted under the Plan shall not exceed 250,000 shares. Such shares may
be authorized and unissued shares, treasury shares or shares acquired by the
Company for the purposes of the Plan. Any shares of Common Stock that
<PAGE> 2
are subject to a stock option under the Plan and that have not been transferred
at the time such option is cancelled or terminated shall again be available for
options under the Plan.
4. Persons Eligible for Stock Options
Stock options shall be granted under the Plan only to persons who are
members of the Board and are not employees of the Company or any subsidiary
thereof ("Eligible Directors").
5. Grant of Stock Options
(a) Every option granted under the Plan shall be subject to the terms and
conditions set forth in the Plan, and shall be evidenced by an option agreement
which shall not be inconsistent with the provisions of the Plan.
(b) As of the date the Plan is adopted by the Board, an option to purchase
10,000 shares of Common Stock shall be granted to each individual who is then an
Eligible Director.
(c) As of the date of the initial election or appointment to the Board of
any other individual who satisfies the definition of Eligible Director, such
individual shall be granted an option to purchase 10,000 shares of Common Stock.
(d) As of the date of each annual meeting of the Company's shareholders
("Annual Meeting"), commencing with the Annual Meeting in 1999, each Eligible
Director (other than an Eligible Director who is then receiving an initial grant
pursuant to paragraph (c) of this Section 5) shall be granted an option to
purchase 10,000 shares of Common Stock, provided that the Eligi-
2
<PAGE> 3
ble Director has served as a director of the Company for at least nine months
prior to the date of such Annual Meeting and shall continue to serve as a
director of the Company after such Annual Meeting.
6. Terms of Stock Options
(a) The exercise price per share of Common Stock under each option shall
be equal to the "Fair Market Value" per share of Common Stock on the date of
option grant. For purposes of the Plan, the "Fair Market Value" of a share of
Common Stock on any day shall be as follows: (i) if the principal market for the
Common Stock (the "Market") is a national securities exchange or the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") National
Market, the last sale price or, if no reported sales take place on the
applicable date, the average of the high bid and low asked price of Common Stock
as reported for such Market on such date or, if no such quotation is made on
such date, on the next preceding day on which there were quotations, provided
that such quotations shall have been made within the ten (10) business days
preceding the applicable date; (ii) if the Market is the NASDAQ National List,
the NASDAQ Supplemental List or another market, the average of the high bid and
low asked price for Common Stock on the applicable date, or, if no such
quotations shall have been made on such date, on the next preceding day on which
there were quotations, provided that such quotations shall have been made within
the ten (10) business
3
<PAGE> 4
days preceding the applicable date; or, (iii) in the event that neither clause
(i) nor (ii) shall apply, the Fair Market Value of a share of Common Stock on
any day shall be determined in good faith by the Board.
(b) Each option granted under the Plan shall have a term of ten years, and
shall not be exercisable after the tenth anniversary of the date of grant.
(c) Each option granted under the Plan shall be fully exercisable upon
grant. An option may be exercised from time to time for all or part of the
shares as to which it is then exercisable (but, in any event, only for whole
shares).
7. Exercise of Options
(a) An option shall be exercised by the filing of a written notice with
the Company, on such form and in such manner as the Company shall prescribe,
accompanied by payment for the shares being purchased. Such payment shall be
made: (i) by certified or official bank check (or the equivalent thereof
acceptable to the Company) for the full option exercise price; or (ii) by
delivery of shares of Common Stock acquired at least six months prior to the
option exercise date and having a Fair Market Value (determined as of the
exercise date) equal to all or part of the option exercise price and a certified
or official bank check (or the equivalent thereof acceptable to the Company) for
any remaining portion of the full option exercise price.
4
<PAGE> 5
(b) Promptly after receiving payment of the full option exercise price,
the Company shall deliver to the Eligible Director, or to such other person as
may then have the right to exercise the option, a certificate for the shares of
Common Stock for which the option has been exercised.
(c) The holder of a stock option (or other person having the right to
exercise the option) shall have none of the rights of a shareholder of the
Company with respect to the shares subject to the option until the issuance of a
stock certificate to such person for such shares. Except as otherwise provided
in Section 9, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities or
other property) for which the record date is prior to the date such stock
certificate is issued.
8. Termination of Directorship
(a) If an optionee's membership on the Board terminates for any reason
other than death, the optionee may exercise any outstanding option to the extent
that the optionee was entitled to exercise it on the date of termination.
Exercise must occur within three months after termination, except that the
three-month period shall be increased to one year if the termination is by
reason of disability, but in no event after the expiration date of the option.
5
<PAGE> 6
(b) If an optionee dies while serving on the Board, or during the period
in which an option is exercisable pursuant to paragraph (a) of this Section 8,
any outstanding option shall be exercisable to the extent that the optionee was
entitled to exercise it on the date of death. Exercise must occur by the earlier
of the first anniversary of death or the expiration date of the option. Such
exercise shall be made only by the optionee's executor or administrator, unless
the optionee's will specifically disposes of the option, in which case exercise
shall be made only by the recipient of such specific disposition. If an
optionee's personal representative or the recipient of a specific disposition
under the optionee's will shall be entitled to exercise any award pursuant to
the preceding sentence, such representative or recipient shall be bound by all
the terms and conditions of the Plan and the applicable agreement which would
have applied to the optionee including, without limitation, the provisions of
Section 11 hereof.
(c) Upon expiration of the applicable three-month or one-year period
described in paragraph (a) or (b) of this Section 8, any unexercised option
shall be null and void.
9. Change in Capitalization
In the event of any change in the Common Stock by reason of a stock
dividend, recapitalization, reclassification, merger, consolidation, split-up,
combination, exchange of shares or the like, the Board shall appropriately
adjust the number and kind of
6
<PAGE> 7
shares authorized for issuance under the Plan and make such other adjustments as
it deems appropriate. The Board's determination as to what, if any, adjustments
shall be made shall be final, binding and conclusive on the Company and on all
Eligible Directors who receive option grants under the Plan.
10. Amendment of the Plan
(a) The Board may from time to time suspend, discontinue, revise or amend
the Plan in any respect whatsoever; provided, however, that no such amendment
shall impair any material rights or increase any material obligations under any
option theretofore granted under the Plan without the consent of the optionee
(or, after the optionee's death, the person having the right to exercise the
option). For purposes of this Section 10, any action of the Board that alters or
affects the tax treatment of any option shall not be considered to materially
impair any rights of any optionee.
(b) Shareholder approval shall be required with respect to any amendment
if the failure to obtain such approval would adversely affect the compliance
of the Plan with the requirements of any applicable law, rule or regulation.
11. Restrictions
(a) If the Board shall at any time determine that any Consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any option under the Plan, the issuance or
purchase of shares or other
7
<PAGE> 8
rights thereunder, or the taking of any other action thereunder (each such
action being hereinafter referred to as a "Plan Action"), then such Plan Action
shall not be taken, in whole or in part, unless and until such Consent shall
have been effected or obtained to the full satisfaction of the Board.
(b) The term "Consent" as used herein with respect to any Plan Action
means (i) any and all listings, registrations or qualifications in respect
thereof upon any securities exchange or under any federal, state or local law,
rule or regulation, (ii) any and all written agreements and representations by
the optionee with respect to the disposition of shares, or with respect to any
other matter, which the Board shall deem necessary or desirable to comply with
the terms of any such listing, registration or qualification or to obtain an
exemption from the requirement that any such listing, qualification or
registration be made and (iii) any and all consents, clearances and approvals in
respect of a Plan Action by any governmental or other regulatory bodies.
12. Nonassignability
No award or right granted to any person under the Plan shall be assignable
or transferable other than by will or by the laws of descent and distribution,
and all such awards and rights shall be exercisable during the life of the
grantee only by the grantee or the grantee's legal representative.
8
<PAGE> 9
13. No Right to Re-election
Nothing in the Plan shall be deemed to create any obligation on the part
of the Board to nominate any of its members for re-election by the Company's
shareholders, nor confer upon any Eligible Director the right to remain a member
of the Board for any period of time at any particular rate of compensation.
14. No Limitation on Corporate Actions
This Plan shall not affect in any way the right or power of the Company or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock
or of options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into or exchangeable
for Common Stock, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
15. Section Headings
The section headings contained herein are for the purpose of convenience
only and are not intended to define or limit the contents of the sections.
9
<PAGE> 10
16. Effective Date and Term of Plan
The Plan was adopted by the Board on February 19, 1998 and approved by the
Company's shareholders on February 25, 1998. Unless sooner terminated by the
Board, the Plan shall terminate on the date when no more shares are available
for transfer under the Plan. Options outstanding upon Plan termination shall
continue in effect in accordance with their terms.
17. Governing Law
All rights and obligations under the Plan shall be construed and
interpreted in accordance with the laws of the State of New York, without giving
effect to principles of conflict of laws.
10
<PAGE> 1
Exhibit 10.5
MOBIUS MANAGEMENT SYSTEMS, INC.
1998 EXECUTIVE INCENTIVE PLAN
1. Purpose
The purpose of the Mobius Management Systems, Inc. Executive Incentive
Plan (the "Plan") is to enable Mobius Management Systems, Inc. (the "Company")
to attract, retain, motivate and reward executives and key employees of
outstanding quality by providing them with the opportunity to earn incentive
compensation linked to Company performance.
2. Administration and Interpretation
(a) The Plan shall be administered by the Compensation Committee (the
"Committee") of the board of directors of the Company (the "Board"), which shall
consist of not less than two directors appointed by the Board. The Committee is
authorized to construe, interpret and implement the Plan, and to adopt such
rules and regulations relating to the Plan as it may deem necessary or
advisable. The determination of the Committee on all matters relating to the
Plan shall be final, binding and conclusive.
(b) The Committee may, but need not, from time to time delegate some or
all of its authority to one or more members of the Committee or one or more
officers of the Company. Any such delegation shall be subject to the
restrictions and limits the Committee specifies at the time of such delegation
or thereafter, and may be rescinded by the Committee at any time.
<PAGE> 2
3. Participation
Participation in the Plan during any Performance Period (as defined in
Section 4) shall be limited to those executives and key employees
("Participants") of the Company and its subsidiaries who, in the opinion of the
Committee, are in a position to have a significant impact on the performance of
the Company and who are selected by the Committee.
4. Incentive Awards
The Committee may authorize awards to Participants pursuant to
either of the following methods:
(a) For each fiscal year of the Company or such other period as may
be designated by the Committee ("Performance Period"), the Committee may
establish the performance goal or goals that must be satisfied in order for a
Participant to receive a bonus for the Performance Period and the amount of the
bonus a Participant may earn. Each such performance goal will be related to any
of the following criteria, as determined by the Committee: net earnings,
operating earnings or income, earnings per share, cash flow, absolute and/or
relative return on equity or assets, pre-tax profits, earnings growth, revenue
growth, comparison to peer companies, any combination of the foregoing or such
other appropriate measures of performance, including individual measures of
performance, as the Committee deems appropriate. The Committee may provide that
the bonus amount a Participant may earn for a Performance Period will vary based
upon different levels of achievement of the applicable performance goals.
-2-
<PAGE> 3
(b) A discretionary bonus in an amount as the Committee in its
discretion may determine.
5. Payment
Following the completion of each Performance Period, the Committee shall
determine whether the applicable performance goals have been achieved for such
Performance Period and the bonus amounts, if any, payable to Participants for
such Performance Period. In determining the bonus amount earned by a Participant
for a given Performance Period, the Committee shall have the right to reduce or
increase the bonus amount payable at a given level of performance to take into
account additional factors the Committee may deem relevant to the assessment of
individual or corporate performance for the Performance Period (including,
without limitation, extraordinary organizational, operational or other changes
that have occurred during such Performance Period). The Committee shall also
determine whether discretionary bonuses shall be awarded. Each award under the
Plan shall be paid in cash promptly after the amount of the award has been
determined.
6. Termination of Employment
If a Participant's employment with the Company and its subsidiaries
terminates during a Performance Period for any reason other than death,
disability, retirement or with the approval of the Committee, his or her
participation in the Plan for such Performance Period will terminate forthwith
and he or she will not be entitled to any award for such Performance
-3-
<PAGE> 4
Period. If, during a Performance Period, a Participant's employment terminates
by reason of death, disability, retirement or with the approval of the Committee
(or if a Participant commences participation in the Plan after the beginning of
a Performance Period), the Participant shall receive a pro rata payment based on
the number of days of his or her participation in the Plan during such
Performance Period.
7. No Rights to Awards or Employment
No Participant shall have any claim or right to receive awards under the
Plan. Nothing in the Plan shall confer upon any employee of the Company any
right to continued employment with the Company or interfere in any way the right
of the Company to terminate the employment of any of its employees at any time,
with or without cause.
8. Nonassignability
No Participant shall have the power or right to sell, transfer, assign,
pledge or otherwise encumber or dispose of the Participant's interest under the
Plan.
9. Unfunded Plan
The Plan is intended to constitute an unfunded plan for incentive
compensation. Prior to the payment of any award, nothing contained herein shall
give any Participant any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created
-4-
<PAGE> 5
under the Plan to deliver payment with respect to awards hereunder.
10. Tax Withholding
No later than the date as of which an amount first becomes includable in
the gross income of the Participant for applicable income tax purposes with
respect to any award under the Plan, the Participant shall pay to the Company or
make arrangements satisfactory to the Committee regarding the payment of any
federal, state or local taxes of any kind required by law to be withheld with
respect to such amount.
11. Termination and Amendment
The Board or the Committee may at any time amend, suspend, discontinue or
terminate the Plan.
12. No Limitation on Corporate Actions
Nothing contained in the Plan shall be construed to prevent the Company or
any subsidiary from taking any corporate action which is deemed by it to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on any awards made under the Plan. No Participant or other person
shall have any claim against the Company or any subsidiary as a result of any
such action.
13. Severability
If any provision of this Plan is held unenforceable, the remainder of the
Plan shall continue in full force and effect without regard to such
unenforceable provision and shall be
-5-
<PAGE> 6
applied as though the unenforceable provision were not contained in the Plan.
14. Section Headings
The section headings contained herein are for the purpose of convenience
only and are not intended to define or limit the contents of the sections
reference and shall not affect the meaning of any of the provisions of the Plan.
15. Effective Date
The Plan shall be effective as of the date of its adoption by the Board.
16. Governing Law
All rights and obligations under the Plan shall be construed and
interpreted in accordance with the laws of the State of New York, without giving
effect to principles of conflict of laws.
-6-
<PAGE> 1
Exhibit 10.12
Mobius Management Systems, Inc.
One Ramada Plaza
New Rochelle, NY 10801
February 26, 1998
Mitchell Gross
3 Columbus Circle
Eastchester, NY 10709
Dear Mitch:
The undersigned Mobius Management Systems, Inc. ("the Company")
desires that you continue your employment with the Company in the capacities of
Chairman of the Board Chief Executive Officer and President, and you desire to
continue to be so employed by the Company, subject to the terms and conditions
set forth in this letter agreement ("Agreement"). As used in this Agreement, the
term the "Mobius Group" means and includes the Company and each of its
subsidiaries and affiliated companies and ventures from time to time.
Accordingly, in consideration of the mutual covenants hereinafter
set forth and intending to be legally bound, the Company and you hereby agree as
follows:
1. Employment; Term. The Company hereby employs you, and you hereby
accept such employment and agree to serve the Mobius Group, upon the terms and
conditions hereinafter set forth, for a term commencing on the consummation of
the initial public offering by the Company as presently contemplated (the "IPO")
and (unless sooner terminated as hereinafter provided) expiring on the third
anniversary of such date (such term of employment being hereinafter referred to
as "your term of employment").
2. Position; Conduct.
(a) During your term of employment, you will hold the titles
and offices of, and serve in the positions of, Chairman of the Board, Chief
Executive Officer and President of the Company. You shall report to the Board of
Directors of the Company (the "Board of Directors") and shall perform such
specific duties and services of a senior executive nature (including service as
an officer, director or equivalent position of any subsidiary, affiliated
company or venture of the Mobius Group,
<PAGE> 2
without additional compensation) as they shall reasonably request consistent
with your position.
(b) During your term of employment, you shall (i) devote your
full time and attention and best efforts to the business and affairs of the
Mobius Group and faithfully perform, to the best of your ability, all of your
duties and responsibilities; and (ii) abide by all applicable policies of the
Mobius Group from time to time in effect.
3. Salary; Additional Compensation; Perquisites and Benefits.
(a) During your term of employment, the Company will pay you a
base salary at an annual rate of not less than Two Hundred Thousand Dollars
($200,000), subject to annual review by the Compensation Committee of the Board
of Directors (the "Compensation Committee") and, in the discretion of such
Committee, increase from time to time. Such salary shall be paid in installments
in accordance with the Company's standard practice, but not less frequently than
monthly.
(b) For fiscal year 1998 and thereafter for each fiscal year
throughout your term of employment, you will be eligible to earn a bonus as
determined by the Board of Directors or an appropriate committee thereof based
upon actual performance as measured against goals set by the Board or such
committee.
(c) During your term of employment, you will participate, on
the same basis as heretofore, in all existing Company benefit programs
(including without limitation your existing disability insurance program) and
such other Company benefit programs as are from time to time made generally
available to other senior executives of the Mobius Group.
(d) The Company will reimburse you, in accordance with its
standard policies from time to time in effect, for such reasonable and necessary
vouchered out-of-pocket business expenses as may be incurred by you during your
term of employment in the performance of your duties and responsibilities under
this Agreement.
(e) You shall be entitled to a vacation period to be credited
and taken in accordance with Mobius Group policy from time to time in effect,
which in any event shall not be less than a total of four weeks per annum.
(f) The Company shall provide to you, or pay for the costs of
rental, insurance and maintenance and repairs of, an automobile for you, as
designated by you, provided that the costs
2
<PAGE> 3
to the Company for such rental, insurance and maintenance and repairs shall not
exceed $1,200 per month.
(g) You shall be eligible for stock option grants from time to
time pursuant to the Company's 1996 Stock Incentive Plan in accordance with the
terms and conditions thereof.
4. Termination.
(a) Your term of employment under this Agreement will
terminate at the Company's option upon a clear showing of Cause. As used herein,
the term "Cause" means (and shall be limited to):
(i) Any willful or intentional act or failure to act
involving fraud, theft or embezzlement affecting the
Mobius Group;
(ii) Conviction of (or a plea of nolo contendere to) an
offense which is a felony in the jurisdiction involved,
after exhaustion of all appeals; and
(iii) Your willful or intentional repeated failure
or refusal to perform or observe any of your
material duties, responsibilities or obliga-
tions set forth in, or as contemplated under,
this Agreement, continuing after written
warning, which results in a material adverse
effect on the Mobius Group, if such breach is
not cured within 30 days after notice thereof
to you by the Company.
(b) For purposes of this Section 4, no act, or failure to act,
on your part shall be deemed "willful" or "intentional" if done, or omitted to
be done, by you with reasonable belief that your action or omission was in the
best interests of the Mobius Group.
(c) The Company will provide you with a prompt hearing before
the Board of Directors (at which you may be accompanied by counsel) prior to any
termination for Cause hereunder.
(d) Your term of employment will terminate forthwith upon your
death or, at the Mobius Group's option, upon your Disability. As used herein the
term "Disability" means your inability to perform your duties and
responsibilities as contemplated under this Agreement for a period of more than
180 consecutive days, or for a period aggregating more than 240 days, whether or
not continuous, during any 360-day period, due to
3
<PAGE> 4
physical or mental incapacity or impairment. A determination of Disability will
be made by a physician satisfactory to both you and the Company; provided that
if you and the Company cannot agree as to a physician, then each will select a
physician and these two together will select a third physician, whose
determination as to Disability will be binding on you and the Company. You, your
legal representative or any adult member of your immediate family shall have the
right to present to the Company and such physician such information and
arguments on your behalf as you or they deem appropriate, including the opinion
of your personal physician. Should you become incapacitated, your employment
shall continue and all base salary and other compensation otherwise due to you
hereunder shall be continued through the date on which your employment is
terminated for Disability.
5. Severance.
(a) In the event that your term of employment is terminated
for Cause, or if you resign without Good Reason (as hereinafter defined), the
Company will pay to you an amount equal to your accrued but unpaid base salary
through the date of such termination.
(b) In the event that your term of employment is terminated
(other than upon your death or Disability) during your term of employment (i) by
the Company other than for Cause as provided herein or (ii) by you for Good
Reason, then the Company shall pay to you an amount equal to your accrued but
unpaid base salary and bonus through the date of such termination and shall also
(A) provide you with coverages substantially identical to those provided to you
immediately prior to such termination (including without limitation under its
medical, dental, long term disability and life insurance programs) for 12 months
following the date of such termination, and (B) pay to you, in substantially
equal monthly installments over the period from the date of such termination
until the first anniversary of such date, an aggregate amount equal to the
aggregate of (1) what your base salary would have been for said period (using
for such purpose the base salary rate in effect on the date of termination) plus
(2) your maximum bonus for such period, but not less than your highest annual
bonus during the preceding five years. In such event, the Company agrees that
your rights to continued medical coverage pursuant to Section 4980B of the
Internal Revenue Code of 1986, as amended (your "COBRA" rights) shall be deemed
to commence after the expiration of the 12-month period described in clause (A)
above. For the purpose of this Agreement, termination of employment hereunder by
you for "Good Reason" shall mean your termination of your employment upon notice
to the Company following assignment to you of duties inconsistent with your
position as described in Section 2(a) or your being removed from such position,
in either case without
4
<PAGE> 5
your consent, which termination shall be effective 30 days after prompt notice
of such circumstances by you to the Company, if such circumstances have not been
cured prior to such date.
(c) In the event that your term of employment is terminated on
account of your death or Disability, the Company will pay to you or your estate
an amount equal to your accrued but unpaid base salary and bonus through the
date of such termination and shall continue to make base salary payments to you
or your estate, at the rate in effect as of the date of your death or
Disability, for a period of twelve months from and after such date.
6. Confidential Information.
(a) The Mobius Group owns and has developed and compiled, and
will own, develop and compile, certain techniques and information which are
secret, proprietary and confidential, and which have great value to its business
(referred to in this Agreement, collectively, as "Confidential Information").
Confidential Information shall not in any event include information which (i)
was generally known or generally available to the public prior to its disclosure
to you; (ii) becomes generally known or generally available to the public
subsequent to disclosure to you through no wrongful act of any person or (iii)
which you are required to disclose by applicable law or regulation (provided
that you provide the Company with prior notice of the contemplated disclosure
and reasonably cooperate with the Company at the Company's expense in seeking a
protective order or other appropriate protection of such information).
(b) You acknowledge and agree that in the performance of your
duties hereunder the Mobius Group will from time to time disclose to you and
entrust you with Confidential Information. You also acknowledge and agree that
the unauthorized disclosure of Confidential Information, among other things, may
be prejudicial to the Mobius Group's interests and an improper disclosure of
trade secrets. You agree that you shall not, directly or indirectly, use, make
available, sell, disclose or otherwise communicate to any corporation,
partnership, individual or other third party, other than in the course of your
assigned duties and for the benefit of the Mobius Group, any Confidential
Information, either during your term of employment or for the three year period
thereafter; provided that in the event your employment is terminated by the
Company other than for Cause as provided above, such three year period shall be
reduced to two years.
(c) The provisions of this Section 6 shall survive the
termination of this Agreement and your term of employment.
5
<PAGE> 6
7. Restrictive Covenants.
(a) You acknowledge and agree (i) that the services to be
rendered by you for the Mobius Group are of a special, unique, extraordinary and
personal character, (ii) that you have and will continue to develop a personal
acquaintance and relationship with one or more of the Mobius Group's customers,
employees, suppliers and independent contractors, which may constitute the
Mobius Group's primary or only contact with such customers, employees, suppliers
and independent contractors, and (iii) that you will be uniquely identified by
customers, employees, suppliers and independent contractors with the Mobius
Group's products. Consequently, you agree that it is fair, reasonable and
necessary for the protection of the business, operations, assets and reputation
of the Mobius Group that you make the covenants contained in this Section 7.
(b) You agree that, during your term of employment and for a
period of two years thereafter, you shall not, directly or indirectly, own,
manage, operate, join, control, participate in, invest in or otherwise be
connected or associated with, including as an officer, director, employee,
partner, consultant, advisor, proprietor, trustee or investor, any Competing
Business worldwide; provided however that nothing contained in this Section 7(b)
shall prevent you from owning less than 2% of the voting stock of a publicly
held corporation for investment purposes and provided further that in the event
your employment is terminated by the Company other than for Cause as provided
above, such two year period shall be reduced to one year. For purposes of this
Section 7(b), the term "Competing Business" shall mean a business engaged in the
design and marketing of electronic document warehousing software and which
competes with the business then being operated by the Company (except where such
competition is de minimus).
(c) The provisions of this Section 7 shall survive the
termination of this Agreement and your term of employment.
8. Specific Performance. You acknowledge that the Company would
sustain irreparable injury in the event of a violation by you of any of the
provisions of Sections 6 or 7 hereof, and by reason thereof you consent and
agree that if you violate any of the provisions of said Sections 6 or 7, in
addition to any other remedies available, the Company shall be entitled to a
decree specifically enforcing such provisions, and shall be entitled to a
temporary and permanent injunction restraining you from committing or continuing
any such violation, from any arbitrator duly appointed in accordance with the
terms of this Agreement or any court of competent jurisdiction, without
6
<PAGE> 7
the necessity of proving actual damages, posting any bond, or seeking
arbitration in any forum.
9. Life Insurance. You agree that, during your term of employment,
the Mobius Group will have the right to obtain and maintain life insurance on
your life, at its expense, and for its benefit, subject to such aggregate
coverage limitation as you and the Company shall agree, your consent not to be
unreasonably withheld. You agree to cooperate fully with the Mobius Group in
obtaining such life insurance, to sign any necessary consents, applications and
other related forms or documents and to take any required medical examinations.
10. Withholding. The parties understand and agree that all payments
to be made by the Company pursuant to this Agreement shall be subject to all
applicable tax withholding obligations of the Company.
11. No Conflict. You represent and warrant that you are not party to
or subject to any agreement, contract, understanding, covenant, judgment or
decree or under any obligation, contractual or otherwise, in any way restricting
or adversely affecting your ability to act for the Mobius Group in all of the
respects contemplated hereby.
12. Notices. All notices required or permitted hereunder will be
given in writing by personal delivery; by confirmed facsimile transmission; by
express delivery via any reputable express courier service; or by registered or
certified mail, return receipt requested, postage prepaid, in each case
addressed to the parties at the respective addresses set forth above or at such
other address as may be designated in writing by either party to the other in
the manner set forth herein. Notices which are delivered personally, or by
courier as aforesaid, will be effective on the date of delivery. Notices
delivered by mail will be deemed effectively given upon the fifth calendar day
subsequent to the postmark date thereof.
13. Miscellaneous.
(a) The failure of either party at any time to require
performance by the other party of any provision hereunder will in no way affect
the right of that party thereafter to enforce the same, nor will it affect any
other party's right to enforce the same, or to enforce any of the other
provisions in this Agreement; nor will the waiver by either party of the breach
of any provision hereof be taken or held to be a waiver of any prior or
subsequent breach of such provision or as a waiver of the provision itself.
7
<PAGE> 8
(b) This Agreement is a personal contract calling for the
provision of unique services by you, and your rights and obligations hereunder
may not be sold, transferred, assigned, pledged or hypothecated by you. In the
event of any attempted assignment or transfer of rights hereunder by you
contrary to the provisions hereof (other than as may be required by law), the
Company will have no further liability for payments hereunder. The rights and
obligations of the Company hereunder will be binding upon and run in favor of
the successors and assigns of the Company.
(c) Each of the covenants and agreements set forth in this
Agreement are separate and independent covenants, each of which has been
separately bargained for and the parties hereto intend that the provisions of
each such covenant shall be enforced to the fullest extent permissible. Should
the whole or any part or provision of any such separate covenant be held or
declared invalid, such invalidity shall not in any way affect the validity of
any other such covenant or of any part or provision of the same covenant not
also held or declared invalid. If any covenant shall be found to be invalid but
would be valid if some part thereof were deleted or the period or area of
application reduced, then such covenant shall apply with such minimum
modification as may be necessary to make it valid and effective.
(d) This Agreement has been made and will be governed in all
respects by the laws of the State of New York applicable to contracts made and
to be wholly performed within such state and the parties hereby irrevocably
consent to the jurisdiction of the courts of the State of New York and federal
courts located therein for the purpose of enforcing this Agreement.
(e) Any controversy arising out of or relating to this
Agreement or the breach hereof shall be settled by arbitration in the City of
New York in accordance with the commercial arbitration rules then obtaining of
the American Arbitration Association and judgment upon the award rendered may be
entered in any court having jurisdiction thereof, except that in the event of
any controversy relating to any violation or alleged violation of any provision
of Section 6 or 7 hereof, the Company in its sole discretion shall be entitled
to seek injunctive relief from a court of competent jurisdiction without any
requirement to seek arbitration. The parties hereto agree that any arbitral
award may be enforced against the parties to an arbitration proceeding or their
assets wherever they may be found. In the event that (i) you make a claim
against the Company under this Agreement, (ii) the Company disputes such claim,
and (iii) you prevail with respect to such disputed claim, then the Company
shall reimburse you for your reasonable costs
8
<PAGE> 9
and expenses (including reasonable attorney's fees) incurred by you in pursuing
such disputed claim.
(f) This Agreement sets forth the entire understanding between
the parties as to the subject matter hereof and merges and supersedes all prior
agreements, commitments, representations, writings and discussions between the
parties with respect to that subject matter. This Agreement may be terminated,
altered, modified or changed only by a written instrument signed by both parties
hereto.
(g) The Section headings contained herein are for purposes of
convenience only and are not intended to define or list the contents of the
Sections.
(h) Notwithstanding any provision hereof to the contrary, this
Agreement and the provisions hereof shall only become effective on the
consummation of the IPO; if the IPO shall not have been consummated by June 30,
1998, this Agreement shall be deemed void, ab initio. The provisions of this
Agreement which by their terms call for performance subsequent to termination of
your term of employment hereunder, or of this Agreement, shall so survive such
termination.
9
<PAGE> 10
Please confirm your agreement with the foregoing by signing and
returning the enclosed copy of this letter, following which this will be a
legally binding agreement between us as of the date first written above.
Very truly yours,
Mobius Management Systems, Inc.
By:/s/ E. Kevin Dahill
--------------------------------
Name: E.Kevin Dahill
Title: Chief Financial
Officer
Accepted and Agreed:
/s/Mitchell Gross
- --------------------------------
Mitchell Gross
10
<PAGE> 11
EXHIBIT A
Addresses for Notice
If to Mobius Management Systems, Inc.:
To the Company's address set forth on the first page of this
Agreement, Attention: Board of Directors
If to You:
To your address set forth on the first page of this Agreement
11
<PAGE> 1
Exhibit 10.13
Mobius Management Systems, Inc.
One Ramada Plaza
New Rochelle, NY 10801
February 26, 1998
Joseph J. Albracht
40 West Elm Street, #2M
Greenwich, CT 06830
Dear Joseph:
The undersigned Mobius Management Systems, Inc. ("the Company")
desires that you continue your employment with the Company in the capacities of
Executive Vice President and Chief Operating Officer, and you desire to continue
to be so employed by the Company, subject to the terms and conditions set forth
in this letter agreement ("Agreement"). As used in this Agreement, the term the
"Mobius Group" means and includes the Company and each of its subsidiaries and
affiliated companies and ventures from time to time.
Accordingly, in consideration of the mutual covenants hereinafter
set forth and intending to be legally bound, the Company and you hereby agree as
follows:
1. Employment; Term. The Company hereby employs you, and you hereby
accept such employment and agree to serve the Mobius Group, upon the terms and
conditions hereinafter set forth, for a term commencing on the consummation of
the initial public offering by the Company as presently contemplated (the "IPO")
and (unless sooner terminated as hereinafter provided) expiring on the third
anniversary of such date (such term of employment being hereinafter referred to
as "your term of employment").
2. Position; Conduct.
(a) During your term of employment, you will hold the titles
and offices of, and serve in the positions of, Executive Vice President and
Chief Operating Officer of the Company. You shall report to the Board of
Directors of the Company (the "Board of Directors") and shall perform such
specific duties and services of a senior executive nature (including service as
an officer, director or equivalent position of any subsidiary, affiliated
company or venture of the Mobius Group,
<PAGE> 2
without additional compensation) as they shall reasonably request consistent
with your position.
(b) During your term of employment, you shall (i) devote your
full time and attention and best efforts to the business and affairs of the
Mobius Group and faithfully perform, to the best of your ability, all of your
duties and responsibilities; and (ii) abide by all applicable policies of the
Mobius Group from time to time in effect.
3. Salary; Additional Compensation; Perquisites and Benefits.
(a) During your term of employment, the Company will pay you a
base salary at an annual rate of not less than Two Hundred Thousand Dollars
($200,000), subject to annual review by the Compensation Committee of the Board
of Directors (the "Compensation Committee") and, in the discretion of such
Committee, increase from time to time. Such salary shall be paid in installments
in accordance with the Company's standard practice, but not less frequently than
monthly.
(b) For fiscal year 1998 and thereafter for each fiscal year
throughout your term of employment, you will be eligible to earn a bonus as
determined by the Board of Directors or an appropriate committee thereof based
upon actual performance as measured against goals set by the Board or such
committee.
(c) During your term of employment, you will participate, on
the same basis as heretofore, in all existing Company benefit programs
(including without limitation your existing disability insurance program) and
such other Company benefit programs as are from time to time made generally
available to other senior executives of the Mobius Group.
(d) The Company will reimburse you, in accordance with its
standard policies from time to time in effect, for such reasonable and necessary
vouchered out-of-pocket business expenses as may be incurred by you during your
term of employment in the performance of your duties and responsibilities under
this Agreement.
(e) You shall be entitled to a vacation period to be credited
and taken in accordance with Mobius Group policy from time to time in effect,
which in any event shall not be less than a total of four weeks per annum.
(f) The Company shall provide to you, or pay for the costs of
rental, insurance and maintenance and repairs of, an automobile for you, as
designated by you, provided that the costs
2
<PAGE> 3
to the Company for such rental, insurance and maintenance and repairs shall not
exceed $1,200 per month.
(g) You shall be eligible for stock option grants from time to
time pursuant to the Company's 1996 Stock Incentive Plan in accordance with the
terms and conditions thereof.
4. Termination.
(a) Your term of employment under this Agreement will
terminate at the Company's option upon a clear showing of Cause. As used herein,
the term "Cause" means (and shall be limited to):
(i) Any willful or intentional act or failure to act
involving fraud, theft or embezzlement affecting the
Mobius Group;
(ii) Conviction of (or a plea of nolo contendere to) an
offense which is a felony in the jurisdiction involved,
after exhaustion of all appeals; and
(iii) Your willful or intentional repeated failure or refusal
to perform or observe any of your material duties,
responsibilities or obligations set forth in, or as
contemplated under, this Agreement, continuing after
written warning, which results in a material adverse
effect on the Mobius Group, if such breach is not cured
within 30 days after notice thereof to you by the
Company.
(b) For purposes of this Section 4, no act, or failure to act,
on your part shall be deemed "willful" or "intentional" if done, or omitted to
be done, by you with reasonable belief that your action or omission was in the
best interests of the Mobius Group.
(c) The Company will provide you with a prompt hearing before
the Board of Directors (at which you may be accompanied by counsel) prior to any
termination for Cause hereunder.
(d) Your term of employment will terminate forthwith upon your
death or, at the Mobius Group's option, upon your Disability. As used herein the
term "Disability" means your inability to perform your duties and
responsibilities as contemplated under this Agreement for a period of more than
180 consecutive days, or for a period aggregating more than 240 days, whether or
not continuous, during any 360-day period, due to
3
<PAGE> 4
physical or mental incapacity or impairment. A determination of Disability will
be made by a physician satisfactory to both you and the Company; provided that
if you and the Company cannot agree as to a physician, then each will select a
physician and these two together will select a third physician, whose
determination as to Disability will be binding on you and the Company. You, your
legal representative or any adult member of your immediate family shall have the
right to present to the Company and such physician such information and
arguments on your behalf as you or they deem appropriate, including the opinion
of your personal physician. Should you become incapacitated, your employment
shall continue and all base salary and other compensation otherwise due to you
hereunder shall be continued through the date on which your employment is
terminated for Disability.
5. Severance.
(a) In the event that your term of employment is terminated
for Cause, or if you resign without Good Reason (as hereinafter defined), the
Company will pay to you an amount equal to your accrued but unpaid base salary
through the date of such termination.
(b) In the event that your term of employment is terminated
(other than upon your death or Disability) during your term of employment (i) by
the Company other than for Cause as provided herein or (ii) by you for Good
Reason, then the Company shall pay to you an amount equal to your accrued but
unpaid base salary and bonus through the date of such termination and shall also
(A) provide you with coverages substantially identical to those provided to you
immediately prior to such termination (including without limitation under its
medical, dental, long term disability and life insurance programs) for 12 months
following the date of such termination, and (B) pay to you, in substantially
equal monthly installments over the period from the date of such termination
until the first anniversary of such date, an aggregate amount equal to the
aggregate of (1) what your base salary would have been for said period (using
for such purpose the base salary rate in effect on the date of termination) plus
(2) your maximum bonus for such period, but not less than your highest annual
bonus during the preceding five years. In such event, the Company agrees that
your rights to continued medical coverage pursuant to Section 4980B of the
Internal Revenue Code of 1986, as amended (your "COBRA" rights) shall be deemed
to commence after the expiration of the 12-month period described in clause (A)
above. For the purpose of this Agreement, termination of employment hereunder by
you for "Good Reason" shall mean your termination of your employment upon notice
to the Company following assignment to you of duties inconsistent with your
position as described in Section 2(a) or your being removed from such position,
in either case without
4
<PAGE> 5
your consent, which termination shall be effective 30 days after prompt notice
of such circumstances by you to the Company, if such circumstances have not been
cured prior to such date.
(c) In the event that your term of employment is terminated on
account of your death or Disability, the Company will pay to you or your estate
an amount equal to your accrued but unpaid base salary and bonus through the
date of such termination and shall continue to make base salary payments to you
or your estate, at the rate in effect as of the date of your death or
Disability, for a period of twelve months from and after such date.
6. Confidential Information.
(a) The Mobius Group owns and has developed and compiled, and
will own, develop and compile, certain techniques and information which are
secret, proprietary and confidential, and which have great value to its business
(referred to in this Agreement, collectively, as "Confidential Information").
Confidential Information shall not in any event include information which (i)
was generally known or generally available to the public prior to its disclosure
to you; (ii) becomes generally known or generally available to the public
subsequent to disclosure to you through no wrongful act of any person or (iii)
which you are required to disclose by applicable law or regulation (provided
that you provide the Company with prior notice of the contemplated disclosure
and reasonably cooperate with the Company at the Company's expense in seeking a
protective order or other appropriate protection of such information).
(b) You acknowledge and agree that in the performance of your
duties hereunder the Mobius Group will from time to time disclose to you and
entrust you with Confidential Information. You also acknowledge and agree that
the unauthorized disclosure of Confidential Information, among other things, may
be prejudicial to the Mobius Group's interests and an improper disclosure of
trade secrets. You agree that you shall not, directly or indirectly, use, make
available, sell, disclose or otherwise communicate to any corporation,
partnership, individual or other third party, other than in the course of your
assigned duties and for the benefit of the Mobius Group, any Confidential
Information, either during your term of employment or for the three year period
thereafter; provided that in the event your employment is terminated by the
Company other than for Cause as provided above, such three year period shall be
reduced to two years.
(c) The provisions of this Section 6 shall survive the
termination of this Agreement and your term of employment.
5
<PAGE> 6
7. Restrictive Covenants.
(a) You acknowledge and agree (i) that the services to be
rendered by you for the Mobius Group are of a special, unique, extraordinary and
personal character, (ii) that you have and will continue to develop a personal
acquaintance and relationship with one or more of the Mobius Group's customers,
employees, suppliers and independent contractors, which may constitute the
Mobius Group's primary or only contact with such customers, employees, suppliers
and independent contractors, and (iii) that you will be uniquely identified by
customers, employees, suppliers and independent contractors with the Mobius
Group's products. Consequently, you agree that it is fair, reasonable and
necessary for the protection of the business, operations, assets and reputation
of the Mobius Group that you make the covenants contained in this Section 7.
(b) You agree that, during your term of employment and for a
period of two years thereafter, you shall not, directly or indirectly, own,
manage, operate, join, control, participate in, invest in or otherwise be
connected or associated with, including as an officer, director, employee,
partner, consultant, advisor, proprietor, trustee or investor, any Competing
Business worldwide; provided however that nothing contained in this Section 7(b)
shall prevent you from owning less than 2% of the voting stock of a publicly
held corporation for investment purposes and provided further that in the event
your employment is terminated by the Company other than for Cause as provided
above, such two year period shall be reduced to one year. For purposes of this
Section 7(b), the term "Competing Business" shall mean a business engaged in the
design and marketing of electronic document warehousing software and which
competes with the business then being operated by the Company (except where such
competition is de minimus).
(c) The provisions of this Section 7 shall survive the
termination of this Agreement and your term of employment.
8. Specific Performance. You acknowledge that the Company would
sustain irreparable injury in the event of a violation by you of any of the
provisions of Sections 6 or 7 hereof, and by reason thereof you consent and
agree that if you violate any of the provisions of said Sections 6 or 7, in
addition to any other remedies available, the Company shall be entitled to a
decree specifically enforcing such provisions, and shall be entitled to a
temporary and permanent injunction restraining you from committing or continuing
any such violation, from any arbitrator duly appointed in accordance with the
terms of this Agreement or any court of competent jurisdiction, without
6
<PAGE> 7
the necessity of proving actual damages, posting any bond, or seeking
arbitration in any forum.
9. Life Insurance. You agree that, during your term of employment,
the Mobius Group will have the right to obtain and maintain life insurance on
your life, at its expense, and for its benefit, subject to such aggregate
coverage limitation as you and the Company shall agree, your consent not to be
unreasonably withheld. You agree to cooperate fully with the Mobius Group in
obtaining such life insurance, to sign any necessary consents, applications and
other related forms or documents and to take any required medical examinations.
10. Withholding. The parties understand and agree that all payments
to be made by the Company pursuant to this Agreement shall be subject to all
applicable tax withholding obligations of the Company.
11. No Conflict. You represent and warrant that you are not party to
or subject to any agreement, contract, understanding, covenant, judgment or
decree or under any obligation, contractual or otherwise, in any way restricting
or adversely affecting your ability to act for the Mobius Group in all of the
respects contemplated hereby.
12. Notices. All notices required or permitted hereunder will be
given in writing by personal delivery; by confirmed facsimile transmission; by
express delivery via any reputable express courier service; or by registered or
certified mail, return receipt requested, postage prepaid, in each case
addressed to the parties at the respective addresses set forth above or at such
other address as may be designated in writing by either party to the other in
the manner set forth herein. Notices which are delivered personally, or by
courier as aforesaid, will be effective on the date of delivery. Notices
delivered by mail will be deemed effectively given upon the fifth calendar day
subsequent to the postmark date thereof.
13. Miscellaneous.
(a) The failure of either party at any time to require
performance by the other party of any provision hereunder will in no way affect
the right of that party thereafter to enforce the same, nor will it affect any
other party's right to enforce the same, or to enforce any of the other
provisions in this Agreement; nor will the waiver by either party of the breach
of any provision hereof be taken or held to be a waiver of any prior or
subsequent breach of such provision or as a waiver of the provision itself.
7
<PAGE> 8
(b) This Agreement is a personal contract calling for the
provision of unique services by you, and your rights and obligations hereunder
may not be sold, transferred, assigned, pledged or hypothecated by you. In the
event of any attempted assignment or transfer of rights hereunder by you
contrary to the provisions hereof (other than as may be required by law), the
Company will have no further liability for payments hereunder. The rights and
obligations of the Company hereunder will be binding upon and run in favor of
the successors and assigns of the Company.
(c) Each of the covenants and agreements set forth in this
Agreement are separate and independent covenants, each of which has been
separately bargained for and the parties hereto intend that the provisions of
each such covenant shall be enforced to the fullest extent permissible. Should
the whole or any part or provision of any such separate covenant be held or
declared invalid, such invalidity shall not in any way affect the validity of
any other such covenant or of any part or provision of the same covenant not
also held or declared invalid. If any covenant shall be found to be invalid but
would be valid if some part thereof were deleted or the period or area of
application reduced, then such covenant shall apply with such minimum
modification as may be necessary to make it valid and effective.
(d) This Agreement has been made and will be governed in all
respects by the laws of the State of New York applicable to contracts made and
to be wholly performed within such state and the parties hereby irrevocably
consent to the jurisdiction of the courts of the State of New York and federal
courts located therein for the purpose of enforcing this Agreement.
(e) Any controversy arising out of or relating to this
Agreement or the breach hereof shall be settled by arbitration in the City of
New York in accordance with the commercial arbitration rules then obtaining of
the American Arbitration Association and judgment upon the award rendered may be
entered in any court having jurisdiction thereof, except that in the event of
any controversy relating to any violation or alleged violation of any provision
of Section 6 or 7 hereof, the Company in its sole discretion shall be entitled
to seek injunctive relief from a court of competent jurisdiction without any
requirement to seek arbitration. The parties hereto agree that any arbitral
award may be enforced against the parties to an arbitration proceeding or their
assets wherever they may be found. In the event that (i) you make a claim
against the Company under this Agreement, (ii) the Company disputes such claim,
and (iii) you prevail with respect to such disputed claim, then the Company
shall reimburse you for your reasonable costs
8
<PAGE> 9
and expenses (including reasonable attorney's fees) incurred by you in pursuing
such disputed claim.
(f) This Agreement sets forth the entire understanding between
the parties as to the subject matter hereof and merges and supersedes all prior
agreements, commitments, representations, writings and discussions between the
parties with respect to that subject matter. This Agreement may be terminated,
altered, modified or changed only by a written instrument signed by both parties
hereto.
(g) The Section headings contained herein are for purposes of
convenience only and are not intended to define or list the contents of the
Sections.
(h) Notwithstanding any provision hereof to the contrary, this
Agreement and the provisions hereof shall only become effective on the
consummation of the IPO; if the IPO shall not have been consummated by June 30,
1998, this Agreement shall be deemed void, ab initio. The provisions of this
Agreement which by their terms call for performance subsequent to termination of
your term of employment hereunder, or of this Agreement, shall so survive such
termination.
9
<PAGE> 10
Please confirm your agreement with the foregoing by signing and
returning the enclosed copy of this letter, following which this will be a
legally binding agreement between us as of the date first written above.
Very truly yours,
Mobius Management Systems, Inc.
By:/s/E. Kevin Dahill
--------------------------------
Name: E. Kevin Dahill
Title:Chief Financial Officer
Accepted and Agreed:
/s/ Joseph J. Albracht
- ------------------------------
Joseph J. Albracht
10
<PAGE> 11
EXHIBIT A
Addresses for Notice
If to Mobius Management Systems, Inc.:
To the Company's address set forth on the first page of this
Agreement, Attention: Board of Directors
If to You:
To your address set forth on the first page of this Agreement
11
<PAGE> 1
Exhibit 10.19
CONFIDENTIAL TREATMENT REQUESTED
SOFTWARE ASSETS PURCHASE AGREEMENT
dated as of December 10, 1990
among MOBIUS MANAGEMENT SYSTEMS, INC.,
COMPUCEPT OF NEVADA,
and
SOFTWARE ASSIST CORPORATION
<PAGE> 2
TABLE OF CONTENTS
1. Definitions............................................................1
2. Sale and Purchase of the Assets........................................4
3. Delivery of the Software Product; Acceptance..........................20
3.1 Release 0.5 Progress Reports and
Periodic Deliverables.................................................20
3.2 Release 0.5 Acceptance Test.....................................21
3.3 Correction of Release 0.5 Noncompliances........................23
3.4 Release 1.0 Progress Reports and
Periodic Deliverables.................................................25
3.5 Release 1.0 Acceptance Test.....................................26
3.6 Correction of Release 1.0 Noncompliances........................28
3.7 Beta Testing....................................................29
3.8 Acceptance Test Liability.......................................29
4. Consideration.........................................................30
5. Indemnification and Setoff............................................34
6. Cooperation; Consulting...............................................37
7. Transfer of Files and Sales Materials.................................39
8. Representations, Warranties,
Covenants and Agreements..............................................39
(a) Of the Sellers to Mobius........................................39
(b) Of Mobius to Sellers............................................41
9. Proprietary Information...............................................44
10. Noncompetition........................................................46
11. Miscellaneous.........................................................48
<PAGE> 3
SCHEDULE A
SCHEDULE B
EXHIBIT 1
<PAGE> 4
CONFIDENTIAL TREATMENT REQUESTED
SOFTWARE ASSETS PURCHASE AGREEMENT
AGREEMENT made as of the 10th day of December, 1990 among MOBIUS
MANAGEMENT SYSTEMS, INC. ("Mobius"), a New York corporation with offices at One
Ramada Plaza, 10th Floor, New Rochelle, New York 10801, COMPUCEPT OF NEVADA
("Compucept"), a Nevada corporation with offices at 930 Tahoe Boulevard, Call
Box 14-223, Incline, Nevada 89450, Software Assist Corporation ("SAC"), a
Delaware corporation with offices at 1072 Saratoga-Sunnyvale Rd., Suite 376,
San Jose, California 95129 (Compucept and SAC hereinafter sometimes individually
referred to as "Seller" and collectively referred to as the "Sellers").
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:
1. Definitions.
"Assets" shall mean the Software Product, the User's Guide (defined
below), the System Documentation (defined below), all trade secrets, proprietary
information, copyrights, trademarks and patents (if any), sales and marketing
literature and information and materials (including customer lists), and all
documentation (including user manuals, source code, object code and other
related technical documentation and materials) in
1
<PAGE> 5
connection therewith, and all work completed to date or in progress on updated
versions of any of the above (hereinafter collectively the "Work In Progress").
"Noncompliance" shall mean performance which does not comply in all
substantial respects with the Software Product's specifications set forth in the
User's Guide or the System Documentation.
"Release 0.5 Software Acceptance Date" shall have the meaning set forth in
Section 3.2 of this Agreement.
"Release 1.0 Software Acceptance Date" shall have the meaning set forth in
Section 3.5 of this Agreement.
"Shared Code" shall mean the portions of the Software Product programs
which are set forth on Schedule A hereto. The Sellers may add to the list of
Shared Code on Schedule A any additional portions of the Software Product
programs which are generic, provided that Mobius shall have given its prior
written consent to each such addition. Once any portion of the Software Product
programs has been deemed Shared Code pursuant to and in accordance with this
Agreement, it shall not thereafter be deemed not to be Shared Code. No portion
of the Software Product programs shall be eligible to be added as Shared Code
after the Release 1.0 Acceptance Date.
2
<PAGE> 6
"Software Product" shall mean: (1) the computer software programs in
object and source code form which shall perform in accordance with the
specifications set forth in the User's Guide and the System Documentation, (2)
the System Documentation, and (3) the User's Guide. The Software Product will be
divided into Release 0.5 and Release 1.0.
"Software Product License Revenue" shall mean all revenues (or the
monetary equivalent of any non-monetary compensation) received by Mobius from
the Software Product licenses.
"Software Product Maintenance Revenue" shall mean the maintenance fees,
support revenue and revenue with respect to licenses for updates or future
releases of the Software Product received by Mobius with respect to the Software
Product, specified in each Software Product maintenance agreement or other
agreement, as applicable, which are received by Mobius.
"System Documentation" shall mean all documentation and materials which
are necessary for a reasonably talented and experienced development systems
programmer to maintain, enhance and otherwise support the software contained in
the Software Product.
"TapeSaver Development Costs" shall mean Mobius' out of pocket expenses
for third party service bureau connect time charges, communication costs, CPU
time charges, and any other
3
<PAGE> 7
expenses agreed to in writing among Mobius and the Sellers. Notwithstanding
anything to the contrary in this Agreement, Mobius shall have no obligation or
liability with respect to any TapeSaver Development Costs, the average of which
per month during any two consecutive months exceeds * ("Excess TapeSaver
Development Costs").
"User's Guide" shall mean the operator and user manuals, training
materials, guides, listings, specifications, and other materials, for use in
conjunction with the computer software programs in object and source code form
contained in the Software Product, attached hereto as Exhibit 1, and as they may
be modified by the mutual written agreement of Mobius and the Sellers.
2. Sale and Purchase of Assets.
(a) Subject to Section 2(b) below, and based upon
representations and warranties herein contained, and the other terms and
provisions hereof, the Sellers hereby sell, transfer and assign to Mobius, all
of the Sellers' right, title and interest in and to the Assets, and Mobius
hereby purchases and accepts the transfer and assignment thereof from the
Sellers.
(b) In addition, based upon representations and warranties
herein contained, and the other terms and provisions
- -------- * The Redacted Material Has Been Filed Separately With the Commission.
4
<PAGE> 8
hereof, the Sellers hereby sell, transfer and assign to Mobius, subject to
Section 2(c) below, a one-half undivided interest in all rights and title to the
Shared Code and to all copyrights and all other intellectual property rights in
the Shared Code, and Mobius hereby purchases and accepts the transfer and
assignment thereof from the Sellers.
(c) Without affecting any rights of Mobius or Sellers contained in
this Agreement (or any of their assignees of this Agreement in full in
accordance with Section 11 below), the Shared Code "Owners" (as defined below)
will share equal and undivided ownership of all rights, title and interest
("Partial Ownership") to all copyrights and all other intellectual property
rights in the Shared Code, which are recognized under the U.S. Copyright Act of
1976 (as it may be amended) and other intellectual property laws of the United
States and similar laws in effect in any other jurisdiction, as further provided
in this Section 2(c), as if each such Owner were a joint inventor and author of
the Shared Code. In addition, without affecting any obligations of Sellers and
Mobius (and any of their assignees of this Agreement in full in accordance with
Section 11 below), each such Owner shall have, for so long as the Owner retains
Partial Ownership of the Shared Code (and thereafter in accordance with the
express provisions of Section 2(c)(xiii) below) the obligations set forth in
this Section 2(c). For purposes of this Section 2(c), "Owners" means Sellers and
Mobius, and any direct
5
<PAGE> 9
or indirect assignee or other legal successor in interest to any of them of a
partial interest in all of Mobius' or Sellers' rights and title in each of the
copyrights and all other intellectual property in the Shared Code.
Notwithstanding anything in this Section 2(c) to the contrary, the terms of this
Section 2(c) shall be subject, in all respects, to the other provisions of this
Agreement, including, without limitation, Sections 5, 8, 9 and 10 of this
Agreement and neither the Sellers nor any third party shall have any title,
rights, or interest in the Software Product including all modifications thereto
(excluding the Shared Code) or any copyright or other intellectual property
therein which shall be exclusively and solely owned by Mobius.
(i) Commercial Use by an Owner. Any Owner ("Transacting
Owner") shall have the right to modify, have modified, create
of, have created derivative works of, reproduce, have reproduced, use, display
publicly in object code (machine readable) format only and distribute the Shared
Code (collectively, "Commercial Rights") and to authorize third parties to
exercise Commercial Rights with respect to the Shared Code in accordance with
the following paragraph, subject to Sellers' obligations not to compete as set
forth in Section 10 below. Except with respect to the Software Product
(excluding the Shared Code) and any modifications thereto, all of which shall be
exclusively owned by Mobius, title to modifications or
6
<PAGE> 10
derivative works prepared by or for any such Transacting Owner and all
copyrights and other intellectual property therein will be owned by, and all
rights of title ownership will reside solely and exclusively in, such
Transacting Owner;
(ii) Licensing. Any Owner ("Licensing Owner") shall have the
right to grant nonexclusive licenses and to authorize sublicenses of Commercial
Rights (as defined in paragraph "(i)" above) with respect to the Shared Code,
and to grant exclusive licenses of any nature and scope with respect to any
derivative work of the Shared Code except with respect to the Software Product
(excluding the Shared Code) and any modifications thereto, all of which shall be
exclusively owned by Mobius, for any commercial purpose, subject to Sellers'
obligations not to compete as set forth in Section 10 below. The Licensing Owner
shall have the right to grant such licenses on terms and conditions determined
in the sole discretion of the Licensing Owner, subject to Sellers' obligations
not to compete as set forth in Section 10 below;
(iii) Owner Intellectual Property Claims Against Third
Parties.
(A) Right to Bring Claims. Any Owner ("Claimant Owner")
shall have the right, but not the obligation, to prosecute and otherwise bring
claims against past, present or future infringers of the Shared Code (e.g.
persons or entities
7
<PAGE> 11
which are not themselves Owners and which are not authorized by an Owner to
exercise Commercial Rights (as defined in paragraph "(i)" above). The Claimant
Owner shall notify in writing all other Owners of which the Claimant Owner has
received notice in accordance with paragraph "(ix)" below within sixty (60) days
after a claim is alleged in writing against an infringer or potential infringer
(e.g. by written notice to the infringer or the filing of suit for
infringement). The other Owners and each of them agree to provide nonmonetary
assistance and information reasonably requested by a Claimant Owner in
connection with any such potential infringement and the prosecution or
settlement of any claim or alleged claim of infringement of the Shared Code by a
third party, provided that the Owner, of whom such assistance or information is
requested, reasonably believes the claim to be a bona fide claim. Any other
Owner or Owners during the period of the infringement ("Additional Claimant
Owners") shall have a right to join in the claim under either of the following
circumstances: (x) upon written notice to the original Claimant Owner within
sixty (60) days after the Additional Claimant Owner is notified in writing by
the original Claimant Owner that the claim is alleged against the infringer or
potential infringer, or (y) upon being named involuntarily as a party in any
proceeding for the claim.
(B) Prosecution and Defense. Any such Additional
Claimant Owner shall have the right to participate,
8
<PAGE> 12
through legal counsel, in the prosecution and/or settlement of the claim and
defense of any counterclaims. The original Claimant Owner shall have the right
to control the prosecution and/or settlement of the claim and the defense of any
counterclaim; except that, an Additional Claimant Owner may elect, upon written
notice to all other Claimant Owners of which such Additional Claimant Owner has
received notice in accordance with paragraph "(ix)" below, to retain any rights
of control otherwise provided by law over such Additional Claimant Owner's
representation and other matters related to any counterclaims and crossclaims
which are either (x) made against such Additional Claimant Owner but which are
not made against the original Claimant Owner, or (y) the subject of a separate
or severable proceeding.
(C) Rights to Proceeds. The original Claimant Owner and
Additional Claimant Owners, if any, will share in the proceeds of any claim as
set forth below.
(X) Actual Damages Awarded. Actual damages awarded
to Claimant Owners in any proceeding for the claim will be allocated among
Claimant Owners corresponding to actual damages suffered by each Claimant Owner,
according to proof in the proceeding, less any deductions ordered in the
proceeding.
9
<PAGE> 13
(Y) Other Proceeds. All other damages and
compensation awarded to, and all other proceeds (including settlement proceeds)
resulting from the claim awarded to, or otherwise received by, Claimant Owners
will be allocated among Claimant Owners first, as compensation to each Claimant
Owner for reasonable and documented legal costs and expenses (including
reasonable attorneys' fees) payable on a current basis, which are incurred by
the individual Claimant Owner in connection with the claim (but excluding any
damages payable by a Claimant Owner and any such costs and expenses attributable
to any separate legal proceeding or the defense of any counterclaims which are
not made against all Claimant Owners) and second, to the extent of any remaining
balance, among Claimant Owners on a pro rata basis according to the number of
Claimant Owners. To the extent that such other damages and compensation awarded
to, and other proceeds received by, Claimant Owners is insufficient to
compensate them fully for legal costs and expenses, as described above, such
awards and other proceeds will be allocated among Claimant Owners on a
percentage basis according to such costs and expenses (payable on a current
basis) which they each incur individually as a fraction of aggregate costs and
expenses which they incur collectively.
(D) Liabilities. Each Claimant Owner shall bear all
damages awarded against such Claimant Owner as ordered in any proceeding for the
claim, without right of contribution by any other Claimant Owner, except with
respect to
10
<PAGE> 14
any cost for which Sellers are obligated to indemnify Mobius under this
Agreement;
(iv) Third Party Intellectual Property Claims Against
Owners. The Owners and each of them shall cooperate and lend nonmonetary
assistance, as reasonably requested by any of them ("Defendant Owner"), in
connection with any claim or related proceeding that the exercise of Commercial
Rights (as defined in paragraph "(i)" above) or with respect to the Shared Code,
whether or not incorporated in a derivative work thereof, infringes the
intellectual property rights of the claimant; except that, there shall be no
such obligation of cooperation or assistance to another Owner if the other Owner
is also the party asserting the claim. Subject to paragraph "(iii)" above and
except with respect to any cost for which Sellers are obligated to indemnify
Mobius under this Agreement, any Defendant Owner alone shall bear all costs and
expenses incurred by such Defendant Owner in connection with any such claim or
related proceeding. Without affecting any right or obligation of indemnification
among Sellers and Mobius provided elsewhere in this Agreement, promptly upon
receipt of any such claim, which the Defendant Owner reasonably believes is
likely to result in a judicial or other binding legal determination that the
Shared Code, or the exercise of Commercial Rights with respect thereto, in and
of itself, infringes a non-Owner's intellectual property, the Defendant Owner
shall notify promptly in writing all other
11
<PAGE> 15
Owners, of which the Defendant Owner has received notice in accordance with
paragraph "(ix)" below, of the claim. Any Owner shall have the right to
participate in any proceeding which may result in a binding determination that
the copyright in and to the Shared Code, in and of itself, is not valid or is
not enforceable, subject to the notice requirements of paragraph "(iii)" above;
(v) Registrations. Any Owner ("Registering Owner") shall
have the right to make, consistent with such Registering Owner's Partial
Ownership, filings and to seek registrations and other recordations of copyright
and other intellectual property rights in and to the Shared Code granted or
permitted by the laws of the United States and/or any other jurisdiction;
provided that, the Registering Owner shall notify any other Owners, of which
such Registering Owner has received notice in accordance with paragraph "(ix)"
below, in writing at least sixty (60) days in advance of the filing or
application for registration or recordation. Except as expressly agreed
otherwise in writing by any other Owner with respect to such other Owner's
copyright and other intellectual property title ownership, the Registering Owner
shall use diligent efforts to ensure that the collective and individual
ownership of copyright and other intellectual property title in the Shared Code
by all Owners, of which the Registering Owner has received notice in accordance
with paragraph "(ix)" below, are accurately reflected
12
<PAGE> 16
in the filing, registration or other recordation and applications therefor. Any
such filing, registration, other recordation or application therefor shall be
accompanied by a reproduction of the provisions of this Section 2(c) or
substantially similar provisions, as and to the extent permitted by applicable
law;
(vi) Proprietary Notices.
(A) Copyright Notices. Any Owner ("Noticing
Owner") which reproduces the Shared Code, in whole or in part, shall have the
right, as well as the obligation, to affix and apply to the Shared Code (whether
or not incorporated in a derivative work of the Shared Code), and all
reproductions thereof, and all packaging and documentation therefor, and to
require such Noticing Owner's licensees to so affix and apply, copyright notices
in the following form: "(c)[1991 or, if a derivative work, the year of
authorship] [name of Owner]. All rights reserved."
(B) Government Restricted Rights Legends. To the
extent that the Noticing Owner reasonably believes that the Shared Code may be
authorized for use by the U.S. Government in any jurisdictions, to the extent
consistent with any license to exercise Commercial Rights granted directly by
the Noticing Owner to the U.S. Government, the Noticing Owner shall also affix
and apply restricted rights legends, and shall use reasonable efforts to ensure
that the Noticing Owner's
13
<PAGE> 17
licensees do so, as permitted by and in any form prescribed by, any U.S.
Government statute or regulation.
(C) Other Proprietary Notices. In addition, any
such Noticing Owner shall have the right to affix and apply other proprietary
rights notices and legends consistent with this Section 2(c).
(D) Response to Inquiries. Any such Noticing Owner
shall use diligent efforts to respond, to the best of such Noticing Owner's
knowledge and in a reasonable manner, to any inquiry by a third party (including
without limitation any governmental entity) regarding copyright and any other
intellectual property ownership in the Shared Code;
(vii) Trademarks. Any Owner ("Trademarking Owner") shall
have the right to adopt, affix and apply to the Shared Code and any derivative
work thereof and documentation and packaging therefor, and to use in connection
with the promotion and marketing of the Shared Code and derivative works
thereof, trademarks and tradenames proprietary to such Trademarking Owner.
However, such Trademarking Owner shall not use trademarks or tradenames
proprietary to any other Owner, of which such Trademarking Owner is aware, or
which are confusingly similar to any trademarks or tradenames of any other Owner
of which such Trademarking Owner is aware, without the other Owner's prior
written consent. This paragraph is subject to Mobius' exclusive
14
<PAGE> 18
rights of ownership of the TapeSaver trademark and this Section 2(c) shall in no
way be interpreted as granting any right or interest in such trademark or any
other trademark or tradename included in the Assets to any third party;
(viii) Assignment Rights. Without affecting any right of
assignment of this Agreement provided among Sellers and Mobius elsewhere herein,
any Owner ("Assigning Owner") shall have the right to sell and assign to third
parties all or any part of such Assigning Owner's partial title ownership in
each of the copyrights and other intellectual property rights in the Shared
Code, subject to the following paragraph;
(ix) Assignment Obligations. In connection with any sale
and assignment of Partial Ownership by an Assigning Owner (as defined in the
preceding paragraph) to a third party ("Additional Owner") of such Assigning
Owner's ownership of title to each of the copyrights and other intellectual
property in the Shared Code (other than ownership in a derivative work) (i.e.
other than a mere grant of Commercial Rights), such Assigning Owner, other than
Mobius or Mobius' assignees if such assignment is in connection with an
assignment of this Agreement in full in accordance with Section 11 below, shall
obtain such Additional Owner's execution of a written agreement containing the
provisions of this Section 2(c) or substantially similar provisions and
including the Additional Owner's express written consent to be legally bound by
such provisions. In addition, the
15
<PAGE> 19
Assigning Owner shall use diligent efforts to cause such agreement to be legally
binding upon the Additional Owner for the benefit of all owners (including
future Additional Owners) of the Shared Code. Without limiting the foregoing,
any sale or assignment or other succession in ownership to title to each of the
copyrights or other intellectual property in the Shared Code other than Mobius
or Mobius' assignees if such assignment is in connection with an assignment of
this Agreement in full in accordance with Section 11 below shall be subject to
the obligations set forth in this Section 2(c). Any assignment or other transfer
or attempted transfer inconsistent with this paragraph may be voided by any
Owner effective upon thirty (30) days written notice to the purported Additional
Owner, describing the inconsistency in reasonable detail, unless the purported
Additional Owner executes and delivers to the Owner giving such notice, during
such notice period, the agreement described in this paragraph above;
(x) Warranty Disclaimers and New Versions. Subject to
Sellers' obligations under this Agreement, including, without limitation,
Sellers' Software Product maintenance obligations under Section 6 below to
Mobius and Mobius' assignees of this Agreement in full in accordance with
Section 11 below, in no event will Sellers, Mobius or any other Owners be
obligated to provide to any Additional Owners, as defined in paragraph "(ix)"
above, any bug fixes, error corrections, updates, upgrades,
16
<PAGE> 20
enhancements or other new versions of the Shared Code (except as the Owner to be
charged may otherwise agree in a signed writing). Except as provided to Mobius
(and any assignee of all of Mobius' rights and obligations under this Agreement
in accordance with Section 11 below) herein, SELLERS MAKE AND ADDITIONAL OWNERS
RECEIVE NO WARRANTIES WITH RESPECT TO THE SHARED CODE, EXPRESS, IMPLIED,
STATUTORY OR IN ANY COMMUNICATION AMONG SELLERS, MOBIUS AND ANY ADDITIONAL
OWNER; AND SELLERS HEREBY EXPRESSLY DISCLAIM TO ALL ADDITIONAL OWNERS THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Except as may otherwise expressly be agreed in a writing signed by Sellers or
with respect to any assignee of all of Mobius' rights and obligations under this
Agreement in accordance with Section 11 below, THE SHARED CODE IS CONVEYED TO
ADDITIONAL OWNERS "AS IS."
(xi) Encumbrances. Any Owner ("Encumbering Owner") shall
have the right to file or authorize filing with the United States Copyright
Office, any Office of the Secretary of State or other governmental agency of any
State of the United States, or any governmental agency of any other
jurisdiction, notices, financing statements, instruments and documents of
assignment, pledge or mortgage of the Shared Code as collateral, and similar
recordations of a security or similar interest, only with respect to the
Encumbering Owner's Partial Ownership of the copyrights and other intellectual
property in the Shared Code. However, the Encumbering Owner shall ensure that
any such filing
17
<PAGE> 21
shall be accompanied, for the benefit of all Owners, by a reproduction of the
provisions of this Section 2(c) or substantially similar provisions, to the
extent permitted by applicable law.
(xii) Accounting for Profits. Any Owner ("Compensated
Owner") shall have the sole and exclusive right and benefit of any compensation
and all consideration obtained by such Compensated Owner in connection with such
Compensated Owner's exercise of Commercial Rights (as defined in paragraph "(i)"
above, and assignment (in whole or in part) of such Owner's copyright and other
intellectual property title ownership in the Shared Code. Such Compensated Owner
shall have no obligation to account for, or to share with, any other Owner or
Owners, any such compensation or other consideration. All other Owners agree to
assign (including without limitation the execution of documents of assignment)
to the Compensated Owner, as reasonably requested by the Compensated Owner, all
such compensation or consideration obtained by the Compensated Owner in
connection with such exercise of Commercial Rights by the Compensated Owner.
Notwithstanding the foregoing, the provisions of this paragraph shall be, with
respect to Sellers and Mobius, subject to the payment provisions of Section 4
below.
(xiii) Confidentiality. Notwithstanding anything to the
contrary provided in this Section 2(c), the Additional Owners and each of them,
other than an assignee of this Agreement from Mobius in accordance with Section
11 below,
18
<PAGE> 22
("Receiving Owner") agrees not to permit the disclosure of the Shared Code in
source code (human readable) format or any information received from another
Owner ("Communicating Owner"), the delivery of which is required in connection
with the performance of the Communicating Owner's obligations under this Section
2(c), which is delivered in tangible form and conspicuously marked
"confidential" or with a similar designation, unless (A) the information is
known to the Receiving Owner at the time of initial delivery by the
Communicating Owner and is not subject to a prior obligation of confidentiality,
(B) the information or the source code, as the case may be, enters the public
domain not as a result of any action or inaction by the Receiving Owner, (C) the
source code is required to be submitted to a governmental agency in connection
with a recordation of copyright or other intellectual property or a related
property right, and then only to the extent of the minimum submission required,
(D) the information is independently developed by the Receiving Owner without
reference to information delivered by the Communicating Owner or (E) the
information is approved by the Communicating Owner in writing for disclosure to
third parties (but then only to the extent of such approval). Notwithstanding
the foregoing, the Receiving Owner may reproduce and use such information and
source code as necessary in order to make commercial use of the Shared Code in a
manner reasonably calculated to protect all Owners' individual and collective
proprietary rights in the information and the Shared Code. The
19
<PAGE> 23
obligations set forth in this paragraph shall survive transfer of the Receiving
Owner's entire Partial Ownership of the Shared Code for a period of five (5)
years after the date of such transfer.
(xvi) Further Assurances. The Owners agree to execute
all reasonable documents and to cooperate fully, as requested by any of them in
writing, in order to give force and effect to the Shared Code ownership rights
and obligations provided in this Section 2(c).
(d) The Sellers agree that: (i) under no circumstances
whatsoever does Mobius assume, with respect to third parties, any liability,
responsibility for, or obligation with respect to the Assets relating to Release
0.5 or any other matter or proceeding arising out of or relating thereto
occurring prior to the Release 0.5 Software Acceptance Date and (ii) under no
circumstances whatsoever does Mobius assume, with respect to third parties, any
liability, responsibility for, or obligation with respect to the Assets relating
to Release 1.0 or any other matter or proceeding arising out of or relating
thereto occurring prior to the Release 1.0 Software Acceptance Date.
3. Delivery of the Software Product; Acceptance.
3.1 Release 0.5 Progress Reports and Periodic Deliverables.
During the period commencing on the date hereof and ending on the Release 0.5
Software Acceptance Date, the Sellers shall deliver to Mobius not less
frequently than every 45
20
<PAGE> 24
days (i) a current draft of the User's Guide as revised in accordance with
Mobius' prior written consent, (ii) a current draft of the System Documentation
as revised in accordance with Mobius' prior written consent, and (iii) a
progress report signed by an authorized officer of each of the Sellers
(collectively, the "Periodic Deliverables"). Each progress report shall describe
the status of the Sellers' progress on Release 0.5, the progress expected to be
made in the next succeeding 45 day period, an anticipated date for delivery of
Release 0.5 to Mobius, proposed changes to the Shared Code list on Schedule A
and proposed changes to the Software Product which have been discovered or
created in the past 45 days. The proposed changes to the Software Product and
the Shared Code list are subject to the mutual written approval of the parties.
Upon request by an authorized officer of Mobius, Mobius shall have the right to
conduct a review of the progress of the Sellers in complying with this
Agreement; any such review may include, but need not be limited to, interviews
with any or all of the personnel of either Seller assigned to the activities
related to the Software Product and any such interview may be conducted at the
location where such personnel are assigned to work with reasonable notice and
during normal business hours.
3.2 Release 0.5 Acceptance Test. The Sellers will prepare and
deliver to Mobius, for quality assurance and acceptance testing, no later than
45 days from the date hereof,
21
<PAGE> 25
Release 0.5 and all related documentation, at a mutually agreed upon time during
work hours. Within 30 days of the Sellers' delivery to Mobius of Release 0.5
(the "Noncompliance Notice Period"), Mobius shall determine in its sole
discretion whether Release 0.5 has any Noncompliances and, also within such 30
day period, send the Sellers written notice of any Noncompliances (a "Release
0.5 Noncompliance Notice") or of acceptance of Release 0.5 (the "Release 0.5
Acceptance Certificate"). The Release 0.5 Software Acceptance Date shall be the
earliest to occur of: (i) the shipment (or other transmission) by Mobius of any
copy of the Software Product, to the extent it consists of executable software
code (regardless of stage of development), to any third party without the
written consent of Sellers, except: (1) the party acting as escrow agent
pursuant to Section 8(a)(vii) of this Agreement, (2) the third party service
bureau used by Mobius for acceptance testing of the Software Product and (3) if
such shipment is for the purpose of development and testing of the Software
Product by Sellers, (ii) the expiration of the Noncompliance Notice Period
without notice from Mobius, or (iii) Mobius' delivery to the Sellers of the
Release 0.5 Acceptance Certificate, whether or not pursuant to this paragraph
3.2 or paragraph 3.3 below.
If the Sellers fail to deliver Release 0.5 and all related
documentation to Mobius for quality assurance and acceptance testing by no later
than 45 days from the date hereof,
22
<PAGE> 26
Mobius, at its option, may, in addition to any other remedy provided under this
Agreement or by law, suspend all payments to the Sellers. Unless Mobius shall
have terminated this Agreement in the interim, Mobius shall upon the Sellers'
delivery to Mobius, for quality assurance and acceptance testing, of Release 0.5
and all related documentation, pay promptly to the Sellers all payments which
were suspended pending such delivery, provided, that in no event shall Mobius
have any liability or obligation to pay to the Sellers any such suspended
payments which exceed the sum of those payments due from Mobius hereunder during
the period commencing on the date hereof and ending seventy-five (75) days
later. The Sellers agree and acknowledge that Mobius' suspension of payments (if
in accordance with and pursuant to this Agreement) shall not in any way excuse
the Sellers from any of their obligations or liabilities under this Agreement.
3.3 Correction of Release 0.5 Noncompliances. Within 30 days
of Mobius giving a Release 0.5 Noncompliance Notice, the Sellers shall correct
all material Noncompliances in Release 0.5 and make all necessary changes to the
User's Guide and System Documentation and deliver to Mobius all such corrections
and changes. Mobius shall cooperate with the Sellers to the extent reasonable
and practicable in making such corrections. Within 30 days of such delivery,
Mobius shall determine in its sole discretion whether the corrected Release 0.5
has any
23
<PAGE> 27
Noncompliances and send the Sellers a Release 0.5 Noncompliance Notice or the
Release 0.5 Acceptance Certificate. Any failure by Mobius to respond within such
period shall be deemed acceptance. In the event Mobius notifies the Sellers of a
Noncompliance in the corrected Release 0.5, the parties shall repeat the testing
and Noncompliance correction procedures described in Sections 3.2 and 3.3 hereof
until Mobius provides the Sellers with the Release 0.5 Acceptance Certificate or
Release 0.5 is deemed accepted pursuant to the provisions of this Agreement.
Notwithstanding the foregoing, if by September 30, 1991 Release 0.5 is not
accepted or deemed accepted, the parties shall submit the existing dispute or
controversy, concerning Sellers' failure to deliver Release 0.5 free of
Noncompliances, to arbitration in accordance with Section 11(i) of this
Agreement.
Unless Release 0.5 is accepted (or deemed accepted) prior thereto,
if the Sellers fail to correct all material Noncompliances in Release 0.5
within 75 days of the date hereof, Mobius, at its option, may, in addition to
any other remedy provided under this Agreement or by law, suspend all payments
to the Sellers. Unless Mobius shall have terminated this Agreement in the
interim, upon Mobius' determination in its sole discretion that the Sellers have
delivered to Mobius a corrected Release 0.5 and all related documentation which
have no material Noncompliances, Mobius shall pay promptly to the Sellers all
payments which were suspended pending the correction of such
24
<PAGE> 28
Noncompliances, provided however, that in no event shall Mobius have any
liability or obligation to pay to the Sellers any such suspended payments which
exceed the amounts specified in Section 4(e). The Sellers agree and acknowledge
that Mobius' suspension of payments (if in accordance with and pursuant to this
Agreement) shall not in any way excuse the Sellers from any of their obligations
or liabilities under this Agreement.
3.4 Release 1.0 Progress Reports and Periodic Deliverables.
During the period commencing on the delivery date of Release 0.5 and ending on
the Release 1.0 Software Acceptance Date, the Sellers shall deliver to Mobius
not less frequently than every 45 days (i) a current draft of the User's Guide
as revised in accordance with Mobius' prior written consent, (ii) a current
draft of the System Documentation as revised in accordance with Mobius' prior
written consent, and (iii) a progress report signed by an authorized officer of
each of the Sellers (collectively, the "Periodic Deliverables"). Each progress
report shall describe the status of the Sellers' progress on Release 1.0, the
progress expected to be made in the next succeeding 45 day period, an
anticipated date for delivery of Release 1.0 to Mobius, proposed changes to the
Shared Code list on Schedule A and proposed changes to the Software Product
which have been discovered or created in the past 45 days. The proposed changes
to the Software Product and the Shared Code list are subject to the mutual
written approval of the parties. Upon
25
<PAGE> 29
request by an authorized officer of Mobius, Mobius shall have the right to
conduct a review of the progress of the Sellers in complying with this
Agreement; any such review may include, but need not be limited to, interviews
with any or all of the personnel of either Seller assigned to the activities
related to the Software Product and any such interview may be conducted at the
location where such personnel are assigned to work with reasonable notice and
during normal business hours.
3.5 Release 1.0 Acceptance Test. The Sellers will prepare and
deliver to Mobius, for quality assurance and acceptance testing, no later than
April 15, 1991, Release 1.0 and all related documentation, at a mutually agreed
upon time during work hours. Within 30 days of the Sellers' delivery to Mobius
of Release 1.0 (the "Noncompliance Notice Period"), Mobius shall determine in
its sole discretion whether Release 1.0 has any Noncompliances and, also
within such 30 day period, send the Sellers written notice of any Noncompliances
(a "Release 1.0 Noncompliance Notice") or of acceptance of Release 1.0 (the
"Release 1.0 Acceptance Certificate"). The Release 1.0 Software Acceptance Date
shall be the earliest to occur of: (i) the shipment (or other transmission) by
Mobius of any copy of the Software Product, to the extent it consists of
executable software code (regardless of stage of development) to any third
party, without the written consent of the Sellers, except: (1) the party acting
as escrow agent pursuant to Section
26
<PAGE> 30
8(a)(vii) of this Agreement, (2) the third party service bureau used by Mobius
for acceptance testing of the Software Product and (3) if such shipment is for
the purpose of development and testing of the Software Product by Sellers, (ii)
the expiration of the Noncompliance Notice Period without notice from Mobius, or
(iii) Mobius' delivery to the Sellers of the Release 1.0 Acceptance Certificate,
whether or not pursuant to this paragraph 3.5 or paragraph 3.6 below.
If the Sellers fail to deliver Release 1.0 and all related
documentation to Mobius for quality assurance and acceptance testing by no later
than April 15, 1991, Mobius, at its option, may, in addition to any other remedy
provided under this Agreement or by law, suspend all payments to the Sellers.
Unless Mobius shall have terminated this Agreement in the interim, Mobius shall
upon the Sellers' delivery to Mobius, for quality assurance and acceptance
testing, of Release 1.0 and all related documentation, pay promptly to the
Sellers all payments which were suspended pending such delivery, provided, that
in no event shall Mobius have any liability or obligation to pay to the Sellers
any such suspended payments which exceed the sum of those payments due from
Mobius hereunder during the period commencing on the date hereof and ending on
May 15, 1991. The Sellers agree and acknowledge that Mobius' suspension of
payments (if in accordance with and pursuant to this Agreement) shall not in any
27
<PAGE> 31
way excuse the Sellers from any of their obligations or liabilities under this
Agreement.
3.6 Correction of Release 1.0 Noncompliances. Within 30 days
of Mobius giving a Release 1.0 Noncompliance Notice, the Sellers shall correct
all material Noncompliances in the Software Product and make all necessary
changes to the User's Guide and System Documentation and deliver to Mobius all
such corrections and changes. Mobius shall cooperate with the Sellers to the
extent reasonable and practicable in making such corrections. Within 30 days of
such delivery, Mobius shall determine in its sole discretion whether the
corrected Release 1.0 has any Noncompliances and send the Sellers a Release 1.0
Noncompliance Notice or the Release 1.0 Acceptance Certificate. Any failure by
Mobius to respond within such period shall be deemed acceptance. In the event
Mobius notifies the Sellers of a Noncompliance in the corrected Release 1.0, the
parties shall repeat the testing and Noncompliance correction procedures
described in Sections 3.5 and 3.6 hereof until Mobius provides the Sellers with
the Release 1.0 Acceptance Certificate or Release 1.0 is deemed accepted
pursuant to the provisions of this Agreement.
Unless Release 1.0 is accepted (or deemed accepted) prior thereto,
if the Sellers fail to correct all material Noncompliances in Release 1.0
within 30 days of April 15, 1991, Mobius, at its option, may, in addition to any
other remedy provided under this Agreement or by law, suspend all payments to
28
<PAGE> 32
the Sellers. Unless Mobius shall have terminated this Agreement in the interim,
upon Mobius' determination in its sole discretion that the Sellers have
delivered to Mobius a corrected Release 1.0 and all related documentation which
have no material Noncompliances, Mobius shall pay promptly to the Sellers all
payments which were suspended pending the correction of such Noncompliances.
The Sellers agree and acknowledge that Mobius' suspension of payments (if in
accordance with and pursuant to this Agreement) shall not in any way excuse the
Sellers from any of their obligations or liabilities under this Agreement.
3.7 Beta Testing. Concurrently with Mobius' acceptance
testing, the Sellers shall conduct beta testing of Release 0.5 and Release 1.0
in two beta test locations. Beta testing will be performed at sites selected by
the Sellers; provided that each such beta test site licensee is subject to a
license agreement and nondisclosure agreement which Mobius and the Sellers shall
mutually agree are acceptable in form and substance. Furthermore, any beta test
site license or confidentiality agreement to which Mobius is not a party is
hereby assigned to Mobius and Mobius accepts such assignment, subject to Section
2(d) hereof. Prior to Release 1.0 Acceptance, Mobius shall provide, upon the
Sellers' request, two Software Product CPU licenses, for which license fees and
Sellers' associated Royalties shall be waived.
29
<PAGE> 33
3.8 Acceptance Test Liability. Notwithstanding any obligation
by Sellers to indemnify Mobius due to a breach of the warranties set forth in
Section 8(a) at item "(vi)", Mobius shall indemnify and hold harmless Sellers
from and against, and shall reimburse each of them on demand for, any and all
liability, damage, loss, reasonable cost and expense, including without
limitation, the fees and disbursements of counsel (collectively "Losses),
incurred in connection with, relating to or arising out of, any claim, action,
suit, proceeding, demand or assessment (collectively "claims") relating to
Software Product acceptance testing conducted by or for Mobius, which is
directly attributable to some action or inaction by Mobius during such testing
(e.g., Mobius' failure to back up data) and which is not directly attributable
to some action or inaction by Sellers during such testing; provided that Sellers
promptly notify Mobius in writing of any Claim for which indemnification is
sought, allows Mobius to select counsel (which counsel shall be reasonably
acceptable to Sellers) and control settlement of the Claim; and further
provided, however, that Sellers may control any settlement and/or litigation in
which they intervene at their own cost; and further provided that Mobius shall
have no obligations or liability under this Section 3.8 for Claims asserted
later than January 1, 1994.
30
<PAGE> 34
4. Consideration.
In consideration for entering into this transaction, Mobius shall
pay to the Sellers the following amounts, which shall in no event exceed
payments aggregating * :
(a) Contemporaneously with the execution of this Agreement,
Mobius shall deliver to each of the Sellers cash or a bank check payable to the
order of each Seller, as applicable, in the amount of * . Mobius shall pay by a
company check or cash to each of the Sellers an additional * on December 31,
1990 and thereafter on the last day of each month for the next eleven months,
and such eleven payments shall total * to each Seller. If any of the foregoing
payment dates is not a business day, Mobius shall make payment on the next
succeeding business day.
(b) Within thirty days following the end of each calendar
quarter (March 31, June 30, September 30, and December 31), Mobius shall pay to
each of the Sellers a royalty as follows: (i) in the event Mobius licenses the
Software Product to an end user, * of the Software Product License Revenue and *
of the Software Product Maintenance Revenue actually received by Mobius during
such calendar quarter; (ii) in the event Mobius licenses the Software Product
through an agent
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
31
<PAGE> 35
(excluding employees of Mobius), * of the Software Product License Revenue and *
of the Software Product Maintenance Revenue actually received by Mobius during
such calendar quarter; provided that, in the event that the Software Product is
licensed for use on more than one CPU pursuant to a single license agreement
(whether or not at a single "site"), the royalties payable to Sellers hereunder
shall be payable as follows: (x) with respect to the first CPU covered by the
license, Sellers shall be entitled to receive a royalty equal to * of the
Software Product License Revenue relating to such first CPU, unless the royalty
so calculated would result in a royalty of less than * , in which case the
royalty so owed shall be * ; (y) with respect to all other CPU's covered by such
license, Sellers shall be entitled to receive royalties calculated by
multiplying the royalty payable pursuant to (x) above times * .
(c) If a Software Product license or maintenance agreement is
cancelled or rescinded or the Software Product license or maintenance fees are
to be refunded to the Software Product licensee, and the Software Product
license requires that upon such rescission or cancellation that all copies of
the Software Product object code be returned or that the Software Product
licensee certify in writing that it has destroyed all such materials, Mobius'
payment obligations under paragraph (b)
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
32
<PAGE> 36
above shall be reduced by the amount of any royalty which would otherwise be
payable with respect to the refunded Software Product license or maintenance
fees. Mobius hereby covenants that all licenses of the Software Product shall
contain the covenant described in the preceding sentence. Sellers agree that the
form of license provision attached hereto as Schedule B contains a covenant
meeting the requirement of the preceding sentence. Notwithstanding anything in
this Agreement to the contrary, in the event Mobius has already paid the Sellers
a royalty with respect to such refunded fees, and such royalties either equal or
exceed * , the Sellers shall forthwith return to Mobius such royalty payments.
Notwithstanding anything in this Agreement to the contrary, Mobius shall have no
obligation to pay a royalty with respect to any Software Product license or
maintenance fee which is refunded.
(d) The * limit on the aggregate amount payable pursuant to
this Section 4 shall be calculated as follows. All payments made by Mobius
pursuant to paragraph (a) or (b) above shall be added to all TapeSaver
Development Costs which have been incurred. When the foregoing sum reaches * ,
Mobius shall have no further payment obligations under this Section 4.
(e) Notwithstanding anything to the contrary in Section 3.5,
3.6 or 4 of this Agreement, if the Sellers have not
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
33
<PAGE> 37
materially breached this Agreement (or if any such breach has not been cured
within 30 days of Mobius's notice to Sellers), other than by the failure of the
Release 1.0 Software Acceptance Date to occur, and if the Release 0.5 Software
Acceptance Date has occurred, then Mobius shall: (i) continue making installment
payments pursuant to Section 4(a) hereof until at least * is paid and (ii) pay
royalties pursuant to Section 4(b) hereof until * is paid; provided that, Mobius
shall have the right to reduce the payments in clauses (i) and (ii) of this
paragraph by the amount of all TapeSaver Development Costs and Excess TapeSaver
Development Costs and the foregoing shall in no way restrict any other Mobius
right of setoff; provided further, that Mobius' payment obligations under this
Agreement shall be limited to the sums mentioned in this paragraph until the
Release 1.0 Software Acceptance Date shall occur.
5. Indemnification and Setoff. (a) Subject to Section 5(b) below,
Compucept and SAC (the "Indemnifying Parties") shall indemnify and hold harmless
(which indemnification and hold harmless liability shall be joint and several or
merely several, depending on whether the applicable representation, warranty,
covenant or agreement giving rise to the indemnification and hold harmless
obligation was made or entered into by Sellers jointly and severally or merely
- --------
* The Redacted Material Has Been Separately Filed With the Commission.
34
<PAGE> 38
severally) Mobius and its affiliated companies, and all of their shareholders,
officers, directors, employees and agents (collectively, the "Indemnified
Parties"), from and against, and shall reimburse each of them on demand for, any
and all liability, damage, loss, reasonable cost and expense, including without
limitation, the fees and disbursements of counsel (collectively, "Losses"),
incurred in connection with, relating to or arising out of, any claim, action,
suit, proceeding, demand or assessment (collectively, "Claims") relating to (i)
the breach or alleged breach of any representation, warranty, covenant or
agreement made by Compucept or SAC in this Agreement or in any document,
certificate or instrument delivered by or on behalf of Compucept or SAC pursuant
hereto or in connection herewith, provided, however, that with respect to any
existing patent of which Sellers have no knowledge, Sellers' indemnity shall be
limited to one half of the losses relating to the infringement of such patent,
or (ii) Excess TapeSaver Development Costs; provided, that Mobius promptly
notifies Compucept or SAC in writing of any Claim for which indemnification is
sought, allows Compucept and SAC to select counsel (which counsel shall be
reasonably acceptable to Mobius) and control settlement of the Claim, provided,
however, that any settlement for which Mobius will not be fully indemnified
hereunder or that in any way limits or restricts its ability to use, license,
lease or sell the Assets or any part thereof is subject to the prior approval of
Mobius, and further provided, however, that Mobius may control
35
<PAGE> 39
any settlement and/or litigation in which it intervenes at its own cost.
(b) Except for Losses or Claims arising from or related to a
knowing or intentional violation of this Agreement or Excess TapeSaver
Development Costs, any other indemnification hereunder shall be limited to (i)
Claims asserted no later than January 1, 1994, except for Losses relating to a
violation of a third party copyright which shall be limited to Claims arising no
later than January 1, 1996, and (ii) Losses, that in the aggregate do not exceed
all moneys paid to the Sellers hereunder; provided, however, that Mobius shall
have the right to set off and deduct from monies payable in the future by Mobius
to Sellers any such indemnification liability that exceeds amounts actually paid
by Mobius to Sellers at the time the liability is finally determined. The
foregoing shall in no way limit the Sellers' obligations to provide immediate
cash refunds pursuant to Section 4(c) hereof.
(c) Notwithstanding anything contained herein, Mobius shall
have the right to withhold and set off any amounts due to the Sellers under
Section 4 hereof against any Losses suffered by Mobius for which it is entitled
to seek indemnification hereunder. In the event that Mobius asserts a right to
setoff, it shall deposit the amount withheld as a setoff in a segregated account
and shall notify the Sellers in writing of its intent to setoff and the basis
therefor. If, within thirty (30)
36
<PAGE> 40
calendar days of the date of such notice the Sellers have not responded in
writing to the setoff, then Mobius shall have the right to commence arbitration
proceedings in accordance with the provisions of this Agreement. If both of
Sellers have not responded within 45 days of such notice as aforesaid, Mobius
shall irrebuttably be entitled to such amount if any as not contested by either
Compucept or SAC in such response. Any objection raised in such response to a
setoff shall be resolved by arbitration in accordance with the provisions of
this Agreement.
6. Cooperation; Consulting. (a) Mobius agrees to reasonably
cooperate with the Sellers in the development and maintenance of the Software
Product. Notwithstanding the foregoing, in no event shall Mobius become subject
to any of the Sellers' obligations under this Agreement.
(b) The Sellers agree to use their commercially reasonable
efforts to assist Mobius in effecting the efficient transfer to, and assumption
by, Mobius of its rights and duties hereunder, as well as in reasonably
assisting Mobius in obtaining, and from time to time reasonably enforcing at
Mobius' expense (subject to the indemnification provisions hereof), contract,
trade secret, proprietary information, trademark, copyright, patent,
nondisclosure and all other rights and protections relating to the Assets in any
and all countries, and, to that end, to execute all documents reasonably
requested by
37
<PAGE> 41
Mobius to be executed by the Sellers in applying for, obtaining and enforcing
such rights and protections.
(c) The Sellers will provide reasonable consulting and support
services to Mobius, including five (5) full person-days of on-site support at
such location or locations within the continental United States as Mobius may
request, and will make available to Mobius such of the appropriate personnel and
facilities of the Sellers as may be reasonably necessary or useful for the
orderly transfer of the Assets and to provide such support. Additional
reasonable consulting and support shall be provided, without additional
consideration, including such reasonable classroom training, at a location
chosen by the Sellers, and ongoing telephone support (of employees of Mobius) in
connection with the Software Product as may be requested by Mobius during a
period commencing on the date hereof and ending on April 1, 1992.
(d) The Sellers will, until April 1, 1992, use their diligent
efforts to maintain the Software Product so that the Software Product performs
substantially in accordance with the specifications set forth in the User's
Guide and the System Documentation.
(e) The Sellers agree that, except as provided in this
Agreement with respect to Shared Code, all inventions, discoveries and
improvements specifically relating to the
38
<PAGE> 42
Software Product made by either Compucept or SAC or under either of their
direction pursuant to this Agreement and prior to the expiration of Sellers'
maintenance obligations under this Agreement ("Software Product Related
Inventions") shall be the sole and complete property of Mobius, and that any
patent or copyright, trade secret, trademark or other right relating to any
Software Product Related Inventions shall belong exclusively to Mobius.
(f) Mobius shall, subject to its reasonable business judgment,
assist Sellers by providing access to and use of computer facilities appropriate
to the development needs called for pursuant to this Agreement, and shall use
reasonable efforts to cooperate with Sellers in development and maintenance
until April 1, 1992 of the Software Product; provided, however, that the actual
development and maintenance until April 1, 1992 of the Software Product shall be
the responsibility of Sellers; and further provided, however, that nothing in
this Section shall be interpreted to obligate Mobius to incur any expenses other
than TapeSaver Development Costs or obligate Mobius to pay any Excess Tapesaver
Development Costs.
7. Transfer of Files and Sales Materials. The Sellers will transfer
to Mobius contemporaneously with the execution hereof all of Sellers' (a) files
and computer-stored information on prospective customers of the Software Product
and
39
<PAGE> 43
Noncompliances, including brochures, manuals, mechanicals, and proposed or
existing advertising copy.
8. Representations, Warranties, Covenants and Agreements. (a) Of the
Sellers to Mobius. The representations and warranties of the Sellers contained
in subsections (i) - (iv) hereunder shall be several and not joint. The
representations and warranties of the Sellers contained in subsections (v) - (x)
hereunder shall be joint and several. Subject in all respects to the foregoing,
Sellers represent to Mobius as follows: (i) Compucept is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada and SAC is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware; (ii) each of Compucept
and SAC has full corporate power, authority and legal right to execute, deliver,
perform and observe the provisions of this Agreement, and of all other
documents, agreements and instruments executed in connection herewith, or
relating hereto, and to carry out the transactions contemplated hereby and
thereby; (iii) (1) the execution, delivery and performance by each of Compucept
and SAC of this Agreement have been duly authorized by all necessary corporate
action, (2) the execution and delivery of this Agreement by each of Compucept
and SAC do not and will not require any registration with, consent or approval
of, notice to, or any action by, any person, (3) except as provided herein, the
performance of this
40
<PAGE> 44
Agreement by each of Compucept and SAC does not and will not require any
registration with, consent or approval of, notice to, or any action by any
person, and (4) this Agreement constitutes the legal, valid and binding
obligation of each of Compucept and SAC enforceable in accordance with its
terms, except as such enforceability may be limited by principles of equity or
by bankruptcy, insolvency, reorganization or similar laws; (iv) the Sellers have
good, valid and marketable title to all of the Assets, free and clear of any
security interests or other encumbrances whatsoever, and free of any claims with
respect thereto; (v) none of the Assets, the use or distribution of the Assets
by Mobius, or the use of the Software Product, in accordance with the User's
Guide or the System Documentation, by any customers to whom Mobius may license
the Assets or any portion thereof in the future (to the extent the infringement
does not arise as a result of an alteration made by Mobius or by a third party
for Mobius), infringes upon any third party's trademark or copyright, or any
such person's trade secrets, proprietary information, nondisclosure,
non-compete or contract rights, or to the best of Sellers' knowledge infringes
upon any third party's United States patents currently in existence (the Sellers
will fully cooperate with and assist Mobius in the defense of any infringement
claim concerning future patents) and each of Compucept and SAC has no notice of
any third-party that has asserted or threatened against either Compucept or SAC
any claim of such infringement; (vi) the Software Product will operate
substantially as set forth in the
41
<PAGE> 45
User's Guide and the System Documentation free from significant programming
errors; (vii) the source code, other than the Shared Code source code, delivered
to Mobius upon the acceptance of Release 0.5 and Release 1.0 is the only master
and/or backup or escrow copy thereof, and no other copies exist, except for: (1)
an escrow copy of each retained by an escrow agent appointed by Mobius, for
reference in case of future disputes, (2) one copy kept by the Sellers, for the
exclusive purpose of performing their maintenance obligations under this
Agreement and which shall be immediately delivered to Mobius upon the Sellers'
discharge of such obligations and (3) backup copies for the sole purpose to be
used in disaster recovery; (viii) neither SAC nor Compucept has granted any
distribution, agency, sub-licensing or similar rights to any person or entity
regarding the Assets; (ix) prior to the execution and delivery of this Agreement
the Sellers are the sole owners of the Assets and upon the execution and
delivery of this Agreement Mobius shall, except with respect to the Shared Code,
become the sole owner of the Assets; and (x) neither SAC nor Compucept has
utilized a broker or finder in connection with this transaction. The Sellers
each agree and acknowledge that their representations and warranties under this
Agreement shall survive the execution and delivery of this Agreement and Mobius'
acceptance of Release 0.5 and Release 1.0.
(b) Of Mobius to Sellers. Mobius hereby represents, covenants
and warrants that (i) Mobius is a corpo-
42
<PAGE> 46
ration duly incorporated, validly existing and in good standing under the laws
of the State of New York; (ii) Mobius has all power, authority and legal right
to execute, deliver, perform and observe the provisions of this Agreement, and
of all other documents and agreements executed in connection herewith, and to
carry out the transactions contemplated hereby and thereby; (iii) (1) the
execution, delivery and performance by Mobius of this Agreement have been duly
authorized by all necessary corporate action, (2) the execution and delivery of
this Agreement by Mobius do not and will not require any registration with,
consent or approval of, notice to, or any action by, any person, (3) except as
provided herein, the performance of this Agreement by Mobius does not and will
not require any registration with, consent or approval of, notice to, or any
action by any person, and (4) this Agreement constitutes the legal, valid and
binding obligation of Mobius enforceable against Mobius in accordance with its
terms, except as such enforceability may be limited by equitable principles or
by bankruptcy, insolvency, reorganization or similar laws; (iv) Mobius will use
commercially reasonable efforts to develop enhancements for the Software
Product, as it would for any of its other software products, at least until
April 1, 1996, (v) Mobius will use commercially reasonable efforts to market the
Software Product, at least until April 1, 1996, as it normally would for any of
its other software products, and (vi) Mobius will not develop or acquire a
software product that is functionally competitive with the Software
43
<PAGE> 47
Product, unless such development or acquisition occurs (A) after the later of
(I) April 1, 1996, or (II) the Sellers having been paid the maximum amount
payable under Section 4 hereof, or (B) pursuant to a merger or the acquisition
of all or substantially all of the stock or the operating assets of an existing
entity, in which event the entity surviving the transaction shall agree in
writing not to actively market such competing software during the time period
set forth in subsection (vi)(A), above.
EXCEPT FOR THE EXPRESS REPRESENTATION AND WARRANTIES BY THE PARTIES HEREIN, THE
WARRANTIES AND REPRESENTATIONS STATED WITHIN THIS AGREEMENT ARE EXCLUSIVE, AND
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
9. Proprietary Information. (a) Sellers severally and not jointly
represent, warrant and covenant to Mobius: (i) that, except for the disclosure
to Goal Systems International of the TapeSaver Product Overview Diskette,
neither of them has disclosed to any person or entity any confidential,
proprietary, trade secret or otherwise valuable information relating to the
Software Product, except to a party who has executed and delivered to the
Sellers a confidentiality and non-disclosure agreement, (ii) that except for
Shared Code in the manner as permitted for Additional Owners of the Shared Code
pursuant to and in accordance with Section 2(c)(xiii) above, neither of them
will, during the term of this Agreement and at least until April 1, 1996, take
any actions that would, directly or indirectly, cause a loss of the secrecy of
the Software Product and will
44
<PAGE> 48
treat any and all such information with at least the same degree of care as
Sellers treat their own confidential and proprietary information and (iii) that
except for Shared Code in the manner as permitted for Additional Owners of the
Shared Code pursuant to and in accordance with Section 2(c)(xiii) above, neither
of them will, during the term of this Agreement and at least until April 1,
1996, disclose to any person or entity any confidential or proprietary
information relating to the Software Product without Mobius' prior specific
written consent.
(b) Each party severally agrees that it will not, during or
after the term of this Agreement, permit the duplication or disclosure of any
confidential and proprietary information ("Confidential and Proprietary
Information") of the other emanating from the other's business in any form to
any person unless such duplication, use or disclosure is specifically authorized
by the other party in writing, except as required by law or any order of a court
or regulatory agency of competent jurisdiction. "Confidential and Proprietary
Information" is not meant to include any information which, at the time of
disclosure, (i) was in the receiving party's possession at the time of
disclosure as shown by the receiving party's files and records (as such files
and records existed prior to the time of disclosure), provided that such
information is not related to the Software Product or subject to a
confidentiality obligation under any other agreement between Mobius and either
or both of the Sellers; (ii) before or after it has been disclosed to the
45
<PAGE> 49
receiving party, it is or was part of the public knowledge or literature, but
not as a result of any action or inaction of the receiving party; or (iii) is or
was approved for release by written authorization of the disclosing party.
10. Noncompetition. Subject, in all cases relating to this Section
10 of this Agreement, to Section 2(b) of this Agreement, each of Compucept and
SAC acknowledges that the Assets being sold to and developed for Mobius hereby
include items of a special, unique, extraordinary and intellectual character,
the value of which would be significantly reduced or destroyed if either
Compucept or SAC were to compete with the business of Mobius, as it relates to
the Assets, in the markets served by the Assets. Compucept and SAC each
therefore severally covenants and agrees that, (1) until April 1, 1992 they will
not, directly or indirectly, solicit for employment or assist anyone else to
employ any person who is then or at any time during the preceding year was in
Mobius' employ and (2) until April 1, 1995 they will not, directly or indirectly
(whether by or through the actions of their officers or directors outside the
scope of their corporate offices or otherwise):
(a) attempt, in any manner, to solicit from any client (such
term as used throughout this Agreement having the meaning ascribed
to it below) of Mobius, business of the type performed by Mobius, as
it relates to the Assets, or to persuade any client of Mobius to
cease to do business or to reduce the amount of busi-
46
<PAGE> 50
ness which any client has customarily done or contemplates doing
with Mobius, as it relates to the Assets, whether or not the
relationship between Mobius and such client was originally
established in whole or in part through Compucept or SAC; or
(b) except as required under Section 6(d), offer or render any
Software Product maintenance services to any Software Product
client; or
(c) to the extent that any such activity is of the type and
character competitive with the business of Mobius, as it relates to
the Assets, conduct business within the United States, Canada or
Europe or control, manage, operate, or otherwise participate or
engage in business as, or own any interest in, or be connected in
any manner with, directly or indirectly, within the United States,
Canada or Europe, any Entity (as defined below), whether as a
partner, shareholder, joint venturer, finder, broker, trustee, or in
any other manner whatsoever; provided, however, that nothing
contained in this clause shall be deemed to prohibit Compucept or
SAC from owning less than 2% of the shares of a publicly held
corporation engaged in any such business.
As used in this Section 10, the term (i) "Entity" shall mean an individual,
proprietorship, partnership, corporation, joint
47
<PAGE> 51
venture, trust or any other form of business entity, engaged in business, within
any part of the United States, Canada or Europe, in which Mobius or its agents
then market or license any version of the Software Product; (ii) "client" shall
mean and include (A) anyone who is then a client or customer of Mobius, and (B)
any prospective client or customer known to Compucept or SAC, or such Entity to
whom Mobius had made a Software Product presentation (or similar offering of
services) within the one year period immediately preceding the contact by
Compucept or SAC or such Entity; and (iii) "Mobius" shall mean Mobius Management
Systems, Inc. and any Entity controlling, controlled by or under common control
with Mobius Management Systems, Inc.
Notwithstanding anything else contained in this Agreement to the
contrary, no officer, director or principal of either of the Sellers shall have
any personal liability for monetary damages for any breach of this Agreement,
and Mobius' recourse for monetary damages from any such breach shall be limited
to the assets (including the unpaid royalties owing from time to time under this
Agreement) of Sellers.
11. Miscellaneous.
(a) Unless otherwise expressly provided for in this Agreement,
all instances in this Agreement where reference is made to the requirement that
a party's consent be obtained shall be deemed to include the obligation on the
part of the
48
<PAGE> 52
party whose consent is sought that such consent not unreasonably be withheld.
(b) This Agreement shall be governed by the internal laws of
the State of New York applicable to contracts to be performed wholly therein,
without reference to principles of conflict of laws.
(c) Notwithstanding anything to the contrary in this
Agreement, all notices described in this Agreement shall be in writing and shall
be deemed to have been duly given at the earlier of receipt or five days after
having been mailed by first class, certified mail, return receipt requested,
postage prepaid, to the parties at their respective addresses set forth
hereinabove or such other addresses of which the parties may give notice in
accordance herewith. All notices to any Seller shall be sent to the other as
well.
A copy of all notices to any of the parties shall be delivered
simultaneously to respective counsel, as follows:
To Mobius: Kenneth P. Kopelman, Esq.
Kramer, Levin, Nessen, Kamin
& Frankel
919 Third Avenue
New York, NY 10022
To Compucept: Allen L. Morgan, Esq.
Wilson, Sonsini, Goodrich
and Rosati
2 Palo Alto Square
Suite 900
Palo Alto, CA 94306
To SAC: Deborah E. Robbins, Esq.
General Counsel Associates
49
<PAGE> 53
Fair Oaks Business Park
592 Weddell Drive
Suite 8
Sunnyvale, CA 94089
(d) This Agreement and the Schedules hereto, which shall for
all purposes be deemed a part hereof, set forth the entire understanding of the
parties with respect to the subject matter hereof, and supersede all prior oral
or written agreements and communications. No provision of this Agreement may be
waived or amended to modify the rights or obligations of any party to this
Agreement without the written consent of such party.
(e) No failure to exercise, and no delay in the exercise of
any rights, power or remedy by either party and no course of dealing between
them shall constitute a waiver of, or preclude any other further exercise of,
any right, power or remedy. All of the rights of the parties hereunder are
cumulative and may be exercised concurrently and separately, and the exercise of
any right does not exclude the exercise of any other right.
(f) In the event that any of the provisions of this Agreement
shall be held to be invalid, prohibited or unenforceable for any reason or if
any such provision shall be held to be invalid, prohibited or unenforceable for
any reason unless narrowed by construction, then this Agreement shall be
construed as if such invalid, prohibited or unenforceable provision was not a
part of this Agreement, or if capable of a
50
<PAGE> 54
narrow construction that it has been more narrowly drawn so as not to be
invalid, prohibited or unenforceable. Notwithstanding the foregoing, if any
court construes any of the provisions of this Agreement to be unenforceable
because of the duration of such provision or the area covered thereby, such
court shall have the power to reduce the duration or area of such provision and,
in its reduced form, such provisions shall then be enforceable and shall be
enforced. In the event that any of the provisions contained in this Agreement
should be determined to be invalid, prohibited or unenforceable, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
(g) This Agreement may be executed in counterparts, each of
which when so executed and delivered shall be an original hereof, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one counterpart hereof.
(h) The indemnification obligations provided for in Section 5
hereof and the provisions of Sections 9 and 10 hereof shall survive the
expiration or termination of this Agreement.
(i) Mobius shall cause to be kept books and records relating
to amounts received for the sale, lease, license and/or maintenance of the
Software Product, which books and records shall be made available to Compucept
or SAC or their
51
<PAGE> 55
agent at Mobius' offices during Mobius' normal business hours, upon the Sellers'
reasonable request, and the Sellers may at their own expense make copies of such
records relating to the Software Product.
(j) The parties hereto shall use commercially reasonable
efforts to resolve any controversy or dispute respecting this Agreement. If
within thirty (30) days of the date of the relevant notice or such other date as
such controversy may arise, no resolution of the dispute has been reached, any
party hereto may demand that such controversy be resolved in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then in
effect. Such arbitration shall take place in Chicago, before a mutually
acceptable arbitrator (or if the parties cannot agree upon a single arbitrator
then by a panel of three (3) arbitrators, one of whom shall be selected by each
of Mobius and the Sellers and the third of whom shall be selected by the two
arbitrators so selected), who shall have the power to order specific performance
and the decision of the arbitrator(s) shall be final, binding and unappealable.
Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof, and each of the parties hereto hereby consents to
the jurisdiction of the state and federal courts sitting in New York City for
such purpose, and agrees that service of process on it
52
<PAGE> 56
in any such action may be made by mailing or delivering the same in accordance
with the notice provisions hereof.
(k) None of the Sellers or Mobius shall assign this Agreement,
in whole or in part, or delegate, in whole or in part, any of their duties under
this Agreement, except upon the prior written consent of the Sellers (in the
case of Mobius) or Mobius (in the case of the Sellers); provided, however, that
Mobius shall be entitled to sell or assign its rights and delegate its
obligations under this Agreement in connection with and as a part of the sale of
all or substantially all of the assets or stock of the portion of its business
that primarily consists of the development, marketing, licensing and maintenance
of software products (which shall not be deemed to include Mobius's software
consulting business). All of the terms, conditions and provisions of this
Agreement shall be binding upon and inure to the benefit of the permitted
successors and permitted assigns of each of the parties hereto.
(l) The Sellers and Mobius each agrees and acknowledges that
money damages alone will not adequately compensate (i) Mobius for breach of any
of Compucept's or SAC's covenants and agreements in this Agreement or (ii)
Compucept or SAC for breach of any of Mobius' covenants and agreements in this
Agreement, and each agrees that in the case of any breach or threatened breach
of any such covenant or agreement, in addition to all other remedies available
to Mobius, Compucept or SAC at
53
<PAGE> 57
law, in equity or otherwise, Mobius, Compucept and SAC shall be entitled to
injunctive relief, compelling specific performance of, or other compliance with,
the terms of this Agreement.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, EXCEPT
WITH RESPECT TO OBLIGATIONS OF CONFIDENTIALITY, INTELLECTUAL PROPERTY
INFRINGEMENT INDEMNIFICATION, SELLERS' OBLIGATIONS AND LIABILITY UNDER SECTION
10 OF THIS AGREEMENT, SELLERS SHALL NOT BE LIABLE FOR ANY SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF
REVENUES AND LOSS OF PROFITS, AS A RESULT OF THE PERFORMANCE (OR FAILURE OF
PERFORMANCE) OF THE SOFTWARE PRODUCT. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
TO THE CONTRARY, MOBIUS SHALL NOT BE LIABLE FOR ANY SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF
REVENUES AND LOSS OF PROFITS. IN ADDITION, WITHOUT LIMITING THE FOREGOING, IN NO
EVENT WILL SELLERS BE LIABLE TO MOBIUS FOR ANY DAMAGES WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, DIRECT AND INDIRECT DAMAGES) RESULTING FROM ANY CONTRACTUAL
OBLIGATION FOR THE DELIVERY OR LICENSING OF RELEASE 0.5 AND RELEASE 1.0,
RESPECTIVELY BY MOBIUS TO ANY THIRD PARTIES, WHICH OBLIGATION IS ENTERED INTO
PRIOR TO ACCEPTANCE BY MOBIUS OF RELEASE O.5 AND RELEASE 1.0, RESPECTIVELY IN
ACCORDANCE WITH SECTIONS 3.2 AND 3.3 AND SECTIONS 3.4 AND 3.5, RESPECTIVELY.
(m) Each of the Sellers hereby agrees to cooperate with Mobius
and to execute and deliver such further instruments and documents as Mobius
shall request to effect the transactions contemplated hereby.
54
<PAGE> 58
IN WITNESS WHEREOF the parties have executed this Agreement as of
the date first written above.
MOBIUS MANAGEMENT SYSTEMS, INC.
By:/s/ Mitchell Gross
--------------------
Name: Mitchell Gross
Title: President
COMPUCEPT OF NEVADA
By:/s/ John F. Lema
------------------
Name: John F. Lema
Title: President
SOFTWARE ASSIST CORPORATION
By:/s/ D. Scott Meyers
---------------------
Name: D. Scott Meyers
Title: President
55
<PAGE> 59
SCHEDULE A
TapeSaver Shared Code List
The following CSECTS, and associated macros, are Compucept of Nevada Shared
Code:
ALLOC (dynamic allocation interface)
BLDSTMTS ( * )
CARDSCAN (control processing of input cards)
CNVVALUE ( * )
CVTDATA ( * )
ERRORMSG (process messages and associated error options)
EVALCOND (evaluate conditional expressions)
EXTSORT ( * )
FILTER (apply IF statements to data)
FMTVALUE ( * )
FRECHAIN ( * )
IFCARD (process IF cards into internal data structures)
PATCCARD ( * )
PRINT (print * report * )
RECOVERY (establish and perform abend recovery)
REPTCNTL ( * )
SEARCH (find/add data in memory)
SENDMSG (route text to selected output destinations)
SKELETON ( * )
SORT (sort internal data as requested by caller)
SYMSUBST ( * )
TESTTYPE ( * )
TOKENIZE (separate text into tokens)
TRACE (issue trace messages)
VARSRVCS ( * )
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 60
Schedule A
TapeSaver Shared Code List
The Software Assist Shared Code is shown below:
CLISTS:
TSMEXPAT - Maintenance - *
TSMNWPAT - Maintenance - *
TSMPATCH - Maintenance - *
TSMPATCM - Maintenance - *
TSMSTATS - Maintenance - *
TSMSUB - Maintenance - *
TSTBCHGR - Table Maint - *
TSTBCLOS - Table Maint - *
TSTBDELR - Table Maint - *
TSTBDISP - Table Maint - *
TSTBOPEN - Table Maint - *
TSTBREXI - Table Maint - *
TSTBSCAN - Table Maint - *
TSTBVCLR - Table Maint - *
TSUALLOC - Gen'l Purpose - *
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 61
Schedule A
TapeSaver Shared Code List
TSUCLNDS - Gen'l Purpose - *
TSUDELDS - Gen'l Purpose - *
TSUMEMBR - Gen'l Purpose - *
TSUPARSE - Gen'l Purpose - *
TSUPDISP - Gen'l Purpose - *
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 62
SCHEDULE B
MOBIUS STANDARD LICENSE AGREEMENT
TERMINATION PROVISION
11. TERMINATION
If a party to this Agreement petitions for reorganization under the bankruptcy
laws of any jurisdiction, is adjudicated bankrupt or commits any material breach
of this Agreement and fails to remedy such breach within 30 days after written
notice by the other party of such breach such other party may, without further
notice, terminate this Agreement. (I) Upon such termination of this Agreement by
Licensee, Licensee must return to Mobius at Licensee's own expense all copies,
materials, documentation, reproductions and modifications of the software held
by Licensee, purge all machine readable media relating to such software and
certify to Mobius in writing that the foregoing duties have been performed.
Licensee's obligations of Payment (Paragraph 3), Non-Disclosure (Paragraph 6)
and Non-Reproduction of Proprietary Information (Paragraph 7) shall survive such
termination of this Agreement. (II) If Mobius, whether directly or through a
successor or affiliate shall cease to be in the software business, or if Mobius
should be declared bankrupt or insolvent by a court of competent jurisdiction,
Licensee shall have the right to obtain, for its own and sole use only, a single
copy of the then current version of the source program of the object programs
supplied under this Agreement, and a single copy of the documentation associated
therewith, upon payment to the person in control of the source program the
reasonable cost of making each copy. Each source program supplied to Licensee
under this paragraph shall be subject to each and every restriction on use set
forth in this Agreement. Licensee may at any time request of Mobius the name and
address of the organization holding the source code of SYSTEM. Mobius will
respond by letter, within thirty (30) business days, with the name and address
of above storage company.
<PAGE> 63
AMENDMENT TO EXHIBIT 1
The following features documented in the TapeSaver User's Guide attached as
EXHIBIT 1 *
*
*
*
*
*
*
*
*
*
*
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 64
AMENDMENT TO EXHIBIT 1 (Cont'd)
The following list of features *
*
*
*
*
*
*
*
*
*
*
*
Please initial below to signify your agreement with this amendment
/s/ JA 9/20/91
-------- -------- Mobius Management Systems, Inc.
initial Date
/s/ JFL 9/20/91
-------- -------- Compucept of Nevada
initial Date
/s/ DSM 9/17/91
-------- -------- Software Assist Corporation
initial Date
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 65
AMENDMENT TO SCHEDULE A
The following modules will *
CLISTS:
TSTBCVT - Table Maint - *
TSTBPRT - Table Maint - *
TSTBNROW - Table Maint - *
Please initial below to signify your agreement with this amendment:
/s/ JA 9/20/91
-------- -------- Mobius Management Systems, Inc.
initial Date
/s/ JFL 9/20/91
-------- -------- Compucept of Nevada
initial Date
/s/ DSM 9/17/71
-------- -------- Software Assist Corporation
initial Date
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 1
Exhibit 10.20
CONFIDENTIAL TREATMENT REQUESTED
CDP COMMUNICATIONS INC.
OEM AGREEMENT
THIS AGREEMENT is made and effective as of the 15th of October, 1993, between
CDP COMMUNICATIONS INC. ("CDP"), having its principal place of business at 17
Dundonald Street, Toronto, Ontario, and MOBIUS MANAGEMENT SYSTEMS, INC. (the
"OEM"), a corporation duly organized under the laws of New York and having its
principal place of business at One Ramada Plaza, New Rochelle, New York 10801.
In consideration of the mutual agreements and covenants set forth herein, CDP
and the OEM agree as follows:
1. Definitions
As used in this Agreement, the following words and terms shall be defined
as indicated below:
1.1 "Added Value" means the substantial value to be added by the OEM to
the CDP Products as described in Schedule F attached hereto.
1.2 "Authorized Service Agent" means an organization contracted by CDP
to perform Product installation and maintenance services on its
behalf.
1.3 "Base Royalty" means, for any Software, the list price or license
fee, as the case may be, for such Software as set forth on Schedule
B.
1.3.1 "Concurrent Session" means a computer is connected to other
computers on a communication network and each use of the Software by
each user concurrently connected to the other computers is a
Concurrent Session.
1.4 "Customer Support Services" means services supplied by the OEM to
its Customers for the continued operation of a System.
1.5 "Customers" means those persons and entities who license or are
marketed Software and Added Value from the OEM or OEM remarketers
for their own use but not for resale.
1.6 "Demo System" means a System consisting of at least one Processing
Unit (a "CPU") and the minimum peripherals to make such CPU
effective for demonstration purposes.
1.6.1 "Evaluation Copies" means copies of the Software and Added Value
which OEM provides to Customers pursuant to
<PAGE> 2
an Evaluation Agreement (as defined in Section 6.3.1 of this
Agreement) and for which no OEM Royalty or Maintenance Fee shall be
paid to CDP.
1.6.2 "Maintenance Fees" means the maintenance royalties on the Software
which OEM's Customers have sublicensed and for which such Customers
have paid OEM a maintenance fee. Maintenance fees shall be
calculated in accordance with Schedule B of this Agreement.
1.7 "Minimum Commitment" means the purchase and license volume
commitments set forth in Schedule A attached to this Agreement.
1.8 "OEM Royalty" is defined in Section 7.1 of this Agreement.
1.9 "Software" means the object code versions of the computer software
programs listed on Schedules A and B and developed and owned by CDP
and ancillary and related documentation and all future modifications
and enhancements thereto.
1.10 "System" means the combination of the Software and the Added Value
software and other components and services offered by OEM.
1.11 "Territory" means the territory shown on Schedule C attached to this
Agreement.
2. Appointment
2.1 Appointment
CDP hereby grants OEM the non-exclusive right to use, make
reproductions of the Software, market, display, demonstrate and to
sublicense such copies of the Software to Customers in the Territory
solely on the condition that the OEM only sublicenses copies of the
Software in conjunction with the Added Value and further provided,
however, that this appointment, and the rights and licenses granted
herein, are made subject to and contingent upon the terms and
conditions of this Agreement.
OEM acknowledges and agrees that the marketing of the Software
without Added Value is expressly prohibited.
OEM warrants to CDP that its employees shall be conversant with the
technical language of computer products in general and shall develop
sufficient knowledge of the Software and of competitors' products to
be able to explain the difference to Customers.
-2-
<PAGE> 3
2.2 Sales
The OEM shall use due diligence in efforts to promote the
sublicensing of copies of the Software to Customers. The OEM is
responsible for obtaining all permits and licenses required in the
Territory for the conduct of the OEM's business pursuant to this
Agreement.
3. Term
3.1 Term
This Agreement shall be for an initial term of three years (the
"Initial Term"). After the Initial Term, this Agreement may be
renewed for subsequent three year term(s) ("Renewal Term"). If at
any time during the Initial Term or any Renewal Term, either party
notifies the other, in writing, of its intention to terminate this
Agreement, this Agreement shall terminate 360 days from the date of
such notice of termination.
4. Territory
4.1 Sales to other OEMs
The OEM is entitled to use remarketers (distributors and dealers) to
market the System as long as CDP is paid the required OEM Royalty
for each Concurrent Session of the Software sublicensed to a
Customer and the relevant Maintenance Fees.
5. Not Applicable.
6. Software License
6.1 CDP hereby grants, and the OEM hereby accepts, a non-exclusive
license, subject to the terms and conditions of this Agreement and
to the payment by the OEM of the relevant OEM Royalty therefor, to
use, make reproductions of the Software, market, display,
demonstrate and sublicense the use of the Software, including
enhancements, updates and revisions, as part of a System. A separate
license agreement shall be required for each Customer who
sublicenses the Software.
6.2 Title to Programs
Title to and ownership of the Software, and all modifications,
enhancements, additions to and developments of the Software prepared
by CDP, including all patents, copyrights and property rights
applicable thereto, shall at all times remain solely and
-3-
<PAGE> 4
exclusively with CDP, notwithstanding that the OEM or a Customer as
the case may be, may contribute to the cost of making such
modifications, enhancements, additions or developments, and the OEM
shall not take any action inconsistent with such title and
ownership. Notwithstanding the foregoing, the Added Value software,
and any other software, modifications, enhancements, or additions
developed by OEM, that do not infringe CDP property rights in the
Software, including all patents, copyrights and property rights
applicable thereto, shall at all times remain solely and exclusively
with OEM, and CDP shall not take any action inconsistent with such
title and ownership.
6.3 Transfer and Sublicenses
This license of the Software granted under this Agreement is
nontransferable, except that:
6.3.1 The OEM is authorized to sublicense the Software to Customers,
provided that the OEM enters into a written agreement with each such
Customer substantially in the form of Schedule D to this Agreement
(a "Sublicense Agreement") or substantially in the form of Schedule
F (an "Evaluation Agreement"), prior to the installation of any
Software for such Customer.
6.3.2 This license may be transferred to a subsidiary, affiliate, parent
company, successor or assignee of the OEM provided the transferee
agrees to be bound by all the terms hereof.
6.4 Protection of Programs
The OEM acknowledges that CDP represents that it has trade secrets
and other proprietary interests in the Software and the OEM shall
hold such Software in confidence. The OEM shall not, without the
prior written consent of CDP, disclose or otherwise make available
such Software in any form to any person, except to the OEM's own
employees, agents, prospects, distributors and Customers who have
signed a Sublicense Agreement or Evaluation Agreement. The OEM is
granted the right to copy the Software for the purposes of
distribution to Customers, subject to other clauses in this
Agreement. The OEM shall not remove or obscure any copyright,
patent, trademark, trade secret or similar notice affixed to any
Software and shall reproduce and affix such notice on any copies or
modifications of the Software performed by CDP. The OEM shall notify
CDP promptly upon its actual discovery of the unauthorized
possession or use of the Software and of other information made
available to OEM under this Agreement, by any person or organization
not
-4-
<PAGE> 5
authorized by this Agreement to have such possession or use. OEM
will all at the sole cost of CDP: (i) promptly furnish full details
of such possession or use to CDP, (ii) reasonably assist in
preventing the recurrence of such unauthorized possession or use,
and (iii) reasonably cooperate with CDP in any litigation against
third parties reasonably deemed necessary by CDP to protect such
proprietary rights as CDP may have had on the date of this
Agreement.
Notwithstanding anything to the contrary in this Agreement, OEM may
disclose any information required by law to be disclosed or that may
otherwise be disclosed under the terms of the Nondisclosure
Agreement, between the parties, dated January 18, 1993.
6.5 Term of License
CDP may terminate any license (including the rights granted to OEM
hereunder) granted under this Agreement by written notice to the
OEM, if the OEM has materially breached this Agreement and such
material breach continues for 30 days after OEM's receipt of notice
thereof from CDP; provided that the termination of any license
granted to the OEM hereunder shall not affect the sublicenses
granted by the OEM to its Customers or the Evaluation Agreements
with OEM's Customers, so long as the OEM does not have the right to
terminate such Customers' Sublicense Agreements or Evaluation
Agreements due to an uncured material breach by such Customers.
Within 30 days after such termination of the OEM's or a Customer's
license rights, the OEM or the Customer as the case may be, shall
destroy or return to CDP the original and all copies (including
partial copies) of terminated Software and certify in writing to CDP
that it has done so. The obligations of the OEM and the Customer
under Subsection 6.4 above shall survive the termination of any such
license, or sublicense, for ten (10) years.
Notwithstanding anything in this Agreement to the contrary, upon the
termination of any license or sublicense granted under this
Agreement, OEM shall retain all rights necessary to comply with
existing obligations and commitments to Customers in existence on
the effective date of such termination, but only for the number of
Concurrent Sessions that were licensed, or for any Concurrent
Sessions for which commitments to license were made, prior to the
termination of the Agreement; provided that if any additional
Concurrent Sessions licenses are issued, applicable royalties must
be paid to CDP.
7. Prices and Payment
-5-
<PAGE> 6
7.1 OEM Royalty
As compensation for the right to reproduce copies of the Software,
the OEM shall be charged and agrees to pay the OEM Royalty in
accordance with the terms of this Agreement. OEM Royalties shall be
based on the * sublicensed. The Normal OEM Royalty shall equal the
Base Royalty for Software set forth on the OEM Royalty and
Maintenance Schedule attached hereto as Schedule B. During the first
18 (eighteen) months of the Agreement, the Base Royalties in
Schedule B will be replaced with the Incentive Royalties as defined
in Schedule A if the OEM meets the Minimum Commitment specified in
Schedule A. The OEM will initially pay the Base OEM Royalty;
however, if the Minimum Commitment volume has been achieved during
the first 18 months, CDP will provide a credit, to be deducted
evenly from revenues payable over the next six months for adjustment
of the pricing of the first eighteen months of Software
sublicensing. The OEM Royalty may be changed at any time by CDP on
at least 90 days prior written notice. * .
7.2 Taxes and Import Duties
All OEM Royalties and Maintenance Fees are in United States dollars,
unless otherwise specified and noted in Schedule B. Except as stated
above, OEM Royalties and Maintenance Fees are exclusive of all local
jurisdiction, sales, use, occupational or similar taxes now in force
or enacted in the future, all of which shall be paid by the OEM,
except for such taxes as are imposed on CDP's income or gross
receipts, which shall be paid by CDP. The OEM is responsible for
obtaining and providing to CDP any certificate of exemption or
similar document required to exempt any sale or license from sales,
use or similar tax liability.
7.3 Payment Terms
OEM shall pay CDP, by the 10th of each month, the OEM Royalties due
on Software sublicense fees actually received by OEM during the
previous month.
7.4 Late Payment Charges
If the OEM fails to pay any amounts within 30 days after payment is
due, interest on overdue amounts shall accrue at an annual rate
equal to three percent (3%)
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
-6-
<PAGE> 7
over the prime interest rate as set by the Royal Bank
of Canada.
8. Purchase Orders/Delivery
8.1 Not Applicable.
8.2 Delivery
Within 10 days of the commencement date of this Agreement, CDP shall
provide a master diskette containing the Software to the OEM.
9. Not Applicable.
10. Warranties
10.1 Software Warranty
The Software is provided "AS IS" without warranty whatsoever.
However, CDP shall, at no cost to the OEM, for a period of 365 days
from the date of delivery of the master diskette to the OEM (the
"Warranty Period"), provide reasonable assistance by due care and
diligence to correct all defects in the Software delivered to the
OEM. As used in this subsection, "defect" shall mean material
deviations from the published specifications for the Software.
10.2 No Warranties by OEM
The OEM is not authorized to make any warranty commitment to any
party, whether written or oral, on behalf of CDP other than as
provided by CDP hereunder, and will indemnify and save CDP harmless
from any and all liability, loss, damages, costs and expenses
incurred or arising out of the breach of this obligation.
10.3 Disclaimers
(a) EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, CDP MAKES
NO FURTHER WARRANTIES, EITHER EXPRESSED OR IMPLIED, AS TO ANY
MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY
CONDITION OR WARRANTY OF MERCHANTABILITY OR MERCHANTABLE
QUALITY OF THE SOFTWARE OR ITS FITNESS FOR ANY PARTICULAR
PURPOSE AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR
FROM A COURSE OF DEALING OR USAGE OF TRADE. IN NO EVENT WILL
EITHER PARTY BE LIABLE FOR ANY DAMAGES, INCLUDING BUT NOT
LIMITED TO (i) DAMAGES CAUSED BY THE OEM'S FAILURE TO PERFORM
ITS COVENANTS AND RESPONSIBILITIES, BY REASON OF CDP'S
NEGLIGENCE OR OTHERWISE; (ii)
-7-
<PAGE> 8
DAMAGES CAUSED BY REPAIRS OR ALTERATIONS DONE WITHOUT CDP'S
WRITTEN APPROVAL; (iii) DAMAGES DUE TO DETERIORATION DURING
PERIODS OF STORAGE BY THE OEM; (iv) LOST DATA; OR (v) ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
(b) The parties will reasonably cooperate with each other and
undertake at the requesting party's expense reasonably
necessary action required by laws and regulations of the
Territory where Customers are located to ensure that this
Agreement's limits of responsibility as set forth above are
valid and enforceable against whomever they are applicable.
The OEM will promptly inform CDP as soon as the OEM becomes
aware of liability claims by a third party against the OEM or
CDP, based on the Software.
(c) NOTWITHSTANDING ANYTHING IN THE FOREGOING PARAGRAPHS (a) AND
(b) OR OTHERWISE IN THIS AGREEMENT TO THE CONTRARY: (i) OEM
AND CDP, AS THE CASE MAY BE, SHALL BE LIABLE FOR ANY AND ALL
DAMAGES DUE TO SUCH PARTY'S NEGLIGENCE OR WILLFUL MISCONDUCT
AND (ii) CDP'S INDEMNITY OBLIGATIONS TO OEM SHALL NOT BE
LIMITED IN ANY WAY BY ANY LIMITATION ON CDP'S LIABILITY.
11. Training
Training shall be provided in accordance with training schedules
established by CDP from time to time. Training shall be at a time
mutually agreed upon. The OEM shall be responsible for all travel
and living expenses of its employees in connection with such
training.
12. Customer Services
12.1 Installation and Maintenance Services
CDP will not have any responsibilities to provide OEM's Customers
with direct installation and maintenance services. CDP will provide
maintenance training to the OEM in accordance with its then
prevailing charges and terms and conditions.
12.2 Customer Support Services
OEM will charge and collect maintenance fees consistent with
maintenance fees for other similar software marketed by the OEM. CDP
will not have any responsibilities to collect fees for Customer
Support Services from OEM's Customers. The OEM shall at all times
have sufficient CDP trained customer support
-8-
<PAGE> 9
representatives, having the appropriate qualifications to meet the
requirements of its marketplace.
12.3 OEM Support
CDP maintenance services to OEM shall include the attempts on a best
efforts basis to fix material defects in the Software within one
week of receiving notice thereof and the provision of all
enhancements, modifications and new releases of the Software to OEM.
CDP shall make the foregoing maintenance services available to OEM
on behalf of all installed Customers during the first year of their
Sublicense Agreement or Evaluation Agreement and all other installed
Customers who have a Software maintenance agreement in effect with
OEM.
CDP maintenance services to OEM shall also include the prompt
provision in a reasonable time frame of all modifications to the
Software that are necessary to support * .
When OEM's problem diagnosis procedures confirm the existence of a
defect in the Software which the OEM is unable to resolve, OEM shall
have the right to obtain second level support from CDP for the
maintenance fee for the Initial Term as set out in Schedule B; such
fee is to be negotiated for each Renewal Term; provided that
aggregate annual increases shall not exceed the increase in the
Consumer Price Index by more than * . CDP shall use due care and
diligence to correct documented errors. CDP will provide support
directly to OEM only. If OEM asks CDP to directly support Customers,
this work will be performed on a time and materials basis at rates
on the then current CDP consulting fee schedule.
12.4 Charges
The OEM shall not charge Customers for maintenance and support
services until after the expiration of the applicable warranty
period. OEM agrees to pay to CDP for each of its Customers the
maintenance fees actually received by OEM set out in Schedule B
attached hereto. Amounts shall be due and payable to CDP 30 days
following the end of a calendar period established by the OEM in
advance of the commencement date of this Agreement, as approved by
CDP. The calendar period shall be quarterly.
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
-9-
<PAGE> 10
13. Verification of OEM's Records
Upon 5 business days' written request, CDP shall have reasonable
access to the OEM's records relating to amounts paid or payable to
CDP hereunder, solely for purposes of audit to verify the
correctness of payments. Such audit will be performed no more
frequently than annually by a mutually acceptable party at CDP's
expense. If any audit reveals a discrepancy between the amounts
payable to CDP and the amounts actually paid to CDP since the date
of this Agreement or the most recent previous audit (whichever is
later), and if that discrepancy exceeds five percent (5%) of the
amounts payable as determined in the audit, OEM shall pay all CDP's
verified reasonable costs associated with this audit.
14. Advertising and Promotion
Not Applicable
15. Patents and Trademarks
15.1 Infringement Indemnification by CDP
At its expense, CDP will defend any action brought against the OEM
or its Customers, and pay all reasonable expenses and damages of the
OEM or its Customers, as the case may be, and hold harmless OEM and
its Customers against any loss, cost or expense suffered or incurred
in connection with any claim, suit or proceeding arising in
connection with any claims that the Software infringes a patent,
copyright or other third party right ("Infringement") effective in
the Territory, provided the OEM notifies CDP promptly in writing of
the action and shares with CDP control of the defense and
negotiations for its settlement or compromise. CDP shall pay all
damages and costs awarded therein against the OEM but shall not be
responsible for any compromise made without its consent, which shall
not be unreasonably withheld. In the event of a judgment, or
injunction which prohibits the OEM's or its Customer's continued use
of any Software by reason of an Infringement, CDP may at its option,
but only upon the OEM's specific written request: (a) obtain for the
OEM and its Customers the rights to continued use of any such
Software; (b) replace or modify such Software so that it is no
longer infringing; or (c) refund the amount paid to CDP by OEM in
respect of the Software, less 2% per month of use as depreciation.
CDP shall have no liability for any claim of infringement based
solely on: (a) use of other than a current unaltered release of the
Software available from CDP if such Infringement would have been
-10-
<PAGE> 11
avoided by the use of such current Software release; provided that
the foregoing phrase "current unaltered release of the Software
available from CDP" shall include: (i) the most current release of
the Software and all prior releases of the Software that were
released during the 180 days prior to the most current release and
(ii) the Software as modified with CDP's approval, or (b) use of
combination of the Software with software or equipment not supplied
by CDP, other than the Added Value. THIS PARAGRAPH STATES THE ENTIRE
RESPONSIBILITY OF CDP CONCERNING INFRINGEMENTS.
CDP shall have no liability to the OEM under any provision of this
Section 15 if any Infringement or claim thereof is based upon the
use of Software delivered hereunder in a manner for which such
Software was not designed.
15.2 Ownership of Patents and Trademarks
All patents, trademarks, trade names, copyrights, trade secrets,
designs and other proprietary rights in the Software and the
literature supplied by CDP in connection therewith shall be and
remain the property of CDP and no rights to duplicate such property
shall accrue to the OEM, except as set forth in this Agreement or
unless written permission is granted by CDP. The OEM shall not
itself and shall not permit its employees to infringe or deal with
CDP's title to its property in any manner inconsistent with CDP's
exclusive ownership. Except to the extent required to permit the OEM
to carry out its obligations hereunder or as required by law, the
OEM and its agents, employees and consultants shall not disclose any
technical information concerning the Software or any literature
furnished by CDP to any person, firm or corporation.
16. Trade Name and Copyright
16.1 The OEM shall market the Software under the OEM's trade names, which
names shall not be confusingly similar to the names used by CDP. The
OEM shall include and shall not alter, obscure or remove any
copyright notice of CDP.
16.2 Any advertising or promotional literature or announcement to the
press by a party regarding its relationship with the other party or
otherwise utilizing such other party's name must be approved by such
other party in advance in writing. The only such authorized
representation to third parties by the OEM is to identify itself an
authorized OEM.
-11-
<PAGE> 12
16.3 The terms of this Agreement and its existence shall not be disclosed
by either party without the prior written consent of the other
party, except for the following:
(a) Disclosure by both parties to their current and potential
investors;
(b) Disclosure as required by law.
17. Force Majeure
Neither CDP nor OEM shall be liable in any respect for failure or
delay in the performance of its obligations under this Agreement
where such failure or delay shall have been due to causes beyond the
reasonable control of CDP or OEM, as the case may be. In the event a
party's failure to perform or delay in performance of its
obligations under this Agreement due to causes beyond its reasonable
control continues for 60 days, the party to whom performance is due
may treat such nonperformance as a breach and pursue its remedies.
18. Assignment and Corporate Reorganizations
Except for OEM's assignment to a parent, subsidiary, successor,
affiliate company or any other assignee which agrees to be bound in
writing by the terms of this Agreement, neither this Agreement nor
any rights granted hereby may be assigned by either party
voluntarily or by operation of law without the other party's prior
written consent and such consent shall not be unreasonably withheld,
and any such attempted assignment shall be null and void. Assignment
shall be deemed to include the transfer of substantially all of the
assets of, or a majority interest in the voting shares of, a party,
or the merger or amalgamation of a party with one or more entities.
This Agreement shall inure to the benefit of and be binding upon any
permitted assign or successor of a party.
19. Default/Remedies
19.1 Events of Default
19.1.1 OEM Default
Upon occurrence of any of the following acts or events, the OEM
shall be in default and breach of this Agreement:
(a) The OEM attempts to assign this Agreement or any of its rights
hereunder, in violation of this Agreement.
-12-
<PAGE> 13
(b) The OEM fails to cure any payment deficiency within 30 days of
receipt of CDP's written notice thereof.
(c) The OEM neglects or fails to perform any of its material
covenants, obligations or responsibilities under this
Agreement and such failure continues for 30 days after OEM's
receipt of written notice thereof from CDP.
(d) The OEM is not paying its undisputed debts as such debts
become due, becomes insolvent, files or has filed against it a
petition in bankruptcy or any similar filing or action under
the laws of any country and such involuntary petition or
filing is not dismissed or stayed within 60 days; proposes any
dissolution, liquidation, financial reorganization or
recapitalization with creditors; makes an assignment for the
benefit of creditors; or if a receiver, trustee, custodian,
similar agent or government agency is appointed or takes
possession with respect to any material property or business
of the OEM; or if the OEM takes any other similar step or
measure under any applicable insolvency, bankruptcy or similar
law.
(e) The OEM engages in any unauthorized use, or misuse of CDP's
name, trademarks or trademarks or trade names.
19.1.2 CDP Default
Upon occurrence of any of the following acts or events, CDP shall be
in default and breach of this Agreement.
(a) CDP neglects or fails to perform any of its material
covenants, obligations or responsibilities under this
Agreement and such breach occurs for 30 days after CDP's
receipt of written notice from OEM.
(b) CDP is not paying its undisputed debts as such
debts become due, becomes insolvent, files or has
filed against it a petition in bankruptcy or any
similar filing or action under the laws of any
country and such involuntary petition or filing is
not dismissed or stayed within 60 days; proposes
any dissolution, liquidation, financial
reorganization or recapitalization with creditors;
makes an assignment for the benefit of creditors;
or if a receiver, trustee, custodian, similar
agent or government agency is appointed or takes
possession with respect to any material property
or business of CDP; or if CDP takes any other
-13-
<PAGE> 14
similar step or measure under any applicable insolvency,
bankruptcy or similar law.
(c) CDP engages in any unauthorized use, or misuse of the OEM's
name, trademarks or trade names.
(d) CDP attempts to assign this Agreement or any of its rights
hereunder, in violation of this Agreement.
19.1.3 Escrow
CDP shall deposit the source code for the Software with a mutually
acceptable Toronto-based escrow agent pursuant to a mutually
acceptable escrow agreement being signed by both parties. The OEM
shall be responsible for the cost of preparing the escrow agreement
and for the escrow agent fees.
The Escrow Agreement shall provide for the following:
(1) CDP shall maintain with the escrow agent the most current
version of the Software source code and the version of the
Software source code for which OEM has the object code.
(2) CDP or the escrow agent shall immediately deliver the Software
source code described in paragraph (1) above to OEM in the
event (a) CDP fails to maintain the Software in accordance
with this Agreement, (b) CDP has ceased its on-going business
operations, or sale, licensing, maintenance or other support
of the Software and such business has not been assumed by any
other party, or (c) CDP has availed itself, or been subjected
to by any third party, a proceeding in bankruptcy in which CDP
is the named debtor, an assignment by CDP for the benefit of
its creditors, the appointment of a receiver for CDP, or any
other proceeding involving insolvency or the protection of, or
from, creditors, and same has not been discharged or
terminated without any prejudice to OEM's rights or interests
within sixty (60) days. Upon receipt of the Software source
code pursuant to this paragraph (2), OEM shall have the right
to freely use, modify, or create derivative works based upon,
the Software source code, and OEM shall have sole and complete
ownership of all derivative works based upon the Software
source code.
(3) CDP shall give OEM written notice of the name and address of
the escrow agent.
-14-
<PAGE> 15
19.2 Remedies
If the OEM fails (a) to cure any payment deficiency within 30 days
of receipt of written notice from CDP, or (b) to cure any other
default within 30 days of receipt of written notice thereof from
CDP, then CDP, in its sole discretion, shall, in addition to any
other remedy which it may be entitled to at law, have the right to
terminate this Agreement by written notice to the OEM on a date
specified therein.
In the event CDP is in default or breach of this Agreement under
Section 19.1.2, then OEM in its sole discretion, shall, in addition
to any other remedy which it may be entitled to at law or under this
Agreement, have the right to: (i) terminate this Agreement or (ii)
continue the Agreement in force with a 50% reduction in the OEM
Royalty and Maintenance Fees.
CDP shall give OEM at least 180 days prior written notice of any
material modification to the Software that may materially adversely
affect OEM. In the event of any such modification to the Software,
OEM may immediately terminate this Agreement upon 30 days notice or
continue the Agreement in force with a 50% reduction in the OEM
Royalty and Maintenance Fees.
19.3 Duties of the OEM Upon Termination
Upon termination of this Agreement for an OEM default, the OEM shall
pay to CDP, in full within 30 days of such termination, all amounts
owed to CDP. CDP shall be entitled to set off and deduct from any
money due the OEM, whether or not arising from or under this
Agreement, any and all amounts due CDP from the OEM.
Notwithstanding anything in this Agreement to the contrary, CDP's
and OEM's Software maintenance, support and source code escrow
obligations shall survive any termination of this Agreement.
19.4 Limitation of Liability
Three years after the termination of this Agreement neither party
shall have any obligation to the other for compensation or for
damages of any kind, whether on account of the loss by a party of
present or prospective sales, investments or goodwill due to such
termination; and the parties hereby waive any rights which may be
granted to them by statute or otherwise which are not granted to
them by this Agreement.
-15-
<PAGE> 16
20. General
20.1 Export
The OEM agrees that it shall use its best efforts to prevent the
Software from being distributed by OEM in such a way as to make it
available in or exported to foreign countries in contravention of
any law of The United States of America.
20.2 Confidentiality
CDP and the OEM agree that, in addition to Software, certain
information supplied by CDP to the OEM and vice versa during the
course of this Agreement may be proprietary, secret or confidential,
shall be held in confidence by the receiving party for a period of
five years following the date of disclosure and shall be used only
for the purposes of this Agreement. All documentation with respect
to the Software, including training documentation, software
documentation and maintenance manuals and drawings, is furnished
solely for the OEM's and its Customer's internal use. The OEM may
make, and may permit its Customers to make, copies of such
documentation to satisfy internal requirements and those of its and
its Customers, provided that all such copies include appropriate
copyright and proprietary information notices. No other copies or
use of such documentation, or any potion thereof, shall be made
without the prior written approval of CDP.
20.3 Applicable Law and Jurisdiction
This Agreement shall be governed and construed in accordance with
the laws of the New York State.
20.4 Relationship of the Parties
The parties acknowledge that both parties hereto are independent
contractors and that the OEM will, on its own behalf, solicit orders
for Software only as an independent contractor. The OEM shall
arrange the terms and conditions of the license of the Software,
including price, independent of CDP, except with respect to the
sublicensing terms set forth in Section 6 hereof which the OEM
agrees to fully comply with in its contracts with its Customers.
Neither party shall represent itself as a partner, joint-venturer,
agent, employee or general representative of the other party. Each
party acknowledges that it shall have no right, power or authority
to, in any way obligate the other party to any contract or other
obligation.
-16-
<PAGE> 17
20.5 Entire Agreement
This Agreement is the exclusive statement of the terms and
conditions between the parties with respect to its subject matter as
of its date, supersedes all prior agreements, negotiations,
representations and proposals, written or oral, and does not operate
as an acceptance of any conflicting terms or provision of any OEM's
purchase order or any other instrument. The terms and conditions
contained herein shall prevail notwithstanding any variance with the
terms and conditions of any order submitted by the OEM for Software
licensed hereunder. Deviations from these terms and conditions shall
not be valid and binding upon a party unless specifically accepted
by an authorized officer of such party in writing.
20.6 Waivers
No delay or omission on the part of either party to this Agreement
in requiring performance by the other party hereunder, or in
exercising any right hereunder, shall operate as a waiver of any
provision hereof or of any right or rights hereunder; and the
waiver, omission or delay in requiring performance or exercising any
right hereunder on any one occasion shall not be construed as a bar
to or waiver of such performance or right, or of any right or remedy
under this Agreement, on any future occasion.
20.7 Notices
For purposes of this Agreement, and for all notices and
correspondence hereunder, the addresses of the respective parties
have been set out at the beginning of this Agreement and no change
of address shall be binding upon the other party unless notice of
such change is given in writing at the address shown herein. All
notices shall be effective upon receipt if delivered personally or
sent by facsimile transmission or telegram, and seven days after
mailing if sent by registered mail.
20.8 Section Headings
Section headings are for descriptive purposes only and shall not
control or alter the meaning of this Agreement.
20.9 Rights and Remedies
All rights and remedies of either party shall be cumulative and may
be exercised singularly or concurrently. The failure of either
party, in any one
-17-
<PAGE> 18
or more instances, to enforce any of the terms of this Agreement
shall not be construed as a waiver of future enforcement of that or
any other term.
20.10 Severability
If any provision of this Agreement shall for any reason be held
illegal or unenforceable, such provision shall be deemed separable
from the remaining provision of
-18-
<PAGE> 19
this Agreement and shall in no way affect or impair the validity or
enforceability of the remaining provisions of this Agreement.
IN WITNESS WHEREOF, CDP and the OEM hereby have duly executed this Agreement as
of the date first above written.
CDP COMMUNICATIONS INC. MOBIUS MANAGEMENT SYSTEMS, INC.
By: /s/ Ernie Crawford By: /s/ Mitchell Gross
---------------------------- ----------------------------
Title: Vice President Title: President
INDEX OF SCHEDULES
Schedule A: Incentive Royalty Schedule
Schedule B: OEM Royalty and Maintenance Schedule
Schedule C: Territory
Schedule D: Master Software License Agreement
Schedule E: Evaluation Agreement
Schedule F: Added Value
-19-
<PAGE> 20
SCHEDULE A INCENTIVE ROYALTY SCHEDULE
This Royalty schedule becomes applicable if OEM sublicenses * of Software within
18 months of the commencement date of this Agreement.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Level Low High Royalty per Concurrent
Quantity Quantity Session License to be
Paid by OEM
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
A 0 * *
- --------------------------------------------------------------------------------
B * * *
- --------------------------------------------------------------------------------
C * * *
- --------------------------------------------------------------------------------
D * * *
- --------------------------------------------------------------------------------
E * Plus *
- --------------------------------------------------------------------------------
</TABLE>
Example
When the OEM is at Level A pricing, if a 100 user * were sold, this would result
in 100* * or * Royalty to CDP.
Software
*
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
-20-
<PAGE> 21
Schedule B OEM Royalty and Maintenance Schedule
The following is a schedule of Royalties due for each * license used by OEM or
its Customers:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Level Low High Royalty per Concurrent
Quantity Quantity Session License to be
Paid by OEM
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
A 0 * *
- --------------------------------------------------------------------------------
B * * *
- --------------------------------------------------------------------------------
C * * *
- --------------------------------------------------------------------------------
D * * *
- --------------------------------------------------------------------------------
E * Plus *
- --------------------------------------------------------------------------------
</TABLE>
Maintenance Fees
CDP will receive * annually for each * license of the Software after the
expiration of the first year of such license, if the Customer has paid the OEM
maintenance fees.
Software
*
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
-21-
<PAGE> 22
Schedule C
The Territory shall be worldwide.
-22-
<PAGE> 23
Schedule D
LICENSE AGREEMENT
This License Agreement is made as of the date indicated below by and between
Mobius Management Systems, Inc. (Mobius), a New York corporation located at One
Ramada Plaza, New Rochelle, New York 10801, and the party executing this
Agreement as Licensee (hereinafter referred to as "Licensee") as follows:
1. SCOPE OF THIS LICENSE AGREEMENT
Mobius agrees to grant to Licensee and Licensee agrees to accept from Mobius a
non-exclusive, non-assignable and non-transferable license for the use of the
computer software components described in Exhibit A (hereinafter referred to as
the "SYSTEM") on the terms and conditions hereinafter set forth.
2. LICENSE TERM
The license shall be for an initial term of fifteen (15) years from the date
Mobius first furnishes the SYSTEM to Licensee (the "Delivery Date").
3. PAYMENT TERMS
Payment shall be made in accordance with Exhibit A. All payments shall be made
in U.S. Dollars within ten days of the date of the invoice. Mobius reserves the
right to add an interest charge not exceeding 1-1/2% per month, or fraction
thereof, for failure to make a payment within 10 days of the invoice date.
4. TITLE AND NON-ASSIGNABILITY
Title to SYSTEM, all property rights therein and all materials supplied to
Licensee under this Agreement shall remain the sole property of Mobius. Licensee
may not assign this Agreement without the prior written consent of Mobius. Any
attempt to assign any of the rights, duties or obligations of this Agreement
without such consent is void.
5. RESTRICTIONS ON USE
(i) The SYSTEM and other items supplied by Mobius are for the sole use of
Licensee and may be used to process work and data owned by Licensee. SYSTEM
shall not be used to process work or data of another company as a "Service
Bureau" except SYSTEM may be used to process work and data of a parent company
or of a subsidiary of which Licensee owns more than fifty-percent (50%). (ii)
The computer programs licensed hereunder shall be used only on a single central
processing unit or mainframe (referred to as the CPU) as specified on Exhibit A
and its associated peripheral units at the same site. Use of a program shall
consist either of copying any portion of the program from storage units or media
-23-
<PAGE> 24
into the CPU, or the processing of data with the program, or both. The programs
licensed hereunder may be temporarily transferred to another CPU while the
specified CPU is undergoing repairs, but Licensee shall notify Mobius in writing
of such transfer if it is for a period of more than 72 hours. Licensee may
create backup copies of the SYSTEM for use in the CPU in the event of accidental
loss of the SYSTEM.
6. NON-DISCLOSURE
Licensee recognizes that the computer programs, documentation manuals and other
materials supplied by Mobius to Licensee are subject to the proprietary rights
of Mobius. Mobius has represented that the programs, documentation and all
information or data supplied by Mobius are trade secrets of Mobius, are
protected by civil and criminal law, including the law of copyright, are very
valuable to Mobius, and that their use and disclosure must be carefully and
continuously controlled. Licensee agrees that (i) all programs, documentation,
and materials in machine-readable form supplied under this License shall be kept
in a secure place, under access and use restrictions not less strict than those
applied to Licensee's most valuable and sensitive programs. Licensee agrees to
notify Mobius immediately of the unauthorized possession or use of any item
supplied under this License and of other information made available to Licensee
under this Agreement, by any person or organization not authorized by this
Agreement to have such possession or use. Licensee will promptly furnish full
details of such possession or use to Mobius, will assist in preventing the
-24-
<PAGE> 25
SCHEDULE E
================================================================================
INFOPAC TRIAL AGREEMENT AND ORDER FORM
Please send me the INFOPAC products indicated below for a free trial.
1. The trial period will be for ___ days, starting the day the INFOPAC
product(s) indicated below are successfully installed and operating or
demonstrated by Mobius personnel.
2. There is no charge for the trial.
3. Company will respect and protect Mobius Management Systems, Inc.
proprietary rights to the product(s) ordered for trial.
4. Company agrees to return all tapes and materials related to the product(s)
under trial, and certify that the product(s) have been removed from the
Company's systems, and are no longer in use, if the Company does not lease
or license the product(s).
5. Company will protect the product(s) under trial as they protect their own
assets, while in their possession.
6. Product(s): _________________________________________
______________________________________________________
______________________________________________________
I agree to the terms and conditions of this agreement.
- ---------------------- --------------------- ----------------- ----------
Company Name Signature Title Date
- --------------------------------------------------------------------------------
Installation Profile
Company Name ________________ ___)___-_______
Address ____________________
____________________
____________________
Contact Name ________________ ___)___-_______
CPU Model ___________ Operating System _______ Release _______
Return to:
Mobius Management Systems, Inc.
One Ramada Plaza
New Rochelle, New York 10801
(914) 632-7960 Ext. 286 or (914) 632-1789 (FAX)
================================================================================
-25-
<PAGE> 26
SCHEDULE F
ENTERPRISE DATA MANAGEMENT SOFTWARE FROM MOBIUS MANAGEMENT SYSTEMS
INFOPAC-RDS for Windows
INFOPAC-RDS for Windows changes the way end-users view and print output.
INFOPAC-RDS for Windows uses the Microsoft(R) Windows environment to provide a
friendly graphical user interface to display report data stored anywhere in the
enterprise: the Host file server (including data stored on magnetic DASD,
optical disk and tape), local file servers, the LAN or the workstation hard
drive. Taking advantage of the power and flexibility of the workstation,
INFOPAC-RDS for Windows extends this power to enterprise report viewing and
printing.
Direct Access to Your Enterprise
Network With Full Security and
Data Integrity
INFOPAC-RDS for Windows, working with its mainframe partners INFOPAC-RDS and
ViewDirect, creates a true client/server relationship. This architecture
supports two application programming interfaces (APIs) for communicating between
the client and server. You can use any Windows-based PC communications product
that supports either of these APIs.
============================================
Attach Server
- --------------------------------------------
Recipient ID Passwordtxxxxxx
- --------------------------------------------
-----------------------------
Server ID IRDSPRO
Report ID
-----------------------------
CR 001 MONTHLY EXPENSE REPORT
Version ID CR001 SALES CALL DETAIL
SL001 MONTHLY SALES REPORT
Section ID
o HLLAPI - High-level Language Application Programming Interface supported
by many Windows 3270 terminal emulation packages, including those that
support TCP/IP.
o CPI-C API - Common Programming Interface for Communications, a standard
communications interface designed to support APPC software and LU6.2
protocols.
Using the client/server architecture, INFOPAC-RDS for Windows gives authorized
users access to data throughout the network. Pop down boxes display the servers
you can work with, a customized list of reports you are allowed to access,
versions that are available, and sections of reports you may view.
If you have ViewDirect or the Optical Disk Interface, you can directly access
archives stored on tape or optical disk.
Minimizes Network Traffic with the Intelligent
Object Processor(TM) Architecture
Through the unique and powerful intelligent Object Processor architecture.
INFOPAC.RDS for Windows minimizes the load on your network and optimizes the use
of the correct platform for each function. The Intelligent Object Processor
moves objects (data ______ requests) throughout the network to prosecute objects
on the most efficient platform, which, depending on the object might be the
server or the client. For example, the Intelligent Object Processor executes a
simple SEARCH command first on the workstation for data in the buffer then ships
the search to the server if it cannot be satisfied on the workstation. The
results of the object are then moved to the workstation after the prosecution of
the object on the server is complete. The end result, network traffic is
minimized and functionality is maximized.
-26-
<PAGE> 27
View Entire Page
INFOPAC-RDS for Windows allows you to display the report page in any size
window. It uses Variable font support to allow each user to dynamically define
how many characters and lines of the report are displayed on the screen at a
time. Simply by altering the font and its size, you alter displayed report text
to suit your preferences - from very small to very large.
=============================================
INSFOPAC RDS\C\REPORTS\STAC081.RPT
- ---------------------------------------------
File Exit View Options
- ---------------------------------------------
-27-
<PAGE> 1
Exhibit 10.21
CONFIDENTIAL TREATMENT REQUESTED
===========================
SOURCE CODE LICENSE AND
AMENDMENT TO OEM AGREEMENT
BETWEEN
CDP COMMUNICATIONS INC.
AND
MOBIUS MANAGEMENT SYSTEMS
MADE AS OF
AUGUST 12, 1997
============================
<PAGE> 2
SOURCE CODE LICENSE AND
AMEND MENT TO OEM AGREEMENT
THIS AGREEMENT made as of the 12th day of August, 1997.
AMONG:
CDP COMMUNICATIONS INC., a corporation incorporated under the laws
of the Province of Ontario (hereinafter referred to as the "CDP")
and
MOBIUS MANAGEMENT SYSTEMS, INC. a corporation incorporated under the
laws of the State of Delaware (hereinafter referred to as "Mobius")
WHEREAS CDP and Mobius entered into an OEM Agreement dated as of
October 15, 1993, as amended by the parties pursuant to amending agreement dated
July 18, 1995, (the "OEM Agreement") pursuant to which CDP granted certain
rights to Mobius to use, reproduce and sublicense the object code * version of
CDP's *;
AND WHEREAS CDP, Mobius and FileSafe, Inc. entered into a Source
Code Escrow Agreement dated April 21, 1994 (the "Escrow Agreement") pursuant to
which CDP placed the source code * version of the * in escrow to be released to
Mobius only under certain specific conditions referred to therein;
AND WHEREAS CDP subsequently developed a * version of the * ;
AND WHEREAS Mobius wishes to license the object code to the *
version of the * for sublicensing to its customers pursuant to the OEM Agreement
and license the source code of the * version and the * version of the * for the
purposes more fully set forth herein, including to make certain enhancements and
to maintain such software for its customers, and CDP is willing to grant such a
license under certain restrictions and conditions;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and the payment by each
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
1
<PAGE> 3
of the parties to the other of the sum of ten dollars ($10.00) and other good
and valuable consideration (the adequacy of which consideration as to each of
the parties hereto is hereby mutually acknowledged), the parties hereto covenant
and agree, and as appropriate, amend the OEM Agreement, as follows:
ARTICLE I - INTERPRETATION
1.1 Definitions
In this Agreement, the following terms shall have the meanings
ascribed to them as follows:
(a) "Acceptance Tests" has the meaning set forth in Section 2.5(b);
(b) "CDP Source Code" means the source code to the * and the * versions
of the * and technical documentation relating thereto as such source
code exists as at the date first written above and as described in
Schedule A to this Agreement;
(c) "CDP Software" means the object code to the * and the * versions of
the * as licensed to Customers under the OEM Agreement;
(d) "Confidential Information" means the confidential, secret or
proprietary information of CDP, including technical, financial and
business information and software of CDP which has been or may
hereafter be disclosed, directly or indirectly to Mobius, either
orally, in writing or in any other material form, or delivered to
Mobius;
(e) "Customers" means those persons or entities who are validly
sublicensed by Mobius, in compliance with the OEM Agreement, as
end-users of the Software and the Added Value (as such terms are
defined in the OEM Agreement);
(f) "Enhancements" includes changes, modifications, derivations,
improvements, and additions to the CDP Source Code;
(g) "Intellectual Property Rights" means all intellectual and industrial
property rights including all rights to
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
2
<PAGE> 4
copyrights, copyright applications. trademarks, patents, inventions,
discoveries, patent applications, industrial designs, design rights,
trade secrets and information of a confidential nature; and
(h) "License Fee Period" means the * period during which License Fees
are payable as set forth in Schedule B to this Agreement.
ARTICLE 2 - LICENSE
2.1 Delivery of CDP Source Code
(a) CDP shall deliver to Mobius, at its offices at One Ramada Plaza, New
Rochelle, New York, one copy of the CDP Source Code and Mobius shall conduct
Acceptance Tests on the CDP Source Code in accordance with Section 2.5.
(b) In addition, the CDP Source Code shall include (i) the * ; and (ii)
the * .
(c) CDP shall have no obligation to deliver any source code for any
products which CDP licenses separately from the CDP Software (to the extent that
such source code is not incorporated in, or otherwise forms a part of, the CDP
Software). Notwithstanding the foregoing Mobius agrees that it shall separately
purchase or otherwise acquire a license * or its functional equivalent to be
used together with the CDP Source Code and CDP shall have no obligation to
provide or cover the cost of licensing such additional software.
2.2 Use of CDP Source Code by Mobius
(a) Mobius shall have and CDP hereby grants to Mobius, a perpetual,
non-transferrable, non-exclusive license, to be exercised by its employees,
officers, directors and duly authorized agents, to (i) maintain, modify and
update the CDP Source Code, and (ii) develop Enhancements to the CDP Source
Code.
(b) Mobius acknowledges and agrees that prior to the end of the License
Fee Period, the rights granted under Subsection 2.1(a) are granted solely to
enable Mobius to provide maintenance and support services to Customers and to
develop Enhancements to the CDP Software. Mobius agrees to only market,
distribute or license the Enhancements developed by or for Mobius to Customers
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
3
<PAGE> 5
in accordance with the terms of the OEM Agreement as amended by
the terms hereof.
2.3 Obligations of Mobius
(a) Mobius shall establish a secure location to maintain the CDP Source
Code and shall maintain the CDP Source Code in the same manner, and under the
same controls and conditions as it maintains its own proprietary and
confidential source code.
(b) Except as provided in this Agreement, Mobius agrees that it shall not
divulge, disclose or otherwise make available to third parties the CDP Source
Code, without the express prior written consent of CDP, which consent shall not
be unreasonably withheld.
(c) Mobius agrees not to use the CDP Source Code or any part thereof
during the License Fee Period to develop any software, or source material for
creating software, which may compete with the CDP Software.
(d) During the License Fee Period and for one year thereafter, Mobius
agrees not to solicit, directly or indirectly, any of CDP's * OEMs or strategic
partners for the purpose of developing, licensing to or otherwise promoting an
object designed solely to * .
2.4 Turnover and Training
CDP shall provide Mobius with up to 10 days (in two or three sessions, at
times mutually agreeable to the parties) of turnover and training on-site at
Mobius' offices in New Rochelle, New York. A senior CDP representative,
knowledgeable in both versions of the CDP Source Code, shall be made available
for such purposes. Mobius shall reimburse CDP for all reasonable travel and
living expenses incurred pursuant to this Section 2.4. Unless otherwise agreed
to in writing by the parties, six months from the date of delivery as set forth
in Section 2.1(a) hereof all remaining rights to turnover and training services
as set forth herein shall terminate regardless of whether any turnover and
training days have accrued to such date, provided that CDP has not unduly
delayed the delivery of such services.
2.5 Acceptance
(a) Upon delivery of the CDP Source Code, Mobius shall have two business
days (the "Approval Period") after delivery thereof within which to approve or
reject the CDP Source Code. If Mobius does not reject or approve the CDP Source
Code within the Approval Period, the CDP Source Code shall be deemed to be
accepted by Mobius.
- ------------
*The Redacted Material Has Been Separately Filed With The Commission.
4
<PAGE> 6
(b) All to be conducted by Mobius during the Approval Period (the
"Acceptance Tests") shall be conducted on a single computer disconnected from
any network and all such testing shall be conducted in the presence of a senior
CDP developer. The Acceptance Tests shall consist solely of (i) establishing
that the CDP Source Code compiles and link edits, and (ii) confirming that the
compiled files of the CDP Source Code accurately compared to the CDP Software.
(c) If, upon conducting the Acceptance Tests Mobius has a reasonable
objection to the CDP Source Code, Mobius may reject the CDP Source Code. In such
event, Mobius will deliver to CDP within the Approval Period a notice setting
forth the specific reasons for rejection and CDP shall make commercial and
reasonable efforts to make the appropriate changes and redeliver the revised CDP
Source Code. Mobius shall again be entitled to an Approval Period to accept or
reject the revised CDP Source Code.
2.6 Modifications to the * Version of the CDP Source Code
Prior to September 30, 1997, CDP shall deliver to Mobius a modified
copy of the * version of the CDP Source Code with * as set forth in the
memorandum of Mobius to CDP dated August 8, 1997, a copy of which is attached
hereto as Schedule D.
2.7 Update of the * Version of the CDP Source Code
Once available, CDP shall deliver to Mobius an update of the *
version of the CDP Source Code and such update shall include (i) the
modifications to such source code as are set forth in the memorandum of Mobius
to CDP dated August 11, 1997, a copy of which is attached hereto as Schedule E,
and (ii) the * set forth in Schedule D.
ARTICLE 3 - TITLE AND OWNERSHIP
3.1 Property of CDP
The entire Intellectual Property Right, title and interest in the
CDP Source Code shall be retained as the sole property of CDP. Mobius
acknowledges and agrees that this Agreement does not transfer to Mobius any
Intellectual Property Right, title or interest with respect to the CDP Source
Code and that all such Intellectual Property Rights, title and interest belong
exclusively to CDP.
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
5
<PAGE> 7
3.2 Enhancements
Mobius shall own the entire Intellectual Property Right, title and
interest in any Enhancements to the CDP Source Code developed by or on behalf of
Mobius. Unless otherwise provided in writing, CDP shall own the entire
Intellectual Property Right, title and interest in all Enhancements to the CDP
Source Code not developed by or on behalf of Mobius. Any Enhancements made by or
on behalf of Mobius shall not in any way prohibit or affect CDP's right to
develop any Enhancements to the CDP Source Code for its own purposes or for
other licensees.
ARTICLE 4 - CONFIDENTIAL INFORMATION
4.1 Confidentiality Obligation
(a) Mobius shall use no less than the same means it uses to protect its
similar confidential and proprietary information, but in any event not less than
reasonable means, to prevent the disclosure and to protect the confidentiality
of the Confidential Information. Mobius agrees that it will not use the
Confidential Information except for the purposes of this Agreement and as
authorized herein.
(b) Mobius acknowledges that the CDP Source Code constitutes Confidential
Information which information shall not be accessed other than by Mobius and its
employees, officers, directors and duly authorized agents who reasonably require
such access for the purposes of this Agreement and who are required to protect
the confidentiality of the Confidential Information. Mobius agrees to strictly
enforce such requirements with regards to the Confidential Information.
(c) Notwithstanding subsections 4.1(a) and 4.1(b), Mobius may use or
disclose the Confidential Information to the extent that such Confidential
Information is (i) already known by Mobius without an obligation of
confidentiality, (ii) publicly known or becomes publicly known through no
unauthorized act of Mobius, (iii) rightfully received from a third party, (iv)
independently developed by Mobius without use of the Confidential Information,
(v) approved by CDP for disclosure, or (vi) required to be disclosed pursuant to
a requirement of a governmental agency or law so long as Mobius provides CDP
with notice of such requirement prior to any such disclosure and takes all
reasonable steps available to maintain the information in confidence.
4.2 Return of Confidentiality Information
Upon the termination of this Agreement and upon the request of CDP,
Mobius will return to CDP all documents and
6
<PAGE> 8
information, however recorded, including but not limited to drawings,
specifications, descriptions, or other papers, tapes, or any other media which
contain any of the Confidential Information.
4.3 Loss of Confidential Information
In the event of any unauthorized disclosure or loss of, or inability
to account for Confidential Information, Mobius will notify CDP immediately.
4.4 Equitable Relief
Mobius acknowledges and agrees that the Confidential Information
constitutes valuable trade secrets of CDP, and that any unauthorized
reproduction and/or disclosure of such information by Mobius may cause
irreparable harm for which CDP's remedies at law may be inadequate. Mobius
hereby agrees that CDP may be entitled, in addition to any other remedies
available to it at law or in equity, to seek injunctive relief to prevent the
breach or threatened breach of Mobius' obligations hereunder.
ARTICLE 5 - PRICE AND PAYMENT
5.1 License Fees
As compensation for the rights granted herein and in satisfaction of
Mobius' OEM Royalty obligations pursuant to the OEM Agreement, Mobius shall be
charged and agrees to pay the license fees (the "License Fees") at the times and
in the amounts as set out in Schedule B. All License Fees are in United States
dollars.
5.2 Taxes and Import Duties
Except as stated above, License Fees are exclusive of all local
jurisdiction, sales, use, occupational or similar taxes now in force or enacted
in future, all of which shall be paid by Mobius, except for such taxes as are
imposed on CDP's income, which shall be paid by CDP. Mobius is responsible for
obtaining and providing to CDP any certificate of exemption or similar document
required to exempt any sale or license from sales, use or similar tax liability.
5.3 Late Payment Charges
Notwithstanding any other rights or remedies CDP may have under this
Agreement or at law, if Mobius falls to pay any amounts within 30 days after
payment is due, interest on overdue
7
<PAGE> 9
amounts shall accrue at the rate of 18% per annum (1.5% per month) on such
unpaid amounts.
ARTICLE 6 - WARRANTIES, INDEMNITIES, LIMIT OF LIABILITY
6.1 Warranty
The CDP Source Code is provide "AS-IS" without any warranty
whatsoever except that CDP warrants and represents to Mobius that it is the
owner of the CDP Source Code and that it has full right and authority to enter
into this Agreement.
6.2 Disclaimer
(a) EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, CDP MAKES NO
CONDITIONS OR WARRANTIES, EITHER EXPRESSED OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY CONDITION OR WARRANTY OF
MERCHANTABILITY OR MERCHANTABLE QUALITY OF THE SOFTWARE OR ITS FITNESS FOR ANY
PARTICULAR PURPOSE AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A
COURSE OF DEALING OR USAGE OF TRADE. IN NO EVENT WILL CDP BE LIABLE FOR ANY
DAMAGES, INCLUDING BUT NOT LIMITED TO (i) DAMAGES CAUSED BY THE MOBIUS' FAILURE
TO PERFORM ITS COVENANTS AND RESPONSIBILITIES, FOR ANY REASON, INCLUDING,
WITHOUT LIMITATION, CDP'S NEGLIGENCE; (ii) DAMAGES CAUSED BY REPAIRS OR
ALTERATIONS DONE WITHOUT CDP'S WRITTEN APPROVAL; (iii) DAMAGES DUE TO
DETERIORATION DURING PERIODS OF STORAGE BY THE MOBIUS, (iv) LOST DATA; OR (v)
ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
6.3 Limit of Liability
CDP'S LIABILITY FOR DAMAGES TO MOBIUS FOR ANY CAUSE (OTHER THAN AS
CONTEMPLATED BY SECTION 6.4 BELOW), REGARDLESS OF THE FORM OF ACTION INCLUDING
NEGLIGENCE, SHALL NOT EXCEED THE LICENSE FEES PAID BY MOBIUS PURSUANT TO THIS
AGREEMENT DURING THE TWENTY-FOUR MONTHS PRIOR TO THE MONTH IN WHICH MOBIUS
NOTIFIES CDP OF SUCH CLAIM OR POTENTIAL CLAIM.
6.4 Patent Copyright and Trade Secret Indemnification
(a) At its expense, CDP will defend any action brought against
Mobius, and pay all reasonable expenses and damages of Mobius, for any claims
that the CDP Source Code infringes a patent, copyright or trade secret of a
third party (a "Source Code Infringement") effective in Canada or the United
States provided Mobius notifies CDP promptly in writing of the action (and all
prior claims relating to such action) and gives CDP sole control of the defence
and negotiations for its settlement or compromise. CDP shall pay all damages and
costs awarded therein
8
<PAGE> 10
against Mobius but shall not be responsible for any compromise made without its
consent. In the event of a final judgment which prohibits Mobius' continued use
of the CDP Source Code by reason of a Source Code Infringement, or if at any
time CDP is of the opinion that the CDP Source Code is likely to become the
cause of an action for infringement, CDP's sole obligation will be to use its
best efforts to (i) obtain, at no additional cost to Mobius, the rights to
continued use of the CDP Source Code; (ii) replace or modify the CDP Source Code
so that it is no longer infringing, but maintaining equivalent functionality to
the infringing part; or (iii) remove and refund the amount paid to CDP in
License Fees by Mobius, less two percent per month of use as depreciation.
(b) Notwithstanding Subsection 6.4(a), CDP shall have no liability for any
Source Code Infringement or claim thereof based on (i) use of other than the
unaltered CDP Source Code not approved in writing by CDP, (ii) use of a
combination of the CDP Source Code with software, data or equipment not approved
in writing or supplied by CDP, (iii) use of CDP Source Code with Enhancements
developed by or for Mobius, or (iv) use of the CDP Source Code in a manner for
which the CDP Source Code was not designed.
(c) At its expense, Mobius will defend any action brought against CDP and
pay all reasonable expenses and damages of CDP for any claims, suit or
proceeding that (i) an Enhancement or Enhancements developed by or for Mobius,
(ii) use of the CDP Source Code other than as contemplated by this Agreement, or
(iii) use of the CDP Source Code as modified, altered or combined with any
equipment, device or software not supplied or approved by CDP, infringes a
patent, copyright or trade secret of a third party effective in Canada or the
United States provided CDP notifies Mobius promptly in writing of the action
(and all prior claims relating to such action) and gives Mobius sole control of
the defence and negotiations for its settlement or compromise. Mobius shall pay
all damages and costs awarded therein against CDP but shall not be responsible
for any compromise made without its consent.
ARTICLE 7 - TERM AND TERMINATION
7.1 Term and Termination
This Agreement will commence on the date first written above and
will remain in force unless terminated hereunder.
9
<PAGE> 11
7.2 Termination for Default
In the event Mobius fails to cure any material breach of this
Agreement which is capable of cure within ten business days of receipt of
written notice thereof from CDP, then CDP, in its sole discretion, shall, in
addition to any other remedy which it may be entitled to at law, have the right
to terminate this Agreement by written notice to Mobius on a date specified
therein. CDP shall have the right to terminate this Agreement by notice in
writing to Mobius in the event Mobius fails to cure any breach of this Agreement
which is not capable of cure including a breach of Article 4 (which shall be
deemed not to be curable).
7.3 Termination upon Insolvency
Either party may terminate this Agreement if the other party is
dissolved, becomes insolvent, passes a resolution for its winding up (or an
order is made by a court of competent jurisdiction for the winding up of the
other party), an administration order is made in relation to the other party or
a receiver, trustee, or liquidator is appointed over, or takes possession of,
any of the other party's assets, the other party makes an arrangement or
composition with its creditors generally, the other party makes an assignment
for the benefit of its creditors or an application to a court of competent
jurisdiction for protection from its creditors generally, or the other party
ceases operations.
7.4 Termination of OEM Agreement
This Agreement shall automatically terminate upon CDP's termination
of the OEM Agreement for material breach by Mobius during the License Fee
Period.
7.5 Survival
The parties hereto agree that the provisions hereof requiring
performance or fulfillment after the expiry or earlier termination of this
Agreement shall survive such expiry or earlier termination. Articles 3, 4 and 5
and Sections 2.2, 2.3, 6.3, 6.4, 7.5 and 7.6 shall survive the termination of
this Agreement.
7.6 Effect of Termination
Within five business days of the effective date of the termination
of this Agreement, Mobius shall return to CDP all copies of the CDP Source Code
in its possession or under its control.
10
<PAGE> 12
ARTICLE 8 - AMENDMENTS TO THE OEM AGREEMENT
AND TERMINATION OF THE ESCROW AGREEMENT
8.1 Amendments to the OEM Agreement
The OEM Agreement is hereby amended by:
(i) deleting Section 1.1 in its entirety and replacing it with the
following new Section 1.1:
1.1 "Added Value" means the value to be added by the OEM to
the CDP Products by embedding the CDP Products in any
Mobius product.
(ii) insert a new Section 1.6.1.1 as follows:
"License Fee Period" shall have the meaning set forth in the
Source Code License Agreement between Mobius and CDP dated
August 12, 1997.
(iii) amend Section 1.9 by (i) adding the words "or any portion or
element thereof" following the words "software programs" and
prior to the words "listed on", and (ii) deleting the words
"and all future modifications and enhancements thereto" at the
end of Section 1.9.
(iv) inserting in the first sentence of the first paragraph of
Section 2.1(i) the word "perpetual," following the words
"grants OEM the" and before the word "non-exclusive" and (ii)
the words ", during the License Fee Period," following the
words "condition that" and before the words "the OEM only".
(v) deleting Section 3 in its entirety.
(vi) amend Section 6.1 by (a) inserting the word "perpetual,"
following the word "a" and before the word "non-exclusive",
(b) deleting the word "and" following the words "this
Agreement" and replacing it with the words "(i) during the
License Fee Period and subject," and (c) inserting at the end
of the first sentence of Section 6.1 the words ", and (ii)
upon the conclusion of the License Fee Period, for any use
whatsoever, provided
11
<PAGE> 13
such use is not otherwise restricted by this Agreement."
(vii) amending Section 6.4 by inserting at the beginning of the
fourth sentence of the first paragraph of Section 6.4 the
words "During the License Fee Period."
(viii) deleting Articles 12 and 13 in their entirety;
(ix) amending Section 16.1 by inserting at the beginning of the
second sentence the words, "During the License Fee Period";
(x) deleting Section 19.1.3 and the first paragraph of Section
19.2 each in their entirety;
(xi) deleting Schedule A in its entirety;
(xii) deleting the sentence under the heading "Software" in Schedule
B, in its entirety and replacing it with "The object code to
the * version of CDP's * and the object code to the * version
of CDP's * , as described in Schedule A to the Source Code
License Agreement between CDP and Mobius dated August 12,
1997."; and
(xiii) deleting the table and sentence preceding the table in
Schedule B in its entirety and replacing it with the following
"The payment of OEM of the License Fees (as such term is
defined in the Source Code License Agreement between CDP and
Mobius dated August 12, 1997) payable under such Source Code
License Agreement shall fully satisfy any and all OEM Royalty
obligations of OEM hereunder. Following the end of the License
Fee Period, no further OEM Royalties shall be payable."
8.2 Confirmation of OEM Agreement
The OEM Agreement as amended hereby, is hereby ratified and
confirmed in all respects, and is binding upon the parties thereto and their
successors.
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
12
<PAGE> 14
8.3 Termination of the Escrow Agreement
Effective upon acceptance of the CDP Source Code, the Escrow
Agreement shall be terminated and Mobius acknowledges that as of such date it
shall have no further rights thereunder. Mobius hereby consents to the delivery
of the Source Materials (as such term is defined in the Escrow Agreement) to CDP
and agrees to deliver to CDP the form of notice set forth in Schedule C hereto
upon receipt of the CDP Source Code.
8.4 Conflicts with OEM Agreement
In the event there is any conflict or inconsistency between the
terms of OEM Agreement and the terms of this Agreement, the terms of this
Agreement shall govern.
ARTICLE 9 - GENERAL
9.1 Headings
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof', "hereunder" and similar expressions refer to this
Agreement and not to any particular Article or Section or other portion hereof
and include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles or
Sections are to Articles or Sections of this Agreement.
9.2 Extended Meanings
In this Agreement words importing the singular number only shall
include the plural and vice versa, and words importing persons shall include
individuals, partnerships, associations, unincorporated organizations and
corporations. The terms "provision" and "provisions" refer to terms, conditions,
provisions, covenants, obligations, undertakings, warranties and representations
in this Agreement.
9.3 Ambiguities
The parties hereto agree that each of them has participated in the
drafting of this Agreement and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Agreement.
13
<PAGE> 15
9.4 Assignment
This Agreement shall be binding on the parties hereto and their
respective successors and assigns. Neither party may, or shall have the power
to, assign this Agreement or the benefit thereof, in whole or in part, except
(i) with the prior written consent of the other party, which consent shall not
be unreasonably withheld, and (ii) by either party in connection with the sale
of all or substantially all of its property and assets or in connection with a
merger, amalgamation, or other reorganization of the party, provided that the
successor or assignee, as the case may be, undertakes in writing to the other
party to be bound by the provisions of this Agreement.
9.5 Amendments and Waiver
No modification of or amendment to this Agreement shall be valid or
binding unless set forth in writing and duly executed by the parties hereto and
no waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided, shall be limited to the
specific breach waived.
9.6 Further Assurances
Each of the parties hereto shall from time to time execute and
deliver all such further documents and instruments and do all acts and things as
the other party may reasonably require to effectively carry out this Agreement.
9.7 Consents and Approvals
Where a party is required hereunder to grant a consent or an
approval, unless something in the subject matter or context is inconsistent
therewith, the granting of the consent or the approval shall not be unreasonably
withheld or delayed.
9.8 Notices
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
first business day after personal delivery, delivery by overnight courier
service or transmittal by facsimile, on the fifth business day after being sent
by First Class Mail, postage prepaid, as follows:
14
<PAGE> 16
(a) If to CDP, to:
CDP Communications Inc.
25 Adelaide Street East, Suite 700
Toronto, Ontario
M5C 3Al
Attention: President
Facsimile No.: (416) 865-9650
(b) If to Mobius, to:
Mobius Management Systems, Inc.
One Ramada Plaza
New Rochelle, New York 10801
Attention: President
Facsimile No.: (914) 637-1789
If a party changes its address for notification purposes, then it shall give the
other party written notice of the new address and the date on which it shall
become effective.
9.9 Severability
If a court or other lawful authority of competent jurisdiction
declares any provision, Article or Section of this Agreement invalid, illegal or
unenforceable, this Agreement will continue in full force and effect with
respect to all other provisions, Articles and Sections and all rights and
remedies accrued under such other provisions, Articles and Sections will survive
any such declaration.
9.10 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
9.11 Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and cancels and supersedes any
prior understandings and agreements between the parties hereto with respect
thereto.
9.12 Counterparts
This Agreement may be executed in any number of counterparts which
may be delivered by facsimile transmission, each of which shall be deemed to be
an original and all of which taken together shall be deemed to constitute one
and the same
15
<PAGE> 17
instrument, and it shall not be necessary in establishing proof of this
Agreement to produce or account for more than one such counterpart.
IN WITNESS WHEREOF the parties have executed this Agreement.
CDP COMMUNICATIONS INC.
BY: /s/ R.Saarimaki
----------------------------------
Name: R.Saarimaki
Title: President
MOBIUS MANAGEMENT SYSTEMS, INC.
BY: /s/ Joseph J. Albracht
----------------------------------
Name: Joseph J. Albracht
Title: Executive Vice President
16
<PAGE> 18
SCHEDULE A
DESCRIPTION OF CDP SOURCE CODE
The CDP * consists of two major components:
o *
o *
*
The transform component consists of the following sub components:
o *
o *
o *
o *
The conversion component is * . * . This lets the applications program
control the persistence * . * .
This same conversion logic applies to all * . The conversion * and the *
communicates through * .
The viewing and printing component renders * pages and objects * .
*
*
*
*
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 19
SCHEDULE B
LICENSE FEES
(1) Mobius acknowledges that all sums previously paid by Mobius to CDP pursuant
to the OEM Agreement have been fully earned by CDP for services rendered prior
to the date of this Agreement.
(2) Upon execution of this Agreement and prior to delivery of the CDP Source
Code, Mobius shall pay the amount set forth on the invoice enclosed as Appendix
B1 to this Schedule and Mobius acknowledges that such amount constitutes the OEM
Royalties outstanding under the OEM Agreement as at the date immediately prior
to the date of this Agreement and that such amount is due and payable to CDP in
addition to any amount earned by CDP as referred to in (1) to this Schedule B.
(3) Upon acceptance of the CDP Source Code in accordance with Section 2.5 of
this Agreement and for the initial * of the Agreement, a License Fee shall be
payable on the last day of each calendar month in the amounts set forth below:
<TABLE>
<CAPTION>
Year Monthly Fee
---- -----------
<S> <C>
* *
* *
* *
* *
* *
* *
</TABLE>
Following the end of the * , no further License Fees shall be payable.
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 20
APPENDIX B1
CDP Communications Inc. INVOICE
& Electronic File Imaging Systems, Inc.
25 Adelaide Street East, Suite 700 INVOICE No: MOB500
Toronto, Ontario M5C 3A1 DATE: 1 August, 1997
416.865.9966 Fax 416.865.9650
To: Mobius Managements, Inc. Ship To:
One Ramada Plaza Same
New Rochelle, NY 10801
Attn: Mitch Gross
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
SALESPERSON PO NUMBER DATE SHIPPED SHIPPED VIA F.O.B. POINT TERMS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COD
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
QUANTITY DESCRIPTION UNIT PRICE AMOUNT
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
o * *
o * *
o * *
o All sales reported in 7/11/97 account schedule
o US Funds
- -----------------------------------------------------------------------------------------
SUBTOTAL *
GST 7% TAX
PST 8% TAX
----------
TOTAL DUE *
----------
</TABLE>
Make all checks payable to: CDP Communications Inc.
If you have any questions concerning this invoice, call: Melissa Cole,
416-865-9966
THANK YOU FOR YOUR BUSINESS!
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 21
SCHEDULE C
NOTICE
To: FileSafe, Inc.
Re: Escrow Agreement dated April 21, 1994 between CDP Communications Inc.,
Mobius Management Systems, Inc. and FileSafe, Inc. (the "Escrow
Agreement")
The undersigned each hereby agree to the termination of the Escrow
Agreement as of the date hereof and direct FileSafe Inc. to release all escrowed
materials to CDP Communications Inc.
DATED August 12, 1997
CDP COMMUNICATIONS INC.
By:
--------------------------------
MOBIUS MANAGEMENT SYSTEMS, INC.
By:
--------------------------------
<PAGE> 22
SCHEDULE D
MOBIUS Memorandum
To: Ted Dunlop
Rick Saarimaki
From: Joe Albracht
Date: August 11, 1997
Subject: *
<TABLE>
<CAPTION>
================================================================================
Date
Incident Reported Symptom Status
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
710144 1/30/97 * 8/6-- *
- --------------------------------------------------------------------------------
720601 4/4/97 * 8/11 *
- --------------------------------------------------------------------------------
750549 6/6/97 *. 8/11--*
- --------------------------------------------------------------------------------
720715 4/7/97 * 8/6-- *
750961
- --------------------------------------------------------------------------------
740176 6/27/97 * 8/11-- *.
- --------------------------------------------------------------------------------
760935 8/4/97 *. 8/11-- *
================================================================================
</TABLE>
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 23
SCHEDULE E
MOBIUS Memorandum
To: Ted Dunlop
Rick Saarimaki
From: Joe Albracht
Date: August 11, 1997
Subject: *
<TABLE>
<CAPTION>
================================================================================
Date
Issue Reported Description Status
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1 8/6/97 * 8/6 *
- --------------------------------------------------------------------------------
2 8/6/97 * 8/6 *
- --------------------------------------------------------------------------------
3 8/6/97 * 8/6 *.
- --------------------------------------------------------------------------------
4 8/6/97 *. 8/6 *
- --------------------------------------------------------------------------------
5 *.
- --------------------------------------------------------------------------------
6 *
- --------------------------------------------------------------------------------
7 * *
================================================================================
</TABLE>
- ----------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 1
Exhibit 10.22
CONFIDENTIAL TREATMENT REQUESTED
AMENDMENT NO. 1 TO
LICENSE AND AMENDMENT TO OEM AGREEMENT
AMENDMENT NO. 1 TO SOURCE CODE LICENSE AND AMENDMENT TO AGREEMENT
(this "Amendment") between CDP Communications Inc., a corporation incorporated
under the laws of the Province of Ontario ("CDP") and Mobius Management Systems,
Inc., a corporation incorporated under the laws of the State of Delaware
("Mobius").
WHEREAS:
(a) CDP and Mobius entered into an OEM Agreement dated as of October
15, 1993, as amended on July 18, 1995, pursuant to which (the OEM "Agreement")
granted Mobius certain rights to the object code of CDP's * .
(b) On August 12, 1997, CDP and Mobius entered into a Source Code
License Amendment to OEM Agreement (the "Agreement") pursuant to which, among
other things, the OEM Agreement was amended and CDP granted Mobius certain
rights with respect to the CDP Source Code (as such term and any other
capitalized term used herein not otherwise defined is defined in the Agreement).
(c) CDP and Mobius have agreed to modify the License Fees and
certain other provisions of the Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and in the Agreement and the payment by each of the parties to
the other of the sum of ten dollars($10.00) and other good and valuable
consideration (the adequacy and the amount of which as to each of the parties
hereto is hereby mutually acknowledged), the parties hereto covenant and agree,
is appropriate, to amend the Agreement as follows:
1. Section 1.1(h) of the Agreement shall be amended to provide that
the term " License Fee Period" shall mean the period ending on the date of this
Amendment.
2. Schedule B, paragraph (3) to the Agreement shall be amended to
provide that upon the date of this Agreement, Mobius shall pay CDP the sum * in
full satisfaction of its License Fees obligations from the Agreement and the OEM
Agreement. Such payment shall be made by Mobius via wire transfer to the trust
account * of McCarthy Tetrault, Toronto, Ontario, counsel to CDP, at the
Toronto-Dominion Bank, and upon such payment, the License Fees shall be payable
by Mobius.
- --------
* The Redacted Material Has Been Separately Filed With The Commission.
<PAGE> 2
3. In the event there is any conflict or inconsistency between the
terms of the Agreement and this Amendment, the terms of this Amendment shall
govern.
4. CDP and Mobius confirm that except as specifically amended by
this Amendment, the Agreement shall remain in full force and effect.
5. This Amendment may be executed in any number of counterparts
which may be delivered by facsimile transmission, each of which shall be deemed
to be an original and all of which taken together shall constitute one and the
same instrument, and it shall not be necessary in establishing proof of this
Amendment to produce or account for more than one such counterpart.
IN WITNESS WHEREOF the parties have executed this Amendment on this
day 21st of November, 1997.
CDP COMMUNICATIONS INC.
By:/s/ R. Saarimaki
----------------
Name: R. Saarimaki
Title:President
MOBIUS MANAGEMENT SYSTEMS, INC.
By: /s/ Joseph J. Albracht
----------------------
Name: Joseph J. Albracht
Title: Executive Vice President
