<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 23, 1997
REGISTRATION NO. 333-21565
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------------------
PSW TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 7373 74-2796054
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
------------------------
6300 BRIDGEPOINT PARKWAY, BUILDING 3, SUITE 200, AUSTIN, TEXAS 78730
(512) 343-6666
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
------------------------------
DR. W. FRANK KING
CHIEF EXECUTIVE OFFICER
6300 BRIDGEPOINT PARKWAY, BUILDING 3, SUITE 200
AUSTIN, TEXAS 78730
(512) 343-6666
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
RICHARD R. PLUMRIDGE, ESQ. R.W. SMITH, JR., ESQ.
BABAK YAGHMAIE, ESQ. STEPHEN A. RIDDICK, ESQ.
BROBECK, PHLEGER & HARRISON LLP PIPER & MARBURY L.L.P.
1633 BROADWAY 36 SOUTH CHARLES STREET
NEW YORK, NEW YORK 10019 BALTIMORE, MARYLAND 21202-3010
(212) 581-1600 (410) 539-2530
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of Common Stock being registered. All amounts are estimates except
the SEC registration fee, the NASD filing fee and the Nasdaq National Market
listing fee.
<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
------------
<S> <C>
SEC registration fee............................................................ $ 13,905
NASD filing fee................................................................. 5,089
Nasdaq National Market listing fee.............................................. 38,491
Printing and engraving.......................................................... 175,000
Legal fees and expenses......................................................... 450,000
Accounting fees and expenses.................................................... 225,000
Directors and Officers insurance................................................ 300,000
Blue sky fees and expenses...................................................... 5,000
Transfer agent fees............................................................. 10,000
Miscellaneous................................................................... 127,515
------------
Total....................................................................... $ 1,350,000
------------
------------
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act"). Article IX of the Registrant's Amended and Restated
Certificate of Incorporation provides for indemnification of its directors and
officers and permissible indemnification of employees and other agents to the
maximum extent permitted by the Delaware General Corporation Law. Reference is
also made to Section 8 of the Underwriting Agreement contained in Exhibit 1.1
hereto, which sets forth certain indemnification provisions. If commercially
feasible, the Registrant intends to obtain liability insurance for its officers
and directors.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Registrant has sold and issued the following securities during the past
three years (all information gives effect to an 11,250-for-1 forward split of
the Registrant's issued and outstanding shares of Common Stock effected on
December 18, 1996 and an 8-for-13 reverse split of the Registrant's issued and
outstanding Common Stock effected on April 2, 1997):
(a) ISSUANCES OF COMMON STOCK
On October 1, 1996, the Registrant issued 5,538,463 shares of Common Stock
to Pencom Systems Incorporated ("Pencom") in consideration of the contribution
by Pencom to the Registrant of certain assets and associated liabilities of
Pencom's software division and a portion of a software contract that had
previously been allocated to other operations of Pencom, which net assets
amounted to approximately $2.1 million.
On January 1, 1997, the Registrant sold 8,000 shares of Common Stock to
Michael J. Maples at a price of $6.25 per share.
II-1
<PAGE>
(b) OPTION ISSUANCES TO EMPLOYEES AND DIRECTORS
From October 2, 1996 to March 31, 1997, the Registrant granted options to
purchase a total of 1,196,710 shares of Common Stock at exercise prices ranging
from $.04 to $9.00 per share to employees and directors of the Registrant.
(c) WARRANT ISSUANCES
On October 1, 1996, the Registrant issued warrants to purchase 507,654
shares of Common Stock to Pencom and certain Pencom employees at an exercise
price of $.04 per share in connection with the Spin-Off.
The above securities were offered and sold by the Registrant in reliance
upon an exemption from registration under either (i) Section 4(2) of the
Securities Act as transactions not involving any public offering or (ii) Rule
701 under the Securities Act. No underwriters were involved in connection with
the sales of securities referred to in this Item 15.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------------------------------------------
<C> <S>
**1.1 Form of Underwriting Agreement.
**3.1 Certificate of Incorporation of the Registrant, as amended to date.
**3.2 Form of Amended and Restated Certificate of Incorporation of the Registrant to be filed prior to
completion of the public offering.
**3.3 Bylaws of the Registrant.
**3.4 Form of Amended and Restated Bylaws of the Registrant to be effective upon the completion of the
public offering.
**4.1 Specimen Common Stock Certificate.
**4.2 See Exhibits 3.1, 3.2, 3.3 and 3.4 for provisions of the Certificate of Incorporation and Bylaws of
the Registrant defining rights of holders of Common Stock of the Registrant.
**5.1 Opinion of Brobeck, Phleger & Harrison LLP.
**10.1 Bridgepoint Lease Agreement dated October 31, 1996 between the Registrant and Investors Life Insurance
Company of North America.
**10.2 Lease Guarantee effective January 31, 1997 between the Registrant and Pencom Systems Incorporated.
**10.3 Office Lease dated April 25, 1996 between G&W Investment Partners and Pencom Systems Incorporated, as
amended.
**10.4 Agreement of Lease dated May 13, 1996 between Newport L.G.-I, Inc. and Pencom Systems Incorporated.
+10.5 Software Development Agreement having an effective date of March 9, 1994 between the Registrant and
Canon Computer Systems, Inc., as amended.
+10.6 Software Licensing Agreement having an effective date of June 13, 1996 between the Registrant and
Canon Computer Systems Incorporated.
**10.7 Service Agreement No. 200.504 dated as of November 26, 1990 between the Registrant and International
Business Machines Corporation, as amended to date.
**10.8 Software Task Order Agreement dated as of November 20, 1995 between the Registrant and Tivoli Systems,
Inc., as amended.
**10.9 Loan Agreement dated November 16, 1995 between Tivoli Systems Inc. and the Registrant.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------------------------------------------
<C> <S>
+10.10 Software & Methodology Licensing Agreement dated as of November 4, 1996 between the Registrant and
Embarcadero Systems Corporation.
**10.11 Reseller Agreement dated November 4, 1996 between the Registrant and Embarcadero Systems Corporation.
**10.12 Credit Agreement dated November 8, 1996 between the Registrant and Texas Commerce Bank National
Association, as amended.
**10.13 Promissory Note dated November 8, 1996 from the Registrant to Texas Commerce Bank National
Association.
**10.14 Accounts Receivable Agreement dated October 1, 1996 between the Registrant and Pencom Systems
Incorporated.
**10.15 Letter Agreement dated October 2, 1996 between the Registrant and Pencom Systems Incorporated.
**10.16 Recruiting Services Agreement dated January 20, 1997 between the Registrant and Pencom Systems
Incorporated.
**10.17 Stockholders Agreement dated October 1, 1996 between the Registrant and certain stockholders of the
Registrant.
**10.18 Registration Rights Agreement dated October 1, 1996 between the Registrant and certain stockholders
and warrantholders of the Registrant.
**10.19 Promissory Note dated October 19, 1995 from Dr. William Frank King to Pencom Systems Incorporated.
**10.20 Employment Agreement dated October 19, 1992 between Dr. William Frank King and Pencom Systems
Incorporated.
**10.21 Employment Agreement dated October 1, 1996 between Dr. W. Frank King and the Registrant.
**10.22 Employment Agreement dated July 1, 1993 between the Registrant and Patrick Motola.
**10.23 Employment Agreement dated September 27, 1993 between the Registrant and William Cason.
**10.24 Employment Agreement dated October 19, 1993 between the Registrant and Brian Baisley.
**10.25 Employment Agreement dated July 18, 1994 between the Registrant and William Sutton Wimberley, Jr.
**10.26 1996 Stock Option/Stock Issuance Plan.
**10.27 Employee Stock Purchase Plan.
**10.28 PSW Profit Sharing Plan.
**10.29 Description of Executive Bonus Plan.
**10.30 Stock Purchase Agreement dated as of January 1, 1997 between Michael J. Maples and the Registrant.
**10.31 Stock Subscription dated October 1, 1996 between Pencom Systems Incorporated and the Registrant.
**10.32 Asset Contribution Agreement dated October 1, 1996 between Pencom Systems Incorporated and the
Registrant.
**10.33 Assignment and Assumption Agreement dated October 1, 1996 between the Registrant and Pencom Systems
Incorporated.
**10.34 Warrant dated October 1, 1996 issued by the Registrant to Pencom Systems Incorporated.
**10.35 Warrant dated October 1, 1996 issued by the Registrant to Stephen Markman.
**10.36 Warrant dated October 1, 1996 issued by the Registrant to Thomas Pallister.
**10.37 Warrant dated October 1, 1996 issued by the Registrant to Joy Venegas.
**11.1 Computation of pro forma net income per share.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------------------------------------------
<C> <S>
**23.1 Consent of Ernst & Young LLP.
**23.2 Consent of Margolin, Winer & Evens LLP.
**23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
**24. Power of Attorney.
**27.1 Financial Data Schedule.
**27.2 Financial Data Schedule.
**27.3 Financial Data Schedule.
**27.4 Financial Data Schedule.
**27.5 Financial Data Schedule.
**27.6 Financial Data Schedule.
**27.7 Financial Data Schedule.
</TABLE>
- ------------------------
** Previously filed.
+ The Company has applied for confidential treatment with respect to certain
portions of these documents. The portions of the documents which have been
omitted are denoted by an asterisk [*]. The omitted portions of these
documents have been filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933.
(b) Financial Statement Schedules
Schedule (II) -- Valuation and Qualifying Accounts
All other Financial Statement Schedules have been omitted because the
information required to be set forth therein is not applicable or not required
under the instructions contained in Regulation S-X or because the information is
included elsewhere in Financial Statements or notes thereto.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1993 may be permitted to directors, officers and controlling persons of the
Registrant, pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1993, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424 (b) (1) or
(4) or 497 (h) under the Securities Act of 1993 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1993, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 5 TO REGISTRATION STATEMENT NO. 333-21565 TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF AUSTIN, STATE OF TEXAS, ON THIS 22ND DAY OF MAY, 1997.
PSW TECHNOLOGIES, INC.
By: /s/ DR. W. FRANK KING
-----------------------------------------
Dr. W. Frank King
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON MAY 22, 1997:
SIGNATURE TITLE
--------------------------------- ------------------------------------------
By: /s/ DR. W. FRANK KING President, Chief Executive Officer and
------------------------------ Director
Dr. W. Frank King (Principal Executive Officer)
By: *PATRICK D. MOTOLA Senior Vice President of Operations,
------------------------------ Chief Financial Officer and Secretary
Patrick D. Motola (Principal Financial Officer)
By: *KEITH D. THATCHER Vice President of Finance and Treasurer
------------------------------ (Principal Accounting Officer)
Keith D. Thatcher
By: *WADE E. SAADI Chairman of the Board of Directors
------------------------------
Wade E. Saadi
By: *EDWARD C. ATEYEH, JR. Director
------------------------------
Edward C. Ateyeh, Jr.
By: *JONATHAN D. WALLACE, ESQ. Director
------------------------------
Jonathan D. Wallace, Esq.
By: *KEVIN B. KURTZMAN Director
------------------------------
Kevin B. Kurtzman
By: *MICHAEL J. MAPLES Director
------------------------------
Michael J. Maples
By: *THOMAS A. HERRING Director
------------------------------
Thomas A. Herring
*By: /s/ DR. W. FRANK KING
------------------------------
Dr. W. Frank King
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
- ---------- ----------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
**1.1 Form of Underwriting Agreement.
**3.1 Certificate of Incorporation of the Registrant, as amended to date.
**3.2 Form of Amended and Restated Certificate of Incorporation of the Registrant to be filed prior
to completion of the public offering.
**3.3 Bylaws of the Registrant.
**3.4 Form of Amended and Restated Bylaws of the Registrant to be effective upon the completion of
the public offering.
**4.1 Specimen Common Stock Certificate.
**4.2 See Exhibits 3.1, 3.2, 3.3 and 3.4 for provisions of the Certificate of Incorporation and
Bylaws of the Registrant defining rights of holders of Common Stock of the Registrant.
**5.1 Opinion of Brobeck, Phleger & Harrison LLP.
**10.1 Bridgepoint Lease Agreement dated October 31, 1996 between the Registrant and Investors Life
Insurance Company of North America.
**10.2 Lease Guarantee effective January 31, 1997 between the Registrant and Pencom Systems
Incorporated.
**10.3 Office Lease dated April 25, 1996 between G&W Investment Partners and Pencom Systems
Incorporated, as amended.
**10.4 Agreement of Lease dated May 13, 1996 between Newport L.G.-I, Inc. and Pencom Systems
Incorporated.
+10.5 Software Development Agreement having an effective date of March 9, 1994 between the Registrant
and Canon Computer Systems, Inc., as amended.
+10.6 Software Licensing Agreement having an effective date of June 13, 1996 between the Registrant
and Canon Computer Systems Incorporated.
**10.7 Service Agreement No. 200.504 dated as of November 26, 1990 between the Registrant and
International Business Machines Corporation, as amended to date.
**10.8 Software Task Order Agreement dated as of November 20, 1995 between the Registrant and Tivoli
Systems, Inc., as amended.
**10.9 Loan Agreement dated November 16, 1995 between Tivoli Systems Inc. and the Registrant.
+10.10 Software & Methodology Licensing Agreement dated as of November 4, 1996 between the Registrant
and Embarcadero Systems Corporation.
**10.11 Reseller Agreement dated November 4, 1996 between the Registrant and Embarcadero Systems
Corporation.
**10.12 Credit Agreement dated November 8, 1996 between the Registrant and Texas Commerce Bank National
Association, as amended.
**10.13 Promissory Note dated November 8, 1996 from the Registrant to Texas Commerce Bank National
Association.
**10.14 Accounts Receivable Agreement dated October 1, 1996 between the Registrant and Pencom Systems
Incorporated.
**10.15 Letter Agreement dated October 2, 1996 between the Registrant and Pencom Systems Incorporated.
**10.16 Recruiting Services Agreement dated January 20, 1997 between the Registrant and Pencom Systems
Incorporated.
**10.17 Stockholders Agreement dated October 1, 1996 between the Registrant and certain stockholders of
the Registrant.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
- ---------- ----------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
**10.18 Registration Rights Agreement dated October 1, 1996 between the Registrant
and certain stockholders and warrantholders of the Registrant.
**10.19 Promissory Note dated October 19, 1995 from Dr. William Frank King to Pencom
Systems Incorporated.
**10.20 Employment Agreement dated October 19, 1992 between Dr. William Frank King
and Pencom Systems Incorporated.
**10.21 Employment Agreement dated October 1, 1996 between Dr. W. Frank King and the
Registrant.
**10.22 Employment Agreement dated July 1, 1993 between the Registrant and Patrick
Motola.
**10.23 Employment Agreement dated September 27, 1993 between the Registrant and
William Cason.
**10.24 Employment Agreement dated October 19, 1993 between the Registrant and Brian
Baisley.
**10.25 Employment Agreement dated July 18, 1994 between the Registrant and William
Sutton Wimberley, Jr.
**10.26 1996 Stock Option/Stock Issuance Plan.
**10.27 Employee Stock Purchase Plan.
**10.28 PSW Profit Sharing Plan.
**10.29 Description of Executive Bonus Plan.
**10.30 Stock Purchase Agreement dated as of January 1, 1997 between Michael J.
Maples and the Registrant.
**10.31 Stock Subscription dated October 1, 1996 between Pencom Systems Incorporated
and the Registrant.
**10.32 Asset Contribution Agreement dated October 1, 1996 between Pencom Systems
Incorporated and the Registrant.
**10.33 Assignment and Assumption Agreement dated October 1, 1996 between the
Registrant and Pencom Systems Incorporated.
**10.34 Warrant dated October 1, 1996 issued by the Registrant to Pencom Systems
Incorporated.
**10.35 Warrant dated October 1, 1996 issued by the Registrant to Stephen Markman.
**10.36 Warrant dated October 1, 1996 issued by the Registrant to Thomas Pallister.
**10.37 Warrant dated October 1, 1996 issued by the Registrant to Joy Venegas.
**11.1 Computation of pro forma net income per share.
**23.1 Consent of Ernst & Young LLP.
**23.2 Consent of Margolin, Winer & Evens LLP.
**23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
**24. Power of Attorney.
**27.1 Financial Data Schedule.
**27.2 Financial Data Schedule.
**27.3 Financial Data Schedule.
**27.4 Financial Data Schedule.
**27.5 Financial Data Schedule.
**27.6 Financial Data Schedule.
**27.7 Financial Data Schedule.
</TABLE>
- ------------------------
** Previously filed.
+ The Company has applied for confidential treatment with respect to certain
portions of these documents. The portions of these documents which have been
omitted are denoted by an asterisk [*]. The omitted portions of these
documents have been filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933.
<PAGE>
Exhibit 10.5*
SOFTWARE DEVELOPMENT AGREEMENT
This Software Development Agreement ("Agreement") having an Effective Date
of March 9, 1994 is made between Canon Computer Systems, Inc., a California
corporation, with offices at 2995 Red Hill Avenue, Costa Mesa, California 92626
(hereinafter called "CCSI") and Pencom Systems Incorporated, a New York
corporation, with offices at 150 Broadway, New York, New York 10038 (hereinafter
called "PENCOM").
WHEREAS, PENCOM possesses certain technical information and know how
relating to the development of software systems based on object oriented
technology;
WHEREAS, CCSI desires to retain PENCOM to use its technical information
and know how to develop a wholesale distribution system for tracking CCSI's
imports and exports, monitoring inventory, processing customer orders, tracking
distribution of CCSI products, and generating sales and marketing reports.
WHEREAS, PENCOM desires to perform such services and develop the
Deliverables in accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties agree as follows:
1. DEFINITIONS.
1.1. "Software Project" shall mean the efforts undertaken by PENCOM to
develop new software and related Deliverables under the terms and conditions of
this Agreement and in accordance with the schedule and at prices set forth in
Section 4 of this Agreement.
1.2. "Software Package" shall mean the design, development and
implementation of the NeXTSTEP software to be developed for CCSI pursuant to the
efforts undertaken by PENCOM as set forth in Section 2 and shall include all
Pre-Existing Software used therein.
1.3. "Specifications" shall mean the technical criteria for the Software
Package set forth in Attachment A to this Agreement.
1.4. "Intellectual Property Rights" shall mean all inventions, trade
secrets, know-how, developments, improvements, results, data, designs, computer
programs/software and other information in any form, patentable or unpatentable,
patented or unpatented, copyrighted or uncopyrighted, copyrightable or not,
which
* Confidential treatment is requested for certain portions of Exhibit 10.5
pursuant to Rule 406 under the Securities Act of 1933. The portions of
Exhibit 10.5 which have been omitted are denoted by an asterisk [*]. The
omitted portions of Exhibit 10.5 have been filed with the Securities and
Exchange Commission pursuant to Rule 406 under the Securities Act of 1933.
<PAGE>
are conceived, created, written, developed, reduced to practice, acquired, owned
or controlled by PENCOM pursuant to this Agreement.
1.5. "Deliverables" shall mean any and all tangible products developed by
PENCOM for CCSI under this Agreement, including all object diagrams, functional
specifications, prototypes, class libraries, the "source" code and object code
for the Software Package, and all necessary documentation. The Deliverables
shall be provided in three phases. A list of all Phase One and Phase Two
Deliverables is set forth in Attachment A to this Agreement. A list of Phase
Three Deliverables shall be provided by PENCOM on or before the date given in
Section 4.1 of the Agreement as the conclusion of Phase Two of the Software
Project.
1.6. "Phase Three Amendment" shall mean the amendment to this Agreement
between the parties stating the schedule, fees, and certain other terms of Phase
Three of the Software Project.
1.7. "Pre-Existing Software" shall mean any of PENCOM's proprietary
software products existing as of the date of this Agreement necessary for the
development, implementation and use of the Software Package, including any third
party software licensed to PENCOM for use in its products and any software in
the public domain, and listed as an attachment to the Phase Three Amendment.
1.8. "Alpha-Test Version" shall mean the Phase Three Deliverables for each
module of the Software Package except for the user's manual that will implement
all features and functions of the module but may contain minor errors in the
execution of the functions.
2. SCOPE OF SERVICES.
PENCOM will perform the Software Project and develop the Software Package.
As set forth in Section 6 of this Agreement, CCSI will own all Deliverables.
2.1. Phase One of the Software Project. On or before the date given in
Section 4.1 of the Agreement as the conclusion of Phase One of the Software
Project, PENCOM shall provide CCSI with all Phase One Deliverables.
2.2. Phase Two of the Software Project. On or before the date given in
Section 4.1 of the Agreement as the conclusion of Phase Two of the Software
Project, PENCOM shall provide CCSI with all Phase Two Deliverables.
2.3. Phase Three of the Software Project. Subject to CCSI's acceptance of
the Phase One and Two Deliverables and the parties' executing the Phase Three
Amendment, PENCOM will develop the agreed-upon Phase Three Deliverables using
generally accepted programming techniques. To the extent that some specific
- 2 -
<PAGE>
requirements for the Software Package may not be known at this time, PENCOM will
endeavor to provide flexibility in the Phase Three Deliverables to be able to
meet these requirements. PENCOM will deliver each Alpha-Test Version and the
final Phase Three Deliverables, including the object code, the source code,
system and user documentation, by the dates specified in the Phase Three
Amendment. System documentation, including source code documentation, will be
completed to a level sufficient for a skilled programmer to adequately support
the Deliverables. User documentation shall describe screens, menus, and
functions of the Software Package and shall be adequately indexed to serve as a
reference manual.
2.4. Support, Training, Maintenance, Upgrades, and Special Projects. For a
period of one (1) year after CCSI's final acceptance of all the Phase Three
Deliverables pursuant to Section 3.4 of the Agreement ("the Warranty Period"),
PENCOM will provide CCSI with corrections to reproducible defects for the
Software Package at no charge. Specific support, training and maintenance
requirements and fees will be addressed in the Phase Three Amendment or in
subsequent amendments to this Agreement. At CCSI's request, PENCOM also agrees
to assist in developing upgrade plans and to use commercially reasonable efforts
to cause the Software Package to remain compatible with the NeXTSTEP platform
and the Oracle interface, including new versions of, or new models replacing,
the NeXTSTEP platform and the Oracle interface, and to provide CCSI with testing
assistance to certify such compatibility. Such upgrades and special projects
requested by CCSI will be performed at the development rates specified in
Section 4.5.
2.5. Progress. During this Agreement, PENCOM shall keep CCSI informed of
its progress on the Software Project and shall promptly notify CCSI in the event
of any anticipated delay in the Schedule as set forth in Section 4 or the Phase
Three Amendment.
3. ACCEPTANCE.
3.1. Phase One Deliverables. CCSI will have thirty (30) days from its
receipt of the Phase One Deliverables to evaluate them and specify any changes
or modifications needed prior to the commencement of Phase Two. In the event
that CCSI determines that the Phase One Deliverables are inadequate, CCSI may
elect in writing to terminate this Agreement as set forth in Section 12.2 of the
Agreement and shall specify in writing the grounds why such Phase One
Deliverables are inadequate, except that PENCOM shall be limited to ten (10)
days to cure any breach of the Agreement under this section. CCSI's acceptance
shall not be unreasonably withheld and shall be based on the completeness,
quality, and timeliness of the Phase One Deliverables.
- 3 -
<PAGE>
3.2. Phase Two Deliverables. CCSI will have thirty (30) days from the
receipt of the Phase Two Deliverables to evaluate them and specify changes or
modifications to the Specifications that PENCOM will incorporate in the design
of the Phase Three Deliverables. In the event that CCSI determines that the
Phase Two Deliverables are inadequate, CCSI may elect in writing to terminate
this Agreement as set forth in Section 12.2 of the Agreement and shall specify
in writing the grounds why such Phase Two Deliverables are inadequate, except
that PENCOM shall be limited to ten (10) days to cure any breach of the
Agreement under this section. CCSI's acceptance shall not be unreasonably
withheld and shall be based on the completeness, quality, and timeliness of the
Phase Two Deliverables.
3.3. Alpha-Test Version Acceptance. PENCOM shall deliver to CCSI two (2)
copies of the Alpha-Test Version for each Software Package module by the dates
specified in the Phase Three Amendment. CCSI shall have thirty (30) days
thereafter in which to evaluate each Alpha-Test Version and accept or reject it
in writing. In the event CCSI rejects an Alpha-Test Version, CCSI shall specify
in writing the grounds for the rejection and PENCOM shall use its best efforts
to make it Alpha-Test Version conform with the applicable Specifications set
forth in Attachment A as soon as possible. PENCOM shall continue to use its best
efforts to make the Alpha-Test Version conform to the applicable Specifications
set forth in Attachment A and acceptable to CCSI until CCSI accepts the
Alpha-Test Version or elects in writing to terminate this Agreement as set forth
in Section 12.2 of the Agreement. CCSI's acceptance of each Alpha-Test Version
shall not be unreasonably withheld.
3.4. Final Acceptance. PENCOM shall deliver to CCSI two (2) copies of the
Phase Three Deliverables by the date specified in the Phase Three Amendment.
CCSI shall have ninety (90) days thereafter in which to evaluate them and accept
or reject them in writing. In the event that CCSI rejects them, CCSI shall
specify in writing the grounds for the rejection and PENCOM shall use its best
efforts to make them conform with the Specifications as soon as possible. PENCOM
shall continue to use its best efforts to make the Phase Three Deliverables
conform to the Specifications and acceptable to CCSI until CCSI accepts the
Phase Three Deliverables or terminates this Agreement as set forth in Section
12.2 of the Agreement. CCSI's acceptance shall not be unreasonably withheld.
4. SCHEDULE AND FEES.
4.1. Schedule. Performance of the services will conform to the following
schedule:
PENCOM will commence Phase One of the Software Project no later than
March 15, 1994;
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The Phase One Deliverables shall be submitted to CCSI for approval
under Section 3.1 no later than April 26, 1994;
PENCOM will commence Phase Two of the Software Project no later than
May 2, 1994;
The Phase Two Deliverables shall be submitted to CCSI for approval
under Section 3.2 no later than June 20, 1994; and
PENCOM will commence Phase Three of the Software Project no later
than June 27, 1994.
The dates set forth above are subject to adjustment based on the application of
Section 4.7 of this Agreement. The Phase One and Two Deliverables will be
completed according to the schedules provided in Attachment B to this Agreement.
4.2. Payment of Fees for Phase One of the Software Project. CCSI will pay
to PENCOM the sum of $95,000 for the Phase One Deliverables based on the
following schedule:
$47,500 upon the execution of this Agreement; and
$47,500 upon CCSI's acceptance of the Phase One Deliverables.
4.3. Payment of Fees for Phase Two of the Software Project. CCSI will pay
to PENCOM the sum of $115,000 for the Phase Two Deliverables based on the
following schedule:
$57,500 upon PENCOM's commencement of Phase Two of the Software
Project; and
$57,500 upon CCSI's acceptance of the Phase Two Deliverables.
4.4. Payment of Fees for Phase Three Deliverables. The fees for Phase
Three of the Software Project and the payment schedule for such fees will be set
by the Phase Three Amendment.
4.5. Payment of Fees for Upgrades and Special Projects. For all upgrades
and special projects not otherwise provided free of charge under this Agreement,
such upgrades and projects shall be performed at PENCOM's discounted rates as
listed in Attachment C to this Agreement.
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4.6. Payment of Fees for Expenses. CCSI shall be billed separately for all
reasonable and necessary travel, meal and lodging expenses directly associated
with PENCOM's provision of on-site development and training services to CCSI.
CCSI shall not be responsible for any expenses incurred in violation of PENCOM's
travel and entertainment policy, attached as Attachment D to this Agreement.
4.7. Phase and Payment Overlap. Upon completion of each phase of the
Software Project and upon CCSI's receipt of the Deliverables for that phase,
PENCOM is authorized to begin the next phase of the Software Project unless:
(1) CCSI has notified PENCOM to delay startup of the next phase;
or
(2) PENCOM has not received the startup payment for the next
phase.
If either (1) or (2) above occur and CCSI notifies PENCOM that there will be a
delay between phases of more than one (1) week, then PENCOM shall have the right
to reassign its employees and independent contractors on a short-term project
for up to two (2) weeks between the applicable phases, and the schedule
specified in Section 4.1 of this Agreement will be adjusted accordingly.
5. CONFIDENTIALITY AND EXCLUSIVITY.
5.1. CCSI Information. In connection with this Agreement, CCSI has
provided and shall provide PENCOM with certain information that is proprietary
and confidential to CCSI and necessary or useful for PENCOM to perform its
services.
5.2. Confidentiality. The term "Confidential Information" as used herein
shall mean any information disclosed by CCSI to PENCOM pursuant to Section 5.1
above in a written or other tangible form clearly identified as being
confidential. Oral or visual information shall not be considered as Confidential
Information unless it is designated confidential at the time of oral or visual
disclosure and reduced to a writing clearly marked as being confidential that is
sent to PENCOM by CCSI within thirty (30) days after such oral or visual
disclosure. For the purpose of this Agreement, any Deliverable shall be deemed
Confidential Information.
5.3. Treatment of Confidential Information. During this Agreement and
thereafter, PENCOM shall keep the Confidential Information in strict confidence
and shall not disclose it to any person, firm or corporation outside PENCOM, nor
use the same for any purpose other than performing the Agreement. In addition,
PENCOM agrees to safeguard the Confidential Information by restricting its
internal dissemination to only those employees within PENCOM having a need to
know the Confidential Information for purposes of this Agreement. PENCOM has
full
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responsibility to ensure that all employees who are given access to the
Confidential Information maintain the confidentiality of the Confidential
Information, whether or not such employees continue to be employees of PENCOM.
Notwithstanding the limitations of Section 5.3, PENCOM may disclose Confidential
Information to such independent contractors that PENCOM hires for the specific
purpose of working on the Software Project, provided such persons have signed
the Independent Contractor Agreement attached as Attachment E. PENCOM has full
responsibility to ensure that all independent contractors who are given access
to the Confidential Information maintain the confidentiality of the Confidential
Information, whether or not such independent contractors continue to be engaged
by PENCOM.
5.4. Exceptions to Treatment of Confidential Information. Notwithstanding
Section 5.3 above, PENCOM shall have no confidential obligation and no use
restriction hereunder with respect to any Confidential Information that:
(1) is already known to PENCOM at the time of disclosure thereof
as evidenced by written records;
(2) is or becomes publicly known through no wrongful act of PENCOM
at or subsequent to the time of disclosure thereof; or
(3) is permitted for release by prior written consent of CCSI.
5.5. Tangible Embodiments. Any and all written or tangible embodiments of
information disclosed to PENCOM by CCSI hereunder shall be and remain the
property of CCSI, and PENCOM agrees promptly to return such tangible
embodiments, including any copy thereof, to CCSI upon completion of this
Agreement.
5.6. PENCOM Information. It is understood that CCSI does not desire to
receive any confidential information from PENCOM and accordingly, with respect
to any information provided by PENCOM, including all Deliverables, CCSI shall
have no confidential obligation and no use restriction and CCSI may freely use
such information for any purpose without restriction, including taking the
information and/or Deliverables to a third party for completion or modification
of a software object technology-based system based on the information contained
in the Deliverables.
5.7. Intellectual Property. Except to the extent necessary to perform
PENCOM's obligations hereunder, no license or right, expressed or implied, is
hereby conveyed or granted to PENCOM for any invention, patent application,
patent, copyright, know how, trade secret or other intellectual property of
CCSI.
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5.8. Trademarks. No license or right, expressed or implied, is hereby
conveyed or granted to PENCOM to use any trademark of CCSI in any advertising,
marketing, or distribution of the Deliverables by PENCOM, without the prior
express written consent of CCSI.
5.9. Enforcement. PENCOM understands and agrees that the obligations and
restrictions provided herein are necessary and reasonable in order to protect
the business of CCSI, and CCSI would be irreparably harmed by any breach or
threatened breach hereof. In addition to any other remedies available for breach
thereof, CCSI shall be entitled to obtain injunctive relief against a threatened
breach or continuation of any such breach, without the necessity of providing
actual damages.
6. OWNERSHIP.
6.1. Works Made for Hire. All Intellectual Property Rights embodied in the
Deliverables are hereby assigned to and shall be the property of CCSI. All
copyrightable subject matter included in the Deliverables shall be owned
exclusively by CCSI and shall be deemed works made for hire for purposes of the
U.S. Copyright Act. PENCOM also agrees to cooperate with CCSI in preparing
and/or executing any necessary documents required for the filing of applications
covering the foregoing Intellectual Property Rights.
6.2. Assignment of Ownership. If any copyrightable subject matter in the
Deliverables shall be determined not to be a work made for hire or if ownership
of all right, title, and interest of copyrights therein shall not otherwise be
deemed to vest exclusively in CCSI, PENCOM without additional compensation shall
forthwith assign to CCSI the ownership of all such subject matter together with
all rights arising from such copyright ownership, including works created by
independent contractors hired for the Software Project, and CCSI shall have the
right to register in its own name all copyrights therein. PENCOM further agrees
to deliver to CCSI assignments of any and all Intellectual Property Rights in a
form satisfactory to CCSI and its legal counsel.
6.3. Inventions. Any new or improved idea, design, concept, or other
invention made or developed solely by PENCOM, its employees, and its independent
contractors or jointly with CCSI in the course of creation of the Deliverables
shall be promptly disclosed to CCSI by PENCOM in a complete disclosure. At
CCSI's option, a complete written disclosure on any such idea, design, concept
or other invention will be provided to it by PENCOM at an agreed upon hourly or
daily rate after an estimate and approval of such expense is obtained. PENCOM
assigns to CCSI all right, title and interest in and to any such invention,
together with the right to file patent applications with respect thereto in any
country. PENCOM shall, upon the request of CCSI, execute all such other
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instruments and documents as CCSI may reasonably request in connection
therewith.
6.4. License of Pre-Existing Software. PENCOM will grant to CCSI a
royalty-free, irrevocable, worldwide right and license to use, maintain,
execute, reproduce, display, perform, modify, and sublicense all Pre-Existing
Software not already in the public domain necessary for the implementation and
use of the Software Package.
6.5. Limited License of Software Package. Based on terms and conditions to
be negotiated in the Phase Three Amendment to this Agreement (including but not
limited to the payment of royalties) and subject to the parties executing the
Phase Three Amendment and CCSI's acceptance of the Phase Three Deliverables,
CCSI will grant to PENCOM the worldwide right and license to use a
functionality, structure, sequence, or organization similar to that contained in
the Software Package in developing software for third parties where PENCOM
performs such development without reference to the Software Package.
Notwithstanding the foregoing grant, PENCOM shall not use a functionality,
structure, sequence, or organization similar to that contained in the Software
Package to perform any consulting services or develop any software for third
parties engaged in, or about to become engaged in, research and development,
production, marketing, distribution, selling, or leasing of products or services
in the fields of computers and computer peripherals. This restriction shall
commence on the Effective Date of this Agreement and shall expire (a) at the end
of Phase Two if the parties do not execute a Phase Three Amendment; (b) on the
third year anniversary of CCSI's final acceptance of the Phase Three
Deliverables; or (c) on the first anniversary of CCSI's termination of this
Agreement under Section 12.2 due to Pencom's failure to deliver conforming and
acceptable Phase Three Deliverables.
7. WARRANTIES.
7.1. Warranties and Representations of CCSI. CCSI represents and warrants
to PENCOM that it has the authority to authorize PENCOM to perform the Software
Project and develop the Deliverables.
7.2. Warranties and Representations of PENCOM. PENCOM represents and
warrants (a) that it has the right to disclose and make available to CCSI all
Pre-Existing Software; (b) that it has the right to grant all rights granted to
CCSI herein; (c) that the Deliverables and the Software Package will not
infringe any patent, copyright, trademark or trade secret or other proprietary
right of any person; (d) that it will not use any trade secrets or confidential
or proprietary information owned by any third party in developing the
Deliverables and Software Package; and that neither PENCOM nor any company or
individual developing the Deliverables and Software Package pursuant to this
Agreement is under any obligation to assign or give any work done under this
Agreement to any third party. PENCOM warrants (a) that all people working on the
Software Project will be (i) employees whose
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normal duties include the functions they will perform on the Software Project or
(ii) independent contractors who have signed the Independent Contractor
Agreement attached hereto as Attachment E, and (b) that it will perform its
obligations under this Agreement in accordance with all applicable laws.
7.3. Warranties of Performance of the Software Package. During the
Warranty Period, PENCOM warrants that the Software Package will conform to and
perform according to the Specifications, operate within the system performance
parameters (to be provided by PENCOM as a Phase Two Deliverable) and to operate
in the technical environment specified in Attachment F to this Agreement. PENCOM
will correct any nonconformities, errors or discrepancies in the Software
Package that are identified by CCSI or by PENCOM during this warranty period as
soon as possible after CCSI informs PENCOM of any breach of this warranty.
7.4. Limitation of Warranties. OTHER THAN THE WARRANTIES GIVEN IN SECTIONS
7.2 AND 7.3 OF THIS AGREEMENT, PENCOM MAKES NO OTHER WARRANTY, EXPRESS OR
IMPLIED, AND ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, THE WARRANTIES
OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY
EXCLUDED. IN NO EVENT SHALL EITHER PARTY, OR ITS DIRECTORS, OFFICERS, EMPLOYEES
AND/OR CONSULTANTS BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, SPECIAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION ANY CLAIMS FOR LOST PROFITS
OR LOST SAVINGS, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
8. RECRUITING SERVICES.
During Phase Two of the Software Project, CCSI, at its sole option, may engage
PENCOM to recruit NeXTSTEP developers for employment by CCSI beginning with the
start of Phase Three. If CCSI engages PENCOM to recruit on its behalf, PENCOM
shall use its best efforts to perform such recruiting services on the following
terms and conditions:
8.1. PENCOM's sole fee for its recruiting services shall be in the amount
equal to twenty-five percent (25%) of any hired candidate's first year salary,
exclusive of any bonuses.
8.2. PENCOM shall not solicit or recruit from CCSI.
8.3. No candidate shall be referred to CCSI until he or she has been
personally interviewed by PENCOM, thoroughly screened and determined appropriate
as a referral to CCSI. To be an appropriate referral, the candidates must meet
the requirements set by CCSI and provided to PENCOM at a later date.
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8.4. PENCOM shall not withhold candidate information which CCSI would
reasonably consider essential to its hiring decision.
8.5. Candidates shall be referred only with the candidates' express prior
consent.
8.6. Neither PENCOM nor any of its employees shall ever discriminate in
the provision of PENCOM's recruiting services on the basis of race, creed,
color, national origin, religion, sex, marital status, affectional preference,
handicap, age or any other legally proscribed criteria.
8.7. Fees will be due and payable as follows: fifty percent (50%) within
thirty (30) business days of the hired candidate's start date and fifty percent
(50%) within thirty (30) business days of the four (4) month anniversary of the
hired candidate's start date. Notwithstanding the payment schedule of this
section, no payments for recruiting services shall be due from CCSI to PENCOM
until CCSI has received a written invoice from PENCOM for such services.
8.8. Should the hired candidate leave voluntarily or be dismissed by CCSI
for any reason within four (4) months of the start date, PENCOM shall be given
thirty (30) days to refill the position at no additional cost to CCSI. Should
PENCOM be successful in providing an acceptable replacement within the thirty
(30) day period, PENCOM may retain the full fee. Should PENCOM be unsuccessful
in providing an acceptable replacement, PENCOM shall refund the fee.
8.9. Should the hired candidate leave voluntarily or be dismissed by CCSI
for any reason after four (4) months of employment but prior to completing eight
(8) months of employment, PENCOM shall be given thirty (30) days to refill the
position at no additional cost to CCSI. Should PENCOM be successful in providing
an acceptable replacement within the thirty (30) day period, PENCOM may retain
the full fee. Should PENCOM be unsuccessful in providing an acceptable
replacement, PENCOM shall refund fifty percent (50%) of the fee.
8.10. CCSI shall be under no obligation to hire candidates referred by
PENCOM, and shall be free to recruit candidates either on its own or through the
use of other recruiters.
9. NON-SOLICITATION.
9.1. Restriction. Subject to the exceptions contained in Sections 9.2 and
9.3 of this Agreement, during the term of this Agreement and for a period of six
(6) months thereafter, neither party shall solicit for employment or employ,
directly or
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indirectly, whether as an employee, independent contractor or otherwise, any
employee of the other.
9.2. Exception for Recruiting. The non-solicitation restriction shall not
apply to any employees recruited by PENCOM for employment by CCSI.
9.3. Exception for Condition of Pencom. The non-solicitation restriction
shall not apply in the event that PENCOM attempts to execute or executes an
assignment for the benefit of creditors, PENCOM becomes or is adjudicated a
bankrupt or insolvent, PENCOM admits in writing its inability to pay its debts
generally as they become due, PENCOM files a petition under any federal or state
bankruptcy, receivership, or debtor relief statute, PENCOM becomes the subject
of an involuntary proceeding intending to discharge PENCOM's debts, or PENCOM's
assets become the subject of any attachment, sequestration, or similar
proceeding.
10. STAFFING.
The parties recognize that the following PENCOM employees are essential
for to PENCOM's performance of its obligations under this Agreement: Pat Motola,
Vice President and General Manager; Chris Chauvin, Project Manager/Business
Analyst; and Lorne Wilson, Lead Architect/Systems Analyst ("Key Employees").
Subject to the short-term exception contained in Section 4.7 of the Agreement,
PENCOM agrees that, until CCSI has given its final acceptance of the Phase Three
Deliverables pursuant to Section 3.4 of the Agreement, Mr. Chauvin and Mr.
Wilson will work full time on the Software Project. The parties further agree
that, should any of the Key Employees die, become incapacitated and unable to
perform his normal duties for more than thirty (30) days, or terminates his
employment with PENCOM, CCSI, at its sole discretion, may terminate the
Agreement pursuant to Section 12.2 of the Agreement, provided that PENCOM first
shall have an opportunity to locate a replacement satisfactory to CCSI within
the thirty (30) day cure period established by Section 12.2.
11. ACCESS TO CCSI PERSONNEL AND FACILITIES.
CCSI will provide PENCOM with access to appropriate personnel to provide
the information needed by PENCOM to perform its obligations under this
Agreement. While PENCOM employees and independent contractors are on-site, CCSI
will provide offices and reasonable access to its existing computer systems,
including all hardware and software described in Attachment F to this Agreement.
12. GENERAL.
12.1. Timeliness of Performance. PENCOM understands that prompt
development of the Deliverables hereunder is required by CCSI in order to meet
its
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schedules and commitments. In the event that any anticipated or actual delays in
meeting the deadlines specified in Section 4.1. are caused by the performance or
failure to perform of any PENCOM personnel or any other cause within the
reasonable control of PENCOM, PENCOM shall provide additional temporary
personnel, as requested by CCSI and at no charge to CCSI, in order to complete
the assignment involved in a timely manner. Neither party, however, shall be
responsible for any delays that are not due to such party's fault or negligence
or that could not reasonably have been foreseen or provided against.
12.2. Termination. This Agreement shall commence on the Effective Date and
shall continue in force thereafter until terminated in accordance with any of
the sections of this Agreement, or until the date set by the Phase Three
Amendment. This Agreement shall also terminate upon the bankruptcy or insolvency
of either party. In the event of a material breach of this Agreement by either
party, the other party may cancel this Agreement by giving thirty (30) days
prior written notice thereof; provided that this Agreement shall not terminate
if the party in breach has cured the breach of which it has been notified prior
to the expiration of the thirty (30) days. Upon termination, any Deliverables
(including drafts and works in progress) then in existence and not already in
CCSI's possession shall be delivered to CCSI. The following sections of this
Agreement shall survive completion or any termination of this agreement: 5, 6.4,
6.5, 9, 12.3, and 12.4.
12.3. Indemnification. PENCOM shall indemnify CCSI and any person, or
other entity who uses the Deliverables and/or Software Package and hold CCSI and
such other entities harmless from any loss, claim, liability, costs or expenses
(including attorneys' fees) or damage arising out of this Agreement to the
extent that such loss, claim or damage is caused by the negligence or
intentional acts of PENCOM or from PENCOM's breach of any term of this
Agreement. In no event will PENCOM's liability exceed the total cumulative
license, maintenance, consulting, and any other fees paid to PENCOM by CCSI
under this Agreement or any amendments thereto as of the date such claim arose.
This indemnity survives any termination of this Agreement.
12.4. Infringement Indemnity. PENCOM shall, at its own expense, defend any
suit instituted against CCSI which is based on an allegation that (a) the
Software Package provided to CCSI hereunder infringes or violates any copyright
or patent of any third party, (b) the Software Package contains, embodies or
incorporates any trade secret or proprietary information of any third party, or
(c) the use, license or modification of the Software Package constitutes a
violation of the trade secrets or proprietary rights of such third party, and
shall indemnify, hold harmless and defend CCSI against any claim, loss, expense
or judgment, including reasonable attorney's fees, which arises from any of the
preceding allegations (a) through (c), provided that CCSI gives PENCOM prompt
notice in writing of any such allegations and permits PENCOM through PENCOM's
counsel to defend the same and gives
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PENCOM all available information, assistance and authority to enable PENCOM to
assume such defense. PENCOM shall be permitted to control the defense of any
such suit, including appeals from any judgment therein and any negotiations for
the settlement or compromise thereof, with authority to enter into a settlement
or compromise with the prior written consent of CCSI, which will not be
unreasonably withheld. PENCOM shall have the affirmative obligation to
diligently and effectively defend against any such claim. If CCSI determines
that PENCOM is not diligently and effectively defending against such a claim,
CCSI shall have the absolute right and option to intervene in any such suit and
participate or assume control of the defense of the suit but will not have any
obligation to do so. In the event that any part of the Software Package is held
to infringe or otherwise violate the rights of others and its use is enjoined,
PENCOM shall promptly, at its option and expense, (a) procure for CCSI the right
to continue providing such Software Package consistent with the terms of this
Agreement, or (b) replace or modify such Software Package so that it no longer
infringes or violates such rights, provided however, that any such replacements
or modifications shall in no way lessen the functionality of the Software
Package and it will continue to fully perform in accordance with the
Specifications.
12.5. Status of Parties. PENCOM is and shall at all times be an
independent contractor and shall not be deemed an employee or agent of CCSI.
Nothing in this Agreement shall be deemed to create a partnership or joint
venture between the parties.
12.6. Complete Agreement. This Agreement and the Attachments hereto
contain the complete agreement between the parties and shall, as of the
Effective Date hereof, supersede all other agreements, if any, between the
parties relating to the performance of the Software Project and the development
of the Deliverables. The parties stipulate that neither of them has made any
representation with respect to the subject matter of this Agreement or the
execution and delivery hereof except such representations as are specifically
set forth herein. Each of the parties hereto acknowledges that it has relied on
its own judgment in entering into this Agreement.
12.7. Modifications. No modification, amendment, supplement to or waiver
of this Agreement shall be binding upon on the parties hereto unless made in
writing and duly signed by both parties.
12.8. Waiver. A failure of either party to exercise any right provided for
herein shall not be deemed a waiver of any right under this Agreement.
12.9. Assignment. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the respective parties.
PENCOM may not assign this Agreement in whole or in part, without the prior
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written consent of CCSI and any such attempted assignment shall be null and
void, provided that PENCOM may contract with other parties to provide services
hereunder subject to PENCOM's supervision, and provided further that PENCOM
shall be liable for having such other parties bear the same obligations and
restrictions of PENCOM contained herein and for securing CCSI's rights granted
herein.
12.10. Severability. In the event that any one or more of the provisions
of this Agreement is unenforceable, the enforceability of the remaining
provisions shall be unimpaired.
12.11. Governing Law. This Agreement shall be governed by, and interpreted
in accordance with, the substantive laws of the State of California.
12.12. Notices. Any notice which either party desires or is obligated to
give to the other party hereunder shall be in writing and delivered personally
or sent by certified mail, postage prepaid and addressed to the last known
address of the party which the notice is intended. As of the date hereof, any
notice to be given to CCSI shall be addressed to:
CCSI
2995 Red Hill Avenue
Costa Mesa, California 92626
Attention: Bruce Nolan, Director, Information Systems
CCSI
2995 Red Hill Avenue
Costa Mesa, California 92626
Attention: Frederick O'Reilly, Vice President, Operations
As of the date hereof, any notice to be given to PENCOM shall be addressed
to:
PENCOM Corporation
9050 Capital of Texas Highway
Austin, Texas 78759
Attention: Pat Motola, Vice President and General Manager
PENCOM Corporation
9050 Capital of Texas Highway
Austin, Texas 78759
Attention: Chris Chauvin, Project Manager/Business Analyst
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed
in duplicate by its duly authorized representative, to be effective as of the
date(s) written below.
CCSI PENCOM
Canon Computer Systems, Inc. Pencom Systems Incorporated
By: __________________________________ By: _______________________________
Frederick O'Reilly Wade Saadi
Vice President, Operations President
Date: ________________________________ Date: _____________________________
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Attachment A
I. Specifications
A. The code for the Software Package shall be written in the NeXTSTEP
programming language. The Software Package will have an interface
that runs in an Oracle environment.
B. [Additional details to be provided by Phase Three Amendment]
II. Deliverables
A. Phase One
1. Business Model: This document will identify the major business
objects in the problem domain, their attributes, class hierarchy,
and relationships. Pencom will use the Booch Object-Oriented
Analysis Methodology to document these specifications and will
include Booch class instance, process, and timing diagrams in
sufficient detail to clearly convey the system requirements.
2. Requirements Definition: This document will summarize the findings
of the data gathering effort, prioritizing the major findings by
level of perceived business impact. This document will be focused on
defining the areas and problems to be addressed by the new system,
the basic form that the functionality will take, and the return to
be expected from the improvements.
3. Data Dictionary: This document will define the data model elements
used by the business. Included will be a listing of each data
element, its type and size, and a description of the role and usage
of the data element.
4. Implementation plan, including scope of development
5. Staffing Plan for CCSI
6. Critical Component Prototype: A business-critical component of the
target system (such as the order processing module) will be selected
to be prototyped within a NeXTSTEP workstation environment. The
Prototype will be used to propose user-interface techniques, to test
and verify critical portions of the business model, and to
demonstrate a
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limited subset of end-user functionality. It is expected that the
Prototype will use a subset of real (but non-live) data.
B. Phase Two
1. System Model Definition: This document will expand on the set of
objects defined in the Business Model Definition, mapping business
objects into system objects. All critical system objects will be
identified, including their attributes, class hierarchy, and
relationships. These will include class, instance, and process and
timing diagrams in sufficient detail to move directly into detailed
design and implementation.
2. System Architecture Document: This document will specify the
underlying software and hardware architecture of the system,
including hardware requirements, third-party software requirements,
and the client/server distribution of functionality within the
system. Additionally, implications of wide-area networks on the
overall system design will be discussed. Key subsystems will be
identified and their interactions will be defined.
3. Database Schema Design: This document will define the underlying
Oracle database schema to be used by the new system. It will also
include the specification of the appropriate DBModel(s) required by
NEXTSTEP. If appropriate, this document will also include
adjustments and modifications to the schema to support third-party
tools such as AccessKit.
4. Functional Specification: This document will define the
functionality required to meet the specifications set forth in the
Requirements Definition. Additionally, this document will define the
end-user functionality of the new system, breaking it up into
functional subsystems. The user-interface and the supported
operations for each subsystem will be detailed as will the
interactions between subsystems.
5. Critical Component Prototype: The Prototype defined in Phase I will
be refined, increasing its functionality and validating critical
portions of the system model. The Prototype will serve as a
discussion vehicle to obtain additional user feedback and will also
provide a foundation to obtain baseline performance parameters.
6. System Performance Parameters:
C. Phase Three
A-2
<PAGE>
(to be provided by Phase Three Amendment)
A-3
<PAGE>
Attachment B
Schedule for Completion of Phase One and Two Deliverables
Phase I Schedule and Costs
Phase II Schedule and Costs
B-1
<PAGE>
Attachment C
PENCOM RATES
PENCOM STANDARD RATES
Skill Level hourly day week month 3 mo+
Engineer [*] [*] [*] [*] [*]
Senior Eng/Proj Mgr. [*] [*] [*] [*] [*]
Exec. (Dir., VP, higher) [*] [*] [*] [*] [*]
PENCOM DISCOUNTED RATES
Skill Level hourly day week month 3 mo+
Engineer [*] [*] [*] [*] [*]
Senior Eng/Proj Mgr. [*] [*] [*] [*] [*]
Exec. (Dir., VP, higher) [*] [*] [*] [*] [*]
C-1
<PAGE>
Attachment D
PENCOM Travel and Expense Policy
If several employees are traveling together, joint room charges or other
expenses not covered by room charges (for example, meals, long distance calls)
should be submitted on only one expense report (to be determined by employees).
EXTENDED TRAVEL COMPENSATION
Extended travel is defined as any assignment over 3 weeks (15 working
days) in duration. Compensation will be paid on a salaried basis and you will
not be eligible for overtime pay. (Pencom employees are classified as Exempt
employees which meet the federal wage and hour guidelines for either the
executive, professional or administrative classification.) The intent of this
policy is to defray extended travel expenses.
Additional compensation and benefits are listed below:
$25.00 ($35.00 in major cities) meal allowance
o Begins on the first day of assignment
$35.00 extended travel allowance
o Begins on the 16th working day
o Must be submitted through Travel Expense Account Forms (TEA) forms
One trip home every 15 working days
o Trips must be scheduled 21 days in advance in order to get the most
competitive fare
o Arrangements must be made through Pencom's travel agent
o Reimbursable car and motel expenses for travel home cannot exceed
equivalent air fare
o When travel home is authorized (such as, one trip every 15 working
days), no additional compensation or allowances are available while
on home leave
When you travel or entertain for Pencom, you should not incur a personal
financial loss nor should you spend extravagantly. Thus, be careful to keep
accurate records, to claim all you spend (provide original receipts), and to
follow the guidelines below. Check with your manager for additional guidelines
concerning travel that is billable to a client.
TRAVEL APPROVAL
Management approval is required prior to making travel arrangements. A
"Travel Request" form should be completed and turned into the Accounting
Department. An attempt will always be made to honor personal travel preferences,
however, if your reference results in any additional cost, you will be expected
to assume this addition expense. It is in everyone's best interest to travel in
the least costly way possible with consideration given to time and safety.
Travel arrangements are made through Pencom's travel agent -- Cindy Hansen at
Century Travel (512) 327-8760 or (800) 950-8314. The agent may request your
credit card number in order to secure guaranteed late arrival.
The Pencom travel agent provides travel services and tickets on a
corporate contract. If you choose not to use the Pencom travel agent, you will
be expected to assume any financial risk for cancelling tickets or reservations.
CREDIT CARD
All Pencom employees must have a major credit card, as well as a long
distance telephone calling card. If you are a frequent traveler, please consult
your manager about acquiring the American Express Corporate Card.
LONG DISTANCE CALLS
While at a hotel, use your telephone calling card for all long distance
calls, as hotels add substantial charges to calls put through their
switchboards.
D-1
<PAGE>
When you receive your phone bill, photocopy the itemized bill and
highlight those calls made while traveling for Pencom. Add the applicable tax to
the total, and enter it in your expense report. You are allowed to make one
phone call home a day.
RENTAL CAR
Pencom has enrolled in the American Express Car Rental Loss & Damage
Coverage program which provides primary coverage for Corporate Cardmembers. Each
time you rent a car from a rental agency using the American Express Corporate
Card, simply decline the Collision Damage Waiver offered by the agency and you
are automatically covered. Pencom will receive a $4 charge for each auto rental.
This fee will not appear on your monthly statement.
CAR EXPENSE
If you use your own car for business travel, the expenses incurred (for
gas or mileage) must not exceed those expenses incurred for other forms of
transportation. Pencom will reimburse you for actual tolls and estimated gas use
unless you normally drive an average of 50+ miles per week for Pencom business
(not including commuting to and from home). In that case, Pencom will pay $.24
per mile.
ACCOMMODATIONS
When Pencom is paying for your accommodations, Pencom uses double
occupancy rates at moderately priced hotels (for example, Holiday Inn, Ramada
Inn, and so on) whenever possible. Any upgrades will be at your personal
expense. If, for example, you wish to have a single room, you must pay half the
cost of a single occupancy room. It is expected that the minimum number and
configuration of rooms will be utilized when more than one (of the same sex)
employee travels. In-room movies and other extras may not be charged to Pencom.
Pencom can arrange direct billing with most hotels with advance notice.
MEAL ALLOWANCE
You will be compensated for your meals through a meal allowance of $25.00
per day ($35.00 per day in major cities). You do not need to itemize or provide
receipts for personal meals.
This amount assumes the following:
Breakfast $ 5.00 $ 7.00*
Lunch $ 8.00 $11.00*
Dinner $12.00 $17.00*
** Applicable only when traveling to major cities such as Detroit, Boston,
Chicago, New York, Los Angeles, San Francisco, Miami, Houston, Dallas, Seattle,
Atlanta, and Washington DC.
Subtract any meals that are paid for by someone else. If you entertain a
customer at Pencom's expense, charge the meal on your credit card. On your
travel expense report, subtract the above per meal amount from your daily meal
allowance and substitute the total cost of the meal charged on your credit card
on your daily meal expense.
EXPENSE REPORTS
An expense report must be completed within one week after each business
trip or project for which expenses have incurred. If your trip included air
travel, the airline ticket must accompany the expense report. All expense forms
must be approved by your manager and director and then submitted to the
Accounting Department for reimbursement. Supplemental expense reports can be
submitted after the primary expense report has been approved to account for
other travel expenses (for example, phone bills). Expense reports are found
on-line under Pencom/MiscInfo/Forms/ExpenseReport.imp or in hardcopy in the
filing cabinet behind the receptionist desk.
D-2
<PAGE>
Attachment E
Independent Contractor Agreement
This Agreement ("Agreement") having an Effective Date upon signature by
both the parties hereto, is made between Pencom Systems Incorporated, a New York
corporation, with offices at 150 Broadway, New York, New York 10038 (hereinafter
called "PENCOM") and ____________, an individual residing at ___________________
___________________________ ("Contractor").
WHEREAS, PENCOM has been hired by Canon Computer Systems, Inc., a
California corporation, with offices at 2995 Red Hill Avenue, Costa Mesa,
California 92626 ( "CCSI") to development a software system based on object
oriented technology, including without limitation, object and source code in the
NeXTSTEP programming language, documentation, and reference and user's manuals;
WHEREAS, PENCOM desires to retain Contractor's services for the Software
Project; and
WHEREAS, CONTRACTOR desires to perform such services;
NOW, THEREFORE, in consideration of the compensation to be paid by PENCOM
to CONTRACTOR, CONTRACTOR agrees to the following terms and conditions:
1. Confidentiality and Exclusivity.
1.1. CCSI Information. In connection with this Agreement, CCSI and PENCOM
shall provide CONTRACTOR with certain information that is proprietary and
confidential to CCSI and necessary or useful for PENCOM to perform its services.
1.2. Confidentiality. The term "Confidential Information" as used herein
shall mean any information disclosed by CCSI or PENCOM on behalf of CCSI to
CONTRACTOR pursuant to Section 1.1 above in a written or other tangible form
clearly identified as being confidential. Oral or visual information shall not
be considered as Confidential Information unless it is designated confidential
at the time of oral or visual disclosure and reduced to a writing clearly marked
as being confidential that is sent to CONTRACTOR by CCSI or PENCOM within thirty
(30) days after such oral or visual disclosure. For the purpose of this
Agreement, any Deliverable as identified in the attached exhibit, as that
exhibit may be amended from time to time, shall be deemed Confidential
Information.
1.3. Treatment of Confidential Information. During this Agreement and
thereafter, CONTRACTOR shall keep the Confidential Information in strict
confidence and shall not disclose it to any person, firm or corporation outside
PENCOM except for
E-1
<PAGE>
other independent contractors working on the CCSI project, nor use the
Confidential Information for any purpose other than performing the Agreement.
1.4. Exceptions to Treatment of Confidential Information. Notwithstanding
Section 1.3 above, CONTRACTOR shall have no confidential obligation and no use
restriction hereunder with respect to any Confidential Information that:
(1) is already known to CONTRACTOR at the time of disclosure
thereof as evidenced by written records;
(2) is or becomes publicly known through no wrongful act of
CONTRACTOR at or subsequent to the time of disclosure thereof;
or
(3) is permitted for release by prior written consent of CCSI.
1.5. Tangible Embodiments. Any and all written or tangible embodiments of
information disclosed to CONTRACTOR by PENCOM or CCSI hereunder shall be and
remain the property of CCSI, and CONTRACTOR agrees promptly to return such
tangible embodiments, including any copy thereof, to PENCOM upon completion of
this Agreement.
2. Ownership of Intellectual Property Rights.
2.1. Definition of Intellectual Property Rights. For purposes of this
Agreement, Intellectual Property Rights shall be defined as all inventions,
trade secrets, know-how, developments, improvements, results, data, designs,
computer programs/software and other information in any form, patentable or
unpatentable, patented or unpatented, copyrighted or uncopyrighted,
copyrightable or not, which are conceived, created, written, developed, reduced
to practice, acquired, owned or controlled by CONTRACTOR pursuant to this
Agreement.
2.2. Works Made for Hire. All Intellectual Property Rights embodied in the
works created by CONTRACTOR in its engagement by PENCOM are hereby assigned to
and shall be the property of PENCOM. All copyrightable subject matter included
in the works shall be owned exclusively by PENCOM and shall be deemed works made
for hire for purposes of the U.S. Copyright Act. CONTRACTOR also agrees to
cooperate with PENCOM in preparing and/or executing any necessary documents
required for the filing of applications covering the foregoing Intellectual
Property Rights.
2.3. Assignment of Ownership. If any copyrightable subject matter in the
works created by CONTRACTOR in its engagement by PENCOM shall be determined not
to be a work made for hire or if ownership of all right, title, and interest of
copyrights therein shall not otherwise be deemed to vest exclusively in PENCOM,
CONTRACTOR without additional compensation shall forthwith assign to PENCOM the
ownership of all such
E-2
<PAGE>
subject matter together with all rights arising from such copyright ownership.
CONTRACTOR further agrees to deliver to PENCOM assignments of any and all
Intellectual Property Rights in a form satisfactory to PENCOM and its legal
counsel.
3.Third-Party Beneficiary. CONTRACTOR acknowledges that the Confidential
Information is that of CCSI and that CCSI is a third-party beneficiary of this
Agreement with all the rights of PENCOM to enforce the obligation of this
Agreement against CONTRACTOR.
__________________________________
Name:
Date:
E-3
<PAGE>
Exhibit A to Attachment E, Independent Contractor Agreement
List of Deliverables
I. Phase One
II. Business Model
III. Requirements definition
IV. Data Dictionary
V. Implementation plan, including scope of development
VI. Staffing plan for CCSI
VII. Critical component prototype
VIII. Phase Two
IX. System Model
X. System Architecture documentation
XI. Data base schema
XII. Functional specification
XIII Critical component prototype (refined)
XIV. System performance parameters
XV. Phase Three
[to be provided by amendment]
E-4
<PAGE>
Attachment F
Technical Environment
HARDWARE:
Servers:
PYRAMID MISERVER 4ES - DC/OSX Operating System 1.1-93c0440.33
X-Window Server, Motif, Xview, Visual System Manager, OpenNet TCP/IP
OpenNet NFS, Dual Ethernet Option NeXTstation Turbo - 16 MB RAM 240 MB-
NeXTSTEP 3.2
Canon Innova 486 DX266 36MB RAM 1.0 Gig - Novell NetWare 3.11 250 User
Canon Innova 486 DX266 36MB RAM 2.5 Gig - Novell NetWare 3.11 50 User
Canon Innova 486 DX266 10MB RAM 500MB - Novell NetWare 3.11 10 User
Canon Innova 486 DX266 36MB RAM 1.0 Gig - Novell NetWare 3.11 50 User
Canon Innova 486 DX266 36MB RAM 1.0 Gig - Novell NetWare 3.12 50 User
Discview CD-ROM Server (10BT)
Castelle FaxPress Server 100 Line DID Trunk Routing
Castelle LANPress Server 16 Print Servers
Network Hardware:
CCSI:Costa Mesa
Cisco 4000 Router - TCP/IP, AppleTalk, IP, IPX, SDLC Protocols
NRC Multi-Gate Hub-2 (48 Ports)
NRC Multi-Gate Hub-1 (192 Ports)
Larse Access-T CSU/DSU T-1 Devices
IBM 3174-11R 32 Ports Mainframe Terminal Controller Unit
IBM 3299-032 32 Port Extender
IBM 3174-51R 8 Port Mainframe Terminal Controller Unit
IBM 3299-2 8 Port Extender
CCSI:Memphis
Cisco 4000 Router TCP/IP, AppleTalk, IP, IPX, SDLC Protocols
NRC MultiGate Hub-2 (24 Ports)
NRC MultiGate Hub-1 (48 Ports)
IBM 3174-51R 8 Port Mainframe Terminal Controller Unit
IBM 3299-2 8 Port Extender
CCSI:ATO Portland
Cisco 4000 Router TCP/IP, AppleTalk, IP, IPX, SDLC Protocols
NRC MultiGate Hub-2 (24 Ports)
IBM3174-51R 8 Port Mainframe Terminal Controller Unit
Client Hardware:
Canon Innova 486 SX33 VL BUS 4MB RAM 170MB HD
Canon Innova 486 DX66 ISA BUS 4MB RAM 240 MB HD
Canon Innova 486 DX66 VLBUS 4MB RAM 240 MB HD
NeXT Station 16MB RAM 200MB HD
NeXT 400dpi Laser Printer
F-1
<PAGE>
NeXT Color Printer
Macintosh IIsi
Canon LBP4 Plus Laser Printer
Canon LBP 8SX Laser Printer
Canon LBP 860 Laser Printer
Canon BJ-200 Bubblejet Printer
Canon BJ-600 Bubblejet Printer
SOFTWARE:
Operating Systems:
DC/OSX Operating System
Novell NetWare 3.11(250, 50, 50, 10 User Licenses)
NeXTSTEP Operating System versions (3.0J, 3.2)
DOS 6.0
Microsoft Windows 3.1
Connectivity Software:
FTP TCP/IP Software
Novell Lan Workshop for DOS
SQL*Net 2.0
TCP Adapter 2.0
Palindrome Network Archivist 3.0
Local Path (Mac)
Database Software:
Oracle 7 Server
Oracle Forms 4.0 Windows
Oracle Reports 2.0 Windows
Oracle DataBrowser 1.0 Windows
Q&A Software
Microsoft Access
CD-ROM Software:
Support on-site
Microsoft Tech Net
F-2
<PAGE>
PHASE THREE AMENDMENT TO
SOFTWARE DEVELOPMENT AGREEMENT
The March 9, 1994 Software Development Agreement ("Agreement") between
Canon Computer Systems, Inc., a California corporation, with offices at 2995 Red
Hill Avenue, Costa Mesa, California 92626 (hereinafter called "CCSI") and Pencom
Systems Incorporated, a New York corporation, with offices at 150 Broadway, New
York, New York 10038 (hereinafter called "PENCOM") is amended as set forth
below. Unless specified below, all definitions and terms from the Agreement
govern this Phase Three Amendment ("Amendment").
1. PHASE THREE DELIVERABLES.
PENCOM shall deliver to CCSI the Phase Three Deliverables listed in
Attachment 1 to this Amendment, as that attachment may be amended from time to
time.
2. STAFFING, SCHEDULE, AND FEES.
2.1. Staffing. The Phase Three Deliverables shall be developed by the CCSI
and PENCOM employees identified in Attachment 1 to this Amendment. Irrespective
of the initial assignment of responsibility for particular objects to be
developed as individual Phase Three Deliverables, PENCOM shall bear the ultimate
responsibility for such Deliverables as set forth in the Agreement.
2.2. Schedule. The development services shall be performed and the Phase
Three Deliverables provided to CCSI in accordance with the schedules set forth
in Attachments 1 and 2 to this Amendment.
2.3. Fees. The fees for Phase Three of the Software Project are the PENCOM
Discounted Rates for a greater than three month basis as set forth in Attachment
C to the Agreement. All fees and expenses shall be billed on a monthly basis.
3. SUPPORT, TRAINING AND MAINTENANCE SERVICES.
3.1. Initial Support, Training, and Maintenance Services. For a period of
a minimum of three (3) months following CCSI's final acceptance of the Phase
Three Deliverables, PENCOM shall provide a senior software engineer on site at
CCSI's offices in Costa Mesa, California ("on-site"), an on-site software
engineer, and a software engineer at a location to be determined by CCSI, all of
whom must be approved by CCSI and must have been members of the PENCOM team
working on Phase Three of the Software Project. These engineers shall work on
the Software Project on a full-time basis correcting reproducible
nonconformities, errors, and discrepancies to the Software Package ("Defects");
coordinating Defect corrections with PENCOM in Austin, Texas;
<PAGE>
performing additional development and enhancement of the Software Project; and
training CCSI employees as required. Fees for these services shall be at
PENCOM's discounted rates as listed in Attachment C to the Agreement. The length
of any initial support, training, and maintenance services to be provided beyond
three (3) months shall be determined by CCSI, provided that CCSI shall give at
least two (2) weeks' written notice of termination to PENCOM.
3.2. Subsequent Support, Training, and Maintenance Services. For a period
beginning with the termination of the period described in Section 3.1 above and
ending up to one (1) year following CCSI's final acceptance of the Phase Three
Deliverables, PENCOM shall provide a senior software engineer and a software
engineer, both of whom must be approved by CCSI and must have been members of
the PENCOM team working on Phase Three of the Software Project. These engineers
shall work on the Software Project on a full-time basis correcting Defects in
the Software Package and performing additional development and enhancement of
the Software Project. Fees for these services shall be at PENCOM's discounted
rates as listed in Attachment C to the Agreement. The length of the subsequent
support, training, and maintenance services shall be determined by CCSI,
provided that CCSI shall give at least sixty (60) days' written notice of
termination to PENCOM.
3.3. PENCOM Response to Errors. During the time periods defined in
Sections 3.1 and 3.2 of this Amendment, PENCOM shall respond to a CCSI request
to correct to any Defects in the Software Package by assigning an engineer to
correct the Defect and by communicating that assignment to CCSI within the time
frame specified in Attachment 3 to this Amendment. Response times to Defects are
based on normal business hours of Monday through Friday 7:30 a.m. to 5:00 p.m.
Pacific Standard Time. Responsibility for correcting Defects in the Software
Package shall first be assigned to the PENCOM engineers working full-time on the
Software Package. If necessary to meet the response times stated in Attachment 3
to this Amendment, PENCOM shall assign additional engineers to correct Defects
at no additional charge to CCSI. If the Defect constitutes a Severity Level One
or Two Problem (as those terms are defined in Section One of Attachment I to
this Amendment), then the PENCOM engineer initially assigned to correct the
Defect shall not be reassigned to another project until the Defect is corrected.
If PENCOM assigns an engineer not already working full-time on the Software
Package to correct a Defect and the Defect cannot be reproduced by PENCOM, then
CCSI shall reimburse PENCOM at PENCOM's discounted rates as listed in Attachment
C to the Agreement for that engineer's reasonable time spent investigating the
Defect.
3.4. Additional Support, Training, and Maintenance Services. Additional
support, training and maintenance services requested by CCSI following the
termination of the period described in Section 3.2 of this Amendment shall be
provided upon the mutual agreement of the parties at PENCOM's discounted rates
as listed in Attachment C to the Agreement.
- 2 -
<PAGE>
4. RESTRICTION.
4.1. Restriction. PENCOM shall not use a functionality, structure,
sequence, or organization similar to that contained in the Software Package to
perform any consulting services or develop any software for third parties
engaged in, or about to become engaged in, research and development, production,
marketing, distribution, selling, or leasing of products or services in the
fields of computers and computer peripherals (the "Restriction"). This
Restriction shall commence on the Effective Date of this Agreement and shall
expire (a) on the third year anniversary of CCSI's final acceptance of the Phase
Three Deliverables; or (b) on the first anniversary of CCSI's termination of the
Agreement under Section 12.2 due to Pencom's failure to deliver conforming and
acceptable Phase Three Deliverables.
4.2. Exception to Restriction. PENCOM may request CCSI to waive the
Restriction and CCSI will not unreasonably withhold its approval of such request
provided that the following conditions are met: (a) Pencom submits its request
in writing to CCSI; (b) the proposed engagement does not utilize the NeXTSTEP
programming language; (c) no Key Employees (as defined in Section 10 of the
Agreement) are involved; and (d) no licensable CCSI material is used in the
engagement. CCSI shall respond to a written PENCOM request within fifteen (15)
days of its receipt of such request, or its failure to respond in that time
period shall constitute approval of the request providing that the four
conditions described above are met.
5. TERM.
The Agreement, as modified by this Amendment, shall continue in force
until terminated in accordance with any of the sections of the Agreement, or
until ninety (90) days after CCSI's final acceptance of the Phase Three
Deliverables. The following sections of the Agreement and the Amendment shall
survive completion or any termination of the Agreement: Sections 2.4, 5, 6.4,
6.5, 7, 9, 12.3, and l2.4 of the Agreement, and Sections 3 and 4 of the
Amendment.
- 3 -
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed in duplicate by its duly authorized representative, to be effective as
of the later date written below.
CCSI PENCOM
Canon Computer Systems, Inc. Pencom Systems Incorporated
By: _______________________________ By: _______________________________
Frederick O'Reilly Wade Saadi
Vice President, Operations CEO
Date: _____________________________ Date: _____________________________
- 4 -
<PAGE>
Attachment 1 to Phase Three Amendment
I. Severity Level Definitions and Examples
A. Severity Level One: Critical - system not usable. The Software
Package can not be used at all by the majority of users or by users
who must perform critical business functions. Examples of this might
include, the Software Package will not boot, the database cannot be
accessed, major portions of data are corrupted, or the Software
Package crashes and cannot be worked around.
B. Severity Level Two: Important - a major system function is not
working and cannot be worked around. Examples might include the
inability to change item prices, the inability to print a particular
report, or isolated data integrity problems.
C. Severity Level Three: Minor - the Software Package does not conform
to the Specifications. The Defect is minor or can be worked around
and does not significantly interfere with the ability to perform
system integration testing. Examples might be that an informational
message is incorrect, a report does not show all specified fields,
or the validation check for a field entry is not correct.
D. Severity Level Four: Documentation - the documentation is in error
or there is a minor cosmetic problem. Examples of this include
errors in the documentation, misspellings in the documentation or
screens, or minor alignment of fields.
E. Severity Levels for Performance Problems: Severity levels for
problems associated with performance shall be determined by the
impact on the usability of the Software Package and the difference
between the specified performance and the observed performance. For
example, if a performance problem is so severe that "the Software
Package cannot be used at all by the majority of users or by users
who must perform critical business functions", then it would be a
Severity Level One problem. On the other hand, a function which
responds in 3.5 seconds when the specification states a 3 second
response time would typically be a Severity Level Three problem.
Problems entered for performance which is within the applicable
specification will be closed as an enhancement request and will
require a DCR to change the specification.
F. Assignment and Review of Severity Levels: Severity levels are
assigned by the Pencom SQA team. These problem reports and severity
levels are reviewed by the development team and approved. The
problem reports
1 - 1
<PAGE>
- --------------------------------------------------------------------------------
Canon Object 21
Project Organization - DRAFT
- --------------------------------------------------------------------------------
--------------------
CNN Project Director --------------
Bruce Nolan User Committee
-------------------- --------------
------------ ----------
Pencom Exec. SHL Exec.
Pat Motola Greg Scott
------------ ----------
----------------- ---------------- -------------- --------------
Object 21 Manager Testing/Impl Mgr Cambar Mgr PeopleSoft Mgr
Mick Korelc Julia Moore Tony McFarland Elaine Kist
----------------- ---------------- -------------- --------------
- -------------- ------------- ----------- ---------------
O21 Architect Testing Teams Cambar Team PeopleSoft Team
Lorne Wilson (SHL)
- -------------- ------------- ----------- ---------------
- -------------- ------------- ------------- Cambar PeopleSoft
O21 Appl. Mgr. O21 Agent Mgr Impl. Teams Hunter Group
Chris Chauvin TBD (SHL) (SHL, CCSI)
- -------------- ------------- -------------
- -------------- -----------
Appl. Teams Agent Teams
(PENCOM) (SHL, CCSI)
- -------------- -----------
-----------
Report Team 600-800 person days
(SHL) 20 hrs per report
-----------
<PAGE>
Schedule A to Attachment 1 to Phase Three Amendment
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Development Lifecycle
--------------------------------------------------------------
Design Implementation
--------------------------------------------------------------
Design
Assigned Design Implementation Implementation
To Completed Assigned to Completed
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Test A/R Test Objects mike Mike Heath 5-Oct-94
--------------------------------------------------------------------------------------------------------------------
BaseModel jmorgan 21-Oct-94 Justin Morgan 25-Oct-94
---------------------------------------------------------------------------------------------------
Customer jmorgan 28-Oct-94 Justin Morgan 27-Oct-94
---------------------------------------------------------------------------------------------------
Item craigh 28-Oct-94 Craig Halley 30-Oct-94
---------------------------------------------------------------------------------------------------
ItemGroup craigh 28-Oct-94 Craig Halley 28-Oct-94
---------------------------------------------------------------------------------------------------
ItemClass craigh 28-Oct-94 Craig Halley 29-Oct-94
---------------------------------------------------------------------------------------------------
MiniOrder gordo 28-Oct-94 Gordon Pitt 30-Oct-94
---------------------------------------------------------------------------------------------------
CustomerMiniOrder gordo 28-Oct-94 Gordon Pitt 15-Nov-94
---------------------------------------------------------------------------------------------------
Contact jmorgan 28-Oct-94 Justin Morgan 26-Oct-94
---------------------------------------------------------------------------------------------------
CustomerContact jmorgan 28-Oct-94 Justin Morgan 26-Oct-94
---------------------------------------------------------------------------------------------------
Address jmorgan 28-Oct-94 Justin Morgan 26-Oct-94
---------------------------------------------------------------------------------------------------
CustomerAddress jmorgan 28-Oct-94 Justin Morgan 27-Oct-94
---------------------------------------------------------------------------------------------------
CustomerBillAddress jmorgan 28-Oct-94 Justin Morgan 27-Oct-94
---------------------------------------------------------------------------------------------------
CustomerShipToAddress jmorgan 28-Oct-94 Justin Morgan 27-Oct-94
---------------------------------------------------------------------------------------------------
CustomerLegalAddress jmorgan 28-Oct-94 Justin Morgan 28-Oct-94
---------------------------------------------------------------------------------------------------
CustomerAlias jmorgan 21-Oct-94 Justin Morgan 28-Oct-94
---------------------------------------------------------------------------------------------------
Model Contract jmorgan 21-Oct-94 Justin Morgan 28-Oct-94
---------------------------------------------------------------------------------------------------
CustomerContract jmorgan 21-Oct-94 Justin Morgan 28-Oct-94
---------------------------------------------------------------------------------------------------
CreditRules jmorgan 15-Nov-94 Justin Morgan 7-Nov-94
---------------------------------------------------------------------------------------------------
E FlooringCompany jmorgan 21-Oct-94 Justin Morgan 7-Nov-94
v ---------------------------------------------------------------------------------------------------
e CCSIRegion jmorgan 21-Oct-94 Justin Morgan 7-Nov-94
r ---------------------------------------------------------------------------------------------------
y PaymentTerms jmorgan 21-Oct-94 Justin Morgan 7-Nov-94
t ---------------------------------------------------------------------------------------------------
h Reference jmorgan 28-Oct-94 Justin Morgan 8-Nov-94
i ---------------------------------------------------------------------------------------------------
n Customer BankReference jmorgan 28-Oct-94 Justin Morgan 8-Nov-94
g Management ---------------------------------------------------------------------------------------------------
CustomerItemMapping jmorgan 21-Oct-94 Justin Morgan 9-Nov-94
---------------------------------------------------------------------------------------------------
DunBradstreetInfo jmorgan 21-Oct-94 Justin Morgan 9-Nov-94
---------------------------------------------------------------------------------------------------
TradeReference jmorgan 28-Oct-94 Justin Morgan 9-Nov-94
---------------------------------------------------------------------------------------------------
File ricardo 28-Oct-94 Ricardo Parada 18-Nov-94
---------------------------------------------------------------------------------------------------
Checkpoint craigh 21-Oct-94 Craig Halley 7-Nov-94
---------------------------------------------------------------------------------------------------
Credentials craigh 21-Oct-94 Craig Halley 7-Nov-94
---------------------------------------------------------------------------------------------------
Permission craigh 21-Oct-94 Craig Halley 8-Nov-94
---------------------------------------------------------------------------------------------------
User craigh 21-Oct-94 Craig Halley 8-Nov-94
--------------------------------------------------------------------------------------------------------------------
ObjectWell ricardo 21-Oct-94 Ricardo Parada 27-Oct-94
---------------------------------------------------------------------------------------------------
DraggableImageView ricardo 21-Oct-94 Ricardo Parada 29-Oct-94
---------------------------------------------------------------------------------------------------
DraggableImageViewAssociation ricardo 21-Oct-94 Ricardo Parada 29-Oct-94
---------------------------------------------------------------------------------------------------
O21OpenPanel gordo 28-Oct-94 Craig Halley 19-Nov-94
---------------------------------------------------------------------------------------------------
ShellView ricardo 21-Oct-94 Ricardo Parada 15-Nov-94
---------------------------------------------------------------------------------------------------
IconPath ricardo 21-Oct-94 Ricardo Parada 19-Nov-94
---------------------------------------------------------------------------------------------------
IconCell ricardo 21-Oct-94 Ricardo Parada 9-Nov-94
---------------------------------------------------------------------------------------------------
View HierarchyManager ricardo 21-Oct-94 Ricardo Parada 19-Nov-94
---------------------------------------------------------------------------------------------------
HierarchyManagerAssociation ricardo 21-Oct-94 Ricardo Parada 22-Nov-94
---------------------------------------------------------------------------------------------------
RepositoryView ricardo 21-Oct-94 Ricardo Parada 25-Nov-94
---------------------------------------------------------------------------------------------------
AutoFinder jmorgan 28-Oct-94 Justin Morgan 11-Nov-94
---------------------------------------------------------------------------------------------------
NXTableVector(EOAssociation) jmorgan 28-Oct-94 Justin Morgan 12-Nov-94
---------------------------------------------------------------------------------------------------
AutoSortingEOColumnAssociation jmorgan 28-Oct-94 Justin Morgan 17-Nov-94
---------------------------------------------------------------------------------------------------
OTGraphEOAssociation jmorgan 28-Oct-94 Justin Morgan 18-Nov-94
---------------------------------------------------------------------------------------------------
DataSet ricardo 21-Oct-94 Justin Morgan 19-Nov-94
---------------------------------------------------------------------------------------------------
Inspector ricardo 21-Oct-94 Justin Morgan 27-Nov-94
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Development Lifecycle
----------------------------------
Testing
----------------------------------
Object Application
----------------------------------
Testing Complete Testing Complete
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Test A/RTestObjects 19-Oct-94 10-Jan-95
----------------------------------------------------------------------------------------
BaseModel 27-Oct-94 10-Jan-95
-----------------------------------------------------------------------
Customer 30-Oct-94 10-Jan-95
-----------------------------------------------------------------------
Item 5-Nov-94 10-Jan-95
-----------------------------------------------------------------------
ItemGroup 31-Oct-94 10-Jan-95
-----------------------------------------------------------------------
ItemClass 1-Nov-94 10-Jan-95
-----------------------------------------------------------------------
MinOrder 5-Nov-94 10-Jan-95
-----------------------------------------------------------------------
CustomerMinOrder 4-Dec-94 10-Jan-95
-----------------------------------------------------------------------
Contact 28-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CustomerContact 28-Oct-94 10-Jan-95
-----------------------------------------------------------------------
Address 29-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CustomerAddress 29-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CustomerBillAddress 29-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CustomerShipToAddress 29-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CustomerLegalAddress 30-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CustomerAlias 30-Oct-94 10-Jan-95
-----------------------------------------------------------------------
Model Contract 30-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CustomerContract 30-Oct-94 10-Jan-95
-----------------------------------------------------------------------
CreditRules 9-Nov-94 10-Jan-95
-----------------------------------------------------------------------
E FlooringCompany 9-Nov-94 10-Jan-95
v -----------------------------------------------------------------------
e CCSIRegion 9-Nov-94 10-Jan-95
r -----------------------------------------------------------------------
y PaymentTerms 9-Nov-94 10-Jan-95
t -----------------------------------------------------------------------
h Reference 11-Nov-94 10-Jan-95
i -----------------------------------------------------------------------
n Customer BankReference 11-Nov-94 10-Jan-95
g Management -----------------------------------------------------------------------
CustomerItemMapping 11-Nov-94 10-Jan-95
-----------------------------------------------------------------------
DunBradstreetInfo 11-Nov-94 10-Jan-95
-----------------------------------------------------------------------
TradeReference 12-Nov-94 10-Jan-95
-----------------------------------------------------------------------
File 21-Nov-94 10-Jan-95
-----------------------------------------------------------------------
Checkpoint 10-Nov-94 10-Jan-95
-----------------------------------------------------------------------
Credentials 9-Nov-94 10-Jan-95
-----------------------------------------------------------------------
Permission 10-Nov-94 10-Jan-95
-----------------------------------------------------------------------
User 11-Nov-94 10-Jan-95
----------------------------------------------------------------------------------------
ObjectWell 31-Oct-94 10-Jan-95
-----------------------------------------------------------------------
DraggableImageView 8-Nov-94 10-Jan-95
-----------------------------------------------------------------------
DraggableImageViewAssociation 1-Nov-94 10-Jan-95
-----------------------------------------------------------------------
O21OpenPanel 22-Nov-94 10-Jan-95
-----------------------------------------------------------------------
ShellView 23-Nov-94 10-Jan-95
-----------------------------------------------------------------------
IconPath 25-Nov-94 10-Jan-95
-----------------------------------------------------------------------
IconCell 13-Nov-94 10-Jan-95
-----------------------------------------------------------------------
View HierarchyManager 22-Nov-94 10-Jan-95
-----------------------------------------------------------------------
HierarchyManagerAssociation 25-Nov-94 10-Jan-95
-----------------------------------------------------------------------
RepositoryView 30-Nov-94 10-Jan-95
-----------------------------------------------------------------------
AutoFinder 14-Nov-94 10-Jan-95
-----------------------------------------------------------------------
NXTableVector(EOAssociation) 15-Nov-94 10-Jan-95
-----------------------------------------------------------------------
AutoSortingEOColumnAssociation 22-Nov-94 10-Jan-95
-----------------------------------------------------------------------
OTGraphEOAssociation 22-Nov-94 10-Jan-95
-----------------------------------------------------------------------
DataSet 22-Nov-94 10-Jan-95
-----------------------------------------------------------------------
Inspector 6-Dec-94 10-Jan-95
- -----------------------------------------------------------------------------------------------------
</TABLE>
1 - 6
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Development Lifecycle
--------------------------------------------------------------
Design Implementation
--------------------------------------------------------------
Design
Assigned Design Implementation Implementation
To Completed Assigned to Completed
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
InspectionManager ricardo 21-Oct-94 Justin Morgan 8-Dec-94
---------------------------------------------------------------------------------------------------
View RealFormatter gordo 28-Oct-94 Gordon Pitt 21-Nov-94
---------------------------------------------------------------------------------------------------
InlFormatter gordo 28-Oct-94 Gordon Pitt 21-Nov-94
---------------------------------------------------------------------------------------------------
BaseDocWindow ricardo 21-Oct-94 Justin Morgan 28-Nov-94
--------------------------------------------------------------------------------------------------------------------
BaseAppController gordo 28-Oct-94 Gordon Pitt 21-Nov-94
---------------------------------------------------------------------------------------------------
CustomerManagementAppCont jmorgan 28-Oct-94 Justin Morgan 6-Dec-94
---------------------------------------------------------------------------------------------------
BaseDocController gordo 28-Oct-94 Gordon Pitt 23-Nov-94
---------------------------------------------------------------------------------------------------
CustomerDocController jmorgan 28-Oct-94 Justin Morgan 12-Dec-94
Customer ---------------------------------------------------------------------------------------------------
Management ItemBrowser ricardo 21-Oct-94 Craig Halley 12-Dec-94
---------------------------------------------------------------------------------------------------
Controller ItemManager ricardo 21-Oct-94 Craig Halley 3-Dec-94
---------------------------------------------------------------------------------------------------
FileManager ricardo 21-Oct-94 Craig Halley 1-Dec-94
---------------------------------------------------------------------------------------------------
Security craigh 21-Oct-94 Craig Halley 11-Nov-94
---------------------------------------------------------------------------------------------------
UniqueKey gordo 21-Oct-94 Gordon Pitt 24-Nov-94
---------------------------------------------------------------------------------------------------
ReadOnlyDataSource 5-Dec-94
---------------------------------------------------------------------------------------------------
SparseDataSource 6-Dec-94
--------------------------------------------------------------------------------------------------------------------
Summary 15-Nov-94 12-Dec-94
-------------------------------------------------------------------------------------------------------------------------------
Test InventoryTestObjects mike Mike Heath 23-Nov-94
--------------------------------------------------------------------------------------------------------------------
Tariff craigh 21-Oct-94 Craig Halley 10-Nov-94
---------------------------------------------------------------------------------------------------
MiniItem craigh 21-Oct-94 Craig Halley 11-Nov-94
E ---------------------------------------------------------------------------------------------------
v ItemGroupCost craigh 21-Oct-94 Craig Halley 11-Nov-94
e ---------------------------------------------------------------------------------------------------
r Model ItemGroupCostHistory craigh 21-Oct-94 Craig Halley 14-Nov-94
y ---------------------------------------------------------------------------------------------------
t Item ItemFOB craigh 21-Oct-94 Craig Halley 14-Nov-94
h Management ---------------------------------------------------------------------------------------------------
i ItemFOBHistory craigh 21-Oct-94 Craig Halley 15-Nov-94
n ---------------------------------------------------------------------------------------------------
g ItemCost craigh 21-Oct-94 Craig Halley 15-Nov-94
---------------------------------------------------------------------------------------------------
ItemCostHistory craigh 21-Oct-94 Craig Halley 16-Nov-94
---------------------------------------------------------------------------------------------------
ItemSafety craigh 21-Oct-94 Craig Halley 16-Nov-94
---------------------------------------------------------------------------------------------------
ItemFCCInfo craigh 21-Oct-94 Craig Halley 17-Nov-94
---------------------------------------------------------------------------------------------------
ItemFDAInfo craigh 21-Oct-94 Craig Halley 17-Nov-94
---------------------------------------------------------------------------------------------------
Inventory 30-Nov-94
---------------------------------------------------------------------------------------------------
LogicalInventory 7-Dec-94
---------------------------------------------------------------------------------------------------
LogicalPhysicalInventory 7-Dec-94
---------------------------------------------------------------------------------------------------
PhysicalInventory 8-Dec-94
--------------------------------------------------------------------------------------------------------------------
ItemManagementAppController craigh 28-Oct-94 Craig Halley 12-Dec-94
---------------------------------------------------------------------------------------------------
Controller ItemDocController craigh 21-Oct-94 Craig Halley 6-Dec-94
---------------------------------------------------------------------------------------------------
ItemGroupDocController craigh 21-Oct-94 Craig Halley 16-Dec-94
--------------------------------------------------------------------------------------------------------------------
Summary 28-Oct-94 16-Dec-94
-------------------------------------------------------------------------------------------------------------------------------
ContractItemDisc gordo 28-Oct-94 Gordon Pitt 13-Dec-94
---------------------------------------------------------------------------------------------------
ContractItemTerms gordo 28-Oct-94 Gordon Pitt 12-Dec-94
---------------------------------------------------------------------------------------------------
ContractItemPricing gordo 28-Oct-94 Gordon Pitt 20-Nov-94
---------------------------------------------------------------------------------------------------
ItemDiscount gordo 28-Oct-94 Gordon Pitt 6-Dec-94
---------------------------------------------------------------------------------------------------
Item ItemPricing gordo 28-Oct-94 Gordon Pitt 28-Nov-94
Pricing ---------------------------------------------------------------------------------------------------
Model ItemTerms gordo 28-Oct-94 Gordon Pitt 9-Dec-94
---------------------------------------------------------------------------------------------------
ItemDiscProposed gordo 28-Oct-94 Gordon Pitt 2-Dec-94
---------------------------------------------------------------------------------------------------
ItemTermsProposed gordo 28-Oct-94 Gordon Pitt 9-Dec-94
---------------------------------------------------------------------------------------------------
ContractItemTermsProposed gordo 28-Oct-94 Gordon Pitt 12-Dec-94
---------------------------------------------------------------------------------------------------
ContractItemDiscProposed gordo 28-Oct-94 Gordon Pitt 13-Dec-94
---------------------------------------------------------------------------------------------------
ItemPricingProposed gordo 28-Oct-94 Gordon Pitt 28-Nov-94
---------------------------------------------------------------------------------------------------
ContractItemPricingProposed gordo 28-Oct-94 Gordon Pitt 29-Nov-94
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Development Lifecycle
----------------------------------
Testing
----------------------------------
Object Application
----------------------------------
Testing Complete Testing Complete
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
InspectionManager 17-Dec-94 10-Jan-95
-----------------------------------------------------------------------
View RealFormatter 23-Nov-94 10-Jan-95
-----------------------------------------------------------------------
InlFormatter 23-Nov-94 10-Jan-95
-----------------------------------------------------------------------
BaseDocWindow 1-Dec-94 10-Jan-95
----------------------------------------------------------------------------------------
BaseAppController 24-Nov-94 10-Jan-95
-----------------------------------------------------------------------
CustomerManagementAppCont 9-Dec-94 10-Jan-95
-----------------------------------------------------------------------
BaseDocController 28-Nov-94 10-Jan-95
-----------------------------------------------------------------------
CustomerDocController 18-Dec-94 10-Jan-95
Customer -----------------------------------------------------------------------
Management ItemBrowser 20-Dec-94 10-Jan-95
-----------------------------------------------------------------------
Controller ItemManager 9-Dec-94 10-Jan-95
-----------------------------------------------------------------------
FileManager 6-Dec-94 10-Jan-95
-----------------------------------------------------------------------
Security 18-Nov-94 10-Jan-95
-----------------------------------------------------------------------
UniqueKey 27-Nov-94 10-Jan-95
-----------------------------------------------------------------------
ReadOnlyDataSource 5-Dec-94 10-Jan-95
-----------------------------------------------------------------------
SparseDataSource 7-Dec-94 10-Jan-95
----------------------------------------------------------------------------------------
Summary 20-Dec-94 10-Jan-95
---------------------------------------------------------------------------------------------------
Test InventoryTestObjects 7-Dec-94 21-Dec-94
----------------------------------------------------------------------------------------
Tariff 13-Nov-94 21-Dec-94
-----------------------------------------------------------------------
MiniItem 14-Nov-94 21-Dec-94
E -----------------------------------------------------------------------
v ItemGroupCost 14-Nov-94 21-Dec-94
e -----------------------------------------------------------------------
r Model ItemGroupCostHistory 17-Nov-94 21-Dec-94
y -----------------------------------------------------------------------
t Item ItemFOB 17-Nov-94 21-Dec-94
h Management -----------------------------------------------------------------------
i ItemFOBHistory 18-Nov-94 21-Dec-94
n -----------------------------------------------------------------------
g ItemCost 18-Nov-94 21-Dec-94
-----------------------------------------------------------------------
ItemCostHistory 19-Nov-94 21-Dec-94
-----------------------------------------------------------------------
ItemSafety 19-Nov-94 21-Dec-94
-----------------------------------------------------------------------
ItemFCCInfo 20-Nov-94 21-Dec-94
-----------------------------------------------------------------------
ItemFDAInfo 20-Nov-94 21-Dec-94
-----------------------------------------------------------------------
Inventory 1-Dec-94 21-Dec-94
-----------------------------------------------------------------------
LogicalInventory 8-Dec-94 21-Dec-94
-----------------------------------------------------------------------
LogicalPhysicalInventory 8-Dec-94 21-Dec-94
-----------------------------------------------------------------------
PhysicalInventory 9-Dec-94 21-Dec-94
----------------------------------------------------------------------------------------
ItemManagementAppController 15-Dec-94 21-Dec-94
-----------------------------------------------------------------------
Controller ItemDocController 12-Dec-94 21-Dec-94
-----------------------------------------------------------------------
ItemGroupDocController 21-Dec-94 21-Dec-94
----------------------------------------------------------------------------------------
Summary 21-Dec-94 21-Dec-94
---------------------------------------------------------------------------------------------------
ContractItemDisc 16-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ContractItemTerms 15-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ContractItemPricing 2-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ItemDiscount 11-Dec-94 5-Jan-94
-----------------------------------------------------------------------
Item ItemPricing 1-Dec-94 5-Jan-94
Pricing -----------------------------------------------------------------------
Model ItemTerms 12-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ItemDiscProposed 5-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ItemTermsProposed 12-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ContractItemTermsProposed 15-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ContractItemDiscProposed 16-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ItemPricingProposed 1-Dec-94 5-Jan-94
-----------------------------------------------------------------------
ContractItemPricingProposed 2-Dec-94 5-Jan-94
- -----------------------------------------------------------------------------------------------------
</TABLE>
1 - 7
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Development Lifecycle
--------------------------------------------------------------
Design Implementation
--------------------------------------------------------------
Design
Assigned Design Implementation Implementation
To Completed Assigned to Completed
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Model ItemStep gordo 28-Oct-94 Gordon Pitt 2-Dec-94
--------------------------------------------------------------------------------------------------------------------
Item ItemPricingDocController gordo 28-Oct-94 Gordon Pitt 24-Dec-94
Pricing Controller ---------------------------------------------------------------------------------------------------
ItemPricingAppController gordo 28-Oct-94 Gordon Pitt 22-Dec-94
--------------------------------------------------------------------------------------------------------------------
Summary 28-Oct-94 24-Dec-94
-------------------------------------------------------------------------------------------------------------------------------
MinOrderCollection gordo 28-Oct-94 Ricardo Parada 7-Dec-94
---------------------------------------------------------------------------------------------------
Order gordo 28-Oct-94 Ricardo Parada 10-Dec-94
---------------------------------------------------------------------------------------------------
PurchaseOrder gordo 28-Oct-94 Ricardo Parada 9-Dec-94
Model ---------------------------------------------------------------------------------------------------
CustomerOrder gordo 28-Oct-94 Ricardo Parada 19-Dec-94
---------------------------------------------------------------------------------------------------
CustomerOrderCredit gordo 28-Oct-94 Ricardo Parada 31-Dec-94
---------------------------------------------------------------------------------------------------
CustomerPurchaseOrder gordo 28-Oct-94 Ricardo Parada 8-Jan-95
Order --------------------------------------------------------------------------------------------------------------------
Entry MinOrderFindPanel gordo 28-Oct-94 Justin Morgan 24-Dec-94
---------------------------------------------------------------------------------------------------
View NewOrderPanel gordo 28-Oct-94 Justin Morgan 6-Jan-95
---------------------------------------------------------------------------------------------------
NewPOPanel gordo 28-Oct-94 Justin Morgan 8-Jan-95
--------------------------------------------------------------------------------------------------------------------
CustomerOrderDocController gordo 28-Oct-94 Justin Morgan 27-Jan-95
Controller ---------------------------------------------------------------------------------------------------
OrderEntryAppController gordo 28-Oct-94 Justin Morgan 29-Jan-95
--------------------------------------------------------------------------------------------------------------------
Summary 28-Oct-94 29-Jan-95
-------------------------------------------------------------------------------------------------------------------------------
ContactRecord craigh 21-Oct-94 Craig Halley 18-Nov-94
Model ---------------------------------------------------------------------------------------------------
CreditHold craigh 21-Oct-94 Craig Halley 18-Nov-94
--------------------------------------------------------------------------------------------------------------------
CreditApprovalAppController craigh 21-Oct-94 Craig Halley 27-Dec-94
---------------------------------------------------------------------------------------------------
Credit AddressDocController craigh 28-Oct-94 Craig Halley 6-Jan-95
E Approval Controller ---------------------------------------------------------------------------------------------------
v CreditHoldDocController craigh 21-Oct-94 Craig Halley 8-Jan-95
e ---------------------------------------------------------------------------------------------------
r ContactRecordDocController craigh 28-Oct-94 Craig Halley 18-Nov-94
y --------------------------------------------------------------------------------------------------------------------
t Summary 28-Oct-94 8-Jan-95
h -------------------------------------------------------------------------------------------------------------------------------
i QueryResultsController jmorgan 28-Oct-94 Zacharles Beckm 4-Jan-95
n Order Controller ---------------------------------------------------------------------------------------------------
g Finder OrderFinderAppController jmorgan 28-Oct-94 Zacharles Beckm 6-Jan-95
--------------------------------------------------------------------------------------------------------------------
Summary 28-Oct-94 6-Jan-95
-------------------------------------------------------------------------------------------------------------------------------
MeetCompMinOrder craigh 21-Oct-94 Michael Henderson 21-Nov-94
Model ---------------------------------------------------------------------------------------------------
MeetComp craigh 21-Oct-94 Michael Henderson 11-Jan-95
--------------------------------------------------------------------------------------------------------------------
MeetCompDocController craigh 21-Oct-94 Michael Henderson 15-Jan-95
Meet Comp ---------------------------------------------------------------------------------------------------
Controller MeetCompAppController craigh 21-Oct-94 Michael Henderson 16-Jan-95
---------------------------------------------------------------------------------------------------
MeetCompItemController craigh 28-Oct-94 Michael Henderson 17-Jan-95
--------------------------------------------------------------------------------------------------------------------
Summary 28-Oct-94 17-Jan-95
-------------------------------------------------------------------------------------------------------------------------------
OrderFailure gordo 28-Oct-94 Ricardo Parada 9-Jan-95
Model ---------------------------------------------------------------------------------------------------
MinOrderFailure gordo 28-Oct-94 Ricardo Parada 12-Jan-95
--------------------------------------------------------------------------------------------------------------------
Order OrderApprovalAppController gordo 28-Oct-94 Ricardo Parada 11-Jan-95
Approval Controller ---------------------------------------------------------------------------------------------------
OrderApprovalDocController gordo 28-Oct-94 Ricardo Parada 20-Jan-95
--------------------------------------------------------------------------------------------------------------------
Summary 28-Oct-94 20-Jan-95
-------------------------------------------------------------------------------------------------------------------------------
Warehouse WarehouseAgent gordo Tammy Mckean 12-Feb-95
Agent --------------------------------------------------------------------------------------------------------------------
Summary 12-Feb-95
-------------------------------------------------------------------------------------------------------------------------------
Order OrderAgent gordo Tammy Mckean 29-Dec-94
Agent --------------------------------------------------------------------------------------------------------------------
Summary 29-Dec-94
-------------------------------------------------------------------------------------------------------------------------------
ED Order EDOrderEntry zac Tammy Mckean 22-Feb-95
Entry --------------------------------------------------------------------------------------------------------------------
Summary 22-Feb-95
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Development Lifecycle
----------------------------------
Testing
----------------------------------
Object Application
----------------------------------
Testing Complete Testing Complete
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Model ItemStep 6-Dec-94 5-Jan-95
----------------------------------------------------------------------------------------
Item ItemPricingDocController 5-Jan-95 5-Jan-95
Pricing Controller -----------------------------------------------------------------------
ItemPricingAppController 25-Dec-94 5-Jan-95
----------------------------------------------------------------------------------------
Summary 5-Jan-95 5-Jan-95
---------------------------------------------------------------------------------------------------
MinOrderCollection 15-Dec-94 18-Feb-95
-----------------------------------------------------------------------
Order 15-Dec-94 18-Feb-95
-----------------------------------------------------------------------
PurchaseOrder 12-Dec-94 18-Feb-95
Model -----------------------------------------------------------------------
CustomerOrder 31-Dec-94 18-Feb-95
-----------------------------------------------------------------------
CustomerOrderCredit 13-Jan-95 18-Feb-95
-----------------------------------------------------------------------
CustomerPurchaseOrder 10-Jan-95 18-Feb-95
Order ----------------------------------------------------------------------------------------
Entry MinOrderFindPanel 27-Dec-94 18-Feb-95
-----------------------------------------------------------------------
View NewOrderPanel 11-Jan-95 18-Feb-95
-----------------------------------------------------------------------
NewPOPanel 14-Jan-95 18-Feb-95
----------------------------------------------------------------------------------------
CustomerOrderDocController 18-Feb-95 18-Feb-95
Controller -----------------------------------------------------------------------
OrderEntryAppController 4-Feb-95 18-Feb-95
----------------------------------------------------------------------------------------
Summary 18-Feb-95 18-Feb-95
---------------------------------------------------------------------------------------------------
ContactRecord 20-Nov-94 13-Jan-95
Model -----------------------------------------------------------------------
CreditHold 20-Nov-94 13-Jan-95
----------------------------------------------------------------------------------------
CreditApprovalAppController 3-Jan-95 13-Jan-95
-----------------------------------------------------------------------
Credit AddressDocController 11-Jan-95 13-Jan-95
E Approval Controller -----------------------------------------------------------------------
v CreditHoldDocController 13-Jan-95 13-Jan-95
e -----------------------------------------------------------------------
r ContactRecordDocController 21-Nov-94 13-Jan-95
y ----------------------------------------------------------------------------------------
t Summary 13-Jan-95 13-Jan-95
h ---------------------------------------------------------------------------------------------------
i QueryResultsController 7-Jan-95 11-Jan-95
n Order Controller -----------------------------------------------------------------------
g Finder OrderFinderAppController 11-Jan-95 11-Jan-95
----------------------------------------------------------------------------------------
Summary 11-Jan-95 11-Jan-95
---------------------------------------------------------------------------------------------------
MeetCompMinOrder 24-Nov-94 20-Jan-95
Model -----------------------------------------------------------------------
MeetComp 14-Jan-95 20-Jan-95
----------------------------------------------------------------------------------------
MeetCompDocController 20-Jan-95 20-Jan-95
Meet Comp -----------------------------------------------------------------------
Controller MeetCompAppController 19-Jan-95 20-Jan-95
-----------------------------------------------------------------------
MeetCompItemController 20-Jan-95 20-Jan-95
----------------------------------------------------------------------------------------
Summary 20-Jan-95 20-Jan-95
---------------------------------------------------------------------------------------------------
OrderFailure 14-Jan-95 29-Jan-95
Model -----------------------------------------------------------------------
MinOrderFailure 16-Jan-95 29-Jan-95
----------------------------------------------------------------------------------------
Order OrderApprovalAppController 14-Jan-95 29-Jan-95
Approval Controller -----------------------------------------------------------------------
OrderApprovalDocController 29-Jan-95 29-Jan-95
----------------------------------------------------------------------------------------
Summary 29-Jan-95 29-Jan-95
---------------------------------------------------------------------------------------------------
Warehouse WarehouseAgent 25-Feb-95 25-Feb-95
Agent ----------------------------------------------------------------------------------------
Summary 25-Feb-95 25-Feb-95
---------------------------------------------------------------------------------------------------
Order Order Agent 10-Jan-95 10-Jan-95
Agent ----------------------------------------------------------------------------------------
Summary 10-Jan-95 10-Jan-95
---------------------------------------------------------------------------------------------------
ED Order EDOrderEntry 8-Mar-95 8-Mar-95
Entry ----------------------------------------------------------------------------------------
Summary 8-Mar-95 8-Mar-95
- -----------------------------------------------------------------------------------------------------
</TABLE>
1 - 8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Development Lifecycle
--------------------------------------------------------------
Design Implementation
--------------------------------------------------------------
Design
Assigned Design Implementation Implementation
To Completed Assigned to Completed
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inventory gordo Michael Henderson 14-Feb-95
E Inventory --------------------------------------------------------------------------------------------------------------------
v Summary 14-Feb-95
e -------------------------------------------------------------------------------------------------------------------------------
r InvoiceGeneration zac Tammy Mckean 27-Feb-95
y Invoicing --------------------------------------------------------------------------------------------------------------------
t Summary 27-Feb-95
h -------------------------------------------------------------------------------------------------------------------------------
i General G/LAgent zac Michael Henderson 7-Mar-95
n Ledger --------------------------------------------------------------------------------------------------------------------
g Agent Summary 7-Mar-95
- ---------------------------------------------------------------------------------------------------------------------------------
Count 125 117 125 131
- ---------------------------------------------------------------------------------------------------------------------------------
Summary Count 14 14 14 14
- ---------------------------------------------------------------------------------------------------------------------------------
Completion Percentage 95.42% 89.31% 95.42% 100.00%
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Development Lifecycle
----------------------------------
Testing
----------------------------------
Object Application
----------------------------------
Testing Complete Testing Complete
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inventory 12-Mar-95 12-Mar-95
E Inventory ----------------------------------------------------------------------------------------
v Summary 12-Mar-95 12-Mar-95
e ---------------------------------------------------------------------------------------------------
r InvoiceGeneration 25-Mar-95 25-Mar-95
y Invoicing ----------------------------------------------------------------------------------------
t Summary 25-Mar-95 25-Mar-95
h ---------------------------------------------------------------------------------------------------
i General G/LAgent 21-Mar-95 21-Mar-95
n Ledger ----------------------------------------------------------------------------------------
g Agent Summary 21-Mar-95 21-Mar-95
- -----------------------------------------------------------------------------------------------------
Count 131 131
- -----------------------------------------------------------------------------------------------------
Summary Count 14 14
- -----------------------------------------------------------------------------------------------------
Completion Percentage 100.00% 100.00%
- -----------------------------------------------------------------------------------------------------
</TABLE>
1 - 9
<PAGE>
Schedule B to Attachment 1 to Phase Three Amendment
DCR Process Summary
All changes require completion of a Design Change Request (DCR) Form.
Anyone on the project team may submit a DCR. Any modifications to design
and functionality will not be made until a DCR is approved.
The process of submitting a DCR is as follows:
1. Changes to any of the controlled documents require the submittal of
a DCR. A Major change is one which will impact a major task
checkpoint, increase the cost of the project, or has the potential
to impact performance or usability. The cost and schedule impact
will be determined by Chris Chauvin and Lorne Wilson. Each major DCR
must be approved by Bruce Nolan, Zacharias Beckman, and Chris
Chauvin.
2. Minor DCRs to the Project Plan and Requirements Definition may be
approved by Chris Chauvin. Minor DCRs to the Functional
Specifications, Data Dictionary, and System Architecture may be
approved by Lorne Wilson and Zacharias Beckman. Minor changes to the
Design Documents may be approved by Gordon Pitt. This authority
allows for keeping the documents accurate and allowing appropriate
iterative refinement without undue bureaucracy. Each of these
changes are logged through the normal DCR mechanism but require
approval only by those listed above.
3. Minor changes to implementation code and the database schema may be
made by the engineer responsible for implementation of an object.
4. Determination of whether a DCR is a Major or Minor change is
determined by Lorne Wilson and Chris Chauvin.
5. Denise Fischer enters the DCR into a problem tracking system. All
management of the DCR schedule and status is controlled through a
tracking spreadsheet controlled by Chris Chauvin.
6. Each week all outstanding DCR's are reviewed by Chris Chauvin, Lorne
Wilson, and Zacharias Beckman. At that time DCR's are accepted,
rejected, or are assigned a list of action items to be pursued.
1 - 10
<PAGE>
Schedule B to Attachment 1 to Phase Three Amendment
DCR Process Summary
All changes require completion of a Design Change Request (DCR) Form.
Anyone on the project team may submit a DCR. Any modifications to design
and functionality will not be made until a DCR is approved.
The process of submitting a DCR is as follows:
1. Changes to any of the controlled documents require the submittal of
a DCR. A Major change is one which will impact a major task
checkpoint, increase the cost of the project, or has the potential
to impact performance or usability. The cost and schedule impact
will be determined by the PENCOM Project Manager and the PENCOM Lead
Architect. Each major DCR must be approved by the CCSI Director of
Information Systems and the PENCOM Project Manager.
2. Minor DCRs to the Project Plan and Requirements Definition may be
approved by the PENCOM Project Manager. Minor DCRs to the Functional
Specifications, Data Dictionary, and System Architecture may be
approved by the PENCOM Lead Architect and the CCSI Lead Architect.
Minor changes to the Design Documents may be approved by the PENCOM
Object Designer. This authority allows for keeping the documents
accurate and allowing appropriate iterative refinement without undue
bureaucracy. Each of these changes are logged through the normal DCR
mechanism but require approval only by those listed above.
3. Minor changes to implementation code and the database schema may be
made by the engineer responsible for implementation of an object.
4. Determination of whether a DCR is a Major or Minor change is
determined by the PENCOM Lead Architect and the PENCOM Project
Manager.
5. PENCOM personnel enter the DCR into a problem tracking system. All
management of the DCR schedule and status is controlled through a
tracking spreadsheet controlled by the PENCOM Project Manager.
1 - 10
<PAGE>
6. Each week all outstanding DCR's are reviewed by the PENCOM Project
Manager, the PENCOM Lead Architect, and the CCSI Lead Architect. At
that time DCR's are accepted, rejected, or are assigned a list of
action items to be pursued. These action items are assigned to the
appropriate personnel and are due the following review period.
Decisions are made only after a DCR is complete. To be complete, a
DCR must have the proposed changes to all controlled documents and
have, if the DCR is considered major, an estimate of cost and
schedule impact to the project.
7. Once DCR's are approved, the affected documents are updated
accordingly.
1 - 11
<PAGE>
Attachment 2 to Phase Three Amendment
June 30, 1995 Deadline for completion of application testing and
delivery of all items listed under Section III.A of
Attachment 1 to the Amendment
September 30, 1995 Deadline for completion of integration testing and
delivery of all items listed under Sections III.B
through III.I of Attachment 1 to the Amendment
2 - 1
<PAGE>
Attachment 3 to Phase Three Amendment
Response Deadlines
- ------------------
Severity Level One Problems (2) 1 Hour
Severity Level Two Problems 2 Hours
Severity Level Three Problems the end of the next business day
- ----------
(2) Severity levels are defined in Section I of Attachment I to the Amendment.
3-1
<PAGE>
Exhibit 10.6*
SOFTWARE LICENSING AGREEMENT
THIS SOFTWARE LICENSING AGREEMENT (this "Agreement"), made and entered by
and between Pencom Systems Incorporated, doing business as PSW Technologies
(hereinafter "PSW"), a New York corporation with its principal offices at 9050
Capital of Texas Highway North Austin, Texas 78759, and Canon Computer Systems
Incorporated (hereinafter "CCSI"), a California corporation with its principal
offices at 2995 Redhill Avenue, Costa Mesa, California 92626:
WITNESSETH:
WHEREAS, pursuant to that certain Software Development Agreement between
Pencom Systems Incorporated and CCSI dated March 9, 1994, as amended by the
Phase Three Amendment to Software Development Agreement dated March 7, 1995
("Development Agreement"), CCSI hired Pencom to develop a wholesale distribution
system based on object oriented technology for tracking CCSI's imports and
exports, monitoring inventory, processing customer orders, tracking distribution
of CCSI products, and generating sales and marketing reports.
WHEREAS, on February 15, 1996, Pencom Software, a division of Pencom
Systems, Inc., changed its name to PSW Technologies;
WHEREAS, PSW desires to license back from CCSI certain of the object
oriented technology it developed for CCSI under the Development Agreement;
WHEREAS, CCSI is willing to grant such rights and licenses on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound, the parties hereby agree as follows:
Section 1
DEFINITION OF TERMS
The definition of terms set forth in this Section 1 shall apply in this
Agreement (in addition to terms expressly defined elsewhere herein) including
any and all exhibits, addenda, and amendments made to or incorporated herein now
or in the future.
1.1 "Deliverables." Any and all tangible products developed by PSW for
CCSI under the Development Agreement, including all object diagrams, functional
specifications, prototypes, reports, conversion tools, class libraries, the
"source" code and object code, and all necessary Documentation therefor and
further including enhancements, modifications, and corrections made to the
Deliverables by PSW pursuant to support, training, and maintenance services
provided to CCSI or otherwise at the request and expense of PSW.
* Confidential treatment is requested for certain portions of Exhibit 10.6
pursuant to Rule 406 under the Securities Act of 1933. The portions of
Exhibit 10.6 which have been omitted are denoted by an asterisk [*]. The
omitted portions of Exhibit 10.6 have been filed with the Securities and
Exchange Commission pursuant to Rule 406 under the Securities Act of 1933.
<PAGE>
1.2 "Documentation." All textual material relating to the Deliverables,
including flow charts, operating instructions, and related technical
information. Documentation shall also include customary end-user materials, such
as user manuals and training materials and sample source code used for training
and documentation purposes.
1.3 "Object 21 Systems Library." Those certain Deliverables as specified
in Schedule A that DO NOT contain specific rules or information pertaining to
CCSI's unique business methods.
l.4 "Object 21 Business Library." Those certain Deliverables as specified
in Schedule A that DO contain specific rules or information pertaining to CCSI's
unique business methods.
1.5 "Object 21 Library." The Object 21 Systems Library and the Object 21
Business Library.
1.6 "CCSI Enhancements." Changes, corrections, modifications, or
additions, including all new releases and applications, made by CCSI to the
Object 21 Library and related Documentation.
1.7 "PSW Enhancements." Changes, corrections, modifications, or additions,
including all new releases and applications, made by PSW to the Object 21
Library and related Documentation apart from its obligations pursuant to the
Development Agreement and not at CCSI's request and expense, including the
conversion of the Object 21 Library from the NeXTSTEP language into a more open
platform (e.g. OpenSTEP).
1.8 "Product." Any deliverables licensed by PSW that includes the Object
21 Library, CCSI Enhancements, PSW Enhancements, or related Documentation.
"Product" may include one or more separately priced PSW offerings.
1.9 "Customer." Any end user customers to whom PSW or Resellers may market
and sell the Product, either directly or indirectly, under the terms and
conditions of this Agreement.
1.10 "Reseller." Any of PSW's authorized resellers.
1.11 "Direct Customer." Any Resellers and any end user Customers to whom
PSW directly markets and sells the Product.
1.12 "Computer Business." The Computer Business shall be defined to
include the research, development, production, marketing, selling, distribution,
or leasing of computer hardware, computer hardware peripherals, integrated
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document management systems or cameras, or the performance of development,
consulting, training, or maintenance services relating to computer hardware,
computer hardware peripherals, integrated document management systems, or
cameras.
Section 2
GRANT OF LICENSES FROM CCSI TO PSW
2.1 Scope of License Grant. CCSI hereby grants to PSW, and PSW hereby
accepts, the following nontransferable worldwide rights and licenses:
2.1.1 a royalty-free right to use, execute, modify, and reproduce
(in any medium) the Object 21 Library, the CCSI Enhancements and related
Documentation for internal business purposes.
2.1.2 a royalty-bearing license to distribute the Product to Direct
Customers.
2.1.3 a royalty-bearing license to authorize Resellers to distribute
the Product to Customers, either on a stand-alone basis or for use in
conjunction with Resellers' computer application programs.
The foregoing rights and licenses shall be nonexclusive, except that the United
States license shall be exclusive for five (5) years from the date hereof.
2.2 Customer License. Any distribution of the Product by PSW to Customers
shall be pursuant to the terms and conditions of PSW's Customer license in the
form attached hereto as Schedule B or to a form that contains the minimum terms
and conditions of and is no less restrictive in protecting CCSI's interests than
such agreement attached hereto as Schedule B. Any distribution of the Product by
PSW to Resellers and then by Resellers to Customers shall be pursuant to the
terms and conditions of PSW's Reseller agreement in the form attached hereto as
Schedule C or to a form that contains the minimum terms and conditions of and is
no less restrictive in protecting CCSI's interests than such agreement attached
hereto as Schedule C. PSW agrees to provide and to require its Resellers to
provide in a conspicuous manner one copy of the Customer license attached as
Schedule 2 to Schedule C hereto with each Product. PSW agrees to report to CCSI
any known or suspected violation(s) of the Customer license agreement or
Reseller agreements and to reasonably cooperate with CCSI in any enforcement
actions taken by CCSI. If a conflict arises between Schedule B and any other
Customer license agreement, the terms of Schedule B shall prevail. If a conflict
arises between Schedule C and any other Reseller agreements, the terms of
Schedule C shall prevail. PSW shall undertake reasonable efforts to enforce the
terms of any license agreement between
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PSW or its Resellers and a Customer as it relates to the Products. No Customers
shall have any right to sublicense the Product unless they are also a Reseller.
2.3 Reseller Agreement. Any distribution of the Product by PSW to
Resellers, whether for further distribution on a stand-alone basis or for use in
conjunction with Resellers' computer application programs, shall be pursuant to
the terms and conditions of the PSW's Reseller agreement in the form attached
hereto as Schedule C or to a form that contains the minimum terms and conditions
of and is no less restrictive in protecting CCSI's interests than the Reseller
agreement attached hereto as Schedule C. PSW agrees to report to CCSI any known
or suspected violation(s) of the Reseller agreement and to reasonably cooperate
with CCSI in any enforcement actions taken by CCSI. If a conflict arises between
Schedule C and any other Reseller agreement, the terms of Schedule C shall
prevail. Resellers shall be bound by the restriction contained in Section 2.5.
2.4 Continuing Rights of CCSI. Subject to the rights granted in this
Section 2, CCSI shall retain all ownership of and full rights to continue to
use and market the Deliverables and the CCSI Enhancements and all right, title
and interest in and to all copyrights, patent rights or trade secret rights
associated with the Deliverables and the CCSI Enhancements.
2.5 Marketing Restrictions. PSW shall not directly or indirectly market or
license the Object 21 Business Library to any Customer engaged in whole or in
part in the Computer Business unless prior written authorization is received
from CCSI.
Section 3
GRANT OF LICENSE FROM PSW TO CCSI
3.1 PSW Enhancements. PSW hereby grants to CCSI, and CCSI hereby accepts,
a royalty-free, irrevocable, nonexclusive, and fully paid-up license to use,
execute, modify, reproduce (in any medium), and distribute the PSW Enhancements
for internal CCSI use and to sublicense any or all of such rights to the
affiliates of CCSI's ultimate parent Canon Inc. for their internal use.
3.2 PSW Determination of Marketing and Pricing. Except as provided herein,
PSW shall retain full discretion with respect to all decisions relating to
distribution and marketing of the Product, including, without limitation, the
determination to introduce or withdraw the Product, and the terms, conditions,
and pricing of the Product. PSW shall use its best efforts to promote the
Product or to continue any such promotion once commenced.
3.3 PSW Ownership. All PSW Enhancements shall be owned exclusively by PSW.
Nothing herein shall be construed to assign or transfer any intellectual
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property rights in the Deliverables or CCSI Enhancements, in which CCSI retains
all right, title, and interest subject only to the rights and license herein
granted.
Section 4
DELIVERY
4.1 Deliverables. As of the date hereof, PSW acknowledges that it already
has in its possession a copy of the Object 21 Library and related Documentation.
4.2 CCSI Enhancements. CCSI shall deliver copies of any CCSI Enhancements
to PSW at PSW's request CCSI shall keep PSW advised as to its plans for
preparation of any CCSI Enhancements.
4.3 PSW Enhancements. PSW shall provide to CCSI any PSW Enhancements made
by PSW during the term of this Agreement. PSW shall keep CCSI advised as to its
plans for preparation of PSW Enhancements. PSW agrees that, at a minimum, no
later than one (1) year from implementation of the Deliverables pursuant to the
Development Agreement it shall deliver to CCSI at no charge the converted Object
21 Systems Library from the NeXTSTEP language into the OpenSTEP platform in both
object and source code format.
Section 5
ROYALTY PAYMENTS AND REPORTS
5.1 Royalty Payments. In consideration of the rights in and licenses to
the Object 21 Library and CCSI Enhancements granted by this Agreement, PSW shall
pay to CCSI a [*] royalty on Net Sales Revenue of the Products on
a calendar quarterly basis. "Net Sales Revenue" means gross sales revenue less
customary trade discounts actually given, returns actually credited, and
transportation and taxes separately itemized and actually charged to and paid by
the Direct Customers. No other costs incurred in the manufacture, sales,
distribution, license, or lease of the Product shall be deducted in calculating
the royalty obligation of PSW. It is understood that PSW may increase or
decrease any prices, charges, or fees relating to any Product without notice to
or approval of CCSI. Royalties shall be paid by check to CCSI within thirty (30)
days after the last of each such quarter.
5.2 Royalty Reports. At the same time PSW makes its royalty payment to
CCSI pursuant to Section 5.1, PSW shall furnish to CCSI a royalty report
including (a) the number of Products shipped during such calendar quarter, (b)
which Object 21 Library Deliverables, CCSI Enhancements, and PSW Enhancements
are incorporated within or used in the development of the Product; and (c) and
any and all other information necessary for the determination of royalties under
this Agreement.
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5.3 Royalty Records. PSW shall keep or cause to be kept full and accurate
accounts and records of all transactions made by it and by its Resellers under
this Agreement in form such that all amounts owing hereunder to CCSI may be
readily and accurately determined. PSW shall use commercially reasonable efforts
to assure that its Resellers are (a) accurately reporting to PSW all
transactions with Customers and (b) otherwise complying with this Agreement. All
books of account and records kept under this Section 5 shall be retained by PSW
for at least two (2) years after the termination of this Agreement.
5.4 Royalty Base Confirmation. PSW shall, upon written request once each
calendar year, provide access to records with respect to the licenses granted
under this Agreement, during normal business hours, to an independent accounting
organization chosen and compensated by CCSI for purposes of a confirming audit
with respect to royalty payments. PSW shall promptly make any payments due as a
result of the audit, and PSW shall reimburse CCSI for the costs of such audit if
the audit determines that any such report pursuant to Section 5.2 is understated
by more than five percent (5%).
Section 6
COPYRIGHT NOTICES AND ENFORCEMENT
6.1 Copyright Notices. PSW shall not remove any existing copyright or
other proprietary rights notices from the Object 21 Library. PSW agrees that any
Product distributed to Resellers or Direct Customers shall contain an
appropriate copyright notice in the name of CCSI as to the CCSI-owned portions
of the Product.
6.2 Enforcement of Copyright. PSW shall be responsible to enforce CCSI and
PSW copyright infringement by Customers of the Product to the extent reasonable
under the circumstances. A failure by PSW to so enforce rights against
infringers of such copyrights within a reasonable period of time after
appropriate notification, if such failure results in a material loss of value of
licenses granted to PSW herein, shall be considered a material breach of this
Agreement by PSW.
Section 7
INDEMNIFICATION AND INSURANCE
7.1 Indemnity for Product. PSW agrees to indemnity and hold harmless CCSI
and its affiliates, officers, agents, directors, and employees, against any and
all claims, actions, proceedings, expenses, damages and liabilities (including
but not limited to any governmental investigations, complaints and actions) and
reasonable attorney's fees, arising out of or in connection with (a) any breach
of this Agreement by PSW, including its representations, warranties and
covenants, (b) any Product or any information contained therein and the use
thereof, and (c) any claim or action
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<PAGE>
for personal injury, death or other cause of action involving product liability
claims arising from or relating to any Product.
7.2 Infringement of Intellectual Property Rights. PSW shall, at its own
expense, defend any claim or demand made, or suit instituted, against CCSI or
its affiliates, officers, agents, directors, and employees, which is based on an
allegation that (a) any Product sold, licensed, or distributed by PSW hereunder
infringes or violates any copyright, patent, trademark, or trade name of any
third party, (b) any Product contains, embodies or incorporates any trade secret
or proprietary information of any third party, or (c) the use, license or
modification of the Product constitutes a violation of the trade secrets or
proprietary rights of such third party, and shall indemnity, hold harmless and
defend CCSI or its affiliates, officers, agents, directors, and employees
against any claim, loss, expense or judgment, including reasonable attorney's
fees, which arises from any of the preceding allegations (a) through (c),
provided that CCSI gives PSW prompt notice in writing of any such allegations
and permits PSW through PSW's counsel to defend the same and gives PSW all
available information, assistance and authority to enable PSW to assume such
defense. PSW shall be permitted to control the defense of any such suit,
including appeals from any judgment therein and any negotiations for the
settlement or compromise thereof, with authority to enter into a settlement or
compromise with the prior written consent of CCSI, which will not be
unreasonably withheld. PSW shall have the affirmative obligation to diligently
and effectively defend against any such claim. If CCSI determines that PSW is
not diligently and effectively defending against such a claim, CCSI shall have
the absolute right and option to intervene in any such suit and participate or
assume control of the defense of the suit but will not have any obligation to do
so. CCSI shall have no obligation to defend PSW, or to pay any such costs,
damages, and attorney fees for any claim based upon the combination, operation,
or use of the Product.
7.3 Insurance. PSW agrees to maintain during the term of this Agreement
general liability insurance covering claims arising under the indemnification
provisions as set forth above in Sections 7.1 and 7.2, which insurance shall be
in amounts and of a type customarily maintained by companies similarly situated,
providing at least one million dollars ($1,000,000.00) coverage per occurrence.
Upon execution of this Agreement, PSW shall provide to CCSI a certificate of
insurance flaming CCSI and its affiliates, including their respective officers,
directors, agents and employees, as additional named insureds on such insurance
coverage. PSW's purchase of the commercial general liability insurance shall not
relieve PSW of any other of its obligations or liabilities under this Agreement
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<PAGE>
Section 8
TERM AND TERMINATION
8.1 Basic Term. This Agreement shall be effective on the date first above
written and shall remain in force unless it terminates as provided below.
8.2 Termination for Default. This Agreement shall terminate upon the
bankruptcy or insolvency of either party.
8.3 Termination for Breach. In the event of a material breach of this
Agreement by either party, the other party may terminate this Agreement by
giving thirty (30) days' prior written notice thereof; provided that this
Agreement shall not terminate if the party in breach has cured the breach of
which it has been notified prior to the expiration of the thirty (30) days.
8.4 Post-Termination Provisions. In the event of any termination of the
entire Agreement, then (a) the provisions of Sections 3, 5.3, 6, 7, and 9 shall
survive as necessary to effectuate their purposes and shall bind the parties and
their legal representatives, successors, and assigns, and (b) Customer licenses
and Reseller agreements then existing by virtue of rights exercised prior to the
effective date of termination under this Agreement and any royalty obligations
of PSW with respect thereto shall survive and continue.
Section 9
CONFIDENTIAL INFORMATION
9.1 CCSI Information. In connection with this Agreement, CCSI has provided
and shall provide PSW with certain information that is proprietary and
confidential to CCSI and necessary or useful for PSW to exploit the licenses
granted hereunder.
9.2 Confidentiality. The term "Confidential Information" as used herein
shall mean any information disclosed by CCSI to PSW pursuant to Section 9.1
above in a written or other tangible form clearly identified as being
confidential. Oral or visual information shall not be considered as Confidential
Information unless it is designated confidential at the time of oral or visual
disclosure and reduced to a writing clearly marked as being confidential that is
sent to PSW by CCSI within thirty (30) days after such oral or visual
disclosure. For the purpose of this Agreement, any Deliverable or CCSI
Enhancement shall be deemed Confidential Information.
9.3 Treatment of Confidential Information. During this Agreement and
thereafter, PSW shall keep the Confidential Information in strict confidence and
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shall not disclose it to any person, firm or corporation outside PSW, nor use
the same for any purpose other than performing the Agreement. In addition, PSW
agrees to safeguard the Confidential Information by restricting its internal
dissemination to only those employees within PSW having a need to know the
Confidential Information for purposes of this Agreement. PSW has full
responsibility to ensure that all employees who are given access to the
Confidential Information maintain the confidentiality of the Confidential
Information, whether or not such employees continue to be employees of PSW.
9.4 Exceptions to Treatment of Confidential Information. Notwithstanding
Section 9.3 above, PSW shall have no confidential obligation and no use
restriction hereunder with respect to any Confidential Information that:
(1) is already known to PSW at the time of disclosure thereof
as evidenced by written records;
(2) is or becomes publicly known through no wrongful act of PSW
at or subsequent to the time of disclosure thereof; or
(3) is permitted for release by prior written consent of CCSI.
These exceptions shall not apply to information that is classified as
Confidential Information pursuant to the Development Agreement.
9.5 Tangible Embodiments. Any and all written or tangible embodiments of
information disclosed to PSW by CCSI hereunder shall be and remain the property
of CCSI, and PSW agrees promptly to return such tangible embodiments, including
any copy thereof, to CCSI upon termination of this Agreement.
9.6 PSW Information. It is understood that CCSI does not desire to receive
any confidential information from PSW and accordingly, with respect to any
information provided by PSW, including all PSW Enhancements, CCSI shall have no
confidential obligation and no use restriction and CCSI may freely use such
information for any purpose permitted under the license granted in Section 3.1.
9.7 Intellectual Property. Except to the extent necessary to perform PSW's
obligations hereunder or as otherwise provided herein, no license or right,
expressed or implied, is hereby conveyed or granted to PSW for any invention,
patent application, patent, copyright, know-how, trade secret or other
intellectual property of CCSI.
9.8 Trademarks. No license or right, expressed or implied, is hereby
conveyed or granted to PSW to use any trademark of CCSI or any of its affiliates
in any advertising, marketing, or distribution of the Products by PSW, without
the prior express written consent of CCSI. PSW shall have the right to include
CCSI in a
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list of its customers and to refer in PSW marketing materials to the development
work PSW has performed for CCSI, provided that PSW shall obtain CCSI's prior
written consent to such usage, which consent shall not unreasonably be refused.
9.9 Enforcement. PSW understands and agrees that the obligations and
restrictions provided herein are necessary and reasonable in order to protect
the business of CCSI, and CCSI would be irreparably harmed by any breach or
threatened breach hereof. In addition to any other remedies available for breach
thereof, CCSI shall be entitled to obtain injunctive relief against a threatened
breach or continuation of any such breach, without the necessity of providing
actual damages.
9.10 Confidentiality of Terms. Neither party shall, without written
authorization of the other, disclose to any third party the terms and conditions
of this Agreement except as may be necessary to establish or assert rights
hereunder or as required by law; provided, however, that either party may, on a
confidential basis, disclose this Agreement to its accountants, attorneys, and
financing organizations.
Section 10
RELATIONSHIP TO DEVELOPMENT AGREEMENT
Nothing in this Agreement shall be construed as amending or limiting the
Development Agreement. All rights and obligations thereunder remain valid and
binding on the parties, including without limitation Section 4 of the Phase
Three Amendment to the Development Agreement.
Section 11
GENERAL
11.1 Entire Agreement. The provisions herein constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, oral or written, and all other communications
relating to the subject matter hereof. No amendment or modification of any
provision of this Agreement will be effective unless set forth in a document
that purports to amend this Agreement and is executed by both parties.
11.2 Assignment. PSW shall not sell, transfer, assign, or subcontract any
right or obligation hereunder except as expressly provided herein without the
prior written consent of CCSI. Any act in derogation of the foregoing shall be
null and void. Notwithstanding the foregoing two sentences, PSW may assign this
Agreement in connection with the sale, reorganization, or other disposition of
all or substantially all of the assets of PSW or any affiliate or subsidiary or
division thereof, provided that (1) any such assignee agrees in writing with
CCSI to comply with PSW's obligations under this Agreement, and (2) in the case
of an assignment
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in which PSW survives, PSW remains subject to all of its obligations under this
Agreement. Subject to the foregoing, this Agreement shall be for the benefit of
and be binding upon the parties' successors.
11.3 Force Majeure. Except for failures to make any payment when due,
neither party shall be held liable for failure to fulfill its obligations
hereunder if such failure is due to a natural calamity, act of government, or
similar cause beyond the control of such party.
11.4 Governing Law. The validity, construction, and performance of this
Agreement shall be governed by the substantive law of the State of
California, without regard to its conflicts of law provisions.
11.5 Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be contrary to law, the remaining provisions of the
Agreement will remain in full force and effect.
11.6 Compliance with Laws and Regulations. CCSI and PSW shall comply with
all laws, rules, and regulations of competent public authorities relating to the
duties, obligations, and performance under this Agreement and shall procure all
licenses and pay all fees and other charges required thereby.
11.7 Notices. Any notices required or permitted to be made or given by
either party hereto pursuant to this Agreement will be deemed sufficiently made
or given on the fifth day after the date of mailing if sent to such party by
certified mail, postage prepaid, addressed as set forth below or to such other
address as a party shall designate by written notice given to the other party.
As of the date hereof, any notice to be given to CCSI shall be addressed
to:
Canon Computer Systems, Inc.
2995 Red Hill Avenue
Costa Mesa, California 92626
Attention: Director, Information Systems
Canon Computer Systems, Inc.
2995 Red Hill Avenue
Costa Mesa, California 92626
Attention: General Counsel
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As of the date hereof, any notice to be given to PSW shall be addressed to:
PSW Technologies
9050 Capital of Texas Highway North
Austin, Texas 78759
Attention: President
PSW Technologies
9050 Capital of Texas Highway North
Austin, Texas 78759
Attention: Vice President and General Manager
11.8 Waiver. A failure of either party to exercise any right provided for
herein shall not be deemed a waiver of any right under this Agreement.
11.9 Rights Outside of Agreements. Subject to Section 10, nothing
contained in this Agreement shall be construed as limiting rights that the
parties may enjoy outside the scope of the licenses granted and the obligations
and restrictions set forth or treated herein.
IN WITNESS THEREOF, the parties have caused this Agreement to be signed below by
their duly authorized representatives and to be effective as of the later date
written below:
PSW
Pencom Systems Incorporated
By: /s/ [Illegible]
----------------------------------------------
Date: 26 May 1996
CCSI
Canon Computer Systems, Inc.
By: /s/ Michael Rusert
----------------------------------------------
Michael Rusert, Vice President, Operations
Date: June 13, 1996
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SOFTWARE LICENSING AGREEMENT
SCHEDULE A
Confidential treatment is requested for pages A-1 through A-14 [14 pages] of
Exhibit 10.6. The omitted pages have been filed with the Securities and
Exchange Commission pursuant to Rule 406 under the Securities Act.
<PAGE>
SOFTWARE LICENSING AGREEMENT
SCHEDULE B
Minimum Terms for Customer License Agreement
(The following terms are the minimum terms which will be included in any
Customer license agreement. In the minimum terms, PSW Technologies will be
referred to as PSW and the end user licensing the Product will be referred to as
CLIENT.)
Section 1
DEFINITION OF TERMS
The definition of terms set forth in this Section 1 shall apply in this
Agreement (in addition to terms expressly defined elsewhere herein) including
any and all exhibits, addenda, and amendments made to or incorporated herein now
or in the future.
1.1 "Deliverables." Any and all tangible products delivered by PSW for
CLIENT under this Agreement, including all object diagrams, functional
specifications, prototypes, reports, conversion tools, class libraries, the
"source" code and object code, and all necessary Documentation therefor and
further including enhancements, modifications, and corrections made to the
Deliverables by PSW pursuant to support, training, and maintenance services
provided to CLIENT by PSW.
1.2 "Documentation." All textual material relating to the Deliverables,
including flow charts, operating instructions, and related technical
information. Documentation shall include user manuals, help text, training
materials, and sample source code used for training and documentation purposes.
1.3 "PSW Systems Library." Those Deliverables in Schedule 1 that are
specified to be part of the PSW Systems Library.
1.4 "PSW Business Library." Those Deliverables in Schedule 1 that are
specified to be part of the PSW Business Library.
1.5 "PSW Object Library." The combination of the PSW Systems Library and
the PSW Business Library.
1.6 "CLIENT Enhancements." Changes, corrections, modifications, or
additions, including all new releases and applications, made by CLIENT to the
PSW Object Library and related Documentation.
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1.7 "PSW Enhancements." Changes, corrections, modifications, or additions,
including all new releases and applications, made by PSW to the PSW object
Library and related Documentation.
1.8 "Computer Business." The Computer Business shall be defined to include
the research, development, production, marketing, selling, distribution, or
leasing of computer hardware, computer hardware peripherals, integrated document
management systems or cameras, or the performance of development, consulting,
training, or maintenance services relating to computer hardware, computer
hardware peripherals, integrated document management systems, or cameras.
1.9 "PSW Licensors." Other parties who have licensed portions of the
Deliverables to PSW under separate agreements.
Section 2
GRANT AND SCOPE OF RIGHTS FROM PSW TO CLIENT
2.1 Scope of License. PSW grants to CLIENT the right to use, execute,
modify, and reproduce, and distribute for internal use the licensed portions of
the PSW Object Library as specified in Schedule 1 and any PSW Enhancements.
Schedule 2 specifies the extent of the CLIENT's business as it pertains to this
license.
2.2 License Restrictions. CLIENT is not authorized to distribute or
sublicense the PSW Object Library or PSW Enhancements to any party currently in
or planning to enter the Computer Business as defined in Section 1. CLIENT is
not authorized to operate a service bureau utilizing any Deliverables, CLIENT
Enhancements, or PSW Enhancements.
2.3 Representation and Warranty of CLIENT Business. If CLIENT is licensing
any portion of the PSW Business Library, CLIENT represents and warrants by
signing this Agreement that neither it nor its subsidiaries, affiliates, or
divisions is are not currently in, nor planning to enter the Computer Business
as defined in Section 1. If CLIENT is licensing any portion of the PSW Business
Library and either it or any of its subsidiaries, affiliates, or divisions
desires to enter the Computer Business, then prior to entering such Computer
Business CLIENT shall return all licensed portions of the PSW Business Library
to PSW and shall provide a sworn statement to PSW averring that no copies of the
PSW Business Library remain on any computer system or otherwise within its
possession or control.
(Sections 3 and 4 intentionally omitted)
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Section 5
CONFIDENTIAL INFORMATION
5.1 PSW Information. In connection with this Agreement, PSW has provided
and shall provide CLIENT with certain information that is proprietary and
confidential to PSW or the PSW Licensors and necessary or useful for CLIENT to
exploit the licenses granted hereunder.
5.2 Confidentiality. The term "Confidential Information" as used herein
shall mean any information disclosed by PSW to CLIENT pursuant to Section 5.1
above in a written or other tangible form clearly identified as being
confidential. Oral or visual information shall not be considered as Confidential
Information unless it is designated confidential at the time of oral or visual
disclosure and reduced to a writing clearly marked as being confidential that is
sent to CLIENT by PSW within thirty (30) days after such oral or visual
disclosure. For the purpose of this Agreement, any Deliverable or PSW
Enhancement shall be deemed Confidential Information.
5.3 Treatment of Confidential Information. During this Agreement and
thereafter, CLIENT shall keep the Confidential Information in strict confidence
and shall not disclose it to any person, firm or corporation outside CLIENT, nor
use the same for any purpose other than performing the Agreement. In addition,
CLIENT agrees to safeguard the Confidential Information by restricting its
internal dissemination to only those employees within CLIENT having a need to
know the Confidential Information for purposes of this Agreement. CLIENT has
full responsibility to ensure that all employees who are given access to the
Confidential Information maintain the confidentiality of the Confidential
Information, whether or not such employees continue to be employees of CLIENT.
5.4 Exceptions to Treatment of Confidential Information. Notwithstanding
Section 5.3 above, CLIENT shall have no confidential obligation and no use
restriction hereunder with respect to any Confidential Information that:
(1) is already known to CLIENT at the time of disclosure thereof as
evidenced by written records;
(2) is or becomes publicly known through no wrongful act of CLIENT at
or subsequent to the time of disclosure thereof; or
(3) is permitted for release by prior written consent of PSW.
5.5 Tangible Embodiments. Any and all written or tangible embodiments of
information disclosed to CLIENT by PSW hereunder shall be and remain the
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property of PSW, and CLIENT agrees promptly to return such tangible embodiments,
including any copy thereof, to PSW upon termination of this Agreement.
5.6 Intellectual Property. Except to the extent necessary to perform
CLIENT's obligations hereunder or as otherwise provided herein, no license or
right, expressed or implied, is hereby conveyed or granted to CLIENT for any
invention, patent application, patent, copyright, know-how, trade secret or
other intellectual property of PSW or PSW Licensors.
5.7 Trademarks. No license or right, expressed or implied, is hereby
conveyed or granted to CLIENT to use any trademark of PSW without the prior
express written consent of PSW or any trademark of any PSW Licensors without the
prior express written consent of such PSW Licensor.
5.8 Enforcement. CLIENT understands and agrees that the obligations and
restrictions provided herein are necessary and reasonable in order to protect
the business of PSW and the PSW Licensors, and PSW and the PSW Licensors would
be irreparably harmed by any breach or threatened breach hereof. In addition to
any other remedies available for breach thereof, PSW and the PSW Licensors shall
be entitled to obtain injunctive relief against a threatened breach or
continuation of any such breach, without the necessity of providing actual
damages.
5.9 Confidentiality of Other Parties. CLIENT acknowledges that portions of
the PSW Object Library may be licensed by PSW from other parties. To the degree
that the identity of and terms of those license agreements are made known to
CLIENT for the execution of this Agreement, CLIENT shall keep this Confidential
Information in strict confidence and shall not disclose it to any person, firm
or corporation except as required to execute this Agreement; provided, however,
that either party may, on a confidential basis, disclose those Agreements to its
accountants, attorneys, and financing organizations.
Section 6
REPRESENTATIONS AND WARRANTIES
CLIENT acknowledges and agrees that any representations and warranties regarding
the Deliverables are provided by PSW and that its sole remedy for breach
hereunder shall be against PSW and not against the PSW Licensors. THE PSW
LICENSORS EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
THE DELIVERABLES OR THE RESULTS OBTAINED FROM USING THE SAME, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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Section 7
LIMITATION OF LIABILITY
UNDER NO CIRCUMSTANCES SHALL PSW OR THE PSW LICENSORS BE LIABLE FOR SPECIAL,
EXEMPLARY, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO
LEGAL FEES, LOSS OF PROFITS, LOSS OR INACCURACY OF DATA, OR LOSS RESULTING FROM
BUSINESS DISRUPTION, EVEN IF PSW OR THE PSW LICENSORS HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
Section 8
THIRD-PARTY BENEFICIARY
CLIENT acknowledges that the Deliverables and Confidential Information include
that of the PSW Licensors and that the PSW Licensors are third-party
beneficiaries of this Agreement with all the rights of PSW to enforce the
obligations of this Agreement against CLIENT.
Section 9
U.S. GOVERNMENT RESTRICTED RIGHTS
If this license is acquired under a U.S. Government contract, use, duplication
or disclosure by the U.S. Government is subject to restrictions as set forth in
DFARS 252.227-7013(c)(ii) for Department of Defense contracts and as set forth
in FAR 52.227-19(a)-(d) for civilian agency contracts. PSW and the PSW Licensors
reserve all unpublished rights under the United States copyright laws.
(remainder of Customer license agreement intentionally omitted)
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SOFTWARE LICENSING AGREEMENT
SCHEDULE B
Minimum Terms for Customer License Agreement
Schedule 1
(include Deliverables containing relevant objects from Schedule A of the
Software License Agreement between CCSI and PSW and indicate which objects they
contain.)
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SOFTWARE LICENSING AGREEMENT
SCHEDULE B
Minimum Terms for Customer License Agreement
Schedule 2
(description of the locations, sites, divisions, and legal entities defining
the boundaries of the CLIENT's business for purposes of this agreement)
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SOFTWARE LICENSING AGREEMENT
SCHEDULE C
Minimum Terms for Reseller Agreement
(The following terms are the minimum terms which will be included in the
Reseller Agreement. In the minimum terms, Reseller will be referred to as
RESELLER, and the Customer license agreement will be referred to as an End User
License Agreement. The Reseller agreement will serve as an extension to the
Customer license agreement, which is attached as Schedule B of the Software
Licensing Agreement. All Resellers must be licensed first as a Customer.)
WITNESSETH:
WHEREAS, pursuant to that certain End User License Agreement between PSW
and RESELLER dated _____________, RESELLER desires the right to resell portions
of the Deliverables and PSW Object Library to other parties.
WHEREAS, PSW is willing and able to grant such rights and licenses on the
terms and conditions set forth herein;
Section 1
DEFINITION OF TERMS
The definition of terms set forth in this Section 1 shall apply in this
Agreement (in addition to terms expressly defined elsewhere herein) including
any and all exhibits, addenda, and amendments made to or incorporated herein now
or in the future.
1.1 "De1iverables." Any and all tangible products delivered by PSW for
RESELLER under this Agreement, including all object diagrams, functional
specifications, prototypes, reports, conversion tools, class libraries, the
"source" code and object code, and all necessary Documentation therefor and
further including enhancements, modifications, and corrections made to the
Deliverables by PSW pursuant to support, training, and maintenance services
provided to RESELLER by PSW.
1.2 "Documentation." All textual material relating to the Deliverables,
including flow charts, operating instructions, and related technical
information. Documentation shall include user manuals, help text, training
materials, and sample source code used for training and documentation purposes.
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1.3 "PSW Systems Library." Those Deliverables in Schedule 1 that are
specified to be part of the PSW Systems Library.
l.4 "PSW Business Library." Those Deliverables in Schedule 1 that are
specified to be part of the PSW Business Library.
1.5 "PSW Object Library." The combination of the PSW Systems Library and
the PSW Business Library.
1.6 "PSW Enhancements." Changes, corrections, modifications, or additions,
including all new releases and applications, made by PSW to the PSW Object
Library and related Documentation.
1.7 "RESELLER Enhancements." Changes, corrections, modifications, or
additions, including all new releases and applications, made by RESELLER to the
PSW Object Library and related Documentation.
1.8 "Computer Business." The Computer Business shall be defined to include
the research, development, production, marketing, selling, distribution, or
leasing of computer hardware, computer hardware peripherals, integrated document
management systems or cameras, or the performance of development, consulting,
training, or maintenance services relating to computer hardware, computer
hardware peripherals, integrated document management systems, or cameras.
1.9 "PSW Licensors". Other parties who have licensed portions of the
Deliverables to PSW under separate agreements.
1.10 "Customer." Any end user customers to whom RESELLER directly markets
and sells the Product and who sign an End User License Agreement as minimally
defined in Schedule 2.
1.11 "Product" Any deliverables licensed by PSW that includes the Object
21 Library, CCSI Enhancements, PSW Enhancements, Documentation, or other
Deliverables. "Product" may include one or more separately priced PSW
offerings.
1.12 "End User License Agreement." The license agreement signed by an end
user customer of the reseller as minimally specified in Schedule 2.
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Section 2
GRANT AND SCOPE OF RIGHTS FROM PSW TO RESELLER
2.1 Scope of Rights Granted. PSW hereby grants to RESELLER, and RESELLER,
hereby accepts, a nontransferable, nonexclusive right to distribute the
Deliverables to Customers.
2.2 Rights Restrictions. RESELLER is not authorized to distribute or
sublicense the PSW Business Library or PSW Enhancements to any party currently
in or planning to enter the Computer Business as defined in Section 1.
2.3 End User License Agreement. Any distribution of the Product by
RESELLER shall be pursuant to the terms and conditions of the End User License
Agreement in the form attached hereto as Schedule 2. The terms and conditions of
such End User License shall serve as the minimum documentation distributed by
RESELLER defining each Customer's rights and obligations regarding the Product
and RESELLER agrees to provide in a conspicuous manner one copy of the End User
License with each Product. Although RESELLER shall not be liable to PSW for any
Customer's failure to comply with the terms and conditions of the End User
License agreement, RESELLER agrees to report to PSW any known or suspected
violation(s) of the Customer license agreement and to reasonably cooperate with
PSW in any enforcement actions taken by PSW.
Section 3
OWNERSHIP
3.1 Continuing Rights. PSW and PSW Licensors shall retain full ownership
of and full rights to continue to use and market the Deliverables and the PSW
Enhancements and all rights, title and interest in and to all copyrights, patent
rights or trade secret rights associated with the Deliverables and the PSW
Enhancements.
3.2 Copyrights. RESELLER shall not remove any existing copyright or other
proprietary rights notices from the PSW Object Library, PSW Enhancements, or the
Deliverables.
Section 4
TERM
4.1 Basic Term. This agreement shall be effective on the date first above
written and shall remain in force until __________________ (date when RESELLER
rights terminate).
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4.2 Loss of Rights by PSW. In the event that PSW shall lose any of its
sublicenses or rights due to breach, bankruptcy, insolvency, or any other event,
the rights and obligations in this agreement shall continue until the
termination date.
Section 5
CONFIDENTIAL INFORMATION
Treatment of Confidential Information as defined in the End User License
agreement shall apply to this Agreement as well.
Section 6
REPRESENTATIONS AND WARRANTIES
RESELLER acknowledges and agrees that any representations and warranties
regarding the Deliverables are provided by PSW and that its sole remedy for
breach hereunder shall be against PSW and not against the PSW Licensors. THE PSW
LICENSORS EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
THE DELIVERABLES OR THE RESULTS OBTAINED FROM USING THE SAME, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Section 7
LIMITATION OF LIABILITY
UNDER NO CIRCUMSTANCES SHALL PSW OR THE PSW LICENSORS BE LIABLE FOR SPECIAL,
EXEMPLARY, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO
LEGAL FEES, LOSS OF PROFITS, LOSS OR INACCURACY OF DATA, OR LOSS RESULTING FROM
BUSINESS DISRUPTION, EVEN IF PSW OR THE PSW LICENSORS HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
Section 8
THIRD-PARTY BENEFICIARY
RESELLER acknowledges that the Deliverables and Confidential Information include
that of the PSW Licensors and that the PSW Licensors are third-party
beneficiaries of this Agreement with all the rights of PSW to enforce the
obligations of this Agreement against RESELLER.
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<PAGE>
Section 9
U.S. GOVERNMENT RESTRICTED RIGHTS
If this license is acquired under a U.S. Government contract, use, duplication
or disclosure by the U.S. Government is subject to restrictions as set forth in
DFARS 252.227-7013(c)(ii) for Department of Defense contracts and as set forth
in FAR 52.227-19(a)-(d) for civilian agency contracts. PSW and the PSW Licensors
reserve all unpublished rights under the United States copyright laws.
(remainder of reseller agreement intentionally omitted)
C-5
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SOFTWARE LICENSING AGREEMENT
SCHEDULE C
Schedule 1
(include Deliverables containing relevant objects from Schedule A of the
Software License Agreement between CCSI and PSW and indicate which objects they
contain)
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<PAGE>
SOFTWARE LICENSING AGREEMENT
SCHEDULE C
Minimum Terms for Reseller Agreement
Schedule 2 - Minimum Terms for Customer License Agreement
(The following terms are the minimum terms for Customers which will be included
in any Customer license agreement conveyed by a PSW Reseller. In the minimum
terms, the Reseller will be referred to as RESELLER and the Customer the Product
will be referred to as CLIENT.)
Section 1
DEFINITION OF TERMS
The definition of terms set forth in this Section 1 shall apply in this
Agreement (in addition to terms expressly defined elsewhere herein) including
any and all exhibits, addenda, and amendments made to or incorporated herein now
or in the future.
1.1 "Deliverables." Any and all tangible products delivered by RESELLER
for CLIENT under this Agreement, including all object diagrams, functional
specifications, prototypes, reports, conversion tools, class libraries, the
"source" code and object code, and all necessary Documentation therefor and
further including enhancements, modifications, and corrections made to the
Deliverables by RESELLER pursuant to support, training, and maintenance services
provided to CLIENT by RESELLER.
1.2 "Documentation." All textual material relating to the Deliverables,
including flow charts, operating instructions, and related technical
information. Documentation shall include user manuals, help text, training
materials, and sample source code used for training and documentation purposes.
1.3 "RESELLER Systems Library." Those Deliverables in Schedule 1 that are
specified to be part of the RESELLER Systems Library.
1.4 "RESELLER Business Library." Those Deliverables in Schedule 1 that are
specified to be part of the RESELLER Business Library.
1.5 "RESELLER Object Library." The combination of the RESELLER Systems
Library and the RESELLER Business Library.
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1.6 "CLIENT Enhancements." Changes, corrections, modifications, or
additions, including all new releases and applications, made by CLIENT to the
RESELLER Object Library and related Documentation.
1.7 "RESELLER Enhancements." Changes, corrections, modifications, or
additions, including all new releases and applications, made by RESELLER to the
RESELLER Object Library and related Documentation.
1.8 "Computer Business." The Computer Business shall be defined to include
the research, development, production, marketing, selling, distribution, or
leasing of computer hardware, computer hardware peripherals, integrated document
management systems or cameras, or the performance of development, consulting,
training, or maintenance services relating to computer hardware, computer
hardware peripherals, integrated document management systems, or cameras.
1.9 "RESELLER Licensors." Other parties who have licensed portions of the
Deliverables to RESELLER under separate agreements.
Section 2
GRANT AND SCOPE OF RIGHTS FROM RESELLER TO CLIENT
2.1 Scope of License. RESELLER hereby grants to CLIENT the right to use,
execute, modify, and reproduce, and distribute for internal use the licensed
portions of the RESELLER Object Library as specified in Schedule 1 and any
RESELLER Enhancements. Schedule 2 specifies the extent of the CLIENT's business
as it pertains to this license.
2.2 License Restrictions. CLIENT is not authorized to distribute or
sublicense the RESELLER Object Library or RESELLER Enhancements to any party
currently in or planning to enter the Computer Business as defined in Section 1.
CLIENT is not authorized to operate a service bureau utilizing any Deliverables,
CLIENT Enhancements, or RESELLER Enhancements.
2.3 Representation and Warranty of CLIENT Business. If CLIENT is licensing
any portion of the RESELLER Business Library, CLIENT represents and warrants by
signing this Agreement that neither it nor its subsidiaries, affiliates, or
divisions are not currently in, nor planning to enter the Computer Business
as defined in Section 1. If CLIENT is licensing any portion of the RESELLER
Business Library and either it or any of its subsidiaries, affiliates, or
divisions desires to enter the Computer Business, then prior to entering such
Computer Business CLIENT shall return all licensed portions of the RESELLER
Business Library to RESELLER and shall provide a sworn statement to RESELLER
averring that no copies of the
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RESELLER Business Library remain on any computer system or otherwise within its
possession or control.
Section 3
OWNERSHIP
3.1 RESELLER Enhancements. RESELLER shall own all RESELLER Enhancements.
3.2 CLIENT Enhancements. CLIENT shall own all CLIENT Enhancements.
3.3 Continuing Rights. RESELLER and RESELLER Licensors shall retain full
ownership of and full rights to continue to use and market the Deliverables and
RESELLER Enhancements and all rights, title and interest in and to all
copyrights, patent rights, and trade secret rights associated with the
Deliverables and RESELLER Enhancements.
3.4 Copyrights. CLIENT shall not remove any existing copyright or other
proprietary rights notices from the RESELLER Object Library, RESELLER
Enhancements or the Deliverables.
Section 4
TERM
4.1 Loss of Rights by RESELLER. In the event that RESELLER shall lose any
of its sublicenses or rights due to breach, bankruptcy, insolvency, or any other
event, the rights and obligations in this agreement shall continue.
Section 5
CONFIDENTIAL INFORMATION
5.1 RESELLER Information. In connection with this Agreement, RESELLER has
provided and shall provide CLIENT with certain information that is proprietary
and confidential to RESELLER or the RESELLER Licensors and necessary or useful
for CLIENT to exploit the licenses granted hereunder.
5.2 Confidentiality. The term "Confidential Information" as used herein
shall mean any information disclosed by RESELLER to CLIENT pursuant to Section
5.1 above in a written or other tangible form clearly identified as being
confidential. Oral or visual information shall not be considered as Confidential
Information unless it is designated confidential at the time of oral or visual
disclosure and
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<PAGE>
reduced to a writing clearly marked as being confidential that is sent to CLIENT
by RESELLER within thirty (30) days after such oral or visual disclosure. For
the purpose of this Agreement, any Deliverable or RESELLER Enhancement shall be
deemed Confidential Information.
5.3 Treatment of Confidential Information. During this Agreement and
thereafter, CLIENT shall keep the Confidential Information in strict confidence
and shall not disclose it to any person, firm or corporation outside CLIENT, nor
use the same for any purpose other than performing the Agreement. In addition,
CLIENT agrees to guard the Confidential Information by restricting its internal
dissemination to only those employees within CLIENT having a need to know the
Confidential Information for purposes of this Agreement. CLIENT has full
responsibility to ensure that all employees who are given access to the
Confidential Information maintain the confidentiality of the Confidential
Information, whether or not such employees continue to be employees of CLIENT.
5.4 Exceptions to Treatment of Confidential Information.
Notwithstanding Section 5.3 above, CLIENT shall have no confidential
obligation and no use restriction hereunder with respect to any Confidential
Information that
(1) is already known to CLIENT at the time of disclosure thereof as
evidenced by written records;
(2) is or becomes publicly known through no wrongful act of CLIENT at
or subsequent to the time of disclosure thereof; or
(3) is permitted for release by prior written consent of RESELLER.
5.5 Tangible Embodiments. Any and all written or tangible embodiments of
information disclosed to CLIENT by RESELLER hereunder shall be and remain the
property of RESELLER, and CLIENT agrees promptly to return such tangible
embodiments, including any copy thereof, to RESELLER upon termination of this
Agreement.
5.6 Intellectual Property. Except to the extent necessary to perform
CLIENT's obligations hereunder or as otherwise provided herein, no license or
right, expressed or implied, is hereby conveyed or granted to CLIENT for any
invention, patent application, patent, copyright, know-how, trade secret or
other intellectual property of RESELLER or RESELLER Licensors.
5.7 Trademarks. No license or right, expressed or implied, is hereby
conveyed or granted to CLIENT to use any trademark of RESELLER without the prior
express written consent of RESELLER or any trademark of any RESELLER Licensor
without the prior express written consent of such RESELLER Licensor.
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<PAGE>
5.8 Enforcement. CLIENT understands and agrees that the obligations and
restrictions provided herein are necessary and reasonable in order to protect
the business of RESELLER and the RESELLER Licensors, and RESELLER and the
RESELLER Licensors would be irreparably harmed by any breach or threatened
breach hereof. In addition to any other remedies available for breach thereof,
RESELLER and the RESELLER Licensors shall be entitled to obtain injunctive
relief against a threatened breach or continuation of any such breach, without
the necessity of providing actual damages.
5.9 Confidentiality of Other Parties. CLIENT acknowledges that portions of
the RESELLER object Library may be licensed by RESELLER from other parties. To
the degree that the identity of and terms of those license agreements are made
known to CLIENT for the execution of this Agreement, CLIENT shall keep this
Confidential Information in strict confidence and shall not disclose it to any
person, firm or corporation except as required to execute this Agreement;
provided, however, that either party may, on a confidential basis, disclose
those Agreements to its accountants, attorneys, and financing organizations.
Section 6
REPRESENTATIONS AND WARRANTIES
CLIENT acknowledges and agrees that any representations and warranties regarding
the Deliverables are provided by RESELLER and that its sole remedy for breach
hereunder shall be against RESELLER and not against the Reseller Licensors. THE
RESELLER LICENSORS EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE DELIVERABLES OR THE RESULTS OBTAINED FROM USING THE SAME,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
Section 7
LIMITATION OF LIABILITY
UNDER NO CIRCUMSTANCES SHALL RESELLER OR THE RESELLER LICENSORS BE LIABLE FOR
SPECIAL, EXEMPLARY, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT
LIMITED TO LEGAL FEES, LOSS OF PROFITS, LOSS OR INACCURACY OF DATA, OR LOSS
RESULTING FROM BUSINESS DISRUPTION, EVEN IF RESELLER OR THE RESELLER LICENSORS
HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
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<PAGE>
Section 8
THIRD-PARTY BENEFICIARY
CLIENT acknowledges that the Deliverables and Confidential Information include
that of the Reseller Licensors and that the Reseller Licensors are third-party
beneficiaries of this Agreement with all the rights of Reseller to enforce the
obligations of this Agreement against CLIENT.
Section 9
U.S. GOVERNMENT RESTRICTED RIGHTS
If this license is acquired under a U.S. Government contract, use, duplication
or disclosure by the U.S. Government is subject to restrictions as set forth in
DFARS 252.227-7013(c)(ii) for Department of Defense contracts and as set forth
in FAR 52.227-19(a)-(d) for civilian agency contracts. RESELLER and the RESELLER
Licensors reserve all unpublished rights under the United States copyright laws.
(remainder of the reseller's Customer license agreement intentionally omitted)
(Schedules 1 and 2 to this End User Agreement are the same as Schedules 1 and 2
to PSW's end user agreement, which is Schedule B to Software Licensing
Agreement)
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Exhibit 10.10*
SOFTWARE & METHODOLOGY LICENSING AGREEMENT
THIS SOFTWARE & METHODOLOGY LICENSING AGREEMENT, (this "Agreememt"), made and
entered by and between PSW Technologies, Inc. (hereinafter "PSW"), a Delaware
corporation with its offices at 9050 Capital of Texas Highway North, Austin,
Texas 78759, and LICENSEE (the scope and definition of LICENSEE as it pertains
to this Agreement is specified in Schedule2).
WITNESSETH:
WHEREAS, LICENSEE desires to license from PSW certain software and methodology
assets;
WHEREAS, PSW is willing and able to grant such rights and licenses on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
intending to be legally bound, the parties hereby agree as follows:
Section 1
DEFINITION OF TERMS
The definition of terms set forth in this Section 1 shall apply in this
Agreement (in addition to expressly defined elsewhere herein) including any and
all exhibits, addenda, and amendments made to or incorporated herein now or in
the future.
1.1 "Deliverables." Any and all tangible products or assets delivered by PSW
for LICENSEE under this Agreement, including all object diagrams,
functional specifications, prototypes, reports, conversion tools, class
libraries, the "source" code and object code, and all necessary
Documentation therefor.
1.2 "Documentation." All textural material relating to the Deliverables,
including flow charts, operating instructions, and related technical
information. Documentation shall include user manuals, help text, training
materials, and sample source code used for training and documentation
purposes.
1.3 "Genova." The name of PSW's family of software and methodology assets for
custom business system development
1.4 "Genova Methodology." PSW's family of software and methodology assets for
custom business Systems using object oriented software
* Confidential treatment is requested for certain portions of Exhibit 10.10
pursuant to Rule 406 under the Securities Act of 1933. The portions of
Exhibit 10.10 which have been omitted are denoted by an asterisk [*]. The
omitted portions of Exhibit 10.10 have been filed with the Securities and
Exchange Commission pursuant to Rule 406 under the Securities Act of 1933.
<PAGE>
technology. "This approach includes definition of phases, phase entry &
exit criteria, deliverables, activities, templates tips & techniques
1.5 "Genova On-Line." The reference document which specifies PSW's software
development methodology available in formats that can be viewed by
computers.
1.6 "Genova Academy." The classes taught by PSW to train software developers
and other project personnel in Genova.
1.7 "Genova Courseware." The documents, presentations, exercises, and other
tangible assets which comprise the materials used to teach the Genova
Academy classes.
1.8 "Genova Systems Library." Those Deliverables in Schedule 1 that are
specified to be part of the Genova Systems Library.
1.9 "Genova Business Library." Those Deliverables in Schedule 1 that are
specified to be part of the Genova Business Library.
1.10 "Genova Object Library." The combination of the Genova Systems Library and
the Genova Business Library.
1.11 "PSW Enhancements." Changes, corrections, modifications, or additions,
including all new releases and applications, made by PSW to the
Deliverables or related Documentation.
1.12 "LICENSEE Enhancements." Changes, corrections, modifications, or
additions, including all new releases and applications, made by LICENSEE
to the Deliverables or related Documentation.
1.13 "PSW Licensors." Other parties who have licensed portions of the
Deliverables or Documentation to PSW under Separate agreements.
1.14 "Service Bureau." An operation which directly provides the services and
benefits of Genova to parties other than Licensee. Providing services to
LICENSEE customers utilizing Systems developed with Genova is not defined
to be a Service Bureau.
1.15 "Computer Business." The Computer Business shall be defined to include the
research, development, production, marketing, selling, distribution, or
leasing of computer hardware, computer hardware peripherals, integrated
document management systems or cameras, or the performance of development,
consulting, training or maintenance services relating to computer
hardware, computer hardware peripherals, integated document management
systems or cameras.
Section 2
<PAGE>
GRANT AND SCOPE OF LICENSE FROM PSW TO LICENSEE
2.1 Scope of Licence. PSW hereby grants to LICENSEE the right to use, execute,
modify, reproduce, and distribute for internal use the Deliverables as
specified in Schedule 1, and any PSW Enhancements which made available to
LICENSEE per this agreement. Schedule 2 specifies the extent of LICENSEE's
business as it pertains to this license. The RESELLER agreement modifies
and extends these rights.
2.2 Consideration. In consideration for the license granted in this section,
LICENSEE will pay PSW the fees specified in Schedule 1. License fees shall
be invoiced by PSW upon delivery and are payable within 30 days of receipt
of invoice.
2.3 Acceptance. The Deliverable shall be deemed accepted by Licensee upon
delivery by PSW.
2.4 Licence Restrictions. LICENSEE is not authorized to market, sell,
distribute or sub-license the Deliverables or PSW Enhancements. LICENSEE
is not authorized to operate a Service Bureau utilizing any Deliverables,
LICENSEE Enhancements of PSW Enhancements. LICENSEE may not license any
portion of the Genova Business Library unless it has signed the Genova
Business Object Library Amendment to this Agreement. The RESELLER
agreement modifies and extends these rights..
2.5 Continuing Rights. Subject to the rights granted in this Section 2, PSW
and PSW Licensors shall retain all ownership of and full rights to market
and continue to use the Deliverables and all PSW Enhancements and all
rights, title, and interest in and to all copyrights, patent rights or
trade secret rights associated with the Deliverables and PSW Enhancements.
Section 3
OTHER SERVICES AND ENHANCEMENTS
3.1 Maintenance, Technical Support, and Training. Genova is licensed as source
code that is modifiable by LICENSEE and therefore maintenance and
technical support is not provided under this Agreement. Genova Courseware
is licensable under this Agreement, but training is not provided under
this Agreement. LICENSEE is expected to maintain, provide technical
support, and conduct training for the Deliverables provided herein or
enter into a separate agreement with PSW to provide these service.
<PAGE>
3.2 PSW Enhancements for LICENSEE. Enhancements to the Deliverables which are
substantially performed by PSW shall be owned by PSW and are subject to
the terms of this Agreement.
3.3 Other PSW enhancements. Upon request by LICENSEE, PSW Enhancements not
made for LICENSEE but which can be rightfully licensed to LICENSEE shall
be made available to LICENSEE for an administrative fee specified in
Schedule 1. These PSW Enhancements remain the intellectual property of PSW
and are subject to the terms of this Agreement. PSW shall solely determine
what constitutes a separately licensable asset requiring an additional
license fee versus an enhancement to an existing licensed asset. PSW will
be responsible for maintaining source control Genova Object Library and
providing updates to LICENSEE on a regular basis. Updates will be provided
no less than once a year.
3.4 Enhancements by LICENSEE. Enhancements to the Deliverables which are
performed by LICENSEE shall be owned by LICENSEE.
Section 4
COPYRIGHT NOTICES AND INTELLECTUAL PROPERTY
RIGHTS
4.1 Copyright Notices. LICENSEE shall not remove any existing copyright or
other proprietary rights notices from the Deliverables or PSW
Enhancements.
4.2 Enforcement of Copyright. LICENSEE shall be responsible to enforce PSW or
PSW Licensor copyrights from infringement that result from misuse of
Deliverables provided to Licensee under this Agreement. A failure by
LICENSEE to enforce rights against infringers of these copyrights in a
timely manner after appropriate notification shall be considered a
material breach of this Agreement by LICENSEE.
4.3 Protection of Intellectual Property Rights. LICENSEE shall promptly notify
PSW of any known or suspected violation of PSW or PSW Licensor
intellectual property rights including copyrights, patents, trademarks,
trade secrets, or other proprietary information. LICENSEE shall cooperate
with PSW and provide all reasonable information deemed necessary by PSW to
protect the intellectual property rights of PSW and PSW Licensors. Failure
to notify PSW promptly or to cooperate with PSW shall be a material breach
of this Agreement.
<PAGE>
Section 5
INDEMNIFICATION
Indemnity for Deliverables. LICENSEE agrees to indemnify and hold harmless PSW
and its affiliates, officers, agents, directors, and employees, against any and
all claims, actions, proceedings, expenses, damages, attorney's fees, and
liabilities (including but not limited to any governmental investigations,
complaints and actions) arising out of or in connection with (a) any breach of
this agreement by LICENSEE, including its representations, warranties and
covenants, (b) any use of the Deliverables described herein, and (c) any claim
or action for personal injury, death or other cause of action involving product
liability claims arising from or relating to any of the Deliverables.
Section 6
TERM
6.1 Basic term. This Agreement shall be effective from the date it is
originally signed by LICENSEE and PSW and shall remain in force unless it
terminates as provided below.
6.2 Termination for Default. This Agreement shall terminate upon the
bankruptcy or insolvency of LICENSEE.
6.3 Termination for Breach. In the event of material breach of this Agreement
by either party, the other party may terminate this Agreement by giving
thirty (30) days prior written notice thereof; provided that this
Agreement shall not terminate if the party in breach has cured the breach
of which it has been notified prior to the expiration of the thirty (30)
days.
6.4 Loss of Rights by PSW. In the event that PSW shall lose any of its
sub-licenses or rights due to breach, bankruptcy, insolvency, or any other
event, the rights and obligations in this agreement shall survive and
continue.
<PAGE>
Section 7
CONFIDENTIAL INFORMATION
7.1 PSW Information. In connection with this Agreement, PSW has provided and
shall provide LICENSEE with certain information that is proprietary and
confidential to PSW or the PSW Licensors and necessary or useful for
LICENSEE to exploit the licenses granted hereunder.
7.2 Confidentiality. The term "Confidential Information" as used herein shall
mean any information disclosed by PSW to LICENSEE related to this
Agreement in a written or other tangible form clearly identified as being
confidential. Oral or visual information shall not be considered as
Confidential Information unless it is designated confidential at the time
of oral or visual disclosure and reduced to a writing clearly marked as
being confidential that is sent to LICENSEE by PSW within thirty (30) days
after such oral or visual disclosure. For the purpose of this Agreement,
any Deliverable or PSW Enhancement shall be deemed Confidential
Information.
7.3 Treatment of Confidential Information. During this Agreement and
thereafter, LICENSEE shall keep the Confidential Information in strict
confidence and shall not disclose it to any person, firm or corporation
outside LICENSEE, nor use the same for any purpose other than performing
the Agreement, in addition, LICENSEE agrees to safeguard the Confidential
Information by restricting its internal dissemination to only those
employees within LICENSEE having a need to know the Confidential
Information for purposes of this Agreement. LICENSEE is fully responsible
to ensure that all employees who are given access to the Confidential
Information maintain the confidentiality of the Confidential Information,
whether or not such employees continue to be employees of LICENSEE. The
RESELLER agreement modifies and extends the treatment of Confidential
Information.
7.4 Exceptions to Treatment of Confidential Information. Notwithstanding the
above, LICENSEE shall have no confidential obligation and no use
restriction hereunder with respect to any confidential information that:
<PAGE>
(1) is already know to LICENSEE at the time of disclosure thereof as
evidenced by written records;
(2) is or becomes publicly known through no wrongful act of LICENSEE at
or subsequent to the time of disclosure thereof; or
(3) is permitted for release by prior written consent of PSW.
7.5 Tangible Embodiments. Any and all written or tangible embodiments of
information disclosed to LICENSEE by PSW hereunder shall be and remain the
property of PSW, and LICENSEE agrees promptly to return such tangible
embodiments, including any copy thereof, to PSW upon termination of this
Agreement.
7.6 Intellectual Property. Except to the extent necessary to perform
LICENSEE's obligations hereunder or as otherwise provided herein, no
license or right, expressed or implied, is hereby conveyed or granted to
LICENSEE for any invention, patent application, patent, copyright, know
how, trade secret or other intellectual property of PSW or PSW Licensors.
7.7 Trademarks. No license or right, expressed or implied, is hereby conveyed
or granted to LICENSEE to use any trademark of PSW without the prior
express written consent of PSW or any trademark of any PSW Licensors
without the prior express written consent of such PSW Licensor.
7.8 Enforcement. LICENSEE understands and agrees that the obligations and
restrictions provided herein are necessary and reasonable in order to
protect the businesses of PSW and the PSW Licensors, and PSW and the PSW
Licensors would be irreparably harmed by any breach or threatened breach
hereof. In addition to any other remedies available for breach thereof,
PSW and the PSW Licensors shall be entitled to obtain injunctive relief
against a threatened breach or continuation of any such breach, without
the necessity of providing actual damages.
7.9 Confidentiality of Other Parties. LICENSEE acknowledges that portions of
the Deliverables may be licensed by PSW from other parties. To the degree
that the identity of and terms of those license agreements are made know
to LICENSEE for the execution of this Agreement, LICENSEE shall keep this
Confidential Information in strict confidence and shall not disclose it to
any person, firm or corporation except as required to execute this
Agreement; provided, however, that either party may, on a confidential
basis, disclose those Agreements to its accountants, attorneys, and
financing organizations.
Section 8
<PAGE>
REPRESENTATIONS AND WARRANTIES
8.1 Limited Warranty. If any of the physical media in the Deliverables are
physically damaged when received, the damaged items can be returned to PSW
within 30 days and PSW will replace the damaged materials at PSW's own
cost.
8.2 No Other Warranty. LICENSEE acknowledges that PSW and PSW LICENSORS
EXPRESSLY DISCLAIM ANY OTHER WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
THE DELIVERABLES OR THE RESULTS OBTAINED FROM USING THE SAME, INCLUDING
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
8.3 Warranty of Performance. PSW warrants that the services performed under
this Agreement will be of professional quality, performed by qualified
staff experienced in the relevant disciplines and performed in a manner
consistent with generally accepted industry standards.
8.4 Compliance with Laws. PSW warrants that in performance of services under
this agreement, it shall comply with all applicable federal, state, and
local laws, codes and government regulations, including without
limitation, any California Wage Orders and Executive Orders pertaining to
immigration, foreign nationals working in the United States and labor and
employment. PSW agrees that it will not permit work to be performed under
this Agreement by individuals who are citizens of countries to which the
United States government prohibits export of software and related
technology.
Section 9
LIMITATION OF LIABILITY
UNDER NO CIRCUMSTANCES SHALL PSW OR THE PSW LICENSORS BE LIABLE FOR SPECIAL,
EXEMPLARY, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGE, INCLUDING BUT NOT LIMITED TO
LEGAL FEES, LOSS OF PROFITS, LOSS OR INACCURACY OF DATA, OR LOSS RESULTING FROM
BUSINESS DISRUPTION, EVEN IF PSW OR THE PSW LICENSORS HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. PSW's SOLE LIABILITY IS LIMITED TO THE AMOUNT PAID
BY LICENSEE.
<PAGE>
Section 10
THIRD-PARTY BENEFICIARY
LICENSE acknowledges that the Deliverables and Confidential Information include
that of the PSW Licensors and that the PSW Licensors are third-party
beneficiaries of this Agreement with all the rights of PSW to enforce LICENSEE's
obligations under this Agreement.
Section 11
U.S. GOVERNMENT RESTRICTED RIGHTS
If this license is acquired under a U.S. Government contract, use, duplication
or disclosure by the U.S. Government is subject to restrictions as set forth in
DFARS 252.227-7013(c)(ii) for Department of Defense contracts and as set forth
in FAR 52.227-19 (a)-(d) for civilian agency contracts. PSW and the PSW
Licensors reserve all unpublished rights under the United States copyright laws.
Section 12
GENERAL
12.1 Entire Agreement. The provisions herein constitute the entire agreement
between the parties with respect to the licensing of the subject matter
hereof and supersede all prior agreements, oral or written, and all other
communications relating to the licensing of the subject matter hereof. No
amendment or modification of any provision of this Agreement will be
effective unless set forth in a document that purports to amend this
Agreement and is executed by both parties.
12.2 Assignment. LICENSEE shall not sell, transfer, assign, or subcontract any
right or obligation hereunder except as expressly provided herein with out
the prior written consent of PSW. Any act in derogation of the foregoing
shall be null and void. PSW may assign this Agreement to another party
upon approval of LICENSEE and such approval shall not be unreasonably with
held
<PAGE>
12.3 Force Majeure. Except for failures to make any payment when due, neither
party shall be held liable for failure to fulfill its obligations
hereunder if such failure is due to a natural calamity, act of government,
or similar cause beyond the control of such party.
12.4 Governing Law. The validity, construction, and performance of this
Agreement shall be governed by the laws of the Senate of Texas.
12.5 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be contrary to law, the remaining provisions of
the Agreement will remain in full force and effect.
12.6 Compliance with Laws and Regulations. PSW and LICENSEE shall comply with
all laws, rules, and regulations of competent public authorities relating
to the duties, obligations, and performance under this Agreement and shall
procure all licenses and pay all fees and other charges required thereby.
12.7 Notices. Any notices required or permitted to be made or given by either
party hereto pursuant to this Agreement will be deemed sufficiently made
or given of the fifth day after the date of mailing if sent to such party
by certified mail, postage prepaid, addressed as set forth below or to
such other address as a party shall designate by written notice given to
the other party. Contact and addresses for notices are Specified in
Schedule 3.
12.8 Waiver. A failure of either party to exercise any right provided for
herein shall not be deemed a waiver of any right under this Agreement.
12.9 Right Outside of Agreement. Nothing contained in this Agreement shall be
construed as limiting rights that the parties may enjoy outside the scope
of the licenses granted and the obligations and restrictions set forth or
treated herein.
<PAGE>
IN WITNESS THEREOF, the parties have caused this Agreement to be signed below by
their duly authorized representatives and to be effective as of the later date
written below:
PSW Technologies LICENSEE
By:/s/ Pat Motola By:/s/ [Illegible]
--------------------------------- --------------------------------
Title: CFO, VP of Operations Title: President
----------------------------- ----------------------------
Date: 12-10-96 Date: 11-4-96
================================================================================
<PAGE>
SOFTWARE & METHODOLOGY LICENSING AGREEMENT
SCHEDULE LICENSED ASSETS & LICENSING FEES
LICENSED ASSET LICENSE FEE
- --------------------------------- -----------
Genova System Library [*]
(See Note 1)
OTHER FEES FEE
- --------------------------------- -----------
50 additional copies of Genova System
Library at [*] per copy exclusively for resale
with Neptune systems $ [*]
Porting of Genova System Library from NeXTSTEP
to OPENSTEP $ [*]
NOTES
- ----------
1. The Genova System Library and Genova Business Library consist of the
software owned by PSW or to which PSW has rights which are required to
convert the licensed source code into software which can be executed on a
PSW specified computer configuration running PSW specified commercially
available software. The purchase, setup, support, maintenance,
installation, and configuration of hardware, commercially available
software, and PSW provided software is the responsibility of LICENSEE.
2. PSW also grants LICENSEE the option to purchase an unlimited number of
additional copies of the Genova System Library at a price not to exceed
$[*] per copy. These copies would also be exclusively for resale with
Neptune systems.
================================================================================
<PAGE>
SOFTWARE & METHODOLOGY LICENSING AGREEMENT
SCHEDULE 2
DEFINITION OF SCOPE OF LICENSEE BUSINESS
The scope of this Agreement is restricted to thc definition of Licensee's
business as defined below:
o Embarcadero Corporation
600 Harrison, Suite 525
San Francisco, CA. 94107
o Embarcadero System Corporation
400 Second, Suite 250
San Francisco, CA 94107
o Marine Terminals Corporation
600 Harrison, Suite 200
San Francisco, CA 94107
o Deep Water Port Service
600 Harrison, Suite 200
San Francisco, CA 94107
o Northstar
11790 Ocean Dock Road
PO Box 102019
Anchorage, AK 99510
o Majestic Insurance
400 Second Street, Suite 350
San Francisco, CA 94107
o Terminal Maintenance Corporation
1601 Pier D Street
Long Beach, CA 90802
================================================================================
<PAGE>
SOFTWARE & METHODOLOGY LICENSING AGREEMENT
SCHEDULE 3
NOTICES
Any notice to be given to PSW shall be addressed to:
PSW Technologies
9050 Capital of Texas highway North
Austin, Texas 78759
Attention: Vice President, Business Systems
PSW Technologies
9050 Capital of Texas Highway North
Austin, Texas 78759
Attention: CFO and Vice President, Operations
Any notice to be given to LICENSEE shall be addressed to:
Embarcadero Corporation
400 Second, Suite 250
San Francisco, CA 94107
Attention: Robert Verret
================================================================================
<PAGE>
================================================================================
