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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SAGENT TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 7372 94-3225290
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(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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800 W. EL CAMINO REAL, SUITE 300
MOUNTAIN VIEW, CA 94040
(650) 815-3100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
KENNETH C. GARDNER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SAGENT TECHNOLOGY, INC.
800 W. EL CAMINO REAL, SUITE 300
MOUNTAIN VIEW, CA 94040
(650) 815-3100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES TO:
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ARTHUR F. SCHNEIDERMAN THOMAS A. BEVILACQUA
HERBERT P. FOCKLER DAVID A. MAKARECHIAN
STEPHEN E. KIM KIMBERLEY E. HENNINGSEN
WILSON SONSINI GOODRICH & ROSATI BROBECK, PHLEGER & HARRISON LLP
PROFESSIONAL CORPORATION TWO EMBARCADERO PLACE
650 PAGE MILL ROAD 2200 GENG ROAD
PALO ALTO, CA 94304 PALO ALTO, CA 94303
(650) 493-9300 (650) 424-0160
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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. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF SECURITIES TO BE PROPOSED MAXIMUM AGGREGATE AMOUNT OF
REGISTERED OFFERING PRICE(1) REGISTRATION FEE
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Common stock, $0.001 par value............ $40,000,000 $11,120
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(o).
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 SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION -- JANUARY 28, 1999
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PROSPECTUS
, 1999
LOGO
SHARES OF COMMON STOCK
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THE COMPANY:
- - We develop and sell software designed to address organizations' rapidly
growing, Web-based information access, analysis and delivery needs.
- - Sagent Technology, Inc.
800 W. El Camino Real
Suite 300
Mountain View, CA 94040
(650) 815-3100
PROPOSED SYMBOL & MARKET:
- - SGNT/NASDAQ
THE OFFERING:
- - We are offering shares of our Common Stock.
- - The underwriters have an option to purchase an additional shares from
us to cover over-allotments.
- - This is our initial public offering, and no public market currently exists for
our shares.
- - We plan to use the proceeds from this offering for working capital, potential
acquisitions, repayment of short-term indebtedness and other general corporate
purposes.
- - Closing: , 1999.
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PER SHARE TOTAL
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Public offering price (Estimated): $ $
Underwriting fees:
Proceeds to Company:
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THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6.
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Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
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DONALDSON, LUFKIN & JENRETTE
HAMBRECHT & QUIST
PIPER JAFFRAY INC.
The undersigned is facilitating Internet distribution.
DLJDIRECT INC.
WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS. ALTHOUGH
WE ARE PERMITTED BY U.S. FEDERAL SECURITIES LAW TO OFFER THESE
SECURITIES USING THIS PROSPECTUS, WE MAY NOT SELL THEM OR ACCEPT YOUR
OFFER TO BUY THEM UNTIL THE DOCUMENTATION FILED WITH THE SEC RELATING TO
THESE SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE SEC. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR SOLICITATION OF YOUR
OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THAT WOULD NOT
BE PERMITTED OR LEGAL.
<PAGE> 3
TABLE OF CONTENTS
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Page
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Prospectus Summary............... 3
Risk Factors..................... 6
Use of Proceeds.................. 17
Dividend Policy.................. 17
Corporate Information............ 17
Capitalization................... 18
Dilution......................... 19
Selected Consolidated Financial
Data........................... 20
Management's Discussion and
Analysis of Financial Condition
and Results of Operations...... 21
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Page
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Business......................... 30
Management....................... 44
Certain Transactions............. 54
Principal Stockholders........... 57
Description of Capital Stock..... 59
Shares Eligible for Future
Sale........................... 62
Underwriting..................... 64
Legal Matters.................... 66
Experts.......................... 66
Available Information............ 67
Index to Financial Statements.... F-1
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<PAGE> 4
PROSPECTUS SUMMARY
This summary is qualified by more detailed information appearing in other
sections of this prospectus. The other information is important, so please read
this entire prospectus carefully. Unless stated otherwise, the information
contained in this prospectus assumes that the Underwriters' over-allotment
option to purchase an additional shares of Common Stock from
us is not exercised.
SAGENT TECHNOLOGY, INC.
We develop, market and support software designed to address organizations'
rapidly growing information access, analysis and delivery needs. We believe our
products, which we refer to as "Enterprise Intelligence" software, allow
organizations to make more informed, intelligent decisions that lead to the more
efficient use of corporate resources. Our Sagent DMS product suite provides
end-to-end, fully integrated data movement, access, analysis and presentation
capabilities on all major database platforms and is specifically designed to
deliver information over the Internet. We also provide Sagent Professional
Services, which include system and application design, implementation and
education services, to facilitate the successful implementation of the Sagent
DMS product suite.
Today, information about an organization's customers, products and
operations is one of its most important strategic assets. In particular, as
organizations have begun to pursue more complex operational strategies, their
need for timely information has increased. In addition, as businesses continue
to streamline their organizational structures to improve time to market and
responsiveness to rapidly changing market conditions, decision making authority
is expected to become more distributed, thus heightening the need for broader
dissemination of information throughout the enterprise. Most recently, the rapid
adoption of the Internet and the World Wide Web has given organizations the
ability to share information internally and externally on a cost-effective basis
and has dramatically increased the number of people who can receive and access
information.
The Sagent DMS product suite consists of eleven products that are closely
integrated across three core functional areas: Data Load and Management, Data
Access and Analysis, and Administration and Design. The core architecture and
technology of the Sagent DMS product suite allow it to handle some of the most
complex and demanding Enterprise Intelligence requirements. In particular, the
Sagent DMS product suite is designed to scale to increasing numbers of end users
within organizations and through the Internet and to handle the demands of an
increasing amount of available data. Our Web technology enables the distribution
of information throughout an organization and gives end users the ability to
access and analyze data through common Web browsers.
We intend to be a leading provider of Enterprise Intelligence software
solutions. Key elements of our strategy include: focusing on the demand for
Web-based Enterprise Intelligence solutions, extending our product functionality
and technology leadership, offering pre-built Enterprise Intelligence
applications for targeted vertical markets, broadening our distribution and
strategic relationships, providing high quality services to our customers
through our Professional Services Group and continuing development of products
that leverage the Windows NT operating platform.
We currently have more than 200 customers worldwide in a variety of
industries, including financial services, telecommunications, technology, health
care, retail and others. Our customers include Barnesandnoble.com, Bell
Communications Research, Inc., BellSouth Cellular Corp., J.P. Morgan & Co.,
Incorporated, Jiffy Lube International, Inc., MCI WorldCom, Inc. and Nordstrom,
Inc. We market our software and services through our direct sales force and
indirect channels, which include enterprise application vendors, resellers and
international distributors. Our strategic partnerships with Automatic Data
Processing, Inc., Advent Software, Inc. and Siebel Systems, Inc. provide "out of
the box" Enterprise Intelligence applications, such as total customer
management, for targeted vertical markets.
3
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THE OFFERING
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Common Stock offered by us............ shares
Common Stock to be outstanding after
the offering........................ shares(a)
Working capital, potential
acquisitions, repayment of short term
indebtedness and other general
corporate purposes.
Use of Proceeds.......................
Proposed Nasdaq National Market
symbol.............................. SGNT
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(a) Based on shares of Common Stock outstanding as of December 31, 1998.
Excludes (1) 4,534,835 shares of Common Stock that have been set aside for
stock options pursuant to non-plan grants and under our Amended 1995 Stock
Plan ("Amended 1995 Plan") and 1998 Stock Plan (the "1998 Plan" and
collectively with the Amended 1995 Plan, the "Stock Plans"), of which
options to purchase 2,313,735 shares at a weighted average exercise price of
$ 3.38 per share were outstanding as of December 31, 1998, (2) 150,000
shares of Common Stock that have been set aside under our 1999 Director
Option Plan (the "Director Plan"), (3) 450,000 shares of Common Stock that
have been set aside for employees who elect to participate in our 1999
Employee Stock Purchase Plan (the "1999 Purchase Plan") and (4) 235,623
shares of Common Stock issuable upon exercise of outstanding warrants.
4
<PAGE> 6
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
You should read the following summary consolidated financial data together
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our Consolidated Financial Statements and Notes thereto included
elsewhere in this prospectus.
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THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, DECEMBER 31,
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1996 1997 1998 1997 1998
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STATEMENT OF OPERATIONS DATA:
Revenues, net:
Licenses.............. $ 240 $ 5,728 $ 10,459 $ 1,842 $ 3,618
Services.............. 39 1,350 6,584 583 2,128
------- ------- -------- ------- --------
Total revenues,
net........... 279 7,078 17,043 2,425 5,746
Gross profit............... 32 6,205 11,977 1,957 4,384
Loss from operations....... (7,231) (6,908) (13,684) (2,235) (1,943)
Net loss................... (7,039) (6,900) (13,701) (2,214) (1,988)
Pro forma net loss per
share, basic and
diluted.................. $ (0.74)
========
Shares used in calculating
pro forma net loss per
share, basic and
diluted(a)............... 18,495
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AS OF DECEMBER 31, 1998
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PRO FORMA
ACTUAL AS ADJUSTED(B)
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BALANCE SHEET DATA:
Cash and cash equivalents........................ $ 3,093 $
Working capital.................................. 1,122
Total assets..................................... 13,196
Long-term obligations, net of current portion.... 3,346
Total stockholders' equity....................... 1,671
</TABLE>
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(a) See Note 2 of Notes to Consolidated Financial Statements for information
concerning the calculation of shares used in computing pro forma net loss
per share.
(b) Pro forma as adjusted reflects the conversion of our outstanding preferred
stock to Common Stock, which will occur upon the closing of the offering,
the sale of shares of Common Stock in the offering and the
application of the net proceeds from the offering, after deducting
underwriting discounts and commissions and estimated offering expenses. See
"Use of Proceeds" and "Capitalization."
5
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RISK FACTORS
Before you invest in our Common Stock, you should become aware of various
risks, including those described below. You should carefully consider these risk
factors, together with all of the other information included in this prospectus,
before you decide whether to purchase shares of our Common Stock. The risks set
out below may not be exhaustive.
Keep these risk factors in mind when you read "forward-looking" statements
elsewhere in this prospectus. These are statements that relate to our
expectations for future events and time periods. Generally, the words
"anticipate," "expect," "intend" and similar expressions identify
forward-looking statements. Forward-looking statements involve risks and
uncertainties, and future events and circumstances could differ significantly
from those anticipated in the forward-looking statements.
WE HAVE A LIMITED OPERATING HISTORY AND A HISTORY OF LOSSES
We commenced operations in June 1995 and have a limited operating history.
We did not begin selling our first products until the fourth quarter of 1996,
and a number of new products and new versions of existing products were
introduced in 1997. As a result, we have experienced the risks and difficulties
frequently encountered by early stage companies, particularly companies in new
and rapidly evolving markets.
We incurred net losses and losses from operations for the period ended
December 31, 1995 and each of the years ended December 31, 1996, 1997 and 1998.
As of December 31, 1998, we had an accumulated deficit of approximately $28.6
million. Although revenues grew significantly in recent periods, you should not
rely on past performance as any indication of future growth rates or operating
results. We expect to continue to incur significant sales and marketing,
research and development and general and administrative expenses. As a result,
we may experience losses and negative cash flows. If we do achieve
profitability, we can give no assurance that we can sustain or increase
profitability on a quarterly or annual basis in the future.
OUR FUTURE OPERATING RESULTS ARE UNCERTAIN
Our limited operating history and history of losses makes prediction of
future results difficult. In the past, our revenues and operating results have
varied significantly, and we expect these fluctuations to continue. Future
operating results will depend on many factors, including:
- The demand for and acceptance of our products, product enhancements and
services;
- The maintenance and development of our strategic relationships with
enterprise application vendors, resellers and distributors;
- The introduction, timing and competitive pricing of our products and
services and those of our competitors;
- The expansion and rate of success of our direct sales force and indirect
distribution channels both domestically and internationally;
- The attraction and retention of key personnel, particularly in our sales,
services and support groups;
- The commercialization of our products incorporating advanced
technologies;
6
<PAGE> 8
- The growth of the market for Enterprise Intelligence solutions; and
- The timing and successful integration of and costs related to
technologies and businesses we may acquire in the future.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operation."
OUR FINANCIAL RESULTS MAY VARY SIGNIFICANTLY FROM QUARTER TO QUARTER
Our financial results may vary significantly from quarter to quarter due to
a variety of factors, many of which are outside our control. Such factors
include:
- The size and timing of significant orders;
- The length of our sales cycles and the sales cycles of our distribution
partners;
- The mix of products and services that we sell and the mix between direct
and indirect sales of our products;
- Our ability to control costs;
- The rate of success of our international expansion and the effect of
foreign currency exchange rate fluctuations;
- The discovery of software defects or unanticipated difficulties in
completing implementations; and
- General economic conditions as well as those specific to our customers
and markets.
We cannot predict our future revenues with any significant degree of
certainty for a variety of reasons. First, we typically recognize a substantial
portion of our quarterly product revenues in the last two weeks of a quarter. As
a result, even minor delays in the timing of customer orders can cause
significant variability in our reported revenues for a particular quarter.
Second, we currently operate with virtually no software order backlog, because
we ship our software products shortly after we receive orders. Accordingly, our
product license revenues in any quarter depend substantially on orders booked
and shipped during that quarter. Third, as our international operations expand,
seasonal factors may affect revenue trends. For example, European sales may
decline during the summer months. Fourth, service revenues are often
unpredictable because they depend in part on the scope of the services we
provide and whether our customers utilize those services. Additionally, if we do
not have the resources or personnel to meet demand for services, we may
subcontract them, which would negatively affect the margins from services
revenues.
As with revenues, we cannot predict our expenses with any significant
degree of certainty. In light of the planned expansion of our business, we
anticipate substantial increases in operating costs and expenses, including in
our administration, consulting and training, maintenance and technical support,
research and development and sales and marketing groups. In general, we budget
our operating expenses on anticipated revenue trends, and may not be able to
reduce these expenses in the short term. As a result, variations in the timing
and amount of expenses could materially and adversely affect our quarterly
operating results.
Due to the uncertainty surrounding our revenues and expenses, we believe
that quarter-to-quarter comparisons of our operating results are not a good
indication of our future performance. Moreover, it is likely that in some future
quarter, our operating results
7
<PAGE> 9
may fall below the expectations of public market analysts and investors. In this
event, the price of our Common Stock may fall.
WE DEPEND UPON NEW PRODUCT DEVELOPMENT
Our future success will depend on our ability to maintain and improve our
product line and develop new products that keep pace with competitive product
introductions and technological developments, satisfy diverse and evolving
customer requirements and achieve market acceptance. For example, we are
developing the next version of the Sagent DMS product suite, which is scheduled
for release in the first half of 1999. We cannot be certain that we will be
successful in developing and marketing this new version, other product
enhancements or new products that respond to technological advances by others on
a timely or cost-effective basis, or that these products, if developed, will
achieve market acceptance.
We have experienced delays in releasing new products and product
enhancements and may experience similar delays in the future. These delays or
problems in the installation or implementation of our new releases may cause
customers to forego purchases of our products to purchase those of our
competitors. Delays in product development or introduction may materially and
adversely affect our business, financial condition and operating results.
EVOLVING TECHNOLOGY STANDARDS MAY IMPACT OUR PRODUCTS
We compete in markets where technology changes rapidly, competitors make
frequent new product introductions and enhancements, products have uncertain
life cycles and customer demands change unexpectedly, any of which could render
our existing or future products obsolete and unmarketable.
Rapidly changing technology in our own field and emerging new standards in
related fields may adversely affect the market for our products. For example, if
new Web technologies emerge that are incompatible with deployment of our WebLink
applications, we may not be able to quickly adapt our products to the new
standard. Our products allow connectivity to databases on a variety of operating
systems, including mainframes, AS/400, UNIX and Windows NT. However, our
application server component currently runs only on the Windows NT operating
system. Therefore, our ability to increase sales of our products will depend on
the continued acceptance of the Windows NT operating system. To the extent that
potential customers use UNIX operating systems as their application server, we
would need to develop a UNIX product. The development of a UNIX product would
require us to commit a substantial investment of resources, and we may not
successfully introduce such a product on a timely or cost-effective basis, or at
all.
WE DEPEND ON THE GROWTH OF THE MARKET FOR ENTERPRISE INTELLIGENCE SOFTWARE
All of our revenues are attributable to the sale of Enterprise Intelligence
software and related maintenance, consulting and training services. We expect
such software and services to account for substantially all of our revenues for
the foreseeable future. Although demand for Enterprise Intelligence software has
grown in recent years, we can give no assurance that the market will continue to
grow or that, even if the market does grow, businesses will adopt our products.
8
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We are focusing our selling efforts on large, enterprise-wide
implementations of our products, and we expect such sales to constitute an
increasing portion of any future revenue growth. While we have devoted
significant resources to promoting market awareness of our products and the
problems such products address, we do not know whether these efforts will be
sufficient to support significant growth in the market for Enterprise
Intelligence products. If such growth does not materialize, our business,
financial condition and operating results would be materially and adversely
affected.
WE RELY SUBSTANTIALLY ON OUR CHANNEL PARTNERS
In addition to our direct sales force, we rely on successful relationships
with a variety of channel partners, such as enterprise application vendors,
resellers and distributors, for licensing and support of our products in the
United States and internationally. We believe that our ability to expand the
sales of our products and our future success will depend in part upon recruiting
strategic partners and maintaining successful relationships with these partners.
Our enterprise application vendor partners resell our products incorporated in
their own software application. For example, Siebel Systems, Inc. embeds a
portion of the Sagent DMS product suite in Siebel Marketing Enterprise to
integrate and analyze customer interactions in sales, service and call center
environments. In addition, our channel partners offer products of several
different companies, including, in some cases, products that compete with our
products. We can give no assurance that these strategic partners will develop or
customize our applications to their needs or devote adequate resources to
selling our products.
We intend to expand our relationships with strategic partners and to
increase the proportion of our customers licensed through these indirect
channels. We can give no assurance that we will be able to maintain strategic
partnerships and attract additional strategic partners that will market our
products effectively and will be qualified to provide timely and cost-effective
customer support and service. Further, we can give no assurance that our
relationships with our strategic partners will generate enough royalty revenue
to offset the significant resources used to develop these channels. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Sales and Marketing."
MANAGEMENT OF OUR GROWTH
We have grown rapidly and will need to continue to grow in all areas of
operation in order to execute our business strategy. Our total number of
employees grew from 87 on December 31, 1997 to 152 on December 31, 1998, and we
anticipate further significant increases in the number of employees. Sustaining
our growth has placed significant demands on management as well as on our
administrative, operational and financial resources and controls.
We can give no assurance that we will be able to manage our growth
successfully, sustain and manage the growth rates that we have experienced in
the past, or improve our operating results. Our inability to sustain or manage
our growth could materially and adversely affect our business, financial
condition and operating results. See "Business--Sales and Marketing."
9
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RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
International sales represented approximately 8.4% of our total revenue for
the year ended December 31, 1998. We conduct our international sales through
local subsidiaries in Japan and Canada and through distributor relationships in
France, Germany, Japan, South Africa and the United Kingdom. The expansion of
our existing international operations and entry into additional international
markets will require significant management attention and financial resources.
In addition, we currently have limited experience in developing local versions
of our products. We can give no assurance that our localized products will be
accepted in the targeted countries. Our failure to manage our international
operations effectively could materially adversely affect our business, financial
condition and operating results.
International operations are subject to other inherent risks, many of which
are outside of our control, including:
- The impact of recessions in economies outside the United States;
- Greater difficulty in accounts receivable collection and longer
collection periods;
- Unexpected changes in regulatory requirements or trade barriers;
- Difficulties and costs of staffing and managing foreign operations;
- Reduced protection for intellectual property rights in some countries;
- Potentially adverse tax consequences;
- Political and economic instability;
- Delays relating to the conversion to the euro; and
- Currency fluctuations.
Any of these risks could materially and adversely affect our future
international sales and therefore our business, financial condition and
operating results. See "Business--Sales and Marketing."
OUR MARKETS ARE HIGHLY COMPETITIVE
The markets for our products are intensely competitive and subject to
rapidly changing technology. We compete against providers of decision support
software, data warehousing software, enterprise application software and
e-Business (the electronic delivery of products and services that enable
commerce among businesses and end users) software. Our competitors providing
traditional decision support software include Brio Technology, Inc., Business
Objects S.A., Cognos Incorporated, Information Advantage, Inc. and
MicroStrategy, Inc. Our competitors providing data warehousing software include
Ardent Software, Inc., Informatica Corporation, Information Builders, Inc.,
Oracle Corporation, PLATINUM technology, inc. and SAS Institute Inc. In
addition, enterprise application software vendors such as Baan Company N.V.,
J.D. Edwards & Company, PeopleSoft, Incorporated and SAP AG are beginning to
offer Enterprise Intelligence modules, although each tends to support the
analysis of data only from its own operational systems. One or more of these
companies may expand its technologies to support greater Enterprise Intelligence
functionality. We may also face competition from vendors of products and
turn-key solutions for e-Business applications that include Internet based
information functionality.
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Many of our competitors have longer operating histories, significantly
greater financial, technical, marketing or other resources, or greater name
recognition than we do. Our competitors may be able to respond more quickly than
we can to new or emerging technologies and changes in customer requirements.
Competition could seriously harm our ability to sell additional software and
maintenance and support renewals on terms favorable to us. Competitive pressures
could reduce our market share or require us to reduce the price of our products,
either of which could materially and adversely affect our business, financial
condition and operating results.
OUR PRODUCTS HAVE LENGTHY SALES CYCLES
Our customers take an extended time evaluating our products before
purchasing them. The period of time between initial customer contact and a
purchase order may span six months or more. Our products have had, and we expect
them to continue to have, an even longer sales cycle in international markets
than in the United States and Canada. During the evaluation period, customers
may decide not to purchase or may scale down their orders of our products for
various reasons, some of which are beyond our control, including:
- Reductions in demand for Enterprise Intelligence solutions;
- Introduction of new products by competitors or pricing pressures;
- Changes in our customers' budgets and purchasing priorities; and
- Diversion of resources and management's attention to other information
technology issues, such as Year 2000 issues.
In addition, we often must provide a significant level of education to our
prospective customers regarding the use and benefit of our products, which may
cause additional delays during the evaluation and acceptance process. Because of
the foregoing factors, it is difficult for us to forecast the timing and
recognition of revenues from sales of our products and services. See "--Our
Future Operating Results are Uncertain," "--Our Financial Results May Vary
Significantly From Quarter to Quarter" and "Business--Sales and Marketing."
WE NEED TO RECRUIT ADDITIONAL SKILLED PERSONNEL AND WE DEPEND ON OUR KEY
PERSONNEL
We intend to hire a significant number of employees. We are particularly
dependent on the continued services of employees in our professional services
and sales groups. Competition for these individuals is intense, and we may not
be able to attract, assimilate or retain additional highly qualified personnel
in the future.
Our success is highly dependent upon the continued service and skills of
our executive officers and other key technical, sales and marketing personnel,
most of whom are not bound by formal employment agreements. If we lose the
services of any of these key personnel, it could have a negative impact on our
business. In particular, it would be difficult for us to replace the services of
Kenneth C. Gardner, our co-founder, President and Chief Executive Officer, John
E. Zicker, our co-founder, Executive Vice President, Technology, and Chief
Technology Officer, Thomas M. Lounibos, our Executive Vice President, Sales and
Marketing, and W. Virginia Walker, our Executive Vice President, Finance and
Administration and Chief Financial Officer. We do not maintain "key-person" life
insurance policies covering any of our employees.
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<PAGE> 13
RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS
We intend to make investments in or acquire complementary companies,
products and technologies. We have limited organizational experience in these
matters and will need to develop the relevant skills if we are to be successful
in any such endeavor. Any development of these skills could consume management's
time and other resources. If we buy a company, we could have difficulty in
assimilating that company's operations. In addition, we may be unsuccessful in
retaining the key personnel of the acquired company. Moreover, we currently do
not know and cannot predict the accounting treatment of any such acquisition, in
part because we cannot be certain what accounting regulations, conventions or
interpretations may prevail in the future. If we acquire complementary
technologies or products, we could experience difficulties assimilating the
acquired technology or products into our operations. These difficulties could
disrupt our ongoing business, distract our management and employees and increase
our expenses. Furthermore, we may have to incur debt or issue equity securities
to pay for any future acquisitions, the issuance of which could be dilutive to
our existing stockholders, adversely affect the price of our Common Stock or
negatively affect our financial condition and operating results.
We have agreements with our United Kingdom distributor and the parent
company of our French and German distributors, under each of which we have the
option to acquire the distributor. In the event of a change of control of
Sagent, we could be required to acquire the German distributor. In connection
with any such acquisition, we would be required to pay a purchase price (equal
to the greater of a multiple of such distributor's last 12 months' revenues as
of the date of such acquisition or a minimum purchase price specified in each
agreement) in cash or a combination of cash and registered shares of our Common
Stock.
RISKS ASSOCIATED WITH THE INTERNET
The success of our products will depend in part on the continued broad
acceptance of the Internet as a viable information medium. Continued viability
of the Internet depends on several factors, including:
- Third parties' abilities to develop new enabling technologies in a timely
manner;
- The Internet's ability to handle increased activity;
- The Internet's ability to operate as a fast, reliable and secure network;
and
- Potential changes in government regulation.
Moreover, critical issues concerning the commercial use of the Internet,
including data corruption, cost, ease of use, accessibility and quality of
service, remain unresolved and may negatively affect commerce and communication
on the Internet.
RISKS ASSOCIATED WITH INTELLECTUAL PROPERTY
Our success and ability to compete depend substantially upon our internally
developed technology. We seek to protect our software, documentation and other
written materials primarily through a combination of patent, trade secret,
trademark and copyright laws, confidentiality procedures and contractual
provisions, which afford only limited protection. We have two patent
applications pending and one patent application allowed in the United States
with respect to certain aspects of our software. None of these patents have been
issued, and we can give no assurance that any patents will be issued pursuant to
these
12
<PAGE> 14
applications, or that, if granted, any such patent would survive a legal
challenge to its validity or provide us significant protection. Despite our
efforts to protect our proprietary rights, unauthorized parties may attempt to
copy aspects of our products or obtain and use information that we regard as
proprietary. Policing unauthorized use of our products is difficult. While we
cannot determine the extent to which piracy of our products exists, software
piracy can be expected to be a persistent problem, particularly in foreign
countries where the laws may not protect our proprietary rights as fully as in
the United States. We can give no assurance that our means of protecting our
proprietary rights will be adequate or that our competitors will not
independently develop similar technology.
From time to time, we may be involved in intellectual property disputes. We
expect that software product developers will increasingly be subject to
infringement claims as the number of products and competitors in our industry
segment grows and the functionality of products in different industry segments
overlaps. Any claims, with or without merit, could result in costly litigation,
divert management's time, attention and resources, delay product shipments, or
require us to enter into royalty or licensing agreements. A third party may not
be willing to enter into such a royalty or licensing agreement on acceptable
terms, or at all. If a claim of product infringement against us is successful
and we fail to obtain a license or to develop or license non-infringing
technology, our business, financial condition and operating results could be
materially and adversely affected.
In May 1998, Acta Technology, Inc. ("Acta") filed suit against us alleging
copyright infringement of certain of its software code. In addition, Acta
alleged that we committed conversion, fraud and unfair competition. Acta sought
a declaration that it did not misappropriate any of our trade secrets,
injunctive relief, monetary damages, costs and attorneys' fees. In May 1998, we
filed suit against Acta and its founders alleging misappropriation of our trade
secrets, breach of its contract with us, violation of the covenant of good faith
and fair dealing, breach of confidence, fraud and unfair competition. We and
Acta have agreed to mediate the dispute; however, this mediation may not be
successful. If the dispute is not resolved in mediation and we do not otherwise
settle the dispute, we could incur substantial expenses and the attention of our
development and management personnel may be diverted. Litigation of this type is
inherently uncertain, especially because it involves complex technical issues.
We can give no assurance that we will prevail in the litigation against Acta or
that we will successfully defend Acta's claim. Regardless of the merits of
Acta's complaint, our defense against Acta's claim and the prosecution of our
own claim against Acta could materially and adversely affect our business,
operating results and financial condition. If we are not successful, we may be
required to pay damages and costs to Acta and we could be prohibited from
marketing certain components of the Sagent DMS product suite without a license,
which license may not be available on acceptable terms, if at all. If we cannot
obtain such a license, we may be required to license a substitute technology or
redesign components of our software to avoid infringement, either of which could
cause delays in shipping our products, which would materially and adversely
affect our business, financial condition and operating results.
Other than Acta, no other party has notified us that our products infringe
the proprietary rights of third parties. However, we can give no assurance that
additional third parties will not claim infringement with respect to current or
future products
We rely on software that we have licensed from Opalis S.A. to perform key
functions of our Sagent Automation product. This license may not continue to be
available to us on commercially reasonable terms. The loss of this license could
result in delays or reductions
13
<PAGE> 15
of shipments of the Sagent Automation product until equivalent software could be
developed, identified, licensed and integrated, which could materially and
adversely affect our business, financial condition and operating results.
RISK OF SOFTWARE DEFECTS AND POTENTIAL PRODUCT LIABILITY
Our software products are internally complex and may contain errors,
defects or failures, especially when first introduced or when new versions are
released. We test our products extensively prior to releasing them; however, in
the past we have discovered software errors in some of our products after their
introduction. Despite extensive testing, we may not be able to detect and
correct errors in products or releases before commencing commercial shipments,
which may result in loss of revenue or delay in market acceptance.
Our license agreements with our customers typically contain provisions
designed to limit our exposure to potential product liability claims. All
domestic and international jurisdictions may not enforce these limitations.
Although we have not experienced any product liability claims to date, we may
encounter such claims in the future. Product liability claims, whether or not
successful, brought against us could materially and adversely affect our
business, financial condition and operating results.
YEAR 2000 RISKS
Many currently installed computer systems and software products store dates
using only the last two digits of the calendar year. As a result, such systems
may not be able to distinguish whether "00" means 1900 or 2000, which may cause
system failures or erroneous results. We have designed our products to be
capable of handling four digit dates. In addition, we will continue Year 2000
testing throughout the calendar year 1999. However, our products operate in
complex network environments and directly or indirectly interact with a number
of other hardware and software systems. Despite preliminary testing we cannot
predict all the possible Year 2000 issues arising from the interaction with
older hardware and software systems. If the source code in any of these hardware
or software systems do not appropriately interpret the upcoming calendar year
2000, we may need to modify or possibly replace these systems. Known or unknown
errors associated with this interaction could result in a delay or loss of
revenue, interruption of service, cancellation of customer contracts, diversion
of development resources, damage to our reputation, increased service and
warranty costs and litigation. Any of these outcomes could materially and
adversely affect our business, financial condition and operating results. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
We currently cannot predict the extent to which the Year 2000 problem will
affect our customers, strategic partners or suppliers, or the extent to which we
would be vulnerable to any failure by customers, strategic partners or suppliers
to remediate any Year 2000 issue on a timely basis. The failure of our major
customers, partners or suppliers to convert their systems on a timely basis or
to implement a conversion that is compatible with our systems could materially
and adversely affect our business, financial condition and operating results.
14
<PAGE> 16
CONTROL OF COMPANY BY EXISTING STOCKHOLDERS
We anticipate that our executive officers and directors, together with
their affiliates, will beneficially own an aggregate of approximately % of
our outstanding Common Stock following the completion of the offering. These
stockholders, if acting together, will be able to significantly influence all
matters requiring approval by our stockholders, including the election of
directors and the approval of mergers or similar transactions. See "Principal
Stockholders."
ANTITAKEOVER PROVISIONS
Certain provisions of our Amended and Restated Certificate of
Incorporation, Bylaws, other agreements and Delaware law could make it more
difficult for a third party to acquire us, even if doing so would be beneficial
to our stockholders. See "Description of Capital Stock."
UNCERTAINTY AS TO USE OF PROCEEDS
We intend to use the proceeds from the offering for general corporate
purposes, including working capital and capital expenditures, and may use a
portion of proceeds to acquire other businesses, products or technologies. Our
management may spend the proceeds from the offering in ways with which the
stockholders may not agree. Pending any such uses, we plan to invest the net
proceeds of the offering in investment-grade, interest-bearing securities. We
cannot predict that such investments will yield a favorable return. See "--Risks
Associated with Potential Acquisitions" and "Use of Proceeds."
NO PRIOR PUBLIC MARKET; VOLATILITY OF STOCK PRICE
Our Common Stock has never been sold in a public market. An active trading
market for our Common Stock may not develop or be sustained after completion of
the offering. We are negotiating the initial offering price of the Common Stock
with the Underwriters. However, the initial offering price may not be indicative
of the prices that will prevail in the public market after the offering, and the
market price of the Common Stock could fall below the initial public offering
price. See "Underwriting."
The trading price of the Common Stock may fluctuate widely as a result of a
number of factors, many of which are outside our control. Some of these factors
include:
- Quarter-to-quarter variations in our operating results;
- Technological innovations or new products;
- Increased price competition;
- Developments or disputes concerning intellectual property rights;
- General conditions in the software industry; and
- Changes in earnings estimates by analysts.
In addition, the stock market has experienced extreme price and volume
fluctuations, which have particularly affected the market prices of many
computer software companies and which have often been unrelated to the operating
performance of such companies.
15
<PAGE> 17
SHARES ELIGIBLE FOR FUTURE SALE AFTER THIS OFFERING COULD ADVERSELY AFFECT OUR
STOCK PRICE
If our stockholders sell substantial amounts of our Common Stock (including
shares issued upon the exercise of outstanding options and warrants) in the
public market following the offering, the market price of our Common Stock could
fall. Such sales also might make it more difficult for Sagent to sell equity or
equity-related securities in the future at a time and price that we deem
appropriate. Upon completion of the offering, we will have outstanding
shares of Common Stock (based upon shares outstanding as of
December 31, 1998), assuming no exercise of the Underwriters' over-allotment
option and no exercise of outstanding options or warrants after December 31,
1998. Of these shares, the shares sold in the offering will
be freely tradable. This leaves 18,404,766 shares eligible for sale in the
public market 180 days from the date of this prospectus, excluding 236,611
shares held by employees that are subject to repurchase in the event of
termination of employment and 28,000 shares that are not eligible for sale until
the expiration of their one-year holding period expires. See "Shares Eligible
for Future Sale."
REGISTRATION RIGHTS
After the offering, the holders of approximately 14,800,000 shares of
Common Stock and warrants to purchase Common Stock, which represent % of
our outstanding stock after completion of the offering, will be entitled to
certain rights to have the resale of their shares registered under the
Securities Act of 1933. If these holders, by exercising their registration
rights, cause a large number of securities to be registered and sold in the
public market, such sales could materially and adversely affect the market price
for our Common Stock. In addition, if we were to include in a company-initiated
registration shares held by these holders pursuant to the exercise of their
registration rights, such sales may have a material and adverse effect on our
ability to raise needed capital.
IMMEDIATE AND SUBSTANTIAL DILUTION
If you purchase shares of our Common Stock, you will incur immediate and
substantial dilution in pro forma net tangible book value. If the holders of
outstanding options or warrants exercise those options or warrants, you will
suffer further dilution. See "Dilution."
NO INTENTION TO PAY DIVIDENDS
We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain any future earnings for funding growth and,
therefore, do not expect to pay any dividends in the foreseeable future. See
"Dividend Policy."
16
<PAGE> 18
USE OF PROCEEDS
The net proceeds to Sagent from the sale of shares of
Common Stock in the offering at an estimated initial public offering price of
$ per share, after deducting estimated expenses of $ and
underwriting discounts and commissions, are estimated to be approximately
$ (approximately $ if the Underwriters' over-allotment option
is exercised in full). The Company expects to use the net proceeds from this
offering for general corporate purposes, including working capital, capital
expenditures and repayment of short-term indebtedness. A portion of the proceeds
may also be used to acquire, license or invest in complementary businesses or
products, although there are no current plans, negotiations or discussions
relating to any such transactions. Pending use of the net proceeds for the above
purposes, the Company intends to invest such funds in short-term,
interest-bearing, investment grade obligations.
DIVIDEND POLICY
The Company has never declared or paid any cash dividends on its Common
Stock or other securities. The Company currently anticipates that it will retain
all of its future earnings for use in the expansion and operation of its
business and does not anticipate paying any cash dividends in the foreseeable
future.
CORPORATE INFORMATION
The Company was incorporated in California in April 1995 under the name
Savant Software, Inc. In June 1995, the Company changed its name to Sagent
Technology, Inc. The Company was reincorporated in Delaware in September 1998.
References in this prospectus to "Sagent," the "Company," "we," "our" and "us"
refer to Sagent Technology, Inc. and its subsidiaries, unless the context
otherwise requires. Sagent's principal executive office is located at 800 W. El
Camino Real, Suite 300, Mountain View, California 94040, and Sagent's telephone
number at that office is (650) 815-3100. Sagent's World Wide Web address is
www.sagenttech.com. Information contained in Sagent's Web site does not
constitute part of this prospectus.
SAGENT and INFORMATION STUDIO are registered trademarks of Sagent. Sagent
is in the process of registering SAGENT DESIGN STUDIO as a trademark. Any
trademark, trade name or service mark of another company appearing in this
prospectus belongs to its holder.
17
<PAGE> 19
CAPITALIZATION
The following table sets forth cash and cash equivalents, certain short
term obligations and the total capitalization of the Company as of December 31,
1998, (1) on an actual basis, (2) pro forma to reflect the automatic conversion
of all outstanding shares of Preferred Stock into Common Stock upon the closing
of this offering and an amendment of the Company's Certificate of Incorporation
and (3) on a pro forma as adjusted basis to reflect the sale of shares
of Common Stock by the Company at an assumed initial public offering price of
$ per share and the application of the estimated net proceeds from this
offering in the manner described in "Use of Proceeds":
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998
------------------------------------
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents................... $ 3,093 $ 3,093 $
======== ======== ========
Current portion of capital lease
obligations............................... $ 1,181 $ 1,181 $
======== ======== ========
Long-term obligations....................... $ 3,346 $ 3,346 $
-------- -------- --------
Stockholders' equity:
Preferred Stock, $0.001 par value,
15,555,555 authorized, 14,544,258
issued and outstanding, actual;
5,000,000 shares authorized, no
shares outstanding, pro forma and as
adjusted............................. 15 -- --
Common Stock, $0.001 par value,
25,000,000 shares authorized;
4,125,119 shares outstanding, actual;
18,669,377 shares outstanding, pro
forma; shares outstanding,
as adjusted(a)....................... 4 19 --
Additional paid-in capital............. 30,699 30,699
Notes receivable from stockholder...... (522) (522)
Cumulative translation adjustment...... 101 101
Accumulated deficit.................... (28,626) (28,626)
-------- -------- --------
Total stockholders' equity........ 1,671 1,671
-------- -------- --------
Total capitalization......... $ 5,017 $ 5,017 $
======== ======== ========
</TABLE>
- --------------------
(a) Based on shares of Common Stock outstanding as of December 31, 1998.
Excludes (1) 4,534,835 shares of Common Stock that have been set aside for
stock options pursuant to non-plan grants and under the Stock Plans, of
which options to purchase 2,313,735 shares at a weighted average exercise
price of $3.38 per share were outstanding as of December 31, 1998, (2)
150,000 shares of Common Stock that have been set aside under the Director
Plan, (3) 450,000 shares of Common Stock that have been set aside for
employees who elect to participate in the 1999 Purchase Plan and (4) 235,623
shares of Common Stock issuable upon exercise of outstanding warrants at a
weighted average exercise price of $3.33 per share. See
"Management -- Employee Benefit Plans."
18
<PAGE> 20
DILUTION
The pro forma net tangible book value of the Company as of December 31,
1998, after giving effect to the conversion of the Company's outstanding
preferred stock, was $ or $ per share of Common Stock. Pro forma
net tangible book value per share as of a specific date is determined by
dividing the tangible book value of the Company (total tangible assets less
total liabilities) by the number of outstanding shares of Common Stock at that
date. After giving effect to the sale by the Company of the shares of
Common Stock offered hereby (based upon an assumed initial public offering price
of $ per share and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by the Company), the
Company's net tangible book value at December 31, 1998 would have been
$ or $ per share. This represents an immediate increase in net
tangible book value to existing stockholders of $ per share and an immediate
dilution to new public investors of $ per share. The following table
illustrates the per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share...... $
Pro forma net tangible book value per share as of
December 31, 1998............................... $
Increase in net tangible book value per share
attributable to new public investors............
-------- --------
Pro forma net tangible book value per share after
offering...........................................
--------
Dilution per share to new public investors........... $
========
</TABLE>
The following table sets forth on a pro forma basis as of December 31, 1998
the difference between the number of shares of Common Stock purchased from the
Company, the total consideration paid, and the average price per share paid by
existing stockholders and new public investors (based upon an assumed initial
public offering price of $ per share before deduction of estimated
underwriting discounts and commissions and offering expenses):
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- -------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing 18,669,377 % $ % $
stockholders.........
New public
investors(a).........
---------- ----- -------- -----
Total........ 100.0% $ 100.0%
========== ===== ======== =====
</TABLE>
If the Underwriters' over-allotment option is exercised in full, the number
of shares held by new investors will increase to , or %, of the total
shares of Common Stock outstanding after the offering.
- --------------------
(a) In the event that Sagent issues additional shares of Common Stock in the
future, purchasers of Common Stock in this offering may experience further
dilution. Options and warrants to purchase 2,313,735 and 235,623 shares of
Common Stock, respectively, at a weighted average exercise price of $3.38
and $3.33 per share, respectively, were outstanding as of December 31, 1998.
To the extent the holders of these options and warrants exercise their
options and warrants, new investors will experience further dilution. See
"Management--Employee Benefit Plans."
19
<PAGE> 21
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data are qualified by
reference to, and should be read in conjunction with, the Company's Consolidated
Financial Statements and related notes thereto and Management's Discussion and
Analysis of Financial Condition and Results of Operations included elsewhere in
this Prospectus. The selected consolidated balance sheet data as of December 31,
1997 and 1998 and selected consolidated statement of operations data for the
years ended December 31, 1996, 1997 and 1998 have been derived from the audited
consolidated financial statements of the Company and the notes thereto included
elsewhere in this Prospectus. The consolidated balance sheet data as of December
31, 1995 and 1996 and selected consolidated statements of operations data for
the period from April 12, 1995 (inception) through December 31, 1995 have been
derived from the audited consolidated financial statements of the Company not
included herein.
<TABLE>
<CAPTION>
PERIOD FROM APRIL 12, 1995 YEARS ENDED DECEMBER 31,
(INCEPTION) THROUGH ------------------------------
DECEMBER 31, 1995 1996 1997 1998
-------------------------- ------- ------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues, net:
Licenses....................... -- $ 240 $ 5,728 $ 10,459
Services....................... -- 39 1,350 6,584
------- ------- ------- --------
Total revenues, net....... -- 279 7,078 17,043
Cost of revenues:
Licenses....................... -- 120 194 143
Services....................... -- 127 679 4,923
------- ------- ------- --------
Total cost of revenues.... -- 247 873 5,066
------- ------- ------- --------
Gross profit................... -- 32 6,205 11,977
Operating expenses:
Sales and marketing............ $ 198 2,727 5,929 12,037
Research and development....... 469 3,425 4,969 6,013
General and administrative..... 363 1,111 2,215 5,186
Acquired in-process
technology................... -- -- -- 2,425
------- ------- ------- --------
Total operating
expenses................ 1,030 7,263 13,113 25,661
------- ------- ------- --------
Loss from operations........... (1,030) (7,231) (6,908) (13,684)
Other income (expense), net.... 44 192 8 (17)
------- ------- ------- --------
Net loss....................... $ (986) $(7,039) $(6,900) $(13,701)
======= ======= ======= ========
Pro forma net loss per share,
basic and diluted............ $ (0.74)
========
Shares used in calculation of
pro forma net loss per share,
basic and diluted(a)......... 18,495
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------------
1995 1996 1997 1998
------ ------ ------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................... $5,026 $4,575 $3,813 $ 3,093
Working capital................................... 4,901 3,715 2,201 1,122
Total assets...................................... 5,453 6,326 7,185 13,196
Long-term obligations, net of current portion..... 114 544 627 3,346
Total stockholders' equity........................ 5,160 4,649 3,123 1,671
</TABLE>
- -----------------------------
(a) See Note 2 of Notes to Consolidated Financial Statements for information
concerning the calculation of shares used in computing pro forma net loss
per share.
20
<PAGE> 22
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
All statements, trend analysis and other information contained in the
following discussion relative to markets for the Company's products and trends
in revenues, gross margins and anticipated expense levels, as well as other
statements including words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend" and other similar expressions constitute forward-looking
statements. These forward-looking statements are subject to business and
economic risks and uncertainties, and the Company's actual results of operations
may differ materially from those contained in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed in "Risk Factors" as well as other risks and
uncertainties referenced in this prospectus.
OVERVIEW
Sagent develops, markets and supports Enterprise Intelligence software
designed to address organizations' rapidly growing information access, analysis
and delivery needs. The Sagent DMS product suite provides end-to-end, fully
integrated data movement, access, analysis and presentation capabilities on all
major database platforms and is specifically designed to deliver information
over the Internet. Sagent also provides Sagent Professional Services, which
include system and application design, implementation and education services, to
facilitate the successful implementation of the Sagent DMS product suite.
Sagent was incorporated in April 1995, commenced operations in June 1995
and began selling the first products of the Sagent DMS product suite during the
fourth quarter of 1996. The Company's revenues increased from $279,000 in 1996,
to $7.1 million in 1997, the first full year of product shipments, and to $17.0
million in 1998. The Company had net losses of $7.0 million, $6.9 million and
$13.7 million in 1996, 1997 and 1998, respectively, and had an accumulated
deficit of approximately $28.6 million as of December 31, 1998. Although the
Company's revenues have grown significantly during these periods, there can be
no assurance that such growth will continue, nor that the Company can achieve or
sustain profitability in the future. The Company intends to continue to invest
significant resources in the development of the Sagent DMS product suite and on
its sales and marketing and general and administrative functions.
21
<PAGE> 23
The Company's revenues are derived from two sources, product license
revenues and service revenues. License revenues are derived from product sales
to end users, resellers, distributors and enterprise application vendors as well
as royalties from enterprise application vendors. License revenues are based
upon the number and capacity of servers on which a product is installed, as well
as on a per user basis. Service revenues are derived from providing consulting
and training, maintenance and support services to end users.
The Company recognizes revenues in accordance with the American Institute
of Certified Public Accountants Statement of Position No. 97-2. License revenues
from sales to end users are recognized upon shipment of the product, if a signed
contract exists, the fee is fixed and determinable and collection is deemed
probable. If an acceptance period is provided, revenue is recognized upon the
earlier of customer acceptance or the expiration of that period. The Company
recognizes royalties as revenues based on an enterprise application vendor's
sell-through of the Company's products. Fees for services are charged separately
from licenses. Service revenues from consulting and training are recognized upon
completion of the work to be performed. Revenues from maintenance and support
agreements which includes product updates are deferred and recognized on a
straight-line basis as service revenues over the term of the related agreement,
which is typically one year.
The Company sells its products outside of the United States through
distributors located in France, Germany, Japan, South Africa and the United
Kingdom. In December 1997, the Company established a subsidiary, Sagent
Technology Japan KK, to address the Asia Pacific market. Revenues from licenses
and services to customers outside the United States were insignificant prior to
1998 and represented approximately $1.4 million in 1998. Historically, as a
result of the relatively small amount of international sales, fluctuations in
foreign currency exchange rates have not had a material effect on the Company's
business, financial condition and operating results. The Company has agreements
with its United Kingdom distributor and the parent company of its French and
German distributors, under each of which the Company has an option to acquire
such distributors. In the event of a change of control of the Company, the
Company could be required to acquire the German distributor. Any such
acquisition may have the effect of diluting existing stockholders, reducing the
Company's available cash for working capital and other purposes, requiring
substantial management attention, increasing annual amortization expense or
imposing costs on the Company associated with integrating the acquired entity.
On February 28, 1998, the Company acquired Talus, Inc. ("Talus"), a
privately held consulting company that has significant experience in the design
and implementation of Enterprise Intelligence applications. At the time of the
acquisition, Talus had a staff of 33 consultants. The total purchase price was
$3.5 million, and the acquisition was recorded under the purchase method of
accounting. In connection with the acquisition, the Company expensed $2.4
million of in-process technology in the quarter ended March 31, 1998. The
determination of the acquired in-process technology allocation was based upon
recently issued guidance by the Securities and Exchange Commission "(SEC)" and
considered such factors as degree of completion, technological uncertainties,
costs incurred and projected costs to complete. In addition, the Company
recorded other intangible assets of $587,000 which are being amortized on a
straight-line basis over the six months to three years following the
acquisition. See Note 7 of Notes to Consolidated Financial Statements.
22
<PAGE> 24
RESULTS OF OPERATIONS
The following table sets forth certain statement of operations data as a
percentage of total revenues for the periods indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1996 1997 1998
-------- ----- -----
<S> <C> <C> <C>
Revenues, net:
Licenses.......................................... 86.0% 80.9% 61.4%
Services.......................................... 14.0 19.1 38.6
-------- ----- -----
Total revenues, net............................ 100.0 100.0 100.0
-------- ----- -----
Cost of revenues:
Licenses.......................................... 43.0 2.7 0.8
Services.......................................... 45.5 9.6 28.9
-------- ----- -----
Total cost of revenues......................... 88.5 12.3 29.7
-------- ----- -----
Gross profit........................................ 11.5 87.7 70.3
Operating expenses:
Sales and marketing............................... 977.4 83.8 70.6
Research and development.......................... 1,227.6 70.2 35.3
General and administrative........................ 398.2 31.3 30.4
Acquired in-process technology.................... -- -- 14.2
-------- ----- -----
Total operating expenses....................... 2,603.2 185.3 150.6
-------- ----- -----
Loss from operations................................ (2,591.8) (97.6) (80.3)
Other income (expense), net......................... 68.8 0.1 (0.1)
-------- ----- -----
Net loss............................................ (2,522.9)% (97.5)% (80.4)%
======== ===== =====
</TABLE>
FISCAL YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
REVENUES
Total revenues. The Company's revenues were $279,000, $7.1 million and
$17.0 million in 1996, 1997 and 1998, respectively, representing increases of
$6.8 million from 1996 to 1997 and $10.0 million, or 141%, from 1997 to 1998.
The increase from 1997 to 1998 was primarily due to a greater volume of products
sold and a significant increase in services revenues as a result of the
acquisition of Talus. Two of the Company's customers each represented 10.0% of
the Company's revenues in 1997. The Company had no customer that accounted for
more than 10.0% of its revenues in 1996 or 1998.
License revenues. The Company's license revenues were $240,000, $5.7
million and $10.5 million in 1996, 1997 and 1998 respectively, representing
increases of $5.5 million from 1996 to 1997 and $4.7 million, or 83.0%, from
1997 to 1998. The increase from 1996 to 1997 was due to the recognition of a
full year of revenues from license sales in 1997, compared to the recognition of
revenues from license sales during the fourth quarter in 1996. The increase from
1997 to 1998 was primarily due to an increase in license sales of the Sagent DMS
product suite resulting from additions to the Company's direct sales and
marketing staff. The Company anticipates that license revenues, which have
represented a significant portion of the Company's total revenues in 1998, will
continue to represent the substantial majority of its revenues for the
foreseeable future.
Service revenues. Service revenues were $39,000, $1.4 million and $6.6
million in 1996, 1997 and 1998, respectively, representing increases of $1.3
million from 1996 to 1997
23
<PAGE> 25
and $5.2 million, or 388%, from 1997 to 1998. The increase from 1996 to 1997 was
primarily due to the addition of training and consulting services. Such services
generated $778,000 in revenue during 1997. In 1996, no training and consulting
work was performed, and service revenues represented only maintenance and
support fees. The increase in service revenues from 1997 to 1998 was primarily
due to additional growth in training and consulting services as a result of the
Talus acquisition. Such services generated $4.2 million, or a 522% increase, in
service revenues in 1998.
COST OF REVENUES
Cost of licenses. Cost of revenues from license sales consists primarily of
royalties, product packaging, shipping, media and documentation. Cost of
revenues from license sales was $120,000, $194,000 and $143,000 in 1996, 1997
and 1998, respectively, representing 50.0%, 3.0% and 1.0% of license revenue in
the respective periods. The dollar increase from 1996 to 1997 was primarily due
to increased costs for documentation and royalties related to the increased
volume of licenses sold. The dollar decrease from 1997 to 1998 was due to
reductions achieved in per unit packaging costs. The percentage decreases
resulted from spreading these relatively fixed costs over an increased volume of
product licenses sold.
Cost of services. Cost of services consists primarily of personnel costs
and third-party consulting fees associated with providing software maintenance
and support and training and consulting services. Cost of services revenues was
$127,000, $678,000 and $4.9 million, in 1996, 1997 and 1998, respectively,
representing 322%, 50.0% and 75.0% of services revenue in the respective
periods. The dollar increases were primarily due to the increase in the number
of technical support staff, the increase in the number of consultants in 1997
required to support introduction of training and consulting services and the
increase in the number of consultants in 1998 providing consulting services as a
result of the Talus acquisition. The percentage decrease from 1996 to 1997 was
primarily due to the introduction of higher margin consulting services. The
percentage increase from 1997 to 1998 was due to the increased infrastructure
costs associated with supporting the Talus consultant staff.
OPERATING EXPENSES
Sales and marketing. Sales and marketing expenses consist primarily of
salaries, benefits, commissions, bonuses and travel expenses for sales and
marketing personnel as well as marketing programs and other promotion costs.
Sales and marketing expenses were $2.7 million, $5.9 million and $12.0 million
in 1996, 1997 and 1998, respectively, representing 976%, 84.0% and 71.0% of
total revenue in the respective periods. The dollar increases resulted primarily
from a $1.7 million increase in 1997 and a $3.0 million increase in 1998 in
employee-related expenses, principally due to the hiring of additional sales
personnel and to higher commissions paid as a result of Sagent's revenue growth.
In addition, during 1998 expenses related to marketing programs increased $1.7
million as a result of the Company conducting its first user conference,
expanding its advertising campaigns and beginning its Enterprise Intelligence
seminar series. The percentage decreases were attributable to the Company's
increased revenues. The Company believes that as it continues to expand its
direct sales and presales support organization, its third-party partnering
relationships and its indirect channel sales organization on a worldwide basis,
sales and marketing expenses will continue to increase in absolute dollars,
although such expenses may vary as a percentage of total revenues.
24
<PAGE> 26
Research and development. Research and development expenses consist
primarily of personnel and related costs associated with the development of new
products, the enhancement and localization of existing products, quality
assurance and testing. Research and development expenses were $3.4 million, $5.0
million and $6.0 million in 1996, 1997 and 1998, respectively, representing
1,226%, 70.0% and 34.0% of total revenues in the respective periods. The dollar
increases were primarily due to a $1.2 million increase in compensation costs in
1997 resulting from the hiring of additional developers and an $800,000 increase
in contractor costs in 1998 for the localization of the Company's software for
use in Japan. The percentage decreases were attributable to the Company's
increased revenues. The Company anticipates that research and development
expenditures will continue to increase in absolute dollars, although such
expenses may vary as a percentage of total revenues.
General and administrative. General and administrative expenses consist
primarily of personnel costs for the Company's finance, human resources,
information systems and other management departments. General and administrative
expenses were $1.1 million, $2.2 million and $5.2 million for 1996, 1997 and
1998, respectively, representing 398%, 31.0% and 30.0% of total revenues in the
respective periods. The dollar increases were primarily due to employee-related
expenses associated with the addition of staff in senior managerial positions
and professional fees necessary to manage and support the Company's growth. The
percentage decreases were attributable to the Company's increased revenues. In
addition, during 1998, the Company recorded significant legal fees associated
with two litigation matters. One such matter remains pending. See "Risk
Factors--Risks Associated with Intellectual Property" and "Business--Legal
Proceedings."
Income Tax. As of December 31, 1998, the Company had available net
operating loss carryforwards for federal and state income tax purposes of
approximately $20.8 and $17.8 million, respectively, which expire from 2003 to
2018. See Note 14 of Notes to the Financial Statements included elsewhere
herein. The Tax Reform Act of 1986 imposes limitations on the use of net
operating loss carryforwards if certain stock ownership changes have occurred or
could occur in the future.
25
<PAGE> 27
QUARTERLY RESULTS OF OPERATIONS
The following tables set forth certain unaudited consolidated statements of
operations data for the eight quarters ended December 31, 1998, as well as the
percentage of Sagent's revenues represented by each item. These data have been
derived from unaudited interim consolidated financial statements prepared on the
same basis as the audited Consolidated Financial Statements contained herein
and, in the opinion of management, include all adjustments, consisting only of
normal recurring adjustments, considered necessary for a full presentation of
such information when read in conjunction with the Consolidated Financial
Statements and Notes thereto appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
QUARTERS ENDED
-----------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31,
1997 1997 1997 1997 1998 1998 1998 1998
--------- -------- --------- -------- --------- -------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues, net:
Licenses.......................... $ 777 $ 1,326 $ 1,784 $ 1,842 $ 1,798 $ 2,112 $ 2,932 $ 3,618
Services.......................... 224 159 384 583 1,199 1,568 1,689 2,128
------- ------- ------- ------- ------- ------- ------- -------
Total revenues, net............. 1,001 1,485 2,168 2,425 2,997 3,679 4,621 5,746
Cost of revenues:
Licenses.......................... 30 22 26 116 36 24 61 21
Services.......................... 133 89 105 352 729 1,386 1,467 1,340
------- ------- ------- ------- ------- ------- ------- -------
Total cost of revenues.......... 163 111 130 468 765 1,411 1,529 1,362
------- ------- ------- ------- ------- ------- ------- -------
Gross profit........................ 837 1,374 2,037 1,957 2,231 2,269 3,092 4,384
Operating expenses:
Sales and marketing............... 1,343 1,184 1,494 1,908 2,203 3,007 3,188 3,639
Research and development.......... 1,192 1,122 1,217 1,439 1,516 1,401 1,649 1,447
General and administrative........ 403 540 427 845 1,199 1,321 1,425 1,271
Acquired in-process technology.... -- -- -- -- 2,425 -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total operating expenses........ 2,939 2,846 3,137 4,191 7,343 5,729 6,261 6,327
------- ------- ------- ------- ------- ------- ------- -------
Loss from operations................ (2,101) (1,472) (1,100) (2,235) (5,111) (3,461) (3,169) (1,943)
Other income(expense), net.......... 4 (24) 10 21 22 32 (26) (45)
------- ------- ------- ------- ------- ------- ------- -------
Net loss............................ $(2,097) $(1,496) $(1,090) $(2,214) $(5,089) $(3,429) $(3,195) $(1,988)
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
AS A PERCENTAGE OF TOTAL REVENUES
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues, net:
Licenses.......................... 77.6% 89.3% 82.3% 76.0% 60.0% 57.4% 63.4% 63.0%
Services.......................... 22.4 10.7 17.7 24.0 40.0 42.6 36.6 37.0
------- ------- ------- ------- ------- ------- ------- -------
Total revenues, net............. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
------- ------- ------- ------- ------- ------- ------- -------
Cost of revenues:
Licenses.......................... 3.0 1.5 1.2 4.8 1.2 0.7 1.3 0.4
Services.......................... 13.3 6.0 4.8 14.5 24.3 37.7 31.8 23.3
------- ------- ------- ------- ------- ------- ------- -------
Total cost of revenues.......... 16.3 7.5 6.0 19.3 25.5 38.3 33.1 23.7
------- ------- ------- ------- ------- ------- ------- -------
Gross profit........................ 83.7 92.5 94.0 80.7 74.5 61.7 66.9 76.3
Operating expenses:
Sales and marketing............... 134.2 79.7 68.9 78.7 73.5 81.7 69.0 63.3
Research and development.......... 119.2 75.5 56.1 59.3 50.6 38.1 35.7 25.2
General and administrative........ 40.3 36.4 19.7 34.8 40.0 35.9 30.8 21.6
Acquired in-process technology.... -- -- -- -- 80.9 -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total operating expenses........ 293.7 191.7 144.7 172.9 245.0 155.7 135.5 110.1
------- ------- ------- ------- ------- ------- ------- -------
Loss from operations................ (210.0) (99.1) (50.7) (92.2) (170.6) (94.1) (68.6) (33.8)
Other income(expense), net.......... 0.4 (1.6) 0.4 0.9 0.7 0.9 (0.6) (0.8)
------- ------- ------- ------- ------- ------- ------- -------
Net loss............................ (209.6)% (100.8)% (50.3)% (91.3)% (169.8)% (93.2)% (69.1)% (34.6)%
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
26
<PAGE> 28
The Company's operating expenses for the three months ended March 31, 1998
exceeded levels that the Company has historically experienced due primarily to
acquired in-process technology expense recorded in connection with the
acquisition of Talus. In addition, operating expenses for the three months ended
June 30, 1998 exceeded levels that the Company has historically experienced due
to the addition of several sales personnel and increased advertising expenses.
Sagent's quarterly operating results may vary significantly from quarter to
quarter. The timing of the Company's revenues are unpredictable due to several
factors, including the effect of delays in customer orders, the lack of software
order backlog, the potential effect of seasonality as international operations
expand and the degree to which customers engage the Company's professional
services. Additionally the Company cannot predict expenses with significant
certainty given planned expansion of its business. Due to uncertainty
surrounding revenues and expenses, the Company believes that quarter to quarter
comparison of its operating results are not a good indication of future
performance.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1998, the Company had cash and cash equivalents totaling
$3.1 million, a decrease of $720,000 from December 31, 1997. Since inception,
the Company has funded its operations primarily through private sales of equity
securities, the use of equipment leases and a bank line of credit. As of
December 31, 1998, the Company had raised approximately $28.6 million, net of
offering costs, from the issuance of preferred stock and the exercise of stock
options, had financed equipment purchases totaling approximately $3.3 million,
and had borrowed $1.7 million under its line of credit with a bank.
Approximately $300,000 of available borrowings remain under the line of credit.
Net cash used in operating activities was $6.3 million, $5.4 million and
$11.0 million in 1996, 1997 and 1998, respectively. For such periods, net cash
used in operating activities was primarily a result of funding ongoing
operations.
The Company's investing activities have primarily consisted of annual
purchases of property and equipment. Capital expenditures, including those under
capital leases, totaled $1.1 million, $1.1 million and $1.2 million in 1996,
1997 and 1998, respectively. Capital leases have been used to finance the
acquisition of property and equipment, primarily computer hardware and software,
and leasehold improvements and furniture associated with the Company's recent
move into a larger facility to accommodate its increasing employee base. In
1998, investing activities included $2.7 million associated with the acquisition
of Talus. The Company anticipates that it will experience an increase in its
capital expenditures and lease commitments consistent with its anticipated
growth in operations, infrastructure and personnel.
The Company's financing activities have primarily included sales of
preferred stock and use of its equipment lease lines. Proceeds from the issuance
of preferred stock totaled $6.5 million, $5.2 million and $10.4 million in 1996,
1997 and 1998 respectively. The proceeds from equipment financing, net of
principal payments, totaled $600,000, $294,000 and $3.4 million in 1996, 1997
and 1998 respectively.
The Company has a line of credit with a bank for $2.0 million, which bears
interest at the lending bank's prime rate. Borrowings are limited to the lesser
of 80.0% of eligible accounts receivable or $2.0 million and are secured by
substantially all of the Company's non-leased assets. The line of credit
contains certain financial restrictions and covenants. At December 31, 1998,
total borrowings available under this line were approximately $300,000. This
credit facility expires in December 2001, and the Company expects to
27
<PAGE> 29
extend or replace such credit facility, although there can be no assurance that
it will be able to do so on terms acceptable to the Company or at all. The
Company was not in compliance with certain financial covenants under its line of
credit as of December 31, 1998, and received a waiver from its lender for
non-compliance prior to December 31, 1998. The Company is currently in
compliance with its financial covenants under such line of credit.
Sagent believes that the net proceeds from the offering, together with
existing sources of liquidity, will be sufficient to meet its working capital
and anticipated capital expenditure requirements for at least the next 12
months. Thereafter, Sagent may require additional funds to support its working
capital requirements or for other purposes, and may seek, even before such time,
to raise additional funds through public or private equity financing or from
other sources. There can be no assurance that additional financing will be
available at all, or that if available, such financing will be obtainable on
terms acceptable to Sagent or that are not dilutive to its stockholders.
RECENT ACCOUNTING PRONOUNCEMENTS
The American Institute of Certified Public Accountants issued Statement of
Position ("SOP") No. 98-1, "Software for Internal Use," which provides guidance
on accounting for the cost of computer software developed or obtained for
internal use. SOP No. 98-1 is effective for financial statements for fiscal
years beginning after December 15, 1998. The Company does not expect that the
adoption of SOP No. 98-1 will have a material effect on its business, financial
condition and operating results.
YEAR 2000 ISSUES
Many currently installed computer systems and software products store dates
using only the last two digits of the calendar year. As a result, such systems
may not be able to distinguish whether "00" means 1900 or 2000, which may cause
system failures or erroneous results. The Company has designed its products to
be capable of handling four digit dates, and therefore the Company believes that
the direct impact of the Year 2000 problem on the Company's products will not be
significant. In addition the Company will continue Year 2000 testing of its
products throughout the calendar year 1999. The Company does not expect
expenditures with respect to ensuring Year 2000 compliance of its internal
systems and software to exceed $50,000. The Company's products operate in
complex network environments and directly or indirectly interact with a number
of other hardware and software systems. Despite preliminary testing the Company
cannot predict all the possible Year 2000 issues arising from the interaction
with older hardware and software systems. If the source of any of these hardware
or software systems do not appropriately interpret the upcoming calendar year
2000, some level of modification or possible replacements of such systems will
be necessary. Known or unknown errors associated with interaction between the
Company's products and other hardware or software systems could result in a
delay or loss of revenue, interruption of service, cancellation of customer
contracts, diversion of development resources, damage to the Company's
reputation, increased service and warranty costs and litigation, any of which
could have a material adverse effect on the business, financial condition and
results of operations of the Company.
28
<PAGE> 30
The Company is currently unable to predict the extent to which the Year
2000 problem will affect its customers, strategic partners or suppliers, or the
extent to which it would be vulnerable to any failure by customers, strategic
partners or suppliers to remediate any Year 2000 issue on a timely basis. The
failure of major customers, partners or suppliers to convert its systems on a
timely basis or to implement a conversion that is compatible with the Company's
systems could have a material adverse effect on the Company's business,
financial condition and operating results.
29
<PAGE> 31
BUSINESS
The following description of the Company's business should be read in
conjunction with the information included elsewhere in this Prospectus. This
description contains certain forward-looking statements that are based largely
on the Company's current expectations and are subject to a number of risks and
uncertainties. Actual results and events could differ significantly from those
discussed in the forward-looking statements as a result of certain of the
factors set forth below and elsewhere in this prospectus.
OVERVIEW
Sagent develops, markets and supports Enterprise Intelligence software
solutions designed to address organizations' rapidly growing information access,
analysis and delivery needs. The Sagent DMS product suite provides end-to-end,
fully integrated data movement, access, analysis and presentation capabilities
on all major database platforms, and is specifically designed to deliver
information over the Internet. The Sagent DMS product suite utilizes a
multi-dimensional data structure known as a Star Schema and advanced dataflow
technology to construct and provide access to data marts capable of handling
some of the most complex and demanding Enterprise Intelligence requirements.
Sagent's Web technology enables the distribution of information throughout the
organization and gives end users the ability to access and analyze data through
common Web browsers. Sagent also offers Sagent Professional Services, which
include system and application design, implementation and education services, to
facilitate the successful implementation of the Sagent DMS product suite.
Sagent's products and services have been adopted in a variety of industries,
including financial services, telecommunications, technology, health care,
retail and others. The Company currently has more than 200 customers worldwide.
Sagent markets its software and services through its direct sales force and
indirect channels, which include enterprise application vendors, resellers and
international distributors.
INDUSTRY BACKGROUND
Today, information about an organization's customers, products and
operations is one of its most important strategic assets. An organization's
ability to maximize revenues and efficiently manage operations increasingly
depends upon its ability to rapidly collect, organize, analyze and distribute
information. In particular, as organizations have begun to pursue more complex
operational strategies, their need for timely information has increased. For
example, businesses engaged in total customer management must synthesize
information regarding past purchases, service history, payment status and sales
contacts. Similarly, businesses engaged in supply chain management must manage
the information exchanged among multiple plants, sales locations, suppliers and
distribution facilities. Furthermore, as businesses continue to streamline their
organizational structures to improve time to market and responsiveness to
rapidly changing market conditions, decision making authority is expected to
become more distributed, thus heightening the need for broader dissemination of
information throughout the enterprise. Most recently, the rapid adoption of the
Internet and the World Wide Web has given organizations the ability to share
information internally and externally on a cost-effective basis and has
dramatically increased the number of people who can receive and access
information.
To meet these challenges, many organizations have purchased and implemented
data warehousing systems and decision support software. These systems were
designed to assist organizations in answering fundamental business questions
such as "Who are our best
30
<PAGE> 32
customers?" or "What are our most profitable products?" Early data warehousing
systems aggregated an organization's enterprise data into a single location and
reorganized it into contextual, business-related terms. The single location has
enabled the use of query tools or other decision support software to explore and
analyze the data. The need for data warehousing and decision support software
has also been driven by the proliferation of online transaction processing
("OLTP") systems. These systems include packaged applications or custom and
semi-custom systems, which automate business processes such as manufacturing
planning, customer support, billing, accounting, human resources and financial
services transactions. While these multiple OLTP systems have provided greater
business efficiency, they have also created massive amounts of new data,
typically maintained in the form of proprietary, complex and incompatible data
models.
The demand for more useful information and the proliferation of new data
sources and data types has led to an active market for data warehousing and
decision support software. International Data Corporation ("IDC") estimates that
the size of the data warehouse market will grow from over $2.8 billion in 1997
to over $8.0 billion in 2001. Forrester Research projects that the decision
support segment of the data warehouse market will grow from $1.1 billion in 1997
to $3.6 billion by 2001.
As corporate data warehouses have grown in size and complexity, the Company
believes that several challenges have prevented organizations from realizing the
promise of data warehousing systems and decision support solutions. The first
challenge has been integration. Traditional solutions have utilized discrete
data warehousing and decision support software purchased from many different
vendors, including separate data extraction tools, data cleansing tools, data
sorting packages, relational database management systems, report writers,
analysis tools and distribution packages. Integrating these point products is
difficult and often limits the capability of the overall solution. The second
challenge has been user scalability. Traditional solutions were designed to
handle a small number of users and were not designed to meet the needs of a
large number of simultaneous users with diverse, individual requirements. The
third challenge has been performance. Discrete data warehousing and decision
support software applications often have difficulty aggregating complex
enterprise data into a single business view of information, which is critical
for processing information requests efficiently. The fourth challenge has been
cost and complexity. Many large data warehousing projects cost several million
dollars and take a year or more to implement.
Most importantly, the emergence of the Internet has challenged the
continued viability of traditional data warehousing and decision support
software as the best approach to enterprise-wide information access, analysis
and delivery. The Internet provides organizations with a low-cost infrastructure
to connect their customers, suppliers, partners and employees directly with the
information they need. Organizations are using the Internet to streamline their
marketing, sales and support processes and offer enhanced customer service
capabilities. Examples of these initiatives include enabling customers to use
the Internet to research product features, order products, check order status
and obtain on-line service and support. Organizations are also using the
Internet to track key business information regarding sales, customers,
suppliers, distributors, assets and resources, and to make that information
widely available to employees when and where they need it. As the number of
Internet users continues to grow, the Company believes that the demand for
Web-based information access, analysis and delivery will increase significantly.
IDC forecasts that total commerce on the Internet will grow from an estimated
$12.4 billion in 1997 to $239.5 billion in 2001, with the business-to-business
component growing from an estimated $7.3 billion to $179.4 billon in the same
period.
31
<PAGE> 33
NEED FOR A NEW SOLUTION
The Company believes that new demands for high performance information
access, analysis and delivery, particularly through the Internet, have stretched
the capabilities of traditional data warehousing and decision support systems.
Many organizations now require a new generation of Enterprise Intelligence
solutions that can leverage Internet technologies and accommodate the rapidly
growing number of internal and external users who need to access
business-critical information. To be most effective, the Company believes that
these solutions should satisfy four critical requirements:
- First, solutions must be capable of accessing and assembling increasing
amounts of data from multiple, disparate and complex sources into a
single business view of information for the end user.
- Second, solutions must be capable of scaling to hundreds and thousands of
concurrent users and delivering information through the bandwidth of many
Internet connections, as well as through new access devices such as
hand-held computers and alphanumeric pagers.
- Third, solutions must deliver information fast enough to meet the demands
of the new business environment, particularly the performance
requirements of e-Business and Internet applications.
- Fourth, solutions should be delivered by a single vendor that can provide
a complete, integrated product and the professional services required to
implement a working, timely solution.
THE SAGENT SOLUTION
Sagent offers a new generation of Enterprise Intelligence software
solutions designed to address organizations' rapidly growing information access,
analysis and delivery needs. The Sagent DMS product suite provides end-to-end,
fully integrated data movement, access, analysis and presentation capabilities
on all major database platforms and is specifically designed to deliver
information over the Internet. The Sagent DMS product suite utilizes a
multi-dimensional data structure known as a Star Schema and advanced dataflow
technology to construct and provide access to data marts capable of handling
some of the most complex and demanding Enterprise Intelligence requirements.
Sagent's data marts, which are data warehouses that contain a subset of specific
corporate data, provide a more detailed, single business view of information
that is focused on the needs of a specific group of users. Sagent's Web
technology enables the distribution of information throughout the organization
and gives end users the ability to access and analyze data through common Web
browsers. Sagent also offers Sagent Professional Services, which include system
and application design, implementation and education services, to facilitate the
successful implementation of the Sagent DMS product suite.
Sagent believes its solution provides the following key benefits:
High Performance Internet Access. The Sagent DMS product suite is designed
to provide customers with the ability to access, analyze and deliver critical
information easily and rapidly over the Web. The Sagent architecture utilizes
Internet based processing capabilities to minimize the bandwidth required for
the delivery of information over the Web and other new access technologies. This
technology significantly reduces the waiting time for Web-page processing and
information delivery, thus increasing user productivity.
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<PAGE> 34
Single Business View of Information. The Sagent DMS product suite utilizes
a 32-bit application server, a proprietary dataflow model and Star Schema data
structure to create a single business view of information from complex,
disparate data sources. The Company believes this consolidated view of
information allows Sagent users to access and analyze complex data more easily
and rapidly than with traditional solutions. This approach also allows Sagent's
customers to manage the rapidly growing levels of data within their
organizations.
Highly Scalable. Sagent's use of advanced bandwidth management technology,
combined with its core Star Schema data structure, enables the Sagent DMS
product suite to provide Web-based information access and data analysis
capabilities to thousands of users without degrading application performance and
availability.
Low Total Cost of Ownership. The Sagent DMS product suite is designed to
deliver low total cost of ownership by leveraging industry standards such as the
Windows NT operating system and other Microsoft technology, by providing an
integrated product suite to lower implementation time and cost, and by providing
extensive administrative functionality to reduce ongoing systems management
burdens.
STRATEGY
Sagent's objective is to become a leading provider of Enterprise
Intelligence software solutions to address organizations' rapidly growing
information access, analysis and delivery needs.
The following are key elements of the Company's strategy:
Focus on Internet Market Opportunity. The Company believes that the growing
global use of the Internet is driving widespread implementation of new
e-Business applications. These applications depend on the efficient access,
analysis and presentation of enterprise data. By providing a product that
delivers large amounts of highly complex data through the Web to large numbers
of simultaneous users, the Company believes that its products can be a
foundation and enabler of Web-based Enterprise Intelligence and e-Business
applications.
Extend Product Functionality and Technology Leadership. The Company
believes it provides the first fully integrated, end-to-end Enterprise
Intelligence software solution capable of meeting the performance demanded by
the emerging e-Business environment. The Company is currently developing the
next version of the Sagent DMS product suite, which is being designed to
significantly enhance user scalability, and which is currently scheduled for
release in the first half of 1999. The Company plans to add capabilities that
broaden and complement the Sagent DMS product suite, such as data analysis
(including data mining, forecasting and modeling), data visualization, data
sorting, Web querying, extraction of data from SAP applications and information
broadcasting. In addition, the Company may introduce new international versions
of its products and may port its products to additional UNIX platforms as
opportunities arise. Although the Company expects that certain of its new
products will be developed internally, the Company may, based on timing and cost
considerations, acquire technology or products from third parties.
Offer Pre-Built Enterprise Intelligence Applications. The Company believes
there is a large market for pre-built applications that utilize the underlying
analytical capabilities of the Sagent DMS product suite and offer "out of the
box" functionality in targeted vertical markets. To date, the Company has
designed, developed and marketed such applications in conjunction with strategic
partners, including Siebel, Advent Software, Inc. ("Advent")
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<PAGE> 35
and Automatic Data Processing, Inc. ("ADP"). In the future, Sagent plans to
leverage the vertical and functional knowledge gained through these
relationships and through implementations by its Professional Services Group to
develop other pre-built Enterprise Intelligence applications.
Broaden Distribution and Strategic Relationships. The Company believes that
it can continue to expand its market penetration and build its brand recognition
by aggressively expanding its direct sales force; pursuing strategic
relationships with selected enterprise application vendors, consulting firms,
system integrators and development partners; and expanding its network of
resellers and distributors. To date, the Company has entered into relationships
with companies such as Microsoft Corporation ("Microsoft"), Oracle Corporation
("Oracle"), Siebel, ADP, Advent and USinternetworking, Inc.
("USinternetworking"). The Company also believes that a significant opportunity
exists to sell its products internationally and intends to leverage its existing
distributor relationships in Europe and Japan and expand its direct and indirect
international sales efforts to exploit this opportunity.
Provide High Quality Services to Customers. The Company provides
comprehensive implementation, support and training services to help customers
adopt Sagent products and build customer satisfaction, strong references and
long-term relationships. The Company plans to continue to expand its
professional services capabilities and infrastructure. In addition, Sagent
intends to expand the education and training services it offers to its strategic
partners and resellers to help these companies market Sagent products more
effectively.
Exploit Rapid Growth of Microsoft Windows NT. The Company will continue to
focus its development efforts on the Microsoft Windows NT platform. Sagent
believes Windows NT is rapidly gaining share in the enterprise computing market
due to its ease of maintenance and cost effectiveness. IDC projects that the
installed base of Windows NT-based servers will increase from 1.6 million in
1997 to 5.9 million in 2002. The Company believes that the Sagent DMS product
suite has a competitive advantage in leveraging the growth of the Windows NT
platform because it was designed to optimize Microsoft technology.
PRODUCTS
The Sagent DMS product suite is comprised of software application servers
that handle the core components of an end-to-end solution, as well as end user
analysis applications.
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[Graphic depiction of the components of the Company's product architecture]
As illustrated above, the Sagent DMS product suite consists of three core
functional areas: Data Load and Management, Data Access and Analysis, and
Administration and Design.
DATA LOAD AND MANAGEMENT
Sagent Data Load Server. The Sagent Data Load Server extracts data from
multiple client/server and mainframe databases, transforms that data into a Star
Schema data structure, and then loads that data into a Sagent data mart. The
server relies upon a 32-bit multithreaded architecture to achieve its high level
of performance.
DATA ACCESS AND ANALYSIS
Sagent Data Access Server. The Sagent Data Access Server delivers the data
loaded into a Sagent data mart to end users. The server is designed to allow
large numbers of users to access and analyze data stored in Star Schema
structures. The server relies upon a 32-bit multithreaded architecture to
achieve its high level of performance.
Sagent WebLink Server. The Sagent WebLink Server is a high performance,
scalable application server that delivers information from the Sagent Data
Access Server, allowing end users to query, analyze and report business
information from a Web browser. The server also provides management capabilities
that maintain the security and availability of Internet connections.
Sagent Statistical Calculator. The Sagent Statistical Calculator adds
advanced statistical analysis capabilities to the Sagent Data Access Server. The
calculator allows organizations to automate statistical analyses of large,
complex data sets, thereby improving the single business view of information
distributed to end users.
Sagent Information Studio. Sagent Information Studio enables users to
access and analyze an organization's information in client/server environments.
Information Studio, as well as WebLink Server, can be integrated with Microsoft
Excel to aid in exporting result sets to spreadsheets for further analysis.
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<PAGE> 37
The following reporting and analysis products can be integrated with the
Sagent DMS product suite:
Sagent Reports. Sagent Reports allows end users to create, publish and view
graphically rich presentations of corporate information.
Sagent Analysis. Sagent Analysis provides a wide range of analytical
capabilities for business data, such as rankings, deciles, periodic and
exception reporting. The product's drill down analysis capabilities allow users
to view information in either cross-tabular or chart format.
StatView for Sagent. StatView for Sagent provides an end user with the
ability to create, publish and view complex statistical analyses of corporate
data in client/server environments.
ADMINISTRATION AND DESIGN
Sagent Design Studio. Sagent Design Studio provides a visual environment
for describing data and designing the flow of data for both loading and
accessing a data mart. Sagent Design Studio minimizes the requirement that users
have in-depth knowledge of databases, networks and operating systems and allows
them to concentrate on the business purpose of accessing, analyzing and
delivering information.
Sagent Admin. Sagent Admin enables administrators to manage and control one
or more Sagent DMS servers from a single location. In addition, Sagent Admin
manages user security and access privileges.
Sagent Automation. Sagent Automation automates common tasks within the
Sagent DMS product suite, such as data loading, error recovery and quality
assurance. Tasks can be initiated by events such as a pre-determined time of day
or date, reaching disk storage capacity or the availability of new data.
PROFESSIONAL SERVICES AND CUSTOMER SUPPORT
The Sagent Professional Services Group offers an extensive set of
consulting and education services to the Company's customers. The Sagent
Professional Services Group has significant experience in the design and
implementation of Enterprise Intelligence applications using a Star Schema data
architecture. Sagent's customers are able to select an appropriate level of
support for their implementations, including project planning, design and
implementation assistance.
In addition to consulting services, the Sagent Professional Services Group
offers design and product training classes to facilitate customer success in
initial implementations and provide a foundation for expanding the use of Sagent
products in customer organizations. The Sagent Professional Services Group also
offers to third party consultants product certification training, which the
Company believes helps develop market awareness of its product offerings.
CUSTOMERS
The following is a representative list of the Company's customers that have
purchased more than $75,000 in product licenses or services from the Company
since January 1, 1997.
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<PAGE> 38
<TABLE>
<S> <C> <C>
ARINC DiaLogos Mashantucket Pequot Tribal
Automated Data Processing Eddie Bauer Nation
AT&T Ernst & Young MCI WorldCom
Barnesandnoble.com Express Scripts/ValueRx Miller Freeman
Bell Communications Research Farm Credit Services NationsBanc
BellSouth Cellular General American NETCOM On-Line
BellSouth Entertainment Transportation Communication Services
CEISS/BC Ministry of Education Hoechst Marion Roussel Nordstrom
CellStar GPU Energy Nycomed
Ceridian J.P. Morgan & Co. PairGain Technologies
City of Santa Clara Jiffy Lube International Pharmaceutical Care Network
Cohn & Wells John Hopkins University Prudential Insurance
Deutsche Financial Services Kaufman & Broad Home Rohm & Haas
Kawasaki Steel Systems R&D The Application Group
</TABLE>
In 1997, the Company received in excess of 10% of its total revenues from
each of Oracle Corporation and Automated Data Processing.
CASE STUDIES
The following case studies illustrate how certain of the Company's
customers have utilized the Sagent DMS product suite:
PHARMACEUTICAL CARE NETWORK
Pharmaceutical Care Network ("PCN") is a pharmacy benefits management and
healthcare information services company.
Business Challenge. PCN was one of the first pharmacy benefit management
companies to institute on-line, real-time claim processing for a nationwide
network of participating pharmacies. When a plan participant presents a
prescription at a PCN participating pharmacy, the applicable plan guidelines are
referenced on-line instantly, ensuring that a customer pays for appropriate and
eligible prescriptions at the contracted price. PCN wanted to leverage the
information it was gathering through its nationwide network of pharmacies to
improve the level of service across its pharmaceutical care value chain,
including plan members, health care providers and plan sponsors and affiliated
pharmacies. To provide this service, PCN wanted to install an Enterprise
Intelligence solution that would allow customers to access and analyze the vast
amounts patient care information through a Web browser.
Solution. PCN established MedIntelligence, a family of information-based
products for its pharmaceutical care value chain, to screen and review
prescription data, initiate notifications that identify drug therapy problems
and recommend action to improve the quality and cost of patient care. PCN
selected the Sagent DMS product suite as the core of MedIntelligence to
integrate large amounts of disparate information within the PCN network and to
rapidly deliver MedIntelligence products over the Web. The MedIntelligence
products and the Sagent DMS product suite furnishes healthcare providers with
access to a more complete view of patient drug regimens, which reduce the risk
of harmful drug interactions, and provide health care payers and plan
administrators with the ability to monitor pharmacy related plan costs and usage
trends.
CELLSTAR CORPORATION
CellStar Corporation ("CellStar") is an integrated wholesaler and retailer
of wireless handsets and other wireless communication products, with operations
in the U.S., Asia/Pacific, Latin America and the U.K.
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Business Challenge. CellStar required a solution to provide its global
sales force and key customers access to sales data for analysis and
presentation. In particular Cellstar wanted to provide it's employees with the
ability to monitor sell through, perform customer rankings and identify high
margin products. In addition CellStar wished to provide it's key customers and
vendors with worldwide data on the most popular products by volume to maximize
their revenue opportunity.
Solution. CellStar uses the Sagent DMS to manage and access CellStar data.
The Sagent Analysis desktop module with Sagent's WebLink lets users perform
multidimensional analysis on the data mart to gain sales data information either
from a client/server environment for their internal employees and through a Web
browser for their global sales force, customers and vendors. While the WebLink
facility is used to provide access to data mart information to general users,
Sagent's Information Studio with the analysis module is generally utilized by
internal business analysts. This Enterprise Intelligence solution provides
CellStar's manufacturers and key customers with the ability to analyze sell-
through data so that they can determine which products are selling at acceptable
margins to make better informed channel marketing decisions.
TECHNOLOGY
The Company has invested significant resources in developing leading
technologies and believes that utilizing a Star Schema data architecture and the
Company's advanced dataflow technology to construct and provide access to data
marts gives it a competitive advantage over traditional solutions. The Company
also believes that its technology maximizes the advantages of an Internet based
architecture to provide one of the most scalable solutions currently offered in
the market. The following are the key underlying technologies of the Sagent DMS
product suite:
Dataflow Technology. Sagent's dataflow technology is the foundation for the
Sagent DMS load and access servers. Dataflow technology allows users to rapidly
construct processes that load and access a data mart without writing code. These
services relieve the need for users to have in-depth knowledge of databases,
networks and multithreaded operating systems and allow them to concentrate on
the application they are building. The dataflow engine executes the processes
that are visually designed by the user. The dataflow technology is implemented
using the COM (Component Object Model) standard developed by Microsoft. The
utilization of a modular, language-independent component technology allows
customers and resellers to incorporate new functionality into the product via a
transform software development kit. This same development kit provides the
Company with the ability to add new functionality to the server rapidly and send
it to the customer electronically without requiring a complete upgrade of the
system.
Star Schema Design. The Company has implemented a set of dataflow
components to support the loading and accessing of Star Schemas. Star Schemas
are a database design technique used to provide high performance for ad hoc data
analysis within a relational database by minimizing the number of relations to
process in a query. By combining query generation with the dataflow engine's
processing capability, the Company provides power and speed to users accessing
Star Schema structured data. In addition, the Sagent DMS product suite provides
a set of specialized dataflow components for loading Star Schemas that
significantly lowers the implementation time for the Sagent DMS product suite.
Internet-Based Architecture. The Company has developed an architecture that
utilizes the network of computing tiers that comprise the Web. These tiers
include browsers, Internet servers, data access servers, data load servers and
database servers. The efficient
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usage of CPU cycles and memory provided by these tiers enables the Sagent DMS
product suite to achieve a high degree of scalability and performance. In
addition, on-demand data delivery minimizes bandwidth usage, improving the rate
at which information is delivered to users.
SALES AND MARKETING
Sales. The Company sells its products and services in North America
primarily through its direct sales and services organization. The Company has
domestic sales offices in California, Colorado, Connecticut, Florida, Georgia,
Massachusetts, New York, Pennsylvania, Texas, Illinois and Virginia. The direct
sales process involves the generation of sales leads through direct mail,
seminars, telemarketing, advertising and the Web. The Company's field sales
force typically conducts demonstrations and presentations of the Company's
products to developers and management at customer sites as part of its direct
sales effort. The time between initial customer contact and an actual sales
order may span six months or more. See "Risk Factors--Our Products Have Lengthy
Sales Cycles."
Within the Company's direct sales group, a separate group targets strategic
partnerships with industry-leading application software providers such as
Siebel, Advent, ADP and Oracle. These vendors embed all or a portion of the
Company's products within their own applications and then sell the integrated
products to their customers. The enterprise application vendor's customer
receives a license to use the Company's products solely in conjunction with the
vendor's application with which Sagent DMS products are integrated. Enterprise
application vendors provide the first level of post-sales support to customers.
The Company also utilizes a limited number of resellers, such as Unisys
Corporation, USinternetworking and Cap Gemini Group, that remarket the Company's
products to their customer base. Resellers are offered discounts on the
Company's products and sell a full use license of the product. The Company's
resellers do not provide post-sales support. The Company's ability to achieve
revenue growth in the future will depend in large part on its success in
expanding its direct sales force and in further establishing and maintaining
relationships with enterprise application vendors and resellers. See "Risk
Factors--We Rely Substantially on Our Channel Partners."
The Company also sells its products internationally through distributors
located in France, Germany, Japan, South Africa and the United Kingdom. These
distributors perform some or all of the following functions: sales and
marketing, systems integration, software development, and ongoing consulting
training and customer support. In exchange for providing such services, the
Company offers its distributors discounts on products. International sales are
subject to certain risks, including, but not limited to, costs of localizing
products for foreign countries, dependence on local vendors, currency
fluctuations and greater difficulty or delay in accounts receivable collection.
See "Risk Factors--Risks Associated with International Operations."
Marketing. The Company has a comprehensive marketing strategy which
includes public relations, user group meetings, programs to work closely with
analysts and other influential third parties, and direct mail campaigns. The
Company also utilizes the Web for advertising campaigns on frequently visited
Web sites including those of its strategic partners. The Company uses its Web
site, www.sagenttech.com, to establish its market presence, generate leads and
extend its program offerings to customers and strategic partners. A key element
of the Company's marketing strategy is to leverage its relationship with Dr.
Ralph Kimball, one of the Company's consultants and strategic partners, by
sponsoring his data mart design courses. The Company has also invested in
building a
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partner and channel marketing function to recruit, train, support and offer
co-marketing opportunities to technology partners and resellers.
RESEARCH AND PRODUCT DEVELOPMENT
The Company's research and development group is organized by product teams,
which consist of product managers, software engineers, quality assurance
engineers and technical documentation specialists. The teams are encouraged to
maintain consistent architectural standards, engineering practices, quality
goals and documentation standards across a broad product line. The product teams
use a phased development approach that monitors cost, schedule, quality, time,
functionality and customer satisfaction. The Company has established an
executive product steering committee which reviews the progress of individual
product teams at each phase of development. In order to incorporate customer
needs in product releases, the product teams actively solicit requirements from
customers, user groups, professional services, industry analysts and technical
support.
The Company's total expenses for research and development for the year
ended December 31, 1996, 1997 and 1998 were $3.4 million, $5.0 million and $6.0
million respectively. The Company believes that research and development
expenses will continue to increase in the future. To date, the Company's
development efforts have not resulted in any capitalized software development
costs.
The Company has made substantial investments in research and development.
The Company is currently developing the next version of the Sagent DMS product
suite, which is being designed to significantly enhance user scalability, and is
currently scheduled for release in the first half of 1999. The Company plans to
add capabilities that broaden and complement the Sagent DMS product suite, such
as data analysis (including data mining, forecasting and modeling), data
visualization, data sorting, Web querying, extraction of data from SAP
applications and information broadcasting. In addition, the Company may
introduce new international versions of its products and may port its products
to additional UNIX platforms as opportunities arise. Although the Company
expects that certain of its new products will be developed internally, the
Company may, based on timing and cost considerations, acquire technology or
products from third parties.
The Company believes that its future performance will depend in large part
on its ability to maintain and enhance its current product line, develop new
products that achieve market acceptance, maintain technological competitiveness
and meet an expanding range of customer requirements. The Company's inability to
enhance its existing products and develop new ones in a timely and effective
manner, could have a material adverse effect upon the Company's business,
financial condition and operating results. See "Risk Factors--We Depend upon New
Product Development," "--Evolving Technology Standards May Impact Our Products"
and "--Risk of Software Defects and Potential Product Liability."
COMPETITION
The markets for the Company's products are intensely competitive and
subject to rapidly changing technology. The Company competes against providers
of decision support software, data warehousing software, enterprise application
software and e-Business software. The primary bases of competition in this
market include performance, scalability, ease of use, operating platform and
cost of ownership.
The Company's competitors providing traditional decision support software
include Brio Technology, Inc., Business Objects S.A., Cognos Incorporated,
Information Advan-
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tage, Inc. and MicroStrategy, Inc. The Company's competitors providing data
warehousing software include Ardent Software, Inc., Informatica Corporation,
Information Builders, Oracle, PLATINUM Technology, Inc. and SAS Institute, Inc.
In addition, enterprise application software vendors such as Baan Company N.V.,
J.D. Edwards & Company, PeopleSoft, Incorporated and SAP AG are beginning to
offer decision support and analytical modules, although each tends to support
the analysis of data only from its own operational systems. One or more of these
companies may expand its technologies to support greater Enterprise Intelligence
functionality. The Company may also face competition from vendors of products
and turn-key solutions for e-Business applications that could include Internet
based information functionality.
Many of the Company's competitors have longer operating histories,
significantly greater financial, technical, marketing or other resources, or
greater name recognition than we do. The Company's competitors may be able to
respond more quickly than the Company can to new or emerging technologies and
changes in customer requirements. Competition could seriously harm the Company's
ability to sell additional software and maintenance and support renewals on
terms favorable to the Company. Competitive pressures could reduce the Company's
market share or require it to reduce the price of products, either of which
could materially and adversely affect the Company's business, financial
condition and operating results.
INTELLECTUAL PROPERTY
The Company seeks to protect its software, documentation and other written
materials primarily through a combination of patent, trade secret, trademark and
copyright laws, confidentiality procedures and contractual provisions. For
example, the Company licenses rather than sells its software and requires
licensees to enter into license agreements that impose certain restrictions on
the licensees' ability to utilize the software. In addition, the Company seeks
to avoid disclosure of its trade secrets, by, among other things, requiring
those persons with access to the Company's proprietary information to execute
confidentiality agreements with the Company and restricting access to the
Company's source code.
The Company has two patent applications pending and one patent application
allowed in the United States with respect to certain aspects of its software.
None of these patents have been issued, and there can be no assurance that any
patents will be issued pursuant to these applications or that, if granted, such
patent would survive a legal challenge to its validity or provide significant
protection to the Company. Despite the Company's efforts to protect its
proprietary rights, unauthorized parties may attempt to copy aspects of the
Company's products or obtain and use information that the Company regards as
proprietary. Policing unauthorized use of the Company's products is difficult.
While the Company is unable to determine the extent to which piracy of its
software products exists, software piracy can be expected to be a persistent
problem, particularly in foreign countries where the laws may not protect the
Company's proprietary rights as fully as in the United States. There can be no
assurance that the Company's means of protecting its proprietary rights will be
adequate or that the Company's competitors will not independently develop
similar technology.
From time to time, the Company may be involved in intellectual property
disputes. In May 1998, Acta Technology, Inc. ("Acta") filed suit against the
Company alleging, among other things, copyright infringement, and the Company
filed suit against Acta alleging misappropriation of Company trade secrets.
Other than Acta, the Company has not been notified that the Company's products
infringe the proprietary rights of third
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parties. However, there can be no assurance that third parties will not claim
infringement by the Company with respect to current or future products. The
Company expects that software product developers will increasingly be subject to
infringement claims as the number of products and competitors in the Company's
industry segment grows and the functionality of products in different industry
segments overlaps. See "--Legal Proceedings" and "Risk Factors--Risks Associated
with Intellectual Property."
The Company relies upon certain software to perform key functions that it
has licensed from Opalis S.A. for its Sagent Automation product. This license
may not continue to be available to the Company on commercially reasonable
terms. The loss of this license could result in delays or reductions of
shipments of the Sagent Automation product until equivalent software could be
developed, identified, licensed and integrated, which could materially adversely
affect the Company's business, financial condition and operating results.
EMPLOYEES
As of December 31, 1998, the Company had a total of 152 employees, of whom
147 were based in the United States and 4 were based internationally. Of the
total, 60 were engaged in sales and marketing, 43 in research and development,
32 in professional services and customer support, and 17 in finance,
administration and corporate operations. The Company's future performance
depends in significant part on its continuing ability to attract, train and
retain highly qualified technical, sales, service, marketing and managerial
personnel. None of the Company's employees is represented by a labor union. The
Company has not experienced any work stoppages and considers its relations with
its employees to be good. See "Risk Factors--We Need to Recruit Additional
Personnel and We Depend on Our Key Personnel."
FACILITIES
The Company's principal offices currently occupy approximately 34,000
square feet in Mountain View, California pursuant to a lease which expires in
October 2003. In addition, the Company also leases executive suites on a
short-term basis for North American offices in Englewood, Colorado; Atlanta,
Georgia; Orlando, Florida; Plantation, Florida; Chicago, Illinois; Wellesley,
Massachusetts; New York, New York; Bala Cynwyd, Pennsylvania; Houston, Texas;
Alexandria, Virginia and Toronto, Ontario. The Company believes that its
facilities are adequate for the next 12 months and that, if required, suitable
additional space will be available on commercially reasonable terms to
accommodate expansion of the Company's operations.
LEGAL PROCEEDINGS
In May 1998, Acta filed suit against the Company alleging copyright
infringement of certain of its software code. In addition, Acta alleged that the
Company committed conversion, fraud and unfair competition. Acta sought a
declaration that it did not misappropriate any of the Company's trade secrets.
Acta also sought injunctive relief, monetary damages, costs and attorneys' fees.
In May 1998, the Company filed suit against Acta and its founders alleging
misappropriation of the Company's trade secrets, breach of contract, violation
of the covenant of good faith and fair dealing, breach of confidence, fraud and
unfair competition. The Company and Acta have agreed to mediate the dispute;
however, this mediation may not be successful. If the dispute is not resolved in
mediation and the parties do not otherwise settle the dispute, the Company could
incur substantial expenses and the attention of the Company's development and
management personnel may
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be diverted. Litigation of this type is inherently uncertain, especially because
it involves complex technical issues. The Company can give no assurance that it
will prevail in the litigation against Acta or that it will successfully defend
Acta's claim. See "Risk Factors--Risks Associated with Intellectual Property."
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company as of January 29, 1999
are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Kenneth C. Gardner........................ 48 President, Chief Executive Officer and
Director
John E. Zicker............................ 42 Executive Vice President, Technology,
Chief Technology Officer and Director
W. Virginia Walker........................ 53 Executive Vice President, Finance and
Administration, and Chief Financial
Officer
Thomas M. Lounibos........................ 42 Executive Vice President, Sales and
Marketing
Kenneth C. Holcomb........................ 49 Vice President, Operations
Michael P. Venerable...................... 36 Vice President, Professional Services
Shanda Bahles (a)(b)...................... 43 Director
Richard W. Shapero(a)(b).................. 51 Director
Jeffrey T. Webber......................... 46 Director
Klaus S. Luft(c).......................... 57 Director designee
</TABLE>
- -------------------------
(a) Member of the Audit Committee.
(b) Member of the Compensation Committee.
(c) The Board of Directors has appointed Mr. Luft to the Board of Directors, and
Mr. Luft has agreed to join, effective as of the first meeting of the Board
of Directors following completion of the offering.
Kenneth C. Gardner. Mr. Gardner has been President, Chief Executive Officer
and a director since commencement of operations in June 1995. From March 1994
until March 1995, Mr. Gardner was Vice President of Products at Borland
International, Inc. ("Borland"), which has since changed its name to Inprise
Corporation, an enterprise applications company. From February 1992 until March
1994, Mr. Gardner was President, Chief Executive Officer and a co-founder of
ReportSmith, Inc. ("ReportSmith"), a database report applications company, which
was purchased by Borland in 1994. Mr. Gardner is a director of ObjectSwitch
Corp., Data Sage, Inc. and CommerceOne Inc., which are privately held companies.
Mr. Gardner received his B.S.C. degree in Finance from the University of
Louisville.
John E. Zicker. Mr. Zicker has been Executive Vice President, Technology,
Chief Technology Officer and a director since the Company's commencement of
operations in June 1995. From March 1994 until May 1995, Mr. Zicker was Director
of Client/Server Development at Borland. From February 1992 until March 1994,
Mr. Zicker was Vice President of Technology and a co-founder of ReportSmith. Mr.
Zicker has 13 years experience in software development and image processing at
NASA Ames Research Center, Lawrence Livermore Laboratories and the Stanford
Linear Accelerator Center. Mr. Zicker received his B.S. degree in Electrical
Engineering at the University of California at Davis and his M.S. degree in
Electrical Engineering from the University of Wisconsin at Madison.
W. Virginia Walker. Ms. Walker has been Executive Vice President, Finance
and Administration, and Chief Financial Officer since January 1998. From June
1996 to January 1998, Ms. Walker pursued personal interests. From November 1995
until June 1996, Ms. Walker was Executive Vice President of Finance and
Administration, Chief
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Financial Officer and Secretary of JTS Corporation, a publicly traded disk drive
manufacturer. From May 1985 until September 1995, Ms. Walker worked at Scios
Nova, Inc., a publicly traded biopharmaceutical company, where she held the
positions of Vice President of Finance and Administration and Chief Financial
Officer. Ms. Walker received her B.S. degree in Business Administration,
Accounting from San Jose State University.
Thomas M. Lounibos. Mr. Lounibos has been Executive Vice President, Sales
and Marketing since January 1999. Mr. Lounibos was the Company's Executive Vice
President, Worldwide Sales, from October 1998 until January 1999 and was the
Company's Vice President, Sales from March 1996 until October 1998. From October
1995 until March 1996, Mr. Lounibos was Vice President of Sales for
ParcPlace-DigiTalk Incorporated ("ParcPlace-DigiTalk"), an object-oriented
programming tools company, and from November 1993 until October 1995 Mr.
Lounibos was Vice President of Sales for DigiTalk, Incorporated, which was
acquired by ParcPlace Incorporated. Prior to joining DigiTalk, Mr. Lounibos
worked for Knowledgeware, Incorporated, a software company, where he served as
Vice President of Sales--Western United States and Vice President of Marketing.
Mr. Lounibos received his B.S. degree in Business Economics from the University
of San Francisco.
Kenneth C. Holcomb. Mr. Holcomb has been Vice President, Operations since
March 1998. From March 1997 until February 1998, Mr. Holcomb was Vice President,
Operations of Pilot Network Services, Inc., a publicly-traded network security
company. From May 1996 until February 1997, Mr. Holcomb was Vice President,
Systems Integration of WorldCom, Inc., a publicly traded telecommunications
company. From January 1996 until May 1996, Mr. Holcomb was Vice President,
Internet Development of MFS Communications Company, Inc., a telecommunications
company. From January 1992 until December 1996, Mr. Holcomb was Senior Vice
President, Customer Service and Operations of MFS Datanet, Inc., and subsidiary
of MFS Communications, Inc. a data communications company. Mr. Holcomb received
his B.A. degree in Business Administration, Finance, from the University of
Notre Dame.
Michael P. Venerable. Mr. Venerable has been Vice President, Sagent
Professional Services since March 1998. In March 1992, Mr. Venerable founded
Talus, a data warehousing consulting firm, and served as its President until
February 1998, when the Company acquired Talus. Mr. Venerable received his B.S.
degree in Criminal Justice from the University of Dayton.
Shanda Bahles. Ms. Bahles has been a director of the Company since May
1995. Since May 1991, Ms. Bahles has been a General Partner of El Dorado
Ventures, a venture capital firm. Ms. Bahles joined El Dorado Ventures as an
associate in June 1987. From 1979 to 1985, Ms Bahles held various engineering,
marketing and management positions with Millennium Systems, Inc., a systems
integration company, and Fortune Systems Corporation, a workstation
manufacturer. Ms. Bahles is a director of Pilot Network Services, Inc., a
publicly traded company, and Women.com Networks, Inc., Poet Holdings, Inc. and
MS2, Inc., which are privately held companies. Ms. Bahles received her B.S.E.E.
and M.B.A. degrees from Stanford University.
Richard W. Shapero. Mr. Shapero has been a director of the Company since
May 1995. Since April 1993, Mr. Shapero has been a General Partner of Crosspoint
Venture Partners, a venture capital firm. From January until June 1992, Mr.
Shapero was Chief Operating Officer of Shiva Corporation, a networking company.
Previously, he was a Vice President of Sun Microsystems, Inc., Senior Director
of Marketing of AST Research, Inc. and held marketing and sales positions at
Informatics General Corporation and UNIVAC's
45
<PAGE> 47
Communications Division. Mr. Shapero is a director of Covad Communications
Group, Inc., a publicly traded company, and Digital Island, Inc., Diamond Lane
Communications Corporation, NetBoost Corporation, Fabrik Communications, Inc.,
ObjectSwitch Corp., Jetstream Communications, Inc., AristaSoft Corporation and
iBeam Broadcasting Corporation, which are privately held companies. Mr. Shapero
received his B.A. degree in English from the University of California at
Berkeley.
Jeffrey T. Webber. Mr. Webber has been a director of the Company since
September 1995. Mr. Webber founded, and since January 1991 has served as
President of, R.B. Webber & Company, Inc., a management consulting firm. From
1987 to January 1991, he was a partner of Edgar, Dunn & Company, a management
consulting firm. Mr. Webber serves as a director of Sybase, Inc., a publicly
traded company, and CommerceOne, Inc., enCommerce, Inc., Persistence Software,
Inc., Spear Technologies, Inc. and Workwise Software, Inc., which are privately
held companies. Mr. Webber received his B.A. degree in American Studies from
Yale University.
Klaus S. Luft. Mr. Luft is the founder and President of MATCH -- Market
Access for Technology Services GmbH, a provider of sales and marketing services
to high technology companies, since February 1994. Mr. Luft is also the founder,
owner and President of ISAR-Vermogensverwaltung GbR mbH ("ISAR"). Since August
1990, Mr. Luft has served as an International Advisor and Vice-Chairman of
Goldman Sachs Europe Limited, an investment bank. From March 1986 to November
1989, Mr. Luft was Chief Executive Officer of Nixdorf Computer AG, a
manufacturer of computer systems in Paderborn, Germany, where he also held
various other executive positions in marketing, manufacturing and finance for
more than 17 years. Mr. Luft is a director of Dell Computer Corporation, a
publicly traded company. Mr. Luft received his German Arbitur in Bruchsal,
Germany.
BOARD OF DIRECTORS AND COMMITTEES
Following the offering, the Company's Board of Directors (the "Board") will
consist of six directors divided into three classes with each class serving for
a term of three years. At each annual meeting of stockholders, directors will be
elected by the holders of the Common Stock to succeed those directors whose
terms are expiring. Mr. Shapero and Ms. Bahles are Class I directors whose terms
will expire in 2000; Mr. Webber is a Class II directors whose terms will expire
in 2001; and Messrs. Gardner and Zicker are Class III directors whose terms will
expire in 2002.
The Board has a Compensation Committee and an Audit Committee. The
Compensation Committee, which is comprised of Ms. Bahles and Mr. Shapero,
administers the Amended 1995 Plan, the 1998 Plan and the 1999 Purchase Plan and
all matters concerning executive compensation. The Audit Committee, which is
comprised of Ms. Bahles and Mr. Shapero, approves the Company's independent
auditors, reviews the results and scope of annual audits and other accounting
related services, and evaluates the Company's internal audit and control
functions. Each of these committees was established in February 1997.
DIRECTOR COMPENSATION
The Company does not pay any compensation to directors for serving in that
capacity, nor does it reimburse directors for expenses incurred in attending
board meetings. The Board has the discretion to grant options to non-employee
directors pursuant to the Director Plan. See "Management--Employee Benefit
Plans--Director Plan."
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<PAGE> 48
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised of Ms. Bahles and Mr.
Shapero. Neither of these individuals has at any time been an officer or
employee of the Company. Prior to formation of the Compensation Committee, all
decisions regarding executive compensation were made by the full Board. No
interlocking relationship exists between the Board or Compensation Committee and
the board of directors or compensation committee of any other Company, nor has
any such interlocking relationship existed in the past.
LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS
The Company's Amended and Restated Certificate of Incorporation (the
"Amended Certificate of Incorporation") limits the liability of directors to the
maximum extent permitted by Delaware law. Delaware law provides that directors
of a corporation shall not be personally liable for monetary damages for breach
of their fiduciary duties as directors, except for liability (1) for any breach
of their duty of loyalty to the corporation or its stockholders, (2) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (3) for unlawful payments of dividends or unlawful Stock
repurchases or redemptions as provided in Section 174 of the Delaware General
Corporation Law or (4) for any transaction from which the director derived an
improper personal benefit.
The Company's Bylaws provide that the Company shall indemnify its directors
and executive officers and may indemnify its other officers and employees and
agents and other agents to the fullest extent permitted by law. The Company
believes that indemnification under its Bylaws covers at least negligence and
gross negligence on the part of indemnified parties. The Company's Bylaws also
permit the Company to secure insurance on behalf of any officer, director,
employee or other agent for any liability arising out of his or her actions in
such capacity, regardless of whether the Bylaws would permit indemnification.
The Company has entered into agreements to indemnify its directors and
officers, in addition to indemnification provided for in the Company's Bylaws.
These agreements, among other things, indemnify the Company's directors and
officers for certain expenses (including attorneys' fees), judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of the Company, arising out of such
person's services as a director or officer of the Company, any subsidiary of the
Company or any other Company or enterprise to which the person provides services
at the request of the Company. In addition, the Company intends to obtain
directors' and officers' insurance providing indemnification for certain of the
Company's directors, officers and employees for certain liabilities The Company
believes that these provisions, agreements and insurance are necessary to
attract and retain qualified directors and officers.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened litigation
or proceeding that might result in a claim for such indemnification.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation that
the Company paid during the year ended December 31, 1998 to the Company's Chief
Executive Officer and each of the Company's other four most highly compensated
47
<PAGE> 49
executive officers whose salary and bonus exceeded $100,000 during such fiscal
year (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY($) BONUS($) OPTIONS(#) COMPENSATION(A)
--------------------------- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C>
Kenneth C. Gardner................ $225,000 $ 90,000 -- $366
President and Chief Executive
Officer
John E. Zicker.................... 150,000 60,000 -- 120
Executive Vice President,
Technology and Chief Technology
Officer
W. Virginia Walker................ 173,965 69,586 180,000 240
Executive Vice President,
Finance and Administration and
Chief Financial Officer
Thomas M. Lounibos................ 164,590 124,420(b) 90,000 120
Executive Vice President, Sales
and Marketing
Perry S. Mizota(c)................ 140,000 35,000 -- 72
Former Vice President, Marketing
</TABLE>
- -------------------------
(a) Consists of premiums paid on term life insurance.
(b) Consists of commissions calculated based on Company revenues.
(c) Perry S. Mizota resigned from his position as Vice President, Marketing of
the Company effective January 29, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth each stock option grant to each of the Named
Officers during the fiscal year ended December 31, 1998. No stock appreciation
rights were granted during such fiscal year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(A) POTENTIAL REALIZABLE
------------------------------------------------------ VALUE AT ASSUMED
NUMBER ANNUAL RATES OF STOCK
OF SECURITIES % OF PRICE APPRECIATION FOR
UNDERLYING TOTAL OPTIONS EXERCISE OPTION TERM(C)
OPTIONS GRANTED TO PRICE PER EXPIRATION -----------------------
NAME GRANTED EMPLOYEES SHARE(B) DATE 5% 10%
---- ------------- ------------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Kenneth C. Gardner......... -- -- -- -- -- --
John E. Zicker............. -- -- -- -- -- --
W. Virginia Walker......... 180,000 13.12% $2.90 01/20/08 $328,283 $ 831,934
Thomas M. Lounibos......... 90,000 6.56% 7.00 12/28/08 396,204 1,004,058
Perry S. Mizota............ -- -- -- -- -- --
</TABLE>
- -------------------------
(a) All options granted during the fiscal year were granted under the Amended
1995 Plan and the 1998 Plan (collectively, the "Stock Plans"). Each option
becomes exercisable according to a vesting schedule, subject to the
employee's continued employment with the Company. Certain options granted
under the Amended 1995 Plan may be exercised immediately upon grant and
prior to full vesting, subject to the optionee's entering a restricted stock
purchase agreement with the Company
48
<PAGE> 50
with respect to any unvested shares. Under such agreement, the optionee
grants the Company the right to repurchase any unvested shares at their
original purchase price in the event the optionee's employment relationship
with the Company should terminate. The Company's right of repurchase will
lapse and the purchaser will vest in the balance of the shares in a series
of installments in accordance with the original vesting schedule of the
exercised option. The exercise price for all these options may be paid in
cash, check, promissory note, shares of Common Stock, through a cashless
exercise procedure involving same-day sale of the purchased shares or any
combination of such methods. The Board has discretion, subject to plan
limits, to modify the terms of outstanding options and to reprice the
options. The Company granted options to purchase 1,367,400 shares of Common
Stock in the year ended December 31, 1998. Ms. Walker's option was granted
under the Amended 1995 Plan in January 1998. One-forty-eighth of the shares
subject to the option vest on each monthly anniversary of January 5, 1998.
Mr. Lounibos' option was granted in December 1998 under the 1998 Plan.
One-twenty-fourth of the shares subject to the option vest on each monthly
anniversary after July 1, 1999.
(b) The exercise price per share of options granted represented the fair market
value of the underlying shares of Common Stock on the dates the respective
options were granted, as determined by the Board. The Company's Common Stock
was not traded publicly at the time of the option grants to the Named
Officers.
(c) Potential gains are net of the exercise price but before taxes associated
with the exercise. The 5% and 10% assumed annual rates of compounded stock
appreciation based upon the deemed fair market value are mandated by the
rules of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of the future Common Stock price. Actual
gains, if any, on stock option exercises are dependent on the future
financial performance of the Company, overall market conditions and the
option holder's continued employment through the vesting period. This table
does not take into account any appreciation in the deemed fair market value
of the Common Stock from the date of grant to the date of this Prospectus,
other than the columns reflecting assumed rates of appreciation of 5% and
10%.
OPTION EXERCISES AND HOLDINGS
The following table sets forth for each of the Named Officers certain
information concerning the number of shares acquired upon exercise of stock
options in the fiscal year ended December 31, 1998 and the number of shares
subject to both exercisable and unexercisable stock options at December 31,
1998. Also reported are values for "in-the-money" options that represent the
positive spread between the respective exercise prices of outstanding stock
options and the fair market value of the Common Stock as of December 31, 1998,
as determined by the Board.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, AT DECEMBER 31,
SHARES VALUE 1998(A) 1998(A)(B)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(A) ($)(C) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth C. Gardner... -- -- 100,000 -- $450,000 --
John E. Zicker....... -- -- 80,000 -- 360,000 --
W. Virginia Walker... 180,000 -- -- -- -- --
Thomas M. Lounibos... 230,000 $1,244,300 118,255 141,745 624,342 $232,853
Perry S. Mizota...... -- -- 50,000 -- 225,000 --
</TABLE>
- -------------------------
(a) Certain options granted under the Amended 1995 Plan may be exercised
immediately upon grant and prior to full vesting, subject to the optionee's
entering a restricted stock purchase agreement with the Company with respect
to any unvested shares. Under such agreement, the optionee grants the
Company an option to repurchase any unvested shares at their original
purchase price in the event the optionee's employment relationship with the
Company should terminate. The Company's right of
49
<PAGE> 51
repurchase will lapse and the purchaser will vest in the balance of the
shares in a series of installments in accordance with the original vesting
schedule of the exercised options.
(b) Calculated by determining the difference between the fair market value of
the securities underlying the option at December 31, 1998 ($7.00 per share,
as determined by the Board) and the exercise price of the options.
(c) Calculated by determining the difference between the fair market value of
the securities underlying the option on the exercise date and the exercise
price paid for such shares.
EMPLOYMENT AGREEMENTS
The Company requires each of its employees to enter into confidentiality
agreements prohibiting such employee from disclosing any confidential or
proprietary information of the Company. In addition, the agreements generally
provide that upon termination such employee will not work for a competitor and
will not solicit Company customers and employees. At the time of commencement of
employment, the Company's employees also generally sign offer letters specifying
certain basic terms and conditions of employment. In general, employees of the
Company are not subject to written employment agreements. However, in connection
with the Company's acquisition of Talus, Michael Venerable entered into an
employment agreement with the Company. See "Certain Transactions--Acquisition of
Talus, Inc."
EMPLOYEE BENEFIT PLANS
1998 Plan. The 1998 Plan provides for grants to employees of incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Internal Revenue Code"), and for grants to employees,
directors and consultants of nonstatutory stock options and stock purchase
rights ("SPRs"). The 1998 Plan was approved initially by the Board and the
stockholders in December 1998. Unless terminated sooner, the 1998 Plan will
terminate automatically in December 2008. A total of 2,440,000 shares of Common
Stock are currently authorized for issuance pursuant to the 1998 Plan, of which
2,221,100 are still available for issuance. The number of shares reserved for
issuance will be subject to an annual increase every May beginning in 2000 equal
to the lesser of 1,500,000 shares of Common Stock, five percent of the
outstanding shares of Common Stock on the date of increase or such lesser number
of shares of Common Stock as approved by the Board. No employee, director or
consultant may be granted in any fiscal year of the Company options to purchase
more than 2,000,000 shares of Common Stock (except in connection with his or her
initial service, in which he or she may be granted options to purchase an
additional 2,000,000 shares). As of December 31, 1998, no shares had been issued
upon the exercise of stock options or stock purchase rights granted under the
1998 Plan, 218,900 shares were subject to outstanding options, and 2,221,100
shares remained available for future grant.
The 1998 Plan may be administered by the Board or a committee of the Board
(the "Committee," and collectively with the Board, the "Administrator"), which
Administrator shall, in the case of options intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Internal Revenue Code, consist of two or more "outside directors" within the
meaning of Section 162(m) of the Internal Revenue Code. The Administrator has
the power to determine the terms of the options or SPRs granted, including the
exercise price, the number of shares subject to each option or SPR, the
exercisability thereof, and the form of consideration payable upon such
exercise. The Administrator also has the authority to reduce the exercise price
of any option or SPR to the then current fair market value, if the fair market
value of the Common Stock covered
50
<PAGE> 52
by such option or SPR declined since the date of grant. In addition, the Board
has the authority to amend, suspend or terminate the 1998 Plan, provided that no
such action may affect any share of Common Stock previously issued and sold or
any option previously granted under the 1998 Plan.
Unless otherwise determined by the Administrator, options and SPRs granted
under the 1998 Plan are not transferable by the optionee, and each option and
SPR is exercisable during the lifetime of the optionee only by such optionee.
The exercise price for options may be paid in cash, check, promissory note,
shares of Common Stock through a cashless exercise procedure involving same-day
sale of the purchased shares or any combination of such exercise procedures.
Options granted under the 1998 Plan must generally be exercised within 90 days
of the end of optionee's status as an employee, director or consultant of the
Company, or within 12 months after such optionee's termination by death or
disability but in no event later than the expiration of the option's term. In
the case of SPRs, unless the Administrator determines otherwise, the Restricted
Stock Purchase Agreement shall grant the Company a repurchase option exercisable
upon the voluntary or involuntary termination of the purchaser's employment with
the Company for any reason (including death or disability). The purchase price
for shares repurchased pursuant to the Restricted Stock Purchase Agreement shall
be the original price paid by the purchaser and may be paid by cancellation of
any indebtedness of the purchaser to the Company. The repurchase option shall
lapse at a rate determined by the Administrator. The exercise price of all
incentive stock options granted under the 1998 Plan must be at least equal to
the fair market value of the Common Stock on the date of grant. The exercise
price of nonstatutory stock options and SPRs granted under the 1998 Plan is
determined by the Administrator, but with respect to nonstatutory stock options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Internal Revenue Code, the exercise price must at least be
equal to the fair market value of the Common Stock on the date of grant. With
respect to any participant who owns stock possessing more than 10% of the voting
power of all classes of the Company's outstanding capital stock, the exercise
price of any incentive stock option granted must equal at least 110% of the fair
market value on the grant date and the term of such incentive stock option must
not exceed five years. The term of all other options granted under the 1998 Plan
may not exceed 10 years.
The 1998 Plan provides that in the event of a proposed dissolution or
liquidation of the Company, the Administrator will notify each optionee of such
proposed transaction. The Administrator in its discretion may provide for an
optionee to have the right to exercise his or her option until 10 days prior to
such transaction, including shares as to which the option would not otherwise be
exercisable. In addition, the Administrator may provide that any Company
repurchase option applicable to any shares purchased upon exercise of an option
or SPR shall lapse as to all such shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an option or SPR will terminate
immediately prior to the consummation of such proposed action.
The 1998 Plan provides that in the event of a merger of the Company with or
into another corporation or a sale of substantially all of the Company's assets,
each option must be assumed or an equivalent option substituted by the successor
corporation (or its parent or subsidiary). If the outstanding options are not
assumed or an equivalent option is not substituted, the optionee will fully vest
in and have the right to exercise the option or SPR as to all of the optioned
stock, including shares which would not otherwise have been vested or
exercisable. In the event that an option or SPR becomes exercisable in full in
the
51
<PAGE> 53
event of a merger or sale of assets, the Administrator will notify each optionee
and the option or SPR will be fully exercisable for a period of fifteen (15)
days from the date of such notice. The option or SPR will terminate upon the
expiration of such period.
Amended 1995 Plan. The Amended 1995 Plan provides grants to employees of
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code, and for grants to employees, directors and consultants of
nonstatutory stock options and SPRs. The original plan was approved initially by
the Board and the stockholders in May 1995. The Amended 1995 Plan was approved
by the Board in July 1998 and the stockholders in September 1998. A total of
3,276,000 shares of Common Stock were authorized for issuance pursuant to the
Amended 1995 Plan. As of December 31, 1998, 1,214,443 shares had been issued
upon the exercise of stock options or stock purchase rights granted under the
Amended 1995 Plan and 2,056,580 shares were subject to outstanding options, and
no shares remain available for future grant. The terms of the Amended 1995 Plan
are substantially similar to those of the 1998 Plan. The Board terminated the
Amended 1995 Plan as to new option grants in December 1998.
Director Plan. The Board has the discretion to grant options to
non-employee directors pursuant to the Director Plan. The Director Plan was
adopted by the Board in January 1999, and is subject to stockholder approval,
but it will in no event become effective until the date of this offering. The
Director Plan has a term of 10 years, unless terminated sooner by the Board. A
total of 150,000 shares of Common Stock have been reserved for issuance under
the Director Plan.
The Board has the authority to determine the terms of the options granted
including the exercise price, number of shares subject to each option,
exercisability thereof and form of consideration payable upon such exercise.
Options outstanding at the end of an optionee's tenure as a director may be
exercised only to the extent exercisable at the time of such cessation of
service as a director. No option granted under the Director Plan is transferable
by the optionee other than by will or the laws of descent and distribution, and
each option is exercisable, during the lifetime of the optionee, only by such
optionee. In the event of a merger of the Company or the sale of substantially
all of the assets of the Company, each outstanding option will become fully
vested and exercisable for all of the option shares, unless such outstanding
option are assumed or substituted by the successor corporation (or its parent or
subsidiary). In the event either outstanding options are assumed or an
equivalent option substituted by the successor corporation, each outstanding
option will continue to become exercisable in accordance with its original
exercise schedule. If an outstanding option is assumed or substituted and the
optionee's status as a director or as a director of the successor corporation
terminates other than upon a voluntary resignation by the optionee, then the
option will become immediately vested exercisable for all of the option shares.
1999 Purchase Plan. The 1999 Purchase Plan was adopted by the Board in
January 1999 and will be submitted the stockholders in February 1999. A total of
450,000 shares of Common Stock has been reserved for issuance under the 1999
Purchase Plan. The number of shares reserved under the 1999 Purchase Plan will
be subject to an annual increase every January equal to the lesser of the number
of shares optioned during the prior year or a lesser amount determined by the
Board. The 1999 Purchase Plan, which is intended to qualify under Section 423 of
the Internal Revenue Code, will be implemented with an initial offering period
commencing on the date on which the Securities and Exchange Commission declares
the Company's Registration Statement effective and ending on or about October
31, 1999. Subsequent offering periods shall each have a six-month duration
52
<PAGE> 54
commencing on the first trading day on or after May 1 and November 1 of each
year. The 1999 Purchase Plan is administered by the Board or by a committee
appointed by the Board. Employees are eligible to participate if they are
customarily employed by the Company or any participating subsidiary for at least
20 hours per week and more than five months in any calendar year. The 1999
Purchase Plan permits eligible employees to purchase Common Stock through
payroll deductions of up to 20% of an employee's compensation (excluding
commissions, overtime and other bonuses and incentive compensation), subject to
the limitations of Section 423(b)(8) of the Internal Revenue Code. The price of
stock purchased under the 1999 Purchase Plan is 85% of the lower of the fair
market value of the Common Stock at the beginning or end of each offering period
or at the end of the offering period. Employees may end their participation at
any time during an offering period, and they will be refunded their payroll
deductions to date. Participation ends automatically upon termination of
employment with the Company.
Rights granted under the 1999 Purchase Plan are not transferable by a
participant other than by will, the laws of descent and distribution, or as
otherwise provided under the 1999 Purchase Plan. The 1999 Purchase Plan provides
that, in the event of a merger of the Company with or into another corporation
or a sale of substantially all of the Company's assets, each option shall be
assumed or an equivalent plan substituted by the successor corporation. If the
successor corporation refuses to assume or substitute for the option, the
offering period then in progress shall be shortened so that employees' rights to
purchase stock under the 1999 Purchase Plan are exercised prior to the merger or
sale of assets. The 1999 Purchase Plan will terminate in February 2009. The
Board has the authority to amend or terminate the 1999 Purchase Plan, except
that no such action may adversely affect any outstanding rights to purchase
stock under the 1999 Purchase Plan.
401(k) Plan. The Company maintains in a tax-qualified employee savings and
retirement plan (the "Company 401(k) Plan") which covers all of the Company's
employees who are at least 21 years of age. Pursuant to the Company 401(k) Plan,
eligible employees may defer up to 25% of their pre-tax earnings, subject to the
limitation under Section 415 of the Internal Revenue Code and Internal Revenue
Service's annual contribution limit. The Company 401(k) Plan permits additional
discretionary matching contributions by the Company on behalf of all
participants in the in such a percentage amount as may be determined annually by
the Board. To date, the Company has made no such matching contributions. The
Company 401(k) Plan is intended to qualify under Section 401 of the Internal
Revenue Code, so that contributions by employees or by the Company to the
Company 401(k) Plan, and income earned on plan contributions, are not taxable to
employees until withdrawn from the Company 401(k) Plan, and so that
contributions by the Company, if any, will be deductible by the Company when
made. The trustee under the Company 401(k) Plan invests the assets of the
Company 401(k) Plan at the direction of each participant in any of a number of
investment options.
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<PAGE> 55
CERTAIN TRANSACTIONS
EQUITY INVESTMENT TRANSACTIONS
In July, August and September 1996, the Company sold an aggregate of
2,615,680 shares of its Series C Preferred Stock ("Series C Preferred") at a
price per share of $2.50. In August and September 1997 and January 1998, the
Company sold an aggregate of 1,572,327 shares of its Series D Preferred Stock
("Series D Preferred") at a price per share of $3.18. In February and March
1998, the Company sold an aggregate of 1,895,370 shares of its Series E
Preferred Stock ("Series E Preferred") at a price per share of $5.40.
Simultaneously with the consummation of this offering, all shares of preferred
stock will be converted into shares of Common Stock. Listed below are those
directors, executive officers and stockholders who beneficially own five percent
or more of the Company's securities who participated in such financings. The
Company believes that the shares issued in these transactions were sold at the
then fair market value and that the terms of these transactions were no less
favorable than the Company could have obtained from unaffiliated third parties.
<TABLE>
<CAPTION>
SERIES C SERIES D SERIES E AGGREGATE CASH
STOCKHOLDER PREFERRED PREFERRED PREFERRED CONSIDERATION
----------- --------- --------- --------- --------------
<S> <C> <C> <C> <C>
Entities affiliated with Crosspoint 531,708 411,130 925,926 $7,636,664
Venture Partners(a)...................
Entities affiliated with El Dorado 531,708 411,130 485,185 5,256,662
Ventures(b)...........................
Greylock Equity Limited Partnership..... 480,584 371,599 437,963 4,748,145
Entities affiliated with U.S. Venture 1,040,000 150,405 -- 3,078,288
Partners(c)...........................
Jeffrey T. Webber....................... 6,000(d) 58,262(e) 46,296(f) 450,272
Thomas M. Lounibos...................... -- 45,785 -- 145,596
</TABLE>
- -------------------------
(a) Includes shares purchased by Crosspoint Venture Partners LS 1993, Crosspoint
1993 Entrepreneurs Fund and Crosspoint Venture Partners LS 1997. Each of
these funds has five general partners, each of whom shares voting and
investment power over the shares held by such funds. Richard W. Shapero, a
director of the Company, is a general partner of each of these entities. Mr.
Shapero disclaims beneficial ownership of the shares held by these funds,
except to the extent of his proportionate interest therein.
(b) Includes shares purchased by El Dorado Ventures III, L.P. and El Dorado
Technology IV, L.P. Each of these funds has four general partners, each of
whom shares voting and investment power over the shares held by such funds.
Shanda Bahles, a director of the Company, is a general partner of each of
these entities. Ms. Bahles disclaims beneficial ownership of the shares held
by these funds, except to the extent of her proportionate interest therein.
(c) Includes shares purchased by U.S. Venture Partners IV, L.P., Second Ventures
II, L.P., U.S.V.P. Entrepreneur Partners II, L.P. and 2180 Associates Fund.
Presidio Management Group IV, L.P. ("Presidio"), which is the general
partner of each of these entities, has five general partners, each of whom
shares voting and investment power over the shares held by Presidio.
(d) Includes (1) 4,000 shares held by Mr. Webber directly and (2) 2,000 shares
held by Mr. Webber's wife. Mr. Webber is a director of the Company.
(e) Includes (1) 51,973 shares held by The Entrepreneurs' Fund, L.P., whose
General Partner is BW Management LLC, of which Mr. Webber is one of the
managing directors, (2) 1,572 shares held by Mr. Webber's wife, (3) 1,572
shares held by Mr. Webber directly and (4) 3,145 shares held by the First
Trust Corporation fbo Jeffrey T. Webber, which is Mr. Webber's IRA account.
Mr. Webber is a director of the Company. Mr. Webber disclaims beneficial
ownership of the shares held by The Entrepreneurs' Fund, L.P., except to the
extent of his proportionate interest therein.
54
<PAGE> 56
(f) Includes (1) 39,352 shares held by The Entrepreneurs' Fund, L.P. and (2)
6,944 shares held by RBW Investments, LLC, of which Mr. Webber is the
Managing Director. Mr. Webber disclaims beneficial ownership of the shares
held by The Entrepreneurs' Fund, L.P. and RBW Investments, LLC, except to
the extent of his proportionate interest therein.
RESTRICTED STOCK PURCHASE AGREEMENTS
In February 1998, Ms. Walker, the Company's Executive Vice President,
Finance and Administration, and Chief Financial Officer, exercised two options
to purchase an aggregate of 180,000 shares of Common Stock and entered into
Notices of Early Exercise and Restricted Stock Purchase Agreements with respect
to such exercises. Ms. Walker paid the $2.90 exercise price per share for such
shares by delivery of a series of three year full-recourse promissory notes
bearing interest at the rate of 5.47% per annum. The notes are secured by the
shares of Common Stock purchased by Ms. Walker. As of December 31, 1998,
$548,499 in unpaid principal and interest was outstanding in the aggregate under
the notes.
ACQUISITION OF TALUS, INC.
In February 1998, the Company and Talus entered into an Agreement and Plan
of Reorganization whereby the Company acquired Talus for total consideration of
$1,170,000 in cash and 259,258 shares of Series E Preferred Stock. Michael P.
Venerable, the Company's Vice President, Professional Services, was Talus'
President at the time of the acquisition. Mr. Venerable received $571,051 in
cash and 109,919 shares of Series E Preferred as consideration for his shares of
Talus. In addition, in connection with the acquisition, Mr. Venerable entered
into an employment agreement (the "Venerable Agreement") with the Company.
Pursuant to the Venerable Agreement, Mr. Venerable received a salary of $123,000
and a bonus based upon performance milestones. The Company also granted Mr.
Venerable an option to purchase 150,000 shares of Common Stock at an exercise
price of $4.30 per share. Twenty percent of the shares subject to the option
vested on the first anniversary of the date of the Venerable Agreement, 20% will
vest on the second anniversary and 60% will vest on the third anniversary. In
the event of a Change of Control (as defined in the Venerable Agreement) of the
Company, the option will accelerate and become immediately exercisable if such
options are not assumed. If Mr. Venerable's options are assumed and he is
terminated for any reason other than for Cause (as defined in the Venerable
Agreement) or if he voluntarily terminates his employment for Good Reason (as
defined in the Venerable Agreement), after the Change of Control, the unvested
portion of the option will accelerate and become immediately exercisable. If Mr.
Venerable's employment is terminated for Cause or if he resigns for any reason
other than Good Reason, he has agreed not to engage in a Restricted Business (as
defined in the Venerable Agreement) or solicit any of the Company's employees
for three years.
EXECUTIVE CHANGE OF CONTROL POLICY
The Board has adopted an Executive Change of Control Policy (the "Policy")
applicable to key executives of the Company. The Policy provides that options
granted to key executives ("Key Executive Options") will be assumed upon a
Change of Control of the Company (as defined in the Policy). Furthermore, if a
key executive remains an employee at the time of the Change of Control, the
vesting of that individual's Key Executive Options will accelerate, and the
Company's right to repurchase will lapse, as to 50% of the unvested portion of
such options. If a key executive is terminated for any
55
<PAGE> 57
reason other than for Cause (as defined in the Policy) or terminates employment
for Good Reason (as defined in the Policy) during the one-year period after the
date of the Change of Control, then the remaining unvested portion of such Key
Executive Options will accelerate and become immediately exerciseable, and the
Company's right to repurchase the applicable portion of such shares will lapse.
TRANSACTIONS WITH ISAR
Klaus S. Luft, has agreed to join the Board as of the first meeting of the
Board following completion of the offering, is a general partner of ISAR. The
Company has entered into an agreement (the "ISAR Agreement") with ISAR, pursuant
to which ISAR established a German company, Magnolia II Vermogensverwaltung GmbH
("Magnolia"), to distribute and support the Company's products in Germany,
Austria and Switzerland (the "Territory"). The Company has entered into an
agreement with Magnolia pursuant to which Magnolia has the exclusive right
(other than with respect to value added resellers who have been or will be
granted worldwide distribution rights) to distribute the Company's products in
the Territory. Magnolia has agreed to pay the Company royalties on sales and
maintenance of the Company's products. The Company has a call option to acquire
Magnolia with cash, registrable securities or a combination of cash and
registrable securities, with the acquisition price determined according to the
date of the acquisition and Magnolia's revenues.
In May 1998, the Company and ISAR entered into a Common Stock Purchase
Agreement pursuant to which ISAR purchased 28,000 shares of the Company's Common
Stock for an aggregate purchase price of $120,960. In May 1998, the Company
granted ISAR a Warrant to purchase 22,000 shares of the Company's Common Stock
at an exercise price of $5.40 per share. Mr. Luft disclaims beneficial ownership
of the shares and Warrant held by ISAR except to the extent of his proportionate
interest therein.
OTHER TRANSACTIONS
The Company has entered into an Indemnification Agreement with each of its
executive officers and directors.
The Company has granted options to certain of its executive officers. See
"Management--Option Grants in Last Fiscal Year."
Holders of Preferred Stock are entitled to certain registration rights with
respect to the Common Stock issued or issuable upon conversion thereof. See
"Description of Capital Stock--Registration Rights."
The Company believes that all related-party transactions described above
were on terms no less favorable than could have been otherwise obtained from
unrelated third parties. All future transactions between the Company and its
principal officers, directors and affiliates will be approved by a majority of
the independent and disinterested members of the Board and will be on terms no
less favorable that could be obtained from unrelated third parties.
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<PAGE> 58
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of the Common Stock as of December 31, 1998 and as adjusted
to reflect the sale of Common Stock offered hereby, conversion of all
outstanding shares of Preferred Stock into shares of Common Stock upon
completion of this offering and the exercise of outstanding warrants which
expire or are required to be exercised upon completion of this offering for (1)
each person who is known by the Company to beneficially own more than five
percent of the Common Stock, (2) each of the Company's directors, (3) each of
the Named Officers and (4) all directors and executive officers as a group.
Unless otherwise indicated, the principal address of each of the stockholders
below is c/o Sagent Technology, Inc., 800 W. El Camino Real, Suite 300, Mountain
View, California 94040.
<TABLE>
<CAPTION>
PERCENTAGE
OWNED(A)(B)
SHARES OWNED -------------------
PRIOR TO THE BEFORE AFTER
OFFERING(A) OFFERING OFFERING
------------ -------- --------
<S> <C> <C> <C>
5% STOCKHOLDERS:
Entities affiliated with Crosspoint Venture
Partners(c).............................. 4,179,876 22.4% %
Entities affiliated with El Dorado
Ventures(d).............................. 3,739,135 20.0
Greylock Equity Limited Partnership(e)...... 3,379,034 18.1
Entities affiliated with U.S. Venture
Partners(f).............................. 1,190,405 6.4
DIRECTORS AND OFFICERS:
Kenneth C. Gardner(g)....................... 1,200,000 6.4
Jeffrey T. Webber(h)........................ 334,940 1.8
John E. Zicker(i)........................... 968,000 5.2
W. Virginia Walker(j)....................... 180,000 *
Perry S. Mizota(k).......................... 320,000 1.7
Thomas M. Lounibos(l)....................... 434,040 2.3
Richard W. Shapero(c)....................... 4,179,876 22.4
Shanda Bahles(d)............................ 3,739,135 20.0
All directors and officers as a group
(10 persons)(m).......................... 11,712,420 60.8
</TABLE>
- -------------------------
* Represents less than one percent of the total
(a) Assumes no exercise of the Underwriter's over-allotment option. Except
pursuant to applicable community property laws or as indicated in the
footnotes to this table, to the Company's knowledge, each stockholder
identified in the table possesses sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by such
stockholder.
(b) Percent of the outstanding shares of Common Stock, based on 18,669,377
shares outstanding as of December 31, 1998, treating as outstanding all
shares of Common Stock issuable on exercise of options exercisable within
60 days of December 31, 1998 held by the particular beneficial owner and
that are included in the first column.
(c) Principal address is The Pioneer Hotel Building, 2925 Woodside Road,
Woodside, CA 94062. Number of shares includes (1) 3,155,547 shares held by
Crosspoint Venture Partners LS 1993; (2) 925,926 shares held by Crosspoint
Venture Partners LS 1997; and (3) 98,403 shares held by Crosspoint 1993
Entrepreneurs Fund. Crosspoint Venture Partners has five general partners.
Each of these general partners shares voting and investment power over the
shares held by Crosspoint Venture Partners. Richard W. Shapero, a director
of the Company, is a general partner of Crosspoint Venture Partners. Mr.
Shapero disclaims beneficial ownership of the shares held by such entities
except to the extent of his proportionate pecuniary interest therein.
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<PAGE> 59
(d) Principal address is 2400 Sand Hill Road, Suite 100, Menlo Park, CA 94025.
Number of shares includes (1) 3,172,773 shares held by El Dorado Ventures
III L.P.; (2) 478,658 shares held by El Dorado Ventures IV, L.P.; (3)
81,177 shares held by El Dorado Technology IV, L.P.; and (4) 6,527 shares
held by El Dorado Technology '98, L.P. El Dorado Ventures has four general
partners. Each of these general partners shares voting and investment power
over the shares held by El Dorado Ventures. Shanda Bahles, a director of
the Company, is a general partner of El Dorado Ventures. Ms. Bahles
disclaims beneficial ownership of the shares held by such entities except
to the extent of her proportionate pecuniary interest therein.
(e) Principal address is 755 Page Mill Road, Suite A-100, Palo Alto, CA 94304.
(f) Principal address is 2180 Sand Hill Road, Suite 300, Menlo Park, CA 94025.
Number of shares includes (1) 1,026,129 shares held by U.S. Venture
Partners IV, L.P.; (2) 124,993 shares held by Second Ventures II, L.P.; (3)
35,712 shares held by U.S.V.P. Entrepreneur Partners II, L.P.; and (4)
3,571 shares held by 2180 Associates Fund.
(g) Includes (1) 925,000 shares registered in the name of Kenneth C. Gardner
and Patricia T. Gardner, Trustees of the Gardner Family Trust u/d/t dated
September 6, 1996; (2) 100,000 shares registered in the name of Delaware
Charter Guarantee & Trust Co., Trustee fbo Kenneth C. Gardner, IRA; (3)
75,000 shares registered in the name of trusts; and (4) an option, granted
to Kenneth C. Gardner, to purchase 100,000 shares exercisable within 60
days of December 31, 1998.
(h) Includes (1) 207,692 shares registered in the name of Jeffrey T. Webber;
(2) 91,325 shares registered in the name of The Entrepreneurs' Fund, L.P.;
(3) 32,778 shares registered in the name of Mr. Webber's wife; and (4)
3,145 shares registered in the name of First Trust Corporation fbo Jeffrey
T. Webber.
(i) Includes (1) 788,000 shares registered in the name of John E. Zicker; (2)
100,000 shares registered in the name of Delaware Charter Guarantee & Trust
Co., Trustee fbo John E. Zicker, IRA; and (3) an option, granted to John E.
Zicker, to purchase 80,000 shares, exercisable within 60 days of December
31, 1998.
(j) Includes 138,750 shares which are subject to a repurchase option held by
the Company as of December 31, 1998.
(k) Includes an option to purchase 50,000 shares, exercisable within 60 days of
December 31, 1998.
(l) Includes (1) an option to purchase an aggregate of 158,255 shares
exercisable within 60 days of December 31, 1998 and (2) 45,575 shares which
are subject to a repurchase option held by the Company as of December 31,
1998.
(m) Includes the directors and officers as listed and (1) an option, granted to
Kenneth C. Holcomb, to purchase 46,510 shares, exercisable within 60 days
of December 31, 1998; (2) 109,919 shares registered in the name of Michael
P. Venerable; (3) an option, granted to Mr. Venerable, to purchase 150,000
shares, exercisable within 60 days of December 31, 1998; (4) 28,000 shares
registered in the name of ISAR; and (5) a warrant, granted to ISAR, to
purchase 22,000 shares, exercisable within 60 days of December 31, 1998.
58
<PAGE> 60
DESCRIPTION OF CAPITAL STOCK
Upon the closing of this offering, the authorized capital stock of the
Company will consist of 70,000,000 shares of Common Stock, $0.001 par value, and
5,000,000 shares of Preferred Stock, $0.001 par value.
The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, the provisions of the Amended Certificate of Incorporation,
which is included as an exhibit to the Registration Statement of which this
Prospectus is a part, and by the provisions of applicable law.
COMMON STOCK
After giving effect to the conversion of all previously outstanding
preferred stock into shares of Common Stock, as of December 31, 1998, there were
18,669,377 shares of Common Stock outstanding held of record by approximately
144 stockholders. There will be shares of Common Stock
outstanding (assuming no exercise of the Underwriters' over-allotment option and
no exercise of certain outstanding options or warrants) after giving effect to
the sale of Common Stock in the offering.
The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to any outstanding shares of Preferred Stock,
the holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared by the Board out of funds legally available for the
payment of dividends. See "Dividend Policy." In the event of a liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets remaining after payment of liabilities
and liquidation preferences of any outstanding shares of Preferred Stock.
Holders of Common Stock have no preemptive rights or rights to convert their
Common Stock into any other securities. There are no redemption or sinking fund
provisions applicable to the Common Stock. All outstanding shares of Common
Stock are fully paid and non-assessable, and the shares of Common Stock to be
issued in the offering will be fully paid and non-assessable.
PREFERRED STOCK
Pursuant to the Amended Certificate of Incorporation the Board has the
authority, without further action by the stockholders, to issue up to 5,000,000
shares of Preferred Stock in one or more series and to fix the designations,
powers, preferences, privileges and relative participating, optional or special
rights and the qualifications, limitations or restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of redemption and
liquidation preferences, any or all of which may be greater than the rights of
the Common Stock. The Board, without stockholder approval, can issue Preferred
Stock with voting, conversion or other rights that could adversely affect the
voting power and other rights of the holders of Common Stock. Preferred Stock
could thus be issued quickly with terms calculated to delay or prevent a change
in control of the Company or make removal of management more difficult.
Additionally, the issuance of Preferred Stock may have the effect of decreasing
the market price of the Common Stock, and may adversely affect the voting and
other rights of the holders of Common Stock. At present, there are no shares of
Preferred Stock outstanding, and the Company has no plans to issue any Preferred
Stock.
59
<PAGE> 61
COMMON STOCK WARRANTS
Upon completion of the offering, the Company will have three warrants
outstanding to purchase an aggregate of 18,306 shares of Common Stock,
exerciseable as follows: (1) 5,539 shares at an exercise price of $6.50 per
share; (2) 9,433 shares at an exercise price of $3.18 per share; and (3) 3,334
shares at an exercise price of $5.40 per share. These warrants expire 10 years
from the date of execution or five years from the effective date of the
offering, whichever is later.
REGISTRATION RIGHTS
Upon completion of the offering, the holders of an aggregate of
approximately 14,800,000 shares of Common Stock will be entitled to certain
rights with respect to the registration of such shares under the Securities Act.
Under the terms of certain registration rights agreements, if the Company
proposes to register any of its securities under the Securities Act of 1933, as
amended (the "Securities Act"), either for its own account or for the account of
other security holders exercising registration rights, such holders are entitled
to notice of such registration and are entitled to include shares of Common
Stock in the registration. The rights are subject to certain conditions and
limitations, among them the right of the underwriters of an offering subject to
the registration to limit the number of shares included in such registration.
Holders of these rights may also require the Company to file a registration
statement under the Securities Act at its expense with respect to their shares
of Common Stock, and the Company is required to use its best efforts to effect
such registration, subject to certain conditions and limitations. Furthermore,
such holders may require the Company to file additional registration statements
on Form S-3, subject to certain conditions and limitations.
DELAWARE ANTI-TAKEOVER LAW AND CERTAIN CHARTER AND BYLAWS PROVISIONS
Delaware Anti-Takeover Statute. The Company is subject to Section 203 of
the Delaware General Corporation Law ("Section 203"), which, subject to certain
exceptions, prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years
following the date that such stockholder became an interested stockholder,
unless: (1) prior to such date, the board of directors of the corporation
approved either the business combination or the transaction that resulted in the
stockholder becoming an interested stockholder; (2) upon consummation of the
transaction that resulted in the stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares outstanding those shares owned (A)
by persons who are directors and officers and (B) by employee stock plans in
which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer; or (3) on or subsequent to such date, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of
at least 66 2/3% of the outstanding voting stock that is not owned by the
interested stockholder.
Section 203 defines business combination to include: (1) any merger or
consolidation involving the corporation and the interested stockholder; (2) any
sale, transfer, pledge or other disposition of 10% or more of the assets of the
corporation involving the interested stockholder; (3) subject to certain
exceptions, any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested stockholder;
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<PAGE> 62
(4) any transaction involving the corporation that has the effect of increasing
the proportionate share of the stock of any class or series of the corporation
beneficially owned by the interested stockholder; or (5) the receipt by the
interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation. In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
Amended Certificate of Incorporation. In February 1999, the Company
submitted to its stockholders for approval the Amended Certificate of
Incorporation, to provide: (1) for the authorization of the Board to issue,
without further action by the stockholders, up to 5,000,000 shares of Preferred
Stock in one or more series and to fix the rights, preferences, privileges and
restrictions thereof; (2) that any action required or permitted to be taken by
stockholders of the Company must be effected at a duly called annual or special
meeting of the stockholders and may not be effected by a consent in writing; (3)
for a classified Board; (4) that vacancies on the Board, including newly created
directorships, can be filled only be a majority of the directors then in office;
(5) that directors of the Company may be removed only for cause, and (6) for the
elimination of cumulative voting effective upon such time as the Company ceases
to be subject to Section 2115 of the California Corporations Code.
Bylaws. In January 1999, the Board approved certain amendments to the
Bylaws to provide that special meetings of stockholders of the Company may be
called only by the Chairman of the Board, the President of the Company or the
Board.
These provisions are intended to enhance the likelihood of continuity and
stability in the composition of the Board and in the policies formulated by the
Board and to discourage certain types transactions that may involve an actual or
threatened change of control of the Company. These provisions also are designed
to reduce the vulnerability of the Company to an unsolicited proposal for a
takeover of the Company that does not contemplate the acquisition of all of its
outstanding shares or an unsolicited proposal for the restructuring or sale of
all or part of the Company. Such provisions, however, could discourage potential
acquisition proposals and could delay or prevent a change in control of the
Company. Such provisions may also have the effect of preventing changes in the
management of Sagent.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is
. 's address is , and its
telephone number is .
LISTING
The Company has applied to list its Common Stock on the Nasdaq National
Market under the trading symbol "SGNT". The Company has not applied to list its
Common Stock on any other exchange or quotation system.
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<PAGE> 63
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no market for the Common Stock.
Future sales of substantial amounts of Common Stock in the public market could
adversely affect the prevailing market price from time to time. Furthermore,
because only a limited number of shares will be available for sale shortly after
this offering, because of certain contractual and legal restrictions on resale
(as described below), sales of substantial amounts of Common Stock in the public
market after the restrictions lapse could adversely affect the prevailing market
price and the Company's ability to raise equity capital in the future.
Upon completion of the offering, the Company will have outstanding an
aggregate of shares of Common Stock, assuming no exercise of the
Underwriters' over-allotment option and no exercise of outstanding options or
outstanding warrants after December 31, 1998. Of these outstanding shares, the
18,669,377 shares sold in the offering will be freely tradeable without
restriction or further registration under the Securities Act, unless purchased
by "affiliates" of the Company as that term is defined in Rule 144 under the
Securities Act. The remaining shares of Common Stock outstanding
upon completion of the offering and held by existing stockholders will be
"restricted securities," as that term is defined in Rule 144 under the
Securities Act ("Restricted Shares"). Restricted Shares may be sold in the
public market only if registered or if they qualify for an exemption from
registration under Rules 144, 144(k) or 701 promulgated under the Securities
Act, which rules are summarized below, or another exemption therefrom. Sales of
the Restricted Shares in the public market, or the availability of such shares
for sale, could adversely affect the market price of the Common Stock.
All officers, directors and certain other holders of Common Stock have
entered into contractual "lock-up" agreements providing that they will not
offer, sell, contract to sell or grant any option to purchase or otherwise
dispose of shares of Common Stock owned by them or that could be purchased by
them through the exercise of options for a period of 180 days after the date of
this prospectus without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. As a result of these contractual restrictions,
notwithstanding possible earlier eligibility for sale under the provisions of
Rules 144, 144(k) and 701, additional shares will be available for sale in the
public market as follows: (1) no shares of Common Stock will be eligible for
sale as of the effective date of this offering, (2) no additional shares will be
eligible for sale beginning 90 days after the effective date of this offering,
and (3) 18,404,766 additional shares will be eligible for sale beginning 180
days after the effective date of this offering, subject in some cases to certain
volume limitations. Of the 264,611 remaining Restricted Shares, (1) 236,611
shares are subject to a repurchase option of the Company in the event of
termination of employment and (2) 28,000 shares will not be eligible for sale
pursuant to Rule 144 until the expiration of a one-year holding period in
December 1999.
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned Restricted Shares for at least one year, including
persons who may be deemed to be "affiliates" of the Company, would be entitled
to sell within any three-month period a number of shares that does not exceed
the greater of: (1) one percent of the number of shares of Common Stock then
outstanding (which will equal approximately shares
immediately after this offering) or (2) the average weekly trading volume of the
Common Stock as reported through the Nasdaq National Market during the four
calendar weeks preceding the filing of a Form 144 with respect to such sale.
Sales under Rule 144 are also subject to certain manner of sale provisions and
notice
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<PAGE> 64
requirements and to the availability of current public information about the
Company. Under Rule 144(k), a person who is not deemed to have been an affiliate
of the Company at any time during the 90 days preceding a sale, and who has
beneficially owned for at least two years the Restricted Shares proposed to be
sold (including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.
Subject to certain limitations on the aggregate offering price of a
transaction and certain other conditions, Rule 701 permits resales of shares
issued prior to the date an issuer becomes subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
pursuant to certain compensatory benefit plans and contracts. Such resales may
be made commencing 90 days after the issuer becomes subject to the reporting
requirements of the Exchange Act, in reliance upon Rule 144 but, in certain
cases, without compliance with certain restrictions, including the holding
period requirements. In addition, the Securities and Exchange Commission has
indicated that Rule 701 will apply to typical stock options granted by an issuer
before it becomes subject to the reporting requirements of the Exchange Act,
along with the shares acquired upon exercise of such options, including
exercises after the date the issuer becomes so subject. Securities issued in
reliance on Rule 701 are restricted securities and, subject to the contractual
restrictions described above, beginning 90 days after the date of this
Prospectus, may be sold by persons other than affiliates subject only to the
manner of sale provisions of Rule 144, and by affiliates under Rule 144 without
compliance with its one-year minimum holding period requirement.
The Company has agreed not to sell or otherwise dispose of any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, or enter into any swap or similar agreement that transfers, in
whole or in part, the economic risk of ownership of the Common Stock, for a
period of 180 days after the date of this Prospectus, without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation, subject to
certain limited exceptions.
The Company intends to file a registration statement under the Securities
Act covering the shares of Common Stock subject to outstanding options or
reserved for issuance under the Amended 1995 Plan, 1998 Plan, 1999 Purchase Plan
and the Director Plan. Such registration statement is expected to be filed as
early as the effectiveness of the registration statement covering the shares of
Common Stock offered in this offering and will automatically become effective
upon filing. Accordingly, shares registered under such registration statement
will, subject to Rule 144 volume limitations applicable to affiliates and the
expiration of a 180-day lockup period, be available for sale in the open market,
except to the extent that such shares are subject to vesting restrictions with
the Company or the contractual restrictions described above.
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<PAGE> 65
UNDERWRITING
Subject to the terms and subject to conditions contained in an Underwriting
Agreement dated , 1999 (the "Underwriting
Agreement"), the underwriters named below (the "Underwriters"), who are
represented by Donaldson, Lufkin & Jenrette Securities Corporation, Hambrecht &
Quist LLC and Piper Jaffray Inc. (the "Representatives"), have severally agreed
to purchase from the Company the respective number of shares of Common Stock set
forth opposite their names below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS: SHARES
------------- ---------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.........
Hambrecht & Quist LLC.......................................
Piper Jaffray Inc. .........................................
-------
Total.............................................
=======
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to approval by their counsel of certain legal matters
and to certain other conditions. The Underwriters are obligated to purchase and
accept delivery of all the shares of Common Stock offered hereby (other than
those shares covered by the over-allotment option described below) if any are
purchased.
The Underwriters initially propose to offer the shares of Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this prospectus and in part to certain dealers (including the
Underwriters) at such price less a concession not in excess of $ per share.
The Underwriters may allow, and such dealers may re-allow, to certain other
dealers a concession not in excess of $ per share. After the initial
offering of the Common Stock, the public offering price and other selling terms
may be changed by the Representatives at any time without notice. The
Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.
DLJdirect Inc., an affiliate of Donaldson, Lufkin & Jenrette Securities
Corporation and a member of the selling group, is facilitating the distribution
of the shares sold in the offering over the Internet. The Underwriters have
agreed to allocate a limited number of shares to DLJdirect Inc. for sale to its
brokerage account holders.
Sagent has granted to the Underwriters an option, exercisable for 30 days
after the date of this prospectus, to purchase, from time to time, in whole or
in part, up to an aggregate of additional shares of Common
Stock at the initial public offering price less underwriting discounts and
commission. The Underwriters may exercise such option solely to cover
over-allotments, if any, made in connection with the offering. To the extent
that the Underwriters exercise such option, each Underwriter will become
obligated, subject
64
<PAGE> 66
to certain conditions, to purchase its pro rata portion of such additional
shares based on such Underwriters' percentage underwriting commitment as
indicated in the above table.
Sagent has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in respect thereof.
Each of Sagent, its executive officers, directors, stockholders and option
holders has agreed, subject to certain exceptions, not to (1) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(1) or (2) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise) for a period of 180 days after the date of
this prospectus without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. In addition, during such 180-day period, Sagent
has also agreed not to file any registration statement with respect to, and each
of its executive officers, directors and certain stockholders of Sagent has
agreed not to make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock without the prior written consent
of Donaldson, Lufkin & Jenrette Securities Corporation.
Prior to the offering, there has been no established trading market for the
Common Stock. The initial public offering price of the shares of Common Stock
offered hereby will be determined by negotiation among Sagent and the
Representatives. The factors to be considered in determining the initial public
offering price include the history of and the prospects for the industry in
which Sagent competes, the past and present operations of Sagent, the historical
results of operations of Sagent, the prospects for future earnings of Sagent,
the recent market prices of securities of generally comparable companies, and
the general condition of the securities markets at the time of the offering.
Other than in the United States, no action has been taken by Sagent or the
Underwriters that would permit a public offering of the shares of Common Stock
offered hereby in any jurisdiction where action for that purpose is required.
The shares of Common Stock offered hereby may not be offered or sold, directly
or indirectly, nor may this prospectus or any other offering material or
advertisements in connection with the offer and sale of any such shares of
Common Stock be distributed or published in any jurisdiction, except under
circumstances that will result in compliance with the applicable rules and
regulations of such jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and observe any restrictions
relating to the offering and the distribution of this prospectus. This
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any shares of Common Stock offered hereby in any jurisdiction in which such
an offer or a solicitation is unlawful.
In connection with the offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may over-allot the offering,
creating a syndicate short position. The Underwriters may bid for and stabilize
the price of the Common Stock. In addition, the underwriting syndicate may
reclaim selling concessions from syndicate members and selected dealers if they
repurchase previously distributed Common Stock in syndicate
65
<PAGE> 67
covering transactions, in stabilizing transactions or otherwise. These
activities may stabilize or maintain the market price of the Common Stock above
independent market levels. The Underwriters are not required to engage in these
activities, and may end any of these activities at any time.
LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of the
shares of Common Stock offered hereby will be passed upon for the Company by
Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California. Arthur F. Schneiderman, a member of Wilson Sonsini Goodrich &
Rosati, is Secretary of the Company. Mr. Schneiderman and investment
partnerships, of which certain members of Wilson Sonsini Goodrich & Rosati are
general partners, beneficially own an aggregate of 180,445 shares of the
Company's Common Stock. Certain legal matters in connection with this offering
will be passed upon for the Underwriters by Brobeck Phleger & Harrison LLP, Palo
Alto, California.
EXPERTS
The consolidated balance sheets as of December 31, 1998 and 1997 and the
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1998 for Sagent
Technology, Inc. included in this Prospectus and Registration Statement, have
been included herein in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given upon the authority of such firm as experts in
accounting and auditing.
The balance sheets as of December 31, 1997 and 1996 and the statements of
operations and retained earnings and cash flows for the two years in the period
ended December 31, 1997 for Talus, Incorporated included in this Prospectus and
Registration Statement, have been included herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given upon the authority of
such firm as experts in accounting and auditing.
66
<PAGE> 68
AVAILABLE INFORMATION
We have filed with the SEC, Washington, D.C. 20549, under the Securities
Act a registration statement on Form S-1 relating to the Common Stock offered
hereby. This prospectus does not contain all of the information set forth in the
registration statement and the exhibits and schedules thereto. For further
information with respect to Sagent and the shares we are offering pursuant to
this prospectus you should refer to the registration statement, including the
exhibits and schedules thereto. Statements contained in this prospectus as to
the contents of any contract, agreement or other document referred to are not
necessarily complete, and you should refer to the copy of such contract or other
document filed as an exhibit to the registration statement or such other
document. You may inspect a copy of the registration statement without charge at
the Public Reference Section of the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at the SEC's regional offices at 5670 Wilshire
Boulevard, 11th Floor, Los Angeles, California 90036. The SEC maintains an
Internet site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
SEC's World Wide Web address is www.sec.gov.
Sagent intends to furnish holders of the Common Stock with annual reports
containing, among other information, audited financial statements certified by
an independent public accounting firm and quarterly reports containing unaudited
condensed financial information for the first three quarters of each fiscal
year. Sagent intends to furnish such other reports as it may determine or as may
be required by law.
67
<PAGE> 69
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SAGENT TECHNOLOGY, INC.
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets as of December 31, 1997 and
1998...................................................... F-3
Consolidated Statements of Operations for the years ended
December 31, 1996, 1997 and 1998.......................... F-4
Consolidated Statements of Stockholders' Equity as of
December 31, 1997
and 1998.................................................. F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1997 and 1998.......................... F-6
Consolidated Notes to Financial Statements.................. F-7
TALUS, INCORPORATED
Report of Independent Accountants........................... F-24
Balance Sheets as of December 31, 1996 and 1997............. F-25
Statements of Operations and Retained Earnings for the years
ended December 31, 1996 and 1997.......................... F-26
Statements of Cash Flows for the years ended December 31,
1996 and 1997............................................. F-27
Notes to Financial Statements............................... F-28
Pro Forma Consolidated Financial Statements (unaudited)..... F-33
Pro Forma Consolidated Statements of Operations for the year
ended December 31, 1998 (unaudited)....................... F-34
Notes to Pro Forma Consolidated Financial Statements
(unaudited)............................................... F-35
</TABLE>
F-1
<PAGE> 70
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of
Sagent Technology, Inc.:
In our opinion, the accompanying consolidated balance sheets and the
related statements of operations and stockholders' equity and cash flows present
fairly, in all material respects, the financial position of Sagent Technology,
Inc. and its subsidiaries at December 31, 1997 and 1998, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
San Jose, California
January 27, 1999
F-2
<PAGE> 71
SAGENT TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
PRO FORMA
STOCKHOLDERS'
EQUITY
DECEMBER 31, DECEMBER 31,
------------------- -------------
1997 1998 1998
-------- -------- -------------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.................... $ 3,813 $ 3,093
Accounts receivable, net of allowance for
doubtful accounts of $450 in 1997 and $508
in 1998................................... 1,603 5,376
Prepaid assets............................... 220 832
-------- --------
Total current assets...................... 5,636 9,301
Property and equipment, net.................. 1,396 3,044
Other assets................................. 153 851
-------- --------
Total assets.............................. $ 7,185 $ 13,196
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................. $ 512 $ 1,478
Accrued liabilities.......................... 1,383 4,216
Deferred revenue............................. 1,077 1,304
Current portion of capital lease
obligations............................... 463 1,181
-------- --------
Total current liabilities................. 3,435 8,179
Long-term portion of capital lease
obligations............................... 627 3,346
-------- --------
Total liabilities......................... 4,062 11,525
-------- --------
Commitments and contingencies (Note 5)
STOCKHOLDERS' EQUITY:
Convertible preferred stock, par value $.001
per share:
Authorized: 13,056 shares in 1997 and 15,556
in 1998;
Issued and outstanding: 12,390 shares in 1997
and 14,544 shares in 1998 and no pro forma
shares (unaudited)........................ 12 15 --
(Liquidation value of $29,554 at December 31,
1998)
Common Stock, par value $.001 per share:
Authorized: 20,000 shares in 1997 and 25,000
shares in 1998;
Issued and outstanding: 3,249 shares in 1997,
4,125 shares in 1998 and 18,495 pro forma
shares (unaudited)........................ 3 4 19
Additional paid-in capital................... 18,033 30,699 30,699
Notes receivable from stockholder............ (522) (522)
Cumulative translation adjustment............ 101 101
Accumulated deficit.......................... (14,925) (28,626) (28,626)
-------- -------- --------
Total stockholders' equity................ 3,123 1,671 $ 1,671
-------- -------- --------
Total liabilities and stockholders'
equity.................................. $ 7,185 $ 13,196
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 72
SAGENT TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1996 1997 1998
-------- -------- ---------
<S> <C> <C> <C>
REVENUES, NET:
Licenses...................................... $ 240 $ 5,728 $ 10,459
Services...................................... 39 1,350 6,584
------- ------- --------
Total revenues, net........................ 279 7,078 17,043
------- ------- --------
COST OF REVENUES:
Licenses...................................... 120 194 143
Services...................................... 127 679 4,923
------- ------- --------
Total cost of revenues..................... 247 873 5,066
------- ------- --------
Gross profit.................................... 32 6,205 11,977
------- ------- --------
OPERATING EXPENSES:
Sales and marketing........................... 2,727 5,929 12,037
Research and development...................... 3,425 4,969 6,013
General and administrative.................... 1,111 2,215 5,186
Acquired in-process technology (Note 7)....... 2,425
------- ------- --------
Total operating expenses................... 7,263 13,113 25,661
------- ------- --------
Loss from operations............................ (7,231) (6,908) (13,684)
Interest expense................................ (65) (191) (207)
Other income.................................... 257 199 190
------- ------- --------
Net loss........................................ $(7,039) $(6,900) $(13,701)
======= ======= ========
Historical basic and diluted net loss per
share......................................... $ (2.67) $ (2.41) $ (3.47)
======= ======= ========
Number of shares used in calculation of
historical basic and diluted net loss per
share......................................... 2,637 2,860 3,951
Pro forma net loss per share, basic and diluted
(unaudited)................................... $ (0.74)
========
Shares used in computing pro forma net loss per
share, basic and diluted (unaudited).......... 18,495
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 73
SAGENT TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CONVERTIBLE
PREFERRED STOCK COMMON STOCK ADDITIONAL CUMULATIVE STOCKHOLDERS
--------------- --------------- PAID-IN TRANSLATION NOTE ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL ADJUSTMENT RECEIVABLE DEFICIT
------ ------ ------ ------ ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES, DECEMBER 31, 1995............. 8,122 $ 8 2,625 $2 $ 6,136 $ $ $ (986)
Issuance of Common Stock at $.09
per share........................... 13 1
Issuance of Series C Preferred Stock
at $2.50 per share for cash, net of
issuance costs of $16,483........... 2,616 3 6,525
Repurchase of Common Stock at $.045
per share........................... (18) (1)
Stock options exercised............... 14 1
Net loss.............................. (7,039)
------ --- ----- -- ------- ---- ----- --------
BALANCES, DECEMBER 31, 1996............. 10,738 11 2,634 2 12,662 -- -- (8,025)
Issuance of Series C Preferred Stock
at $2.50 per share for cash......... 79 198
Issuance of Series D Preferred Stock
at $3.18 per share for cash, net of
issuance costs of $14,856........... 1,573 1 4,983
Stock options exercised............... 615 1 67
Issuance of Series C Preferred Stock
warrant............................. 23
Issuance of Common Stock warrant...... 100
Net loss.............................. (6,900)
------ --- ----- -- ------- ---- ----- --------
BALANCES, DECEMBER 31, 1997............. 12,390 12 3,249 3 18,033 -- -- (14,925)
Issuance of Series D Preferred Stock
at $3.18 per share for cash, net of
issuance costs of $12,924........... 45 132
Issuance of Series E Preferred Stock
at $5.40 per share for cash, net of
issuance costs of $7,821............ 2,155 3 11,625
Stock options exercised............... 715 1 235
Repurchase of Series C Preferred Stock
at $2.50 per share.................. (40) (100)
Repurchase of Series D Preferred Stock
at $3.18 per share.................. (6) (18)
Repurchase of Common Stock............ (57) (20)
Issuance of Series E Preferred Stock
warrant............................. 18
Issuance of Common Stock warrants..... 96
Exercise of Common Stock options at
$5.50 per share..................... 10 55
Cumulative translation adjustment..... 101
Issuance of notes receivable for
Common Stock........................ 180 522 (522)
Exercise of stock purchase right...... 28 121
Net loss.............................. (13,701)
------ --- ----- -- ------- ---- ----- --------
BALANCES, DECEMBER 31, 1998............. 14,544 $15 4,125 $4 $30,699 $101 $(522) $(28,626)
====== === ===== == ======= ==== ===== ========
<CAPTION>
STOCKHOLDERS'
EQUITY
-------------
<S> <C>
BALANCES, DECEMBER 31, 1995............. $ 5,160
Issuance of Common Stock at $.09
per share........................... 1
Issuance of Series C Preferred Stock
at $2.50 per share for cash, net of
issuance costs of $16,483........... 6,527
Repurchase of Common Stock at $.045
per share........................... (1)
Stock options exercised............... 1
Net loss.............................. (7,039)
--------
BALANCES, DECEMBER 31, 1996............. 4,649
Issuance of Series C Preferred Stock
at $2.50 per share for cash......... 198
Issuance of Series D Preferred Stock
at $3.18 per share for cash, net of
issuance costs of $14,856........... 4,984
Stock options exercised............... 68
Issuance of Series C Preferred Stock
warrant............................. 23
Issuance of Common Stock warrant...... 100
Net loss.............................. (6,899)
--------
BALANCES, DECEMBER 31, 1997............. 3,123
Issuance of Series D Preferred Stock
at $3.18 per share for cash, net of
issuance costs of $12,924........... 132
Issuance of Series E Preferred Stock
at $5.40 per share for cash, net of
issuance costs of $7,821............ 11,628
Stock options exercised............... 236
Repurchase of Series C Preferred Stock
at $2.50 per share.................. (100)
Repurchase of Series D Preferred Stock
at $3.18 per share.................. (18)
Repurchase of Common Stock............ (20)
Issuance of Series E Preferred Stock
warrant............................. 18
Issuance of Common Stock warrants..... 96
Exercise of Common Stock options at
$5.50 per share..................... 55
Cumulative translation adjustment..... 101
Issuance of notes receivable for
Common Stock........................ --
Exercise of stock purchase right...... 121
Net loss.............................. (13,701)
--------
BALANCES, DECEMBER 31, 1998............. $ 1,671
========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 74
SAGENT TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------------------------
1996 1997 1998
------- ------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net loss.......................................... $(7,039) $(6,900) $(13,701)
Adjustments to reconcile net loss to net cash used
in operating activities:
Acquired in-process technology............... -- -- 2,425
Depreciation and amortization................ 268 835 1,445
Fair value of stock warrants issued.......... 123 114
Change in operating assets and liabilities,
net of acquisition:
Accounts receivable..................... (152) (1,451) (3,773)
Prepaid assets.......................... (67) (99) (550)
Other assets............................ (105) 16 (1,011)
Accounts payable........................ 513 (72) 966
Accrued liabilities..................... 221 1,136 2,833
Deferred revenue........................ 51 1,027 227
------- ------- --------
Net cash used in operating activities............... (6,310) (5,385) (11,025)
------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturity of restricted investments................ 26 150 --
Purchase of restricted investments................ (150) --
Purchase of property and equipment................ (1,143) (1,072) (2,696)
Acquisition of Talus, Incorporated................ -- -- (1,170)
------- ------- --------
Net cash used in investing activities............... (1,267) (922) (3,866)
------- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from capital lease financings............ 738 650 4,103
Payments of principal under capital lease
obligations.................................... (139) (356) (666)
Proceeds from issuance of Preferred Stock, net of
issuance costs................................. 6,527 5,183 10,360
Repurchase of Common Stock........................ (1) -- (20)
Repurchase of Preferred Stock..................... -- -- (118)
Proceeds from issuance of Common Stock............ 2 68 411
------- ------- --------
Net cash provided by financing activities........... 7,127 5,545 14,070
Effect of exchange rate changes in cash........ -- -- 101
------- ------- --------
Net decrease in cash and cash equivalents........... (450) (762) (720)
Cash and cash equivalents, beginning of year........ 5,025 4,575 3,813
------- ------- --------
Cash and cash equivalents, end of year.............. $ 4,575 $ 3,813 $ 3,093
======= ======= ========
Supplemental disclosure of cash flow information:
Cash payments for interest........................ $ 65 $ 184 $ 191
Supplemental non-cash financing activities:
Issuance of Preferred Stock warrants.............. -- 23 18
Issuance of Common Stock warrants................. -- 100 96
Issuance of Common Stock for notes and interest
receivable..................................... -- -- 522
Liabilities assumed in connection with acquisition
of Talus, Incorporated:
Fair value of assets acquired..................... 3,526
Cash paid......................................... (1,170)
Preferred Stock issued............................ (1,400)
--------
Liabilities assumed............................ $ 956
========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE> 75
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1. FORMATION AND BUSINESS OF THE COMPANY
Sagent Technology, Inc. (the "Company") develops, markets and supports
software designed to address organizations' information access, analysis, and
delivery needs.
The Company was incorporated under the laws of the State of California in
April 1995 under the name of Savant Software, Inc. In June 1995, the Company
changed its name to Sagent Technology, Inc. The Company was reincorporated under
the laws of the State of Delaware in September 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Sagent
Technology, Inc. and its wholly-owned subsidiaries, Sagent Technology Japan KK
and Sagent Technology (Canada), Inc. All significant intercompany accounts and
transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
FOREIGN CURRENCY TRANSLATION
The functional currency of the Company's subsidiaries is the local
currency. Accordingly, the Company applies the current rate method to translate
the subsidiaries' financial statements into U.S. dollars. Translation
adjustments are included as a separate component of stockholders' equity in the
accompanying consolidated financial statements.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original or
remaining maturity of three months or less at the time of purchase to be cash
equivalents.
BUSINESS RISK AND CONCENTRATION OF CREDIT RISK
The Company operates in one segment and its revenue is attributable to the
sale of one product line and related maintenance, consulting and training
services. The Company's future success will depend upon its ability to continue
to improve its product and to develop new products to meet diverse and evolving
customer demands.
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of temporary cash investments
(including money market accounts). The Company places its temporary cash
investments with two major financial institutions. The Company maintains
allowances for potential credit losses and such losses to date have been within
management's expectations. There were no customers with
F-7
<PAGE> 76
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
balances due to the Company in excess of 10% of aggregate accounts receivable at
December 31, 1998.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Carrying amounts of certain of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable,
accrued expenses and other liabilities, approximate fair value due to their
short maturities. Based upon borrowing rates currently available to the Company
for loans with similar terms, the carrying value of capital lease obligations
approximates fair value.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost and depreciated on a
straight-line basis over the estimated useful lives of the related assets,
generally two to five years. Leased assets are amortized on a straight-line
basis over the lesser of the estimated useful life or the lease term. Gains and
losses upon asset disposal are taken into income in the year of disposition.
REVENUE RECOGNITION
The Company's revenues are derived from two sources, product license
revenues and service revenues. License revenues are derived from product sales
to end users, resellers and distributors and enterprise application vendors as
well as royalties from enterprise application vendors. License revenues are
based upon the number and capacity of servers on which a product is installed,
as well as on a per user basis. Service revenues are derived from providing
consulting and training, maintenance and support services to end users.
The Company recognizes revenues in accordance with the American Institute
of Certified Public Accountants Statement of Position No. 97-2. License revenues
from sales to end users are recognized upon shipment of the product, if a signed
contract exists, the fee is fixed and determinable and collection is deemed
probable. If an acceptance period is provided, revenue is recognized upon the
earlier of customer acceptance or the expiration of that period. The Company
recognizes royalty as revenues based on an enterprise application vendor's
sell-through of the Company's products. Fees for services are charged separately
from licenses. Service revenues from consulting and training are recognized upon
completion of the work to be performed. Revenues from maintenance and support
agreements which includes product updates are deferred and recognized on a
straight-line basis as service revenues over the term of the related agreement,
which is typically one year.
The Company performs ongoing credit evaluations of its customers' financial
condition and does not require collateral. The Company maintains allowances for
potential credit losses and the amount of such losses have been within
management's expectations.
ADVERTISING
The Company expenses advertising costs as incurred. Advertising costs
amounted to $137, $50, and $532 for 1996, 1997 and 1998, respectively.
F-8
<PAGE> 77
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME TAXES
The Company accounts for income taxes in accordance with Financial
Accounting Standards Board ("FASB") Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes." This statement prescribes the
use of the liability method whereby deferred tax assets and liabilities are
determined based on the differences between financial reporting and tax bases of
assets and liabilities and measured at tax rates that will be in effect when the
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets where it is more likely than not the
deferred tax asset will not be realized.
STOCK-BASED COMPENSATION
In 1997, the Company adopted the disclosure provisions of SFAS No. 123,
"Accounting for Stock-based Compensation." The Company has elected to continue
accounting for stock-based compensation issued to employees using Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees," and, accordingly, pro forma disclosures required under SFAS No. 123
have been presented (See Note 9). Under APB No. 25 ("APB No. 25"), compensation
expense is based on the difference, if any, on the date of the grant, between
the fair value of the Company's Common Stock and the exercise price.
Additionally, pursuant to SFAS No. 123, stock issued to non-employees is
accounted for at the fair value of the equity instruments issued, or at the fair
value of the consideration received, whichever is more reliably measurable.
RESEARCH AND DEVELOPMENT EXPENSES
Costs related to research, design and development of products are charged
to research and development expense as incurred. Software development costs are
capitalized beginning when a product's technological feasibility has been
established and ending when a product is available for general release to
customers. To date, completing a working model of the Company's products and
general release have substantially coincided. As a result, the Company has not
capitalized any software development costs.
RECLASSIFICATION
The Company has reclassified the presentation of certain prior year
information to conform to the current year presentation. These changes had no
effect on previously reported financial position or results of operations.
NET LOSS PER SHARE AND PRO FORMA NET LOSS PER SHARE
The Company computes net loss per share in accordance with SFAS No. 128,
"Earnings per Share," ("SFAS No. 128") and The Securities and Exchange
Commission ("SEC") Staff Accounting Bulletin No. 98 ("SAB 98"). Under the
provisions of SFAS No. 128 and SAB 98, basic net loss per share is computed by
dividing the net loss available to common stockholders for the period by the
weighted average number of common shares outstanding during the period. Diluted
net loss per share is computed by dividing the net loss for the period by the
weighted average number of common and common equivalent shares outstanding
during the period. Options, warrants and Convert-
F-9
<PAGE> 78
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ible Preferred Stock were not included in the computation of diluted net loss
per share because the effect would be antidilutive.
Pro forma net loss per share has been computed as described above and also
gives effect, even if antidilutive, to common equivalent shares from Preferred
Stock that will automatically convert upon the closing of the Company's initial
public offering (using the as-if-converted method). If the offering contemplated
by this Prospectus is consummated, all of the convertible preferred stock
outstanding, as of the closing date will automatically be converted into an
aggregate of approximately 14,544 shares of Common Stock based on the shares of
Convertible Preferred Stock outstanding at December 31, 1998. Unaudited pro
forma stockholders' equity at December 31, 1998, as adjusted for the conversion
of Preferred Stock, is disclosed on the balance sheet.
A reconciliation of shares used in the calculation of historical and pro
forma basic and diluted net loss per share follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1996 1997 1998
------- ------- --------
<S> <C> <C> <C>
HISTORICAL NET LOSS PER SHARE, BASIC AND
DILUTED:
Net loss................................. $(7,039) $(6,900) $(13,701)
======= ======= ========
Shares used in computing net loss per
share, basic and diluted.............. 2,637 2,860 3,951
======= ======= ========
Net loss per share, basic and diluted.... $ (2.67) $ (2.41) $ (3.47)
======= ======= ========
Antidilutive securities including
options, warrants and preferred stock
not included in historical net loss
per share calculations................ 12,006 14,350 17,055
======= ======= ========
PRO FORMA NET LOSS PER SHARE:
Net loss................................. $(13,701)
========
Shares used in computing net loss per
share, basic and diluted.............. 3,951
Adjustment to reflect assumed conversion
of convertible preferred stock........ 14,544
--------
Shares used in computing pro forma net
loss per share, basic and diluted..... 18,495
========
Pro forma net loss per share, basic and
diluted............................... $ (0.74)
========
</TABLE>
RECENT ACCOUNTING PRONOUNCEMENTS
The American Institute of Certified Public Accountants ("AICPA") issued SOP
No. 98-1, "Software for Internal Use," which provides guidance on accounting for
the cost of computer software developed or obtained for internal use. SOP No.
98-1 is effective for financial statements for fiscal years beginning after
December 15, 1998. The Company does not expect that the adoption of SOP No. 98-1
will have a material impact on its financial statements.
F-10
<PAGE> 79
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 is effective for fiscal years beginning after December 15,
1997. There was no difference between the Company's net loss and its total
comprehensive loss for the years ended December 31, 1996 and 1997. The only
component of comprehensive income for the year ended December 31, 1998 related
to a cumulative translation adjustment and amounted to $101.
During June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments
of an Enterprise and Related Information." SFAS No. 131 replaces SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise" and changes the way
the public companies report segment information. SFAS No. 131 is effective for
fiscal years beginning after December 15, 1997 and has been adopted by the
Company for the year ending December 31, 1998. The Company markets and sells its
services primarily in North America and operates in one business segment.
In April 1998, the AICPA issued SOP 98-5 "Reporting on the Costs of
Start-Up Activities." This standard requires companies to expense the costs of
start-up activities and organization costs as incurred. In general, SOP 98-5 is
effective for fiscal years beginning after December 15, 1998. The Company
believes the adoption of SOP 98-5 will not have a material impact on its results
of operations.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------
1997 1998
------- -------
<S> <C> <C>
Office equipment................................. $ 612 $ 2,166
Computer software and equipment.................. 1,847 2,996
Leasehold improvements........................... 73 83
------- -------
2,532 5,245
Less accumulated depreciation and amortization... (1,136) (2,201)
------- -------
$ 1,396 $ 3,044
======= =======
</TABLE>
Property and equipment under capital leases consist of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------
1997 1998
------- --------
<S> <C> <C>
Computer equipment.................................. $1,594 $ 2,208
Office equipment.................................... 447 1,527
------ -------
2,041 3,735
Less accumulated amortization....................... (811) (1,662)
------ -------
$1,230 $ 2,073
====== =======
</TABLE>
F-11
<PAGE> 80
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
4. ACCRUED LIABILITIES
Accrued liabilities consists of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------
1997 1998
------- -------
<S> <C> <C>
Accrued employee compensation........................ $ 530 $1,198
Sales returns and allowances......................... -- 830
Accrued taxes........................................ -- 622
Accrued other........................................ 853 1,566
------ ------
$1,383 $4,216
====== ======
</TABLE>
5. COMMITMENTS AND CONTINGENCIES
The Company has entered into an equipment line of credit with a leasing
company and a bank. See Note 6 of Notes to Consolidated Financial Statements.
The capital lease obligations, which expire through January 2002 are
collateralized by the related assets. Under the terms of the capital lease
obligations, the Company is responsible for taxes, insurance and maintenance
costs. The Company also leases various facilities under noncancelable operating
leases expiring through August 2003. Future minimum lease payments under these
leases at December 31, 1998, are as follows:
<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
----------- -------
<S> <C> <C>
1999............................................... $1,771 $1,404
2000............................................... 1,623 2,831
2001............................................... 1,491 628
2002............................................... 1,536 8
2003............................................... 1,312 --
------ ------
Total minimum lease payments....................... $7,733 4,871
======
Less amount representing interest.................. (344)
------
Present value of minimum lease payments............ 4,527
Current portion.................................... 1,181
------
$3,346
======
</TABLE>
Rent expense for the years ended December 31, 1996, 1997, and 1998 was
$241, $606, and $1,112, respectively.
In May 1998, Acta Technology, Inc. ("Acta") filed suit in the United States
District Court, Northern District of California (the "Federal Litigation")
against the Company, and in June 1998, Acta filed an amended complaint. Acta
alleged, among other things, that the Company committed copyright infringement
of certain of its software code. In addition Acta alleged that the Company
committed conversion, fraud and unfair competition. Acta sought a declaration
that it did not misappropriate any trade secrets of the Company, injunctive
relief, monetary damages, costs and attorneys' fees. The Company intends to
vigorously contest Acta's claims in the Federal Litigation.
F-12
<PAGE> 81
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
In May 1998, the Company filed suit against Acta and its founders (the
"Defendants") in Superior Court of California, Santa Clara County (the "State
Litigation"). The Company alleged that the Defendants misappropriated certain of
the Company's trade secrets. In addition, the Company alleged breach of
contract, violation of the covenant of good faith and fair dealing, breach of
confidence, fraud and unfair competition. The Company is seeking injunctive
relief and monetary damages, including costs and reasonable costs and reasonable
attorneys' fees.
Both the Federal and State Litigation are currently pending. Although the
Company does not believe such litigation will have a material impact on the
Company, litigation, regardless of its outcome, could result in substantial cost
and diversion of resources of the Company. On December 8, 1998, the parties
stipulated in the State Litigation to enter into mediation, which has been
scheduled for February 3, 1999, and which will address both the Federal and
State Litigation.
6. LINE OF CREDIT
During 1997, the Company entered into a loan and security agreement with a
bank under which the Company can borrow up to an aggregate amount of $4.8
million. The agreement is used to finance various leased assets and (see also
Note 3) includes a revolving line of credit (revolving line) for up to $2
million and an equipment line of credit (equipment line) for up to $2.8 million.
Both lines are collateralized by all assets of the Company, including
receivables, equipment and intellectual property.
The revolving line consists of advances against eligible accounts
receivable in an aggregate amount not to exceed the lesser of, the committed
revolving line or the borrowing base, less any outstanding letters of credit.
Advances against the revolving line bear interest at the bank's prime rate
(7.75% at December 31, 1998) and are due no later than January 15, 2000. During
1998 advances totaled $1.75 million.
The equipment line consists of advances for the acquisition of equipment
through May 5, 1999. Each advance bears interest at the bank's prime rate (7.75%
at December 31, 1998) and is due in 36 monthly principal and interest payments.
The equipment line matures on May 7, 2002.
Under these agreements, the Company is required to comply with certain
covenants, among which are minimum quick ratios, debt to net worth ratios,
tangible net worth ratios and profitability. As of December 31, 1998, the
Company was not in compliance with certain of these covenants. Subsequent to
December 31, 1998, the loan and security agreement was amended to waive the
aforementioned covenant violations through the period ending December 31, 1998.
7. ACQUISITION OF BUSINESS
In February 1998, the Company acquired Talus, Incorporated for cash of
approximately $1.2 million, 259 shares of preferred stock amounting to $1.4
million and the assumption of certain liabilities for an aggregate purchase
price of $3.526 million. The Company accounted for the acquisition under the
purchase method and, accordingly, the
F-13
<PAGE> 82
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
purchase price was allocated to the fair value of tangible and intangible assets
acquired and liabilities assumed.
The Company has allocated approximately $2.4 million of the purchase price
to acquired in-process technology. The determination of the acquired in-process
technology allocation was based upon recently issued guidance issued by the SEC
to the AICPA SEC Regulations Committee and considered such factors as degree of
completion, technological uncertainties, costs incurred and projected costs to
complete. The value assigned to the acquired workforce was based on replacement
cost. The allocation of the purchase price resulted in additional intangible
assets (primarily non-compete agreements and the value of an acquired workplace)
of $587, which as been capitalized and is being amortized on a straight line
basis over six-months to three years. Amortization expense for the year ended
December 31, 1998 was $102.
As of the date of acquisition, the Talus development project consisted of
ongoing research and development efforts on decision support applications for
manufacturing, food service and hospitality, and high technology. Based on
management's estimates, the remaining research and development efforts relating
to the completion of the technology were expected to continue into 2000.
Accordingly, the cost to complete the inprocess technology was estimated based
on the number of man months required to reach technological feasibility for the
technology, the type of professional and engineering staff involved in the
completion process and their fully burdened months' salaries. Management
estimated the direct costs to achieve technological feasibility to be
approximately $1,800.
The preliminary allocation of the Company's aggregate purchase price to the
tangible and identifiable intangible assets acquired and liabilities assumed in
connection with this acquisition were based primarily on estimates by
independent appraisers of fair values. The allocation is summarized below:
<TABLE>
<CAPTION>
TALUS
<S> <C>
Acquired in-process technology....................... $2,425
Current assets....................................... 494
Other intangibles.................................... 587
Other assets......................................... 11
Goodwill............................................. 9
------
Total purchase price....................... $3,526
======
</TABLE>
The excess of the purchase price over the fair value of the net tangibles
and identifiable intangible assets acquired has been recorded as goodwill, which
is being amortized on a straight-line basis over a period of three year.
8. CONVERTIBLE PREFERRED STOCK
Holders of Series A, B, C, D and E Preferred Stock are entitled to
preferential noncumulative dividends at the rate of $.04, $.07, $.20, $.25 and
$.43 per share, respectively, if and when declared by the Board of Directors. No
dividends have been declared as of December 31, 1998. The holders of Series A,
B, C, D and E shares Preferred Stock have liquidation preferences of $0.45,
$0.90, $2.50, $3.18 and $5.40 per share, respectively, plus an amount equal to
all declared but unpaid dividends. In the event
F-14
<PAGE> 83
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
of liquidation, if the assets of the Company are insufficient to pay the
entirety of such amounts to the preferred stockholders, the assets shall be
distributed ratably among the preferred stockholders in proportion to their
preferential amounts. Preferred stockholders are entitled to one vote for each
share of Common Stock into which their Preferred Stock is convertible. After
payment to the preferred stockholders of the full preferential amounts specified
above, the remaining assets will be distributed ratably among the holders of the
Common Stock.
At the option of the holder, and at any time after the date of issuance of
such share, each share of Series A, B, C, D and E Preferred Stock is convertible
on a one-for-one basis into shares of the Company Common Stock subject to
adjustment for stock splits and certain dilutive issuances of securities. The
shares will automatically convert into Common Stock upon the closing of an
underwritten public offering of Common Stock under the Securities Act of 1933,
as amended, with minimum proceeds of $10 million. As of December 31, 1998, the
Company has reserved 14,544 shares of its Common Stock in the event of
conversion of all Preferred Stock.
All preferred shareholders have a right to first refusal to purchase any
new securities issued by the Company in proportion to the shares they currently
hold as a percentage of the total shares the Company has outstanding. The
holders of Preferred Stock have certain registration rights.
At December 31, 1998, Preferred Stock consists of the following:
<TABLE>
<CAPTION>
COMMON
SHARES STOCK
SHARES ISSUED AND RESERVED FOR LIQUIDATION
SERIES AUTHORIZED OUTSTANDING PROCEEDS (NET) CONVERSION VALUE
------ ---------- ----------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
A.................. 2,800 2,567 $ 1,138 $ 2,567 $ 1,155
B.................. 5,656 5,555 4,981 5,555 5,000
C.................. 2,800 2,655 6,625 2,655 6,637
D.................. 1,800 1,612 5,100 1,612 5,127
E.................. 2,500 2,155 11,627 2,155 11,635
------ ------ ------- ------- -------
15,556 14,544 $29,471 $14,544 $29,554
====== ====== ======= ======= =======
</TABLE>
9. RESTRICTED STOCK PURCHASE AGREEMENT:
The Company has sold shares of its Common Stock to founders and employees
of the Company under agreements which provide for repurchase of the shares by
the Company at the stock's original purchase price upon termination of
employment of such persons. The Company's right to repurchase shares generally
lapses as to 1/48 of the total shares on the date of purchase and 1/48 on the
first day of each subsequent month thereafter until the founder or employee is
fully vested. At December 31, 1998, 335 shares of Common Stock were subject to
repurchase.
10. STOCK OPTION PLAN:
Under the 1995 Stock Option Plan (the "1995 Plan"), the Company initially
reserved 1,200 shares of Common Stock for issuance to employees, officers,
directors and
F-15
<PAGE> 84
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
consultants of the Company. The Company amended the 1995 Plan in 1996, 1997 and
1998 to increase the number of shares reserved under the 1995 Plan to, in the
aggregate, 1,800 shares, 2,800 shares and 3,276 shares, respectively.
Under the terms of the 1995 Plan, incentive stock options may be granted at
prices not lower than fair market value at the date of grant, while nonqualified
options may be granted at prices not lower than 85% of fair market value at the
date of grant, each as determined by the Board of Directors. However, if an
employee or other person who, at the time of the grant of such stock option,
owns stock representing more than 10% of the voting power of all classes of
stock in the Company, the exercise price may be no less than 110% of the fair
market value per share on the date of grant. Options granted under the 1995 Plan
are exercisable immediately, conditioned upon the optionee entering into a
restricted stock purchase agreement, and generally vest to the extent of 25% of
the shares granted 12 months from the vesting commencement date and the
remainder to the extent of 1/48 of the options granted each month thereafter,
such that all options granted will be vested four years from the vesting
commencement date. Options granted expire 10 years from the date of grant.
In December 1998, the Board of Directors approved the 1998 Stock Option
Plan (the "1998 Plan") which authorized 2,440 shares of the Common Stock as
available for issuance to employees, officers, directors and consultants of the
Company.
Under the terms of the 1998 Plan, incentive options may be granted at
prices not lower than fair market value at the date of grant, while nonqualified
options may be granted at prices as determined by the Administrator at the date
of grant. However, if an employee or other person who, at the time of the grant
of such stock option, owns stock representing more than 10% of the voting power
of all classes of stock in the Company, the exercise price may be no less than
110% of the fair market value per share on the date of grant. In the case of
nonqualified options intended to qualify as performance-based compensation, the
exercise price shall be no less than 100% of fair market value on the date of
grant.
Options granted under the 1998 Plan are generally exercisable one year
after the vesting commencement date. Upon exercise of an option, the optionee
shall enter into a restricted stock purchase agreement. Options generally vest
to the extent of 25% of the shares granted 12 months from the vesting
commencement date and the remainder to the extent of 1/48 of the shares granted
each month thereafter, such that all options granted will be vested four years
from the vesting commencement date. Options generally expire 10 years from the
date of grant.
Upon adoption of the 1998 Plan, the Board of Directors approved the
cessation of grants under the 1995 Plan and determined that all shares of Common
Stock then reserved under the 1995 Plan for the future grant of stock options
were no longer reserved for issuance.
At December 31, 1998, 1,158 shares were no longer subject to repurchase. Of
the stock options exercised, 879 shares were no longer subject to repurchase.
F-16
<PAGE> 85
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table summarizes activity under the Company's stock option
plans for the years ended December 31, 1996, 1997 and 1998:
<TABLE>
<CAPTION>
WEIGHTED
AGGREGATE AVERAGE
NUMBER OF EXERCISE PRICE EXERCISE EXERCISE
SHARES PER SHARE PRICE PRICE
--------- -------------- --------- --------
<S> <C> <C> <C> <C>
Options outstanding at January 1,
1996............................... 625 $0.05 - $ 0.09 $ 35 $0.06
Options granted under the 1995
Plan............................ 558 0.09 - $ 0.25 72 0.13
Options canceled under the 1995
Plan............................ (13) 0.09 - $ 0.25 (2) 0.13
Options exercised under the 1995
Plan............................ (14) 0.05 (1) 0.05
----- ------------- ------- -----
Options outstanding at December 31,
1996............................... 1,156 0.05 - $ 0.25 104 0.09
Options granted under the 1995
Plan............................ 1,280 0.25 - $2.80 2,309 1.80
Options canceled under the 1995
Plan............................ (146) 0.09 - $2.50 (32) 0.22
Options exercised under the 1995
Plan............................ (535) 0.05 - $ .50 (47) 0.09
----- ------------- ------- -----
Options outstanding at December 31,
1997............................... 1,755 0.05 - $2.80 2,334 1.33
Options granted under the 1995
Plan............................ 1,148 2.90 - $6.50 5,094 4.43
Options granted under the 1998
Plan............................ 219 7.00 1,532 7.00
Options canceled under the 1995
Plan............................ (182) 0.09 - $5.50 (418) 2.30
Options exercised under the 1995
Plan............................ (665) 0.05 - $5.50 (737) 1.11
----- ------------- ------- -----
Options outstanding at December 31,
1998............................... 2,275 $0.05 - $7.00 $ 7,805 $3.43
===== ============= ======= =====
</TABLE>
At December 31, 1997 and 1998, 496 shares and 2,221 shares, respectively,
remained available for issuance.
The following table summarizes information with respect to stock options
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
------------------------------------- OPTIONS EXERCISABLE
WEIGHTED ----------------------
AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
RANGE OF OF SHARES CONTRACTUAL EXERCISE OF SHARES EXERCISE
EXERCISE PRICE OUTSTANDING LIFE (YEARS) PRICE EXERCISABLE PRICE
- -------------- ----------- ------------ -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$.045 - $ .09 259 7.01 $ 0.07 259 $ 0.07
.25 - .50 112 7.87 0.27 112 0.27
2.00 - 4.60 1,448 8.96 3.34 1,448 3.34
5.50 - 7.00 456 9.85 6.42 237 5.89
----- -----
.045 - 7.00 2,275 2,056
===== =====
</TABLE>
The following information concerning the Company's stock option plans is
provided in accordance with SFAS No. 123. The Company accounts for such plans in
accordance with APB No. 25, "Accounting for Stock Issued to Employees."
F-17
<PAGE> 86
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The fair value of each option grant has been estimated on the date of grant
using the minimum value method with the following weighted average assumptions
used for grants:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1997 1998
------------- -------------
<S> <C> <C>
Risk-free interest rate................. 5.31% - 6.54% 5.14% - 5.94%
Expected life........................... 4 years 4 years
Dividends............................... -- --
</TABLE>
The weighted average fair value per option granted in 1996, 1997 and 1998
was $0.15, $1.50 and $4.94, respectively.
The following pro forma net loss and net loss per share information has
been prepared as if the Company had followed the provisions of SFAS No. 123:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1996 1997 1998
------- ------- --------
<S> <C> <C> <C>
Net loss
As reported........................... $(7,039) $(6,900) $(13,701)
Pro forma............................. (7,042) (6,940) (13,999)
Basic and diluted net loss per share
As reported........................... (2.67) (2.41) (3.47)
Pro forma............................. (2.67) (2.43) (3.54)
</TABLE>
11. NON-PLAN STOCK OPTIONS:
During 1996, the Company granted options to purchase 268,255 shares to an
officer of the Company outside of the 1995 Stock Option Plan. These options are
exercisable at $.09 per share and vest at the rate of 1/48 per month over a
four-year period. In addition, these options have certain accelerated vesting
requirements in the event of a change of control in the Company, as defined in
the option grant agreement.
At December 31, 1998 and 1997, 38,255 and 268,255 shares of Common Stock,
respectively, were reserved for the exercise of non-plan stock options.
At December 31, 1998, the non-plan stock options exercised 45,575 shares
are subject to repurchase.
F-18
<PAGE> 87
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table summarizes activity under the non-plan stock options
for the years ended December 31, 1996, 1997 and 1998:
<TABLE>
<CAPTION>
WEIGHTED
EXERCISE AGGREGATE AVERAGE
NUMBER OF PRICE EXERCISE EXERCISE
SHARES PER SHARE PRICE PRICE
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Options outstanding at January 1,
1996............................... -- -- -- --
Options granted.................... 268 $0.09 $ 24 $0.09
---- ----- ---- -----
Options outstanding and exercisable
at December 31, 1996............... 268 0.09 24 0.09
---- ----- ---- -----
Options outstanding and exercisable
at December 31, 1997............... 268 0.09 24 0.09
Options exercised.................. (230) 0.09 (21) 0.09
---- ----- ---- -----
Options outstanding and exercisable
at December 31, 1998............... 38 $0.09 $ 3 $0.09
==== ===== ==== =====
</TABLE>
At December 31, 1998, the remaining contractual life of these options was
7.18 years.
The Company accounts for the fair value of its non-plan stock option grants
under the non-stock plan in accordance with APB 25. Accordingly, no compensation
expense has been recognized for the non-plan stock options.
The fair value of the options is estimated using the minimum value option
pricing method allowable for non-public companies and using the following
assumptions; dividend yield of 0%, volatility of 0%, risk-free interest rate of
6.45% at the date of grant, and an expected term of four years.
12. STOCKHOLDER NOTES RECEIVABLE
Stockholder notes receivable represents amounts due from a stockholder in
exchange for the issuance of Common Stock together with interest. The notes bear
interest at a rate of 5.47% and are due February 1, 2001 but may be repaid
earlier. The notes are collateralized by a pledge of a portion of the underlying
Common Stock issued.
13. WARRANTS
In connection with equipment leasing activity under a master lease
agreement with a leasing company, the Company has issued warrants to the leasing
company to purchase up to 42 shares of Series A Preferred Stock at a price of
$.45 per share, 61 shares of Series B Preferred Stock at a price of $.90 per
share and 22 shares of Series C Preferred Stock at a price of $2.50 per share.
Each warrant has a seven year life and can be exercised at any time prior to
expiration, except that the warrants will immediately expire on the effective
date of an initial public offering if not exercised. The estimate fair value of
these warrants of $22 has been recorded as debt issuance costs.
In connection with a reseller and technology license agreement with another
software company, the Company issued a warrant to purchase up to 70 shares of
the Company's Common Stock. The warrant can be exercised at any time prior to
expiration. The exercise
F-19
<PAGE> 88
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
price will be equal to $7.20 per share. The warrant expires on December 22,
2002. The estimate fair value of the warrant of $100 has been recorded as cost
of sales.
The Company issued warrants to purchase Common and Preferred Stock to
establish and increase a line of credit with a financial institution. Each
warrant can be exercised at any time prior to expiration. At December 31, 1998
such warrants were as follows.
<TABLE>
<CAPTION>
SHARES OF EXERCISE
COMMON PRICE
STOCK PER SHARE EXPIRATION DATE
--------- --------- ---------------------------
<S> <C> <C> <C>
Series D Preferred Stock... 93 $3.18 Later of July 16, 2007 or
five years after the
closing of an initial
public offering
Series E Preferred Stock... 3 5.40 Later of May 7, 2008 or
five years after the
closing of an initial
public offering
Common Stock............... 6 6.50 Later of September 30, 2008
or five years after the
closing of an initial
public offering
</TABLE>
The estimate fair value of these warrants of $54 has been recorded as debt
issuance costs. In 1998, in connection with a joint venture to conduct business
in a foreign country, the Company issued a warrant to purchase 22 shares of
Common Stock at a price of $5.40 per share. The warrant is immediately
exercisable and expires on the later of May 21, 2003, the closing of a business
combination or the closing of the Company's initial public offering. The
estimate fair value of the warrant of $60 has been recorded as general and
administrative expense.
The estimated fair value of these warrants have been determined based on a
Black Scholes fair value model.
14. INCOME TAXES
The Company's effective tax rate differs from the U.S. Federal statutory
tax rate as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Tax benefit at statutory rate................ $(2,393) $(2,346) $(4,652)
State taxes, net of federal benefit.......... -- -- (744)
Nonrecognition of tax benefits............... 2,481 2,554 5,885
Tax credits.................................. (100) (240) (420)
Other........................................ 12 32 (69)
------- ------- -------
$ -- $ -- $ --
======= ======= =======
</TABLE>
F-20
<PAGE> 89
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Deferred tax assets (liabilities) are comprised of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1997 1998
------- --------
<S> <C> <C>
Deferred tax assets and liabilities:
Net operating loss carry forwards............... $ 4,083 $ 7,588
Capitalized research and development costs...... 958 1,796
Research and development credit................. 516 1,080
Depreciation and amortization................... 73 68
Other........................................... 460 1,457
------- --------
6,090 11,989
Valuation allowance............................... (6,090) (11,989)
------- --------
$ -- $ --
======= ========
</TABLE>
Due to the uncertainty surrounding the realization of the deferred tax
asset in future tax returns, the Company has placed a valuation allowance
against its net deferred tax assets. The valuation allowance increased by $2,139
and $5,899 during 1997 and 1998, respectively.
The difference between the statutory rate of approximately 40% (34% federal
and 6% state, net of federal benefits) and the tax benefit of zero recorded by
the Company is primarily due to the Company's full valuation allowance against
its net deferred tax assets.
At December 31, 1998, the Company had available net operating loss
carryforwards for federal and state income tax purposes of approximately $20,775
and $17,819, respectively. These carryforwards expire from 2003 to 2018.
Although a significant portion of the state net operating loss expire in 2003.
At December 31, 1998, the Company also had available research and development
credit carryforwards for federal and state income tax purposes of approximately
$741 and $514 respectively. These carryforwards expire from 2010 to 2013.
For federal and state tax purposes, a portion of the Company's net
operating loss carryforwards may be subject to certain limitation on annual
utilization in case of a change in ownership, as defined by federal and state
tax law.
15. EMPLOYEE BENEFIT PLANS
Sagent maintains a Profit Sharing Salary Deferral 401(k) plan for all of
its employees. This plan allows eligible employees to defer up to 15%, but no
greater than the stated limitation in any plan year, of their pretax
compensation in certain investments at the discretion of the employee. Under the
Plan, the Company is not required to and has not made a contribution to the Plan
for 1996, 1997 or 1998.
Sagent Professional Services maintained a separate Profit Sharing Salary
Deferral 401(k) plan for eligible employees until January 1, 1999. This Plan
allowed eligible employees to defer up to 15%, but no greater than the stated
limitation in any plan year, of their pretax compensation in certain investments
at the discretion of the employee. Under the Plan the Company was required to
make matching contributions to the Plan. The Company could elect to make
additional contributions on the basis of (a) a percentage of
F-21
<PAGE> 90
SAGENT TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
the employee deferral and (b) profit sharing. Costs related to matching
contributions amounted to $0, $50 and $51 for 1996, 1997 and 1998, respectively.
Effective January 1, 1999, all employees, including those formerly covered
by the Profit Sharing Salary Deferral 401(k) plan of Sagent Professional Group,
will be included in the Profit Sharing Salary Deferral 401(k) plan of Sagent
Technology, Inc.
16. SUBSEQUENT EVENTS
In January 1999, the Board of Directors adopted the Director Plan, subject
to stockholder approval, which allows the Company to grant up to 150 shares of
Common Stock to non-employee directors. The exercise price of any option granted
under the Director Plan will be equal to the fair market value per share of
Common Stock on the date of grant. Each option granted will have a term of ten
years and the shares subject to the option will become exercisable in four equal
annual installments subject to the optionee's completion of each year of Board
service.
The 1999 Purchase Plan was adopted by the Board of Directors in January
1999, subject to stockholder approval, a total of 450 shares of common stock has
been reserved for issuance under the 1999 Purchase Plan. The number of shares
reserved will be subject to an annual increase every January equal to the lesser
of the number of shares optioned during the prior year or lesser amount
determined by the Board of Directors. The 1999 Purchase Plan permits eligible
employees to purchase Common Stock through payroll deductions at a price equal
to 85% of the lower of the fair market value of the common stock at the
beginning or end of each six-month offering period.
Upon the closing of the Company's initial public offering the authorized
capital stock will be 70,000 shares of Common Stock, $0.001 par value, and 5,000
shares of Preferred Stock, $0.001 par value.
F-22
<PAGE> 91
TALUS, INCORPORATED
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Report of Independent Accountants........................... F-24
Balance Sheets.............................................. F-25
Statements of Operations and Retained Earnings.............. F-26
Statements of Cash Flows.................................... F-27
Notes to Financial Statements............................... F-28
</TABLE>
F-23
<PAGE> 92
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Sagent Technology, Inc.
and Talus, Incorporated Stockholders:
We have audited the accompanying balance sheets of Talus, Incorporated
(formerly known as InCASE Corporation) as of December 31, 1996 and 1997, and the
related statements of operations and retained earnings and cash flows for each
of the two years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Talus, Incorporated as of
December 31, 1996 and 1997, and the results of operations and its cash flows for
each of the two years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
McLean, VA
February 20, 1998
F-24
<PAGE> 93
TALUS, INCORPORATED
BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------
1996 1997
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 13 $ 1
Accounts receivable, net.................................. 511 361
Prepaid expenses.......................................... 7 35
---- ----
Total current assets................................. 531 397
Property and equipment, net............................... 111 76
Deposits and other noncurrent assets...................... 19 8
---- ----
Total assets......................................... $661 $481
==== ====
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Borrowings under line of credit........................... $299 $ 90
Note payable.............................................. -- 90
Accounts payable and accrued expenses..................... 97 63
Accrued vacation.......................................... 41 36
Accrued retirement contributions.......................... 49 50
Due to stockholders....................................... 17 --
---- ----
Total current liabilities............................ 503 329
Accrued bonus to stockholders.......................... 105 105
---- ----
Total liabilities.................................... 608 434
---- ----
Commitments (Note 5)
STOCKHOLDERS' EQUITY
Common Stock; par value $.01 per share; authorized 200
shares; issued and outstanding 102 shares.............. 1 1
Additional paid-in capital................................ 4 4
Retained earnings......................................... 48 42
---- ----
Total stockholders' equity........................... 53 47
---- ----
Total liabilities and stockholders' equity........... $661 $481
==== ====
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-25
<PAGE> 94
TALUS, INCORPORATED
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------
1996 1997
------ ------
<S> <C> <C>
Gross revenue............................................... $2,667 $2,830
OPERATING EXPENSES:
Cost of goods sold..................................... 1,238 1,178
Sales and marketing.................................... 161 140
Research and development............................... 573 627
General and administrative............................. 686 857
------ ------
Operating income............................................ 9 28
------ ------
OTHER INCOME (EXPENSE):
Interest expense....................................... (22) (30)
Loss on investment..................................... (2) --
Loss on disposal of property and equipment............. -- (4)
Net loss.................................................... (15) (6)
Retained earnings, beginning of year........................ 63 48
------ ------
Retained earnings, end of year.............................. $ 48 $ 42
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-26
<PAGE> 95
TALUS, INCORPORATED
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
1996 1997
------ -----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (15) $ (6)
Adjustments to reconcile net losses to net cash provided
by (used in) operating activities:
Depreciation and amortization.......................... 43 40
Provision for doubtful accounts and writeoff of
uncollectible accounts............................... 40 41
Loss on sale of property and equipment................. -- 4
Changes in operating assets and liabilities:
Accounts receivable.................................. (176) 109
Prepaid expenses..................................... (10) (28)
Deposits............................................. (14) 10
Accounts payable and accrued expenses................ -- (34)
Accrued vacation..................................... -- 1
Accrued retirement contributions..................... 7 (4)
Accrued stockholders bonus........................... (45) --
------ -----
Net cash provided by (used in) operating activities......... (170) 133
------ -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (12) (9)
Sales of property and equipment........................... -- 1
------ -----
Net cash used in investing activities....................... (12) (8)
------ -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit........................... 1,112 769
Repayments on line of credit.............................. (940) (978)
Proceeds from issuance of stockholder note................ 17 --
Repayment of stockholder note............................. -- (17)
Proceeds from note payable................................ -- 100
Repayments of note payable................................ -- (11)
Distributions to stockholders............................. -- --
------ -----
Net cash (used in) provided by financing activities......... 189 (137)
------ -----
Net increase (decrease) in cash............................. 7 (12)
Cash at beginning of year................................... 6 13
------ -----
Cash at end of year......................................... $ 13 $ 1
====== =====
Supplemental disclosure of cash flow information:
Cash paid for interest.................................... $ 21 $ 30
Write-off of investment received in exchange for
services............................................... 2 --
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-27
<PAGE> 96
TALUS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)
1. DESCRIPTION OF BUSINESS
Talus, Incorporated (previously known as InCASE Corporation) was formed to
provide advanced information technology services to both governmental and
commercial customers. Talus, Incorporated (the "Company") was incorporated in
Virginia in 1992 and is owned by two stockholders. The primary activities of the
Company consist of software engineering and data warehousing consulting.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
These financial statements have been prepared on the accrual basis of
accounting in accordance with generally accepted accounting principles.
ACCOUNTS RECEIVABLE
Accounts receivable include amounts billed and unbilled costs and fees
recoverable under contracts. Included in unbilled costs and fees at December 31,
1997 and 1996 are amounts currently billable in accordance with specified
contract terms. Of the stated amounts, $224 and $331 were billed by December 31,
1997 and 1996, respectively.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the respective assets as
follows:
<TABLE>
<CAPTION>
DESCRIPTION YEARS
----------- -----
<S> <C>
Furniture and fixtures...................................... 7
Software.................................................... 3
Office equipment............................................ 5
</TABLE>
Expenditures for repairs and maintenance are charged to expense as
incurred. The costs of major improvements are capitalized and depreciated over
their estimated useful lives. The cost and related accumulated depreciation of
property and equipment are removed from the accounts upon disposition and any
resulting gain or loss is reflected in operations at that time.
REVENUE RECOGNITION
The Company's revenue is derived primarily from time and materials
contracts. Revenue on time and material contracts is recognized based on actual
hours performed at the contracted hourly rate plus the costs of any direct
materials provided.
INCOME TAXES
The Company has elected to be treated as an "S" Corporation under the
Internal Revenue Code. Accordingly, the income or loss of the Company is taxable
to the stockholders and the Company is not liable for federal and state income
taxes.
F-28
<PAGE> 97
TALUS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
MAJOR CUSTOMERS
During 1997 and 1996, the Company's revenue was primarily derived from
three major customers, each of which contributed more than 10% of total
revenues. These customers accounted for 55% and 48% of gross revenue for 1997
and 1996, respectively. As of December 31, 1997 and 1996, these customers had
accounts receivable balances totalling $147 and $140, respectively.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
EMPLOYEE BONUSES
The Company adopted a bonus plan in 1994 which provided that 83% of the
Company's income before bonuses be allocated to a bonus pool. Of this amount,
40% was allocated to employee performance, 40% to sales performance and 20% to
the two stockholders of the Company. In 1994 the two stockholders earned $63 in
sales performance bonuses (approximately 50% of the total sales performance
bonuses) and $25 in direct stockholder bonuses, and in 1995 they earned $17 in
direct stockholder bonuses. The two stockholders have agreed to defer collection
of these bonuses, totaling $105, until Talus is able to operate with less debt.
It is not anticipated that these bonuses will be paid during 1998.
3. ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
------------
1996 1997
---- ----
<S> <C> <C>
Billed and unbilled receivables......................... $537 $389
Allowance for doubtful accounts......................... (26) (28)
---- ----
Accounts receivable, net................................ $511 $361
==== ====
</TABLE>
F-29
<PAGE> 98
TALUS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
------------
1996 1997
---- ----
<S> <C> <C>
Furniture and fixtures.................................. $ 33 $ 23
Computers and equipment................................. 158 163
Computer software....................................... 22 27
---- ----
213 213
Less accumulated depreciation........................... 102 137
---- ----
Property and equipment, net............................. $111 $ 76
==== ====
</TABLE>
Depreciation expense for the years ended December 31, 1997 and 1996 was $40
and $42, respectively.
5. COMMITMENTS
LEASE OBLIGATIONS
The Company leases its office space and various equipment under
noncancelable operating leases with original terms in excess of the year. Future
minimum payments on noncancelable operating leases were as follows at December
31, 1997:
<TABLE>
<S> <C>
1998.................................................... $120
1999.................................................... 113
2000.................................................... 85
----
Total......................................... $318
====
</TABLE>
Rental expense was $116 and $126 for the years ended December 31, 1997 and
1996, respectively.
6. LINE OF CREDIT AND NOTE PAYABLE
In March 1995, the Company entered into a revolving credit facility
agreement with maximum borrowings of $150 subject to certain borrowing base
restrictions which matured on March 24, 1996. Interest was at the prime rate
plus 1 1/2% per annum, (a total of 10.15% at December 31, 1995). Borrowings were
collateralized by the Company's eligible accounts receivable. The Company's two
principal stockholders and one other member of management were guarantors on the
Loan Agreement.
In March 1996, the Company entered a credit facility agreement with maximum
borrowing of $300 subject to certain borrowing base restrictions. Interest was
at the prime rate plus 1 1/2% per annum, (a total of 9.75% at December 31,
1996). In April 1997, the agreement was amended to decrease the maximum
borrowings to $200, amended to increase the interest rate to prime rate plus 2%
per annum (a total of 10.5% at December 31, 1997), and extended through May
1998.
F-30
<PAGE> 99
TALUS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
In July 1997, Talus entered into a term loan agreement with the same
financial institution of $100 due July 24, 2001. Interest is at the prime rate
plus 2% per annum, (a total of 10.5% at December 31, 1997).
These agreements contain certain restrictive terms and covenants, the most
restrictive of which requires the Company to maintain a specified liabilities to
tangible net worth ratio. The Company was not in compliance with this
restrictive covenant as of December 31, 1997. Accordingly, the entire balance of
the note payable as of December 31, 1997 has been classified as current.
Borrowings are collateralized by the Company's eligible accounts receivable. The
Company's two principal stockholders and one other member of management are
guarantors on the Loan Agreement.
In 1996, majority stockholders loaned the Company $17 bearing interest at
10%. The loans were repaid during 1997.
7. RETIREMENT PLAN
In 1995, the Company established a qualified salary reduction simplified
employee pension plan (SARSEP) for all eligible employees. The Company was
required to contribute 3% of eligible salaries to the SARSEP each year. Because
of restrictions imposed by the Internal Revenue Code, the 3% contribution for
the highly compensated employees could not be made to the SARSEP. Accordingly,
the Company adopted a policy that any amount that could not be funded to the
SARSEP due to these restrictions would be paid directly to those highly
compensated employees as additional compensation. As of December 31, 1996, six
employees were deemed to be highly compensated. The compensation provided for
such employees was $17. The total Company contributions for 1996 for all
eligible employees, as defined by the Internal Revenue Code, were $32. The
SARSEP was terminated during 1997.
During 1997 the Company established a 401(k) plan for the benefit of all
eligible employees. Employees may make contributions to the plan, subject to
certain limitations contained in the Internal Revenue Code. The Company matches
up to 50% of the first 6% of compensation deferred under the plan. Employees
vest 50% in the employer contributions after one year and 100% after two years
of employment at the Company. Employer contributions to the plan were $50 for
the year ended December 31, 1997.
8. COMMON STOCK, ADDITIONAL PAID-IN CAPITAL AND STOCK OPTIONS
At the Company's inception in 1992, 25 shares of common stock with $.10 par
value per share were authorized and 10 shares were issued. In 1996, the Articles
of Incorporation were amended to authorize 200 shares of common stock with a
$.01 par value per share. A stock split was effective in 1996 increasing the
number of issued and outstanding shares to 102.
A stock option plan, which was adopted in 1996, provides for the granting
of stock options to employees. The agreements provide the participants an option
to purchase shares of the Company's stock generally based on certain time
vesting requirements. On June 21, 1996, the Company granted 7 options with an
exercise price of $1.00 per share.
F-31
<PAGE> 100
TALUS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
On May 31, 1997, the Company granted 11 options with an exercise price of $4.77
per share. As of December 1997, options for 7 shares are exercisable.
The effects of applying SFAS NO. 123 are immaterial as the application of
SFAS NO. 123 would not result in a significant difference from reported net
loss. Accordingly, the following disclosures are omitted: (1) pro forma net
income, (2) weighted-average grant date fair value of options granted during the
year and (3) description of method and assumptions used to estimate fair value
of options.
9. SUBSEQUENT EVENTS
The Company is currently negotiating a merger agreement with Sagent
Technology, Inc.
F-32
<PAGE> 101
SAGENT TECHNOLOGY, INC.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following financial statements present the Sagent Technology, Inc.
("Sagent") Pro Forma Consolidated Statements of Operations for the year ended
December 31, 1998.
The Company's acquisition of Talus, Incorporated ("Talus") has been
accounted for under the "purchase" method of accounting, which requires the
purchase price to be allocated to the acquired assets and liabilities of Talus
on the basis of their estimated fair values as of the date of acquisition. The
following pro forma consolidated statements of operations for the year ended
December 31, 1998 give effect to the acquisition of Talus as if it occurred on
January 1, 1998, and include adjustments directly attributable to the
acquisition of Talus and expected to have a continuing impact on the combined
company (collectively, the "Pro Forma Financial Statements").
The pro forma information is based on historical financial statements. The
pro forma results of operations for the year ended December 31, 1998 includes
the results of operations of Talus from January 1, 1998 to February 28, 1998.
The assumptions give effect to the business combination with Talus under the
purchase method of accounting. The information has been prepared in accordance
with the rules and regulations of the Commission and is provided for comparative
purposes only. The pro forma information does not purport to be indicative of
the results that actually would have occurred had the combination been effected
at the beginning of the periods presented.
F-33
<PAGE> 102
SAGENT TECHNOLOGY, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------------------
PURCHASE PRO FORMA
SAGENT TALUS ADJUSTMENTS CONSOLIDATED
-------- -------- ----------- ------------
<S> <C> <C> <C> <C>
Total revenues, net....................... $ 17,043 $ 452 $ -- $ 17,495
Cost of revenues.......................... 5,066 167 (102) 5,131
-------- -------- -------- --------
Gross profit.............................. 11,977 285 102 12,364
Sales and marketing....................... 12,037 383 12,420
Research and development.................. 6,013 283 6,296
General and administrative................ 5,186 342 5,528
Acquired in-process technology............ 2,425 (2,425) --
-------- -------- -------- --------
Total operating expense......... 25,661 1,008 (2,425) 24,244
-------- -------- -------- --------
Loss from operations...................... (13,684) (723) (2,527) (11,880)
Interest expense.......................... (207) (207)
Other income.............................. 190 190
-------- -------- -------- --------
Net loss........................ $(13,701) $ (723) $ (2,527) $(11,897)
======== ======== ======== ========
Pro forma net loss per share.............. $ (0.74) $ (.64)
======== ========
Weighted average shares used in
computation of pro forma net loss per
share................................... 18,495 18,495
======== ========
</TABLE>
See accompanying notes.
F-34
<PAGE> 103
SAGENT TECHNOLOGY, INC.
NOTES TO PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
1. BASIS OF PRESENTATION
On February 28, 1998, the Company acquired Talus, a privately held
consulting company that has experience in the design and implementation of
enterprise intelligence applications.
The unaudited pro forma information presented is not necessarily indicative
of future consolidated results of operations of Sagent or the consolidated
results of operations that would have resulted had the acquisition taken place
on January 1, 1998. The unaudited pro forma consolidated statements of
operations for the year ended December 31, 1998 reflect the effects of the
acquisition, assuming the related events occurred as of January 1, 1998 for the
purposes of the unaudited pro forma consolidated statements of operations.
2. UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL ADJUSTMENTS
The unaudited pro forma consolidated financial statements reflect a total
purchase price of $3.5 million, and the acquisition was recorded under the
purchase method of accounting. In connection with the acquisition, the Company
expensed $2.4 million of in-process technology in the quarter ended March 31,
1998. In addition, the Company recorded other intangibles of $587, which are
being amortized on a straight-line basis over six months to three years
following the acquisition. The determination of the acquired in-process
technology allocation was based upon recently issued guidance issued by the
Securities and Exchange Commission ("SEC") and considered such factors as degree
of completion, technological uncertainties, costs incurred and projected costs
to complete. In-process technology charges have not been reflected in the pro
forma consolidated financial statements of operations for the year ended
December 31, 1998 as they are considered a non-recurring charge.
3. UNAUDITED PRO FORMA CONSOLIDATED NET LOSS PER SHARE
The net loss per share and shares used in computing the net loss per share
for the year ended December 31, 1998 is based upon the historical weighted
average common shares outstanding. The Sagent Common Stock issuable upon the
exercise of the stock options and warrants have been excluded as the effect
would be antidilutive. In addition to the shares used in computing the net loss
per share above, pro forma net loss per share is calculated using the
Convertible Preferred Stock outstanding as if such shares were converted to
Common Stock at the time of issuance.
4. PURCHASE ADJUSTMENTS
Pro forma adjustments have been prepared to reflect the elimination of the
non-recurring one-time charge for acquired in-process technology and to reflect
the amortization of capitalized technology and other intangible assets.
F-35
<PAGE> 104
SCHEDULE II
SAGENT TECHNOLOGY, INC.
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT (REDUCTIONS) BALANCE AT
BEGINNING IN COSTS END OF
OF PERIOD AND EXPENSES WRITE-OFFS PERIOD
---------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts:
Year ended December 31,
1996.. $ -- $ -- $-- $ --
1997.. -- 450 -- 450
1998.. 450 58 -- 508
Valuation allowances for deferred
tax assets:
Year ended December 31,
1996.. $ -- $3,351 $-- $ 3,351
1997.. 3,351 2,739 -- 6,090
1998.. 6,090 5,899 -- 11,989
</TABLE>
<PAGE> 105
REPORT OF INDEPENDENT ACCOUNTS ON
FINANCIAL STATEMENT SCHEDULE
To the Stockholders and Board of Directors of
Sagent Technology, Inc.:
In connection with our audits of the consolidated financial statements of
Sagent Technology, Inc. as of December 31, 1997 and 1998, and for each of the
three years in the period ended December 31, 1998, which financial statements
are included in the Prospectus, we have also audited the financial statement
schedule listed in Item 16(b) herein. In our opinion, this financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly, in all material respects, the information required to
be included therein.
/s/ PRICEWATERHOUSECOOPERS LLP
San Jose, California
January 27, 1999
F-37
<PAGE> 106
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
, 1999
LOGO
SHARES OF COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
DONALDSON, LUFKIN & JENRETTE
HAMBRECHT & QUIST
PIPER JAFFRAY INC.
------------------------
DLJDIRECT INC.
- --------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO
MATTERS NOT STATED IN THIS PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR
SOLICITATION OF YOUR OFFER TO BUY THE SECURITIES IN ANY JURISDICTION WHERE THAT
WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALES MADE HEREUNDER AFTER THE DATE OF THIS PROSPECTUS SHALL CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THE AFFAIRS OF THE COMPANY
HAVE NOT CHANGED SINCE THE DATE HEREOF.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNTIL , 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT EFFECT TRANSACTIONS IN THESE SHARES OF COMMON STOCK MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALER'S OBLIGATION TO
DELIVER A PROSPECTUS WHEN ACTING AS AN UNDERWRITER AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 107
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 registration fee and the NASD filing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE
PAID
-------
<S> <C>
Registration Fee............................................ $11,120
NASD Fee.................................................... 5,100
Nasdaq Listing Fee.......................................... *
Legal Fees and Expenses..................................... *
Accounting Fees and Expenses................................ *
Blue Sky Fees and Expenses.................................. *
Transfer Agent Fees......................................... *
Miscellaneous............................................... *
-------
Total............................................. $ *
=======
</TABLE>
- -------------------------
* To be filed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation includes a provision that eliminates
the personal liability of its directors for monetary damages for breach or
alleged breach of their duty of care. In addition, as permitted by Section 145
of the Delaware General Corporation Law, the Bylaws of the Registrant provide
that: (1) the Registrant is required to indemnify its directors and executive
officers and persons serving in such capacities in other business enterprises
(including, for example, subsidiaries of the Registrant) at the Registrant's
request to the fullest extent permitted by Delaware law, including in those
circumstances in which indemnification would otherwise be discretionary; (2) the
Registrant may, in its discretion, indemnify employees and agents in those
circumstances where indemnification is not required by law; (3) the Registrant
is required to advance expenses, as incurred, to its directors and executive
officers in connection with defending a proceeding (except that it is not
required to advance expenses to a person against whom the Registrant brings a
claim for breach of the duty of loyalty, failure to act in good faith,
intentional misconduct, knowing violation of law or deriving an improper
personal benefit; (4) the rights conferred in the Bylaws are not exclusive, and
the Registrant is authorized to enter into indemnification agreements with its
directors, executive officers and employees; and (5) the Registrant may not
retroactively amend the Bylaw provisions in a way that it adverse to such
directors, executive officers and employees in these matters.
The Registrant's policy is to enter into indemnification agreements with
each of its directors and executive officers that provide the maximum indemnity
allowed to directors and executive officers by Section 145 of the Delaware
General Corporation Law and the
II-1
<PAGE> 108
Bylaws, as well as certain additional procedural protections. In addition, such
indemnification agreements provide that the Registrant directors and executive
officers will be indemnified to the fullest possible extent not prohibited by
law against all expenses (including attorney's fees) and settlement amounts paid
or incurred by them in any action or proceeding, including any derivative action
by or in the right of the Registrant, on account of their services as directors
or executive officers of the Registrant or as directors or officers of any other
company or enterprise when they are serving in such capacities at the request of
the Registrant. The Registrant will not be obligated pursuant to the
indemnification agreements to indemnify or advance expenses to an indemnified
party with respect to proceedings or claims initiated by the indemnified party
and not by way of defense, except with respect to proceedings specifically
authorized by the Company's Board of Directors (the "Board") or brought to
enforce a right to indemnification under the indemnification agreement, the
Registrant's Bylaws or any statute or law. Under the agreements, the Registrant
is not obligated to indemnify the indemnified party (1) for any expenses
incurred by the indemnified party with respect to any proceeding instituted by
the indemnified party to enforce or interpret the agreement, if a court of
competent jurisdiction determines that each of the material assertions made by
the indemnified party in such proceeding was not made in good faith or was
frivolous; (2) for any amounts paid in settlement of a proceedings unless the
Registrant consents to such settlement; (3) with respect to any proceeding
brought by the Registrant against the indemnified party for willful misconduct,
unless a court determines that each of such claims was not made in good faith or
was frivolous; (4) on account of any suit in which judgment is rendered against
the indemnified party for an accounting of profits made from the purchase or
sale by the indemnified party of securities of the Registrant pursuant to the
provisions of sec.16(b) of the Securities Exchange Act of 1934 and related laws;
(5) on account of conduct by the indemnified party that is finally adjudged to
have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct or a knowing violation of the law; (6) on account of any
conduct from which the indemnified party derived an improper personal benefit;
(7) on account of conduct the indemnified party believed to be contrary to the
best interests of the Registrant or its stockholders; (8) on account of conduct
that constituted a breach of the indemnified party's duty of loyalty to the
Registrant or its stockholders; or (9) if a final decision by a court having
jurisdiction in the matter determines that such indemnification is not lawful.
The indemnification provision in the Bylaws and the indemnification
agreements entered into between the Registrant and its directors and executive
officers may be sufficiently broad to permit indemnification of the Registrant's
officers and directors for liabilities arising under the Securities Act of 1933
(the "Securities Act").
II-2
<PAGE> 109
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
<TABLE>
<CAPTION>
EXHIBIT
DOCUMENT NUMBER
-------- -------
<S> <C>
Form of Underwriting Agreement.............................. 1.1
Certificate of Incorporation of Registrant, as amended...... 3.1
Form of Amended and Restated Certificate of Incorporation of
Registrant, to be filed prior to closing of the
offering.................................................. 3.2
Bylaws of Registrant........................................ 3.3
Form of Indemnification Agreement entered into by the
Registrant with each of its directors and executive
officers.................................................. 10.1
</TABLE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since January 1, 1996, the Registrant has issued and sold the following
securities:
(a) From January 1, 1996 to December 31, 1998, the Registrant sold in the
aggregate of 1,444,443 shares of unregistered Common Stock to 55 directors,
officers, employees, former employees and consultants at prices ranging from
$0.045 to $5.50 per share, for aggregate cash consideration of $805,831.
Such shares were sold pursuant to the exercise of options granted by the
Board. As to each director, officer, employee, former employee and
consultant of the Registrant who was issued such securities, the Registrant
relied upon Rule 701 of the Securities Act. Each such person purchased
securities of the Registrant pursuant to a written contract between such
person and the Registrant. In addition, the Registrant met the conditions
imposed under Rule 701(b).
(b) On January 17, 1996 and February 25, 1997, the Registrant sold in the
aggregate 92,500 shares of unregistered Common Stock at a price per share of
$0.09 to a director and a price per share of $0.25 to a group of investors,
respectively, for aggregate cash consideration of $21,125. These shares were
sold pursuant to restricted stock purchase agreements between the Registrant
and the director and such stockholders. As to each person issued such
securities, the Registrant relied upon Section 4(2) of the Securities Act.
(c) In July, August and September 1996, the Registrant sold in the aggregate
2,615,680 shares of unregistered Series C Preferred Stock at a price per
share of $2.50 to certain investors for aggregate cash consideration of
$6,539,200. The Registrant relied upon Section 4(2) of the Securities Act
and Regulation D, Rule 506, thereunder in connection with the sale of these
shares. The sale of Series C Preferred Stock was made in compliance with all
of the terms of Rules 501 and 502 of Regulation D, there were no more than
35 investors (as calculated pursuant to Rule 501(e) of Regulation D), and
each investor who was not an accredited investor represented to the
Registrant that he or she had such knowledge and experience in financial and
business matters that he or she was capable of evaluating the merits and
risks of the investment.
(d) On March 17, 1997, the Registrant issued and sold in the aggregate 40,000
shares of unregistered Series C Preferred Stock at a price per share of
$2.50 to a director for aggregate cash consideration of $100,000. These
shares were sold pursuant to a
II-3
<PAGE> 110
Series C Preferred Stock Purchase Agreement between the Registrant and the
director. Such issuance was made in reliance upon Section 4(2) of the
Securities Act. The Registrant repurchased the shares at a price per share
of $2.50 in April 1998.
(e) On June 16, 1997, the Registrant issued and sold in the aggregate 39,178
shares of unregistered Series C Preferred Stock at a price per share of
$2.50 to a consultant for aggregate cash consideration of $97,945. These
shares were sold pursuant to a Series C Preferred Stock Purchase Agreement
between the Registrant and the consultant. Such issuance was made in
reliance upon Section 4(2) of the Securities Act.
(f) In August and September 1997, the Registrant sold in the aggregate 1,572,327
shares of unregistered Series D Preferred Stock at a price per share of
$3.18 to certain investors for aggregate cash consideration of $5,000,000.
The Registrant relied upon Section 4(2) of the Securities Act and Regulation
D, Rule 506, thereunder in connection with the sale of these shares. The
sale of Series D Preferred Stock was made in compliance with all of the
terms of Rules 501 and 502 of Regulation D, there were no more than 35
investors (as calculated pursuant to Rule 501(e) of Regulation D), and each
investor who was not an accredited investor represented to the Registrant
that he or she had such knowledge and experience in financial and business
matters that he or she was capable of evaluating the merits and risks of the
investment.
(g) In January 1998, the Registrant sold in the aggregate 45,785 shares of
unregistered Series D Preferred Stock at a price per share of $3.18 to an
officer of the Registrant for aggregate cash consideration of $145,596.
These shares were sold pursuant to a Series D Preferred Stock Purchase
Agreement between the Registrant and the officer. Such issuance was made in
reliance upon Section 4(2) of the Securities Act.
(h) In February and March 1998, the Registrant sold in the aggregate 1,895,370
shares of unregistered Series E Preferred Stock at a price per share of
$5.40 to certain investors for aggregate cash consideration of $10,234,998.
The Registrant relied upon Section 4(2) of the 1933 act and Regulation D,
Rule 506, thereunder in connection with the sale of these shares. The sale
of Series E Preferred Stock was made in compliance with all of the terms of
Rules 501 and 502 of Regulation D, there were no more than 35 investors (as
calculated pursuant to Rule 501(e) of Regulation D), and each investor who
was not an accredited investor represented to the Registrant that he or she
had such knowledge and experience in financial and business matters that he
or she was capable of evaluating the merits and risks of the investment.
(i) On May 21, 1998, the Registrant sold in the aggregate 28,000 shares of
unregistered Common Stock at a price per share of $4.32 to a distributor of
the Registrant's products for aggregate cash consideration of $120,960.
These shares were sold pursuant to a stock purchase agreement between the
Registrant and the distributor. Such issuance was made in reliance upon
Section 4(2) of the Securities Act.
(j) On September 14, 1998, the Registrant sold in the aggregate 10,000 shares of
unregistered Common Stock at a price per share of $5.50 to a consultant for
aggregate cash consideration of $55,000. These shares were sold pursuant to
a stock purchase agreement between the Registrant and the consultant. Such
issuance was made in reliance upon Section 4(2) of the Securities Act.
II-4
<PAGE> 111
Appropriate legends were affixed to the share certificates issued in the
transactions described above. All recipients had adequate access, through their
relationships with the Registrant, to information about the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of Registrant.
3.2* Form of Amended and Restated Certificate of Incorporation of
Registrant to be filed prior to the closing of the offering
made under the Registration Statement.
3.3 Bylaws of Registrant.
4.1* Form of Registrant's Common Stock Certificate.
4.2 Sixth Amended and Restated Registration Rights Agreement,
dated as of February 24, 1998, between the Registrant and
the parties named therein.
4.3 Common Stock Registration Rights Agreement, dated as of
September 14, 1998, between the Registrant and Robert Hawk.
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Form of Indemnification Agreement entered into by Registrant
with each of its directors and executive officers.
10.2 Amended and Restated 1995 Stock Plan and related agreements.
10.3 1998 Stock Plan and related agreements.
10.4 1999 Employee Stock Purchase Plan and related agreements.
10.5 1999 Director Option Plan and related agreements.
10.6 Master Equipment Lease Agreement, dated August 7, 1995,
between the Registrant and Lighthouse Capital Partners, L.P.
10.7 Master Lease Agreement, dated as of September 26, 1998,
between the Registrant and Dell Financial Services L.P.
10.8 Loan and Security Agreement, dated as of July 16, 1997,
between the Registrant and Venture Banking Group, a division
of Cupertino National Bank, and amendments thereto.
10.9 Standard Office Lease, dated June 1, 1998, by and between
the Registrant and Asset Growth Partners, Ltd., and the
First Amendment thereto.
10.10** Development and Licensing Agreement, dated January 22, 1997,
between the Registrant and Abacus Concepts, Inc.
10.11** Microsoft License and Distribution Agreement, dated August
23, 1996, between the Registrant and Microsoft Corporation.
10.12** Value-Added Reseller Agreement, effective June 26, 1997,
between the Registrant and Automatic Data Processing, Inc.
10.13** Sagent KK Non-Exclusive Japanese Distribution Agreement,
dated as of December 17, 1997, between Sagent KK Japan and
Kawasaki Steel Systems R&D Corporation.
10.14** Exclusive Distribution Agreement, effective as of January 1,
1998, by and between the Registrant and Sagent U.K. Ltd.
10.15** Joint Venture Agreement, entered into as of April 8, 1998,
between the Registrant and ISAR-Vermogensverwaltung GbR mbH
and related agreements.
</TABLE>
II-5
<PAGE> 112
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
10.16** Exclusive Concession Agreement, effective as of November 21,
1997, by and between the Registrant and Sagent France S.A.
10.17** Value-Added Reseller/OEM Agreement, effective December 30,
1997, between the Registrant and Advent Software, Inc.
10.18 Form of Sagent Technology, Inc. End User Software License
Agreement.
10.19** OEM Software License Agreement, effective March 31, 1998,
between the Registrant and Siebel Systems, Inc.
10.20 Form of Sagent Technology, Inc. Software Maintenance and
Technical Support Agreement.
10.21 Form of Sagent Technology, Inc. Agreement for Consulting
Services.
10.22 Form of Sagent Technology, Inc. Agreement for Subcontractor
Consulting Services.
10.23 Form of Evaluation Agreement.
10.24 Note, dated February 1, 1998, of W. Virginia Walker.
10.25 Note, dated February 1, 1998, of W. Virginia Walker.
10.26** Solution Provider Agreement, effective June 27, 1997,
between the Registrant and Unisys Corporation.
10.27 Consulting Agreement, dated as of April 7, 1997, between the
Registrant and Ralph Kimball.
10.28 Executive Change of Control Policy.
10.29 Agreement and Plan of Reorganization, dated as of February
27, 1998, by and among Sagent Technology, Inc., Talus
Acquisition Corp., Talus, Incorporated and Certain
Shareholders of Talus, Inc.
10.30 Employment and Non-Competition Agreement, dated as of
February 27, 1998, between the Registrant and Michael P.
Venerable.
10.31** Software License and Services Agreement, dated March 31,
1998, between the Registrant and Siebel Systems, Inc.
21.1 Subsidiaries of the Registrant.
23.1* Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.3 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.4* Consent of Klaus S. Luft.
24.1 Power of Attorney (See page II-8).
27.1 Financial Data Schedule (available in EDGAR format only).
</TABLE>
- -------------------------
* To be supplied by amendment.
** Confidential treatment has been requested with respect to certain portions of
this exhibit. Omitted portions have been filed separately with the Securities
and Exchange Commission.
(b) FINANCIAL STATEMENT SCHEDULES
Schedule II. Valuation and Qualifying Accounts
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
II-6
<PAGE> 113
ITEM 17. UNDERTAKINGS
The undersigned hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referenced in Item 14 of this Registration
Statement 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 Securities 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 hereunder,
the Registrant will, unless in the opinion of its 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 Securities 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, 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 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, 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-7
<PAGE> 114
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement on Form S-1 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Mountain
View, State of California, on this 28th day of January 1999.
SAGENT TECHNOLOGY, INC.
By: /s/ KENNETH C. GARDNER
-----------------------------------
Kenneth C. Gardner
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints, jointly and severally, Kenneth C. Gardner and W.
Virginia Walker and each one of them, his true and lawful attorney-in-fact and
agents, each with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and any registration
statement related to the offering contemplated by this registration statement
that is to be effective upon filing pursuant to Rule 462(b) under the Securities
Act of 1933 and to file the same, with all exhibits thereto and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact and agents or any of them, or his or their
substitute or substitutes, may lawfully do or cause to be done or by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ KENNETH C. GARDNER President and Chief January 28, 1999
- --------------------------------------------- Executive Officer (Principal
Kenneth C. Gardner Executive Officer)
/s/ W. VIRGINIA WALKER Vice President of Finance January 28, 1999
- --------------------------------------------- and Administration, Chief
W. Virginia Walker Financial Officer (Principal
Financial and Accounting
Officer)
/s/ JOHN E. ZICKER Director January 28, 1999
- ---------------------------------------------
John E. Zicker
/s/ SHANDA BAHLES Director January 28, 1999
- ---------------------------------------------
Shanda Bahles
</TABLE>
II-8
<PAGE> 115
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ RICHARD W. SHAPERO Director January 28, 1999
- ---------------------------------------------
Richard W. Shapero
/s/ JEFFREY T. WEBBER Director January 28, 1999
- ---------------------------------------------
Jeffrey T. Webber
</TABLE>
II-9
<PAGE> 116
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of Registrant.
3.2* Form of Amended and Restated Certificate of Incorporation of
Registrant to be filed upon the closing of the offering made
under the Registration Statement.
3.3 Bylaws of Registrant.
4.1* Form of Registrant's Common Stock Certificate.
4.2 Sixth Amended and Restated Registration Rights Agreement,
dated as of February 24, 1998, between the Registrant and
the parties named therein.
4.3 Common Stock Registration Rights Agreement, dated as of
September 14, 1998, between the Registrant and Robert Hawk.
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Form of Indemnification Agreement entered into by Registrant
with each of its directors and executive officers.
10.2 Amended and Restated 1995 Stock Plan and related agreements.
10.3 1998 Stock Plan and related agreements.
10.4 1999 Employee Stock Purchase Plan and related agreements.
10.5 1999 Director Option Plan and related agreements.
10.6 Master Equipment Lease Agreement, dated August 7, 1995,
between the Registrant and Lighthouse Capital Partners, L.P.
10.7 Master Lease Agreement, dated as of September 26, 1998,
between the Registrant and Dell Financial Services L.P.
10.8 Loan and Security Agreement, dated as of July 16, 1997,
between the Registrant and Venture Banking Group, a division
of Cupertino National Bank, and amendments thereto.
10.9 Standard Office Lease, dated June 1, 1998, by and between
the Registrant and Asset Growth Partners, Ltd., and the
First Amendment thereto.
10.10** Development and Licensing Agreement, dated January 22, 1997,
between the Registrant and Abacus Concepts, Inc.
10.11** Microsoft License and Distribution Agreement, dated August
23, 1996, between the Registrant and Microsoft Corporation.
10.12** Value-Added Reseller Agreement, effective June 26, 1997,
between the Registrant and Automatic Data Processing, Inc.
10.13** Sagent KK Non-Exclusive Japanese Distribution Agreement,
dated as of December 17, 1997, between Sagent KK Japan and
Kawasaki Steel Systems R&D Corporation.
10.14** Exclusive Distribution Agreement, effective as of January 1,
1998, by and between the Registrant and Sagent U.K. Ltd.
10.15** Joint Venture Agreement, entered into as of April 8, 1998,
between the Registrant and ISAR- Vermongensverwaltung GbR
mbH and related agreements.
10.16** Exclusive Concession Agreement, effective as of November 21,
1997, by and between the Registrant and Sagent France S.A.
10.17** Value-Added Reseller/OEM Agreement, effective December 30,
1997, between the Registrant and Advent Software, Inc.
10.18 Form of Sagent Technology, Inc. End User Software License
Agreement.
</TABLE>
<PAGE> 117
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
10.19** OEM Software License Agreement, effective March 31, 1998,
between the Registrant and Siebel Systems, Inc.
10.20 Form of Sagent Technology, Inc. Software Maintenance and
Technical Support Agreement.
10.21 Form of Sagent Technology, Inc. Agreement for Consulting
Services.
10.22 Form of Sagent Technology, Inc. Agreement for Subcontractor
Consulting Services.
10.23 Form of Evaluation Agreement.
10.24 Note, dated February 1, 1998, of W. Virginia Walker.
10.25 Note, dated February 1, 1998, of W. Virginia Walker.
10.26** Solution Provider Agreement, effective June 27, 1997,
between the Registrant and Unisys Corporation.
10.27 Consulting Agreement, dated as of April 7, 1997, between the
Registrant and Ralph Kimball.
10.28 Executive Change of Control Policy.
10.29 Agreement and Plan Reorganization, dated as of February 27,
1998, by and among Sagent Technology, Inc., Talus
Acquisition Corp., Talus, Incorporated and Certain
Shareholders of Talus, Inc.
10.30 Employment and Non-Competition Agreement, dated as of
February 27, 1998 between Registrant and Michael P.
Venerable.
10.31** Software License and Services Agreement, dated March 31,
1998, between Registrant and Siebel Systems, Inc.
21.1 Subsidiaries of the Registrant.
23.1* Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.3 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.4* Consent of Klaus S. Luft.
24.1 Power of Attorney (See page II-8).
27.1 Financial Data Schedule (available in EDGAR format only).
</TABLE>
- ------------------------------
* To be supplied by amendment.
** Confidential treatment has been requested with respect to certain portions of
this exhibit. Omitted portions have been filed separately with the Securities
and Exchange Commission.
<PAGE> 1
EXHIBIT 1.1
__________ Shares
SAGENT TECHNOLOGY, INC.
Common Stock
UNDERWRITING AGREEMENT
__________, 1999
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
HAMBRECHT & QUIST LLC
PIPER JAFFRAY INC.
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Sagent Technology, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell ____________ shares of its Common Stock, par value
$0.001 per share (the "FIRM SHARES"), to the several underwriters named in
Schedule I hereto (the "UNDERWRITERS"). The Company also proposes to issue and
sell to the several Underwriters not more than an additional _______ shares of
its Common Stock, par value $0.001 per share (the "ADDITIONAL SHARES"), if
requested by the Underwriters as provided in Section 2 hereof. The Firm Shares
and the Additional Shares are hereinafter referred to collectively as the
"SHARES." The shares of common stock of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON STOCK."
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "REGISTRATION STATEMENT";
and the prospectus in the form first used to confirm sales of Shares is
hereinafter referred to as the "PROSPECTUS." If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering
<PAGE> 2
additional shares of Common Stock (a "RULE 462(B) REGISTRATION STATEMENT"),
then, unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell, and each Underwriter agrees, severally and not jointly, to purchase
from the Company at a price per Share of $______ (the "PURCHASE PRICE") the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto.
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees to
issue and sell the Additional Shares and the Underwriters shall have the right
to purchase, severally and not jointly, up to _______ Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof to
the Company within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof, which date shall be a business
day (i) no earlier than two business days after such notice has been given (and,
in any event, no earlier than the Closing Date (as hereinafter defined)) and
(ii) no later than ten business days after such notice has been given. If any
Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears to the total number of
Firm Shares.
The Company hereby agrees not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Underwriters pursuant to this
Agreement, for a period of 180 days after the date of the Prospectus without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's existing stock option plan and (ii) the
Company may issue shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof. The
Company also agrees not to file any registration statement with respect to any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 180 days after the date of the
Prospectus without the prior written consent
2
<PAGE> 3
of Donaldson, Lufkin & Jenrette Securities Corporation. The Company shall, prior
to or concurrently with the execution of this Agreement, deliver an agreement
executed by (i) each of the directors and officers of the Company and (ii) each
holder of greater than 0.5% of the Company's outstanding capital stock to the
effect that such person will not, during the period commencing on the date such
person signs such agreement and ending 180 days after the date of the
Prospectus, without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation, (A) engage in any of the transactions described in the
first sentence of this paragraph or (B) make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Company is advised by
you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be represented
by definitive certificates and shall be issued in such authorized denominations
and registered in such names as Donaldson, Lufkin & Jenrette Securities
Corporation shall request no later than two business days prior to the Closing
Date or the applicable Option Closing Date (as defined below), as the case may
be. The Company shall deliver the Shares, with any transfer taxes thereon duly
paid by the respective Sellers, to Donaldson, Lufkin & Jenrette Securities
Corporation through the facilities of The Depository Trust Company ("DTC"), for
the respective accounts of the several Underwriters, against payment to the
Company of the Purchase Price therefore by wire transfer of Federal or other
funds immediately available in New York City. The certificates representing the
Shares shall be made available for inspection not later than 9:30 A.M., New York
City time, on the business day prior to the Closing Date or the applicable
Option Closing Date, as the case may be, at the office of DTC or its designated
custodian (the "DESIGNATED OFFICE"). The time and date of delivery and payment
for the Firm Shares shall be 9:00 A.M., New York City time, on ________, 1999 or
such other time on the same or such other date as Donaldson, Lufkin & Jenrette
Securities Corporation and the Company shall agree in writing. The time and date
of delivery and payment for the Firm Shares are hereinafter referred to as the
"CLOSING DATE." The time and date of delivery and payment for any Additional
Shares to be purchased by the Underwriters shall be 9:00 A.M., New York City
time, on the date specified in the applicable exercise notice given by you
pursuant to Section 2 or such other time on the same or such other date as
Donaldson, Lufkin & Jenrette Securities Corporation and the Company shall agree
in writing. The time and date of delivery for any Additional Shares are
hereinafter referred to as the "OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or any Option
Closing Date on behalf of the parties hereto pursuant to Section 8 of this
Agreement shall be delivered at the offices of Brobeck, Phleger & Harrison LLP,
Two Embarcadero Place, 2200 Geng Road, Palo Alto, CA 94303 and the Shares shall
be delivered at the Designated Office, all on the Closing Date or such Option
Closing Date, as the case may be.
SECTION 5. Agreements of the Company. The Company agrees with
you:
3
<PAGE> 4
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii) when
any amendment to the Registration Statement becomes effective, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement has
become effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you four (4) signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration Statement
as so filed and of each amendment to it, without exhibits, as you may reasonably
request.
(c) To prepare the Prospectus, the form and substance of
which shall be satisfactory to you, and to file the Prospectus in such form with
the Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or
4
<PAGE> 5
supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to each Underwriter and to any dealer as many copies thereof
as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders
as soon as practicable an earnings statement covering the twelve-month period
ending [INSERT DATE ONE YEAR AFTER THE END OF THE COMPANY'S FISCAL QUARTER IN
WHICH THE CLOSING WILL OCCUR] __________, 2000 that shall satisfy the provisions
of Section 11(a) of the Act, and to advise you in writing when such statement
has been so made available.
(h) During the period of three (3) years after the date of
this Agreement, to furnish to you as soon as available copies of all reports or
other communications furnished to the record holders of Common Stock or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed and such other publicly
available information concerning the Company and its subsidiaries as you may
reasonably request.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration and
delivery of the Shares under the Act and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares, (iv) all
expenses in connection with the registration or qualification
5
<PAGE> 6
of the Shares for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Underwriters in connection
with such registration or qualification and memoranda relating thereto), (v) the
filing fees and disbursements of counsel for the Underwriters in connection with
the review and clearance of the offering of the Shares by the National
Association of Securities Dealers, Inc., (vi) all fees and expenses in
connection with the preparation and filing of the Registration Statement on Form
8-A relating to the Common Stock and all costs and expenses incident to the
listing of the Shares on the Nasdaq National Market, (vii) the cost of printing
certificates representing the Shares, (viii) the costs and charges of any
transfer agent, registrar and/or depositary, and (ix) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section.
(j) To use its best efforts to list for quotation the Shares
on the Nasdaq National Market and to maintain the listing of the Shares on the
Nasdaq National Market for a period of three (3) years after the date of this
Agreement.
(k) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to file a Rule
462(b) Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
SECTION 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule
462(b) Registration Statement to be filed by the Company after the effectiveness
of this Agreement), when it became effective, did not contain and, as amended,
if applicable, will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness
6
<PAGE> 7
of this Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Act, (iii) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement and any
amendments thereto, when they become effective (A) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(B) will comply in all material respects with the Act and (iv) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole.
(e) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens granted or
issued by the Company or any of its subsidiaries relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock of
the Company or any of its subsidiaries, except as otherwise disclosed in the
Registration Statement.
(f) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights; and the
Shares have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
7
<PAGE> 8
(g) All of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature.
(h) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound.
(j) This Agreement has been duly authorized, executed and
delivered by the Company.
(k) The execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will not (i) require
any consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required under
the securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property or (iv) result
in the suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization.
(l) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, trademarks, service marks, trade names, mask work rights, technology
and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) ("INTELLECTUAL
PROPERTY") necessary to conduct the business now or as proposed to be conducted
by the Company as described in the Registration Statement. Neither the Company
nor any of its subsidiaries has received any notice of infringement of or
conflict with (or knows of such infringement of or conflict with) asserted
rights of others with respect to any of such intellectual property which, singly
or in the aggregate, if the subject of any unfavorable decision, ruling or
finding, would have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. To the
8
<PAGE> 9
Company's knowledge, the discoveries, inventions, products or processes of the
Company referred to in the Registration Statement do not infringe or conflict
with any right or patent of any third party, or any discovery, invention,
product or process which is the subject of a patent application filed by any
third party.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject that
are required to be described in the Registration Statement or the Prospectus and
are not so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.
(n) No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the Act to be described in
the Registration Statement or the Prospectus which is not so described. (o) Each
of the Company and its subsidiaries has such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals (each, an
"AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws (as defined below), as are necessary to own, lease, license
and operate its respective properties and to conduct its respective business,
except where the failure to have any such Authorization or to make any such
filing or notice would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole. Each such Authorization
is valid and in full force and effect and each of the Company and its
subsidiaries is in compliance with all the terms and conditions thereof and with
the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
(p) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of
9
<PAGE> 10
1974, as amended, or any provisions of the Foreign Corrupt Practices Act, or the
rules and regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole.
(q) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(r) PricewaterhouseCoopers LLP are independent public
accountants with respect to the Company and its subsidiaries as required by the
Act.
(s) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with related schedules and notes, present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated therein at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
generally accepted accounting principles the information required to be stated
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(t) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with general
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(u) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
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(v) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
(w) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement.
(x) Since the respective dates as of which information is
given in the Prospectus and other than as set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, prospects, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there has
not been any material adverse change or any development involving a prospective
material adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(y) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the
Prospectus.
(z) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries (i) has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers at a cost that would
not have a material adverse effect on the business, prospects, financial
conditions or results of the Company and its subsidiaries, taken as a whole.
(aa) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened against the
Company or any of its subsidiaries before the National Labor Relations Board or
any state or local labor relations board,
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(ii) strike, labor dispute, slowdown or stoppage pending or threatened against
the Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company and its subsidiaries,
except for such actions specified in clause (i), (ii) or (iii) above, which,
singly or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole. To the best of the Company's knowledge,
no collective bargaining organizing activities are taking place with respect to
the Company or any of its subsidiaries.
(bb) (i) To the Company's knowledge, none of the computer
software, computer firmware, computer hardware (whether general or special
purpose) or other similar or related items of automated, computerized or
software systems that are used or relied on by the Company or sub-licensed to
the Company in the conduct of its business will malfunction, will cease to
function, will generate incorrect data or will produce incorrect results when
processing, providing or receiving (i) date-related data from, into and between
the Twentieth (20th) and Twenty-First (21st) centuries or (ii) date-related data
in connection with any valid date in the Twentieth (20th) and Twenty-First
(21st) centuries, causing a material adverse effect on the Company.
(ii) None of the products and services sold, licensed,
rendered, or otherwise provided by the Company in the conduct of its business
will malfunction, will cease to function, will generate incorrect data or will
produce incorrect results when processing, providing or receiving (i)
date-related data from, into and between the Twentieth (20th) and Twenty-First
(21st) centuries or (ii) date-related data in connection with any valid date in
the Twentieth (20th) and Twenty-First (21st) centuries, causing a material
adverse effect on the Company.
(iii) The Company has not made any representations or
warranties relating to the ability of any product or service sold, licensed,
rendered, or otherwise provided by the Company in the conduct of its business to
operate without malfunction, to operate without ceasing to function, to generate
correct data or to produce correct results when processing, providing or
receiving (i) date-related data from, into and between the Twentieth (20th) and
Twenty-First (21st) centuries and (ii) date-related data in connection with any
valid date in the Twentieth (20th) and Twenty-First (21st) centuries.
(cc) Each product manufactured, sold, licensed, leased, or
delivered by the Company has been in conformity with all applicable contractual
commitments and all express and implied warranties except where the failure to
be in such conformity would not have a material and adverse effect on the
Company. The Company has no liability, and to the Company's knowledge, there is
no current reasonable basis for any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand giving rise to any liability,
for replacement or repair thereof or other damages in connection therewith. No
product manufactured, sold, licensed, leased or delivered by the Company is
subject to any guaranty, lease or warranty beyond that implied or imposed by
applicable law. Schedule 6(cc) includes a copy of the Company's standard terms
and conditions of sale, license and lease.
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(dd) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
SECTION 7. Indemnification. (a) The Company agrees to indemnify
and hold harmless each Underwriter, its directors, its officers and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any legal or other expenses incurred
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus, as then
amended or supplemented (so long as the Prospectus and any amendments or
supplements thereto was provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date), to the person asserting any losses, claims, damages,
liabilities or judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in such preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to such
Underwriter but only with reference to information relating to such Underwriter
furnished in writing to the Company by such Underwriter through you expressly
for use in the Registration Statement (or any amendment thereto), the Prospectus
(or any amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the
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<PAGE> 14
indemnified party and the payment of all fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not
be required to assume the defense of such action pursuant to this Section 7(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of such Underwriter). Any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for (i) the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Underwriters, their
officers and directors and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act and (ii) the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for the Company, its directors, its officers
who sign the Registration Statement and all persons, if any, who control the
Company within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Donaldson, Lufkin & Jenrette Securities Corporation. In the case of any such
separate firm for the Company and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
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<PAGE> 15
(d) To the extent the indemnification provided for in this
Section 7 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 7(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
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(e) The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
SECTION 8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by Ken Gardner and Virginia Walker, in their
capacities as the President and Chief Executive Officer, and Chief Financial
Officer, respectively, of the Company, confirming the matters set forth in
Sections 6(x), 8(a) and 8(b) and that the Company has complied with all of the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given
in the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(d)(i),
8(d)(ii) or 8(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Wilson Sonsini Goodrich & Rosati, a Professional Corporation ("WSGR"),
counsel for the Company, to the effect that:
(i) each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its
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jurisdiction of incorporation and has the corporate power and authority to carry
on its business as described in the Prospectus and to own, lease and operate its
properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole;
(iii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights;
(iv) the Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights;
(v) all of the outstanding shares of capital stock of each
of the Company's subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the Prospectus;
(viii) the Registration Statement has become effective
under the Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's knowledge after
due inquiry, pending before or contemplated by the Commission;
(ix) the statements under the captions "Risk
Factors--Risks Associated with Intellectual Property," "Risk Factors--Risks
Related to Third Party Technology," "Business--Legal Proceedings,"
"Business--Intellectual Property," "Management--Limitation on Liability and
Indemnification Matters," "Management--Employee Benefit Plans," "Certain
Transactions," "Description of Capital Stock" and "Underwriting" in the
Prospectus and Items 14 and 15 of Part II of the Registration Statement, insofar
as such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
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(x) neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws and, to the best of such
counsel's knowledge after due inquiry, neither the Company nor any of its
subsidiaries is in default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or their
respective property is bound;
(xi) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby will not (A)
require any consent, approval, authorization or other order of, or qualification
with, any court or governmental body or agency (except such as may be required
under the securities or Blue Sky laws of the various states), (B) conflict with
or constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (C) violate or conflict
with any applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or their respective property or (D) result in
the suspension, termination or revocation of any Authorization of the Company or
any of its subsidiaries or any other impairment of the rights of the holder of
any such Authorization;
(xii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is or could be a party or to which any of their
respective property is or could be subject that are required to be described in
the Registration Statement or the Prospectus and are not so described, or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required;
(xiii) neither the Company nor any of its subsidiaries has
violated any Environmental Law, any provisions of the Employee Retirement Income
Security Act of 1974, as amended, or any provisions of the Foreign Corrupt
Practices Act, or the rules and regulations promulgated thereunder, except for
such violations which, singly or in the aggregate, would not have a material
adverse effect on the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole;
(xiv) each of the Company and its subsidiaries has such
Authorizations of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of
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<PAGE> 19
operations of the Company and its subsidiaries, taken as a whole; each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole;
(xv) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xvi) to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement; and
(xvii) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the
Prospectus.
(xviii) The Company and its subsidiaries own or possess,
or can acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copyrights, trademarks, service marks, trade names, mask work
rights, technology and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), ("INTELLECTUAL PROPERTY") necessary to conduct the business now or
as proposed to be conducted by the Company as described in the Registration
Statement. To the best of such counsel's knowledge after due inquiry, neither
the Company nor any of its subsidiaries has received any notice of infringement
of or conflict with (or knows of such infringement of or conflict with) asserted
rights of others with respect to any of such intellectual property which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
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<PAGE> 20
finding, would have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. To the best of such counsel's knowledge after
due inquiry, the discoveries, inventions, products or processes of the Company
referred to in the Registration Statement do not infringe or conflict with any
right or patent of any third party, or any discovery, invention, product or
process which is the subject of a patent application filed by any third party.
(xix) (A) the Registration Statement and the Prospectus
and any supplement or amendment thereto (except for the financial statements and
other financial data included therein as to which no opinion need be expressed)
comply as to form with the Act, (B) such counsel has no reason to believe that
at the time the Registration Statement became effective or on the date of this
Agreement, the Registration Statement and the prospectus included therein
(except for the financial statements and other financial data as to which such
counsel need not express any belief) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and (C) such counsel
has no reason to believe that the Prospectus, as amended or supplemented, if
applicable (except for the financial statements and other financial data, as
aforesaid) contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
The opinion of WSGR described in this Section 8(e) shall be rendered
to you at the request of the Company and shall so state therein.
(f) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Brobeck, Phleger & Harrison LLP ("BPH"), counsel for the
Underwriters, as to the matters referred to in Sections 8(e)(iv), 8(e)(vi),
8(e)(ix) (but only with respect to the statements under the caption "Description
of Capital Stock" and "Underwriting") and 8(e)(xix).
In giving such opinions with respect to the matters covered by
Section 8(e)(xix), WSGR and BPH may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
(g) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from PricewaterhouseCoopers
LLP, independent public accountants, containing the information and statements
of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(h) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force and effect
on the Closing Date.
20
<PAGE> 21
(i) The Shares shall have been duly listed for quotation on the
Nasdaq National Market.
(j) The Company shall not have failed on or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company on or prior to the
Closing Date.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm
21
<PAGE> 22
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you
and the Company for purchase of such Firm Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. If, on an Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
date, the non-defaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase such Additional Shares or (ii) purchase
not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase on such date in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Sagent
Technology, Inc., 800 W. El Camino Real, Suite 300, Mountain View, CA 94040 and
(ii) if to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Shares,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Shares and payment for them hereunder and (iii) termination of
this Agreement.
If for any reason the Shares are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
22
<PAGE> 23
to pay pursuant to Section 5(i) hereof. The Company also agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights hereunder (including, without limitation, pursuant
to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
23
<PAGE> 24
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
SAGENT TECHNOLOGY, INC.
By:
---------------------------------
Name:
-----------------------------
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
HAMBRECHT & QUIST LLC
PIPER JAFFRAY, INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
------------------------------
Name:
Title:
24
<PAGE> 25
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriters to be Purchased
- ------------ ---------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities
Corporation
Hambrecht & Quist LLC
Piper Jaffray, Inc.
[Names of other Underwriters]
---------------
Total
</TABLE>
<PAGE> 26
Annex I
[Insert names of stockholders of the Company who will be required to sign lock
ups]
2
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
SAGENT TECHNOLOGY, INC.
ARTICLE I
The name of this Corporation is Sagent Technology, Inc. (the
"Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE III
The purpose of this Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the General
Corporation Law of Delaware.
ARTICLE IV
This Corporation is authorized to issue two classes of stock,
designated Common Stock, par value $0.001 per share ("Common Stock") and
Preferred Stock, par value $0.001 per share ("Preferred Stock"). The number of
shares of Common Stock which this Corporation is authorized to issue is
25,000,000. The number of shares of Preferred Stock which this Corporation is
authorized to issue is 15,555,555, 2,800,000 of which shall be designated
"Series A Preferred," 5,655,555 of which shall be designated "Series B
Preferred", 2,800,000 of which shall be designated "Series C Preferred",
1,800,000 of which shall be designated "Series D Preferred", and 2,500,000 of
which shall be designated "Series E Preferred" (Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred are
referred to collectively as the "Preferred Stock").
The Corporation shall from time to time in accordance with the laws of
the State of Delaware increase the authorized amount of its Common Stock if at
any time the number of shares of Common Stock remaining unissued and available
for issuance shall not be sufficient to permit conversion of the Preferred
Stock.
<PAGE> 2
The relative rights, preferences, privileges and restrictions granted
to or imposed upon the respective classes of Common Stock and Preferred Stock or
the holders thereof are as follows:
SECTION 1. DIVIDENDS.
The holders of the outstanding Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors, out of funds legally
available therefor, dividends at the rate of $0.036 per share of Series A
Preferred per annum, $0.072 per share of Series B Preferred per annum, $0.20 per
share of Series C Preferred per annum, $0.25 per share of Series D Preferred per
annum, and $0.43 per share of Series E Preferred per annum, payable in
preference and priority to any payment of any dividend on Common Stock of the
Corporation. Such dividends shall not be cumulative, and no right to such
dividends shall accrue to holders of Preferred Stock or to the holders of Common
Stock unless declared by the Board of Directors. No dividends or other
distributions shall be made with respect to the Common Stock in any fiscal year,
other than dividends payable solely in Common Stock, until a dividend has been
paid to or declared and set apart upon all shares of Preferred Stock at the
annual rates set forth above during that fiscal year. After the holders of the
Preferred Stock have received their dividend preference as set forth above, any
dividends declared by the Board of Directors out of funds legally available
therefor shall be shared equally among all outstanding shares on an as-converted
basis.
(a) For purposes of this Section 1, unless the context
otherwise requires, a "distribution" shall mean the transfer of cash or other
property without consideration whether by way of dividend or otherwise, payable
other than in Common Stock, or the purchase or redemption of shares of the
Corporation (other than repurchases of Common Stock issued to or held by
employees, officers, directors or consultants of the Corporation or its
subsidiaries upon termination of their employment or services pursuant to
agreements providing for the right of said repurchase) for cash or property.
(b) As authorized by Section 402.5(c) of the California
Corporations Code, the provisions of Sections 502 and 503 of the California
Corporations Code shall not apply with respect to repurchases by the Corporation
of shares of Common Stock issued to or held by employees, officers, directors or
consultants of the Corporation or its subsidiaries upon termination of their
employment or services pursuant to agreements providing for the right of said
repurchase.
SECTION 2. LIQUIDATION PREFERENCE.
In the event of any liquidation, dissolution, or winding up of the
Corporation, either voluntary or involuntary, distributions to the shareholders
of the Corporation shall be made in the following manner:
(a) The holders of the Series A Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount of $0.45 per share for each share of
Series A Preferred then held by them (adjusted for any subdivisions,
combinations, consoli dations, or stock distributions or stock dividends with
respect to such shares effected after the date these Amended and Restated
Articles were filed with the Secretary of State) plus an amount equal to all
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<PAGE> 3
declared but unpaid dividends on the Series A Preferred held by them, the
holders of the Series B Preferred shall be entitled to receive, prior and in
preference to any distribution of any of the assets or surplus funds of the
Corporation to the holders of Common Stock by reason of their ownership of such
stock, the amount of $0.90 per share for each share of Series B Preferred then
held by them(adjusted for any subdivisions, combinations, consolidations or
stock distributions or stock dividends with respect to such shares effected
after the date these Amended and Restated Articles were filed with the Secretary
of State) plus an amount equal to all declared and unpaid dividends on the
Series B Preferred shares then held by them, the holders of the Series C
Preferred shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the Corporation to the
holders of Common Stock by reason of their ownership of such stock, the amount
of $2.50 per share for each share of Series C Preferred then held by them
(adjusted for any subdivisions, combinations, consolidations or stock
distributions or stock dividends with respect to such shares effected after the
date these Amended and Restated Articles were filed with the Secretary of State)
plus an amount equal to all declared and unpaid dividends on the Series C
Preferred shares then held by them, and the holders of the Series D Preferred
shall be entitled to receive, prior and in preference to any distribution of any
of the assets or surplus funds of the Corporation to the holders of Common Stock
by reason of their ownership of such stock, the amount of $3.18 per share for
each share of Series D Preferred then held by them (adjusted for any
subdivisions, combinations, consolidations or stock distributions or stock
dividends with respect to such shares effected after the date these Amended and
Restated Articles were filed with the Secretary of State) plus an amount equal
to all declared and unpaid dividends on the Series D Preferred shares then held
by them. The holders of the Series E Preferred shall be entitled to receive,
prior and in preference to any distribution of any of the assets or surplus
funds of the Corporation to the holders of Common Stock by reason of their
ownership of such stock, the amount of $5.40 per share for each share of Series
E Preferred then held by them (adjusted for any subdivisions, combinations,
consolidations or stock distributions or stock dividends with respect to such
shares effected after the date these Amended and Restated Articles were filed
with the Secretary of State) plus an amount equal to all declared and unpaid
dividends on the Series E Preferred shares then held by them. If the assets and
funds thus distri buted among the holders of the Preferred Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Preferred Stock in proportion to the full aforesaid preferential amounts to
which each such holder is entitled.
(b) After payment has been made to the holders of the
Preferred Stock of the full amounts to which they shall be entitled as set forth
in Section 2(a) above, then the entire remaining assets and funds of the
Corporation legally available for distribution, if any, shall be distributed
ratably among the holders of the Common Stock in a manner such that the amount
distributed to each holder of Common Stock shall equal the amount obtained by
multiplying the entire remaining assets and funds of the Corporation legally
available for distribution hereunder by a fraction, the numerator of which shall
be the number of shares of Common Stock then held by such holder, and the
denominator of which shall be the total number of shares of Common Stock then
outstanding.
(c) For purposes of this Section 2, a merger or consolidation
of the Corporation with or into any other corporation or corporations, or a
merger of any other corporation or corporations into the Corporation, unless the
shareholders of the Corporation immediately following such transaction
-3-
<PAGE> 4
directly or indirectly own greater than fifty percent (50%) of the total voting
power of the surviving or acquiring corporation or corporations, or a sale of
all or substantially all of the assets of the Corporation, shall be treated as a
liquidation, dissolution or winding up of the Corporation.
(d) Notwithstanding Sections 2(a) and 2(b) hereof, the
Corporation may at any time, out of funds legally available therefor, repurchase
shares of Common Stock of the Corporation issued to or held by employees,
officers, directors or consultants of the Corporation or its subsidiaries upon
termination of their employment or services, pursuant to any agreement providing
for such right of repurchase.
SECTION 3. CONVERSION.
The holders of the Preferred Stock shall have conversion rights as
follows (the "CONVERSION RIGHTS"):
(a) Right to Convert. Each share of Series A Preferred shall
be convertible, at the option of the holder thereof, at any time after the date
of issuance of such share, at the office of the Corporation or any transfer
agent for the Series A Preferred, into such number of fully paid and non
assessable shares of Common Stock as is determined by dividing $0.45 by the
applicable Conversion Price, determined as hereinafter provided, in effect at
the time of conversion. Each share of Series B Preferred shall be convertible,
at the option of the holder thereof, at any time after the date of issuance of
such share, at the office of the Corporation or any transfer agent for the
Series B Preferred, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $0.90 by the applicable Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
Each share of Series C Preferred shall be convertible, at the option of the
holder thereof, at any time after the date of issuance of such share, at the
office of the Corporation or any transfer agent for the Series C Preferred, into
such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing $2.50 by the applicable Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. Each share of Series
D Preferred shall be convertible, at the option of the holder thereof, at any
time after the date of issuance of such share, at the office of the Corporation
or any transfer agent for the Series D Preferred, into such number of fully paid
and nonassessable shares of Common Stock as is determined by dividing $3.18 by
the applicable Conversion Price, determined as hereinafter provided, in effect
at the time of conversion. Each share of Series E Preferred shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for the Series E Preferred, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $5.40 by the applicable
Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. The price at which shares of Common Stock shall be deliverable upon
conversion of shares of Preferred Stock (the "Conversion Price") shall initially
be $0.45 with respect to the Series A Preferred, $0.90 with respect to the
Series B Preferred, $2.50 with respect to the Series C Preferred, $3.18 with
respect to the Series D Preferred, and $5.40 with respect to the Series E
Preferred per share of Common Stock. Such initial Conversion Price shall be
subject to adjustment as hereinafter provided.
-4-
<PAGE> 5
Upon conversion, all declared and unpaid dividends on the Preferred
Stock shall be paid either in cash or in shares of Common Stock of the
Corporation, at the election of the Company, wherein the shares of Common Stock
shall be valued at the fair market value at the time of such conversion, as
determined by the Board of Directors of the Corporation.
(b) Automatic Conversion. Each share of Preferred Stock shall
automatically be converted into shares of Common Stock at the then effective
applicable Conversion Price upon either (i) the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock for the account of the Corporation to the public with gross
proceeds to the Company (prior to underwriter commissions and offering expenses)
of not less than $10 million, or (ii) the receipt by the Corporation of the
affirmative vote at a duly noticed shareholders meeting or pursuant to a duly
solicited written consent of the holders of more than sixty-six and two-thirds
percent (66 2/3%) of the then out standing shares of Preferred Stock in favor of
the conversion of all of the shares of Preferred Stock. In the event of the
automatic conversion of the Preferred Stock upon a public offering as set forth
in subsection (i) hereof, the person(s) entitled to receive the Common Stock
issuable upon such conversion of Preferred Stock shall not be deemed to have
converted such Preferred Stock until immediately prior to the closing of such
sale of securities.
(c) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall (after aggregating all shares into which shares of Preferred
Stock held by each holder could be converted) pay cash equal to such fraction
multiplied by the then-effective Conversion Price. Before any holder of
Preferred Stock shall be entitled to convert the same into full shares of Common
Stock and to receive certificates therefor, he shall surrender the certificate
or certificates therefor, duly endorsed, at the office of the Corporation or of
any transfer agent for the Preferred Stock, and shall give written notice to the
Corporation at such office that he elects to convert the same; provided,
however, that in the event of an automatic conversion pursuant to Section 3(b),
the outstanding shares of Preferred Stock shall be converted automatically
without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent, and provided further that the Corporation shall not be obligated
to issue certificates evidencing the shares of Common Stock issuable upon such
automatic conversion unless the certificates evidencing such shares of Preferred
Stock are either delivered to the Corporation or its transfer agent as provided
above, or the holder notifies the Corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates. The Corporation shall, as
soon as practicable after such delivery, or such agreement and indemnification
in the case of a lost certificate, issue and deliver at such office to such
holder of Preferred Stock, a certificate or certificates for the number of
shares of Common Stock to which he shall be entitled as aforesaid and a check
payable to the holder in the amount of any cash amounts payable as the result of
a conversion into fractional shares of Common Stock. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Preferred Stock to be converted, or in the
case of automatic conversion immediately prior to the closing of the offering or
on the effective date of such written consent, and the person or persons
entitled to receive
-5-
<PAGE> 6
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date.
(d) Adjustments to Conversion Price.
(i) Adjustments for Subdivisions, Stock
Dividends, Combinations or Consolidations of Common Stock. In the event the
Corporation effects a subdivision or combination of its outstanding shares of
Common Stock into a greater or smaller number of shares without a proportionate
and corresponding subdivision or combination of its outstanding shares of
Preferred Stock, then and in each such event the Conversion Price shall be
proportionally decreased or increased, respectively.
(ii) Adjustments for Other Dividends and
Distributions. In the event the Corporation at any time or from time to time
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, any distribution payable in securities of the Corporation
other than shares of Common Stock and other than as otherwise adjusted in this
Section 3, then and in each such event provision shall be made so that the
holders of Preferred Stock shall receive upon conversion thereof, in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Corporation which they would have received had their shares of
Preferred Stock been converted into Common Stock on the date of such event and
had they thereafter, during the period from the date of such event to and
including the date of conversion, retained such securities receivable by them as
aforesaid during such period, subject to all other adjustments called for during
such period under this Section 3 with respect to the rights of the holders of
the Preferred Stock.
(iii) Adjustments for Reclassification, Exchange
and Substitution. If the Common Stock issuable upon conversion of the Preferred
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock or other securities or property, whether by
capital reorganization, reclassification or otherwise, the Conversion Price then
in effect shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted such that the Preferred Stock
shall be convertible into, in lieu of the number of shares of Common Stock which
the holders would otherwise have been entitled to receive, a number of shares of
such other class or classes of stock or other securities or property equivalent
to the number of shares of Common Stock that would have been subject to receipt
by the holders upon conversion of the Preferred Stock immediately before that
change and, in any such case, appropriate adjustment (as determined by the
Board) shall be made in the application of the provisions herein set forth with
respect to the rights and interest thereafter of the holders of the Preferred
Stock, to the end that the provisions set forth herein (including provisions
with respect to change in and other adjustments of the Conversion Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the conversion of
the Preferred Stock.
(e) No Impairment. Except as provided in Section 5, the
Corporation will not, by amendment of its Articles of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by
-6-
<PAGE> 7
the Corporation but will at all times in good faith assist in the carrying out
of all the provisions of this Section 3 and in the taking of all such action as
may be necessary or appropriate in order to protect the Conversion Rights of the
holders of the Preferred Stock against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 3,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Preferred Stock.
(g) Notices of Record Date. In the event that this Corporation
shall propose at any time:
(i) to declare any dividend or distribution upon
its Common Stock, whether in cash, property, stock or other securities, whether
or not a regular cash dividend and whether or not out of earnings or earned
surplus;
(ii) to offer for subscription pro rata to the
holders of any class or series of its stock any additional shares of stock of
any class or series or other rights;
(iii) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in the
Common Stock; or
(iv) to merge or consolidate with or into any
other corporation, or sell, lease or convey all or substantially all its
property or business, or to liquidate, dissolve or wind up; then, in connection
with each such event, this Corporation shall send to the holders of the
Preferred Stock:
(1) at least 20 days' prior written notice
of the date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (iii) and (iv) above; and
(2) in the case of the matters referred to
in (iii) and (iv) above, at least 20 days' prior written notice of the date when
the same shall take place (and specifying the date on which the holders of
Common Stock shall be entitled to exchange their Common Stock for securities or
other property deliverable upon the occurrence of such event).
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<PAGE> 8
Each such written notice shall be delivered personally or by messenger
or given by express or first class mail, postage prepaid, addressed to the
holders of Preferred Stock at the address for each such holder as shown on the
books of this Corporation.
SECTION 4. VOTING RIGHTS.
Except as otherwise required by law or by Section 5 hereof, the holder
of each share of Common Stock issued and outstanding shall have one vote with
respect to such share and the holder of each share of Preferred Stock shall be
entitled with respect to such share to a number of votes equal to the number of
shares of Common Stock into which such share of Preferred Stock could be
converted at the record date for determination of the shareholders entitled to
vote on such matters, or, if no such record date is established, at the date
such vote is taken or any written consent of shareholders is solicited, such
votes to be counted together with all other shares of stock of the Company
having general voting power and not separately as a class. Holders of Common
Stock and Preferred Stock shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of the Corporation. Fractional votes by
the holders of Preferred Stock shall not, however, be permitted and any
fractional voting rights shall (after aggregating all shares into which shares
of Preferred Stock held by each holder could be converted) be rounded to the
nearest whole number.
SECTION 5. COVENANTS.
In addition to any other rights provided by law, so long as any
Preferred Stock shall be outstanding, this Corporation shall not, without first
obtaining the affirmative vote or written consent of the holders of not less
than a majority of such outstanding shares of Preferred Stock, voting together
as a single class:
(a) amend or repeal any provision of, or add any provision to,
this Corporation's Amended and Restated Articles of Incorporation if such action
would materially and adversely alter or change the preferences, rights,
privileges or powers of, or the restrictions provided for the benefit of, any
Preferred Stock;
(b) authorize, issue or obligate itself to issue shares of any
class of stock or any other security convertible into or exchangeable for shares
of any class of stock having any preference or priority as to dividends or
assets superior to or on a parity with any such preference or priority of any
Preferred Stock;
(c) reclassify any Common Stock or any other shares of this
Corporation other than the Preferred Stock into shares having any preference or
priority as to dividends or assets superior to or on a parity with any such
preference or priority of the Preferred Stock;
(d) increase the authorized number of shares of Preferred
Stock; or
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<PAGE> 9
(e) authorize a liquidation, dissolution, recapitalization or
reorganization of the Corporation, or a sale or transfer of all or substantially
all of the assets of the Corporation or a merger or consolidation of the
Corporation if, as a result of such merger or consolidation, the shareholders of
the Corporation shall own less than 50% of the voting securities of the
surviving corporation.
SECTION 6. NO REISSUANCE OF PREFERRED STOCK.
No share or shares of Preferred Stock acquired by this Corporation by
reason of redemption, purchase, conversion or otherwise shall be reissued, and
all such shares shall be canceled, retired and eliminated from the shares which
the Corporation shall be authorized to issue.
ARTICLE V
SECTION 1. LIMITATION OF DIRECTOR'S LIABILITY.
The liability of the directors of this Corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.
SECTION 2. INDEMNIFICATION OF CORPORATE AGENTS.
This Corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) through Bylaw
provisions, agreements with agents, vote of shareholders or disinterested
directors, or otherwise, to the fullest extent permissible under California law.
SECTION 3. REPEAL OR MODIFICATION.
Any amendment, repeal or modification of the foregoing provisions of
this Article IV shall not adversely affect any right of indemnification or
limitation of liability of an agent of this Corporation relating to acts or
omissions occurring prior to such amendment, repeal or modification.
ARTICLE VI
The name and mailing address of the incorporator are as follows:
Deborah Chang
650 Page Mill Road
Palo Alto, CA 94303-1050
The undersigned incorporator hereby acknowledges that the above
Certificate of Incorporation of Sagent Technology, Inc. is her act and deed and
that the facts stated therein are true.
Dated: September 4, 1998 /s/ Deborah Chang
---------------------
Deborah Chang
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<PAGE> 1
EXHIBIT 3.3
BYLAWS
OF
SAGENT TECHNOLOGY, INC
(a Delaware Corporation)
TABLE OF CONTENTS
<TABLE>
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ARTICLE I - CORPORATE OFFICES........................................................................................1
1.1 REGISTERED OFFICE.................................................................................1
1.2 OTHER OFFICES.....................................................................................1
ARTICLE II - MEETINGS OF STOCKHOLDERS................................................................................1
2.1 PLACE OF MEETINGS.................................................................................1
2.2 ANNUAL MEETING....................................................................................1
2.3 SPECIAL MEETING...................................................................................2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS..................................................................2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER
BUSINESS..........................................................................................2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE......................................................3
2.7 QUORUM............................................................................................4
2.8 ADJOURNED MEETING; NOTICE.........................................................................4
2.9 VOTING............................................................................................4
2.10 WAIVER OF NOTICE..................................................................................5
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING........................................................5
2.12 PROXIES...........................................................................................5
2.13 ORGANIZATION......................................................................................6
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE.............................................................6
ARTICLE III - DIRECTORS..............................................................................................6
3.1 POWERS............................................................................................6
3.2 NUMBER OF DIRECTORS...............................................................................6
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS..........................................................7
3.4 RESIGNATION AND VACANCIES.........................................................................7
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE..........................................................7
3.6 REGULAR MEETINGS..................................................................................7
3.7 SPECIAL MEETINGS; NOTICE..........................................................................8
3.8 QUORUM............................................................................................8
3.9 WAIVER OF NOTICE..................................................................................8
3.10 ADJOURNMENT.......................................................................................8
</TABLE>
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<PAGE> 2
TABLE OF CONTENTS
(Continued)
<TABLE>
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<S> <C>
3.11 NOTICE OF ADJOURNMENT.............................................................................9
3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.................................................9
3.13 FEES AND COMPENSATION OF DIRECTORS................................................................9
3.14 APPROVAL OF LOANS TO OFFICERS.....................................................................9
ARTICLE IV - COMMITTEES.............................................................................................10
4.1 COMMITTEES OF DIRECTORS..........................................................................10
4.2 MEETINGS AND ACTION OF COMMITTEES................................................................10
4.3 COMMITTEE MINUTES................................................................................11
ARTICLE V - OFFICERS................................................................................................11
5.1 OFFICERS.........................................................................................11
5.2 ELECTION OF OFFICERS.............................................................................11
5.3 SUBORDINATE OFFICERS.............................................................................11
5.4 REMOVAL AND RESIGNATION OF OFFICERS..............................................................12
5.5 VACANCIES IN OFFICES.............................................................................12
5.6 CHAIRMAN OF THE BOARD............................................................................12
5.7 PRESIDENT........................................................................................12
5.8 VICE PRESIDENTS..................................................................................12
5.9 SECRETARY........................................................................................13
5.10 CHIEF FINANCIAL OFFICER..........................................................................13
ARTICLE VI - INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND
OTHER AGENTS...............................................................................................14
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS........................................................14
6.2 INDEMNIFICATION OF OTHERS........................................................................15
6.3 INSURANCE........................................................................................15
ARTICLE VII - RECORDS AND REPORTS...................................................................................15
7.1 MAINTENANCE AND INSPECTION OF RECORDS............................................................15
7.2 INSPECTION BY DIRECTORS..........................................................................16
7.3 ANNUAL STATEMENT TO STOCKHOLDERS.................................................................16
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS...................................................16
7.5 CERTIFICATION AND INSPECTION OF BYLAWS...........................................................16
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(Continued)
<TABLE>
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ARTICLE VIII - GENERAL MATTERS......................................................................................16
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING............................................16
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS........................................................17
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED...............................................17
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES.................................................17
8.5 SPECIAL DESIGNATION ON CERTIFICATES..............................................................18
8.6 LOST CERTIFICATES................................................................................18
8.7 TRANSFER AGENTS AND REGISTRARS...................................................................19
8.8 CONSTRUCTION; DEFINITIONS........................................................................19
ARTICLE IX - AMENDMENTS.............................................................................................19
9.1 AMENDMENTS BY STOCKHOLDERS AND DIRECTORS.........................................................19
9.2 SUPERMAJORITY VOTE...............................................................................19
</TABLE>
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<PAGE> 4
BYLAWS
OF
SAGENT TECHNOLOGY, INC.
(a Delaware Corporation)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation shall be fixed in the
certificate of incorporation of the corporation.
1.2 OTHER OFFICES
The board of directors may at any time establish branch or subordinate
offices at any place or places where the corporation is qualified to do
business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at any place within or outside
the State of Delaware designated by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the principal
executive office of the corporation.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date
and at a time designated by the board of directors. In the absence of such
designation, the annual meeting of stockholders shall be held on the third
Tuesday of May in each year at 10:00 a.m. However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and place on the next
succeeding full business day. At the meeting, directors shall be elected, and
any other proper business may be transacted.
<PAGE> 5
2.3 SPECIAL MEETING
Except as otherwise required by law, a special meeting of the
stockholders may be called only by the Board of Directors, the Chairman of the
Board, or the President; provided however, that if at any time no directors
remain in office, then a special meeting for the purpose of electing directors
may be called in accordance with the procedure set forth in the Bylaws. No
business may be transacted at such special meeting otherwise than as specified
in the notice of such meeting.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings of stockholders shall be sent or otherwise
given in accordance with Section 2.6 of these bylaws not less than ten (10) nor
more than sixty (60) days before the date of the meeting. The notice shall
specify the place, date and hour of the meeting and (i) in the case of a special
meeting, the purpose or purposes for which the meeting is called (no business
other than that specified in the notice may be transacted) or (ii) in the case
of the annual meeting, those matters which the board of directors, at the time
of giving the notice, intends to present for action by the stockholders (but any
proper matter may be presented at the meeting for such action). The notice of
any meeting at which directors are to be elected shall include the name of any
nominee or nominees who, at the time of the notice, the board intends to present
for election.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER
BUSINESS
Subject to the rights of holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation,
(a) nominations for the election of directors, and
(b) business proposed to be brought before any
stockholder meeting
may be made by the board of directors or proxy committee appointed by the board
of directors or by any stockholder entitled to vote in the election of directors
generally if such nomination or business proposed is otherwise proper business
before such meeting. However, any such stockholder may nominate one or more
persons for election as directors at a meeting or propose business to be brought
before a meeting, or both, only if such stockholder has given timely notice to
the secretary of the corporation in proper written form of their intent to make
such nomination or nominations or to propose such business. To be timely, such
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not less than one hundred twenty
(120) calendar days in advance of the date of the corporation's proxy statement
released to stockholders in connection with the previous year's annual meeting
of stockholders; provided, however, that in the event that no annual meeting was
held in the previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time of the
previous year's proxy statement, notice by the stockholder to be timely must be
so received a reasonable time
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<PAGE> 6
before the solicitation is made. To be in proper form, a stockholder's notice to
the secretary shall set forth:
(i) the name and address of the stockholder who
intends to make the nominations or propose the business and, as the case may be,
of the person or persons to be nominated or of the business to be proposed;
(ii) a representation that the stockholder is a
holder of record of stock of the corporation entitled to vote at such meeting
and, if applicable, intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice;
(iii) if applicable, a description of all
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder;
(iv) such other information regarding each
nominee or each matter of business to be proposed by such stockholder as would
be required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had the nominee been nominated,
or intended to be nominated, or the matter been proposed, or intended to be
proposed by the board of directors; and
(v) if applicable, the consent of each nominee
to serve as director of the corporation if so elected.
The chairman of the meeting shall refuse to acknowledge the nomination
of any person or the proposal of any business not made in compliance with the
foregoing procedure.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the corporation or given by the stockholder to the
corporation for the purpose of notice. Notice shall be deemed to have been given
at the time when delivered personally or deposited in the mail or sent by
telegram or other means of written communication.
An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice.
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<PAGE> 7
2.7 QUORUM
The holders of a majority in voting power of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting in accordance
with Section 2.7 of these bylaws.
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the laws of the State of Delaware or
of the certificate of incorporation or these bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of the question.
If a quorum be initially present, the stockholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time and place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting the corporation may transact any business
that might have been transacted at the original meeting. If the adjournment is
for more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.11 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint
owners, and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of incorporation
or these bylaws, each stockholder shall be entitled to one vote for each share
of capital stock held by such stockholder with respect to any matter submitted
to a vote of the stockholders and stockholders shall not be entitled to cumulate
their votes in the election of directors.
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<PAGE> 8
2.10 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these bylaws.
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING
For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat, the board of directors may fix, in advance, a record
date, which shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors and which shall not be more
than sixty (60) days nor less than ten (10) days before the date of any such
meeting, and in such event only stockholders of record on the date so fixed are
entitled to notice and to vote, notwithstanding any transfer of any shares on
the books of the corporation after the record date.
If the board of directors does not so fix a record date, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned meeting,
but the board of directors shall fix a new record date if the meeting is
adjourned for more than thirty (30) days from the date set for the original
meeting.
The record date for any other purpose shall be as provided in Section
8.1 of these bylaws.
2.12 PROXIES
Every person entitled to vote for directors, or on any other matter,
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the secretary
of the corporation, but no such proxy shall be voted or acted upon after three
(3) years from its date unless the proxy provides for a longer period. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy (whether
by manual signature, typewriting, telegraphic transmission, telefacsimile or
otherwise) by the stockholder or the stockholder's attorney-in-fact. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Section 212(e) of the General Corporation Law of
Delaware.
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<PAGE> 9
2.13 ORGANIZATION
The president, or in the absence of the president, the chairman of the
board, or, in the absence of the president and the chairman of the board, one of
the corporation's vice presidents, shall call the meeting of the stockholders to
order, and shall act as chairman of the meeting. In the absence of the
president, the chairman of the board, and all of the vice presidents, the
stockholders shall appoint a chairman for such meeting. The chairman of any
meeting of stockholders shall determine the order of business and the procedures
at the meeting, including such matters as the regulation of the manner of voting
and the conduct of business. The secretary of the corporation shall act as
secretary of all meetings of the stockholders, but in the absence of the
secretary at any meeting of the stockholders, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware
and any limitations in the certificate of incorporation and these bylaws
relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
3.2 NUMBER OF DIRECTORS
The board of directors shall consist of six members. The board of
directors may increase or decrease the number of directors constituting the
board of directors upon the approval of a majority of the directors then in
office. The number of directors so determined shall be the
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<PAGE> 10
authorized number of directors of the corporation. No reduction of the
authorized number of directors shall have the effect of removing any director
before that director's term of office expires.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting. Each director, including a director elected or appointed to fill
a vacancy, shall hold office until the expiration of the term for which elected
and until a successor has been elected and qualified.
3.4 RESIGNATION AND VACANCIES
Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary or the board of directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a director is effective at a future time, the
board of directors may elect a successor to take office when the resignation
becomes effective.
All vacancies in the board of directors may be filled by a majority of
the remaining directors, even if less than a quorum, or by a sole remaining
director; provided, that whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the certificate of incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by a majority of the directors
elected by such class or classes or series thereof then in office, or by a sole
remaining director so elected.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the board of directors may be held at any place
within or outside the State of Delaware that has been designated from time to
time by resolution of the board. In the absence of such a designation, regular
meetings shall be held at the principal executive office of the corporation.
Special meetings of the board may be held at any place within or outside the
State of Delaware that has been designated in the notice of the meeting or, if
not stated in the notice or if there is no notice, at the principal executive
office of the corporation.
Any meeting, regular or special, may be held by conference telephone or
similar communication equipment, so long as all directors participating in the
meeting can hear one another; and all such directors shall be deemed to be
present in person at the meeting.
3.6 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice
if the times of such meetings are fixed by the board of directors. If any
regular meeting day shall fall on a legal holiday, then the meeting shall be
held next succeeding full business day.
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<PAGE> 11
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. If the notice is mailed, it
shall be deposited in the United States mail at least four (4) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or telegram, it shall be delivered personally or by telephone or to
the telegraph company at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly communicate
it to the director. The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive office of the
corporation.
3.8 QUORUM
A majority of the authorized number of directors shall constitute a
quorum for the transaction of business, except to adjourn as provided in Section
3.10 of these bylaws. Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be
regarded as the act of the board of directors, subject to the provisions of the
certificate of incorporation and other applicable law.
A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.
3.9 WAIVER OF NOTICE
Notice of a meeting need not be given to any director (i) who signs a
waiver of notice or a consent to holding the meeting or an approval of the
minutes thereof, whether before or after the meeting, or (ii) who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to such directors. All such waivers, consents, and approvals shall be
filed with the corporate records or made part of the minutes of the meeting. A
waiver of notice need not specify the purpose of any regular or special meeting
of the board of directors.
3.10 ADJOURNMENT
A majority of the directors present, whether or not constituting a
quorum, may adjourn any meeting to another time and place.
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<PAGE> 12
3.11 NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting need not
be given unless the meeting is adjourned for more than twenty-four (24) hours.
If the meeting is adjourned for more than twenty-four (24) hours, then notice of
the time and place of the adjourned meeting shall be given before the adjourned
meeting takes place, in the manner specified in Section 3.7 of these bylaws, to
the directors who were not present at the time of the adjournment.
3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the board of directors
may be taken without a meeting, provided that all members of the board
individually or collectively consent in writing to that action. Such action by
written consent shall have the same force and effect as a unanimous vote of the
board of directors. Such written consent and any counterparts thereof shall be
filed with the minutes of the proceedings of the board.
3.13 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if
any, for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.13 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
3.14 APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or any of its
subsidiaries, including any officer or employee who is a director of the
corporation or any of its subsidiaries, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
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ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one (1) or more committees, each
consisting of two or more directors, to serve at the pleasure of the board. The
board may designate one (1) or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the committee.
The appointment of members or alternate members of a committee requires the vote
of a majority of the authorized number of directors. Any committee, to the
extent provided in the resolution of the board, shall have and may exercise all
the powers and authority of the board, but no such committee shall have the
power of authority to:
(a) amend the certificate of incorporation (except that a
committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the board of directors
as provided in Section 151(a) of the General Corporation Law of Delaware, fix
the designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the corporation);
(b) adopt an agreement of merger or consolidation under
Sections 251 or 252 of the General Corporation Law of Delaware;
(c) recommend to the stockholders the sale, lease or exchange
of all or substantially all of the corporation's property and assets;
(d) recommend to the stockholders a dissolution of the
corporation or a revocation of a dissolution; or
(e) amend the bylaws of the corporation; and, unless the board
resolution estab lishing the committee, the bylaws or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these bylaws, Section
3.5 (place of meetings), Section 3.6 (regular meetings), Section 3.7 (special
meetings and notice), Section 3.8 (quorum), Section 3.9
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(waiver of notice), Section 3.10 (adjournment), Section 3.11 (notice of
adjournment), and Section 3.12 (action without meeting), with such changes in
the context of those bylaws as are necessary to substitute the committee and its
members for the board of directors and its members; provided, however, that the
time of regular meetings of committees may be determined either by resolution of
the board of directors or by resolution of the committee, that special meetings
of committees may also be called by resolution of the board of directors, and
that notice of special meetings of committees shall also be given to all
alternate members, who shall have the right to attend all meetings of the
committee. The board of directors may adopt rules for the government of any
committee not inconsistent with the provisions of these bylaws.
4.3 COMMITTEE MINUTES.
Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the corporation shall be a president, a secretary, and
a chief financial officer. The corporation may also have, at the discretion of
the board of directors, a chairman of the board, one or more vice presidents,
one or more assistant secretaries, one or more assistant treasurers, and such
other officers as may be appointed in accordance with the provisions of Section
5.3 of these bylaws. Any number of offices may be held by the same person.
5.2 ELECTION OF OFFICERS
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these bylaws, shall be chosen by the board, subject to the rights, if any, of an
officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or may empower the president to
appoint, such other officers as the business of the corporation may require,
each of whom shall hold office for such period, have such authority, and perform
such duties as are provided in these bylaws or as the board of directors may
from time to time determine.
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5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by the
board of directors at any regular or special meeting of the board or, except in
case of an officer chosen by the board of directors, by any officer upon whom
such power of removal may be conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these bylaws. If there is no
president, then the chairman of the board shall also be the chief executive
officer of the cor poration and shall have the powers and duties prescribed in
Section 5.7 of these bylaws.
5.7 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction, and control of the business and the officers of the corporation. He
shall preside at all meetings of the stockholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors. He shall have the general powers and duties of management usually
vested in the office of president of a corporation, and shall have such other
powers and duties as may be prescribed by the board of directors or these
bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or, if not
ranked, a vice president designated by the board of directors, shall perform all
the duties of the president and when so acting shall have all the powers of, and
be subject to all the restrictions upon, the president. The vice presidents
shall have such
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other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors, these bylaws, the
president or the chairman of the board.
5.9 SECRETARY
The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of
directors, committees of directors and stockholders. The minutes shall show the
time and place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
stockholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolu tion of the board of
directors, a share register, or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares, and the number
and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law or
by these bylaws. He shall keep the seal of the corporation, if one be adopted,
in safe custody and shall have such other powers and perform such other duties
as may be prescribed by the board of directors or by these bylaws.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings, and shares. The books of account shall at all reasonable
times be open to in spection by any director.
The chief financial officer shall deposit all money and other valuables
in the name and to the credit of the corporation with such depositaries as may
be designated by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors, shall render to the
president and directors, whenever they request it, an account of all of his
transactions as chief financial officer and of the financial condition of the
corporation, and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or these bylaws.
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ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES,
AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the maximum extent and in the manner
permitted by the General Corporation Law of Delaware as the same now exists or
may hereafter be amended, indemnify any person against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit, or proceeding in which such person was or is a party or is
threatened to be made a party by reason of the fact that such person is or was a
director or officer of the corporation. For purposes of this Section 6.1, a
"director" or "officer" of the corporation shall mean any person (i) who is or
was a director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was a
director or officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
The corporation shall be required to indemnify a director or officer in
connection with an action, suit, or proceeding (or part thereof) initiated by
such director or officer only if the initiation of such action, suit, or
proceeding (or part thereof) by the director or officer was authorized by the
Board of Directors of the corporation.
The corporation shall pay the expenses (including attorney's fees)
incurred by a director or officer of the corporation entitled to indemnification
hereunder in defending any action, suit or proceeding referred to in this
Section 6.1 in advance of its final disposition; provided, however, that payment
of expenses incurred by a director or officer of the corporation in advance of
the final disposition of such action, suit or proceeding shall be made only upon
receipt of an undertaking by the director or officer to repay all amounts
advanced if it should ultimately be determined that the director of officer is
not entitled to be indemnified under this Section 6.1 or otherwise.
The rights conferred on any person by this Article shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the corporation's Certificate of Incorporation,
these bylaws, agreement, vote of the stockholders or disinterested directors or
otherwise.
Any repeal or modification of the foregoing provisions of this Article
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.
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6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware as the same now
exists or may hereafter be amended, to indemnify any person (other than
directors and officers) against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit, or
proceeding, in which such person was or is a party or is threatened to be made a
party by reason of the fact that such person is or was an employee or agent of
the corporation. For purposes of this Section 6.2, an "employee" or "agent" of
the corporation (other than a director or officer) shall mean any person (i) who
is or was an employee or agent of the corporation, (ii) who is or was serving at
the request of the corporation as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was an
employee or agent of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
6.3 INSURANCE
The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify him or her
against such liability under the provisions of the General Corporation Law of
Delaware.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive office or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records of its business and properties.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be
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accompanied by a power of attorney or such other writing that authorizes the
attorney or other agent to so act on behalf of the stockholder. The demand under
oath shall be directed to the corporation at its registered office in Delaware
or at its principal place of business.
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine (and to make copies of)
the corporation's stock ledger, a list of its stockholders and its other books
and records for a purpose reasonably related to his or her position as a
director.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, if any, the president, any vice president,
the chief financial officer, the secretary or any assistant secretary of this
corporation, or any other person authorized by the board of directors or the
president or a vice president, is authorized to vote, represent and exercise on
behalf of this corporation all rights incident to any and all shares of the
stock of any other corporation or corporations standing in the name of this
corporation. The authority herein granted may be exercised either by such person
directly or by any other person authorized to do so by proxy or power of
attorney duly executed by such person having the authority.
7.5 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these bylaws, as amended or otherwise altered
to date, certified by the secretary, shall be kept at the corporation's
principal executive office and shall be open to inspection by the stockholders
of the corporation, at all reasonable times during office hours.
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) days before any such action. In that case, only
stockholders of
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record at the close of business on the date so fixed are entitled to receive the
dividend, distribution or allotment of rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any shares on the books of the
corporation after the record date so fixed, except as otherwise provided in the
General Corporation Law of Delaware.
If the board of directors does not so fix a record date, then the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board adopts the applicable
resolution.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The board of directors, except as otherwise provided in these bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES
The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and, upon request,
every holder of uncertificated shares, shall be entitled to have a certificate
signed by, or in the name of the corporation by, the chairman or vice-chairman
of the board of directors, or the president or vice-president, and by the
treasurer or an assistant treasurer, or the secretary or an assistant secretary
of such corporation representing the number of shares registered in certificate
form. Any or all of the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate has ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he or she were such officer,
transfer agent or registrar at the date of issue.
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Certificates for shares shall be of such form and device as the board
of directors may designate and shall state the name of the record holder of the
shares represented thereby; its number; date of issuance; the number of shares
for which it is issued; a summary statement or reference to the powers,
designations, preferences or other special rights of such stock and the
qualifications, limitations or restrictions of such preferences and/or rights,
if any; a statement or summary of liens, if any; a conspicuous notice of
restrictions upon transfer or registration of transfer, if any; a statement as
to any applicable voting trust agreement; if the shares be assessable, or, if
assessments are collectible by personal action, a plain statement of such facts.
Upon surrender to the secretary or transfer agent of the corporation of
a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, or upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.5 SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences and the relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
8.6 LOST CERTIFICATES
Except as provided in this Section 8.6, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and canceled at the same time. The board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms
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and conditions as the board may require; the board may require indemnification
of the corporation secured by a bond or other adequate security sufficient to
protect the corporation against any claim that may be made against it, including
any expense or liability, on account of the alleged loss, theft or destruction
of the certificate or the issuance of the replacement certificate.
8.7 TRANSFER AGENTS AND REGISTRARS
The board of directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, each of which shall be an
incorporated bank or trust company -- either domestic or foreign, who shall be
appointed at such times and places as the requirements of the corporation may
necessitate and the board of directors may designate.
8.8 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a corporation and a natural
person.
ARTICLE IX
AMENDMENTS
9.1 AMENDMENTS BY STOCKHOLDERS AND DIRECTORS
The original or other bylaws of the corporation may be adopted, amended
or repealed by the stockholders entitled to vote or by the board of directors of
the corporation. The fact that such power has been so conferred upon the
directors shall not divest the stockholders of the power, nor limit their power
to adopt, amend or repeal bylaws.
Whenever an amendment or new bylaw is adopted, it shall be copied in
the book of bylaws with the original bylaws, in the appropriate place. If any
bylaw is repealed, the fact of repeal with the date of the meeting at which the
repeal was enacted or the filing of the operative written consent(s) shall be
stated in said book.
9.2 SUPERMAJORITY VOTE
Notwithstanding anything to the contrary in the bylaws, neither Section
2.3 (special meeting), Section 2.5 (advance notice of stockholder nominees and
stockholder business), nor this Section 9.2 (supermajority vote) of the bylaws
shall be repealed or amended, nor shall any provision inconsistent
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with the aforementioned provisions be adopted and added to the bylaws except
upon the affirmative vote of not less than two-thirds of the shares of the
corporation issued and outstanding.
Amended and Restated Bylaws adopted by the Board of Directors of the
Corporation at Mountain View, California, this 22nd day of January, 1999.
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EXHIBIT 4.2
SAGENT TECHNOLOGY, INC.
SIXTH AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS SIXTH AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT is made
as of February 24, 1998(the "Agreement") by and among SAGENT TECHNOLOGY, INC., a
California corporation (the "Company"), the purchasers of Series E Preferred
Stock of the Company (the "Series E Investors"), who represent a majority of the
outstanding shares of Preferred Stock of the Company, and Kenneth C. Gardner,
John Zicker, Alice Blair, Craig R. Powers and Robert E. Powers (collectively,
the "Founders" and each individually a "Founder").
RECITALS
WHEREAS, the Company, the Founders, the purchasers of Series A
Preferred Stock pursuant to the Series A Preferred Stock Purchase Agreement,
dated May 26, 1995, the purchasers of Series B Preferred Stock pursuant to the
Series B Preferred Stock Purchase Agreement, dated November 15, 1995, the
purchasers of Series C Preferred Stock pursuant to the Series C Preferred Stock
Purchase Agreement, dated September 30, 1996, Stewart Schuster, an individual
and investor of the Company's Series A Preferred Stock pursuant to a Series A
Preferred Stock Purchase Agreement, dated October 10, 1995, Dennis Jones and
Ralph Kimball, individuals and investors of the Company's Series C Preferred
Stock, pursuant to Series C Preferred Stock Purchase Agreements, dated March 17,
1997 and June 16, 1997 respectively, and the purchasers of Series D Preferred
Stock pursuant to the Series D Preferred Stock Purchase Agreement dated as of
August 4, 1997 and September 26, 1997 (collectively, the "Prior Investors") are
parties to a Fifth Amended and Restated Registration Rights Agreement dated as
of August 4, 1997 (together with all amendments, the "Prior Agreement"); and
WHEREAS, the Prior Agreement sets forth all the registration rights
(collectively the "Registration Rights") of the Prior Investors; and
WHEREAS, the Series E Investors, in connection with their proposal to
purchase up to 1,895,370 shares of the Company's Series E Preferred Stock
pursuant to the Series E Preferred Stock Purchase Agreement dated as of February
24, 1998 (the "Series E Agreement"), desire to obtain such Registration Rights;
and
WHEREAS, the Company and a majority of the Prior Investors, on behalf
of all Prior Investors, to induce the Series E Investors to purchase Series E
Preferred Stock pursuant to a Series E Preferred Stock Purchase Agreement (the
"Series E Agreement"), desire to grant the Series E Investors the Registration
Rights, all as detailed herein.
NOW, THEREFORE, the parties hereto agree that, subject to the closing
of the purchase of Series E Preferred Stock by the Series E Investors pursuant
to the Series E Agreement: (i) the Prior Agreement is terminated and of no
further force and effect; (ii) the Company and a majority of the Prior
Investors, on behalf of all Prior Investors, hereby grant to the Series E
Investors the rights set forth below; and (iii) the Company, a majority of the
Prior Investors, on behalf of all Prior Investors, and the Series E Investors
and
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as a condition of closing of the Series E Agreement, accept and agree to the
termination of all prior registration rights agreements and accept and agree to
be bound by the terms of this Agreement.
SECTION 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. Hereafter, in this Agreement the following
terms shall have the following respective meanings:
"Purchaser" shall mean each of the Series A Investors, the
Series B Investors, the Series C Investors, the Series D Investors and the
Series E Investors referred to individually as listed in Exhibit A.
"Purchasers" shall mean all the Series A Investors, the Series
B Investors, the Series C Investors, the Series D Investors and the Series E
Investors referred to collectively as listed in Exhibit A.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Preferred" means the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, and
the Series E Preferred Stock of the Company.
"Conversion Stock" means the Common Stock issued or issuable
pursuant to conversion of the Preferred.
"Holder" shall mean (i) any Purchaser holding Registrable
Securities (including Preferred) and any person holding Registrable Securities
to whom the rights under this Agreement have been transferred in accordance
with Section 2.14 hereof and (ii) Lighthouse Capital Partners, L.P.
("Lighthouse").
"Initiating Holders" shall mean any Purchasers or transferees
of Purchasers under Sec tion 2.14 hereof who in the aggregate are Holders of
greater than 50% of the Registrable Securities.
"Registrable Securities" means (i) the Conversion Stock; (ii)
all the shares of common stock issued or issuable upon the conversion of the
shares of Series A Preferred Stock or Series B Preferred Stock now or hereafter
held by Lighthouse (including the Series A Preferred Stock and Series B
Preferred Stock issuable upon exercise of the warrants to purchase Series A
Preferred Stock and Series B Preferred Stock held by Lighthouse) (collectively
the "Lighthouse Stock"), and (iii) any Common Stock of the Company issued or
issuable in respect of the Conversion Stock, the Lighthouse Stock or other
securities issued or issuable pursuant to the conversion of the Preferred upon
any stock split, stock dividend, recapitalization, or similar event, or any
Common Stock otherwise issued or issuable with respect to the Preferred;
provided,
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however, that shares of Common Stock or other securities shall only be treated
as Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, whether in a registered offering, Rule 144 transaction
or otherwise, or (B) sold or are available for sale in the opinion of counsel to
the Company in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act so that all transfer restrictions
and restrictive legends with respect thereto are removed upon the consummation
of such sale; provided, however, that the Company's stock is then publicly
traded.
The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Sections 2.4,
2.5 and 2.6 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company) and the reasonable fees and disbursements
of one counsel for all Holders in the event of one exercise of a requested
registration provided for in Section 2.4 hereof, in the event of two Company
registrations pursuant to Section 2.5 hereof, and for all Company registrations
on Form S-3 pursuant to Section 2.6 hereof.
"Restricted Securities" shall mean the securities of the
Company required to bear the legend set forth in Section 2.2 hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and, except as set forth above, all reasonable fees
and disbursements of counsel for any Holder.
SECTION 2
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
COMPLIANCE WITH SECURITIES ACT; REGISTRATION RIGHTS
2.1 RESTRICTIONS ON TRANSFERABILITY. The Preferred and the Conversion
Stock shall not be sold, assigned, transferred or pledged except upon the
conditions specified in this Section 2, which conditions are intended to ensure
compliance with the provisions of the Securities Act. Each Purchaser will cause
any
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<PAGE> 4
proposed purchaser, assignee, transferee, or pledgee of the Preferred or such
Common Stock held by a Purchaser to agree to take and hold such securities
subject to the provisions and upon the conditions specified in this Section 2.
2.2 RESTRICTIVE LEGEND. Each certificate representing (i) the
Preferred, (ii) the Conversion Stock, and (iii) any other securities issued in
respect of the Preferred or the Conversion Stock upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall
(unless otherwise permitted by the provisions of Section 2.3 below) be stamped
or otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID
ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
Each Purchaser and Holder consents to the Company making a
notation on its records and giving instructions to any transfer agent of the
Preferred or the Common Stock in order to implement the restrictions on transfer
established in this Section 2.
2.3 NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 2.3. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership or (ii) in transactions
involving the distribution without consideration of Restricted Securities by any
of the Purchasers to any of its partners, or retired partners, or to the estate
of any of its partners or retired partners), unless there is in effect a
registration statement under the Securities Act covering the proposed transfer,
the holder thereof shall give written notice to the Company of such holder's
intention to effect such transfer, sale, assignment or pledge. Each such notice
shall describe the manner and circumstances of the proposed transfer, sale,
assignment or pledge in sufficient detail, and shall be accompanied, at such
holder's expense by either (i) an unqualified written opinion of legal counsel,
who shall be and whose legal opinion shall be reasonably satisfactory to the
Company, addressed to the Company, to the effect that the proposed transfer of
the Restricted Securities may be effected without registration under the
Securities Act, or (ii) a "no action" letter from the Commission to the effect
that the transfer of such securities without registration will not result in a
recommendation
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<PAGE> 5
by the staff of the Commission that action be taken with respect thereto,
whereupon the holder of such Restricted Securities shall be entitled to transfer
such Restricted Securities in accordance with the terms of the notice delivered
by the holder to the Company. Each certificate evidencing the Restricted
Securities transferred as above provided shall bear, except if such transfer is
made pursuant to Rule 144, the appropriate restrictive legend set forth in
Section 2.2 above, except that such certificate shall not bear such restrictive
legend if in the opinion of counsel for such holder and the Company such legend
is not required in order to establish compliance with any provision of the
Securities Act.
2.4 REQUESTED REGISTRATION.
(a) Request for Registration. In case the Company shall
receive from Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to not less than ten
percent (10%) of the shares (appropriately adjusted for Recapitalizations) of
Registrable Securities, or any lesser number of shares if the anticipated
aggregate offering price, net of underwriting discounts and commissions, would
exceed $10 million, the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts
to effect such registration, qualification or compliance (including, without
limitation, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental requirements or regulations)
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within 20 days after receipt of such
written notice from the Company; provided, however, that the Company shall not
be obligated to take any action to effect any such registration, qualification
or compliance pursuant to this Section 2.4:
(A) In any particular jurisdiction in which
the Company would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance unless the Company
is already subject to service in such jurisdiction and except as may be required
by the Securities Act;
(B) Prior to December 31, 1999;
(C) During the period starting with the
date sixty (60) days prior to the Company's estimated date of filing of, and
ending on the date six (6) months immediately following the effective date of,
any registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided
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<PAGE> 6
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective;
(D) After the Company has effected two such
registrations pursuant to this subparagraph 2.4(a), and such registrations have
been declared or ordered effective;
(E) If the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors it would be seriously detrimental
to the Company or its shareholders for a registration statement to be filed in
the near future, then the Company's obligation to use its best efforts to
register, qualify or comply under this Section 2.4 shall be deferred for a
period not to exceed 120 days from the date of receipt of written request from
the Initiating Holders.
Subject to the foregoing clauses (A) through (E), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable, after receipt of the request or
requests of the Initiating Holders.
(b) Underwriting. In the event that a registration pursuant to
Section 2.4 is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the notice given pursuant to
Section 2.4(a)(i). In such event, the right of any Holder to registration
pursuant to Section 2.4 shall be conditioned upon such Holder's participation in
the underwriting arrangements required by this Section 2.4, and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by a majority in interest of the Initiating Holders, but subject to the
Company's reasonable approval. Notwithstanding any other provision of this
Section 2.4, if the managing underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Company shall so advise all holders of Registrable
Securities and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders thereof in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities held by such Holders at the time of filing the
registration statement. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to
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<PAGE> 7
90 days after the effective date of such registration, or such other shorter
period of time as the underwriters may require.
2.5 COMPANY REGISTRATION.
(a) Notice of Registration. If at any time or from time to
time the Company shall determine to register any of its securities, either for
its own account or the account of a security holder or holders, other than (i)
in connection with the Company's initial public offering, or (ii) a registration
relating solely to employee benefit plans, or (iii) a registration relating
solely to a Commission Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice
thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 20 days after receipt of such written notice from the
Company, by any Holder.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.5(a)(i). In such event the right of any Holder to
registration pursuant to Section 2.5 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 2.5, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the Registrable
Securities to be included in such registration. The Company shall so advise all
Holders and other holders distributing their securities through such
underwriting and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders and such other holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and such other
holders at the time of filing the registration statement. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to any Holder or holder to the nearest 100
shares. If any Holder or holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 90 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
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<PAGE> 8
(c) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 2.5 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
2.6 REGISTRATION ON FORM S-3.
(a) If any Holder or Holders holding in the aggregate not less
than 5% of the then-outstanding Registrable Securities request that the Company
file a registration statement on Form S-3 (or any successor form to Form S-3)
for a public offering of shares of the Registrable Securities the reasonably
anticipated aggregate offering price to the public of which, net of underwriting
discounts and commissions, would exceed $1,000,000, and the Company is a
registrant entitled to use Form S-3 to register the Registrable Securities for
such an offering, the Company shall use its best efforts to cause such
Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as the
Holder or Holders may reasonably request; provided, however, that the Company
shall not be required to effect more than one registration pursuant to this
Section 2.6 in any six (6) month period or in excess of two registrations under
this Section 2.6. The substantive provisions of Section 2.4(b) shall be
applicable to each registration initiated under this Section 2.6.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 2.6: (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act; (ii) if the Company, within
ten (10) days of the receipt of the request of the initiating Holders, gives
notice of its bona fide intention to effect the filing of a registration
statement with the Commission within ninety (90) days of receipt of such request
(other than with respect to a registration statement relating to a Rule 145
transaction, an offering solely to employees or any other registration which is
not appropriate for the registration of Registrable Securities); (iii) during
the period starting with the date sixty (60) days prior to the Company's
estimated date of filing of, and ending on the date six (6) months immediately
following, the effective date of any registration statement pertaining to
securities of the Company (other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan), provided that the
Company is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or (iv) if the Company shall furnish
to such Holder a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its shareholders for registration statements to be
filed in the near future, then the Company's obligation to use its best efforts
to file a registration statement shall be deferred for a period not to exceed
120 days from the receipt of the request to file such registration by such
Holder.
2.7 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
Closing Date, the Company shall not enter into any agreement granting any holder
or prospective holder of any securities of the Company registration rights with
respect to such securities unless (i) such new registration rights, including
standoff obligations, are on a pari passu basis with those rights of the Holders
hereunder; or
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<PAGE> 9
(ii) such new registration rights, including standoff obligations, are
subordinate to the registration rights granted Holders hereunder. Any such
additional parties may execute a counterpart of this Agreement, and upon
execution by such additional parties and by the Company, shall be considered a
Holder for all purposes of this Agreement.
2.8 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with (i) one registration pursuant to Section 2.4, (ii) two
registrations pursuant to Section 2.5, and (iii) all registrations pursuant to
Section 2.6 shall be borne by the Company. Unless otherwise stated, all Selling
Expenses relating to securities registered on behalf of the Holders and all
other Registration Expenses shall be borne by the Holders of such securities pro
rata on the basis of the number of shares so registered.
2.9 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 2,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least one hundred
eighty (180) days or until the distribution described in the Registration
Statement has been completed;
(b) Furnish to the Holders participating in such registration
and to the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities.
2.10 INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its
officers and directors and partners, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Section 2, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of the Securities Act or any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers and
directors, and each person control-
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<PAGE> 10
ling such Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder, controlling person or underwriter and stated to be specifically for use
therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein. Notwithstanding the foregoing, the
liability of each Holder under this subsection (b) shall be limited in an amount
equal to the initial public offering price of the shares sold by such Holder,
unless such liability arises out of or is based on willful conduct by such
Holder.
(c) Each party entitled to indemnification under this Section
2.10 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate and different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement
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<PAGE> 11
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
2.11 TERMINATION OF REGISTRATION RIGHTS. The rights granted pursuant to
this Agreement shall terminate as to any Holder five (5) years after the closing
of an underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer and
sale of common stock for the account of the Company to the public.
2.12 INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held
by them and the distribution proposed by such Holder or Holders as the Company
may request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Section 2.
2.13 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended.
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (at any time
after it has become subject to such reporting requirements);
(c) So long as a Purchaser owns any Restricted Securities to
furnish to the Purchaser forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Securities Exchange Act of 1934 (at
any time after it has become subject to such reporting requirements), a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company and other information in the possession of
or reasonably obtainable by the Company as a Purchaser may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Purchaser
to sell any such securities without registration.
2.14 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company
to register securities granted Purchasers under Sections 2.4, 2.5 and 2.6 may be
assigned to a transferee or assignee reasonably acceptable to the Company in
connection with any transfer or assignment of Registrable Securities by a
Purchaser provided that: (i) such transfer may otherwise be effected in
accordance with applicable
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<PAGE> 12
securities laws, and (ii) such assignee or transferee acquires at least 100,000
shares of Preferred and/or Common Stock issued upon conversion thereof
(appropriately adjusted for Recapitalizations). Notwithstanding the foregoing,
the rights to cause the Company to register securities may be assigned to any
constituent partner of a Purchaser, without compliance with item (ii) above,
provided written notice thereof is promptly given to the Company.
2.15 STANDOFF AGREEMENT. Each Holder agrees in connection with the
Company's initial public offering of the Company's securities that, upon request
of the Company or the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed one hundred eighty (180) days) from the effective date of
such registration as may be requested by the underwriters; provided, that the
officers and directors of the Company who own stock of the Company also agree to
such restrictions.
SECTION 3
EFFECT OF THIS AGREEMENT
3.1 TERMINATION OF OTHER RIGHTS. The Company and the Purchasers
acknowledge and agree that this Agreement supersedes the Prior Agreement, and
hence such agreement is terminated in its entirety. All parties hereto
acknowledge and agree that this Agreement supersedes any and all prior
registration rights granted by the Company to them, and that such rights are
terminated in their entirety.
SECTION 4
MISCELLANEOUS
4.1 GOVERNING LAW. This Agreement shall be governed and construed in
all respects in accordance with the laws of the State of California as applied
to agreements made and performed in California by residents of the State of
California.
4.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subjects hereof, and no party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except or specifically
set forth herein. Except as expressly provided herein, neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought; provided, however, that
holders of a majority of the Common Stock issued or issuable upon conversion of
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<PAGE> 13
the Preferred may, with the Company's prior written consent, waive, modify or
amend on behalf of all holders, any provisions hereof.
4.3 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid or otherwise delivered by hand or by messenger,
addressed (a) if to a Purchaser (including Lighthouse) at such Purchaser's
address set forth in Exhibit A, or at such other address as such Purchaser shall
have furnished to the Company in writing or (b) if to any other holder of any
shares of Company Stock, at such address as such holder shall have furnished the
Company in writing, or until any such holder so furnishes an address to the
Company, then to and at the address of the last holder of such shares who has so
furnished an address to the Company, or (c) if to the Company, one copy should
be sent to its address set forth in Exhibit B and addressed to the attention of
the Corporate Secretary or at such other address as the Company shall have
furnished to the Purchasers.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
seventy-two (72) hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed and
mailed as aforesaid.
4.4 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
4.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
4.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
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<PAGE> 14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SAGENT TECHNOLOGY, INC.
By: /s/ KENNETH C. GARDNER
------------------------------------
Title:
----------------------------------
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FOUNDERS
- -------------------------------- -------------------------------------------
Kenneth C. Gardner John Zicker
- -------------------------------- -------------------------------------------
Alice Blair Craig R. Powers
- --------------------------------
Robert E. Powers
SERIES E INVESTORS
EL DORADO VENTURES IV, L.P.
By: El Dorado Venture Partners IV, LLC
Its: General Partner
/s/ SHANDA BAHLES
-------------------------------------------
By: Shanda Bahles
Managing Member
EL DORADO TECHNOLOGY '98, L.P.
By: El Dorado Venture Partners IV, LLC.
Its: General Partner
/s/ SHANDA BAHLES
-------------------------------------------
By: Shanda Bahles
Managing Member
/s/ DAVID N. STROM
-------------------------------------------
GREYLOCK EQUITY LIMITED PARTNERSHIP
By: Greylock Equity GP Limited Partnership
Its: General Partner
David N. Strom
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<PAGE> 16
/s/ RICH SHAPERO
-------------------------------------------
CROSSPOINT VENTURE PARTNERS 1997
By: Rich Shapero
Its: General Partner
/s/ JEFFREY T. WEBBER
-------------------------------------------
RBW INVESTMENTS, LLC
By: Jeffrey T. Webber
Its: Managing Director
/s/ JEFFREY T. WEBBER
-------------------------------------------
THE ENTREPRENEURS' FUND, L.P.
By: BW Management, LLC
Its: General Partner
By: Jeffrey T. Webber, Managing Director
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<PAGE> 17
EXHIBIT A
SCHEDULE OF INVESTORS
Crosspoint Venture Partners 1993
Crosspoint 1993 Entrepreneurs Fund
Rich Shapero
One First Street
Los Altos, CA 94022
El Dorado Ventures III, L.P.
El Dorado Technology IV, L.P.
c/o Shanda Bahles
20300 Stevens Creek Blvd.
Suite 395
Cupertino, CA 95014
Delaware Charter Guarantee & Trust Co.,
Trustee FBO Kenneth C. Gardner, IRA
829 Hermosa Way
Menlo Park, CA 94025
Delaware Charter Guarantee & Trust Co.,
Trustee FBO John E. Zicker, IRA
451 Portola Road
Portola Valley, CA 94028
Craig Powers
2036 Lyon Avenue
Belmont, CA 94002
Robert Powers
182 Dogwood Court
Hayward, CA 94544
Alice Blair
252 2nd Avenue
San Francisco, CA 94118
James Shircliff
5100 Olde Creek Way
Prospect, KY 40059
Arthur F. Schneiderman
Jason A. Schneiderman
Jeffrey A. Schneiderman
Jennifer A. Schneiderman
Jonathan A. Schneiderman
Julie A. Schneiderman
230 Woodside Road
Woodside, CA 94062
Meriken Nominees Ltd.
Attn: Tony Geoghegan
c/o Aall Trust & Banking Corporation Ltd.
The Aall Building
P.O. Box 1166
Grand Cayman, Cayman Islands
British West Indies
Jeffrey T. Webber
c/o R.B. Webber & Co.
1717 Embarcadero Road
Palo Alto, CA 94303
(415)424-9900
Scott Willey
663 Princeton Drive
Sunnyvale, CA 94087
<PAGE> 18
WS Investments
Attn: Linda Wilson
650 Page Mill Road
Palo Alto, CA 94304-1050
Judith Jordan Webber
c/o Jordan Sparkling Wine
150 North Street
Healdsburg, CA 95448
James D. Woodward and Elaine K. Waski,
Trustees of the Woodward Family Trust
dated 8/23/90
9817 Koupela Drive
Raleigh, NC 27614
Eugene Webber, Trustee of the Webber Family
Trust dated 1/6/89
1806 Vallejo Street
San Francisco, CA 94123
J.F. Brilando, Inc.
241 S. Balsamina Way
Portola Valley, CA 94028
Stephen K. Plume, III
24 Loveland Hill Road
White River Junction, VT 05001
Stephen K. Plume, IV
473 Dell Avenue
Mountain View, CA 94043
Jordan Consulting Group
Attn: Stephen A. Jordan
12600 Viscaino Court
Los Altos Hills, CA 94022
William Elmore
c/o Merrill Pickard ET AL
2480 Sand Hill Road
Menlo Park, CA 94025
Robert Lauridsen and Patricia Lauridsen
1785 Bay Laurel Drive
Menlo Park, CA 94025
S-1 Trust c/o Peter Thorne
42 Pleasant Street
Watertown, MA 02172
Robert Spencer
27857 Altamont Circle
Los Altos Hills, CA 94022
Perry S. Mizota
2075 Sutter Street, #221
San Francisco, CA 94115
Stewart A. Schuster
1858 Rockspring Place
Walnut Creek, CA 94596
Greylock Equity Limited Partnership
c/o David N. Strohm
755 Page Mill Road
Suite A-100
Palo Alto, CA 94304-1018
Dan Shelley
29920 43rd Ave. South
Auburn, WA 98001
U.S. Venture Partners IV, L.P.
Second Ventures II, L.P.
USVP Entrepreneur Partners II, L.P.
2180 Associates Fund
2180 Sand Hill Road
Suite 300
Menlo Park, CA 94025
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<PAGE> 19
Lighthouse Capital Partners, L.P.
100 Drakes Landing Road, Suite 260
Greenbrae, California 94904
Attn: Contract Administration
Dennis Jones
Federal Express Corporation
2005 Corporate Avenue
Memphis, TN 38132
U.S. Mail: P.O. Box 727
Memphis, TN 38194-1841
Ralph Kimball
Ralph Kimball Associates, Inc.
13750 Highway 9
Boulder Creek, CA 95006
Tom Lounibos
[ADDRESS]
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<PAGE> 20
EXHIBIT B
COMPANY ADDRESS
Sagent Technology, Inc.
2225 E. Bayshore, Suite 100
Palo Alto, CA 94303
<PAGE> 1
EXHIBIT 4.3
SAGENT TECHNOLOGY, INC.
COMMON STOCK REGISTRATION RIGHTS AGREEMENT
THIS COMMON STOCK REGISTRATION RIGHTS AGREEMENT is made as of September
14, 1998 (the "Agreement") by and among SAGENT TECHNOLOGY, INC., a California
corporation (the "Company") and Robert Hawk (the "Investor").
RECITALS
WHEREAS, the Company and the Investor entered into the Common Stock
Purchase Agreement, dated as of September 14, 1998, pursuant to which Investor
purchased 10,000 shares of Common Stock (the "Shares") of the Company; and
WHEREAS, the Investor, in connection with such purchase, desires to
obtain certain registration rights with respect to such Shares.
NOW, THEREFORE, the parties hereto agree, subject to the closing of the
purchase of Shares, to the following:
SECTION 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. Hereafter, in this Agreement the following
terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Sections 2.1
hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company, blue sky fees and expenses, the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
<PAGE> 2
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
Investor and, except as set forth above, all reasonable fees and disbursements
of counsel for Investor.
SECTION 2
REGISTRATION RIGHTS
2.1 COMPANY REGISTRATION.
(a) Notice of Registration. If at any time or from time to time
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i) in
connection with the Company's initial public offering, or (ii) a registration
relating solely to employee benefit plans, or (iii) a registration relating
solely to a Commission Rule 145 transaction, the Company will:
(i) promptly give Investor written notice thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Shares specified in a written request or requests,
made within 20 days after receipt of such written notice from the Company, by
Investor.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise Investor as a part of the written notice given pursuant
to Section 2.1(a)(i). In such event the right of Investor to registration
pursuant to Section 2.1 shall be conditioned upon Investor's participation in
such underwriting and the inclusion of the Shares in the underwriting to the
extent provided herein. All stockholders proposing to distribute their
securities through such underwriting shall (together with the Company and the
other holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 2.1, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the securities to be included
in such registration. The Company shall so advise Investor, and the number of
Shares that may be included in the registration. If Investor disapproves of the
terms of any such underwriting, Investor may elect to withdraw therefrom by
written notice to the Company and the managing underwriter. Any securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration, and
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<PAGE> 3
shall not be transferred in a public distribution prior to 90 days after the
effective date of the registration statement relating thereto, or such other
shorter period of time as the underwriters may require.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.1 prior to the effectiveness of such registration whether or not
Investor has elected to include securities in such registration.
2.2 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with one registration pursuant to Section 2.1 shall be borne by the
Company. Unless otherwise stated, Investor shall bear Investor's Selling
Expenses relating to securities registered on behalf of the Investor.
2.3 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to Section 2.1, the
Company will keep Investor advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense the Company will:
(a) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least one hundred
eighty (180) days or until the distribution described in the Registration
Statement has been completed;
(b) Furnish to Investor and to the underwriters of the securities
being registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such
underwriters may reasonably request in order to facilitate the public offering
of such securities.
2.4 INDEMNIFICATION.
(a) The Company will indemnify Investor with respect to which
registration, qualification or compliance has been effected pursuant to Section
2.1, and each underwriter, if any, and each person who controls any underwriter
within the meaning of Section 15 of the Securities Act, against all expenses,
claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with any such registration, qualification or compliance, and the Company will
reimburse Investor, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage,
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<PAGE> 4
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by Investor,
controlling person or underwriter and stated to be specifically for use therein.
(b) Investor will, if Shares held by Investor are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other such holder of
registration rights, each officer and director and each person controlling such
holder within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such holders,
such directors, officers, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by Investor and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of Investor under this subsection
(b) shall be limited in an amount equal to the initial public offering price of
the shares sold by Investor, unless such liability arises out of or is based on
willful conduct by Investor.
(c) Each party entitled to indemnification under this Section 2.4
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 2 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
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<PAGE> 5
2.5 TERMINATION OF REGISTRATION RIGHTS. The rights granted pursuant to
this Agreement shall terminate five (5) years after the closing of an
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
common stock for the account of the Company to the public.
2.6 INFORMATION BY INVESTOR. The Investor shall furnish to the Company
such information regarding Investor, the Shares held by Investor and the
distribution proposed by Investor as the Company may request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Section 2.
2.7 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company to
register securities granted to Investor under Sections 2.1 may be assigned to a
transferee or assignee reasonably acceptable to the Company in connection with
any transfer or assignment of Shares by Investor provided that: (i) such
transfer may otherwise be effected in accordance with applicable securities
laws, and (ii) such transferee or assignee agrees to be bound by the provisions
hereof.
SECTION 3
MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed and construed in all
respects in accordance with the laws of the State of California as applied to
agreements made and performed in California by residents of the State of
California.
3.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects hereof, and no party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except or specifically
set forth herein. Except as expressly provided herein, neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
3.3 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid or otherwise delivered by hand or by messenger,
addressed (a) if to Investor, at Investor's address set forth in Exhibit A, or
at such other address as Investor shall have furnished to the Company in writing
or (b) if to any other holder of any shares of Company Stock, at such address as
such holder shall have furnished the Company in writing, or until any such
holder so furnishes an address to the Company, then to and at the address of the
last holder of such shares who has so furnished an address to the Company, or
(c) if to the Company, one copy should be sent to its address set forth in
Exhibit B and addressed to the attention of the Corporate Secretary or at such
other address as the Company shall have furnished to Investor.
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<PAGE> 6
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
seventy-two (72) hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed and
mailed as aforesaid.
3.4 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
3.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
3.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
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<PAGE> 7
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SAGENT TECHNOLOGY, INC.
By: /s/ W. Virginia Walker
---------------------------------
Title: Executive Vice President (CFO)
------------------------------
ROBERT HAWK
/s/ Robert Hawk
-------------------------------------
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<PAGE> 8
EXHIBIT A
Schedule of Investor
Robert Hawk
[Address]
[Telephone number]
<PAGE> 9
EXHIBIT B
COMPANY ADDRESS
Sagent Technology, Inc.
2225 E. Bayshore, Suite 100
Palo Alto, CA 94303
<PAGE> 1
EXHIBIT 10.1
SAGENT TECHNOLOGY, INC.
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement") is made as of this day,
November 30, 1995, by and between Sagent Technology, Inc., a California
corporation (the "Company"), and Name ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing difficulty
in obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other officers and
directors of the Company may not be willing to continue to serve as officers and
directors without additional protection; and
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
(a) Third Party Proceedings. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action or proceeding if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in the best
interests of the Company, and, with respect to any criminal action or pro
ceeding, had no reasonable cause to believe Indemnitee's conduct was unlawful.
The termination of any action or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that (i) Indemnitee did not act in good faith and
in a manner which Indemnitee reasonably believed to be in the best interests of
the Company, or (ii) with
<PAGE> 2
respect to any criminal action or proceeding, Indemnitee had reasonable cause to
believe that Indemnitee's conduct was unlawful.
(b) Proceedings By or in the Right of the Company. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or proceeding by
or in the right of the Company or any subsidiary of the Company to procure a
judgment in its favor by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) and, to the fullest extent
permitted by law, amounts paid in settlement, in each case to the extent
actually and reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or proceeding if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the best interests of the
Company and its shareholders, except that no indemnification shall be made in
respect of any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company in the performance of Indemnitee's duty to
the Company and its shareholders unless and only to the extent that the court in
which such action or proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for expenses and then only to the
extent that the court shall determine.
2. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) Advancement of Expenses. The Company shall advance all
expenses incurred by Indemnitee in connection with the investigation, defense,
settlement or appeal of any civil or criminal action or proceeding referenced in
Section 1(a) or (b) hereof (but not amounts actually paid in settlement of any
such action or proceeding). Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be indemni fied by the Company as authorized
hereby. The advances to be made hereunder shall be paid by the Company to
Indemnitee within twenty (20) days following delivery of a written request
therefor by Indemnitee to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to his right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). Notice shall be deemed received three business days after the date
postmarked if sent by domestic certified or registered mail, properly addressed;
otherwise notice shall be deemed received when such notice shall actually be
received by the Company. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee's power.
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<PAGE> 3
(c) Procedure. Any indemnification provided for in Section 1
shall be made no later than forty-five (45) days after receipt of the written
request of Indemnitee. If a claim under this Agreement, under any statute, or
under any provision of the Company's Articles of Incorporation or Bylaws
providing for indemnification, is not paid in full by the Company within
forty-five (45) days after a written request for payment thereof has first been
received by the Company, Indemnitee may, but need not, at any time thereafter
bring an action against the Company to recover the unpaid amount of the claim
and, subject to Section 13 of this Agreement, Indemnitee shall also be entitled
to be paid for the expenses (including attorneys' fees) of bringing such action.
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in connection with any action or
proceeding in advance of its final disposition) that Indemnitee has not met the
standards of conduct which make it permissible under applicable law for the
Company to indemnify Indemnitee for the amount claimed, but Indemnitee shall be
entitled to receive interim payments of expenses pursuant to Subsection 2(a)
unless and until such defense may be finally adjudicated by court order or
judgment from which no further right of appeal exists. It is the parties'
intention that if the Company contests Indemnitee's right to indemnification,
the question of Indemnitee's right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its Board of
Directors, any com mittee or subgroup of the Board of Directors, independent
legal counsel, or its shareholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct required by applicable law, nor an
actual deter mination by the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its shareholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.
(d) Notice to Insurers. If, at the time of the receipt of a
notice of a claim pursuant to Section 2(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be
obligated under Section 2(a) hereof to pay the expenses of any proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indem nitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same pro
ceeding, provided that (i) Indemnitee shall have the right to employ his counsel
in any such proceeding at Indemnitee's expense; and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
or (C) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, then the fees and expenses of Indemnitee's counsel
shall be at the expense of the Company.
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<PAGE> 4
3. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) Scope. Notwithstanding any other provision of this Agreement,
the Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's Articles of
Incorporation, the Company's By-laws or by statute. In the event of any change,
after the date of this Agreement, in any applicable law, statute or rule which
expands the right of a California corporation to indemnify a member of its board
of directors or an officer, such changes shall be, ipso facto, within the
purview of Indemnitee's rights and Company's obligations, under this Agreement.
In the event of any change in any applicable law, statute or rule which narrows
the right of a California corporation to indemnify a member of its Board of
Directors or an officer, such changes, to the extent not otherwise required by
such law, statute or rule to be applied to this Agreement shall have no effect
on this Agreement or the parties' rights and obligations hereunder.
(b) Nonexclusivity. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Articles of Incorporation, its By-laws, any
agreement, any vote of shareholders or disinterested directors, the California
General Corporation Law, or otherwise, both as to action in Indemnitee's
official capacity and as to action in another capacity while holding such
office. The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though he may have ceased to serve in such capacity at the time of
any action or other covered proceeding.
4. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.
5. MUTUAL ACKNOWLEDGEMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
6. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Company shall, from
time to time, make the good faith determination whether or not it is practicable
for the Company to obtain and main tain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of
directors' and officers' liability insurance, Indemnitee shall be named
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<PAGE> 5
as an insured in such a manner as to provide Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company's
directors, if Indemnitee is a director; or of the Company's officers, if
Indemnitee is not a director of the Company but is an officer; or of the
Company's key employees, if Indemnitee is not an officer or director but is a
key employee. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company determines in
good faith that such insurance is not reasonably available, if the premium costs
for such insurance are disproportionate to the amount of coverage provided, if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a subsidiary or parent of the Company.
7. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 7. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Acts. To indemnify Indemnitee for any acts or
omissions or transactions from which a director may not be relieved of liability
under the California General Corporation Law.
(b) Claims Initiated by Indemnitee. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 317 of the California General Corporation Law, but such indemnification
or advancement of expenses may be provided by the Company in specific cases if
the Board of Directors has approved the initiation or bringing of such suit; or
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) Insured Claims. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
directors' and officers' liability insurance maintained by the Company; or
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<PAGE> 6
(e) Claims Under Section 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
9. EFFECTIVENESS OF AGREEMENT. To the extent that the indemnification
permitted under the terms of certain provisions of this Agreement exceeds the
scope of the indemnification provided for in the California General Corporation
Law, such provisions shall not be effective unless and until the Company's
Articles of Incorporation authorize such additional rights of indemnification.
In all other respects, the balance of this Agreement shall be effective as of
the date set forth on the first page and may apply to acts or omissions of
Indemnitee which occurred prior to such date if Indemnitee was an officer,
director, employee or other agent of the Company, or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, at the time such act or
omission occurred.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a con stituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that if Indemnitee is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, Indemnitee
shall stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving corporation as Indemnitee would have with
respect to such constituent corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its participants, or
beneficiaries.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
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<PAGE> 7
13. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of California
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of California.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of California as
applied to contracts between California residents entered into and to be
performed entirely within California.
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<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SAGENT TECHNOLOGY, INC.
By:
--------------------------------------
Title:
-----------------------------------
750 Menlo Avenue, Suite 300
Menlo Park, CA 94025
AGREED TO AND ACCEPTED:
INDEMNITEE:
FIELD(Name)
- ----------------------------------------
(signature)
- ----------------------------------------
(address)
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<PAGE> 1
EXHIBIT 10.2
SAGENT TECHNOLOGY, INC.
AMENDED 1995 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or nonstatutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Sagent Technology, Inc., a California
corporation.
(h) "Consultant" means any person who is engaged by the Company
or any Parent or Subsidiary to render consulting or advisory services and is
compensated for such services, and any director of the Company whether
compensated for such services or not. If and in the event the Company registers
any class of any equity security pursuant to the Exchange Act, the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
<PAGE> 2
(i) "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
90 days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract, including Company policies. If reemployment upon expiration
of a leave of absence approved by the Company is not so guaranteed, on the 181st
day of such leave any Incentive Stock Option held by the Optionee shall cease to
be treated as an Incentive Stock Option and shall be treated for tax purposes as
a Nonstatutory Stock Option.
(j) "Employee" means any person, including Officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the Nasdaq National Market thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination,
or;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(m) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(n) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
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<PAGE> 3
(o) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(p) "Option" means a stock option granted pursuant to the Plan.
(q) "Option Agreement" means a written or electronic agreement
between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(r) "Option Exchange Program" means a program whereby outstanding
Options are exchanged for Options with a lower exercise price.
(s) "Optioned Stock" means the Common Stock subject to an Option.
(t) "Optionee" means an Employee or Consultant who receives an
Option.
(u) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this Amended 1995 Stock Plan.
(w) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 12 below.
(x) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.
(y) "Service Provider" means an Employee or Consultant.
(z) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(aa) "Stock Purchase Right" means a right to purchase Common
Stock pursuant to Section 12 below.
(bb) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
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3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 3,225,000(1) Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares are repurchased by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board or a Committee
appointed by the Board, which Committee shall be constituted to comply with
Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion.
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine the number of Shares to be covered by
each such award granted hereunder;
(iv) to approve forms of agreement for use under the
Plan;
(v) to determine the terms and conditions, of any Option
or Stock Purchase Right granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Options or
Stock Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or Stock Purchase Right or
the Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
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(1) As increased from 1,200,000 to 1,800,000 on August 20, 1996, from
1,800,000 to 2,800,000 on September 16, 1997, and from 2,800,000 to 3,225,000 on
February 20, 1998.
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<PAGE> 5
(vi) to determine whether and under what circumstances
an Option may be settled in cash under subsection 9(f) instead of Common Stock;
(vii) to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by Optionees
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable; and
(xi) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. Eligibility.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee or Consultant who has been granted an Option may,
if otherwise eligible, be granted additional Options.
(b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value:
(i) of Shares subject to an Optionee's Incentive Stock
Options granted by the Company, any Parent or Subsidiary, which
(ii) become exercisable for the first time during any
calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(b), Incentive Stock Options shall
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<PAGE> 6
be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time the Option with
respect to such Shares is granted.
(c) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company, as described in Section 17 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 13 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of the grant.
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<PAGE> 7
(B) granted to any person, the per Share exercise
price shall be no less than 85% of the Fair Market Value per Share on the date
of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above pursuant to
a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan, but in no case at a rate of less than 20% per year over five (5) years
from the date the Option is granted.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board, consist
of any consideration and method of payment allowable under Section 8(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 12 of the Plan.
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<PAGE> 8
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment or Consulting Relationship. In the
event of termina tion of an Optionee's Continuous Status as an Employee or
Consultant with the Company (but not in the event of an Optionee's change of
status from Employee to Consultant (in which case an Employee's Incentive Stock
Option shall automatically convert to a Nonstatutory Stock Option on the date
three (3) months and one day from the date of such change of status) or from
Consultant to Employee), such Optionee may, but only within such period of time
as is determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an Incentive Stock Option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the Option at the date of such termination, or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. In the event of termination of an
Optionee's consulting relationship or Continuous Status as an Employee as a
result of his or her disability, Optionee may, but only within twelve (12)
months from the date of such termination (and in no event later than the expira
tion date of the term of such Option as set forth in the Option Agreement),
exercise the Option to the extent otherwise entitled to exercise it at the date
of such termination; provided, however, that if such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the day three months and
one day following such termination. To the extent that Optionee is not entitled
to exercise the Option at the date of termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be
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<PAGE> 9
required thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid, and the time within
which such person must accept such offer. The terms of the offer shall comply in
all respects with Section 260.140.42 of Title 10 of the California Code of
Regulations. The offer shall be accepted by execution of a Restricted Stock
purchase agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine, but in no case at a rate of less than 20% per year
over five years from the date of purchase.
(c) Other Provisions. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.
12. Adjustments Upon Changes in Capitalization or Merger.
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<PAGE> 10
(a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combin ation or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation or the sale of substantially all of the assets
of the Company, the Option may be assumed or an equivalent option may be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger, the option confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option for
each Share of Optioned Stock subject to the Option to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger.
13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
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<PAGE> 11
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
16. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
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<PAGE> 12
18. Agreements. Options shall be evidenced by written agreements in such
form as the Board shall approve from time to time.
19. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.
20. Information to Optionees and Purchasers. The Company shall provide
to each Optionee, not less frequently than annually, copies of annual financial
statements. The Company shall also provide such statements to each individual
who acquires Shares pursuant to the Plan while such individual owns such Shares.
The Company shall not be required to provide such statements to key employees
whose duties in connection with the Company assure their access to equivalent
information.
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<PAGE> 13
SAGENT TECHNOLOGY, INC.
AMENDED 1995 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
Name of Optionee: optionee
Address of Optionee: street address
city, state zip
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
<TABLE>
<S> <C>
Grant Number grant no.
Date of Grant grant date
Vesting Commencement Date vesting date
Exercise Price per Share $exercise price
Total Number of Shares Granted no. shares
Total Exercise Price $total exercise price
Type of Option: [X] Incentive Stock Option
[ ] Nonstatutory Stock Option
Term/Expiration Date: term date
</TABLE>
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/48 of the Shares subject to the
Option shall vest each month
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<PAGE> 14
thereafter, subject to the Optionee continuing to be an employee or
consultant (a "Service Provider"), as the case may be, on such dates.
Notwithstanding the foregoing, this Option is exercisable immediately,
in whole or in part, conditioned upon Optionee entering into a Restricted Stock
Purchase Agreement attached hereto as Exhibit A-1 with respect to any unvested
Shares subject to the Option.
Termination Period:
This Option may be exercised for ninety (90) days after Optionee ceases
to be a Service Provider. Upon the death or Disability of the Optionee, this
Option may be exercised for one year after Optionee ceases to be a Service
Provider. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant in Section I of this Option
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference, and this
Option Agreement. In the event of a conflict between the terms and conditions of
the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the Controller of the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option
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<PAGE> 15
shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash; or
(b) check; or
(c) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or
(d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares; or
(e) with the Administrator's consent, delivery of Optionee's
promissory note (the "Note") in the form attached hereto as Exhibit C, in the
amount of the aggregate Exercise Price of the Exercised Shares together with the
execution and delivery by the Optionee of the Security Agreement attached hereto
as Exhibit B. The Note shall bear interest at the "applicable federal rate"
prescribed under the Code and its regulations at time of purchase, and shall be
secured by a pledge of the Shares purchased by the Note pursuant to the Security
Agreement.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
6. Termination of Relationship. In the event an Optionee's Continuous
Status as an Employee or Consultant terminates, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option during the Termination Period set out in the Notice of
Grant. To the extent that Optionee was not entitled to exercise this Option
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<PAGE> 16
at the date of such termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.
7. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(a) Exercising the Option.
(i) Nonstatutory Stock Option. The Optionee may incur
regular federal income tax liability upon exercise of a NSO. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price. If
the Optionee is an Employee or a former Employee, the Company will be required
to withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(ii) Incentive Stock Option. If this Option qualifies as
an ISO, the Optionee will have no regular federal income tax liability upon its
exercise, although the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price will be
treated as an adjustment to alternative minimum taxable income for federal tax
purposes and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee ceases to be an Employee but remains a
Service Provider, any Incentive Stock Option of the Optionee that remains
unexercised shall cease to qualify as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares
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<PAGE> 17
acquired on the date of exercise and the aggregate Exercise Price, or (B) the
difference between the sale price of such Shares and the aggregate Exercise
Price. Any additional gain will be taxed as capital gain, short-term or
long-term depending on the period that the ISO Shares were held.
(c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.
8. Market Standoff Agreement. Optionee hereby agrees that if so
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
Securities Act, Optionee shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period following the
effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that such restriction shall only apply to the
first registration statement of the Company to become effective under the
Securities Act which include securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180-day period.
9. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.
10. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
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<PAGE> 18
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<PAGE> 19
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: SAGENT TECHNOLOGY, INC.:
By:
- ------------------------------- -------------------------------
Signature
- ------------------------------- ----------------------------------
Print Name Print Name
- ------------------------------- ----------------------------------
Residence Address Title
- -------------------------------
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<PAGE> 20
CONSENT OF SPOUSE
The undersigned spouse of optionee (the "Optionee") has read and hereby
approves the terms and conditions of the Plan and this Option Agreement. In
consideration of the Company's granting his or her spouse the right to purchase
Shares as set forth in the Plan and this Option Agreement, the undersigned
hereby agrees to be irrevocably bound by the terms and conditions of the Plan
and this Option Agreement and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under the Plan or this Option Agreement.
---------------------------------------
Spouse of Optionee
-8-
<PAGE> 21
EXHIBIT A
EXERCISE NOTICE
Sagent Technology, Inc.
2225 East Bayshore, Suite 100
Palo Alto, CA 94303
Attention: Controller
1. Exercise of Option. Effective as of today, ________________, 199__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Sagent Technology, Inc. (the "Company")
under and pursuant to the Amended 1995 Stock Plan (the "Plan") and the Stock
Option Agreement dated , 199__ (the "Option Agreement"). The purchase price for
the Shares shall be $ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 12 of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all
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<PAGE> 22
prior undertakings and agreements of the Company and Purchaser with respect to
the subject matter hereof, and may not be modified adversely to the Purchaser's
interest except by means of a writing signed by the Company and Purchaser. This
agreement is governed by the internal substantive laws, but not the choice of
law rules, of California.
Submitted by: Accepted by:
PURCHASER: SAGENT TECHNOLOGY, INC.:
By:
- ------------------------------- -------------------------------
Signature
Name:
-----------------------------
- -------------------------------
Print Name Title:
----------------------------
Address: Address:
2225 E. Bayshore Road, Suite 100
- -------------------------------
Palo Alto, CA 94303
- -------------------------------
- -------------------------------
Date Received
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<PAGE> 23
EXHIBIT A-1
RESTRICTED STOCK PURCHASE AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Restricted Stock Purchase Agreement.
WHEREAS the Purchaser named in the Notice of Grant, (the "Purchaser") is
an employee of or consultant to the Company (a "Service Provider"), and the
Purchaser's continued participation is considered by the Company to be important
for the Company's continued growth; and
WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Admin istrator has granted to the Purchaser a
Stock Purchase Right subject to the terms and conditions of the Plan and the
Notice of Grant, which are incorporated herein by reference, and pursuant to
this Restricted Stock Purchase Agreement (the "Agreement").
NOW THEREFORE, the parties agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser and
the Purchaser hereby agrees to purchase shares of the Company's Common Stock
(the "Shares"), at the per Share purchase price and as otherwise described in
the Notice of Grant.
2. Payment of Purchase Price. The purchase price for the Shares may be
paid by delivery to the Company at the time of execution of this Agreement of
cash, a check, or some combination thereof.
3. Repurchase Option.
(a) In the event the Purchaser ceases to be a Service Provider
for any or no reason (including death or disability) before all of the Shares
are released from the Company's Repurchase Option (see Section 4), the Company
shall, upon the date of such termination (as reasonably fixed and determined by
the Company) have an irrevocable, exclusive option (the "Repurchase Option") for
a period of ninety (90) days from such date to repurchase up to that number of
shares which constitute the Unreleased Shares (as defined in Section 4) at the
original purchase price per share (the "Repurchase Price"). The Repurchase
Option shall be exercised by the Company by delivering written notice to the
Purchaser or the Purchaser's executor (with a copy to the Escrow Holder) AND, at
the Company's option, (i) by delivering to the Purchaser or the Purchaser's
executor a check in the amount of the aggregate Repurchase Price, or (ii) by
canceling an amount of the Purchaser's indebtedness to the Company equal to the
aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so that
the combined payment and cancellation of indebtedness equals the aggregate
Repurchase Price. Upon delivery of such notice and the payment of the aggregate
Repurchase Price,
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<PAGE> 24
the Company shall become the legal and beneficial owner of the Shares being
repurchased and all rights and interests therein or relating thereto, and the
Company shall have the right to retain and transfer to its own name the number
of Shares being repurchased by the Company.
(b) Whenever the Company shall have the right to repurchase
Shares hereunder, the Company may designate and assign one or more employees,
officers, directors or shareholders of the Company or other persons or
organizations to exercise all or a part of the Company's purchase rights under
this Agreement and purchase all or a part of such Shares. If the Fair Market
Value of the Shares to be repurchased on the date of such designation or
assignment (the "Repurchase FMV") exceeds the aggregate Repurchase Price of such
Shares, then each such designee or assignee shall pay the Company cash equal to
the difference between the Repurchase FMV and the aggregate Repurchase Price of
such Shares.
[4. RELEASE OF SHARES FROM REPURCHASE OPTION. [INDIVIDUALIZED ACCORDING
TO VESTING SCHEDULE].
(a) TWENTY-FIVE PERCENT (25%) OF THE SHARES SHALL BE RELEASED
FROM THE COMPANY'S REPURCHASE OPTION ONE YEAR AFTER THE VESTING COMMENCEMENT
DATE AND ONE FORTY-EIGHTH (1/48TH) OF THE SHARES AT THE END OF EACH MONTH
THEREAFTER, PROVIDED THAT THE PURCHASER DOES NOT CEASE TO BE A SERVICE PROVIDER
PRIOR TO THE DATE OF ANY SUCH RELEASE.
(b) ANY OF THE SHARES THAT HAVE NOT YET BEEN RELEASED FROM THE
REPURCHASE OPTION ARE REFERRED TO HEREIN AS "UNRELEASED SHARES."
(c) THE SHARES THAT HAVE BEEN RELEASED FROM THE REPURCHASE OPTION
SHALL BE DELIVERED TO THE PURCHASER AT THE PURCHASER'S REQUEST (SEE SECTION 6).]
5. Restriction on Transfer. Except for the escrow described in Section 6
or the transfer of the Shares to the Company or its assignees contemplated by
this Agreement, none of the Shares or any beneficial interest therein shall be
transferred, encumbered or otherwise disposed of in any way until such Shares
are released from the Company's Repurchase Option in accordance with the
provisions of this Agreement, other than by will or the laws of descent and
distribution.
6. Escrow of Shares.
(a) To ensure the availability for delivery of the Purchaser's
Unreleased Shares upon repurchase by the Company pursuant to the Repurchase
Option, the Purchaser shall, upon execution of this Agreement, deliver and
deposit with an escrow holder designated by the Company (the "Escrow Holder")
the share certificates representing the Unreleased Shares, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit A-2. The
Unreleased Shares and stock assignment shall be held by the Escrow Holder,
pursuant to the Joint Escrow Instructions of the Company and Purchaser attached
hereto as Exhibit A-3, until such time as the Company's Repurchase Option
expires. As a further condition to the Company's obligations under this
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<PAGE> 25
Agreement, the Company may require the spouse of Purchaser, if any, to execute
and deliver to the Company the Consent of Spouse attached hereto as Exhibit A-4.
(b) The Escrow Holder shall not be liable for any act it may do
or omit to do with respect to holding the Unreleased Shares in escrow while
acting in good faith and in the exercise of its judgment.
(c) If the Company or any assignee exercises the Repurchase
Option hereunder, the Escrow Holder, upon receipt of written notice of such
exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.
(d) When the Repurchase Option has been exercised or expires
unexercised or a portion of the Shares has been released from the Repurchase
Option, upon request the Escrow Holder shall promptly cause a new certificate to
be issued for the released Shares and shall deliver the certificate to the
Company or the Purchaser, as the case may be.
(e) Subject to the terms hereof, the Purchaser shall have all the
rights of a shareholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and to
receive any cash dividends declared thereon. If, from time to time during the
term of the Repurchase Option, there is (i) any stock dividend, stock split or
other change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of the Purchaser's ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and included thereafter as
"Shares" for purposes of this Agreement and the Repurchase Option.
7. Legends. The share certificate evidencing the Shares, if any, issued
hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT
BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
8. Adjustment for Stock Split. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
9. Tax Consequences. The Purchaser has reviewed with the Purchaser's own
tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Purchaser is
relying solely on such advisors and not on any
-3-
<PAGE> 26
statements or representations of the Company or any of its agents. The Purchaser
understands that the Purchaser (and not the Company) shall be responsible for
the Purchaser's own tax liability that may arise as a result of the transactions
contemplated by this Agreement. The Purchaser understands that Section 83 of the
Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income
the difference between the purchase price for the Shares and the Fair Market
Value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" includes the right of the Company to buy back the Shares
pursuant to the Repurchase Option. The Purchaser understands that the Purchaser
may elect to be taxed at the time the Shares are purchased rather than when and
as the Repurchase Option expires by filing an election under Section 83(b) of
the Code with the IRS within 30 days from the date of purchase. The form for
making this election is attached as Exhibit A-5 hereto.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE
THIS FILING ON THE PURCHASER'S BEHALF.
10. General Provisions.
(a) This Agreement shall be governed by the internal substantive
laws, but not the choice of law rules, of California. This Agreement, subject to
the terms and conditions of the Plan and the Notice of Grant, represents the
entire agreement between the parties with respect to the purchase of the Shares
by the Purchaser. Subject to Section 15(c) of the Plan, in the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Agreement, the terms and conditions of the Plan shall
prevail. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Agreement.
(b) Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the
other in writing.
Any notice to the Escrow Holder shall be sent to the Company's
address with a copy to the other party hereto.
(c) The rights of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of the Purchaser
under this Agreement may only be assigned with the prior written consent of the
Company.
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<PAGE> 27
(d) Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such provision,
nor prevent that party from thereafter enforcing any other provision of this
Agreement. The rights granted both parties hereunder are cumulative and shall
not constitute a waiver of either party's right to assert any other legal remedy
available to it.
(e) The Purchaser agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR
PURCHASING SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE WITH PURCHASER'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE PURCHASER'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.
By Purchaser's signature below, Purchaser represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Purchaser has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Purchaser further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant.
DATED:
------------------
PURCHASER: SAGENT TECHNOLOGY, INC.:
By:
- ------------------------------- -------------------------------
Signature
Name:
-----------------------------
- -------------------------------
Print Name Title:
----------------------------
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<PAGE> 28
EXHIBIT A-2
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto ______________________________ (__________) shares of the
Common Stock of Sagent Technology, Inc. standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint _________ to transfer the said stock on the
books of the within named corporation with full power of substitution in the
premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement (the "Agreement") between________________________ and
the undersigned dated ______________, 19__.
Dated: , 19
---------------
Signature:
-------------------------------
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise the
Repurchase Option, as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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<PAGE> 29
EXHIBIT A-3
JOINT ESCROW INSTRUCTIONS
________, 19__
Corporate Secretary
Sagent Technology, Inc.
Dear___________:
As Escrow Agent for both Sagent Technology, Inc. a California
corporation (the "Company"), and the undersigned purchaser of stock of the
Company (the "Purchaser"), you are hereby authorized and directed to hold the
documents delivered to you pursuant to the terms of that certain Restricted
Stock Purchase Agreement ("Agreement") between the Company and the undersigned,
in accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company (referred
to collectively as the "Company") exercises the Company's Repurchase Option set
forth in the Agreement, the Company shall give to Purchaser and you a written
notice specifying the number of shares of stock to be purchased, the purchase
price, and the time for a closing hereunder at the principal office of the
Company. Purchaser and the Company hereby irrevocably authorize and direct you
to close the transaction contemplated by such notice in accordance with the
terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's Repurchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities.
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<PAGE> 30
Subject to the provisions of this paragraph 3, Purchaser shall exercise all
rights and privileges of a shareholder of the Company while the stock is held by
you.
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's Repurchase Option has been exercised, you
shall deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's Repurchase Option.
Within 90 days after Purchaser ceases to be a Service Provider, you shall
deliver to Purchaser a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not purchased by
the Company or its assignees pursuant to exercise of the Company's Repurchase
Option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree, you shall not
be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
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<PAGE> 31
11. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.
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<PAGE> 32
COMPANY: Sagent Technology, Inc.
2225 E. Bayshore Road, Suite 100
Palo Alto, CA 94303
PURCHASER:
-------------------------------
-------------------------------
-------------------------------
ESCROW AGENT:
-------------------------------
-------------------------------
-------------------------------
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
18. These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the internal substantive laws, but not the
choice of law rules, of California.
Very truly yours,
SAGENT TECHNOLOGY, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
PURCHASER:
-----------------------------------------
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<PAGE> 33
Signature
-----------------------------------------
Print Name
ESCROW AGENT:
- -------------------------------
Corporate Secretary
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<PAGE> 34
EXHIBIT A-4
CONSENT OF SPOUSE
I, ____________________, spouse of ___________________, have read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement"). In
consideration of the Company's grant to my spouse of the right to purchase
shares of Sagent Technology, Inc., as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws or similar laws
relating to marital property in effect in the state of our residence as of the
date of the signing of the foregoing Agreement.
Dated: _______________, 19__
________________________________________
Signature of Spouse
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<PAGE> 35
EXHIBIT A-5
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Sections 55 and 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
or alternative minimum taxable income, as the case may be, for the current
taxable year the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:
NAME: TAXPAYER: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described as
follows: ________ shares (the "Shares") of the Common Stock of Sagent
Technology, Inc. (the "Company").
3. The date on which the property was transferred is:________, 19 ____.
4. The property is subject to the following restrictions:
The Shares may not be transferred and are subject to forfeiture under
the terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions
contained in such agreement.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms
will never lapse, of such property is:
$____________________.
6. The amount (if any) paid for such property is:
$____________________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated: ___________________, 19____ _____________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: ___________________, 19____ _____________________________________
Spouse of Taxpayer
<PAGE> 36
EXHIBIT B
SECURITY AGREEMENT
This Security Agreement is made as of __________, 19___ between Sagent
Technology, Inc., a California corporation ("Pledgee"), and
_________________________ ("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated ________ (the "Option"), between Pledgor and Pledgee under
Pledgee's 1995 Stock Plan, as may be amended from time to time, and Pledgor's
election under the terms of the Option to pay for such shares with his
promissory note (the "Note"), Pledgor has purchased _________ shares of
Pledgee's Common Stock (the "Shares") at a price of $________ per share, for a
total purchase price of $__________. The Note and the obligations thereunder are
as set forth in Exhibit C to the Option.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of
the transfer of the Shares to Pledgor under the Option Agreement, Pledgor,
pursuant to the California Commercial Code, hereby pledges all of such Shares
(herein sometimes referred to as the "Collateral") represented by certificate
number ______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Secretary of Pledgee ("Pledgeholder"),
who shall hold said certificate subject to the terms and conditions of this
Security Agreement.
The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
a. Payment of Indebtedness. Pledgor will pay the principal sum of
the Note secured hereby, together with interest thereon, at the time and in the
manner provided in the Note.
<PAGE> 37
b. Encumbrances. The Shares are free of all other encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
c. Margin Regulations. In the event that Pledgee's Common Stock
is now or later becomes margin-listed by the Federal Reserve Board and Pledgee
is classified as a "lender" within the meaning of the regulations under Part 207
of Title 12 of the Code of Federal Regulations ("Regulation G"), Pledgor agrees
to cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.
3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. Stock Adjustments. In the event that during the term of the pledge
any stock dividend, reclassification, readjustment or other changes are declared
or made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
a. Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
b. Pledgor fails to perform any of the covenants set forth in the
Option or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the California
Commercial Code.
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<PAGE> 38
7. Release of Collateral. Subject to any applicable contrary rules under
Regulation G, there shall be released from this pledge a portion of the pledged
Shares held by Pledgeholder here under upon payments of the principal of the
Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. Term. The pledge of Shares shall continue until the payment of all
indebtedness secured hereby, at which time the remaining pledged stock shall be
promptly delivered to Pledgor, subject to the provisions for prior release of a
portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the internal substantive laws, but not the choice of law rules,
of California.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
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<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"PLEDGOR" ___________________________________
Signature
___________________________________
Print Name
Address: ___________________________________
___________________________________
"PLEDGEE" SAGENT TECHNOLOGY, INC.
a California corporation
___________________________________
Signature
___________________________________
Print Name
___________________________________
Title
"PLEDGEHOLDER"
___________________________________
Secretary of
Sagent Technology, Inc.
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<PAGE> 40
EXHIBIT C
NOTE
__________________________ ______________
[City, State]
__________, 19__
FOR VALUE RECEIVED, _______________ promises to pay to Sagent
Technology, Inc., a California corporation (the "Company"), the principal sum of
_______________________ ($_____________), together with interest on the unpaid
principal hereof from the date hereof at the rate of _______________ percent
(____%) per annum, compounded semiannually.
Principal and interest shall be due and payable on __________, 19___.
Payment of principal and interest shall be made in lawful money of the United
States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Option, dated as of
________________. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee, director or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
___________________________________
___________________________________
<PAGE> 1
EXHIBIT 10.3
SAGENT TECHNOLOGY, INC.
1998 STOCK PLAN
1. Purposes of the Plan. The purposes of this 1998 Stock Plan are:
- to attract and retain the best available personnel for
positions of substantial responsibility,
- to provide additional incentive to Employees, Directors and
Consultants, and
- to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Sagent Technology, Inc., a Delaware
corporation.
(h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
<PAGE> 2
(j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
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(p) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.
(q) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means an agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option
or Stock Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1998 Stock Plan.
(y) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan.
(z) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(bb) "Section 16(b)" means Section 16(b) of the Exchange Act.
(cc) "Service Provider" means an Employee, Director or
Consultant.
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(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,440,000 Shares, plus an annual increase to be added on May 1
of each year (beginning in 2000) equal to the lesser of (i) 1,500,000 Shares,
(ii) 5% of the outstanding Shares on such date or (iii) such lesser number of
Shares as approved by the Board of Directors. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, such Shares shall become available for
future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
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(iv) Other Administration. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock
to be covered by each Option and Stock Purchase Right granted hereunder;
(iv) to approve forms of agreement for use under the
Plan;
(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the shares of Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;
(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
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(x) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary
or advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
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(i) No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than 2,000,000 Shares.
(ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional
2,000,000 Shares which shall not count against the limit set forth in subsection
(i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option is cancelled in the same fiscal year of
the Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
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<PAGE> 8
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
(v) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;
(vi) a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of
payment; or
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<PAGE> 9
(viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
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<PAGE> 10
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept such offer. The offer
shall be accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason
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<PAGE> 11
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
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<PAGE> 12
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the
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<PAGE> 13
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
17. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
18. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
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<PAGE> 14
19. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
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<PAGE> 15
SAGENT TECHNOLOGY, INC.
1998 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 1998 Stock
Plan shall have the same defined meanings in this Stock Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number _________________________
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $________________________
Total Number of Shares Granted _________________________
Total Exercise Price $________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: _________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
[25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/48 of the Shares subject to the Option
shall vest each month thereafter, subject to the Optionee continuing to be a
Service Provider on such dates].
<PAGE> 16
Termination Period:
This Option may be exercised for ninety (90) days after Optionee ceases
to be a Service Provider. Upon the death, Disability or retirement of the
Optionee, this Option may be exercised for one year after Optionee ceases to be
a Service Provider. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(1) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.
(2) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by such aggregate Exercise
Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
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<PAGE> 17
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(1) cash;
(2) check;
(3) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or
(4) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, AND (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(1) Exercising the Option.
(a) NSO. The Optionee may incur regular federal income
tax liability upon exercise of a NSO. The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Exercised Shares on the date of
exercise over their aggregate Exercise Price. If the Optionee is an Employee or
a former Employee, the Company will be required to withhold from his or her
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.
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<PAGE> 18
(b) ISO. If this Option qualifies as an ISO, the
Optionee will have no regular federal income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price will be treated as an
adjustment to alternative minimum taxable income for federal tax purposes and
may subject the Optionee to alternative minimum tax in the year of exercise. In
the event that the Optionee ceases to be an Employee but remains a Service
Provider, any Incentive Stock Option of the Optionee that remains unexercised
shall cease to qualify as an Incentive Stock Option and will be treated for tax
purposes as a Nonstatutory Stock Option on the date three (3) months and one (1)
day following such change of status.
(2) Disposition of Shares.
(a) NSO. If the Optionee holds NSO Shares for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(b) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.
(3) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.
7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.
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<PAGE> 19
8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: SAGENT TECHNOLOGY, INC.
___________________________________ ___________________________________
Signature By
___________________________________ ___________________________________
Print Name Title
___________________________________
Residence Address
___________________________________
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<PAGE> 20
EXHIBIT A
1998 STOCK PLAN
EXERCISE NOTICE
Sagent Technology, Inc.
Attention: [Secretary]
1. Exercise of Option. Effective as of today, ________________, 199__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Sagent Technology, Inc. (the "Company")
under and pursuant to the 1998 Stock Plan (the "Plan") and the Stock Option
Agreement dated , 19___ (the "Option Agreement"). The purchase price for the
Shares shall be $ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 13 of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
<PAGE> 21
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.
Submitted by: Accepted by:
PURCHASER: SAGENT TECHNOLOGY, INC.
___________________________________ ___________________________________
Signature By
___________________________________ ___________________________________
Print Name Its
Address: Address:
___________________________________
___________________________________
___________________________________
Date Received
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<PAGE> 1
EXHIBIT 10.4
SAGENT TECHNOLOGY, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Sagent Technology, Inc., a Delaware
corporation, and any Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross
earnings and commissions, exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.
(f) "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "Employee" shall mean any individual who is an Employee of
the Company for tax purposes whose customary employment with the Company is at
least 20 hours per week and more than five months in any calendar year. For
purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved
by the Company. Where the period of leave exceeds 90 days and the individual's
right to reemployment is not guaranteed either by statute or by contract, the
employment relationship shall be deemed to have terminated on the 91st day of
such leave.
(h) "Enrollment Date" shall mean the first day of each Offering
Period.
(i) "Exercise Date" shall mean the last day of each Offering
Period.
(j) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq
<PAGE> 2
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
on the date of such determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable, or;
(2) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable, or;
(3) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.
(k) "Offering Period" shall mean a period of approximately six
months during which an option granted pursuant to the Plan may be exercised,
commencing on the first Trading Day on or after May 1 and terminating on the
last Trading Day in the period ending the following October 31, or commencing on
the first Trading Day on or after November 1 and terminating on the last Trading
Day in the period ending the following April 30; provided, however, that the
first Offering Period under the Plan shall commence with the first Trading Day
on or after the date on which the Securities and Exchange Commission declares
the Company's Registration Statement effective and ending on the last Trading
Day on or before October 31, 1999. The duration of Offering Periods may be
changed pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(n) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
(o) "Subsidiary" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(p) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.
3. Eligibility.
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
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<PAGE> 3
(b) Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing 5% or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any Subsidiary,
or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries accrues at a
rate which exceeds $25,000 worth of stock (determined at the fair market value
of the shares at the time such option is granted) for each calendar year in
which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after May 1 and November 1 each year, or on such other date as the Board
shall determine, and continuing thereafter until terminated in accordance with
Section 20 hereof; provided, however, that the first Offering Period under the
Plan shall commence with the first Trading Day on or after the date on which the
Securities and Exchange Commission declares the Company's Registration Statement
effective and ending on the last Trading Day on or before October 31, 1999. The
Board shall have the power to change the duration of Offering Periods (including
the commencement dates thereof) with respect to future offerings without
stockholder approval if such change is announced at least five days prior to the
scheduled beginning of the first Offering Period to be affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding twenty percent (20%) of
the Compensation which he or she receives on each pay day during the Offering
Period.
(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.
(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the
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<PAGE> 4
Offering Period by completing or filing with the Company a new subscription
agreement authorizing a change in payroll deduction rate. The Board may, in its
discretion, limit the number of participation rate changes during any Offering
Period. The change in rate shall be effective with the first full payroll period
following five business days after the Company's receipt of the new subscription
agreement unless the Company elects to process a given change in participation
more quickly. A participant's subscription agreement shall remain in effect for
successive Offering Periods unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to 0% at any time during an
Offering Period. Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided, that in no event shall
an Employee be permitted to purchase during each Offering Period more than
10,000 shares (subject to any adjustment pursuant to Section 19), and provided
further, that such purchase shall be subject to the limitations set forth in
Sections 3(b) and 12 hereof. Exercise of the option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof. The Option shall expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. Any other monies left over in a participant's account after
the Exercise Date shall be returned
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<PAGE> 5
to the participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.
10. Withdrawal.
(a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering Periods
which commence after the termination of the Offering Period from which the
participant withdraws.
11. Termination of Employment. Upon a participant's ceasing to be an
Employee for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15 hereof, and such participant's
option shall be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 450,000 shares,
plus an annual increase to be added on each anniversary date of the adoption of
the Plan equal to (i) the optioned stock underlying options granted in the
immediately preceding year, or (ii) a lesser amount determined by the Board,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 19 hereof. If, on a given Exercise Date, the number of shares with
respect to which options are to be exercised exceeds the
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<PAGE> 6
number of shares then available under the Plan, the Company shall make a pro
rata allocation of the shares remaining available for purchase in as uniform a
manner as shall be practicable and as it shall determine to be equitable.
(b) The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall
be registered in the name of the participant or in the name of the participant
and his or her spouse.
14. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
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<PAGE> 7
17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the Reserves, the maximum number of shares each
participant may purchase per Offering Period (pursuant to Section 7), as well as
the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
business days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, the Offering Period
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date"). The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten business days prior to the New Exercise Date, that the Exercise Date
for the participant's option has been
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<PAGE> 8
changed to the New Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.
20. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 19 hereof,
no such termination can affect options previously granted; provided, that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best
interests of the Company and its stockholders. Except as provided in Section 19
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval in such a
manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
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<PAGE> 9
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten years
unless sooner terminated under Section 20 hereof.
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<PAGE> 10
EXHIBIT A
SAGENT TECHNOLOGY, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. _____________________________________ hereby elects to participate in
the Sagent Technology, Inc. 1999 Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribes to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement
and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (from 1 to 20%) during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is
in all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is
subject to stockholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse only):
________________________.
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within two years after the Enrollment Date (the first day of
the Offering Period during which I purchased such shares), I will be
treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the excess
of the fair market value of the shares at the time such shares were
purchased by me over the price which I paid for the shares. I hereby
agree to notify the Company in writing within 30 days after the date of
any disposition of shares and I will make adequate provision for
Federal, state or other tax withholding obligations, if any, which
arise upon the disposition of the Common Stock. The Company may, but not
be obligated to, withhold from my compensation the amount necessary to
meet any
<PAGE> 11
applicable withholding obligation including any withholding necessary to
make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Common Stock by me. If I
dispose of such shares at any time after the expiration of the two-year
holding period, I understand that I will be treated for federal income
tax purposes as having received income only at the time of such
disposition, and that such income will be taxed as ordinary income only
to the extent of an amount equal to the lesser of (1) the excess of the
fair market value of the shares at the time of such disposition over the
purchase price which I paid for the shares, or (2) 15% of the fair
market value of the shares on the first day of the Offering Period. The
remainder of the gain, if any, recognized on such disposition will be
taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
Name: (Please print)
----------------------------------------------------------
(First) (Middle) (Last)
- ------------------------- -------------------------------------------------
Relationship
-------------------------------------------------
(Address)
Employee's Social
Security Number:
-------------------------------------------------
Employee's Address:
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
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<PAGE> 12
Dated:
------------------ ----------------------------------------------------
Signature of Employee
----------------------------------------------------
Spouse's Signature (If beneficiary other than spouse)
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<PAGE> 13
EXHIBIT B
SAGENT TECHNOLOGY, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Sagent
Technology, Inc. 1999 Employee Stock Purchase Plan which began on ___________,
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.
Name and Address of Participant:
------------------------------------
------------------------------------
------------------------------------
Signature:
------------------------------------
Date:
-------------------------------
<PAGE> 1
EXHIBIT 10.5
SAGENT TECHNOLOGY, INC.
1999 DIRECTOR OPTION PLAN
1. Purposes of the Plan. The purposes of this Plan are:
o to attract and retain the best available personnel for service as
Outside Directors (as defined herein) of the Company,
o to provide additional incentive to Outside Directors.
Options granted under the Plan will be Nonstatutory Stock Options.
Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, and the applicable laws of any
foreign country or jurisdiction where Options or Stock Purchase Rights are, or
will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Sagent Technology, Inc., a Delaware corporation.
(h) "Director" means a member of the Board.
(i) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
<PAGE> 2
(j) "Employee" means any person employed by the Company or any Parent
or Subsidiary of the Company. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(m) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
(n) "Option" means a nonstatutory stock option granted pursuant to
the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(o) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(p) "Optioned Stock" means the Common Stock subject to an Option or a
Stock Purchase Right.
(q) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(r) "Outside Director" means a Director who is not an Employee.
<PAGE> 3
(s) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(t) "Plan" means this 1999 Director Option Plan.
(u) "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of a Stock Purchase Right under Section 11 below.
(v) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(w) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 11 below.
(x) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 150,000 Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated).
However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Administration. The Plan shall be administered by (i) the Board
or (ii) a Committee, which committee shall be constituted to satisfy Applicable
Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common Stock;
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<PAGE> 4
(ii) to select the Outside Directors to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine whether and to what extent Options and Stock
Purchase Rights are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options or Stock Purchase Rights may be exercised (which may be based
on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;
(vii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(ix) to modify or amend each Option (subject to Section 14(b)
of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;
(x) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Stock Purchase Right
previously granted by the Administrator;
(xi) to determine the terms and restrictions applicable to
Options or Stock Purchase Rights;
(xii) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections by an Optionee
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable; and
<PAGE> 5
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Options and Stock Purchase Rights may be granted only to
Outside Directors.
6. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue until terminated under Section 14 of the Plan.
7. Term of Option. The term of each Option shall be stated in the Option
Agreement.
8. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
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<PAGE> 6
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or
(viii) any combination of the foregoing methods of payment.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Service with the Company. If an Optionee ceases to
provide service to the Company (either as a Director, Employee, or consultant),
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Option Agreement, and only to the extent that the Option is vested on the date
of termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for thirty (30)
days following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Option Agreement or herein, as
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<PAGE> 7
applicable, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
(c) Disability of Optionee. In the event Optionee's service to
the Company (either as a Director, employee or consultant) terminates as a
result of Disability, the Optionee may exercise his or her Option, but only
within twelve (12) months following the date of such termination, and only to
the extent that the Optionee was entitled to exercise it on the date of such
termination (but in no event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not entitled to exercise an Option on
the date of termination, or if he or she does not exercise such Option (to the
extent otherwise so entitled) within the time specified in the Option Agreement
or herein, as applicable, the Option shall terminate.
(d) Death of Optionee. In the event of an Optionee's death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within six (6) months
following the date of death, and only to the extent that the Optionee was
entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option on the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified in the Option Agreement or herein, as applicable, the Option
shall terminate.
10. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. If the Administrator makes an
Option transferable, such Option shall contain such additional terms and
conditions as the Administrator deems appropriate.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by
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<PAGE> 8
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at such rate as the Administrator may determine.
(c) Other Provisions. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
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<PAGE> 9
(c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation or the sale of substantially all of the assets of
the Company, outstanding Options or Stock Purchase Rights may be assumed or
equivalent options or rights may be substituted by the successor corporation or
a Parent or Subsidiary thereof (the "Successor Corporation"). If an Option or
Stock Purchase Right is assumed or substituted for, the Option or Stock Purchase
Right or equivalent option or right shall continue to be exercisable as provided
in Section 4 hereof for so long as the Optionee serves as a Director or a
director of the Successor Corporation. Following such assumption or
substitution, if the Optionee's status as a Director or director of the
Successor Corporation, as applicable, is terminated other than upon a voluntary
resignation by the Optionee, the Option or option shall become fully
exercisable, including as to Shares for which it would not otherwise be
exercisable. Thereafter, the Option or option shall remain exercisable in
accordance with Sections 9(b) through (d) above.
If the Successor Corporation does not assume an outstanding Option or
Stock Purchase Right or substitute for it an equivalent option or right, the
Option or Stock Purchase Right shall become fully vested and exercisable,
including as to Shares for which it would not otherwise be exercisable. In such
event the Board shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
upon the expiration of such period the Option or Stock Purchase Right shall
terminate. In addition, any Restricted Stock purchased upon the exercise of a
Stock Purchase Right granted under this Plan shall become fully vested and the
Company's or the Successor Corporation's repurchase right shall lapse.
For the purposes of this Section 12(c), an Option or Stock Purchase
Right shall be considered assumed if, following the merger or sale of assets,
the Option or Stock Purchase Right confers the right to purchase or receive, for
each Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares).
If such consideration received in the merger or sale of assets is not solely
common stock of the successor corporation or its Parent, the Administrator may,
with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Stock subject to the Option or Stock Purchase Right, to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.
13. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.
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<PAGE> 10
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.
(c) Shareholder Approval. The Board shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
Option or Stock Purchase Right the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
16. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
-10-
<PAGE> 11
SAGENT TECHNOLOGY, INC.
1999 DIRECTOR OPTION PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
[OPTIONEE'S NAME AND ADDRESS]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number
-------------------------
Date of Grant
-------------------------
Vesting Commencement Date
-------------------------
Exercise Price per Share $
-------------------------
Total Number of Shares Granted
-------------------------
Total Exercise Price $
-------------------------
Type of Option: Nonstatutory Stock Option
Term/Expiration Date:
-------------------------
Vesting Schedule:
Subject to the Optionee continuing to be an Outside Director on such
dates, this Option shall vest and become exercisable in accordance with the
following schedule:
[25% OF THE SHARES SUBJECT TO THE OPTION SHALL VEST EACH YEAR ON THE
ANNIVERSARY OF THE VESTING COMMENCEMENT DATE; PROVIDED, HOWEVER, THAT OPTIONEE
BE PROVIDING SERVICES TO THE COMPANY ON SUCH DATES].
<PAGE> 12
Termination Period:
This Option may be exercised for thirty (30) days after Optionee ceases
to provide service to the Company. Upon the death or Disability of the Optionee,
this Option may be exercised for such longer period as provided in the Plan. In
no event shall this Option be exercised later than the Term/Expiration Date as
provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 14(b) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to [TITLE]. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by such aggregate Exercise
Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
3. Optionee's Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his
or her Investment Representation Statement in the form attached hereto as
Exhibit B.
<PAGE> 13
4. Lock-Up Period. Optionee hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
5. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash;
(b) check;
(c) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or
(d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, AND (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
6. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.
7. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
9. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE,
-3-
<PAGE> 14
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option. The Optionee may incur regular federal
income tax liability upon exercise of an NSO. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Exercised Shares on the
date of exercise over their aggregate Exercise Price.
(b) Disposition of Shares. If the Optionee holds NSO Shares for
at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes.
10. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE SAGENT TECHNOLOGY, INC.
- ----------------------------------- -----------------------------------------
Signature By
- ----------------------------------- -----------------------------------------
Print Name Title
- ------------------------------------
Residence Address
- ------------------------------------
<PAGE> 15
EXHIBIT A
SAGENT TECHNOLOGY, INC.
1999 DIRECTOR OPTION PLAN
EXERCISE NOTICE
Sagent Technology, Inc.
800 W. El Camino Real
Third Floor
Mountain View, California 94040
Attention: [TITLE]
1 Exercise of Option. Effective as of today, ________________, ______,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Sagent Technology, Inc. (the "Company")
under and pursuant to the 1999 Director Option Plan (the "Plan") and the Stock
Option Agreement dated _________, ______ (the "Option Agreement"). The purchase
price for the Shares shall be $ __________, as required by the Option Agreement.
2 Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3 Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4 Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 11 of the
Plan.
5 Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
<PAGE> 16
6. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COMPANY COUNSEL SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST
REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH
IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Interpretation. Any dispute regarding the interpretation of
this Exercise Notice shall be submitted by Optionee or by the Company forthwith
to the Administrator which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Administrator shall be final
and binding on all parties.
<PAGE> 17
7. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.
Submitted by: Accepted by:
PURCHASER SAGENT TECHNOLOGY, INC.
- ---------------------------------- -------------------------------------
Signature By
- ---------------------------------- -------------------------------------
Print Name Title
- ----------------------------------
Date Received
Address: Address: 800 W. El Camino Real
--------------------------- ------- Third Floor
Mountain View, California 94040
-3-
<PAGE> 18
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE:
COMPANY: SAGENT TECHNOLOGY, INC.
SECURITY: COMMON STOCK
AMOUNT:
DATE:
In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, and any other legend required under applicable
state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. Rule 701 provides that if the issuer qualifies under Rule
701 at the
<PAGE> 19
time of the grant of the Option to the Optionee, the exercise will be exempt
from registration under the Securities Act. In the event the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any
market stand-off agreement may require) the Securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (1) the resale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(d) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
-----------------------------------------
Date: , 19
-------------
<PAGE> 1
EXHIBIT 10.6
MASTER EQUIPMENT LEASE AGREEMENT
Agreement No. 113 Dated: August 7, 1995
LESSOR: LIGHTHOUSE CAPITAL PARTNERS, L.P., a Delaware limited partnership
("Lessor"), 100 Drakes Landing Road, Suite 260, Greenbrae,
California 94904
LESSEE: SAGENT TECHNOLOGY, INC., a California corporation ("Lessee"),
ADDRESS: 750 Menlo Avenue, Suite 300, Menlo Park, California 94025.
IN CONSIDERATION of the mutual covenants contained herein, the parties
agree as follows:
1. LEASE. Lessor leases to Lessee and Lessee leases from Lessor the
personal property described in each Equipment Schedule executed pursuant hereto,
subject to the terms and conditions of this Master Equipment Lease Agreement
("Master Lease") and the applicable Lease Line Schedule (defined below). The
"Equipment" (as defined in the Lease Line Schedule) is being leased for
commercial or business purposes only, and not for personal, home, or family
purposes. The parties agree that each Lease is a "finance lease" under the
Uniform Commercial Code (as in effect in the State of California during the term
of the Lease and referred to hereafter as the "UCC").
2. LEASE LINE SCHEDULE. "Lease Line Schedule" means a Lease Line
Schedule in the form of EXHIBIT A, signed by Lessor and Lessee and incorporating
by reference the terms and provisions of this Master Lease.
3. EQUIPMENT SCHEDULES. "Equipment Schedule" means an Equipment Schedule
in the form of EXHIBIT B, signed by Lessor and Lessee and incorporating, by
reference, the terms and provisions of this Master Lease and the applicable
Lease Line Schedule. Each Equipment Schedule shall constitute a separate and
independent lease (a "Lease"); the original of such Lease shall consist of the
signed Equipment Schedule and a copy of the Master Lease and applicable Lease
Line Schedule. Capitalized terms used, but not defined, in this Master Lease
have the meanings given to such terms in the applicable Lease Line Schedule or
Equipment Schedule, as the case may be.
4. TERM AND RENTALS.
(a) ACCEPTANCE. The Lease shall commence with respect to
Equipment described on the Equipment Schedule upon the Acceptance Date. The
"Acceptance Date" shall be the date upon which Lessee executes a Delivery and
Acceptance Certificate in the form of EXHIBIT C.
(b) TERM AND PAYMENT OF RENT. The lease term for the Equipment
shall be the "Lease Term" set forth in the Equipment Schedule which shall
commence on the "Commencement Date" (as defined in the Lease Line Schedule).
Lessee agrees to pay to Lessor the "Rental Payments" for the Lease Term, in the
amounts and at the times set forth in the Equipment Schedule.
(c) INTERIM PERIOD. If the Acceptance Date does not fall on the
Commencement Date, then Lessee agrees to pay to Lessor "Interim Rent" for the
period commencing on the Acceptance Date through and including the day preceding
the Commencement Date (the "Interim Period"). The Interim Rent payment for the
Interim Period shall accrue at the "Interim Rate" (as defined in the Lease Line
Schedule) and shall be due and payable in full on the Commencement Date.
(d) LEASE TERMINATION. Lessee may terminate the Lease at the
expiration of the Lease Term or any renewal term (the "Lease Termination") by
submitting to Lessor a Notice of Election in the form of EXHIBIT D. If a Notice
of Election is not submitted by Lessee to Lessor during the "Advance Notice
Period" (as defined in the Lease Line Schedule), then the Lease Term or any
renewal Term will be automatically extended for an additional period equal to
the "Automatic Extension Period" (as defined in the Lease Line Schedule). The
Lease will continue to automatically extend until Lessee submits to Lessor a
Notice of Election. The Lease may only be
1
<PAGE> 2
terminated as expressly provided in this Section, in the applicable Lease Line
Schedule or in the applicable Equipment Schedule. Lessee agrees to continue
paying rent for the Equipment in the amount of the Rental Payment set forth in
the Equipment Schedule until the later of (i) the expiration of the Lease Term,
any renewal term and any Automatic Extension Period and (ii) either (A) the
purchase option price is paid pursuant to Section 6(a), or (B) a mutually agreed
renewal of the Lease takes effect pursuant to Section 6(b), or (C) the Equipment
is returned in the manner and condition prescribed in Section 6(c), in each case
after delivery of a Notice of Election.
(e) NET LEASE. Each Equipment Schedule shall be a net lease, and
Lessee's obligation to pay all rent and other sums thereunder shall be absolute
and unconditional, and shall not be subject to any abatement, reduction,
set-off, defense, counterclaims, interruption, deferment or recoupment, for any
reason whatsoever.
5. LATE FEE. Lessee shall pay a late charge on any rent payments or
other sums due hereunder which are past due, in the amount specified in the
Lease Line Schedule, payable on demand. In addition, interest shall accrue daily
at the "Default Rate" (as defined in the Lease Line Schedule), or if such rate
exceeds the maximum rate allowed by law, then at such maximum rate, and shall be
payable on demand.
6. LEASE TERMINATION OPTIONS. Upon Lease Termination, Lessee will have
the option to purchase the Equipment, renew the term of the Lease, or return the
Equipment to Lessor, as set forth below. Lessee shall specify its election of a
Lease Termination Option in the Notice of Election.
(a) PURCHASE OPTION. If Lessee exercises the option to purchase,
then, provided no Event of Default has occurred and is then continuing, Lessee
shall at the expiration of the Lease Term, renewal term or extension, as the
case may be, purchase the Equipment. The purchase price shall be the Equipment's
then fair market value ("FMV"). FMV, as applied to a purchase option, shall be
determined by Lessor based on the price a willing buyer would pay and a willing
seller would accept (neither buyer nor seller being under compulsion to act) for
the Equipment as installed and in use, giving due consideration to its
condition, utility, revenue-producing capability, and replacement costs. If
Lessee fails to agree with Lessor's good faith determination of the FMV, Lessee
shall nevertheless pay Lessor's invoice and provide Lessor with a written
request for a determination of the FMV with or prior to such payment. Within ten
(10) days after such request Lessor and Lessee shall agree on an appraiser to
determine the FMV or, lacking such agreement, shall each tender the name of an
appraiser. The appraiser(s) shall, within thirty (30) days, either agree on the
FMV or select a third appraiser, to form a committee to determine the FMV.
Determination by the appraiser(s) shall be final and binding on both parties.
Within fifteen (15) days after such determination, Lessor shall refund any
excess received over the FMV, and/or Lessee shall pay any additional amount of
the FMV above the amount previously paid. Each party shall bear the fees and
expenses of any appraiser which it names and share equally the fees and expenses
of any appraiser(s) jointly selected. If the appraised FMV is within 5% of the
amount invoiced by Lessor, then Lessee shall pay all appraiser fees and
expenses. The purchase option price shall be paid not later than the last day of
the Lease Term.
(b) RENEWAL. If Lessee exercises the option to renew this Lease,
such renewal shall be upon the terms and conditions of this Master Lease and the
applicable Lease Line Schedule, for a rental period and rental amount to be
agreed upon by Lessee and Lessor.
(c) RETURN. If the Notice of Election specifies return of the
Equipment, Lessee at its own risk and expense (i) will immediately return the
Equipment to Lessor in the same condition as when delivered, ordinary wear and
tear excepted, at such location as Lessor shall designate; and (ii) will, on
request from Lessor, obtain from the Equipment supplier (or other maintenance
service supplier approved by Lessor) a certificate stating that the Equipment
qualifies for continued maintenance service at the standard rates and terms then
in effect.
7. USE; MAINTENANCE.
(a) Lessee, at its expense, shall make all necessary site
preparations and cause the Equipment to be operated in accordance with any
applicable operating manuals and manufacturer's instructions. Notwithstanding
any transfer or assignment by Lessor and provided Lessee is not in default
hereunder, Lessee shall have the right to quietly possess and use the Equipment
as provided herein without interference by Lessor, its assigns or any other
third party claiming through or under Lessor.
2
<PAGE> 3
(b) Lessee shall effect and bear the expense of all necessary
repair, maintenance, operation and replacements required to be made to maintain
the Equipment in good condition, reasonable wear and tear excepted, and to
comply with all domestic and international laws to which the use and operation
of the Equipment may be or become subject. All replacement Equipment and parts
furnished in connection with such maintenance or repair shall immediately become
the property of Lessor and part of the Equipment for all purposes hereof. All
such maintenance, repair and replacement services shall be immediately paid for
and discharged by Lessee with the result that no lien under any applicable laws
will attach to the Equipment as a result of the performance of such services or
the provision of any such material.
8. INSURANCE. Lessee shall obtain and maintain for the Lease Term (and
any renewal term or extension), at its own expense, (a) "all risk" insurance
against loss or damage to the Equipment, (b) commercial general liability
insurance (including contractual liability, products liability and completed
operations coverage) reasonably satisfactory to Lessor, and (c) such other
insurance against such other risks of loss and with such terms, as shall in each
case be reasonably satisfactory to or reasonably required by Lessor (as to
carriers, amounts and otherwise). The amount of the "all risk" insurance shall
be greater than or equal to the Stipulated Loss Value (as defined in Section 9
below) of all Equipment outstanding under the Lease Line Schedule, and must
otherwise be reasonably satisfactory to Lessor as of each anniversary date of
this Lease. Any increase in the amount of such insurance coverage, other than
"all risk", reasonably requested by Lessor shall be put into effect on the next
succeeding renewal date of such insurance.
Each "all risk" policy shall: (i) name Lessor as sole loss payee with
respect to the Equipment, (ii) provide for each insurer's waiver of its right of
subrogation against Lessor and Lessee, and (iii) provide that such insurance
shall not be invalidated by any action of, or breach of warranty by, Lessee of a
provision of any of its insurance policies, and shall waive set-off,
counterclaim or offset against Lessor.
Each liability policy shall name Lessor as an additional insured and
provide that such insurance shall have cross-liability and severability of
interest endorsements (which shall not increase the aggregate policy limits of
Lessee's insurance).
All insurance policies shall provide that Lessee's insurance shall be
primary without a right of contribution of Lessor's insurance, if any, or any
obligation on the part of Lessor to pay premiums of Lessee, and shall contain a
clause requiring the insurer to give Lessor at least 30 days' prior written
notice of its cancellation (other than cancellation for non-payment for which 10
days' notice shall be sufficient. Lessee shall on or prior to the date of
Equipment Schedule No. 1 and prior to each policy renewal, furnish to Lessor
certificates of insurance or other evidence satisfactory to Lessor that such
insurance coverage is in effect. Lessee further agrees to give Lessor prompt
notice of any damage to, or loss of, the Equipment, or any part thereof.
9. LOSS OR DAMAGE. If any items of Equipment shall become lost, stolen,
destroyed, or damaged beyond repair for any reason, or in the event of
condemnation, confiscation, seizure or requisition of title to or use of such
items (collectively, an "Event of Loss"), Lessee shall promptly pay to Lessor
the applicable Stipulated Loss Value of the Equipment subject to the Event of
Loss. Upon payment by Lessee of the Stipulated Loss Value, Lessor will transfer
to Lessee, "AS IS, WHERE IS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY," all
of Lessor's right, title and interest, if any, in such items of Equipment. The
"Stipulated Loss Value" payable by Lessee under this Lease shall be an amount
equal to the product of (a) Lessor's Cost of the affected Equipment and (b) the
percentage set forth in the table attached to the applicable Lease Line Schedule
as ANNEX A opposite the Rental Payment number next following the Event of Loss.
Stipulated Loss Values and Rental Payments shall not be prorated.
10. TITLE, INSPECTION AND LOCATION.
(a) TITLE. Lessor and Lessee confirm their intent that title to
the Equipment shall remain in Lessor (or its successors and assigns)
exclusively. If requested by Lessor, Lessee will affix plates or markings on the
Equipment and on any operating manuals and manufacturer's instructions
indicating the interests of Lessor and its assigns therein, and Lessee will not
allow any other indicia of ownership or other interest in the Equipment to
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be placed on the Equipment. Lessee shall not sell, assign, grant a security
interest in, sublet, pledge, hypothecate or otherwise encumber or suffer a lien
upon or against this Lease or the Equipment.
(b) INSPECTION. Lessor (through any of its officers, employees or
agents) shall have the right to inspect the Equipment during regular business
hours, with reasonable notice, and in compliance with Lessee's reasonable
security procedures; provided, that such inspections will be conducted no more
often than every six (6) months unless an Event of Default, or event which, with
notice or lapse of time or both, would become an Event of Default, has occurred
and is continuing.
(c) LOCATION. In the case of Equipment other than mobile
Equipment, Lessee may move such Equipment from the installation address shown on
the Equipment Schedule (or any other location for which Lessee has complied with
this provision) only if (i) the new location is within the continental United
States, and (ii) Lessee gives at least 30 days' prior written notice of the
relocation and provides UCC-1 financing statements, landlord waivers or such
other documentation as Lessor reasonably requests to protect its interest in the
Equipment. In the case of mobile equipment (including, without limitation,
lap-top computers), Lessee agrees to obtain from the person using such mobile
Equipment and deliver to Lessor, an Acknowledgment in the form of EXHIBIT F.
(d) Lessee shall keep copies of all operating manuals and
manufacturer's instructions with respect to the Equipment in good condition at
the locations specified in Section 10(c).
11. LESSEE'S REPRESENTATIONS, WARRANTIES AND WAIVERS. Upon execution of
the Master Lease and each Equipment Schedule, Lessee warrants and represents the
following:
(a) Lessee is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation. Lessee has full
power and authority and all necessary licenses and permits to carry on its
business as presently conducted, to own or hold under lease its properties and
to enter into this Master Lease, the Lease Line Schedule and each Equipment
Schedule and to perform its obligations thereunder; and Lessee is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of its properties or the nature of its
business or the performance of its obligations under this Master Lease, the
Lease Line Schedule and any Equipment Schedule requires such qualification,
except for such jurisdictions in which failure to qualify would not have a
material adverse effect on Lessee.
(b) The execution and delivery by Lessee of this Master Lease,
the Lease Line Schedule and each Equipment Schedule and the performance by
Lessee of its obligations thereunder have been duly authorized by all necessary
corporate action on the part of Lessee; and do not and will not contravene the
provisions of, or constitute a default (either with or without notice or lapse
of time, or both) under, or result in the creation of any lien upon, the
Equipment or any property of Lessee under any indenture, mortgage, contract or
other instrument to which Lessee is a party or by which Lessee or its properties
is bound.
(c) No consent or approval of, giving of notice to, registration
with, or taking of any other action by, any state, federal, foreign or other
governmental commission, agency or regulatory authority or any other person or
entity is required for the consummation or performance by Lessee of the
transactions contemplated under this Master Lease, the Lease Line Schedule and
each Equipment Schedule.
(d) This Master Lease, the Lease Line Schedule and each Equipment
Schedule, when executed by Lessee, constitute legal, valid and binding
agreements of Lessee enforceable against Lessee in accordance with their terms,
except as limited by any bankruptcy, insolvency, reorganization, or other
similar laws of general application affecting the enforcement of creditor or
Lessor rights.
(e) There are no actions, suits or proceedings pending or
threatened against or affecting Lessee or any property of Lessee in any court,
before any arbitrator of any kind or before or by any federal state, municipal
or other government department, commission, board, bureau, agency or
instrumentality (collectively "Governmental Body"), which, if adversely
determined, would materially adversely affect the business, financial condition,
assets, or operations of Lessee, or adversely affect the ability of Lessee to
perform its obligations under
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this Master Lease, the Lease Line Schedule and each Equipment Schedule; and
Lessee is not in default with respect to any order of any court, arbitrator or
Governmental Body or with respect to any material loan agreement, debt
instrument or contract with a supplier or customer of Lessee, except as
disclosed in writing to Lessor.
(f) To the extent permitted by applicable law, Lessee waives any
and all rights and remedies to: (i) cancel this Lease; (ii) repudiate this
Lease; (iii) reject the Equipment; (iv) revoke acceptance of the Equipment; (v)
recover damages from Lessor for any breaches of warranty or for any other
reason; (vi) claim a security interest in the Equipment in Lessee's possession
or control for any reason; (vii) deduct from Rental Payments all or any part of
any claimed damages resulting from Lessor's default, if any, under this Lease;
(viii) accept partial delivery of the Equipment; (ix) "cover" by making any
purchase or lease of or contract to purchase or lease equipment in substitution
for Equipment designated in the Lease; (x) recover any direct, general, special,
incidental, indirect, exemplary or consequential damages, for any reason
whatsoever; and (xi) obtain specific performance, replevin, detinue,
sequestration, claim and delivery or the like for any Equipment identified to
this Lease. To the extent permitted by applicable law, Lessee also waives any
rights now or hereafter conferred by statute or otherwise which may require
Lessor to sell, lease or otherwise use any Equipment in mitigation of Lessor's
damages or which may otherwise limit or modify any of Lessor's rights or
remedies.
12. ASSIGNMENT BY LESSOR. LESSEE ACKNOWLEDGES THAT LESSOR MAY SELL,
ASSIGN, GRANT A SECURITY INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY PART OF
ITS RIGHTS, TITLE AND INTEREST IN THIS LEASE AND THE EQUIPMENT WITHOUT NOTICE TO
OR CONSENT OF LESSEE. Upon Lessor's written notice to Lessee that this Lease, or
the right to the Rental Payments hereunder, have been assigned, Lessee shall, if
requested, pay directly to Lessor's assignee without abatement, deduction or
set-off all amounts which become due hereunder. Lessee waives and agrees it will
not assert against Lessor's assignee any counterclaim or set-off in any action
for rent under the Lease. Upon the assignment of this Lease, Lessor's assignee
shall have and be entitled to exercise any and all rights and remedies (but none
of the obligations) of lessor hereunder, and all references herein to Lessor
shall include Lessor's assignee. Lessee acknowledges that any assignment or
transfer by Lessor does not materially change Lessee's duties or obligations
under this Lease nor materially increase the burdens or risks imposed on Lessee.
13. ASSIGNMENT BY LESSEE. LESSEE MAY NOT, WITHOUT LESSOR'S PRIOR WRITTEN
CONSENT, (I) ASSIGN THIS LEASE, WHETHER BY OPERATION OF LAW OR OTHERWISE, OR
SUBLEASE THE EQUIPMENT OR ANY PART THEREOF OR (II) ASSIGN, GRANT A SECURITY
INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY PART OF ITS RIGHTS, TITLE AND
INTEREST IN AND TO THIS LEASE OR THE EQUIPMENT. In the event Lessee makes an
assignment, sublease or other transfer (to which Lessor has consented), Lessee
shall not thereby be relieved of its duties and obligations hereunder, for which
it shall remain fully responsible and liable (independent of its assignee).
14. TAXES.
(a) Lessee shall comply with all applicable federal, state,
local, foreign and international laws, regulations and orders relating to this
Lease. Lessee assumes liability for, and shall pay when due, and on a net
after-tax basis shall indemnify and defend Lessor against, all federal, state,
local, foreign and international fees, taxes and government charges (including,
without limitation, interest and penalties) of any nature imposed upon or in any
way relating to Lessor, Lessee, any item of Equipment or this Lease, except
federal, state and local taxes on or measured by Lessor's net income (other than
any such tax which is in substitution for or relieves Lessee from the payment of
taxes it would otherwise be obligated to pay to or reimburse Lessor for as
herein provided). Lessee shall at its expense file when due with the appropriate
authorities any and all tax and similar returns and reports required to be filed
with respect thereto or, if requested by Lessor, notify Lessor of all such
requirements and furnish Lessor with all information required for Lessor to
effect such filings, which filings shall also be at Lessee's expense. Any fees,
taxes or other charges paid by Lessor upon failure of Lessee to make such
payments shall at Lessor's option become immediately due from Lessee to Lessor.
(b) This Lease has been entered into on the assumption that
Lessor shall be entitled to all deductions, credits, and other tax benefits as
are provided in the Internal Revenue Code of 1986, including amendments as may
occur (the "Code"), to an owner of property including, without limitation,
depreciation
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deductions and interest deductions with respect to any debts incurred to finance
the purchase of the Equipment. If, as a result of any acts, omissions or
misrepresentations by Lessee or as a result of any changes in the Code, the
regulations issued thereunder or the administrative or judicial interpretations,
Lessor's projected after-tax economic return resulting from ownership and lease
of the Equipment is reduced, then Lessee's Rental Payments shall be increased in
an amount (based on Lessor's reasonable calculations) sufficient to provide the
same net after-tax economic return as if such acts or omissions or changes had
not occurred. Appropriate increases shall also be made in the applicable
Stipulated Loss Values for this Lease. In the event the Equipment is sold by
Lessor to another party, the net after-tax economic returns considered shall be
those of such other party.
15. EQUIPMENT WARRANTIES. Lessee acknowledges that (i) Lessee has
selected the supplier of the Equipment, (ii) Lessor acquired the goods or the
right to possession and use of the goods in connection with the Lease, and (iii)
Lessee received a copy of the contract by which Lessor acquired the Equipment or
the right to possession and use of the Equipment before signing the Lease.
LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES INCLUDING THOSE OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR USE WITH RESPECT TO THE EQUIPMENT AND DISCLAIMS THE
SAME. Lessor shall have no liability for any damages, whether direct, indirect,
general, special, incidental, exemplary or consequential, incurred by Lessee as
a result of any defect or malfunction of the Equipment. Lessee shall look solely
to the Equipment supplier for any and all claims related to the Equipment.
Lessor assigns to Lessee, for and during the Lease Term, any warranty on the
Equipment provided by the supplier. Lessor and Lessee agree that all limitations
on remedies and liability contained in this Lease represent a reasonable
allocation of risks that is part of the fundamental bargain between the parties.
16. EVENTS OF DEFAULT. An Event of Default shall occur if Lessee (i)
fails to pay any Rental Payment or other payment required under the Lease when
due and such failure continues for a period of five (5) days after written
notice from Lessor; or (ii) fails to perform or observe any other covenant,
condition or agreement to be performed or observed by it or breaches any
provision contained in the Lease or in any other document furnished to Lessor in
connection herewith, and such failure or breach continues for a period of thirty
(30) days after written notice from Lessor; or (iii) without Lessor's consent,
attempts to assign this Lease or sell, transfer, encumber, part with possession,
or sublet any item of Equipment; or (iv) makes any representation or warranty
herein or in any document furnished by Lessee in connection herewith, which
shall have been materially false or inaccurate when made or at the time to which
such representation or warranty relates; or (v) shall commit an act of
bankruptcy or become insolvent or bankrupt or make an assignment for the benefit
of creditors or consent to the appointment of a Trustee or Receiver or either
shall be appointed for Lessee or for a substantial part of its property without
its consent, or bankruptcy reorganization, or insolvency proceedings shall be
instituted by or against Lessee, and, if instituted against Lessee, shall not be
vacated or dismissed within sixty (60) days. Any Event of Default shall be
deemed material and a substantial impairment of Lessor's interests for the
purposes of this Lease, the UCC, and any other applicable law.
17. REMEDIES. Upon the occurrences of any Events of Default and at any
time thereafter, provided such Event of Default is then continuing, Lessor may,
in its discretion, do any one or more of the following:
(a) cancel any or all Leases which reference this Master Lease or
the Lease Line Schedule, upon notice to Lessee;
(b) recover any accrued and unpaid Rental Payments and other
amounts which are due and owing under the Leases so canceled on the Rental
Payment Date immediately preceding the date on which Lessor obtains possession
of the Equipment (or such earlier date as judgment is entered in favor of
Lessor) (the "Determination Date"), plus interest at the Default Rate;
(c) with or without canceling this Lease, recover (i) such
Stipulated Loss Value as of the Rental Payment Date immediately preceding the
Determination Date, and (ii) the amount of any loss or reduction of tax benefits
which Lessor anticipated it would receive if the Lease continued for its full
Lease Term;
(d) recover any amounts due under any indemnity then
determinable, plus interest at the Default Rate;
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(e) require that Lessee provide the return and certification of
the Equipment in accordance with Section 6(c) hereof;
(f) enter the premises where such Equipment is located and take
immediate possession of and remove the same, all without liability to Lessor or
its agents for such entry;
(g) sell any or all of the Equipment at public or private sale,
with or without notice to Lessee or advertisement, or otherwise dispose of,
hold, use, operate, lease to others or keep idle such Equipment, all free and
clear of any rights of Lessee and without any duty to account to Lessee for such
action or inaction or for any proceeds with respect thereto; and
(h) exercise any other right or remedy which may be available to
it under the UCC or other applicable law including the right to recover damages
for the breach hereof.
In addition, Lessee shall be liable for, and reimburse Lessor for, all
reasonable legal fees and all commercially reasonable costs and expenses
incurred by Lessor as a result of the foregoing defaults or the exercise of
Lessor's remedies, including without limitation recovering possession of the
Equipment, selling or leasing the Equipment (including broker's and sales
representative's fees and commissions), and placing any Equipment in the
condition and obtaining the certificate required by Section 6(c) hereof. No
remedy referred to in this Section is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy referred to above or otherwise
available to Lessor at law or in equity. No express or implied waiver by Lessor
of any default shall constitute a waiver of any other default by Lessor, or a
waiver of any of Lessor's rights.
18. INDEMNIFICATION. Lessee assumes liability for, and shall pay when
due, and shall indemnify, reimburse and hold each Indemnified Person (defined
below) harmless from and against all Claims (defined below), directly or
indirectly relating to or arising out of the acquisition, use, manufacture,
purchase, shipment, transportation, delivery, installation, lease or sublease,
ownership, operation, possession, control, storage, return or condition of any
item of Equipment (regardless of whether such item of Equipment is at the time
in the possession of Lessee), the falsity of any non-tax representation or
warranty of Lessee or Lessee's failure to comply with the terms of the Lease
during the Lease Term. The foregoing indemnity shall cover, without limitation,
(i) any Claim in connection with a design or other defect (latent or patent) in
any item of Equipment, (ii) any Claim for infringement of any patent, copyright,
trademark or other intellectual property right, or (iii) any Claim for
negligence or strict or absolute liability in tort; provided, however, that
Lessee shall not indemnify Lessor for any liability incurred by Lessor as a
direct and sole result of Lessor's gross negligence or willful misconduct.
"Claim" means all liabilities, losses, damages, actions, suits, demands,
claims of any kind and nature (including, without limitation, claims relating to
environmental discharge, cleanup or compliance), and all costs and expenses
whatsoever to the extent they may be incurred or suffered by an Indemnified
Person in connection therewith (including, without limitation, reasonable
attorneys' fees and expenses), fines, penalties (and other charges of applicable
governmental authorities), licensing fees relating to any item of Equipment,
damage to or loss of use of property (including, without limitation,
consequential or special damages to third parties or damages to Lessee's
property), or bodily injury to or death of any person (including, without
limitation, any agent or employee of Lessee).
"Indemnified Person" means Lessor (including without limitation, each of
its partners) and each of their respective successors, assigns, agents,
officers, directors, shareholders, partners, servants, agents and employees.
Such indemnities shall continue in full force and effect,
notwithstanding the expiration or termination of this Lease. Upon Lessor's
written demand, Lessee shall assume and diligently conduct, at its sole cost and
expense, the entire defense of any Indemnified Person against any indemnified
Claim described in this SECTION 18. Lessee shall not settle or compromise any
Claim against or involving Lessor without first obtaining Lessor's written
consent thereto, which consent shall not be unreasonably withheld. Lessee shall
give Lessor prompt notice of any occurrence, event or condition in connection
with which Lessor may be entitled to indemnification hereunder. The provisions
of this SECTION 18 are in addition to, and not in limitation of, the provisions
of SECTION 14(b).
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19. NOTICES. Any notices or demands required or permitted hereunder
shall be given to the parties in writing and by personal delivery, regular or
certified mail, facsimile or telegram at the address set forth in the Lease Line
Schedule or to such other address as the parties may hereafter substitute by
written notice given in the manner prescribed in this Section. Such notices or
demands shall be deemed given upon receipt in the case of personal delivery and
upon mailing or transmission in the case of mail, facsimile or telegram. Lessee
agrees to provide Lessor with thirty (30) days' prior written notice of (a) any
merger or consolidation with or into any other business organization, (b) any
sale, lease or other disposition of assets not in the ordinary course of
business, and (c) any other material change in Lessee's financial structure or
ownership.
20. FURTHER ASSURANCES. Lessee will promptly execute and deliver to
Lessor such further reasonable documents and take such further reasonable action
as Lessor may request in order to more effectively carry out the intent and
purpose of this Lease or an assignment of Lessor's interest herein.
21. MISCELLANEOUS. This Lease shall be binding upon and inure to the
benefit of the parties hereto, their permitted successors and assigns. Any
provision of the Lease which is unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof; and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction; provided,
however, that to the extent that the provisions of any such applicable law can
be waived, they are waived by Lessee. Time is of the essence with respect to the
Lease. The captions set forth herein are for convenience only and shall not
define or limit any of the terms hereof. THIS LEASE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES. LESSOR AND LESSEE
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING FROM THIS LEASE.
THIS LEASE SHALL BECOME EFFECTIVE AND BINDING ON THE PARTIES, THEIR RESPECTIVE
SUCCESSORS AND PERMITTED ASSIGNS, AND SHALL BE DEEMED EXECUTED AND PERFORMED IN
THE STATE OF CALIFORNIA, WHEN THE RELATED EQUIPMENT SCHEDULE IS ACCEPTED BY
LESSOR. LESSEE CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE COURTS OF
CALIFORNIA FOR THE RESOLUTION OF ANY DISPUTES HEREUNDER.
22. AMENDMENTS, MODIFICATIONS, WAIVERS. NONE OF THE PROVISIONS OF THIS
LEASE MAY BE AMENDED, MODIFIED OR WAIVED EXCEPT IN A WRITING SIGNED BY LESSOR
AND LESSEE.
<TABLE>
<S> <C>
INITIALS /s/ KG (LESSEE) INITIALS _______ (LESSOR)
LESSEE: LESSOR:
SAGENT TECHNOLOGY, INC. LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: /s/ KENNETH C. GARDNER By: LIGHTHOUSE MANAGEMENT
------------------------------ PARTNERS, L.P., its general partner
Name: Kenneth C. Gardner
------------------- By: LIGHTHOUSE CAPITAL
Title: President PARTNERS, INC., its general partner
------------------
By:
--------------------------------
Name: Richard D. Stubblefield
--------------------------------
Title: Managing Director
--------------------------------
</TABLE>
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[LOGO]
EXHIBIT 10.7
NO. 5785949
MASTER LEASE AGREEMENT
<TABLE>
<S> <C> <C>
Lessor: DELL FINANCIAL SERVICES L.P. Lessee: SAGENT TECHNOLOGY INC.
Mailing Address: Payment Address: Address:
- ---------------- ---------------- --------
PO Box 811550 PO Box 99355 800 W. El Camino
Chicago, Illinois Chicago, Illinois 3rd Floor
60681-1550 60693 Mountain View, CA 94040
Fax: _________________ Fax: ________________ Fax: 650-493-1290
Attention: COO Attention: __________ Attention: KATHY OVALLE
</TABLE>
This Master Lease Agreement (this "Agreement"), dated to be effective as
of September 26, 1998 (the "Effective Date"), is between the Lessor and Lessee
named above. Capitalized terms used in this Agreement and not defined in the
body of this Agreement are defined in Section 25 of this Agreement. The parties
agree as follows:
1. LEASE. Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor the Products that are described in any Lease Schedule to this Agreement
(each a "Schedule") executed and to be executed by the parties hereto, in
accordance with all of the terms and conditions of this Agreement. The
provisions hereof shall be deemed to be incorporated into each Schedule and each
Schedule shall constitute a separate lease of Products (a "Lease"). Except as
may be specifically provided in this Agreement, in the event of any conflict
between the terms of any Schedule and the terms of this Agreement, the terms of
the Schedule shall govern. All rights not specifically granted to Lessee in this
Agreement or in a Schedule are reserved by Lessor.
2. ACCEPTANCE, TERM AND RENT.
(a) All Products shall automatically be deemed to have been irrevocably
accepted by Lessee ("Acceptance") upon the expiration of the 5th Business Day
following the date the Products are shipped to Lessee (the "Acceptance Date")
unless Lessee specifically rejects such Products by written notice to Lessor
before the expiration of such period. The primary term of the Lease for any
Product hereunder (the "Primary Term") shall be as provided in the Schedule
related to such Product, subject to earlier termination as provided herein, and
the first day of the Primary Term (the "Commencement Date") shall be either (i)
the first day of the first month following the month in which the Acceptance
Date occurs (if the Acceptance Date falls on or before the 20th day of the
month) or (ii) the first day of the second month following the month in which
the Acceptance Date occurs (if the Acceptance Date falls after the 20th day of
the month). The period beginning on the Acceptance Date and ending on the last
day of the Primary Term, together with any renewals or extensions thereof, is
referred to herein as the "Lease Term." Each Lease of Products shall become
effective as of the applicable Acceptance Date and, unless sooner terminated as
provided herein or in the applicable Schedule, shall continue for the Lease
Term. Subject to Section 2((b)), the amount of the rental payments ("Rent"), and
the payment thereof, with respect to the Lease of any Product hereunder, shall
be as provided in the relevant Schedule.
(b) For each Schedule, Lessee irrevocably authorizes Lessor to adjust
the Products Acquisition Amount set forth on such Schedule and the related Rent
by no more than 10% to account for costs to Lessor associated with change
orders, returns, invoicing errors and similar matters. Lessee agrees to any
resulting adjustments in the transaction's terms, if different from those stated
in the applicable Schedule.
3. PAYMENT OBLIGATION.
(a) Rent shall be due on the first day of each Payment Period (as stated
in the related Schedule) starting on the Commencement Date; provided, however,
that added to the first payment of Rent shall be a prorated Rent calculated
based on a 30-day month for the period from the Acceptance Date to the
Commencement Date. Rent paid in advance, if any, shall be applied to the first
Rent due and then to the final payments of Rent, in reverse order, or, at
Lessor's option, to payment of any overdue obligation of Lessee (including Rent
owed with respect to other Products). All Rent and other amounts due and payable
under this Agreement or any Schedule shall be paid to Lessor in immediately
available funds of the United States of America at the payment address for
Lessor set forth above or at such other address as Lessor may designate from
time to time. Rent shall be due and payable whether or not Lessee has received
any notice that such Rent is due.
Page 1 of 10
<PAGE> 2
(b) EACH LEASE SHALL BE A NET LEASE, and any Rent or other amounts set
forth in this Agreement or any Schedule shall not include insurance, handling
costs, shipping or other transportation costs (except as may be specifically
provided in any Schedule); or sales, use, excise, turnover, purchase, property,
luxury, added value or other taxes, fees, levies or assessments, or (to the
extent Lessor may consent to Lessee's transfer of any Products to Persons
outside the United States of America) customs duties or surcharges on imports or
exports (collectively, "Taxes or Duties"), with respect to the Products, this
Agreement or any Lease, all of which shall be paid directly by or charged to the
account of Lessee. If Lessee claims eligibility for exemption from any tax, it
shall provide Lessor with a tax exemption certificate acceptable to the relevant
taxing authority. Any such Tax or Duty Lessor may be required to collect or pay
(other than taxes based on the net income of Lessor) shall be paid by Lessee
and, if not specifically set forth in this Agreement or the applicable Schedule
as payable concurrently with the payment of Rent, shall be due and payable to
Lessor on demand.
(c) LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER AMOUNTS WHEN DUE AND
TO OTHERWISE PERFORM AS REQUIRED UNDER THIS AGREEMENT OR ANY SCHEDULE SHALL BE
ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT,
REDUCTION, SET-OFF, DEFENSE, COUNTERCLAIM, INTERRUPTION, DEFERMENT OR RECOUPMENT
FOR ANY REASON WHATSOEVER WHETHER ARISING OUT OF THIS AGREEMENT, ANY SCHEDULE,
LESSOR'S STRICT LIABILITY OR NEGLIGENCE, THE CONDUCT OF A THIRD PARTY, TOTAL OR
PARTIAL LOSS OF PRODUCTS OR THEIR USE OR POSSESSION, OR OTHERWISE. If any
Product is unsatisfactory for any reason, Lessee shall make any claim solely
against the manufacturer or supplier of such Product and shall, nevertheless,
pay Lessor or its assignee all amounts due and payable under the Lease.
4. LICENSED MATERIALS. Notwithstanding anything to the contrary in this
Agreement or any Schedule, neither this Agreement nor any Schedule grants any
right, title or interest in or to that portion of any Products constituting or
containing Software or Documentation (collectively, "Licensed Materials"). Any
rights that Lessee may have with respect to Licensed Materials shall arise only
pursuant to license agreements between Lessee and the licensor(s) of such
Licensed Materials (collectively, the "Licensors") which license agreements (the
"Licenses") may be contained within the packaging associated with the Products.
All title to and ownership of the Licensed Materials (both to the original and
any whole or partial reproductions of the same, and all rights therein,
including all rights in patents, copyrights, trade secrets and other
intellectual property rights applicable thereto) is and shall remain in the
Licensors during and after the term of this Agreement. Any use of the terms
"sell," "purchase," "license," "lease," and the like in this Agreement or any
Schedule with respect to Licensed Materials shall be interpreted in accordance
with this Section 4.
5. PERFORMANCE BY LESSOR. As between Lessor and Lessee, Lessor shall have
the right to accept or reject in Lessor's sole discretion any request by Lessee
for the leasing of Products under this Agreement. No Lease shall commence until
Lessor signs the related Schedule. Each Schedule shall be binding upon Lessor
and Lessee from the date it is accepted and executed by Lessor; provided,
however, that Lessor shall have no obligations with respect to any Schedule
unless before the earlier of the expiration of credit approval or the expiration
of the price quotation (i) Lessor receives from Lessee, in a form acceptable to
Lessor in its sole discretion, the originals of a fully signed and completed
Schedule and such other documents as Lessor may require, (ii) Acceptance of the
Products has occurred, (iii) Lessor receives clear and unencumbered title to the
Products (excluding Licensed Materials), and (iv) no Event of Default, or any
event which, with the passage of time, the giving of notice, or both, would give
rise to an Event of Default ("Default") shall have occurred. In the event that
all of the foregoing conditions have not been satisfied within such period,
Lessor may, at Lessor's election, terminate such Schedule and Lessor shall
thereafter have no further liabilities or obligations with respect thereto. If
Lessor has accepted a Purchase Agreement Assignment (an "Assignment") with
respect to any Products but the Schedule applicable to such Products has been
terminated in accordance with the preceding sentence, Lessor may by notice to
Lessee be relieved of all further liabilities or obligations with respect to
such Products and transaction and reassign all rights and obligations under such
Assignment to Lessee without recourse or warranty and Lessee shall reimburse
Lessor for all expenses and other amounts incurred by Lessor with respect to
such Products and transaction, plus interest at the Overdue Rate from the date
such amounts were incurred by Lessor through the date such amounts are
reimbursed by Lessee.
6. USE; LOCATION; INSPECTION. Except as may be specifically provided in
any Schedule, Lessee shall be solely responsible for (i) unpacking and
installation of the Products and (ii) deinstalling and repacking the Products
for return in accordance with Section 7. Lessee shall cause Products to be
possessed and operated only (i) in accordance with the Documentation and
Applicable Laws (including intellectual property laws), and (ii) for the
internal business purposes of Lessee and not for any other use or disposition.
Lessee agrees to comply with all terms and conditions of any Licenses. Lessee
agrees not to remove Products from the locations set forth in the related
Schedule without Lessor's prior written consent, which consent shall not be
unreasonably withheld; provided, however, Lessee may without Lessor's consent
remove from such location any such Products which are designated on the
applicable Schedule as mobile equipment. Lessee shall allow Lessor and the
Licensors to inspect the premises where the Products are located from time to
time during reasonable hours after reasonable notice in order to confirm
Lessee's compliance with its obligations under this Agreement and the Licenses,
and shall correct any deficiencies promptly upon notice from Lessor and/or one
or more of the Licensors.
7. RETURN. At the expiration of the Lease Term for any Product or
earlier termination of each Lease, Lessee agrees (i) unless otherwise provided
by the applicable License(s), to terminate its use of all Licensed Materials
provided to Lessee under such Schedule and to return the same to Lessor at a
place within the continental United States reasonably designated by Lessor,
together with an
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<PAGE> 3
assignment of all of Lessee's rights under the applicable
License(s), and (ii) to terminate its use of, and return to Lessor at a place
within the continental United States reasonably designated by Lessor, all other
Products leased to Lessee under such Schedule.
8. RISK OF LOSS; MAINTENANCE; UNINSURED LOSS AND DAMAGE. Lessee assumes
all risk of loss or damage to Products from the time such Products are delivered
to a carrier for shipment to Lessee until their return to Lessor and agrees to
maintain the Products in good operating condition, in compliance with all
requirements necessary to enforce all Product warranty rights, and to return the
Products to Lessor as provided in Section 7 in good operating condition
(ordinary wear and tear excepted). During the Lease Term, Lessee shall ensure
that each Product is covered by a maintenance agreement (if available) from the
manufacturer of such Product or another Person that is reasonably acceptable to
Lessor. If a Product shall become lost, stolen, destroyed or damaged beyond
repair or in the event of any condemnation, confiscation, seizure or
expropriation of such Product, Lessee shall promptly notify Lessor of the same
and shall immediately pay to Lessor the value of such Product calculated by
discounting to present value the aggregate of all unpaid amounts due or to
become due to Lessor with respect to such Product under this Agreement or any
Schedule as Rent or otherwise (including the purchase option amount determined
in accordance with the applicable Schedule or the estimated in-place fair market
value at the end of the Lease Term as determined by Lessor if no purchase option
is provided in such Schedule) using the discount rate of the Federal Reserve
Bank of Chicago on the date of such occurrence plus 1%, at which time Lessor
shall transfer to Lessee all of Lessor's right, title and interest, if any, in
such Product (but not any Licensed Materials), AS IS, WHERE IS, WITHOUT RECOURSE
OR WARRANTY, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING ANY WARRANTIES OF DESIGN,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTIES AGAINST
INFRINGEMENT, OR ANY WARRANTIES ARISING FROM COURSE OF DEALING, USAGE OR TRADE
PRACTICE, ALL OF WHICH SHALL BE SPECIFICALLY DISCLAIMED BY LESSOR.
9. ALTERATIONS. Lessee shall, at its expense, make such alterations to
Products during the Lease Term as may be required by Applicable Laws. Lessee may
make other alterations, additions or improvements to Products provided such
other alterations, additions or improvements do not violate any License or
materially decrease the value of Products or impair their utility. Lessee may
remove any such other alteration, addition or improvement at the expiration of
the relevant Lease Term, provided Lessee shall repair any damage to Products or
the premises where located resulting from or occasioned by such removal and
provided any such removal shall not violate any License or render Products
incapable of use or operation for the purposes for which such Products were
intended. Any alteration, addition or improvement shall be at Lessee's expense
and, unless removed by Lessee as provided above, shall belong to and become the
property of Lessor, subject to the terms of the applicable Lease during such
Lease Term.
10. INSURANCE. From the date risk of loss passes to Lessee hereunder
with respect to any Products and thereafter until all of Lessee's obligations
under the related Lease have been performed in full, Lessee shall at its sole
expense:
(a) Insure Products against "all risks" of physical loss or damage,
including without limitation loss by fire (including extended coverage), theft,
collision and such other risks of loss as are customarily covered by insurance
on the type of products leased hereunder by prudent operators of businesses
similar to that in which Lessee is engaged, in such amounts, in such form and
with such insurers as shall be satisfactory to Lessor from time to time, but in
no event shall such insurance be less than the full replacement value of the
Products; and
(b) Maintain public liability and property damage insurance in respect
of the use, operation and possession of the Products and the ownership thereof
by Lessor with insurers satisfactory to Lessor in such form and with such limits
of liability as Lessor may from time to time reasonably require.
Each insurance policy shall name Lessor (and if Lessor requests at any
time, any successor, assignee or secured party of Lessor) as loss payee for
physical damage insurance and as additional insured for liability and property
damage insurance, and shall contain a clause requiring the insurer to give
Lessor at least 30 days prior written notice of any alteration in the terms of
such policy or of the cancellation thereof. At Lessor's request, Lessee shall
furnish to Lessor a certificate or certificates of insurance or other evidence
satisfactory to Lessor that such coverage is in effect, provided, however, that
Lessor shall be under no duty to either ascertain the existence of or to examine
such insurance policy or to advise Lessee in the event such insurance coverage
shall not comply with the requirements of this Agreement or any Schedule. Lessee
shall promptly notify Lessor of the occurrence of an event of loss and, at its
expense, make all proofs of loss and take all other steps necessary to recover
insurance benefits unless advised in writing by Lessor that Lessor desires so to
do at Lessee's expense. Lessee irrevocably constitutes and appoints Lessor as
its attorney-in-fact (i) to make, settle and adjust claims under each policy,
(ii) to make claims for monies which may become due under each policy including
returned or unearned premiums and (iii) to endorse Lessee's name on any check,
draft or other instrument received in payment of claims or returned or unearned
premiums under each such policy and to apply the funds to the payment of amounts
due by Lessee pursuant to this Agreement or the applicable Lease; provided,
Lessor shall have no obligation to do any of the foregoing. Proceeds of
insurance shall at the option of Lessor be disbursed by Lessor against
satisfactory invoices for repair or replacement of Products, provided Lessee is
not then in Default, or be retained by Lessor for application against Lessee's
obligations hereunder, and if the proceeds received are less than the value of
the Products subject to the loss, as determined pursuant to Section 8, Lessee
shall pay to Lessor the amount of such deficiency.
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11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE. Lessee
represents, warrants and covenants to Lessor that at all times during the term
of this Agreement and any Schedule:
(a) Lessee is an entity duly organized and validly existing in good
standing under the laws of the jurisdiction of its organization, has full power
and authority to execute, deliver, and perform under this Agreement and each
Schedule and all certificates and other documents required by, referred to in,
or executed in connection with, this Agreement or any Schedule (collectively,
the "Documents") to which it is a party, and is duly qualified and in good
standing in all jurisdictions with respect to which its ownership or leasing of
property or its conduct of business requires it to be so qualified;
(b) The execution, delivery and performance by Lessee of this Agreement,
each Schedule and the other Documents to which it is a party have been duly
authorized by all necessary corporate or other action on the part of Lessee, and
this Agreement, each Schedule and the other Documents to which it is a party
have been duly executed and delivered on Lessee's behalf by Persons duly
authorized in that regard, and constitute the legal, valid and binding
agreements of Lessee, enforceable against Lessee in accordance with their
respective terms (subject to applicable bankruptcy and other similar laws);
(c) The execution, delivery and performance by Lessee of this Agreement,
each Schedule and the other Documents to which it is a party do not and shall
not result in a breach of, constitute a default under, contravene any provision
of, or result in the creation of any lien on or in any property or assets of
Lessee pursuant to, the Certificate or Articles of Incorporation or Bylaws of
Lessee or any other documents pursuant to which Lessee is organized or operates,
or any agreement, indenture or other instrument to which Lessee is a party or by
which Lessee or any of its property or assets may be bound or affected;
(d) There is no action, suit or proceeding pending or, to the knowledge
of Lessee, threatened in any court or tribunal or before any competent authority
against Lessee or any of its property or assets which challenges this Agreement,
any Schedule, any of the other Documents or any of the transactions contemplated
hereby or thereby or which, in the reasonable and bona fide opinion of Lessee,
may have a material adverse effect on the financial condition or business of
Lessee; and
(e) The financial statements and other information furnished and to be
furnished to Lessor by Lessee are and shall be true and correct.
If any Person guarantees payment or performance by Lessee of any
liabilities or obligations of Lessee under this Agreement or any Schedule (a
"Guarantor"), the preceding representations, warranties and covenants shall be
deemed to be made by Lessee on behalf of such Guarantor as well as Lessee as if
such Guarantor was named in addition to Lessee therein.
12. CONFIDENTIALITY.
(a) All information or materials disclosed by Lessor to Lessee, or
obtained by Lessee from Lessor, under or in connection with this Agreement, any
Schedule, or the transactions contemplated hereby or thereby, including
information concerning Lessor's (or any vendor's or Licensor's) business
activities, technical information, trade secrets, marketing plans, objectives,
or financial results, and the terms and conditions of this Agreement and any
Lease, regardless of whether the same is disclosed in writing, orally, visually
or otherwise, are confidential and proprietary (collectively, the "Confidential
Information"). Lessee shall receive and retain Confidential Information in
confidence and shall use the same degree of care, but no less than a reasonable
degree of care, as Lessee uses to protect its own similar information to protect
the Confidential Information and to prevent (i) any use of Confidential
Information other than in performance of its obligations under this Agreement or
any Schedule; (ii) any dissemination of Confidential Information to any Person;
or (iii) any publication of any Confidential Information (provided that
Confidential Information may be disclosed to employees or professional advisors
of Lessee to the extent such employees or advisors need to know such information
in order to carry out the terms of this Agreement or otherwise utilize the
Products in accordance with a Lease and agree to be bound by such obligations of
nondisclosure and nonuse).
(b) The foregoing restrictions of confidentiality and nonuse shall not
apply to any Confidential Information that (i) was known to Lessee at the time
of the disclosure and was not obtained or derived, directly or indirectly, from
Lessor; (ii) is or becomes available to the general public or generally known to
Lessor's industry through no fault of Lessee; (iii) is obtained by Lessee from a
third party which, to Lessee's knowledge, is lawfully in possession of the
Confidential Information provided that, to Lessee's knowledge, such Confidential
Information is not subject, in such third party's hands, to any confidential or
nonuse obligations owed to Lessor or any third party; (iv) is disclosed by
Lessor to a third party without a duty of confidentiality on the third party;
(v) is independently developed by Lessee without a breach of this Agreement or
any Lease; or (vi) is disclosed by Lessee with the Lessor's prior written
approval. The foregoing restrictions on confidentiality shall not prohibit
Lessee from disclosing any Confidential Information that Lessee is required to
disclose by government body, a court of law or Applicable Laws provided Lessee
gives Lessor reasonable advance notice of the same so that Lessor may contest
the disclosure or seek a protective order, and provided that Lessee complies
with any such protective order.
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<PAGE> 5
13. WARRANTY ASSIGNMENT; EXCLUSION OF WARRANTIES; LIMITATIONS ON LIABILITY.
(a) Lessor assigns to Lessee (to the extent assignable) the benefit of
any limited warranty or right of return provided by any Licensor, manufacturer
or vendor of the Products until such time as the Lease of such Product to Lessee
has terminated or expired.
(b) LESSEE ACKNOWLEDGES THAT LESSOR DID NOT SELECT, MANUFACTURE OR
SUPPLY ANY PRODUCT AND THAT LESSEE HAS MADE THE SELECTION OF PRODUCTS BASED UPON
ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS ANY RELIANCE ON STATEMENTS MADE BY
LESSOR OR ITS AGENTS. LESSEE FURTHER ACKNOWLEDGES THAT LESSOR LEASES PRODUCTS
AS-IS AND MAKES NO WARRANTY, EXPRESS, IMPLIED, OR OTHERWISE, INCLUDING ANY
WARRANTIES OF DESIGN, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, ANY
WARRANTIES OF TITLE OR AGAINST INFRINGEMENT, OR ANY WARRANTIES ARISING FROM A
COURSE OF DEALING, USAGE OR TRADE PRACTICE, ALL OF WHICH ARE SPECIFICALLY
DISCLAIMED BY LESSOR. LESSEE HEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED
ON STRICT OR ABSOLUTE LIABILITY IN TORT) IT MIGHT HAVE AGAINST LESSOR FOR ANY
LOSS, DAMAGE OR EXPENSE CAUSED BY OR WITH RESPECT TO ANY PRODUCTS. LESSEE HEREBY
RELEASES AND FOREVER DISCHARGES LESSOR FROM ANY AND ALL ACTIONS, CLAIMS,
DEMANDS, COSTS, EXPENSES, SET-OFFS, ABATEMENTS AND COMPENSATION WHATSOEVER, IN
CONNECTION WITH THE FOREGOING, REGARDLESS OF THE FORM OF ACTION AND REGARDLESS
OF WHETHER THE SAME ARISES FROM ANY NEGLIGENT ACT OR OMISSION OF LESSOR. Upon
the parties' execution of a Schedule, Lessor shall be deemed to have fully
performed and discharged all its obligations hereunder with respect to the
related Products by providing Lessee with a possessory interest therein.
(c) Lessee agrees and acknowledges that it is the intent of both parties
that each Lease qualify as statutory finance lease under Article 2A of the
Uniform Commercial Code. Lessee acknowledges either (i) that Lessee has reviewed
and approved any written supply contract covering the Products purchased from
the supplier thereof for lease to Lessee or (ii) that Lessor has informed or
advised Lessee, in writing, either previously or by this Agreement, that Lessee
may have rights under the supply contract evidencing Lessor's purchase of the
Products from the supplier chosen by Lessee and that Lessee should contact the
supplier of the Products for a description of any such rights.
(d) LESSOR'S TOTAL LIABILITY FOR DAMAGES FOR ANY CAUSE WHATSOEVER
ARISING UNDER OR RELATED TO THIS AGREEMENT, ANY SCHEDULE, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT OR IN TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, SHALL BE LIMITED TO THE
TOTAL RENT PAID BY LESSEE TO LESSOR WITH RESPECT TO THE SCHEDULE THAT IS THE
SUBJECT OF THE DISPUTE DURING THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE
DATE OF THE CLAIM. IN NO EVENT SHALL LESSOR BE LIABLE FOR (I) ANY SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THIS
AGREEMENT, ANY SCHEDULE OR THE SALE, LEASE OR USE OF ANY PRODUCTS INCLUDING
INTERRUPTION OF SERVICE, LOSS OF DATA, LOSS OF REVENUE OR PROFIT, LOSS OF TIME
OR BUSINESS, OR ANY SIMILAR LOSS, EVEN IF LESSOR IS ADVISED IN ADVANCE OF THE
POSSIBILITY OR CERTAINTY OF SUCH DAMAGES AND EVEN IF LESSEE ASSERTS OR
ESTABLISHES A FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED IN
THIS AGREEMENT, OR (II) ANY CLAIM BY ANY THIRD PARTY EXCEPT AS MAY BE EXPRESSLY
PROVIDED HEREIN.
14. EVENTS OF DEFAULT. It shall be an event of default hereunder and
under any Lease ("Event of Default") if:
(a) Lessee fails to pay any Rent or other amounts payable under this
Agreement or any Schedule when due and such failure shall have continued for 10
days;
(b) Any representation or warranty made by Lessee or any Guarantor to
Lessor under, or in connection with entering into, this Agreement, any Schedule
or any other Document is at any time untrue or incorrect;
(c) Lessee fails to comply with the provisions of Section 10 or Section
12 of this Agreement;
(d) Lessee fails to comply with any other obligation or provision of
this Agreement or any Schedule and such failure shall have continued for 10 days
after notice from Lessor;
(e) Any breach or default occurs under any agreement executed by any
Guarantor for the benefit of Lessor (and, if capable of cure, is not cured
within any applicable cure period set forth therein);
(f) Lessee or any Guarantor becomes insolvent or bankrupt, admits in
writing its inability to pay its debts as they mature, or makes an assignment
for the benefit of creditors; or Lessee or any Guarantor applies for or consents
to the appointment of any receiver, trustee or similar officer for it or for all
or any substantial part of its property (or such receiver, trustee or similar
officer is appointed without its consent); or Lessee or any Guarantor institutes
any bankruptcy, insolvency, reorganization, moratorium, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding relating to
it under the laws of any
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<PAGE> 6
jurisdiction, or any such proceeding is instituted against Lessee or any
Guarantor and is not dismissed within 30 days; or any judgment, writ, warrant or
attachment or execution of similar process is issued or levied against a
substantial part of the property of Lessee or any Guarantor and remains
unsatisfied for 30 days;
(g) Lessee or any Guarantor dissolves, liquidates or otherwise
terminates its existence as an entity, or consolidates with or merges with or
into any entity, or sells, leases or otherwise disposes of all or substantially
all of its assets, or incurs a substantial amount of indebtedness other than in
the ordinary course of its business, or engages in a leveraged buy-out or any
other form of corporate reorganization, in each case whether in a single
transaction or in a series of related transactions, UNLESS in each case and
before the event in question, either (i) Lessor, based on written confirmation
from such party, is reasonably satisfied that such party's financial condition
and credit standing shall not be impaired by the event, or (ii) such party's
obligations under this Agreement, each Schedule and any Guaranty are assumed or
guaranteed in a manner reasonably satisfactory to Lessor by an entity having in
Lessor's good faith opinion at least as good financial condition and credit
standing as those of such party immediately before the event;
(h) Lessee does or permits to occur any act which may in the reasonable
opinion of Lessor materially lessen the value of any Products or Lessor's
interest therein or increase the risk thereto; or
(i) Lessee or any Guarantor is in default under any other lease,
contract, agreement or obligation now existing or hereinafter entered into with
Lessor or any Affiliate of Lessor whether such party is bound alone or with
others.
15. REMEDIES; TERMINATION.
(a) Upon an Event of Default Lessor may:
(i) require Lessee to return any or all Products as provided
in Section 7;
(ii) without further notice, take possession of any or all
Products ("Repossession") and for such purpose Lessee hereby (A) shall, if
requested by Lessor, assemble the Products and deliver them to a location
designated by Lessor and (B) grants Lessor the right to enter the premises where
such Products are located for the purpose of Repossession;
(iii) terminate this Agreement and/or any or all Schedules;
(iv) without terminating or being deemed to have terminated
this Agreement or any Schedule, sell, lease or otherwise dispose of any or all
Products (as agent and attorney for Lessee to the extent necessary) upon such
terms as Lessor deems advisable in its sole discretion ("Disposition"); or
(v) in addition to any other right or remedy Lessor may have
at law or in equity, demand as a genuine pre-estimate of liquidated damages for
loss of bargain and not as a penalty, the then present value of all the unpaid
and future Rent together with any other amounts owed with respect to the
Products, and (if any Products are not returned to or repossessed by Lessor) the
present value of the purchase option amount for such Products determined in
accordance with the applicable Schedule, or the estimated in-place fair market
value of such Products at the end of the Lease Term as determined by Lessor if
no purchase option is provided in such Schedule (calculated by discounting such
amounts using the discount rate of the Federal Reserve Bank of Chicago, on the
date of the Event of Default plus 1%), in which event Lessee shall immediately
pay all such amounts to Lessor.
(b) Upon termination of this Agreement or termination or expiration of
any Schedule, all right, title and interest of Lessee in or to the use of the
Products subject to the terminated Schedule(s) shall absolutely cease and Lessee
shall return any and all such Products as provided in Section 7. Termination of
this Agreement shall constitute termination of all Schedules hereto, but
termination or expiration of one or more Schedules shall not in and of itself
constitute termination or expiration of this Agreement.
(c) Lessee shall pay all costs arising or incurred by Lessor as a result
of any Default by Lessee or any Guarantor, including reasonable legal fees and
costs related to the Repossession, re-conditioning and Disposition of any or all
Products. Such costs shall be deducted from the proceeds of any Disposition. In
the event an amount in excess of the amount described in clause 15(a)(v) is
received by Lessor, after costs, from the exercise of its remedies under Section
15(a), Lessor shall promptly pay to Lessee any such excess.
(d) Lessee shall pay Lessor interest at a rate equal to the Overdue Rate
on all sums not paid by Lessee to Lessor when due and owing under the provisions
of this Agreement or any Schedule. Such interest shall be due and payable on
demand by Lessor, or, if no demand is made, monthly on the same days as provided
for the payment of Rent so long as payment of any monies due and payable
hereunder is in arrears.
(e) All rights of Lessor are cumulative and not alternative and may be
exercised by Lessor separately or together, in any order or combination. In
addition to the rights of Lessor specifically set forth in this Agreement or any
Schedule, Lessor
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shall be entitled to damages for breach of this Agreement or any Schedule, to
an order requiring performance of the obligations of this Agreement or any
Schedule, or to any other appropriate order or remedy available by contract, at
law or in equity.
16. OWNERSHIP; PERSONAL PROPERTY; LABELS. As between Lessor and Lessee,
title to the Products (other than any Licensed Materials) is and shall remain in
Lessor; title to the Licensed Materials remains with the Licensor(s). During the
relevant Lease Term, Products shall be and remain movable, personal and chattel
property and Lessee agrees to take all action necessary or reasonably requested
by Lessor to ensure that Products retain such status. Lessor shall not interfere
with Lessee's right to possession and quiet enjoyment of Products during the
relevant Lease Term, provided Lessee performs its obligations hereunder and
under each Schedule pursuant to the terms and conditions hereunder and
thereunder. Lessor may require plates, labels, or other markings to be affixed
to or placed prominently upon Products (other than any Licensed Materials)
indicating Lessor as the owner.
17. INDEMNIFICATION. LESSEE SHALL BE RESPONSIBLE FOR, AND SHALL INDEMNIFY,
DEFEND AND HOLD LESSOR, LESSOR'S AFFILIATES AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, REPRESENTATIVES AND AGENTS HARMLESS FROM AND AGAINST, ALL
CLAIMS, DEMANDS, DAMAGES, LOSSES, LIABILITIES, ACTIONS, COSTS OR EXPENSES,
INCLUDING ATTORNEYS' FEES (COLLECTIVELY, "CLAIMS"), ARISING FROM OR INCURRED IN
CONNECTION WITH THIS AGREEMENT, ANY SCHEDULE, OR THE MANUFACTURE, ACQUISITION,
POSSESSION, OWNERSHIP, USE, MAINTENANCE, CONDITION, RETURN OR OPERATION OF ANY
PRODUCTS (INCLUDING (I) ANY PERSONAL INJURY OR DEATH, (II) ANY CLAIMS RELATED TO
TAXES OR DUTIES, AND (III) ANY CLAIMS RELATED TO ANY SUBSEQUENT USE OR
DISPOSITION BY LESSOR, LESSOR'S AFFILIATES OR ANY OF THEIR RESPECTIVE SUCCESSORS
OR ASSIGNS OF ANY PRODUCTS THAT MAY CONTAIN ANY DATA OR OTHER MATERIALS OF
LESSEE OR ANY THIRD PARTY). LESSEE SHALL BE OBLIGATED TO INDEMNIFY LESSOR AND
ANY OTHER PERSON INDEMNIFIED HEREUNDER FOR ANY OF THE FOREGOING REGARDLESS OF
THE FORM OF ACTION AND REGARDLESS OF WHETHER THE CLAIM IN QUESTION ARISES IN
PART FROM ANY NEGLIGENT ACT OR OMISSION OF ANY INDEMNIFIED PERSON, FROM STRICT
LIABILITY OF AN INDEMNIFIED PERSON, OR OTHERWISE, PROVIDED THAT THIS INDEMNITY
SHALL NOT EXTEND TO ANY LOSS CAUSED SOLELY BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF LESSOR. LESSEE SHALL ASSUME THE DEFENSE OF SUCH CLAIM AT ITS
EXPENSE, WITH COUNSEL OF ITS OWN CHOICE (SUCH COUNSEL BEING SUBJECT TO APPROVAL
BY LESSOR, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED) AND PAY
ANY AMOUNT IN SETTLEMENT AND ALL COSTS AND DAMAGES AWARDED AGAINST OR INCURRED
BY LESSOR OR ANY OTHER PERSON INDEMNIFIED HEREUNDER; PROVIDED, HOWEVER, THAT ANY
PERSON INDEMNIFIED HEREUNDER SHALL HAVE THE RIGHT TO PARTICIPATE IN THE DEFENSE
OF SUCH CLAIM WITH COUNSEL OF ITS CHOICE AND AT ITS EXPENSE AND TO APPROVE ANY
SUCH SETTLEMENT (SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD OR DELAYED).
LESSEE SHALL KEEP LESSOR INFORMED AT ALL TIMES AS TO THE STATUS OF LESSEE'S
EFFORTS AND CONSULT WITH LESSOR CONCERNING ITS EFFORTS.
18. EXPORT ISSUES.
(a) Lessee shall not allow any Products to be transported or used
outside of the United States of America without the prior written consent of
Lessor. Lessee agrees that it shall not directly or indirectly export, reexport,
transship, transfer, divert or otherwise dispose of any Products or technical
information, even though otherwise permitted by this Agreement or by subsequent
authorization from Lessor, except as shall be permitted by Applicable Laws. When
requested by Lessor, Lessee shall give additional written assurances against any
such export, reexport, transshipment, diversion or disposition.
(b) Lessor's obligation, if any, to lease and deliver Products and to
provide or disclose any technical information shall be subject in all respects
to the requirements of Applicable Laws, including such United States laws,
regulations and orders as shall from time to time govern the lease and delivery
of goods and the disclosure of technical information abroad by Persons subject
to the jurisdiction of the United States.
19. LIENS, ENCUMBRANCES. Lessee shall, at Lessee's expense, keep Products
free and clear of liens, security interests, attachments, seizures and
encumbrances of any kind (except those arising hereunder or solely through the
acts of Lessor) and shall immediately notify Lessor if any Person attempts to
claim ownership of, a lien against, or any other interest in, or bring any legal
process with respect to, any of the Products.
20. REMEDYING DEFAULTS. If Lessee shall fail to perform or comply with any
of Lessee's obligations hereunder or under any Schedule, Lessor in its
discretion may do all such reasonable acts and make all such reasonable
disbursements as may be necessary to itself perform, or cause performance of or
compliance with, such obligations, without the same constituting a waiver of
such obligations or creating any obligation or liability on the part of Lessor
either to remedy any other failure to perform or comply or to take any other
action whatsoever, and any disbursements so made shall be payable by Lessee on
demand, together with interest at the Overdue Rate from the date of disbursement
by Lessor to the date of payment by Lessee.
21. NOTICES. Except as may be specifically provided herein, all notices
with respect hereto shall be given in writing and shall be delivered (including
delivery by courier, facsimile transmittal, telex or similar means) or sent by
mail, postage prepaid, return receipt requested, addressed to the party for whom
intended at the address specified on the first page of this Agreement or at such
other
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address as the intended recipient previously shall have designated by at least
10 days written notice to the other party. Unless otherwise provided in this
Agreement, notice shall be effective on the date that it is received or (if
mailed as described above) 4 Business Days after the date of mailing.
22. ASSIGNMENT.
(a) Neither this Agreement, any Schedule, or any right or obligation
hereunder or thereunder is assignable in whole or in part, whether by operation
of law or otherwise, by Lessee without the prior written consent of Lessor, nor
may Lessee assign or sublet Products without the prior written consent of
Lessor. Any attempted assignment or subletting without Lessor's prior written
consent shall be void and of no force and effect.
(b) Lessor may at any time without notice to Lessee, but subject to the
rights of Lessee hereunder, transfer, assign, or grant a security interest in
any Product, this Agreement, any Schedule, or any rights hereunder or thereunder
(including any Rent or other monies and benefits due or to become due
hereunder), in whole or in part. In such event, the assignee will have the
rights and benefits, but not any of the obligations, of Lessor, and Lessee
agrees that the rights of any such assignee will not be subject to any claims,
defenses or setoffs that Lessee may have against Lessor.
(c) This Agreement shall be binding upon and inure to the benefit of
Lessor and its successors and assigns and shall be binding upon Lessee and the
heirs, executors, administrators, successors and permitted assigns and permitted
sublessees of Lessee.
23. SURVIVAL. All of the representations, warranties, covenants and
agreements of Lessee contained in this Agreement or any Schedule shall survive
the termination of this Agreement and the expiration or earlier termination of
any or all Schedule(s) until all obligations of Lessee under this Agreement and
all Schedules have been performed in full; provided, however, that the
provisions of Sections 11, 12, 13(b), 13(d), and 17 shall continue in full force
and effect even after all obligations of Lessee have been performed in full.
24. GOVERNING LAW; JURISDICTION AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT AND EACH SCHEDULE SHALL BE GOVERNED IN ALL RESPECTS BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, U.S.A. (EXCEPT AS
OTHERWISE PROVIDED IN SECTION 27(k) REGARDING THE DETERMINATION OF THE MAXIMUM
AMOUNT OF TIME PRICE BALANCE DIFFERENTIAL AND INTEREST), EXCLUSIVE OF ANY
PROVISIONS OF THE UNITED NATIONS CONVENTION ON THE INTERNATIONAL SALE OF GOODS
AND WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. REFERENCES TO THE UNIFORM
COMMERCIAL CODE IN THIS AGREEMENT ARE TO THE UNIFORM COMMERCIAL CODE ADOPTED IN
ILLINOIS AS 810 ILCS SECS. 5/1-101 ET SEQ. LESSEE IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN COOK COUNTY, ILLINOIS, AND
WAIVES TO THE FULLEST EXTENT ALLOWED BY LAW ANY OBJECTION TO VENUE IN SUCH
COURT, AND FURTHER WAIVES ANY RIGHT TO A TRIAL BY JURY.
25. DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following respective meanings for
purposes of this Agreement:
(a) Affiliate. Any Person that directly or indirectly controls, is
controlled by, or is under common control with, Lessor or Lessee, as the context
may require.
(b) Applicable Laws. All applicable laws, rules, regulations and orders
of any government authority with jurisdiction over a party or over its
performance in connection with this Agreement or any Schedule (including
Lessee's lease or use of Products hereunder or thereunder).
(c) Business Day. Any day except Saturday, Sunday or a day on which
banking institutions are required or authorized by law or other governmental
action to be closed in Illinois.
(d) Documentation. All user guides, driver installation guides,
listings, manuals, illustrations, and other written materials or publications
that accompany or constitute all or a portion of any Software or other Products
or that are provided by or on behalf of Lessor or any vendor or Licensor to
Lessee relating to the installation, operation, sale, support or other use of
any Software or other Products, and all modifications, additions, supplements,
translations, derivative works and full or partial copies of any thereof,
regardless of who prepared the same.
(e) Overdue Rate. A rate equal to the lesser of 1-1/2% per month or the
highest rate permitted by applicable law.
(f) Person. Any individual, partnership, joint venture, corporation,
limited liability company, trust, unincorporated organization, joint stock
company, government or department or agency thereof, or other form of
association or entity.
Page 8 of 10
<PAGE> 9
(g) Products. All of the computer hardware, software, parts, equipment,
accessories, and other products (including any Software or Documentation) that
Lessor, in its sole discretion, may from time to time lease or offer for lease
to Lessee under this Agreement, whether manufactured by Lessor or any other
Person.
(h) Software. All software or computer programs that accompany or
constitute all or a portion of any Products or are provided by or on behalf of
Lessor or any vendor or Licensor to Lessee with respect to any Products, and all
modifications, additions, supplements, translations, derivative works, and full
or partial copies of any thereof, regardless of who prepared the same, and code
with respect thereto, whether embodied in or contained on magnetic tape, disk,
semiconductor device, or any other device or medium.
26. CONSTRUCTION. "This Lease Agreement," "Lease Agreement," "this
Agreement," "hereto," "herein," "hereof," "hereby," "hereunder" and similar
expressions refer to this Master Lease Agreement. The headings used in this
Agreement are for convenience only and shall have no legal effect. Whenever the
context requires, the gender of all words used herein shall include the
masculine, the feminine and neuter, and the number of all words shall include
the singular and plural. The term "including" as used in this Agreement means
"including without limitation." Whenever reference is made in this Agreement to
"days," the reference means calendar days, not Business Days, unless otherwise
specified. This Agreement shall be interpreted fairly in accordance with its
terms and without any strict construction in favor of or against either party.
27. MISCELLANEOUS.
(a) If more than one Person executes this Agreement or any Schedule as
Lessee, their respective liabilities hereunder or thereunder shall be both joint
and several, but Lessor shall be fully discharged in respect of any obligation
hereunder upon performance of that obligation to any one of them.
(b) Failure of Lessor at any time to require Lessee's performance of any
obligation shall not affect the right to require performance of that obligation.
No term, condition or provision of this Agreement or any Schedule shall be
waived or deemed to have been waived by Lessor unless it is in writing and
signed by a duly authorized representative of Lessor. A valid waiver is limited
to the specific situation for which it was given.
(c) Lessee shall furnish to Lessor such financial statements of Lessee
and any Guarantor (prepared in accordance with generally accepted accounting
principles consistently applied) and other information as Lessor may from time
to time reasonably request. Lessee shall notify Lessor within 10 days after any
material adverse change in Lessee's or any Guarantor's financial condition.
(d) Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement, or the application thereof to any Person
or under any circumstances, shall be invalid or unenforceable to any extent
under applicable law, and the extent of such invalidity or unenforceability does
not destroy the basis for the bargain between the parties as expressed herein,
then (i) such provision shall be deemed severed from this Agreement with respect
to such party or such circumstance, without invalidating the remainder of this
Agreement or the application of such provision to other Persons or
circumstances, and (ii) a new provision shall be deemed substituted in lieu of
the provision so severed which new provision shall, to the extent possible,
accomplish the intent of the parties hereto as evidenced by the provision so
severed.
(e) All Lessee's obligations hereunder shall be performed or observed at
Lessee's expense.
(f) To the fullest extent permitted by applicable law, Lessee waives any
and all rights and remedies conferred upon Lessee under Uniform Commercial Code
Sections 2A-303 and 2A-508 through 2A-522.
(g) Lessee shall, upon Lessor's demand, promptly execute, acknowledge,
deliver, file, register and record any and all further documents and take any
and all other action reasonably requested by Lessor from time to time, for the
purpose of fully effectuating the intent and purposes of this Agreement or any
Schedule, and to protect the interests of Lessor, its successors and assigns.
The parties intend for each lease to constitute a true lease of Products under
the United Commercial Code and all Applicable Laws; if, however, any Lease is
determined to be other than a true lease, Lessee grants to Lessor a security
interest in the Products and all proceeds thereof. Lessee hereby appoints Lessor
as Lessee's agent and attorney-in-fact to execute, deliver and file in the name
of Lessee (and Lessee agrees to execute if requested) any financing statements
or related filings as Lessor may reasonably deem necessary or appropriate. In
addition, Lessor may file a copy of this Agreement in lieu of a financing
statement.
(h) Lessee acknowledges receipt of a copy of this Agreement.
(i) This Agreement and each Schedule may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original (except as otherwise provided in the following sentence), but all such
counterparts
Page 9 of 10
<PAGE> 10
taken together shall constitute one and the same instrument. To the extent any
Schedule constitutes chattel paper, no security interest in such Schedule may be
perfected except by the possession of the manually executed counterpart of such
Schedule identified in such Schedule as the original counterpart. If any
Schedule is executed by Lessee and thereafter sent to Lessor by facsimile
transmission, then until such time as Lessor has received such Schedule with
Lessee's manual signature thereon, such facsimile transmission shall constitute,
upon acceptance and execution by Lessor, the original Schedule and chattel paper
and shall be admissible for all purposes as the original Schedule. In such
event, Lessee agrees to promptly forward to Lessor the Schedule with Lessee's
manual signature thereon and upon receipt by Lessor such Schedule with Lessee's
manual signature thereon shall constitute the chattel paper in lieu of such
facsimile transmission.
(j) This Agreement and each Schedule are non-cancellable by Lessee.
(k) Lessor and Lessee intend for each Lease to constitute a true lease
of Products under the Uniform Commercial Code and all applicable law. If,
however, any Lease is determined to be a lease intended as security, in no event
shall Lessee, by acceleration or prepayment of the unpaid time price balance
under the related Schedule or otherwise, be obligated to pay any time price
balance differential in excess of the maximum amount permitted by applicable law
(and for purposes of this Section the applicable law shall be the law of the
state specified in Section 24 or the law of the state where the Products are
located, whichever law permits the greater amount). Any acceleration or
prepayment of the unpaid time price balance shall be subject to all applicable
law, including rebates of unearned charges. If in any event whatsoever Lessor
shall receive anything of value under a Lease deemed interest under applicable
laws which would exceed the maximum amount of interest, the excess amount shall
be applied to the reduction of the unpaid time price balance or shall be
refunded to Lessee. All sums paid or agreed to be paid by Lessee to Lessor for
the use, forbearance or detention of money shall, to the fullest extent
permitted by applicable law, be amortized, prorated and allocated and spread
throughout the full term of the applicable Schedule so that the amount of
consideration constituting interest is uniform throughout the term of such
Schedule and does not exceed the maximum permitted by applicable law. If any of
the provisions of this paragraph conflict with any provision(s) of any other
paragraph of this Agreement, any Schedule, or any provision(s) in any other
agreement or course of dealing between Lessor and Lessee, the provisions of this
paragraph shall control and govern the interpretation of this Agreement, such
Schedule and any such other agreement or course of dealing.
(l) This Agreement and the Schedules hereto constitute the entire
agreement between Lessor and Lessee and set forth the entire understanding and
supersede and merge all prior written or oral communications, understandings, or
agreements between the parties relating to the subject matter contained herein.
The parties agree that use of preprinted forms (including orders, invoices and
acknowledgments), other than the Schedules, is for convenience only and all
terms and conditions stated therein, except for any information permitted by
this Agreement, are void and of no effect. In the event of any conflict between
this Agreement and the terms and conditions of any such document, this Agreement
shall govern. This Agreement may be amended only in writing signed by Lessor (by
a duly authorized representative) and Lessee. By initialing this provision,
Lessee agrees to be bound by the terms of this Agreement and, to the extent
applicable, that the provision concerning a separately signed document pursuant
to Uniform Commercial Code Section 2A-208 has been compiled with.
- ------------------
Lessee's Initials
EXECUTED by the undersigned on the dates set forth below, to be effective as of
the Effective Date.
DELL FINANCIAL SERVICES L.P. SAGENT TECHNOLOGY INC.
"LESSOR" "LESSEE"
BY: BY: /s/ Kathleen Ovalle
---------------------------------- ------------------------------
NAME: NAME: Kathleen Ovalle
-------------------------------- ----------------------------
TITLE: TITLE: Corporate Controller
------------------------------- ---------------------------
DATE: DATE: September 26, 1998
-------------------------------- ----------------------------
Page 10 of 10
<PAGE> 1
EXHIBIT 10.8
- --------------------------------------------------------------------------------
SAGENT TECHNOLOGY, INC.
LOAN AND SECURITY AGREEMENT
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. DEFINITIONS AND CONSTRUCTION.....................................................1
1.1 Definitions...............................................................1
1.2 Accounting and Other Terms................................................8
2. LOAN AND TERMS OF PAYMENT........................................................8
2.1 Credit Extensions.........................................................8
2.2 Overadvances.............................................................10
2.3 Interest Rates, Payments, and Calculations...............................10
2.4 Crediting Payments.......................................................10
2.5 Fees.....................................................................11
2.6 Additional Costs.........................................................11
2.7 Term.....................................................................12
3. CONDITIONS OF LOANS.............................................................12
3.1 Conditions Precedent to Initial Credit Extension.........................12
3.2 Conditions Precedent to all Credit Extensions............................12
4. CREATION OF SECURITY INTEREST...................................................13
4.1 Grant of Security Interest...............................................13
4.2 Delivery of Additional Documentation Required............................13
4.3 Right to Inspect.........................................................13
5. REPRESENTATIONS AND WARRANTIES..................................................13
5.1 Due Organization and Qualification.......................................13
5.2 Due Authorization; No Conflict...........................................13
5.3 No Prior Encumbrances....................................................13
5.4 Bona Fide Eligible Accounts..............................................14
5.5 Merchantable Inventory...................................................14
5.6 Intellectual Property....................................................14
5.7 Name; Location of Chief Executive Office.................................14
5.8 Litigation...............................................................14
5.9 No Material Adverse Change in Financial Statements.......................14
5.10 Solvency.................................................................14
5.11 Regulatory Compliance....................................................15
5.12 Environmental Condition..................................................15
5.13 Taxes....................................................................15
5.14 Subsidiaries.............................................................15
5.15 Government Consents......................................................15
5.16 Full Disclosure..........................................................15
6. AFFIRMATIVE COVENANTS...........................................................16
6.1 Good Standing............................................................16
6.2 Government Compliance....................................................16
6.3 Financial Statements, Reports, Certificates..............................16
6.4 Inventory; Returns.......................................................17
6.5 Taxes....................................................................17
6.6 Insurance................................................................17
6.7 Principal Depository.....................................................17
6.8 Quick Ratio, Cash Coverage Ratio or Cash Flow Coverage Ratio.............17
6.9 Debt-Net Worth Ratio.....................................................18
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
PAGE
<S> <C>
6.10 Tangible Net Worth.......................................................18
6.11 Profitability............................................................18
6.12 Further Assurances.......................................................18
7. NEGATIVE COVENANTS..............................................................18
7.1 Dispositions.............................................................18
7.2 Changes in Business, Ownership, Management or Business Locations.........19
7.3 Mergers or Acquisitions..................................................19
7.4 Indebtedness.............................................................19
7.5 Encumbrances.............................................................19
7.6 Distributions............................................................19
7.7 Investments..............................................................19
7.8 Transactions with Affiliates.............................................19
7.9 Intellectual Property Agreements.........................................19
7.10 Subordinated Debt........................................................19
7.11 Inventory................................................................20
7.12 Compliance...............................................................20
8. EVENTS OF DEFAULT...............................................................20
8.1 Payment Default..........................................................20
8.2 Covenant Default.........................................................20
8.3 Material Adverse Change..................................................21
8.4 Attachment...............................................................21
8.5 Insolvency...............................................................21
8.6 Other Agreements.........................................................21
8.7 Subordinated Debt........................................................21
8.8 Judgments................................................................21
8.9 Misrepresentations.......................................................21
9. BANK'S RIGHT'S AND REMEDIES.....................................................22
9.1 Rights and Remedies......................................................22
9.2 Power of Attorney........................................................23
9.3 Accounts Collection......................................................23
9.4 Bank Expenses............................................................23
9.5 Bank's Liability for Collateral..........................................24
9.6 Remedies Cumulative......................................................24
9.7 Demand; Protest..........................................................24
10. NOTICES.........................................................................24
11. CHOICE OF LAW AND VENUE.........................................................25
12. GENERAL PROVISIONS..............................................................25
12.1 Successors and Assigns...................................................25
12.2 Indemnification..........................................................25
12.3 Time of Essence..........................................................25
12.4 Severability of Provisions...............................................26
12.5 Amendments in Writing, Integration.......................................26
12.6 Counterparts.............................................................26
12.7 Survival.................................................................26
</TABLE>
ii
<PAGE> 4
This LOAN AND SECURITY AGREEMENT is entered into as of July 16,1997, by
and between VENTURE BANKING GROUP, a division of Cupertino National Bank
("Bank") and SAGENT TECHNOLOGY, INC. ("Borrower").
RECITALS
Borrower wishes to obtain credit from time to time from Bank, and Bank
desires to extend credit to Borrower. This Agreement sets forth the terms on
which Bank will advance credit to Borrower, and Borrower will repay the amounts
owing to Bank.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 Definitions.
As used in this Agreement, the following terms shall
have the following definitions:
"Accounts" means all presently existing and hereafter
arising accounts, contract rights, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the rendering of
services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower and Borrower's Books relating
to any of the foregoing.
"Advance" or "Advances" means a loan advance under the
Committed Revolving Line.
"Affiliate" means, with respect to any Person, any
Person that owns or controls directly or indirectly such Person, any Person that
controls or is controlled by or is under common control with such Person, and
each of such Person's senior executive officers, directors, partners and, for
any Person that is a limited liability company, such Persons, managers and
members.
"Bank Expenses" means all: reasonable costs or expenses
(including reasonable attorneys' fees and expenses) incurred in connection with
the preparation, negotiation, administration, and enforcement of the Loan
Documents; and Bank's reasonable attorneys' fees and expenses incurred in
amending, enforcing or defending the Loan Documents (including fees and expenses
of appeal or review, or those incurred in any Insolvency Proceeding), whether or
not suit is brought.
"Borrower's Books" means all of Borrower's books and
records including without limitation: ledgers; records concerning Borrower's
assets or liabilities, the Collateral, business operations or financial
condition; and all computer programs, or tape files, and the equipment,
containing such information.
"Borrowing Base" means an amount equal to (i) eighty
percent (80%) of Eligible Accounts plus (ii) fifty percent (50%) of Eligible
Foreign Accounts, as determined by Bank with reference to the most recent
Borrowing Base Certificate delivered by Borrower.
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<PAGE> 5
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which banks in the State of California are authorized or
required to close.
"Closing Date" means the date of this Agreement.
"Code" means the California Uniform Commercial Code.
"Collateral" means the property described on Exhibit A
attached hereto.
"Committed Revolving Line" means a credit extension of
up to Two Million Dollars ($2,000,000).
"Committed Equipment Line means a credit extension of up
to One Million Dollars ($1,000,000).
"Contingent Obligation" means, as applied to any Person,
any direct or indirect liability, contingent or otherwise, of that Person with
respect to (i) any indebtedness, lease, dividend, letter of credit or other
obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable; (H) any obligations with respect to undrawn
letters of credit issued for the account of that Person; and (W) all obligations
arising under any interest rate, currency or commodity swap agreement, interest
rate cap agreement, interest rate collar agreement, or other agreement or
arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices; provided, however, that the
term "Contingent Obligation" shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determined
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith;
provided, however, that such amount shall not in any event exceed the maximum
amount of the obligations under the guarantee or other support arrangement.
"Copyrights" means any and all copyright rights,
copyright applications, copyright registrations and like protections in each
work or authorship and derivative work thereof, whether published or unpublished
and whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.
"Credit Extension" means each Advance, Equipment
Advance, Letter of Credit, Term Loan, Exchange Contract or any other extension
of credit by Bank for the benefit of Borrower hereunder.
"Current Assets" means, as of any applicable date, all
amounts that should, in accordance with GAAP, be included as current assets on
the consolidated balance sheet of Borrower and its Subsidiaries as at such date.
"Current Liabilities" means, as of any applicable date,
all amounts that should, in accordance with GAAP, be included as current
liabilities on the consolidated balance sheet of Borrower and its Subsidiaries,
as at such date, plus, to the extent not already included therein, all
outstanding Credit Extensions made under this Agreement, including all
Indebtedness that is payable upon demand or within one year from the date of
determination thereof unless such Indebtedness is renewable or extendable at the
option of Borrower or any Subsidiary to a date more than one year from the date
of determination, but excluding Subordinated Debt.
2
<PAGE> 6
"Eligible Accounts" means those Accounts that arise in
the ordinary course of Borrower's business that comply with all of Borrower's
representations and warranties to Bank set forth in Section 5.4; provided that
standards of eligibility may be fixed and revised from time to time by Bank in
Bank's reasonable judgment and upon notification thereof to Borrower in
accordance with the provisions hereof. Unless otherwise agreed to by Bank in
writing, Eligible Accounts shall not include -the following:
(a) Accounts that the account debtor has failed to pay
within ninety (90) days of invoice date;
(b) Accounts with respect to an account debtor, fifty
percent (50%) of whose Accounts the account debtor has failed to pay within
ninety (90) days of invoice date;
(c) Accounts with respect to an account debtor,
including Affiliates, whose total obligations to Borrower exceed forty percent
(40%) of all Accounts, except with respect to Fortune 500 Companies, as to which
the percentage shall be sixty-five percent (65%) to the extent such obligations
exceed the aforementioned percentage, except as approved in writing by Bank;
(d) Accounts with respect to which the account debtor
does not have its principal place of business in the United States;
(e) Accounts with respect to which the account debtor is
a federal, state or local governmental entity or any department, agency, or
instrumentality thereof;
(f) Accounts with respect to which Borrower is liable to
the account debtor, but only to the extent of any amounts owing to the account
debtor (sometimes referred to as "contra" accounts, e.g. accounts payable,
customer deposits, credit accounts, etc.);
(g) Accounts generated by demonstration or promotional
equipment, or with respect to which goods are placed on consignment, guaranteed
sale, sale or return, sale on approval, bill and hold, or other terms by reason
of which the payment by the account debtor may be conditional;
(h) Accounts with respect to which the account debtor is
an Affiliate, officer, employee, or agent of Borrower;
(i) Accounts with respect to which the account debtor
disputes liability or makes any claim with respect thereto as to which Bank
believes, in its sole discretion, that there may be a basis for dispute (but
only to the extent of the amount subject to such dispute or claim), or is
subject to any Insolvency Proceeding, or becomes insolvent, or goes out of
business;
(j) Accounts owing from distributors that have not been
pre-approved in writing by Bank; and
(k) Accounts with respect to progress billings;
(l) Accounts the collection of which Bank reasonably
determines to be doubtful. "Eligible Foreign Accounts" means Accounts with
respect to which the account debtor does not have its principal place of
business in the United States and that are: (1) covered by credit insurance in
form and amount, and by an insurer satisfactory to Bank less the amount of any
deductible(s) which may be or become owing thereon; or (2) supported by one or
more letters of credit either advised or negotiated through Bank or in favor of
Bank as beneficiary, in an amount and of a
3
<PAGE> 7
tenor, and issued by a financial institution, acceptable to Bank; or (3) that
Bank approves on a case-by-case basis.
"Equipment" means all present and future machinery,
equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and
attachments in which Borrower has any interest.
"Equipment Advance" has the meaning set forth in Section
2.1.3.
"Equipment Availability Date" has the meaning set forth
in Section 2.1.3.
"ERISA" means the Employment Retirement Income Security
Act of 1974, as amended, and the regulations thereunder.
"Fortune 500 Companies" mean any account debtor of
Borrower listed among the 500 largest United States companies in the most recent
such listing published by Fortune Magazine.
"GAAP" means generally accepted accounting principles as
in effect in the United States from time to time.
"Indebtedness" means (a) all indebtedness for borrowed
money or the deferred purchase price of property or services, including without
limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.
"Insolvency Proceeding" means any proceeding commenced
by or against any person or entity under any provision of the United States
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.
"Intellectual Property Collateral" means
(a) Copyrights, Trademarks, Patents, and Mask Works;
(b) Any and all trade secrets, and any and all
intellectual property rights in computer software and computer software products
now or hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to
Borrower now or hereafter existing, created, acquired or held;
(d) Any and all claims for damages by way of past,
present and future infringement of any of the rights included above, with the
right, but not the obligation, to sue for and collect such damages for said use
or infringement of the intellectual property rights identified above;
(e) All licenses or other rights to use any of the
Copyrights, Patents, Trademarks, or Mask Works, and all license fees and
royalties arising from such use to the extent permitted by such license or
rights;
(f) All amendments, renewals and extensions of any of
the Copyrights, Trademarks, Patents or Mask Works; and
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<PAGE> 8
(g) All proceeds and products of the foregoing,
including without limitation all payments under-insurance or any indemnity or
warranty payable in respect of any of the foregoing.
"Inventory" means all present and future inventory in
which Borrower has any interest, including merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products
intended for sale or lease or to be furnished under a contract of service, of
every kind and description now or at any time hereafter owned by or in the
custody or possession, actual or constructive, of Borrower, including such
inventory as is temporarily out of its custody or possession or in transit and
including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above.
"Investment" means any beneficial ownership of
(including stock, partnership interest or other securities) any Person, or any
loan, advance or capital contribution to any Person.
"IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"Letter of Credit" means a letter of credit or similar
undertaking issued by Bank pursuant to Section 2.1-2, and any letters of credit
previously issued by Bank for the account of Borrower and existing on the
Closing Date, including Letter of Credit #10356.
"Letter of Credit Reserve" has the meaning set forth in
Section 2.1.2.
"Lien" means any mortgage, lien, deed of trust, charge,
pledge, security interest or other encumbrance.
"Loan Documents" means, collectively, this Agreement,
any note or notes executed by Borrower, and any other present or future
agreement entered into between Borrower and./or for the benefit of Bank in
connection with this Agreement, all as amended, extended or restated from time
to time.
"Mask Works" means all mask works or similar rights
available for the protection of semiconductor chips, now owned or hereafter
acquired.
"Material Adverse Effect" means a material adverse
effect on (i) the business operations or condition (financial or otherwise) of
Borrower and its Subsidiaries taken as a whole or (ii) the ability of Borrower
to repay the Obligations or otherwise perform its obligations under the Loan
Documents.
"Maturity Date" means July 15, 2001.
"Negotiable Collateral" means all of Borrower's present
and future letters of credit of which it is a beneficiary, notes, drafts,
instruments, securities, documents of title, and chattel paper.
"Obligations" means all debt, principal, interest, Bank
Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement
or any other agreement, whether absolute or contingent, due or to become due,
now existing or hereafter arising, including any interest that accrues after the
commencement of an Insolvency Proceeding and including any debt, liability, or
obligation owing from Borrower to others that Bank may have obtained by
assignment or otherwise.
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<PAGE> 9
"Patents" means all patents, patent applications and
like protections, including without limitation improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same.
"Payment Date" means the fifteenth (15th) calendar day
of each month, commencing on the first such date after the Closing Date and
ending on the Maturity Date.
"Permitted Indebtedness" means:
(a) Indebtedness of Borrower in favor of Bank arising
under this Agreement or any other Loan Document;
(b) Indebtedness existing on the Closing Date and
disclosed in the Schedule;
(c) Subordinated Debt;
(d) Indebtedness to trade creditors incurred in the
ordinary course of business; and
(e) Indebtedness secured by Permitted Liens.
"Permitted Investment" means:
(a) Investments existing on the Closing Date disclosed
in the Schedule; and
(b) (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within one (1) year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having the highest rating obtainable from either
Standard & Poor's Corporation or Moody's Investors Service, Inc., and (iii)
certificates of deposit maturing no more than one (1) year from the date of
investment therein issued by Bank.
"Permitted Liens" means the following:
(a) Any Liens existing on the Closing Date and disclosed
in the Schedule or arising under this Agreement or the other Loan Documents;
(b) Liens for taxes, fees, assessments or other
governmental charges or levies,. either not delinquent or being contested in
good faith by appropriate proceedings and as to which adequate reserves are
maintained on Borrower's Books in accordance with GAAP, provided the same have
no priority over any of Bank's security interests;
(c) Liens (i) upon or in any Equipment acquired or held
by Borrower or any of its Subsidiaries to secure the purchase price of such
Equipment or indebtedness incurred solely for the purpose of financing the
acquisition of such Equipment, or (ii) existing on such equipment at the time of
its acquisition, provided that the Lien is confined solely to the property so
acquired and improvements thereon, and the proceeds of such equipment;
(d) Leases or subleases and licenses or sublicenses
granted to others in the ordinary course of Borrower's business not interfering
in any material respect with the business of Borrower and its Subsidiaries taken
as a whole, and any interest or title of a lessor, licensor or under
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<PAGE> 10
any lease or license, provided that such leases, subleases, licenses and
sublicenses do not prohibit the grant of the security interest granted
hereunder; and
(e) Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by Liens of the type
described in clauses (a) through (c) above, provided that any extension, renewal
or replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness being extended, renewed or
refinanced does not increase.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or governmental agency.
"Prime Rate" means the variable rate of interest, per
annum, most recently published in the Western edition of The Wall Street
Journal, as the "prime rate," whether or not such rate is the lowest rate
available from Bank.
"Quick Assets" means, as of any applicable date, the
consolidated cash, cash equivalents, accounts receivable and investments with
maturities of fewer than ninety (90) days of Borrower determined in accordance
with GAAP.
"Responsible Officer" means each of the Chief Executive
Officer, the President, the Chief Financial Officer and the Controller of
Borrower.
"Revolving Maturity Date" means the date immediately
preceding the first anniversary of the Closing Date.
"Schedule" means the schedule of exceptions attached
hereto, if any.
"Subordinated Debt" means any debt incurred by Borrower
that is subordinated to the debt owing by Borrower to Bank on terms acceptable
to Bank (and identified as being such by Borrower and Bank).
"Subsidiary" means with respect to any Person, any
corporation, partnership, company association, joint venture, or any other
business entity, if any, of which more than fifty percent (50%) of the voting
stock or other equity interests is owned or controlled, directly or indirectly,
by such Person or one or more Affiliates of such Person.
"Tangible Net Worth" means, as of any applicable date,
the consolidated total assets of Borrower and its Subsidiaries minus without
duplication, (i) the sum of any amounts attributable to (a) goodwill, (b)
intangible items such as unamortized debt discount and expense, patents, trade
and service marks and names, copyrights and research and development expenses
except prepaid expenses, and (c) all reserves not already deducted from assets,
and (ii) Total Liabilities.
"Total Liabilities" means, as of any applicable date,
all obligations that should, in accordance with GAAP, be classified as
liabilities on the consolidated balance sheet of Borrower, including in any
event all Indebtedness, but specifically excluding Subordinated Debt.
"Trademarks" means any trademark and servicemark rights,
whether registered or not, applications to register and registrations of the
same and like protections, and the entire goodwill of the business of Borrower
connected with and symbolized by such trademarks.
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<PAGE> 11
1.2 Accounting and Other Terms.
All accounting terms not specifically defined herein
shall be construed in accordance with GAAP and all calculations and
determinations made hereunder shall be made in accordance with GAAP. When used
herein, the term "financial statements" shall include the notes and schedules
thereto. The terms "including" / "includes" shall always be read as meaning
"including (or includes) without limitation," when used herein or in any other
Loan Document.
2. LOAN AND TERMS OF PAYMENT
2.1 Credit Extensions.
Borrower promises to pay when due to the order of Bank,
in lawful money of the United States of America, the aggregate unpaid principal
amount of all Credit Extensions made by Bank to Borrower hereunder. Borrower
shall also pay interest on the unpaid principal amount of such Credit Extensions
at rates in accordance with the terms hereof.
2.1.1 Revolving Advances
(a) Subject to and upon the terms and conditions of this
Agreement, Bank agrees to make Advances to Borrower in an aggregate outstanding
amount not to exceed (i) the Committed Revolving Line or the Borrowing Base,
whichever is less, minus (ii) the face amount of all outstanding Letters -of
Credit (including drawn but unreimbursed Letters of Credit). Subject to the
terms and conditions of this Agreement, amounts borrowed pursuant to this
Section may be repaid and reborrowed at any time prior to the Revolving Maturity
Date.
(b) Whenever Borrower desires an Advance, Borrower will
notify Bank by facsimile transmission or telephone no later than 3:00 p.m.
Pacific time, on the Business Day that the Advance is to be made. Each such
notification shall be promptly confirmed by a Payment/Advance Form in
substantially the form of Exhibit B hereto. Bank is authorized to make Advances
under this Agreement, based upon instructions received from a Responsible
Officer or a designee of a Responsible Officer or without instructions if in
Bank's discretion such Advances are necessary to meet Obligations which have
become due and remain unpaid. Bank shall be entitled to rely on any telephonic
notice given by a person who Bank reasonably believes to be a Responsible
Officer or a designee thereof, and Borrower shall indemnify and hold Bank
harmless for any damages or loss suffered by Bank as a result of such reliance.
Bank will credit the amount of Advances made under this Section 2.1 to
Borrower's deposit account. Borrower shall deliver to Bank a promissory note in
substantially the form of Exhibit C-1.
(c) The Committed Revolving Line shall terminate on the
Revolving Maturity Date, at which time all Advances under this Section 2.1.1
shall be immediately due and payable.
2.1.2 Letters of Credit.
(a) Subject to the terms and conditions of this
Agreement, Bank agrees to issue or cause to be issued Letters of Credit for the
account of Borrower in an aggregate outstanding face amount not to exceed (i)
the lesser of the Committed Revolving Line or the Borrowing Base, whichever is
less, minus (ii) the then outstanding principal balance of the Advances,
provided that the face amount of outstanding Letters of Credit (including drawn
but unreimbursed Letters of Credit and any Letter of Credit Reserve) shall not
in any case exceed Two Hundred Thousand Dollars ($200,000). Each Letter of
Credit shall have an expiration date no later than one hundred eighty (180) days
after the Revolving Maturity Date provided that Borrower's reimbursement
obligation shall be secured by cash on terms acceptable to Bank at any time
after the Revolving
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<PAGE> 12
Maturity Date. All Letters of Credit shall be, in form and substance, acceptable
to Bank in its sole discretion and shall be subject to the terms and conditions
of Bank's form of standard Application and Letter of Credit Agreement.
(b) The obligation of Borrower to immediately reimburse
Bank for drawings made under Letters of Credit shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and such Letters of Credit, under all circumstances whatsoever.
Borrower shall indemnify, defend, protect and hold Bank harmless against any
loss, cost, expense or liability, including, without limitation, reasonable
attorneys' fees, arising out of or in connection with all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection
with any Letters of Credit.
(c) Borrower may request that Bank issue a Letter of
Credit payable in a currency other than United States Dollars. If a demand for
payment is made under any such Letter of Credit, Bank shall treat such demand as
an Advance to Borrower of the equivalent of the amount thereof (plus cable
charges) in United States currency at the then prevailing rate of exchange in
San Francisco, California, for sales of that other currency for cable transfer
to the country of which it is the currency.
(d) Upon the issuance of any Letter of Credit payable in
a currency other than United States Dollars, Bank shall create a reserve under
the Committed Revolving Line for Letters of Credit against fluctuations in
currency exchange rates, in an amount equal to ten percent (10%) of the face
amount of such Letter of Credit. The amount of such reserve may be amended by
Bank from time to time to account for fluctuations in the exchange rate. The
availability of hinds under the Committed Revolving Line shall be reduced by the
amount of such reserve for so long as such Letter of Credit remains outstanding.
2.1.3 Equipment Advances.
(a) Subject to and upon the terms and conditions of this
Agreement, at any time from the date hereof through July 16, 1998 (the
"Equipment Availability End Date"), Bank agrees to make advances (each an
"Equipment Advance" and, collectively, the "Equipment Advances") to Borrower in
an aggregate outstanding amount not to exceed the Committed Equipment Line. To
evidence the Equipment Advance or Equipment Advances, Borrower shall deliver to
Bank, at the time of each Equipment Advance request, an invoice for the
equipment to be purchased. The Equipment Advances shall be used only to purchase
or refinance Equipment purchased on or after ninety (90) days prior to the date
hereof and shall not exceed one hundred percent (100%) of the invoice amount of
such equipment approved from time to time by Bank, excluding taxes, shipping,
warranty charges, freight discounts and installation expense. Equipment
Advances, once repaid, may not be reborrowed.
(b) Interest shall accrue from the date of each
Equipment Advance at the rate specified in Section 23(a), and shall be payable
monthly for each month through the month in which the Equipment Availability End
Date falls. Any Equipment Advances that are outstanding on October 15, 1997
shall be payable in thirty-six (36) equal monthly installments of principal,
plus accrued interest, beginning on November 15, 1997, and continuing through
October 15, 2000. Any Equipment Advances drawn after October 15, 1997 that are
outstanding on January 15, 1998 shall be payable in thirty-six (36) equal
monthly installments of principal, plus accrued interest, beginning on February
15, 1998 and continuing through January 15, 2001. Any Equipment Advances drawn
after January 15, 1998 that are outstanding on April 15, 1998 shall be payable
in thirty-six (36) equal monthly installments of principal, plus accrued
interest, beginning on May 15, 1998 and continuing through April 15, 2001. Any
Equipment Advances drawn after April 15, 1998 that are outstanding on the
Equipment Availability End Date will be payable in thirty-six (36) equal monthly
installments of principal, plus accrued interest, beginning on August 15, 1998
and continuing through the Maturity
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<PAGE> 13
Date, at which time all amounts due under this Section 2.1.3 and any other
amounts due under this Agreement shall be immediately due and payable.
(c) When Borrower desires to obtain an Equipment
Advance, Borrower shall notify Bank (which notice shall be irrevocable) by
facsimile transmission to be received no later than 3:00 p.m. Pacific time one
(1) Business Day before the day on which the Equipment Advance is to be made.
Such notice shall be substantially in the form of Exhibit B. The notice shall be
signed by a Responsible Officer or its designee and include a copy of the
invoice for the Equipment to be financed. Borrower shall deliver to Bank a
promissory note in substantially the form of Exhibit C-2.
2.2 Overadvances.
If, at any time or for any reason, the amount of
Obligations owed by Borrower to Bank pursuant to Section 2.1.1 and 2.1.2 of this
Agreement is greater than the lesser of (i) the Committed Revolving Line or (ii)
the Borrowing Base, Borrower shall immediately pay to Bank, in cash, the amount
of such excess.
2.3 Interest Rates, Payments, and Calculations.
(a) Interest Rate. Except as set forth in Section 23(b),
any Advances and/or Equipment Advances shall bear interest on the average daily
balance thereof, at -a per annum rate equal to the Prime Rate.
(b) Default Rate. AR Obligations shall bear interest,
from and after the occurrence of an Event of Default, at a rate equal to five
(5) percentage points above the interest rate applicable immediately prior to
the occurrence of the Event of Default.
(c) Payments. Interest hereunder shall be due and
payable on each Payment Date. Borrower hereby authorizes Bank to debit any
accounts with - Bank, including, without limitation, Account Number 3103056 for
payments of principal and interest due on the Obligations and any other amounts
owing by Borrower to Bank. Bank win notify Borrower of all debits which Bank has
made against Borrower's accounts. Any such debits against Borrower's accounts in
no way shall be deemed a set-off. Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder.
(d) Computation. In the event the Prime Rate is changed
from time to time hereafter, the applicable rate of interest hereunder shall be
increased or decreased effective as of 12:01 a.m. on the day the Prime Rate is
changed, by an amount equal to such change in the Prime Rate. All interest
chargeable under the Loan Documents shall be computed on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed.
2.4 Crediting Payments.
Prior to the occurrence of an Event of Default, Bank
shall credit a wire transfer of funds, check or other item of payment to such
deposit account or Obligation as Borrower specifies. After the occurrence of an
Event of Default, the receipt by Bank of any wire transfer of funds, check, or
other item of payment, whether directed to Borrower's deposit account with Bank
or to the Obligations or otherwise, shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment in
respect of the Obligations unless such payment is of immediately available
federal funds or unless. and until such check or other item of payment is
honored when presented for payment. Notwithstanding anything to the contrary
contained herein, any wire transfer or payment received by Bank after 12:00 noon
Pacific time shall be deemed to have been received by
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<PAGE> 14
Bank as of the opening of business on the immediately following Business Day.
Whenever any payment to Bank under the Loan Documents would otherwise be due
(except by reason of acceleration) on a date that is not a Business Day, such
payment shall instead be due on the next Business Day, and additional fees or
interest, as the case may be, shall accrue and be payable for the period of such
extension.
2.5 Fees.
Borrower shall pay to Bank the following:
(a) Facility Fee. A Facility Fee equal to Six Thousand
Dollars ($6,000), which fee shall be due on the Closing Date and shall be fully
earned and non-refundable;
(b) Financial Examination and Appraisal Fees. Bank's
customary fees and out-of-pocket expenses for Bank's audits of Borrower's
Accounts, and for each appraisal of Collateral and financial analysis and
examination of Borrower performed from time to time by Bank or its agents;
(c) Bank Expenses. Upon demand from Bank, including,
without limitation, upon the date hereof, all Bank Expenses incurred through the
date hereof, including reasonable attorneys' fees and expenses (not to exceed
$3,500 without Borrower's prior approval) and, after the date hereof, all Bank
Expenses, including reasonable attorneys' fees and expenses, as and when they
become due.
2.6 Additional Costs.
In case any law, regulation, treaty or official
directive or the interpretation or application thereof by any court or any
governmental authority charged with the administration thereof or the compliance
with any guideline or request of any central bank or other governmental
authority (whether or not having the force of law):
(a) subjects Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby (except for taxes
on the overall net income of Bank imposed by the United States of America or any
political subdivision thereof);
(b) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of, or loans by, Bank; or
(c) imposes upon Bank any other condition with respect
to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense u on Bank with respect to
any loans, Bank shall notify Borrower thereof. Borrower agrees to pay to Bank
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation by Bank of a statement of the amount and setting forth Bank's
calculation thereof, all in reasonable detail, which statement shall be deemed
true and correct absent manifest error.
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<PAGE> 15
2.7 Term.
Except as otherwise set forth herein, this Agreement
shall become effective on the Closing Date and, subject to Section 12.7, shall
continue in full force and effect for a term ending on. the Maturity Date.
Notwithstanding the foregoing, Bank shall have the right to terminate its
obligation to make Credit Extensions under this Agreement immediately and
without notice upon the occurrence and during the continuance of an Event of
Default. Notwithstanding termination of this Agreement, Bank's lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.
3. CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Credit Extension.
The obligation of Bank to make the initial Credit
Extension is subject to the condition precedent that Bank shall have received,
in form and substance satisfactory to Bank, the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower with
respect to articles, bylaws,. incumbency and resolutions authorizing the
execution and delivery of this Agreement;
(c) a warrant to purchase stock;
(d) financing statements (Forms UCC-1);
(e) insurance certificate;
(f) payment of the fees and Bank Expenses then due
specified in Section .2.5 hereof;
(g) an audit of Borrower's Accounts, the results of
which shall be satisfactory to Bank; and
(h) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
3.2 Conditions Precedent to all Credit Extensions.
The obligation of Bank to make each Credit Extension,
including the initial Credit Extension, is further subject to the following
conditions:
(a) timely receipt by Bank of the Payment/Advance Form
as provided in Section 2.1; and
(b) the representations and warranties contained in
Section 5 shall be true and correct in all material respects on and as of the
date of such Payment/Advance Form and on the effective date of each Credit
Extension as though made at and as of each such date, and no Event of Default
shall have occurred and be continuing, or would result from such Credit
Extension. The making of each Credit Extension shall be deemed to be a
representation and warranty by Borrower on the date of such Credit Extension as
to the accuracy of the facts referred to in this Section 3.2(b).
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<PAGE> 16
4. CREATION OF SECURITY INTEREST
4.1 Grant of Security Interest.
Borrower grants and pledges to Bank a continuing
security interest in all presently existing and hereafter acquired or arising
Collateral in order to secure prompt payment of any and all Obligations and in
order to secure prompt performance by Borrower of each of its covenants and
duties under the Loan Documents. Except as set forth in the Schedule, such
security interest constitutes a valid, first priority security interest in the
presently existing Collateral, and will constitute a valid, first priority
security interest in Collateral acquired after the date hereof. Borrower
acknowledges that Bank may place a "hold" on any Deposit Account pledged as
Collateral to secure the Obligations. Notwithstanding termination of this
Agreement, Bank's Lien on the Collateral shall remain in effect for so long as
any Obligations are outstanding.
4.2 Delivery of Additional Documentation Required.
Borrower shall from time to time execute and deliver to
Bank, at the request of Bank, all Negotiable Collateral, all financing
statements and other documents that Bank may reasonably request, in form
satisfactory to Bank, to perfect and continue perfected Bank's security
interests in the Collateral and in order to fully consummate all of the
transactions contemplated under the Loan Documents.
4.3 Right to Inspect.
Bank (through any of its officers, employees, or agents)
shall have the right, upon reasonable prior notice, from time to time during
Borrower's usual business hours, to inspect Borrower's Books and to make copies
thereof and to check, test, and appraise the Collateral in order to verify
Borrower's financial condition or the amount, condition of, or any other matter
relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
5.1 Due Organization and Qualification.
Borrower and each Subsidiary is a corporation duly
existing and in good standing under the laws of its state of incorporation and
qualified and licensed to do business in, and is in good standing in, any state
in which the conduct of its business or its ownership of property requires that
it be so qualified.
5.2 Due Authorization; No Conflict.
The execution, delivery, and performance of the Loan
Documents are within Borrower's powers, have been duly authorized, and are not
in conflict with nor constitute a breach of any provision contained in
Borrower's Articles of Incorporation or Bylaws, nor will they constitute an
event of default under any material agreement to which Borrower is a party or by
which Borrower is bound. Borrower is not in default under any agreement to which
it is a party or by which it is bound, which default could have a Material
Adverse Effect.
5.3 No Prior Encumbrances.
Borrower has good and indefeasible title to the
Collateral, free and clear of Liens, except for Permitted Liens.
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<PAGE> 17
5.4 Bona Fide Eligible Accounts.
The Eligible Accounts are bona fide existing
obligations. The service or property giving rise to such Eligible Accounts has
been performed or delivered to the account debtor or to the account debtor's
agent for immediate shipment to and unconditional acceptance by the . account
debtor. Borrower has not received notice of actual or imminent Insolvency
Proceeding of any account debtor whose accounts are included in any Borrowing
Base Certificate as an Eligible Account.
5.5 Merchantable Inventory.
All Inventory is in all material respects of good and
marketable quality, free from all material defects.
5.6 Intellectual Property.
Borrower is the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by Borrower to its
customers in the ordinary course of business. Each of the Patents is valid and
enforceable, and no part of the Intellectual Property Collateral has been judged
invalid or unenforceable, in whole or in part, and no claim has been made that
any part of the Intellectual Property Collateral violates the rights of any
third party.
5.7 Name; Location of Chief Executive Office.
Except as disclosed in the Schedule, Borrower has not
done business and will not, without at least thirty (30) days prior written
notice to Bank, do business under any name other than that specified on the
signature page hereof. The chief executive office of Borrower is located at the
address indicated in Section 10 hereof.
5.8 Litigation.
Except as set forth in the Schedule, there are no
actions or proceedings pending or, to Borrower's knowledge, threatened by or
against Borrower or any Subsidiary before any court or administrative agency in
which an adverse decision could have a Material Adverse Effect or a material
adverse effect on Borrower's interest or Bank's security interest in the
Collateral.
5.9 No Material Adverse Change in Financial Statements.
All consolidated financial statements related to
Borrower and any Subsidiary that have been delivered by Borrower to Bank fairly
present in all material respects Borrower's consolidated financial condition as
of the date thereof and Borrower's consolidated results of operations for the
period then ended. There has not been a material adverse change in the
consolidated financial condition of Borrower since the date of the most recent
of such financial statements submitted to Bank on or about the Closing Date.
5.10 Solvency.
The fair saleable value of Borrower's assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities; the
Borrower is not left with unreasonably small capital after the transactions
contemplated by this Agreement; and Borrower is able to pay its debts (including
trade debts) as they mature.
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<PAGE> 18
5.11 Regulatory Compliance.
Borrower and each Subsidiary has met the minimum funding
requirements of ERISA with respect to any employee benefit plans subject to
ERISA. No event has occurred resulting from Borrower's failure to comply with
ERISA that is reasonably likely to result in Borrower's incurring any liability
that could have a Material Adverse Effect. Borrower is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940. Borrower is not engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations G, T and U of the Board of Governors of the Federal Reserve System).
Borrower has complied with all the provisions of the Federal Fair Labor
Standards Act. Borrower has not violated any statutes, laws, ordinances or rules
applicable to it, violation of which could have a Material Adverse Effect.
5.12 Environmental Condition.
None of Borrower's or any Subsidiary's properties or
assets has ever been used by Borrower or any Subsidiary or, to the best of
Borrower's knowledge, by previous owners or operators, in the disposal of, or to
produce, store, handle, treat, release, or transport, any hazardous waste or
hazardous substance other than in accordance with applicable law; to the best of
Borrower's knowledge, none of Borrower's properties or assets has ever been
designated or identified in any manner pursuant to any environmental protection
statute as a hazardous waste or hazardous substance disposal site, or a
candidate for closure pursuant to any environmental protection statute; no lien
arising under any environmental protection statute has attached to any revenues
or to any real or personal property owned by Borrower or any Subsidiary; and
neither Borrower nor any Subsidiary has received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal, state
or other governmental agency concerning any action or omission by Borrower or
any Subsidiary resulting in the release or other disposition of hazardous waste
or hazardous substances into the environment.
5.13 Taxes.
Borrower and each Subsidiary has filed or caused to be
filed all tax returns required to be filed on a timely basis, and has paid, or
has made adequate provision for the payment of, all taxes reflected therein.
5.14 Subsidiaries.
Borrower does not own any stock, partnership interest or
other equity securities of any Person, except for Permitted Investments.
5.15 Government Consents.
Borrower and each Subsidiary has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all governmental authorities that are necessary for the
continued operation of Borrower's business as currently conducted.
5.16 Full Disclosure
No representation, warranty or other statement made by
Borrower in any certificate or written statement furnished to Bank contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained in such certificates or statements not
misleading.
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6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until payment in
full of all outstanding Obligations, and for so long as Bank may have any
commitment to make a Credit Extension hereunder, Borrower shall do all of the
following:
6.1 Good Standing.
Borrower shall maintain its and each of its
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, to the extent
consistent with prudent management of Borrower's business, in force all
licenses, approvals and agreements, the loss of which could have a Material
Adverse Effect.
6.2 Government Compliance.
Borrower shall meet, and shall cause each Subsidiary to
meet, the minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA. Borrower shall comply, and shall cause each
Subsidiary to comply, with all statutes, laws, ordinances and government rules
and regulations to which it is subject, noncompliance with which could have a
Material Adverse Effect or a material adverse effect on the Collateral or the
priority of Bank's Lien on the Collateral.
6.3 Financial Statements, Reports, Certificates.
Borrower shall deliver to Bank: (a) as soon as
available, but in any event within thirty (30) days after the end of each month,
a company prepared consolidated balance sheet and income statement covering
Borrower's consolidated operations during such period, in a form and certified
by an Officer of Borrower reasonably acceptable to Bank; (b) as soon as
available, but in any event within one hundred twenty (120) days after the end
of Borrower's fiscal year, audited consolidated financial statements of Borrower
prepared in accordance with GAAP, consistently applied, together with an
unqualified opinion on such financial statements of an independent certified
public accounting firm reasonably acceptable to Bank; (c) if applicable, within
five (5) days of filing, copies of all statements, reports and notices sent or
made available generally by Borrower to its security holders or to any holders
of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed with the
Securities and Exchange Commission; (d) promptly upon receipt of notice thereof,
a report of any legal actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to Borrower or any Subsidiary
of One Hundred Thousand Dollars ($100,000) or more; and (e) such budgets, sales
projections, operating plans or other financial information as Bank may
reasonably request from time to time.
Within thirty (30) days after the last day of each
month, Borrower shall deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in substantially the form of Exhibit D hereto, together with
aged listings of accounts receivable and accounts payable.
Within thirty (30) days after the last day of each
month, Borrower shall deliver to Bank with the monthly financial statements a
Compliance Certificate signed by a Responsible Officer in substantially the form
of Exhibit E hereto.
Bank shall have a right from time to time hereafter to
audit Borrower's Accounts at Borrower's expense, provided that such audits will
be conducted no more often than every six (6) months unless an Event of Default
has occurred and is continuing.
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<PAGE> 20
6.4 Inventory; Returns.
Borrower shall keep all Inventory in good and marketable
condition, free from all material defects. Returns and allowances, if any, as
between Borrower and its account debtors shall be on the same basis and in
accordance with the usual customary practices of Borrower, as they exist at the
time of the execution and delivery of this Agreement. Borrower shall promptly
notify Bank of all returns and recoveries and of all disputes and claims, where
the return, recovery, dispute or claim involves more than Fifty Thousand Dollars
($50,000).
6.5 Taxes.
Borrower shall make, and shall cause each Subsidiary to
make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Bank, on demand, appropriate certificates attesting to
the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicating that Borrower or a Subsidiary has made such
payments or deposits; provided that Borrower or a. Subsidiary need not make any
payment if the amount or validity of such payment is (i)contested in good faith
by appropriate proceedings, (ii) is reserved against (to the extent required by
GAAP) by Borrower and (iii) no lien other than a Permitted Lien results.
6.6 Insurance.
(a) Borrower, at its expense, shall keep the Collateral
insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as ordinarily insured against by
other owners in similar businesses conducted in the locations where Borrower's
business is conducted on the date hereof. Borrower shall also maintain insurance
relating to Borrower's ownership and use of the Collateral in amounts and of a
type that are customary to businesses similar to Borrower's.
(b) All such policies of insurance shall be in such
form, with such companies, and in such amounts as are reasonably satisfactory to
Bank. All such policies of property insurance shall contain a lender's loss
payable endorsement, in a form satisfactory to Bank, showing Bank as an
additional loss payee thereof and all liability insurance policies shall show
the Bank as an additional insured, and shall specify that the insurer must give
at least twenty (20) days notice to Bank before canceling its policy for any
reason. At Bank's request, Borrower shall deliver to Bank certified copies of
such policies of insurance and evidence of the payments of all premiums
therefor. All proceeds payable under any such policy shall, at the option of
Bank, be payable to Bank to be applied on account of the Obligations.
6.7 Principal Depository
Borrower shall maintain its principal depository and
operating accounts with Bank.
6.8 Quick Ratio, Cash Coverage Ratio or Cash Flow Coverage
Ratio.
Borrower shall maintain, as of the last day of each
calendar month, at least one of the following:
(a) a ratio of Quick Assets to Current Liabilities,
excluding deferred revenues, of at least 1.75 to 1.0;
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<PAGE> 21
(b) a ratio of unrestricted cash and cash-equivalents,
plus the lesser of the Committed Revolving Line or the Borrowing Base, minus the
face amount of all outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit), minus any outstanding Advances under the
Revolving Facility, to the aggregate outstanding Equipment Advances of at least
1.75 to 1.0; or
(c) a ratio of net profits after taxes plus depreciation
and amortization plus non-cash interest charges, to the current portion of long
term debt and capitalized leases of at least 1.25:1.0.
6.9 Debt-Net Worth Ratio.
Borrower shall maintain, as of the last day of each
calendar month, a ratio of Total Liabilities less Subordinated Debt to Tangible
Net Worth plus Subordinated Debt of not more than 1.75 to 1.0. Notwithstanding
the foregoing, Borrower's obligation to comply. with this Section 6.9 shall be
waived for the months ending July 31, 1997 and August 31, 1997 upon Bank's
receipt of verbal confirmation from Borrower's existing lead investor stating
that an equity event in which Borrower shall receive at least $3,000,000 from
the issuance of its equity securities will close by September 30, 1997 and that
such investor intends to participate in such equity event.
6.10 Tangible Net Worth.
Beginning September 30, 1997, Borrower shall maintain,
as of the last day of each calendar month, a Tangible Net Worth of not less than
Two Million Eight Hundred Thousand Dollars ($2,800,000).
6.11 Profitability.
Borrower may incur losses not to exceed: (i) Two Million
dollars ($2,000,000) for the fiscal quarter ending June 30, 1997; (ii) One
Million Five Hundred Thousand Dollars ($1,500,000) for the fiscal quarter ending
September 30, 1997; and (iii) Nine Hundred Fifty Thousand Dollars ($950,000) for
the fiscal quarter ending December 31, 1997. Borrower and Bank agree to
establish maximum quarterly loss covenants for fiscal year 1998 by March 15,
1998. Such covenants will be established to the mutual satisfaction of both
parties.
6.12 Further Assurances.
At any time and from time to time Borrower shall execute
and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this Agreement.
7. NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any Credit
Extension hereunder shall be available and until payment in full of the
outstanding Obligations or for so long as Bank may have any commitment to make
any Advances, Borrower will not do any of the following:
7.1 Dispositions.
Convey, sell, lease, transfer or otherwise dispose of
(collectively, a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than Transfers (i) of inventory
in the ordinary course of business, (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business, or (iii) of worn-out or obsolete Equipment.
18
<PAGE> 22
7.2 Changes in Business, Ownership, Management or Business
Locations.
Engage in any business, or permit any of its
Subsidiaries to engage in any business, other than the businesses currently
engaged in by Borrower and any business substantially similar or related thereto
(or incidental thereto), or suffer a material change in Borrower's ownership or
management. Borrower will not, without at least thirty (30) days prior written
notification to Bank, relocate its chief executive office or add any new offices
or business locations.
7.3 Mergers or Acquisitions.
Merge or consolidate, or permit any of its Subsidiaries
to merge or consolidate, with or into any other business organization, or
acquire, or permit any of its Subsidiaries to acquire, all or substantially all
of the capital stock or property of another Person.
7.4 Indebtedness.
Create, incur, assume or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.
7.5 Encumbrances.
Create, incur, assume or suffer to exist any Lien with
respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens.
7.6 Distributions.
Pay any dividends or make any other distribution or
payment on account of or in redemption, retirement or purchase of any capital
stock.
7.7 Investments.
Directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.
7.8 Transactions with Affiliates.
Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower except for transactions that
are in the ordinary course of Borrower's business, upon fair and reasonable
terms that are no less favorable to Borrower than would be obtained in an arm's
length transaction with a non-affiliated Person.
7.9 Intellectual Property Agreements.
Borrower shall not permit the inclusion in any material
contract to which it becomes a party of any provisions that could or might in
any way prevent the creation of a security interest in Borrower's rights and
interests in any property included within the definition of the Intellectual
Property Collateral acquired under such contracts.
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<PAGE> 23
7.10 Subordinated Debt.
Make any-payment in respect of any Subordinated Debt, or
permit any of its Subsidiaries to make any such payment, except in compliance
with the terms of such Subordinated Debt, or amend any provision contained in
any documentation relating to the Subordinated Debt without Bank's prior written
consent.
7.11 Inventory.
Store the Inventory with a bailee, warehouseman, or
similar party unless Bank has received a pledge of any warehouse receipt
covering such Inventory. Except for Inventory sold in the ordinary course of
business and except for such other locations as Bank may approve in writing,
Borrower shall keep the Inventory only at the location set forth in Section 10
hereof and such other locations of which Borrower gives Bank prior written
notice and as to which Borrower signs and files a financing statement where
needed to perfect Bank's security interest.
7.12 Compliance.
Become an "investment company" or a company controlled
by an "investment company," within the meaning of the Investment Company Act of
1940, or become principally engaged in, or undertake as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Advance for such purpose; fail
to meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, which
violation could have a Material Adverse Effect or a material adverse effect on
the Collateral or the priority of Bank's Lien on the Collateral, or pen-nit any
of its Subsidiaries to do any of the foregoing.
8. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an
Event of Default by Borrower under this Agreement:
8.1 Payment Default.
If Borrower fails to pay, when due, any of the
Obligations;
8.2 Covenant Default.
(a) If Borrower fails to perform any obligation under
Sections 6.3, 6.6, 6.7, 6.8, 6.9, 6.10 or 6.11 or violates any of the covenants
contained in Article 7 of this Agreement, or
(b) If Borrower fails or neglects to perform, keep, or
observe any other material term, provision, condition, covenant, or agreement
contained in this Agreement, in any of the Loan Documents, or in any other
present or future agreement between Borrower and Bank and as to any default
under such other term, provision, condition, covenant or agreement that can be
cured, has failed to cure such default within ten (10) days after the occurrence
thereof; provided, however, that if the default cannot by its nature b6 cured
within the ten (10) day period or cannot after diligent attempts by Borrower be
cured within such ten (10) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional reasonable
period (which shall not in any case exceed thirty (30) days) to attempt to cure
such default, and within such reasonable time period the failure to have cured
such default shall not be deemed an Event of Default (provided that no Credit
Extensions will be required to be made during such cure period);
20
<PAGE> 24
8.3 Material Adverse Change.
If there (i) occurs a material adverse change in the
business, operations, or condition (financial or otherwise) of Borrower or (ii)
is a material impairment of the prospect of repayment of any portion of the
Obligations or (iii) is a material impairment of the value or priority of Bank's
security interests in the Collateral;
8.4 Attachment.
If any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person Acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within ten (10) days
after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending A good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period);
8.5 Insolvency.
If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within thirty (30) days
(provided that no Credit Extensions will be made prior to the dismissal of such
Insolvency Proceeding);
8.6 Other Agreements.
If there is a default in any agreement to which Borrower
is a party with a third party or parties resulting in a right by such third
party or parties, whether or not exercised, to accelerate the maturity of any
Indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000)
or that could have a Material Adverse Effect,
8.7 Subordinated Debt.
If Borrower makes any payment on account of Subordinated
Debt, except to the extent such payment is allowed under any subordination
agreement entered into with Bank;
8.8 Judgments.
If a judgment or judgments for the payment of money IN
an amount, individually or in the aggregate, of at least Fifty Thousand Dollars
($50,000) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of ten (10) days (provided that no Credit Extensions will
be made prior to the satisfaction or stay of such judgment); or
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<PAGE> 25
8.9 Misrepresentations.
If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate or writing delivered to Bank by Borrower or any
Person acting on Borrower's behalf pursuant to this Agreement or to induce Bank
to enter into this Agreement or any other Loan Document.
9. BANK'S RIGHT'S AND REMEDIES
9.1 Rights and Remedies.
Upon the occurrence and during the continuance of an
Event of Default, Bank may, at its election, without notice of its election and
without demand, do any one or more of the following, all of which are authorized
by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.5 all Obligations shall become immediately due and payable without any
action by Bank);
(b) Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Bank;
(c) Demand that Borrower (i) deposit cash with Bank in
an amount equal to the amount of any Letters of Credit remaining undrawn, as
collateral security for the repayment of any future drawings under such Letters
of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii)
pay in advance all Letters of Credit fees scheduled to be paid or payable over
the remaining term of the Letters of Credit;
(d) Settle or adjust disputes and claims directly with
account debtors for amounts, upon terms and in whatever order that Bank
reasonably considers advisable;
(e) Without notice to or demand upon Borrower, make such
payments and. do such acts as Bank considers necessary or reasonable to protect
its security interest in the Collateral. Borrower agrees to assemble the
Collateral if Bank so requires, and to make @he Collateral available to Bank as
Bank may designate. Borrower authorizes Bank to enter the premises where the
Collateral is located, to. take and maintain possession of the Collateral, or
any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in Bank's determination appears to be prior or superior to
its security interest and to pay all expenses incurred in connection therewith.
With respect to any of Borrower's premises, Borrower hereby grants Bank a
license to enter such premises and to occupy the same, without charge, in order
to exercise any of Bank's rights or remedies, provided herein, at law, in
equity, or otherwise;
(f) Without notice to Borrower set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Bank, or
(ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank;
(g) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Collateral. Bank is hereby granted a non-exclusive, royalty-free
license or other right, solely pursuant to the provisions of this Section 9.1,
to use, without charge, Borrower's labels, patents, copyrights, mask works,
rights of use of any name, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any property of a similar nature, as it
pertains to the Collateral, in completing production of, advertising for sale,
and
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<PAGE> 26
selling any Collateral and, in connection with Bank's exercise of its rights
under this Section 9.1, Borrower's rights under all licenses and all franchise
agreements shall inure to Bank's benefit;
(h) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrower's premises) as Bank
determines is commercially reasonable, and apply the proceeds thereof to the
Obligations in whatever manner or order Bank deems appropriate;
(i) Bank may credit bid and purchase at any public sale,
or at any private sale as permitted by law; and
(j) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.
(k) Bank shall have a non-exclusive, royalty-free
license to use the Intellectual Property Collateral to the extent reasonably
necessary to permit Bank to exercise its rights and remedies upon the occurrence
of an Event of Default.
9.2 Power of Attorney.
Effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints Bank
(and any of Bank's designated officers, or employees) as Borrower's true and
lawful attorney to: (a) send requests for verification of Accounts or notify
account debtors of Bank's security interest in the Accounts; (b) endorse
Borrower's name on any checks or other forms of payment or security that may
come into Bank's possession; (c) sign Borrower's name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) make, settle, and adjust all claims under and decisions with
respect to Borrower's policies of insurance; (e) settle and adjust disputes and
claims respecting the accounts directly with account debtors, for amounts and
upon terms which Bank determines to be reasonable; (f) to file, in its sole
discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of Borrower
where permitted by law; and (g) to transfer the Intellectual Property Collateral
into the name of Bank or a third party to the extent permitted under the
California Uniform Commercial Code, provided Bank may exercise such power of
attorney to sign the name of Borrower on any of the documents described in
Section 4.2 regardless of whether an Event of Default has occurred. The
appointment of Bank as Borrower's attorney in fact, and each and every one of
Bank's rights and powers, being coupled with an interest, is irrevocable until
all of the Obligations have been fully repaid and performed and Bank's
obligation to provide advances hereunder is terminated.
9.3 Accounts Collection.
Upon the occurrence and during the continuance of an
Event of Default, Bank may notify any Person owing funds to Borrower of Bank's
security interest in such funds and verify the amount of such Account. Borrower
shall collect all amounts owing to Borrower for Bank, receive in trust all
payments as Bank's trustee, and, if requested or required by Bank, immediately
deliver such payments to Bank in their original form as received from the
account debtor, with proper endorsements for deposit.
9.4 Bank Expenses.
If Borrower fails to pay any amounts or furnish any
required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Bank may do any or-all of the following: (a)
make payment of the same or any part thereof; (b) set up such reserves
23
<PAGE> 27
under the Committed Revolving Line as Bank deems necessary to protect Bank from
the exposure created by such failure; or (c) obtain and maintain insurance
policies of the type discussed in. Section 6.6 of this Agreement, and take any
action with respect to such policies as Bank deems prudent. Any amounts so paid
or deposited by Bank shall constitute Bank Expenses, shall be immediately due
and payable, and shall bear interest at the then applicable rate herein above
provided, and shall be secured by the Collateral. Any payments made by Bank
shall not constitute an agreement by Bank to make similar payments in the future
or a waiver by Bank of any Event of Default under this Agreement.
9.5 Bank's Liability for Collateral.
So long as Bank complies with reasonable banking
practices, Bank shall not in any way or manner be liable or responsible for: (a)
the safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the value
thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other person whomsoever. All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower.
9.6 Remedies Cumulative.
Bank's rights and remedies under this Agreement, the
Loan Documents, and all; other agreements shall be cumulative. Bank shall have
all other rights and remedies not expressly set forth herein as provided under
the Code, by law, or in equity. No exercise by Bank of one right or remedy shall
be deemed an election, and no waiver by Bank of any Event of Default on
Borrower's part shall be deemed a continuing waiver. No delay by Bank shall
constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be
effective unless made in a written document signed on behalf of Bank and then
shall be effective only in the specific instance and for the specific purpose
for which it was given.
9.7 Demand; Protest.
Borrower waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, notice of any
default, nonpayment at maturity, release, compromise, settlement, extension, or
renewal of accounts, documents, instruments, chattel paper and guarantees at.
any time held by Bank on which Borrower may in any way be liable.
10. NOTICES
Unless otherwise provided in this Agreement, all notices
or demands by any party relating to this Agreement or any other agreement
entered into in connection herewith shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by a
recognized overnight delivery service, by certified mail, postage prepaid,
return receipt requested, or by telefacsimile to Borrower or to Bank, as the
case may be, at its addresses set forth below:
<TABLE>
<S> <C>
If to Borrower: Sagent Technology, Inc.
2225 E. Bayshore Road, Suite 100
Palo Alto, CA 94303
Attn: Ken Gardner
FAX: (415) 833-6820
</TABLE>
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<PAGE> 28
<TABLE>
<S> <C>
If to Bank: Venture Banking Group
Three Palo Alto Square, Suite 150
Palo Alto, CA 94306
Attn: Jennifer Schellenberg
FAX: (415) 843-6969
</TABLE>
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
11. CHOICE OF LAW AND VENUE
The Loan Documents shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard to
principles of conflicts of law. Each of Borrower and Bank hereby submits to the
exclusive jurisdiction of the state and Federal courts located in the County of
Santa Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT F IT TO ENTER INTO THIS
AGREEMENT. EACH P REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH
ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
12. GENERAL PROVISIONS
12.1 Successors and Assigns.
This Agreement shall bind and inure to the benefit 6f
the respective successors and permitted assigns of each. of the parties;
provided however that neither this Agreement nor any rights hereunder may be
assigned by Borrower without Bank's prior written consent, which consent may be
granted or withheld in Bank's sole discretion. Bank shall have the right without
the consent of or notice to Borrower to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Bank's obligations,
rights and benefits hereunder.
12.2 Indemnification.
Borrower shall indemnify, defend, protect and hold
harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by the Loan Documents;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under the Loan Documents, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.
12.3 Time of Essence.
Time is of the essence for the performance of all
obligations set forth in this Agreement.
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<PAGE> 29
12.4 Severability of Provisions.
Each provision of this Agreement shall be severable from
every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
12.5 Amendments in Writing, Integration.
This Agreement cannot be amended or terminated except by
a writing signed by Borrower and Bank. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents.
12.6 Counterparts.
This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
12.7 Survival.
All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.
IN WITNESS WHEREOF, -the parties hereto have caused this Agreement to be
executed as of the date first above written.
SAGENT TECHNOLOGY, INC.
By: /s/ KENNETH C. GARDNER
----------------------------------
Title: President & CEO
--------------------------------
VENTURE BANKING GROUP, a division of
Cupertino National Bank
By: /s/ JENNIFER SCHELLENBERG
---------------------------------
Title: Account Officer
------------------------------
26
<PAGE> 30
EXHIBIT A
The Collateral shall consist of all right, title and interest of
Borrower in and to the following:
(a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
(b) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;
(c) All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;
(d) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as an
merchandise returned to or reclaimed by Borrower;
(e) All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, letters of credit,
certificates of deposit, instruments and chattel paper now owned or hereafter
acquired and Borrower's Books relating to the foregoing;
(f) All copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, now owned or hereafter acquired;
all trade secret rights, including all rights to unpatented inventions,
know-how, operating manuals, license rights and agreements and confidential
information, now owned or hereafter acquired; all mask work or similar rights
available for the protection of . semiconductor chips, now owned, or hereafter
acquired; all claims for damages by way of any past, present and future
infringement of any of the foregoing; and
(g) All Borrower's Books relating to the foregoing and any and all
claims, rights and interests in any of the above and all substitutions for,
additions and accessions to and proceeds thereof.
27
<PAGE> 31
EXHIBIT B
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.
TO: CENTRAL CLIENT SERVICE DIVISION DATE:
-------------------------------
FAX#: TIME:
---------------- -------------------------------
FROM: Sagent Technology, Inc.
------------------------------------------------------------------------
CLIENT NAME (BORROWER)
REQUESTED BY:
----------------------------------------------------------------
AUTHORIZED SIGNER'S NAME
AUTHORIZED SIGNATURE:
-------------------------------------------------------
PHONE NUMBER:
---------------------------------------------------------------
FROM ACCOUNT # TO ACCOUNT #
----------------- ----------------------------------
REQUESTED TRANSACTION REQUEST DOLLAR AMOUNT
PRINCIPAL INCREASE (ADVANCE) $
---------------------------
PRINCIPAL PAYMENT (ONLY) $
---------------------------
INTEREST PAYMENT (ONLY) $
---------------------------
PRINCIPAL AND INTEREST (PAYMENT) $
---------------------------
OTHER INSTRUCTIONS:
---------------------------------------------------------
- --------------------------------------------------------------------------------
All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct .and complete in all material respects
as of the date of the telephone request for and Advance confirmed by this
Borrowing Certificate; provided, -however, that those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date.
BANK USE ONLY
TELEPHONE REQUEST
The following person is authorized to request the loan payment transger/loan
advance on the advance designated account and is known to me.
- --------------------------------------- ---------------------------------
Authorized Requester Phone#
- --------------------------------------- ---------------------------------
Received By (Bank) Phone #
-----------------------------------
Authoreized Signature (Bank)
28
<PAGE> 32
EXHIBIT C-1
REVOLVING PROMISSORY NOTE
$2,000,000 Palo Alto, California
Date: July 16, 1997
SAGENT TECHNOLOGY, INC. ("Borrower"), for value received, hereby
promises to pay to the order of VENTURE BANKING GROUP, a division of Cupertino
National Bank ("Bank"), in lawful money of the United States of America,
pursuant to that certain Loan and Security Agreement dated as of July 16, 1997,
by and between Borrower and Bank (the "Loan Agreement"), (i) the principal
amount of $2,000,000 or, if lesser, (ii) the principal amount of all Advances
outstanding as of the maturity date hereof.
This Note is one of the Notes referred to in the Loan Agreement. All
terms defined in the Loan Agreement shall have the same definitions when used
herein, unless otherwise defined herein.
Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.
Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
Upon the occurrence of a default hereunder or an Event of Default under
the Loan Agreement, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Bank, be immediately collectible by or
on behalf of Bank pursuant to the Loan Agreement and applicable law.
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and-all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of the laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be binding
upon any successor to Borrower and shall extend to any holder hereof.
SAGENT TECHNOLOGY, INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
29
<PAGE> 33
EXHIBIT C-2
EQUIPMENT PROMISSORY NOTE
$1,000,000 Palo Alto, California
Date: July 16, 1997
SAGENT TECHNOLOGY, INC. ("Borrower"), for value received, hereby
promises to pay to the order of VENTURE BANKING GROUP, a division of Cupertino
National Bank ("Bank"), in lawful money of the United States of America,
pursuant to that certain Loan and Security Agreement dated as of July 16, 1997,
by and between Borrower and Bank (the "Loan Agreement'), (i) the principal
amount of $1,000,000 or, if lesser, 00 the principal amount of all Equipment
Advances (the "Advances") outstanding as of the maturity date hereof.
This Note is one of the Notes referred to in the Loan Agreement. All
terms defined in the Loan Agreement shall have the same definitions when used
herein, unless otherwise defined herein.
Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum. and payable on the
dates determined pursuant to the Loan Agreement.
Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be, recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
Upon the occurrence of a default hereunder or an Event of Default under
the Loan Agreement, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Bank, be immediately collectible by or
on behalf of Bank pursuant to the Loan Agreement and applicable law.
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of the laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be binding
upon any successor to Borrower and shall extend to any holder hereof.
SAGENT TECHNOLOGY, INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
30
<PAGE> 34
EXHIBIT D
BORROWING BASE CERTIFICATE
Borrower: Sagent Technology, Inc. Lender: Venture Banking Group
Commitment Amount: $2,000,000
- --------------------------------------------------------------------------------
<TABLE>
ACCOUNTS RECEIVABLE
<S> <C> <C>
1. Accounts Receivable Book Value as of __ $_________
2. Additions (please explain on reverse) $_________
3. TOTAL ACCOUNTS RECEIVABLE $_________
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4. Amounts over 90 days due $_________
5. Balance of 50% over 90 day accounts $_________
6. Concentration Limits $_________
7. Foreign Accounts $_________
8. Governmental Accounts $_________
9. Contra Accounts $_________
10. Promotion or Demo Accounts $_________
11. Intercompany/Employee Accounts $_________
12. Other (please explain on reverse) $_________
13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $_________
14. Eligible Accounts (#3 minus #13) $_________
15. LOAN VALUE OF ACCOUNTS (80% of #14) $_________
FOREIGN ACCOUNTS
16. Eligible Foreign Accounts Value as of $_________
17. LOAN VALUE OF FOREIGN ACCOUNTS (50% of #16) $_________
BALANCES
18. Maximum Loan Amount $_________
19. Total Funds Available [Lesser of #18 or (#15 plus #17)] $_________
20. Present balance owing on Line of Credit $_________
21. Outstanding under Sublimits ( ) $_________
22. RESERVE POSITION (#19 minus #20 and #21) $_________
</TABLE>
The undersigned represents and warrants- that the foregoing is true, complete
and correct, and that the information reflected in this Borrowing Base
Certificate complies with the representations and warranties set forth in the
Loan and Security Agreement between the undersigned and Venture Banking Group.
COMMENTS: BANK USE ONLY
SAGENT TECHNOLOGY, INC. Rec'd By:__________________
Auth. Signer
By:
------------------------------- Date:______________________
Authorized Signer Verified:__________________
Auth. Signer
Date:______________________
31
<PAGE> 35
EXHIBIT E
COMPLIANCE CERTIFICATE
TO: VENTURE BANKING GROUP
FROM: SAGENT TECHNOLOGY, INC.
The undersigned authorized officer of Sagent Technology, Inc. hereby
certifies that in accordance with the terms and conditions of the Loan
and-Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower
is in complete compliance for the period ending __________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer expressly acknowledges that no
borrowings may be requested by Borrower at any time or date of determination
that Borrower is not in compliance with any of the terms of the Agreement, and
that such compliance is determined not just at the date this certificate is
delivered.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.
<TABLE>
<CAPTION>
REPORTING COVENANT REQUIRED COMPLIES
------------------ -------- --------
<S> <C> <C> <C>
Monthly financial statements Monthly within 30 days Yes No
Annual (CPA Audited) FYE within 120 days Yes No
10-Q, 10-K and 8-K Within 5 days after filing with Yes No
SEC
A/R & A/P Agings Monthly within 30 days Yes No
A/R Audit Initial and Semi-Annual Yes No
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
<S> <C> <C> <C> <C>
Maintain on a Monthly Basis: Yes No
Minimum Quick, Cash __________(1) ____:1.0 Yes No
Coverage or Cash Flow
Minimum Tangible Net Worth $2,800,000(2) $________ Yes No
Maximum Debt/Tangible Net 1.75:10(3) ____:1.0 Yes No
Worth
Profitability: Quarterly __________(4) $________ Yes No
COMMENTS REGARDING EXCEPTIONS: See Attached.
</TABLE>
- ------------
1 Quick Ratio of > 1.75:1.0; or Cash Coverage Ratio of > 1.75:1.0; OR Cash
Flow Coverage Ratio of > 1.25:1.0.
2 Beginning September 30, 1997.
3 Waived for July, 1997 and August, 1997 upon confirmation of equity event
of > $3,000,000 and lead investor's participation.
4 Permitted losses not to exceed: $2,000,000 for quarter ending June 30,
1997; $i@00,000 for quarter ending September 30, 1997; and $950,000 for
quarter ending December 31, 1997. Borrower and Bank to establish
quarterly loss covenants for 1998 by March 15, 1998
COMMENTS REGARDING EXCEPTIONS: See Attached. BANK USE ONLY
Received by:
------------------
Sincerely, AUTHORIZED SIGNER
Date:
- --------------------------------- -------------------------
SIGNATURE
Verified:
---------------------
AUTHORIZED SIGNER
- --------------------------------
TITLE
Date:
- -------------------------------- -------------------------
DATE Compliance Status: Yes No
32
<PAGE> 36
EQUIPMENT PROMISSORY NOTE
$1,000,000 Palo Alto, California
Date: July 16, 1997
SAGENT TECHNOLOGY, INC. ("Borrower"), for value received, hereby
promises to pay to the order of VENTURE BANKING GROUP, a division of Cupertino
National Bank ("Bank"), in lawful money of the United States of America,
pursuant to that certain Loan and Security Agreement dated as of July 16, 1997,
by and between Borrower and Bank (the "Loan Agreement"), (i) the principal
amount of $1,00,000 or, if lesser, (ii) the principal amount of all Equipment
Advances (the "Advances") outstanding as of the maturity date hereof.
This Note is one of the Notes referred to in the Loan Agreement. All
terms defined in the Loan Agreement shall have the same definitions when used
herein, unless otherwise defined herein.
Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.
Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
Upon the occurrence of a default hereunder or an Event of Default under
the Loan Agreement, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Bank, be immediately collectible by or
on behalf of Bank pursuant to the Loan Agreement and applicable law.
Borrower-waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of the laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be binding
upon any successor to Borrower and shall extend to any holder hereof.
SAGENT TECHNOLOGY, INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
<PAGE> 37
REVOLVING PROMISSORY NOTE
$2,000,000 Palo Alto, California
Date: July 16, 1997
SAGENT TECHNOLOGY, INC. ("Borrower"), for value received, hereby
promises to pay to the order of VENTURE BANKING GROUP, a division of Cupertino
National Bank ("Bank"), in lawful money of the United States of America,
pursuant to that certain Loan and Security Agreement dated as of July 16, 1997,
by and between Borrower and Bank (the "Loan Agreement"), (i) the principal
amount of $2,000,000 or, if lesser, (ii) the principal amount of all Advances
outstanding as of the maturity date hereof.
This Note is one of the Notes referred to in the Loan Agreement. AR
terms defined in the Loan Agreement shall have the same definitions when used
herein, unless otherwise defined herein.
Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.
Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
Upon the occurrence of a default hereunder or an Event of Default under
the Loan Agreement, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Bank, be immediately collectible by or
on behalf of Bank pursuant to the Loan Agreement and applicable law.
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of the laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be binding
upon any successor to Borrower and shall extend to any holder hereof.
SAGENT TECHNOLOGY, INC.
By: /s/ KENNETH C. GARDNER
------------------------------------------
Printed Name: Kenneth C. Gardner
--------------------------------
Title: President and Chief Executive Officer
---------------------------------------
<PAGE> 38
AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Amendment to Loan and Security Agreement ("this Amendment") is
entered into as of July 31, 1997, by and between VENTURE BANKING GROUP, a
division of Cupertino National Bank ("Bank") and SAGENT TECHNOLOGY, INC.
("Borrower").
RECITALS
Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of July 16, 1997, (the "Agreement"). Borrower has requested
certain modification (s) to the Agreement. Bank has agreed to amend the
Agreement, all in accordance with the terms of this Amendment. This Amendment
sets forth the modified terms on which Bank will continue to advance credit to
Borrower, and Borrower will repay the amounts owing to Bank.
NOW, THEREFORE, the parties agree as follows:
1. The following sentence in Section 3.1(g) of the Agreement is hereby
amended to read follows:
(g) an audit of Borrower's Accounts shall be completed no later
than August 18, 1997, the results of which shall be satisfactory to Bank; and
2. The effectiveness of this Amendment is subject to the following
condition's precedent:
(a) Bank shall have received, in form and substance satisfactory
to Bank this Amendment;
(b) Bank shall have received, in form and substance satisfactory
to Bank, such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.
3. Unless otherwise defined, all capitalized terms In this Amendment
shall be as defined in the Agreement. Except as amended, the Agreement remains
in full force and effect.
4. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
SAGENT TECHNOLOGY, INC.
By: /s/ KATHLEEN OVALLE
-------------------------------------
Title: Corporation Controller
----------------------------------
VENTURE BANKING GROUP, a division of
Cupertino National Bank
By: /s/ JENNIFER SCHELLENBERG
-------------------------------------
Title: Account Officer
----------------------------------
1
<PAGE> 39
SCHEDULE OF PERMITTED LIENS
<TABLE>
<CAPTION>
UCC FILING NUMBER DATE OF FILING EXPIRATION DATE SECURED PARTY
- ----------------- -------------- --------------- -------------
<S> <C> <C> <C>
9524960130 9/5/95 9/5/2000 Lighthouse Capital
Partners, L.P.
9524960135 9/5/95 9/5/2000 Lighthouse Capital
Partners, L.P.
9524960068 1/5/95 1/5/2001 Lighthouse Capital
Partners, L.P.
9524960592 3/28/96 3/28/2001 Lighthouse Capital
Partners, L.P.
9524960508 5/17/96 5/17/2001 Lighthouse Capital
Partners, L.P.
9524960854 7/2/96 7/2/2001 Lighthouse Capital
Partners, L.P.
9524960069 10/22/96 10/22/2001 Lighthouse Capital
Partners, L.P.
9524960203 12/26/96 12/26/2001 Lighthouse Capital
Partners, L.P.
9524960189 2/13/96 2/13/2002 Lighthouse Capital
Partners, L.P.
9524960436 4/18/96 4/18/2002 Lighthouse Capital
Partners, L.P.
9524960400 5/22/96 5/2/2002 Lighthouse Capital
Partners, L.P.
</TABLE>
<PAGE> 40
DISBURSEMENT REQUEST AND AUTHORIZATION
Borrower: Sagent Technology, Inc. Bank: Venture Banking Group
LOAN TYPE. This is a Variable Rate, Revolving Line of Credit of a principal
amount up to $2,000,000 and an Equipment Line of up to $1,000,000.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for business.
SPECIFIC PURPOSE. The specific purpose of this loan is: Short-term working
capital and acquisition of equipment.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Bank's conditions for making the loan have been
satisfied. Please disburse the loan proceeds as follows:
<TABLE>
<CAPTION>
Revolving Line Equipment Line
-------------- --------------
<S> <C> <C>
Amount paid to Borrower directly: $____ $____
Undisbursed Funds $____ $____
Principal $____ $____
</TABLE>
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
<TABLE>
<S> <C>
$____
Prepaid Finance Charges Paid in Cash:
$6,000 Loan Fee
TBD Accounts Receivables Audit
Other Charges Paid in Cash: $____
$TBD UCC Search Fees
$TBD UCC Filing Fees
$TBD Patent Filing Fees
$TBD Trademark Filing Fees
$TBD Copyright Filing Fees
$3500 Outside Counsel Fees and Expenses
(Estimate)
Total Charges Paid in Cash $____
</TABLE>
AUTOMATIC PAYMENTS. Borrower hereby authorizes Bank automatically to deduct from
Borrower's account numbered __________ the amount of any loan payment. If the
funds in the account are insufficient to cover any payment, Bank shall not be
obligated to advance funds to cover the payment.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK. THIS
AUTHORIZATION IS DATED AS OF JULY 16,1997.
BORROWER:
SAGENT TECHNOLOGY, INC.
/s/ KENNETH C. GARDNER
- -----------------------------
Authorized Officer
<PAGE> 41
AGREEMENT TO PROVIDE INSURANCE
Grantor: Sagent Technology, Inc. Bank: Venture Banking Group
INSURANCE REQUIREMENTS. Sagent Technology, Inc. ("Grantor") understands
that insurance coverage is required in connection with the extending of a loan
or the providing of other financial accommodations to Grantor by Bank. These
requirements are set forth in the Loan Documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):
<TABLE>
<S> <C>
Collateral: All Inventory, Equipment and Fixtures
Type: All risks, including fire, theft and liability.
Amount: Full insurable value.
Basis: Replacement value.
Endorsements: Loss payable clause to Bank with stipulation that coverage
will not be canceled or diminished without a minimum of
twenty (20) days' prior written notice to Bank
</TABLE>
INSURANCE COMPANY. Grantor may obtain insurance from any insurance
company Grantor may choose that is reasonably acceptable to Bank. Grantor
understands that credit may not be denied solely because insurance was not
purchased through Bank.
FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Bank, on or
before closing, evidence of the required insurance as provided above, with an
effective date of July 16, 1997, or earlier. Grantor acknowledges and agrees
that if Grantor fails to provide any required insurance or fails to continue
such insurance in force, Bank may do so at Grantor's expense as provided in the
Loan and Security Agreement. The cost of such insurance, at the option of Bank,
shall be payable on demand or shall be added to the indebtedness as provided in
the security document. GRANTOR ACKNOWLEDGES THAT IF BANK SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN
THE COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE
ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral,
Grantor authorizes Bank to provide to any person (including any insurance agent
or company) all information Bank deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT LS DATED JULY 16,1997.
GRANTOR:
SAGENT TECHNOLOGY, INC.
/s/ KENNETH C. GARDNER
- ----------------------------
Authorized Officer
FOR BANK USE ONLY
INSUREANCE VERIFICATION
DATE:___________________________________ PHONE:_____________________________
AGENT'S NAME:___________________________________________________________________
INSUREANCE COMPANY:_____________________________________________________________
POLICY NUMBER:__________________________________________________________________
EFFECTIVE DATES:________________________________________________________________
COMMENTS:_______________________________________________________________________
<PAGE> 42
EQUIPMENT PROMISSORY NOTE
$1,000,0 00 Palo Alto, California
Date: July 16, 1997
SAGENT TECHNOLOGY, INC. ("Borrower"), for value received, hereby
promises to pay to the order of VENTURE BANKING GROUP, a division of Cupertino
National Bank ("Bank"), in lawful money of the United States of America,
pursuant to that certain Loan and Security Agreement dated as of July 16, 1997,
by and between Borrower and Bank (the "Loan Agreement"), (i) the principal
amount of $1,00,000 or, if lesser, (ii) the principal amount of all Equipment
Advances (the "Advances") outstanding as of the maturity date hereof.
This Note is one of the Notes referred to in the Loan Agreement. All
terms defined in the Loan Agreement shall have the same definitions when used
herein, unless otherwise defined herein.
Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.
Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
Upon the occurrence of a default hereunder or an Event of Default under
the Loan Agreement, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Bank, be immediately collectible by or
on behalf of Bank pursuant to the Loan Agreement and applicable law.
Borrower-waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of the laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be binding
upon any successor to Borrower and shall extend to any holder hereof.
SAGENT TECHNOLOGY, INC.
By: /s/ KENNETH C. GARDNER
------------------------------------
Printed Name: Kenneth C. Gardner
Title: President and Chief Executive
Officer
<PAGE> 43
REVOLVING PROMISSORY NOTE
$2,000,000 Palo Alto, California
Date: July 16,1997
SAGENT TECHNOLOGY, INC. ("Borrower"), for value received, hereby
promises to pay to the order of VENTURE BANKING GROUP, A division of Cupertino
National Bank ("Bank"), in lawful money of the United States of America,
pursuant to that certain Loan and Security Agreement dated as of July 16, 1097,
by and between Borrower and Bank (the "Loan Agreement"), (i) the principal
amount of $2,000,000 or, if lesser, (ii) the principal amount of all Advances
outstanding as of the maturity date hereof.
This Note is one of the Notes referred to in the Loan Agreement. All
terms defined in the Loan Agreement shall have the same definitions when used
herein, unless otherwise defined herein.
Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.
Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
Upon the occurrence of a default hereunder or an Event of Default under
the Loan Agreement, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Bank, be. immediately collectible by or
on behalf of Bank pursuant to the Loan Agreement and applicable law.
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of the laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be binding
upon any success or to Borrower and shall extend to any holder hereof.
SAGENT TECHNOLOGY, INC.
By: /s/ KENNETH C. GARDNER
-------------------------------------
Printed Name: Kenneth C. Gardner
Title: President and Chief Executive
Officer
<PAGE> 44
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
<TABLE>
<S> <C>
Corporation: SAGENT TECHNOLOGY, INC., a California corporation
Number of Shares: See below
Class of Stock: See below
Initial Exercise Price: See below
Issue Date: July 16, 1997
Expiration Date: The later of (i) July 16, 2007 or (ii) five
(5) years after the closing of the Company's
initial public offering of its Common Stock
effected pursuant to a Registration Statement on
Form S-1 (or its successor) filed under the
Securities Act of 1933, as amended (the "Act").
</TABLE>
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, VENTURE BANKING GROUP, a division of
Cupertino National Bank ("Holder") is entitled to purchase the number of fully
paid and nonassessable shares of the class of securities (the "Shares") of the
corporation (the "Company") at the initial exercise price per Share (the
"Warrant Price") all as set forth herein and as adjusted pursuant to Article 2
of this Warrant, subject to the provisions and upon the terms and conditions set
forth of this Warrant. The Warrant Price shall be equal to the price per share
at which the Company after the date hereof first sells its equity securities in
an offering in which the gross proceeds are at least Three Million Dollars
($3,000,000), and the Shares shall be the type of securities sold in such
offering; provided that if such offering does not take place on or before
September 30, 1997, the Warrant Price shall be $2.50, and the Shares shall be
the Company's Series C Preferred Stock. The number of Shares shall be equal to
the quotient derived by dividing Thirty Thousand Dollars ($30,000) by the
Warrant Price.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also
deliver to the Company a check for the aggregate Warrant Price for the Shares
being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as
specified in Section 1.1, Holder may from time to time convert this Warrant, in
whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant Section 1.4.
1
<PAGE> 45
1.3 Omitted.
1.4 Fair Market Value. If the Shares are traded in a public
market, the fair market value of the Shares shall be the dosing price of the
Shares (or the closing price of the Company's stock into which the Shares are
convertible) reported for the business day immediately before Holder delivers
its Notice of Exercise to the Company. If the Shares are not traded in a public
market, the Board of Directors of the Company shall determine fair market value
in its reasonable good faith judgment. The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a reputable
investment banking firm to undertake such valuation. If the valuation of such
investment banking firm is greater than that determined by the Board of
Directors, then all fees and expenses of such investment banking firm shall be
paid by the Company. An all other circumstances, such fees and expenses shall be
paid by Holder.
1.5 Delivery of Certificate and New Warrant. Promptly after
Holder exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.6 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at Holder's expense shall execute and deliver, in lieu of this
Warrant, a new warrant of like tenor.
1.7 Repurchase on Sale, Merger, or Consolidation of the Company.
1.7.1. "Acquisition". For the purpose of this Warrant,
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
1.7.2. Assumption of Warrant. Upon the dosing of any
Acquisition the successor entity shall assume the obligations of this Warrant,
and this Warrant shall be exercisable for the same securities, cash, and
property as would be payable for the Shares issuable upon exercise of the
unexercised portion of this Warrant as if such Shares were outstanding on the
record date for the Acquisition and subsequent closing. The Warrant Price shall
be adjusted accordingly.
1.7.3. Purchase Right. Notwithstanding the foregoing, at
the election of Holder, the Company shall purchase the unexercised portion of
this Warrant for cash upon the closing of any Acquisition for an amount equal to
(a) the fair market value of any. consideration that would have been received by
Holder in consideration of the Shares had Holder exercised the unexercised
portion of this Warrant immediately before the record date for determining the
shareholders entitled to participate in the proceeds of the Acquisition, less
(b) the aggregate Warrant Price of the Shares, but in no event less than zero.
2
<PAGE> 46
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays
a dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired,
Holder shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the Shares
of record as of the date the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series as
the Shares to common stock pursuant to the terms of the Company's Articles of
Incorporation upon the dosing of a registered public offering of the Company's
common stock. The Company or its successor shall promptly issue to Holder a new
Warrant for such new securities or other property. The new Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 2.2
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares
are combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased.
2.4 Adjustments; for Diluting Issuances. The Warrant Price and
the number of Shares issuable upon exercise of this Warrant or, if the Shares
are Preferred Stock, the number of shares of common stock issuable upon
conversion of the Shares, shall be subject to adjustment, from time to time in
the manner set forth on Exhibit A in the event of Diluting Issuances (as defined
on Exhibit A).
2.5 No Impairment. The Company shall not, by amendment of its
Articles of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Article 2 and in taking all such action as may be necessary or appropriate
to protect Holder's rights under this Article against impairment. If the Company
takes any action affecting the Shares or its common stock other than as
described above that adversely affects Holder's rights under this Warrant, the
Warrant Price shall be adjusted downward and the number of Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Warrant Price of this Warrant is unchanged.
3
<PAGE> 47
2.6 Fractional Shares. No fractional Shares shall be issuable
upon exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder amount computed by
multiplying the fractional interest by the fair market value of a full Share.
2.7 Certificate as to Adjustments. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate of its Chief Financial Officer
setting forth such adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a certificate setting
forth the Warrant Price in effect upon the date thereof and the series of
adjustments leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents
and warrants to the Holder as follows:
All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any, issuable
upon conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any hens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 Notice of Certain Events. If the Company proposes at any time
(a) to declare any dividend or distribution upon its common stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of common
stock; (d) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company's
securities for cash, then, in connection with each such event, the Company shall
give Holder (1) at least 20 days prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of
4
<PAGE> 48
recognized standing and (c) within forty-five (45) days after the end of each of
the first three quarters of each fiscal year, the Company's quarterly, unaudited
financial statements.
3.4 Registration Under Securities Act of 1933, as amended. The
Company agrees that the Shares or, if the Shares are convertible into common
stock of the Company, such common stock, shall be subject to the registration
rights set forth on Exhibit B, if attached.
ARTICLE 4. MISCELLANEOUS.
4.1 Term; Notice of Expiration. This Warrant is exercisable, in
whole or in part, at any time and from time to time on or before the Expiration
Date set forth above. The Company shall give Holder written notice of Holder's
right to exercise this Warrant in the form attached as Appendix 2 not more than
90 days and not less than 30 days before the Expiration Date. If the notice is
not so given, the Expiration Date shall automatically be extended until 30 days
after the date the Company delivers the notice to Holder.
42 Legends. This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO
RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO. THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and
the Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holder's notice of
proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.2,
Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) by giving the Company notice of the
portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).
Unless the Company is filing financial information with the SEC pursuant to the
Securities Exchange
5
<PAGE> 49
Act of 1934, the Company shall have the right to refuse to transfer any portion
of this Warrant to any person who directly competes with the Company.
4.5 Notices. All notices and other communications from the
Company to the Holder, or vice versa, shall be deemed delivered and effective
when given personally or mailed by first-class registered or certified mail,
postage prepaid, at such address as may have been furnished to the Company or
the Holder, as the case may be, in writing by the Company or such holder from
time to time.
4.6 Waiver. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.
4.7 Attorneys Fees. In the event of any dispute between the
parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party all
costs incurred in such dispute, including reasonable attorneys' fees.
4.8 Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of California, without giving
effect to its principles regarding conflicts of law.
"COMPANY"
SAGENT TECHNOLOGY, INC.
By /s/ Kenneth C. Gardner
------------------------------------------------
Name Kenneth C. Gardner
----------------------------------------------
(Print)
Title: Chairman of the Board, President, or
Vice President
By /s/ Kathleen Ovalle
------------------------------------------------
Name Kathleen Ovalle
----------------------------------------------
(Print)
Title: Chief Financial Officer, Secretary
Assistant Treasurer, or Assistant Secretary
6
<PAGE> 50
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ___ shares of the Series __
Preferred Stock of _________ pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in the Warrant. This conversion is exercised with
respect to ______ of the Shares covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates, representing said shares
in the name of the undersigned or in such other name as is specified below:
--------------------------
(Name)
--------------------------
--------------------------
(Address)
3. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
----------------------------------------
(Signature)
- --------------------------
(Date
7
<PAGE> 51
APPENDIX 2
Notice that Warrant Is About to Expire
VENTURE BANKING GROUP
Three Palo Alto Square, Suite 150
Palo Alto, CA 94306
Attn: Chief Financial Officer
Dear:_______________
This is to advise you that the Warrant issued to you described below
will expire on ___________, 19__.
Issuer:
Issue Date: July 16, 1997
Class of Security Issuable: See Warrant
Exercise Price per Share: See Warrant
Number of Shares Issuable: See Warrant
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
----------------------------------------
(Name of Issuer)
By
--------------------------------------
Its
-------------------------------------
8
<PAGE> 52
EXHIBIT A
Anti-Dilution Provisions
In the event of the issuance (a "Diluting Issuance") by
the Company, after the Issue Date of the Warrant, of securities at a price per
share less than the Warrant Price, then the number of shares of common stock
issuable upon conversion of the Shares shall be adjusted in accordance with
those provisions (the "Provisions") of the Company's Articles of Incorporation
which apply to Diluting Issuances.
The Company agrees that the Provisions, as in effect on
the Issue Date, shall be deemed to remain in full force and effect during the
term of the Warrant notwithstanding any subsequent amendment, waiver or
termination thereof by the Company's shareholders.
Under no circumstances shall the aggregate Warrant Price
payable by the Holder upon exercise of the Warrant increase as a result of any
adjustment arising from a Diluting Issuance.
9
<PAGE> 53
EXHIBIT B
Registration Rights
The Shares (if common stock), or the common stock issuable
upon conversion of the Shares, shall be deemed "registrable securities" or
otherwise entitled to "piggy back" registration rights in accordance with the
terms of the following agreement (the "Agreement") between the Company and its
investor(s): FOURTH AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT dated as
of June 16, 1997, by and among the Company and the investors party thereto.
The Company agrees that no amendments will be made to the
Agreement which would have an adverse impact on Holder's registration rights
thereunder without the consent of Holder. By acceptance of the Warrant to which
this Exhibit B is attached, Holder shall be deemed to be a party to the
Agreement.
10
<PAGE> 54
AGREEMENT TO PROVIDE INSURANCE
GRANTOR: Sagent Technology, Inc. BANK: Venture Banking Group
INSURANCE REQUIREMENTS. Sagent Technology, Inc. ("Grantor") understands
that insurance coverage is required in connection with the extending of a loan
or the providing of other financial accommodations to Grantor by Bank. These
requirements are set forth in the Loan Documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):
<TABLE>
<S> <C>
Collateral: All Inventory, Equipment and Fixtures.
Type: All risks, including fire, theft and
liability.
Amount: Full insurable value.
Basis: Replacement value.
Endorsements: Loss payable clause to Bank with stipulation
that coverage will not be canceled or
diminished without a minimum of twenty (20)
days' prior written notice to Bank.
</TABLE>
INSURANCE COMPANY. Grantor may obtain insurance from any insurance
company Grantor may choose that is reasonably acceptable to Bank., Grantor
understands that credit may not be denied solely because insurance was not
purchased through Bank.
FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Bank, on or
before closing, evidence of the required insurance as provided above, with an
effective date of July 16, 1997, or earlier. Grantor acknowledges and agrees
that if Grantor fails to provide any required insurance or fails to continue
such insurance in force, Bank may do so at Grantor's expense as provided in the
Loan and Security Agreement. The cost of such insurance, at the option of Bank,
shall be payable on demand or shall be added to the indebtedness as provided in
the security document.
GRANTOR ACKNOWLEDGES THAT. IF BANK SO PURCHASES ANY SUCH INSURANCE, THE
INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE TO THE
COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN THE
COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY
PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral,
Grantor authorizes Bank to provide to any person (including any insurance agent
or company) all information Bank deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY
16,1997.
GRANTOR:
Sagent Technology, Inc.
/s/ Kenneth C. Gardner
- ------------------------------
Authorized Officer
FOR BANK USE ONLY
INSUREANCE VERIFICATION
DATE:___________________________________ PHONE:_____________________________
AGENT'S NAME:___________________________________________________________________
INSUREANCE COMPANY:_____________________________________________________________
POLICY NUMBER:__________________________________________________________________
EFFECTIVE DATES:________________________________________________________________
COMMENTS:_______________________________________________________________________
<PAGE> 55
DISBURSEMENT REQUEST AND AUTHORIZATION
Borrower: Sagent Technology, Inc. Bank: Venture Banking Group
LOAN TYPE. This is a Variable Rate, Revolving Line of Credit of a principal
amount up to $2,000,000 and an Equipment Line of up to $1,000,000.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for business.
SPECIFIC PURPOSE. The specific purpose of this loan is: Short-term working
capital and acquisition of equipment.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Bank's conditions for making the loan have been
satisfied. Please disburse the loan proceeds as follows:
<TABLE>
<CAPTION>
Revolving Line Equipment Line
-------------- --------------
<S> <C> <C>
Amount paid to $____ $____
Borrower directly:
Undisbursed Funds
$____ $____
Principal $____ $____
</TABLE>
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
<TABLE>
<S> <C>
$____
Prepaid Finance Charges Paid in Cash:
$6,000 Loan Fee
$TBD Accounts Receivables Audit
Other Charges Paid in Cash: $____
$TBD UCC Search Fees
$TBD UCC Filing Fees
$TBD Patent Filing Fees
$TBD Trademark Filing Fees
$TBD Copyright Filing Fees
$3,500 Outside Counsel Fees and Expenses
(Estimate)
Total Charges Paid in Cash $____
</TABLE>
AUTOMATIC PAYMENTS. Borrower hereby authorizes Bank automatically to deduct from
Borrower's account numbered 3103056 the amount of any loan payment. If the funds
in the account are insufficient to cover any payment, Bank shall not be
obligated to advance funds to cover the payment.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK. THIS
AUTHORIZATION IS DATED AS OF JULY 16,1997.
BORROWER:
SAGENT TECHNOLOGY, INC
/s/ KENNETH C. GARDNER
- ----------------------------
Authorized Officer
<PAGE> 56
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement, dated as of
September 21, 1998, (the "Amendment"), is entered into by and between SAGENT
TECHNOLOGY, INC. ("Borrower") and VENTURE BANKING GROUP, A DIVISION OF CUPERTINO
NATIONAL BANK ("Bank"). Capitalized terms used herein without definition shall
have the same meanings as is given to them in the Agreement (defined below).
RECITALS
A. The Borrower and the Bank have entered into that certain Amended and
Restated Loan and Security Agreement dated as of July 14, 1998, (as amended or
modified from time to time, the "Agreement") pursuant to which the Bank has
agreed to extend and make available to the Borrower certain advances of money.
B. The Borrower has requested certain modification(s) to the Agreement
and desires that the Bank amend the Agreement upon the terms and conditions more
fully set forth herein.
C. Subject to the representations and warranties of the Borrower herein
and upon the terms and conditions set forth in this Amendment, the Bank is
willing to amend the Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and intending
to be legally bound, the parties hereto agree as follows:
SECTION 1. THE BORROWER'S REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants that:
(a) the execution, delivery, and performance of the Loan
Documents are within Borrower's powers, have been duly authorized, and are not
in conflict with nor constitute a breach of any provision contained in
Borrower's Amended and Restated Articles of Incorporation or Bylaws, nor will
they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default
under any agreement to which it is a party or by which it is bound, which
default could have a Material Adverse Effect; and
(b) immediately before and immediately after giving effect to
this Amendment, no event shall have occurred and be continuing which constitutes
an Event of Default that has not been disclosed to Bank.
SECTION 2. AMENDMENTS TO THE LOAN AND SECURITY AGREEMENT.
2.1 Section 1, entitled Definitions and Construction, is hereby
amended by deleting "Committed Equipment Line" and replacing it with the
following:
"Committed Equipment Line" means Two Million Eight Hundred
Thousand Dollars ($2,800,000).
2.2 Section 2.1.3, entitled Equipment Advances is hereby amended
by deleting the first two sentences of (b) and replacing them with the
following:
"It is understood by Bank and Borrower that, as of September 21,
1998, Equipment Advances of One Million Five Hundred Ninety Nine Thousand Nine
Hundred Ninety Eight Dollars have been made under the Committed Equipment Line.
Of such amount, Equipment Advances of (i) Four
1
<PAGE> 57
Hundred Eighty Four Thousand Twenty Five Dollars and 05/100 ($484,025.05) and
(ii) Four Hundred Three Thousand Three Hundred Sixty Five Dollars and 10/100
($403,365.10) were previously termed out on April 15, 1998 and August 5, 1998,
respectively and are being paid to Bank by Borrower in thirty-six (36) equal
monthly installments of principal plus accrued interest (at the rate specified
in Section 2.3(a)).
2.3 Section 6.10 entitled Tangible Net Worth, is hereby deleted
and amended to read in its entirety as follows:
6.10 Tangible Net Worth. Borrower shall maintain, as of the last
day of each calendar month, a Tangible Net Worth of not less than Three Million
Five Hundred Thousand Dollars ($3,500,000).
2.4 Section 6.11, entitled Profitability, is hereby deleted and
amended to read in its entirety as follows:
6.11 Profitability. Borrower may incur losses not to exceed: (i)
Two Million Five Hundred Thousand Dollars ($2,500,000) for the fiscal quarter
ending September 30, 1998; (ii) One Million Three Hundred Thousand Dollars
($1,300,000) for the fiscal quarter ending December 31, 1998; (iii) Five Hundred
Thousand Dollars ($500,000) for the fiscal quarter ending March 31, 1999; and
(iv) profitable on a Net Profit After Tax Basis for the fiscal quarter ending
June 30, 1999 and for each fiscal quarter ending thereafter.
2.5 Exhibit E to Agreement is replaced by Exhibit E hereto.
2.6 Compliance Certificate is replaced by Exhibit F hereto.
SECTION 3. LIMITATION. The amendments and waivers set forth in this
Amendment shall be limited precisely as written and shall not be deemed (a) to
be a modification of any other term or condition of the Agreement or of any
other instrument or agreement referred to therein or to prejudice any right or
remedy which the Bank may now have or may have in the future under or in
connection with the Agreement or any instrument or agreement referred to
therein; or (b) to be a consent to any future amendment or waiver to any
instrument or agreement the execution and delivery of which is consented to
hereby, or to any waiver of any of the provisions thereof. Except as expressly
amended hereby, the Agreement shall continue in full force and effect.
SECTION 4. EFFECTIVENESS. This Amendment shall become effective upon:
(1) The execution and delivery of a copy hereof by Borrower to
the Bank;
(2) The execution and delivery of a certificate of the Secretary
of Borrower with respect to incumbency and resolutions authorizing the execution
and delivery of this Amendment;
(3) The execution and delivery of a revised Term Loan Note;
(4) The payment of the amendment fee in the amount of Two
Thousand Four Hundred Dollars ($2,400) by Borrower to the Bank;
(5) The execution and delivery of a Warrant;
(6) Bank shall have received, in form and substance satisfactory
to Bank, such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.
SECTION 5. RELEASE AND WAIVER. BORROWER HEREBY REPRESENTS AND WARRANTS
TO THE BANK THAT IT HAS NO KNOWLEDGE OF ANY FACTS THAT WOULD
2
<PAGE> 58
SUPPORT A CLAIM, COUNTERCLAIM, DEFENSE OR RIGHT OF SET-OFF, AND HEREBY RELEASES
BANK FROM ALL LIABILITY ARISING UNDER OR WITH RESPECT TO AND WAIVES ANY AND ALL
CLAIMS, COUNTERCLAIMS, DEFENSES AND RIGHTS OF SET-OFF, AT LAW OR IN EQUITY, THAT
BORROWER MAY HAVE AGAINST BANK EXISTING AS OF THE DATE OF THIS AMENDMENT ARISING
UNDER OR RELATED TO THIS AMENDMENT, THE AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO THE LOANS CONTEMPLATED HEREBY OR THEREBY OR TO ANY ACT OR
OMISSION TO ACT BY THE BANK WITH RESPECT HERETO OR THERETO.
SECTION 6. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, and by different parties hereto in separate counterparts, with the
same effect as if the signatures to each such counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
BORROWER SAGENT TECHNOLOGY, INC.
By: /s/ Virginia Walker
-----------------------------------------
Title: Executive V.P., CFO
--------------------------------------
BANK VENTURE BANKING GROUP, a division of
Cupertino National Bank
By: /s/ J. Schellenberg
-----------------------------------------
Title: AVP
--------------------------------------
3
<PAGE> 59
EXHIBIT E
Term Loan Note
$2,800,000 Palo Alto, California
September 21, 1998
SAGENT TECHNOLOGY, INC. ("Borrower"), for value received, hereby
promises to pay to the order of Venture Banking Group, a division of Cupertino
National Bank ("Bank"), in lawful money of the United States of America,
pursuant to that certain Amended and Restated Loan and Security Agreement dated
as of July 14, 1998, as amended or modified from time to time, by and between
Borrower and Bank (the "Loan Agreement"), (i) the principal amount of $2,800,000
or, if lesser, (ii) the principal amount of all Equipment Advances outstanding
as of the maturity date hereof.
This Note replaces and supersedes the Note dated May 7, 1998. This Note
is referred to in the First Amendment to the Loan Agreement. All terms defined
in the Loan Agreement shall have the same definitions when used herein, unless
otherwise defined herein.
Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.
Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to and stated maturity upon the terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
Upon the occurrence of a default hereunder or any Event of Default under
the Loan Agreement, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Bank, be immediately collectible by or
on behalf of Bank pursuant to the Loan Agreement and applicable law.
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of the laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be binding
upon any successor to Borrower and shall extend to any holder hereof.
SAGENT TECHNOLOGY, INC.
By: /s/ Virginia Walker
---------------------------------------
Printed Name: VIRGINIA WALKER
-----------------------------
Title: EXECUTIVE V.P. C.F.O.
------------------------------------
<PAGE> 60
EXHIBIT F
COMPLIANCE CERTIFICATE
TO: Venture Banking Group
FROM: Sagent Technology, Inc.
The undersigned authorized officer of Sagent Technology, Inc. hereby
certifies that in accordance with the terms and conditions of the Amended and
Restated Loan and Security Agreement between Borrower and Bank (the
"Agreement"), (i) Borrower is in complete compliance for the period ending
____________________ with all required covenants except as noted below and (ii)
all representations and warranties of Borrower stated in the Agreement are true
and correct in all material respects as of the date hereof. Attached herewith
are the required documents supporting the above certification. The Officer
further certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies"
column.
<TABLE>
<CAPTION>
REPORTING COVENANT REQUIRED COMPLIES
- ------------------ -------- --------
<S> <C> <C>
Monthly financial statements Monthly within 15 days Yes No
Annual CPA Audited FYE within 90 days Yes No
10-Q, 10-K and 8-K Within 5 days after filing with SEC Yes No
A/R & A/P Agings; Borrowing Base Cert. Monthly within 15 days* Yes No
A/R Audit Semi-Annual Yes No
</TABLE>
*Only due prior to initial Rev. Line Advance or while there is line usage or
Letter of Credit issued.
<TABLE>
<CAPTION>
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
- ------------------ -------- ------ --------
<S> <C> <C> <C>
Maintain on a Monthly Basis:
Minimum Quick Ratio, Cash Coverage or Cash
Flow (1) :1.0 Yes No
---------- ---------
Minimum Tangible Net Worth $3,500,000 $ Yes No
---------- ---------
Maximum Debt/Tangible Net Worth 1.75:1.0 :1.0 Yes No
---------- ---------
Profitability: Quarterly $ (2) $ Yes No
---------- ---------
</TABLE>
(1) Quick Ratio of > 1.75:1.0; or Cash Coverage Ratio of > 1.75:1.0; or Cash
Flow Coverage Ratio of > 1.25:1.0.
(2) Permitted losses not to exceed: $2,500,000 for quarter ending September
30, 1998; $1,300,000 for quarter ending December 31, 1998; $500,000 for
quarter ending March 31, 1999; and Profitable on a Net Profit After Tax
basis for quarter ending June 30, 1999 and quarterly thereafter.
Comments Regarding
Exceptions: See Attached. BANK USE ONLY
Received by:
-----------------------
Sincerely, AUTHORIZED SIGNER
Date:
- -------------------------------- -----------------------------
SIGNATURE
Verified:
-------------------------
AUTHORIZED SIGNER
- --------------------------------
TITLE
Date:
- -------------------------------- ------------------------------
DATE Compliance Status: Yes No
<PAGE> 1
EXHIBIT 10.9
STANDARD OFFICE LEASE-GROSS
1. BASIC LEASE PROVISIONS ("Basic Lease Provisions")
1.1 Parties. This Lease, dated, for reference purposes only JUNE 1,
1998, is made by and between ASSET GROWTH PARTNERS, LTD. (herein called
"Lessor") and SAGENT TECHNOLOGY, INC. doing business under the name of N/A
(herein called "Lessee").
1.2 Premises. Suite Number(s) 300 on the THIRD floor(s), consisting of
approximately 34,244 rentable square feet, more or less, as defined in paragraph
2 and as shown on Exhibit "A" hereto (the "Premises").
1.3 Building. Commonly described as being located at 800 W. EL CAMINO
REAL in the City of MOUNTAIN VIEW, County of SANTA CLARA State of CALIFORNIA as
more particularly described in Exhibit A hereto, and as defined in paragraph 2.
1.4 Use. GENERAL OFFICE subject to paragraph 6.
1.5 Term. FIVE (5) YEARS commencing upon substantial completion of
tenant improvements, but in no event later than OCTOBER 1, 1998 ("Commencement
Date") and ending SIXTY (60) MONTHS thereafter as defined in paragraph 3.
1.6 Base Rent. $3.40 PER RENTABLE SQUARE FOOT per month ($116,429.60),
payable on the FIRST day of each month, per paragraph 4.1.
1.7 Base Rent Increase. On THE FIRST ANNIVERSARY OF THE COMMENCEMENT
DATE, AND ANNUALLY THEREAFTER, Base Rent payable under paragraph 1.6 above shall
be adjusted as provided IN THE ADDENDUM, PARAGRAPH 1.
1.8 First Month's Rent Paid September 8 1998. ONE HUNDRED SIXTEEN
THOUSAND FOUR HUNDRED TWENTY NINE AND 60/100 ($116,429.60) REPRESENTING THE
FIRST MONTH OF BASE RENT.
1.9 Security Deposit. FOUR HUNDRED SIXTY FIVE THOUSAND SEVEN HUNDRED
EIGHTEEN AND 40/100 DOLLARS ($465,718.40) AS DEFINED IN PARAGRAPH 2 OF THE
ADDENDUM AND PARAGRAPH 5 HEREIN.
1.10 Lessee's Share of Operating Expense Increase. 29% as defined in
paragraph 4.2. (34,244 square feet of the 117,321 square foot building.)
2. PREMISES, PARKING AND COMMON AREAS.
2.1 Premises. The Premises are a portion of a building, herein sometimes
referred to as the "Building" identified in paragraph 1.3 of the Basic Lease
Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as the "Office
Building Project". Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein,
the real property referred to in the Basic Lease Provisions, paragraph 1.2 as
the "Premises," including rights to the Common Areas as hereinafter specified.
2.2 Vehicle Parking. So long as Lessee is not in default, and subject to
the rules and regulations attached hereto, and as established by Lessor from
time to time, Lessee shall be entitled to THE NON-EXCLUSIVE use OF 116
UNDERGROUND RESERVED SPACES AND ANY ADDITIONAL SURFACE SPACES NOT TO EXCEED A
TOTAL OF 3.4 TOTAL SPACES PER 1,000 SQUARE FEET OF PREMISES in the Office
Building Project.
2.2.1 If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.2.2 The monthly parking rate per parking space will be $ N/A
per month at the commencement of the term of this Lease, and is subject to
change upon five (5) days prior written notice to Lessee. Monthly parking fees
shall be payable one month in advance prior to the first day of each calendar
month.
2.3 Common Areas-Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Office Building Project that are provided and designated by the Lessor
from time to time for the general non-exclusive use of Lessor, Lessee and of
other lessees of the Office Building Project and their respective employees,
suppliers, shippers, customers and invitees, including but not limited to common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, escalators, parking areas to the extent not otherwise prohibited by
this Lease, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, ramps, driveways, landscaped areas and decorative walls.
2.4 Common Areas-Rules and Regulations. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit B with respect
to the Office Building Project and Common Areas, and to cause its employees,
suppliers, shippers, customers, and invitees to so abide and conform. Lessor or
such other person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
modify, amend and enforce said rules and regulations. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by
other lessees, their agents, employees and invitees of the Office Building
Project.
2.5 Common Areas-Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Building interior and exterior and
Common Areas, including, without limitation, changes in the location, size,
shape number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, decorative walls, landscaped areas and walkways;
provided, however, Lessor shall at all times provide the parking facilities
required by applicable law;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land and improvements outside the boundaries
of the Office Building Project to be a part of the Common Areas, provided that
such other land and improvements have a reasonable and functional relationship
Page 1
<PAGE> 2
to the Office Building Project;
(d) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or any
portion thereof;
(e) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Office Building Project as Lessor
may, in the exercise of sound business judgement deem to be appropriate.
3. TERM.
3.1 Term. The term and Commencement Date of this Lease shall be as
specified in paragraph 1.5 of the Basic Lease Provisions.
3.2 Delay in Possession. Notwithstanding said Commencement Date, if for
any reason Lessor cannot deliver possession of the Premises to Lessee on said
date and subject to paragraph 3.2.2, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Lessee hereunder or extend the term hereof; but, in such
case, Lessee shall not be obligated to pay rent or perform any other obligation
of Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the Premises is tendered to Lessee, as
hereinafter defined; provided, however, that if Lessor shall not have delivered
possession of the Premises within ONE HUNDRED TWENTY (120) DAYS following said
OCTOBER 1, 1998 COMMENCEMENT DATE, Lessee may, at Lessee's option, by written
notice to Lessor within ten (10) days thereafter, cancel this Lease, in which
event the parties shall be discharged from all obligations hereunder; provided,
however, that, as to Lessee's obligations, Lessee first reimburses Lessor for
all costs incurred for Non-Standard Improvements and, as to Lessor's
obligations, Lessor shall return any money previously deposited by Lessee (less
any offsets due Lessor for Non-Standard Improvement); and provided further, that
if such written notice by Lessee is not received by Lessor within said ten (10)
day period, Lessee's right to cancel this Lease hereunder shall terminate and be
of no further force or effect. SEE FIRST ADDENDUM, PARAGRAPH 3 AND PARAGRAPH 4.
3.2.1 Possession Tendered-Defined. Possession of the Premises
shall be deemed tendered to Lessee ("Tender of Possession") when (1) the
improvements to be provided by Lessor under this Lease are substantially
completed, (2) the Building utilities are ready for use in the Premises, (3)
Lessee has reasonable access to the Premises, and (4) ten (10) days shall have
expired following advance written notice to Lessee of the occurrence of the
matters described in (1), (2) and (3), above of this paragraph 3.2.1.
3.2.2 Delays Caused by Lessee. There shall be no abatement of
rent, and the one hundred twenty (120) day period following the Commencement
Date before which Lessee's right to cancel this Lease accrues under paragraph
3.2, shall be deemed extended to the extent of any delays caused by acts or
omissions of Lessee, Lessee's agents, employees and contractors.
3.3 Early Possession. If Lessee occupies the Premises prior to said
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Lessee shall
pay rent for such occupancy, EXCEPT AS DEFINED IN THE FIRST ADDENDUM, PARAGRAPH
1.
3.4 Uncertain Commencement. In the event commencement of the Lease term
is defined as the completion of the improvements, Lessee and Lessor shall
execute an amendment to this Lease establishing the date of Tender of Possession
(as defined in paragraph 3.2.1) or the actual taking of possession by Lessee,
whichever first occurs, as the Commencement Date.
4. RENT.
4.1 Base Rent. Subject to adjustment as hereinafter provided in
paragraph 1 OF THE FIRST ADDENDUM, and except as may be otherwise expressly
provided in this Lease, Lessee shall pay to Lessor the Base Rent for the
Premises set forth in paragraph 1.6 of the Basic Lease Provisions, without
offset or deduction. Lessee shall pay Lessor upon execution hereof the advance
Base Rent described in paragraph 1.8 of the Basic Lease Provisions. Rent for any
period during the term hereof which is for less than one month shall be prorated
based upon the actual number of days of the calendar month involved. Rent shall
be payable in lawful money of the United States to Lessor at the address slated
herein or to such other persons or at such other places as Lessor may designate
in writing. IF THE FIRST MONTH IS LESS THAN ONE MONTH, THE SECOND MONTH'S RENT
DUE SHALL BE ADJUSTED ACCORDINGLY.
4.2 Operating Expense Increase. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share, as hereinafter
defined, of the amount by which all Operating Expenses, as hereinafter defined,
for each Comparison Year exceeds the amount of all Operating Expenses for the
Base Year, such excess being hereinafter referred to as the "Operating Expense
Increase," in accordance with the following provisions: (SEE FIRST ADDENDUM,
PARAGRAPH 5).
(a) "Lessee's Share" is defined, for purposes of this Lease, as the
percentage set forth in paragraph 1.10 of the Basic Lease Provisions, which
percentage has been determined by dividing the approximate square footage of the
Premises by the total approximate square footage of the rentable space contained
in the Office Building Project. It is understood and agreed that the square
footage figures set forth in the Basic Lease provisions are approximations which
Lessor and Lessee agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the Office Building Project.
(b) "Base Year" is defined as 1998. IF THE LEASE COMMENCEMENT IS
JULY 1, 1998 OR THEREAFTER, THE BASE YEAR IS DEFINED AS 1999.
(c) "Comparison Year" is defined as each calendar year during the
term of this Lease subsequent to the Base Year; provided, however, Lessee shall
have no obligation to pay a share of the Operating Expense Increase applicable
to the first twelve (12) months of the Lease Term (other than such as are
mandated by a governmental authority, as to which government mandated expenses
Lessee shall pay Lessee's Share, notwithstanding they occur during the first
twelve (12) months). Lessee's Share of the Operating Expense Increase for the
first and last Comparison Years of the Lease Term shall be prorated according to
that portion of such Comparison Year as to which Lessee is responsible for a
share of such increase
(d) "Operating Expenses" is defined, for purposes of this Lease, to
include all costs, if any, incurred by Lessor in the exercise of its reasonable
discretion, for:
Page 2
<PAGE> 3
(i)The operation, repair, maintenance, and replacement, in
neat, clean, safe, good order and condition, of the Office Building Project,
including but not limited to, the following:
(aa) The Common Areas, including their surfaces,
coverings, decorative items, carpets, drapes and window coverings, and including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building exteriors and
roofs, fences and gates;
(bb) All heating, air conditioning, plumbing,
electrical systems, life safety equipment, telecommunication and other equipment
used in common by, or for the benefit of, lessees or occupants of the Office
Building Project, including elevators and escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair.
(ii) Trash disposal, janitorial and security services;
(iii) Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the liability and property
insurance policies to be maintained by Lessor under paragraph 8 hereof;
(v)The amount of the real property taxes to be paid by
Lessor under paragraph 10.1 hereof;
(vi) The cost of water, sewer, gas, electricity, and other
publicly mandated services to the Office Building Project;
(vii) Labor, salaries and applicable fringe benefits and
costs, materials, supplies and tools, used in maintaining and/or cleaning the
Office Building Project and accounting and a management fee attributable to the
operation of the Office Building Project;
(viii) Replacing and/or adding improvements mandated by any
governmental agency and any repairs or removals necessitated thereby amortized
over its useful life according to Federal income tax regulations or guidelines
for depreciation thereof (including interest on the unamortized balance as is
then reasonable in the judgment of Lessor's accountants);
(ix) Replacements of equipment or improvements that have a
useful life for depreciation purposes according to Federal income tax guidelines
of five (5) years or less, as amortized over such life.
(e) Operating Expenses shall not include the costs of replacements
of equipment or improvements that have a useful life for Federal income tax
purposes in excess of five (5) years unless it is of the type described in
paragraph 4.2(d)(viii), in which case their cost shall be included as above
provided.
(f) Operating Expenses shall not include any expenses paid by any
lessee directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds.
(g) Lessee's Share of Operating Expense Increase shall be payable
by Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time in advance of Lessee's Share
of the Operating Expense Increase for any Comparison Year, and the same shall be
payable monthly or quarterly, as Lessor shall designate, during each Comparison
Year of the Lease term, on the same day as the Base Rent is due hereunder. In
the event that Lessee pays Lessor's estimate of Lessee's Share of Operating
Expense Increase as aforesaid, Lessor shall deliver to Lessee within sixty (60)
days after the expiration of each Comparison Year a reasonably detailed
statement showing Lessee's Share of the actual Operating Expense Increase
incurred during such year. If Lessee's payments under this paragraph 4.2(g)
during said Comparison Year exceed Lessee's Share as indicated on said
statement, Lessee shall be entitled to credit the amount of such overpayment
against Lessee's Share of Operating Expense Increase next falling due. If
Lessee's payments under this paragraph during said Comparison Year were less
than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor
the amount of the deficiency within ten (10) days after delivery by Lessor to
Lessee of said statement. Lessor and Lessee shall forthwith adjust between them
by cash payment any balance determined to exist with respect to that portion of
the last Comparison Year for which Lessee is responsible as to Operating Expense
Increases, notwithstanding that the Lease term may have terminated before the
end of such Comparison Year.
4.3 Rent Increase. (SEE PARAGRAPH 1 OF THE FIRST ADDENDUM).
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5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as
security for Lessee's faithful performance of Lessee's obligations hereunder AND
AS FURTHER DEFINED IN PARAGRAPH 2 OF THE FIRST ADDENDUM. If Lessee fails to pay
rent or other charges due hereunder, or otherwise defaults with respect to any
provision of this Lease, Lessor may use, apply or retain all or any portion of
said deposit for the payment of any rent or other charge in default for the
payment of any other sum to which Lessor may become obligated by reason of
Lessee's default, or to compensate Lessor for any loss or damage which Lessor
may suffer thereby. If Lessor so uses or applies all or any portion of said
deposit, Lessee shall within ten (10) days after written demand therefor deposit
cash with Lessor in an amount sufficient to restore said deposit to the full
amount then required of Lessee. Lessor shall not be required to keep said
security deposit separate from its general accounts. If Lessee performs all of
Lessee's obligations hereunder, said deposit, or so much thereof as has not
heretofore been applied by Lessor, shall be returned, without payment of
interest or other increment for its use, to Lessee (or, at Lessor's option, to
the last assignee, it any, of Lessee's interest hereunder) at the expiration of
the term hereof, and after Lessee has vacated the Premises. No trust
relationship is created herein between Lessor and Lessee with respect to said
Security Deposit.
6. USE.
6.1 Use. The Premises shall be used and occupied only for the purpose
set forth in paragraph 1.4 of the Basic Lease Provisions or any other use which
is reasonably comparable to that use and for no other purpose.
6.2 Compliance with Law.
(a) Lessor warrants to Lessee that the Premises, in the state
existing on the date that the Lease term commences but without regard to
alterations or improvements made by Lessee or the use for which Lessee will
occupy the Premises, do not violate any covenants or restrictions of record, or
any applicable building code, regulation or ordinance in effect on such Lease
term Commencement Date. In the event it is determined that this warranty has
been violated, then it shall be the obligation of the Lessor, after written
notice from Lessee, to promptly, at Lessor's sole cost and expense, rectify any
such violation.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at
Lessee's expense, promptly comply with all applicable statutes, ordinances,
rules, regulations, orders, covenants and restrictions of record, and
requirements of any fire insurance underwriters or rating bureaus, now in effect
or which may hereafter come into effect, whether or not they reflect a change in
policy from that now existing, during the term or any part of the term hereof,
relating in any manner to the Premises and the occupation and use by Lessee of
the Premises. Lessee shall conduct its business in a lawful manner and shall not
use or permit the use of the Premises or the Common Areas in any manner that
will tend to create waste or a nuisance or shall tend to disturb other occupants
of the Office Building Project.
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to Lessee in a clean
condition on the Lease Commencement Date (unless Lessee is already in
possession) and Lessor warrants to Lessee that the plumbing, lighting, air
conditioning, and heating systems in the Premises shall be in good operating
condition. In the event that it is determined that this warranty has been
violated, then it shall be the obligation of Lessor, after receipt of written
notice from Lessee setting forth with specificity the nature of the violation,
to promptly, at Lessor's sole cost, rectify such violation.
(b) Except as otherwise provided in this Lease, Lessee hereby
accepts the Premises and the Office Building Project in their condition existing
as of the Lease Commencement Date or the date that Lessee takes possession of
the Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that it has satisfied itself
by its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor nor Lessor's agent or agents has made any
representation or warranty as to the present or future suitability of the
Premises, Common Areas, or Office Building Project for the conduct of Lessee's
business. LESSOR SHALL MAINTAIN THE PREMISES IN ITS CURRENT CONDITION FROM THE
DATE OF EXECUTION OF THIS LEASE UNTIL THE COMMENCEMENT DATE.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 Lessors Obligations. Lessor shall keep the Office Building Project,
including the Premises interior and exterior walls, roof, and common areas, and
the equipment whether used exclusively for the Premises or in common with other
premises, in good condition and repair; provided, however, Lessor shall not be
obligated to paint, repair or replace wall coverings, or to repair or replace
any improvements that are not ordinarily a part of the Building or are above the
Building standards. Except as provided in paragraph 9.5, there shall be no
abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to my improvements, alterations
or repairs made by Lessor to the Office Building Project or any part thereof.
Lessee expressly waives the benefits of any statute now or hereafter in effect
which would otherwise afford Lessee the right to make repairs at Lessor's
expense or to terminate this Lease because of Lessor's failure to keep the
Premises in good order, condition and repair.
7.2 Lessee's Obligations.
(a) Notwithstanding Lessor's obligation to keep the Premises in
good condition and repair, Lessee shall be responsible for payment of the cost
thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such cost is attributable to
causes beyond normal wear and tear. Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any
Premises improvements that are not ordinarily a part of the Building or that are
above the Building standards. Lessor may, at its option, upon reasonable notice,
elect to
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have Lessee perform any particular such maintenance or repairs the cost
of which is otherwise Lessee's responsibility hereunder.
(b) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same condition
as received, ordinary wear and tear excepted, clean and free of debris. Any
damage or deterioration of the Premises shall not be deemed ordinary wear and
tear if the same could have been prevented by good maintenance practices by
Lessee. Lessee shall repair any damage to the Premises occasioned by the
installation or removal of Lessee's trade fixtures, alterations, furnishings and
equipment. Except as otherwise stated in this Lease, Lessee shall leave the air
lines, power panels, electrical distribution systems, lighting fixtures, air
conditioning, window coverings, wall coverings, carpets, wall paneling, ceilings
and plumbing on the Premises and in good operating condition.
7.3 Alterations and Additions.
(a) Lessee shall not, without Lessor's prior written consent make
any alterations, improvements, additions, Utility Installations or repairs in,
on, or about the Premises or the Office Building Project. As used in this
paragraph 7.3 the term "Utility Installation" shall mean carpeting, window and
wall coverings, power panels, electrical distribution systems, lighting
fixtures, air conditioning, plumbing, and telephone and telecommunication wiring
and equipment. At the expiration of the term, Lessor may require the removal of
any or all of said alterations, improvements, additions or Utility
Installations, and the restoration of the Premises and the Office Building
Project to their prior condition, at Lessee's expense. Should Lessor permit
Lessee to make its own alterations, improvements, additions or Utility
Installations, Lessee shall use only such contractor as has been expressly
approved by Lessor, and Lessor may require Lessee to provide Lessor, at Lessee's
sole cost and expense, a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such improvements, to insure Lessor against
any liability for mechanic's and materialmen's liens and to insure completion of
the work. Should Lessee make any alterations, improvements, additions or Utility
Installations without the prior approval of Lessor, or use a contractor not
expressly approved by Lessor, Lessor may, at any time during the term of this
Lease, require that Lessee remove any part or all of the same.
(b) Any alterations, improvements, additions or Utility
Installations in or about the Premises or the Office Building Project that
Lessee shall desire to make shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent to Lessee's making
such alteration, improvement, addition or Utility Installation, the consent
shall be deemed conditioned upon Lessee acquiring a permit to do so from the
applicable governmental agencies, furnishing a copy thereof to Lessor prior to
the commencement of the work, and compliance by Lessee with all conditions of
said permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project, or any interest therein.
(d) Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in the Premises by Lessee, and Lessor
shall have the right to post notices of non-responsibility in or on the Premises
or the Building as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, the Building or the Office Building
Project, upon the condition that if Lessor shall require, Lessee shall furnish
to Lessor a surety bond satisfactory to Lessor in an amount equal to such
contested lien claim or demand indemnifying Lessor against liability for the
same and holding the Premises, the Building and the Office Building Project free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's reasonable attorneys' fees and costs in participating in such
action if Lessor shall decide it is to Lessor's best interest so to do.
(e) All alterations, improvements, additions and Utility
Installations which may be made to the Premises by Lessee, including but not
limited to, floor coverings, paneling, doors, drapes, built-ins, moldings, sound
attenuation, and lighting and telephone or communication systems, conduit,
wiring and outlets, shall be made and done in a good and workmanlike manner and
of good and sufficient quality and materials and shall be the property of Lessor
and remain upon and be surrendered with the Premises at the expiration of the
Lease term, unless Lessor requires their removal pursuant to paragraph 7.3(a).
Provided Lessee is not in default, notwithstanding the provisions of this
paragraph 7.3(e), Lessee's personal property and equipment, other than that
which is affixed to the Premises so that it cannot be removed without material
damage to the Premises or the Building and other than Utility Installations,
shall remain the property of Lessee and may be removed by Lessee subject to the
provisions of paragraph 7.2.
(f) Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
Installations.
7.4 Utility Additions. Lessor reserves the right to install new or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building Project,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, communication systems, and fire protection and detection systems, so
long as such installations do not unreasonably interfere with Lessee's use of
the Premises.
8. INSURANCE; INDEMNITY.
8.1 Liability Insurance-Lessee. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease a policy of Commercial
General Liability insurance utilizing an Insurance Services Office standard
form, or equivalent, issued by an insurer with a Best's rating of "A- VII" or
better, in an amount of not less than $2,000,000 per occurrence of bodily injury
and property damage combined or in a greater amount as reasonably determined by
Lessor and shall insure Lessee with Lessor and Lender of Lessor as an additional
insured against liability arising out of the use, occupancy or maintenance of
the Premises. Compliance with the above requirement shall not, however, limit
the liability of Lessee hereunder.
8.2 Liability Insurance-Lessor. Lessor shall, obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Broad Form Property Damage Insurance, plus coverage against such other risks
Lessor deems advisable from time to time, insuring Lessor, but not Lessee,
against liability arising out of the ownership, use,
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occupancy or maintenance of the Office Building Project in an amount not less
than $5,000,000.00 per occurrence.
8.3 Property Insurance-Lessee. Lessee shall at Lessee's expense, obtain
and keep in force during the term of this Lease for the benefit of Lessee,
replacement cost fire and extended coverage insurance, with vandalism and
malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Lessee's
personal property, fixtures, equipment and tenant improvements.
8.4 Property Insurance-Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss or
damage to the Office Building Project improvements, but not Lessee's personal
property, fixtures, equipment or tenant improvements, in the amount of the full
replacement cost thereof, as the same may exist from time to time, utilizing
Insurance Services Office standard form, or equivalent, providing protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, plate glass, and such other perils as
Lessor deems advisable or may be required by a lender having a lien on the
Office Building Project. In addition, Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. Lessee will not be named in any
such policies carried by Lessor and shall have no right to any proceeds
therefrom. The policies required by these paragraphs 8.2 and 8.4 shall contain
such deductibles as Lessor or the aforesaid lender may determine. In the event
that the Premises shall suffer an insured loss as defined in paragraph 9.1(f)
hereof, the deductible amounts under the applicable insurance policies shall be
deemed an Operating Expense. Lessee shall not do or permit to be done anything
which shall invalidate the insurance policies carried by Lessor. Lessee shall
pay the entirety of any increase in the property insurance premium for the
Office Building Project over what it was immediately prior to the commencement
of the term of this Lease if the increase is specified by Lessor's insurance
carrier as being caused by the nature of Lessee's occupancy or any act or
omission of Lessee.
8.5 Insurance Policies. Lessee shall deliver to Lessor copies of
liability insurance policies required under paragraph 8.1 or certificates
evidencing the existence and amounts of such insurance within seven (7) days
prior to the Commencement Date of this Lease. No such policy shall be cancelable
or subject to reduction of coverage or other modification except after thirty
(30) days prior written notice to Lessor. Lessee shall, at least thirty (30)
days prior to the expiration of such policies, furnish Lessor with renewals
thereof.
8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the other,
for direct or consequential loss or damage arising out of or incident to the
perils covered by property insurance carried by such party, whether due to the
negligence of Lessor or Lessee or their agents, employees, contractors and/or
invitees. If necessary all property insurance policies required under this Lease
shall be endorsed to so provide.
8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor and its
agents, Lessor's master or ground lessor, partners and lenders, EXCEPT WITH
RESPECT TO ANY WILLFUL AND/OR NEGLIGENT MISCONDUCT OF LESSOR, ITS AGENTS,
EMPLOYEES, CONTRACTORS AND INVITEES, OR LESSOR'S BREACH OF THIS LEASE, from and
against any and all claims for damage to the person or property of anyone or any
entity arising from Lessee's use of the Office Building Project or from the
conduct of Lessee's business or from any activity, work or things done,
permitted or suffered by Lessee in or about the Premises or elsewhere and shall
further indemnify and hold harmless Lessor from and against any and all claims,
costs and expenses arising from any breach or default in the performance of any
obligation on Lessee's part to be performed under the terms of this Lease, or
arising from any act or omission of Lessee, or any of Lessee's agents,
contractors, employees, or invitees, and from and against all costs, attorney's
fees, expenses and liabilities incurred by Lessor as the result of any such use,
conduct, activity, work, things done, permitted or suffered, breach, default or
negligence, and in dealing reasonably therewith, including but not limited to
the defense or pursuit of any claim or any action or proceeding involved
therein; and in case any action or proceeding be brought against Lessor by
reason of any such matter, Lessee upon notice from Lessor shall defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to property of Lessee
or injury to persons, in, upon or about the Office Building Project arising from
any cause and Lessee hereby waives all claims in respect thereof against Lessor,
EXCEPT WITH RESPECT TO ANY WILLFUL AND/OR NEGLIGENT MISCONDUCT OF LESSOR, ITS
AGENTS, EMPLOYEES, CONTRACTORS AND INVITEES, OR LESSOR'S BREACH OF THIS LEASE.
8.8 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor
shall not be liable for injury to Lessee's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other person
in or about the Premises or the Office Building Project, EXCEPT WITH RESPECT TO
ANY WILLFUL AND/OR NEGLIGENT MISCONDUCT OF LESSOR, ITS AGENTS, EMPLOYEES,
CONTRACTORS AND INVITEES, OR LESSOR'S BREACH OF THIS LEASE, nor shall Lessor be
liable for injury to the person of Lessee, Lessee's employees, agents or
contractors, EXCEPT WITH RESPECT TO ANY WILLFUL AND/OR NEGLIGENT MISCONDUCT OF
LESSOR, ITS AGENTS, EMPLOYEES, CONTRACTORS AND INVITEES, OR LESSOR'S BREACH OF
THIS LEASE, whether such damage or injury is caused by or results from theft,
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether said
damage or injury results from conditions arising upon the Premises or upon other
portions of the Office Building Project, or from other sources or places, or
from new construction or the repair, alteration or improvement of any part of
the Office Building Project, or of the equipment, fixtures or appurtenances
applicable thereto, and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible, Lessor shall not be liable
for any damages arising from any act or neglect of any other lessee, occupant or
user of the Office Building Project, nor from the failure of Lessor to enforce
the provisions of any other lease of any other lessee of the Office Building
Project.
8.9 No Representation of Adequate Coverage. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 8 are adequate to cover Lessee's property or obligations under
this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 Definitions.
(a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
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(b) "Premises Building Partial Damage" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent (50%) of the then Replacement Cost of
the building.
(c) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is fifty percent (50%) or more of the then Replacement
Cost of the Building.
(d) "Office Building Project Buildings" shall mean all of the
buildings on the Office Building Project site.
(e) "Office Building Project Buildings Total Destruction" shall
mean if the Office Building Project Buildings are damaged or destroyed to the
extent that the cost of repair is fifty percent (50%) or more of the then
Replacement Cost of the Office Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described in
paragraph 8. The fact that an Insured Loss has a deductible amount shall not
make the loss an uninsured loss.
(g) "Replacement Cost" shall mean the amount of money necessary to
be spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by lessees other than those installed by Lessor at Lessee's expense.
9.2 Premises Damage; Premises Building Partial Damage.
(a) Insured Loss. Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is an
Insured Loss and which falls into the classification of either Premises Damage
or Premises Building Partial Damage, then Lessor shall, as soon as reasonably
possible and to the extent the required materials and labor are readily
available through usual commercial channels, at Lessor's expense, repair such
damage (but not Lessee's fixtures, equipment or tenant improvements originally
paid for by Lessee) to its condition existing at the time of the damage, and
this Lease shall continue in full force and effect.
(b) Uninsured Loss. Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is not
an Insured Loss and which falls within the classification of Premises Damage or
Premises Building Partial Damage, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense), which
damage prevents Lessee from making any substantial use of the Premises, Lessor
may at Lessor's option either (i) repair such damage as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in full
force and effect, or (ii) give written notice to Lessee within thirty (30) days
after the date of the occurrence of such damage of Lessor's intention to cancel
and terminate this Lease as of the date of the occurrence of such damage, in
which event this Lease shall terminate as of the date of the occurrence of such
damage.
9.3 Premises Building Total Destruction; Office Building Project Total
Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease there is damage, whether or not it is an Insured
Loss, which falls into the classifications of either (i) Premises Building Total
Destruction or (ii) Office Building Project Total Destruction then Lessor may at
Lessor's option either (i) repair such damage or destruction as soon as
reasonably possible at Lessor's expense (to the extent the required materials
are readily available through usual commercial channels) to its condition
existing at the time of the damage, but not Lessee's fixtures, equipment or
tenant improvements, and this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after the date of
occurrence of such damage of Lessor's intention to cancel and terminate this
Lease, in which case this Lease shall terminate as of the date of the occurrence
of such damage.
9.4 Damage Near End of Term.
(a) Subject to paragraph 9.4(b), if at any time during the last
twelve (12) months of the term of this Lease there is substantial damage to the
Premises, Lessor may at Lessor's option cancel and terminate this Lease as of
the date of occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within 30 days after the date of occurrence of such
damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has
an option to extend or renew this Lease, and the time within which said option
may be exercised has not yet expired, Lessee shall exercise such option, if it
is to be exercised at all, no later than twenty (20) days after the occurrence
of an Insured Loss falling within the classification of Premises Damage during
the last twelve (12) months of the term of this Lease. If Lessee duly exercises
such option during said twenty (20) day period, Lessor shall, at Lessor's
expense, repair such damage, but not Lessee's fixtures, equipment or tenant
improvements, as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor's option terminate and cancel
this Lease as of the expiration of said twenty (20) day period by giving written
notice to Lessee of Lessor's election to do so within ten (10) days after the
expiration of said twenty (20) day period, notwithstanding any term or provision
in the grant of option to the contrary.
9.5 Abatement of Rent; Lessee's Remedies.
(a) In the event Lessor repairs or restores the Building or
Premises pursuant to the provisions of this paragraph 9, and any part of the
Premises are not usable (including loss of use due to loss of access or
essential services), the rent payable hereunder (including Lessee's Share of
Operating Expense Increase) for the period during which such damage, repair or
restoration continues shall be abated, provided (1) the damage was not the
result of the negligence of Lessee, and (2) such abatement shall only be to the
extent the operation of Lessee's business as operated from the Premises is
adversely affected. Except for said abatement of rent, if any, Lessee shall have
no claim against Lessor for any damage suffered by reason of any such damage,
destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
or the Building under the provisions of this Paragraph 9 and shall not commence
such repair or restoration within sixty (60) days after such occurrence, or if
Lessor shall not complete the restoration and repair within nine (9) months
after such occurrence, Lessee may at Lessee's option cancel and terminate this
Lease by giving Lessor written notice of Lessee's election to do so at any time
prior to the commencement or completion, respectively, of such repair or
restoration. In such event this Lease shall terminate as of the date of such
notice.
(c) Lessee agrees to cooperate with Lessor in connection with any
such restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
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9.6 Termination-Advance Payments. Upon termination of this Lease
pursuant to this paragraph 9, an equitable advancement shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
therefore been applied by Lessor.
9.7 Waiver. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.
10. REAL PROPERTY TAXES.
10.1 Payment of Taxes. Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Office Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.
10.2 Additional Improvements. Lessee shall not be responsible for paying
any increase in real property tax specified in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the Office
Building Project by other Lessees or by Lessor for the exclusive enjoyment of
any other Lessee. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax". As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Office Building Project or any portion thereof
by any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Lessor in the Office Building Project or in any
portion thereof, as against Lessor's right to rent or other income therefrom,
and as against Lessor's business of leasing the Office Building Project. The
term "real property tax" shall also include any tax, fee, levy, assessment or
charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of "real
property tax," or (ii) the nature of which was hereinbefore included within the
definition of "real property tax," or (iii) which is imposed for a service or
right not charged prior to June 1, 1978, or, if previously charged, has been
increased since June 1, 1978, or (iv) which is imposed as a result of a change
in ownership, as defined by applicable local statutes for property tax purposes,
of the Office Building Project or which is added to a tax or charge hereinbefore
included within the definition of real property tax by reason of such change of
ownership, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the improvements or property, the taxes for
which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not
separately assessed, Lessee's portion of that tax shall be equitably determined
by Lessor from the respective valuations assigned in the assessor's work sheets
or such other information (which may include the cost of construction) as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.
10.5 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed
with Lessor's real property, Lessee shall pay to Lessor the taxes attributable
to Lessee within ten (10) days after receipt of a written statement setting
forth the taxes applicable to Lessee's property.
11. UTILITIES.
11.1 Services Provided by Lessor. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably required,
reasonable amounts of electricity for normal lighting and office machines, water
for reasonable and normal drinking and lavatory use, and replacement light bulbs
and/or fluorescent tubes and ballasts for standard overhead fixtures.
11.2 Services Exclusive to Lessee. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.
11.3 Hours of Service. Said services and utilities shall be provided
during generally accepted business days and hours or such other days or hours as
may hereafter be set forth. Utilities and services required at other times shall
be subject to advance request and reimbursement by Lessee to Lessor of the cost
thereof. THE BUILDING STANDARD HOURS OF OPERATION ARE DEFINED AS: MONDAY-FRIDAY,
8:00 A.M. - 6:00 P.M.
11.4 Excess Usage by Lessee. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting
or power, or suffer or permit any act that causes extra burden upon the
utilities or services, including but not limited to security services over
standard office usage for the Office Building Project. Lessor shall require
Lessee to reimburse Lessor for any excess expenses or costs that may arise out
of a breach of this subparagraph by Lessee. Lessor may, in its sole discretion,
install at Lessee's expense supplemental equipment and/or separate metering
applicable to Lessee's excess usage or loading.
11.5 Interruptions. There shall be no abatement of rent and Lessor shall
not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reasonable control or in cooperation with governmental request or directions,
provided Lessor uses reasonable and diligent efforts to reinstate.
12. ASSIGNMENT AND SUBLETTING.
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises,
without Lessor's prior
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written consent, which Lessor shall not unreasonably withhold. Lessor shall
respond to Lessee's request for consent hereunder in a timely manner, and any
attempted assignment, transfer, mortgage, encumbrance or subletting without such
consent shall be void, and shall constitute a material default and breach of
this Lease without the need for notice to Lessee under paragraph 13.1. Prior to
any assignment or sublet of the premises or any portion thereof, Lessee shall
notify Lessor in writing of the name and address of the proposed assignee or
sublessee, and deliver to Lessor financial statements of the proposed assignee
or sublessee, a true and complete copy of the proposed assignment agreement(s)
or sublease with said notice, and shall promptly provide any other information
reasonably requested by Lessor to enable Lessor to evaluate the proposed
assignment or sublet. Lessor shall within five (5) business days of the receipt
of complete information as required above, elect to do one of the following:
(1) consent to such proposed assignment or sublease;
(2) refuse such consent which refusal shall be on reasonable
grounds; or
(3) terminate this lease with respect to the portion of the
premises which Lessee desires to assign or sublease, in which case rental paid
by Lessee to Lessor hereunder shall be reduced in the proportion that the square
feet of the premises that Lessee desires to so assign or sublet bears to the
total square feet of the premises leased by Lessee hereunder, and thereafter
neither party shall have any further obligation or liability to the other with
regard to said portion of the premises except for matters which arose prior to
termination and except for obligations that exist upon termination.
"Transfer" within the meaning of this paragraph 12 shall include the transfer or
transfers aggregating: (a) if Lessee is a corporation, more than THIRTY PERCENT
(30%) of the voting stock of such corporation, TO PERSONS WHO WERE NOT
PREVIOUSLY HOLDERS OF THE VOTING STOCK OF SUCH CORPORATION, or (b) if Lessee is
a partnership, more than twenty-five percent (25%) of the profit and loss
participation in such partnership.
12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, all of which are referred to as "Lessee Affiliate";
provided that before such assignment shall be effective, ______ said assignee
shall assume, in full, the obligations of Lessee under this Lease and (b) Lessor
shall be given written notice of such assignment and assumption. Any such
assignment shall not, in any way, affect or limit the liability of Lessee under
the terms of this Lease even if after such assignment or subletting the terms of
this Lease are materially changed or altered without the consent of Lessee, the
consent of whom shall not be necessary.
12.3 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting
shall release Lessee of Lessee's obligations hereunder or alter the primary
liability of Lessee to pay the rent and other sums due Lessor hereunder
including Lessee's Share of Operating Expense Increase, and to perform all other
obligations to be performed by Lessee hereunder.
(b) Lessor may accept rent from any person other than Lessee
pending approval or disapproval of such assignment.
(c) Neither a delay in the approval or disapproval of such
assignment or subletting nor the acceptance of rent, shall constitute a waiver
or estoppel of Lessor's right to exercise its remedies for the breach of any of
the terms or conditions of this paragraph 12 or this Lease.
(d) If Lessee's obligations under this Lease have been guaranteed
by third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to such
sublease and the terms thereof.
(e) The consent by Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent and such
action shall not relieve such persons from liability under this Lease or said
sublease; however, such persons shall not be responsible to the extent any such
amendment or modification enlarges or increases the obligations of the Lessee or
sublessee under this Lease or such sublease.
(f) Lessor's written consent to any assignment or subletting of the
Premises by Lessee shall not constitute an acknowledgment that no default then
exists under this Lease of the obligations to be performed by Lessee nor shall
such consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Lessor at the time.
(g) The discovery of the fact that any financial statement relied
upon by Lessor in giving its consent to an assignment or subletting was
materially false shall, at Lessor's election, render Lessor's said consent null
and void.
12.4 Additional Terms and Conditions Applicable to Subletting.
Regardless of Lessor's consent, the following terms and conditions shall apply
to any subletting by Lessee of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not expressly
incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease; provided, however, that until
a default shall occur in the performance of Lessee's obligations under this
Lease, Lessee may receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease to pay to Lessor the
rents due and to become due under the sublease. Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against said sublessee or Lessor for any such rents
so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless
and until it has been approved in writing by
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Lessor. In entering into any sublease, Lessee shall use only such form of
sublessee as is satisfactory to Lessor, and once approved by Lessor, such
sublease shall not be changed or modified without Lessor's prior written
consent. Any sublease shall, by reason of entering into a sublease under this
Lease, be deemed, for the benefit of Lessor, to have assumed and agreed to
conform and comply with each and every obligation herein to be performed by
Lessee other than such obligations as are contrary to or inconsistent with
provisions contained in a sublease to which Lessor has expressly consented in
writing.
(c) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor at its option and without any obligation to
do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of Lessee under such sublease from the time of
the exercise of said option to the termination of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee under
such sublease.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within three (3) days after service of said notice of default upon such
sub-lessee, and the sublessee shall have a right of reimbursement and offset
from and against Lessee for any such defaults cured by the sublessee.
12.5 Lessor's Expenses. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including attorneys', architects', engineers' or other
consultants' fees.
12.6 Conditions to Consent. Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the proposed
assignee or sublessee shall conduct a business on the Premises of a quality
substantially equal to that of Lessee and consistent with the general character
of the other occupants of the Office Building Project and not in violation of
any exclusives or rights then held by other tenants, and (b) the proposed
assignee or sublessee be at least as financially responsible as Lessee was
expected to be at the time of the execution of this Lease or of such assignment
or subletting, whichever is greater.
12.7 Surplus Rent. To the extent that the aggregate amount of any rental
to be made by the proposed assignee, transferee or sublessee to Tenant exceeds
the sum of (i) the aggregate amount of the monthly Base Rent payable by Tenant
to Landlord during the term of such sublease, transfer or assignment or the
remaining Term of the Lease, whichever expires earlier, (ii) the amount of any
commissions payable in connection with such sublease, transfer or assignment,
(iii) the cost of any alterations or improvements reasonably requested to be
installed in connection with such sublease, transfer or assignment, and (iv)
Lessee's reasonable attorney's fees, such excess amount shall be amortized
ratably over the term of such sublease, transfer or assignment or the remaining
Term of the Lease, whichever expires earlier, and FIFTY PERCENT (50%) of such
amortized portion of such excess amount shall be paid by Tenant to Landlord on
the first day of each month during the applicable term.
13. DEFAULT; REMEDIES.
13.1 Default. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:
(a) The vacation or abandonment of the Premises by Lessee. Vacation
of the Premises shall include the failure to occupy the Premises for a
continuous period of sixty (60) days or more, whether or not the rent is paid.
(b) The breach by Lessee of any of the covenants, conditions or
provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or
subletting), 13.1(a) (vacation or abandonment), 13.1 (e) (insolvency), 13.1 (f)
(false statement), 16(a) (estoppel certificate), 30(b) (subordination), 33
(auctions), or 41.1 (easements), all of which are hereby deemed to be material,
non-curable defaults AND OF WHICH LESSOR NOTIFIED LESSEE WITHIN FIFTEEN (15)
DAYS AFTER DISCOVERY TIME.
(c) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
(d) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Lessee other than those referenced in subparagraphs (b) and (c) above, where
such failure shall continue for a period of thirty (30) days after written
notice thereof from Lessor to Lessee; provided, however, that if the nature of
Lessee's noncompliance is such that more than thirty (30) days are reasonably
required for its cure, then Lessee shall not be deemed to be in default if
Lessee commenced such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion. To the extent permitted by law, such
thirty (30) day notice shall constitute the sole and exclusive notice required
to be given to Lessee under applicable Unlawful Detainer statutes.
(e) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becoming a "debtor" as
defined in 11 U.S.C. Section101 or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed within sixty (60)
days; (iii) the appointment of a trustee or receiver to lake possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease. where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(e) is contrary to
any applicable law, such provision shall be of no force or effect.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee, or its successor in interest or by any guarantor of Lessee's
obligation hereunder, was materially false.
13.2 Remedies. In the event of any material default or breach of this
Lease by Lessee, Lessor may at any time thereafter, with or without notice or
demand and without limiting Lessor in the exercise of any right or remedy which
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Lessor or may have by reason of such default:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee all damages incurred by
Lessor by reason of Lessee's default including, but not limited to, the cost of
recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and any real estate commission actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this Lease
shall continue in effect whether or not Lessee shall have vacated or abandoned
the Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located. Unpaid installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable time, but in
no event later than thirty (30) days after written notice by Lessee to Lessor
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have theretofore been furnished to Lessee in
writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance then Lessor shall not be in
default if Lessor commences performance within such 30-day period and thereafter
diligently pursues the same to completion.
13.4 Late Charges. Lessee hereby acknowledges that late payment by
Lessee to Lessor of Base Rent, Lessee's Share of Operating Expense Increase or
other sums due hereunder will cause Lessor to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges,
and late charges which may be imposed on Lessor by the terms of any mortgage or
trust deed covering the Office Building Project. Accordingly, if any installment
of Base Rent, Operating Expense Increase, or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 6% of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event constitute a waiver
of Lessee's default with respect to such overdue amount, nor prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
14. CONDEMNATION. If the Premises or any portion thereof or the Office Building
Project are taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs; provided that if so
much of the Premises or the Office Building Project are taken by such
condemnation as would substantially and adversely affect the operation and
profitability of Lessee's business conducted from the Premises, Lessee shall
have the option, to be exercised only in writing within thirty (30) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within thirty (30) days after the condemning authority shall
have taken possession), to terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent and Lessee's
Share of Operating Expense Increase shall be reduced in the proportion that the
floor area of the Premises taken bears to the total floor area of the Premises.
Common Areas taken shall be excluded from the Common Areas usable by Lessee and
no reduction of rent shall occur with respect thereto or by reason thereof.
Lessor shall have the option in its sole discretion to terminate this Lease as
of the taking of possession by the condemning authority, by giving written
notice to Lessee of such election within thirty (30) days after receipt of
notice of a taking by condemnation of any part of the Premises or the Office
Building Project. Any award for the taking of all or any part of the Premises or
the Office Building Project under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any separate award for loss of or
damage to Lessee's trade fixtures, removable personal property and unamortized
tenant improvements that have been paid for by Lessee. For that purpose the cost
of such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that this Lease is not terminated by reason
of such condemnation, Lessor shall to the extent of severance damages received
by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.
15. BROKER'S FEE.
(a) The brokers involved in this transaction are KH REALTY 3, INC.
as "listing broker" AND CORNISH & CAREY COMMERCIAL, as "cooperating broker,"
licensed real estate broker(s). A "cooperating broker" is defined as any broker
other than the listing broker entitled to a share of any commission arising
under this Lease. Upon execution of this Lease by both parties, Lessor shall pay
to said brokers jointly, or in such separate shares as they may mutually
designate in writing, a fee as set forth in a separate agreement between Lessor
and said broker(s), or in the event there is no separate agreement between
Lessor and said broker(s), the sum of $ N/A for brokerage services rendered by
said broker(s) to Lessor in this transaction. The commission shall be paid 50%
upon execution of this Lease and 50% upon the commencement of this Lease.
However, in no event shall the
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total commission paid exceed $4.00 per square foot to cooperating broker.
(b) Lessor shall have no obligation to pay any additional fee or
commission under any of the following circumstances: (i) it Lessee exercises any
Option, as defined in paragraph 3.9.1 of this Lease, which is granted to Lessee
under this Lease, or any subsequently granted option which is substantially
similar to an Option granted to Lessee under this Lease, or (ii) if Lessee
acquires any rights to the Premises or other premises described in this Lease
which are substantially similar to what Lessee would have acquired had an Option
herein granted to Lessee been exercised, or (iii) if Lessee remains in
possession of the Premises after the expiration of the term of this Lease after
having failed to exercise an Option, or (iv) if said broker(s) are the procuring
cause of any other lease or sale entered into between the parties pertaining to
the Premises and/or any adjacent property in which Lessor has an interest.
(c) Lessor agrees to pay said fee not only on behalf of Lessor but
also on behalf of any person, corporation, association, or other entity having
an ownership interest in said real property or any part thereof, when such fee
is due hereunder. Any transferee of Lessor's interest in this Lease, whether
such transfer is by agreement or by operation of law, shall be deemed to have
assumed Lessor's obligation under this paragraph 15. Each listing and
cooperating broker shall be a third party beneficiary of the provisions of this
paragraph 15 to the extent of their interest in any commission arising under
this Lease and may enforce that right directly against Lessor; provided,
however, that all brokers having a right to any part of such total commission
shall be a necessary party to any suit with respect thereto.
(d) Lessee and Lessor each represent and warrant to the other that
neither has had any dealings with any person, firm, broker or finder (other than
the person(s), if any, whose names are set forth in paragraph 15(a), above) in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Lessee and Lessor do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time upon not
less than ten (10) days' prior written notice from the other party ("requesting
party") execute, acknowledge and deliver to the requesting party a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge, any
uncured defaults on the part of the requesting party, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrancer of the Office Building Project or
of the business of Lessee.
(b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party, (ii)
there are no uncured defaults in the requesting party's performance, and (iii)
if Lessor is the requesting party, not more than one month's rent has been paid
in advance.
(c) If Lessor desires to finance, refinance, or sell the Office
Building Project, or any part thereof, Lessee hereby agrees to deliver to any
lender or purchaser designated by Lessor such financial statements of Lessee as
may be reasonably required by such lender or purchaser. Such statements shall
include the past three (3) years' financial statements of Lessee. All such
financial statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Office Building Project, and except as
expressly provided in paragraph 15, in the event of any transfer of such title
or interest, Lessor herein named (and in case of any subsequent transfers then
the grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
resistive periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any
amount due to Lessor not paid when due shall bear interest at the maximum rate
then allowable by law or judgments from the date due. Payment of such interest
shall not excuse or cure any default by Lessee under this Lease; provided,
however, that interest shall not be payable on late charges incurred by Lessee
nor on any amounts upon which late charges are paid by Lessee.
20. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expense Increase and any other expenses payable by Lessee hereunder shall be
deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
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listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises or the Office Building Project and Lessee acknowledges
that Lessee assumes all responsibility regarding the Occupational Safety Health
Act, the legal use and adaptability of the Premises and the compliance thereof
with all applicable laws and regulations in effect during the term of this
Lease.
23. NOTICES. All notices, demands, requests and other communications required
hereunder (a) shall be in writing, (b) shall be deemed to be properly addressed
and transmitted if mailed by United States registered or certified mail, with
return receipt request, postage prepaid, or by United States Express Mail, or if
sent by a national courier service or if personally served, and the same if sent
to a party at its address set forth on the signature page hereto. Any notice,
demand, request or other communication required hereunder will be deemed
delivered (a) upon personal delivery, if personally served, or (b) if mailed or
if sent by courier, upon receipt (as reflected in the records of the delivering
entity) or upon the addressee's refusal to accept delivery (as reflected in the
records of the delivering entity). Any party may designate a change of address
by written notice to the other, given at least ten (10) days before such change
of address is to be come effective. Absent delivery to a party of the change of
address of another party, no party shall be required to inquire as to the
continuing correctness of the last address delivered to it for the other party.
24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.
26. HOLDING OVER. If Lessee, with Lessor's consent, remains in possession of
the Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, except that the rent payable
shall be two hundred percent (200%) of the rent payable immediately preceding
the termination date of this Lease, and all Options, if any, granted under the
terms of this Lease shall be deemed terminated and be of no further effect
during said month to month tenancy.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provisions of paragraph
17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
where the Office Building Project is located and any litigation concerning this
Lease between the parties hereto shall be initiated in the county in which the
Office Building Project is located.
30. SUBORDINATION.
(a) This Lease, and any Option or right of first refusal granted hereby,
at Lessor's option, shall be subordinate to any ground lease, mortgage, deed of
trust, or any other hypothecation or security now or hereafter placed upon the
Office Building Project and to any and all advances made on the security thereof
and to all renewals, modifications, consolidations, replacements and extensions
thereof. Notwithstanding such subordination, Lessee's right to quiet possession
of the Premises shall not be disturbed if Lessee is not in default and so long
as Lessee shall pay the rent and observe and perform all of the provisions of
this Lease, unless this Lease is otherwise terminated pursuant to its terms. If
any mortgagee, trustee or ground lessor shall elect to have this Lease and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof.
(b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be. Lessee's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Lessee hereunder without
further notice to Lessee or, at Lessor's option, Lessor shall execute such
documents on behalf of Lessee as Lessee's attorney-in-fact. Lessee does hereby
make, constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and
in Lessee's name, place and stead, to execute such documents in accordance with
this paragraph 30(b).
31. ATTORNEYS' FEES.
31.1 If either party or the broker(s) named herein bring an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, trial or appeal thereon, shall be entitled to his reasonable
attorneys' fees to be paid by the losing party as fixed by the court in the same
or a separate suit, and whether or not such action is pursued to decision or
judgment. The provisions of this paragraph shall inure to the benefit of the
broker named herein who seeks to enforce a right hereunder.
31.2 The attorneys' fee award shall not be computed in accordance with
any court fee schedule, but shall be such as to
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fully reimburse all attorneys' fees reasonably incurred in good faith.
31.3 Lessor shall be entitled to reasonable attorneys' fees and all
other costs and expenses incurred in the preparation and service of notice of
default and consultations in connection therewith, whether or not a legal
transaction is subsequently commenced in connection with such default.
32. LESSOR'S ACCESS.
32.1 Lessor and Lessor's agents shall have the right to enter the
Premises at reasonable times for the purpose of inspecting the same, performing
any services required of Lessor, showing the same to prospective purchasers,
lenders, or lessees, taking such safety measures, erecting such scaffolding or
other necessary structures, making such alterations, repairs, improvements or
additions to the Premises or to the Office Building Project as Lessor may
reasonably deem necessary or desirable and the erecting, using and maintaining
of utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the
Premises. Lessor may at any time place on or about the Premises or the Building
any ordinary "For Sale" signs and Lessor may at any time during the last 120
days of the term hereof place on or about the Premises any ordinary "For Lease"
signs.
32.2 All activities of Lessor pursuant to this paragraph shall be
without abatement of rent, nor shall Lessor have any liability to Lessee for the
same.
32.3 Lessor shall have the right to retain keys to the Premises and to
unlock all doors in or upon the Premises other than to files, vaults and sales,
and in the case of emergency to enter the Premises by any reasonably appropriate
means, and any such entry shall not be deemed a forceable or unlawful entry or
detainer of the Premises or an eviction. Lessee waives any charges for damages
or injuries or interference with Lessee's properly or business in connection
therewith.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent. The holding of any auction on the Premises or Common Areas in violation
of this paragraph shall constitute a material default of this Lease.
34. SIGNS. Lessee shall not place any sign upon the Premises or the Office
Building Project without Lessor's prior written consent. Under no circumstances
shall Lessee place a sign on any roof of the Office Building Project.
35. MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
36. CONSENTS. Except for paragraphs 33 (auctions) and 34 (signs) hereof,
wherever in this Lease the consent of one party is required to an act of the
other party such consent shall not be unreasonably withheld or delayed.
37. GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee, under this Lease.
38. QUIET POSSESSION. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Office Building Project.
39. OPTIONS.
39.1 Definition. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option of right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Office Building Project or other
properly of Lessor or the right of first offer to lease other space within the
Office Building Project or other property of Lessor; (3) the right or option to
purchase the Premises or the Office Building Project, or the right of first
refusal to purchase the Premises or the Office Building Project or the right of
first offer to purchase the Premises or the Office Building Project, or the
right or option to purchase other property of Lessor, or the right of first
refusal to purchase other property of Lessor or the right of first offer to
purchase other property of Lessor.
39.2 Options Personal. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
while occupying the Premises who does so without the intent of thereafter
assigning this Lease or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Lessee; provided, however, that an Option may be
exercised by or assigned to any Lessee Affiliate as defined in paragraph 12.2 of
this Lease. The Options, if any, herein granted to Lessee are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple options
to extend or renew this Lease a later option cannot be exercised unless the
prior option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, (i) during
the time commencing from the date Lessor gives to Lessee a notice of default
pursuant to paragraph 13.1(c) or 13.1(d) and continuing until the noncompliance
alleged in said notice of default is cured, or (ii) during the period of time
commencing on the day after a monetary obligation to Lessor is due from Lessee
and unpaid
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(without any necessity or notice thereof to Lessee) and continuing until the
obligation is paid, or (iii) In the event that Lessor has given to Lessee three
or more notices of default under paragraph 13.1(c), or paragraph 13.1(d),
whether or not the defaults are cured, during the 12 month period of time
immediately prior to the time that Lessee attempts to exercise the subject
Option, (iv) if Lessee has committed any non-curable breach, including without
limitation those described in paragraph 13.1(b), or is otherwise in default of
any of the terms, covenants or conditions of this Lease.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to
commence to cure a default specified in paragraph 13.1(d) within thirty (30)
days after the date that Lessor gives notice to Lessee of such default and/or
Lessee fails thereafter to diligently prosecute said cure to completion, or
(iii) Lessor gives to Lessee three or more notices of default under paragraph
13.1(c) or paragraph 13.1(d), whether or not the defaults are cured, or (iv) if
Lessee has committed any non-curable breach, including without limitation those
described in paragraph 13.1(b), or is otherwise in default of any of the terms,
covenants and conditions of this Lease.
39.5 Exercise Notice. No exercise of any Option right hereunder shall be
effective unless the required notice is received by the party to whom it is sent
strictly in accordance with the provisions of Paragraph 23 herein. The risk of
non-delivery shall be on the sender of the Option notice.
40. SECURITY MEASURES-LESSOR'S RESERVATIONS.
40.1 Lessee hereby acknowledges that Lessor shall have no obligation
whatsoever to provide guard service or other security measures for the benefit
of the Premises or the Office Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole option,
from providing security protection for the Office Building Project or any part
thereof, in which event the cost thereof shall be included within the deduction
of Operating Expenses, as set forth in paragraph 4.2(b).
40.2 Lessor shall have the following rights:
(a) To change the name, address or title of the Office Building
Project or building in which the Premises are located upon not less than 90 days
prior written notice;
(b) To, at Lessee's expense, provide and install Building standard
graphics on the door of the Premises and such portions of the Common Areas as
Lessor shall reasonably deem appropriate;
(c) To permit any lessee the exclusive right to conduct any
business as long as such exclusive does not conflict with any rights expressly
given herein;
(d) To place such signs, notices or displays as Lessor reasonably
deems necessary or advisable upon the roof, exterior of the buildings or the
Office Building Project or on pole signs in the Common Areas;
40.3 Lessee shall not:
(a) Use a representation (photographic or otherwise) of the
Building or the Office Building Project or their name(s) in connection with
Lessee's business;
(b) Suffer or permit anyone, except in emergency, to go upon the
roof of the Building.
41. EASEMENTS.
41.1 Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary or desirable,
and to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications Maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.
41.2 The obstruction of Lessee's view, air, or light by any structure
erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor.
42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
43. AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each individual executing this Lease on behalf of such
entity represent and warrant that such individual is duly authorized to execute
and deliver this Lease on behalf of said entity. If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days after execution of
this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
44. CONFLICT. Any conflict between the printed provisions, Exhibits or Addenda
of this Lease and the typewritten or handwritten provisions, if any, shall be
controlled by the typewritten or handwritten provisions.
45. NO OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when fully executed
by both parties.
46. LENDER MODIFICATION. AS LONG AS THEY DO NOT MATERIALLY CHANGE LESSEE'S
OBLIGATIONS AND RIGHTS HEREUNDER, Lessee
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agrees to make such reasonable NON-MONETARY modifications to this Lease as may
be reasonably required by an institutional lender in connection with the
obtaining of normal financing or refinancing of the Office Building Project.
47. MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee,
respectively.
48. WORK LETTER. This Lease is supplemented by that certain Work Letter of even
date executed by Lessor and Lessee, attached hereto as Exhibit C, and
incorporated herein by this reference.
49. ATTACHMENTS. Attached hereto are the following documents which constitute a
part of this Lease:
o FIRST ADDENDUM TO LEASE
o EXHIBIT A Floor Plan
o EXHIBIT B Rules & Regulations
o EXHIBIT C May 1, 1998 KH Realty 3 Inc. Tenant Improvement
Letter; Tico Construction bid dated May 1, 1998; and space
plans defining new construction designed by Interspace
Design.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR
ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS
AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO; THE PARTIES
SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND
TAX CONSEQUENCES OF THIS LEASE.
LESSOR: LESSEE:
ASSET GROWTH PARTNERS, LTD. SAGENT TECHNOLOGY, INC.
BY: KH REALTY 3, INC.
GENERAL PARTNER
By /s/ Thomas J. Rees By /s/ Kenneth C. Gardner
--------------------------------------- -------------------------------
Thomas J. Rees Kenneth C. Gardner
Its President Its President & CEO
Date 6/11/98 Date June 9, 1998
--------------------------------- -----------------------------
Address for Notices: Address for Notices:
2570 W. El Camino Real Suite 502 800 W. EL CAMINO REAL, 3RD FLOOR
Mountain View, CA 94040 MOUNTAIN VIEW
(650) 941-4282
Attn: Marion Tavenner, Vice President
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FIRST AMENDMENT TO THE LEASE
DATED JUNE 1, 1998 BY AND BETWEEN
ASSET GROWTH PARTNERS, LTD. AS LESSOR
AND SAGENT TECHNOLOGY, INC. AS LESSEE
This amendment, executed pursuant to Paragraph 3.4 of the Lease, shall establish
the following:
1) Lessor and Lessee agree that the Commencement Date under the lease is
October 7, 1998, and that the lease is in full force and effect, and, to the
knowledge of Lessor and Lessee, neither party is in default under the Lease.
2) The Expiration Date shall be October 6, 2003.
3) Lessee acknowledges receipt of the Non-Disturbance Agreement, in accordance
with the requirements of the Lease.
LESSOR: LESSEE:
ASSET GROWTH PARTNERS, LTD. SAGENT TECHNOLOGY, INC.
BY: KH REALTY 3, INC.
GENERAL PARTNER
/s/ Thomas J. Rees /s/ Kenneth C. Gardner
- ------------------------------------- ----------------------------
THOMAS J. REES KENNETH C. GARDNER
PRESIDENT PRESIDENT & C.E.O
DATE: 12/2/98 DATE: 12/1/98
-------------------------------- -----------------------
<PAGE> 18
FIRST ADDENDUM TO LEASE
This FIRST ADDENDUM to the Lease, dated JUNE 1, 1998 for reference purposes
only, is made by and between Asset Growth Partner, Ltd., "Lessor" and Sagent
Technology, Inc., "Lessee", for the Premises more commonly known as 800 W. El
Camino Real, third floor, in the city of Mountain View, State of California
("Premises").
The First Addendum is an integral part of the Lease, and, in the event of any
inconsistency between this Addendum and the lease, the terms of this Addendum
shall control. Unless otherwise defined, all terms used in this Addendum shall
have the same meanings as given them in the Lease Form.
1. MONTHLY BASE RENT:
Year 1: $3.40/sq. ft./month/full service ($116,429.60/month)
Lessor grants Lessee the first two (2) weeks of the lease term,
rent free, to be credited to the second month's rent.
Year 2: $3.50/sq.ft./month/full service ($119,854.00/month)
Year 3: $3.61/sq.ft./month/full service ($123,620.84/month)
Year 4: $3.72/sq.ft./month/full service ($127,387.68/month)
Year 5: $3.83/sq.ft./month/full service ($131,154.52/month)
(Annual 3% increase).
2. SECURITY DEPOSIT:
Upon lease execution, Lessee shall provide to Lessor one (1) month security
deposit of one hundred sixteen thousand four hundred twenty nine and 60/100
($116,429.60).
If Lessee does not exercise Lessee's right to cancel the Lease as defined in
Article 3 herein, September 8, 1998, Lessee shall then provide to Lessor a total
four (4) month rent equivalent security deposit, of four hundred sixty five
thousand seven hundred eighteen and 40/100's ($465,718.40).
If Lessee has not been in default, Lessor shall credit the equivalent of one (1)
month's rent ($116,429.60), of the security deposit to the rent then due thirty
(30) days after the effective date Lessee goes public.
Thereafter, upon Lessee providing Lessor financial information reasonably
satisfactory to Lessor that Lessee has met four (4) consecutive quarters of
profitability, Lessor shall credit one (1) month equivalent rent ($116,429.60)
of the security deposit to the first month's rent then due at the end of the
fourth (4th) consecutive quarter Lessee is profitable.
The remaining security deposit shall be retained through the lease term as
defined in paragraph 5 of the Lease for a total of two hundred thirty two
thousand eight hundred fifty nine and 20/100's ($232,859.20).
3. LEASE CANCELLATION:
In addition to Lessee's right as defined in paragraph 3.2 of the Lease, if the
current Lessee of the Premises does not vacate the Premises by midnight August
31, 1998, Lessee, at Lessee's option has a one time right to cancel the lease by
giving Lessor written notice within five (5) working days thereafter.
<PAGE> 19
4. HOLD-OVER:
Should the Commencement Date extend beyond October 1, 1998, Lessee does not
cancel the Lease August 31, 1998 as defined in Article 3 herein, and the delay
is not caused by Lessee (Article 3.2.2), Lessor agrees to pay Lessee's hold over
rent surcharge for their current Premises located at 2225 E. Bayshore Road,
First Floor, Palo Alto, effective October 1, 1998 defined as the difference of
$4.50/sq.ft. full service (hold-over rent) - $3.20/sq.ft. full service
(September 1998 current rent) = $1.30/sq.ft. x 15,958 sq.ft. = $20,745.40/month
for up to a total extended term of four (4) months (October 1, 1998- January 31,
1999), as may be necessary.
5. OPERATING EXPENSES:
Lessee shall pay Lessee's share of the operating expense increase over Base
Year, not to exceed 5% of the previous year's operating expenses.
6. NON-DISTURBANCE AGREEMENT:
For the sole benefit of Lessee and as a condition to the effectiveness of this
Lease, (which may be waived solely by Lessee), Lessor shall deliver to Lessee a
"non-disturbance agreement", as defined herein, within ten (10) business days
following execution of this Lease by Lessor and Lessee.
This Lease is and shall be prior to any encumbrance now of record and any
encumbrance recorded after the date of this Lease affecting the Premises and the
Land. If, however, any lender requires that this Lease be subordinate to any
such encumbrance, this Lease shall only be subordinate to that encumbrance if
Lessor first obtains from the lender a written agreement ("non-disturbance
agreement") that provides substantially the following:
As long as Lessee performs its obligations under this Lease, no foreclosure of,
deed in lieu of foreclosure of, or sale under the encumbrance, and no steps or
procedures taken under the encumbrance, shall affect Lessee's rights under this
Lease.
Lessee shall attorn to any purchaser at any foreclosure sale, or to any grantee
or transferee designated in any deed given in lieu of foreclosure. Lessee shall
execute the non-disturbance agreement and any other documents required by the
lender to accomplish the purposes of this Paragraph 5.
7. SIGNAGE:
Lessor is pursuing monument signage approval by the city of Mountain View.
Exterior signage is subject to city approval and zoning restrictions.
If approved, Lessor grants Lessee, at Lessee's cost, the right to install
Lessee's sign according to Lessor's final exterior building signage program
approved. Lessor, at Lessor's cost, shall provide the monument. Lessee, at
Lessee's cost, shall provide Lessee's signage on the monument.
Lessor, at Lessor's cost, shall provide the building lobby signage according to
building standards.
<PAGE> 20
8. OPTION TO EXTEND:
Lessor grants Lessee one (1) three (3) year option to extend under the same
terms and conditions as the underlying Lease, including rent, which shall be at
then Fair Market Value (FMV).
Lessee to notify Lessor, in writing, eight (8) months prior to the end of the
initial term, if Lessee is to exercise their option. Lessor to provide within
thirty (30) days from receipt of Lessee's notification, the FMV for the
Premises. Lessee shall have ten (10) working days thereafter to agree to proceed
with the option. If Lessee does not notify Lessor within this time, this option
shall be null and void.
Fair Market Value (FMV) for Base Rental shall mean the "fair market" Base Rent
at the time or times in question for the applicable space, based on the
prevailing rentals then being charged to tenants in the Building and tenants in
other office buildings in Mountain View, California of comparable size,
location, quality and age as the Building for leases with terms equal to the
Extension Period, taking into account the creditworthiness and financial
strength of the tenant, the financial guaranties provided by the tenant (if
any), the value of market concessions (including the value of construction,
renovation, moving and other allowances or rent credits), the desirability,
location in the building, size and quality of the space, tenant finish allowance
and/or tenant improvements, included services, operating expenses and tax and
expense stops or other escalation clauses, and brokerage commissions, for the
space in the Building for which Fair Market Base Rental is being determined and
for comparable space in the buildings which are being used for comparison. Fair
Market Base Rental shall also reflect the then prevailing rental structure for
comparable space and for comparable lease terms includes periodic rental
adjustments or escalations, Fair Market Base Rental shall reflect such rental
structure.
(b) Lessor and Lessee shall endeavor to agree upon the Fair Market Base
Rental. If they are unable to so agree within thirty (30) days after receipt by
Lessor of Lessee's notice of exercise of the Extension Option, Lessor and Lessee
shall mutually select a licensed real estate broker who is active in the leasing
of office space in the general vicinity of the Property. Lessor shall submit
Lessor's determination of Fair Market Base Rental and Lessee shall submit
Lessee's determination of Fair Market Base Rental to such broker, at such time
or times and in such manner as Lessor and Lessee shall agree (or as directed by
the broker if Lessor and Lessee do not promptly agree). The broker shall select
either Lessor's or Lessee's determination as the Fair Market Base Rental, and
such determination shall be binding on Lessor and Lessee. If Lessee's
determination is selected as the Fair Market Base Rental, then Lessor shall bear
all of the broker's cost and fees. If Lessor's determination is selected as the
Fair Market Base Rental, then Lessee shall bear all of the broker's cost and
fees.
(c) In the event the Fair Market Base Rental for the Extension Period has
not been determined at such time as Lessee is obligated to pay Base Rent for the
Extension Period, Lessee shall pay as Base Rent pending such determination, the
Base Rent in effect for such space immediately prior to the Extension Period;
provided, that upon the determination of the applicable Fair Market Base Rental,
any shortage of Base Rent paid, shall be paid to Lessor by Lessee.
(d) In no event shall the Base Rent during the Extension Period be less
than the Base Rent in effect immediately prior to the Extension Period.
<PAGE> 21
9. TENANT IMPROVEMENTS:
Lessor shall provide the tenant improvements as defined in the attached Exhibit
C documents according to building standard including the side lights in the new
perimeter executive offices. Lessee, at Lessee's cost, shall be responsible for
the tenant improvement cost above the tenant improvement allowance of $205,464
for a total of $5,082.00, due and payable within thirty (30) days of Lessor
invoicing Lessee, but in no event due earlier than September 15, 1998.
ACKNOWLEDGED AND AGREED TO:
LESSOR:
ASSET GROWTH PARTNERS, LTD.
By: KH REALTY 3, INC.
General Partner
By: /s/ Thomas J. Rees, Pres. Date: June 11, 1998
----------------------------------- ---------------
Thomas J. Rees, President
LESSEE:
SAGENT TECHNOLOGY, INC.
By: /s/ Kenneth C. Gardner Date: June 9, 1998
----------------------------------- ---------------
Kenneth C. Gardner
Its:
President & CEO
<PAGE> 1
EXHIBIT 10.10
DEVELOPMENT AND LICENSING AGREEMENT
This Development and Licensing Agreement ("Agreement") is made by and
between Abacus Concepts, Inc. ("Abacus"), a California corporation and Sagent
Technology Inc., a California corporation ("Sagent"). Together, Sagent and
Abacus are the only parties hereto. The parties' respective addresses are set
forth on the signature page hereof.
WHEREAS, Abacus develops and markets computer software;
WHEREAS, Abacus owns and/or has rights to certain software that is
compatible with the Microsoft Windows operating system and other software; and
WHEREAS, Sagent and Abacus desire to incorporate certain Abacus software
into that certain Sagent Product as defined below that will be compatible with
the Microsoft Windows operating systems.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 "Affiliate" of a Person means a Person (a) which controls, directly or
indirectly, the first Person, (b) which is controlled, directly or indirectly,
by the first Person, or (c) which is controlled, directly or indirectly, by any
Person qualifying as an Affiliate under clause (a) or (b) above.
1.2 "Advance Royalty Payment" means the aggregate amount of $75,000 payable by
Sagent to Abacus in one advance payment pursuant to section 5.2 of this
Agreement.
1.3 "Agreement" means this Development and Licensing Agreement, as amended,
supplemented, or modified from time to time by the parties in writing.
1.4 "Arbitration Panel" shall have the meaning ascribed to such term in Section
11.1 hereof.
1.5 "Abacus Software" means the SV Software and WB Software.
1.6 "Code" means the United States Bankruptcy Code, as set forth in Title 11 of
the United States Code, as amended from time to time.
1.7 "Confidential Information" means any information, including, without
limitation, any technical information and any information relating to the
present and future business operations or financial condition of the party
disclosing the information, whether such information is written or oral,
including, but not limited to, market information, technical information, data,
devices, trade secrets, techniques, concepts, samples, plans, methods, financial
information, packaging information, formulae, recipes, processes, instructions,
outlines of processes, component parts,
<PAGE> 2
marketing strategies, projections, matters of a business nature (such as
development and improvement of specifications, requirements and preferences,
costs and prices, feasibility studies, research data related to the business of
the disclosing party, methods of conducting business, and systems), all other
items related to the operations and plans (whether current or in development) of
the disclosing party which is marked as confidential at the time of disclosure,
disclosed by one party to the other pursuant to this Agreement. "Confidential
Information" does not include information that (a) is or becomes generally known
or available by publication, commercial use, or otherwise through no fault of
the receiving party; (b) was known by the receiving party at the time of
disclosure by the disclosing party as evidenced by competent written proof; (c)
is independently developed by the receiving party without use of the disclosing
party's Confidential Information; (d) is lawfully obtained from a third party
who has the right to make such disclosure without breaching an obligation of
confidentiality; (e) is publicly disclosed by the disclosing party in writing;
or (f) is obligated to be produced by the receiving party under an order of a
court of competent jurisdiction, or valid administrative or congressional
subpoena, or otherwise pursuant to applicable law, so long as the receiving
party provides the disclosing party adequate notice prior to such production to
enable the disclosing party to take steps to protect the information from
disclosure.
1.8 "Effective Date" means the date that this Agreement is executed by the
parties, or, if executed on different dates, the date corresponding to the date
on which the final party executes this Agreement.
1.9 "Error" means defect or bug in the Abacus Software delivered to Sagent which
prevents it from performing in accordance with the Specifications and end-user
documentation provided by Abacus.
1.10 "Net Receipts" shall mean the total amounts invoiced by Sagent to customers
with respect to sales of the Abacus Software or Derivative Works, less (i)
freight, packaging, handling or other reasonable shipment expenses, (ii) sales,
use, value-added, excise and other taxes, (iii) insurance, (iv) customs duties
and other governmental charges, (v) cash or trade discounts, (vi) returns or
credits, (vii) bad debts, and (viii) other similar expenses.
1.11 "Person" means any individual, company, corporation, firm, partnership,
joint venture, association, organization, or trust, in each case whether or not
having a separate legal identity.
1.12 "Sagent Product" means any and all commercial versions of that Sagent
product known as Sagent Information Studio or any other future Sagent product in
which the Abacus Software is incorporated by Sagent, in whole or in part
(including any Sagent product manufactured by Sagent for a third party or by
such third party under a license from Sagent which software are distributed
under such third party's name).
1.13 "Source Code" means the human level intelligible instructions regarding the
WB Software module expressed in the high-level technical and specialized
programming language in which the WB Software module was written. Source Code
shall be deemed also to include the computer programming language and all
programmers comments included in the instructions.
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<PAGE> 3
1.14 "Source Materials" means the human intelligible source code listing and
instructions to StatView InstallShield provided by Abacus to enable a reasonably
competent computer programmer to install Abacus Software.
1.15 "Specifications" means the specifications for design and development of the
Abacus Software attached to this Agreement in Addendum 1.
1.16 "SV Software" means Abacus's StatView software, Version 4.55 as modified by
Abacus pursuant to Section 2 and all International versions including Abacus's
electronic end-user instructions training an end-user customer to use same and
any new versions thereof.
1.17 "Term" means the term of this Agreement, as it may be extended or earlier
terminated in accordance with Sections 9.1 and 9.2 hereof.
1.18 "WB Software" means Abacus's White Birch Software module as developed by
Abacus pursuant to Section 2.
2. DEVELOPMENT OF ABACUS SOFTWARE
2.1 PREPARATION OF PROJECT PLAN. Abacus shall prepare and submit to Sagent a
project plan ("Project Plan") for the development of the Abacus Software by
February 28, 1997. The Project Plan shall include the following:
(a) a listing of all items to be delivered to Sagent under this
Agreement ("Deliverables");
(b) a delivery schedule containing milestones for each Deliverable;
and
(c) acceptance tests and criteria for each Deliverable.
Abacus and Sagent have agreed on the Specifications for the Abacus
Software as set forth in Addendum 1 attached hereto. Upon delivery of the
Project Plan by Abacus, Sagent shall have fifteen (15) days in which to review
and approve the Project Plan which such approval shall not be unreasonably
withheld. Upon written approval of the Project Plan by both parties, it will be
marked as Addendum 2 and will be deemed by both parties to have become a part of
this Agreement and will be incorporated by reference. Addendum 2 shall consist
of the following items: Part A - Deliverables, Part B - Milestones and Delivery
Schedule, and Part C - Acceptance Tests and Criteria. If the parties fail to
agree on the Project Plan, the Agreement shall terminate and Abacus shall return
the Advance Royalty Payment.
2.2 DEVELOPMENT OF ABACUS SOFTWARE. Upon delivery of the Project Plan and
receipt of all sums due therefor, Abacus shall commence development of the
Abacus Software that will substantially conform to the requirements set forth in
the Specifications. Abacus is not obligated to develop the Abacus Software
hereunder, and Sagent has not contracted for any development, unless and until
each part of all Addenda are executed by both parties and attached hereto.
-3-
<PAGE> 4
2.3 DELIVERY. For any Deliverable covered by Addendum 2, such Deliverable shall
be delivered on magnetic media in object code format. Delivery shall take place
at a mutual acceptable time and format pursuant to the applicable milestone as
set forth in Part B of Addendum 2. In consideration of Abacus' development with
respect to any Addendum, Sagent shall pay Abacus as set forth in Section 5 of
this Agreement.
2.4 ACCEPTANCE. Sagent shall have thirty (30) days from the date of delivery of
each Deliverable to inspect, test and evaluate it to determine whether the
Deliverable satisfies the acceptance criteria in accordance with procedures set
forth in Part C of Addendum 2, or as established by Abacus and approved by
Sagent prior to testing. If the Deliverable does not satisfy the acceptance
criteria, Sagent shall give Abacus written notice stating why the Deliverable is
unacceptable. Abacus shall have thirty (30) days from the receipt of such notice
to correct the deficiencies. Sagent shall then have fifteen (15) days to
inspect, test and evaluate the Deliverable. If the Deliverable still does not
satisfy the acceptance criteria, Sagent shall have the option of either (1)
repeating the procedure set forth above, or (2) terminating this Agreement
pursuant to Section 9 of this Agreement whereupon Abacus shall return to Sagent
the Advance Royalty Payment except as provided in Section 5.2. If Sagent does
not give written notice to Abacus within the initial thirty (30) day inspection,
testing and evaluation period or any extension of that period, that the
Deliverable does not satisfy the acceptance criteria, Sagent shall be deemed to
have accepted the Deliverable upon expiration of such period.
2.5 DESIGN REVIEW AND SPECIFICATION CHANGES. The parties acknowledge that there
may be additions, deletions or other changes which may affect Abacus's
development of the Abacus Software at any time during the term of this
Agreement. Upon written notice of such desired changes by either party, Abacus
and Sagent shall work together to make any necessary changes to the Project
Plan. Other than as set forth herein, each Part of any Addendum (including
Addendum 2) may change only upon the parties' mutual written agreement.
2.6 OWNERSHIP AND LICENSE OF ABACUS SOFTWARE. Abacus shall be the sole owner of
the Abacus Software. Sagent shall retain no right, title or interest therein
whatsoever other than the license set forth herein and ownership of any changes
made by Sagent to the Source Code. Sagent is the sole owner of the Sagent
Product subject to Abacus's exclusive ownership of and rights in the underlying
Abacus Software.
2.7 WARRANTY, DEFECTS AND REPAIRS. Abacus warrants that the Abacus Software will
substantially conform to the Specifications for ninety (90) days following the
delivery of any master copy of the Abacus Software to Sagent and following the
delivery of any copy of the Abacus Software to an end-user customer as
contemplated by this Agreement. Sagent shall promptly notify Abacus of any
nonconformance to the foregoing warranty. In the event of any nonconformance to
the foregoing warranty as reported in writing to Abacus by Sagent, Abacus will
promptly use its reasonable commercial efforts to test and confirm any reported
Error and will thereafter, at its sole option and expense, (i) promptly repair
or replace the nonconforming Abacus Software, or (ii) in the case of a warranty
claim by an end-user customer, accept return of the nonconforming Abacus
Software and refund to Sagent the applicable royalty fee received by Abacus for
the nonconforming copy of the Abacus Software. Abacus shall use its reasonable
commercial efforts to commence testing of any reported Error(s) no later than
the first working
-4-
<PAGE> 5
day after its receipt of written notice of the nonconformity. The warranty set
forth in this Section 2.7 shall not apply if: (a) the Abacus Software is not
used in accordance with the end-user documentation and the nonconformance is
caused by such use; or (b) the Error is caused by a modification or extension
not made by Abacus or its authorized representative; or (c) the Error is caused
by installation of the Abacus Software in an operating or hardware environment
for which the Abacus Software has not been licensed; or (d) the Error is caused
by a third-party software malfunction.
3. SUPPORT
3.1 SAGENT OBLIGATIONS. Sagent will provide direct first level technical support
for the Abacus Software to end-user customers acquiring the Abacus Software from
Sagent or its distributions as provided by this Agreement. Such support shall
include answering product use questions, diagnosing problems and using
reasonable efforts to provide solutions to problems.
3.2 TECHNICAL SUPPORT. For the consideration set forth in Section 5.4, during
the term hereof Abacus shall provide Sagent (and Sagent only), during Abacus'
ordinary business hours, with the amount of telephone support for the Abacus
Software in accordance with Addendum 3. Sagent shall pay for all documented
telephone toll charges incurred by Abacus in providing such telephone support.
All such support shall be subject to the reasonable availability of qualified
Abacus personnel at Abacus' headquarters facility.
Notwithstanding the foregoing, Abacus shall have no obligation to
support (i) altered, damaged or modified Abacus Software provided such
modifications were not made by Abacus or its authorized representative; (ii)
Errors caused by Sagent's negligence, hardware malfunction or other causes
beyond the reasonable control of Abacus; or (iii) Abacus Software installed in
an operating environment or in a hardware environment for which the Abacus
Software has not been licensed.
4. LICENSE OF ABACUS SOFTWARE BY SAGENT, SOURCE CODE RELEASE AND
OBLIGATIONS OF THE PARTIES
4.1 MODIFICATION LICENSE. Abacus hereby grants to Sagent, under all of Abacus's
intellectual property rights in and to the WB Software, a limited non-exclusive,
non-transferable, irrevocable, license to use, reproduce and prepare derivative
works of the Source Code (the "Derivative Works") for the sole purpose of
creating, maintaining and enhancing Sagent products for use in connection or
conjunction with the Sagent Products.
4.2 OBJECT CODE REPRODUCTION LICENSE. Abacus hereby grants to Sagent, under all
of Abacus's intellectual property rights in and to the Abacus Software, a
non-exclusive, non-transferable, license to reproduce, in object code format
only, the Abacus Software and/or Derivative Works.
4.3 DISTRIBUTION LICENSE. Abacus hereby grants to Sagent, under all of Abacus's
intellectual property rights in and to the Abacus Software, a non-exclusive,
non-transferable license to distribute copies, in object code format, of the
Abacus Software and/or Derivative Works for use in connection or conjunction
with the Sagent Product.
-5-
<PAGE> 6
4.4 DOCUMENTATION. Abacus shall provide Sagent with an electronic version of the
end-user documentation for the Abacus Software (the "Documentation"). Abacus
hereby grants to Sagent a non-exclusive, non-transferable, license to use,
reproduce, and distribute the Documentation and to modify, create derivative
works and distribute those derivative works of the documentation to end-users of
the Abacus Software.
4.5 USE OF SOURCE CODE. Sagent shall use the Source Code under carefully
controlled conditions in accordance with and for the limited purposes of this
Agreement, and to inform those employees who are given access to the Source Code
by Sagent that such materials are confidential and proprietary information of
Abacus and disclosed to Sagent as such.
4.6 SAGENT OBLIGATIONS. Sagent shall:
(a) use its reasonable commercial efforts to distribute the Abacus
Software in conjunction or combination with the Sagent Product;
(b) maintain on its staff qualified individuals trained in the use,
demonstration, application and service of Abacus Software;
(c) be responsible for coordinating all warranty claims and product
service for Abacus Software sold in any Sagent Product;
(d) in consideration of the development, use and support the Abacus
Software, pay Abacus all payments as set forth in Section 5 of
this Agreement;
(e) prior to Abacus beginning development of the Abacus Software,
promptly loan to Abacus three (3) Pentium Pro computer systems,
including monitors, mouse and keyboards, in configurations that
Sagent uses in the normal course of its software development
activity. The parties acknowledge and agree that these computers
shall be for Abacus' use through final acceptance of the Abacus
Software as set forth in Part B of Addendum 2 and will be
returned to Sagent thereafter;
(f) be responsible for creating all end-user documentation for Abacus
Software as distributed in conjunction or combination with the
Sagent Product; and
(g) be responsible for engineering the installation of Abacus
Software as contemplated by this Agreement.
4.7 ABACUS OBLIGATIONS. Abacus shall:
(a) provide Sagent with master copies of the Abacus Software in order
for Sagent to incorporate such Abacus Software into Sagent
Product;
(b) provide Sagent with reasonable technical support and assistance
and necessary technical data and other information which
facilitate the incorporation of the Abacus
-6-
<PAGE> 7
Software into the Sagent Product and the configuration of the
Abacus Software with the Sagent Product;
(c) provide Sagent with the most current electronic end-user
documentation for the SV Software. Abacus shall retain all
rights, title and interest therein whatsoever;
(d) provide Sagent with one copy of the current Source Materials in
order for Sagent to install Abacus Software as contemplated by
this Agreement; and
(e) use its reasonable efforts to ensure that updated or revised
versions of the SV Software shall be made available to Sagent no
later than ninety (90) days after such revised version's initial
publication to the general public
4.8 SALES BY SAGENT. Sagent shall sell Abacus Software as distributed in
conjunction or combination with the Sagent Product at prices and on terms which
Sagent determines in its discretion.
4.9 LICENSE OF SOURCE MATERIALS. Abacus also grants a limited, nonexclusive,
nontransferable license without right to sublicense, to read and use the Source
Materials for the sole purpose of installing Abacus Software for end-users as
contemplated by this Agreement. Sagent shall retain no right, title or interest
therein whatsoever other than the license set forth herein.
4.10 TRADEMARKS. "Abacus Concepts," "StatView" and "White Birch" (hereinafter
"Trademark" or "Trademarks") and any other trademarks and service marks adopted
by Abacus to identify the Abacus Software belong to Abacus; Sagent will have no
rights in such marks except as expressly set forth herein and as specified in
writing from time to time. Abacus grants Sagent the right to use the Trademarks
in its marketing and distribution of the Abacus Software as contemplated by this
Agreement. Sagent's use of the Trademarks shall be under Abacus's trademark
policies and procedures in effect from time-to-time. Sagent agrees not to use
the Trademarks or any other mark likely to cause confusion with the Trademarks
as any portion of the Sagent's tradename, trademark for the Sagent Product, or
trademark for any other products of Sagent. Sagent shall have the right to use
the Trademarks solely to refer to the Abacus Software.
Sagent agrees with respect to each registered trademark of Abacus, to
include in each advertisement, brochure, or other such use of the trademark, the
trademark symbol "circle R" and the following statement:
____________________ is a registered trademark of Abacus Concepts, Inc.,
Berkeley, California
Unless otherwise notified in writing by Abacus, Sagent agrees, with
respect to every other trademark of Abacus, to include in each advertisement,
brochure, or other such use of the trademark, the symbol "TM" and the following
statement:
____________________ is a trademark of Abacus Concepts, Inc.,
Berkeley, California
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<PAGE> 8
Sagent shall not market the Abacus Software in any way which implies
that the Abacus Software are the proprietary product of Sagent or of any party
other than Abacus.
5. PAYMENT
5.1 DEVELOPMENT FEE. In consideration of Abacus' development work and
performance hereunder, Sagent shall pay the sum [*] Dollars ($[*]) to Abacus
as follows:
(a) $[*] due and payable upon Sagent's approval of the Project
Plan which such approval shall not be unreasonably withheld;
(b) $[*] due and payable at a mutually agreeable midway point as
defined in Part B of Addendum 2; and
(c) $[*] due and payable upon delivery and acceptance of the final
version of the Abacus Software as set forth in Part B of Addendum
2.
5.2 ADVANCE ROYALTY PAYMENT. In the event that the final version of the Abacus
Software does not satisfy the acceptance criteria in accordance with the
procedures set forth in Part C of Addendum 2 by December 31, 1997, provided that
the Project Plan is not amended in writing by the parties pursuant to Section
2.5 of this Agreement, Sagent shall have the right to terminate this Agreement
and receive a refund of the Advance Royalty Payment. Notwithstanding the
foregoing, in the event that Sagent has pre-sold the Abacus Software prior to
the delivery of the final version, the Advance Royalty Payment shall
automatically become nonrefundable.
5.3 ROYALTY FEES. For each and every copy of Abacus Software and/or Derivative
Work as distributed in conjunction or combination with the Sagent Product which
Sagent or a third party under a license from Sagent distributes (directly or
indirectly) to a third party, Sagent shall pay Abacus [*] percent ([*]%) of
Sagent's Net Receipts for such Abacus Software or Derivative Work as distributed
in conjunction or combination with the Sagent Product. On the Effective Date of
this Agreement, Sagent shall pay Abacus an advance royalty payment in the amount
of $[*] ("the Advance Royalty Payment"). The Advance Royalty Payment will be
offset against any royalty payments payable to Abacus pursuant to this Section
5.2. Any royalty payments payable to Abacus pursuant to this Section 5.2 in
excess of the Advance Royalty Payment will be paid to Abacus quarterly within
forty-five (45) days after the end of each calendar quarter. Within forty-five
(45) days after the end of each calendar quarter, Sagent will send Abacus a
written report on the distribution of all copies of Abacus Software in
conjunction or combination with the Sagent Product during the quarter. Each
report will specify (i) the number of copies of the Sagent Product distributed,
itemized by version and name; (ii) the total applicable royalties; (iii) the
amount of any unused Advance Royalty Payments being credited; and (iv) the net
amount due Abacus. If no royalties are owed for any quarter, such fact shall be
stated.
Abacus will have the right, not more than once per calendar year during
the term of this Agreement through an independent certified public accountant
reasonably acceptable to Sagent, upon not less than fifteen (15) days prior
written notice to Sagent, to conduct a review at Sagent's
-8-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 9
principal business offices of all Sagent's books and records relating to
Sagent's sale and distribution of the Sagent Product to which royalties are
related, in which instance Sagent shall reasonably cooperate with Abacus in
making all such records available. If any such audit uncovers a shortfall in
royalty payments hereunder in excess of ten percent (10%) for the audited period
(and no audit shall occur (a) more than once in any 12 month period and (b) for
any period which was previously audited), all expenses of such audit shall be
paid by Sagent.
5.4 SUPPORT FEES. In consideration of the support services as set forth in
Section 3.2, Sagent shall pay Abacus the annual support fee set forth in
Addendum 3 attached hereto and made a part hereof. Such annual support fee shall
be paid in advance of the term in which support services are
to be provided; such support services are expressly conditioned upon the prior
receipt of such fee. Such support shall be provided for one (1) year beginning
ninety (90) days from the acceptance of the final version of the Abacus Software
and shall be extended each year thereafter for an additional one (1) year term
unless terminated by either party at the end of the original support term or at
the end of any renewal support term by giving the other party written notice at
least ninety (90) days prior to the end of any such support term; provided that
Abacus shall not terminate its support services for the three (3) year term of
this Agreement except for a failure to pay the annual support fees on the part
of Sagent. In the event Sagent fails to make any payment or otherwise elects to
discontinue the support services except due to a breach by Abacus of its support
obligations, then to reinstate or renew such services, Sagent must first pay
Abacus the current annual support fee and all past support fees. Said support
fee may be increased annually by not more than the increase in the Consumer
Price Index for the applicable period, and any increase shall be upon at least
thirty (30) days prior written notice. If Abacus changes the annual maintenance
fees in the middle of any maintenance period, said change shall not apply to the
maintenance services provided during such period.
5.5 BUNDLES. Sagent may license or distribute the Abacus Software and/or
Derivative Work as part of a package or bundle with the Sagent Product. The
price of the Abacus Software or Derivative Work, as the case may be, for the
purposes of computing royalties hereunder shall be: (the standard Sagent retail
price of the Abacus Software or Derivative Works, as the case may be, in the
bundled product divided by the standard retail price of all separately
obtainable products in the bundle, including the Abacus Software or Derivative
Works, in the bundled product) multiplied by (the actual retail price of the
bundled product charged by Sagent for the bundled product).
6. REPRESENTATIONS AND WARRANTIES
6.1 SAGENT. Sagent represents and warrants as follows: (a) Sagent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California; (b) Sagent has all requisite corporate power and
authority to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement; (c) this Agreement has been duly
authorized, executed and delivered by Sagent and is a valid and binding
obligation of Sagent enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency moratorium, and other laws of
general application affecting the enforcement of creditors' rights; and (d) the
execution, delivery, and performance of and compliance with this Agreement does
not and will not conflict with, or constitute a default under, or result in the
creation of, any mortgage, pledge, lien, encumbrance, or charge upon any of the
properties or assets of
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Sagent, nor result in any violation of (i) any term of Sagent's articles of
incorporation or bylaws, (ii) in any material respect, any term or provision of
any mortgage, indenture, contract, agreement, instrument, judgment or decree or
(iii) to the best of Sagent's knowledge, any order, statute, rule or regulation
applicable to Sagent, the violation of which would have a material adverse
effect on Sagent's business or properties.
6.2 ABACUS. Abacus represents and warrants as follows: (a) Abacus is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of California; (b) Abacus has all requisite corporate power
and authority to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement including, but not limited to, the
right to grant the licenses granted herein; (c) the Abacus Software does not
infringe any United
States patent existing as of the Effective Date, copyright, trademark, or other
intellectual property right of any third Person; (d) this Agreement has been
duly authorized, executed, and delivered by Abacus and is a valid and binding
obligation of Abacus enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, moratorium, and other laws of
general application affecting the enforcement of creditors' rights; and (e) the
execution, delivery, and performance of and compliance with this Agreement does
not and will not conflict with, or constitute a default under, or result in the
creation of, any mortgage pledge, lien, encumbrance or charge upon any of the
properties or assets of Abacus, nor result in any violation of (i) any term of
Abacus's certificate of incorporation or bylaws, (ii) in any material respect,
any term or provision of any mortgage, indenture, contract, agreement,
instrument, judgment or decree or (iii) to the best of Abacus's knowledge, any
order, statute, rule or regulation applicable to Abacus, the violation of which
would have a material adverse effect on Abacus's business or properties.
7. DISCLAIMER AND LIMITATION OF LIABILITIES
7.1 DISCLAIMER. EXCEPT AS SET FORTH IN THIS AGREEMENT, ABACUS MAKES NO
WARRANTIES, EITHER EXPRESS OR IMPLIED, CONCERNING THE ABACUS SOFTWARE, AND
HEREBY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.
7.2 LIMITATION OF LIABILITY. EXCEPT FOR ABACUS'S OBLIGATIONS UNDER SECTION 8
BELOW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON FOR
ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ABACUS SOFTWARE, EVEN IF INFORMED OF THE POSSIBILITY
THEREOF IN ADVANCE. EXCEPT FOR ABACUS'S OBLIGATIONS UNDER SECTION 8 BELOW, IN NO
EVENT WILL ABACUS'S LIABILITY IN CONNECTION WITH THE ABACUS SOFTWARE OR THIS
AGREEMENT EXCEED AMOUNTS PAID TO ABACUS BY SAGENT HEREUNDER. THESE LIMITATIONS
APPLY TO ALL CAUSES OF ACTION IN THE AGGREGATE.
8. INDEMNITY
8.1 INDEMNITY. Abacus shall at its expense, defend, or at its option, settle any
claim, demand, suit or proceeding made or brought against Sagent for
infringement of any United States patent
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<PAGE> 11
existing, as of the Effective Date, copyright, trade secret, trademark or any
other intellectual property right by the use, reproduction and distribution of
the Abacus Software by Sagent in accordance with this Agreement and shall pay
any settlements entered into or damages awarded against Sagent to the extent
based on such a claim. Abacus's obligations under this section shall only apply
if (1) Sagent promptly notifies Abacus in writing as soon as Sagent becomes
aware of any actual or threatened infringement claim and (2) grants Abacus
exclusive control over its defense and settlement. The foregoing obligation in
this Section 8 will cover only those releases of the Abacus Software delivered
hereunder, but under no circumstances shall it cover any modifications made
based on specifications provided by Sagent or any third party if the
infringement would have been avoided without such modifications.
Notwithstanding the foregoing, Abacus's obligations under this Section 8
will not cover claims that the Abacus Software infringes any third party's
rights (i) as used in combination with any software or hardware not supplied by
Abacus if such claim could have been avoided but for such combination and/or
(ii) if the Abacus Software has been modified by Sagent if such claim could have
been avoided but for such modification.
If an infringement claim is asserted or if Abacus believes one likely,
Abacus will have the right, but not the obligation at its sole expense, to
procure a license from the person claiming or likely to claim infringement or
otherwise to take steps to modify the Abacus Software to avoid the claim of
infringement. In such case, modification of the Abacus Software for this purpose
shall not materially impair the operation of the Abacus Software for use with
the Sagent Product.
9. TERM AND TERMINATION
9.1 TERM. The Term of this Agreement shall be for three (3) years starting with
the Effective Date (the "Initial Term"), and shall automatically renew for
additional, consecutive terms of one (1) year each as of the anniversary date
starting with the expiration of the Initial Term, unless either party provides
the other with written notice at least ninety (90) days prior to the expiration
of the then current term of such party's intent to terminate the Agreement, in
which case this Agreement shall terminate as of the then current term's
expiration date.
9.2 TERMINATION FOR CAUSE. Either party shall have the right to terminate this
Agreement immediately upon written notice at any time if (a) the other party is
in breach of any material warranty, term, condition, or covenant of this
Agreement, and such breaching party fails to cure such breach within thirty (30)
calendar days following its receipt from the nonbreaching party of a written
notice to the breaching party of the breach and of the non-breaching party's
intention to terminate unless such breach is cured within such 30 days; or (b)
the other party (i) becomes insolvent, (ii) fails to pay its debts or perform
its obligations in the ordinary course of business as they mature, (iii) admits
in writing its insolvency or inability to pay its debts or perform its
obligation as they mature, or (iv) makes an assignment for the benefit of
creditors.
9.3 EFFECT OF TERMINATION. Upon any termination or expiration of this Agreement,
all licenses granted to Sagent with respect to the WB Software (including Source
Code) shall survive. In addition, the following sections shall also survive;
2.6, 5.3, 6, 7, 8, 9, 10, 11, 12, and 13. No such termination or expiration will
relieve either party from any liability arising from any breach of this
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<PAGE> 12
Agreement occurring prior to termination. Neither party will be liable to the
other party or any third party for damages of any sort solely as a result of
terminating this Agreement in accordance with its terms. Upon termination,
amounts payable or accrued to Abacus under this Agreement shall become
immediately due and payable.
10. CONFIDENTIALITY
Each party will protect the other's Confidential Information from
unauthorized dissemination and use with the same degree of care that each party
uses to protect its own like information but in no event less than reasonable
care. Neither party will use the other's Confidential Information for purposes
other than those necessary to further the purposes of this Agreement. Neither
party will disclose to third parties the other's Confidential Information
without the prior written consent of the other party. The parties' obligations
hereunder with respect to Confidential Information shall survive the expiration
or earlier termination of this Agreement. Source Code and Source Materials shall
automatically be considered Confidential Information.
11. ARBITRATION
11.1 ARBITRATION. Except as set forth in this Section 11, any claim or
controversy arising out of, under, or related to this Agreement, any breach
thereof or any causes of action or claims the parties have with respect thereto,
which claim or controversy cannot be resolved informally, shall be settled in
Palo Alto, California by arbitration before a single arbitrator agreeable to
both parties under the then current commercial rules of the American Arbitration
Association. If the parties cannot agree on an arbitrator within sixty (60) days
after a demand for arbitration has been requested in writing by either of them,
then arbitration shall proceed before a single arbitrator appointed by the
American Arbitration Association under its then current commercial rules. Such
arbitrator shall have experience in the computer software industry and shall be
either a business executive or a lawyer who either has participated previously
in arbitration or dispute resolution proceedings. Any arbitration shall consist
of not more than three (3) days of hearings all of which shall occur within
sixty days after the arbitrator has been selected. The discovery permitted in
any arbitration shall be limited as follows: either party shall have the right
to take up to five days combined of deposition testimony (eight hour days) from
the other party's percipient witnesses (those witnesses who are listed by a
party as those persons which the party intends to call on its behalf in the
arbitration.) A party shall list all such witnesses and send such list to the
other party within ten (10) days after the arbitrator has been selected and/or
those witnesses who are third parties who may not participate in the
arbitration. Any deposition session lasting more than four hours shall count as
an eight hour day. All such discovery shall occur prior to the first arbitration
hearing date. All hearing days for any arbitration shall occur within two weeks
after the first day of such hearing. The arbitrator shall issue a written
decision with findings of fact and reason for his (her) decision within two
weeks after the final hearing date. The arbitration award shall be specifically
enforceable, and judgment upon any award rendered pursuant to the arbitration
may be entered in any court with jurisdiction over the parties and subject
matter of the dispute. Notwithstanding any other provision of this Section 11,
either party may seek injunctive relief (temporary, preliminary and/or
permanent) in a court of law for any breach by either party of the other's
proprietary rights or breach of a party's non-disclosure obligations as set
forth herein. The arbitrator shall have no right to award punitive damages or
any equitable relief of any kind.
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<PAGE> 13
11.2 FEES AND EXPENSES. In any arbitration, enforcement proceeding based
therein, or any other litigation between the parties arising out of or related
to this Agreement, the prevailing party therein shall be entitled to have its
reasonable attorneys' fees, reasonable arbitration expenses, related litigation
costs and costs of suit (if any) paid by the nonprevailing party. In the case of
arbitration, the arbitrator shall make such award; in any litigation, the court
hearing the dispute shall make such determination.
12. NOTICES
All notices, waivers, and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by prepaid certified mail or registered mail, receipt acknowledged or
hand delivery (receipt acknowledged) or dispatched (with reasonable evidence of
receipt) by telex, telegraph, or other means of electronic facsimile
transmission, or three (3) days after being sent by an internationally
recognized overnight courier service, addressed to the party to whom the notice
is intended to be given at the addresses and addressees specified below:
To Sagent: Sagent Technology, Inc.
2225 E. Bayshore Road, Ste. 100
Palo Alto, CA 94303
Telephone: (415) 493-7100
Facsimile: (415) 493-1290
Attention: Kathy Gelin
with a copy to:
Soraya N. Rashid
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
To Abacus: Abacus Concepts, Inc.
1918 Bonita Avenue
Berkeley, CA 94704-1038
Telephone: (510) 540-1949
Facsimile: (510) 540-0260
Attention: Dan Feldman
with a copy to:
J. F. Petruzzelli
Wise & Shepard LLP
3030 Hansen Way, Suite 100
Palo Alto, California 94304
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<PAGE> 14
Either party may from time to time designate a different address and addressee
as to itself by notice sent in accordance with this Section 12.
13. GENERAL
13.1 EFFECT OF BANKRUPTCY. The parties hereto expressly intend that Sagent, as a
licensee of Abacus's intellectual property, shall be afforded all of the
protections afforded to a licensee under Section 365(n) of the Code so that the
Trustee or Debtor in Possession, as defined in the Code, will not interfere with
Sagent's rights to the Abacus Software and Source Code as provided in the
Agreement, as set forth in Section 365(n) of the Code. In the event of the
bankruptcy of Abacus, Abacus shall be deemed to be the debtor/licensor under
Section 365(n) of the Code; Sagent shall be deemed to be the licensee under
Section 365(n) of the Code; the Agreement and license of the Abacus Software
thereunder shall be deemed to be an executory contract under Section 365(n) of
the Code; the Abacus Software and Source Code shall be deemed to be intellectual
property under Section 365(n) of the Code; and the Media shall be deemed to be
the embodiment of the Source Code under Section 365(n) of the Code.
13.2 FORCE MAJEURE. Neither party will be liable for any failure or delay in its
performance under this Agreement due to causes, including, but not limited to,
acts of God, acts of civil or military authority, fire, epidemic, flood,
earthquake, riot, war, sabotage, labor shortage, or dispute, and governmental
action, which are beyond its reasonable control; provided however, that the
delayed party (a) gives the other party written notice of such cause promptly,
and in any event within fifteen (15) calendar days of discovery thereof, and (b)
uses its reasonable efforts to correct such failure or delay in its performance.
13.3 INDEPENDENT PARTIES. None of the provisions of this Agreement shall be
deemed to constitute a partnership, joint venture, or any other such
relationship between the parties hereto, and neither party shall have any
authority to bind the other in any manner. Neither party shall have or hold
itself out as having any right, authority, or agency to act on behalf of the
other party in any capacity or in any manner, except as may be specifically
authorized in this Agreement.
13.4 ANNOUNCEMENTS. The parties shall consult with each other prior to making
any public announcement concerning any of the transactions contemplated in this
Agreement, and shall cooperate to issue appropriate joint press releases in
connection with the execution of this Agreement.
13.5 TAXES. In the event that taxes or fees (other than withholding taxes or
taxes on income of Abacus arising out of this Agreement) such as, but not
limited to, customs, technology transfer, sales, use, value-added, or other
taxes, duties, or imposts are imposed or levied on the parties arising out of or
related to this Agreement, Sagent shall be responsible for the payment of same.
13.6 ASSIGNMENT. The rights and liabilities of the parties hereto will bind and
inure to the benefit or their respective successors, executors, and
administrators, as the case may be; however, except to the extent expressly
provided herein, neither party may assign or delegate its obligations under this
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<PAGE> 15
Agreement, either in whole or in part, without the prior written consent of the
other, other than (i) to an Affiliate or (ii) to a Person into which it has
merged or which has otherwise succeeded to all or substantially all of such
party's business and assets to which this Agreement pertains and which has
assumed in writing or by operation of law its obligations under this Agreement.
Any attempted assignment in violation of the provisions of this Section will be
void.
13.7 APPLICABLE LAW. The validity, construction, and performance of this
Agreement will be governed by and construed in accordance with the laws of the
State of California, without regard to the principles of conflicts of law, as if
such Agreement were performed entirely within the State of California.
13.8 SEVERABILITY. If any provision of this Agreement shall be held to be
illegal, invalid, or unenforceable, such provision will be enforced to the
maximum extent permissible and the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
13.9 NO WAIVER. Failure by either party to enforce any provision of this
Agreement will not be deemed a waiver of future enforcement of that or any other
provision.
13.10 NO RIGHTS IN THIRD PARTIES. This Agreement is made for the benefit of
Sagent and Abacus and their respective Affiliates, if any, and not for the
benefit of any third parties.
13.11 MISCELLANEOUS. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which collectively will
constitute one and the same instrument. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. This Agreement will be interpreted
fairly in accordance with its terms and without any strict construction in favor
of or against either party based on draftsmanship of the Agreement or otherwise.
13.12 COMPLETE AGREEMENT. This Agreement, including all exhibits and documents
directly referenced, constitutes the entire agreement between the parties with
respect to its subject matter superseding and rendering void any and all prior
or contemporaneous understandings or agreements, written or oral, regarding such
subject matter. No amendment to or modification of this Agreement will be
binding unless in writing and signed by a duly authorized representative of both
parties.
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<PAGE> 16
IN WITNESS WHEREOF, Sagent and Abacus have executed this Agreement on
the dates noted below.
ABACUS CONCEPTS, INC.
Date: January 22, 1997 /s/ Daniel S. Feldman, Jr.
----------------------------
By: Daniel S. Feldman, Jr.
------------------------
Title: President & CEO
------------------------
SAGENT TECHNOLOGY, INC.
Date: January 22, 1997 /s/ Kenneth C. Gardner
----------------------------
By: Kenneth C. Gardner
------------------------
Title: President & CEO
------------------------
Addenda to the Development & License Agreement:
Addendum 1 - Specifications
Addendum 2
Part A - Deliverables
Part B - Milestones and Delivery Schedule
Part C - Acceptance Tests and Criteria
Addendum 3 - Support Services
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<PAGE> 17
ADDENDUM 1
SPECIFICATIONS
(FUNCTIONS, FEATURES, SYSTEMS REQUIREMENTS, DESCRIPTION OF DELIVERABLES)
PLATFORMS SUPPORTED: MICROSOFT WINDOWS 95, NT 3.51 AND 4.0
StatView for Sagent
One button launch of StatView 4.55 and subsequent versions from within
Sagent Information Studio
Sagent will integrate StatView file format. Code or specifications to be
supplied by StatView
Sagent will implement a StatView "sink" inside Information Studio to
launch StatView and opens the StatView Dataset
StatView for Sagent will only be sold to customers with Sagent's Data
Mart Server products. It will not be sold stand alone to customers who
do not own a license to other Sagent products.
White Birch - Integration of the StatView formula expression component into the
Sagent Information Studio White Birch will be delivered as a single executable
that includes:
1. User Interface, including:
A. General StatView formula interface
B. Interface for specification of attributes for calculated
variables
2. Computation engine, accessible and executable through property
sheet
This executable will be installed on both client AND server but
computation will take place solely on server.
White Birch will be in all ways functionally similar to formulas in StatView 4.5
with the exceptions noted below. Specifically, this means that:
1. For all StatView user functions that take variables as arguments,
in White Birch these user functions will take columns from Sagent
tables.
2. If the table columns in White Birch expressions are N rows long,
then the table columns resulting from White Birch calculations
will also be N rows long, even when every value in that column is
the same (e.g., Mean(Column 1)
White Birch will differ from the StatView formula component in the
following ways:
1. The computation engine will be optimized to perform a single pass
on Sagent data records wherever possible. Preferably, the UI will
allow definition of > 1 expression, and attribute specification
for each expression that is created as a consequence of this
multiple expression interface.
2. The UI and computation will support Split By functionality, thus
generating separate results for rows belonging to different
levels of nominal ordinal variables.
3. Abacus will provide interfaces through which Abacus-specific
metadata, e.g., the StatView Class attribute, can be specified.
This will be both a COM (runtime) interface and possible a UI
interface
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<PAGE> 18
as well (the latter could be made available for specification of
scheme as well as within White Birch steps). Sagent will use this
interface when writing out files to the StatView format for
one-button integration.
4. StatView expressions will be suitably parameterized to allow
Sagent-driven substitution of variables through property sheets.
White Birch specifically will not support:
1. Creation of results in summary format. For those expressions that
compute results that are not row-dependent, these could be
displayed in summary tables.
This will not be supported in this deliverable.
2. White Birch will not support an explicit interface for "binning"
continuous variables to nominal groups and other interfaces that
are specific to Recode operations that are currently supported in
StatView 4.5.
3. White Birch will not include specific interfaces for Random and
Series user functions, such as exist in StatView 4.5 for Windows.
4. White Birch will not be used as a source step in dataflow plans,
thus no interface is necessary for specifying #rows/#columns
within the formula interface.
5. Criteria/filtering functionality. This will be provided by other
dataflow steps.
To support White Birch, Sagent will provide:
1. Any optimization of sequential dataflow steps related to data
access.
2. Metadata for data in Sagent tables, including
1. Table and column names
2. Column type (Real, Integer, String, Date/Time, Currency)
3. Column length (# rows)
4. StatView Class attribute (Continuous, Nominal, Ordinal,
Informative)
THE FOREGOING ADDENDUM 1 IS AGREED TO AND ACCEPTED BY THE PARTIES:
Abacus Concepts, Inc. Sagent Technology, Inc.
Name: Daniel S. Feldman, Jr. Name: Kenneth C. Gardner
------------------------------- ----------------------------
Title: President & CEO Title: President & CEO
------------------------------- ----------------------------
Signature: /s/ Daniel S. Feldman, Jr. Signature: /s/ Kenneth C. Gardner
------------------------------- -----------------------
Date: January 22, 1997 Date: January 22, 1997
------------------------------- ----------------------------
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<PAGE> 19
ADDENDUM 2
PART A - LIST OF DELIVERABLES
THE FOREGOING PART A ADDENDUM 2 IS AGREED TO AND ACCEPTED BY THE PARTIES:
Abacus Concepts, Inc. Sagent Technology, Inc.
Name: Name:
--------------------- -----------------------
Title: Title:
--------------------- -----------------------
Signature: Signature:
--------------------- -----------------------
Date: Date:
--------------------- -----------------------
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<PAGE> 20
ADDENDUM 2
PART B - MILESTONE AND DELIVERY SCHEDULE
THE FOREGOING PART B ADDENDUM 2 IS AGREED TO AND ACCEPTED BY THE PARTIES:
Abacus Concepts, Inc. Sagent Technology, Inc.
Name: Name:
--------------------- -----------------------
Title: Title:
--------------------- -----------------------
Signature: Signature:
--------------------- -----------------------
Date: Date:
--------------------- -----------------------
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<PAGE> 21
ADDENDUM 2
PART C - ACCEPTANCE TESTS AND CRITERIA
THE FOREGOING PART C ADDENDUM 2 IS AGREED TO AND ACCEPTED BY THE PARTIES:
Abacus Concepts, Inc. Sagent Technology, Inc.
Name: Name:
--------------------- -----------------------
Title: Title:
--------------------- -----------------------
Signature: Signature:
--------------------- -----------------------
Date: Date:
--------------------- -----------------------
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<PAGE> 1
EXHIBIT 10.11
MICROSOFT LICENSE AND DISTRIBUTION AGREEMENT
THIS LICENSE AND DISTRIBUTION AGREEMENT (the "Agreement") is entered
into this 23rd day of August 1996 (the "Effective Date"), by and between
MICROSOFT CORPORATION ("Microsoft"), a Washington corporation having its
principal place of business at One Microsoft Way, Redmond, Washington
98052-6399, and SAGENT TECHNOLOGY, INC., a California corporation having its
principal place of business at 750 Menlo Avenue, Suite 300, Menlo Park,
California 94025 ("Company").
The parties agree as follows:
1. DEFINITIONS. For the purposes of this Agreement, the following terms shall
have the following meanings:
1.1 "DOCUMENTATION" shall mean the End User Documentation, VBA 5.0 Host
Integration Guide, and VBA 5.0 Host Interface Reference, which are described in
Exhibit A hereto.
1.2 "END USER" shall mean an individual or legal entity that acquires
directly or indirectly from Company, one or more Products for its own use and
not for distribution or resale to third parties.
1.3 "END USER DOCUMENTATION" means the Microsoft documentation for End
Users, which is described in Exhibit A attached hereto.
1.4 "TO INTEGRATE" OR "INTEGRATED" shall mean the inclusion of one or
more Redistributable Components as part of a Product copied onto Company's
installation media along with Company's software comprising the Product.
1.5 "LICENSED SOFTWARE" means the computer software programs that are
listed and described on Exhibit A attached hereto, including all Upgrades
thereto which are commercially released by Microsoft during the term of this
Agreement.
1.6 "LOGO" means the Designed for Visual Basic logo which is described
in the logo agreement that is attached hereto as Exhibit D.
1.7 "MASTER COPY" shall mean a diskette(s) or CD- ROM(s) containing the
software portion of the Licensed Software that are delivered by Microsoft to the
Company.
1.8 "MS PLATFORMS" shall mean Microsoft Windows 95, Microsoft Windows
NT, and their successors and all future Microsoft operating system products on
which the Licensed Software is commercially released by Microsoft during the
term of this Agreement.
<PAGE> 2
1.9 "NET RECEIPTS" shall mean the royalties, fees and other sums
received by the Company and its subsidiaries and affiliates from the direct or
indirect distribution of the Products and Upgrades, less returns and rebates,
applicable freight and sales, use and excise taxes.
1.10 "PRODUCT(S)" shall mean Company's software products which are
described in Exhibit A hereto, regardless of the product name(s) actually used
for such software products, and which: (i) Integrate the Licensed Software; (ii)
operate on the MS Platforms, and (iii) from the perspective of an End User,
contain significant added value over that of the Licensed Software. The parties
may amend the list of Products described in Exhibit B hereto upon their mutual
written consent, which shall not be unreasonably withheld.
1.11 "REDISTRIBUTABLE COMPONENTS" means the components of the Licensed
Software that are redistributable by the Company in Products and are identified
as "redistributable" in Exhibit A hereto.
1.12 "RELEASE TO MANUFACTURING" shall mean the date that Microsoft or
its authorized representative delivers the Master Copy to the Company.
1.13 "UPGRADES" shall mean upgrades, maintenance releases and
enhancements of the Licensed Software.
2. INTEGRATION AND DISTRIBUTION OF LICENSED SOFTWARE.
2.1 REPRODUCTION AND INTEGRATION OF THE LICENSED SOFTWARE. Microsoft
hereby grants the Company a non-exclusive, worldwide, perpetual (subject to the
terms of Section 8) license to use, reproduce and have reproduced the Licensed
Software and Documentation from the Master Copy as well as any Upgrades for
internal use at the Company solely in connection with the development of
Products and Integration of the Redistributable Components into such Products
for MS Platforms.
2.2 DISTRIBUTION RIGHTS TO LICENSED SOFTWARE. Upon completion of the
Integration of Licensed Software into Products, Microsoft grants Company a
non-exclusive, worldwide, perpetual (subject to the terms of Section 8) license
to use, reproduce, license or otherwise distribute, and have reproduced,
licensed or otherwise distributed to any entities, the Product and Upgrades to
End Users. The rights granted in Sections 2.1 and 2.2 may be sublicensed by the
Company to the Company's contractors, distributors and original equipment
manufacturers, provided that such parties adhere to the provisions of this
Agreement.
2.3 LICENSE TO END USER DOCUMENTATION. Microsoft hereby grants the
Company a nonexclusive, worldwide, perpetual (subject to the terms of Section 8)
license to (a) make, use, modify, adapt, translate and make technically accurate
derivative works of the End User Documentation; and (b) to reproduce, license,
transmit or otherwise distribute, and have reproduced, licensed, transmitted or
otherwise distributed by third parties, the End User Documentation and any
Company-authored derivative works thereof (which shall include all relevant
Microsoft copyrights, notices, and marks) via any digital electronic (e.g., the
Internet) or print medium in connection with the distribution of the Products.
The Company also may use a pointer on its Worldwide Web site to the
Documentation on the Internet in connection with the
2
<PAGE> 3
distribution of the Products. Notwithstanding the foregoing, the Company shall
not distribute the Documentation as part of any book or other publication for
sale separate from the Products without the written approval of Microsoft and
shall not modify, adapt, or create derivative works of the compiled "*.HLP"
files for use on the Internet. The Company shall deliver to Microsoft a copy of
all Company-authored derivative works of the End User Documentation (the
"Derivative Documents") for the sole purpose of allowing Microsoft to verify the
accuracy of such Derivative Documents.
2.4 END USER LICENSE AGREEMENTS. The Company shall have the right to
grant sublicenses to End Users to use the Products in object code form only and
Documentation on MS Platforms. For each copy or unit of a Product, Company shall
distribute an end user license agreement which includes terms that are at least
as restrictive as the terms set forth in this Agreement with respect to the use
of the Licensed Software. In particular, the Company shall include provisions in
its End User license agreements for Products preventing further redistribution
of the Redistributable Components or export of the Products to any country to
which such export or transmission is restricted by applicable U.S. regulation or
statute.
2.5 RESTRICTIONS. The rights granted in this Section 2 are subject to
the following restrictions:
(i) Company shall ship at least one full copy of the End User
Documentation, whether in the form of printed manuals or online help,
as modified by the Company pursuant to the terms of Section 2.3, to the
End User per unit of the Product or include a pointer to the End User
Documentation on the Internet in the Company's documentation for the
Product;
(ii) Company shall employ in its Licensed Software
Integration, reproduction and installation process state-of the-art
tests for virus infections to ensure that no Licensed Software will be
shipped that has been infected with a virus;
(iii) Company shall not reverse engineer, decompile or
disassemble the Licensed Software except as otherwise specifically
permitted by law;
(iv) Company shall only access documented function calls when
Integrating the Licensed Software with the Products and shall follow
the commercially reasonable installation procedures set forth in the
Logo Agreement attached hereto as Exhibit D;
(v) Company's Integration of the Licensed Software included in
the Products must not adversely affect the full functionality of the
Licensed Software. For instance, the Company shall not disable any
features of the Licensed Software included in Products. Company shall
insure that quality of reproduced Licensed Software included in the
Products is equivalent to the quality of Licensed Software and meets or
exceeds the then current applicable ISO, IEC or ANSI standards for
media and replication quality for Disk or CD-ROM media. Microsoft shall
be entitled to periodically, upon reasonable notice, inspect the
quality of reproduction. Should Microsoft be dissatisfied with the
quality of the reproduced Licensed Software, it shall so notify Company
in writing and Company shall have ten (10) days to correct such
deficiencies.
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(vi) The Company shall include the following acknowledgment in
the credit screen of the Products and in the Product documentation:
"(C)Copyright 1996, Microsoft Corporation. All rights reserved."
3. ROYALTIES AND REPORTS; AUDIT RIGHTS.
3.1 ADVANCE ROYALTY. The Company shall pay Microsoft a non-refundable
advance royalty of [*] Dollars ($[*]) by bank wire transfer to the account
listed in Section 3.3 no later than sixty (60) days after the Effective Date.
The advance royalty shall be applied against and recouped from future earned
royalties pursuant to Section 3.2.
3.2 EARNED AND MINIMUM ROYALTIES. The Company shall pay Microsoft [*]
percent ([*]%) of the Company's Net Receipts for each calendar quarter for which
the Company owes Microsoft any royalties (the "Earned Royalty"); provided, that
if the average Net Receipts for all Products licensed or sold to End Users
during any calendar quarter is less than [*] Dollars ($[*]), then the Company
shall pay Microsoft an amount equal to [*] ($[*]) per copy or unit of Product
that is sold or licensed to an End User during each such calendar quarter in
lieu of the Earned Royalty.
3.3 ROYALTY REPORTING; FINANCE CHARGE. Within 30 days after the end of
each calendar quarter, the Company shall finish Microsoft with a statement based
upon the amounts due pursuant to Section 3.2 for the quarter then ended in a
form substantially similar to Exhibit C attached hereto. The Company shall
furnish Microsoft with such a statement regardless of whether any royalties are
due for the applicable period. At the same time that the Company provides
Microsoft with a statement pursuant to this Section 3.3, it shall fax a copy of
all remittance information (i.e., name of company, date of wire transfer, amount
of wire transfer, and number of pages faxed), if any, to Microsoft at
206-936-5140, unless Microsoft notifies the Company in writing that such fax
number has changed. The day after the Company provides such remittance
information by fax to Microsoft, it shall remit payment for all royalties due by
bank wire transfer to the following account, unless Microsoft notifies the
Company in writing of a change in such account:
First Interstate Bank of Washington
Seattle Main Branch
ABA: #125 000 286
Beneficiary: Microsoft Corporation
Account No. 001 025865
A finance charge of one percent (1%) per month shall be assessed on all amounts
that are past due.
3.4 PRODUCT BUNDLES. Subject to prior written approval from Microsoft,
which approval shall not be unreasonably withheld, the Company may license or
distribute Products as part of a package or bundle with other products or
services. The price of such Products for the purposes of computing royalties
hereunder shall be: (the standard retail price of such Products in the bundled
product divided by the standard retail price of all separately obtainable
products in the
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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bundle, including such Products, in the bundled product) multiplied by (the
price of the bundled product).
3.5 INTERNAL USE. No royalty shall be due Microsoft in connection with
the use of the Products, Licensed Software and Documentation by the Company or
its contractors for internal purposes authorized under the terms of this
Agreement or for use of the Products by the Company, its contractors, or
prospective End Users, analysts or developers for developmental use, test,
evaluation, market development, education or other promotional or non-production
purposes in the usual course of the business of the Company.
3.6 AUDIT RIGHTS. During the term of this Agreement and for two years
thereafter, Company agrees to keep all usual and proper records and books of
account and all usual and proper entries relating to the Products and the
Licensed Software. Records and books of account include, but are not limited to
information regarding the number of Product units distributed and the names and
addresses of End Users. Microsoft may cause an audit and/or inspection to be
made of the applicable Company records and facilities in order to verify
statements issued by Company and Company's compliance with the terms of this
Agreement. Any such audit shall be conducted by an independent certified public
accountant selected by Microsoft (other than on a contingent fee basis). Such
independent certified public accountant shall provide a summary of its findings
regarding its verification of the statements issued by the Company and the
Company's compliance with the terms of this Agreement, but shall not provide
Microsoft with any other information produced from the audit and/or inspection
of such Company records. Any audit and/or inspection shall be conducted during
regular business hours at Company's facilities with or without notice. Company
agrees to provide Microsoft's designated audit or inspection team access to the
relevant Company records and facilities. The Company shall pay Microsoft the
full amount of any underpayment revealed by the audit plus interest from the
date such payments were due under the terms of this Section at the then
applicable prime rate, as announced by Seattle First National Bank of Seattle,
Washington (the "Prime Rate"). Notwithstanding the foregoing, if such audit
reveals an underpayment by the Company of more than seven percent (7%) for the
period covered by the audit report, the Company shall pay all of the fees and
costs associated with such audit and the amount underpaid with interest at the
rate of five percent (5%) above the Prime Rate from the date such payment was
due pursuant to this Section.
3.7 TAXES. Company will responsible for the billing, collecting and
remitting of sales, use, value added, and other comparable taxes determined by
Company to be due with respect to the collection of the Net Receipts, or any
portion thereof. Microsoft is not liable for any taxes, including without
limitation income taxes, withholdings (subject to Section 3.8, below), value
added, franchise, gross receipts, sales, use property or similar taxes, duties,
levies, fees, excises or tariffs incurred in connection with the Net Receipts or
related to the sale of Company's Products. Company takes full responsibility for
all such taxes, including penalties, interest and other additions thereon.
3.8 WITHHOLDING TAXES. If, after a determination by foreign tax
authorities, any taxes are required to be withheld, on payments made by Company
to Microsoft, Company may deduct such taxes from the amount owed Microsoft and
pay them to the appropriate taxing authority; provided however, that Company
shall promptly secure and deliver to Microsoft an official receipt for any such
taxes withheld or other documents necessary to enable Microsoft to claim a
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U.S. Foreign Tax Credit. Company will make user reasonable commercial efforts to
ensure that any taxes withheld are minimized to the extent possible under
applicable law.
4. DELIVERY AND ACCEPTANCE; UPGRADES.
4.1 DELIVERY OF MASTER COPY. Microsoft or its authorized representative
shall deliver the Company a Master Copy of the Licensed Software at the earliest
date that Microsoft makes such Licensed Software available to any third party.
The Master Copy shall be deemed accepted upon receipt unless the Company
notifies Microsoft or its authorized representative within five (5) days after
it receives such Master Copy that it does not include all of the components
described in Exhibit A hereto. In such event, the Company shall give Microsoft
or its authorized representative prompt written notice and, no later than five
(5) days after receipt of such notice, Microsoft or its authorized
representative shall deliver the Company another Master Copy which includes all
such components.
4.2 DELIVERY OF UPGRADES; COMPANY RESPONSE. Microsoft or its authorized
representative shall deliver all Upgrades to the Company at the earliest date
that Microsoft or its authorized representative makes such Upgrades available to
any third party. No later than five (5) days after the date that the Company
receives an Upgrade, it shall inform Microsoft or its authorized representative
whether the Upgrade contains any programming errors that severely impair the
performance of any major functions in the Products.
4.3 DELIVERY OF BETA SOFTWARE. Microsoft shall deliver copies of the
Licensed Software and Upgrades thereto in beta test form no later than the date
that Microsoft makes such beta test software available to any third party;
provided, that the Company executes and delivers to Microsoft a copy of the
then-applicable beta test agreement that accompanies such beta test software.
5. PRODUCT MARKETING AND SUPPORT; DEMONSTRATION OF PRODUCTS.
5.1 VISUAL BASIC LOGO. The Company shall include a copy of the Logo on
the outside of all retail boxes of Products. In order to be eligible to display
such Logo, the Company must sign a Logo Agreement in substantially the form of
Exhibit D attached hereto. This Agreement shall not be effective unless and
until the Company executes such an agreement and delivers the same to Microsoft.
5.2 TECHNICAL SUPPORT. The Company shall maintain a Premier Support
Agreement with Microsoft at all times during the term of this Agreement for
technical support services related to the Integration of the Licensed Software
into Products. During the term of this Agreement, the Company shall use
reasonable efforts to apprise Microsoft of technical issues that affect the
Integration of the Licensed Software into the Products and Microsoft shall use
reasonable efforts to address such issues and assist the Company in addressing
such issues. Microsoft shall invite representatives of the Company to design
reviews of the Licensed Software during the term of this Agreement. The Company
shall maintain a Premier Support Agreement throughout the term of this
Agreement.
5.3 PRODUCT SUPPORT. Company acknowledges that it shall either (i)
inform End User that Company is the support contact for the Product, and that
Microsoft will not support the
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Product, or (ii) inform the End User that there will be no support for the
Product. Company shall use best efforts to insert a message to that effect in
the start-up or help screen of the Product. The parties agree that Microsoft
shall not provide any End User support for Products.
5.4 PRE-RELEASE PRODUCTS. The Company shall not release any Products
for beta testing prior to July 22, 1996. From July 22, 1996 until September 4,
1996, the Company shall only distribute and demonstrate beta versions of
Products to persons who sign non-disclosure agreements obligating them to
maintain the confidentiality of information regarding the beta Product.
6. INTELLECTUAL PROPERTY NOTICES. Company will not remove any copyright,
trademark or patent notices that appear on the Licensed Software as delivered to
Company. Company shall state in all its advertising, marketing materials, and
packaging related to the Products, that Products contain or are provided with
the Licensed Software. Company agrees to use the appropriate trademark, product
descriptor and trademark symbol (either "(TM)" or "(R)" in a superscript), and
clearly indicate Microsoft's ownership of its trademark(s) whenever the Licensed
Software name is first mentioned in any advertisement, brochure or in any other
manner in connection with Licensed Software and/or a Product. Company shall
undertake no action that will interfere with or diminish Microsoft's right,
title and/or interest in Microsoft Corporation's or licensed third parties'
trademark(s) or trade name(s). Company shall, upon request, provide Microsoft
with samples of all of Company's promotional, packaging and other written
materials which use Licensed Software name(s). Company shall not adopt or use a
product name, trademark or service mark in conjunction with the advertising,
packaging, promotion or sale of Product(s) which includes all or part of any
Microsoft trademark or service mark or any term which is confusingly similar to
a Microsoft trademark or service mark. Company shall not reproduce or imitate
all or part of the packaging or trade dress of any Licensed Software on or in
the packaging of any Product(s) or any related promotional material without
prior written approval of Microsoft.
7. WARRANTY/LIABILITY.
7.1 MICROSOFT. EXCEPT WITH RESPECT TO THE REDISTRIBUTABLE COMPONENTS,
WHICH ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, MICROSOFT WARRANTS THAT
THE LICENSED SOFTWARE WILL PERFORM SUBSTANTIALLY IN ACCORDANCE WITH THE
ACCOMPANYING WRITTEN MATERIALS FOR A PERIOD OF 90 DAYS FROM THE DATE OF RECEIPT.
EXCEPT AS EXPRESSLY STATED ABOVE, ANY AND ALL EXPRESS AND IMPLIED WARRANTIES OF
ANY KIND WHATSOEVER, INCLUDING THOSE OF MERCHANTABILITY AND/OR FITNESS FOR A
PARTICULAR PURPOSE, ARE EXPRESSLY EXCLUDED. MICROSOFT MAKES NO WARRANTY THAT THE
LICENSED SOFTWARE WILL OPERATE PROPERLY AS INTEGRATED IN THE COMPANY'S
PRODUCT(S) OR ON ANY CUSTOMER SYSTEM(S). MICROSOFT HEREBY AGREES TO DEFEND,
INDEMNIFY AND HOLD COMPANY HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS ARISING
AS A RESULT OF ANY CLAIM BY A THIRD PARTY THAT THE LICENSED SOFTWARE INFRINGES
ANY TRADE SECRET OR COPYRIGHT OF SUCH THIRD PARTY.
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7.2 COMPANY. COMPANY AND ANY OF ITS MANUFACTURER'S REPRESENTATIVES
SHALL NOT MAKE TO ANY END USER ANY REPRESENTATION WITH RESPECT TO THE LICENSED
SOFTWARE OR THE USE THEREOF EXCEPT AS IS EXPLICITLY SET FORTH IN THE
DOCUMENTATION ACCOMPANYING THE LICENSED SOFTWARE. COMPANY HEREBY AGREES TO
DEFEND, INDEMNIFY AND HOLD MICROSOFT HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS ARISING AS A RESULT OF: (i) COMPANY'S IMPROPER INSTALLATION OF THE
LICENSED SOFTWARE; (ii) ANY COMPUTER SOFTWARE VIRUS INTRODUCED BY COMPANY DURING
THE INSTALLATION PROCESS; (iii) ANY CLAIM BY AN END USER REGARDING ITS USE OR
INABILITY TO USE A PRODUCT IF SUCH CLAIM WOULD NOT HAVE OCCURRED SOLELY FROM USE
OF THE LICENSED SOFTWARE; (iv) ANY CLAIM BY A THIRD PARTY THAT THE PRODUCT
INFRINGES ANY PROPRIETARY RIGHT OF SUCH THIRD PARTY IF SUCH CLAIM WOULD HAVE
BEEN AVOIDED BY THE EXCLUSIVE USE OF THE LICENSED SOFTWARE; OR (v) COMPANY'S
AND/OR ITS AGENTS' BREACH OF ANY OF THE PROVISIONS OF SECTION 2 OF THIS
AGREEMENT.
7.3 ESSENTIAL ELEMENT. THE PARTIES ACKNOWLEDGE THAT ALL OTHER PARTS OF
THIS AGREEMENT RELY UPON THE INCLUSION OF THIS SECTION 7.
7.4 CERTAIN DAMAGES. NEITHER PARTY SHALL BE LIABLE FOR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, ECONOMIC OR PUNITIVE DAMAGES EVEN IF SUCH
PARTIES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. TERM AND TERMINATION.
8.1 TERM. Unless terminated earlier pursuant to this Section, this
Agreement shall be for a period beginning on the Effective Date and ending three
(3) years after the latter of (a) the Effective Date, or (b) the Release to
Manufacturing date.
8.2 TERMINATION.
8.2.1 Either party shall have the right to terminate this
Agreement in the event of a material breach of this Agreement or the
logo agreement attached hereto as Exhibit D after notice thereof and an
opportunity to cure within 60 days from the date of such notice. In
addition, Microsoft shall have a right to terminate this Agreement
immediately in the event of an assignment in breach of Section 10.
8.2.2 In no event shall Microsoft be responsible to Company
for any costs or damages resulting from the termination of this
Agreement.
8.3 EFFECT OF EXPIRATION OR TERMINATION.
8.3.1 Sections 1, 2 (with respect to the then current version
of the Licensed Software), 3, 5.2, 6, 7, 8, 9, 10, and 11 shall survive
any expiration of this Agreement pursuant to Section 8.1 or termination
of this Agreement by the Company pursuant to
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Section 8.2.1. Without limiting the foregoing, the parties understand
and agree that the Company shall be obligated to continue paying
Microsoft at least the minimum royalties set forth in Section 3.2 of
this Agreement for so long as the Company licenses or distributes
Products after termination or expiration of this Agreement.
8.3.2 Sections 3, 5, 6, 7, 8, 9, 10, and 11 shall survive any
or termination of this Agreement by Microsoft pursuant to Section
8.2.1.
8.3.3 Termination of this Agreement shall not affect existing
end user license agreements for the Products, which shall continue in
full force and effect in accordance with their terms. Company shall
continue to pay the royalties as specified in Section 3 of this
Agreement for so long as the Company licenses or distributes Products
after termination of this Agreement.
9. CONFIDENTIALITY.
Each party expressly undertakes to retain in confidence and to require
its distributors, resellers and all other contractors to retain in confidence
all information and know-how transmitted to such party that the disclosing party
has identified as being proprietary and/or confidential or which, by the nature
of the circumstances surrounding the disclosure, ought in good faith to be
treated as proprietary and/or confidential. Without limiting the foregoing, all
terms and conditions of this Agreement shall be considered confidential and
shall not be disclosed (except to either party's attorneys and accountants on a
need-to-know basis) without the prior written consent of the other party.
10. PROHIBITION AGAINST ASSIGNMENT. This Agreement, and any rights or
obligations in this Agreement, shall not be assigned or sublicensed by the
Company. For purposes of this Section, the term "assignment" shall include,
without limitation, a merger or share exchange of the Company into another
entity, a sale of substantially all the assets of the Company, or as sale or
transfer of more than twenty percent (20%) of the issued and outstanding voting
shares of the Company. Notwithstanding the foregoing, the Company may assign or
otherwise transfer its rights and obligations to successors in interest (whether
by purchase of stock or assets, merger, operation of law or otherwise) of the
portion of its business related to the subject matter hereof; provided, that the
Company provides Microsoft with prompt written notice of any such assignment or
transfer, and further provided, that the transferee, assignee or successor in
interest shall have no right to integrate the Licensed Software into any product
or service other than the Products of the Company that are commercially
available to the public on the effective date of the assignment, transfer or
change in control transaction.
11. GENERAL.
11.1 CONTROLLING LAW. This Agreement shall be construed and controlled
by the laws of the State of Washington, and Company consents to jurisdiction and
venue in the state and federal courts sitting in the State of Washington.
Neither this Agreement, nor any terms and conditions contained herein, shall be
construed as creating a partnership, joint venture, agency, or franchise
relationship.
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11.2 ATTORNEYS' FEES. If either Microsoft or Company employs attorneys
to enforce any rights arising out of or relating to this Agreement, the
prevailing party shall be entitled to recover its reasonable attorneys' fees,
costs and other expenses.
11.3 NOTICES AND REQUESTS. All notices, authorizations, and requests
given by Company or Microsoft in connection with this Agreement shall be deemed
given on the day they are (i) deposited in the mail, postage prepaid, certified
or registered, return receipt requested; or (ii) sent by air express courier,
charges prepaid; to the address listed in this Agreement.
11.4 COMPANY'S GOVERNMENTAL APPROVAL OBLIGATIONS. Company shall, at its
own expense, obtain and arrange for the maintenance in full force and effect of
all governmental approvals, consents, licenses, authorizations, declarations,
filings, and registrations as may be necessary or advisable for the performance
of all of the terms and conditions of this Agreement including, but not limited
to, foreign exchange approvals, import and offer agent licenses, fair trade
approvals and all approvals which may be required to realize the purposes of
this Agreement.
11.5 RESTRICTED RIGHTS. Any Licensed Software which Company distributes
to or on behalf of the United States of America, its agencies and/or
instrumentalities (the "Government'), are provided to Company with RESTRICTED
RIGHTS. Use, duplication or disclosure by the Government is subject to
restriction as set forth in subparagraph (c)(1)(ii) of the rights in Technical
Data and Computer Software clause at DFAR 252.227-7013, or as set forth in the
particular department or agency regulations or rules which provide Microsoft
protection equivalent to or greater than the above-cited clause. Company shall
comply with any requirements of the Government to obtain such RESTRICTED RIGHTS
protection, including without limitation, the placement of any restrictive
legends on the Licensed Software, Licensed Software documentation, and any
license agreement used in connection with the distribution of the Licensed
Software. Manufacturer is Microsoft Corporation, One Microsoft Way, Redmond,
Washington 98052-6399. Under no circumstances shall Microsoft be obligated to
comply with any Governmental requirements regarding the submission of or the
request for exemption from submission of cost or pricing data or cost accounting
requirements. For any distribution of the Licensed Software that would require
compliance by Microsoft with Governmental requirements relating to cost or
pricing data or cost accounting requirements, Company must obtain an appropriate
waiver or exemption from such requirements for the benefit of Microsoft from the
appropriate Governmental authority before the distribution and/or license of the
Licensed Software to the Government.
11.6 EXPORT CONTROLS. Company acknowledges that the license and
distribution of the Products are subject to the export control laws and
regulations of the United States of America, and any amendments thereof, which
restrict exports and re-exports of software, technical data, and direct products
of technical data, including services derived from use of the Products (the
"Direct Products"). Company agrees that it will not export or re-export any
Products or Direct Products, or any information and documentation related
thereto, directly or indirectly, without first obtaining permission to do so as
required from the United States of America Department of Commerce's Bureau of
Export Administration, or other appropriate governmental agencies, to any
countries, end-users, or for any end-uses that are restricted by U.S. export
laws and regulations, and any amendments thereof, which include, but are not
limited to, the following:
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Restricted Countries: Cuba, Federal Republic of Yugoslavia (Serbia and
Montenegro), Iran, Iraq, Libya, North Korea, Syria and Vietnam.
Restricted End-Users: Any End-User whom Company knows or has reason to
know will use Products or Direct Products in the design, development,
or production of missiles and missile technology, nuclear weapons and
weapons technology, or chemical and biological weapons.
Restricted End-Uses: Any use of Products and Direct Products related to
the design, development, or production of missiles and missile
technology, nuclear weapons and weapons technology, or chemical and
biological weapons.
These restrictions change from time to time. If Company has any questions
regarding its obligations under United States of America export regulations,
Company should contact the Bureau of Export Administration, United States
Department of Commerce, Office of Export Licensing, Washington DC., U.S.A. (202)
377-4811.
11.7 ENTIRE AGREEMENT. This Agreement, including Exhibits A-D attached
hereto, shall constitute the entire agreement between the parties with respect
to its subject matter and merges all prior and contemporaneous communications,
both written and oral. This Agreement shall not be modified except by a written
agreement signed on behalf of Company and Microsoft by their respective duly
authorized representatives.
11.8 SEVERABILITY. If any provision of this Agreement shall be held by
a court of competent jurisdiction to be illegal, invalid or unenforceable, the
remaining provisions shall remain in full force and effect. If this Agreement as
it relates to any Licensed Software shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable or if this Agreement is
terminated as to a particular Licensed Software, then it shall remain in full
force and effect as to the remaining Licensed Software.
11.9 WAIVER. No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions hereof, and no waiver shall be effective unless
made in writing and signed by an authorized representative of the waiving party.
11.10 SECTION HEADINGS. The Section headings used in this Agreement are
intended for convenience only and shall not be deemed to supersede or modify any
provisions.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date. All signed copies of this Agreement shall be deemed originals.
MICROSOFT CORPORATION SAGENT TECHNOLOGY, INC.
/s/ Robbie Wright /s/ Kenneth C. Gardner
- -------------------------------- ----------------------------------
(Signature) (Signature)
Robbie Wright Kenneth C. Gardner
- -------------------------------- ----------------------------------
(Name - Please Print) (Name - Please Print)
VB Business Manager President and CEO
- -------------------------------- ----------------------------------
(Title) (Title)
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EXHIBIT A
DESCRIPTION OF LICENSED SOFTWARE, DOCUMENTATION
AND REDISTRIBUTABLE COMPONENTS
1. LICENSED SOFTWARE.
VISUAL BASIC APPLICATIONS EDITION 5.0 IS AN EMBEDDABLE BASIC LANGUAGE SOFTWARE
PRODUCT COMPRISED OF THE FOLLOWING COMPONENTS:
VBA3
These are the binary files that make up the core VBA3 deliverable. This includes
the language runtime and user interface components including editing, debugging,
project management, property control.
MSVCRT40.DLL, VAEN332.DLL, VBA332.DLL, VBE.DLL, VBEIDE.DLL, VBAEN32.OLB,
VBE1OLB, VBEEXT1.OLB, VEN2232.OLB, SCP32.DLL
FORMS3
Forms3 provides a complete visual editing and dialog design environment.
FM20.DLL, FM20INTL.DLL, RICHED20.DLL
CORE TECHNOLOGY
VBA3 is dependent on a set of MICROSOFT core proprietary technology. These
technologies are to be consumed by VBA3 only. Host of VBA3 are forbidden from
accessing core technology directly.
DEVO97.DLL, DEVO7ENU.DLL
OLE AUTOMATION
VBA3 has a dependency on the new OLE automation interfaces. The appropriate OLE
automation .DLLs and documentation are packaged as part of the VBA3 product. The
automation DLLs are freely distributable as part of the host application's
installation process.
OLEACC.DLL, OLEAUT32.DLL, STDOLE2.TLB
SAMPLE HOST APPLICATION
MICROSOFT provides a complete sample host that demonstrates the complete VBA3
integration model. This sample is available in full source format.
VBA DOCUMENTATION KIT
This is comprised of a series of tools that aid in integrating VBA3 end user
documentation into an ISV's existing documentation format.
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MICROSOFT INTERNAL HELP ENGINE AND AUTHORING TOOLS
Tools used by Microsoft to author its own help systems along with execution
engine.
VBA TEST HARNESS
Tools used to test VBA.
2. DOCUMENTATION.
END USER DOCUMENTATION
A set of photo-ready end user documentation is provided by VBA3 consisting of:
- - VBA Language Reference
- - Forms3 Reference
- - An outline of the VB Programmers Guide
The above documentation is delivered in three forms:
- - Online help
- - Preprocessed topics (stored on CD)
- - Processed topics (stored on CD).
Online help is the typical MICROSOFT help system, complete with hyper-links and
indexing. "Preprocessed topics" are the VBA Language Reference, Forms3
Reference, and outline of the VB Programmers Guide, in their raw form before
being run through MICROSOFT's print formatting. ISVs can use the documentation
in this form for integrating into their own help files and format. "Processed
topics" is a printer-ready representation of the VBA Language Reference, Forms3
Reference, and outline of the VB Programmers Guide.
The file list is TBD.
VBA3 HOST INTEGRATION GUIDE
This document gives a complete overview of the integration process. It documents
the functionality demonstrated by the sample application and provides
theoretical background into technical issues the ISV may encounter. This
material is provided in both online (Info Viewer) and document forms.
VBA3 HOST INTERFACE REFERENCE
A complete VBA3 interface reference with examples is provided in an online form
(MS Help).
3. REDISTRIBUTABLE COMPONENTS.
The following is a list of components that can be redistributed
- - VBA3
- - Forms3
- - Core Technology
- - OLE Automation
- - End User Documentation and derivatives.
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EXHIBIT B
LIST OF COMPANY PRODUCTS
THE SAGENT PRODUCT LINE
The SAGENT DATA MART SOLUTION is a family of integrated products for populating,
managing, and accessing data marts. It includes the Sagent Data Mart Server,
Sagent Admin, Sagent Design Studio, Sagent Information Studio, Sagent WebLink,
Sagent Analysis, Sagent Reports and Sagent Statistics.
- - The SAGENT DATA MART SERVER is a Windows NT-based application server
that features a multi-threaded engine. Its repository stores all Sagent
Data Mart components in relational tables for easy access and
administration. The Sagent Data Mart Server can access data on Oracle,
Red Brick, Sybase, IBM DB2, Informix and Microsoft SQL Server databases
as well as ODBC data sources. The Data Mart Server will use VBScript as
its Scripting component until a multi-threaded version of VBA becomes
available.
- - SAGENT ADMIN is a set of integrated, drag-and-drop tools that enable
centralized control over a distributed network of Sagent Data Marts. It
provides a single, integrated view and manage the security of all
Sagent repositories, and the components they contain.
- - SAGENT DESIGN STUDIO enables data administrators to build and populate
data marts quickly and easily. Its visual environment is coupled with
powerful scripting facilities that allow developers to embed Visual
Basic or C++ code into plans for extracting and transforming data, and
loading into a data mart.
- - SAGENT INFORMATION STUDIO is a set of graphical end user tools for
easily accessing and sharing information. It runs on Windows 95 or
Windows NT and enables users to build powerful data requests, store
result sets for easy reuse, and collaborate with other users on data
access and analysis.
- - SAGENT WEBLINK is a product for linking Sagent systems with popular
Internet and Intranet web browser. It enables users to access,
manipulate and display queries and saved result sets quickly and easily
through a browser interface. Users can view all forms of output
supported by the Sagent Information Studio.
- - SAGENT ANALYSIS is a data analysis product that allows the
crosstabulation, slicing, charting and manipulation of information that
has been stored in the Sagent Data MartServer. Data sources include
relational data sources in a ROLAP mode using Sagent's Aggregate
Navigator as well as MDBMS sources such as EssBase. Data can be viewed
as crosstabs and/or business charts.
- - SAGENT REPORTS is a full function reporting tool that supports
embedding of all the visual components of the Sagent product line.
- - SAGENT STATISTICS is a intuitive statistical software package offering
a comprehensive range of statistical analyses from descriptive
statistics to ANOVA and factor analysis. Presentation quality graphs
and tables can be easily created from any analysis.
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EXHIBIT C
FORM OF ROYALTY STATEMENT
ROYALTY REPORT FOR SAGENT TECHNOLOGY, INC.
ROYALTY REPORT FOR THE PERIOD ___________ , 19__ TO __________ , 19__
A. PREPAID ROYALTY: [ * ]
B. TOTAL NET RECEIPTS: ____________________
C. ROYALTY RATE: ____________________
D. TOTAL ROYALTY AMOUNT (B X C): ____________________
E. PREPAID ROYALTY AMOUNT REMAINING: ____________________
(FROM PREVIOUS ROYALTY STATEMENT)
F. TOTAL PAYMENT DUE: ____________________
G. AMOUNT REMAINING ON PREPAID ROYALTY: ____________________
THE UNDERSIGNED HEREBY CERTIFIES THAT TO THE BEST OF HIS/HER KNOWLEDGE THAT THIS
REPORT IS TRUE AND ACCURATE.
____________________(SIGNATURE)
____________________(PRINT)
____________________(TITLE)
____________________(DATE)
TELEPHONE NUMBER: (___)______________
THIS REPORT SHOULD BE SENT WITH ANY PAYMENT DUE TO THE FOLLOWING
ADDRESS:
MICROSOFT CORPORATION
ATTENTION: RETAIL LICENSING
DEPT. 551
REDMOND, WA 98052-6399
16
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 17
EXHIBIT D
LOGO LICENSE AGREEMENT
FEATURING MICROSOFT(R) VISUAL BASIC(R) TECHNOLOGY
LOGO LICENSE AGREEMENT
This Logo License Agreement ("Logo Agreement") is made and entered into this ___
day of _________, 19__, ("Effective Date"), by and between MICROSOFT
CORPORATION, a Washington, USA corporation ("MS"), and SAGENT TECHNOLOGIES,
INC., a California corporation ("COMPANY").
RECITALS
WHERE AS, MS owns good and valuable trademarks and logos; and
WHEREAS, COMPANY wishes to license use of the Logo in accordance with
MS' terms and conditions described below, NOW THEREFORE:
The parties hereby agree as follows:
1. DEFINITIONS
For purposes of this Logo Agreement, the following terms shall have the
following meanings:
(a) "Logo" shall mean the Featuring Visual Basic Technology logo
depicted in the attached Exhibit A or such additional or replacement logos as MS
may provide from time to time under this Logo Agreement.
(b) "Product" shall mean the COMPANY product or products described in
the attached Exhibit B which have been submitted to VeriTest Inc. for testing as
set forth in Exhibit B and have passed such tests.
2. LICENSE GRANT
(a) Subject to and expressly conditioned upon compliance with the terms
and conditions of this Logo Agreement, MS hereby grants to COMPANY a worldwide
(except as provided in Section 2(b)), nonexclusive, personal right to use the
Logo solely in conjunction with Product in the manner described in the
guidelines set forth in the attached Exhibit C and as may be prescribed by MS
from time to time.
(b) The license right set forth in Section 2(a) shall not extend to the
Republic of China ("Taiwan"), South Korea ("Korea"), or the People's Republic of
China ("PRC"), unless and until COMPANY provides MS with written notice of
COMPANY's intent to distribute Product in these countries. COMPANY agrees not to
use the Logo in such countries and shall not be licensed pursuant to this Logo
Agreement to do so until COMPANY has provided MS with such written notice.
(c) COMPANY may not use or reproduce the Logo in any manner whatsoever
other than as expressly described in Exhibit C.
(d) COMPANY agrees and acknowledges that MS retains all right, title
and interest in and to the Logo. Except as expressly granted in this Logo
Agreement, COMPANY shall have no rights in the Logo. Under no circumstances will
anything in this Logo Agreement be construed as granting, by implication,
estoppel or otherwise, a license to any Microsoft technology or proprietary
right other than the permitted use of the Logo pursuant to Section 2(a).
(e) COMPANY agrees that it will use the Logo solely as provided in this
Logo Agreement and will not use the Logo for promotional goods or for products
which, in MS' reasonable judgment, will diminish or otherwise damage MS'
goodwill in the Logo, including but not limited to uses which could be deemed to
be obscene, pornographic, excessively violent or otherwise in poor taste or
unlawful, or which purpose or objective is to encourage unlawful activities.
3. NO FURTHER CONVEYANCES
The license grant in Section 2(a) is personal to COMPANY, and COMPANY
shall not assign, transfer or sublicense this Logo Agreement (or any right
granted herein) in any manner without the prior written consent of MS.
4. QUALITY, INSPECTION, AND APPROVAL
(a) COMPANY agrees to maintain the quality of Product used in
conjunction with the Logo at a level that meets or exceeds industry standards
and at least commensurate with the quality of Product previously distributed by
COMPANY.
(b) COMPANY shall supply MS with suitable specimens of Product and
COMPANY's use of the Logo in connection with Product at the times and in the
manner described in Exhibit C, or at any time upon reasonable notice from MS.
COMPANY shall cooperate fully with MS to facilitate periodic review of COMPANY's
use of the Logo and of COMPANY's compliance with the quality standards described
in this Logo Agreement.
(c) COMPANY shall fully correct and remedy any deficiencies in its use
of the Logo, conformance to the Visual Basic Technology compatibility criteria,
and/or the quality of Product used in conjunction with the Logo, upon reasonable
notice from MS.
(d) COMPANY represents and warrants that Product meets the applicable
Visual Basic Technology
17
<PAGE> 18
compatibility criteria set forth in Exhibit B. COMPANY shall provide MS with
copies or summaries of the results of applicable compatibility tests following
the completion of such tests.
(e) COMPANY agrees that it will comply with all applicable laws, rules,
and regulations and will not violate or infringe any right of any third party.
5. IDENTIFICATION AND USE
(a) COMPANY shall mark every use of the Logo with the trademark
designation set forth in Exhibit A and as described in Exhibit C and shall
comply with MS' trademark use guidelines as amended from time to time.
(b) COMPANY acknowledges MS' ownership of the Logo and the Visual Basic
trademark. COMPANY shall employ reasonable commercial efforts to use the Logo in
a manner that does not derogate from MS' rights in the Logo and will take no
action that will interfere with or diminish MS' rights in the Logo, either
during the term of this Logo Agreement or afterwards. COMPANY agrees not to
adopt, use or register any corporate name, trade name, trademark, service mark
or certification mark, or other designation similar to, or containing in whole
or in part, the Logo. COMPANY agrees that all use of the Logo by COMPANY will
inure to the benefit of MS. COMPANY may not use the Logo in any way as an
endorsement or sponsorship of Product by MS.
6. DEFENSE OF INFRINGEMENT CLAIM
(a) Subject to 7, MS agrees to defend COMPANY against, and pay the
amount of any adverse final judgment (or settlement to which MS consents)
resulting from, third party claim(s) (hereinafter "Indemnified Claims") that the
Logo infringes any registered trademark rights enforceable in the United States,
Canada, Australia, Japan, the European Union, and Norway and in other countries
for use occurring after registration of the Logo in such additional countries;
provided MS is notified promptly in writing of the Indemnified Claim and has
sole control over its defense or settlement, and COMPANY provides reasonable
assistance in the defense of the same.
(b) In the event MS receives information concerning an intellectual
property infringement claim (including an Indemnified Claim) related to the
Logo, MS may at its expense, without obligation to do so, either (i) procure for
COMPANY the right to continue to distribute the alleged infringing Logo, or (ii)
replace or modify the Logo to make it non-infringing, and in which case, COMPANY
shall thereupon cease distribution of the alleged infringing Logo.
(c) MS shall have no liability for any intellectual property
infringement claim (including an Indemnified Claim) based on COMPANY's (i)
manufacture, distribution, or use of the Logo after MS' written notice that
COMPANY should cease use of such Logo due to such a claim. For all claims
described in this Section 6(c), COMPANY agrees to indemnify and defend MS from
and against all damages, costs and expenses, including reasonable attorneys'
fees.
(d) MS shall have no obligation to COMPANY for any Indemnified Claims
which arise outside the geographical boundaries of the United States, Canada,
Australia, Japan, the European Union, and Norway ("Included Jurisdictions"), and
other countries where the Logo has been registered by MS at the time such claim
arises.
(e) MS MAKES NO WARRANTIES. THE DEFENSE PURSUANT TO 6(a) IS EXCLUSIVE
AND IS IN LIEU OF ALL WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE WITH
RESPECT TO THE LOGO, INCLUDING ANY WARRANTY OF NON-INFRINGEMENT, IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7. CONSEQUENTIAL ET. AL. DAMAGES
IN NO EVENT SHALL MS BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, PUNITIVE OR SPECIAL DAMAGES (INCLUDING LOSS OF BUSINESS PROFITS)
ARISING FROM OR RELATED TO COMPANY'S MARKETING, DISTRIBUTION OR ANY USE OF THE
LOGO, REGARDLESS OF WHETHER SUCH LIABILITY IS BASED ON BREACH OF CONTRACT, TORT,
STRICT LIABILITY, BREACH OF WARRANTIES, INFRINGEMENT OF INTELLECTUAL PROPERTY,
FAILURE OF ESSENTIAL PURPOSE OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES. IN NO EVENT SHALL MS BE LIABLE FOR ANY DAMAGES FOR COMPANY'S USE
OF THE LOGO IN VIOLATION OF THE TERMS AND CONDITIONS OF THIS LOGO AGREEMENT.
8. INFRINGEMENT
COMPANY shall promptly notify MS of any suspected infringement of or challenge
to the Logo or any of its constituent elements.
9. TERM OF LOGO AGREEMENT
(a) The term of this Logo Agreement shall be for a period of two (2)
years from the Effective Date; provided however, that MS shall have the right to
terminate this Logo Agreement with or without cause upon thirty (30) days' prior
written notice.
(b) From and after termination or expiration of this Logo Agreement,
COMPANY shall cease and desist from all use of the Logo. However, unless the
Logo Agreement is terminated for breach, COMPANY may distribute then-existing
units of Product and advertising materials containing the Logo for a period of
ninety (90) days from the termination date provided use of the Logo in
18
<PAGE> 19
connection with such inventory is in compliance with the terms and conditions of
this Logo Agreement.
10. NOTICES
All notices and other communications under this Logo Agreement shall be
in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail, return receipt requested, or sent by telecopy with
a receipt confirmed by telephone, to the parties at the following addresses or
to such other addresses as a party may from time to time notify the other
parties.
MS: MICROSOFT CORPORATION
One Microsoft Way
Redmond, WA 98052-6399
USA
Attention: Visual Basic Logo Department
With Copy
To: MICROSOFT CORPORATION
One Microsoft Way
Redmond, WA 98052-6399
USA
Attention: Law & Corporate Affairs, Trademarks
Fax: (206) 869-1327
11. ENTIRE LOGO AGREEMENT; AMENDMENT
MS' providing this Logo Agreement to COMPANY does not constitute an offer by MS.
Upon execution by both MS and COMPANY, this Logo Agreement, including all
Exhibits, contains the entire agreement of the parties with respect to the
subject matter hereof, and shall supersede and merge all prior and
contemporaneous communications. It shall not be amended except by a written
agreement subsequent to the Effective Date and signed on behalf of the parties
by their respective authorized representatives.
12. GOVERNING LAW; ATTORNEYS' FEES; EQUITABLE RELIEF
(a) This Logo Agreement shall be governed by and construed in
accordance with the laws of the State of Washington. COMPANY hereby consents to
jurisdiction and venue in the state and federal courts sitting in the State of
Washington. The parties agree to accept service of process by U.S. certified or
registered mail, return receipt requested, or by any other method authorized by
Washington Law in accordance with the terms of Section 10 of such agreement.
(b) If either party employs attorneys to enforce any rights arising out
of or related to this Logo Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys' fees, costs, and other expenses.
(c) COMPANY acknowledges that a breach by it of this Logo Agreement may
cause MS irreparable damage which cannot be remedied in monetary damages in an
action at law, and may also constitute infringement of the Logo. In the event of
any breach that could cause irreparable harm to MS, or cause some impairment or
dilution of its reputation or Logo, MS shall be entitled to an immediate
injunction, in addition to any other legal or equitable remedies.
13. HEADINGS
Section headings are used in this Logo Agreement for convenience of reference
only and shall not affect the meaning of any provision of this Logo Agreement.
14. NO WAIVER
No waiver of any breach of any provision of this Logo Agreement shall constitute
a waiver of any prior, concurrent or subsequent breach of the same or any other
provision hereof, and no waiver shall be effective unless made in writing and
signed by an authorized representative of the waiving party.
15. SEVERABILITY
If any provision of this Logo Agreement (or any other agreements incorporated
herein) shall be held by a court of competent jurisdiction to be illegal,
invalid or unenforceable, the remaining provisions shall remain in full force
and effect.
16. RELATIONSHIP
Neither this Logo Agreement, nor any terms and conditions contained herein,
shall be construed as creating a partnership, joint venture or agency
relationship or as granting a franchise.
17. SURVIVAL
The provisions of Sections 2(d), 5(b), 6(a) (for claims based upon use of the
Logo permitted by this Logo Agreement) and 7, as well as Section 4(f) with
respect to Product(s) distributed during the term of this Logo Agreement, shall
survive expiration or termination of this Logo Agreement.
18. ASSIGNMENT
This Logo Agreement may be assigned by the Company only upon assignment of that
certain License and Distribution Agreement by and between the parties of even
date herewith.
19. EXHIBITS
This Logo Agreement includes Exhibits A, B and C, which are hereby incorporated
by reference.
19
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have executed this Logo Agreement
as of the Effective Date.
MICROSOFT CORPORATION SAGENT TECHNOLOGY, INC
___________________________________ _____________________________________
Name (Signature) Name (Signature)
___________________________________ _____________________________________
Name (Print) Name (Print)
___________________________________ _____________________________________
Title Title
___________________________________ _____________________________________
Date Date
20
<PAGE> 21
EXHIBIT A
Featuring Microsoft(R) Visual Basic(R) Technology Logo
[to be provided separately by MS]
Trademark footnote:
Microsoft and Visual Basic are registered trademarks in the United States and
other countries and the Microsoft Visual Basic Technology logo is a trademark of
Microsoft Corporation.
21
<PAGE> 22
EXHIBIT B
COMPANY Product(s) and Featuring Microsoft Visual Basic
Technology Logo Criteria
COMPANY Product(s)
<TABLE>
<CAPTION>
Product Name Version Number
<S> <C>
- ---------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------- -------------------------
</TABLE>
Featuring Microsoft Visual Basic Technology Logo Criteria
Vendors of Computer Software: Product must pass Compliance Testing through
VeriTest, Inc., of Santa Monica, CA, or
other MS designated Logo Compliance Testing
center to confirm that such Product meets
criteria established by MS. Other than
maintenance or bug-fix releases, Product
updates must be re-tested for compliance
with Logo criteria. All costs of such
testing shall be borne by the Company.
FEATURING MICROSOFT(R) VISUAL BASIC(R) TECHNOLOGY
LOGO GUIDELINES
- --------------------------------------------------------------------------------
Microsoft has established the following set of guidelines to assist you in
proper use of the Featuring Microsoft(R) Visual Basic(R) Technology Logo (the
"Logo").
The power of the Logo lies in its consistent and appropriate use. Any usage
outside these guidelines dilutes the effectiveness of the Logo and is strictly
prohibited.
Microsoft reserves the right to change the Logo and/or these Guidelines at any
time at its discretion. Third parties shall comply with the Guidelines as
amended from time to time.
USING THE MICROSOFT VISUAL BASIC TECHNOLOGY LOGO
- - Use the Logo only to promote Microsoft Visual Basic and indicate that
your product includes Microsoft Visual Basic-based technology.
- - Microsoft will provide you with electronic artwork of the Logo. You may
not alter this artwork in any way.
- - This Logo is for use only as a graphical representation of the
Microsoft Visual Basic Technology, and can only be used by companies
that integrate VBA3 into their products under a separate agreement. The
Logo may be used on product packaging as well as in channel,
collateral, advertising, direct mail, and events promotion materials
and on Web sites where it is used to refer to the products that have
integrated VBA3.
22
<PAGE> 23
EXHIBIT B
- - The Logo is owned by Microsoft Corporation. All use of the Logo should
include the following notice: "Microsoft and Visual Basic are
registered trademarks in the United States and other countries and the
Microsoft Visual Basic Technology logo is a trademark of Microsoft
Corporation". A registered trademark symbol ((R)) must appear in the
upper-right corner immediately following the words "Microsoft" and
"Visual Basic". Do not remove any trademark symbols or alter the Logo
in any way.
- - The product name for Microsoft Visual Basic programming system should
appear as "Microsoft(R) Visual Basic(R)" at the first and most
prominent use in all materials and can thereafter be referred to as
"Visual Basic".
- - Microsoft owns the Microsoft Visual Basic Technology Logo and all use
of the Logo will inure to the benefit of Microsoft. Third parties shall
employ best efforts to use the Logo in a manner that does not derogate
from Microsoft's rights in the Logo and will take no action that will
interfere with or diminish Microsoft's rights in the Logo. Third
parties should not adopt, use, or register any corporate name, trade
name, trademark, service mark or certification mark, trade dress, or
other designation similar to, or containing in whole or in part, the
Logo.
- - The Logo may not be used in a manner that would imply that your company
or any goods or services provided by your company are sponsored or
endorsed by, or affiliated with Microsoft.
- - You may not display the Logo on packaging, documentation, collateral,
or advertising in a manner which suggests that your Product is a
Microsoft product, or in a manner which suggests that Microsoft is a
part of your Product name.
- - Do not use the Logo to disparage Microsoft Corporation, its
subsidiaries, products, or services, or for promotional goods or for
products which, in MS' reasonable judgment, may diminish or otherwise
damage MS' goodwill in the Logo, including but not limited to uses
which could be deemed to be obscene, pornographic, excessively violent,
or otherwise in poor taste or unlawful, or which purpose is to
encourage unlawful activities.
- - Do not imitate Microsoft's product packaging or the Logo in any of your
materials, including advertising, product packaging, and promotional
materials.
- - The Logo or the names "Microsoft", "Microsoft Visual Basic", or "Visual
Basic" cannot appear larger and/or more prominent than your trade name,
service name, product name, or trademark on any materials produced or
distributed by your company.
- - Microsoft reserves the right to object to unfair uses or misuses of its
trademarks or other violations of applicable law.
SPACING
- - The Logo must stand alone. A minimum amount of empty space must
surround the Logo so as to separate it from any other object such as
type, photography, borders, edges, and so on. The required border of
empty space around the Logo must be 1/2x wide, where x equals the
height of the Logo.
- - You may not combine the Logo with any other object, including, but not
limited to, other logos, words, graphics, photos, slogans, numbers,
design features, or symbols.
- - The Logo may not be used as a design feature on your Product, Product
packaging, documentation, collateral, or advertising.
MINIMUM SIZE
- - All the elements of the Logo must maintain integrity. For example, the
logotype and trademark notations must be readable. In no case should
the Logo appear in such a small size that these conditions are not met.
- - Redraws, distortions, or animation of the Logo are not permitted.
FOUR-COLOR APPLICATIONS
COLORS
-2-
<PAGE> 24
EXHIBIT B
The multicolored version is the preferred way of reproducing the Logo. The three
PANTONE(R) Matching System (PMS) colors are:
Blue PMS 279 C (top)
Red PMS 172 C (middle)
Yellow PMS 123 C (bottom)
Four-color process (CMYK) equivalents can also be used.
The four-color version can be reproduced only as described here. The colors must
appear in the positions described.
BLACK-AND-WHITE OR ONE-COLOR APPLICATIONS
The Logo can also be used in a black-and-white application with the colored
areas replaced with gray.
ACCESSING THE ONLINE FILES
The following files are provided in Encapsulated PostScript(R) (EPS), Windows(R)
metafile (WMF) format, and bitmap files. Use the EPS files for materials printed
to a PostScript-comptible printer. Use the Windows metafile to print to a
non-PostScript printer or for on-screen representations. Use the bitmap for
on-screen representations only. The files should not be opened and edited, only
placed (for example, select "import...picture") into software programs such as
common page-layout or presentation programs, word-processing software, and so
forth.
Due to translation problems between the Mac(TM) and PC, Mac EPS images lose
their preview. When you place them into your page layout document, you will see
a big "X" instead of the preview. The image will still print correctly and the
bounding box accurately shows the size of the image. EPS images are sizable.
PC EPS images only have black-and-white previews. If you choose to use a color
PC EPS, it will still preview in black and white. When you print it, the color
will print correctly.
EPS format is device-dependent, so the resolution of the device you are printing
to is the resolution you will achieve.
TO EXPORT OBJECT FROM WORD:
1. Select object.
2. Select Edit Package Object.
3. Select Edit Package.
4. Select File Save Contents.
5. Under File Name, name the file with the same extension as the object you have
selected.
MICROSOFT VISUAL BASIC LOGO ART FILES
Macintosh(R) Encapsulated PostScripT
PC Encapsulated PostScript
PC Windows Metafile
PC BMP
QUALITY CONTROL
Microsoft reserves the right to review your use of the Logo and to conduct spot
checks on all Products, Product packaging, marketing materials, and
documentation and may periodically send out requests for samples. Microsoft may
also conduct spot checks in retail outlets and other product sources to monitor
your compliance with the Logo License Agreement and these Logo Usage Guidelines.
Refusal to submit samples, non-compliance with your Logo License Agreement and
with these Guidelines, or failure to correct any deficiencies in your use of the
Logo and/or in the quality of the Product used in conjunction with the Logo upon
reasonable notice from Microsoft could result in revocation of your license to
use the Logo.
(C)1996 Microsoft Corporation. All rights reserved.
-3-
<PAGE> 25
EXHIBIT B
Microsoft, Visual Basic, Visual C++, and Windows are registered trademarks and
Visual FoxPro and the Microsoft Visual Basic Technology logo are trademarks of
Microsoft Corporation in the United States and other countries.
PostScript is a registered trademark of Adobe Systems, Inc. Macintosh is a
registered trademark and Mac is a trademark of Apple Computer, Inc. PANTONE is a
registered trademark of Pantone, Inc.
-4-
<PAGE> 1
EXHIBIT 10.12
VALUE-ADDED RESELLER/OEM AGREEMENT
This Agreement is made effective June 26, 1997 between ADP, Inc. ("ADP")
with offices at One ADP Boulevard, Roseland, New Jersey 07068, and Sagent
Technology, Inc. ("SAGENT" or "Sagent"), with offices at 2225 E. Bayshore Road,
Suite 100, Palo Alto, California 94303. The parties hereby agree that, after
execution of this agreement ("Agreement") by an authorized representative of
each of the parties, the terms and conditions of this Agreement shall apply to
the use and distribution by ADP of the Products (as defined below). All
capitalized terms used herein and not otherwise defined in this Paragraph or
elsewhere in the Agreement are defined in Section 1, Definitions.
1. DEFINITIONS
"Application" means a value-added application computer program
which is developed by ADP and marketed by ADP's National Accounts Division of
Employer Services.
"Basic Maintenance" means SAGENT's maintenance program pursuant
to which SAGENT shall provide to ADP receipt of all improvements, error
corrections, enhancements, modifications, updates, new versions (including,
without limitation, SAGENT's version 2 that works in accordance with the
documentation previously provided by SAGENT to ADP in respect thereof ("SAGENT
2")), and new releases of the Products (other than those designated as new
products by SAGENT), and support for the Product(s) and for all deliverables
developed by Sagent as described in Section 5(e) hereof, for a fee described in
Section 8 hereof, payable in advance. For purposes of clarification,
enhancements to functionality included in the integrated Data Mart Solution are
included in Basic Maintenance. SAGENT reserves the right, in its sole
discretion, to make non-material changes to the form and content of its Basic
Maintenance from time to time and will provide ADP with a sixty (60) day advance
notice of any such non-material change(s). As used in this Agreement, a
"non-material" change shall consist of change of an administrative or otherwise
non-substantive nature, not having an adverse effect upon a Solution, an
Interface or an Application previously effected, or a Solution being undertaken
at the time of such change, or upon the value, performance or functionality of
the maintenance, support or Product being provided, as the case may be. No
consent by ADP shall be required for changes to the maintenance services
provided by SAGENT to customers of SAGENT other than ADP.
"Confidential Information" of a party means such party's
technical, business, marketing, financial or customer information, drawings,
specifications, designs, records, correspondence or other information disclosed
by such party in relation to this Agreement. The Product(s) shall be
Confidential Information of Sagent, subject to the remainder of this paragraph.
The Applications and any intellectual and/or proprietary rights therein,
including, without limitation, any patent, copyright, trademark, service mark,
logo, and trade secrets therein shall be Confidential Information of ADP,
subject to the remainder of this paragraph. A party's "Confidential Information"
does not include information (i) already in the public domain prior to the
execution of this Agreement, or which enters the public domain, other than by
unauthorized acts of the party receiving such information (the "Recipient"),
(ii) in the rightful possession of the Recipient prior to the execution of this
Agreement, or (iii) which is independently developed by the Recipient without
use of the disclosing party's Confidential Information or in violation of the
terms of this Agreement.
"Effective Date" means the date set forth in this first paragraph
of this Agreement.
"End User" means ADP customers who have licensed a Solution and
who are entitled to use Product(s) in connection therewith.
"End User Agreement" means the ADP standard End User software
license agreement, as modified by ADP from time to time, which specifies the
terms and conditions by which an End User may use Products. The End User
Agreement will be in effect between ADP and its End Users. ADP shall be entitled
to modify the End User Agreement from time to time provided that the End User
Agreement shall at all times contain such provisions that (i) place
confidentiality restrictions on the Products; (ii) prohibit reverse engineering
or disassembling of the Products; and (iii) reserve all intellectual property
rights not expressly granted thereunder.
<PAGE> 2
"Export Laws" means all export laws, administrative regulations,
and executive orders of any applicable jurisdiction relating to the control of
imports and exports of commodities and technical data, including, without
limitation, the U.S. Department of Commerce.
"Initial Term" shall have the meaning ascribed to such term in
Section 9(a) hereof.
"Level 1 Support" means SAGENT's support program that provides
telephone support during SAGENT's normal business hours, and Basic Maintenance
for Products, as more fully described in Section 5 herein.
"Level 2 Support" means SAGENT's support program that provides
twenty four hour per day and seven day per week telephone support, and Basic
Maintenance for Products, as more fully described in Section 5 herein.
"Maintenance Term" shall refer to a period for which ADP shall be
entitled to Basic Maintenance, Level 1 Support and Level 2 Support. The first
Maintenance Term and second Maintenance Term, if any, shall be for an eighteen
(18) month period, and thereafter each succeeding Maintenance Term, if any,
shall be for a twelve (12) month period.
"Price List" means the SAGENT then current corporate price list
in effect at the time ADP orders Products from SAGENT.
"Product" or "Products" mean Sagent Products (in object code form
only) outlined in Schedule A and B and licensed hereunder in accordance with
this Agreement, including improvements, error corrections, enhancements,
updates, new versions and new releases provided to ADP hereunder.
"Quarter", or "quarter" means a calendar quarter. For purposes of
this Agreement, the first Quarter shall mean that Period commencing July 1, 1997
and ending September 30, 1997, and all subsequent Quarters shall follow
sequentially therefrom.
"Solution" means the combination of an Application and a Product.
"User Documentation" means the then current SAGENT user manual(s)
and other written materials on the proper installation and use of, and which are
normally distributed with, the Products. Sagent represents to ADP that it has
provided to ADP an up-to-date copy of the User Documentation.
2. APPOINTMENT OF ADP; RELATIONSHIP OF THE PARTIES
(a) SAGENT hereby appoints ADP as an authorized, non-exclusive
Value-Added Reseller. A "Value-Added Reseller" or "VAR" develops, owns and
licenses, to one or more End Users, one or more value-added Applications in
conjunction with a Product copy. A VAR licenses its Application with each
Product copy it distributes.
(b) The relationship between the parties shall be that of VAR
licensing products and purchasing services as an independent contractor from
SAGENT and reselling and sublicensing to End Users. ADP and its employees are
not agents or representatives of SAGENT for any purpose and have no power or
authority to represent, act for, bind or commit SAGENT.
3. ADP'S RIGHTS, REPRESENTATIONS AND OBLIGATIONS
(a) Subject to the terms and conditions herein, SAGENT hereby
grants and ADP hereby accepts (i) a worldwide, non-exclusive, nontransferable
(except as otherwise provided herein), perpetual, royalty-free right and license
to use the Products for internal use only by ADP's National Accounts Division or
any successor division to ADP's National Accounts Division to develop
Applications and Solutions, and to provide support and other services to End
Users, and for its other internal purposes; (ii) a worldwide, non-exclusive,
nontransferable (except as otherwise
2
<PAGE> 3
provided herein), perpetual, royalty-bearing right and license to copy,
distribute, license, display, sell, and market Product copies and User
Documentation for use solely as part of a Solution; (iii) a worldwide
non-exclusive nontransferable (except as provided herein), perpetual,
royalty-free right and license to use in unaltered form the SAGENT trademarks,
service marks or marketing logos solely to promote the Products, Applications or
Solutions, provided ADP obtains SAGENT's prior written approval for each new
usage. In addition to the foregoing, Sagent hereby grants to ADP a worldwide
non-exclusive, nontransferable (except as otherwise provided herein), perpetual,
royalty-bearing right and license to copy, distribute, license, display, sell
and market Add-On Components as described in Schedule B; and (iv) the right and
license to sublicense to End Users Product copies and User Documentation for
internal use solely as part of a Solution. SAGENT retains all title to and,
except as unambiguously licensed herein, all rights, including all intellectual
property rights to the Products, and all copies and derivative works thereof (by
whomever produced) other than interfaces, translations, applications and
intellectual property used to create Applications or Solutions, and any other
derivative work created by or on behalf of ADP in accordance with the terms of
this Agreement. ADP shall retain all title, rights and interest to all
interfaces, translations, augmentations, Applications and intellectual property
used to create the foregoing, and any other derivative work created by, for or
on behalf of ADP. If ADP desires to use additional Sagent products, or desires
to distribute additional Sagent products, both parties may execute additional
Exhibits and ADP shall pay to Sagent the applicable and then-current license
fees and royalty as set forth in the Price List. Any fees contemplated in the
immediately preceding sentence shall not exceed [*]% of the then current list
price for the applicable Sagent software. Upon payment of the applicable fees
for each Product copy as set forth in Section 8(a)(ii) herein, ADP's
royalty-bearing right and license as granted herein shall be fully paid up for
such Product copy.
(b) Sagent will supply up to thirty-five (35) sets of its
Products, including documentation, for use pursuant to Section 3(a)(i) above at
no additional charge. ADP's National Accounts Division of Employer Services may
license additional Products in sets of twenty-five (25), including User
Documentation, for internal use at a cost of $[*] per Product set. Sagent shall
provide to ADP a set of Product master disks, and hereby authorizes ADP to use
the same to make Product copies for purposes consistent with Section 3(a)(ii)
above. Sagent shall provide to ADP electronic copies of User Documentation and
hereby authorizes ADP to incorporate the User Documentation into ADP's Solutions
and ADP's documentation pertaining to the Solutions.
(c) ADP shall not (i) distribute the Product copies on a stand
alone basis, (ii) distribute Product copies in any way except as part of a
Solution, (iii) except under the circumstances contemplated in Section 10 hereof
or under the Escrow Agreement, modify or alter the source code of the Products
or Product copies in any way, or (iv) use any SAGENT trademark or trade name in
a way that implies ADP is an agency or branch of SAGENTs.
(d) ADP agrees not to resell, distribute or sublicense Products
or Product copies to third parties other than End Users, except where such third
parties are approved in writing in advance by SAGENT, such approval not to be
unreasonably withheld.
(e) ADP may make up to ten (10) back-up copies of Products used
internally to develop Applications, develop Solutions and or for demonstrations.
(f) ADP shall ensure that the End User Agreement in electronic or
hard copy form accompanies each Product copy distributed by ADP. In addition,
ADP shall perform any other actions reasonably requested by Sagent to assure
adequate protection of SAGENTs interests in its intellectual property rights
contained in the Product(s) and Product copies. ADP shall not distribute or
sublicense Products pursuant to mass-market or "shrink-wrap" licenses in those
jurisdictions with respect to which ADP has been advised by legal counsel to ADP
that such licenses are not enforceable. The provisions of the preceding sentence
shall not impair the rights of ADP or End Users in respect of Products
distributed or licensed prior to the receipt of such advice by legal counsel.
(g) The Product, Product copies and all related documentation are
protected under copyright and trade secret laws and contain proprietary
information of SAGENT and its licensers. ADP shall abide by the terms of any
proprietary notices or markings, and shall use the documentation and the Product
only for the purposes contemplated by this Agreement, and shall not disclose to
others or reproduce the Product (except as specifically permitted under this
Agreement), unless specifically authorized by SAGENT or required by law, or
relevant in any legal proceeding between
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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the parties, and shall be liable for all loss or damage to SAGENT from any
failure to so abide or from any unauthorized disclosure in violation of this
Section 3(g) and Sections 3(c) and 3(d), and Article 4, of the Product, Product
copies, or related documentation by ADP or its agents. ADP shall not translate
any portion of the Product or Product copies or associated documentation into
any other format or language without the prior written consent of SAGENT. In the
event such translation is made by ADP, ADP shall own all rights to each
translation but shall grant to SAGENT a non-exclusive, royalty free license to
such translation.
(h) ADP shall promptly notify SAGENT of any actual or suspected
unauthorized use or disclosure of the Confidential Information received from
SAGENT, of which it becomes aware and shall provide reasonable assistance to
SAGENT (at SAGENT's expense) in the investigation and prosecution of
unauthorized uses or disclosure.
(i) Except as specifically permitted by this Agreement, ADP shall
not directly or indirectly (i) use any Confidential Information of SAGENT to
create any computer software program or user documentation which is
substantially similar to any Product; (ii) reverse engineer, disassemble or
decompile, or otherwise attempt to derive the source code for, any Product;
(iii) encumber, timeshare, rent or lease the rights granted by this Agreement;
(iv) copy, manufacture, adapt, localize, port or otherwise modify any Products
or other SAGENT Confidential Information or allow any agent or authorize any End
User of ADP to engage in similar conduct.
(j) ADP does not have, and shall not claim that it has, any right
in or to any of the Products or the Confidential Information received from
SAGENT other than as specifically granted by this Agreement.
(k) Any and all obligations of SAGENT to provide the Products, as
well as any technical assistance, will be subject in all respects to such United
States laws and regulations as will from time to time govern the license and
delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor legislation, and the Export Administration
Regulations issued by the Department of Commerce, Bureau of Export
Administration. ADP warrants that it will not export or reexport the Product,
Product copies, any Confidential Information or a Solution, or technical data
related thereto, except in conformity with such laws and regulations. ADP agrees
that unless prior written authorization is obtained from the Bureau of Export
Administration or the Export Administration Regulations explicitly permit the
reexport without such written authorization, it will not export, re-export, or
transship, directly or indirectly, the Product, Product copies, any of Sagent's
Confidential Information or a Solution to country groups S or Z (as defined in
the export Administration Regulations), or to any other country as to which the
U.S. Government has placed an embargo against the shipment of products which is
in effect during the term of this Agreement.
(l) If at any time SAGENT determines that the laws of any country
other than Canada, U.S., Mexico, Benelux or U.K. are or become insufficient to
protect SAGENT's intellectual or proprietary rights in the Products, SAGENT may
notify ADP in writing as to such determination and, unless ADP disagrees with
such determination, ADP shall discontinue its distribution of Product(s) in such
country within thirty (30) days from the date of Sagent's written notice to ADP.
In the event that ADP disagrees with Sagent's determination, it shall so notify
Sagent. At Sagent's option, Sagent may institute arbitration proceedings as
described in Subsection (m) below to resolve any dispute pertaining to the
question whether the laws of any country are or become insufficient to protect
SAGENT's intellectual of propriety rights in the Product(s). Notwithstanding the
foregoing, and notwithstanding the results of such arbitration proceeding, ADP
shall be entitled to fulfill all existing contractual obligations in such
country. ADP shall use reasonable efforts to abide by this restriction in any
country the subject of a notification by Sagent as provided above and (i) not
disputed by ADP, or (ii) the subject of an arbitration proceeding pursuant to
which a determination was made that such country's laws are not sufficiently
protective as alleged by Sagent. As of the date of this Agreement, no country is
the subject of such distribution restrictions.
(m) Except as may otherwise be provided herein, in the event of
any disputes between ADP and Sagent relating to the question described in the
third sentence of subsection (l) above, a representative designated by each of
the parties shall meet with each other within seven days of the request of
either party for such meeting, and shall engage in good faith negotiation to
resolve such dispute. In the event that after such seven (7) day period, the
parties have not resolved such dispute, either party may institute arbitration
proceedings pursuant to the Commercial Rules of
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the American Arbitration Association then in effect at the time of the
arbitration. The arbitration proceedings shall be held in Atlanta, George before
a panel of three arbitrators. Each party shall select an arbitrator from the
current listing of arbitrators registered with the American Arbitration
Association. The two arbitrators so selected shall within seven (7) days of such
selection mutually agree upon a third arbitrator registered with the American
Arbitration Association. In the event the two arbitrators are unable to agree
upon the third arbitrator, either party may request the president of the
American Arbitration Association to appoint the third arbitrator and the
decision of the president shall be final and binding upon the parties. The
arbitral award shall be issued within thirty (30) days following the arbitration
hearing, shall be in writing and shall be binding upon the parties.
(n) This provision applies to all Products and Product Copies
acquired directly or indirectly by or on behalf of the United States Government.
The Product and Product Copies are commercial products, licensed on the open
market at market prices, and were developed entirely at private expense and
without the use of any U.S. Government funds. If the Product or Product Copies
are supplied to the Department of Defense, the U.S. Government acquires only the
license rights customarily provided to the public and specified in this
Agreement. If the Product or Product Copies are supplied to any unit or agency
of the U.S. Government other than the Department of Defense, the license to the
U.S. Government is granted only with restricted rights. Use, duplication, or
disclosure by the U.S. Government is subject to the restrictions set forth in
subparagraph (c) of the Commercial Computer Software Restricted Rights clause of
FAR 52.227-19.
(o) ADP may permit properly licensed End Users to allow access
and use of Products to those entities providing services for such End Users
("Outsourcers"), whether in connection with a service bureau, facilities
management, outsourcing or other arrangement; provided, however, that such
Outsourcers may use the Products only as part of a Solution and only pursuant to
the applicable agreements entered into between such Outsourcers and End Users
("Outsourcing Agreements"), and not for the benefit of any third party. An
Outsourcers right to access and use Products shall expire upon the termination
or expiration of the applicable Outsourcing Agreements or End User Agreement,
whichever is earlier. By way of example (and not in limitation of the
foregoing), any such third party outsourcer shall be permitted to:
(i) access and execute the solution, including, without limitation, all
related software tools, at any location on behalf of the End User;
and
(ii) have access to a demonstration copy of the Products as part of the
Solution.
4. CONFIDENTIALITY
(a) Except as specifically allowed in this Agreement, neither
party shall use or disclose any Confidential Information of the other party,
except as required by law, regulation or court order. A party receiving
Confidential Information from the other shall use the same degree of care to
protect that Confidential Information as it uses to protect its own Confidential
Information, but shall in any event use reasonable care. Within fifteen (15)
days of the request of the disclosing party (which requests may not be made not
before the termination of this Agreement and all licenses granted herein, if
Sagent is the disclosing party), and in its sole discretion, the receiving party
shall either return to the disclosing party originals and copies of any
Confidential Information and all information, records and materials developed
from them by the receiving party (which shall not include the Applications or
related materials, if ADP is the receiving party), or destroy the same. Subject
to the exception set forth in the first sentence of this subsection (a) of
Section 4, and to the provisions of Section 12(k) of this Agreement, either
party may disclose only the existence, but not the contents, of this Agreement
without the prior consent of the other party, except that the contents may be
disclosed to parent companies or other controlling entities, and to financial or
legal advisors. Notwithstanding the foregoing, it is understood that ADP shall
be entitled to disclose to third parties such information pertaining to this
Agreement as is necessary to effectuate the commercial intentions of this
Agreement. By way of example and not in limitation of the foregoing, ADP shall
be entitled to disclose that it is an authorized value added reseller of SAGENT.
The parties acknowledge that ADP is in the business of developing and licensing
computer software applications, and agree that nothing in this Agreement,
including this Section 4(a), shall preclude or limit ADP's rights to develop
other applications, or applications similar to the Products, as long as ADP does
not use Sagent's Confidential Information to do so.
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(b) The parties acknowledge that money damages will not be an
adequate remedy if this section is breached and therefore, either party may, in
addition to any other legal or equitable remedies, seek an injunction or similar
equitable relief against such breach.
5. TRAINING AND SERVICES
(a) ADP will provide first line support for the Products to End
Users. Such support shall include, without limitation, receipt of calls, problem
and question intake, installation assistance, problem identification and
assistance, efforts to create repeatable demonstrations of reported Product
errors, and, if applicable, the replacement of any defective media or
distribution of updates. SAGENT shall have no obligation to furnish any
assistance, information or documentation to any third party.
(b) In consideration of ADP's payment of applicable fees set
forth in Section 8 herein, Sagent agrees to provide to ADP Basic Maintenance;
and Level 1 Support and Level 2 Support in accordance with the terms and
conditions set forth in Sagent's Premier Support Package, a copy of which is
attached hereto as Schedule C hereto and incorporated into this Agreement by
reference. Pursuant to Sagent's Premier Support Package, Sagent shall provide
second level support and maintenance that will enable ADP to perform support and
maintenance for its customers. Sagent will provide telephone consultation to ADP
with respect to any customer questions which ADP cannot adequately answer, and
will provide bug and error fixes, work around, and updates in accordance with
the response guideline below, or, if not related to a reported problem, as they
become available. Without limitation of the other provisions hereof, to the
extent Sagent provides an error correction through a temporary fix (which shall
at a minimum consist of sufficient programming and operating instructions to
implement the error correction), Sagent shall include the error correction
promptly in a subsequent release of the Product. From time to time, but in no
event less frequently than once per twelve (12) months, Sagent shall issue to
ADP new releases containing error corrections and other modifications and
enhancements. Sagent shall provide reasonable assistance to help ADP install and
operate each new release. Sagent agrees that the warranty obligations set forth
in Section 6(a)(iv) shall remain in effect throughout the Maintenance Terms (as
defined herein).
SAGENT shall assign a severity level in accordance with the
standards set forth in Schedule C to each reported Product problem or question,
and confirm with ADP the severity level so assigned, and SAGENT's efforts to
answer each such problem or question shall be commensurate with such severity
level. In the event that there is a disagreement between the parties over the
severity level assigned to a problem, the dispute shall be escalated to senior
management of both parties for resolution. SAGENT shall resolve "severity level
one" problems or questions within one (1) business day, "severity level two"
problems or questions within two (2) business days, and other problems or
questions within five (5) business days. ADP shall provide such reasonable
assistance to SAGENT as SAGENT may reasonably require for the performance of its
obligations pursuant to this Section 5(b).
(c) SAGENT will provide the following training, in each case to
occur in Atlanta, Georgia unless otherwise mutually agreed by the parties
hereto:
Customer Support: Sagent will train two ADP Customer
Support Representatives to provide first line support for Sagent
Products. Sagent will hold a class at a time and location convenient to
ADP to effect such training.
Sales Training: Sagent will provide two half day sales
training courses to ADP's APM's, the first to occur in July 1997 and the
other to take place in August 1997.
Basic Training: Sagent will teach one two day course in
Atlanta for up to twelve (12) developers, as designated by ADP.
Train The Trainer Program: Sagent will train such ADP
trainers designated by ADP in how to train ADP customers in the
implementation, administration and maintenance of Sagent Products. This
training will include one "class mentoring" of the first ADP taught
course, by a Sagent certified trainer. This will be held in October 1997
or at another time mutually agree upon.
Advanced Training Course: Sagent will provide one advanced
class for two ADP developers in July 1997 or at another time mutually
agreed upon.
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(d) If ADP desires to contract with Sagent for additional
support, installation, training, or any other need, Sagent will provide
installation support and training classes for $[*] per day, plus reasonable
expenses. All other support is offered at current and prevailing rates.
Sagent will assist ADP in its first four (4) ADP sales
opportunities at no cost to ADP. Such assistance by Sagent will include
participation in sales calls and demonstrations.
(e) Development:
ADP agrees to pay Sagent $[*], at the time of delivery, for
the delivery to ADP of SAGENT2 and of the items listed in items 1 and 2
hereinbelow (the "Deliverables") before June 30, 1997.
1) Support for Centura SQL databases as Data Sources.
2) Assistance in completing departmental security for the SAGENT
Datamart Solution.
The Deliverables shall conform to the specifications set forth in
Attachment B hereto. SAGENT2 shall contain, without limitation, such features
which conform to the specifications set forth in Attachment C hereto.
Any other mutually agreed upon engineering work to be performed
by SAGENT for ADP will be done on a time and materials basis as a mutually
agreed upon rate.
Pursuant to Sagent's Basic Maintenance obligations, Sagent shall
maintain and support the Deliverables and ensure compatibility of the
Deliverables on an ongoing basis with all future Product releases.
Notwithstanding the provisions of Section 3(a) hereof, is
expressly agreed that the Deliverables shall belong jointly to Sagent and ADP
and shall be considered the joint property of Sagent and ADP for purposes of
this Agreement. To the extent that ADP is not the joint owner of the
Deliverables, Sagent in consideration of $[*] and other good and valuable
consideration the receipt and adequacy of which hereby are acknowledged, hereby
irrevocably assigns to ADP, its successors and assigns, (i) joint rights, title
and interests in and to the copyrights of the Deliverables and all renewals and
extensions of the copyrights that may be secured under existing or future laws,
and (ii) joint rights, title and interests in all other property rights in the
Deliverables. To the extent that Sagent is not the joint owner of the
Deliverables, ADP, in consideration of $[*] and other good and valuable
consideration the receipt and adequacy of which hereby are acknowledged, hereby
irrevocable assigns to SAGENT, its successors and assigns (x) joint rights,
title and interest in and to the copyrights of the Deliverables and all renewal
and extensions of the copyrights that may be secured under existing or future
laws, and (y) joint rights, title and interest in all other property rights in
the Deliverables. Each party shall, upon request by the other party hereto and
at the other party's expense, promptly execute, acknowledge or deliver any
documents or instruments deemed reasonably necessary by the other party to
document, enforce, protect or otherwise perfect such other party's copyright and
other interests in the Deliverables. Neither party hereto shall have the right
to license or distribute the Deliverables, without the other party's consent,
except that ADP shall be permitted to license and otherwise distribute the
Deliverables as part of a Solution as otherwise contemplated in this Agreement.
(f) Acceptance
Upon completion of the development performed by Sagent in
accordance with Section 5(e) of this Agreement, Sagent shall give written notice
thereof to ADP and shall deliver the Deliverables to ADP for evaluation,
including all documentation and other materials necessary for the proper
utilization by ADP of the Deliverables. ADP shall develop and perform during a
thirty (30) day period following receipt of the Deliverables, such acceptance
tests it may wish to perform to verify that the Deliverables conform to the
specifications. If the Deliverables pass such acceptance tests, ADP shall
deliver to Sagent written notification thereof and the Deliverables shall be
considered accepted. If the Deliverables do not pass such acceptance tests, ADP
shall promptly deliver to Sagent written notification thereof, setting forth in
detail those features of functions that do not substantially conform in all
material respects with the Specifications. Sagent, at its own expense, shall use
reasonable efforts to correct such deficiencies within thirty (30) calendar days
from the date of ADP's deficiency notice, whereupon Sagent shall deliver the
corrected Deliverables to ADP for evaluation. ADP may then perform additional
acceptance tests for a period not to exceed thirty (30) calendar days from the
date Sagent delivered the corrected deliverables to ADP. If the Deliverables, in
ADP's
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omitted portions.
<PAGE> 8
reasonable judgment, still do not conform to the Specifications, (a) ADP may
reject the Deliverables or continue the process described in this subsection (f)
until ADP, in its sole discretion, notifies Sagent of acceptance or of rejection
or (2) Sagent may notify ADP of Sagent's decision to discontinue this process.
If ADP does not notify Sagent in writing of acceptance or rejection of the
Deliverables within ninety (90) calendar days of the delivery of the
Deliverables, the Deliverables shall be deemed accepted.
(g) Failure of Acceptance Testing
If ADP rejects the Deliverables pursuant to subsection (f) above,
then neither ADP nor Sagent shall have any further obligation to the other with
regard to the Deliverables.
6. LIMITED WARRANTIES AND INDEMNIFICATION
(a) SAGENT represents and warrants that (i) it has been duly
authorized and has full power to enter into and perform this Agreement; (ii) the
Products and the Deliverables will not to the knowledge of Sagent, after due
inquiry, contain any viruses, locks, time-bombs or other devices (collectively,
"Devices") that will cause any software or hardware used by ADP to be erased, to
become inoperable or incapable of processing, or to otherwise damage or
negatively affect the performance of said software or hardware in any manner,
and to the extent that the Products or the Deliverables shall contain any
Devices, Sagent shall, upon notice by ADP or upon learning of the same, replace
the Products or the Deliverables, as applicable, with Products or Deliverables
containing no Devices; (iii) the execution, delivery and performance of this
Agreement by Sagent will not violate any applicable legal requirement, the
violation of which would result in a material breach by Sagent of its
obligations hereunder, and (iv) during the first ninety (90) days from the date
ADP receives an unmodified Product ("Warranty Period") from SAGENT, the Products
will, under normal use and operating conditions, be free of defects in materials
and workmanship and will substantially conform to the User Documentation and the
specifications set forth in Attachment A hereto.
EXCEPT FOR THE EXPRESS LIMITED WARRANTIES SET FORTH IN THIS
AGREEMENT, ADP AND ANY END USER ACCEPT THE PRODUCTS "AS IS" WITH
NO OTHER EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS OF ANY KIND,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. ADP MAKES NO WARRANTIES
REGARDING THE APPLICATION(S) OR SOLUTIONS. ADP WARRANTS THAT THE
EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY ADP WILL
NOT VIOLATE ANY APPLICABLE LEGAL REQUIREMENT, THE VIOLATION OF
WHICH WOULD RESULT IN A MATERIAL BREACH BY ADP OF ITS OBLIGATION
HEREUNDER.
(b) Sagent represents that, as of the date of this Agreement, it
is not currently involved in any litigation (and is not aware of any causes of
action or threatened litigation) relating to infringement by SAGENT of the
intellectual property rights of third parties. SAGENT shall indemnify, defend,
save and hold ADP and its officers, directors, agents, affiliates and employees
harmless from all liability, damages, suits, fines, judgments, losses, claims,
actions, and costs and expenses including attorneys' fees (and other costs and
expenses incidental thereto), incurred by any such person, in connection with
investigating, preparing or defending any such claim relating to or arising (1)
out of any breach of representation or warranty of Sagent in this Agreement; (2)
out of any failure by Sagent in the installation, maintenance or support of
Products, or in training as contemplated in this Agreement; or (3) on account of
any claim or allegation that the Product(s) or the Deliverables, or the use or
distribution thereof as contemplated hereunder, infringe upon any patent,
copyright, trademark or trade secret or other property rights or proprietary
interests of any other party. Upon receipt by a person entitled to
indemnification under this Section 6(b) of actual notice of a claim, action or
proceeding against such person in respect of which indemnity may be sought
hereunder, such person shall promptly notify Sagent with respect thereto. In any
event, failure to so notify Sagent shall not relieve Sagent from any liability
which Sagent may have on account of this indemnity except to the extent that
Sagent shall have been materially prejudiced by such failure, provided that if
such failure shall result in additional expense to Sagent such additional
expense shall not be indemnified hereunder. Sagent shall be entitled to assume,
and if requested by ADP shall assume, the defense of any litigation or
proceeding in respect of which indemnity may be sought hereunder. In any such
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<PAGE> 9
litigation or proceeding the defense of which Sagent has so assumed, ADP (and
any other person entitled to indemnification under this Section 6(b)) shall have
the right to participate in such litigation or proceeding and to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such person. ADP agrees to give Sagent reasonable assistance (at no cost to ADP)
in connection with SAGENT's defense of any such claim. SAGENT will not be
responsible for any settlement it does not approve in writing but if settled
with such approval, SAGENT agrees to indemnify ADP and any such person entitled
to indemnification under this Section 6(b) from and against any loss or
liability by reason of such settlement. In addition to the foregoing
indemnification to be provided by Sagent, in the event that use of the Products
or any part thereof is enjoined, Sagent shall, in the following order of
priority, at its expense and as mutually agreed: (X) procure the right for ADP
and its End Users to continue to use the Products or the affected part thereof;
(Y) replace the Products or the affected portion thereof with other suitable
non-infringing software; or (Z) modify the Products or the affected portion
thereof so as to be non-infringing, without detracting from the overall
performance of the Products. If none of the foregoing remedies set forth in the
immediately preceding sentence are commercially feasible, Sagent shall refund
the aggregate fees paid by ADP for the Products prorated on a three (3) year
basis from the Effective Date. The foregoing obligation of SAGENT does not apply
with respect to Product or portions or components thereof (i) to the extent not
supplied by SAGENT, (ii) to the extent made in whole or in part in accordance to
ADP specifications, if the infringement results from Sagent's conformity with
ADP's specifications, (iii) to the extent modified after shipment by ADP, if the
alleged infringement is caused by such modification, (iv) combined with other
products, processes or materials not approved by SAGENT to the extent the
alleged infringement relates to such combination, (v) where ADP continues
allegedly infringing activity after being notified thereof by Sagent and
provided by Sagent with a non-infringing replacement for the infringing portion
of the Products in accordance with the provisions of subsection (b)(Y) or (b)(Z)
of this Section 6 or (vi) to the extent that ADP's infringement results from the
use by ADP of the Product not strictly in accordance with the License. The
provisions of this Section 6(b) shall survive the termination of this Agreement
until thirty (30) days after the expiration of the applicable statute of
limitations in respect of each applicable cause of action.
(c) Upon SAGENT's breach of Section 6(a)(iv) hereof, SAGENT
shall, in its sole discretion and at its option, provide modifications to keep
the Products in substantial conformance with the Product specifications and the
related User Documentation, or replace the Products. In addition to the
foregoing, Sagent shall provide ADP with such additional support required by ADP
in order that ADP may provide support to its End Users. For purposes of
clarification, the parties agree that the provisions of this Section 6(c) shall
not be in limitation of the provision of Sections 5(b), 9 and 10 hereof.
(d) ADP and SAGENT shall, at their own expense, indemnify,
defend, save and hold harmless each other from and against any claim, loss,
expense, or judgment (including reasonable attorneys' fees) which arises from
misrepresentations made in this Agreement by the other party.
(e) ADP shall, at its expense, indemnify, defend, save and hold
harmless SAGENT from and against any claim, loss, expense, or judgment
(including reasonable attorneys' fees) to the extent the same arises (i) from
any warranties granted in excess of the representations, warranties, covenants
and other agreements made by SAGENT in this Agreement; (ii) the marketing of
Product copies by ADP (except as contemplated whether explicitly or otherwise in
this Agreement); or (iii) infringement by the Application or Solution or any
non-Product related material supplied by ADP of any patent, copyright, trademark
or trade secret of any third party, except to the extent that such infringement
arises from the use of the Product as intended hereunder. Upon receipt by SAGENT
of actual notice of a claim, action or proceeding against SAGENT in respect of
which indemnity may be sought hereunder, SAGENT shall promptly notify ADP with
respect thereto. In any event, failure to so notify ADP shall not relieve ADP
from any liability which ADP may have on account of this indemnity except to the
extent that ADP shall have been materially prejudiced by such failure, provided
that if such failure shall result in additional expense to ADP such additional
expense shall not be indemnified hereunder. ADP shall be entitled to assume, and
if requested by SAGENT shall assume, the defense of any litigation or proceeding
in respect of which indemnity may be sought hereunder. In any such litigation or
proceeding the defense of which ADP has so assumed, SAGENT shall have the right
to participate in such litigation or proceeding and to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of SAGENT.
SAGENT agrees to give ADP reasonable assistance (at no cost to SAGENT) in
connection with ADP's defense of any such claim. ADP will not be responsible for
any settlement it does not approve in writing but if settled with such approval,
ADP agrees to indemnify SAGENT from and against any loss or liability by reason
of such settlement. The provisions of this
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<PAGE> 10
Section 6(e) shall survive until thirty (30) days after the expiration of the
applicable statute of limitations in respect to each cause of action.
(f) Sagent represents and warrants that the Products will (i)
record, store, process and present calendar dates falling on or after January 1,
2000, in the same manner, and with the same functionality, as the Products
store, process and present calendar dates on or before December 31, 1999; (ii)
lose no functionality with respect to the introduction of records containing
dates falling on or after January 1, 2000, and (iii) produce no logical or
arithmetical inconsistency when dealing with dates beyond December 31, 1999.
7. LIMITATION OF LIABILITY
NOTWITHSTANDING ANYTHING ELSE HEREIN TO THE CONTRARY, IN NO EVENT
WILL ADP OR SAGENT BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOST REVENUES OR PROFITS), EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR SAGENT'S OBLIGATIONS UNDER SECTIONS
6(b) AND 6(d) ABOVE, AND ADP'S OBLIGATIONS UNDER SECTIONS 6(d) AND 6(e) ABOVE,
EACH PARTY'S LIABILITY TO THE OTHER PARTY OR ANY THIRD PARTY FOR A CLAIM OF ANY
KIND RELATED TO THIS AGREEMENT OR ANY PRODUCT, WHETHER FOR BREACH OF CONTRACT OR
WARRANTY, STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, SHALL NOT EXCEED THE
AGGREGATE OF FEES PAID TO SAGENT UNDER THIS AGREEMENT.
8. FEES, DISCOUNTS, PAYMENTS, RECORDS, AUDITS
(a) The quantities of Products to be purchased by ADP hereunder,
and the fees to be paid in respect thereof, are as follows:
(i) Minimum guarantee. Subject to the remainder of this
Agreement, ADP agrees to purchase not less than [ * ] ([ * ]) units of
Product during the Initial Term. Of such [ * ] ([ * ]) Products, at
least [ * ] ([ * ]) shall be purchased during the first four quarters of
the Initial Term. During the fifth quarter, ADP shall purchase at least
such number of Products equal to the excess, if any, of [ * ] ([ * ])
over the number of Products purchased during the first four quarters;
and during the sixth quarter of the Initial Term, ADP shall purchase at
least such number of Products equal to the excess, if any, of [ * ]
([ * ]) over the number of Products purchased during the first five
quarters.
(ii) Prices. The prices of Products shall be as follows:
The fee to be paid by ADP for each of the first forty (40) units of
Product (as described in Part I of Schedule B) provided by Sagent to ADP
and subsequently licensed or distributed to an End User is [ * ] Dollars
($[ * ]). This fee represents a [ * ]% discount from the list price for
each Product. After forty (40) units of Product have been purchased by
ADP hereunder, the price of all subsequent units of Product shall be
[ * ] Dollars ($[ * ]) or [ * ] percent ([ * ]%) of the then current
list price of Product, whichever is lower. The fees for the add-on
components specified in Part III of Schedule B, if ADP elects to
purchase same, will be [ * ] percent ([ * ]%) of SAGENT's price for such
components, as set forth in such Part III, or if lower [ * ] percent
([ * ]%) of Sagent's then current list price for such components. SAGENT
shall have the right, in its sole discretion and from time to time upon
sixty (60) days' prior written notice to ADP (but not during the Initial
Term or the first renewal term of this Agreement) to change the prices
on its Price List, to add or delete Products from the Price List or
implement special promotional programs. If ADP has submitted a bid(s) to
potential End User(s) by the date of such written notice, then ADP may
order Product at the previous price to fill such specific bid(s) for a
period of ninety (90) days from the date ADP receives such notice, or
until the price change takes effect, whichever is longer. ADP shall be
responsible for all use taxes, sales taxes, and similar taxes pertaining
to the Products, other than taxes based upon Sagent's income.
(iii) Payments. ADP agrees to pay SAGENT [ * ]
Dollars ($[ * ]) upon the execution of this
Agreement, in full payment for the first forty (40) Products. All
10
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 11
additional Products licensed by ADP shall be paid within thirty (30)
days of ADP's receipt of SAGENT's invoice for such Product(s).
(b) The parties agree that any license granted by ADP to an End
User which license is terminated within ninety (90) days after being implemented
by ADP may be relicensed by ADP to another End User without the payment of any
additional royalty fee. ADP shall have the right to set the fees it charges to
End Users in its sole discretion.
(c) For each Product copy licensed to an End User by ADP, ADP
shall maintain complete and accurate records (the "Copy Record") indicating by
quarter the Product name and the number of licenses to an End User. Within
thirty (30) business days after the end of each quarter, ADP shall deliver to
SAGENT the Copy Records applicable to that quarter in a report, accompanied by
any additional payment due to SAGENT relating to such Copy Records.
(d) No more than once during the Initial Term, Renewal Term or
any subsequent renewal period, at SAGENT's expense and with sixty (60) days'
prior written notice, SAGENT may audit all records of ADP relating to this
Agreement solely for purposes of determining the accuracy of payments during
ADPs normal business hours. If an audit reveals that the amount which should
have been paid to SAGENT is at least ten percent (10%) more than the amount
reported by ADP, SAGENT's sole and exclusive remedy shall be to have ADP pay the
reasonable cost of the audit to SAGENT. Any shortfall uncovered as a result of
an audit as well as the cost of the audit, if required by the preceding
sentence, shall be paid by ADP to SAGENT within thirty (30) days of the date
SAGENT notifies ADP that an amount is due.
(e) ADP shall pay any amounts owed to SAGENT on the date
specified and according to the terms of this Agreement. If a due date is not
specified, such payment shall be made by ADP within thirty (30) days after ADP's
receipt of SAGENTs invoice. Each party is solely responsible for its own
expenses incurred in the performance of this Agreement. If ADP fails to make any
payment when due, unless ADP has notified SAGENT of its objections to the amount
or basis of such payment, SAGENT may upon fifteen (15) days' advance written
notice suspend delivery of Products or services until the past due payment is
made. Sagent promptly will refund to ADP any overpayments made by ADP.
(f) Payments will be in United States dollars. Any overdue amount
shall bear interest at a rate of eight percent (8%) per annum or the maximum
rate allowed by law if less. Costs of conversion, outside collection and related
bank charges shall be paid by the party owing such payment. ADP shall be
responsible for all taxes, and tariffs assessed by a taxing authority against
ADP related to this Agreement (including any value added or sales taxes) other
than taxes measured by or in relation to SAGENT's income. All shipments by
SAGENT shall be F.O.B. origin. Risk of loss and damage will pass to ADP upon
delivery to ADP.
(g) Discounts do not apply to User Documentation ordered
separately, marketing collateral materials, or other products or services
offered by SAGENT and not mentioned in Schedules A and B. For avoidance of doubt
there will be no fees payable by ADP to SAGENT for End User Documentation
reproduced by ADP pursuant to this Agreement, whether for ADP's own internal use
or for distribution to End Users.
(h) Subsequent to the end of the Term as defined below, discounts
shall be in accordance with SAGENT's standard applicable published discount
schedule in effect at that time or as otherwise negotiated between the parties.
(i) The prices and terms of maintenance and support are as set
forth below. This Section 8(i) shall survive any termination or expiration of
this Agreement pursuant to Section 9 hereof, except that it may be terminated by
Sagent effective upon thirty (30) days' written notice to ADP upon the failure
by ADP to pay the then current MS Fee, unless ADP shall cure such failure within
such notice period.
(A) Provided that ADP shall pay to Sagent the fees described in
this Section 8(i), ADP shall be entitled
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<PAGE> 12
to Basic Maintenance, Level 1 Support and Level 2
Support, to be provided to ADP in accordance with the
provisions of Section 5(b) hereof.
(B) The fee for Basic Maintenance, Level 1 Support and Level 2
Support (the "MS Fee") for the Initial Term (the first
"Maintenance Term") shall be [*] Dollars ($[*]).
(C) At the end of the first Maintenance Term, and at the end of
each eighteen month period following sequentially thereafter
(each period, a "Maintenance Term"), Sagent shall provide to
ADP an invoice for the MS Fee in respect of the immediately
succeeding Maintenance Term, and ADP shall be entitled to
renewal and continuation of Sagent's obligations under Section
5(b) by payment to Sagent of the applicable MS Fee as provided
herein. However, any such invoice shall comply with the
maximum price provisions set forth herein. No increase in the
MS Fee shall be permitted, except that upon written notice by
Sagent to ADP prior to the final sixty (60) days of any
Maintenance Term, Sagent shall be entitled to increase its MS
Fee for the next succeeding Maintenance Term by no more than
[*] percent ([*]%) above its fee for the then current
Maintenance Term.
(D) The MS Fee for the first Maintenance Term shall be payable as
follows: [*] Dollars ($[*]) shall be payable to Sagent within
thirty (30) days after the execution of this Agreement; and
[*] Dollars ($[*]) shall be payable to Sagent twelve (12)
Months after such initial portion of the first MS Fee is due
and payable. The MS Fee for each subsequent Maintenance Term
shall be payable in two installments in the same manner as
payable in respect of the first Maintenance Term, whereby the
first installment, equal to two-thirds of the applicable MS
Fee, is due at the commencement of any such Maintenance Term,
and the second installment, equal to one-third of the
applicable MS Fee, is due after two thirds of the applicable
Maintenance Term has expired.
(j) In consideration of the training services to be provided to
ADP by SAGENT as outlined in Section 5(c) of this Agreement (the "Training
Services"), ADP agrees to pay $[*]. There is an additional cost of $[*] per
additional trainer enrolled in the SAGENT Train the Trainer program. The fees
for Training Services do not include taxes and/or reasonable travel expenses.
9. TERM AND TERMINATION
(a) The term of this Agreement shall be eighteen (18) months from
the Effective Date ("Initial Term"). At the expiration of the Initial Term, this
Agreement may be automatically renewed by ADP for one additional eighteen (18)
month period (a "Renewal Term") unless ADP provides to SAGENT thirty (30) days'
prior written notice of nonrenewal. During the Renewal Term, the same terms
applicable to the Initial Term shall apply, except that the minimum purchase by
ADP of Products shall be [*] ([*]) Products per [*].
(b) This Agreement may be terminated by either party: (i) upon
breach by the other party of any material term of this Agreement or for failure
to pay any amount when due, upon thirty (30) days' prior written notice by the
non-breaching party to the other, unless the cause is susceptible of being cured
and is cured within the thirty (30) day notice period or such other period
agreed to by both parties; (ii) immediately upon written notice to the other
party in the event the other party breaches Sections 3(i) or 4(a) hereof, (iii)
immediately upon written notice to the other party if a receiver or other
liquidating officer is appointed for substantially all of the assets or business
of the other party, or if such other party makes an assignment for the benefit
of creditors, or becomes insolvent or bankrupt or the rights or interest of such
other party under this Agreement become attached under any bankruptcy,
insolvency or reorganization proceedings. The date termination becomes effective
is called the "Termination Date".
(c) If this Agreement is terminated for any reason, all rights
granted under this Agreement shall terminate, except, as set forth in this
Section 9(c) and in Sections 9(f) and 9(g), and except for ADPs continued
license under Section 3(a), and its right to use Confidential Information for
the sole purpose of fulfilling any existing contractual
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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<PAGE> 13
obligations for Products and services to End Users, and any proposals to
prospective End Users which have been made prior to the effective date of any
such termination, and for the purpose of licensing to prospective End Users any
prepaid Products, the fees in respect of which are not otherwise refundable to
ADP hereunder. Use after the Termination Date shall be subject to all the
restrictions contained herein and those provisions of this Agreement which
survive termination. In addition, without limitation of anything else contained
herein, the provisions of Section 8(i), and, if the MS Fee is paid by ADP as
provided in Section 8(i), Sections 4, 5(b), 6(a)(iv), 6(d) and 10, and this
Section 9, shall survive the termination of this Agreement until the expiration
of the Final Maintenance Term. Upon termination or expiration of this Agreement,
except as otherwise provided herein, ADP will immediately cease to be an
authorized SAGENT VAR and shall refrain from representing itself as such and
from using any SAGENT trademark or trade name. Upon termination of this
Agreement by ADP for Sagent's breach, without limitation of ADP's other rights
and remedies hereunder, Sagent shall immediately refund to ADP any prepayment
for Product not licensed to End Users during the term hereof, and if the
Maintenance Term shall be terminated by such termination of this agreement,
Agent shall refund to ADP a pro rata portion of the MS Fee previously paid by
ADP representing the unexpired portion of the then current Maintenance Term. In
addition, any fees for training services not provided to ADP shall be promptly
refunded to ADP.
(d) Subject to Sections 9(c) and 9(g), within thirty (30) days of
the Termination Date, all Products, Confidential Information of SAGENT and
related materials in ADP's possession or control shall be returned to SAGENT,
or, upon SAGENT's written request, destroyed by ADP. Similarly, subject to
Section 9(c), within thirty (30) days of the Termination Date, all Confidential
Information of ADP and related materials in SAGENT's possession or control shall
be returned to ADP or, upon ADP's written request, destroyed by SAGENT.
(e) On the Termination Date, all outstanding obligations, per the
terms of this Agreement, to pay any amount to SAGENT will become due and payable
within thirty (30) days after such termination or the period otherwise provided
in this Agreement, whichever is earlier.
(f) All sections of this Agreement which by their terms imply an
ongoing obligation shall survive any termination of this Agreement.
(g) Notwithstanding anything to the contrary contained in this
Agreement, it is expressly agreed that the expiration or termination of this
Agreement for any reason shall not terminate or diminish in any way the right of
End Users then using the Solution to use the Products.
10. ESCROW
(a) SAGENT represents and warrants that SAGENT has entered into
an escrow agreement with Filesafe, Inc., d/b/a/ SourceFile ("SourceFile"), a
copy of which is attached as Schedule D ("Escrow Agreement"), and pursuant
thereto SAGENT has placed in escrow with SourceFile, fully annotated source code
of the Product(s). Sagent further covenants that the materials deposited with
SourceFile at all times will constitute a correct set of the source code of the
Products, as well as any corrections, enhancements and other revisions received
by ADP hereunder, or to which ADP becomes entitled under this Agreement
(collectively, the "Source Code"). Sagent further grants to ADP its successors
and assigns a worldwide irrevocable nonexclusive right and license to use,
execute, reproduce, display, perform, and distribute and prepare derivative or
collective works based upon the Source Code for the benefit of End Users who
enter into End User Agreements with ADP as contemplated in this Agreement, such
right and license to be exercisable by ADP solely following a Release Condition
and solely for the purpose of exercising its rights and performing its
obligations as contemplated under this Agreement. SAGENT further covenants to
remain bound to and in compliance with the provisions of the Escrow Agreement
throughout the term of this Agreement and each Maintenance Term, and hereby
waives any defense that the Escrow Agreement is invalid or unenforceable. SAGENT
agrees to the addition of ADP as a beneficiary under the Escrow Agreement,
subject to ADP's sending the fully executed copy of the form of acknowledgment
required by the Escrow Agreement and ADP's payment of the annual fee (which
shall not exceed $250 annually) applicable to a beneficiary's participation in
the Escrow Agreement.
(b) ADP shall be entitled to receive a copy of the Source Code
from escrow in accordance with the terms and conditions of the Escrow Agreement.
In addition to the "Release Conditions" specified and defined in Section
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<PAGE> 14
4(i) of the Escrow Agreement, SAGENT agrees that the following conditions shall
be deemed to constitute a Release Condition:
SAGENT materially breaches the provisions of Section 5(b) as to
maintenance of the Product(s) or Add-On Components;
Without limitation of the foregoing, in the event that Sagent shall for
any reason fail to resolve a Severity Level 1 Problem with a workaround, error
correction or other solution within ten (10) calendar days after the problem has
been reported to Sagent, and with an error correction within one hundred eighty
(180) days after the problem has been reported to Sagent, ADP shall have the
right to terminate this Agreement, and the parties further agree that such
circumstance shall be deemed to be a "Release Condition" under the Escrow
Agreement, entitling ADP to receipt of the Source Code.
In the event of such breach or such failure, or any condition
specified in Section 4(i) of the Escrow Agreement, ADP shall notify SourceFile
of the occurrence of the Release Condition and SAGENT agrees not to issue
"Contrary Instructions" as such term is defined in Section 4(ii) of the Escrow
Agreement, or to prevent in any other way the release of the Source Code to ADP.
SAGENT further agrees in the event of such failure, to instruct SourceFile to:
(i) waive the sixty (60) day waiting period specified in Section 4(iii) of the
Escrow Agreement and (ii) immediately release the Source Code to ADP for
purposes of maintaining and supporting the Products. In furtherance of the
foregoing intentions, Sagent represents and warrants to ADP that Sagent has
delivered to SourceFile a fully executed letter of instructions in the form of
Schedule E hereto (the "Instructions"), and Sagent further covenants that it
shall take no action to revoke, alter, or circumvent the intention of, the
Instructions. In addition, SAGENT hereby grants to ADP the right to contract
with SAGENT's vendors in furtherance of the license described in this Section
10(b). In the event of any dispute between the parties pertaining to a Release
Condition, actual or deemed, the parties agree that the pendency of such dispute
shall not prevent or delay the release to ADP of the Source Code.
11. SPECIAL REPRESENTATIONS
Each party represents and warrants to the other party as follows:
(a) Neither the execution and delivery of this Agreement nor the
performance of any actions required hereunder is being consummated by it with or
as a result of any actual intent by such party to hinder, delay or defraud any
entity to which such party is now or will hereafter become indebted.
(b) Such party does not have any intent (i) to file any voluntary
petition in bankruptcy under any Chapter of the Bankruptcy Code or in any manner
to seek relief, protection, reorganization, liquidation, dissolution or similar
relief for debtors under any local, state, federal, foreign or other insolvency
laws or laws providing for relief of debtors, or in equity, or directly or
indirectly to leave any of its affiliates to file any such petition or to seek
any such relief, or (ii) directly or indirectly to cause any involuntary
petition under any Chapter of the Bankruptcy Code to be filed under such party
of any of its affiliates, or to cause such party or any proceedings pursuant to
local, state, federal, foreign or other insolvency laws or laws providing relief
of debtors or in equity or (iii) directly or indirectly to cause the Products or
the intellectual property that is the subject of the licenses granted hereunder
to become the property of any bankruptcy estate or the subject of any local,
state, Federal, foreign or other bankruptcy dissolution, liquidation or
insolvency proceedings.
12. GENERAL
(a) The parties hereto expressly understand and agree that each
party is an independent contractor in the performance of each and every part of
this Agreement, is solely responsible for all of its employees and agents and
its labor costs and expenses arising in connection therewith. Neither party is
in any manner associated with or otherwise connected with the actual performance
of this Agreement on the part of the other party, nor with the other party's
employment of other persons or incurring of other expenses.
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<PAGE> 15
(b) During the Initial Term and the Renewal Term, if any, Sagent
shall not directly or indirectly sell, lease, license or otherwise distribute or
cause to be distributed the Products to PeopleSoft, Inc., or any affiliate
thereof, or offer, negotiate, or make any solicitation in furtherance of any of
the foregoing acts.
(c) SAGENT has the right at its sole discretion, with sixty (60)
days' advance notice to ADP, to make non-material changes or improvements or
enhancements in the design or specifications of the Products at any time. Sagent
promptly shall provide to ADP all upgraded products with all such changes,
improvements or enhancements, and shall provide to ADP such additional training,
support and other assistance as shall be reasonably requested by ADP to adapt
any Application to such changes, improvements, or enhancements, or to train its
or its customers' employees in connection therewith. SAGENT shall provide to ADP
thirty (30) days' notice prior to any such proposed Product change. If ADP
determines that any such change, improvement or enhancement may have an adverse
effect upon a Solution, ADP at its election and upon notice to SAGENT, shall be
entitled to continue, until SAGENT receives written notice from ADP to the
contrary, to receive, use, license and distribute hereunder the Product without
such change, improvement or enhancement, and SAGENT shall continue Basic
Maintenance, Level 1 Support and Level 2 Support for such Product as elected by
ADP.
(d) This Agreement may not be assigned by either party without
the prior written consent of the other party, which shall not be unreasonably
withheld, except that ADP may assign this Agreement, without Sagent's consent,
to any direct or indirect wholly owned subsidiary of AUTOMATIC DATA PROCESSING,
INC., and SAGENT may assign this Agreement in connection with its merger or the
sale of substantially all of the assets of SAGENT, provided that SAGENT or ADP,
as applicable, shall in the event of any such assignment remain liable as
guarantor of all of such party's obligations hereunder. Any purported assignment
in contravention of this section is null and void. Notwithstanding the foregoing
this Agreement shall bind and inure to the benefit of any successors or
permitted assigns. This Agreement is for the benefit of the parties hereto and
their respective successors and permitted assigns as described herein, and such
third party beneficiaries as are enumerated in the provisions of Section 6
hereof.
(e) Neither party will be responsible for failure of performance,
other than for any obligation to pay money, due to causes beyond its reasonable
control, including without limitation, acts of God or nature; labor disputes;
sovereign acts of any federal, state or foreign government; or shortage of
materials.
(f) Notices will be delivered to a party's address to the
following individuals outlined below, stated in the signature block of this
Agreement, or to another address which a party properly notified the other that
notices should be sent. In addition, any notice to ADP shall include a duplicate
copy to each of ADP, National Accounts Division, Attention: Division President,
and ADP, National Accounts Division, Attention: Division Counsel, at the
following address until July 21, 1997: 5665 Nordiside Drive, Atlanta, GA 30328,
and after July 21, 1997 at 5800 Windward Parkway, Alpharetta, GA 30005.
(g) This Agreement, including all attachments, exhibits and
appendices, is the complete and exclusive statement of the parties to this
Agreement on these subjects, and supersedes all prior written or oral proposals
and understandings relating thereto. Except as otherwise provided, this
Agreement may only be modified by a writing signed by an authorized officer of
each of the parties. This Agreement takes precedence over any purchase order
issued by ADP, which is accepted by SAGENT for administrative convenience only.
If any court of competent jurisdiction determines that any provision of this
Agreement is invalid, the remainder of the Agreement will continue in full force
and effect. The offending provision shall be interpreted to whatever extent
possible to give effect to its stated intent.
(h) Failure to require performance of any provisions or waiver of
a breach of a provision does not waive a party's right to subsequently require
full and proper performance of that provision. Singular terms will be construed
as plural, and vice versa. Section headings are for convenience only and will
not be considered part of this Agreement.
(i) This Agreement is governed by the laws of the State of
California without giving effect to its conflict of law provisions. The United
Nations Convention on Contracts for the International Sales of Goods will not
apply to this Agreement. Either party may seek to enforce or prevent a breach of
any term of this Agreement in the
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<PAGE> 16
appropriate courts of any state or country in which the Products are deployed by
ADP or in which ADP maintains an office. Nothing in this Agreement will be
deemed a waiver by either party of any and all available legal or equitable
remedies.
(j) Upon execution of this Agreement, ADP will be provided a
position on Sagent's advisory council ("Advisory Council"). The Advisory Council
meets at least once a Quarter in Palo Alto. ADP, at its option and discretion,
shall designate a representative as an Advisory Council member.
(k) SAGENT agrees to procure and maintain, beginning on the date
hereof and continuing throughout the term of this Agreement including any
Renewal Terms, and throughout all Maintenance Terms, a comprehensive general
liability insurance policy with an insurance company of national recognition
having a Best's rating of B+ or better in an amount of not less than $4,000,000
in the aggregate and $1,000,000 per occurrence and covering its obligations set
forth in Section 6(b) hereof; and to cause ADP to be an additional insured under
such policy. Within five (5) days after the execution hereof Sagent shall
deliver to ADP a certificate evidencing such coverage and such status of ADP.
The certificate shall provide thirty (30) days' advance written notice of
cancellation, non-renewal or termination be given to ADP.
(l) Except as specifically provided herein, neither party may use
the name, trademarks, service marks and/or logos of the other without such
party's prior written consent in each instance (which shall be at each party's
sole discretion). Without the prior written consent of the other party hereto,
which consent shall not be unreasonably withheld, neither party shall make any
news release, public announcements, denial or confirmation of this Agreement or
its subject matter or advertise any facts relating to this Agreement. The
foregoing restriction shall not apply to the extent such restriction is
inconsistent with the requirements of any law, rule, regulation or other legal
requirement, or the requirements of any national securities exchange or similar
trading system applicable to the party proposing to make such disclosure. The
parties shall use reasonable efforts to participate in joint press releases and
promotional activities regarding the ADP/Sagent relationship contemplated in
this Agreement. Each party shall bear responsibility for the cost of their
respective press releases and promotional activities, unless otherwise mutually
agreed. Each party shall submit to the other for prior written approval by an
authorized representative, which approval shall not be unreasonably withheld,
any joint press release or promotional literature which identifies the other
party and/or uses the other party's name, trademark(s), service mark(s) and/or
logo(s), which approval shall not be unreasonably withheld the case of proposed
press releases; provided, however, that each party shall have sole discretion to
refuse the use by the other party of any of its trademarks, trade names, service
marks and/or logos.
(m) The headings in this Agreement are intended for convenience
of reference and shall not affect its interpretation. Any reference herein to a
Section or an Exhibit or an Attachment or a Schedule shall be deemed to refer to
the applicable Section or Exhibit or Attachment or Schedule to this Agreement.
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<PAGE> 17
(n) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which, taken together,
shall constitute one Agreement.
SAGENT TECHNOLOGY, INC. ADP, INC.
By: By:
Name: Name:
Title: Title:
Address: 2225 E. Bayshore Road, Suite 100 Address: One ADP Boulevard
Palo Alto, CA 94303 Roseland, New Jersey 07068
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<PAGE> 18
SCHEDULE A
VALUE ADDED RESELLER LICENSED PRODUCTS
Software List of Products
The Sagent Data Mart Solution consist of the following integrated family of
products, more fully described in Attachment A:
Base Package Software Solution (One Full Set)
Data Mart Server (1)
Design Studio (1)
Information Studio (10)
Weblink Server (1)
Admin (1)
Sagent Analysis (10)
Reporting Tool (Either CrystalReport's or Sagent's) (10)
<PAGE> 19
SCHEDULE B
Discount Schedule
I. The Product consists of:
Data Mart Server (1)
Design Studio (1)
Information Studio (10)
WebLink Server (1)
Admin Tool (1)
Sagent Analysis (10)
Report Tool (either CrystalReport's or Sagent's) (10)
The list price for the Product is $[*]. SAGENT agrees to give ADP a [*]%
discount off the list price for each Product purchased during the Initial Term
of this Agreement, which results in a list price of $[*] for each Product.
II. The price per Product (including user documentation) for ADP's internal
use only is $[*] per Product.
III. ADD ON COMPONENTS SOLD TO EXISTING CUSTOMERS (i.e., CUSTOMERS WHO HAVE
PURCHASED THE PRODUCT IDENTIFIED IN I., ABOVE):
<TABLE>
<CAPTION>
List Price
----------
<S> <C>
Data Mart Server (1)..................... $ [*]
Weblink Server (1)....................... $ [*]
Information Studios (Sets of 5).......... $ [*]
Analysis Tools (Set of 5)................ $ [*]
Reporting Tools (Set of 5)............... $ [*]
Design Studio's (1)...................... $ [*]
Admin Tool (1)........................... $ [*]
</TABLE>
DISCOUNT SCHEDULE: The price to ADP during the Initial Term of this Agreement
for purchases of add-on components will be [*]% of the prices shown on the Price
List.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 20
SCHEDULE C
Support & Professional/Technical Services Pricing/Fees
Support Services
In addition to the Services described below, Sagent shall provide its Premium
Support as described elsewhere in this Exhibit C.
Support Services will include telephone support, in which we will answer
technical questions from Two (2) designated persons about the installation and
use of Products; Maintenance Releases, in which we will provide our copyrighted
in-line releases and workarounds as available; Upgrades, in which we will
provide new product releases (signified by a change in the version number) as
substitutes for Products; and other generally available Technical Materials.
Note that Maintenance Releases and Upgrades, where applicable, may not be used
to increase the total number of copies of the Products. After upgrade or
maintenance this agreement will only apply to the upgraded or maintained
versions of a Products provided that ADP shall have continued support for the
prior version for up to 24 months as required by ADP; you agree to destroy or
archive (but not use or transfer) the prior version within 24 months ADP and its
clients may need some time to move to a new release upgrade, etc.
TECHNICAL SUPPORT SERVICES
The Professional Support program is designed to give you access to Sagent
Technology's Technical Support Analysts. These analysts are available to insure
the continued operation of your Sagent product. This includes working with a
Sagent system that has gone down, assisting with the initial setup of new
systems, and other problems that arise form the use of our products. Technical
Support Services does not include the development of custom code, or detailed
product training.
DESIGNATED PROFESSIONAL SUPPORT CONTACTS
Maintaining a clear line of communication between your organization and Sagent's
Technical Support department is key to making sure you get the most from the
Professional Support program. As such, it is important that you designate
specific individuals within your organization that become the primary contacts
for working with Sagent Technical Support. These individuals, who are familiar
with the technical workings of your company's systems, help by managing the flow
of information to the Support Analysts to insure that responses are focused on
the problem at hand. The number of contacts within your organization that have
access to Sagent Technical Support is specified in this agreement, and is
determined by you based on your need.
WORKING WITH TECHNICAL SUPPORT
Sagent Technical Support tracks your issues based on an incident model. While we
do not limit you to a specific number of incidents, we do use incidents to make
sure that each issue that you have is resolved to the best of our ability. An
incident is defined as a single support issue that cannot be broken down into
smaller support issues. Each of these incidents is tracked individually, and can
be referenced by you when you contact us.
CONTACTING SAGENT TECHNICAL SUPPORT BY PHONE
Use the phone to contact Sagent Technical Support whenever you have a
time-critical or business-critical problem. Sagent Technical Support is
available to Premium Support Customers twenty-four (24) hours a day, seven (7)
days a week. During regular business hours, Premium Support Customers are given
priority in the phone queue. If we are unable to answer your call immediately,
you will be given the option to leave a voice mail message. Telephone calls
placed outside regular business hours automatically go to voice mail, and a
designated support analyst is paged. In the message, please be sure to give us
your name, company name, a description of the problem, and a phone number that
you can be reached at. All calls that go to voice mail will be responded to
within two business hours. If we fail to connect with you on the return call, we
will leave a message (if possible) with an appropriate time to follow up.
<PAGE> 21
CONTACTING SAGENT TECHNICAL SUPPORT BY ELECTRONIC MAIL
For problems that are not time-critical, you can contact us via the Internet at
[email protected]. We will respond to all mail messages within one
business day of the time it arrives at Sagent Technical Support. Please be sure
to include a full description of the problem, your name, your company's name,
and a return e-mail address.
ESCALATION PROCESS
Step 1 - All new technical support issues are handled initially by our
support analysts. Our support analysts are trained to deal with the
majority of all support issues, and most support issues are resolved
at this step. All problems will be acknowledged within two (2)
business hours.
Step 2 - If an issue comes up that cannot be handled by the support analyst,
it is given one of the following priorities:
A) Severity 1 - For business outages, or issues, that have
a serious impact on ADP or an End User which threatens
future productivity.
B) Severity 2 - For issues that do not have a significant
current impact on customer productivity of ADP or an
End User.
Step 3 - Severity 1 issues are immediately escalated to Sagent's upper
management team to determine the proper course of action. Sagent
shall take all necessary and desirable steps to resolve such issues
with an error correction, a workaround or another solution within
one business day.
Severity 2 issues are escalated to an escalation review committee,
which meets regularly to determine the proper course of action for
these escalations. Sagent shall take all necessary and desirable
steps to resolve and issues with an error correction, a workaround
or another solution.
Step 4 - The course of action determined in Step 3 is communicated to ADP,
and an estimated time to complete is given.
Step 5 - If Sagent has not delivered an error correction, but has delivered a
workaround acceptable to ADP, for a suspected error within the times
contemplated in this Agreement, Sagent shall provide, within
twenty-four (24) hours after ADP's request, a written analysis of
the problem and a written plan to supply ADP with an error
correction within thirty (30) calendar days. The foregoing remedies
are in addition to and not lieu of all other remedies available to
ADP under the Agreement.
PREMIUM SUPPORT PROGRAM
Sagent Premium Support is provided for our customers that require more security
when implementing Sagent's products in mission critical environments. In order
to provide this security, the Premium Support Program provides round the clock
access to Sagent Technical Support team via the phone, as well as electronic
support via the Internet. Sagent's Premium Support Program also includes an
escalation process that is designed to make sure technical issues receive the
proper attention.
This reference guide is an outline to the services currently available under the
Premium Support program. Use this guide to determine the best way to get the
most from this service.
TECHNICAL SUPPORT SERVICES
<PAGE> 22
The Professional Support Program is designed to give you access to Sagent
Technology's Technical Support Analysts twenty-four (24) hours a day, seven (7)
days a week. These analysts are available to insure the continued operation of
your Sagent product. This includes working with a Sagent system that has gone
down, assisting with the initial setup of new systems, that arise from the use
of our products. Technical Support Services does not include the development of
custom code, or detailed product training.
<PAGE> 23
SCHEDULE D
[ESCROW AGREEMENT]
TERMS AND CONDITIONS OF ESCROW ACCOUNT
SourceFlex
Software Escrow Agreement
Developer [Sagent Technology, Inc.] SourceFile
This contract is a two-party agreement between SourceFile and Sagent Technology,
Inc. End-users may sign on to this agreement as they license the technology from
the Sagent. The SourceFlex contract provides the opportunity to serve all
licensees of a particular Software Developer for one or more systems.
<PAGE> 24
SOURCEFLEX
SOFTWARE SOURCE CODE ESCROW AGREEMENT
SOURCEFILE NUMBER: 7446
This Software Source Code Escrow Agreement, dated as of January 6, 1997
by and between FileSafe, Inc., a California corporation, doing business as
SourceFile ("SourceFile") located at 1350 West Grand Ave., Oakland, California
94607 and Sagent Technology, Inc., located at 2225 E. Bayshore, Palo Alto, CA
94303 ("Sagent"), and each Beneficiary identified by Depositor to SourceFile as
provided for in Paragraph 3 hereof (each a "Beneficiary", collectively the
"Beneficiaries").
RECITALS:
A. Pursuant to certain software license agreements (each a "License
Agreement", collectively the "License Agreement"), Depositor licenses to certain
licensees certain software in object code form (the "Software"). A description
of each Software effective as of the date hereof, is attached hereto as Exhibit
"A".
B. The Software is the proprietary and confidential information of
Depositor, and Depositor desires to protect such ownership and confidentiality.
C. Depositor desires to ensure the availability to its Beneficiaries of
the source code and all necessary proprietary information related to the
Software (the "Source Material") in the event certain conditions set forth in
Paragraph 4 of this Agreement should occur.
AGREEMENT:
1. Delivery of Source Material to SourceFile. Upon execution of this
agreement, Depositor shall deliver to SourceFile a parcel (the "Parcel") sealed
by Depositor, which Depositor represents and warrants contains the Source
Material. SourceFile has no knowledge of, and makes no representations with
respect to, the contents or substance of the Parcel, the Software or the Source
Material. Depositor shall send to SourceFile a duplicate of the Source Material
within three (3) days after receiving written notice from SourceFile that the
Source Material has been destroyed or damaged. All supplements shall be subject
to the terms and provisions of this Agreement.
2. Acknowledgement of Receipt by SourceFile. SourceFile shall promptly
acknowledge to Depositor and to Beneficiary the receipt of the Parcel and any
supplements to the Source Material which are added to the Parcel. Depositor
shall provide supplements to the Source Material for each version of the
Software. All such supplements shall be subject to the terms and provisions of
this Agreement. SourceFile will notify Beneficiary and Depositor of each update
to the Source Material. Such notification will be sent via certified mail,
return receipt required. SourceFile will provide an account status report to the
Beneficiary and Depositor on a semiannual basis.
3. Acknowledgement by Beneficiaries. For purposes of this Agreement, a
licensee of the Software under a fully executed License Agreement, shall be a
Beneficiary hereunder with such rights of a Beneficiary as set forth herein,
only if (i) such licensee has sent to SourceFile a fully executed copy of the
form of acknowledgement attached hereto as Exhibit "B", in which such licensee
accepts the terms of this Agreement and (ii) all fees are paid. The names and
addresses of the Beneficiaries shall be described in one or more schedules of
Beneficiaries. A schedule of Beneficiaries effective as of the date of this
Agreement is attached hereto as Exhibit "C". All other licensees of the Software
shall have no rights hereunder and SourceFile shall have no duties to such
licensees.
<PAGE> 25
4. Terms and Conditions of the Source Material Escrow. The Parcel shall
be held by SourceFile upon the following terms and conditions:
(i) Beneficiary's right to possession of the Source Code is
subject to Beneficiary's execution of a registration document
with SourceFile and payment to Sagent of an annual fee for
Beneficiary's participation in such escrow account. Such
registration document shall provide Beneficiary access to the
Source Code, the right to use and modify the Source Code
solely to maintain and support Beneficiary's current and
future customers of the Licensed Material and the right to
produce object code copies of the modified Licensed Material
as part of Beneficiary's applications for use in accordance
with the terms of the Agreement, subject to the following
conditions: (a) Beneficiary is in compliance with the terms of
the Agreement; (b) Beneficiary has a valid license to the
Licensed Material; and (c) Beneficiary has a valid maintenance
agreement with Sagent for support of the Licensed Material,
and either (1) A petition in bankruptcy has been filed in
Sagent's name, whether voluntarily or involuntarily, and such
petition is not withdrawn within 90 days of such filing or (2)
pursuant to Sagent's obligations under a valid maintenance
agreement with Beneficiary, Sagent has consistently and
repeatedly failed or refused to correct a catastrophic error
or numerous individual errors in the License Materials which
render the licensed materials commercially unusable. Provided
that the above conditions exist, and Beneficiary has given
Depositor written notice of such breach which was not cured
within 60 days (the Release Condition), then SourceFile shall
follow the following procedures set forth in this Section 4,
parts (ii), (iii), (iv) and (v).
(ii) SourceFile shall promptly notify Depositor of the occurrence
of the Release Condition and shall provide to Depositor a copy
of Beneficiary's notice to SourceFile.
(iii) If SourceFile does not receive Contrary Instructions, as
defined below, from Depositor within sixty (60) days following
SourceFile's delivery of a copy of such notice to Depositor,
SourceFile shall deliver a copy of the Source Material to
Beneficiary. "Contrary Instructions" for the purposes of this
Section 4 shall mean the filing of written notice with
SourceFile by Depositor, with a copy to the Beneficiary
demanding delivery, stating that the Release Condition has not
occurred or has been cured.
(iv) If SourceFile receives Contrary Instructions from Depositor
within sixty (60) days of the giving of such notice to
Depositor, SourceFile shall not deliver a copy of the Source
Material to the Beneficiary, but shall continue to store the
Parcel until: (1) otherwise directed by the Depositor and
Beneficiary jointly; (2) SourceFile has received a copy of an
order of a court of competent jurisdiction directing
SourceFile as to the disposition of the Source Material; or
(3) SourceFile has deposited the Parcel with a court of
competent jurisdiction or a Trustee or receiver selected by
such court pursuant to this Section 4, part (v) below.
(v) Upon receipt of Contrary Instructions from Depositor,
SourceFile shall have the absolute right, at SourceFile's
election, to file an action in interpleader requiring the
Depositor and Beneficiary to answer and litigate their several
claims and rights amongst themselves. SourceFile is hereby
authorized to comply with the applicable interpleader statutes
of the State of California in this regard.
5. Term of Agreement. This Agreement shall have an initial term of three
(3) years. The term shall be automatically renewed on a yearly basis thereafter,
unless Depositor, Beneficiary, or SourceFile notifies the other parties in
writing at least forty-five (45) days prior to the end of the then current term
of its intention to terminate this Agreement.
<PAGE> 26
6. Compensation of SourceFile. Depositor or Beneficiary agree to pay
SourceFile reasonable compensation for the services to be rendered hereunder in
accordance with SourceFile's then current schedule of fees, except that any fees
associated with Escrow Release Requests and Technical Review/Verification
Requests initiated by a Beneficiary must be paid by that Beneficiary in
accordance with SourceFile's then current schedule of fees. Depositor or
Beneficiary will pay or reimburse SourceFile upon request for all reasonable
expenses, disbursements and advances, including software duplication charges,
incurred or made by it in connection with carrying out its duties hereunder.
7. Limitation of Duties of SourceFile. SourceFile undertakes to perform
only such duties as are expressly set forth herein.
8. Limitation of Liability of SourceFile. SourceFile may rely on and
shall suffer no liability as a result of acting or refraining from acting upon
any written notice, instruction or request furnished to SourceFile hereunder
which is reasonably believed by SourceFile to be genuine and to have been signed
or presented by a person reasonably believed by SourceFile to be authorized to
act on behalf of the parties hereto. SourceFile shall not be liable for any
action taken by it in good faith and believed by it to be authorized or within
the rights or powers conferred upon it by this Agreement. SourceFile may consult
with counsel of its own choice, and shall have full and complete authorization
and protection for any action taken or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel.
9. Indemnification of SourceFile. SourceFile shall be responsible to
perform its obligations under this agreement and to act in a reasonable and
prudent manner with regard to this escrow arrangement. Provided that SourceFile
has acted in the manner stated in the previous sentence, Depositor and
Beneficiary each agree to indemnify, defend, and hold harmless SourceFile and
its agents and employees (collectively, "SourceFile") from any and all claims,
demands, liability, costs and expenses (including attorneys' fees) incurred by
SourceFile directly or indirectly arising from or relating to the Source
Material and/or SourceFile's performance of its duties under this Agreement.
10. Record Keeping and Inspection of Software. SourceFile shall maintain
complete written records of all materials deposited by Depositor pursuant to
this Agreement. During the term of this Agreement, Depositor shall be entitled
at reasonable times during normal business hours and upon reasonable notice to
SourceFile to inspect the records of SourceFile maintained pursuant to this
Agreement and to inspect the facilities of SourceFile and the physical condition
of the Source Material.
11. Technical Verification. Beneficiary reserves the option to request
SourceFile to verify the Source Material for completeness and accuracy. At
Beneficiary's expense, SourceFile may elect to perform the verification at its
site or at the Depositors site. Depositor agrees the reasonably cooperate with
SourceFile in the verification process by providing its facilities and computer
systems and by permitting SourceFile and at least one employee of Beneficiary to
be present during the verification of Source Material.
12. Restriction on Access to Source Material. SourceFile shall maintain
the Source Materials in a secure, environmentally safe, locked receptacle which
is accessible only to authorized SourceFile employees. SourceFile shall not
disclose the contents of this Agreement to any third party. If SourceFile
receives a subpoena or other order of a court or other judicial tribunal
pertaining to the disclosure or release of the Source Materials, SourceFile will
immediately notify Depositor. Except as required to carry out its duties
hereunder, SourceFile shall not permit any SourceFile employee, Beneficiary or
any other person access to the Source Material except as expressly provided
herein, unless consented to in writing by Depositor. SourceFile shall use its
best efforts to avoid unauthorized access to the Source Material by its
employees or any other person.
<PAGE> 27
13. Bankruptcy. Depositor and Beneficiary acknowledge that this
Agreement is an "agreement supplementary to" the License Agreement as provided
in Section 365(n) of Title 11, United State Code (the "Bankruptcy Code").
Depositor acknowledges that if Depositor, as a debtor in possession or a trustee
in Bankruptcy in a case under the Bankruptcy Code, rejects the License Agreement
or this Agreement, Beneficiary may elect to retain its rights under the License
Agreement and this Agreement as provided in Section 365(n) of the Bankruptcy
Code. Upon written request of Beneficiary to Depositor or the Bankruptcy
Trustee, Depositor or such Bankruptcy Trustee shall not interfere with the
rights of Beneficiary as provided in the License Agreement and this Agreement,
including the right to obtain the Source Material from SourceFile as permitted
hereunder.
14. Notices.
(i) Any notice or other communication required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date service is served personally, sent by overnight courier, or five (5)
days after the date of mailing if sent registered mail, postage prepaid, return
receipt required, and addressed as follows or to such other address or facsimile
number as either party may, from time to time, designate in a written notice
given in like manner:
TO DEPOSITOR: Sagent Technology, Inc.
2225 East Bayshore Road, Suite 100
Palo Alto, CA 94303
Phone: (415) 493-7100
Fax: (415) 493-1290
TO SOURCEFILE: SourceFile
1350 West Grand Ave.
Oakland, CA 94607
Attn.: Client Services
Phone: (510) 419-3888
Fax: (510) 419-3875
(ii) Deposit update notices and invoices will be sent to parties
listed in Exhibit "D" and "E".
TO BENEFICIARY: As set forth in Exhibit "C" Schedule of Beneficiaries.
15. Miscellaneous Provisions.
(a) Waiver. Any term of this Agreement may be waived by the party
entitled to the benefits thereof, provided that any such waiver must be in
writing and signed by the party against whom the enforcement of the waiver is
sought. No waiver of any condition, or of the breach of any provision of this
Agreement, in any one or more instances, shall be deemed to be a further or
continuing waiver of such condition or breach. Delay or failure to exercise any
right or remedy shall not be deemed the waiver of that right or remedy.
(b) Modification or Amendment. Any modification or amendment of any
provision of this Agreement must be in writing, signed by the parties hereto and
dated subsequent to the date hereof.
(c) Governing Law Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of California. All
disputes arising out of or related to this Agreement shall be subject to the
exclusive jurisdiction and venue of the State and Federal courts of Santa Clara
County, California.
(d) Headings; Severability. The headings appearing at the beginning
of the sections contained in this Agreement have been inserted for
identification and reference purposes only and shall not be used to determine
the
<PAGE> 28
construction or interpretation of this Agreement. If any provision of this
Agreement is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(e) Further Assurances. The parties agree to perform all acts and
execute all supplementary instruments or documents which may be reasonably
necessary to carry out the provisions of this Agreement.
(f) Entire Agreement. This Agreement, including the attachments
hereto, contains the entire understanding between the parties and supersedes all
previous communications, representations and contracts, oral or written, between
the parties, with respect to the subject matter thereof. It is agreed and
understood that this document and agreement shall be the whole and only
agreement between the parties hereto with regard to these escrow instructions
and the obligations of SourceFile herein in connection with this Agreement, and
shall supersede and cancel any prior instructions. SourceFile is specifically
directed to follow these instructions only and SourceFile shall have no
responsibility to follow the terms of any prior agreements or oral
understandings.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
DEPOSITOR SOURCEFILE
Sagent Technology, Inc. FileSafe, Inc.,
a California corporation a California corporation
By: By:
---------------------------- -------------------------
Name: Ken Gardner Name:
------------------------
Title: Chief Executive Officer Title:
-----------------------
<PAGE> 1
EXHIBIT 10.13
Sagent KK Non-Exclusive Japanese Distribution Agreement
Sagent KK Japan
and
Kawasaki Steel Systems R&D Corporation
December 17, 1997
Palo Alto, California, U.S.A
<PAGE> 2
SAGENT KK NON-EXCLUSIVE JAPANESE DISTRIBUTION AGREEMENT
This Sagent KK Non-Exclusive Japanese Distribution Agreement ("Agreement"),
effective as of this day of ____________________ (the "Effective Date"), is
entered into at Palo Alto, California, U.S.A., by and between Sagent KK Japan,
having offices in Japan ("Sagent KK"), and Kawasaki Steel Systems R&D
Corporation, having offices at 3-3-3, Toyosu, Koto-ku, Tokyo 135, Japan
("Distributor").
BACKGROUND
Sagent KK is in the business of developing and licensing computer software.
Distributor desires to market and distribute such computer software in the
Territory (as defined below), and Sagent KK agrees to authorize Distributor to
so market and distribute such computer software, pursuant to the terms and
conditions set forth below.
AGREEMENT
Now, therefore, in consideration of the foregoing and the mutual covenants and
conditions contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Products" shall mean those products listed in Exhibit-A attached
hereto, as such products may be added to or abandoned by Sagent KK in Sagent
KK's sole discretion from time to time during the term of this Agreement.
1.2 "Software Products" shall mean the computer software in executable
form in the Products.
1.3 "Manuals" shall means the quick reference, manuals, technical
references etc. all of which are fixed to the paper as documents with respect to
the Products.
<PAGE> 3
1.4 Sale and Purchase of Products. All references in this Agreement to
the "sale" or "selling" of Products that are computer software shall mean a
license to use such Products and the sale of the tangible media on which the
Products are distributed. All references in this Agreement to the "purchase" of
Products that are computer software shall mean a license to use such Products
and the purchase of the tangible media on which the Products are distributed.
1.5 "Territory" shall be all of Japan.
1.6 "Acceptance Date" shall have the meaning set forth in Section 13.1.
2. APPOINTMENT
2.1 Appointment of Distributor. Conditioned upon Distributor's continued
satisfaction of the terms and conditions of this Agreement, Sagent KK hereby
appoints Distributor, and Distributor hereby accepts appointment, as Sagent KK's
non-exclusive Distributor for the licensing, sale and distribution of Products
to customers in the Territory only for use in the Territory, provided that the
said customer may export its application programs developed by it using the
Products to its subsidiary or affiliated companies located outside the
Territory. Distributor shall not reproduce the Products, and Distributor shall
not license, sell or distribute the Products except as expressly set forth in
this Agreement. Distributor agrees that it shall not offer for sale, sell,
license or otherwise distribute Products acquired by it from any entity other
than directly from Sagent KK without the prior written approval of Sagent KK.
2.2 Distribution outside the Territory. Distributor shall limit its
sales activities with respect to the Products to customers located in the
Territory, and shall refrain from marketing, licensing or selling the Products
outside of the Territory except to the extent such activities may not be
restricted under applicable law.
2.3 Appointment of Subdistributors. Distributor may appoint
subdistributors to act on the Distributor's behalf only on prior written
approval of Sagent KK;
<PAGE> 4
provided, however, that any compensation to such subdistributors shall be solely
the Distributor's responsibility. Any agreement with such agent or
subdistributor with respect to Products shall be coterminous with this
Agreement.
2.4 Independent Contractor Status. The relationship of Sagent KK and
Distributor established by this Agreement is that of independent contractors,
and neither party is an employee, agent, partner or joint venture of the other.
Distributor shall not be considered an agent or legal representative of Sagent
KK for any purpose, and neither Distributor nor any director, officer, agent, or
employee of Distributor shall be, or be considered, an agent or employee of
Sagent KK. Distributor is not granted and shall not exercise the right or
authority to assume or create any obligation or responsibility on behalf of or
in the name of Sagent KK. All sales and other agreements between Distributor and
its customers and subdistributors are Distributor's sole responsibility and will
have no effect on Sagent KK's obligations under this Agreement.
2.5 Operations and Expenses. The detailed operations of Distributor
under this Agreement are subject to the sole control and management of
Distributor. Distributor shall be responsible for all of its own expenses and
employees. Distributor shall provide, at its own expense, such office space and
facilities, and hire and train such personnel, as may be required to carry out
its obligations under this Agreement. Distributor agrees that it shall incur no
expense chargeable to Sagent KK, except as may be specifically authorized in
advance in writing in each case by Sagent KK.
2.6 No Other Rights. Except as expressly provided in this Agreement, no
right, title or interest is granted by Sagent KK to Distributor. Sagent KK may
distribute the Products in the Territory, either directly or indirectly, for any
and all uses, and no right, title or interest is granted by Sagent KK to
Distributor relating to products other than the Products.
3. OBLIGATIONS OF DISTRIBUTOR
3.1 Diligence. Distributor shall use its commercially reasonable efforts
to promote the marketing and distribution of the Products.
<PAGE> 5
3.2 Costs and Expenses. Except as expressly set forth herein,
Distributor shall be solely responsible for all costs and expenses related to
the advertising, marketing, promotion, and distribution of the Products and for
performing its obligations hereunder.
3.3 Promotional Materials. Distributor shall maintain an adequate
inventory of Sagent KK's current sales materials and samples ("Sales Materials")
and shall use such Sales Materials in an efficient and effective manner to
promote the sale of the Products in the Territory. Distributor shall translate
Sales Materials into all applicable languages of the Territory at Distributor's
sole expense for distribution to customers, and Distributor shall prepare and
distribute such translated Sales Materials in a professional format consistent
with Sagent KK's original materials, subject to final approval by Sagent KK
("Translated Works"). Distributor agrees that all Translated Works created by
Distributor, and all intellectual property rights therein, shall be the sole
property of Sagent KK, and Distributor hereby assigns to Sagent KK all worldwide
right, title, and interest to the Translated Works and all intellectual property
therein.
3.4 Reports.
3.4.1 Annual Financial Reports. Distributor shall provide to
Sagent KK annual audited financial reports, which reports shall (i) be provided
to Sagent KK no later than three (3) months after the close of Distributor's
applicable fiscal year, and (ii) be treated as Confidential Information pursuant
to the terms of Article 10 below.
3.4.2 Sales Activities. Within thirty (30) days after the end
of each calendar quarter, Distributor shall send to Sagent KK a sales activities
report including the names of customers, quantities of Products purchased, Yen
amounts invoiced to and received from such customers, and customer backlog and
inventory status of Products, and further shall maintain records of the same.
<PAGE> 6
3.5 Relations with Customers. Distributor shall process and ship each
customer order in a timely fashion. Distributor shall provide to customers any
and all instructions, precautions, and other warnings provided by Sagent KK to
Distributor; and Sagent KK shall provide to Distributor any such instructions,
precautions, and other warnings as Sagent KK in its sole discretion deems
necessary or desirable.
3.6 Product Representations. Distributor shall not to make any
representations with respect to the Products other than those expressly
authorized in writing in Sagent KK's written data sheets.
3.7 Indemnification. Distributor agrees to indemnify and hold Sagent KK,
its officers, directors, employees, successors, and assigns harmless from and
against any and all losses, damages, or expenses of whatever form or nature,
including reasonable attorneys' fees and other reasonable costs of legal
defense, whether direct or indirect, that they, or any of them, may sustain or
incur as a result of any acts or omissions of Distributor or any of its
directors, officers, employees, or agents, including but not limited to (i)
breach of any of the provisions of this Agreement, (ii) negligence or other
tortious conduct, (iii) representations or statements not specifically
authorized by Sagent KK herein or otherwise in writing, or (iv) violation by
Distributor (or any of its directors, officers, employees, or agents) of any
applicable law, regulation, or order in or of the Territory or the United
States.
4. PRODUCTS
4.1 Product Prices. The prices to be paid by Distributor to Sagent KK
for Products hereunder shall be List Prices for the Products less the
discount(s) set forth in Exhibit-B attached hereto ("Prices"). "List Prices" as
used herein shall mean the prices set forth in Sagent KK's then-current customer
price schedules or bulletins. Prices shall be F.O.B. Sagent KK's facilities in
Tokyo, Japan. All prices are expressed and shall be payable in Japanese Yen. The
difference between List Prices and Prices shall be Distributor's sole
remuneration from Sagent KK for the distribution and sale of Products hereunder.
<PAGE> 7
Sagent KK gives Distributor an option ("Option") to increase
discount rate as set forth in Exhibit-B hereto. Distributor may exercise the
Option by providing written notice to Sagent KK thirty (30) days prior to the
first anniversary of the Acceptance Date. In this case, the quarterly minimum
guaranteed revenue of Sagent KK as set forth in Exhibit C attached hereto shall
increase as set forth therein.
4.2 Price Changes. List Prices are subject to change by Sagent KK at any
time in its sole discretion. List Price changes shall be effective immediately
and applicable to all purchase orders whether or not accepted prior to the
effective date of the List Price change.
4.3 Product Changes. Sagent KK reserves the right from time to time in
its sole discretion, without incurring any liability to Distributor with respect
to any previously placed Purchase Order (as defined in Section 5.1 below), to
discontinue or to limit its production of any Product; to allocate, terminate or
limit deliveries of any Product in time of shortage; to alter the design or
construction of any Product; to add new and additional products to the Products;
and upon prior consent of Distributor, to materially change its sales and
distribution policies which may affect the conditions contained in this
Agreement, not inconsistent with the terms of this Agreement.
4.4 Discontinued Product. In the event Sagent KK discontinues sale of
any Product, it shall give Distributor prompt notice thereof. Within sixty (60)
days following the date of such discontinuation notice, Distributor may elect to
return for credit against future purchases hereunder any of the discontinued
Products (including samples) purchased by Distributor during the three (3)
months prior to the date of such notice which have not been used or sold and
which are in Distributor's inventory as of the date of that notice from Sagent
KK.
5. PURCHASE ORDERS
5.1 Purchase Orders. All orders for Products submitted by Distributor
shall be initiated by written purchase order in form acceptable to Sagent KK
(each a
<PAGE> 8
"Purchase Order"); provided, however, that an order may initially be placed
orally, by fax or by e-mail if a confirmational Purchase Order is received by
Sagent KK within five (5) days of said oral, fax, or e-mail order. All Purchase
Orders for Products are subject to acceptance by Sagent KK in writing, and
Sagent KK shall have no liability to Distributor with respect to Purchase Orders
that are not accepted. No partial acceptance of a Purchase Order shall
constitute the acceptance of the entire Purchase Order, absent the written
acceptance of such entire Purchase Order.
5.2 Agreement Governs. Purchase Orders shall be governed by the terms of
this Agreement. Nothing contained in any Purchase Order shall in any way modify
or delete the terms and conditions contained herein or add any additional or
different terms or conditions to the terms and conditions of this Agreement.
5.3 Order Changes. Purchase Orders may be canceled only with Sagent KK's
prior written approval. Cancellation of a Purchase Order is subject to a
restocking charge equal to ten percent (10%) of the aggregate value of such
Purchase Order.
5.4 Marketing.
5.4.1 Use of Proprietary Right. Distributor may represent
itself as "the authorized distributor of Sagent Technology, Inc. ("Sagent US")
and is authorized by Sagent KK to use, and shall use, the trademarks, trade
names, and logos that Sagent KK uses for the Products in connection with
Distributor's advertisement, promotion, and distribution of the Products,
provided that Sagent KK shall have reviewed and approved of all materials used
in connection therewith. Distributor's use of such trademarks, trade names, and
logos will be in accordance with Sagent KK policies in effect from time to time
regarding trademark, trade name, and logo usage. Distributor agrees not to affix
any Sagent KK trademark, trade name, or logo to any non-Sagent KK product.
5.4.2 Grant of Proprietary Right. Distributor will include on
each Product that it distributes, and on all containers and storage media
thereof, all
<PAGE> 9
trademark, trade name, copyright, and other notices of proprietary rights
included by Sagent KK on such Product. Distributor agrees not to alter, erase,
deface, or overprint any such notice on anything provided by Sagent KK.
Distributor has paid no consideration for the use of Sagent KK's trademarks,
trade names, Logos, or copyrights, and nothing contained in this Agreement shall
give Distributor any interest in any of them. Distributor acknowledges that
Sagent KK owes and retains all copyrights and other proprietary rights in the
Products and agrees that it will not at any time during or after the term of
this Agreement assert or claim any interest in or do anything that may adversely
affect the validity or enforceability of any trademark, trade name, copyright,
or logo belonging to or licensed to Sagent KK (including, without limitation,
any act, or assistance to any act, which may infringe on lead to the
infringement of any copyright in the Products).
5.4.3 Protection of Proprietary Right. Distributor agrees to
use reasonable efforts to protect Sagent KK's and Sagent US' proprietary rights
and to cooperate without charge in Sagent KK's and Sagent US's efforts to
protect its proprietary rights. Distributor agrees to promptly notify Sagent KK
and Sagent US of any known or suspected breach of Sagent KK's or Sagent US's
proprietary rights that comes to Distributor's attention. If the party
committing, or suspected to be committing, such a breach is a customer of
Distributor, Distributor shall take legal action, at its own expense, against
such party so as to immediately terminate any such breach.
6. PAYMENT; TAXES
6.1 Payment Terms. Payment of any and all amounts due under this
Agreement shall be in Japanese Yen. Distributor shall either (i) pay for
Products at the end of the immediately following month during which Distributor
receives such Products by wire transfer to Sagent KK's designated bank account.
All exchange, interest, banking, collection and other charges shall be at
Distributor's expense.
6.2 Offsets. Any credits, allowances, or other amounts payable to or
creditable by Distributor shall be subject to offset for any claims or other
amounts owed by Distributor to Sagent KK pursuant to the provisions of this
Agreement.
<PAGE> 10
6.3 Taxes. Prices do not include and are net of any domestic
governmental taxes or charges of any kind that may be applicable to the sale,
licensing, marketing or distribution of the Products, including without
limitation excise, sales, use, consumption or value-added taxes. Distributor
shall be responsible for and shall pay all such taxes and charges levied against
Sagent KK in a timely manner. When Sagent KK has the legal obligation to pay or
collect such taxes, excluding consumption tax and taxes on the income of Sagent
KK, the appropriate amount shall be invoiced to Distributor and paid by
Distributor within thirty (30) days of the date of invoice unless Distributor
provides Sagent KK with a valid tax exemption certificate authorized by the
appropriate taxing authority.
7. DELIVERY; REJECTION
7.1 Shipment and Delivery. Sagent KK shall furnish Distributor with at
least a single master copy of the current versions of the Products as well as
United States version of the same, and shall hereafter furnish to Distributor a
single master copy (collectively "Master Copies"') of any and all improvements,
modifications, and enhancements to the Products that Sagent KK does not furnish
to its licensees as a separately priced product. Ownership of, and title to,
such master copies and all such improvements, modifications, and enhancements
thereto, and any reproductions thereof, shall at all times remain with Sagent
KK. Such improvements, modifications, and enhancements shall be distributed by
Distributor pursuant to the terms and conditions of this Agreement. All other
improvements, modifications, and enhancements to the Products, all new versions
and releases of the Products, and all new Products that are in the same product
line as the Products shall be distributed by Distributor if and only if Sagent
KK requires that Distributor distribute such software. Such distribution shall
be on the terms and conditions of this Agreement.
Sagent KK shall deliver a Master Copy of Software Products in a
suitable pack for shipment in Sagent KK's standard shipping cartons to
Distributor in time for official release date of each version of the Products.
<PAGE> 11
Manuals delivered pursuant to the terms of this Agreement shall be suitably
packed for shipment in Sagent KK's standard shipping cartons, marked for
shipment to the destination specified in Distributor's Purchase Order, and
delivered to the carrier agent F.O.B. Sagent KK's facility in Tokyo, Japan, at
which time risk of loss shall pass to Distributor. Unless otherwise specified in
writing by Distributor in Distributor's purchase order, Sagent KK shall select
the carrier. All freight, insurance, and other shipping expenses, as well as
expenses for any special packing requested by Distributor and provided by Sagent
KK, shall be paid by Distributor. All shipment and freight charges shall be
deemed correct unless Sagent KK receives from Distributor, no later than fifteen
(15) days after the date of shipment, a written notice specifying the shipment,
the purchase order number, and the exact nature of the discrepancy between the
order and the shipment in number or type of Products shipped, or freight or
other charges, as the case may be. Sagent KK may cease any and all shipments of
Products until Distributor is in full performance of its obligations under
Article 6 above.
7.2 Title. Sagent KK shall retain all right, title and interest in and
to Products delivered to Distributor until Sagent KK has received all applicable
payments therefor.
7.3 Inspection; Rejection. Distributor shall inspect all Products
promptly upon receipt thereof and may reject any defective Product, provided
that Distributor shall (i) within the earlier of thirty (30) days after receipt
of such alleged defective Product or ten (10) days after discovery of such
alleged defect, notify Sagent KK of its rejection and request a Return Material
Authorization ("RMA") number, and (ii) within ten (10) days of receipt of the
RMA number from Sagent KK return such rejected Product to Sagent KK, freight
prepaid and properly insured (such freight and insurance premium being Sagent
KK's account). Products not rejected within the foregoing time periods shall be
deemed accepted by Distributor. In the event that Sagent KK determines that the
returned Product is defective and properly rejected by Distributor, Sagent KK
shall at its option, repair or replace such defective Product, or accept return
for credit of such defective Product. Sagent KK shall return to
<PAGE> 12
Distributor, freight prepaid, all repaired or replaced Products properly
rejected by Distributor. In the event that any rejected Product is determined by
Sagent KK to not be defective or to have been modified or subjected to unusual
electrical or physical stress, misuse, abuse or unauthorized repair attributable
to Distributor, Distributor shall reimburse Sagent KK for all costs and expenses
related to the inspection, repair, if any, and return of such Product to
Distributor.
7.4 Returned Product. Distributor shall only return Products to Sagent
KK with Sagent KK's prior written approval. Any Product returned to Sagent KK by
Distributor as authorized under this Agreement shall be shipped, freight
prepaid, F.O.B. Sagent KK's address first set forth above or such other location
as Sagent KK may instruct Distributor, and shall be packed in its original
packing material. Sagent KK may refuse to accept any Product not packed and
shipped as herein provided.
8. TECHNICAL SUPPORT
8.1 Support by Distributor. Distributor shall be solely responsible for
supporting all Products distributed hereunder. Distributor shall provide
reasonable technical support to customers, including without limitation (i)
maintaining trained and competent technical and engineering support personnel
for the Products who are sufficiently knowledgeable with respect to the Products
to answer customer questions regarding the use and operation of Products, (ii)
designating a technical liaison to coordinate Distributor's technical support
provided to Customers, (iii) responding promptly to requests for technical
support from customers, and (iv) providing technical support services to address
and resolve customers' support requests with respect to the Products.
Distributor shall ensure that Distributor's technical and engineering support
personnel attend any training required by Sagent KK with respect to the
Products. Sagent KK shall make available to Distributor such training and
technical classes as necessary to comply with this Section 8.1(i).
8.1.1 Frontline Support. Distributor shall ensure that all
customer questions regarding use or operation of Products are initially
addressed to and answered by Distributor. Unless otherwise agreed in writing by
Sagent KK,
<PAGE> 13
Distributor shall not represent to any third party that Sagent KK is
available to answer questions from any customer directly.
8.1.2 Conformance with Sagent KK Policy. Distributor will
provide prompt and effective service and repair of Products in the Territory in
accordance with Sagent KK's standard support policies then in effect.
8.1.3 Additional Responsibilities. Without limiting the
foregoing and in addition to any other obligations set forth in Sagent KK's then
current support terms and conditions, Distributor also shall be responsible for
(i) providing sufficient information to Sagent KK for Sagent KK to duplicate any
reported error in the Products; (ii) incorporating updates into the Products
promptly upon receipt thereof; (iii) reporting errors promptly in Japanese and
in writing in accordance with Sagent KK's standard support procedures; and (iv)
providing reasonable cooperation and full information to Sagent KK in the
furnishing of support for the Products.
8.2 Support by Sagent KK. Sagent KK shall use reasonable efforts to
provide to Distributor such back-up telephone or electronic-mail technical
support as Sagent KK makes generally available to its distributors other than
Distributor. Such telephone support shall be provided during Sagent KK's normal
business hours (Monday through Friday, 9:00 a.m. - 5:00 p.m.) Japanese Standard
Time, excluding Sagent KK holidays). With respect to Computer Software Products,
Sagent KK will provide support for the then-current versions of such computer
software Products, and the latest two versions thereof from then current
version. In the case of the Products, Sagent KK shall be responsible for testing
of so version upped Product.
To achieve the objectives of the foregoing, Sagent KK shall
maintain trained and competent technical and engineering support personnel for
the Products who are sufficiently knowledgeable with respect to the Products to
answer customer questions regarding the use and operation of the Products, as
well as trained and competent training personnel for the Products who are
sufficiently knowledgeable with respect to the Products to answer customer
questions regarding the use and operation of the Products.
<PAGE> 14
Sagent KK shall furnish Distributor with the following information in a
timely manner:
a. known bug information and known bug fixes, if any;
b. information on road map of future product line;
c. technical information on improvement, modification or enhancement;
and
d. other technical information as is reasonably necessary.
In addition to the above, it is specifically understand and agreed to
that Sagent US shall furnish hot-fix as a priority matter.
9. DISCLAIMER OF WARRANTY
SAGENT KK MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED OR
OTHERWISE, AND SAGENT KK SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND
CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NONINFRINGEMENT, AND ALL OTHER IMPLIED WARRANTIES OR CONDITIONS ARISING FROM
COURSE OF DEALING, USAGE OF TRADE OR CUSTOM. NOTWITHSTANDING THE FOREGOING,
SAGENT KK DOES NOT EXCLUDE LIABILITY TO THE EXTENT THAT SUCH LIABILITY MAY NOT
BE EXCLUDED OR LIMITED BY LAW.
10. CONFIDENTIALITY AND PROPRIETARY RIGHTS
10.1 Confidentiality. Distributor acknowledges that by reason of its
relationship to Sagent KK hereunder it will have access to certain information
and materials concerning Sagent KK's business, plans, customers, technology, and
products that are confidential and of substantial value to Sagent KK, which
value would be impaired if such information were disclosed to third parties
("Confidential Information"). Distributor agrees that it will not use in any way
for its own account or
<PAGE> 15
the account of any third party, nor disclose to any third party, any
Confidential Information revealed to it by Sagent KK. Distributor shall take
every reasonable precaution to protect the confidentiality of Confidential
Information. Upon request by Distributor, Sagent KK shall advise whether or not
it considers any particular information or materials to be confidential.
Distributor shall not publish any technical description of the Products beyond
the description published by Sagent KK. In the event of termination of this
Agreement, there shall be no use or disclosure by Distributor of any
Confidential Information of Sagent KK, and Distributor shall not reproduce,
manufacture, have reproduced or have manufactured any computer software
programs, devices, components or assemblies utilizing any of Sagent KK's
confidential information. The foregoing confidentiality obligation shall cease
after two years of at any termination of this Agreement for whatever reason
therefor.
10.2 Proprietary Rights. Distributor agrees that Sagent KK retains all
of its right, title and interest in and to all patents, trademarks, trade names,
inventions, copyrights, know-how and trade secrets relating to the Products or
the product lines that include the Products, and the design, manufacture,
operation or service of the Products. The use by Distributor of any of these
property rights is authorized only for the purposes herein set forth and upon
termination of this Agreement for any reason such authorization will cease.
Distributor shall not (and shall require that its customers do not) remove,
alter, cover or obfuscate any copyright notices or other proprietary rights
notices placed or embedded by Sagent KK on or in any Product.
11. INTELLECTUAL PROPERTY INDEMNIFICATION
11.1 Limited Indemnity. Distributor agrees that Sagent KK has the right
to defend, or at its option to settle, and Sagent KK agrees, at its own expense,
to defend or at its option to settle, any third party claim, suit or proceeding
(collectively, "Action") brought against Distributor alleging the Products
infringe any U.S.A. or Japanese patent, copyright or trademark in existence as
of the Effective Date or comes into existence during the term of this Agreement,
subject to the limitations hereinafter set forth. Sagent KK shall have sole
control of any such Action or settlement negotiations, and Sagent KK agrees to
pay, subject to the limitation hereinafter set
<PAGE> 16
forth, any final judgment entered against Distributor on such issue in any such
Action defended by Sagent KK. Distributor agrees that Sagent KK will be relieved
of the foregoing obligations unless Distributor notifies Sagent KK in writing of
such Action within five (5) days after becoming aware of such action, gives
Sagent KK authority to proceed as contemplated herein, and gives Sagent KK
proper and full information and assistance to settle and/or defend any such
Action. If it is adjudicatively determined, or if Sagent KK believes, that the
Products, or any part thereof, infringe any patent, copyright or trademark, or
if the sale or use of the Products, or any part thereof, is, as a result,
enjoined, then Sagent KK may, at its election, option, and expense: (i) procure
for Distributor the right under such copyright or trademark to sell or use, as
appropriate, the Products or such part thereof; (ii) replace the Products, or
part thereof, with other non-infringing suitable products or parts; (iii)
suitably modify the Products or part thereof; or (iv) remove the Products, or
part thereof, terminate distribution or sale thereof and refund the payments
paid by Distributor for such Products less a reasonable amount for use and
damage. Sagent KK shall not be liable for any costs or expenses incurred without
its prior written authorization, or for any installation costs of any replaced
Products.
11.2 Limitations. Notwithstanding the provisions of Section 11.1 above,
Sagent KK assumes no liability for infringement claims arising from (i)
combination of the Products or portions thereof with other software not provided
by Sagent KK if such infringement would not have occurred but for such
combination, or (ii) the modification of the Products or portions thereof unless
such modification was made or authorized by Sagent KK, when such infringement
would not have occurred but for such modification.
11.3 Disclaimer. SAGENT KK'S LIABILITY ARISING OUT OF OR RELATING TO
THIS ARTICLE 11 SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY DISTRIBUTOR TO
SAGENT KK FOR THE ALLEGEDLY INFRINGING PRODUCTS THAT ARE THE SUBJECT OF THE
INFRINGEMENT CLAIM. THE FOREGOING PROVISIONS OF THIS ARTICLE 11 STATE THE ENTIRE
LIABILITY AND OBLIGATION OF SAGENT KK AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR
WITH RESPECT TO ANY ALLEGED
<PAGE> 17
INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS OR ANY PART
THEREOF.
12. LIMITATION OF LIABILITY
IN NO EVENT SHALL SAGENT KK'S LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT EXCEED THE AGGREGATE AMOUNTS PAID BY DISTRIBUTOR TO SAGENT KK
HEREUNDER, INCLUDING BUT NOT LIMITED TO LIABILITY UNDER ARTICLE 11 ABOVE. IN NO
EVENT SHALL EITHER PARTY BE LIABLE FOR LOST PROFITS, COST OF PROCUREMENT OF
SUBSTITUTE GOODS, OR ANY OTHER SPECIAL, RELIANCE, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCTS LIABILITY, OR OTHERWISE. THE
FOREGOING LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY STATED HEREIN.
13. TERM AND TERMINATION
13.1 Term. Unless earlier terminated pursuant to Section 13.2 below or
by mutual written consent, this Agreement shall commence upon the Effective Date
and continue in full force and effect for an initial term expiring on the date
(the "Expiration Date") which is two years after the date ("Acceptance Date")
when Distributor notifies Sagent KK in writing of its acceptance of the
Japanese. This Agreement automatically shall be extended for additional one (1)
year terms unless either party notifies the other in writing of its intent to
terminate this Agreement at least three (3) months prior to Expiration Date or
its anniversary, provided, however, the quarterly guaranteed minimum revenue
stipulated in Exhibit C is agreed upon by Sagent KK and Distributor on or prior
to Expiration Date or its anniversary. The forgoing shall apply in mutatis
mutandis for so extended term.
<PAGE> 18
13.2 Termination. This Agreement may be terminated prior to the
expiration of the initial term by prior written notice to the other party as
follows:
13.2.1 By either party upon written notice of termination if
the other party breaches any material term or condition of this Agreement and
fails to cure that breach within thirty (30) days after receiving written notice
stating the nature of the breach and the non-breaching party's intent to
terminate; or
13.2.2 By either party, effective immediately, if the other
party should become the subject of any voluntary or involuntary bankruptcy,
receivership, or other insolvency proceedings or make an assignment or other
arrangement for the benefit of its creditors, or if such other party should be
nationalized or have any of its material assets expropriated; or
13.2.3 By Sagent KK, effective immediately, if there should
occur any material change in the management, ownership, control, sales
personnel, sales and marketing capability, or financial condition of
Distributor; or
13.2.4 By Sagent KK, effective immediately, if any law or
regulation should become adopted or in effect in the Territory that would
restrict Sagent KK's termination rights or otherwise invalidate any provisions
hereof; or
13.2.5 By Sagent KK, effective immediately, if Distributor
should violate the terms of Section 15.4; or
13.2.6 By Sagent KK, effective immediately, in accordance
with provisions of Sections 14.3; or
13.2.7 By Sagent KK, effective immediately, if Distributor
knowingly makes any false or untrue statements or representations to Sagent KK
herein or in the performance of its obligations hereunder.
<PAGE> 19
13.3 Purchase Orders; No Waiver. Notwithstanding the foregoing,
Distributor shall be obligated to accept deliveries of Products for which
Purchase Orders were accepted by Sagent KK prior to the effective date of
termination. After any notice of termination has been delivered by either party
hereunder, deliveries of Product from Sagent KK to Distributor, unless otherwise
agreed by Sagent KK in its sole discretion, shall require prepayment by wire
transfer by Distributor to Sagent KK. The acceptance of any Purchase Order for
the sale of any Product to Distributor after the termination or expiration of
this Agreement shall not be construed as a renewal or extension of this
Agreement nor as a waiver of termination of this Agreement.
13.4 Rights of Parties Upon Termination or Expiration. The following
provisions shall apply on the termination or expiration of this Agreement.
13.4.1 Cessation of Sales Activities. Distributor shall cease
all sales and other activities on behalf of Sagent KK and shall return to Sagent
KK and immediately cease all use of Confidential Information previously
furnished by Sagent KK and then in Distributor's possession. Distributor shall
additionally turn over to Sagent KK Distributor's current customer mailing list
and take such action as is necessary to terminate Distributor's registration as
Sagent KK's sales representative with any governmental authority.
13.4.2 Acceleration of Amounts Owed. All indebtedness of
Distributor to Sagent KK shall become immediately due and payable without
further notice or demand, which is hereby expressly waived, and Sagent KK shall
be entitled to reimbursement for any reasonable attorneys' fees that it may
incur in collecting or enforcing payment of such obligations;
13.4.3 No Obligation to Repurchase. Sagent KK shall have no
obligation to repurchase or to credit Distributor for its inventory of Products
at the time of termination of this Agreement. Sagent KK may, at its sole option,
repurchase from Distributor, at Sagent KK's then current list prices less any
applicable then current discounts or at the net prices paid by Distributor,
whichever are lower, any or
<PAGE> 20
all inventory of Products originally purchased by Distributor from Sagent KK and
remaining unsold by Distributor.
13.5 No Liability for Termination. Except as expressly required by law,
in the event of termination of this Agreement by either party in accordance with
any of the provisions of this Agreement, neither party shall be liable to the
other, because of such termination, for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of Sagent KK or Distributor. Termination shall
not, however, relieve either party of obligations incurred prior to the
termination.
13.6 Survival. Except for termination by Sagent KK pursuant to Section
13.2.1 above, Distributor may sell Products existing in its inventory as of the
effective date of termination of this Agreement for a period of ninety (90) days
after the effective date of such termination ("Wind-Down Period"). During the
Wind-Down Period, the provisions of Article 14 and Sections 2.2, and 3.7 shall
survive. In addition to the foregoing provisions, the following provisions shall
survive any termination or expiration of this Agreement: Articles 1, 9, 10 and
11 and 14, and Sections 2.4, 2.6, 5.2, 7.2, 13.4, 13.6, 15.1, 15.3 and 15.5.
14. COMPLIANCE WITH LAWS
14.1 Export Control. Any and all obligations of Sagent KK to provide the
Products, as well as any technical data, shall be subject in all respects to
such United States laws and regulations as will from time to time govern the
license and delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor legislation, and the Export Administration
Regulations issued by the U.S. Department of Commerce, Bureau of Export
Administration. Distributor represents and warrants that it will not export or
re-export the Products or technical data related thereto except in conformity
with such laws and regulations.
<PAGE> 21
14.1.1 Required Authorization. Distributor agrees that, unless
prior written authorization is obtained from the Bureau of Export
Administration, or the Export Administration Regulations explicitly permit the
export, re-export, and/or transshipment of the Products or technical data
disclosed or provided to Distributor, as applicable, without such written
authorization, Distributor shall not export, re-export, or transship, directly
or indirectly, the Products or technical data, to country groups S or Z (as
defined in the Export Administration Regulations), which currently consist Cuba
and North Korea, or to Iran, Iraq or Yugoslavia (Serbia and Montenegro), or to
any other country as to which the U.S. Government has placed an embargo against
the shipment of products, which embargo is in effect during the term of this
Agreement.
14.1.2 Prohibited Customers. Distributor further agrees not to
resell Products to any organization, public or private, which engages in the
research or production of military devices, armaments, or any instruments of
warfare, including biological, chemical and nuclear warfare.
14.2 Liability of Sagent KK. The provisions of this Agreement under
which the liability of Sagent KK is excluded or limited shall not apply to the
extent that such exclusions or limitations are declared illegal or void under
the laws applicable in the countries in which Products are sold hereunder.
14.3 Questionable Payments. Distributor certifies that neither it, nor
any of its directors, officers, employees, or agents is an official, agent, or
employee of any government or governmental agency or political party or a
candidate for any political office on the date of this Agreement. Distributor
shall promptly notify Sagent KK of the any event that would or may result in an
exception to the foregoing representation. Distributor shall not, directly or
indirectly, in the name of, on behalf of, or for the benefit of Sagent KK offer,
promise to pay, or pay any compensation, or give anything of value to, any
official, agent, or employee of any government or governmental agency, or to any
political party or officer, employee, or agent thereof. Distributor shall
require each of its directors, officers, employees, and agents to comply with
the provisions of this Section 14.3. Any breach of the provisions of this
<PAGE> 22
Section 14.3 shall entitle Sagent KK to terminate this Agreement effective
immediately upon written notice to Distributor pursuant to Section 13.2 above.
14.4 Import Licenses; Exchange Controls; Other Governmental Approvals.
Distributor represents and warrants that it shall, at its expense, obtain any
and all import licenses and governmental approvals that may be necessary to
permit the sale by Sagent KK and the purchase by Distributor of the Products,
comply with all registration requirements in the Territory, obtain such
approvals from the banking and other governmental authorities of the Territory
as may be necessary to guarantee payment of all amounts due hereunder to Sagent
KK in U.S. dollars, and comply with any and all governmental laws, regulations,
and orders that may be applicable to Distributor by reason of its execution of
this Agreement, including but not limited to any requirement to be registered as
Sagent KK's independent distributor with any governmental authority, and
including but not limited to any and all laws, regulations, or orders that
govern or affect the ordering, export, shipment, import, sale (including
government procurement), delivery, or redelivery of the Products in the
Territory. Distributor shall furnish Sagent KK with such documentation as Sagent
KK may request to confirm Distributor's compliance with this Section 14.4 and
agrees that it shall not engage in any course of conduct that, in Sagent KK's
reasonable belief, would cause Sagent KK to be in violation of the laws of any
jurisdiction.
14.5 Review by Fair Trade Commission. Distributor agrees to file this
Agreement, if required, with the Japan Fair Trade Commission (the "JFTC").
Distributor shall provide Sagent KK with English language translations of all
notifications filed in connection with this Agreement promptly after such
filing. If the JFTC advises or recommends the amendment or deletion of any terms
and conditions of, or any addition to, this Agreement pursuant to the Law
Relating to Prohibition of Private Monopoly and Methods of Preserving Fair Trade
of Japan and the guidelines promulgated thereunder, Distributor shall
immediately inform Sagent KK of such advice or recommendation and the parties
shall negotiate in good faith to modify this Agreement in accordance with such
advice or recommendation. If the parties do not
<PAGE> 23
reach agreement within thirty (30) days, either party may terminate this
Agreement without incurring any further liability or obligation.
14.6 Local Law. Distributor will notify Sagent KK of the existence and
content of any mandatory provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at the time
of its execution or thereafter.
15. MISCELLANEOUS PROVISIONS
15.1 Governing Law. This Agreement shall be governed by and construed
under the law of Japan.
15.2 Jurisdiction; Venue. Except as set forth in Section 15.3 below,
with respect to any disputes arising out of or related to this Agreement, the
parties consent to the exclusive personal jurisdiction of, and venue in, the
District Court of Tokyo, Japan.
15.3 Arbitration. Any dispute in which less than S200,000 is a issue and
no proprietary rights of Sagent KK are at issue shall be submitted to binding
arbitration in English, in Tokyo if initiated by Distributor or in Japanese in
Tokyo if initiated by Sagent KK, under Commercial Arbitration Rules of the
International Chamber of Commerce as then in effect. Three (3) arbitrators will
hear the dispute. Each party, within thirty (30) days after receipt of a written
demand for arbitration, will choose an impartial, independent arbitrator having
knowledge of and experience in dealing with the international computer industry,
and the arbitrators so chosen will choose the third and presiding arbitrator,
who will be an attorney at law. The award rendered by the arbitrators will be
final and binding and maybe enforced by any court of competent jurisdiction,
whether or not either party fails or refuses to participate in the arbitration.
<PAGE> 24
15.4 Assignment. Distributor may not transfer or assign any of its
rights or obligations under this Agreement without the prior written consent of
Sagent KK. Sagent KK may freely transfer or assign its rights or obligations
under this Agreement without the prior written consent of Distributor, provided,
however, Sagent KK shall guarantee the transferee's or assignee's strict
compliance of any and all terms and conditions hereunder if such transferee or
assignee is an Affiliate, as hereinafter defined, of Sagent KK after such
transfer or assignment, and Sagent KK shall use its best efforts to inform any
transferee or assignee of their obligations after such transfer or assignment if
such transferee or assignee is not an Affiliate after such assignment. Subject
to the foregoing, this Agreement will be binding upon and inure to the benefit
of the parties hereto, their successors and assigns. As used herein, an
"Affiliate" of a company shall mean any business entity which Controls, is
Controlled by, or is under common Control with Sagent KK. As used herein,
"Control" shall mean the ownership of fifty percent (50%) or more of the voting
shares of the subject entity entitled to vote in the election of directors (or,
in the case of an entity that is not a corporation, for the election of the
corresponding managing authority).
15.5 No Implied Waivers. The failure of either party at any time to
require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall the
waiver of either party of a breach of any provision hereof be taken or held to
be a waiver of a provision itself.
15.6 Severability. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions will
nevertheless remain in full force and effect. The parties agree to renegotiate
in good faith those provisions so held to be invalid to be valid, enforceable
provisions which provisions shall reflect as closely as possible the original
intent of the parties, and further agree to be bound by the mutually agreed
substitute provision.
15.7 Force Majeure. Except for payment of moneys, neither party shall be
liable for failure to fulfill its obligations under this Agreement or any
purchase
<PAGE> 25
order issued hereunder or for delays in delivery due to causes beyond its
reasonable control, including, but not limited to, acts of God, man-made or
natural disasters, earthquakes, fire, riots, flood, material shortages, strikes,
delays in transportation or inability to obtain labor or materials through its
regular sources. The time for performance of any such obligation shall be
extended for the time period lost by reason of the delay.
15.8 Conflicting Terms. The parties agree that the terms and conditions
of this Agreement shall prevail, notwithstanding contrary or additional terms,
in any purchase order, sales acknowledgment, confirmation or any other document
issued by either party effecting the purchase and/or sale of Products.
15.9 Headings. Headings of paragraphs herein are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
15.10 Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (a) by hand, (b) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the other party
first set forth above, or to such other address as a party may designate by
written notice in accordance with this Section 15.10, (c) by overnight courier,
or (d) by fax with confirming letter mailed under the conditions described in
(b) above. Notice so given shall be deemed effective when received, or if not
received by reason of fault of addressee, when delivered.
15.11 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions of this
Agreement in any other language shall not be binding on the parties hereto. All
communications and notices to be made or given pursuant to this Agreement shall
be in the English language.
15.12 Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes all
prior agreements relating thereto, written or oral, between the parties.
Amendments to this
<PAGE> 26
Agreement must be in writing, signed by the duly authorized
officers of the parties. The terms of any purchase order are expressly excluded.
15.13 Injunctive Relief. Distributor agrees that any violation or
threatened violation of Sections 10.1, 10.2 or 13.4.3 will cause irreparable
injury to Sagent KK, entitling Sagent KK to obtain injunctive relief in addition
to all legal remedies.
15.14 Guarantee by Sagent Technology, Inc. Sagent US, a California
corporation, having office at 2225, E. Bayshore Rd., Suite 100, Palo Alto, CA
94303, U.S.A., a parent company which wholly owns Sagent KK, hereby expressly
agrees that it is jointly and severally responsible for any and all Sagent KK's
conduct and performance hereunder, compliance hereof, and any other action or
non-action required to be taken hereunder.
In Witness Whereof, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
Sagent KK: Distributor:
Sagent Technology, Inc. Kawasaki Steel Systems R&D Corporation
By: /s/ KEN GARDNER By: /s/ MASASHI TOMISHIMA
----------------------- -----------------------------------
Name: Ken Gardner Name: Masashi Tomishima
Title: Chairman and CEO Title: President & Director
<PAGE> 27
EXHIBIT A
PRODUCT LISTING
Sagent KK Technology, Inc. Entire Product Line
US based Price list attached
Sagent Data Mart Suite Version 3.0 (US Version) (December 1997)
Sagent Data Mart Suite Version 3.0J (Japanese Version) (February 1998)
<PAGE> 28
EXHIBIT B
DISCOUNTS TO LIST PRICES
[*]% Discount off US List Price for all products sold:
In the case of exercise Option:
[*]% Discount off US List Price for all products sold:
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 29
EXHIBIT C
PAYMENT TERMS
TERMS OF AGREEMENT
Distributor agrees to pay the following cost to Sagent KK for the right to
distribute Sagent's products. All Payments to Sagent KK will be based on the
guaranteed minimum US Dollar values as stated in paragraph 1 & 2 below. The
actual payment amount will then be converted into Yen using the following
formula. Using the "closing" TTC exchange rate on the last payment day
proceeding the actual payment month, all US dollar values will be converted into
Yen:
# Important: This payment schedule is based on the assumption that the Japanese
Version 3.0J is released on Feb 15, 1998 with full functionality as described in
the Manuals and that KSD accepts it in two (2) weeks from its receipt.
1) First Year annual maintenance fee & Sagent KK Training Fee: $[*] USD
Second Year Annual Maintenance Fee: $[*] USD
2) (8) Quarterly minimum Guaranteed revenue:
<TABLE>
<S> <C> <C>
March 30, 1998 $[*] USD
June 30, 1998 $[*] USD
September 30, 1999 $[*] USD
December 31, 1998 $[*] USD
March 30, 1999 $[*] USD
June 31, 1999 $[*] USD
September 30, 1999 $[*] USD
December 31, 1999 $[*] USD
in case of exercise of Option:
March 31, 1999 $[*] USD
</TABLE>
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 30
<TABLE>
<S> <C> <C>
June 30, 1999 $[*] USD
September 30, 1999 $[*] USD
December 31, 1999 $[*] USD
</TABLE>
* Certain information on this page has been
omitted and filed separately with the Commission.
Confidential treatment has been requested with
respect to the omitted portions.
<PAGE> 1
EXHIBIT 10.14
EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement ("Agreement"), effective as of
the 1st day of January, 1998 (the "Effective Date"), is entered into by and
between Sagent Technology, Inc., having offices at 2225 E. Bayshore Rd., Suite
100, Palo Alto, California 94303, U.S.A. ("Sagent"), and Sagent U.K. Ltd.,
having offices at Premier House, Forest Court, Oaklands Park, Workingham
RG41 2FD, England ("Distributor").
BACKGROUND
Sagent is in the business of developing and licensing computer
software. Distributor desires to market and distribute such computer software in
England, and Sagent agrees to authorize Distributor to so market and distribute
such computer software, pursuant to the terms and conditions set forth below.
AGREEMENT
Now, therefore, in consideration of the foregoing and the mutual
covenants and conditions contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Products" shall mean those products listed in Exhibit A attached
hereto, as such products may be added to or abandoned by Sagent in Sagent's sole
discretion from time to time during the term of this Agreement.
1.2 "Sagent Marks" shall mean those trademarks, tradenames and
servicemarks listed in Exhibit B attached hereto, as such trademarks, tradenames
and servicemarks may be added to or removed by Sagent in Sagent's sole
discretion from time to time during the term of this Agreement.
1.3 Sale and Purchase of Products. All references in this Agreement to
the "sale" or "selling" of Products shall mean a license to use such Products
and sale of the tangible media on which the Products are distributed. All
references in this Agreement to the "purchase" of Products shall mean a license
to use such Products and the purchase of the tangible media on which the
Products are distributed.
1.4 "Territory" shall mean the member countries of the European Union.
1.5 "Year 1" shall mean the period commencing on the Effective Date and
ending on December 31, 1998.
1.6 "Year 2" shall mean the period commencing on January 1, 1999 and
ending on December 31, 1999.
<PAGE> 2
1.7 "Year 3" shall mean the period commencing on January 1, 2000 and
ending on December 31, 2000.
2. APPOINTMENT
2.1 Appointment of Distributor. Conditioned upon Distributor's
continued satisfaction of the terms and conditions of this Agreement, Sagent
hereby appoints Distributor, and Distributor hereby accepts appointment, as
Sagent's exclusive Distributor for the licensing and distribution of Products to
customers in the Territory only for use in the Territory only. Distributor shall
not reproduce or sell the Products, and Distributor shall not license or
distribute the Products except as expressly set forth in this Agreement.
Distributor agrees that it shall not offer for sale, sell, license or otherwise
distribute Products acquired by it from any entity other than directly from
Sagent without the prior written approval of Sagent.
2.2 Distribution outside the Territory. Distributor shall limit its
sales activities with respect to the Products to customers located in the
Territory, and shall refrain from marketing, licensing or selling the Products
outside of the Territory except to the extent such activities may not be
restricted under applicable law.
2.3 Appointment of Subdistributors. Distributor may appoint
subdistributors to act on the Distributor's behalf only on prior written
approval of Sagent; provided, however, that any compensation to such
subdistributors shall be solely the Distributor's responsibility. Any agreement
with such agent or subdistributor with respect to Products shall be coterminous
with this Agreement.
2.4 Independent Contractor Status. The relationship of Sagent and
Distributor established by this Agreement is that of independent contractors,
and neither party is an employee, agent, partner or joint venturer of the other.
Distributor shall not be considered an agent or legal representative of Sagent
for any purpose, and neither Distributor nor any director, officer, agent, or
employee of Distributor shall be, or be considered, an agent or employee of
Sagent. Distributor is not granted and shall not exercise the right or authority
to assume or create any obligation or responsibility on behalf of or in the name
of Sagent. All sales and other agreements between Distributor and its customers
are Distributor's sole responsibility and will have no effect on Sagent's
obligations under this Agreement.
2.5 Operations and Expenses. The detailed operations of Distributor
under this Agreement are subject to the sole control and management of
Distributor. Distributor shall be responsible for all of its own expenses and
employees. Distributor shall provide, at its own expense, such office space and
facilities, and hire and train such personnel, as may be required to carry out
its obligations under this Agreement. Distributor agrees that it shall incur no
expense chargeable to Sagent, except as may be specifically authorized in
advance in writing in each case by Sagent.
2.6 No Other Rights. Except as expressly provided in this Agreement, no
right, title or
2
<PAGE> 3
interest is granted by Sagent to Distributor. No right, title or interest is
granted by Sagent to Distributor relating to products other than the Products.
Notwithstanding Section 2.1 above, Sagent reserves the right to sell and
distribute the Products directly to the customers that are set forth in Exhibit
C attached hereto ("House Accounts").
2.7 No Conflicts. Distributor represents and warrants that, as of the
Effective Date, it is not involved, directly or indirectly, in any activities
involving products which compete or have the potential to compete with the
Products, including but not limited to the distribution of competing product
lines ("Competing Activities"). Distributor agrees that it shall not enter into
any Competing Activities in the Territory during the term of this Agreement and
for a period of five (5) years afterward. If Distributor becomes involved in any
Competing Activities, Distributor shall promptly inform Sagent of such
involvement, and Sagent shall have, in addition to all other remedies to which
it may be entitled, the right to terminate this Agreement without liability at
any time thereafter pursuant to Section 14.2.
3. LICENSE OF SAGENT MARKS
3.1 License. Subject to the terms and conditions of this Agreement,
Sagent grants to Distributor a non-transferable, revocable license, without
right of sublicense, to use the Sagent Marks in the Territory solely in
connection with the sale, distribution and advertisement of the Products.
Distributor shall not use the Sagent Marks except as expressly permitted herein.
3.2 Restrictions. All representations of the Sagent Marks that
Distributor intends to use shall first be submitted to Sagent for approval of
design, color and other details or shall be exact copies of those provided by
Sagent. Distributor shall fully comply with all guidelines, if any, communicated
by Sagent concerning the use of the Sagent Marks. Distributor shall not alter or
remove any trademarks, servicemarks, tradenames or other marks affixed to the
Products by Sagent, nor affix the Sagent Marks to any Product. Except as set
forth in this Article 3, nothing contained in this Agreement shall grant or
shall be deemed to grant to Distributor any right, title or interest in or to
the Sagent Marks. All uses of the Sagent Marks shall inure solely to the benefit
of Sagent, and Distributor shall obtain no rights with respect to any of the
Sagent Marks, other than the right to distribute Products as set forth herein,
and Distributor hereby irrevocably assigns to Sagent all right, title and
interest held by Distributor, if any, in or to any of the Sagent Marks. At no
time during or after the term of this Agreement shall Distributor challenge or
assist others in challenging the Sagent Marks (except to the extent expressly
entitled by applicable law) or the registration thereof or attempt to register
any trademarks, servicemarks, marks or trade names confusingly similar to the
Sagent Marks. Upon any termination or expiration of this Agreement, or the
election of Sagent pursuant to Section 4.2 below, Distributor shall immediately
cease to use any and all of the Sagent Marks, and any listing by Distributor of
any Sagent Mark in any telephone book, directory, public record or elsewhere
shall be removed by Distributor as soon as possible, but in any event not later
than the subsequent issue of such publication.
3.3 Infringement. Distributor shall promptly notify Sagent of any
actual or suspected infringements, imitations, or unauthorized use of the Sagent
Marks by third parties of which
3
<PAGE> 4
Distributor becomes aware. Sagent shall have the sole right, at its expense, to
bring any action on account of any such infringements, imitations or
unauthorized use, and Distributor shall cooperate with Sagent, as Sagent may
reasonably request, in connection with any such action brought by Sagent. Sagent
shall retain any and all damages, settlement and/or compensation paid in
connection with any such action brought by Sagent.
3.4 Registered User Agreements. Sagent and Distributor shall enter into
registered user agreements with respect to the Sagent Marks pursuant to
applicable trademark law requirements in the Territory, if any. Distributor or
Sagent, at Sagent's sole discretion, shall be responsible for proper filing of
registered user agreements and all such other required registrations relating to
the legal protection of the Sagent Marks with governmental authorities in the
Territory and shall pay all costs or fees associated with such filing(s).
4. OBLIGATIONS OF DISTRIBUTOR
4.1 Diligence. Distributor shall use its best efforts to promote the
marketing and distribution of the Products.
4.2 Minimum Revenue Requirements. In the event Distributor fails to
meet the minimum revenue requirements set forth in Exhibit E attached hereto,
then, notwithstanding anything in this Agreement to the contrary, and at
Sagent's election and not obligation, (i) Sagent shall be free to appoint other
distributors for its Products in the Territory, (ii) Distributor shall not have
any exclusive sale, marketing or distribution rights to the Products, (iii) the
license grant of Article 3 to the Sagent Marks shall terminate, and (iv)
notwithstanding anything to the contrary in Section 5.1 below, the Prices paid
by Distributor for the Products shall be equal to [*] percent ([*]) of the
applicable List Prices.
4.3 Minimum Revenue Guarantee. Distributor hereby guarantees that the
aggregate amount of payments received by Sagent from Distributor under this
Agreement during each of Year 1, Year 2 and Year 3 shall equal or exceed the
amounts of [*] dollars ([*]), [*] dollars ([*]) and [*] dollars ([*]),
respectively (the "Guaranteed Minimums"). Within thirty (30) days after the end
of each of Year 1, Year 2 and Year 3, Distributor shall pay Sagent the
difference between the applicable Guaranteed Minimum and the actual aggregate
amount of payments received by Sagent from Distributor under this Agreement
during such Year 1, Year 2 or Year 3, respectively, if such actual aggregate
amount is less than the applicable Guaranteed Minimum.
4.4 Costs and Expenses. Except as expressly set forth herein,
Distributor shall be solely responsible for all costs and expenses related to
the advertising, marketing, promotion, and distribution of the Products and for
performing its obligations hereunder.
4.5 Promotional Materials. Distributor shall maintain an adequate
inventory of Sagent's current sales materials and samples ("Sales Materials")
and shall use such Sales Materials in an efficient and effective manner to
promote the sale of the Products in the Territory.
4
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 5
4.6 Reports.
4.6.1 Annual Financial Reports. Distributor shall provide to
Sagent annual audited financial reports, which reports shall (i) be provided to
Sagent no later than two (2) months after the close of Distributor's applicable
fiscal year, and (ii) be treated as Confidential Information pursuant to the
terms of Article 11 below.
4.6.2 General Market Information. Distributor shall provide to
Sagent information regarding general market conditions and competitors on a
regular basis, but no less than once per calendar quarter.
4.6.3 Sales Activities. Within thirty (30) days after the end
of each calendar quarter, Distributor shall send to Sagent a sales activities
report including the names of customers, quantities of Products purchased,
dollar amounts invoiced to and received from such customers, and customer
backlog and inventory status of Products, and further shall maintain records of
the same.
4.7 Relations with Customers. Distributor shall process and ship each
customer order in a timely fashion. Distributor shall provide to customers any
and all instructions, precautions, and other warnings provided by Sagent to
Distributor; and Sagent shall provide to Distributor any such instructions,
precautions, and other warnings as Sagent in its sole discretion deems necessary
or desirable.
4.8 Product Representations. Distributor shall not to make any
representations with respect to the Products other than those expressly
authorized in writing in Sagent's written data sheets.
4.9 Indemnification. Distributor agrees to indemnify and hold Sagent,
its officers, directors, employees, successors, and assigns harmless from and
against any and all losses, damages or expenses of whatever form or nature,
including attorneys' fees and other costs of legal defense, whether direct or
indirect, that they, or any of them, may sustain or incur as a result of any
acts or omissions of Distributor or any of its directors, officers, employees,
or agents, including but not limited to (i) breach of any of the provisions of
this Agreement, (ii) negligence or other tortious conduct, (iii) representations
or statements not specifically authorized by Sagent herein or otherwise in
writing, or (iv) violation by Distributor (or any of its directors, officers,
employees, or agents) of any applicable law, regulation, or order in or of the
Territory or the United States.
5
<PAGE> 6
5. PRODUCTS
5.1 Product Prices. The prices to be paid by Distributor to Sagent for
Products hereunder shall be List Prices for the Products less the discount(s)
set forth in Exhibit D attached hereto ("Prices"). "List Prices" as used herein
shall mean the prices set forth in Sagent's then-current customer price
schedules or bulletins. Prices shall be F.O.B. Sagent's facilities in Palo Alto,
California, United States. All prices are expressed and shall be payable in U.S.
dollars. The difference between List Prices and Prices shall be Distributor's
sole remuneration from Sagent for the distribution and sale of Products
hereunder.
5.2 Price Changes. List Prices are subject to change by Sagent in its
sole discretion upon advance written notice of at least sixty (60) days. List
Price changes shall be effective immediately after such sixty (60) days notice
period and applicable to all purchase orders whether or not accepted prior to
the effective date of the List Price change.
5.3 Product Changes. Sagent reserves the right from time to time in its
sole discretion, without incurring any liability to Distributor with respect to
any previously placed Purchase Order (as defined in Section 6.1 below), to
discontinue or to limit its production of any Product; to allocate, terminate or
limit deliveries of any Product in time of shortage; to alter the design or
construction of any Product; to add new and additional products to the Products;
and upon reasonable notice to Distributor, to change its sales and distribution
policies, not inconsistent with the terms of this Agreement.
5.4 Discontinued Product. In the event Sagent discontinues sale of any
Product, it shall give Distributor prompt notice thereof. Within sixty (60) days
following the date of such discontinuation notice, Distributor may elect to
return for credit against future purchases hereunder any of the discontinued
Products (including samples) purchased by Distributor during the three (3)
months prior to the date of such notice which have not been used or sold and
which are in Distributor's inventory as of the date of that notice from Sagent.
6. PURCHASER ORDERS
6.1 Purchase Orders. All orders for Products submitted by Distributor
shall be initiated by written purchase order in form acceptable to Sagent (each
a "Purchase Order"); provided, however, that an order may initially be placed
orally or by fax if a confirmational Purchase Order is received by Sagent within
five (5) days of said oral or fax order. All Purchase Orders for Products are
subject to acceptance by Sagent in writing, and Sagent shall have no liability
to Distributor with respect to Purchase Orders that are not accepted. No partial
acceptance of a Purchase Order shall constitute the acceptance of the entire
Purchase Order, absent the written acceptance of such entire Purchase Order.
6.2 Agreement Governs. Purchase Orders shall be governed by the terms
of this Agreement. Nothing contained in any Purchase Order shall in any way
modify or delete the terms and conditions contained herein or add any additional
or different terms or conditions to the terms
6
<PAGE> 7
and conditions of this Agreement.
6.3 Order Changes. Purchase Orders may be canceled only with Sagent's
prior written approval. Cancellation of a Purchase Order is subject to a
restocking charge equal to ten percent (10%) of the aggregate value of such
Purchase Order.
7. PAYMENT; TAXES
7.1 Payment Terms. Payment of any and all amounts due under this
Agreement shall be U.S. Dollars. Distributor shall either (i) pay for Products
within thirty (30) days of receipt of such Products by wire transfer or check to
Sagent's designated account; or (ii), at Distributor's option, guarantee payment
for all Products by an irrevocable letter of credit. The letter of credit shall
be upon terms acceptable to Sagent, shall provide for payment upon delivery of
Sagent's invoice and the bill of lading that relate to the shipment, shall allow
for partial shipments, and shall provide for payment for all applicable taxes,
shipping charges, and other charges to be borne by Distributor as provided
hereunder. All exchange, interest, banking, collection and other charges shall
be at Distributor's expense.
7.2 Offsets. Any credits, allowances, or other amounts payable to or
creditable by Distributor shall be subject to offset for any claims or other
amounts owed by Distributor to Sagent pursuant to the provisions of this
Agreement.
7.3 Taxes.
7.3.1 Taxes Generally. Prices do not include and are net of
any foreign or domestic governmental taxes or charges of any kind that may be
applicable to the sale, licensing, marketing or distribution of the Products,
including without limitation excise, sales, use, or value-added taxes; customs
or other import duties; or other taxes, tariffs or duties. Distributor shall be
responsible for and shall pay all such taxes and charges levied against Sagent
in a timely manner. When Sagent has the legal obligation to pay or collect such
taxes, excluding taxes on the income of Sagent, the appropriate amount shall be
invoiced to Distributor and paid by Distributor within thirty (30) days of the
date of invoice unless Distributor provides Sagent with a valid tax exemption
certificate authorized by the appropriate taxing authority.
7.3.2 Withholding Taxes. All payments by Distributor shall be
made free and clear of, and without reduction for, any withholding taxes. Any
such taxes which are otherwise imposed on payments to Sagent shall be the sole
responsibility of Distributor. Distributor shall provide Sagent with official
receipts issued by the appropriate taxing authority or such other evidence as is
reasonably requested by Sagent to establish that such taxes have been paid.
7
<PAGE> 8
8. DELIVERY; REJECTION
8.1 Shipment and Delivery. Products delivered pursuant to the terms of
this Agreement shall be suitably packed for shipment in Sagent's standard
shipping cartons, marked for shipment to the destination specified in
Distributor's Purchase Order, and delivered to the carrier agent F.O.B.
Sargent's facility in Palo Alto, California, United States, at which time risk
of loss shall pass to Distributor. Unless otherwise specified in writing by
Distributor in Distributor's purchase order, Sagent shall select the carrier.
All freight, insurance, and other shipping expenses, as well as expenses for any
special packing requested by Distributor and provided by Sagent, shall be paid
by Distributor. All shipment and freight charges shall be deemed correct unless
Sagent receives from Distributor, no later than fifteen (15) days after the date
of shipment, a written notice specifying the shipment, the purchase order
number, and the exact nature of the discrepancy between the order and the
shipment in number or type of Products shipped, or freight or other charges, as
the case may be. Sagent may cease any and all shipments of Products until
Distributor is in full performance of its obligations under Article 7.
8.2 Title. Sagent shall retain all right, title and interest in and to
Products delivered to Distributor until Sagent has received all applicable
payments therefor.
8.3 Inspection; Rejection. Distributor shall inspect all Products
promptly upon receipt thereof and may reject any defective Product, provided
that Distributor shall (i) within the earlier of thirty (30) days after receipt
of such alleged defective Product or ten (10) days after discovery of such
alleged defect, notify Sagent of its rejection and request a Return Material
Authorization ("RMA") number and (ii) within ten (10) days of receipt of the RMA
number from Sagent return such rejected Product to Sagent, freight prepaid and
properly insured. Products not rejected within the foregoing time periods shall
be deemed accepted by Distributor. In the event that Sagent determines that the
returned Product is defective and properly rejected by Distributor, Sagent shall
at its option, repair or replace such defective Product, or accept return for
credit of such defective Product. Sargent shall return to Distributor, freight
prepaid, all repaired or replaced Products properly rejected by Distributor. In
the event that any rejected product is determined by Sagent to not be defective
or to have been modified or subjected to unusual electrical or physical stress,
misuse, abuse or unauthorized repair, Distributor shall reimburse Sagent for all
costs and expenses related to the inspection, repair, if any, and return of such
Product to Distributor.
8.4 Returned Product. Distributor shall only return Products to Sagent
with Sagent's prior written approval. Any Product returned to Sagent by
Distributor as authorized under this Agreement shall be shipped, freight
prepaid, F.O.B. Sagent's address first set forth above or such other location as
Sagent may instruct Distributor, and shall be packed in its original packing
material. Sagent may refuse to accept any Product not packed and shipped as
herein provided.
9. TECHNICAL SUPPORT
9.1 Support by Distributor. Distributor shall be solely responsible for
supporting all Products distributed hereunder. Distributor shall provide
reasonable technical support to customers,
8
<PAGE> 9
including without limitation (i) maintaining trained and competent technical and
engineering support personnel for the Products who are sufficiently
knowledgeable with respect to the Products to answer customer questions
regarding the use and operation of Products, (ii) designating a technical
liaison to coordinate Distributor's technical support provided to Customers,
(iii) responding promptly to requests for technical support from customers, and
(iv) providing technical support services to address and resolve customers'
support requests with respect to the Products. Distributor shall ensure that
Distributor's technical and engineering support personnel attend any training
required by Sagent with respect to the Products.
9.1.1 Frontline Support. Distributor shall ensure that all
customer questions regarding the use or operation of Products are initially
addressed to and answered by Distributor. Unless otherwise agreed in writing by
Sagent, Distributor shall not represent to any third party that Sagent is
available to answer questions from any customer directly.
9.1.2 Conformance with Sagent Policy. Distributor will provide
prompt and effective service and repair of Products in the Territory in
accordance with Sagent's standard support policies then in effect.
9.1.3 Additional Responsibilities. Without limiting the
foregoing and in addition to any other obligations set forth in Sagent's then
current support terms and conditions, Distributor also shall be responsible for
(i) providing sufficient information to Sagent for Sagent to duplicate any
reported error in the Products; (ii) incorporating updates into the Products
promptly upon receipt thereof; (iii) reporting errors promptly in English and in
writing in accordance with Sagent's standard support procedures; and (iv)
providing reasonable cooperation and full information to Sagent in the
furnishing of support for the Products.
9.2 Support by Sagent. Sagent shall use reasonable efforts to provide
to Distributor such back-up telephone or electronic-mail technical support as
Sagent makes generally available to its distributors other than Distributor.
Such telephone support shall be provided during Sagent's normal business hours
(Monday through Friday, 9:00 a.m. - 5:00 p.m. Pacific Standard Time, excluding
Sagent holidays). With respect to computer software Products, Sagent will
provide support for the then-current versions of such computer software Products
only.
10. DISCLAIMER OF WARRANTY
SAGENT MAKES NO WARRANTIES OR CONDITIONS, EXPRESS STATUTORY, IMPLIED OR
OTHERWISE, AND SAGENT SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND
CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NONINFRINGEMENT, AND ALL OTHER IMPLIED WARRANTIES OR CONDITIONS ARISING FROM
COURSE OF DEALING, USAGE OF TRADE OR CUSTOM. NOTWITHSTANDING THE FOREGOING,
SAGENT DOES NOT EXCLUDE LIABILITY TO THE EXTENT THAT SUCH LIABILITY MAY NOT BE
EXCLUDED OR LIMITED BY LAW.
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<PAGE> 10
11. CONFIDENTIALITY AND PROPRIETARY RIGHTS
11.1 Confidentiality. Distributor acknowledges that by reason of its
relationship to Sagent hereunder it will have access to certain information and
materials concerning Sagent's business, plans, customers, technology, and
products that are confidential and of substantial value to Sagent, which value
would be impaired if such information were disclosed to third parties
("Confidential Information"). Distributor agrees that it will not use in any way
for its own account or the account of any third party, nor disclose to any third
party, any Confidential Information revealed to it by Sagent. Distributor shall
take every reasonable precaution to protect the confidentiality of Confidential
Information. Upon request by Distributor, Sagent shall advise whether or not it
considers any particular information or materials to be confidential.
Distributor shall not publish any technical description of the Products beyond
the description published by Sagent. In the event of termination of this
Agreement, there shall be no use or disclosure by Distributor of any
Confidential Information of Sagent, and Distributor shall not reproduce,
manufacture, have reproduced or have manufactured any computer software
programs, devices, components or assemblies utilizing any of Sagent's
confidential information.
11.2 Proprietary Rights. Distributor agrees that Sagent retains all of
its right, title and interest in and to all patents, trademarks, trade names,
inventions, copyrights, know-how and trade secrets relating to the Products or
the product lines that include the Products, and the design, manufacture,
operation or service of the Products. The use by Distributor of any of these
property rights is authorized only for the purposes herein set forth and upon
termination of this Agreement for any reason such authorization will cease.
Distributor shall not (and shall require that its customers do not) remove,
alter, cover or obfuscate any copyright notices or other proprietary rights
notices placed or embedded by Sagent on or in any Product.
12. INTELLECTUAL PROPERTY INDEMNIFICATION
12.1 Limited Indemnity. Distributor agrees that Sagent has the right to
defend, or at its option to settle, and Sagent agrees, at its own expense, to
defend or at its option to settle, any third party claim, suit or proceeding
(collectively, "Action") brought against Distributor alleging the Products
infringe any copyright or trademark in existence as of the Effective Date,
subject to the limitations hereinafter set forth. Sagent shall have sole control
of any such Action or settlement negotiations, and Sagent agrees to pay, subject
to the limitations hereinafter set forth, any final judgment entered against
Distributor on such issue in any such Action defended by Sagent. Distributor
agrees that Sagent will be relieved of the foregoing obligations unless
Distributor notifies Sagent in writing of such Action within five (5) days after
becoming aware of such action, gives Sagent authority to proceed as contemplated
herein, and gives Sagent proper and full information and assistance to settle
and/or defend any such Action. If it is adjudicatively determined, or if Sagent
believes, that the Products, or any part thereof, infringe any copyright or
trademark, or if the sale or use of the Products, or any part thereof, is, as a
result, enjoined, then Sagent may, at its election, option, and expense: (i)
procure for Distributor the right under such copyright or trademark to sell or
use, as appropriate, the Products or such part thereof; (ii) replace the
Products, or part thereof, with other noninfringing suitable products or parts;
(iii) suitably modify the Products or part
10
<PAGE> 11
thereof; or (iv) remove the Products, or part thereof, terminate distribution or
sale thereof and refund the payments paid by Distributor for such Products less
a reasonable amount for use and damage. Sagent shall not be liable for any costs
or expenses incurred without its prior written authorization, or for any
installation costs of any replaced Products.
12.2 Limitations. Notwithstanding the provisions of Section 12.1 above,
Sagent assumes no liability for infringement claims arising from (i) combination
of the Products or portions thereof with other software not provided by Sagent
if such infringement would not have occurred but for such combination, or (ii)
the modification of the Products or portions thereof unless such modification
was made or authorized by Sagent, when such infringement would not have occurred
but for such modification.
12.3 DISCLAIMER. SAGENT'S LIABILITY ARISING OUT OF OR RELATING TO THIS
ARTICLE 12 SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY DISTRIBUTOR TO SAGENT
FOR THE ALLEGEDLY INFRINGING PRODUCTS THAT ARE THE SUBJECT OF THE INFRINGEMENT
CLAIM. THE FOREGOING PROVISIONS OF THIS ARTICLE 12 STATE THE ENTIRE LIABILITY
AND OBLIGATION OF SAGENT AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR WITH RESPECT TO
ANY ALLEGED INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS OR
ANY PART THEREOF.
13. LIMITATION OF LIABILITY
IN NO EVENT SHALL SAGENT'S LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT EXCEED THE AGGREGATE AMOUNTS PAID BY DISTRIBUTOR TO SAGENT HEREUNDER,
INCLUDING BUT NOT LIMITED TO LIABILITY UNDER ARTICLE 12 ABOVE. IN NO EVENT SHALL
EITHER PARTY BE LIABLE FOR LOST PROFITS, COST OF PROCUREMENT OF SUBSTITUTE
GOODS, OR ANY OTHER SPECIAL, RELIANCE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), PRODUCTS LIABILITY, OR OTHERWISE. THE FOREGOING
LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE
OF ANY LIMITED REMEDY STATED HEREIN.
14. TERM AND TERMINATION
14.1 Term. Unless earlier terminated pursuant to Section 14.2 below or
by mutual written consent, this Agreement shall commence upon the Effective Date
and continue in full force and effect for an initial term expiring on December
31, 2000. The parties may renew this Agreement for additional one (1) year terms
upon mutual written consent (each a "RENEWAL TERM").
14.2 Termination. This Agreement may be terminated prior to the
expiration of the initial term by prior written notice to the other party as
follows:
14.2.1 By either party upon written notice of termination if
the other party breaches
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<PAGE> 12
any material term or condition of this Agreement and fails to cure that breach
within thirty (30) days after receiving written notice stating the nature of the
breach and the non-breaching party's intent to terminate; or
14.2.2 By either party, effective immediately, if the other
party should become the subject of any voluntary or involuntary bankruptcy,
receivership, or other insolvency proceedings or make an assignment or other
arrangement for the benefit of its creditors, or if such other party should be
nationalized or have any of its material assets expropriated; or
14.2.3 By Sagent, effective immediately, if there should occur
any material change in the management, ownership, control, sales personnel,
sales and marketing capability, or financial condition of Distributor that
prevents Distributor from fulfilling its obligations hereunder; or
14.2.4 By Sagent, effective immediately, if any law or
regulation should become adopted or in effect in the Territory that would
restrict Sagent's termination rights or otherwise invalidate any provisions
hereof; or
14.2.5 By Sagent, effective immediately, if Distributor should
violate the terms of Section 2.7 above or Section 16.3 below; or
14.2.6 By Sagent, effective immediately, in accordance with
provisions of Sections 15.3 or 15.5; or
14.2.7 By Sagent, effective immediately, if Distributor
knowingly makes any false or untrue statements or representations to Sagent
herein or in the performance of its obligations hereunder.
14.3 Purchase Orders; No Waiver. Notwithstanding the foregoing,
Distributor shall be obligated to accept deliveries of Products for which
Purchase Orders were accepted by Sagent prior to the effective date of
termination. After any notice of termination has been delivered by either party
hereunder, deliveries of Product from Sagent to Distributor, unless otherwise
agreed by Sagent in its sole discretion, shall require prepayment by wire
transfer by Distributor to Sagent. The acceptance of any Purchase Order for the
sale of any Product to Distributor after the termination or expiration of this
Agreement shall not be construed as a renewal or extension of this Agreement nor
as a waiver of termination of this Agreement.
14.4 Rights of Parties Upon Termination or Expiration. The following
provisions shall apply on the termination or expiration of this Agreement.
14.4.1 Cessation of Sales Activities. Distributor shall cease
all sales and other activities on behalf of Sagent and shall return to Sagent
and immediately cease all use of Confidential Information previously furnished
by Sagent and then in Distributor's possession. Distributor shall additionally
turn over to Sagent Distributor's current customer mailing list and take such
action as is necessary to terminate Distributor's registration as Sagent's sales
representative
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<PAGE> 13
with any governmental authority.
14.4.2 Acceleration of Amounts Owed. All indebtedness of
Distributor to Sagent shall become immediately due and payable without further
notice or demand, which is hereby expressly waived, and Sagent shall be entitled
to reimbursement for any reasonable attorneys' fees that it may incur in
collecting or enforcing payment of such obligations;
14.4.3 Cessation of Use of Sagent Marks. Distributor shall
remove from its property and immediately discontinue all use, directly or
indirectly, of the Sagent Marks, or of any word, title, expression, trademark,
design, or marking that, in the opinion of Sagent, is confusingly similar
thereto. Distributor shall further certify in writing to Sagent that Distributor
has completely terminated its use of any and all such Sagent Marks, trademarks,
designs, or markings, or any other word, title, or expression similar thereto
that appeared in or on any devices or other materials used in conjunction with
Distributor's business.
14.4.4 No Obligation to Repurchase. Sagent shall have no
obligation to repurchase or to credit Distributor for its inventory of Products
at the time of termination of this Agreement. Sagent may, at its sole option,
repurchase from Distributor, at Sagent's then current list prices less any
applicable then current discounts or at the net prices paid by Distributor,
whichever are lower, any or all inventory of Products originally purchased by
Distributor from Sagent and remaining unsold by Distributor.
14.5 No Liability for Termination. Except as expressly required by law,
in the event of termination of this Agreement by either party in accordance with
any of the provisions of this Agreement, neither party shall be liable to the
other, because of such termination, for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of Sagent or Distributor. Termination shall not,
however, relieve either party of obligations incurred prior to the termination.
14.6 Survival. Except for termination by Sagent pursuant to Section
14.2.1 above, Distributor may sell Products existing in its inventory as of the
effective date of termination of this Agreement for a period of ninety (90) days
after the effective date of such termination ("Wind-Down Period"). During the
Wind-Down Period, the provisions of Article 15 and Sections 2.2, 4.8 and 4.9
shall survive. In addition to the foregoing provisions, the following provisions
shall survive any termination or expiration of this Agreement: Articles 1, 11,
13 and 16, and Sections 2.4, 2.6, 2.7, 3.2, 4.10, 6.2, 8.2, 14.4, 14.6, 15.1 and
15.4.
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<PAGE> 14
15. COMPLIANCE WITH LAWS
15.1 Export Control. Any and all obligations of Sagent to provide the
Products, as well as any technical data, shall be subject in all respects to
such United States laws and regulations as will from time to time govern the
license and delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor legislation, and the Export Administration
Regulations issued by the U.S. Department of Commerce, Bureau of Export
Administration. Distributor represents and warrants that it will not export or
reexport the Products or technical data related thereto except in conformity
with such laws and regulations.
15.1.1 Required Authorization. Distributor agrees that, unless
prior written authorization is obtained from the Bureau of Export
Administration, or the Export Administration Regulations explicitly permit the
export, reexport, and/or transshipment of the Products or technical data
disclosed or provided to Distributor, as applicable, without such written
authorization, Distributor shall not export, reexport, or transship, directly or
indirectly, the Products or technical data, to country groups S or Z (as defined
in the Export Administration Regulations), which currently consist Cuba and
North Korea, or to Iran, Iraq or Yugoslavia (Serbia and Montenegro), or to any
other country as to which the U.S. Government has placed an embargo against the
shipment of products, which embargo is in effect during the term of this
Agreement.
15.1.2 Prohibited Customers. Distributor further agrees not to
resell Products to any organization, public or private, which engages in the
research or production of military devices, armaments, or any instruments of
warfare, including biological, chemical and nuclear warfare.
15.2 Import Licenses; Exchange Controls; Other Governmental Approvals.
Distributor represents and warrants that it shall, at its expense, obtain any
and all import licenses and governmental approvals that may be necessary to
permit the sale by Sagent and the purchase by Distributor of the Products,
comply with all registration requirements in the Territory, obtain such
approvals from the banking and other governmental authorities of the Territory
as may be necessary to guarantee payment of all amounts due hereunder to Sagent
in U.S. dollars, and comply with any and all governmental laws, regulations, and
orders that may be applicable to Distributor by reason of its execution of this
Agreement, including but not limited to any requirement to be registered as
Sagent's independent distributor with any governmental authority, and including
but not limited to any and all laws, regulations, or orders that govern or
affect the ordering, export, shipment, import, sale (including government
procurement), delivery, or redelivery of the Products in the Territory.
Distributor shall furnish Sagent with such documentation as Sagent may request
to confirm Distributor's compliance with this Section 15.2 and agrees that it
shall not engage in any course of conduct that, in Sagent's reasonable belief,
would cause Sagent to be in violation of the laws of any jurisdiction.
15.3 Local Law. Distributor shall notify Sagent of the existence and
content of any mandatory provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at the time
of its execution or thereafter. Failure to do so shall
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<PAGE> 15
constitute a breach of this Agreement for which Sagent may terminate this
Agreement effective immediately upon notice to Distributor pursuant to Section
14.2 above.
15.4 Liability of Sagent. The provisions of this Agreement under which
the liability of Sagent is excluded or limited shall not apply to the extent
that such exclusions or limitations are declared illegal or void under the laws
applicable in the countries in which Products are sold hereunder.
15.5 Questionable Payments. Distributor certifies that neither it, nor
any of its directors, officers, employees, or agents is an official, agent, or
employee of any government or governmental agency or political party or a
candidate for any political office on the date of this Agreement. Distributor
shall promptly notify Sagent of the any event that would or may result in an
exception to the foregoing representation. Distributor shall not, directly or
indirectly, in the name of, on behalf of, or for the benefit of Sagent offer,
promise to pay, or pay any compensation, or give anything of value to, any
official, agent, or employee of any government or governmental agency, or to any
political party or officer, employee, or agent thereof. Distributor shall
require each of its directors, officers, employees, and agents to comply with
the provisions of this Section 15.5. Any breach of the provisions of this
Section 15.5 shall entitle Sagent to terminate this Agreement effective
immediately upon written notice to Distributor pursuant to Section 14.2 above.
16. MISCELLANEOUS PROVISIONS
16.1 Governing Law. This Agreement shall be governed by and construed
under the law of England.
16.2 Jurisdiction; Venue. The parties consent to the personal
jurisdiction of, and venue in, the courts of England.
16.3 Assignment. Distributor may not transfer or assign any of its
rights or obligations under this Agreement without the prior written consent of
Sagent. Sagent may freely transfer or assign its rights or obligations under
this Agreement without the prior written consent of Distributor. Subject to the
foregoing, this Agreement will be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
16.4 No Implied Waivers. The failure of either party at any time to
require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall the
waiver of either party of a breach of any provision hereof be taken or held to
be a waiver of a provision itself.
16.5 Severability. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions will
nevertheless remain in full force and effect. The parties agree to renegotiate
in good faith those provisions so held to be invalid to be valid, enforceable
provisions which provisions shall reflect as closely as possible the original
intent of the parties, and further agree to be bound by the mutually agreed
substitute provision.
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<PAGE> 16
16.6 Force Majeure. Except for payment of monies, neither party shall
be liable for failure to fulfill its obligations under this Agreement or any
purchase order issued hereunder or for delays in delivery due to causes beyond
its reasonable control, including, but not limited to, acts of God, man-made or
natural disasters, earthquakes, fire, riots, flood, material shortages, strikes,
delays in transportation or inability to obtain labor or materials through its
regular sources. The time for performance of any such obligation shall be
extended for the time period lost by reason of the delay.
16.7 Conflicting Terms. The parties agree that the terms and conditions
of this Agreement shall prevail, notwithstanding contrary or additional terms,
in any purchase order, sales acknowledgment, confirmation or any other document
issued by either party effecting the purchase and/or sale of Products.
16.8 Headings. Headings of paragraphs herein are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
16.9 Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (a) by hand, (b) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the other party
first set forth above, or to such other address as a party may designate by
written notice in accordance with this Section 16.9, (c) by overnight courier,
or (d) by fax with confirming letter mailed under the conditions described in
(b) above. Notice so given shall be deemed effective when received, or if not
received by reason of fault of addressee, when delivered.
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<PAGE> 17
16.10 Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements relating thereto, written or oral, between the
parties. Amendments to this Agreement must be in writing, signed by the duly
authorized officers of the parties. The terms of any purchase order are
expressly excluded.
16.11 Injunctive Relief. DISTRIBUTOR AGREES THAT ANY VIOLATION OR
THREATENED VIOLATION OF SECTIONS 2.7, 3.2, 3.4, 11.1, 11.2 OR 14.4.3 WILL CAUSE
IRREPARABLE INJURY TO SAGENT, ENTITLING SAGENT TO OBTAIN INJUNCTIVE RELIEF IN
ADDITION TO ALL LEGAL REMEDIES.
16.12 Buyout Agreement. This Agreement shall be conditioned upon the
execution of a separate buyout agreement substantially similar to the agreement
attached hereto as Exhibit F.
In Witness Whereof, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
SAGENT: DISTRIBUTOR:
SAGENT TECHNOLOGY, INC. SAGENT U.K. LTD.
By: /s/ THOMAS M. LOUNIBOS BY: /s/ VINCENT DE GENNARO
------------------------------- ---------------------------------
Name: Thomas M. Lounibos Name: Vincent De Gennaro
----------------------------- -------------------------------
(Typed or Printed) (Typed or Printed)
Title: Vice President of Sales Title: Director
---------------------------- ------------------------------
17
<PAGE> 18
EXHIBIT A
PRODUCT LISTING
All of Sagent's general product line.
<PAGE> 19
EXHIBIT B
SAGENT TRADEMARKS, TRADENAMES AND SERVICEMARKS
Sagent
Sagent U.K.
<PAGE> 20
EXHIBIT C
HOUSE ACCOUNTS
Any and all present and future OEM customers worldwide.
Sagent shall provide Distributor with written notification of all such OEM
customers. When appropriate, and only under confidentiality agreements
satisfactory to Sagent, Sagent shall provide advance notification to Distributor
of any pending OEM relationships.
<PAGE> 21
EXHIBIT D
DISCOUNTS TO LIST PRICES
D.1 For so long as Distributor meets the minimum revenue requirements
set forth in Section 4.2, the discount for each and every Product shall be [*]%
of the List Price of such Product.
D.2 If Distributor fails to meet the minimum revenue requirements set
forth in Section 4.2, then there shall be no discount.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 22
EXHIBIT E
MINIMUM REVENUE REQUIREMENTS
E.1 Year 1. The aggregate amount of payments received by Sagent from
Distributor under this Agreement during Year I must equal or exceed [*] dollars
([*]).
E.2 Year 2. The aggregate amount of payments received by Sagent from
Distributor under this Agreement during Year 2 must equal or exceed [*] dollars
([*]).
E.3 Year 3. The aggregate amount of payments received by Sagent from
Distributor under this Agreement during Year 3 or any Renewal Term must equal or
exceed [*] dollars ([*]).
E.4 Renewal Terms. The aggregate amount of payments received by Sagent
from Distributor under this Agreement during each Renewal Term must equal or
exceed [*] dollars ([*]).
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 23
EXHIBIT F
BUYOUT AGREEMENT
<PAGE> 1
EXHIBIT 10.15
JOINT VENTURE AGREEMENT
This Joint Venture Agreement is entered into as of April 8, 1998 (the EFFECTIVE
DATE") between Sagent Technology, Inc. with offices at 2225 East Bayshore Road,
Suite 100, Palo Alto, CA 94303, ("SAGENT") and ISAR-VERMOGENSVERWALTUNG GBR MBH
a German limited liability partnership within the meaning of the German Civil
Code with the following address at Gut Keferloh 1B, D-85630 Grasbrunn/Munich,
Germany ("INVESTOR").
RECITALS
A. WHEREAS the Investor is a German limited liability partnership which
desires to incorporate and invest in a new German Company, referred to
herein as "JVC" which will distribute the software and services of a
software company in the Territory.
B. WHEREAS Sagent is a software company which seeks expanded distribution
of its software and its related services in the Territory.
C. WHEREAS the Investor, will incorporate the JVC, and the JVC will
receive a license for the Territory from Sagent to (i) resell Sagent
products, (ii) provide authorized maintenance, training and consulting
services and (iii) manage new VARs and Resellers.
D. WHEREAS the Investor's responsibilities related to the JVC will
include: (1) proper incorporation of the JVC (2) the provision of
start-up and operating capital for the JVC, (3) appointing three
appropriate and responsible individuals of the Advisory board of the
JVC and (4) voting of stock shares of the JVC.
E. WHEREAS Investor and Sagent have expressed a desire to work together
to create the JVC which shall be governed by its Shareholder
Agreement, its board, and the Exclusive Software Distribution
Agreement and to have the JVC granted rights and privileges to
distribute the software and services of Sagent in the Territory.
NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 DEFINITIONS
1.1 "DISTRIBUTION AGREEMENT" shall mean the Exclusive Distribution
Agreement executed on April 8, 1998 between Sagent and JVC.
1.2 Intentionally left blank.
1.3 "JVC" shall mean the company which is incorporated by Investor
pursuant to the terms and conditions of this Agreement.
<PAGE> 2
1.4 "RULES OF PROCEDURE FOR THE ADVISORY BOARD" shall mean the Rules of
Procedure for the Advisory Board of the JVC which are set out as
Exhibit D hereto.
1.5 "SHAREHOLDERS' AGREEMENT" shall mean the Shareholders' Agreement of
JVC which is set out as Exhibit C hereto.
1.6 "TERRITORY" shall mean those countries / accounts set out in the
Distribution Agreement.
1.7 "SAGENT PRODUCT AND SERVICES" shall mean those products and services
developed or licensed by Sagent and provided by Sagent from time to
time and which are distributed by the JVC in the Territory pursuant to
the Terms and Conditions of the Distribution Agreement.
1.8 "SAGENT VISITING DIRECTOR" shall be that person appointed by Sagent
that Investor shall establish as a visiting board member of the JVC
Advisory Board. When used in this Agreement the term "approval of
Sagent's Visiting Director of the JVC's Advisory Board" or similar
term shall mean the affirmative approval of the Sagent Visiting
Director and accordingly the failure of the Sagent Visiting Director
to attend or vote will preclude the required approval.
1.9 "COMPETITOR" shall mean a Data Mart and/or Data Warehouse company or
company that sells Data Access and/or Data Movement tools such as but
not limited to Informatica, Microstrategy, Information Advantage,
Brio, SAS.
"INDIRECT COMPETITOR" shall mean any other software company providing
Database tools or any other business competing with JVC for the same
customers in Data Warehousing tools licensing transactions.
"NON-COMPETITOR COMPANY" shall mean any company which is not a
"Competitor" or an "Indirect Competitor".
ARTICLE 2 FORMATION OF JVC
2.1 INCORPORATION Promptly after the Effective Date of this Agreement, the
Investor shall cause the JVC to be incorporated in the form of a
German GmbH (Gesellschaft mit beschrankter Haftung), or be
incorporated by using an existing German GmbH. In connection with the
foregoing action the Investor shall cause the JVC to adopt the charter
documents (GmbH Shareholders' Agreement and Rules of Procedure for the
Advisory Board) which shall include but not be limited to the identity
and voting rights of the Advisory Board and Shareholders of the JVC
and which are substantially in the form of Exhibits D and E hereto.
2
<PAGE> 3
2.2 FUNDING OF INITIAL CAPITALIZATION. The Investor agrees to provide
sufficient funding up to a maximum of one and a half million Deutsche
Marks (DM 1,500,000) over a three year period to enable JVC to hire
personnel, obtain space and otherwise conduct its business. In no
event shall Investor be required to increase its investment or have
any other liability or responsibility to JVC other than the funding
requirements in this section and as otherwise provided in this
Agreement.
2.3 EXCEPTION. Investor shall not be required to meet its investment
obligations and JVC shall not be required to meet its minimum royalty
payment obligation if (i) Sagent has materially defaulted in any of
its obligations set out in this Agreement between the parties and such
default is not cured within ten (10) days of Investor's written notice
to Sagent; or (ii) Sagent's overall revenues, commencing on the
Effective Date, and excluding European revenue do not grow by at least
thirty (30) percent annually or (iii) Sagent does not continue to make
all reasonable commercial efforts in its pursuit of becoming a
publicly traded entity.
2.4 FUNDING REQUIREMENTS.
(a) JVC shall carry all expenses related to the foundation/incorporation
of JVC including but not limited to notary and legal fees. Sagent
shall carry all expenses related to the acquisition of JVC including,
but not limited to notary and legal fees.
(b) The Investor expects that the above investment amount will be
sufficient, however it shall have the right to invest more if
necessary but shall not be obligated to do so.
(c) Sagent shall have the right to lend funds in the form of subordinated
loans to JVC if the Investor has reached its maximum limit.
(d) Apart from disbursements which are normally required in the ordinary
course of business, during the first three (3) years of JVC's
operation the approval of the Advisory Board of JVC and in particular
the Sagent Visiting Director shall be required prior to the Investor
taking any money or other asset out of JVC in any form including but
not limited to cash, profits or dividends. Without approval of the
Sagent Visiting Director, investor shall be entitled to withdrawal of
amounts it has loaned to JVC.
(e) Any amounts lent by Sagent shall bear prevailing market rates of
interest and otherwise comply with all US laws.
3
<PAGE> 4
2.5 STRUCTURE OF JVC
(a) The Advisory Board of JVC will have three Members of the Advisory
Board, one of whom shall be nominated by Sagent and two by the
Investor. The Board will meet at least quarterly in person or by
telephone with at least five (5) days advance written notice of all
meetings.
(b) At the outset of the Agreement, one hundred percent of the
shareholdings of the JVC will be owned by Investor, however the
Sagent Visiting Director shall have the right to approve or reject
alternative ownership. Further, any transfer is subject to Sagent's
right of first refusal found elsewhere in this Agreement.
(c) Decisions of JVC for which the approval of Sagent's appointed member
of JVC's Advisory Board is required shall be set out in the Rules of
Procedures, the Shareholders Agreement and in the Actions requiring
Approval set out in Exhibits C, D and E hereto.
ARTICLE 3 MANAGEMENT OF THE JOINT VENTURE COMPANY
3.1 MANAGEMENT GENERALLY. The JVC shall be managed and administered in
accordance with the applicable provisions of its charter documents.
The JVC shall be managed in a manner consistent with prudent business
practices.
3.2 INTENT. The parties will agree to guide JVC to achieve the
objectives of Sagent in the "Territory" and the desire by the
Investor to achieve a substantial return from its efforts.
3.3 INVESTOR RESPONSIBILITY. The Investor shall use its best efforts as
the sole shareholder of JVC to ensure that the General Manager of the
JVC understands and works diligently to fulfill all of JVC's
obligations under the Distribution Agreement between JVC and Sagent
which is dated April 8, 1998.
3.4 The advisory board of Sagent GmbH will provide a person acceptable to
Sagent as General Manager of Sagent GmbH.
ARTICLE 4 ALLOCATIONS, DISTRIBUTIONS AND OTHER FISCAL MATTERS
4.1 AUDITORS. The firm of Coopers & Lybrand is hereby designated as the
initial Auditors for the JVC; Auditors shall not be changed without
the approval of the Sagent Visiting Director.
4.2 INFORMATION AND ACCESS. The JVC shall keep its accounting and Tax
records on Sagent's fiscal year (calendar year) basis and shall
provide Sagent with financial statements (to include a balance sheet,
income statement, and
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<PAGE> 5
statement of cash flows) no less frequently than within 21 days after
the end of each calendar quarter. JVC shall also provide Sagent with
a personnel roster at such time, listing each employee and significant
consultant of the JVC by name, position held and salary. Sagent shall
have the right at any time to inspect JVC's books records and
facilities and to talk with the officers, Members of the Advisory
Board, employees and consultants of the JVC.
4.3 LIMITATION ON LIABILITY. In the event of termination by either party
in accordance with any of the provisions of this Agreement, neither
party shall be liable to the other, because of such termination for
compensation, reimbursement or investments, leases or commitments in
connection with the business or goodwill of Sagent or JVC. Termination
shall not, however, relieve either party of obligations incurred prior
to the termination.
4.4 Regardless of whether any remedy fails of its essential purpose, in no
event will either party be liable to the other party for incidental,
indirect, special or consequential damages, notwithstanding being
aware of the possibility of such damages. Neither party's liability
for any damages or claims shall exceed US $ 500,000 or DM 900,000
whichever amount is lower.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
Each party hereby severally represents and warrants to each other party as
follows:
5.1 DUE ORGANIZATION AND EXISTENCE.
(a) In the case of the Investor, that it is a limited liability
partnership duly organized, validly existing and in good standing
under the laws of Germany.
In no event shall Investor be required to increase its investment or
have any other liability or responsibility other than the investment
and as otherwise provided in this Agreement.
(b) In the case of Sagent, that it is a corporation duly organized and
validly existing in accordance with the laws of California, USA.
5.2 QUALIFICATION. The parties acknowledge that each of them are duly
qualified, licensed or registered to transact business and is in good
standing under the laws of each jurisdiction in which the nature of
its business or the location of its assets requires it to be so
qualified.
5.3 POWER AND AUTHORITY. The parties warrant that each has all requisite
power and authority to transact the business in which it is currently
engaged or proposes to engage, to own or hold under lease its
properties and assets, and to execute and deliver, and to perform its
obligations under this Agreement.
5.4 NO CONFLICT. Neither the Agreement's execution and delivery of other
documents contemplated hereunder, (a) requires or will require
approval of its
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<PAGE> 6
equity owners or the holders of any of its indebtedness or
obligations, (b) contravenes or will contravene any law applicable to
or binding upon it or any of its properties, (c) contravenes or will
contravene any provision of its charter documents, (d) does or will
contravene or result in a breach of or constitute a default under any
instrument, indenture, agreement or other obligation to which it is a
party or by which it or any of its assets may be bound, or (e)
requires or will require the consent or approval of, the giving of
notice to, the registration with, the recording or filing of any
document with, or the taking of any other action by or in respect of,
any governmental commission, authority or agency, or any other person
or entity whether foreign or domestic the violation of which would
have a material effect on the transaction contemplated herein.
5.5 EXECUTION, DELIVERY AND PERFORMANCE. Each party warrants that it has
duly executed and delivered this Agreement, and this Agreement
constitutes a legal, valid and binding obligation enforceable against
it in accordance with the terms hereof.
5.6 ABSENCE OF LITIGATION. Each party warrants that there are no
actions, suits or proceedings pending or, to the best of its
knowledge, threatened against or affecting it or any of its assets.
5.7 NO LIABILITIES OR OBLIGATIONS. Investor warrants that it has not
incurred any liabilities or obligations on behalf of the JVC, other
than liabilities or obligations required by German law.
5.8 NON COMPETITION. During the first three years of the Agreement, JVC
will not sell any products except the Sagent Products and Services.
During this three-year period, Investor and any of its companies where
investor is the majority shareholder shall have the right to otherwise
conduct their business, however in no event may Investor and its
companies sell or otherwise promote the products of a Competitor or
Indirect Competitor of Sagent without Sagent's prior written
permission and if such permission is granted by Sagent, Investor and
its companies will be responsible for making sure that any affiliate
who may be working with competitors will not receive any confidential
information of Sagent.
ARTICLE 6 ADDITIONAL COVENANTS AND AGREEMENTS
6.1 EXCLUSIVE DEALING. The parties shall work together exclusively to
develop this venture. No party may unilaterally take any action or
enter into any agreement granting any rights to or associated with
this venture to any person or entity that is not a party hereto.
6.2 RESTRICTIONS ON TRANSFERABILITY OF EQUITY INTEREST IN JVC. Except
for transfers or other dispositions to other wholly owned companies,
Investor may not sell, assign, pledge or otherwise dispose of its
equity interest in the JVC, in whole or in part, unless Investor (the
"TRANSFERRING PARTY") has received a
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<PAGE> 7
bona fide offer it is willing to accept for such interest (or part
thereof), and Investor thereafter offers Sagent (the "NON-TRANSFERRING
PARTY") a right of first refusal to purchase such interest (or part
thereof) (the "OFFERED INTEREST") at the same price and upon the same
terms and conditions as the bona fide offer, in accordance with the
following procedure:
(a) The Transferring Party shall provide notice to the Non-Transferring
Party, which notice shall (i) state that the Transferring Party
received a bona fide third party offer for the Offered Interest, (ii)
state the price offered for the Offered Interest, on a per-share or
other unitary basis, and (iii) describe the terms and conditions to
which the bona fide offer is subject (the "OFFER NOTICE") and shall
provide the Non Transferring Party with any other information it
reasonably requests regarding the Offer, or JVC.
(b) If the Non-Transferring Party elects to exercise its right of first
refusal, notice of such election (an "ELECTION NOTICE") shall be given
to the other party within sixty (60) days following the date on which
the Office Notice was given. The closing of the purchase and sale
transaction shall take place on the sixty (60th) day after expiration
of the initial sixty day period. At the closing, the Transferring
Party shall sell, and the Non-Transferring Party or Parties shall
purchase, the Offered Interest at the price and upon the terms and
conditions set forth in the Offer Notice. If the offer price is in
other than cash, the Non Transferring Party may elect to pay the
consideration in fair market value in cash.
(c) If rights of first refusal are not timely exercised with respect to
the entire Offered Interest, or are waived, the Transferring Party may
thereafter dispose of the Offered Interest at a price equal to or
greater, and upon terms and conditions equal to or more favorable to
the Transferring Party, than those set forth in the Offer Notice.
However, if the Offered Interest is not so disposed of within ninety
(90) days after the date on which the Offer Notice was given, or if
the Transferring Party elects to dispose of the Offered Interest at a
lower price, or upon terms and conditions less favorable to the
Transferring Party, than those set forth in the Offer Notice, then
this Section 6 shall again become applicable to the Offered Interest.
(d) Notwithstanding anything to the contrary in this Section 6, as a
condition precedent to any sale, assignment or other disposition of an
equity interest in JVC, in whole or in part, the intended transferee
of such interest shall become a party to this Agreement, and shall
give the representations and warranties contained herein and be
subject to all obligations herein including section 7. Additionally,
under no circumstances can any interest be transferred to a Direct or
Indirect Competitor of Sagent except as provided in Section 7.4.
(e) If the Transferring Party sells, assigns, pledges or otherwise
disposes of any interest in JVC, whether in whole or in part, in
violation of this Section 6, such disposition shall be null and void
ab initio. Each party acknowledges that the restrictions on
transferability set forth in this Section are of unique value to the
other parties hereto, and that the payment of monetary damages could
not
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<PAGE> 8
adequately compensate the other parties for any breach of the
obligations set forth in this Section. Accordingly, the rights of the
parties set forth herein shall be specifically enforceable in
accordance with their terms.
(f) Nothing herein shall limit Sagent's Buy-Out Option under Article 7.
6.3 PUBLIC DISCLOSURE. No party shall make any public disclosure
regarding confidential terms of this venture without the prior written
consent of the other parties hereto, except as required by law,
including the requirement of the United States Securities and Exchange
Commission. Confidential terms shall include all of the terms and
conditions of this Agreement, however the business relationship
between the parties and JVC necessary to carry out distribution of
products and other obligations under the Distribution and Trade mark
Agreement shall not be confidential.
6.4 CONFIDENTIALITY. Each party shall keep confidential all information
and documents received from the other parties in connection with the
transactions contemplated hereby, and shall not disclose the same to
any third party without the prior written consent of the party that
might be affected thereby. The limitations set forth in this Section
shall not apply to (a) information that is or becomes generally
available to the public other than as a result of a disclosure by any
person in breach of this Agreement, (b) information already in a
party's possession without restriction on disclosure, (c) information
that comes into a party's possession from a third party without
restriction on disclosure, other than through a breach of an agreement
with the original disclosing party, and (d) information the disclosure
of which is compelled by force of law.
6.5 NAME CHANGE OF JVC. In accordance with Sections 13.3 and 13.6 of the
Exclusive Software Distribution Agreement executed as of April 8, 1998
between Sagent and JVC, Investor as shareholder of JVC shall promptly
pass the resolution required to effect the name change and shall use
its best efforts to effect the legal name change of JVC.
ARTICLE 7 BUY OUT
7.1 In the event that Sagent is sold, (the is, a controlling interest is
sold to another firm that expects to operate Sagent rather than an
investment firm) by written notice the Investor can require Sagent to
purchase JVC at the Formula Price determined pursuant to section 7.3
herein within sixty (60) days following completion of the sale of
Sagent. Sagent may elect to purchase JVC as further described in
Section 7.2. The sale price shall be paid in cash or a combination of
cash and stock of Sagent, if stock is acceptable to Investor.
7.2 At any time, but not earlier than eight (8) months after the
incorporation of JVC, Sagent may elect to purchase JVC at the Formula
Price determined below in cash, or a combination of cash and stock by
giving written notice to Investor. If Sagent elects to purchase JVC
in exchange for stock, Investor may decide to have these shares
directly transferred to its individual partners.
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7.2.1 If Sagent is privately held, the value of the shares issued in
connection with any stock purchase shall be at the value declared by
an independent party knowledgeable in business valuation acceptable to
both parties as the fair market value on the date Sagent provides
notice of its desire to purchase JVC. Sagent and the Investor shall
share equally in the cost of the valuation. If Sagent is a publicly
reporting company, the share value shall be the average closing sales
price (or closing bid, if no sales are reported) of Sagent common
stock for the three (3) business days prior as well as three (3)
business days following the date on which written notice is provided
by Sagent for purchase of JVC.
7.2.2 In the case an SEC rule 144 transaction is applicable with respect to
the shares, Sagent shall fully support Investor's/the Partners'
efforts in this transaction.
7.3 FORMULA PRICE:
7.3.1 In the event that the proposed Buy-out Date is on or before the last
day of the first 12-month period of operation, the Purchase Price
shall be equal to the amount of [*] dollars (US $[*]).
In the event that the proposed Buy-out Date is after the last day of
the first 12-month period and on or before the last day of the second
12-month period of operation, the Purchase Price shall be equal to the
higher amount of [*] dollars (US $[*]) or the Gross Product Revenues
multiplied by the applicable monthly Revenue Multiple, less (i)
accounts receivable due greater than sixty (60) days after the Buy-out
Date and (ii) lease commitments or contingent liabilities, with the
exception of office space lease commitments, extending more than six
(6) months past the Buy-out Date. Accounts receivable that are
recovered within 120 days after the Buy-Out Date shall be added back
to the Purchase Price. Gross Product Revenues shall equal the
aggregate licensing, sale revenues from the distribution of Sagent
products recognized by Company during the twelve-month period
immediately preceding the Buy-out Date in accordance with the revenue
recognition policy of Sagent then in effect. The month during which
Sagent gives notice of the desired acquisition shall be accounted for
in the buy-out formula.
In the event that the proposed Buy-out Date is after the last day of
the second 12-month period of operation, the Purchase Price shall
equal the Gross Product Revenues multiplied by the applicable monthly
Revenue multiple.
7.3.2 REVENUE MULTIPLE: The Revenue Multiple in the first month of the
second 12-month period shall be equal to [*] ([*]) and shall be
increased each month by [*] until it reaches [*] ([*]).
7.3.3 Investor shall have the right to withdraw dividends after the third
year without change to the buyout price, provided that such dividends
do not exceed the amount invested in common equity pursuant to Section
2.2 (withdrawals
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<PAGE> 10
exceeding this amount to be deducted from the buyout price). JVC's
retained earnings for the current or prior fiscal years shall be
included in the buy-out price and in that respect. Investor waives its
rights to revert to Article 102 BGB (German Civil Code). Exhibit B
attached hereto provides an example of the buyout amounts based on the
projections set out in Exhibit A.
7.3.4. During the thirty (30) day period following the notice of
acquisition, Sagent shall have the right to audit the buy-out price
and operations of JVC prior to closing of the buy-out. The audit may
be conducted by Sagent or a third party accounting firm hired by
Sagent. The Investor shall correct all errors noted by Sagent through
recalculation of the buy-out price. In the event there are material
errors or accounting deficiencies, Sagent may delay the closing
pending rectification of the material problems noted.
7.3.5. Notwithstanding the foregoing, the purchase price to be paid by
Sagent shall be reduced by any liabilities or obligations to which
the JVC is subject at the time of the buyout that are not necessary
to fulfill its intended business objectives.
7.3.6. The amount to be paid by Sagent shall be calculated (and if
applicable, paid) in US dollars. For the purpose of calculating the
buy-out price, the monthly revenues of the JVC shall be converted at
the respective average monthly exchange rates of German Marks/Euros
to US dollars in accordance with US GAAP.
7.3.7. Subject to 7.3.4, Sagent shall promptly complete the acquisition
following resolution of all audit or other issues disclosed, but in
no event shall the acquisition be completed later than ninety (90)
days after Sagent's written notice to buy JVC.
7.4 Intentionally left blank
7.5 REGISTRATION RIGHTS. If Sagent issues shares of common stock or
securities convertible into common stock to Investor in the future
pursuant to this Agreement, Sagent shall give Investor mutually
agreed-upon registration rights related to that common stock.
7.6 The rights to be granted to Sagent in this Section 7 can be exercised
also by a nominee named by Sagent, whereby such nominee shall be a
Sagent controlled company.
ARTICLE 8 GOVERNING LAW AND DISPUTE RESOLUTION
8.1 GOVERNING LAW. The rights and obligations of the parties under this
Agreement shall not be governed by the U.N. Convention on Contracts
for the International Sales of Goods; rather such rights and
obligations shall be governed and construed under the laws of the
State of California, without reference to conflict of laws and
principles. The jurisdiction of the courts of Germany is expressly
excluded to the maximum extent permitted by law.
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8.2 ARBITRATION. In the event of any dispute, controversy or claim
arising out of or relating to this Agreement, or to the breach or
termination hereof (a "DISPUTE"), the parties agree to resolve the
same as follows:
(a) The parties to the Dispute shall initially attempt to resolve it
through consultations and negotiations.
(b) If the Dispute has not been resolved amicably within thirty (30) days
after any party provides notice thereof, unless the parties agree
otherwise, the Dispute shall be resolved by final and binding
arbitration in Zurich, Switzerland, in accordance with the
Arbitration Rules of the United Nations Commission on International
Trade Law ("UNCITRAL"), as in effect on the date of this Agreement.
The language to be used in the arbitration proceeding shall be
English. The International Chamber of Commerce shall serve as the
appointing authority. The arbitrators shall render a written award
stating the reasons for the decision. An arbitration award or
decision may be entered by any court of competent jurisdiction, or
application may be made to such a court for judicial acceptance of
the award or decision and any appropriate order, including
enforcement.
(c) Each of the parties hereto consents to the submission of any Dispute
for settlement by final and binding arbitration in accordance with
paragraph (b) above. Such consent shall satisfy the requirements for
an "agreement in writing" pursuant to Article II of the United
Nations Convention on the Recognition and Enforcement of Foreign
Arbitration Awards, done at New York on June 10, 1958.
(d) Each of the parties hereby undertakes to carry out without delay the
provisions of any arbitration award or decision.
ARTICLE 9 TERM AND TERMINATION
9.1 TERM. This Agreement runs concurrently with, and will terminate
automatically with the termination of the Distribution Agreement,
unless terminated earlier under the provisions of this Section 9.
9.2 RESIGNATION OF SAGENT VISITING DIRECTOR. After three years JVC may
request the resignation of the Sagent nominated Visiting Director
from JVC's board provided that Sagent continues to be promptly
supplied with all relevant sales and distribution information related
to the continuing distribution of Sagent products and services by JVC.
9.3 INVESTOR'S RIGHT TO TERMINATE FOR CAUSE. The Investor shall have the
right to terminate the Agreement (i) if following investment totaling
DM 1,500,000 in JVC, it shall not have created a self-sustaining
entity, which cannot operate on its own without additional
contribution of outside funds, and it (and or Sagent) is not willing
to advance additional funds to continue operations or (ii) other
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material default of a provision of this Agreement by Sagent, however
if the default is such that it reasonably may be cured within 60 days
and Sagent restores its performance, the Agreement shall continue.
9.4.1 EFFECT OF TERMINATION PURSUANT TO SECTION 9.3: Following termination
under section 9.3 (which shall also act to terminate the Distribution
Agreement), the Investor shall have the right to liquidate JVC,
however if it does so, it shall allow Sagent to hire JVC employees
directly or through a third party to provide support to existing
customers.
9.4.2 In no event will the Investor be required to maintain the corporate
existence of JVC following termination.
9.5 TERMINATION FOR INSOLVENCY. Either party may terminate the Agreement
in the event of JVC's or Sagent's dissolution and liquidation or
inability financially to reasonably complete its responsibilities
under the Distribution Agreement.
9.6 SALE OF EQUITY INTEREST IN JVC. These may be an allowed sale of JVC
that will not invalidate this agreement, if Sagent has passed on its
right of first refusal. Either party may terminate this Agreement in
the event the other party ceases to hold a direct or indirect equity
interest in the JVC.
9.7 Intentionally left blank.
9.8 SURVIVAL. Notwithstanding anything to the contrary in this Agreement,
the provisions of Sections 2.4(a), 3.3, 5, 6.3, 6.4, 7.5, 8, 9, and 10
shall remain in full force and effect upon termination of this
Agreement.
ARTICLE 10 MISCELLANEOUS
10.1 NOTICES. Any and all notices and other communications that are
required or permitted to be given pursuant to this Agreement shall be
in writing, and shall be deemed given (a) upon personal delivery, or
(b) upon the sender's receipt of electronic confirmation of
transmission, if sent by telex or facsimile, or (c) upon 2 business
days after delivery to a recognized courier, fees prepaid. The
parties designate the following addresses for the foregoing legal
effects:
To Investor:
Isar-Vermogensverwaltung GbR mbH
c/o Buro Klaus Luft
Gut Keferloh 1B
D - 85630 Grasbrunn/Munich, Germany
Attention: Petra Beyer, Managing Partner
Facsimile number: (49-89) 464483
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To Sagent:
Sagent Technology, Inc.
2225 East Bayshore Road, Suite 100
Palo Alto, CA 94303
USA
Attention: W. Virginia Walker, Chief Financial Officer
Facsimile number: (650) 493-1290
The parties may amend the above-mentioned data by notice to all other
parties, as provided in this Section.
10.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties contained in this Agreement or in any
certificate delivered pursuant hereto shall survive the termination of
this Agreement and shall remain in full force and effect.
10.3 SPECIAL, INDIRECT, PUNITIVE AND CONSEQUENTIAL DAMAGES. No party shall
be liable to any other party in contract, tort or otherwise (including
negligence, warranty or strict liability) for any incidental, special,
indirect, punitive or consequential damages arising out of or in
connection with this Agreement or the transactions contemplated
hereby.
10.4 BINDING EFFECT; NONASSIGNABILITY. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, and their
respective successors and assigns; provided, however, that neither
this Agreement, nor any rights or obligations hereunder, may be
assigned, delegated or otherwise conveyed by any party hereto without
the prior written consent of the other parties. The sale of Sagent
shall not be considered a violation of this section. The sale of JVC
following Sagent's passing on the right of first refusal shall not be
considered a violation of this section.
10.5 NO THIRD-PARTY BENEFICIARIES. This Agreement is for the sole benefit
of, and may be enforced only by, the parties hereto. Neither the JVC
nor any other third party claiming through either of them or otherwise
shall have standing to enforce any provision of this Agreement.
10.6 SEVERABILITY. If one of the provisions of this Agreement should be,
or become invalid, or if this Agreement should have an omission, this
shall not affect the validity of the remaining provisions. In such an
event, the parties are obliged to assist in the incorporation of
provisions which form the closest possible economic equivalent to that
which the parties would have agreed if they had been aware of the
invalidity or if they had considered the point.
10.7 AMENDMENT. No modification of this Agreement shall be binding unless
made in writing and duly executed by the parties.
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10.8 WAIVER. The waiver by any party of a breach of any provision of this
Agreement shall not be deemed a continuing waiver or a waiver of any
subsequent breach, whether of the same or any other provision hereof.
10.9 RELATIONSHIP OF PARTIES. The relationship of the parties under this
Agreement shall be solely that of independent contractors. The
parties retain complete control over and responsibility for their own
respective operations and employees. Nothing contained in this
Agreement shall be construed to make any party a partner, agent,
employee or other representative of any other party, or to otherwise
authorize any party to represent or bind any other party.
10.10 COUNTERPARTS. This Agreement may be executed by one or more of the
parties hereto in any number of separate counterparts, each of which
when so executed shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and
the same instrument.
10.11 ENTIRE AGREEMENT. This Agreement, including its Exhibits, which form
an integral part hereof, constitutes the entire agreement of the
parties with respect to the subject matter hereof, and supersedes any
and all prior negotiations, correspondence, understandings and
agreements relating to the subject matter hereof, including without
limitation the Letter of Intent signed by the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.
"SAGENT"
SAGENT TECHNOLOGY, INC.
By: /s/ THOMAS M. LOUNIBOS
-----------------------
Name: Thomas M. Lounibos
---------------------
Title: EVP OF SALES
---------------------
Date: April 8, 1998
---------------------
"INVESTOR"
ISAR-VERMOGENSVERWALTUNG GBR mbH
By: /s/ PETRA BEYER
-----------------------
Name: Petra Beyer
---------------------
Title: Managing Partner
--------------------
Date: April 8, 1998
---------------------
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EXHIBIT A
SAGENT GMBH - BUSINESS PROJECTIONS
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EXHIBIT B
BUY-OUT EXAMPLE
Date of written Notice: June 10, 1999
12-month Trailing Revenue: US$ [*]
(-- July 1998 - including June 1999)
Monthly Revenue Multiplier: [*]
Buy-out Price: US$ [*]
Minus Accounts Receivable
due greater than 60 days: US$ [*]
Minus contingent liabilities or lease
commitments extending more than
6 months past the Buy-out Date: US$ 0
Plus recovered Accounts Receivable
within 120 days after the Buy-out Date: US$ [*]
TOTAL BUY-OUT PRICE: US$ [*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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EXHIBIT C
SHAREHOLDERS' AGREEMENT
(ARTICLES OF INCORPORATION)
SECTION 1
COMPANY NAME AND REGISTERED OFFICE
(1) The name of the company shall be Magnolia II Vermogensverwaltung GmbH.
(2) The company's registered office shall be in Grasbrunn.
SECTION 2
PURPOSE OF THE ENTERPRISE
(1) The purpose of the enterprise is to produce and distribute software of all
kinds; also to offer consulting and technical services such as installation,
maintenance, and training. Further it manages and administers its own assets.
(2) Within these limits the company is authorized to perform all business
activities and steps that appear necessary or expedient to achieve the purpose
of the company, such as creating branch offices domestically and abroad.
(3) In particular, the company may acquire or obtain participating interests
in enterprises with the same or similar purposes.
SECTION 3
FISCAL YEAR AND DURATION
(1) The company existence is not limited to a certain length of time.
(2) The company's fiscal year shall coincide with the calendar year.
SECTION 4
SHARE CAPITAL AND COMPANY SHARES
(1) The company's share capital is DM 50,000 (fifty thousand German marks).
(2) Fully paid shares of a shareholder may be consolidated into a uniform
share through resolution of the shareholders.
(3) It is hereby precluded that further payments above and beyond the initial
capital contribution should be required.
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SECTION 5
REPRESENTATION
(1) The company shall have one or more general manager (Geschaftsfuhrer). If
only one general manager has been appointed, then he shall represent the company
alone. If more than one general manager has been appointed, then the company
shall be jointly represented by two general managers or a general manager and an
executive vested with a power of commercial representation under German law
(Prokura).
(2) Any general manager may be authorized through a shareholders' resolution to
represent the company without restriction when performing legal transactions
with himself in his own name or as representative of a third party.
(3) Any general manager may be empowered through a shareholders' resolution to
represent the company alone in case several general managers have been
appointed.
SECTION 6
RESOLUTIONS OF THE SHAREHOLDERS' MEETING
(1) Resolutions of the shareholders' meeting shall be adopted by simple
majority unless a larger majority or unanimity is required by law or these
articles of incorporation.
(2) Each DM 100 (one hundred German marks) in a share give one vote.
(3) Resolutions of the shareholders' meeting may be challenged through legal
action only within a period of one month after being adopted.
(4) Shareholders' resolutions may also be adopted in writing or by telephone
or telefax or electronic mail without holding a shareholders' meeting unless
another method is required by law and insofar as all shareholders approve of
the method. Resolutions adopted by telephone must be recorded in writing
immediately.
(5) A shareholder shall also be entitled to vote in matters concerning him
directly. This does not apply to resolutions concerning formal approval of his
actions, release from a liability, initiation or settlement of a legal dispute
against him, calling in his company share, or transfer of same to the
shareholders or to third parties.
SECTION 7
ACTIONS REQUIRING APPROVAL
Internally, the general managers must obtain the approval of the shareholders
for legal transactions designated as requiring approval by the shareholders'
meeting.
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SECTION 8
ADVISORY BOARD
(1) The shareholders' meeting may resolve to create an advisory board. The
number of its members should always be uneven. Members of the advisory board
may also be persons who are not shareholders.
(2) The advisory board shall be responsible for matters assigned to it by the
shareholders' meeting. It shall adopt resolutions by simple majority unless the
rules of procedure require another method in an individual instance.
SECTION 9
CALLING IN COMPANY SHARES
It is permissible to call in shares of the company with the consent of the
affected shareholder.
SECTION 10
PROHIBITION FROM COMPETITION
The shareholders are not subject to any competitive clause. General Managers
can be released of any competitive clause through a shareholders' resolution.
SECTION 11
NOTICES
To the extent public notices are required by law, they shall appear in the
Bundesanzeigar [Federal Gazette].
SECTION 12
MISCELLANEOUS PROVISIONS
(1) The provisions of the law regarding companies with limited liability shall
apply as supplements to the present Shareholders' Agreement (Articles of
Incorporation).
(2) Should any provision of this agreement be or become unenforceable or
should the agreement contain a loophole, the legal validity of the remaining
provisions shall remain unaffected thereby. In such cases the shareholders
shall be obligated to replace the invalid arrangement with a valid one
approximating as closely as possible the intended purpose of the invalid
provision. The same applies by analogy if this agreement should contain
loopholes.
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<PAGE> 20
EXHIBIT D
RULES OF PROCEDURE FOR THE ADVISORY BOARD
SECTION 1. COMPOSITION OF THE ADVISORY BOARD AND
SELECTION OF ITS MEMBERS
(1)
The company shall have an Advisory Board consisting of three members.
(2)
Members of the Advisory Board shall be appointed through resolution of the
shareholders, one visiting member being nominated by Sagent and the other two
members being nominated from among the ISAR shareholders. Directors and
managerial employees or executives of the company or enterprises dependent on
the company are ineligible for membership on the Advisory Board.
(3)
The office of an Advisory Board member shall end upon closure of the
shareholders' meeting that resolves on the approval of actions for the second
fiscal year following the appointment, unless a shorter period of office is set
at the time of such appointment. The fiscal year during which the appointment
was made is not counted.
(4)
Advisory Board members may be dismissed without statement of cause before
expiration of their term of office through a shareholders' resolution. Any
Advisory Board member may resign from office without statement of cause before
expiration of his term of office through a written statement to the company. To
do so, the member must notify the company in writing three months in advance.
(5)
If an Advisory Board member leaves the Advisory Board prior to expiration of
his term of office, then a new member must be elected to the Advisory Board
without delay. Substitute appointments are for the retired member's remaining
term of office.
SECTION 2. CHAIRMANSHIP
(1)
The Advisory Board shall have a chairman appointed through resolution of the
shareholders.
(2)
The chairman represents the Advisory Board for issuing and receiving statements
and declarations.
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SECTION 3. RESPONSIBILITIES OF THE ADVISORY BOARD
(1)
As an institution of the company the Advisory Board shall execute the
responsibilities given to it through the Shareholders' Agreement, by the present
Rules of Procedure for the Advisory Board, and through resolution of the
shareholders. In particular, these include monitoring and advising the company's
management and approval of the annual financial statements.
(2)
In accordance with section 8 of the Shareholders' Agreement, the Advisory Board
is empowered to appoint and dismiss general managers and if appropriate to
adopt rules of procedure for the company's management. Appointments,
dismissals, and adoption of rules of procedure shall require the approval of
two-thirds of the Advisory Board members.
(3)
To perform his responsibilities, the chairman of the Advisory Board may at any
time require the general managers to report to the Advisory Board regarding the
company's affairs, in particular regarding the progress of business, the status
as to assets and liabilities, profitability, and liquidity, as well as the
intended business policies and other basic matters of future management of the
company.
(4)
The Advisory Board may inspect and examine the company's records and
correspondence; it may appoint individual members or experts to do so.
SECTION 4. MEETINGS OF THE ADVISORY BOARD
(1)
Meetings of the Advisory Board are to be held as required by the needs of the
company or when called for by the chairman or a majority of the Advisory Board
members or the company's management. A meeting should take place during each
quarter. The Advisory Board must convene at least twice during the fiscal year.
(2)
The general managers generally attend meetings of the Advisory Board. In cases
regarding personal matters, the Board may exclude the general managers.
(3)
Meetings of the Advisory Board are called by the chairman or a general manager
designated by the chairman.
(4)
Meetings of the Advisory Board shall be called in writing, by telefax,
telegram, telex or electronic mail with two weeks' notice. Shorter notice is
permitted only with the consent of all members. The agenda must be announced in
the invitation.
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<PAGE> 22
(5)
The Advisory Board shall meet at the location of company's registered office.
The chairman may also call a meeting elsewhere in agreement with the company's
management. Meetings by telephone are also permitted if no member objects.
(6)
The chairman shall conduct meetings of the Advisory Board. A record of meetings
shall be made. It must be signed and kept by the chairman, and copies sent to
the other Advisory Board members.
SECTION 5. RESOLUTIONS
(1)
The Advisory Board shall make decisions through resolution. A quorum shall be
present only if all members take part in the resolution.
(2)
The Advisory Board adopts resolutions with a majority of the votes cast. In
case of a tie the resolution is considered to have been rejected. Consent of
the Visiting Board member nominated by Sagent shall be required for the
following resolutions in addition to the actions listed in the Annex entitled
"Actions requiring approval":
o Payments of any kind whatsoever to the shareholders
o Appointment and dismissal of general managers
(3)
Resolutions may be adopted in writing, by telex, telegram, telefax, electronic
mail or by telephone if no member objects.
SECTION 6. TRANSACTIONS REQUIRING APPROVAL
The affairs of management going beyond the normal business operations of the
company and requiring the approval of the Advisory Board in accordance with
sections 7 and 8, paragraph 2, of the Shareholders' Agreement particularly
include the activities listed in the Annex entitled "Actions requiring
approval".
Such approval shall require a two-thirds majority of Advisory Board members.
The list of actions requiring approval may be changed by resolution of the
shareholders.
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<PAGE> 23
SECTION 7. REMUNERATION OF THE ADVISORY BOARD
(1) The members of the Advisory Board shall receive no remuneration for their
activities. The shareholders' meeting may adopt different arrangements.
(2) Members of the Advisory Board may not assert reimbursement claims for their
expenses. The shareholders may make an exception if a member does not perform an
active function either at Sagent or at the company or with the shareholder.
SECTION 8. FINAL PROVISIONS
(1) The rights of the Advisory Board shall devolve upon the shareholders'
meeting in case the Advisory Board should be either not available or not able
to function for some reason.
(2) The provisions governing supervisory boards of stock corporations (section
52, German Law on Limited-Liability Companies) are not applicable.
(3) These rules of procedure shall enter into force and effect today.
City, date
Signatures
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<PAGE> 24
EXHIBIT E
Annex to JVC's Rules of Procedure for the Advisory Board
ACTIONS REQUIRING APPROVAL
I. ACTIONS OF JVC'S MANAGEMENT WHICH REQUIRE THE PRIOR APPROVAL OF
SAGENT'S VISITING BOARD MEMBER OF JVC'S ADVISORY BOARD
a) Moving the registered office of and selling the company in to or in
part.
b) Creating and discontinuing branch offices.
c) Establishing, acquiring, and selling other companies or participating
interests in other companies.
d) Starting and discontinuing a line of business.
e) Acquiring, selling, encumbering real estate property and equivalent
rights, and associated transactions creating an obligation.
f) Undertaking retirement benefit obligations.
g) Granting employees an interest in the assets of the company.
h) Rules regarding the granting of employee interests in profits or sales.
i) Mass dismissals, i.e. changing the number of employees by more than ten
percent within one month or more than 1 person per month whatever is
larger.
j) Providing guarantees and undertaking obligations on bills of exchange,
as well as taking loans exceeding DM 30,000 individually, excepting
conventional customer and supplier credits and excepting loans defined
in paragraph w) of the Actions requiring Approval. Purchasing or
selling securities (including derivative instruments) of any kind
whatsoever; carrying out foreign-exchange transactions, excepting
conventional payment transactions with customers, suppliers, and
associated or related companies, moreover excepting cash management in
the form of short-term money-market instruments.
k) Concluding, canceling, or modifying agreements with persons related by
blood or marriage or close friendship (e.g. spouse) to a partner or
general manager.
l) Business with interested parties.
m) Sale of additional stock.
n) Liquidation of the company.
o) Approval of the annual business plan.
p) Approval of General Manager.
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<PAGE> 25
II. ACTIONS OF JVC'S MANAGEMENT WHICH REQUIRE THE PRIOR APPROVAL OF THE
ADVISORY BOARD BY MAJORITY VOTE
q) Investment and operations maintenance measures exceeding DM 15,000
individually, as well as leasing objects with individual purchase
prices exceeding DM 15,000.
r) Concluding loan or rental agreements lasting more than one year or
involving a monthly liability of more than DM 5,000.
s) Hiring, promoting, and dismissing management personnel (apart from
General Manager).
t) Granting security of any kind (such as pledges, transfers of ownership
by way of security) and approving loans outside conventional business
transactions, as well as assuming third-party liabilities. Exceptions
are loans to employees of the company not exceeding DM 10,000
individually or a total of DM 50,000 in the fiscal year.
u) Concluding, modifying, and terminating license and cooperation
agreements.
v) Initiating litigation for disputed values exceeding DM 50,000
individually.
w) Granting and revoking powers of commercial representation or other
commercial authority.
x) Issuance of debt to finance accounts receivables up to eighty per cent
(80%) of total accounts receivables and fixed assets up to one hundred
per cent (100%) of total fixed assets (e.g. leasing contracts).
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<PAGE> 26
ADDITIONAL AGREEMENTS ACCOMPANYING THE JOINT VENTURE AGREEMENT AND THE
EXCLUSIVE SOFTWARE DISTRIBUTION AGREEMENT
1. In order to accelerate and facilitate the start-up of Sagent Germany,
the company Magnolia II Vermogensverwaltung GmbH will serve as Joint
Venture Company. ISAR-Vermogensverwaltung GbR mbH incorporated Magnolia
II Vermogensverwaltung GmbH in Munich, Germany on March 26, 1997 and
since its date of incorporation Magnolia II has not been active.
As soon as the required documentation has been received from Sagent,
Inc., the name of Magnolia II Vermogensverwaltung GmbH will be changed
to Sagent Technology GmbH.
2. Concerning Article 3.2. of the Exclusive Software Distribution
Agreement, the 30-day period for the development of a business plan
shall start on May 1, 1998 since the General Manager of Sagent Germany
will not join the company before this date.
3. The Trade Mark License Agreement has been signed under the assumption
that Sagent will promptly complete the respective exhibits.
4. All Agreements were signed under the assumption that a previously
discussed purchase of Sagent stock for key employees of Sagent Germany
and ISAR Partnership will be approved by the Board of Sagent, Inc.
Date: April 8, 1998
/s/ TOM LOUNIBOS
- --------------------
Tom Lounibos
Vice President of Sales, Sagent Technology, Inc.
/s/ PETRA BEYER
- --------------------
Petra Beyer
Managing Partner, ISAR-Vermogensverwaltung GbR mbH
/s/ INES BERGHOF
- --------------------
Ines Berghof
General Manager, Magnolia II Vermogensverwaltung GmbH
<PAGE> 27
EXCLUSIVE SOFTWARE DISTRIBUTION AGREEMENT
This Exclusive Software Distribution Agreement (the "AGREEMENT") is entered into
effective as of April 8, 1998 (the "EFFECTIVE DATE"), between Sagent Technology,
Inc., a California corporation with principal offices at 2225 East Bayshore
Road, Suite 100, Pala Alto, CA 94303 ("SAGENT") and Magnolia II
Vermogensverwaltung GmbH with offices at Gut Keferloh IB, D-85630
Grasbrunn/Munich, Germany ("DISTRIBUTOR").
RECITALS
A. Sagent is the owner or authorized licensor of the Software described
in Exhibit A hereto (as it may be amended in accordance with this
Agreement).
B. Distributor is a company formed concurrently with the signing of this
agreement that will hire sales, support and managerial personnel for
the purposes of distribution of Sagent Software products and provision
of Sagent services within the Territory.
C. The Parties agree to have Distributor distribute the Sagent product and
provide the Sagent services in the Territory and Distributor will
manage Sergeant's Existing Distributors in the Territory to the benefit
of the Existing Distributors, Distributor and of Sagent.
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES AGREE AS
FOLLOWS:
1. DEFINITIONS.
1.1. "ANNIVERSARY DATE" shall mean the day of the month in which the
Software was shipped to an End-User, VAR or Reseller by Distributor and
the same day in any subsequent year.
1.2. "APPLICATION" shall mean software programs which are deployed by a
Licensee and which consist of one of Sagent's software components.
1.3. "DOCUMENTATION" shall mean any manual(s) shipped by Sagent with the
Software and manuals made available through the Internet and on other
electronic media.
1.4. "END USER" shall mean any third party which licenses Software in order
to fulfill its own data processing needs.
1.5. "END USER LICENSE" shall mean a standard evaluation or run time license
agreement, as the case may be, approved and accepted by Sagent in
accordance with this Agreement, pursuant to which End Users are granted
the right to utilize Software on terms substantially similar to those
which are from time to time included on the then current Sagent
standard End-User License Agreements which are set out in Exhibit G,
and provided that the language relating to the Grant of License and the
related Definitions shall provide no more rights and are expressed as
closely as reasonably possible in the applicable local language as that
used by Sagent in the relevant agreement.
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1.6 Intentionally left blank.
1.7 "JOINT VENTURE AGREEMENT" shall mean the Agreement executed between
Sagent and ISAR-Vermogensverwaltung GbR mbH on April 8, 1998.
1.8.1 "LICENSE(S)" shall mean an End-User License, a Reseller Agreement
or a VAR License, as applicable.
1.8.2 "LICENSEE" shall mean any party which executes a License with
Distributor.
1.9 "MAINTENANCE" shall mean telephone consultation during Sagent's
normal business hours, bug fixes, error corrections and work-arounds,
as well as updates and new releases, if any, which are not separately
priced, that Sagent makes to the Software.
1.10 "MARKETING" shall mean all sales promotion activities by Distributor,
and conducted by or for Distributor in the Territory.
1.11 "RESELLER" shall mean any reseller which markets Software for resale
provided that this definition does not include VAR.
1.12 "RESELLER AGREEMENT" shall mean Distributor's Reseller agreements
related to the Software. Sagent shall approve the standard form of
Distributor's Reseller Agreement prior to execution by any Reseller.
1.13 "REVENUE" shall mean revenue regularly recognized, net of discounts,
and returns. The term "Revenue" may apply to Sagent's Revenue or
Distributor's revenue as the context requires.
1.14 "SOFTWARE" shall mean Sagent's Software Modules set out in Exhibit A
hereto.
1.15 "STRATEGIC PLANS" shall include but shall not be limited to those
plans established by Distributor for the overall marketing
distribution and sales direction of the Software and services in the
Territory including but not limited to the provision of product
maintenance, consulting and training services.
1.16 "TERRITORY" shall mean those countries set out in Exhibit B of this
Agreement.
1.17 "VAR" shall mean a Value Added Reseller who has integrated or
embedded Sagent's product in its own product offering and who has
executed a VAR Agreement.
1.18 "VAR LICENSE" shall mean Distributor's Standard VAR Agreements which
contain terms substantially similar to those which are from time to
time included on the then current Sagent Standard VAR Agreements,
which are set out as Exhibit H hereto, and provided that the language
relating to the Grant of License and the related Definitions shall
provide no more rights and are expressed as closely as reasonably
possible in the applicable local language to those used by Sagent.
1.19 "WHOLLY OWNED COMPANY(IES)" shall mean those companies which are
controlled by Distributor and which are used by Distributor to fulfill
Distributor's obligations under this Agreement. "Controlled shall
mean that Distributor owns all of the shares of
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<PAGE> 29
such company (nominal share holdings which may be required by local
law are allowed) and is responsible for the day to day actions of the
company.
1.20 All references in this Agreement to the "sale" of or "selling" of
Software shall mean the sale of a license to use such Software. All
references in the Agreement to the "purchase" of or "purchasing" of
Software shall mean the purchase of a license to use such Software.
2. LICENSE TO DISTRIBUTOR.
2.1 GRANT OF EXCLUSIVE LICENSE FOR SOFTWARE. Subject to the terms and
conditions of this Agreement, Sagent hereby grants and Distributor
accepts a royalty-bearing, exclusive, nontransferable, nonassignable,
right and license to copy and distribute Licenses of the Software in
the Territory during term of this Agreement. Distributor shall not
engage in sales activities relating to the Software outside of the
Territory and shall not seek customers, or maintain a branch or
distribution facility outside of the Territory. Except as expressly
permitted herein, Distributor shall not copy, distribute or
sub-license the software except to the extent that such activities may
not be restricted under applicable law.
2.2 Intentionally left blank.
2.3 SUB LICENSE TO VAR. Subject to the terms and conditions of this
Agreement, Sagent hereby grants and Distributor accepts a
royalty-bearing, exclusive nontransferable, nonassignable right to sub
license the right to license and distribute Software through VAR
Agreements in the Territory provided that no VAR agreements granted
pursuant to this section shall remain in effect for a period longer
than five (5) years. Distributor may grant VAR Licenses which shall
be effective for longer periods provided that Sagent agrees in
writing. In any case the VAR agreements have to include maintenance
provisions from Sagent.
2.4 SUB LICENSE TO RESELLERS. Subject to the terms and conditions of this
Agreement, Sagent hereby grants and Distributor accepts a
royalty-bearing, exclusive nontransferable, nonassignable right to sub
license the right to license and distribute Software through Reseller
Agreements in the Territory. Resellers are explicitly not granted the
right to copy any of the Software. Distributor shall ensure that
Reseller shall not engage in active sales activities relating to the
Software outside of the Territory and shall not seek customers outside
of the Territory. Reseller Agreements granted pursuant to this
section shall remain in effect for a period no longer than five (5)
years from the Effective Date of this Agreement.
2.5 WHOLLY OWNED COMPANY. In order to fulfill its obligations under this
Agreement, Distributor may create Wholly Owned Companies within the
Territory provided that each Wholly Owned Company executes a written
agreement with Distributor acceptable to Sagent in its sole discretion
pursuant to which Wholly Owned Company is subject to the terms and
conditions of this Agreement and in no case shall a Wholly Owned
Company receive greater rights than are granted to Distributor
hereunder.
2.6 MAINTENANCE. Sagent shall grant to Distributor the right to sell
Software maintenance to end users of the Software provided that
Distributor shall provide maintenance
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<PAGE> 30
services in compliance with Sagent guidelines for providing
maintenance services. These guidelines are attached as Exhibit J
hereto. A royalty will be paid to Sagent for each maintenance
contract which should be sold on a prepaid annual basis to end users.
Sagent will supply product updates, new versions, new releases and 2nd
line technical support. Distributor will provide first line customer
support to all customers in the Territory and all product distribution
to End Users required under the maintenance contracts.
2.7 REPRODUCTION OF COPIES. Subject to the terms and conditions of the
Agreement, Distributor may reproduce at no charge a reasonable
quantity of Software to be used solely for Software marketing purposes
by Distributor, Wholly Owned Companies or Resellers ("MARKETING
COPIES") provided that Distributor shall keep accurate records of all
copies made and such record shall be made available to Sagent at
Sagent's reasonable request. Distributor, acting reasonably, will
determine the number of Marketing Copies. Distributor shall ensure
that Wholly Owned Companies and Resellers are not permitted to retain
possession of Marketing Copies except pursuant to a written License
agreement.
2.8 SAGENT'S RESERVED RIGHTS.
(a) CUSTOMERS OUTSIDE TERRITORY. Distributor shall not have exclusivity
and shall receive no payment with respect to Sagent's End User
customers from locations outside the Territory that deploy
Applications within the Territory or VARs from outside the Territory
that sell proprietary end user applications that include Sagent
Software in the Territory. Sagent shall supply to Distributor a list
of multinational companies with which Sagent conducts sales in the US
or elsewhere such list may be updated at any time. Distributor shall
have the right to solicit direct business from those divisions or
subsidiaries of such companies that are located in the Territory, and
the Split policy, as set out in section 5.4 of this Agreement will
apply to situations of joint efforts.
(b) CHANGES IN SOFTWARE. Sagent reserves the right, from time to time,
in its sole discretion and without liability to Distributor, to add to
or delete from Exhibit A the Software which Distributor is authorized
to distribute. Sagent agrees to give Distributor ninety (90) days
notice prior to deleting Software from Exhibit A. Sagent cannot
delete from Exhibit A a product, and shall also add any product which
is directly or indirectly sold somewhere else, including but not
limited to new Software releases.
(c) Notwithstanding anything to the contrary in this Agreement, Sagent
will not be treated as in breach of its exclusivity obligations in the
event of Software sales from outside the Territory to inside the
Territory, by multi-national companies, whose importation Sagent is
unable to preclude by reason of application of law or which any third
party is entitled to make.
2.9 TITLE. Distributor acquires only the rights expressly granted in
this Agreement. All rights not expressly granted herein are reserved
by Sagent. Nothing contained in this Agreement shall be construed as
conferring upon Distributor, by implication, estoppel or otherwise,
any license or other right except the license and rights expressly
granted herein. The licenses granted herein are granted solely to
Distributor, and not, by implication or otherwise, to any parent or
affiliate of Licensee. Except to the extent the
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<PAGE> 31
following activities may not be restricted under applicable law,
Distributor shall not create derivative works of, disassemble,
decompile or otherwise reverse-engineer the Software, and shall
prohibit its end users, Resellers and VARs from doing the same. All
right, title and interest in and to the Software and Documentation
delivered to Distributor, and all intellectual property rights therein
and related thereto, shall at all times remain the property of Sagent
or Sagent's licensors.
2.10 INDEPENDENT CONTRACTORS.
Distributor's relationship with Sagent during the terms of this
Agreement will be that of an independent contractor. Distributor will
not have, and will not represent that it has, any authority to bind
Sagent to assume or create any obligation, express or implied, to
enter into any agreements, or to make any warranties or
representation, on behalf of Sagent or in Sagent's name other than as
expressly authorized herein. Additionally, nothing in this Agreement
shall be construed to constitute the parties as partners, joint
venturers, co-owners or otherwise as participants in a joint or common
undertaking. The parties acknowledge and agree that neither
Distributor nor any Reseller is or will at any time be a "commercial
agent" within the meaning of EC Council Directive of 18 December 1986
on the coordination of the laws of the Member States relating to self
employed commercial agents of any related legislation.
3. DEVELOPMENT AND IMPLEMENTATION OF ANNUAL BUSINESS PLAN
3.1 Sagent and Distributor will develop an annual written business plan
that sets forth: (1) the initial hiring of Distributor personnel in
conformity with Exhibit C hereto; (2) selling and other revenue
activity by Distributor in conformity with Exhibit D hereto; (3)
marketing advertising and other promotion plans related to this
agreement; (4) establish German based consulting and training services
for the Software; (5) establish maintenance and technical support for
the Software in the Territory; and (6) all other activities of
Distributor contemplated by this Agreement.
3.2 The first annual business plan shall be finalized by the parties
within thirty (30) days of the Effective Date of this Agreement and
shall be incorporated herein as Exhibit D. The parties will meet
during Sagent's usual budget cycle to establish the annual business
plans for subsequent years. Each annual business plan will take into
account the projections set out in Exhibits C and D hereto.
Distributor shall use its best efforts to fully implement the plans.
3.3 The Advisory Board of Distributor must approve every annual business
plan before it is implemented as the requirement is set out in
specific detail in Exhibit E of the Joint Venture Agreement.
4. BUSINESS OPERATION OF DISTRIBUTOR
4.1 GENERAL MANAGER. The Distributor will provide a person acceptable to
Sagent as General Manager of Distributor.
4.2 AUTHORITY OF GENERAL MANAGER. The General Manager shall have the
authority to make all general business operation decisions related to
the day to day operations of Distributor.
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<PAGE> 32
4.3 STRATEGIC PLANS. During the first three (3) years of Distributor's
operation the General Manager of Distributor shall review with Sagent
all Strategic Plans of Distributor. Sagent shall assist with the
Strategic Plans through suggestion and coordination with programs used
in other parts of the world.
4.4 DISTRIBUTOR TO BE OPERATIONAL WITHIN 90 DAYS. The General Manager of
Distributor shall use his best efforts to have Distributor in full
operation (sales and support functions in place) within 90 days
following the Effective Date of this Agreement.
4.5 SAGENT'S DUTIES AFTER INCORPORATION OF DISTRIBUTOR.
Sagent shall:
(a) turn over to Distributor all sales leads applicable to the Territory
and thereafter all sales transactions for the Territory shall be
quoted and invoiced by Distributor (or applicable VARs) to the end
user customers, Resellers and VARs.
(b) Sagent shall notify all Resellers, VARs and end user customers and
prospects in the Territory of the changes in responsibility.
(c) Sagent shall supply Distributor with a list of all current
maintenance customers in the Territory. Distributor shall have the
right to renew maintenance for such customers in the Territory.
(d) Sagent and Distributor shall negotiate local support for such
customers in the Territory during the remaining period of the
maintenance contract or if negotiations fail, Sagent may provide
direct support.
4.6 USE OF INTERNATIONAL PRICE LIST. Sagent recommends that Distributor
uses Sagent's International Price List as its basis for pricing under
this Agreement for distribution of Software and Services pursuant to
this Agreement. However, Distributor shall be absolutely free in
defining its resale prices and shall in no event be bound to follow
Sagent's price recommendation. Prices may be translated into German
Marks/Euros from time to time. Sagent shall periodically consult with
the General Manager as to the form and content of the International
Price List.
4.7 DISCOUNTING AUTHORITY OF GENERAL MANAGER. While Distributor shall be
absolutely free in deciding on whether and which discounts to grant to
customers, Sagent recommends that the General Manager of Distributor
authorizes the same discounts from the list prices (as set forth in
Sagent's then current International List Prices) as are allowed to
Sagent's sales department in Sagent's nonstandard pricing terms and
conditions procedure (hereinafter the "Pricing Policy") which is
attached as Exhibit F for strategic software licensing customers.
4.8 ACCESS TO SAGENT PRICING COMMITTEE. The General Manager may consult
with Sagent's pricing committee regarding the justification of larger
discounts than are recommended under Section 4.7, and or other sales
accommodation and to end users, on a case by case basis. Sagent and
Distributor agree to use their best efforts to ensure all requests for
additional discounts or other pricing accommodations are promptly
attended to. In those instances in which General Manager (in good
faith) must act without first seeking discount advice under the
Pricing Policy, Sagent shall honor the
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<PAGE> 33
discount actually provided. However in no event will Sagent be
obligated to honor such discount (and the royalty payment shall be so
adjusted) if the discount provided exceeds two (2) times the allowable
discount expressed in the Pricing Policy.
4.9 HIRING BY DISTRIBUTOR. Distributor shall provide resumes of Key
Persons it plans to hire for review and approval by Sagent. If Sagent
shall not have objected within four (4) business days to any proposed
hire, then Sagent shall be deemed to have accepted the candidate. In
order that Sagent may assist in the hiring of all sales, technical and
consulting personnel, Distributor may at its option send candidates at
its expense to the US for interview. Any expenses of Sagent personnel
assisting the hiring process either in the US or Germany will be paid
by Sagent. For the purposes of this section the term "Key Persons"
shall mean all sales, systems engineer and marketing staff.
4.10 STAFFING LEVELS. Distributor and Sagent have agreed on a plan
regarding the appropriate staffing levels in order to sell and offer
the related services in the Territory. This staffing plan is set
out in Exhibit C hereto and should serve as a guideline only.
4.11 ASSESSMENT OF DISTRIBUTOR EMPLOYEES. Sagent shall participate in the
ongoing assessment of all employees of Distributor. Sagent may
provide written comment to the General Manager of Distributor
indicating that a particular employee(s) is/are not performing
employee's job in a manner acceptable to Sagent. Distributor shall
take active steps to remedy all such situations identified by Sagent
either through raising the employee's level of performance or
termination.
4.12 WRITTEN ASSESSMENTS. Distributor shall provide to the Sagent member
of Distributor's Advisory Board, on going written assessments at three
(3) month intervals for employees identified by Sagent as
non-performing.
4.13 SAGENT TO KEEP DISTRIBUTOR INFORMED OF PLANS. Sagent will keep the
Management of Distributor fully informed of developments within Sagent
and trends that it sees in the US and other world markets (including
Sagent business plan). Once Sagent is public, no information should
be provided to Distributor which could lead to insider knowledge.
4.14 ATTENDANCE AT SAGENT MEETINGS. Distributor's General Manager will be
allowed to participate in all major and relevant Sagent meetings
concerning trends, markets, products and strategy like a General
Manager of a Sagent subsidiary participating in Sagent's General
Manager meetings. Distributor may be excluded from any meeting if, in
the sole discretion of the President of Sagent it would be
inappropriate for a representative of Distributor to attend.
4.15 DISTRIBUTOR TO PROVIDE SALES AND MARKET INFORMATION TO SAGENT.
Distributor will promptly provide similar information to Sagent.
Samples of all marketing and advertising materials prepared by one
party will be promptly provided to the other with rights to use such
materials to further jointly the sales of Sagent products.
4.16 PROVISION OF QUARTERLY FINANCIAL REPORTS. Distributor will provide
Sagent a quarterly financial report of its operations including but
not limited to its balance sheet and income statement prepared in
accordance with generally accepted accounting principles (USA), and a
personnel roster by name, position held and location with new
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hires and termination's identified, and Distributor will keep its
books on a calendar-year basis.
4.17 PROVISION OF REVENUE PROCEDURES TO DISTRIBUTOR. Sagent will provide
to Distributor copies of its accounting and revenue recognition
procedures and Distributor will comply with these procedures to the
extent that it is able under German law. This provision also applies
to section 4.16 of this Agreement.
4.18 ANNUAL AUDIT OF DISTRIBUTOR. At its expense, Distributor will have
an annual audit by Coopers & Lybrand results of which will be promptly
supplied to Sagent.
4.19 PROVISION OF MONTHLY SALES REPORTS. Distributor shall also promptly
provide to Sagent monthly sales and a three month forecast of expected
orders, including identification of the top five revenue potential
projects, for Sagent products and services in a Sagent approved
format.
4.20 MARKET AND SALES STRATEGY. Distributor shall utilize the general
market and sales strategies used by Sagent. This strategy currently
has a focus on consumer goods industries, telecommunications and the
financial services industry, however the strategy may change from time
to time and is not an exclusive strategy.
4.21 COMPLIANCE WITH U.S. FOREIGN CORRUPT PRACTICES ACT. The Distributor
shall be managed so as to observe the following requirements in all
transactions: (a) No action shall be taken by or on behalf of the
Distributor which violates any applicable law or regulation of the
United States, or any country in the Territory; (b) no expenditure for
other than lawful purposes shall be made by or on behalf of the
Distributor; and (c) no payments shall be made and nothing of
value shall be given to government officials by the Distributor or any
of their respective agents, except such payments as are required by
law and made to such officials in other than their individual
capacities; or (d) otherwise taken any action that would constitute a
violation of the U.S. Foreign Corrupt Practices Act, 15 U.S.C. Section
78dd-1 et seq.
5. COMPENSATION.
5.1 (i) Royalties to Sagent shall be calculated based on amounts invoiced
to end users (exclusive of freight charges and any applicable sales
and consumption taxes (VAT)), and Royalties shall be adjusted for
credit invoices, using the following royalty rates:
Software Products [*]%
Maintenance fees [*]%
(ii) Royalties to Sagent resulting from Licenses sold through VARs and
Resellers in Territory shall amount to 40% of the then current
International Price List for Product Licenses. In case of special VAR
and Reseller deals where the General Manager uses the rules of Article
4.8. for pricing and discounting purposes, different royalties may be
negotiated with Sagent.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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<PAGE> 35
5.2 Compensation to Sagent shall not be due from Distributor for
evaluations limited to thirty (30) days or less or copies used for
marketing or demonstration purposes only.
5.3 Sagent reserves the right to change its International list prices
with ninety (90) days prior written notice to Distributor.
5.4 SPLITS - "VAR Deals" and deals as defined in 2.8(a) where both Sagent
and Distributor are directly involved under this Agreement are subject
to revenue or royalty splits as agreed to by the General Manager of
Distributor and Sagent's applicable Vice President responsible for
European Sales. If no agreement is made as provided above, then the
split will be resolved by the President of Sagent following
consultation with Distributor. Splits may be appropriate in instances
where Sagent and Distributor must each provide sales and marketing
support to a customer in order to finalize an agreement. Such an
agreement would be one, which is closed outside the Territory, but
Distributor is involved in the transaction in the territory.
5.5 NO COMPENSATION FROM OUTSIDE THE TERRITORY. Distributor will receive
no compensation with respect to VAR's from outside of the Territory
that market Applications in the Territory except that Sagent or
Distributor may contract with a VAR that (i) intends to market
globally and (ii) is a major factor in its industry. In such
instance, it is necessary and desirable that Sagent and Distributor
cooperate to facilitate the entry of the VAR into respective markets
and assist such VAR in its marketing efforts. In such instances,
either Sagent or Distributor may receive a portion of the royalty paid
by the VAR, or some other negotiated payment for the services provided
in the respective territory. The amount of royalty or fee shall be
negotiated as provided for in Section 5.4 "Splits".
5.6 PAYMENT. Distributor will pay royalties bi-monthly, by wire transfer
within seven (7) days following the 15th and the end of each month,
based on payments received during the month from customers, Resellers,
and VARs. Payments to Sagent shall be due and payable from Distributor
once Distributor has received payment from a customer. Distributor
shall make all commercial efforts to ensure the credit worthiness of
each end user Licensed pursuant to this Agreement and Distributor
shall use all efforts to ensure that each customer pays all fees owed
to Distributor according to Distributor's invoice terms. Distributor
shall prepare and remit at the end of each month an Aged Receivable
document.
5.7 REPORTS. Along with each payment as described in section 5.6,
Distributor shall supply a report with copies of customer invoices,
(if possible with the name and location of the customer, and products
sold) and a calculation of the royalty due for the invoice.
5.8 MAINTENANCE. Distributor shall pay to Sagent the amounts set out in
section 5.1 of this Agreement for Maintenance provided to End Users.
Payment for Maintenance shall be made yearly in advance, and, unless
Maintenance is canceled by Distributor, Sagent or End-User, at least
thirty days before each subsequent Anniversary Date. Distributor
shall pay for Maintenance as provided in Section 5.6. Sagent policies
require that maintenance be purchased at the inception of a License
for extension of product warranties and that back maintenance is
required for reinstatement of customers that have let their
maintenance contracts lapse.
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5.9 TRAINING AND CONSULTING. Sagent shall grant to Distributor rights to
provide Sagent training courses with Distributor's own personnel to
End Users; and Distributor shall have the right to provide
Distributor's Sagent trained consultants to assist customers with use
of the Software Products. Such training and consulting shall meet
Sagent's quality standards. Distributor shall pay the reasonable
travel and living expenses for any Sagent consultants or agents
brought from the US to the Territory. For extended visits, over two
weeks, Sagent will invoice Distributor for a daily rate approximating
the compensation and benefits of the Sagent consultant or agent for
the period involved.
5.10 REPORTING. Distributor agrees to provide Sagent with a monthly sales
report in format and media reasonably requested by Sagent and also
meeting Distributor's needs, which details if possible purchase order
numbers, quantity of each type of Software licensed during the month
(including copies distributed by Distributor to Reseller, End User
orders delivered by Resellers, End-User orders delivered by
Distributor, and Marketing Copies made), machine class, unit and
extended price to Sagent the buyers' names and addresses and Reseller
numbers (if any), and any other related information reasonable
requested by Sagent. This report shall be forwarded to Sagent within
fifteen (15) days of the close of each calendar month. In addition,
Distributor shall ensure that Resellers provide similar such reports
to Distributor and that the information contained in such Reseller
reports is accurately reflected in Distributor's report to Sagent. If
Distributor orders Software directly from Sagent such information
shall be supplied on the order.
5.11 AUDIT. Distributor agrees to allow an independent auditor to review
Distributor's books and records related to the activities described in
this Agreement in order to determine the accuracy of the reports and
agrees to require Resellers to allow a similar independent auditor
review. The independent auditor will be chosen by Sagent and approved
by Distributor, whose approval shall not be unreasonably withheld.
The review will be paid by Sagent. The reviews occur at mutually
agreeable times during normal business hours and will not occur more
frequently than one time per year. The independent auditor shall be
instructed to keep all information learned strictly confidential.
5.12 WITHHOLDING TAXES. All payments by Distributor shall be made free
and clear of, and without reduction for, any withholding taxes. Any
such taxes arising in Territory which are otherwise imposed on
payments to Sagent shall be the sole responsibility of Distributor.
6. RESELLER AND END USER SERVICE.
6.1 PRODUCT SUPPORT. Distributor shall provide customer support
consistent with industry custom for all Software distributed
hereunder. Distributor shall maintain on site staff support personnel
sufficiently knowledgeable with respect to the Software to answer
Existing Distributor, Wholly Owned Company, Reseller, End User and
other customer questions regarding the use and operation of Software.
6.2 DISTRIBUTOR MAINTENANCE SUPPORT. Distributor shall ensure that all
Reseller or End User questions regarding the use or operation of
Software marketed by Distributor are initially addressed to and
answered by Distributor. Any Reseller or End-User service questions
resulting from Distributor's sales to Resellers or End-Users shall be
referred by Sagent back to Distributor.
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6.3 SAGENT SUPPORT TO DISTRIBUTOR. Sagent shall provide telephone
consultation to Distributor with respect to any Reseller/End-User
questions which Distributor cannot adequately answer. Distributor
shall not represent to any third party that Sagent is available to
answer questions from any Reseller, End-User or other customer
directly. To allow Distributor to offer proper support as Sagent for
severity 1 defects as defined in Exhibit I Distributor shall have
access to Sagent support. Sagent shall make maintenance support
available to Distributor on a 24-hour basis.
6.4 TRAINING. On the request of Distributor, Sagent will provide
training for a mutually agreed number of Distributor's technical
employees at no charge by sending them to Sagent Training Classes in
the US. Sagent Training Classes specifically requested by Distributor
in the Territory will be charged to Distributor at mutually agreed
cost.
7. WARRANTY.
7.1 Sagent warrants to Distributor that each individual Software product
for which Maintenance fees have been paid will substantially perform
the functions described in the documentation provided by Sagent for as
long a period as to enable Distributor to grant its customers the
legally required warranty (six months in Germany at the time of
signing this Agreement) so long as such Software product shall have
been properly shipped and not tampered with by Distributor. If Sagent
finds a material deviation in Software performance during the period,
as Distributor's sole and exclusive remedy, Sagent will replace,
modify, or issue a refund for the Software, at Sagent's option,
provided it is within the law, so that it performs substantially in
accordance with the documentation.
7.2 Other than as stated in this section 7, there is no representation or
warranty or condition, express or implied, as to any matter
whatsoever, including without limitation, the condition of software,
its merchantability or fitness for a particular purpose.
8. ADDITIONAL OBLIGATIONS OF SAGENT
8.1 HARMONY OF OPERATIONS. Sagent will provide to Distributor such
policies and procedures as are necessary to synchronize operations, so
that to the End User customer, Distributor would appear to be a
separate company, however closely aligned with Sagent.
8.2 CONSULTATION TO DISTRIBUTOR. Sagent will work closely with and
provide consultation to Distributor management through telephone
meetings or other appropriate manner of communication.
8.3 SAGENT COORDINATOR. Sagent agrees to appoint one person as the
designated coordinator between Distributor and Sagent. Sagent will be
responsible for ensuring that this employee will be knowledgeable in
Sagent's sales and marketing procedures.
8.4 SAGENT STAFF AT DISTRIBUTOR SITE. Sagent will provide to Distributor
persons with technical and sales knowledge to support Distributor in
the Territory during start-
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up phase with relevant direct expenses split equally between Sagent
and Distributor. The purpose of the supplied person is to "jump start"
operations of Distributor.
8.5 ISO 9001. Sagent will make its best effort to gain ISO 9001
registration within 12 months of the Effective Date of this Agreement.
8.6 RESPONSE TO INQUIRIES. Sagent shall promptly respond to all
inquiries from Distributor concerning matters pertaining to this
Agreement.
8.7 NEW RELEASES. Sagent shall promptly inform Distributor of new releases
of Software.
8.8 OTHER SOFTWARE PRODUCTS. Sagent shall offer to Distributor product
distribution rights in the Territory for all other products
distributed directly or indirectly by Sagent in accordance with
Exhibit A.
8.9 PRODUCT ANNOUNCEMENTS. Sagent shall use its best efforts to not make
or distribute product announcements related to the Software directly
to End Users in the Territory unless coordinated with Distributor.
8.10 PRODUCT RELEASE PLANS. Sagent shall use its best efforts to give
Distributor reasonable notice of plans for future software products
which Sagent intends to release for distribution during the term of
this Agreement. Sagent will provide to Distributor monthly product
release schedules and Quarterly product planning schedules.
8.11 CUSTOMER INFORMATION. Sagent will transmit to Distributor the names
and addresses of prospective customers in the Territory from whom
Sagent receives inquiries regarding the Software.
8.12 MARKETING AND TECHNICAL INFORMATION. At Distributor's request,
Sagent will either loan, or sell at Sagent's cost, to Distributor
marketing and technical information concerning the Software, as well
as catalogs and other sales aids, all in the English language, for
the use of Distributor in marketing and selling to end users.
8.13 SAGENT AND DISTRIBUTOR TO COOPERATE IN MARKETING ANNOUNCEMENTS.
Sagent shall make all reasonable efforts to consult and cooperate
with Distributor with respect to the timing and content of all
marketing, PR, and other announcements which may have an effect in
the Territory.
8.14 SAGENT OBLIGATION TO GO TO TERRITORY. Sagent employees shall not be
required to come to the Territory to support sales/marketing
activities. To the extent that both parties feel that such a visit is
in the best interest of Distributor, Distributor will pay the
reasonable travel and living expenses of the requested Sagent
Employee. For extended visits, over two weeks, Sagent will invoice
Distributor for a daily rate approximating the compensation and
benefits of the individual for the period involved. In the case of
Split deals as described at section 5.4 hereof, travel and
compensation costs will generally be considered in the split of
revenue to each party. In the case of support issues defined as
"severity 1 and 2" in Sagent's Maintenance And Technical Support
document set out as Exhibit J hereto, and for which the services of a
Sagent Employee are imperative, Sagent shall pay the relevant
expenses.
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9. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR
The following are additional obligations to be undertaken by the Distributor at
the Distributor's sole expense:
9.1 MANUFACTURE OF PRODUCTS AND TRAINING MATERIAL. Distributor will
manufacture all Software and training materials to be distributed in
accordance with the Methods and Standard of Quality set out in Exhibit
K hereto in the Territory pursuant to this Agreement and deliver such
products to End Users. Sagent will supply masters of tapes, disks and
documentation as are required for Distributor to meet its
responsibilities under this section. Distributor shall be allowed to
buy from Sagent all Software media, documentation and training
materials which Sagent makes commercially available at Sagent's cost.
9.2 ENFORCEMENT OF INTELLECTUAL PROPERTY. Distributor will use its best
efforts to protect Sagent's Intellectual Property rights in the
Software in the Territory, including but not limited to thorough use
of Non Disclosure agreements and proper contract administration of the
software license agreements, and Distributor shall promptly report to
Sagent any infringement of such rights of which Distributor becomes
aware; provided, however, that Sagent reserves the sole and exclusive
right at its discretion to assert claims against third parties for
infringement or misappropriation of its Intellectual Property Rights in
the Software in the Territory, "Intellectual Property Rights" shall
mean patent right, copyright right (including, but not limited to,
rights in software, audiovisual works and moral rights), trade secret
rights, trade mark rights and any other intellectual property rights
recognized by the law of each applicable jurisdiction.
9.3 MARKETING AND PR EFFORTS. Distributor will use its best efforts to
vigorously and aggressively market and sell the Software within the
Territory and to satisfy those reasonable criteria and policies with
respect to Distributor's obligations under this Agreement developed and
announced and communicated in writing to Distributor by Sagent from
time to time. Distributor will provide Sagent sales forecast and
pipeline information monthly and as requested by Sagent. Distributor
will develop and implement effective marketing programs to assist in
the sale of the Software including those agreed upon in annual business
plans or otherwise between the parties.
9.4 SAGENT SALES MEETINGS. Distributor shall attend Sagent's scheduled
Sales meetings which are scheduled to occur at least annually. In
addition, business review meetings should be held between the General
Manager of Distributor and the Sagent Coordinator once in a quarter.
9.5 STAFF TRAINING. Distributor agrees to provide its staff and Resellers
with adequate training regarding the use and operation of the Software,
and to also provide its staff and Resellers with regular training
regarding updates of the Software.
9.6 FINANCES. Distributor shall maintain working capital sufficient, to
allow Distributor to perform fully and faithfully its obligations under
this Agreement. Distributor shall devote sufficient financial resources
and technically qualified sales and service personnel to the Software
to fulfill its responsibilities under this Agreement.
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9.7 STANDARD OF BUSINESS PRACTICES. Distributor shall establish and
maintain, and shall cause its Resellers, employees and agents to
establish and maintain a high standard of ethical business practices in
connection with the distribution of Software within the Territory,
including, without limitation, all applicable laws and regulations.
Distributors shall follow such applicable sales policies as are
established by Sagent from time to time.
9.8 INTELLECTUAL PROPERTY RIGHTS REGISTRATIONS AND GOVERNMENT APPROVALS.
Distributor shall promptly notify Sagent in writing of, and shall
assist Sagent with any registrations of filings required to obtain all
needed copyright, trademark or other intellectual property rights
protection, in Sagent's name, for the Software within the Territory,
and to obtain any necessary government approvals with respect to this
Agreement. Distributor agrees to promptly register this Agreement,
after notifying Sagent if the laws or regulation of any country in the
Territory require its registration for any purpose with any
governmental agency or instrumentality.
9.9 NO COMPETING PRODUCTS. During the first three years of the Agreement,
Distributor will not sell any products, for use in the Territory,
except the Software or software provided by Sagent which is later made
available under this Agreement. After three years, Distributor shall be
free to sell and service products of any manufacturer including those
products that could compete with Sagent products provided that
Distributor is otherwise in compliance with the terms of this
Agreement.
10. INDEMNIFICATION.
10.1 Sagent will defend at its expense any action brought against
Distributor to the extent it is based on a claim that the Software or
any part thereof, when used within the scope of this Agreement,
infringes a patent or copyright and Sagent will pay any settlements and
any costs, damages and attorney's fees finally awarded against
Distributor in such action which are attributable to such claim;
provided that the foregoing obligation will be subject to Distributor
notifying Sagent promptly in writing of the claim, giving Sagent the
exclusive control of the defense and settlement thereof, and providing
all reasonable assistance in connection therewith.
10.2 Notwithstanding the above, Sagent shall have no liability for any claim
of infringement of a patent or copyright based on: (i) use of a
superseded or altered release of the Software or portion thereof if
such infringement would have been avoided by the use of a current
unaltered release of the Software which Sagent provides to Distributor,
or (ii) the combination, operation or use of the Software furnished
under this Agreement with products or data not furnished by Sagent if
such infringement would have been avoided by the use of the Software
without such products or data.
10.3 In the event that the use of the Software becomes or in Sagent's
reasonable opinion is likely to become the subject of a claim of
infringement of patent or copyright rights, it is Sagent's option to
remedy the situation by: a) procuring the continuing right to use the
Software as contemplated or b) replacing or modifying the Software such
that use is no longer an infringement or c) terminating the License
and refunding the fees paid by Distributor to Sagent but prorated over
a thirty six (36) month period, to the extent that Distributor is
obligated to refund such fees to its customers.
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<PAGE> 41
10.4 The foregoing states the entire liability and obligation of Sagent
with respect to infringement or claims of infringement of any patent,
copyright, trade secret, or any other proprietary right.
11. EXPORT ADMINISTRATION.
11.1 If the Software is to be used or distributed outside of the United
States, Distributor agrees to comply fully with all relevant
regulations of the United States Department of Commerce and with the
United States Export Administration Act to assure that the Software is
not exported in violation of United States Law. Distributor agrees
that neither the Software nor any other technical data nor the direct
product thereof is intended to be used for any purpose prohibited by
the Act or regulations promulgated thereunder, including, without
limitation, nuclear proliferation or chemical/biological weapons or
missiles.
12. MAINTENANCE.
12.1 Distributor shall be solely responsible for maintenance for its own
customers.
12.2 DISTRIBUTOR CONTACT. Distributor shall appoint one person as the
principal Maintenance Contact Point for the communication of bugs and
errors to Sagent and for the receipt of bug and error fixes,
work-arounds and updates, if any. Additionally, Distributor shall
appoint another person as a back-up to the principal contact point.
12.3 SAGENT CONTACT. Sagent shall appoint one person as the principal
Maintenance Contact Point for the receipt of bugs and errors from
Distributor and for the communication to Distributor of bug and error
fixes, work-arounds and updates, if any. Additionally, Sagent shall
appoint another person as a back-up to the principal contact point.
12.4 MAINTENANCE AVAILABILITY. Maintenance is available only for the most
recent version of the Software and the preceding version for no longer
than 12 months after the current version becomes generally available.
Sagent shall ensure that Maintenance is available for the period
mandated by local law in the Territory and Distributor shall use its
best efforts to inform Sagent of any local laws which may affect
Sagent pursuant to this section.
13. TERMINATION/DEFAULT.
13.1 TERM. This Agreement shall continue in force from the Effective Date
without a specific termination date, unless terminated under the
provisions of this Section 13. This Agreement shall survive the
termination of the Joint Venture Agreement executed as of April 8,
1998 between Sagent and ISAR-Vermogensverwaltung GbR mbH, unless the
provision of said Joint Venture Agreement contemplate that this
Agreement shall automatically and immediately terminate.
13.2 DISTRIBUTOR'S RIGHT TO TERMINATE: The Distributor shall have the
right to terminate the Agreement
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13.2.a) for Cause
(i) if Sagent shall have defaulted in a material way in its obligations to
provide and support its Software; or
(ii) if Sagent has became unable to meet its requirements under this
Agreement due to financial insolvency; or
(iii) other material default of a material provision of the Agreement.
Notwithstanding the foregoing, if Distributor desires to terminate
pursuant to this section, then Distributor shall give written notice to
Sagent that if the breach is not cured within sixty (60) days this
Agreement will be terminated. If Distributor gives such notice and the
breach is not cured during the sixty day period, then this Agreement
will terminate.
13.2.b) Furthermore, Distributor shall have the right to terminate this
Agreement upon twelve months notice following the fourth year of the
agreement.
13.3. EFFECT OF TERMINATION PURSUANT TO SECTION 13.2. Following termination
under 13.2., Distributor shall change its name and procedures to
eliminate all reference to Sagent and shall retain the right to
continue to support maintenance contracts with end users and otherwise
provide support.
13.4. SAGENT'S RIGHT TO TERMINATE.
13.4.a) for Cause:
Sagent shall have the right to terminate Distributor's exclusive distribution
rights if
(i) Distributor fails to meet its minimum royalty payment target in any
given 12-month period as set out in Exhibit E and Sagent and
Distributor also were in material disagreement with respect to the
operations or operating plan and have been unable to resolve such
disagreement; or
Sagent shall have the right to terminate the agreement if
(ii) a material number of customers or Resellers indicate substantial
dissatisfaction with Distributor's service levels; or
(iii) Distributor is financially or otherwise unable or unwilling to meet its
obligations under the Agreement; or
(iv) other material default of a material provision of the Agreement; or
(v) failure to establish during the first twelve months of the Agreement,
a training and consulting organization which functions pursuant to
standards agreed upon by Sagent and Distributor.
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Notwithstanding the foregoing, if Sagent desires to terminate pursuant
to this section, then Sagent shall give written notice to Distributor
that if the breach is not cured within sixty (60) days this Agreement
will be terminated. If Sagent gives such notice and the breach is not
cured during the sixty day period, then this Agreement will terminate.
13.4.b) Furthermore, Sagent shall have the right to terminate this Agreement
upon twelve months notice following the fourth year of the agreement.
13.4.1 EFFECT OF TERMINATION UNDER 13.4 Following termination under section
13.4 above, the Distributor shall have the right to liquidate its
business, however, if it does so, it shall allow Sagent to hire
Distributor's former employees directly or through a third party to
provide support to existing customers.
13.4.2 Following termination under section 13.4 a) Sub sections (i), or (ii)
if Distributor continues to operate, it shall change its name and
procedures to eliminate reference to Sagent and Distributor shall
retain (a) the right to License Sagent products in the Territory on a
non-exclusive basis for a period of one year (renewable annually upon
mutual agreement) and (b) provide support to existing and new
customers through the expiration of applicable maintenance contracts.
13.5 Following termination under section 13.4 a) Sub sections (iii) or
13.4. b), all Distributor rights to License and support Sagent
products shall cease, however, Sagent shall honor new purchase orders
during a transition period which are prepaid or for which direct
payment from a credit worthy customer can be arranged.
13.6 Following termination, under section 13.4 Sub-sections (iv) or (v)
above, Distributor shall change its name as indicated above, and have
the right to provide support to existing customers through the
expiration of applicable maintenance contracts.
13.7 POST TERMINATION COOPERATION: Following terminate pursuant to
sections 13.2 and 13.4 herein, the parties agree to cooperate with
each other for an orderly transition of selling and service activity
to established customers to Sagent directly or to an authorized third
party.
13.8 PROVISIONS OF UPDATES FOLLOWING TERMINATION. In the event of
termination pursuant to this Section 13 and to enable Sagent to
continue to provide updates of the Software to End Users and
Resellers, Distributor shall provide Sagent within thirty (30) days of
the effective date of termination with a complete customer list of all
such End Users and Resellers, showing, at a minimum, names, addresses,
type and amount of Software sold.
13.9 EFFECT OF TERMINATION. Unless provided otherwise above, on
termination or expiration of this Agreement, Distributor shall (a)
immediately cease using, copying and distributing the Software, and
(b) certify to Sagent within one month after termination that
Distributor has destroyed or has returned the Software and all copies.
This requirement applies to copies in all forms, partial and
complete, in all types of media and computer memory and whether or not
modified or merged into other materials.
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13.10 ASSIGNMENT OF EXISTING AGREEMENTS. On termination or expiration of
this Agreement Distributor shall immediately take all required actions
to assign all end user, VAR and Reseller Agreements to Sagent.
Distributor agrees to ensure that all Wholly Owned Companies shall
also assign all end user and VAR agreements related to the Software
and Services to Sagent.
13.11 RETURN OF MATERIALS. All trademarks, trade names, patents, copyrights,
designs, drawings, formulas or other data, photographs and samples of
every kind pertaining to the Software and to the Documentation which
shall include any which may relate to any localization and which shall
remain the property of Sagent. Within thirty (30) days after the
termination of this Agreement, Distributor shall prepare all tangible
such items in its possession to be returned pursuant to section 13.9,
for shipment, as Sagent may direct, at Sagent's expense. Distributor
shall not make or retain any copies of any confidential items or
information which may have been entrusted to it. Effective upon the
termination of this Agreement, Distributor shall cease to use all
trademarks, marks, and trade names of Sagent.
13.12 LIMITATION ON LIABILITY. In the event of termination by either party
in accordance with any of the provisions of this Agreement, neither
party shall be liable to the other, because of such termination, for
compensation, reimbursement or investments, leases or commitments in
connection with the business or goodwill of Sagent or Distributor.
Termination shall not, however, relieve either party of obligations
incurred prior to the termination.
13.12.1 LIMITATION OF LIABILITY - TRADE MARKS: Distributor acknowledges that
Sagent is, and will remain the sole and exclusive owner of all
goodwill associated with the trade marks of Sagent. Distributor
recognizes the value of the goodwill associated with the trade marks
of Sagent, and acknowledges that such value is owned by and belongs
solely and exclusively to Sagent. Distributor waives any right it may
have to receive any compensation or reparations prior to, upon or
following termination or expiration of this agreement under the law of
the territory or otherwise.
13.13 CUSTOMER SUPPORT. Following termination of this Agreement, Sagent and
Distributor shall cooperate to make available to Resellers and End
Users Software support and maintenance by Sagent at Sagent's then
current standard rates. Distributor agrees to pay such standard rates
to Sagent or, at Distributor's option, to reimburse to such Resellers
for the duration of the stated maintenance and support period.
13.14 SURVIVAL OF TERMS. The provisions of Sections 5, 7, 9.5, 10, 11, 12,
13, 15 and 21 shall survive the termination of this Agreement for any
reason.
14. LOCALIZATIONS.
14.1 Sagent shall have the obligation (at its expense) to provide software
localization/local language documentation whenever necessary based on
Sagent's English language documentation. Distributor shall (at its
expense) provide local language marketing and promotional materials
based on the English sales collateral used by Sagent which Sagent
shall provide. Distributor shall also have the right (at its expense)
to provide such localization/documentation and materials. All such
materials shall meet Sagent's published quality standards.
18
<PAGE> 45
14.2 Sagent shall retain ownership of all derivative works from its
materials and Distributor shall promptly supply copies of any
materials or documentation it prepares and executes any requested
documents necessary to perfect Sagent's ownership in the intellectual
property.
14.3 If Sagent elects to use local language Documentation or materials,
Sagent will obtain such materials from Distributor at Distributor's
cost or for a nominal royalty if Sagent has printed the material.
14.4 Distributor may suggest to Sagent Software changes that it considers
helpful in the Territory; however Sagent shall be entirely responsible
for the development and content of the Software.
14.5 Sagent may agree with Distributor to provide technical and engineering
support required to make localizations or new features to the Software
on a case by case basis as commercial conditions warrant. However, in
any case Sagent shall be required to create localizations for every
new software release.
14.6 Sagent agrees to implement as soon as is commercially reasonable any
localization or feature if License revenues in Germany will be
materially impacted if Sagent fails to do so. Due to SAP's significant
market penetration in territory. Sagent agrees to ensure access and
query capabilities to SAP data within three months from the date of a
final mutual decision on the best technical and business direction to
achieve this goal, but in any case no later than October 1, 1998.
15. NON-DISCLOSURE.
15.1 By virtue of this agreement, the parties may have access to
information that is confidential to one another ("CONFIDENTIAL
INFORMATION"). Confidential Information shall be limited to the
Software and all written information clearly marked as confidential.
Additionally, the terms and conditions of this Agreement are deemed to
be Confidential Information.
15.2 A party's Confidential Information shall not include information which
(a) is or becomes a part of the public domain through no act or
omission of the other party; or (b) was in the other party's lawful
possession prior to the disclosure and had not been obtained by the
other party either directly or indirectly from the disclosing party;
or (c) is lawfully disclosed to the other party by a third party
without restriction on disclosure; or (d) is independently developed
by the other party.
15.3 The parties agree, both during the term of this Agreement and for a
period of five (5) years after termination of the Agreement, to hold
each other's Confidential Information in confidence. The parties agree
not to make each other's Confidential Information available in any
form to any third party or to use each other's Confidential
Information for any other purpose than the implementation of this
Agreement. Each party agrees to take reasonable steps to ensure that
Confidential Information is not disclosed, distributed or used by its
employees or agents in breach of the provisions of this Agreement.
19
<PAGE> 46
16. GOVERNING LAW, JURISDICTION, AND COMPLIANCE WITH LAWS.
16.1 The rights and obligations of the parties under this Agreement shall
not be governed by the U.N. Convention on Contracts for the
International Sales of Goods; rather such rights and obligations shall
be governed and construed under the laws of the State of California,
without reference to conflict of laws and principles. The jurisdiction
of the courts of Germany is expressly excluded to the maximum extent
permitted by law. Distributor acknowledges that its breach of this
agreement may cause irreparable harm to Sagent for which Sagent may
obtain injunctive relief.
16.2 IMPORT LICENSES, EXCHANGE CONTROLS, OTHER GOVERNMENTAL APPROVALS.
Distributor represents and warrants that it shall, at its expense,
obtain any and all import licenses and Territory governmental
approvals that may be necessary to permit the license by Sagent and
Distributor of Software, comply with all registration requirements in
the Territory, obtain such approvals from the banking and governmental
authorities of the territory as may be necessary to guarantee payment
of all amounts due hereunder to Sagent in US dollars, and comply with
any and all governmental laws, regulations, and orders that may be
applicable to Distributor by reason of its execution of this
agreement, including but not limited to any requirement to be
registered as Sagent's independent Distributor with any governmental
authority, and including but not limited to any and all laws,
regulations or orders that govern or affect the ordering, export,
shipment, import, sale (including governmental procurement), delivery,
or redelivery of the Software in the Territory.
16.3 LIABILITY OF SAGENT. The provisions of this Agreement under which the
liability of Sagent is excluded or limited shall not apply to the
extent that such exclusions or limitations are declared illegal or
void under the laws applicable in the countries in which Software is
licensed hereunder, except to the extent such illegalities or
invalidities are cured under the laws of such countries by the fact
that the law of California governs this agreement.
17. ENTIRE AGREEMENT.
17.1 This Agreement sets forth the entire agreement and understanding of
the parties relating to the subject matter herein and merges all prior
agreements, discussions, and understandings between them. No
modification of or amendment to the Agreement, nor any waiver of any
rights under this Agreement shall be effective unless in writing
signed by an officer of Sagent and Distributor. The terms and
conditions of this Agreement shall supersede the terms and conditions
of Distributor's purchase order, if any.
18. NOTICES.
18.1 NOTICES. Any and all notices and other communications that are
required or permitted to be given pursuant to this Agreement shall be
in writing, and shall be deemed given (a) upon personal delivery, or
(b) upon the sender's receipt of electronic confirmation of
transmission, if sent by telex or facsimile, or (c) upon 2 business
days after delivery to a recognized courier, fees prepaid. The parties
designate the following addresses for the foregoing legal effects:
20
<PAGE> 47
TO DISTRIBUTOR:
Magnolia II Vermogensverwaltung GmbH
c/o Buro Klaus Luft
Gut Keferloh 1 B
D - 85630 Grasbrunn / Munich
Germany
Attention: General Manager
Facsimile number: (49-89)464483
TO SAGENT:
Sagent Technology, Inc.
2225 East Bayshore Road, Suite 100
Palo Alto, CA 94303
USA
Attention:
Facsimile number: (650) 493-1290
The parties may amend the above-mentioned data by notice to all other
parties, as provided in this Section.
19. FORCE MAJEURE.
19.1 Nonperformance of either party shall be excused to the extent that
performance is rendered impossible by strike, fire, flood,
governmental acts or order or restrictions, failure of suppliers or
any other reason where failure to perform is beyond the control and
not caused by the negligence of the non-performing party.
20. LIMITATION OF LIABILITY.
20.1 Regardless of whether any remedy fails of its essential purpose, in
no event will either party be liable to the other party for
incidental, indirect, special or consequential damages,
notwithstanding being aware of the possibility of such damages.
Neither party's liability for any damages or claims shall exceed
US $0.5 million.
21 DISPUTE RESOLUTION.
21.1 The Advisory Board of Distributor shall have the general
responsibility of resolving disputes between Sagent and Distributor
that relate to major issues concerning Agreement interpretation,
operations and implementation of the joint strategy. Following failure
of the Board to resolve a dispute, either party may request mediation
or arbitration under the Agreement to be held in Zurich Switzerland.
21
<PAGE> 48
21.2 ARBITRATION. In the event of any dispute, controversy or claim
arising out of or relating to this Agreement, or to the breach or
termination hereof (a "Dispute"), the parties agree to resolve the
same as follows:
(a) The parties to the Dispute shall initially attempt to resolve it
through consultations and negotiations as specified in 21.1.
(b) If the Dispute has not been resolved amicably within thirty (30) days
after any party provides notice thereof, unless the parties agree
otherwise, the Dispute shall be resolved by final and binding
arbitration in the City and county of Zurich, Switzerland, in
accordance with the Arbitration Rules of the United Nations
Commission on International Trade Law ("UNCITRAL"), as in effect on
the date of this Agreement. The language to be used in the
arbitration proceeding shall be English. The International Chamber of
Commerce shall serve as the appointing authority. The arbitrators
shall render a written award stating the reasons for the decision.
Judgment on an arbitration award or decision may be entered by any
court of competent jurisdiction, or application may be made to such a
court for judicial acceptance of the award or decision and any
appropriate order, including enforcement.
(c) Each of the parties hereto consents to the submission of any Dispute
for settlement by final and binding arbitration in accordance with
paragraph (b) above. Such consent shall satisfy the requirements for
an "agreement in writing" pursuant to Article II of the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitration
Awards, done at New York on June 10, 1958.
(d) Each of the parties hereby undertakes to carry out without delay the
provisions of any arbitration award or decision.
22. NAME OF DISTRIBUTOR.
22.1 SAGENT TECHNOLOGY GMBH. Subject to Section 22.2, Distributor agrees
to perform its obligations under the name Sagent Technology GMBH or
such other name as is agreed to by the parties.
22.2 LICENSE AGREEMENT. Sagent agrees to execute a License agreement with
Distributor which will confer on Distributor limited rights to use the
appropriate Sagent trade marks and trade names for a minimum period of
three year.
22.3 CESSATION OF USE. Distributor agrees that if the License agreement
referred to in section 22.2 above terminates expires or if for any
reason Licensee breaches the License agreement, Licensee will
immediately cease using the Sagent trade marks and trademarks. This
section does not limit any other action Sagent may have against
Distributor for its breach. Distributor shall change its name
immediately to eliminate the name or reference to Sagent or its
products should it elect to sell products that compete with the
products of Sagent.
22
<PAGE> 49
23 SEVERABILITY.
23.1 If one of the provisions of this agreement should be or become invalid
or if this agreement should have an omission, this shall not affect
the validity of the remaining provisions. In such an event, the
parties are obliged to assist in the incorporation of provisions which
form the closest economic equivalent to that which the parties would
have agreed if they had been aware of the invalidity or if they had
considered the point.
SO AGREED BETWEEN THE PARTIES HERETO:
"SAGENT"
SAGENT TECHNOLOGY, INC:
By: /s/ THOMAS M. LOUNIBOS
------------------------------
Name: Thomas M. Lounibos
----------------------------
Title: EVP OF SALES
----------------------------
Date: April 8, 1998
----------------------------
"DISTRIBUTOR"
MAGNOLIA II VERMOGENSVERWALTUNG GMBH
By: /s/ INES BERGHOF
------------------------------
Name: Ines Berghof
----------------------------
Title: General Manager
----------------------------
Date: April 8, 1998
----------------------------
23
<PAGE> 50
EXHIBIT A
SOFTWARE TO BE DISTRIBUTED BY DISTRIBUTOR
Server: Data Movement Server
Web Link Server
Data Access Server
Power User Tools: Sagent Administration Tool
Sagent Design Studio Tool
Sagent Automation Tool
End-User Tools: Information Studio Tool
Analysis Tool
Reporting Tool
Crystal Reporting Tool
Statistical Tool
24
<PAGE> 51
EXHIBIT B
TERRITORY
The territory shall include the following countries and/or accounts:
o Germany
o Austria
o Switzerland
-- German-speaking regions
-- Nestle headquartered in Vevey/French-speaking Switzerland
-- The World Economic Forum (WEF) headquartered in
Geneva/French-speaking Switzerland.
25
<PAGE> 52
EXHIBIT C
DISTRIBUTOR'S HIRING PROJECTIONS
<TABLE>
<CAPTION>
1998 1999 2000
-------------------- -------------------- --------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
-- -- -- -- -- -- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SALES -- 1 2 3 4 4 5 5 6 6 6 6
SUPPORT -- 2 2 3 4 4 5 5 7 7 7 7
</TABLE>
26
<PAGE> 53
EXHIBIT D
BUSINESS PLAN
27
<PAGE> 54
EXHIBIT E
MINIMUM ROYALTY PAYMENT TARGETS
First 12-month period* US$ [*]
Second 12-month period US$ [*]
Third 12-month period US$ [*]
* The first 12-month period shall start on May 1, 1998.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
28
<PAGE> 55
EXHIBIT F
SAGENT'S NON STANDARD PRICING POLICY
Any transaction requiring a discount or non-standard pricing of greater than:
Product License Revenue: [*]% Discount
Product Maintenance Revenue: [*]% Discount
Professional Services Revenue: [*]% Discount
must have prior written approval to Sagent's Vice President of Worldwide Sales.
Any total Transaction Revenues exceeding US$ 200,000 require that Sagent's Vice
President of Worldwide Sales has been informed prior to the closing of the
respective deal.
29
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 56
EXHIBIT G
SAGENT'S STANDARD END USER AGREEMENTS
including their respective exhibits.
30
<PAGE> 57
SOFTWARE LICENSE AND SUPPORT AGREEMENT
This SOFTWARE LICENSE AND SUPPORT AGREEMENT (this "Agreement") is entered
into by and between (and together with its Subsidiaries (as
defined below) collectively "Customer"), and Sagent Technology, Inc. ("Sagent"),
and describes the terms and conditions pursuant to which Sagent shall license to
Customer and support certain Software (as defined below).
In consideration of the mutual promises and upon the terms and conditions
set forth below, the parties agree as follows:
1. Definitions
1.1 "Concurrent Users" means all log-ons into the Software at any one
time, as specified per Site in Schedule B.
1.2 "Confidential Information" means this Agreement and all its Schedules,
any addends hereto signed by both parties, all Software listings,
Documentation, information, data, drawings, benchmark tests,
specifications, trade secrets, object code and machine-readable
copies of the Software, source code relating to the Software, and any
other proprietary information supplied to Customer by Sagent, or by
Customer to Sagent and clearly marked as "confidential information,"
including all items defined as "confidential information" in any
other agreement between Customer and Sagent whether executed prior to
or after the date of this Agreement.
1.3 "Documentation" means any on-line help files or written instructions
manuals regarding the Use of the Software.
1.4 "Effective Date" means the later of the dates on which Customer and
Sagent have signed this Agreement.
1.5 "Equipment" means the computer system, including peripheral equipment
and operating system software, specified in Schedule B.
1.6 "Maintenance and Support" means the services described in Section 6.
1.7 "Release" means a set of the Software in which in addition to possible
corrections of detected shortcomings, (small) functional enhancements
have been included. New Releases are registered by means of a change
of the number to the right of the decimal point, e.g. Sagent 1.0 >>
Sagent 1.1.
1.8 "Response Time" means the elapsed time between the receipt of a
service call and the time when Sagent begins the Maintenance and
Support, including a verbal or written confirmation to the Customer
thereof.
1.9 "Site" means such physical location specified in Schedule B of one or
more CPU's of the Equipment at which Customer is entitled to Use the
Software.
1.10 "Software" means the computer software programs specified in Schedule
A and otherwise provided to Customer pursuant to this Agreement, and
includes without limitation the Third Party Software.
1.11 "Subsidiaries" means all current and future business entities of which
a party owns, directly or indirectly, more than fifty percent (50%)
of the equity securities or other equity interest granting such party
voting rights exercisable in electing the management of the entities,
for so long as such ownership exists.
1.12 "Support Call (priority 1)" means a reported problem in the Software
which causes a total system standstill.
1.13 "Support Call (priority 2)" means a reported problem in the Software
which causes serious disruption of a major business function and
which can not be (temporarily) solved by a workaround.
1.14 "Support Call (priority 3)" means a reported problem in the Software
for which a workaround is available.
<PAGE> 58
1.15 "Support Call (priority 4)" means general questions and wishes
pertaining to the Software and all reported problems in the
Software which are not included in Sections 1.13, 1.14 or 1.15.
1.16 "Third Party Software" means the third party software product
licensed to Sagent, if any, that is specified on Schedule A. The
Third Party Software is subject to all the terms and conditions of
this Agreement that apply to the Software except where specifically
indicated otherwise. In addition, the terms and conditions of the
Third Party Software Exhibit apply to the Third Party Software. In
the event of any conflict between the Third Party Software Exhibit
and this Agreement, the Third Party Software Exhibit shall govern.
No addendum to this Agreement shall be deemed to modify any terms
or conditions that govern the Third Party Software unless such
addendum specifically mentions the Third Party Software.
1.17 "Third Party Software Exhibit" means the exhibit, if any, which
sets forth the specific terms and conditions that apply to the
Third Party Software.
1.18 "Update" means a set of the Software in which detected
shortcomings are being remedied. Updates are registered by means of
a letter indication after the version number of the Software, e.g.
Sagent, 1.0>> Sagent 1.0A.
1.19 "Use" means loading, utilization, storage or display of the
Software by Customer (and such other entities as are expressly
permitted by Section 3(c)) by no more than the number of Concurrent
Users set forth on Schedule B, for its own internal information
processing services and computing needs (except as expressly
permitted by Section 3(c)), by copying or transferring the same
into Customer's Equipment.
1.20 "Version" means a set of the Software in which substantial new
functionalities or other substantial changes are introduced.
Versions are registered by means of a change of the number to the
left of the decimal point, e.g. Sagent 1.0>> Sagent 2.0.
2. Grant of License
2.1 Subject to the terms and conditions of this Agreement, Sagent
hereby grants to Customer during an unlimited period of time, a
non-exclusive and non-transferable license to (a) Use the Software
on the Equipment (or with prior written notice to Sagent, on
substitute, upgraded, or additional equipment) and at the Site (or
with prior written notice to Sagent on additional sites of
Customer, to be specified in Schedule B), and to make sufficient
copies as necessary for such Use, and (b) use the Documentation in
connection with Use of the Software. This license transfers to
Customer neither title nor any proprietary or intellectual property
rights to the Software, Documentation, or any copyrights, patents,
or trademarks, embodied or used in connection therewith, except for
the rights expressly granted herein.
2.2 Sagent shall issue to Customer, as soon as practicable, [ONE (1)
MACHINE-READABLE COPY] of the Software for Use at the Site only,
along with [ONE (1) COPY] of the on-line Documentation. Sagent will
provide Customer with written copies of the Documentation at
Sagent's standard charges. Customer may not copy the Documentation.
Customer acknowledges that no copy of the source code of the
Software will be provided to Customer.
2.3 If the specified Equipment is inoperable or under repair, Customer
will be entitled to transfer the Software to substitute Equipment
at the same Site using an operating system that is supported by
Sagent, provided that Customer shall promptly notify Sagent in
writing of the transfer. Customer will be responsible for any
services required if the Software has to be ported to an operating
system that is not supported by Sagent.
2.4 Customer will be entitled to make a reasonable number of
machine-readable copies of the Software for backup or archival
purposes only. Customer may not copy the Software, except as
permitted by this Agreement. Customer shall maintain accurate and
up-to-date records of the number and location of all copies of the
Software and inform Sagent in writing of such location(s).
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<PAGE> 59
All copies of the Software will be subject to all terms and conditions of this
Agreement. Whenever Customer is permitted to copy or reproduce all or any part
of the Software, all titles, trademark symbols, copyright symbols and legends,
and other proprietary markings must be reproduced.
2.5 Notwithstanding the inclusion of Subsidiaries in the definition of
Customer in this Agreement, Sagent's affirmative obligations will be
limited to the entity named above. Such entity hereby guarantees the
performance of its Subsidiaries under this Agreement and shall
indemnify and hold harmless Sagent from and against all losses, costs,
liabilities and expenses arising out of or relating to any breaches by
such Subsidiaries of this Agreement.
3. License Restrictions
Customer agrees that it will not itself, or through any parent, subsidiary,
affiliate, agent or other third party:
(a) sell, lease, license or sublicense the Software or the Documentation;
(b) decompile, disassemble, or reverse engineer the Software, in whole or
in part;
(c) allow access to the Software by any Concurrent User not located at the
Site other than Customer's employees and employees of Customer's
customers, dealers and distributors who Use such Software (excluding
the Third Party Software) pursuant to the terms of Section 3(f) below;
(d) write or develop any derivative software or any other software program
based upon the Software or any Confidential Information;
(e) use the Software to provide processing services to third parties,
commercial timesharing, rental or sharing arrangements, or otherwise
use the Software on a 'service bureau' basis; or
(f) provide, disclose, divulge or make available to, or permit use of the
Software by any third party without Sagent's prior written consent.
4. License Fee
4.1 License Fee. In consideration of the license granted pursuant to
Section 2.1. Customer agrees to pay Sagent the License Fee specified
in Schedule A. The License Fee is due and payable in full upon the
Effective Date.
4.2 Expansion of License. Customer will have the option to expand the
license granted pursuant to Section 2.1 by increasing the authorized
number of Concurrent Users after Sagent's prior written consent and
further after Sagent's receipt of additional license fees for the
expanded Use as set forth in Sagent's then-current standard commercial
price list.
4.3 Taxes. Customer agrees to pay or reimburse Sagent for all federal,
state, dominion, provincial, or local sales, use, personal property,
payroll, excise or other taxes, fees, or duties arising out of this
Agreement or the transactions contemplated by this Agreement (other
than taxes on the net income of Sagent).
4.4 No Offset. Fees and expenses due from Customer under this Agreement
may not be withheld or offset by Customer against other amounts owed
by Customer for any reason.
[5. Escrow of Source Code
A MASTER SOURCE CODE ESCROW AGREEMENT WITH RESPECT TO THE SOFTWARE
(EXCLUDING THE THIRD PARTY SOFTWARE) HAS BEEN ESTABLISHED WITH __________.
CUSTOMER SHALL HAVE THE RIGHT TO BECOME A BENEFICIARY OF THE ESCROW
AGREEMENT PROVIDED THAT CUSTOMER AGREES TO BE BOUND BY THE TERMS OF SUCH
ESCROW AGREEMENT.]
6. Maintenance and Support
For so long as Customer is current in the payment of all Maintenance Fees
(described below), Customer will be entitled to Maintenance and Support as
specified in this Section 6.
6.1 Term and Termination. Sagent's provision of Maintenance and Support to
Customer will commence on the Effective Date and will continue for an
initial term of one (1) year. Maintenance and Support will
automatically renew at the end of the initial term and any
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<PAGE> 60
subsequent term for a renewal term of one (1) year unless Customer has provided
Sagent with a written termination notice of its intention not to renew the
Maintenance and Support at least ninety (90) days prior to the termination
expiration of the then-current term. Termination of Maintenance and Support upon
failure to renew will not affect the license of the Software.
6.2 Maintenance and Support Services. Maintenance and Support will be
provided only with respect to versions of the Software that are being
supported by Sagent, according to the following schedule: (a) a
Version will be supported for [five (5) years] after the commercial
release of the next Version, provided always that Customer makes use
of the last Release and Update of the first mentioned Version; (b) a
Release will be supported for [one (1) year] after the commercial
release of the next Release, provided always that Customer makes use
of the last Update of the related Version; and (c) an Update will be
supported for [six (6) months] after the commercial release of the
next Update.
6.3 Levels of Maintenance and Support. [MAINTENANCE AND SUPPORT IS
AVAILABLE AT THE FOLLOWING RESPONSE TIMES: (I) SUPPORT CALL (PRIORITY
10): ONE (1) HOUR; (II) SUPPORT CALL (PRIORITY 20): TWO (2) HOURS;
(III) SUPPORT CALL (PRIORITY 30): FOUR (4) HOURS; AND (IV) SUPPORT
CALL (PRIORITY 40): EIGHT (8) HOURS.]
6.4 Definition. Maintenance and Support means that Sagent will provide
during Sagent's standard hours of service: (i) Updates and Releases,
when and if available, and related on-line Documentation, and (ii)
telephone assistance with respect to the Software, including (a)
clarification of functions and features of the Software; (b)
clarification of the Documentation; (c) guidance in the operation of
the Software; and (d) error verification, analysis and correction to
the extent possible by telephone. Sagent's standard hours of service
are Monday through Friday [,8:30 A.M. TO 5:00 P.M., LOCAL SITE TIME,]
except for holidays as observed by Sagent.
6.5 On-site Assistance. At Sagent's discretion, Sagent can decide to
provide Maintenance and Support at the Customer Site. In such event
Customer will reimburse Sagent for all related traveling expenses and
costs for board and lodging.
6.6 Installation and Conversion. Upon Customer's request, Sagent or a
designated Sagent partner can perform the installation and/or
conversion of the Software. Unless otherwise agreed, the costs hereof
shall be invoiced to Customer on the basis of Sagent's then-current
rates.
6.7 Causes which are not attributable to Sagent. Maintenance and Support
will not include services requested as a result of, or with respect to
causes which are not attributable to Sagent. These services will be
billed to Customer at Sagent's then-current rates. Causes which are
not attributable to Sagent include but are not limited to:
(a) accident; unusual physical, electrical or electro-magnetic
stress; neglect; misuse; failure or fluctuation of electric
power, air conditioning or humidity control; failure of rotation
media not furnished by Sagent; excessive heating; fire and smoke
damage; operation of the Software with other media and hardware,
software or telecommunication interfaces not meeting or not
maintained in accordance with the manufacturer's specifications;
or causes other than ordinary use;
(b) improper installation by Customer or use of the Software that
deviates from any operating procedures established by Sagent in
the applicable Documentation;
(c) modification, alteration or addition or attempted modification,
alteration or addition of the Software undertaken by persons
other than Sagent or Sagent's authorized representatives;
(d) software programs made by Customer, Sagent or other parties.
6.8 Responsibilities of Customer. Sagent's provision of Maintenance and
Support to Customer is subject to the following:
(a) [CUSTOMER SHALL PROVIDE SAGENT WITH ACCESS TO CUSTOMER'S
PERSONNEL AND EQUIPMENT DURING NORMAL BUSINESS HOURS. THIS ACCESS
MUST INCLUDE THE ABILITY TO DIAL-IN TO THE EQUIPMENT ON WHICH THE
SOFTWARE IS OPERATING AND TO OBTAIN THE SAME ACCESS TO THE
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<PAGE> 61
Equipment as those of Customer's employees having the highest privilege or
clearance level. Sagent will inform Customer of the specifications of the modem
equipment and associated software needed, and Customer will be responsible for
the costs and use of said equipment.]
(b) Customer shall provide supervision, control and management of the
Use of the Software. In addition, Customer shall implement
procedures for the protection of information and the
implementation of backup facilities in the event of errors or
malfunction of the Software or Equipment.
(c) Customer shall document and promptly report all errors or
malfunctions of the Software to Sagent. Customer shall take all
steps necessary to carry out procedures for the rectification of
errors or malfunctions within a reasonable time after such
procedures have been received from Sagent.
(d) Customer shall maintain a current backup copy of all programs
and data.
(e) Customer shall properly train its personnel in the Use and
application of the Software and the Equipment on which it is
used.
6.9 Maintenance Fee. The Maintenance Fee for each calendar year of
Maintenance and Support will be 15% of the list price for the
Software, as set forth in Sagent's price list in effect as of the
Effective Date. The Maintenance Fee is due and payable in full in
advance within thirty (30) days after the date of delivery of the
Software. Any amounts not paid within thirty (30) days will be subject
to interest of 1% per month, which interest will be immediately due
and payable. Each calendar year, the Maintenance Fee may be modified
by Sagent due to general price increases and/or general inflation
increases which are reflected in the Consumer Price Index, but shall,
for a period of four years from the Effective Date, in no event exceed
five percent (5%) plus the increase in the Consumer Price Index for
the applicable time period, by written notice to Customer at least
thirty (30) days prior to the end of the then-current term. In the
event of a modification of the Maintenance Fee, Customer may
discontinue Maintenance and Support. If Customer elects not to renew
Maintenance and Support, Customer may re-enroll only upon payment of
the annual Maintenance Fee for the coming year and fifty (50) per cent
of all Maintenance Fees that would have been paid had Customer not
terminated Maintenance and Support, which entitles Customer to all
Updates and Releases of the Software which have been released during
the same period.
6.10 Assignment of Duties. Sagent may assign its duties of Maintenance and
Support to a third party, provided that Sagent will remain responsible
for the actions of such third party. Any such assignment is subject to
Customer's consent, which consent shall not be unreasonably withheld
or delayed.
7. Limited Warranty and Limitation of Liability
7.1 Sagent warrants that the Software will perform in substantial
accordance with the Documentation for a period of one (1) year from
the Effective Date. If during this time period the Software does not
perform as warranted, Sagent shall undertake to correct the Software,
or if correction of the Software is reasonably not possible, replace
such Software free of charge. If neither of the foregoing is
commercially practicable, Sagent shall terminate this Agreement and
refund to Customer the License Fee. In addition, Sagent warrants that
the media on which the Software is distributed will be free from
defects in materials and workmanship under normal use for a period of
ninety (90) days from the Effective Date. Sagent will replace any
defective media returned to Sagent within the 90-day period. The
foregoing are Customer's sole and exclusive remedies for breach of
warranty. The warranty set forth above is made to and for the benefit
of Customer only. The warranty will apply only if:
(a) the Software has been properly installed and used at all times
and in accordance with the instructions for Use; and
(b) no modification, alteration or addition has been made to the
Software by persons other than Sagent or Sagent's authorized
representative (except pursuant to the authorized Use of the
Sagent Tools specified in Schedule A); and
(c) Customer has not requested modifications, alterations or
additions
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to the Software that cause it to deviate from the Documentation.
7.2 Except as set forth above, Sagent makes no warranties, whether
express, implied, or statutory regarding or relating to the Software
or the Documentation, or any materials or services furnished or
provided to Customer under this Agreement, including Maintenance and
Support. Sagent specifically disclaims all implied warranties of
merchantability and fitness for a particular purpose with respect to
the Software, Documentation, and said other materials and services,
and with respect to the use of any of the foregoing. In addition,
Sagent disclaims any warranty with respect to, and will not be liable
or otherwise responsible for, the operation of the Software if
programs are made through the use of non-Sagent software that change,
or are able to change, the data model of the Software.
7.3 In no event will Sagent be liable for any loss of profits, loss of
use, business interruption, loss of data, cost of cover or indirect,
special, incidental or consequential damages of any kind in connection
with or arising out of the furnishing, performance or use of the
Software or services performed hereunder, whether alleged as a breach
of contract or tortious conduct, including negligence, even if Sagent
has been advised of the possibility of such damages. In addition,
Sagent will not be liable for any damages caused by delay in delivery
or furnishing the Software or said services. Sagent's liability under
this Agreement for direct, indirect, special, incidental and/or
consequential damages of any kind, including, without limitation,
restitution, will not, in any event, exceed the License Fee paid by
Customer to Sagent under this Agreement.
7.4 Customer shall indemnify and hold Sagent harmless from and against any
costs, losses, liabilities and expenses (including reasonable
attorneys fees) arising out of third party claims related to Customers
Use of the Software under this Agreement.
7.5 Any pre-production versions of the Software distributed to Customer
are delivered "as-is," without any express or implied warranties.
7.6 The provisions of this Section 7 allocate risks under this Agreement
between Customer and Sagent. Sagent's pricing reflects this allocation
of risks and limitation of liability.
7.7 No action arising out of any breach or claimed breach of this
Agreement or transactions contemplated by this Agreement may be
brought by either party more than one (1) year after the cause of
action has accrued. For purposes of this Agreement, a cause of action
will be deemed to have accrued when a party knew or reasonably should
have known of the breach or claimed breach.
7.8 No employee, agent, representative or affiliate of Sagent has
authority to bind Sagent to any oral representations or warranty
concerning the Software. Any written representation or warranty not
expressly contained in this Agreement will not be enforceable.
8. Indemnification for Infringement
8.1 Sagent shall, at its expense, defend or settle any claim, action or
allegation brought against Customer that the Software infringes any
patent, copyright, trade secret or other proprietary right of any
third party and shall pay any final judgments awarded or settlements
entered into; provided that Customer gives prompt written notice to
Sagent of any such claim, action or allegation of infringement and
gives Sagent the authority to proceed as contemplated herein. Sagent
will have the exclusive right to defend any such claim, action or
allegation and make settlements thereof at its own discretion, and
Customer may not settle or compromise such claim, action or
allegation, except with prior written consent of Sagent. Customer
shall give such assistance and information as Sagent may reasonably
require to settle or oppose such claims. In the event any such
infringement, claim, action or allegation is brought or threatened,
Sagent may, at its sole option and expense:
(a) procure for Customer the right to continue Use of the Software or
infringing part thereof; or
(b) modify or amend the Software or infringing part thereof, or
replace the Software or infringing part thereof with other
software having substantially the same or better capabilities;
or, if neither of the foregoing is commercially practicable.
(c) terminate this Agreement and repay to Customer a portion, if any,
of the License Fee equal to the amount paid by
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Customer less one-forty-eighth (1/48) thereof for each month or portion thereof
that this Agreement has been in effect. Sagent and Customer will then be
released from any further obligation to the other under this Agreement, except
for the obligations of indemnification provided for above and such other
obligations that survive termination.
8.2 The foregoing obligations shall not apply to the extent the
infringement arises as a result of modifications to the Software made
by any party other than Sagent or Sagent's authorized representative.
The foregoing obligations shall not apply to the Third Party Software.
8.3 The foregoing states the entire liability of Sagent with respect to
infringement of any patent, copyright, trade secret or other
proprietary right.
9. Confidential Information
9.1 Each party acknowledges that the Confidential Information constitutes
valuable trade secrets and each party agrees that it shall use
Confidential Information solely in accordance with the provisions of
this Agreement and will not disclose, or permit to be disclosed, the
same, directly or indirectly, to any third party without the other
party's prior written consent. Each party agrees to exercise due care
in protecting the Confidential Information from unauthorized use and
disclosure. However, neither party bears any responsibility for
safeguarding information that (i) is publicly available, (ii) already
in the other party's possession and not subject to a confidentiality
obligation, (iii) obtained by the other party from third parties
without restrictions on disclosure, (iv) independently developed by
the other party without reference to Confidential Information, or (v)
required to be disclosed by order of a court or other governmental
entity. Nothing herein will prevent routine discussions by the parties
that normally take place in a "user group" context.
9.2 In the event of actual or threatened breach of the provisions of
Section 9.1, the non-breaching party will have no adequate remedy at
law and will be entitled to immediate and injunctive and other
equitable relief, without bond and without the necessity of showing
actual money damages.
10. Term and Termination
10.1 This Agreement will take effect on the Effective Date and will remain
in force until terminated in accordance with this Agreement.
10.2 This Agreement may be terminated by Customer upon thirty (30) days'
prior written notice to Sagent, with or without cause, provided that
no such termination will entitle Customer to a refund of any portion
of the License Fee or Maintenance Fee.
10.3 Sagent may, by written notice to Customer, terminate this Agreement if
any of the following events ("Termination Events") occur, provided
that, except as set forth in Section 10.3(d) below, no such
termination will entitle Customer to a refund of any portion of the
License Fee or Maintenance Fee:
(a) Customer fails to pay any amount due to Sagent within thirty (30)
days after Sagent gives Customer written notice of such
non-payment; or
(b) Customer is in material breach of any non-monetary term,
condition or provision of this Agreement, which breach, if
capable of being cured, is not cured within thirty (30) days
after Sagent gives Customer written notice of such breach; or
(c) Customer (i) terminates or suspends its business activities, (ii)
becomes insolvent, admits in writing its inability to pay its
debts as they mature, makes an assignment for the benefit of
creditors, or becomes subject to direct control of a trustee,
receiver or similar authority, or (iii) becomes subject to any
bankruptcy or insolvency proceeding under federal or state
statutes; or
(d) Sagent elects to refund Customer's fees in accordance with
Section 7.1 or Section 8.1(c).
If any termination Event occurs, termination will become effective
immediately or on the date set forth in the written notice of
termination. Termination of this Agreement will not affect the
provisions regarding Customer's or Sagent's treatment of Confidential
Information, provisions relating to the payment of amounts due, or
provisions limiting or disclaiming Sagent's liability, which
provisions will survive termination of this Agreement.
10.4 Within fourteen (14) days after the date of termination or
discontinuance of this Agreement for any reason whatsoever, Customer
shall return the Software, derivative works and all copies
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thereof, in whole or in part, all related Documentation and all copies thereof,
and any other Confidential Information in its possession. Customer shall
furnish Sagent with a certificate signed by an executive officer of Customer
verifying that the same has been done.
11. Non-assignment/Binding Agreement
Neither this Agreement nor any rights under this Agreement may be assigned
or otherwise transferred by Customer, in whole or in part, whether
voluntary or by operation of law, including by way of sale of assets,
merger or consolidation, without the prior written consent of Sagent, which
consent will not be unreasonably withheld. Subject to the foregoing, this
Agreement will be binding upon and will inure to the benefit of the parties
and their respective successors and assigns.
12. Notices
Any notice required or permitted under the terms of this Agreement or
required by law must be in writing and must be (a) delivered in person, (b)
sent by first class registered mail, or air mail, as appropriate, (c) sent
by overnight air courier, or (d) by facsimile, in each case properly posted
to the appropriate address set forth below. Either party may change its
address for notice by notice to the other party given in accordance with
this Section. Notices will be considered to have been given at the time of
actual delivery in person, three (3) business days after deposit in the
mail as set forth above, one (1) day after delivery to an overnight air
courier service, or one (1) day after the moment of transmission by
facsimile.
13. Miscellaneous
13.1 Force Majeure. Neither party will incur any liability to the other
party on account of any loss or damage resulting from any delay or
failure to perform all or any part of this Agreement if such delay or
failure is caused, in whole or in part, by events, occurrences, or
causes beyond the control and without negligence of the parties. Such
events, occurrences, or causes will include, without limitation, acts
of God, strikes, lockouts, riots, acts of war, earthquakes, fire and
explosions, but the inability to meet financial obligations is
expressly excluded.
13.2 Waiver. Any waiver of the provisions of this Agreement or of a
party's rights or remedies under this Agreement must be in writing to
be effective. Failure, neglect, or delay by a party to enforce the
provisions of this Agreement or its rights or remedies at any time,
will not be construed and will not be deemed to be a waiver of such
party's rights under this Agreement and will not in any way affect
the validity of the whole or any part of this Agreement or prejudice
such party's right to take subsequent action. Except as expressly
stated in this Agreement, no exercise or enforcement by either party
of any right or remedy under this Agreement will preclude the
enforcement by such party of any other right or remedy under this
Agreement or that such party is entitled by law to enforce.
13.3 Severability. If any term, condition, or provision in this Agreement
is found to be invalid, unlawful or unenforceable to any extent, the
parties shall endeavor in good faith to agree to such amendments that
will preserve, as far as possible, the intentions expressed in this
Agreement. If the parties fail to agree on such an amendment, such
invalid term, condition or provision will be severed from the
remaining terms, conditions and provisions, which will continue to be
valid and enforceable to the fullest extent permitted by law.
13.4 Entire Agreement. This Agreement (including the Schedules and any
addenda hereto signed by both parties) contains the entire agreement
of the parties with respect to the subject matter of this Agreement
and supersedes all previous communications, representations,
understandings and agreements, either oral or written, between the
parties with respect to said subject matter, except as provided in
Section 1.3 with respect to the definition of "Confidential
Information."
13.5 Standard Terms of Customer. No terms, provisions or conditions of any
purchase order, acknowledgment or other business form that Customer
may use in connection with the acquisition or licensing of the
Software will have any effect on the rights, duties or obligations of
the parties under, or otherwise modify, this Agreement, regardless of
any failure of Sagent to object to such terms, provisions or
conditions.
13.6 Amendments to this Agreement. This Agreement may not be amended,
except by a writing signed by both parties.
13.7 Sagent's prior consent. Unless expressly provided otherwise in this
Agreement, any prior consent of Sagent that is required before
Customer may take an action may be granted or withheld in Sagent's
sole and absolute discretion.
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13.8 Export of Software. Customer may not export or re-export the Software
without the prior written consent of Sagent and without the
appropriate United States and foreign government licenses.
13.9 Public Announcements. Customer acknowledges that Sagent may desire to
use its name in press releases, product brochures and financial
reports indicating that Customer is a customer of Sagent, and
Customer agrees that Sagent may use its name in such a manner.
13.10 Counterparts. This Agreement may be executed in counterparts, each
of which so executed will be deemed to be an original and such
counterparts together will constitute one and the same agreement.
13.11 Applicable law. This Agreement will be interpreted and construed in
accordance with the laws of the State of California and the United
States of America, without regard to conflict of law principles.
13.12 Headings. Section and Schedule headings are for ease of reference
only and do not form part of this Agreement.
13.13 Non-solicitation. Customer acknowledges and agrees that the employees
and consultants of Sagent who perform the Maintenance and Support
Services or other services are a valuable asset to Sagent and are
difficult to replace. Accordingly, Customer agrees that, for a period
of twelve (12) months after the completion of the Maintenance and
Support Services or other services, it will not offer employment as
an employee, independent contractor, or consultant to any Sagent
employee or consultant who performs any of the Maintenance and
Support Services or other services.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
(CUSTOMER) SAGENT TECHNOLOGY, INC.
- -------------------------
By: By:
-------------------------------- --------------------------------
- ----------------------------------- -----------------------------------
(print name and title) (print name and title)
Date: Date:
---------------- -----------------
Address: Address:
- ----------------------------------- -----------------------------------
- ----------------------------------- -----------------------------------
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SCHEDULE A
SOFTWARE AND LICENSE FEE
[To be completed by listing the Software
to be licensed, including language, modules,
development tools and any Third Party Software
and License Fee]
<PAGE> 68
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement ("Agreement") is entered into this ___
day of ________, 1998 (the "Effective Date"), by and between Sagent Technology,
Inc., a California corporation, having its principal place of business at 2225
E. Bayshore Road, Suite 100, Palo Alto, CA 94303 ("Sagent") and ________________
("Customer").
RECITALS
A. Sagent has developed and owns certain technology and software for
[DESCRIBE SOFTWARE] and has expertise in that field.
B. Customer wishes to engage Sagent's services on the terms set
forth below.
AGREEMENT
In consideration of the foregoing and the mutual promises contained herein
the parties agree as follows:
1. DEFINITIONS.
1.1 "Sagent Software" shall mean the object code form of any of
Sagent's software products marketed generally and any custom software
developed by Sagent.
1.2 "Customer Materials" shall mean the materials, information,
software modules, if any, owned or licensed (from third parties) by Customer
and other items specified in the Statement of Work.
1.3 "Intellectual Property" means any and all (by whatever name or
term known or designated) tangible and intangible and now known or hereafter
existing: Copyrights (including derivative works, as defined by the United
States Copyright Act, thereof), trademarks, trade names, trade secrets,
know-how, patents, any other intellectual and industrial property and
proprietary rights, of every kind and nature throughout the universe and
however designated, and including all registrations, applications, renewals,
and extensions thereof.
1.4 "Statement of Work" shall mean that document specifying the
consulting services to be provided by Sagent under this Agreement, including
setting forth specifications, deliverables, a performance schedule, Customer
Materials required and pricing and payment terms for the services provided
under this Agreement. The Statement of Work shall be mutually agreed upon,
attached as Exhibit A, and may be amended in writing by the parties from time
to time pursuant to this Agreement.
<PAGE> 69
2. CONSULTING SERVICES.
2.1 Consulting Services. Sagent shall use reasonable and diligent
efforts to provide consulting services as set forth in the Statement of Work
("Services").
2.2 Periodic Review Meetings. Each party shall appoint a project
manager who will coordinate and act as liaison with the other party with respect
to the Statement of Work. The parties' respective project managers shall
participate in project review meetings as set forth in the Statement of Work or
otherwise by mutual agreement. Such discussions shall be for information
purposes only and shall not be binding upon either party other than as
expressly set forth in this Agreement or any amendment hereto. The Project
Managers shall also have primary responsibility for coordinating all major
decisions related to this Agreement, as well as the day-to-day management of
the work to be performed under this Agreement.
2.3 Modifications. During the performance of the Services, the
parties agree to reasonably modify the Statement of Work at the request of
either party, provided that if the modifications would materially increase
either party's obligations under this Agreement (including Sagent's cost or
work effort) then changes shall be made only upon mutual written agreement of
both parties.
2.4 Customer Materials. Customer shall provide to Sagent all
Customer Materials, reasonably required for use in providing the Services as
identified in the Statement of Work and will cause any third party vendor to
cooperate with Sagent as necessary to complete the services. Customer shall
provide Sagent personnel with reasonable access throughout Customer's site and
to any equipment ("Site Materials") reasonably necessary to perform the
Services. Customer hereby grants Sagent a nonexclusive, nontransferable
license to use the Customer Materials and Site Materials and to copy and modify
the Customer Materials as may be reasonably necessary to fulfill Sagent's
obligations hereunder. Customer shall indemnify and hold Sagent harmless from
any damages, liabilities, costs and expenses (including reasonable attorneys'
fees) incurred by Sagent as a result of any claim that the Customer Materials
or the Site Materials, when used within the scope of this Agreement, infringes
or violates the rights of any third party.
2.5 Customer Delays. If Customer, or any third party acting on
Customer's behalf does not provide any required item or service to Sagent on a
timely basis in accordance with the schedule set forth in the Statement of Work,
then the dates set forth which have been directly or indirectly affected by
such delay shall be extended as necessary to account for such delay.
3. DELIVERABLES.
Sagent shall deliver any deliverable items specifically identified in the
Statement of Work ("Deliverables") to Customer in accordance with the Statement
of Work ("Delivery"). As soon as practicable following the Delivery, but in no
event more than thirty (30) days from Delivery, Customer shall review, test,
and evaluate the Deliverable for conformity with the requirements contained in
the Statement of Work and shall provide Sagent with a written acceptance
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("Acceptance") of the Deliverable, or a written statement of defects to be
corrected. Sagent shall promptly correct such defects, if any, and return the
Deliverable to Customer for retesting, review and reevaluation, and Customer
shall, within ten (10) days of such redelivery, again provide Sagent with a list
of defects which need to be corrected, if any. The foregoing procedure shall be
repeated until Acceptance of the Deliverable or the parties mutually agree in
writing to terminate this Agreement. Failure to provide a statement of defects
within the applicable time period will be deemed Acceptance.
4. OWNERSHIP OF PROPRIETARY RIGHTS.
4.1 Existing Technology. Subject to the licenses granted herein,
each party shall have and retain exclusive ownership of its own technology,
information, data, know-how, ideas, designs, software, inventions,
documentation, resources and all other tangible and intangible items, which
exist as of the Effective Date, and all Intellectual Property related therein
and thereto ("Existing Technology").
4.2 Sagent Ownership. Customer agrees that the Sagent Software and
all software, works of authorship, data, inventions and discoveries developed,
reduced to practice, or conceived by Sagent under this Agreement, alone or in
conjunction with Customer or third parties, (collectively, "Inventions") and
Intellectual Property therein and thereto are the sole property of Sagent. To
the extent that Customer would otherwise have any such rights, Customer agrees
to assign (or cause to be assigned) and hereby does assign fully to Sagent all
worldwide right, title and interest to the Inventions and all Intellectual
Property related therein and thereto.
4.3 Further Assurances. At any time or from time to time on and
after the date of this Agreement, at the request of a party, the other party
shall (a) deliver such records, data or other documents consistent with the
provisions of this Agreement, (b) execute, and deliver or cause to be
delivered, all such assignments, consents, documents or further instruments of
transfer or license and (c) take or cause to be taken all such other actions,
as a party may reasonably deem necessary or desirable in order for such party
to obtain the full benefits of this Agreement and the transactions contemplated
hereby.
4.4 Right to Develop Independently. Customer understands and
acknowledges that Sagent is in the business of developing products and providing
consulting services similar to those provided for Customer for other parties
generally based upon the same computer software, tools and knowledge base and
Customer agrees that nothing in this Agreement will impair Sagent's right to
provide the same services or develop for itself or others deliverables
substantially similar to, or performing the same or similar functions as the
Deliverables under this Agreement, subject to Sagent's obligations under
Section 8 (Confidential Information).
5. LICENSE.
Any software provided under this Agreement shall be subject to a separate
license agreement between Customer and Sagent as identified in Exhibit B.
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6. FEES.
6.1 Rates. In consideration for performing the Services, Customer
shall pay Sagent the fees set forth in the Statement of Work ("Fees"). If no
Fees are stated, the Services will be provided on a time and materials basis at
Sagent's current rates at the time the Services are performed. Customer shall
also reimburse Sagent for the reasonable actual travel and living expenses of
its personnel engaged in the performance of the Services hereunder at locations
other than Sagent's facilities, together with other reasonable out-of-pocket
expenses incurred by Sagent in performing the Services.
6.2 Payment Dates. Fees shall be payable upon receipt by the
Customer of the related invoice. Any amounts not paid within thirty (30) days
shall accrue interest at the rate of 1.5% per month or the highest rate
permitted by applicable law, whichever is lower. All Fees quoted and payments
made hereunder shall be in U.S. Dollars.
6.3 Taxes. Customer shall be responsible for all sales taxes, use
taxes and similar taxes and charges of any kind imposed by any federal, state
or local governmental entity for products and services provided under this
Agreement, excluding only taxes based solely upon Sagent's net income. When
Sagent has the legal obligation to pay or collect such taxes, the appropriate
amount shall be invoiced to and paid by Customer unless Customer provides
Sagent with a valid tax exemption certificate authorized by the appropriate
taxing authority.
7. LIMITATION OF LIABILITY. IN NO EVENT WILL SAGENT'S LIABILITY ARISING OUT
OF THIS AGREEMENT EXCEED THE SUM OF THE FEES ACTUALLY PAID BY CUSTOMER
HEREUNDER. IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY
FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES,
OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND UNDER
ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE; PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT
APPLY TO ANY BREACH BY CUSTOMER OF ITS CONFIDENTIALITY OBLIGATIONS. THE PARTIES
AGREE THAT THIS SECTION REPRESENTS A REASONABLE ALLOCATION OF RISK.
8. CONFIDENTIALITY.
8.1 Definition. The term "Confidential Information" shall mean any
information disclosed by one party to the other party in connection with this
Agreement which is disclosed in writing, orally or by inspection and is
identified as "Confidential" or "Proprietary" or which a party has reason to
believe is treated as confidential by the other party. Any information, in
whatever form, disclosed by Sagent that relates to the Custom Software and that
is not publicly known is "Confidential Information."
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<PAGE> 72
8.2 OBLIGATION. Each party shall treat as confidential all
Confidential Information received from the other party, shall not use such
Confidential Information except as expressly permitted under this Agreement,
and shall not disclose such Confidential Information to any third party without
the other party's prior written consent. Each party shall take reasonable
measure to prevent the disclosure and unauthorized use of Confidential
Information of the other party.
8.3 EXCEPTIONS. Notwithstanding the above, the restrictions of this
Section shall not apply to information that:
8.3.1 was independently developed by the receiving party
without any use of the Confidential Information of the other party and by
employees or other agents of (or independent contractors hired by) the
receiving party who have not been exposed to the Confidential Information;
8.3.2 becomes known to the receiving party, without
restriction, from a third party without breach of this Agreement and who had a
right to disclose it;
8.3.3 was in the public domain at the time it was disclosed
or becomes in the public domain through no act or omission of the receiving
party;
8.3.4 was rightfully known to the receiving party, without
restriction, at the time of disclosure; or
8.3.5 is disclosed pursuant to the order or requirement of a
court, administrative agency, or other governmental body; provided, however,
that the receiving party shall provide prompt notice thereof to the other party
and shall use its reasonable best efforts to obtain a protective order or
otherwise prevent public disclosure of such information.
8.4 RESIDUALS. Notwithstanding this Section, each party shall have
the right to exploit and use Residuals for any purpose. "Residuals" shall mean
that confidential information which is of general application in nature and not
peculiar to the design or specification information provided by either party
which is retained by an employee of either party in an intangible form in the
normal course of their work, where no effort has been made to retain or
memorialize this information in any way, and without further reference to any
material that is written, stored in magnetic, electronic or physical form, or
otherwise fixed.
8.5 REMEDIES. Each party acknowledges that its breach of this
Section would cause irreparable harm to the other party and in addition to any
other remedies to which a party may be legally entitled, the nonbreaching party
shall have a right to obtain immediate injunctive relief in the event of a
breach of this section by the other party.
9. TERM AND TERMINATION.
9.1 TERM. The term of this Agreement shall commence on the Effective
Date and shall continue in force until terminated as follows:
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9.1.1 If Customer fails to make any payment due within
thirty (30) days after receiving written notice from Sagent that such payment
is delinquent; Sagent may terminate this Agreement on written notice to
Customer at any time following the end of such thirty (30) day period.
9.1.2 If either party materially breaches any term or
condition of this Agreement and fails to cure that breach within thirty (30)
days after receiving written notice of the breach, the nonbreaching party may
terminate this Agreement on written notice at any time following the end of
such thirty (30) day period.
9.1.3 This Agreement shall terminate automatically without
notice and without further action by Sagent in the event Customer becomes
insolvent (i.e., becomes unable to pay its debts in the ordinary course of
business as they come due) or makes a general assignment for the benefit of
creditors.
9.2 EFFECT OF TERMINATION. Upon the termination of this Agreement for
any reason: Customer shall immediately pay to Sagent all amounts due and
outstanding as of the date of such termination or expiration; and shall return
to the other party the originals and all copies of the other party's
Confidential Information.
9.3 SURVIVAL. The following sections shall survive the termination,
for any reason, of this Agreement: 4, 6, 7, 8, 9 and 10.
10. MISCELLANEOUS.
10.1 ASSIGNMENT. Customer may not assign any of its rights or
delegate any of its obligations under this Agreement, whether by operation of
law or otherwise, without the prior express written consent of Sagent. Subject
to the foregoing, this Agreement will bind and inure to the benefit of the
parties, their respective successors and permitted assigns.
10.2 WAIVER AND AMENDMENT. No modification, amendment or waiver of
any provision of this Agreement shall be effective unless in writing and
signed by the party to be charged. No failure or delay by either party in
exercising any right, power, or remedy under this Agreement, except as
specifically provided herein, shall operate as a waiver of any such right,
power or remedy.
10.3 GOVERNING LAW; ARBITRATION. This Agreement shall be governed by
the laws of the State of California, USA, excluding conflict of laws
provisions. Any disputes arising out of this Agreement shall be resolved by
binding arbitration in San Mateo County, California in accordance with the
rules of the American Arbitration Association. The arbitrator shall have the
power to grant injunctive relief.
10.4 NOTICES. All notices, demands or consents required or permitted
under this Agreement shall be in writing. Notice shall be considered delivered
and effective when (a) personally delivered; (b) the day following transmission
if sent by telex, telegram or facsimile
-6-
<PAGE> 74
followed by written confirmation by registered overnight carrier or certified
United States mail; or (c) one (1) day after posting when sent by registered
private overnight carrier (e.g., DHL, Federal Express, etc.); or (d) five (5)
days after posting when sent by certified United States mail. Notice shall be
sent to the parties at the addresses set forth on the first page of this
Agreement or at such other address as shall be given by either party to the
other in writing. Notices to Customer shall be addressed to the attention of the
License Administrator. Notices to Sagent shall be addressed to the attention of
Customer Service.
10.5 Independent Contractors. The parties are independent contractors.
Neither party shall be deemed to be an employee, agent, partner or legal
representative of the other for any purpose and neither shall have any right,
power or authority to create any obligation or responsibility on behalf of the
other.
10.6 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be contrary to law, such provision shall be changed
and interpreted so as to best accomplish the objectives of the original
provision to the fullest extent allowed by law and the remaining provisions of
this Agreement shall remain in full force and effect.
10.7 Complete Understanding. This Agreement, including all Exhibits
attached hereto, constitutes the final, complete and exclusive agreement between
the parties with respect to the subject matter hereof, and supersedes any prior
or contemporaneous agreement.
10.8 Compliance with Laws. Customer shall comply with all laws and
regulations applicable to Customer's activities under this Agreement.
-7-
<PAGE> 75
10.9 Force Majeure. Except for Customer's obligations to pay Sagent
hereunder, neither party shall be liable to the other party for any failure or
delay in performance caused by reasons beyond its reasonable control,
including but not limited to acts of God, earthquakes, strikes or shortages, of
materials.
Customer Sagent Technology, Inc.
By:________________________ By:________________________
Name:______________________ Name:______________________
Title:_____________________ Title:_____________________
Date:______________________ Date:______________________
-8-
<PAGE> 76
EXHIBIT A
STATEMENT OF WORK
-i-
<PAGE> 77
EXHIBIT B
SOFTWARE LICENSE
-ii-
<PAGE> 78
[SAGENT LOGO]
EVALUATION AGREEMENT
- --------------------------------------------------------------------------------
This Evaluation Agreement (No. ______) is between Sagent Technology, Inc., 2225
East Bayshore Rd. Suite 100, Palo Alto, CA 94303, U.S.A. ("us"), and
- --------------------------------------------------------------------------------
("you")
- --------------------------------------------------------------------------------
1. We license you to install and use the Software during the Evaluation
Period only.
"We," "our" and "us" mean Sagent Technology, Inc. "Software" means only our
computer program(s) listed in the Schedule, any documentation ("Documentation")
and updates that we may deliver to you, and portions and copies in any form.
"Schedule" means any schedules that you and we sign that specifically refer to
this agreement. The "Evaluation Period" is the time period listed in the
Schedule; if none if listed there, the Evaluation Period is 30 days from the
effective date of the applicable Schedule.
2. You will pay us the License Fee listed in the Schedule if applicable.
If there is a license fee for the evaluation of our Software listed in the
Schedule then you will pay us the fees net 30 days from receipt of this invoice.
3. We disclaim all representation, warranties, and liability regarding the
Software that you will be evaluating. You accept it "AS IS."
You are responsible for installing the Software, and for determining whether
the Software is suitable, secure, and reliable for your purposes. We will
provide you telephone hotline support at no extra charge during the Evaluation
Period only, but any other maintenance, support or full Software License must
be purchased separately. Telephone support hours are from 6 am to 5 pm Pacific
Standard Time. We do not warrant that the Software is error-free or that any
errors will be corrected. THE FOREGOING IS IN LIEU OF ALL WARRANTIES OR
CONDITIONS TO YOU OR ANY THIRD PARTY, EXPRESS OR IMPLIED, RELATED TO THE
SOFTWARE OR ANY SERVICES WE MAY PROVIDE, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTY OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR ARISING BY STATUTE, LAW OR TRADE DEALING OR USAGE. We are not
liable for incidental, special or consequential damages for any reason
(including loss of data or other business or property damage), even if
foreseeable, and our liability in all events will not exceed the License Fee
that you have paid, if any. Your SOLE REMEDY for any defects in the Software is
to return the Software and all copies to us for a full refund of the License
Fee you have paid. You agree to implement backup and recovery procedures
adequate to prevent loss due to malfunction.
4. You will respect our copyright in the Software.
You may make one copy of the Software programs for back-use only. You will put
our copyright notices on all copies. You may not copy the Documentation.
5. You will respect our trade secrets and other proprietary rights in the
Software.
You agree that we have and will keep title, copyright, and all other
proprietary rights in the Software. You will keep the Software in a safe place.
You will use best efforts to ensure that your employees and others with access
to the Software comply with this agreement. You have no right to use, examine
or recreate the Software source code, which is our trade secret. You agree not
to alter, decompile, or reverse engineer the Software. You will treat our
Software and accompanying documentation as Confidential Information. You will
protect the Confidential Information from unauthorized use, dissemination or
publication. You will protect the Confidential Information by using the same
degree of care as you use to protect your own confidential information of a
like nature, but no less than a reasonable degree of care. You are not required
to protect information that (a) you possessed before you received it from us,
(b) is or becomes a matter of public knowledge through no fault of your own;
(c) you rightfully receive from a third party without a duty of
confidentiality; (d) we disclose to a third party without imposing a duty of
confidentiality; (e) you develop independently; or (f) the law requires or we
give written permission to be disclosed. You may use the Confidential
Information only for the purposes of evaluating and reviewing our Software.
<PAGE> 79
6. You may not transfer the Software.
Any attempted assignment, sub-license or transfer by you of the Software is
void without our written permission.
7. This license agreement remains in effect unless terminated.
You may terminate this agreement at any time. We may terminate this agreement
if you breach it. At the end of the applicable Evaluation Period, or upon
termination if earlier, you will return the Software, Documentation and all
copies to us. Should you not return the software, then you authorize us in our
reasonable discretion to charge you the applicable full system license fee for
any Software and or Documentation that you do not return to us in unmarked
condition, suitable for evaluation by another customer.
8. The following terms also apply.
This is the full and final agreement between you and us, and supercedes any
earlier promises, representations or agreements relating to the subject of this
agreement. This agreement may only be changed if you and our authorized
representative do so in writing. Waivers not given in writing may be revoked at
any time without liability. Invalid provisions do not affect the enforceability
of the others. We are entitled to injunctive relief for violations of our
proprietary rights. We reserve all rights not granted specifically in this
agreement.
SAGENT TECHNOLOGY, INC.
Signed:_______________________________________________________________________
Name:_________________________________________________________________________
Title:________________________________________________________________________
Effective Date: ______________________________________________________________
You:__________________________________________________________________________
Signed:_______________________________________________________________________
Name:_________________________________________________________________________
Title:________________________________________________________________________
<PAGE> 80
[SAGENT LOGO]
EVALUATION AGREEMENT SCHEDULE
- ----------------------------------
SCHEDULE #1 EVALUATION PERIOD ENDS __________
Payment and Delivery Terms if Applicable: If you do not purchase the software
you are required to return it. We will be entitled to physically repossess the
Software from your premises in the event of nonpayment or termination of the
evaluation agreement.
Contact Persons
Your Primary Contact: Name:______________ Phone:____________
Your Alternate Contact: Name:______________ Phone:____________
Our Primary Contact: Name:______________ Phone:____________
Other Applicable Terms:______________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
All terms of the evaluation agreement referred to above are incorporated herein
and will apply to your orders relating to this Schedule.
<PAGE> 81
EXHIBIT H
SAGENT'S STANDARD VAR AGREEMENT
including its respective exhibits A and B
<PAGE> 82
This Agreement is between Sagent Technology Inc. 2225 E. Bayshore Rd. Suite
100, Palo Alto, CA 94303, U.S.A. ("PROVIDER") and _________________________
________________________________________________________("Distributor").
1. PROVIDER appoints you an authorized non-exclusive distributor of the
Software in the Territory.
"We," "our" and "us" mean Sagent Technology Inc. "Software" means only our
computer program(s) listed in the Schedule and any related documentation
("Documentation"); we may change or discontinue any or all Software
products or versions at any time without notice or liability. "Schedule"
means any schedules that you and we sign that specifically refer to this
Agreement. The "Territory" means the territory set forth in the Schedule;
you agree not to sublicense or export the Software outside the Territory,
or advertise, solicit orders, or establish or maintain a branch, sales
office or distribution depot for the Software, outside the Territory. Your
appointment is non-exclusive; you understand that we may appoint or license
other distributors, Master VARs, VARs, OEMs, dealers or end-users in the
Territory directly without notice or liability to you.
2. Distributor will vigorously market the Software at your expense.
Distributor will maintain at all times full-time, trained sales, marketing,
technical and service staff, including at least one Sagent salesperson, one
dedicated Sagent systems engineer, and one Sagent technical support
engineer, and all appropriate equipment and software necessary to
demonstrate the Software, provide training and support, attend sales
events, and otherwise promote the Software to end users.
3. Distributor may demonstrate the Software at your premises or at a Customer
Location.
Distributor may install and run the Software for demonstration use on its
own computer(s) or on prospective customer's computer(s). Distributor must
remove demonstration copies of the Software from a customer's computer not
more than 60 days after installation, unless Sagent otherwise agree in
writing. Sagent will charge Distributor the applicable License Fees for
demonstration copies of the Software and/or Documentation that has not been
removed from a customer's site. Sagent reserves the right to require that
demonstration Software have a Non-Disclosure Agreement along with an
Evaluation Agreement with customers evaluating the Software.
4. Distributor may develop applications that work with the Sagent Software.
Prior to developing an application the Distributor must purchase at least
one license for the developer version of the Software from Sagent for each
development site and may purchase this copy at 50% discount of the then
current pricing. Upon purchase of a developer license, you may use that
licensed Software product in order to develop, test, verify and support
your won application software to work with the Sagent Software. Distributor
may combine Software that is subject to such a developer license with your
own application software, but you may not modify any Software and you must
maintain all Software in complete unedited form.
5. Distributor may sublicense end-users the Software.
Pursuant to the terms of this Agreement, you may market and sublicense the
Software to end-users in the Territory who would use it for internal data
processing. Distributor may sublicense the Software yourself or through
other VARs within the Territory that we have authorized in writing and that
have agreed in writing to be bound by all terms of our standard VAR
agreement. Upon our receipt and verification of a copy of each such VAR
agreement, we will provide you with a development kit for each Software
product licensed by the approved VAR. Distributor may only sublicense
developer and runtime versions of the Software for use only with the
products specified in the Schedule. Distributor may not, however,
sublicense any Software unless Distributor has already purchased their own
license. Distributor may sublicense the Software to end-users embedded in
or bundled with your hardware, systems or software applications, or as a
standalone product. Distributor will require each sublicensee to enter into
a written sublicense and warranty agreement containing substantially the
terms set forth in the Schedule. Distributor must secure an access code
from us for each customer for which the Software is sublicensed.
Distributor is free unilaterally to determine your own resale prices for
the Software and are not obligated to pay us for value added services you
create. None of our employees or other representatives
<PAGE> 83
is authorized to inhibit your pricing discretion; you agree to notify us
promptly, in writing, if they attempt to do so.
6. Distributor will make records and reports of Software installations and
sublicenses.
Distributor will make and keep, and give us not less than 10 days after the
end of each calendar month, a complete and accurate report of the type,
quantities and customer information for each copy of the Software sold,
including the Distributors, and those of sublicensees and other customers.
This report will also include the quantities of Software products
purchased, the amount of such purchases, and the name and address of each
sublicensee.
7. Distributor will pay us the License Fees listed in the Schedule.
Distributor will pay us the applicable License Fee for each developer
license or other license we give you to use the Software, and each
sublicense you grant for the Software to be used. The "License Fee" is the
applicable amount set forth in the Schedule. Sagent may change License Fees
at any time. The Software is delivered FOB our point of shipment.
Distributor is responsible for paying all taxes, duties, shipping,
insurance and other such fees on the Software, except taxes on our net
income. Distributor will pay on time: All sums are payable in United States
currency at our United States offices, and are due within thirty (30) days
after the date of our invoice. Late payments will be subject to interest at
1.5% per month, or the maximum allowable by law, if less. Sagent reserves
the right to change the License Fees in the event that the exchange rate
between local currency and the U.S. dollar fluctuates more than 10% during
any year of the term of this Agreement.
Sagent has the right to cancel orders and change credit or payment terms if
Distributor does not pay in full and on time and/or if your financial
position changes. Sagent can also cancel this Agreement and/or repossess
the Software from your premises for nonpayment and/or late payment. Sagent
or our business representatives have the right to inspect your records
relating to our Software during regular business hours to verify the
accuracy of your reports and License Fee payments. For purposes of ensuring
payment, we may at our option configure the Software so that unless we
later provide you with an access key to extend the use of the Software,
your continued use of the software will result in degradation of its
performance. Sagent will provide the Distributor with an access key upon
our receipt of timely payment.
If Distributor is required to withhold any taxes on amounts payable to us
under this Agreement, pursuant to the laws and regulations of the
Territory, the Distributor will be entitled to deduct and withhold such
taxes unless we furnish you duly executed forms sufficient under the laws
of the Territory to exempt sums payable to us hereunder from such taxes.
Distributor may not reduce any amount payable to us by any withholding
taxes unless you have provided us with a certificate of deduction and
withholding and a true copy of the governmental receipt establishing the
payment thereof. Distributor will obtain and provide to us on a timely
basis official tax receipts or such other evidence of payment as we may be
required to submit in order to establish our right to a foreign tax credit
against our U.S. federal income tax liability.
8. Our warranty and liability for the Software are limited.
The Software is provided "AS IS." Sagent does not warrant that the Software
is error-free, or that any errors will be corrected. Sagent warrants the
physical media and physical Documentation for each Software product we
provide to you (but not any media or Documentation distributed to you) to
be free of physical defects in materials and workmanship for a period of 30
days after it is first delivered to you. If Sagent receives notification
within the warranty period of such physical defects in material or
workmanship, and such notification is determined by Sagent to be correct,
Sagent will replace the defective media or Documentation. THE FOREGOING
WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES TO YOU OR ANY THIRD PARTY,
EXPRESS OR IMPLIED, RELATED TO THE SOFTWARE OR ANY SERVICES WE MAY PROVIDE,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY STATUTE, LAW OR TRADE
DEALING OR USAGE. Sagent is not liable to you or any third party for
incidental, special or consequential damages for any reason (including loss
of data or other business or property damage), even if foreseeable, and our
liability in all events will not exceed the applicable License Fee that you
have paid. Distributor will require each sublicensee to accept similar
warranty and liability limits. Distributor may not make any warranty or
other representations to sublicensees or others on our behalf. Sagent is
not liable for defects in your
<PAGE> 84
own application software, or for your own activities in marketing and
sublicensing the Software. Distributor agrees to implement backup and
recovery procedures adequate to prevent loss due to malfunctions.
9. Distributor will support its customers, and will purchase training and
support services from Sagent.
Distributor will purchase training, technical, Hotline and update support
from us, under the terms of our standard support programs unless otherwise
agreed by you and us in writing. Distributor is solely responsible for
installing, maintaining and supporting the Software for sublicensees and
other customers unless otherwise agreed in the Schedule. Sagent has no
obligation to provide support services except under the terms of standard
support programs purchased directly from us, or to deal with any third
party directly. Sagent's support programs are subject to change from time
to time without notice from us.
10. Distributor will respect our copyright in the Software.
Distributor will not copy the Software except as required to demonstrate
and sublicense the Software and develop your applications under the
specific terms of this Agreement, and to make adequate archival copies.
Distributor will put our proprietary and copyright notices on all copies.
Distributor may not copy the Documentation.
11. Distributor will respect our trade secrets and other proprietary rights in
the Software.
Distributor agrees that we have and will keep title, copyright, trademark
and all other proprietary rights in the Software, the Documentation, and
all portions and copies in any form. All distribution of the Software is by
license only, not sale. Distributor will keep the Software in a safe place.
Distributor will use best efforts to ensure that their employees and others
with access to the Software comply with this Agreement. Distributor will
have no right to use, examine, re-create, sublicense, or transfer the
Software source code, which is our trade secret. Distributor agrees not to
alter the Software, or make any attempt to unlock or by-pass any
access-prevention device in the Software. Distributor may use our
trademarks only as necessary to market the Software.
12. Distributor will keep our Confidential Information secret.
Confidential Information means our nonpublic business, product, and
technical information that you receive or learn during the term of your
distributorship. Distributor will not use or disclose our confidential
information except as we specifically authorize in writing. Distributor
will return our confidential information and all copies upon termination of
this Agreement, or at our request, if earlier.
13. Distributor may not transfer or sublicense the Software except as
specifically allowed under this Agreement.
Distributor may not in any event export to any country under U.S. Commerce
Department restriction, or rent or electronically transmit the Software.
Any attempted assignment, delegation, sublicense or transfer by you of the
Software, this Agreement, or your rights to anyone is void and terminates
this Agreement automatically, unless we have explicitly given permission in
this Agreement or otherwise in writing.
14. This Agreement remains in effect for one year from the Effective Date
below unless otherwise terminated earlier.
After the initial term, this Agreement can renew upon Sagent's review of
the specified minimum revenue goals attained, unless otherwise terminated.
You may terminate this Agreement at any time. Either you or we may
terminate this Agreement, without liability and with or without cause, at
the end of the initial one year term, or with 90 days' written notice at
any time thereafter. Sagent will not agree to any renewal unless you have
submitted, at least 60 days prior to the end of the term, a business plan
for the following year acceptable to us. We may terminate this Agreement
immediately if you breach it, if your principals or ownership change, or if
you enter bankruptcy, insolvency, liquidation or similar proceedings. On
termination, you will return the Software and all copies to us, give us a
final accounting, and pay all outstanding License Fees and other amounts
due. You will also make no further use of the Software or our trademarks,
grant no more sublicenses, and return all copies of the Software in your
possession to us on termination. All proprietary rights automatically
revert to us. Sections 7-8 and 10-15 of this Agreement will remain in
effect. Software sublicenses properly granted and paid for prior to
termination will also remain in effect according to their terms.
<PAGE> 85
15. The following terms also apply.
This is the full and final agreement between you and us on this subject,
and supersedes any earlier promises, representations or agreements. This
Agreement may only be changed if you and our authorized representative do
so in writing. No inconsistent, additional, or preprinted terms on your
purchase order or other business form will apply. You are an independent
contractor, not our agent, partner, franchisee, joint venture or employee.
Waivers not given in writing may be revoked at any time without liability.
Invalid provisions do not affect the enforceability of the others. We are
entitled to injunctive relief for violations of our copyrights, trade
secrets or other proprietary rights. We reserve all rights not granted
specifically in this Agreement. All notices shall be in writing and in
English and may be sent by cable, telecopy, or air mail, return receipt
requested, sent to the attention of the Legal Department at the addresses
first set forth above, and shall be deemed received as follows: cable and
telecopy, 24 hours after transmission; and registered airmail, 10 days
after delivery to the postal authorities by the party serving notice. This
Agreement will be construed, interpreted and governed by the substantive
laws of the State of California. Any legal action arising out of or related
to this Agreement shall be brought only in a state or federal court of
competent jurisdiction located in California.
Sagent technology Inc. Distributor
--------------------------------- ---------------------------------
--------------------------------- ---------------------------------
--------------------------------- ---------------------------------
--------------------------------- ---------------------------------
Effective Date:
----------------------
<PAGE> 86
Schedule No.
--------------------
Non-Exclusive Sagent Software Distribution Agreement
This Schedule is part of the Non-Exclusive Sagent Software Distribution
Agreement ("Agreement") entered into on between Sagent
-----------------
Technology, Inc., 2225 E. Bayshore Rd., Suite 100, Palo Alto, CA 94303
("Sagent") and
----------------------------------------------------
- -------------------------------------------------------------- ("Distributor")
1. "Software," "Licensee Fees."
The Software products that you are permitted to use under Section 4 of
the Agreement are the products listed in the International Price List,
attached as Exhibit B, which you have received for Demonstration
purposes.
The Software that you are permitted to market and sublicense under
Section 5 of the Agreement are developer versions of the products
listed in the attached International Price List. (see Exhibit B) If
you are using a developer license you must pay the applicable License
Fee for any Software you use.
Other products and/or versions may be added to this Agreement only if
you and our authorized representative agree to do so in a written
schedule.
The License Fees you must pay us for each Software license you
purchase from us for each copy of the Software you sublicense to
others is the recommended International list price less the following
Distributor discount: [*] percent ([*]%).
2. Territory
The Territory is .
----------------
3. End-User License Agreement.
The basic license and warranty terms and information required with
respect to end-user sublicensees are set forth in the sample end user
software license agreement and schedule attached as Exhibit A.
4. Minimum Target Volume.
Your revenue objective for the six-month term of this Agreement is set
out below and is based on net product revenue dollars to Sagent. In
the event that our License Fee revenues from you at the end of the
six-month term are less than those specified, we have the right, in
our sole discretion, to terminate the Agreement on 30 days' written
notice to you. The minimum revenue goal in order to be considered for
renewal of Agreement, at Sagent's discretion, is [*] USD, at the
International Discounted List Price and net of all taxes.
5. Support Services.
Distributor will offer first-line update, Hotline and related
technical support to its customers. Distributor must purchase update
and Hotline support from us or our designated support representative
for the annual fee for Hotline support is our then-current published
price for such Hotline support. Distributor will provide all customer
support and pay us an annual fee for each sale of such services you
make to your customers for support of Product licenses. The annual fee
will be [*] Percent ([*]%) of the International Product List Price.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 87
6. Marketing Materials
You may order marketing materials from us; there may be a standard
charge for certain materials or quantities.
7. Training
Distributor, in order to be certified to perform training and have
access to Sagent's training material, needs to send at least one
representative to attend a one-week certification class at Sagent
Technology, Inc.'s Headquarters in Palo Alto, CA, US. The fee for the
course is $[*] USD, plus travel and expenses. Classes are held once
a month.
8. Other Terms and Conditions.
All terms of the Agreement are incorporated herein and remain in force
except as specifically changed in this Schedule.
SAGENT TECHNOLOGY INC. Distributor: DYNAMICS SOFTWARE
DISTRIBUTION (8) PTC LTD. ("DSD")
Signed: _________________________ Signed: __________________________
Name: _________________________ Name: __________________________
Title: _________________________ Title: __________________________
Effective Date: _________________ Effective Date: __________________
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 88
EXHIBIT A
---------
SAGENT SOFTWARE LICENSE AGREEMENT
THANK YOU FOR PURCHASING THIS PRODUCT. IT IS IMPORTANT THAT YOU CAREFULLY READ
THIS AGREEMENT BEFORE OPENING THIS PACKAGE. BY OPENING THIS SEALED PACKAGE, YOU
AGREE TO THE TERMS AND CONDITIONS OF THIS AGREEMENT AND CREATE A BINDING
CONTRACT BETWEEN YOU AND SAGENT TECHNOLOGY, INC. ("SAGENT"). IF YOU DO NOT AGREE
TO THESE TERMS, YOU MAY RETURN THIS PACKAGE UNOPENED TO SAGENT WITHIN THIRTY
(30) DAYS OF PURCHASE FOR A FULL REFUND.
LICENSE
Sagent grants you a non-exclusive, non-transferable license to use this copy of
the software program (the "Software") and accompanying documentation, if any,
and any updates or upgrades thereto provided by Sagent according to the terms
set forth below. If the Software is being provided to you as an update or
upgrade to software which you have previously licensed, than you agree to
destroy all copies of the prior release of this software within thirty (30) days
after entering into this Agreement; provided, however, that you may retain one
copy of the prior release for backup purposes.
You may:
a. install the Software on only one of the following, as specified on your
Order Form or other signed agreement with Sagent (the "Governing Terms");
(i) (if specified as "stand alone" or "single user" version) a stand alone
or computer network node from which node the Software cannot be accessed by
another computer; or (ii) (if specified as a "LAN" version) a network
server at one site only, which server provides access to multiple
computers, up to the maximum number of computers of concurrent users
specified in such Governing Terms; or (iii) if specified as a "multi-user
pack", the number of computer nodes (network or stand alone) up to the
number of users as specified in such Governing Terms.
b. make one (1) copy of the Software in machine readable form solely for
backup purposes, provided that you reproduce all proprietary notices on the
copy; and
c. physically transfer the Software from (as applicable): (i) one stand alone
computer or network node to another stand alone computer or network node;
or from (ii) one server to another server, provided that the Software is
used on only one computer, network node or server at a time; or from (iii)
the number of stand alone computers, network nodes or servers to other
stand alone computers, network nodes, or servers, provided that the number
of Software users does not exceed the number specified in the Governing
Terms.
You may not:
a. modify, translate, reverse engineer, decompile, disassemble, or create
derivative works based on the Software (except to the extent that such acts
may not be prohibited under applicable law),
b. copy the Software (except as provided above) or copy the accompanying
documentation,
c. rent, transfer, lease, distribute or grant any rights in the Software or
accompanying documentation in any form to any person without the prior
written consent of Sagent, or
d. remove any proprietary notices, labels, or marks on the Software and
accompanying documentation
This license is not a sale. Title and copyrights to the Software, accompanying
documentation and any copy made by you remain with Sagent or its licensors, as
the case may be. Unauthorized copying of the Software or the accompanying
documentation, or failure to comply with the above restrictions, will result in
automatic termination of this license and will make available to Sagent other
legal remedies.
<PAGE> 89
LIMITED WARRANTY AND DISCLAIMER
Sagent warrants that, for a period of thirty (30) days from the date of
delivery to you, (i) the Software will perform substantially in accordance
with the accompanying documentation, and (ii) the software media on which the
Software is furnished under normal use will be free from defects in materials
and workmanship.
Sagent's entire liability and your exclusive remedy under this warranty (which
is subject to your returning the Software to Sagent) will be, at Sagent's
option, to use reasonable commercial efforts to attempt to correct or work
around errors, to replace the Software Media with functionally equivalent
Software Media, as applicable.
Sagent warrants that the software shall not cause erroneous date calculations
due to miscalculations by the Software as a result of the year 2000 date
change. Sagent further warrants that the software includes the ability to
manage and manipulate all data involving dates or date fields which include
indication of century to ensure year 2000 compatibility.
EXCEPT FOR THE ABOVE EXPRESS LIMITED WARRANTIES, SAGENT MAKES AND YOU RECEIVE
NO WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, OR IN
ANY COMMUNICATION WITH YOU, AND SAGENT SPECIFICALLY DISCLAIMS ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NONINFRINGEMENT AND THEIR EQUIVALENTS. Sagent does not warrant that the
operation of the Software will be uninterrupted or error free or that the
Software will meet your specific requirements.
SOME STATES OR OTHER JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED
WARRANTIES, SO THE ABOVE EXCLUSIONS MAY NOT APPLY TO YOU. YOU MAY ALSO HAVE
OTHER RIGHTS THAT VARY FROM STATE TO STATE AND JURISDICTION TO JURISDICTION.
LIMITATION OF LIABILITY
IN NO EVENT WILL SAGENT BE LIABLE FOR LOSS OF DATA, LOST PROFITS, COST OF
COVER, OR OTHER SPECIAL, INCIDENTAL, PUNITIVE, CONSEQUENTIAL, OR INDIRECT
DAMAGES ARISING FROM THE USE OF THE SOFTWARE OR ACCOMPANYING DOCUMENTATION,
HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN
IF SAGENT OR AN AUTHORIZED DISTRIBUTOR HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGE. IN NO EVENT WILL SAGENT'S LIABILITY EXCEED THE AMOUNTS PAID FOR
THE SOFTWARE. YOU ACKNOWLEDGE THAT THE AMOUNTS PAID BY YOU FOR THE SOFTWARE
REFLECT THIS ALLOCATION OF RISK.
SOME STATES OR OTHER JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF
LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATIONS AND
EXCLUSIONS MAY NOT APPLY TO YOU.
LANGUAGE
The parties hereto confirm that it is their wish that this Agreement, as well
as other documents relating hereto, have been and shall be written in the
English language only.
Les parties aux presentes confirment leur volonte que cette convention de meme
que tous les documents y compris tout avis qui s'y rattache, soient rediges en
langue anglaise.
GENERAL
This Agreement shall not be governed by the 1980 U.N. Convention on Contracts
for the International Sale of Goods; rather, this Agreement shall be governed
by the laws of the State of California, U.S.A., including its Uniform
Commercial Code, without reference to conflicts of laws principles. This
Agreement is the entire Agreement between us and supersedes any other
communications or advertising with respect to the Software and accompanying
documentation. If any provision of this Agreement is held invalid or
unenforceable, such provision shall be revised to the extent necessary to cure
the invalidity or unenforceability, and the remainder of
<PAGE> 90
this Agreement shall continue in full force and effect. The Software and
accompanying documentation are deemed to be "commercial computer software" and
"commercial computer software documentation", respectively, pursuant to DFAR
Section and FAR Section, as applicable. Any use, modification, reproduction,
release, performing, displaying or disclosing of the Software and accompanying
documentation by the U.S. Government shall be governed solely by the terms of
this Agreement and shall be prohibited except to the extent expressly permitted
by the terms of this Agreement. You agree not to allow the Software to be sent
to or used in any other country except in compliance with applicable U.S. laws
and regulations. In the event of any conflict between any provision of this
Agreement and any applicable law, the provision or provisions of this Agreement
affected shall be modified to remove such conflict and permit compliance with
such law and as so modified this Agreement shall continue in full force and
effect.
If you have any questions, please contact in writing: Sagent Technology, Inc.
Customer Service, 2225 East Bayshore Rd. Suite 100, Palo Alto, California 94303.
<PAGE> 91
EXHIBIT B
INTERNATIONAL PRICE LIST
<TABLE>
<CAPTION>
SAGENT PRODUCT & DESCRIPTION PRODUCT INCLUDES INTL. PRICE
<S> <C> <C>
Data Mart Population Package 1 Data Mart Server $ [*]
This package provides data mart population 1 Sagent Admin.
capabilities (extraction, transformation and load.) 1 Design Studio
Client/Server OLAP Package 1 Data Mart Server $ [*]
This package provides end user OLAP capabilities 1 Sagent Admin.
for client/server users. No data mart population 1 Design Studio with Analysis
capabilities are included. 20 Information Studios
20 Analysis
Web OLAP Package 1 Data Mart Server $ [*]
This package provides end user OLAP capabilities 1 Sagent Admin.
for client/server and unlimited Web users. 1 Design Studio with Analysis
20 Information Studios
20 Analysis
1 Sagent WebLink
Integrated Client/Server Package 1 Data Mart Server $ [*]
This package provides a combination of the Data 1 Sagent Admin.
Mart Population and Client/Server OLAP 1 Design Studio with Analysis
Packages. 20 Information Studios
20 Analysis
Integrated Web Package 1 Data Mart Server $ [*]
This package provides a combination of the Data 1 Sagent Admin.
Mart Population and Web OLAP Packages. 1 Design Studio with Analysis
20 Information Studios
20 Analysis
1 Sagent WebLink
Sagent Design Studio* 1 Design Studio $ [*]
Sagent Information Studio* 5 Pack Sagent Info Studio $ [*]
Crystal Reports* 5 Pack Crystal Reports $ [*]
Sagent Administration* 1 Sagent Admin. $ [*]
Sagent Analysis* 5 Pack Sagent Analysis $ [*]
Sagent WebLink* 1 WebLink Server $ [*]
Software Maintenance-One Year Technical Support & Upgrades [*]% of SW Price
*These prices are only available to
customers after purchasing one of the above
packages.
</TABLE>
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 92
EXHIBIT I
SEVERITY 1, 2 AND 3 DEFINITION AND PROBLEM RESOLUTION
<PAGE> 93
CLASSIFICATION OF PROBLEM:
<TABLE>
<CAPTION>
Classification Criteria
- -------------- ------------------------------------------------------------
<S> <C>
Severity 1 Business Critical Failures: An error or failure which
materially impacts the functions of the business, prevents
all useful work from being done or which disables major
functions from being performed.
Severity 2 System Defect with Workaround: Either a critical error for
which a work around exists or else a non-critical error
that significantly affects the functionality of the Product.
Severity 3 Benign Error: An isolated or benign error, or a Product
enhancement request. This is an error which does not
significantly affect the functionality of the Product,
disables only certain non-essential functions and does not
materially impact system performance.
</TABLE>
RESPONSE LEVELS:
<TABLE>
<CAPTION>
Response Level Description
- -------------- ------------------------------------------------------------
<S> <C>
1st Level Telephone acknowledgment of receipt of report of an error
or problem.
2nd Level Patch or work around (Program or manual), or temporary
release or update release, which allows the user to
continue to use all functions in the Products in all
material respects.
Final Level Official fix, update or release.
</TABLE>
PROBLEM RESOLUTION
Upon receipt from the distributor of a report of an error or problem,
Sagent shall take prompt corrective action to remedy the reported error
or problem as follows within the following time periods.
<TABLE>
<CAPTION>
Classification 1st Level Final Level
- -------------- --------- -----------
<S> <C> <C>
Severity 1 under 1 hour Worked on continuously with best efforts
to provide an official fix or workaround
within 48 hours.
Severity 2 under 2 hours Permanent correction in next scheduled
release, unless otherwise agreed.
Severity 3 within 2 hours Permanent correction when the particular
program in next modified, unless otherwise
agreed.
</TABLE>
Distributor Maintenance Services will also include: Maintenance Releases, in
which Supplier will provide copyrighted in-line releases and workarounds as
available; Upgrades, in which Supplier will provide new product releases
(signified by a change in the version number) as substitutes for covered
Products; and other generally available Technical Materials. Note that
Maintenance Releases and Upgrades, where applicable, may not be used to increase
the total number of copies of the Products. After upgrade or maintenance this
agreement will only apply to the upgraded or maintained versions of a Products;
Distributor agrees to destroy or archive (but not use or transfer) the prior
version. Except as otherwise stated in this Agreement, Product upgrades to new
platforms are generally not available free of charge.
Supplier warrants that it will undertake all reasonable efforts to provide
technical assistance under this Agreement and to rectify or provide solutions
to problems where the Products does not function as described in the Products
documentation, but Supplier does not guarantee that all problems will be solved
or that any item will be error-free. Supplier will provide Distributor with
substantially the same level of service throughout each annual Maintenance Term
of this Agreement. Supplier may from time to time,
<PAGE> 94
however, discontinue Products or versions, and stop supporting Products or
versions within a reasonable time after discontinuance, or otherwise discontinue
any support services. THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
CONDITIONS OR PROMISES TO DISTRIBUTOR OR ANY THIRD PARTY, EXPRESS OR IMPLIED,
RELATED TO THE SOFTWARE OR ANY SERVICES SUPPLIER MAY PROVIDE, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR ARISING BY STATUTE, LAW OR TRADE DEALING OR USAGE. EXCEPT
AS PROVIDED IN THIS AGREEMENT, ALL MATERIALS AND SERVICES ARE PROVIDED "AS IS."
The Products, Upgrades, Maintenance Releases, and Technical Materials are
Supplier's copyrighted property, and may not be copied, distributed, or
transferred, or otherwise used except as Supplier has expressly permitted in
this Agreement or otherwise in writing.
<PAGE> 95
EXHIBIT J
SAGENT'S MAINTENANCE AND TECHNICAL SUPPORT GUIDELINES AND AGREEMENTS
<PAGE> 96
Sagent Technology
Professional Support
One Year Agreement
SAGENT TECHNOLOGY ("WE") WILL PROVIDE YOU THE PROFESSIONAL SUPPORT SERVICES
LISTED BELOW, FOR THE SOFTWARE AND PERSONS INDICATED.
Available Support Services will include telephone support, in which we will
answer technical questions from designated persons about the installation
and use of covered Software products; Maintenance Releases, in which we
will provide our copyrighted in-line releases and workarounds as available
(we will not undertake individual fixes for you); Upgrades, in which we
will provide new product releases (signified by a change in the version
number) as substitutes for covered Software; and other generally available
Technical Materials. Note that Maintenance Releases and Upgrades, where
applicable, may not be used to increase the total number of copies of the
Software. After upgrades or maintenance this agreement will only apply to
the upgraded or maintained versions of a Software product; you agree to
destroy or archive (but not use or transfer) the prior version.
YOU WILL PAY US THE APPLICABLE SUPPORT FEES.
Support Fees must be prepaid, unless you have established credit terms with
us.
WE MAY CHANGE OUR AVAILABLE PRODUCT SUPPORT SERVICES FROM TIME TO TIME.
We will undertake reasonable efforts to provide technical assistance under
this agreement and to rectify or provide solutions to problems where the
Software does not function as described in the Software documentation, But
we do not guarantee that all problems will be solved or that any item will
be error-free. We will provide you with substantially the same level of
service throughout the term of this Agreement. We may from time to time,
however, discontinue Software products or versions, and stop supporting
Software products or versions 1 year after discontinuance, or otherwise
discontinue any support services. THE FOREGOING WARRANTY IS IN LIEU OF ALL
OTHER WARRANTIES, CONDITIONS OR PROMISES TO YOU OR ANY THIRD PARTY, EXPRESS
OR IMPLIED, RELATED TO THE SOFTWARE OR ANY SERVICES WE MAY PROVIDE,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY STATUTE,
LAW OR TRADE DEALING OR USAGE. EXCEPT AS PROVIDED ABOVE, ALL MATERIALS AND
SERVICES ARE PROVIDED "AS IS." We are not liable for incidental, special or
consequential damages for any reason (including loss of data or other
business or property damage), even if foreseeable. Our liability in all
events for any damages, howsoever caused, will not exceed the applicable
fees that you have paid us.
THIS PROFESSIONAL SUPPORT AGREEMENT WILL BE EFFECTIVE FOR ONE YEAR.
You and we may extend or terminate this agreement as provided below. At the
end of any one-year term, you may renew this agreement with our consent
under the terms of the Professional Support Agreement then in effect by
paying the Support Fees in effect at that time. Either you or we may
terminate this agreement for material breach, including nonpayment, at any
time; in the absence of material breach by Sagent, Support Fees are not
refundable. This is the full and final agreement between you and us, and
supersedes any promises, representations or agreements relating to the
subject of this agreement. This agreement may only be changed if you and
our authorized representative do so in writing. No inconsistent,
additional, or preprinted terms on your purchase order or other business
form will apply. You may not assign this agreement without our written
consent. Any unauthorized assignment terminates this agreement
automatically. The Software, Upgrades, Maintenance Releases, and Technical
Materials are our copyrighted property, and may not be copied, distributed,
or transferred, or otherwise used except as we have expressly permitted in
the relevant license agreement (the terms of which are incorporated into
this agreement by reference) or otherwise in writing.
SOFTWARE COVERED:
Software Name & Version Number of Copies
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
PERSONS COVERED:
Person(s):
Name Phone Number
___________________________________________________________
_________________________________( )_____________________
_________________________________( )_____________________
SAGENT TECHNOLOGY, INC.
Signed: _____________________________________________________
Name: _______________________________________________________
Title: ______________________________________________________
Effective Date: _____________________________________________
You: ________________________________________________________
Signed: _____________________________________________________
Name: _______________________________________________________
Title: ______________________________________________________
Address: ____________________________________________________
SAGENT TECHNOLOGY CONFIDENTIAL 02/24/98
<PAGE> 97
[SAGENT LOGO]
SAGENT TECHNOLOGY
PROFESSIONAL SUPPORT PROGRAM REFERENCE GUIDE
Sagent Professional Support provides you with fast, expert technical support for
all Sagent products. It allows you the ease and convenience of communicating via
the phone or electronically, and a well defined escalation path that ensures
your technical issues will receive the proper attention.
This reference guide is an outline to the services currently available under
the Professional Support program. Use this guide to determine the best way to
get the most from this service.
TECHNICAL SUPPORT SERVICES
The Professional Support program is designed to give you access to Sagent
Technology's Technical Support Analysts. These analysts are available to insure
the continued operation of your Sagent product. This includes working with a
Sagent system that has gone down, assisting with the initial setup of new
systems, and other problems that arise from the use of our products. Technical
Support Services does not include the development of custom code, or detailed
product training.
DESIGNATED PROFESSIONAL SUPPORT CONTACTS
Maintaining a clear line of communication between your organization and
Sagent's Technical Support department is key to making sure you get the most
from the Professional Support program. As such, it is important that you
designate specific individuals within your organization that become the primary
contacts for working with Sagent Technical Support. These individuals, who are
familiar with the technical workings of your company's systems, help by
managing the flow of information to the Support Analysts to insure that
responses are focused on the problem at hand. The number of contacts within
your organization that have access to Sagent Technical Support is specified in
your support agreement, and is determined by you based on your need.
WORKING WITH TECHNICAL SUPPORT
Sagent Technical Support tracks your issues based on an incident model. While
we do not limit you to a specific number of incidents, we do use incidents to
make sure that each issue that you have is resolved to the best of our ability.
An incident is defined as a single support issue that can not be broken down
into
Sagent Technology Page 1
<PAGE> 98
smaller support issues. Each of these incidents is tracked individually, and
can be referenced by you when you contact us.
CONTACTING SAGENT TECHNICAL SUPPORT BY PHONE
Use the phone to contact Sagent Technical Support whenever you have a
time-critical or business-critical problem. Sagent Technical Support is
available from 6:00 AM to 5:00 PM PST. Monday through Friday. If we are unable
to answer your call immediately, you will be given the option to leave a voice
mail message. In the message, please be sure to give us your name, company
name, a description of the problem, and a phone number that you can be reached
at. All calls that go to voice mail will be responded to within two business
hours. If we fail to connect with you on the return call, we will leave a
message (if possible) with an appropriate time to follow up.
CONTACTING SAGENT TECHNICAL SUPPORT BY ELECTRONIC MAIL
For problems that are not time-critical, you can contact us via the Internet at
[email protected]. We will respond to all mail messages within one
business day of the time it arrives at Sagent Technical Support. Please be sure
to include a full description of the problem, your name, your company's name,
and a return e-mail address.
ESCALATION PROCESS
Step 1 - All new technical support issues are handled initially by our support
analysts. Our support analysts are trained to deal with the majority
of all support issues, and most support issues are resolved at this
step.
Step 2 - If an issue comes up that cannot be handled by the support analyst,
it is given one of the following priorities.
A) CRITICAL - For business outages, or issues, that have a serious
customer impact which threatens future productivity.
B) IMPORTANT - For issues that do not have a significant current
impact on customer productivity.
Step 3 - CRITICAL issues are immediately escalated to Sagent's upper management
team to determine the proper course of action.
IMPORTANT issues are escalated to an escalation review committee,
which meets regularly to determine the proper course of action for
these escalation's.
Step 4 - The course of action determined in Step 3 is communicated to the
customer, and an estimated time to complete is given.
Sagent Technology Page 2
<PAGE> 99
Sagent Technology
Premium Support
One Year Agreement
SAGENT TECHNOLOGY ("WE") WILL PROVIDE YOU THE PREMIUM SUPPORT SERVICES LISTED
BELOW, FOR THE SOFTWARE AND PERSONS INDICATED.
Available Support Services may include 24 hours, seven days a week
telephone support (telephone support during the holidays should be arranged
one week in advance of the holiday), in which we will answer technical
questions from designated persons about the installation and use of covered
Software products; Maintenance Releases, in which we will provide our
copyrighted in-line releases and workarounds as available (this does not
include full Software products or Upgrades; we will not undertake
individual fixes for you); Upgrades, in which we will provide new product
releases (signified by a change in the version number) as substitutes for
covered Software; and other generally available Technical Materials. Note
that Maintenance Releases and Upgrades, where applicable, may not be used
to increase the total number of copies of the Software. After upgrade or
maintenance this agreement will only apply to the upgraded or maintained
versions of a Software product; you agree to destroy or archive (but not
use or transfer) the prior version. Software upgrades are generally not
available free of charge.
YOU WILL PAY US THE APPLICABLE SUPPORT FEES.
Support Fees must be prepaid, unless you have established credit terms with
us.
WE MAY CHANGE OUR AVAILABLE PRODUCT SUPPORT SERVICES FROM TIME TO TIME.
We will undertake reasonable efforts to provide technical assistance under
this agreement and to rectify or provide solutions to problems where the
Software does not function as described in the Software documentation, but
we do not guarantee that all problems will be solved or that any item will
be error-free. We will provide you with substantially the same level of
service throughout the term of this Agreement. We may from time to time,
however, discontinue Software products or versions, and stop supporting
Software products or versions within a reasonable time after
discontinuance, or otherwise discontinue any support services. THE
FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, CONDITIONS OR
PROMISES TO YOU OR ANY THIRD PARTY, EXPRESS OR IMPLIED, RELATED TO THE
SOFTWARE OR ANY SERVICES WE MAY PROVIDE, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR ARISING BY STATUTE, LAW OR TRADE DEALING OR USAGE.
EXCEPT AS PROVIDED ABOVE, ALL MATERIALS AND SERVICES ARE PROVIDED "AS IS."
We are not liable for incidental, special or consequential damages for any
reason (including loss of data or other business or property damage), even
if foreseeable. Our liability in all events for any damages, howsoever
caused, will not exceed the applicable fees that you have paid us.
THIS PREMIUM SUPPORT AGREEMENT WILL BE EFFECTIVE FOR ONE YEAR.
You and we may extend or terminate this agreement as provided below. At the
end of any one-year term, you may renew this agreement with our consent
under the terms of the Premium Support Agreement then in effect by paying
the Support Fees in effect at that time. Either you or we may terminate
this agreement for material breach, including nonpayment, at any time; in
the absence of material breach by Sagent, Support Fees are not refundable.
This is the full and final agreement between you and us, and supersedes any
promises, representations or agreements relating to the subject of this
agreement. This agreement may only be changed if you and our authorized
representative do so in writing. No inconsistent, additional, or preprinted
terms on your purchase order or other business form will apply. You may not
assign this agreement without our written consent. Any unauthorized
assignment terminates this agreement automatically. The Software, Upgrades,
Maintenance Releases, and Technical Materials are our copyrighted property,
and may not be copied, distributed, or transferred, or otherwise used
except as we have expressly permitted in the relevant license agreement
(the terms of which are incorporated into this agreement by reference) or
otherwise in writing.
SOFTWARE COVERED:
SOFTWARE NAME AND VERSION NUMBER OF COPIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SOFTWARE AND PERSONS COVERED:
PERSON(S):
NAME PHONE NUMBER
- --------------------------------------------------------------------------------
( )
- --------------------------------------------------------------------------------
( )
- --------------------------------------------------------------------------------
SAGENT TECHNOLOGY, INC.
Signed: ________________________________________________________________________
Name: __________________________________________________________________________
Title: _________________________________________________________________________
Effective Date: ________________________________________________________________
You: ___________________________________________________________________________
Signed: ________________________________________________________________________
Name: __________________________________________________________________________
Title: _________________________________________________________________________
Address: _______________________________________________________________________
Sagent Technology Confidential 02/24/98
<PAGE> 100
[LOGO]
SAGENT TECHNOLOGY
PREMIUM SUPPORT PROGRAM REFERENCE GUIDE
Sagent Premium Support is provided for our customers that require more security
when implementing Sagent's products in mission critical environments. In order
to provide this security, the Premium Support Program provides round the clock
access to Sagent Technical Support team via the phone, as well as electronic
support via the Internet. Sagent's Premium Support Program also includes an
escalation process that is designed to make sure technical issues receive the
proper attention.
This reference guide is an outline to the services currently available under the
Premium Support program. Use this guide to determine the best way to get the
most from this service.
TECHNICAL SUPPORT SERVICES
The Professional Support Program is designed to give you access to Sagent
Technology's Technical Support Analysts 24 hours a day, seven days a week. These
analysts are available to insure the continued operation of your Sagent product.
This includes working with a Sagent system that has gone down, assisting with
the initial setup of new systems, and other problems that arise from the use of
our products. Technical Support Services does not include the development of
custom code, or detailed product training.
DESIGNATED PROFESSIONAL SUPPORT CONTACTS
Maintaining a clear line of communication between your organization and Sagent's
Technical Support department is key to making sure you get the most from the
Professional Support program. As such, it is important that you designate
specific individuals within your organization that become the primary contacts
for working with Sagent Technical Support. These individuals, who are familiar
with the technical workings of your company's systems, help by managing the flow
of information to the Support Analysts to insure that responses are focused on
the problem at hand. The number of contacts within your organization that have
access to Sagent Technical Support is specified in your support agreement, and
is determined by you based on your need.
WORKING WITH TECHNICAL SUPPORT
Sagent Technical Support tracks your issues based on an incident model. While we
do not limit you to a specific number of incidents, we do use incidents to
Sagent Technology Page 1
<PAGE> 101
make sure that each issue that you have is resolved to the best of our ability.
An incident is defined as a single support issue that can not be broken down
into smaller support issues. Each of these incidents is tracked individually,
and can be referenced by you when you contact us.
CONTACTING SAGENT TECHNICAL SUPPORT BY PHONE
Use the phone to contact Sagent Technical Support whenever you have a
time-critical or business-critical problem. Sagent Technical Support is
available to Premium Support customers 24 hours a day, seven days a week.
During regular business hours your calls are given priority in the phone queue,
if we are unable to answer your call immediately, you will be given the option
to leave a voice mail message. Phone calls placed outside regular business
hours automatically go to voice mail, and a designated Support Analyst is
paged. In either case voice mail messages are responded to within two hours. In
the message, please be sure to give us your name, your companies name, a
description of the problem, and a phone number that you can be reached at. If
we fail to connect with you on the return call, we will leave a message (if
possible) with an appropriate time to follow up. Sagent Technology's normal
business hours are Monday through Friday from 6:00 AM to 5:00 PM PST, excluding
some holidays.
CONTACTING SAGENT TECHNICAL SUPPORT BY ELECTRONIC MAIL
For problems that are not time-critical, you can contact us via the Internet at
[email protected]. We will respond to all mail messages within one
business day of the time it arrives at Sagent Technical Support. Please be sure
to include a full description of the problem, your name, your companies name,
and a return e-mail address.
ESCALATION PROCESS
Step 1 - All new technical support issues are handled initially by our
support analysts. Our support analysts are trained to deal with the
majority of all support issues, and most support issues are resolved
at this step.
Step 2 - If an issue comes up that can not be handled by the support analyst,
it is given one of the following priorities.
A) CRITICAL - For business outages, or issues, that have a serious
customer impact which threatens future productivity.
B) IMPORTANT - For issues that do not have a significant current
impact on customer productivity.
Step 3 - CRITICAL issues are immediately escalated to Sagent's upper
management team to determine the proper course of action.
IMPORTANT issues are escalated to an escalation review committee,
Sagent Technology Page 2
<PAGE> 102
which meets regularly to determine the proper course of action for
these escalations.
Step 4 - The course of action determined in Step 3 is communicated to the
customer, and an estimated time to complete is given.
Sagent Technology Page 3
<PAGE> 103
EXHIBIT K
METHODS AND STANDARDS OF QUALITY FOR PRODUCTION
To be added upon availability
<PAGE> 104
TRADE MARK LICENSE
This Trademark License Agreement (the "AGREEMENT") is entered into on April 8,
1998 (the "EFFECTIVE DATE") between Sagent Technology, Inc. a California
corporation with offices at 2225 East Bayshore Road, Suite 100, Palo Alto, CA
94303 ("OWNER") and Magnolia II Vermogensverwaltung GmbH with offices at c/o
Buro Klaus Luft, Gut Keferloh 1 B, D - 85630 Grasbrunn/Munich, Germany ("USER").
ARTICLE 1 RECITALS
1.1 The Owner owns or is the Licensee of Trade Marks used to identify its
products and Services in the software industry.
1.2 The User has rights to distribute the Owner's Software and Services in
the Territory and desires to obtain limited, non exclusive rights to use
the Trade Marks with the Software and Services for the term of this
Agreement.
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES AGREE AS
FOLLOWS:
ARTICLE 2 DEFINITIONS
In this Agreement the following terms shall bear the following meanings:
2.1 "DISTRIBUTION AGREEMENT" shall mean the Exclusive Software Distribution
Agreement executed on April 8, 1998 between Owner and User.
2.2 "METHODS" shall mean the Methods set out in Exhibit D hereto which
relate to the creation and duplication of the Software and Services
for distribution to third party end users.
2.3 "RULES" shall mean the rules which are set out in Exhibit B hereto
which govern the manner in which the Trade Marks may be displayed.
2.4 "SERVICES" shall mean the services and related documentation further
described in Exhibit C hereto and which are provided by User which may
be identified through use of the Trade Marks.
2.5 "SOFTWARE" shall mean the software and related documentation further
described in Exhibit C hereto and which are provided by User which may
be identified through use of the Trade Marks.
2.6 "STANDARD OF QUALITY" shall mean the standards of quality, further
described in Exhibit D hereto, which relate to the manner of display of
the Trade Marks with the Software and Services.
2.7 "TERRITORY" shall be the territory set forth in the Distribution
Agreement.
<PAGE> 105
2.8 "TRADE MARKS" shall mean the trademarks set out in Exhibit A hereto.
3 USE OF TRADE MARKS
3.1 PERMISSION TO USE. The Owner hereby grants the User for the term of
this Agreement a license to use the Trade Marks in the Territory as
trade marks upon or in relation to the Software and Services and the
advertising and licensing thereof provided that the User complies with
the terms of this Agreement. User agrees to follow the Rules which
govern the manner in which the Trade Marks are displayed. Owner hereby
also agrees to permit the User to use the Trade Mark "Sagent" in its
company name for the term of this Agreement. Such permission will not
extend to any subsidiaries or affiliates of User. The parties intend
that the company name will be "Sagent Technology GmbH". The User will
not use a different company name without the Owner's written
permission which shall not be unreasonably withheld.
3.2 Such license is non exclusive and non transferable.
3.3 The User undertakes not to use any of the Trade Marks whether by
themselves or as part of any other name for identification of Software
or Services or other products or services not manufactured or provided
by the Owner.
3.4 STANDARD OF QUALITY. The permission to use the Trade Marks shall
apply only to the Software and Services made according to the Methods
disclosed hereunder provided that any such Software and Services
comply with the Standard of Quality set out in Exhibit D.
4. SPECIMEN SOFTWARE AND INSPECTION
4.1 At Owner's request, User shall, at its expense, submit to Owner
copies of the Software and any related documentation and related
collateral materials to Owner for inspection and testing. Such testing
will be completed 10 business days after it is received by Owner.
4.2 User agrees to immediately destroy all materials which contain any of
the Trade Marks which do not conform to the terms and conditions of
this Agreement.
4.3 User shall permit Owner or its agent or representative, at all
reasonable times to enter any place where the Software and related
materials with the Trade Marks are stored for the purposes of
inspecting and testing the same and of checking the method of
manufacture, processing, packaging, or storing, in order to ascertain
that they attain the Standard of Quality.
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5. APPLICATION OF TRADE MARKS
5.1 User shall identify all the Software and Services manufactured or
provided and licensed hereunder by using the Trade Marks permanently
affixed to the Software or the materials related to provision of the
Services. User shall supply to the Owner copies, specimens, or
representations of each different depiction of each Trade Mark the
User proposes to use. Users shall comply with the Rules and the User
shall not use any other or additional trade mark upon or in relation
to the Software or Services except with the prior written consent of
the Owner.
6. WARRANTY
6.1 User shall not knowingly use or consent to the use of a Trade Mark
except in relation to the Software and the Services which must in all
instances comply with the Standard of Quality.
7. PRESERVATION OF GOODWILL
7.1 User acknowledges that Owner is, and will remain, the sole and
exclusive owner of all goodwill associated with the Trade Marks. User
recognizes the value of the goodwill associated with the Trade Marks,
and acknowledges that such value is owned by and belongs solely and
exclusively to Owner. User waives any right it may have to receive any
compensation or reparations prior to, upon, or following termination
or expiration of this agreement under the law of the territory or
otherwise. Owner will not be liable to User on account of termination
or expiration of this Agreement, or otherwise, for reimbursement or
damages for the loss of goodwill, prospective profits or anticipated
income, or on account of any expenditures, investments, leases or
commitments made by User or for any other reason whatsoever based upon
or growing out of such termination or expiration or otherwise. User
acknowledges that (i) it has no expectation and has received no
assurances that any investment by it in the promotion of products
utilizing the Trade Marks will be recovered or recouped or that it
will obtain any anticipated amount of profits by virtue of this
Agreement, and (ii) it will not have or acquire by virtue of this
Agreement or otherwise any vested, proprietary or other right in the
Trade Marks or in goodwill created in the Trade Marks. User
acknowledges that the provisions of this section are an essential
element of this agreement.
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<PAGE> 107
8. THE TERRITORY
8.1 For the protection of the Owner's rights in the corresponding Trade
Marks in other countries, the User shall not export products bearing
any Trade Mark to any country outside of the Territory without first
obtaining from the Owner written permission to do so.
9. RECOGNITION OF OWNERSHIP
9.1 User recognizes that the Owner is the owner in the Territory of the
Trade Mark and of all goodwill attaching to the business in the
Software and Services in respect of which the Trade Mark is used and
agrees that the Trade Mark shall remain vested in the Owner both
during the term of this Agreement and thereafter in the Territory.
The User agrees never to challenge the validity or Ownership of the
Trade Mark.
9.2 The User shall from time to time include in its advertisements in the
press and elsewhere a statement to the effect that the Trade Marks
are the Trade Marks of the Owner, naming it and giving its address.
9.3 The User shall, to the extent requested by the Owner, or on all
labels or containers used in connection with the sale or license of
the Software and Services include a notice to the effect that the
Trade Marks are the trade marks of the Owner.
10. REGISTRATION OF TRADE MARK IN THE TERRITORY
10.1 In the event that the Owner decides to apply for registration of any
of the Trade Marks in the Territory, or a part thereof the User will
render to the Owner all reasonable assistance towards the obtaining
of a registration.
10.2 If at the time when the Owner desires to apply for registration or as
so applied the User is deemed in law to be the proprietor of the
Trade Mark, so as to make it necessary for the application to be made
or proceeded with in the name of the User, the User will at the
request and expense of the Owner, make or proceed with such
application and do all acts and execute all documents necessary for
obtaining registration to the benefit of the Owner. As soon as is
possible, the User will transfer any and all rights it may have in
the Trade Marks to the Owner.
10.3 On the registration of any of the Trade Marks becoming vested in the
Owner, whether under 10.1 or 10.2 above, the User shall be entitled
to the like rights under such registration as are granted by this
Agreement, and the Owner shall at the request and expense of the User
do all acts and execute all documents for establishing the User as a
User thereunder and where applicable for the registration of the
User's permitted user at the appropriate trade marks authority.
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10.4 After each of the Trade Marks have been registered, the User shall
where practicable, (and in respect of goods to be sold in a country
where the Trade Mark is registered) in the representations of the
Trade Mark used by the User in relation to the said Software and
Services to be sold in the Territory append to, or place adjacent to,
or related to, the Trade Mark, such inscription as is usual or proper
form indicating that the Trade Mark is registered.
11. INFRINGEMENT OR PASSING OFF
11.1 In the event that the User learns of any passing off by another of
any goods or services of the same or similar description and function
as the said Software or Services whether by the use of a similar
trade mark, or imitation or otherwise, or if the User shall learn of
any infringement of any trade mark registration which may be obtained
in respect of the Trade Marks, it shall give notice the Owner giving
such details as are available. With the User's advice and assistance,
Owner will determine the best course to pursue but the Owner shall
not be bound to institute legal proceeding at its own expense.
12. CESSATION OF RIGHT TO USE
12.1 On termination or expiration of this Agreement the User shall cease
to have any right to use the Trade Marks or to represent itself as
being connected with the said Software and Services or with the Owner
(unless for some other reason it be the fact) and the User undertakes
promptly to remove all indications of the Trade Mark on the Software
and Services, its premises, its invoices, its quotations and other
documents and labels. The User shall not thereafter, without the
prior written consent of the Owner, use the Trade Marks or any trade
mark which so nearly resembles any of the Trade Marks, as to be
likely to deceive or cause confusion, and it will procure that its
directors, officers, and employee shall not use the Trade Marks or any
other trade mark so nearly resembling the Trade Marks in respect of
any products or services.
12.2 Any registration of the User as a permitted user of a registered
Trade Mark hereunder shall be expunged on termination or expiration
of this Agreement and the Owner shall be entitled to take all
necessary steps to that end and the User shall cooperate to achieve
this result.
12.4 On termination or expiration of this Agreement the User shall cease
to have any right to use the Trade Mark "Sagent" in its company name
and the User undertakes promptly to change its company name to a new
name not including reference to "Sagent". The User shall not
thereafter use the Trade Mark "Sagent" or any Trade Mark in its
company name which so nearly resembles a Trade Mark, as to be likely
to deceive or cause confusion, and it will procure that its
directors, officers, and employee shall not do so.
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13. PAYMENT
13.1 The User shall pay to the Owner an annual fee of US$1.00 during the
life of this Agreement. Payment shall be due on the first day of
December of each year.
13.2 Any amounts payable under this Agreement are net amounts and are
payable in full to Owner. User is responsible for all taxes, duties
and levies.
14. ANCILLARY
14.1 NO ASSIGNMENT: The benefit of this Agreement shall be personal to the
User who shall not without the prior consent in writing of the Owner
mortgage, or charge the same to any third party nor assign the same,
or part with any of its rights or obligations hereunder, nor (except
as hereinafter provided) purport to grant any sublicense in respect
of the Trade Marks. The Owner shall not be required to give any
consent to assign the rights granted hereunder to any person, firm,
or corporation.
14.2 INDEMNITY: Owner will defend at its expense any action brought
against User to the extent it is based on a claim that a Trade Mark,
when used within the scope of this Agreement, infringes a trademark
in any country of the Territory in which such Trade Mark has been
registered by Owner, and Owner will pay any settlements and any
costs, damages and attorney's fees finally awarded against User in
such action which are attributable to such claim; provided that the
foregoing obligation will be subject to User notifying Owner promptly
in writing of the claim, giving Owner the exclusive control of the
defense and settlement thereof, and providing all reasonable
assistance to Owner in connection therewith.
14.3 GOVERNING LAW: The rights and obligations of the parties under this
Agreement shall not be governed by the U.N. Convention on Contracts
for the International Sales of Goods; rather such rights and
obligations shall be governed and construed under the laws of the
State of California, without reference to conflict of laws and
principles. The jurisdiction of the courts of Germany is expressly
excluded except to the extent that Owner may seek any equitable
remedy to which it may be entitled by reason of User's breach of this
Agreement, from the relevant court in Germany or any other court.
Distributor acknowledges that its breach of this agreement may cause
irreparable harm to Sagent, for which Sagent may obtain injunctive
relief.
14.4 ARBITRATION: In the event of any dispute, controversy or claim
arising out of or relating to this Agreement, or to the breach or
termination hereof (a "Dispute"), the parties agree to resolve the
same as follows:
(a) The parties to the Dispute shall initially attempt to resolve it
through consultations and negotiations.
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<PAGE> 110
(b) If the Dispute has not been resolved amicably within thirty (30) days
after any party provides notice thereof, unless the parties agree
otherwise, the Dispute shall be resolved by final and binding
arbitration in the City and county of Zurich, Switzerland, in
accordance with the Arbitration Rules of the United Nations Commission
on International Trade Law ("UNCITRAL"), as in effect on the date of
this Agreement. The language to be used in the arbitration proceeding
shall be English. The International Chamber of Commerce shall serve as
the appointing authority. The arbitrators shall render a written award
stating the reasons for the decision. Judgment on an arbitration award
or decision may be entered by any court of competent jurisdiction, or
application may be made to such a court for judicial acceptance of the
award or decision and any appropriate order, including enforcement.
(c) Each of the parties hereto consents to the submission of any Dispute
for settlement by final and binding arbitration in accordance with
paragraph (b) above. Such consent shall satisfy the requirements for
an "agreement in writing" pursuant to Article II of the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitration
Awards, done at New York on June 10, 1958.
(d) Each of the parties hereby undertakes to carry out without delay the
provisions of any arbitral award or decision.
14.5 NOTICES: All notices sent to the other party concerning this agreement
shall be in English and addressed to the party at the address set out
at the beginning of the Agreement. All notices sent to Owner shall be
marked to the attention of Sagent.
15. TERMINATION
15.1 NON PAYMENT OR INSOLVENCY: This Agreement may be terminated by either
party, on notice to the other party upon (a) the institution by or
against the other party of insolvency, receivership or bankruptcy
proceedings or any other proceedings for the settlement of the other
party's debts where such proceedings are not stayed or withdrawn
within thirty (30) days, or upon (b) the other party's making an
assignment for the benefit of creditors, or upon (c) the other party's
dissolution or ceasing to conduct business in the normal course.
15.2 This Agreement shall remain in effect for the same period as the
Distribution Agreement and no longer.
15.3 BREACH BY EITHER PARTY: This agreement may be terminated by either
party hereunder if the other party fails to perform or observe any of
the terms hereof on its part to be performed and observed and fails to
remedy such breach within thirty days of a notice from the other party
to remedy the same giving adequate particulars of the alleged default
and of the intention of the party serving the notice to terminate this
Agreement under this clause unless such default is made good or
remedied within thirty (30) days. If either party waives
7
<PAGE> 111
its rights due to a breach of any provision of this Agreement such
waiver shall not be construed as a continuing waiver of other
breaches of the same or other provisions. User's agreement with any
third party to distribute software and or services which are
competitive with the Software and Services set out in this Agreement
shall be deemed to be a breach of this Agreement and shall entitle
Owner to terminate this Agreement on thirty days notice.
15.3.1 SALE TO THIRD PARTY: This Agreement shall terminate on the sale of
User to any third party.
15.4 SAVING FOR ACCRUED RIGHTS: Any termination of this Agreement shall be
without prejudice to the rights of either party against the other
which may have accrued up to the date of such termination and
notwithstanding termination, the obligations of each party not to
disclose information received in confidence from the other party
shall remain in effect.
15.5 RETURN OF MATERIALS: At the termination or expiration of this
Agreement, User shall immediately return to Owner all materials which
contain any of the Trade Marks or have had a Trade Mark affixed.
16. ENTIRE AGREEMENT.
16.1 This Agreement sets forth the entire agreement and understanding of
the parties relating to the subject matter herein and merges all
prior agreements, discussions, and understandings between them. No
modification of or amendment to the Agreement, nor any waiver of any
rights under this Agreement shall be effective unless in writing
signed by an officer of Owner and User. The terms and conditions of
this Agreement shall supersede the terms and conditions of User's
purchase order, if any.
17. LIMITATION OF LIABILITY:
17.1 Regardless of whether any remedy fails of its essential purpose, in
no event will owner be liable for incidental, indirect, special or
consequential damages, notwithstanding being aware of the possibility
of such damages.
18. SEVERABILITY.
18.1 If one of the provisions of this Agreement should be or become
invalid, or if this Agreement should have an omission, this shall not
affect the validity of the remaining provisions. In such an event,
the parties are obliged to assist in the incorporation of provisions
which form the closest possible economic equivalent to that which the
parties would have agreed if they had been aware of the invalidity or
if they had considered the point.
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<PAGE> 112
IN WITNESS THEREOF THE PARTIES HERETO HAVE CAUSED THIS INSTRUMENT TO BE DULY
EXECUTED BY THEIR REPRESENTATIVES.
"OWNER" "USER"
SAGENT
---------------------------
By: /s/ THOMAS M. LOUNIBOS By: /s/ INES BERGHOF
--------------------------- ------------------------
Authorized Representative
Name: THOMAS M. LOUNIBOS Name: INES BERGHOF
--------------------------- ------------------------
Title: EVP OF Sales Title: General Manager
--------------------------- ------------------------
Date: April 8, 1998 Date: April 8th, 1998
--------------------------- ------------------------
9
The terms and conditions of this Agreement
<PAGE> 113
EXHIBIT A
THE TRADE MARKS
Sagent: German Trade Mark Registration number:
List of Trade Marks:
10
<PAGE> 114
EXHIBIT B
THE RULES RELATING TO THE DISPLAY OF THE TRADE MARKS
The following Trade Marks must always have the first usage in a
document accompanied by the symbol "TM".
List of Trade Marks:
The Sagent corporate logo will be provided to User in electronic and
printed form.
Samples of each Trade Mark are attached
11
<PAGE> 115
EXHIBIT C
SOFTWARE
Server: Data Movement Server
Web Link Server
Data Access Server
Power User Tools: Sagent Administration Tool
Sagent Design Studio Tool
Sagent Automation Tool
End-User Tools: Information Studio Tool
Analysis Tool
Reporting Tool
Crystal Reporting Tool
Statistical Tool
12
<PAGE> 116
EXHIBIT D
METHODS AND STANDARD OF QUALITY
To be added upon availability
13
<PAGE> 1
EXHIBIT 10.16
EXCLUSIVE CONCESSION AGREEMENT
This Exclusive Concession Agreement ("Agreement"), effective as of this
21st day of November, 1997 (the "Effective Date"), is entered into by and
between Sagent Technology, Inc., having offices at 2225 E. Bayshore Rd., Suite
100, Palo Alto, California 94303, U.S.A. ("Sagent"), and Sagent France S.A.,
having offices at 103 Rue Pereire, Parc Pereire Bat A, 78105 St. Germain En
Layes, France ("Concessionaire").
BACKGROUND
Sagent is in the business of developing and licensing computer
software. Concessionaire desires to market and distribute such computer software
in France, and Sagent agrees to authorize Concessionaire to so market and
distribute such computer software, pursuant to the terms and conditions set
forth below.
AGREEMENT
Now, therefore, in consideration of the foregoing and the mutual
covenants and conditions contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Products" shall mean those products listed in Exhibit A attached
hereto, as such products may be added to or abandoned by Sagent in Sagent's sole
discretion from time to time during the term of this Agreement.
1.2 "Sagent Marks" shall mean those trademarks, tradenames and
servicemarks listed in Exhibit B attached hereto, as such trademarks, tradenames
and servicemarks may be added to or removed by Sagent in Sagent's sole
discretion from time to time during the term of this Agreement.
1.3 Sale and Purchase of Products. All references in this Agreement to
the "sale" or "selling" of Products shall mean a license to use such Products
and the sale of the tangible media on which the Products are distributed. All
references in this Agreement to the "purchase" of Products shall mean a license
to use such Products and the purchase of the tangible media on which the
Products are distributed.
1.4 "Territory" shall mean the member countries of the European Union.
1.5 "Year 1" shall mean the period commencing on the Effective Date and
ending on December 31, 1998.
1.6 "Year 2" shall mean the period commencing on January 1, 1999 and
ending on December 31, 1999.
Page 1 of 23
<PAGE> 2
1.7 "Year 3" shall mean the period commencing on January 1, 2000 and
ending on December 31, 2000.
2. APPOINTMENT
2.1 Appointment of Concessionaire. Conditioned upon Concessionaire's
continued satisfaction of the terms and conditions of this Agreement, Sagent
hereby appoints Concessionaire, and Concessionaire hereby accepts appointment,
as Sagent's exclusive Concessionaire for the licensing and distribution of
Products to customers in the Territory only for use in the Territory only.
Concessionaire shall not reproduce or sell the Products, and Concessionaire
shall not license or distribute the Products except as expressly set forth in
this Agreement. Concessionaire agrees that it shall not offer for sale, sell,
license or otherwise distribute Products acquired by it from any entity other
than directly from Sagent without the prior written approval of Sagent.
2.2 Distribution outside the Territory. Concessionaire shall limit its
sales activities with respect to the Products to customers located in the
Territory, and shall refrain from marketing, licensing or selling the Products
outside of the Territory except to the extent such activities may not be
restricted under applicable law.
2.3 Appointment of Subdistributors. Concessionaire may appoint
subdistributors to act on the Concessionaire's behalf only on prior written
approval of Sagent; provided, however, that any compensation to such
subdistributors shall be solely the Concessionaire's responsibility. Any
agreement with such agent or subdistributor with respect to Products shall be
coterminous with this Agreement.
2.4 Independent Contractor Status. The relationship of Sagent and
Concessionaire established by this Agreement is that of independent contractors,
and neither party is an employee, agent, partner or joint venturer of the other.
Concessionaire shall not be considered an agent or legal representative of
Sagent for any purpose, and neither Concessionaire nor any director, officer,
agent, or employee of Concessionaire shall be, or be considered, an agent or
employee of Sagent. Concessionaire is not granted and shall not exercise the
right or authority to assume or create any obligation or responsibility on
behalf of or in the name of Sagent. All sales and other agreements between
Concessionaire and its customers are Concessionaire's sole responsibility and
will have no effect on Sagent's obligations under this Agreement.
2.5 Operations and Expense. The detailed operations of Concessionaire
under this Agreement are subject to the sole control and management of
Concessionaire. Concessionaire shall be responsible for all of its own expenses
and employees. Concessionaire shall provide, at its own expense, such office
space and facilities, and hire and train such personnel, as may be required to
carry out its obligations under this Agreement. Concessionaire agrees that it
shall incur no expense chargeable to Sagent, except as may be specifically
authorized in advance in writing in each case by Sagent.
2.6 No Other Rights. Except as expressly provided in this Agreement, no
right, title or interest is granted by Sagent to
Page 2 of 23
<PAGE> 3
Concessionaire. No right, title or interest is granted by Sagent to
Concessionaire relating to products other than the Products. Notwithstanding
Section 2.1 above, Sagent reserves the right to sell and distribute the Products
directly to the customers that are set forth in Exhibit C attached hereto
("House Accounts").
2.7 No Conflicts. Concessionaire represents and warrants that, as of
the Effective Date, it is not involved, directly or indirectly, in any
activities involving products which compete or have the potential to compete
with the Products, including but not limited to the distribution of competing
product lines ("Competing Activities"). Concessionaire agrees that it shall not
enter into any Competing Activities in the Territory during the term of this
Agreement and for a period of five (5) years afterward. If Concessionaire
becomes involved in any Competing Activities, Concessionaire shall promptly
inform Sagent of such involvement, and Sagent shall have, in addition to all
other remedies to which it may be entitled, the right to terminate this
Agreement without liability at any time thereafter pursuant to Section 14.2.
3. LICENSE OF SAGENT MARKS
3.1 License. Subject to the terms and conditions of this Agreement,
Sagent grants to Concessionaire a non-transferable, revocable license, without
right of sublicense, to use the Sagent Marks in the Territory solely in
connection with the sale, distribution and advertisement of the Products.
Concessionaire shall not use the Sagent Marks except as expressly permitted
herein.
3.2 Restrictions. All representations of the Sagent Marks that
Concessionaire intends to use shall first be submitted to Sagent for approval of
design, color and other details or shall be exact copies of those provided by
Sagent. Concessionaire shall fully comply with all guidelines, if any,
communicated by Sagent concerning the use of the Sagent Marks. Concessionaire
shall not alter or remove any trademarks, servicemarks, tradenames or other
marks affixed to the Products by Sagent, nor affix the Sagent Marks to any
Product. Except as set forth in this Article 3, nothing contained in this
Agreement shall grant or shall be deemed to grant to Concessionaire any right,
title or interest in or to the Sagent Marks. All uses of the Sagent Marks shall
inure solely to the benefit of Sagent, and Concessionaire shall obtain no rights
with respect to any of the Sagent Marks, other than the right to distribute
Products as set forth herein, and Concessionaire hereby irrevocably assigns to
Sagent all right, title and interest held by Concessionaire, if any, in or to
any of the Sagent Marks. At no time during or after the term of this Agreement
shall Concessionaire challenge or assist others in challenging the Sagent Marks
(except to the extent expressly entitled by applicable law) or the registration
thereof or attempt to register any trademarks, servicemarks, marks or trade
names confusingly similar to the Sagent Marks. Upon any termination or
expiration of this Agreement, or the election of Sagent pursuant to Section 4.2
below, Concessionaire shall immediately cease to use any and all of the Sagent
Marks, and any listing by Concessionaire of any Sagent Mark in any telephone
book, directory, public record or elsewhere shall be removed by Concessionaire
as soon as possible, but in any event not later than the subsequent issue of
such publication.
3.3 Infringement. Concessionaire shall promptly notify Sagent of any
actual or suspected infringements, imitations, or unauthorized use of the Sagent
Marks by third parties of which Concessionaire becomes aware. Sagent shall have
the sole right, at its expense, to bring any action on account of any such
infringements, imitations or unauthorized use, and Concessionaire shall
cooperate
Page 3 of 23
<PAGE> 4
with Sagent, as Sagent may reasonably request, in connection with any such
action brought by Sagent. Sagent shall retain any and all damages, settlement
and/or compensation paid in connection with any such action brought by Sagent.
3.4 Registered User Agreements. Sagent and Concessionaire shall enter
into registered user agreements with respect to the Sagent Marks pursuant to
applicable trademark law requirements in the Territory, if any. Concessionaire
or Sagent, at Sagent's sole discretion, shall be responsible for proper filing
of registered user agreements and all such other required registrations relating
to the legal protection of the Sagent Marks with governmental authorities in the
Territory and shall pay all costs or fees associated with such filing(s).
4. OBLIGATIONS OF CONCESSIONAIRE
4.1 Diligence. Concessionaire shall use its best efforts to promote the
marketing and distribution of the Products.
4.2 Minimum Revenue Requirements. In the event Concessionaire fails to
meet the minimum revenue requirements set forth in Exhibit E attached hereto,
then, notwithstanding anything in this Agreement to the contrary, (i) Sagent
shall be free to appoint other distributors for its Products in the Territory,
(ii) Concessionaire shall not have any exclusive sale, marketing or distribution
rights to the Products, (iii) at Sagent's election, and in Sagent's sole
discretion, the license grant of Article 3 to the Sagent Marks shall terminate,
and (iv) notwithstanding anything to the contrary in Section 5.1 below, the
Prices paid by Concessionaire for the Products shall be equal to the applicable
List Prices.
4.3 Minimum Revenue Guarantee. Concessionaire hereby guarantees that
the aggregate amount of payments received by Sagent from Concessionaire under
this Agreement during each of Year 1, Year 2 and Year 3 shall equal or exceed
the amounts of [*] dollars ($[*]), [*] dollars ($[*]) and [*] dollars ($[*]),
respectively (the "Guaranteed Minimums"). Within thirty (30) days after the end
of each of Year 1, Year 2 and Year 3, Concessionaire shall pay Sagent the
difference between the applicable Guaranteed Minimum and the actual aggregate
amount of payments received by Sagent from Concessionaire under this Agreement
during such Year 1, Year 2 or Year 3, respectively, if such actual aggregate
amount is less than the applicable Guaranteed Minimum.
4.4 Costs and Expenses. Except as expressly set forth herein,
Concessionaire shall be solely responsible for all costs and expenses related to
the advertising, marketing, promotion, and distribution of the Products and for
performing its obligations hereunder.
4.5 Promotional Materials. Concessionaire shall maintain an adequate
inventory of Sagent's current sales materials and samples ("Sales Materials")
and shall use such Sales Materials in an efficient and effective manner to
promote the sale of the Products in the Territory. Concessionaire shall
translate Sales Materials into French at Concessionaire's sole expense for
distribution to customers, and Concessionaire shall prepare and distribute such
translated Sales Materials in a professional format consistent with Sagent's
original materials, subject to final approval by Sagent ("Translated Works").
Concessionaire agrees that all Translated Works created by Concessionaire,
Page 4 of 23
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 5
and all intellectual property rights therein, shall be the sole property of
Sagent, and Concessionaire hereby assigns to Sagent all worldwide right, title,
and interest to the Translated Works and all intellectual property therein.
4.6 Reports.
4.6.1 Annual Financial Reports. Concessionaire shall provide
to Sagent annual audited financial reports, which reports shall (i) be provided
to Sagent no later than two (2) months after the close of Concessionaire's
applicable fiscal year, and (ii) be treated as Confidential Information pursuant
to the terms of Article 11 below.
4.6.2 General Market Information. Concessionaire shall provide
to Sagent information regarding general market conditions and competitors on a
regular basis, but no less than once per calendar quarter.
4.6.3 Sales Activities. Within thirty (30) days after the end
of each calendar quarter, Concessionaire shall send to Sagent a sales activities
report including the names of customers, quantities of Products purchased,
dollar amounts invoiced to and received from such customers, and customer
backlog and inventory status of Products, and further shall maintain records of
the same.
4.7 Inventory. Concessionaire shall purchase and maintain an inventory
of Products in quantity sufficient to meet the needs of its customers.
4.8 Relations with Customer. Concessionaire shall process and ship each
customer order in a timely fashion. Concessionaire shall provide to customers
any and all instructions, precautions, and other warnings provided by Sagent to
Concessionaire; and Sagent shall provide to Concessionaire any such
instructions, precautions, and other warnings as Sagent in its sole discretion
deems necessary or desirable.
4.9 Product Representations. Concessionaire shall not to make any
representations with respect to the Products other than those expressly
authorized in writing in Sagent's written data sheets.
4.10 Indemnification. Concessionaire agrees to indemnify and hold
Sagent, its officers, directors, employees, successors, and assigns harmless
from and against any and all losses, damages, or expenses of whatever form or
nature, including attorneys' fees and other costs of legal defense, whether
direct or indirect, that they, or any of them, may sustain or incur as a result
of any acts or omissions of Concessionaire or any of its directors, officers,
employees, or agents, including but not limited to (i) breach of any of the
provisions of this Agreement, (ii) negligence or other tortious conduct, (iii)
representations or statements not specifically authorized by Sagent herein or
otherwise in writing, or (iv) violation by Concessionaire (or any of its
directors, officers, employees, or agents) of any applicable law, regulation, or
order in or of the Territory or the United States.
Page 5 of 23
<PAGE> 6
5. PRODUCTS
5.1 Product Prices. The prices to be paid by Concessionaire to Sagent
for Products hereunder shall be List Prices for the Products less the
discount(s) set forth in Exhibit D attached hereto ("Prices"). "List Prices" as
used herein shall mean the prices set forth in Sagent's then-current customer
price schedules or bulletins. Prices shall be F.O.B. Sagent's facilities in Palo
Alto, California, United States. All prices are expressed and shall be payable
in U.S. dollars. The difference between List Prices and Prices shall be
Concessionaire's sole remuneration from Sagent for the distribution and sale of
Products hereunder.
5.2 Price Changes. List Prices are subject to change by Sagent at any
time in its sole discretion. List Price changes shall be effective immediately
and applicable to all purchase orders whether or not accepted prior to the
effective date of the List Price change.
5.3 Product Changes. Sagent reserves the right from time to time in its
sole discretion, without incurring any liability to Concessionaire with respect
to any previously placed Purchase Order (as defined in Section 6.1 below), to
discontinue or to limit its production of any Product; to allocate, terminate or
limit deliveries of any Product in time of shortage; to alter the design or
construction of any Product; to add new and additional products to the Products;
and upon reasonable notice to Concessionaire, to change its sales and
distribution policies, not inconsistent with the terms of this Agreement.
5.4 Discontinued Product. In the event Sagent discontinues sale of any
Product, it shall give Concessionaire prompt notice thereof. Within sixty (60)
days following the date of such discontinuation notice, Concessionaire may elect
to return for credit against future purchases hereunder any of the discontinued
Products (including samples) purchased by Concessionaire during the three (3)
months prior to the date of such notice which have not been used or sold and
which are in Concessionaire's inventory as of the date of that notice from
Sagent.
6. PURCHASER ORDERS
6.1 Purchase Orders. All orders for Products submitted by
Concessionaire shall be initiated by written purchase order in form acceptable
to Sagent (each a "Purchase Order"); provided, however, that an order may
initially be placed orally or by fax if a confirmational Purchase Order is
received by Sagent within five (5) days of said oral or fax order. All Purchase
Orders for Products are subject to acceptance by Sagent in writing, and Sagent
shall have no liability to Concessionaire with respect to Purchase Orders that
are not accepted. No partial acceptance of a Purchase Order shall constitute the
acceptance of the entire Purchase Order, absent the written acceptance of such
entire Purchase Order.
6.2 Agreement Governs. Purchase Orders shall be governed by the terms
of this Agreement. Nothing contained in any Purchase Order shall in any way
modify or delete the terms and conditions contained herein or add any additional
or different terms or conditions to the terms and conditions of this Agreement.
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<PAGE> 7
6.3 Order Changes. Purchase Orders may be canceled only with Sagent's
prior written approval. Cancellation of a Purchase Order is subject to a
restocking charge equal to ten percent (10%) of the aggregate value of such
Purchase Order.
7. PAYMENT; TAXES
7.1 Payment Terms. Payment of any and all amounts due under this
Agreement shall be in U.S. Dollars. Concessionaire shall either (i) pay for
Products within thirty (30) days of receipt of such Products by wire transfer or
check to Sagent's designated account; or (ii), at Concessionaire's option,
guarantee payment for all Products by an irrevocable letter of credit. The
letter of credit shall be upon terms acceptable to Sagent, shall provide for
payment upon delivery of Sagent's invoice and the bill of lading that relate to
the shipment, shall allow for partial shipments, and shall provide for payment
for all applicable taxes, shipping charges, and other charges to be borne by
Concessionaire as provided hereunder. All exchange, interest, banking,
collection and other charges shall be at Concessionaire's expense.
7.2 Offsets. Any credits, allowances, or other amounts payable to or
creditable by Distributor shall be subject to offset for any claims or other
amounts owed by Concessionaire to Sagent pursuant to the provisions of this
Agreement.
7.3 Taxes.
7.3.1 Taxes Generally. Prices do not include and are net of
any foreign or domestic governmental taxes or charges of any kind that may be
applicable to the sale, licensing, marketing or distribution of the Products,
including without limitation excise, sales, use, or value-added taxes; customs
or other import duties; or other taxes, tariffs or duties. Concessionaire shall
be responsible for and shall pay all such taxes and charges levied against
Sagent in a timely manner. When Sagent has the legal obligation to pay or
collect such taxes, excluding taxes on the income of Sagent, the appropriate
amount shall be invoiced to Concessionaire and paid by Concessionaire within
thirty (30) days of the date of invoice unless Concessionaire provides Sagent
with a valid tax exemption certificate authorized by the appropriate taxing
authority.
7.3.2 Withholding Taxes. All payments by Concessionaire shall
be made free and clear of, and without reduction for, any withholding taxes. Any
such taxes which are otherwise imposed on payments to Sagent shall be the sole
responsibility of Concessionaire. Concessionaire shall provide Sagent with
official receipts issued by the appropriate taxing authority or such other
evidence as is reasonably requested by Sagent to establish that such taxes have
been paid.
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<PAGE> 8
8. DELIVERY; REJECTION
8.1 Shipment and Delivery. Products delivered pursuant to the terms of
this Agreement shall be suitably packed for shipment in Sagent's standard
shipping cartons, marked for shipment to the destination specified in
Concessionaire's Purchase Order, and delivered to the carrier agent F.O.B.
Sagent's facility in Palo Alto, California, United States, at which time risk of
loss shall pass to Concessionaire. Unless otherwise specified in writing by
Concessionaire in Concessionaire's purchase order, Sagent shall select the
carrier. All freight, insurance, and other shipping expenses, as well as
expenses for any special packing requested by Concessionaire and provided by
Sagent, shall be paid by Concessionaire. All shipment and freight charges shall
be deemed correct unless Sagent receives from Concessionaire, no later than
fifteen (15) days after the date of shipment, a written notice specifying the
shipment, the purchase order number, and the exact nature of the discrepancy
between the order and the shipment in number or type of Products shipped, or
freight or other charges, as the case may be. Sagent may cease any and all
shipments of Products until Concessionaire is in full performance of its
obligations under Article 7.
8.2 Title; Clause de Reserve de Propriete. Sagent shall retain all
right, title and interest in and to Products delivered to Concessionaire until
Sagent has received all applicable payments therefor.
8.3 Inspection; Rejection. Concessionaire shall inspect all Products
promptly upon receipt thereof and may reject any defective Product, provided
that Concessionaire shall (i) within the earlier of thirty (30) days after
receipt of such alleged defective Product or ten (10) days after discovery of
such alleged defect, notify Sagent of its rejection and request a Return
Material Authorization ("RMA") number, and (ii) within ten (10) days of receipt
of the RMA number from Sagent return such rejected Product to Sagent, freight
prepaid and properly insured. Products not rejected within the foregoing time
periods shall be deemed accepted by Concessionaire. In the event that Sagent
determines that the returned Product is defective and properly rejected by
Concessionaire, Sagent shall at its option, repair or replace such defective
Product, or accept return for credit of such defective Product. Sagent shall
return to Concessionaire, freight prepaid, all repaired or replaced Products
properly rejected by Concessionaire. In the event that any rejected Product is
determined by Sagent to not be defective or to have been modified or subjected
to unusual electrical or physical stress, misuse, abuse or unauthorized repair,
Concessionaire shall reimburse Sagent for all costs and expenses related to the
inspection, repair, if any, and return of such Product to Concessionaire.
8.4 Returned Product. Concessionaire shall only return Products to
Sagent with Sagent's prior written approval. Any Product returned to Sagent by
Concessionaire as authorized under this Agreement shall be shipped, freight
prepaid, F.O.B. Sagent's address first set forth above or such other location as
Sagent may instruct Concessionaire, and shall be packed in its original packing
material. Sagent may refuse to accept any Product not packed and shipped as
herein provided.
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<PAGE> 9
9. TECHNICAL SUPPORT
9.1 Support by Concessionaire. Concessionaire shall be solely
responsible for supporting all Products distributed hereunder. Concessionaire
shall provide reasonable technical support to customers, including without
limitation (i) maintaining trained and competent technical and engineering
support personnel for the Products who are sufficiently knowledgeable with
respect to the Products to answer customer questions regarding the use and
operation of Products, (ii) designating a technical liaison to coordinate
Concessionaire's technical support provided to Customers, (iii) responding
promptly to requests for technical support from customers, and (iv) providing
technical support services to address and resolve customers' support requests
with respect to the Products. Concessionaire shall ensure that Concessionaire's
technical and engineering support personnel attend any training required by
Sagent with respect to the Products.
9.1.1 Frontline Support. Concessionaire shall ensure that all
customer questions regarding the use or operation of Products are initially
addressed to and answered by Concessionaire. Unless otherwise agreed in writing
by Sagent, Concessionaire shall not represent to any third party that Sagent is
available to answer questions from any customer directly.
9.1.2 Conformance with Sagent Policy. Concessionaire will
provide prompt and effective service and repair of Products in the Territory in
accordance with Sagent's standard support policies then in effect.
9.1.3 Additional Responsibilities. Without limiting the
foregoing and in addition to any other obligations set forth in Sagent's then
current support terms and conditions, Concessionaire also shall be responsible
for (i) providing sufficient information to Sagent for Sagent to duplicate any
reported error in the Products; (ii) incorporating updates into the Products
promptly upon receipt thereof; (iii) reporting errors promptly in English and in
writing in accordance with Sagent's standard support procedures; and (iv)
providing reasonable cooperation and full information to Sagent in the
furnishing of support for the Products.
9.2 Support by Sagent. Sagent shall use reasonable efforts to provide
to Concessionaire such back-up telephone or electronic-mail technical support as
Sagent makes generally available to its distributors other than Concessionaire.
Such telephone support shall be provided during Sagent's normal business hours
(Monday through Friday, 9:00 a.m. - 5:00 p.m. Pacific Standard Time, excluding
Sagent holidays). With respect to computer software Products, Sagent will
provide support for the then-current versions of such computer software Products
only.
10. DISCLAIMER OF WARRANTY
SAGENT MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED
OR OTHERWISE, AND SAGENT SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND
CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NONINFRINGEMENT, AND ALL OTHER IMPLIED WARRANTIES OR CONDITIONS ARISING FROM
COURSE OF DEALING, USAGE OF TRADE OR CUSTOM. NOTWITHSTANDING THE FOREGOING,
SAGENT DOES NOT EXCLUDE LIABILITY TO THE EXTENT THAT SUCH LIABILITY MAY NOT BE
EXCLUDED OR LIMITED BY LAW.
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<PAGE> 10
11. CONFIDENTIALITY AND PROPRIETARY RIGHTS
11.1 Confidentiality. Concessionaire acknowledges that by reason of its
relationship to Sagent hereunder it will have access to certain information and
materials concerning Sagent's business, plans, customers, technology, and
products that are confidential and of substantial value to Sagent, which value
would be impaired if such information were disclosed to third parties
("Confidential Information"). Concessionaire agrees that it will not use in any
way for its own account or the account of any third party, nor disclose to any
third party, any Confidential Information revealed to it by Sagent.
Concessionaire shall take every reasonable precaution to protect the
confidentiality of Confidential Information. Upon request by Concessionaire,
Sagent shall advise whether or not it considers any particular information or
materials to be confidential. Concessionaire shall not publish any technical
description of the Products beyond the description published by Sagent. In the
event of termination of this Agreement, there shall be no use or disclosure by
Concessionaire of any Confidential Information of Sagent, and Concessionaire
shall not reproduce, manufacture, have reproduced or have manufactured any
computer software programs, devices, components or assemblies utilizing any of
Sagent's confidential information.
11.2 Proprietary Rights. Concessionaire agrees that Sagent retains all
of its right, title and interest in and to all patents, trademarks, trade names,
inventions, copyrights, know-how and trade secrets relating to the Products or
the product lines that include the Products, and the design, manufacture,
operation or service of the Products. The use by Concessionaire of any of these
property rights is authorized only for the purposes herein set forth and upon
termination of this Agreement for any reason such authorization will cease.
Concessionaire shall not (and shall require that its customers do not) remove,
alter, cover or obfuscate any copyright notices or other proprietary rights
notices placed or embedded by Sagent on or in any Product.
12. INTELLECTUAL PROPERTY INDEMNIFICATION
12.1 Limited Indemnity. Concessionaire agrees that Sagent has the right
to defend, or at its option to settle, and Sagent agrees, at its own expense, to
defend or at its option to settle, any third party claim, suit or proceeding
(collectively, ("Action") brought against Concessionaire alleging the Products
infringe any copyright or trademark in existence as of the Effective Date,
subject to the limitations hereinafter set forth. Sagent shall have sole control
of any such Action or settlement negotiations, and Sagent agrees to pay, subject
to the limitations hereinafter set forth, any final judgment entered against
Concessionaire on such issue in any such Action defended by Sagent.
Concessionaire agrees that Sagent will be relieved of the foregoing obligations
unless Concessionaire notifies Sagent in writing of such Action within five (5)
days after becoming aware of such action, gives Sagent authority to proceed as
contemplated herein, and gives Sagent proper and full information and assistance
to settle and/or defend any such Action. If it is adjudicatively determined, or
if Sagent believes, that the Products, or any part thereof, infringe any
copyright or trademark, or if the sale or use of the Products, or any part
thereof, is, as a result, enjoined, then Sagent may, at its election, option,
and expense: (i) procure for Concessionaire the right under such copyright or
trademark to sell or use, as appropriate, the Products or such part thereof;
(ii) replace the Products, or part thereof, with other noninfringing suitable
products or parts; (iii) suitably modify the Products
Page 10 of 23
<PAGE> 11
or part thereof; or (iv) remove the Products, or part thereof, terminate
distribution or sale thereof and refund the payments paid by Concessionaire for
such Products less a reasonable amount for use and damage. Sagent shall not be
liable for any costs or expenses incurred without its prior written
authorization, or for any installation costs of any replaced Products.
12.2 Limitations. Notwithstanding the provisions of Section 12.1 above,
Sagent assumes no liability for infringement claims arising from (i) combination
of the Products or portions thereof with other software not provided by Sagent
if such infringement would not have occurred but for such combination, or (ii)
the modification of the Products or portions thereof unless such modification
was made or authorized by Sagent, when such infringement would not have occurred
but for such modification.
12.3 Disclaimer. SAGENT'S LIABILITY ARISING OUT OF OR RELATING TO THIS
ARTICLE 12 SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY CONCESSIONAIRE TO
SAGENT FOR THE ALLEGEDLY INFRINGING PRODUCTS THAT ARE THE SUBJECT OF THE
INFRINGEMENT CLAIM. THE FOREGOING PROVISIONS OF THIS ARTICLE 12 STATE THE ENTIRE
LIABILITY AND OBLIGATION OF SAGENT AND THE EXCLUSIVE REMEDY OF CONCESSIONAIRE
WITH RESPECT TO ANY ALLEGED INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS BY
THE PRODUCTS OR ANY PART THEREOF.
13. LIMITATION OF LIABILITY
IN NO EVENT SHALL SAGENT'S LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT EXCEED THE AGGREGATE AMOUNTS PAID BY CONCESSIONAIRE TO SAGENT
HEREUNDER, INCLUDING BUT NOT LIMITED TO LIABILITY UNDER ARTICLE 12 ABOVE. IN NO
EVENT SHALL EITHER PARTY BE LIABLE FOR LOST PROFITS, COST OF PROCUREMENT OF
SUBSTITUTE GOODS, OR ANY OTHER SPECIAL, RELIANCE, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCTS LIABILITY, OR OTHERWISE. THE
FOREGOING LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY STATED HEREIN.
14. TERM AND TERMINATION
14.1 Term. Unless earlier terminated pursuant to Section 14.2 below or
by mutual written consent, this Agreement shall commence upon the Effective Date
and continue in full force and effect for an initial term expiring on December
31, 2000. The parties may renew this Agreement for additional one (1) year terms
upon mutual written consent.
14.2 Termination. This Agreement may be terminated prior to the
expiration of the initial term by prior written notice to the other party as
follows:
14.2.1 By either party upon written notice of termination if
the other party breaches any material term or condition of this Agreement and
fails to cure that breach within thirty (30) days
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<PAGE> 12
after receiving written notice stating the nature of the breach and the
non-breaching party's intent to terminate; or
14.2.2 By either party, effective immediately, if the other
party should become the subject of any voluntary or involuntary bankruptcy,
receivership, or other insolvency proceedings or make an assignment or other
arrangement for the benefit of its creditors, or if such other party should be
nationalized or have any of its material assets expropriated; or
14.2.3 By Sagent, effective immediately, if there should occur
any material change in the management, ownership, control, sales personnel,
sales and marketing capability, or financial condition of Concessionaire; or
14.2.4 By Sagent, effective immediately, if any law or
regulation should become adopted or in effect in the Territory that would
restrict Sagent's termination rights or otherwise invalidate any provisions
hereof; or
14.2.5 By Sagent, effective immediately, if Concessionaire
should violate the terms of Section 2.7 above or Section 16.3 below; or
14.2.6 By Sagent, effective immediately, in accordance with
provisions of Sections 15.3 or 15.5; or
14.2.7 By Sagent, effective immediately, if Concessionaire
knowingly makes any false or untrue statements or representations to Sagent
herein or in the performance of its obligations hereunder.
14.3 Purchase Orders; No Waiver. Notwithstanding the foregoing,
Concessionaire shall be obligated to accept deliveries of Products for which
Purchase Orders were accepted by Sagent prior to the effective date of
termination. After any notice of termination has been delivered by either party
hereunder, deliveries of Product from Sagent to Concessionaire, unless otherwise
agreed by Sagent in its sole discretion, shall require prepayment by wire
transfer by Concessionaire to Sagent. The acceptance of any Purchase Order for
the sale of any Product to Concessionaire after the termination or expiration of
this Agreement shall not be construed as a renewal or extension of this
Agreement nor as a waiver of termination of this Agreement.
14.4 Rights of Parties Upon Termination or Expiration. The following
provisions shall apply on the termination or expiration of this Agreement.
14.4.1 Cessation of Sales Activities. Concessionaire shall
cease all sales and other activities on behalf of Sagent and shall return to
Sagent and immediately cease all use of Confidential Information previously
furnished by Sagent and then in Concessionaire's possession. Concessionaire
shall additionally turn over to Sagent Concessionaire's current customer mailing
list and take such action as is necessary to terminate Concessionaire's
registration as Sagent's sales representative with any governmental authority.
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<PAGE> 13
14.4.2 Acceleration of Amounts Owed. All indebtedness of
Concessionaire to Sagent shall become immediately due and payable without
further notice or demand, which is hereby expressly waived, and Sagent shall be
entitled to reimbursement for any reasonable attorneys' fees that it may incur
in collecting or enforcing payment of such obligations;
14.4.3 Cessation of Use of Sagent Marks. Concessionaire shall
remove from its property and immediately discontinue all use, directly or
indirectly, of the Sagent Marks, or of any word, title, expression, trademark,
design, or marking that, in the opinion of Sagent, is confusingly similar
thereto. Concessionaire shall further certify in writing to Sagent that
Concessionaire has completely terminated its use of any and all such Sagent
Marks, trademarks, designs, or markings, or any other word, title, or expression
similar thereto that appeared in or on any devices or other materials used in
conjunction with Concessionaire's business.
14.4.4 No Obligation to Repurchase. Sagent shall have no
obligation to repurchase or to credit Concessionaire for its inventory of
Products at the time of termination of this Agreement. Sagent may, at its sole
option, repurchase from Concessionaire, at Sagent's then current list prices
less any applicable then current discounts or at the net prices paid by
Concessionaire, whichever are lower, any or all inventory of Products originally
purchased by Concessionaire from Sagent and remaining unsold by Concessionaire.
14.5 No Liability for Termination. Except as expressly required by law,
in the event of termination of this Agreement by either party in accordance with
any of the provisions of this Agreement, neither party shall be liable to the
other, because of such termination, for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of Sagent or Concessionaire. Termination shall
not, however, relieve either party of obligations incurred prior to the
termination.
14.6 Survival. Except for termination by Sagent pursuant to Section
14.2.1 above, Concessionaire may sell Products existing in its inventory as of
the effective date of termination of this Agreement for a period of ninety (90)
days after the effective date of such termination ("Wind-Down Period"). During
the Wind-Down Period, the provisions of Article 15 and Sections 2.2, 4.8 and 4.9
shall survive. In addition to the foregoing provisions, the following provisions
shall survive any termination or expiration of this Agreement: Articles 1, 11,
13 and 16, and Sections 2.4, 2.6, 2.7, 3.2, 4.10, 6.2, 8.2, 14.4, 14.6, 15.1 and
15.4.
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<PAGE> 14
15. COMPLIANCE WITH LAWS
15.1 Export Control. Any and all obligations of Sagent to provide the
Products, as well as any technical data, shall be subject in all respects to
such United States laws and regulations as will from time to time govern the
license and delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor legislation, and the Export Administration
Regulations issued by the U.S. Department of Commerce, Bureau of Export
Administration. Concessionaire represents and warrants that it will not export
or reexport the Products or technical data related thereto except in conformity
with such laws and regulations.
15.1.1 Required Authorization. Concessionaire agrees that,
unless prior written authorization is obtained from the Bureau of Export
Administration, or the Export Administration Regulations explicitly permit the
export, reexport, and/or transshipment of the Products or technical data
disclosed or provided to Concessionaire, as applicable, without such written
authorization, Concessionaire shall not export, reexport or transship, directly
or indirectly, the Products or technical data, to country groups S or Z (as
defined in the Export Administration Regulations), which currently consist Cuba
and North Korea, or to Iran, Iraq or Yugoslavia (Serbia and Montenegro), or to
any other country as to which the U.S. Government has placed an embargo against
the shipment of products, which embargo is in effect during the term of this
Agreement.
15.1.2 Prohibited Customers. Concessionaire further agrees not
to resell Products to any organization, public or private, which engages in the
research or production of military devices, armaments, or any instruments of
warfare, including biological, chemical and nuclear warfare.
15.2 Import Licenses; Exchange Controls; Other Governmental Approval.
Concessionaire represents and warrants that it shall, at its expense, obtain any
and all import licenses and governmental approvals that may be necessary to
permit the sale by Sagent and the purchase by Concessionaire of the Products,
comply with all registration requirements in the Territory, obtain such
approvals from the banking and other governmental authorities of the Territory
as may be necessary to guarantee payment of all amounts due hereunder to Sagent
in U.S. dollars, and comply with any and all governmental laws, regulations, and
orders that may be applicable to Concessionaire by reason of its execution of
this Agreement, including but not limited to any requirement to be registered as
Sagent's independent distributor with any governmental authority (e.g.,
registration with the Registre du Commerce et des Societes), and including but
not limited to any and all laws, regulations, or orders that govern or affect
the ordering, export, shipment, import, sale (including government procurement),
delivery, or redelivery of the Products in the Territory. Concessionaire shall
furnish Sagent with such documentation as Sagent may request to confirm
Concessionaire's compliance with this Section 15.2 and agrees that it shall not
engage in any course of conduct that, in Sagent's reasonable belief, would cause
Sagent to be in violation of the laws of any jurisdiction.
15.3 Local Law. Concessionaire shall notify Sagent of the existence and
content of any mandatory provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at the time
of its execution or thereafter. Failure to do so shall constitute
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<PAGE> 15
a breach of this Agreement for which Sagent may terminate this Agreement
effective immediately upon notice to Concessionaire pursuant to Section 14.2
above.
15.4 Liability of Sagent. The provisions of this Agreement under which
the liability of Sagent is excluded or limited shall not apply to the extent
that such exclusions or limitations are declared illegal or void under the laws
applicable in the countries in which Products are sold hereunder.
15.5 Questionable Payments. Concessionaire certifies that neither it,
nor any of its directors, officers, employees, or agents is an official, agent,
or employee of any government or governmental agency or political party or a
candidate for any political office on the date of this Agreement. Concessionaire
shall promptly notify Sagent of the any event that would or may result in an
exception to the foregoing representation. Concessionaire shall not, directly or
indirectly, in the name of, on behalf of, or for the benefit of Sagent offer,
promise to pay, or pay any compensation, or give anything of value to, any
official, agent, or employee of any government or governmental agency, or to any
political party or officer, employee, or agent thereof. Concessionaire shall
require each of its directors, officers, employees, and agents to comply with
the provisions of this Section 15.5. Any breach of the provisions of this
Section 15.5 shall entitle Sagent to terminate this Agreement effective
immediately upon written notice to Concessionaire pursuant to Section 14.2
above.
16. MISCELLANEOUS PROVISIONS
16.1 Governing Law. This Agreement shall be governed by and construed
under the law of the France.
16.2 Jurisdiction; Venue. The parties consent to the personal
jurisdiction of, and venue in, the courts of France.
16.3 Assignment. Concessionaire may not transfer or assign any of its
rights or obligations under this Agreement without the prior written consent of
Sagent. Sagent may freely transfer or assign its rights or obligations under
this Agreement without the prior written consent of Concessionaire. Subject to
the foregoing, this Agreement will be binding upon and inure to the benefit of
the parties hereto, their successors and assigns.
16.4 No Implied Waivers. The failure of either party at any time to
require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall the
waiver of either party of a breach of any provision hereof be taken or held to
be a waiver of a provision itself.
16.5 Severability. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions will
nevertheless remain in full force and effect. The parties agree to renegotiate
in good faith those provisions so held to be invalid to be valid, enforceable
provisions which provisions shall reflect as closely as possible the original
intent of the parties, and further agree to be bound by the mutually agreed
substitute provision.
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<PAGE> 16
16.6 Force Majeure. Except for payment of monies, neither party shall
be liable for failure to fulfill its obligations under this Agreement or any
purchase order issued hereunder or for delays in delivery due to causes beyond
its reasonable control, including, but not limited to, acts of God, man-made or
natural disasters, earthquakes, fire, riots, flood, material shortages, strikes,
delays in transportation or inability to obtain labor or materials through its
regular sources. The time for performance of any such obligation shall be
extended for the time period lost by reason of the delay.
16.7 Conflicting Terms. The parties agree that the terms and conditions
of this Agreement shall prevail, notwithstanding contrary or additional terms,
in any purchase order, sales acknowledgment, confirmation or any other document
issued by either party effecting the purchase and/or sale of Products.
16.8 Heading. Headings of paragraphs herein are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
16.9 Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (a) by hand, (b) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the other party
first set forth above, or to such other address as a party may designate by
written notice in accordance with this Section 16.9, (c) by overnight courier,
or (d) by fax with confirming letter mailed under the conditions described in
(b) above. Notice so given shall be deemed effective when received, or if not
received by reason of fault of addressee, when delivered.
16.10 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions of this
Agreement in any other language shall not be binding on the parties hereto. All
communications and notices to be made or given pursuant to this Agreement shall
be in the English language. Les parties aux presentes confirment leur volonte
que cette convention de meme que tous les documents y compris tout avis qui s'y
rattache, soient rediges en langue anglaise.
16.11 Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements relating thereto, written or oral, between the
parties. Amendments to this Agreement must be in writing, signed by the duly
authorized officers of the parties. The terms of any purchase order are
expressly excluded.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 17
16.12 Injunctive Relief. CONCESSIONAIRE AGREES THAT ANY VIOLATION OR
THREATENED VIOLATION OF SECTIONS 2.7, 3.2, 3.4, 11.1, 11.2 OR 14.4.3 WILL CAUSE
IRREPARABLE INJURY TO SAGENT, ENTITLING SAGENT TO OBTAIN INJUNCTIVE RELIEF IN
ADDITION TO ALL LEGAL REMEDIES.
16.13 Buyout Agreement. This Agreement shall be conditioned upon the
execution of a separate buyout agreement substantially similar to the agreement
attached hereto as Exhibit F.
In Witness Whereof, the parties hereto have duly executed this
Agreement effective as of the Effective Date.
SAGENT: CONCESSIONAIRE:
SAGENT TECHNOLOGY, INC. SAGENT FRANCE S.A.
By: /s/ Thomas M. Loumbos By: /s/ Poirrier Michel
--------------------------- -----------------------------
Name: Thomas M. Loumbos Name: Poirrier Michel
--------------------------- -----------------------------
(Typed or Printed) (Typed or Printed)
Title: Vice President of Sales Title: President Directeur General
--------------------------- -----------------------------
Page 17 of 23
<PAGE> 18
EXHIBIT A
PRODUCT LISTING
All of Sagent's general product line, in French-language versions only from the
point when the French versions are available or the US versions inside the
French border.
Page 18 of 23
<PAGE> 19
EXHIBIT B
SAGENT TRADEMARKS, TRADENAMES AND SERVICEMARKS
Sagent
Sagent France
Page 19 of 23
<PAGE> 20
EXHIBIT C
HOUSE ACCOUNTS
Any and all present and future OEM customers worldwide.
Page 20 of 23
<PAGE> 21
EXHIBIT D
DISCOUNTS TO LIST PRICES
D.1 For so long as Concessionaire meets the minimum revenue
requirements set forth in Section 4.2, the discount for each and every Product
shall be [*]% of the List Price of such Product.
D.2 If Concessionaire fails to meet the minimum revenue requirements
set forth in Section 4.2, then there shall be no discount.
Page 21 of 23
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 22
EXHIBIT E
MINIMUM REVENUE REQUIREMENTS
E.1 Year 1. The aggregate amount of payments received by Sagent from
Concessionaire under this Agreement during Year 1 must equal or exceed [*]
dollars ($[*]).
E.2 Year 2. The aggregate amount of payments received by Sagent from
Concessionaire under this Agreement during Year 2 must equal or exceed [*]
dollars ($[*]).
E.3 Year 3. The aggregate amount of payments received by Sagent from
Concessionaire under this Agreement during Year 3 must equal or exceed [*]
dollars ($[*]).
Page 22 of 23
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 23
EXHIBIT F
BUYOUT AGREEMENT
Page 23 of 23
<PAGE> 24
SAGENT FRANCE BUYOUT AGREEMENT
This Sagent France Buyout Agreement ("AGREEMENT") is made and entered
into as of this 21st day of November, 1997 ("EFFECTIVE DATE") by and among
Sagent Technology, Inc., having offices at 2225 E. Bayshore Rd., Suite 100, Palo
Alto, California 94303, U.S.A. ("SAGENT"); Sagent France S.A., having offices at
103 Rue Pereire, Parc Pereire Bat A., 78105 St. Germain En Layes, France
("COMPANY"); and the shareholders of Company set forth in Schedule 1 attached
hereto (each a "SHAREHOLDER").
BACKGROUND
Sagent and Company have entered into a certain Exclusive Concession
Agreement dated as of November 21, 1997 (the "CONCESSION AGREEMENT"). Sagent
desires to obtain the right to purchase securities of Company under certain
circumstances, and, in fulfillment of the condition precedent set forth in
Section 16.13 of the Concession Agreement, Company and the Shareholders desire
to provide such right to Sagent, pursuant to the terms and conditions of this
Agreement.
AGREEMENT
In consideration of the mutual promises made below, and for other good
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. DEFINITIONS
1.1 "BUYOUT DATE" shall mean the date as of which Sagent chooses to
exercise the Purchase Right (as defined in Section 2.1 below).
1.2 "CLOSING DATE" shall mean the fifth business day following the
execution of the Final Certificate (as defined in Section 2.2 below).
1.3 "COMMENCEMENT DATE" shall mean the date falling twelve (12) months
immediately after the Effective Date (as defined above).
1.4 "SECURITIES" shall mean the securities of Company held by the
Shareholders as of the Buyout Date.
2. RIGHT OF PURCHASE
2.1 Right of Purchase. Sagent shall have the right to purchase all of
the Securities at any time following the Commencement Date pursuant to the terms
and conditions of this Agreement (the
Page 1 of 9
<PAGE> 25
"PURCHASE RIGHT"). Upon exercise of the Purchase Right, the Shareholders agree
to sell, assign, transfer and deliver to Sagent, and Sagent agrees to purchase
and accept from the Shareholders, the Securities for consideration equal in
value to the Purchase Price (as defined in Section 2.2 below). Sagent shall
exercise the Purchase Right by written notice to Company and the Shareholders at
least thirty (30) days in advance of the proposed Buyout Date (the "BUYOUT
NOTICE").
2.2 Purchase Price. The Purchase Price shall be determined as follows:
(1) If SAGENT chooses to execute its option to purchase Sagent
France after the effective date but prior to November 30, 1998 then the purchase
value will be equivalent to 1.5 million US dollars
(2) The "PURCHASE PRICE" shall equal the Gross Product
Revenues multiplied by the applicable Revenue Multiple, less (i) accounts
receivable due greater than sixty (60) days after the Buyout Date and (ii) lease
commitments or contingent liabilities extending more than six (6) months past
the Buyout Date. "GROSS PRODUCT REVENUES" shall equal the aggregate licensing,
sale and service revenues from the distribution of Sagent products recognized by
Company during the twelve (12) month period immediately preceding the Buyout
Date in accordance with the revenue recognition policy of Sagent then in effect.
The "REVENUE MULTIPLE" shall equal [*] ([*]), if the Buyout Date is on or after
[*] and before [*]; or [*] ([*]), if the Buyout Date is on or after [*] and
before [*]; or [*] ([*]), if the Buyout Date is on or after [*] and before [*];
or [*] ([*]), if the Buyout Date is on or after [*].
(3) Within ten (10) days after receipt of the Buyout Notice,
Company shall deliver to Sagent a certificate setting forth Company's good-faith
estimation of the Purchase Price, together with a reasonably detailed statement
of the calculation thereof (the "FIRST CERTIFICATE").
(4) On or before thirty (30) days after the Buyout Date,
Company shall deliver to Sagent a certificate setting forth Company's proposed
final calculation of the Purchase Price, together with a reasonably detailed
statement of the calculation thereof (the "SECOND CERTIFICATE").
(5) Within sixty (60) days of receipt of the Second
Certificate and supporting documentation, Sagent shall notify Company of any
objections with respect to the calculation of the proposed Purchase Price, if
any. If Sagent and Company are unable to resolve all disagreements within
fifteen (15) days of Company's receipt of Sagent's objection(s), the matter(s)
in dispute shall be resolved as soon as practicable by an independent auditor
mutually acceptable to Sagent and Company.
(6) As soon as possible after resolution of all disagreements,
if any, the parties shall execute and deliver a final, conclusive and binding
certificate that sets forth the final Purchase Price agreed upon by the parties
(the "FINAL CERTIFICATE").
(7) Company shall cooperate with Sagent in Sagent's review of
the First Certificate and the Second Certificate, and shall provide Sagent and
its employees and agents
Page 2 of 9
<PAGE> 26
(including accountants) full access to the books, records, work papers,
information, facilities and employees of Company used to prepare such
certificates.
2.3 Delivery by Company. . On or before the Closing Date, Company shall
deliver to Sagent (i) the Articles of Incorporation and Bylaws, each as amended
to date, minute books, stock transfer books and corporate seals of the Company,
and (ii) resignations effective as of the Closing Date of all the officers and
directors of the Company.
2.4 Delivery by Shareholders. On or before the Closing Date, each
Shareholder shall deliver to Sagent a certificate registered in such
Shareholder's name representing all the Securities held by such Shareholder as
of the Closing Date, duly endorsed in blank for transfer.
2.5 Delivery by Company. On or before the Closing Date, Sagent shall
deliver to the Shareholders consideration equal in value to at least
seventy-five percent (75%) of the Purchase Price, for distribution pro rata
among the Shareholders. Sagent shall deposit the balance of the consideration in
an interest-bearing escrow account, and Sagent shall instruct the escrow agent,
pursuant to a separate written escrow agreement acceptable to Sagent, to deliver
such consideration to the Shareholders six (6) months after the Buyout Date, for
distribution pro rata among the Shareholders, if Company and the Shareholders
have not violated any obligation, covenant or warranty hereunder. Sagent shall
pay at least one third (1/3) of the consideration in the form of cash, and
Sagent shall pay the remaining two thirds (2/3) of the consideration in the form
of Sagent common stock and/or cash. The value of Sagent common stock issued or
otherwise provided to Shareholders pursuant to this Section 2.5 shall be
determined (i) by reference to the appraised value of Sagent as of the date of
transfer of such Sagent common stock (the "TRANSFER DATE") as determined by an
independent third party acceptable to Sagent and Company, if Sagent common stock
is not listed on any established stock exchange or national market system as of
the Transfer Date, or (ii) by reference to the average closing sales price (or
closing bid, if no sales are reported) of Sagent common stock for the five
business (5) days prior to the Transfer Date, if Sagent common stock is listed
on any established stock exchange or national market system as of the Transfer
Date.
2.6 Multiple Buyout Dates. Notwithstanding anything to the contrary in
the foregoing, Sagent may elect to purchase the Securities across two (2) or
more buyout dates pursuant to this Section 2.6. In such event, Sagent shall
purchase at least fifty-one percent (51 %) of the Securities, on a pro rata
basis from all Shareholders, as of an initial buyout date at a pro rated
Purchase Price calculated pursuant to Section 2.2 above. Sagent shall then
purchase the balance of the Securities at one (1) or more subsequent buyout
dates no later than three (3) years after such initial buyout date at pro rated
Purchase Prices calculated pursuant to Section 2.2 above as of such subsequent
buyout dates.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants that:
3.1 Organization. Company is, and as of the Closing Date will be, a
corporation duly organized, validly existing and in good standing under the laws
of France. Company has all requisite
Page 3 of 9
<PAGE> 27
corporate power and authority to own its properties and to carry on its business
as now and anticipated to be conducted. Company is, and as of the Closing Date
will be, duly qualified, authorized or licensed and in good standing as a
foreign corporation in each jurisdiction in which the failure to be so
qualified, authorized, licensed or in good standing would have a material
adverse effect on the ability of Company to consummate the transactions
contemplated hereby. Company has delivered to Sagent true, complete and correct
copies of its Articles of Incorporation and Bylaws as in effect as of the
Closing Date.
3.2 No Conflict. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, (a)
violate or conflict with any provision of the Articles of Incorporation or
Bylaws of Company; (b) violate, or be in conflict with, or constitute a default
(or an event which, with or without due notice or lapse of time, or both, would
constitute a default) under, or cause or permit the acceleration of the maturity
of or give rise to any right of termination, cancellation, increase in
obligations, imposition of fees or penalties under, any material debt, note,
bond, indenture, mortgage, lien, lease, license, instrument, contract, deed of
trust, commitment or other agreement to which Company is a party or by which
Company is bound or any of its properties or assets are subject; (c) result in
the creation or imposition of any Encumbrance upon any material properties or
assets of Company; or (d) violate or conflict with any law, rule, regulation or
governmental order to which Company, or the business, properties or assets of
Company, are bound or subject.
3.3 No Undisclosed Liabilities. Except for obligations incurred in the
ordinary course of business which are not required under GAAP to be set forth or
reflected on a balance sheet prepared in accordance with GAAP, Company does not
have any Liability as of the Closing Date which is not reflected in its
financial statements as of the Buyout Date as provided to Sagent. The terms
"LIABILITIES" and "LIABILITY" shall mean (i) any and all debts, liabilities and
obligations of any nature whatsoever, whether accrued or fixed, absolute or
contingent, mature or unmatured or determined or determinable, including those
arising under any contract, agreement, commitment or undertaking or under any
law, rule, regulation, Action (as defined below) or Governmental Order (as
defined below), or (ii) any other debt, liability or obligation relating to or
arising out of any act, omission, transaction, circumstance, sale of goods or
services, state of facts or other condition whether or not known, due or
payable. The term "ACTION" shall mean any claim, action, suit, counterclaim,
appeal, arbitration or inquiry, or any proceeding or investigation by or before
any Governmental Authority (as defined below). The term "GOVERNMENTAL ORDER"
shall mean any order, writ, rule, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority. The term
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, municipal or local
government, governmental authority, regulatory or administrative agency,
governmental commission, department, board, bureau, agency, or instrumentality,
court, tribunal, arbitrator or arbitral body.
3.4 Restrictions on Business Activities. As of the Closing Date, there
is no agreement, commitment, obligation or Governmental Order to which Company
is a party or by which Company is bound or any of its properties or assets are
subject which has or reasonably could be expected to have the effect of
prohibiting or materially impairing, as currently conducted, any business
activity or practice of Company, any acquisition of property (tangible or
intangible) by Company or the conduct, of business, as currently conducted, of
Company.
Page 4 of 9
<PAGE> 28
3.5 Intellectual Property. Company owns all right, title and interest
in and to, or is licensed, sublicensed, or otherwise possesses legally
enforceable rights to use, free and clear of any Encumbrance, all patents,
trademarks, trade names, service marks, copyrights, maskworks, technology,
know-how, computer software programs or applications (in both source code and
object code form), and tangible or intangible proprietary information or
material that are used in or necessary for the conduct of the business of the
Company as currently conducted.
3.6 Litigation. As of the Closing Date, there is no Action of any
nature pending or to Company's knowledge threatened against Company, its
material properties or any of its officers or directors, in their capacities as
agents of the Company. There is no investigation pending or, to Company's
knowledge threatened against Company, its material properties or any of its
officers or directors, in their capacities as agents of the Company, by or
before any Governmental Authority. As of the Closing Date, no Governmental
Authority has at any time challenged or questioned in writing the legal right of
the Company to conduct its business or operations as presently or previously
conducted or proposed to be conducted. Company does not know or has any reason
to know of any valid basis for any such type of Action or investigation.
3.7 Necessary Assets and Properties. As of the Closing Date, the assets
and properties owned or leased by Company constitute all of the assets and
properties used in the operation of its business and such assets and properties
constitute all of the assets and properties necessary to continue the operation
of such business after the Closing Date. No part of the business of the Company
is operated or conducted by or through any entity other than the Company.
3.8 Legal Compliance. As of the Closing Date, Company has complied with
all applicable laws, regulations and Governmental Orders now or hereafter
applicable to Company's business, assets or properties.
3.9 All Outstanding Shares. All outstanding shareholders of Company
have signed and are parties to this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each Shareholder represents and warrants that:
4.1 No Encumbrances. All Securities held by such Shareholder shall be
free and clear of any and all Encumbrances as of the Closing Date. As used
herein, "ENCUMBRANCES" means any security interest, pledge, mortgage, lien,
charge, adverse claim or restriction of any kind, whether created by law or in
equity, including any restriction on the use, voting, transfer, receipt of
income or other exercise of any attributes of ownership.
4.2 Authority. Such Shareholder has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by such
Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the
Page 5 of 9
<PAGE> 29
part of such Shareholder, and no further corporate action is required on
the part of such Stockholder to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by such
Shareholder. This Agreement constitutes a valid and binding obligation of such
Shareholder, enforceable in accordance with its terms, except as such
enforceability may be limited by principles of public policy and subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and to rules of law governing specific performance, injunctive relief or
other equitable remedies.
4.3 No Conflict. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, (a)
violate or conflict with any provision of any other agreement to which such
Shareholder is a party or (b) violate or conflict with any law, rule, regulation
or governmental order to which such Shareholder, or the business, properties or
assets of Company, are bound or subject.
4.4 All Outstanding Shares. Such Shareholder has not transferred any
Securities except in conformance with the requirements of this Agreement.
4.5 Guarantee of Company Warranties. Each Shareholder personally
guarantees that each representation and warranty of Company in Article 3 above
shall be true and correct as of the Closing Date.
5. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES
5.1 Restrictions on Transferability. The Securities shall not be sold,
assigned, transferred or pledged except in conformity with the requirements of
this Article 5.
5.2 Restrictive Legend. Each certificate representing the Securities or
any other securities issued in respect of the Securities upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event shall
be stamped or otherwise imprinted with legends, in both English and French, in
the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RIGHTS OF
PURCHASE, RESTRICTIONS ON TRANSFERABILITY AND OTHER OBLIGATIONS AS SET FORTH IN
A BUYOUT AGREEMENT AVAILABLE BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION."
5.3 Notice of Proposed Transfers. Each shareholder shall give written
notice to Sagent of such Shareholder's intention to effect any transfer, sale,
assignment or pledge of Securities. Each such notice shall describe the manner
and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail.
5.4 Execution by Transferees. Each Shareholder agrees to cause any
proposed purchaser, assignee, transferee or pledgee of the Securities to agree
to take and hold such Securities subject to the provisions and upon the
conditions specified in this Agreement.
Page 6 of 9
<PAGE> 30
5.5 No Transfer After Buyout Notice. Each Shareholder agrees to not
sell, assign, transfer or pledge any Security for one hundred twenty (120) days
after receipt of a Buyout Notice from Sagent.
6. TERM AND TERMINATION
This Agreement shall commence on the Effective Date and shall continue
in full force and effect until January 1, 2005. This Agreement may be earlier
terminated upon the written consent of all parties.
7. MISCELLANEOUS
7.1 Governing Law. This Agreement shall be governed by and construed
under the law of the France. The parties consent to the personal jurisdiction
of, and venue in, the courts of France.
7.2 Assignment. Company and Shareholders may not transfer or assign any
of its rights or obligations under this Agreement without the prior written
consent of Sagent. Sagent may freely transfer or assign its rights or
obligations under this Agreement without the prior written consent of Company or
any Shareholder. Subject to the foregoing, this Agreement will be binding upon
and inure to the benefit of the parties hereto, their successors and assigns.
7.3 No Implied Waivers. The failure of either party at any time to
require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall the
waiver of either party of a breach of any provision hereof be taken or held to
be a waiver of a provision itself
7.4 Severability. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions will
nevertheless remain in full force and effect. The parties agree to renegotiate
in good faith those provisions so held to be invalid to be valid, enforceable
provisions which provisions shall reflect as closely as possible the original
intent of the parties, and further agree to be bound by the mutually agreed
substitute provision.
7.5 Headings. Headings of paragraphs herein are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
7.6 Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (a) by hand, (b) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the applicable
party as set forth above or in Schedule 1, or to such other address as a party
may designate by written notice in accordance with this Section 7.6, (c) by
overnight courier, or (d) by fax with confirming letter mailed under the
conditions described in (b) above. Notice so given shall be deemed effective
when received, or if not received by reason of fault of addressee, when
delivered.
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<PAGE> 31
7.7 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions of this
Agreement in any other language shall not be binding on the parties hereto. All
communications and notices to be made or given pursuant to this Agreement shall
be in the English language. Les parties aux presentes confirment leur volonte
que cette convention de meme que tous les documents y compris tout avis qui s'y
rattache, soient rediges en langue anglaise.
7.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
7.9 Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes all
prior agreements relating thereto, written or oral, between the parties.
Amendments to this Agreement must be in writing, signed by the duly authorized
officers of the parties. The terms of any purchase order are expressly excluded.
In Witness Whereof, the undersigned, being duly authorized agents of
the parties, have executed this Agreement as of the Effective Date.
Accepted by:
SAGENT TECHNOLOGY, INC. SAGENT FRANCE S.A.
/s/ THOMAS M. LOUNIBOS /s/ POIRRIER MICHEL
(Signature of Authorized Agent) (Signature of Authorized Agent)
Thomas M. Lounibos POIRRIER Michel
(Printed Name) (Printed Name)
VP of Sales President Director Leueial
(Title) (Title)
SHAREHOLDERS:
(Name of Shareholder) (Name of Shareholder)
(Signature of Authorized Agent) (Signature of Authorized Agent)
(Printed Name) (Printed Name)
(Title) (Title)
Page 8 of 9
<PAGE> 32
SCHEDULE 1
SHAREHOLDERS
POIRRIER, Michel /s/ POIRRIER, MICHEL
30 Rue Maurice Ravel
78630 VILLENNES SUR
QUERE, Emmanuel /s/ QUERE, EMMANUEL
41 Rue Pierre Nicole
75005 PARIS
CAYEUX, Marie Odile /s/ CAYEUX, MARIE ODILE
30 rue Maurice Ravel
78630 VILLENNES SUR SEINE
CARTIER, Eric /s/ CARTIER, ERIC
Domaine du Petit Beauregard
78170 LA CELLE SAINT CLOUD
VIGIER, Francois /s/ VIGIER, FRANCOIS
16 Allee des Archieres
78340 LES CLAYES-SOUS-BOIS
GUEHENNEC, Philippe /s/ GUEHENNEC, PHILIPPE
24 Hameau Belle Saison
95150 TAVERNY
DESNOYELLES, Fabrice /s/ DESNOYELLES, FABRICE
73 bis, rue de Pologne
78100 SAINTGERMAIN EN LAYE
Page 9 of 9
<PAGE> 1
EXHIBIT 10.17
VALUE-ADDED RESELLER/OEM AGREEMENT
This Agreement is made effective December 30, 1997 between Advent Software
Inc. ("ADVENT") a California based corporation, with offices at 301 Brannan
Street San Francisco CA 94107 and Sagent Technology, Inc. ("SAGENT"), with
offices at 2225 E. Bayshore Road, Suite 100, Palo Alto, California 94303. The
parties hereby agree that, after execution of this agreement ("Agreement") by an
authorized representative of each of the parties, the terms and conditions of
this Agreement shall apply to the use and distribution by ADVENT of the Software
(as defined below). All capitalized terms used herein and not otherwise defined
in this Paragraph or elsewhere in the Agreement are defined in Section 1,
Definitions.
1. DEFINITIONS
"Application" means a value-added application computer program which
is developed by ADVENT and which requires the use of one or more SAGENT Products
or Software to function.
"Basic Maintenance" means SAGENT's maintenance program which offers
new releases (other than those designated as new products by SAGENT) for
existing Products during a 12-month period for an annual fee payable in advance.
SAGENT reserves the right, in its sole discretion, to change the form and
content of its maintenance program from time to time and will provide ADVENT
with a thirty (30) day advance notice of any change(s).
"Confidential Information" means the Product(s), Software, and any
intellectual and/or proprietary rights therein, including, without limitation,
any patent, copyright, trademark, service mark, logo, trade secrets and other
proprietary rights; and any technical, business, financial or customer
information, drawings, specifications, designs, records, correspondence or other
information disclosed by ADVENT or SAGENT in relation to this Agreement, and
identified as confidential by, or proprietary to, the disclosing party.
"Confidential Information" does not include information already in the public
domain, or in the rightful possession of the other party prior to the execution
of this Agreement, or which enters the public domain other than by unauthorized
acts of any person, or which is independently developed by either party without
use of the Confidential Information or in violation of the terms of this
Agreement.
"End User" means any third party individual, business or governmental
customer of ADVENT which acquires one or more Product Copies for personal or
internal business use, and not for transfer to others.
"Effective Date" means the date this Agreement is signed by SAGENT.
"Export Laws" means all export laws, administrative regulations, and
executive orders of any applicable jurisdiction relating to the control of
imports and exports of commodities and technical data, including, without
limitation, the U.S. Department of Commerce.
"Level 1 Support" means SAGENT's support program that provides
telephone support during SAGENT's normal business hours, and Basic Maintenance
for existing Products during a 12 month period for an annual fee payable in
advance. SAGENT reserves the right, in its sole discretion, to change the form
and content of its maintenance program from time to time upon notice and will
provide ADVENT with a thirty (30) day advance notice of any such change(s).
"Level 2 Support" means SAGENT's support program that provides twenty
four hour per day and seven day per week telephone support, and Basic
Maintenance for existing Products during a 12 month period for an annual fee
payable in advance. SAGENT reserves the right, in its sole discretion, to change
the form and content of its maintenance program from time to time upon notice
and will provide ADVENT with a thirty (30) day advance notice of any such
change(s).
-1-
<PAGE> 2
"Product" means the SAGENT products (in object code form only)
outlined in Exhibit A and licensed hereunder in accordance with this Agreement
and for the fees outlined in Exhibit B.
"Software Copies" means the Sagent software capabilities (in object
code form only) outlined in Exhibit A and licensed hereunder in accordance with
this Agreement and for the fees outlined in Exhibit B which SAGENT allows ADVENT
to embed as part of its solution.
"Reseller" means, as the context requires, the ADVENT software to End
Users. A Reseller may only distribute Software Copies within the United States
and only in accordance with the terms and conditions of this contract.
"Solution" means, as the context requires, the combination of the
Application and Sagent Software functionality granted to ADVENT to use as part
of a product offering.
"User Documentation" means the then current SAGENT user manual(s) and
other written materials on the proper installation and use of, and which are
normally distributed with, the Products.
2. APPOINTMENT OF ADVENT; RELATIONSHIP OF THE PARTIES
(a) SAGENT hereby appoints ADVENT as an authorized, non-exclusive
Value-Added Reseller. An "OEM" or "VAR" develops, owns and licenses, to more
than one End User, one or more value-added Solution in conjunction with the
software functionality granted to ADVENT by SAGENT. ADVENT must at a minimum
license its Application with each Software copy it distributes.
(b) The relationship between the parties shall be that of ADVENT
licensing and embedding Sagent's software solution as outlined in Exhibit B, and
purchasing services as an independent contractor from SAGENT and reselling and
sublicensing to End Users. ADVENT and its employees are not agents or
representatives of SAGENT for any purpose and have no power or authority to
represent, act for, bind or commit SAGENT.
3. ADVENT'S RIGHTS, REPRESENTATIONS AND OBLIGATIONS
(a) SAGENT hereby grants and ADVENT hereby accepts the non-exclusive,
nontransferable royalty-bearing right to license ("License") a subset of
SAGENT's software capabilities as outlined in Exhibit A in conjunction with
ADVENT's Product offering, in accordance with the User Documentation and this
Agreement: (i) to internally use and develop its Application and a Solution;
(ii) to distribute as part of an embedded offering SAGENT's Software Copies for
use solely as part of a Solution; and (iii) to use in unaltered form the SAGENT
trademarks, service marks or marketing logos (the "SAGENT Trademarks") solely to
promote the Products, Applications or Solutions, provided ADVENT obtains
SAGENT's prior written approval for each new usage. SAGENT retains all title to
and, except as unambiguously licensed herein, all rights, including all
intellectual property rights to the Products, and all copies and derivative
works thereof (by whomever produced). If ADVENT desires to use the Products, or
desires to distribute Product outlined in the initial Exhibit A, ADVENT shall
execute additional Exhibit A's and pay SAGENT the requisite license fees from
the Price List for such licenses.
(b) ADVENT shall not (i) distribute the Software Copies on a stand
alone basis (ii) distribute the Software Copies in any way except as part of a
Solution (iii) modify or alter the object code of the Products or Software
Copies in any way (iv) use SAGENT trademark or trade name in a way that implies
ADVENT is an agency or branch of SAGENT's, or (v) distribute, provide, lease,
lend, use or allow others to use the Product or Software Copies to or for the
benefit of any third parties who are or may be competitors of SAGENT.
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<PAGE> 3
(c) ADVENT agrees not to resell, distribute or sublicense Sagent's
Software Copies, Applications or Solutions to customers other than End Users,
except where such customers are approved in writing in advance by SAGENT, such
approval not to be unreasonably withheld.
(d) ADVENT, within a reasonable time period, and after a Solution is
made available by ADVENT, shall actively market the Solution consistent with
ADVENT's marketing goals and market conditions.
(e) ADVENT may make one (1) back-up copy of Products used internally
to develop Applications, Solutions or Demonstrations.
(f) ADVENT shall ensure that the End User Agreement provided to
Advent's users is no less restrictive than Sagent's shrink wrap license
agreement for each copy of the Solution that has embedded Sagent's Software
Copies distributed by ADVENT. In addition, ADVENT shall perform any other
actions reasonably necessary to assure adequate protection of SAGENT's interests
in its intellectual property rights contained in the Product(s) and Software
Copies. In all jurisdictions where SAGENT's End User Agreement must be in
writing and signed by the End User in order to be effective, the Software Copies
may not be distributed unless ADVENT's End User signs a written license
agreement which is no less restrictive than the End User Agreement. SAGENT does
not undertake to inform ADVENT of the jurisdictions where a signed, written
software license is necessary.
(g) The Product, Software Copies and all related documentation are
protected under copyright and trade secret laws and contain proprietary
information of SAGENT and its licensors. ADVENT shall abide by the terms of any
proprietary notices or markings, and shall use the documentation and the
Software Copies only for the purposes contemplated by this Agreement, and shall
not disclose to others or reproduce the Product (except as specifically
permitted under this Agreement), unless specifically authorized by SAGENT, and
shall be liable for all loss or damage to SAGENT from any failure to so abide or
from any unauthorized disclosure by ADVENT, its agents or End Users of the
Product, Software Copies, or related documentation. ADVENT shall not translate
any portion of the Software Copies or associated documentation into any other
format or language without the prior written consent of SAGENT. In the event
such translation is made by ADVENT, ADVENT shall grant to SAGENT all right,
title and interest in any such translation or, if applicable, an exclusive,
royalty free license to exploit any copyright or other intellectual property
rights created by such translation.
(h) ADVENT shall promptly notify SAGENT of any actual or suspected
unauthorized use or disclosure of the Confidential Information received from
SAGENT, and shall provide reasonable assistance to SAGENT (at SAGENT's expense)
in the investigation and prosecution of unauthorized uses or disclosure.
(i) Except as specifically permitted by this Agreement, ADVENT shall
not directly or indirectly (i) use any Confidential Information of SAGENT to
create any computer software program or user documentation which is
substantially similar to any Product; (ii) reverse engineer, disassemble or
decompile, or otherwise attempt to derive the source code for, any Product;
(iii) encumber, timeshare, rent or lease the rights granted by this Agreement;
(iv) copy, manufacture, adapt, create derivative works of, translate, localize,
port or otherwise modify any Products or other SAGENT Confidential Information
or allow any agent or End User of ADVENT to engage in similar conduct.
(j) ADVENT does not have, and shall not claim that it has, any right
in or to any of the Products, Software Copies, or the Confidential Information
received from SAGENT other than as specifically granted by this Agreement.
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<PAGE> 4
(k) Any and all obligations of SAGENT to provide the Products, as well
as any technical assistance, will be subject in all respects to such United
States laws and regulations as will from time to time govern the license and
deliver of technology and products abroad by persons subject to the jurisdiction
of the United States, including the Export Administration Act of 1979, as
amended, any successor legislation, and the Export Administration Regulations
issued by the Department of Commerce, Bureau of Export Administration. ADVENT
warrants that it will not export or re-export the Product, Software Copies, any
Confidential Information or a Solution, or technical data related thereto,
except in conformity with such laws and regulations. ADVENT agrees that unless
prior written authorization is obtained from the Bureau of Export Administration
or the Export Administration Regulations explicitly permit the re-export without
such written authorization, it will not export, re-export, or transship,
directly or indirectly, the Product, Software Copies, any Confidential
Information or a Solution to country groups S or Z (as defined in the export
Administration Regulations), or to any other country as to which the U.S.
Government has placed an embargo against the shipment of products which is in
effect during the term of this Agreement.
If at any time SAGENT determines in its sole discretion that the laws of any
country are or become insufficient to protect SAGENT's intellectual or
proprietary rights in the Products, SAGENT reserves the right to restrict or
terminate ADVENT's and its Resellers' rights to use Products, Software Copies or
distribute Software Copies or Confidential Information in that country. ADVENT
shall take all actions reasonable necessary to enforce this restriction to
protect SAGENT's rights.
(l) This provision applies to all Products, and Software Copies
acquired directly or indirectly by or on behalf of the United States Government.
The Product and Software Copies are commercial products, licensed on the open
market at market prices, and were developed entirely at private expense and
without the use of any U.S. Government funds. If the Product or Software Copies
are supplied to the Department of Defense, the U.S. Government acquires only the
license rights customarily provided to the public and specified in this
Agreement. If the Product or Software Copies are supplied to any unit or agency
of the U.S. Government other than the Department of Defense, the license to the
U.S. Government is granted only with restricted rights. Use, duplication, or
disclosure by the U.S. Government is subject to the restrictions set forth in
subparagraph (c) of the Commercial Computer Software Restricted Rights clause of
FAR 52.227-19.
(m) During the term of this Agreement, ADVENT shall have the right to
use the Sagent Trademarks in accordance with Section 3(a), provided that upon
thirty (30) days prior written notice, SAGENT may substitute alternative marks
for any or all of the Sagent Trademarks. All representations of Sagent
Trademarks that ADVENT intends to use shall first be submitted to SAGENT for
approval (which shall not be unreasonably withheld) of design, color and other
details, or shall be exact copies of those used by SAGENT. In addition, ADVENT
shall fully comply with all reasonable guidelines, if any, communicated by
SAGENT concerning the use of SAGENT Trademarks.
ADVENT will not alter or remove any of the SAGENT Trademarks
applied to the Software, Products or User Documentation by SAGENT. Except for
the authorization set forth in this Section 3(m) , nothing herein grants or will
be deemed to grant to ADVENT any right, title or interest in SAGENT Trademarks.
All uses of the SAGENT Trademarks will inure solely to SAGENT, and ADVENT shall
obtain no rights with respect to any of these SAGENT Trademarks, other than the
right to distribute the Software Copies as set forth herein, and ADVENT
irrevocably assigns to SAGENT all such right, title and interest, if any, in any
SAGENT Trademarks. At no time during the term of this Agreement will ADVENT
challenge or assist others in challenging the SAGENT Trademarks or the
registration thereof, or attempt to register any trademarks, marks or trade
names confusingly similar to those of SAGENT. Upon termination of this
Agreement, ADVENT shall immediately cease to use any and all of the SAGENT
Trademarks.
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<PAGE> 5
SAGENT will act, at minimum, in accordance with generally accepted standards for
responsiveness to another software company. Referred problems will be
acknowledged within 1 business day. SAGENT will use its best efforts to correct
or resolve Severity Level 1 issues within 1 business day. SAGENT will use
commercially reasonable efforts to respond to serious and lower level problems
as follows: Severity Level 2 (serious) issues will be corrected or resolved
within three business days, and lower level (moderate or minimal) issues will be
corrected, resolved, or answered within ten business days, or, if agreed upon,
in the next release first.
Following termination or expiration of the Agreement, ADVENT will have the right
to continue to receive Support from SAGENT provided that maintenance is
continued to be paid.
Unless otherwise agreed in a specific instance, SAGENT has no obligation to
provide support to ADVENT's customers or Distributors.
4.
5.
6. TRAINING AND SERVICES
(a) Within a reasonable time period, and after the Product is made
available by ADVENT, ADVENT shall train and maintain a sufficient number of
capable technical and sales personnel as SAGENT and ADVENT shall mutually deem
necessary and appropriate for ADVENT to carry out its obligations and
responsibilities under this Agreement.
(b) Regardless of whether a Reseller or an End User purchases
maintenance or support services, ADVENT shall provide the appropriate level of
support, skilled instruction and assistance to End Users using the Solution(s).
In any event, ADVENT must provide all support for its Application(s).
(c) For Products used internally by ADVENT in accordance with the
terms of this Agreement, ADVENT shall purchase from SAGENT on an annual basis,
Level 1 Support or Level 2 Support in accordance with the terms of the then
current support and maintenance programs made available by SAGENT for the fees
described in Exhibit B.
(d) For Software Copies distributed by ADVENT in accordance with the
terms of this Agreement, ADVENT may purchase from SAGENT for the initial year,
and thereafter may purchase on an annual basis, Level 1 Support or Level 2
Support in accordance with the terms of the then current support and maintenance
programs made available by SAGENT for the fees described in Exhibit B.
7. LIMITED WARRANTIES
(a) SAGENT warrants that (i) it has full power to enter into and
perform this Agreement; (ii) during the first thirty (30) days from the date
ADVENT receives an unmodified Product ("Warranty Period") manufactured by
SAGENT, the Products will, under normal use and operating conditions, be free of
defects in materials and workmanship and will substantially conform to the User
Documentation.
EXCEPT FOR THESE EXPRESS LIMITED WARRANTIES, ADVENT AND ANY END USER
ACCEPT THE PRODUCTS "AS IS" WITH NO OTHER EXPRESS OR IMPLIED
WARRANTIES OR CONDITIONS OF ANY KIND, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ADVENT MAKES NO WARRANTIES REGARDING THE APPLICATION(S) OR SOLUTIONS.
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<PAGE> 6
(b) Both SAGENT and ADVENT shall mutually hold its officers,
directors, agents and employees harmless from damages awarded to a third party
by a final appealed court judgment on account of such third party's claim of
infringement by the Product of any U.S. patent issued as of the date of the
first copy of the applicable Product, Software Copies, or any copyright,
trademark or trade secret, provided SAGENT is promptly notified of any and all
threats, claims and proceedings related thereto and given reasonable assistance
and the opportunity to assume sole control over the defense and all negotiations
for a settlement or compromise; SAGENT will not be responsible for any
settlement it does not approve in writing. THE FOREGOING IS IN LIEU OF ANY
WARRANTIES OF NONINFRINGEMENT, WHICH ARE HEREBY DISCLAIMED. The foregoing
obligation of SAGENT does not apply with respect to Product or portions or
components thereof (i) not supplied by SAGENT, (ii) made in whole or in part in
accordance to ADVENT specifications, (iii) which are modified after shipment by
ADVENT, if the alleged infringement relates to such modification, (iv) combined
with other products, processes or materials where the alleged infringement
relates to such combination, (v) where ADVENT continues allegedly infringing
activity after being notified thereof or after being informed of modifications
that would have avoided the alleged infringement, or (vi) where ADVENT's use of
the Software is incident to an infringement not resulting primarily from the
Product or is not strictly in accordance with the License.
(c) ADVENT's sole remedy for SAGENT's breach of section 7(a)(ii) is
outlined under Sagent's Support policy in Exhibit B. SAGENT shall, in its sole
discretion and at its option, provide modifications to keep the Software in
substantial conformance with the related User Documentation, replace the
Products, or refund the license fees paid to SAGENT for the defective Products.
(d) ADVENT and SAGENT shall, at their own expense, indemnify, defend,
save and hold harmless each other from and against any claim, loss, expense, or
judgment (including reasonable attorneys fees) which arises (i) from any
asserted failure by either party to act in accordance with this Agreement; (ii)
misrepresentations made by either party, or (iii) from any other act or failure
to act by either party, its employees or agents.
(e) ADVENT shall, at its expense, indemnify, defend, save and hold
harmless SAGENT from and against any claim, loss, expense, or judgment
(including reasonable attorneys fees) which arises (i) from any warranties
granted in excess of those made by SAGENT in this Agreement, (ii) inadequate
installation maintenance or support of Software Copies by ADVENT; (iii) the
marketing of Software Copies by ADVENT; or (iv) from infringement by the
Application or Solution or any material supplied by ADVENT of any patent,
copyright, trademark or trade secret of any third party.
8. LIMITATION OF LIABILITY
IN NO EVENT WILL SAGENT BE LIABLE FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST REVENUES OR PROFITS),
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR ITS OBLIGATIONS
UNDER SECTION 7(b) ABOVE, SAGENT'S LIABILITY TO ADVENT OR ANY THIRD PARTY FOR A
CLAIM OF ANY KIND RELATED TO THIS AGREEMENT OR ANY PRODUCT, WHETHER FOR BREACH
OF CONTRACT OR WARRANTY, STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, SHALL NOT
EXCEED THE AGGREGATE OF FEES PAID TO SAGENT FOR THE PRODUCT OR SERVICE INVOLVED
IN THE CLAIM. NO ACTION, REGARDLESS OF FORM ARISING OUT OF THE TRANSACTIONS
UNDER THIS AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN 1 YEAR AFTER THE
EVENTS WHICH GAVE RISE TO THE CAUSE OF ACTION OCCURRED.
9. RECORDS, FEES, AUDITS, PAYMENTS, DISCOUNTS
(a) ADVENT shall pay to SAGENT a license fee ("License Fee") for
Products licensed and a royalty fee for Software Copies distributed at the price
set forth in Exhibit B.
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<PAGE> 7
(b) ADVENT acknowledges and agrees that all fees payable by ADVENT to
SAGENT for Software Copies resold by ADVENT hereunder shall be based upon the
number of embedded Software Copies or Product distributed by ADVENT with its
Solution. Each payment shall be accompanied by the corresponding Copy Record as
described in this Section 9. ADVENT shall have the right to set the fees it
charges to End Users in its sole discretion. However, fees payable by ADVENT to
SAGENT will be based on a minimum resale price by ADVENT of [*] per CPU.
(c) For each Software Copy manufactured by ADVENT, ADVENT shall
maintain complete and accurate records ("Copy Records") indicating each quarter:
the Product name, the number of licenses resold. Within 30 business days of the
end of each quarter, ADVENT shall deliver to SAGENT the Copy Records applicable
to that quarter in a report in the form of Exhibit D accompanied by any
additional payment due to SAGENT relating to such Copy Records.
(d) No more than once each year, at SAGENT's expense and with ten (10)
days prior written notice, SAGENT may audit all records of ADVENT relating to
this Agreement during ADVENT's normal business hours. If an audit reveals that
the amount which should have been paid to SAGENT is at least five percent (10%)
more than the amount reported by ADVENT, ADVENT shall pay the cost of the audit
to SAGENT. Any shortfall uncovered as a result of an audit as well as the cost
of the audit, if required by the preceding sentence, shall be paid by ADVENT to
SAGENT within 30 days of the date SAGENT notifies ADVENT that an amount is due.
(e) ADVENT shall pay any amounts owed to SAGENT on the first day of
the second month of each quarter according to the schedule in Exhibit B. The
amounts owed must be paid in full. Any amount that is recognized by Advent above
the minimum commitments specified in the Schedule in Exhibit B, may be rolled
forward for a maximum of one (1) quarter and according to the terms of this
Agreement. Each party is solely responsible for its own expenses incurred in the
performance of this Agreement. If ADVENT fails to make any payment when due, and
upon 10 days advance written notice, this Agreement will terminate.
(f) Payments will be in United States dollars. Any overdue amount
shall bear interest at a rate of eight percent (8%) per annum or the maximum
rate allowed by law if less. Costs of conversion, outside collection and related
bank charges shall be paid by ADVENT. ADVENT shall be responsible for all taxes,
tariffs and transportation costs related to this Agreement (including any value
added or sales taxes) other than taxes measured by or in relation to SAGENT's
income. All shipments by SAGENT shall be F.O.B. origin. Risk of loss and damage
will pass to ADVENT upon delivery to a shipper at SAGENT's facility.
(g) Discounts do not apply to User Documentation ordered separately,
marketing collateral materials, or other products or services offered by SAGENT
and not mentioned in Exhibit B.
(h) Subsequent to the end of the Initial Term, discounts shall
continue in the Initial Term until such a time as otherwise negotiated between
the parties.
10. TERM AND TERMINATION
(a) The term of this Agreement shall be three (3) years from December
3l, 1997 ("Initial Term"). At the expiration of the Initial Term, this Agreement
shall automatically renew annually for successive calendar years unless
terminated according to this Section 10.
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* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 8
(b) This Agreement will terminate: (i) for breach of any material term
of this Agreement or for failure to pay any amount when due, upon 10 days prior
written notice by the non-breaching party to the other, unless the cause is
susceptible of being cured and is cured within the 10 day notice period; (ii)
immediately upon written notice to ADVENT in the event ADVENT breaches Sections
3(i); (ii) immediately for breach of Section 4(a) upon written notice by the
non-breaching party to the other, (iii) immediately in the event ADVENT assigns
this Agreement without SAGENT's prior written consent; (iv) immediately and
automatically if a receiver or other liquidating officer is appointed for
substantially all of the assets or business of ADVENT, or if ADVENT makes an
assignment for the benefit of creditors, or ADVENT becomes insolvent or bankrupt
or the rights or interest of ADVENT under this Agreement become attached under
any bankruptcy, insolvency or reorganization proceedings; (v) at ADVENT's option
if a receiver or other liquidating officer is appointed for substantially all of
the assets or business of SAGENT, or if SAGENT makes an assignment for the
benefit of creditors, or SAGENT becomes insolvent or bankrupt or the rights or
interest of SAGENT under this Agreement become attached under any bankruptcy,
insolvency or reorganization proceedings; or (vi) upon written notice given by
either party to the other at least 30 days prior to the end of the then current
term. The date termination becomes effective is called the "Termination Date".
(c) If this Agreement is terminated pursuant to Section 10(b)(ii) all
rights granted under this Agreement will terminate. If this Agreement is
terminated for any other reason, all rights granted under this Agreement shall
terminate, except for ADVENT's continued right to use Software Copies for the
sole purpose of fulfilling any existing contractual obligations for services to
End Users and for its internal Development License. Use after the Termination
Date shall be subject to all the restrictions contained herein and those
provisions of this Agreement which survive termination. Upon termination or
expiration of this Agreement, ADVENT will immediately cease to be an authorized
SAGENT VAR/OEM and shall refrain from representing itself as such and from using
any SAGENT trademark or tradename.
(d) Subject to Section 10(c), within thirty (30) days of the
Termination Date, all Products, Confidential Information of SAGENT and related
materials in ADVENT's possession or control shall be returned to SAGENT, or,
upon SAGENT's written request, destroyed by ADVENT. Similarly, subject to
Section 10(c), within 30 days of the Termination Date, all Confidential
Information of ADVENT and related materials in SAGENT's possession or control
shall be returned to ADVENT or, upon ADVENT's written request, destroyed by
SAGENT.
(e) All outstanding obligations due on or before the Termination Date
per the Agreement will become due and payable within thirty (30) days after such
termination or the period otherwise provided in this Agreement, whichever is
earlier.
(f) All sections of this Agreement which by their terms imply an
on-going obligation shall survive any termination of this Agreement.
11. ESCROW. SAGENT and ADVENT shall enter into an escrow agreement in the
form attached as Exhibit C ("Escrow Agreement") where SAGENT shall place in
escrow with SourceFile fully annotated source code of the Product only for the
purpose of maintaining and supporting the Application and all related
documentation. ADVENT shall be solely responsible for all charges related to the
establishment and implementation of the Escrow Agreement. ADVENT shall be
entitled to receive a copy of the foregoing materials from escrow in accordance
with the terms and conditions of the Escrow Agreement executed by the parties.
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<PAGE> 9
13. GENERAL
(a) The parties hereto expressly understand and agree that each party
is an independent contractor in the performance of each and every part of this
Agreement, is solely responsible for all of its employees and agents and its
labor costs and expenses arising in connection therewith. Neither party is in
any manner associated with or otherwise connected with the actual performance of
this Agreement on the part of the other party, nor with the other party's
employment of other persons or incurring of other expenses.
(b) SAGENT has the right at its sole discretion, with sixty (60) days
advanced notice to ADVENT, to make changes in the design or specifications of
the Products at any time.
(c) This Agreement may not be assigned by ADVENT without the prior
written consent of SAGENT, which shall not be unreasonably withheld. Any
purported assignment in contravention of this section is null and void.
Notwithstanding the foregoing this Agreement shall bind and inure to the benefit
of any successors or assigns.
(d) Neither party will be responsible for failure of performance,
other than for any obligation to pay money, due to causes beyond its control,
including without limitation, acts of God or nature; labor disputes; sovereign
acts of any federal, state or foreign government; or shortage of materials.
(e) Notices will be delivered to a party's address to the following
individuals outlined below, or to another address which a party properly
notified the other that notices should be sent:
<TABLE>
<CAPTION>
if to ADVENT: If to SAGENT:
<S> <C>
Irv H. Lichtenwald, Kathy Ovalle
Chief Financial Officer Sagent Technology Inc.
Advent Software, Inc. 2225 E. Bayshore Rd Ste 100
301 Brannan Street Palo Alto CA 94303
San Francisco, CA 94107 Palo Alto CA 94303
</TABLE>
(f) This Agreement, including all attachments, exhibits and
appendices, is the complete and exclusive statement of the parties to this
Agreement on these subjects, and supersedes all prior written or oral proposals
and understandings relating thereto. Except as otherwise provided, this
Agreement may only be modified by a writing signed by an authorized officer of
each of the parties. This Agreement takes precedence over any purchase order
issued by ADVENT, which is accepted by SAGENT for administrative convenience
only. To the extent there is a conflict between this Agreement and the End User
Agreement, the terms of this Agreement control. If any court of competent
jurisdiction determines that any provision of this Agreement is invalid, the
remainder of the Agreement will continue in full force and effect. The offending
provision shall be interpreted to whatever extent possible to give effect to its
stated intent.
(g) Failure to require performance of any provisions or waiver of a
breach of a provision does not waive a party's right to subsequently require
full and proper performance of that provision. Singular terms will be construed
as plural, and vice versa. Section headings are for convenience only and will
not be considered part of this Agreement.
(h) This Agreement is governed by the laws of the State of California
without giving effect to its conflict of law provisions. The United Nations
Convention on Contracts for the International Sales of Goods will not apply to
this Agreement. SAGENT may seek to enforce or prevent a breach of any term of
this Agreement in the appropriate courts of any state or country in which the
Products are deployed by ADVENT or in which ADVENT maintains an office. The
prevailing party in any suit under this Agreement shall recover all costs,
expenses and reasonable attorney fees incurred in such action. Nothing in this
Agreement will be deemed a waiver by either party of any and all available legal
or equitable remedies.
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<PAGE> 10
SAGENT TECHNOLOGY, INC. ADVENT
By: /s/ KENNETH C. GARDNER By: /s/ IRV H. LICHTENWALD
---------------------------------- ------------------------------------
Name: Ken Gardner Name: Irv H. Lichtenwald
Title: Chief Executive Officer Title: Chief Financial Officer
Address: 2225 E. Bayshore Road, Address: 301 Brannan Street
Suite 100 San Francisco, CA 94107
Palo Alto, CA 94303
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<PAGE> 11
EXHIBIT A
ADVENT LICENSED PRODUCTS
Software Specifications and Definitions
The Advent supplied solution consists of the right for Advent to deliver
Sagent's Software Copies as part of an embedded solution. This solution will
allow Advent to deliver pre-built Sagent Plans which provides the customer with
technology necessary to move Advent specific data to a relational database, as
well as the delivery of pre-built plans which provides Advent with the ability
to provide its customer with pre-built Sagent Plans to delivery Reports and
Analysis results specifically against Advent data. The solution will provide
Advent with the ability to make these pre-defined plans available over a Web
Browser. Any additional functionality provides for the ability for Sagent to
upgrade these customers to a full or partial Sagent license allowing for
additional functionality against Advent data. Below lists the Product
Functionality that Sagent will allow Advent to embed as part of the Advent
delivered solution, this software includes:
<TABLE>
<CAPTION>
PROVIDER Software Description Definitions
- ----------------------------- -----------------------------
<S> <C>
1. Data Mart Server See Exhibit "A"
2. Weblink See Exhibit "A"
3. Admin See Exhibit "A"
4. Design Studio See Exhibit "A"
5. Information Studio See Exhibit "A"
6. Analysis See Exhibit "A"
</TABLE>
As SAGENT develops additional products, those products will be added to this
Exhibit A and included under this Agreement.
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<PAGE> 12
1. SAGENT DATA MART SERVER
THE SAGENT DATA MART SOLUTION
The SagentO Data Mart Solution is the first fully integrated family of products
for populating, managing, and accessing Windows NT-based data marts. Sagent's
unique Data Flow Technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart
Server, Sagent Admin, Sagent Design StudioO, Sagent Information StudioO and
Sagent WebLink.
SAGENT DATA MART SERVER
The Sagent Data Mart Server is an application server that provides a set of
services "wrapped around" a Windows NT-based data mart stored in a
relational database such as Microsoft SQL Server, Oracle or Sybase. The
Sagent Data Mart Server features a multi-threaded, agent-based architecture
and an open, RDBMS-based repository.
MULTI-THREADED, AGENT-BASED ARCHITECTURE FOR HIGH PERFORMANCE INFORMATION
ACCESS
Explicitly designed for the 32-bit, multi-threaded architecture of the
Windows NT operating system, the Sagent Data Mart Server employs
sophisticated software agents that enable high-performance and intuitive
information access. Sagent agents can perform multiple tasks simultaneously
and in the background, thereby allowing users to submit several requests at
once, or to work on other tasks while the Sagent Data Mart Server executes
their requests.
DATA FLOW PLAN PROCESSING
The Data Mart Server runs all Data Flow Plans created by Sagent Design
Studio and Sagent Information Studio. This application server takes full
advantage of multi-threading to run multiple data processing steps at one
time, completing tasks faster. Sagent's server also improves performance by
processing data on the server, avoiding any issues of network bandwidth
between the client and the server.
RESULTS SPLICING
Often the fastest way to answer a business question is to run multiple SQL
statements in parallel rather than submitting one large, complex SQL
statement. The Sagent Data Mart Server can run multiple, simple SQL
statements to get information from a data mart and then "splice" the
results together before sending them to the desktop. This results in vastly
improved query performance.
AGGREGATE NAVIGATION
Instead of always calculating aggregates on the fly, the Sagent Data Mart
Server can access pre-aggregated information in the data mart to answer
users' requests in the fastest way possible. Database administrators can
establish hierarchies of pre-aggregated values for the Data Mart Server to
use. Sagent also calculates aggregates on the fly, providing many benefits
of both multi dimensional and relational databases.
GROUP CACHING
Sagent caches in memory the result sets of end users' requests for
information. This cache can be shared within a workgroup, enabling users to
retrieve commonly accessed information virtually instantaneously. For
example, if one user requests the weekly sales data from the Sagent Data
Mart Server, the next user in that workgroup to request the same sales data
can receive the results back almost instantly, without having to pay the
price of re-executing the request.
INTEGRATION WITH NT SCHEDULING SERVICE
Sagent users can schedule both data mart population plans as well as end
user plans. These are run by the Sagent Server through the Windows NT
scheduling service.
CENTRALIZED, RDBMS-BASED REPOSITORY FOR EASY ADMINISTRATION
The Sagent Data Mart Server leverages an integrated repository to provide
central storage of all items in the Sagent environment, including:
o Metadata ("BaseViews" and "MetaViews")
o Requests for information ("Plans")
o Result sets ("Snaps")
o Data transforms
o Security information
The Sagent Repository is stored completely in relational database tables.
Users can easily share information stored in this central location. This
lets Sagent administrators manage its contents without having to learn a
proprietary file structure. Also, users can easily share information stored
in this central location. In addition, the Sagent Repository's relational
structure enables the easy exchange of metadata with other products.
FEATURES
o Multi-threaded Architecture
o Software Agents
o Results Splicing
o Aggregate Navigation
o Group Caching
o RDBMS-based Repository
o Fully Managed by Sagent Admin Tool
o Data Mart Design through Sagent Design Studio
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<PAGE> 13
SUPPORTED DATABASES
Information Access
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
o Red Brick
o Sybase 10, 11
o ODBC to DB2
o Informix
o others
Repository Databases
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
o Sybase 10, 11
SYSTEM REQUIREMENTS
Hardware
o Intel-Based processor
o Required 486 processor or higher
o Recommended Pentium Pro processor or higher
Operating System
o Microsoft Windows NT 3.5 or above
Memory
o Recommended 128+ MB for 20 users
Disk Space
o Recommended: 250 Mb (Not including relational database)
Network Protocol Support
o Named Pipes
o TCP/IP
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<PAGE> 14
2. SAGENT WEBLINK
THE SAGENT DATA MART SOLUTION
The SagentO Data Mart Solution is the first fully integrated family of
products for populating, managing, and accessing Windows NT-based data
marts. Sagent's unique Data Flow Technology lets users process data beyond
SQL to create more powerful sets of information than ever before. It
includes the Sagent Data Mart Server, Sagent Admin, Sagent Design StudioO,
Sagent Information StudioO and Sagent WebLink.
SAGENT WEBLINK
Sagent WebLink is a server-based information access tool that gives users
of Web browsers access to items developed within the Sagent Data Mart
Solution. It provides out-of-the-box functionality with a pre-built
Intranet access page. Use this page to access information in the Sagent
Data Mart, customize it, or create your own custom interface quickly and
easily with HTML.
EASY DISTRIBUTION MECHANISM
Sagent WebLink enables the easy distribution of Sagent components ("Plans"
and "Snaps") to users of Web browsers such as Microsoft Internet Explorer
and Netscape Navigator. Sagent WebLink automatically converts a result set
into an HTML table or a Microsoft Excel spreadsheet.
The Sagent WebLink pages provide a user interface in HTML that is easy to
get up and running. The Sagent WebLink pages are designed using frames for
simple navigation to different types of information, such as lists of Plans
or Snaps. After specific Plan results display, a click on another hypertext
link or a different button displays the next item. When users click on a
hypertext link for a Plan, Sagent WebLink receives the request and the Plan
is executed to retrieve the latest results from the database. Current
results are obtained each time a request is made.
WORKS WITH ANY BROWSER ON ANY PLATFORM
Sagent WebLink provides platform-independent access to information in a
customizable and secure environment. Just like viewing any Web site, users
access information through their Web browsers from any location and on any
platform that supports Internet browsers.
FEATURES
o Execution of "Plans"
o Viewing of "Snaps"
o Respects Security of Sagent Data Mart Server, RDBMS, and Microsoft and
Netscape Web Servers
o Enhanced for Netscape Navigator and Microsoft Internet Explorer
o Output
o HTML Table
o Microsoft Excel
o Supplied with Sample Web Page
o Open Environment for Designing Custom Web Page
o Sagent WebLink Command Set
o ISAPI DLL for high performance
o Configurable display of results either globally or individually
SYSTEM REQUIREMENTS
Hardware
o No Special Requirements
Operating System
o Microsoft Windows NT 3.5 or above
Memory
o Required Memory 16 Mb
o Recommended 20 Mb
Disk Space
o Required: 25 Mb
Network Protocol Support
o Named Pipes
o TCP/IP
Client Software
o Any HTML 3.0-compliant Web Browser
Server Software
o Microsoft Internet Information Server
o Any Windows NT-based Netscape Server
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<PAGE> 15
3. SAGENT ADMIN
THE SAGENT DATA MART SOLUTION
The Sagent Data Mart Solution is the first fully integrated family of products
for populating, managing, and accessing Windows NT-based data marts. Sagent's
unique Data Flow Technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart
Server, Sagent Admin, Sagent Design Studio, Sagent Information Studio and Sagent
WebLink.
SAGENT ADMIN
Sagent Admin delivers comprehensive management and administration capabilities
for Sagent Data Marts. It provides a centralized mechanism to manage a
distributed network of Sagent Data Marts, and a flexible security model to
administer Sagent users.
CENTRALIZED CONTROL OF DISTRIBUTED DATA MARTS
The Sagent Data Mart Solution uses an RDBMS-based repository to store all data
mart components, including meta data (BaseViews and MetaViews), information
requests called Plans, result sets called Snaps, and data transforms. Sagent
Admin provides extensive facilities to manage all Sagent repositories and their
components from one intuitive tree-control interface. By providing a central
point of control for a distributed network of data marts, Sagent Admin combines
the centralized control of a data warehouse with the performance gains of data
marts.
Sagent Admin lets you view and edit many of the properties of each item in the
Sagent Repository to determine ownership of Plans and Snaps, creation dates,
items that are shared among users, the presence of Data Flow Transforms and
other items stored in a repository.
You can easily monitor and control the activity of Sagent Agents on Data Mart
Systems. Sagent Admin displays the resources used and the current activity of
each agent, as well as provides control to stop an agent in progress. Sagent
also provides other administration features such as cache control for better
performance and query governing.
FLEXIBLE USER SECURITY
Sagent Admin provides a flexible model for controlling user security. Security
can be applied to data and to specific Sagent functionality. Control is
maintained over data access and what features a user can and cannot access on
their desktop.
USERS, GROUPS, ROLES AND PERMISSIONS
Sagent Admin lets you easily create users, groups, roles and permissions
within the Sagent environment. Sagent users are defined and then placed
within a group. There are three types of Sagent groups:
o Security Groups--users with permission to access the same data or
MetaViews.
o Cache Groups--users who, for improved system performance, share
commonly accessed results from requests from requests made by members
of their workgroup, that are cached on the Data Mart Server.
o Distribution Groups--users who can share information Plans and Snaps,
through Sagent's Publish and Subscribe feature.
Sagent Admin allows for the creation of Permissions which define what
database information a user can access. Control over what data each user
can see is maintained by giving a Security Group permission to access a
pre-defined set of Meta Views. Security Groups can use a "trusted" security
scheme where every Sagent user in a group uses a single database
connection, or a mapped scheme where each user has their own database
connection.
PRIVILEGES
Sagent users are also defined by Roles. Roles are pre-defined sets of
privileges which give users the right to perform certain functions within
the Sagent environment. Most functions provided by the Sagent Data Mart
Solution are associated with a privilege. For example, an end user role may
be defined without the privilege to save a Snap of the results of a plan or
to share information with other users. A power user role, on the other
hand, may have the privileges to create a Snap of information and to
Publish their Snap to others for their use.
FEATURES
o Repository Management
o Add a Repository
o Remove a Repository
o Modify a Repository
o Security
o Set User Properties
o Set Group Properties
o Security Group
o Cache Group
o Distribution Group
o Set Permissions (Data Access)
o Set Role Properties (Feature Access)
o BaseViews
o MetaViews
o Agent Administration
o Register an Agent
o Start an Agent
o Stop an Agent
o Specify Network Protocol for Agent
o Set Time-out for Agent
o Edit Agent Registry Settings
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<PAGE> 16
o Group Cache Management
o Set Cache Size
o Set Cache Policies
o Flush Items from Cache
o List Database Connections in Use
o Stop a Database Query on databases that support it
SYSTEM REQUIREMENTS
Hardware
o Intel-Based processors
o 486 processor or higher
Operating System
o Microsoft Windows 95
o Microsoft Windows NT 3.5 or above
Memory
o Required Memory 16 Mb
o Recommended 24+ Mb
Disk Space
o Required: 25 Mb
Network Protocol Support
o Named Pipes
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<PAGE> 17
4. SAGENT DESIGN STUDIO(TM)
THE SAGENT DATA MART SOLUTION
The SagentO Data Mart Solution is the first fully integrated family of products
for populating, managing, and accessing Windows NT-based data marts. Sagent's
unique Data Flow Technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart
Server, Sagent Admin, Sagent Design StudioO, Sagent Information StudioO and
Sagent WebLink.
SAGENT DESIGN STUDIO
Sagent Design Studio provides an intuitive and graphical environment for data
mart population, metadata creation and the delivery of powerful information to
users.
FAST AND EASY DATA MART POPULATION
Scheduled Population
Sagent Design Studio lets you automate population of data marts from OLTP
systems and corporate data warehouses using Sagent's innovative Data Flow
Technology. A Data Flow Plan is a graphical representation of the process of
accessing, transforming and loading or displaying data. Plans can output
information to a user's desktop or batch load data into relational database
tables. Plans can be easily scheduled to populate and refresh your data mart.
Star Schema Population
Sagent supports any relational database schema you choose to use. For maximum
performance, transform routines designed for easily converting data from an OLTP
database into a star schema are provided for you. Transforms include:
o Time Generation for Dimension Tables
o Key Generation for Dimension Tables
o Key Lookup for Fact Tables
o Time Lookup for Fact Tables
Custom Data Transformation
Sagent has integrated Microsoft Visual Basic for Applications () and Microsoft
Visual Basic Scripting Edition (VB Script) as its scripting languages so you can
easily develop custom Transforms. Or use your favorite programming tool such as
Visual Basic or C++ to customize a Sagent Data Mart that meets your specific
needs. Sagent also ships with many pre-built Transforms that you can simply drag
and drop into a plan. Or you can easily customize Sagent Transforms to meet your
requirements.
INTUITIVE METADATA CREATION
The complexities of relational database schemas are easily hidden from end users
by creating metadata layers including BaseViews, logical and graphical displays
of the physical structure of a database, and MetaViews, business representations
for end users to request information.
To create a BaseView, select tables, columns and joins of a database that will
be used to create the MetaViews. Join Groups can also be defined to resolve join
path conflicts.
MetaView components can include renamed columns and calculated columns such as
custom formulas and aggregates grouped by business categories. Multiple
MetaViews can be created from one BaseView to give groups different views of the
same data. MetaViews can span multiple data marts to provide end users with a
seamless view of more than one database.
DELIVERING POWERFUL INFORMATION TO USERS
Graphically specify actions that would be difficult, or impossible, to do using
SQL. For example, a Data Flow Plan can access data from one or more data marts
using SQL. Then a Sagent standard, or custom transform, can be added to the Plan
to perform functions that SQL can't handle, such as ranking or running averages.
Results can be delivered to an end user's desktop, loaded into a Microsoft Excel
spreadsheet, or dispatched in an electronic mail message.
FEATURES
o Data Flow Plans
o Data Mart Loading Components
o SQL Query
o Join
o Splitter
o Union
o Star Schema Transformation
o Batch Load
o Save to Table
o Data Calculation
o Rank
o Moving Average
o Moving Total
o Percent of Total
o Running Average
o Running totals
o Column Select
o Memory Sort (outside database)
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<PAGE> 18
o Sagent Scripting Components
o VB Script Source--Uses any OLE object as a data source. For
example, use an Access file or an Excel spreadsheet to input data
to a Data Flow Plan.
o VB Script Sink--Use any OLE object as an output display in a Data
Flow Plan. For example, write a script to send the data to an
Excel spreadsheet, an Access database, or a Microsoft Word
document.
o VB Script InPlace--Takes records as input, performs a process and
outputs the same number of records to another step.
o VB Script Copy--Takes records as input and lets you output those
plus additional columns. o C++, Delphi and Visual Basic Custom
Components
o Metadata Creation
o BaseViews
o Up-front Table Selection
o Add/Delete Tables
o Add/Delete Columns
o Add/Delete Joins
o Concatenated Key Support
o Create Join Groups
o Navigator for Viewing Databases
o MetaViews
o Create Multiple Views from Same Data
o A MetaView can Span Multiple Data Marts
o Create Calculated Columns
o Categories of Business Terms within each MetaView
o Importing/Exporting of Sagent Objects, between Repositories
o Search Engine
o Plans
o Snaps
o Filters
o Sorting
o Grouping by Aggregates
o Multiple Presentations
o Aggregates
o Count
o Count Distinct
o Sum
o Minimum
o Maximum
o Average
o Publish and Subscribe of Plans and Snaps
o Autosubscribe
o Live Collaboration
o Scheduling
o Staging Area
o Standard Formatting
SUPPORTED DATABASES
o Information Access
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
o Red Brick
o Sybase 10, 11
o ODBC to DB2
o others
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<PAGE> 19
o Repository Databases
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
o Sybase 10, 11
SYSTEM REQUIREMENTS
o Hardware
o Intel-Based processor
o Required 486 processor or higher
o Recommended Pentium processor or higher
o Operating System
o Microsoft Windows 95
o Microsoft Windows NT 3.5 or above
o Memory for client workstation
o Required 16 Mb
o Recommended 24 Mb
o Disk Space
o Required: 25 Mb
o Network Protocol Support
o Named Pipes
o TCP/IP
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<PAGE> 20
5. SAGENT INFORMATION STUDIO
THE SAGENT DATA MART SOLUTION
The SagentO Data Mart Solution is the fast fully integrated family of products
for populating, managing, and accessing Windows NT(R)-based data marts. Sagent's
unique Data Flow Technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart,
Sagent Admin, Sagent Design StudioO, Sagent Information StudioO and Sagent
WebLink.
SAGENT INFORMATION STUDIO
Sagent Information Studio is a graphical tool that lets end users quickly
and easily access and share information stored in Sagent Data Marts.
INTUITIVE INFORMATION ACCESS
Sagent Information Studio provides an intuitive environment for end-users
to access information in Sagent data marts. Users build requests for
information by choosing from a list of business terms in the MetaView--a
business representation of the data stored in the database. They don't need
to understand where the information is stored or how it is related. And
they are shielded from the complexities of the database structure. The
Sagent server joins the information. A user can sort, filter, aggregate and
manipulate the result set, using live data.
Sagent Searching
Since a Data Mart can contain a large number of records or Parts, Sagent
Information Studio includes a search engine to help users easily find the
information they need. Key words can be associated with Plans and Snaps to
help organize and easily find items of interest.
Plans and Snaps
Sagent Information Studio provides two methods for users to save
information requests. First they can save the requests or "Plans" for
gathering the information. Plans can be executed at any time to get the
most recent data from the Data Mart. In addition, Plans can be shared with
other users and can be scheduled to run at specified times. A Sagent user
can also save the results as a Snap. Snaps are snapshots of data from a
particular point in time. Snaps deliver huge performance and productivity
gains. By saving the results of a request as a Snap, users can quickly
access data without having to run their request again. Snaps can also be
distributed to other users and can be used as a starting point for further
analysis. Since Snaps are stored in relational database tables, they can be
re-queried against--just as with any database table.
Tight Integration with Microsoft(R) Excel(TM)
Sagent Information Studio offers tight and unique integration with
Microsoft Excel. To place the results of an information request into a
Microsoft Excel spreadsheet, Information Studio users just click a button.
An Excel spreadsheet, with the results in place, automatically becomes a
part of the Information Studio workspace. This innovative capability
enables users to use both Information Studio and Excel from a single
environment.
POWERFUL INFORMATION ACCESS
Sagent Information Studio also features powerful utilities for delivering
critical information to end users in flexible and efficient new ways. Using
the Design Studio's Data Flow Plans, power users can specify actions that
would be difficult, if not impossible, to do with SQL. Administrators can
hide the Data Flow functionality from novice users to avoid confusion and
Information Studio users may simply run these plans. Or sophisticated users
can create Data Flow plans themselves. (See the Design Studio Data Sheet.)
WORKGROUP SHARING AND COLLABORATION
Sagent Information Studio makes it easy for groups of users to share
information and collaborate to reach better business decisions.
Publish and Subscribe
With Sagent Information Studio, users can publish Plans and Snaps for
others to easily access by subscribing. Once users have subscribed to an
item, Sagent Information Studio automatically notifies them of all changes
made to it by the publisher. This feature in particularly important for
enforcing standardization among users and ensuring that all members of a
workgroup have access to consistent and timely information.
Live Collaboration
Sagent Information Studio's live collaboration facilities let groups of
users work on Sagent components simultaneously. By "broadcasting" to other
users, a Sagent Information Studio user can allow others to view the
information that is in their workspace. This capability is ideal for
workgroup decision making and for help desk environments.
FEATURES
o Data Flow Plans
o SQL Query
o Join
o Splitter
o Union
o Moving Average
o Moving Total
o Running Average
o Running Total
o Column Select
o Sagent Scripting Components
o VB Script Source --Uses any OLE object as a data source. For
example, use an Access file or an Excel spreadsheet to input data
to a Data Flow Plan.
o VB Script Sink--Use any OLE object as an output display in a Data
Flow Plan. For example, write a script to send the data to an
Excel spreadsheet, an Access database, or a Microsoft Word
document.
o VB Script InPlace--Takes records as input, performs a process and
outputs the same number of records to another step.
o VB Script Copy--Takes records as input and lets you output those
plus additional columns.
o C++, Delphi and Visual Basic Custom Components
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<PAGE> 21
o Ad-hoc Information Requests
o English-like Filters
o Sorting
o Calculated Columns
o Aggregates
o Count
o Sum
o Minimum
o Maximum
o Average
o Auto-sizing of Columns
o Search Engine
o "Plans"
o "Snaps"
o Scheduling
o Access to Multiple MetaViews
o Run Multiple plans at one time
o Integration with Microsoft Excel
o Standard Formatting
o Live Collaboration
o Publish and Subscribe
o Printing
SYSTEM REQUIREMENTS
Hardware
o Intel-Based processor
o 486 processor or higher
Operating System
o Microsoft Windows 95
o Microsoft Windows NT 3.5 or above Memory
o Recommended 24 Mb Disk Space
o Maximum Required: 25 Mb
Network Protocol Support
o Named Pipes
o TCP/IP
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<PAGE> 22
6. SAGENT ANALYSIS
Sagent Analysis is a business analysis tool that summarizes information by
multiple dimensions so that users can uncover opportunities, trends, and
weaknesses in their business. Results from information requests can be displayed
in Crosstabs or Charts so users can easily examine the same data from different
angles. Sagent Analysis makes business intelligence readily available to anyone
who wants to monitor their business operations.
MULTI-DIMENSIONAL VIEWS OF DATA
Sagent Analysis displays multi-dimensional representations of data so that users
can analyze data by dimensions such as sales by product, by region, and by
quarter. These data "FlashCubes(TM)" display as Crosstabs or two-dimensional and
three-dimensional rotating Charts. Crosstabs and Charts are multi-level and can
display any number of business dimensions and measures.
Sagent Analysis automatically creates a Crosstab or Chart from the result set of
an existing information access Plan or Snap shot of data. Users can also build a
Plan or Snap, working directly from an empty Crosstab or Chart. A single result
set can also be displayed in multiple Crosstabs and Charts so that users can
easily tab between the individual displays.
INTERACTIVE PIVOTING AND DRILLING
Sagent Analysis provides interactive pivoting and drilling capabilities in
Crosstabs and Charts. Users can pivot data in Crosstabs and Charts, or drill
into the data in any direction to discover new relationships between data sets.
Data can be drilled in an ad-hoc manner or through pre-defined hierarchies set
up by a data designer. An example of a hierarchy is Category, Brand and Product
Name in the Product dimension group. Users can also filter data in a Crosstab
with immediate results so that users view only the data combinations that they
want.
HIGH PERFORMANCE ANALYSIS
A key aspect of performing complex analysis is the processing of aggregates,
which are summarized data such as totals or averages. Sagent balances the
processing of aggregates between the client and the server for improved
performance. Aggregates can be calculated on the server and then staged on the
desktop in a FlashCube. Because data is staged on the desktop, Crosstabs and
Charts immediately display results when users are drilling, pivoting or
filtering.
SEAMLESS INTEGRATION WITH SAGENT PRODUCT LINE
Sagent Analysis plugs directly into Sagent Design Studio and Information Studio
so users can take advantage of all the benefits of the Sagent Data Mart Solution
without having to switch to another product. The features of Sagent Design
Studio and Information Studio, such as Publish and Subscribe, Scheduling,
creation of Snaps and Internet/Intranet distribution and Data Flow Plans, work
seamlessly with Sagent Analysis.
FEATURES
o Crosstabs of Multiple Dimensions
o Local Aggregation
o Server Aggregation
o Charting and Graphing
o Two-dimensional
o Three-dimensional Rotating
o Chart Wizard
o Aggregate Functions
o Drilling on Crosstabs and Charts
o Drill Down: Displays the data for the next Level of detail
o Roll Up: Collapses the lower levels of detail
o Skip Drill: Provides a short cut to display a level of a pro-defined
hierarchy
o Pivoting in Crosstabs, Charts and Graphs
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<PAGE> 23
o Analysis Filtering
o Multiple Analysis Displays in a Plan or a Snap
o Saving a Cube as a Snap
o Saving a Slice of a Cube as a Table
o Integration with Microsoft Excel
o Creating Crosstabs and Charts From Existing Plans
o Exception Highlighting
o Analysis in Sagent WebLink via ActiveX
o Charts
o Crosstabs
System Requirements
Hardware
o Intel-Based processor
o Required 486 processor or higher
o Recommended Pentium processor or higher
Operating System
o Microsoft Windows 95
o Microsoft Windows NT 3.51 or above
Memory for client workstation
o Required 16 Mb
o Recommended 32 Mb
Disk Space
o Required: 25 Mb
Network Protocol Support
o Named Pipes
o TCP/IP
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<PAGE> 24
EXHIBIT B
Fee Schedule
SOFTWARE LICENSE FEES/RESALE LICENSES/DEVELOPMENT LICENSES
1. Product Licenses for Resale. These Product licenses must be bundled
with ADVENT's Application(s) and may not be re-sold on a stand-alone basis. The
pricing is based on a per CPU charge. ADVENT will provide a royalty baring
license to SAGENT based on embedding Sagent's Server technology as part of
Advent's solution. ADVENT will remit [*] percent of the net license fees ADVENT
receives for re-licensing of the SAGENT Software Copies. ADVENT shall have the
right to set the fees it charges to End Users in its sole discretion, however,
the [*] percent of net license fees payable from ADVENT to SAGENT will be based
on a minimum re-sale price by ADVENT of $[*] per CPU. Advent further agrees
to provide guaranteed revenue minimums according to the schedule outlined below.
The payments are due the second month of each quarter, and any additional
revenues generated during the month must be paid to Sagent no later than the
following Quarter.
<TABLE>
<CAPTION>
SCHEDULE
1997 1998 1999 2000
<S> <C> <C> <C> <C> <C> <C> <C>
Q1 $ 0 Q1 $ [*] Q1 $ [*] Q1 $ [*]
Q2 $ 0 Q2 $ [*] Q2 $ [*] Q2 $ [*]
Q3 $ 0 Q3 $ [*] Q3 $ [*] Q3 $ [*]
Q4 $ 0 Q4 $ [*] Q4 $ [*] Q4 $ [*]
</TABLE>
2. Development License. ADVENT will purchase from SAGENT an unlimited
seat development and internal use license for [*].
3. Joint Opportunity Finder's Fees. Sagent will pay Advent a finder's fee
according to the schedule outlined below for any Advent sold solution that has
Sagent's product embedded as part of the solution where Advent's customer
desires to extend the Sagent granted functionality delivered by Advent.
4. Finder's Fee Schedule. Unlock leads provided to Sagent where the net
price is under $[*] Sagent will pay [*]% of net license fees received by
SAGENT. Unlock leads provided to Sagent where the net price exceeds $[*]
Sagent will pay [*]% of net license fees received by SAGENT.
-25-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 25
SUPPORT & PROFESSIONAL/TECHNICAL SERVICES PRICING/FEES
SUPPORT SERVICES
Available Support Services will include telephone support, in which we will
answer technical questions from designated persons about the installation and
use of covered Software products; Maintenance Releases, in which we will provide
our copyrighted in-line releases and workarounds as available (we will not
undertake individual fixes for you); Upgrades, in which we will provide new
product releases (signified by a change in the version number) as substitutes
for covered Software Copies; and other generally available Technical Materials.
Note that Maintenance Releases and Upgrades, where applicable, may not be used
to increase the total number of copies of the Software Copies. After upgrade or
maintenance this agreement will only apply to the upgraded or maintained
versions of a Software product; you agree to destroy or archive (but not use or
transfer) the prior version.
TECHNICAL SUPPORT SERVICES
The Professional Support program is designed to give you access to Sagent
Technology's Technical Support Analysts. These analysts are available to insure
the continued operation of your Sagent product. This includes working with a
Sagent system that has gone down, assisting with the initial setup of new
systems, and other problems that arise from the use of our products. Technical
Support Services does not include the development of custom code, or detailed
product training.
DESIGNATED PROFESSIONAL SUPPORT CONTACTS
Maintaining a clear line of communication between your organization and Sagent's
Technical Support department is key to making sure you get the most from the
Professional Support program. As such, it is important that you designate
specific individuals within your organization that become the primary contacts
for working with Sagent Technical Support. These individuals, who are familiar
with the technical workings of your company's systems, help by managing the flow
of information to the Support Analysts to insure that responses are focused on
the problem at hand. The number of contacts within your organization that have
access to Sagent Technical Support is specified in your support agreement, and
is determined by you based on your need.
WORKING WITH TECHNICAL SUPPORT
Sagent Technical Support tracks your issues based on an incident model. While we
do not limit you to a specific number of incidents, we do use incidents to make
sure that each issue that you have is resolved to the best of our ability. An
incident is defined as a single support issue that cannot be broken down into
smaller support issues. Each of these incidents is tracked individually, and can
be referenced by you when you contact us.
CONTACTING SAGENT TECHNICAL SUPPORT BY PHONE
Use the phone to contact Sagent Technical Support whenever you have a
time-critical or business-critical problem. Sagent Technical Support is
available from 6:00 AM to 5:00 PM PST, Monday through Friday. If we are unable
to answer your call immediately, you will be given the option to leave a voice
mail message. In the message, please be sure to give us your name, company name,
a description of the problem, and a phone number that you can be reached at. All
calls that go to voice mail will be responded to within two business hours. If
we fail to connect with you on the return call, we will leave a message (if
possible) with an appropriate time to follow up.
CONTACTING SAGENT TECHNICAL SUPPORT BY ELECTRONIC MAIL
For problems that are not time-critical, you can contact us via the Internet at
[email protected]. We will respond to all mail messages within one
business day of the time it arrives at Sagent Technical Support. Please be sure
to include a full description of the problem, your name, your company's name,
and a return e-mail address.
ESCALATION PROCESS
Step 1 -- All new technical support issues are handled initially by our support
analysts. Our support
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<PAGE> 26
analysts are trained to deal with the majority of all support issues,
and most support issues are resolved at this step.
Step 2 -- If an issue comes up that cannot be handled by the support analyst, it
is given one of the following priorities.
A) Critical - For business outages, or issues, that have a serious
customer impact which threatens future productivity.
B) Important - For issues that do not have a significant current
impact on customer productivity.
Step 3 -- Critical issues are immediately escalated to Sagent's upper management
team to determine the proper course of action.
Important issues are escalated to an escalation review committee,
which meets regularly to determine the proper course of action for
these escalations.
Step 4 -- The course of action determined in Step 3 is communicated to the
customer, and an estimated time to complete is given.
ANNUAL SUPPORT FEES
PRODUCT SUPPORT AND MAINTENANCE. Upon the licensing of the Sagent/Advent
solution to an Advent customer, ADVENT shall charge its End User an annual
product support and maintenance fee. ADVENT shall remit to SAGENT on a quarterly
basis, [*] percent of the product support and maintenance fees collected by
ADVENT for the SAGENT Software.
Product Support and Maintenance for first year of the internal use Development
License shall be $[*] due June 30, 1998. Subsequent years Product Support and
Maintenance will be included at no additional charge beyond those fees remitted
by ADVENT to SAGENT for End User support as provided in the immediately
preceding paragraph.
ADVENT shall provide "Tier 1 Support" and "Tier 2 Support" to its customers;
SAGENT will provide customers "Tier 3 Support." "Tier 1 Support" shall mean
assistance to customers' non-technical questions, such as shipment status and
licensing issues, and technical questions that can be solved from lists of known
problems and frequently asked questions, including basic customer questions
regarding release information, basic product features and functionality. "Tier 2
Support" shall mean assistance to customer cases which are deemed too difficult
or involved to be handled by under Tier 1 Support and include cases involving
in-depth research or problem solving regarding product features, operations, or
functionality. "Tier 3 Support" shall mean assistance to customer cases which
are deemed too difficult or involved to be handled by Tier 2 Support and include
cases involving the reproduction of high severity/difficulty issues, those which
require verification of problem reproductions developed by Tier 2 Support staff,
and those which involve undocumented product features or functionality.
TRAINING FEES
Training Classes are $[*] per day for up to 10 participants, plus any related
travel or business expenses incurred. Should a training class exceed 10
participants, then an additional fee of $[*] per student will be charged
rates.
CONSULTING FEES
Consulting is available from Sagent for a fee of $[*] per day (8 hours)
plus any related travel or business expenses.
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* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 27
EXHIBIT C
[ESCROW AGREEMENT]
TERMS AND CONDITIONS OF ESCROW ACCOUNT
SourceFlex
Software Escrow Agreement
Developer [Sagent Technology, Inc.] SourceFile
This contract is a two-party agreement between SourceFile and Sagent Technology,
Inc. End-users may sign on to this agreement as they license the technology from
the Sagent. The SourceFile contract provides the opportunity to serve all
licensees of a particular Software Developer for one or more systems.
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<PAGE> 28
SOURCEFILE
SOFTWARE SOURCE CODE ESCROW AGREEMENT
SOURCEFILE NUMBER: ___7446_______
This Software Source Code Escrow Agreement, dated as of January 6, 1997 by
and between FileSafe, Inc., a California corporation, doing business as
SourceFile ("SourceFile") located at 1350 West Grand Ave., Oakland, California,
94607 and Sagent Technology, Inc., located at 2225 E. Bayshore, Palo Alto, CA,
94303 ("Sagent"), and each Beneficiary identified by Depositor to SourceFile as
provided for in Paragraph 3 hereof (each a "Beneficiary", collectively the
"Beneficiaries").
RECITALS:
A. Pursuant to certain software license agreements (each a "License
Agreement", collectively the "License Agreements"), Depositor licenses to
certain licensees certain software in object code form (the "Software"). A
description of each Software effective as of the date hereof, is attached hereto
as Exhibit "A".
B. The Software is the proprietary and confidential information of
Depositor, and Depositor desires to protect such ownership and confidentiality.
C. Depositor desires to ensure the availability to its Beneficiaries of
the source code and all necessary proprietary information related to the
Software (the "Source Material") in the event certain conditions set forth in
Paragraph 4 of this Agreement should occur.
AGREEMENT:
1. DELIVERY OF SOURCE MATERIAL TO SOURCEFILE. Upon execution of this
agreement, Depositor shall deliver to SourceFile a parcel (the "Parcel") sealed
by Depositor, which Depositor represents and warrants contains the Source
Material. SourceFile has no knowledge of, and makes no representations with
respect to, the contents or substance of the Parcel, the Software or the Source
Material. Depositor shall send to SourceFile a duplicate of the Source Material
within three (3) days after receiving written notice from SourceFile that the
Source Material has been destroyed or damaged. All supplements shall be subject
to the terms and provisions of this Agreement.
2. ACKNOWLEDGMENT OF RECEIPT BY SOURCEFILE. SourceFile shall promptly
acknowledge to Depositor and to Beneficiary the receipt of the Parcel and any
supplements to the Source Material which are added to the Parcel. Depositor
shall provide supplements to the Source Material for each version of the
Software. All such supplements shall be subject to the terms and provisions of
this Agreement. SourceFile will notify Beneficiary and Depositor of each update
to the Source Material. Such notification will be sent via certified mail,
return receipt required. SourceFile will provide an account status report to the
Beneficiary and Depositor on a semi-annual basis.
3. ACKNOWLEDGMENT BY BENEFICIARIES. For purposes of this Agreement, a
licensee of the Software under a fully executed License Agreement, shall be a
Beneficiary hereunder with such rights of a Beneficiary as set forth herein,
only if (i) such licensee has sent to SourceFile a fully executed copy of the
form of acknowledgment attached hereto as Exhibit "B", in which such licensee
accepts the terms of this Agreement and (ii) all fees are paid. The names and
addresses of the Beneficiaries shall be described in one or more schedules of
Beneficiaries. A schedule of Beneficiaries effective as of the date of this
Agreement is attached hereto as Exhibit "C." All other licensees of the Software
shall have no rights hereunder and SourceFile shall have no duties to such
licensees.
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<PAGE> 29
4. TERMS AND CONDITIONS OF THE SOURCE MATERIAL ESCROW. The Parcel shall
be held by SourceFile upon the following terms and conditions:
(i) Beneficiary's right to possession of the Source Code is subject
to Beneficiary's execution of a registration document with
SourceFile and payment to Sagent of an annual fee for
Beneficiary's participation in such escrow account. Such
registration document shall provide Beneficiary access to the
Source Code, the right to use and modify the Source Code solely
to maintain and support Beneficiary's current and future
customers of the Licensed Material and the right to produce
object code copies of the modified Licensed Material as part of
Beneficiary's applications for use in accordance with the terms
of the Agreement, subject to the following conditions: (a)
Beneficiary is in compliance with the terms of the Agreement; (b)
Beneficiary has a valid license to the Licensed Material; and (c)
Beneficiary has a valid maintenance agreement with Sagent for
support of the Licensed Material, and either (1) a petition in
bankruptcy has been filed in Sagent's name, whether voluntarily
or involuntarily, and such petition is not withdrawn within 90
days of such filing or (2) pursuant to Sagent's obligations under
a valid maintenance agreement with Beneficiary, Sagent has
consistently and repeatedly faded or refused to correct a
catastrophic error or numerous individual errors in the Licensed
Materials which render the licensed materials commercially
unusable. Provided that the above conditions exist, and
Beneficiary has given Depositor written notice of such breach
which was not cured within 60 days (the Release Condition), then
SourceFile shall follow the following procedures set forth in
this Section 4, parts (ii), (iii), (iv) and (v).
(ii) SourceFile shall promptly notify Depositor of the occurrence of
the Release Condition and shall provide to Depositor a copy of
Beneficiary's notice to SourceFile.
(iii) If SourceFile does not receive Contrary Instructions, as defined
below, from Depositor within sixty (60) days following
SourceFile's delivery of a copy of such notice to Depositor,
SourceFile shall deliver a copy of the Source Material to
Beneficiary. "Contrary Instructions" for the purposes of this
Section 4 shall mean the filing of written notice with SourceFile
by Depositor, with a copy to the Beneficiary demanding delivery,
stating that the Release Condition has not occurred or has been
cured.
(iv) If SourceFile receives Contrary Instructions from Depositor
within sixty (60) days of the giving of such notice to Depositor,
SourceFile shall not deliver a copy of the Source Material to the
Beneficiary, but shall continue to store the Parcel until: (1)
otherwise directed by the Depositor and Beneficiary jointly; (2)
SourceFile has received a copy of an order of a court of
competent jurisdiction directing SourceFile as to the disposition
of the Source Material; or (3) SourceFile has deposited the
Parcel with a court of competent jurisdiction or a Trustee or
receiver selected by such court pursuant to this Section 4, part
(v) below.
(v) Upon receipt of Contrary Instructions from Depositor, SourceFile
shall have the absolute right at SourceFile's election, to file
an action in interpleader requiring the Depositor and Beneficiary
to answer and litigate their several claims and rights amongst
themselves. SourceFile is hereby authorized to comply with the
applicable interpleader statutes of the State of California in
this regard.
5. TERM OF AGREEMENT. This Agreement shall have an initial term of three
(3) years. The term shall be automatically renewed on a yearly basis thereafter,
unless Depositor, Beneficiary, or SourceFile notifies the other parties in
writing at least forty-five (45) days prior to the end of the then current term
of its intention to terminate this Agreement.
6. COMPENSATION OF SOURCEFILE. Depositor or Beneficiary agree to pay
SourceFile reasonable compensation for the services to be rendered hereunder in
accordance with SourceFile's then current schedule of fees, except that any fees
associated with Escrow Release Requests and Technical Review/Verification
Requests initiated by a Beneficiary must be paid by that Beneficiary in
accordance with SourceFile's then current schedule of fees. Depositor or
Beneficiary will pay or reimburse SourceFile upon request for all reasonable
expenses, disbursements and advances, including software duplication charges,
incurred or made by it in connection with carrying out its duties hereunder.
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<PAGE> 30
7. LIMITATION OF DUTIES OF SOURCEFILE. SourceFile undertakes to perform
only such duties as are expressly set forth herein.
8. LIMITATION OF LIABILITY OF SOURCEFILE. SourceFile may rely on and
shall suffer no liability as a result of acting or refraining from acting upon
any written notice, instruction or request furnished to SourceFile hereunder
which is reasonably believed by SourceFile to be genuine and to have been signed
or presented by a person reasonably believed by SourceFile to be authorized to
act on behalf of the parties hereto. SourceFile shall not be liable for any
action taken by it in good faith and believed by it to be authorized or within
the rights or powers conferred upon it by this Agreement. SourceFile may consult
with counsel of its own choice, and shall have full and complete authorization
and protection for any action taken or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel.
9. INDEMNIFICATION OF SOURCEFILE. SourceFile shall be responsible to
perform its obligations under this agreement and to act in a reasonable and
prudent manner with regard to this escrow arrangement. Provided that SourceFile
has acted in the manner stated in the previous sentence, Depositor and
Beneficiary each agree to indemnify, defend, and hold harmless SourceFile and
its agents and employees (collectively, "SourceFile") from any and all claims,
demands, liability, costs and expenses (including attorney's fees) incurred by
SourceFile directly or indirectly arising from or relating to the Source
Material and/or SourceFile's performance of its duties under this Agreement.
10. RECORD KEEPING AND INSPECTION OF SOFTWARE. SourceFile shall maintain
complete written records of all materials deposited by Depositor pursuant to
this Agreement. During the term of this Agreement, Depositor shall be entitled
at reasonable times during normal business hours and upon reasonable notice to
SourceFile to inspect the records of SourceFile maintained pursuant to this
Agreement and to inspect the facilities of SourceFile and the physical condition
of the Source Material.
11. TECHNICAL VERIFICATION. Beneficiary reserves the option to request
SourceFile to verify the Source Material for completeness and accuracy. At
Beneficiary's expense, SourceFile may elect to perform the verification at its
site or at the Depositor's site. Depositor agrees to reasonably cooperate with
SourceFile in the verification process by providing its facilities and computer
systems and by permitting SourceFile and at least one employee of Beneficiary to
be present during the verification of Source Material.
12. RESTRICTION ON ACCESS TO SOURCE MATERIAL. SourceFile shall maintain
the Source Materials in a secure, environmentally safe, locked receptacle which
is accessible only to authorized SourceFile employees. SourceFile shall not
disclose the contents of this Agreement to any third party. If SourceFile
receives a subpoena or other order of a court or other judicial tribunal
pertaining to the disclosure or release of the Source Materials, SourceFile will
immediately notify Depositor. Except as required to carry out its duties
hereunder, SourceFile shall not permit any SourceFile employee, Beneficiary or
any other person access to the Source Material except as expressly provided
herein, unless consented to in writing by Depositor. SourceFile shall use its
best efforts to avoid unauthorized access to the Source Material by its
employees or any other person.
13. BANKRUPTCY. Depositor and Beneficiary acknowledge that this Agreement
is an "agreement supplementary to" the License Agreement as provided in Section
365(n) of Title 11, United States Code (the "Bankruptcy Code"). Depositor
acknowledges that if Depositor, as a debtor in possession or a trustee in
Bankruptcy in a case under the Bankruptcy Code, rejects the License Agreement or
this Agreement, Beneficiary may elect to retain its rights under the License
Agreement and this Agreement as provided in Section 365(n) of the Bankruptcy
Code. Upon written request of Beneficiary to Depositor or the Bankruptcy
Trustee, Depositor or such Bankruptcy Trustee shall not interfere with the
rights of Beneficiary as provided in the License Agreement and this Agreement,
including the right to obtain the Source Material from SourceFile as permitted
hereunder.
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<PAGE> 31
14. NOTICES.
(i) Any notice or other communication required or permitted under
this Agreement shall be in writing and shall be deemed to have
been duly given on the date service is served personally, sent by
overnight courier, or five (5) days after the date of mailing if
sent registered mail, postage prepaid, return receipt required,
and addressed as follows or to such other address or facsimile
number as either party may, from time to time, designate in a
written notice given in like manner:
TO DEPOSITOR: Sagent Technology, Inc.
2225 East Bayshore Road, Suite 100
Palo Alto, CA 94303
Phone: (415) 493-7100
Fax: (415) 493-1290
TO SOURCEFILE: SourceFile
1350 West Grand Ave.
Oakland, CA 94607
Attn: Client Services
Phone: (510)419-3888
Fax: (510)419-3875
(ii) Deposit update notices and invoices will be sent to parties
listed in Exhibit "D" and "E."
TO BENEFICIARY: As set forth in Exhibit "C" Schedule of Beneficiaries.
15. MISCELLANEOUS PROVISIONS.
(a) WAIVER. Any term of this Agreement may be waived by the party
entitled to the benefits thereof, provided that any such waiver must be in
writing and signed by the party against whom the enforcement of the waiver is
sought. No waiver of any condition, or of the breach of any provision of this
Agreement, in any one or more instances, shall be deemed to be a further or
continuing waiver of such condition or breach. Delay or failure to exercise any
right or remedy shall not be deemed the waiver of that right or remedy.
(b) MODIFICATION OR AMENDMENT. Any modification or amendment of any
provision of this Agreement must be in writing, signed by the parties hereto and
dated subsequent to the date hereof.
(c) GOVERNING LAW JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of California. All
disputes arising out of or related to this Agreement shall be subject to the
exclusive jurisdiction and venue of the State and Federal courts of Santa Clara
County, California.
(d) HEADINGS; SEVERABILITY. The headings appearing at the beginning
of the sections contained in this Agreement have been inserted for
identification and reference purposes only and shall not be used to determine
the construction or interpretation of this Agreement. If any provision of this
Agreement is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(e) FURTHER ASSURANCES. The parties agree to perform all acts and
execute all supplementary instruments or documents which may be reasonably
necessary to carry out the provisions of this Agreement.
(f) ENTIRE AGREEMENT. This Agreement, including the attachments
hereto contains the entire understanding between the parties and supersedes all
previous communications, representations and contracts, oral or written, between
the parties, with respect to the subject matter thereof. It is agreed and
understood that this document and agreement shall be the whole and only
agreement between the parties hereto with regard to these escrow instructions
and the obligations of SourceFile herein in connection with this Agreement, and
shall supersede and cancel any prior instructions. SourceFile is specifically
directed to follow these instructions only and SourceFile shall have no
responsibility to follow the terms of any prior agreements or oral
understandings.
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<PAGE> 32
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
DEPOSITOR SOURCEFILE
SAGENT TECHNOLOGY, INC., FILESAFE, INC.,
a California corporation a California corporation
By: _________________________________ By: ____________________________________
Name: Ken Gardner Name: __________________________________
Title: Chief Executive Officer Title: _________________________________
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<PAGE> 33
EXHIBIT "A"
DESCRIPTION OF SOURCE MATERIAL
SourceFile Account #: ___7446______
The Depositor agrees to deposit the Source Material for the benefit of the
Licensee of this escrow arrangement. Below is the acknowledgment that the
deposit arrived at SourceFile in good order. It is completed by the Depositor
and visually inspected by SourceFile. A copy of this form will be shared with
Licensees of the Source Material. (As multiple deposits are made, please make
copies of this form and number them appropriately. For example, the initial
deposit will be Exhibit "A-1", the next "A-2" and so on).
1. Source Material Deposit
Product Name Sagent Datamart Server, Web Link
Version ____2.0_____________________
2. Type of Media
-- There can be more than one type (i.e., diskette, tape, hard copy
materials, etc.)
-- Please include the quantity of type (i.e., two (2) diskettes)
__1 tape___________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3. Please check one of the following:
Initial Deposit____ Supplemental __X__ Replacement _______ *
*If replacement, then: Destroy Deposit_____ or Return Deposit_____
________________________________________________________________________________
Completed by: Visually verified by:
DEPOSITOR SOURCEFILE
By: _________________________________ By: ____________________________________
Name: Ken Gardner Name: __________________________________
Title: Chief Executive Officer Title: Client Services
Date: _______________________________ Date: __________________________________
EXHIBIT "B"
FORM OF ACKNOWLEDGMENT BY BENEFICIARY
The undersigned hereby acknowledges, accepts and agrees to be bound by the
terms of the attached SourceFlex Software Source Code Escrow Agreement by and
between SourceFile, Inc., a California corporation, as Escrow Agent and Sagent
Technology, Inc., as Licensee, dated December 1, 1996.
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<PAGE> 34
BENEFICIARY: By: __________________________
Name: ________________________
Company: _____________________
Title: _______________________
Address: _____________________
______________________________
______________________________
Phone: _______________________
Fax: _________________________
DEPOSITOR: Sagent Technology, Inc.
2225 East Bayshore Rd., Suite 100
Palo Alto, CA 94303
Phone: (415) 493-7100
Fax: (415) 493-1290
PLEASE SEND CERTIFIED OR REGISTERED MAIL to:
SOURCEFILE: SOURCEFILE
1350 West Grand Ave.
Oakland, CA 94607
Attn: Client Services
Phone: 510.419.3888
Fax: 510.419.3875
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<PAGE> 35
EXHIBIT "C"
SCHEDULE OF BENEFICIARIES OF THE SOFTWARE
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<PAGE> 36
EXHIBIT "D"
SCHEDULE OF NOTICES
DEPOSITOR
Depositor deposit notices should be sent to: Name: Kathy Gelin
Title: Corporate Controller
Address: 2225 East Bayshore Road,
Suite 100
Palo Alto, CA 94303
Phone: (415) 496-3112
Fax: (415) 493-1290
Depositor invoices notices should be sent to: Name: Kathy Gelin
Title: Corporate Controller
Address: 2225 East Bayshore Road,
Suite 100
Palo Alto, CA 94303
Phone: (415) 496-3112
Fax: (415) 493-1290
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<PAGE> 37
EXHIBIT "E"
SCHEDULE OF NOTICES
BENEFICIARY
Beneficiary deposit notices should be sent to: Name: ___________________________
Title: __________________________
Address: ________________________
________________________
________________________
Phone: __________________________
Fax: ____________________________
Beneficiary invoices notices should be sent to: Name: __________________________
Title: _________________________
Address: _______________________
_______________________
_______________________
Phone: _________________________
Fax: ___________________________
1. Concurrent with the delivery of the OBJECT CODE, as stated in Article ___of
the Agreement, PROVIDER shall deposit in ADVENT Law Department at
____(address)_____, Attention: General Counsel, the then-current copies of
the Escrow Materials. SOURCE CODE shall be provided on media as specified
by ADVENT. At the same time as revisions to the OBJECT CODE, (including any
IMPROVEMENTS, CORRECTIONS, ENHANCEMENTS, UPGRADES, and UPDATES which
PROVIDER is required to incorporate in the [Software] are delivered by
PROVIDER, PROVIDER shall deliver to ADVENT the revised Escrow Materials. If
necessary, ADVENT shall give PROVIDER access to the Escrow Materials
previously deposited for the purpose of updating such Escrow Materials.
2. ADVENT shall protect the Escrow Materials to the same extent as it does its
own confidential information of a similar nature and shall not use or
examine such materials, except to verify the accuracy, completeness and
sufficiency of a deposit and except as provided in Article (the Escrow
Account Article), Paragraphs B and C.
3. ADVENT shall have the right to have PROVIDER demonstrate to ADVENT, within
the applicable operating environment, for the initial deposit of Escrow
Materials and, thereafter, not more frequently than once a year at either
ADVENT's cognizant place of business or at another site chosen by mutual
agreement, that the Escrow Materials comprise the then current Software and
[DOCUMENTATION/its related documentation]. Each party shall be responsible
for its own costs associated with this demonstration, except that ADVENT
will reimburse PROVIDER travel and living expenses, as provided in
Attachment C, related to this demonstration if held at an ADVENT site. In
order to have such demonstration, ADVENT shall give written notice to
PROVIDER specifying a date for the demonstration, which shall be no sooner
than thirty (30) days after the date of receipt of the written notice. If
PROVIDER cannot demonstrate to ADVENT that the Escrow Materials are
current, PROVIDER shall immediately update the Escrow Materials to make
them current.
4. ADVENT will inform PROVIDER of any change in the location and person
responsible for holding the Escrow Materials.
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<PAGE> 38
5. ADVENT or PROVIDER may request the joint inspection of the Escrow Materials
at ADVENT's site, with reasonable notice, to review the Escrow Materials
for accuracy, completeness and currentness. In the event such review
reveals a deficiency in the Escrow Materials, PROVIDER shall promptly
provide revisions to the Escrow Materials to correct such deficiency.
ADVENT will return obsolete versions of the Escrow Materials to PROVIDER
when no longer required for the purposes of this Agreement.
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<PAGE> 1
EXHIBIT 10.18
[SAGENT TECHNOLOGY, INC. LOGO]
SAGENT TECHNOLOGY, INC.
SOFTWARE LICENSE AGREEMENT
END USER
AGREEMENT by and between Sagent Technology, Inc. ("Sagent") located at 2225 E.
Bayshore Rd., Suite 100, Palo Alto, California 94303,
and_______________________________ including its subsidiaries and affiliates
(the "Licensee").
1. LICENSE
In accordance with the terms herein, Sagent grants to Licensee, and Licensee
accepts from Sagent, a perpetual non-exclusive and non-transferable license to
use the current object code version of Sagent's Software. Licensee may install
the Software for the number specified in the description of the Software
attached as Exhibit A.
Licensee's use is restricted so that Licensee may not:
(a) Sublicense, sell, lease, or rent the Software;
(b) Decompile, disassemble, reverse engineer the Software;
(c) Create a derivative work of the Software;
(d) Use the software by more than the number of concurrent users that have been
licensed; or
(e) Reveal benchmark tests.
2. COPIES
The license(s) granted herein include(s) the right to copy the Software to use
the Software as specified in Schedule "A" pursuant to this license and for
archival and back-up only. In order to protect Sagent's copyrights in the
Software, Licensee agrees to reproduce and incorporate Sagent's copyright notice
in any copy, modifications or partial copy.
3.
Licensee may physically transfer the Software from (as applicable):
a. one stand alone computer or network node to another stand alone computer
network node; or
b. one server to another server, provided the Software is used on only one
computer, network node or server at a time; or
c. the same number of stand alone computers, network nodes or server to the
same other stand alone network nodes or servers.
4. PRICE AND PAYMENT
Licensee shall make payment to Sagent for the Software license pursuant to the
fees and payment terms set forth in Exhibit A.
5. SOFTWARE OWNERSHIP
Sagent represents that it has all rights required to licensee the Software and
all portions thereof and to grant Licensee the license.
6. OTHER SERVICES
Sagent may provide Licensee with consulting services, software maintenance, and
technical support through separate agreements.
7. TITLE TO SOFTWARE SYSTEMS
The Software and all copies thereof are proprietary to Sagent and title thereto
remains with Sagent. All applicable rights to patents, copyrights, trademarks
and trade secrets in the Software or any modifications or derivative works
belong to and shall remain in Sagent. Licensee shall not sell, transfer,
publish, or otherwise make available the Software or copies thereof to others.
Licensee agrees to secure and protect each module, software product,
documentation and copies thereof in a manner
Sagent Technology, Inc.
Software License Agreement
End User
Page 1
<PAGE> 2
consistent with the maintenance of Sagent's rights therein and to take
appropriate action by instruction or agreement with its employees or consultants
who are permitted access to each program or software product to satisfy its
obligations hereunder. All copies made by the Licensee of the Software and other
programs developed hereunder, including translations, compilations, partial
copies with modifications and updated works, are the property of Sagent.
Violation of any provision of this paragraph shall be the basis for immediate
termination of this License Agreement.
8. CONFIDENTIALITY
Each party agrees to afford the other party's Proprietary Information the same
degree of protection against unauthorized use or disclosure as each party
normally provides for its Proprietary Information, provided that each party's
obligation shall not apply to information which:
i) Is known to the receiving party at the time of disclosure by the
disclosing party;
ii) Is now or hereafter in the public domain through no fault of the
receiving party;
iii) Is developed independently by the receiving party; and
iv) Is generally known or available from third parties without
restriction; and
The term "Proprietary Information" means documented information or software
which at the time of its disclosure to the receiving party is identified as
Proprietary by an appropriate stamp or legend.
9. WARRANTY
(a) Sagent warrants that Software will conform, as to all substantial
operational features, to Sagent's current published specifications when
installed and will be free of defects which substantially affect system
performance.
(b) The Licensee must notify Sagent in writing, within ninety (90) days of
delivery of the Software to the Licensee (not including delivery of any
subsequent modifications to the Software), of its claim of any such
defect. If the Software is found defective by Sagent, Sagent's sole
obligation under this warranty is to use reasonable commercial efforts to
attempt to correct or work around errors, replace defective media or
replace the Software with functionally equivalent Software.
(c) Sagent warrants that the Software shall not cause erroneous date
calculations due to miscalculations by the Software as a result of the
year 2000 date change. Sagent further warrants that the Software includes
the ability to manage and manipulate all data involving dates or date
fields which include indication of century to ensure year 2000
compatibility.
(d) THE ABOVE IS A LIMITED WARRANTY AND IT IS THE ONLY WARRANTY MADE BY
SAGENT. SAGENT MAKES AND LICENSEE RECEIVES NO WARRANTY, EXPRESS OR
IMPLIED, AND THERE ARE EXPRESSLY EXCLUDED ALL WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SAGENT SHALL HAVE
NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR
CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE STATED EXPRESS WARRANTY
IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF SAGENT FOR DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE, OR PERFORMANCE OF
THE SOFTWARE SYSTEMS.
(e) If any modifications are made to the Software by Licensee during the
warranty period, this warranty shall immediately be terminated.
Correction for difficulties or defects traceable to Licensee's errors or
systems changes shall be billed at Sagent's standard time and material
charges.
(f) Licensee agrees that Sagent's liability arising out of contract,
negligence, strict liability in tort or warranty shall not exceed any
amounts payable by Licensee for the Software identified above.
10. INDEMNITY
Sagent, at its own expense, will defend any action
Sagent Technology, Inc.
Software License Agreement
End User
Page 2
<PAGE> 3
brought against Licensee to the extent that it is based on a claim that any
software system used within the scope of this License Agreement infringes any
U.S. patents, copyrights, license or other property right, provided that Sagent
is immediately notified in writing of such claim. Sagent shall have the right to
control the defense of all such claims, lawsuits and other proceedings. In no
event shall Licensee settle any such claim, lawsuit or proceeding without
Sagent's prior written approval.
If, as a result of any claim of infringement against any patent, copyright,
license or other property right, Sagent is enjoined from using the Software, or
if Sagent believes that the Software is likely to become the subject of a claim
of infringement, Sagent at its option and expense may procure the right for
Licensee to continue to use the Software, or replace or modify the Software so
as to make it non-infringing. If neither of these two options is reasonably
practicable Sagent may discontinue the license granted herein on one month's
written notice and refund to Licensee the unamortized portion of the license
fees hereunder (based on four years straight line depreciation, such
depreciation to commence on the date of this Agreement). The foregoing states
the entire liability of Sagent with respect to infringement of any copyrights or
patents by the Software or any parts thereof.
11. TERMINATION
Sagent shall have the right to terminate this agreement and license(s) granted
herein:
(a) Upon ten days' written notice in the event that Licensee, its officers or
employees violates any provision of this License Agreement including, but
not limited to, confidentiality and payment.
(b) In the event of termination by reason of the Licensee's failure to comply
with any part of this agreement, or upon any act which shall give rise to
Sagent's right to terminate, Sagent shall have the right, at any time, to
terminate the license(s) and take immediate possession of the Software
and documentation and all copies wherever located. Within five (5) days
after termination of the license(s), Licensee will return to Sagent the
Software in the form provided by Sagent or as modified by the Licensee,
or upon request by Sagent to destroy the Software and all copies, and
certify in writing that they have been destroyed. Termination under this
paragraph shall not relieve Licensee of its obligations regarding
confidentiality of the Software.
(c) Without limiting any of the above provisions, in the event of termination
as a result of the Licensee's failure to comply with any of its
obligations under this License Agreement, the Licensee shall continue to
be obligated for any payments due. Termination of the license shall be in
addition to and not in lieu of any equitable remedies available to
Sagent.
(d) Licensee may terminate this agreement at any time provided payment in
full has been made and Licensee returns the original and all copies of
Software to Sagent.
12. TAXES
Licensee shall, in addition to the other amounts payable under this License
Agreement, pay all sales and other taxes, federal, state, or otherwise, however
designated, which are levied or imposed by reason of the transactions
contemplated by this License Agreement. Without limiting the foregoing, Licensee
shall promptly pay to Sagent an amount equal to any such items actually paid, or
required to be collected or paid by Sagent.
13. GENERAL
(a) Each party acknowledges that it has read this Agreement, it understands
it, and agrees to be bound by its terms, and further agrees that this is
the complete and exclusive statement of the Agreement between the
parties, which supersedes and merges all prior proposals, understandings
and all other agreements, oral and written, between the parties relating
to this Agreement. This Agreement may not be modified or altered except
by written instrument duly executed by both parties.
(b) Dates or times by which Sagent is required to make performance under this
license shall be postponed automatically to the extent that Sagent is
prevented from meeting them by causes beyond its reasonable control.
(c) This Agreement and performance hereunder shall be governed by the laws of
the State of
Sagent Technology, Inc.
Software License Agreement
End User
Page 3
<PAGE> 4
California. Venue shall be in Santa Clara County,
California.
(d) No action, regardless of form, arising out of this Agreement may be
brought by Licensee more than two years after the cause of action has
arisen.
(e) If any provision of this Agreement is invalid under any applicable
statute or rule of law, it is to that extent, deemed to be omitted.
(f) The Licensee may not assign or sub-license, without the prior written
consent of Sagent, its rights, duties or obligations under this Agreement
to any person or entity, in whole or in part. A sale of substantially all
of Licensee's assets to a third party or any transfer of more than 50% of
the voting stock of Licensee to a third party shall not constitute an
assignment under this license.
(g) The prevailing party in any action related to this agreement shall have
the right to recover its reasonable expenses including attorney's fees.
(h) The waiver or failure of Sagent to exercise, in any respect, any right
provided for herein shall not be deemed a waiver of any further right
hereunder.
SAGENT TECHNOLOGY, INC.: LICENSEE:
Name:__________________________ Name:___________________________
(Print) (Print)
Address:_______________________ Address:________________________
Signature:_____________________ Signature:______________________
Title:_________________________ Title:__________________________
Date:__________________________ Date:___________________________
Sagent Technology, Inc.
Software License Agreement
End User
Page 4
<PAGE> 5
EXHIBIT A
1. SOFTWARE
Software means the following programs in object code and related online
documentation:
1.
The number of users permitted to use the Software under this license is
______.
2.
The number of users permitted to use the Software under this license is
______.
3.
The number of users permitted to use the Software under this license is
______.
2. LICENSE FEE
Licensee will be billed upon signing a fee of U.S. $_____________ payable
net 30.
Sagent Technology, Inc.
Software License Agreement
End User
Page 5
<PAGE> 6
DESCRIPTIONS TO BE USED
IN EXHIBIT "A"
<TABLE>
<CAPTION>
Quantity Description Amount
<S> <C> <C>
SAGENT DATA LOAD SERVER
The Sagent Data Load Server performs processing for the
extraction, transformation and loading of data into data
marts. It is a high performance application server that has
been designed from the ground up to exploit 32-bit,
multi-threaded computing.
SAGENT DATA ACCESS SERVER
The Sagent Data Access Server performs processing for the
delivery of information to users, whether they are accessing
data via the Web or in a client/server environment. It is a
high performance application server that has been designed
from the ground up to exploit 32-bit, multi-threaded
computing.
SAGENT WEBLINK
Sagent WebLink is a server-based application for giving Web
users query, analysis and reporting capabilities.
SAGENT ADMIN
Sagent Admin is a client application that provides
administrators the ability to manage user security and
metadata.
SAGENT DESIGN STUDIO
Sagent Design Studio is a client application that provides
intuitive and powerful visual tools for defining metadata and
data flow plans.
SAGENT AUTOMATION SERVER
Sagent Automation Server is a server-based application that
performs powerful event-driven scheduler for automating and
troubleshooting tasks.
SAGENT AUTOMATION STUDIO
Sagent Automation Studio is a client application for defining
automation flows that will be executed by Sagent Automation
Server.
SAGENT STATISTICAL CALCULATOR
The Sagent Statistical Calculator provides server-based
analytical computing to deliver a wide range of statistical
functions that apply advanced manipulations to data. The
Sagent Statistical Calculator makes it easy to create powerful
expressions that refine data, whether it is for loading data
marts or delivering information to end users.
SAGENT INFORMATION STUDIO
Sagent Information Studio is a client application that
provides an intuitive environment for end users to access and
share data.
</TABLE>
Sagent Technology, Inc.
Software License Agreement
End User
Page 6
<PAGE> 7
DESCRIPTIONS TO BE USED
IN EXHIBIT "A"
(CONTINUED)
<TABLE>
<CAPTION>
Quantity Description Amount
<S> <C> <C>
SAGENT ANALYSIS
Sagent Analysis is an Information Studio module that enables
users to perform multi-dimensional analysis of data.
SAGENT REPORTS
Sagent Reports is an Information Studio module that enables
users to develop sophisticated reports that includes
information stored in data marts.
STATVIEW FOR SAGENT
StatView for Sagent is a client application that provides a
simple, flexible, and powerful interface for performing
complex statistical analyses on corporate data stored in data
marts or data warehouses.
CRYSTAL REPORTS
Crystal Reports is a popular client application that enables
users to develop reports.
</TABLE>
Sagent Technology, Inc.
Software License Agreement
End User
Page 7
<PAGE> 1
EXHIBIT 10.19
OEM SOFTWARE LICENSE AGREEMENT
THIS OEM SOFTWARE LICENSE AGREEMENT (the "Agreement") is between SIEBEL SYSTEMS,
INC., a Delaware corporation with its principal place of business at 1855 South
Grant Street, San Mateo, CA 94402 ("Siebel") and SAGENT TECHNOLOGY, INC., with
its principal place of business at 2225 E. Bayshore Road, Suite 100, Palo Alto,
CA 94303 ("Sagent").
WHEREAS, Siebel is engaged in the business of developing and marketing
client/server application software:
WHEREAS, Sagent has developed software and technology that enables the
development of and access to data marts; and
WHEREAS, Sagent wishes to license such software and technology to Siebel to be
incorporated into Siebel Programs (as defined below) and distributed by Siebel.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
1. DEFINITIONS.
1.1 "AFFILIATES" of a party shall mean (i) any corporation, company or other
entity more than fifty percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or managing
authority) are owned, directly or indirectly (beneficially or of record) or
controlled by such party, and (ii) authorized resellers and distributors of such
party's products.
1.2 "DELIVERABLES" shall mean the materials described in EXHIBIT B. The
Deliverables shall be considered Licensed Materials under this Agreement.
1.3 "DEVELOPMENT SOFTWARE" shall mean any and all software programs available
from Sagent, the current versions of which are set forth in EXHIBIT A, that
facilitate or relate to the development of (1) software programs incorporating
the Licensed Materials, (2) interfaces between the Licensed Materials and other
software programs, or (3) modifications to the Licensed Materials, as well as
Updates to such programs.
1.4 "DOCUMENTATION" shall mean any and all documentation (to be provided in
both electronic and hardcopy form) that pertains to the Licensed Materials.
1.5 "END USERS" shall mean those parties to whom Siebel directly or
indirectly markets and distributes the Siebel Programs.
1.6 "LICENSED MATERIALS" shall mean (1) the object code version of the
software marketed by Sagent, as set forth in EXHIBIT A, (2) Documentation, (3)
on-line help, (4) Updates, (5) Deliverables, and (6) Training Materials, if
Siebel elects to license them under Section 2 of EXHIBIT D.
1.7 "SIEBEL PROGRAM(S)" shall mean the software program(s), now existing or
later developed or acquired, that are or shall be directly or indirectly
marketed and distributed by Siebel to its End Users, including but not limited
to the Siebel Enterprise Applications and any product that Siebel licenses as a
separate program module, as modified by Siebel from time to time. The Siebel
Programs that Siebel distributes under Section 3.1 shall incorporate the
Licensed Materials as an embedded component unless otherwise expressly
authorized by this Agreement.
1.8 "TRAINING MATERIALS" shall mean all training materials that pertain to
the Licensed Materials, including both technical training materials and end user
training materials.
1.9 "UPDATE" shall mean a subsequent release of the Licensed Materials that
is made generally available at no additional charge to Sagent's customers
receiving maintenance services from Sagent.
<PAGE> 2
Updates shall include (but not be limited to) all error corrections, bug fixes,
enhancements, and future and additional versions of the Licensed Materials,
including both (i) new point releases denoted by a change to the right of the
first decimal point (e.g., v3.0 to 3.1), and (ii) new major version releases
denoted by a change to the left of the first decimal point (e.g., v3.0 to 4.0)
so long as Siebel is current on maintenance fee obligations as set forth in
EXHIBIT D.
2. DELIVERY AND ACCEPTANCE OF LICENSED MATERIALS AND DELIVERABLES.
2.1 INITIAL DELIVERY OF LICENSED MATERIALS. Upon execution of this Agreement,
Sagent shall provide Siebel with a master electronic copy of the Licensed
Materials set forth in EXHIBIT A and related Documentation and on-line help.
2.2 SAGENT DELIVERABLES. Sagent shall provide Siebel with an electronic copy
of the Deliverables according to the schedule set forth in EXHIBIT B as well as
related Documentation and on-line help. Siebel shall have thirty (30) days from
the first date of delivery of the Deliverables (the "Acceptance Period") to
evaluate the Deliverables. If, during the Acceptance Period, any Deliverables
fail to conform to the description in EXHIBIT B or any subsequent specifications
or requirements agreed upon in writing by the parties, then Siebel has the right
to reject such Deliverables and, upon return of the Licensed Materials to
Sagent, shall have no obligation to Sagent to pay any Royalty Pre-Payment
associated with the Deliverables as set forth in Section 2(C)(2) of EXHIBIT C.
If Siebel does not notify Sagent in writing of its acceptance of the
Deliverables during the Acceptance Period, the Deliverables delivered to Siebel
are deemed accepted. Notwithstanding the foregoing, the warranties and remedies
set forth in Section 7 shall have full force and effect both during and after
the Acceptance Period.
3. LICENSE GRANTS.
3.1 OBJECT CODE LICENSE. Sagent hereby grants to Siebel and its Affiliates a
worldwide, nonexclusive, perpetual license to (a) incorporate the object code
version of the Licensed Materials in the Siebel Programs, (b) reproduce and
distribute, without restriction, the Licensed Materials as incorporated into the
Siebel Programs, (c) modify and enhance the Licensed Materials as incorporated
into the Siebel programs, and (d) reproduce and distribute any such
modifications or enhancements. In addition, Sagent grants to Siebel the right to
reproduce and distribute the Licensed Materials separately from the Siebel
Programs provided that (1) the End User to which Siebel distributes such
Licensed Materials already has a valid license to use the Siebel Programs as of
the date that Siebel distributes such Licensed Materials and (2) the resulting
solution includes the Licensed Materials as an embedded component of the Siebel
Programs. The foregoing rights may be sublicensed through multiple tiers of
distribution, including resellers, provided each reseller or other distributor
is contractually required to abide by the requirements of this Section 3. Siebel
shall ensure that any Siebel Programs incorporating the Licensed Materials shall
be governed by a license agreement which is at least as protective of Sagent's
proprietary rights in the Licensed Materials as of Siebel's proprietary rights
in the Siebel Programs, including rights and restrictions related to End User's
right to make backup and archival copies.
3.2 DEVELOPMENT LICENSE. Sagent hereby grants to Siebel and its Affiliates a
worldwide, perpetual, royalty-free, non-exclusive license to use and reproduce
the Development Software for the development of Siebel Programs.
3.3 LIMITED SOURCE CODE LICENSE. Sagent shall escrow the fully documented
source code version of the Licensed Materials pursuant to the terms and
conditions set forth in EXHIBIT F.
3.4 INTERNAL LICENSE. Sagent hereby grants to Siebel and its Affiliates a
nonexclusive, royalty-free, nontransferable (except as provided in Section
11.6), worldwide license to reproduce and use the Licensed Materials in support
of the activities contemplated by this Agreement (including but not limited to
training, external demonstrations to potential customers and technical support).
3.5 REPRODUCTION OF THE LICENSED MATERIALS. Siebel may, at its option,
reproduce the Licensed Materials from the master disk provided by Sagent, or
distribute the Licensed Materials the original
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<PAGE> 3
packaging as provided by Sagent provided that Siebel pays Sagent's reasonable
internal costs of copying and packaging.
4. PAYMENTS.
4.1 PAYMENTS TO SAGENT. In consideration of the licenses granted for the
Licensed Materials in Section 3, Siebel shall make the payments to Sagent as set
forth in EXHIBIT C.
4.2 TAXES. Siebel shall pay any sales, use, property, license, value added,
withholding, excise or similar tax, whether federal, state or local, that may be
imposed upon or with respect to the delivery by Sagent of the Licensed
Materials, as well as any costs, penalties or interest associated with the
collection or withholding thereof.
5. TRAINING, SUPPORT AND MAINTENANCE.
5.1 TRAINING. Sagent shall provide consultation and training concerning the
use, operation and functionality of the Licensed Materials to Siebel as further
described in EXHIBIT D. Such consultation and training shall be sufficient to
allow Siebel to assume responsibility for maintenance and support of the
Licensed Materials as incorporated into Siebel Programs.
5.2 SAGENT MAINTENANCE OBLIGATIONS. Sagent agrees to provide Siebel with
support and maintenance, error corrections, bug fixes, enhancements, Updates,
and future and additional versions of Licensed Materials as further described in
EXHIBIT D (Sagent Training, Support and Maintenance Obligations").
5.3 TECHNICAL SUPPORT. Siebel shall be responsible for first-level technical
support of its End Users; provided, however, that Sagent shall provide Siebel
with second- and third-level technical support by telephone, internet access,
and e-mail, as further described in EXHIBIT D ("Sagent Training, Support and
Maintenance Obligations"). Sagent's support obligations shall continue as long
as Siebel's payments required under this Agreement have been made with respect
to such obligations.
5.4 SAGENT CONSULTING AND TECHNICAL ACCOUNT MANAGEMENT SERVICES. Sagent
agrees to provide Siebel consulting and Technical Account Management Services,
at Siebel's request, as further described in EXHIBIT E ("Sagent Consulting and
Technical Account Management Services").
6. CONFIDENTIALITY AGREEMENT.
6.1 CONFIDENTIAL INFORMATION.
A. By virtue of this Agreement, the parties may have access to
information that is confidential to one another ("confidential information").
All Confidential Information disclosed pursuant to this Agreement shall be
governed by the terms of the Mutual Non-Disclosure Agreement between Siebel and
Sagent dated August 22, 1997 (the "Mutual Non-Disclosure Agreement").
B. Sagent acknowledges and agrees that: (i) Siebel and its suppliers
retain all rights, title and interest in and to the Siebel Programs and Sagent
acknowledges and agrees that it does not acquire any rights, express or implied,
therein and (ii) if at any time Sagent suggests any new features, functionality,
or performance that Siebel subsequently incorporates into the Siebel Programs,
such new features, functionality, or performance shall be the sole and exclusive
property of Siebel and shall be free from any confidentiality restrictions that
might otherwise be imposed upon Siebel pursuant to the Mutual Non-Disclosure
Agreement.
C. Except as permitted under local law, Siebel shall not reverse
compile, reverse engineer, disassemble, copy or in any way duplicate the
Licensed Materials, in whole or in part, except as expressly authorized by this
Agreement or by prior written consent of Sagent.
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<PAGE> 4
6.2 INJUNCTIVE RELIEF. In the event of a breach of any of the provisions of
Section 6.1, each party agrees that the other party will not have an adequate
remedy at law, and accordingly each party agrees that the other party, in
addition to any other available legal or equitable remedies, is entitled to seek
injunctive relief against such breach without any requirement to post bond as a
condition of such relief.
7. WARRANTY.
7.1 EXPRESS WARRANTIES.
A. WARRANTY FOR LICENSED MATERIALS AND DEVELOPMENT SOFTWARE. Sagent
represents and warrants that all Licensed Materials and Development
Software (1) will conform to the Documentation and to the description in
EXHIBIT A and (2) will function on the machines and with the operating
systems, database management systems, and other platforms for which they
have been designed, as set forth in the Documentation or in EXHIBIT A.
B. WARRANTY FOR DOCUMENTATION. Sagent represents and warrants that (1) the
Documentation provided to Siebel under this Agreement shall be complete
and correct and sufficient for a person with relevant technical training
to use, install, configure, and develop interfaces to the Licensed
Materials.
C. WARRANTY FOR SERVICES. Sagent represents and warrants that any services
performed by Sagent pursuant to this Agreement, including Maintenance and
Support Services, shall be performed according to their description and
in a professional and workmanlike manner by employees of Sagent having a
level of skill commensurate with the requirements of this Agreement.
D. OWNERSHIP AND AUTHORITY. Sagent represents and warrants, with respect to
all materials provided by Sagent, that (1) Sagent is the sole owner or
the authorized licensee of the Licensed Materials; (2) Sagent has full
and sufficient right to assign or grant the rights or licenses granted to
Siebel herein; (3) the Licensed Materials have not been published under
circumstances that have caused a loss of copyright therein; and (4) the
Licensed Materials do not infringe any patent, copyright, trademarks or
other intellectual property rights (including trade secrets), privacy,
publicity, or similar rights of any third party, nor has any claim of
such infringement been threatened or asserted, and no such claim is
pending against Sagent, or, to the best of Sagent's knowledge, against
any entity from which Sagent has obtained such rights.
E. NO CONFLICT. Sagent represents and warrants that Sagent has not
previously or otherwise granted nor will in the future grant any rights
to any third party which conflict with the rights herein granted by
Sagent.
F. YEAR 2000 WARRANTY. Sagent represents and warrants that the Licensed
Materials will process, record, store, and present data containing
four-digit years in the same manner and with the same functionality as
before January 1, 2000. Sagent will not be in breach of this warranty for
any failure of the Licensed Materials to correctly create or process
date-related data if such failure results from the inability of any
software, hardware, or systems of Siebel or any third party (including
any underlying database engines, operating systems, and related drivers)
either to correctly create or process date-related data or to create or
process such date-related data in a manner consistent with the method in
which the Programs create or process date-related data.
G. ANTI-VIRUS WARRANTY. Sagent represents and warrants that (1) the Licensed
Materials shall not contain any code, programming instruction or set of
instructions that is intentionally constructed with the ability to
damage, interfere with or otherwise adversely affect computer programs,
data files, or hardware without the consent and intent of the computer
user and (2) the Licensed Materials do not contain any virus or computer
software code, routines or hardware components (other than as set forth
in the Documentation) designed to disable, damage, impair, or erase the
Licensed Materials or other software or data.
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<PAGE> 5
7.2 EXCLUSION OF IMPLIED WARRANTIES. THE WARRANTIES IN SECTION 7.1 ARE
EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES. EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE OR USE.
7.3 LIMITATION OF LIABILITY.
A. EXCEPT FOR CLAIMS ARISING PURSUANT TO SECTION 6 OR SECTION 8,
NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF ANTICIPATED PROFITS OR BENEFITS,
LOSS RESULTING FROM THE USE OF THE LICENSED MATERIALS OR ARISING OUT OF ANY
BREACH OF ANY WARRANTY.
B. EXCEPT FOR DAMAGES DUE TO A BREACH OF EITHER PARTY'S OBLIGATIONS
UNDER SECTION 6 OR FOR SAGENT'S OBLIGATIONS UNDER SECTION 8, EACH PARTY'S
AGGREGATE LIABILITY TO THE OTHER PARTY FOR ALL LOSS AND DAMAGE WHETHER IN
NEGLIGENCE, CONTRACT OR OTHERWISE, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT SHALL IN ANY EVENT BE LIMITED TO THE SUM OF THE MONIES PAID TO SAGENT
BY SIEBEL UNDER THIS AGREEMENT.
C. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR DAMAGES CAUSED BY THE
FAILURE OF THE OTHER PARTY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT OR
FOR ANY DAMAGES ARISING FROM REPRESENTATIONS AND COMMITMENTS MADE BY SIEBEL TO
ITS CUSTOMERS OR OTHER THIRD PARTIES WHICH ARE INCONSISTENT WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT.
8. INDEMNIFICATION.
8.1 SCOPE OF INDEMNIFICATION. Sagent hereby agrees to defend,
indemnify, and hold harmless Siebel from any loss, liability, claim, or damage
related to Sagent's breach of its obligations hereunder. If a claim arises that
the Licensed Materials infringe the intellectual property rights of a third
party, or if in Sagent's judgment, such a claim is likely to arise, Siebel
agrees to allow Sagent, at Sagent's option, to procure the right for Siebel to
continue to exercise its rights and licenses granted herein, or to replace or
modify them in a functionally equivalent manner so they become noninfringing. If
neither of the foregoing alternatives is available on terms that are reasonable
in Sagent's judgment, Siebel, upon written request by Sagent, shall return the
Licensed Materials then in Siebel's possession to Sagent and shall receive
reimbursement of all the amounts paid to Sagent under this agreement. The
foregoing remedial actions, however, shall not relieve Sagent of its indemnity
obligations with respect to any loss, liability, or damage that may be incurred
with respect to existing Siebel Products.
8.2 LIMITATIONS. Sagent shall have no obligation under this Section 8
with respect to any claim of infringement of copyrights, trade secret, or other
intellectual proprietary right based upon Siebel's modification of the Licensed
Materials, if such infringement would have been avoided by the absence of such
modifications.
9. TERM AND TERMINATION.
9.1 TERM. This Agreement shall continue in force for three (3) years from the
date of signature unless terminated pursuant to Section 9.2 ("Termination")
below. After the initial three (3)-year term, Siebel shall have the option of
renewing this Agreement upon the same terms as set forth herein except as
expressly set forth in Section 2(A) of EXHIBIT C.
9.2 TERMINATION. Either party may terminate this Agreement upon sixty (60)
days' written notice of a material breach by the other party if such breach is
not cured within such sixty (60) day period; provided, however, that there shall
be no cure period for breach of the provisions of Section 6. This Agreement may
also be terminated by the mutual written consent of the parties.
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<PAGE> 6
9.3 RIGHTS UPON TERMINATION. If this Agreement is terminated, the license to
distribute and sublicense the Licensed Materials granted hereunder shall
terminate; provided, however, that any licenses of the Siebel Programs
incorporating the Licensed Materials granted by Siebel, its Affiliates,
resellers or other distributors prior to such termination shall not be affected
and shall continue in full force and effect.
Notwithstanding any provisions herein to the contrary, following any termination
of this Agreement and for so long thereafter as is necessary for Siebel to
satisfy, and solely to satisfy, its then existing contractual obligations to its
End Users. Siebel shall be entitled to exercise the licenses granted under
Section 3 solely for such purposes. If at the time of termination Siebel has
made any Royalty Pre-Payments in excess of the accrued Royalty Payments, Siebel
shall be entitled to continue to distribute the Licensed Materials under this
Agreement until the accrued Royalty Payments equal the total
Royalty-Pre-Payments. In addition, for a period of four (4) months following
termination, Siebel shall have the option of continuing to distribute the
Licensed Materials under this Agreement and will pay any applicable royalties.
Sagent shall not be required to provide any Updates, maintenance, or support
after termination unless Siebel has already made payment for such Updates,
maintenance and support.
10. MARKETING.
10.1 DOCUMENTATION. Sagent hereby grants Siebel the right to visually display
the Sagent company name and the Sagent product names and trademarks in the
hardcopy documentation for the Siebel Programs incorporating the Licensed
Materials and in advertising and promotional materials. Sagent hereby grants to
Siebel the right to use its trademarks for such purposes with Sagent's approval,
such approval not to be unreasonably withheld.
10.2 JOINT MARKETING PLAN. Sagent and Siebel agree to use their commercially
reasonable efforts to formulate a joint marketing plan which will, among other
things, address the mutual sharing of leads subject to confidentiality
restrictions and prior customer approval. Such joint marketing plan shall be
treated as Confidential Information under Section 6.1. With Siebel's approval,
and provided that Sagent maintains its membership and certification under
Siebel's Alliance Partner Program, Sagent shall place Siebel's name on its web
site in its list of Sagent Partnerships.
11. MISCELLANEOUS.
11.1 GOVERNING LAW. This Agreement and all matters arising out of or relating
to this Agreement shall be governed by the laws of the State of California,
excluding its conflict of law provisions. The parties agree to submit to the
jurisdiction of, and agree that venue is proper in, these courts in any such
legal action or proceeding.
11.2 NOTICES. All notices, authorizations, consents, or other communications
required or permitted to be given hereunder shall be made in writing and shall
be deemed effective when delivered as follows:
Siebel: Sagent:
Siebel Systems, Inc. Sagent Technology, Inc.
1855 South Grant Street 2225 E. Bayshore Road, Suite 100
San Mateo, CA 94402 Palo Alto, CA 94303
Telephone: (650) 295-5000 Telephone: (650) 496-3174
Telefax: (650) 295-5111 Telefax: (650) 493-1290
Attention: VP Product Marketing Attention: Director, OEM Sales
With a copy to VP, Legal Affairs With a copy to: Legal Affairs
Any party hereto may change its address for purposes hereof by so
notifying the other party.
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<PAGE> 7
11.3 SEVERABILITY. In the event any provision of this Agreement is held to be
invalid or unenforceable, the remaining provisions of this Agreement will remain
in full force.
11.4 WAIVER. The waiver by either party of any default or breach of this
Agreement shall not constitute a waiver of any other or subsequent default or
breach.
11.5 NO PARTNERSHIP OR JOINT VENTURE. No agency, employment, partnership,
joint venture, or other joint relationship is created hereby. Siebel and Sagent
are each independent contractors with respect to the other and neither has any
authority to bind the other in any respect whatsoever.
11.6 ASSIGNMENT. Neither party may assign, transfer or delegate this agreement
or any such party's right and obligation hereunder to any third party hereto,
without the consent of the other party, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, each party may assign this Agreement
and such party's rights and obligations hereunder without the consent of the
other party to a subsidiary or Affiliate so long as such party remains primarily
liable for its obligations hereunder. In addition, either party may assign this
Agreement, and its rights and obligations hereunder, to any third party that
acquires substantially all of such party's stock or assets relating to that
portion of such party's business that is related to the subject of this
Agreement. Any attempted assignment, delegation, or transfer in contravention of
this Agreement shall be null and void.
11.7 ENTIRE AGREEMENT. This Agreement, together with the schedules hereto,
constitutes the complete agreement between the parties and supersedes all prior
or contemporaneous agreements or representations, written or oral, concerning
the subject matter of this Agreement and such schedules. This Agreement may not
be modified or amended except in a writing signed by a duly authorized
representative of each party. No other act, document, usage or custom shall be
deemed to amend or modify this Agreement.
11.8 FORCE MAJEURE. Neither party shall be deemed to be in default of or to
have breached any provisions of this Agreement as a result of any delay, failure
in performance, or interruption of service resulting directly or indirectly from
acts of God, acts of civil or military authority, civil disturbance, war,
strikes or other labor disputes, fires, transportation contingencies, laws,
regulations, acts or orders of any government agency or official thereof, other
catastrophes or any other circumstances beyond the party's reasonable control.
11.9 SIEBEL'S FREEDOM OF ACTION. Both parties understand that the other party
may currently or in the future be developing technologies or products
internally, or receiving technologies or products and related information from
other parties that may be similar to Licensed Materials and related products.
The parties agree that nothing in this Agreement shall limit in any way either
party's ability to develop internally technologies or products, or have products
developed for it, that compete with Licensed Materials and related products;
provided that in the course of such development no provisions of this Agreement
and its Exhibits relating to Confidential or Proprietary Information are
breached by such party. Nothing in this Agreement shall be construed to obligate
either party to a specified level of effort in its promotion and marketing of
the Siebel Programs or the Siebel Programs Modules, or to assure that a
specified level of revenues or royalties will result therefrom.
11.10 EXPORT CONTROL. The parties agree that the export of Licensed Materials
is subject to the export control laws of the United States of America and each
party agrees to abide by all such export control laws and regulations, including
without limitation any regulations promulgated by the Department of Commerce (or
its successors) or the Department of Treasury.
11.11 HEADINGS. The section headings appearing in this Agreement are inserted
only as a matter of convenience and in no way define, limit, construe or
describe the scope or intent of any such section nor in any way affect this
Agreement.
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<PAGE> 8
The Effective Date of this Agreement shall be MARCH 31, 1998.
EXECUTED BY SAGENT TECHNOLOGY, INC. EXECUTED BY SIEBEL SYSTEMS, INC.
Signature: /s/ Thomas M. Lounibos Signature: /s/ Kevin A. Johnson
------------------------ ---------------------
Name: Thomas M. Lounibos Name: Kevin A. Johnson
---------------------------- -------------------------
Title: EVP of Sales Title: VP Legal Affairs
--------------------------- ------------------------
Date: March 31, 1998 Date: March 31, 1998
---------------------------- -------------------------
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EXHIBIT A
LICENSED MATERIALS
The Licensed Materials shall consist of the currently available versions of the
Sagent Data Mart Server, Client Software, Administrative Components, and Sagent
Weblink, as well as all Updates of such programs as set forth below.
SAGENT DATA MART SERVER
The Sagent Data Mart Server is an application server that features a
multi-threaded, agent-based architecture for processing information requests and
an open, RDBMS-based repository for storing metadata about both source and
target data stores, Sagent components and administration statistics. The Sagent
Data Mart server supports native access to Microsoft SQL Server, Oracle, Red
Brick, Sybase, and Informix databases, and offers ODBC connections for IBM DB2,
Informix and other databases.
ADMINISTRATIVE COMPONENTS
SAGENT ADMIN
Sagent Admin enables data mart administrators to control a distributed network
of data marts from a single location. It provides a single, integrated view of
all Sagent Data Mart Components. In the Sagent Architecture, the Sagent Data
Mart Server inherits Windows NT server set-up and configuration details, so that
administrators can save time during installation. Sagent Admin also provides the
following functionality: data mart diagnostics, agent control, and security
control.
SAGENT DESIGN STUDIO
Sagent Design Studio provides an intuitive and graphical environment for
developing data flow plans for data warehouse population, metadata creation and
online analysis. This visual environment allows developers to define their data
extract, transformation of data, and data loading. In the same environment users
can perform ad hoc queries, online analysis, and reporting functions.
OLE/DB CLIENT CONNECTIONS
Sagent's OLE/DB interface provides the ability to provide the client tools to
access the Sagent Server via an OLE/DB interface.
SAGENT INFORMATION STUDIO
Provides a graphical interface for easily accessing and sharing information. It
runs on Windows 95 or Windows NT and enables users to build powerful data
requests, store result sets for easy reuse and collaborate with other users.
SAGENT ANALYSIS
An Information Studio plug-in for conducting analysis, including cross
tabulation, slicing, drilling, charting and manipulation of information from
relational data sources.
SAGENT WEBLINK
Provides access to data mart components through popular Internet and intranet
web browsers. It enables uses to run data requests and view result sets quickly
and easily through a browser interface.
DEVELOPMENT SOFTWARE
The Development Software shall consist of the Licensed Materials listed above as
well as Updates to those Licensed Materials.
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EXHIBIT B
SAGENT DELIVERABLES
On or before September 30, 1998, Sagent shall deliver to Siebel the following
Deliverables, which shall be Updates to the Licensed Materials that include the
functionality and/or performance set forth in this EXHIBIT B. These Deliverables
shall be governed by the terms that apply to Licensed Materials under the
Agreement regardless of whether the Deliverables are generally released by
Sagent.
GENERAL REQUIREMENTS. Sagent will deliver Licensed Materials that include the
following functionality and/or performance on or before the Delivery Date set
forth for each requirement. Sagent shall incorporate these General Requirements
into each subsequent Update of the Licensed Materials.
1. CACHING: Sagent will provide functionality that allows
caching of plans on the server and caching of data on the
client so Siebel can take advantage of improving
performance through caching. Sagent cannot currently
support the ability to allow caching to occur on the Server
with parameterized plans, due to the information in the
plans having dynamic parameterization. Sagent and Siebel
will have a technology review by April 24 and discussion to
determine if there is a solution that helps Siebel leverage
Sagent caching. Delivery Date: [*].
2. FOOTPRINT: Sagent will provide functionality that uses
Microsoft's Remote Data Services allowing for the OLE/DB
ADO functionality to run on a server so that the Sagent
client footprint requirements are reduced to less than 2MB.
This implementation will allow for the existing Sagent
Plans to run without change. Delivery Date: [*].
3. INCREMENTAL UPDATE STRATEGY: Sagent will provide
functionality that allows Siebel to design and deliver an
Incremental Update capability for the Siebel Data Mart.
Delivery Date: [*].
4. SAGENT REPOSITORY: In order to provide Siebel programmatic
access to create, change, or delete the relational based
repository elements within the Sagent Repository: (1)
Sagent will conduct an assessment of the effort to provide
an API or OLE Automation interface for this requirement by
[*]; (2) if Sagent finds that the effort is too large to
target a release, then Sagent will provide Siebel the date
for adoption of the Microsoft Repository; and, in any case,
(3) Sagent will provide Siebel with the Sagent Repository
relational table definitions along with the information
necessary that will allow Siebel to create a programmatic
interface. Delivery Date: [*].
5. INTERNATIONAL REQUIREMENTS: Sagent shall deliver the
following international functionality on or before
[*].
A. TRANSLATION OF ERROR MESSAGES: Sagent will provide
the error message strings required by Siebel to localize
the Siebel Programs, including but not limited to Siebel
Marketing Enterprise. These message strings will be
delivered in a Microsoft resource file format, and will
include only the message strings displayed via the Siebel
Marketing Enterprise client. [*].
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<PAGE> 11
[*]
B. OLE/DB CLIENT. By [*], Sagent will confirm that the
Sagent client OLE/DB Client Connection is fully functional
when used with all language-specific versions produced by
Sagent, including but not limited to Sagent's French,
German and Japanese language specific versions of the
Licensed Materials. The OLE/DB Client Connection shall also
support international requirements to the same extent as
the executables included in Sagent's international
versions. If the Sagent OLE/DB Client Connection fails to
support any international Sagent product. Sagent will
provide this support in the 4.0 release of the Licensed
Materials at no additional charge to Siebel.
C. INTERNATIONALIZATION ARCHITECTURE AND FUNCTIONALITY.
Sagent will merge the internationalization architecture and
all international functionality developed for the
international versions of version 3.0 of the Licensed
Materials into the U.S. English version of the Licensed
Materials in Sagent's 4.0 release. [*]
D. DOUBLE BYTE CHARACTER SET AND EXTENDED ASCII
CHARACTERS. Sagent will ensure that all Licensed Materials
and Development Software, including all Updates, support
double byte character sets and extended ASCII characters
and corresponding languages. In addition, the general
features of the Licensed Materials and Development
Software, including all Updates, shall support non-United
States regional specific practices, including but not
limited to number format, date and time format, phone
number format, list format, currency denomination, and
currency format. The Sagent Data Collection Agent must be
able to transmit data to and from the Siebel supported
databases irrespective of number, date and time, phone
number, list format, currency denomination, and currency
format settings.
E. NON-ENGLISH LANGUAGE VERSIONS. Sagent will deliver
all Licensed Materials and Development Software, including
all Updates, in Japanese, German and French language
versions when those non-English language versions are
generally available from Sagent or its Affiliates. Agent
shall make such non-English language versions generally
available within [*].
F. REPOSITORY. Sagent's Repository shall be language
independent, such that, given a Sagent Repository, any
language version of Sagent's tools should interchangeably
be able to create, modify, import and process any Sagent
Plans. For example, Plans developed by Siebel in the US
English version should fully function in the French, German
and Japanese versions of the Licensed Materials.
G. MIXED LANGUAGE ENVIRONMENTS. Sagent must support the
use of all language specific versions of its products in
language environments other than that directly targeted by
a language specific version. For example, the German
version should be supported running in a Spanish
environment, including, but not limited to, running against
a Spanish MS SQL Server RDBMS, using Spanish MS Windows
with Spanish regional settings.
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H. UNICODE STATEMENT OF DIRECTION. Sagent will deliver
a statement of direction to Siebel within [*] days of
execution of the Agreement outlining Sagent's plans and
direction with respect to support of Unicode.
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<PAGE> 13
In addition, Sagent will make best efforts to deliver the following additional
Deliverables to Siebel:
1. DISCONNECTED CLIENT. Sagent will make best efforts
to provide the capability to operate a disconnected
client that processes a subset of Siebel data in the
Siebel Data Mart using SME functionality. The target
laptop RAM size will be 48MB and 4GB HD using a P200
or greater. Estimated Completion Date: [*].
2. SAGENT REPOSITORY. Sagent will make best efforts to
provide the following improvements to help insure
the Stability and Resiliency of the Repository.
These items include:
a) Undo functionality
b) Warning dialog displayed before a user can
delete an object
c) Warning dialog before metaview parts are
moved from one category to another
d) Read only privilege to metaview with the
ability to view Part Properties
e) Metaview parts sorted alphabetically
f) Automatic upgrade process (3 way merge) for
Sagent Repositories
g) Allow users to see one baseview a subset at a
time
Sagent will use best efforts to provide these
functions in Version 5.0 of the Licensed Materials,
to be delivered in [*].
3. OPERATIONAL PROGRAMMATIC CONTROL. Sagent will make
best efforts to enable Siebel to programmatically
control and operate the Siebel Data Mart, including
Scheduling and Executing Plans for Data Extraction
or Analysis. The functionality will also allow
Siebel to access performance data, and logs so that
the system can be dynamically tuned. Sagent will
also allow for the meta data relational information
for Starview to be accessible so Siebel can create
aggregate tables. Estimated Completion Date: [*].
4. QUERY GOVERNING. Sagent will make best efforts to
provide Query Governing that allows a customer to
control the resource utilization of queries by user
or user role. This functionality can be
programmatically controlled, and will work with any
Sagent-supported RDBMS. Estimated Completion Date:
[*].
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<PAGE> 14
EXHIBIT C
PAYMENTS
1. USE OF TERMS. Capitalized terms used in this EXHIBIT C shall have the
same meaning as in the Agreement or in other Exhibits to this Agreement. In
addition, the following terms are defined for purposes of this EXHIBIT C.
A. "ROYALTY PAYMENTS" shall mean the payments that Siebel makes under
Section 2(A) of this EXHIBIT C in consideration for the licenses
granted pursuant to Section 3 of this Agreement, reduced by the
applicable Discount set forth in Section 2(B).
B. "ROYALTY PRE-PAYMENTS" shall mean the payments that Siebel makes
under Section 2(C) of this EXHIBIT C and which shall be treated as
a credit against accrued Royalty Payments.
C. "SERVER SYSTEM" shall mean the hardware platform upon which an End
User installs and uses the Siebel Programs incorporating the Data
Mart Server portion of the Licensed Materials. Siebel may grant
sublicenses to the Licensed Materials to its End Users on a
per-Server basis, on the same terms that Siebel grants licenses to
use the Siebel Programs. The term "Server System" in this EXHIBIT
C shall have the same meaning as the term "server" (or similar
term defining the server hardware on which an End User installs
the Data Mart Server portion of the Licensed Materials) in any
Siebel Software License and Services Agreement between Siebel and
End User.
2. ROYALTY PAYMENTS TO SAGENT. The Royalty Payments under this Agreement
shall be based upon the Price set forth in Section 2(A) below, reduced by the
applicable Discount set forth in Section 2(B) below. The Royalty Payments shall
apply as set forth below for each Server System for which Siebel grants an End
User a license to use the Licensed Materials pursuant to this Agreement. The
obligation to make Royalty Payments shall accrue when Siebel has (1) shipped the
Siebel Programs incorporating the relevant Licensed Materials to an End User and
(2) granted such End User a license to use the Siebel Programs incorporating the
relevant Licensed Materials. Sagent acknowledges that Siebel may ship media
containing the Licensed Materials to third parties that have not licensed the
Siebel Programs incorporating the Licensed Materials and Siebel shall have no
royalty obligations with respect to such shipments. Nothing in this Agreement
shall prevent Siebel from determining, in its discretion, how to license the
Siebel Programs incorporating the Licensed Materials to its End Users, including
but not limited to licensing on a named-user basis or on a per-server basis. If
Siebel chooses to license the Licensed Materials internally, in excess of the
Internal License provided in Section 3.4, Siebel may do so at the Discounts set
forth in Section 2(b) below.
A. PRICE. The applicable Price shall be the lower of the prices for
the packages set forth below ("Packages") or the then-current list
price of the Licensed Materials. Upon renewal of this Agreement
pursuant to Section 9.1 after the initial three (3)-year term, the
Price shall be determined solely by the then-current list price of
the Licensed Materials. At any time, Siebel may add future Sagent
products ("Future Products") to the list of Licensed Materials if
and when Sagent makes future products available. The Price for
Future Products shall be no greater than the then-current list
price for such Future Products.
<TABLE>
<CAPTION>
PACKAGE LIST PRICE PER SERVER SYSTEM
------- ----------------------------
STANDARD: [*]
<S> <C>
o 1 Sagent Data Mart Server (1* Server System)
o Unlimited OLE/DB Client Connections
o Unlimited Sagent Information Studio
o Unlimited Sagent Analysis
o 1 Sagent Admin
</TABLE>
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<PAGE> 15
<TABLE>
<S> <C>
o 2 Sagent Design Studios
WEB-ENABLED: [*]
o 1 Sagent Data Mart Server (1* Server System)
o Unlimited OLE/DB Client Connections
o Unlimited Sagent Information Studio
o Unlimited Sagent Analysis
o 1 Sagent Admin
o 2 Sagent Design Studios
o 1 Sagent Weblink Server
ADDITIONAL OLAP SERVER:
o 1 Sagent Data Mart Server for OLAP [*]
</TABLE>
B. DISCOUNTS. To calculate the applicable Royalty Payment, the Prices
set forth shall be reduced by the applicable discount
("Discount"), based on the cumulative accrued Royalty Payments for
all Licensed Materials under this Agreement including any
renewals. The greater Discount levels shall be available on a
going-forward basis once Siebel has accrued the relevant Royalty
Payment level.
<TABLE>
<CAPTION>
CUMULATIVE ROYALTY PAYMENTS DISCOUNT
---------------------------------------------------------------
<S> <C>
$0-$999,999 [*]%
$1,000,000-$1,999,999 [*]%
$2,000,000+ [*]%
</TABLE>
C. ROYALTY PRE-PAYMENTS. Siebel shall make the following Royalty
Pre-Payments to Sagent based upon Siebel's acceptance of the
Licensed Materials and Deliverables as set forth below.
(1) FOR LICENSED MATERIALS. Sagent shall deliver to Siebel the
Licensed Materials set forth in EXHIBIT A on or before
March 31, 1998. Upon delivery of the Licensed Materials,
Sagent shall invoice Siebel for a non-refundable Royalty
Pre-Payment in the amount of [*].
(2) FOR DELIVERABLES. Sagent shall deliver to Siebel the
Deliverables set forth in EXHIBIT B on or before the dates
set forth therein. If Siebel accepts the Deliverables
pursuant to Section 2.2 of the Agreement, Sagent shall
invoice Siebel for a Royalty Pre-Payment in the amount of
[*]. If Siebel does not accept the Deliverables pursuant to
Section 2.2 of the Agreement, Siebel shall have no
obligation to pay the [*] Royalty Pre-Payment. If and when
Siebel accepts the related Deliverables, the associated
Royalty Pre-Payment shall become nonrefundable.
3. ROYALTY PAYMENTS AND REPORTS.
All Royalty Payments will be paid to Sagent within forty-five (45) days after
the end of each calendar quarter during which Siebel ships the relevant Licensed
Materials to End Users during the term of this Agreement. All Royalty
Pre-Payments will be paid to Sagent within forty-five (45) days of Siebel's
receipt of Sagent's invoice. Each Royalty Payment shall be accompanied by a
report setting forth the number of licenses of the Siebel Programs incorporating
the Licensed Materials granted during such quarter, the amount owed, and the
basis for the calculation. All royalties are payable in U.S. dollars. If, in any
quarter, Siebel's cumulative Royalty Pre-Payments exceed Siebel's cumulative
Royalty Payment obligations, Siebel shall have no payment obligations for that
quarter but shall provide to Sagent a royalty report as set forth above.
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4. AUDIT.
Siebel agrees to maintain complete and accurate records relating to its use (and
any distribution and licensing of the Siebel Programs incorporating the Licensed
Materials) of the Licensed Materials licensed under this Agreement. Sagent shall
have the right, at reasonable times and upon reasonable notice and no more than
annually, to appoint an independent third party auditing firm to audit only
those books and records of Siebel relating to the number of licenses granted
with respect to the Siebel Products incorporating the Licensed Materials for the
preceding one-year period in order to verify the accuracy of any royalty
statement submitted under this Agreement. Alternatively, Siebel may request that
the external auditors of Siebel, as part of Siebel's annual audit, audit and
report to Sagent and Siebel on the accuracy of any such royalty statement
submitted by Siebel under this Agreement.
Unless Sagent provides Siebel with written notice of a request to audit, the
parties agree that Siebel's royalty reports and payments shall be deemed to be
accurate and correct (and not subject to dispute or audit by Sagent) with
respect to any period in excess of one (1) year from the date of receipt of
Siebel's royalty report; provided, however, that a request will only be
effective to toll the running of the one year period if an audit is commenced
within sixty (60) days of Siebel's receipt of such notice. If any such
inspection shall disclose any error of whatever amount, the parties shall by
appropriate payment to the other forthwith adjust the same. The results of such
audit shall disclose only such information as is necessary to determine the
number and type of licenses granted and the royalty payable thereon and shall
not disclose any of Siebel's cost or profit data or any other information to
Sagent.
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EXHIBIT D
SAGENT TRAINING, SUPPORT AND MAINTENANCE OBLIGATIONS
1. DEFINITIONS.
A. "MAINTENANCE" shall mean Sagent's obligations set forth in Section
3 of this EXHIBIT D.
B. "MAINTENANCE AND SUPPORT PERIOD" shall mean a twelve (12)-month
period. The initial Maintenance and Support Period shall begin on
the date of Siebel's acceptance of the initial Licensed Materials.
C. "MAINTENANCE AND SUPPORT" shall mean the maintenance and support
services set forth in this EXHIBIT D. If Sagent increases its
standard maintenance and support services generally available to
its customers or distributors, Sagent shall make such increased
maintenance and support services available to Siebel at the rates
set forth herein.
D. "MAINTENANCE AND SUPPORT FEES" shall mean fees payable in
accordance with Section 5 of this EXHIBIT D.
E. "SUPPORT" shall mean the services set forth in Section 4 of this
EXHIBIT D.
F. "SUPPORTED PROGRAMS" shall mean the Licensed Materials and the
Development Software.
2. TRAINING. Sagent shall provide technical training for 15 Siebel
representatives at Siebel's facility in San Mateo in the complete curriculum for
the Supported Programs at no additional charge to Siebel. At Siebel's request,
Siebel may attend training courses at Sagent's facilities subject to scheduling
and availability of such classes. At Siebel's request, Sagent will provide
Siebel an electronic copy of all Training Materials, as well as all Updates to
such materials during the term of this Agreement. Training Materials shall be
considered Licensed Materials under this Agreement. If Siebel elects to license
the Training Materials, Siebel shall pay Sagent a one-time fee of $[ * ]. In
addition, Siebel may elect to have Sagent trainers give standard Sagent training
at $[ * ] per day for up to sixteen (16) students per class.
3. MAINTENANCE. In consideration of the Maintenance Fees paid in accordance
with this EXHIBIT D, Sagent shall provide Siebel with any and all Updates to the
Supported Programs, promptly as such Updates become available. All Updates shall
include an updated OLE/DB interface that enables the Siebel Programs to
interface with the most updated version of the Licensed Materials. All Updates
shall be provided for no additional charge. Sagent shall provide all Updates
necessitated by new or successor releases of hardware and operating systems
software, including but not limited to all subsequent versions of (1) the
Windows and Windows NT client operating systems, (2) the Windows NT (Intel)
server platform, (3) the Oracle, Sybase, Informix, Microsoft, and IBM DB2 RDBMS
platforms and (4) the Microsoft OLE interface. Sagent shall provide such Updates
within thirty (30) days of the date that the vendor of such hardware and/or
software systems makes such subsequent versions generally available. Any
versions of the Licensed Materials that operate on other operating systems or
server platforms shall be considered Updates under this Agreement. The Royalty
Payments for any Licensed Materials that operate on other operating systems or
server platforms shall not exceed the Royalty Payments set forth in EXHIBIT C
and neither Siebel nor its End Users shall be liable for any fees for
transferring the Licensed Materials to another operating system or server
platform. Sagent shall make pre-release versions of Updates available to Siebel
to permit Siebel to develop and test such Updates prior to the release of the
Siebel Programs incorporating such Updates. Sagent shall also provide Updates
that incorporate all Siebel-Specified Enhancements. For purposes of this
Agreement, "Siebel-Specified Enhancements" shall mean enhancements to the
Licensed Materials that Siebel reasonably requests, provided that Sagent agrees
that such enhancements will maintain or enhance the Licensed Materials'
commercial competitiveness and market position. All Updates shall include
updated Documentation.
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been requested with respect to the omitted portions.
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4. SUPPORT.
A. STANDARD SUPPORT. Sagent shall offer to Siebel the Standard
Support services set forth below ("Standard Support") at no
additional charge. Standard Support shall consist of second level
support services consistent with the following support
obligations:
Sagent shall establish and maintain the organization and processes
to provide Support for the Supported Programs to Siebel. Support
shall include but not be limited to (i) a diagnosis of problems or
performance deficiencies of the Supported Programs and (ii) a
resolution of problems or performance deficiencies of the
Supported Programs. Sagent shall provide Support on a prompt and
timely basis via both (1) toll-free phone support, and (2)
Internet-based support pages that are generally accessible on a
7x24 basis. Sagent agrees to designate at least one (1) Sagent
software engineer who shall, at all times during the term of this
Agreement, be responsible and available to assist Siebel in the
successful integration of the Licensed Materials into the Siebel
Programs. Sagent agrees to inform Siebel in writing at least
quarterly of all known anomalies, including known bugs, that then
exist in the Supported Programs. Siebel may, in its discretion,
notify Sagent of anomalies and bugs that it discovers or of which
it becomes aware. Sagent will use its best efforts to cure, as
described below, reported and reproducible errors in the Supported
Programs so that the Supported Programs operate as specified in
this Agreement. Siebel recognizes four error levels:
SEVERITY 1 - Critical Business Impact. The production use
of the Supported Programs is stopped or so severely
impacted that the Customer cannot reasonably continue work.
Sagent will begin work on the error within one hour of
notification and will engage development staff until an
acceptable work around is achieved.
SEVERITY 2 - Significant Business Impact. Important
features of the Supported Programs are unavailable with no
acceptable workaround. The implementation or production use
of the Supported Programs is continuing but not stopped.
However, there is a serious impact on the Customer's
productivity and/or service levels. Sagent will begin work
on the error within two hours of notification and will
engage development staff until an acceptable work around is
achieved.
SEVERITY 3 - Some Business Impact. Important features of
the Supported Programs are unavailable but a workaround is
available, or less significant features of the Supported
Programs are unavailable with no reasonable workaround.
Customer's work, regardless of the environment or product
usage, has minor loss of operational functionality or
implementation resources. Sagent will begin work on the
error within a day of notification and will engage
development staff.
SEVERITY 4 - Minimal Business Impact. Siebel requests
information, an enhancement, or documentation clarification
regarding the Supported Programs but there is no impact on
the operation of the Supported Programs. The implementation
or production use of the Supported Programs is continuing
and there is no work being impeded at the time. Sagent will
provide an initial response regarding the requested
information or documentation clarification within one week
and will consider enhancements for inclusion in a
subsequent Update.
B. EXTENDED SUPPORT. Sagent shall offer to Siebel the Standard
Support services set forth above on a 7x24 basis ("Extended
Support") at a rate of $[ * ] in addition to the fees for
Standard Support per year or Sagent's discounted preferred partner
rate for Extended Support, whichever is lower. Siebel may elect to
purchase Extended Support, at its option, at any time during the
term of this Agreement.
5. MAINTENANCE AND SUPPORT FEES. Sagent will provide Maintenance as set
forth in Section 3 of this EXHIBIT D to Siebel at Siebel's option at the
annual rate of [ * ] percent ([ * ]%) of the discounted
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Royalty Payments accrued under this Agreement. Sagent shall provide
Support as set forth in Section 4 of this EXHIBIT D at Siebel's option at
the rates set forth therein. Sagent shall invoice Siebel for Maintenance
and Support fees on a quarterly basis based upon the royalty report
submitted by Siebel for the previous quarter. Maintenance and Support
Fees are due within forty-five (45) days of Siebel's receipt of Sagent's
invoice. Maintenance and Support for Development Software and for
Siebel's Internal License set forth in Section 3.4 shall be provided at
no additional charge to Siebel.
6. MAINTENANCE AND SUPPORT CONTINUITY. Maintenance and Support shall
continue, as renewed by Siebel at Siebel's option. If Siebel fails to pay
any amount due pursuant to the terms set forth above, and fails to cure
such failure within sixty (60) business days from receiving a notice of
such failure from Sagent, Sagent shall have the right to terminate
Maintenance and Support to Siebel without any liability to Sagent.
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EXHIBIT E
SAGENT CONSULTING AND TECHNICAL ACCOUNT
MANAGEMENT SERVICES
1. CONSULTING SERVICES. Sagent shall provide Siebel professional consulting
services ("Consulting Services") at Siebel's request at a rate of $[*]
per day. Sagent shall invoice Siebel on a quarterly basis for all
Consulting Services provided in the previous quarter. Sagent shall
provide Siebel's development organization one (1) day of Consulting
Services per quarter at no charge to Siebel. Siebel shall use reasonable
efforts to schedule such Consulting Services with at least two (2) weeks'
advance notice.
2. TECHNICAL ACCOUNT MANAGEMENT SERVICES. Siebel shall have the option of
receiving the services of a professional Sagent Technical Account
Manager, located on-site at Siebel's facility in San Mateo. This
Technical Account Manager shall provide the following services:
o Assist in Star Schema delivery
o Manage Technical Liaison between Siebel and Sagent
o Assist in technical rollout of the Siebel Programs
incorporating the Licensed Materials
These services shall be provided on a full-time basis at the rate of
$[*] per six (6) month engagement or on a part-time basis at the rate
of $[*] per six (6) month engagement.
-20-
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 21
EXHIBIT F
SOURCE CODE ESCROW
Within thirty (30) days of the execution of this Agreement, Sagent agrees to
deposit and maintain the most up-to-date, fully documented source code for the
Licensed Materials in both human and machine readable form, and all releases,
updates, revisions, improvements, enhancements and other changes thereto
(hereafter collectively referred to as the "Program Documentation") in escrow
administered by an unrelated third party escrow agent in a secure off-site
storage location disclosed to Siebel in writing. If so requested by Siebel,
Sagent agrees to certify in writing or to demonstrate, by means reasonably
satisfactory to Siebel, compliance with the foregoing obligation to Siebel on an
annual basis. The escrow shall be established pursuant to an agreement with the
escrow holder in a form satisfactory to Sagent and Siebel (the "Escrow
Agreement"). The sole purpose of the escrow is to provide, for the benefit of
Siebel, copies of the Program Documentation for delivery to Siebel in the event
Sagent ceases to maintain or support the Licensed Materials, or if Sagent ceases
business operations generally or has transferred all or substantially all of its
assets or obligations set forth in this Agreement to a third party which has not
assumed or performed all of the maintenance and support obligations of Sagent
set forth in this Agreement. Sagent warrants that the Program Documentation to
be provided to Siebel under any source code escrow arrangement(s) to which
Siebel is a beneficiary shall contain all media, code, information and
documentation reasonably required to enable any person or entity (even if that
person or entity is not affiliated legally or in fact with Sagent), possessing
technology-industry-acceptable training and skills in the programming languages
in which the source code is comprised, to efficiently create, correct, revise,
update and/or enhance the Program Documentation without any reference to (i) any
materials not included with the Program Documentation furnished to Siebel or
(ii) the aid of Sagent or any person or entity affiliated legally or in fact
with Sagent. If Siebel becomes entitled to receive the Program Documentation
under this Section, either Sagent or its authorized escrow agent will promptly
provide to Siebel one copy of the Program Documentation that Siebel may use
under the terms of the source code license contained in the Escrow Agreement.
-21-
<PAGE> 22
[SIEBEL LOGO]
AMENDMENT #1
TO THE
OEM AGREEMENT (THE "AGREEMENT")
BETWEEN
SIEBEL SYSTEMS, INC. ("SIEBEL")
AND
SAGENT TECHNOLOGY, INC. ("SAGENT")
WHEREAS Siebel and Sagent entered into the Agreement effective March 31,
1998, under which Siebel acquired certain rights in Sagent's Licensed Materials,
as defined in the Agreement;
WHEREAS Siebel and Sagent desire to supplement the Agreement with
additional terms under which Siebel will acquire rights in certain Sagent
materials, which Siebel may use and distribute in connection with the migration
of its customers' data;
NOW, THEREFORE, Siebel and Sagent agree to supplement the Agreement as
follows:
1. CONFLICTS, USE OF TERMS. In the event of conflict between the terms and
conditions of the Agreement and the terms and conditions of this
Amendment #1, the terms and conditions of this Agreement #1 will control.
Where applicable, the defined terms in the Agreement shall have the same
meaning in this Amendment #1. All terms in this Amendment #1 shall apply
only to the transaction set forth herein and, except as specified, each
party's rights and obligations regarding the Licensed Materials set forth
in the March 31, 1998 Agreement shall continue in full force and effect.
2. ADDITIONAL LICENSED MATERIALS. The currently available versions of the
following software programs, as well as all Updates thereto, shall be
considered Licensed Materials under the Agreement and shall be governed
by the terms applicable to Licensed Materials, subject to the terms of
Section 3 below. Sagent will deliver these Licensed Materials with Siebel
splash screens that include the words "Powered by Sagent" at the bottom
of the splash screen. Siebel shall provide the splash screens to Sagent
for incorporation into the Licensed Materials. Sagent shall provide such
Licensed Materials to Siebel no later than November 15, 1998.
Sagent Data Collection Agent
Sagent Design Studio
Sagent Administrator
3. LICENSE GRANT. Sagent hereby grants Siebel all of the licenses set forth
in Section 3 of the Agreement with respect to the Licensed Materials set
forth in Section 2 above; provided, however, that (a) Siebel may exercise
such licenses only in connection with customers (whether direct or
indirect customers of Siebel or of Scopus Technology Inc.) of the Series
3 and/or Series 5 products who intend to migrate to the Siebel Enterprise
Applications family of products and (b) any solution that includes the
Licensed Materials set forth in Section 2 shall not be required to
include the Licensed Materials as an embedded component of the Siebel
Programs.
4. PRODUCT SUPPORT FOR API CALLS. Sagent will develop an API to the Licensed
Materials that supports the API Calls set forth in Attachment A to this
Amendment #1, and will deliver such API to Siebel according to the
schedule set forth below. Upon delivery to Siebel, this API shall be
considered part of the Licensed Materials under the Agreement and
governed by the License Grant in Section 3 of this Amendment #1.
Beta version of API Calls December 15, 1998
Production version of API Calls January 15, 1999
5. PAYMENTS. In consideration for Siebel's agreement to pay $[*] in
lump-sum royalties on or before December 31, 1998, Sagent hereby grants
Siebel the paid-up right and license to use, reproduce, and distribute
and unlimited number of copies of the Licensed Materials set forth in
Section 2 of this Amendment #1, as set forth in Section 3 of this
Amendment #1. After Siebel has accepted the API Calls set forth in
Section 4 above pursuant to the terms of Section 2 of the Agreement,
Siebel shall pay Sagent $[*] in lump-sum royalties.
6. SAGENT PROFESSIONAL SERVICES. Siebel agrees to include Sagent
Professional Services in connection with Siebel's Professional Services
offerings to its customers and consulting partners. Siebel will jointly
market the Sagent Professional Services with its Professional Services
offerings to customers migrating from Series 3 or Series 5. Siebel will
strongly recommend that its partners, including Deloitte & Touche, use
Sagent Professional Services for all Data Movement services for Series 3
and Series 5 migration.
1
<PAGE> 23
7. SIEBEL USER WEEK. At Siebel User Week, planned to be held October 12-16,
1998, Siebel will (a) announce the existing relationship between Sagent
and Siebel and (b) announce Sagent as a premier Data Movement vendor.
8. EXTENDED SUPPORT. Siebel hereby purchases Extended Support, as set forth
in Section 4B of Exhibit D to the Agreement, for both the Licensed
Materials set forth in Section 2 above and the Licensed Materials
licensed pursuant to the March 31, 1998 Agreement. This shall include all
of the terms set forth in Exhibit D to the Agreement regarding
Maintenance and Standard Support as well as the additional terms that
apply to Extended Support. Siebel shall pay Sagent the annual rate of
$[*] for such support. The initial $[*] shall be payable within 45 days
of receipt of Sagent's invoice.
9. TRAINING. Sagent will provide training to Siebel at no additional charge,
at Siebel's site, for one (1) class of Siebel consultants. Sagent will
also provide a copy of all Training Materials that relate to the Licensed
Materials set forth in Section 2 above, which Training Materials shall be
included in the definition of Licensed Materials under the Agreement and
governed by Section 3 above.
10. SIEBEL ALLIANCE PROGRAM. Concurrently with this Amendment #1, Sagent will
sign the documents necessary to join the Siebel Alliance Program at the
Software Partner level.
ACCEPTED AND AGREED:
SIEBEL SYSTEMS, INC. SAGENT TECHNOLOGY, INC.
Signature: /s/ Kevin A. Johnson Signature: /s/ W. Virginia Walker
--------------------------- ---------------------------
Name: Kevin A. Johnson Name: W. Virginia Walker
-------------------------------- --------------------------------
Title: Vice President, Legal Affairs Title: Exec. V.P., CFO
------------------------------- -------------------------------
Date: October 22, 1998 Date: 10/9/98
-------------------------------- --------------------------------
2
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 24
ATTACHMENT A
SAGENT REPOSITORY API CALLS
Sagent will deliver to Siebel an Update to the Licensed Materials that provides
an API that supports the API Calls set forth below. This ATTACHMENT A sets forth
the specification for 14 Sagent repository API functions that the Siebel Tools
must call to provide integrated OLAP business component definitions. These 14
APIs fall into three categories: Plan Attribute Access, Metaview Attribute
Access, and General.
PLAN ATTRIBUTE ACCESS
int SagentEnumPlans (BOOL bFirst, char*repository_name, char**plan_name)
o PURPOSE: Enumerate plan names in the given Sagent repository. This
API allows Siebel Tools to prepare a pick list of plans for the
configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first plan name in enumeration should
be returned, FALSE if the next plan name should be
returned.
o repository_name - The name of the Sagent repository.
o plan_name - Returned plan name.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
int SagentSetCurrentPlan (char*repository_name, char*plan_name)
o PURPOSE: Set the current plan context for other plan retrieval
calls. this API is useful because it removes the need to specify
the plan name for all of the remaining plan access API calls.
o PARAMETER:
o repository_name - The name of the Sagent repository.
o plan_name - The current or active plan name.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
int SagentGetPlanProp (char*prop_name, char**prop_val)
o PURPOSE: For the current plan and given property name, retrieves
the property value. This API allows Siebel Tools to retrieve any
necessary plan property value needed for the BusComp field
definition.
o PARAMETER:
o prop_name - The name of the plan property.
o prop_val - Returned plan property value.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTPLAN must be called
before calling this function
int SagentEnumQueries (BOOL bFirst, char**query_name)
o PURPOSE: For the current plan, enumerate all SQL query names. This
API allows Siebel Tools to prepare a pick list of SQL query names
in the current active plan for the configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first query name in enumeration should
be returned, FALSE if the next query name should be
returned.
o query_name - Returned query name in the current plan.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTPLAN must be called
before calling this function.
3
<PAGE> 25
int SagentGetQueryProp (char*query_name, char**prop_val)
o PURPOSE: For the current plan and the given query name and the
property name, retrieves the property value. This API allows
Siebel Tools to retrieve a plan SQL query's property value needed
for the buscomp field definition..
o PARAMETER:
o query_name - The query name in the current plan..
o prop_name - The name of the query property.
o prop_val - Returned query property value.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTPLAN must be called
before calling this function.
int SagentEnumQueryParts (BOOL bFirst, char*query_name, char**part_name)
o PURPOSE: For the current plan and the given query name, enumerate
all parts in the SQL query. This API allows Siebel Tools to
prepare a pick list of SQL query's part names in the current
active plan for the configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first part name in enumeration should
be returned; FALSE if the next part name should be
returned.
o query_name - The query name in the current plan.
o part_name - Returned part name in the given SQL query.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTPLAN must be called
before calling this function.
int SagentEnumQueryFilters (BOOL bFirst, char*query_name,
char**filter_name)
o PURPOSE: For the current plan and the given query name, enumerate
all filter names. This API allows Siebel Tools to prepare a pick
list of SQL query's filter names in the current active plan for
the configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first filter name in enumeration
should be returned, FALSE if the next filter name should be
returned.
o query_name - The query name in the current plan.
o filter_name - Returned filter name in the current SQL
query.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTPLAN must be called
before calling this function.
int SagentEnumQueryFilterParts (BOOL bFirst, char*query_name,
char*filter_name, char**part_name)
o PURPOSE: For the current plan and the given query name and given
filter name, enumerate all parts used in it. This API allows
Siebel Tools to prepare a pick list of plan query filter's part
names for the configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first part name in enumeration should
be returned, FALSE if the next part name should be
returned.
o query_name - The SQL query name in the current plan.
o filter_name - The filter name in the current SQL query.
o part_name - Returned part name in the filter.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTPLAN must be called
before calling this function.
4
<PAGE> 26
int SagentEnumOutput Fields (BOOL bFirst, char**field_name)
o PURPOSE: For the current plan, enumerate all field names in the
output grid. This API allows Siebel Tools to prepare a pick list
of plan's output field names for the configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first output grid field name in
enumeration should be returned, FALSE if the next output
grid field name should be returned.
o field_name - Returned output grid field name in the current
plan.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTPLAN must be called
before calling this function.
METAVIEW ATTRIBUTE ACCESS
int SagentEnumMetaviews (BOOL bFirst, char*repository_name,
char**metaview_name)
o PURPOSE: Enumerate metaview names in a given repository. This API
allows Siebel Tools to prepare a pick list of metaviews for the
configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first metaview name in enumeration
should be returned, FALSE if the next metaview should be
returned.
o repository_name - The name of the Sagent repository.
o metaview_name - Returned metaview name.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
int SagentSetCurrentMetaview (char*repository_name, char*metaview_name)
o PURPOSE: Sets the current metaview context for other metaview
retrieval calls. This API is useful because it removes the need to
specify the metaview name for all of the remaining metaview access
API calls.
o PARAMETER:
o repository_name - The name of the Sagent repository.
o metaview_name - The current or active metaview name.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
int SagentEnumCategories (BOOL bFirst, char**category_name)
o PURPOSE: For the current metaview, enumerate all category names.
This API allows Siebel Tools to prepare a pick list of categories
of the active metaview for the configurator to pick.
o PARAMETER:
o bFirst - TRUE if the first category name in enumeration
should be returned., FALSE if the next category name should
be returned.
o category_name - Returned category name in the current
metaview.
o RETURN VALUE: 0 if OK; otherwise, it returns various error codes.
o REMARK: The Sagent function SAGENTSETCURRENTMETAVIEW must be
called before calling this function.
int SagentEnumCategoryParts (BOOL bFirst, char*category_name,
char**part_name)
o PURPOSE: For the current metaview and the given category,
enumerate all part names. This API allows Siebel Tools to prepare
a pick list of category parts of the active metaview for the
configurator to pick.
5
<PAGE> 27
[SIEBEL LOGO]
INDEPENDENT CONTRACTOR CONSULTING SERVICES AGREEMENT
THIS INDEPENDENT CONTRACTOR CONSULTING AGREEMENT (the "Agreement") is between
SIEBEL SYSTEMS, INC., with its principal place of business at 1855 South Grant
Street, San Mateo, CA 94402 ("Siebel"), and the business entity or individual
listed below ("Contractor").
Contractor has the experience and is ready, willing and able to perform
the Project Services (as defined below) and Siebel, relying on
Contractor's representation, is willing to engage Contractor as an
independent contractor, and not as an employee, on the terms and
conditions set forth below.
1. CONTRACTOR INFORMATION.
Name: Sagent Technology, Inc.
Address: 2225 E. Bayshore Road, Suite 100
Palo Alto, CA 94303
Attn: Tom Lounibos, Vice President Sales
Phone: (650) 496-3128 Fax: (650) 483-1297
Check applicable box below:
[X] Business - EIN: ______________________
Type of Entity (e.g., Corp., LLC) ___________ State of Registration: __________
[ ] Individual/Sole Proprietor - SSN: _______________________
2. PROJECT SERVICES AND DELIVERABLES.
Contractor will perform the project services ("Project Services") and provide
the deliverables ("Deliverables") as set forth in Exhibit A or as otherwise
agreed to in writing by Siebel and Contractor. Contractor will complete the
Project Services and deliver the Deliverables on or before the Completion Date
(if one is set forth in Exhibit A). Contractor will prepare and submit progress
reports as Siebel may reasonably request from time to time.
The parties agree that services of certain individuals listed in Exhibit A ("Key
Individuals") are essential to the satisfactory performance by Contractor of the
Project Services. The parties further agree that if any Key Individuals leave
the employ of Contractor during the term of this Agreement for any reason or is
unavailable to continue full-time the work called for herein, and if substitute
individuals acceptable to Siebel are not available to continue work within five
(5) business days, Siebel shall have the right to terminate this Agreement
pursuant to Section 3 below.
3. TERM OF AGREEMENT.
3.1 TERM. This Agreement becomes effective as of the Start Date and will
terminate on the Completion Date, when it is expected that Contractor's Project
Services will be completed; provided; however, this Agreement may be terminated
under the following provisions of Section 3.3 or 3.4. The parties' rights and
obligation under Sections 3.4, 3.5, 6, 7, 8 and 10 shall survive the termination
of this Agreement.
3.2 TERMINATION FOR BREACH. Either party may terminate this Agreement for
material breach of this Agreement upon fifteen (15) days written notice to the
other party, if such breach is not cured by the other party within such period.
3.3 TERMINATION FOR CONVENIENCE. Either party may terminate this Agreement
without recourse or liability at any time upon fifteen (15) days written notice
to the other party.
3.4 RETURN OF CONFIDENTIAL INFORMATION. Upon termination of this Agreement for
any reason, each party will immediately transfer and return to the other party
all copies of the other party's Confidential Information in its possession, as
well as equipment, supplies, and computer software supplied by the other party.
Contractor will also immediately furnish to Siebel all Siebel data, records, or
materials of any kind as well as copies of all work in progress.
3.5 FINAL INVOICE. If this Agreement is terminated pursuant to Section 3.3 or if
Contractor terminates this Agreement due to breach by Siebel pursuant to Section
3.2, then, within fifteen (15) days, Contractor shall submit to Siebel an
itemized invoice for any fees and expenses accrued but unpaid. Siebel shall,
upon payment of such amount, have no further liability to Contractor whatsoever
for any further fees, expenses, or other payments. Siebel shall have no payment
obligations under this Section until Contractor has returned all of Siebel's
Confidential Information pursuant to Section 3.4 above. If Siebel terminates
this Agreement due to breach by Contractor, Contractor agrees that Siebel shall
have no payment obligations to Contractor for services that are related to
Contractor's breach.
4. COMPENSATION.
Contractor's compensation for the Project Services and Deliverables are set
forth in Exhibit A. Such compensation shall be Contractor's sole compensation
for rendering the Project Services and Deliverables and otherwise performing its
obligations under this Agreement.
5. QUALITY STANDARDS AND ACCEPTANCE.
5.1 QUALITY STANDARDS. Siebel, at its option, may provide Contractor with its
written quality standards for the project. Contractor agrees to use these
standards, as well as additional guidance and suggestions which may be provided
from time to time by the Project Manager appointed by Siebel. Any or all Project
Services and/or Deliverables must be satisfactory in the reasonable opinion of
Siebel's Project Manager, who retains the right to approve all such Project
Services and/or Deliverables prior to completion and delivery to Siebel.
5.2 ACCEPTANCE. Upon completion of the Project Services or any Deliverables,
Contractor will advise Siebel in writing and Siebel's Project Manager shall
approve or reject such Project Services and/or Deliverables in writing. Any
rejection by Siebel's Project Manager shall specify the nature and scope of
deficiencies and Contractor will, upon receipt of such rejection, act diligently
to correct such deficiencies. Siebel shall have no obligation to compensate
Contractor for Services or Deliverables that are rejected by Siebel.
6. CONFIDENTIAL AND PROPRIETARY INFORMATION AND MATERIALS.
Any disclosure of Confidential Information pursuant to this Agreement shall be
governed by the terms of the Mutual Non-Disclosure Agreement between Siebel and
Contractor dated August 22, 1997, the terms and conditions of which shall be
incorporated herein by reference.
7. OWNERSHIP AND ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS.
The Deliverables shall be the sole and exclusive property of Siebel, whether the
Deliverables are in preparation or in a form or content approved by Siebel.
Contractor hereby irrevocably assigns to Siebel all right, title and interest
Contractor may have in and to any intellectual property developed by Contractor
in its performance of this Agreement (whether conceived individually or
jointly), and Contractor will take all steps reasonably required by Siebel to
perfect its copyright, trademark and other intellectual property rights in and
to the Deliverables. To the extent that the Deliverables, in whole or in part,
constitute computer software programs or products ("Software"). Siebel and
Contractor agree that Siebel shall have and enjoy any and all ownership and
proprietary rights in and to such Software under all federal, state, local, and
foreign intellectual property laws, including without limitation the Copyright
Act of 1976, as amended) and all other applicable laws.
<PAGE> 28
Siebel acknowledges that Contractor is likely to create original works for third
parties which may appear similar to the Deliverables. Siebel agrees that, so
long as such original work does not embody any Siebel Confidential Information
and was developed independently of the Deliverables, such original work for the
benefit of third parties is not likely to be a violation of this agreement and
Contractor will not be prevented from pursuing a livelihood by independently
creating such original, but similar, works for the benefit of third parties.
8. REPRESENTATIONS AND WARRANTIES OF CONTRACTOR.
8.1 GENERAL. Contractor represents and warrants that the project Services will
be performed in a professional and workmanlike manner by employees of Contractor
having a level of skill commensurate with the requirements of this Agreement.
Contractor represents and warrants that the Deliverables will substantially
conform to the specifications set forth in Exhibit A. If the Deliverable is
non-conforming, Contractor shall, at its option, either correct the
non-conformity or return all payments made by Siebel to Contractor hereunder
relating to the non-conforming Deliverables.
8.2 ORIGINAL WORK. Contractor warrants that the work performed and the
Deliverables delivered to Siebel under this Agreement will be original, will not
have been previously published in whole or in part, will not infringe upon any
rights of others, and will not have been previously assigned, licensed or
otherwise encumbered. In performing its obligations under this Agreement,
Contractor will avoid infringement of any patent, copyright, or trademark, or
the disclosure of any trade secret or other confidential and proprietary
information or material of any third party. Contractor represents and warrants
that Siebel's use and exploitation of work and work prepared for Siebel,
including but not limited to the Deliverables, will not be constrained by
patents or any other intellectual property rights.
In the event Contractor wishes to include in the Deliverables any information or
materials to which third parties have any rights, whether by patent, copyright,
trade secret or otherwise ("Other Materials"), Contractor shall first notify
Siebel. If Siebel consents to the inclusion of such Other Materials in the
Deliverables, Contractor shall obtain from the third party, without expense to
Siebel, written permission to include such Other Materials in the Deliverables.
This written permission must be consistent with all the rights granted to Siebel
under this Agreement. Contractor shall provide Siebel with a copy of the written
permission at the time of the Deliverables.
To the extent Contractor incorporates Contractor's own preexisting source
code/meta data into the Deliverables, Contractor grants Siebel the perpetual,
royalty free right and license to use, copy, sublicense, and distribute such
works to prepare derivative works therefrom. Contractor shall notify Siebel if
it wishes to incorporate any such preexisting source code/meta data into the
deliverables.
9. INDEPENDENT CONTRACTOR.
9.1 CONTROL. Contractor shall determined the time, place, methods, details and
means of performing the Project Services. Siebel agrees to furnish access to any
facilities, personnel and equipment necessary to facilitate Contractor's
completion of the Deliverables but Contractor shall be responsible to provide
the tools, know-how and instrumentalities used in the project.
9.2 TAXES, BENEFITS AND LICENSES. Contractor is solely responsible for the
following: (a) the payment of all federal, state, and local taxes and all
appropriate deductions or withholdings; (b) the payment or provision of any
unemployment insurance benefits, state disability benefits, workers'
compensation insurance, vacation, overtime or holiday pay, health, medical,
dental or group insurance or any pension or profit sharing; (c) obtaining any
applicable business or other commercial licenses; and (d) the hiring, firing,
supervising and payment of compensation or other benefits to any agent,
independent contractor, employee or assistant engaged by Contractor (with the
approval of Siebel's Project Manager) to perform any aspect of the Project
Services.
9.3 COMPLIANCE WITH SIEBEL'S POLICIES. Contractor will require its employees to
observe the safety and security policies of Siebel, including but not limited to
Siebel's policy that Contractor's employees shall, when visiting Siebel's
premises, sign-in and/or wear a badge identifying such individual as an
independent contractor.
10. MISCELLANEOUS.
10.1 INDEMNITY. Contractor shall defend, indemnify and hold Siebel harmless
against any and all liabilities, claims, losses, damages, costs, expenses and
attorneys fees arising out of or in connection with, directly or indirectly,
acts or omissions of Contractor, a breach by Contractor of any warranty,
covenant or other provision under this Agreement, or any misrepresentation made
by Contractor. For purposes of this Section, "Contractor" shall mean and include
Contractor, its employees, agents, representatives, and independent contractors.
This indemnity provision shall survive the termination of this Agreement.
10.2 PUBLICITY. Contractor will not issue a press release or other public
statement regarding Contractor's relationship with Siebel or this Agreement
without the advance written consent of Siebel.
10.3 NO ASSIGNMENT. Both parties may assign this Agreement to a wholly-owned
subsidiary or in connection with a merger, acquisition, or sale of all or
substantially all of its assets without Contractor's advance written consent.
10.4 GOVERNING LAW AND VENUE. This Agreement shall be construed and enforced in
accordance with the laws of the State of California. All disputes arising out of
this Agreement shall be subject to the exclusive jurisdiction of the courts of
the State of California; provided, however, that either party may seek judicial
relief in any court of competent jurisdiction in actions to obtain injunctive
relief for enforcement of its rights to confidential and proprietary information
or materials.
10.5 SEVERABILITY. The invalidity or unenforceability of one or more provisions
of this Agreement shall not affect the validity or enforceability of any of the
other provisions hereof, and this Agreement shall be construed in all respects
as if such invalid or unenforceable provisions were omitted.
10.6 NOTICES. Any notice required to be made or given to either party hereto
shall be made by personal delivery, telegram, telex, fax, mailgram, certified or
registered mail return receipt requested, postage prepaid, and addressed to such
party at its address set forth on the first page of this Agreement or to such
other address as such party shall designate by written notice.
10.7 ENTIRETY. This Agreement, and all attached exhibits, sets forth the entire
understanding of the parties regarding the subject matter and its provisions
shall not be modified, or waived, in whole or in part, except in a writing
signed by Contractor and Siebel. All prior contemporaneous discussions and
agreements are merged into this Agreement.
SAGENT TECHNOLOGY, INC.
Signature: /s/ W. Virginia Walker
-------------------------------
Name: W. Virginia Walker
-------------------------------
Title: Exec. Vice Pres., CFO
-------------------------------
Date: 3/3/98
-------------------------------
SIEBEL SYSTEMS, INC.
Signature: /s/ Kevin A. Johnson
-------------------------------
Name: Kevin A. Johnson
-------------------------------
Title: Vice President, Legal Affairs
-------------------------------
Date: 3/31/98
-------------------------------
[SEAL]
-2-
<PAGE> 29
EXHIBIT A1
PROJECT SERVICES AND DELIVERABLES
PROJECT SERVICES. Contractor will provide the necessary services and skills
("Project Services") as described below:
1. Assist Siebel personnel with the development of the Data Model for the
Siebel Data Mart.
2. Assist Siebel Server Engineering personnel with the configuration of the
data extract process to move data from the Siebel Enterprise Applications
database to the Siebel Marketing Enterprise Data Mart.
3. Configure plans used to drive Siebel Marketing Enterprise client queries.
4. Develop and test components containing Sagent materials.
5. Perform overall project planning and management.
KEY INDIVIDUALS. The following individuals are essential to the satisfactory
performance of the Project Services.
Tommy Smith
-------------------------------------------------------
Jean Ebling
-------------------------------------------------------
-------------------------------------------------------
DELIVERABLES. Contractor will prepare and complete the following deliverables
("Deliverables") as described below:
1. Data Model for the Siebel Data Mart.
2. Siebel Data Mart Builder Extract Plans, which will consist of data that
has been extracted from the Siebel Enterprise Applications database to
the Siebel Data Mart.
3. Analysis Plans.
4. Configured and optimized query plans used to drive Siebel Marketing
Enterprise client queries to ensure optimal performance of Siebel
Marketing Enterprise.
COMPENSATION. In full consideration for Contractor's timely and satisfactory
completion and/or delivery of the Project Services and Deliverables set forth in
this Exhibit A1, Contractor will be paid a total fee not to exceed $[*] U.S.
dollars.
INVOICES. All invoices should be sent by Contractor directly to Siebel's
Accounts Payable Department:
Siebel Systems, Inc.
1855 South Grant Street
San Mateo, CA 94402
Attn: Accounts Payable Administrator
Provided the Accounts Payable Department has received written acceptance of the
Deliverables from the designated Siebel Project Manager, all invoices are due
and payable by Siebel within fifteen (15) days after receipt of the applicable
invoice by Siebel's Accounts Payable Department.
EXPENSES. Siebel shall also reimburse Contractor for any reasonable and
necessary expenses actually incurred which are incidental to the Project
Services performed hereunder. Expenses exceeding $25.00 (Twenty-Five U.S.
Dollars) must be approved in advance by Siebel. Reimbursement for expenses
incurred will be made pursuant to an invoice or invoices submitted to Siebel by
Contractor. Invoices can be submitted monthly and should specify the period for
which reimbursement is claimed. Invoices must be substantiated by receipts where
receipts are normally issued.
CONTRACTOR AGREES THAT NO COMPENSATION WILL BE DUE FROM SIEBEL BEYOND WHAT HAS
BEEN EXPRESSLY OUTLINED IN THIS EXHIBIT A1 UNLESS APPROVED IN WRITING IN ADVANCE
BY SIEBEL.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 1
EXHIBIT 10.20
SAGENT TECHNOLOGY, INC.
[SAGENT LOGO]
SOFTWARE MAINTENANCE AND TECHNICAL
SUPPORT AGREEMENT
Sagent Technology, Inc. ("Sagent") will provide the Support Services listed
below for the Software and the two contacts ("Designated Contacts") named by
Customer on page 3 of this agreement.
1. SUPPORT
Sagent will establish and maintain an organization and process to provide
support for the Software to Customer. Support shall include (i) diagnosis of
problems or performance deficiencies of the Software and (ii) a resolution of
the problem or performance deficiencies of the Software. Sagent will provide
telephone software support on a business day basis. Business day is defined as
6:00 AM through 5:00 PM pacific standard time, excluding holidays and weekends.
In addition, Sagent will provide an Internet based support system generally
available seven (7) days a week, twenty-four (24) hours a day.
Sagent will use its best efforts to cure, as described below, reported and
reproducible errors in the Software. Sagent utilizes the following four (4)
severity levels to categorize reported problems:
SEVERITY 1 CRITICAL BUSINESS IMPACT
The impact of the reported deficiency is such that the customer is unable to
either use the Software or reasonably continue work using the Software. Sagent
will commence work on resolving the deficiency within one (1) hour of
notification and will engage staff during business hours until an acceptable
resolution is achieved.
SEVERITY 2 SIGNIFICANT BUSINESS IMPACT
Important features of the Software are not working properly and there are no
acceptable, alternative solutions. While other areas of the Software are not
impacted, the reported deficiency has created a significant, negative impact on
the Customer's productivity or service level. Sagent will commence work on
resolving the deficiency within two (2) hours of notification and will engage
staff during business hours until an acceptable resolution is achieved.
SEVERITY 3 SOME BUSINESS IMPACT
Important features of the Software are unavailable, but an alternative solution
is available or non-essential features of the Software are unavailable with no
alternative solution. The customer impact, regardless of product usage, is
minimal loss of operational functionality or implementation resources. Sagent
will commence work on resolving the deficiency within one (1) business day of
notification and will engage staff during business hours until an acceptable
resolution is achieved.
SEVERITY 4 MINIMAL BUSINESS IMPACT
Customer submits a Software information request, software enhancement or
documentation clarification which has no operational impact. The implementation
or use of the Software by the Customer is continuing and there is no negative
impact on productivity. Sagent will provide an initial response regarding the
request within one (1) business week.
This agreement is not intended as a consulting agreement for customer services.
With respect to severity one (1) reported deficiencies, Sagent may, with the
concurrence of the Customer, elect to send senior support or development staff
to the Customer location to accelerate problem resolution. Sagent will be
responsible for the costs associated with this escalated problem resolution if
the problem is determined to be related to supported
SAGENT TECHNOLOGY, INC.
SOFTWARE MAINTENANCE AND TECHNICAL SUPPORT AGREEMENT
Page 1
<PAGE> 2
Software. If it is determined that the problem was not related to the supported
Software, the Customer agrees to pay reasonable travel and lodging expenses in
addition to Sagent's standard consulting rates. Travel time will be charged at
consulting rates.
2. MAINTENANCE
During the term of this agreement, Sagent will provide the Customer with
copyrighted patches, updates, releases and new versions of the Software along
with other generally available technical material. These maintenance materials
including the Software may not be used to increase the licensed number of
versions or copies of the Software. The Customer agrees not to use or transfer
the prior version but to destroy or archive the prior version of the Software.
All patches, updates, release and new versions shall be subject to the license
agreement related to the Software.
3. WARRANTY
Sagent will undertake all reasonable efforts to provide technical assistance
under this agreement and to rectify or provide solutions to problems where the
Software does not function as described in the Software documentation, but
Sagent does not guarantee that the problems will be solved or that any item will
be error-free. This agreement is only applicable to Sagent Software running
under the certified environments specified in the release notes for that
product. Sagent will provide the Customer with substantially the same level of
service throughout the term of this agreement. Sagent may from time to time,
however, discontinue Software products or versions and stop supporting Software
products or versions one year after discontinuance, or otherwise discontinue any
support service. THE FOLLOWING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
CONDITIONS OR PROMISES TO CUSTOMER OR ANY THIRD PARTY, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR ARISING BY STATUE, LAW, COURSE OF DEALING, CUSTOM AND PRACTICE OR
TRADE USAGE. EXCEPT AS PROVIDED ABOVE, THE SERVICES AND MAINTENANCE ARE PROVIDES
"AS IS". Sagent is not liable for incidental, special or consequential damages
for any reason (including loss of data or other business or property damage),
even if foreseeable or if Customer has advised of such a claim. Sagent's
liability shall not exceed the fees that Customer has paid under this agreement.
Customer agrees that the pricing for the services would be substantially higher
but for these limitations.
4. TERM
This agreement shall start on the Effective Date stated below. This agreement
shall run for a period of one (1) year from the Effective Date and shall
automatically renew for consecutive one (1) year periods unless either party
provides written notice of termination within sixty (60) days prior to the
anniversary date of the Effective Date. Payment for each renewal term shall be
due on the renewal date at the current rates for support of the Software. This
agreement may be terminated for non-payment or material breach. Fees paid or due
are non-refundable unless Sagent has materially breached this agreement and has
failed to cure the breach after 30 days written notice.
5. GENERAL
(a) Each party acknowledges that it has read this Agreement, they
understand the agreement and agree to be bound by its terms. Further,
both parties agree that this is the complete and exclusive statement of
the Agreement between the parties, which supersedes and merges all
prior proposals, understandings and
SAGENT TECHNOLOGY, INC.
SOFTWARE MAINTENANCE AND TECHNICAL SUPPORT AGREEMENT
Page 2
<PAGE> 3
all other agreements, oral and written, between the parties relating to
this Agreement. This Agreement may not be modified or altered except by
written instrument duly executed by both parties. The Software and the
use thereof is subject to the license agreement related to the
Software.
(b) Times by which Sagent will perform under this agreement shall be
postponed automatically to the extent that we are prevented from
meeting them by causes beyond reasonable control.
(c) This agreement and performance hereunder shall be governed by the laws
of the State of California. Venue shall be in Santa Clara County,
California.
(d) No action, regardless of form, arising out of this Agreement may be
brought by Customer more than two (2) years after the cause of action
has arisen.
(e) If any provision of this Agreement is invalid under any applicable
statute or rule of law, it is to that extent, deemed to be omitted.
(f) Customer may not assign or sub-license without the prior written
consent of Sagent, Customer's rights, duties or obligations under this
Agreement to any person or entity, in whole or in part. A sale of
substantially all of Licensee's assets to a third party or any transfer
of more than 50% of the voting stock of Licensee to a third party shall
not constitute an assignment under this license.
(g) The prevailing party in any action related to this agreement shall have
the right to recover its reasonable expenses including attorney's fees.
The term "Software" as used in this agreement means:
Software Name, Version and Number of Copies
__________________________________
__________________________________
Designated Contacts, full names followed by telephone number and e-mail address.
(Two maximum).
Contact 1
Name:_____________________________
Telephone #:______________________
E-mail Address:___________________
Contact 2
Name:_____________________________
Telephone #:______________________
E-mail Address:___________________
During the term of this agreement, the Customer may delete and add Designated
Contacts by sending notification in writing on Customer's letter head and
addressed to Sagent's Vice President of Operations. We may rely on such notice
to make the change.
SAGENT TECHNOLOGY, INC.:
Name:_____________________________
Address:__________________________
Signature:________________________
Title:____________________________
Date:_____________________________
CUSTOMER:_________________________
Name:_____________________________
Address:__________________________
Signature:________________________
Title:____________________________
Date:_____________________________
The Effective Date of this
agreement is:
__________________________________
SAGENT TECHNOLOGY, INC.
SOFTWARE MAINTENANCE AND TECHNICAL SUPPORT AGREEMENT
Page 3
<PAGE> 1
EXHIBIT 10.21
[SAGENT TECHNOLOGY, INC LOGO]
AGREEMENT FOR CONSULTING
AND TRAINING SERVICES
This agreement for consulting and training services is between
___________________________ ("Customer") and Sagent Technology, Inc.'s, Sagent
Professional Services located at 800 W. El Camino Real, Suite 300, Mountain
View, CA 94040, USA ("Consultant").
Customer and Consultant agree as follows:
1. SERVICES PROVIDED
1.1 SERVICES. Consultant agrees to provide Customer consulting services at
the fees described on Exhibit A. The parties may change the services
provided any changes are signed by authorized agents for both parties.
1.2 CONTROL OF SERVICES. Consultant shall determine the time, place,
method, details, and means of performing the Services. Customer agrees
to furnish any facilities, personnel and equipment necessary to
facilitate Consultant's providing the Services.
2. CONSULTANT PERSONNEL
2.1 CONSULTANT STAFF. Consultant will provide adequate staff to render the
Services. In the event that any Consultant staff is found to be
unacceptable to Customer, Customer shall notify Consultant of such fact
and Consultant shall work with Customer to resolve the problem
including removal of staff and providing a replacement acceptable to
Customer.
2.2 INDEPENDENT CONTRACTOR. Consultant is an independent contractor.
Neither Consultant nor Consultant's employees are, or shall be deemed
for any purpose to be, employees of Customer. Customer shall not be
responsible to Consultant, Consultant's employees or any governing body
for any payroll-related taxes related to the performance of the
Services.
3. PROJECT MANAGEMENT
3.1. CUSTOMER PROJECT MANAGER. Customer shall designate a project manager
for the Services (the "Customer Project Manager") who shall act as a
liaison between Customer and Consultant.
3.2. PROGRESS REPORTS AND MEETINGS. Consultant and Customer Project Manager
shall hold meetings and issue reports as the parties deem necessary to
complete the services.
4. RECORDS AND TAXES
4.1. RECORDS. Consultant shall maintain complete and accurate accounting
records, in a form in accordance with generally accepted accounting
principles, to substantiate Consultant's charges and expenses hereunder
and Consultant shall retain such records for a period of one (1) year
from the date of final payment under any Schedule.
4.2. TAXES. Customer agrees to pay the amount of any sales, use, excise or
similar taxes applicable to the performance of the Services, if any,
or, in lieu thereof, Customer shall provide Consultant with a
certificate acceptable to the taxing authorities exempting Customer
from payment of these taxes.
5. INDEMNITY AND INSURANCE
5.1. INDEMNITY. Consultant agrees to defend at its own cost and expense any
claim or action against Customer for actual or alleged infringement of
any United States patent, copyright or other property right (including,
but not limited to, misappropriation of trade secrets) based on any
service furnished to Customer by Consultant pursuant to the terms of
this Agreement. Consultant agrees, should Customer's use of any service
furnished to Customer by Consultant be enjoined by any court, to
promptly obtain, at no expense to Customer, the right to continue to
use the items so enjoined or, at no expense to Customer, provide
Customer promptly with substitute items to the enjoined products. The
limit to Consultant's liability for all costs, expenses, judgments,
fees and settlements under this provision shall be the amount Customer
has
Sagent Technology, Inc.
Agreement for Consulting Services
Page 1
<PAGE> 2
paid under this agreement.
5.2. INDEMNITY. Customer agrees to defend at its own cost and expense any
claim or action against Consultant based on Customer's products or
services (excluding rights licensed from Consultant) including claims
for actual or alleged infringement of any United States patent,
copyright or other property right (including, but not limited to,
misappropriation of trade secrets). The limit to Customer's liability
for all costs, expenses, judgments, fees and settlements under this
provision shall be the amount Customer has
5.3. INSURANCE. Consultant shall procure and maintain for itself and its
employees all insurance coverages as required by Federal or State law,
including workers' compensation insurance.
6. CONFIDENTIALITY AND PROPRIETARY RIGHTS
6.1. CONFIDENTIALITY. The parties acknowledge that Customer and Consultant
each own valuable trade secrets, and other confidential information.
Such information may include software code, routines, data, know-how,
designs, inventions and other tangible and intangible items. All such
information owned by the parties is defined as "Confidential
Information". This provision does not apply to Confidential Information
that is 1) in the public domain through no fault of the receiving
party, 2) was independently developed as shown by documentation, 3) is
disclosed to others without similar restrictions, or 4) was already
known by the receiving party.
6.2. NON-DISCLOSURE. The parties agree that they will not, at any time
during or after the term of this Agreement, disclose any Confidential
Information to any person, and that upon termination of this Agreement,
each party will return any Confidential Information that belongs to the
other party.
6.3. PROPRIETARY RIGHTS. All services provided under this agreement and all
materials, products, inventions, works, and deliverables developed or
prepared by Consultant under this Agreement are the property of
Consultant and all title and interest therein shall vest in Consultant.
These rights include patent rights, copyright, derivative rights, trade
secrets, and trademarks. All intellectual property owned by Customer
shall belong to Customer. Consultant grants Customer a non-exclusive,
worldwide, perpetual, royalty free license to make, use, or sublicense
any of Consultant's intellectual property developed or prepared under
this Agreement.
7. WARRANTIES
7.1. CONSULTANT WARRANTIES. Consultant warrants that each of its employees
assigned to perform services under this agreement shall have the proper
skill, training and background to perform in a competent and
professional manner. Customer acknowledges that the services include
unknown and unforeseen problems and Consultant shall attempt to solve
such problems. Customer acknowledges that Consultant does not warrant
that there will be a satisfactory solution to all problems. CUSTOMER
AGREES THAT CONSULTANT WARRANTS ITS SERVICES "AS IS" AND THAT
CONSULTANT DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED. CUSTOMER
AGREES CONSULTANT SHALL HAVE NO LIABILITY FOR CONSEQUENTIAL DAMAGES,
LOST PROFITS, OR ANY DIRECT OR INDIRECT DAMAGES. Customer acknowledges
that the rates charged by Consultant would be substantially higher but
for these limitations.
8. GENERAL
8.1. TERM AND TERMINATION. This Agreement shall commence when last signed by
both parties and shall continue for a period of one year. In the event
of any material breach of this Agreement by either party, the other
party may cancel this Agreement. Either party may terminate this
Agreement by giving the other party two weeks prior written notice of
its election to terminate. In such case, Customer agrees to pay
Consultant for all charges and expenses incurred by the Consultant up
to the effective date of termination.
8.2. ASSIGNMENT. Neither party may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of
the other party. A sale of substantially all the assets of a party or a
merger of a party does not constitute and assignment for purposes of
this clause.
8.3. NOTICES. Any notices or communication under this Agreement shall be in
writing and shall be by confirmed facsimile, overnight deliver or
certified mail return receipt requested to the party receiving such
communication at the address specified below:
Sagent Technology, Inc.
Agreement for Consulting Services
Page 2
<PAGE> 3
If to Customer:
Attn.: _____________________________________
_____________________________________
_____________________________________
If to Consultant:
Attn.:
Sagent Technology, Inc.
800 W. El Camino Real, Suite 300
Mountain View, CA 94040
8.4. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
8.5. MODIFICATIONS. No changes or waivers to this Agreement shall be binding
unless made in writing and duly signed by authorized agents of both
parties.
8.6. COMPLETE AGREEMENT. This Agreement and each Exhibit attached hereto set
forth the entire understanding of the parties as to the subject matter
therein and may not be modified except in a writing executed by
authorized agents of both parties.
8.7. NON-SOLICITATION. Unless otherwise mutually agreed to by the parties in
writing, the parties agree that they will not hire or solicit the
employment of any personnel of the other party during the term of this
agreement and for a period of six (6) months after the termination of
this agreement.
IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have executed this Agreement as of the date last written below.
Customer Consultant
Dated: __________________________ Dated: ___________________________
Name: __________________________ Name: ____________________________
Title: __________________________ Title: ____________________________
Customer
Bill To Address
Name: ________________________________________
Address 1 ________________________________________
Address 2 ________________________________________
City, State, Zip ________________________________________
Phone: ________________________________________
Sagent Technology, Inc.
Agreement for Consulting Services
Page 3
<PAGE> 4
SAGENT TECHNOLOGY, INC.
EXHIBIT A
Project Services: Consultant will provide the service as described below:
1.
2.
3.
4.
Compensation: Consultant will be paid $________ per day. Each day
shall be no more than 8 hours. Customer shall pay a
minimum of one day's compensation plus travel
expenses incurred if a scheduled meeting is cancelled
less than five days in advance.
Invoices: All invoices are due and payable within 15 days after
receipt by Customers.
Expenses: Customer shall reimburse Consultant for any
reasonable and necessary expenses actually incurred,
including travel and living expenses. Reimbursement
for expenses incurred will be made pursuant to an
invoice or invoices submitted monthly and will
reflect the period for which reimbursement is
claimed.
Customer to provide: Workspace, access to telephones, facsimile, and the
Internet, and all necessary equipment and software to
permit Consultant to perform the services.
Sagent Technology, Inc.
Agreement for Consulting Services
Page 4
<PAGE> 1
EXHIBIT 10.22
[SAGENT TECHNOLOGY, INC. LOGO]
SUBCONTRACTOR WORK ORDER AGREEMENT
TERMS AND CONDITIONS
1. INDEPENDENT CONTRACTORS. Subcontractor and __________ are independent
contractors. Neither party is an employee, agent or representative of
the other party. Neither party shall have any right, power, or
authority to enter into any agreement for or on behalf of the other
party, or to incur any obligation or liability or otherwise bind the
other party. This Agreement does not create an association, joint
venture, or partnership between the parties nor imposes any partnership
liability upon either party.
2. WARRANTIES. Subcontractor warrants that Subcontractor has the right to
enter into this Agreement and further warrants:
a. that the service shall be performed in a good and professional
manner;
b. that Subcontractor shall at all times comply with __________
or its client's security provisions and other __________ or
client policies and procedures made known to Subcontractor;
c. that Subcontractor shall not violate or infringe upon any
their party rights, including but not limited to property,
contract, employment, trade secret, confidential and
proprietary information, or any trademark, copyright or patent
rights; and
d. that Subcontractor shall not violate any applicable federal,
state, or local laws, rules or regulations in the performance
of services under this Agreement.
3. OWNERSHIP. All work or materials developed or provided by Subcontractor
under this Agreement shall be deemed to be work made for hire and owned
exclusively by __________. Such work or materials shall include and is
not limited to data, notes, plans, documentation, specifications,
designs, files, software (in source and object code form), upgrades,
revisions, modification, or enhancements. In the event such work or
materials may not, by operation of law, be work made for hire.
Subcontractor hereby assigns to __________ all rights in such work and
materials and all copyrights and patents rights therein. Subcontractor
shall also disclose to __________ all discoveries, inventions, ideas or
techniques (inventions) made by Subcontractor in the performance of
services under this Agreement. All such Inventions shall also be owned
exclusively by __________. Subcontractor shall execute any document and
provide reasonable assistance to __________ as __________ may
reasonably request to give full effect to __________'s ownership rights
hereunder.
4. INDEMNIFICATION. Subcontractor shall indemnify and hold __________, its
officers, employees and agents harmless from any and all claims,
liability damages, losses and expenses arising from:
a. any personal injury (or death) or damage of any property
arising out of or in any way connected with any act or
omission by Subcontractor in the provision of services under
this Agreement;
b. any taxes or other payments owned by Subcontractor to any
governmental agency as a result of any services provided
hereunder, any compensation owned to any employee or
subcontractor of Subcontractor for services provided
hereunder, or any determination that Subcontractor is not an
independent contractor; and
c. any claim by a third party that the work or materials provided
hereunder infringes a copyright, patent, trade secret or other
intellectual property right of such third party.
5. CONFIDENTIALITY. In the course of providing services hereunder,
Subcontractor may have access to confidential and proprietary
information and materials of __________ or its clients (Confidential
Information). Confidential Information includes and is not limited to,
information related to past, present or future research, development or
business affairs, any proprietary products, materials or methodologies,
or any other information which provides __________ or its clients with
a competitive advantage. Confidential
<PAGE> 2
Information shall be used by Subcontractor only in conjunction with the
provision of services hereunder and shall not be disclosed to any third
party. No rights or licenses under patents, trademarks or copyrights
are ranted or implied by any disclosure of Confidential Information.
Upon __________'s request or completion or termination of this
Agreement, Subcontractor shall return all Confidential Information to
__________. This Section 5 shall survive the expiration or termination
of this Agreement.
6. TERMINATION.
6.1 __________ has the right to immediately terminate this
Agreement without cause upon ten (10) days prior written
notice to Subcontractor.
6.2 Either party may terminate this Agreement upon ten (10) days
prior written notice to the other party if the other party is
in default of any provision of this Agreement and such default
is not cured within the ten (10) day period.
6.3 Upon termination of this Agreement, Subcontractor shall cease
all work and shall promptly provide __________, without
additional cost to __________, all work and materials
developed by Subcontractor under this Agreement. Subcontractor
shall also return to __________ all materials and Confidential
Information provided to Subcontractor in connection with this
Agreement.
7. NONCOMPETITION AND SOLICITATION __________ may, in connection with this
Agreement, disclose to Subcontractor Confidential Information regarding
__________'s clients and the products and services to be provided to
such clients by __________. In consideration of the fees to be paid
hereunder, Subcontractor agrees not to solicit such clients directly or
indirectly, for any similar products and services during the term of
this Agreement and for a period of one (1) year thereafter.
Subcontractor further agrees not to solicit or approach for employment,
either directly or indirectly, any __________ personnel during the term
of this Agreement and for a period of one (1) year thereafter.
8. PUBLICITY AND TRADEMARKS. Neither party shall publicize or use the name
or trademarks of the other party in any manner, or those of
__________'s clients, without the prior written consent of the other
party.
9. LIMITATION OF LIABILITY. EXCEPT FOR DAMAGES ARISING FROM ANY
NONCOMPLIANCE WITH SECTIONS 2, 3, 4, AND 5 IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR LOSS OF PROFITS, REVENUE, DATA OR USE OR FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED,
EVEN IF ADVISED O FTHE POSSIBILITY OF SUCH DAMAGES.
10. NONEXCLUSIVITY. This Agreement is nonexclusive and the parties may
enter into similar agreements with other parties without restriction as
to number, location and application.
11. NOTICES. Any notice, request, authorization, direction, or other
communication under this Agreement shall be given in writing and
delivered in person or by certified or first-class United States mail,
properly addressed and stamped with the required postage to the
intended recipient.
12. NONWAIVER. The failure of either party to insist upon or enforce strict
conformance by the other party of any provision of this Agreement or to
exercise any right under this Agreement shall not be construed as a
waiver or relinquishment of such party's right unless made in writing
and shall not constitute any subsequent waiver or relinquishment.
13. INVALID PROVISION. The invalidity or unenforceability of any provision
of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
14. CUMULATIVE REMEDIES. The rights and remedies afforded to either party
pursuant to any provision of this Agreement are in addition to and do
not in any way limit any other rights or remedies afforded to either
party by any other provision of this Agreement or by law. All such
rights and remedies are cumulative and may be exercised singularly or
concurrently.
15. SUCCESSORS AND ASSIGNS. Neither party may assign any rights hereunder
without the prior written consent of the other party, which consent
shall not be unreasonably withheld. Any assignment of rights shall not
work as a novation of obligations thereunder without written agreement.
Any attempt to assign any rights, duties, or obligations hereunder
without the other party's written consent will be void. Notwithstanding
the above, either party may
<PAGE> 3
assign this Agreement to a surviving entity in connection with any
merger, acquisition or consolidation.
16. SURVIVAL. Sections 3, 4, 5, 6.3, 7 and 9 shall survive any termination
of this Agreement.
17. ENTIRE AGREEMENT. This Agreement and its attachment(s) set forth the
entire agreement between the parties and supersedes any and all prior
or contemporaneous agreements of the parties with respect to the
subject matter contained herein. __________ shall not be bound by, and
specifically objects to, any term, condition, or other provision
inconsistent with or in addition to any provision of this Agreement
that is submitted by Subcontractor in any correspondence or any other
document, unless __________ specifically agrees to such provision in a
written instrument signed by an authorized representative of
__________. No change, amendment, or modification of any provision of
this Agreement shall be valid unless set forth in a written instrument
signed by both parties.
18. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of California.
<PAGE> 4
SUBCONTRACTOR AGREEMENT
SCHEDULE A
BETWEEN
-----------------
AND
SAGENT TECHNOLOGY, INC.
PROJECT CODE NO. __________________
Sagent Technology, Inc. agrees to provide the services described in the
Statement of Work. Following the successful delivery of services,
________________ will pay Sagent Technology, Inc. in accordance with the
following fee schedule and payment terms. This Schedule A shall be subject to
the terms and conditions of the Subcontractor Work Order Agreement between
__________ and Sagent Technology, Inc.
1. STATEMENT OF WORK: Sagent Technology, Inc. agrees to provide the
necessary resources to __________ to test and develop the following
five reports, using Sagent Query Tools at __________'s client
_______________
a. Income Statement by Organization and by Contract Type [2
templates]
b. Overhead Rate Analysis (actual versus budget) [1 template]
c. Revenue Accrual (actual versus budget) [1 template]
d. Actual versus Budget by Cost Center (charging and owning) [2
templates: 1 for charging]
e. Labor Productivity (dollars and hours) [4 templates: 3 for
dollars, 1 for hours]
2. FEE SCHEDULE AND PAYMENT TERMS:
__________ agrees to pay a fixed price of $15,000 plus reasonable
travel and living expenses that may be incurred during the delivery of
this engagement. The estimated duration of this effort is expected to
be fifteen (15) working days, these fifteen (15) days are a portion of
the forty (40) days quoted to _______________ directly from Sagent
Technology, Inc. on Quote 1 (attached) of Sagent Technology, Inc.
Schedule A for implementation of Sagent Software. Upon
_______________'s request, fifteen (15) days out of forty (40) were
transferred to __________ in order to assist in the timely development
of the above referenced reports. This effort is scheduled to begin
_________________________.
<PAGE> 5
Any work that may be required outside the scope of the above described
services must be in the form of a written request by the Sagent Project
Manager and processed as an addendum to this Schedule A.
__________ will be billed upon the successful completion of the above
described services, and the acceptance of those services by __________.
Payment terms are net 30.
Subcontractor must submit timecards and any expenses for the previous
week's work on Monday's, to the ___________ Project Manager for review
and approval.
Within two business days after the end of a billing period, as defined
in the Fee Schedule and Payment Terms, the Subcontractor shall submit
an invoice to:
________________________
________________________
________________________
________________________
________________________
The invoices shall contain the following information:
Invoice Number
Date of Invoice
Period covered by this Invoice - From/To Dates
Social Security Number or Federal Tax Identification Number
Reference to the Subcontractor Agreement, Effective Date
Project Code number __________ (Please reference as Purchase
Order Number)
Services performed and amounts due
Pre-approved travel and/or per diem expenses if authorized in Fee
Schedule and Payment Terms
Copies of weekly timecards, expense reports and receipts will be
attached
SAGENT TECHNOLOGY, INC. COMPANY: __________________________
By: _____________________________ By: _______________________________
Authorized Representative Authorized Representative
Name: ___________________________ Name: _____________________________
Title: __________________________ Title: ____________________________
Date: ___________________________ Date: _____________________________
<PAGE> 1
EXHIBIT 10.23
[SAGENT LOGO]
- --------------------------------------------------------------------------------
EVALUATION AGREEMENT
This Evaluation Agreement (No.________) is between Sagent Technology, Inc. 800
W. El Camino Real, Suite 300, Mountain View, CA 94040, U.S.A. ("us"), and
Account Name & Address:
- --------------------------------------------------------------------------------
("you")
- --------------------------------------------------------------------------------
1. We license you to install and use the Software during the Evaluation Period
only.
"We," "our" and "us" mean Sagent Technology, Inc. "Software" means only our
computer program(s) listed in the Schedule, any documentation ("Documentation")
and updates that we may deliver to you, and portions and copies in any form.
"Schedule" means any schedules that you and we sign that specifically refer to
this agreement. The "Evaluation Period" is the time period listed in the
Schedule; if none is listed there, the Evaluation Period is 30 days from the
effective date of the applicable Schedule.
2. You will pay us the License Fee listed in the Schedule if applicable.
If there is a license fee for the evaluation of our Software listed in the
Schedule then you will pay us the fees net 30 days from receipt of this invoice.
3. We disclaim all representation, warranties, and liability regarding the
Software that you will be evaluating. You accept it "AS IS."
You are responsible for installing the Software, and for determining whether the
Software is suitable, secure, and reliable for your purposes. We will provide
you telephone hotline support at no extra charge during the Evaluation Period
only, but any other maintenance, support or full Software License must be
purchased separately. Telephone support hours are from 6 AM to 5 PM Pacific
Standard Time. We do not warrant that the Software is error-free or that any
errors will be corrected. THE FOREGOING IS IN LIEU OF ALL WARRANTIES OR
CONDITIONS TO YOU OR ANY THIRD PARTY, EXPRESS OR IMPLIED, RELATED TO THE
SOFTWARE OR ANY SERVICES WE MAY PROVIDE, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTY OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR ARISING BY STATUTE, LAW OR TRADE DEALING OR USAGE. We are not liable
for incidental, special or consequential damages for any reason (including loss
of data or other business or property damage), even if foreseeable, and our
liability in all events will not exceed the License Fee that you have paid, if
any. Your SOLE REMEDY for any defects in the Software is to return the Software
and all copies to us for a full refund of the License Fee you have paid. You
agree to implement backup and recovery procedures adequate to prevent loss due
to malfunction.
4. You will respect our copyright in the Software.
You may make one copy of the Software programs for back-use only. You will put
our copyright notices on all copies. You may not copy the Documentation.
5. You will respect our trade secrets and other proprietary rights in the
Software.
You agree that we have and will keep title, copyright, and all other proprietary
rights in the Software. You will keep the Software in a safe place. You will use
best efforts to ensure that your employees and others with access to the
Software comply with this agreement. You have no right to use, examine or
recreate the Software source code, which is our trade secret. You agree not to
alter, decompile, or reverse engineer the Software. You will treat our Software
and accompanying documentation as Confidential Information. You will protect the
Confidential Information from unauthorized use, dissemination or publication.
You will protect the Confidential Information by using the same degree of care
as you use to protect your own confidential information of a like nature, but no
less than a reasonable degree of care. You are not required to protect
information that (a) you possessed before you received it from us, (b) is or
becomes a matter of public knowledge through no fault of your own; ( c) you
rightfully receive from a third party without a duty of confidentiality; (d) we
disclose to a third party without imposing a duty of confidentiality; (e) you
develop independently; or (f) the law requires or we give written permission to
be disclosed. You may use the Confidential Information only for the purposes of
evaluating and reviewing our Software.
6. You may not transfer the Software.
<PAGE> 2
Any attempted assignment, sub-license or transfer by you of the Software is void
without our written permission.
7. This license agreement remains in effect unless terminated.
You may terminate this agreement at any time. We may terminate this agreement if
you breach it. At the end of the applicable Evaluation Period, or upon
termination if earlier, you will return the Software, Documentation and all
copies to us. Should you not return the software, then you authorize us in our
reasonable discretion to charge you the applicable full system license fee for
any Software and or Documentation that you do not return to us in unmarked
condition, suitable for evaluation by another customer.
8. The following terms also apply.
This is the full and final agreement between you and us, and supersedes any
earlier promises, representations or agreements relating to the subject of this
agreement. This agreement may only be changed if you and our authorized
representative do so in writing. Waivers not given in writing may be revoked at
any time without liability. Invalid provisions do not affect the enforceability
of the others. We are entitled to injunctive relief for violations of our
proprietary rights. We reserve all rights not granted specifically in this
agreement.
YOU:
-----------------------------------
Signed:
--------------------------------
Name:
----------------------------------
Title:
---------------------------------
Effective Date:
------------------------
SAGENT TECHNOLOGY, INC.
Signed:
--------------------------------
Name:
----------------------------------
Title:
---------------------------------
Effective Date:
------------------------
<PAGE> 3
[SAGENT LOGO]
- --------------------------------------------------------------------------------
EVALUATION AGREEMENT
SCHEDULE # 1 EVALUATION PERIOD ENDS_______________
Payment and Delivery Terms if Applicable: If you do not purchase the software
you are required to return it. We will be entitled to physically repossess the
Software from your premises in the event of nonpayment or termination of the
evaluation agreement.
Contact Persons
Your Primary Contact: Name:____________ Phone:____________Email:_____________
Your Alternate Contact: Name:____________ Phone:____________Email:_____________
Our Primary Contact: Name:____________ Phone:____________Email:_____________
Other Applicable Terms:_________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
All terms of the evaluation agreement referred to above are incorporated herein
and will apply to your orders relating to this Schedule.
<PAGE> 1
EXHIBIT 10.24
NOTE
No. N-1 Palo Alto, California
February 1, 1998
FOR VALUE RECEIVED, W. Virginia Walker promises to pay to Sagent
Technology, Inc., a California corporation (the "Company"), the principal sum of
Ninety-Nine Thousand Nine Hundred Ninety-Seven Dollars and Eighty Cents
($99,997.80), together with interest on the unpaid principal hereof from the
date hereof at the rate of five and forty-seven hundredths percent (5.47%) per
annum, compounded semiannually.
Principal and interest shall be due and payable on February 1, 2001.
Payment of principal and interest shall be made in lawful money of the United
States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Option Agreement, dated as of
September 29, 1997. This note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee, director or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
W. Virginia Walker
/s/ W. Virginia Walker
Signature
<PAGE> 1
EXHIBIT 10.25
NOTE
No. N-2 Palo Alto, California
February 1, 1998
FOR VALUE RECEIVED, W. Virginia Walker promises to pay to Sagent
Technology, Inc., a California corporation (the "Company"), the principal sum of
Four Hundred Twenty-Two Thousand Two Dollars and Twenty Cents ($422,002.20),
together with interest on the unpaid principal hereof from the date hereof at
the rate of five and forty-seven hundreths percent (5.47%) per annum, compounded
semiannually.
Principal and interest shall be due and payable on February 1, 2001.
Payment of principal and interest shall be made in lawful money of the United
States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Option Agreement, dated as of
September 29, 1997. This note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee, director or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
W. Virginia Walker
/s/ W. Virginia Walker
Signature
<PAGE> 1
EXHIBIT 10.26
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Article 1. Definitions.......................................................................1
Article 2. License...........................................................................2
Article 3. Compensation and Royalties........................................................3
Article 4. Support, Maintenance and Training.................................................4
Article 5. Marketing and Publicity...........................................................5
Article 6. Professional and Technical Services...............................................6
Article 7. Term of the Agreement.............................................................7
Article 8. Confidentiality...................................................................7
Article 9. Confidentiality Exceptions........................................................9
Article 10. Warranty..........................................................................9
Article 11. Patent Copyright and Trade Secret Indemnification................................11
Article 12. Notices..........................................................................12
Article 13. Agency...........................................................................12
Article 14. Limitation of Liability..........................................................12
Article 15. Law..............................................................................12
Article 16. Assignment.......................................................................13
Article 17. Amendments.......................................................................13
Article 18. Special Marketing Situations.....................................................13
Article 19. Entire Agreement.................................................................13
Article 20. Miscellaneous Provisions.........................................................14
</TABLE>
2
<PAGE> 2
ATTACHMENTS
ATTACHMENT A Software Specifications
Support Services
Professional/Technical Services
ATTACHMENT B Royalty/Pricing
Support Service Pricing/Fees
Professional/Technical Services Fees
ATTACHMENT C Unisys Travel Policy
ATTACHMENT D Insurance Requirements
ATTACHMENT E Sagent Training Description
EXHIBITS
EXHIBIT 1 Software Data Sheets and Definitions
EXHIBIT 2 Escrow Agreement
EXHIBIT 3 Sagent End User Agreement
EXHIBIT 4 Sagent End User Support Agreement
3
<PAGE> 3
ATTACHMENT A -SOFTWARE SPECIFICATIONS/SERVICES
UNISYS
SOLUTION PROVIDER AGREEMENT
THIS AGREEMENT (the "Agreement") is made by and between Unisys
Corporation (hereinafter "Unisys"), a Delaware corporation with offices located
at Township Line and Union Meeting Roads, Blue Bell, Pennsylvania 19424, and
Sagent Technology Inc. (hereinafter "PROVIDER"), a California corporation with
offices located at 2225 E. Bayshore Road, Suite 100, Palo Alto, CA 94303.
WITNESSETH:
WHEREAS, PROVIDER has developed a set of software programs known as the
"Data Mart Solution".
WHEREAS, Unisys is a supplier of technology-based solutions and services
on a global scale, and has marketing experience in the Information Management
industry.
WHEREAS, PROVIDER wishes to provide its Data Mart Solution software to
Unisys and Unisys wishes to receive this software for its marketing programs.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
A. "Software" means the components of Data Mart Solution software
in object code form developed by PROVIDER and described in
Attachment A, and any Enhancements developed by PROVIDER during
the term of this Agreement.
B. "Documentation" means any or all user and technical manuals in
English developed by or for PROVIDER regarding the elements of
the software, whether in hard copy, magnetic media, or other
form. Documentation includes but is not limited to the reference
manuals and user guides and manuals.
C. "Subsidiary(ies)" shall mean a corporation, company or other
entity of which thirty percent (30%) or more of whose
outstanding voting shares or securities are, now or hereafter,
owned or controlled directly or indirectly by Unisys.
D. "Affiliate(s)" shall mean a corporation, company or other entity
of which more than ten percent (10%) but less than thirty
percent (30%) of whose outstanding voting shares or securities
are, now or hereafter, owned or controlled, directly or
indirectly by Unisys.
E. "Third Party(ies)" shall include third party participants,
system integrators, distributors, dealers, and other such
entities who are either a corporation,
<PAGE> 4
company, or other entity engaged in marketing products made by
or for or marketed by Unisys.
F. "End-Users(s)" shall mean the clients of Unisys and/or its
Subsidiaries, Affiliates, and Third Parties who are granted a
sublicense to use the Software.
G. "Source Code" shall mean the Software as written in the symbolic
programming language employed by PROVIDER to develop Software
and which when compiled and/or assembled is transformed into an
Object Code form of Software. Source Code shall also include
design documentation, including but not limited to functional
specification, file structures, etc.
H. "Object Code" shall mean the machine executable form of Software
which results from the compilation and/or assembly of the Source
Code.
I. "Enhancements" shall mean modifications, improvements,
enhancements or added functionality to the Software, in Object
Code form, developed by or for PROVIDER, which result in new or
improved versions of the Software and that PROVIDER generally
releases to its customers.
ARTICLE 2. LICENSE
A. Subject to the terms and conditions of this Agreement, PROVIDER
hereby grants to Unisys, and Unisys hereby accepts from PROVIDER
a non-exclusive, worldwide right and license during the term of
this Agreement to:
(i) translate or have translated all or any portion of the
Documentation.
(ii) Internally use copies of Sagent's Software, one copy per
computer, for the purposes of demonstrating, maintaining
and supporting the Software, subject to PROVIDER's
standard End User agreement attached hereto as Exhibit
3. Neither Unisys nor its distributors shall grant End
Users and/or its Systems Integrators Demonstration Only
copies.
(iii) Unisys may distribute the PROVIDER's Software, outlined
in Exhibit 1, the server portion of which must be
installed on an existing Unisys server and/or a new
Unisys server. Unisys may exercise the foregoing
distribution right through Third Parties, provided,
however, that (a) such Third Parties may only distribute
the PROVIDER's Software pursuant to written distribution
agreements with Unisys no less protective of PROVIDER's
rights than this Agreement, (b) Unisys shall use its
best efforts to supervise and enforce its rights against
such Third Parties with respect to such Third Parties'
distribution of PROVIDER's Software, and (c) such Third
Parties comply with the license restrictions set forth
herein, including but not limited to the distribution
restrictions set forth above, and the restrictions set
forth in Section 2C and Section 2D. Nothing in this
Agreement is intended to benefit any 3rd Party.
2
<PAGE> 5
B. All right, title and interest to any copyrights inherent in any
translations of the Documentation shall vest in PROVIDER and
Unisys shall assign all right, title and interest therein to
PROVIDER. UNISYS shall execute all documents and take all
reasonable actions necessary to perfect such assignment.
C. Except as expressly provided herein, no right, title or interest
is granted by PROVIDER to Unisys relating to the Software other
than as set forth in Section 2A. Unisys shall not authorize any
third party to modify, alter, reverse engineer, disassemble or
decompile the Software.
D. Shrink Wrap. Software provided to Unisys hereunder is subject to
license and not sale. The Software packaging provided by
PROVIDER includes PROVIDER's standard End User agreement.
E. Proprietary Rights. Unisys agrees that PROVIDER retains all of
its right, title and interest in, and to all patent rights,
trademarks, trade names, inventions, copyrights, know-how and
trade secrets relating to the Software. The use by Unisys of any
of these property rights is authorized only for the purposes
herein set forth and upon termination of this Agreement for any
reason such authorization will cease except as to licenses
already granted to end users. Unisys shall not remove, alter,
cover or obfuscate any copyright notices or other proprietary
rights notices placed on or embedded in the Software by
Provider.
ARTICLE 3. COMPENSATION AND ROYALTIES
A. PROVIDER shall receive a fee or royalty, as set forth in
Attachment B.
B. Unisys may order each required copy of the Object Code from
PROVIDER. All orders issued by Unisys will be in writing via a
valid purchase order, will include the applicable price for each
copy of the Object Code as set forth in Attachment B, and will
be forwarded to PROVIDER at the address set forth in this
Agreement. Such purchase orders are for the purpose of
identifying types and quantities of the Object Code to be
shipped and requested delivery dates. Only the terms and
conditions of this Agreement will apply to such orders. Any
additional terms and conditions contained on any purchase order
or any PROVIDER acknowledgment document shall be of no force or
effect unless agreed to by the other party. One set of the user
Documentation will be provided with each copy of the Object
Code. All copies shall be shipped F.O.B. PROVIDER's facilities.
Orders placed by Unisys' Japanese joint venture, Nihon Unisys
Limited (NUL), will be fulfilled by an authorized Sagent
Distributor in Japan. Unisys shall pay the amount specified in
an order within forty-five (45) days after PROVIDER ships
Software copies pursuant to such order as previously described,
Software copies shall be shipped in PROVIDER's standard
packaging. Payment shall be in U.S. Dollars. Any overdue amount
shall bear interest at a rate of 8% per annum or the maximum
rate allowed by law if less.
3
<PAGE> 6
C. Unisys shall pay PROVIDER the cost of materials, shipping, and
any applicable taxes for those Software copies which will be
used by Unisys solely for demonstration, support or maintenance
purposes.
D. An End-User will be entitled to make backup copies of the
Software as set forth according to Sagent's Shrink-Wrap license
agreement attached hereto as Exhibit 3. No royalty will be
payable on the End-User backup copies.
E. All amounts payable will be exclusive of all applicable taxes,
including, but not limited to, VAT, duties, withholding and
other taxes not based on Provider's income. All such taxes if
any shall be paid by Unisys.
F. Except as otherwise provided herein, no royalty or other
payments are due from Unisys to PROVIDER or PROVIDER to Unisys.
Unisys shall pay for maintenance as set forth in Attachment B.
ARTICLE 4. SUPPORT, MAINTENANCE AND TRAINING
A. Within 15 days after the Effective Date of this Agreement,
PROVIDER shall name Unisys as a beneficiary to the current
Source Code in escrow, pursuant to the terms and conditions of
Exhibit "2" (Escrow Agreement). Unisys shall be responsible for
annual escrow fees ($300 per year).
B. PROVIDER will provide support directly to Unisys end-users who
have purchased a maintenance agreement from Sagent via the
Standard Support Agreement attached hereto as Exhibit 4. During
the term of this agreement, Unisys may exercise the option to
provide Level 1 and/or Level 2 support to its end-users
according to PROVIDER's standard support terms and conditions as
detailed in Attachment B.
C. PROVIDER will make reasonable effort to provide pre-sales
support to Unisys, in the form of advisory meetings and sales
training of Unisys personnel, as well as making presentations
and demonstrations of the Software to potential end-users
identified by Unisys, at the prevailing rates as outlined in
Exhibit B. PROVIDER shall be accompanied on all sales calls in
accounts where Unisys provided a lead, by a Unisys
representative. UNISYS shall pay PROVIDER at its standard rates
and UNISYS shall bear all reasonable expenses incurred by
PROVIDER in connection with PROVIDER's activities under this
Section and according to the fees outlined in Exhibit B. All
expenses are subject to terms of Unisys' Travel Policy attached
hereto.
D. PROVIDER will make reasonable effort to provide technical
support for installation, configuration, usage and systems
integration by Unisys at PROVIDER's current prevailing rates as
outlined in Exhibit B Unisys shall pay PROVIDER at its standard
rates and UNISYS shall bear all reasonable expenses incurred by
PROVIDER in connection with PROVIDER's activities under this
Section.
4
<PAGE> 7
E. PROVIDER will make reasonable effort to provide technical and
marketing training to Unisys personnel through PROVIDER's
standard training as detailed in Appendix E. Provider will
provide Unisys with training according to the pricing and fees
outlined in Exhibit B. If the said training is at Unisys
facility, Unisys shall reimburse PROVIDER for its reasonable
travel expenses, per the provisions of Attachment C.
F. PROVIDER shall make reasonable effort to furnish training in the
installation, maintenance, operation, modification and
enhancement of the Software through PROVIDER's standard training
as detailed in Appendix E; Provider will provide Unisys with
training according to the pricing and fees outlined in Exhibit
B.
ARTICLE 5. MARKETING AND PUBLICITY
A. Unisys shall be responsible for its marketing and sales
activities and may conduct these activities as it considers
appropriate.
B. As requested by Unisys, and subject to PROVIDER's availability,
PROVIDER will use reasonable efforts to actively support and
assist marketing, sales and technical support activities, and
will maintain qualified marketing and technical personnel to
engage in marketing, sales, and technical support activities
hereunder.
C. With advance authorization from Unisys, PROVIDER shall be
reimbursed, in accordance with Attachment C, for travel and
living expenses incurred by PROVIDER personnel in connection
with making presentations, the preparation of proposals and
other pre-sales activity.
D. During the term of this Agreement, Unisys shall have the right
to indicate to the public that it is an authorized distributor
of the Software and to use the trademarks, marks, and tradenames
that Provider may adopt from time to time ("Provider
Trademarks") including:
Sagent
the Sagent Logo
Information Studio
Flashcube
Sagent Design Studio
Starmart
In the promotion and distribution of the Software, provided that
upon thirty days' prior written notice, Provider may substitute
alternative marks for any or all of the Provider Trademarks. All
representations of Provider Trademarks that Unisys intends to
use shall first be submitted to Provider for approval (which
shall not be unreasonably withheld) or shall be exact copies of
those used by Provider. In addition Unisys shall fully comply
with
5
<PAGE> 8
all reasonable guidelines, if any, communicated by Provider
concerning the use of Provider Trademarks.
Unisys shall not alter or remove any of the Provider Trademarks
applied to the Software by Provider. Except for the
authorization set forth in this Section, nothing herein grants
or will be deemed to grant to Unisys any right, title or
interest in Provider Trademarks. All uses of Provider Trademarks
will inure solely to Provider, and Unisys shall obtain no rights
with respect to any of these Provider Trademarks, other than the
right to distribute the Software as set forth herein, and Unisys
irrevocably assigns to Provider all such right, title and
interest if any obtained under or as a result of distribution
under this agreement in any Provider Trademarks. At no time
during the term of this Agreement will Unisys challenge or
assist others in challenging the Provider Trademarks or the
registration thereof, or the attempt to register any trademarks,
marks or trade names confusingly similar to those of Provider.
Upon termination of this Agreement, Unisys shall immediately
cease to use any and all of the Provider Trademarks.
Provider and Unisys shall enter into registered user agreements
with respect to the Provider Trademarks pursuant to applicable
trademark law requirements in the Territory. Unisys shall be
responsible for proper filing of registered user agreements with
applicable government authorities in the Territory and shall pay
all costs or fees associated with such filing.
E. PROVIDER will provide Unisys with 100 copies of all available
marketing collateral. Additional copies of Sagent's marketing
collateral are available from Sagent at Sagent's then current
standard cost plus any applicable costs and taxes, unless
otherwise agreed to in writing by the parties.
ARTICLE 6. PROFESSIONAL AND TECHNICAL SERVICES
PROVIDER shall, during the term of this Agreement, perform professional
and/or technical services, as set forth in Attachment A (hereinafter
"Services"), as mutually agreed upon between Unisys and PROVIDER, at
fees as set forth in Attachment B, and in accordance with schedules to
be mutually agreed upon between the parties. Any special terms and
conditions required relative to the provision of Services by PROVIDER
hereunder shall be mutually agreed upon by the parties prior to PROVIDER
providing any services hereunder. With advance authorization from
Unisys, PROVIDER shall be reimbursed, in accordance with Attachment C,
for travel and living expenses incurred by PROVIDER personnel in
connection with providing Services. If Services are performed by
PROVIDER at either a Unisys or End-User location, then insurance shall
be maintained as set forth in Attachment D.
ARTICLE 7. TERM OF THE AGREEMENT
A. The term of this Agreement shall be for twenty-four (24) months
from the Effective Date and continue until terminated or
canceled as provided herein.
6
<PAGE> 9
B. This Agreement may be terminated by either party for cause, in
the event that the other party substantially fails to perform
any of its material obligations hereunder and said cause is not
corrected within 30 days after delivery of written notice from
the non-defaulting party specifying such cause.
C. If a party (i) is involved in any proceedings under any
bankruptcy or other insolvency laws, or laws for the relief of
debtors; (ii) has a receiver or other court appointee named for
its business or property; (iii) makes an assignment for the
benefit of creditors; (iv) is unable to make payments as they
become due; (v) fails to make payments as they become due; (vi)
is liquidated, dissolved, or its existence is terminated; then
the other party may suspend performance under this Agreement
and/or terminate this Agreement immediately upon written notice.
D. Upon any termination or expiration of this Agreement, all rights
granted to Unisys to use the Software and to distribute the
Software to End-Users shall terminate.
E. The termination of this Agreement shall not cancel, terminate or
affect any product licenses that have already been delivered to
Unisys's sublicenses previously granted to End-Users.
F. In addition to the rights and obligations which survive as
expressly provided for elsewhere in this Agreement, the Sections
and Attachments which by their nature should survive, shall
survive and continue after any termination or cancellation of
this Agreement, and specifically Sections 1, 2.B, 2.C, 7.D, 8,
9, 10, 11, 12, 13, 14, 15, 16, 17, and 19 shall survive the
termination or expiration of this Agreement.
ARTICLE 8. CONFIDENTIALITY
During the term of this Agreement, the parties, to the extent of their
right to do so, and as is required for each to perform its obligations
hereunder, may exchange proprietary and confidential information.
A. Proprietary and confidential information is defined as
information which the disclosing party desires to protect
against unrestricted disclosure or competitive use, and which is
furnished pursuant to this Agreement appropriately identified as
being proprietary or confidential when furnished.
B. The receiving party of proprietary or confidential information
including the Software, agrees to hold such information in
confidence for a period of three years from the date of its
receipt, except in the case of Source Code for which the
obligation shall continue until the occurrence of any
circumstance listed in Article 9 below.
C. The parties each will designate in writing one or more
individuals within their own organization as the only person(s)
for receiving proprietary or
7
<PAGE> 10
confidential information exchanged between the parties pursuant
to this Agreement.
D. All proprietary or confidential information received from the
other party will be in tangible form, clearly identified as
proprietary or confidential, to the individual designated to
receive proprietary or confidential information.
E. Proprietary or confidential information which is exchanged may
be used only by the receiving party in connection with the
Agreement or in the performance of an End-User contract.
F. Neither party shall divulge or use, for any purpose not
connected with the effort contemplated in this Agreement, any
program or system concept or other information disclosed to it
by the other party in connection with the performance of this
Agreement, and marked with a proprietary or confidential legend,
to any person or office other than appropriate End-Users to
which proposals or reports must be submitted.
G. Neither party may disclose the other party's confidential
information to any third party without such other party's prior
written consent. It is further agreed that each party will
require that all third parties, if any, receiving proprietary or
confidential information protect the same in accordance with the
provisions contained herein.
H. The standard of care for protecting such information, imposed on
the party receiving such information, will be that degree of
care the receiving party uses to prevent disclosure, publication
or dissemination of its own proprietary or confidential
information.
I. Neither party shall be liable for the inadvertent or accidental
disclosure of proprietary or confidential information if such
disclosure occurs despite the exercise of the same degree of
care as such party normally takes to preserve the
confidentiality of its own data or information of like
importance but in no event less than a reasonable degree of
care. Notwithstanding the foregoing, Source Code shall be
treated as follows. Access to and use of the Source Code shall
be limited to Unisys's employees and contractors on a
need-to-know basis. Unisys shall inform all such employees or
contractors that the Source Code is a trade secret of PROVIDER
and must be kept confidential. Unisys agrees to use reasonable
care in selecting its personnel allowed to work with such trade
secret or proprietary information and will inform each employee
or contractor working with such Source Code. That Unisys is
prohibited from disclosing, transferring, licensing,
sublicensing, selling, assigning, distributing, or giving such
confidential trade secret information to any third party without
the express prior written consent of PROVIDER. Unisys shall be
fully responsible for the conduct of all its employees, agents,
and representatives with respect to their treatment of the
Source Code. All employees and contractors given access to any
Source Code shall have signed a confidentiality agreement with
Unisys which obligates them to keep third party information
confidential during and after termination of the individual's
employment or other relationship with Unisys. Unisys shall be
8
<PAGE> 11
fully liable to PROVIDER for any breaches of the provisions of
this Section by any persons given access to the Source Code
hereunder.
ARTICLE 9. CONFIDENTIALITY EXCEPTIONS
The obligation with respect to the protection and handling of
proprietary or confidential information, as set forth in this Agreement,
is not applicable to the following:
A. Information which becomes lawfully known or available to the
receiving party from a source other than the disclosing party,
including the End-User, without breach of this Agreement by the
recipient.
B. Information developed independently by the receiving party.
C. Information which becomes available to the receiving party by
inspection or analysis of products available in the market.
D. Information which is within, the public domain without breach of
this Agreement by the recipient.
E. Information publicly disclosed with the written approval of the
disclosing party.
F. Information disclosed by the party providing the same to others
on a non-restricted basis.
G. Nothing herein shall restrict either party from disclosing any
portion of such information on a restricted basis pursuant to a
judicial or other lawful order, but only to the extent necessary
to comply with such order and provided the party required to
disclose such information provides notice to the other party
promptly after learning of such requirement.
ARTICLE 10. WARRANTY
A. Except as may otherwise be specifically set forth in this
Agreement, PROVIDER warrants that it owns the entire right,
title and interest in and to the Software and Documentation,
PROVIDER's sole obligation in the event of any breach of the
above warranty shall be to indemnify Unisys as set forth in
Section 11.
B. PROVIDER warrants that it has the right and power to grant the
licenses and rights set forth in this Agreement. PROVIDER's sole
obligation in the event of any breach of the above warranty
shall be to indemnify Unisys as set forth in Section 11.
C. PROVIDER warrants that (i) the Software, as supplied, will, for
a period of 90 days after the effective date of this Agreement,
perform in all material respects in accordance with its
specifications and the Documentation, and (ii) the Documentation
accurately describes the features, functions, and use of
9
<PAGE> 12
the Software. In case of non-performance, PROVIDER shall correct
the Software to remedy such non-performance. PROVIDER's sole
obligation in the event of any breach of the above warranty
shall be to either replace the Software or to use commercially
reasonable efforts to remedy any material problem whichever
option PROVIDER deems appropriate.
D. PROVIDER warrants that no material portion of the Software is
not in the public domain.
E. PROVIDER warrants that it has no knowledge as of the effective
date of this Agreement of any patents or copyrights which are
infringed or may be infringed, or any trade secrets or other
proprietary rights of other parties which are or may be
misappropriated or violated by using, making, copying, licensing
or distributing the Software and Documentation.
F. PROVIDER warrants that it has agreements with its employees and
contractors which are sufficient for the fulfillment of
PROVIDER'S obligations pursuant to this Agreement.
G. PROVIDER warrants that the software shall not cause erroneous
date calculations due to miscalculations by the Software as a
result of the year 2000 date change. Sagent further warrants
that the software includes the ability to manage and manipulate
all data involving dates or date fields which include indication
of century to ensure year 2000 compatibility. At Unisys request
and upon reasonable notice, PROVIDER will provide evidence
sufficient to demonstrate adequate testing of the Software to
meet the foregoing requirements.
H. EXCEPT AS EXPRESSLY STATED HEREIN, NEITHER PARTY HAS MADE ANY
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, BY OPERATION
OF LAW OR OTHERWISE, CONCERNING THE SOFTWARE, THE DOCUMENTATION,
THE SCOPE OR DURATION OF ANY MARKETING EFFORT, OR THE SUCCESS OF
ANY SUCH MARKETING EFFORT. NEITHER PARTY HAS RELIED ON ANY
EXPRESS OR IMPLIED REPRESENTATION OF THE OTHER PARTY, WRITTEN OR
ORAL, AS AN INDUCEMENT TO ENTERING INTO THIS AGREEMENT. IN NO
WAY LIMITING THE FOREGOING, PROVIDER SPECIFICALLY DISCLAIMS THE
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NONINFRINGEMENT WITH RESPECT TO THE SOFTWARE, AND
THE DOCUMENTATION.
I. PROVIDER makes no warranties of any kind to any third parties
and Nothing in this Agreement is intended to benefit any 3rd
Party.
10
<PAGE> 13
ARTICLE 11. PATENT COPYRIGHT AND TRADE SECRET INDEMNIFICATION
A. PROVIDER, at its own expense, will defend, indemnify, and hold
harmless Unisys and its Subsidiaries, Affiliates and End-Users
against any claim, liability, damage or expense (including
attorneys' fees) that the use or distribution permitted
hereunder of the Software and Documentation furnished pursuant
to this Agreement infringe any United States patent or copyright
or such Software or Documentation are subject to claims of
misappropriation of trade secrets protected under law, provided
Unisys: (1) gives PROVIDER prompt written notice of such claim,
(2) permits PROVIDER to solely defend or settle the claims, and
(3) provides all reasonable assistance to PROVIDER in defending
or settling the claims. If Unisys does not have the authority to
permit PROVIDER to solely defend or settle a claim brought
against an End-User, PROVIDER shall be under no obligation to
indemnify any person for any damage award assessed against any
such person.
B. If the Software or Documentation are held to be an infringement
or misappropriation for which Unisys is indemnified by PROVIDER,
and their use is enjoined, PROVIDER shall, at its option and
expense, (1) procure for Unisys the right to continue to utilize
the Software and Documentation pursuant to the license and other
rights granted herein, or (2) replace or modify the Software or
Documentation in such a way that they shall not continue to
constitute such infringement or misappropriation; or (3) if
PROVIDER in its sole discretion determines that neither of the
foregoing are reasonable, terminate Unisys' licenses. PROVIDER
may, at its option and expense, take any of the actions set
forth in subsections (1), (2) or (3) above in the event that
PROVIDER reasonably believes that the distribution reproduction
or use of the Software or Documentation could possibly be
enjoined.
C. PROVIDER will not defend or indemnify Unisys or End-Users if any
claim of infringement or misappropriation results from
alteration of Software or Documentation by any person other than
PROVIDER or combination with any other software or hardware, and
such infringement would not exist based on use of the unaltered
Software or Documentation or the Software or Documentation
absent of such combination.
D. This section 11 states the entire liability of PROVIDER and
Unisys sole and exclusive remedy for patent or copyright
infringement or trade secret misappropriation or infringement or
misappropriation of any other intellectual property right, with
respect to the Software and Documentation.
E. Unisys, at its own expense, will defend, indemnify, and hold
harmless PROVIDER against any claim, liability, damage or
expense (including attorneys' fees) that the modifications in
the form of customization, nationalization and implementation
services furnished pursuant to this Agreement infringe a patent
or copyright or are subject to claims of misappropriation of
trade secrets protected under law, provided PROVIDER: (1) gives
Unisys prompt written notice of such claim, (2) permits Unisys
to
11
<PAGE> 14
defend or settle the claims, except that Unisys may not, without
PROVIDER's written consent, settle any claim or enter into any
consent decree that has a material adverse effect on PROVIDER,
and (3) provides all reasonable assistance to Unisys in
defending or settling the claims.
ARTICLE 12. NOTICES
All notices, certificates, acknowledgments and other reports hereunder,
shall be in writing and shall be deemed properly delivered when duly
mailed by registered letter to the other party at its address as first
written above, or to such other address as either party may, by written
notice, designate to the other. Such notices, certificates,
acknowledgments and other reports hereunder, shall be sent to the
respective Contract Administrator, as noted below, or as the same may be
changed from time to time by notice similarly given.
For Unisys: Terry C. Ludvigson
For PROVIDER: Kathy D. Ovalle
ARTICLE 13. AGENCY
This Agreement is not intended by the parties to constitute or create a
joint venture, partnership, or formal business organization of any kind,
and the rights and obligations of the parties shall be only those
expressly set forth herein. Neither party shall have authority to bind
the other except to the extent authorized herein. The parties shall
remain as independent contractors at all times and neither party shall
act as the agent for the other.
ARTICLE 14. LIMITATION OF LIABILITY
In no event shall either party be responsible or liable for any
indirect, special, punitive, incidental or consequential damages,
including lost profits, of the other party or any third party, whether
or not either party has been advised of the possibility of such damages.
In no way limiting the foregoing, in no event shall PROVIDER be able for
lost profits or for any loss of data or other damage to other intangible
items. Except for a breach of Section 8, in no event shall PROVIDER's
liability arising out of this Agreement exceed the greater of $35,000 or
the amount of money actually paid by Unisys hereunder.
ARTICLE 15. LAW
This Agreement shall be subject to the laws of the Commonwealth of
Pennsylvania. If any part, term or provision of this Agreement shall be
held void, illegal, unenforceable, or in conflict with any law of a
federal, state or local government having jurisdiction over this
Agreement, the validity of the remaining portions or provisions shall
not be affected thereby.
12
<PAGE> 15
ARTICLE 16. ASSIGNMENT
This Agreement may not be assigned or otherwise transferred by either
party in whole or in part without the express prior written consent of
the other party, which consent will not be unreasonably withheld. The
foregoing shall not apply in the event either party shall change its
corporation name or merge with or have substantially all of its assets
acquired by another corporation.
ARTICLE 17. AMENDMENTS
This Agreement shall not be amended or modified, nor shall any waiver of
any right hereunder be effective unless set forth in a document executed
by duly authorized representatives of both parties. The waiver of any
breach, term, covenant or condition herein contained shall not be deemed
to be a waiver of such term, covenant or condition or any subsequent
breach of the same or any other term, covenant or condition herein
contained.
ARTICLE 18. SPECIAL MARKETING SITUATIONS
When requested by Unisys, PROVIDER agrees to review the royalties and
fees payable by Unisys to PROVIDER when mutual benefit may be achieved
in response to special marketing situations.
ARTICLE 19. ENTIRE AGREEMENT
This Agreement contains all of the agreements, representations and
understandings of the parties hereto and supersedes and replaces any and
all previous understandings, commitments or agreements, oral or written
between the parties. No third party may enforce the provisions of this
Agreement against PROVIDER.
Unisys understands and acknowledges that PROVIDER is subject to
regulation by agencies of the United States Government, including, but
not limited to, the U.S. Department of Commerce, which prohibits export
or diversion of certain Software and technology to certain countries.
Any and all obligations of PROVIDER to provide the Software, as well as
any other technical information or assistance shall be subject in all
respects to such United States laws and regulations as shall from time
to time govern the license and delivery of technology and Software
abroad by persons subject to the jurisdiction of the United States,
including the Export Administration Act of 1979, as amended, any
successor legislation, and the Export Administration Regulations issued
by the Department of Commerce, Bureau of Export Administration. Unisys
warrants that it will comply with the Export Administration Regulations
and other United States laws and regulations governing exports in effect
from time to time.
13
<PAGE> 16
0.1 Governmental Approvals. Unisys represents and warrants
that it will obtain all required approvals of the
government of any country outside the United States in
which it markets or distributes the Software in
connection with this Agreement.
0.2 Applicable Laws. Unisys agrees that it will comply with
all applicable laws of each jurisdiction applicable to
Unisys' activities under this Agreement.
ARTICLE 20. MISCELLANEOUS PROVISIONS
1.1 Severability. If any provision of this Agreement is held by
a court of competent jurisdiction to be contrary to law, such
provision shall be changed and interpreted so as to best
accomplish the objectives of the original provision to the
fullest extent allowed by law and the remaining provisions of
this Agreement shall remain in full force and effect.
1.2 Force Majeure. Except for Unisys' obligations to pay
PROVIDER hereunder, neither party shall be liable to the other
party for any failure or delay in performance caused by reasons
beyond its reasonable control, including but not limited to acts
of God, earthquakes, strikes or shortages of materials.
IN WITNESS WHEREOF, this Agreement has been duly signed by authorized
representatives of the parties and shall become effective as of the latest date
set forth below (the "Effective Date").
UNISYS CORPORATION SAGENT TECHNOLOGY INC.
(PROVIDER)
By: /s/ TERRY C. LUDVIGSON By: /s/ THOMAS M. LOUNIBOS
------------------------------- ---------------------------------
Name: Terry C. Ludvigson Name: Thomas M. Lounibos
----------------------------- -------------------------------
Title: Mgr. Technical Procurement Title: VP Sales
---------------------------- ------------------------------
Date: June 27, 1997 Date: June 27, 1997
----------------------------- -------------------------------
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<PAGE> 17
ATTACHMENT A - SOFTWARE SPECIFICATIONS/SERVICES
SOFTWARE SPECIFICATIONS AND DEFINITIONS
The PROVIDER's software that makes up the Unisys Solution may include
the following Sagent packages:
Package #1 - Data Mart Population Only
Overview: This package provides data mart population capabilities
(extraction, transformation and load). No end user capabilities are included.
Components:
- - 1 Sagent "Data Mart Population" Server, which includes a "data mart
population" agent and a repository
- - 1 Sagent Admin
- - 1 Sagent "Data Mart Population" Design Studio - Same as Oracle version, except
for:
* Batch loaders for all supported databases
* Pivot transform?
* No Training
Package #2 - OLAP Only
Overview: This package provides end user OLAP capabilities for non-Web users. No
data mart population capabilities are included. This is an ideal package for
organizations who purchase the Oracle Data Mart Suite and then need additional
OLAP capabilities.
Components:
- - 1 Sagent "OLAP" Server, which includes an 11OIAP" agent and a repository
- - 1 Sagent Admin
- - 1 Sagent "OLAP" Design-Studio
* No load transforms
* No batch loaders
- - 20 Sagent Information Studios
- - 20 Sagent Analysis
* No Training
Package #3 - Web OLAP Only
Overview: This package provides end user OLAP capabilities for non-Web and Web
users.
Components:
- - 1 Sagent "OLAP" Server, which includes an "OLAP" agent and a repository
- - 1 Sagent Admin
A-1
<PAGE> 18
- - 1 Sagent "OLAP" Design Studio
* No load transforms
* No batch loaders
- - 20 Sagent Information Studios
- - 20 Sagent Analysis
- - 1 Sagent WebLink
* No Training
Package #4 - Basic Integration
Overview: This is a combination of packages 1 and 2.
Components:
- - 1 Sagent "Integrated" Server., which includes
* an agent that does both "data mart population" and "OLAP"
* a repository
- - 1 Sagent Admin
- - 1 Sagent "Integrated" Design Studio, which includes the functionality for
* "data mart population"
* "OLAP"
- - 20 Sagent Information Studios
- - 20 Sagent Analysis
* 2 Days of Training
Package #5 - Web Integration
Overview: This is a combination of packages 1 and 3
Components:
- - 1 Sagent "Integrated" Server, which includes
* agent that does both "data mart population" and "OLAP"
* a repository
- - 1 Sagent Admin
- - 1 Sagent "Integrated" Design Studio, which includes the functionality for
* "data mart population"
* "OLAP"
- - 20 Sagent Information Studios
- - 20 Sagent Analysis
- - 1 Sagent WebLink
* 2 Days of Training
A-2
<PAGE> 19
Add on components can be provided on top of an initial Sagent Package outlined
above, the product Descriptions and Definitions are outlined below.
<TABLE>
<CAPTION>
PROVIDER Software Description Definitions
- ----------------------------- -----------
<S> <C>
Sagent "OLAP" Agent See Exhibit "1"
Sagent "Integrated" Agent See Exhibit "1"
Sagent WebLink See Exhibit "1"
Sagent Admin See Exhibit "1"
Sagent Design Studio See Exhibit "1"
5-pack of Sagent Information Studio See Exhibit "1'
5-pack of Sagent Analysis See Exhibit "1"
</TABLE>
SUPPORT SERVICES
Available Support Services will include telephone support, in which we
will answer technical questions from designated persons about the
installation and use of covered Software products; Maintenance Releases,
in which we will provide our copyrighted inline releases and workarounds
as available (we will not undertake individual fixes for you); Upgrades,
in which we will provide new product releases (signified by a change in
the version number) as substitutes for covered Software; and other
generally available Technical Materials. Note that Maintenance Releases
and Upgrades, where applicable, may not be used to increase the total
number of copies of the Software. After upgrade or maintenance this
agreement will only apply to the upgraded or maintained versions of a
Software product; you agree to destroy or archive (but not use or
transfer) the prior version.
PROFESSIONAL/TECHNICAL SERVICES
TECHNICAL SUPPORT SERVICES
The Professional Support program is designed to give you access to Sagent
Technology's Technical Support Analysts. These analysts are available to insure
the continued operation of your Sagent product. This includes working with a
Sagent system that has gone down, assisting with the initial setup of new
systems, and other problems that arise from the use of our products. Technical
Support Services does not include the development of custom code, or detailed
product training.
DESIGNATED PROFESSIONAL SUPPORT CONTACTS
Maintaining a clear line of communication between your organization and Sagent's
Technical Support department is key to making sure you get the most from the
A-3
<PAGE> 20
Professional Support program. As such, it is important that you designate
specific individuals within your organization that become the primary contacts
for working with Sagent Technical Support. These individuals, who are familiar
with the technical workings of your company's systems, help by managing the flow
of information to the Support Analysts to insure that responses are focused on
the problem at hand. The number of contacts within your organization that have
access to Sagent Technical Support is specified in your support agreement, and
is determined by you based on your need.
WORKING WITH TECHNICAL SUPPORT
Sagent Technical Support tracks your issues based on an incident model. While we
do not limit you to a specific number of incidents, we do use incidents to make
sure that each issue that you have is resolved to the best of our ability. An
incident is defined as a single support issue that can not be broken down into
smaller support issues. Each of these incidents is tracked individually, and can
be referenced by you when you contact us.
CONTACTING SAGENT TECHNICAL SUPPORT BY PHONE
Use the phone to contact Sagent Technical Support whenever you have a
time-critical or business-critical problem. Sagent Technical Support is
available from 6:00 AM to 5:00 PM PST, Monday through Friday. If we are unable
to answer your call immediately, you will be given the option to leave a voice
mail message. In the message, please be sure to give us your name, company name,
a description of the problem, and a phone number that you can be reached at. All
calls that go to voice mail will be responded to within two business hours. If
we fail to connect with you on the return call, we will leave a message (if
possible) with an appropriate time to follow up.
CONTACTING SAGENT TECHNICAL SUPPORT BY ELECTRONIC MAIL
For problems that are not time-critical, you can contact us via the Internet at
[email protected]. We will respond to all mail messages within one
business clay of the time it arrives at Sagent Technical Support. Please be sure
to include a full description of the problem, your name, your companies name,
and a return e-mail address.
ESCALATION PROCESS
Step 1 - All new technical support issues are handled initially by
our support analysts. Our support analysts are trained to deal
with the majority of all support issues, and most support issues
are resolved at this step.
Step 2 - If an issue comes up that can not be handled by the support
analyst, it is given one of the following priorities.
A) CRITICAL For business outages, or issues, that have a
serious customer impact which threatens future
productivity.
B) IMPORTANT For issues that do not have a significant current
impact on customer productivity.
Step 3 - CRITICAL issues are immediately escalated to Sagent's upper
management, team to determine the proper course of action.
A-4
<PAGE> 21
IMPORTANT issues are escalated to an escalation review
committee, which meets regularly to determine the proper course
of action for these escalation's.
Step 4 - The course of action determined in Step 3 is communicated to the
customer, and a estimated time to complete is given.
A-5
<PAGE> 22
ATTACHMENT B - ROYALTY/PRICING/FEES
All fees due under this contract are net forty-five (45)-from the invoice date,
unless otherwise agreed to in writing.
Sagent Product Packaging and Pricing
<TABLE>
<S> <C>
Package #1 - Data Mart Population Only Price: $[*]
Package #2 - OLAP Only Price: $[*] for 20 non-Web users
Package #3 - Web OLAP Only Price: $[*] for 20 non-Web users and
unlimited Web users
Package #4 - Basic Integration Price: $[*] for 20 non-Web users
Package #5 - Web Integration Price: $[*] for 20 non-Web users and
unlimited Web users
</TABLE>
Component Pricing
These prices are only available to customers after purchasing one of the above
packages:
Sagent "Data Mart Population: Agent: Not available.
Additional "data mart population" agents are only available by purchasing
additional "data mart population" packages at volume discounts.
<TABLE>
<S> <C>
Sagent "OLAP" Agent: $[*]
Sagent "Integrated" Agent: $[*]
Sagent WebLink: $[*]
Sagent Admin: $[*]
Sagent Design Studio: $[*]
5-pack of Sagent Information Studio: $[*]
5-pack of Sagent Analysis: $[*]
</TABLE>
ROYALTY/PRICING
Unisys shall utilize the following discount schedule to determine pricing for
the initial fifteen (15) months after the execution of this Agreement. Discounts
will be based off of Sagent's then current list price for the products specified
in Attachment A. For products
B-1
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 23
sold internationally, Unisys discounts will be based on Sagent's current
International List Price.
These step based discounts will be reset on an annual basis, and are calculated
based on product revenue generated to Sagent in any one given annual period.
Unisys shall immediately be entitled to increasing discount levels as each
revenue plateau is reached.
<TABLE>
<CAPTION>
STEP PRICING SCHEDULE:
ANNUAL SAGENT REVENUE PERCENT DISCOUNT
<S> <C> <C>
$0 - $665,000 [*]%
$665,001 - $1,470,000 [*]%
$1,470,001 - $2,475,000 [*]%
$2,475,001 - above [*]%
</TABLE>
DEMONSTRATION SOFTWARE COPIES
Unisys will purchase demonstration only copies for internal use at cost,
and will pay for any shipping and all applicable taxes.
Development/Internal Use Licenses
Unisys will purchase development/Internal use licenses at [*]% of the
list price outlined above. Sagent will invoice, and Unisys authorizes
Sagent to bill Unisys for two (2) existing in-house development licenses
plus maintenance and support.
End users may make backup copies as specified in the Sagent End-User License
Agreement including in Sagent's packaging. Attached as Exhibit 3 is the
standard Sagent End-User License Agreement and attached as Exhibit 4 is
the standard Sagent Maintenance and Support Agreement.
SUPPORT & PROFESSIONAL/TECHNICAL SERVICES PRICING/FEES
WHEN SAGENT PROVIDES UNISYS END-USER SUPPORT
Sagent shall provide Unisys' End-User with Level 1, Level 2 and Level 3 Support.
Sagent shall also provide maintenance and upgrade product releases to Unisys
End-Users.
Unisys End User must pay annual support fees as follows:
Sagent provides Level 1,Level 2, and Level 3 support during normal business
hours, Monday - Friday, 6 AM - 5 PM Pacific Time - [*]% of product list price.
or
Sagent provides Level 1, Level 2, and Level 3 support 24 hours a day, 7 days a
week $[*] per year
B-2
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 24
i. WHEN UNISYS PROVIDES UNISYS END-USER SUPPORT
Unisys shall provide "Level 1 Support", and Sagent shall supply "Level 2
Support" and/or "Level 3 Support".
"Level 1 Support" shall mean assistance to customers' non-technical questions,
such as shipment status and licensing issues, and technical questions that can
be solved from lists of known problems and frequently asked questions, including
basic customer questions regarding release information, basic product features
and functionality.
"Level 2 Support" shall mean assistance to customer cases which are deemed too
difficult or involved to be handled by under Level 1 Support and include cases
involving in-depth research or problem solving regarding product features,
operations, or functionality.
"Level 3 Support" shall mean assistance to customer cases which are deemed to
difficult or involved to be handled by Level 2 Support and include cases
involving the reproduction of high severity/difficulty issues, those which
require verification of problem reproductions developed by Level 2 Support
staff, and those which involve undocumented product features or functionality.
Unisys must pay annual support fees as follows:
Sagent provides Level 2 and/or Level 3 support during normal business hours,
Monday Friday, 6 AM - 5 PM Pacific Time (includes one training class for Unisys
Support organization) - $[ * ] per year
or
Sagent provides Level 2.and/or Level 3 support, 24 hours a day, 7 days a week
(includes one training class for Unisys Support Organization) - $[ * ] per
year
Unisys provides product upgrades directly to its customers through a gold disk
program $[ * ] per year or [ * ]% of product list price per customer license.
ii. DEVELOPMENT LICENSE MAINTENANCE AGREEMENT FEES
Annual maintenance and support fees for any Development License purchased by
Unisys shall be equal to [ * ]% of the then current list price for each
development license purchased, or [ * ]% of the purchase price of the
Development Site License.
iii. DEVELOPMENT AND CERTIFICATION FEEL
B-3
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 25
Sagent will provide development and certification for interfaces to Unisys data
management systems not to exceed $[ * ] per interface.
TRAINING FEES
TRAINING CLASSES are $[ * ] per day for up to 10 participants, plus any related
travel or business expenses incurred. Should a training class exceed 10
participants, then an additional fee of $[ * ] per student will be charged.
rates.
CONSULTING FEES
CONSULTING is available from Sagent for a fee of $[ * ] per day (8 hours)
plus any related travel or business expenses.
B-4
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 26
ATTACHMENT C - UNISYS TRAVEL POLICY
UNISYS TRAVEL POLICY
Lodging: Accommodations shall be selected in accordance with the hotels
and the corresponding rates indicated in the Unisys Hotel
Directory, whenever possible.
The itemized hotel bill must be submitted as a receipt.
Meals: The cost of all meals will be reimbursed on an actual/reasonable
basis, except meals provided free of charge on airlines, at
hotels, at Unisys facilities, at Unisys sponsored meetings, etc.
Meals provided free of charge shall be itemized as such. Any meal
cost of ten dollars ($10) or greater must be supported with a
charge card or otherwise valid receipt.
Car Rental: The rental of an automobile at a rate in excess of major rental
agency rates for standard automobiles is prohibited. The itemized
car rental agreement form must be submitted as a receipt.
Travel: All personnel must travel by coach or economy class for air and
rail travel. Unisys authorized travel of personnel by private
auto shall be compensated at the rate of twenty-one cents ($0.21)
per mile, plus tolls and parking fees. The ticket form for air or
rail travel must be submitted as a receipt.
The above information is provided as a guideline and shall be adhered to
whenever possible. However, all reasonable, actual expenses incurred which are
submitted and supported by appropriate receipts (any expense of ten dollars
($10) or greater must be supported with a charge card or otherwise valid
receipt) shall be reimbursed.
C-1
<PAGE> 27
ATTACHMENT D - INSURANCE REQUIREMENTS
PROVIDER shall maintain Worker's Compensation and Employer's Liability Insurance
upon its employees as required by law. PROVIDER shall also maintain
Comprehensive Liability Insurance for all operations necessary and incidental to
providing Services pursuant to this Agreement including coverage of all
automobile exposure, all property liability exposure and contractual liability
exposure. PROVIDER shall maintain insurance to at least the following minimum
amounts:
1. Worker's Compensation with Emit of statutory amount;
2. Employer's Liability Insurance with limit of one hundred thousand
dollars ($100,000);
3. Comprehensive Automobile Liability Insurance, with a combined single
limit of one million dollars ($1,000,000) for bodily injury, death or
property damage arising from any one occurrence; and
4. Comprehensive General Liability including Broad Form Contractual and
Completed Operations, with a combined single limit of one million
dollars ($1,000,000) for bodily injury, death or property damage arising
from any one occurrence.
Such policies shall name Unisys as an additional insured and provide that
coverage may not be canceled without ten (10) days prior written notice to
Unisys. Such insurance. shall not be deemed a limitation of any liability of
PROVIDER, but PROVIDER shall furnish the Unisys Contract Administrator with
certificates of insurance in a form acceptable to Unisys and prior to the
furnisl1ing of Services under this Agreement.
Such insurance shall be primary, not contributing with, and not in excess of,
coverage which Unisys may carry. The insurance afforded by these policies
applies separately to each insured against whom claim is made or suit is
brought in the same manner as such insured would be covered if the policy
insured only such party. The inclusion of such additional insured shall not
increase the policy limits.
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<PAGE> 28
Sagent Technology Training Program
CERTIFIED TRAINING PROGRAM
Sagent Technology, Inc. founded in June 1995, has developed a high
performance, integrated solution for Windows NT-based data marts.
Sagent's solution consists of a series of desktop modules that allow
users to query and analyze data stored in relational based data marts,
and an application server that provides a number of services to
effectively build and manage these data marts.
In order for Sagent's customers to effectively use the integrated data
mart solution, Sagent will work with a selected group of training
partners to ensure consistent high quality education. Sagent will focus
the building of training partnerships around several key goals. These
goals include:
o Ensure Sagent concepts and tools are taught accurately
and professionally.
o Provide customers with training in regionalized or on
site locations.
o Provide customers with training from reputable,
experienced Data. Warehousing consulting firms that wish
to deliver Sagent Training.
Sagent wants to ensure that our customers are receiving the highest
quality training available in the industry. Delivery of effective
training requires that Sagent's training partners are able to not only
deliver high quality education services, but additionally, can provide
necessary consulting services and on site implementation services in
helping to deliver data marts or data warehouses. This ability to
provide value added offerings to Sagent's technology will require that
our training partners are able to fulfill the following requirements
before delivering Sagent Training.
o Training Partners will first become Sagent Consulting
Partners.
o Training Partners must complete the Training
Certification Process.
o Training Partners will deliver customer training with
Certified Sagent Trainers.
o Training Partners will use the most current, official
Sagent Training Materials
o Training Partners will pay the necessary fees and keep
their accounts current.
o Training Partners agree to sponsor their Certified
Trainers through additional certification, when
necessary, to update trainer's skills and product
knowledge.
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Certification Process
Sagent's process for training providers will consist of three phases.
These phases are required in order to successfully deliver high quality
training to Sagent's customers. Certification will be provided on a
course by course basis. The phases necessary for each courses include:
o ATTEND SAGENT TRAINING CLASS.
This phase allows the candidate instructor to build foundation
of understanding in Sagent's courseware and technology. The
candidate instructor(s) will attend a Sagent class as if they
were a student, this will allows these candidates to listen and
learn about Sagent concepts and products.
o CO-TEACH SAGENT COURSE
This phase requires the candidate instructor to co-teach a
Sagent Teaching course with a Sagent Trainer. Candidates must
deliver at least 50% of each training day during this phase.
o TEACH THE SAGENT COURSE.
This phase requires the candidate instructor to completely teach
a training course in the presence of a Sagent instructor. -
Once the three phases are completed for each course, the candidate
instructor is then certified to teach the course(s) to Sagent's
customers.
CERTIFICATION PRICING - $ [*]
The entire certification cost for the three-phase process for all three
courses is $15,000. This pricing will include the following:
(1) SEAT IN A SAGENT TRAINING COURSE
(1) SEAT IN A SAGENT CO-TEACH TRAINING COURSE
(1) SEAT IN A PARTNER HELD TRAINING COURSE
Note: Travel and Expenses is not included in the certification pricing
TRAINING MATERIALS FOR PARTNER HELD COURSES: ONE TIME FEE $ [*]
Note: Many of our Training Partners may currently offer a class similar
to the Concepts of Data Marts and Dimensional Modeling class. Upon
approval by Sagent's Training Director, a similar class may be
substituted.
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<PAGE> 30
ANNUAL FEE
o An annual fee of $[*] will be charged to cover the Sagent
costs of materials development, class development, class
scheduling and class registration. This fee is due upon each
anniversary of Training Partner Certification.
Sagent's Class Offerings
For the first version of Sagent's product line, Sagent Training will
include the following three classes:
o Concepts of Data Marts and Dimensional Modeling (1 Day). This
class provides the basic concepts of Data Warehousing and will
focus on general database design, performance, modeling, and
industry knowledge for Sagent corporate clients who want a
fundamental understanding of star schemas, data marts, and the
steps necessary to convert data from operational schemas to
query optimized schemas.
o Introduction to Sagent Information Studio (1 Day). This class is
for the non-technical Sagent user who needs an understanding in
how to navigate and effectively use Sagent's Information Studio
to retrieve, save, schedule, and share corporate information
from the data mart. This class requires no knowledge of
Structure Query Language (SQL) or database design concepts.
o Introduction to Sagent Administration and Design (1 Day).- This
class is for the technical Sagent user who will be involved in
installing, configuring, and maintaining the Sagent Data Mart
Server. This class is also focused on helping the
Administrator/Designer with the ability to create and distribute
Sagent Base Views and Meta Views. Information will be provided
regarding the Data Flow Editor and its use in extracting from
operational and data warehouse data sources, and populating data
mart data sources.
Sagent Training Partner Program Contract
TRAINING COSTS
COURSEWARE DEVELOPMENT [*] FEE
Train the Trainer Class on Data Extraction (4 Months additional
Development Effort)
Data Mart Design (Star Schemas)
Building Base Views
Building Meta Views
Building Data Transformation Plans
Building Data Movement Transforms
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<PAGE> 31
Building New Transforms
Sagent Data Mart Administration
COURSEWARE ANNUAL MAINTENANCE $[*] FEE
Reselling of courseware on a per student royalty basis $[*] per
student
COURSEWARE ANNUAL MAINTENANCE $[*] PER YEAR
TRAIN THE TRAINER CERTIFICATION PROCESS $[*] PER TRAINER
Sagent's process for training and certifying training providers will
consist of three phases. These phases are required in order to
successfully deliver high quality training to Sagent's customers.
Certification will be provided on a course by course basis. The phases
necessary for each courses include:
o ATTEND SAGENT TRAINING CLASS.
This phase allows the candidate instructor to build foundation
of understanding in Sagent's courseware and technology. The
candidate instructor(s) will attend a Sagent class as if they
were a student, this will allows these candidates to listen and
learn about Sagent concepts and products.
o CO-TEACH SAGENT COURSE
This phase requires the candidate instructor to co-teach a
Sagent Teaching course with a Sagent Trainer. Candidates must
deliver at least [*]% of each training day during this phase.
o TEACH THE SAGENT COURSE.
This phase requires the candidate instructor to completely teach
a training course in the presence of a Sagent instructor. Once
the three phases are completed for each course, the candidate
instructor is then certified to teach the course(s) to Sagent's
customers.
TRAINING POLICY
On-site Training
o Only The Sagent Data Mart Solution class is offered for on-site
training.
o This class can provide emphasis for either Data Movement or OLAP
if required.
o Scheduling for these classes will depend on the trainers
availability. Refer to the Sagent Training Schedule for dates
trainer is not available for on-site training.
o Purchase Orders for On-site Training must clearly state that the
trainer's travel expenses are the responsibility of the
customer.
Enrollment
o Please submit enrollment forms as far in advance as possible to
ensure seating availability for Sagent Corporate classes and to
ensure trainer availability for On-site Training.
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<PAGE> 32
Attachment E - Sagent Training Description
o To secure enrollment in a class, Sagent must receive your completed
enrollment form and the enrollment fee.
o Completed enrollment forms should be sent to your Sagent Sales
Representative. The preferred method is via email, but faxed or mailed
forms are acceptable.
o For the enrollment fee, please enclose a copy of your purchase order.
Rescheduling
o Students may reschedule class dates up to seven (7) business days
prior to the class start date. After this deadline, a $100 processing
fee is required to reschedule a class.
Cancellation Policy
o On-site Classes
1. No charge if canceled seven (7) business days or more prior to
the class start date.
2. 50% charge if canceled less than seven (7) business days prior
to the class start date.
o Classes at Sagent Corporate
1. Group cancellations (3 or more students): Same policy as
on-site classes.
2. Individual cancellations: No charge if canceled seven (7)
business days or more prior to the class start date.
3. Cancellations received less seven (7) business days prior to
the class start date will be charged 50%
o Course Cancellation
1. Sagent reserves the right to cancel or reschedule any course
at its discretion.
2. In the event of class cancellation, students will be
rescheduled for the class or payment will be fully refunded.
3. If Sagent is forced to cancel a course for any reason,
liability is limited to the return of the paid enrollment fee.
COURSE OBJECTIVES
At the end of this course, participants should be able to:
o Create & optimize Plans to access, analyze, and collaborate on data
o Use Sagent Analysis to summarize results by multiple dimensions
o Create & optimize graphical, aggregate, & logical views of databases to
optimize querying
o Manage security and environment of a data mart
o Understand the optimal design for data marts
o Extract data from a source database and load it into a target data mart
o Configure WebLink to access the data mart over the Internet
COURSE OUTLINE
DAY ONE: INFORMATION STUDIO AND ANALYSIS
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<PAGE> 33
Attachment E - Sagent Training Description
INTRODUCTION AND CONCEPTS OF SAGENT DATA MART SOLUTION
INFORMATION STUDIO: GETTING STARTED WITH PLANS
INFORMATION STUDIO: ADVANCED WORK WITH PLANS
OVERVIEW OF SAGENT ANALYSIS
USING ANALYSIS WITH BASE FEATURES
DAY TWO: DESIGN STUDIO, SAGENT ADMIN & SAGENT WEBLINK
WHY DATA MARTS
DESIGNING BASEVIEWS
DESIGNING METAVIEWS
TRANSFORMS
LOADING DATA MARTS
BUILDING A STARMART
USING VBA WITH SAGENT PLANS
SAGENT PLANNING
SAGENT ADMIN REPOSITORIES
SAGENT ADMIN USERS
SAGENT ADMIN AGENTS
WEBLINK
INTRODUCTION TO INFORMATION STUDIO
PRICE
Sagent Corporate Only - $[*]/student.
COURSE SUMMARY
This class introduces the students to Sagent's End User Tool, Information
Studio. Via the use of hands-on labs, students will learn how to retrieve data
in a Data Mart or external database using Plans and the tools that allow for
the sorting, filtering, formatting and sharing of the Plan results.
TRAINING AUDIENCE
This course is intended for:
o End Users
o Business Professionals
o Department Managers
o Project Managers
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Attachment E - Sagent Training Description
COURSE PREREQUISITES
REQUIRED
o Familiarity with Microsoft Windows environment
DURATION
1 day
COURSE OBJECTIVES
At the end of this course, participants should be able to
o Create & optimize Plans to access, analyze, and collaborate on data
o Use Sagent Analysis to summarize results by multiple dimensions
COURSE OUTLINE
DAY ONE: INFORMATION STUDIO
INTRODUCTION AND CONCEPTS OF SAGENT DATA MART SOLUTION
INFORMATION STUDIO: GETTING STARTED WITH PLANS
INFORMATION STUDIO: ADVANCED WORK WITH PLANS
OVERVIEW OF SAGENT ANALYSIS
USING ANALYSIS WITH BASE FEATURES
THE SAGENT DATA MART SOLUTION
PRICE
SAGENT CORPORATE - $[*]/student
ON-SITE TRAINING - $[*] plus Instructor's Travel Expenses for up to 10
students. This price includes emphasizing training in accordance with Data
Movement or OLAP packages.
COURSE SUMMARY
The first day of this two day class introduces the students to Sagent's End User
Tool, Information Studio. Via the use of hands-on labs, students will learn how
to retrieve data in a Data Mart or external database using Plans and the tools
that allow for the sorting, filtering, formatting and sharing of the Plan
results. Participants will learn how to use the Analysis tool to summarize the
results by multiple dimensions and display them in Crosstab or Chart form. The
skills learned on the first day of class will be used as the building blocks of
the second day of the course. The second day focuses on the use of Sagent Tools
for configuring and managing Sagent Data Marts. Administrators will learn how
to optimize the Data Mart environment by using Sagent Admin to configure the
Repository and the agents, and also to control security of the Data Mart by
defining users, groups, and permissions. Also covered on the second day of this
course is focus on the planning, implementation and population of a Data Mart.
Participants will be able to create Data Mart Population Plans using Special
Transforms to restructure data from the OLTP system and will be able to
schedule Plans for automatically updating the Data Mart.
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<PAGE> 35
Attachment E - Sagent Training Description
Additionally, participants will learn how to configure user access to Sagent
objects through a Web browser.
TRAINING AUDIENCE
This course is intended for:
o Project Managers
o Database Administrators
o Data Mart Designers
o System Administrators
COURSE PREREQUISITES
REQUIRED
o Familiarity with Microsoft Windows environment
RECOMMENDED
o Network environment
o Security Concepts
o Database concepts
o Database schema design
o Dimensional modeling
o Familiarity with the Internet
DURATION
2 days
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Attachment E - Sagent Training Description
[LOGO] TRAINING ENROLLMENT FORM
Please fill out SECTION 1 - CUSTOMER INFORMATION COMPLETELY
- --------------------------------------------------------------------------------
SECTION 1 - CUSTOMER INFORMATION Date
- --------------------------------------------------------------------------------
Customer
Name
- --------------------------------------------------------------------------------
Street
Address
- --------------------------------------------------------------------------------
City,
State, Zip
- --------------------------------------------------------------------------------
Customer Phone
Contact Number
- --------------------------------------------------------------------------------
Sagent Sales
Representative
- --------------------------------------------------------------------------------
To enroll students in classes to be taught at the Sagent Corporate Office, fill
out SECTION 2 - SAGENT CORPORATE CLASSES and leave Section 3 blank. To request
classes to be held at your facility, skip Section 2 and fill out SECTION 3 -
ON-SITE TRAINING. Seating for Corporate Classes is limited. Please select a
first and second choice of training dates from the Sagent Training Sagent
Training Schedule.
- --------------------------------------------------------------------------------
SECTION 2 - SAGENT CORPORATE CLASSES
- --------------------------------------------------------------------------------
INTRODUCTION TO INFORMATION STUDIO THE SAGENT DATA MART SOLUTION
- --------------------------------------------------------------------------------
Number of Number of
Students Students
- --------------------------------------------------------------------------------
1st Choice 1st Choice
Training Date Training Dates
- --------------------------------------------------------------------------------
2nd Choice 2nd Choice
Training Date Training Dates
- --------------------------------------------------------------------------------
Scheduling for on-site courses will depend on the trainer's availability.
Trainer is not available for on-site training on the dates shown on the Sagent
Training Schedule. Please select three different sets of training dates and
list them in order of preference.
- --------------------------------------------------------------------------------
SECTION 3 - ON-SITE TRAINING FOR THE SAGENT DATA MART SOLUTION
- --------------------------------------------------------------------------------
Package [ ]None [ ]Data Population [ ]OLAP
Emphasis
- --------------------------------------------------------------------------------
Number of
Students
- --------------------------------------------------------------------------------
1st Choice
Training Dates
- --------------------------------------------------------------------------------
2nd Choice
Training Dates
- --------------------------------------------------------------------------------
3rd Choice
Training Dates
- --------------------------------------------------------------------------------
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<PAGE> 37
EXHIBIT 1
SOFTWARE DATA SHEETS & DEFINITIONS
1. Sagent Data Mart Server
The Sagent Data Mart Solution
The SagentO Data Mart Solution is the first fully integrated family of products
for populating, managing, and accessing Windows NT-based data marts. Sagent's
unique Data Flow Technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart
Server, Sagent Admin, Sagent Design StudioO, Sagent Information StudioO and
Sagent WebLink.
Sagent Data Mart Server
The Sagent Data Mart Server is an application server that provides a set
of services "wrapped around" a Windows NT-based data mart stored in a
relational database such as Microsoft SQL Server, Oracle or Sybase. The
Sagent Data Mart Server features a multi-threaded, agent-based
architecture and an open, RDBMS-based repository.
Multi-threaded, Agent-based Architecture for High Performance
Information Access
Explicitly designed for the 32-bit, multi-threaded architecture of the
Windows NT operating system, the Sagent Data Mart Server employs
sophisticated software agents that enable high-performance and intuitive
information access. Sagent agents can perform multiple tasks
simultaneously and in the background, thereby allowing users to submit
several requests at once, or to work on other tasks while the Sagent
Data Mart Server executes their requests.
Data Flow Plan Processing
The Data Mart Server runs all Data Flow Plans created by Sagent Design
Studio and Sagent Information Studio. This application server takes full
advantage of multi-threading to run multiple data processing steps at
one time, completing tasks faster. Sagent's server also improves
performance by processing data on the server, avoiding any issues of
network bandwidth between the client and the server.
Results Splicing
Often the fastest way to answer a business question is to run multiple
SQL statements in parallel rather than submitting one large, complex SQL
statement. The Sagent Data Mart Server can run multiple, simple SQL
statements to get information from a data mart and then "splice" the
results together before sending them to the desktop. This results in
vastly improved query performance.
Aggregate Navigation
Instead of always calculating aggregates on the fly, the Sagent Data
Mart Server can access pre-aggregated information in the data mart to
answer users' requests in the fastest way possible. Database
administrators can establish hierarchies of pre-aggregated values for
the Data Mart Server to use. Sagent also calculates aggregates on the
fly, providing many benefits of both multi dimensional and relational
databases.
Exhibit 1-1
<PAGE> 38
Group Caching
Sagent caches in memory the result sets of end users' requests for
information. This cache can be shared within a workgroup, enabling users
to retrieve commonly accessed information virtually instantaneously. For
example, if one user requests the weekly sales data from the Sagent Data
Mart Server, the next user in that workgroup, to request the same sales
data can receive the results back almost instantly, without having to
pay the price of re-executing the request.
Integration with NT Scheduling Service
Sagent users can schedule both data mart population plans as well as end
user plans. These are run by the Sagent Server through the Windows NT
scheduling service.
Centralized, RDBMS-based Repository for Easy Administration
The Sagent Data Mart Server leverages an integrated repository to
provide central storage of all items in the Sagent environment,
including:
o Metadata ("BaseViews" and "MetaViews")
o Requests for information ("Plans")
o Result sets ("Snaps")
o Data transforms
o Security information
The Sagent Repository is stored completely in relational database
tables. Users can easily share information stored in this central
location. This lets Sagent administrators manage its contents without
having to learn a proprietary file structure. Also, users can easily
share information stored in this central location. In addition, the
Sagent Repository's relational structure enables the easy exchange of
metadata with other products.
Features
o Multi-threaded Architecture
o Software Agents
o Results Splicing
o Aggregate Navigation
o Group Caching
o RDBMS-based Repository
o Fully Managed by Sagent Admin Tool
o Data Mart Design through Sagent Design Studio
Supported Databases
Information Access
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
o Red Brick
o Sybase 10, 1 1 o ODBC to DB2
o Informix
o others
Repository Databases
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
Exhibit 1-2
<PAGE> 39
o Sybase 10, 1 1
System Requirements
Hardware
o Intel-Based processor o Required 486 processor or higher
o Recommended Pentium Pro processor or higher
Operating System
o Microsoft Windows NT 3.5 or above
Memory
o Recommended 128+ MB for 20 users
Disk Space
o Recommended: 250 Mb (Not including relational database)
Network Protocol Support
o Named Pipes
o TCP/IP
2. Sagent Design Studio(TM)
The Sagent Data Mart Solution
The SagentO Data Mart Solution is the first fully integrated family of products
for populating, managing, and accessing Windows NT-based data marts. Sagent's
unique Data Flow Technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart
Server, Sagent Admin, Sagent Design StudioO, Sagent Information StudioO and
Sagent WebLink.
Sagent Design Studio
Sagent Design Studio provides an intuitive and graphical environment for data
mart population, metadata creation and the delivery of powerful information to
users. Fast and Easy Data Mart Population.
Scheduled Population
Sagent Design Studio lets you automate population of data marts from OLAP
systems and corporate data warehouses using Sagent's innovative Data Flow
Technology. A Data Flow Plan is a graphical representation of the process of
accessing, transforming and loading or displaying data. Plans can output
information to a user's desktop or batch load data into relational database
tables. Plans can be easily scheduled to populate and refresh your data mart.
Star Schema Population
Sagent supports any relational database schema you choose to use. For maximum
performance, transform routines designed for easily converting data from an OLTP
database into a star schema are provided for you. Transforms include:
o Time Generation for Dimension Tables
o Key Generation for Dimension Tables
o Key Lookup for Fact Tables
o Time Lookup for Fact Tables
Custom Data Transformation
Sagent has integrated Microsoft Visual Basic for Applications and Microsoft
Visual 1 Basic Scripting Edition (VB Script) as its scripting languages so you
can easily develop custom Transforms. Or use your favorite programming tool such
as Visual Basic or C++ to customize a Sagent Data Mart that meets your specific
needs. Sagent also ships with many
Exhibit 1-3
<PAGE> 40
pre-built Transforms that you can simply drag and drop into a plan. Or you can
easily customize Sagent Transforms to meet your requirements.
Intuitive Metadata Creation
The complexities of relational database schemas are easily hidden from end users
by creating metadata layers including BaseViews, logical and graphical displays
of the physical structure of a database, and MetaViews, business representations
for end users to request information.
To create a BaseView, select tables, columns and joins of a database that win be
used to create the MetaViews. Join Groups can also be defined to resolve join
path conflicts. MetaView components can include renamed columns and calculated
columns such as custom formulas and aggregates grouped by business categories.
Multiple MetaViews can be created from one BaseView to give groups different
views of the same data. MetaViews can span multiple data marts to provide end
users with a seamless view of more than one database.
Delivering Powerful Information to Users
Graphically specify actions that would be difficult, or impossible, to do using
SQL. For example, a Data Flow Plan can access data from one or more data marts
using SQL. Then a Sagent standard, or custom transform, can be added to the Plan
to perform functions that SQL can't handle, such as ranking or running averages.
Results can be delivered to an end user's desktop, loaded into a Microsoft Excel
spreadsheet, or dispatched in an electronic mail message.
Features
o Data Flow Plans
o Data Mart Loading Components
o SQL Query
o Join
o Splitter
o Union
o Star Schema Transformation Batch Load
o Save to Table
o Data Calculation
o Rank
o Moving Average
o Moving Total
o Percent of Total
o Running Average
o Running totals
o Column Select
o Memory Sort (outside database)
o Sagent Scripting Components
o VB Script Source - Uses any OLE object as a data source. For
example, use an Access file or an Excel spreadsheet to input
data to a Data Flow Plan.
o VB Script Sink - Use any OLE object as an output display in a
Data Flow Plan. For example, write a script to send the data to
an Excel spreadsheet, an Access database, or a Microsoft Word
document.
o VB Script In Place - Takes records as input, performs a process
and outputs the same number of records to another step.
o VB Script Copy --Takes records as input and lets you output
those plus additional columns.
o C++, Delphi and Visual Basic Custom Components
o Metadata Creation
o BaseViews
Exhibit 1-4
<PAGE> 41
o Up-front Table Selection
o Add/Delete Tables
o Add/Delete Columns
o Add/Delete Joins
o Concatenated Key Support
o Create Join Groups
o Navigator for Viewing Databases
o MetaViews
o Create Multiple Views from Same Data
o A MetaView can Span Multiple Data Marts
o Create Calculated Columns
o Categories of Business Terms within each MetaView
o Importing/Exporting of Sagent Objects, between Repositories
o Search Engine
o Plans
o Snaps
o Filters
o Sorting
o Grouping by Aggregates
o Count
o Count Distinct
o Sum
o Minimum
o Maximum
o Average
o Publish and Subscribe of Plans and Snaps
o Autosubscribe o Live Collaboration
o Scheduling
o Staging Area
o Standard Formatting
Supported Databases
Information Access
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
o Red Brick
o Sybase 10, 11
o ODBC to DB2
o others
Repository Databases
o Microsoft SQL Server 6.5
o Oracle 7.2, 7.3
o Sybase 10, 11
System Requirements
Hardware
o Intel-Based processor
o Required 486 processor or higher
o Recommended Pentium processor or higher
Operating System
o Microsoft Windows 95
o Microsoft Windows NT 3.5 or higher
Memory for client workstation
o Required 16 Mb
Network Protocol Support
Exhibit 1-5
<PAGE> 42
o Named Pipes
o TCP/IP
Exhibit 1-6
<PAGE> 43
3. Sagent Information Studio
The Sagent Data Mart Solution
The SagentO Data Mart Solution is the first fully integrated family of products
for populating, managing, and accessing Windows NT(R)-based data marts. Sagent's
unique Data Flow Technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart,
Sagent Admin, Sagent Design StudioO, Sagent Information StudioO and Sagent
WebLink.
Sagent Information Studio
Sagent Information Studio is a graphical tool that lets end users
quickly and easily access and share information stored in Sagent Data
Marts.
Intuitive Information Access
Sagent Information Studio provides an intuitive environment for
end-users to access information in Sagent data marts. Users build
requests for information by choosing from a list of business terms in
the MetaView-a business representation of the data stored in the
database. They don't need to understand where the information is stored
or how it is related. And they are shielded from the complexities of the
database structure. The Sagent server joins the information. A user can
sort, filter, aggregate and manipulate the result set, using live data.
Sagent Searching
Since a Data Mart can contain a large number of records or Parts, Sagent
Information Studio includes a search engine to help users easily find
the information they need. Key words can be associated with Plans and
Snaps to help organize and easily find items of interest.
Plans and Snaps
Sagent Information Studio provides two methods for users to save
information requests. First they can save the requests or "Plans" for
gathering the information. Plans can be executed at any time to get the
most recent data from the Data Mart. In addition, Plans can be shared
with other users and can be scheduled to run at specified times. A
Sagent user can also save the results as a Snap. Snaps are snapshots of
data from a particular point in time. Snaps deliver huge performance and
productivity gains. By saving the results of a request as a Snap, users
can quickly access data without having to run their request again. Snaps
can also be distributed to other users and can be used as a starting
point for further analysis. Since Snaps are stored in relational
database tables, they can be re-queried against-just as with any
database table.
Tight Integration with Microsoft(R) Excel(TM)
Sagent Information Studio offers tight and unique integration with
Microsoft Excel. To place the results of an information request into a
Microsoft Excel spreadsheet, Information Studio users just click a
button. An Excel spreadsheet, with the results in place, automatically
becomes a part of the Information Studio workspace. This innovative
capability enables users to use both Information Studio and Excel from a
single environment.
Powerful Information Access
Sagent Information Studio also features powerful utilities for
delivering critical information to end users in flexible and efficient
new ways. Using the Design
Exhibit 1-7
<PAGE> 44
Studio's Data Flow Plans, power users can specify actions that would be
difficult, if not impossible, to do with SQL. Administrators can hide
the Data Flow functionality from novice users to avoid confusion and
Information Studio users may simply run these plans. Or sophisticated
users can create Data Flow plans themselves. (See the Design Studio Data
Sheet.)
Workgroup Sharing and Collaboration
Sagent Information Studio makes it easy for groups of users to share
information and collaborate to reach better business decisions.
Publish and Subscribe
With Sagent Information Studio, users can publish Plans and Snaps for
others to easily access by subscribing. Once users have subscribed to an
item, Sagent Information Studio automatically notifies them of all
changes made to it by the publisher. This feature is particularly
important for enforcing standardization among users and ensuring that
all members of a workgroup have access to consistent and timely
information.
Live Collaboration
Sagent Information Studio's live collaboration facilities let groups of
users work on Sagent components simultaneously. By "broadcasting" to
other users, a Sagent Information Studio user can allow others to view
the information that is in their workspace. This capability is ideal for
workgroup decision making and for help desk environments.
Features
o Data Flow Plans
o SQL Query
o Join
o Splitter
o Union
o Moving Average
o Moving Total
o Running Average
o Running Total
o Column Select
o Sagent Scripting Components
o VB Script Source-Uses any OLE object as a data source. For
example, use an Access file or an Excel spreadsheet to input
data to a Data Flow Plan.
o VB Script Sink-Use any OLE object as an output display in a
Data-Flow Plan. For example, write a script to send the data to
an Excel spreadsheet, an Access database, or a Microsoft Word
document.
o VB Script InPlace-Takes records as input, performs a process and
outputs the same number of records to another step.
o VB Script Copy-Takes records as input and lets you output those
plus additional columns.
o C++, Delphi and Visual Basic Custom Components
o Ad-hoc Information Requests
o English-like Filters
o Sorting
o Calculated Columns
o Aggregates
Exhibit 1-8
<PAGE> 45
o Count
o Sum
o Minimum
o Maximum
o Average
o Auto-sizing of Columns
o Search Engine
o "Plans"
o "Snaps"
o Scheduling
o Access to Multiple MetaViews
o Run Multiple plans at one time
o Integration with Microsoft Excel
o Standard Formatting
o Live Collaboration
o Publish and Subscribe
o Printing
System Requirements
Hardware
o Intel-Based processor
o 486 processor or higher
Operating System
o Microsoft Windows 95
o Microsoft Windows NT 3.5 or above
Memory
o Recommended 24 Mb
Disk Space
o Maximum Required: 25 Mb
Network Protocol Support
o Named Pipes
o TCP/IP
Exhibit 1-9
<PAGE> 46
4. Sagent WebLink
The Sagent Data Mart Solution
The SagentO Data Mart Solution is the first fully integrated family of
products for populating, managing, and accessing Windows NT-based data
marts. Sagent's unique Data Flow Technology let's users process data
beyond SQL to create more powerful sets of information than ever before.
It includes the Sagent Data Mart Server, Sagent Admin, Sagent Design
StudioO , Sagent Information StudioO and Sagent WebLink.
Sagent WebLink
Sagent WebLink is a server-based information access tool that gives
users of Web browsers access to items developed within the Sagent Data
Mart Solution. It provides out-of-the-box functionality with a pre-built
Intranet access page. Use this page to access information in the Sagent
Data Mart, customize it, or create your own custom interface quickly and
easily with HTML.
Easy Distribution Mechanism
Sagent WebLink enables the easy distribution of Sagent components
("Plans" and "Snaps") to users of Web browsers such as Microsoft
Internet Explorer and Netscape Navigator. Sagent WebLink automatically
converts a result set into an HTML table or a Microsoft Excel
spreadsheet.
The Sagent WebLink pages provide a user interface in HTML that is easy
to get up and running. The Sagent WebLink pages are designed using
frames for simple navigation to different types of information, such as
lists of Plans or Snaps. After specific Plan results display, a click on
another hypertext link or a different button displays the next item.
When users click on a hypertext link for a Plan, Sagent WebLink receives
the request and the Plan is executed to retrieve the latest results from
the database. Current results are obtained each time a request is made.
Works with Any Browser on Any Platform
Sagent WebLink provides platform-independent access to information in a
customizable and secure environment. Just like viewing any Web site,
users access information through their Web browsers from any location
and on any platform that supports Internet browsers.
Features
o Execution of "Plans"
o Viewing of "Snaps"
o Respects Security of Sagent Data Mart Server, RDBMS, and
Microsoft and Netscape Web Servers
o Enhanced for Netscape Navigator and Microsoft Internet Explorer
o Output
o HTML Table
o Microsoft Excel
Exhibit 1-10
<PAGE> 47
o Supplied with Sample Web Page
o Open Environment for Designing Custom Web Page
o Sagent WebLink Command Set
o ISAPI DLL for high performance
o Configurable display of results either globally or
individually
System Requirements
Hardware
o No Special Requirements
Operating System
o Microsoft Windows NT 3.5 or above
Memory
o Required Memory 16 Mb
o Recommended 20 Mb
Disk Space
o Required: 25 Mb
Network Protocol Support
o Named Pipes
o TCP/IP
Client Software
o Any HTML 3.0-compliant Web Browser
Server Software
o Microsoft Internet Information Server
o Any Windows NT-based Netscape Server
Exhibit 1-11
<PAGE> 48
5. Sagent Admin
The Sagent Data Mart Solution
The SagentO Data Mart Solution is the first fully integrated family of products
for populating, managing, and accessing Windows NT-based data marts. Sagent's
unique Data Flow technology lets users process data beyond SQL to create more
powerful sets of information than ever before. It includes the Sagent Data Mart
Serer, Sagent Admin, Sagent Design StudioO, Sagent Information StudioO and
Sagent WebLink.
Sagent Admin
Sagent Admin delivers comprehensive management and administration capabilities
for Sagent Data Marts. It provides a centralized mechanism to manage a
distributed network of Sagent Data Marts, and a flexible security model to
administer Sagent users.
Centralized Control of Distributed Data Marts
The Sagent Data Mart Solution uses an RDBMS-based repository to store all data
mart components, including metadata (Base Views and MetaViews), information
requests called Plans, result sets called Snaps, and data transforms. Sagent
Admin provides extensive facilities to manage all Sagent repositories and their
components from one intuitive tree-control interface. By providing a central
point of control for a distributed network of data marts, Sagent Admin combines
the centralized control of a data warehouse with the performance gains of data
marts.
Sagent Admin lets you view and edit many of the properties of each item in the
Sagent Repository to determine ownership of Plans and Snaps, creation dates,
items that are shared among users, the presence of Data Flow Transforms and
other items stored in a repository.
You can easily monitor and control the activity of Sagent Agents on Data Mart
Systems. Sagent Admin displays the resources used and the current activity of
each agent, as well as provides control to stop an agent in progress. Sagent
also provides other administration features such as cache control for better
performance and query governing.
Flexible User Security
Sagent Admin provides a flexible model for controlling user security. Security
can be applied to data and to specific Sagent functionality. Controls maintained
over data access and what features a user can and can not access on their
desktop.
Users, Groups, Roles and Permissions
Sagent Admin lets you easily create users, groups, roles and permissions within
the Sagent environment. Sagent users are defined and then placed within a group.
There are three types of Sagent groups:
o Security Groups - users with permission to access the same data
or MetaViews.
o Cache Groups - users who, for improved system performance, share
commonly accessed results from requests made by members of their
workgroup, that are cached on the Data Mart Server.
o Distribution Groups - users who can share information Plans and
Snaps, through Sagent's Publish and Subscribe feature.
Sagent Admin allows for the creation of Permissions which define what database
information a user can access. Control over what data each user can see is
maintained
Exhibit 1-12
<PAGE> 49
by giving a Security Group permission to access a pre-defined set of MetaViews.
Security Groups can use a "trusted" security schedule where every Sagent user in
a group uses a single database connection, or a mapped scheme where each user
has their own database connection.
Privileges
Sagent users are also defined by Roles. Roles are pre-defined sets of privileges
which give users the right to perform certain functions within the Sagent
environment. Most functions provided by the Sagent Data Mart solution are
associated with a privilege. For example, an end user role may be defined
without the privilege to save a Snap of the Results of a plan or to share
information with other users. A power user role, on the other hand, may have the
privileges to create a snap of information and to Publish their Snap to others
for their use.
Features
o Repository Management
o Add a Repository
o Remove a Repository
o Modify a Repository
o Security
o Set User Properties
o Set Group Properties
o Security Group
o Cache Group
o Distribution Group
o Set Permissions (Data Access
o Set Role Properties (Feature Access
o BaseViews
o MetaViews
o Agent Administration
o Register an Agent
o Start an Agent
o Stop an Agent
o Specify Network Protocol for Agent
o Set Time-out for Agent
o Edit Agent Registry Settings
o Group Cache Management
o Set Cache Size
o Set Cache Policies
o Flush Items from Cache
o List Database Connections in Use
o Stop a Database Query on databases that support it
System Requirements
Hardware
o Intel-Based processors
o 486 processor or higher
Operating System
o Microsoft Windows 95
o Microsoft Windows NT 3.5 or above
Memory
Exhibit 1-13
<PAGE> 50
o Required Memory 16 Mb
o Recommended 24+ Mb
Disk Space
o Required: 25 Mb
Network Protocol Support
o Named Pipes
Exhibit 1-14
<PAGE> 51
6. Sagent Analysis
Sagent Analysis is a business analysis tool that summarizes information by
multiple dimensions so that users can uncover opportunities, trends, and
weaknesses in their business. Results from information requests can be displayed
in Crosstabs or Charts so users can easily examine the same data from different
angles. Sagent Analysis makes business intelligence readily available to anyone
who wants to monitor their business operations.
Multi-Dimensional Views of Data
Sagent Analysis displays multi-dimensional representations of data so that users
can analyze data by dimensions such as sales by product, by region, and by
quarter. These data "FlashCubes(TM)" display as Crosstabs or two-dimensional and
three-dimensional rotating Charts. Crosstabs and Charts are multi-level and can
display any number of business dimensions and measures.
Sagent Analysis automatically creates a Crosstab or Chart from the result set of
an existing information access Plan or Snap shot of data. Users can also build a
Plan or Snap, working directly from an empty Crosstab or Chart. A single result
set can also be displayed in multiple Crosstabs and Charts so that users can
easily tab between the individual displays.
Interactive Pivoting and Drilling
Sagent Analysis provides interactive pivoting and drilling capabilities in
Crosstabs and Charts. Users can pivot data in Crosstabs and Charts, or drill
into the data in any direction to discover new relationships between data sets.
Data can be drilled in an ad-hoc manner or through pre-defined hierarchies set
up by a data designer. An example of a hierarchy is Category, Brand and Product
Name in the Product dimension group. Users can also filter data in a Crosstab
with immediate results so that users view only the data combinations that they
want.
High Performance Analysis
A key aspect of performing complex analysis is the processing of aggregates,
which are summarized data such as totals or averages. Sagent balances the
processing of aggregates between the client and the server for improved
performance. Aggregates can be calculated on the server and then staged on the
desktop in a FlashCube. Because data is staged on the desktop, Crosstabs and
Charts immediately display results when users are drilling, pivoting or
filtering.
Seamless Integration with Sagent Product Line
Sagent Analysis plugs directly into Sagent Design Studio and Information Studio
so users can take advantage of all the benefits of the Sagent Data Mart Solution
without having to switch to another product. The features of Sagent Design
Studio and Information Studio, such as Publish and Subscribe, Scheduling,
creation of Snaps and Internet/Intranet distribution and Data Flow Plans, work
seamlessly with Sagent Analysis.
Exhibit 1-15
<PAGE> 52
Features
o Crosstabs of Multiple Dimensions
o Local Aggregation
o Server Aggregation
o Charting and Graphing
o Two-dimensional
o Three-dimensional Rotating
o Chart Wizard
o Aggregate Functions
o Drilling on Crosstabs and Charts
o Drill Down: Displays the data for the next level of
detail
o Roll Up: Collapses the lower levels of detail
o Skip Drill: Provides a short cut to display a level of a
pre-defined hierarchy
o Pivoting in Crosstabs, Charts and Graphs
o Analysis Filtering
o Multiple Analysis Displays in a Plan or a Snap
o Saving a Cube as a Snap
o Saving a Slice of a Cube as a Table
o Integration with Microsoft Excel
o Creating Crosstabs and Charts From Existing Plans
o Exception Highlighting
o Analysis in Sagent WebLink via ActiveX
o Charts
o Crosstabs
System Requirements
Hardware
o Intel-Based processor
o Required 486 processor or higher
o Recommended Pentium processor or higher
Operating System
o Microsoft Windows 95
Exhibit 1-16
<PAGE> 53
o Microsoft Windows NT 3.51 or above
Memory for client workstation
o Required 16 Mb o Recommended 32 Mb
Disk Space
o Required: 25 Mb
Network Protocol Support
o Named Pipes
o TCP/IP
Exhibit 1-17
<PAGE> 54
Exhibit 2 - Escrow Agreement
[ESCROW AGREEMENT]
AGREEMENT ADDENDUM "A"
TERMS AND CONDITIONS OF ESCROW ACCOUNT
SOURCEFLEX
SOFTWARE ESCROW AGREEMENT
DEVELOPER (SAGENT TECHNOLOGY, INC.) SOURCEFILE
THIS CONTRACT IS A TWO-PARTY AGREEMENT BETWEEN SOURCEFILE AND SAGENT TECHNOLOGY,
INC.. END-USERS MAY SIGN ON TO THIS AGREEMENT AS THEY LICENSE THE TECHNOLOGY
FROM THE SAGENT. THE SOURCEFLEX CONTRACT PROVIDES THE OPPORTUNITY TO SERVE ALL
LICENSEES OF A PARTICULAR SOFTWARE DEVELOPER FOR ONE OR MORE SYSTEMS.
EXHIBIT 2-1
<PAGE> 55
SOURCEFLEX
SOFTWARE SOURCE CODE ESCROW AGREEMENT
SOURCEFILE NUMBER:___7446________
This Software Source Code Escrow Agreement, dated as of January 6, 1997
by and between FileSafe, Inc., a California corporation, doing business as
SourceFile ("SourceFile") located at 1350 West Grand Ave., Oakland, California
94607 and Sagent Technology, Inc., located at 2225 E. Bayshore, Palo Alto, CA
94303 ("Sagent"), and each Beneficiary identified by Depositor to SourceFile as
provided for in Paragraph 3 hereof (each a "Beneficiary", collectively the
"Beneficiaries").
RECITALS:
A. Pursuant to certain software license agreements (each a "License
Agreement", collectively the "License Agreements"), Depositor licenses to
certain licensees certain software in object code form (the "Software"). A
description of each Software effective as of the date hereof, is attached hereto
as Exhibit "A".
B. The Software is the proprietary and confidential information of
Depositor, and Depositor desires to protect such ownership and confidentiality.
C. Depositor desires to ensure the availability to its Beneficiaries of
the source code and all necessary proprietary information related to the
Software (the "Source Material") in the event certain conditions set forth in
Paragraph 4 of this Agreement should occur.
AGREEMENT:
1. DELIVERY OF SOURCE MATERIAL TO SOURCEFILE. Upon execution of this
agreement, Depositor shall deliver to SourceFile a parcel (the "Parcel") sealed
by Depositor, which Depositor represents and warrants contains the Source
Material. . During the course of the Agreement, and at the same time as
revisions to the OBJECT CODE, (including any IMPROVEMENTS, CORRECTIONS,
ENHANCEMENTS, UPGRADES, and UPDATES which PROVIDER is required to incorporate in
the [Software] are delivered by Depositor, Depositor shall deliver to SourceFile
the revised Source Material Escrow Materials SourceFile has no knowledge of, and
makes no representations with respect to, the contents or substance of the
Parcel, the Software or the Source Material. Depositor shall send to SourceFile
a duplicate of the Source Material within three (3) days after receiving written
notice from SourceFile that the Source Material has been destroyed or damaged.
All supplements shall be subject to the terms and provisions of this Agreement.
2. ACKNOWLEDGMENT OF RECEIPT BY SOURCEFILE. SourceFile shall promptly
acknowledge to Depositor and to Beneficiary the receipt of the Parcel and any
supplements to the Source Material which are added to the Parcel. Depositor
shall provide supplements to the Source Material for each version of the
Software. AR such supplements shall be subject to the terms and provisions of
this Agreement. SourceFile will notify Beneficiary and Depositor of each update
to the Source Material. Such notification will be sent via certified mail,
return receipt required. SourceFile will provide an account status report to the
Beneficiary and Depositor on a semi-annual basis.
3. ACKNOWLEDGMENT BY BENEFICIARIES. For purposes of this Agreement, a
licensee of the Software under a fully executed License Agreement, shall be a
Beneficiary hereunder
Exhibit 2-2
<PAGE> 56
with such rights of a Beneficiary as set forth herein, only if (i) such licensee
has sent to SourceFile a fully executed copy of the form of acknowledgment
attached hereto as Exhibit "B", in which such licensee accepts the terms of this
Agreement and (ii) all fees are paid. The names and addresses of the
Beneficiaries shall be described in one or more schedules of Beneficiaries. A
schedule of Beneficiaries effective as of the date of this Agreement is attached
hereto as Exhibit "C". All other licensees of the Software shall have no rights
hereunder and SourceFile shall have no duties to such licensees.
4. TERMS AND CONDITIONS OF THE SOURCE MATERIAL ESCROW. The Parcel shall
be held by SourceFile upon the following terms and conditions:
(i) Beneficiary's right to possession of the Source Code is subject
to Beneficiary's execution of a registration document with
SourceFile and payment to Sagent of an annual fee for
Beneficiary's participation in such escrow account. Such
registration document shall provide Beneficiary access to the
Source Code, the right to use and modify the Source Code solely
to maintain and support Beneficiary's current and future
customers of the Licensed Material and the right to produce
object code copies of the modified Licensed Material as part of
Beneficiary's applications for use in accordance with the terms
of the Agreement, subject to the following conditions: (a)
Beneficiary is in compliance with the terms of the Agreement;
(b) Beneficiary has a valid license to the Licensed Material;
and (c) Beneficiary has a valid maintenance agreement with
Sagent for support of the Licensed Material, and either (1) A
petition in bankruptcy has been filed in Sagent's name, whether
voluntarily or involuntarily, and such petition is not withdrawn
within 90 days of such filing or (2) pursuant to Sagent's
obligations under a valid maintenance agreement with
Beneficiary, Sagent has consistently and repeatedly failed or
refused to correct a catastrophic error or numerous individual
errors in the Licensed Materials which render the licensed
materials commercially unusable. Provided that the above
conditions exist, and Beneficiary has given Depositor written
notice of such breach which was not cured within 60 days (the
Release Condition), then SourceFile shall follow the following
procedures set forth in this Section 4, parts (h), (iii), (iv)
and (v).
(ii) SourceFile shall promptly notify Depositor of the occurrence of
the Release Condition and shall provide to Depositor a copy of
Beneficiary's notice to SourceFile.
(iii) If SourceFile does not receive Contrary Instructions, as defined
below, from Depositor within sixty (60) days following
SourceFile's delivery of a copy of such notice to Depositor,
SourceFile shall deliver a copy of the Source Material to
Beneficiary. "Contrary Instructions" for the purposes of this
Section 4 shall mean the filing of written notice with
SourceFile by Depositor, with a copy to the Beneficiary
demanding delivery, stating that the Release Condition has not
occurred or has been cured.
(iv) If SourceFile receives Contrary Instructions from Depositor
within sixty (60) days of the giving of such notice to
Depositor, SourceFile shall not deliver a copy of the Source
Material to the Beneficiary, but shall continue to store the
Parcel until: (1) otherwise directed by the Depositor and
Beneficiary jointly; (2) SourceFile has received a copy of an
order of a court
Exhibit 2-3
<PAGE> 57
of competent jurisdiction directing SourceFile as to the
disposition of the Source Material; or (3) SourceFile has
deposited the Parcel with a court of competent jurisdiction or a
Trustee or receiver selected by such court pursuant to this
Section 4, part (v) below.
(v) Upon receipt of Contrary Instructions from Depositor, SourceFile
shall have the absolute right, at SourceFile's election, to file
an action in interpleader requiring the Depositor and
Beneficiary to answer and litigate their several claims and
rights amongst themselves. SourceFile is hereby authorized to
comply with the applicable interpleader statutes of the State of
California in this regard.
5. TERM OF AGREEMENT. This Agreement shall have an initial term of three
(3) years. The term shall be automatically renewed on a yearly basis thereafter,
unless Depositor, Beneficiary, or SourceFile notifies the other parties in
writing at least forty-five (45) days prior to the end of the then current term
of its intention to terminate this Agreement.
6. COMPENSATION OF SOURCEFILE. Depositor or Beneficiary agree to pay
SourceFile reasonable compensation for the services to be rendered hereunder in
accordance with SourceFile's then current schedule of fees, except that any fees
associated with Escrow Release Requests and Technical Review/Verification
Requests initiated by a Beneficiary must be paid by that Beneficiary in
accordance with SourceFile's then current schedule of fees. Depositor or
Beneficiary will pay or reimburse SourceFile upon request for all reasonable
expenses, disbursements and advances, including software duplication charges,
incurred or made by it in connection with carrying out its duties hereunder.
7. LIMITATION OF DUTIES OF SOURCEFILE. SourceFile undertakes to perform
only such duties as are expressly set forth herein.
8. LIMITATION OF LIABILITY OF SOURCEFILE. SourceFile may rely on and
shall suffer no liability as a result of acting or refraining from acting upon
any written notice, instruction or request furnished to SourceFile hereunder
which is reasonably believed by SourceFile to be genuine and to have been signed
or presented by a person reasonably believed by SourceFile to be authorized to
act on behalf of the parties hereto. SourceFile shall not be liable for any
action taken by it in good faith and believed by it to be authorized or within
the rights or powers conferred upon it by this Agreement. SourceFile may consult
with counsel of its own choice, and shall have full and complete authorization
and protection for any action taken or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel.
9. INDEMNIFICATION OF SOURCEFILE. SourceFile shall be responsible to
perform its obligations under this agreement and to act in a reasonable and
prudent manner with regard to this escrow arrangement. Provided that SourceFile
has acted in the manner stated in the previous sentence, Depositor and
Beneficiary each agree to indemnify, defend, and hold harmless SourceFile and
its agents and employees (collectively, "SourceFile") from any and all claims,
demands, liability, costs and expenses (including attorney's fees) incurred by
SourceFile directly or indirectly arising from or relating to the Source
Material and/or SourceFile's performance of its duties under this Agreement.
10. RECORD KEEPING AND INSPECTION OF SOFTWARE. SourceFile shall maintain
complete written records of all materials deposited by Depositor pursuant to
this Agreement. During the term of this Agreement, Depositor shall be entitled
at reasonable times during
Exhibit 2-4
<PAGE> 58
normal business hours and upon reasonable notice to SourceFile to inspect the
records of SourceFile maintained pursuant to this Agreement and to inspect the
facilities of SourceFile and the physical condition of the Source Material.
11. TECHNICAL VERIFICATION. Beneficiary reserves the option to request
SourceFile to verify the Source Material for completeness and accuracy. At
Beneficiary's expense, SourceFile may elect to perform the verification at its
site or at the Depositors site. Depositor agrees to reasonably cooperate with
SourceFile in the verification process by providing its facilities and computer
systems and by permitting SourceFile and at least one employee of Beneficiary to
be present during the verification of Source Material.
12. RESTRICTION ON ACCESS TO SOURCE MATERIAL. SourceFile shall maintain
the Source Materials in a secure, environmentally safe, locked receptacle which
is accessible only to authorized SourceFile employees. SourceFile shall not
disclose the contents of this Agreement to any third party. If SourceFile
receives a subpoena or other order of a court or other judicial tribunal
pertaining to the disclosure or release of the Source Materials, SourceFile will
immediately notify Depositor. Except as required to carry out its duties
hereunder, SourceFile shall not permit any SourceFile employee, Beneficiary or
any other person access to the Source Material except as expressly provided
herein, unless consented to in writing by Depositor. SourceFile shall use its
best efforts to avoid unauthorized access to the Source Material by its
employees or any other person.
13. BANKRUPTCY. Depositor and Beneficiary acknowledge that this
Agreement is an "agreement supplementary to" the License Agreement as provided
in Section 365 (n) of Title 11, United State Code (the "Bankruptcy Code").
Depositor acknowledges that if Depositor, as a debtor in possession or a trustee
in Bankruptcy in a case under the Bankruptcy Code, rejects the License Agreement
or this Agreement, Beneficiary may elect to retain its rights under the License
Agreement and this Agreement as provided in Section 365(n) of the Bankruptcy
Code. Upon written request of Beneficiary to Depositor or the Bankruptcy
Trustee, Depositor or such Bankruptcy Trustee shall not interfere with the
rights of Beneficiary as provided in the License Agreement and this Agreement,
including the right to obtain the Source Material from SourceFile as permitted
hereunder.
14. NOTICES.
(i) Any notice or other communication required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date service is served, personally, sent by overnight courier, or five (5) days
after the date of mailing if sent registered mail, postage prepaid, return
receipt required, and addressed as follows or to such other address or facsimile
number as either party may, from time to time, designate in a written notice
given in like manner:
TO DEPOSITOR: Sagent Technology, Inc.
2225 East Bayshore Shore Road, Suite 100
Palo Alto, CA 94303
Phone: (415) 493-7100
Fax: (415) 493-1290
TO SOURCEFILE: SourceFile
1350 West Grand Ave.
Oakland, California 94607
Attn.: Client Services
Phone: (510) 419-3888
Fax: (510) 419-3875
Exhibit 2-5
<PAGE> 59
(ii) Deposit update notices and invoices will be sent to parties listed
in Exhibit "D" and "E".
TO BENEFICIARY: As set forth in Exhibit "C" Schedule of Beneficiaries.
15. MISCELLANEOUS PROVISIONS.
(a) WAIVER. Any term of this Agreement may be waived by the party
entitled to the benefits thereof, provided that any such waiver must be in
writing and signed by the party against whom the enforcement of the waiver is
sought. No waiver of any condition, or of the breach of any provision of this
Agreement, in any one or more instances, shall be deemed to be a further or
continuing waiver of such condition or breach. Delay or failure to exercise any
right or remedy shall not be deemed the waiver of that right or remedy.
(b) MODIFICATION OR AMENDMENT. Any modification or amendment of
any provision of this Agreement must be in writing, signed by the parties hereto
and dated subsequent to the date hereof.
(c) GOVERNING LAW JURISDICTION. This Agreement shall be governed
by and construed in accordance with the laws of the State of California. All
disputes arising out of or related to this Agreement shall be subject to the
exclusive jurisdiction and venue of the State and Federal courts of Santa Clara
County, California.
(d) HEADINGS; SEVERABILITY. The headings appearing at the
beginning of the sections contained in this Agreement have been inserted for
identification and reference purposes only and shall not be used to determine
the construction or interpretation of this Agreement. If any provision of this
Agreement is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(e) FURTHER ASSURANCES. The parties agree to perform all acts and
execute all supplementary instruments or documents which may be reasonably
necessary to carry out the provisions of this Agreement.
(f) ENTIRE AGREEMENT. This Agreement, including the attachments
hereto, contains the entire understanding between the parties' and supersedes
all previous communications, representations and contracts, oral or written,
between the parties, with respect to the subject matter thereof It is agreed and
understood that this document and agreement shall be the whole and only
agreement between the parties hereto with regard to these escrow instructions
and the obligations of SourceFile herein in connection with this Agreement, and
shall supersede and cancel any prior instructions. SourceFile is specifically
directed to follow these instructions only and SourceFile shall have no
responsibility to follow the terms of any prior agreements or oral
understandings.
Exhibit 2-6
<PAGE> 60
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
DEPOSITOR SOURCEFILE
SAGENT TECHNOLOGY, INC. FILESAFE, INC.,
A CALIFORNIA CORPORATION A CALIFORNIA CORPORATION
By:/s/ Thomas Lounibos By:
------------------------------- --------------------------
Name: Thomas Lounibos Name:
------------------------------- ------------------------
Title: VP Sales Title:
------------------------------- -----------------------
Exhibit 2-7
<PAGE> 61
EXHIBIT "A-___"
DESCRIPTION OF SOURCE MATERIAL
SOURCEFILE ACCOUNT #__7446______
The Depositor agrees to deposit the Source Material for the benefit of the
Licensee of this escrow arrangement. Below is the acknowledgment that the
deposit arrived at SourceFile in good order. It is completed by the Depositor
and visually inspected by SourceFile. A copy of this form will be shared with
Licensees of the Source Material.(As multiple deposits are made, please make
copies of this form and number them appropriately. For example, the initial
deposit will be Exhibit "A-1", the next "A-2" and so on).
1. SOURCE MATERIAL DEPOSIT
PRODUCT NAME Sagent DataMart Server, Web Link
VERSION 2.0
--------------------------------------------------------------
2. TYPE OF MEDIA
- THERE CAN BE MORE THAN ONE TYPE (I.E. DISKETTE, TAPE, HARD COPY
MATERIALS, ETC.)
- PLEASE INCLUDE THE QUANTITY OF TYPE (I.E. TWO (2) DISKETTES)
1 tape
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
3. PLEASE CHECK ONE OF THE FOLLOWING:
INITIAL DEPOSIT [ ] SUPPLEMENTAL [X] REPLACEMENT [ ] *
*IF REPLACEMENT THEN: DESTROY DEPOSIT [ ] OR RETURN DEPOSIT [ ]
- --------------------------------------------------------------------------------
Completed by: Visually verified by:
DEPOSITOR SOURCEFILE
By: By:
-------------------------- --------------------------
Name: Ken Gardner Name:
------------------------
Title: Chief Executive Officer Title: Client Services
Date: Date:
------------------------ ------------------------
Exhibit 2-8
<PAGE> 62
Exhibit 3 - Sagent End User Agreement
EXHIBIT "B"
FORM OF ACKNOWLEDGMENT BY BENEFICIARY
The undersigned hereby acknowledges, accepts and agrees to be bound by
the terms of the attached SourceFlex Software Source Code Escrow Agreement by
and between SourceFile, Inc., a California corporation, as Escrow Agent and
Sagent Technology, Inc., as Licensee, dated December 1, 1996.
BENEFICIARY: By: [SIG]
-----------------------------
Name: Terry C. Ludvigson
Company: Unisys Corporation
Title: Manager Technical Procurement
Address: 322 North 2200 West
Salt Lake City, Utah 84116
Phone: (801) 594-4267
Fax: (801) 594-4835
[SIG]
DEPOSITOR: Sagent Technology, Inc.
2225 East Bayshore Rd. Suite 100
Palo Alto, CA 94303
Phone: (650) 493-7100
Fax: (650) 493-1290
PLEASE SEND CERTIFIED OR REGISTERED MAIL to:
SOURCEFILE: SOURCEFILE
1350 West Grand Ave.
Oakland, California 94607
Attn: Client Services
Phone: (510) 419-3888
Fax: (510) 419.3875
Exhibit 2-9
<PAGE> 63
EXHIBIT "C"
SCHEDULE OF BENEFICIARIES OF THE SOFTWARE
Exhibit 2-10
<PAGE> 64
EXHIBIT "D"
SCHEDULE OF NOTICES
DEPOSITOR
Depositor deposit
notices should be sent to: Name: Kathy Ovalle
Title: Corporate Controller
Address: 2225 East Bayshore Road Suite 100
Palo Alto, CA 94303
Phone: (650) 496-3112
Fax: (650) 493-1290
Depositor invoices
should be sent to: Name: Kathy Ovalle
Title: Corporate Controller
Address: 2225 East Bayshore Road Suite 100
Palo Alto, CA 94303
Phone: (650) 496-3112
Fax: (650) 493-1290
Exhibit 2-11
<PAGE> 65
EXHIBIT "E"
SCHEDULE OF NOTICES
BENEFICIARY
Depositor deposit notices
should be sent to:
Name: Terry Ludvigson
Title: Mgr. Technical Procurement
Address: 322 North 2200 West
Salt Lake City, UT 84116
Phone: (801) 594-4297
Fax: (801) 594-4835
Beneficiary notices
should be sent to:
Name: Terry Ludvigson
Title: Mgr. Technical Procurement
Address: 322 North 2200 West
Salt Lake City, UT 84116
Phone: (801) 594-4297
Fax: (801) 594-4835
1. Concurrent with the signing of the Solution Provider Agreement, PROVIDER
shall deposit in Unisys Law Department at Township Line and Union
Meeting Roads, Blue Bell PA 19424, Attention: General Counsel, the
then-current copies of the Escrow Materials. SOURCE CODE shall be
provided on media as specified by Unisys. At the same time as revisions
to the OBJECT CODE, (including any IMPROVEMENTS, CORRECTIONS,
ENHANCEMENTS, UPGRADES, and UPDATES which PROVIDER is required to
incorporate in the [Software] are delivered by PROVIDER, PROVIDER shall
deliver to Unisys the revised Escrow Materials. If necessary, Unisys
shall give PROVIDER access to the Escrow Materials previously deposited
for the purpose of updating such Escrow Materials.
2. Unisys shall protect the Escrow Materials to the same extent as it does
its own confidential information of a similar nature and shall not use
or examine such materials, except to verify the accuracy, completeness
and sufficiency of a deposit and except as provided in Article (the
Escrow Account Article), Paragraphs B and C.
3. Unisys shall have the right to have PROVIDER demonstrate to Unisys,
within the applicable operating environment, for the initial deposit of
Escrow Materials and, thereafter, not more frequently than once a year
at either Unisys' cognizant place of business or at another site chosen
by mutual agreement, that the Escrow Materials comprise the then current
Software and [DOCUMENTATION/its related documentation]. Each party shall
be responsible for its own costs associated with this
Exhibit 2-12
<PAGE> 66
demonstration, except that Unisys will reimburse PROVIDER travel and
living expenses, as provided in Attachment Q related to this
demonstration if held at a Unisys site. In order to have such
demonstration, Unisys shall give written notice to PROVIDER specifying a
date for the demonstration, which shall be no sooner than thirty (30)
days after the date of receipt of the written notice. If PROVIDER cannot
demonstrate to Unisys that the Escrow Materials are current, PROVIDER
shall immediately update the Escrow Materials to make them current.
4. Unisys will inform PROVIDER of any change in the location and person
responsible for holding the Escrow Materials.
5. Unisys or PROVIDER may request the joint inspection of the Escrow
Materials at Unisys' site, with reasonable notice, to review the Escrow
Materials for accuracy, completeness and currentness. In the event such
review reveals a deficiency in the Escrow Materials, PROVIDER shall
promptly provide revisions to the Escrow Materials to correct such
deficiency. Unisys will return obsolete versions of the Escrow Materials
to PROVIDER when no longer required for the purposes of this Agreement.
Exhibit 2-13
<PAGE> 67
Exhibit 3 - Sagent End User Agreement
EXHIBIT 3
Sagent End User Agreement
Exhibit 3-1
<PAGE> 68
SOFTWARE LICENSE AGREEMENT
THANK YOU FOR PURCHASING THIS PRODUCT. IT IS IMPORTANT THAT YOU CAREFULLY READ
THIS AGREEMENT BEFORE OPENING THIS PACKAGE. BY OPENING THIS SEALED PACKAGE, YOU
AGREE TO THE TERMS AND CONDITIONS OF THIS AGREEMENT AND CREATE A BINDING
CONTRACT BETWEEN YOU AND SAGENT TECHNOLOGY, INC. ("SAGENT'). IF YOU DO NOT AGREE
TO THESE TERMS, YOU MAY RETURN THIS PACKAGE UNOPENED TO SAGENT WITHIN THIRTY
(30) DAYS OF PURCHASE FOR A FULL REFUND.
LICENSE
Sagent grants you a non-exclusive, non-transferable license to use this copy of
the software program (the "Software") and accompanying documentation, if any,
and any updates or upgrades thereto provided by Sagent according to the terms
set forth below. If the Software is being provided to you as an update or
upgrade to software which you have previously licensed, then you agree to
destroy all copies of the prior release of this software within thirty (30) days
after entering into this Agreement; provided, however, that you may retain one
copy of the prior release for backup purposes.
YOU MAY:
a. install the Software on only one of the following, as specified on your
Order Form or other signed agreement with Sagent (the "Governing
Terms"); (i) (if specified as "stand alone" or "single user' version) a
stand alone or computer network node from which node the Software cannot
be accessed by another computer; or (ii) (if specified as a "LAN"
version) a network server at one site only, which server provides access
to multiple computers, up to the maximum number of computers or
concurrent users specified in such Governing Terms; or (iii) if
specified as a "multi-user pack", the number of computer nodes (network
or stand alone) up to the number of users as specified in such Governing
Terms.
b. make one (1) copy of the Software in machine readable form solely for
backup purposes, provided that you reproduce all proprietary notices on
the copy; and
c. physically transfer the Software from (as applicable): (i) one stand
alone computer or network node to another stand alone computer or
network node; or from (ii) one server to another server, provided that
the Software is used on only one computer, network node or server at a
time; or from (iii) the number of stand alone computers, network nodes
or servers to other stand alone computers, network nodes, or servers,
provided that the number of Software users does not exceed the number
specified in the Governing Terms.
Exhibit 3-2
<PAGE> 69
YOU MAY NOT:
a. Modify, translate, reverse engineer, decompile, disassemble, or create
derivative works based on the Software (except to the extent that such
acts may not be prohibited under applicable law),
b. copy the Software (except as provided above) or copy the accompanying
documentation,
c. rent, transfer, lease, distribute or grant any rights in the Software or
accompanying documentation in any form to any person without the prior
written consent of Sagent, or
d. remove any proprietary notices, labels, or marks on the Software and
accompanying documentation
This license is not a sale. Title and copyrights to the Software, accompanying
documentation and any copy made by you remain with Sagent or its licensors, as
the case may be. Unauthorized copying of the Software or the accompanying
documentation, or failure to comply with the above restrictions, will result in
automatic termination of this license and will make available to Sagent other
legal remedies.
LIMITED WARRANTY AND DISCLAIMER
Sagent warrants that, for a period of ninety (90) days from the date of delivery
to you, (i) the Software will perform substantially in accordance with the
accompanying documentation, and (ii) the software media on which the Software is
furnished under normal use will be free from defects in materials and
workmanship.
Sagent's entire liability and your exclusive remedy under this warranty (which
is subject to your returning the Software to Sagent) will be, at Sagent's
option, to use reasonable commercial efforts to attempt to correct or work
around errors, to replace the Software Media with functionally equivalent
Software Media, as applicable.
Sagent warrants that the software shall not cause erroneous date calculations
due to miscalculations by the Software as a result of the year 2000 date change.
Sagent further warrants that the software includes the ability to manage and
manipulate all data involving dates or date fields which include indication of
century to ensure year 2000 compatibility.
EXCEPT FOR THE ABOVE EXPRESS LIMITED WARRANTIES, SAGENT MAKES AND YOU RECEIVE NO
WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, OR IN ANY
COMMUNICATION WITH YOU, AND SAGENT SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT AND
THEIR EQUIVALENTS. Sagent does not warrant that the
Exhibit 3-3
<PAGE> 70
operation of the Software will be uninterrupted or error free or that the
Software will meet your specific requirements.
SOME STATES OR OTHER JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED
WARRANTIES, SO THE ABOVE EXCLUSIONS MAY NOT APPLY TO YOU. YOU MAY ALSO HAVE
OTHER RIGHTS THAT VARY FROM STATE TO STATE AND JURISDICTION TO JURISDICTION.
LIMITATION OF LIABILITY
IN NO EVENT WILL SAGENT BE LIABLE FOR LOSS OF DATA, LOST PROFITS, COST OF COVER,
OR OTHER SPECIAL, INCIDENTAL, PUNITIVE, CONSEQUENTIAL, OR INDIRECT DAMAGES
ARISING FROM THE USE OF THE SOFTWARE OR ACCOMPANYING DOCUMENTATION, HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF SAGENT
OR AN AUTHORIZED DISTRIBUTOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
IN NO EVENT WILL SAGENT'S LIABILITY EXCEED THE AMOUNTS PAID FOR THE SOFTWARE.
YOU ACKNOWLEDGE THAT THE AMOUNTS PAID BY YOU FOR THE SOFTWARE REFLECT THIS
ALLOCATION OF RISK.
SOME STATES OR OTHER JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF
LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATIONS AND
EXCLUSIONS MAY NOT APPLY TO YOU.
LANGUAGE
The parties hereto confirm that it is their wish that this Agreement, as well as
other documents relating hereto, have been and shall be written in the English
language only.
Les parties aux presentes confirment leur volonte que cette convention de meme
que tous les documents y compris tout avis qui s'y rattache, soient rediges en
langue anglaise.
GENERAL
This Agreement shall not be governed by the 1980 U.N. Convention on Contracts
for the International Sale of Goods; rather, this Agreement shall be governed by
the laws of the State of California, U.S.A., including its Uniform Commercial
Code, without reference to conflicts of laws principles. This Agreement is the
entire Agreement between us and supersedes any other communications or
advertising with respect to the Software and accompanying documentation. If any
provision of this Agreement is held invalid or unenforceable, such provision
shall be revised to the extent necessary to cure the invalidity or
unenforceability, and the remainder of this Agreement shall continue in full
force and effect. The Software and accompanying documentation are deemed to be
"commercial computer software" and "commercial computer software documentation",
respectively, pursuant to DFAR Section and FAR Section, as applicable. Any use,
modification, reproduction, release, performing, displaying or disclosing of the
Software and accompanying documentation by the U.S. Government shall be governed
solely by the terms of this Agreement and shall be prohibited except to the
extent expressly permitted
Exhibit 3-4
<PAGE> 71
by the terms of this Agreement. You agree not to allow the Software to be sent
to or used in any other country except in compliance with applicable U.S. laws
and regulations. In the event of any conflict between any provision of this
Agreement and any applicable law, the provision or provisions of this Agreement
affected shall be modified to remove such conflict and permit compliance with
such law and as so modified this Agreement shall continue in full force and
effect.
If you have any questions, please contact in writing: Sagent Technology, Inc.
Customer Service, 750 Menlo Avenue, Suite, Menlo Park, California 94025.
Exhibit 3-5
<PAGE> 72
Exhibit 4 - Sagent End User Support Agreement
EXHIBIT 4
Sagent End User Support Agreement
Exhibit 4-1
<PAGE> 73
Sagent Technology Premium Support
One Year Agreement
SAGENT TECHNOLOGY ("WE") WILL PROVIDE YOU THE PREMIUM SUPPORT SERVICES LISTED
BELOW, FOR THE SOFTWARE AND PERSONS INDICATED.
Available Support Services may include 24 hours, seven days a week
telephone support (telephone support during the holidays should be
arranged one week in advance of the holiday), in which we will answer
technical questions from designated persons about the installation and
use of covered Software products; Maintenance Releases, in which we will
provide our copyrighted in-line releases and workarounds as available
(this does not include full Software products or Upgrades; we will not
undertake individual fixes for you); Upgrades, in which we will provide
new product releases (signified by a change in the version number) as
substitutes for covered Software; and other generally available
Technical Materials. Note that Maintenance Releases and Upgrades, where
applicable, may not be used to increase the total number of copies of
the Software. After upgrade or maintenance this agreement will only
apply to the upgraded or maintained versions of a Software product; you
agree to destroy or archive (but not use or transfer) the prior version.
Software upgrades are generally not available free of charge.
YOU WILL PAY US THE APPLICABLE SUPPORT FEES.
Support Fees must be prepaid, unless you have established credit terms
with us.
WE MAY CHANGE OUR AVAILABLE PRODUCT SUPPORT SERVICES FROM TIME TO TIME.
We will undertake reasonable efforts to provide technical assistance
under this agreement and to rectify or provide solutions to problems
where the Software does not function as described in the Software
documentation, but we do not guarantee that all problems will be solved
or that any item will be error-free. We will provide you with
substantially the same level of service throughout the term of this
Agreement. We may from time to time, however, discontinue Software
products or versions, and stop supporting Software products or versions
within a reasonable time after discontinuance, or otherwise discontinue
any support services. THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES, CONDITIONS OR PROMISES TO YOU OR ANY THIRD PARTY, EXPRESS OR
IMPLIED, RELATED TO THE SOFTWARE OR ANY SERVICES WE MAY PROVIDE,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY
STATUTE, LAW OR TRADE DEALING OR USAGE. EXCEPT AS PROVIDED ABOVE, ALL
MATERIALS AND SERVICES ARE PROVIDED "AS IS.' We are not liable for
incidental, special or consequential damages for any reason (including
loss of data or other business or property damage), even if foreseeable.
Our liability in all events for any damages, howsoever caused, will not
exceed the applicable fees that you have paid us.
THIS PREMIUM SUPPORT AGREEMENT WILL BE EFFECTIVE FOR ONE YEAR.
You and we may extend or terminate this agreement as provided below. At
the end of any one-year term, you may renew this agreement with our
consent under the terms of the Premium Support Agreement then in effect
by paying the Support Fees in effect at that time. Either you or we may
terminate this agreement for material breach, including nonpayment, at
any time; in the absence of material breach by Sagent, Support Fees are
not refundable. This is the full and final agreement between you and us,
and supersedes any promises, representations or agreements relating to
the subject of this agreement. This agreement may only be changed if you
and our authorized representative do so in writing. No inconsistent,
additional, or preprinted terms on your purchase order or other business
for will apply. You may not assign this agreement without our written
consent. Any unauthorized assignment terminates this agreement
automatically. The Software, Upgrades, Maintenance Releases, and
Technical Materials are our copyrighted property, and may not be copied,
distributed, or transferred, or otherwise used except as we have
expressly permitted in the relevant license agreement (the terms of
which are incorporated into this agreement by reference) or otherwise in
writing.
SOFTWARE COVERED:
Number
Software Name & Version Copies of
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
Exhibit 4-2
<PAGE> 74
SOFTWARE AND PERSONS COVERED:
Person(s):
Name Phone Number
- -------------------------------------------------------
( )
- -------------------------------------------------------
( )
- -------------------------------------------------------
SAGENT TECHNOLOGY, INC.:
Signed:
-----------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
EFFECTIVE DATE:
---------------------------------
YOU:
--------------------------------------------
Signed:
-----------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Address:
----------------------------------------
Exhibit 4-3
<PAGE> 75
Sagent Technology Premium Support
One Year Agreement
SAGENT TECHNOLOGY ("WE") WILL PROVIDE YOU THE PREMIUM SUPPORT SERVICES LISTED
BELOW, FOR THE SOFTWARE AND PERSONS INDICATED.
Available Support Services may include 24 hours, seven days a week
telephone support (telephone support during the holidays should be
arranged one week in advance of the holiday), in which we will answer
technical questions from designated persons about the installation and
use of covered Software products; Maintenance Releases, in which we will
provide our copyrighted in-line releases and workarounds as available
(this does not include full Software products or Upgrades; we will not
undertake individual fixes for you); Upgrades, in which we will provide
new product releases (signified by a change in the version number) as
substitutes for covered Software; and other generally available
Technical Materials. Note that Maintenance Releases and Upgrades, where
applicable, may not be used to increase the total number of copies of
the Software. After upgrade or maintenance this agreement will only
apply to the upgraded or maintained versions of a Software product; you
agree to destroy or archive (but not use or transfer) the prior version.
Software upgrades are generally not available free of charge.
YOU WILL PAY US THE APPLICABLE SUPPORT FEES.
Support Fees must be prepaid, unless you have established credit terms
with us.
WE MAY CHANGE OUR AVAILABLE PRODUCT SUPPORT SERVICES FROM TIME TO TIME.
We will undertake reasonable efforts to provide technical assistance
under this agreement and to rectify or provide solutions to problems
where the Software does not function as described in the Software
documentation, but we do not guarantee that all problems will be solved
or that any item will be error-free. We will provide you with
substantially the same level of service throughout the term of this
Agreement. We may from time to time, however, discontinue Software
products or versions, and stop supporting Software products or versions
within a reasonable time after discontinuance, or otherwise discontinue
any support services. THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES, CONDITIONS OR PROMISES TO YOU OR ANY THIRD PARTY, EXPRESS OR
IMPLIED, RELATED TO THE SOFTWARE OR ANY SERVICES WE MAY PROVIDE,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY
STATUTE, LAW OR TRADE DEALING OR USAGE. EXCEPT AS PROVIDED ABOVE, ALL
MATERIALS AND SERVICES ARE PROVIDED "AS IS.' We are not liable for
incidental, special or consequential damages for any reason (including
loss of data or other business or property damage), even if foreseeable.
Our liability in all events for any damages, howsoever caused, will not
exceed the applicable fees that you have paid us.
THIS PREMIUM SUPPORT AGREEMENT WILL BE EFFECTIVE FOR ONE YEAR.
You and we may extend or terminate this agreement as provided below. At
the end of any one-year term, you may renew this agreement with our
consent under the terms of the Premium Support Agreement then in effect
by paying the Support Fees in effect at that time. Either you or we may
terminate this agreement for material breach, including nonpayment, at
any time; in the absence of material breach by Sagent, Support Fees are
not refundable. This is the full and final agreement between you and us,
and supersedes any promises, representations or agreements relating to
the subject of this agreement. This agreement may only be changed if you
and our authorized representative do so in writing. No inconsistent,
additional, or preprinted terms on your purchase order or other business
for will apply. You may not assign this agreement without our written
consent. Any unauthorized assignment terminates this agreement
automatically. The Software, Upgrades, Maintenance Releases, and
Technical Materials are our copyrighted property, and may not be copied,
distributed, or transferred, or otherwise used except as we have
expressly permitted in the relevant license agreement (the terms of
which are incorporated into this agreement by reference) or otherwise in
writing.
SOFTWARE COVERED:
Number
Software Name & Version Copies of
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
Exhibit 4-4
<PAGE> 76
SOFTWARE AND PERSONS COVERED:
Person(s):
Name Phone Number
- --------------------------------------------------------------
( )
- --------------------------------------------------------------
( )
- --------------------------------------------------------------
SAGENT TECHNOLOGY, INC.:
Signed:
--------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
EFFECTIVE DATE:
------------------------------------
YOU:
-----------------------------------------------
Signed:
--------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
Address:
-------------------------------------------
Exhibit 4-5
<PAGE> 77
MUST BE ON COMPANY LETTERHEAD
Date: 6/20/97
To: Sagent Technology, Inc.
2225 East Bayshore Rd. Suite 100
Palo Alto, CA 94303
From: Unisys
Township Line & Union Meeting Rd.
Blue Bell, PA 19424
Purchase Order # ______________
Let this Letter Purchase Order #_______ serve as Unisys' authorization to
purchase from Sagent the software and services for the fees as SPECIFIED in the
Solution Provider Agreement between Unisys and Sagent Technology. Per THE
Agreement, Unisys authorizes the purchase of 2 in-house development licenses
already at customer premises for $70,000 and one year annual maintenance for
$21,000. In addition, Unisys will pay Sagent for the EUR order consisting of
$17,500 for licenses and $7,500 for maintenance . We understand that terms are
net 30 from Invoice Date.
Our Bill To Address Is:
Unisys
-------------------------------
-------------------------------
-------------------------------
Bill to contact name & phone
Our Ship To Address Is:
-------------------------------
-------------------------------
-------------------------------
Ship to contact name & phone
Sincerely,
- -------------------------------
- -------------------------------
Printed Name
- -------------------------------
Title
<PAGE> 78
SAGENT TECHNOLOGY INC.
BUSINESS DEVELOPMENT PARTNER
EVALUATION SERVICE AGREEMENT
This Agreement is made effective December 27, 1996 between Sagent Technology
Inc. ("Sagent") a California based corporation, with offices at 750 Menlo Avenue
Suite 300, Menlo Park, CA 94025 and Unisys ("BDP"), with offices at 2276 High
Crest Rd. Rosevill, Mn 55113
I. SAGENT LICENSES THE BDP TO INSTALL AND USE THE SOFTWARE INTERNALLY
DURING THE EVALUATION PERIOD ONLY. "Software" means only our computer
program(s) that make up the Sagent Evaluation Kit, any documentation
("Documentation"') and updates that we may deliver to you and portions
and copies in any form. The "Evaluation Period" is defined as a ninety
(90) day time period from the effective dale listed on the Agreement.
II. PROPRIETARY RIGHTS. Sagent's software programs ("Product(s)") are owned
by Sagent or its licensors and are protected by copyright law, trade
secret laws and international conventions. All rights in and to patents,
copyrights, trademarks and trade secrets in the Product(s) are and shall
remain with Sagent and its licensors. No title to or ownership of
Product(s) is transferred to BDP's Customer's ("End-User").
III. PROHIBITED USES. BDP and/or End-User may not: (i) modify. adopt, reverse
engineer, or disassemble the Product(s); (ii) create derivative works
based on Product(s); (iii) make copies of the Product(s) except for
backup or archival purposes; or (iv) transfer the Product(s) or any part
thereof to any third party or to a new LAN without Sagent's prior
written consent.
IV. WE DISCLAIM ALL REPRESENTATIONS, WARRANTIES AND LIABILITY REGARDING THE
SOFTWARE THAT YOU WILL BE EVALUATING. YOU ACCEPT IS "AS IS". BDP is
responsible for installing the Software, and for determining whether the
Software is suitable, secure. and reliable for your purposes. We will
provide BDP with telephone hotline support at no extra charge during the
Evaluation Period only, but any other maintenance, support. or full
Software license must be purchased separately. We do not warrant that
the Software is error-free, or that any errors will be corrected. THE
FOREGOING IS IN LIEU Of ALL WARRANTIES TO BDP OR ANY THIRD PARTY,
EXPRESS OR IMPLIED, RELATED TO THE SOFTWARE OR ANY SERVICES WE MAY
PROVIDE, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY
STATUTE, LAW OR TRADE DEALING OR USAGE. Sagent is not liable for
incidental, special or consequential damages for any reason (including
loss of data or other business or property damage) even if foreseeable,
and our liability in all events will not exceed the License Fee that you
have paid if any. You agree to implement backup and recovery procedures
adequate to prevent loss due to malfunction.
V. YOU WILL RESPECT OUR COPYRIGHT IN THE SOFTWARE. BDP will not copy the
Software programs except to the extent necessary to use for internal
Evaluation. BDP may make one copy of the Software program for back-up
use only. You will put our copyright notices on all copies. You may not
copy the Documentation.
VI. CONFIDENTIALITY. This Agreement and any information and date of any
nature including, but not limited to, proprietary, technical, marketing.
operating. performance, cost, know-how. business discoveries, trade
secrets, techniques, process, computer programming techniques, and all
record-bearing media containing or disclosing such information and
techniques furnished by one party to the other in connection with this
Agreement ("Confidential Information") and all copies of Confidential
Information made by the receiving party: (a) shall be held in confidence
and protected in accordance with the security measures with which it
protects its own proprietary or confidential information which it does
not wish to disclose but in no event using less then reasonable care;
(b) shall be used by the receiving party and its employees only to
perform their responsibilities pursuant to this Agreement; (c) shall not
be reproduced or copied, in whole or in
Exhibit 4-6
<PAGE> 79
part, except as necessary for its authorized use; and (d) shall be
returned to originating party upon request or destroyed, together with
all copies, when it is no longer needed or upon termination or
expiration of the Agreement, except as expressly provided herein.
Confidential Information shall not be disclosed to third parties,
including but not limited to the receiving party's dealers or
distributors without the prior, written consent of the originating
party. Information disclosed pursuant to this Agreement that either
party considers Confidential Information and that is provided in
tangible form shall be marked confidential, proprietary or private. The
receiving party shall have no obligation to treat as proprietary any
information which: (a) was previously known to the receiving party free
of any confidentiality obligation. (b) is disclosed to third parties by
the disclosing party without restriction. (c) is or becomes publicly
available other than by the receiving party's breach of its obligations;
or (d) is independently developed by the receiving party, as documented
by written evidence. The parties agree to adhere to the requirements of
this Article for three (3) years following the termination or expiration
of this Agreement.
VII. EXPORT RESTRICTION. This Agreement is subject to all present and future
regulations and restrictions of the government and agencies of the
United States. BCP agrees that it will not ship or divert the Product(s)
or technical data with respect thereto for use in any country or
countries in contravention of the laws and regulations of such
government or agencies or knowingly cause or permit such shipping or
diversion without the prior written approval of such government or
agencies
VIII. TERMINATION. Either party may terminate this Agreement by written notice
upon any material breach of this Agreement by the other party, which if
remediable, has not been corrected within thirty (30) calendar days
after written notice. At the end of the applicable Evaluation Period, or
upon termination if earlier, you will return the Software, Documentation
and all copies of Sagent. You authorize us, at our discretion to charge
you the applicable full-system license fee for any Software and/or
Documentation that you do not return to us at the end of the Evaluation
Period in unmarked condition, suitable for evaluation by another
customer.
IX. GOVERNING LAW. This agreement shall be governed by the laws of the State
of California.
ACCEPTED AND AGREED ON BEHALF OF:
UNISYS SAGENT TECHNOLOGY, INC. ("SAGENT")
- --------------------------------
/s/ MANUEL LAVIN /s/ DAVID E. SILVER
- -------------------------------- ----------------------------------
(Authorized Signature) (Authorized Signature)
Manuel Lavin David E. Silver
- -------------------------------- ----------------------------------
(Print Name) (Print Name)
Director 12/27/96 Director 12/27/96
- -------------------------------- -------------------------------
(Title) (Date) (Title) (Date)
<PAGE> 80
SAGENT TECHNOLOGY INC.
BUSINESS DEVELOPMENT PARTNER
EVALUATION SERVICE AGREEMENT
This Agreement is made effective December 27, 1996 between Sagent Technology
Inc. ("Sagent") a California based corporation, with offices at 750 Menlo Avenue
Suite 300, Menlo Park, CA 94025 and Unisys ("BDP"), with offices at 2276 High
Crest Rd. Rosevill, Mn 55113
X. SAGENT LICENSES THE BDP TO INSTALL AND USE THE SOFTWARE INTERNALLY
DURING THE EVALUATION PERIOD ONLY. "Software" means only our computer
program(s) that make up the Sagent Evaluation Kit, any documentation
("Documentation"') and updates that we may deliver to you and portions
and copies in any form. The "Evaluation Period" is defined as a ninety
(90) day time period from the effective dale listed on the Agreement.
XI. PROPRIETARY RIGHTS. Sagent's software programs ("Product(s)") are owned
by Sagent or its licensors and are protected by copyright law, trade
secret laws and international conventions. All rights in and to patents,
copyrights, trademarks and trade secrets in the Product(s) are and shall
remain with Sagent and its licensors. No title to or ownership of
Product(s) is transferred to BDP's Customer's ("End-User").
XII. PROHIBITED USES. BDP and/or End-User may not: (i) modify. adopt, reverse
engineer, or disassemble the Product(s); (ii) create derivative works
based on Product(s); (iii) make copies of the Product(s) except for
backup or archival purposes; or (iv) transfer the Product(s) or any part
thereof to any third party or to a new LAN without Sagent's prior
written consent.
XIII. WE DISCLAIM ALL REPRESENTATIONS, WARRANTIES AND LIABILITY REGARDING THE
SOFTWARE THAT YOU WILL BE EVALUATING. YOU ACCEPT IS "AS IS". BDP is
responsible for installing the Software, and for determining whether the
Software is suitable, secure. and reliable for your purposes. We will
provide BDP with telephone hotline support at no extra charge during the
Evaluation Period only, but any other maintenance, support. or full
Software license must be purchased separately. We do not warrant that
the Software is error-free, or that any errors will be corrected. THE
FOREGOING IS IN LIEU Of ALL WARRANTIES TO BDP OR ANY THIRD PARTY,
EXPRESS OR IMPLIED, RELATED TO THE SOFTWARE OR ANY SERVICES WE MAY
PROVIDE, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY
STATUTE, LAW OR TRADE DEALING OR USAGE. Sagent is not liable for
incidental, special or consequential damages for any reason (including
loss of data or other business or property damage) even if foreseeable,
and our liability in all events will not exceed the License Fee that you
have paid if any. You agree to implement backup and recovery procedures
adequate to prevent loss due to malfunction.
XIV. YOU WILL RESPECT OUR COPYRIGHT IN THE SOFTWARE. BDP will not copy the
Software programs except to the extent necessary to use for internal
Evaluation. BDP may make one copy of the Software program for back-up
use only. You will put our copyright notices on all copies. You may not
copy the Documentation.
XV. CONFIDENTIALITY. This Agreement and any information and date of any
nature including, but not limited to, proprietary, technical, marketing.
operating. performance, cost, know-how. business discoveries, trade
secrets, techniques, process, computer programming techniques, and all
record-bearing media containing or disclosing such information and
techniques furnished by one party to the other in connection with this
Agreement ("Confidential Information") and all copies of Confidential
Information made by the receiving party: (a) shall be held in confidence
and protected in accordance with the security measures with which it
protects its own proprietary or confidential information which it does
not wish to disclose but in no event using less then reasonable care;
(b) shall be used by the receiving party and its employees only to
perform their responsibilities pursuant to this Agreement; (c) shall not
be reproduced or copied, in whole or in
<PAGE> 81
part, except as necessary for its authorized use; and (d) shall be
returned to originating party upon request or destroyed, together with
all copies, when it is no longer needed or upon termination or
expiration of the Agreement, except as expressly provided herein.
Confidential Information shall not be disclosed to third parties,
including but not limited to the receiving party's dealers or
distributors without the prior, written consent of the originating
party. Information disclosed pursuant to this Agreement that either
party considers Confidential Information and that is provided in
tangible form shall be marked confidential, proprietary or private. The
receiving party shall have no obligation to treat as proprietary any
information which: (a) was previously known to the receiving party free
of any confidentiality obligation. (b) is disclosed to third parties by
the disclosing party without restriction. (c) is or becomes publicly
available other than by the receiving party's breach of its obligations;
or (d) is independently developed by the receiving party, as documented
by written evidence. The parties agree to adhere to the requirements of
this Article for three (3) years following the termination or expiration
of this Agreement.
XVI. EXPORT RESTRICTION. This Agreement is subject to all present and future
regulations and restrictions of the government and agencies of the
United States. BCP agrees that it will not ship or divert the Product(s)
or technical data with respect thereto for use in any country or
countries in contravention of the laws and regulations of such
government or agencies or knowingly cause or permit such shipping or
diversion without the prior written approval of such government or
agencies
XVII. TERMINATION. Either party may terminate this Agreement by written notice
upon any material breach of this Agreement by the other party, which if
remediable, has not been corrected within thirty (30) calendar days
after written notice. At the end of the applicable Evaluation Period, or
upon termination if earlier, you will return the Software, Documentation
and all copies of Sagent. You authorize us, at our discretion to charge
you the applicable full-system license fee for any Software and/or
Documentation that you do not return to us at the end of the Evaluation
Period in unmarked condition, suitable for evaluation by another
customer.
XVIII. GOVERNING LAW. This agreement shall be governed by the laws of the State
of California.
ACCEPTED AND AGREED ON BEHALF OF:
UNISYS SAGENT TECHNOLOGY, INC. ("SAGENT")
- --------------------------------
/s/ MANUEL LAVIN /s/ DAVID E. SILVER
- -------------------------------- ----------------------------------
(Authorized Signature) (Authorized Signature)
Manuel Lavin David E. Silver
- -------------------------------- ----------------------------------
(Print Name) (Print Name)
Director 12/27/96 Director 12/27/96
- -------------------------------- -------------------------------
(Title) (Date) (Title) (Date)
<PAGE> 1
EXHIBIT 10.27
SAGENT TECHNOLOGY, INC.
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made and entered into as of
the seventh day of April, 1997 by and between Sagent Technology, Inc. (the
"Company"), and Ralph Kimball Associates, Inc. ("Consultant"). The Company
desires to retain Consultant as an independent contractor to perform consulting
services for the Company and Consultant is willing to perform such services, on
terms set forth more fully below. In consideration of the mutual promises
contained herein, the parties agree as follows:
1. SERVICES AND COMPENSATION
(a) Consultant agrees to perform for the Company the services
("Services") described in Exhibit A, attached hereto.
(b) The Company agrees to pay Consultant the compensation set
forth in Exhibit A for the performance of the Services.
2. CONFIDENTIALITY
(a) "Confidential Information" means any Company proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products, services, customers, customer
lists, markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed by the Company
either directly or indirectly in writing, orally or by drawings or inspection of
parts or equipment. Company will designate all Confidential Information at the
time of disclosure to Consultant in writing. Any information disclosed to
Consultant without being designated as Confidential in writing at the time of
disclosure will be treated as public information.
(b) Consultant will not, during or subsequent to the term of this
Agreement, use the Company's Confidential Information for any purpose whatsoever
other than the performance of the Services on behalf of the Company or disclose
the Company's Confidential Information to any third party. It is understood that
said Confidential Information shall remain the sole property of the Company.
Consultant further agrees to take all reasonable precautions to prevent any
unauthorized disclosure of such Confidential Information. Confidential
Information does not include information which (i) is known to Consultant at the
time of disclosure to Consultant by the Company as evidenced by written records
of Consultant, (ii) has become publicly known and made generally available
through no wrongful act of Consultant, or (iii) has been rightfully received by
Consultant from a third party who is authorized to make such disclosure.
(c) Consultant agrees that Consultant will not, during the term
of this Agreement, improperly use or disclose any proprietary information or
trade secrets of any former
<PAGE> 2
or current employer or other person or entity with which Consultant has an
agreement or duty to keep in confidence information acquired by Consultant if
any, and that Consultant will not bring onto the premises of the Company any
unpublished document or proprietary information belonging to such employer,
person or entity unless consented to in writing by such employer, person or
entity. Consultant will indemnify the Company and hold it harmless from and
against all claims, liabilities, damages and expenses, including reasonable
attorney's fees and costs of suit, arising out of or in connection with any
violation or claimed violation of a third party's rights resulting in whole or
in part from the Company's use of the work product of Consultant under this
Agreement.
(d) Consultant recognizes that the Company has received and in
the future will receive from third parties their confidential or proprietary
information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Consultant agrees that Consultant owes the Company and such third
parties, during the term of this Agreement and thereafter, a duty to hold all
such confidential or proprietary information in the strictest confidence and not
to disclose it to any person, firm or corporation or to use it except as
necessary in carrying out the Services for the Company consistent with the
Company's agreement with such third party.
(e) Upon the termination of this Agreement, or upon Company's
earlier request, Consultant will deliver to the Company all of the Company's
property or Confidential Information that Consultant may have in Consultant's
possession or control.
3. OWNERSHIP
(a) Consultant agrees that all copyrightable material, notes,
records, drawings, designs, inventions, improvements, developments, discoveries
and trade secrets conceived, made or discovered by Consultant, solely or in
collaboration with others, during this Agreement which result from performing
the Services hereunder (collectively "Inventions") are the sole property of the
Company. Consultant further agrees to assign (or cause to be assigned) and does
hereby assign fully to the Company all Inventions and any copyrights, patents,
mask work rights or other intellectual property rights relating thereto.
(b) Consultant agrees to assist Company, or its designee, at the
Company's expense, in every proper way to secure the Company's rights in the
Inventions and any copyrights, patents, mask work rights or other intellectual
property rights relating thereto in any and all countries, including the
disclosure to the Company of all pertinent information and data with respect
thereto, the execution of all applications, specifications, oaths, assignments
and all other instruments which the Company shall deem necessary in order to
apply for and obtain such rights and in order to assign and convey to the
Company, its successors, assigns and nominees the sole and exclusive right,
title and interest in and to such Inventions, and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto. Consultant
further agrees that Consultant's obligation to execute or cause to be executed,
when it is in Consultant's power to do so, any such instrument or papers shall
continue after the termination of this Agreement.
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<PAGE> 3
(c) Consultant agrees that if in the course of performing the
Services, Consultant incorporates into any Invention developed hereunder any
invention, improvement, development, concept, discovery or other proprietary
information owned by Consultant or in which Consultant has an interest, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
perpetual, irrevocable, worldwide license to make, have made, modify, use and
sell such item as part of or in connection with such Invention.
(d) Consultant agrees that if the Company is unable because of
Consultant's unavailability, dissolution, mental or physical incapacity, or for
any other reason, to secure Consultant's signature to apply for or to pursue any
application for any United States or foreign patents or mask work or copyright
registrations covering the Inventions assigned to the Company above, then
Consultant hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as Consultant's agent and attorney in fact, to
act for and in Consultant's behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyright and mask work registrations
thereon with the same legal force and effect as if executed by Consultant.
4. CONFLICTING OBLIGATIONS
(a) Consultant certifies that Consultant has no outstanding
agreement or obligation that is in conflict with any of the provisions of this
Agreement, or that would preclude Consultant from complying with the provisions
hereof, and further certifies that Consultant will not enter into any such
conflicting Agreement during the term of this Agreement. Company agrees that the
activities of Ralph Kimball Associates as defined in Exhibit A, Category 1 of
this Agreement, including its relationships with Red Brick Systems, if..., and
Wiley Computer Books do not constitute Conflicting Obligations.
(b) In view of Consultant's access to the Company's trade secrets
and proprietary know-how, Consultant further agrees that Consultant will not,
without Company's prior written consent, design identical or substantially
similar designs as those developed under this Agreement for any third party
during the term of this Agreement and for a period of twelve (12) months after
the termination of this Agreement.
5. TERM AND TERMINATION
(a) This Agreement will commence on the date first written above
and will continue until the earlier of (i) final completion of the Services or
(ii) termination as provided below.
(b) The Company may terminate this Agreement upon giving two
weeks prior written notice thereof to Consultant. Any such notice shall be
addressed to Consultant at the address shown below or such other address as
either party may notify the other of and shall be deemed given upon delivery if
personally delivered, or forty-eight (48) hours after deposited in the United
States mail, postage prepaid, registered or certified mail, return receipt
requested. The Company may terminate this Agreement immediately and without
prior notice if Consultant refuses to or is unable to perform the Services or is
in breach of any material provision of this
-3-
<PAGE> 4
Agreement. Company agrees that in the event of termination of this Agreement by
Company, Company's right to use Consultant's name and likeness as defined in
Exhibit A shall terminate immediately.
(c) Upon such termination all rights and duties of the parties
toward each other shall cease except:
(i) that the Company shall be obliged to pay, within
thirty (30) days of the effective date of termination, all amounts owing to
Consultant for Services completed and accepted by the Company prior to the
termination date and related expenses, if any, in accordance with the provisions
of Section 1 (Services and Compensation) hereof;
(ii) Sections 2 (Confidentiality), 3 (Ownership) and 7
(Independent Contractors) shall survive termination of this Agreement; and
(iii) The option to purchase 0.75% of the Company's
outstanding equity, on a fully diluted basis, set forth in Exhibit A,
"Options--Option 1 Terms," shall not terminate if this Agreement is terminated
for any reason other than for Cause. As used herein, "Cause" is defined as (i)
willful failure by the Consultant to substantially perform his duties hereunder
other than a failure resulting from the Consultant's complete or partial
incapacity due to physical or mental illness or impairment, or (ii) an act by
the Consultant which constitutes gross misconduct and which is injurious to the
Company, or (iii) a breach by the Consultant of a material provision of this
Agreement, or (iv) a material violation of a federal or state law or regulation
materially applicable to the business of the Company. No act, or failure to act,
by the Consultant shall be considered "willful" unless committed without good
faith and without a reasonable belief that the act or omission was in the
Company's best interest.
6. ASSIGNMENT
Neither this Agreement nor any right hereunder or interest herein
may be assigned or transferred by Consultant without the express written consent
of the Company. Company may not assign any of its rights or obligations under
this Agreement without the prior written consent of Consultant except in
connection with the sale of all or substantially all of Company's business,
whether by means of a merger, sale of stock, a sale of assets, or otherwise.
7. INDEPENDENT CONTRACTOR
The parties to this Agreement are independent contractors.
Nothing in this Agreement shall in any way be construed to constitute Consultant
as an agent, employee or representative of the Company, but Consultant shall
perform the Services hereunder as an independent contractor. Consultant agrees
to furnish (or reimburse the Company for) all tools and materials necessary to
accomplish this contract, and shall incur all expenses associated with
performance, except as expressly provided on Exhibit A of this Agreement.
Consultant acknowledges and agrees that Consultant is obligated to report as
income all compensation received by Consultant pursuant to this Agreement and
Consultant agrees to and acknowledges the obligation to pay all self-employment
and other taxes thereon. Consultant further agrees to
-4-
<PAGE> 5
indemnify and hold harmless the Company and its directors, officers, and
employees from and against all taxes, losses, damages, liabilities, costs and
expenses, including attorney's fees and other legal expenses, arising directly
or indirectly from (i) any negligent, reckless or intentionally wrongful act of
Consultant or Consultant's assistants, employees or agents, (ii) a determination
by a court or agency that the Consultant is not an independent contractor, or
(iii) any breach by the Consultant or Consultant's assistants, employee or
agents of any of the covenants contained in this Agreement.
8. BENEFITS
Consultant acknowledges and agrees and it is the intent of the
parties hereto that Consultant receive no Company-sponsored benefits from the
Company either as a Consultant or employee. Such benefits include, but are not
limited to, paid vacation, sick leave, medical insurance, and 401(k)
participation. If Consultant is reclassified by a state or federal agency or
court as an employee, Consultant will become a reclassified employee and will
receive no benefits except those mandated by state or federal law, even if by
the terms of the Company's benefit plans in effect at the time of such
reclassification Consultant would otherwise be eligible for such benefits.
9. ARBITRATION AND EQUITABLE RELIEF
(a) Except as provided in Section 9(d) below, the Company and
Consultant agree that any dispute or controversy arising out of, relating to or
in connection with the interpretation, validity, construction, performance,
breach or termination of this Agreement shall be settled by binding arbitration
to be held in San Mateo County, California, in accordance with the Commercial
Arbitration Rules, supplemented by the Supplemental Procedures for Large Complex
Disputes, of the American Arbitration Association as then in effect (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court of competent jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of
any dispute or claim, without reference to conflicts of law rules. Consultant
hereby consents to the personal jurisdiction of the state and federal courts
located in California for any action or proceeding arising from or relating to
this Agreement or relating to any arbitration in which the parties are
participants.
(c) The Company and Consultant shall each pay one-half of the
costs and expenses of such arbitration, and each shall separately pay its
counsel fees and expenses unless otherwise required by law.
(d) The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgment of the powers of the arbitrator.
-5-
<PAGE> 6
(e) CONSULTANT HAS READ AND UNDERSTANDS SECTION 9, WHICH
DISCUSSES ARBITRATION. CONSULTANT UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
CONSULTANT AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS
PROVIDED IN SECTION 9(d), AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER
OF CONSULTANT'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP BETWEEN THE PARTIES.
10. GOVERNING LAW
This Agreement shall be governed by the internal substantive
laws, but not the choice of law rules, of the State of California.
11. ENTIRE AGREEMENT
This Agreement is the entire agreement of the parties and
supersedes any prior agreements between them, whether written or oral, with
respect to the subject matter hereof. No waiver, alteration, or modification of
any of the provisions of this Agreement shall be binding unless in writing and
signed by duly authorized representatives of the parties hereto.
12. ATTORNEY'S FEES
In any court action at law or equity which is brought by one of
the parties to enforce or interpret the provisions of this Agreement, the
prevailing party will be entitled to reasonable attorney's fees, in addition to
any other relief to which that party may be entitled.
13. SEVERABILITY
The invalidity or unenforceability of any provision of this
Agreement, or any terms thereof, shall not affect the validity of this Agreement
as a whole, which shall at all times remain in full force and effect.
14. INDEMNIFICATION
Company will indemnify and hold Consultant harmless from and
against expenses, damages, claims, suits, actions, judgements and costs
(including but not limited to attorneys' fees) arising from or in any way
connected with any claim, action or suit that arises from Consultant's
endorsements of the Company products or the performance of his obligations under
this Agreement. Company's obligation to defend and indemnify Consultant with
respect to claims asserted by a third party is conditioned upon Consultant (1)
giving prompt written notice to Company of the claim, (2) allowing Company to
have sole and exclusive control of the defense of the claim and any settlement
negotiations including the exclusive authority to compromise any claim and make
all strategy decisions regarding all facets of the litigation or
-6-
<PAGE> 7
matter, and (3) at Company's reasonable request and expenses assisting Company
in such defense.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CONSULTANT
Ralph Kimball [Associates, Inc.]
By: /s/ Ralph Kimball
--------------------------------------------
Title: President
-----------------------------------------
Address: 13150 Highway 9 Boulder Creek
---------------------------------------
CA 95036
---------------------------------------
COMPANY
SAGENT TECHNOLOGY, INC.
By: /s/ John Zicker, VP Technology
--------------------------------------------
Title: VP Technology
-----------------------------------------
Address: 225 East Bayshore Rd., Palo Alto,
---------------------------------------
CA
---------------------------------------
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<PAGE> 8
EXHIBIT A
SERVICES AND COMPENSATION
1. CONTACT. Consultant's principal Company contact:
Name: John Zicker
Title: Vice President of Technology
2. SERVICES
Consultant shall perform and the Company shall pay for the following
work:
Category I
a. Consultant shall commit an average of one business week during
each three month period commencing with the Effective Date of
the Agreement to performing the services described below in
subsection b;
b. Consultant shall deliver product specifications and design
reviews to the Company. The subject matter to these product
specifications and design reviews will be mutually agreed upon
by Consultant and Company prior to their preparation. Company
agrees to reasonably accept these product specifications and
design reviews as satisfactory, bearing in mind the constraint
of one week's work per quarter in the investigation and
preparation of these product specifications and design reviews.
Upon request by the Company, additional specification and design
work can be provided at Consultant's discretion at Consultant's
normal daily consulting fee; and
c. Name and Likeness. Consultant hereby grants to Company the
exclusive worldwide right and license within the Market, as
defined herein, during the term of this Agreement to use Ralph
Kimball's name, likeness, voice, signature, initials, photograph
and endorsement solely in connection with the advertising,
marketing and promotion in all forms of media of Company
products, subject to the terms and conditions of this Agreement,
Consultant agrees to not take any action inconsistent with the
endorsement of the Company products including but not limited to
(a) discouraging use of the Company products in any way and (b)
knowingly allowing Ralph Kimball's name, likeness, voice,
signature, initials, photograph or endorsement to be used in
connection with the advertising of other products in the Market.
For purposes of this Agreement, "Market" shall mean the data
mart and data warehousing markets excluding Consultant's
existing relationships with Ralph Kimball Associates, Red Brick
Systems, Inc., if..., and Wiley Computer Books. It is understood
that the existing
<PAGE> 9
activities of Ralph Kimball Associates excluded from the above
definition of Market involve Consultant performing all forms of
data warehouse designs, performing all forms of data warehouse
reviews, conducting public and private seminars on a wide range
of data mart and data warehouse topics, providing briefings for
consulting organizations and hardware companies, meeting with
the customers of consulting organization and hardware companies,
entering into confidential relationship with consulting
organizations and hardware companies, writing books and articles
on data mart and data warehouse topics for a variety of
publications, and that Ralph Kimball Associates and any of the
entities who are clients of Ralph Kimball Associates may use
Ralph Kimball's name and likeness in connection with the
delivery of the above described services by Ralph Kimball
Associates.
Company will consult with Consultant and obtain his approval
before introducing any models or lines of Company products to be
endorsed by Consultant. In addition, Company will submit to
Consultant a true and complete copy of all promotional or
advertising material using Consultant's endorsement at least ten
(10) days prior to the intended release of such material to the
general public for Consultants approval, which may be withheld
only on the grounds that direct quotations attributable to
Kimball are inaccurate or misleading. If within three (3)
business days after receipt of a copy of such material,
Consultant shall not have provided a written objection to such
material, Consultant will have been deemed to have accepted and
consented to such material. If Consultants provide such a
written objection within three (3) business days after receipt
of a copy thereof from Company the parties will discuss
Kimball's objections and work together in good faith to resolve
such objections as expeditiously as possible and, pending
conclusion of such discussions, Company will refrain from using
such material.
Consultant and company agree that this Agreement does not grant
Company the right to trademark Ralph Kimball's name or likeness
as part of the Company's product development, marketing, sales
or promotional activities.
During the term of this Agreement, Company will supply and
deliver to Consultant the Company's products free of charge in
such quantities as Consultant may reasonably request for his own
use and evaluation. Consultant will at all times during the term
of this Agreement have the right to test and evaluate any
Company products, and the Company will cooperate with Consultant
in all reasonable ways to allow for this reasonable testing and
evaluation of the Company products.
-2-
<PAGE> 10
Category 2
a. Subject to Consultant's previously scheduled activities,
Consultant shall be available for up to ten business days during
each three month period (the "Minimum Quarterly Time
Commitment") commencing with the Effective Date of the Agreement
(each, a "Quarter") to participate in marketing and sales events
as requested by the Company. Company's failure to request
Consultant to participate in marketing and sales events which
will consume Consultant's Minimum Quarterly Time Commitment
shall not constitute a breach by Consultant of its obligations
pursuant to this Agreement, Consultant's failure to meet the
Minimum Quarterly Time Commitment because of inability to
participate in one or more marketing and sales events requested
by the Company due to schedule conflicts also shall not
constitute a breach by Consultant of its obligations pursuant to
this Agreement, but any such days may be added by the Company to
increase Consultant's Minimum Quarterly Time Commitment in one
or more future Quarters. Similarly, in the event that the
Company asks Consultant to spend additional days beyond the
Minimum Quarterly Time Commitment to participate in marketing
and sales events, Consultant may apply the days in excess of the
Minimum Quarterly Time Commitment to offset any failure to have
met or to meet the Minimum Quarterly Time Commitment in a prior
or future Quarter.
3. COMPENSATION
Cash, Reimbursement and Other Compensation
a. The Company shall pay Consultant $2,500 for each day spent
providing the Services listed under Category 2. In areas where
travel is not required, Consultant will charge Company $1,250
for each half day, and in cases where full days of travel are
required or overnight flights are required, an additional full
day at $2,500 per day will be charged to the Company as
incurred.
b. The Company shall reimburse Consultant for reasonable
pre-approved travel, living and other expenses incurred by
Consultant in performing the Services hereunder.
c. Consultant shall submit all statements for Services and expenses
in a form prescribed by the Company and such statement shall be
approved by the contact person listed above.
d. In consideration of the services to be performed by Consultant,
for a period of 90 days from the signing of this Agreement,
Consultant shall be entitled to purchase from the Company (i) a
number of shares of preferred capital stock of the Company equal
to 0.25% of the Company's fully
-3-
<PAGE> 11
diluted outstanding shares immediately prior to such sale at a
purchase price of $2.50 per share pursuant to a stock purchase
agreement mutually agreeable to the parties. Additionally, in
consideration of the services to be performed by Consultant,
Consultant shall be entitled to purchase from the Company (ii) a
number of shares of preferred capital stock equal to 0.75% of
the Company's fully diluted outstanding shares immediately prior
to such sale at the same price per share as offered by the
Company in its next round of financing by participating in such
financing; provided that if the Company does not complete such
financing prior to December 31, 1997, Consultant shall have the
right to purchase such number of shares at a price per share of
$5.00; provided further that if the Company has begun
negotiations with respect to such financing prior to December
31, 1997, Consultant shall have the option to participate in
such financing subsequent to December 31, 1997, rather than to
purchase such shares at $5.00 per share.
Options
Upon execution of this agreement, the Company will issue to Consultant
two options to purchase shares of Common Stock of the Company, based on a
fully-diluted, outstanding capitalization of the Company as of April 7, 1997.
These options are separate from the rights to purchase Company's stock described
in section 3d.
Option 1 Terms:
o 0.75% of Company's fully diluted outstanding shares as of the
signing of this Agreement.
o 1/24th vests on each monthly anniversary of the date of this
agreement.
o Exercise price is $0.25 per share.
o Lock-up period is as defined in the Company's 1995 Stock Plan,
as amended, which is 180 days.
o The 1995 Stock Plan contains early exerciseability provisions,
including Company right of repurchase, which lapses according to
the vesting schedule.
Option 2 Terms:
o 0.25% of Company's fully diluted outstanding shares as of the
signing of this Agreement.
o The shares will vest at the rate of 1/8 for each Quarter over a
two year period provided that Consultant is not in breach of its
obligation to provide services as described in Category 2 of
"Services" above in such quarter.
o Exercise price is $0.25 per share.
-4-
<PAGE> 12
o Lock-up period is as defined in the Company's 1995 Stock Plan,
as amended, which is 180 days.
o The 1995 Stock Plan contains early exerciseability provisions,
including Company right of repurchase, which lapses according to
the vesting schedule.
-5-
<PAGE> 13
o Lock-up period is as defined in the Company's 1995 Stock Plan,
as amended, which is 180 days.
o The 1995 Stock Plan contains early excerciseability provisions,
including Company right of repurchase, which lapses according to
the vesting schedule.
-5-
<PAGE> 1
EXHIBIT 10.28
EXECUTIVE CHANGE OF CONTROL POLICY
In the event of a merger of the Company with or into another corporation
in which the holders of at least 50% of the Company's outstanding voting power
hold less than 50% of the outstanding voting power immediately after such
merger, or the sale of substantially all of the assets of the Company
(collectively, a "Change of Control"), each outstanding Option of the Key
Executives identified by the Board of Directors shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation.
If the Option is assumed after a Change of Control and the Key Executive
remains an employee at the time of such Change of Control, immediately upon such
Change of Control, 50% of the unvested portion of the Option shall accelerate
and become immediately exercisable and the remaining unvested portion of the
Option shall vest according the normal vesting schedule. Thereafter, if during
the one-year period after the date of the Change of Control the Key Executive is
terminated not for Cause or voluntarily terminates employment for Good Reason,
each as defined below, the remaining unvested portion of the Option shall
accelerate and become immediately exercisable.
As used herein, Cause shall mean (i) willful failure by the Key
Executive to substantially perform his duties hereunder, other than a failure
resulting from the Key Executive's complete or partial incapacity due to
physical or mental illness or impairment; (ii) a willful act by the Key
Executive which constitutes misconduct and which is injurious to the Company; or
(iii) a material and willful violation of a federal or state law or regulation
applicable to the business of the Company.
As used herein, "Good Reason" shall mean the following (unless such
event(s) applies generally to all senior management of the Company):
(A) without the Key Executive's express written consent, the
assignment to the Key Executive of any duties or the reduction of the Key
Executive's duties, either of which results in a significant diminution in the
Key Executive's position or responsibilities with the Company in effect
immediately prior to the Change of Control, or the removal of the Key Executive
from such position and responsibilities;
(B) without the Key Executive's express written consent, a
substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Key Executive
immediately prior to such reduction;
(C) a material reduction by the Company in the base salary or
bonus opportunity of the Key Executive as in effect immediately prior to such
reduction;
<PAGE> 2
(D) a material reduction by the Company in the kind or level of
the Key Executive benefits to which the Key Executive is entitled immediately
prior to such reduction with the result that the Key Executive's overall
benefits package is significantly reduced;
(E) the relocation of the Key Executive to a facility or a
location more than 50 miles from the Key Executive's then present location,
without the Key Executive's express written consent; or
(F) any purported termination of the Key Executive's employment
by the Company which is not effected for death, disability or for Cause, or any
purported termination for which the grounds relied upon are not valid.
<PAGE> 1
EXHIBIT 10.29
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
SAGENT TECHNOLOGY, INC.,
TALUS ACQUISITION CORP.,
TALUS, INCORPORATED
AND
CERTAIN OF THE SHAREHOLDERS
OF TALUS, INC.
DATED AS OF FEBRUARY 27, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
THE MERGER.................................................................................................-1-
The Merger......................................................................................-1-
1.2 Effective Time..................................................................................-2-
1.3 Effect of the Merger............................................................................-2-
1.4 Articles of Incorporation; Bylaws...............................................................-2-
1.5 Directors and Officers..........................................................................-2-
1.6 Cash Consideration..............................................................................-2-
1.7 Effect on Capital Stock.........................................................................-3-
1.8 Dissenting Shares...............................................................................-4-
1.9 Surrender of Certificates.......................................................................-4-
1.10 No Further Ownership Rights in Company Common Stock.............................................-6-
1.11 Lost, Stolen or Destroyed Certificates..........................................................-6-
1.12 Taking of Necessary Action; Further Action......................................................-6-
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................................................-6-
2.1 Organization of the Company.....................................................................-6-
2.2 Company Capital Structure.......................................................................-7-
2.3 Subsidiaries....................................................................................-7-
2.4 Authority.......................................................................................-7-
2.5 No Conflict; No Default.........................................................................-7-
2.6 Company Financial Statements....................................................................-8-
2.7 No Undisclosed Liabilities......................................................................-8-
2.8 No Changes......................................................................................-8-
2.9 Tax and Other Returns and Reports...............................................................-9-
2.10 Restrictions on Business Activities............................................................-10-
2.11 Title of Properties; Absence of Liens and Encumbrances; Condition of Equipment.................-11-
2.12 Intellectual Property..........................................................................-11-
2.13 Agreements, Contracts and Commitments..........................................................-12-
2.14 Interested Party Transactions..................................................................-13-
2.15 Governmental Authorization.....................................................................-14-
2.16 Litigation.....................................................................................-14-
2.17 Minute Books...................................................................................-14-
2.18 Brokers' and Finders' Fees.....................................................................-14-
2.19 Insurance......................................................................................-14-
2.20 Compliance With Laws...........................................................................-14-
2.21 Complete Copies of Materials...................................................................-15-
2.22 Binding Agreements; No Default.................................................................-15-
2.23 Environmental Matters..........................................................................-15-
2.24 Employee Matters and Benefit Plans.............................................................-16-
2.25 Representations Complete.......................................................................-19-
2.26 Third Party Consents...........................................................................-20-
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(continued)
<TABLE>
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Page
<S> <C> <C>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB...................................................-20-
3.1 Organization, Standing and Power...............................................................-20-
3.2 Capital Structure..............................................................................-20-
3.3 Authority......................................................................................-21-
3.4 Representations Complete.......................................................................-21-
3.5 Litigation.....................................................................................-21-
3.6 Broker's and Finders' Fees.....................................................................-22-
3.7 Parent Financial Statements....................................................................-22-
3.8 No Undisclosed Liabilities.....................................................................-22-
3.9 No Changes.....................................................................................-22-
3.10 ...............................................................................................-23-
3.12 Restrictions on Business Activities............................................................-24-
3.13 Intellectual Property..........................................................................-24-
3.14 Compliance With Laws...........................................................................-24-
3.11 Agreements, Contracts and Commitments..........................................................-24-
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME.......................................................................-26-
4.1 Conduct of Business of the Company.............................................................-26-
4.2 No Solicitation................................................................................-28-
4.3 Strategic Agreements...........................................................................-29-
ARTICLE V
ADDITIONAL AGREEMENTS.....................................................................................-29-
5.1 Resolutions of Company Shareholders............................................................-29-
5.2 Access to Information..........................................................................-29-
5.3 Expenses.......................................................................................-29-
5.4 Public Disclosure..............................................................................-29-
5.5 Consents.......................................................................................-30-
5.6 FIRPTA.........................................................................................-30-
5.7 Legal Requirements.............................................................................-30-
5.8 Blue Sky Laws..................................................................................-30-
5.9 Best Efforts; Additional Documents and Further Assurances......................................-30-
5.10 Indemnification................................................................................-30-
5.11 Employee Agreements. Each employee of and consultant to the Company will sign
promptly a Proprietary Rights and Confidentiality Agreement in Sagent's standard form..........-31-
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(continued)
<TABLE>
<S> <C> <C>
Page
ARTICLE VI
CONDITIONS TO THE MERGER..................................................................................-31-
6.1 Conditions to Obligations of Each Party to Effect the Merger...................................-31-
6.2 Additional Conditions to Obligations of Company................................................-32-
6.3 Additional Conditions to the Obligations of Parent and Merger Sub..............................-32-
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION...............................................-34-
7.1 Survival of Representations and Warranties.....................................................-34-
7.2 Agreement to Indemnify.........................................................................-34-
7.3 Expiration of Indemnification..................................................................-34-
7.4 Escrow Fund....................................................................................-35-
7.5 Termination of Escrow Fund.....................................................................-35-
7.6 Protection of Escrow Fund......................................................................-35-
7.7 Claims Upon Escrow Fund........................................................................-35-
7.8 Objections to Claims...........................................................................-35-
7.9 Resolution of Conflicts........................................................................-36-
7.10 Distribution Upon Termination of Escrow Period.................................................-37-
7.11 Shareholders' Agent; Power of Attorney.........................................................-37-
7.12 Actions of the Shareholders' Agent.............................................................-38-
7.13 Third-Party Claims.............................................................................-38-
7.14 Escrow Agent's Duties..........................................................................-38-
7.15 No Joint Liability; Maximum Liability..........................................................-39-
7.16 Remedies.......................................................................................-39-
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER.........................................................................-39-
8.1 Termination....................................................................................-39-
8.2 Effect of Termination..........................................................................-40-
8.3 Amendment......................................................................................-40-
8.4 Extension; Waiver..............................................................................-40-
ARTICLE IX
GENERAL PROVISIONS........................................................................................-41-
9.1 Notices........................................................................................-41-
9.2 Interpretation.................................................................................-43-
9.3 Counterparts...................................................................................-43-
9.4 Miscellaneous..................................................................................-43-
</TABLE>
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<PAGE> 5
TABLE OF CONTENTS
(continued)
<TABLE>
<S> <C> <C>
Page
9.5 Governing Law..................................................................................-43-
9.6 Attorneys' Fees................................................................................-43-
9.7 Resolution of Disputes; Stipulation Regarding Confidentiality..................................-43-
9.8 Rules of Construction..........................................................................-44-
</TABLE>
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<PAGE> 6
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered into as of February 27, 1998 among Sagent Technology, Inc., a California
corporation ("Parent"), Talus Acquisition Corp., a Delaware corporation ("Merger
Sub") and a wholly owned subsidiary of Parent, Talus, Incorporated, a Virginia
corporation (the "Company"), Michael P. Venerable and Matthew Comstock as
shareholders of the Company, and Michael P. Venerable, the representative of all
of the shareholders (the "Shareholders' Agent").
RECITALS
A. The Boards of Directors of each of the Company, Parent and Merger
Sub believe it is in the best interests of each company and their respective
stockholders and shareholders that the Company and Merger Sub combine into a
single company through the statutory merger of Company with and into the Merger
Sub (the "Merger") and, in furtherance thereof, have approved the Merger.
B. The Company has 18,290 shares of Common Stock subject to unexercised
options which it expects to be exercised prior to the Closing, as hereinafter
defined. The persons who hold these options (the "Optionees"), Michael P.
Venerable and Matthew E. Comstock are hereinafter referred to collectively as
the "Shareholders." Each of them is listed on Exhibit A hereto. In exercising
their options, the Optionees will appoint Michael P. Venerable as the
Shareholder Agent.
C. Pursuant to the Merger, among other things, the outstanding shares
of Common Stock of the Company ("Company Common Stock") shall be converted into
shares of Series E Preferred Stock of Parent ("Parent Preferred Stock") at the
rate determined herein.
D. The Company, Parent and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement, the Merger
Agreement attached hereto as Exhibit B (the "Merger Agreement") and the
applicable provisions of (i) the California Corporations Code ("California
Law"), (ii) Delaware General Corporation Law ("Delaware Law"), and (iii) the
Virginia Stock Corporation Act ("Virginia Law") (Delaware Law, California Law
and Virginia Law, collectively,
<PAGE> 7
"Applicable Law"), Company shall be merged with and into the Merger Sub, the
separate corporate existence of Company shall cease and the Merger Sub shall
continue as the surviving corporation. The Merger Sub as the surviving
corporation after the Merger is hereinafter sometimes referred to as the
"Surviving Corporation."
1.2 Effective Time. As promptly as practicable after the satisfaction or
waiver of the conditions set forth in Article VI, the parties hereto shall cause
the Merger to be consummated by filing the Merger Agreement with the Secretaries
of State of the States of Delaware and Virginia, in accordance with the relevant
provisions of Applicable Law (the time of the later of such filing being the
"Effective Time"). The Closing of the transaction contemplated hereby (the
"Closing") shall take place at 11:00 a.m. at the offices of Wilson Sonsini
Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California, 94304 on
February 27, 1998, or at such other time, date and location as the parties
hereto agree (the "Closing Date").
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Merger Agreement and the
applicable provisions of Applicable Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4 Articles of Incorporation; Bylaws.
(a) Unless otherwise determined by Parent prior to the Effective
Time, at the Effective Time, the Certificate of Incorporation of Merger Sub
shall be the Certificate of Incorporation of the Surviving Corporation until
thereafter amended as provided by law and such Certificate of Incorporation;
provided, however, that Article I of the Certificate of Incorporation of the
Surviving Corporation shall be amended to read as follows: "The name of the
corporation is Sagent Professional Services, Inc."
(b) The Bylaws of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended.
1.5 Directors and Officers. The director(s) of Merger Sub immediately
prior to the Effective Time shall be the initial director(s) of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The officers of Merger
Sub immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, each to hold office in accordance with the Bylaws of the
Surviving Corporation.
1.6 Cash Consideration. At the Closing, Parent or Merger Sub shall
deliver in the aggregate $1,170,000.00 by check or wire transfer of immediately
available funds, as follows:
-2-
<PAGE> 8
(a) $150,000 to Greater Bay Trust Company, as escrow agent (the
"Escrow Agent"), to be held, administered and released in accordance with the
terms of an Escrow Agreement to be executed by the Shareholders' Agent, Parent,
Merger Sub, Company and the Escrow Agent at the Closing in the form of Exhibit C
attached hereto (the "Escrow Agreement"), which funds shall be held in escrow
until thirty (30) days after such time as Parent's outside public accounting
firm has released its annual audit of the consolidated financial statements
applicable to the Parent for the period ending December 31, 1998 and will be
used to satisfy indemnification claims of Buyer pursuant to Article VII hereof:
and
(b) the balance to Shareholders in such amounts and to persons as
set forth on Exhibit A.
1.7 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or any of
the Shareholders, the following shall occur:
(a) Conversion of Company Common Stock. Each share of common
stock, no par value, of the Company (the "Company Common Stock") issued and
outstanding immediately prior to the Effective Time (other than any Dissenting
Shares (as defined and to the extent provided in Section 1.8(a)) will be
canceled and extinguished and be converted automatically into the right to
receive 2.155 shares (the "Exchange Ratio") of the Parent Preferred Stock.
(b) Capital Stock of Merger Sub. Each share of common stock,
$0.001 par value, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall continue unchanged and remain outstanding as a share of
common stock of the Surviving Corporation. Each stock certificate of Merger Sub
evidencing ownership of any such shares shall continue to evidence ownership of
such shares of capital stock of the Surviving Corporation.
(c) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities convertible into
the common stock of Parent or Company Common Stock), reorganization,
recapitalization or other like change with respect to Parent Preferred Stock or
Company Common Stock occurring after the date hereof and prior to the Effective
Time.
1.8 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, any shares of capital stock of the Company held by a holder who has
exercised dissenters' rights for such shares in accordance with Virginia Law and
who, as of the Effective Time, has not effectively withdrawn or lost such
dissenters rights ("Dissenting Shares"), shall not be converted into or
represent a right to receive Parent Preferred Stock pursuant to Section 1.7, but
the holder thereof shall only be entitled to such rights as are granted by
Virginia Law.
-3-
<PAGE> 9
(b) Notwithstanding the provisions of subsection (a), if any
holder of Dissenting Shares shall effectively withdraw or lose (through failure
to perfect or otherwise) his or her dissenters' rights, then, as of the later of
the Effective Time or the occurrence of such event, such holder's shares shall
automatically be converted into and represent only the right to receive Parent
Preferred Stock and payment for fractional shares as provided in Section 1.7,
without interest thereon, upon surrender of the certificate representing such
shares.
(c) The Company shall give Parent (i) prompt notice of any written
demand received by the Company to require the Company to purchase shares of the
Company's Common Stock pursuant to the applicable provisions of Virginia Law and
(ii) the opportunity to participate in all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Parent, voluntarily make any payment with respect to any such demands
or offer to settle or settle any such demands.
1.9 Surrender of Certificates.
(a) Exchange Agent. Wilson Sonsini Goodrich & Rosati shall act as
exchange agent (the "Exchange Agent") in the Merger.
(b) Parent to Provide Preferred Stock. Promptly after the
Effective Time, Parent shall make available to the Exchange Agent for exchange
in accordance with this Article I, through such reasonable procedures as Parent
may adopt, the shares of Parent Preferred Stock issuable pursuant to Section 1.7
in exchange for outstanding shares of Company Common Stock.
(c) Exchange Procedures. At or before the Effective Time, each
holder of a certificate or certificates (the "Certificates") which immediately
prior to the Effective Time represented outstanding shares of Company Common
Stock shall surrender to the Exchange Agent for cancellation the Certificates,
duly endorsed to Parent or accompanied by duly executed stock powers and
assignments separate from certificate transferring title to such shares to
Parent. Promptly after the Effective Time, and against receipt of such
Certificates, the Exchange Agent shall issue to each tendering holder of a
Certificate a certificate for the number of shares of Parent Preferred Stock to
which such holder is entitled and payment in lieu of fractional shares pursuant
to Section 1.7 hereof and the Certificate so surrendered shall forthwith be
cancelled.
To the extent that any holder of a Certificate does not so surrender such
Certificate at or before the Effective Time, then promptly after the Effective
Time, the Surviving Corporation shall cause to be mailed to each holder of
record of a Certificate or Certificates, (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing shares of Parent
Preferred Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent after the Effective Time, or to such other agent or agents as may
be appointed by Parent, together with such letter of transmittal, duly
-4-
<PAGE> 10
completed and validly executed in accordance with the instructions thereto, the
holder of such Certificate shall be entitled to receive in exchange therefor a
certificate representing the number of whole shares of Parent Preferred Stock
and payment in lieu of fractional shares which such holder has the right to
receive pursuant to Section 1.7, and the Certificate so surrendered shall
forthwith be canceled. Until so surrendered, each outstanding certificate that,
prior to the Effective Time, represented shares of Company Common Stock will be
deemed from and after the Effective Time, for all corporate purposes, other than
the payment of dividends, to evidence the ownership of the number of full shares
of Parent Preferred Stock into which such shares of Company Common Stock shall
have been so converted and the right to receive an amount in cash in lieu of the
issuance of any fractional shares in accordance with Section 1.7.
(d) Distributions With Respect to Unexchanged Shares. No dividends
or other distributions declared or made after the date of this Agreement with
respect to Parent Preferred Stock with a record date after the Effective Time
will be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Preferred Stock represented thereby until the holder of record
of such Certificate shall surrender such Certificate. Subject to applicable law,
following surrender of any such Certificate, there shall be paid to the record
holder of the certificates representing whole shares of Parent Preferred Stock
issued in exchange therefor, without interest, at the time of such surrender,
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Preferred Stock.
(e) Transfers of Ownership. If any certificate for shares of
Parent Preferred Stock is to be issued in a name other than that in which the
certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Parent or any agent designated by it
any transfer or other taxes required by reason of the issuance of a certificate
for shares of Parent Preferred Stock in any name other than that of the
registered holder of the certificate surrendered, or established to the
satisfaction of Parent or any agent designated by it that such tax has been paid
or is not payable.
(f) No Liability. Notwithstanding anything to the contrary in this
Section 1.9, none of the Exchange Agent, the Surviving Corporation or any party
hereto shall be liable to a holder of shares of Parent Preferred Stock for any
amount properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
1.10 No Further Ownership Rights in Company Common Stock. All shares of
Parent Preferred Stock issued upon the surrender for exchange of shares of
Company Common Stock in accordance with the terms hereof (including any cash
paid in respect thereof) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article I.
-5-
<PAGE> 11
1.11 Lost, Stolen or Destroyed Certificates. In the event any
certificates evidencing shares of Company Common Stock shall have been lost,
stolen or destroyed, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed certificates, upon the making of an affidavit of that fact
by the holder thereof, such shares of Parent Preferred Stock and cash for
fractional shares, if any, as may be required pursuant to Section 1.7; provided,
however, that Parent may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Parent or the Exchange
Agent with respect to the certificates alleged to have been lost, stolen or
destroyed.
1.12 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and directors of the
Company and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action, so long as such action is consistent with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub, subject to
the exceptions set forth in the Company Disclosure Schedule attached hereto as
Exhibit E (the "Disclosure Schedule"), as follows:
2.1 Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Virginia. The Company has the corporate power to own its property and to carry
on its business as now being conducted and as proposed to be conducted by the
Company. The Company is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on the business, assets (including
intangible assets), financial condition, results of operations or prospects
("Material Adverse Effect") of the Company. The Company has delivered a true and
correct copy of its Articles of Incorporation and Bylaws, each as amended to
date, to counsel for Parent.
2.2 Company Capital Structure. The authorized capital stock of the
Company consists of 200,000 shares of Common Stock, no par value. There are
102,000 shares of the Company Common Stock issued and outstanding held by the
persons, and in the amounts, set forth on Exhibit A. At the time of the Closing,
such list shall have been appropriately adjusted to reflect option exercises and
stock repurchases since the date hereof. All outstanding shares of Company
Common Stock are duly authorized, validly issued, fully paid and non-assessable
and not subject to preemptive rights created by statute, the Articles of
Incorporation or Bylaws of the Company or any agreement to which the Company
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is a party or by which it is bound. The Company has reserved 98,000 shares of
Common Stock for issuance to employees and consultants pursuant to the Company
Stock Option Plan, of which 18,290 shares are subject to options which have been
exercised effective immediately prior to the Effective Time (at which time the
Company will have outstanding 120,290 shares of Common Stock), and no shares are
subject to outstanding, unexercised options (the "Options"). There are no other
options, warrants, calls, rights, commitments or agreements of any character to
which the Company is a party or by which it is bound obligating the Company to
issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of the capital stock of the Company or
obligating the Company to grant, extend, accelerate the vesting of, change the
price of, or otherwise amend or enter into any such option, warrant, call,
right, commitment or agreement.
2.3 Subsidiaries. The Company does not have and has never had any
subsidiaries or affiliated companies and does not otherwise own and has never
otherwise owned any shares of stock or any interest in, or control, directly or
indirectly, any other corporation, partnership, association, joint venture or
business entity.
2.4 Authority. The Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject only to
the approval of the Merger by the Shareholders as contemplated by Section
6.1(a). This Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company.
2.5 No Conflict; No Default. The execution and delivery of this
Agreement by the Company does not, and the consummation of the transactions
contemplated hereby will not, conflict with, or result in any violation of, or
default under (with or without notice or lapse of time, or both), or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of any benefit under (i) any provision of the Articles of Incorporation or
Bylaws, each as amended as of the date hereof, of the Company or (ii) any other
material mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or its properties or
assets. No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality ("Governmental Entity"), is
required by or with respect to the Company in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of the Merger Agreement with the Virginia and
Delaware Secretaries of State, (ii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws and the laws of any foreign country
and (iii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on the Company.
2.6 Company Financial Statements. Section 2.6 of the Company Disclosure
Schedule includes the Company's unaudited balance sheet as of February 25, 1998
(the "Company Balance Sheet").
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2.7 No Undisclosed Liabilities. The Company does not have any
liabilities, either accrued or contingent (whether or not required to be
reflected in financial statements in accordance with generally accepted
accounting principles), and whether due or to become due, which individually or
in the aggregate are material and (i) have not been reflected in the Company
Balance Sheet, (ii) have not been specifically described in this Agreement or in
the Company Schedules or (iii) are not normal or recurring liabilities incurred
since February 25, 1998 in the ordinary course of business consistent with past
practices.
2.8 No Changes. Since the date of the Company Balance Sheet there has
not been, occurred or arisen any:
(a) material adverse change in the financial condition,
liabilities, assets, business, or prospects of the Company;
(b) amendments or changes in the Articles of Incorporation or
Bylaws of the Company;
(c) capital expenditure by the Company, either individually or in
the aggregate, exceeding $5,000.
(d) destruction, damage to, or loss of any assets of the Company
(whether or not covered by insurance) that constitutes a Material Adverse Effect
on the Company;
(e) labor trouble or claim of wrongful discharge of which the
Company has received written notice or of which the Company is aware, or other
unlawful labor practice or action;
(f) change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by the Company;
(g) revaluation by the Company of any of its assets;
(h) declaration, setting aside, or payment of a dividend or other
distribution with respect to the shares of the Company, or any direct or
indirect redemption, purchase or other acquisition by the Company of any of its
shares;
(i) increase in the salary or other compensation payable or to
become payable by the Company to any of its officers, directors or employees, or
the declaration, payment, or commitment or obligation of any kind for the
payment, by the Company, of a bonus or other additional salary or compensation
to any such person;
(j) acquisition, sale or transfer of any material asset of the
Company other than in the ordinary course of business;
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(k) amendment or termination of any material contract, agreement
or license to which the Company is a party;
(l) loan by the Company to any person or entity, or guaranty by
the Company of any loan;
(m) waiver or release of any material right or claim of the
Company, including any write-off or other compromise of any account receivable
of the Company;
(n) the commencement or notice or threat of commencement of any
governmental proceeding against or investigation of the Company or its affairs,
to the best of the Company's knowledge;
(o) other event or condition of any character that has or might
reasonably be expected to have a Material Adverse Effect on the Company;
(p) issuance or sale by the Company of any of its shares or of any
other of its securities except for issuances or sales as a result of exercises
of stock options granted under the Company Stock Option Plan or rights
previously granted to purchase shares of the Company's capital stock;
(q) change in pricing or royalties set or charged by the Company;
or
(r) negotiation or agreement by the Company to do any of the
things described in the preceding clauses (a) through (q) (other than
negotiations with Parent and its representatives regarding the transactions
contemplated by this Agreement).
2.9 Tax and Other Returns and Reports.
(a) Definition of Taxes. For the purposes of this Agreement, "Tax"
or, collectively, "Taxes," means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts and any obligations under any agreements or arrangements with
any other person with respect to such amounts and including any liability for
taxes of a predecessor entity.
(b) Tax Returns and Audits.
(i) The Company as of the Closing Date will have prepared
and timely filed or made a timely request for extension for all required
federal, state, local and foreign returns, estimates, information statements and
reports (collectively the "Returns") relating to any and all Taxes concerning
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<PAGE> 15
or attributable to the Company or its operations and such Returns are true and
correct and have been completed in accordance with applicable law.
(ii) The Company as of the Closing Date: (A) will have paid
or accrued all Taxes it is required to pay or accrue and (B) will have withheld
and timely remitted with respect to its employees all federal and state income
taxes, FICA, FUTA and other Taxes required to be withheld and remitted.
(iii) There are no liens, pledges, charges, claims, security
interests or other encumbrances of any sort ("Liens") on the assets of the
Company relating to or attributable to Taxes other than Liens for taxes not yet
due and payable.
(iv) The Company's tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income tax
deductions is properly reflected on the Company's tax books and records.
(v) The Company has established (and until the Effective
Time will establish) on its respective books and records reserves (to be
specifically designated as an increase to current liabilities) that are adequate
for the payment of all taxes not yet due and payable.
(vi) No federal, state, local or foreign audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Returns.
(vii) The Company is not a party to any tax-sharing or
allocation agreement, nor does the Company owe any amount under any tax-sharing
or allocation agreement.
2.10 Restrictions on Business Activities. There is no material agreement,
judgment, injunction, order or decree binding upon the Company which has or
could reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of the Company, any acquisition of property by
the Company or the conduct of business by the Company as currently conducted or
as currently proposed to be conducted.
2.11 Title of Properties; Absence of Liens and Encumbrances; Condition of
Equipment.
(a) The Company neither owns nor leases any real property.
(b) The Company has good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its material
tangible properties and assets, real, personal and mixed, used in its business,
free and clear of any liens, charges, pledges, security interests or other
encumbrances except for such imperfections of title and encumbrances, if any,
which are not substantial in character, amount or extent, and which do not
materially detract from the value, or interfere with the present use, of the
property subject thereto or affected thereby.
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<PAGE> 16
(c) Section 2.11(c) of the Company Disclosure Schedule set forth
all equipment (the "Equipment") owned or leased by the Company. The Equipment
is, taken as a whole, (i) adequate for the conduct of the business of the
Company consistent with its past practice, (ii) suitable for the uses to which
it is currently employed, (iii) in good operating condition, (iv) regularly and
properly maintained, and (v) not obsolete, dangerous or in need of renewal or
replacement, except for renewal or replacement in the ordinary course of
business.
2.12 Intellectual Property. The "Company Intellectual Property Rights"
include all patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, internet domain names, trade secrets, maskworks, net
lists, schematics, technology, know-how, computer software programs or
applications and tangible or intangible proprietary information or material that
are used or currently proposed to be used in the business of the Company as
currently conducted. Section 2.12 of the Company Disclosure Schedule sets forth
a non-exclusive list of all patents, trademarks, copyrights, trade names and
service marks, and any applications for registration or registrations therefor,
included in the Company Intellectual Property Rights, and specifies the
jurisdictions in which any such registration has been filed, including the
respective registration or application numbers, dates and the names of all
registered owners. Section 2.12 of the Company Disclosure Schedule also sets
forth a list of the Company's currently marketed software products and an
indication as to which, if any, of such software products have been registered
for copyright protection with the United States Copyright Office and any foreign
offices and by whom such items have been registered. The Company is not, nor
will it be as a result of the execution and delivery of this Agreement or the
performance of its obligations hereunder, in violation of any license,
sublicense or agreement described in Section 2.12 of the Company Disclosure
Schedule. The Company is either (i) the sole and exclusive owner of, with all
right, title and interest in and to (free and clear of any liens or
encumbrances), the Company Intellectual Property Rights, and has sole and
exclusive rights (and is not contractually obligated to pay any compensation to
any third party in respect thereof) to the use thereof or (ii) is a licensee of
such Company Intellectual Property Rights used in the business of the Company as
currently conductd. No claims with respect to the Company Intellectual Property
Rights have been asserted or, to the knowledge of the Company, are threatened by
any person, nor does the Company know of any valid grounds for any bona fide
claims (i) to the effect that the manufacture, sale, licensing or use of any
product as now used, sold or licensed or proposed for use, sale or license by
the Company infringes on any copyright, patent, trade mark, service mark or
trade secret, (ii) against the use by the Company of any trademarks, trade
names, trade secrets, copyrights, patents, technology, know-how or computer
software programs and applications used in the Company's business as currently
conducted or as proposed to be conducted, or (iii) challenging the ownership,
validity or effectiveness of any of the Company Intellectual Property Rights.
All registrations for trademarks, service marks and copyrights held by the
Company are valid and subsisting. There is no material unauthorized use,
infringement or misappropriation of any of the Company Intellectual Property
Rights by any third party, including any employee or former employee of the
Company. The Company (i) has not been sued or charged in writing as a defendant
in any claim, suit, action or proceeding which involves a claim of infringement
of any patents, trademarks, service marks, copyrights or violation of any trade
secret or other proprietary right of any third party and which has not been
finally terminated prior to the date hereof, (ii) has no knowledge of any such
charge or claim and (iii) has no knowledge of any infringement liability with
respect to, or infringement or
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<PAGE> 17
violation by, the Company of any patent, trademark, service mark, copyright,
trade secret or other proprietary right of another. None of the Company
Intellectual Property Rights are subject to any outstanding order, judgment,
decree, stipulation or agreement restricting in any manner the use or licensing
thereof by the Company. The Company has not entered into any agreement to
indemnify any other person against any charge of infringement of any of the
Company Intellectual Property Rights.
2.13 Agreements, Contracts and Commitments. Except as disclosed in
Section 2.13 of the Company Disclosure Schedule, the Company does not have and
is not a party to:
(a) any collective bargaining agreements,
(b) any agreements that contain any unpaid severance liabilities
or obligations,
(c) any bonus, deferred compensation, incentive compensation,
pension, profit-sharing or retirement plans, or any other employee benefit plans
or arrangements,
(d) any employment or consulting agreement, contract or commitment
with an employee or individual consultant or salesperson or consulting or sales
agreement, contract or commitment with a firm or other organization, not
terminable by the Company on thirty days notice without liability, except to the
extent general principles of wrongful termination law may limit the Company's
ability to terminate employees at will,
(e) agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement,
(f) any fidelity or surety bond or completion bond,
(g) any lease of personal property having a value individually in
excess of $5,000,
(h) any agreement of indemnification or guaranty not entered into
in the ordinary course of business,
(i) any agreement, contract or commitment containing any covenant
limiting the freedom of the Company to engage in any line of business or compete
with any person,
(j) any agreement, contract or commitment relating to capital
expenditures and involving future obligations in excess of $5,000,
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(k) any agreement, contract or commitment relating to the
disposition or acquisition of assets not in the ordinary course of business or
any ownership interest in any corporation, partnership, joint venture or other
business enterprise,
(l) any mortgages, indentures, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit, including guaranties referred to in clause (h)
hereof,
(m) any purchase order or contract for the purchase of raw
materials or acquisition of assets involving $5,000 or more,
(n) any construction contracts,
(o) any distribution, joint marketing or development agreement,
(p) any other agreement, contract or commitment which involves
$50,000 or more and is not cancelable without penalty within thirty (30) days,
or
(q) any agreement which is otherwise material to the Company's
business.
The Company has not breached, or received in writing any claim or threat
that it has breached, any of the terms or conditions of any material agreement,
contract or commitment to which it is bound (including those set forth in any of
the lists separately certified by the Company) in such manner as would permit
any other party to cancel or terminate the same.
2.14 Interested Party Transactions. Except as disclosed in Section 2.14
of the Company Disclosure Schedule, no officer or director of the Company or
person who owns at least ten percent (10%) of the outstanding stock of the
Company (nor any parent, child or spouse of any of such persons, or any trust,
partnership or corporation in which any of such persons has or has had an
interest), has or has had, directly or indirectly, (i) an interest in any entity
which furnished or sold, or furnishes or sells, services or products which the
Company furnishes or sells, or proposes to furnish or sell, or (ii) any interest
in any entity which purchases from or sells or furnishes to, the Company, any
goods or services, or (iii) a beneficial interest in any contract or agreement
described in Section 2.13; provided, that ownership of no more than one percent
(1%) of the outstanding voting stock of a publicly traded corporation shall not
be deemed an "interest in any entity" for purposes of this Section 2.14.
2.15 Governmental Authorization. Section 2.15 of the Company Disclosure
Schedule accurately lists each material federal, state, county, local or foreign
governmental consent, license, permit, grant, or other authorization issued to
the Company (i) pursuant to which the Company currently operates or holds any
interest in any of its properties or (ii) which is required for the operation of
its business or the holding of any such interest (herein collectively called
"Company Authorizations"), which Company Authorizations are in full force and
effect and constitute all Company Authorizations required to permit the Company
to operate or conduct its business or hold any interest in its properties.
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2.16 Litigation. To the best of the Company's knowledge, there is no
action, suit, claim or proceeding of any nature pending, or to the Company's
knowledge, threatened against the Company, its properties or any of its officers
or directors, in their capacities as agents of the Company. To the best of the
Company's knowledge, there is no investigation pending or, to the Company's
knowledge, threatened against the Company, its properties or any of its officers
or directors, in their capacities as agents of the Company by or before any
governmental entity. To the best of the Company's knowledge, no governmental
entity has at any time challenged or questioned the legal right of the Company
to manufacture, offer or sell any of its products in the present manner or style
thereof.
2.17 Minute Books. The minute books of the Company made available to
counsel for Parent contain complete and accurate minutes of all meetings of
directors and shareholders or actions by written consent since the time of
incorporation of the Company.
2.18 Brokers' and Finders' Fees. The Company has not incurred, nor will
it incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or any similar charges in connection with this Agreement
or any transaction contemplated hereby.
2.19 Insurance. The Company has no insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of the Company.
2.20 Compliance With Laws. Except as disclosed in Section 2.20 of the
Company Disclosure Schedule, and except as to matters of which the Company is
not aware and which do not either individually or in the aggregate result in a
Material Adverse Effect with respect to the Company, the Company has complied
with, is not in violation of, and has not received any notices of violation with
respect to, any federal, state or local statute, law or regulation with respect
to the conduct of its business, or the ownership or operation of its business.
2.21 Complete Copies of Materials. The Company has delivered or made
available true and complete copies of each document (or summaries of same) which
has been requested by Parent or its counsel.
2.22 Binding Agreements; No Default. Each of the contracts, agreements
and other instruments shown on the Exhibits or on any lists or statements set
forth in the Company Disclosure Schedule to which the Company is a party is a
legal, binding, and enforceable obligation by or against the Company (assuming
such contract, agreement or instrument has been duly authorized, executed and
delivered by the other party(ies) thereto and except to the extent that its
non-enforceability would not have a Material Adverse Effect on the Company), and
no party with whom the Company has an agreement or contract is, to the Company's
knowledge, in material default thereunder or has breached any material terms or
provisions thereof (subject to all applicable bankruptcy, insolvency,
reorganization and other laws applicable to creditors' rights and remedies and
to the exercise of judicial discretion in accordance with general principles of
equity).
2.23 Environmental Matters.
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(a) Hazardous Material. Except as set forth in Schedule 2.23, the
Company has not: (i) operated any underground storage tanks at any property that
the Company has at any time owned, operated, occupied or leased; or (ii)
illegally released any amount of any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law as radioactive,
toxic, hazardous or otherwise a danger to health or the environment, including,
without limitation, PCBs, asbestos, petroleum, urea-formaldehyde and all
substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the United States Resource Conservation
and Recovery Act of 1976, as amended, and the regulations promulgated pursuant
to said laws, (a "Hazardous Material"), but excluding janitorial supplies
properly and safely maintained. Except as set forth in Schedule 2.23, no
Hazardous Materials are present, as a result of the deliberate actions of the
Company or, to the Company's knowledge, as a result of any actions of any third
party or otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that the Company has at
any time owned, operated, occupied or leased.
(b) Hazardous Materials Activities. Except as set forth in
Schedule 2.23, the Company has not transported, stored, used, manufactured,
disposed of, released or exposed its employees or others to Hazardous Materials
in violation of any law in effect on or before the Closing Date, nor has the
Company disposed of, transported, sold, or manufactured any product containing a
Hazardous Material (any or all of the foregoing being collectively referred to
as "Hazardous Materials Activities") in violation of any rule, regulation,
treaty or statute promulgated by any Governmental Entity in effect prior on or
before the date hereof to prohibit, regulate or control Hazardous Materials or
any Hazardous Material Activity.
(c) Permits. The Company currently holds all environmental
approvals, permits, licenses, clearances and consents (the "Environmental
Permits") necessary for the conduct of the Company's Hazardous Material
Activities and other businesses of the Company as such activities and businesses
are currently being conducted.
(d) Environmental Liabilities. Except as set forth in Schedule
2.23(d), no action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending or, to the Company's knowledge, threatened
against the Company concerning any Environmental Permit, Hazardous Material or
any Hazardous Materials Activity of the Company and the Company is not aware of
any fact or circumstance which could involve the Company in any environmental
litigation or impose upon the Company any environmental liability.
2.24 Employee Matters and Benefit Plans.
(a) Definitions. With the exception of the definition of
"Affiliate" set forth in Section 2.24(a)(i) below (such definition shall only
apply to this Section 2.24), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
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(i) "Affiliate" shall mean any other person or entity under
common control with the Company within the meaning of Section 414(b), (c), (m)
or (o) of the Code and the regulations thereunder;
(ii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;
(iii) "Company Employee Plan" shall refer to any plan,
program, policy, practice, contract, agreement or other arrangement providing
for compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or remuneration
of any kind, whether formal or informal, funded or unfunded, including without
limitation, each "employee benefit plan", within the meaning of Section 3(3) of
ERISA which is or has been maintained, contributed to, or required to be
contributed to, by the Company or any Affiliate for the benefit of any
"Employee" (as defined below), and pursuant to which the Company or any
Affiliate has or may have any material liability contingent or otherwise;
(iv) "Employee" shall mean any current, former, or retired
employee, officer, or director of the Company or any Affiliate;
(v) "Employee Agreement" shall refer to each management,
employment, severance, consulting, relocation, repatriation, expatriation, visa,
work permit or similar agreement or contract between the Company or any
Affiliate and any Employee or consultant;
(vi) "IRS" shall mean the Internal Revenue Service;
(vii) "Multiemployer Plan" shall mean any "Pension Plan" (as
defined below) which is a "multiemployer plan", as defined in Section 3(37) of
ERISA; and
(viii) "Pension Plan" shall refer to each Company Employee
Plan which is an "employee pension benefit plan", within the meaning of Section
3(2) of ERISA.
(b) Schedule. Schedule 2.24(b) contains an accurate and complete
list of each Company Employee Plan and each Employee Agreement, together with a
schedule of all liabilities under any Employee Agreement, whether or not
accrued, under each such Company Employee Plan or Employee Agreement. The
Company does not have any stated plan or commitment to establish any new Company
Employee Plan or Employee Agreement, to modify any Company Employee Plan or
Employee Agreement (except to the extent required by law or to conform any such
Company Employee Plan or Employee Agreement to the requirements of any
applicable law, in each case as previously disclosed to Parent in writing, or as
required by this Agreement), or to enter into any Company Employee Plan or
Employee Agreement.
(c) Documents. The Company has provided access to Parent (i)
correct and complete copies of all documents embodying or relating to each
Company Employee Plan and each
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<PAGE> 22
Employee Agreement including all amendments thereto and written interpretations
thereof; (ii) the most recent annual actuarial valuations, if any, prepared for
each Company Employee Plan; (iii) the three most recent annual reports (Series
5500 and all schedules thereto), if any, required under ERISA or the Code in
connection with each Company Employee Plan or related trust; (iv) if the Company
Employee Plan is funded, the most recent annual and periodic accounting of
Company Employee Plan assets; (v) the most recent summary plan description
together with the most recent summary of material modifications, if any,
required under ERISA with respect to each Company Employee Plan; (vi) all IRS
determination letters and rulings relating to Company Employee Plans and copies
of all applications and correspondence to or from the IRS or the Department of
Labor ("DOL") with respect to any Company Employee Plan; (vii) in the case of
Multiemployer Plans, all valuation reports, summaries of contributions and
statements or schedules or notices of liabilities received from such
Multiemployer Plan at any time during the three years preceding the date of this
Agreement; (viii) all communications material to any Employee or Employees
relating to any Company Employee Plan and any proposed Company Employee Plans,
in each case, relating to any amendments, terminations, establishments,
increases or decreases in benefits, acceleration of payments or vesting
schedules or other events which would result in any material liability to the
Company; and (ix) all registration statements and prospectuses prepared in
connection with each Company Employee Plan.
(d) Employee Plan Compliance. Except as set forth on Schedule
2.24(d), (i) the Company has performed in all material respects all obligations
required to be performed by it under each Company Employee Plan and each Company
Employee Plan has been established and maintained in all material respects in
accordance with its terms and in compliance with all applicable laws, statutes,
orders, rules and regulations, including but not limited to ERISA or the Code;
(ii) no "prohibited transaction", within the meaning of Section 4975 of the Code
or Section 406 of ERISA, has occurred with respect to any Company Employee Plan;
(iii) there are no actions, suits or claims pending, or, to the knowledge of the
Company, threatened or anticipated (other than routine claims for benefits)
against any Company Employee Plan or against the assets of any Company Employee
Plan; and (iv) each Company Employee Plan can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms,
without liability to the Company, Parent or any of its Affiliates (other than
ordinary administration expenses typically incurred pursuant to an amendment or
a termination event); (v) there are no inquiries or proceedings pending or, to
the knowledge of the Company or any Affiliates, threatened by the IRS or DOL
with respect to any Company Employee Plan; and (vi) neither the Company nor any
Affiliate is subject to any penalty or tax with respect to any Company Employee
Plan under Section 402(i) of ERISA or Section 4975 through 4980 of the Code.
(e) Pension Plans. Except as set forth in Schedule 2.24(e), the
Company does not now, nor has it ever, maintained, established, sponsored,
participated in, or contributed to, any Pension Plan which is subject to Part 3
of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code.
(f) Multiemployer Plans. Except as set forth in Schedule 2.24(f),
at no time has the Company contributed to any Multiemployer Plan.
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(g) The Company has paid all premiums (and interest charges and
penalties for late payment, if applicable) due the Pension Benefit Guarantee
Corporation ("PBGC") with respect to each Pension Plan for each plan year they
are up for which premiums are required. The Company has not engaged in, or is a
successor or parent corporation to an entity that has engaged in, a transaction
described in Section 4069 of ERISA. There has been no "reportable event" (as
defined in Section 4043(b) of ERISA and the PBGC regulations under such Section)
with respect to any Pension Plan. No filing has been made by the Company with
the PBGC, and no proceeding has been commenced by the PBGC, to terminate any
Pension Plan. No condition exists and no event has occurred that would
constitute grounds for the termination of any Pension Plan by the PBGC. The
Company has not, at any time, (1) ceased operations in a facility so as to
become subject to the provisions of Section 4062(e) of ERISA, (2) withdrawn as a
substantial employer so as to become subject to provisions of Section 4063 of
ERISA, or (3) ceased to making contributions on or before the effective date to
any Pension Plan subject to Section 4064(a) of ERISA to which the Company made
contributions during the six years prior to the effective date. The Company has
not incurred any material liability at any time under Title IV of ERISA arising
in Multiemployer Plan covered or previously covered by Title IV of ERISA. If a
"complete withdrawal" by the Company were to occur as of the Closing Date with
respect to all Multiemployer Plans, the Company would not incur any withdrawal
liability under Title IV of ERISA.
(h) No Post-Employment Obligations. Except as set forth in
Schedule 2.24(h), no Company Employee Plan provides, or has any liability to
provide, life insurance, medical or other employee benefits to any Employee upon
his or her retirement or termination of employment for any reason, except as may
be required by statute.
(i) Effect of Transaction.
(i) Except as set forth on Schedule 2.24(i)(i), the
execution of this Agreement and the consummation of the transactions
contemplated hereby will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any Company Employee
Plan, Employee Agreement, trust or loan that will or may result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.
(ii) Except as set forth on Schedule 2.24(i)(ii), no payment
or benefit which will or may be made by the Company or any of its affiliates
with respect to any Employee will be characterized as an "excess parachute
payment", within the meaning of Section 280G(b)(1) of the Code.
(j) Employment Matters. The Company (i) is in compliance in all
material respects with all applicable foreign, federal, state and local laws,
rules and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to
Employees; (ii) has withheld all amounts required by law or by agreement to be
withheld from the wages, salaries and other payments to Employees; (iii) is not
liable for any arrears of wages or any taxes or any penalty for failure to
comply with any of the foregoing; and (iv) is not liable for any
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payment to any trust or other fund or to any governmental or administrative
authority, with respect to unemployment compensation benefits, social security
or other benefits or obligations for Employees (other than routine payments to
be made in the normal course of business and consistent with past practice).
(k) Labor. No work stoppage or labor strike against the Company is
pending or, to the best knowledge of the Company, threatened. Except as set
forth in Schedule 2.24(k), the Company is not involved in or, to the knowledge
of the Company, threatened with, any labor dispute, grievance, or litigation
relating to labor, safety or discrimination matters involving any Employee,
including, without limitation, charges of unfair labor practices or
discrimination complaints, which, if adversely determined, would, individually
or in the aggregate, result in a material liability to the Company or the loss
of a material benefit by the Company. Neither the Company nor any of its
subsidiaries has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act which would, individually or in the aggregate,
directly or indirectly result in a material liability to the Company or the loss
of a material benefit by the Company. Except as set forth in Schedule 2.24(k),
the Company is not presently, nor has it been in the past, a party to, or bound
by, any collective bargaining agreement or union contract with respect to
Employees and no collective bargaining agreement is being negotiated by the
Company.
2.25 Representations Complete. None of the representations or warranties
made by the Company, nor any statement made in any list or other statement
separately certified by the Company, Exhibit or certificate furnished by the
Company pursuant to this Agreement, when all such documents are read together in
their entirety, contains or will contain any untrue statement of a material fact
at the Effective Time, or omits or will omit to state any material fact
necessary in order to make the statements contained herein or therein, in the
light of the circumstances under which made, not misleading.
2.26 Third Party Consents. No consent or approval is needed from any
third party except as disclosed in Section 2.26 of the Company Disclosure
Schedule in order to effect the Merger, this Agreement or any of the
transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company, Michael
Venerable and Matthew Comstock, subject to the exceptions previously certified
in writing by Parent or Merger Sub, as follows:
3.1 Organization, Standing and Power. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Company and Merger
Sub are duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which the failure to be so qualified would
have a Material Adverse Effect on the business,
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assets (including intangible assets), financial condition, results of operations
or prospects of the Company and Merger Sub, as appropriate. Each of Parent and
Merger Sub has the corporate power to own its properties and to carry on its
business as now being conducted. Parent has delivered a true and correct copy of
the Certificate or Articles of Incorporation and Bylaws of each of Parent and
Merger Sub, as amended to date, to counsel for the Company.
3.2 Capital Structure.
(a) The authorized stock of Parent consists of 25,000,000 shares
of Common Stock, par value $0.001 of which 3,461,284 shares were issued and
outstanding as of February 11, 1998, and 15,555,555 shares of Preferred Stock,
12,435,415 of which are issued or outstanding as of February 11, 1998. The
authorized capital stock of Merger Sub consists of 1,000 shares of Common Stock,
par value $0.001, 1,000 shares of which, as of the date hereof, are issued and
outstanding and are held by Parent. All such shares have been duly authorized,
and all such issued and outstanding shares have been validly issued, are fully
paid and nonassessable and are free of any liens or encumbrances other than any
liens or encumbrances created by or imposed upon the holders thereof. A warrant
to purchase 70,000 shares of Common Stock has been granted, for which the
Company has reserved 70,000 shares of Common Stock for issuance. A warrant to
purchase 42,222 shares of Series A Preferred Stock has been granted, for which
the Company has reserved 42,222 shares of Series A Preferred Stock for issuance
upon the exercise of such warrant and 42,222 shares of Common Stock for issuance
upon the conversion of such Series A Preferred Stock. Warrants to purchase an
aggregate of 60,695 shares of Series B Preferred Stock have been granted, for
which the Company has reserved 60,695 shares of Series B Preferred Stock for
issuance upon the exercise of such warrants and 60,695 shares of Common Stock
for issuance upon the conversion or such Series B Preferred Stock. A warrant to
purchase 22,400 shares of Series C Preferred Stock has been granted, for which
the Company has reserved 22,400 shares of Series C Preferred Stock for issuance
upon the exercise of such warrant and 22,400 shares of Common Stock for issuance
upon the conversion of such Series C Preferred Stock. As of February 11, 1998,
there were 2,800,000 shares of Common Stock reserved for issuance under the
Company's Amended 1995 Stock Plan and 268,255 shares of Common Stock issued
which were not under the Company's Amended 1995 Stock Plan. Except as set forth
above, there are no other options, warrants or other rights to purchase any of
the Company's authorized and unissued capital stock.
(b) The shares of Parent Preferred Stock to be issued pursuant to
the Merger will be duly authorized, validly issued, fully paid, non-assessable.
3.3 Authority. Parent and Merger Sub have all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Parent and Merger Sub. This
Agreement has been duly executed and delivered by Parent and Merger Sub and
constitutes the valid and binding obligations of Parent and Merger Sub. The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both), or
give rise to a right of termination,
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cancellation or acceleration of any obligation or to loss of a benefit under (i)
any provision of the Certificates of Incorporation or Bylaws of Parent and
Merger Sub or (ii) any mortgage, indenture, lease, contract or other agreement
or instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or its
properties or assets. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity, is required
by or with respect to Parent and Merger Sub in connection with the execution and
delivery of this Agreement by Parent and Merger Sub or the consummation by
Parent and Merger Sub of the transactions contemplated hereby, except for (i)
the filing of the Merger Agreement with the California and Delaware Secretaries
of State, (ii) any filings as may be required under applicable state and federal
securities laws and the laws of any foreign country, and (iii) such other
consents, authorizations, filings, approvals and registrations which if not
obtained or made would not have a Material Adverse Effect on Parent.
3.4 Representations Complete. None of the representations or warranties
made by Parent herein, nor any statement made in any list or other statement
separately certified by Parent, or in any Exhibit or certificate furnished by
Parent pursuant to this Agreement, when all such documents are read together in
their entirety, contains or will contain any untrue statement of a material fact
at the Effective Time, or omits or will omit to state any material fact
necessary in order to make the statements contained herein or therein, in the
light of the circumstances under which made, not misleading.
3.5 Litigation. There is no action, suit, proceeding, claim, arbitration
or investigation pending, or as to which Parent has received any notice of
assertion or as to which Parent has a reasonable basis to expect such notice of
assertion, against Parent which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay any of the transactions contemplated by this
Agreement or which could reasonably be anticipated to have a Material Adverse
Effect on Parent.
3.6 Broker's and Finders' Fees. Parent has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement,
the Merger or any transaction contemplated hereby.
3.7 Parent Financial Statements. Parent has delivered to the
Shareholders a copy of Parent's audited financial statements for the year ended
December 31, 1997 (the "Financial Statements").
3.8 No Undisclosed Liabilities. As of December 31, 1997, Parent did not
have any liabilities, either accrued or contingent (whether or not required to
be reflected in financial statements in accordance with generally accepted
accounting principles), and whether due or to become due, which individually or
in the aggregate are material and (i) have not been reflected in the Financial
Statements, (ii) have not been specifically described in this Agreement or in
the Schedules hereto or (iii) are not normal or recurring liabilities incurred
since December 31, 1997 in the ordinary course of business consistent with past
practices.
3.9 No Changes. Since the date of the Financial Statements there has not
been, occurred or arisen any:
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(a) material adverse change in the financial condition,
liabilities, assets, business, or prospects of the Parent;
(b) destruction, damage to, or loss of any assets of the Parent
(whether or not covered by insurance) that constitutes a Material Adverse Effect
on the Parent;
(c) labor trouble or claim of wrongful discharge of which the
Parent has received written notice or of which the Parent is aware, or other
unlawful labor practice or action;
(d) change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by the Parent;
(e) revaluation by the Parent of any of its assets;
(f) declaration, setting aside, or payment of a dividend or other
distribution with respect to the shares of the Parent, or any direct or indirect
redemption, purchase or other acquisition by the Parent of any of its shares;
(g) acquisition, sale or transfer of any material asset of the
Parent other than in the ordinary course of business other than as contemplated
in this Agreement;
(h) loan by the Parent to any person or entity, or guaranty by the
Parent of any loan;
(i) waiver or release of any material right or claim of the
Parent, including any write-off or other compromise of any account receivable of
the Parent;
(j) the commencement or notice or threat of commencement of any
governmental proceeding against or investigation of the Parent or its affairs,
to the best of the Parent's knowledge;
(k) other event or condition of any character that has or might
reasonably be expected to have a Material Adverse Effect on the Parent;
(l) negotiation or agreement by the Parent to do any of the things
described in the preceding clauses (a) through (k) (other than negotiations with
Parent and its representatives regarding the transactions contemplated by this
Agreement).
3.10 Tax Returns and Audits.
(i) The Parent as of the Closing Date will have prepared and
timely filed or made a timely request for extension for all required federal,
state, local and foreign returns, estimates, information statements and reports
(collectively the "Returns") relating to any and all Taxes concerning or
attributable to the Parent or its operations and such Returns are true and
correct and have been completed in accordance with applicable law.
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(ii) The Parent as of the Closing Date: (A) will have paid or
accrued all Taxes it is required to pay or accrue and (B) will have withheld and
timely remitted with respect to its employees all federal and state income
taxes, FICA, FUTA and other Taxes required to be withheld and remitted.
(iii) There are no liens, pledges, charges, claims, security
interests or other encumbrances of any sort ("Liens") on the assets of the
Parent relating to or attributable to Taxes other than Liens for taxes not yet
due and payable.
(iv) The Parent's tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income tax
deductions is properly reflected on the Parent's tax books and records.
(v) The Parent has established (and until the Effective Time
will establish) on its respective books and records reserves (to be specifically
designated as an increase to current liabilities) that are adequate for the
payment of all taxes not yet due and payable.
(vi) No federal, state, local or foreign audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Returns.
(vii) The Parent is not a party to any tax-sharing or
allocation agreement, nor does the Parent owe any amount under any tax-sharing
or allocation agreement
3.12 Restrictions on Business Activities. There is no material agreement,
judgment, injunction, order or decree binding upon Parent which has or could
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of Parent, any acquisition of property by Parent or the
conduct of business by Parent as currently conducted or as currently proposed to
be conducted.
3.13 Intellectual Property. Parent (i) has not been sued or charged in
writing as a defendant in any claim, suit, action or proceeding which involves a
claim of infringement of any patents, trademarks, service marks, copyrights or
violation of any trade secret or other proprietary right of any third party and
which has not been finally terminated prior to the date hereof, (ii) has no
knowledge of any such charge or claim or (iii) has no knowledge of any
infringement liability with respect to, or infringement or violation by, Parent
of any patent, trademark, service mark, copyright, trade secret or other
proprietary right of another.
3.14 Compliance With Laws. Parent has complied with, is not in violation
of, and has not received any notices of violation with respect to, any federal,
state or local statute, law or regulation with respect to the conduct of its
business, or the ownership or operation of its business.
3.11 Agreements, Contracts and Commitments. Except as disclosed in
Schedule 3.11, the Parent does not have and is not a party to:
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(a) any collective bargaining agreements,
(b) any agreements that contain any unpaid severance liabilities
or obligations,
(c) any bonus, deferred compensation, incentive compensation,
pension, profit-sharing or retirement plans, or any other employee benefit plans
or arrangements,
(d) any employment or consulting agreement, contract or commitment
with an employee or individual consultant or salesperson or consulting or sales
agreement, contract or commitment with a firm or other organization, not
terminable by the Parent on thirty days notice without liability, except to the
extent general principles of wrongful termination law may limit the Parent's
ability to terminate employees at will,
(e) agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement,
(f) any fidelity or surety bond or completion bond,
(g) any lease of personal property having a value individually in
excess of $75,000,
(h) any agreement of indemnification or guaranty not entered into
in the ordinary course of business,
(i) any agreement, contract or commitment containing any covenant
limiting the freedom of the Parent to engage in any line of business or compete
with any person,
(j) any agreement, contract or commitment relating to capital
expenditures and involving future obligations in excess of $75,000,
(k) any agreement, contract or commitment relating to the
disposition or acquisition of assets not in the ordinary course of business or
any ownership interest in any corporation, partnership, joint venture or other
business enterprise,
(l) any mortgages, indentures, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit, including guaranties referred to in clause (h)
hereof,
(m) any purchase order or contract for the purchase of raw
materials or acquisition of assets involving $75,000 or more,
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(n) any construction contracts,
(o) any distribution, joint marketing or development agreement
other than entered in to in the ordinary course of business,
(p) any other agreement, contract or commitment which involves
$75,000 or more and is not cancelable without penalty within thirty (30) days,
or
(q) any agreement which is otherwise material to the Parent's
business.
The Parent has not breached, or received in writing any claim or threat
that it has breached, any of the terms or conditions of any material agreement,
contract or commitment to which it is bound (including those set forth in any of
the lists separately certified by the Parent) in such manner as would permit any
other party to cancel or terminate the same.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business of the Company. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, the Company agrees (except to the extent that
Parent shall otherwise consent in writing), to carry on its business in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted, to pay its debts and taxes when due subject (i) to good
faith disputes over such debts or taxes and (ii) in the case of taxes, to
Parent's consent to the filing of material Returns if applicable, to pay or
perform other obligations when due, and, to the extent consistent with such
business, use all reasonable efforts consistent with past practice and policies
to preserve intact the Company's present business organizations, keep available
the services of its present officers and key employees and preserve their
relationships with customers, suppliers, distributors, licensors, licensees, and
others having business dealings with it, to the end that the Company's goodwill
and ongoing businesses shall be unimpaired at the Effective Time. The Company
shall promptly notify Parent of any event or occurrence not in the ordinary
course of business of the Company which could have a Material Adverse Effect on
the Company. Except as expressly contemplated by this Agreement, the Company
shall not, without the prior written consent of Parent:
(a) Except pursuant to existing contractual provisions of options
outstanding on the date hereof and which are disclosed in writing pursuant to
Section 2.2, accelerate, amend or change the period of exercisability of options
or restricted stock granted under the employee stock plans of the Company or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Enter into any commitment or transaction (i) which requires
performance over a period longer than six months in duration except transactions
in the ordinary course of business, or
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(ii) to purchase fixed assets for a purchase price in excess of $5,000; except
as mutually agreed by Parent and the Company and set forth on a separate
certificate;
(c) Grant any severance or termination pay (i) to any director or
officer or (ii) to any other employee except (x) payments made pursuant to
standard written agreements outstanding on the date hereof and as disclosed on
Schedule 2.13 or (y) in the case of employees who do not have standard written
agreements, payments of up to two months salary;
(d) Transfer to any person or entity any rights to the Company's
Intellectual Property other than nonexclusive object code licenses except as
mutually agreed by Parent and the Company and set forth on a separate
certificate;
(e) Enter into or amend any agreements pursuant to which any other
party is granted marketing or other rights of any type or scope with respect to
any products or technology of the Company, except as mutually agreed by Parent
and the Company and set forth on a separate certificate;
(f) Violate, amend or otherwise modify the terms of any of the
contracts set forth in the Company Disclosure Schedule;
(g) Commence any litigation;
(h) Declare or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any of its
capital stock, or split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of capital stock of the Company, or repurchase or
otherwise acquire, directly or indirectly, any shares of its capital stock
except from former employees, directors and consultants in accordance with
agreements providing for the repurchase of shares in connection with any
termination of service to the Company;
(i) Issue, deliver or sell or authorize or propose the issuance,
delivery or sale of, or purchase or propose the purchase of, any shares of its
capital stock or securities convertible into, or subscriptions, rights, warrants
or options to acquire, or other agreements or commitments of any character
obligating it to issue any such shares or other convertible securities, other
than the repurchase of shares of the Company's Common Stock from terminated
employees pursuant to the terms of restricted stock purchase agreements and the
issuance of shares of the Company's Common Stock pursuant to the exercise of
Company Incentive Options (as defined below) outstanding as of the date of this
Agreement;
(j) Cause or permit any amendments to its Articles of
Incorporation or Bylaws;
(k) Acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree
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to acquire any assets which are material, individually or in the aggregate, to
the business of the Company;
(l) Sell, lease, license or otherwise dispose of any of its
properties or assets which are material, individually or in the aggregate, to
the business of the Company, except in the ordinary course of business, except
as mutually agreed by Parent and the Company and set forth on a separate
certificate;
(m) Incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any debt securities of the Company or
guarantee any debt securities of others except with respect to an existing lease
line in an amount not more than $5,000;
(n) Adopt or amend any employee benefit plan, or enter into any
employment contract except for offer letters in the Company's standard form for
newly hired employees, pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates of its employees;
(o) Revalue any of its assets, including without limitation
writing down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business;
(p) Pay, discharge or satisfy in an amount in excess of $5,000 in
any one case any claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business of liabilities reflected or
reserved against in the Company Financial Statements (or the notes thereto);
(q) Make or change any material election in respect of Taxes,
adopt or change any accounting method in respect of Taxes, file any material
Return or any amendment to a material Return, enter into any closing agreement,
settle any claim or assessment in respect of Taxes, or consent to any extension
or waiver of the limitation period applicable to any claim or assessment in
respect of Taxes; or
(r) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.1(a) through (q) above, or any action which
would make any of the representations or warranties of the Company contained in
this Agreement untrue or incorrect or prevent the Company from performing or
cause the Company not to perform its covenants hereunder.
4.2 No Solicitation. After the date of this Agreement and prior to the
Effective Date, the Company will not (nor will the Company permit any of the
Company's officers, directors, agents, representatives or affiliates to)
directly or indirectly, take any of the following actions with any party other
than Parent and its designees:
(a) solicit, encourage, initiate or participate in any
negotiations or discussions with respect to, any offer or proposal to acquire
all or substantially all of the Company's business and
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<PAGE> 33
properties or to purchase or acquire capital stock of the Company whether by
merger, purchase of assets, tender offer or otherwise (an "Acquisition"),
(b) disclose any information not customarily disclosed to any
person other than its attorneys or financial advisors concerning the Company's
business and properties or afford to any person or entity access to its
properties, books or records, or
(c) assist or cooperate with any person to make any proposal to
purchase all or any part of the Company's capital stock or assets, other than
licensing of software in the ordinary course of business (a "Purchase"),
provided, however, that the Company may participate in negotiations with, or
furnish information to, a party other than Parent or its designees who has made
a written Acquisition or Purchase offer or proposal if the Company's Board of
Directors, upon receipt of a written opinion from its outside counsel,
determines that failure to do so would constitute a breach of the Board's
fiduciary duty under applicable law.
In the event the Company shall receive any such written offer or proposal,
directly or indirectly, of the type referred to in clause (a) or (c) above, or
any request for disclosure or access pursuant to clause (b) above, the Company
party shall immediately inform Parent as to all material facts relating to any
such offer or proposal (including the identity of the party making such offer or
proposal and the specific terms thereof) and will cooperate with Parent by
furnishing any information it may reasonably request.
4.3 Strategic Agreements. The Company agrees that it will not without
the prior written consent of Parent, which consent will not be unreasonably
withheld, enter into any strategic alliance, joint development or joint
marketing agreement during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement and the
Effective Time.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Resolutions of Company Shareholders. The Company shall promptly
after the date hereof take all action necessary in accordance with Virginia Law,
and the Company's Articles of Incorporation and Bylaws to prepare and solicit an
Action By Written Consent of the Company Shareholders. The Company shall use its
best efforts to obtain the approval of the shareholders of the Company for the
Merger and shall take all other action necessary or advisable to secure the vote
or consent of its shareholders required by Virginia Law to effect the Merger.
5.2 Access to Information. The Company shall afford Parent and its
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time to (a) all of the
Company's properties, books, contracts, commitments and records, and (b) all
other information concerning the business, properties and personnel of the
Company as Parent
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may reasonably request. The Company agrees to provide to Parent and its
accountants, counsel and other representatives copies of internal financial
statements promptly upon request. Parent shall provide the Company with copies
of such publicly available information about Parent as the Company may request
and shall provide the Company with reasonable access to its Chief Executive
Officer, Chief Financial Officer and Vice President, Marketing in this
connection. No information or knowledge obtained in any investigation pursuant
to this Section 5.2 shall affect or be deemed to modify any representation or
warranty contained herein or the conditions to the obligations of the parties to
consummate the Merger.
5.3 Expenses. In the event the Merger is not consummated, all expenses
incurred in connection with the Merger and this Agreement shall be the
obligation of the party incurring such expenses; provided if the Merger shall
fail to close for any reason within the control of the Company or Parent, such
party shall reimburse the other for all expenses incurred in connection with the
Merger and this Agreement.
5.4 Public Disclosure. Unless otherwise required by law, prior to the
Effective Time no disclosure (whether or not in response to an inquiry)
regarding the terms of this Agreement and the transactions contemplated hereby
shall be made by any party hereto unless approved by Parent and the Company
prior to release, provided that such approval shall not be unreasonably
withheld, subject, in the case of Parent, to Parent's obligation to comply with
applicable securities laws.
5.5 Consents. Each of Parent and the Company shall promptly apply for or
otherwise seek, and use its best efforts to obtain, all consents and approvals
required to be obtained by it for the consummation of the Merger, and the
Company shall use its best efforts to obtain all necessary consents, waivers and
approvals under any of the Company's material agreements, contracts, licenses or
leases in connection with the Merger. All such necessary consents are set forth
in Section 2.26 of the Company Disclosure Schedule.
5.6 FIRPTA. Upon request by Parent after the Effective Time, the Company
shall use its best efforts to deliver to the Internal Revenue Service a notice
that it is not a "United States Real Property Holding Corporation" as defined in
and in accordance with the requirements of Treasury Regulation Section
1.897-2(h)(2).
5.7 Legal Requirements. Each of Parent, Merger Sub and the Company will
take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on them with respect to the consummation of
the transactions contemplated by this Agreement and will promptly cooperate with
and furnish information to any party hereto necessary in connection with any
such requirements imposed upon such other party in connection with the
consummation of the transactions contemplated by this Agreement and will take
all reasonable actions necessary to obtain (and will cooperate with the other
parties hereto in obtaining) any consent, approval, order or authorization of,
or any registration, declaration or filing with, any Governmental Entity or
other person, required to be obtained or made in connection with the taking of
any action contemplated by this Agreement.
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5.8 Blue Sky Laws. Parent shall take such steps as may be necessary to
comply with the securities and blue sky laws of all jurisdictions which are
applicable to the issuance of the Parent Preferred Stock pursuant hereto. The
Company shall use its best efforts to assist Parent as may be necessary to
comply with the securities and blue sky laws of all jurisdictions which are
applicable in connection with the issuance of Parent Preferred Stock pursuant
hereto.
5.9 Best Efforts; Additional Documents and Further Assurances. Each of
the parties to this Agreement shall each use its best efforts to effectuate the
transactions contemplated hereby and to fulfill and cause to be fulfilled the
conditions to closing under this Agreement. Each party hereto, at the reasonable
request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
5.10 Indemnification. Parent shall either (i) cause the Company to
continue to indemnify or (ii) directly indemnify the persons who are currently
officers and directors of the Company substantially in accordance with the
Bylaws of the Company as they are currently in effect for action or inaction by
such person prior to the Merger. For so long as the insurer under the Company's
officer and director indemnification insurance policy is willing to continue
such insurance policy after the Merger at approximately the same premium as
currently in effect, the Parent shall continue such policy in effect until the
third anniversary of the Closing.
5.11 Employee Agreements. Each employee of and consultant to the Company
will sign promptly a Proprietary Rights and Confidentiality Agreement in
Sagent's standard form.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Shareholder Approval. This Agreement and the Merger shall have
been approved and adopted by all of the Shareholders of the Company entitled to
vote and the sole shareholder of Merger Sub.
(b) Board Approval. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the Board of Directors of the
Company, Parent and Merger Sub.
(c) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger or limiting or restricting the
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operation of the business of the Company following the Merger shall be in
effect, nor shall any proceeding brought by an administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending; nor shall there be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger, which makes the consummation of the Merger
illegal.
(d) Employment and Non-Competition Agreements. Parent shall have
entered into employment and non-competition agreements with Michael Venerable
and Matthew Comstock substantially in the form attached hereto as Exhibit F.
(e) Approval. Parent, Company and Merger Sub shall have timely
obtained all necessary approvals from Governmental Entities.
(f) Option Exercises. The holders of all of the outstanding
options of the Company shall have exercised such options.
6.2 Additional Conditions to Obligations of Company. The obligations of
the Company to consummate and effect this Agreement and the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any of which may be waived,
in writing, exclusively by the Company:
(a) Representations, Warranties and Covenants. The representations
and warranties of Parent in this Agreement shall be true and correct in all
material respects on and as of the Effective Time as though such representations
and warranties were made on and as of such time and Parent shall have performed
and complied in all material respects with all covenants, obligations and
conditions of this Agreement required to be performed and complied with by it as
of the Effective Time.
(b) Certificate of Parent. The Company shall have been provided
with a certificate executed on behalf of Parent by its President or its Chief
Financial Officer to the effect that, as of the Effective Time:
(i) all representations and warranties made by Parent and
Merger Sub under this Agreement are true and complete in all material respects;
(ii) all covenants, obligations and conditions of this
Agreement to be performed by Parent and Merger Sub on or before such date have
been so performed in all material respects; and
(iii) the transactions contemplated by this Agreement have
been approved by the Board of Directors of Parent.
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(c) Legal Opinion. The Company shall have received a legal opinion
from Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to
Parent, substantially in the form of Exhibit G hereto.
6.3 Additional Conditions to the Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to consummate and effect this Agreement
and the transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, exclusively by Parent:
(a) Representations, Warranties and Covenants. The representations
and warranties of the Company in this Agreement shall be true and correct in all
material respects on and as of the Effective Time as though such representations
and warranties were made on and as of such time and the Company shall have
performed and complied in all material respects with all covenants, obligations
and conditions of this Agreement required to be performed and complied with by
it as of the Effective Time.
(b) Certificate of the Company. Parent shall have been provided
with a certificate executed on behalf of the Company by its President to the
effect that, as of the Effective Time:
(i) all representations and warranties made by the Company
under this Agreement are true and complete in all material respects;
(ii) all covenants, obligations and conditions of this
Agreement to be performed by the Company on or before such date have been so
performed in all material respects; and
(iii) attached to such certificate are true and correct copies
of the Company's Articles of Incorporation, as certified by the Virginia
Secretary of State, Bylaws and resolutions of the Company's Board of Directors
and Shareholders approving the transactions contemplated by this Agreement.
(c) Third Party Consents. Parent shall have been furnished with
evidence satisfactory to it of the consent or approval of those persons whose
consent or approval shall be required in order to assign the agreements listed
pursuant to Section 5.5.
(d) Legal Opinion. Parent shall have received a legal opinion from
legal counsel to the Company, in substantially the form of Exhibit G.
(e) No Material Adverse Changes. There shall not have occurred any
material adverse change in the business, properties, results of operations or
financial condition of the Company since February 25, 1998;
(f) Dissenters. No holders of the Company's Common Stock shall
have exercised, or shall continue to have the right to exercise, dissenters'
rights with respect to the transactions contemplated by this agreement.
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(g) Resignation of Current Directors and Officers of the Company.
Parent shall have received letters of resignation of all of the directors and
officers of the Company effective as of the Effective Time.
(h) Assignment. All right, title and interest in and to all assets
of the Company are properly assigned to Buyer.
(i) No Distributions or Adjustments. No cash distributions or
compensation adjustments prior to the Effective Time other than such cash
distributions or compensation adjustments made pursuant to agreements
outstanding as of the date hereof or pursuant to standard corporate policies in
effect on the date hereof.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
7.1 Survival of Representations and Warranties. All representations and
warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Merger and continue for a period ending on the date
which is thirty (30) days after such time as Parent's outside public accounting
firm has released its annual audit of the consolidated financial statements
applicable to the Parent for the period ending December 31, 1998 (such date, the
"Escrow Release Date"), subject to Section 7.3 hereof; provided, however, that
as to the Shareholders the representations and warranties relating or pertaining
to Taxes set forth in Section 2.9 hereof, shall survive until ninety (90) days
following the expiration of all applicable statutes of limitations governing the
Company's Taxes or Returns.
7.2 Agreement to Indemnify. Michael P. Venerable and Matthew C. Comstock
(the "Indemnifying Shareholders"), severally but not jointly, hereby agree to
indemnify and hold Parent, Merger Sub and their affiliates harmless against all
claims, losses, liabilities, damages, deficiencies, costs and expenses,
including reasonable attorneys' fees and expenses of investigation (hereinafter
individually a "Loss" and collectively "Losses") incurred by Parent as a result
of (i) any breach of a representation, warranty or obligation of the Company
contained in Article II herein, (ii) any failure by the Company to perform or
comply with any covenant contained herein, (iii) failure to disclose requested
material information which is known or should be known during the due diligence
process, or (iv) delivery of incorrect or misleading material information during
the due diligence process; provided, that no such representation or warranty
shall be deemed breached (for purposes of this Article VII only and not for
purposes of the conditions to the obligations of Parent to effect the Merger
under Article VI) with respect to information disclosed in the Company
Disclosure Schedule delivered by the Company at the Closing to the extent such
schedule provides exceptions to any representation or warranty. Parent shall be
entitled to recover from the Escrow Fund as defined in Section 7.4 hereof, for
any Loss pursuant to the terms hereof.
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7.3 Expiration of Indemnification.
(a) Except as otherwise provided in Section 7.3(b), the
indemnification obligations of the Indemnifying Shareholders under Section 7.2
shall terminate at 5:00 p.m., Pacific Standard Time, on the Escrow Release Date
but shall not terminate as to any Loss asserted in good faith pursuant to
Section 7.7 on or prior to such date.
(b) The indemnification obligations of the Indemnifying
Shareholders under Section 7.2 related to Taxes or a breach of the
representations and warranties contained in Section 2.9 shall terminate 90 days
following the expiration of all applicable statutes of limitations relating to
Taxes subject to the claim of indemnification hereunder, but shall not terminate
as to a Loss (or a potential claim by an appropriate party) asserted in good
faith prior to such date; provided however that no claim for indemnification
with regard to the Indemnifying Shareholders shall terminate with respect to any
Loss arising due to any willful or grossly negligent breach of any
representation or warranty contained in Section 2.9.
7.4 Escrow Fund.
At the Effective Time, Parent, Merger Sub, Company, the Shareholders
Agent, on behalf of the Indemnifying Shareholders, and the Escrow Agent shall
execute the Escrow Agreement, and the Parent shall deposit with the Escrow Agent
the sum of $150,000 (the "Escrow Cash") to be held in the Escrow Fund and
administered in accordance with the Escrow Agreement. The Escrow Agent shall
administer the Escrow Fund, as it may exist from time to time, on behalf of
Parent, Merger Sub, Company and Indemnifying Shareholders, for the purposes of
securing Company and Indemnifying Shareholders indemnity obligations under
Article VII hereof.
7.5 Termination of Escrow Fund. Subject to the resolution of pending
claims asserted pursuant to Section 7.7 prior to the expiration of the Escrow
Fund and the resolution of conflicts arising from such claims under Section
7.9(c) hereof, the Escrow Fund shall remain in existence during the period of
time (the "Escrow Period") between the effectiveness of the Merger and 5:00
p.m., Pacific Standard Time, on the Escrow Release Date.
7.6 Protection of Escrow Fund. The Escrow Agent shall hold and safeguard
the Escrow Fund during the Escrow Period, shall treat such fund as a trust fund
in accordance with the terms of this Agreement and not as the property of Parent
and shall hold and dispose of the Escrow Fund only in accordance with the terms
hereof.
7.7 Claims Upon Escrow Fund. Upon receipt by the Escrow Agent at any
time on or before the last day of the Escrow Period of a certificate signed by
any officer of Parent (an "Officer's Certificate"):
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(a) stating that Parent has paid or properly accrued or reasonably
anticipates that it will have to pay Losses in an aggregate stated amount to
which Parent is entitled to indemnity pursuant to this Agreement, and
(b) specifying in reasonable detail the individual items of Losses
included in the amount so stated, the date each such item was paid or properly
accrued, or the basis for such anticipated liability, and the nature of the
misrepresentation, breach of warranty or claim to which such item is related,
the Escrow Agent shall, subject to the provisions of Sections 7.8 and 7.9
hereof, deliver to Parent out of the Escrow Fund, as promptly as practicable, an
amount equal to such Losses as indemnity out of the Escrow Fund; provided,
however, that with respect to Losses Parent reasonably anticipates it will have
to pay, Escrow Cash shall not be delivered to Parent by the Escrow Agent until
such time as Parent actually must pay such Losses.
7.8 Objections to Claims. At the time of delivery of any Officer's
Certificate to the Escrow Agent, a duplicate copy of such certificate
simultaneously shall be delivered to the Shareholders' Agent and for a period of
fifteen (15) days after such delivery to the Agent, the Escrow Agent shall make
no delivery of Escrow Cash pursuant to Section 7.7 hereof unless the Escrow
Agent shall have received written authorization from the Shareholders' Agent to
make such delivery. After the expiration of such fifteen (15) day period, the
Escrow Agent shall make delivery of any payments out of the Escrow Fund required
pursuant to Section 7.7, provided that no such payment, delivery or reduction
may be made if the Shareholders' Agent shall object in a written statement to
the claim made in the Officer's Certificate, and such statement shall have been
delivered to the Escrow Agent prior to the expiration of such fifteen (15) day
period.
7.9 Resolution of Conflicts.
(a) In case the Shareholders' Agent shall so object in writing to
the indemnity of Parent in respect of any claim or claims made in any Officer's
Certificate in compliance with Section 7.9 above, the Shareholders' Agent and
Parent shall attempt in good faith to agree upon the rights of the respective
parties with respect to each of such claims. If the Shareholders' Agent and
Parent should so agree, a memorandum setting forth such agreement shall be
prepared and signed by both parties and shall be furnished to the Escrow Agent.
The Escrow Agent shall be entitled to rely on any such memorandum and distribute
any Escrow Cash in accordance with the terms thereof.
(b) If no such agreement can be reached after good faith
negotiation, attempts at resolution will be made by a person to person meeting
between the president of Parent and the Shareholders' Agent. If the Parent and
the Shareholders' Agent cannot reach agreement within two (2) business days
after such meeting, Parent shall within thirty (30) additional calender days
submit the claims at issue to binding arbitration under the then effective rules
of commercial arbitration of the American Arbitration Association ("AAA"). If
Parent does not timely submit such dispute to AAA then, after the expiration of
the thirty (30) calender day period, the applicable Officer's Certificate(s)
will be deemed withdrawn by Parent and shall not be the basis for the Escrow
Agent withholding any payments out of the Escrow Fund at the end of the Escrow
Period. Any arbitration initiated under this
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Section 7.9(b) shall be concluded within sixty (60) calendar days from the date
that it is submitted to AAA.
Notwithstanding the foregoing, either Parent or the Shareholders' Agent
are free to initiate litigation in court, but only to the extent necessary to
seek a temporary restraining order or other equivalent emergency injunction
relief. Thereafter, the matter shall be stayed and resolved in the arbitration
as set forth above. In the event any litigation is initiated in compliance with
this Section 7.9(b), the parties agree jointly to stipulate to the arbitration
or court that all proceedings in such action be kept confidential. The Escrow
Agent shall be entitled to act in accordance with any final decision of the
arbitrator or court and make or withhold payments out of the Escrow Fund in
accordance therewith.
(c) Any litigation initiated pursuant to Section 7.9(b) shall be
brought in the state or federal courts of Santa Clara County, California. The
non-prevailing party to any arbitration or litigation shall pay its own expenses
and the reasonable expenses, including without limitation, reasonable attorneys'
fees and costs, incurred by the other party to the arbitration or litigation. If
the Shareholders' Agent (or the Indemnifying Shareholders, if not represented by
Shareholders' Agent in such litigation) are the non-prevailing party, the Parent
shall be entitled to recover such expenses solely from the Escrow Fund. Unless
the Escrow Fund is otherwise exhausted, the Shareholders' Agent shall also be
entitled to recover the reasonable expenses, including without limitation
reasonable attorney's fees and costs, actually incurred by him on behalf of the
Indemnifying Shareholders in the event that the Indemnifying Shareholders are
the non-prevailing party after the expiration of the Escrow Period and subject
to any outstanding but unresolved claims asserted pursuant to the provisions of
Section 7.7. In such event, Shareholders' Agent shall deliver a written notice
("Expense Notice") concurrently to Escrow Agent and each Indemnifying
Shareholder on the date the Escrow Release Date, indicating the amount and
nature of expenses incurred by Shareholders' Agent. Escrow Agent shall be
entitled to rely on such Expense Notice, and each Indemnifying Shareholder
acknowledges and agrees that Escrow Agent is directed and authorized to deliver
to Shareholders' Agent an amount of Escrow Cash to cover Agent's expenses
promptly upon receipt of the Expense Notice. In the event that the Escrow Fund
is exhausted before the Shareholders' Agent can recover all such expenses, the
other Indemnifying Shareholders agree to contribute their pro rata share
(calculated based on the respective percentages of Escrow Cash to which they are
entitled.
7.10 Distribution Upon Termination of Escrow Period. Subject to the
resolution of pending claims asserted pursuant to Section 7.7 and the resolution
of conflicts arising from such claims under Section 7.9 hereof promptly
following termination of the Escrow Period, the Escrow Agent shall deliver to
the Indemnifying Shareholders all of the Escrow Cash necessary according to the
instructions of the Shareholders' Agent (substantially in the form attached
hereto as Exhibit D). As soon as all such claims have been resolved in
accordance with the provisions of this Article VII, the Escrow Agent shall
deliver to the Indemnifying Shareholders all funds remaining in the Escrow Fund
according to the instructions of the Shareholders' Agent; provided, however,
that to the extent that such claims are for amounts that are less than the
amounts represented by the remaining Escrow Funds, then at the expiration of the
Escrow Period, the Escrow Agent shall deliver to the Indemnifying Shareholders
the amount of Escrow
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Cash remaining in the Escrow Fund in excess of the amount necessary to secure
Parent's indemnification rights against the Escrow Cash arising from such claims
according to the instructions of the Shareholders' Agent.
7.11 Shareholders' Agent; Power of Attorney.
(a) At the Effective Time Michael Venerable shall be constituted
and appointed as Shareholders' Agent to serve as agent and attorney-in-fact for
each Indemnifying Shareholder for purposes of this Article VII only to give and
receive notices and communications, to authorize delivery to Parent of the
Escrow Fund in satisfaction of claims by Parent, to object to such deliveries,
to agree to, negotiate, enter into settlements and compromises of, and demand
dispute resolution pursuant to Section 7.9 and comply with orders of courts with
respect to such claims, and to take all actions necessary or appropriate in the
judgment of the Shareholders' Agent for the accomplishment of the foregoing. No
bond shall be required of the Shareholders' Agent, and the Shareholders' Agent
shall receive no compensation for his services. Notices or communications to or
from the Shareholders' Agent shall constitute notice to or from each of the
Indemnifying Shareholders. If Michael Venerable shall die or otherwise become
incapable of fulfilling his obligations as Shareholders' Agent hereunder,
Matthew Comstock shall be the Shareholders' Agent.
(b) The Shareholders' Agent shall not be liable for any act done
or omitted hereunder as Shareholders' Agent while acting in good faith and in
the exercise of reasonable judgment. The Shareholders shall jointly and
severally indemnify the Shareholders' Agent and hold the Shareholders' Agent
harmless against any loss, liability or expense incurred without negligence or
bad faith on the part of the Shareholders' Agent and arising out of or in
connection with the acceptance or administration of the Shareholders' Agent's
duties hereunder, including the reasonable fees and expenses of any legal
counsel retained by the Shareholders' Agent.
7.12 Actions of the Shareholders' Agent. A decision, act, consent or
instruction of the Shareholders' Agent with regard to the Article VII only shall
constitute a decision of all the Indemnifying Shareholders, and shall be final,
binding and conclusive upon each of the Indemnifying Shareholders, and the
Escrow Agent and Parent may rely upon any decision, act, consent or instruction
of Shareholders' Agent as being the decision, act, consent or instruction of
each and all of the Shareholders. The Escrow Agent and Parent are hereby
relieved from any liability to any person for any acts done by them in
accordance with such decision, act, consent or instruction of the Shareholders'
Agent.
7.13 Third-Party Claims. In the event Parent becomes aware of a
third-party claim which Parent believes may result in a demand against the
Escrow Fund pursuant to Section 7.7, Parent shall notify the Shareholders' Agent
of such claim, and the Shareholders' Agent and the Indemnifying Shareholders
shall be entitled, at their expense, to participate in any defense of such
claim. Parent shall have the right in its sole discretion to settle any such
claim; provided, however, that except with the consent of Shareholders' Agent,
no settlement of any such claim with third-party claimants shall alone be
determinative of the amount of liability of the Indemnifying Shareholders. In
the event that
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Shareholders' Agent has consented pursuant to Section 7.12 to any such
settlement and agreed in writing that a specified amount of the claim may be
applied against the Escrow Fund, the Shareholders' Agent shall have no power or
authority to object under Section 7.7 or any other provision of this Article VII
to the amount of such claim by Parent against the Escrow Fund under Section 7.7
for indemnity with respect to such settlement.
7.14 Escrow Agent's Duties.
(a) The Escrow Agent shall be obligated only for the performance
of such duties as are specifically set forth herein, and as set forth in any
additional written escrow instructions which the Escrow Agent may receive after
the date of this Agreement which are signed by an officer of Parent and the
Shareholders' Agent, and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed to be genuine and
to have been signed or presented by the proper party or parties. The Escrow
Agent shall not be liable for any act done or omitted hereunder as Escrow Agent
while acting in good faith and in the exercise of reasonable judgment, and any
act done or omitted pursuant to the advice of counsel shall be conclusive
evidence of such good faith.
(b) The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person,
excepting only orders or process of courts of law, and is hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case the Escrow Agent obeys or complies with any such order, judgment or decree
of any court, the Escrow Agent shall not be liable to any of the parties hereto
or to any other person by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on account
of the identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver this Agreement or any documents or papers
deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration of any
rights under any statute of limitations with respect to this Agreement or any
documents deposited with the Escrow Agent.
7.15 No Joint Liability; Maximum Liability. The liability of the
Indemnifying Shareholders under this Article VII shall be several and not joint,
and liability for any indemnification to which Parent may be entitled under this
Article VII shall be apportioned among the Indemnifying Shareholders in
proportion to the aggregate consideration received by each Indemnifying
Shareholder pursuant to Sections 1.6 and 1.7 as set forth in Exhibit A. Except
as provided in Section 7.16, the total liability of the Shareholders under this
Article VII for Losses shall not exceed the Escrow Cash. Except as set forth in
Section 7.16, Parent agrees that it will look solely to the Escrow Fund for the
satisfaction of its claims under the indemnity provided in Section 7.2 and
agrees that no Indemnifying Shareholder shall be personally liable with respect
to such claims beyond the interest of such Indemnifying Shareholder in the
Escrow Fund; provided, however, that if Parent suffers a Loss for which it is
entitled to indemnification under Section 7.3(b) after the termination and
distribution of the Escrow Fund pursuant
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to Section 7.10, each Indemnifying Shareholder shall remain severally, but not
jointly, liable for such Shareholder's proportionate share of such Loss, to the
extent (but only to the extent) of the Escrow Cash previously distributed to
each Indemnifying Shareholder from the Escrow Fund pursuant to Section 7.10.
7.16 Remedies. The indemnity set forth in this Article VII and the Escrow
Fund provided for herein are intended by the parties to this Agreement to apply
only to those items for which indemnity is specifically provided in Section 7.2
and except as otherwise provided in this Section 7.16, resort to the Escrow Fund
shall be the exclusive remedy of Parent for any Losses. The existence of this
Article VII and of the rights and restrictions set forth herein do not limit any
other potential remedies of Parent with respect to any knowing, intentional and
material misrepresentations of the Company, made in or pursuant to Article II or
Article III hereof, respectively on which Parent reasonably relied to its
detriment.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) by mutual written consent of the Company and Parent;
(b) by Parent if (i) it is not in material breach of its
obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of the Company and such breach has not been cured within five business
days after written notice to the Company or (ii) there shall be any final action
taken, or any statute, rule, regulation or order enacted, promulgated or issued
or deemed applicable to the Merger by any Governmental Entity, which would
prohibit Parent's or the Company's ownership or operation of all or a material
portion of the business of the Company, or compel Parent or the Company to
dispose of or hold separate all or a material portion of the business or assets
of the Company or Parent as a result of the Merger.
(c) by the Company if it is not in material breach of its
obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of Parent or Merger Sub and such breach has not been cured within five
days after written notice to Parent;
(d) by any party hereto if: (i) the Closing has not occurred by
April 15, 1998; (ii) there shall be a final, non-appealable order of a federal
or state court in effect preventing consummation of the Merger; (iii) there
shall be any final action taken, or any statute, rule, regulation or order
enacted, promulgated or issued or deemed applicable to the Merger by any
Governmental Entity
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which would make consummation of the Merger illegal; or (iv) if the Company's
Shareholders do not approve the Merger.
Where action is taken to terminate this Agreement pursuant to this Section
8.1, it shall be sufficient for such action to be authorized by the Board of
Directors (as applicable) of the party taking such action.
8.2 Effect of Termination.
(a) In the event of termination of this Agreement as provided in
Section 8.1, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of Parent, Merger Sub, the Company or the
Shareholders or their respective officers, directors or Shareholders, except to
the extent that such termination results from the breach by a party hereto of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
8.3 Amendment. This Agreement may be amended by the parties hereto at
any time by execution of an instrument in writing signed on behalf of each of
the parties hereto.
8.4 Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The Shareholders hereby appoint the
Shareholders' Agent as agent and attorney-in-fact with respect to any action
taken or required to be taken to effect an extension or waiver under this
Agreement.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via telecopy to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
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(a) if to Parent or Merger Sub, to:
Sagent Technology, Inc.
2225 E. Bayshore Road, Suite 100
Palo Alto, CA 94303
Attention: Kenneth C. Gardner
Tel: (650) 496-3107
Fax: (650) 493-1290
with a copy to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94304-1050
Attention: Arthur F. Schneiderman, Esq.
Tel: (650) 493-9300
Fax: (650) 493-6811
(b) if to the Company, to:
Talus, Inc.
3601 Eisenhower Avenue, Suite 130
Alexandria, VA 22304
Attention: Michael Venerable
-41-
<PAGE> 47
with a copy to:
Jones & Blouch L.L.P.
1025 Thomas Jefferson St., N.W.
Suite 405 West
Washington, D.C. 20007
Attn: John W. Blouch, Esq.
Tel: (202) 223-3500
Fax: (202) 223-4593
(c) if to a Shareholder, to the address of such Shareholder listed
on Exhibit A:
with a copy to:
Jones & Blouch L.L.P.
1025 Thomas Jefferson St., N.W.
Suite 405 West
Washington, D.C. 20007
Attn: John W. Blouch, Esq.
Tel: (202) 223-3500
Fax: (202) 223-4593
(d) if to the Shareholders' Agent:
Michael P. Venerable
Talus, Inc.
3601 Eisenhower Avenue, Suite 130
Alexandria, VA 22304
with a copy to:
Jones & Blouch L.L.P.
1025 Thomas Jefferson St., N.W.
Suite 405 West
Washington, D.C. 20007
Attn: John W. Blouch, Esq.
Tel: (202) 223-3500
Fax: (202) 223-4593
-42-
<PAGE> 48
(e) if to the Escrow Agent, to:
Greater Bay Trust Company
400 Emerson Street
Palo Alto, CA 94301
Attention: Anna Paiva
Facsimile: (650) 473-1326
Telephone: (650) 614-5720
9.2 Interpretation. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
9.4 Miscellaneous. This Agreement and the documents and instruments and
other agreements among the parties hereto including all lists and statements
separately certified in writing by the Company or Parent (a) constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof; (b) are not intended to
confer upon any other person any rights or remedies hereunder; and (c) shall not
be assigned by operation of law or otherwise except as otherwise specifically
provided.
9.5 Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
California. All parties hereto agree to service of documents commencing any suit
therein may be made as provided in Section 9.1.
9.6 Attorneys' Fees. Except as otherwise provided in Article VII, if any
party to this Agreement brings an action against another party to this Agreement
to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its reasonable costs and expenses, including attorneys' fees
and costs, incurred in connection with such action, including any appeal of such
action.
9.7 Resolution of Disputes; Stipulation Regarding Confidentiality.
Except as otherwise provided in Article VII, the parties hereto each agree to
work together in good faith to resolve any disputes which may arise under this
Agreement. Such attempts at resolution will be made at the level of a person to
person meeting between the presidents of Parent and the Company, the
Shareholders and the Shareholders' Agent. Each party agrees that it will not
initiate any litigation against any other party hereto regarding the subject
matter of this Agreement for at least sixty (60) days following such person
-43-
<PAGE> 49
to person meeting between the presidents of Parent and the Company, the
Shareholders and the Shareholders' Agent except for (i) motions for a temporary
restraining order or other preliminary equitable relief and (ii) circumstances
in which a delay for such period would result in such action being barred as a
result of the relevant statute of limitations expiring. In the event any
litigation is initiated in compliance with this Section, the parties agree
jointly to stipulate to the court that all proceedings in such action be kept
confidential.
9.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
-44-
<PAGE> 50
IN WITNESS WHEREOF, Parent, Merger Sub, the Company, the Shareholders, the
Shareholders' Agent and the Escrow Agent (as to matters set forth in Article VII
only) have caused this Agreement to be signed by themselves or their duly
authorized respective officers, all as of the date first written above.
"PARENT"
SAGENT TECHNOLOGY, INC.
By: /s/ Kenneth C. Gardner
-----------------------------------------------
Kenneth C. Gardner
President and Chief Executive Officer
"COMPANY"
TALUS, INCORPORATED
By: /s/ Michael P. Venerable
------------------------------------------------
Name: Michael P. Venerable
----------------------------------------------
Title: President
---------------------------------------------
"MERGER SUB"
TALUS ACQUISITION CORP.
By: /s/ Kenneth C. Gardner
-----------------------------------------------
Kenneth C. Gardner
President and Chief Executive Officer
MICHAEL P. VENERABLE
/s/ Michael P. Venerable
---------------------------------------------------
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
-45-
<PAGE> 51
MATTHEW E. COMSTOCK
/s/ Matthew E. Comstock
"ESCROW AGENT"
Greater Bay Trust Company, as Escrow Agent
By: /s/ Anna M. Paiva
-----------------------------------------------
Anna M. Paiva, Assistant VP
SHAREHOLDERS AGENT
By: /s/ Michael P. Venerable
-----------------------------------------------
Michael P. Venerable
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
-46-
<PAGE> 52
EXHIBIT A
SHAREHOLDERS OF TALUS
<TABLE>
<CAPTION>
-----------------------------------------------------
To Receive from Sagent To be
- ----------------------------------------------------------------------- Shares of -------------------------- Deposited
Employee Name SS# Address Talus, Inc. No. Shares Cash into Escrow
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Comstock, Matthew E. ###-##-#### 2860 Rogers Drive 51,000 109,919 $496,051.21 $ 75,000.00
Falls Church, VA 22042
Venerable, Michael P. ###-##-#### 12205 Sugar Maple Drive 51,000 109,919 $496,051.21 $ 75,000.00
Herndon, VA 20170
Porter, Randall A. ###-##-#### 1916 Briar Rose Lane, Apt. 304 7,972 17,182 $ 77,539.61
Woodbrige, VA 22192
Baldwin, Jr., Jesse R. ###-##-#### 7111 River Road 1,757 3,787 $ 17,089.45
Fredericksburg, VA 22407
Burns, Robert F. ###-##-#### 3904 Belle Rive Terrace 1,098 2,367 $ 10,679.69
Alexandria, VA 22309
Cruz-Solano, Amelita D. ###-##-#### 3336 Buckeye Lane 695 1,498 $ 6,759.91
Fairfax, VA 22033
Adamson, Christopher A. ###-##-#### 6411 Castlefin Way 1,386 2,987 $ 13,480.92
Alexandria, VA 22315
Akhtar, Rizwan ###-##-#### 7704 Modisto Lane 1,356 2,923 $ 13,189.13
Springfield, VA 22153
Jones, Greg H. ###-##-#### 6093 Loventree Road 2,256 4,862 $ 21,942.97
Columbia, MD 21044
Mercer, Mark B. ###-##-#### 8322 Tally Ho Road 678 1,461 $ 6,594.56
Lutherville, MD 21093
Sebenick, Paul A. ###-##-#### 8314 Delegate Drive 521 1,123 $ 5,067.50
King George, VA 22485
Rajagopal, Sanjay ###-##-#### 20 B Crescent Road 245 528 $ 2,382.99
Greenbelt, MD 20770
Simpers, Patrick K. ###-##-#### 6210 Point Circle 118 254 $ 1,147.73
Centreville, VA 20120
Lester, Jr., Delmar ###-##-#### P.O. Box 1334 78 168 $ 758.68
Spotsylvania, VA 22553
Sgamma, Kathleen M. ###-##-#### 16515 Judy Terrace 65 140 $ 632.22
Haymarket, VA 20169
Willinger, John P. ###-##-#### 10304 Battleridge Place 65 140 $ 632.22
Gaithersburg, MD 20879
==============================================================================================================================
TOTAL 120,290 259,258 $ 1,170,000.00 $150,000.00
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-1-
<PAGE> 1
EXHIBIT 10.30
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS Employment and Non-Competition Agreement (the "Agreement") is made
as of February 27, 1998, by and between Sagent Technology, Inc., a California
corporation ("Sagent"), Michael Venerable, an employee (the "Employee") of
Sagent Professional Services, Inc. (formerly known as Talus, Incorporated), a
Delaware corporation ("Company") and the Company.
A. Employee has been employed as an employee of Company; and
B. Sagent, the Company, and the other parties thereto have entered into
an Agreement and Plan of Reorganization dated as of February 27, 1998 (the
"Acquisition Agreement"), pursuant to which the Company merged with and into
Talus Acquisition Corp. ("MergerSub"), a wholly-owned subsidiary of Sagent (the
"Merger"), and which required, among other things, that Employee enter into this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Employment.
(a) Effectiveness of Agreement. This Employment and
Non-Competition Agreement shall become effective as of the date hereof.
(b) Duties. Sagent and the Company agree to continue the
employment of Employee and Employee agrees to perform such reasonable
responsibilities and duties as may be required of him or her by Sagent or the
Company. It is currently contemplated that Employee's duties shall comprise
those listed on Exhibit A hereto.
(c) Employment At-Will. The Company and the Employee acknowledge
and agree that the Employee's employment is at-will as defined under applicable
law. Unless a longer period is required by applicable law, the Company and the
Employee may terminate Employee's employment hereunder by giving 30 days'
advance notice in writing.
2. Compensation.
(a) Employee's initial base annual salary as of the date hereof
shall be $123,000 per annum. In addition, Employee will receive all benefits
provided to other Sagent consulting and training employees with similar duties,
including but not limited to paid vacations, health, disability and life
insurance. Employee will participate in Sagent's quarterly objectives plan and
shall be eligible to earn up to 30% of base salary in bonus under this plan.
(b) An option (the "Option") to purchase 150,000 shares of Common
Stock of Sagent shall be granted to Employee pursuant to the Option Agreement
attached as Exhibit B. The
<PAGE> 2
Option exercise price shall be the fair market value of Sagent's common stock,
as determined by the Board of Directors of Sagent. Twenty percent (20%) of the
Common Stock underlying the Option shall vest on the first anniversary of the
date hereof. An additional twenty percent (20%) of the Common Stock underlying
the Option shall vest on the second anniversary of the date hereof. The
remaining sixty percent (60%) of the Common Stock underlying the Option shall
vest on the third anniversary of the date hereof. The Option shall be subject to
the Change of Control Policy attached hereto as Exhibit D. Sagent will prepare
and file a Registration Statement on Form S-8 relating to any unexercised
portion of the Option as soon as practicable after an initial public offering
the Sagent's securities. If Employee is terminated for Cause, as defined below,
or Employee voluntarily terminates his employment arrangement other than for
Good Reason, as defined below, the Option shall accelerate and be immediately
exerciseable.
3. Covenant Not to Compete.
(a) Employee agrees that, for a period of three years from the
date hereof, if Employee is terminated for Cause, as defined below, or Employee
voluntarily terminates his employment arrangement other than for Good Reason, as
defined below, Employee will not directly or indirectly engage in (whether as an
employee, consultant, proprietor, partner, director or otherwise), or have a
ownership interest in, or participate in the financing, operation, management or
control of, any person, firm, corporation or business that engages in a
"Restricted Business" in a "Restricted Territory," as such terms are defined
below. It is agreed that ownership of (i) no more than one percent (1%) of the
outstanding voting stock of a publicly traded corporation, or (ii) any stock
presently owned by Employee as of the date hereof, shall not constitute a
violation of this provision.
(i) As used in this Agreement:
1) "Cause" shall mean (i) willful failure by the
Employee to substantially perform his duties hereunder, other than a failure
resulting from the Employee's complete or partial incapacity due to physical or
mental illness or impairment; (ii) a willful act by the Employee which
constitutes misconduct and which is injurious to Sagent or the Company; (iii) a
willful breach by the Employee of a material provision of this Agreement; or
(iv) a material and willful violation of a federal or state law or regulation
applicable to the business of Sagent or the Company. No act, or failure to act,
by the Employee shall be considered 'willful' unless committed without good
faith without a reasonable belief that the act or omission was in the Company's
best interest.
2) "Good Reason" shall mean the following (unless
such event(s) applies generally to all senior management of the Company):
(A) without the Employee's express written
consent, the assignment to the Employee of any duties or the reduction of the
Employee's duties, either of which results in a significant diminution in the
Employee's position or responsibilities with the Company in
-3-
<PAGE> 3
effect immediately prior to such assignment, or the removal of the Employee from
such position and responsibilities;
(B) without the Employee's express written
consent, a substantial reduction, without good business reasons, of the
facilities and perquisites (including office space and location) available to
the Employee immediately prior to such reduction;
(C) a material reduction by the Company in the
base salary or bonus opportunity of the Employee as in effect immediately prior
to such reduction;
(D) a material reduction by the Company in the
kind or level of employee benefits to which the Employee is entitled immediately
prior to such reduction with the result that the Employee's overall benefits
package is significantly reduced;
(E) the relocation of the Employee to a facility
or a location more than 25 miles from the Employee's then present location,
without the Employee's express written consent;
(F) any purported termination of the Employee's
employment by the Company which is not effected for death, disability or for
Cause, or any purported termination for which the grounds relied upon are not
valid;
(G) the failure of the Company to obtain the
assumption of this Agreement by any successor; or
(H) any material breach by the Company of any
material provision of this Agreement.
3) "Restricted Business" shall mean any business that
is engaged in or (to Employee's knowledge after due inquiry) preparing to engage
in the design, manufacture, marketing, sale, servicing or distribution of
products of a type sold, reasonably anticipated to be sold, or competitive with
any product of Sagent or the Company, or the providing of consulting services
for such products, during Employee's employment with either Sagent or the
Company.
4) "Restricted Territory" shall mean any location in
which the Company or Sagent sells, markets, distributes or has distributed
products, or any location in which the Company or Sagent plans to sell, market,
distribute or has distributed products.
(b) Employee agrees that, for a period of three years from the
date hereof, if Employee is terminated for Cause or Employee voluntarily
terminates his employment arrangement other than for Good Reason, Employee shall
not:
-4-
<PAGE> 4
(i) solicit, encourage, or take any other action which is
intended to induce any other employee of Company or Sagent to terminate his
employment with Company or Sagent, or
(ii) interfere in any manner with the contractual or
employment relationship between Company or Sagent and any such employee of
Company or Sagent.
(c) The parties acknowledge that the market for computer software
consulting is world-wide, and that, in this market, products from any nation
compete with products from all other nations. Accordingly, in order to secure to
Sagent and the Company the benefits of the Acquisition Agreement, the parties
agree that the provisions of this Section 3 shall apply to each of the states
and counties of the United States, including each county in California, and to
each nation worldwide.
(d) In the event that the provisions of this Section 3 should
ever be deemed to exceed the time or geographic limitations, or the scope of
this covenant, permitted by applicable law, then such provisions shall be
reformed to the maximum time or geographic limitations, as the case may be,
permitted by applicable laws.
4. Reasonableness of Covenant. Employee represents that he (i) is
familiar with the covenants not to compete and not to solicit set forth in
Section 3, and (ii) is fully aware of his obligations hereunder, including,
without limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants.
5. Confidential Information.
(a) Company Information. Employee agrees at all times during the
term of Employee's employment and thereafter, to hold in strictest confidence,
and not to use, except for the benefit of the Company or Sagent, or to disclose
to any person, firm or corporation without written authorization of the Board of
Directors (or an officer so authorized by the Board of Directors) of the Company
or Sagent, any Confidential Information of the Company or Sagent. Employee
understands that "Confidential Information" means any Company proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products, services, customer lists and
customers (including, but not limited to, customers of the Company on whom
Employee called or with whom Employee became acquainted during the term of
Employee's employment), markets, software, developments, inventions, technology,
designs, drawings, engineering, hardware configuration information, marketing,
finances or other business information disclosed to Employee by the Company
either directly or indirectly in writing, orally or by drawings or observation
of parts or equipment. Employee further understands that Confidential
Information does not include any of the foregoing items which has become
publicly known and made generally available through no wrongful act of Employee
or of others who were under confidentiality obligations as to the item or items
involved.
(b) Third Party Information. Employee recognizes that the Company
has received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on the Company's part
to maintain the confidentiality of such
-5-
<PAGE> 5
information and to use it only for certain limited purposes. Employee agrees to
hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or corporation or to use
it except as necessary in carrying out Employee's work for the Company
consistent with the Company's agreement with such third party.
6. Retaining and Assigning Inventions and Original Works
(a) Inventions and Original Works Retained by Me. Employee has
attached hereto, as Exhibit C, a list describing all inventions, original works
of authorship, developments, improvements, and trade secrets which were made by
Employee prior to Employee's employment with the Company, which belong to
Employee, which relate to the Company's proposed business and products, and
which are not assigned to the Company; or, if no such list is attached, Employee
repre sents that there are no such inventions.
(b) Inventions and Original Works Assigned to the Company.
Employee agrees that Employee will promptly make full written disclosure to the
Company, will hold in trust for the sole right and benefit of the Company, and
will assign to the Company all my right, title, and interest in and to any and
all inventions, original works of authorship, developments, improvements or
trade secrets which Employee may solely or jointly conceive or develop or reduce
to practice, or cause to be conceived or developed or reduced to practice,
during the period of time Employee is in the employ of the Company. However,
Employee recognizes, that Employee may exclude from such an assignment under
this provision, any invention as to which Employee can prove the following:
(i) it was developed entirely on Employee's own
time; and
(ii) no equipment, supplies, facility or trade secret
of Sagent or the Company was used in its
development; and
(iii) does not relate, at the time the invention was
conceived or reduced to practice, to Sagent's or
the Company's business or to Sagent's or the
Company's actual or demonstrably anticipated
research and development; and
(iv) does not result from any work performed by
Employee for Sagent or the Company.
Employee acknowledges that all original works of
authorship which are made by me (solely or jointly with others) within the scope
of Employee's employment and which are protectable by copyright are "works made
for hire," as that term is defined in the United States Copyright Act (17 USCA,
Section 101).
(c) Maintenance of Records. Employee agrees to keep and maintain
adequate and current written records of all inventions and original works of
authorship made by Employee (solely
-6-
<PAGE> 6
or jointly with others) during the term of Employee's employment with the
Company. The records will be in the form of notes, sketches, drawings, and any
other format that may be specified by the Company. The records will be available
to and remain the sole property of the Company at all times.
(d) Inventions Assigned to the United States. Employee agrees to
assign to the United States government all my right, title, and interest in and
to any and all inventions, original works of authorship, developments,
improvements or trade secrets whenever such full title is required to be in the
United States by a contract between the Company and the United States or any of
its agencies.
(e) Obtaining Letters Patent and Copyright Registrations.
Employee agrees that his obligation to assist the Company to obtain United
States or foreign letters patent and copyright registrations covering inventions
and original works of authorship assigned hereunder to the Company shall
continue beyond the termination of Employee's employment, but the Company shall
compensate Employee at a reasonable rate for time actually spent by Employee at
the Company's re quest on such assistance. If the Company is unable because of
Employee's mental or physical incapacity or for any other reason to secure
Employee's signature to apply for or to pursue any application for any United
States or foreign letters patent or copyright registrations covering inven tions
or original works of authorship assigned to the Company as above, then Employee
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Employee's agent and attorney in fact, to act for and in
Employee's behalf and stead to execute and file any such applications and to do
all other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations thereon with the same legal force and
effect as if executed by Employee. Employee hereby waives and quitclaims to the
Company any and all claims, of any nature whatsoever, which Employee now or may
hereafter have for infringement of any patents or copyrights resulting from any
such application for letters patent or copyright registrations assigned
hereunder to the Company.
(f) Exception to Assignments. Employee understands that the
provisions of this Agreement requiring assignment to the Company do not apply to
any invention which qualifies fully under the provisions set forth in paragraph
6(b). Employee will advise the Company promptly in writing of any inventions,
original works of authorship, developments, improvements or trade secrets that
Employee believes meet the criteria in Subparagraphs 6(b)(i), (ii), and (iii)
above; and Employee will at that time provide to the Company in writing all
evidence necessary to substantiate that belief. Employee understands that the
Company will keep in confidence and will not disclose to third parties without
Employee's consent any confidential information disclosed in writing to the
Company relating to such inventions.
7. Conflicting Employment. Employee agrees that, during the term of
Employee's employment with the Company, Employee will not engage in any other
employment, occupation, consulting or other business activity directly related
to the business in which the Company is now involved or becomes involved during
the term of Employee's employment, nor will Employee engage in any other
activities that conflict with Employee's obligations to the Company.
-7-
<PAGE> 7
8. Returning Company Documents. Employee agrees that, at the time of
leaving the employ of the Company, Employee will deliver to the Company (and
will not keep in his possession or deliver to anyone else) any and all devices,
records, data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, materials, equipment, other documents or
property, or reproductions of any aforementioned items belonging to Sagent, the
Company, or either of its successors or assigns.
9. Representations. Employee agrees to execute any proper oath or verify
any proper document required to carry out the terms of this Agreement. Employee
represents that his performance of all the terms of this Agreement will not
breach any agreement to keep in confidence proprietary information acquired by
him in confidence or in trust prior to his employment by the Company. Employee
has not entered into, and Employee agrees he will not enter into, any oral or
written agreement in conflict herewith.
10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California as applied to
agreements made and performed in California by residents of California.
11. Amendments. This Agreement shall not be changed or modified in whole
or in part except by an instrument in writing signed by each party hereto.
12. Attorneys' Fees. In the event of any legal action or proceeding to
enforce or interpret the provisions hereof, the provisions hereof, the
prevailing party shall be entitled to reasonable attorneys' fees, whether or not
the proceeding results in a final judgment.
13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
14. Effect of Headings. The section heading herein are for convenience
only and shall not affect the construction or interpretation of this Agreement.
-8-
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Employment and
Non-Competition Agreement as of the date first written above.
SAGENT TECHNOLOGY, INC.
a California corporation
By: /s/ Kenneth C. Garnder
---------------------------------------
Kenneth C. Gardner, President and Chief
Executive Officer
SAGENT PROFESSIONAL SERVICES, INC.
a Delaware Corporation
By: /s/ Kenneth C. Gardner
---------------------------------------
Kenneth C. Gardner, President and Chief
Executive Officer
EMPLOYEE
/s/ Michael P. Venerable
------------------------------------------------
Michael P. Venerable
12448 Valleyside Way
Germantown, MD 20874
(703) 406-8791
------------------------------------------------
(Print Telephone Number)
-9-
<PAGE> 9
EXHIBIT A
Description of Employee's Duties
Position: Vice President of Professional Services
Operational responsibility for all profiessional services including product
support consulting, long term project consulting, OEM consulting, product
training and other education services. Includes responsiblity for additional
service headcount added through future acquisitions. Sets strategic direction of
service organization consistent with corporate objectives, to include revenue
objectives, margin objectives, service product definition, and service product
pricing. Responsible for defining organizational structure, recruiting, staffing
and personnel decisions within the service organization. Responsible for service
partner programs and standards for consulting, product training and other
educational services.
-1-
<PAGE> 10
EXHIBIT B
Form of Option Agreement
-2-
<PAGE> 11
EXHIBIT C
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
<TABLE>
<CAPTION>
Identifying Number
Title Date or Brief Description
- ----- ---- --------------------
<S> <C> <C>
Book and associated CD 2/1/98 A book to be published by John Wiley &
Rom entitled "Data Associates, and an accompanying CD-ROM
Warehouse Design containing a series of designs for data
Solutions" warehouse, as well as report designs.
</TABLE>
-3-
<PAGE> 12
EXHIBIT D
CHANGE OF CONTROL POLICY
-4-
<PAGE> 1
EXHIBIT 21.1
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF
NAME INCORPORATION
- ---- ---------------
<S> <C>
Sagent Technology Japan KK Japan
Sagent Technology Canada Canada
</TABLE>
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-1 (File
No. ________) of our reports dated January 27, 1999 on our audits of the
consolidated financial statements and financial statement schedule of Sagent
Technology, Inc. We also consent to the reference to our firm under the caption
"Experts."
San Jose, California
January 27, 1999
F-40
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-1 (File No.
________) of our report dated February 20, 1998 on our audit of the financial
statements of Talus, Incorporated. We also consent to the reference to our firm
under the caption "Experts."
McClean, Virginia
January 27, 1999
F-41
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> DEC-31-1998 DEC-31-1997
<CASH> 3,039 3,813
<SECURITIES> 0 0
<RECEIVABLES> 5,376 1,603
<ALLOWANCES> 508 220
<INVENTORY> 0 0
<CURRENT-ASSETS> 9,301 5,636
<PP&E> 3,044 1,396
<DEPRECIATION> 2,201 1,136
<TOTAL-ASSETS> 13,196 7,185
<CURRENT-LIABILITIES> 8,179 3,435
<BONDS> 0 0
0 0
15 12
<COMMON> 4 3
<OTHER-SE> 1,652 3,108
<TOTAL-LIABILITY-AND-EQUITY> 13,196 7,185
<SALES> 17,043 7,078
<TOTAL-REVENUES> 17,043 7,078
<CGS> 5,066 873
<TOTAL-COSTS> 25,661 13,113
<OTHER-EXPENSES> (190) (199)
<LOSS-PROVISION> 58 450
<INTEREST-EXPENSE> 207 191
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<NET-INCOME> (13,701) (6,900)
<EPS-PRIMARY> (3.47) (2.41)
<EPS-DILUTED> (3.47) (2.41)
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