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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_________ to________
Commission file number 333-90165
XCARE.NET, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 85-0373486
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6400 S. FIDDLER'S GREEN CIRCLE, SUITE 1400, ENGLEWOOD, COLORADO 80111
(Address of principal executive offices)
(303) 488-2019
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class - Common stock, par value $.01 per share
Outstanding at May 5, 2000 - 16,238,050
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XCARE.NET, INC.
TABLE OF CONTENTS
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Page No.
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Part I - Financial Information
Item 1 - Financial Statements:
Balance Sheet as of March 31, 2000 and December 31, 1999 3
Statement of Operations for the Three Months Ended March 31, 2000 and 1999 4
Statement of Cash Flows for the Three Months Ended March 31, 2000 and 1999 5
Notes to Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 14
Part II - Other Information
Item 1 - Legal Proceedings 14
Item 2 - Changes in Securities and Use of Proceeds 14
Item 3 - Defaults Upon Senior Securities 15
Item 4 - Submission of Matters to a Vote of Security Holders 15
Item 5 - Other Information 16
Item 6 - Exhibits and Reports on Form 8-K 16
Signatures 17
</TABLE>
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XCARE.NET, INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
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ASSETS
MARCH 31, DECEMBER 31,
2000 1999
---------- ------------
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Current assets:
Cash and cash equivalents $ 98,808 $ 7,455
Accounts receivable, net of allowance of $391 and $141 at March 31, 2000 and
December 31, 1999, respectively 1,084 890
Receivable from affiliate 453 453
Work performed in advance of billings 2,643 557
Other current assets 1,123 1,296
---------- ----------
Total current assets 104,111 10,651
Property and equipment, net 2,290 1,368
Purchased software, net 495 566
Other assets 834 598
---------- ----------
Total assets $ 107,730 $ 13,183
========== ==========
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 1,955 $ 819
Accrued liabilities 2,583 1,449
Unearned revenue 734 153
Current portion of long-term debt and capital lease obligations 79 92
---------- ----------
Total liabilities 5,351 2,513
---------- ----------
Series A mandatorily redeemable convertible preferred stock, $.01 par value; 0 and
6,000,000 shares authorized as of March 31, 2000 and December 31, 1999,
respectively; 0 and 2,450,000 shares issued and outstanding as of March 31, 2000
and December 31, 1999, respectively -- 6,810
Series B mandatorily redeemable convertible preferred stock, $.01 par value; 0 and
75,000,000 shares authorized as of March 31, 2000 and December 31, 1999,
respectively; 0 and 63,053,144 shares issued and outstanding as of March 31, 2000
and December 31, 1999, respectively -- 16,948
Value ascribed to mandatorily redeemable convertible preferred stock warrants -- 84
---------- ----------
-- 23,842
---------- ----------
Stockholders' equity (deficit):
Preferred stock, $.01 par value, 5,000,000 and 0 shares authorized as of March 31,
2000 and December 31, 1999, respectively; no shares issued and outstanding at
March 31, 2000 and December 31, 1999, respectively -- --
Common stock, $.01 par value; 100,000,000 and 12,500,000 shares authorized as
of March 31, 2000 and December 31, 1999, respectively; 16,238,050 and 577,663
shares issued and outstanding as of March 31, 2000 and December 31, 1999,
respectively 162 6
Additional paid-in capital 121,634 3,432
Unearned compensation, net (1,873) (2,269)
Accumulated deficit (17,544) (14,341)
---------- ----------
Total stockholders' equity (deficit) 102,379 (13,172)
---------- ----------
Total liabilities and stockholders' equity (deficit) $ 107,730 $ 13,183
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
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XCARE.NET, INC.
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------
2000 1999
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<S> <C> <C>
Revenue $ 2,465 $ 1,311
Revenue from affiliate 387 --
---------- ----------
Total revenue 2,852 1,311
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Costs and expenses:
Cost of revenue 2,797 923
Sales and marketing 1,110 155
General and administrative 1,867 144
Research and development 461 104
Stock compensation expense 518 --
---------- ----------
Total costs and expenses 6,753 1,326
---------- ----------
Loss from operations (3,901) (15)
Interest income (expense), net 698 (136)
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Net loss $ (3,203) $ (151)
========== ==========
Net loss per common share - basic and diluted (.37) (.43)
========== ==========
Weighted average common shares outstanding -
basic and diluted 8,758 390
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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XCARE.NET, INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
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THREE MONTHS ENDED
MARCH 31,
---------------------------
2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,203) $ (151)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 289 188
Loss on long-term contract 145 --
Provision for losses on receivables 250 --
Amortization of unearned compensation 518 --
Other 133 31
Change in assets and liabilities:
Accounts receivable (444) 58
Work performed in advance of billings (2,086) --
Other current assets (920) 32
Other assets (236) 258
Accounts payable 1,136 850
Accrued liabilities 989 (789)
Unearned revenue 581 (201)
---------- ----------
Net cash provided by (used in) operating activities (2,848) 276
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (1,140) (36)
---------- ----------
Net cash used in investing activities (1,140) (36)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on debt (2) (13)
Principal payments under capital leases (11) (152)
Proceeds from issuance of common stock, net 95,326 --
Exercises of stock options 28 --
---------- ----------
Net cash provided by (used in) financing activities 95,341 (165)
---------- ----------
Net increase in cash and cash equivalents 91,353 75
Cash and cash equivalents at beginning of period 7,455 198
---------- ----------
Cash and cash equivalents at end of period $ 98,808 $ 273
========== ==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING TRANSACTIONS
Conversion of mandatorily redeemable preferred stock and mandatorily
redeemable preferred stock warrants to common stock $ 23,849 --
</TABLE>
The accompanying notes are an integral part of these financial statements
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XCARE.NET, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Interim Financial Statements. The accompanying financial statements of
XCare.net, Inc. (the "Company") have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been condensed or omitted pursuant to such rules and regulations. However,
the Company believes that the disclosures are adequate to make the information
presented not misleading. The unaudited financial statements included herein
have been prepared on the same basis as the annual financial statements and
reflect all adjustments, which include only normal recurring adjustments
necessary for a fair presentation in accordance with accounting principles
generally accepted in the United States. The results for the three-month period
ended March 31, 2000 are not necessarily indicative of the results expected for
the full year. These financial statements should be read in conjunction with the
audited financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999.
On February 9, 2000, the SEC declared effective the Company's Registration
Statement on Form S-1. Pursuant to this Registration Statement, the Company
completed an Initial Public Offering ("IPO") of 5,750,000 shares of its common
stock (including 750,000 shares sold pursuant to the exercise of the
underwriter's over-allotment option) at an IPO offering price of $18.00 per
share (the "Offering"). Proceeds to the Company from the Offering, after
calculation of the underwriter's discount, totaled approximately $94.2 million,
net of offering costs of approximately $2.0 million. Concurrent with the closing
of the IPO, all outstanding shares of the Company's convertible preferred stock
were automatically converted into 9,108,122 shares of common stock. In addition,
upon closing of the IPO, all outstanding common stock warrants and the Series A
convertible preferred stock warrants were exercised. The Series A convertible
preferred stock issued upon the exercise of the latter warrants was
automatically converted into common stock and together with the exercise of the
common stock warrants, resulted in the issuance of 702,924 additional shares of
common stock.
Revenue Recognition. For contracts entered into subsequent to January 1,
1998, the Company recognizes revenue in accordance with the provisions of
Statement of Position 97-2, "Software Revenue Recognition". The Company derives
revenue from license fees and related services under the terms of fixed price
contracts. Maintenance revenue is derived from agreements for supporting and
providing periodic updates to licensed software. Consulting revenue consists of
revenue from consulting services provided pursuant to time and materials
contracts. Transaction processing revenue is derived from transaction processing
services and is recognized on a per-transaction basis as services are performed.
Operational support revenue is derived from agreements for supporting and
maintaining customers' processing environments and is recognized ratably over
the service period.
License fees and related services revenue is generally recognized from
fixed price contracts using the percentage-of-completion method of accounting
where collectibility of fees is probable. Where collectibility of fees is not
probable, the Company defers revenue and related costs as deferred contract
costs and recognizes revenue and cost of revenue as cash is collected.
The Company may encounter budget and schedule overruns on fixed price
contracts caused by increased material, labor or overhead costs. Adjustments to
cost estimates are made in the periods in which the facts requiring such
revisions become known. Estimated losses, if any, are recorded in the period in
which current estimates of total contract revenue and contract costs indicate a
loss. The Company does not require collateral for its receivables and an
allowance is maintained for potential credit losses.
Maintenance revenue and operational support revenue are recorded as
unearned revenue and are recognized ratably over the service periods, which are
generally 12 months. When maintenance is bundled with the original license fee
arrangement, its fair value is deferred and recognized during the period such
services are provided.
Revenue from consulting services provided pursuant to time-and-materials
contracts is recognized as the services
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are performed.
Reclassifications. Certain prior year information has been reclassified to
conform with the current year presentation.
2. NET LOSS PER COMMON SHARE
Net loss per common share is calculated in accordance with SFAS No. 128,
"Earnings per Share". Under the provisions of SFAS No. 128, basic net loss per
common share is computed by dividing the net loss for the period by the weighted
average number of common shares outstanding during the period. Diluted net loss
per common share is computed by dividing the net loss for the period by the
weighted average number of common and potential common shares outstanding during
the period if their effect is dilutive. Potential common shares consist of
incremental common shares issuable upon the exercise of stock options and
warrants.
The following table sets forth the computation of the numerators and
denominators in the basic and diluted net loss per common share calculations for
the periods indicated:
<TABLE>
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THREE MONTHS ENDED
MARCH 31,
2000 1999
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Numerator:
Net loss $ (3,203) $ (151)
Accretion of mandatorily redeemable convertible preferred stock (7) (17)
---------- ----------
Net loss available to common stockholders $ (3,210) $ (168)
========== ==========
Denominator:
Weighted average common shares outstanding-- basic and diluted 8,758 390
========== ==========
</TABLE>
3. RECENT ACCOUNTING PRONOUNCEMENTS
The Securities and Exchange Commission issued Staff Accounting Bulletin
(SAB) No. 101, "Revenue Recognition in Financial Statements," as amended, in
December 1999 that provides further interpretive guidance for public companies.
SAB No. 101 will be effective for the Company's second quarter of 2000.
Management anticipates that the adoption of SAB No. 101 will not have a material
impact on the Company's financial condition or results of operations and that it
will not have a significant impact on its current licensing or revenue
recognition practices.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
All statements, trend analysis and other information contained in this
Management's Discussion and Analysis Of Financial Condition and Results of
Operations" of XCare.net, Inc. ("XCare," or the "Company") are forward-looking
statements within the meaning of the Private-Securities Litigation Reform Act of
1995. These forward-looking statements include, without limitation, discussion
relative to markets for our products and trends in revenue, gross margins and
anticipated expense levels, as well as other statements including words such as
"anticipate," "believe," "plan," "estimate," "expect" and "intend" and other
similar expressions. All statements regarding the Company's expected financial
position and operating results, business strategy, financing plans, forecast
trends relating to our industry are forward-looking statements. These
forward-looking statements are subject to business and economic risks and
uncertainties, and our 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 the Company's Annual report on Form 10-K for the year ended December 31, 1999
under "Risk Factors" on pages 30 - 40. Unless required by law, the Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events, or otherwise.
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However, readers should carefully review the risk factors set forth in other
reports or documents the Company files from time to time with the Securities and
Exchange Commission.
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OVERVIEW
XCare.net is an electronic commerce service provider for health care
businesses. We have developed an Internet-based technology platform using
extensible mark-up language, or XML, to process health care transactions and
provide related services for payers, providers and other health care industry
participants. We provide transaction processing services such as eligibility
checking, claims submission, referral processing, physician credentialing, and
appointment scheduling. We also provide consulting services to define, develop
and implement Internet healthcare strategies as well as Web-site hosting,
operational support and maintenance services for our customers.
Utilizing our proprietary technology platform, which we call the XCare.net
platform, we design and develop custom health care Web sites, known as portals.
Through these portals we link health care providers, payers and other industry
participants into a community to form an Internet exchange. We use the XCare.net
platform to deliver a broad range of applications, services and electronic
product offerings that streamline and automate high-volume, data-intensive
transactions and processes.
On February 9, 2000, the SEC declared effective the Company's Registration
Statement on Form S-1. Pursuant to this Registration Statement, the Company
completed an Initial Public Offering ("IPO") of 5,750,000 shares of its common
stock (including 750,000 shares sold pursuant to the exercise of the
underwriter's over-allotment option) at an IPO offering price of $18.00 per
share (the "Offering"). Proceeds to the Company from the Offering, after
calculation of the underwriter's discount, totaled approximately $94.2 million,
net of offering costs of approximately $2.0 million. Concurrent with the closing
of the IPO, all outstanding shares of the Company's convertible preferred stock
were automatically converted into 9,108,122 shares of common stock. In addition,
upon closing of the IPO, all outstanding common stock warrants and the Series A
convertible preferred stock warrants were exercised. The Series A convertible
preferred stock issued upon the exercise of the latter warrants was
automatically converted into common stock and together with the exercise of the
common stock warrants, resulted in the issuance of 702,924 additional shares of
common stock.
We recognize revenue in accordance with the provisions of Statement of
Position 97-2, "Software Revenue Recognition." We derive revenue from license
fees and related services under the terms of fixed price contracts. Maintenance
revenue is derived from agreements for supporting and providing periodic updates
to licensed software. Consulting revenue consists of revenue from consulting
services provided pursuant to time and materials contracts. Transaction
processing revenue is derived from transaction processing services and is
recognized on a per-transaction basis as services are performed. Operational
support revenue is derived from agreements for supporting and maintaining
customers' processing environments and is recognized ratably over the service
period.
License fees and related services revenue is generally recognized from
fixed price contracts using the percentage-of-completion method of accounting
where collectibility of fees is probable. Where collectibility of fees is not
probable, we defer revenue and related costs as deferred contract costs and
recognize revenue and cost of revenue as cash is collected.
We may encounter budget and schedule overruns on fixed price contracts
caused by increased material, labor or overhead costs. Adjustments to cost
estimates are made in the periods in which the facts requiring such revisions
become known. Estimated losses, if any, are recorded in the period in which
current estimates of total contract revenue and contract costs indicate a loss.
We do not require collateral for our receivables and an allowance is maintained
for potential credit losses.
Maintenance revenue is recorded as unearned revenue and is recognized
ratably over the service period, which is generally 12 months. When maintenance
is bundled with the original license fee arrangement, its fair value is deferred
and recognized during the period such services are provided.
Revenue from consulting services provided pursuant to time-and-materials
contracts is recognized as the services are performed.
We incurred net losses and losses from operations the three months ended
March 31, 2000 and 1999. As of March 31, 2000, we had an accumulated deficit of
approximately $17.5 million. Since we began developing and
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marketing our Internet-based health care applications, services, and product
offerings in early 1999, we have funded our business primarily by borrowing
funds and from the sale of convertible preferred stock, and from our initial
public offering of stock, not from cash generated by our business. We expect to
continue to incur significant sales and marketing, research and development and
general and administrative expenses. As a result, we will experience losses and
negative cash flows for the foreseeable future. Factors which may prevent us
from achieving or maintaining profitability and cause our stock price to decline
include the demand for and acceptance of our solutions and our ability to
attract new customers.
During 1999 and through February 10, 2000, the effective date of the
Company's initial public offering, in connection with stock options granted to
certain employees and a consultant under the stock plan, we recorded unearned
stock compensation representing the difference between the exercise price of the
options and the deemed fair value of our common stock at the date of grant. This
unearned stock compensation will be amortized to expense over the period during
which the options or common stock subject to repurchase vest, generally four
years, using an accelerated method as described in Financial Accounting
Standards Board Interpretation No. 28. Amortization of unearned stock
compensation amounted to approximately $518,000 during the three months ended
March 31, 2000. We expect to recognize amortization expense related to unearned
compensation for the aforementioned grants of approximately $1,510,000 in 2000,
$570,000 in 2001, $260,000 in 2002 and $52,000 in 2003.
In 1999, Laidlaw Inc., the Canadian parent company of American Medical
Response, Inc. announced its intention to divest its interest in that company in
order to focus on its transportation business. American Medical Response, Inc.
is the parent company of one of our customers, American Medical Pathways, Inc
("AMP"). If such a sale is consummated, and the new owner decided to terminate
our agreement, there would likely be a material adverse impact on our future
earnings and cash flow. As of March 31, 2000, there has been no change in our
relationship with AMP and we have continued to provide services under our
agreement.
The following table sets forth, for the periods indicated, certain items
from the Company's statements of operations as a percentage of total revenue:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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2000 1999
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Revenue 86.4% 100.0%
Revenue from affiliate 13.6 --
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Total revenue 100.0 100.0
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Costs and expenses:
Cost of revenue 98.1 70.4
Sales and marketing 38.9 11.8
General and administrative 65.5 11.0
Research and development 16.2 7.9
Stock compensation expense 18.2 --
------ -----
Total costs and expenses 236.8 101.1
------ -----
Loss from operations (136.8) (1.1)
Interest income (expense), net 24.5 (10.4)
------ -----
Net loss (112.3)% (11.5)%
====== =====
</TABLE>
COMPARISON OF THE COMPANY'S RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2000
AND 1999.
Total revenue. Total revenue increased $1.6 million, or 117%, to $2.9
million for the three months ended March 31, 2000 from $1.3 for the three months
ended March 31, 1999. This increase reflects revenue recognized from existing
customers and an increase in average total arrangement fees during the three
months ended March 31, 2000, as compared to the same 1999 period.
Cost of revenue. Cost of revenue includes personnel and related overhead
costs, payments to third-party consultants who assist with implementation and
support services, facilities costs and equipment depreciation. Cost
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of revenue increased $1.9 million, or 203%, to $2.8 million for the three months
ended March 31, 2000 from $923,000 for the year earlier period. This increase
reflects the cost of additional personnel hired to support the growth in our
internet-based implementation and customer development. Also, for the three
months ended March 31, 2000, significant research and development costs were
charged to cost of revenue. This resulted from the Company entering into a
development agreement with a major customer prior to completion of the internal
development effort. We anticipate cost of revenue expenditures will increase as
we continue to expand our internet strategy.
Sales and marketing. Sales and marketing expenses consist of personnel and
related overhead costs, including commissions, travel expenses, field sales
office expenses and advertising and promotion costs. Sales and marketing
expenses increased $955,000, or 616%, to $1.1 million during the three months
ended March 31,2000 from $155,000 for the three months ended March 31, 1999.
This increase reflects salary and benefit increases due to the growth of sales
and marketing personnel by approximately 370%, as well as the associated
increases in support areas such as facilities and telephone costs. In
conjunction with this growth, expenses were incurred to develop an in-depth
market and competitive analysis and brand development plan. Additionally, travel
and entertainment and trade show and conference expenses increased as the
marketing program was expanded and intensified.
General and administrative. General and administrative expenses include
personnel and related overhead costs for our executive, administrative, finance
and human resources functions, as well as legal and accounting fees. General and
administrative expenses increased $1.7 million, or 1,196%, to $1.9 million for
the three months ended March 31, 2000 from $144,000 from the year earlier
period. This increase was due to the rapid growth of the Company, as well as its
transition from a private Company to a public company. Growth related expenses
were primarily due to an increase in personnel and recruiting costs in the areas
of human resources, accounting and administration. To increase the rate of
growth, outside contractors have been hired to perform certain support functions
as the permanent staff is being assembled. Professional fees increased due to
additional legal and accounting fees associated with periodic reporting
requirements of a public company. Officers and directors insurance was obtained
subsequent to becoming a public company, resulting in an increase in insurance
expense of approximately $80,000. Additionally, to settle a dispute, we revised
the exercise price of a warrant to purchase shares of common stock, and in
conjunction with the exercise of those warrants, recorded a one-time charge of
$132,000 during the first quarter of 2000.
Research and development. Research and development expenses include
personnel and related overhead costs for product development, enhancements to
existing applications and services and quality assurance activities. Research
and development expenses increased $357,000, or 343%, to $461,000 for the three
months ended March 31, 2000 from $104,000 for the three months ended March 31,
1999. This increase reflects an increase in salaries and benefits due to a 42%
increase in departmental personnel and the use of outside contractors.
Stock compensation expense. During the three months ended March 31, 2000,
we recorded aggregate unearned compensation of $122,000 in connection with the
grant of certain stock options. Amortization of the aggregate amount of unearned
compensation amounted to $518,000 for the three months ended March 31, 2000.
Interest income (expense), net. Interest income (expense), net includes
interest expense on our convertible promissory notes and capital lease
obligations offset by interest income on cash and cash equivalent balances.
Interest income, net of interest expense, increased $834,000, to $698,000 for
the three months ended March 31, 2000 from a net interest expense of $136,000
for the prior year. This increase is due to the conversion of convertible
promissory notes to Series B convertible preferred stock in June 1999, the
reduction of debt and capital lease obligations during 1999 with the proceeds of
the Series B preferred stock issued for cash, as noted above, and the interest
income realized from the investment of the proceeds from our initial public
offering which occurred in February 2000.
Income tax (benefit) expense. No provision for federal and state income
taxes has been recorded for the three months ended March 31, 2000 or 1999 as we
have incurred net operating losses for each of these periods. We believe that,
based on the history of losses and other factors, the weight of available
evidence indicates that it is
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more likely than not that we will not be able to realize our deferred tax
assets, and thus a full valuation allowance has been recorded against such
assets as of March 31, 2000 and 1999.
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Net loss. Net loss increased $3.1 million to $3.2 million for the three
months ended March 31, 1999 from $151,000 for the year earlier period. This
increase is the result of increases in revenue of $1.6 million and interest
income (expense), net of $834,000, offset by an increase in total costs and
expenses of $5.4 million, as discussed above.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed our operations through a combination of cash
flow from operations, private sales of common and convertible preferred stock,
and issuances of convertible promissory notes. At March 31,2000, our principal
sources of liquidity included $98.8 million in working capital with no long-term
outstanding debt. The Company performs ongoing evaluations of its customers'
financial condition and, generally, requires no collateral from its customers.
All such customers operate in the health care industry.
On February 9, 2000, the SEC declared effective the Company's Registration
Statement on Form S-1. Pursuant to this Registration Statement, the Company
completed an Initial Public Offering ("IPO") of 5,750,000 shares of its common
stock (including 750,000 shares sold pursuant to the exercise of the
underwriter's over-allotment option) at an IPO offering price of $18.00 per
share (the "Offering"). Proceeds to the Company from the Offering, after
calculation of the underwriter's discount, totaled approximately $94.2 million,
net of offering costs of approximately $2.0 million. Concurrent with the closing
of the IPO, all outstanding shares of the Company's convertible preferred stock
were automatically converted into 9,108,122 shares of common stock. In addition,
upon closing of the IPO, all outstanding common stock warrants and the Series A
convertible preferred stock warrants were exercised. The Series A convertible
preferred stock issued upon the exercise of the latter warrants was
automatically converted into common stock and together with the exercise of the
common stock warrants, resulted in the issuance of 702,924 additional shares of
common stock.
We expect to use our cash and cash equivalents, as well as the net proceeds
from this offering, for general corporate purposes, working capital and capital
expenditures to fund our operations, including to continue expanding and
enhancing our sales and marketing operations and to continue expanding our
product offerings. The amounts and timing of our actual expenditures will depend
upon numerous factors, including the status of our product development efforts,
marketing and sales activities, and the amount of cash generated by our
operations and competition. We may find it necessary or advisable to use
portions of the proceeds for other purposes. A portion of the proceeds may also
be used to acquire or invest in complementary businesses or products or to
obtain the right to use complementary technologies, although there are no
current plans, negotiations or discussions for any such transactions. Pending
use of the net proceeds for the above purposes, we intend to invest such funds
in short-term, interest-bearing, investment grade obligations.
Net cash used in operating activities for the three months ended March 31,
2000 was $2.8 million and net cash provided by operating activities for the
three months ended March 31, 1999 was $276,000. Net cash used in operating
activities is primarily attributable to net losses and net cash provided by
operating activities is primarily attributable to an increase in certain
liability accounts.
Net cash used in investing activities for the three months ended March 31,
2000 and 1999 was $1.1 million and $36,000, respectively. Investing activities
consist primarily of purchases of computer hardware and software, office
furniture and equipment, offset by proceeds from the sale of property and
equipment.
Net cash provided by financing activities for the three months ended March
31, 2000 was $95.3 million and net cash used for financing activities for the
three months ended March 31, 1999 was $165,000 and consists primarily of net
proceeds from our initial public offering.
We anticipate that the above funds will be sufficient to meet our needs as
described above for the next eighteen months. Thereafter, we may require
additional funds to support our working capital requirements or for other
purposes, and we may seek, even before such time, to raise additional funds
through public or private equity financing or from other sources. Such
additional financing may not be available at all or, if available, on terms
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<PAGE> 14
acceptable to us and that are not dilutive to our stockholders.
RECENT ACCOUNTING PRONOUNCEMENTS
The Securities and Exchange Commission issued Staff Accounting Bulletin
(SAB) No. 101, "Revenue Recognition in Financial Statements," as amended, in
December 1999 that provides further interpretive guidance for public companies.
SAB No. 101 will be effective for the Company's second quarter of 2000.
Management anticipates that the adoption of SAB No. 101 will not have a material
impact on the Company's financial condition or results of operations and that it
will not have a significant impact on its current licensing or revenue
recognition practices.
FACTORS AFFECTING THE COMPANY'S BUSINESS, OPERATING RESULTS AND FINANCIAL
CONDITION
In addition to other information contained in this Quarterly Report on Form
10-Q, the following risk factors should be carefully considered in evaluating
the Company and its business because such factors currently have a significant
impact, or may have a significant impact, on the Company's business, operating
results or financial condition.
We have experienced quarterly fluctuations in our operating and financial
results due to the timing and relative size of new custom software development
projects, cancellations of projects and fluctuations in cost including
personnel, equipment and facilities costs. We expect quarterly results to
fluctuate in the future due to the timing and introduction of new applications
and services and other market factors.
Additional risk factors that currently have a significant impact, or may
have a significant impact on the Company's business, operating results or
financial condition include, but are not limited to, those discussed in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999, under
"Risk Factors" on pages 30 - 40. Unless required by law, the Company undertakes
no obligation to update publicly any forward-looking statements, whether as a
result of new information, future events, or otherwise. However, readers should
carefully review the risk factors set forth in other reports or documents the
Company files from time to time with the Securities and Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the ordinary course of its operations, the Company is exposed to certain
market risks, primarily changes in interest rates. Uncertainties that are either
nonfinancial or nonquantifiable, such as political, economic, other regulatory,
or credit risks are not included in the following assessment of the Company's
market risks.
Interest Rates. Investments, including cash equivalents, consist of U.S.,
state, and municipal bonds, as well as domestic corporate bonds, with maturities
of up to 18 months. All investments are classified as held-to-maturity as
defined in SFAS No. 115. "Accounting for Certain Investments in Debt and Equity
Securities," and, accordingly, are carried at amortized cost.
Part II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings pending against us. We could become
involved in litigation from time to time relating to claims arising out of our
ordinary course of business.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 9, 2000, the SEC declared effective the Company's Registration
Statement on Form S-1. Pursuant
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<PAGE> 15
to this Registration Statement, the Company completed an Initial Public Offering
("IPO") of 5,750,000 shares of its common stock (including 750,000 shares sold
pursuant to the exercise of the underwriter's over-allotment option) at an IPO
offering price of $18.00 per share (the "Offering"). Proceeds to the Company
from the Offering, after calculation of the underwriter's discount, totaled
approximately $94.2 million, net of offering costs of approximately $2.0
million. Concurrent with the closing of the IPO, all outstanding shares of the
Company's convertible preferred stock were automatically converted into
9,108,122 shares of common stock. In addition, upon closing of the IPO, all
outstanding common stock warrants and the Series A convertible preferred stock
warrants were exercised. The Series A convertible preferred stock issued upon
the exercise of the latter warrants was automatically converted into common
stock and together with the exercise of the common stock warrants, resulted in
the issuance of 702,924 additional shares of common stock.
We expect to use the net proceeds from this offering for general corporate
purposes, working capital and capital expenditures to fund our operations,
including to continue expanding and enhancing our sales and marketing operations
and to continue expanding our product offerings. The amounts and timing of our
actual expenditures will depend upon numerous factors, including the status of
our product development efforts, marketing and sales activities, and the amount
of cash generated by our operations and competition. We may find it necessary or
advisable to use portions of the proceeds for other purposes.
A portion of the proceeds may also be used to acquire or invest in
complementary businesses or products or to obtain the right to use complementary
technologies, although there are no current plans, negotiations or discussions
for any such transactions. Pending use of the net proceeds for the above
purposes, we intend to invest such funds in short-term, interest-bearing,
investment grade obligations.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pursuant to section 228 of the Delaware General Corporation Law, the
holders of outstanding voting stock of XCare,net, Inc., a Delaware corporation,
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted, adopted the following items by written consent,
without a meeting, effective as of December 31, 1999.
1. The amendment of the Certificate of Incorporation to effect a
reverse stock split of 10 shares to one share.
2. The amendment and restatement of the Certificate of Incorporation
to (i) increase the authorized number of post-reverse split
shares of Common Stock to 100,000,000 shares, (ii) authorize
5,000,000 shares of blank check Preferred Stock, (iii) classify
the Board of Directors, (iv) impose a supermajority voting
requirement for certain proposals, and (v) eliminate stockholder
actions by written consent.
3. The amendment and restatement of the Bylaws of the Company to,
among other things, (i) restrict who may call special shareholder
meetings upon the closing of the Public Offering; (ii) establish
the exact number of directors on the Board at nine; and (iii)
eliminate stockholder actions by written consent.
4. The amendment and restatement of the 1997 Stock Plan, effective
upon the effective date of the Offering.
5. The adoption of the 1999 Employee Stock Purchase Plan, effective
upon the effective date of the Offering, and the reservation of
500,000 shares of Common Stock for issuance to employees of the
Company who purchase shares through accumulated payroll
deductions in accordance with the applicable law, plus an annual
increase to be added on the date of the anniversary of the
adoption of the
15
<PAGE> 16
Purchase Plan equal to the lesser of (i) 500,000 shares, or (ii)
2% of the outstanding shares on such date or lesser amount
determined by the Board.
6. The adoption of the 1999 Director Stock Option Plan, effective
upon the effective date of the Offering, and the reservation of
250,000 shares of Common Stock for issuance thereunder.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
10.38 Hosting Services Agreement, dated September 9, 1999, by and
between Registrant and Breathnet, LLC.
10.39 Development Services Agreement, dated January 19, 2000, by and
between Registrant and Community Health Electronic Clearing House
10.40 Hosting Services Agreement, dated January 19, 2000, by and
between Registrant and Texas Managed Care Administrative Services
10.41 Development Services Agreement, dated February 24, 2000, by and
between Registrant and Texas Managed Care Administrative Services
10.42 Engagement for Development Services Agreement, dated February
29, 2000, by and between Registrant and Notify MD, Inc.
10.43 Development Services Agreement, dated March 31, 2000, by and
between Registrant and Lamar.com, Inc.
10.44 Product Collaboration Agreement, dated January 19, 2000, by and
between Registrant and e-MEDX, Inc.
10.45 Professional Services Agreement, dated December 28, 1999, by and
between Registrant and Expert Practice, Inc.
10.46 Content Distribution Agreement, dated January 3, 2000, by and
between Registrant and HealthGrades.com, Inc.
10.47 Office lease, dated April 24, 2000, by and between Registrant
and Property Colorado OBJLW One Corporation and USA Global Link,
Inc.
10.48 Office lease, dated February 23, 2000, by and between Registrant
and Foster Enterprises
27.1 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not
filed.
Reports on Form 8-K
None
16
<PAGE> 17
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
XCARE.NET, INC.
Date: May 15, 2000 By: /s/ Lorine R. Sweeney
---------------------------------------
Lorine R. Sweeney
President and Chief Executive Officer
Date: May 15, 2000 By: /s/ Peter H. Cheesbrough
---------------------------------------
Peter H. Cheesbrough
Senior Vice President of Finance and
Chief Financial Officer
17
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
10.38 Hosting Services Agreement, dated September 9, 1999, by and
between Registrant and Breathnet, LLC.
10.39 Development Services Agreement, dated January 19, 2000, by and
between Registrant and Community Health Electronic Clearing House
10.40 Hosting Services Agreement, dated January 19, 2000, by and
between Registrant and Texas Managed Care Administrative Services
10.41 Development Services Agreement, dated February 24, 2000, by and
between Registrant and Texas Managed Care Administrative Services
10.42 Engagement for Development Services Agreement, dated February
29, 2000, by and between Registrant and Notify MD, Inc.
10.43 Development Services Agreement, dated March 31, 2000, by and
between Registrant and Lamar.com, Inc.
10.44 Product Collaboration Agreement, dated January 19, 2000, by and
between Registrant and e-MEDX, Inc.
10.45 Professional Services Agreement, dated December 28, 1999, by and
between Registrant and Expert Practice, Inc.
10.46 Content Distribution Agreement, dated January 3, 2000, by and
between Registrant and HealthGrades.com, Inc.
10.47 Office lease, dated April 24, 2000, by and between Registrant
and Property Colorado OBJLW One Corporation and USA Global Link,
Inc.
10.48 Office lease, dated February 23, 2000, by and between Registrant
and Foster Enterprises
27.1 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not
filed.
</TABLE>
<PAGE> 1
ATTACHMENT 7
HOSTING SERVICES AGREEMENT
This Hosting Services Agreement (the "Agreement") is entered into as of
September 9, 1999 (the "Effective Date") by and between XCare.net, a Delaware
corporation with offices at 6400 S. Fiddler's Green Circle, Englewood, CO 80111,
("XCare.net"), and Breathnet LLC, a Delaware limited liability corporation with
offices at 17 Pequot Trail, Westport, CT 06880 ("Client").
This Agreement includes the following schedules, which are incorporated
herein by this reference:
Schedule 1 Hosting Services Description and Pricing
Schedule 2 Managed Services Option
Any notice required or permitted under this Agreement will be in
writing and delivered to the address set forth below, or to such other notice
address as the other party has provided by written notice.
THIS AGREEMENT, INCLUDING THE SCHEDULES LISTED ABOVE, CONSTITUTES THE
COMPLETE AND EXCLUSIVE UNDERSTANDING OF THE PARTIES WITH REFERENCE TO THE
SUBJECT MATTER HEREOF, AND SUPERSEDES ALL PRIOR SALES PROPOSALS, NEGOTIATIONS,
AGREEMENTS AND OTHER REPRESENTATIONS OR COMMUNICATIONS, WHETHER ORAL OR WRITTEN.
IF THERE IS ANY CONFLICT BETWEEN THE TERMS AND CONDITIONS OF CLIENT'S PURCHASE
ORDER (OR ANY OTHER PURCHASE OR SALES DOCUMENT) AND THE TERMS AND CONDITIONS OF
THIS AGREEMENT, THIS AGREEMENT SHALL CONTROL. THIS AGREEMENT MAY BE MODIFIED,
REPLACED OR RESCINDED ONLY IN WRITING, AND SIGNED BY A DULY AUTHORIZED
REPRESENTATIVE OF EACH PARTY.
AGREED:
XCare.net Client Breathnet
----------------------
17 Pequot Trail
- ----------------------------- -----------------------------
Westport, CT 06880
- ----------------------------- -----------------------------
- ----------------------------- -----------------------------
By: /s/ LORINE SWEENEY By: /s/ ROBERT SMOLER, CEO
------------------------- -------------------------
(Authorized Signature) (Authorized Signature)
Lorine Sweeney, Pres. & CEO Robert Smoler, CEO
- ----------------------------- -----------------------------
(Printed Name and Title) (Printed Name and Title)
1
<PAGE> 2
XCARE.NET HOSTING SERVICES AGREEMENT
1 XCare.net Obligations
1.1 XCare.net agrees to provide to Client the Services as described in Schedules
attached hereto pursuant to orders placed by Client and accepted by XCare.net.
1.2 The initial service period for all orders for Services ("Initial Service
Period") shall commence upon activation of the Services and remain in effect for
a period of one year. Client may extend the Services for an additional one year
period under the same pricing schedule as set out in Schedule 1. If Client and
XCare.net fail to agree on the terms to extend the Services past the Initial
Service Period, or the additional one year period the applicable Schedule for
Services shall continue in effect on a month-to-month basis, until terminated by
either Client or XCare.net as provided in Section 4 below.
1.3 The fees for Services are specified in Schedule 1 of this agreement.
XCare.net will issue invoices ("Invoices") to Client for installation fees for
Client's Services and other applicable nonrecurring and recurring fees covering
the initial one month period. On a monthly basis, XCare.net will determine
Client's actual usage which determination shall be subject to audit by Client.
After the initial one month period, XCare.net will issue Invoices on a monthly
basis to Client as specified in attached schedules.
2 Client's Obligations
2.1 Client shall pay XCare.net the amount specified in the Invoices, in U.S.
Dollars, per the payment terms set forth in such invoices. Late payments shall
bear interest at one and one-half percent (1.5%) per month or the maximum rate
permitted by law, whichever is less.
2.2 XCare.net shall not obtain any right, title to and/or interest in content,
including but not limited to text, multimedia images (graphics, audio and
video), software and other data (collectively "Content") provided by Client and
installed by XCare.net or Client on the Server or developed for Client at
Client's expense; however, XCare.net shall retain title to and all rights in all
other intellectual property including, but not limited to, any know-how related
to XCare.net-provided products or services such as the hardware, software or any
other server technology.
2.3 Client acknowledges and agrees that use of the Services is subject to
Client's compliance with the terms defined in XCare.net's Prohibited Uses of
Products and Services Policy, attached hereto as Exhibit A, as amended from time
to time. Violations of any of the terms of such policy shall constitute a breach
hereunder and may result in termination of this Agreement by XCare.net.
2.4 Client is solely responsible for Content, including any subsequent changes
or updates made or authorized by Client. Client warrants and represents that
Content: (i) does not infringe or violate the rights of any third party
including, but not limited to, intellectual property rights (including but not
limited to patents, copyrights, trademarks, trade secrets and rights of
publicity); (ii) is not defamatory or obscene; and (iii) does not violate any
other applicable law. XCare.net reserves the right (but shall have no
obligation) to delete any material installed on a Server in an XCare.net
facility or to disconnect Internet access of a Server which contains Content
which XCare.net believes in good faith breaches any of these warranties. Any
breach of these warranties by Client may result in termination of the Services.
2.5 Client acknowledges and agrees that Client assumes all risk related to the
processing of transactions related to electronic commerce. XCare.net reserves
the right to discontinue the Services to Client if either XCare.net believes in
good faith that Client has violated the foregoing, or that Client's use of the
Services poses a threat to the internal security of the XCare.net network, the
Web hosting facility, other customers, or the Server.
2.6 Upon termination of either this Agreement or any applicable Schedule for
Services, User must relinquish use of the Internet Protocol Addresses ("IP
Addresses") or address blocks assigned to it in connection with the Services.
(Note: Breathnet has full ownership rights before, during and after termination
to the URL www.breathnet.com and all e-mail addresses attached to this URL, such
as [email protected].)
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<PAGE> 3
2.7 All equipment provided by XCare.net in connection with this Agreement shall
remain the property of XCare.net.
3 Warranties and Indemnity
3.1 XCare.net makes no warranties of any kind with respect to Services and
Products provided under this Agreement. XCARE.NET DISCLAIMS ALL
WARRANTIES, EXPRESS AND IMPLIED, INCLUDING THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OTHER THAN THOSE
EXPRESS WRITTEN PERFORMANCE AGREEMENTS MUTUALLY AGREED UPON. In any
instance involving performance or nonperformance of Services and
Products provided hereunder, Client's sole remedy shall be (a) in the
case of Services, refund of a prorata portion of the price paid for
Services which were not provided.
3.1.1 Except as otherwise may be provided in this Agreement, credit for
lost Services will be issued only for periods, calculated in fifteen
(15) minutes increments, in excess of two (2) hours in a calendar
month. One (8) hour services loss will be permitted in each 6 month
service period to allow for potential catastrophic system disruption.
Lost Services or "Downtime" is deemed to have occurred only if service
becomes unusable by Client as a result of failure of XCare.net
facilities, equipment, or personnel used to provide the Services, and
only where the interruption is not the result of (a) negligence or
other conduct of Client or its agents, including a failure or
malfunction resulting from applications or services provided by Client
or its agents, (b) failure or malfunction of any equipment or services
not provided by XCare.net, (c) circumstances beyond the control of
XCare.net, or (d) interruption due to scheduled maintenance,
alteration, or implementation. All claims must be made within 60 days
of the date of such lost Services.
3.2 EXCEPT IN THE EVENT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT
WILL XCARE.NET, IT'S SUBSIDIARIES OR ITS OR THEIR AGENTS, BE LIABLE TO CLIENT
FOR ANY DAMAGES, INCLUDING LOST PROFITS, LOSS OF DATA, OR OTHER SPECIAL,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR ANY OTHER DAMAGES, ARISING OUT
OF OR IN CONNECTION WITH THE PURCHASE, USE OR PERFORMANCE OF THE SERVICES EXCEPT
THAT XCARE.NET AND CLIENT WILL ESTABLISH A PLAN FOR SAFEGUARDING CLIENT'S DATA
AND XCARE.NET WILL BE LIABLE FOR DAMAGES FOR LOST DATA SHOULD THEY NOT FOLLOW
THIS AGREED UPON PLAN. XCare.net will not be liable for any damages Client may
suffer arising out of Client's use, OR inability to use, the Services or related
products. In no event shall XCare.net be liable for unauthorized access to
Client's transmission facilities or Client premise equipment or for unauthorized
access to or alteration, theft or destruction of Client's data files, programs,
procedure or information through accident, fraudulent means or devices, or any
other method except that XCare.net and Client will establish a plan for
safeguarding Client's equipment, data files, and programs and XCare.net will be
liable for damages associated with harm to Client's equipment, data files and
programs should they not follow this agreed upon plan.
3.3 XCare.net's liability for damages to Client for any cause whatsoever,
regardless of form of action, including negligence, shall not exceed an amount
equal to the price of products and Services purchased by Client during the
twelve month period preceding the event which caused the damages or injury;
provided, however, that this limitation shall not apply to damages to Client for
personal injuries or destruction of tangible personal property proximately
caused by the negligence of XCare.net or damages caused by gross negligence or
willful misconduct.
3.4 XCare.net will indemnified and hold Client harmless against any claim or
demand by any third party that any hardware or software provided to Client
hereunder, infringes any United States copyright or trade secret. Except for
damages incurred by XCare.net caused by (a) proprietary rights infringement
claims as provided for above, or (b) damages for personal injuries or
destruction of tangible property proximately caused by XCare.net's negligence or
damages caused by XCare.net's gross negligence or willful misconduct, Client
agrees to indemnify and hold XCare.net harmless against any claim or demand by
any third party due to or arising out of the use by Client of Services and
related products provided hereunder.
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<PAGE> 4
3.5 Client will indemnify and hold XCare.net harmless against any claim or
demand by any third party brought as a result of Client's violation of the
XCare.net Prohibited Uses Policy or any unlawful use of Content provided by
Client or by XCare.net at Client's request.
4. Termination
4.1 Either party may terminate this Agreement by providing the other party with
at least sixty (60) days notice.
4.2 Client may cancel or terminate this Agreement in the event of three (3) or
more "service interruptions" in excess of four (4) hours duration during any
thirty (30) day period, during the term of this Agreement. A "service
interruption" is deemed to have occurred when Sections 2.8 or 2.8.1 (Performance
Guarantee and Xcare.net Average Server Response Times respectively) of the
Professional Services Agreement (Attachment 1) is violated or if service becomes
unusable by Client as a result of failure of XCare.net facilities, equipment, or
personnel used to provide the Services, and only where the interruption is not
the result of (a) negligence or other conduct of Client or its agents, including
a failure or malfunction resulting from applications or services provided by
Client or its agents, (b) failure or malfunction of any equipment or services
not provided by XCare.net, (c) circumstances beyond the control of XCare.net, or
(d) interruption due to scheduled maintenance, alteration, or implementation.
4.3 This Agreement may be terminated by either party in the event of (i) any
material breach of, any of the terms and conditions of this Agreement by the
other party, which default continues in effect after the defaulting party has
been provided with written notice of default and thirty (30) days to cure such
default; (ii) the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to either party of its
debts under any bankruptcy, insolvency, or other similar law now or hereafter in
effect, that authorizes the reorganization or liquidation of such party or its
debt or the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property; (iii) either
party's consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it; or (iv) either party's making a general assignment for the benefit
of creditors; or either party's becoming insolvent; or either party taking any
corporate action to authorize any of the foregoing.
4.4 In the event of termination by Client for any reason other than expiration
of a service order or a service interruption as defined in subsection 4.2,
Client agrees to immediately pay XCare.net as a cancellation fee all monthly
recurring fees specified in the quote provided by XCare.net for such service
order through the date of termination. Upon termination of this Agreement,
Client must relinquish use of the Internet Protocol Addresses ("IP Addresses")
or address blocks assigned to it in connection with the Services. (Note:
Breathnet has full ownership rights before, during and after termination to the
URL www.breathnet.com and all e-mail addresses attached to this URL, such as
[email protected].)
5. General
5.1 Force Majeure. In the event that either party is unable to perform any of
its obligations under this Agreement or to enjoy any of its benefits because of
any event beyond the control of the affected party including, but not limited
to, natural disaster, acts of God, actions or decrees of governmental bodies or
failure of communication lines (a "Force Majeure Event"), the party who has been
so affected shall promptly give written notice to the other party and shall use
its best efforts to resume performance. Upon receipt of such notice, all
obligations under this Agreement shall be immediately suspended for the duration
of such Force Majeure Event.
5.2 Assignment. Neither party shall have the right to assign this Agreement
without the prior written consent of the other party; provided, that either
party shall have the right to assign this Agreement to any person or entity that
acquires or succeeds to all or substantially all of such party's business or
assets upon written notice to the other party.
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<PAGE> 5
5.3 Severability. In the event any one or more of the provisions of this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
the remaining provisions of this Agreement shall be unimpaired and the parties
will substitute a new enforceable provision of like economic intent and effect.
5.4 Waiver. Waiver of any breach or failure to enforce any term of this
Agreement shall not be deemed a waiver of any breach or right to enforce which
may thereafter occur. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
5.5 Notices. All notices, demands, requests or other communications required or
permitted under this Agreement will be deemed given when (i) delivered
personally; (ii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iii) one (1) day after
deposit with a commercial overnight carrier, with written verification of
receipt.
5.6 Governing Law. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes thereto, shall be governed by and construed
in accordance with the laws of the State of New York without reference to
conflict of law principles.
5.7 Mediation. Any Dispute that the Parties are unable to resolve through
informal discussions or negotiations will be submitted to non-binding mediation,
which will be held in New York, New York. The Parties will mutually determine
who the mediator will be from a list of mediators obtained from the AAA office
located in New York, New York. If the Parties are unable to agree on the
mediator, the mediator will be selected by the AAA.
5.8 Arbitration. Any Dispute that the Parties are unable to resolve through
mediation pursuant to Section 10.12 will be submitted to arbitration in
accordance with the following procedures:
5.8.1. Demand for Arbitration; Location. Either Party may demand
arbitration by giving the other Party written notice to such
effect, which notice will describe, in reasonable detail, the
facts and legal grounds forming the basis for the filing
Party's request for relief and will include a statement of the
total amount of damages claimed, if any, and any other remedy
sought by that Party. The arbitration will be held before one
neutral arbitrator in New York, New York.
5.8.2. Identification of Arbitrator. Within thirty (30) calendar days
after the other Party's receipt of such demand, the Parties
will mutually agree upon an arbitrator. If the parties are
unable to agree on the arbitrator within that time period, the
arbitrator will be selected by the AAA. The arbitrator will
have a background in, and knowledge of, the information
technology services. If a person with such industry experience
is not available, the arbitrator will be chosen from the large
and complex case panel or, if an appropriate person is not
available from such panel, the retired federal judges pool.
5.8.3. Conduct of Arbitration. The arbitration will be governed by
the Commercial Arbitration Rules of the AAA, except as
expressly provided in this Section 10.13. However, the
arbitration will be administered by an organization mutually
agreed to in writing by the Parties. If the Parties are unable
to agree upon the organization to administer the arbitration,
it will be administered by the AAA under its procedures for
large and complex cases. Pending the arbitrator's
determination of the merits of the Dispute, either Party may
apply to any court of competent jurisdiction to seek
injunctive or other extraordinary relief.
5.8.4. Scope of Discovery. Discovery will be limited to the request
for and production of documents, depositions and
interrogatories. Interrogatories will be allowed only as
follows: a Party may request the other Party to identify by
name, last known address and telephone number (i) all persons
having knowledge of facts relevant to the Dispute and a brief
description of that person's knowledge, (ii) any experts who
may be called as an expert witness, the subject matter about
which the expert is expected to testify, the mental
impressions and opinions held by the expert and the facts
known by the expert (regardless of when the factual
information was acquired) which relate to or
5
<PAGE> 6
form the basis for the mental impressions and opinions held by
the expert and (iii) any experts who have been used for
consultation, but who are not expected to be called as an
expert witness, if such consulting expert's opinions or
impressions have been reviewed by an expert witness. All
discovery will be guided by the Federal Rules of Civil
Procedure. All issues concerning discovery upon which the
Parties cannot agree will be submitted to the arbitrator for
determination.
5.8.5. Authority of Arbitrator. In rendering an award, the arbitrator
will determine the rights and obligations of the Parties
according to the substantive and procedural laws of the State
of New York. The arbitrator will not have authority to award
damages in excess of the amount or other than the types
allowed by Section 5.2, except in the case of gross negligence
or willful misconduct, and may not, in any event, make any
ruling, finding or award that does not conform to the terms
and conditions of this Agreement, except in the case of gross
negligence or willful misconduct.
5.8.6. Joinder of Parties. Each of Vendor and Customer agree that it
will use commercially reasonable efforts to join (and will
allow the other Party to join) any Third Party that the
Parties have agreed is indispensable to the arbitration. If
any such Third Party does not agree to be joined, the
arbitration will proceed nonetheless.
5.8.7. Award. The decision of, and award rendered by, the arbitrator
will be final and binding on the Parties. Upon the request of
a Party, the arbitrator's award will include written finding
of fact and conclusions of law. Judgement on the award may be
entered in and enforced by any court of competent
jurisdiction. Each Party will bear its own costs and expenses
(including filing fees) with respect to the arbitration,
including one-half of the fees and expenses of the arbitrator.
5.8.8. Exclusive Remedy. Other than those matters involving
injunctive or other extraordinary relief or any action
necessary to enforce the award of the arbitrator, the Parties
agree that the provisions of this Article 10 are a complete
defense to any suit, action or other proceeding instituted in
any court or before any administrative tribunal with respect
to any Dispute or the provision of the Services by Vendor.
Nothing in this Article 10 prevents the Parties from
exercising their rights to terminate this Agreement in
accordance with Article 8.
5.9 Jurisdiction. All disputes arising out of or relating to this Agreement
shall be submitted to the non-exclusive jurisdiction of the state and
federal courts encompassing New York, New York, and each party
irrevocably consents to such personal jurisdiction and waives all
objections thereto.
5.10 Headings. Section headings contained in this Agreement are inserted for
convenience or reference only, shall not be deemed to be a part of this
Agreement for any other purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
5.11 Independent Contractors. The relationship of the parties hereunder shall be
that of independent contractors. Nothing herein shall be construed to constitute
a partnership between or joint venture of the parties, nor shall either party be
deemed the agent of the other or have the right to bind the other in any way
without the prior written consent of the other.
5.12 Execution in Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which,
when taken together, shall constitute one and the same instrument.
5.13 Publicity. Client understands that Internet use, and related products and
Services provided under this Agreement, may require registrations and related
administrative reports which are public in nature. In addition, Client and
XCare.net agree that either party may include its name and a description of the
provided services as a reference or in client/vendor portfolios.
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EXHIBIT A
XCARE.NET PROHIBITED USES POLICY FOR
XCARE.NET HOSTING SERVICES
The following actions are defined by XCare.net as "system abuse" and are
strictly prohibited under the XCare.net Hosting Services Agreement. The examples
named in this list are not exhaustive and are provided solely for guidance to
Clients using the XCare.net Hosting Services. If any Client is unsure of whether
a contemplated use or action is permitted, it is Client's responsibility to
determine the permitted use by contacting XCare.net via electronic mail at
[email protected]. The following activities are expressly prohibited and could
result in termination of a Client's XCare.net Hosting Services Agreement
GENERAL
o Resale of XCare.net's products and services, unless
specifically permitted and documented in a separate written
agreement or the initial Client contract.
o Using the facilities and capabilities of XCare.net or its
services to conduct any illegal activity or other activity
that infringes the rights of others.
o Deceptive on-line marketing practices. The United States
Federal Trade Commission has issued informative guidelines for
proper on-line marketing schemes. For more information about
the FTC guidelines review the Deception Policy Statement from
the FTC.
o Violations of intellectual property -- as legally protected by
copyrights and licenses. This includes, but is not limited to,
the installation or distribution of illegal, "pirated", or
other software products that are not appropriately licensed by
Client.
o Violations of privacy.
SYSTEM AND NETWORK
o Introduction of malicious programs into the network or Server
(e.g. viruses, worms, Trojan horses, etc.).
o Attempted or successful security breaches or disruption of
Internet communication. Security breaches include, but are not
limited to, accessing data of which Client is not an intended
recipient or logging into a Server or account that Client is
not expressly authorized to access.
o Client may not execute any form of network monitoring (e.g.
packet sniffer) which will intercept data not intended for
Client Server.
o Attempts to circumvent Client authentication or security of
any host, network, or account ("cracking").
o Attempts to interfere with or deny service to any user or any
host (e.g. Denial of Service Attacks).
o Use of any program/script/command, or sending messages of any
kind, designed to interfere with a third party Clients
terminal session, via any means, locally or via the Internet.
BILLING
o Furnishing false or incorrect data on the signup form, hosting
agreement, or online hosting order application.
o Attempts to circumvent or alter the processes or procedures to
measure time, bandwidth utilization, or other methods to
document "use" of XCare.net's products and services.
MAIL
o Sending unsolicited mail messages, including the sending of
"junk mail" or other advertising material to individuals who
did not specifically request such material (e.g. "spamming").
o Harassment, whether through language, frequency, or size of
messages.
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o Forging of mail header information to a third party.
o Using the XCare.net or Client account to collect replies to
messages sent from another provider, which violate these rules
or those of the other provider.
o Creating or forwarding "chain letters" or other "pyramid
schemes" of any type.
USENET NEWSGROUPS
o Posting the same or similar message to large numbers of Usenet
newsgroups.
o Posting chain letters of any type.
o Posting encoded binary files to newsgroups not specifically
named for that purpose.
o Cancellation or superseding of posted messages other than your
own.
o Forging of header information.
o Solicitations of mail for any other e-mail address other than
that of the poster's account or service, with intent to harass
or to collect replies.
IRC (INTERNET RELAY CHAT)
o Use of IRC scripts or programs that will interfere with or
deny service to other clients on any Server or host.
o Running or attempting to run any IRC robot or Server on
equipment other than the equipment provided by XCare.net to
the Client.
ADMINISTRATOR ACCOUNTS
The following section details XCare.net's policy regarding
administrator privileges with the products and services offered by
XCare.net's Hosting Services Group. Clients utilizing XCare.net Hosting
Services products and services, whether the Server is provided by
XCare.net or is provided by the Client are subject to the following
list of restrictions. The items in this list are not exhaustive and are
provided solely for guidance to Clients using the XCare.net Hosting
Services. If any Client is unsure of whether a contemplated use or
action is permitted it is Client's responsibility to determine the
permitted use by contacting XCare.net via electronic mail at
[email protected].
o Client may not change the IP address or name of the Server.
o Client may not provide or share administrator privileges with
individuals who have not reviewed and agreed to the terms of
the XCare.net Hosting Services Agreement and the XCare.net
Prohibited uses Policy for XCare.net Hosting Services.
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SCHEDULE 1
HOSTING SERVICES DESCRIPTION AND PRICE SCHEDULE
In accordance with this agreement, XCare.net will provide the following
services, resources and service features:
SERVER CONFIGURATION
-----------------------------------------------------------------------
Hardware
XCare.net Hosting Provided Software
DATA CENTER
-----------------------------------------------------------------------
Xcare.net Data Center Operations
BANDWIDTH & NETWORKING
-----------------------------------------------------------------------
An Intranet Connecting All Physician and Breathnet Offices To The Main
Server and the Disaster Recovery Site.
BACKUP
-----------------------------------------------------------------------
Standard Data Services Back-up
SERVICES
-----------------------------------------------------------------------
System Maintenance, Content Updates on the Server and Second Tier
Support Services On a 24 by 7 Basis
<TABLE>
<CAPTION>
PRICING SETUP FEE MONTHLY FEE
-------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL PRICING AS CONFIGURED ABOVE: *MINIMUM N/A $ [*]
Transaction Fee - $ / transaction** $ N/A $ N/A
Each additional 1Mbps of average bandwidth utilization N/A $ N/A
Each additional 10GB data backup N/A $ N/A
</TABLE>
*Minimum monthly hosting fee will apply regardless of
transaction volume.
** The minimum fee will be charged for two months; at which
point the definition of a transaction will be set and the
transaction fee going forward will be established. Transaction
fees will be re-evaluated after six months of usage.
[*] This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
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SCHEDULE 2
MANAGED SERVICES OPTION
As the Managed Services portion of this Hosting agreement, XCare.net will
provide server administration and management services that include but are not
necessarily limited to:
o Performance/resource monitoring and proactive problem
resolution
o Daily systems administration tasks
o Applying operating system enhancements and security patches
o Adding user accounts
o Configuring DSN's and database connections
o Managing DNS services
o Adding/configuring FTP services
o Installing security certification keys
o Minor software revision changes & application patches
o Conducting automatic log rotation
o Checking disk space
o Facilitating restore requests
In addition, XCare.net Hosting will provide 24x7 1st level response for
recovering application related problems that have caused a complete outage to
the Web Services. However, these issues may need to be escalated to the
appropriate Application Development contact provided by the client for
resolution.
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<PAGE> 1
DEVELOPMENT SERVICES AGREEMENT
This Professional Services Agreement (the "Agreement") is entered into
as of January 19, 2000 by and between Xcare.net, a Delaware corporation with
offices at 6400 S. Fiddler's Green Circle, Englewood, CO 80111, ("Xcare.net"),
and the CHEC (Community Health Electronic Clearinghouse) with offices at 2505 N.
Highway 360, Suite 600, Grand Prairie, TX 75050 ("Client").
This Agreement covers the purchase and license of consulting,
development and other services from Xcare.net, pursuant to orders placed by
Client and accepted by Xcare.net after the Effective Date.
This Agreement includes the following attachments, which are
incorporated herein by this reference:
Attachment 1 Xcare.net Development Services
Attachment 2 Contract Fee Structure and Agreements
Any notice required or permitted under this Agreement will be in
writing and delivered to the address set forth below, or to such other notice
address as the other party has provided by written notice.
THIS AGREEMENT, INCLUDING THE ATTACHMENTS LISTED ABOVE, CONSTITUTES THE
COMPLETE AND EXCLUSIVE UNDERSTANDING OF THE PARTIES WITH REFERENCE TO THE
SUBJECT MATTER HEREOF, AND SUPERSEDES ALL PRIOR SALES PROPOSALS, NEGOTIATIONS,
AGREEMENTS AND OTHER REPRESENTATIONS OR COMMUNICATIONS, WHETHER ORAL OR WRITTEN.
IF THERE IS ANY CONFLICT BETWEEN THE TERMS AND CONDITIONS OF CLIENT'S PURCHASE
ORDER (OR ANY OTHER PURCHASE OR SALES DOCUMENT) AND THE TERMS AND CONDITIONS OF
THIS AGREEMENT, THIS AGREEMENT SHALL CONTROL. THIS AGREEMENT MAY BE MODIFIED,
REPLACED OR RESCINDED ONLY IN WRITING, AND SIGNED BY A DULY AUTHORIZED
REPRESENTATIVE OF EACH PARTY.
AGREED:
Xcare.net Client:
------------------------
Community Health
- ------------------------------------ -------------------------------
Electronic Clearinghouse
- ------------------------------------ -------------------------------
- ------------------------------------ -------------------------------
By: /s/ THOMAS M. PIANHO By: /s/ HARRY D SPRING
--------------------------------- -----------------------------
(Authorized Signature) (Authorized Signature)
Thomas M. Pianho, Sr. VP Sales Harry D Spring CEO
- ------------------------------------ -------------------------------
(Printed Name and Title) (Printed Name and Title)
1-19-2000 19/January/2000
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ATTACHMENT 1
XCARE.NET DEVELOPMENT SERVICES
1. DEFINITIONS
1.1. "Content" shall mean marketing collateral, data, text, audio
files, video files, graphics and other materials provided by Client or developed
hereunder for use with the Client Web Site, but excluding the Xcare.net
Software.
1.2. "Development Services" shall mean design, development, and set-up
services as necessary to modify existing Xcare.net technology, trade secrets
and know-how to produce the Xcare.net Software and other elements of the Client
Web Site, and/or any other consulting services rendered hereunder as identified
in the appropriate schedules ("Schedule(s)") attached hereto.
1.3. "Xcare.net Software" shall mean all computer program code and
other results and proceeds of Xcare.net's services hereunder (other than
Content) that are delivered by Xcare.net to Client pursuant to this Agreement.
Such Xcare.net Software shall be provided in object code form unless the parties
mutually agree in writing to delivery of source code.
1.4. "Client Web Site(s)" shall mean the so-called "web page" site or
sites on the World Wide Web, for the public Internet or for corporate intranets
or extranets, to be developed or serviced by Xcare.net hereunder, as identified
in the appropriate Schedule(s).
2. SERVICES
2.1. Development Services. Xcare.net shall render Development Services
in accordance with the requirements set forth in Schedules attached hereto. Each
Schedule for new services shall be successively numbered (e.g., 1, 2, etc.).
Each schedule shall be executed by the parties and shall be subject to the terms
and conditions of this Agreement. Xcare.net shall provide qualified and trained
personnel to render such services and shall use reasonable commercial efforts to
meet the delivery schedule set forth in the applicable Schedules. Any additions,
deletions or other changes to a Schedule shall be mutually agreed to in writing
in advance by both parties and shall be memorialized in a revised Schedule
pursuant to the procedure set forth in Section 2.6 below for Change Orders. All
services shall be performed at Xcare.net's offices unless otherwise agreed by
the parties. In the event that services are performed at Client's location,
Client shall provide Xcare.net at no charge with all necessary facilities and
equipment, including without limitation, computer time on Client's computers and
office space, sufficient to render the services contemplated hereunder. Client
shall deliver to Xcare.net all Content selected by Client for incorporation into
any Client Web Site in digitized format in accordance with the delivery schedule
set forth in the applicable Schedule(s). In the event that Client fails to
deliver the Content in accordance with the delivery schedule, the development
schedule shall be extended by the number of days that delivery of the Content
was delayed, unless Xcare.net notifies Client that this extension will not
rectify Xcare.net's scheduling interruption resulting from Client's delay and
such delay may also result in additional charges to Client, in which case the
parties shall mutually agree upon a new delivery schedule and fees with respect
to the rendition of the Development Services.
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2.2. Acceptance of Deliverables. Within fifteen (15) days after the
delivery to Client of any deliverable pursuant to any Schedule, Client shall
provide Xcare.net with written notice of any failure of any deliverable to
materially conform to the functional specifications set forth in the applicable
Schedule. Xcare.net and Client shall review the objections, and Xcare.net will
use commercially reasonable efforts to correct any material non-conformities
with the functional specifications and provide Client with a revised deliverable
within fifteen (15) days. Client shall have deemed to have accepted the
deliverable if Xcare.net does not receive written notice of Client's objections
within said fifteen (15) day period.
2.3. Domain Name Registration Services. If domain name registration
services are included in the Schedule, Xcare.net shall use commercially
reasonable efforts to assist Client in registering an Internet domain name
selected by Client. Client will be solely responsible for all out-of-pocket
costs and all legal clearances regarding name selection and registration.
2.4. Maintenance Services. If Client desires to purchase maintenance
services from Xcare.net for the Client Web Site, the parties shall execute the
then current Xcare.net Maintenance Services Agreement and Xcare.net shall render
maintenance services pursuant to the terms and conditions of such agreement.
2.5. Hosting Services. If Client desires to purchase hosting services
from Xcare.net for the Client Web Site, the parties shall execute the then
current Xcare.net Hosting Services Agreement, and Xcare.net shall render hosting
services pursuant to the terms and conditions of such agreement.
2.6. Change Orders. If Client desires to make changes to an existing
Schedule, the parties shall mutually agree upon an additional or revised
Schedule for each new Change Order. Each such Schedule shall be successively
numbered (e.g., 1.A, 1.B, etc.) and shall be executed by the parties. Any
revised Schedule(s) shall be subject to the terms and conditions of this
Agreement. Further, Xcare and Client agree to allow reasonable, non-material
modifications to the contract if both Xcare and Client agree to such change.
3. OWNERSHIP AND LICENSE RIGHTS
3.1. Property Rights and Ownership. The Client Web Site(s) and all
other results and proceeds of Xcare.net's services hereunder, shall consist of,
and shall operate in conjunction with, multiple elements of intellectual
property, including without limitation the Xcare.net Software and the Client
Content. The parties' respective rights to such elements shall be as set forth
below. For purposes of this Agreement, the term "ownership" shall refer to
ownership of all intellectual property rights including, but not limited to, all
patent, copyright, trade secret and trademark rights, as applicable, with
respect to the subject intellectual property.
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<PAGE> 4
<TABLE>
<CAPTION>
- --------------------------------------- ----------------------------------
Intellectual Property Elements Ownership/Rights
- --------------------------------------- ----------------------------------
<S> <C>
Client Content, including all Client has sole ownership.
Client Content that is modified by
Xcare.net ("Modified Content") and
HTML files that contain Client
Content, and modifications to
Content as a result of Client's
usage of self-authoring tools.
- --------------------------------------- ----------------------------------
Content created for Client by Client has sole ownership.
Xcare.net and accepted and paid for
by Client, as well as commissioned
Content authored by third parties
specifically for use in connection
with this Agreement and paid for by
Client (e.g., original
illustrations or graphics).
- --------------------------------------- ----------------------------------
Domain name for Client Web Site. Client has sole ownership.
- --------------------------------------- ----------------------------------
Server usage report data/statistics Client has sole ownership of
generated by the Xcare.net data/statistics, and Xcare.net has
Software in form and substance as a license pursuant to Section 3.3
set forth in the applicable Schedule below.
or as mutually agreed by the parties.
- --------------------------------------- ----------------------------------
Commercially available third-party Third-parties have ownership, and
software which is incorporated into Client shall be informed of all
the Xcare.net Software. third-party software that Client
may need to license at Client's
own expense.
- --------------------------------------- ----------------------------------
Xcare.net Software developed Xcare.net has sole ownership of
by or for Xcare.net in connection such Xcare.net Software. Client
with this Agreement for Client. shall be granted a license to use
the Xcare.net Software as set
forth in Section 3.2.
- --------------------------------------- ----------------------------------
Xcare.net supplied material Xcare.net has sole ownership
developed generally to support of such developed material. Client
Xcare.net products and/or service shall be granted a license to use
offerings (e.g. httpd Xcare.net Software as set forth in
configuration). Section 3.2 below.
- --------------------------------------- ----------------------------------
</TABLE>
3.2. License to Client. Xcare.net grants Client a non-exclusive,
non-transferable license to use the Xcare.net Software on a single computer in
object code version only to operate and display the Client Web Site in order for
end users to access the Client Web Site. If the Xcare.net Software is not
developed for use on a Client Web Site, then the foregoing license shall
constitute a non-exclusive, non-transferable license to use the Xcare.net
Software on a single computer in object code version only for Client's internal
business needs. Client may transfer the Xcare.net Software to a different
computer so long as the Xcare.net Software is not retained on the prior computer
on which it was initially installed other than as a permitted backup copy.
Client may grant a sublicense to a third party that Client engages to host the
Client Web Site; provided, that such third party agrees in writing to be bound
by the license and confidentiality restrictions set forth in this Agreement.
Client is prohibited from duplicating and/or distributing any Xcare.net Software
without the prior written consent of Xcare.net; provided, however that Client
may copy the Xcare.net Software only as needed for reasonable ordinary backup or
disaster recovery procedures. Client may use
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<PAGE> 5
the backup copies only if the installed copy is lost or destroyed or the
hardware on which the installed copy is installed becomes inoperable, provided
that the use of said backup copies is discontinued immediately when the original
hardware becomes operable.
3.3. License to Xcare.net. Client grants Xcare.net a non-exclusive
license (i) to use, copy, and modify the Content in connection with Xcare.net's
performance of the Development Services, (ii) to use, copy, modify, distribute
and display server usage data and statistics generated by the Xcare.net
Software.
3.4. Supporting Documents. Each party agrees to execute any additional
documents deemed reasonably necessary to effect and evidence the other party's
rights with respect to the intellectual property elements set forth above.
3.5. No Reverse Engineering. All rights not expressly granted hereunder
are reserved by Xcare.net. Without limiting the foregoing, Client may not
reverse engineer, reverse assemble, decompile or otherwise attempt to derive the
source code from the Xcare.net Software.
3.6. Proprietary Notices. All copies of the Xcare.net Software and
other Xcare.net supplied materials used by Client shall contain copyright and
other proprietary notices in the same manner in which Xcare.net incorporates
such notices in the Xcare.net Software or in any other manner requested by
Xcare.net. Client agrees not to remove, obscure or obliterate any copyright
notice, trademark or other proprietary rights notices placed by Xcare.net on or
in the Xcare.net Software.
4. PAYMENT
4.1. Development Services. In consideration for the performance of the
Development Services, Client shall pay to Xcare.net the amounts set forth in the
applicable Schedule, on the payment dates set forth in such Schedule. In the
event that Xcare.net renders services at Client's location, Client shall pay the
reasonable travel, living and related expenses for Xcare.net personnel rendering
services at Client's location. All services hereunder shall be rendered on a
per-project basis; provided, however, that in the event that the parties agree
that any services hereunder will be rendered on a time and materials basis, all
work will be billed at Xcare.net's standard hourly rates, which may be
revised from time to time by Xcare.net, in its sole discretion, upon written
notice to Client. For time and materials billing, amounts set forth in the
applicable Schedule represent an estimate of the hours required to complete the
work outlined in such Schedule; in the event that actual hours incurred to
complete the work exceed those included in the estimate, Xcare.net will notify
Client, and additional hours will be billed at Xcare.net's standard hourly
rates.
4.2. Maintenance Services. If the parties have entered into a Xcare.net
Maintenance Services Agreement, Client shall pay Xcare.net the amounts set forth
in said Maintenance Services Agreement.
4.3. Hosting Services. If the parties have entered into a Xcare.net
Hosting Services Agreement, Client shall pay Xcare.net the amounts set forth in
said Hosting Services Agreement.
4.4. Taxes. In addition to the fees due as specified above, Client
shall pay any and all federal, state and local sales, use, value added, excise,
duty and any other taxes of any nature assessed upon or with respect to the
license granted hereunder, arising from this Agreement, except that taxes on
Xcare.net's income shall be the sole responsibility of Xcare.net.
4.5. Payments. All payments made pursuant to this Agreement shall be
made in U.S. Dollars and
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<PAGE> 6
are due thirty (30) days from the date of invoice. Late payments shall bear
interest at one and one-half percent (1.5%) per month or the maximum rate
permitted by law, whichever is less.
5. LIMITED WARRANTY
5.1. Software Warranty. Subject to the limitations set forth in this
Agreement, Xcare.net warrants only to Client that the Xcare.net Software
furnished hereunder when properly installed, properly used and unmodified by
Client, will substantially conform to the functional specifications set forth in
the applicable Schedule. Xcare.net's warranty shall extend for a period of
ninety (90) days from the date that the final deliverables specified in each
Schedule are delivered to Client ("Warranty Period"). Xcare.net's sole
responsibility under this Section 5.1 shall be to use reasonable commercial
efforts to promptly correct material errors, or at Xcare.net's option, to refund
Client's fees paid for the Xcare.net Software after deinstallation and return
thereof. All warranty claims not made in writing or not received by Xcare.net
within the Warranty Period shall be deemed waived. Xcare.net's warranty
obligations are solely for the benefit of Client, who has no authority to extend
or transfer this warranty to any other person or entity.
5.2. XCARE.NET DOES NOT WARRANT THAT THE USE OF THE XCARE.NET SOFTWARE
WILL BE UNINTERRUPTED OR ERROR FREE OR THAT THE SPECIFICATIONS WILL MEET
CLIENT'S REQUIREMENTS. EXCEPT FOR THE EXPRESS WARRANTIES STATED ABOVE, XCARE.NET
DOES NOT MAKE ANY WARRANTY AS TO THE XCARE.NET SOFTWARE OR THE SERVICES PROVIDED
HEREUNDER OR THE RESULTS TO BE OBTAINED FROM USE OF THE XCARE.NET SOFTWARE.
EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH ABOVE, THE XCARE.NET SOFTWARE IS
USED AND THE SERVICES ARE PROVIDED ON AN "AS-IS" BASIS WITHOUT WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
INTERNET OR USE OF INFORMATION IN CONNECTION WITH THE SOFTWARE.
6. INTELLECTUAL PROPERTY INDEMNIFICATION
6.1. Xcare.net.
6.1.1. Indemnification. Xcare.net, at its own cost and expense,
shall defend Client and its officers and directors, against a claim that the
Xcare.net Software infringes a third-party United States copyright or trade
secret, and shall pay any settlements entered into or damages awarded against
Client, or its officers and directors, to the extent related to such claim,
provided that (i) Client notifies Xcare.net promptly in writing of the claim;
(ii) Xcare.net has the sole control of the defense and all related settlement
negotiations; and (iii) Client provides Xcare.net with all reasonably necessary
assistance, information, and authority to perform the foregoing at Xcare.net's
expense.
6.1.2. Xcare.net shall have no liability for any claim of
infringement based on (i) use by Client of other than the current update of the
Xcare.net Software if the infringement would have been avoided by uses of the
current update; (ii) modifications, adaptations or changes to the Xcare.net
Software not made by Xcare.net; (iii) the combination or use of the materials
furnished hereunder with materials not furnished by Xcare.net if such
infringement would have been avoided by use of the Xcare.net materials alone; or
(iv) use or incorporation of Content or Modified Content. In the event the
Xcare.net Software is held to, or Xcare.net believes is likely to be held to,
infringe the intellectual property rights of a third party, Xcare.net shall have
the right at its sole option and expense to (i) substitute or modify the
Xcare.net Software
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<PAGE> 7
so that it is non-infringing and qualitatively and functionally equivalent to
the Xcare.net Software; (ii) obtain for Client a license to continue using the
Xcare.net Software; or if neither (i) nor (ii) is commercially reasonable,
Xcare.net shall have the right to terminate this Agreement immediately upon
written notice to Client, and Xcare.net shall make payment to Client of an
amount equal to the fees paid for the Xcare.net Software, pro-rated over a three
(3) year period commencing on the Effective Date. This Section 6.1 sets forth
Client's sole and exclusive remedy and Xcare.net's sole liability for
intellectual property infringement by Xcare.net.
6.2. Client.
6.2.1. Client hereby represents and warrants to Xcare.net that
(i) Client has secured all necessary consents, permissions, clearances,
authorizations and waivers for the use of Content or Modified Content, including
without limitation, all text, pictures, audio, video, logos and copy contained
in all Content or Modified Content; (ii) the use of Content as contemplated
herein shall not infringe the copyright, trademark or other intellectual
property rights of any party, or constitute defamation, invasion of privacy,
or the violation of any right of publicity or any other right of any party;
and (iii) Client has complied and shall comply with all legislation, rules and
regulations regarding Content.
6.2.2. Client shall indemnify and hold harmless Xcare.net, its
directors, officers, parent company, and affiliates, from any and all liability,
costs and expenses (including attorney's fees) arising in connection with any
third party claim or action brought against Xcare.net, or any of its directors,
officers, parent company, and affiliates, relating to Content or Modified
Content, provided (i) Xcare.net notifies Client promptly in writing of such
claim, (ii) Client has the sole control of the defense and all related
settlement negotiations, and (iii) Xcare.net provides Client with all reasonably
necessary assistance, information and authority to perform the foregoing at
Client's expense.
7. LIMITATIONS ON LIABILITY
THE MAXIMUM LIABILITY OF XCARE.NET, ITS DIRECTORS, OFFICERS, PARENT
COMPANY, AND, AFFILIATES, TO CLIENT FOR DAMAGES RELATING TO XCARE.NET'S FAILURE
TO PERFORM SERVICES HEREUNDER SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE TOTAL
FEES PAID BY CLIENT TO XCARE.NET WITH RESPECT TO SUCH SERVICES. NOTWITHSTANDING
THE FOREGOING, THE MAXIMUM LIABILITY OF XCARE.NET, ITS DIRECTORS, OFFICERS,
PARENT COMPANY, AND AFFILIATES, TO CLIENT FOR DAMAGES FOR ANY AND ALL OTHER
CAUSES WHATSOEVER, AND CLIENT'S MAXIMUM REMEDY, REGARDLESS OF THE FORM OF
ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL BE LIMITED TO AN AMOUNT
EQUAL TO THE TOTAL FEES PAID BY CLIENT TO XCARE.NET HEREUNDER. IN NO EVENT SHALL
XCARE.NET, ITS DIRECTORS, OFFICERS, PARENT COMPANY, AND AFFILIATES, LICENSORS,
AND SUPPLIERS, BE LIABLE FOR ANY LOST DATA OR CONTENT, LOST PROFITS, BUSINESS
INTERRUPTION OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY
OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THE SOFTWARE OR THE SERVICES
PROVIDED HEREUNDER, EVEN IF XCARE.NET HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.
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8. TERM AND TERMINATION
8.1. Term. Subject to this Section 8, the term of this Agreement shall
commence on the Effective Date and continue until terminated by either party
pursuant to Section 8.2 or 8.3 below.
8.2. Termination for Cause. This Agreement may be terminated by either
party in the event of (i) any material default in, or material breach of, any of
the terms and conditions of this Agreement by the other party, which default
continues in effect after the defaulting party has been provided with written
notice of default and thirty (30) days to cure such default; (ii) the
commencement of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to either party of its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in effect,
that authorizes the reorganization or liquidation of such party or its debt or
the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property; (iii) either party's
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it;
or (iv) either party's making a general assignment for the benefit of creditors;
or either party's becoming insolvent; or either party taking any corporate
action to authorize any of the foregoing.
8.3. Termination for Convenience. This Agreement may be terminated by
either party upon ninety (90) days' advance written notice.
8.4. Effect of Termination. If this Agreement is terminated by
Xcare.net under Section 8.2, while Xcare.net is performing any Development
Services for Client hereunder, Client shall immediately pay Xcare.net the total
fees associated with such incomplete project, as well as all amounts due and
owing for any projects already completed by Xcare.net hereunder or for any
third-party products or services purchased by Xcare.net in Client's behalf. If
the Agreement is terminated under Section 8.3 while Xcare.net is performing any
Development Services or other services for Client hereunder, Client shall pay
Xcare.net all fees due and owing up to the effective date of such termination,
not to exceed the monthly minimum payment for services performed to that date.
The foregoing shall be without limitation to Xcare.net's rights and remedies
under this Agreement.
8.5. Survival. Sections 3, 5, 7, 8, 9 and 10 shall survive any
termination or expiration of this Agreement; provided, however, that if this
Agreement is terminated by Xcare.net pursuant to Section 8.2 above, then
Section 3.2 shall not survive.
9. CONFIDENTIALITY
9.1. Confidential Information. Each party acknowledges that, in
connection with the performance of this Agreement, it may receive certain
confidential or proprietary technical and business information and materials of
the other party ("Confidential Information").
9.2. Confidentiality. Each party hereby agrees: (i) to hold and
maintain in strict confidence all Confidential Information of the other party
and not to disclose it to any third party; and (ii) not to use any Confidential
Information of the other party except as permitted by this Agreement or as may
be necessary to perform its obligations under this Agreement. Each party will
use at least the same degree of care to protect the other party's Confidential
Information as it uses to protect its own Confidential Information of like
importance, and in no event shall such degree of care be less than reasonable
care.
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9.3. Exceptions. Notwithstanding the foregoing, the parties agree that
Confidential Information will not include any information that: (i) is or
becomes generally known or is or becomes part of the public domain through no
fault of the other party, (ii) the first party authorizes to be disclosed; (iii)
is rightfully received by the other party from a third party without restriction
on disclosure and without breach of this Agreement; or (iv) is known to the
other party on the Effective Date from a source other than the first party, and
not subject to a confidentiality obligation.
9.4. Injunctive Relief. Each party acknowledges that any breach of the
provisions of this Section 9 may cause irreparable harm and significant injury
to an extent that may be extremely difficult to ascertain. Accordingly, each
party agrees that the other party will have, in addition to any other rights or
remedies available to it at law or in equity, the right to seek injunctive
relief to enjoin any breach or violation of this Section 9.
10. GENERAL PROVISIONS
10.1. Force Majeure. In the event that either party is unable to
perform any of its obligations under this Agreement or to enjoy any of its
benefits because of any event beyond the control of the affected party
including, but not limited to, natural disaster, acts of God, actions or decrees
of governmental bodies or failure of communication lines (a "Force Majeure
Event"), the party who has been so affected shall promptly give written notice
to the other party and shall use its best efforts to resume performance. Upon
receipt of such notice, all obligations under this Agreement shall be
immediately suspended for the duration of such Force Majeure Event.
10.2. Notice. All notices, demands, requests or other communications
required or permitted under this Agreement will be deemed given when (i)
delivered personally; (ii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iii) one (1) day
after deposit with a commercial overnight carrier, with written verification of
receipt.
10.3. Waiver. Waiver of any breach or failure to enforce any term of
this Agreement shall not be deemed a waiver of any breach or right to enforce
which may thereafter occur. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom enforcement of such
waiver is sought and then only to the extent expressly specified therein.
10.4. Severability. In the event any one or more of the provisions of
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable, the remaining provisions of this Agreement shall be unimpaired
and the parties will substitute a new enforceable provision of like economic
intent and effect.
10.5. Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes thereto, shall be governed by and
construed in accordance with the laws of the State of [Colorado] without
reference to conflict of law principles.
10.6. Assignment. Neither party shall have the right to assign this
Agreement without the prior written consent of the other party; provided, that
either party shall have the right to assign this Agreement to any person or
entity that acquires or succeeds to all or substantially all of such party's
business or assets upon written notice to the other party.
10.7. Publicity. Within a time frame mutually agreed upon by the
parties, the parties shall mutually agree on a joint press release announcing
the existence of this Agreement. Neither party will use
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<PAGE> 10
the other party's name, domain name, logo, trademark or service mark in
advertising or publicity without obtaining the other party's prior written
consent; provided, however, that Xcare.net shall have the nonexclusive right and
license to use Client's name and Client Web Site name, including the URL
(Uniform Resource Locator) thereto, as a Client reference, and as part of
Xcare.net's client portfolio. Xcare.net shall also have the right to display its
name and logo, as well as a link to the Xcare.net site, on the Client Web
Site(s), and to receive credit as the developer of the Client Web Site(s),
(collectively, the "Credit"). Such Credit shall appear on the "home page" of the
Client Web Site(s) in a position that provides reasonable and appropriate
visibility to Xcare.net in light of industry standards and Client's
requirements.
10.8. Additional Actions and Documents. Each of the parties hereto
hereby agrees to take or cause to be taken such further actions, to execute,
deliver and file or cause to be executed, delivered and filed such further
documents, and will obtain such consents, as may be necessary or as may be
reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement.
10.9. Headings. Section headings contained in this Agreement are
inserted for convenience or reference only, shall not be deemed to be a part of
this Agreement for any other purpose, and shall not in any way define or affect
the meaning, construction or scope of any of the provisions hereof.
10.10. Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, and all
of which, when taken together, shall constitute one and the same instrument.
10.11. Independent Contractors. The relationship of the parties
hereunder shall be that of independent contractors. Nothing herein shall be
construed to constitute a partnership between or joint venture of the parties,
nor shall either party be deemed the agent of the other or have the right to
bind the other in any way without the prior written consent of the other.
10.12. Jurisdiction. All disputes arising out of or relating to this
Agreement shall be submitted to the non-exclusive jurisdiction of the state and
federal courts encompassing Denver, Colorado, and each party irrevocably
consents to such personal jurisdiction and waives all objections thereto.
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<PAGE> 11
SCHEDULE 1
This Schedule describes Services to be provided by Xcare.net to Client under
this Professional Services Agreement dated January 19, 2000. Xcare agrees to, in
good faith and a timely manner, show normal, customary levels of activity as it
relates to development of work to be performed in this Agreement. Client also
agrees to show good faith to provide Xcare, in a timely manner, with requested
documents, material, etc. necessary for the completion of development work.
Description of Work:
- Member, Provider, Payer login and security
- Member services including - online enrollment, eligibility changes,
pcp changes, card request, claims history with appropriate
accumulators, referral history, plan document display (we tested Word
to HTML and it works fine on our documents), provider lookups and
mapping, important phone numbers, view basic member reports, etc.
- Provider services including - verify patient information similar to
Member service area (plan design, provider lookup, etc.), submit and
lookup a referral, submit a claim for payment, verify claim payment,
verify pcp's covered members, view basic member and provider reports.
- Employer services including -- modify enrollment (support online open
enrollment as well as ongoing adds and deletes), view their plan
document, communicate via broadcast messaging, view payment
information, run basic reports, perform ad hoc reporting (this would
definitely be phased in over time).
- CHEC corporate services-- marketing, job-posting, etc. (concepts,
layout, and procedures jointly developed, maintenance performed by
CHEC)
- WebTPA/NetTPA-- allow for private labeling of CHEC web infrastructure
via a new entity, WebTPA or NetTPA.
Functional Specifications: To be completed during "kick-off" meeting.
Deliverables: Phase 1 to include and estimated for completion by 6/1/00:
o Member- Eligibility Updates, PCP Change, ID Card
Request, Claim History, Benefit Plan Document Display
o Provider- Member Status/Eligibility, Claim Status,
Display PCP's Member Panel, Benefit Plan Document
Summary
o Employer- View Plan Document, On-Line Enrollment,
Update/Modify Eligibility
o CHEC Corporate Services- Marketing, Job Posting,
Information by State that CHEC is operating in
(concepts, layout and procedures jointly developed and
maintenance performed by CHEC)
Phase 2 to include and estimated for completion by 9/1/00:
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o Member- Display Accumulators with Claim Status,
Referral Status, Provider Search with Geo Mapping and
Characteristics (sex, language, where educated, etc.),
Basic Member Reports
o Provider- Submit Claim, Submit Referral and Status,
Basic Member and Provider Reports
o Employer- Communicate with Employees via Message Board,
Run Basic Reports and Perform Ad Hoc Reporting (uses
new report writer)
o Branding and Launch of WebTPA.com
Acceptance: Per Contract Wording
Fee Schedule: See Attachment 2
Xcare.net and Client Contacts: (Identify key contacts for both
parties who will have
involvement/approval authorities
for the project - Project
management, technical contacts,
financial, etc.)
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<PAGE> 13
SCHEDULE 2
Contract Duration: Two Years (2/00-12/02)
The Monthly Fees listed below contain charges for Development and Transaction
use on a PMPM basis. Hosting charges are then applied as shown.
CONTRACT PAYMENT PMPM STRUCTURE:
February 1, 2000-- January 31, 2001 (Year 1)
Monthly Fee $ * Monthly Hosting $ *
Total Annual Fee $ * X 12 = $ *
February 1, 2001-- January 31, 2002 (Year 2)
MINIMUM MONTHLY FEE (Based on * Lives) $ * MONTHLY HOSTING $ *
Total Minimum Monthly Fees-Year 2 = $ *
Total Minimum Annual Fees Year 2 $ * X 12 = $ *
Lives above * in Year 2 will be calculated using a PMPM rate to be
negotiated at that time and incorporated into this agreement as a new addendum.
A * Hosting Fee will be applied to any re-negotiated PMPM fees or PMPM scale
put in place and adjusted monthly during Year 2.
A review of current lives will take place prior to the start of Year 2. The
minimum for Year 2 will be no less than $ * per month.
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
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<PAGE> 14
Xcare.net "Client"
By: /s/ THOMAS M. PIANHO By: /s/ HARRY D SPRING
--------------------------------- -----------------------------
Thomas M. Pianho Harry D Spring
- ------------------------------------ -------------------------------
Printed Name Printed Name
Sr. VP Sales/Business Dev. CEO
- ------------------------------------ -------------------------------
Title Title
1-19-2000 19, January 2000
- ------------------------------------ -------------------------------
Date Date
14
<PAGE> 1
HOSTING SERVICES AGREEMENT
This Hosting Services Agreement (the "Agreement") is entered into as
of January 19, 2000 (the "Effective Date") by and between Xcare.net, a Delaware
corporation with offices at 6400 S. Fiddler's Green Circle, Englewood, CO 80111,
("Xcare.net"), and Texas Managed Care Administrative Services on behalf of
MethodistCare Inc., with offices at Two Greenway Plaza, Suite 500, Houston, TX
75046 ("Client").
This Agreement includes the following schedules, which are
incorporated herein by this reference:
Schedule 1 Hosting Services Description and Pricing
Schedule 2 Managed Services Option
Any notice required or permitted under this Agreement will be in
writing and delivered to the address set forth below, or to such other notice
address as the other party has provided by written notice.
THIS AGREEMENT, INCLUDING THE SCHEDULES LISTED ABOVE, CONSTITUTES THE
COMPLETE AND EXCLUSIVE UNDERSTANDING OF THE PARTIES WITH REFERENCE TO THE
SUBJECT MATTER HEREOF, AND SUPERSEDES ALL PRIOR SALES PROPOSALS, NEGOTIATIONS,
AGREEMENTS AND OTHER REPRESENTATIONS OR COMMUNICATIONS, WHETHER ORAL OR WRITTEN.
IF THERE IS ANY CONFLICT BETWEEN THE TERMS AND CONDITIONS OF CLIENT'S PURCHASE
ORDER (OR ANY OTHER PURCHASE OR SALES DOCUMENT) AND THE TERMS AND CONDITIONS OF
THIS AGREEMENT, THIS AGREEMENT SHALL CONTROL. THIS AGREEMENT MAY BE MODIFIED,
REPLACED OR RESCINDED ONLY IN WRITING, AND SIGNED BY A DULY AUTHORIZED
REPRESENTATIVE OF EACH PARTY.
AGREED:
Xcare.net Client:
/s/ PETER H. CHEESBROUGH /s/ M. JAMES HENDERSON
- --------------------------------------- ----------------------------------
Peter H. Cheesbrough M. James Henderson
- --------------------------------------- ----------------------------------
SR. VP. Finance & CFO President & CEO
- --------------------------------------- ----------------------------------
By: By:
------------------------------------ -------------------------------
(Authorized Signature) (Authorized Signature)
- --------------------------------------- ----------------------------------
(Printed Name and Title) (Printed Name and Title)
<PAGE> 2
XCARE.NET HOSTING SERVICES AGREEMENT
1 Xcare.net Obligations
1.1 Xcare.net agrees to provide to Client the Services as described in Schedules
attached hereto pursuant to orders placed by Client and accepted by Xcare.net.
1.2 The initial service period for all orders for Services ("Initial Service
Period") shall commence upon activation of the Services and remain in effect for
a period of two years. If Client and Xcare.net fail to agree on the terms to
extend the Services past the Initial Service Period, the applicable Schedule for
Services shall continue in effect on a month-to-month basis, until terminated by
either Client or Xcare.net as provided in Section 4 below.
1.3 The fees for Services are specified in Schedule 1 of this agreement.
Xcare.net will issue invoices ("Invoices") to Client for installation fees for
Client's Services and other applicable nonrecurring and recurring fees covering
the initial one month period. On a monthly basis, Xcare.net will determine
Client's actual usage. After the initial one month period, Xcare.net will issue
Invoices on a monthly basis to Client as specified in attached schedules.
2 Client's Obligations
2.1 Client shall pay Xcare.net the amount specified in the Invoices, in U.S.
Dollars, per the payment terms set forth in such invoices. Late payments shall
bear interest at one and one-half percent (1.5%) per month or the maximum rate
permitted by law, whichever is less.
2.2 Client is solely responsible for all updates to Content (as defined below)
on Server ("Server") as defined in the applicable Schedule). Client shall update
Content on the Server by means of the Internet and a Xcare.net provided secure
account.
2.3 Xcare.net shall not obtain any right, title to and/or interest in content,
including but not limited to text, multimedia images (graphics, audio and
video), software and other data (collectively "Content") provided by Client and
installed by Xcare.net or Client on the Server; however, Xcare.net shall retain
title to and all rights in all other intellectual property including, but not
limited to, any know-how related to Xcare.net-provided products or services such
as the hardware, software or any other server technology.
2.4 Client acknowledges and agrees that use of the Services is subject to
Client's compliance with the terms defined in Xcare.net's Prohibited Uses of
Products and Services Policy, attached hereto as Exhibit A, as amended from time
to time. Violations of any of the terms of such policy shall constitute a breach
hereunder and may result in termination of this Agreement by Xcare.net.
2.5 Client is solely responsible for Content, including any subsequent changes
or updates made or authorized by Client. Client warrants and represents that
Content: (i) does not infringe or violate the rights of any third party
including, but not limited to, intellectual property rights (including but not
limited to patents, copyrights, trademarks, trade secrets and rights of
publicity); (ii) is not defamatory or obscene; and (iii) does not violate any
other applicable law. Xcare.net reserves the right (but shall have no
obligation) to delete any material installed on a Server in a Xcare.net facility
or to disconnect Internet access of a Server which contains Content which
Xcare.net believes in good faith breaches any of these warranties. Any breach of
these warranties by Client may result in termination of the Services.
2.6. Client acknowledges and agrees that Client assumes all risk related to the
processing of transactions related to electronic commerce. Xcare.net reserves
the right to discontinue the Services to Client if either Xcare.net believes in
good faith that Client has violated the foregoing, or that Client's use of the
Services poses a threat to the internal security of the Xcare.net network, the
Web hosting facility, other customers, or the Server.
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<PAGE> 3
2.7 Upon termination of either this Agreement or any applicable Schedule for
Services, User must relinquish use of the Internet Protocol Addresses ("IP
Addresses") or address blocks assigned to it in connection with the Services.
2.8 All equipment provided by Xcare.net in connection with this Agreement shall
remain the property of Xcare.net.
3 Warranties and Indemnity
3.1 Xcare.net makes no warranties of any kind with respect to Services and
products provided under this Agreement. XCARE.NET DISCLAIMS ALL WARRANTIES,
EXPRESS AND IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE. In any instance involving performance or nonperformance of
Services or products provided hereunder, Client's sole remedy shall be (a) in
the case of Services, refund of a prorata portion of the price paid for Services
which were not provided, or (b) in the case of products, repair or return of the
defective product to Xcare.net for refund, at the option of Xcare.net.
3.1.1 Except as otherwise may be provided in this Agreement, credit for lost
Services will be issued only for periods, calculated in fifteen (15) minutes
increments, in excess of eight (8) hours in a calendar month. Lost Services
or "Downtime" is deemed to have occurred only if service becomes unusable by
Client as a result of failure of Xcare.net facilities, equipment, or
personnel used to provide the Services, and only where the interruption is
not the result of (a) negligence or other conduct of Client or its agents,
including a failure or malfunction resulting from applications or services
provided by Client or its agents, (b) failure or malfunction of any
equipment or services not provided by Xcare.net, (c) circumstances beyond
the control of Xcare.net, or (d) interruption due to scheduled maintenance,
alteration, or implementation. All claims must be made within 60 days of the
date of such lost Services.
3.2 IN NO EVENT WILL XCARE.NET, ITS SUBSIDIARIES OR ITS OR THEIR AGENTS, BE
LIABLE TO CLIENT FOR ANY DAMAGES, INCLUDING LOST PROFITS, LOSS OF DATA, OR OTHER
SPECIAL, INCIDENTAL, iNDIRECT OR CONSEQUENTIAL DAMAGES OR ANY OTHER DAMAGES,
ARISING OUT OF OR IN CONNECTION WITH THE PURCHASE, USE OR PERFORMANCE OF THE
SERVICES. Xcare.net will not be liable for any damages Client may suffer arising
out of Client's use, or inability to use, the Services or related products. In
no event shall Xcare.net be liable for unauthorized access to Client's
transmission facilities or Client premise equipment or for unauthorized access
to or alteration, theft or destruction of Client's data files, programs,
procedure or information through accident, fraudulent means or devices, or any
other method.
3.3 Xcare.net's liability for damages to Client for any cause whatsoever,
regardless of form of action, including negligence, shall not exceed an amount
equal to the price of products and Services purchased by Client during the
twelve month period preceding the event which caused the damages or injury;
provided, however, that this limitation shall not apply to damages to Client for
personal injuries or destruction of tangible personal property proximately
caused by the negligence of Xcare.net.
3.4 Xcare.net will indemnify and hold Client harmless against any claim or
demand by any third party that any hardware or software provided to Client
hereunder, infringes any United States copyright or trade secret. Except for
damages incurred by Xcare.net caused by (a) proprietary rights infringement
claims as provided for above, or (b) damages for personal injuries or
destruction of tangible property proximately caused by Xcare.net's gross
negligence or willful misconduct, Client agrees to indemnify and hold Xcare.net
harmless against any claim or demand by any third party due to or arising out of
the use by Client of Services and related products provided hereunder.
3.5 Client will indemnify and hold Xcare.net harmless against any claim or
demand by any third party brought as a result of Client's violation of the
Xcare.net Prohibited Uses Policy or and third party claims Content provided by
Client or by Xcare.net at Client's request.
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<PAGE> 4
4. Termination
4.1 Termination for Convenience. Either party may terminate this Agreement by
providing the other party with at least ninety (90) days notice prior to the end
of the then current term.
4.2 Client may cancel or terminate this Agreement in the event of three (3) or
more "service interruptions" in excess of four (4) hours duration during any
thirty (30) day period, during the term of this Agreement. A "service
interruption" is deemed to have occurred only if service becomes unusable by
Client as a result of failure of Xcare.net facilities, equipment, or personnel
used to provide the Services, and only where the interruption is not the result
of (a) negligence or other conduct of Client or its agents, including a failure
or malfunction resulting from applications or services provided by Client or its
agents, (b) failure or malfunction of any equipment or services not provided by
Xcare.net, (c) circumstances beyond the control of Xcare.net, or (d)
interruption due to scheduled maintenance, alteration, or implementation.
4.3 This Agreement may be terminated by either party in the event of (i) any
material breach of, any of the terms and conditions of this Agreement by the
other party, which default continues in effect after the defaulting party has
been provided with written notice of default and thirty (30) days to cure such
default; (ii) the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to either party of its
debts under any bankruptcy, insolvency, or other similar law now or hereafter in
effect, that authorizes the reorganization or liquidation of such party or its
debt or the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property; (iii) either
party's consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it; or (iv) either party's making a general assignment for the benefit
of creditors; or either party's becoming insolvent; or either party taking any
corporate action to authorize any of the foregoing.
4.4 In the event of termination by Client for any reason other than expiration
of a service order or a service interruption as defined in subsection 4.2,
Client agrees to immediately pay Xcare.net as a cancellation fee all monthly
recurring fees specified in the quote provided by Xcare.net for such service
order for the balance of the then current term, not to exceed the monthly fee.
Upon termination of this Agreement, Client must relinquish use of the Internet
Protocol Addresses ("IP Addresses") or address blocks assigned to it in
connection with the Services.
5. General
5.1 Force Majeure. In the event that either party is unable to perform any of
its obligations under this Agreement or to enjoy any of its benefits because of
any event beyond the control of the affected party including, but not limited
to, natural disaster, acts of God, actions or decrees of governmental bodies or
failure of communication lines (a "Force Majeure Event"), the party who has been
so affected shall promptly give written notice to the other party and shall use
its best efforts to resume performance. Upon receipt of such notice, all
obligations under this Agreement shall be immediately suspended for the duration
of such Force Majeure Event.
5.2 Assignment. Neither party shall have the right to assign this Agreement
without the prior written consent of the other party; provided, that either
party shall have the right to assign this Agreement to any person or entity that
acquires or succeeds to all or substantially all of such party's business or
assets upon written notice to the other party.
5.3 Severability. In the event any one or more of the provisions of this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
the remaining provisions of this Agreement shall be unimpaired and the parties
will substitute a new enforceable provision of like economic intent and effect.
5.4 Waiver. Waiver of any breach or failure to enforce any term of this
Agreement shall not be deemed a waiver of any breach or right to enforce which
may thereafter occur. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
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4 Termination
4.1 Termination for Convenience. Either Party may terminate this Agreement by
providing the other party with at least ninety (90) days notice.
4.2 Client may cancel or terminate this Agreement in the event of three (3) or
more "service interruptions" in excess of four (4) hours duration during any
thirty (30) day period, during the term of this Agreement. A "service
interruption" is deemed to have occurred only if service becomes unusable by
Client as a result of failure of Xcare.net facilities, equipment, or personnel
used to provide the Services, and only where the interruption is not the result
of (a) negligence or other conduct of Client or its agents, including a failure
or malfunction resulting from applications or services provided by Client or
its agents, (b) failure or malfunction of any equipment or services not
provided by Xcare.net, (c) circumstances beyond the control of Xcare.net, or
(d) interruption due to scheduled maintenance, alteration, or implementation.
4.3 This Agreement may be terminated by either party in the event of (i) any
material breach of any of the terms and conditions of this Agreement by the
other party, which default continues in effect after the defaulting party has
been provided with written notice of default and thirty (30) days to cure such
default; (ii) the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to either party of its
debts under any bankruptcy, insolvency, or other similar law now or hereafter
in effect, that authorizes the reorganization or liquidation of such party or
its debt or the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property; (iii)
either party's consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it; or (iv) either party's making a general assignment for
the benefit of creditors; or either party's becoming insolvent; or either party
taking any corporate action to authorize any of the foregoing.
4.4 In the event of termination by Client for any reason other than expiration
of a service order or a service interruption as defined in subsection 4.2,
Client agrees to immediately pay Xcare.net as a cancellation fee all monthly
recurring fees specified in the quote provided by Xcare.net for such service
order for the balance of the then current term, not to exceed the monthly fee.
Upon termination of this Agreement, Client must relinquish use of the Internet
Protocol Addresses ("IP Addresses") or address blocks assigned to it in
connection with the Services.
5. General
5.1 Force Majeure. In the event that either party is unable to perform any of
its obligations under this Agreement or to enjoy any of its benefits because of
any event beyond the control of the affected party including, but not limited
to, natural disaster, acts of God, actions or decrees of governmental bodies or
failure of communication lines (a "Force Majeure Event"), the party who has
been so affected shall promptly give written notice to the other party and
shall use its best efforts to resume performance. Upon receipt of such notice,
all obligations under this Agreement shall be immediately suspended for the
duration of such Force Majeure Event.
5.2 Assignment. Neither party shall have the right to assign this Agreement
without the prior written consent of the other party; provided, that either
party shall have the right to assign this Agreement to any person or entity
that acquires or succeeds to all or substantially all of such party's business
or assets upon written notice to the other party.
5.3 Severability. In the event any one or more of the provisions of this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
the remaining provisions of this Agreement shall be unimpaired and the parties
will substitute a new enforceable provision of like economic intent and effect.
5.4 Waiver. Waiver of any breach or failure to enforce any term of this
Agreement shall not be deemed a waiver of any breach or right to enforce which
may thereafter occur. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
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5.5 Notices. All notices, demands, requests or other communications required or
permitted under this Agreement will be deemed given when (i) delivered
personally; (ii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iii) one (1) day after
deposit with a commercial overnight carrier, with written verification of
receipt.
5.6 Governing Law. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes thereto, shall be governed by and construed
in accordance with the laws of the State of Colorado without reference to
conflict of law principles.
5.7 Jurisdiction. All disputes arising out of or relating to this Agreement
shall be submitted to the non-exclusive jurisdiction of the state and federal
courts encompassing Denver, Colorado, and each party irrevocably consents to
such personal jurisdiction and waives all objections thereto.
5.8 Headings. Section headings contained in this Agreement are inserted for
convenience or reference only, shall not be deemed to be a part of this
Agreement for any other purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
5.9 Independent Contractors. The relationship of the parties hereunder shall be
that of independent contractors. Nothing herein shall be construed to constitute
a partnership between or joint venture of the parties, nor shall either party be
deemed the agent of the other or have the right to bind the other in any way
without the prior written consent of the other.
5.10 Execution in Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which,
when taken together, shall constitute one and the same instrument.
5.11 Publicity. Client understands that Internet use, and related products and
Services provided under this Agreement, may require registrations and related
administrative reports which are public in nature. In addition Client agrees
Xcare.net may include its name and a description of the provided services as a
reference or in client portfolios.
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EXHIBIT A
XCARE.NET PROHIBITED USES POLICY FOR
XCARE.NET HOSTING SERVICES
The following actions are defined by Xcare.net as "system abuse" and are
strictly prohibited under the Xcare.net Hosting Services Agreement. The
examples named in this list are not exhaustive and are provided solely for
guidance to Clients using the Xcare.net Hosting Services. If any Client is
unsure of whether a contemplated use or action is permitted, it is Client's
responsibility to determine the permitted use by contacting Xcare.net via
electronic mail at [email protected]. The following activities are
expressly prohibited and could result in termination of a Client's
Xcare.net Hosting Services Agreement
GENERAL
o Resale of Xcare.net's products and services, unless
specifically permitted and documented in a separate written
agreement or the initial Client contract.
o Using the facilities and capabilities of Xcare.net or its
services to conduct any illegal activity or other activity
that infringes the rights of others.
o Deceptive on-line marketing practices. The United States
Federal Trade Commission has issued informative guidelines for
proper on-line marketing schemes. For more information about
the FTC guidelines review the Deception Policy Statement from
the FTC.
o Violations of intellectual property -- as legally protected by
copyrights and licenses. This includes, but is not limited to,
the installation or distribution of illegal, "pirated", or
other software products that are not appropriately licensed by
Client.
o Violations of privacy.
SYSTEM AND NETWORK
o Introduction of malicious programs into the network or Server
(e.g. viruses, worms, Trojan horses, etc.).
o Attempted or successful security breaches or disruption of
Internet communication. Security breaches include, but are not
limited to, accessing data of which Client is not an intended
recipient or logging into a Server or account that Client is
not expressly authorized to access.
o Client may not execute any form of network monitoring (e.g.
packet sniffer) which will intercept data not intended for
Client Server.
o Attempts to circumvent Client authentication or security of
any host, network, or account ("cracking").
o Attempts to interfere with or deny service to any user or any
host (e.g. Denial of Service Attacks).
o Use of any program/script/command, or sending messages of any
kind, designed to interfere with a third party Clients
terminal session, via any means, locally or via the Internet.
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BILLING
o Furnishing false or incorrect data on the signup form, hosting
agreement, or online hosting order application.
o Attempts to circumvent or alter the processes or procedures to
measure time, bandwidth utilization, or other methods to
document "use" of Xcare.net's products and services.
MAIL
o Sending unsolicited mail messages, including the sending of
"junk mail" or other advertising material to individuals who
did not specifically request such material (e.g. "spamming").
o Harassment, whether through language, frequency, or size of
messages.
o Forging of mail header information to a third party.
o Using the Xcare.net or Client account to collect replies to
messages sent from another provider, which violate these rules
or those of the other provider.
o Creating or forwarding "chain letters" or other "pyramid
schemes" of any type.
USENET NEWSGROUPS
o Posting the same or similar message to large numbers of Usenet
newsgroups.
o Posting chain letters of any type.
o Posting encoded binary files to newsgroups not specifically
named for that purpose.
o Cancellation or superseding of posted messages other than your
own.
o Forging of header information.
o Solicitations of mail for any other e-mail address other than
that of the poster's account or service, with intent to harass
or to collect replies.
IRC (INTERNET RELAY CHAT)
o Use of IRC scripts or programs that will interfere with or
deny service to other clients on any Server or host.
o Running or attempting to run any IRC robot or Server on
equipment other than the equipment provided by Xcare.net to
the Client.
ADMINISTRATOR ACCOUNTS
The following section details Xcare.net's policy regarding
administrator privileges with the products and services offered by
Xcare.net's Hosting Services Group. Clients utilizing Xcare.net Hosting
Services products and services, whether the Server is provided by
Xcare.net or is provided by the Client are subject to the following
list of restrictions. The items in this list are not exhaustive and are
provided solely for guidance to Clients using the Xcare.net Hosting
Services. If any Client is unsure of whether a contemplated use or
action is permitted it is Client's responsibility to determine the
permitted use by contacting Xcare.net via electronic mail at
[email protected].
o Client may not change the IP address or name of the Server.
o Client may not provide or share administrator privileges with
individuals who have not reviewed and agreed to the terms of
the Xcare.net Hosting Services Agreement and the Xcare.net
Prohibited uses Policy for Xcare.net Hosting Services.
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SCHEDULE 1
HOSTING SERVICES DESCRIPTION AND PRICE SCHEDULE
In accordance with this agreement, Xcare.net will provide the following
services, resources and service features:
SERVER CONFIGURATION
HARDWARE
Xcare.net Sun Server Technical Facility.
XCARE.NET HOSTING PROVIDED SOFTWARE
As part of the Hardware Operating Systems used.
DATA CENTER
- New Mexico Technical Facility.
BANDWIDTH & NETWORKING
- Frame Relay.
BACKUP
- Provided by Xcare through redundant sites.
SERVICES
- Hosting of MethodistCare website and transactions, as well as
maintenance of those transactions to include: Member traffic counts,
transaction counts, security and preventive maintenance. Service
also includes maintenance of hardware and hardware operating systems
to host these services. Services also include upgrade of Operating
Systems and Hardware to support transaction operations.
<TABLE>
<CAPTION>
PRICING SETUP FEE MONTHLY FEE
- ------- ------------- --------------
<S> <C> <C>
TOTAL PRICING AS CONFIGURED ABOVE: SEE * OF CURRENT
DEVELOPMENT MONTHLY PMPM
AGREEMENT, FEES
ATTACHMENT 2
Each additional 1Mbps of average bandwidth utilization N/A $
----
Each additional 10GB of data backup N/A $
----
</TABLE>
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
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SCHEDULE 2
MANAGED SERVICES OPTION
As the Managed Services portion of this Hosting agreement, Xcare.net will
provide server administration and management services that include but are not
necessarily limited to:
o Performance/resource monitoring and proactive problem resolution
o Daily systems administration tasks
o Applying operating system enhancements and security patches
o Adding user accounts
o Configuring DSN's and database connections
o Managing DNS services
o Adding/configuring FTP services
o Installing security certification keys
o Minor software revision changes & application patches
o Conducting automatic log rotation
o Checking disk space
o Facilitating restore requests
The above services are limited to a maximum of [35] hours of proactive
administration and [35] hours of Client requested administration per month.
In addition, Xcare.net Hosting will provide 24x7 1st level response for
recovering application related problems that have caused a complete outage to
the Web Services. However, these issues may need to be escalated to the
appropriate Application Development contact provided by the client for
resolution.
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DEVELOPMENT SERVICES AGREEMENT
This Professional Services Agreement (the "Agreement") is entered into
as of February 24, 2000 by and between Xcare.net, a Delaware corporation with
offices at 6400 S. Fiddler's Green Circle, Englewood, CO 80111, ("Xcare.net"),
and Texas Managed Care Administrative Services on behalf of MethodistCare
Inc., with offices at Two Greenway Plaza, Suite 500, Houston, TX 75046
("Client").
This Agreement covers the purchase and license of consulting,
development and other services from Xcare.net, pursuant to orders placed by
Client and accepted by Xcare.net after the Effective Date.
This Agreement includes the following attachments, which are
incorporated herein by this reference:
Schedule 1 Xcare.net Development Services
Schedule 2 Contract Fee Structure and Agreements
Any notice required or permitted under this Agreement will be in
writing and delivered to the address set forth below, or to such other notice
address as the other party has provided by written notice.
THIS AGREEMENT, INCLUDING THE ATTACHMENTS LISTED ABOVE, CONSTITUTES THE
COMPLETE AND) EXCLUSIVE UNDERSTANDING OF THE PARTIES WITH REFERENCE TO THE
SUBJECT MATTER HEREOF, AND SUPERSEDES ALL PRIOR SALES PROPOSALS, NEGOTIATIONS,
AGREEMENTS AND) OTHER REPRESENTATIONS OR COMMUNICATIONS, WHETHER ORAL OR
WRITTEN. IF THERE IS ANY CONFLICT BETWEEN THE TERMS AND CONDITIONS OF CLIENT'S
PURCHASE ORDER (OR ANY OTHER PURCHASE OR SALES DOCUMENT) AND THE TERMS AND
CONDITIONS OF THIS AGREEMENT, THIS AGREEMENT SHALL CONTROL. THIS AGREEMENT MAY
BE MODIFIED, REPLACED OR RESCINDED ONLY IN WRITING, AND SIGNED BY A DULY
AUTHORIZED REPRESENTATIVE OF EACH PARTY.
AGREED:
Xcare.net
Client: /s/ M. JAMES HENDERSON
- ------------------------------ -----------------------
M. James Henderson
- ------------------------------ ------------------------------
President & CEO
- ------------------------------ ------------------------------
By: /s/ PETER H. CHEESBROUGH By:
--------------------------- ---------------------------
(Authorized Signature) (Authorized Signature)
Peter H. Cheesbrough
- ------------------------------ ------------------------------
(Printed Name and Title) (Printed Name and Title)
Sr. VP Finance & CFO
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<PAGE> 2
ATTACHMENT 1
XCARE.NET DEVELOPMENT SERVICES
1. DEFINITIONS
1.1. "Content" shall mean marketing collateral, data, text, audio
files, video files, graphics and other materials provided by Client or developed
hereunder for use with the Client Web Site, but excluding the Xcare.net
Software.
1.2. "Development Services" shall mean design, development, and set-up
services as necessary to modify existing Xcare.net technology, trade secrets and
know-how to produce the Xcare.net Software and other elements of the Client Web
Site, and/or any other consulting services rendered hereunder as identified in
the appropriate schedules ("Schedule(s)") attached hereto.
1.3. "Xcare.net Software" shall mean all computer program code and
other results and proceeds of Xcare.net's services hereunder (other than
Content) that are delivered by Xcare.net to Client pursuant to this Agreement.
Such Xcare.net Software shall be provided in object code form unless the parties
mutually agree in writing to delivery of source code.
1.4. "Client Web Site(s)" shall mean the so-called "web page" site or
sites on the World Wide Web, for the public Internet or for corporate intranets
or extranets, to be developed or serviced by Xcare.net hereunder, as identified
in the appropriate Schedule(s).
2. SERVICES
2.1. Development Services. Xcare.net shall render Development Services
in accordance with the requirements set forth in Schedules attached hereto. Each
Schedule for new services shall be successively numbered (e.g., 1, 2, etc.).
Each schedule shall be executed by the parties and shall be subject to the terms
and conditions of this Agreement. Xcare.net shall provide qualified and trained
personnel to render such services and shall use reasonable commercial efforts to
meet the delivery schedule set forth in the applicable Schedules. Any additions,
deletions or other changes to a Schedule shall be mutually agreed to in writing
in advance by both parties and shall be memorialized in a revised Schedule
pursuant to the procedure set forth in Section 2.6 below for Change Orders. All
services shall be performed at Xcare.net's offices unless otherwise agreed by
the parties. In the event that services are performed at Client's location,
Client shall provide Xcare.net at no charge with all necessary facilities and
equipment, including without limitation, computer time on Client's computers and
office space, sufficient to render the services contemplated hereunder. Client
shall deliver to Xcare.net all Content selected by Client for incorporation into
any Client Web Site in digitized format in accordance with the delivery schedule
set forth in the applicable Schedule(s). In the event that Client fails to
deliver the Content in accordance with the delivery schedule, the development
schedule shall be extended by the number of days that delivery of the Content
was delayed, unless Xcare.net notifies Client that this extension will not
rectify Xcare.net's scheduling interruption resulting from Client's delay in
which case the parties shall mutually agree upon a new delivery schedule and
fees with respect to the rendition of the Development Services.
2.2. Acceptance of Deliverables. Within fifteen (15) business days
after the delivery to Client of any deliverable pursuant to any Schedule, Client
shall provide Xcare.net with written notice of any failure of any deliverable to
materially conform to the functional specifications set forth in the applicable
Schedule.
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Xcare.net and Client shall review the objections, and Xcare.net will use
commercially reasonable efforts to correct any material non-conformity with the
functional specifications and provide Client with a revised deliverable within
fifteen (15) business days. Client shall have deemed to have accepted the
deliverable if Xcare.net does not receive written notice of Client's objections
within said fifteen (15) business day period.
2.3. Domain Name Registration Services. If domain name registration
services are included in the Schedule, Xcare.net shall use commercially
reasonable efforts to assist Client in registering an Internet domain name
selected by Client. Client will be solely responsible for all out-of-pocket
costs and all legal clearances regarding name selection and registration.
2.4. Maintenance Services. If Client desires to purchase maintenance
services from Xcare.net for the Client Web Site, the parties shall execute the
then current Xcare.net Maintenance Services Agreement and Xcare.net shall render
maintenance services pursuant to the terms and conditions of such agreement.
2.5. Hosting Services. If Client desires to purchase hosting services
from Xcare.net for the Client Web Site, the parties shall execute the then
current Xcare.net Hosting Services Agreement, and Xcare.net shall render hosting
services pursuant to the terms and conditions of such agreement.
2.6. Change Orders. If Client desires to make changes to an existing
Schedule, the parties shall mutually agree upon an additional or revised
Schedule for each new Change Order. Each such Schedule shall be successively
numbered (e.g., 1.A, 1.B, etc.) and shall be executed by the parties. Any
revised Schedule(s) shall be subject to the terms and conditions of this
Agreement. Further, Xcare and Client agree to allow reasonable, non-material
modifications to the contract if both Xcare and Client agree to such change.
3. OWNERSHIP AND LICENSE RIGHTS
3.1. Property Rights and Ownership. The Client Web Site(s) and all
other results and proceeds of Xcare.net's services hereunder, shall consist of,
and shall operate in conjunction with, multiple elements of intellectual
property, including without limitation the Xcare.net Software and the Client
Content. The parties' respective rights to such elements shall be as set forth
below. For purposes of this Agreement, the term "ownership" shall refer to
ownership of all intellectual property rights including, but not limited to, all
patent, copyright, trade secret and trademark rights, as applicable, with
respect to the subject intellectual property.
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<PAGE> 4
<TABLE>
<CAPTION>
Intellectual Property Elements Ownership/Rights
- ------------------------------------------------------- --------------------------------------------------------
<S> <C>
Client Content, including all Client Content that is Client has sole ownership.
modified by Xcare.net ("Modified Content") and HTML
files that contain Client Content, and modifications
to Content as a result of Client's usage of
self-authoring tools.
Content created for Client by Xcare.net and accepted Client has sole ownership.
and paid for by Client, as well as commissioned Content
authored by third parties specifically for use in
connection with this Agreement and paid for by Client
(e.g., original illustrations or graphics).
Domain name for Client Web Site. Client has sole ownership.
Server usage report data/statistics generated by the Client has sole ownership of data/statistics, and
Xcare.net Software in form and substance as set forth Xcare.net has a license pursuant to Section 3.3 below.
in the applicable Schedule or as mutually agreed by
the parties.
Commercially available third-party software which is Third parties have ownership, and Client shall be
incorporated into the Xcare.net Software. informed of all third-party software that Client may
need to license at Client's own expense.
Xcare.net Software developed by or for Xcare.net in Xcare.net has sole ownership of such Xcare.net
connection with this Agreement for Client. Software. Client shall be granted a license to use the
Xcare.net Software as set forth in Section 3.2.
Xcare.net supplied material developed generally to Xcare.net has sole ownership of such developed
support Xcare.net products and/or service offerings material. Client shall be granted a license to use the
(e.g. http configuration). Xcare.net Software as set forth in Section 3.2 below.
</TABLE>
3.2. License to Client. Xcare.net grants Client a non-exclusive,
non-transferable license to use the Xcare.net Software on a single computer
system in object code version only to operate and display the Client Web Site in
order for end users to access the Client Web Site. If the Xcare.net Software is
not developed for use on a Client Web Site, then the foregoing license shall
constitute a non-exclusive, non-transferable license to use the Xcare.net
Software on a single computer system in object code version only for Client's
internal business needs. Client may transfer the Xcare.net Software to a
different computer system so long as the Xcare.net Software is not retained on
the prior computer system on which it was initially installed other than as a
permitted backup copy. Client may grant a sublicense to a third party that
Client engages to host the Client Web Site; provided, that such third party
agrees in writing to be bound by the license and confidentiality restrictions
set forth in this Agreement. Client is prohibited from duplicating and/or
distributing any Xcare.net Software without the prior written consent of
Xcare.net; provided, however that Client may copy the Xcare.net Software only as
needed for reasonable ordinary backup or disaster recovery procedures. Client
may use the backup copies only if the installed copy is lost or destroyed or the
hardware on which the installed copy is installed becomes inoperable, provided
that the use of said backup
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<PAGE> 5
copies is discontinued immediately when the original hardware becomes operable.
3.3. License to Xcare.net. Client grants Xcare.net a non-exclusive
license (i) to use, copy, and modify the Content in connection with Xcare.net's
performance of the Development Services, (ii) to use, copy, modify, distribute
and display server usage data and statistics generated by the Xcare.net
Software. This non-exclusive license will be subject to applicable Federal and
State healthcare information privacy laws and regulations.
3.4. Supporting Documents. Each party agrees to execute any additional
documents deemed reasonably necessary to effect and evidence the other party's
rights with respect to the intellectual property elements set forth above.
3.5. No Reverse Engineering. All rights not expressly granted hereunder
are reserved by Xcare.net. Without limiting the foregoing, Client may not
reverse engineer, reverse assemble, decompile or otherwise attempt to derive the
source code from the Xcare.net Software.
3.6. Proprietary Notices. All copies of the Xcare.net Software and
other Xcare.net supplied materials used by Client shall contain copyright and
other proprietary notices in the same manner in which Xcare.net incorporates
such notices in the Xcare.net Software or in any other manner requested by
Xcare.net. Client agrees not to remove, obscure or obliterate any copyright
notice, trademark or other proprietary rights notices placed by Xcare.net on or
in the Xcare.net Software.
4. PAYMENT
4.1. Development Services. In consideration for the performance of the
Development Services, Client shall pay to Xcare.net the amounts set forth in the
applicable Schedule, on the payment dates set forth in such Schedule. In the
event that Xcare.net renders services at Client's location, Client shall pay the
mutually agreed upon reasonable travel, living and related expenses for
Xcare.net personnel rendering services at Client's location. All services
hereunder shall be rendered on a per-project basis; provided, however, that in
the event that the parties agree that any services hereunder will be rendered on
a time and materials basis, all work will be billed at Xcare.net's standard
hourly rates, which may be revised from time to time by Xcare.net, in its sole
discretion, upon written notice to Client. For time and materials billing,
amounts set forth in the applicable Schedule represent an estimate of the hours
required to complete the work outlined in such Schedule; in the event that
actual hours incurred to complete the work exceed those included in the
estimate, Xcare.net will notify Client, and additional hours will be billed at
Xcare.net's standard hourly rates.
4.2. Maintenance Services. If the parties have entered into a Xcare.net
Maintenance Services Agreement, Client shall pay Xcare.net the amounts set forth
in said Maintenance Services Agreement.
4.3. Hosting Services. If the parties have entered into a Xcare.net
Hosting Services Agreement, Client shall pay Xcare.net the amounts set forth in
said Hosting Services Agreement.
4.4. Taxes. In addition to the fees due as specified above, Client
shall pay any and all federal, state and local sales, use, value added, excise,
duty and any other taxes of any nature assessed upon or with respect to the
license granted hereunder, arising from this Agreement, except that taxes on
Xcare.net's income shall be the sole responsibility of Xcare.net.
4.5. Payments. All payments made pursuant to this Agreement shall be
made in U.S. Dollars and are due thirty (30) days from the date of receipt. Late
payments shall bear interest at one and one-half percent
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<PAGE> 6
(1.5%) per month or the maximum rate permitted by law, whichever is less.
5. LIMITED WARRANTY
5.1. Software Warranty. Subject to the limitations set forth in this
Agreement, Xcare.net warrants only to Client that the Xcare.net Software
furnished hereunder when properly installed, properly used and unmodified by
Client, will conform to the functional specifications set forth in the
applicable Schedule. Xcare.net's warranty shall extend for a period of one
hundred eighty (180) days from the date that the final deliverables specified in
each Schedule are delivered to Client ("Warranty Period"). Xcare.net's sole
responsibility under this Section 5.1 shall be to use reasonable commercial
efforts to promptly correct material errors, or at Xcare.net's option, to refund
Client's fees paid for the Xcare.net Software after deinstallation and return
thereof. All warranty claims not made in writing or not received by Xcare.net
within the Warranty Period shall be deemed waived. Xcare.net's warranty
obligations are solely for the benefit of Client, who has no authority to extend
or transfer this warranty to any other person or entity.
5.2. XCARE.NET DOES NOT WARRANT THAT THE USE OF THE XCARE.NET SOFTWARE
WILL BE UNINTERRUPTED OR ERROR FREE OR THAT THE SPECIFICATIONS WILL MEET
CLIENT'S REQUIREMENTS. EXCEPT FOR THE EXPRESS WARRANTIES STATED ABOVE, XCARE.NET
DOES NOT MAKE ANY WARRANTY AS TO THE XCARE.NET SOFTWARE OR THE SERVICES PROVIDED
HEREUNDER OR THE RESULTS TO BE OBTAINED FROM USE OF THE XCARE.NET SOFTWARE.
EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH ABOVE, THE XCARE.NET SOFTWARE IS
USED AND THE SERVICES ARE PROVIDED ON AN "AS-IS" BASIS WITHOUT WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
INTERNET OR USE OF INFORMATION IN CONNECTION WITH THE SOFTWARE.
6. INTELLECTUAL PROPERTY INDEMNIFICATION
6.1. Xcare.net.
6.1.1. Indemnification. Xcare.net, at its own cost and
expense, shall defend Client and its officers and directors, against a claim
that the Xcare.net Software infringes a third-party United States copyright or
trade secret, and shall pay any settlements entered into or damages awarded
against Client, or its officers and directors, to the extent related to such
claim, provided that (i) Client notifies Xcare.net promptly in writing of the
claim; (ii) Xcare.net has the sole control of the defense and all related
settlement negotiations; and (iii) Client provides Xcare.net with all reasonably
necessary assistance, information, and authority to perform the foregoing at
Xcare.net's expense.
6.1.2. Xcare.net shall have no liability for any claim of
infringement based on (i) use by Client of other than the current update of the
Xcare.net Software if the infringement would have been avoided by uses of the
current update, assuming Client is notified of such current update; (ii)
modifications, adaptations or changes to the Xcare.net Software not made by
Xcare.net; (iii) the combination or use of the materials furnished hereunder
with materials not furnished by Xcare.net if such infringement would have been
avoided by use of the Xcare.net materials alone; or (iv) use or incorporation of
Client Content or Client Modified Content. In the event the Xcare.net Software
is held to, or Xcare.net believes is likely to be held to, infringe the
intellectual property rights of a third party, Xcare.net shall have the right at
its sole option and expense to (i) substitute or modify the Xcare.net Software
so that it is non-infringing and qualitatively and functionally equivalent to
the Xcare.net Software; (ii) obtain for Client a license to continue using the
Xcare.net Software; or if neither (i) nor (ii) is commercially reasonable,
Xcare.net shall have the right to
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<PAGE> 7
terminate this Agreement immediately upon written notice to Client, and
Xcare.net shall make payment to Client of an amount equal to the fees paid for
the Xcare.net Software, pro-rated over a three (3) year period commencing on the
Effective Date. This Section 6.1 sets forth Client's sole and exclusive remedy
and Xcare.net's sole liability for intellectual property infringement by
Xcare.net.
6.2. Client.
6.2.1. Client hereby represents and warrants to Xcare.net that
(i) Client has secured all necessary consents, permissions, clearances,
authorizations and waivers for the use of Content or Modified Content, including
without limitation, all text, pictures, audio, video, logos and copy contained
in all Content or Modified Content; (ii) the use of Content as contemplated
herein shall not infringe the copyright, trademark or other intellectual
property rights of any party, or constitute defamation, invasion of privacy, or
the violation of any right of publicity or any other right of any party; and
(iii) Client has complied and shall comply with all legislation, rules and
regulations regarding Content.
6.2.2. Client shall indemnify and hold harmless Xcare.net, its
directors, officers, parent company, and affiliates, from any and all liability,
costs and expenses (including attorney's fees) arising in connection with any
third party claim or action brought against Xcare.net, or any of its directors,
officers, parent company, and affiliates, relating to Client Content or Client
Modified Content, provided (i) Xcare.net notifies Client promptly in writing of
such claim, (ii) Client has the sole control of the defense and all related
settlement negotiations, and (iii) Xcare.net provides Client with all reasonably
necessary assistance, information and authority to perform the foregoing at
Client's expense.
7. LIMITATIONS ON LIABILITY
THE MAXIMUM LIABILITY OF XCARE.NET OR CLIENT, ITS DIRECTORS, OFFICERS,
PARENT COMPANY, AND, AFFILIATES, TO XCARE.NET OR CLIENT FOR DAMAGES RELATING TO
XCARE.NET'S FAILURE TO PERFORM SERVICES HEREUNDER SHALL BE LIMITED TO AN AMOUNT
EQUAL TO THE TOTAL FEES PAID BY CLIENT TO XCARE.NET WITH RESPECT TO SUCH
SERVICES. NOTWITHSTANDING THE FOREGOING, THE MAXIMUM LIABILITY OF XCARE.NET OR
CLIENT, ITS DIRECTORS, OFFICERS, PARENT COMPANY, AND AFFILIATES, TO CLIENT FOR
DAMAGES FOR ANY AND ALL OTHER CAUSES WHATSOEVER, AND CLIENT OR XCARE.NET'S
MAXIMUM REMEDY, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR
OTHERWISE, SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE TOTAL FEES PAID BY CLIENT
TO XCARE.NET HEREUNDER. IN NO EVENT SHALL XCARE.NET OR CLIENT, ITS DIRECTORS,
OFFICERS, PARENT COMPANY, AND AFFILIATES, LICENSORS, AND SUPPLIERS, BE LIABLE
FOR ANY LOST DATA OR CONTENT, LOST PROFITS, BUSINESS INTERRUPTION OR FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES
ARISING OUT OF OR RELATING TO THE SOFTWARE OR THE SERVICES PROVIDED HEREUNDER,
EVEN IF XCARE.NET OR CLIENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
8. TERM AND TERMINATION
8.1. Term. Subject to this Section 8, the term of this Agreement shall
commence on the Effective Date and continue until terminated by either party
pursuant to Section 8.2 or 8.3 below or as stated in Schedule 2.
8.2. Termination for Cause. This Agreement may be terminated by either
party in the event of
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<PAGE> 8
(i) any material default in, or material breach of, any of the terms and
conditions of this Agreement by the other party, which default continues in
effect after the defaulting party has been provided with written notice of
default and thirty (30) days to cure such default; (ii) the commencement of a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to either party of its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect, that authorizes the
reorganization or liquidation of such party or its debt or the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property; (iii) either party's consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it; or (iv) either
party's making a general assignment for the benefit of creditors; or either
party's becoming insolvent; or either party taking any corporate action to
authorize any of the foregoing.
8.3. Termination for Convenience. This Agreement may be terminated by
either party upon ninety (90) days' advance written notice.
8.4. Effect of Termination. If this Agreement is terminated by
Xcare.net under Section 8.2, while Xcare.net is performing any Development
Services for Client hereunder, Client shall immediately pay Xcare.net all
amounts due and owing for any transaction use or projects already completed by
Xcare.net hereunder or for any third-party products or services purchased by
Xcare.net in Client's behalf. If the Agreement is terminated under Section 8.3
while Xcare.net is performing any Development Services or other services for
Client hereunder, Client shall pay Xcare.net all fees due and owing up to the
effective date of such termination, not to exceed the monthly minimum payment
for services performed to that date. The foregoing shall be without limitation
to Xcare.net's rights and remedies under this Agreement.
8.5. Survival. Sections 3, 5, 7, 8, 9 and 10 shall survive any
termination or expiration of this Agreement; provided, however, that if this
Agreement is terminated by Xcare.net pursuant to Section 8.2 above, then Section
3.2 shall not survive.
9. CONFIDENTIALITY
9.1. Confidential Information. Each party acknowledges that, in
connection with the performance of this Agreement, it may receive certain
confidential or proprietary technical and business information and materials of
the other party ("Confidential Information"). Such Confidential Information may
be subject to applicable Federal and State healthcare information privacy laws
and regulations.
9.2. Confidentiality. Each party hereby agrees: (i) to hold and
maintain in strict confidence all Confidential Information of the other party
and not to disclose it to any third party, except as allowed by law; and (ii)
not to use any Confidential Information of the other party except as permitted
by this Agreement or as may be necessary to perform its obligations under this
Agreement. Each party will use at least the same degree of care to protect the
other party's Confidential Information as it uses to protect its own
Confidential Information of like importance, and in no event shall such degree
of care be less than reasonable care; and (iii) adhere to applicable Federal and
State healthcare information privacy laws and regulations.
9.3. Exceptions. Notwithstanding the foregoing, the parties agree that
Confidential Information will not include any information that: (i) is or
becomes generally known or is or becomes part of the public domain through no
fault of the other party, (ii) the first party authorizes to be disclosed; (iii)
is rightfully received by the other party from a third party without restriction
on disclosure and without breach of this Agreement; or (iv) is known to the
other party on the Effective Date from a source other than the first party, and
not subject to a confidentiality obligation.
9.4. Injunctive Relief. Each party acknowledges that any breach of the
provisions of this
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<PAGE> 9
Section 9 may cause irreparable harm and significant injury to an extent that
may be extremely difficult to ascertain. Accordingly, each party agrees that the
other party will have, in addition to any other rights or remedies available to
it at law or in equity, the right to seek injunctive relief to enjoin any breach
or violation of this Section 9.
10. GENERAL PROVISIONS
10.1. Force Majeure. In the event that either party is unable to
perform any of its obligations under this Agreement or to enjoy any of its
benefits because of any event beyond the control of the affected party
including, but not limited to, natural disaster, acts of God, actions or decrees
of governmental bodies or failure of communication lines (a "Force Majeure
Event"), the party who has been so affected shall promptly give written notice
to the other party and shall use its best efforts to resume performance. Upon
receipt of such notice, all obligations under this Agreement shall be
immediately suspended for the duration of such Force Majeure Event.
10.2. Notice. All notices, demands, requests or other communications
required or permitted under this Agreement will be deemed given when (i)
delivered personally; (ii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iii) one (1) day
after deposit with a commercial overnight carrier, with written verification of
receipt.
10.3. Waiver. Waiver of any breach or failure to enforce any term of
this Agreement shall not be deemed a waiver of any breach or right to enforce
which may thereafter occur. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom enforcement of such
waiver is sought and then only to the extent expressly specified therein.
10.4. Severability. In the event any one or more of the provisions of
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable, the remaining provisions of this Agreement shall be unimpaired
and the parties will substitute a new enforceable provision of like economic
intent and effect.
10.5. Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes thereto, shall be governed by and
construed in accordance with the laws of the State of [Colorado] without
reference to conflict of law principles.
10.6. Assignment. Neither party shall have the right to assign this
Agreement without the prior written consent of the other party; provided, that
either party shall have the right to assign this Agreement to any person or
entity that acquires or succeeds to all or substantially all of such party's
business or assets upon written notice to the other party.
10.7. Publicity. Within a time frame mutually agreed upon by the
parties, the parties shall mutually agree on a joint press release announcing
the existence of this Agreement. Neither party will use the other party's name,
domain name, logo, trademark or service mark in advertising or publicity without
obtaining the other party's prior written consent; provided, however, that
Xcare.net shall have the nonexclusive right and license to use Client's name and
Client Web Site name, including the URL (Uniform Resource Locator) thereto, as a
Client reference, and as part of Xcare.net's client portfolio. Xcare.net shall
also have the right to display its name and logo, as well as a link to the
Xcare.net site, on the Client Web Site(s), and to receive credit as the
developer of the Client Web Site(s), (collectively, the "Credit"). Such Credit
shall appear on the "home page" of the Client Web Site(s), if the "home page" is
redesigned or on those pages designed or significantly changed by Xcare.net in a
position that provides reasonable and appropriate visibility to Xcare.net in
light of industry standards and Client's requirements.
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<PAGE> 10
10.8. Additional Actions and Documents. Each of the parties hereto
hereby agrees to take or cause to be taken such further actions, to execute,
deliver and file or cause to be executed, delivered and filed such further
documents, and will obtain such consents, as may be necessary or as may be
reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement.
10.9. Headings. Section headings contained in this Agreement are
inserted for convenience or reference only, shall not be deemed to be a part of
this Agreement for any other purpose, and shall not in any way define or affect
the meaning, construction or scope of any of the provisions hereof.
10.10. Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, and all
of which, when taken together, shall constitute one and the same instrument.
10.11. Independent Contractors. The relationship of the parties
hereunder shall be that of independent contractors. Nothing herein shall be
construed to constitute a partnership between or joint venture of the parties,
nor shall either party be deemed the agent of the other or have the right to
bind the other in any way without the prior written consent of the other.
10.12. Jurisdiction. All disputes arising out of or relating to this
Agreement shall be submitted to the non-exclusive jurisdiction of the state and
federal courts encompassing Houston, Texas, and each party irrevocably consents
to such personal jurisdiction and waives all objections thereto.
10.13. Regulatory Compliance. Regulatory Compliance. XCare.net
acknowledges Client is a regulated entity that must comply with various state
and federal laws, regulations and directives that could potentially impact this
agreement. XCare.net agrees to fully cooperate with Client in complying with all
state and federal laws, regulations and directives including but not limited to:
HIPAA electronic privacy standards, access of regulators to information,
marketing and advertising guidelines, obtaining necessary regulatory approval
and proper retention of records.
10
<PAGE> 11
SCHEDULE 1
This Schedule describes Services to be provided by Xcare.net to Client under
this Professional Services Agreement dated February 24, 2000. Xcare agrees to,
in good faith and a timely manner, show normal, customary levels of activity as
it relates to development of work to be performed in this Agreement. Client also
agrees to show good faith to provide Xcare, in a timely manner, with requested
documents, material, etc. necessary for the completion of development work.
Functional Specifications: To be completed during `kick-off' meeting.
Deliverables: Phase 1 to include the following as estimated for completion
by 6/1/00:
> Create an eHealth site and strategy encompassing the
goals, philosophy and reputation of MethodistCare.
Provide a platform that enables the ability to do the
following via the web:
o Eligibility Status
o Eligibility Update / Add / Delete (by
Employee with HR approval)
o Claims Status
o PCP Change-routed via email
o ID Card Order-routed via email
o Interactive Provider Directory with Geo
Search (based on zip code / street address)
o Request Marketing / Plan Materials-routed
via email
o Referral Status
o Integration of Wakely Phase I will include
on-line Quote Generation Screens for Small
Group Brokers. This Phase will include a
modest redesign of four basic screens to
make the screens more visually appealing.
> Provide the hardware and facilities to host the above
functionality.
> XCare's Creative Services group will redesign
MethodistCare's website creating a Branded "Point of
Presence" so that no matter the entry point, it will
be clear that the services are provided by
MethodistCare. Site development will include a
re-work for new transactions to be incorporated,
leveraging some existing MethodistCare color and
branding to replicate look and feel. Also, the Home
Page will be re-designed to make the site more
appealing and easier for members and providers to
navigate. This site will be developed with future
functionality in mind.
Phase 2 to include and estimated for completion by 9/1/00:
o On-line Enrollment- Secure pages for
Employer Groups and Individuals to enroll
for coverage. Forms customized based on
product line. Ability to upload a specified
file (i.e.- Excel spreadsheet of all
employees) into the Enrollment forms so they
are pre-populated with that data. While
Enrolling, employees will also have the
ability to select PCP and transfer data onto
the form, as well as view a comparison of
benefits. Enrollment data uploaded into
extensible Care
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<PAGE> 12
system.
o HR Account Management (with ability to
update current enrollment, make changes to
coverage, add dependant, view enrolled
employees, view premium bill, print
enrollment form- data changed/inputted on
screens to feed into eXtensible Care)-
Creation of a secure area where HR
Administrators will feel as though they can
manage their own accounts using many of the
transactions above.
o Benefit Plans / General Product Information-
Displayed for comparison of copays, covered
services, etc.
o Questions and Answers - taken via the site
and sent email to appropriate persons at
MethodistCare for answers. Answer is then
sent back to person via email. Also,
General Q&A (i.e.- What is a copay?)
o Provider Update of Demographic Information-
Allow Providers to update address, phone,
language spoken, etc. Update sent to
Methodist for entry.
o Referral / Pre-Certification Submission-
Allow direct completion and submission of
web based form which will be edited and
input into the Xcare MCIS.
o Medicare Area (updates, enrolled, status)-
Medicare Management area for Medicare
recipients and their dependents.
o Wakely Phase II will include Small Group
Enrollment, display of rates, display of
benefits and submission of Enrollment forms.
This will be linked to Wakely Phase I above.
Acceptance: Per Contract Wording
Fee Schedule: See Attachment 2
Xcare.net and Client Contacts: (Identify key contacts for both parties who
will have involvement/approval authorities
for the project -- Project management,
technical contacts, financial, etc.)
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<PAGE> 13
SCHEDULE 2
Contract Duration: Two Years (3/1/00-2/31/02)
The Monthly Fees listed below contain charges for Development and Transaction
use on a PMPM basis. Hosting charges are then applied at 15% and included in
the PMPM as shown. Monthly Transactions Fees will run for 24 months from an
expected go live date of 6/1/00. This contract is renewable for an additional
period of time on 3/1/02.
CONTRACT PAYMENT PMPM STRUCTURE (BASED ON 85,000 LIVES):
June 1, 2000 - May 31, 2001 (Year 1)
PMPM RATE TIME PERIOD PERCENT OF LIVES MONTHLY FEE
$0.22 June 1 - August 31 * $ *
$0.22 September 1 - November 31 * $ *
$0.22 December 1 - May 31 * $ *
Total Year 1 Minimum Monthly Fees = $182,577
PLEASE NOTE THAT THE MONTHLY CHARGE DURING YEAR 1 ABOVE WILL BE CALCULATED USING
THE ACTUAL PERCENTAGE OF LIVES ACCESSING THE CLIENT TRANSACTIONS MULTIPLIED BY
THE RATE OF $0.22 PMPM OR THE PERCENTAGE OF LIVES CALCULATION AS STATED ABOVE,
WHICHEVER IS GREATER.
June 1, 2001 - May 31, 2002 (Year 2)
MINIMUM MONTHLY FEE (Based on * Lives) $ * MONTHLY HOUSING $ *
Total Minimum Monthly Fees Year 2 = $ *
Total Minimum Annual Fees Year 2 $ * X 12 = $ *
PMPM PRICING SCHEDULE FOR INCREASING LIFE COUNT
LIFE COUNT PMPM HOSTING
100,000-249,999 $ * * of calculated monthly fee
250,000-499,999 $ * * of calculated monthly fee
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
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<PAGE> 14
The fees listed below contain charges for Development.
- -- Web enabled Transactions and Customization as referenced in Schedule 1
above:
Phase I $ * (Due 3/00)
Phase II $ * (Due 6/00)
Website Re-design $ * (Due 3/00)
TOTAL FOR DEVELOPMENT AND IMPLEMENTATION $ *
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
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<PAGE> 15
XCARE.NET *"CLIENT"
By: /s/ PETER H. CHEESBROUGH By: /s/ M. JAMES HENDERSON
---------------------------- ----------------------------
Peter H. Cheesbrough M. James Henderson
- -------------------------------- ---------------------------------
Printed Name Printed Name
Sr. VP Finance & CEO President & CEO
- -------------------------------- ---------------------------------
Title Title
2-28-00 2-24-00
- -------------------------------- ---------------------------------
Date Date
15
<PAGE> 1
AGREEMENT RE: ENGAGEMENT FOR
DEVELOPMENT SERVICES
This AGREEMENT RE: ENGAGEMENT FOR DEVELOPMENT SERVICES (this
"Agreement") is made this 29th day of February, 2000, by and between NotifyMD,
Inc., a Delaware corporation ("NotifyMD") and wholly-owned subsidiary of Ring
Medical, Inc., a Delaware corporation ("RMI"), and XCare.net, Inc., a
Delaware corporation ("XCare.net"). The parties hereto agree as follows:
1. Development Services.
(a) Generally. XCare.net will begin work upon the effective
date of this agreement developing solutions for NotifyMD as outlined in the
"Functional Specification." NotifyMD agrees to engage XCare.net a minimum
number of 1,000 hours at a rate for such services of $ * per hour. The
parties hereto agree to negotiate in good faith toward the execution of an
agreement calling for XCare.net to provide certain development services to
NotifyMD as described within the "Functional Specification" (a "Development
Services Agreement").
(b) Additional Agreements for XCare.net Solutions. The
parties hereto agree to consider in good faith the engagement of XCare.net by
NotifyMD for the provision of additional XCare.net solutions as further
described in the "Functional Specification," as well as other future releases
and projects.
(c) Time. Provided that the Development Services Addendum is
executed within seven (7) days of the date hereof, the Development Services
Addendum will require completion of the work described in the initial schedule
thereto no later than May 1, 2000.
2. Compensation. The Development Services Agreement will provide for
payment by NotifyMD to Xcare.net of:
(a) a fee of $ * per hour to be invoiced by Xcare.net
on a monthly basis for hours actually worked by
Xcare.net, which payment shall be due within 30 days
of NotifyMD's receipt of such invoice; and
(b) additional reimbursement for all necessary or
appropriate expenses incurred by XCare.net in the
performance of its duties under this Agreement,
provided that XCare.net submits reasonable
verification of such expenses to NotifyMD.
3. Confidential Information and Trade Secrets.
3.1 XCare.net recognizes that XCare.net's engagement by
NotifyMD requires considerable responsibility and trust, and, in reliance on
XCare.net's loyalty, NotifyMD will entrust XCare.net with highly sensitive
confidential, restricted and proprietary information involving Trade Secrets
and Confidential Information (as such terms are hereinafter defined).
3.2 For purposes of this Agreement, a "Trade Secret" is any
scientific or technical information, design, process, procedure, formula or
improvement that is valuable and not generally known to competitors of NotifyMD
or RMI. "Confidential Information" is any data or information, other than Trade
Secrets, that is important, competitively sensitive, and not generally known by
the public, including, but not limited to, NotifyMD's and RMI's business plans,
business prospects, customer lists, training manuals, product development
plans, bidding and pricing procedures, market strategies,
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
<PAGE> 2
internal performance statistics, financial data, confidential personnel
information concerning employees of NotifyMD and RMI, supplier data,
operational or administrative plans, policy manuals, and terms and conditions
of contracts and agreements. The terms "Trade Secret" and "Confidential
Information" shall not apply to information which is (i) received by XCare.net
from a third party with no restriction on disclosure, (ii) XCare.net's own
Trade Secrets and Confidential Information or (iii) required to be disclosed by
applicable law.
3.3 XCare.net will not use or disclose any Trade Secrets or
Confidential Information of NotifyMD or RMI during the term of this Agreement
or any subsequent agreement with NotifyMD or RMI, whether pursuant to this
Agreement or otherwise, at any time after the termination or expiration of this
Agreement or any subsequent agreement with NotifyMD or RMI or prior to such
time as they cease to be Trade Secrets or Confidential Information though no
intentional or negligent act or failure to act by XCare.net in violation of
this Agreement or otherwise.
3.4 Upon the request of NotifyMD or RMI, XCare.net will
surrender to NotifyMD or RMI all memoranda, notes, records, manuals or other
documents pertaining to NotifyMD's or RMI's businesses (including all copies
thereof) and all materials involving any Trade Secrets or Confidential
Information of NotifyMD or RMI.
4. Termination
(a) At any time prior to the execution of the Development
Services Agreement, either party may terminate this Agreement by giving the
other party written notice thereof. Upon termination, neither party shall have
a further obligation to the other, except as set forth in Section 3 hereof.
5. Notices. Any notice or other communication under this Agreement
shall be in writing, signed by the party making the same, and shall be
delivered personally or sent by certified mail, postage prepaid, return receipt
requested or sent by a nationally recognized overnight courier or delivery
service, addressed as follows:
<TABLE>
<S> <C> <C>
(a) If to XCare.net: XCare.net, Inc.
6400 S. Fiddler's Green Circle Suite 14000
Englewood, CO 80111
Attention: Peter Cheesbrough, CFO
or to such other address as may be furnished by XCare.net to NotifyMD in writing.
(b) If to NotifyMD: NotifyMD, Inc.
301 Plus Park Boulevard
Nashville, TN 37217
Attention: Gary Ferguson, President
With a copy to: Waller Lansden Dortch & Davis,
A Professional Limited Liability Company
2100 Nashville City Center
511 Union Street
Nashville, Tennessee 37219
Attention: Ralph W. Davis, Esq.
</TABLE>
or to such other address as may be furnished by NotifyMD to XCare.net. All
such notices shall be deemed given on the date personally delivered, mailed or
couriered.
2
<PAGE> 3
6. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Colorado.
7. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
one or more of the provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability for any such provisions in every other respect and of the
remaining provisions of this Agreement shall not be in any way impaired.
8. Modification. No waiver or modification of this Agreement or of any
covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith and no evidence
of any waiver or modification shall be offered or received in evidence of any
proceeding, arbitration or litigation between the parties hereunder, unless
such waiver or modification is in writing, duly executed as aforesaid and the
parties further agree that the provisions of this section may not be waived
except as herein set forth.
9. Entire Agreement. This Agreement, including all exhibits hereto~
contains the entire agreement of the parties hereto with respect to the subject
matter contained herein. There are no restrictions, promises, covenants or
undertakings, other than those expressly set forth herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter. This Agreement may not be changed except by a
writing executed by the parties.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the day and year first above written.
NOTIFYMD, INC.
By: /s/ GARY B. FERGUSON
--------------------------
Its: CEO and President
-------------------------
XCARE.NET, INC.
By:
--------------------------
Its:
-------------------------
3
<PAGE> 1
DEVELOPMENT SERVICES AGREEMENT
This Development Services Agreement (the "Agreement") is entered into as of
March 31, 2000 (the "Effective Date") by and between XCare.net, a Delaware
corporation with offices at 6400 S. Fiddler's Green Circle, Englewood, CO 80111,
("XCare.net"), and Lamar.com, Inc., a Delaware corporation with offices at 156
W. 56th Street, New York, NY 10019 ("Client").
This Agreement covers the purchase and license of consulting, development
and other services from XCare.net, pursuant to orders placed by Client and
accepted by XCare.net after the Effective Date.
This Agreement includes the following attachments, which are incorporated
herein by this reference:
Attachment 1 XCare.net Development Services
Any notice required or permitted under this Agreement will be in writing
and delivered to the address set forth below, or to such other notice address as
the other party has provided by written notice.
THIS AGREEMENT, INCLUDING THE ATTACHMENTS LISTED ABOVE, CONSTITUTES THE
COMPLETE AND EXCLUSIVE UNDERSTANDING OF THE PARTIES WITH REFERENCE TO THE
SUBJECT MATTER HEREOF, AND SUPERSEDES ALL PRIOR SALES PROPOSALS, NEGOTIATIONS,
AGREEMENTS AND OTHER REPRESENTATIONS OR COMMUNICATIONS, WHETHER ORAL OR WRITTEN.
IF THERE IS ANY CONFLICT BETWEEN THE TERMS AND CONDITIONS OF CLIENT'S PURCHASE
ORDER (OR ANY OTHER PURCHASE OR SALES DOCUMENT) AND THE TERMS AND CONDITIONS OF
THIS AGREEMENT, THIS AGREEMENT SHALL CONTROL. THIS AGREEMENT MAY BE MODIFIED,
REPLACED OR RESCINDED ONLY IN WRITING, AND SIGNED BY A DULY AUTHORIZED
REPRESENTATIVE OF EACH PARTY.
AGREED:
XCare.net Client: Lamar.com, Inc.
- --------------------------------- ---------------------------------
- --------------------------------- ---------------------------------
By: /s/ PETER CHEESBROUGH By: /s/ ERIC MCAFEE
---------------------------- ----------------------------
(Authorized Signature) (Authorized Signature)
Peter Cheesbrough - Senior Vice Eric McAfee, Vice President
President and Chief Financial ---------------------------------
Officer (Printed Name and Title)
- ---------------------------------
(Printed Name and Title)
<PAGE> 2
ATTACHMENT 1
XCARE.NET DEVELOPMENT SERVICES
ARTICLE I
DEFINITIONS
"Client Web Site(s)" shall mean the so-called "web page" site or sites on
the World Wide Web, for the public Internet or for corporate intranets or
extranets, to be developed or serviced by XCare.net hereunder, as identified in
the appropriate Schedule(s).
"Content" shall mean marketing collateral, data, text, audio files, video
files, graphics and other materials provided by Client or developed hereunder
for use with the Client Web Site, but excluding the XCare.net Software.
"Development Services" shall mean design, development, and set-up services
as necessary to modify existing XCare.net technology, trade secrets and
know-how to produce the XCare.net Software and/or Modified XCare.net Software
and other elements of the Client Web Site, and/or any other consulting services
rendered hereunder as identified in the appropriate schedules ("Schedule(s)")
attached hereto.
"Liquidation" shall mean (i) the commencement by XCare.net or any of its
subsidiaries of a voluntary case or other proceeding seeking liquidation,
winding-up, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency, moratorium or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or has consented to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or has made a general assignment for the
benefit of creditors or (ii) an involuntary case or other proceeding has been
commenced against the XCare.net or any of its subsidiaries seeking liquidation,
winding-up, reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency, moratorium or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of sixty (60) days, or an order for relief has been entered against
the XCare.net under the federal bankruptcy laws as now or hereafter in effect.
"Modified Content" shall have the meaning ascribed to such term in Section
3.1(a).
"Modified XCare.Net Software" shall have the meaning ascribed to such term
in Section 3.1(a).
"XCare.net Software" shall mean all pre-existing computer program code
developed by XCare.net that are delivered by XCare.net to Client pursuant to
this Agreement.
<PAGE> 3
Such XCare.net Software shall be provided in object code form unless the parties
mutually agree in writing to delivery of source code.
ARTICLE II
SERVICES
2.1 DEVELOPMENT SERVICES.
XCare.net shall render Development Services in accordance with the
requirements set forth in Schedules attached hereto. Each Schedule for new
services shall be successively numbered (e.g., 1,2, etc.). Each schedule shall
be executed by the parties and shall be subject to the terms and conditions of
this Agreement. XCare.net shall provide qualified and trained personnel to
render such Development Services and shall use commercially reasonable efforts
to meet the delivery schedule set forth in the applicable Schedules. In the
event that XCare.net fails to provide the Delivery Services in accordance with
the terms of this Agreement of any Schedule hereto, the delivery schedule shall
be extended by the number of days that delivery of the Development Services was
delayed, unless Client notifies XCare.net that this extension will not rectify
Client's business interruption resulting from XCare.net's delay in which case
such delay may result in XCare.net's credit to the account of Client in an
amount to be mutually agreed upon between XCare.net and Client, in which case
the parties shall mutually agree upon a new schedule for provisions of
Development Services at XCare.net's expense. Any additions, deletions or other
changes to a Schedule shall be mutually agreed to in writing in advance by both
parties and shall be memorialized in a revised Schedule pursuant to the
procedure set forth in Section 2.6 below for Change Orders. All services shall
be performed at XCare.net's offices unless otherwise agreed by the parties. In
the event that services are performed at Client's location or at a location
designated by Client for its operations. Client shall provide XCare.net at no
charge with all necessary facilities and equipment, including without
limitation, computer time on Client's computers and office space, sufficient to
render the services contemplated hereunder. Client shall deliver to XCare.net
all Content selected by Client for incorporation into any Client Web Site in
digitized format in accordance with the delivery schedule set forth in the
applicable Schedule(s). In the event that Client fails to deliver the Content in
accordance with the delivery schedule, the development schedule shall be
extended by the number of days that delivery of the Content was delayed, unless
XCare.net notifies Client that this extension will not rectify XCare.net's
scheduling interruption resulting from Client's delay in which case such delay
may also result in additional charges to Client in an amount to be mutually
agreed upon between XCare.net and Client, in which case the parties shall
mutually agree upon a new delivery schedule and fees with respect to the
rendition of the Development Services.
2.2 ACCEPTANCE OF DELIVERABLES.
Within thirty (30) days after the delivery to Client of any deliverable
pursuant to any Schedule, Client shall provide XCare.net with written notice of
any failure of any deliverable to materially conform to the functional
specifications set forth in the applicable Schedule. XCare.net and Client shall
review the objections, and XCare.net will use commercially
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reasonable efforts to correct any material non-conformities with the functional
specifications and provide Client with a revised deliverable within thirty (30)
days. Client shall have deemed to have accepted the deliverable if XCare.net
does not receive written notice of Client's objections within said thirty (30)
day period.
2.3 DOMAIN NAME REGISTRATION SERVICES.
If domain name registration services are included in the Schedule,
XCare.net shall use commercially reasonable efforts to assist Client in
registering an Internet domain name selected by Client. Client will be solely
responsible for all out-of-pocket costs and all legal clearances regarding name
selection and registration.
2.4 MAINTENANCE SERVICES.
If Client desires to purchase maintenance services from XCare.net for the
Client Web Site, the parties shall execute the then current XCare.net
Maintenance Services Agreement (a sample of which is attached hereto) and
XCare.net shall render maintenance services pursuant to the terms and conditions
of such agreement; provided however, that the rates contained in such
Maintenance Service Agreement (i) for the first twelve (12) months following the
date of this Agreement shall not increase, (ii) for the next twelve (12) months,
shall not increase more than the Consumer Price Index in effect at the beginning
of such twelve month period and (iii) thereafter at a rate mutually agreed upon
by XCare.net and Client.
2.5 HOSTING SERVICES.
If Client desires to purchase hosting services from XCare.net for the
Client Web Site, the parties shall execute the then current XCare.net Hosting
Services Agreement, and XCare.net shall render hosting services pursuant to the
terms and conditions of such agreement.
2.6 CHANGE ORDERS.
If Client desires to make changes to an existing Schedule, the parties
shall mutually agree upon an additional or revised Schedule for each new Change
Order. Each such Schedule shall be successively numbered (e.g., 1.A, 1.B,
etc.) and shall be executed by the parties. Any revised Schedule(s) shall be
subject to the terms and conditions of this Agreement.
ARTICLE III
OWNERSHIP AND LICENSE RIGHTS
3.1 PROPERTY RIGHTS AND OWNERSHIP.
(a) The Client Web Site(s) and all other results and proceeds of
XCare.net's services hereunder, shall consist of, and shall operate in
conjunction with, multiple elements of intellectual property, including without
limitation the XCare.net Software and the Client Content. The parties'
respective rights to such elements shall be as set forth below. For purposes of
this Agreement, the term "ownership" shall refer to ownership of all
intellectual property rights
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including, but not limited to, all patent, copyright, trade secret and trademark
rights, as applicable, with respect to the subject intellectual property.
<TABLE>
<CAPTION>
- ------------------------------------------ -----------------------------
INTELLECTUAL PROPERTY ELEMENTS OWNERSHIP/RIGHTS
- ------------------------------------------ -----------------------------
<S> <C>
Client Content, including all enhancements Client has sole ownership.
of, modifications to and derivative works
created from Client Content by XCare.net
("Modified Content") and HTML files that
contain Client Content, and modifications
to Content as a result of Client's usage of
self-authoring tools.
- ------------------------------------------ -----------------------------
Content created for Client by XCare.net and Client has sole ownership.
accepted and paid for by Client, as well as
commissioned Content authored by third
parties specifically for use in connection
with this Agreement and paid for by Client
(e.g., original illustrations or graphics).
- ------------------------------------------ -----------------------------
Domain name for Client Web Site. Client has sole ownership.
- ------------------------------------------ -----------------------------
Server usage report data/statistics Client has sole ownership of
generated by the XCare.net Software data/statistics, and XCare.net
in form and substance as set forth in shall be granted a limited
the applicable Schedule or as mutually license pursuant to Section
agreed by the parties. 3.3 below.
- ------------------------------------------ -----------------------------
Commercially available third-party software Third parties have ownership,
that is incorporated into the XCare.net and Client shall be informed
Software. of all third-party software
that Client may need to
license at Client's own
expense.
- ------------------------------------------ -----------------------------
XCare.net Software developed by or for XCare.net has sole ownership
XCare.net in connection with this of such XCare.net Software.
Agreement for Client which does not Client shall be granted a
incorporate, utilize or borrow concepts license to use the XCare.net
in any manner from Client Content or Software as set forth in
Modified Content. Section 3.2.
- ------------------------------------------ -----------------------------
XCare.net Software developed by or for Client has sole ownership of
XCare.net in connection with this of such Modified XCare.net
Agreement for Client which does Software. XCare.net shall be
incorporate, utilize or borrow concepts granted a limited license to
from Client Content or Modified Content use such Modified XCare.net
("Modified XCare.net Software"). Software as set forth in
Section 3.3.
- ------------------------------------------ -----------------------------
XCare.net supplied material developed XCare.net has sole ownership
generally to support XCare.net products of such developed material.
and/or service offerings (e.g. httpd Client shall be granted a
configuration). license to use the XCare.net
Software as set forth in
Section 3.2 below.
- ------------------------------------------ -----------------------------
</TABLE>
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(b) It is the intention of the parties that Client retain all ownership
interests in the Content, the Modified Content and the Client Web Site, as
applicable. XCare.net shall have no right, title or interest in the Content or
the Modified Content, except for the license to use the Content or the Modified
Content as provided herein. The Client shall be the sole and exclusive owner of
the copyrightable aspects of the graphical user interface of the Client Web
Site, the name of the Client Web Site, all URLs for the Client Web Site and all
information obtained from visitors to the Client Web Site. In addition, all
Modified Content shall be deemed to be works made for hire, in accordance with
the copyright laws of the United States under the direction and control of
Client. Client shall be the proprietor of the Modified Content and all right,
title and interest therein throughout the world including, without limitation,
the copyright and all rights under the copyright therein. To the extent that it
is determined that any aspect of the Modified Content does not qualify as a work
made for hire within the meaning of the copyright laws of the United States,
then XCare.net shall be deemed to have hereby irrevocably transferred and
assigned to Client all of its right, title and interest, throughout the world
and in perpetuity, in and to the Modified Content, including without limitation
all of its right, title and interest in copyright, and all rights under
copyright therein including but not limited to all renewals and extensions
thereof, reverted copyrights and rights of copyright reversion, all applications
and registration materials therefor, and all rights to recover for prior
infringements relating to the Modified Content, free of any claim by XCare.net
or any other person or entity.
(c) It is the intention of the parties that Client retain all ownership
interests in the Modified XCare.net Software. Accordingly, XCare.net shall
deliver the Source Code (as defined below) to Client for the Modified XCare.net
Software in which the Client shall have the sole, indefeasible proprietary
interest. XCare.net shall have no right, title or interest in or to the Modified
XCare.net Software or the Source Code, except for the license to use the
Modified XCare.net Software as provided herein. All Modified XCare.net Software
shall be deemed to be works made for hire, in accordance with the copyright laws
of the United States under the direction and control of Client. Client shall be
the proprietor of the Modified XCare.net Software and all right, title and
interest therein throughout the world including, without limitation, the
copyright and all rights under the copyright therein. To the extent that it is
determined that any aspect of the Modified XCare.net Software does not qualify
as a work made for hire within the meaning of the copyright laws of the United
States, then XCare.net shall be deemed to have hereby irrevocably transferred
and assigned to Client all of its right, title and interest, throughout the
world and in perpetuity, in and to the Modified XCare.net Software, including
without limitation all of its right, title and interest in copyright, and all
rights under copyright therein including but not limited to all renewals and
extensions thereof, reverted copyrights and rights of copyright reversion, all
applications and registration materials therefor, and all rights to recover for
prior infringements relating to the Modified XCare.net Software, free of any
claim by XCare.net or any other person or entity.
For purposes of Section 3.1(c) the term "Source Code" shall mean all or any part
of the machine-readable (but including transcriptions or other representations
thereof, in tangible or intangible form, and on any media whatsoever),
uncompiled (but otherwise regardless of format) instruction set, the totality of
which permits operation of the Modified XCare.net Software.
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<PAGE> 7
3.2 LICENSE TO CLIENT.
XCare.net grants Client a non-exclusive, non-transferable license to use
the XCare.net Software on a single computer in object code version only to
operate and display the Client Web Site in order for end users to access the
Client Web Site; provided, however, that Client, with the consent of XCare.net,
which consent shall not be unreasonably withheld, shall be able to utilize the
XCare.net Software on multiple computers at different locations (i.e., "mirror
sites") to handle heavy or increased volume on the Client Web Site. If the
XCare.net Software is not developed for use on a Client Web Site, then the
foregoing license shall constitute a non-exclusive, non-transferable license to
use the XCare.net Software on a single computer in object code version only for
Client's internal business needs. Client may transfer the XCare.net Software to
a different computer so long as the XCare.net Software is not retained on the
prior computer on which it was initially installed other than as a permitted
backup copy. Client may grant a sublicense to a third party that Client engages
to host the Client Web Site; provided, that such third party agrees in writing
to be bound by the license and confidentiality restrictions set forth in this
Agreement. Client is prohibited from duplicating and/or distributing any
XCare.net Software without the prior written consent of XCare.net; provided,
however that Client may copy the XCare.net Software only as needed for
reasonable ordinary backup or disaster recovery procedures. Client may use the
backup copies only if the installed copy is lost or destroyed or the hardware on
which the installed copy is installed becomes inoperable, provided that the use
of said backup copies is discontinued immediately when the original hardware
becomes operable.
3.3 LICENSE TO XCare.net.
Client grants XCare.net a limited, non-exclusive, non-transferable license
(i) to use, copy, and modify the Content in connection with XCare.net's
performance of the Development Services, (ii) to use, copy, modify, distribute
and display server usage data and statistics generated by the XCare.net Software
and (iii) to use, copy and modify the Modified XCare.net Software; provided,
however, that XCare.net shall not use in any manner the Modified XCare.net
Software with any person other than Client without the express written consent
of Client which consent shall not be unreasonably withheld.
3.4 SOURCE CODE ESCROW.
At the expense of Client, within thirty (30) days of the date hereof,
XCare.net shall deliver to Client in escrow, a fully commented and documented
copy of the source code for the XCare.net Software (the "XCare.net Source
Code"), a listing thereof and all relevant commentary, including explanation,
flow charts, algorithms and subroutine descriptions, memory and overlay maps and
other documentation of the XCare.net Source Code (the "Commentary") together
will all necessary codes, keys and all similar types of access information in
order to access all such XCare.net Source Code and to customize, modify, and
manipulate the related software programs. Client shall deposit materials in a
secure, environmentally safe, locked facility which is accessible only to
authorized representatives of the Client. Client shall have the obligation to
use its best efforts to protect and maintain the confidentiality of the deposit
materials. Client shall not disclose, transfer, make available, or use the
deposit materials and shall not disclose the contents of the deposit material to
any third party
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<PAGE> 8
or to any unauthorized personnel. Upon the occurrence of a Liquidation,
XCare.net shall grant to Client a perpetual, non-exclusive, non-transferable,
limited license to use and copy the XCare.net Source Code, and to create
derivative works therefrom, thirty (30) days from such Liquidation. Client will
acknowledge and agree that such license shall not commence unless and until such
Liquidation occurs, and Client shall have no right to use the XCare.net Source
Code unless and until the occurrence and continuance of such Liquidation. If
XCare.net corrects any defects in, or provides any revision to, the XCare.net
Software hereunder, XCare.net shall simultaneously furnish the escrow agent with
a corrected or revised copy of such XCare.net Source Code, a revised listing
thereof, and revised Commentary. Without limiting the generality of this Section
3.4, it is the intention of the parties that Client shall have a license to use,
copy, modify, and maintain the XCare.net Source Code and related documentation
for the specific application for which it was granted hereunder in the event of
escrow release pursuant to this provision, such that Client shall be a licensee
of the XCare.net Source Code, which the parties agree and acknowledge
constitutes intellectual property as defined by Section 101(35A) of the United
States Bankruptcy Code, and be entitled to all the benefits granted to software
licensees under the provisions of the United States Bankruptcy Code including,
without limitation, Section 365(n) of Title 11 of the U.S. Code (11 U.S. 365(n).
3.5 SUPPORTING DOCUMENTS.
Each party agrees to execute any additional documents deemed reasonably
necessary to effect and evidence the other party's rights with respect to the
intellectual property elements set forth above.
3.6 NO REVERSE ENGINEERING.
(a) Client may not reverse engineer, reverse assemble, decompile or
otherwise attempt to derive the source code from the XCare.net Software.
(b) XCare.net may not reverse engineer, reverse assemble, decompile or
otherwise attempt to derive the source code from the Modified XCare.net Software
3.7 PROPRIETARY NOTICES.
All copies of the XCare.net Software and other XCare.net supplied materials
used by Client shall contain copyright and other proprietary notices
(appropriately placed) in the same manner in which XCare.net incorporates such
notices in the XCare.net Software or in any other manner requested by XCare.net.
Client agrees not to remove, obscure or obliterate any copyright notice,
trademark or other proprietary rights notices placed by XCare.net on or in the
XCare.net Software.
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<PAGE> 9
ARTICLE IV
PAYMENT
4.1 DEVELOPMENT SERVICES.
Subject to the provisions of Section 4.6, in consideration for the
performance of the Development Services, Client shall pay to XCare.net the
amounts set forth in the applicable Schedule, on the payment dates set forth in
such Schedule. In the event that XCare.net renders services at Client's location
or any other location designated by Client for its operations, Client shall pay
the reasonable travel, living and related expenses for XCare.net personnel
rendering services at Client's location or any other location designated by
Client or its operations. All services hereunder shall be rendered on a time and
materials basis. All work will be billed at XCare.net's standard hourly rates,
which rates may be revised from time to time by XCare.net, in its sole
discretion, upon advance written notice to Client; provided however, that such
rates shall not be increased for a period of eighteen (18) months from the date
hereof. Amounts set forth in the applicable Schedule represent an estimate of
the hours required to complete the work outlined in such Schedule; in the event
that actual hours incurred to complete the work exceed those included in the
estimate, XCare.net and Client will mutually-determine the additional hours that
will be billed at XCare.net's standard hourly rates.
4.2 MAINTENANCE SERVICES.
If the parties have entered into a XCare.net Maintenance Services
Agreement, Client shall pay XCare.net the amounts set forth in said Maintenance
Services Agreement.
4.3 HOSTINGS SERVICES.
If the parties have entered into a XCare.net Hosting Services Agreement,
Client shall pay XCare.net the amounts set forth in said Hosting Services
Agreement.
4.4 TAXES.
In addition to the fees due as specified above, Client shall pay any and
all federal, state and local sales, use, value added, excise, duty and any other
taxes of any nature assessed upon or with respect to the license granted
hereunder, arising from this Agreement, except that taxes on XCare.net's income
shall be the sole responsibility of XCare.net.
4.5 PAYMENTS.
All payments made pursuant to this Agreement shall be made in U.S. Dollars
are due thirty (30) days from the date of invoice. Late payments shall bear
interest at one and one-half percent (1.5%) per month or the maximum rate
permitted by law, whichever is less. Notwithstanding anything to the contrary
contained herein, no payments by Client shall be due and payable prior to (i)
the closing of Client's Series A Preferred Stock financing of at least
$ * and (ii) the entering into of definitive documentation relating to an
agreement between Client and Nursefinders, Inc. for provision of varied
collateral, data and other items to
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
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<PAGE> 10
be mutually agreed upon between such parties; provided, however, that in no
event shall such period be longer than five (5) months from the date hereof.
ARTICLE V
LIMITED WARRANTY
5.1 SOFTWARE WARRANTY.
Subject to the limitations set forth in this Agreement, XCare.net warrants
only to Client that the XCare.net Software furnished hereunder when properly
installed, properly used and unmodified by Client in any material manner, will
substantially conform to the functional specifications set forth in the
applicable Schedule. XCare.net's warranty shall extend for a period of ninety
(90) days from the date that the final deliverables specified in each Schedule
are delivered to Client ("Warranty Period"). XCare.net's sole responsibility
under this Section 5.1 shall be to use commercially reasonable efforts to
promptly correct material errors, or at XCare.net's option, to refund Client's
fees paid for the XCare.net Software after deinstallation (which shall be at
XCare.net's sole expense) and return thereof. All warranty claims not made in
writing or not received by XCare.net within the Warranty Period shall be deemed
waived. XCare.net's warranty obligations are solely for the benefit of Client,
who has no authority to extend or transfer this warranty to any other person or
entity.
5.2 XCARE.NET DOES NOT WARRANT THAT THE USE OF THE XCARE.NET SOFTWARE WILL BE
UNINTERRUPTED OR ERROR FREE. EXCEPT FOR THE EXPRESS WARRANTIES STATED ABOVE,
XCARE.NET DOES NOT MAKE ANY WARRANTY AS TO THE XCARE.NET SOFTWARE OR THE
SERVICES PROVIDED HEREUNDER OR THE RESULTS TO BE OBTAINED FROM USE OF THE
XCARE.NET SOFTWARE. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH ABOVE, THE
XCARE.NET SOFTWARE IS USED AND THE SERVICES ARE PROVIDED ON AN "AS-IS" BASIS
WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
USE WITH RESPECT TO THE INTERNET OR USE OF INFORMATION IN CONNECTION WITH THE
SOFTWARE.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
6.1 XCARE.NET.
(a) Representations and Warranties. XCare.net hereby represents and
warrants that:
(i) it has the full right, power and authority to enter into this
Agreement;
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(ii) this Agreement is the legal, valid and binding obligation of
XCare.net, enforceable against it in accordance with its terms, subject to
any applicable bankruptcy, reorganization, insolvency or any other laws
affecting creditor's rights generally or by general principles of equity;
and
(iii) the execution, delivery and performance of this Agreement shall
not conflict with or violate in any way any other agreement or other
arrangement with any third party and shall not violate any third party's
intellectual property rights.
(b) Indemnification. XCare.net shall indemnify, defend and hold harmless
Client, its officers, directors, agents and affiliates (the "Client Indemnified
Persons") from and against any and all claims, actions, damages, losses, costs,
liabilities and expenses (including without limitation, reasonable attorneys'
fees) sustained or incurred by the Client Indemnified Persons as a consequence
of (i) any third party claim, demand, assessment, judgment, order, decree,
action, cause of action, litigation, suit or other proceeding (a "Claim")
brought against the Client Indemnified Persons that the XCare.net Software
and/or the Modified XCare.net Software infringes any person's intellectual
property rights (including, without limitation, copyrights, patents, trade
secrets, trademarks, trademarks, etc.), (ii) any third party Claim brought
against the Client Indemnified Persons relating to the Development Service
provided by XCare.net of the Client Web Site, (iii) any misrepresentation or
breach of the representations and warranties of XCare.net made in this Agreement
or (iv) the nonfulfillment or breach of any covenants or agreements of XCare.net
provided in this Agreement; provided, however, that in each case (A) XCare.net
is given prompt notice of, and shall be given the opportunity to undertake and
conduct the defense of, any such claim, (B) the Client shall cooperate fully
with XCare.net in all material respects with any such defense and all related
settlement negotiations, (C) Client provides XCare.net with all reasonably
necessary assistance, information and authority to perform the foregoing at
XCare.net's expense and (D) XCare.net shall keep the Client fully advised of all
significant developments and shall not enter into a settlement of any claim on
behalf of the Client without the Client's prior written approval, which approval
shall not be unreasonably withheld.
(c) Limitations on Indemnification.
(i) XCare.net shall have no liability for any claim of infringement
pursuant to clause (a)(i) and (a)(ii) based on (i) use by Client of other
than the current update (which current update has been provided to Client)
of the XCare.net Software as long as such infringement would have been
avoided by uses of the current update provided to Client; (ii)
modifications, adaptations or changes to the XCare.net Software or
Modified XCare.net Software not made by XCare.net which such modifications,
adaptations or changes have caused such infringement, (iii) the combination
or use of the materials furnished hereunder with materials not furnished by
XCare.net if such infringement would have been avoided by use of the
XCare.net materials alone or (iv) Modified XCare.net Software which
infringement was solely a result of the addition of Content or Modified
Content. In the event the XCare.net Software is held to, or XCare.net
believes is likely to be held to, infringe the intellectual property rights
of a third party, XCare.net shall have the right at its sole option and
expense to (i) substitute or modify the XCare.net Software so that it is
non-infringing and qualitatively and functionally equivalent to the
XCare.net Software; (ii) obtain for Client a license to continue using the
XCare.net
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Software; or if neither (i) nor (ii) is commercially reasonable, XCare.net
shall have the right to terminate this Agreement immediately upon written
notice to Client, and XCare.net shall make immediate payment to Client of
an amount equal to the fees paid for the XCare.net Software and Development
Services.
(ii) XCare.net shall have no liability for any claim of
indemnification pursuant to clause (a)(iv) based on (i) any negligent act
or omission on the part of Client or (ii) Client's failure to comply with
its obligations hereunder.
6.2 CLIENT.
(a) Representations and Warranties.
(i) it has the full right, power and authority to enter into this
Agreement;
(ii) this Agreement is the legal, valid and binding obligation of
Client, enforceable against it in accordance with its terms, subject to any
applicable bankruptcy, reorganization, insolvency or any other laws
affecting creditor's rights generally or by general principles of equity;
and
(iii) the use of Content as contemplated herein shall not infringe the
copyright, trademark or other intellectual property rights of any party, or
constitute defamation, invasion of privacy, or the violation of any right
of publicity or any other right of any party.
(b) Indemnification. Client shall indemnify, defend and hold harmless
XCare.net, its officers, directors, agents and affiliates (the "XCare.net
Indemnified Persons") from and against any and all claims, actions, damages,
losses, costs, liabilities and expenses (including without limitation,
reasonable attorneys' fees) sustained or incurred by the XCare.net Indemnified
Persons as a consequence of (i) any third party Claim brought against the
XCare.net Indemnified Persons relating to the Content or Modified Content, (ii)
any third party Claim brought against the XCare.net Indemnified Persons relating
to the Modified XCare.net Software, (iii) any misrepresentation or breach of the
representations and warranties of the Client made in this Agreement or (iv) the
nonfulfillment or breach of any covenants or agreements of the Client provided
in this Agreement; provided, however, that in each case (A) the Client is given
prompt notice of, and shall be given the opportunity to undertake and conduct
the defense of, any such claim, (B) XCare.net shall cooperate fully with the
Client in all material respects with any such defense and related settlement
negotiations, (C) Client provides XCare.net with all reasonably necessary
assistance, information and authority to perform the foregoing at Client's
expense and (D) the Client shall keep XCare.net fully advised of all significant
developments and shall not enter into a settlement of any claim on behalf of
XCare.net without XCare.net's prior written approval, which approval shall not
be unreasonably withheld.
(c) Limitations on Indemnification.
(i) Client shall have no liability for any claim of infringement
pursuant to clause (a)(i) and (a)(ii) based on Modified XCare.net Software
which infringement was not due to the addition of Content of Modified
Content. In the event the Modified
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XCare.net Software is held to, or Client believes is likely to be held to,
infringe the intellectual property rights of a third party, Client shall
have the right at its sole option and expense to (i) substitute or modify
the XCare.net Software so that it is non-infringing and qualitatively and
functionally equivalent to the XCare.net Software; (ii) obtain for
XCare.net a license to continue using the XCare.net Software; or if
neither (i) nor (ii) is commercially reasonable, Client shall have the
right to terminate this Agreement immediately upon written notice to
Client, and XCare.net shall make immediate payment to Client of an amount
equal to the fees paid for the XCare.net Software and Development Services.
(ii) Client shall have no liability for any claim of indemnification
pursuant to clause (a)(iv) based on (i) any negligent act or omission on
the part of XCare.net or (ii) XCare.net's failure to comply with its
obligations hereunder.
ARTICLE VII
LIMITATIONS ON LIABILITY
EXCEPT IN CONNECTION WITH SECTION 6.1 OR 6.2, THE MAXIMUM LIABILITY OF
XCARE.NET, ITS DIRECTORS, OFFICERS, PARENT COMPANY, AND, AFFILIATES, TO CLIENT
FOR DAMAGES RELATING TO XCARE.NET'S FAILURE TO PERFORM SERVICES HEREUNDER SHALL
BE LIMITED TO AN AMOUNT EQUAL TO THE TOTAL FEES PAID BY CLIENT TO XCARE.NET WITH
RESPECT TO SUCH SERVICES.
ARTICLE VIII
TERM AND TERMINATION
8.1 TERM.
Subject to this Article VIII, the term of this Agreement shall commence on
the Effective Date and continue until terminated by either party pursuant to
Section 8.2 or 8.3 below.
8.2 TERMINATION FOR CAUSE.
This Agreement may be terminated by (A) either party in the event of (i)
mutual written agreement of the parties; (ii) any material default in, or
material breach of, any of the terms and conditions of this Agreement by the
other party, which default continues in effect after the defaulting party has
been provided with written notice of default and thirty (30) days to cure such
default; (iii) the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to either party of its
debts under any bankruptcy, insolvency, or other similar law now or hereafter in
effect, that authorizes the reorganization or liquidation of such party or its
debt or the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property; (iv) either
party's consent to
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any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it; or (v)
either party's making a general assignment for the benefit of creditors; or
either party's becoming insolvent; or either party taking any corporate action
to authorize any of the foregoing, (B) by Client pursuant to Section 6.2(c)(i)
and (C) by XCare.net pursuant to Section 6.1(c)(i).
8.3 EFFECT OF TERMINATION.
(a) If this Agreement is terminated by XCare.net pursuant to Sections
8.2(A)(ii)-(v), while XCare.net is performing any Development Services for
Client hereunder, Client shall immediately pay XCare.net the total fees actually
incurred to date by XCare.net associated with such incomplete project, as well
as all amounts due and owing for any projects already completed by XCare.net
hereunder or for any third-party products or services purchased by XCare.net on
Client's behalf. The foregoing shall be without limitation to XCare.net's rights
and remedies under this Agreement. Termination of the Agreement shall be in
addition to, and not in lieu of, any equitable or legal remedies available to
either party.
(b) If this Agreement is terminated by Client pursuant to Sections
8.2(A)(ii), Client shall not be obligated to pay any further fees pursuant to
this Agreement other than fees for Delivery Services already performed for
Client. The foregoing shall be without limitation to Client's rights and
remedies under this Agreement. Termination of the Agreement shall be in addition
to, and not in lieu of, any equitable or legal remedies available to either
party.
8.4 SURVIVAL.
Articles III, V, VII, VIII, IX and X shall survive any termination or
expiration of this Agreement; provided, however, that (i) if this Agreement is
terminated by XCare.net pursuant to Section 8.2 above (other than Section
8.2(i)), then Section 3.2 shall not survive and (ii) if this Agreement is
terminated by Client pursuant to Section 8.2 above (other than Section 8.2(i))
then Section 3.3 shall not survive.
ARTICLE IX
CONFIDENTIALITY
9.1 CONFIDENTIAL INFORMATION.
Each party acknowledges that, in connection with the performance of this
Agreement, it may receive certain confidential or proprietary technical and
business information and materials of the other party ("Confidential
Information").
9.2 CONFIDENTIALITY.
Each party hereby agrees: (i) to hold and maintain in strict confidence all
Confidential Information of the other party and not to disclose it to any third
party; and (ii) not to use any Confidential Information of the other party
except as permitted by this Agreement or as may be necessary to perform its
obligations under this Agreement. Each party will use at least the same degree
of care to protect the other party's Confidential Information as it uses to
protect its own
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<PAGE> 15
Confidential Information of like importance, and in no event shall such degree
of care be less than reasonable care.
9.3 EXCEPTIONS.
Notwithstanding the foregoing, the parties agree that Confidential
Information will not include any information that: (i) is or becomes generally
known or is or becomes part of the public domain through no fault of the other
party, (ii) the first party authorizes to be disclosed; (iii) is rightfully
received by the other party from a third party without restriction on disclosure
and without breach of this Agreement; or (iv) is known to the other party on the
Effective Date from a source other than the first party, and not subject to a
confidentiality obligation.
9.4 INJUNCTIVE RELIEF.
Each party acknowledges that any breach of the provisions of this Article
IX may cause irreparable harm and significant injury to an extent that may be
extremely difficult to ascertain. Accordingly, each party agrees that the other
party will have, in addition to any other rights or remedies available to it at
law or in equity, the right to seek injunctive relief to enjoin any breach or
violation of this Article IX.
ARTICLE X
GENERAL PROVISIONS
10.1 FORCE MAJEURE.
In the event that either party is unable to perform any of its obligations
under this Agreement or to enjoy any of its benefits because of any event beyond
the control of the affected party including, but not limited to, natural
disaster, acts of God, actions or decrees of governmental bodies or failure of
communication lines (a "Force Majeure Event"), the party who has been so
affected shall promptly give written notice to the other party and shall use its
best efforts to resume performance. Upon receipt of such notice, all obligations
under this Agreement shall be immediately suspended for the duration of such
Force Majeure Event.
10.2 NOTICE.
All notices, demands, requests or other communications required or
permitted under this Agreement will be deemed given when (i) delivered
personally; (ii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iii) one (1) day after
deposit with a commercial overnight carrier, with written verification of
receipt.
10.3 WAIVER.
Waiver of any breach or failure to enforce any term of this Agreement shall
not be deemed a waiver of any breach or right to enforce which may thereafter
occur. No waiver shall be valid against any party hereto unless made in writing
and signed by the party against whom enforcement of such waiver is sought and
then only to the extent expressly specified therein.
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<PAGE> 16
10.4 SEVERABILITY.
In the event any one or more of the provisions of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired and the parties will substitute
a new enforceable provision of like economic intent and effect.
10.5 GOVERNING LAW.
This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes thereto, shall be governed by and construed in accordance
with the laws of the State of New York without reference to conflict of law
principles.
10.6 ASSIGNMENT.
Neither party shall have the right to assign this Agreement without the
prior written consent of the other party; provided, that either party shall have
the right to assign this Agreement to any person or entity that acquires or
succeeds to all or substantially all of such party's business or assets upon
written notice to the other party.
10.7 PUBLICITY.
Within a time frame mutually agreed upon by the parties, the parties may
issue a joint press release announcing the existence of this Agreement which
shall be mutually agreed upon by the parties. Neither party will use the other
party's name, domain name, logo, trademark or service mark in advertising or
publicity without obtaining the other party's prior written consent; provided,
however, that XCare.net shall have the nonexclusive right and license to use
Client's name and Client Web Site name, including the URL (Uniform Resource
Locator) thereto, as a Client reference, and as part of XCare.net's client
portfolio. XCare.net shall also have the right to display its name and logo, as
well as a link to the XCare.net site, on the Client Web Site(s), and to receive
credit as the developer of the Client Web Site(s), (collectively, the "Credit").
Such Credit shall appear on the "home page" of the Client Web Site(s) in a
position that provides reasonable and appropriate visibility to XCare.net in
light of industry standards and Client's requirements.
10.8 ADDITIONAL ACTIONS AND DOCUMENTS.
Each of the parties hereto hereby agrees to take or cause to be taken such
further actions, to execute, deliver and file or cause to be executed, delivered
and filed such further documents, and will obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement.
10.9 HEADINGS.
Section headings contained in this Agreement are inserted for convenience
or reference only, shall not be deemed to be a part of this Agreement for any
other purpose, and shall not in any way define or affect the meaning,
construction or scope of any of the provisions hereof.
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<PAGE> 17
10.10 EXECUTION IN COUNTERPARTS: FACSIMILE SIGNATURES.
This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original, and all of which, when taken together, shall
constitute one and the same instrument. Facsimile counterpart signatures to this
Agreement shall be acceptable and binding.
10.11 INDEPENDENT CONTRACTORS.
The relationship of the parties hereunder shall be that of independent
contractors. Nothing herein shall be construed to constitute a partnership
between or joint venture of the parties, nor shall either party be deemed the
agent of the other or have the right to bind the other in any way without the
prior written consent of the other.
10.12 JURISDICTION.
All disputes arising out of or relating to this Agreement shall be
submitted to the non-exclusive jurisdiction of the state and federal courts
encompassing Denver, Colorado, and each party irrevocably consents to such
personal jurisdiction and waives all objections thereto.
10.13 ENTIRE AGREEMENT.
This Agreement (and any Schedules hereto) constitutes the entire agreement
and understanding between XCare.net and the Client and supersedes any prior
agreement or understanding, oral or written, relating to the subject matter of
this Agreement. All modifications and amendments to this Agreement must be in
writing and signed by both parties.
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<PAGE> 18
SCHEDULE 1
This Schedule describes Services to be provided by XCare.net to Client under
this Development Services Agreement dated March 31, 2000.
Description of Work:
The following statement of work covers the Lamar.com Phase I Prototype
Development and newco operating set-up fees as described below.
Deliverables: The following deliverables are included in Schedule "A".
Fee Schedule: XCare.net will bill client actual vendor software and integration
services fees. An estimate of these fees are included in Schedule "A."
XCare.net's hourly rate is $ * /hr for project services.
XCare.net and Client Contacts: XCare.net client contact: Lorine Sweeney -
303-488-2019 ext. 224. Client contact: Eric McAfee - 212-307-3580.
XCARE.NET CLIENT: LAMAR.COM, INC.
By: /s/ PETER CHEESBROUGH By: /s/ ERIC McAFEE
- ----------------------------------- ------------------------------------
Peter Cheesbrough Eric McAfee
- ----------------------------------- ------------------------------------
Printed Name Printed Name
Senior Vice President-
Chief Financial Officer Vice President
- ----------------------------------- ------------------------------------
Title Title
March 31, 2000 March 31, 2000
- ----------------------------------- ------------------------------------
Date Date
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
<PAGE> 1
[E-MEDX LOGO] [XCARE.NET LOGO]
PRODUCT COLLABORATION AGREEMENT
THIS PRODUCT COLLABORATION AGREEMENT ("Agreement") is made and entered into as
of this 19th day of January 2000 by and between e-MEDx, Inc., a Delaware
corporation ("XCare.net") and, XCare.net, Inc., a Delaware corporation
("XCare.net").
RECITALS:
o e-MEDx develops, owns and/or markets software products and
services accessible through the Internet including but not
limited those products described in Attachment A, attached hereto
(collectively and as further defined below, the "e-MEDx
Product"); and
o XCare.net develops, owns and/or markets software products and
services accessible through the Internet including but not those
products described in Attachment B, attached hereto (as further
defined below, the "XCare.net Product"'); and
o e-MEDx and XCare.net desire to enter into this Agreement in order
to integrate the e-MEDx Product and XCare.net Product as Combined
Product for the use of e-MEDx customers, subscribers and users of
the e-MEDx Product as well as for the use of XCare.net customers,
subscribers and users of the XCare.net Product.
o The Parties wish to enter into a long-term agreement to allow
e-MEDx's and XCare.net's customers access to each others products
as a stand-alone application and/or as an interface to other
application products.
NOW THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Recitals; Schedules, Exhibits and Attachments. The foregoing
recitals are true and correct and together with the schedules,
exhibits and attachments referred to hereinafter are incorporated
herein by this reference.
2. Definitions. The following terms when used in this Agreement
shall have the meanings indicated below:
(a) Application Program means the application software
programs developed to integrate the XCare.net Product
with the e-MEDx Product to derive the Combined
Product as a bundled package.
(b) Combined Product means the products resulting when
the e-MEDx Product and the XCare.net Product are
integrated. The Application Program, if any,
developed for each Combined Product is a component of
such Combined Product.
(c) End User means that person or entity that uses the
Combined Product as a part of the e-MEDx Product or
the XCare.net Product
<PAGE> 2
(d) End User License Agreement means the standard
agreement accompanying each copy of a product which
specifies the terms and conditions of the license to
use the product granted to the End User.
(e) XCare.net Product means the standard proprietary
XCare.net software listed in Attachment B, which
includes: (i) the object code form of the computer
programs, including but not limited to install code
and library structures to allow e-MEDx to build an
integrated install package for installation of the
Combined Product, in appropriate media; (ii) User
Documentation (soft copy in Microsoft Word document
format); and (iii) any necessary hardware.
(f) e-MEDx Product means the standard proprietary e-MEDx
software listed Attachment A, which includes: (i) the
object code form of the computer programs, including
but not limited to install code and library
structures to allow XCare.net to build an integrated
install package for installation of the Combined
Product, in appropriate media; (ii) User
Documentation (soft copy in Microsoft Word document
format); and (iii) any necessary hardware.
(g) User Documentation means the textual written
materials relating to the installation and use of the
XCare.net Product or the e-MEDx Product which either
XCare.net or e-MEDx, as the case may be, normally
distributes to End Users of its respective products,
and which are made available by such party by
distribution hereunder.
3. XCare.net Licenses
XCare.net hereby grants to e-MEDx a nonexclusive license to use
the XCare.net Product as necessary to develop the Combined
Product. XCare.net grants to e-MEDx a non-exclusive license, for
use of the XCare.net Product as a component of the e-MEDx Product
by End Users in accordance with the terms and conditions of this
Agreement. XCare.net hereby further grants to e-MEDx the
nonexclusive right to use and modify the User Documentation to
XCare.net Product as necessary to create integrated User
Documentation for the Combined Product for distribution to
Combined Product End Users. All other rights are hereby reserved
to XCare.net. XCare.net specifically reserves the right to market
XCare.net Product to or through any other person or entity in the
sole discretion of XCare.net. The E-MEDX agrees not to market the
Combined Product to any other software reseller or Healthcare
Internet Portal without the express written consent of XCARE.NET.
(i) Trademark Licenses. During the term of this
Agreement, e-MEDx is authorized by XCare.net to
advertise XCare.net Product as they relate to the
Combined Product in advertising media of e-MEDx's
choice. XCare.net hereby grants to e-MEDx a
nonexclusive license to use the XCare.net trademarks
(collectively, the "XCare.net Trademarks") for the
purposes and in the context of identifying the origin
of XCare.net Product as part of, and in connection
with the marketing of, the Combined Product. e-MEDx
agrees to include in each advertisement, brochure, or
other such use of the XCare.net Trademarks that are
federally registered the registered trademark
symbol(R) and the following statement:
"`[MARK XCare.net]' is a registered trademark of
XCare.net"
and for the XCare.net Trademarks that are not
federally registered, the trademark symbol "TM" and
the following statement:
"`[MARK XCare.net]' is a trademark of XCare.net"
CONFIDENTIAL 2 of 2
<PAGE> 3
e-MEDx shall not market the Combined Product in any
way that implies that XCare.net Product are the
proprietary product of e-MEDx or of any party other
than XCare.net.
4. e-MEDx Licenses
e-MEDx hereby grants to XCare.net a nonexclusive license to use
the e-MEDx Product as necessary to develop the Combined Product.
e-MEDx grants to XCare.net a non-exclusive license, for use of
the e-MEDx Product as a component of the XCare.net Product by End
Users in accordance with the terms and conditions of this
Agreement. e-MEDx hereby further grants to XCare.net the
nonexclusive right to use and modify the User Documentation to
eMEDx Product as necessary to create integrated User
Documentation for the Combined Product for distribution to
Combined Product End Users. All other rights are hereby reserved
to e-MEDx. e-MEDx specifically reserves the right to market
e-MEDx Product to or through any other person or entity in the
sole discretion of e-MEDx. XCARE.NET agrees not to market the
Combined Product to any other SOFTWARE RESELLER or Healthcare
Internet Portal without the express written consent of e-MEDx.
(i) Trademark Licenses. During the term of this
Agreement, XCare.net is authorized by e-MEDx to
advertise e-MEDx Product as they relate to the
Combined Product in advertising media of XCARE.NET's
choice. e-MEDx hereby grants to XCare.net a
nonexclusive license to use the e-MEDx trademarks
(collectively, the "e-MEDx Trademarks") for the
purposes and in the context of identifying the origin
of eMEDx Product as part of, and in connection with
the marketing of, the Combined Product. XCARE.NET
agrees to include in each advertisement, brochure, or
other such use of the e-MEDx Trademarks that are
federally registered the registered trademark
symbol (R) and the following statement:
"'[MARK e-MEDx]' is a registered trademark of e-MEDx"
and for the e-MEDx Trademarks that are not federally
registered, the trademark symbol "TM" and the
following statement:
"'[MARK e-MEDx]' is a trademark of e-MEDx"
XCare.net shall not market the Combined Product in
any way that implies that e-MEDx Product are the
proprietary product of XCare.net or of any party
other than e-MEDx.
5. Collaborative Obligations.
(a) Mutual Obligations.
(i) Development of Combined Product and Combined
Product User Documentation. The parties
shall collaborate in developing Combined
Product in accordance with the functional
and design specifications and implementation
schedule agreed to for the Combined Product
development project, said specifications and
schedule to become a Project Attachment to
this Agreement as set forth in Attachment E.
The parties shall also collaborate in the
development of User Documentation for the
Combined Product.
(ii) Notification and Record Requirements. Each
party shall notify the other party in
writing of any claim or proceeding involving
the Combined Product no later than ten days
after such party learns of such claim or
CONFIDENTIAL 3 of 3
<PAGE> 4
proceeding. Each party shall also report
promptly to the other party all claimed or
suspected defects in the Combined Product.
(iii) Compliance with Law. Each party agrees to
comply, and to cause its respective
Distributors to comply, with all applicable
federal, state and local laws and
regulations in performing its duties
hereunder.
6. Financial Arrangement. The pricing and other financial
arrangements for the marketing and sale of the Combined Product
and e-MEDx Product, in the case of XCare.net, and the marketing
and sale of the Combined Product and XCare.net Product, in the
case of e-MEDx, are set for the Attachment F, attached hereto.
7. Representations and Warranties. Each party hereby represents and
warrants to the other party hereto:
(a) that the use or distribution of its products either
by themselves or as part of the Combined Product, or
the exercise of the licenses granted hereunder, does
not and will not violate the intellectual property
rights of any third party under applicable copyright,
trademark, trade secret or patent laws, and that it
has not received a claim or demand related to the
infringement, breach or misappropriation of any such
rights;
(b) that it is the owner or authorized distributor of its
products, that its owned products are original works
of authorship created by it, and that it has full
power and right to license its products and perform
all other terms applicable to it of this Agreement
without having to obtain the consent of any third
party which has not been obtained prior to granting
such license;
(c) that it will honor the terms and conditions of the
End User License Agreement including use of its
products as part of the Combined Product, and will
not make any warranties to End Users other than those
contained in the End User License Agreement without
obtaining the consent of the other party hereto;
(d) that the media on which it delivers its products will
remain free from defects in materials and workmanship
for a period of ninety days from the receipt by the
End User;
(e) that its products substantially conform to the User
Documentation and specifications for same; and
(f) that its products and any updates or other software
provided by it to the other party in development of
the Combined Product conform to the following Year
2000 definition:
The applications, systems, software and hardware,
including related supporting data and files, will
function correctly when dealing with dates/times, and
date/time related data in the following manner: (i)
said items will accurately process date/time data
(including calculating, comparing and sequencing)
from, into and between the 20th and 21st centuries,
and the years 1999 and 2000 and leap year
calculations; (ii) when used in combination with
information technology products from other vendors,
said items will accurately process time/date data
with the other vendor's information technology
products; and (iii) said items will neither contain
nor create any logical or mathematical inconsistency,
will not malfunction, and will not cease to function
when processing date/time data.
Each party shall promptly repair its products or any
other software it provides to the other party for use
in development of the Combined Product if
non-conformance to
CONFIDENTIAL 4 of 4
<PAGE> 5
this Year 2000 compliance definition is discovered
during use or testing, regardless of which party
discovers such non-conformance.
8. Limitation of Warranties and Liability.
(a) Limitations of Warranties. EXCEPT FOR THE LIMITED
WARRANTIES STATED ABOVE, EACH PARTY ACCEPTS THE OTHER
PARTY'S PRODUCTS PROVIDED UNDER THIS AGREEMENT "AS
IS," WITH ALL FAULTS AND WITHOUT OTHER WARRANTIES OR
CONDITIONS OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(b) Limitation of Liability. EXCEPT AS OTHERWISE PROVIDED
IN SECTION 8 OF THIS AGREEMENT, EACH PARTY'S
LIABILITY TO THE OTHER PARTY OR ANY OTHER THIRD PARTY
FOR A CLAIM OF ANY KIND ARISING AS A RESULT OF, OR
RELATED TO THE COMBINED PRODUCTS OR EITHER PARTY'S
PRODUCTS OR USER DOCUMENTATION PROVIDED PURSUANT TO
THIS AGREEMENT, WHETHER IN CONTRACT, IN TORT
(INCLUDING NEGLIGENCE OR STRICT LIABILITY), UNDER ANY
WARRANTY, OR OTHERWISE, SHALL BE LIMITED TO MONETARY
DAMAGES AND THE AGGREGATE AMOUNT THEREOF FOR ALL
CLAIMS RELATING TO ANY PARTICULAR PRODUCT SHALL IN NO
EVENT EXCEED AN AMOUNT EQUAL TO THE CUMULATIVE
PAYMENTS RECEIVED BY SUCH PARTY UNDER SECTION 5 OF
THIS AGREEMENT FOR THE PRODUCTS THAT GIVE RISE TO THE
CLAIM. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING
LOST PROFITS), EVEN IF SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, OR FOR WARRANTIES
GRANTED BY EITHER PARTY OR ANY THIRD PARTY IN EXCESS
OF THOSE CONTAINED IN THE OTHER PARTY'S STANDARD END
USER LICENSE AGREEMENT. NO ACTION, REGARDLESS OF
FORM, ARISING OUT OF THE TRANSACTIONS UNDER THIS
AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN
ONE (1) YEAR AFTER THE EVENTS WHICH GAVE RISE TO THE
CAUSE OF ACTION OCCURRED.
9. Indemnification. Each party shall indemnify and hold harmless the
other party from all claims, losses, damages, costs and expenses
(including reasonable attorney's fees) that may arise from:
(a) breaches of its covenants, representations and
warranties contained herein, or misrepresentations
made by it or its Distributors (Erin and David, we
need a definition for Distributor or we need to
delete this term as it is currently orphaned in this
agreement);
(b) any warranties granted by it or its Distributors in
excess of those contained in the other party's
standard End User License Agreement;
(c) inadequate installation, maintenance or support by it
or its Distributors;
(d) the marketing of the other party's products by it or
its Distributors; or
(e) any other act or omission by it or its Distributors
not in compliance with this Agreement provided that
the party seeking indemnification promptly gives
written notice of any claim to the other party;
provides any assistance reasonably requested by the
indemnifying party for the defense of the claim, and
the indemnifying party has complete control of the
defense of such claim.
CONFIDENTIAL 5 of 5
<PAGE> 6
10. Confidentiality and Proprietary Rights.
(a) Confidentiality. Each party acknowledges that it has
or may, during the course of this Agreement received
information relating to the other party's assets,
operations, clients, and past, present, and future
businesses, including but not limited to
developments, technical data, specifications,
designs, ideas, product plans, research and
development, personal information, financial
information, customer lists, business methods and
operations, and marketing programs, all of which are
proprietary exclusively with such other party and
involve trade secrets, know-how, techniques, and
combinations of known information of a character
regarded by such party as confidential (collectively,
"Confidential Information"). Each party acknowledges
that all the other party's Confidential Information
is material and confidential and greatly affects the
goodwill and the effective and successful conduct of
such other party and its businesses and operations,
and that maintaining confidentiality of the
Confidential Information is reasonably necessary to
protect the legitimate business interests of such
other party. Accordingly, each party hereby agrees to
receive all such Confidential Information in strict
confidence and that neither it nor any of its
officers, directors, representatives, employees or
agents (including any consultants, subcontractors or
advisors) shall, at any time, directly or indirectly,
divulge, reveal or communicate to any third party the
existence or the terms of this Agreement or any
Confidential Information to any person, firm,
corporation or entity whatsoever, or use, pursue or
exploit any Confidential Information for its own
benefit or for the benefit of others. Each party
agrees that, upon demand of the other party, it and
its officers, directors, representatives, employees
or agents (including any consultants or advisors)
shall immediately return to such other party all
tangible material pertaining to Confidential
Information in its possession or control. Each party
shall disclose and enforce in writing the
confidentiality provisions of this Agreement with all
its officers, directors, representatives, employees
or agents (including any consultants, subcontractors
or advisors).
(b) Proprietary Rights. Title to the XCare.net Product
and all other products, trade secrets and other
proprietary information developed independently by
XCare.net, including without limitation all
copyrights thereto, shall remain with XCare.net at
all times. Title to the e-MEDx Product and all other
products, trade secrets and other proprietary
information developed independently by e-MEDx,
including without limitation all copyrights thereto,
shall remain with e-MEDx at all times. All software,
documentation or other products developed jointly by
and between XCare.net and e-MEDx, including
derivative works created jointly based on either the
XCare.net Product or the e-MEDx Product in the
development of the Combined Product shall be jointly
owned by XCare.net and e-MEDx and the parties shall
cooperate in and bear equally the expenses associated
with securing appropriate joint copyright
registrations and other forms of intellectual
property protection through engagement of mutually
acceptable counsel. Additionally, the parties agree
to cooperate and share equally the expenses of
conducting appropriate "right to use" or infringement
investigations prior to marketing the Combined
Product, and in the event of any claim based on the
Combined Product infringing a third party's
intellectual property rights based on the combination
of the XCare.net Product and the e-MEDx Product
rather than the XCare.net Product or the e-MEDx
Product not in combination, the parties shall
cooperate and share the expenses and any liability
imposed proportionately based on royalties received
by each party on sales of the Combined Product.
Each party agrees that all tangible objects
containing or relating to the other party's products
and all copies thereof are the sole and exclusive
property of such other party and upon termination of
this Agreement for any reason, each party will
forthwith return to the other party all of such other
party's products and User Documentation,
CONFIDENTIAL 6 of 6
<PAGE> 7
magnetic media, instructions and all other related
materials in such party's possession furnished to it
hereunder and shall not retain any copies for its use
or for any purpose except as otherwise specifically
permitted by this Agreement, such as retention of a
minimal number of copies as reasonably necessary to
fulfill maintenance and support contractual
obligations with End Users. Neither party shall copy
any of the other party's products at any time for any
reason except as specifically permitted by this
Agreement. Neither party shall remove, cover, alter
or obfuscate any copyright notices or other
proprietary notices placed or embedded by the other
party on or in any of such other party's products.
Each party agrees not to decompile, disassemble, or
otherwise reverse engineer the software of the other
party's products. Each party agrees to take all
reasonable measures to protect the other party's
ownership rights and interest in all copyrights,
trade secrets, trademarks, service marks and other
property. Each party will promptly during the term of
this Agreement and thereafter, notify the other party
of any actual or suspected unauthorized use or
disclosure of such other party's products, User
Documentation, copyrights, trademarks, service marks
or trade secrets of which it has knowledge and will
cooperate fully in the investigation of such
unauthorized use or disclosure.
(c) Source Code Escrows. Both parties shall deposit the
source code and associated design documentation of
all components of such software for their respective
Product that is incorporated in the Combined Product
as it may be modified from time to time, and, in the
event that either party develops new software in
order to create the Combined Product, such party
agrees to deposit the source code and associated
design documentation of all components of such
software with a mutually acceptable escrow agent
(such source code and documentation hereinafter
referred to as the "Deposited Material"). The parties
shall enter into an escrow agreement which shall
contain instructions to release the Deposited
Materials, 1) pursuant to the terms of the Option
Agreement, and; 2) otherwise to the party that did
not develop them in the event that such party
notifies the escrow agent that (i) the developing
party has materially breached and fails or refuses to
perform under this Agreement; or (ii) any bankruptcy,
reorganization, debt arrangement, or proceeding under
any bankruptcy or insolvency laws or any dissolution
or liquidation proceeding commenced by or against the
developing party and as to such case or proceeding
not commenced by the developing party, not dismissed
within sixty (60) days.
(d) Remedies. In the event of a breach of any of the
provisions of this Section, the non-breaching party
will not have an adequate remedy in money or damages,
and accordingly shall, in addition to any other
available legal or equitable remedies, be entitled to
an injunction against such breach without any
requirements to post bond as a condition of such
relief.
11. Term and Termination
(a) Term. This Agreement shall be effective on the date
set forth above and shall be a three (3) year
Agreement unless terminated pursuant to the terms
contained below.
(b) Termination. EITHER PARTY MAY TERMINATE THIS
AGREEMENT WITHOUT CAUSE WITH NINETY (90) DAYS WRITTEN
NOTIFICATION. ADDITIONALLY, this Agreement may be
terminated in the event of a material breach. The
non-breaching party must provide NINETY (90) DAYS
written NOTIFICATION specifying such material breach,
if the breaching party fails to cure the breach
within a thirty (30) day period.
(c) Automatic Termination. Either party may terminate
this Agreement, effective immediately upon written
notice, if: (i) all or a substantial portion of the
assets of the other party are transferred to an
assignee for the benefit of creditors, to a receiver
or
CONFIDENTIAL 7 of 7
<PAGE> 8
to a trustee in bankruptcy; (ii) a proceeding is
commenced by or against the other party for relief
under bankruptcy or similar laws and such proceeding
is not dismissed within sixty (60) days; or (iii) the
other party is adjudged bankrupt or insolvent. Upon
such a termination by either party, the party
terminating this Agreement shall be entitled to
obtain the release and receive any escrowed source
code, object code and documentation for the software
included in the Combined Product.
(d) Effect of Termination. All licenses and other rights
granted by each party to the other party hereunder
shall become null and void upon the termination of
this Agreement, except: (i) for the End User licenses
for XCare.net or e-MEDx Product previously
distributed by e-MEDx or XCare.net or their
Distributors, and (ii) for a limited license to
e-MEDx or XCare.net to use XCare.net or e-MEDx
Product, respectively, for the sole purpose of
fulfilling any contractual obligations for
maintenance and support services to End Users.
(e) Post-Termination Phase-Out. Each party's right to use
the others product as part of the Combined Product as
of the effective date of the termination, shall cease
one hundred twenty (120) days after the effective
date of termination.
12. General Provisions.
(a) No Agency. The parties hereto shall at all times be
independent contractors and shall so represent
themselves to all third parties. The parties hereto
acknowledge and agree that this Agreement is intended
to create and further a cooperative business alliance
relationship, but neither party has granted to the
other the right to bind it in any manner or thing
whatsoever and nothing herein shall be deemed to
constitute either party the agent or legal
representative of the other nor to legally constitute
the parties as partners, agents or joint ventures of
one another. Any purchase order or other document
issued by either party which includes the other
party's products shall be deemed to be issued only
for administrative convenience and no term or
condition thereof shall be binding on either party
hereto.
(b) Assignment; Binding Nature. Neither party may assign
this Agreement or any of its respective obligations
hereunder to any third party or entity, and this
Agreement may not be involuntarily assigned or
assigned by operation of law without the prior
written consent of the other party, which consent
shall not be unreasonably withheld. Any attempted
assignment in contravention of this Agreement shall
be null and void as to the alleged assignor and
assignee. The provisions hereof shall be binding upon
and inure to the benefit of the parties, their
successors and permitted assigns.
(c) Insurance. Each party shall maintain insurance and
shall include, without limitation, comprehensive
general liability, including contract liability, and
products liability coverage, and statutory workers'
compensation insurance each of limits of at least one
million dollars ($1,000,000) and errors and
omissions, including intellectual property
infringement liability, with limits of at least five
million dollars ($5,000,000).
(d) Survival. Sections 4(c)(iv) (Notification and Record
Requirements), 4(c)(v) (Compliance with Law), 5
(Payment, Order and Shipment), 6 (Representations and
Warranties), 7 (Limitation of Warranties and
Liability), 8 (Indemnification), 9 (Confidentiality
and Proprietary Rights), 10(d) (Effect of
Termination), 10(e) (PostTermination Phase-Out), and
11 (General Provisions) shall survive termination of
this Agreement.
(e) Headings. The section and subsection headings
contained in this Agreement are for purposes of
convenience and reference only, and shall not affect
in any way the meaning or interpretation of this
Agreement.
CONFIDENTIAL 8 of 8
<PAGE> 9
(f) Governing Law: Prevailing Party Recovery. This
Agreement shall be governed by the laws of the STATE
OF DELAWARE, and any action taken by any party
resulting from a dispute regarding the terms of this
Agreement shall be heard exclusively in the local
Federal or State courts in the venue of the STATE OF
DELAWARE and the parties hereto consent to personal
jurisdiction in such forum. If either party hereto is
required to engage in litigation against the other
party hereto, either as plaintiff or as defendant, in
order to enforce or defend its rights under this
Agreement, and such litigation results in a final
judgment in favor of such party (the "Prevailing
Party"), then the party against whom said final
judgment is obtained shall reimburse the Prevailing
Party for all direct, indirect and incidental
expenses incurred, including, but not limited to, all
attorney's fees, court costs and other expenses
incurred throughout all negotiations, trials or
appeals undertaken in order to enforce the Prevailing
Party's rights hereunder.
(g) Notices. All notices permitted or required under this
Agreement shall be effective only if in writing, and
shall be deemed to have been given (and received)
when personally delivered, or on the next business
day after the date on which deposited with a
regulated public carrier (e.g., Federal Express),
with a return receipt requested or equivalent thereof
administered by such regulated public carrier, or
when sent via facsimile with confirmation of delivery
to the facsimile numbers set forth below for the
respective receipt, addressed to the President of the
party for whom intended at the address set forth
above:
If to e-MEDx: E-MEDx, Inc.
7201 Wisconsin Avenue
Suite 620
Bethesda, Maryland 20814
Tel. No.: 301.654.8999
Fax No.: 301.654.8996
Attn: John Dwyer
If to XCare.net: XCare.net, Inc.
6400 South Fiddlers
Green Circle
14th Floor
Englewood, CO 80111
Tel. No.: 303.488.2019
Fax No.: 303.488.9705
Attn: Lorine Sweeney
(h) Entire Agreement. This Agreement supersedes any prior
agreements or understandings between the parties,
whether express or implied or written or oral,
including specifically that certain Letter of
Understanding between the parties hereto dated
December 23, 1999, and constitutes the entire
understanding of the parties as to the matters set
forth herein. Neither party shall be bound by any
representations, warranties, promises, statements or
information as to the matters which are the subject
of this Agreement, unless such are specifically set
forth herein.
(i) Amendment; Waiver. No attempted amendment,
modification, termination, discharge or
(collectively, "Amendment") of this Agreement shall
be effective unless it is in writing and signed by
both parties hereto. No waiver of any provision of
this Agreement shall be effective unless it is in
writing and signed by the party against whom it is
asserted, and any such written waiver shall only be
applicable to the specific instance to which it
relates and shall not be deemed to be a continuing or
future waiver.
CONFIDENTIAL 9 of 9
<PAGE> 10
(j) Force Majeure. Neither party shall be responsible for
any failure to perform due to unforeseen
circumstances or for causes beyond its control which
prevents such party from performing under this
Agreement, provided that such party provides notice
to the other party describing the circumstances
alleged to constitute force majeure. Such party shall
be permitted to delay its performance only for as
long as the circumstances constituting force majeure
are present.
(k) Severability. This Agreement is intended to be
performed in accordance with and only to the extent
permitted by all applicable laws, ordinances, rules
and regulations of the jurisdictions in which the
parties do business. If any provision of this
Agreement, or the application thereof to any person
or circumstances shall, for any reason or to any
extent, be invalid or unenforceable, the remainder of
this Agreement and the application of such provision
to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the
greatest extent permitted by law.
(l) Counterparts. This Agreement and any amendments may
be executed in one or more counterparts, each of
which shall be deemed an original, but all of which
together shall constitute one and the same
instrument.
(m) Further Assurances. The parties hereto agree to
execute and deliver such further instruments and do
such further acts and things as may be reasonably
necessary or required to carry out the intent and
purposes of this Agreement.
13. PUBLICITY: THE PARTIES SHALL WORK TOGETHER AS MUTUALLY AGREED UPON
TO ISSUE A PUBLICITY AND GENERAL MARKETING COMMUNICATION CONCERNING THE
EXECUTION OF THIS AGREEMENT. NEITHER PARTY SHALL ISSUE SUCH PUBLICITY
AND GENERAL MARKETING COMMUNICATION WITHOUT THE PRIOR WRITTEN CONSENT
OF THE OTHER PARTY (NOT TO BE UNREASONABLY WITHHELD). NEITHER PARTY
SHALL DISCLOSE THE TERMS OF THIS AGREEMENT TO ANY THIRD-PARTY OTHER
THAN TO COUNSEL, AUDITORS AND FINANCIAL ADVISORS EXCEPT AS REQUIRED BY
LAW.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date set forth above.
E-MEDX:
e-MED, Inc.
By: /s/ DAVID C. BJORK
-------------------------------
Name: David C. Bjork
-------------------------------
Title: Executive VP Sales & Mktg.
XCARE.NET:
XCare.net, Inc.
By: /s/ THOMAS M. PIANTO
-------------------------------
Name: Thomas M. Pianto
-------------------------------
Title: Sr. VP of Sales & Bus. Div.
CONFIDENTIAL 10 of 10
<PAGE> 11
ATTACHMENT A - e-MEDx PRODUCTS
The following e-MEDx products are incorporated as a part of this agreement.
1. MEDADVICE(R) 2001 UTILIZATION/CARE MANAGEMENT/DISEASE MANAGEMENT
SOFTWARE
2. e-PHA PREDICTIVE HEALTH ASSESSMENT TOOLS
3. e-IDM INTEGRATED CHRONIC DISEASE MANAGEMENT PROGRAMS
possible additions:
1. e-CONSULT PRE-CONSULTATION VISIT FORMS
2. e-PSS PATIENT SATISFACTION SURVEYS
It is intended that certain products be private-labeled and sold by XCare.net as
their own product. For other products the intent is to work in a co-marketing
manner. The responsibilities of each party and financial arrangements for both
types of relationships are described in Attachment F.
PRODUCT DESCRIPTIONS:
MEDADVICE(R) 2001
e-MEDx empowers the desktop of the Utilization Management and Case Management
department(s) with a fully-functioning application suite -- MEDADVICE(R) 2001.
This product supports Utilization and Case Management functions. Major system
components include:
o Referral Management
o Pre-certification and Treatment Authorization
Management
o Case Management
o UM Decision-support
o Web-based Authorization Management
o Web-based Inquiries for Providers
e-PHA
e-PHA is a web-based healthcare application that enables care management
organizations and/or employers to assess the health risk of their
members/employees and to take appropriate corrective action.
Through the use of e-PHA patients provide information about themselves that
allows the likelihood that they will need care during the next 12 months to be
predicted with great accuracy. By analyzing and providing health improvement
recommendations and techniques to each respondent, e-PHA helps improve the
wellness of the population. In addition, the product identifies the fraction of
the population with the greatest likelihood of needing care, and provides an
effective way for a care management organization or a Call Center to
pro-actively address those higher-risk individuals.
e-IDM
e-IDM is a web-based healthcare application that enables provider organizations
to efficiently and effectively plan and implement the care of patients with
chronic diseases.
CONFIDENTIAL 11 of 11
<PAGE> 12
Through the use of e-IDM, a provider can quickly identify the most appropriate
care guidelines for a patient with a chronic disease. The provider can then use
e-IDM to create a plan for the patient based on those guidelines. The plan
contains alerts which will notify the provider both when clinical data suggests
that a change to the plan might be required and when the time has come for some
further action -- eg, an office visit, a phone call to the patient, a test.
e-IDM allows providers to use explicit care plans to manage the care of their
patients -- but in a way that not only does not increase the amount of time that
needs to be spent attending to the patient, but actually decrease the time.
CONFIDENTIAL 12 of 12
<PAGE> 13
ATTACHMENT B -- XCARE.NET PRODUCTS
The following Xcare.net products are incorporated as a part of this agreement.
1. eXtensible CARE CLAIMS PROCESSING/MANAGED CARE SYSTEM
2. EXPERTPRACTICE.COM CREDENTIALING SOFTWARE
3. INFOMINERS DECISION SUPPORT & AD HOC REPORTING
possible additions:
4. MULTI-PAYER ELIGIBILITY ON-LINE ELIGIBILITY VERIFICATION
5. MULTI-PAYER REFERRAL ON-LINE REFERRAL SUBMISSION
6. MULTI-PAYER CLAIMS CLAIMS SCRUBBING, ROUTING, STORING AND
CLEARINGHOUSE.
It is intended that certain products be private-labeled OR CO-BRANDED and sold
by e-MEDx as their own product. For other products the intent is to work in a
co-marketing manner. The responsibilities of each party and financial
arrangements for both types of relationships are described in Attachment F.
PRODUCT DESCRIPTIONS:
eXtensible CARE
The eXtensible CARE MCIS provides a powerful back-office application for the
processing of managed care transactions by health plan payers and at-risk
provider organizations. The eXtensible CARE system fully supports each of the
transaction extensions of the XCare.net eHealth products and services.
Additionally, the eXtensible CARE system provides market space differentiation
relative to competition through the inclusion of a managed care information
system into the overall business model, allowing Xcare.net customers to
immediately support transactions on the Internet.
In a single, integrated system, eXtensible CARE's enrollment, claims and
capitation modules handle the full spectrum of managed care products, contracts
and services. Major functionality includes subscriber/member enrollment, group
contracting, billing, broker commissions, provider contracting, utilization
management, claims, capitation and fund accounting, Medicaid and Medicare,
reporting, letter generation and communications tracking. Core modules have been
designed for seamless integration with a suite of best-of-breed partner
applications to provide additional key functions in the areas of case
management, imaging and workflow, physician credentialing and decision support.
EXPERTPRACTICE.COM
EXPERTPRACTICE.COM'S online physician credentialing solution is dedicated to
delivering a full suite of credentialing applications to help providers reduce
the hassle and expense of participation in payer networks and provider panels.
Additionally, the online credentialing solution uses the accessibility and
convenience of the Internet to deliver proven tools that help health care
professionals and their administrative staff save time and money, increase
administrative efficiency, fuel practice growth and enhance professional health
care office operations.
The use of the Internet to deliver the solution benefits customers as they are
never burdened by old, obsolete software. EXPERTPRACTICE.COM'S approach of
offering an online credentialing solution delivers a positive ROI and increases
productivity, efficiency and growth within health care practices.
CONFIDENTIAL 13 of 13
<PAGE> 14
Features and Benefits:
SNAPPNET --
SNAPPNET outputs custom forms and applications with the single push of a button.
All customers do is create a one-time, in-depth profile that covers the spectrum
of professional and practice data typically asked on credentialing applications
and other related forms. The completed profile is stored in EXPERTPRACTICE.COM's
secure database, which can be accessed and reviewed or updated at any time. When
a new application or form is needed, the customer can choose the appropriate
selection from an extensive library and SNAPPNET automatically inserts the
appropriate information into the requested document.
Check the advantages SNAPPNET delivers:
o Allows customers to enter data once and use it unlimited times.
o Automatically fills out and prints applications and forms.
o Eliminates time-consuming processing of lengthy forms.
o Custom pre-entered practice data to suit virtually any credentialing
document.
o Easy access to data for updates and modifications.
o Security through password-protected entry.
CREDENTIALSAGENT --
CREDENTIALSAGENT puts customers in control of the credentialing process and
takes away the hassle of completing and managing thousands of pieces of paper.
CREDENTIALSAGENT combines a repository for the health care professional's
credentialing documents (e.g., licenses, malpractice certificates,
educational/CME information, etc.) with a provider-centric credentialing
verification service. It also gives customers an agent who can be the
coordinator and representative to health plan and hospital administrative staff,
alleviating the time consuming process of responding to multiple requests for
credentials.
All customers do is create a profile online and then send EXPERTPRACTICE.COM the
usual credentialing source documents, that are verified in compliance with the
national accreditation organizations. Customers have online access to the file
at all times, so it's easy to stay updated on the verification process and to
update the file just once when changes need to be made.
Once primary source verification is complete, all data is stored in
EXPERTPRACTICE.COM's secure database and refreshed on a real-time basis. We
interact with payers on the customers behalf, so they never again have to
provide information in hardcopy form when they apply for HMO/PPO network
participation or to join a hospital staff. Plus, they will be eligible to
receive new patient referrals and additional revenue more quickly, as
CREDENTIALSAGENT reduces the time it takes payers to complete the credentialing
process from several months to a couple of weeks.
With CREDENTIALSAGENT, customers can:
o Control the credentialing process for network participation and
hospital privileges.
o Have online access to files any time to see credentialing status, as
well as view and change the list of organizations authorized to view
their information.
o Provide authorization to whichever organizations they choose,
allowing them to view the information at their convenience.
o Make a change to the file and have it immediately update all
affiliated plans and hospitals.
CONFIDENTIAL 14 of 14
<PAGE> 15
o Enjoy the convenience of a single storage and update site for all
credentialing documents, secured by password protected entry.
o Feel confident knowing that credentials receive in-depth
verification conducted in accordance with standards set by NCQA,
JCAHO and URAC.
Cut the time between application and new patient referrals from several months
to a couple of weeks (and sometimes even days), thereby increasing practice
revenue.
INFOMINERS
INFOMINERS is a data warehouse solution developed by experts with years of
experience in the managed care industry. The software is written in the language
and context of managed care resulting in data that is organized and presented in
a way that addresses the industry's key challenges. INFOMINERS consolidates
enterprise-wide information into one warehouse environment. As a result, users
can access the same information to support the specific decisions of their
functional area.
Additionally, with INFOMINERS, clients are free from the burden of analyzing
operational systems, evaluating and selecting individual database and
navigational tools, designing the database, and writing the numerous programs
necessary to administer the database. Instead, INFOMINERS provides a
ready-to-install package that is fully compatible with existing information
systems and can be customized to support individual content and report
requirements. The "best of breed" navigational tools incorporated into the
solution are easy to use and totally intuitive. Information is retrieved, viewed
and shared with the click of a mouse. In this user-friendly environment, even
PC- novices can quickly become productive with little or no support from IT.
CONFIDENTIAL 15 of 15
<PAGE> 16
ATTACHMENT C -- XCARE.NET TRAINING & CONSULTATION PLAN
XCare.net is obligated and has incentive to provide adequate training to the
e-MEDx sales team. The training program will be designed to enable the e-MEDx
sales team to be productive as quickly as possible after the start of this
Agreement.
At a minimum, this program will include (for each product):
1. A PowerPoint Slide Presentation
2. Product Highlight Sheets
3. Pricing and Packaging
4. Availability to a Demonstration of the product
5. Appropriate amount of discussion and training by a qualified
instructor
XCare.net will participate in a two-day e-MEDx Sales Meeting that will be
devoted to sales training and will be scheduled within the first two months of
this agreement. Participation in future sales meetings will be scheduled on an
as needed basis.
NOTE: All expenses for travel and expenses will be the responsibilities of the
parties incurring the expenses (there will be no billing of expenses to the
other parties).
CONFIDENTIAL 16 of 16
<PAGE> 17
ATTACHMENT D -- E-MEDX TRAINING & CONSULTATION PLAN
e-MEDx is obligated and has incentive to provide adequate training to the
XCare.net sales team. The training program will be designed to enable the
XCare.net sales team to be productive as quickly as possible after the start of
this Agreement.
At a minimum, this program will include (for each product):
6. A PowerPoint Slide Presentation
7. Product Highlight Sheets
8. Pricing and Packaging
9. Availability to a Demonstration of the product
10. Appropriate amount of discussion and training by a qualified
instructor
e-MEDx will participate in a two-day XCare.net Sales Meeting that will be
devoted to sales training and will be scheduled within the first two months of
this agreement. Participation in future sales meetings will be scheduled on an
as needed basis.
NOTE: All expenses for travel and expenses will be the responsibilities of the
parties incurring the expenses (there will be no billing of expenses to the
other parties).
CONFIDENTIAL 17 of 17
<PAGE> 18
ATTACHMENT E -- COMBINED PRODUCT PROJECT DESCRIPTION
Initially, the combined product will be the combination of XCare.net's
eXtensible CARE (claims management) product with e-MEDx's MedAdvice(R) 2001
(utilization & case management) product. The coupling of these products is
contemplated as follows:
PHASE 1
o Provider File Interface (x.12)
o Member Eligibility Interface (x.12)
o Authorization Interface (x.12)
PHASE 2
o Benefits Interface
o Auto Authorization Process (web-based auths)
PHASE 3
o Infominers Decision Support and Reporting Tool Integration
FUTURE
o ExpertPractice.com Integration
CONFIDENTIAL 18 of 18
<PAGE> 19
ATTACHMENT F -- FINANCIAL ARRANGEMENT
-------------------------------------
CO-MARKETING ARRANGEMENT
DEFINITION: The organization that owns the software sells, installs,
and supports their product. The co-marketing partner invites the
product author/owner into a prospective opportunity to sell their
product. All costs associated with the sale are the responsibility of
the product author/owner.
PRODUCTS: The following products are being categorized as co-marketed
products:
XCARE.NET PRODUCTS:
eXtensible CARE
E-MEDX PRODUCTS:
MedAdvice(R) 2001
FEES: Co-marketing fees for this relationship are set at * for both
all co-marketed products. The author pays the co-marketer * of the
(projected) first-year revenue in recognition of the introduction/lead.
This payment is due upon receipt of * of the first year (projected)
revenues.
PRODUCT RESELLING ARRANGEMENT
DEFINITION: The selling organization to take full sales, installation,
support and training responsibilities for all products, regardless of
the organization that owns/authors the products.
PRODUCTS: The following products are being categorized as co-marketed
products:
COMBINED PRODUCT: XCARE.NET WILL HOST THE SERVER AND PROVIDE ALL
EQUIPMENT REQUIRED TO SUPPORT THE COMBINED PRODUCT. ADDITIONALLY,
XCARE.NET WILL PROVIDE THE FIRST LEVEL OF SUPPORT, INSTRUCTION,
AND OTHER SUPPORT TO NEW COMBINED PRODUCT END USERS REGARDING THE
USE OF THE COMBINED PRODUCT IN ACCORDANCE WITH THE PLAN SET FORTH
IN ATTACHMENTS C AND D ATTACHED HERETO.
XCARE.NET PRODUCTS:
ExpertPractice.com Credentialing for Physicians (REVENUE
SHARING BASED ON PROFIT MARGIN)
Infominers Decision Support Tools (REVENUE SHARING
BASED ON PROFIT MARGIN)
E-MEDX PRODUCTS:
e-PHA Predictive Health Assessment Tool
e-IDM Integrated CHRONIC Disease Management
Programs
FEES: Revenue splits will be as follows:
<TABLE>
<CAPTION>
PRODUCT SALES ORG. NON-SALES ORG. SERVER HOST
- ------- ---------- -------------- -----------
<S> <C> <C> <C>
ExpertPractice(1) * * *
Infominers(1) * * *
e-PHA(2) * * *
e-IDM * * *
</TABLE>
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
CONFIDENTIAL 19 of 19
<PAGE> 20
1. Must be hosted by XCare.net
2. Must be hosted by e-MEDx
(When Server Hosting does not exist, the Sales Organization split is
increased by * )
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
CONFIDENTIAL 20 of 20
<PAGE> 21
COMPETITIVE SITUATIONS
It is expected that from time to time, e-MEDx and XCare.net will encounter
situations in which they are, or could, compete for the same client's business.
In these situations, the companies will adhere to the policy that the first
organization into an account will be the organization that works to win the
business -- the other organization will professionally exit the opportunity, and
promote the remaining party to the client. When extenuating circumstances (like
a special connection or other reason) may improve the chances of one
organization to win an opportunity over the other, or when there is
confusion/disagreement about who was in first, these situations will be
escalated to the designated senior executives within each company, and a
decision will be made at that level.
Those currently designated for this role are:
For e-MEDx: David C. Bjork
EVP, Sales & Marketing
For XCare.net: Tom Pianko
SVP, Sales & Business Development
PRICING
Retail pricing for products identified within this agreement is the
responsibility of the owner/author of the software. Prices will be market-driven
and published on a quarterly basis for the Reseller. Special pricing
considerations that have not be contemplated in the published pricing (i.e.
large volume deals) will be determined on a case-by-case basis by the designated
senior executives within each company.
Those currently designated for this role are:
For e-MEDx: David C. Bjork
EVP, Sales & Marketing
For XCare.net: Tom Pianko
SVP, Sales & Business Development
CONFIDENTIAL 21 of 21
<PAGE> 22
ATTACHMENT F -- FINANCIAL ARRANGEMENT
CO-MARKETING ARRANGEMENT
DEFINITION: The organization that owns the software sells, installs,
and supports their product. The co-marketing partner invites the
product author/owner into a prospective opportunity to sell their
product. All costs associated with the sale are the responsibility of
the product author/owner.
PRODUCTS: The following products are being categorized as co-marketed
products:
XCARE.NET PRODUCTS:
eXtensible CARE
E-MEDX PRODUCTS:
MedAdvice(R) 2001
FEES: Co-marketing fees for this relationship are set at 10% for both
all co-marketed products. The author pays the co-marketer 10% of the
(projected) first-year license or transaction fees in recognition of
the introduction/lead. This payment is due upon receipt of 50% of the
first twelve months (projected) cash.
At the conclusion of the twelve month period, an adjustment will be
calculated by the product owner/author based on actual license fees
generated by the client relationship. Once the actual fee is accounted
for in a mutually agreed upon manner, a check or invoice will be sent
to the comarketing partner within sixty days after the end of the
twelve month period.
PRODUCT RESELLING ARRANGEMENT
DEFINITION: The selling organization to take full sales, installation,
support and training responsibilities for all products, regardless of
the organization that owns/authors the products.
PRODUCTS: The following products are being categorized as co-marketed
products:
COMBINED PRODUCT: XCare.net will host the server and provide
all equipment required to support the Combined Product.
Additionally, XCare.net will provide the first level of
support, instruction, and other support to new Combined
Product End Users regarding the use of the Combined Product in
accordance with the plan set forth in Attachments C and D
attached hereto.
XCARE.NET PRODUCTS:
ExpertPractice.com Credentialing for Physicians
Infominers Decision Support Tools
E-MEDX PRODUCTS:
e-PHA Predictive Health Assessment Tool
e-IDM Integrated Chronic Disease
Management Programs
CONFIDENTIAL 19 of 20
<PAGE> 23
FEES: Revenue splits will be based on the "net license fees" (net of
any licensing costs to third parties) of the product over the term of
the agreement. Installation fees, maintenance fees, or other
resource-based fees are excluded from this agreement. Splits are
calculated as follows:
<TABLE>
<CAPTION>
PRODUCT SALES ORG. NON-SALES ORG. SERVER HOST
- ------- ---------- -------------- -----------
<S> <C> <C> <C>
ExpertPractice.com(1) * * *
Infominers(1) * * *
e-PHA(2) * * *
e-IDM(2) * * *
</TABLE>
1. Must be hosted by XCare.net, and will be sold by e-MEDx
2. Must be hosted by e-MEDx, and will be sold by Xcare.net
(When Server Hosting does not exist, the Sales Organization split is
increased by * )
COMPETITIVE SITUATIONS
It is expected that from time to time, e-MEDx and XCare.net will encounter
situations in which they are, or could, compete for the same client's business.
In these situations, the companies will adhere to the policy that the first
organization into an account will be the organization that works to win the
business--the other organization will professionally exit the opportunity, and
promote the remaining party to the client. When extenuating circumstances (like
a special connection or other reason) may improve the chances of one
organization to win an opportunity over the other, or when there is
confusion/disagreement about who was in first, these situations will be
escalated to the designated senior executives within each company, and a
decision will be made at that level.
Those currently designated for this role are:
For e-MEDx: David C. Bjork
EVP, Sales & Marketing
For XCare.net: Tom Pianko
SVP, Sales & Business Development
Retail pricing for products identified within this agreement is the
responsibility of the owner/author of the software. Prices will be market-driven
and published on a quarterly basis for the Reseller. Special pricing
considerations that have not be contemplated in the published pricing (i.e.
large volume deals) will be determined on a case-by-case basis by the designated
senior executives within each company.
Those currently designated for this role are:
For e-MEDx: David C. Bjork
EVP, Sales & Marketing
For XCare.net: Tom Pianko
SVP, Sales & Business Development
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
CONFIDENTIAL 20 of 20
<PAGE> 1
PROFESSIONAL SERVICES AGREEMENT
This PROFESSIONAL SERVICES AGREEMENT is entered into as of December 28,
1999 by and between Xcare.net, a Delaware corporation with offices at 6400 S.
Fiddler's Green Circle, Englewood, CO 80111, ("Xcare.net"), and Expert Practice,
Inc., a California corporation, with offices at 4025 Camino del Rio South, Suite
100, San Diego CA 92108 ("Client").
1. SCOPE
This Agreement covers the purchase of certain Services from Xcare.net,
pursuant to orders placed by Client and accepted by Xcare.net after the
Effective Date, as set forth from time to time on sequentially numbered
Attachments to this Agreement. Each Attachment shall be executed by the parties
and, when fully executed, will be incorporated into this Agreement. Xcare.net
shall provide qualified and trained personnel to render such Services and shall
use reasonable commercial efforts to meet the delivery schedules set forth in
the applicable Schedules.
As of the Effective Date, this Agreement includes the following
Attachments, which are incorporated herein by this reference:
Attachment 1 Xcare.net Development Services
Attachment 2 Xcare.net Hosting Services
2. DEFINITIONS
These terms shall be defined as follows:
a. "Agreement" means this Professional Services
Agreement, together with all Attachments
(whether in existence at the time this
Agreement is executed or created thereafter)
and any schedules and/or exhibits appended
to the Attachments.
b. "Attachment" means a sequentially numbered
document appended to this Agreement that
sets forth, at a minimum (i) a description
of certain Services, (ii) any deliverables
(if applicable), (iii) the payment terms for
those Services and (iv) the term or duration
of the Services; and, that, when executed by
both parties, shall be incorporated into
this Agreement and shall be subject to the
terms of this Agreement. To the extent that
any term of an Attachment is inconsistent
with a term of this Agreement, the term
contained in the Attachment shall prevail.
c. "Client Web Site" shall mean that certain
website on the World Wide Web with a URL at
www.expertpractice.com, for public Internet
access, for which Xcare.net is rendering
Services hereunder, as set forth on one or
more Attachments.
d. "Confidential Information" means, without
limitation," information (whether conveyed
orally or in writing) about algorithms,
application programming interfaces,
protocols, trade secrets, computer software,
designs, technology, ideas, know-how,
products, services, processes, data,
techniques, improvements, inventions
(whether patentable or not), works of
authorship,
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ideas, know-how, products, services,
processes, data, techniques, improvements,
inventions (whether patentable or not),
works of authorship, business and product
development plans, customer lists and other
information concerning actual or anticipated
business, research or development, or which
is received by license from a third party.
e. "Effective Date" of this Agreement means
July 20, 1999; and, with respect to each
Attachment, the later of (i) July 20, 1999
or (ii) the first date upon which Xcare.net
actually rendered to Client the Services
specified in that Attachment.
f. "Schedule(s)" means any schedule appended to
an Attachment that sets forth with
reasonable specificity the Services to be
rendered, or deliverables (if applicable) or
the payment terms or other variables
negotiated by the parties with respect to
the Services.
g. "Services" means those certain design and
development, hosting, web site maintenance,
marketing, distribution or other services,
identified and described in an Attachment
that Xcare.net provides pursuant to this
Agreement.
h. "URL" means uniform resource locator and
refers to the particular internet address
which identifies and locates a web site.
3. PAYMENT
a. Xcare.net's Fee. In consideration for
Services performed pursuant to any
Attachment to this Agreement, subject to
paragraph 3.c. below, Client will pay
Xcare.net, upon receipt of an invoice for
Services rendered, the amount negotiated by
the parties prior to execution of such
Attachment. The negotiated amount shall be
set forth on the Schedule B appended to each
Attachment.
b. Out-of-Pocket Expenses. In the event that
Xcare.net renders Services at Client's
location, Client shall reimburse Xcare.net
for reasonable travel expenses incurred by
Xcare.net personnel rendering such Services
at Client's location, so long as Xcare.net
submits bona fide receipts documenting such
expenses in accordance with Client's
reimbursement policy.
c. Remittance. Xcare.net will send Client an
invoice for actual Services rendered at
least monthly. Each invoice will set forth
the Services rendered during the immediately
preceding month, identified by task or
project components, the number of
person-hours devoted to each such task or
project component, the per hour fee for each
person who performed and the aggregate fee
for the billing period. It is the parties
intention that Client may remit payment
either in cash or by issuance of Client's
capital stock. If Client elects to pay
Xcare.net in cash, Client must remit payment
within ten(10)
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business days after receipt of Xcare.net's
second monthly invoice for Services for
which a balance is then due. If Client fails
to remit payment within ten (10) business
days after receipt of Xcare.net's second
invoice, then, commencing on the 11th
business day, Xcare.net may begin to charge
interest on the balance due at a rate of one
and one-half (1.5%) per month or the maximum
rate permitted by law, whichever is less,
until the balance due is paid. If, however,
Client elects to issue capital stock as
remittance for the balance due, the grace
period for payment may be longer, as
follows: Client must provide to Xcare.net a
detailed term sheet relating to the capital
stock proposed to be issued and the terms
and payment by capital stock must be
preapproved by Xcare.net. To allow a
reasonable amount of time for Xcare.net's
review and approval and a reasonable amount
of time for Client's board of directors to
take the required corporate action, Client
may have up to ten (10) business days after
receipt of Xcare.net's third monthly invoice
for Services for which a balance is then due
to issue its capital stock. If Client fails
to issue the stock to Xcare.net within
such ten day period, then Xcare.net may
charge interest on the balance due. Such
interest shall be calculated retroactively
to the date of the first monthly invoice in
the immediately preceding three month
period, at a rate of one and one-half (1.5%)
per month or the maximum rate permitted by
law, whichever is less, until the balance
due is paid.
4. TERM AND TERMINATION.
a. Term. The term of Services for which Client
contracts on each Attachment will commence
on the Effective Date of that Attachment
and, unless an Attachment specifies a
particular term or describes a finite
project for which a deadline is established,
the term for such Services will extend until
terminated as set forth below.
b. Termination for Cause. This entire
Agreement, or any particular Attachment
alone, may be terminated by either party in
the event of (i) any material default in, or
material breach of, any of the terms and
conditions of this Agreement (or any
material default in, or material breach of,
any of the terms and conditions of a
particular Attachment, as the case may be)
by the other party, which default continues
in effect after the defaulting party has
been provided with written notice of default
and thirty (30) days to cure such default;
(ii) the commencement of a voluntary case or
other proceeding seeking liquidation,
reorganization or other relief with respect
to either party of its debts under any
bankruptcy, insolvency, or other similar law
now or hereafter in effect, that authorizes
the reorganization or liquidation of such
party or its debt or the appointment of a
trustee, receiver, liquidator, custodian or
other similar official of it or any
substantial part of its property; (iii)
either party's consent to any such relief or
to the appointment of or taking possession
by any such official in an involuntary case
or other proceeding commenced against it; or
(iv) either party's making a general
assignment for the benefit of creditors; or
either party's becoming insolvent; or either
party taking any corporate action to
authorize any of the foregoing.
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<PAGE> 4
c. Termination for Convenience. This entire
Agreement, or any particular Attachment
alone, may be terminated by either party
upon one hundred twenty (120) days' advance
written notice (or such shorter or longer
period of time as may be set forth in any
particular Attachment).
d. Effect of Termination. If this Agreement is
terminated by either party for any reason,
Client shall remit payment to Xcare.net of
the total undisputed fees associated with
all projects and tasks completed as of the
termination date, as well as all amounts due
and owing for any third-party products or
services purchased by Xcare.net on Client's
behalf. The foregoing shall be without
limitation to the rights and remedies of
either party under this Agreement
e. Survival. Any section of this Agreement
hereto addressing confidentiality,
intellectual property rights, warranties,
disclaimers, indemnification, termination
and governing law shall survive any
termination or expiration of this Agreement
and the Attachment.
5. CONFIDENTIALITY
a. Confidential Information. Each party
acknowledges that, in connection with the
performance of this Agreement, it may
receive certain Confidential Information of
the other party.
b. Covenant. Each party hereby agrees: (i) to
hold and maintain in strict confidence all
Confidential Information of the other party
and not to disclose it to any third party;
and (ii) not to use any Confidential
Information of the other party except as
permitted by this Agreement or as may be
necessary to perform its obligations under
this Agreement. Each party will use at least
the same degree of care to protect the other
party's Confidential Information as it uses
to protect its own Confidential Information
of like importance, and in no event shall
such degree of care be less than reasonable
care.
c. Exceptions. Notwithstanding the foregoing,
the parties agree that Confidential
Information will not include any information
that: (i) is or becomes generally known or
is or becomes part of the public domain
through no fault of the other party, (ii)
the disclosing party authorizes to be
disclosed; (iii) is rightfully received by
the receiving party from a third party
without restriction on disclosure and
without breach of this Agreement; or (iv) is
known to the other party on the Effective
Date from a source other than the party
claiming that the information is
Confidential Information, and not subject to
a confidentiality obligation.
d. Injunctive Relief. Each party acknowledges
that any breach of the provisions of this
section may cause irreparable harm and
significant injury to an extent that may be
extremely difficult to ascertain.
Accordingly, each party agrees that the
other party will have, in addition to any
other rights or remedies available to it at
law or in equity, the right to injunctive
relief, without posting
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<PAGE> 5
any bond (unless required by statute) and
without showing actual damages, to enjoin
any breach or violation of this section.
6. GENERAL PROVISIONS
a. Force Majeure. In the event that either
party is unable to perform any of its
obligations under this Agreement or to enjoy
any of its benefits because of any event
beyond the control of the affected party
including, but not limited to, natural
disaster, acts of God, actions or decrees of
governmental bodies or failure of
communication lines (a "Force Majeure
Event"), the party who has been so affected
shall promptly give written notice to the
other party and shall use its best efforts
to resume performance. Upon receipt of such
notice, all obligations under this Agreement
shall be immediately suspended for the
duration of such Force Majeure Event.
b. Notice. All notices, demands, requests or
other communications required or permitted
under this Agreement will be deemed given
(i) when delivered personally; or (ii) five
(5) days after having been sent by
registered or certified mail, return receipt
requested, postage prepaid; or (iii) one (1)
day after deposit with a commercial
overnight carrier, with written verification
of receipt or (iv) on the same day, if
transmitted by facsimile documented by a
printed transmission report. Any notice
required or permitted under this Agreement
shall be in writing and delivered to the
address set forth below, or such other
address as the other party has provided by
written notice.
c. Waiver. Waiver of any breach or failure to
enforce any term of this Agreement shall not
be deemed a waiver of any breach or right to
enforce which may thereafter occur. No
waiver shall be valid against any party
hereto unless made in writing and signed by
the party against whom enforcement of such
waiver is sought and then only to the extent
expressly specified therein.
d. Severability. In the event any one or more
of the provisions of this Agreement shall
for any reason be held to be invalid,
illegal or unenforceable, the remaining
provisions of this Agreement shall be
unimpaired and the parties will substitute a
new enforceable provision of like economic
intent and effect.
e. Governing Law. This Agreement, the rights
and obligations of the parties hereto, and
any claims or disputes thereto, shall be
governed by and construed in accordance with
the laws of the State of Colorado without
reference to conflicts of law principles.
f. Assignment. Neither party shall have the
right to assign this Agreement without the
prior written consent of the other party;
provided, that either party shall have the
right to assign this Agreement to any person
or entity that acquires or succeeds to all
or substantially all of such party's
business or assets upon written notice to
the other party.
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<PAGE> 6
g. Publicity. If the parties agree that a press
release regarding this Agreement is
appropriate, then, they will collaborate on
a joint press release announcing the
existence of this Agreement. Neither party
will use the other party's name, domain
name, logo, trademark or service mark in
advertising or publicity without obtaining
the other party's prior written consent;
provided, however, that Xcare.net shall have
the nonexclusive right and license to use
Client's name and Client Web Site name,
including the URL thereto, as a Client
reference, and as part of Xcare.net's client
portfolio. Xcare.net shall also have the
right to display its name and logo, as well
as a link to the Xcare.net site, on the
Client Web Site, and to receive credit as
the developer of the Client Web Site,
(collectively, the "Credit"). Such Credit
shall appear on the "home page" of the
Client Web Site in a position that provides
reasonable and appropriate visibility to
Xcare.net in light of industry standards and
Client's requirements.
h. Additional Actions and Documents. Each of
the parties hereto hereby agrees to take or
cause to be taken such further actions, to
execute, deliver and file or cause to be
executed, delivered and filed such further
documents, and will obtain such consents, as
may be necessary or as may be reasonably
requested in order to fully effectuate the
purposes, terms and conditions of this
Agreement.
I. Headings. Section headings contained in this
Agreement are inserted for convenience or
reference only, shall not be deemed to be a
part of this Agreement for any other
purpose, and shall not in any way define or
affect the meaning, construction or scope of
any of the provisions hereof.
j. Execution in Counterparts. This Agreement
may be executed in two counterparts, each of
which shall be deemed to be an original, and
both of which, when taken together, shall
constitute one and the same instrument.
k. Independent Contractors. The relationship of
the parties hereunder shall be that of
independent contractors. Nothing herein
shall be construed to constitute a
partnership between or joint venture of the
parties, nor shall either party be deemed
the agent of the other or have the right to
bind the other in any way without the prior
written consent of the other.
THIS AGREEMENT, INCLUDING THE ATTACHMENTS LISTED ABOVE AND APPENDED
FROM TIME TO TIME, CONSTITUTES THE COMPLETE AND EXCLUSIVE UNDERSTANDING OF THE
PARTIES WITH REFERENCE TO THE SUBJECT MATTER HEREOF. IF THERE IS ANY CONFLICT
BETWEEN THE TERMS AND CONDITIONS OF ANY PROPOSAL AND THE TERMS AND CONDITIONS OF
THIS AGREEMENT, THIS AGREEMENT SHALL CONTROL. THIS AGREEMENT MAY BE MODIFIED,
REPLACED OR RESCINDED ONLY IN WRITING, AND SIGNED BY A DULY AUTHORIZED
REPRESENTATIVE OF EACH PARTY.
SIGNATURE PAGE TO FOLLOW
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PROFESSIONAL SERVICES AGREEMENT
SIGNATURE PAGE
AGREED:
XCARE.NET EXPERT PRACTICE, INC.
6400 S. Fiddler's Green Circle 4025 Camino del Rio South
Suite Number 540 Suite Number 100
Englewood, CO 80111 San Diego, CA 92108
By /s/ LORINE SWEENEY By /s/ JOHN R. SEITZ
-------------------------- ------------------------
Lorine Sweeney, CEO John R. Seitz, CEO
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<PAGE> 8
ATTACHMENT 1
XCARE.NET DEVELOPMENT SERVICES
The parties intend that the terms and conditions set forth in this Attachment
are read in conjunction with the terms and conditions in the Agreement to which
this Attachment is appended.
1. DEFINITIONS
All capitalized terms used in this Attachment and not defined in this Attachment
shall have the meanings ascribed to them in the Agreement.
1.1. "Client Content" shall mean marketing collateral, data, text,
audio files, video files, graphics and other materials provided by Client
(whether owned by Client or licensed to Client by a third party) or developed
hereunder for use with the Client Web Site or product, but excluding the
Xcare.net Software.
1.2 "Development Services" shall mean design, development, and set-up
services as necessary to design and produce the Client Web Site or products
and/or any other consulting and project management services rendered in
accordance with the specifications identified in the appropriate Schedules, if
any, attached hereto.
1.3. "Xcare.net Software" shall mean certain computer program code used
to create seamless cross-platform information flow and process business logic to
combine data from disparate sources. If, and to the extent that, such Xcare.net
Software is used by Xcare.net in rendering Development Services, it shall be
provided in object code form only unless the parties mutually agree in writing
to delivery of source code.
2. DEVELOPMENT SERVICES
2.1. Development Services. Xcare.net shall render Development Services
in accordance with the specifications identified in Schedule 1-A attached
hereto. Any additions, deletions or other changes to Schedule 1-A shall be
mutually agreed to in writing or orally in advance by both parties and shall be
memorialized in a revised Schedule 1-A pursuant to the procedure set forth in
Section 2.3 below for Change Orders. All services shall be performed at
Xcare.net's offices unless otherwise agreed by the parties. In the event that
services are performed at Client's location, Client shall provide Xcare.net at
no charge with all necessary facilities and equipment, including without
limitation, computer time on Client's computers and office space, sufficient to
render the Services contemplated hereunder. Client shall deliver to Xcare.net
all Client Content selected by Client for incorporation into the Client Web Site
or product in digitized format in accordance with the delivery schedule set
forth in Schedule 1-A. In the event that Client fails to deliver the Client
Content in accordance with Schedule 1-A, Xcare.net's schedule for delivery of
Development Services shall be extended by the number of days that delivery of
the Client Content was delayed, unless Xcare.net
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notifies Client that this extension will not rectify Xcare.net's scheduling
interruption resulting from Client's delay. If Client determines that,
notwithstanding the delay of Client's deliverables, timely delivery of
Xcare.net's Development Services is critical, then such delay may also result in
additional charges to Client, in which case the parties shall mutually agree
upon a new delivery schedule and fees with respect to the expedited rendition of
the Development Services.
2.2. Acceptance of Deliverables. Within fifteen (15) business days
after the delivery to Client of any deliverable pursuant to Schedule 1-A, Client
shall provide Xcare.net with written notice of any failure of any deliverable to
materially conform to the functional specifications set forth in Schedule 1-A.
Xcare.net and Client shall review the objections, and Xcare.net will use
commercially reasonable efforts to correct any material nonconformities with the
functional specifications and provide Client with a revised deliverable within
fifteen (15) days after such review. Client shall have deemed to have accepted
the deliverable if Xcare.net does not receive written notice of Client's
objections within the fifteen (15) day period after the original delivery.
2.3. Change Orders. If Client desires to make changes to an existing
Schedule, the parties shall mutually agree upon an additional or revised
Schedule for each new Change Order. Each such Schedule shall be successively
numbered (e.g., 1.A, 1.B, etc.) and shall be executed by the parties. Any
revised Schedule(s) shall be subject to the terms and conditions of this
Agreement.
3. OWNERSHIP AND LICENSE RIGHTS
3.1. Property Rights and Ownership. The parties' respective rights to
Client Content and Xcare.net Software shall be as set forth below. For purposes
of this Agreement, the term "ownership" shall refer to ownership of all
intellectual property rights including, but not limited to, all patent,
copyright, trade secret and trademark rights, as applicable, with respect to the
subject intellectual property.
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<TABLE>
<CAPTION>
Intellectual Property Elements Ownership/Rights
------------------------------ ----------------
<S> <C>
Client Content, including all Client Content that is Client has sole ownership.
modified by Xcare.net ("Modified Content"); Client and
server-side code; graphical elements and HTML files
that contain Client Content, and modifications to Client
Content as a result of Client's usage of self-authoring
tools.
Content created for Client by Xcare.net and accepted and Client has sole ownership.
paid for by Client, as well as commissioned. Content
authored by third parties specifically for use in
connection with this Agreement and paid for by Client
(e.g., original illustrations or graphics).
Domain name for Client Web Site. Client has sole ownership.
Server usage report data/statistics generated by the Client has sole ownership of data/statistics, and
Xcare.net Software in form and substance as set forth Xcare.net has a license pursuant to Section 3.3 below.
in the applicable Schedule or as mutually agreed by
the parties.
Commercially available third-party software which is Third parties have ownership, and Client shall be
incorporated into the Xcare.net Software. informed of all third-party software that Client may
need to license at Client's own expense.
Xcare.net Software developed by or for Xcare.net in Xcare.net has sole ownership of such Xcare.net
connection with this Agreement for Client. Software. Client shall be granted a license to use the
Xcare.net Software as set forth in Section 3.2.
Xcare.net supplied material developed generally to Xcare.net has sole ownership of such developed
support Xcare.net products and/or service offerings (e.g. material. Client shall be granted a license to use the
http configuration). Xcare.net Software as set forth in Section 3.2 below.
</TABLE>
3.2. License to Client. If Xcare.net designs and develops the Client
Web Site or product such that any Xcare.net Software is required to operate and
display the Client Web Site, then Xcare.net will promptly notify Client in
writing and will grant Client a non-exclusive, non-transferable world-wide and
perpetual license to use the Xcare.net Software in object code version only to
operate and display the Client Web Site or product. If Xcare.net designs and
develops the Client Web Site such that any Xcare.net Software is required for
Client's internal business needs, then Xcare.net grants Client a non-exclusive,
non-transferable world-wide and perpetual license to use
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<PAGE> 11
the Xcare.net Software in object code version only for Client's internal
business needs. In either case, Xcare.net agrees to execute a conventional
escrow agreement pursuant to which the parties will establish an escrow account
with a recognized third party escrow agent to hold a complete and current copy
of the source code for the applicable Xcare.net Software; and, to the extent
that Xcare.net updates such Xcare.net Software from time to time, Xcare.net
agrees to promptly place each such update in the escrow account for the benefit
of Client. Client may grant a sublicense to a third party that Client engages to
host the Client Web Site; provided, that such third party agrees in writing to
be bound by the license and confidentiality restrictions set forth in this
Agreement. Client is prohibited from duplicating and/or distributing any
Xcare.net Software without the prior written consent of Xcare.net; provided,
however that Client may copy the Xcare.net Software only as needed for
reasonable ordinary backup or disaster recovery procedures. Client may use the
backup copies only if the installed copy is lost or destroyed or the hardware on
which the installed copy is installed becomes inoperable, provided that the use
of said backup copies is discontinued immediately when the original hardware
becomes operable.
3.3. License to Xcare.net. For the period of time that Xcare.net is
rendering Development Services, Client grants Xcare.net a non-exclusive,
non-transferable license to use, copy, and modify the Client Content in
connection with Xcare.net's performance of the Development Services.
3.4. Supporting Documents. Each party agrees to execute any additional
documents deemed reasonably necessary to perfect the other party's rights with
respect to the intellectual property elements set forth above.
3.5. No Reverse Engineering. All rights not expressly granted hereunder
are reserved by Xcare.net. Without limiting the foregoing, Client may not
reverse engineer, reverse assemble, decompile or otherwise attempt to derive the
source code from the Xcare.net Software.
3.6. Proprietary Notices. In the event that Client uses any Xcare.net
Software, all copies of the Xcare.net Software and other Xcare.net supplied
materials used by Client shall contain copyright and other proprietary notices
in the same manner in which Xcare.net incorporates such notices in the Xcare.net
Software or in any other manner requested by Xcare.net. Client agrees not to
remove, obscure or obliterate any copyright notice, trademark or other
proprietary rights notices placed by Xcare.net on or in the Xcare.net Software.
4. LIMITED WARRANTY
4.1. Software Warranty. In the event that Client uses any Xcare.net
Software, then, subject to the limitations set forth in this Agreement,
Xcare.net warrants only to Client that the Xcare.net Software furnished
hereunder when properly installed, properly used and unmodified by Client, will
substantially conform to the functional specifications set forth in Schedule
1-A___. Xcare.net's warranty shall extend for a period of ninety (90) days from
the date that the final deliverables specified in Schedule 1-A are delivered to
Client ("Warranty Period"). Xcare.net's sole responsibility under this Section
shall be to use reasonable commercial efforts to promptly correct material
errors, or at Xcare.net's option, to refund Client's fees paid for the Xcare.net
Software after deinstallation and return thereof. All warranty claims not made
in writing or not received by Xcare.net within the Warranty Period shall be
deemed waived. Xcare.net's warranty obligations are solely for the benefit of
Client, who has no authority to extend or transfer this warranty to any other
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person or entity.
4.2. XCARE.NET DOES NOT WARRANT THAT THE USE OF THE XCARE.NET SOFTWARE
WILL BE UNINTERRUPTED OR ERROR FREE OR THAT THE SPECIFICATIONS WILL MEET
CLIENT'S REQUIREMENTS. EXCEPT FOR THE EXPRESS WARRANTIES STATED ABOVE, XCARE.NET
DOES NOT MAKE ANY WARRANTY AS TO THE XCARE.NET SOFTWARE OR THE RESULTS TO BE
OBTAINED FROM USE OF THE XCARE.NET SOFTWARE. EXCEPT FOR THE EXPRESS WARRANTIES
SET FORTH ABOVE, THE XCARE.NET SOFTWARE IS USED ON AN "AS-IS" BASIS WITHOUT
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE INTERNET OR USE OF INFORMATION IN CONNECTION WITH THE SOFTWARE.
5. INTELLECTUAL PROPERTY INDEMNIFICATION
5.1. Xcare.net.
5.1.1. Indemnification and Defense. Xcare.net, at its own cost
and expense, shall indemnify and defend Client and its officers, directors,
employees and contractors against any claim that the Xcare.net Software
infringes a third-party United States copyright or trade secret or other
intellectual property right, and shall pay any settlements entered into or
damages awarded against Client, or its officers, directors, employees and
contractors, to the extent related to such claim, provided that (i) Client
notifies Xcare.net promptly in writing of the claim; (ii) Xcare.net has the sole
control of the defense and all related settlement negotiations; and (iii) Client
provides Xcare.net with all reasonably necessary assistance, information, and
authority to perform the foregoing at Xcare.net's expense. Xcare.net agrees
that, in the event any action, proceeding or investigation, administrative,
legal or otherwise, is initiated against Xcare.net in connection with or arising
out of Xcare.net's performance under this Agreement or any attachment appended
to this Agreement, Xcare.net shall not (i) implead Client in any such action,
proceeding or investigation, (ii) initiate any proceeding or investigation or
file any separate action, administrative, legal or otherwise (including any
cross-claim or counter-claim), against Client or (iii) seek to recover from
Client any claims, judgments, costs, liabilities, damages or expenses, including
any attorneys' fees ("Losses"), or seek to obtain contribution or indemnity from
Client with respect to any such Losses, without regard to fault on the part of
any person or entity. For purposes of this paragraph the term Client includes
any parent, subsidiary or affiliate of Client, Client's insurance carrier and
the officers, directors, employees, agents and contractors of each of the
foregoing.
5.1.2. Limitation on Liability. In the event that Xcare.net
provides Client any Xcare.net Software in rendering Development Services to
Client, then Xcare.net shall have no liability for any claim of infringement
based on (i) use by Client of other than the current update of the Xcare.net
Software if the infringement would have been avoided by uses of the current
update; (ii) modifications, adaptations or changes to the Xcare.net Software not
made by Xcare.net; (iii) the combination or use of the materials furnished
hereunder with materials not furnished by Xcare.net if such infringement would
have been avoided by use of the Xcare.net materials alone; or (iv) use or
incorporation of Client Content or Modified Content. In the event the Xcare.net
Software is held to, or Xcare.net believes is likely to be held to, infringe the
intellectual property rights of a third party, Xcare.net shall have the right at
its sole option and expense to (i) substitute or modify the Xcare.net
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<PAGE> 13
Software so that it is non-infringing and qualitatively and functionally
equivalent to the Xcare.net Software; (ii) obtain for Client, at Xcare.net's
expense, a license to continue using the Xcare.net Software; or if neither (i)
nor (ii) is commercially reasonable, Xcare.net shall have the right to terminate
this Attachment immediately upon written notice to Client, but shall make Client
whole by reimbursing Client for reasonable expenses associated with development
by a third party of new software that is non-infringing and qualitatively and
functionally equivalent to the Xcare.net Software.
5.1.3 Work-Made-For-Hire; Assignment. As set forth in Section
3.1, all material on any media whatsoever, excluding specifically any Xcare.net
Software ("Material"), developed or prepared by Xcare.net for Client under this
Agreement, whether completed or in the process of creation, shall be deemed to
be "work-made-for-hire" and made in the course of the Development Services
rendered hereunder and shall belong exclusively to Client. Notwithstanding the
foregoing, in the event that any of the Material is deemed by a court of
competent jurisdiction not to be a work-made-for-hire under the U.S. copyright
laws, this Agreement shall operate an irrevocable assignment by Xcare.net to
Client of all rights of authorship to the Material arising under the U.S.
copyright laws. To that end, Xcare.net agrees to execute and deliver all
documents requested by Client in connection therewith. No rights of any kind in
the Material are reserved to Xcare.net.
5.1.4 Xcare.net warrants and represents:
A. the Material created by Xcare.net in rendering Development
Services is original to Xcare.net;
B. the Material has not been published, and shall not be
published, under circumstances which have caused, or may
cause, loss of copyright;
C. neither the Material, nor any portion thereof, violates any
patent, copyright, trade secret or other proprietary right of
any other party;
D. the Material will conform in all respects to Client's
specifications and other requirements;
E. in developing the Material, Xcare.net shall not utilize any
confidence, trade secrets or copyright protected information
or material of any other person or entity;
F. Xcare.net's employees have expertise in performing the
Services;
G. Xcare.net's employees shall comply with all relevant laws,
regulations, ordinances, and other governmental orders of all
relevant governmental authorities and bodies in providing the
Development Services; and,
H. in recognition of the critical nature of timely completion of
the Development Services, Xcare.net has, and shall maintain,
sufficient resources, facilities, capacity and manpower to
ensure that all Development Services will be performed by
qualified personnel in a workmanlike manner, and in conformity
with the highest standards of Xcare.net's industry.
5.2. Client.
5.2.1. Client hereby represents and warrants to Xcare.net that
(i) Client has secured all necessary consents, permissions, clearances,
authorizations and waivers for the use of Client Content or Modified Content,
including without limitation, all text, pictures, audio, video, logos and copy
contained in all Client Content or Modified Content; (ii) the use of Client
Content as contemplated herein shall not infringe the copyright, trademark or
other intellectual property
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<PAGE> 14
rights of any party, or constitute defamation, invasion of privacy, or the
violation of any right of publicity or any other right of any party; and (iii)
Client has complied and shall comply with all legislation, rules and regulations
regarding Client Content.
5.2.2. Client shall indemnify and hold harmless Xcare.net, its
directors, officers, parent company, and affiliates, from any and all liability,
costs and expenses (including attorney's fees) arising in connection with any
third party claim or action brought against Xcare.net, or any of its directors,
officers, parent company, and affiliates, relating to Client Content or Modified
Content, provided (i) Xcare.net notifies Client promptly in writing of such
claim, (ii) Client has the sole control of the defense and all related
settlement negotiations, and (iii) Xcare.net provides Client with all reasonably
necessary assistance, information and authority to perform the foregoing at
Client's expense.
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<PAGE> 15
ATTACHMENT 1
SIGNATURE PAGE
AGREED:
XCARE.NET EXPERT PRACTICE, INC.
6400 S. Fiddler's Green Circle 4025 Camino del Rio South
Suite Number 540 Suite Number 100
Englewood, CO 80111 San Diego, CA 92108
By /s/ LORINE SWEENEY By /s/ JOHN R. SEITZ
-------------------------- ------------------------
Lorine Sweeney, CEO John R. Seitz, CEO
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<PAGE> 16
SCHEDULE 1-A
DEVELOPMENT SERVICES
1. WEB SITE AND PRODUCT DESIGN, DEVELOPMENT AND IMPLEMENTATION
2. PROJECT MANAGEMENT AND ON-GOING SUPPORT
3. GENERAL SITE MANAGEMENT ACTIVITIES AND ATTENDANCE ON TELEPHONE
CALLS AND AT MEETINGS
DELIVERABLES
1. DEPLOYMENT OF THE WWW.EXPERTPRACTICE WEB SITE (VERSION 1)
o Phase I - ExpertPractice Architectural Envisioning
Links to products, outside partners or vendors:
a) RPM/ITS
b) HOTSPACE
c) RISK MANAGEMENT
d) SNAPPNET
e) CREDENTIALSAGENT
f) CREDENTIALS PROFILE
o Phase II - Application and Data Architecture development
o Phase III - Implementation
2. MODIFICATIONS TO THE VERSION 1 OF WWW.EXPERTPRACTICE WEB SITE TO ADD OR
MODIFY THE FOLLOWING LINKS TO SERVICES/PRODUCTS TO PRODUCT (VERSION 2);
g) CLICKTHINGS! (FORMERLY HOTSPACE)
h) SITE ADMINISTRATION PAGES-- PHASE I
3. DEPLOYMENT OF EXPERTPRACTICE.COM WEB SITE VERSION 3, FUNCTIONAL
SPECIFICATIONS AND TIMELINE FOR THE RELEASE SHOULD BE DELIVERED BY FEBRUARY 1,
2000 THE CURRENT PRODUCTS AND FEATURES DEFINED ARE:
i) MANAGE YOUR PRACTICE(DEFINED AS A PRODUCT)
j) SITE ADMINISTRATION PAGES-- PHASE 2
k) OTHER PRODUCTS, OUTSIDE PARTNERS OR VENDOR
PRODUCTS SHOULD BE DEFINED IN THE FUNCTIONAL
SPECIFICATIONS.
4) WEB SITE AND PRODUCT MANAGEMENT SERVICES -- ONGOING, FOR THE
EXPERTPRACTICE.COM ECOMMERCE SITE AND ANY PRODUCTS DEVELOPED BY XCARE.NET
16
<PAGE> 17
SCHEDULE 1-B
FEES and PAYMENT SCHEDULE
<TABLE>
<CAPTION>
DEVELOPMENT SERVICES FEES PER HOUR SERVICES INCLUDE
- -------------------- ------------- ----------------
<S> <C> <C>
TECHNICAL DEVELOPMENT $ * WEB SITE AND/OR PRODUCT DEVELOPMENT
PROJECT MANAGEMENT $ * PROJECT MANAGEMENT ACTIVITIES
INCLUDING MEETING, VISITS, AND
MANAGEMENT OF PROJECT TEAM.
PRODUCT MANAGEMENT $ * WEBSITE AND/OR PRODUCT MANAGEMENT
</TABLE>
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
17
<PAGE> 1
HEALTHGRADES CONTENT DISTRIBUTION AGREEMENT
THIS AGREEMENT is made by and between HealthGrades.com, Inc., a
Delaware corporation with its principal offices located at 44 Union Boulevard,
Suite 600, Lakewood, CO 80028 and XCare.net, a Delaware corporation with offices
at 6400 South Fiddler's Green Circle, Suite 540, Englewood, CO 80111 ("Company")
and is effective as of January 3, 2000 (the "Effective Date").
RECITALS
This Agreement is entered into with reference to the following facts:
A. HealthGrades maintains on its Web Site (as defined below) and makes
available to Internet users certain healthcare-related content and resources,
including but not limited to proprietary ratings of physicians, hospitals and
health plans;
B. HealthGrades wishes to grant certain licenses to Company with
respect to specific portions of its Web Site as set forth in this Agreement, and
Company wishes to receive such licenses.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and good and valuable consideration which the parties hereby
acknowledge, the parties agree as follows:
AGREEMENT
1. DEFINITIONS.
As used herein, the following terms have the following defined
meanings:
"ADVERTISING REVENUE" means net revenue (gross revenue less
commissions and direct costs associated with such revenue, not to exceed 30%)
received by HealthGrades or Company for Sponsorships or delivering Impressions
of Banner Advertisements served on Bridge Pages or Search Results Pages.
"BANNER ADVERTISEMENT" shall mean a rotating banner advertisement of
468 x 60 pixels located at the top and/or bottom of a Web Page.
"BRIDGE PAGE" means a page to be jointly designed by Company and
HealthGrades, and implemented by Company pursuant to the terms of this
Agreement, that contains both the Company Marks and the HealthGrades Marks.
These pages shall be served from Company's servers and shall contain
HealthGrades' Content consistent with the technical specifications as set forth
in Exhibit D. In no case shall a Bridge Page contain Search Results.
"CLIENT" means any individual entity (typically included in Target
Markets) that enters into a contract with HealthGrades to provide HealthGrades
services.
"COMPANY MARKS" means those Trademarks of Company set forth on Exhibit
B hereto.
"COMPANY WEB SITES" means the following Web Sites maintained by or on
behalf of Company and its affiliates: www.realage.com.
"CONTENT" means the portion of health care related information on
HealthGrades' Web Site identified in Exhibit A.
"HEALTHGRADES MARKS" means those Trademarks of HealthGrades set forth
on Exhibit B hereto.
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<PAGE> 2
"IMPRESSION" means a user's viewing of any discrete screen containing
any Banner Advertisement.
"HEALTHGRADES WEB SITE" means the Web Site which is located at
www.HealthGrades.com.
"INTELLECTUAL PROPERTY RIGHTS" MEANS ANY PATENT, COPYRIGHT, TRADEMARK,
OR TRADE SECRET RIGHTS, moral rights and other intellectual property rights
arising under the laws of any jurisdiction.
"SEARCH RESULTS PAGE" means any page hosted on the HealthGrades Web
Site which displays Content in response to queries and searches from Bridge
Pages.
"SPONSORSHIPS" means any payment received by Company or HealthGrades
from a third party for promoting the name or product of such third party on the
Bridge Page or Search Results Pages.
"TRADEMARKS" means any trademarks, service marks, trade dress, trade
names, corporate names, proprietary logos or indicia and other source or
business identifiers.
"TARGET MARKETS" means payer organizations, provider groups (i.e.
IDNs, large clinics, etc...), and suppliers (i.e. labs, pharmaceutical
companies, etc...)
2. CERTAIN RIGHTS GRANTED.
2.1 HealthGrades Grant. Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, HealthGrades hereby grants to
Company a nonexclusive, limited purpose, revocable license to integrate the
Content per the technical specifications as set forth in Exhibit D for the
purpose of selling the HealthGrades.com/Xcare.net product as described in
Exhibit E.
2.2 LIMITATIONS. For the purpose of this agreement it is assumed that
no advertising will be sold on the customized sites created for the delivery of
HG Services unless otherwise specified by the Company or the Company's client.
HealthGrades shall require users to "click through" its standard end user
agreement prior to accessing any search results on the Search Results Page, and
Company agrees not to interfere with this process. The parties agree that the
Content specified on Exhibit A is the only Content licensed to Company pursuant
this Agreement, and that other content or material from the HealthGrades Web
Site may only be used by Company with the written permission of HealthGrades.
2.3 HEALTHGRADES AND COMPANY'S MARKS LICENSES.
(A) HealthGrades hereby grants to Company a nonexclusive, limited
purpose, revocable license during the term of this Agreement to
accurately use, reproduce, publish, and display the HealthGrades
Marks subject to reasonable quality control standards which
HealthGrades shall communicate to Company from time to time: (a)
on the Company Web Sites in connection with the posting of
hyperlinks to the HealthGrades Web Site; and (b) in promotional
and marketing materials, content directories and indexes, and
electronic and printed advertising, publicity, press releases,
newsletters and mailings regarding Company's relationship with
HealthGrades pursuant to this Agreement.
(B) Company hereby grants to HealthGrades a nonexclusive, limited
purpose, revocable license during the term of this Agreement to
accurately use, reproduce, publish, and display the Company Marks,
subject to reasonable quality control standards which Company
shall communicate to HealthGrades from time to time, (a) on the
Search Results Pages, at the discretion of HealthGrades: and (b)
in promotional and marketing materials, content directories and
indexes, and electronic and printed advertising, publicity, press
releases, newsletters and mailings regarding HealthGrades'
relationship with Company pursuant to this
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<PAGE> 3
Agreement. This license entitles but does not require HealthGrades
to use the Company Marks for the foregoing purposes.
2.4 APPROVAL OF TRADEMARK USAGE. Except as specified in Section 2.3
above, both parties to this Agreement shall not use or exploit in any manner
each other's Trademarks, except in such manner and media as the other party may
consent to in writing, which consent shall not be unreasonably withheld or
delayed.
2.5 NONEXCLUSIVITY. Each party acknowledges and agrees that the rights
granted to the other party in this Section 2 and this Agreement are
non-exclusive, and that, without limiting the generality of the foregoing,
nothing in this Agreement shall be deemed or construed to prohibit either party
from participating in similar business arrangements as those described herein
including soliciting third party advertisements or other materials, serving
advertisements or other materials to third parties' Web Sites, or hosting or
permitting third parties to place advertisements on such party's Web Site,
whether or not, in each such case, such advertisements are competitive with the
products, services or advertisements of the other party.
3. CERTAIN OBLIGATIONS OF THE PARTIES.
3.1 DESIGN OF BRIDGE PAGES AND SEARCH RESULTS PAGES. The parties agree
to work together in good faith to design the Bridge Pages and Search Results
Pages, which shall include the Company and HealthGrades Marks. Without limiting
the generality of the foregoing, all Bridge Pages shall prominently display the
HealthGrades logo, pursuant to the license granted in Section 2.3 above.
3.2 ACCESSIBILITY OF WEB SITES. Each party will use commercially
reasonable efforts to make its Web Sites accessible to end users and take
reasonable measures to avoid interruptions in service. For the purposes of this
Agreement, the Bridge Pages shall be deemed to be a component of Company's Web
Sites and the Search Results Pages shall be deemed to be a component of
HealthGrades' Web Site. The parties agree that users must furnish HealthGrades
with the following information in order to access the "Report Card" and "Tools"
Content: (i) ZIP code, (ii) date of birth, (iii) gender, (iv) email address, and
(v) password. HealthGrades will place a cookie on the users computer to
facilitate ease of accessing these tools in the future. Company and HealthGrades
agree that each shall have an equal and independent right to use the user
registration information subject only to any agreements with users upon their
registration.
3.3 IMPRESSION INFORMATION. Company shall track, and within fifteen
(15) days after the last day of each calendar month, provide to HealthGrades in
electronic form, the number of Impressions served by Company on Bridge Pages. In
addition, Company shall provide HealthGrades with password-protected access to
the Company reporting server, with the intent of enabling HealthGrades to
monitor Impressions on the Bridge Pages as frequently as Company may wish.
3.4 PUBLICITY. The parties shall work together as mutually agreed upon
to issue at least two publicity and general marketing communications concerning
a) the execution of this agreement and b) the launch of the HealthGrades Web
Site on the Company Web Sites. Neither party shall issue such publicity and
general marketing communications without the prior written consent of the other
party (not to be unreasonably withheld). Neither party shall disclose the terms
of this Agreement to any third party other than to counsel, auditors, and
financial advisors, except as required by law.
3.5 MARKETING. Xcare.net shall use its best efforts to sell the
HealthGrades content to the Target Markets under the pricing model outlined in
Exhibit C.
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4. ADVERTISING AND REVENUE SHARE
4.1 PLACEMENT OF ADVERTISEMENTS AND SPONSORSHIPS. The parties hereby
agree that only Company shall have the right to solicit the sale of and sell
advertisements and sponsorships relating to the Content that appears on the
Bridge Pages. Similarly, Company and HealthGrades agree that only
HealthGrades.com shall have the right to solicit the sale of and sell
advertisements and sponsorships on the Search Results Pages.
4.2 REMUNERATION AND RECORDS. The parties agree to share in the
Advertising Revenues as set forth on Exhibit C. Advertising Revenue payments
will paid within fifteen (15) days following the last day of the calendar month
in which the applicable Advertising Revenues are received. Said payments shall
commence the first month following the implementation of the Results Pages.
HealthGrades will provide Company a report, along with said payment, setting
forth Advertising Revenues received by it for such month and the percentage
payable to Company during the term, HealthGrades shall maintain accurate records
of Banner Advertisements served to the Search Results Pages, Impressions
thereof, and Advertising Revenues received and calculations of the fees payable
to Company.
HealthGrades may, during the term of this Agreement, implement an
electronic data interchange or other automated reporting/remittance system to
assist in the maintenance of HealthGrades agreements. Company agrees to
cooperate with HealthGrades in the implementation of such a system to the extent
that parties may be required to submit payments, reports or other data.
4.3 AUDIT. HealthGrades shall have the right, upon reasonable advance
notice to Company, to review those records of Company necessary to verify the
Advertising Revenues payable and paid to HealthGrades, but not more often than
twice per year. Any such audit will be conducted at HealthGrades' expense and at
such times and in such a manner as not to unreasonably interfere with Company's
normal operations. If any such audit reveals an error of at least 5% in the
payment of Advertising Revenues in favor of HealthGrades, then Company shall
immediately pay to HealthGrades both the costs of such audit and any such
deficiency.
5. WARRANTIES, INDEMNIFICATION AND LIMITATION OF DIRECT LIABILITY
5.1 WARRANTIES
Each party to this Agreement represents and warrants to the other
party that:
a) it has the full corporate right, power and authority to enter into
this Agreement and to perform the acts required of it hereunder;
b) its execution of this Agreement by such party and performance of
its obligations hereunder, do not and will not violate any
agreement to which it is a party or by which it is bound;
c) when executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of such party, enforceable
against it in accordance with its terms; and
d) its respective Web Site(s) and the content contained therein does
not contain any material that is obscene, libelous or defamatory,
or infringes any third party Intellectual Property rights in the
United States;
e) it shall comply with all applicable local, state, federal,
national, and international laws and regulations in performing its
obligations hereunder.
5.2 INDEMNIFICATION. Each party (the "Indemnifying Party") will
defend, indemnify and hold harmless the other party and its parent, subsidiary,
and affiliates, if any (collectively, the "Indemnified Party"), the directors,
officers, employees and agents of the Indemnified Party, from and against any
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and all claims, costs, losses, damages, judgments and expenses (including
reasonable attorneys' fees) arising out of or in connection with any third-party
claim alleging any breach of such party's representations or warranties set
forth in this Agreement. The Indemnified Party shall promptly notify the
Indemnifying Party of any such claim of which it becomes aware and shall: (a) at
the Indemnifying Party's expense, provide reasonable cooperation to the
Indemnifying Party in connection with the defense or settlement of any such
claim; and (b) at the Indemnified Party's expense, be entitled to participate in
the defense of any such claim. The Indemnifying Party shall not acquiesce to any
judgment or enter into any settlement that adversely affects the Indemnified
Party's rights or interests without prior written consent of the Indemnified
Party.
5.3 LIMITATION OF LIABILITY; DISCLAIMER.
(a) Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL,
PUNITIVE, OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES), ARISING DIRECTLY OR INDIRECTLY FROM THIS
AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS
OR LOST BUSINESS.
(b) No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY HEREBY SPECIFICALLY
DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE),
AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS ANY CLAIM IN TORT (INCLUDING
NEGLIGENCE), IN EACH CASE, REGARDING THEIR WEB SITES, ANY PRODUCTS OR SERVICES
DESCRIBED THEREON, THE CONTENT, ANY BANNER ADVERTISEMENTS, OR ANY OTHER ITEMS OR
SERVICES PROVIDED UNDER THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY'S WEB SITES AND THE
CONTENT (INCLUDING ANY SERVERS OR OTHER HARDWARE, SOFTWARE AND ANY OTHER ITEMS
USED OR PROVIDED BY THE OTHER PARTY OR ANY THIRD PARTIES IN CONNECTION WITH
HOSTING THE HEALTHGRADES WEB SITE, COMPANY WEB SITES, OR THE CONTENT OR
PERFORMANCE OF ANY SERVICES HEREUNDER) ARE PROVIDED "AS IS" AND THAT NEITHER
PARTY MAKES ANY WARRANTY THAT IT WILL CONTINUE TO OPERATE ITS WEB SITES IN THEIR
CURRENT FORM (EXCEPT AS NECESSARY TO PERFORM ITS OBLIGATIONS HEREUNDER), THAT
ITS WEB SITES WILL BE ACCESSIBLE WITHOUT INTERRUPTION, THAT THE SITES WIlL MEET
THE SPECIFIC REQUIREMENTS OR EXPECTATIONS OF THE OTHER PARTY (EXCEPT AS
NECESSARY TO PERFORM ITS OBLIGATIONS HEREUNDER), OR THAT THE CONTENT OR ANY
OTHER ANY MATERIALS ON ITS WEB SITES OR THE SERVERS AND SOFTWARE THAT MAKES ITS
WEB SITES AVAILABLE ARE FREE FROM ERRORS, DEFECTS, DESIGN FLAWS OR OMISSIONS.
6. TERM AND TERMINATION.
6.1 TERM. The term shall commence on the Effective Date of this
Agreement and, unless earlier terminated as provided below, shall end on the one
year anniversary thereof.
6.2 TERMINATION. Either party may terminate the Agreement upon not
less than thirty (30) days prior written notice to the other party of any
material breach hereof by such other party, provided that such other party has
not cured such material breach within such thirty (30) day period. Either party
may
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<PAGE> 6
terminate this Agreement without cause, for any reason, on ninety (90) days
prior written notice to Company.
6.3 EFFECT OF TERMINATION. Upon termination or expiration of the term
for any reason, all rights and obligations of the parties under this Agreement
shall be extinguished, except that: (a) all payment obligations accrued
hereunder to the date of termination or expiration shall survive such
termination or expiration; and (b) the rights and obligations of the parties
under Sections 5, 6, 7 and 8 shall survive such termination or expiration.
7. INTELLECTUAL PROPERTY
7.1 COMPANY. As between the parties, Company retains all right, title
and interest in and to the Company Web Sites (including the Bridge Page, any and
all content, data, URLs, domain names, technology, software, code, user
interfaces, "look and feel", Trademarks and other items posted thereon or used
in connection or associated therewith; but excluding any Content, HealthGrades
Marks, software, or other material or content supplied by HealthGrades) and the
Company Marks along with all Intellectual Property Rights associated with any of
the foregoing. For the avoidance of doubt, to the extent HealthGrades supplies
software solutions, code, documentation, data, files, images, scripts, or other
tools ("Tools") to Company to facilitate establishing the Bridge Page, such
Tools are owned and shall continue to be owned by HealthGrades, whether or not
such Tools are incorporated into the Bridge Page. All goodwill arising out of
HealthGrades' use of any of the Company Marks shall inure solely to the benefit
of Company.
7.2 HEALTHGRADES. As between the parties, HealthGrades retains all
right, title and interest in and to the Content and the HealthGrades Web Site
(including, without limitation, the Search Results Page, any and all content,
data, URLs, domain names, technology, software, code, user interfaces, "look and
feel", Trademarks and other items posted thereon or used in connection or
associated therewith; but excluding any material or content or Company Marks
supplied by Company) and the HealthGrades Marks, along with all Intellectual
Property Rights associated with any of the foregoing. All goodwill arising out
of Company's use of any of the HealthGrades Marks shall inure solely to the
benefit of HealthGrades.
7.3 PROPRIETARY RIGHTS NOTICES. HealthGrades and Company acknowledge
that the Search Results Pages may contain proprietary rights notices, including
those designating third party content supplied by HealthGrades content
providers.
7.4 OTHER TRADEMARKS. HealthGrades shall not register or attempt to
register any of the Company Marks or any Trademarks which Company reasonably
deems to be confusingly similar to any of the Company Marks. Company shall not
register or attempt to register any of the HealthGrades Marks or any Trademarks
which HealthGrades reasonably deems to be confusingly similar to any of the
HealthGrades Marks.
7.5 FURTHER ASSURANCES. Each party shall take, at the other party's
expense, such reasonable action (including, without limitation, execution of
affidavits or other documents) as the other party may reasonably request to
effect, perfect or confirm such other party's ownership interests and other
rights as set forth above in this Section 7.
8. GENERAL PROVISIONS
8.1 CONFIDENTIALITY. Each party (the "Receiving Party") undertakes to
retain in confidence the terms of this Agreement and all other non-public
information and know-how of the other party disclosed or acquired by the
Receiving Party pursuant to or in connection with this Agreement which is either
designated as proprietary and/or confidential or by the nature of the
circumstances surrounding disclosure, ought in good faith to be treated as
proprietary and/or confidential ("Confidential Information");
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provided that each party may disclose the terms and conditions of this Agreement
to legal and financial consultants in connection with its business. Each party
agrees to use commercially reasonable efforts to protect Confidential
Information of the other party, and in any event, to take precautions at least
as great as those taken to protect its own confidential information of a similar
nature. Company acknowledges that the terms of this Agreement are Confidential
Information of HealthGrades. The foregoing restrictions shall not apply to any
information that: (a) was known by the Receiving Party prior to disclosure
thereof by the other party; (b) was in or entered the public domain through no
fault of the Receiving Party; (c) is disclosed to the Receiving Party by a third
party legally entitled to make such disclosure without violation of any
obligation of confidentiality; (d) is required to be disclosed by applicable
laws or regulations (but in such event, only to the extent required to be
disclosed); or (e) is independently developed by the Receiving Party without
reference to any Confidential Information of the other party. Promptly upon
request of the other party, or in any event upon any termination or expiration
of this Agreement, each party shall return to the other all materials, in any
medium, which contain, embody, reflect or reference all or any part of any
Confidential Information of the other party. Each party acknowledges that breach
of this provision by it would result in irreparable harm to the other party, for
which money damages would be an insufficient remedy, and therefore that the
other party shall be entitled to seek injunctive relief to enforce the
provisions of this Section 8.1.
8.2 INDEPENDENT CONTRACTORS. Company and HealthGrades are independent
contractors under this Agreement, and nothing herein shall be construed to
create a partnership, joint venture, franchise or agency relationship between
Company and HealthGrades. Neither party has any authority to enter into
agreements or make representations or warranties of any kind on behalf of the
other party.
8.3 ASSIGNMENT. Neither party may assign this Agreement or any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of the other party, not to be unreasonably withheld; except that
either party may, without the other party's consent, assign this Agreement or
any of its rights or delegate any of its duties under this Agreement: (a) to any
affiliate of such party; or (b) to any purchaser of all or substantially all of
such party's assets or stock or to any successor by way of merger, consolidation
or similar transaction. Subject to the foregoing, this Agreement will be binding
upon, enforceable by, and inure to the benefit of the parties and their
respective successors and assigns.
8.4 CHOICE OF LAW; FORUM SELECTION. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Colorado without
reference to its choice of law rules. Company hereby irrevocably consents to
exclusive personal jurisdiction and venue in the state and federal courts
located in Denver, Colorado with respect to any actions, claims or proceedings
arising out of or in connection with this Agreement, and agrees not to commence
or prosecute any such action, claim or proceeding other than in the
aforementioned courts.
8.5 NONWAIVER; SEVERABILITY; SURVIVAL. 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. If any term, provision, covenant or
condition of this Agreement is held invalid or unenforceable for any reason, the
remainder of the provisions will continue in full force and effect as if this
Agreement had been executed with the invalid portion eliminated. The provisions
of this Agreement relating to confidentiality, representations and warranties,
indemnification obligations, governing law, limitations on licensing, and any
others which expressly survive will survive the termination or expiration of
this Agreement for any reason.
8.6 FORCE MAJEURE. Neither party shall be deemed to be in default of
or to have breached any provision 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 authorities, civil
disturbances,
-7-
<PAGE> 8
wars, strikes or other labor disputes, fires, transportation contingencies,
interruptions in telecommunications or Internet services or network provider
services, failure of equipment and/or software, other catastrophes or any other
occurrences which are beyond such party's reasonable control.
8.7 NOTICES. Any notice or other communication required or permitted
to be given hereunder shall be given in writing and delivered in person, or
delivered by recognized overnight courier service, properly addressed and
stamped with the required postage, to the person signing this Agreement on
behalf of the applicable party at its address specified in the opening paragraph
of the agreement and shall be deemed effective in the case of hand delivery upon
receipt and in the case of delivery via overnight courier, the next business day
after sending. Either party may from time to time change the person to receive
notices or its address by giving the other party notice of the change in
accordance with this section.
8.8 INTEGRATION. This Agreement contains the entire understanding of
the parties hereto with respect to the transactions and matters contemplated
hereby, supersedes all previous agreements or negotiations between HealthGrades
and Company concerning the subject matter hereof, and cannot be amended except
by a writing signed by both parties.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the Effective Date set forth above.
XCARE.NET HEALTHGRADES.COM, INC.
("COMPANY") ("HEALTHGRADES")
By /s/ THOMAS M. PIAUKO By /s/ PETER A. FATIANOW
---------------------------------------- -------------------------------
Name Thomas M. Piauko Name Peter A. Fatianow
------------------------------------ ---------------------------
Title Sr. VP Sales & Business Development Title Senior Vice President
------------------------------------ ---------------------------
Date 2/28/2000 Date 2/28/00
------------------------------------ ---------------------------
-8-
<PAGE> 9
EXHIBIT A
CONTENT
The Content consists only of the portions of the www.HealthGrades.com Web Site
which provide users access to HealthGrades' proprietary or licensed rating and
other information regarding hospitals, health plans, physicians, and other
health care providers and facilities.
-9-
<PAGE> 10
EXHIBIT B
TRADEMARKS
HEALTHGRADES MARKS
HEALTHGRADES(TM)
HEALTHGRADES.COM(TM)
COMPANY MARKS
XCARE.NET(TM)
XCARE(TM)
SOLUTION CHANNELS(TM)
SOLUTION ARCHITECTS(TM)
EXTENSIBLE CARE SYSTEM(TM)
MATCHNET(TM)
MIDPAY ACCELERATOR(TM)
BUSINESS TO BUSINESS PLATFORM FOR EHEALTH(TM)
DATAFABRIC(TM)
LOGICFABRIC(TM)
EHEALTH DEVELOPMENT DISCIPLINE(TM)
EDD(TM)
-10-
<PAGE> 11
EXHIBIT C
ADVERTISING REVENUE SHARE
HealthGrades shall receive * percent( * ) of all Advertising
Revenue received by Company from the Bridge Pages hosted by Company.
Company shall receive fifty percent (50%) of all Advertising Revenue
received by HealthGrades from the Search Pages hosted by HealthGrades.
* *
PRICING MODEL
Company shall market the HealthGrades content in one of three options
described below and pay HealthGrades the negotiated price as shown
below:
<TABLE>
<S> <C> <C> <C>
OPTION 1 Pay as you go HealthGrades will be paid $ * per page
OPTION 2 Prepaid purchase HealthGrades will be paid $ * per page
OPTION 3 Per member per year (PMPY) HealthGrades will be paid $ * PMPY
</TABLE>
For those clients choosing Option 1 or 2, if they exceed the equivalent of their
PMPY they may elect to pay a * premium above their PMPY and receive unlimited
access to HealthGrades content.
* This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
and Exchange Act of 1934, as amended.
-11-
<PAGE> 12
EXHIBIT D
TECHNICAL SPECIFICATIONS
FOR INTEGRATION OF CONTENT FROM
WWW.HEALTHGRADES.COM
SUMMARY:
HealthGrades.com offers two ways to integrate HealthGrades.com
rating/directory data into your site:
Embedded Forms
1. Create a Bridge Page.
2. Include standard search forms on your site.
3. Customize the search forms on your site.
4. Create custom framesets with Search Results Pages.
5. Visit: http://www.HealthGrades.com/3rd party/examples.cfm
for a listing of the HealthGrades.com forms and elements to
include/submit.
Custom Wrapper Site
1. Keep a custom look and feel of your site ("wrapper").
2. Core application components only (i.e., Report Cards &
Directories).
3. Visit http://www.HealthGrades.com/3rd party/examples.cfm for
a link to an example wrapper.
-12-
<PAGE> 13
EXHIBIT E
HealthGrades.com/XCare.net Product Plan
Xcare.net will market customized health care ratings and directory
services as provided by HealthGrades.com ("HG Services") to the Target Markets.
As part of this agreement, HealthGrades shall require a minimum payment upon the
commencement of each Client agreement (to be determined on a case-by-case basis)
of which HealthGrades shall retain 100%. Thereafter, HealthGrades.com and
Xcare.net agree that HealthGrades.com shall receive payment for HG Services as
established in the Pricing Model set forth in Exhibit C.
Product Description:
1. HealthGrades.com shall provide Client with HG Services that Client's
members will be able to access from Clients web site.
2. The HG Services shall provide Client with ratings and directory services
customized to include only those providers and facilities specified by
Client. (i.e., when a user accesses a Client's web site and uses the
HealthGrades.com rating/directory services, that user will only see a list
of providers/facilities that are part of the Client's panel of providers).
3. Data elements required by HealthGrades.com from clients include (but are
not limited to):
o Hospital code
o Provider UPIN
o Provider last name
o Provider first name
o Provider address (city, state, ZIP)
o Provider specialty
4. Clients will provide timely data updates (preferably monthly in a complete
replace format) to HealthGrades.com in a mutually agreeable format.
5. HealthGrades.com needs to approve of each client's customization plan and
data transfer capabilities before proceeding with implementation.
This description is for informational purposes only. HG Services specifications
shall be set forth along with terms and conditions by separate agreement entered
into between HealthGrades.com and Client. HealthGrades.com shall provide
XCare.net with a sample of such agreement.
-20-
<PAGE> 14
EXHIBIT E -- TECHNICAL SPECIFICATIONS
HealthGrades.com/Xcare.net Product Overview
1. HG Technical Staff understands that each Client may have different
specialties within their site. Therefore, a cross reference table must
be mutually developed between each Client and HG.
2. HG Technical Staff understands that each Client will provide an
electronic data file of providers that they are only interested in.
This data transfer mechanism may vary based on the technology in place
at each client's facility.
3. HG Technical Staff and each Client will mutually agree on the
processing that will take place given some different scenarios such
as; unmatched results; multiple results; etc. within the Search
Results pages.
4. HG Technical Staff will develop a "model" database containing the
necessary and optional data elements for the specialty and provider
tables. These table will be the foundation that all Client's
information is fed into.
5. The Search Results Pages reside on HG Servers and have one standard,
vanilla "look and feel". In other words, no customization will be
provided for each Client. The Client will be able to "wrap" the
Results Pages with their "look and feel".
6. Conceptually, the process would be laid out as follows:
[ORGANIZATIONAL CHART]
These specifications are very high level and may change based on mutual consent.
<PAGE> 15
INCLUDING FORMS: CO-BRANDED RESOURCE PAGE
An example of a Bridge Page that links to other Bridge Pages with
HealthGrades.com search forms.
[INTERNET WEB PAGE GRAPHIC]
-13-
<PAGE> 16
INCLUDING FORMS: INCLUDING FORMS (CON'T)
Here is an include of the search form for "Physician Report Cards"
into a Bridge Page.
[INTERNET WEB PAGE GRAPHIC]
-14-
<PAGE> 17
INCLUDING FORMS: INCLUDING FORMS (CON'T)
Another design approach to including the "Physician Report Cards" form
into a site.
[INTERNET WEB PAGE GRAPHIC]
-15-
<PAGE> 18
INCLUDING FORMS: CUSTOMIZING FORMS.
This is an example show how a partner customized our search forms to
better adhere to the look and feel of their site. All customization must first
be approved by HealthGrades.com.
[INTERNET WEB PAGE GRAPHIC]
-16-
<PAGE> 19
FRAMING CUSTOMIZED RESULTS
Customized framesets provide a way for a user to get back to your site
while being able to view the Search Results Pages.
[INTERNET WEB PAGE GRAPHIC]
-17-
<PAGE> 20
WRAPPER SOLUTION
To integrate your site wrapper, please provide:
1. URL address to your header
2. URL address to your toolbar
3. URL address to your footer
4. Modified user agreement (if you require our to be modified).
Visit an online example at
http://www.healthgrades.com/example/index.cfin?vendor=example
[INTERNET WEB PAGE GRAPHIC]
-18-
<PAGE> 21
EXAMPLE OF A WRAPPER SOLUTION:
[INTERNET WEB PAGE GRAPHIC]
-19-
<PAGE> 1
[PLAZA TOWER ONE LETTERHEAD]
DECEMBER 21, 1999
Mr. Joe Starcevic
USA Global Link
50 North Third Street
FAIRFIELD, IA 52555
Dear Mr. Starcevic:
Your 2000 estimate of operating cost escalations for Plaza Tower One is enclosed
with this letter. The Plaza Tower One ownership and management team are
budgeting 2000 operating costs for Plaza Tower One to be $11.49 per rentable
square foot, based upon a total building area of 471,948 rentable square feet.
We are pleased to report to you that this is only a 1.3% increase over 1999
expenses.
Budgeted improvements to your work environment at Plaza Tower One during 2000
will include the following:
o Energy savings projects to include a flat plate heat exchanger, and a
supplemental boiler which are budgeted to occur in the first quarter of
2000;
o Three (3) multi-tenant corridor renovations;
o All passenger elevators and the freight elevator will be equipped with
"photo edge" openers;
o New exercise equipment and lobby furniture; and
o Garage light replacement
As always, we appreciate your business. If you have any questions, please do not
hesitate to contact me.
Sincerely,
CLARION REALTY SERVICES
/s/ LOUISE BOUCHARD
Louise Bouchard
cc: Jeff Peshut, Clarion Realty Services
Enclosure
<PAGE> 2
[PLAZA TOWER ONE LETTERHEAD]
DECEMBER 21, 1999
Mr. Joe Starcevic
USA Global Link, Inc.
50 North Third Street
Fairfield, Iowa 52555
RE: Plaza Tower One
2000 Estimated Operating Escalation
DECEMBER 21, 1999
Dear Mr. Starcevic:
In accordance with terms of your lease, we have estimated the 2000 operating
escalation for the above noted property and will begin billing monthly estimates
January 1, 2000. Your proportionate share was calculated accordingly.
<TABLE>
<S> <C>
2000 Budgeted Operating Costs $ 5,424,946.31
Less: Base Operating Costs - 1998 4,844,659.00
--------------
Excess Base Year Expenses 580,287.31
Tenant's Pro Rata Share % 1.8316%
--------------
Tenant's Annual Pro Rata Share of Excess $ 10,828.54
==============
2000 Monthly Estimate $ 885.71
</TABLE>
Please note that Property Colorado OBJLW One Corporation will invoice you on a
monthly basis. All remittances should be made payable to Property Colorado OBJLW
One Corporation and mailed to our lockbox:
Property Colorado OBJLW One Corporation
P.O. Box 5037; Unit #78
Portland, OR 97208
To insure correct application of your payment, please indicate on your check for
which month and item you are paying. If you have any questions, please do not
hesitate to contact me at (303)804-1707.
Sincerely,
CLARION REALTY SERVICES
/s/ LOUISE BOUCHARD
Louise Bouchard
<PAGE> 3
[PLAZA TOWER ONE LETTERHEAD]
December 21, 1998
Mr. Joe Starcevic Via US Mail
USA Global Link
50 North Third Street
Fairfield, IA 52555
RE: 1999 Estimated Operating Costs
Plaza Tower One - Englewood, CO
Dear Mr. Starcevic:
Your 1999 estimate of operating cost escalations for Plaza Tower One is enclosed
with this letter. The Plaza Tower One ownership and management team are
budgeting 1999 operating costs for Plaza Tower One to be at $11.34 per rentable
square foot, based upon a total building area of 471,948 rentable square feet.
Although we continue to make every effort to keep operating costs at a minimum,
our goal of continuing to provide a Class A work environment combined with
inflationary pressures beyond our immediate control have resulted in an increase
in these costs for the coming year.
Budgeted improvements to your work environment at Plaza Tower One during 1999
will include the following:
o Upgrades to the parking garage elevator lobbies;
o An addition of one security guard to assist our tenants and guests at the
front lobby from 7:00 a.m. to midnight;
o A completion of Year 2000 upgrades; and
o Energy savings projects to include an exit light retrofit, and floor
temperature sensors, which are budgeted to occur in the first and second
quarter of 1999.
As always, we appreciate your business. If you have any questions, please do not
hesitate to contact me.
Sincerely,
CLARION REALTY SERVICES
/s/ LOUISE BOUCHARD
Louise Bouchard
Enclosure
<PAGE> 4
[PLAZA TOWER ONE LETTERHEAD]
DECEMBER 21, 1998
Mr. Joe Starcevic
USA. Global Link
50 North Third Street
Fairfield, Iowa 52555
RE: Plaza Tower One
1999 Estimated Operating Escalation
Dear Mr. Starcevic:
In accordance with the terms of your lease, we have estimated the 1999 operating
escalation for the above noted property and will begin billing monthly estimates
January 1, 1999. Your proportionate share was calculated accordingly.
<TABLE>
<S> <C>
1999 Budgeted Operating Costs $ 5,351,076.45
Less: Base Operating Costs - 1998 Estimate 5,057,990.00
--------------
Excess Base Year Expenses 293,086.45
Tenant's Pro Rata Share % 1.8316%
--------------
Tenant's Annual Pro Rata Shares of Excess $ 5,368.20
==============
1999 Monthly Estimate $ 447.35
</TABLE>
Please note that Property Colorado OBJLW One Corporation will invoice you on a
monthly basis. All remittances should be made payable to Property Colorado OBJLW
One Corporation and mailed to our lockbox.
Property Colorado OBJLW One Corporation
P.O. Box 5037; Unit #78
Portland, OR 97208
To insure correct application of your payment, please indicate on your check for
which month and item you are paying. If you have any questions, please do not
hesitate to contact me at (303) 804-1707.
Sincerely,
CLARION REALTY SERVICES
/s/ LOUISE BOUCHARD
Louise Bouchard
<PAGE> 5
[CLARION REALTY SERVICES LETTERHEAD]
Date: 04/17/2000
TO: Name: March Freeman
Company: USA Global Link
Fax Number: 515-472-2642
Phone: 515-472-1550
FROM: Name: Jeff Peshut
Fax Number: 303-796-7674
Phone: 303-804-4701
Notes/Comments:
Marc,
The Certificate of Substantial Completion for USA Global Link at Plaza Tower
One follows this fax cover sheet. According to the certificate, Phase I was
completed July 4, 1998 and Phase II was completed July 29, 1998. Under the
Lease, the Lease Commencement Date is the earlier of one (1) day after
Substantial Completion of both Phase I and Phase II or July 29, 1998. Because
Phase II was not completed until July 29, that became the Lease Commencement
Date. The Lease Term was 61 months, beginning on that date and ending
August 31, 2003.
Please call me with your questions.
Jeff
<PAGE> 6
CERTIFICATE OF Distribution to:
SUBSTANTIAL OWNER [X] [STAMP]
COMPLETION ARCHITECT [ ]
CONTRACTOR [X]
FIELD [ ]
OTHER [ ]
AIA DOCUMENT C704 PLAZA TOWER ONE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PROJECT: USA Global Link ARCHITECT: B(2)SJ Design Group
(name, address) Plaza Tower One
6400 S. Fiddler's Green ARCHITECT'S PROJECT NUMBER: 98.01
Suite 160A
Englewood, CO 80111 CONTRACTOR: Peak West Construction
6665 Kenton Street, St 202
TO (Owner): Clarion Realty Services Englewood, CO 80111
Plaza Tower One CONTRACT FOR:
6400 S. Fiddler's Green Interior Construction Remodel
Englewood, CO 80111 Tenant: USA Global Link
CONTRACT DATE:
DATE OF ISSUANCE: 08-24-98
</TABLE>
PROJECT OR DESIGNATED PORTION SHALL INCLUDE: Phase One/6,474 RSF, Suite 160A
Remodel and construction scope of work, as designated in construction documents
released March 27, 1998 with subsequent revisions May 7 and May 11, 1998.
The Work performed under this Contract has been reviewed and found to be
substantially complete. The Date of Substantial Completion of the Project or
portion thereof designated above is hereby established as July 4, 1998, which
is also the date of commencement of applicable warranties required by the
Contract Documents, except as stated below.
- --------------------------------------------------------------------------------
DEFINITION OF DATE OF SUBSTANTIAL COMPLETION
The Date of Substantial Completion of the work or designated portion thereof is
the Date certified by the Architect when construction is sufficiently complete,
in accordance with the Contract Documents, so the Owner can occupy or utilize
the work or designated portion thereof for the use for which it is intended, as
expressed in the Contract Documents.
- --------------------------------------------------------------------------------
A list of items to be completed or corrected, prepared by the Contractor and
verified and amended by the Architect, is attached hereto. The failure to
include any items on such list does not alter the responsibility of the
Contractor to complete all Work in accordance with the Contract Documents. The
date of Commencement of warranties for items on the attached list will be the
date of final payment unless otherwise agreed to in writing.
B(2)SJ Design Group /s/ SETH BARBER 08-28-98
- ------------------------ ---------------------------------- --------
ARCHITECT By SETH BARBER, PRINCIPAL DATE
The Contractor will complete or correct the Work on the list of items attached
hereto within days from the above date of Substantial Completion.
Peak West /s/ GENE BARK
- ------------------------ ---------------------------------- --------
CONTRACTOR By GENE BARK, P.M. DATE
The Owner accepts the Work or designated portion thereof as substantially
complete and will assume full possession thereof at (time) on
(date).
Clarion Realty Services /s/ TOM PRITEKEL 09-8-98
- ------------------------ ---------------------------------- --------
OWNER'S REPRESENTATIVE By TOM PRITEKEL DATE
- --------------------------------------------------------------------------------
The responsibilities of the Owner and the Contractor for security, maintenance,
heat, utilities, damage to the Work and insurance shall be as follows:
Note [ILLEGIBLE]
Not Applicable.
- --------------------------------------------------------------------------------
<PAGE> 7
CERTIFICATE OF Distribution to:
SUBSTANTIAL OWNER [X]
COMPLETION ARCHITECT [ ]
CONTRACTOR [X]
FIELD [ ]
OTHER [ ]
AIA DOCUMENT C704
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PROJECT: USA Global Link ARCHITECT: B(2)SJ Design Group
(name, address) Plaza Tower One
6400 S. Fiddler's Green ARCHITECT'S PROJECT NUMBER: 98.01
Suite 160A
Englewood, CO 80111 CONTRACTOR: Peak West Construction
6665 Kenton Street, St 202
TO (Owner): Clarion Realty Services Englewood, CO 80111
Plaza Tower One CONTRACT FOR: Interior Construction Remodel
6400 S. Fiddler's Green Tenant: USA Global Link
Englewood, CO 80111 CONTRACT DATE:
DATE OF ISSUANCE: 08/13/98
</TABLE>
PROJECT OR DESIGNATED PORTION SHALL INCLUDE: Phase Two/1,974 RSF, Suite 160A
remodel and construction scope of work, as designated in construction documents
released March 27, 1998 with subsequent revisions May 7 and May 11, 1998.
The Work performed under this Contract has been reviewed and found to be
substantially complete. The Date of Substantial Completion of the Project or
portion thereof designated above is hereby established as July 29, 1998, which
is also the date of commencement of applicable warranties required by the
Contract Documents, except as stated below.
- --------------------------------------------------------------------------------
DEFINITION OF DATE OF SUBSTANTIAL COMPLETION
The Date of Substantial Completion of the Work or designated portion thereof is
the Date certified by the Architect when construction is sufficiently complete
in accordance with the Contract Documents, so the Owner can occupy or utilize
the Work or designated portion thereof for the use for which it is intended, as
expressed in the Contract Documents.
- --------------------------------------------------------------------------------
A list of items to be completed or corrected, prepared by the Contractor and
verified and amended by the Architect, is attached hereto. The failure to
include any items on such list does not alter the responsibility of the
Contractor to complete all Work in accordance with the Contract Documents. The
date of Commencement of warranties for items on the attached list will be the
date of final payment unless otherwise agreed to in writing.
B(2)SJ Design Group /s/ SETH BARBER 08-28-98
- ------------------------ ---------------------------------- --------
ARCHITECT By SETH BARBER, PRINCIPAL DATE
The Contractor will complete or correct the Work on the list of items attached
hereto within _________ days from the above Date of Substantial Completion.
Peak West
- ------------------------ ---------------------------------- --------
CONTRACTOR By GENE BARK, P.M. DATE
The Owner accepts the Work or designated portion thereof as substantially
complete and will assume full possession thereof at ____________ (time) on
_____________ (date).
Clarion Realty Services /s/ TOM PRITEKEL 09-8-98
- ------------------------ ---------------------------------- --------
OWNER'S REPRESENTATIVE By TOM PRITEKEL DATE
- --------------------------------------------------------------------------------
The responsibilities of the Owner and the Contractor for security, maintenance,
heat, utilities, damage to the Work and insurance shall be as follows:
Note [ILLEGIBLE]
NOT APPLICABLE.
- --------------------------------------------------------------------------------
<PAGE> 8
PLAZA TOWER ONE
OFFICE LEASE
LOCATION: PROPERTY COLORADO OBJLW ONE CORPORATION
by its agent, Clarion Partners, LLC
TENANT: USA GLOBAL LINK, INC.
<PAGE> 9
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS .............................................................1
2. USES ....................................................................3
3. RENT ....................................................................4
4. UTILITIES ...............................................................6
5. SERVICES ................................................................7
6. INDEMNIFICATION AND INSURANCE ...........................................7
7. WAIVER OF SUBROGATION ...................................................9
8. REPAIRS .................................................................9
9. TENANT'S PROPERTY ......................................................10
10. IMPROVEMENTS AND ALTERATIONS BY TENANT .................................10
11. CASUALTY ...............................................................11
12. ASSIGNMENT, LETTING AND SUBLETTING .....................................11
13. LIENS AND INSOLVENCY ...................................................13
14. CONDEMNATION ...........................................................14
15. CONSTRUCTION CONDITIONS ................................................14
16. OCCUPANCY, LEASE COMMENCEMENT DATE .....................................15
17. RULES AND REGULATIONS ..................................................15
18. PARKING ................................................................16
19. ACCESS .................................................................16
20. SIGNS ..................................................................16
</TABLE>
i - PLAZA TOWER ONE LEASE
<PAGE> 10
<TABLE>
<S> <C>
21. TENANT'S DEFAULT .......................................................17
22. PERSONAL PROPERTY LIEN .................................................18
23. QUIET ENJOYMENT, INABILITY TO PERFORM ..................................19
24. HOLD OVER TENANCY ......................................................19
25. ATTORNEYS' FEES ........................................................20
26. AMENDMENT, WAIVER ......................................................20
27. NOTICES ................................................................20
28. BINDING EFFECT, GENDER .................................................21
29. ADDENDA AND ATTACHMENTS ................................................21
30. LIMITATION OF LIABILITY ................................................21
31. LANDLORD'S RESERVED RIGHTS .............................................22
32. ESTOPPEL CERTIFICATE ...................................................22
33. ACCORD AND SATISFACTION ................................................23
34. SEVERABILITY ...........................................................23
35. SUBORDINATION ..........................................................23
36. TIME ...................................................................24
37. APPLICABLE LAW .........................................................24
38. BROKER'S INDEMNIFICATION ...............................................24
39. SECURITY DEPOSIT .......................................................24
40. CONFLICTS OF INTEREST ..................................................25
41. TENANT REPRESENTATIONS .................................................25
42. ENVIRONMENTAL COVENANTS ................................................26
</TABLE>
ii - PLAZA TOWER ONE LEASE
<PAGE> 11
<TABLE>
<S> <C>
43. RENEWAL OPTION .........................................................27
44. CANCELLATION OPTION ....................................................27
45. EXPANSION OPTION .......................................................28
</TABLE>
EXHIBITS
Exhibit "A" Improved Area
Exhibit "B-1" Leased Premises
Exhibit "B-2" Phase I Space and Phase II Space
Exhibit "B-3" Expansion Space
Exhibit "C" Work Agreement
Exhibit "C-1 Final Construction Drawings
Exhibit "D" Janitorial Services
Exhibit "E" Lease Commencement Date Statement
Exhibit "F" Rules and Regulations
Exhibit "G" Attornment and Nondisturbance Agreement
Exhibit "H" Estoppel Certificate
Exhibit "I" Greenwood Plaza South
iii - PLAZA TOWER ONE LEASE
<PAGE> 12
LEASE
This Lease ("Lease") is made as of June 5th, 1998, between PROPERTY
COLORADO OBJLW ONE CORPORATION, an Oregon corporation, ("Landlord"), by its
agent, Clarion Partners, LLC, and USA GLOBAL LINK INC., a Delaware corporation
("Tenant").
WITNESSETH:
Landlord and Tenant hereby agree as follows:
1. DEFINITIONS
A. "Base Operating Costs" shall mean Tenant's Pro Rata Share of
Operating Costs during the calendar year ending December 31, 1998.
B. "Base Rent" shall mean the following for the periods indicated:
<TABLE>
<CAPTION>
Period $/Sq. Ft./year: $/month
------ -----------------------
<S> <C>
Months 1-25 $19.00 per rentable sq. ft. per year
$13,376.00 per month
$160,512.00 per year
Months 26-61 $19.33 per rentable sq. ft. per year
$13,608.32 per month
$163,299.84 per year
</TABLE>
C. "Building" shall mean the building shown on Exhibit "A", containing
the Tower and the Retail Area, and within which the Leased Premises are located.
D. "Greenwood Plaza South" shall mean the area developed or to be
developed and shown on Exhibit "I".
E. "Improved Area" shall mean the real property located in Arapahoe
County, Colorado, described and shown on Exhibit "A", attached hereto, including
the Building and any and all other buildings, other than those built for lease,
existing or to be constructed thereon, all land thereunder and all appurtenances
thereto, such as entries, sidewalks, curb areas, garage complexes, driveways and
landscaped areas.
F. "Lease Commencement Date" shall have the meanings as set forth in
this paragraph. Prior to the execution of this Lease, Tenant has occupied the
Leased Premises pursuant to that certain Temporary Occupancy License Agreement
dated February 6, 1998 (the
1 - PLAZA TOWER ONE LEASE
<PAGE> 13
"License Agreement"). As outlined in paragraph 15 of this Lease, Landlord will
be constructing certain improvements within the Leased Premises in two phases.
Such construction shall affect the commencement date of this Lease and the
expiration date of the License Agreement as follows. On the date that Landlord
notifies Tenant of the Substantial Completion (as defined in Exhibit "H"
attached hereto) of the Phase I Improvements (as defined in paragraph 15.A.
hereof), this Lease shall commence with respect to the Phase I Space (as defined
in paragraph 15.A. hereof) and the License Agreement shall be rendered null and
void as to the Phase I Space. During the construction of the Phase I
Improvements, Tenant shall continue to occupy the Phase II Space (as defined in
paragraph 15.A. hereof) and such occupancy shall be governed by the License
Agreement. On the date that Landlord notifies Tenant of the Substantial
Completion (as defined in Exhibit "H" attached hereto) of the Phase II
Improvements (as defined in paragraph 15.A.), this Lease shall commence with
respect to the Phase II Space and the License Agreement shall be rended null
and void in its entirety. Notwithstanding anything to the contrary in the
foregoing, during the construction of the Phase II Improvements, Tenant shall
not be obligated to make any rental payments under the License Agreement or this
Lease with respect to the Phase II Space. Notwithstanding the foregoing, the
Lease Commencement Date for the entire Leased Premises (Phase I and Phase II
Spaces) shall occur on the earlier of (i) one (1) day after Substantial
Completion of the Phase I Improvements and the Phase II Improvements (excluding
Tenant Delay), or (ii) July 29, 1998, except as extended by Landlord Delay.
G. "Lease Term" shall mean the period beginning on the Lease
Commencement Date and ending sixty-one (61) months thereafter, provided that if
the Lease Commencement Date is a date other than the first day of a calendar
month, the first month of the Lease Term shall be deemed to be the partial month
and the first full month such that the Lease Term expires on the last day of a
calendar month. To illustrate this definition: if the Lease Commencement Date
for a lease with a 60-month term is January 15, 2000, the expiration date will
be January 31, 2005.
H. "Leased Premises" shall mean the right to use the interior space of
the annex portion of the Building shown on Exhibit "B-l", attached hereto,
containing approximately 8,448 rentable square feet, plus the appurtenant right
to use, in common with others, the entries, sidewalks, curb areas; driveways,
garage complexes, and other public portions of the Improved Area.
I. "Permitted Purpose" shall mean use of the Leased Premises for
general office purposes and purposes incidental thereto, unless otherwise agreed
to in writing by Landlord in its full and sole discretion.
J. "Rent" shall mean Base Rent, Tenant's Pro Rata Share of Operating
Costs in excess of Base Operating Costs and any other amounts payable by Tenant
to Landlord under this Lease.
K. "Retail Area" shall mean the area of the Building shown on Exhibit
"A".
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<PAGE> 14
L. "Tenant's Broker of Record" shall mean The Staubach Company.
M. "Tenant's Pro Rata Share" shall mean 1.8316% calculated by
dividing Tenant's Total Square Footage by the Total Square Footage of the Tower.
N. "Tenant's Total Square Footage" (approximately 8,448 rentable square
feet) shall mean the sum of the square footage in the Leased Premises, an
allocated portion of common area square footage on Tenant's floor and an
allocated portion of the square footage of the remaining common areas in the
Tower. Calculation of such allocated square footage will be done by Landlord on
a reasonable basis consistently applied. If such calculation is later discovered
to be in conflict with the approximate square footage stated herein above, this
lease shall be amended to conform to such calculation.
O. "Total Square Footage of the Tower" shall mean 461,234 rentable
square feet; provided, however, if there is a change in the aggregate rentable
area of the Tower as the result of an addition to the Tower. partial destruction
of the Tower, modification of the Tower design, remeasurement by Landlord, or
other cause which results in a reduction or increase in the rentable area of the
Tower, Landlord shall make adjustments in the Total Square Footage of the Tower
to reflect any such change.
P. "Tower" shall mean the portion of the Building shown on Exhibit "A".
2. USES
A. Tenant agrees to continuously use and occupy the Leased Premises for
the Permitted Purpose only, and for no other purpose whatsoever. Tenant
covenants to comply with all statutes, laws, ordinances, regulations and rules
and any recorded document affecting the Leased Premises and the Building. Tenant
shall not do or permit anything to be done in or about the Leased Premises or
the Building which will in any way (i) increase the existing rate of or affect
any fire or other insurance upon the Building or any of its contents; (ii)
injure the Building; (iii) constitute waste of the Leased Premises or the
Building; or (iv) be a nuisance, public or private, or menace to other tenants
of the Building, or anyone else.
B. Tenant agrees that it has determined to Tenant's satisfaction that
the Leased Premises can be used for the Permitted Purpose. If Landlord
determines, in its sole opinion based on changes in zoning laws or other local
laws or ordinances, that the Leased Premises cannot be used for the Permitted
Purpose at any time during the Lease Term, either Landlord or Tenant shall have
the option to terminate this Lease. If Landlord fails to exercise such option,
Tenant shall have the right to use the Leased Premises for any other remaining
lawful purpose, for so long as the Leased Premises are then capable of
accommodating such uses.
3 - PLAZA TOWER ONE LEASE
<PAGE> 15
3. RENT
A. Tenant shall pay to Landlord on the first day of each calendar
month during the term of this Lease, at the mailing address as designated from
time to time by Landlord and without deduction or setoff (unless authorized by
this Lease), the Base Rent, any other charges provided for in this Lease, and
Tenant's Pro Rata Share of Operating Costs allocated to the Tower and described
in paragraph 3B below which exceed the Base Operating Costs. Rent for any
fractional calendar month shall be that proportion of the Rent which the number
of days during such month bears to the total number of days in such month. Rent
not paid by the first day of the month shall be subject to a late charge of
three percent (3%) per month of the amount due. For purposes of this paragraph
and until directed to do otherwise, Tenant shall mall all payments required to
be paid under this Lease to the following address:
c/o Property Colorado OBJLW One Corporation
P.O. Box 5037, Unit #78
Portland, Oregon 97208
B. Operating Costs shall mean all expenses, costs and disbursements
made or required to be made by Landlord because of or in connection with the
maintenance, repair and operation of the Improved Area, including, but not
limited to, real estate taxes and assessments; use, sales, and any other taxes
(except income taxes) based on rents; personal property taxes on personal
property used in the operation of the Improved Area; equitable charges as may be
assessed to the Improved Area for the maintenance, repair and operation of the
common property of Greenwood Plaza South; the cost of all risk property
insurance, including earthquake and flood, and general liability insurance,
including Landlord's estimated fair market cost, not to exceed ISO Manual Rates
(Insurance Services Office), for any of such risks against which Landlord elects
to self insure; costs incurred by Landlord to comply with federal, state or
local laws regarding hazardous materials except when such compliance is required
due to the acts of Landlord or other tenants of the Building; utilities not
separately metered to individual tenants; costs of leasing or amortization of
energy reduction devices and systems, except those included in the initial
Building specifications; maintenance; repairs; janitorial service, operating
supplies, property management; Building services; snow removal; landscaping;
rubbish removal; tools and equipment used for the daily operation of the
Improved Area; air conditioning, heating and elevator repair and maintenance;
maintenance and repair of garage complex; security; property management fees;
management and maintenance personnel's wages, payroll taxes, welfare and
disability benefits reasonably incurred in the operation of the Improved Area.
Operating Costs shall not include monies spent for income tax accounting,
expenses resulting from negligence of Landlord; expenses and costs associated
with the operation of Landlord's business organization; legal fees; space
planning fees; real estate brokerage commissions; decorating fees; advertising
costs associated with development and leasing of the Building; bad debt or rent
losses of Landlord; fines, penalties, interest or other charges paid by Landlord
to any other tenant or third party; interest, depreciation, or expenditures of a
capital nature, except to the extent that such expenditures are required due to
a change in law including, but not limited to "The Americans
4 - PLAZA TOWER ONE LEASE
<PAGE> 16
with Disabilities Act" and similar related Federal, State and Local laws, rules
and regulations applicable to the Improved Area or otherwise cause a reduction
in any item of Operating Costs, in which case that part of such capital
expenditure attributable to the calendar year shall be included in the Operating
Costs. Operating Costs shall be reasonably allocated between the Tower and the
Retail Area. Also, if Landlord constructs any other buildings for lease within
the boundaries of the Improved Area; Operating Costs, exclusive of those
incurred directly for the Building hereunder and such other buildings, shall be
reasonably allocated between the Building hereunder and such other buildings.
The determination of Operating Costs and their allocation shall be in accordance
with generally accepted accounting principles applied on a consistent basis. If
the Building and other buildings located on the Improved Area are not fully
rented during all or a portion of any calendar year, Landlord may make an
appropriate adjustment of the Operating Costs for such year, employing sound
accounting and management principles, to determine the amount of Operating Costs
that would have been paid or incurred by Landlord had all such buildings been
one hundred percent (100%) rented, and the amount so determined shall be deemed
to have been the amount of Operating Costs for such year.
Operating Costs allocated to Tenant shall not reflect any type or
degree of service or duty performed by or through Landlord for any other tenant
which is not required to be performed for Tenant under this Lease which results
in a cost in excess of the services or duties required to be provided by
Landlord under this Lease. Furthermore, Operating Costs shall not reflect the
costs of any services provided by Landlord to other tenants which are not
required to be performed for Tenant under this Lease to the extent Landlord is
reimbursed by such tenants for the costs of such services.
C. During December of each calendar year or as soon thereafter as
practicable, Landlord shall give Tenant written notice of Landlord's estimate of
Tenant's Pro Rata Share of Operating Costs which exceed Base Operating Costs
payable hereunder for the ensuing calendar year.
On or before the first day of each month during the ensuing calendar
year, Tenant shall pay to Landlord one twelfth (1/12) of such estimated amount,
provided that if such notice is not given in December, Tenant shall continue to
pay on the basis of the prior year's estimate until the month after such notice
is given. If at any time it appears to Landlord that Tenant's Pro Rata Share of
Operating Costs payable hereunder for the current calendar year will vary from
its estimate by more than twenty per cent (20%), Landlord may, by written notice
to Tenant, revise its estimate for such year, and subsequent payments by Tenant
for such year shall be based upon such revised estimate.
D. Within one hundred twenty (120) days after the close of each
calendar year, or as soon thereafter as is reasonably practicable, Landlord
shall deliver to Tenant a statement of additional Rent for Operating Costs
payable hereunder for such calendar year. If such statement shows an amount
owing by Tenant that is less than the estimated payments for such calendar year
5 - PLAZA TOWER ONE LEASE
<PAGE> 17
previously made by Tenant, Landlord shall credit the excess to the next
succeeding monthly installment of Rent. If such statement shows an amount owing
by Tenant that is more than the estimated payments for such calendar year
previously made by Tenant, Tenant shall pay the deficiency to Landlord within
thirty (30) days after delivery of such statement.
E. If, for any reason other than the default of Tenant, this Lease
shall terminate on a day other than the last day of a calendar year, the
additional Rent for Operating Costs payable by Tenant applicable to the calendar
year in which such termination shall occur shall be prorated on the basis which
the number of days from the commencement of such calendar year to and including
such date of termination bears to three hundred sixty-five (365).
F. Landlord shall, upon Tenant's written request, deliver to Tenant a
written accounting showing how Operating Costs were calculated for the past
year. Tenant may object to the statement of Operating Costs for the past year
only if Tenant does so in writing to Landlord within ninety (90) days of
Tenant's receipt of Landlord's statement of Tenant's Pro Rata Share of Operating
Costs. In the event of a timely objection made by Tenant, Tenant and Landlord
agree to cooperate in good faith to resolve any such objection. The foregoing
notwithstanding, Tenant shall in no way be relieved of its obligation to pay
Tenant's Pro Rata Share of Operating Costs as calculated by Landlord during the
period in which it is cooperating with Landlord to resolve any objections as
provided herein.
4. UTILITIES
Landlord shall provide to the Leased Premises the following utility
services: water, sewer, electricity. Utility charges for which separate billings
are not available shall be treated as Operating Costs. If heat, light, water or
any other utility services are supplied to and metered directly to the Leased
Premises, Tenant shall pay the cost thereof, and make any required deposits
related thereto. Separate additional charges may be made to Tenant, if Tenant,
in Landlord's reasonable judgment, makes excessive utility system demands where
such services are not separately metered. Landlord does not warrant that any of
the utility services will be free from interruption caused by Unavoidable Delay,
as defined in paragraph 23 below.
Landlord may, in its sole discretion, limit the number of telephone
circuits available to Tenant based on a pro rata share calculated by multiplying
the total number of circuits available to all tenants in the Building by
Tenant's Pro Rata Share. Landlord or its representative may, in its sole
discretion, elect to cause the telephone circuits/lines to be connected in
and/or to the Lease Premises at Tenant's sole cost and expense.
Upon the expiration or termination of this Lease, Landlord may, in its
sole discretion, require Tenant to remove, at Tenant's expense, all telephone,
computer, data, or other such wiring associated with the Leased Premises to the
point-of-connection, without regard to whether such wiring was paid for and/or
installed by Tenant. The point-of-connection shall be determined by
6 - PLAZA TOWER ONE LEASE
<PAGE> 18
Landlord. Tenant shall repair, or reimburse Landlord for the cost of repairing,
any damage resulting from removal of such wiring.
5. SERVICES
Landlord shall maintain all parking and common areas, which maintenance
shall include lighting, gardening, cleaning, snow removal, sweeping, painting
and window cleaning; and shall provide for the Leased Premises and the Building
such other services, including, but not limited to, air-cooling, heating,
replacement of building standard lamps as needed and the interior janitorial
services listed on Exhibit "D", as are necessary to maintain them in reasonably
good order and condition. Landlord shall maintain and repair the exterior of the
Building, its structural portions and the roof. The cost of such services shall
be considered an Operating Cost. Any services provided to Tenant by Landlord
which are not provided to other Tenants in the building shall be provided at
Tenant's expense.
Such services, except for janitorial services. shall be furnished by
Landlord during normal working hours (from 6:00 a.m. to 6:00 p.m. weekdays, and
from 7:00 a.m. to 1:00 p.m. on Saturdays, legal holidays excepted), or at such
other times as requested by Tenant, in which event, Tenant shall pay the
additional cost thereof. The level of services shall be that customarily
provided by landlords of first-class buildings in the Denver, Colorado area. For
purposes of this paragraph. "legal holidays" shall mean New Year's Day, Martin
Luther King Day, Presidents' Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day, and such other national holidays as may
hereafter be established by the United States government.
Landlord shall not be liable in any event, nor shall Rent be abated,
because of interruption of such services. The foregoing notwithstanding, if any
such interruption of services causes the Leased Premises to be untenantable for
a period of at least five (5) consecutive business days, Rent shall be abated
proportionately.
6. INDEMNIFICATION AND INSURANCE
A. Landlord shall not be liable to Tenant, and Tenant hereby waives all
claims against Landlord, its advisor, and property manager for any injury to or
death of any person or damage to any property or any other type claim arising
out of an incident (i) occurring in, on or about the Leased Premises by or from
any cause whatsoever, or (ii) occurring in, on or about the Improved Area by
reason of any act or omission or any active, passive or concurrent negligence or
fault of Tenant, except to the extent caused by the negligence or willful
misconduct of Landlord, its advisor, property manager, employees, agents or
contractors.
B. In addition to Tenant's obligations under paragraph D below, Tenant
agrees to indemnify, protect, pay on behalf of, and hold harmless Landlord, its
advisor, and property manager, from and against any and all claims or liability
for any injury to or death of any person (including employees of Tenant and
Landlord) or damage to any property (including property
7 - PLAZA TOWER ONE LEASE
<PAGE> 19
belonging to Tenant and Landlord) whatsoever or any other claim (i) occurring
in, on or about the Leased Premises or any part thereof, from any cause
whatsoever or (ii) occurring in, on or about the Improved Area by reason of any
act or omission or any active, passive or concurrent negligence or fault of
Tenant, except to the extent caused by the negligence or willful misconduct of
Landlord, its advisor, property manager, employees, agents or contractors. The
obligations of indemnity set forth in this paragraph shall survive termination
of this Lease by expiration of the Lease Term or otherwise.
C. Tenant shall, at its sole cost and expense, obtain and keep in force
during the Lease Term, all-risk property insurance (including theft, sprinkler
leakage, and boiler and machinery) on Tenant's improvements, fixtures,
furnishings and equipment in and upon the Leased Premises or Building in an
amount not less than one hundred percent (100%) of the full replacement cost
(without deduction for depreciation) thereof, with a maximum deductible of
$1,000. Landlord reserves the right to request Tenant to have a replacement
cost appraisal prepared not less than every three (3) years. All amounts
received from said insurance shall be applied to the payment of the cost of
repair or replacement of any Tenant's improvements, fixtures, furnishings and
equipment that were damaged or destroyed unless this Lease terminates prior to
such repair or replacement being made, in which case the portion of such amounts
representing improvements and fixtures which would have become Landlord's
property pursuant to paragraph 10 hereof shall be paid over to Landlord, and
the balance shall be retained by Tenant. Tenant shall also carry business
interruption insurance.
D. Without in any way limiting Tenant's liability pursuant to paragraph
B above, Tenant shall, at its sole cost and expense, obtain and keep in force
during the term of this Lease (i) commercial general liability insurance (Bodily
Injury and Property Damage) on an occurrence form with a limit of liability not
less than One Million and no/100 Dollars ($1,000,000) per occurrence including
premises-operations and products/completed operations hazards and with the
following supplementary coverages: (a) contractual liability to cover liability
assumed under this Lease; (b) personal injury liability with the "employee" and
"contractual" exclusions deleted; and (c) broad form property damage liability;
and (ii) umbrella excess liability insurance, in addition to and in excess of
the foregoing insurance policies, in an amount not less than Four Million and
no/100 Dollars ($4,000,000) per occurrence. Tenant shall also carry workers'
compensation in accordance with statutory limits and employer's liability
insurance. Landlord shall have the right, at any time or from time to time, to
reasonably adjust the amount of insurance required hereunder to reflect those
coverages and amounts typically carried by tenants such as Tenant in other
office buildings comparable to the Building, as industry standards change.
E. All insurance required under this paragraph 6 and all renewals
thereof shall be issued by such responsible companies licensed or authorized to
do and doing business in the State of Colorado as may be reasonably approved by
Landlord. Each policy shall expressly provide that the policy shall not be
canceled or altered without thirty (30) days' prior written notice to Landlord.
All insurance under this paragraph shall name Landlord, Landlord's agent
8 - PLAZA TOWER ONE LEASE
<PAGE> 20
and advisor. Landlord's property manager and any mortgagee(s), all as
additional insureds, shall be primary and noncontributing with any insurance
which may be carried by Landlord, and shall expressly provide that Landlord, its
advisor, and property manager, although named as additional insureds, shall
nevertheless be entitled to recover against Tenant under the policy for any
loss, injury or damage to Landlord, its advisor, property manager, employees and
contractors, and shall contain a standard "cross liability" or "severability of
interest" clause.
Upon the issuance thereof, each such policy or a duplicate or
certificate thereof shall be delivered to Landlord for retention by it.
Tenant shall require any contractor who performs work on the Leased
Premises to carry general liability insurance and to name Landlord, its advisor
and its property manager as additional insureds.
7. WAIVER OF SUBROGATION
Tenant waives on behalf of its insurers under all policies of fire and
theft, all rights of subrogation which any insurer might otherwise have to any
claims of Tenant against Landlord. Landlord waives on behalf of its insurers
under all policies of fire and theft, all rights of subrogation which any
insurer might otherwise have to any claims of Landlord against Tenant. Landlord
and Tenant shall each, prior to or immediately after the execution of this
Lease, procure from each of such insurers a waiver of all rights of subrogation
which the insurer might otherwise have as against the other, to the extent
required by this paragraph. This paragraph shall not be construed to require of
Landlord or Tenant any insurance coverage not otherwise required by this Lease
nor to waive any rights of recovery that either Landlord or Tenant may have
directly against the other to the extent that any loss or damage giving rise to
any such right of recovery is not actually covered by insurance.
8. REPAIRS
Except for services provided by Landlord, Tenant agrees to maintain in
a clean, orderly and sanitary condition and keep in good repair, the
non-structural interior of the Leased Premises, ordinary wear and tear excepted.
Such maintenance and repair shall be at the sole cost of Tenant and shall
include but not be limited to the maintenance and repair of floor covering,
ceilings and walls, front and rear doors, and all interior glass on the Leased
Premises. If Tenant fails to maintain or keep the Leased Premises in good repair
and such failure continues for fifteen (15) days after written notice from
Landlord, Landlord may perform any such required maintenance and repairs and the
cost thereof shall be additional Rent payable by Tenant within ten (10) days of
receipt of any invoice therefor from Landlord.
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<PAGE> 21
9. TENANT'S PROPERTY
Furnishings, trade fixtures, computer and telephone wiring, and
moveable equipment, if any, paid for and installed by Tenant, shall be the
property of Tenant. On expiration of this Lease, if there is then no Event of
Default, Tenant may remove any such property and shall remove any such property
if directed by Landlord. Tenant shall repair, or reimburse Landlord for the cost
of repairing, any damage resulting from removal of Tenant's property. If Tenant
fails to remove such property as required under this Lease, or in the event
Tenant abandons the Leased Premises, Tenant shall be deemed to have abandoned
all interest in any such property remaining or then in or upon the Leased
Premises and Landlord may remove the same as its own property and dispose of
such property as it desires without liability to Tenant.
10. IMPROVEMENTS AND ALTERATIONS BY TENANT
Tenant may make such additional improvements or alterations to the
Leased Premises as it deems necessary or desirable, but only with Landlord's
prior written approval (which approval shall not be unreasonably withheld). Any
such improvements or alterations by Tenant shall be at Tenant's expense and
shall be done by a licensed contractor approved by Landlord in conformity with
plans and specifications approved by Landlord. If requested by Landlord. Tenant
will post a bond or other security reasonably satisfactory to Landlord to
protect Landlord against liens arising from work performed for Tenant. All work
performed shall be done in a good and workmanlike manner, in accordance with
applicable law and with materials (where not specifically described in the
specifications) of the quality and appearance comparable to those in the
Building. Prior to the commencement of any work or delivery of any materials to
the Leased Premises, Tenant shall furnish Landlord, for its approval, copies of
the following:
(a) plans and specifications;
(b) names and addresses of contractors;
(c) copies of contracts;
(d) necessary permits; and
(e) such other items as may be reasonably requested by
Landlord to protect its interest in the Building in connection with the
work.
Landlord, by written notice to Tenant given at or prior to commencement
of any improvement, addition, or alteration to the Leased Premises described in
this paragraph 8, may require Tenant, at Tenant's sole cost and expense, to
remove all or any portion of such improvements, additions, or alterations at or
prior to the expiration or termination of this Lease, and to repair or restore
any damage caused by the installation and removal of such improvements,
additions, or alterations; provided, however, the only improvements, additions
or
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<PAGE> 22
alterations which Tenant may remove shall be those specified in such notice.
Except for Tenant's furnishings, trade fixtures, computer and telephone wiring
and moveable equipment, property not specified for removal shall upon
termination or expiration of the Lease become the property of Landlord.
Notwithstanding the foregoing, in the case of any improvement, addition, or
alteration made without the prior written consent of Landlord, Landlord may
provide the notice contemplated by this paragraph at any time at or prior to the
termination or expiration of this Lease.
11. CASUALTY
If the Leased Premises or the Building are destroyed or damaged by
fire, earthquake or other casualty to the extent that the Leased Premises are
untenantable in whole or in part, then Landlord shall, except as provided below,
proceed with reasonable diligence to rebuild and restore the Leased Premises or
such part thereof as may be destroyed or damaged, and during the period of such
rebuilding and restoration, this Lease shall remain in full force and effect,
and Rent shall be abated in the same ratio as the square footage in the portion
of the Leased Premises rendered untenantable, if any, shall bear to the total
square footage in the Leased Premises. If Landlord shall reasonably determine
that such destruction or damage cannot be rebuilt and restored within
one-hundred-eighty (180) days of the occurrence, it shall so notify Tenant
within sixty (60) days after the occurrence of such damage or destruction. In
such event, either Landlord or Tenant may, within twenty (20) days after such
notice, terminate this Lease. If neither party terminates this Lease during such
twenty (20) day period, this Lease shall remain in effect and Landlord shall
diligently proceed to rebuild and restore the Leased Premises, and Rent shall
abate as set forth above. If Landlord determines that the Leased Premises can be
rebuilt and restored within one-hundred and eighty (180) days after the
occurrence but the rebuilding of the Leased Premises is not completed within
such one-hundred and eighty (180) day period (subject to the provisions of
paragraph 23.C., which shall not, in any event, extend the completion period
more than sixty (60) days), Landlord, within five (5) days of Tenant's written
demand, shall provide Tenant with Landlord's written assurance that the Leased
Premises will be rebuilt and restored with thirty (30) days after Tenant's
demand. If the Leased Premises are not rebuilt and restored within thirty (30)
days after Tenant's demand (subject to the provisions of paragraph 23.C.) or
Landlord advises Tenant that the Leased Premises will not be rebuilt and
restored within thirty (30) days, then either Landlord or Tenant may, within ten
(10) days after Landlord's advice to Tenant, terminate this Lease. Anything in
this Lease to the contrary notwithstanding, in the event the Leased Premises are
rendered untenantable due to the fault or neglect of Tenant, its agents,
employees, invitees, or licensees, there shall be no abatement of Rent.
12. ASSIGNMENT, LETTING AND SUBLETTING
A. Except as permitted in subparagraph F below, Tenant, its legal
representatives and successors in interest, shall have no right to assign, let
or sublet or permit assigning, letting or subletting of this Lease, the Leased
Premises or any part thereof, respectively, without first obtaining the written
consent of Landlord, which consent shall not be unreasonably withheld,
11 - PLAZA TOWER ONE LEASE
<PAGE> 23
and any attempt to do so shall be null and void. Any consent of Landlord, unless
specifically stated therein, shall not relieve Tenant from its obligations under
this Lease, and a consent by Landlord to any one assignment or subletting shall
not constitute a consent to any other or subsequent assignment or subletting.
B. In addition to any other reasonable basis, Landlord shall be deemed
to be reasonably withholding its consent to any such assignment, letting or
subletting, if such assignment, letting or subletting would result in the
assignment, leasing or subleasing of the Leased Premises to any party, business
or lessee:
(1) who proposes to conduct a business therein which is not in
conformance with the provisions of paragraph 2 hereof; or
(2) who is then a lessee of the Building if the Landlord has, or
will have during the ensuing six (6) months, suitable space for rent in the
Building; or
(3) whose business is of a character which is not, in Landlord's
opinion, consistent with the character of the Building.
C. In the event that Tenant proposes any assignment of this Lease or
sublease of the Leased Premises, Tenant shall notify Landlord in writing at
least thirty (30) days before the date on which such assignment or sublease is
to be effective and, as included in such notice, furnish Landlord with (a) the
name of the proposed assignee or sublessee (the "Transferee"), (b) a description
of the business of the Transferee, (c) financial statements of the Transferee
(audited if available), (d) all written agreements governing the sublease, and
(e) any other information reasonably requested by Landlord with respect to the
assignment, sublease or the Transferee. Landlord shall respond to Tenant's
request for approval or disapproval of the proposed assignment or sublease
within fourteen (14) days after Landlord receives Tenant's request and all
documents and information required in the preceding sentence. If Landlord
consents to a proposed assignment or sublease of this Lease, the appropriate
parties shall enter into an assignment or consent to sublease agreement drafted
by Landlord. Consent by Landlord to any assignment or subletting shall not
include consent to the assignment or transferring of any lease renewal options
or space option rights of the Premises, special privileges or extra services
granted to Tenant under this Lease, unless otherwise agreed to by Landlord in
writing.
D. Tenant shall pay to Landlord fifty percent (50%) of all net profit
derived by Tenant from any assignment or subletting. For purposes of the
foregoing, "net profit" shall be deemed to be the amount of all rent payable by
such assignee or sublessee in any given year of the Lease Term in excess of the
Rent payable by Tenant under this Lease during such year less the following
verifiable costs and expenses: (i) any improvement allowance or other economic
concession paid by Tenant to the assignee/subtenant; (ii) broker's commissions
paid by Tenant with regard to the subletting; (iii) attorneys' fees incurred by
Tenant in connection with the assignment or sublease; (iv) lease takeover
payments; (v) costs of advertising the Premises for
12 - PLAZA TOWER ONE LEASE
<PAGE> 24
sublease, (vi) reasonable costs incurred by Tenant to make improvements to the
Premises for the assignee/subtenant to occupy the Premises, and (vii) all other
commercially reasonable costs of subletting incurred by Tenant. If a part of the
consideration for such assignment or subletting shall be payable other than in
cash, the payment to Landlord shall be in cash for its share of any non-cash
consideration based upon the fair market value thereof. Tenant shall and hereby
agrees that it will furnish to Landlord upon request from Landlord a complete
statement, certified by an officer or representative of Tenant with authority to
do so, setting forth in detail the computation of all net profit derived and to
be derived from such assignment or subletting, such computation to be made in
accordance with generally accepted accounting principles. Tenant agrees that
Landlord or its authorized representatives shall be given access at all
reasonable times to the books, records and papers of Tenant relating to any such
assignment or subletting, and Landlord shall have the right to make copies
thereof. The percentage of Tenant's profit due Landlord hereunder shall be paid
to Landlord within five (5) days of receipt by Tenant of all payments made from
time to time by such assignee or sublessee to Tenant.
E. Tenant shall reimburse Landlord upon demand for all costs incurred
by Landlord, including reasonable attorney's fees and costs, to prepare and
negotiate all documents in connection with any requested sublease or
assignment.
F. Notwithstanding anything to the contrary contained in this paragraph
12, Tenant need not obtain Landlord's prior consent to assign its interest in
this Lease or sublet all or any portion of the Leased Premises to an entity
which is controlled by, controls or is under common control with Tenant (an
"Affiliate"), provided that at the time of the proposed assignment or
subletting, Tenant's net worth is equal to or greater than its net worth as of
the date of this Lease. Tenant shall immediately notify Landlord of any such
assignment, purchase, transfer, sublease, action, or use. For purposes of this
Lease, "control" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and voting securities, by
contract or otherwise. Notwithstanding any such assignment or subletting or the
acceptance of rent by Landlord directly from any such assignee or sublessee,
Tenant shall remain fully liable for all obligations of Tenant hereunder,
without any obligation on the part of Landlord first to exhaust its remedies
against any such assignee or sublessee. Although Landlord's prior consent is not
required for transfers to an Affiliate, the Affiliate must expressly agree in
writing to assume all of Tenant's obligations under this Lease.
13. LIENS AND INSOLVENCY
Tenant shall keep the Leased Premises, the Building and the Improved
Area free from any liens arising out of any work performed, materials furnished,
or obligations incurred by Tenant. If Tenant becomes insolvent or voluntarily
or involuntarily bankrupt, or if a receiver, trustee or other liquidating
officer is appointed for the business or property of Tenant. Landlord shall have
the right and option at any time thereafter to terminate this Lease by notice to
Tenant.
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<PAGE> 25
14. CONDEMNATION
If all or any part of the Leased Premises are taken under power of
eminent domain or like power, or sold under imminent threat thereof to any
public authority or private entity having such power, this Lease shall terminate
as to the part of the Leased Premises so taken or sold, effective as of the date
possession is required to be delivered to such authority or entity, so long as
the remainder of the Leased Premises may be used for Tenant's business. Rent for
the remaining Lease Term shall be reduced in the proportion that the Tenant's
Total Square Footage is reduced by the taking. 1f a partial taking or sale of
the Building or the Leased Premises (i) substantially reduces the area of the
Leased Premises resulting in a substantial inability of Tenant to use the Leased
Premises for Tenant's business purposes, or (ii) renders the Building unviable
to Landlord, Tenant, in the case of (i), or Landlord, in the case of (ii) may
terminate this Lease by notice to the other party within thirty (30) days after
the terminating party receives a written notice of the portion to be taken or
sold, such termination to be effective one-hundred-eighty (180) days thereafter,
or when the portion is taken or sold, whichever is sooner. All condemnation
awards and similar payments shall be paid and belong to Landlord, except any
amounts awarded or paid specifically for Tenant's trade fixtures and relocation
costs or any other amounts awarded specifically to Tenant, provided such awards
do not reduce Landlord's award. Nothing contained herein shall diminish Tenant's
right to deal on its own behalf with the condemning authority.
15. CONSTRUCTION CONDITIONS
A. Tenant desires and Landlord has agreed to construct certain
improvements in the Leased Premises in the following manner. Landlord shall
first construct certain improvements ("Phase I Improvements") in that portion of
the Leased Premises consisting of approximately 6,474 rentable square feet
("Phase I Space"), as depicted in Exhibit "B-2" attached hereto. Landlord shall
notify Tenant of the Substantial Completion (as defined in Exhibit "C" attached
hereto) of the Phase I Improvements and Tenant shall promptly move all of its
personal property from the Phase II Space into the Phase I Space. Landlord shall
then construct certain improvements ("Phase II Improvements") in that portion
of the Leased Premises consisting of approximately 1,974 rentable square feet
("Phase II Space"), as depicted in Exhibit "B-2" attached hereto. The Phase I
Improvements and Phase II Improvements shall hereinafter be referred to
collectively as the "Leasehold Improvements" and shall be as described in the
Work Agreement attached hereto as Exhibit "C."
B. Landlord shall bear the risk of loss to the Leasehold Improvements
in any portion of the Leased Premises until the Lease Commencement Date. Tenant
may inspect the Leasehold Improvements at reasonable times so long as such
inspections do not interfere with Landlord's construction activities and
Landlord's approval is received in advance of Tenant's inspection visit.
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<PAGE> 26
C. To the extent that this paragraph or paragraph 16 below conflicts
with the Work Agreement, the Work Agreement shall control.
D. Landlord estimates that subject to the provisions of the Work
Agreement attached hereto as Exhibit "C", Substantial Completion of the Phase I
Improvements shall occur and the Phase I Space shall be certified and approved
for occupancy on or about July 3, 1998, and furthermore that Substantial
Completion of the Phase II Improvements shall occur and the Phase II Space shall
be certified and approved for occupancy on or about July 28, 1998; provided,
however, that if such Substantial Completion does not occur by such dates,
Landlord shall not be liable in damages to Tenant for any delay in Substantial
Completion and such delay shall not affect the Lease Commencement Date as
defined herein, except as otherwise provided in Exhibit "C" in the event of
Landlord Delay.
E. By taking possession hereunder, Tenant shall have acknowledged that
it has examined the Leased Premises and accepts the same as being in the
condition called for by this Lease. Landlord shall use reasonable efforts to
correct minor defects, if any, shown on Tenant's "punch list" within 30 days
after Tenant takes possession, and in the event a major defect or omission
appears in the installation of the major building systems or structure, Landlord
agrees to correct any such defect or omission as soon as reasonably possible
after receiving notice thereof from Tenant.
16. OCCUPANCY, LEASE COMMENCEMENT DATE
If Substantial Completion of the Leased Premises has not occurred by
July 28, 1998, and such delay continues for more than one hundred and twenty
(120) days after such date, plus any extensions permitted in the Work Agreement,
either party may terminate this Lease. Prior to occupying the Leased Premises,
Tenant shall execute and deliver to Landlord a letter in the form attached
hereto as Exhibit "E", acknowledging the Lease Commencement Date. If Tenant
fails to deliver such letter, the date of Substantial Completion of the Leased
Premises shall be deemed to be the Lease Commencement Date.
17. RULES AND REGULATIONS
Tenant covenants that Tenant and its agents, employees, invitees, or
those claiming under Tenant, will at all times observe, perform and abide by all
reasonable rules and regulations promulgated by Landlord, from time to time, as
long as such rules and regulations do not conflict with, or unreasonably modify,
any provision of this Lease and such rules and regulations are uniformly applied
to all tenants of the Building. Landlord's rules and regulations in effect on
the date hereof are attached hereto as Exhibit "F".
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<PAGE> 27
18. PARKING
Landlord shall provide non-exclusive parking within a seven level
structure (1-6 covered) contiguous to the Building. Within said structure,
Tenant shall lease from Landlord twenty-five (25) non-exclusive parking spaces
for use by the Tenant at the then-current monthly market rate, to be determined
by Landlord in its sole discretion. The current monthly market rate for such
non-exclusive parking spates is Fifty-five and no/100 Dollars ($55.00) per space
per month. Tenant shall pay the foregoing parking charges to Landlord or its
designee on the first day of each month of the Lease Term. All present and
future parking shall be within such parking areas and not within the street
right-of-way. There shall be no on-street parking. Tenant may not lease parking
spaces within said structure from anyone other than Landlord. Tenant may not
sublease parking spaces within said structure to anyone other than a subtenant
to whom an assignment, letting, or subletting was made pursuant to paragraph 12
hereof. The number of parking spaces allotted to Tenant under this paragraph has
been calculated based on a ratio of 3 parking spaces per 1,000 rentable square
feet of the Leased Premises. Therefore, if during the original or renewal term
of this Lease the square footage of the Leased Premises should change, the
number of parking spaces granted to Tenant may be modified accordingly.
19. ACCESS
Landlord or Landlord's employees, agents or contractors may enter the
Leased Premises at reasonable times for the purpose of inspecting, altering or
repairing the Leased Premises or other portions of the building and for the
purpose of ascertaining compliance by Tenant with the provisions of this Lease.
Landlord may also show the Leased Premises to prospective purchasers, renters or
lenders during regular business hours and upon reasonable notice during the last
twelve (12) months of the Lease Term, provided that Landlord shall not
unreasonably interfere with Tenant's business operations or with Tenant's use
and occupancy of the Leased Premises. Landlord shall repair, at Landlord's
expense, any damage to the Leased Premises resulting from the exercise of the
foregoing rights by Landlord or Landlord's employees, agents or contractors.
20. SIGNS
All signs and symbols placed on the doors or windows or elsewhere
about the Leased Premises, or upon any other part of the Building, including
building directories, shall be subject to the approval of Landlord. Tenant shall
have no right to place signs outside the Building and within the Improved Area.
Tenant shall be entitled to place signs within the interior of the Leased
Premises without having first obtained Landlord's approval, provided that such
signage is
16- PLAZA TOWER ONE LEASE
<PAGE> 28
not visible from common areas of the Building, including, but not limited to,
elevators and common area corridors. Upon expiration of this Lease, all signs
installed by Tenant shall be removed and any damage resulting therefrom shall be
promptly repaired, or such removal and repair may be done by Landlord and the
cost thereof charged to Tenant as additional Rent hereunder. Notwithstanding
anything to the contrary in the foregoing, Tenant shall be allowed to (i) place
signage on the transom of the glass door leading into the annex from the
atrium, (ii) place its corporate name in the directory located in the main
lobby and in the directory located in the annex lobby, and (iii) mount a
building standard sign on the wall next to the main entrance of the Leased
Premises; provided, however, that the signage specified in items (i) and (ii)
shall be designed at Tenant's sole cost and expense and all of the foregoing
signage shall be installed at Tenant's sole cost and expense and shall be
subject to Landlord's prior written approval.
21. TENANT'S DEFAULT
It shall be an "Event of Default" if (i) Tenant fails to pay Rent or
any other charge or payment required of Tenant hereunder when due and such
failure continues for ten (10) days after written notice thereof to Tenant by
Landlord; (ii) Tenant violates or fails to perform any of the other conditions,
covenants or agreements herein made by Tenant, and such violation or failure
continues for thirty (30) days after written notice thereof to Tenant by
Landlord or if such default cannot be cured within thirty (30) days if Tenant
commences to cure the default within the thirty (30)-day period, but fails to
proceed diligently and fully cure the default within forty-five (45) days; (iii)
Tenant makes a general assignment for the benefit of its creditors or files a
petition for bankruptcy or other reorganization, liquidation, dissolution or
similar relief; (iv) a proceeding is filed against Tenant seeking any relief
mentioned in (iii) above which is not dismissed within sixty (60) days after
filing; (v) a trustee, receiver or liquidator is appointed for Tenant or a
substantial part of its property; (vi) Tenant's interest under this Lease is
taken upon execution or by other process of law directed against Tenant or is
attached by or on behalf of any creditor of Tenant; or (vii) Tenant mortgages,
assigns (except as expressly permitted in this Lease) or otherwise encumbers
Tenant's interest under this Lease.
If an Event of Default occurs, Landlord may: (i) without obligation to
do so and without releasing Tenant from any obligation under this Lease, make
any payment or take any action Landlord may deem necessary or desirable to cure
such Event of Default, and the cost thereof shall be reimbursed by Tenant to
Landlord within ten (10) days after demand; (ii) terminate this Lease by written
notice to Tenant as of the date such notice is given or as of any other date
specified in such notice; (iii) with or without terminating this Lease, reenter
and take possession of the Leased Premises by legal proceedings; (iv) with or
without terminating this Lease, if Tenant has vacated or abandoned the Leased
Premises, reenter and take possession of the Leased Premises, or any part
thereof, and remove the effects therein without liability for any damages
thereto and without being deemed guilty of any manner of trespass and without
prejudice to any other remedies of Landlord hereunder; and (v) exercise any
other legal remedy, including, without limitation, equitable remedies, on
account of such Event of Default. All remedies of
17- PLAZA TOWER ONE LEASE
<PAGE> 29
Landlord under this Lease shall be cumulative, and the exercise of any of such
remedies shall not prevent the concurrent or subsequent exercise of any other
remedy.
Should Landlord elect to reenter or take possession of the Leased
Premises pursuant to legal proceedings or otherwise, Landlord may, from time to
time, without any obligation to do so and without terminating this Lease, relet
the Leased Premises or any part thereof on behalf of Tenant for such term or
terms and at such rent or rents, and upon such other terms and conditions, as
Landlord may deem advisable in its sole discretion (including, without
limitation, giving concessions, free rent, and payment of concessions), with the
right to make alteration and repairs to the Leased Premises. No such reentry or
taking of possession of the Leased Premises by Landlord shall be construed as an
election on Landlord's part to terminate this Lease, unless a written notice of
termination is given to Tenant by Landlord, nor shall it preclude Landlord from
terminating this Lease at a later time by giving written notice to Tenant.
If Landlord elects to take possession without terminating this Lease,
then such repossession shall not relieve Tenant of its obligations and
liabilities under this Lease, all of which shall survive such repossession. In
the event of such repossession, Tenant shall pay to Landlord, as Rent, all Rent
which would be payable hereunder if such repossession had not occurred, less the
net proceeds, if any, of any reletting of the Leased Premises, after deducting
all of Landlord's reasonable expenses incurred in connection with such
reletting, and rental concessions. Tenant shall pay such Rent to Landlord on the
days on which such Rent would have been payable hereunder if possession had not
been retaken.
If, however, this Lease is terminated by Landlord, Landlord shall be
entitled to recover as damages from Tenant, in addition to all other damage
suffered by Landlord on account of any Event of Default, the present value of
all of the Rent which would have been due for the remainder of the Lease Term
had this Lease not been terminated, discounted at the rate of five percent
(5%), plus all of Landlord's costs of reletting the Leased Premises, including
repair, alteration, and preparation of the Leased Premises for reletting,
brokerage commissions, attorneys' fees, and rental concessions. Said amount
shall be immediately due and payable by Tenant to Landlord. Any amount due to
Landlord hereunder may be collected after termination.
22. PERSONAL PROPERTY LIEN
As additional security for Tenant's performance of its obligations
under this Lease, Tenant hereby grants to Landlord a security interest in and to
all of the personal property of Tenant situate or to become situate on the
Leased Premises as security for the payment of all Rent and other sums due or to
become due under this Lease. Tenant shall execute such documents as Landlord may
reasonably require to evidence Landlord's security interest in such personal
property, including financing statements, separate security agreements and other
documentation. If Tenant is in default under this Lease, such personal property
shall not be
18- PLAZA TOWER ONE LEASE
<PAGE> 30
removed from the Leased Premises (except to the extent such property is replaced
with an item of equal or greater value), without the prior written consent of
Landlord. It is intended by the parties hereto that this Lease and the
provisions herein contained shall have the effect of a security agreement
governing such personal property, and Landlord, upon the occurrence of an Event
of Default set forth in paragraph 21 may exercise any rights of a secured party
under the Uniform Commercial Code of the State of Colorado, including the right
to take possession of such personal property and, after proper notice to those
parties required by law to be notified, shall be authorized to sell the same for
the best price that can be obtained at public or private sale, and out of the
proceeds derived therefrom, to pay the amount due Landlord, and all costs
arising out of the execution of the provisions of this paragraph, paying the
surplus, if any, to Tenant. If such personal property, or any portion thereof,
shall be offered at a public sale, Landlord may become the purchaser thereof.
Notwithstanding the foregoing, Landlord shall subordinate its lien in Tenant's
personal property to the security interest of Tenant's supplier or institutional
financial source, provided that the subordination must be limited to a specified
transaction and specified items of the fixtures, equipment, or inventory
involved in the transaction. Furthermore, such subordination shall be on a form
supplied by Landlord.
23. QUIET ENJOYMENT, INABILITY TO PERFORM
A. If, and so long as, Tenant pays Rent and keeps and performs each
and every term, covenant and condition herein contained on the part and on
behalf of Tenant to be kept and performed, Tenant shall quietly enjoy the Leased
Premises without hindrance or molestation by Landlord, subject to the terms,
covenants and conditions of this Lease and the Superior Instruments, as defined
and provided in paragraph 35 below.
B. Landlord shall pay all taxes and assessments so as not to
jeopardize Tenant's use of the Leased Premises. The foregoing notwithstanding;
Landlord shall be entitled to contest any tax or assessment which it deems to be
improperly levied against the Improved Area or any part thereof, so long as
Tenant's use of the Leased Premises is not interfered with.
C. Whenever a period of time is herein prescribed for action to be
taken by Landlord or Tenant (other than Tenant's obligation to pay rent),
Landlord or Tenant shall not be liable or responsible for and there shall be
excluded from the computation of any such period of time. any delays due to
strikes, riots, acts of God, shortages of labor or materials, war, government
laws, regulations or restrictions, or any other causes of any kind whatsoever
which are beyond the reasonable control of Landlord or Tenant (herein referred
to as "Unavoidable Delay").
24. HOLD OVER TENANCY
If (without execution of a new lease or written extension) Tenant
shall hold over after the expiration of the Lease Term, Tenant may, at
Landlord's election, be deemed to be occupying the Leased Premises as a tenant
from month to month, which tenancy may be terminated as provided by law. During
such tenancy, Tenant agrees to pay to Landlord one hundred and fifty percent
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<PAGE> 31
(150%) of (i) Tenant's Pro Rata Share of Operating Costs and (ii) the then
current Base Rent, as set forth herein, unless a different rate is agreed upon
in writing, and to be bound by all of the terms, covenants and conditions as
herein specified, so far as applicable.
25. ATTORNEYS' FEES
In the event either party requires the services of any attorney in
connection with enforcing the terms of this Lease, or in the event suit is
brought for the recovery of any Rent due under this Lease, or for the breach of
any covenant or condition of this Lease, or for the restitution of the Leased
Premises to Landlord and/or eviction of Tenant during the Lease Term, or after
the expiration thereof, the party prevailing in any such legal action shall be
entitled to an award for all legal costs and expenses, including, but not
limited to, a reasonable sum for attorneys' fees, whether incurred at trial, on
appeal or otherwise.
26. AMENDMENT, WAIVER
This Lease constitutes the entire agreement between the parties and
supersedes all prior agreements or understandings between the parties with
respect to the subject matter hereof. No prior agreement or understanding shall
be effective. This Lease shall not be amended or modified except in writing by
both parties. No covenant or term of this Lease shall be waived except with the
express written consent of the waiving party whose forbearance or indulgence in
any regard shall not constitute a waiver of such covenant or term. Failure to
exercise any right in one or more instances shall not be construed as a waiver
of the right to strict performance or as an amendment to this Lease.
27. NOTICES
All notices required by this Lease shall be in writing, sealed in an
envelope and delivered by nationally recognized overnight courier, in person, or
mailed by U.S. Registered or Certified Mail, return receipt requested, postage
prepaid to the address specified below:
If intended for Landlord: Property Colorado OBJLW One Corporation
c/o Clarion Partners, LLC
335 Madison Avenue - 7th Floor
New York, New York 10017
Attn: Account Manager
with a copy to: Property Colorado OBJLW One Corporation
c/o Clarion Realty Services, LLC
6400 S. Fiddler's Green Circle, Suite 180A
Englewood, Colorado 80111
Attn: General Manager
20- PLAZA TOWER ONE LEASE
<PAGE> 32
If intended for Tenant: Mr. Daniel H. Hartnett, Esq.
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
with a copy to: USA Global Link, Inc.
Gary W. Hamm, P.E.
6400 S. Fiddlers Green Circle, Suite 160A
Englewood, Colorado 80111
with a copy to: USA Global Link, Inc.
50 North Third Street
Fairfield, Iowa 52556
Attention: Finance/Legal Departments
or to such other address(es) as either party designates by notice, as provided
in this paragraph, to the other party, from time to time. Notice shall be
effective as of the date delivered in person or the date postmarked, whichever
is later.
28. BINDING EFFECT, GENDER
Subject to the provisions in paragraph 12, this Lease shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
It is understood and agreed that the terms "Landlord" and "Tenant" and verbs and
pronouns in the singular number are uniformly used throughout this Lease
regardless of gender, number or fact of incorporation of the parties hereto.
29. ADDENDA AND ATTACHMENTS
The typewritten addenda, exhibits or supplemental provisions, if any,
attached or added hereto, are made a part of this Lease by reference and the
terms thereof shall control over any inconsistent provisions in the paragraphs
of this Lease.
30. LIMITATION OF LIABILITY
The obligations of Landlord under this Lease do not constitute
personal obligations of the individual partners, directors, officers, or
shareholders of Landlord, and Tenant shall look solely to the real estate that
is the subject of this Lease and to no other assets of the Landlord for
satisfaction of any liability in respect of this Lease and will not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or any of their personal assets for such satisfaction or for any
deficiency judgment should Tenant be unable to satisfy any liability owed to it,
unless recourse against such individuals is expressly permitted under applicable
laws. The obligations of Tenant under this Lease do not constitute personal
obligations of the individual partners, directors, officers, or shareholders of
Tenant, and Landlord will not seek recourse against the individual partners,
directors, officers or shareholders of
21- PLAZA TOWER ONE LEASE
<PAGE> 33
Tenant or any of their personal assets for such satisfaction or for any
deficiency judgment should Landlord be unable to satisfy any liability owed to
it, unless recourse against such individuals is expressly permitted under
applicable laws.
31. LANDLORD'S RESERVED RIGHTS
Without notice and without liability to Tenant, Landlord shall have
the right to:
(1) Change (i) the name of the Building, and (ii) the Street address of
the Building if required to do so by an appropriate authority;
(2) Install and maintain reasonable signs on the exterior of the
Building;
(3) Make reasonable and uniform rules and regulations as, in the
judgment of landlord, may from time to time be needed for the safety of the
tenants, and the care and cleanliness of the Building and the preservation of
good order therein. Tenant shall be notified in writing when each such rule and
regulation is promulgated;
(4) Grant utility easements or other easements to such parties, or
replat, subdivide or make such other changes in the legal status of the land
underlying the Improved Area, as Landlord deems necessary, provided such grant
or changes do not substantially or materially interfere with Tenant's use of the
Leased Premises as intended under this Lease; and
(5) Sell the Building and assign this Lease to the purchaser (and upon
such assignment be released from all of its obligations under this Lease which
accrue after such assignment). Tenant agrees to attorn to such purchaser, or any
other successor or assign of Landlord through foreclosure or deed in lieu of
foreclosure or otherwise and to recognize such person as Landlord under this
Lease, provided that such successors execute an agreement in form and substance
similar to the Attornment and Nondisturbance Agreement attached hereto as
Exhibit "G", as provided more fully in paragraph 35 below.
32. ESTOPPEL CERTIFICATE
Within ten (10) days after request therefor by Landlord, its agents,
successors or assigns, Tenant shall deliver, in recordable form, a certificate
to any proposed mortgagee or purchaser, or to Landlord, together with a true and
correct copy of this Lease, certifying, if applicable (i) this Lease is in full
force and effect, without modification, (ii) the amount, if any, of prepaid Rent
and security deposit paid by Tenant to Landlord, (iii) that Landlord, as of the
date of the certificate, has performed all of its obligations due to be
performed under this Lease and that there are no defenses, counterclaims,
deductions or offsets outstanding, or other excuses for Tenant's performance
under this Lease, or stating those claimed by Tenant, and (iv) any other fact
reasonably requested by Landlord or such proposed mortgagee or purchaser, which
does not modify or conflict with Tenant's rights under this Lease. Tenant's
failure to deliver said
22- PLAZA TOWER ONE LEASE
<PAGE> 34
statement in time shall be conclusive upon Tenant: (a) that this Lease is in
full force and effect, without modification except as may be represented by
Landlord, (b) that there are no uncured defaults in Landlord's performance and
Tenant has no right of offset, counterclaim defenses or deduction against Rent
or Landlord hereunder; and (c) that no more than one month's Rent has been paid
in advance. The foregoing certifications by Tenant shall be set forth on an
estoppel certificate in substantially the same form as the one attached hereto
as Exhibit "H."
33. ACCORD AND SATISFACTION
No receipt and retention by Landlord of any payment tendered by Tenant
in connection with this Lease will give rise to, or support, or constitute an
accord and satisfaction, notwithstanding any accompanying statement, instruction
or other assertion to the contrary (whether by notation on a check or in a
transmittal letter or otherwise), unless Landlord expressly agrees to an accord
and satisfaction in a separate writing duly executed by the appropriate
persons. Landlord may receive and retain, absolutely and for itself, any and
all payments so tendered, notwithstanding any accompanying instructions by
Tenant to the contrary. Landlord will be entitled to treat any such payments as
being received on account of any item or items or Rent, or other sums due from
Tenant hereunder in connection herewith in such amounts and in such order as
Landlord may determine at its sole option.
34. SEVERABILITY
The parties intend this Lease to be legally valid and enforceable in
accordance with all of its terms to the fullest extent permitted by law. If any
term hereof shall be finally held to be invalid or unenforceable, the parties
agree that such term shall be stricken from this Lease, the same as if it never
had been contained herein. Such invalidity or unenforceability shall not extend
to or otherwise affect any other term of this Lease, and the unaffected terms
hereof shall remain in full force and effect to the fullest extent permitted by
law, the same as if such stricken term never had been contained herein.
35. SUBORDINATION
The rights of Tenant hereunder are, and shall be, at the election of
any mortgagee, subject and subordinate to the lien of any deeds of trust,
mortgages, the encumbrance of any leasehold financing, or the lien resulting
from any other method of financing or refinancing, now or hereafter in force
against the Improved Area or the Building, and to all advances made, or
hereafter to be made upon the security thereof (herein referred to as the
"Superior Instruments"). The foregoing notwithstanding, for any liens or
Superior Instruments filed of record after the execution of this Lease, the
rights of Tenant under this Lease shall not be subject or subordinated to such
liens or Superior Instruments unless the holders thereof execute an agreement in
form and substance similar to the Attornment and Nondisturbance Agreement
attached hereto as Exhibit "G". If requested, Tenant agrees to execute whatever
reasonable documentation may be required to further effectuate the provisions of
this paragraph.
23- PLAZA TOWER ONE LEASE
<PAGE> 35
Tenant agrees to attorn to any purchaser of the Building, or any other
successor or assign of Landlord through foreclosure or deed in lieu of
foreclosure, in return for and upon delivery to Tenant by such purchaser or
mortgagee, as the case may be, of an agreement substantially in the form of the
Attornment and Nondisturbance Agreement.
36. TIME
Time is of the essence hereof.
37. APPLICABLE LAW
This Lease shall be construed according to the local laws of the State
of Colorado, without regard to the principles of conflicts of law, and venue
shall be in Arapahoe County, Colorado.
38. BROKER'S INDEMNIFICATION
As part of the consideration for the granting of this Lease, Tenant
represents and warrants to Landlord that no broker or agent negotiated or was
instrumental in the negotiation or consummation of this Lease except Tenant's
Broker of Record, and Tenant agrees to indemnify Landlord against any loss,
expense, cost or liability incurred by Landlord as a result of any claims by
Tenant's Broker of Record and any other broker or finder claiming through
Tenant. Landlord represents and warrants to Tenant that no broker or agent
negotiated or was instrumental in the negotiation or consummation of this Lease
except Tenant's Broker of Record and Landlord agrees to indemnify Tenant against
any loss, expense, cost or liability incurred by Tenant as a result of any
claims by any other broker or finder claiming through Landlord. Notwithstanding
the foregoing indemnification by Tenant, Landlord shall pay Tenant's Broker of
Record the sum of Three and no/100 Dollars ($3.00) per rentable square foot of
the Leased Premises equal to Twenty Five Thousand Three Hundred Forty-Four and
no/100 Dollars ($25,344.00) as a commission for this transaction. One-half
of this sum shall be paid upon the date this Lease is fully executed by the
parties hereto; the remaining one-half shall be paid upon the Lease Commencement
Date for the entire Leased Premises.
39. SECURITY DEPOSIT
The Tenant has deposited with Landlord, simultaneously with the
execution of this Lease, the sum of Forty Thousand One Hundred Twenty-Eight and
no/100 Dollars ($40,128.00) as security for the Rent payable hereunder, for the
return of the Leased Premises in good order and condition, and for the
performance of each and every one of the terms, covenants and conditions herein
stipulated. Said sum shall not be applicable by the Tenant to the payment of
Rent or any other charges for which it may become liable under this lease and
such deposit shall in no way relieve Tenant from the faithful and punctual
performance of all covenants and conditions hereby imposed upon it. Landlord
agrees that at the termination of this Lease, or at the termination of
24- PLAZA TOWER ONE LEASE
<PAGE> 36
any extension hereof, and provided that the Tenant has complied in all respects
with the terms, covenants and conditions herein, the deposit shall be returned
to Tenant thirty (30) days after the Leased Premises have been vacated in good
order and condition. In the event of a sale or leasing of the Building, Landlord
shall have the right to transfer the security deposit to its vendee and Landlord
shall thereupon be released by Tenant from all liability for the return of the
security deposit. In such event, Tenant agrees to look solely to the new
landlord for the return of said deposit. The provisions hereof shall apply to
every transfer or assignment made of the security deposit to a new landlord. The
Security Deposit shall be invested by Landlord in a Certificate of Deposit (the
"Certificate") at a bank of Landlord's choice. The Certificate will be held in
Landlord's name and will be invested for an initial term of six (6) months and
shall automatically renew, in the amount of principal plus interest for a like
term, except that the final renewal shall be for a period which results in the
Certificate maturing on the expiration date of the Lease Term. If at the end of
the Lease Term Tenant is not in default, the principal and interest remaining on
the Certificate shall be returned to Tenant.
40. CONFLICTS OF INTEREST
Conflicts of interest relating to this Lease are strictly prohibited.
Except as otherwise expressly provided herein, neither Tenant nor any director,
employee or agent of Tenant, shall give to or receive from any director,
employee or agent of Landlord any gift, entertainment or other favor of
significant value, or any commission, fee or rebate. Likewise, neither Tenant
nor any director, employee or agent of Tenant shall enter into any business
relationship with any director, employee or agent of Landlord or of any
affiliate of Landlord), unless such person is acting for and on behalf of
Landlord, without prior written notification thereof to Landlord. Any
representative(s) authorized by Landlord may audit any and all records of Tenant
for the sole purpose of determining whether there has been compliance with this
paragraph.
41. TENANT REPRESENTATIONS
If Tenant is a legal entity, Tenant hereby represents and warrants to
Landlord that (i) such entity is duly organized and validly existing under the
laws of the State of its formation and is qualified to do business in, and is in
good standing under, the laws of the State of Colorado, to the extent such
qualification is necessary for Tenant to conduct its business in the State of
Colorado; and (ii) this Lease and all documents executed or to be executed by
Tenant in connection herewith and which are to be delivered to Landlord will be
duly authorized, executed, and delivered and will be legal, valid, and binding
obligations of Tenant, and do not violate any provisions of any agreement or
currently existing judicial order to which Tenant is a party or to which it is
subject. Further, if requested by Landlord, either prior to or after Landlord's
execution of this Lease, Tenant shall provide Landlord with certified evidence
(i.e. certificate of authority) of the foregoing.
25- PLAZA TOWER ONE LEASE
<PAGE> 37
42. ENVIRONMENTAL COVENANTS
A. GENERAL PROHIBITION; INDEMNITY. Tenant shall not cause or permit
any explosives, flammable substances, radioactive materials, asbestos in any
form, paint containing lead, materials containing urea formaldehyde,
polychlorinated biphenyls, or any other hazardous, toxic, or dangerous
substances, wastes, or materials, whether having such characteristics in fact or
defined as such under federal, state, or local laws or regulations and any
amendments thereto (all such materials and substances being hereinafter referred
to as "Hazardous Materials"), to be produced, brought upon, used, stored,
treated, released, or disposed of on, in, or about the Leased Premises, provided
that Tenant may store and use toner, cleaning fluids, and similar office
materials if such storage and usage is (i) permitted by applicable law and (ii)
accomplished in strict compliance with such law. Tenant shall indemnify, defend,
and hold Landlord harmless from and against any and all actions, costs, claims,
damages (including without limitation, attorneys', consultants', and experts'
fees, court costs, and amount paid in settlement of any claims or actions),
fines, forfeitures, or other civil, administrative, or criminal penalties,
injunctive or other relief (whether or not based upon personal injury; property
damage, or contamination of, or adverse effects upon, the environment, water
tables, or natural resources), liabilities, or losses arising from a breach of
this prohibition by Tenant, its affiliates, agents, employees, contractors,
subtenants, assignees, or invitees.
B. NOTICE. Tenant immediately shall notify Landlord in writing of: (i)
any spill, release, discharge, or disposal of any Hazardous Materials upon, in,
or about the Leased Premises; (ii) any enforcement, cleanup, removal, or other
governmental or regulatory action instituted, contemplated, or threatened (if
Tenant has notice thereof) pursuant to any laws respecting Hazardous Materials;
(iii) any claim made or threatened by any person against Tenant or the Leased
Premises relating to damage, contribution, cost recovery, compensation, loss, or
injury resulting from or claimed to result from any Hazardous Materials; and
(iv) any reports made to any governmental agency or entity arising out of or in
connection with any Hazardous Materials upon, in, or about or removed from the
Leased Premises. Tenant also shall supply to Landlord as promptly as possible,
and in any event within five (5) business days after Tenant first receives or
sends the same, copies of all claim, reports, complaints, notices, warnings, or
asserted violations relating in any way to the Leased Premises, or Tenant's use
or occupancy thereof.
C. ACTION BY TENANT. In the event that Hazardous Materials are
discovered upon, in, or about the Leased Premises which have been brought upon
the Leased Premises by Tenant, its agents, employees, contractors or other
representatives, and any governmental agency or entity having jurisdiction over
the Property requires the removal of such Hazardous Materials, Tenant shall be
responsible for removing such Hazardous Materials. Notwithstanding the
foregoing, Tenant shall not take any remedial action upon, in, or about the
Leased Premises without first notifying Landlord of Tenant's intention to do so
and affording Landlord the opportunity to protect Landlord's interest with
respect thereto.
26- PLAZA TOWER ONE LEASE
<PAGE> 38
D. SURVIVAL. The respective rights and obligations of Landlord and
Tenant under this paragraph 42 shall survive the expiration or earlier
termination of this Lease.
E. LANDLORD'S REPRESENTATION AS TO HAZARDOUS MATERIALS. Landlord hereby
represents and warrants to Tenant that as of the date of this Lease, Landlord
has not received any notices from any governmental authority that would put
Landlord on notice of any existing violations within the Building of any
hazardous materials laws.
43. RENEWAL OPTION
A. Tenant shall have the option to renew the Lease Term for one (1)
additional five (5)-year period by notifying Landlord in writing of Tenant's
election to exercise its option at least nine (9) months but no earlier than
twelve (12) months prior to the expiration of the original term of this Lease.
Tenant may exercise such option provided Tenant is not in material default in
the performance of any of the terms or covenants of this Lease as of the time of
such exercise nor at the time the renewal period is to commence and that Tenant
has satisfied all of its conditions under this Lease. The Leased Premises shall
be leased by Tenant during the renewal term in their "as-is" condition. All
terms and conditions of this Lease shall apply during the renewal term,
provided, however, that the Base Rent and parking charges payable during such
renewal period shall be the Fair Market Rental Value (as hereinafter defined)
and shall be determined as set forth below.
B. Fair Market Rental Value (hereinafter referred to as "FMRV") as
used in this Lease shall be the rent calculated at rates for similar space in
the Building and in comparable Class A+, high-rise buildings with comparable
finishes and amenities offered by the Building and for parking garage spaces in
similar totally enclosed parking garages located within the Denver Tech
Center/Greenwood Plaza Market Area in which the Building is located, as of the
date of Landlord's declaration to be provided to Tenant in accordance with the
following sentence. Landlord shall declare the FMRV for each year of the renewal
period, which may include annual increases, in writing to Tenant within thirty
(30) days of the date Landlord receives Tenant's notice to renew. Tenant shall
have fifteen (15) days from the date of Landlord's declaration in which to
notify Landlord that it accepts Landlord's declaration of the FMRV and wishes to
renew the Lease Term. Failing such timely notice, Tenant shall be deemed to have
waived its right to renew under this paragraph 43.
44. CANCELLATION OPTION
Tenant shall have a one-time right to terminate this Lease
effective as of the last day of the 37th month after this Lease commences with
respect to the Phase I Space (as set forth in paragraph 1.F. hereof) (the
"Termination Date"), subject to the following terms and conditions: (1) Tenant
shall give Landlord written notice of its desire to exercise the foregoing
termination right at least six (6) months prior to the Termination Date; and (2)
on or before the Termination Date, Tenant shall pay Landlord a termination fee
equal to One Hundred Fifty
27- PLAZA TOWER ONE LEASE
<PAGE> 39
Thousand Four Hundred Fifty-Nine and no/100 Dollars ($150,459.00) (the
"Termination Fee"). Tenant and Landlord acknowledge and agree that payment to
Landlord of the Termination Fee is a reasonable forecast of the actual damages
which will be suffered by Landlord in the event Tenant exercises its termination
right set forth in this paragraph 44, which actual damages are otherwise
difficult or impossible to ascertain, and therefore such amount constitutes
liquidated damages and not a penalty.
45. EXPANSION OPTION
(A) Subject to the terms and conditions contained herein,
Tenant shall have an Expansion Option in regard to the 2,383 rentable square
feet of space adjacent to the Leased Premises which is currently occupied by the
Building Management Office (the "Expansion Space"), as depicted on Exhibit "B-3"
attached hereto.
(B) If at any time prior to July 31, 1998, Tenant desires to
lease the Expansion Space from Landlord, Tenant shall notify Landlord in writing
of such desire. Within sixty (60) days of Tenant's notice, if Landlord shall
determine, in its sole and absolute discretion, that there are suitable
alternative premises for the Building Management Office within the Building,
Landlord shall provide Tenant with written notice (the "Expansion Notice") that
the Expansion Space is available for leasing. Tenant shall thereupon have the
right to lease the Expansion Space in accordance with the terms set forth below,
provided that in order to exercise such right, Tenant must provide Landlord with
written notice of its intent to exercise such right within ten (10) business
days following the Expansion Notice. Should Tenant indicate that it is not
prepared to lease the Expansion Space, whether by notice to Landlord or by
failing to respond to the Expansion Notice within the ten (10)-business day
period, then Tenant shall be deemed to have waived its Expansion Option for the
Expansion Space.
(C) If Tenant exercises its Expansion Option, the effective
date of Tenant's leasing of the Expansion Space (the "Expansion Space Effective
Date") shall be the earlier to occur of (i) two (2) months after the Expansion
Notice, (ii) the date Tenant occupies and operates its business from the
Expansion Space, (iii) substantial completion of any tenant improvements to be
constructed within the Expansion Space, or (iv) October 1, 1998. Provided Tenant
is not in default under this Lease at the time such right is exercised or at the
time the term for the Expansion Space is to commence, Tenant shall have the
right to lease the Expansion Space upon the same terms, covenants, and
conditions set forth in this Lease, except as follows:
(i) Base Rent. On the Expansion Space Effective Date,
the Base Rent due under this Lease shall be increased by an amount
equal to Nineteen and 50/100 Dollars ($19.50) multiplied by the
rentable square feet of the Expansion Space.
(ii) Operating Costs. On the Expansion Space
Effective Date, the percentage for Tenant's Pro Rata Share shall be
increased by a percentage determined by multiplying 100 times the
result of dividing the square footage of the Expansion Space by
28- PLAZA TOWER ONE LEASE
<PAGE> 40
the Total Square Footage of the Tower. The Base Year for the Expansion
Space shall be the calendar year ending December 31, 1998.
(iii) Tenant Improvement Allowance. Landlord shall
contribute the sum of Ten and no/100 Dollars ($10.00) per rentable
square foot of the Expansion Space as an improvement allowance toward
the cost of planning, design and construction of any improvements
within the Expansion Space. Notwithstanding the foregoing, any portion
of the allowance provided for in the preceding sentence that is not
applied toward the costs of any tenant improvements in the Expansion
Space shall be applied to the relocation costs incurred by Landlord to
relocate the Building Management Office.
(D) Except as specifically provided otherwise in the
Expansion Notice, the Expansion Space shall be leased by Tenant in "as-is"
condition. The rights of Tenant under this paragraph 45 shall not be severed
from this Lease or separately sold, assigned, or otherwise transferred, and
shall terminate at the expiration of the original term of this Lease.
46. RIGHT OF FIRST REFUSAL
(A) Subject to the terms and conditions contained herein,
after the expiration of Tenant's expansion option set forth in paragraph 45
above, Tenant shall have a continuing Right of First Refusal in regard to the
Expansion Space (which shall be referred to herein as the "First Refusal
Space").
(B) If at any time after August 1, 1998, during the original
five (5)-year Lease Term (but not during any renewal term), Landlord has reached
a preliminary agreement with a bona fide prospective tenant ("Prospective
Tenant") as to the essential terms of a proposal for leasing the First Refusal
Space, which Landlord intends shall serve as the basis for negotiating a lease
with the Prospective Tenant (such preliminary agreement to be referred to herein
as a "Proposal"), Landlord shall first provide Tenant with a notice ("Landlord's
Notice") which informs Tenant of the Proposal and sets forth the Base Rent,
options to expand or terminate, and the amount of any tenant improvement
allowance offered to the Prospective Tenant. Within five (5) business days
following the date of Landlord's Notice, Tenant shall have the right to lease
the First Refusal Space upon the terms set forth in Landlord's Notice (except as
otherwise provided in subparagraph (C) below), and subject to the provisions set
forth below in this paragraph 46, by providing Landlord with written notice of
its intent to exercise such right. Should Tenant indicate that it is not
prepared to lease the First Refusal Space, whether by written notice to Landlord
or by failing to respond to Landlord's Notice within the said five (5)-business
day period, then Tenant shall be deemed to have waived its Right of First
Refusal and Landlord shall be free to lease such space to the Prospective Tenant
upon substantially the same terms as set forth in the Proposal.
(C) In the event that Tenant exercises its Right of First
Refusal, Landlord and Tenant shall enter into an amendment to this Lease adding
the First Refusal Space to the Leased
29- PLAZA TOWER ONE LEASE
<PAGE> 41
Premises, subject to all of the terms and conditions set forth in Landlord's
Notice, except that (i) the term for the First Refusal Space shall expire
coterminously with the expiration of the Lease Term (as may be extended by
Tenant's exercise of its renewal option set forth in paragraph 43 above) for the
Leased Premises as set forth herein, and (ii) the tenant improvement allowance
set forth in Landlord's Notice, if any, shall be prorated based upon the time
remaining in the Lease Term.
(D) Except as specifically provided otherwise in Landlord's
Notice, the First Refusal Space shall be leased by Tenant in "as-is" condition,
and all other improvements in the First Refusal Space shall be Tenant's
responsibility at Tenant's cost, and shall be made in accordance with paragraph
10 of this Lease.
(E) The rights of Tenant under this paragraph 46 are personal
to Tenant and shall not be severed from this Lease or separately sold, assigned,
or otherwise transferred.
(F) The rights of Tenant hereunder are subject to the rights
of other tenants with respect to the First Refusal Space pursuant to leases in
existence as of the date of this Lease, and any renewals thereof.
[Signatures on following page.]
30- PLAZA TOWER ONE LEASE
<PAGE> 42
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first hereinabove written.
WITNESS: LANDLORD:
PROPERTY COLORADO OBJLW ONE
CORPORATION, an Oregon corporation
- ---------------------------------
By: Clarion Partners, LLC,
a New York limited liability
company
Its Authorized Agent
By: Clarion Partners, Inc.
a New York corporation
Its Managing Member
By: /s/ BRUCE G. MORRISON
-------------------------
Bruce G. Morrison
Its Senior Vice President
WITNESS: TENANT:
/s/ JACQUELINE LUCKETT USA GLOBAL LINK, INC.
- ---------------------------------- a Delaware corporation
By: /s/ [ILLEGIBLE]
----------------------------------
Name: [ILLEGIBLE]
-----------------------------
Title: Secretary
----------------------------
31- PLAZA TOWER ONE LEASE
<PAGE> 43
EXHIBIT "A"
IMPROVED AREA
Description: Lot 4, Block 3, GREENWOOD PLAZA SOUTH, Filing No. 1, County of
Arapahoe, State of Colorado (see attachment hereto)
1-EXHIBIT "A"
<PAGE> 44
EXHIBIT A
[PLAZA TOWER ONE SITE PLAN]
<PAGE> 45
EXHIBIT "B-1"
LEASED PREMISES
(See plan attached hereto or incorporated herein by reference)
1-EXHIBIT "B-1"
<PAGE> 46
EXHIBIT 'B-1'
[FLOOR PLAN OF
ANNEX SPACE]
Leased Premises shown cross hatched = 8,448 R.S.F.
PLAZA TOWER ONE
6400 SOUTH FIDDLERS GREEN CIRCLE
ENGLEWOOD, COLORADO 80111
<PAGE> 47
EXHIBIT "B-2"
PHASE I SPACE AND PHASE II SPACE
[See attached.]
<PAGE> 48
EXHIBIT 'B-2'
[FLOOR PLAN OF
ANNEX SPACE]
PLAZA TOWER ONE
6400 SOUTH FIDDLERS GREEN CIRCLE
ENGLEWOOD, COLORADO 80111
<PAGE> 49
EXHIBIT "B-3"
EXPANSION SPACE
[See attached.]
<PAGE> 50
EXHIBIT 'B-3'
[FLOOR PLAN OF
ANNEX SPACE]
Expansion Space shown cross hatched = 2,383 R.S.F.
PLAZA TOWER ONE
6400 SOUTH FIDDLERS GREEN CIRCLE
ENGLEWOOD, COLORADO 80111
<PAGE> 51
EXHIBIT "C"
WORK AGREEMENT
The undersigned as Landlord and Tenant, are executing simultaneously
with this Work Agreement a Lease covering the Leased Premises therein described
(the "Lease"). This Work Agreement is attached to the Lease as Exhibit "C".
Landlord and Tenant agree as follows:
1. DEFINED TERMS
The following terms have the respective definitions indicated for
purposes of this Work Agreement:
(a) "PHASE I COMMENCEMENT DATE" means the later of (i) one day
after Substantial Completion of the Phase I Improvements,
excluding Tenant Delay, or (ii) July 4, 1998.
(b) "PHASE II COMMENCEMENT DAte" means the later of (i) one day
after Substantial Completion of the Phase II Improvements,
excluding Tenant Delay, or (ii) July 29, 1998.
(c) "CONSTRUCTION DRAWINGS" means the plans and specifications for
the construction of the Leasehold Improvements to the Leased
Premises dated March 27, 1998, which have been prepared by
Tenant's architect and delivered to Tenant for approval.
(d) "CONSTRUCTION DRAWINGS SIGN-OFF DATE" means May 6, 1998.
(e) "DEMOLITION" means the removal of all existing improvements
from the bottom of the floor slab above to the top of the
existing floor slab below the Leased Premises as per the
demolition plan.
(f) "GENERAL CONTRACTOR" means the person or firm from time to
time selected or approved by Landlord as herein provided to
construct and install the Leasehold Improvements in the Leased
Premises.
(g) "IMPROVEMENT ALLOWANCE" means the maximum amount Landlord
shall contribute toward the cost of providing Tenant's
Leasehold Improvements.
1- EXHIBIT "C"
<PAGE> 52
(h) "LANDLORD DELAY" means the sum of number of days (i) by which
Landlord was late in providing Landlord's responses
contemplated in this Exhibit "C", (ii) of delay caused by
changes requested by Landlord to any aspect of the Leasehold
Improvements after the Construction Drawings Sign-Off Date
(including any delay in preparing any of the documents or
drawings described herein), (iii) of delay caused by Landlord,
its agents, or contractors' interference (if any) in the
construction or delay in processing General Contractor's
submittals as provided herein, and (iv) of delay caused by the
inclusion of any work or materials not shown on the
Construction Drawings which causes Substantial Completion of
the Phase I Improvements to be delayed beyond July 3, 1998, or
which causes Substantial Completion of the Phase II
Improvements to be delayed beyond July 28, 1998.
(i) "LANDLORD'S REPRESENTATIVE" shall mean Tom Pritekel.
(j) "LEASEHOLD IMPROVEMENTS" means the complete construction of
the Leased Premises in accordance with the Construction
Drawings, which shall include the Phase I Improvements and the
Phase II Improvements.
(k) "PLAN DELIVERY DATE" means the date that Landlord delivers to
Tenant the proposed Construction Drawings;
(1) "PRELIMINARY PRICING PLAN" means the document prepared by
Tenant's architect dated February 9, 1998, which has been
given to Tenant that indicates general information necessary
for Tenant's architect to complete the Construction Documents.
(m) "PRODUCT DATA" means illustrations, standard schedules,
performance charts, instructions, brochures, diagrams and
other information which may be furnished by the General
Contractor to illustrate a material, product or system for
some portion of the construction of the Leasehold
Improvements.
(n) "SAMPLES" means physical examples which illustrate materials,
equipment or workmanship and establish standards by which the
construction of the Leasehold Improvements may be judged.
(o) "SHOP DRAWINGS" means drawings, diagrams, schedules and other
data specifically prepared for the construction of the
Leasehold Improvements by the General Contractor or his
subcontractor, manufacturer, supplier or distributor to
illustrate some portion of the construction of the Leasehold
Improvements.
(p) "PHASE I SUBSTANTIAL COMPLETION" means the date the Phase I
Improvements are certified by Landlord's architect as
sufficiently complete in accordance
2- EXHIBIT "C"
<PAGE> 53
herewith except as noted in the punch list, all construction
debris except for the debris associated with ongoing final
completion has been removed and the Phase I Space is
clean, such that the Tenant can reasonably occupy or utilize
the Phase I Space for the Permitted Purpose.
(q) "PHASE II SUBSTANTIAL COMPLETION" means the date the Phase II
Improvements are certified by Landlord's architect as
sufficiently complete in accordance herewith except as noted
in the punch list, all construction debris except for the
debris associated with ongoing final completion has been
removed and the Phase II Space is clean, such that Tenant can
reasonably occupy or utilize the Phase II Space for the
Permitted Purpose.
(r) "TENANT DELAY" means the sum of number of days (i) by which
Tenant was late in providing Tenant's responses contemplated
in this Exhibit "C", (ii) of delay caused by changes requested
by Tenant to any aspect of the Leasehold Improvements after
the Construction Drawings Sign-Off Date (including any delay
in preparing any of the documents or drawings described herein
and any delay or halting of construction), (iii) of delay
caused by Tenant, its agents, or contractors' interference (if
any) in the construction or delay in processing General
Contractor's submittals as provided herein, and (iv) of delay
caused by the inclusion of any work or materials not shown on
the Construction Drawings which causes Phase I Substantial
Completion to be delayed beyond July 3, 1998, or causes Phase
II Substantial Completion to be delayed beyond July 28, 1998.
(s) "TENANT'S REPRESENTATIVE" shall mean Gary W. Hamm.
2. IMPROVEMENTS BY LANDLORD
(a) Schedule 1 attached hereto and made a part hereof contains a
list of improvements that establish the minimum acceptable
quality level for Plaza Tower One Leasehold Improvements.
Tenant may substitute improvements of an equivalent or higher
quality level subject to Landlord's approval, which approval
shall not be unreasonably withheld.
(b) Tenant has engaged an architect and Landlord has engaged an
engineer to design the Leasehold Improvements and to prepare
Construction Drawings. Once approved by Landlord and Tenant as
required under Section 3(b) hereof, the Construction Drawings
will be incorporated in the Lease by reference as Exhibit
"C-1" (Final Construction Drawings). The design of the
Leasehold Improvements and the Construction Drawings shall be
prepared to conform to the Preliminary Pricing Plan which
shall be incorporated herein as soon as prepared and agreed to
by Landlord and Tenant, as evidenced by their signature
thereon.
3- EXHIBIT "C"
<PAGE> 54
(c) Tenant shall assume the existing improvements in the Leased
Premises in their "AS IS" condition, subject to the provisions
of the Lease and this Agreement.
3. SCHEDULE OF CRITICAL DATES
(a) Landlord acknowledges that Tenant has submitted a satisfactory
Preliminary Pricing Plan to Landlord prior to the execution
of this Agreement. Tenant acknowledges that Landlord has
submitted the Construction Drawings to Tenant prior to the
execution of this Agreement.
(b) On or about the Construction Drawings Sign-Off Date, Tenant
responded to Landlord with minor comments to the Construction
Drawings. Upon execution of the Lease, Landlord shall submit
revised Construction Drawings to Tenant which incorporate
Tenant's comments and Tenant shall sign-off on such drawings
within five (5) days after it receives the same from Landlord.
(c) Upon receipt of Tenant's written request and/or authorization
to make any change to the Construction Drawings or to the
Leasehold Improvements after the Construction Drawings Sign-
Off Date, which change affects contract price and/or delays
completion of the Phase I Improvements beyond July 3, 1998, or
delays completion of the Phase II Improvements beyond July 28,
1998, Landlord shall within four (4) business days either (A)
provide Tenant with Landlord's reasonable good faith estimate
of the increase or decrease in the number of days and revised
cost (if any) required to complete the Leasehold Improvements
occasioned by such change, or (B) inform Tenant of the number
of days it will take to make such a determination, in which
case if Tenant still desires to request such change(s),
Landlord shall use due diligence to provide Tenant with the
information in (A). The actual delay beyond July 3, 1998, or
July 28, 1998 as applicable, which any such change causes,
whether more or less than estimated, shall constitute Tenant
Delay. Any effect of such a change on cost which would cause
an increase in contract price will have no effect on the
amount of Improvement Allowance hereunder. Tenant agrees that
Landlord will not stop any construction in progress while
Landlord is evaluating or calculating the time required to
implement a change unless requested by Tenant or unless in
Landlord's or in General Contractor's reasonable judgment
construction should be stopped. Any such change order shall be
subject to Landlord's approval. After Landlord has approved
the change and provided the information described above,
Tenant shall then advise Landlord in writing of the acceptance
or rejection of the change order. The number of days from the
date Tenant requests a construction stop to the day
construction is resumed shall be Tenant Delay.
(d) In the event a change to the Construction Drawings after the
Construction Drawings Sign-Off Date is determined to be
required as a result of any unforeseen
4- EXHIBIT "C"
<PAGE> 55
condition within the existing Leased Premises, such a change
shall be treated as a Landlord change. Landlord will provide
written notice to Tenant as to the effect of such change on
design, cost and delay in completing the Leasehold
Improvements. Any delay occasioned by such a change shall be a
Landlord Delay and will offset accumulated days of Tenant
Delay (if any). Any effect of such a change on cost which
would cause an increase in contract price will have no effect
on the amount of Improvement Allowance hereunder.
(e) Landlord's Representative shall be the sole point of contact
with the General Contractor for both Landlord and Tenant
during construction of the Leasehold Improvements and until
the items on the punch list are completed or settled.
Landlord's Representative shall at all times have access to
the Leased Premises during construction of the Leasehold
Improvements. On the basis of his on-site observations,
Landlord's Representative will keep the Tenant and Landlord
informed of the progress of the construction of the Leasehold
Improvements. Landlord's Representative will not have control
or charge of and will not be responsible for construction
means, methods, techniques, sequences or procedures, or for
safety precautions and programs in connection with the
construction of the Leasehold Improvements, and he will not be
responsible for the General Contractor's failure to carry out
the construction in accordance with the Construction Drawings.
Landlord's Representative and Tenant will review, approve,
approve as noted or disapprove within two (2) business days of
the receipt of same, the General Contractor's submittal such
as Shop Drawings, Product Data and Samples, but only for
conformance with the design concept of the Leasehold
Improvements and with the information given in the
Construction Drawings.
(f) Any responses required within a certain time period under this
Exhibit "C" shall be in writing and shall be due by 4:00 p.m.
on the date specified therefor. Any such response received by
either party after 4:00 p.m. on any day shall be deemed to be
received on the next day.
(g) Prior to Phase I Substantial Completion, Tenant shall not have
access to the Phase I Space, unless previously authorized by
Landlord. Likewise, prior to Phase II Substantial Completion,
Tenant shall not have access to the Phase II Space, unless
previously authorized by Landlord.
4. TENANT ALLOWANCES
(a) Landlord shall bear no more than Eighteen and no/100 Dollars
($18.00) per square foot of rentable square footage within the
Leased Premises as an Improvement Allowance toward the cost of
planning, design and construction of Leasehold Improvements.
Tenant shall bear all amounts in excess of said Improvement
5- EXHIBIT "C"
<PAGE> 56
Allowance and shall reimburse Landlord for such excess upon
Substantial Completion as defined herein. Landlord shall, if
requested, provide Tenant with copies of paid invoices or
other evidence demonstrating that costs in excess of the
Improvement Allowance specified above have been paid by
Landlord.
(b) For purposes of this Work Agreement, the cost of design and
construction of the Leasehold Improvements shall include,
without limitation, the cost of preliminary space planning;
final space planning; Construction Documents; mechanical
engineering design and documentation; electrical design and
documentation; Landlord coordinated field observation and
follow-up; demolition; special consultants costs (structural,
acoustical, vibration, etc.), direct costs of construction;
and all required permits and fees.
5. SUBSTANTIAL COMPLETION, CONSTRUCTION WARRANTY AND RENTAL COMMENCEMENT
DATE
(a) Tenant's obligation to pay Rent under the Lease for the Phase
I Space shall not commence until the Phase I Commencement Date
as defined above. To the extent the Phase I Commencement Date
may be delayed beyond July 4, 1998, as a result of Tenant
Delay, Tenant's obligation to pay Rent under the Lease for the
Phase II Space shall not be deferred and the number of days
constituting Tenant Delay minus the number of days
constituting Landlord Delay shall be added to the calculation
of the one hundred and twenty (120) days following July 28,
1998, as provided for in paragraph 16 of the Lease. Tenant's
obligation to pay Rent under the Lease for the Phase II Space
shall not commence until the Phase II Commencement Date as
defined above. To the extent the Phase II Commencement Date
may be delayed beyond July 29, 1998, as a result of Tenant
Delay, Tenant's obligation to pay Rent under the Lease for the
Phase II Space shall not be deferred and the number of days
constituting Tenant Delay minus the number of days
constituting Landlord Delay shall be added to the calculation
of the one hundred and twenty (120) days following July 28,
1998, as provided for in paragraph 16 of the Lease.
(b) Landlord agrees to deliver the certificate of Substantial
Completion within one hundred and twenty (120) days following
July 28, 1998, pursuant to paragraph 16 of the Lease unless
otherwise delayed by reason of strikes, lockouts or other
labor disputes (whether or not with employees of Landlord's
contractor or any subcontractor and regardless of whether the
dispute could be settled by acceding to the demands of any
labor group), acts of God, inability to obtain sufficient
labor or materials or reasonable substitutes therefor,
governmental control or compliance with applicable
governmental laws, rules or regulations, enemy or hostile
governmental action, civil commotion, fire, floods, stormy or
inclement weather or other conditions or causes beyond the
reasonable control of Landlord ("hereinafter referred to as
Events of Force Majeure").
6- EXHIBIT "C"
<PAGE> 57
(c) When the Landlord considers the Leasehold Improvements to be
approaching Substantial Completion as defined in Sections
5(a) and l(p) hereof, the Landlord shall notify the Tenant,
and on the basis of an inspection, Landlord's architect shall
determine if the Leasehold Improvements are substantially
complete as defined in Sections 5(a) and 1(p) hereof.
Landlord's architect will then prepare a Certificate of
Substantial Completion, which shall establish the date of
Substantial Completion, and shall have the punch list items
agreed to by Tenant and Landlord listed therein. The
inspection, compilation of the punch list and issuance of the
certificate of Substantial Completion shall be conducted
within two (2) business days after Landlord's notification.
Warranties required by this Work Agreement shall commence on
the date of Substantial Completion of the Leasehold
Improvements. The certificate of Substantial Completion shall
be submitted to the Tenant, the Landlord and the General
Contractor for their written acceptance of the
responsibilities assigned to them in such certificate. Tenant
shall have three (3) business days from receipt of said
certificate to approve and return same to Landlord. Tenant
shall not take possession of the Leased Premises until Tenant
has accepted the certificate of Substantial Completion.
Landlord shall use all reasonable efforts to complete the
items on the punch list within thirty (30) days of receipt
from Tenant.
(d) Notwithstanding the above, possession of the Leased Premises
by Tenant shall constitute a waiver of all claims by the
Tenant except those arising from (1) latent defects, (2)
failure of the Leasehold Improvements to comply with the
Construction Drawings, which failure could not reasonably have
been discovered upon the date the certificate of Substantial
Completion was issued, and (3) Landlord's failure to complete
in due course the incomplete items, if any, described in the
certificate of Substantial Completion (including the punch
list items). Landlord shall be responsible for (1) and (2)
only for a period of one year from and after the certificate
of Substantial Completion is issued. Landlord shall exercise
due diligence in completing any item in (3) of this Section
5(e) and shall use its good faith efforts to minimize any
disturbance to Tenant's operations in the Leased Premises.
Additionally, Landlord shall provide Tenant with any equipment
warranties obtained in connection with the purchase of
equipment which is incorporated into Tenant's Leasehold
Improvements. THE FOREGOING CONSTITUTES LANDLORD'S ONLY
WARRANTY. ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO
THOSE OF MERCHANTABILITY, HABITABILITY, SUITABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY NEGATED AND
WAIVED.
(e) Any entry upon the Leased Premises by Tenant or its employees,
agents, guests, invitees, or contractors during the
performance of or in connection with this Work Agreement shall
be subject to Tenant's release, waiver and indemnification of
7- EXHIBIT "C"
<PAGE> 58
Landlord set forth in paragraph 6A. and 6B. of the Lease, and
the aforesaid paragraph 6A. and 6B. is incorporated herein by
reference.
Landlord and Tenant have executed this Work Agreement contemporaneously
with execution of the Lease.
LANDLORD: PROPERTY COLORADO OBJLW ONE CORPORATION,
AN OREGON CORPORATION
By: Clarion Partners, LLC,
a New York limited liability company
Its Authorized Agent
By: Clarion Partners, Inc.,
a New York corporation
Its Managing Member
By:
------------------------------------------
Bruce G. Morrison
Its Senior Vice President
[ILLEGIBLE INITIALS]
TENANT: USA GLOBAL LINK, INC.
a Delaware corporation
By: [ILLEGIBLE]
-----------------------------------------
Name: [ILLEGIBLE]
-----------------------------------
Title: Secretary
----------------------------------
8- EXHIBIT "C"
<PAGE> 59
EXHIBIT "C-1"
FINAL CONSTRUCTION DRAWINGS
(See plan to be attached hereto and incorporated herein by reference)
1 - EXHIBIT "C-1"
<PAGE> 60
EXHIBIT "D"
JANITORIAL SERVICES
OFFICES: o Empty all waste receptacles.
o Empty and damp-wipe ashtrays.
o Dust all horizontal surfaces.
Dust high and low areas
(pictures, clocks, partition
tops, etc.).
o Vacuum all obvious dirt and
dust. Remove all visible soil.
Vacuum corners, edges, and
chairs and spot-vacuum all
carpet areas.
o Collect and remove all trash
from building.
LOBBY: o Dust mop all hard surface
floors.
o Mop all stains and spills,
especially coffee and drip
spills.
o Spot-clean all walls, light
switches, and doors.
o Empty and damp-wipe ashtrays.
o Buff all tile areas.
CORRIDORS: o Spot-clean all walls, light
switches, and doors.
o Clean and polish all drinking
fountains.
o Empty and damp-wipe ashtrays.
o Vacuum all carpets.
o Spot-clean carpeted areas.
RESTROOMS: o Clean and sanitize all restroom
units including toilets,
urinals, and sinks; damp-wipe
mirrors, polish chrome, wipe
counters and dispensers, and
empty trash.
GLASS: o Clean both sides of all
interior glass.
ELEVATOR
CARPET: o Clean and vacuum carpeted
elevators.
STAIRS, CARPET: o Police stairs for litter.
o Vacuum and clean stairs.
1 - EXHIBIT "D"
<PAGE> 61
EXHIBIT "E"
LEASE COMMENCEMENT DATE STATEMENT
Date: , 19
----------------------------- -----
Clarion Realty Services, LLC
6400 S. Fiddler's Green Circle, Suite 180A
Englewood, Colorado 80111
Attn: General Manager
This letter is being delivered to Clarion Partners, LLC in accordance
with paragraph 16 of that certain lease (the "Lease") dated ________________,
1998, between Property Colorado OBJLW One Corporation, by its agent, Clarion
Partners, LLC and the undersigned.
We hereby acknowledge that the Lease Commencement Date (as defined in
the Lease) is, the date of expiration of the Lease Term (as defined in the
Lease) is ____________, 19 ___ and Tenant's Total Square Footage is
_________________ rentable square feet.
Very truly yours.
Tenant
1- EXHIBIT "E"
<PAGE> 62
EXHIBIT "F"
RULES AND REGULATIONS
1. The sidewalks, entrances, halls, corridors, elevators and stairways of
the Building shall not be obstructed or used as a waiting or lounging
place by Tenant, or its agents, servants, employees, invitees,
licensees, and visitors.
2. Landlord reserves the right to refuse admittance to the Building at any
time other than between the hours of 6:00 a.m. and 6:00 p.m. weekdays,
or 7:00 a.m. to 1:00 p.m. on Saturdays, to any person not producing
either a key to the Leased Premises or a pass issued by Landlord. In
case of invasion, riot, public excitement or other commotion, Landlord
also reserves the right to prevent access to the Building during the
continuance of same. Landlord shall in no case be liable for damages
for the admission or exclusion of any person to or from the Building.
3. Landlord will furnish each Tenant with two keys to each door lock in
the Leased Premises, and Landlord may make a reasonable charge for any
additional keys requested by Tenant. No Tenant shall have any keys made
for the Leased Premises; nor shall any Tenant alter any lock, or
install new or additional locks or bolts, on any door without the prior
written approval of Landlord. If a lock alteration or installation is
made, the new lock must accept the master key for the Building. Each
Tenant, upon the expiration or termination of its tenancy, shall
deliver to Landlord all keys in such Tenant's possession for all locks
and bolts in the Building.
4. In order that the Building may be kept in a state of cleanliness, each
Tenant shall, during the term of its Lease, permit Landlord's employees
(or Landlord's agent's employees) to take care of and clean the Leased
Premises, and Tenant shall not employ any person(s) other than
Landlord's employees (or Landlord's agent's employees) for such
purpose. No tenant shall cause any unnecessary labor by reason of such
Tenant's carelessness or indifference in the preservation of good order
and cleanliness of the Leased Premises. Tenant will ensure that before
leaving the Leased Premises each day:
(a) the doors are securely locked; and
(b) all water faucets and other utilities are shut off (so
as to prevent waste or damage).
If Tenant must dispose of crates, boxes, etc., which will not fit into
office waste paper baskets, it will be the responsibility of Tenant to
dispose of same by removing them from the building or by placing them
in designated waste collection receptacles at the delivery dock. In no
event shall Tenant place such items for disposal in the public hallways
or other common areas of the Building or Improved Area.
1- EXHIBIT "F"
<PAGE> 63
5. Landlord reserves the right to prescribe the date, time, method and
conditions that any personal property, equipment, trade fixtures,
merchandise and other similar items shall be delivered to or removed
from the Building. NO steel safe or other heavy or bulky object shall
be delivered to or removed from the Building except by experienced safe
men, movers, or riggers approved in writing by Landlord. All damage
done to the Building by the delivery or removal of such items, or by
reason of their presence in the Building, shall be paid by Tenant to
Landlord, immediately upon demand therefor. For the delivery or receipt
of merchandise, only hand-trucks equipped with rubber tires shall be
used by Tenant, jobbers or others.
6. The walls, partitions, skylights, windows, doors, and transoms that
reflect or admit light into passageways or into any other part of the
Building shall not be covered or obstructed nor have signs or
advertisements posted on them by any Tenant.
7. The toilet rooms, toilets, urinals, wash bowls and water apparatus
shall not be used for any purpose other than for those for which they
were constructed or installed, and no sweepings, rubbish, chemicals, or
other unsuitable substances shall be thrown or placed therein. The
expense of any breakage, stoppage or damage resulting from violations
of this rule by Tenant or by Tenant's agents, servants, employees,
invitees, licensees, or visitors, shall be borne by Tenant.
8. No sign, name, placard, advertisement, or notice visible from the
exterior of any Leased Premises shall be inscribed, painted or affixed
by any Tenant on any window or other part of the Building or Improved
Area without the prior written approval of Landlord. A directory
containing the names of all tenants of the Building shall be provided
by landlord at an appropriate place on the first floor of the Building.
9. No electronic signaling, telegraphic, or telephonic instruments or
devices, or other wires, instruments or devices, shall be installed in
connection with any Leased Premises without the prior written approval
of Landlord, which approval shall not be unreasonably withheld. Such
installations, and the boring or cutting of wires, shall be made at the
sole cost and expense of Tenant and under the control and direction of
Landlord. Landlord retains, in all cases, the right to require:
(a) the installation and use of such electrical
protecting devices that prevent the transmission of
excessive currents of electricity into or through the
Building;
(b) the changing of wires and of their installation and
arrangement underground or otherwise as Landlord may
direct; and
(c) compliance on the part of all using or seeking access
to such wires with such rules as Landlord may
establish relating thereto. All such wires used
2- EXHIBIT "F"
<PAGE> 64
by Tenant must be clearly tagged at the distribution
boards and junction boxes and elsewhere in the
Building, with (x) the number of the Leased Premises
to which said wires lead, (y) the purpose for which
said wires are used, and (z) the name of the company
operating same.
10. Tenant, its agents, servants, and employees shall not:
(a) go upon the roof of the Building;
(b) use any additional method not approved in writing by
the Landlord of heating or air conditioning the
Leased Premises;
(c) sweep or throw any dirt or other substance from the
Leased Premises into any of the halls, corridors,
elevators, or stairways of the Building, or onto any
part of the Improved Area;
(d) bring in or keep in or about the Leased Premises any
vehicles or animals of any kind, except seeing-eye
dogs for the legally blind;
(d) install any radio or television antenna or any other
device or item on the roof, exterior walls, windows,
or window sills of the Building or anywhere in the
Improved Area;
(f) place objects against glass partitions, doors, or
windows which would be unsightly from the interior or
exterior of the Building;
(g) place pictures, plants, or any other items on window
sills which would interfere with closing of window
blinds by the janitors at night;
(h) use any portion of the Leased Premises: (i) for
lodging or sleeping, (ii) for cooking (except that
the use by any Tenant of Underwriter's
Laboratory-approved equipment for brewing coffee, tea
and similar beverages or the use by Tenant of a
similarly-approved microwave oven shall be permitted,
provided that such use is in compliance with law), or
(iii) for any purpose other than the Permitted
Purpose provided for in the Lease; or
(i) permit the operation of any musical or other
sound-producing instruments or devices which may be
heard outside the Tenant's Leased Premises, or which
may emit signals which will impair radio or
television broadcast or reception from or into the
Building.
11. Tenant shall not store, carry into, or use within Plaza Tower One or in
any Leased Premises or permit others to do so:
3- EXHIBIT "F"
<PAGE> 65
(a) any ether, naphtha, phosphorous, benzol, gasoline, benzine,
petroleum, crude or refined earth or coal oils, kerosene or
camphene;
(b) any other flammable, combustible, explosive or illuminating
fluid, gas or material of any kind; or
(c) any other fluid, gas or material of any kind having an
offensive odor; or
(d) any firearm (loaded or unloaded) or any other weapon or
ammunition for a weapon.
12. No canvassing, soliciting, distribution of handbills or other written
material, or peddling shall be permitted in the Building or the
Improved Area, and Tenant shall cooperate with Landlord in prevention
and elimination of same.
13. Tenant shall give Landlord prompt notice of all accidents to, or
defects in, air conditioning equipment, plumbing, electrical
facilities, or any part or appurtenances of the Leased Premises.
14. The Improved Area outside the Building may be used for the enjoyment of
Tenant, its agents, servants, and employees without restriction so long
as such parties conduct themselves in a manner so as not to disturb
others or disturb, destroy, or litter the Improved Area. All parties
using the Improved Area shall comply with all applicable governmental
laws, ordinances, rules and regulations and all rules and regulations
of Arapahoe County.
15. Tenant personnel and their guests shall observe `No Smoking' signs
where posted in Plaza Tower One and refrain from smoking in the Leased
Premises, elevator lobbies, elevators, public corridors, building
stairwells and restrooms. Smoking is permitted only on the terrace area
outside the east end of Level Two.
4- EXHIBIT "F"
<PAGE> 66
EXHIBIT "G"
ATTORNMENT AND NONDISTURBANCE AGREEMENT
THIS AGREEMENT, made as of ______________ between________________
hereinafter referred to as "Interest Holder" and USA Global Link, Inc.,
hereinafter referred to as "Tenant".
W I T N E S S E T H:
THAT, WHEREAS, PROPERTY COLORADO OBJLW ONE CORPORATION, an Oregon
corporation, hereinafter referred to as "Landlord", has by Lease executed on
___________ leased to Tenant for a term of years, commencing on _____________,
and ending on ________________________ or upon such postponed date as shall be
designated by written endorsement to the Lease, certain portions of the
building located in the County of Arapahoe, State of Colorado, such portions
being hereinafter called the "Leased Premises", and the building more
particularly described as follows:
WHEREAS, Interest Holder is the holder of a lien or other interest in
the form of a _______________________ and recorded at ______________________ and
any amendments, supplements or extensions thereto, hereinafter referred to as
the "Encumbrance"; and
WHEREAS, the encumbered premises under the foregoing Encumbrance are
the same premises as, or include the Leased Premises set forth in, the legal
description above;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree as follows:
1. Tenant agrees that in the event of any foreclosure or the
exercising of any other rights under the Encumbrance, whereby
Interest Holder shall cause Landlord to be ousted from
possession or assert any right of ownership inconsistent with
Tenant's right under the Lease, at any time and from time to
time after commencement of the term of the Lease and prior to
the expiration, cancellation or other termination thereof, for
any reason, Tenant shall be bound to Interest Holder, the
purchaser at a foreclosure sale, any receiver appointed under
the Encumbrance, assignment of rents, or court order, or any
assignee or successor in interest (all of which are
hereinafter referred to as "Transferee") under all of the
terms, covenants, and conditions of the Lease during the
remaining term thereof, including any extensions or renewals
which may be effected in accordance with any option in the
Lease, with the same force and effect as if Transferee were
Landlord under the Lease, and Tenant does hereby attorn to
Transferee as its Landlord.
1- EXHIBIT "G"
<PAGE> 67
2. The parties hereto do hereby covenant and agree that the Lease
and any modifications and amendments thereto subsequently
approved by Interest Holder, and all rights, options, liens or
other charges created thereby, are, and shall continue to be,
subject and subordinate in all respects to the Encumbrance and
the lien created thereby, to any advance made thereunder, to
any consolidations, extensions, modifications, or renewals
thereof, and to any other mortgage on the Leased Premises held
by Interest Holder.
3. So long as no default exists and no event has occurred which
would entitle Landlord to terminate the Lease, Interest Holder
agrees that in the event of any foreclosure or the exercising
of any other rights under said Encumbrance whereby any such
Transferee shall oust Landlord of possession or assert any
right of ownership which would, in the absence of this
Agreement, be inconsistent with Tenant's rights under the
Lease and prior to the expiration or termination thereof, the
Lease shall, in accordance with its terms, remain in full
force and effect as a direct Lease between Transferee and
Tenant and the possession of Tenant under the Lease shall not
be disturbed by any such event. The Transferee shall be
entitled to all of the rights and benefits and subject to all
of the obligations of the immediately prior landlord under the
Lease. If successive rights should be asserted by any or
several Transferees separately or in any combination, Tenant
shall have the same rights to continue the Lease in effect in
each such instance.
4. In order to effect the provisions of the preceding paragraphs,
Interest Holder does hereby grant and demise to Tenant the
Leased Premises for a term of years to commence upon the
exercise of any right described in the preceding paragraphs.
Such term of years shall be upon the terms and conditions of
the Lease as though the Lease were between Transferee and
Tenant.
5. The provisions of the preceding paragraphs are to be effective
and self operating without the execution of any further
instruments upon Transferee's succeeding to the interest of
Landlord under the Lease.
6. This Agreement shall inure to the benefit of and be binding
upon Tenant, Interest Holder, Transferee, their successors and
assigns.
7. The effective date of this Agreement is_____________ , and the
covenants and conditions hereof shall apply from and after
said date.
8. This Agreement shall remain in full force and effect and shall
pertain to said Lease now or as hereafter amended or extended.
2- EXHIBIT "G"
<PAGE> 68
9. Neither Interest Holder nor Transferee shall in any way or to
any extent (i) be obligated or liable to Tenant for any prior
act, omission or default on the part of Landlord under the
Lease, or (ii) be obligated or liable to Tenant for any
security deposit or other sums deposited with Landlord not
physically delivered to Interest Holder or Transferee, or
(iii) be bound by any previous prepayment of rent for a period
greater than one month, unless such modification, amendment
or prepayment shall have been expressly authorized in writing
by Interest Holder, and Tenant shall have no right to set off
assets or counterclaim against Interest Holder or the
Transferee for any of the acts or omissions of Landlord
referred to in (i), (ii), or (iii) above.
10. In the event of any act or omission by Landlord under the
Lease which would give Tenant the right to terminate the Lease
or claim a partial or total eviction, Tenant shall not
exercise any such right until (i) it has given notice thereof
to Interest Holder, and (ii) Interest Holder, following the
giving of such notice, shall have failed to commence or pursue
action to remedy such act or omission in the manner set forth
in the Lease.
11. All notices hereunder shall be given in the manner prescribed
in the Lease.
TENANT: USA GLOBAL LINK, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
INTEREST HOLDER:
----------------------------------------
By:
-------------------------------------
Name:
------------------------------
Title:
-----------------------------
3 - EXHIBIT "G"
<PAGE> 69
EXHIBIT "H"
ESTOPPEL CERTIFICATE
The undersigned, a duly authorized ___________________________ of
__________________________, hereby certifies unto _____________________________
as follows:
(1) _____________________________________________ is the Tenant
("Tenant") and ______________________________ is the Landlord ("Landlord") under
that certain Lease Agreement ("Lease") dated __________________________,
relative to ____________________ (___________________) square feet of space in
the Plaza Tower One building located at 6400 S. Fiddler's Green Circle,
Englewood, Arapahoe County, Colorado, and the following improvements:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2) Attached hereto as Exhibit "A" is a complete and accurate copy of
the Lease and, except as set forth in such exhibit, there are no other
amendments thereto or agreements relating to the subject matter thereof.
(3) The Lease is in full force and effect and Landlord is not in
default thereunder, except as may be indicated on any attached addendum. Tenant
has received no notice from Landlord that Tenant is in default under the Lease
and Tenant has no present knowledge of any facts which would give rise to or
constitute a breach or default by either party thereunder.
(4) There is no claim of offset or other claim presently existing in
favor of Tenant against Landlord arising out of or relating to the Lease, except
as may be indicated on the attached addendum.
(5) The Lease is for a term of ___________________, having commenced on
____________________, with the present term expiring on______________________,
subject to renewal options as therein provided.
(6) Rent under the Lease has been paid through ______________________,
subject to adjustment as therein provided.
(7) Tenant or Landlord has performed all tenant finish work with regard
to the Leased Premises thereby leased and Tenant has accepted possession and is
in occupancy of such Leased Premises.
1- EXHIBIT "H"
<PAGE> 70
(8) Tenant has no option or right of first refusal to purchase the
Leased Premises.
The undersigned understands that this Certificate may be relied upon by
the addressee who may be a purchaser of the Leased Premises. -
Dated at __________________________________, ________________, _______
TENANT: USA GLOBAL LINK, INC.
By:
-----------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
2- EXHIBIT "H"
<PAGE> 71
EXHIBIT "I"
GREENWOOD PLAZA SOUTH
[See attached.]
<PAGE> 72
EXHIBIT I
[MAP]
GREENWOOD PLAZA SOUTH FILING NO. 1
A RESUBDIVISION OF A PORTION OF
"A SUBDIVISION OF SECTION 21, T-5-5, R-67-W
ARAPAHOE COUNTY, COLORADO
Sheet 2 of 2
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PLAZA TOWER ONE ANNEX
TEMPORARY OCCUPANCY LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement"), executed as of this 6th day of
February, 1998, by and between PROPERTY COLORADO OBJLW ONE CORPORATION, by its
agent CLARION PARTNERS LLC, hereinafter referred to as "Licensor," and USA
GLOBAL LINK, INC., a Delaware corporation, hereinafter referred to as
"Licensee."
RECITALS
Licensor is the owner of certain real property located in the County of
Arapahoe, state of Colorado, commonly known as Greenwood Plaza South
(hereinafter referred to as the "Office Center"). Licensee desires to
temporarily use approximately 8,448 rentable square feet of space in the Annex
Building of the Office Center for the purpose of general office use.
AGREEMENT
In consideration of the foregoing recitals, which are incorporated
herein, and the following mutual covenants, the parties agree as follows.
A. LICENSED SPACE. Licensor hereby licenses to Licensee certain office
space of approximately 8,448 rentable square feet located in the Annex Building,
hereinafter referred to as "Licensed Space," in the Office Center as shown in
Exhibit "A" attached hereto. Licensed Space is accepted in "as is" condition.
Any changes or improvements to the space by Licensee must be approved in advance
in writing by the Licensor. All changes and improvements shall be paid for by
Licensee.
B. LICENSE FEE. As consideration for use of the Licensed Space,
Licensee shall pay Licensor in advance the sum of Two Thousand Eight Hundred and
Five and 40/100 Dollars ($2,805.40) (hereinafter "License Fee") for each month
Licensee occupies the Licensed Space. The License Fee for any partial month
shall be prorated based on the number of days the Licensee occupies the Licensed
Space during said month. Licensee shall mail all License Fee payments to
Licensor at the following address:
c/o Property Colorado OBJLW One Corporation
P.O. Box 5037, Unit #78
Portland, Oregon 97208
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C. TERM. The term of this Agreement begins on February 9th, 1998, and
shall continue until terminated by either party upon providing five (5) days'
written notice, unless sooner terminated as provided herein.
D. USE OF LICENSED SPACE. Licensee shall operate under the trade name
of "USA GLOBAL LINK." The Licensed Space shall be used for office purposes only
and for no other use without written approval by Licensor. Licensee agrees it
will not use or suffer or permit any person or persons to use the Licensed Space
or any part thereof for any purpose in violation of the laws of the United
States of America, the State of Colorado, County of Arapahoe, or other lawful
authorities, and that during said term the Licensed Space and every part thereof
shall be kept by Licensee in a clean and wholesome condition, free of any
objectionable noise, odors and nuisances, and that all health and police
regulations shall be, in all respects and at all times, fully complied with by
the Licensee. In addition, Licensee agrees to abide by all rules and regulations
established by Licensor from time to time, with respect to the Office Center
and/or the Licensed Space.
Only approved fixtures and signage may be used in the set up,
display and day to day operation of the Licensed Space. Licensee shall be
permitted to install, at it sole cost, wall mounted standard building signage
adjacent to the door of the Licensed Space. Licensor shall include Licensee in
the Office Center's directory at Licensee's sole cost. No advertising placards,
banners, pennants, names, insignia, trademarks or other non-conforming signs
will be permitted to be affixed to or maintained on the glass panes, supports of
the show windows and doors or upon the exterior walls of the storefront. No
handwritten signs, flashing signs or audible signs are permitted. All signage
(interior and exterior) are subject to approval of the Licensor.
Should Licensee violate any term, provision or condition of
this Agreement, Licensor may terminate this Agreement upon providing written
notice of such violation, provided, however, that Licensee shall have five (5)
days after notice is given to cure any such violation.
E. INDEMNITY/INSURANCE. Licensee shall indemnify, defend and hold
Licensor, its asset manager, its property manager, its agents, servants,
employees, and successors or assigns thereof, harmless against any and all
claims, demands, liabilities, judgments, awards, fines, mechanics liens or other
liens, loss, damages, expenses, charges or costs of any kind or character
(including reasonable attorney fees and court costs) arising from the
construction, repair, use, occupancy or enjoyment of the Licensed Space by
Licensee, its respective contractors, agents employees or invitees (hereinafter
"Claims"); provided, however, Licensee shall have no obligation to defend
Licensor against Claims arising from Licensor's gross negligence or indemnify
Licensor from Claims to the extent caused by the negligence of Licensor. In case
of any action or proceeding brought against Licensor, its agents, servants or
employers, successors and assigns, by reason of any such Claim, upon notice of
Licensor, Licensee covenants to defend such action or proceeding by counsel
reasonably satisfactory to Licensor.
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Licensee shall procure and maintain throughout the term of
this Agreement and at its sole expense, the following insurance:
(1) Commercial general liability insurance (Bodily Injury and
Property Damage) on an occurrence form with a limit of liability not less than
One Million and no/100 Dollars ($1,000,000) per occurrence including
premises-operations and products/completed operations hazards and with the
following supplementary coverages: (a) contractual liability to cover liability
assumed under this Lease; (b) personal injury liability with the "employee" and
"contractual" exclusions deleted; and (c) broad form property damage liability;
and (ii) umbrella excess liability insurance, in addition to and in excess of
the foregoing insurance policies, in an amount not less than Three Million and
no/100 Dollars ($3,000,000) per occurrence; and
(2) Worker's compensation insurance as required by law.
Each liability insurance policy described above shall name
Licensor, Licensor's agent and advisor, Licensor's property manager, and
expressly including any trustees, directors, officers, employees, or agents of
any such entities, all as additional insureds.
F. SECURITY DEPOSIT. Upon execution of this Agreement, Licensee shall
pay Licensor the sum of Four Thousand Five Hundred Dollars ($4,500.00). Such sum
shall be held by Licensor without interest as security for the performance by
Licensee of Licensee's covenants and obligations under this Agreement, it being
expressly understood that such deposit is not an advance payment of rental or a
measure of Licensor's damages in case of default by Licensee. Said deposit shall
be held by Licensor without payment of interest, as security for the faithful
performance by Licensee of all of the terms, covenants, and conditions of this
Agreement by said Licensee to be kept and performed during the term hereof. In
the event of the failure of Licensee to keep and perform any of the terms,
covenants, and conditions of this Agreement to be kept and performed by
Licensee, then the Licensor at its option may appropriate and apply the security
deposit, or so much thereof as may be necessary, to compensate the Licensor for
loss or damage sustained or suffered by Licensor due to such breach on the part
of Licensee. Should Licensee comply with all of the terms, covenants, and
conditions of this Agreement, the security deposit shall be returned in full to
Licensee within forty-five (45) days of Licensee vacating the Licensed Space;
provided, however, that Licensor shall be entitled to deduct from the security
deposit an amount sufficient to cover the cost of any required clean up of the
Licensed Space (beyond ordinary wear and tear), any unpaid costs of design and
construction of improvements to the Licensed Space undertaken by Licensor
pursuant to the terms of the letter agreement between the parties dated January
29, 1998 and any License Fee owed but not paid by Licensee.
G. TAXES, FEES, AND UTILITIES. Any and all taxes, fees, and
assessments, including but not limited to license fees, fees for permits,
profits, sales or use taxes,
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personal property taxes, or any other taxes which may be levied or assessed on
the assets, business, or capital of Licensee or Licensee's income therefrom, by
duly constituted government authority, shall be borne and paid for by Licensee.
H. ASSIGNMENT. It is expressly agreed that Licensee shall have no
right to assign, franchise or sublet its rights nor delegate its duties under
this Agreement. Any violation of this provision shall automatically terminate
this Agreement.
I. NOTICES. Notices or demands required to be given or served by either
party to this Agreement to the other party, shall be deemed to have been duly
given or served only if in writing and when received by either personal
delivery, overnight courier or facsimile transmission and addressed as follows:
TO LICENSOR: Property Colorado OBJLW One corporation
c/o Clarion Partners LLC
335 Madison Avenue, 7th Floor
New York, New York 10017
Attn: Account Manager
WITH A COPY TO: Property Colorado OBJLW One corporation
c/o Clarion Realty Services, LLC
6400 S. Fiddler's Green Circle, Suite 180A
Englewood, Colorado 80111
Attn: General Manager
TO LICENSEE: USA Global Link
50 North Third Street
Fairfield, IA 52556
Attn: Legal Department
WITH A COPY TO: Gary Hamm
USA Global Link
6400 S. Fiddler's Green Circle, Suite 160A
Englewood, Colorado 80111
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
Attn: Daniel J. Hartnett
J. ENTIRE UNDERSTANDING OF THE PARTIES. The making, execution and
delivery of this Agreement by Licensee has been induced by no representation
other than those herein expressed. This Agreement embodies the entire
understanding of the parties and there are no further or other agreements,
written or oral, in effect between the parties relating to the subject matter
hereof. This instrument may be
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amended or modified only by an instrument of equal formality signed by the
respective parties.
K. GOVERNING LAW. ENTIRETY OF AGREEMENT AND PARTIAL INVALIDITY. This
Agreement shall be governed by the laws of the state of Colorado. If any
provision in this Agreement is held by any court to be invalid, void or
unenforceable, the remaining provisions shall nevertheless continue in full
force and effect.
L. WAIVER. Waiver by Licensor of any breach of any term, covenant, or
condition herein contained shall not be deemed a waiver of any subsequent breach
of the same or any other term, covenant, or condition herein contained.
M. ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements at
trial or on appeal or discretionary review, in each case as adjusted by the
trial or appellate court, in addition to any other relief to which such party
may be entitled.
N. NO PARTNERSHIP INTEREST OR ESTATE. It is understood and agreed that
nothing herein contained shall be considered as in any way constituting a
partnership between Licensor and Licensee, and that Licensee does not and shall
not claim, at any time, any interest or estate of any kind.
O. PERMITS. Licensee shall obtain any and all permits, licenses, and
authorizations which may be required by any and all governmental authorities
with respect to the use and occupancy of the Licensed Space. All installations
and equipment used by Licensee shall be maintained and installed in strict
conformity with the requirements of the board of Fire Underwriters, as well as
local, state and federal laws, rules, and regulations.
P. CORPORATION. In the event Licensee shall be a corporation, the party
executing this Agreement on behalf of Licensee hereby covenants and warrants
that Licensee is a duly qualified corporation and all steps have been taken
prior to the date hereof to qualify Licensee to do business in the state of
Colorado; corporate taxes have been paid to date; and all future forms, reports,
fees, and other documents or payments necessary to comply with applicable laws
will be filed or paid when due and that he is authorized to enter into this
Agreement on behalf of Licensee.
Q. CONDITION OF LICENSED SPACE. Licensee accepts the Licensed Space in
an "as is" condition as of the date hereof. Licensor shall construct such
improvements to the Licensed Space as directed by Licensee provided the design
and construction of such improvements shall be at Licensee's sole cost and
expense. Upon vacating the Licensed Space, Licensee shall redeliver the Licensed
Space to Licensor in the same condition and state of repair as existed when
received. Licensee shall be responsible for removing all telephone wiring back
to the telephone closet and shall remove the
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plywood telephone backboard in the Licensed Space and repair and paint the wall
where the backboard was located to match the adjacent walls. All attached
improvements and original fixturing shall remain upon vacating the space.
Portable improvements supplied by Licensee may be removed. Any improvement must
be approved by the Licensor before installation.
R. PARKING. No parking rights are granted to Licensee in connection
with this License Agreement.
S. RULES AND REGULATIONS. Licensee and its employees are subject to all
rules and regulations of the Licensed Space and the Office Center.
T. TIME OF ESSENCE. Time is of the essence with this Agreement and with
every term, covenant and condition herein.
U. LICENSE EXECUTION. This Agreement may be executed in any number of
counterparts and each such counterpart shall be deemed to be an original
instrument.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
on the day and year first above written.
LICENSOR: PROPERTY COLORADO OBJLW ONE CORPORATION,
an Oregon corporation
By: Clarion Partners LLC
A New York limited liability company
By: Clarion Partners, Inc.
A New York corporation
Its Managing Member
By: /s/ BRUCE G. MORRISON
---------------------------------------
Bruce G. Morrison
Its Senior Vice President
LICENSEE: USA GLOBAL LINK, INC.
a Delaware corporation
By: /s/ DANIEL J. HARTNETT
----------------------------------------------
Daniel J. Hartnett
Its: Secretary
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EXHIBIT "A"
[FLOOR PLAN OF ANNEX SPACE]
[PLAZA TOWER ONE]
7 - LICENSE AGREEMENT
<PAGE> 1
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE (this "Addendum") is made by and between
Foster Enterprises ("Lessor"), and Xcare.net, Inc. ("Lessee"), to be a part of
that certain Lease of even date herewith between Lessor and Lessee (the
"Lease") concerning approximately 6,356 square feet of space, located at 100
Winchester Boulevard, Santa Clara, California (the "Project"), Suite 250 (the
"Premises"). All terms with initial capital letters used herein as defined
terms shall have the meanings ascribed to them in the Lease unless specifically
defined herein. The numbers of the paragraphs of this Addendum correspond to
those of the Lease form. In the event of any inconsistency between this
Addendum and the Lease, the terms of this Addendum shall prevail. Lessor and
Lessee agree that, notwithstanding anything to the contrary in the Lease, the
Lease is hereby modified and supplemented as set forth below.
3. Term. The Lease shall commence on the later of March 1, 2000 or the
date by which all of the following have occurred: (a) Lessor has substantially
completed the Lessee Improvements in accordance with the Lease and this
Addendum; (b) Lessor has delivered possession of the Premises to Lessee; and
(c) Lessor has obtained all approvals and permits from the appropriate
governmental authorities required for the legal occupancy of the Premises for
the permitted use. If the Commencement Date has not occurred for any reason
whatsoever on or before April 1, 2000, then, in addition to Lessee's other
rights or remedies, Lessee may terminate the Lease by written notice to Lessor,
whereupon any monies previously paid by Lessee to Lessor shall be reimbursed to
Lessee, or, at Lessee's election, the date Lessee is otherwise obliged to
commence payment of rent shall be delayed by one day for each day that the
Commencement Date is delayed beyond such date. Lessor shall deliver possession
of the Premises to Lessee in good, vacant, broom clean condition, with all
building systems in good working order and in compliance with all laws.
Lessee's acceptance of the Premises shall not be deemed a waiver of Lessee's
right to have defects in the Premises repaired at no cost to Lessee. Lessee
shall give notice to Lessor whenever any such defect becomes reasonably
apparent, and Lessor shall repair such defect as soon as practicable.
Lessor represents and warrants to Lessee that, as of the Commencement
Date, the Premises is in compliance with municipal, state and federal statutes,
rules, regulations, ordinances, requirements and orders, now in force or which
may hereafter be in force pertaining to conditions existing prior to Lessee's
lease commencement, including without limitation, all applicable statutes,
rules, regulations, ordinances, requirements or orders requiring installation
of fire sprinkler systems, seismic reinforcement and related alterations,
removal of asbestos, and compliance with ADA, fire/safety and Title 24
requirements. Lessor warranties all building systems for the first thirty (30)
days of the term.
6. Operating Expenses. Lessee shall have no obligation to pay the cost
of any Real Property Taxes or Operating Expenses of a type not also included in
the 2000 actual Real Property Taxes or the 2000 actual Operating Expenses. If
the 2000 actual Real Property Taxes or the 2000 actual Operating Expenses are
not based on a 95% leased Project, then such amounts shall be increased to
reflect a 95% leased Project.
a. Operating Expenses. "Operating Expenses" shall not include and
Lessee shall in no event have any obligation to perform or to pay directly, or
to reimburse Lessor for, all or any portion of the following repairs,
maintenance, improvements, replacements, premiums, claims, losses, fees,
charges, costs and expenses (collectively, "Costs"): (a) Costs occasioned by
the act, omission or violation of any law by Lessor, any other occupant of the
Project, or their respective agents, employees or contractors; (b) Costs
occasioned by fire, acts of God, or other casualties or by the exercise of the
power of eminent domain; (c) Costs to correct any construction defect in the
Premises or the Project or to comply with any covenant, condition, restriction,
underwriter's requirement or law applicable to the Premises of the Project on
the Lease Commencement Date; (d) Costs of any renovation, improvement, painting
or redecorating of any portion of the Project not made available for Lessee's
use; (e) Costs incurred in connection with negotiations or disputes with any
other occupant of the Project and Costs arising from the violation by Lessor
or any other occupant of
<PAGE> 2
the Project of the terms and conditions of any lease or other agreement; (f)
insurance Costs for coverage not customarily paid by Lessees of similar
projects in the vicinity of the Premises, increases in insurance Costs caused
by the activities of another occupant of the Project, insurance deductibles,
and co-insurance payments; (g) Costs incurred in connection with the presence
of any Hazardous Material, except to the extent caused by the release or
emission of the Hazardous Material in question by Lessee; (h) expense reserves;
(i) Costs of structural repairs to the Building; and (j) Costs which could
properly be capitalized under generally accepted accounting principles, except
to the extent amortized over the useful life of the capital item in question.
b. Real Property Taxes. "Real Property Taxes" shall not include and
Lessee shall not be required to pay any portion of any tax or assessment
expense or any increase therein (a) levied on Lessor's rental income, unless
such tax or assessment is imposed in lieu of real property taxes; (b) in excess
of the amount which would be payable if such tax or assessment expense were
paid in installments over the longest permitted term; (c) imposed on land and
improvements other than the Project; or (d) resulting from a change of
ownership or transfer of any or all of the Project or the improvement of any of
the Project for the sole use of other occupants.
c. Audit Rights. Lessee may audit the books, records and supporting
documents of Lessor to the extent necessary to determine the accuracy of
Lessor's statement of Operating Expenses under Section 6 of the Lease and any
subsequent statement of Operating Expenses. Such audit, if any, will occur
within one hundred eighty (180) days after Lessee receives such statement.
Lessee shall bear the cost of such audit, unless such audit discloses that
Lessor has overstated the total cost by more than three percent (3%) of the
actual amount of such costs, and in which event Lessor shall pay the cost of
Lessee's audit. Lessor shall promptly refund any overcharges to Lessee.
8.(a) Compliance. Lessee shall not be required to comply with or cause
the Premises to comply with any laws, rules or regulations requiring the
construction of alterations unless such compliance is necessitated solely due
to Lessee's particular use of the Premises.
8.(c) Hazardous Materials. To the best knowledge of Lessor, (a) no
Hazardous Material is present on the Project or the soil, surface water or
groundwater thereof, (b) no underground storage tanks are present on the
Project, and (c) no action, proceeding or claim is pending or threatened
regarding the Project concerning any Hazardous Material or pursuant to any
environmental law. Under no circumstance shall Lessee be liable for, and Lessor
shall indemnify, defend, protect and hold harmless Lessee, its agents,
contractors, stockholders, directors, successors, representatives, and assigns
from and against, all losses, costs, claims, liabilities and damages (including
attorneys' and consultants' fees) of every type and nature, directly or
indirectly arising out of or in connection with any Hazardous Material present
at any time on or about the Project, or the soil, air, improvements,
groundwater or surface water thereof, or the violation of any laws, orders or
regulations, relating to any such Hazardous Material, except to the extent
that any of the foregoing actually results from the release or emission of
Hazardous Material by Lessee or its agents or employees in violation of
applicable environmental laws. "Hazardous Material" shall mean any material
which is now or hereafter regulated by any governmental authority which poses
a hazard to the environment or human health. This section and Section 8.(c) of
the Lease constitute the entire agreement of Lessor and Lessee regarding
Hazardous Materials. No other provision of the Lease shall be deemed to apply
thereto.
11. Surrender. Lessee's obligations with respect to the surrender of the
Premises shall be fulfilled if Lessee surrenders possession of the Premises in
the condition existing at the Lease Commencement Date, ordinary wear and tear,
acts of God, casualties, condemnation, Hazardous Materials (other than those
released or emitted by Lessee), and alterations or other interior improvements
which it is permitted to surrender at the termination of the Lease, excepted.
13. Alterations. Lessee may construct non-structural alterations,
additions and improvements ("Alterations") in the Premises without Lessor's
prior approval, if the cost of any such project does not
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<PAGE> 3
exceed Twenty-Five Thousand Dollars ($25,000). Alterations and Lessee's trade
fixtures, furniture, equipment and other personal property installed in the
Premises ("Lessee's Property") shall at all times be and remain Lessee's
property. Except for Alterations which cannot be removed without structural
injury to the Premises, at any time Lessee may remove Lessee's Property from
the Premises, provided that Lessee repairs all damage caused by such removal.
Lessor shall have no lien or other interest in any item of Lessee's Property.
Lessor shall have no right to require Lessee to remove any alterations unless
it notifies Lessee at the time it consents to such alteration that it shall
require such alteration to be removed.
14. Repairs. Lessor shall perform and construct, and Lessee shall have no
responsibility to perform or construct, any repair, maintenance or improvements
(a) necessitated by the acts or omissions of Lessor or any other occupant of the
Building, or their respective agents, employees or contractors, (b) for which
Lessor has a right of reimbursement from others, (c) to the structural portions
of the Premises, (d) which could be treated as a "capital expenditure" under
generally accepted accounting principles, (e) to the heating, ventilation, air
conditioning, electrical, water, sewer, and plumbing systems serving the
Premises and the Building, and (f) to any portion of the Building outside of the
demising walls of the Premises. Notwithstanding the foregoing, Lessee shall pay
for its share of the repairs described in subsections (d)-(f) to the extent
such costs are properly included in Operating Expenses.
17. Utilities and Services. If the Premises should become not reasonably
suitable for Lessee's use as a consequence of cessation of utilities or other
services, interference with access to the Premises, legal restrictions or the
presence of any Hazardous Material which does not result from Lessee's release
or emission of such Hazardous Material, and in any of the foregoing cases the
interference with Lessee's use of the Premises persists for seven (7) days, then
Lessee shall be entitled to an equitable abatement of rent to the extent of the
interference with Lessee's use of the Premises occasioned thereby. If the
interference persists for more than ninety (90) days, Lessee shall have the
right to terminate the Lease.
18. Indemnity. Lessor shall not be released or indemnified from, and shall
indemnify, defend, protect and hold harmless Lessee from, all losses, damages,
liabilities, claims, attorneys' fees, costs and expenses arising from the
negligence or willful misconduct of Lessor or its agents, contractors, licensees
or invitees, Lessor's violation of any law, order or regulation, or a breach of
Lessor's obligations or representations under the Lease.
18.(d) Waiver of Subrogation. The parties hereto release each other and
their respective agents, employees, successors, assignees and subLessees from
all liability for injury to any person or damage to any property that is caused
by or results from a risk which is actually insured against, which is required
to be insured against under the Lease, or which would normally be covered by all
risk property insurance, without regard to the negligence or willful misconduct
of the entity so released. All of Lessor's and Lessee's repair and indemnity
obligations under the Lease shall be subject to the waiver contained in this
paragraph.
19.(f) Lessor's Insurance. Lessor shall maintain insurance through
individual or blanket policies insuring the building providing "all risk"
coverage for the full replacement cost of the Building, with deductibles and the
form and endorsements of such coverage as selected by Landlord, together with
rental abatement insurance against loss of rent in an amount equal to the amount
of rent for a period of twelve (12) months commencing on the date of loss.
Lessor may also carry such other insurance as Lessor may deem prudent or
advisable, including, without limitation, liability insurance in such amounts
and on such terms as Lessor shall determine. Lessee shall pay to Lessor as a
portion of the Operating Expenses its pro-rata share of the "all risk" and
rental abatement insurance coverages described herein.
20. Damage. Lessor shall not have the right to terminate the Lease if the
damage to the Building is (a) due to a risk required to be insured against under
Section 19 of the Lease or (b) relatively minor (e.g., repair or restoration
would cost less than ten percent (10%) of the replacement cost of the Building).
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<PAGE> 4
Whenever rent is to be abated under the Lease, all rent and any additional rent
shall be equitably abated based upon the extent to which Lessee's use of the
Premises is diminished.
24. Assignment and Subletting. Lessee may, without Lessor's prior
written consent, sublet the Premises or assign the Lease to (a) an entity
controlling, controlled by or under common control with Lessee, (b) a successor
entity related to Lessee by merger, consolidation, nonbankruptcy
reorganization, or government action, or (c) a purchaser of substantially all
of Lessee's assets located in the Premises. A sale or transfer of Lessee's
capital stock shall not be deemed an assignment, subletting or any other
transfer of the Lease or the Premises.
25. Subordination. Prior to the Commencement Date, Lessor shall
obtain from any lenders or ground lessors of the Premises a written agreement
in form reasonably satisfactory to Lessee providing for recognition of Lessee's
interests under the Lease in the event of a foreclosure of the lender's
security interest or termination of the ground lease. Further, as a condition
to Lessee's obligation to subordinate its leasehold interest to a ground lease
or instrument of security, Lessor shall obtain from any such ground lessors or
lenders such a recognition agreement.
38. Miscellaneous.
(l) Approvals. Whenever the Lease requires an approval, consent,
determination, selection or judgment by either Lessor or Lessee, unless another
standard is expressly set forth, such approval, consent, determination,
selection or judgment and any conditions imposed thereby shall be reasonable and
shall not be unreasonably withheld or delayed and, in exercising any right or
remedy hereunder, each party shall at all times act reasonably and in good
faith.
(m) Rules and Regulations. Lessee shall not be required to comply
with any new rule or regulation, including any parking area rules and
regulations, unless the same applies non-discriminatorily to all occupants of
the Building, does not unreasonably interfere with Lessee's use of the Premises
or Lessee's parking rights and does not materially increase the obligations or
decrease the rights of Lessee under the Lease.
(n) Reasonable Expenditures. Any expenditure by a party permitted or
required under the Lease, for which such party demands reimbursement from the
other party, shall be limited to the fair market value of the goods and
services involved, shall be reasonably incurred, and shall be substantiated by
documentary evidence available for inspection and review by the other party.
In witness whereof, said parties hereunto subscribe their names.
LESSOR: LESSEE:
FOSTER ENTERPRISES, XCARE.NET, INC.,
a California general partnership a Delaware corporation
By_________________________________ By_________________________________
Name_______________________________ Name_______________________________
Its________________________________ Its________________________________
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<PAGE> 5
STANDARD LEASE
TABLE OF CONTENTS
1. BASIC LEASE TERMS
2. PREMISES AND COMMON AREAS
3. TERM
4. POSSESSION
5. RENT
6. OPERATING EXPENSES
7. SECURITY DEPOSIT
8. USE
9. NOTICES
10. BROKERS
11. SURRENDER; HOLDING OVER
12. TAXES ON LESSEE'S PROPERTY
13. ALTERATIONS
14. REPAIRS
15. LIENS
16. ENTRY BY LESSOR
17. UTILITIES AND SERVICES
18. ASSUMPTION OF RISK AND INDEMNIFICATION
19. INSURANCE
20. DAMAGE OR DESTRUCTION
21. EMINENT DOMAIN
22. DEFAULTS AND REMEDIES
23. LESSOR'S DEFAULT
24. ASSIGNMENT AND SUBLETTING
25. SUBORDINATION
26. ESTOPPEL CERTIFICATE
27. BUILDING PLANNING
28. RULES AND REGULATIONS
29. MODIFICATION AND CURE RIGHTS OF LESSOR'S MORTGAGEES AND LESSORS
30. DEFINITION OF LESSOR
31. WAIVER
32. PARKING
33. FORCE MAJEURE
34. SIGNS
35. LIMITATION ON LIABILITY
36. FINANCIAL STATEMENTS
37. QUIET ENJOYMENT
38. MISCELLANEOUS
39. EXECUTION OF LEASE
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EXHIBITS:
A-1 FLOOR PLAN
B ADJUSTMENTS TO MONTHLY BASE RENT
C DESCRIPTION OF LESSORS WORK
D LESSEE'S INSURANCE REQUIREMENTS
E DEFINITION OF OPERATING EXPENSES
F STANDARDS FOR UTILITIES AND SERVICES
G N/A
H RULES AND REGULATIONS
I PARKING LICENSE
J WORK IMPROVEMENT AGREEMENT
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STANDARD LEASE
This STANDARD LEASE ("Lease") is entered into as of FEBRUARY 23, 2000 by and
between FOSTER ENTERPRISES, a California general partnership ("Lessor"), and
XCARE.NET, ("Lessee").
1. BASIC LEASE TERMS: For purposes of this Lease, the following terms have the
following definitions and meanings:
(a) Lessor's Address (For Notices):
Foster Enterprises
400 So. El Camino Real, Suite 1400
San Mateo, California 94402
or such other place as Lessor may from time to time designate by notice to
Lessee.
(b) Lessee's Address (Premises):
100 North Winchester Blvd., Suite 250
Santa Clara, California 95050 Attention: Chief Financial Officer
(c) Premises: Suite(s) 250 of the building located at 100 North Winchester
Boulevard as shown on Exhibit "A" (the "Premises"), which Premises contains
approximately 6,356 rentable square feet and which Building (the "Building")
contains approximately 63,899 rentable square feet. The Premises are located
within the development commonly known as Winchester Mall ("Development") in the
City of Santa Clara ("City"), County of Santa Clara ("County"), State of
California ("State").
(d) Lessee's Percentage of Operating Expenses: 9.946 %
(e) Term: 3 Lease Years or 36 Months.
(f) Commencement Date: MARCH 1, 2000
(g) Expiration Date: FEBRUARY 28,2003
(h) Initial Monthly Base Rent: $15,890.00 ($2.50 psf), subject to adjustment as
provided in Exhibit "B" and as otherwise provided in this Lease. Rent is due on
the first day of the month and delinquent on the sixth day. Late payments will
be subject to interest and a late charge as provided in Subparagraph 22(1)
below.
(i) Base Year: Calendar year in which lease term commenced.
(j) Base Operating Expenses: Operating expenses as defined in EXHIBIT "E" for
the base year.
(k) Base Real Property Taxes: Real Property Taxes as defined in Exhibit "E" for
the base year.
(1) Security Deposit: $16,843.40
(m) Permitted Use: A BUSINESS OFFICE, and no other use without the express
written consent of Lessor, which consent Lessor may withhold in its sole and
absolute discretion.
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(n) Parking: SIX (6) RESERVED AND THIRTEEN (13) NON-RESERVED parking spaces
subject to the terms and conditions of Paragraph 32 below and the Rules and
Regulations regarding parking contained in EXHIBIT "H" AND "I".
(o) Brokers: COLLIERS INTERNATIONAL/CB RICHARD ELLIS
(p) Guarantor(s):
(q) Interest Rate: The greater of ten percent (10%) per annum or two (2)
percentage points in excess of the prime lending or reference rate of Wells
Fargo Bank N.A. or any successor bank in effect on the twenty-fifth (25th) day
of the calendar month immediately prior to the event giving rise to the Interest
Rate imposition; provided, however, the Interest Rate will no event exceed the
maximum interest rate permitted to be charged by applicable law.
(r) Exhibits: A THROUGH I inclusive, which Exhibits are attached to this Lease
and incorporated herein by this reference.
(s) Addendum Paragraphs: n/a through, inclusive, which Addendum Paragraphs are
attached to this Lease and incorporated herein by this reference.
This Paragraph 1 represents a summary of the basic terms and definitions of this
Lease. In the event of any inconsistency between the terms contained in this
Paragraph 1 and any specific provision of this Lease, the terms of the more
specific provision shall prevail.
2. PREMISES AND COMMON AREAS
(a) Premises: Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor the Premises upon and subject to the terms, covenants and conditions
contained in this Lease to be performed by each party.
(b) Lessee's Use of Common Areas: During the Term of the Lease, Lessee shall
have the nonexclusive right to use in common with all other occupants of the
Project, the following common areas of the Project (collectively, the "Common
Areas"): the parking facilities of the Project which serve the Building, loading
and unloading areas, trash areas, roadways, sidewalks, walkway, parkways,
driveway, landscaped areas, and similar areas and facilities situated within the
Project and appurtenant to the Building which are not reserved for the exclusive
use of any Project occupants.
(c) Lessor's Reservation of Rights: Provided Lessee's use of and access to the
Premises is not interfered with in an unreasonable manner, Lessor reserves for
itself and for all other owner(s) and operator(s) of the Common Areas and the
balance of the Project, the right from time to time to: (I) install, use,
maintain, repair, replace and relocate pipes, ducts, conduits, wires and
appurtenant meters and equipment above the ceiling surfaces, below the floor
surfaces and within the walls of the Building; (ii) make changes to the design
and layout of the Project, including, without limitation, changes to buildings,
driveways, entrances, loading and unloading areas, direction of traffic,
landscaped areas and walkways, parking spaces and parking areas; and (iii) use
or close temporarily the Common Areas, and/or other portion of the Project while
engaged in making improvements, repairs or alterations to the Building, the
Project, or any portion thereof.
3. TERM: The term of this Lease ("Term") will be for the period designated in
Subparagraph 1(e), commencing on the Commencement Date, and ending on the
Expiration Date. Each consecutive twelve (12) month period of the Term of this
Lease, commencing on the Commencement Date, will be referred to herein as a
"Lease Year".
4. POSSESSION:
(a) Delivery of Possession. Lessor will deliver possession of the Premises to
Lessee in its current "as-is" condition with the addition of only those items
of work described on Exhibit "C" which are to be completed by Lessor on or
before the Commencement Date. If, for any reason not caused by Lessee, Lessor
cannot deliver possession of the Premises to Lessee on the Commencement Date,
this Lease will not be void or voidable by Lessor or Lessee, nor will but Lessor
will not be liable to Lessee for any loss or damage resulting from such delay,
but in such event, the Commencement Date and Lessee's obligation to pay rent
will not commence until Lessor delivers possession to Lessee. If the delay in
possession is caused by Lessee, then the Term and Lessee's obligation to pay
rent will commence as of the Commencement Date
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even though Lessee does not yet have possession. Notwithstanding the foregoing,
Lessor will not be obligated to deliver possession of the Premises to Lessee
(but Lessee will be liable for rent if Lessor can otherwise deliver the Premises
to Lessee) until Lessor has received from Lessee all of the Following: (I) a
copy of the Lease fully executed by Lessee and the guaranty of Lessee's
obligations under this Lease, if any, executed by the Guarantor(s); (ii) the
Security Deposit and the first installment of Monthly Base Rent, and (iii)
copies of policies of insurance or certificates thereof as required under
Paragraph 19 of this lease.
(b) Condition of Premises: By taking possession of the Premises, Lessee will be
deemed to have accepted the Premises in its "as-is" condition on the date of
delivery of possession and to have acknowledged that all work to be completed by
Lessor as described on Exhibit "C" has been completed and there are no
additional items needing work or repair by Lessor. Lessee acknowledges that
neither Lessor nor any agent of Lessor has made any representation or warranty
with respect to the Premises, the Building, the Project or any portions thereof
or with respect to the suitability of same for the conduct of Lessee's business
and Lessee further acknowledges that Lessor will have no obligation to construct
or complete any additional buildings or improvements within the Development.
LESSOR MAKES NO REPRESENTATION OR WARRANTY REGARDING THE INSTALLATION OR
OWNERSHIP OR INTRABUILDING NETWORK TELEPHONE OR TELECOMMUNICATION CABLING WITHIN
THE BUILDING.
5. RENT:
(a) Monthly Base Rent: Lessee agrees to pay Lessor the Monthly Base Rent for the
Premises (subject to adjustment as hereinafter provided) in advance on the first
day of each calendar month during the Term without prior notice or demand,
except that Lessee agrees to pay the Monthly Base Rent for the first month of
the Term directly to Lessor concurrently with Lessee's delivery of the executed
Lease to Lessor. All rent must be paid to Lessor, without any deduction or
off-set, in lawful money of the United States of America, at the address
designated by Lessor or to such other person or at such other place as Lessor
may from time to time designate in writing. Monthly Base Rent will be adjusted
during Term of this Lease as provided in Exhibit "B".
(b) Additional Rent: All amounts and charges to be paid by Lessee hereunder,
including, without limitation, payments for Operating Expenses, insurance and
repairs, will be considered additional rent for purposes of this Lease, and the
word "rent" as used in this Lease will include all such additional rent unless
the context specifically or clearly implies -that only Monthly Base Rent in
intended.
(c) Late Payments: Late payments of Monthly Base Rent and/or item of additional
rent will be subject to interest and a late charge as provided in Subparagraph
22(f) below.
6. OPERATING EXPENSES:
(a) Operating Expenses and Real Property Taxes. In addition to Monthly Base
Rent, throughout the Term of this Lease, Lessee agrees to pay Lessor as
additional rent in accordance with the terms of this Paragraph 6, Lessee's
Percentage of the sum of the amount (if any) by which operating expenses as
defined in Exhibit "E" for such period exceed base Operating Expenses, and the
amount (if any) by which Real Property Taxes as defined in Exhibit "E" for such
period exceed Base Real Property Taxes.
(b) Estimate Statement. Prior to the Commencement Date and on or about March 1st
of each subsequent calendar year during the Term of this Lease, Lessor will
endeavor to deliver to Lessee a statement ("Estimate Statement") wherein Lessor
will estimate Lessee's Percentage of Operating Expenses for the then current
calendar year. If the estimate of Lessee's Percentage of Operating Expenses in
the Estimate Statement exceeds Lessee's Base Operating Expense, Lessee agrees to
pay Lessor, as "additional rent", one-twelfth (1/12th) of such excess each month
thereafter, beginning with the next installment of rent due, until such time as
Lessor issues a revised Estimate Statement or the Estimate Statement for the
succeeding calendar year; except that, concurrently with the regular monthly
rent payment next due following the receipt of each such Estimate Statement,
Lessee agrees to pay Lessor an amount equal to one monthly installment of such
excess (less any applicable Operating Expenses already paid) multiplied by the
number of months from January, in the current calendar year, to the month of
such rent payment next due, all months inclusive. If at any time during the Term
of this Lease, but not more often than quarterly, Lessor reasonably determines
that Lessee's Percentage of Operating Expenses for the current calendar year
will be greater than the amount set forth in the then current Estimate
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Statement, Lessor may issue a revised Estimate Statement and Lessee agrees to
pay Lessor, within THIRTY (30) days of receipt of the revised Estimate
Statement, the difference between the amount owed by Lessee under such revised
Estimate Statement and the amount owed by Lessee under the original Estimate
Statement for the portion of the then current calendar year which has expired.
Thereafter Lessee agrees to pay Lessee's Percentage of Operating Expenses based
on such revised Estimate Statement until Lessee receives the next calendar
year's Estimate Statement or a new revised Estimate Statement for the current
calendar year. In the event Lessee's Percentage of Operating Expenses for any
calendar year is less than Lessee's Base Operating Expense, Lessee will not be
entitled to a credit against any rent, additional rent or Lessee's Percentage of
future Operating Expenses payable hereunder.
(c) Actual Statement. By March 1st of each calendar year during the Term of this
Lease, Lessor will also endeavor to deliver to Lessee a statement ("Actual
Statement") which states the actual Operating Expenses for the preceding
calendar year. If the Actual Statement reveals that Lessee's Percentage of the
actual Operating Expenses is more than the total Additional Rent paid by Lessee
for Operating Expenses on account of the preceding calendar year, Lessee agrees
to pay Lessor the difference in a lump sum within THIRTY (30) days of receipt of
the Actual Statement. If the Actual Statement reveals that Lessee's Percentage
of the actual Operating Expenses is less than the Additional Rent paid by Lessee
for Operating Expenses on account of the preceding calendar year, Lessor will
credit any overpayment toward the next monthly installment(s) of Lessee's
Percentage of the Operating Expenses due under this Lease, OR REIMBURSE LESSEE
FOR SUCH AMOUNT, IF THIS LEASE HAS EXPIRED.
(d) Miscellaneous. Any delay or failure by Lessor in delivering any Estimate
Statement or Actual Statement pursuant to this Paragraph 6 will not constitute a
waiver of its right to require an increase in rent nor will it relieve Lessee of
its obligations pursuant to this Paragraph 6, except that Lessee will not be
obligated to make any payments based on such Estimate Statement or Actual
Statement until THIRTY (30) days after receipt of such Estimate Statement of
Actual Statement. Even though the Term has expired and Lessee has vacated the
Premises, when the final determination is made of Lessee's Percentage of the
actual Operating Expenses for the year in which this Lease terminates, Lessee
agrees to promptly pay any increase due over the estimated expenses paid and,
conversely, any overpayment made in the event said expenses decrease shall
promptly be rebated by Lessor to Lessee. Such obligation shall be a continuing
one which will survive the expiration or earlier termination of this Lease.
Prior to the expiration or sooner termination of the Lease Term and Lessor's
acceptance of Lessee's surrender of the Premises, Lessor will have the right to
estimate the actual Operating Expenses for the then current Lease Year and to
collect from Lessee prior to Lessee's surrender of the Premises, Lessee's
Percentage of any excess of such actual Operating Expenses over the estimated
Operating Expenses paid by Lessee in such Lease Year.
7. SECURITY DEPOSIT: Concurrently with Lessee's execution of this Lease, Lessee
will deposit with Lessor the Security Deposit designated in Subparagraph 1(1).
The Security Deposit will be held by Lessor as security for the full and
faithful performance by Lessee of all of the terms, covenants, and conditions of
this Lease to be kept and performed by Lessee during the Term hereof. The
Security Deposit is not, and may not be construed by Lessee to constitute, rent
for the last month or any portion thereof. If Lessee defaults with respect to
any provisions of this Lease including, but not limited to, the provisions
relating to the payment of rent or additional rent, Lessor may (but will not be
required to) use, apply or retain all or any part of the Security Deposit for
the payment of any rent or any other sum in default, or for the payment of any
other amount which Lessor may spend by reason of Lessee's default or to
compensate Lessor for any loss or damage which Lessor may suffer by reason of
Lessee's default. If any portion of the Security Deposit is so used or applied,
Lessee agrees, within ten (10) days after Lessor's written demand therefor, to
deposit cash with Lessor in an amount sufficient to restore the Security Deposit
to its original amount and Lessee's failure to do so shall constitute a default
under this Lease. Lessor is not required to keep Lessee's Security Deposit
separate from its general funds, and Lessee is not entitled to interest on such
Security Deposit.
8. USE:
(a) LESSEE'S USE OF THE PREMISES: The Premises may be used for the use or uses
set forth in Subparagraph 1(m) only, and Lessee will not use or permit the
Premises to be used for any other purpose without the prior written consent of
Lessor, which consent Lessor may withhold in its sole and absolute discretion.
Nothing in this Lease will be deemed to give Lessee any exclusive right to such
use in the Project.
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(b) COMPLIANCE: At Lessee's sole cost and expense, Lessee agrees to procure,
maintain and hold available for Lessor's inspection, all governmental licenses
and permits required for the proper and lawful conduct of Lessee's business from
the Premises, if any. Lessee agrees not to use, alter or occupy the Premises or
allow the Premises to be used, altered and occupied in violation of, and Lessee,
at its sole cost and expense, agrees to use and occupy the Premises, and cause
the Premises to be used and occupied, in compliance with: (i) any and all laws,
statutes, zoning restrictions, ordinances, rules, regulations, orders and
rulings now or hereafter in force and any requirements of any insurer, insurance
authority or duly constituted public authority having jurisdiction over the
Premises, the Building or the Project now or hereafter in force, (ii) the
requirements of the Board of Fire Underwriters and any other similar body, (iii)
any Certificate of Occupancy issued for the Building, and (iv) any recorded
covenants, conditions and restrictions and similar regulatory agreements, if
any, which affect the use, occupation or alteration of the Premises, the
Building and/or the Project. Lessee agrees to comply with the Rules and
Regulations referenced in Paragraph 28 below. Lessee agrees not to do or permit
anything to be done in or about the Premises or the common areas which will in
any manner obstruct or interfere with the rights or other tenants or occupants
of the Project, or injure or unreasonably annoy them, or use or allow the
Premises or the common areas to be used for any unlawful or unreasonably
objectionable purpose. Lessee agrees not to place or store any articles or
materials outside of the Premises or to cause, maintain or permit any nuisance
or waste in, on under or about the Premises or elsewhere within the Project.
Lessee shall not use or allow the Premises to be used for lodging, bathing or
the washing of clothes.
(c) HAZARDOUS MATERIALS: Except for ordinary and general office supplies, such
as copier toner, liquid paper, glue, ink and common household cleaning materials
(some or all of which may constitute "Hazardous Materials" as defined in this
Lease), Lessee agrees not to cause or permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on, in,
under or about the Premises, the Building, the Common Areas or any other portion
of the Project by Lessee, its agents, employees, subtenants, assignees,
licensees, contractors or invitees (collectively, "Lessee's Parties"), without
the prior written consent of Lessor, which consent Lessor may withhold in its
sole and absolute discretion. Concurrently with the execution of this Lease,
Lessee agrees to complete and deliver to Lessor an Environmental Questionnaire
in the form of Exhibit "G" attached hereto. Upon the expiration or earlier
termination of this Lease, Lessee agrees to promptly remove from the Premises,
the Building and the Project, at its sole cost and expense, any and all
Hazardous Materials, including any equipment or systems containing Hazardous
Materials which are installed, brought upon, stored, used, generated or released
upon, in, under or about the Premises, the Building and/or the Project or any
portion thereof by Lessee or any of Lessee's Parties. To the fullest extent
permitted by law, Lessee agrees to promptly indemnify, protect, defend and hold
harmless Lessor and Lessor's partners, officers, directors, employees, agents,
successors and assigns (collectively, "Lessor Indemnified Parties") from and
against any and all claims, damages, judgments, suits, causes of action, losses,
liabilities, penalties, fines, expenses and costs (including, without
limitation, clean-up, removal, remediation and restoration costs, sums paid in
settlement of claims, attorney's fees, consultant fees and expert fees and court
costs) which arise or result from the presence of Hazardous Materials on, in,
under or about the Premises, the Building or any other portion of the Project
and which are caused or permitted by Lessee or any of Lessee's Parties. Lessee
agrees to promptly notify Lessor of any release of Hazardous Materials in the
Premises, the Building or any other portion of the Project which Lessee becomes
aware of during the Term of this Lease, whether caused by Lessee or any other
persons or entities. In the event of any release of Hazardous Materials caused
or permitted by Lessee or any of Lessee's Parties, Lessor shall have the right,
but not the obligation, to cause Lessee to immediately take all steps Lessor
deems necessary or appropriate to remediate such release and prevent any similar
future release to the satisfaction of Lessor and Lessor's mortgagee(s). At all
times during the Term of this Lease, Lessor will have the right, but not the
obligation, to enter upon the Premises to inspect, investigate, sample and/or
monitor the Premises to determine if Lessee is in compliance with the terms of
this Lease regarding Hazardous Materials. As used in this Lease, the term
"Hazardous Materials" shall mean and include and substances or wastes now or
hereafter designated as hazardous or toxic material under any law, statute,
ordinance, rule, regulation, order or ruling of any agency of the State, the
United States Government or any local governmental authority, including, without
limitation, asbestos, petroleum, petroleum hydrocarbons and petroleum based
products, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs")
and freon and other chlorofluorocarbons. The provisions of this Subparagraph
8(c) will survive the expiration or earlier termination of this Lease.
(d) REFUSE AND SEWAGE: Lessee agrees not to keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and agrees to
regularly and frequently remove same from the Premises. Lessee shall keep all
containers or other equipment used for storage of such materials in a clean and
sanitary condition. Lessee shall properly dispose of all sanitary sewage and
shall not use the sewage disposal system for the disposal of anything except
sanitary
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sewage. Lessee shall keep sewage disposal system free of all obstructions and in
good operating condition. If the volume of Lessee's trash becomes excessive in
Lessor's judgment, Lessor shall have the right to charge Lessee for additional
trash disposal services and/or to require that Lessee contract directly for
additional trash disposal services at Lessee's sole cost and expense.
9. NOTICES: Any notice required or permitted to be given hereunder must be in
writing and maybe given by personal delivery (including delivery by overnight
courier or an express mailing service) or by mail, if sent by registered or
certified mail. Notices to Lessee shall be DEEMED RECEIVED THREE (3) BUSINESS
DAYS AFTER MAILING OR ON THE DAY RECEIVED IF DELIVERED BY HAND OR OVERNIGHT
COURIER to lessee at the premises and notices to lessor shall be DEEMED RECEIVED
THREE (3) BUSINESS DAYS AFTER MAILING OR ON THE DAY RECEIVED IF DELIVERED BY
HAND OR OVERNIGHT COURIER to Lessor at the address designated in Subparagraph
1(a). Either party may specify a different address for notice purposes by
written notice to the other, except that the Lessor may in any event use the
Premises as Lessee's address for notice purposes if Lessee does not notify
Lessor of a valid address for notices.
10. BROKERS: The parties acknowledge that the only broker(s) involved in the
consummation of this Lease are stated in Subparagraph 1(o). Lessor and Lessee
each agree to promptly indemnify, protect, defend and hold harmless the other
from and against any and all claims, damages, judgments, suits, causes of
action, losses, liabilities, penalties, fines, expenses and costs (including
attorney's fees and court costs) resulting from any breach by the indemnifying
party of the foregoing representation, including, without limitation, any claims
that may be asserted by any broker, agent or finder undisclosed by the
indemnifying party. The foregoing mutual indemnity shall survive the expiration
or earlier termination of this Lease. Lessee agrees that Lessor will not
recognize or compensate any third party broker with regards to any renewals
and/or expansions unless such renewal or expansion rights are included within
this Lease at the time of execution by the parties and in Lessor's commission
agreement with the broker(s) specified in Subparagraph 1(o).
11. SURRENDER; HOLDING OVER:
(a) SURRENDER: The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, shall not constitute a merger, and shall, at the
option of Lessor, operate as an assignment to Lessor of any or all subleases or
subtenancies. Upon the expiration or earlier termination of this Lease, Lessee
agrees to peaceably surrender the Premises to Lessor broom clean and in a state
of good order, repair and condition, ordinary wear and tear and casualty AND
CONDEMNATION damage excepted, with all of Lessee's personal property, fixtures,
and alterations removed from the Premises to the extent required under Paragraph
13 and all damage caused by such removal repaired as required by Paragraph 13.
The delivery of keys to any employee of Lessor or to Lessor's agent or any
employee thereof alone will not be sufficient to constitute a termination of
this Lease or a surrender of the Premises.
(b) HOLDING OVER: If Lessee holds over after the expiration or earlier
termination of the Term, Lessor may, at its option, treat Lessee as a tenant as
sufferance only, and such continued occupancy by Lessee shall be subject to all
of the terms, covenants and conditions of this Lease, so far as applicable,
including the payment of Operating Expenses, except that the Monthly Base Rent
for any month or partial month during which Lessee holds over shall be equal to
one hundred fifty percent (150%) of Monthly Base Rent in effect under this Lease
immediately prior to such holdover. Acceptance by Lessor of rent after such
expiration or earlier termination will not result in a renewal of this Lease. If
Lessee fails to surrender the Premises upon the expiration of this Lease in
accordance with the terms of this Paragraph 11 despite demand to do so by
Lessor, Lessee agrees to promptly indemnity, protect, defend and hold Lessor
harmless from all claims, damages, judgments, suits, causes of action, losses,
liabilities, penalties, finds, expenses and costs (including attorneys' fees and
costs), including, without limitation, costs and expenses incurred by Lessor in
returning the Premises to the condition in which Lessee was to surrender it and
claims made by any succeeding tenant founded on or resulting from Lessee's
failure to surrender the Premises. The provisions of this Subparagraph 11(b)
will survive the expiration or earlier termination of this Lease.
12. TAXES ON LESSEE'S PROPERTY: Lessee agrees to pay before delinquency, all
taxes and assessments (real and personal) levied against Lessee's business
operations or any personal property, improvements, alterations, trade fixtures
or merchandise placed by Lessee in or about the Premises.
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13. ALTERATIONS: Lessee shall not make any alterations or add any fixtures to
the Premises or any other aspect of the Project, without Lessor's written
consent, which Lessor may withhold in its reasonable but subjective discretion.
All permitted alterations must be performed in compliance with Lessor's standard
rules and regulations regarding alterations, and with all applicable building
codes, rules and regulation laws. All alterations will become the property of
Lessor and will remain upon and be surrendered with the Premises at the end of
the Term of this Lease; provided, however, Lessor may require Lessee to remove
any or all alterations at the expiration or earlier termination of this Lease.
If Lessee fails to remove by the expiration or earlier termination of this Lease
all of its personal property, or any alterations identified by Lessor for
removal, property, or any alterations identified by Lessor for removal, Lessor
may, at its option, treat such failure as a hold-over pursuant to Subparagraph
11(b) above, and/or Lessor may (without liability to Lessee for loss thereof)
treat such personal property and/or alterations as abandoned and, at Lessee's
sole cost and in addition to Lessor's other rights and remedies under this
Lease, at law or in equity: (a) remove and store such items; and/or (b) upon ten
days' prior notice to Lessee, sell, discard or otherwise dispose of all or any
such items at private or public sale for such price as Lessor may obtain or by
other commercially reasonable means. Lessee shall be liable for all costs of
disposition of Lessee's abandoned property and Lessor shall have no liability to
Lessee with respect to any such abandoned property. Lessor agrees to apply the
proceeds of any sale of any such property to any amounts due to Lessor under
this Lease from Lessee (including Lessor's attorneys' fees and other costs
incurred in the removal, storage and/or sale of such items), with any remainder
to be paid to Lessee.
14. REPAIRS:
(a) LESSOR'S OBLIGATIONS: Lessor agrees to repair and maintain the structural
portions of the Building and the plumbing, heating, ventilating, air
conditioning, elevator and electrical systems installed or furnished by Lessor,
unless such maintenance and repairs are (i) attributable to items installed in
Lessee's Premises which are above standard interior improvements (such as, for
example, custom lighting, special HVAC and/or electrical panels or systems,
kitchen or rest room facilities and appliances constructed or installed within
Lessee's Premises) or (ii) caused in part or in whole by the act, neglect or
omission of Lessee, its agents, servants, employees or invitees, in which case
Lessee will pay to Lessor, as additional rent, the reasonable cost of such
maintenance and repairs. Except as provided in this Subparagraph 14(a), Lessor
has no obligation to alter, remodel, improve, repair, decorate or paint the
Premises or any part thereof. LESSOR'S SOLE OBLIGATION WITH RESPECT TO THE
PROVISIONS OF TELEPHONE OR TELECOMMUNICATION SERVICES SHALL BE TO PROVIDE AN
INTERFACE WITH THE TELEPHONE NETWORK AT THE DEMARCATION POINT SUPPLIED BY THE
LOCAL PUBLIC UTILITY AND CABLE PAIRS IN AN AMOUNT CONSISTENT WITH THE
ENGINEERING STANDARDS TO WHICH THE BUILDING WAS DESIGNED. Lessor will not be
liable for any failure to make any repairs or to perform any maintenance unless
such failure shall persist for an unreasonable time after written notice of the
need of such repairs or maintenance is given to Lessor by Lessee. Except as
provided in Paragraph 20, Lessee will not be entitled to any abatement of rent
and Lessor will not have any liability by reason of any injury to or
interference with Lessee's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Premises
or in or to fixtures, appurtenances and equipment therein. Lessee waives the
right to make repairs at Lessor's expense under any laws, statute, ordinance,
rule, regulation, order or ruling (including, without limitation, to the extent
the Premises are located in California, the provisions of California Civil Code
Sections 1941 and 1942 and any successor statutes or laws of a similar nature).
(b) LESSEE'S OBLIGATIONS: Lessee agrees to keep, maintain and preserve the
Premises in good condition and repair consistent with the remainder Building
and, when and if needed, at Lessee's sole cost and expense, to make all repairs
to the Premises and every part thereof. Any such maintenance and repairs will be
performed by Lessor's contractor, or at Lessor's option, by such contractor or
contractors as Lessee may choose from an approved list to be submitted by
Lessor. LESSEE'S MAINTENANCE AND REPAIR OBLIGATION SHALL INCLUDE THE OBLIGATION
TO MAINTAIN AND REPAIR ALL THE WIRE BETWEEN THE DISTRIBUTION TERMINAL ON THE
FLOOR WHERE THE PREMISES ARE LOCATED AND THE TELEPHONE JACK(S) IN THE PREMISES
(SUCH WIRE IS HEREAFTER REFERRED TO AS "NETWORK TERMINATING WIRE") AND ALL
TELEPHONE OR TELECOMMUNICATION WIRING (INCLUDING JACKS) LOCATED WITHIN THE
PREMISES (HEREAFTER REFERRED TO AS "INSIDE WIRE"). Lessee agrees to pay all
costs and expenses incurred in such maintenance and repair within FIFTEEN (15)
days after billing by Lessor or such contractor or contractors. Lessee agrees to
caused any mechanics' liens or other liens arising as a result of work performed
by Lessee of at Lessee's direction to be eliminated as provided in Paragraph 15
below. If Lessee refuses or neglects to repair and maintain the Premises
properly as required hereunder to the reasonable satisfaction of Lessor, Lessor,
at any time following ten (10) days from the date on which Lessor makes a
written demand on Lessee to effect such repair and maintenance, may enter upon
the Premises and make such repairs and/or
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maintenance, and upon completion thereof, Lessee agrees to pay to Lessor as
additional rent, Lessor's costs for making such repairs plus an amount not to
exceed ten percent (10%) of such costs for overhead, within ten (10) days of
receipt from Lessor of a written itemized bill therefor. Any amounts not
reimbursed by Lessee within such ten (10) day period will amounts not reimbursed
by Lessee within such ten (10) day period will bear interest at the Interest
Rate until paid by Lessee.
15. LIENS: Lessee agrees not to permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Development, the Building or
the Premises, nor against Lessee's leasehold interest in the Premises, by reason
of or in connection with any repairs, alterations, improvements or other work
contracted for or undertaken by Lessee or any other act or omission of Lessee or
Lessee's agents, employees, contractors, licensees or invitees. At Lessor's
request, Lessee agrees to provide Lessor with enforceable, and final lien
release (or other evidence reasonably requested by Lessor to demonstrate
protection from liens) from all person furnishing labor and/or materials at the
Premises. Lessor will have the right at all reasonable times to post on the
Premises and r record any notices of nonresponsibility which it deems necessary
for protection from such liens. If any such liens are filed, Lessee will, at its
sole cost and expense, promptly cause such liens to be released of record bonded
so that it in longer affects title to the Development, the Building or the
Premises. If lessee fails to cause any such liens to be so released or bonded
within ten (10) days after filing thereof, such failure will be deemed a
material breach by Lessee under the Lease without the benefit of any additional
notice or cure period described in Paragraph 22 below, and Lessor may, without
waiving its rights and remedies based on such breach, and without releasing
Lessee from any of its obligations, cause such liens to be released by any
means it shall deem proper, including payment in satisfaction of the claims
giving rise to such liens. Lessee agrees to pay to Lessor within ten (10) days
after receipt of invoice from Lessor, any sum paid by Lessor to remove such
liens, together with interest at the Interest Rate from the date of such payment
by Lessor.
16. ENTRY BY LANDLORD: Lessor and its employees and agents will at all
reasonable times have the right to enter the Premises to inspect the same, to
supply janitorial service and any other service to be provided by Lessor to
Lessee hereunder, to show the Premises to prospective purchasers or WITHIN THE
LAST THREE (3) MONTHS OF THE TERM, lessees, to post notices of
nonresponsibility, and/or to repair the Premises as permitted or required by
this Lease. In exercising such entry rights, Lessor will endeavor to minimize,
as reasonably practicable, the interference with Lessee' business, and will
provide Lessee with reasonable advance notice of any such entry (except in
emergency situations). Lessor will at all times have and retain a key with which
to unlock all doors in the Premises, excluding Lessee's vaults and safes. Except
in the case of the gross negligence or willful misconduct of Lessor, any entry
to the Premises obtained by Lessor will not be construed or deemed to be a
forcible or unlawful entry into the Premises, or an eviction of Lessee from the
Premises and Lessor will not be liable to Lessee for any damages or losses
resulting from any such entry.
17. UTILITIES AND SERVICES: Throughout the Term of the Lease so long as the
Premises are occupied, Lessor agrees to furnish or cause to be furnished to the
premises the utilities and services described in the Standards for Utilities and
Services attached hereto as Exhibit "F" Lessor will not be liable to Lessee for
any failure to furnish any of the foregoing utilities and services if such
failure is caused by all or any of the following: (i) accident, breakage or
repairs; (ii) strikes, lockouts or other labor disturbance or labor dispute of
any character; (iii) governmental regulation, moratorium or other governmental
action or inaction; (iv) inability despite the exercise of reasonable diligence
to obtain electricity, water or fuel; or (v) any other caused beyond Lessor's
reasonable control. In addition, in the event of any stoppage or interruption of
services or utilities, Lessee shall not be entitled to any abatement or
reduction of rent (except as expressly provided in Subparagraphs 20(f) or 21(b)
if such failure results from a damage or taking described therein), no eviction
of Lessee will result from such failure and Lessee will not be relieved from the
performance of any covenant or agreement in this Lease because of such failure.
In the event of any failure, stoppage or interruption thereof, Lessor agrees to
diligently attempt to resume service promptly. If Lessee requires or utilizes
more water or electrical power than is considered reasonable or normal by
Lessor, Lessor may at its option require Lessee to pay, as additional rent, the
cost, as fairly determined by Lessor, incurred by such extraordinary usage
and/or Lessor may install separate meter(s) for the Premises, at Lessee's sole
expense, and Lessee agrees thereafter to pay all shares of the utility providing
service.
18. ASSUMPTION OF RISK AND INDEMNIFICATION:
(a) ASSUMPTION OF RISK: Lessee, as a material part of the consideration to
Lessor, agrees that neither Lessor nor any Lessor Indemnified Parties (as
defined in Subparagraph 8(c) above) will be liable to Lessee for, and Lessee
expressly assumes the risk of and waives any and all claims it may have against
Lessor or any Lessor Indemnified Parties with
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respect to, (i) any and all damage to property or injury to persons in, upon or
about the premises, the Building or the Development resulting from any act or
omission (except for the grossly negligent or intentionally willful act or
omission of Lessor or its agent or employees), (ii) any such damage caused by
other tenants or persons in or about the Building or the Development, or caused
by quasi-public work, (iii) any damage to property entrusted to employees of the
Building, (iv) any loss of or damage to property by theft or otherwise, or (v)
any injury or damage to person or property resulting from any casualty,
explosion, falling plaster or other masonry or glass, steam, gas, electricity,
water or rain which may leak from any part of the Building or any other portion
of the Development or from the roof, street or subsurface or from any other
place, or resulting from dampness. Neither Lessor nor any Lessor Indemnified
Parties will be liable for consequential damages arising out of any loss of the
use of the Premises or any equipment or facilities therein by Lessee or any
Lessee Parties or for interference with light. Lessee agrees to give prompt
notice to Lessor in case of fire or accidents in the Premises or the Building,
or of defects therein or in the fixtures or equipment.
(b) INDEMNIFICATION: Lessee will be liable for, and agrees to the maximum extent
permissible under applicable law, to promptly indemnify, protect, defend and
hold harmless Lessor and all Lessor Indemnified Parties from and against, any
and all claims, damages, judgments, suits, causes of action, losses,
liabilities, penalties, fines, expenses and costs, including attorney's fees and
court costs (collectively, "Indemnified Claims"), arising or resulting from (i)
any act or omission of Lessee or any Lessee Parties (as defined in Subparagraph
8(c) above); (ii) the use of the Premises and Common Areas and conduct of
Lessee's business by Lessee or any Lessee Parties, or any other activity, work
or thing done, permitted or suffered by Lessee or any Lessee Parties, in or
about the Premises, the Building or elsewhere within the Development; and/or
(iii) any default by Lessee or any obligations on Lessee's part to be performed
under the terms of this Lease. In case any action or proceeding is brought
against Lessor or any Lessor Indemnified Parties by reason of any such
Indemnified Claims, Lessee, upon notice from Lessor, agrees to promptly defend
the same at Lessee's sole cost and expense by counsel approved in writing by
Lessor, which approval Lessor will not unreasonably withhold.
(c) SURVIVAL; NO RELEASE OF INSURERS: Lessee's indemnification obligations under
Subparagraph 18(b) will survive the expiration or earlier termination of this
Lease. Lessee's covenants, agreements and indemnification obligation in
Subparagraphs 18(a) and 18(b) above, are not intended to and will not relieve
any insurance carrier of its obligations under policies required to be carried
by Lessee pursuant to the provisions of this Lease.
19. INSURANCE:
(a) LESSEE'S INSURANCE: On or before the earlier to occur of (i) the
Commencement Date, or (ii) the date Lessee commences any work of any type in the
Premises pursuant to this Lease (which may be prior to the Commencement Date),
and continuing throughout the entire Term hereof and any other period of
occupancy, Lessee agrees to keep in full force and effect, at it sole cost and
expense, the insurance specified on Exhibit "D" attached hereto. Lessor
reserves the right to require any other form or forms of insurance as Lessee or
Lessor or any mortgagees of Lessor may reasonably require from time to time in
form, in amounts, and for insurance risks against which, a prudent lessee would
protect itself, but only to the extent coverage for such risks and amounts are
available in the insurance market at commercially acceptable rates. Lessor makes
no representation that the limits of liability required to be carried by Lessee
under the terms of this Lease are adequate to protect Lessee's interests and
Lessee should obtain such additional insurance or increased liability limits as
Lessee deems appropriate.
(b) SUPPLEMENTAL LESSEE INSURANCE REQUIREMENTS: All polices must be in a form
reasonably satisfactory to Lessor and issued by an insurer admitted to do
business in the state in which the Building is located. All policies must be
issued by insurers with a policyholder rating of "A" and a financial rating of
"X" in the most recent version of Best's Key Rating Guide. All policies must
contain a requirement to notify Lessor (and Lessor's property manager and any
mortgagees or ground lessors of Lessor who are named as additional insurers, if
any) in writing not less than thirty (30) days prior to any material change,
reduction in coverage, cancellation or other termination thereof. Lessee agrees
to deliver to Lessor, as soon as practicable after placing the required
insurance, but in any event within the time frame specified in Subparagraph
19(a) above, certificate(s) of insurance and/or if required by Lessor, certified
copies of each policy evidencing the existence of such insurance and Lessee's
compliance with the provisions of this Paragraph 19. Lessee agrees to cause
replacement polices or certificates to be delivered to Lessor not less than
thirty (30) days prior to the expiration of any such policy or policies. If any
such initial or replacement polices or certificates are not furnished within the
time(s) specified herein, Lessor will have the right, but not the obligation, to
obtain such insurance as Lessor deems necessary to protect Lessor's interests at
Lessee's expense. If Lessor obtains any insurance that is the
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responsibility of Lessee under this Paragraph 19, Lessor agrees to deliver to
Lessee a written statement setting forth the cost of any such insurance and
showing in reasonable detail the manner in which it has been computed and Lessee
agrees to promptly reimburse Lessor for such costs as additional rent. General
Liability and Automobile Liability policies under Paragraphs 1 and 5 of Exhibit
"D" attached hereto must name Lessor and Lessor's property manager (and at
Lessor's request, Lessor's mortgagees and ground lessors of which Lessee has
been informed in writing) as additional insured and must also contain a
provision that the insurance afforded by such policy is primary insurance and
any insurance carried by Lessor and Lessor's property manager of Lessor's
mortgagees or ground lessors, if any, will be excess over and non-contributing
with Lessee's insurance. LESSEE SHALL DELIVER TO LESSOR, ALONG WITH THE
CERTIFICATE OF INSURANCE MENTIONED ABOVE, AN ENDORSEMENT LISTING LESSOR AS
ADDITIONAL INSURED.
(c) LESSEE'S USE: Lessee will not keep, use, sell or offer for sale in or upon
the Premises any article which may be prohibited by any insurance policy
periodically in force covering the Building or the Development Common Areas. If
Lessee's occupancy or business in, or on, the premises, whether or not Lessor
has consented to the same, results in any increase in premiums for the insurance
periodically carried by Lessor with respect to the Building or the Development
or results in the need for Lessor to maintain special or additional insurance,
Lessee agrees to pay Lessor the cost of any such increase in premiums or special
or additional coverage as additional rent within ten (10) days after being
billed therefor by Lessor. Lessee agrees to promptly comply with all reasonable
requirements of the insurance authority or any present or future insurer
relating to the Premises.
(d) CANCELLATION OF LESSOR'S POLICIES: If any of Lessor's insurance policies are
canceled or cancellation is threatened or the coverage reduced or threatened to
be reduced in any way because of the use of the Premises or any part thereof by
Lessee or any assignee or subtenant of Lessee or by anyone Lessee permits on the
Premises and, if Lessee fails to remedy the condition giving rise to such
cancellation, threatened cancellation, reduction of coverage, threatened
reduction of coverage, increase in premiums, or threatened increase in premiums,
within forty-eight (48) hours after notice thereof, Lessee will be deemed to be
in material default of this Lease and Lessor may, at its option, either
terminate this Lease or enter upon the Premises and attempt to remedy such
condition, and Lessee shall promptly pay Lessor the reasonable costs of such
remedy as additional rent. If Lessor is unable, or elects not to remedy such
condition, then Lessor will have all of the remedies provided for in this Lease
in the event of a default by Lessee.
(e) WAIVER OF SUBROGATION: Lessee's property and liability insurance shall
contain a clause whereby the insurer waives all rights of recovery by way of
subrogation against Lessor. Lessee shall also obtain and furnish evidence to
Lessor of the waiver by Lessee's worker's compensation insurance carrier of all
rights or recovery by way of subrogation against Lessor.
20. DAMAGE OR DESTRUCTION:
(a) PARTIAL DESTRUCTION: If the Premises or the Building are damaged by fire or
other casualty to an extent not exceeding twenty-five percent (25%) of the full
replacement cost thereof, and Lessor's contractor reasonably estimates in a
writing delivered to Lessor and Lessee that the damage thereto may be repaired,
reconstructed or restored to substantially its condition immediately prior to
such damage within one hundred eighty (180) days from the date of such casualty,
and Lessor will receive insurance proceeds sufficient to cover the costs of such
repairs, reconstruction and restoration (including proceeds from Lessee and/or
Lessee's insurance which Lessee is required to deliver to Lessor pursuant to
Subparagraph 20(e) below to cover Lessee's obligation for the costs of repair,
reconstruction and restoration of any portion of the tenant improvements and any
alterations for which Lessee is responsible under this Lease), then Lessor
agrees to commence and proceed diligently with the work of repair,
reconstruction and restoration and this Lease will continue in full force and
effect.
(b) SUBSTANTIAL DESTRUCTION: Any damage or destruction to the Premises or the
Building which Lessor is not obligated to repair pursuant to Subparagraph 20(a)
above will be deemed a substantial destruction. In the event of a substantial
destruction, Lessor may elect to either: (i) repair, reconstruct and restore the
portion of the Building or the Premises damaged by such casualty, in which case
this Lease will continue in full force and effect, subject to Lessee's
termination right contained in Subparagraph 20(d) below; or (ii) a notice from
Lessor's insurance company that there is funds to
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repair damage (iii) terminate this Lease effective as of the date which is
thirty (30) days after Lessee's receipt of Lessor's election to so terminate.
(c) NOTICE: Under any of the conditions of Subparagraph 20(a) or (b) above,
Lessor agrees to give written notice to Lessee of its intention to repair or
terminate, as permitted in such paragraphs, within the earlier of sixty (60)
days after the occurrence of such casualty, or fifteen (15) days after Lessor's
receipt of the estimate from Lessor's contractor (the applicable time period to
be referred to herein as the "Notice Period").
(d) TERMINATION RIGHTS: If Lessor elects to repair, reconstruct and restore
pursuant to Subparagraph 20(b)(i) hereinabove, and if Lessor's contractor
estimates that as a result of such damage, Lessee cannot be given reasonable use
of and access to the Premises within three hundred sixty-five (365) days after
the date of such damage, then either Lessor or Lessee may terminate this Lease
effective upon delivery of written notice to the other within ten (10) days
after Lessor delivers notice to Lessee of its election to so repair, reconstruct
or restore.
(e) LESSEE'S COSTS AND INSURANCE PROCEEDS: In the event of any damage or
destruction of all or any part of the Premises, Lessee agrees to immediately (i)
notify Lessor thereof, and (ii) deliver to Lessor all property insurance
proceeds received by Lessee with respect to any tenant improvements installed by
or at the cost of Lessee and any alterations, but excluding proceeds for
Lessee's furniture, trade fixtures, equipment and other personal property,
whether or not this Lease is terminated as permitted in this Paragraph 20, and
Lessee hereby assigns to Lessor all rights to receive such insurance proceeds.
If, for any reason (including Lessee's failure to obtain insurance for the full
replacement cost of any Lessee Improvements installed by or at the cost of
Lessee and any alterations from any and all casualties), Lessee fails to receive
insurance proceeds covering the full replacement cost of any such tenant
improvements and any alterations which are damaged, Lessee will be deemed to
have self-insured the replacement cost of such item's, and upon any damage or
destruction thereto, Lessee agrees to immediately pay to Lessor the full
replacement cost of such item's, less any insurance proceeds actually received
by Lessor from Lessor's or Lessee's insurance with respect to such item's.
(f) ABATEMENT OF RENT: In the event of any damage, repair, reconstruction and/or
restoration described in this Paragraph 20, rent will be abated or reduced, as
the case may be, from the date of such casualty, in proportion to the degree to
which Lessee's use of the Premises is impaired during such period of repair
until such use is restored. Except for abatement of rent as provided
hereinabove, Lessee will not be entitled to any compensation or damages for loss
of, or interference with, Lessee's business or use or access of all or any part
of the Premises or for lost profits or any other consequential damages of any
kind or nature, which result from any such damage, repair, reconstruction or
restoration.
(g) DAMAGE NEAR END OF TERM: Lessor and Lessee shall each have the right to
terminate this Lease if any damage to the Premises or the Building occurs during
the last twelve (12) months of the Term of this Lease where Lessor's contractor
estimates in writing delivered to Lessor and Lessee the repair, reconstruction
or restoration of such damage cannot be complete within sixty (60) days after
the date of such casualty or during the balance of the term. If either party
desires to terminate this Lease under this Subparagraph (1), it shall provide
written notice to the other party of such election within ten (10) days after
receipt of Lessor's contractor's repair estimates.
(h) WAIVER OF TERMINATION RIGHT: Lessor and Lessee agree that the foregoing
provisions of this Paragraph 20 are to govern their respective rights and
obligations in the event of any damage or destruction and supersede and are in
lieu of the provisions of any applicable law, statute, ordinance, rule,
regulation, order or ruling now or hereafter in force which provide remedies for
damage or destruction of leased premises (including, without limitation, to the
extent the Premises are located in California, the provisions of California
Civil Code Section 1932, Subsection 2, and Section 1933, Subsection 4 and any
successor statute or laws of a similar nature).
21. EMINENT DOMAIN:
(a) SUBSTANTIAL TAKING: If the whole of the Premises, or such part thereof as
shall substantially interfere with Lessee's use and occupancy of the Premises,
as contemplated by this Lease, is taken for any public or quasi-public purpose
by any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, either party
will have the right to terminate this Lease effective as of the date possession
is required to be surrendered to such authority.
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(b) PARTIAL TAKING; ABATEMENT OF RENT: In the event of a taking of a portion of
the Premises which does not substantially interfere with Lessee's use and
occupancy of the Premises, then, neither party will have the right to terminate
this Lease and Lessor will thereafter proceed to make a functional unit of the
remaining portion of the Premises (but only to the extent Lessor receives
proceeds therefor from the condemning authority), and rent will be abated with
respect to the part of the premises which Lessee is deprived of on account of
such taking. Notwithstanding the immediately preceding sentence to the contrary,
if any part of the Building or the Development is taken (whether or not such
taking substantially interferes with Lessee's use of the Premises), Lessor may
terminate this Lease upon thirty (30) day's prior written notice to Lessee.
(c) CONDEMNATION AWARD: In connection with any taking of the Premises of the
Building, Lessor will be entitled to receive the entire amount of any award
which may be made or given in such taking or condemnation, without deduction or
apportionment for any estate or interest of Lessee, it being expressly
understood and agreed by Lessee that no portion of any such award will be
allowed or paid to Lessee for any so-called bonus or excess value will be the
sole property of Lessor. Lessee agrees not to assert any claim against Lessor or
the taking authority for any compensation because of such taking (including any
claim for bonus or excess value of this Lease); provided, however, if any
portion of the Premises is taken, Lessee will have the right to recover from the
condemning authority (but not from Lessor) any compensation as may be separately
awarded or recoverable by Lessee for the taking of Lessee's furniture, fixtures,
equipment and other personal property within the Premises, for Lessee's
relocation expenses, and for any loss of goodwill or other damage to Lessee's
business by reason of such taking.
(d) TEMPORARY TAKING: In the event of taking of the Premises or any part thereof
for temporary use, (i) this Lease will remain unaffected thereby and rent will
not abate, and (ii) Lessee will be entitled to receive such portion or portions
of any award made for such use with respect to the period of the taking which is
within the Term, provided that if such taking remains in force at the expiration
or earlier termination of this Lease, Lessee will then pay to Lessor a sum equal
to the reasonable cost of performing Lessee's obligations under Paragraph 11
with respect to surrender of the Premises and upon such payment Lessee will be
excused from such obligations. For purpose of this Subparagraph 21(d), a
temporary taking shall be defined as a taking for a period of ninety (90) days
or less.
22. DEFAULTS AND REMEDIES:
(a) DEFAULTS: The occurrence of any one or more of the following events will be
deemed a default by Lessee:
(i) The abandonment or vacating of the Premises by Lessee.
(ii) The failure by Lessee to make any payment of rent or additional rent or any
other payment required to be made by Lessee hereunder, as and when due, where
such failure continues for a period of three (3) days after written notice
thereof from Lessor to Lessee; provided, however, that any such notice will be
in lieu of, and not in addition to, any notice required under applicable law
(including, without limitation, to the extent the Premises are located in
California, the provisions of California Code of Civil Procedure Section 1161
regarding unlawful detainer actions or any successor statute or law of a similar
nature).
(iii) The failure by Lessee to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Lessee,
other than as specified in Subparagraph 22(a) (i) or (ii) above, where such
failure continues for a period of five (5) days after written notice thereof
from Lessor to Lessee. The provisions of any such notice will be in lieu of, and
not in addition to, any notice required under applicable law (including, without
limitation, to the extent the Premises are located in California, California
Code of Civil Procedure section 1161 regarding unlawful detainer actions and any
successor statute of similar law). If the nature of Lessee's default is such
that more than five (5) days are reasonably required for its cure, then Lessee
will not be deemed to be in default if Lessee commences such cure within such
five (5) days period and thereafter diligently prosecutes such cure to
completion.
(iv) (A) the making by Lessee of any general assignment for the benefit of
creditors; (B) the filing by or against Lessee of a petition to have Lessee
adjudged a bankrupt or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (C) the appointment of a
trustee or receiver to take 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 (D) the attachment,
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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.
(b) LESSOR'S REMEDIES; TERMINATION: In the event of any default by Lessee, in
addition to any other remedies available to Lessor at law or in equity under
applicable law, Lessor will have the immediate right and option to terminate
this Lease and all rights of Lessee hereunder. If Lessor elects to terminate
this Lease then, to the extent permitted under applicable law, Lessor may
recover from Lessee: (i) the worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus (ii) the worth at the time
award of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rent loss that
Lessee proves could have been reasonably avoided; plus (iii) the worth at the
time of award of the amount by which the unpaid rent for the balance of the Term
after the time of award exceeds the amount of such rent loss that Lessee proves
could be reasonably avoided; plus (iv) any other amount necessary to compensate
Lessor for all the detriment proximately caused by Lessee's failure to perform
its obligations under this Lease or which, in the ordinary course of things,
results therefrom including, but not limited to: attorneys' fees and costs
brokers' commissions; the costs of refurbishment, alterations, renovation and
repair of the Premises, and removal (including the repair of any damage caused
by such removal) and storage (or disposal) of Lessee's personal property,
equipment, fixtures, alterations, the tenant improvements and any other items
which Lessee is required under this Lease to remove but does not remove, as well
as the unamortized value of any free rent, reduced rent, free parking, reduced
rate parking and any tenant improvement allowance or other costs or economic
concessions provided, paid, granted or incurred by Lessor pursuant to this
Lease. The total value of such concessions and multiplying such value by a
fraction, the numerator of which is the number of months of the Lease Term not
yet elapsed as of the date on which the Lease is terminated, and the denominator
of which is the total number of months of the Lease Term. As used in
Subparagraphs 22(b)(iii) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
(c) RIGHT TO RECOVER RENT AS IT BECOMES DUE: Lessor may exercise the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in
effect after lessee's breach and abandonment, and recover rent as it becomes
due, if lessee has right to sublet or assign, subject only to reasonable
limitations). Lessee hereby specifically acknowledges and agrees that the
limitations on its right to sublet or assign, as set forth in Paragraph 24 or
the Lease, are reasonable.
(d) LESSOR'S REMEDIES; RE-ENTRY RIGHTS: In the event of any default by Lessee,
in addition to any other remedies available to Lessor under this Lease, at law
or in equity, Lessor will also have the right, with or without terminating this
Lease, to re-enter the Premises and remove all persons and property from the
Premises; such property may be removed and stored in a public warehouse or
elsewhere and/or disposed of at the sole cost and expense of and for the account
of Lessee in accordance with the provisions of Paragraph 13 of this Lease or any
other procedures permitted by applicable law. No re-entry or taking possession
of the Premises by Lessor pursuant to this Subparagraph 22(c) will be construed
as an election to terminate this Lease unless a written notice of such intention
is given to Lessee or unless the termination thereof is decreed by a court of
competent jurisdiction.
(e) LESSOR'S REMEDIES; RE-LETTING: If Lessor does not elect to terminate this
Lease, Lessor may from time to time, without terminating this Lease, either
recover all rent as it becomes due or relet the Premises or any part thereof on
terms and conditions as Lessor in its sole and absolute discretion may deem
advisable with the right to make alterations and repairs to the Premises in
connection with such reletting. If Lessor elects to relet the Premises, then
rents received by Lessor from such reletting will be applied: first, to the
payment of any indebtedness other than rent due hereunder from Lessee to Lessor;
second, to the payment of any cost of such reletting; third, to the payment of
the cost of any alterations and repairs to the Premises incurred in connection
with such reletting; fourth, to the payment of rent due and unpaid hereunder and
the residue, if any, will be held by Lessor and applied to payment of future
rent as the same may become due and payable hereunder. Should that portion of
such rents received from such reletting during any month, which is applied to
the payment of rent hereunder, be less than the rent payable during that month
by Lessee hereunder, then Lessee agrees to pay such deficiency to Lessor
immediately upon demand therefor by Lessor. Such deficiency will be calculated
and paid monthly.
(f) LESSOR'S REMEDIES; PERFORMANCE FOR LESSEE: All covenants and agreements to
be performed by Lessee under any of the terms of this Lease are to be performed
by Lessee at Lessee's sole cost and expense and without any abatement of
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rent. If Lessee fails to pay any sum of money owed to any party other than
Lessor, for which its is liable under this Lease, or if Lessee fails to perform
any other act on its part to be performed hereunder, and such failure continues
for ten (10) days after notice thereof by Lessor, Lessor may, without waiving
or releasing Lessee from its obligations, but shall not be obligated to, make
any such payment or perform any such other act to be made or performed by
Lessee. Lessee agrees to reimburse Lessor upon demand for all sums so paid by
Lessor and all necessary incidental costs, together with interest thereon at
the Interest Rate, from the date of such payment by Lessor until reimbursed by
Lessee. This remedy shall be in addition to any other right or remedy of Lessor
set forth in this Paragraph 22.
(g) LATE PAYMENT: If Lessee fails to pay any installment of rent within ten
(10) days of when due or if Lessee fails to make any other payment for which
Lessee is obligated under this Lease within ten (10) days of when due, such
late amount will accrue interest at the Interest Rate and Lessee agrees to pay
Lessor as additional rent such interest on such amount from the date such
amount becomes due until such amount is paid. In addition, Lessee agrees to pay
to Lessor concurrently with such late payment amount, as additional rent, a
late charge equal to ten percent (10%) of the amount due to compensate Lessor
for the extra costs Lessor will incur as a result of such late payment.
Acceptance of any such interest and late charge will not constitute a waiver of
the Lessee's default with respect to the overdue amount, or prevent Lessor from
exercising any of the other rights and remedies available to Lessor. If Lessee
incurs a late charge more than three (3) times in any period of twelve (12)
months during the Lease Term, then, notwithstanding that Lessee cures the late
payments for which such late charges are imposed, Lessor will have the right to
require Lessee thereafter to pay all installments of Monthly Base Rent
quarterly in advance throughout the remainder of the Lease Term.
(h) RIGHTS AND REMEDIES CUMULATIVE: All rights, options and remedies of Lessor
to the extent permitted by applicable law contained in this Lease will be
construed and held to be cumulative, and no one of them will be exclusive of
the other, and Lessor shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law or in
equity, whether or not state in this Lease. Nothing in this Paragraph 22 will
be deemed to limit or otherwise affect Lessee's indemnification of Lessor
pursuant to any provision of this Lease.
23. LESSOR'S DEFAULT: Lessor will not be in default in the performance of any
obligation required to be performed by Lessor under this Lease unless Lessor
fails to perform such obligation within thirty (30) days after the receipt of
written notice from Lessee specifying in detail Lessor's failure to perform;
provided however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance, then Lessor will not be
deemed in default if it commences such performance within such thirty (30) day
period and thereafter diligently pursues the same to completion. Upon any
default by Lessor, Lessee may exercise any of its rights provided at law or in
equity subject to the limitations on liability set forth in Paragraph 35 of
this Lease.
24. ASSIGNMENT AND SUBLETTING:
(a) RESTRICTION ON TRANSFER: Except as expressly provided in this Paragraph 24,
Lessee will not, either voluntarily or by operation of law, assign or encumber
this Lease or any interest herein or sublet the Premises or any part thereof,
or permit the use or occupancy of the Premises by any party other than Lessee
(any such assignment, encumbrance, sublease or the like will sometimes be
referred to as a "Transfer"), without the prior written consent of Lessor,
which consent Lessor will not unreasonably withhold. For purposes of this
Paragraph 24, if Lessee is a corporation, partnership or other entity, any
transfer, assignment, encumbrance or hypothecation of twenty-five percent (25%)
or more (individually or in the aggregate) of any stock or other ownership
interest in such entity, and/or any transfer assignment, hypothecation or
encumbrance of any controlling ownership or voting interest in such entity,
will be deemed a Transfer and will be subject to all of the restrictions and
provisions contained in the Paragraph 24. NOTWITHSTANDING THE FOREGOING, LESSEE
MAY UPON A FIFTEEN (15) DAY WRITTEN NOTICE, AND LEGAL WRITTEN DOCUMENTATION TO
LESSOR, MAY SUBLET THE PREMISES OR ASSIGN THE LEASE TO (A) AN ENTITY
CONTROLLING, CONTROLLED BY OR UNDER COMMON CONTROL WITH LESSEE, (B) A SUCCESSOR
ENTITY RELATED TO LESSEE BY MERGER, CONSOLIDATION, NONBANKRUPTCY
REORGANIZATION, OR GOVERNMENT ACTION, OR (C) A PURCHASER OF SUBSTANTIALLY ALL
LESSER'S ASSETS LOCATED IN THE PREMISES. A SALE OR TRANSFER OF LESSEE'S CAPITAL
STOCK SHALL NOT BE DEEMED AN ASSIGNMENT, SUBLETTING OR ANY OTHER TRANSFER OF
THE LEASE OR THE PREMISES.
(b) TRANSFER NOTICE: If Lessee desires to effect a Transfer, then at least
thirty (30) days prior to the date when Lessee desires the Transfer to be
effective (the "Transfer Date"), Lessee agrees to give Lessor a notice (the
"Transfer Notice").
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stating the name, address and business of the proposed assignee, sublessee or
other transferee (sometimes referred to hereinafter as "Transferee"),
reasonable information (including references) concerning the character,
ownership and financial condition of the proposed Transferee, the Transfer
Date, any ownership or commercial relationship between Lessee and the proposed
Transferee, and the consideration and all other material terms and conditions
of the proposed Transfer, all in such detail as Lessor may reasonably require.
(c) LESSOR'S OPTIONS: Within ten (10) days of Lessor's receipt of any
Transfer Notice, and any additional information requested by Lessor concerning
the proposed Transferee's financial responsibility, Lessor will notify Lessee
of its election to do one of the following: (i) consent to the proposed
Transfer subject to such reasonable conditions as Lessor may impose in
providing such consent; (ii) refuse such consent, which refusal shall be on
reasonable grounds; or (iii) terminate this Lease as to all or such portion of
the Premises which is proposed to be sublet or assigned and recapture all or
such portion of the Premises for reletting by Lessor.
(d) ADDITIONAL CONDITIONS: A condition to Lessor's consent to any Transfer of
this Lease will be the delivery to Lessor or a true copy of the fully executed
instrument of assignment, sublease, transfer or hypothecation, in form and
substance reasonably satisfactory to Lessor. Lessee agrees to pay to Lessor, as
additional rent, all sums and other consideration payable to and for the
benefit of Lessee by the assignee or sublessee in excess of the rent payable
under this Lease for the same period and portion of the Premises. In
calculating excess rent or other consideration which may be payable to Lessor
under this paragraph, Lessee will be entitled to deduct commercially reasonable
third party brokerage commissions and attorneys' fees and other amounts
reasonably and actually expended by Lessee in connection with such assignment
or subletting if acceptable written evidence of such expenditures is provided
to Lessor. No Transfer will release Lessee of Lessee's obligations under this
Lease or alter the liability of Lessees to pay the rent and to perform all
other obligations to be performed by Lessee hereunder. Lessor may require that
any Transferee (i) remit directly to Lessor on a monthly basis, all monies due
Lessee by said Transferee and (ii) assume the obligations of Lessee hereunder
occurring after the date of transfer. Consent by Lessor to one Transfer will
not be deemed consent to any subsequent Transfer. In the event of default by
any Transferee of Lessee or any successor of Lessee in the performance of any
of the terms hereof, Lessor may proceed directly against Lessee without the
necessity of exhausting remedies against such Transferee or successor. If
Lessee effects a Transfer or requests the consent of Lessor to any Transfer
(whether or not such Transfer is consummated), then, upon demand, Lessee agrees
to pay Lessor a non-refundable administrative fee of Two Hundred Fifty Dollars
($250.00), plus Lessor's reasonable attorneys' fees.
25. SUBORDINATION: Without the necessity of any additional document being
executed by Lessee for the purpose of effecting a subordination, and at the
election of Lessor or any mortgagee or beneficiary with a deed of trust
encumbering the Building and/or the Development, or any lessor of a ground or
underlying lease with respect to the Building, this Lease will be subject and
subordinate at all times to: (i) all ground lease or underlying leases which
may now exist or hereafter be executed affecting the Building; and (ii) the
lien of any mortgage or deed of trust which may now exist or hereafter be
executed for which the Building, the Development or any leases thereof, of
Lessor's interest and estate in any of said items, is specified as security.
Notwithstanding the foregoing, Lessor reserves the right to subordinate any
such ground leases or underlying leases or any such liens to this Lease. If any
such ground lease or underlying lease terminates for any reason or any such
mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure
is made for any reason, at the election of Lessor's successor in interest,
Lessee agrees to attorn to and become the lessee of such successor in which
event Lessee's right to possession of the Premises will not be disturbed as
long as Lessee is not in default under this Lease. Lessee hereby waives its
rights under any law which gives or purports to give Lessee any right to
terminate or otherwise adversely affect this Lease and the obligations of
Lessee hereunder in the event of any such foreclosure proceeding of sale.
Lessee covenants and agrees to execute and deliver, upon demand by Lessor and
in the form reasonably required by Lessor, any additional documents evidencing
the priority or subordination of this Lease and Lessee's attornment agreement
with respect to any such ground lease or underlying leases or the lien of any
such mortgage or deed of trust. If Lessee fails to sign and return any such
documents within ten (10) days of receipt, Lessee will be in default hereunder.
26. ESTOPPEL CERTIFICATE: Within ten (10) days following any written request
which Lessor may make from time to time, Lessee agrees to execute and deliver
to Lessor an estoppel certificate as may reasonably be required by Lessor.
Lessor and Lessee intend that any statement delivered pursuant to the Paragraph
26 may be relied upon by any mortgagee, beneficiary, purchaser or prospective
purchaser of the Building or any interest herein. Lessee's failure to deliver
such statement within such time will be conclusive upon Lessee (i) that this
Lease is in full force and effect,
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without modification except as may be represented by Lessor, (ii) that there
are no incurred defaults in Lessor's performance, and (iii) that not more than
one (1) month's rent has been paid in advance. Without limiting the foregoing,
if Lessee fails to deliver any such statement within such ten (10) day period,
Lessor may deliver to Lessee an additional request for such statement and
Lessee's failure to deliver such statement to Lessor within ten (10) days after
delivery of such additional request will constitute a default under this Lease.
Lessee agrees to indemnify and protect Lessor from and against any and all
claims, damages, losses, liabilities and expenses (including attorneys' fees
and costs) attributable to any failure by Lessee to timely deliver any such
estoppel certificate to Lessor as required by this Paragraph 26.
27. BUILDING PLANNING: If Lessor requires the Premises for use in conjunction
with another suite or for other reasons connected with the planning program for
the Building or the Development, Lessor will have the right, upon sixty (60)
days' prior written notice to Lessee, to move Lessee to other space in the
Building of substantially similar size as the Premises, and with lessee
improvements of substantially similar age, quality and layout as then existing
in the Premises. Any such relocation will be at Lessor's cost and expense,
including the cost of providing such substantially similar lessee improvements
(but not any furniture or personal property) and Lessee's reasonable moving,
telephone installation and stationary reprinting cost. If Lessor so relocates
Lessee, the terms and conditions of this Lease will remain in full force and
effect an apply to the new space, except that (a) a revised Exhibit "A-1" will
become part of this Lease and will reflect the location of the new space, (b)
Paragraph 1 of this Lease will be amended to include and state all correct data
as to the new space, (c) the new space will thereafter be deemed to be the
"Premises", and (d) all economic terms and conditions (e.g. rent, total Base
Operating Expense, etc.) will be adjusted on a per square foot basis based on
the total number of rentable square feet of area contained in the new space.
Lessor and Lessee agree to cooperate fully with one another in order to
minimize the inconvenience to Lessee resulting form any such relocation and the
parties shall execute the amendment of this lease.
28. RULES AND REGULATIONS: Lessee agrees to faithfully observe and comply with
the "Rules and Regulations," a copy of which is attached hereto and incorporated
herein by this reference as Exhibit "H", and all reasonable and
nondiscriminatory modifications thereof and additions thereto from time to
time put into effect by Lessor. Lessor will not be responsible to Lessee for
the violation or non-performance by any other lessee or occupant of the
Building of any of the Rules and Regulations.
29. MODIFICATION AND CURE RIGHTS OF LESSOR'S MORTGAGEES AND LESSORS: If, in
connection with Lessors obtaining or entering into any financing or ground lease
for any portion of the Building or the Development, the lender or ground lessor
request modifications to this Lease, lessee, within ten (10) days after request
therefor, agrees to execute an amendment to this Lease incorporating such
modifications, provided such modifications are reasonable an do not increase
the monetary obligations of Lessee under this Lease or adversely affect the
leasehold estate created by the Lease. In the event of any default on the part
of Lessor, Lessee will give notice by registered or certified mail to any
beneficiary of a deed of trust or mortgage covering the Premises or ground
lessor of Lessor whose address has been furnished to Lessee, and Lessee agrees
to offer such beneficiary, mortgagee or ground lessor a reasonable opportunity
to cure the default (including with respect to any such beneficiary or
mortgagee, time to obtain possession of the premises, subject to this Lease and
Lessee's rights hereunder, by power of sale or a judicial foreclose, if such
should prove necessary to effect a cure).
30. DEFINITION OF LESSOR: The term "Lessor", as used in this Lease, so far as
covenants or obligations on the part of Lessor are concerned, means and
includes only the owner or owners, at the time in question, of the fee title of
the Premises or the lessees under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title (other
than a transfer for security purposes only), Lessor herein named (and in case
of any subsequent transfers or conveyances, the then grantor) will be
automatically relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of Lessor contained in this Lease thereafter to be
performed, so long as the transferee assumes in writing all such covenants
and obligations of Lessor arising after the date of such transfer. Lessor and
Lessor's transferees and assignees have the absolute right to transfer all or
any portion of their respective title and interest in the Development, the
Building, the Premises and/or this Lease without the consent of Lessee, and
such transfer or subsequent transfer will not be deemed a violation on Lessor's
part of any of the terms and conditions of this Lease.
31. WAIVER: The waiver by either party of any breach of any term, covenant or
condition herein contained will not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein
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contained, nor will any custom or practice which may develop between the
parties in the administration of the terms hereof be deemed a waiver of or in
any way affect the right of either party to insist upon performance in strict
accordance with said terms. The subsequent acceptance of rent or any other
payment hereunder by Lessor will not be deemed to be a waiver of any preceding
breach by Lessee of any term, covenant or condition of this Lease, other than
the failure of Lessee to pay the particular rent so accepted, regardless of
Lessor's knowledge of such preceding breach at
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the time of acceptance of such rent. No acceptance by Lessor of a lesser sum
than the basic rent and additional rent or other sum then due will be deemed to
be other than on account of the earliest installment if such rent or other
amount due, nor will any endorsement or statement on any check or any letter
accompanying any check be deemed an accord and satisfaction, and Lessor may
accept such check or payment without prejudice to Lessor's right to recover the
balance of such installment or other amount or pursue any other remedy provided
in this Lease. The consent or approval of Lessor to or of any act by Lessee
requiring Lessor's consent or approval will not be deemed to waive or render
unnecessary Lessor's consent or approval to or of any subsequent similar acts by
Lessee.
32. PARKING: Lessee shall be entitled to use, in common with other lessees and
Lessor and its agents, the number of assigned and/or undesignated vehicle
parking spaces allocated to Lessee in Paragraph 1(n) subject to the terms and
conditions of this Paragraph 32 and the Rules and Regulations regarding parking,
and the parking contained in Exhibit "I" and "I" attached hereto; provided
however, that if the size of the Premises shall hereafter be reduced, whether
pursuant to an amendment of lease or any modification to this standard lease
form or otherwise, the number of parking spaces allocated to Lessee shall
automatically be reduced pro rata. Lessee's use of such parking spaces shall be
subject to payment by Lessee of such standard monthly parking rates, if any, as
may be charged from time to time to persons other than the officers and
employees of Lessor and its affiliates, and subject to such rules and
regulations as maybe reasonably established or altered from time to time by
Lessor or its manager of such parking facilities, provided that such rates do
not exceed fair market rates for comparable parking facilities in the basements
of comparable nearby office towers, all as reasonably determined by Lessor. At
Lessor's request, Lessee (or its designated employees with parking privileges)
shall enter into parking licenses or lease agreements or other arrangements then
in use by Lessor (or Lessor's operator of the parking facilities) with respect
to such monthly parking. Upon request, Lessee shall provide Lessor with the
license plate numbers of all vehicles used at the Facility by Lessee's
employees. In the event that, pursuant to any modification or amendment to this
standard form lease, Lessee is at any time given any right to the exclusive use
of any designated parking stalls or facilities, Lessor shall nevertheless have
the right from time to time to substitute other designated parking stalls or
facilities therefor, so long as such substitute stalls or facilities are, in
Lessor's judgment, reasonably comparable. If Lessee parks more vehicles in the
Facility's parking area than are permitted under this Section, Lessor shall have
the right, without limitation to Lessor's other remedies under this Lease, to
collect from Lessee a daily charge, to reasonably determined by Lessor, for
each such additional vehicle.
33. FORCE MAJEURE: If either Lessor or Lessee is delayed, hindered in or
prevented from the performance of any act required under this Lease by reason of
strikes, lock-outs, labor troubles, inability to procure standard materials,
failure of power, restrictive governmental laws, regulations or orders or
governmental action or inaction (including failure, refusal or delay in issuing
permits, approvals and/or authorizations which is not the result of the action
or inaction of the party claiming such delay), riots, civil unrest or
insurrection, war, fire, earthquake, flood or other natural disaster, unusual
and unforeseeable delay which results from an interruption or any public
utilities (e.g., electricity, gas, water, telephone) or other unusual and
unforeseeable delay not within the reasonable control of the party delayed in
performing work or doing acts required under the provisions of this Lease, then
performance work or doing acts required under the provisions of this Lease, then
performance of such act will be excused for the period of the delay and the
period for the performance of any such act the provisions of this Paragraph 33
will not operate to excuse Lessee from prompt payment of rent or any other
payments required under the provisions of the Lease.
34. SIGNS: Lessor will designate the location on the Premises, if any, for one
or more Lessee identification sign(s). Lessee agrees to have Lessor install and
maintain Lessee's identification sign(s) in such designated location in
accordance with this Paragraph 34 at LESSOR'S sole cost and expense. Lessee has
no right to install Lessee identification signs in any other location in, on or
about the Premises or the Development and will not display or erect any other
signs, displays or other advertising materials that are visible from the
exterior of the Building or from within the Building in any interior or exterior
common areas. The size, design, color and other physical aspects or any and all
permitted sign(s) will be subject to (i) Lessor's written approval prior to
installation, which approval may be withheld in Lessor's discretion, (ii) any
covenants, conditions or restrictions governing the Premises, and (iii) any
applicable municipal or governmental permits and approvals. Lessee will be
solely responsible for all costs for installation, maintenance, repair and
removal of any Lessee identification sign(s). If Lessee fails to remove Lessee's
sign(s) upon termination of this Lease and repair any damage caused by such
removal, Lessor may do so at Lessee's sole cost and expense. Lessee agrees to
reimburse Lessor for all costs incurred by Lessor to effect any installation,
maintenance or removal on Lessee's account, which amount will be deemed
additional rent, and may include, without limitation, all sums disbursed,
incurred or deposited by Lessor including Lessor's costs, expenses and actual
attorneys' fees with interest thereon at the Interest
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Rate from the date of Lessor's demand until paid by Lessee. Any sign rights
granted to Lessee under this Lease are personal to Lessee and may not be
assigned, transferred or otherwise conveyed to any assignee or sublessee of
Lessee without Lessor's prior written consent, which consent Lessor may NOT
UNREASONABLY withhold in its sole and absolute discretion.
35. LIMITATION ON LIABILITY: In consideration of the benefits accruing
hereunder, Lessee on behalf of itself and all successors and assigns of Lessee
covenants and agrees that, in the event of any actual or alleged failure, breach
or default hereunder by Lessor: (a) Lessee's recourse against Lessor for
monetary damages will be limited to Lessor's interest in the Building including,
subject to the prior rights of any Mortgagee, Lessor's interest in the rents of
the Building and any insurance proceeds payable to Lessor; (b) except as may be
necessary to secure jurisdiction of the partnership, no partner may be necessary
to secure jurisdiction of the partnership, no partner of Lessor shall be sued or
named as a party in any suit or action and no service of process shall be made
against any partner of Lessor; (c) no partner of Lessor shall be required to
answer or otherwise plead to any service of process; (d) no judgment will be
taken against any partner of Lessor and any judgment taken against any partner
of Lessor may be vacated and set aside at any time after the fact; (e) no writ
of execution will be levied against the assets of any partner of Lessor; (f) the
obligations under this Lease do not constitute personal obligations of the
individual partners, directors, officers or shareholders of Lessor, and Lessee
shall no seek recourse against the individual partners, directors, officers of
shareholders of Lessor or any of their personal assets for satisfaction of any
liability in respect to this Lease; and (g) these covenants and agreements are
enforceable both by Lessor and also any partner of Lessor.
36. FINANCIAL STATEMENTS: Prior to the execution of this Lease by Lessor and at
any time during the Term of this Lease upon ten (10) days prior written notice
from Lessor, Lessee agrees to provide Lessor with a current financial statement
for Lessee and any guarantors of Lessee and financial statement for the two (2)
years prior to the current financial statement year for Lessee and any
guarantors of Lessee. Such statements are to be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of
Lessee, audited by an independent certified public accountant. LESSOR SHALL KEEP
SUCH STATEMENTS CONFIDENTIAL AND SHALL ONLY USE SUCH STATEMENT FOR PURPOSES
RELATED TO THIS LEASE OR THE FINANCING OF THE BUILDING OR PROJECT.
37. QUIET ENJOYMENT: Lessor covenants and agrees with Lessee that upon Lessee
paying the rent required under this Lease and paying all other charges and
performing all of the covenants and provisions on Lessee's part to be observed
and performed under this Lease, Lessee may peaceably and quietly have, hold and
enjoy the Premises in accordance with this Lease.
38. MISCELLANEOUS:
(a) CONFLICT OF LAWS: This Lease shall be governed by and construed solely
pursuant to the laws of the State OF CALIFORNIA, without giving effect to choice
of law principles thereunder.
(b) SUCCESSORS AND ASSIGNS: Except as otherwise provided in this Lease, all of
the covenants, conditions and provisions of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.
(c) PROFESSIONAL FEES AND COSTS: If either Lessor or Lessee should bring suit
against the other with respect to this Lease, then all cost and expenses,
including without limitation, actual professional fees and costs such as
appraiser, accountants' and attorneys' fees and costs, incurred by the party
which prevails in such action, whether by final judgment or out of court
settlement, shall be paid by the other party, which obligation on the part of
the other party shall be deemed to have accrued on the date of the commencement
of such action and shall be enforceable whether or not the action is prosecuted
to judgment. As used herein, attorneys' fees and costs shall include, without
limitation, attorneys' fees, costs and expenses incurred in connection with any
(I) post judgment motions; (ii) contempt proceeding; (iii) garnishment, levy,
and debtor and third party examination; (iv) discovery; and (v) bankruptcy
litigation.
(d) TERMS AND HEADINGS: The words "Lessor" and "Lessee" as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. The paragraph headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof.
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(e) TIME: Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
(f) PRIOR AGREEMENT; AMENDMENTS: This Lease constitutes and is intended by the
parties to be a final, complete and exclusive statement of their entire
agreement with respect to the subject matter of this Lease. This Lease
supersedes any and all prior and contemporaneous agreements and understandings
of any kind relating to the subject matter of this Lease. There are no other
agreements, understandings, representations, warranties, or statements, either
oral or in written form, concerning the subject matter of this Lease. No
alteration, modification, amendment or interpretation of this Lease shall be
binding on the parties unless contained in a writing which is signed by both
parties.
(g) SEPARABILITY: The Provisions of this Lease shall be considered separable
such that if any provision or part of this Lease is ever held to be invalid,
void or illegal under any law or ruling, all remaining provisions of this Lease
shall remain in full force and effect to the maximum extent permitted by law.
(h) RECORDING: Neither Lessor nor Lessee shall record this Lease nor a short
form memorandum thereof without the consent of the other.
(i) COUNTERPARTS: This Lease may be executed in one or more counterparts, each
of which shall constitute an original and all of which shall be one and the same
agreement.
(j) NONDISCLOSURE OF LEASE TERMS: Lessee acknowledges and agrees that the terms
of this Lease are confidential and constitute proprietary information of Lessor.
Disclosure of the terms could adversely affect the ability of Lessor to
negotiate other leases and impair Lessor's relationship with other lessees.
Accordingly, Lessee agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper of other
publication or any other lessee or apparent prospective lessee of the Building
or other portion of the Development, or real estate agent, either directly or
indirectly, without the prior written consent of Lessor, provided, however,
that Lessee may disclose the terms to prospective sublessees or assignees under
this Lease.
(k) NON-DISCRIMINATION: Lessee AND LESSOR acknowledge and agree that there shall
be no discrimination against, or segregation of, any person, group of person,
or entity on the basis of race, color, creed, religion, age, sex, marital
status, national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.
39. EXECUTION OF LEASE:
(a) JOINT AND SEVERAL OBLIGATIONS: If more than one person or entity executes
this Lease as Lessee, their execution of the Lease will constitute their
covenant and agreement that (i) each of the them is jointly and severally liable
for the keeping, observing and performing of all of the terms, covenants,
conditions, provisions and agreements of this Lease to be kept, observed and
performed by Lessee, and (ii) the term "Lessee" as used in this Lease means and
includes each of them jointly and severally. The act of or notice from, or
noticed or refund to, or the signature of any one or more of them, with respect
to the tenancy of this Lease, including, but not limited to, any renewal,
extension, expiration, termination or modification of this Lease as Lessee with
the same force and effect as if each and all of them had so acted or so given or
received which notice or refund of so signed.
(b) LESSEE AS CORPORATION OR PARTNERSHIP: If Lessee executes this Lease as a
corporation, limited liability company, or partnership, then Lessee and the
persons executing this Lease on behalf of Lessee represent and warrant that such
entity is duly qualified and in good standing to do business in California and
that the individuals executing this Lease on Lessee's behalf are duly authorized
to execute and deliver this Lease on its behalf, and in the case of a
corporation, in accordance with a duly adopted resolution of the board of
directors of Lessee, a copy of which is to be delivered to Lessor on execution
hereof, if requested by Lessor, and in accordance with the by-laws of Lessee,
and, in the case of a limited liability in accordance the operating agreement
and any amendments thereto, and, in the case of a partnership, in accordance
with the partnership agreement and the most current amendments thereto, if any,
copies of which are to be delivered to Lessor on execution hereof, if requested
by Lessor, and that this Lease is binding upon Lessee in accordance with its
terms.
21
<PAGE> 27
(c) EXAMINATION OF LEASE: Submission of this instrument by Lessor to Lessee for
examination or signature by Lessee does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Lessor and Lessee.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed by
their duly authorized representatives as of the date first above written.
LESSOR:
By:
----------------------------------
Print Name:
--------------------------
Print Title:
-------------------------
LESSEE:
By: /s/ PETER H. CHEESBROUGH
----------------------------------
Print Name: Peter H. Cheesbrough
--------------------------
Print Title: SR. VP Finance & CFO
-------------------------
By:
----------------------------------
Print Name:
--------------------------
Print Title:
-------------------------
22
<PAGE> 28
[FLOOR PLAN]
INITIAL
PC
<PAGE> 29
EXHIBIT "B"
ADJUSTMENTS TO MONTHLY BASE RENT
Beginning March 1, 2001 through February 28, 2002 the monthly rent shall be
$16,398.48, due on the first day of each month.
Beginning March 1, 2002 through February 28, 2003 the monthly rent shall be
$16,843.40, due on the first day of each month.
INITIAL
-------
/s/ PHC
24
<PAGE> 30
EXHIBIT "C"
DESCRIPTION OF LESSORS WORK
Lessor at his sole cost and expense shall have the Premises thoroughly cleaned,
carpets professionally steam cleaned, and apply building standard paint to and
walls, doorways that do not have any wall covering fabric or paper.
INITIAL
-------
/s/ PHC
25
<PAGE> 31
EXHIBIT "D"
LESSEE'S INSURANCE REQUIREMENTS
This outlines the insurance requirements of your Lease. To assure compliance
with theses terms, we suggest you send a copy of this Exhibit to your insurer or
agent. Initial Certificates and endorsements must be provided to Lessor prior to
occupancy of the Premises and renewals ten (10) days before expiration.
1. Comprehensive or Commercial General Liability Insurance:
$1,000,000. Combined Single Limit, each occurrence.
$1,000,000. Aggregate (minimum) this location.
$1,000,000. Products/Completed Operations Aggregate.
$50,000. Fire Legal Liability Limit, per fire, Bodily Injury,
Property Damage, Personal Injury and Advertising Injury; Blanket
Contractual Liability - Covering Indemnity Section 18(b); Products
and Completed Operations Liability; Lessor as an Additional Insured;
Severability of Interest, permitting Cross liability among insured;
provision stating that lessee's insurance is primary and
non-contributing with any insurance carried by Lessor.
2. Lessee's Property Insurance:
All Risks coverage of Property owned by Lessee or for which the
Lessee is legally liable; full replacement cost basis.
3. Lessee's Business Interruption Insurance:
All Risks coverage of operations as leased premises; covering one-years
business interruption due to insured peril.
4. Lessee's Workers' Compensation and Employer's Liability
Insurance:
Statutory Limits and terms required by State; $1,000,000.
Employer's Liability Limit:
All insurance is to be with licensed insurers having a Best's rating of "A X" or
better, and must include the following:
Waiver of Subrogation in favor of BOTH PARTIES Thirty (30) day pre-notice
of cancellation/non renewal to Lessor.
26
<PAGE> 32
SEND CERTIFICATE AND ENDORSEMENT TO:
Foster Enterprises
400 So. El Camino Real, Suite 1400
San Mateo, California 94402
PLEASE INCLUDE ADDRESS OF PREMISES.
INITIAL
-------
/s/ PHC
27
<PAGE> 33
EXHIBIT "E"
DEFINITION OF OPERATING EXPENSES
1. ITEMS INCLUDED IN OPERATING EXPENSES. The term "Operating Expenses" as used
in the Lease to which this Exhibit "E" is attached means: all costs and expenses
of operation and maintenance of the Building and the Common Areas (as such terms
are defined in the Lease), as determined by standard accounting practices,
calculated assuming the Building is ninety-five percent (95%) occupied,
including the following costs by way of illustration but not limitation, but
excluding those items specifically set forth in Paragraph 3 below: (a) Real
Property Taxes and Assessments (as defined in PARAGRAPH 2 below) and any taxes
or assessments imposed in lieu thereof; (b) any and all assessments imposed with
respect to the Building pursuant to any covenants, conditions and restrictions
affecting the Development, the Common Areas or the Building; (c) water and sewer
charges and the costs of electricity, heating, ventilating, air conditioning and
other utilities; (d) utilities surcharges and any other costs, levies or
assessments resulting from statutes or regulations promulgated by any government
or quasi-government authority in connection with the use, occupancy or
alteration of the Building or the premises or the parking facilities serving the
Building or the Premises; (e) costs of insurance obtained by Lessor pursuant to
PARAGRAPH 19 of the Lease; (f) waste disposal and janitorial services; (g)
security; (h) labor; (i) costs incurred in the management of the Building,
including, without limitation; (i) supplies, (ii) wages and salaries (and
payroll taxes and similar governmental charges related thereto) of employees
used in the management, operation and maintenance of the Building, (iii)
Building management office rental, supplies, equipment and related operating
expenses, and (iv) a management/administrative fee determined as a percentage of
the annual gross revenues of the Building exclusive of the proceeds of financing
or a sale of the Building and an administrative fee for the management of the
Development Common Area determined as a percentage of Development Common Area
Operating Expenses; (j) supplies, materials, equipment and tools including
rental of personal property used for maintenance; (k) repair and maintenance of
the elevators and the structural portions of the Building, including the
plumbing, heating, ventilating, air-conditioning and electrical systems
installed or furnished by Lessor; (l) maintenance, costs and upkeep of all
parking and Development Common areas; (m) depreciation on a straight line basis
and rental of personal property used in maintenance; (n) amortization on a
straight line basis over the useful life [together with interest at the Interest
Rate on the unamortized balance] of all capitalized expenditures which are: (i)
reasonably intended to produce a reduction in operating charges or energy
consumption; or (ii) required under any governmental law or regulation that was
not applicable to the Building at the time it was originally constructed; or
(iii) for replacement of any Building equipment needed to operate the Building
at the same quality levels as prior to the replacement; (o) costs and expenses
of gardening and landscaping; (p) maintenance of signs (other than signs of
Lessees of the Building); (q) personal property taxes levied on or attributable
to personal property used in connection with the Building or the Common Areas;
(r) reasonable accounting, audit, verification, legal and other consulting fees,
and (s) costs and expenses of repairs, resurfacing, repairing, maintenance,
painting, lighting, cleaning, refuse removal, security and similar items,
including appropriate reserves. When calculating Operating Expenses for
purposes of establishing Lessee's Base Operating Expense, Operating Expenses
shall not include Real Property Taxes and Assessments attributable to special
assessments, charges, costs, or fees or due to modifications or changes in
governmental laws or regulations including, but not limited to, the institution
of a split tax roll, and shall exclude market-wide labor-rate increases due to
extraordinary circumstances including, but not limited to, boycotts and strikes
and utility increases due to extraordinary circumstances including, but
not limited to, conservation surcharges, boycotts, embargos or other shortages.
2. REAL PROPERTY TAXES AND ASSESSMENTS. The term "Real Property Taxes and
Assessments", as used in this Exhibit "E," means: any form of assessment,
license fee, license tax, business license fee, commercial rental tax, levy
charge, improvement bond, tax or similar imposition imposed by any authority
having the direct power to tax, including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
or special assessment district thereof, as against any legal or equitable
interest of Lessor in the Premises, Building, Common Areas or the Development
(as such terms are defined in the Lease), adjusted to reflect an assumption that
the Building is fully assessed for real property tax purposes as a completed
building ready for occupancy, including the following by way of illustration but
not limitation: (a) any tax on Lessor's "right" to rent or "right" to other
income from the Premises or as against Lessor's business of leasing the
Premises; (b) any assessment, tax, fee, levy or charge in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being acknowledged by
Lessee and Lessor that Proposition 13 was adopted by the voters of the State of
California in the June,
28
<PAGE> 34
1978 election and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants. It is
the intention of Lessee and Lessor that all such new and increased assessments,
taxes, fees, levies and charges be included within the definition of "real
property taxes" for the purposes of this Lease; (c) any assessment, tax, fee,
levy or charge allocable to or measured by the area of the premises or other
premises in the Building or the rent payable by Lessee hereunder or other
lessees of the Building, including, without limitation, any gross receipts tax
or excise tax levied by state, city or federal government, or any political
subdivision thereof, with respect to the receipt of such rent, or upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repairs, use or occupancy by Lessee of the Premises, or any portion
thereof but not on Lessor's other operations; (d) any assessment, tax, fee, levy
or charge upon this transaction or any document to which Lessee is a party,
creating or transferring an interest or an estate in the Premises; and/or (e)
any assessment, tax, fee, levy or charge by any governmental agency related to
any transportation plan, fund or system (including assessment districts)
instituted within the geographic area of which the Building is a part.
Notwithstanding the foregoing, if at any time after the Commencement Date, the
amount of Real Property Taxes and Assessments decreases, then for purposes of
all subsequent Lease Years, including the Lease Year in which such decrease in
Real Property Taxes and Assessments occurs, Lessee's Base Operating Expense
shall be decreased by an amount equal to such decrease in Real Property Taxes
and Assessments.
3. ITEMS EXCLUDED FROM OPERATING EXPENSES. Notwithstanding the provisions
of PARAGRAPHS 1 AND 2 above to the contrary, "Operating Expenses" will
not include: (a) Lessor's federal or state OR NET income, franchisee,
inheritance TRANSFER, GIFT, or estate taxes; (b) any ground lease
rental; (c) costs incurred by Lessor for the repair of damage to the
Building to the extent that Lessor is reimbursed by insurance or
condemnation proceeds or by lessees, warrantors or other third persons;
(d) depreciation, amortization and interest payments, except as
specifically provided herein, and except on materials, tools, supplies
and vendor-type equipment purchased by Lessor to enable Lessor to
supply services Lessor might otherwise contract for with a third party,
where such depreciation, amortization and interest payments would
otherwise have been included in the charge for such third party's
services, all as determined in accordance with standard accounting
practices; (e) brokerage commissions, finders' fees, attorneys' fees,
space planning costs and other costs incurred by Lessor in leasing or
attempting to lease space in the Building; (f) costs of a capital
nature, including, without limitation, capital improvements, capital
replacements, capital repairs, capital equipment and capital tools, all
as determined in accordance with standard accounting practices;
provided, however, the capital expenditures set forth in Subparagraph
1(n) above will in any event be included in the definition of Operating
Expenses; (g) interest, principal, points and fees on debt or
amortization on any mortgage, deed of trust or other debt encumbering
the Building or the Development; (h) costs, including permit, license
and inspection costs, incurred with respect to the installation of
lessee improvements for lessees in the Building (including the original
Lessee Improvements for the Premises), or incurred in renovating or
otherwise improving, decorating, painting or redecorating space for
lessees or other occupants of the Building, including space planning
and interior design costs and fees; (i) attorneys' fees and other costs
and expenses incurred in connection with negotiations or disputes with
present or prospective lessees or other occupants of the Building;
provided, however, that Operating Expenses will include those
attorneys' fees and other costs and expenses incurred in connection
with negotiations, disputes or claims relating to items of Operating
Expenses, enforcement of rules and regulations of the Building, and
such other matters relating to the maintenance of standards required of
Lessor under the Lease; (j) except for the administrative/management
fees described in SUBPARAGRAPH 1(i) above, costs of Lessor's general
corporate overhead, (k) all items and services for which Lessee or any
other lessee in the Building reimburses Lessor (others than through
operating expenses pass-through provisions); (1) electric power costs
for which any lessee directly contracts with the local public service
company; and (m) costs arising from Lessor's charitable or political
contributions.
29
<PAGE> 35
EXHIBIT "F"
STANDARDS FOR UTILITIES AND SERVICES
The following standard for utilities and services are in effect. Lessor reserves
the right to adopt nondiscriminatory modifications and additions hereto.
Subject to the terms and conditions of the Lease and provided Lessee remains in
occupancy of the Premises, Lessor will provide or make available the following
utilities and services:
1. Provide non-attended automatic elevator facilities Monday through Friday,
except holidays, from 6:00 a.m. to 10:00 p.m., and have one elevator available
for Lessee's use at all other times.
2. On Monday through Friday, except holidays from 6:00 a.m. to 12:00 a.m. (and
other times at a reasonable hourly additional charge fixed by Lessor), ventilate
the Premises and furnish air conditioning or heating on such days and hours,
when in the reasonable judgment of Lessor it may be required for the comfortable
occupancy of the Premises. The air conditioning system achieves maximum cooling
when the window coverings are extended to the full length of the window opening
and adjusted to a 45 degree angle upwards. Lessor will not be responsible for
room temperatures if Lessee does not keep all window coverings in the Premises
extended to the full length of the window opening and - adjusted to a 45 degree
angle upwards whenever the system is in operation. Lessee agrees to cooperate
fully at all times with Lessor, and to abide by all reasonable regulations and
requirements which Lessor may prescribe for the proper function and protection
of said air conditioning system. Lessee agrees not to connect any apparatus,
device, conduit or pipe to the chilled and hot water air conditioning supply
lines of the Building. Lessee further agrees that neither Lessee nor its
servants, employees, agents, visitors, licensees or contractors shall at any
time enter the mechanical installations or facilities of the Building or the
Development or adjust, tamper with, touch or otherwise in any manner affect said
installations or facilities. The cost of maintenance and service calls to adjust
and regulate the air conditioning system will be charged to Lessee if the need
for maintenance work results from either Lessee's adjustment of room thermostats
or Lessee's failure to comply with its obligations under this Exhibit, including
keeping window coverings extended to the full length of the window opening and
adjusted to a 45 degree angle upwards. Such work will be charged at hourly rates
equal to then-current journeyman's wages for air conditioning mechanics.
3. Lessor will make available to the Premises, 24 hours per day, seven days a
week, electric current as required by the Building standard office lighting and
fractional horsepower office business machines including copiers, personal
computer and word processing equipment in an amount not to exceed six (6) watts
per square foot per normal business day. Lessee agrees, should its electrical
installation or electrical consumption be in excess of the aforesaid quantity or
extend beyond normal business hours, to reimburse Lessor monthly for the
measured consumption at the average cost per kilowatt hour charged to the
building during the period. If a separate meter is not installed at Lessee's
cost, such excess cost will be established by an estimate agreed upon by Lessor
and Lessee, and if the parties fail to agree, such cost will be established by
an independent licensed engineer selected in Lessors reasonable discretion,
whose fee shall be shared equally be Lessor and Tenet. Lessee agrees not to use
any apparatus or device in, upon or about the Premises (other than standard
office business machines, personal computers and work processing equipment)
which may in any way increase the amount of such services usually furnished or
supplied to said Premises, and Lessee further agrees not to connect any
apparatus or device with wires, conduits or pipes, or other means by which such
services are supplied, for the purpose of using additional or unusual amounts of
such services without the written consent of Lessor. Should Lessee use the same
to excess, the refusal on part of Lessee to pay upon demand of Lessor the amount
established by Lessor for such excess charge will constitute a breach of the
obligation to pay rent under this Lease and will entitle Lessor to the rights
therein granted for such breach. Lessee's use of electric current will never
exceed the capacity of the feeders to the Building, or the risers or wiring
installation and Lessees will not install or use or permit the installation of
use of any computer or electronic data processing equipment in the Premises
(except standard office business machines, personal computers and word
processing equipment) without the prior written consent of Lessor.
4. Water will be available in public and for drinking and lavatory purposes
only, but if Lessee requires, uses or consumes water for any purpose in addition
to ordinary drinking and lavatory purposes, of which fact Lessee constitutes
30
<PAGE> 36
Lessor to be the sole judge, Lessor may install a water meter and thereby
measure Lessee's water consumption for all purposes. Lessee agrees to pay Lessor
for the cost of the meter and the cost of the installation thereof and
throughout the duration of Lessee's occupancy Lessee will keep said meter and
installation equipment in good working order and repair at Lessee's own cost and
expense, in default of which Lessor may cause such meter and equipment to be
replaced or repaired and collect the cost thereof from Lessee. Lessee agrees to
pay for water consumed, as shown on such meter, as and when bills and rendered,
and on default in making such payment, Lessor may pay such charges and collect
the same from Lessee. Any such costs or expenses incurred, or payments made by
Lessor for any of the reasons or purposes hereinabove stated will be deemed to
be additional rent payable by Lessee and collectible by Lessor as such.
5. Lessor will provide janitor service to the Premises, provided the same are
used exclusively as offices, and are kept reasonably in order by Lessee, and
unless otherwise agreed to by Lessor and Lessee no one other than persons
approved by Lessor shall be permitted to enter the Premises for such purposes.
If the Premises are not used exclusively as offices, they will be kept clean and
in order by Lessee, at Lessee's expense, and to the satisfaction of Lessor, and
by persons approved by Lessor. Lessee agrees to pay to Lessor the cost of
removal of any of Lessee's refuse and rubbish to the extend that the same
exceeds the refuse and rubbish usually attendant upon the use of the Premises as
offices.
6. Lessor reserves the right to stop service of the elevator, plumbing,
ventilation, air conditioning and electrical systems, when necessary, by reason
of accident or emergency or for repairs, alterations or improvements, when in
the judgment of Lessor such actions are desirable or necessary to be made, until
said repairs, alterations or improvements shall have been completed, and Lessor
will have no responsibility or liability for failure to supply elevator
facilities, plumbing, ventilating, air conditioning or electric service, when
prevented from so doing by strike or accident or by any cause beyond Lessor's
reasonable control, or by laws, rules orders, ordinances, directions,
regulations or by reason of the requirements of any federal, state, county or
municipal authority or failure of gas, oil or other suitable fuel supply or
inability by exercise of reasonable diligence to obtain gas, oil or other
suitable fuel supply. It is expressly understood and agreed that any covenants
on Lessor's part to furnish any services pursuant to any of the terms,
covenants, conditions, provisions or agreements of this Lease, or to perform any
act or thing for the benefit of Lessee, will not be deemed breached if Lessor is
unable to furnish or perform the same by virtue of a strike of labor trouble or
any other cause whatsoever beyond Lessor's control.
31
<PAGE> 37
"EXHIBIT G"
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE
Your cooperation in this matter is appreciated. Initially, the information
provided by you in the Hazardous Materials Disclosure Certificate is necessary
for the Lessor (identified below) to evaluate and finalize a lease agreement
with you as the Lessee. After a lease agreement is signed by you and the Lessor
(the "LEASE AGREEMENT"), on an annual basis in accordance with the provisions of
SECTION 29 of the signed LEASE AGREEMENT, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Lessor subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Lessor to defend itself or its lenders, partners or
representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed LEASE AGREEMENT. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
LESSOR: FOSTER ENTERPRISES
400 SO. EL CAMINO REAL, SUITE 1400
SAN MATEO, CALIFORNIA 94402
ATTEN:
---------------------------
PHONE: (650) 349-1244
Name of (Prospective)
Tenant:
-----------------------------------------------------------------------
Mailing
Address:
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Contact Person: Telephone Number:
---------------------- --------------------
Address of (Prospective)
Premises:
---------------------------------------------------------------------
Length of (Prospective) initial Term:
------------------------------------------
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without Limitation, principal products
processed, manufactured or assembled service and activities to be
provided Otherwise conducted. Existing tenants should describe any
proposed changes to on-going operations.
-----------------------------------------------------------------------
-----------------------------------------------------------------------
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
32
<PAGE> 38
2.1 Will any Hazardous Materials be used, generated, stored or disposed
of in, on, or about the Premises? Existing tenants should described
any Hazardous Materials which continue to be used, generated, stored
or disposed of in, on or about the Premises.
Wastes: Yes No
---- ----
Chemical Products: Yes No
---- ----
Other: Yes No
---- ----
If Yes, is marked please explain:
----------------------------------
-------------------------------------------------------------------
2.2 If Yes is marked in Section 2.1 attach a list of any Hazardous
Materials to be used, general, stored or disposed of in, on or about
the Premises, including the applicable hazard class and an estimate
of the quantities of such Hazardous Materials at any given time,
estimated annual throughput, the proposed location(s)) and method
of storage (excluding nominal amounts of ordinary household cleaners
and janitorial supplies which are not regulated by any Environmental
Laws); and the proposed location(s) and method of disposal for each
Hazardous Material, including, the estimated frequency, and the
proposed contractors or subcontractors. Existing tenants should
attach a list setting forth the information requested above and such
list should include actual data from on-going operations and the
identification of any variations in such information from the prior
years Certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel, petroleum,
or other Hazardous Materials in tanks or sumps proposed in, on or
about the Premises? Existing tenants should describe any such actual
or proposed activities.
Yes No
---- ----
If Yes, please explain:
-------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes No
---- ----
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe any new
reports filed.
Yes No
---- ----
If Yes, attach a copy of the most recent report filed.
33
<PAGE> 39
5. WASTE WATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
Storm drain? Sewer?
------ ------
Surface water? No wastewater or other wastes
discharged
------ ------
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
-------------------------------------------------------------------
-------------------------------------------------------------------
5.2 Will any such wastewater or waste be treated before discharge?
Yes No
---- ----
If Yes, describe the type of treatment proposed to be conducted.
Existing tenants should describe the actual treatment conducted.
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be used in
your company's operations in, on, or about the Premises that will
discharge into the air; and will such air emissions be monitored?
Existing tenants should indicate whether or not there are any such
air filtration systems or stacks in use in, on, or about the
Premises which discharge into the air and whether such air emissions
are being monitored.
Yes No
---- ----
If Yes, please describe:
------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
6.2 Do you propose to operate any of the following types of equipment,
or any other equipment requiring an air emissions permit? Existing
tenants should specify any such equipment being operated in, on or
about the Premises.
Spray booth(s): Incinerator(s):
------ ------
Dip tank(s): Other (Please describe):
------
Drying oven(s): No Equipment Requiring Air
------ Permits:
--------
If Yes, please describe:
-------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan") pursuant to
Fire Department or other governmental or regulatory
34
<PAGE> 40
agencies requirements? Existing tenants should indicate whether or
not a Management Plan is required and has been prepared.
Yes No
---- ----
If Yes, attach a copy of the Management Plan. Existing tenants
should attach a copy of any required updates to the Management Plan.
7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises
regulated under Proposition 65? Existing tenants should indicate
whether or not there are any new Hazardous Materials being so used
which are regulated under Proposition 65.
Yes No
---- ----
If Yes, please explain:
--------------------------------------------
-------------------------------------------------------------------
8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has your
company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees or has your company
received requests for information, notice or demand letters, or any
other inquires regarding its operations? Existing tenants should
indicate whether or not any such actions, orders or decrees have
been, or are in the process or being, undertaken or if any such
requests have been received.
Yes No
---- ----
If Yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders
or decrees and also describe any requests, notices or demands, and
attach a copy of all such documents. Existing tenants should
describe and attach a copy of any new actions, orders, decrees,
requests, notices or demands not already delivered to Lessor
pursuant to the provisions of SECTION 29 of the signed LEASE
AGREEMENT.
-------------------------------------------------------------------
-------------------------------------------------------------------
8.2 Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety
concern?
Yes No
---- ----
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other
documents related thereto as requested by Landlord. Existing tenants
should described and attach a copy of any new complaint(s),
cross-complaint(s), pleadings and other related documents not
already delivered to Lessor pursuant to the provisions of SECTION 29
of the signed Lease Agreement.
-------------------------------------------------------------------
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<PAGE> 41
8.3 Have there been any problems or complaints from adjacent tenants,
owners or other neighbors at your company's current facility with
regard to environmental or health and safety concerns? Existing
tenants should indicate whether or not there have been any such
problems or complaints from adjacent tenants, owners or other
neighbors at, about or near the Premises.
Yes No
---- ----
If yes, please describe. Existing tenants should describe any such
problems or complaints not already disclosed to Lessor under the
provisions of the signed Lease Agreement.
-------------------------------------------------------------------
9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses issued
to your company with respect to its proposed operations in, on or
about the Premises, including, without limitation, any wastewater
discharge permits, air emissions permits, and use permits or
approvals. Existing tenants should attach copies of any new permits
and licenses as well as any renewals of permits or licenses
previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Lessor in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of SECTION 29 of the Lease Agreement; and (C) that
Tenant/Lessee shall have and retain full and complete responsibility and
liability with respect to any of the Hazardous Materials disclosed in the HazMat
Certificate notwithstanding Lessor's/Tenant's receipt and/or approval of such
certificate. Lessee further agrees that none of the following described acts or
events shall be construed or otherwise interpreted as either (a) excusing,
diminishing or otherwise limiting Lessee from the requirement to fully and
faithfully perform its obligations under the Lease with respect to Hazardous
Materials, including, without limitation, any duty on Lessor to investigate or
otherwise verify the accuracy of the representations and statements made therein
or to ensure that Lesse is in compliance with all Environmental Laws; (i) the
delivery of such certificate, (ii) Lessor's review and approval of such
certificate, (iii) Lessor's failure to obtain such certificate from Lessee at
any time, or (iv) Lessor's actual or constructive knowledge of the types and
quantities of Hazardous Materials being used, stored, generated, disposed of or
transported on or about the Premises by Lessee or Lessee's Representatives.
Notwithstanding the foregoing or anything to the contrary contained herein, the
undersigned acknowledges and agrees that Lessor and it partners, lenders and
representatives may, and will rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof, of the
Lease Agreement.
I (print name) ______________________________________, acting with full
authority to bind the (proposed) Lessee and on behalf of the (proposed) Lessee,
certify, represent and warrant that the information contained in this
certificate is true and correct.
(PROSPECTIVE) TENANT:
By:
------------------------------------ INITIAL
-------
Title: /s/ PHC
---------------------------------
Date:
----------------------------------
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<PAGE> 42
EXHIBIT "H"
RULES AND REGULATIONS
A. GENERAL RULES AND REGULATIONS. The following rules and regulations govern the
use of the Building and the Development Common Areas. Lessee will be bound by
such rules and regulations and agrees to cause Lessee's Authorized users, its
employees, sublessees, assignees, contractors, suppliers, customers and invitees
to observe the same.
1. Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name or
notice maybe installed or displayed on any part of the outside or inside of the
Building or the Development without the prior written consent of Lessor. Lessor
will have the right to remove, at Lessees expense and without notice, any sign
installed or displayed in violation of this rule. All approved signs or
lettering on doors and walls are to be printed, painted, affixed or inscribed at
the expense of Lessee and under the direction of Lessor by a person or company
designated or approved by Lessor.
2. If Lessor objects in writing to any curtains, blinds, shades, screens or
hanging plants or other similar objects attached to or used in connection with
any window or door of the Premises, or placed on any windowsill, which is
visible from the exterior of the Premises, Lessee will immediately discontinued
such use. Lessee agrees not to place anything against or near glass partitions
of doors or windows which may appear unsightly from outside the Premises
including from within any interior common areas.
3. Lessee will not obstruct any sidewalks, halls, passages, exits, entrances,
elevators, escalators, or stairways of the Development. The halls, passages,
exits, entrances, elevators and stairways are not open to the general public,
but are open, subject to reasonable regulation, to Lessee's business invitees.
Lessor will in all cases retain the right to control and prevent access thereto
of all persons whose presence in the reasonable judgment of Lessor would be
prejudicial of the safety, character, reputation and interest of the Development
and its lessees, provided that nothing herein contained will be construed to
prevent such access to persons with whom any lessee normally deals in the
ordinary course of its business, unless such persons are engaged in illegal or
unlawful activities. No lessee and no employee or invitee of any lessee will go
on the roof of the Building.
4. Lessee will not obtain for use on the Premises ice, drinking water, food,
food vendors, beverage, towel or other similar services or accept barbering or
bootblacking service upon the Premises, except at such reasonable hours and
under such reasonable regulations as maybe fixed by Lessor. Lessor expressly
reserves the right to absolutely prohibit solicitation, canvassing, distribution
of handbills or any other written material, peddling, sales and displays of
products, goods and wares in all portions of the Development except as may be
expressly permitted under the Lease. Lessor reserves the right to restrict and
regulate the use of the common areas of the Development and Building by invitees
of lessees providing services to lessees on a periodic or daily basis including
food and beverage vendors. Such restrictions may include limitations on time,
place, manner and duration of access to a lessee's premises for such purposes.
Without limiting the foregoing, Lessor may require that such parties use service
elevators, halls, passageways and stairways for such purposes to preserve access
within the Building for lessees and the general public.
5. Lessor reserves the right to require lessee to periodically provide Lessor
with a written list of any and all business invitees which periodically or
regularly provide goods and services touch lessees at the premises. Lessor
reserves the right to preclude all vendors from entering or conducting business
within the Building and the Development if such vendors are not listed on a
lessee's list of requested vendors.
6. Lessor reserves the right to exclude from the Building between the hours of
6:00 p.m., and 8:00 a.m. the following business day, or such other hours as may
be established from time to time by Lessor, and on Sundays and legal holidays,
any person unless that person is known to the person or employee in charge of
the Building or has a pass or is properly identified. Lessee will be responsible
for all persons for whom it requests passes and will be liable to Lessor for all
acts of such persons. Lessor will not be liable for damages for any error with
regard to the admission to or exclusion from
37
<PAGE> 43
the Building of any person. Lessor reserves the right to prevent access to the
Building in case of invasion, mob, riot, public excitement or other commotion by
closing the doors or by other appropriate action.
7. The directory of the Building or the Development will be provided exclusively
for the display of the name and location of lessees only and Lessor reserves the
right to exclude any other names therefrom.
8. All cleaning and janitorial services for the Development and the Premises
will be provided exclusively through Lessor, and except with the written consent
of Lessor, no person or persons other than those approved by Lessor will be
employed by Lessee or permitted to enter the Development for the purpose of
cleaning the same. Lessee will not cause any unnecessary labor by carelessness
or indifference to the good order and cleanliness of the Premises.
9. Lessor will furnish Lessee, free of charge, with two keys to each door lock
in the Premises. Lessor may make a reasonable charge for any additional keys.
Lessee shall not make or have made additional keys, and Lessee shall not alter
any lock or install any new additional lock or bolt on any door of the Premises.
Lessee, upon the termination of its tenancy, will deliver to Lessor the keys to
all doors which have been furnished to Lessee, and in the event of loss of any
keys so furnished, will pay Lessor therefor.
10. If Lessee requires telegraphic, telephonic, burglar alarm, satellite dishes,
antennae or similar services, it will first obtain Lessor's approval, and comply
with, Lessor's reasonable rules and requirements applicable to such services,
which may include separate licensing by, and fees paid to, Lessor.
11. Freight elevator(s) will be available for use by all lessees in the
Building, subject to such reasonable scheduling as Lessor, in its discretion,
deems appropriate. No equipment, materials, furniture, packages, supplies,
merchandise or other property will be received in the Building or carried in the
elevators except between such hours and in such elevators as may be designated
by Lessor. Lessee's initial move in and subsequent deliveries of bulky times,
such as furniture, safes and similar items will, unless others agreed in writing
by Lessor, be made during the hours of 6:00 p.m. to 6:00 a.m. or on Saturday or
Sunday. Deliveries during normal office hours shall be limited to normal office
supplies and other small items. No deliveries will be made which impede or
interfere with other lessees or the operation of the Building.
12. Lessee will not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which is
allowed by law. Lessor will have the right to reasonably prescribe the weight,
size and position of all safes, heavy equipment, files, materials, furniture or
other property brought into the Building. Heavy objects will, if considered
necessary by Lessor, stand on such platforms as determined by Lessor to be
necessary to properly distribute the weight, which platforms will be provided at
Lessee's expense. Business machines and mechanical equipment belonging to
Lessee, which cause noise or vibration that may be transmitted to the structure
of the Building or to any space therein to such a degree as to be objectionable
to any lessees in the Building or Lessor, are to be placed and maintained by
Lessee, at Lessee's expense, on vibration eliminators or other devises
sufficient to eliminate noise or vibration. Lessee will be responsible for all
structural engineering required to determine structural load, as well as the
expense thereof. The person employed to move such equipment in or out of the
Building must be reasonably acceptable to Lessor. Lessor will not be responsible
for loss of, or damage to, any such equipment or other property from any cause,
and all damage done to the Building by maintaining or moving such equipment or
other property will repaired at the expense of Lessee.
13. Lessee will not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment. Lessee will not
use or permit to be used in the Premises any foul or noxious gas or substance,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Lessor or other occupants of the Building by reason of noise,
odors or vibrations, nor will Lessee bring into or keep in or about the Premises
any birds or animals.
14. Lessee will not use any method of heating or air conditioning other than
that supplied by Lessor without Lessor's prior written consent.
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<PAGE> 44
15. Lessee will not electricity, water or air conditioning and agrees to
cooperate fully with Lessor to assure the most effective operation of the
Building's heating and air conditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Lessee has actual notice, and
will refrain from attempting to adjust controls.
16. Lessor reserves the right, exercisable without notice and without liability
to Lessee, to change the name and street address of the Building. Without the
written consent of Lessor, Lessee will not use the name of the Building or the
Development in connection with or in promoting or advertising the business of
Lessee except as Lessee's address.
17. Lessee will close and lock the doors of its Premises and entirely shut off
all water faucets or other water apparatus, and lighting or gas before Lessee
and its employees leave the Premises. Lessee will be responsible for any damage
or injuries sustained by other lessees or occupants of the Building or by Lessor
for noncompliance with this rule.
18. The toilet rooms, toilets, urinals, wash bowls and other apparatus will not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from any violation of this rule will
be borne by the lessee who, or whose employees or invitees, break this rule.
Cleaning of equipment of any type is prohibited. Shaving is prohibited.
19. Lessee will not sell, or permit the sale at retail of newspapers, magazines,
periodicals, theater tickets or any other good or merchandise to the general
public in or on the Premises. Lessee will not use the Premises for any business
or activity other than that specifically provided for in this Lease. Lessee will
not conduct, nor permit to be conducted, either voluntarily or involuntarily,
and auction upon the Premises without first having obtained Lessor's prior
written consent, which Lessor may withhold in its sole and absolute discretion.
20. Lessee will not install any radio or television antenna, loudspeaker,
satellite dishes or other devices on the roof(s) or exterior walls of the
Building or the Development. Lessee will not interfere with radio or television
broadcasting or reception from or in the Development or elsewhere.
21. Except for the ordinary hanging of pictures and wall decorations, Lessee
will not mark, drive nails, screw or drill into the partitions, woodwork or
plaster or in any way deface the Premises or any part thereof, except in
accordance with the provisions of the Lease pertaining to alterations. Lessor
reserves the right to direct electricians as to where and how telephone and
telegraph wires are to be introduced to the Premises. Lessee will not cut or
bore holes for wires. Lessee will not affix any floor covering to the floor of
the Premises in any manner except as approved by Lessor. Lessee shall repair any
damage resulting from noncompliance with this rule.
22. Lessee will not install, maintain or operate upon the Premises any vending
machines without the written consent of Lessor.
23. Lessor reserves the right to exclude or expel from the Development any
person who, in Lessor's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules and Regulations of
the Building.
24. Lessee will store all its trash and garbage within its Premises or in other
facilities provided by Lessor. Lessee will not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All garbage and refuse disposal
is to be made on accordance with directions issued from time to time by Lessor.
25. The Premises will not be used for lodging or for the storage of merchandise
held for sale to the general public, or for lodging or for manufacturing of any
kind, nor shall the Premises be used for any improper, immoral or objectionable
purpose. No cooking will be done or permitted on the Premises without Lessor's
consent, except the use by Lessee of Underwriters' Laboratory approved equipment
for brewing coffee, tea, hot chocolate and similar beverages shall be permitted,
and the use of a microwave oven for employees use will be permitted, provided
that such equipment and use is in accordance with all applicable federal, state,
county and city laws, codes, ordinances, rules and regulations.
26. Neither Lessee nor any of its employees, agents, customers and invitees may
use in any space or in the public halls of the Building or the Development any
hand truck except those equipped with rubber tires and side guards or such other
39
<PAGE> 45
material-handling equipment as Lessor may approve. Lessee will not bring any
other vehicles of any kind into the Building.
27. Lessee agrees to comply with all safety, fire protection and evacuation
procedures and regulations established by Lessor or any governmental agency.
28. Lessee assume any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
29. To the extent Lessor reasonably deems it necessary to exercise exclusive
control over any portions of the Common Areas for the mutual benefit of the
lessees in the Building or the Development, Lessor may do so subject to
reasonable, non-discriminatory additional rules and regulations.
30. Lessor prohibits smoking in the Building.
31. Lessee's requirements will be attended to only upon appropriate application
to Lessor's asset management office for the Development by an authorized
individual of Lessee. Employees of Lessor will not perform any work or do
anything outside of their regular duties unless under special instructions form
Lessor, and no employee of Lessor will admit any person (Lessee of otherwise) to
any office without specific instructions from Lessor.
32. These Rules and Regulations are in addition to, and will not be construed to
in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease. Lessor may waive any one or more of
these Rules and Regulations for the benefit of Lessee of any other lessee, but
no such waiver by Lessor will be construed as a waiver of such Rules and
Regulations in favor of Lessee or any other lessee, nor prevent Lessor from
thereafter enforcing any such Rules and Regulations against any or all of the
lessees of the Development.
33. Lessor reserves the right to make such other and reasonable and
non-discriminatory Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and cleanliness of the
Development and for the preservation of good order therein. Lessee agrees to
abide by all such Rules and Regulations herein above stated and any additional
reasonable and non-discriminatory rules and regulations which are adopted.
Lessee is responsible for the observance of all the foregoing rules by Lessee's
employees, agents, clients, customers, invitees and guests.
B. PARKING RULES AND REGULATIONS. The following rules and regulations govern the
use of the parking facilities which serve the Building. Lessee will be bound by
such rules and regulations and agrees to cause its employees, sublessees,
assignees, contractors, suppliers, customers and invitees to observe the same:
1. Lessee will not permit or allow any vehicles that belong to or are controlled
by Lessee or Lessee's employees, sublessees, customers or invitees to be loaded,
unloaded or parked in areas other than those designated by Lessor for such
activities. No vehicles are to be left in the parking areas overnight and no
vehicles are to be parked in the parking areas other than normally sized
passenger automobiles, motorcycle and pick-up trucks. No extended term storage
of vehicles is permitted.
2. Vehicles must be parked entirely within painted stall lines of a single
parking stall.
3. All directional signs and arrows must be observed.
4. The speed limit within all parking areas shall be five (5) miles per hour.
5. Parking is prohibited: (a) in areas not striped for parking; (b) in aisles or
on ramps; (c) where "no parking" signs are posted; (d) in cross-hatched areas;
and (e) in such other areas as may be designated from time to time by Lessor or
Lessor's parking operator.
6. Lessor reserves the right, without cost or liability to Lessor, to tow any
vehicle if such vehicle's audio theft alarm system remains engaged for an
unreasonable period of time.
40
<PAGE> 46
7. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.
8. Lessor may refuse to permit any person to park in the parking facilities who
violates these rules with unreasonable frequency, and any violation of these
rules shall subject the violator's car to removal, at such car owner's expense.
Lessee agrees to use its best efforts to acquaint its employees, sublessees,
assignees, contractors, suppliers, customers and invitees with these parking
provisions, rules and regulations.
9. All damage or loss claimed to be the responsibility of Lessor must be
reported, itemized in writing and delivered to the management office within ten
(10) days after any claimed damage of loss occurs. Any claim not so made is
waived. Lessor is not responsible for damage by water or fire, or for the acts
or omission of other, of for articles left in vehicles. In any event, the total
liability of Lessor, if any, is limited to Two Hundred Fifty Dollars ($250.00)
for all damages of loss to any car. Lessor is not responsible for loss of use.
10. Lessor reserves the right, without cost or liability to Lessor, to tow any
vehicles which are used or packed in violation of these rules and regulations.
11. Lessor reserves the right from time to time to modify and/or adopt such
other reasonable and non-discriminatory rules and regulations for the parking
facilities as it deems reasonably necessary for the operation of the parking
facilities.
41
<PAGE> 47
EXHIBIT "I"
PARKING LICENSE
TO THE LEASE, WINCHESTER MALL BUILDING BETWEEN FOSTER ENTERPRISES, LESSOR AND
XCARE.NET, LESSEE.
Foster Enterprises, (herein called "Licensor") and Xcare.net (herein called
"Licensee") have executed simultaneously with this Parking License a Lease on
certain office space in the Winchester Mall Building located in the City of
Santa Clara and in the County of Santa Clara. In consideration of mutual
covenants, Licensor and Licensee agree as follows:
1. Licensor hereby grants a License to Licensee for the use by Licensee of
six (6) reserved and thirteen (13) non-reserved parking spaces located adjacent
to said Premises upon the terms and conditions of this Parking License.
2. The term of this License shall commence on March 1, 2000 and shall
continue automatically from month to month thereafter until terminated by
either party upon 30 days prior written notice.
3. The rental shall be $N/A per month per non reserved parking space.
Rent shall be payable in advance and without notice. The first monthly payment
shall be due on N/A and subsequently monthly payments shall be due on the first
day of each succeeding month until the License is terminated. Tenant agrees
that Lessor shall have the right in its sole discretion to increase the
aforedescribed rental rate for said parking spaces upon 30 day notice.
4. Licensee shall be entitled to designate use of its parking spaces to
specific individuals employed by it, but Licensee shall remain responsible for
all obligations to pay rent or to otherwise perform under this License. Licensee
shall have no right to assign this License EXCEPT IN THE EVENT OF AN ASSIGNMENT
OR SUBLEASE OF THE LEASE, and any attempt to do so shall make said License null
and void. Licensee agrees to provide Licensor upon request at the commencement
of this License with a listing of all vehicles given parking space designations
made by it, including names, vehicle models and colors, and license plate
numbers. Licensee shall provide Licensor promptly with revised listing of such
descriptions upon all changes to the vehicles on their parking space by users
of the spaces licensed to Licensee. Notwithstanding Licensee's obligation of
enforcement of such terms, Licensor shall have the right to directly ban any of
Licensee's designees from further use of any of the parking spaces for
violations of the terms of this License.
5. Use of the parking spaces and facilities shall be subject to the
following rules:
5.1 Designated users of parking spaces shall approach and leave the
parking facility and/or parking lots with due care for pedestrians, other
moving or parked vehicles, and doors, fences and other improvements in the
parking facility. Licensee will adhere to all posted speed limits.
5.2 Designated users of parking spaces shall park only in spaces
designated by Licensor as authorized spaces for the portion of the complex or
building License occupies. Licensee shall not park in parking spaces designated
specifically for the parts of the complex, visitors spaces, or handicapped or
other specially designated spaces except as they apply to Licensee's needs.
5.3 Designated users of parking spaces shall observe any special hours
of opening, closing and non-use of the parking facilities when closing are
necessitated for repairs, cleanings and rehabilitation's.
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<PAGE> 48
6. Licensee has deposited with Licensor the sum of $N/A as security for the
full and faithful performance by Licensee of all the terms, covenants and
conditions of the License to be performed by Licensee. If License defaults with
respect to any provision of the License, Licensor may use, apply or retain all
or any part of this security deposit for the payment of any rent or other sum
due hereunder or to compensate Licensor for any loss or damage Licensor suffers
by reason of Licensee's default, and said security deposit shall not be
considered as liquidated damages. Licensee waives all claims to interest on
such deposit. In the event of termination of Licensor's interest in this
License, Licensor shall transfer the deposit to its successor in interest.
Licensee agrees that thereupon Licensor shall have no further liability to
return or account for the deposit.
LESSOR: LESSEE:
By: By: [ILLEGIBLE]
----------------------------- ----------------------------
Title: Title: Sr. VP Finance & CFO
-------------------------- -------------------------
43
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