<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 24, 1999
REGISTRATION STATEMENT NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
FIREPOND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7389 41-1462409
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
890 WINTER STREET
WALTHAM, MASSACHUSETTS 02451
(781) 487-8400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
------------------------
KLAUS P. BESIER
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
FIREPOND, INC.
890 WINTER STREET
WALTHAM, MASSACHUSETTS 02451
(781) 487-8400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
JOHN B. STEELE, ESQ. PATRICK J. RONDEAU, ESQ.
MCDERMOTT, WILL & EMERY HALE AND DORR LLP
28 STATE STREET 60 STATE STREET
BOSTON, MASSACHUSETTS 02109-1775 BOSTON, MASSACHUSETTS 02109-1803
(617) 535-4000 (617) 526-6000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
The sole purpose of this Amendment No. 1 to Form S-1 is to file the
exhibits filed with and attached to this Amendment No. 1.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses payable by us in
connection with the offering (excluding underwriting discounts and commissions):
<TABLE>
<CAPTION>
NATURE OF EXPENSE AMOUNT
- ----------------- -------
<S> <C>
SEC Registration Fee........................................ $20,850
NASD Filing Fee............................................. 8,000
Nasdaq National Market Listing Fee.......................... *
Accounting Fees and Expenses................................ *
Legal Fees and Expenses..................................... *
Printing Expenses........................................... *
Blue Sky Qualification Fees and Expenses.................... *
Transfer Agent's Fee........................................ *
Miscellaneous............................................... *
-------
Total....................................................... *
=======
</TABLE>
- ------------
* To be completed by amendment.
The amounts set forth above, except for the Securities and Exchange
Commission, National Association of Securities Dealers, Inc. and Nasdaq National
Market fees, are in each case estimated.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
In accordance with Section 145 of the Delaware General Corporation Law,
Article VII of our amended and restated certificate of incorporation provides
that no director of FirePond be personally liable to FirePond, its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (1) for any breach of the director's duty of loyalty to FirePond or
its stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) in respect of unlawful
dividend payments or stock redemptions or repurchases, or (4) for any
transaction from which the director derived an improper personal benefit. In
addition, the first amended and restated certificate of incorporation provides
that if the Delaware General Corporation Law is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
Article V of our amended and restated by-laws provides for indemnification
by FirePond of its officers and certain non-officer employees under certain
circumstances against expenses, including attorneys fees, judgments, fines and
amounts paid in settlement, reasonably incurred in connection with the defense
or settlement of any threatened, pending or completed legal proceeding in which
any such person is involved by reason of the fact that such person is or was an
officer or employee of the registrant if such person acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of FirePond, and, with respect to criminal actions or proceedings, if
such person had no reasonable cause to believe his or her conduct was unlawful.
Under Section 7 of the underwriting agreement to be filed as Exhibit 1.1
hereto, the underwriters have agreed to indemnify, under certain conditions,
FirePond, its directors, certain officers and persons who control FirePond
within the meaning of the Securities Act against certain liabilities.
II-1
<PAGE> 3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Set forth in chronological order below is information regarding the number
of shares of capital stock issued by the Registrant during the past three years.
Further included is the consideration, if any, received by the Registrant for
such shares, and information relating to the section of the Securities Act or
rule of the Securities and Exchange Commission under which exemption from
registration was claimed.
1. An aggregate of 837,776 shares of Series A preferred stock was issued in
a private placement in May 1997 to investment funds associated with
General Atlantic. In July 1997, an aggregate of 3,351,104 additional
shares of Series A preferred stock were issued to investment funds
associated with General Atlantic to account for a 5-for-1 stock split.
The Series A preferred stock is convertible into 2,792,587 shares of
common stock. The consideration received for such shares was
$11,000,000.
2. Warrants to purchase an aggregate of 190,438 shares of Series B
preferred stock (which are convertible into 634,794 shares of common
stock) were issued in a private placement in May 1997 to investment
funds associated with General Atlantic. The consideration received for
such warrants was $1,000.
3. An aggregate of 570,342 shares of Series C preferred stock (which are
convertible into 380,228 shares of common stock) was issued in a private
placement in July 1997 to Ramsey/Bierne Associates Incorporated and Ori
Sasson, pursuant to a Stock Purchase Agreement. The consideration
received for such shares was $1,500,000.
4. An aggregate of 100,000 shares of Series D preferred stock was issued in
a private placement in October 1997 to investment funds associated with
General Atlantic pursuant to a Stock Purchase Agreement. The
consideration received for such shares was $10,000,000. The shares of
Series D preferred stock were exchanged for 3,802,281 shares of Series E
preferred stock in April 1998.
5. An aggregate of 86,061 shares of common stock was issued in a private
placement in September 1998 to Loek van den Boog, a private investor.
The consideration received for such shares was $339,509.
6. An aggregate of 7,604,563 shares of Series E preferred stock was issued
in a private placement in April 1998 to investment funds associated with
General Atlantic pursuant to a Stock Purchase Agreement. The
consideration received for such shares was $10,000,000 and the exchange
of all of the outstanding shares of Series D preferred stock. These
shares of Series E preferred stock were exchanged for an equivalent
number of shares of Series G preferred stock in February 1999.
7. An aggregate of 6,734,008 shares of Series F preferred stock (which are
convertible into shares of common stock) was issued in a
private placement in February 1999 to investment funds associated with
Technology Crossover Ventures, General Atlantic and Lehman Brothers,
pursuant to a Stock Purchase Agreement. The consideration received for
such shares was $20,000,000.
8. Warrants to purchase an aggregate of 673,401 shares of Series F
preferred stock (which are convertible into shares of common
stock) were issued in a private placement in February 1999 to investment
funds associated with Technology Crossover Ventures, General Atlantic
and Lehman Brothers. The consideration received for such warrants was
$1,000.
9. An aggregate of 7,604,563 shares of Series G preferred stock (which are
convertible into 5,069,709 shares of common stock) was issued in
exchange for the outstanding shares of Series E preferred stock in
February 1999 to investment funds associated with General Atlantic
pursuant to a Stock Exchange Agreement.
10. An aggregate of 33,334 shares of common stock was issued in a private
placement in September 1999 to Edwin B. Lange, our Senior Vice
President of North American Sales. The consideration received for such
shares was $148,500.
11. From May 20, 1997 to October 31, 1999, FirePond granted stock options
to purchase an aggregate of 9,019,723 shares of common stock to
directors, employees and consultants with exercise prices ranging from
$3.95 to $7.22 per share pursuant to FirePond's 1997 Stock Option Plan.
As of October 31, 1999, 57,736 shares of common stock have been issued
upon exercise of options pursuant to Firepond's 1997 Stock Option Plan.
II-2
<PAGE> 4
12. Warrants to purchase an aggregate of 304,900 shares of common stock
were issued in private placement transactions in October 1999 to a
customer and strategic partners with an exercise price of $7.22 per
share.
13. Warrants to purchase an aggregate of 360,000 shares of common stock
were issued in a private placement transaction in November 1999 to
lenders, including investment funds affiliated with General Atlantic
Partners and Technology Crossover Ventures, with an exercise price of
$5.25 per share.
No underwriters were used in connection with these sales and issuances. The
sales and issuances of these securities were exempt from registration under the
Securities Act pursuant to Rule 701 promulgated thereunder on the basis that
these securities were offered and sold either pursuant to a written compensatory
benefit plan or pursuant to written contracts relating to compensation, as
provided by Rule 701, or pursuant to Section 4(2) of the Securities Act on the
basis that the transactions did not involve a public offering.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement.
*3.1 Certificate of Incorporation of the Registrant.
*3.2 Form of First Amended and Restated Certificate of
Incorporation of the Registrant (to be filed prior to the
effectiveness of the offering).
*3.3 Form of Second Amended and Restated Certificate of
Incorporation of the Registrant (to be filed following the
consummation of this offering).
*3.4 By-laws of the Registrant.
*3.5 Form of First Amended and Restated By-laws of the Registrant
(to be effective upon consummation of the offering).
*4.1 Specimen certificate for shares of common stock, $.01 par
value, of the Registrant.
*5.1 Opinion of McDermott, Will & Emery as to the validity of the
securities being offered.
**10.1 Amended and Restated Registration Rights Agreement, dated
February 23, 1999, between the Registrant and the
Stockholders named therein.
*10.2 Amended and Restated 1997 Stock Option Plan of the
Registrant.
*10.3 1999 Stock Option and Grant Plan of the Registrant.
*10.4 1999 Director Plan of the Registrant.
**10.5 Lease Agreement between Petrie Development Corp. and the
Registrant, dated as of August 11, 1998.
**10.6 Lease of 890 Winter Street, Waltham, Massachusetts between
FirePond, Inc., as Tenant, and 890 Winter Street, L.L.C., as
Landlord dated as of March 25, 1999.
10.7 Consulting Agreement between the Registrant and Soft OS,
Inc. dated January 23, 1999.
+10.8 Software License Agreement between the Registrant and
Silverstream Software Inc. dated as of March 18, 1999.
10.9 Loan and Security Agreement between Registrant and Greyrock
Business Credit Company dated as of July 31, 1998.
10.9.1 First Amendment to Loan and Security Agreement between
Registrant and Greyrock Business Credit Company dated June
24, 1999.
10.9.2 Second Amendment to Loan and Security Agreement between
Registrant and Greyrock Business Credit Company dated as of
July 8, 1999.
10.9.3 Third Amendment to Loan and Security Agreement between
Registrant and Greyrock Business Credit Company dated as of
September 28, 1999.
**10.10 Employment Agreement dated April 2, 1998 between Registrant
and Klaus P. Besier.
**10.11 Offer Letter dated May 11, 1998 between Registrant and
Graham S. Williams.
**10.12 Offer Letter dated October 21, 1998 between Registrant and
Ilya G. Gorelik.
**10.13 Offer Letter dated April 24, 1998 between Registrant and
Steven J. Waters.
**10.14 Offer Letter dated December 11, 1998 between Registrant and
Paul K. McDermott.
10.15 Product Use and General Services Agreement between the
Registrant and General Motors dated as of August 1, 1994.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<C> <S>
+10.15.1 Amendment to Product Use and General Services Agreement
between Registrant and General Motors Corporation dated as
of June 26, 1998.
+10.15.2 Purchase Order between Registrant and General Motors
Corporation dated as of February 3, 1999.
+10.15.3 Amendment to Product Use and General Services Agreement
between Registrant and General Motors Corporation dated as
of February 24, 1999.
+10.16 Signature Plus Software License Agreement between the
Registrant and BCBSM, Inc. dated as of December 18, 1998.
10.17 Sublease between Registrant and Dataworks Corporation dated
as of November 2, 1998.
10.17.1 Addendum to Sublease Agreement between Registrant and
Dataworks Corporation dated November 2, 1998.
10.18 Sublease Agreement between Registrant and International
Poison Center Consortium, Inc. dated as of December 8, 1998.
**21.1 Subsidiaries
*23.1 Consent of McDermott, Will & Emery (included in Exhibit 5.1
hereto).
**23.2 Consent of Arthur Andersen LLP.
**23.3 Consent of Deloitte & Touche LLP.
**24.1 Powers of Attorney (included on page II-5).
**27.1 Financial Data Schedule.
</TABLE>
- ------------
* To be filed by amendment to this Registration Statement.
** Previously Filed.
+ Confidential treatment has been requested for certain portions of this
Exhibit. The confidential redacted information has been filed separately with
the Securities and Exchange Commission.
(b) Consolidated Financial Statement Schedules
All schedules have been omitted because they are not required or because
the required information is given in the Consolidated Financial Statements or
Notes to those statements.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Waltham, Commonwealth of Massachusetts, on November 24, 1999.
FIREPOND, INC.
By: /s/ THOMAS F. CARRETTA
------------------------------------
Thomas F. Carretta
Secretary and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman, President, Chief November 24, 1999
- --------------------------------------------------- Executive Officer and
Klaus P. Besier Director (Principal Executive
Officer)
* Chief Financial Officer and November 24, 1999
- --------------------------------------------------- Vice President of Finance and
Paul K. McDermott Administration (Principal
Financial Officer and
Principal Accounting Officer)
* Director November 24, 1999
- ---------------------------------------------------
Paul R. Butare
* Director November 24, 1999
- ---------------------------------------------------
J. Michael Cline
* Director November 24, 1999
- ---------------------------------------------------
William O. Grabe
By: /s/ THOMAS F. CARRETTA
----------------------------------------------
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------- -------------------
<C> <S>
*1.1 Form of Underwriting Agreement.
*3.1 Certificate of Incorporation of the Registrant.
*3.2 Form of First Amended and Restated Certificate of
Incorporation of the Registrant (to be filed prior to the
effectiveness of the offering).
*3.3 Form of Second Amended and Restated Certificate of
Incorporation of the Registrant (to be filed following the
consummation of this offering).
*3.4 By-laws of the Registrant.
*3.5 Form of First Amended and Restated By-laws of the Registrant
(to be effective upon consummation of the offering).
*4.1 Specimen certificate for shares of common stock, $.01 par
value, of the Registrant.
*5.1 Opinion of McDermott, Will & Emery as to the validity of the
securities being offered.
**10.1 Amended and Restated Registration Rights Agreement, dated
February 23, 1999, between the Registrant and the
Stockholders named therein.
*10.2 Amended and Restated 1997 Stock Option Plan of the
Registrant.
*10.3 1999 Stock Option and Grant Plan of the Registrant.
*10.4 1999 Director Plan of the Registrant.
**10.5 Lease Agreement between Petrie Development Corp. and the
Registrant, dated as of August 11, 1998.
**10.6 Lease of 890 Winter Street, Waltham, Massachusetts between
FirePond, Inc., as Tenant, and 890 Winter Street, L.L.C., as
Landlord dated as of March 25, 1999.
10.7 Consulting Agreement between the Registrant and Soft OS,
Inc. dated January 23, 1999.
+10.8 Software License Agreement between the Registrant and
Silverstream Software, Inc. dated as of March 18, 1999.
10.9 Loan and Security Agreement between Registrant and Greyrock
Business Credit Company dated as of July 31, 1998.
10.9.1 First Amendment to the Loan and Security Agreement between
the Registrant and Greyrock Business Credit Company dated
June 24, 1999.
10.9.2 Second Amendment to Loan and Security Agreement between
Registrant and Greyrock Business Credit Company dated as of
July 8, 1999.
10.9.3 Third Amendment to Loan and Security Agreement between
Registrant and Greyrock Business Credit Company dated as of
September 28, 1999.
**10.10 Employment Agreement dated April 2, 1998 between Registrant
and Klaus P. Besier.
**10.11 Offer Letter dated May 11, 1999 between Registrant and
Graham S. Williams.
**10.12 Offer Letter dated October 21, 1998 between Registrant and
Ilya G. Gorelik.
**10.13 Offer Letter dated April 24, 1998 between Registrant and
Steven J. Waters.
**10.14 Offer Letter dated December 11, 1998 between Registrant and
Paul K. McDermott.
10.15 Product Use and General Services Agreement between the
Registrant and General Motors dated as of August 1, 1994.
+10.15.1 Amendment to Product Use and General Services Agreement
between Registrant and General Motors Corporation dated as
of June 26, 1998.
+10.15.2 Purchase Order between Registrant and General Motors
Corporation dated as of February 3, 1999.
+10.15.3 Amendment to Product Use and General Services Agreement
between Registrant and General Motors Corporation dated as
of February 24, 1999.
+10.16 Signature Plus Software License Agreement between the
Registrant and BCBSM, Inc. dated as of December 18, 1998.
10.17 Sublease between Registrant and Dataworks Corporation dated
as of November 2, 1998.
10.17.1 Addendum to Sublease Agreement between Registrant and
Dataworks Corporation dated as of November 2, 1998.
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------- -------------------
<C> <S>
10.18 Sublease Agreement between Registrant and International
Poison Center Consortium, Inc. dated as of December 8, 1998.
**21.1 Subsidiaries.
*23.1 Consent of McDermott, Will & Emery (included in Exhibit 5.1
hereto).
**23.2 Consent of Arthur Andersen LLP.
**23.3 Consent of Deloitte & Touche LLP.
**24.1 Powers of Attorney (included on page II-5).
**27.1 Financial Data Schedule.
</TABLE>
- ------------
* To be filed by amendment to this Registration Statement.
** Previously Filed.
+ Confidential treatment has been requested for certain portions of this
Exhibit. The confidential redacted information has been filed separately with
the Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 10.7
------------
CONSULTANT AGREEMENT
This is an Agreement between FirePond, Inc., a Minnesota corporation
having an office at 1983 Premier Drive, P.O. Box 4459, Mankato, Minnesota
56002-4459, and its successors and assigns (hereinafter FirePond) and SOFT OS,
INC., an PENNSYLVANIA CORPORATION, (hereinafter Consultant).
1. PURPOSE OF AGREEMENT
Consultant has furnished FirePond with contract software development
services. The purpose of this Agreement is to memorialize the terms and
conditions for contract services performed by Consultant for FirePond.
These terms govern the general conduct, including disclosure of
information and intellectual property rights. Consultant provides
general contract development and management for computer programming
services.
2. DEFINITIONS
The term "Consultant" in this Agreement shall include not only the
individual or company indicated in the first paragraph of this
Agreement but also any agents or employees of that individual or
company.
3. SERVICES
Consultant shall perform services as set forth in the attached
Schedule(s) or as otherwise directed by FirePond from time to time. All
Schedules must be signed by the Consultant and FirePond in order to
become a valid part of this Agreement.
4. TERM OF AGREEMENT
4.1 The term of this Agreement shall be three (3) years from 2/22,
1999, the date of this Agreement. The term is
non-cancelable.
4.2 This Agreement shall automatically renew for additional one
(1) year periods unless either party gives not less than one
hundred eighty (180) days advance written notice of
non-renewal. In the event the parties of such automatic
renewal, the parties agree the same terms and conditions shall
apply.
4.3 Paragraphs 2, 6, 7, 8, 10, and 12 of this Agreement, and the
Schedules, shall survive termination of the Agreement. Upon
termination of this Agreement, Consultant shall return all
materials to FirePond that have been received from, on behalf
of or in conjunction with FirePond during the term of the
Agreement.
5. COMPENSATION
Consultant's compensation shall be set forth on mutually agreed
schedules from time to time. Consultant agrees to keep records showing
all expenses incurred on behalf of FirePond with the purpose for such
expenditures. Reimbursement shall be made in accordance with such
Schedules(s).
6. CONSULTANT IS INDEPENDENT CONTRACTOR
Consultant is an independent contractor and is not an agent or employee
of FirePond. This means that Consultant will be responsible for
operation as an independent contractor and for meeting all legal
requirements applicable to Consultant. It also means that Consultant
will not be covered by any benefits or compensation plans provided for
FirePond employees.
7. CONFIDENTIALITY REQUIREMENT
7.1 FirePond software and all information exchanged by the parties
under this Agreement, specifically identified in writing as
confidential and proprietary or its equivalent and transmitted
by either party to the other shall be maintained in confidence
by the receiving party, and the receiving party shall
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 1 of 3
<PAGE> 2
EXHIBIT 10.7
------------
use the FirePond software and such information only as
authorized by FirePond. FirePond and Consultant agree to take
reasonable precautions to protect against unauthorized
disclosure of the FirePond software and such information to
third parties. Consultant shall make no attempts nor assist
any other parties in attempting to reverse compile,
disassemble, or otherwise reverse engineer the FirePond
software or any portion thereof, nor shall Consultant permit
others to do so.
7.2 Neither FirePond nor Consultant shall be obligated to maintain
any information received from the other party as confidential
and refrain from use, if:
7.2.1 the information was in the receiving party's
possession or was known to it prior to its receipt
from the disclosing party; or
7.2.2 the information is independently developed by the
receiving party without the utilization of such
confidential and proprietary information provided by
the disclosing party; or
7.2.3 the information is or becomes public knowledge
without the fault of the receiving party.
7.3 Consultant agrees to retain in confidence all information and
knowledge that is gained and transmitted to Consultant by
Microsoft or other FirePond suppliers via FirePond and that
has been designated as confidential and proprietary or its
equivalent or that, by the nature of the circumstances
surrounding the disclosure, should be treated in confidence,
and will make no use of such information and knowledge other
than for use authorized by FirePond. Consultant is not
obligated to maintain the information in confidence if the
information falls into the categories described in sections
7.2.1 through 7.2.3 of this Agreement.
7.4 Consultant shall immediately report any breaches of
confidentiality to FirePond of which it becomes aware.
Consultant shall also immediately report to FirePond any
person(s) who seek confidential and proprietary information or
its equivalent from Consultant or FirePond employees. Failure
to report these matters to FirePond are grounds for immediate
termination of this Agreement and FirePond may pursue any
legal remedies allowed by law against Consultant.
8. NON-COMPETE
See Schedule AGREEMENT REGARDING INVENTIONS, CONFIDENTIALITY
AND NON-COMPETITION. Schedule A shall apply to Consultant.
9. ASSIGNMENT AND LICENSE OF INTELLECTUAL PROPERTY RIGHTS See Schedule
AGREEMENT REGARDING INVENTIONS, CONFIDENTIALITY AND NON-COMPETITION.
Schedule A shall apply to Consultant.
10. INFORMATION OF CONSULTANT OR THIRD PARTIES
With respect to any information, knowledge, or data disclosed to
FirePond by Consultant, Consultant shall, to the best of its knowledge,
give FirePond advance written notice if the work Consultant is
performing infringes any patent, copyright, or trademark, or is based
on a trade secret or other confidential and proprietary information or
other intellectual property rights of Consultant or of others.
Consultant agrees that it shall not knowingly furnish or use any such
intellectual property rights in the performance of this Agreement, nor
shall Consultant knowingly use the trade secrets or other confidential
and proprietary information of Consultant or others, without the prior
written consent of FirePond.
11. COMPLIANCE WITH LAW
Each party agrees to comply with all applicable laws, rules, and
regulations, including the Foreign Corrupt Practices Act, in connection
with its activities under this Agreement and to obtain any and all
required governmental approvals, which are required for this Agreement.
This Agreement is subject to and conditioned upon compliance with the
U.S. Export Administration Act and the applicable regulations
thereunder and the export control laws and regulations of all the
relevant countries.
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 2 of 3
<PAGE> 3
EXHIBIT 10.7
------------
12. MISCELLANEOUS
12.1 The provisions of this Agreement and the attached Schedule
AGREEMENT REGARDING INVENTIONS, CONFIDENTIALITY AND
NON-COMPETITION shall be binding upon Consultant, and
Consultant's heirs, agents, employees, successors and
permitted assigns. This Agreement may be transferred or
assigned by FirePond but may not be assigned by Consultant
without FirePond's prior written consent. Consultant agrees to
have its agents and employees enter into the attached Schedule
AGREEMENT REGARDING INVENTIONS, CONFIDENTIALITY AND
NON-COMPETITION with FirePond in order to effect the
provisions of sections 7, 8, 9, 10 and 11 of this Agreement.
Consultant agrees to provide FirePond with copies of such
agreements signed by Consultant's agents and employees.
12.2 Consultant's performance of this Agreement may not be
subcontracted or assigned without the prior written consent of
FirePond.
12.3 Consultant may not assign any of its rights under this
Agreement without the prior written consent of FirePond.
Likewise, the Consultant will not obligate FirePond to third
parties without FirePond's prior written consent.
12.4 Consultant agrees to indemnify and hold harmless FirePond from
any disclosures or violations of this Agreement by an agent or
employee of Consultant.
12.5 This Agreement, including all Schedules, sets forth the entire
understanding of the parties. All prior and contemporaneous
discussions and agreements are merged into this Agreement.
12.6 Neither FirePond nor Consultant shall be deemed to be in
default of any provision of the Consultant Agreement for any
failure in performance resulting from acts or events beyond
the reasonable control of FirePond or Consultant.
12.7 In the event FirePond provides Consultant with any hardware or
software, it shall be identified in a Schedule. Such hardware
and software shall remain the property of FirePond. Under no
circumstances may this Agreement be interpreted as a sale or
rental of the hardware or software. Consultant covenants that
it will not transfer care or custody of the equipment to any
other party. Consultant agrees to return the software and
hardware to FirePond in good working order, given allowances
for normal use, at the end of the project identified in the
Schedule or upon request by FirePond. Consultant shall be
responsible for any loss or damage to the software or hardware
while it is in the possession of Consultant or Consultant's
agents or employees.
IN WITNESS WHEREOF, the parties have signed this Agreement by their
duly authorized representatives.
CONSULTANT - SOFT OS, INC. FIREPOND, INC.
By: Dimitry Dikman By: Thomas F. Carretta
------------------------------ ---------------------------------
Signature: /s/ Dimitry Dikman Signature: /s/ Thomas F. Carretta
----------------------- --------------------------
Title: President Title: Secretary and General Counsel
--------------------------- -----------------------------
Date: 2/22/99 Date: February 22, 1999
---------------------------- ------------------------------
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 3 of 3
<PAGE> 4
EXHIBIT 10.7
------------
Schedule A
A. The parties desire to engage SOFT OS as general contractor as set forth in
the Agreement. SOFT OS has certain subcontractors for development arrangements
and desires FirePond's consent. The purpose of the development arrangement is to
utilize the services of the SOFT OS subcontractor, EP Group, under the consent
and supervision of FirePond. EP Group shall receive a fee for the services from
SOFT OS as general contractor according to separate arrangement between SOFT OS
and EP Group.
B. SOFT OS shall contract with EP Group to:
o Provide FirePond at least fifty (50) qualified developers to expedite the
realization of FirePond's product line. FirePond shall be involved in
managing the development of the fifty developers;
o EP Group is to source the best developers from it's current staff of
between seventy and eighty developers that fit the skill set required for
the development of FirePond's product line. EP Group may at times be
required to recruit developers from alternate sources available to EP Group
in order to provide the developer with the right skill set for the
development of FirePond's product line.
C. EP Group may continue certain business under management distinct from the
persons servicing FirePond, and wind down certain other business of the EP
Group.
1. DEFINITIONS. For purposes of this Agreement, the following
capitalized terms shall have the meaning ascribed to them below:
CODE shall mean computer programming code. Unless otherwise specified,
Code shall include such computer programming code in both object code and source
code forms.
CONFIDENTIAL INFORMATION shall mean the Deliverables (including drafts
and associated materials) and any other information that FirePond or the EP
Group indicates to be confidential and FirePond or the EP Group acquires from
the other (as a result of disclosure by FirePond or the EP Group to the other,
access to FirePond or the EP Group facilities by the other, analysis of
FirePond's or the EP Group's products or enhancements, or otherwise) in
connection with the Services. However, Confidential Information does not include
information that rightly becomes public or that either party independently
develops or acquires without reliance on other Confidential Information of the
other.
DELIVERABLES shall mean all Code, Documentation, and other media,
materials, or other objects produced as a result of the Services or delivered by
EP Group in the course of providing the Services, and including the existing IP.
DOCUMENTATION shall mean any written materials that relate to
particular Code or the programming or development thereof, including materials
useful for design (for example, logic manuals, flow charts, and principles of
operation).
EP GROUP in this Agreement shall mean EPAm Systems, Ltd., a New Jersey
general partnership, EPAm Systems, Inc., a corporation, each of which have
offices at 475 Wall Street, Princeton, NJ 08540 (hereinafter "EPAM"), and
Effective Programming, a Belarus Company
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 1 of 8
<PAGE> 5
EXHIBIT 10.7
------------
and wholly owned subsidiary of EPAM with offices at 28 Kuibysheva Street, Suite
5, Minsk, Belarus and include any majority-owned or controlled subsidiary or
affiliate, of EP Group.
IP shall mean the intellectual property of the EP Group which exists on
the date of this Agreement and which is created after the date of this
Agreement. This definition includes, without limitation, all patents,
trademarks, service marks, trade names, and copyrights (including registrations,
letters patent, licenses, and applications pertaining thereto), technical and
descriptive materials relating to the acquisition, design, development, use, or
maintenance of computer code and program documentation and materials and all
other intellectual property rights, trade secrets, and other confidential
information, processes, and formulae used or otherwise necessary for the
ownership and use of the IP and the Services (the "Intellectual Property").
RESOURCES shall mean EP Group developers, programmers, data analysts or
related personnel, whether employed directly by EP Group or engaged as a
subcontractor.
SERVICES shall mean programming and development services relating to
existing and planned products and enhancements of FirePond or FirePond's
products, including both existing IP and IP provided by EP Group under this
Agreement.
TERM shall mean three (3) years from the date first above written.
2. SCOPE OF SERVICES; COMPENSATION. All Services provided by EP Group shall be
subject to this Agreement, and compensated by SOFT OS as general contractor,
unless otherwise agreed upon by both parties in writing.
EP Group are to provide at least FirePond fifty (50) qualified
developer Resources to expedite the realization of FirePond's product line,
including Code. EP Group and FirePond are to manage the development of the fifty
developer Resources. EP Group is to source the best developer Resources from
it's Resources of between seventy and eighty developers that fit the skill set
required for the development of FirePond's product line and Code. EP Group may
at times be required to recruit developers from alternate sources available to
EP Group in order to provide the developer Resource with the right skill set for
the development of FirePond's product line and Code. EP Group shall work
directly with FirePond's Executive Vice President of Research and Development to
facilitate and implement FirePond's product development plans. The Services may
be described more specifically in statements of work as a guide for the EP
Group, but it is the purpose of this Agreement to use EP Group Resources as
required by FirePond. Except of such subsidiaries or affiliates, EP Group may
not subcontract the Services without FirePond's prior written consent.
3. CONFIDENTIAL INFORMATION. Each party shall receive and hold all Confidential
Information in trust and confidence for the other. No party may use any
Confidential Information except as authorized by the other party under this
Agreement and only for the benefit of other party. Each party may disclose
Confidential Information only to those employees of the other party who have a
"need to know" the same in order to help EP Group perform the Services and who
are legally bound to maintain the confidentiality of the Confidential
Information.
Each party shall be responsible for the safekeeping of all materials
and media containing Confidential Information disclosed by one to the other
and shall account for such materials and media at the disclosing party's
request. EP Group will take reasonable safeguards to protect
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 2 of 8
<PAGE> 6
EXHIBIT 10.7
------------
FirePond's intellectual property rights in foreign jurisdictions to which
FirePond Software, Tools or Documentation or other confidential information
is used or distributed and EP Group will remain liable for any act or
omission that results in damages suffered or incurred by FirePond arising out
of or related to any failure by EP Group to take reasonable safeguards to
protect FirePond's intellectual property rights.
Upon termination of all or any relevant Services, each shall deliver to
the other or destroy (as requested by the discloser) all materials and media
containing Confidential Information (including all copies and extracts thereof).
The receiving party shall certify its compliance with such obligation at the
discloser's request.
The foregoing confidentiality obligations shall remain in effect until
five (5) years after any relevant Services are completed or terminated and the
receiving party has delivered to the discloser or destroyed the materials and
media containing Confidential Information associated with such Services.
4. RIGHTS IN DELIVERABLES. All Deliverables shall be deemed to be works
made for hire and shall belong exclusively to FirePond and its designees. If by
operation of law any of the Deliverables, including all related property rights,
including by way of example and not limitation, all copyrights and applications
therefor, industrial designs, moral rights, patents and applications therefor,
trade secrets, confidential information, intellectual property rights and all
other rights of whatever nature or kind, and are not owned in their entirety by
FirePond automatically upon their creation, then EP Group agrees to assign, and
hereby assigns, to FirePond and its designees the ownership of such
Deliverables, including all related property rights to the broadest extent
possible to vest ownership in FirePond.
FirePond may obtain and hold in its own name copyrights, registrations,
and other property protection that may be available in the Deliverables. EP
Group agrees to provide any assistance required to perfect such protection.
EP Group hereby further agrees and grants FirePond (as an exception to
the transfer and assignment provided in the first paragraph of this Section) an
irrevocable, nonexclusive, worldwide, royalty-free right and license to use,
execute, reproduce, display, perform, and distribute (internally and externally)
copies of, and prepare derivative works based upon, such IP materials, and the
right to authorize others to do any of the foregoing, and to in all other ways
exploit such IP. Such grant applies to any preexisting EP Group owned IP
materials or IP which EP Group may have the right to license to FirePond as part
of the Deliverables, provided they are owned or licensable without restriction
by EP Group. To the extent that preexisting materials owned or licensed by EP
Group are included in the Deliverables, EP Group shall identify any such
materials prior to commencement of the Services involving such materials. To the
extent of any such preexisting IP materials, EP Group represents and warrants
that there are no third party rights in and to such preexisting IP materials. EP
Group agrees to take sure further action and execute and deliver such further
agreements or other instruments as FirePond may reasonably request to give
effect to the ownership and license provisions of Section 4 of this Agreement.
It is understood that this Agreement does not grant either party any right or
interest with respect to the other party's business name trademark or trade
name, and neither party shall refer to this Agreement or the Services in
publicity or advertising without the other party's prior written consent.
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 3 of 8
<PAGE> 7
EXHIBIT 10.7
------------
Deliverables shall be defined on a Specification/Project Statement as
determined by FirePond and EP Group from time to time.
5. CONTINUED EP GROUP BUSINESS. EP Group has certain business clients,
including Samsung, Bally Shoes, Colgate and Fubu. These businesses comprise
custom software. EP Group shall continue to have the right to service these
business accounts for EP Group's benefit, and to dedicate EP Group Resources
currently working on these clients with the guidance and approval of FirePond as
regards assignment of the Resources and timing to address these services. The
intent of the parties is to optimize the allocation of EP Group Resources to
FirePond projects and business, minimize distraction of the EP Group whose
principal focus shall be the business of FirePond, and otherwise continue the on
going business of EP Group in an orderly fashion. It is the intent of the
parties that the noncompetitive custom computer services for these customers,
and additional customers desiring noncompetitive custom computer programming
services may be obtained from the EP Group. Where FirePond products suit these
customers' requirements, FirePond products shall first be offered to these
customers by the EP Group. The EP Group shall seek appropriate personnel to
continue such noncompetitive custom software business, to foster the growth of
the Continued EP Group Business and to assume the management currently serviced
by the EP Group. FirePond and its employees shall not materially participate in
the Continued EP Group Business, other than to manage such Resources for the
benefit of FirePond. FirePond shall have the right to solicit business from all
EP Group clients on FirePond's sole account without restriction during the term
of the Agreement. No new agreements will be entered into with these accounts
without the consent of FirePond. The income earned by EP Group for continued
business shall exclusively belong to EP Group EP Group shall remain independent,
but may not compete with FirePond as expressed in Section 8 hereof.
6. DISCONTINUED EP GROUP BUSINESS. It is understood that EP Group has
certain additional service agreements with third parties such as Parametric and
SAP. The nature of these service agreements present a conflict or competitive
interest or may not fit within the goals of FirePond. In consideration of the
consideration paid to EP Group by SOFT OS under this Agreement, EP Group agrees
to engage in a wind down strategy whereby EP Group shall cease rendering
services to all such third parties other than as set forth above in Section 5
"Continued EP Group Business". This disengagement shall be performed in such
manner as to satisfy all obligations to these customers under the terms of the
agreements with these respective customers. EP Resources shall be reallocated to
FirePond projects or "Continued EP and EPAM Business" at the earliest instance.
No new agreements will be entered into with these accounts without the consent
of FirePond.
7. ASSIGNMENT OF RESOURCES. EP Group shall maintain current business
arrangements with all EP Group Resources, subject to assignment of the contracts
of engagement of all EP Group Resources to either FirePond, Inc. or an entity or
entities controlled by FirePond, Inc. at FirePond's option. It is the
understanding of EP Group that FirePond may establish an entity to which EP
Group will assign and transfer Resources to such FirePond controlled entity in
Minsk, Belarus. It is the understanding of EP Group that FirePond wants a
portion of the fifty (50) Resource developers required to fulfill the terms of
the Agreement to be transferred to the United States. In this case all Resource
developers being transferred to the United States are to become employees of
FirePond. FirePond understands there is a legal process required by the
Immigration and Naturalization Services of the United States (INS) that may take
several months
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 4 of 8
<PAGE> 8
EXHIBIT 10.7
------------
to accomplish the transfer of employees from EP Group to FirePond. At the same
time some EP Group Resources have been transferred already (or have the rights
to be transferred) to the United States and have H-1 and L-1 Visas issued
through EP Group. It is understood that for some intermediate period such United
States based Resources may work as a FirePond subcontractors in the United
States via EP Group. Subcontractor Resources assigned within the United States
shall be invoiced by SOFT OS at the EP Group cost. EP Group shall prepare a
schedule of such Resources and cost therefore as soon as practicable. EP Group
shall use best efforts to recruit and maintain relationships with all Resources
after assignment and shall obtain agreements of exclusive service for a period
of two (2) years to FirePond or entities controlled by FirePond as contemplated
by this Agreement.
8. NONCOMPETITION.
(a) FIREPOND. For purposes of this Section 8 of this Agreement, all references
to the "FirePond" will be deemed to include the FirePond, Inc. and its direct or
indirect subsidiaries and affiliates.
(b) CONFLICTING PRODUCT. As used in this Agreement, a "Conflicting Product"
means any computer program, product, process, system, or service of any person
or organization other than FirePond, in existence or under development, which is
the same as, or similar to, or competes with a computer program, product,
process, system or service marketed or under development by the Company at any
time during the Term of this Agreement.
(c) CONFLICTING ORGANIZATION. As used in this Agreement, a "Conflicting
Organization" means any person or organization other than FirePond
which is engaged in or is about to become engaged in the design,
research, development, production, marketing, distribution, leasing,
licensing, selling, or servicing of a Conflicting Product, including
without limitation and by way of example only, the persons or
organizations listed on Schedule Conflicting Organizations, attached
hereto. To the extent an organization is listed which has multiple
divisions or business units, e.g., Oracle, Conflicting Organization
shall not include such non Sales Force Automation/technology enabled
customer relationship divisions or business units, provided no
assistance is offered or rendered by a party to any part of such
organization relating to Sales Force Automation/technology enabled
customer relationship products or services, e.g. by way of example, EP
Group may provide services to Oracle in non Sales Force Automation
applications. Directly compete means licensing or selling software and
services within the Sales Force Automation and technology enabled
customer relationship spaces as such terms are commonly known in the
software industry.
SOFT OS and the EP Group understand that the restrictions set forth in this
Section 8 are intended to protect FirePond's legitimate interest in its
Confidential Information, business interests, and customer
relationships and goodwill, and agree that such restrictions are
necessary, reasonable and appropriate for this purpose. To the extent
EP Group utilizes further subcontractor Resources, such persons shall
execute the attached Agreement Regarding Inventions, Confidentiality
and Non-competition.
Solely with respect to the EP Group, during the Term of this Agreement up to
termination of this Agreement and for one (1) year thereafter, (the
"Non-competition Periods"), EP and/or EPAM shall not, directly or
indirectly, whether as owner, partner, shareholder, director, officer,
consultant, agent, employee, co-venturer or otherwise: (a) participate
in, invest in, organize or assist in organizing, work for or contract
with, any Conflicting Organization; or (b) sell or assist in the
design, development, manufacture, licensing, sale or support of any
Conflicting Product, or (c) solicit FirePond customers, disparage
FirePond, or hire or solicit to hire any FirePond contractors
(including Resources who have been engaged by or have worked on any
FirePond developments,
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 5 of 8
<PAGE> 9
EXHIBIT 10.7
------------
products or services) or employees, whether for themselves or on behalf
of any third party, or (d) use FirePond confidential information. EP
Group understand that the restrictions set forth in this Section 8 are
intended to protect FirePond's legitimate interest in its Confidential
Information, business interests, and customer relationships and
goodwill, and agree that such restrictions are necessary, reasonable
and appropriate for this purpose.
Solely with respect to FirePond, during the Term of this Agreement up to
termination of this Agreement and for one (1) year thereafter, (the
"Non-competition Periods), EP Group and FirePond agree that FirePond
may pursue all business interests except:
1. FirePond shall not solicit to hire any EP Group employees or Resources,
or attempt or assist in diverting such persons to any third party.
2. FirePond shall not use EP Group confidential information not licensed
hereunder.
9. GENERAL PROVISIONS.
NO RESTRICTIONS. Each party warrants that it is and will remain free of any
obligations and restrictions that would interfere or be inconsistent with its
performance of this Agreement. EP Group shall defend, indemnify and hold
FirePond harmless from all claims and actions of third parties, including
reasonable attorney's fees, relating to the failure of EP Group to perform this
Agreement.
FORCE MAJEURE. Neither SOFT OS, FirePond nor EP Group shall be deemed to be in
default of any provision of this Agreement for any failure in performance
resulting from acts or events beyond the reasonable control of such person,
provided such interruption does not extend beyond ninety (90 days) in which case
either party may terminate this Agreement for convenience and all obligations
capable of proration shall be pro rated.
NO WAIVER. If any person should waive any breach of any provision of this
Agreement, it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision hereof.
SEVERABILITY. In the event that any provision of this Agreement is determined by
any court of competent jurisdiction to be unenforceable by reason of excessive
scope as to geographic, temporal or functional coverage, such provision will be
deemed to extend only over the maximum geographic, temporal and functional scope
as to which it may be enforceable.
AGREEMENT BINDING/ENTIRE AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. This Agreement and each Attachment or Schedule
hereto constitute the complete and exclusive statement of the agreement between
the parties, and all previous representations, discussions, and writings are
merged in, and superseded by, this Agreement. Only a writing signed by the
parties may modify this Agreement. The provisions of the base Agreement shall
prevail over any conflict with any Attachment or Schedule.
RIGHTS TO INJUNCTIVE RELIEF. The parties acknowledge that remedies at law may be
inadequate to provide the respective parties with full compensation in the event
of a material breach, and that the non-breaching party shall therefore be
entitled to seek injunctive relief as a remedy in the event of any such material
breach.
GOVERNING LAW. This Agreement shall be exclusively governed by and construed
under the law of the State of Minnesota without reference to its conflicts of
law principles. Except as
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 6 of 8
<PAGE> 10
EXHIBIT 10.7
------------
otherwise provided in the Agreement, any legal action or suit related to this
Agreement shall be brought exclusively in the courts of Minnesota. Both parties
agree that the courts of Minnesota are a convenient forum for the resolution of
disputes.
NOTICES. All notices or reports which are required or may be given pursuant to
this Agreement shall be in writing, delivered by mail, courier or personally and
shall be deemed duly given when delivered to the respective executive offices of
FirePond and EP Group at the addresses first set forth above.
INDEPENDENT CONTRACTORS. The relationship of FirePond and EP Group established
by this Agreement is that of independent sub contractors. Each party is free to
determine its own business practices, except as otherwise provided herein.
THIRD PARTY BENEFICIARIES. FirePond has subsidiaries and affiliates, including
without limitation for example FirePond (UK) Ltd., and may add additional
subsidiaries and affiliates during the Term. EP Group acknowledge and agree that
such subsidiaries and affiliates shall be third party beneficiaries of this
Agreement.
ASSIGNMENT. FirePond may assign this Agreement to any successor in FirePond's
interest, or to any subsidiary or affiliate.
SURVIVAL. The provisions of Sections 1, 3, 4, 5, 6, 8, and 9 shall survive
termination of this Agreement for any reason.
Acknowledged and Agreed
SOFT OS
/s/ Dimitry Dikman
- --------------------------
EPGROUP
EFFECTIVE PROGRAMMING
By: /s/ Arkadiy Dobkin
----------------------------------
Name: Arkadiy Dobkin
--------------------------------
Title: Partner and CEO
-------------------------------
Date: 1/23/99
--------------------------------
EPAM SYSTEMS, INC. AND
EPAM SYSTEMS, LTD.
By: /s/ Arkadiy Dobkin
----------------------------------
Name: Arkadiy Dobkin
--------------------------------
Title: Partner
-------------------------------
Date: 1/12/99
--------------------------------
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 7 of 8
<PAGE> 11
EXHIBIT 10.7
------------
FIREPOND INC.
By: /s/ Thomas F. Carretta
----------------------------------
Name: Thomas F. Carretta
--------------------------------
Title: General Counsel/Secretary
-------------------------------
Date: 1/12/99
--------------------------------
FIREPOND CONFIDENTIAL AND PROPRIETARY
Page 8 of 8
<PAGE> 1
EXHIBIT 10.8
SOFTWARE LICENSE AGREEMENT
This software License Agreement (the "Agreement") is dated as of March
18, 1999 (the "Agreement Date"), and is by and between SilverStream Software,
Inc., a Delaware corporation with its principal offices at One Burlington Woods
Drive, Burlington, MA 01803 ("Licensor") and Firepond, Inc., a Minnesota
corporation, with Its principal offices at 1983 Premier Drive, Mankato, MN 56001
("Licensee").
WHEREAS, Licensor has developed and/or otherwise possesses rights to
certain computer software which It refers to as "SilverStream Designer", and
WHEREAS, Licensee desires to license such software for integration by
Licensee in Its products In anticipation of the execution of a mutually
agreeable ISBN Business Partner Agreement between Licensor and Licensee (the
"ISV Agreement") and Licensor is willing to grant to Licensee a non-exclusive
license for such purposes on the terms and conditions set forth herein.
NOW, THEREFORE, In consideration of these premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 "LICENSED SOFTWARE" means the SilverStream Designer software
described in Exhibit A attached hereto In Source Code Form and In Object Code
Form,
1.2 "OBJECT CODE FORM" means a form of software code resulting
from the translation or processing of a computer program In Source Code Form by
a computer Into machine language or intermediate code, which thus Is in a form
that would not be convenient to human understanding of the program logic, but
which Is appropriate for execution or interpretation by a computer.
1.3 "FIREPOND PRODUCT" means the Firepond Workbench Product
described in Exhibit B attached hereto.
1.4 "SOURCE CODE FORM" Means a form In which a computer program's
logic is easily deduced by a human being with skill In the art, such as a
printed listing of the program or a form from which a printed listing can be
easily generated.
<PAGE> 2
2. LICENSES
2.1 Subject to the terms and conditions contained herein, Licensor
grants the Licensee, and the Licensee accepts, a worldwide, non-exclusive,
nontransferable right and license to use, copy, modify, enhance and prepare
derivative works of the Licensed Software in Source Code Form and Object Code
Form solely for the purpose of embedding the Licensed Software In the Firepond
Product and a worldwide, nonexclusive, nontransferable right and license (with
the right to sublicense provided the ISV Agreement is In effect) to distribute
the Licensed Software In Object Code Form only. Licensor also grants the
Licensee, and the Licensee accepts, a worldwide, nonexclusive, nontransferable
right and license (with the right to sublicense provided the ISV Agreement is in
effect) to use, copy, modify, enhance, prepare derivative works of and
distribute any user manuals and other documentation supplied by the Licensor,
2.2 Licensee agrees that the Licensed Software will not be sold or
priced separately or listed, or otherwise identified, on a price list as being
available on a standalone basis.
2.3 Licensee and its sublicensees and distributors will only
distribute the Licensed Software In Object Code Form pursuant to license
agreements that provides that the (i) sublicensee shall not disassemble or
reverse engineer the Licensed Software included with the Firepond Product, (ii)
sublicensee Is notified that portions of the software Included in the Firepond
Product have been licensed from Licensor; and (iii) provisions of such license
agreement inure to the benefit of Licensor where applicable.
2.4 In consideration of the licenses granted herein by Licensor,
Licensee shall pay to Licensor the fees and royalties. and purchase the update
and maintenance services, as provided in the ISV Agreement.
2.5 Licensee agrees that the Licensed Software and all derivative
works thereof shall be used only with the Firepond Product in accordance with
the terms of the ISV agreement.
2.6 Under no circumstances shall Licensee distribute any portion
of the Licensed Software In Source Code Form.
3. DELIVERY OF LICENSED SOFTWARE.
Licensor shall provide the Licensee with one (1) complete copy of the
Licensed Software in Source Code Form upon execution of this Agreement. IN
ADDITION, THE LICENSOR SHALL, FOR SO LONG AS THE ISV AGREEMENT IS IN EFFECT AND
CONCURRENTLY WITH ANY RELEASE OF A NEW VERSION OF THE LICENSOR'S APPLICATION
SERVER SOFTWARE (A "NEW VERSION"), DELIVER AN UPDATED VERSION OF THE LICENSED
SOFTWARE WHICH IS FULLY COMPATIBLE
2
<PAGE> 3
WITH THE NEW VERSION AND HAS AT LEAST ALL OF THE FUNCTIONALITY OF THE VERSION OF
THE LICENSED SOFTWARE WHICH IS GENERALLY AVAILABLE PRIOR TO THE RELEASE OF SUCH
NEW VERSION.
4. OWNERSHIP OF SOFTWARE
4.1 LICENSED SOFTWARE. Licensor shall retain all its rights, title
and interest in the Licensed Software, except for the license rights granted to
License hereunder and under the terms of the ISV Agreement.
4.2 COPYRIGHT NOTICES. The Licensee shall disclose that portions
of the Firepond Product are licensed from SilverStream and are copyrighted by
SilverStream
5. TERM AND TERMINATION.
5.1 TERM. This Agreement shall commence on the Agreement Date and
shall continue until terminated pursuant to Section 5.2; provided however, that
this Agreement shall terminate automatically at 5:00 p.m. (Boston time) an Match
31, 1999 if the parties have not entered Into the ISV Agreement on or before
such date
5.2 GROUNDS FOR TERMINATION. This Agreement may be terminated:
(a) By Licensee upon notice to Licensor,
(b) By either party in the event the other party
materially breaches a Provision of this Agreement and the breaching party falls
to cure such breach within thirty (30) days of the receipt of written notice of
such breach from the non-breaching party.
5.3 EFFECTS OF TERMINATION.
(a) Upon termination of this Agreement, all rights,
obligations and licenses of the parties hereunder shall cease.
(b) Immediately after the termination on the grounds of a
material breach by the Licensee the Licensee shall have no further right to use,
copy, modify, enhance, create derivative works of, or distribute the Licensed
Software, provided, however, that Licensee shall continue to have the right to
use the Licensed Software for the sale purpose of maintaining and supporting the
Licensed Software for its licensees of the Firepond Product and Licensee's end
users shall continue to have the right to use the Licensed Software In
accordance with the terms of their end user license agreements.
(c) The provisions of Sections 6 (Confidentiality), 7
(Warranty and
3
<PAGE> 4
Disclaimer of Warranty), 8 (Infringement Indemnification), 9 (Limitations on
Liability), 10 (Compliance with Laws), 11 (Notices), 12 (General Provisions) and
this Section 5 shall survive any termination or expiration of this Agreement
according to their terms.
(d) In the event of the automatic termination of this
Agreement as provided in Section 5.1 above, Licensee shall immediately return to
Licensor all copies of the Licensed Software and related documentation and
destroy all copies of enhancements, and modifications to, and derivative works
of, the Licensed Software and certify in writing to the Licensor to that effect.
6. CONFIDENTIALITY.
6.1 CONFIDENTIAL INFORMATION. The licensee agrees and acknowledges
that in order to facilitate the use of the Licensed Software, Licensor may
disclose to licensee certain confidential information which will be identified
as such in writing ("Confidential Information"). the Licensed Software in Source
Code Form shall be regarded as confidential information of licensor whether or
not it is identified in writing as "Confidential."
6.2 PROTECTION OF PROPRIETARY INFORMATION. In order to protect the
confidentiality of the Confidential Information Licensee agrees:
(a) Not to disclose or otherwise permit any other person
or entity access 10, in any manner, the Confidential Information, or any part
thereof In any form whatsoever, except that such disclosure or access shall be
permitted to employees and agents of the Licensee requiring access to the
Confidential Information In the course of their work for Licensee, and who have
signed an agreement or agreements obligating them to maintain the
confidentiality of the confidential Information of third parties in the
Licensee's possession and assigning to Licensee any of their inventions or
developments related to their work for Licensee;
(b) To notify Licensor promptly and In writing of the
circumstances surrounding any suspected possession, use or knowledge of the
Confidential Information or any part thereof at any location or by any person or
entity other than those authorized by this Agreement;
(c) Not to use the Confidential Information for any
purpose other than as explicitly set forth herein; and
(d) To provide in writing to Licensor the name of each
individual ranted access to the Confidential Information prior to the granting
of such access.
6.3 EXCEPTIONS. Nothing In this Section 6 shall restrict the
Licensee with respect to information or data, whether or not identical or
similar to that contained in the
4
<PAGE> 5
Confidential Information, if such information or data: (a) was rightfully
possessed by the licensee before it was received from Licensor; (b) is
independently developed by the Licensee without reference to Licensor's
Confidential Information or data; (c) is subsequently furnished to the Licensee
by a third party not under any obligation of confidentiality with respect to
such information or data, and without restrictions on use or disclosure; or (d)
is or becomes public or available to the general public otherwise than through
any act or default of the Licensee. In addition, nothing in this agreement shall
prohibit Licensee from using information relating to Ideas, concepts and
techniques retained In the memories of individual employees or agents without
the aid of any document or other recorded stored Information.
6.4 INJUNCTIVE RELIEF. Because the unauthorized use, transfer or
dissemination of any Confidential Information provided by Licensor to Licensee
may diminish substantially the value of such materials and may irreparably harm
Licensor, if the Licensee breaches the provisions of this Section 6, Licensor
shall, without limiting its other rights or remedies, be entitled to equitable
relief, including but not limited to injunctive relief.
7. WARRANTY AND DISCLAIMER OF WARRANTY.
THE LICENSED SOFTWARE IS BEING PROVIDED "AS IS" WITHOUT WARRANTY OF ANY
KIND AND LICENSOR HEREBY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED,
ORAL OR WRITTEN, WITH RESPECT TO THE LICENSED SOFTWARE INCLUDING, WITHOUT
LIMITATION, ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING THE FOREGOING, THE
LIMITATIONS ON AND DISCLAIMERS OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES
SET FORTH IN THIS AGREEMENT SHALL NOT BE CONSTRUED TO LIMIT OR QUALIFY ANY
REPRESENTATIONS, WARRANTIES OR INDEMNITIES ON THE OBJECT CODE FORM OF THE
LICENSED SOFTWARE FORTH IN THE ISV AGREEMENT.
8. INFRINGEMENT: INDEMNIFICATION
8.1 Except as provided below, Licensor shall defend and Indemnify
Licensee from and against any damages, liabilities, Costs and expenses
(Including reasonable attorneys' fees) arising out of any claim that the
Licensed Software infringes a valid United States patent, copyright or other
Intellectual property right of a third party, PROVIDED THAT (ii) Licensee shall
have promptly provided Licensor written notice thereof and reasonable
cooperation, information, and assistance in connection therewith, and (ii)
Licensor shall have sole control and authority with respect to the defense,
settlement, or compromise thereof. Should any Licensed Software become or, in
Licensor's opinion, be likely to become the subject of an injunction preventing
its use as contemplated herein, Licensor may, at its option, (1) procure for the
Licensee the right
5
<PAGE> 6
to continue using such Licensed Software, (2) replace or modify such Licensed
Software so that It becomes non-infringing, or, if (1) and (2) are not
reasonably available to Licensor, then (3) terminate Licensee's license to the
allegedly Infringing Licensed Software.
8.2 Licensor shall have no liability or obligation to Licensee
hereunder with respect to any patent, copyright trade secret or other
Intellectual property Infringement, misappropriation or claim thereof based upon
(i) use of the Licensed Software by Licensee or its licensees in combination
with products or software riot provided by Licensor, or (ii) modifications,
alterations or enhancements of the Licensed Software not created by or for
Licensor,
8.3 Except as may otherwise be provided In the ISV Agreement, the
foregoing states the entire liability of Licensor with respect to Infringement
of patents, copyrights, trade secrets and other Intellectual property rights by
the Licensed Software or any part thereof or by Its operation.
9. LIMITATIONS ON LIABILITY
9.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY LOSS OF DATA,
OR PROFITS OR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT
OF OR IN CONNECTION WITH THE USE OR PERFORMANCE Or THE LICENSED SOFTWARE,
9.2 Licensee will immediately Inform Licensor as soon as Licensee
becomes aware of any threatened or actual liability claim by a third party
relating to the Licensed Software,
10. COMPLIANCE WITH EXPORT LAWS.
Licensee shall not export, directly or Indirectly, the Licensed
Software, or other information or materials provided by Licensor hereunder, to
any country for which the United States or any other relevant jurisdiction
requires any export license or other governmental approval at the time of export
without first obtaining such license or approval.
11. NOTICES
Any notice or communication from one party to the other shall be in
writing and either personally delivered or sent via facsimile or certified mail,
postage prepaid and return receipt requested addressed, to such other party at
the address specified below or such other address as either party may from time
to time designate in writing to the other party.
6
<PAGE> 7
If to Licensor: SilverStream Software, Inc.
One Burlington Woods Drive
Burlington, MA 01803
Attn.: President
with a copy to: Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn.: John H. Chary, Esq.
If to the Licensee: Firepond Inc,
HQ Waltham
Bay Colony Corporate Center IV
1050 Winter Street
Suite 1000
Waltham, MA 02457
Attn.: Klaus P. Besier
with a copy to: Goodwin, Procter and Hoar LLP
Exchange Place
Boston, MA 02109
Attn: John Egan III, P.C.
No change of address shah be binding upon the other party hereto until
written notice thereof Is received by such party at the address show herein. All
notices shall be In English and shall be effective upon receipt.
12. GENERAL PROVISIONS.
12.1 FORCE MAJEURE. In the event that either party Is prevented
from performing, or is unable to perform, any of its obligations under this
Agreement due to any cause beyond the reasonable control of the patty invoking
this provision, the affected party's performance shall be excused and the time
for performance shall be extended for the period of delay or Inability to
perform due to such occurrence.
12.2 WAIVER. The waiver by either party of a breach or a default of
any provision of this Agreement by the other party shah not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either party to exercise or avail Itself of
any right, power or privilege that it has, or may have hereunder operate as a
waiver of any right power or privilege by such party.
7
<PAGE> 8
12.3 NO AGENCY; INDEPENDENT CONTRACTORS. Nothing contained in this
Agreement shall be deemed to Imply at constitute either party as the agent or
representative of the other party, or both patties as joint ventures or partners
for any purpose.
12.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without regard to its choice of low provisions.
12.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Exhibits
attached hereto constitute (together with the ISV Agreement if one is in effect)
the entire agreement between the parties with regard to the subject matter
hereof. No waiver, consent modification or change of terms of this Agreement
shall bind either party unless in writing signed by both parties, and then such
waiver, consent, modification or change shall be effective only in the specific
instance and for the specific purpose given.
12.6 MISCELLANEOUS. All rights and licenses granted under or
pursuant to this Agreement by Licensor to Licensee are, and shall otherwise be
deemed to be, for purposes of Section 365(n) of the United States Bankruptcy
Code (the "Code"), licenses to rights in "intellectual property," as defined in
the Code.
12.7 HEADINGS. Captions and headings contained in this Agreement
have been included for ease of reference and convenience and shall not be
considered in interpreting or construing this Agreement.
12.8 COSTS, EXPENSES AND ATTORNEYS' FEES. If either party commences
any action or proceeding against the other party to enforce or interpret this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover from the other party the actual costs, expenses and reasonable
attorneys' fees (including all related costs and expenses), incurred by such
prevailing party in connection with such action or proceeding and in connection
with obtaining and enforcing any judgment or order thereby obtained.
IN WITNESS WHEREOF, the parties, have caused this Agreement to be
executed by their duly authorized representatives.
SILVERSTREAM SOFTWARE, INC. FIREPOND, INC.
By: /s/ John H. Chary By: /s/ Thomas F. Carretta
---------------------------------- -----------------------------
Name: John H. Chary Name: Thomas F. Carretta
Title: Director, Channel Sales Title: Secretary
Date: 3/31/99 Date: 3/31/99
8
<PAGE> 9
EXHIBIT A
LICENSED SOFTWARE
This Exhibit A is incorporated in its entirety as part of this Software
License Agreement between Licensor and Licensee.
LICENSED SOFTWARE:
[ * * * ]
Packages that begin with the following files;
[ * * * ]
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
9
<PAGE> 10
EXHIBIT B
FIREPOND PRODUCT
This Exhibit B is incorporated in its entirety as part of this
Software License Agreement between Licensor and Licensee.
10
<PAGE> 11
BUSINESS PARTNER AGREEMENT
<TABLE>
<S> <C> <C>
Partner FirePond, Inc.
Partner Address: 1983 Premier Drive
Mankato, MN 56001
Incorporated in the State of: Minnesota
Telephone: 800-772-8110 781-530-3740
Fax:
e-Mail: URL:
</TABLE>
This Agreement and the Exhibits which form part of it set forth the terms
applicable to you as a SilverStream Business Partner. By signing this Agreement
Partner agrees to the General Terms and the Exhibits applicable to each category
selected below.
Partner Category:
[X] SilverStream Independent Software Vendor (ISV) Partner
This Agreement takes effect as of the last date written below.
<TABLE>
<S> <C> <C>
SILVERSTREAM SOFTWARE, INC. PARTNER FIREPOND, INC.
Signature /s/ John H. Chary Signature /s/ Thomas F. Carretta
----------------------- ----------------------
Name (please print) John H. Chary Name (please print) Thomas F. Carretta
Title Director, Channel Sales Title Secretary
Date 3/31/99 Date 3/31/99
</TABLE>
SilverStream Software, Inc. One Burlington Woods Drive, Burlington,
MA 01803, USA.
Tel (781) 238 5400, Fax (781) 238 5499
Confidential 1998
<PAGE> 12
1. APPOINTMENT
SilverStream appoints Partner as a non-exclusive member of the SilverStream
Business Partner Program in the Territory for the category(s) selected
(individually a "Category") on the face page of this Agreement. SilverStream and
Partner acknowledge their respective benefits and obligations as outlined in the
Exhibits attached hereto. SilverStream may in all Categories (but not in the ISV
Category) from time to time change the terms and conditions as outlined in
Exhibits by giving the Partner 30 days notice. Partner represents that it meets
or will meet within 60 days of the date hereof the program requirements
specified in Exhibit B and agrees to maintain such qualification during the
period of this Agreement.
2. TERM
This Agreement shall be for an initial term of One (1) years ("Initial Term")
commencing on the date hereof and this Agreement shall automatically renew for
FOUR subsequent one (1) year periods unless terminated as elsewhere herein
provided.
3. GRANT OF LICENSES
3.1 Subject to the terms and conditions of the Agreement, SilverStream
hereby grants to the Partner, and the hereby accepts, the license set
forth in Exhibit A for the Products as designated in Exhibit A. To the
extent permitted herein, the distribution of any Product by Partner AND
ITS DISTRIBUTORS, RESELLERS AND PARTNERS shall be subject to the terms
and conditions of SilverStream's shrink-wrap sublicense agreements
under which each end user sublicensee agrees: (i) to operate and
process the Product for its own business purposes only, without the
rights to further sublicense; (ii) not to copy or reproduce the
Product, in whole or in part, except as permitted in writing; (iii) not
to modify, adapt, translate, decompile, disassemble or reverse engineer
(except to the extent SilverStream is required by applicable law to
allow you to reverse engineer the software) the Product in any manner,
and (iv) that the sublicense agreement inures to the benefit of
SilverStream, and that SilverStream may directly enforce the terms of
the sublicense agreement in order to protect its interest in the
Products.
3.2 EXCEPT AS PROVIDED IN A CERTAIN SOFTWARE LICENSE AGREEMENT DATED THE
DATE HEREOF (THE "SOURCE CODE AGREEMENT") NEITHER Partner nor any
persons or entities who directly or indirectly purchase or license
Products from or who have the Products marked to them by, the Partner
in accordance with this Agreement ("Customers") shall have any right to
create derivative works of the Products.
3.3 Title to and ownership of the Products, including all patents,
copyrights and property rights applicable thereto, shall at all times
remain solely and exclusively with SilverStream or its licensors, and
neither the Partner nor any Customer shall take any action inconsistent
with such title and ownership.
3.4 SilverStream, may at its option, make available to Partner certain
software, media and/or related documentation for products or versions
of products not generally commercially available ("Pre-released
SOFTWARE"). Partner agrees to use Pre-released Software for testing and
evaluation purposes only, and to treat Pre-released Software as
Confidential Information and trade secrets subject to the provisions of
this Agreement. Partner agrees to abide by the terms of the shrink-wrap
license associated with such Pre-released Software.
Confidential 1998
<PAGE> 13
4. PRICES, PAYMENT AND AUDIT
4.1 Partner agrees to pay the "Partner Price" as a license fee for each
Product ordered hereunder. The Partner Price shall equal SilverStream's
suggested MSRP ("Base Price") for Products ordered, less the applicable
discount (the "Discount"), set forth in the North American Price List
("Price List") in Exhibit C. All Base Prices and Partner Prices are in
U.S. Dollars and F.O.B. SilverStream's point of shipment. All payments
from Partner to SilverStream shall be made in U.S. Dollars. Payments
from Canadian Partners may be made in Canadian Dollars if the
SilverStream invoice to the Partner is prepared by SilverStream in
Canadian Dollars.
4.2 SilverStream in its sole discretion, shall have the right from time to
time, to change the Base Prices and Discounts and/or add or delete
products to or from the Price List by giving 30 days' prior written
notice to the Partner. Orders accepted by SilverStream prior to the
effective date of any such change and scheduled for delivery within 30
days following receipt by SilverStream shall be processed at the lower
of (i) the Base Prices and/or Partner Prices in effect on the date of
acceptance of the order or (ii) the Base Prices and/or Partner Prices
in effect on the scheduled shipment date.
4.3 The payment terms for Product ordered shall be net thirty (30) days and
if Partner fails to pay any amounts when due, the Partner shall pay
SilverStream a late payment charge equal to 1.5% per month or if lesser
the maximum amount permitted by law. SilverStream reserves the right to
require full or partial payment in advance, or to revoke any credit
previously extended, if, in SilverStream's judgment, the Partner's
financial condition does not warrant proceeding on the terms specified.
4.4 SILVERSTREAM SHALL HAVE THE RIGHT, SUBJECT TO REASONABLE ADVANCE
NOTICE, AND NO MORE OFTEN THAN ONCE PER CALENDAR YEAR, TO HAVE AN
INDEPENDENT AUDITOR OF NATIONALLY RECOGNIZED STANDING ACCEPTABLE TO
PARTNER (WHICH ACCEPTANCE MAY BE CONDITIONED UPON APPROPRIATE
UNDERTAKINGS REGARDING CONFIDENTIALITY BUT SHALL NOT IN ANY EVENT BE
UNREASONABLY WITHHELD) inspect such books and records of Partner, at
Partner's principal place of business, as are necessary to verify the
reports provided by Partner to SilverStream. Any such audit shall be at
the expense of SilverStream, unless such audit discloses an
underpayment by the Partner in excess of TEN PERCENT (10%) IN ANY
THREE-MONTH PERIOD, IN WHICH CASE PARTNER shall reimburse SilverStream
for such expenses. Any underpayment by Partner shall be promptly paid
to SilverStream together with interest as provided in this Section.
5. TAXES AND IMPORT DUTIES
Base Prices and Partner Prices are exclusive of all federal, state, municipal,
excise, sales, use, value added, property and other similar taxes and import
duties, now in force or enacted in the future by any community of nations or any
nation or political subdivision, all of which shall be paid by the Partner,
except for such taxes as are imposed on SilverStream's income, which shall be
paid by SilverStream. The Partner is responsible for obtaining and providing to
SilverStream any certificate of exemption or similar document required to exempt
any sale from sales, use or similar tax liability.
6. MASTER DISKS AND AUTHORIZED LICENSE CODES
Master Disks and authorized license codes. Partner is authorized to distribute
Application Deployment Servers and is authorized to make Evaluation Copies and
Demonstration Copies of the Software and copies of the Software to be licensed
as Application Deployment Servers from the Master Disks ("Master Disks") and
authorized license codes that SilverStream will make available to Partner.
Partner may make a reasonable number of Evaluation and Demonstration copies that
may be distributed without Royalties provided that the Partner receives no
revenue associated with the Evaluation and Demonstration Copies and Evaluation
and Demonstration Copies contains a license code, as provided by SilverStream,
that causes the Software to cease functioning 60 days after installation.
Partner must maintain adequate security over Master Disks and authorized license
codes and shall allow only a limited number of employees to make copies from
Master Disks. Partner shall fully account for all copies of the Software.
Partner shall not modify or alter and proprietary rights notices contained
within the Software. Partner is strictly prohibited from providing access or
transferring the Master Disks or license codes to any third party.
Confidential 1998
<PAGE> 14
7. OBLIGATIONS OF THE PARTNER
Partner shall undertake all obligations set forth as Program Requirements on
Exhibit B.
8. WARRANTIES
SILVERSTREAM DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, WRITTEN OR
ORAL, WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT LIMITATION ALL IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
SILVERSTREAM'S LIABILITY FOR DAMAGES TO THE PARTNER FOR ANY CAUSE WHATSOEVER
REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION, SHALL NOT EXCEED THE AGGREGATE
PAID FOR PRODUCTS UNDER THIS AGREEMENT. EXCEPT FOR LIABILITY FOR DAMAGES ARISING
UNDER SECTIONS 3, 4, AND/OR 11.1 FOR WHICH NOT LIMITATION SHALL APPLY, PARTNER'S
LIABILITY FOR DAMAGES TO SILVERSTREAM FOR ANY CAUSE WHATSOEVER, REGARDLESS OF
THE FORM OF ANY CLAIM OR ACTION, SHALL NOT EXCEED AN AMOUNT EQUAL TO THE
AGGREGATE PAID BY PARTNER FOR PRODUCTS UNDER THIS AGREEMENT. EXCEPT FOR
PARTNER'S LIABILITY FOR DAMAGES TO SILVERSTREAM ARISING UNDER SECTIONS 3 OR
11.1, NEITHER PARTY SHALL BE LIABLE FOR ANY LOSS OF DATA, PROFITS OR USE OF THE
PRODUCTS, OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL
LOSS DAMAGES ARISING HEREUNDER EVEN IF SILVERSTREAM HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL SILVERSTREAM BE LIABLE TO
CUSTOMERS OR OTHER THIRD PARTIES NOR ANY DAMAGES, INCLUDING BUT NOT LIMITED TO:
(i) DAMAGES CAUSED BY THE PARTNER'S FAILURE TO PERFORM COVENANTS AND
RESPONSIBILITIES, BY REASON OF SILVERSTREAM'S NEGLIGENCE OR OTHERWISE; (ii)
DAMAGES CAUSED BY REPAIRS OR MODIFICATIONS DONE WITHOUT SILVERSTREAM'S WRITTEN
APPROVAL; OR (iii) LOSS OF DATA, OR PROFITS OR USE OF THE PRODUCTS OR ANY
SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL LOSS DAMAGES IN
CONNECTION WITH THE USE OR PERFORMANCE OF THE PRODUCTS. THE PARTNER SHALL
INDEMNIFY SILVERSTREAM AGAINST ALL SUCH CLAIMS ASSERTED BY ITS CUSTOMERS OR
OTHER THIRD PARTIES AGAINST SILVERSTREAM.
Indemnification by the Partner. To the extent a claim or action is brought
against SilverStream based on or related to the Partner's failure to observe or
perform its obligations under this Agreement, including its obligation to notify
customers of limitation and disclaimers of warranties and liabilities, the
Partner shall defend and hold SilverStream harmless from and against any and all
damages, costs and expenses, including reasonable attorney's fees, suffered by
or awarded against SilverStream.
9. PATENTS AND TRADEMARKS
9.1 INFRINGEMENT INDEMNIFICATION BY SILVERSTREAM. IN THE EVENT OF ANY
ACTION OR CLAIM ALLEGING THAT THE PRODUCTS INFRINGE ANY PATENT,
COPYRIGHT, TRADEMARK, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY
RIGHTS OF ANY THIRD PARTY, SILVERSTREAM SHALL INDEMNIFY, DEFEND AND
HOLD THE PARTNER HARMLESS FROM ALL CLAIMS, LIABILITIES, DAMAGES,
EXPENSES, JUDGEMENTS AND LOSSES (INCLUDING REASONABLE ATTORNEYS' FEES)
ARISING FROM SUCH ACTION OR CLAIM AT ITS EXPENSE AND PAY ALL COSTS AND
DAMAGES FINALLY AWARDED IN SUCH ACTION OR SETTLEMENT WHICH ARE
ATTRIBUTABLE TO SUCH CLAIM. SilverStream MAY ASSUME sole control of the
defense of any such action and all negotiations for its settlement or
compromise. The Partner shall cooperate fully with SilverStream in the
defense, settlement or compromise of any such action. In the event that
a final injunction is obtained against the Partner's use of the Product
by reason of infringement of a valid patent, copyright, trade secret or
other intellectual property right, or if in the REASONABLE opinion of
SilverStream the Product is likely to become the subject of a
successful claim of such infringement, SilverStream shall, at its
option and expense, (i) procure for the Partner and its Customers the
right to continue using the Product, (ii) replace or modify the Product
so that it becomes non-infringing so long as its functionality is
essentially unchanged, or (iii) if neither (i) and (ii) are reasonably
available to SilverStream, terminate the license for the Products AND
REFUND ALL LICENSE FEES PAID TO SILVERSTREAM
Confidential 1998
<PAGE> 15
HEREUNDER.
9.2 Notwithstanding the foregoing, SilverStream shall have no liability to
the Partner to the extent that any infringement or claim thereof is
based upon (i) use of any Product in combination with equipment or
software not supplied by SilverStream where the Product would not
itself be infringing, (ii)compliance with designs, specifications or
instructions of the Partner or any of its Customers, (iii) use of any
Product in any application or environment for which its was not
designed or contemplated hereunder, (iv) modifications of the Products
by anyone other than SilverStream, or (v) any claims or infringement of
any patent, copyright or trade secret in which the Partner or any
affiliate of the Partner has an interest or license.
9.3 THE FOREGOING INDEMNIFICATION PROVISIONS STATE THE ENTIRE LIABILITY OF
SILVERSTREAM WITH RESPECT TO INFRINGEMENT OR ALLEGED INFRINGEMENT OF
PATENTS, COPYRIGHTS, TRADEMARKS, TRADE SECRETS AND OTHER INTELLECTUAL
PROPERTY OR PROPRIETARY RIGHTS BY THE PRODUCTS.
9.4 INFRINGEMENT, INDEMNIFICATION BY THE PARTNER. THE PARTNER SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS SILVERSTREAM AGAINST ALL CLAIMS,
LIABILITIES, DAMAGES, EXPENSES, JUDGMENTS AND LOSSES (INCLUDING
REASONABLE ATTORNEYS' FEES) ARISING FROM INFRINGEMENT OR ALLEGED
INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET, TRADEMARK OR OTHER
INTELLECTUAL PROPERTY OR PROPRIETARY RIGHT AS A RESULT OF COMPLIANCE BY
SILVERSTREAM WITH THE DESIGNS, SPECIFICATIONS OR INSTRUCTIONS OF THE
PARTNER OR ANY OF ITS CUSTOMERS.
9.5 OWNERSHIP OF PATENTS AND TRADEMARKS. ALL PATIENTS, TRADEMARKS, TRADE
NAMES, COPYRIGHTS, DOMAIN NAMES AND DESIGNS IN RELATION TO THE PRODUCTS
AND THE LITERATURE SUPPLIED IN CONNECTION THEREWITH SHALL BE AND REMAIN
THE PROPERTY OF SILVERSTREAM, OR THE OWNER OF SUCH AS APPLICABLE AND NO
RIGHTS TO DUPLICATE SUCH PROPERTY SHALL ACCRUE TO THE PARTNER UNLESS
EXPRESSLY PROVIDED HEREIN OR UNLESS WRITTEN PERMISSION IS GRANTED BY
SILVERSTREAM.
9.6 USE OF SILVERSTREAM'S TRADE NAMES AND TRADEMARKS. THE PARTNER AGREES AS
FOLLOWS WITH RESPECT TO ANY MARKINGS, COLORS, LOGOS OR OTHER INSIGNIA
WHICH ARE CONTAINED ON OR IN OR AFFIXED TO PRODUCTS AT THE TIME OR
SHIPMENT (COLLECTIVELY, WITH ANY DOMAIN NAME INCLUDING THE WORD
SILVERSTREAM, THE "SILVERSTREAM MARKS").
9.6.1 SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT,
SILVERSTREAM HEREBY GRANTS TO PARTNERS DURING THE TERM OF THIS
AGREEMENT A NON-ASSIGNABLE AND NON-TRANSFERABLE RIGHT AND
LICENSE TO USE THE SILVERSTREAM MARKS IN THE CONDUCT OF ITS
BUSINESS IN A STYLE AND MANNER APPROVED BY SILVERSTREAM IN
WRITING PRIOR TO SUCH USE. PARTNER MAY, IN ADVERTISING,
PROMOTIONAL MATERIALS, LETTERHEADS, INVOICES, AND OTHER
APPROPRIATE DOCUMENTS, DESCRIBE ITSELF AS AN "AUTHORIZED
PARTNER FOR SILVERSTREAM SOFTWARE PRODUCTS." PARTNER SHALL
FORWARD TO SILVERSTREAM FOR ITS PROMPT REVIEW AND APPROVAL ANY
AND ALL FORMS OF PROPOSED ADVERTISING OR PROMOTIONAL MATERIALS
OF PARTNER WHICH INCLUDE A SILVERSTREAM MARK.
9.6.2 PARTNER AGREES IT IS NOT AUTHORIZED UNDER THIS AGREEMENT TO
USE ANY SILVERSTREAM MARKS IN CONNECTION WITH ANY BUSINESS
CONDUCTED BY THE PARTNER OTHER THAN THE BUSINESS OF RESELLING
PRODUCTS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
9.6.3 PARTNER WILL NOT, DURING OR AFTER THE TERM OF THIS AGREEMENT,
CLAIM ANY OWNERSHIP OR SIMILAR INTEREST IN ANY OF THE
SILVERSTREAM MARKS.
9.6.4 NOTHING HEREIN SHALL GIVE PARTNER ANY RIGHT, TITLE, OR
INTEREST IN THE SILVERSTREAM MARKS EXCEPT THE RIGHT TO USE THE
NAME DURING THE TERM OF THIS AGREEMENT AND IN ACCORDANCE WITH
ITS TERMS. ANY USE OF THE SILVERSTREAM MARKS BY OR WITH THE
AUTHORITY OF PARTNER SHALL INURE TO THE BENEFIT OF
SILVERSTREAM.
9.6.5 PARTNER AGREES IT SHALL NOT, AND IT SHALL NOT CAUSE OR ASSIST
ANY THIRD PARTY TO, REGISTER OR ATTEMPT TO REGISTER, IN ITS
OWN NAME OR OTHERWISE, ANY OF THE SILVERSTREAM MARKS OR ANY
OTHER TRADEMARKS, SERVICE MARKS, OR SLOGANS OWNED BY OR
ASSOCIATED WITH SILVERSTREAM OR ANY DERIVATIVE OF ANY OF
THESE. IN THE EVENT THAT PARTNER SECURES OR HAS SECURED IN ANY
JURISDICTION ANY RIGHTS TO ANY OF THE SILVERSTREAM MARKS OR
ANY OF SUCH OTHER MARKS OR SLOGANS WHICH ARE PRIOR TO OR
GREATER THAN THE RIGHTS OWNED BY SILVERSTREAM, THEN PARTNER
SHALL IMMEDIATELY
Confidential 1998
<PAGE> 16
NOTIFY SILVERSTREAM OF SAME AND, UPON WRITTEN REQUEST FROM
SILVERSTREAM, HEREBY ASSIGNS ALL PARTNER'S RIGHT, TITLE AND
INTEREST THEREIN TO SILVERSTREAM (OR ITS DESIGNEE).
9.6.6 PARTNER AGREES TO NOTIFY SILVERSTREAM IN WRITING OF ANY
APPARENT INFRINGEMENT OF ANY OF THE SILVERSTREAM MARKS WHICH
COMES TO THE ATTENTION OF PARTNER.
9.6.7 UPON TERMINATION OF THIS AGREEMENT FOR ANY REASON, ALL RIGHTS
AND LICENSES GRANTED TO PARTNER HEREUNDER SHALL TERMINATE AND
REVERT IMMEDIATELY TO SILVERSTREAM AND PARTNER SHALL
IMMEDIATELY CEASE USING THE SILVERSTREAM MARKS.
9.6.8 PARTNER ACKNOWLEDGES AND AGREES THAT THE SILVERSTREAM MARKS
HAVE A UNIQUE CHARACTER GIVING THEM A PECULIAR VALUE, THE LOSS
OF WHICH CANNOT REASONABLY OR ADEQUATELY BE COMPENSATED FOR BY
MONETARY DAMAGES, AND THAT THE VIOLATION BY PARTNER OF THE
PROVISIONS HEREOF CONCERNING THE SAME OR OF SILVERSTREAM'S
RIGHTS THEREIN ARE LIKELY TO CAUSE SILVERSTREAM IRREPARABLE
DAMAGES AND INJURY. PARTNER HEREBY EXPRESSLY AGREES THAT
SILVERSTREAM WILL BE ENTITLED TO EQUITABLE RELIEF TO PREVENT
OR CURE ANY VIOLATION OR INFRINGEMENT OR THREATENED VIOLATION
OR INFRINGEMENT OF SILVERSTREAM'S RIGHTS IN THE SILVERSTREAM
MARKS.
10. TERMINATION, DEFAULT AND REMEDIES
10.1 AFTER THE INITIAL TERM AND FOR THE NEXT FOUR ANNUAL RENEWALS
THIS AGREEMENT MAY BE TERMINATED BY THE PARTNER, WITHOUT
CAUSE, UPON WRITTEN NOTICE TO SILVERSTREAM GIVING 90 DAYS
NOTICE, AT ANY TIME DURING THE TERM OF THIS AGREEMENT.
10.2 AFTER THE INITIAL TERM, AND THE FOUR ANNUAL RENEWALS THIS
AGREEMENT MAY BE TERMINATED BY EITHER PARTY, WITHOUT CAUSE,
UPON WRITTEN NOTICE TO THE OTHER PARTY GIVING 90 DAYS.
10.3 UPON THE OCCURRENCE OF ANY OF THE FOLLOWING ACTS OR EVENTS
("EVENTS OF DEFAULT"), THE PARTNER SHALL BE IN DEFAULT AND
BREACH OF THIS AGREEMENT.
10.3.1 WHERE APPLICABLE, THE FAILURE TO MEET THE FINANCIAL
REQUIREMENTS AS SET FORTH ON EXHIBIT B WHICH IS NOT CURED
WITHIN THIRTY (30) DAYS AFTER WRITTEN NOTICE THEREOF FROM
SILVERSTREAM.
10.3.2 FAILURE TO MAKE ANY MATERIAL PAYMENT WHEN DUE HEREUNDER WHICH
FAILURE REMAINS UNCURED FOR THIRTY DAYS (30) DAYS AFTER NOTICE
THEREOF FROM SILVERSTREAM.
10.3.3 FAILURE TO COMPLY WITH THE MATERIAL TERMS HEREOF OR TO PERFORM
IN ALL MATERIAL RESPECTS ANY OF ITS COVENANTS, OBLIGATIONS OR
RESPONSIBILITIES UNDER THIS AGREEMENT WHICH FAILURE REMAINS
UNCURED FOR THIRTY (30) DAYS AFTER NOTICE THEREOF FROM
SILVERSTREAM.
10.3.4 DISSOLUTION, TERMINATION OF EXISTENCE, LIQUIDATION, INSOLVENCY
OR BUSINESS FAILURE OF THE PARTNER OR THE INSTITUTION OF ANY
BANKRUPTCY PROCEEDING AGAINST OR BY THE PARTNER, OR THE
APPOINTMENT OF A CUSTODIAN OR RECEIVER FOR THE PARTNER OR ANY
PART OF ITS PROPERTY IF SUCH BANKRUPTCY PROCEEDING OR
APPOINTMENT IS NOT TERMINATED OR DISMISSED WITHIN THIRTY (30)
DAYS.
10.3 UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, SILVERSTREAM, IN ITS SOLE
DISCRETION, SHALL HAVE THE RIGHT TO (i) IMMEDIATELY TERMINATE, BY
WRITTEN NOTICE, THIS AGREEMENT AND/OR ANY SOFTWARE LICENSE GRANTED TO
THE PARTNER, (ii) CANCEL ANY OR ALL UNFILLED ORDERS FOR PRODUCTS
SUBMITTED BY THE PARTNER, AND (iii) EXERCISE ANY OTHER REMEDY WHICH MAY
BE AVAILABLE AT LAW OR IN EQUITY.
10.4 Upon the termination of this Agreement, the Partner shall (i) cease
immediately from acting as a Partner of SilverStream and abstain from
making further distributions of Products, (ii) pay to SilverStream, in
full within 30 days of such termination, all amounts owed to
SilverStream, (iii) cooperate with SilverStream in completing all
outstanding obligations to Customers, and (iv) cease making use of any
printed material, trademarks, trade name or domain name identified with
SilverStream without the express written consent of SilverStream. The
provisions set forth in Sections 8, 9.6.7, 9.6.8, 10 and 11 shall
survive the termination of this Agreement.
10.4 Silver stream shall have no liability to the Partners for
damages of any kind, including indirect, incidental or
consequential damages, on account of the termination or
expiration of this Agreement IN ACCORDANCE WITH ITS TERMS.
Without limiting the generality of the foregoing, SilverStream
shall not be liable to the Partner for reimbursement or
damages for the loss of
Confidential 1998
<PAGE> 17
goodwill, prospective profits or anticipated sales, or on
account of any expenditures, investment, leases or commitments
made by the Partner or for any other reason whatsoever based
upon, or growing out of, such termination or expiration.
10.5 THE REJECTION OF THIS AGREEMENT OR THE LICENSE OF THE PRODUCT GRANTED
HEREUNDER PURSUANT TO SECTION 365 OF THE UNITED STATES BANKRUPTCY CODE
(THE "CODE") BY SILVERSTREAM OR A TRUSTEE IN A BANKRUPTCY PROCEEDING
UNDER THE CODE CONSTITUTES A MATERIAL BREACH OF THIS AGREEMENT AND
ENTITLES PARTNER, AT ITS OPTION, TO TERMINATE THIS AGREEMENT AND THE
LICENSE OF THE PRODUCT GRANT HEREUNDER UPON WRITTEN NOTICE.
11. GENERAL
11.1 Proprietary Information. No proprietary information disclosed by either
party to the other in connection with this Agreement shall be disclosed
to any person or entity other than the recipient party's employees or
agents directly involved with the recipient party's use of such
information (in accordance with the terms hereof) who are bound by
written agreement to protect the confidentiality of such information,
and such information shall otherwise be protected by the recipient
party from disclosure to others. Information will not be subject to
this provision if it is or becomes a matter of public knowledge without
the fault of the recipient party, if it was a matter of written record
in the recipient party's files prior to disclosure to it by the other
party, if it was or is received by the recipient party from a third
person under circumstances permitting ITS DISCLOSURE BY THE RECIPIENT
PARTY OR IF IT IS INDEPENDENTLY developed by the recipient party. Upon
termination of this Agreement, each party shall promptly deliver to the
other all proprietary information of the other party in the possession
or control of such party and all copies thereof. The obligations under
this Section shall continue for a period of five (5) years after the
termination of the Agreement.
11.2 ALL RIGHTS AND LICENSES GRANTED UNDER OR PURSUANT TO THIS AGREEMENT BY
SILVERSTREAM TO PARTNER (INCLUDING THE LICENSE OF THE PRODUCT GRANTED
HEREUNDER) ARE, AND SHALL OTHERWISE BE DEEMED TO BE, FOR PURPOSES OF
SECTION 365(n) OF THE CODE, LICENSES TO RIGHT IN "INTELLECTUAL
PROPERTY, " AS DEFINED UNDER THE CODE. THE PARTIES HERETO FURTHER AGREE
THAT IN THE EVENT OF THE COMMENCEMENT OF BANKRUPTCY PROCEEDINGS BY OR
AGAINST SILVERSTREAM UNDER THE CODE, PARTNER SHALL BE ENTITLED, AT ITS
OPTION, TO RETAIN ALL OF ITS RIGHTS UNDER THIS AGREEMENT (INCLUDING THE
LICENSE OF THE PRODUCT GRANTED HEREUNDER) PURSUANT TO CODE SECTION
35(n).
11.3 Force Majeure. In the event that either party fails to perform any of
its obligations under this Agreement due to any act of God, fire,
casualty, flood, war, strike, lock out, failure of public utilities,
injunction or any act, exercise, intervention of governmental
authority, epidemic, insurrection, or any other cause beyond the
reasonable control of the party invoking this provision, then, except
for Partner's obligation to make payments to SilverStream hereunder,
the affected party's performance shall be excused and the time for
performance shall be extended for the period of delay or inability to
perform due to such occurrence.
11.4 COMPLIANCE WITH U.S. GOVERNMENT REGULATIONS. THE PARTIES AGREE TO
COMPLY WITH ALL U.S. STATE AND FEDERAL LAWS, REGULATIONS OR ORDERS
PERTAINING TO THE FULFILLMENT OF THIS AGREEMENT INCLUDING, BUT NOT
LIMITED TO EXPORT CONTROL LAWS, ANTI-BOYCOTT LAWS, AND THE FOREIGN
CORRUPT PRACTICES ACT, WHICH PROHIBITS CERTAIN PAYMENTS TO PARTIES WHO
ARE NOT THE PARTNER.
11.5 APPLICABLE LAW AND JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS.
11.6 RELATIONSHIP OF THE PARTIES. THE PARTNER ACKNOWLEDGES THAT BOTH PARTIES
HERETO ARE, INDEPENDENT CONTRACTORS AND THAT THE PARTNER WILL, ON ITS
OWN BEHALF, SOLICIT ORDERS FOR PRODUCTS ONLY AS AN INDEPENDENT
CONTRACTOR. THE PARTNER SHALL NOT REPRESENT ITSELF AS A PARTNER, JOINT
VENTURE, AGENT, EMPLOYEE OR GENERAL REPRESENTATIVE OF SILVERSTREAM. THE
PARTNER ACKNOWLEDGES THAT IT SHALL HAVE NO RIGHT, POWER OR AUTHORITY TO
IN ANY WAY OBLIGATE SILVERSTREAM TO ANY CONTRACT OR OTHER OBLIGATION.
11.7 ENTIRE AGREEMENT. THIS AGREEMENT (TOGETHER WITH THE SOURCE CODE
AGREEMENT AND THE ESCROW AGREEMENT) CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN SILVERSTREAM AND THE PARTNER WITH RESPECT TO THE
Confidential 1998
<PAGE> 18
SUBJECT MATTER HEREOF AND SHALL NOT BE AMENDED, ALTERED OR CHANGED
EXCEPT BY A WRITTEN AGREEMENT SIGNED BY THE PARTIES HERETO.
11.8 WAIVERS. NO DELAY OR OMISSION ON THE PART OF EITHER PARTY TO THIS
AGREEMENT IN REQUIRING PERFORMANCE BY THE OTHER PARTY OR IN EXERCISING
ANY RIGHT HEREUNDER SHALL OPERATE AS A WAIVER OF ANY PROVISION HEREOF
OR OF ANY RIGHT OR RIGHTS HEREUNDER; AND THE WAIVER, OMISSION OR DELAY
IN REQUIRING PERFORMANCE OR EXERCISING ANY RIGHT HEREUNDER ON ANY ONE
OCCASION SHALL NOT BE CONSTRUED AS A BAR TO OR WAIVER OF SUCH
PERFORMANCE OR RIGHT, OR OF ANY RIGHT OR REMEDY UNDER THIS AGREEMENT,
ON ANY FUTURE OCCASION.
11.9 NOTICES. FOR PURPOSES OF THIS AGREEMENT, AND FOR ALL NOTICES AND
CORRESPONDENCE HEREUNDER, THE ADDRESSES OF THE RESPECTIVE PARTIES HAVE
BEEN SET OUT AT THE BEGINNING OF THIS AGREEMENT, AND NO CHANGE OF
ADDRESS SHALL BE BINDING UPON THE OTHER PARTY UNTIL WRITTEN NOTICE
THEREOF IS RECEIVED BY SUCH PARTY AT THE ADDRESS SHOWN HEREIN. ALL
NOTICES SHALL BE EFFECTIVE UPON RECEIPT IF DELIVERED BY COURIER SERVICE
AND FIVE DAYS AFTER MAILING IF SENT BY REGISTERED MAIL.
11.10 SEVERABILITY. IF ANY PROVISION OF THIS AGREEMENT SHALL FOR ANY REASON
BE HELD ILLEGAL OR UNENFORCEABLE, SUCH PROVISION SHALL BE DEEMED
SEPARABLE FROM THE REMAINING PROVISIONS OF THIS AGREEMENT AND SHALL IN
NO WAY AFFECT OR IMPAIR THE VALIDITY OR ENFORCEABILITY OF THE REMAINING
PROVISIONS OF THIS AGREEMENT.
11.11 COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH OF
WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH SHALL CONSTITUTE ONE
AND THE SAME INSTRUMENTS.
11.12 ESCROW. SILVERSTREAM AND FIREPOND AGREE TO ESTABLISH AN ESCROW ACCOUNT
FOR ALL SOFTWARE AND DOCUMENTATION WITH DATA SECURITIES INTERNATIONAL
("DSI") WITHIN FOURTEEN (14) DAYS AFTER THE EXECUTION DATE OF THE ISV
BUSINESS PARTNER AGREEMENT. THE ESCROW AGREEMENT SHALL BE SUBSTANTIALLY
IN THE FORM OF THE ATTACHMENT X ATTACHED HERETO.
Confidential 1998
<PAGE> 19
- --------------------------------------------------------------------------------
RSA A $[ * * * ] prepaid RSA license fee is due upon
execution of the license. This advance royalty will
be forwarded to RSA in full to the benefit of the ISV
partner. Additional royalties, based on reports
submitted by the ISV partner, will be made, to the
benefit of the ISV partner by RSA by SilverStream
according to the terms of the SilverStream/RSA
licensing agreement. Should the license agreement
between RSA and SilverStream be terminated, the ISV
partner has three months to negotiate a license
agreement directly with RSA for redistribution of RSA
components. The balance of any prepaid license fees
will be continued under such a license agreement. The
ISV partner may continue to redistribute the RSA
licensed components within the SilverStream
Application Server during this three-month period.
SilverStream shall report RSA license fee based on
the net sales price by applying a percentage of net
sales price of [ * * * ]% and a per copy/unit
minimum of $[ * * * ]. All prepaid amounts may be
offset against license fees accrued at a rate of
[***] ($[ * * * ]) for each ($[ * * * ]) of
license fees accrued until prepayments are exhausted.
- --------------------------------------------------------------------------------
Advance Royalty A NON-REFUNDABLE ADVANCE ROYALTY OF $[***] PAYABLE IN
THREE (3) INSTALLMENTS OF $[***] EACH SHALL BE DUE
(i) UPON THE EXECUTION OF THIS AGREEMENT, (ii) THIRTY
(30) DAYS AFTER THE DATE OF THIS AGREEMENT, AND (iii)
SIXTY (60) DAYS AFTER THE DATE OF THIS AGREEMENT.
ADVANCE ROYALTY SHALL BE OFF SET AGAINST ACTUAL
ROYALTY REPORTED PURSUANT TO THE PRICE LIST ON
SCHEDULE C AND THE TERMS OF THIS AGREEMENT.
- --------------------------------------------------------------------------------
Reporting ISV Partner must report to SilverStream all monthly
revenue from the Bundled Product within 14 days of
the end of each such month. Reports must be completed
on a template to be provided from time to time by
SilverStream which shall include, but not be limited
to, the following:
1) the total number of copies/units of each of the
Bundled Products' licensed or distributed by ISV
Partner during the month,
2) the total license fees accrued,
3) the sales location (by zip code in the US and by
country for all international sales) for all
copies/units licensed or distributed during the
month.
- --------------------------------------------------------------------------------
Update Assurance ISV PARTNER MUST PURCHASE ANNUAL UPDATE ASSURANCE @
15% OF THE MOST-RECENT PRE-PAID ROYALTY AMOUNT,
PAYABLE ON SAME SCHEDULE AS ADVANCED ROYALTIES ABOVE.
- --------------------------------------------------------------------------------
Payments Royalties are to be calculated as per the attached
price list. All royalty payments are due within 30
days at the end of each month. All payments are to be
made in US dollars and must be made by wire transfer
or a check drawn on a US bank. ISV Partner is
responsible for all credit and collections from ISV
customers. Nonpayment to ISV Partner by its customer
does not affect payments to SilverStream.
- --------------------------------------------------------------------------------
Technical Support ISV partner must maintain a SilverStream Level 2
support contract during the life of the Agreement.
- --------------------------------------------------------------------------------
Use of SilverStream Marks Notwithstanding the provision of section 9 to the
contrary, the SilverStream Marks that may be used by
the ISV Partners are limited to the ISV log kit
provided by SilverStream. The SilverStream ISV logo
must be displayed on all Bundled Product packaging,
documentation, marketing literature and advertising.
Confidential 1998
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
<PAGE> 20
- --------------------------------------------------------------------------------
Bundled Product The Bundled Product is defined as the
SilverStream Application Server embedded with the
following ISV products and for the applications
listed below:
The Bundled Product shall be deemed to include any
enhancements, thereto and new versions, thereof.
- --------------------------------------------------------------------------------
Native Drivers SilverStream will supply native database
drivers as available. No third party drivers are
included with this license.
SILVERSTREAM SOFTWARE, INC.
LICENSE AGREEMENT FOR SILVERSTREAM PRODUCTS
- --------------------------------------------------------------------------------
SilverStream Products
Single Developer Pack: Includes 1 SilverStream Server and Designer Software and
1 Sybase SQL Anywhere Server Software licensed for use, on a stand alone basis,
all of one Computer. Group Developer Packs: Includes 1 SilverStream Server and
Designer Software licensed for either 5 or 10 concurrent users, 1 Sybase SQL
Anywhere Server Software licensed for 10 concurrent users.
SilverStream Application Server: Includes 1 SilverStream Server licensed for use
on one computer with the number of Processors indicated on the product
packaging.
- --------------------------------------------------------------------------------
This is a legal agreement (this "Agreement") between you (either an individual
or an entity) and SilverStream Software, Inc. ("SilverStream") governing the use
of the accompanying SilverStream Products (one or more of which his identified
above) which may include certain software programs ("Software") and other
written materials and "online" or electronic documentation ("Documentation").
BY INSTALLING THE SOFTWARE, YOU ACKNOWLEDGE, THAT YOU HAVE READ ALL OF THE TERMS
AND CONDITIONS OF THIS AGREEMENT, UNDERSTAND THEM, AND AGREE TO BE BOUND BY
THEM. YOU UNDERSTAND THAT, IF YOU PURCHASED THE SILVERSTREAM PRODUCT FROM AN
AUTHORIZED RESELLER OF SILVERSTREAM, THAT RESELLER IS NOT SILVERSTREAM'S AGENT
AND IS NOT AUTHORIZED TO MAKE ANY REPRESENTATIONS OR WARRANTIES ON
SILVERSTREAM'S BEHALF NOR TO VARY ANY OF THE TERMS OR CONDITIONS OF THIS
AGREEMENT. IN ADDITION, YOU ACKNOWLEDGE THAT, UNLESS OTHERWISE AGREED BY THAT
RESELLER IN WRITING OR PROHIBITED BY LAW, THE LIMITATIONS OF WARRANTIES AND
LIABILITY SET FORTH IN THIS AGREEMENT ALSO APPLY TO AND BENEFIT THAT RESELLER.
IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT DO NOT INSTALL THE SOFTWARE.
IN SUCH CASE PROMPTLY RETURN THE ENTIRE SILVERSTREAM PRODUCT(S), INCLUDING THE
DOCUMENTATION, TO THE PLACE YOU OBTAINED THEM FOR A FULL REFUND.
Confidential 1998
<PAGE> 21
<TABLE>
<S> <C> <C>
SILVERSTREAM INDEPENDENT SOFTWARE VENDORS (ISV) PARTNER PROGRAM OVERVIEW 10/1/98
Program Benefits SILVER ISV STERLING ISV
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL BENEFITS
- ------------------------------------------------------------------------------------------------------------------------------------
1. PRODUCT PURCHASE OPTIONS
ISV "authenticated" Master Disk for deployment No Yes, see discount schedule
software purchases
- ------------------------------------------------------------------------------------------------------------------------------------
BUSINESS DEVELOPMENT BENEFITS
- ------------------------------------------------------------------------------------------------------------------------------------
1. SOFTWARE
Access to Evaluation Software Pool (for customer NA NA
evaluations)
Free "Not-For-Resale" Software (for internal use only) Group Developer Pack - 5 (GDP-5): Group Developer Pack - 10 (GDP-10):
$[ * * * ] MSRP $[ * * * ] MSRP
NFR Software Updates (with paid program renewal) Yes Yes
Automatic Inclusion in Beta Programs No Yes
Additional NFR Software (for internal use only) [ * * * ]% discount (purchased [ * * * ]% discount (purchased
from SilverStream) from SilverStream)
- ------------------------------------------------------------------------------------------------------------------------------------
2. SALES SUPPORT
ISV Lead Referrals (as available) No Yes
Joint Sales Presentations with SilverStream Field Sales No Yes
(in new as well as existing accounts)
- ------------------------------------------------------------------------------------------------------------------------------------
3. TECHNICAL SUPPORT
Technical Support Level Level 2 Level 2
Free Support Incidents No 5 annually
Discount on Additional Support Incidents [ * * * ]% [ * * * ]%
Access to private Support area of SilverStream Web Site Yes Yes
Access to private Partner newsgroup on SilverStream No Yes
Web Site
Toll-Free Technical Support Hotline No Limited
- ------------------------------------------------------------------------------------------------------------------------------------
4. TRAINING
Partner and Product Training
- SilverStream University Partner Training $[ * * * ] for SE track, $[ * * * ] $[ * * * ] for SE track, $[ * * * ]
for Application Engineering track for Application Engineering track
- SilverStream Programming Fundamentals Course At a SilverStream public At a SilverStream public
training center training center
Access to private Training area of SilverStream No Yes
Web Site
- ------------------------------------------------------------------------------------------------------------------------------------
5. MARKETING SUPPORT
Private Partner "Micro-Site" in conjunction with No Limited; at SilverStream's
discretion
SilverStream Web Site
Market Development Funds (subject to advance approval) No Limited; at SilverStream's
discretion
Participation in Trade Shows (as available) No Limited; at SilverStream's
discretion
Access to SilverStream prospect database via bonded No Limited; at SilverStream's
mailhouse (for mailings, etc.) discretion
Promotion of Partner Services to other SilverStream No Yes
Partners
Discounts on CD-based SilverStream demos No Yes
Free Product Literature No 50 SilverStream product brochures
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER BENEFITS
- ------------------------------------------------------------------------------------------------------------------------------------
1. REFERENCE MATERIALS/COMMUNICATIONS
SilverStream Partner Manual Yes Yes
SilverStream Partner Electronic News Bulletins Yes Yes
Discounts to attend SilverStream User Conference No Yes
Free copy of Third-Party SilverStream Reference Books No Yes
(as available)
- ------------------------------------------------------------------------------------------------------------------------------------
2. INCENTIVE PROGRAMS
Notification of special product bundles with No Yes
SilverStream Distributors and Co-Marketing Partners
Participation in Partner Incentive Programs run by No Yes
SilverStream
Leverage SilverStream Co-Marketing and Co-Selling No Yes
Partners
- ------------------------------------------------------------------------------------------------------------------------------------
3. AFFILIATION/IDENTIFICATION
SilverStream On-Line Applications Catalog Listing Listing + Profile + Sterling Logo
(as appropriate)
Use of SilverStream Partner logo (according to Yes Yes
published guidelines)
SilverStream Partner Plaque No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 22
<TABLE>
<S> <C> <C>
SILVERSTREAM INDEPENDENT SOFTWARE VENDORS (ISV) PARTNER PROGRAM OVERVIEW 10/1/98
- ------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT B
Program Requirements SILVER ISV STERLING ISV
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL REQUIREMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
1. BUSINESS FOCUS Focus on Fortune 2000 and small Focus on Fortune 1000 or selected
businesses verticals
- ------------------------------------------------------------------------------------------------------------------------------------
2. OTHER AFFILIATIONS / CERTIFICATIONS (RECOMMENDED) Microsoft Site Builder Network, Microsoft Site Builder Network,
Certified Professional Certified Professional
Netscape Worldwide Affiliate Netscape Worldwide Affiliate,
Lotus Business Partner Solution Expert
(Member/Qualified Levels) Lotus Business Partner
JavaSoft Developer (Premium Level)
JavaSoft Developer
Oracle Developer
Powersoft PowerChannel
- ------------------------------------------------------------------------------------------------------------------------------------
INFRASTRUCTURE REQUIREMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
1. TRAINING (SILVERSTREAM CERTIFICATION AND AUTHORIZATION) Required: Required:
Individuals become "Certified" by: SilverStream Programming Fundamentals SilverStream Programming
- Attending appropriate training course(s) Course Fundamentals Course
- Submitting Certification application 1 attendee 2 attendees
- Passing Certification exam
Partner organizations with the appropriate number of SilverStream University Partner SilverStream University Partner
"Certified" individuals become "Authorized" Training Training
Partner must maintain appropriate number of 1 attendee, Application Engineering 1 attendee, Application
Certifications in order to maintain Authorization track Engineering track
Required number of Certified SilverStream Developers 1 2
- ------------------------------------------------------------------------------------------------------------------------------------
2. TECHNICAL SUPPORT First-line technical support for First-line technical support for
developed applications developed applications
Customer training for developed
applications
- ------------------------------------------------------------------------------------------------------------------------------------
3. INTERNET E-MAIL ACCESS Required Required
- ------------------------------------------------------------------------------------------------------------------------------------
ENROLLMENT REQUIREMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
1. Enrollment Open enrollment; SilverStream Open enrollment; SilverStream
acceptance required acceptance required
- ------------------------------------------------------------------------------------------------------------------------------------
2. DOCUMENTATION
Initial Enrollment Completed SilverStream Partner Completed SilverStream Partner
Application Application
Completed Credit Application Completed Credit Application
Signed Partner Agreement Signed Partner Agreement
(with appropriate Addenda) (with appropriate Addenda)
Copy of State Tax Exemption Copy of State Tax Exemption
Certificate Certificate
3 Customer References
Annual Sales/Business Plan
Annual Renewal Updated SilverStream Partner Updated SilverStream Partner
Application Application
Annual Sales/Business Plan
- ------------------------------------------------------------------------------------------------------------------------------------
3. FEES
Initial Enrollment Fee $[ * * * ] $[ * * * ]
Annual Renewal Fee $[ * * * ] $[ * * * ]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 23
- --------------------------------------------------------------------------------
SILVERSTREAM SOFTWARE
ISV PRICING
(ALL PRICES IN U.S. $)
- --------------------------------------------------------------------------------
EXHIBIT C
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ISV POLICIES:
See ISV Contract for details. Major provisions include:
1. ISV must create "bundled product" which embeds Silverstream products, and
cannot sell Silverstream products separately, nor as components
2. Specific ISV territory will be pre-defined as part of ISV Agreement
3. ISV must pay a mutually-agreed upon, non refundable pre-paid royalty to
Silverstream, plus $[***], to be forwarded by Silverstream to RSA
4. All ISV Agreements require:
Monthly sales out reports and royalty payments
Annual update assurance @ 15% of the most-recent pre-paid royalty
amount, payable in advance
A current Support Assurance contract (Level 2) during the entire term
of the ISV contract
5. Contract Term extension is available for ISVs meeting agreement terms (by
mutual agreement)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
ISV MAXIMUM
PRODUCT PRODUCT PRE-PAID DISCOUNT CONTRACT
CATEGORY CODE ROYALTY OFF MSRP TERM
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
ISV NA [ * * * ] [ * * * ] 5 years
ISV NA [ * * * ] [ * * * ] 1 year
ISV NA [ * * * ] [ * * * ] 1 year
ISV NA [ * * * ] [ * * * ] 1 year
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 24
1. LICENSE GRANT. SilverStream and its suppliers hereby grant you a personal,
non-exclusive, non-transferable license (the "License") to use the Software, and
Documentation, all in accordance with the terms and conditions of this
Agreement. SilverStream and its supplier retain title to all copyright,
trademarks, trade names and other intellectual property rights, in the Software
and Documentation. You are not granted any right, title, or interest in the
Software, or Documentation, except the right to use them in accordance with this
Agreement.
2. GENERAL USE LIMITATIONS. When operated, the Server Software included in
SilverStream Product I (identified above) must be resident only on ONE SERVER
computer and all sessions must run on the same one server computer. When
operated, the Server Software included in SilverStream Products II and III
(identified above) must be resident only on ONE SERVER computer. You may also
make a copy of the Software for backup and archival purposes. You may use the
Software included in SilverStream Products II and III in a multiple-user
arrangement or remote access arrangement (limited by the number of concurrent
sessions, or processors, as identified above, or on the product package, for
each such Package). You may not rent or lease the Software but you may transfer
the Software from one server computer to another provided the Software is in use
on only one server computer at a time. The Software is "in use" on a server
computer when it is loaded into temporary memory (i.e., RAM) or installed into
the permanent memory (e.g., hard disk, CD-ROM, or other storage device) of that
server computer.
NOTE ON JAVA SUPPORT. The Software contains support for program written in Java.
Java is not designed or intended for use in online control of aircraft, air
traffic, aircraft navigation or aircraft communications; or in the design,
construction, operation or maintenance of any nuclear facility. You acknowledge
that you are not licensed to use the Software for such purposes and you warrant
that you will not use the Software for such purposes.
3. COPYRIGHT. The Software is owned by SilverStream or its suppliers and is
protected by United States and other applicable copyright law and international
treaty provisions. Therefore, you may not copy (except as otherwise expressly
permitted by this Agreement or by United States and other applicable copyright
law) the Software and Documentation. Except as expressly permitted by this
Agreement, you may not modify, adapt, translate, decompile, disassemble, or
reverse engineer (except to the extent SilverStream is required by applicable
law to allow you to reverse engineer the Software) the Software in any manner,
you may not merge or embed the Software into any other computer program or work,
and you may not create derivative works of the Software or the Documentation.
4. SPECIFIC RESTRICTIONS. You may not remove or alter, and you shall reproduce
on any permitted copies, SilverStream's or its suppliers' copyright notices and
other intellectual property rights notices included in the Software or
Documentation.
If any Software or Documentation is acquired by or on behalf of a unit or agency
of the United States Government, the government agrees that such Software or
Documentation is "commercial computer software" or "commercial computer software
documentation" and that, absent a written agreement to the contrary, the
Government's rights with respect to such Software or Documentation are limited
by the terms of this License Agreement, pursuant to FAR ss. 12.212(a) and its
successors regulations and/or DFARS ss. 227.7202-1(a) and its successor
regulations, as applicable.
5. TERM. The License is effective upon your acceptance of these terms and
conditions by breaking the seal on the CD-ROM envelope and installing the
Software indicating acceptance and will continue in effect until terminated
either (a) by you, at any time by notifying SilverStream in writing, or (b)
automatically, upon your failure to comply with any term or condition of this
Agreement. You agree that, upon termination of this Agreement, you will promptly
destroy or return to SilverStream all copies of the disk, the Documentation or
the Software including copies made by or for you. You will purge or otherwise
remove all electronic and magnetic copies of the Software and Documentation from
any computer, storage medium, or other device on which the same may be stored or
maintained.
6. SUPPORT SERVICES. SilverStream may provide you with support services related
to the Software
Confidential 1998
<PAGE> 25
("Support Services") pursuant to a SilverStream Support Services Agreement. Any
supplemental software code provided to you as part of the Support Services shall
be considered part of the Software and subject to the terms and conditions of
this Agreement.
7. LIMITATION OF WARRANTIES. You assume responsibility for the selection of the
Software to achieve your intended results and for the installation and use of,
and the results obtained from, the Software. Neither SilverStream nor any of its
suppliers warrants that the functions or features contained in the Software will
meet your requirements or that the operation of the Software will be
uninterrupted or error free.
THE SOFTWARE AND MEDIA ARE BEING PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND.
SILVERSTREAM AND ITS SUPPLIERS HEREBY DISCLAIM ALL WARRANTIES, EXPRESS, IMPLIED,
OR STATUTORY INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES AS TO
RIGHT OF THIRD PARTIES OR NON-INFRINGEMENT. Some jurisdiction do not allow the
exclusion of implied warranties, so the above exclusion may not to you. This
warranty gives you specific legal rights, and you may also have other rights
which vary from jurisdiction to jurisdiction.
8. LIMITATION OF LIABILITY. To the maximum extent permitted by applicable law,
in no event shall SILVERSTREAM OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR EXEMPLARY DAMAGES WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION,
LOSS OF BUSINESS INFORMATION OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF THE USE
OF OR INABILITY TO USE THE SILVERSTREAM OR ITS SUPPLIERS HAVE BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. In any case, SilverStream's entire liability
under any provision of this Agreement shall be limited to the amount actually
paid by you for the SilverStream Products, provided however, if you have entered
into a SilverStream Support Services Agreement. SilverStream's entire liability
regarding Support Services shall be governed by the terms of that agreement.
Because some jurisdiction do not allow the exclusion or limitation of liability,
the above limitations may not apply to you.
9. TAXES. You agree to be responsible for and to pay, and to reimburse
SilverStream on request if SilverStream is required to pay, any sales, use, or
other tax (excluding any tax that is based on SilverStream's net income), duty,
or other charge of any kind or nature that is levied or imposed by any
governmental authority on your purchase of the SilverStream Product, the
License, or your use of the Software or Documentation.
10. EXPORT RESTRICTIONS. THIS LICENSE AGREEMENT IS EXPRESSLY MADE SUBJECT TO ANY
LAWS, REGULATIONS, ORDERS OR OTHER RESTRICTIONS ON THE EXPORT FROM THE UNITED
STATES OF AMERICA OF THE SILVERSTREAM PRODUCT (OR COMPONENTS THEREOF) OR OF
INFORMATION ABOUT THE SILVERSTREAM PRODUCT WHICH MAY BE IMPOSED FROM TIME BY THE
GOVERNMENT OF THE UNITED STATES OF AMERICA. NOTWITHSTANDING ANYTHING CONTAINED
IN THIS AGREEMENT TO THE CONTRARY, YOU SHALL NOT EXPORT OR RE-EXPORT, DIRECTLY
OR INDIRECTLY, ANY SILVERSTREAM PRODUCT (OR COMPONENT THEREOF) OR INFORMATION
PERTAINING THERETO TO ANY COUNTRY TO WHICH SUCH EXPORT OR RE-EXPORT IS
RESTRICTED OR PROHIBITED, OR AS TO WHICH SUCH GOVERNMENT OR ANY AGENCY THEREOF
REQUIRES AN EXPORT LICENSE OR OTHER GOVERNMENTAL APPROVAL AT THE TIME OF EXPORT
OR RE-EXPORT WITHOUT FIRST OBTAINING SUCH LICENSE OR APPROVAL.
11. GENERAL. This Agreement is the complete and exclusive statement of the
agreement between SilverStream and you, and this Agreement supersedes any prior
proposal, agreement, or communication, oral or written, pertaining to the
subject matter of this Agreement. This Agreement shall be governed by the laws
of the Commonwealth of Massachusetts and of the United States of America,
excluding (i) its conflicts of law principles, and (ii) the United National
Convention on Contracts for the International Sale of Goods. all questions
concerning the terms and conditions of this Agreement should be directed to
SilverStream in writing addressed to
Confidential 1998
<PAGE> 26
SilverStream Software, Inc., One Burlington Woods Drive, Burlington, MA 01803,
United States.
All disputes arising out of or relating to this Agreement shall be finally
settled by arbitration under the rules of commercial arbitration of the American
Arbitration Association ("Rules"). Both parties shall bear equally the cost of
the arbitration (exclusive of legal fees and expenses, all of which each party
shall bear separately). All decisions of the arbitrator(s) shall be final and
binding on both parties and enforceable in any court of competent jurisdiction.
NOTWITHSTANDING THE FOREGOING, IN THE EVENT OF A BREACH BY A PARTY OF ITS
OBLIGATIONS HEREUNDER, THE NON-BREACHING PARTY MAY SEEK INJUNCTIVE OR OTHER
EQUITABLE RELIEF IN ANY COURT OF COMPETENT JURISDICTION. YOU ACKNOWLEDGE THAT
INFRINGEMENT OR UNAUTHORIZED COPYING WOULD CAUSE IRREPARABLE HARM TO
SILVERSTREAM.
Confidential 1998
<PAGE> 1
Exhibit 10.9
[GREYROCK BUSINESS CREDIT LOGO]
LOAN AND SECURITY AGREEMENT
BORROWER: CWC INCORPORATED
ADDRESS: 1983 PREMIER DRIVE, P.O. BOX 4459
MANKATO, MINNESOTA 56002
DATE: JULY 31, 1998
This Loan and Security Agreement is entered into on the above date between
GREYROCK BUSINESS CREDIT, a Division of NationsCredit Commercial Corporation
(GBC), whose address is 10880 Wilshire Blvd., Suite 950, Los Angeles, CA 90024
and the borrower named above (BORROWER), whose chief executive office is located
at the above address (BORROWER'S ADDRESS). The Schedule to this Agreement (the
SCHEDULE) being signed concurrently is an integral part of this Agreement.
(Definitions of certain terms used in this Agreement are set forth in Section 8
below.)
1. LOANS.
1.1 LOANS. GBC will make loans to Borrower (the LOANS), in amounts
determined by GBC in its sole discretion, up to the amounts (the CREDIT LIMIT)
shown on the Schedule, provided no Default or Event of Default has occurred and
is continuing. If at any time or for any reason the total of all outstanding
Loans and all other Obligations exceeds the Credit Limit, Borrower shall
immediately pay the amount of the excess to GBC, without notice or demand.
1.2 INTEREST. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement or in another written agreement signed by GBC and
Borrower. Interest shall be payable monthly, on the last day of the month.
Interest may, in GBC's discretion, be charged to Borrower's loan account, and
the same shall thereafter bear interest at the same rate as the other Loans.
1.3 FEES. Borrower shall pay GBC the fee(s) shown on the Schedule,
which are in addition to all interest and other sums payable to GBC and are not
refundable.
2. SECURITY INTEREST.
2.1 SECURITY INTEREST. To secure the payment and performance of all of
the Obligations when due, Borrower hereby grants to GBC a security interest in
all of Borrower's interest in the following, whether now owned or hereafter
acquired, and wherever located (collectively, the COLLATERAL): All Inventory,
Equipment, Receivables, and General Intangibles, including, without limitation,
all of Borrower's Deposit Accounts, all money, all collateral in which GBC is
granted a security interest pursuant to any other present or future agreement,
all property now or at any time in the future in GBC's possession, and all
proceeds (including proceeds of any insurance policies, proceeds of proceeds and
claims against third parties), all products of the foregoing, and all books and
records related to any of the foregoing.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
In order to induce GBC to enter into this Agreement and to make Loans,
Borrower represents and warrants to GBC as follows, and Borrower covenants that
the following representations will continue to be true, and that Borrower will
at all times comply with all of the following covenants:
3.1 CORPORATE EXISTENCE AND AUTHORITY. Borrower, if a corporation, is
and will continue to be, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. Borrower is and will
continue to be qualified and licensed to do business in all jurisdictions in
which any failure to do so would have a material adverse effect on Borrower. The
execution, delivery and performance by Borrower of this Agreement, and all other
documents contemplated hereby (i) have been duly and validly authorized, (ii)
are enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally), (iii) do not violate Borrower's articles or certificate of
incorporation, or Borrower's by-laws, or any law or any material agreement or
instrument which is binding upon Borrower or its property, and (iv) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any material agreement or instrument which is binding upon Borrower or its
property.
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<PAGE> 2
3.2 NAME; TRADE NAMES AND STYLES. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are all
prior names of Borrower and all of Borrower's present and prior trade names.
Borrower shall give GBC 30 days' prior written notice before changing its name
or doing business under any other name. Borrower has complied, and will in the
future comply, with all laws relating to the conduct of business under a
fictitious business name.
3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in
the heading to this Agreement is Borrower's chief executive office. In addition,
Borrower has places of business and Collateral is located only at the locations
set forth on the Schedule. Borrower will give GBC at least 30 days prior written
notice before opening any additional place of business, changing its chief
executive office, or moving any of the Collateral to a location other than
Borrower's Address or one of the locations set forth on the Schedule.
3.4 TITLE TO COLLATERAL; PERMITTED LIENS. Borrower is now, and will at
all times in the future be, the sole owner of all the Collateral, except for
items of Equipment which are leased by Borrower. The Collateral now is and will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for Permitted Liens. GBC now has, and
will continue to have, a first-priority perfected and enforceable security
interest in all of the Collateral, subject only to the Permitted Liens, and
Borrower will at all times defend GBC and the Collateral against all claims of
others. So long as any Loan is outstanding which is a term loan, none of the
Collateral now is or will be affixed to any real property in such a manner, or
with such intent, as to become a fixture. Borrower is not and will not become a
lessee under any real property lease pursuant to which the lessor may obtain any
rights in any of the Collateral and no such lease now prohibits, restrains,
impairs or will prohibit, restrain or impair Borrower's right to remove any
Collateral from the leased premises. Whenever any Collateral is located upon
premises in which any third party has an interest (whether as owner, mortgagee,
beneficiary under a deed of trust, lien or otherwise), Borrower shall, whenever
requested by GBC, use its best efforts to cause such third party to execute and
deliver to GBC, in form acceptable to GBC, such waivers and subordinations as
GBC shall specify, so as to ensure that GBC's rights in the Collateral are, and
will continue to be, superior to the rights of any such third party. Borrower
will keep in full force and effect, and will comply with all the terms of, any
lease of real property where any of the Collateral now or in the future may be
located.
3.5 MAINTENANCE OF COLLATERAL. Borrower will maintain the Collateral in
good working condition, ordinary wear and tear excepted, and Borrower will not
use the Collateral for any unlawful purpose. Borrower will immediately advise
GBC in writing of any material loss or damage to the Collateral.
3.6 BOOKS AND RECORDS. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.
3.7 FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial
statements now or in the future delivered to GBC have been, and will be,
prepared in conformity with generally accepted accounting principles and now and
in the future will completely and fairly reflect the financial condition of
Borrower, at the times and for the periods therein stated. Between the last date
covered by any such statement provided to GBC and the date hereof, there has
been no material adverse change in the financial condition or business of
Borrower. Borrower is now and will continue to be solvent.
3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has
timely filed, and will timely file, all tax returns and reports required by
applicable law, and Borrower has timely paid, and will timely pay, all
applicable taxes, assessments, deposits and contributions now or in the future
owed by Borrower. Borrower may, however, defer payment of any contested taxes,
provided that Borrower (i) in good faith contests Borrower's obligation to pay
the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (ii) notifies GBC in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral. Borrower is unaware of any claims or adjustments proposed for any of
Borrower's prior tax years which could result in additional taxes becoming due
and payable by Borrower. Borrower has paid, and shall continue to pay all
amounts necessary to fund all present and future pension, profit sharing and
deferred compensation plans in accordance with their terms, and Borrower has not
and will not withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any
such plan which could result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or any other governmental
agency. Borrower shall, at all times, utilize the services of an outside payroll
service providing for the automatic deposit of all payroll taxes payable by
Borrower.
3.9 COMPLIANCE WITH LAW. Borrower has complied, and will comply, in all
material respects, with all provisions of all applicable laws and regulations,
including, but not limited to, those relating to Borrower's ownership of real or
personal property, the conduct and licensing of Borrower's business, and all
environmental matters.
3.10 LITIGATION. Except as disclosed in the Schedule, there is no
claim, suit, litigation, proceeding or investigation pending or (to best of
Borrower's knowledge) threatened by or against or affecting Borrower in any
court or before any governmental agency (or any basis therefor known to
Borrower) which may result, either separately or in the aggregate, in any
material adverse change in the financial condition or business of Borrower, or
in any
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<PAGE> 3
material impairment in the ability of Borrower to carry on its business in
substantially the same manner as it is now being conducted. Borrower will
promptly inform GBC in writing of any claim, proceeding, litigation or
investigation in the future threatened or instituted by or against Borrower
involving any single claim of $50,000 or more, or involving $100,000 or more in
the aggregate.
3.11 USE OF PROCEEDS. All proceeds of all Loans shall be used solely
for lawful business purposes.
4. RECEIVABLES.
4.1 REPRESENTATIONS RELATING TO RECEIVABLES. Borrower represents and
warrants to GBC as follows: Each Receivable with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made,
represent an undisputed, bona fide, existing, unconditional obligation of the
Account Debtor created by the sale, delivery, and acceptance of goods or the
rendition of services, in the ordinary course of Borrower's business.
4.2 REPRESENTATIONS RELATING TO DOCUMENTS AND LEGAL COMPLIANCE.
Borrower represents and warrants to GBC as follows: All statements made and all
unpaid balances appearing in all invoices, instruments and other documents
evidencing the Receivables are and shall be true and correct and all such
invoices, instruments and other documents and all of Borrower's books and
records are and shall be genuine and in all respects what they purport to be,
and all signatories and endorsers have the capacity to contract. All sales and
other transactions underlying or giving rise to each Receivable shall comply
with all applicable laws and governmental rules and regulations. All signatures
and indorsements on all documents, instruments, and agreements relating to all
Receivables are and shall be genuine, and all such documents, instruments and
agreements are and shall be legally enforceable in accordance with their terms.
4.3 SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. Borrower shall
deliver to GBC transaction reports and loan requests, schedules and assignments
of all Receivables, and schedules of collections, all on GBC's standard forms;
provided, however, that Borrower's failure to execute and deliver the same shall
not affect or limit GBC's security interest and other rights in all of
Borrower's Receivables, nor shall GBC's failure to advance or lend against a
specific Receivable affect or limit GBC's security interest and other rights
therein. Together with each such schedule and assignment, or later if requested
by GBC, Borrower shall furnish GBC with copies (or, at GBC's request, originals)
of all contracts, orders, invoices, and other similar documents, and all
original shipping instructions, delivery receipts, bills of lading, and other
evidence of delivery, for any goods the sale or disposition of which gave rise
to such Receivables, and Borrower warrants the genuineness of all of the
foregoing. Borrower shall also furnish to GBC an aged accounts receivable trial
balance in such form and at such intervals as GBC shall request. In addition,
Borrower shall deliver to GBC the originals of all instruments, chattel paper,
security agreements, guarantees and other documents and property evidencing or
securing any Receivables, immediately upon receipt thereof and in the same form
as received, with all necessary indorsements.
4.4 COLLECTION OF RECEIVABLES. Borrower shall have the right to collect
all Receivables, unless and until a Default or an Event of Default has occurred.
Borrower shall hold all payments on, and proceeds of, Receivables in trust for
GBC, and Borrower shall deliver all such payments and proceeds to GBC, within
one business day after receipt of the same, in their original form, duly
endorsed, to be applied to the Obligations in such order as GBC shall determine.
4.5 DISPUTES. Borrower shall notify GBC promptly of all disputes or
claims relating to Receivables on the regular reports to GBC. Borrower shall not
forgive, or settle any Receivable for less than payment in full, or agree to do
any of the foregoing, except that Borrower may do so, provided that: (i)
Borrower does so in good faith, in a commercially reasonable manner, in the
ordinary course of business, and in arm's length transactions, which are
reported to GBC on the regular reports provided to GBC; (ii) no Default or Event
of Default has occurred and is continuing; and (iii) taking into account all
such settlements and forgiveness, the total outstanding Loans and other
Obligations will not exceed the Credit Limit.
4.6 RETURNS. Provided no Event of Default has occurred and is
continuing, if any Account Debtor returns any Inventory to Borrower in the
ordinary course of its business, Borrower shall promptly determine the reason
for such return and promptly issue a credit memorandum to the Account Debtor in
the appropriate amount (sending a copy to GBC. In the event any attempted return
occurs after the occurrence of any Event of Default, Borrower shall (i) not
accept any return without GBC's prior written consent, (ii) hold the returned
Inventory in trust for GBC, (iii) segregate all returned Inventory from all of
Borrower's other property, (iv) conspicuously label the returned Inventory as
GBC's property, and (v) immediately notify GBC of the return of any Inventory,
specifying the reason for such return, the location and condition of the
returned Inventory, and on GBC's request deliver such returned Inventory to GBC.
4.7 VERIFICATION. GBC may, from time to time, verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Receivables, by means of mail, telephone or otherwise, either in the name of
Borrower or GBC or such other name as GBC may choose, and GBC or its designee
may, at any time, notify Account Debtors that it has a security interest in the
Receivables.
4.8 NO LIABILITY. GBC shall not under any circumstances be responsible
or liable for any shortage or discrepancy in, damage to, or loss or destruction
of, any goods, the sale or other disposition of which gives rise to a
Receivable, or for any error, act, omission, or delay of any kind occurring in
the settlement, failure to settle,
-3-
<PAGE> 4
collection or failure to collect any Receivable, or for settling any Receivable
in good faith for less than the full amount thereof, nor shall GBC be deemed to
be responsible for any of Borrower's obligations under any contract or agreement
giving rise to a Receivable. Nothing herein shall, however, relieve GBC from
liability for its own gross negligence or willful misconduct.
5. ADDITIONAL DUTIES OF THE BORROWER.
5.1 INSURANCE. Borrower shall, at all times, insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to GBC, in such form and amounts as GBC may
reasonably require, and Borrower shall provide evidence of such insurance to
GBC, so that GBC is satisfied that such insurance is, at all times, in full
force and effect. All such insurance policies shall name GBC as an additional
loss payee, and shall contain a lenders loss payee endorsement in form
reasonably acceptable to GBC. Upon receipt of the proceeds of any such
insurance, GBC shall apply such proceeds in reduction of the Obligations as GBC
shall determine in its sole discretion, except that, provided no Default or
Event of Default has occurred and is continuing, GBC shall release to Borrower
insurance proceeds with respect to Equipment totaling less than $100,000, which
shall be utilized by Borrower for the replacement of the Equipment with respect
to which the insurance proceeds were paid. GBC may require reasonable assurance
that the insurance proceeds so released will be so used. If Borrower fails to
provide or pay for any insurance, GBC may, but is not obligated to, obtain the
same at Borrower's expense. Borrower shall promptly deliver to GBC copies of all
reports made to insurance companies.
5.2 REPORTS. Borrower, at its expense, shall provide GBC with the
written reports set forth in the Schedule, and such other written reports with
respect to Borrower (including budgets, sales projections, operating plans and
other financial documentation), as GBC shall from time to time reasonably
specify.
5.3 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times, and
on one business day's notice, GBC, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy Borrower's books and
records. GBC shall take reasonable steps to keep confidential all information
obtained in any such inspection or audit, but GBC shall have the right to
disclose any such information to its auditors, regulatory agencies, and
attorneys, and pursuant to any subpoena or other legal process. The foregoing
inspections and audits shall be at Borrower's expense and the charge therefor
shall be $600 per person per day (or such higher amount as shall represent GBC's
then current standard charge for the same), plus reasonable out-of-pockets
expenses. Borrower shall not be charged more than $3,000 per audit (plus
reasonable out-of-pockets expenses), nor shall audits * be done more frequently
than ** times per calendar year, provided that the foregoing limits ***, shall
not apply after the occurrence of a Default or Event of Default, nor shall they
restrict GBC's right to conduct audits at its own expense (whether or not a
Default or Event of Default has occurred). Borrower will not enter into any
agreement with any accounting firm, service bureau or third party to store
Borrower's books or records at any location other than Borrower's Address,
without first obtaining GBC's written consent, which may be conditioned upon
such accounting firm, service bureau or other third party agreeing to give GBC
the same rights with respect to access to books and records and related rights
as GBC has under this Agreement.
* FOR WHICH THE BORROWER IS RESPONSIBLE FOR PAYMENT
** TWO
*** INCLUDING, WITHOUT LIMITATION, AS TO PAYMENT OF FEES AND FREQUENCY OF AUDITS
5.4 REMITTANCE OF PROCEEDS. All proceeds arising from the sale or other
disposition of any Collateral shall be delivered, in kind, by Borrower to GBC in
the original form in which received by Borrower not later than the following
business day after receipt by Borrower, to be applied to the Obligations in such
order as GBC shall determine; provided that, if no Default or Event of Default
has occurred and is continuing, and if no term loan is outstanding hereunder,
then Borrower shall not be obligated to remit to GBC the proceeds of the sale of
Equipment which is sold in the ordinary course of business, in a good-faith
arm's length transaction. Except for the proceeds of the sale of Equipment as
set forth above, Borrower shall not commingle proceeds of Collateral with any of
Borrower's other funds or property, and shall hold such proceeds separate and
apart from such other funds and property and in an express trust for GBC.
Nothing in this Section limits the restrictions on disposition of Collateral set
forth elsewhere in this Agreement.
5.5 NEGATIVE COVENANTS. Except as may be permitted in the Schedule,
Borrower shall not, without GBC's prior written consent, do any of the
following: (i) merge or consolidate with another corporation or entity,* ; (ii)
acquire any assets, except in the ordinary course of business; (iii) enter into
any other transaction outside the ordinary course of business; (iv) sell or
transfer any Collateral, except that, provided no Default or Event of Default
has occurred and is continuing, Borrower may (a) sell finished Inventory in the
ordinary course of Borrower's business, and (b) if no term loan is outstanding
hereunder, sell Equipment in the ordinary course of business, in good-faith
arm's length transactions; (v) store any Inventory or other Collateral with any
warehouseman or other third party; (vi) sell any Inventory on a sale-or-return,
guaranteed sale, consignment, or other contingent basis; (vii) make any loans of
any money or other assets **; (viii) incur any debts, outside the ordinary
course of business, which would have a material, adverse effect on Borrower or
on the prospect of repayment of the Obligations; (ix) guarantee or otherwise
become liable with respect to the obligations of another party or entity; (x)
pay or declare any dividends on Borrower's stock (except for dividends payable
solely in stock of Borrower); (xi) redeem, retire, purchase or otherwise
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<PAGE> 5
acquire, directly or indirectly, any of Borrower's stock; (xii) make any change
in Borrower's capital structure which would have a material adverse effect on
Borrower or on the prospect of repayment of the Obligations; or (xiii) dissolve
or elect to dissolve; or (xiv) agree to do any of the foregoing.
* EXCEPT THAT THE BORROWER MAY MERGE OR CONSOLIDATE WITH ANOTHER CORPORATION OR
ENTITY IF THE BORROWER IS THE SURVIVING CORPORATION IN THE MERGER OR
CONSOLIDATION AND THE AGGREGATE VALUE OF THE ASSETS ACQUIRED THEREIN DO NOT
EXCEED 25% OF BORROWER'S TANGIBLE NET WORTH (AS OF THE END OF THE MONTH PRIOR TO
THE EFFECTIVE DATE OF THE MERGER, AND THE ASSETS OF THE CORPORATION OR ENTITY
ACQUIRED IN SUCH TRANSACTION ARE NOT SUBJECT TO ANY LIENS OR ENCUMBRANCES,
EXCEPT PERMITTED LIENS
** OTHER THAN TO MAKE PERSONAL HARDSHIP LOANS TO THE EMPLOYEES OF THE BORROWER
PROVIDED THAT (1) THE MAXIMUM AMOUNT OF ALL SUCH LOANS TO ANY ONE EMPLOYEE DOES
NOT EXCEED $20,000 AND (2) THE AGGREGATE AMOUNT OF ALL SUCH LOANS OUTSTANDING AT
ANY ONE TIME WITH RESPECT TO ALL EMPLOYEES IS NOT IN EXCESS OF $100,000
5.6 LITIGATION COOPERATION. Should any third-party suit or proceeding
be instituted by or against GBC with respect to any Collateral or in any manner
relating to Borrower, Borrower shall, without expense to GBC, make available
Borrower and its officers, employees and agents, and Borrower's books and
records, without charge, to the extent that GBC may deem them reasonably
necessary in order to prosecute or defend any such suit or proceeding.
5.7 NOTIFICATION OF CHANGES. Borrower will promptly notify GBC in
writing of any change in its officers or directors, the opening of any new bank
account or other deposit account, and any material adverse change in the
business or financial affairs of Borrower.
5.8 FURTHER ASSURANCES. Borrower agrees, at its expense, on request by
GBC, to execute all documents and take all actions, as GBC may deem reasonably
necessary or useful in order to perfect and maintain GBC's perfected security
interest in the Collateral, and in order to fully consummate the transactions
contemplated by this Agreement.
5.9 INDEMNITY. Borrower hereby agrees to indemnify GBC and hold GBC
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, costs and expenses (including
attorneys' fees), of every nature, character and description, which GBC may
sustain or incur based upon or arising out of any of the Obligations, any actual
or alleged failure to collect and pay over any withholding or other tax relating
to Borrower or its employees, any relationship or agreement between GBC and
Borrower, any actual or alleged failure of GBC to comply with any writ of
attachment or other legal process relating to Borrower or any of its property,
or any other matter, cause or thing whatsoever occurred, done, omitted or
suffered to be done by GBC relating to Borrower or the Obligations (except any
such amounts sustained or incurred as the result of the gross negligence or
willful misconduct of GBC or any of its directors, officers, employees, agents,
attorneys, or any other person affiliated with or representing GBC.
Notwithstanding any provision in this Agreement to the contrary, the indemnity
agreement set forth in this Section shall survive any termination of this
Agreement and shall for all purposes continue in full force and effect.
6. TERM.
6.1 MATURITY DATE. This Agreement shall continue in effect until the
maturity date set forth on the Schedule (the MATURITY DATE); provided that the
Maturity Date shall automatically be extended, and this Agreement shall
automatically and continuously renew, for successive additional terms of one
year each, unless one party gives written notice to the other, not less than
sixty days prior to the next Maturity Date, that such party elects to terminate
this Agreement effective on the next Maturity Date.
6.2 EARLY TERMINATION. This Agreement may be terminated prior to the
Maturity Date as follows: (i) by Borrower, effective three business days after
written notice of termination is given to GBC; or (ii) by GBC at any time after
the occurrence of an Event of Default, without notice, effective immediately. If
this Agreement is terminated by Borrower or by GBC under this Section 6.2,
Borrower shall pay to GBC a termination fee (the TERMINATION FEE) in the amount
shown on the Schedule *. The Termination Fee shall be due and payable on the
effective date of termination and thereafter shall bear interest at a rate equal
to the highest rate applicable to any of the Obligations.
* PROVIDED THAT IF A TERMINATION ARISES THAT OTHERWISE WOULD RESULT IN THE
OBLIGATION TO PAY THE TERMINATION FEE AND SUCH TERMINATION OCCURS SOLELY BECAUSE
OF A REFINANCING OF THE OBLIGATIONS HEREUNDER BY A GBC AFFILIATE ENTITY, THEN
SUCH TERMINATION FEE SHALL NOT APPLY UNDER SUCH CIRCUMSTANCES AND UNDER SUCH
CIRCUMSTANCES ONLY.
6.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such Obligations are otherwise then due and payable.
Without limiting the generality of the foregoing, if on the Maturity Date, or on
any earlier effective date of termination, there are any outstanding letters of
credit issued based upon an application, guarantee, indemnity or similar
agreement on the part of GBC, then on such date Borrower shall provide to GBC
cash collateral in an amount equal to 110% of the face amount of all such
letters of credit plus all interest, fees and costs due or (in GBC's estimation)
likely to become due in connection therewith, to secure all of the Obligations
relating to said letters of credit, pursuant to GBC's then standard form cash
pledge agreement. Notwithstanding any termination of this Agreement, all of
GBC's security interests in all of the Collateral and all of
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the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided
that, without limiting the fact that Loans are subject to the discretion of GBC,
GBC may, in its sole discretion, refuse to make any further Loans after
termination. No termination shall in any way affect or impair any right or
remedy of GBC, nor shall any such termination relieve Borrower of any Obligation
to GBC, until all of the Obligations have been paid and performed in full. Upon
payment and performance in full of all the Obligations and termination of this
Agreement, GBC shall promptly deliver to Borrower termination statements,
requests for reconveyances and such other documents as may be reasonably
required to terminate GBC's security interests.
7. EVENTS OF DEFAULT AND REMEDIES.
7.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an EVENT OF DEFAULT under this Agreement, and Borrower shall
give GBC immediate written notice thereof: (a) Any warranty, representation,
statement, report or certificate made or delivered to GBC by Borrower or any of
Borrower's officers, employees or agents, now or in the future, shall be untrue
or misleading in a material respect; or (b) Borrower shall fail to pay when due
any Loan or any interest thereon or any other monetary Obligation; or (c) the
total Loans and other Obligations outstanding at any time shall exceed the
Credit Limit; or (d) Borrower shall fail to perform any non-monetary Obligation
which by its nature cannot be cured; or (e) Borrower shall fail to perform any
other non-monetary Obligation, which failure is not cured within 5 business days
after the date performance is due; or (f) any levy, assessment, attachment,
seizure, lien or encumbrance (other than a Permitted Lien) is made on all or any
part of the Collateral which is not cured within * days after the occurrence of
the same; or (g) any default or event of default occurs under any obligation
secured by a Permitted Lien, which is not cured within any applicable cure
period or waived in writing by the holder of the Permitted Lien; or (h) Borrower
breaches any material contract or obligation, which has or may reasonably be
expected to have a material adverse effect on Borrower's business or financial
condition; or (i) dissolution, termination of existence, insolvency or business
failure of Borrower or any Guarantor; or appointment of a receiver, trustee or
custodian, for all or any part of the property of, assignment for the benefit of
creditors by, or the commencement of any proceeding by Borrower or any Guarantor
under any reorganization, bankruptcy, insolvency, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, now or in
the future in effect; or (j) the commencement of any proceeding against Borrower
or any Guarantor under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 45 days after the date commenced; or (k) revocation or
termination of, or limitation or denial of liability upon, any guaranty of the
Obligations or any attempt to do any of the foregoing; or (l) revocation or
termination of, or limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset pledged by any
third party to secure any or all of the Obligations, or any attempt to do any of
the foregoing, or commencement of proceedings by or against any such third party
under any bankruptcy or insolvency law; or (m) Borrower makes any payment on
account of any indebtedness or obligation which has been subordinated to the
Obligations other than as permitted in the applicable subordination agreement,
or if any Person who has subordinated such indebtedness or obligations
terminates or in any way limits or terminates its subordination agreement; or
(n) there shall be a change in the record or beneficial ownership of an
aggregate of more than ** of the outstanding shares of stock of Borrower, in one
or more transactions, compared to the ownership of outstanding shares of stock
of Borrower in effect on the date hereof, without the prior written consent of
GBC; or (o) Borrower shall generally not pay its debts as they become due, or
Borrower shall conceal, remove or transfer any part of its property, with intent
to hinder, delay or defraud its creditors, or make or suffer any transfer of any
of its property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or (p) there shall be a material adverse change in
Borrower's business or financial condition. GBC may cease making any Loans
hereunder during any of the above cure periods, and thereafter if an Event of
Default has occurred.
* 20
** 50%, PROVIDED, FURTHER, NOTHING IN THIS SUBSECTION (n) SHALL ACT TO PROHIBIT
THE INITIAL PUBLIC OFFERING OF THE BORROWER
7.2 REMEDIES. Upon the occurrence and during the continuance of any
Event of Default, and at any time thereafter, GBC, at its option, and without
notice or demand of any kind (all of which are hereby expressly waived by
Borrower), may do any one or more of the following: (a) Cease making Loans or
otherwise extending credit to Borrower under this Agreement or any other
document or agreement; (b) Accelerate and declare all or any part of the
Obligations to be immediately due, payable, and performable, notwithstanding any
deferred or installment payments allowed by any instrument evidencing or
relating to any Obligation; (c) Take possession of any or all of the Collateral
wherever it may be found, and for that purpose Borrower hereby authorizes GBC
without judicial process to enter onto any of Borrower's premises without
interference to search for, take possession of, keep, store, or remove any of
the Collateral, and remain on the premises or cause a custodian to remain on the
premises in exclusive control thereof, without charge for so long as GBC deems
it reasonably necessary in order to complete the enforcement of its rights under
this Agreement or any other agreement; provided, however, that should GBC seek
to take possession of any of the Collateral by Court
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process, Borrower hereby irrevocably waives: (i) any bond and any surety or
security relating thereto required by any statute, court rule or otherwise as an
incident to such possession; (ii) any demand for possession prior to the
commencement of any suit or action to recover possession thereof; and (iii) any
requirement that GBC retain possession of, and not dispose of, any such
Collateral until after trial or final judgment; (d) Require Borrower to assemble
any or all of the Collateral and make it available to GBC at places designated
by GBC which are reasonably convenient to GBC and Borrower, and to remove the
Collateral to such locations as GBC may deem advisable; (e) Complete the
processing, manufacturing or repair of any Collateral prior to a disposition
thereof and, for such purpose and for the purpose of removal, GBC shall have the
right to use Borrower's premises, vehicles, hoists, lifts, cranes, equipment and
all other property without charge; (f) Sell, lease or otherwise dispose of any
of the Collateral, in its condition at the time GBC obtains possession of it or
after further manufacturing, processing or repair, at one or more public and/or
private sales, in lots or in bulk, for cash, exchange or other property, or on
credit, and to adjourn any such sale from time to time without notice other than
oral announcement at the time scheduled for sale. GBC shall have the right to
conduct such disposition on Borrower's premises without charge, for such time or
times as GBC deems reasonable, or on GBC's premises, or elsewhere and the
Collateral need not be located at the place of disposition. GBC may directly or
through any affiliated company purchase or lease any Collateral at any such
public disposition, and if permissible under applicable law, at any private
disposition. Any sale or other disposition of Collateral shall not relieve
Borrower of any liability Borrower may have if any Collateral is defective as to
title or physical condition or otherwise at the time of sale; (g) Demand payment
of, and collect any Receivables and General Intangibles comprising Collateral
and, in connection therewith, Borrower irrevocably authorizes GBC to endorse or
sign Borrower's name on all collections, receipts, instruments and other
documents, to take possession of and open mail addressed to Borrower and remove
therefrom payments made with respect to any item of the Collateral or proceeds
thereof, and, in GBC's sole discretion, to grant extensions of time to pay,
compromise claims and settle Receivables, General Intangibles and the like for
less than face value; and (h) Demand and receive possession of any of Borrower's
federal and state income tax returns and the books and records utilized in the
preparation thereof or referring thereto. All reasonable attorneys' fees,
expenses, costs, liabilities and obligations incurred by GBC with respect to the
foregoing shall be added to and become part of the Obligations, shall be due on
demand, and shall bear interest at a rate equal to the highest interest rate
applicable to any of the Obligations. Without limiting any of GBC's rights and
remedies, from and after the occurrence of any Event of Default, the interest
rate applicable to the Obligations shall be increased by an additional four
percent per annum.
7.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. Borrower and
GBC agree that a sale or other disposition (collectively, SALE) of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to
Borrower at least * days prior to the sale, and, in the case of a public sale,
notice of the sale is published at least seven days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by GBC,
with or without the Collateral being present; (iv) The sale commences at any
time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price in cash
or by cashier's check or wire transfer is required; (vi) With respect to any
sale of any of the Collateral, GBC may (but is not obligated to) direct any
prospective purchaser to ascertain directly from Borrower any and all
information concerning the same. GBC shall be free to employ other methods of
noticing and selling the Collateral, in its discretion, if they are commercially
reasonable.
* TEN
7.4 POWER OF ATTORNEY. Upon the occurrence and during the continuance
of any Event of Default, without limiting GBC's other rights and remedies,
Borrower grants to GBC an irrevocable power of attorney coupled with an
interest, authorizing and permitting GBC (acting through any of its employees,
attorneys or agents) at any time, at its option, but without obligation, with or
without notice to Borrower, and at Borrower's expense, to do any or all of the
following, in Borrower's name or otherwise, but GBC agrees to exercise the
following powers in a commercially reasonable manner: (a) Execute on behalf of
Borrower any documents that GBC may, in its sole discretion, deem advisable in
order to perfect and maintain GBC's security interest in the Collateral, or in
order to exercise a right of Borrower or GBC, or in order to fully consummate
all the transactions contemplated under this Agreement, and all other present
and future agreements; (b) Execute on behalf of Borrower any document
exercising, transferring or assigning any option to purchase, sell or otherwise
dispose of or to lease (as lessor or lessee) any real or personal property which
is part of GBC's Collateral or in which GBC has an interest; (c) Execute on
behalf of Borrower, any invoices relating to any Receivable, any draft against
any Account Debtor and any notice to any Account Debtor, any proof of claim in
bankruptcy, any Notice of Lien, claim of mechanic's, materialman's or other
lien, or assignment or satisfaction of mechanic's, materialman's or other lien;
(d) Take control in any manner of any cash or non-cash items of payment or
proceeds of Collateral; endorse the name of Borrower upon any instruments, or
documents, evidence of payment or Collateral that may come into GBC's
possession; (e) Endorse all checks and other forms of remittances received by
GBC; (f) Pay, contest or settle any lien, charge, encumbrance, security interest
and adverse claim in or to any of the Collateral, or any judgment based thereon,
or otherwise take any action to
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terminate or discharge the same; (g) Grant extensions of time to pay, compromise
claims and settle Receivables and General Intangibles for less than face value
and execute all releases and other documents in connection therewith; (h) Pay
any sums required on account of Borrower's taxes or to secure the release of any
liens therefor, or both; (i) Settle and adjust, and give releases of, any
insurance claim that relates to any of the Collateral and obtain payment
therefor; (j) Instruct any third party having custody or control of any books or
records belonging to, or relating to, Borrower to give GBC the same rights of
access and other rights with respect thereto as GBC has under this Agreement;
and (k) Take any action or pay any sum required of Borrower pursuant to this
Agreement and any other present or future agreements. Any and all reasonable
sums paid and any and all reasonable costs, expenses, liabilities, obligations
and reasonable attorneys' fees incurred by GBC with respect to the foregoing
shall be added to and become part of the Obligations, shall be payable on
demand, and shall bear interest at a rate equal to the highest interest rate
applicable to any of the Obligations. In no event shall GBC's rights under the
foregoing power of attorney or any of GBC's other rights under this Agreement be
deemed to indicate that GBC is in control of the business, management or
properties of Borrower.
7.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any
sale or other disposition of the Collateral shall be applied by GBC first to the
reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by GBC in the exercise of its rights under this Agreement, second to
the interest due upon any of the Obligations, and third to the principal of the
Obligations, in such order as GBC shall determine in its sole discretion. Any
surplus shall be paid to Borrower or other persons legally entitled thereto;
Borrower shall remain liable to GBC for any deficiency. If GBC, in its sole
discretion, directly or indirectly enters into a deferred payment or other
credit transaction with any purchaser at any sale of Collateral, GBC shall have
the option, exercisable at any time, in its sole discretion, of either reducing
the Obligations by the principal amount of purchase price or deferring the
reduction of the Obligations until the actual receipt by GBC of the cash
therefor.
7.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set
forth in this Agreement, GBC shall have all the other rights and remedies
accorded a secured party under the California Uniform Commercial Code and under
all other applicable laws, and under any other instrument or agreement now or in
the future entered into between GBC and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
GBC of one or more of its rights or remedies shall not be deemed an election,
nor bar GBC from subsequent exercise or partial exercise of any other rights or
remedies. The failure or delay of GBC to exercise any rights or remedies shall
not operate as a waiver thereof, but all rights and remedies shall continue in
full force and effect until all of the Obligations have been fully paid and
performed.
8. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
ACCOUNT DEBTOR means the obligor on a Receivable.
AFFILIATE means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.
AGREEMENT and THIS AGREEMENT means this Loan and Security Agreement and
all modifications and amendments thereto, extensions thereof, and replacements
therefor.
BUSINESS DAY means a day on which GBC is open for business.
CODE means the Uniform Commercial Code as adopted and in effect in the
State of California from time to time.
COLLATERAL has the meaning set forth in Section 2.1 above.
DEFAULT means any event which with notice or passage of time or both,
would constitute an Event of Default.
DEPOSIT ACCOUNT has the meaning set forth in Section 9105 of the Code.
ELIGIBLE RECEIVABLES means unconditional Receivables arising in the
ordinary course of Borrower's business from the completed sale of goods or
rendition of services, which GBC, in its sole judgment, shall deem eligible for
borrowing, based on such considerations as GBC may from time to time deem
appropriate.
EQUIPMENT means all of Borrower's present and hereafter acquired
machinery, molds, machine tools, motors, furniture, equipment, furnishings,
fixtures, trade fixtures, motor vehicles, tools, parts, dyes, jigs, goods and
other tangible personal property (other than Inventory) of every kind and
description used in Borrower's operations or owned by Borrower and any interest
in any of the foregoing, and all attachments, accessories, accessions,
replacements, substitutions, additions or improvements to any of the foregoing,
wherever located.
EVENT OF DEFAULT means any of the events set forth in Section 7.1 of
this Agreement.
GENERAL INTANGIBLES means all general intangibles of Borrower, whether
now owned or hereafter created or acquired by Borrower, including, without
limitation, all choses in action, causes of action, corporate or other business
records, Deposit Accounts, inventions, designs, drawings, blueprints, patents,
patent applications, trademarks and the goodwill of the business symbolized
thereby, names, trade names, trade secrets, goodwill, copyrights, registrations,
licenses, franchises, customer lists, security and other deposits, rights in all
litigation presently or hereafter pending for any cause or claim
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(whether in contract, tort or otherwise), and all judgments now or hereafter
arising therefrom, all claims of Borrower against GBC, rights to purchase or
sell real or personal property, rights as a licensor or licensee of any kind,
royalties, telephone numbers, proprietary information, purchase orders, and all
insurance policies and claims (including life insurance, key man insurance,
credit insurance, liability insurance, property insurance and other insurance),
tax refunds and claims, computer programs, discs, tapes and tape files, claims
under guaranties, security interests or other security held by or granted to
Borrower, all rights to indemnification and all other intangible property of
every kind and nature (other than Receivables).
GUARANTOR means any Person who has guaranteed any of the Obligations.
INVENTORY means all of Borrower's now owned and hereafter acquired
goods, merchandise or other personal property, wherever located, to be furnished
under any contract of service or held for sale or lease (including all raw
materials, work in process, finished goods and goods in transit), and all
materials and supplies of every kind, nature and description which are or might
be used or consumed in Borrower's business or used in connection with the
manufacture, packing, shipping, advertising, selling or finishing of such goods,
merchandise or other personal property, and all warehouse receipts, documents of
title and other documents representing any of the foregoing.
OBLIGATIONS means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to GBC, whether evidenced by this Agreement or any note
or other instrument or document, whether arising from an extension of credit,
opening of a letter of credit, banker's acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including, without
limitation, those acquired by assignment and any participation by GBC in
Borrower's debts owing to others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges, expenses, fees, attorney's
fees, expert witness fees, audit fees, letter of credit fees, loan fees,
termination fees, minimum interest charges and any other sums chargeable to
Borrower under this Agreement or under any other present or future instrument or
agreement between Borrower and GBC.
PERMITTED LIENS means the following: (i) purchase money security
interests in specific items of Equipment; (ii) leases of specific items of
Equipment; (iii) liens for taxes not yet payable; (iv) additional security
interests and liens which are subordinate to the security interest in favor of
GBC and are consented to in writing by GBC (which consent shall not be
unreasonably withheld); (v) security interests being terminated substantially
concurrently with this Agreement; (vi) liens of materialmen, mechanics,
warehousemen, carriers, or other similar liens arising in the ordinary course of
business and securing obligations which are not delinquent; (vii) liens incurred
in connection with the extension, renewal or refinancing of the indebtedness
secured by liens of the type described above in clauses (i) or (ii) above,
provided that any extension, renewal or replacement lien is limited to the
property encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase; (viii)
Liens in favor of customs and revenue authorities which secure payment of
customs duties in connection with the importation of goods. GBC will have the
right to require, as a condition to its consent under subparagraph (iv) above,
that the holder of the additional security interest or lien sign an
intercreditor agreement on GBC's then standard form, acknowledge that the
security interest is subordinate to the security interest in favor of GBC, and
agree not to take any action to enforce its subordinate security interest so
long as any Obligations remain outstanding, and that Borrower agree that any
uncured default in any obligation secured by the subordinate security interest
shall also constitute an Event of Default under this Agreement.
PERSON means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.
RECEIVABLES means all of Borrower's now owned and hereafter acquired
accounts (whether or not earned by performance), letters of credit, contract
rights, chattel paper, instruments, securities, documents and all other forms of
obligations at any time owing to Borrower, all guaranties and other security
therefor, all merchandise returned to or repossessed by Borrower, and all rights
of stoppage in transit and all other rights or remedies of an unpaid vendor,
lien or secured party.
OTHER TERMS. All accounting terms used in this Agreement, unless
otherwise indicated, shall have the meanings given to such terms in accordance
with generally accepted accounting principles, consistently applied. All other
terms contained in this Agreement, unless otherwise indicated, shall have the
meanings provided by the Code, to the extent such terms are defined therein.
9. GENERAL PROVISIONS.
9.1 INTEREST COMPUTATION. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by GBC (including
proceeds of Receivables and payment of the Obligations in full) shall be deemed
applied by GBC on account of the Obligations three Business Days after receipt
by GBC of immediately available funds. GBC shall not, however, be required to
credit Borrower's account for the amount of any item of payment which is
unsatisfactory to GBC in its discretion, and GBC may charge Borrower's Loan
account for the amount of any item of payment which is returned to GBC unpaid.
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9.2 APPLICATION OF PAYMENTS. All payments with respect to the
Obligations may be applied, and in GBC's sole discretion reversed and
re-applied, to the Obligations, in such order and manner as GBC shall determine
in its sole discretion.
9.3 CHARGES TO ACCOUNT. GBC may, in its discretion, require that
Borrower pay monetary Obligations in cash to GBC, or charge them to Borrower's
Loan account, in which event they will bear interest at the same rate applicable
to the Loans.
9.4 MONTHLY ACCOUNTINGS. GBC shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by GBC, unless Borrower
notifies GBC in writing to the contrary within sixty days after each account is
rendered, describing the nature of any alleged errors or admissions.
9.5 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, or certified mail return receipt
requested, addressed to GBC or Borrower at the addresses shown in the heading to
this Agreement, or at any other address designated in writing by one party to
the other party. All notices shall be deemed to have been given upon delivery in
the case of notices personally delivered, or at the expiration of one business
day following delivery to the private delivery service, or two business days
following the deposit thereof in the United States mail, with postage prepaid.
9.6 SEVERABILITY. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.
9.7 INTEGRATION. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between Borrower and GBC and supersede all
prior and contemporaneous negotiations and oral representations and agreements,
all of which are merged and integrated in this Agreement. THERE ARE NO ORAL
UNDERSTANDINGS, REPRESENTATIONS OR AGREEMENTS BETWEEN THE PARTIES WHICH ARE NOT
SET FORTH IN THIS AGREEMENT OR IN OTHER WRITTEN AGREEMENTS SIGNED BY THE PARTIES
IN CONNECTION HEREWITH.
9.8 WAIVERS. The failure of GBC at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and GBC shall not waive or
diminish any right of GBC later to demand and receive strict compliance
therewith. Any waiver of any default shall not waive or affect any other
default, whether prior or subsequent, and whether or not similar. None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to GBC shall be deemed to have been waived by
any act or knowledge of GBC or its agents or employees, but only by a specific
written waiver signed by an authorized officer of GBC and delivered to Borrower.
Borrower waives demand, protest, notice of protest and notice of default or
dishonor, notice of payment and nonpayment, release, compromise, settlement,
extension or renewal of any commercial paper, instrument, account, General
Intangible, document or guaranty at any time held by GBC on which Borrower is or
may in any way be liable, and notice of any action taken by GBC, unless
expressly required by this Agreement.
9.9 AMENDMENT. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of GBC.
9.10 TIME OF ESSENCE. Time is of the essence in the performance by
Borrower of each and every obligation under this Agreement.
9.11 ATTORNEYS FEES AND COSTS. Borrower shall reimburse GBC for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by GBC, pursuant to, or in
connection with, or relating to this Agreement (whether or not a lawsuit is
filed), including, but not limited to, any reasonable attorneys' fees and costs
GBC incurs in order to do the following: prepare and negotiate this Agreement
and the documents relating to this Agreement; obtain legal advice in connection
with this Agreement or Borrower; enforce, or seek to enforce, any of its rights;
prosecute actions against, or defend actions by, Account Debtors; commence,
intervene in, or defend any action or proceeding; initiate any complaint to be
relieved of the automatic stay in bankruptcy; file or prosecute any probate
claim, bankruptcy claim, third-party claim, or other claim; examine, audit,
copy, and inspect any of the Collateral or any of Borrower's books and records;
protect, obtain possession of, lease, dispose of, or otherwise enforce GBC's
security interest in, the Collateral; and otherwise represent GBC in any
litigation relating to Borrower. If either GBC or Borrower files any lawsuit
against the other predicated on a breach of this Agreement, the prevailing party
in such action shall be entitled to recover its reasonable costs and attorneys'
fees, including (but not limited to) reasonable attorneys' fees and costs
incurred in the enforcement of, execution upon or defense of any order, decree,
award or judgment. All attorneys' fees and costs to which GBC may be entitled
pursuant to this Paragraph shall immediately become part of Borrower's
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations.
9.12 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and GBC; provided,
-10-
<PAGE> 11
however, that Borrower may not assign or transfer any of its rights under this
Agreement without the prior written consent of GBC, and any prohibited
assignment shall be void. No consent by GBC to any assignment shall release
Borrower from its liability for the Obligations.
9.13 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
Person. their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.
9.14 LIMITATION OF ACTIONS. Any claim or cause of action by Borrower
against GBC, its directors, officers, employees, agents, accountants or
attorneys, based upon, arising from, or relating to this Loan Agreement, or any
other present or future document or agreement, or any other transaction
contemplated hereby or thereby or relating hereto or thereto, or any other
matter, cause or thing whatsoever, occurred, done, omitted or suffered to be
done by GBC, its directors, officers, employees, agents, accountants or
attorneys, shall be barred unless asserted by Borrower by the commencement of an
action or proceeding in a court of competent jurisdiction by the filing of a
complaint within * after the first act, occurrence or omission upon which such
claim or cause of action, or any part thereof, is based, and the service of a
summons and complaint on an officer of GBC, or on any other person authorized to
accept service on behalf of GBC, within thirty (30) days thereafter. Borrower
agrees that such one-year period is a reasonable and sufficient time for
Borrower to investigate and act upon any such claim or cause of action. The
one-year period provided herein shall not be waived, tolled, or extended except
by the written consent of GBC in its sole discretion. This provision shall
survive any termination of this Loan Agreement or any other present or future
agreement.
* TWO YEARS
9.15 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used
in this Agreement for convenience. Borrower and GBC acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. The term
"including", whenever used in this Agreement, shall mean "including (but not
limited to)". This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against GBC or Borrower under any rule of
construction or otherwise.
9.16 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts
and transactions hereunder and all rights and obligations of GBC and Borrower
shall be governed by the laws of the State of California. As a material part of
the consideration to GBC to enter into this Agreement, Borrower (i) agrees that
all actions and proceedings relating directly or indirectly to this Agreement
shall, at GBC's option, be litigated in courts located within California, and
that the exclusive venue therefor shall be Los Angeles County; (ii) consents to
the jurisdiction and venue of any such court and consents to service of process
in any such action or proceeding by personal delivery or any other method
permitted by law; and (iii) waives any and all rights Borrower may have to
object to the jurisdiction of any such court, or to transfer or change the venue
of any such action or proceeding.
9.17 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND GBC EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN GBC AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF GBC OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH GBC OR BORROWER, IN ALL
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
Borrower:
CWC INCORPORATED
By: /s/ Richard C. Lueck
-------------------------------
President or Vice President
By: /s/ Richard C. Lueck
-------------------------------
Secretary or Ass't Secretary
GBC:
GREYROCK BUSINESS CREDIT,
a Division of NationsCredit Commercial
Corporation
By: /s/ [Signature Illegible]
-------------------------------
Title: President
-----------------------------
-11-
<PAGE> 12
[GREYROCK BUSINESS CREDIT LOGO]
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: CWC INCORPORATED
ADDRESS: 1983 PREMIER DRIVE, P.O. BOX 4459
MANKATO, MINNESOTA 56002
DATE: JULY 31, 1998
This Schedule is an integral part of the Loan and Security Agreement between
GREYROCK BUSINESS CREDIT, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
(GBC) and the above-borrower (Borrower) of even date.
================================================================================
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of: (i) $5,000,000
at any one time outstanding; or (ii) 80% of the
amount of Borrower's Eligible Receivables (as defined
in Section 8 above).
================================================================================
2. INTEREST.
INTEREST RATE (Section 1.2):
A rate equal to the "Prime Rate" plus 2.00% per
annum, calculated on the basis of a 360-day year for
the actual number of days elapsed. The interest rate
applicable to all Loans shall be adjusted monthly as
of the first day of each month, and the interest to
be charged for each month shall be based on the
highest "Prime Rate" in effect during said month, but
in no event shall the rate of interest charged on any
Loans in any month be less than 8% per annum. "Prime
Rate" means the actual "Reference Rate" or the
substitute therefor of the Bank of America NT & SA
whether or not that rate is the lowest interest rate
charged by said bank. If the Prime Rate, as defined,
is unavailable, "Prime Rate" shall mean the highest
of the prime rates published in the Wall Street
Journal on the first business day of the month, as
the base rate on corporate loans at large U.S. money
center commercial banks.
================================================================================
-1-
<PAGE> 13
================================================================================
3. FEES (Section 1.3/Section 6.2):
Loan Fee: $40,000, payable concurrently herewith.
Termination Fee: $6,000 per month for each month (or portion thereof)
from the effective date of termination to the
Maturity Date.
Unused Line Fee: In any month (or portion thereof at the beginning and
end of the term hereof), the average daily principal
balance of the Loans outstanding during such month is
less than $5,000,000, or if the Credit Limit is
increased above such amount then such increased
amount ($5,000,000 or such increased amount being the
"Credit Limit Amount"), Borrower shall pay GBC an
unused line fee in an amount equal to 0.50% per annum
on the difference between the Credit Limit Amount and
the average daily principal balance of the Loans
outstanding during such month, which unused line fee
shall be computed and paid monthly, in arrears, on
the first day of the following month.
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
================================================================================
4. MATURITY DATE
(Section 6.1): July 31, 1999, subject to automatic renewal as
provided in Section 6.1 above, and early termination
as provided in Section 6.2 above.
================================================================================
5. REPORTING.
(Section 5.2):
Borrower shall provide GBC with the following:
1. Annual financial statements, as soon as available, and in any event
within 90 days following the end of Borrower's fiscal year,
certified by independent certified public accountants acceptable to
GBC.
2. Quarterly unaudited financial statements, as soon as available, and
in any event within 30 days after the end of each fiscal quarter of
Borrower.
3. Monthly unaudited financial statements, as soon as available, and
in any event within 30 days after the end of each month.
4. Monthly Receivable agings, aged by invoice date, within 10 days
after the end of each month.
5. Monthly accounts payable agings, aged by invoice date, and
outstanding or held check registers within 10 days after the end of
each month.
-2-
<PAGE> 14
================================================================================
6. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): Clear With Computers, Inc., Quality Disk
Copy, Inc.
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2): N/A
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2): CWC Inc., Clear With Computers, Clear With
Computers, Inc.
OTHER LOCATIONS AND
ADDRESSES (Section 3.3): None.
MATERIAL ADVERSE
ITIGATION (Section 3. 10): None
-3-
<PAGE> 15
================================================================================
7. OTHER COVENANTS:
Borrower shall at all times comply with all of the
following additional covenants:
(1) COPYRIGHT SECURITY AGREEMENT. Concurrently
herewith, Borrower shall execute and deliver to
GBC a security agreement regarding its
copyrightable subject matter regarding its
computer software products, which shall include,
without limitation, requirements regarding the
registration of such items with the United
States Copyright Office.
(2) ADDITIONAL REPRESENTATION AND COVENANT. Borrower
hereby represents and warrants to GBC that it
has no assets with a value greater than $25,000
in any state other than Minnesota, and that no
subsidiary of Borrower has any material assets
whatsoever. Further, Borrower hereby covenants
that (a) prior to its placement of any assets in
any state other than Minnesota or (b) prior to
any of Borrower's subsidiaries acquiring any
material assets, Borrower will notify GBC in
writing 30 days prior thereto and await
instructions from GBC concerning the execution
of additional documentation by Borrower or
Borrower's subsidiaries, as the case may be, in
order for GBC to establish and perfect a
security interest in any such assets in such
locations with respect to the Borrower or with
respect to Borrower's subsidiaries.
Borrower: GBC:
CWC INCORPORATED GREYROCK BUSINESS CREDIT,
a Division of NationsCredit
Commercial Corporation
By: /s/ Richard C. Lueck
-------------------------------- By: /s/ [Signature Illegible]
President or Vice President -------------------------------
By: /s/ Richard C. Lueck Title: President
-------------------------------- ---------------------------
Secretary of Ass't Secretary
-4-
<PAGE> 16
[FIREPOND LETTERHEAD]
September 4, 1998
Greyrock Capital
(formerly known as Greyrock Business Credit)
10880 Wilshire Blvd., Suite 950
Los Angeles, California 90024
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement between you ("GC") and the
undersigned ("Borrower") dated July 31, 1998 (the "Loan Agreement") and the
documents and agreements relating thereto (with the Loan Agreement, the "Loan
Documents"). (Capitalized terms used in this Agreement, which are not defined,
shall have the meanings set forth in the Loan Agreement.). This will confirm our
agreement as follows:
1. ADDITION TO PERMITTED LIENS. The definition of Permitted Liens as
set forth in the Loan Agreement is hereby amended to included, without
limitation, a cash deposit of the Borrower in an amount up to $750,000 that is
to be held as collateral by a financial institution that is issuing a letter of
credit in favor of Liberty Property Limited Partnership, a Pennsylvania limited
partnership, in connection with tenant improvements regarding the Borrower's
leased premises at 10400 Southwest Crossing Building, Eden Prairie, Minnesota.
2. GENERAL. As herein expressly modified in the Loan Agreement shall
continue in full force and effect and the same is hereby ratified and confirmed.
This letter agreement and the other Loan Documents set forth in full all of the
representations and agreements of the parties with respect to the subject matter
hereof and supersede all prior discussions, oral representations, oral
agreements and oral understandings between the parties with respect to the
subject matter hereof. This letter agreement may not be modified or amended, nor
may any rights hereunder be waived, except in a writing signed by the parties
hereto.
Sincerely yours,
CWC INCORPORATED
By: /s/ Thomas F. Carretta
-------------------------------
Title: General Counsel
Accepted and agreed:
GREYROCK CAPITAL,
a Division of NationsCredit Commercial
Corporation
By: /s/ [Signature Illegible]
---------------------------------
Title: President
------------------------------
1983 Premier Dirve - P.O. Box 4459 - Mankato, MN 56002-4459 - Tel: 507.388.5000
- Fax: 507.345.6579 - www.cwcinc.com
<PAGE> 1
Exhibit 10.9.1
[GREYROCK LOGO]
AMENDMENT TO LOAN DOCUMENTS
BORROWER: FIREPOND, INC. (FORMERLY CWC INCORPORATED)
ADDRESS: 1983 PREMIER DRIVE
MANKATO, MINNESOTA 56002
DATE: JUNE 24, 1999
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between GREYROCK
CAPITAL, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION (formerly Greyrock
Business Credit) ("Greyrock"), whose address 10980 Wilshire Blvd., Suite 1850,
Los Angeles CA 90024 and the borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement between
them, dated July 31, 1998 (as previously amended, if at all, the "Loan
Agreement"), as follows. (This Amendment, the Loan Agreement, any prior written
amendments to said agreements signed by Greyrock and the Borrower, and all other
written documents and agreements between Greyrock and the Borrower are referred
to herein collectively as the "Loan Documents". Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.).
1. EXTENSION. The date "July 31, 1999" in Section 4 of the
Schedule is hereby replaced by the date "August 31, 1999", so that such section
reads as follows:
"4. MATURITY DATE
(Section 6.1) AUGUST 31, 1999, subject to automatic renewal as
provided in Section 6.1 above, and early termination
as provided in Section 6.2 above."
2. NOTICE OF TERMINATION. Effective from the date hereof through
August 31, 1999, the word "sixty" in Section 6.1 of the Loan Agreement is hereby
replaced by the word "thirty", so that such section reads as follows:
"6.1 MATURITY DATE, This Agreement shall continue in
effect until the maturity date set forth on the Schedule (the Maturity
Date); provided that the Maturity Date shall automatically be extended,
and this Agreement shall automatically and continuously renew, for
successive additional terms of one year each, unless one party gives
written notice to the other, not less than thirty days prior to the
next Maturity Date, that such- party elects to terminate this Agreement
effective on the next Maturity Date."
-1-
<PAGE> 2
Greyrock Capital Amendment to Loan Documents
- --------------------------------------------------------------------------------
In the event that no notice of termination is given by either party
effective on the Maturity Date which is August 31, 1999, and the Loan Agreement
thus automatically renews, then, effective September 1, 1999, the word "thirty"
in Section 6.1 of the Loan Agreement shall be replaced by the word "sixty", so
that such section will read as follows:
"6.1 MATURITY DATE. This Agreement shall continue in
effect until the maturity date set forth on the Schedule (the Maturity
Date); provided that the Maturity Date shall automatically be extended,
and this Agreement shall automatically and continuously renew, for
successive -additional terms of one year each, unless one party gives
written notice to the other, not less than sixty days prior to the next
Maturity Date, that such party elects to terminate this Agreement
effective on the next Maturity Date."
3. REPRESENTATIONS TRUE. Borrower represents and warrants to
Greyrock that all representations and warranties set forth in the Loan
Agreement, as amended hereby, are true and correct.
4. GENERAL PROVISIONS. This Amendment, the Loan Agreement, `and
the other Loan Documents set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, representations, agreements and understandings
between the parties with respect to the subject hereof. Except as herein
expressly amended, all of the terms and provisions of the Loan Agreement and the
other Loan Documents shall continue in full force and effect and the same are
hereby ratified and confirmed.
BORROWER: GREYROCK:
FIREPOND, INC. GREYROCK CAPITAL,
A DIVISION OF NATIONSCREDIT
COMMERCIAL CORPORATION
BY: /s/ Paul McDermott CFO BY: /s/ Signature Illegible
---------------------------- ------------------------------
PRESIDENT OR VICE PRESIDENT TITLE Senior Vice President
BY
----------------------------
SECRETARY OR ASS'T SECRETARY
-2-
<PAGE> 1
Exhibit 10.9.2
[GREYROCK LOGO]
AMENDMENT TO LOAN DOCUMENTS
BORROWER: FIREPOND, INC. (FORMERLY CWC INCORPORATED)
ADDRESS: 1983 PREMIER DRIVE
MANKATO, MINNESOTA 56002
Date: July 8, 1999
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between GREYROCK
CAPITAL, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION (formerly Greyrock
Business Credit) ("Greyrock"), whose address is 10880 Wilshire Blvd., Suite
1850, Los Angeles, CA 90024 and the borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement between
them, dated July 31, 1998 (as previously amended, if at all, the "Loan
Agreement"), as follows. (This Amendment, the Loan Agreement, any prior written
amendments to said agreements signed by Greyrock and the Borrower, and all other
written documents and agreements between Greyrock and the Borrower are referred
to herein collectively as the "Loan Documents". Capitalized terms used but not
defined in this Amendment, shall have the meanings set Fog in the Loan
Agreement.)
1. EXTENSION. The date "August 31, 1999" in Section 4 of the
Schedule is hereby replaced by the date "September 30,1999", so that Such
Section reads as follows;
"4 MATURITY DATE
(Section 6.1) SEPTEMBER 30, 1999, subject to automatic renewal as
provided in Section 6.1 above, and early termination
as provided in Section 6.2 above."
2. NOTICE OF TERMINATION. Effective from the date hereof through
September 30, 1999, the word "sixty", in Section 6.1 of the Loan Agreement is
hereby replaced by the word "thirty", so that such section reacts as follows:
"6.1 Maturity Date. This Agreement shall continue in effect
until the maturity date set forth -on the Schedule (the Maturity Date);
provided that the Maturity Date shall automatically be extended, and-
this Agreement shall automatically and continuously renew, for
successive additional terms of one year each, unless one party gives
written notice to the other, not less than thirty days prior to the
next Maturity Date, that such party elects to terminate this Agreement
effective on the next Maturity Date."
-1-
<PAGE> 2
Greyrock Capital Amendment to Loan Documents
- --------------------------------------------------------------------------------
In the event that no notice of termination is given by either party
effective on the Maturity Date which is September 30,1999, and the Loan
Agreement thus automatically renews, then, effective October 1, 1999, the word
"thirty" in Section 6.1 of the Loan Agreement shall be replaced by the word
"sixty", so that such section will read as follows:
"6.1 MATURITY DATE. This Agreement shall continue in effect
until the maturity date set forth on the Schedule (the MATURITY DATE);
provided that the Maturity Date shall automatically be extended, and
this Agreement shall automatically and continuously renew, for
successive additional terms of one year each, unless one party gives
written notice to the other, not less than sixty days prior to the next
Maturity Date, that such party elects to terminate this Agreement
effective on the next Maturity Date."
3. REPRESENTATIONS TRUE. Borrower represents and warrants to
Greyrock that all representations and warranties set forth in the Loan
Agreement, as amended hereby, are true and correct.
4. GENERAL PROVISIONS. This Amendment, the Loan Agreement, and
the other Loan Documents set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, representations, agreements and understandings
between the parties with respect to the subject hereof. Except as herein
expressly amended, all of the terms and provision's of the Loan Agreement and
the other Loan Documents shall continue in full force and effect and the same
are hereby ratified and confirmed.
BORROWER: GREYROCK:
FIREPOND, INC. GREYROCK CAPITAL,
A DIVISION OF NATIONSCREDIT
COMMERCIAL CORPORATION
BY: /s/ Paul McDermott BY: /s/ Signature Illegible
---------------------------- ------------------------------
PRESIDENT OR VICE PRESIDENT TITLE Senior Vice President
BY
----------------------------
SECRETARY OR ASS'T SECRETARY
-2-
<PAGE> 1
Exhibit 10.9.3
[GREYROCK CAPITAL LOGO]
AMENDMENT TO LOAN DOCUMENTS
Borrower: FirePond, Inc. (formerly CWC Incorporated)
Address: 890 Winter Street, Suite 300
Waltham, MA 02451
Date: September 29, 1999
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between Greyrock
Capital, a Division of Banc of America Commercial Finance Corporation (formerly
Greyrock Business Credit, a Division of NationsCredit Commercial Corporation)
("Greyrock"), whose address is 10880 Wilshire Blvd., Suite 1850, Los Angeles, CA
90024 and the borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement between
them, dated July 31, 1998 (as previously amended, the "Loan Agreement"), as
follows, effective as of the date hereof. (This Amendment, the Loan Agreement,
any prior written amendments to said agreements signed by Greyrock and Borrower,
and all other written documents and agreements between Greyrock and Borrower are
referred to herein collectively as the "Loan Documents". Capitalized terms used
but not defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.)
1. Maximum Credit. Section 1 of the Schedule is hereby amended in its
entirety to read as follows:
"1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of: (a)
$7,000,000 at any one time outstanding; or
(b) the sum of (i) and (ii) below:
(i) the lesser of (A) $5,000,000, or (B)
80% of the amount of Borrower's
Eligible Receivables (as defined in
Section 8 above); plus
(ii) The unpaid principal balance of the
Term Loan (defined below) outstanding
from time to time.
-1-
<PAGE> 2
TERM LOAN. Effective September 29,
1999, $2,000,000 of the Loans
outstanding on such date shall be
converted to a term loan (the "Term
Loan"). The entire unpaid principal
balance of the Term Loan and all other
Obligations shall be due and payable
on termination of this Agreement.
Accrued interest on the Term Loan
shall be paid monthly on the last day
of each month as provided in Section
1.2 above. The Term Loan may not be
repaid and reborrowed."
2. Extension. The date "October 31, 1999" in Section 4 of the Schedule
is hereby replaced by the date "October 31, 2000", so that such section reads as
follows:
"4. MATURITY DATE
(Section 6.1) October 31, 2000, subject to automatic
renewal as provided in Section 6.1 above,
and early termination as provided in Section
6.2 above."
3. Notice of Termination. Pursuant to that certain Amendment to Loan
Documents dated July 8, 1999, Section 6.1 of the Loan Agreement was amended in
its entirety to read as follows:
"6.1 Maturity Date. This Agreement shall continue in effect
until the maturity date set forth on the Schedule (the Maturity Date);
provided that the Maturity Date shall automatically be extended, and
this Agreement shall automatically and continuously renew, for
successive additional terms of one year each, unless one party gives
written notice to the other, not less than thirty days prior to the
next Maturity Date, that such party elects to terminate this Agreement
effective on the next Maturity Date."
This will confirm that the word "thirty" in Section 6.1 of the Loan
Agreement is hereby replaced by the word "sixty", so that such section is hereby
amended in its entirety to read as follows:
"6.1 Maturity Date. This Agreement shall continue in effect
until the maturity date set forth on the Schedule (the Maturity Date);
provided that the Maturity Date shall automatically be extended, and
this Agreement shall automatically and continuously renew, for
successive additional terms of one year each, unless one party gives
written notice to the other, not less than sixty days prior to the next
Maturity Date, that such party elects to terminate this Agreement
effective on the next Maturity Date."
4. Fee. In consideration for Greyrock entering into this Amendment,
Borrower shall concurrently pay Greyrock a fee in the amount of $20,000, which
shall be
-2-
<PAGE> 3
non-refundable and in addition to all interest and other fees payable to
Greyrock under the Loan Documents. Greyrock is authorized to charge said fee to
Borrower's loan account.
5. Representations True. Borrower represents and warrants to Greyrock
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.
6. General Provisions. This Amendment, the Loan Agreement, and the
other Loan Documents set forth in full all of the representations and agreements
of the parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement and the other Loan Documents
shall continue in full force and effect and the same are hereby ratified and
confirmed.
Borrower: Greyrock:
FIREPOND, INC. GREYROCK CAPITAL,
a Division of Banc of America
Commercial Finance Corporation
By /s/ Paul McDermott CFO
-------------------------------
President or Vice President By
-------------------------------
By /s/ Thomas Carretta Title
------------------------------- ----------------------------
Secretary or Ass't Secretary
-3-
<PAGE> 1
Exhibit 10.15
PRODUCTS USE AND GENERAL SERVICES
AGREEMENT
This Agreement dated as of this ___ day of __________, 19___ is entered
into by and between Clear with Computors, Inc., 1983 Premiere Drive, P.O. Box
4459 Mankato, Minnesota, 56002-4459, a corporation of the State of Minnesota,
hereinafter called "CWC", and General Motors Corporation, 3044 West Grand
Boulevard, Detroit, Michigan 48202, a corporation of the State of Delaware,
hereinafter referred to as "GM".
WHEREAS GM has heretofore acquired the services of CWC in developing
electronic sales and training systems.
WHEREAS CWC is now willing to develop, and GM is willing to procure, an
electronic sales and training system known as GM PROSPEC and related Products
and Services pursuant to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by CWC and GM, it is hereby agreed as follows:
1. DEFINITIONS. The following terms shall have the indicated meanings when
used with initial capital letters in this Agreement or any Statements
of Work entered into hereunder.
(a) "APPLICABLE SPECIFICATIONS" shall mean the functional,
performance, operational and compatibility characteristics of
the Product(s) as more fully set forth in the Statement of
Work.
(b) "ACCEPTANCE DATE" shall mean the date when all necessary
Documentation has been received, and the Product(s) have
successfully completed any relevant "Acceptance Test(s)"
conducted pursuant to a Statement of Work.
-1-
<PAGE> 2
(c) "ACCEPTANCE TESTS" shall mean the tests developed in
accordance with a Statement of Work used to demonstrate that
the Products perform in accordance with the Applicable
Specifications.
(d) "GM PROSPEC" shall mean the GM Sales Assistance Manager
Product as more fully described in the Statement of Work.
(e) "PRODUCTS" shall mean GM PROSPEC and such other computer
programs including, where applicable, object code (including
micro-code), source code, Documentation and any refinements,
enhancements, modifications, revisions, derivative works,
updates or releases related thereto, provided by CWC pursuant
to this Agreement.
(f) "DOCUMENTATION" shall mean Applicable Specifications, user
manuals, training materials, product descriptions, technical
manuals and supporting materials, and other printed
information relating to the Products, whether fully or
partially completed or distributed in print, electronic, or
video format, provided by CWC pursuant to this Agreement.
(g) "SERVICES" shall include, but not be limited to, consulting,
development, installation, training, support and maintenance
services, as the case may be, provided or to be provided by
CWC as more fully described in a Statement of Work.
(h) "STATEMENT(S) OF WORK" shall mean the documents substantially
in the format contained in Exhibit 1(h) which are mutually
agreed upon by the parties describing the detailed obligations
of the parties with respect to a Project.
(i) "PROJECT" shall mean an undertaking by CWC to develop a
Product(s) for GM.
(j) "COMPETITOR OF GM" shall be any entity doing business as a
motor vehicle manufacturer, assembler, or distributor anywhere
in North America, which entity, if required to report same,
would report revenues in any Standard Industrial
Classification Industry code or product class code published
by the Census Bureau ("SIC Code") in which GM is then
reporting revenues in the area of motor vehicle manufacturing
and assembly. As of the effective date of this Agreement GM is
reporting revenues in the following SIC Codes in the area of
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motor vehicle manufacturing and assembly (37111, 37116, 37117,
37118, 37119, 5012). Provided that the companies listed on
Exhibit 1(j) which are current clients of CWC reporting
revenues in SIC Code 37117, 37118, and 37119 shall not be
considered Competitors of GM for the medium and heavy duty
truck business covered by those SIC codes.
(k) "AUTHORIZED PURCHASING PERSONNEL" shall mean the members of
GM's Worldwide Purchasing and does not include GM's Project
Manager and, with respect to CWC, an executive identified by
CWC other than the CWC Project Manager.
(l) "PURCHASE ORDER" shall mean an order by GM which includes
terms and pricing which have been negotiated by Authorized
Purchasing Personnel of GM and CWC and references this
Agreement and a Statement of Work, and shall be effective upon
execution by a CWC Authorized Purchasing Personnel. "Purchase
Order" does not include any preprinted terms not expressly
negotiated by the parties and reference to this Agreement on
an Purchase Order shall be deemed to delete all standard terms
and conditions of GM's purchase order form, if such form is
used to transmit an Purchase Order, and all standard terms and
conditions found on CWC's acknowledgement form, if such form
is used to acknowledge a Purchase Order.
(m) "PROPRIETARY INFORMATION" shall mean information that relates
to the subject matter of this Agreement (i) which is in
written or other tangible form and is clearly and
conspicuously marked as confidential and proprietary or its
equivalent by the party which provides it to the other party,
or (ii) if disclosed in oral, visual or other non-written
form, is reduced to writing by the disclosing party and
transmitted to the recipient party, clearly and conspicuously
marked as confidential and proprietary within thirty (30) days
after such disclosure.
(n) "ORIGINAL INTENDED PURPOSE" shall mean the use of the
Product(s) for the purpose of helping Users learn about, sell
and/or buy products manufactured, distributed or sold by GM.
(o) "USER(S)" shall mean any GM employee, dealer, dealer
salesperson, customer, vendor or supplier who is authorized
under this Agreement to use Product(s) and who is operating at
retail, wholesale or any other level of distribution and
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is marketing, selling and/or buying products manufactured,
distributed or sold by GM.
(p) "DATA" means product data, algorithms or other product
information provided by GM for incorporation into Product(s).
2. SCOPE OF AGREEMENT AND ORDER OF PRECEDENCE
(a) SCOPE OF THIS AGREEMENT. This Agreement embodies the terms and
conditions negotiated by the parties which shall apply to each
Purchase Order or Statement of Work placed hereunder.
(b) ORDER OF PRECEDENCE. The parties intend that the provisions of
each Statement of Work and Purchase Order will be consistent
with those contained in this Agreement. However, in the event
such construction is not possible, the terms and conditions of
this Agreement shall prevail over those in the Statement of
Work (except where this Agreement has specifically stated that
the Statement of Work takes precedence) or Purchase Order and
the terms and conditions of a Statement of Work shall prevail
over those in a Purchase Order unless the conflicting
provision: in a Statement of Work or Purchase Order expressly
references the provision herein or in a Statement of Work to
be superseded or modified, and unless such Statement of Work
or Purchase Order has been signed by both GM and CWC
Authorized Purchasing Personnel.
3. PROVISION OF PRODUCTS AND SERVICES.
(a) GENERAL. CWC understands and acknowledges that any GM entity
may obtain Products and Services in accordance with this
Agreement.
(b) TIME AND MATERIALS SERVICES. Subject to a Statement of Work,
if available from CWC, GM may obtain on a time and materials
basis from CWC certain consulting, development and other
Services (excluding maintenance and support Services) agreed
upon by the parties in accordance with the following terms and
conditions:
(i) GM may specify on a Purchase Order the number and
names or skill levels of CWC employees ("Employees")
required to perform Services.
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In the event GM requests replacement of an Employee
or a proposed Employee, CWC shall, within ten (10)
working days of receipt of such notification from GM,
provide a substitute Employee of sufficient skill,
and training to perform the applicable Services. In
the event GM requests replacement of any Employee
within the first ten (10) days of such Employee's
commencement of Services, GM shall not be required to
pay for Services provided by such Employee and CWC
shall refund to GM all amounts paid for such
Employee's Services. If GM otherwise requests
replacement of an Employee, GM shall not be required
to pay for and shall be entitled to a refund of any
sums paid to CWC for such Employee's Services from
the date of GM's requested replacement of such
Employee.
(ii) CWC shall not replace any Employee, who has been
designated as a key Employee by GM ("Key Employee")
then currently performing Services without GM's
consent until the Statement of Work or Purchase Order
pursuant to which such Key Employee is providing
Services expires or is terminated. Notwithstanding
the foregoing, CWC may replace any Key Employee for
reasons relating to the Employee's termination with
CWC, promotion, illness, death, or causes beyond
CWC's control.
(iii) GM shall reimburse CWC for the reasonable direct
expenses (excluding overhead and fringe benefits) of
its Employees incurred in the performance of Services
if requested in advance and approved by GM. Expenses
related to travel, lodging, and meals shall be
reimbursed in accordance with GM's guidelines for its
own employees, as set forth in Exhibit 3(b)(iii).
(iv) CWC shall maintain records, for a period of three (3)
years following the performance of time and materials
Services, which adequately substantiate the
applicability and accuracy of charges for such
Services and related expenses to GM and shall, upon
receipt of reasonable advance notice from GM, produce
such records for audit by GM.
(v) Purchase Orders for Services provided or to be
provided under this Section may be canceled with a
thirty (30) day notice without charge or penalty,
upon written notice to CWC.
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(c) SERVICES IN GENERAL. In connection with the performance of any
Services pursuant to this Agreement:
(i) CWC warrants and agrees that Employees shall have
sufficient skill, knowledge, and training to perform
the Services and that the Services shall be performed
in a professional and workmanlike manner in
accordance with the highest reasonable commercially
applicable standards of the computer software
development industry.
(ii) Employees performing Services in the United States
must be United States citizens or lawfully admitted
in the United States for permanent residence or
lawfully admitted in the United States holding a visa
authorizing the performance of Services on behalf of
CWC.
(iii) CWC shall require all persons providing Services on
behalf of CWC, when at a GM location, to comply with
all applicable regulations and policies of GM
including, but not limited to, security regulations.
(iv) CWC shall provide for and pay the compensation and
other benefits of Employees including, but not
limited to, salary, health, accident and workers'
compensation benefits and shall pay all taxes and
contributions which an employer is required to pay
relating to the employment of employees.
(d) TIME OF PERFORMANCE. To the extent provided in a Statement of
Work, time is hereby expressly made of the essence with
respect to the specific items so provided for in the Statement
of Work. Therefore, to the extent necessary with respect to a
specific project, GM and CWC shall consider the use of
liquidated damages to help ensure timely performance.
4. PROJECT MANAGEMENT. For each Project, CWC and GM shall each designate a
project manager (the "Project Managers") who shall have the
responsibilities set forth herein and otherwise agreed upon by the
parties in the Statement of Work. Each Project Manager shall be
responsible for providing timely management decisions as required or
requested relating to the Project. The CWC Project Manager shall
provide to the GM Project Manager a written report of the status of the
Project as set forth in the
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Statement of Work. GM may also designate Divisional Representatives to
work with CWC on a specific Project.
5. APPROVAL OF DELIVERABLES. The CWC Project Manager shall submit each
item or task to be performed by CWC which must be approved by GM or
performed to the satisfaction of GM ("Deliverable") to the GM Project
Manager on or before the mutually agreed delivery date. within the time
frame mutually agreed upon by the parties in the Statement Of work, GM
shall approve or disapprove the Deliverable by providing written notice
to CWC. Any disapproval shall describe the ways in which the
Deliverable is unacceptable to GM and what corrections or improvements
are required by GM. CWC shall resubmit the Deliverable to GM for
approval as set forth herein, modified in accordance with GM's
directions, within the mutually established cure period. GM may extend
the period of time for resubmission of the Deliverable if CWC submits a
written request setting forth the specific reasons why CWC cannot
comply with the requirements together with a schedule of when CWC will
be able to resubmit the Deliverable. The parties agree that in order to
expedite the approval process, CWC may submit draft versions of a
Deliverable prior to the required date for the informal comment of the
GM Project Manager and any other relevant GM personnel. By approving a
Deliverable, GM represents only that it has reviewed the Deliverable
and detected no errors or omissions sufficient enough to warrant the
withholding or denial of payment, if any, for such Deliverable. GM's
approval of a Deliverable does not discharge CWC's obligation to
provide a completed Product that as a whole conforms to the Applicable
Specifications.
6. ACCEPTANCE OF PRODUCT(S).
(a) DELIVERY AND INSTALLATION. Immediately upon the completion of
each phase of a Project excluding maintenance services
enumerated and described in the Statements of Work, CWC shall
deliver the Product(s) and/or deliver all Documentation and
other materials required to be provided under such phase
including the Program Report provided for in Section 4
hereof). CWC shall notify GM when products are ready for
testing by GM.
(b) ACCEPTANCE TESTS. Within the time frame as set forth in the
Statement of Work after receipt of such notice, GM shall
perform the Acceptance Tests of the Product(s). In addition,
if applicable, upon completion of final phase of a Project,
the Acceptance Tests shall be performed on all products
comprising a
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Project as a whole in order to determine whether the
integration of the Product(s) and any necessary equipment
meets the Applicable Specifications and Acceptance Test
completion criteria for the Project set forth in the Statement
of Work and operates with internal consistency. If the
Products fail to meet any applicable Acceptance Tests, GM
shall forthwith notify CWC, and CWC shall, within the time
period set forth in the Statement of Work hereto, modify or
improve the Product(s) delivered to GM to ensure that the
Product(s) and the Project as a whole meet the Acceptance
Tests. GM shall thereafter have an additional test period of
equal duration to reconduct the Acceptance Tests. After a
reasonable number of acceptance tests failure of the
Product(s) to meet the aforesaid specifications and
performance standards after the additional set of Acceptance
Tests shall constitute a default by CWC under Section 14
hereof.
(c) ACCEPTANCE. GM shall notify CWC upon the Acceptance Date which
shall constitute Acceptance of the Products.
7. CHARGES, PRICES, AND FEES FOR PRODUCTS AND SERVICES.
(a) DETERMINATION. Charges, prices, and fees ("Charges") and
discounts, if any, for Products and Services related to each
Project shall be determined as set forth in the applicable
Statement of Work, in a Purchase Order, or as otherwise agreed
upon by the parties, unless modified as set forth herein, in
no event shall Charges exceed CWC's then current established
Charges.
(b) MODIFICATION TO CHARGES. Except as otherwise provided in the
Statement of Work, CWC shall provide to GM at least sixty (60)
days' prior written notice of a change in an established
Charge for Products or Services.
(i) Except as otherwise set forth herein, any increase in
a Charge 9a) shall not occur during the first twelve
(12) months of this Agreement, during the term of the
applicable Purchase Order or during the specified
period for performance of Services, whichever period
is longer, or occur more than once annually
thereafter, and (b) shall not exceed the percent
increase in the Consumer Price Index, U.S. city
Average, All Items published by the Bureau of Labor
Statistics of the United States
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Department of Labor "CPI" during the most recent
calendar year for which the CPI is available.
(ii) All Purchase Orders issued by GM prior to the end of
the required notice period will be honored at the
then current Charges so long as the scheduled
delivery date of the applicable Products or Services
is within ninety (90) days after the effective date
of the increase.
If CWC's established Charge on the scheduled delivery date is lower
than the established Charge for such Product or Service stated in the
applicable Purchase Order, then GM shall be entitled to obtain such
Product or Service at such lower Charge, less any applicable discount.
(c) PAYMENT. Payment by GM of the purchase price of Products or
Services for each Project shall be made to CWC in accordance
with the applicable Statement of Work. Provided, however, that
all payments for Product development Services shall be made to
CWC only upon successful completion of milestones and/or
deliverables for a Project, unless the GM Authorized
Purchasing Personnel specifically agrees otherwise. Payment
terms are Net 25th Prox. and payment will be made by
Electronic Data Interchange to the extent CWC qualifies for
such in accordance with GM" established policies and
procedures.
(d) INVOICES. A "correct" invoice shall contain (i) CWC's name and
invoice date, (ii) the specific Purchase Order number, (iii)
description, price, and quantity of the Products or Services
actually delivered or rendered, (iv) credits (if applicable),
(v) name (where applicable), title, phone number, and complete
mailing address of responsible official to whom payment is to
be sent. A correct invoice must be submitted to the
appropriate invoice address listed on the Purchase Order.
(e) TAXES. Unless GM provides CWC with a valid tax exemption
number or as otherwise provided herein, GM shall pay directly
or reimburse CWC for all taxes, assessments, permits, and
fees, however designated, which are levied upon this Agreement
or the Products and Services, or their use, excluding
franchise taxes and taxes based upon CWC's income.
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(f) RIGHT TO AUDIT. CWC hereby grants to the GM Audit Staff or
independent Auditors a right to audit direct labor hours and
expenses related to work authorized under this Agreement. CWC
shall maintain a separate account which shall be subject to
such audit by GM at any time during the progress of work and
after completion of work upon two (2) business days notice.
CWC further agrees to maintain the records in a manner to
facilitate an audit and agrees that such audit may be used as
a basis for settlement of charges for work authorized under
this Agreement.
8. PROVISION OF MOST FAVORABLE TERMS. Except as otherwise agreed in a
Statement of Work or in a fixed price contract, CWC warrants and agrees
that each of the Charges, terms, warranties, or benefits granted to GM
pursuant to this Agreement or in any Purchase Order are comparable to
or better than the equivalent Change, term, warranty, or benefit being
offered by CWC to any customer of CWC for similar services under
similar conditions. If CWC shall enter into arrangements with any
customer of CWC (except the United States Government) providing for
such similar more favorable Charges, terms, warranties, or benefits,
then this Agreement or the applicable Purchase Order or Statement of
Work shall thereupon be deemed amended to incorporate the more
favorable Charges, terms, warranties, or benefits and CWC shall
immediately notify GM of such more favorable Charges, terms,
warranties, or benefits.
9. CHANGE ORDERS.
(a) CHANGE REQUESTS. The GM Project Manager shall immediately
notify the CWC Project Manager in writing of changes that will
expand or reduce the scope of a Purchase Order or alter the
Applicable Specifications. CWC Authorized Purchasing Personnel
shall notify GM Authorized Purchasing Personnel in writing as
soon as practicable of technical problems/events/new
information/program changes that could result in an increase
or decrease in costs or dates. A log of such change requests
is to be maintained by the CWC Project Manager and the GM
Project Manager.
(b) IMPLEMENTING CHANGES. If GM and CWC desire to make such
changes described above, CWC Authorized Purchasing Personnel
will document the change and provide a written proposal for
incorporating the change with supporting information to the GM
Authorized Purchasing Personnel for
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consideration. Approval of both GM and CWC Authorized
Purchasing Personnel must be obtained in writing in order to
implement the changes necessitating the changes in costs,
changes in schedules, or changes to Deliverables. The
Statement of Work will be amended by GM and CWC Authorized
Purchasing Personnel to reflect the agreed upon changes. No
agreements or actions communicated during a technical contact
shall change the responsibilities, cost, schedules, or
requirements of the Statement of Work to either party, unless
reduced in writing and signed by both GM and CWC Authorized
Purchasing Personnel.
10. NONCOMPETITION. During the performance of this Agreement, CWC agrees
not to perform any Services or provide any Product(s), directly or
indirectly through third parties, for any Competitor of GM, unless
bidding for Products or Services against other suppliers who are not so
constrained.
11. LICENSE OF PRODUCT(S); OWNERSHIP OF DOCUMENTATION.
(a) Upon Acceptance of the Product(s) by GM, CWC will grant to GM
an exclusive, perpetual, irrevocable, non-transferable,
worldwide, royalty free, paid-up, license to use, modify or
permit others to do so, and create derivative works for GM to
use but only for the Original Intended Purpose under any
patents, copyrights, or other proprietary rights of CWC.
(b) GM acknowledges and agrees that the Product(s) shall be and
remain the property of CWC and that this Agreement grants GM
no title or rights of ownership in the Products except as set
forth herein. GM further agrees that selected subroutines and
modules contained within the Products are, and will continue
to be, used by other CWC customers, and said subroutines and
modules shall be considered nonexclusive to GM.
(c) Transfer of Products. The rights and license granted to GM
hereunder may not be assigned, subleased, sold, offered for
sale, disposed of, encumbered or mortgaged, except in the
event that CWC shall cease directly licensing Users, in which
case CWC hereby grants to GM the right to sublicense the
executable version of the Products to Users pursuant to the
terms and conditions attached hereto as Exhibit 11(c);
provided that each User signs such agreement prior to their
receipt of the Product.
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(d) Overseas Use. Ninety (90) days before the distribution of the
Products in any non-U.S. country, GM shall notify CWC so that
CWC can (i) approve of distributing the Products in the
non-U.S. country and (ii) obtain review if appropriate by
counsel in the non-U.S.country of this Agreement or the
applicable Statement of Work.
CWC may require changes in this Agreement or the applicable
Statement of Work from time to time or with respect to use in
a particular country.
(e) Provision of Source Code.
(i) Within thirty (30) days of the Acceptance Date for a Product,
CWC shall place with the GM Legal Staff one complete set of
source code with associated documentation for the Product
("Source Materials"). The Source Materials shall include
machine-readable, high level language code for the Product, as
well as machine-readable listings, tables and references
required to use the high level language code and shall be in
the form of 3 1/2 inch floppy disks. CWC represents and
warrants to GM that:
(1) the Source Materials constitute the source code and
documentation for the Product licensed to GM pursuant
to this Agreement or a Statement of Work; and
(2) the Source Materials are in a form suitable for
reproduction by computer and/or photocopy equipment,
and consist of a full source language statement of
the program or programs comprising the Product and
complete program maintenance documentation, including
all flow charts, schematics and annotations which
comprise the precoding detailed design
specifications, and all other material necessary to
allow a reasonably skilled third party programmer or
analyst to maintain or enhance the Product without
the help of any other person or reference to any
other material. The Source Materials shall be
delivered under seal for safekeeping to the GM Legal
Staff at P.O. Box 33122, New Center One Building,
3031 West Grand Boulevard, Detroit, Michigan 48232.
Source Materials shall not
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be made available to anyone outside the GM Legal
Staff unless and until the occurrence of a Triggering
Event (as defined below). CWC agrees to update and
maintain the Source Materials held in safekeeping to
reflect all changes made thereto through maintenance,
enhancements, revisions or otherwise. All such
changes to the Source Materials shall also be
delivered in the required form to the GM Legal Staff
under seal.
(ii) GM may break the seal and use the Source Materials five (5)
days after written notice to CWC that the GM Legal Staff has
made a finding that one of the following "Triggering Events"
has occurred:
(1) it has established by clear and convincing evidence
that CWC is unable to meet its material obligations
to develop and/or maintain the Product(s) under any
Statement of Work for a running period of thirty (30)
days after notice to CWC in writing.
(2) CWC has been declared bankrupt, has voluntarily
petitioned a court for relief under any bankruptcy
laws, has been declared insolvent, has made an
assignment for the benefit of creditors, suffers or
permits the appointment of a receiver for its
business or assets, becomes subject to any proceeding
under any bankruptcy or insolvency law, whether
domestic or foreign, or has wound up or liquidated
its business voluntarily or otherwise and GM has
compelling reasons to believe that such event(s) will
cause CWC to fail to meet its obligations under this
Agreement or a Statement of Work in the foreseeable
future.
(3) after the applicable period of time identified in a
Statement of Work, under which GM has contracted for
CWC to provide maintenance, GM decides to use a party
other than CWC to maintain the Product. In such
event, CWC shall have the right of last refusal to
match any lower bids received by GM for such
maintenance services.
(4) the sale, assignment, or other transfer by CWC,
without the prior written consent of GM, of such of
CWC's rights in the Product
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as would prevent CWC from the discharge of its
obligations with respect to the performance of the
Product under the Statement of Work; or
(5) the termination of this Agreement or the applicable
Statement of Work for the Product by GM for CWC's
material default. In the event that CWC shall contest
any such finding by the GM Legal Staff, GM shall
nevertheless have the use of the Source Materials as
permitted herein, and the matter shall be immediately
submitted to the dispute resolution procedures
identified in Section 14 of this Agreement.
(iii) GM shall retain a copy of the Source Materials as they existed
when unsealed and shall use a copy of the Source Materials
only to complete or maintain such Product as may be defined in
an applicable Statement of Work or to cause such Product to be
completed or maintained by a third party. In the event GM
causes a third party to use the Source Materials, GM shall
cause such third party to agree in writing that the Source
Materials shall be maintained in confidence in accordance with
the confidentiality provisions of this Agreement and shall be
used only for the Original intended purpose. If GM uses the
Source Materials or causes a third party to complete or
maintain any Product, unless otherwise determined during
dispute resolution proceedings requested by GM, CWC is
relieved of all warranties, liabilities and indemnification
provisions of this Agreement with respect to the Product to
the extent such modifications are the cause of a warranty
defect or infringement claim.
(iv) Following release of the Source Materials as permitted above,
GM shall seal the Source Materials as they existed when
unsealed and as they exist after any modifications reflecting
the permitted use and return them to the GM Legal Staff, where
they shall be secured until dispute resolution proceedings, if
any, shall determine the further use, if any, of the Source
Materials.
12. WARRANTIES. CWC hereby represents and warrants that:
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(a) CWC has not entered into agreements or commitments which are
inconsistent with or conflict with the rights granted to GM
herein;
(b) Except for any security interest established by GM herein, the
Products shall be free and clear of all liens and
encumbrances, and GM shall be entitled to use the Products
without disturbance;
(c) Except as provided for in the Statement of Work, all Products
shall comply with all applicable provisions of standards or
draft standards issued by the international Standards
Organization (ISO);
(d) Each Product (i) shall be free from defects in manufacture,
materials, and design, (ii) shall be manufactured in a good
and workmanlike manner using a skilled staff fully qualified
to perform their respective duties, and (iii) shall function
properly under ordinary use and operate in conformance with
its Applicable Specifications and Documentation or CWC shall
repair or replace the defective Product at no charge to GM
during any period when GM is making maintenance payments to
CWC.
(e) Where applicable as indicated in a Statement of Work, the
Products are, and shall continue to be, data, program, and
upward compatible with any other Products available or to be
available from CWC so that data files created for a Product
can be utilized without adaptation of the other Products and
so that programs written for Products will operate on the
other Products and not result in the need for alteration,
emulation, or the loss of efficiency. Where applicable, as
indicted in a Statement of Work each Product is, and shall
continue t be, compatible with other Products provided by CWC
and each Product contained within a Project shall be fully
integrated, compatible, and operable with all other Products
contained within the Project. CWC shall provide to GM at least
ninety (90) days prior written notice to discontinue any
Product. If the course of the evolution of the technology,
conditions outside CWC's control limit CWC from compliance
with the condition, GM will release CWC from its
responsibility to meet this provision.
THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES WHETHER
EXPRESSED, IMPLIED OR STATUTORY INCLUDING IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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13. INDEMNIFICATION
(a) Proprietary Rights Indemnification. If notified promptly in
writing of any judicial action brought against GM based on an
allegation that GM's use of the Products infringes any patent,
copyright, trademark, mask work or any rights of a third party
or constitutes misuse or misappropriation of a trade secret
(Infringement), CWC will defend such action at its expense and
will pay the costs and damages awarded in any such action or
the cost of settling such action. CWC shall have sole control
of the defense of any such action and all negotiations for its
settlement or compromise. If notified promptly in writing of
any informal claim (other than a judicial action) brought
against GM based on an allegation that GM's use of the
Products constitute Infringement, CWC will pay the costs
associated with resolving such claim and will pay the
settlement amount (if any), provided that CWC shall have sole
control of the resolution of any such claim and all
negotiations for its settlement. In the event a final
injunction shall be obtained against GM's use of the Products
by reason of infringement, or in CWC'
(i) procure for GM the right to continue to use the
Products as contemplated hereunder, or
(ii) replace or modify the Products to make its use
hereunder non-infringing while being capable of
performing the same function. If neither option as
reasonably available to CWC, then the applicable
Purchase Order or relevant part of such Purchase
Order may be terminated at the option of either party
hereto without further obligation or liability other
than as provided in Section 16 hereof, except as
follows: (i) Periodic Payment License, CWC shall
promptly refund to GM a monthly prorated amount of
the prepaid fees for the unexplored portion of the
applicable payment period; (ii) Lump Sum Payment
License. CWC shall promptly refund to GM a sum equal
to one thirty-sixth (1/36) or extension, if
applicable, of the lump sum fee paid for each month
remaining of a three (3) year period beginning from
the Acceptance Date of the Products by GM, plus a pro
rata amount of the prepaid charges for services for
the period then in effect, if any, paid by GM.
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GM shall have the right to participate in the defense
of any such claim at its own expense through counsel
of its choice.
CWC will not indemnify GM, however, if the claim of
infringement is caused by (1) GM's misuse or
modification of the Products, (2) GM's failure to use
corrections or enhancements made available by CW, (3)
GM's use of the Product in combination with any
product or information not owned or developed by CWC,
(4) GM's distribution, marketing or use for the
benefit of third parties other than Users of the
Product; or Data.
(b) If notified promptly in writing of any judicial action brought
against CWC based on al allegation that CWC's use of the Data
infringes any patent, copyright, trademark, mask work or any
rights of a third party or constitutes misuse or
misappropriation of a trade secret (infringement), GM will
defend such action at its expense and will pay the costs and
damages awarded in any such action or the cost of settling
such action. GM shall have sole control of the defense of any
such action and all negotiations for its settlement or
compromise.
(c) Cross Indemnification. While at the facilities of the other
party, in the event any act or omission of a party or its
employees, servants, agents, or representatives causes or
results in (i) loss, damage to or destruction of property of
the other party or third parties, and/or (ii) death or injury
to persons including, but not limited to, employees or
invitees of either party, then such party shall indemnify,
defend, and hold the other party harmless from and against any
and all claims, actions, damages, demands, liabilities, costs,
and expenses, including reasonable attorneys' fees and
expenses, resulting therefrom. The indemnifying party shall
pay or reimburse the other party promptly for all such loss,
damage, destruction, death, or injury.
14. DISPUTE AND TERMINATION.
(a) NEGOTIATIONS OF DISPUTES. In the event of any dispute or
disagreement between GM and CWC to the Agreement with respect
to the interpretation of any provision of the Agreement or the
performance of CWC or GM under the Agreement, upon the written
request of either party, the applicable GM and CWC Project
Managers, or a designated representative of either of them,
will meet for the purpose of resolving such dispute or
negotiating an adjustment or
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<PAGE> 18
modification to such provision of the Agreement. The GM and
CWC Project Managers or designated representatives shall meet
as often as the parties reasonably deem necessary in order to
furnish to the other all information with respect to the
matter in issue which the parties believe to be appropriate
and germane in connection with its resolution. The GM and CWC
Project Managers or designated representatives will discuss
the problem and negotiate in good faith without the necessity
of any formal proceeding relating thereto. During the course
of such negotiation, all reasonable requests made by one party
to the other for information will be honored in order that
each of the parties may be fully advised in the premises. The
specific format for such discussion will be left to the
discretion of the GM and CWC Project Managers or designated
representatives but may include the preparation of agreed upon
statements of fact or written statements of position furnished
to the other party.
(b) RESOLUTION OF DISPUTES. Any dispute relating to the Agreement
which cannot be resolved by the respective GM and CWC Project
Managers or their designated representatives within thirty
(30) days of a written notice of such a dispute from one party
to the other party will be referred to the GM Director of
Dealer Communications and Systems and CWC President or their
designees for resolution within an additional thirty (30) day
period.
(c) TERMINATION. After exhausting the dispute resolution
procedures set forth above, either party shall have the right
to terminate this Agreement as follows:
(i) In the event CWC materially defaults in the
performance of a Project and fails to cure or ails to
make substantial progress to cure such default within
the sixty (60) day time period set forth in Section
14.(b) above for dispute resolutions, GM may, in its
sole discretion, elect to:
(1) terminate the Project, return to CWC all
Documentation and receive a pro-rata refund
from CWC of all amounts paid to CWC with
respect to the Project.
(2) extend the time for CWC performance at no
additional charge to GM;
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<PAGE> 19
(3) continue development itself or in
conjunction with a third party. In the event
GM elects to continue development itself or
utilizing a third party, CWC shall provide
to GM all Documentation or other CWC
Proprietary Information reasonably required
to complete such development to include
appropriate updates to the Source Materials
provided under Section 11(e). GM agrees that
any third parties pursuing such development
with GM shall agree in writing to comply
with the Restrictions on Use, and
Confidentiality obligations set forth in
Section 16 of this Agreement to protect
CWC's Proprietary Information. GM agrees and
any such third parties shall agree in
writing that they may use the information
only for the Original Intended Purpose and
as necessary in order to complete the
Project but for no other development beyond
the specific Project.
Upon any such termination under this Section
GM shall also be entitled to recover
reprocurement costs from CWC in excess of
amounts payable to CWC under this Agreement.
(ii) CWC shall have the right to terminate this Agreement
if GM commits any material breach of this Agreement
and fails to remedy or make substantial progress in
remedy such breach within the sixty (60) day time
period set forth in Section 14(b) above for dispute
resolution.
15. MAINTENANCE AND SUPPORT
(a) Mandatory Support Services. Except as otherwise set forth in
the Statement of Work, CWC shall provide the following support
Services and Products:
(i) Improvements. Improvements in the Products (which
shall mean any additions or modifications made by CWC
to or in the Products at any time after the
Acceptance Date) which will improve the efficiency
and effectiveness of this basic program function(s)
described in the Purchase Order and which do not
change such function or create one (1) or more new
functions, shall be furnished to GM at no charge.
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<PAGE> 20
(ii) Program Changes. If, at any time after the Acceptance
Date, CWC shall develop any changes in the Products
which change the basic program functions of the
Products or add one (1) or more new functions, GM
shall have the right to obtain such program changes
at the lesser of (i) CWC's standard prices then in
effect for installing such changes, or (ii) the
difference between the then current price of the
Products including such changes and the applicable
fees and charges for the Products reflected herein.
(b) Additional Support Services. AT GM's request, CWC shall
provide additional support Services for the Products as set
forth in a Statement of Work;
(c) If for any reason GM decides to have maintenance and support
services performed by a third party, CWC shall have the right
of last refusal to match any third party proposal for
maintenance and other services.
16. RESTRICTION ON USE CONFIDENTIALITY
(a) This Agreement, the Products, GM pricing data, competitive
pricing data, and all other information exchanged by the
parties under this Agreement, specifically identified in
writing as confidential and proprietary or its equivalent and
transmitted by either party to the other shall be maintained
in confidence by the receiving party and the receiving party
shall use the Products and such information only as authorized
by this Agreement and for no other purpose. CWC and GM agree
to take reasonable precautions to protect against unauthorized
disclosure of the Products and such information to third
parties other than Users.
(b) Neither CWC nor GM shall be obligated to maintain any
information received from the other party as confidential and
refrain from use, if the information:
(i) becomes publicly known through no fault of the
receiving party;
(ii) is learned by the receiving party from a third party
entitled to disclose it;
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<PAGE> 21
(iii) is already known by the receiving party prior to
obtaining the information from the disclosing party;
(iv) is independently developed by the receiving party
without utilization of the information of the
disclosing party;
(v) is or becomes available on an unrestricted basis to a
third party from the disclosing party or from someone
acting under its control; or
(vi) is required to be disclosed under an order created by
a court or government agency, provided that prior
written notification of the order and opportunity to
oppose the order is provided to the owner of the
information to be disclosed.
(c) GM shall cooperate with CWC to help ensure that each User
upholds the confidentiality and use requirements imposed upon
them through the agreement set forth in Exhibit 11(c); GM
agrees to notify CWC immediately after gaining knowledge of
the possession, use, disclosure or reproduction of the
Products by any party not authorized reproduction and to
cooperate with CWC and its representatives in any
investigation of and litigation against such user.
17. NOTICES. Except as otherwise specifically provided for herein, all
notices required or permitted to be given by either party under or in
connection with this Agreement shall be in writing and shall be deemed
duly given when personally delivered or sent by registered or certified
mail, return receipt requested, postage prepaid, or by prepaid
recognized overnight delivery service, or if confirmed by letter, by
facsimile, or by cable, to the other party at the address set forth in
Exhibit 17, or such other address as may be requested by either party
by like notice.
18. MODIFICATIONS AND AMENDMENTS. No addition to, deletion from or
modification of any of the provisions of these terms and conditions
shall be binding upon the parties unless made in writing and signed by
the Authorized Contracts Personnel of each party. Any such additions,
deletions or modifications shall refer specifically to this Agreement
and shall also state that it is an amendment hereof.
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<PAGE> 22
19. FORCE MAJEURE. Any delay or failure of either party to perform its
obligations hereunder shall be excused if, and to the extent that it is
caused by an event or occurrence beyond the reasonable control of the
party and without its fault or negligence, such as, by way of example
and not by way of limitation, acts of God, actions by any governmental
authority (where valid or invalid), fires, floods, windstorms,
explosions, shots, natural disasters, wars, sabotage, labor problems
(including lockouts, strikes and slowdowns), inability to obtain power,
material, labor, equipment or transportation, or court injunction or
order; provided that written notice of such delay (including the
anticipated duration of the delay) shall be given by the affected party
to the other party within ten (10) days.
20. LIMITATION OF LIABILITY AND REMEDIES. Except for the indemnification
set forth in Section 13 (with the exception of foreign patents which
shall be subject to this limitation of liability:
(a) LIMITATION OF LIABILITY. In no event shall either party be
liable for any loss of profit or revenue by the other party or
for any consequential, incidental, indirect or economic
damages incurred or suffered by either party arising as a
result of or related to this Agreement, whether arising in
contract, tort (including without limitation, negligence or
strict liability) or otherwise, even though either party has
been advised of the possibility of such loss or damages.
(b) LIMITATION OF REMEDY. The total liability of either party for
all claims of any kind arising from, or related to, this
Agreement, whether based on contract, tort including, but not
limited to, strict liability and negligence, warranty or on
other legal or equitable grounds, shall be limited to general
money damages and shall not exceed an amount equal to
$500,000.
21. INSURANCE. CWC shall remain insurance coverage in amounts not less than
the following:
(a) Worker's Compensation - Statutory Limits for the state or
states in which this Agreement is to be performed (or evidence
of authority to self-insure);
(b) Employer's Liability - $250,000;
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<PAGE> 23
(c) Comprehensive General Liability (including Products/Completed
Operations and Blanket Contractual Liability) - $1,000,000 per
person, $1,000,000 per occurrence Personal Injury, and
$1,000,000 per occurrence Property Damage, or $1,000,000 per
occurrence Personal Injury and Property Damage combined single
limit; and
(d) Automobile Liability (including owned, non-owned and hired
vehicles) - $1,000,000 per person, $1,000,000 per occurrence
Personal Injury and $1,000,000 per occurrence Property Damage,
or $1,000,000 per occurrence Personal Injury and Property
Damage combined single limit. At GM's request, CWC shall
furnish to GM certificates of insurance or other adequate
proof of self-insurance setting forth the amount(s) of
coverage, policy number(s) and date(s) of expiration for
insurance maintained by CWC and, if further requested by GM,
such certificates will provide that GM shall receive thirty
(30) days' prior written notification from the insurer of any
termination or reduction in the amount or scope of coverages.
GM shall allow CWC, upon proof of adequate self-insurance, to
self-insure the above insurance requirements. CWC's purchase
of appropriate insurance coverage or the furnishing of
certificates of insurance shall not release CWC of its
obligations or liabilities under this Agreement.
22. ADVERTISING. CWC shall not, without first obtaining the written consent
of GM, in any manner advertise or publish the fact that CWC has
contracted to furnish GM the goods or services herein ordered, or use
any trademarks or trade names of GM in CWC's advertising or promotional
materials.
23. GOVERNMENT COMPLIANCE. CWC and GM agree to comply with all federal,
state and local laws. Executive Orders, rules, regulations and
ordinances which may be applicable to CWC's performance of its
obligations under this Agreement.
24. EQUAL OPPORTUNITY AND AFFIRMATIVE ACTION. This Agreement incorporates
by reference:
(a) all provisions of 41 C.F.R. 60-1.4, as amended, pertaining to
the equal opportunity clause in government contracts;
(b) all provisions of 41 C.F.R. 60-250, as amended, pertaining to
affirmative action for disabled veterans of the Vietnam Era;
and
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<PAGE> 24
(c) all provisions of 41 C.F.R. 60-741, as amended, pertaining to
affirmative action for handicapped workers. CWC certifies that
it is in compliance with all applicable provisions of 41
C.F.R. 60-1, including but not limited to: (a) developing and
presently having in full force and effect a written
affirmative action compliance program for each of its
establishments as required by 41 C.F.R. 60-1.40, as amended,
(b) filing EEO-1 Reports as required by 41 C.F.R. 60-1.7, as
amended; and (c) neither maintaining segregated facilities nor
permitting its employees to perform services at segregated
facilities as prohibited by 41 C.F.R. 60-1.8, as amended. GM
requests that CWC adopt and implement a policy to extend
employment opportunities to qualified applicants and employees
on an equal basis regardless of an individual's age, race,
color, sex, religion or national origin.
25. NO IMPLIED WAIVER. The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall
in no way affect the right to require such performance at any time
thereafter, nor shall the waiver of either party of a breach of any
provision of this Agreement constitute a waiver of any succeeding
breach of the same or any other provisions.
26. NON-ASSIGNMENT. Neither party may assign or delegate its rights and
obligations under this Agreement without the prior written consent of
the other party; provided, however, that CWC may use non-employee
contract programming personnel in the performance of design and
programming efforts, so long as such personnel are bound in writing to
provisions which are substantially similar to the Restriction on Use
and Confidentiality provisions of this Agreement.
27. RELATIONSHIP OF PARTIES. CWC and GM are independent contracting parties
and nothing in this Agreement shall make either party the agent or
legal representative of the other for any purpose whatsoever, nor does
it grant either party any authority to assume or to create any
obligation on behalf of or in the name of the other.
28. GOVERNING LAW. This Agreement is to be construed according to the laws
of the State of Michigan.
29. SEVERABILITY. If any term of this Agreement is invalid or unenforceable
under any statute, regulation, ordinance, executive order or other rule
of law, such term shall be deemed reformed or deleted, but only to the
extent necessary to comply with such
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<PAGE> 25
statute, regulation, ordinance, order or rule, and the remaining of
this Agreement shall remain in full force and effect.
30. ENTIRE AGREEMENT. This Agreement, together with the attachments,
exhibits, or supplements, specifically referenced herein, constitutes
the entire agreement between CWC and GM with respect to the matter
contained herein and supersedes all prior oral or written
representations and agreements.
31. SURVIVAL. The provisions of Sections 1, 2, 7, 8, 10, 11, 12, 13, 14,
15, 16, 19, 20, 21, 22, 28, 29, 30 and 31 shall survive the termination
or expiration of this Agreement for any reason.
IN WITNESS WHEREOF, GM and CWC have caused this Agreement to be
executed in multiple counterparts by their duly authorized representatives.
CLEAR WITH COMPUTERS, INC. GENERAL MOTORS CORPORATION
By: /s/ Alan R. Bennett By: /s/ Signature Illegible
----------------------------- -----------------------------
Title: Chief Operating Officer Title: General Director
-------------------------- --------------------------
Date: 6/21/94 Date: 8/1/94
--------------------------- ---------------------------
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<PAGE> 1
Exhibit 10.15.1
AMENDMENT TO
PRODUCTS USE AND GENERAL SERVICES AGREEMENT
Clear With Computers, Inc. (now known as CWC Incorporated), 1983 Premier Drive,
P.O. Box 4459, Mankato, Minnesota 56002-4459, a corporation of the State of
Minnesota, hereinafter called "CWC," and General Motors Corporation, 3044 West
Grand Boulevard, Detroit, Michigan 48202, a corporation of the State of
Delaware, hereinafter referred to as "GM" entered into a Products Use and
General Services Agreement ("Agreement") on August 1, 1994. GM now desires to
license CWC's new product, Signature Plus, and to procure services related to
Signature Plus.
Therefore, the parties agree to amend the Agreement as follows:
1. Delete Section 1(j) entitled "Competitor of GM."
2. Delete Section 10 entitled "Noncompetition."
3. Delete Section 11 entitled "License of Product(s)/Ownership of
Documentation" and replace with the following:
(a) Subject to the terms and conditions of this Agreement CWC
grants and GM accepts a non-exclusive, non-transferable
license with rights to use, for the Original Intended Purpose,
the Product as defined in the Statement of Work, Documentation
and other CWC proprietary information provided by CWC to GM
and to sublicense the Product to the number of dealers and
geographies identified in the Statement of Work who are
authorized to use the Product (for Signature Plus Sales --
"Named Users") and to allow access to the Product to the
number of consumers (not dealers) and geographies identified
in the Statement of Work as allowed access to the Product via
the Internet (for Signature Plus Web -- "Concurrent Users").
In order to sublicense the Product to Named Users GM shall
have in effect with such Named Users agreements sufficient to
obligate such Named Users to terms substantially similar to
the terms of Exhibit A. GM may transfer the Product from one
Named User to another Named User upon prompt written notice to
CWC and provided the Product is promptly deleted by the Named
User no longer using the Product.
(b) Subject to the terms and conditions of this Agreement CWC
grants and GM accepts a non-exclusive, non-transferable
license with rights to use the portion of the Product known as
Toolkit as defined in the Statement of Work ("Tools") at the
sites identified in the Statement of Work ("Designated
Site(s)"). GM may use the Tools on as many single computer
stations as needed at the Designated Site. GM may transfer the
Tools from one Designated Site to another Designated Site upon
prompt written notice to CWC. The Tools must be promptly
deleted in their
<PAGE> 2
entirety from the Designated Site no longer in use. GM may use
a third-party certified by CWC to use the Tools on behalf of
GM.
(c) GM shall maintain accurate records of all Named Users. Upon
CWC's request, GM shall provide CWC with a copy of such
records and executed agreements. In addition, CWC shall have
the right to inspect such records for compliance with the
terms of this Agreement no more frequently than annually,
during GM's normal business hours and upon reasonable advance
notice. GM shall cooperate with CWC to ensure that each Named
User upholds the requirements imposed upon them through this
Agreement or the agreement set forth in Exhibit A and will
take reasonable steps to ensure that such Named Users comply
with such terms and conditions. GM agrees to notify CWC
promptly after gaining knowledge of the possession, use,
disclosure or reproduction of Product by any person or other
party not authorized to have the benefit of such possession,
use, disclosure, or reproduction and to cooperate with CWC and
its representatives in any investigation of and litigation
against such unauthorized use.
(d) GM may make one copy of the Product for archival purposes. GM
may reproduce or copy any portion of the Documentation into
machine-readable or printed form for its internal use and for
distribution to Named Users. GM shall not remove any
proprietary, copyright, trademark, or service mark legend from
the Product, Documentation or CWC proprietary information and
shall include such legends on any complete or partial copies
of the Product, Documentation or CWC proprietary information.
(e) GM shall comply with United States export rules, laws and
regulations. GM shall indemnify CWC against any claims,
losses, liability, or damages suffered or incurred by CWC
arising out of or related to any violation by GM or Named User
of any United States or any foreign laws or regulations
relative to GM or Named User use, export or re-export of
Product or Documentation to or within any country outside the
United States.
(f) CWC warrants that the source code with associated
documentation ("Source Materials") for the Product as it is or
as it becomes available, will be deposited in an escrow
account maintained at Data Securities International, Inc. (the
"Escrow Agent"). The Source Materials constitute the source
code and documentation for the Product licensed to GM pursuant
to this Agreement or a Statement of Work; and the Source
Materials are in a form suitable for reproduction by computer
and/or photocopy equipment, and consist of a full source
language statement of the program or programs comprising the
Product and complete program maintenance documentation,
including all flow charts, schematics and
<PAGE> 3
annotations which comprise the precoding detailed design
specifications, and all other material necessary to allow
reasonably skilled third party programmer or analyst to
maintain or enhance the Product without the help of any other
person or reference to any other material. CWC will from time
to time deposit in an escrow account copies of all new
releases of the Source Materials for the Product.
CWC or CWC's trustee in bankruptcy shall authorize the Escrow
Agent to make and release a copy of the Source Materials to GM
upon the occurrence of any of the following events:
(i) CWC has ceased its ongoing business operations
relating to the licensing of software; or
(ii) CWC fails to carry out the material maintenance
obligations imposed on it pursuant to this Agreement
after reasonable opportunity has been provided to CWC
to perform such obligations; or
(iii) The existence of any one or more of the following
circumstances, if uncorrected for more than ninety
(90) days: (i) entry of an order of relief under
Title 11 of the United States Code; the making by CWC
of the general assignment for the benefit of
creditors; (ii) the appointment of a general receiver
or trustee in the bankruptcy of CWC's business or
property; or (iii) action by CWC under any state
insolvency or similar law for the purpose of
bankruptcy, reorganization or liquidation. The
occurrence of the described events shall not
constitute reason for the release of the source code
if, within the specified ninety (90) day period, CWC
(including its receiver or trustee in bankruptcy)
provides to GM adequate assurances, reasonably
acceptable to GM, of its continuing ability and
willingness to fulfill all of its maintenance and
support obligations.
In the event of release under this Agreement, GM agrees that
it will treat and preserve the Source Materials of the Product
as confidential information of CWC in accordance with the same
precautions adopted by GM to safeguard its own confidential
information against unauthorized use and disclosure. Release
under this provision shall not extend GM any greater rights or
lesser obligations than are otherwise provided or imposed
under this Agreement.
4. Delete Section 12 (d) and replace with the following: "Each Product (i)
shall be free from material defects in manufacture, materials, and
design, (ii) shall be manufactured in a good and workmanlike manner
using a skilled staff fully qualified to perform their respective
duties, and (iii) shall function properly under the ordinary use and
operate in material conformance with its Applicable Specifications and
Documentation or CWC shall repair or replace the defective
<PAGE> 4
Product at no charge to GM during any period when GM is making
maintenance payments to CWC."
5. Delete Section 14 (entitled Dispute and Termination) and replace with
the following: "In the event of material breach of this Agreement which
is not corrected, this Agreement may be terminated in the following
manner. The party complaining of the breach may terminate this
Agreement by serving written notice on the other party of its intention
to terminate the Agreement and stating the breach of the Agreement
complained of, whereupon the other party shall have a period of thirty
(30) days to correct the material breach except in the case of breach
of Section 16 or breach of the payment terms of Section 7(c), such
period shall be ten (10) days; and in the event the breach is not
corrected, the Agreement shall stand terminated at the end of said
thirty (30) days or ten (10) business days as applicable from service
of the notice. In the event the breach is corrected, the Agreement
shall continue as if no breach had occurred. If this Agreement is
terminated at any time, GM shall cease use immediately of the Product
and the parties shall promptly return or destroy all confidential
information to the disclosing party."
6. Replace Section 16(a) with the following:
(a) Confidential Information of GM. CWC agrees to treat GM data
transmitted to CWC and any other information or data
specifically identified as confidential ("GM Confidential
Information") with the same degree of care as CWC uses to
avoid disclosure, publication or dissemination of its own
information of a similar nature, but not less than a
reasonable degree of care.
(b) Confidential Information of CWC. GM agrees to treat the
information listed on Exhibit 16(b) and such other information
that GM accepts as confidential pursuant to Section 16(b)(1)
("CWC Confidential Information") with the same degree of care
as GM uses to avoid disclosure, publication or dissemination
of its own information of a similar nature, but not less than
a reasonable degree of care.
(1) Prior to any additional disclosures of CWC
Confidential Information to GM, CWC must receive the
approval of the applicable GM Project Manager. CWC
will follow the following process to obtain such
approval:
(A) CWC will prepare a written description of
the CWC Confidential Information, without
actually disclosing the CWC Confidential
Information, and send it to the GM Project
Manager.
(B) At the time of such transmission, the GM
Project Manager will decide, on the basis of
CWC's written description of the CWC
Confidential Information and not upon
receipt of the Confidential Information
itself, the following: (i) if GM agrees that
the information is confidential; (ii) if GM
needs the information. If the answers to (1)
and (2) are "yes" and GM agrees to accept
the CWC Confidential Information, GM agrees
to treat CWC Confidential Information with
the same degree of care as GM uses to avoid
disclosure, publication or
<PAGE> 5
dissemination of its own information of a
similar nature, but not less than a
reasonable degree of care.
(2) To the extent a decision not to approve or use CWC
Confidential Information jeopardizes CWC's ability to
perform its obligations under this Agreement, CWC
shall be relieved of adverse consequences, solely and
to the extent its performance is materially and
adversely affected thereby; provided, however, that
CWC shall promptly notify GM of the possibility of
such adverse consequences and both Parties shall
attempt to reach a mutually satisfactory solution to
alleviate or prevent such adverse consequences.
Section 16 (b) now becomes 16 (c).
Change Section 16(d) to read as follows:
"GM shall cooperate with CWC to help ensure that each User upholds the
confidentiality and use requirements imposed upon them through this
Agreement. GM agrees to notify CWC immediately after gaining knowledge
of the possession, use, disclosure or reproduction of the CWC
Confidential Information by any party not authorized reproduction and
to cooperate with CWC and its representatives in any investigation of
and litigation against such user."
Add the following as subsection (e) of Section 16:
"(e) Except as permitted in this Agreement, GM shall not copy,
translate, disassemble, or decompile, nor create or attempt to create,
by reverse engineering or otherwise the source code from the object
code of the Product licensed hereunder or use it to create a derivative
work, unless authorized in writing by CWC."
7. Add the following to the end of the first sentence in Section 20: "and
except for a material breach by either party of Section 16 (entitled
Restriction on Use, Confidentiality):"
8. In Section 20 (b), change the dollar amount from 500,000 to
[ * * * ].
IN WITNESS WHEREOF, GM and CWC have caused this Amendment to be executed in
multiple counterparts by their duly authorized representatives.
GENERAL MOTORS CORPORATION CWC INCORPORATED
By: [ * * * ] By: R. C. Lueck
----------------------------- -----------------------------
Signature: /s/ [ * * * ] Signature: /s/ R.C. Lueck
---------------------- ----------------------
Title: Sr. Divisional Buyer Title: V.P. Corporate Services
-------------------------- --------------------------
Date: June 26, 1998 Date: June 25, 1998
--------------------------- ---------------------------
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
<PAGE> 6
EXHIBIT A
PRODUCT NAMED USER AGREEMENT
1. DELIVERY
Upon acceptance of these terms, Named User will be provided electronic media
containing Product, as ordered by Named User through GM.
2. GRANT OF LICENSE
Subject to becoming effective as set forth above, Named User is hereby granted a
non-exclusive, non-transferable right to use Product for the limited purpose of
helping Named User and Named User's customers learn about, sell and/or buy
products manufactured, distributed or sold by GM. Named User agrees that Product
shall be used exclusively by Named User's authorized employees and only for the
limited purpose set forth above. The electronic media and Product shall remain
the property of GM and/or its suppliers. All applicable rights in patents,
copyrights, trade secrets and other confidential and proprietary information,
trademarks, and any other intellectual property rights in Product are and shall
remain in GM and/or its suppliers. Named User is forbidden from copying,
transferring possession, using, or permitting others to copy, possess or use the
electronic media and/or Product for any purpose not specifically authorized in
this Agreement. Named User warrants that any individuals authorized by Named
User to access Product shall be bound by the terms and conditions of this
Agreement.
3. TERM OF AGREEMENT
The term of this Agreement shall commence upon execution of the Agreement and
shall continue until termination as provided herein.
4. PRODUCT SUPPORT
4.1 Warranty Disclaimer
GM AND ITS SUPPLIERS MAKE AND NAMED USER RECEIVES NO REPRESENTATION,
CONDITION OR WARRANTY, EXPRESS OR IMPLIED, IN ANY OTHER PROVISION OF THIS
AGREEMENT OR COMMUNICATION WITH NAMED USERS WITH RESPECT TO PRODUCT, AND GM
AND ITS SUPPLIERS SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES WHETHER AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER MATTER. NAMED
USER ASSUMES ALL RESPONSIBILITIES FOR THE SELECTION OF PRODUCT TO ACHIEVE
NAMED USER'S INTENDED RESULTS. GM AND ITS SUPPLIERS DO NOT WARRANT THAT
PRODUCT WILL MEET NAMED USER'S REQUIREMENTS OR THAT PRODUCT WILL BE
UNINTERRUPTED OR ERROR FREE.
4.2 LIMITATION OF LIABILITY EXCEPT AS PROVIDED BELOW
GM AND ITS SUPPLIERS SHALL HAVE NO LIABILITY FOR ANY INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR EXEMPLARY DAMAGES OF ANY DESCRIPTION, INCLUDING, WITHOUT
LIMITATION, DAMAGES DIRECTLY OR INDIRECTLY ARISING OUT OF THE INSTALLATION,
REMOVAL, USE OR NON-USE OF PRODUCT OR LOSS OF PROFITS, WHETHER ARISING OUT OF
WARRANTY OR CONTRACT, NEGLIGENCE, OR OTHER NON-INTENTIONAL TORT OR OTHERWISE.
UNDER NO CIRCUMSTANCES SHALL GM'S AND ITS SUPPLIERS' LIABILITY EXCEED THE
APPLICABLE LICENSE FEE PAID BY NAMED USER UNDER THIS AGREEMENT, REGARDLESS OF
THE FORM OF THE ACTION. NAMED USER EXPRESSLY AGREES THAT THE LIMITATIONS OF
INCIDENTAL, SPECIAL, CONSEQUENTIAL AND EXEMPLARY DAMAGES SET FORTH ABOVE ARE
AGREED ALLOCATIONS OF RISK, ARE REFLECTED
<PAGE> 7
IN THE FEES THAT HAVE BEEN AGREED TO BETWEEN THE PARTIES HEREIN.
5. RESTRICTIONS ON USE, CONFIDENTIALITY
To the maximum extent permitted by law, Named User agrees not to reverse
compile, disassemble, or otherwise reverse engineer Product or any portion
thereof. Named User further agrees not to disclose, reproduce, publish, release,
transfer, translate, copy or make available any portion of Product code or to
prepare or copy derivative or collective works based upon and/or containing any
portion of Product code. Named User agrees that all materials supplied under
this Agreement shall be kept in a secure place. Named User agrees to and shall
take appropriate action satisfactory to GM, by instruction, agreement or
otherwise, with any persons permitted access to Product to ensure continuous
confidentiality. All notices pertaining to use and ownership of the electronic
media and Product will be retained on the electronic media and Product in the
possession of Named User.
6. UNAUTHORIZED ACTS
Named User agrees to notify GM of the possession, use, knowledge, disclosure or
reproduction of any electronic media or Product made available to Named User
under this Agreement by any person, firm or organization not authorized by this
Agreement to have the benefit of such possession, use, knowledge, disclosure or
reproduction, and to cooperate with GM and its representatives in any
investigation of and litigation against such person, firm or organization.
7. TERMINATION
Named User may terminate this Agreement without cause by giving GM thirty (30)
days written notice of termination. In the event of a material breach of this
Agreement which is not corrected, this Agreement may be terminated in the
following manner. The party complaining of the breach may terminate this
Agreement by serving written notice on the other party of its intention to
terminate the Agreement and stating the breach of the Agreement complained of,
whereupon the other party shall have a period of thirty (30) days to correct the
material breach; and in the event the breach is not corrected, the Agreement
shall stand terminated at the end of said thirty (30) days from service of the
notice. In the event the breach is corrected, the Agreement shall continue as if
no breach had occurred. If this Agreement is terminated at any time, Named User
shall cease use immediately of Product and shall promptly return or destroy all
GM originals and all materials related to Product and electronic media received
from GM and/or any other material furnished by GM to Named User for use by Named
User in connection with this Agreement, including any modifications, and all
supplementary or related program materials and information, excluding normal
printouts or handouts which have been distributed to customers of Named User.
If for any reason the relationship between GM and its supplier of Product or
between GM and Named User is terminated, this Agreement will be concurrently
terminated, effective as of the relationship termination date.
8. GENERAL
This Agreement is entered into and shall be construed in accordance with the
laws of the State of Minnesota. This Agreement constitutes the entire agreement
between the parties and supersedes all other communications whether written or
oral. Neither the rights granted herein nor Product or copies thereof may be
licensed, assigned, or transferred by Named User. Any failure by GM to terminate
this Agreement for any particular cause shall not be interpreted as a waiver of
GM's right to subsequently cancel or terminate the Agreement for a later similar
reason. CWC and other third-party suppliers of GM are direct and intended
third-party beneficiaries of this Agreement and may enforce this Agreement
directly against Named User.
<PAGE> 8
EXHIBIT 16(b)(1)
o Source code
o Object Code (Compiled Code)
o Data Tools
o Data Model Templates
o Trade Secrets, Patent Rights, Copyrights and Trademark Rights Related to
CWC's proprietary configuration techniques
o Product Documentation (Included on CD)
o Data Compression Routines
o Application Program Interfaces
o Product Plans
o Database Schema
o Design Documentation
o Processes and Methods to Implement Signature Plus as set forth in CWC's
Implementation Guide
<PAGE> 9
STATEMENT OF WORK
This Statement of Work ("SOW") is entered into pursuant to a Products Use and
General Services Agreement between GM and CWC executed August 1, 1994, (the
"Base Agreement").
All amounts in U.S ($)
================================================================================
LICENSE FEES (SIGNATURE PLUS - WEB APPLICATION) - CONSUMERS
- --------------------------------------------------------------------------------
Access to Signature Plus - Web by up to 3000 Consumers utilizing up to six
servers at GM in the U.S. ... $[ * * * ]
The full license fee will be invoiced upon execution of this SOW. Payment terms
are as follows:
$[ * * * ] upon execution of this SOW.
$[ * * * ] due January 1, 1999.
In accordance with Section 7(c) of the Agreement, payment terms are Net 25th
Prox.
================================================================================
================================================================================
LICENSE FEES (SIGNATURE PLUS - TOOLKIT) - NUMBER OF SITES
- --------------------------------------------------------------------------------
1 Tools (Signature Plus Toolkit)........................................$0.00
- ----
* 1st Toolkit included at no charge, with the purchase of a Signature Plus Web
license.
- --------------------------------------------------------------------------------
The license fees are payable upon execution of this SOW.
================================================================================
================================================================================
HOSTING
- --------------------------------------------------------------------------------
CWC shall host the CWC Internet Configurator technology for a period of one year
at no charge, including hardware. Such services include:
o Hosting for US data and application services only. GM and CWC shall mutually
agree in writing to hosting other sectors in a separate SOW.
o Hardware and services will be provided to support 3000 concurrent users
only. Any extra hardware or services for a greater number of users will be
GM's responsibility.
o Hosting will be for one year from execution of this SOW.
o GM will be responsible for hosting (hardware and services) after the one
year time frame is complete.
o Hosting service charges will be limited to $[ * * * ]. (This is based upon
the estimate for the annual hosting charges from MCI.)
GM has requested CWC to use its preferred hosting company. In the event such
company's monthly fee exceeds $[ * * * ] per month, GM shall reimburse CWC up
to $[ * * * ] per month for the fee beyond $[ * * * ]. The following is an
example of such fees:
Preferred hosting company monthly fee: $[ * * * ]
CWC covers $[ * * * ]
Reimbursement from GM $[ * * * ]
Reimbursement for the hosting services will be done under the existing purchase
order of GM PROSPEC services.
================================================================================
APPLIABLE SPECIFICATIONS/DELIVERY
- --------------------------------------------------------------------------------
The Applicable Specifications for Signature Plus - Web are included in the
documentation distributed with Signature - Web. CWC shall deliver Signature Plus
- - Web to GM for installation upon execution of this SOW. The date of delivery
shall be considered the Acceptance Date.
Signature Plus - Web was developed consistent with software industry standards,
but is not ISO certified at this time.
Signature Plus is fully Year 2000 Compliant except as specified herein.
With respect to any third-party products procured by CWC for delivery to GM
under the terms of this Statement of Work (Third-Party Products), fi any, CWC
shall use all reasonable efforts: (i) to obtain on GM's behalf the warranty
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
1
<PAGE> 10
set forth in the preceding sentence; and (ii) to determine whether the
Third-Party Product is Year 2000 Compliant before using the Third-Party Product
hereunder. If CWC is unable to obtain such warranty for Third-Party Products,
CWC shall promptly notify GM and shall promptly undertake to test the
Third-Party Products using GM's Year 2000 Compliance Test Procedure attached
hereto as Exhibit A, or a comparable procedure approved by GM. If the
Third-Party Products fail the Year 2000 Compliance Test Procedure, GM shall have
the option to do one of the following: (i) reject the Third-Party Products and
pursue other alternatives; or (ii) require CWC to upgrade the Third-Party
Products to render it Year 2000 Compliant.
To be "Year 2000 Compliant" Signature Plus must at all times before, during and
after January 1, 2000, accurately process and handle date and time data
(including, but not limited to, calculating, comparing and sequencing) from,
into, and between the twentieth and twenty-first centuries, and the years 1999
and 2000, including leap year calculations, to the extent that other information
technology (e.g., hardware, software and firmware) used in combination with
Signature Plus properly exchange date/time data with it.
================================================================================
MAINTENANCE FEE
- --------------------------------------------------------------------------------
STANDARD MAINTENANCE (REQUIRED, 15% OF
THE TOTAL LICENSE FEE FOR SIGNATURE PLUS - WEB .................... $[ * * * ]
See below for definition of Standard maintenance to be provided to GM for
Signature Plus - Web.
If GM Decides to buy additional licenses for Concurrent Users or servers, CWC
will calculate the license fee based on the percentages above and pro-rate to
the end of the then-current GM maintenance year.
This maintenance fee will be invoiced under the existing purchase order for GM
PROSPEC services.
================================================================================
================================================================================
MAINTENANCE DESCRIPTION
- --------------------------------------------------------------------------------
CWC shall provide telephone support via a CWC customer support representative to
research questions and resolve issues for the GM designated contacts identified
in the attached schedule.
o Support is provided from 8am to 5pm Central Time, Monday through Friday
excluding CWC designated holidays. This service will also provide a means
for two GM designated contacts to provide feedback to CWC on the Software
and Tools.
Following is a definition of priority levels:
o P1: Production/Development Down
o P2: Major Feature/Function Failure
o P3: Minor Feature/Function Failure
o P4: Minor Question
Priority level support shall be handled according to the following table:
================================================================================
- --------------------------------------------------------------------------------
Priority Standard
- ---------- ---------------------------------------------------------------------
P1 CWC will use best efforts to respond to the GM contact within two
hour of notice and provide a fix plan within 24 hours.
- ---------- ---------------------------------------------------------------------
P2 CWC will use best efforts to respond to the GM contact within four
hours of notice and provide a fix plan within 48 hours
- ---------- ---------------------------------------------------------------------
P3 CWC will use best efforts to respond to the GM contact eight hours
of notice and provide a fix plan within ten days
- ---------- ---------------------------------------------------------------------
P4 CWC will use best efforts to respond to GM contact within eight
hours of notice.
- --------------------------------------------------------------------------------
Maintenance includes issuance of upgrades of Signature Plus - Web as they become
available from CWC. CWC is currently planning to more Signature Plus Web -
Application towards a UNIX environment at some point in the future as an
upgrade; CWC will make such upgrade available to GM under this maintenance
agreement if and when available. Upon issuance of an upgrade, CWC shall provide
the telephone support identified in this SOW for the previous upgrade for a
period of 12 months.
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
2
<PAGE> 11
Maintenance service does not include the delivery of any software and associated
documentation which CWC offers as separate products which have not been licensed
to GM.
Maintenance services shall start upon execution of this SOW.
================================================================================
TAX AND DUTIES
- --------------------------------------------------------------------------------
All duties, taxes and levies (excluding taxes based on CWC's net income), if
any, shall be borne by GM.
================================================================================
FEES AND PAYMENT TERMS
- --------------------------------------------------------------------------------
Payment of maintenance fees shall commence upon execution of this SOW and shall
be invoiced annually in advance. Ninety (90) days prior to the end of the annual
maintenance period, CWC shall provide written notification to the GM Project
Manager (with a copy to the Practice Area Manager, General Commercial and
Government Contracts Practice Area) of any increase in the maintenance fee for
the following annual period. Within thirty (30) days of such notice, GM shall
notify CWC whether or not they will proceed with CWC's maintenance services for
the following year. In the event GM does not provide such notice within thirty
(30) days, the maintenance services shall automatically renew for the next
annual period.
================================================================================
The fees and terms in this SOW are valid until June 5, 1998. If this SOW is not
signed by GM prior to that date, CWC may revise such fees and terms.
================================================================================
SIGNATURES
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties have signed this SOW by their duly authorized
representatives.
GENERAL MOTORS CORPORATION CWC INCORPORATED
By: [ * * * ] By: R. C. Lueck
----------------------------- -----------------------------
Signature: [ * * * ] Signature: /s/ R.C. Lueck
---------------------- ----------------------
Title: Sr. Divisional Buyer Title: V.P. Corporate Services
-------------------------- --------------------------
Date: June 26, 1998 Date: June 25, 1998
--------------------------- ---------------------------
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
3
<PAGE> 12
GM DESIGNATED CONTACTS
================================================================================
CONTACT #1
- --------------------------------------------------------------------------------
Name: [ * * * ]
---------------------------------------------------------------------------
Title: [ * * * ]
--------------------------------------------------------------------------
Business Address: [ * * * ]
---------------------------------------------------------------
Business Phone: [ * * * ]
-----------------------------------------------------------------
Business Fax: [ * * * ]
-------------------------------------------------------------------
E-mail: [ * * * ]
-------------------------------------------------------------------------
================================================================================
CONTACT #2
- --------------------------------------------------------------------------------
Name: [ * * * ]
---------------------------------------------------------------------------
Title: [ * * * ]
--------------------------------------------------------------------------
Business Address: [ * * * ]
---------------------------------------------------------------
Business Phone: [ * * * ]
-----------------------------------------------------------------
Business Fax: [ * * * ]
-------------------------------------------------------------------
E-mail:
-------------------------------------------------------------------------
================================================================================
CONTACT #3
- --------------------------------------------------------------------------------
Name: [ * * * ]
---------------------------------------------------------------------------
Title: [ * * * ]
--------------------------------------------------------------------------
Business Address: [ * * * ]
---------------------------------------------------------------
Business Phone: [ * * * ]
-----------------------------------------------------------------
Business Fax: [ * * * ]
-------------------------------------------------------------------
E-mail:
-------------------------------------------------------------------------
================================================================================
CONTACT #4
- --------------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Business Address:
---------------------------------------------------------------
Business Phone:
-----------------------------------------------------------------
Business Fax:
-------------------------------------------------------------------
E-mail:
-------------------------------------------------------------------------
================================================================================
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
4
<PAGE> 1
Exhibit 10.15.2
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--
GM General Motors Corporation
-- ###ESTABLISHED PER RELEASE### PURCHASE PAGE 1
ORDER: GMB06046
GENERAL MOTORS CORPORATION Ship To:
WORLDWIDE PURCHASING This Number Must Appear On All Inovices, Packing
100 RENAISSANCE CENTER Slips, Packages and Bills of Lading
PO BOX 100 (2) copies of your packing slip must accompany each
DETROIT MI shipment.
48265-1000 US IF REQUESTED, SEND INVOICES TO Item Identification Number(s) must be shown on Packing
PERSON WHO ORDERED MATERIAL OR Slips and Invoices.
VENDOR NUMBER 11-876-9389 Invoice To: SERVICES!!! DON'T SEND ANY Invoice Attn: Accounts Payable
FIREPOND INC. INVOICES TO PAYABLES!!!! Do not Declare Valuation of Express Shipments or
TO: 1983 PREMIER DR VARIOUS MI Insure Parcel Post.
PO BOX 4459 48331 US ======================================================
MANKATO MN Order Date PHONE: [ * * * ]
56002-4459 [TEXT ILLEGIBLE ON FAXED DOCUMENT] 02/03/99 [ * * * ]
------------------------- ---------------------------
If Government Contract Number is Shown ALTERATION ISSUE DATE KJ BUYER
Hereon, additional Terms and Conditions ---------------------------
Attached Hereto Apply. -------------------------
---------------------------
------------------------- PURCHASING AGENT
ALTERATION EFFECTIVE DATE
====================================================================================================================================
PAYMENT TERMS F.O.B. DESTINATION UNLESS OTHERWISE INDICATED SHIP VIA
NET 2ND DAY OF 2ND MONTH OP YOUR DELIVERY
====================================================================================================================================
ITEM QUANTITY ITEM RFG PRICE PRICE UNIT
SEQUENCE ORDERED IDENTIFICATION NO. NOUN NAME DESCRIPTION NUMBER DATE REQUIRED TAX CODE % BASE UNIT MULTIPLE MEASURE
- ------------------------------------------------------------------------------------------------------------------------------------
THIS IS A MISC BLANKET ORDER FOR THE COMMODITY GM PROSPEC
### THIS IS A LOCAL BLANKET ORDER ###
EFFECTIVE DATE: 01/01/99 EXPIRATION DATE: 12/31/00
THIS ORDER LISTED IN THE FOLLOWING CURRENCY
USD DOLLARS (UNITED STATES)
THIS IS A BLANKET PURCHASE ORDER, EFFECTIVE THE
FIRST DAY OF JANUARY 1999 BETWEEN FIREPOND, INC.
(FORMERLY KNOWN AS CLEAR WITH COMPUTERS INC. CWC)
1983 PREMIER DR, PO BOX 4459, MANKATO MN, 56002-4459
A MINNESOTA CORPORATION, AND GENERAL MOTORS
CORPORATION, DETROIT, MI, A CORPORATION OF THE
STATE OF DELAWARE.
***** ATTENTION: [ * * * ]
***** INVOICE AND RECEIPT:
[ * * * ]
MANAGER, ELECTRONIC & INTERACTIVE RETAIL SYSTEMS
INFORMATION SYSTEMS & SERVICES, VEHICLE SALES,
SERVICE, AND MARKETING MAIL CODE 482-A14-B16
- ------------------------------------------------------------------------------------------------------------------------------------
BOO1784 USER: DALE D TURSO ORIGINAL CONTINUE PAGE 2
</TABLE>
[ * * * ] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 2
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BUYER NAME: [***] GENERAL MOTORS BLDG - STAFFS PAGE 2
- ------------------------------------------------------------------------------------------------------------------------------------
BUYER CODE: KJ BLANKET ORDER ATTACHMENT FORM
VENDOR: FIREPOND INC. ORDER NUMBER GMB06046 ISSUE DATE 02/03/99
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM VENDOR ITEM NOUN NAME DESCRIPTION RFQ NUMBER BASE UNIT PRICE PRICE BUY
SEQ PERCENT IDENTIFICATION MULT U/M
---- ------- -------------- --------- ----------- ---------- --------------- ----- ---
THIS BLANKET PURCHASE ORDER INCORPORATES THE PRODUCTS
USE AND GENERAL SERVICES AGREEMENT ("AGREEMENT")
DATED AUGUST 1, 1994, AMENDED JUNE 26, 1998, AND AS
- ------------------------------------------------------------------------------------------------------------------------------------
AMENDED FEBRUARY 19, 1999, ATTACHED HERETO DURING THE
PERIOD OF JANUARY 1, 1999 THROUGH DECEMBER 31, 2000.
THIS ORDER IS NOT TO EXCEED $[***]. COVERING
- ------------------------------------------------------------------------------------------------------------------------------------
THE TWO YEARS. REFERENCE PRDS2684.
THIS BLANKET PURCHASE ORDER REPLACES AND SUPERSEDES
TCB02351.
- ------------------------------------------------------------------------------------------------------------------------------------
******************* GM PROSPEC **********************
[***].
- ------------------------------------------------------------------------------------------------------------------------------------
[***].
[***].
- ------------------------------------------------------------------------------------------------------------------------------------
[***].
[***].
[***].
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER AGREES TO NOTIFY BUYER, IN WRITING OF ANY
REVISIONS IMPACTING COSTS AND/OR DELIVERABLES PRIOR
- ------------------------------------------------------------------------------------------------------------------------------------
TO COMMENCEMENT.
SELLER WILL ESTABLISH AND MAINTAIN A PROCEDURE FOR
- ------------------------------------------------------------------------------------------------------------------------------------
TRACKING AND REPORTING EQUAL PARTNER DOLLARS
QUARTERLY TO BUYER. BLANKET ORDER REQUIRES A
MINIMUM OF 10% OF GM BUSINESS BE DEDICATED TO
- ------------------------------------------------------------------------------------------------------------------------------------
EQUAL PARTNER (MINORITY) SUPPLIERS SPECIFIED BY
GENERAL MOTORS CORPORATION.
- ------------------------------------------------------------------------------------------------------------------------------------
RIGHT TO AUDIT
BY ACCEPTANCE OF A PURCHASE ORDER THE SELLER OF GOODS
AND/OR SERVICES GRANTS BUYER THE RIGHT TO AUDIT ALL
- ------------------------------------------------------------------------------------------------------------------------------------
CHARGES AND AGREES THAT ALL RECORDS SUPPORTING
CHARGES (INCLUDING THOSE OF SUBSIDIARIES AND AFFILIATES
TO WHOM WORK HAS BEEN CONTRACTED) WILL BE
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE FOR AUDIT BY GENERAL MOTORS CORPORATION FOR
A PERIOD OF ONE (1) YEAR BEYOND FINAL PAYMENT. (ZH)
- ------------------------------------------------------------------------------------------------------------------------------------
"DO NOT BILL SALES OR USE TAX ON ITEMS DELIVERED TO
BOO1784 USER: [***] CONTINUE PAGE 3
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 3
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BUYER NAME: [***] GENERAL MOTORS BLDG - STAFFS PAGE 3
- ------------------------------------------------------------------------------------------------------------------------------------
BUYER CODE: KJ BLANKET ORDER ATTACHMENT FORM
VENDOR: FIREPOND INC. ORDER NUMBER GMB06046 ISSUE DATE 02/03/99
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM VENDOR ITEM NOUN NAME DESCRIPTION RFQ NUMBER BASE UNIT PRICE PRICE BUY
SEQ PERCENT IDENTIFICATION MULT U/M
---- ------- -------------- --------- ----------- ---------- --------------- ----- ---
ALL SHIPPED TO LOCATIONS WITHIN STATES LISTED
- ------------------------------------------------------------------------------------------------------------------------------------
BELOW." GM HOLDS DIRECT AUTHORITY WITH THESE
STATES. AS A RESULT, IN ALL OF THE IDENTIFIED STATES
GM WILL REMIT DIRECTLY TO TAXING AUTHORITIES, ALL
- ------------------------------------------------------------------------------------------------------------------------------------
SALES OR USE TAX LIABLITY RELATED TO ITS PURCHASE
AND USE OF TANGIBLE PERSONAL PROPERTY AND SERVICES.
THEREFORE, EFFECTIVE IMMEDIATELY, THIS TAX CLAUS
- ------------------------------------------------------------------------------------------------------------------------------------
SUPERSEDES ALL TAX CODE INFORMATION FOUND ON THIS
ORDER. EXCEPT FOR THOSE STATES NOT IDENTIFIED BELOW.
FOR THOSE STATES NOT IDENTIFIED BELOW PLEASE
- ------------------------------------------------------------------------------------------------------------------------------------
CONTINUE TO FOLLOW THE SPECIFIC TAX CODE INSTRUCTIONS
FOUND ON THIS ORDER. LISTED BELOW ARE DIRECT PAY
PERMIT OR SALES TAX LICENSE NUMBERS FOR THE SEVENTEEN
- ------------------------------------------------------------------------------------------------------------------------------------
(17) STATES, OR GM LOCATIONS WITHIN A STATE, WHERE GM
HOLDS DIRECT PAY AUTHORITY AL #565
GA #044-38-00894-3 IN #003-2804890001
- ------------------------------------------------------------------------------------------------------------------------------------
KS #98-0004A(FAIRFAX ONLY) KY #000-10
LA #6009013-008DP (NATG ONLY) MD #20
MI #ME-0900440 MS #902
- ------------------------------------------------------------------------------------------------------------------------------------
MS #4277 (SPO ONLY) MO #11731559
NJ #DP380572515/002 NY #DP-003445
OH #98-000513 OK #137479
- ------------------------------------------------------------------------------------------------------------------------------------
PA #02-93450/DP246 TX #1-38-0572515-0
VA # 9980000793 WI #WDP95-01-1012
FURTHER, IF THIS ORDER RELATES TO THE CONSTRUCTION
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRACT FOR REAL PROPERTY, ALL APPLICABLE SALES AND
USE TAXES ARE THE RESPONSIBILITY OF THE CONTRACTOR,
AND SHOULD BE INCLUDED IN THE CONTRACTOR'S BID AS
- ------------------------------------------------------------------------------------------------------------------------------------
REQUIRED PURSUANT TO SECTION 7 OF THE GM 1638 (12/95
REV. 1) "CONSTRUCTION GENERAL CONDITIONS," UNLESS THE
RESPONSIBILITY FOR PAYMENT FO SALES & USE TAXES ARE
- ------------------------------------------------------------------------------------------------------------------------------------
OTHERWISE SPECIFICALLY OUTLINED IN THE CONTRACT.
ANY QUESTIONS ON THE ABOVE SHOULD BE DIRECTED TO THE
FOLLOWING: NAO DISBURSEMENTS - CUSTOMER SERVICE.
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone: 248-874-4636 (TX)
YEAR 2000 COMPLIANCE
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER, AND ANY GOODS AND SERVICES SUPPLIED BY
SELLER, SHALL BE YEAR 2000 COMPLIANT AND COMPATIBLE,
AND SHALL FUNCTION WITHOUT ERROR OR FAULT IN THE
- ------------------------------------------------------------------------------------------------------------------------------------
PROCESSING (INCLUDING, BUT NOT LIMITED TO
BOO1784 USER: [***] CONTINUE PAGE 4
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 4
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BUYER NAME: [***] GENERAL MOTORS BLDG - STAFFS PAGE 4
- ------------------------------------------------------------------------------------------------------------------------------------
BUYER CODE: KJ BLANKET ORDER ATTACHMENT FORM
VENDOR: FIREPOND INC. ORDER NUMBER GMB06046 ISSUE DATE 02/03/99
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM VENDOR ITEM NOUN NAME DESCRIPTION RFQ NUMBER BASE UNIT PRICE PRICE BUY
SEQ PERCENT IDENTIFICATION MULT U/M
---- ------- -------------- --------- ----------- ---------- --------------- ----- ---
CALCULATING, MANAGING, MANIPULATING, COMPARING
- ------------------------------------------------------------------------------------------------------------------------------------
AND SEQUENCING) OF DATE AND DATE-RELATED DATA, FOR
THE YEARS 2000 AND BEYOND. AT BUYER'S REQUEST,
SELLER SHALL CERTIFY IN WRITING ITS COMPLIANCE
- ------------------------------------------------------------------------------------------------------------------------------------
WITH THE FOREGOING. (Y2)
CONFIDENTIALITY
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER, IN ORDER TO PROVIDE THE SERVICES SET FORTH IN
THIS PURCHASE ORDER, WILL REQUIRE INFORMATION FROM
BUYER WHICH BUYER CONSIDERS CONFIDENTIAL (BUYER'S
- ------------------------------------------------------------------------------------------------------------------------------------
INFORMATION). BUYER IS WILLING TO DISCLOSE BUYER'S
INFORMATION ONLY WITH THE UNDERSTANDING THAT SELLER
MAINTAIN ITS CONFIDENTIALITY.
- ------------------------------------------------------------------------------------------------------------------------------------
ACCORDINGLY, SELLER ACKNOWLEDGES THAT BUYER'S
INFORMATION IS BEING DISCLOSED TO SELLER FOR THE SOLE
- ------------------------------------------------------------------------------------------------------------------------------------
PURPOSE OF PERMITTING SELLER TO PERFORM THE SERVICES
SET FORTH IN THIS PURCHASE ORDER, AND AGREES THAT IT
WILL NOT USE THE INFORMATION FOR ANY OTHER PURPOSE.
- ------------------------------------------------------------------------------------------------------------------------------------
IN ADDITION, SELLER AGREES THAT IT WILL NOT DISCLOSE,
DISSEMINATE OR OTHERWISE MAKE AVAILABLE BUYER'S
INFORMATION TO ANYONE, OTHER THAN TO THOSE EMPLOYEES
- ------------------------------------------------------------------------------------------------------------------------------------
WHO HAVE A NEED TO KNOW IT IN ORDER FOR SELLER TO
FULFILL ITS OBLIGATIONS UNDER THIS PURCHASE ORDER.
SELLER AGREES THAT IT WILL TAKE APPROPRIATE ACTION
- ------------------------------------------------------------------------------------------------------------------------------------
BY INSTRUCTION, AGREEMENT OR OTHERWISE, WITH ANY
PERSON PERMITTED ACCESS TO BUYER'S INFORMATION.
THE BUYER'S INFORMATION AND ANY ADDITIONS THERETO ARE
- ------------------------------------------------------------------------------------------------------------------------------------
THE SOLE PROPERTY OF BUYER. AT BUYER'S REQUEST OR
UPON COMPLETION OF SELLER'S USE OF BUYER'S
INFORMATION, SELLER WILL RETURN ALL COPIES OF BUYER'S
- ------------------------------------------------------------------------------------------------------------------------------------
INFORMATION TO BUYER OR, AT BUYER'S REQUEST, DESTROY
BUYER'S INFORMATION AND CERTIFY SUCH DESTRUCTION TO
BUYER.
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER FURTHER AGREES TO INDEMNIFY AND HOLD BUYER
HARMLESS FROM ANY AND ALL LIABILITIES, DAMAGES, FINES,
PENALTIES, COSTS, CLAIMS, DEMANDS, AND EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------------
(INCLUDING COSTS OF DEFENSE, SETTLEMENT, AND
REASONABLE ATTORNEY'S FEES), ARISING OUT OF THE
DISCLOSURE OR IMPROPER USE OF BUYER'S INFORMATION BY
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER OR SELLER'S EMPLOYEES. (YC)
BOO1784 USER: [***] CONTINUE PAGE 5
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BUYER NAME: [***] GENERAL MOTORS BLDG - STAFFS PAGE 5
- ------------------------------------------------------------------------------------------------------------------------------------
BUYER CODE: KJ BLANKET ORDER ATTACHMENT FORM
VENDOR: FIREPOND INC. ORDER NUMBER GMB06046 ISSUE DATE 02/03/99
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM VENDOR ITEM NOUN NAME DESCRIPTION RFQ NUMBER BASE UNIT PRICE PRICE BUY
SEQ PERCENT IDENTIFICATION MULT U/M
---- ------- -------------- --------- ----------- ---------- --------------- ----- ---
- ------------------------------------------------------------------------------------------------------------------------------------
TERMS AND CONDITIONS SEPTEMBER 30, 1998, APPLY,
OF WHICH SUPPLIER HAS RECEIVED A COPY.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
BOO1784 USER: [***] LAST PAGE 5
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been filed separately with the
Securities and Exchange Commission.
<PAGE> 6
GENERAL TERMS AND CONDITIONS
1. ACCEPTANCE:
Seller has read and understands this contract and agrees that Seller's written
acceptance or commencement of any work or services under this contract shall
constitute Seller's acceptance of these terms and conditions only.
2. SHIPPING AND BILLING:
Seller agrees: (a) to properly pack, mark and ship goods in accordance with the
requirements of Buyer, the involved carriers, and, if applicable, the country of
destination; (b) to route shipments in accordance with Buyer's Instructions; (c)
to make no charge for handling, packaging, storage or transportation of goods,
unless otherwise stated as an item on this contract; (d) to provide with each
shipment packing slips with Buyer's contract and/or release number and date of
shipment marked thereon; (e) to properly mark each package with a label/tag
according to Buyer's Instructions; (f) to promptly forward the original bill of
lading or other shipping receipt for each shipment in accordance with Buyer's
Instructions. Seller will include on bills of lading or other shipping receipts
correct classification identification of the goods shipped in accordance with
Buyer's instructions and the carrier's requirements. The marks on each package
and identification of the goods on packing slips, bills of lading and invoices
(when required) shall be sufficient to enable Buyer to easily identify the goods
purchased. Seller further agrees: (a) to accept payment based upon Buyer's
Evaluated Receipt Record/Self Billed invoice, unless an invoice is requested by
Buyer; and (b) to accept payment by electronic funds transfer. The payment date
is set forth in the Line Item Detail of this contract, or if not stated, shall
be the date established by Buyer's Multilateral Netting System (MNS-2), which
provides, on average, that payment shall be made on the second day of the second
month following, in the case of the Buyer's North American facilities, Seller's
shipment date of goods or date of services, and, for all of Buyer's other
locations, Buyer's receipt date of the goods or date of services. Buyer may
withhold payment pending receipt of evidence, in such form and detail as Buyer
may direct, of the absence of any liens, encumbrances and claims on the goods or
services under this contract.
3. DELIVERY SCHEDULES:
Time is of the essence, and deliveries shall be made both in quantities and at
times specified in Buyer's schedules. Buyer shall not be required to make
payment for goods delivered to Buyer that are in excess of quantities specified
in Buyer's delivery schedules. Buyer may change the rate of scheduled shipments
or direct temporary suspension of scheduled shipments, neither of which shall
entitle Seller to a modification of the price for goods or services covered by
this contract. Where quantities and/or delivery schedules are not specified,
Seller shall deliver goods in such quantities and times as Buyer may direct in
subsequent releases.
4. PREMIUM SHIPMENTS:
If Seller's acts or omissions result in Seller's failure to meet Buyer's
delivery requirements and Buyer requires a more expeditious method of
transportation for the goods than the transportation method originally specified
by Buyer, Seller shall ship the goods as expeditiously as possible at Seller's
sole expense.
5. CHANGES:
Buyer reserves the right at any time to direct changes, or cause Seller to make
changes, to drawings and specifications of the goods or to otherwise change the
scope of the work covered by this contract including work with respect to such
matters as inspection, testing or quality control, and Seller agrees to promptly
make such changes. Any difference in price or time for performance resulting
from such changes shall be equitably adjusted by Buyer after receipt of
documentation in such form and detail as Buyer may direct. Any changes to this
contract shall be made in accordance with Paragraph 31.
6. SUPPLIER QUALITY AND DEVELOPMENT; INSPECTION:
Seller agrees to participate in Buyer's supplier quality and development
program(s) and to comply with all quality requirements and procedures specified
by Buyer, as revised from time to time, including those applicable to Seller as
set forth in Quality System Requirements QS-9000. In addition, Buyer shall have
the right to enter Seller's facility at reasonable times to inspect the
facility, goods, materials and any property of Buyer covered by this contract.
Buyer's inspection of the goods, whether during manufacture, prior to delivery
or within a reasonable time after delivery, shall not constitute acceptance of
any work-in-process or finished goods.
7. NONCONFORMING GOODS:
Seller acknowledges that Buyer will not perform incoming inspections of the
goods, and waives any rights to require Buyer to conduct such inspections. To
the extent Buyer rejects goods as nonconforming, the quantities under this
contract will automatically be reduced unless Buyer otherwise notifies Seller.
Seller will not replace quantities so reduced without a new contract or schedule
from Buyer. Nonconforming goods will be held by Buyer in accordance with
Seller's instructions at Seller's risk. Seller's failure to provide written
instructions within 10 days, or such shorter period as may be commercially
reasonable under the circumstances, after notice of nonconformity shall entitle
Buyer, at Buyer's option, to charge Seller for storage and handling or to
dispose of the goods without liability to Seller. Payment for nonconforming
goods shall not constitute an acceptance of them, limit or impair Buyer's right
to assert any legal or equitable remedy, or relieve Seller's responsibility for
latent defects.
8. FORCE MAJEURE:
Any delay or failure of either party to perform its obligations shall be excused
if Seller is unable to produce, sell or deliver, or Buyer is unable to accept
delivery, buy or use, the goods or services covered by this contract, as the
result of an event or occurrence beyond the reasonable control of the party and
without its fault or negligence, including, but not limited to, acts of God,
actions by any governmental authority (whether valid or invalid), fires, floods,
windstorms, explosions, riots, natural disasters, wars, sabotage, labor problems
(including lockouts, strikes and slowdowns), inability to obtain power,
material, labor equipment or transportation, or court injunction or order;
provided that written notice of such delay (including the anticipated duration
of the delay) shall be given by the affected party to the other party as soon as
possible after the event or occurrence (but in no event more than 10 days
thereafter). During the period of such delay or failure to perform by Seller,
Buyer, at its option, may purchase goods from other sources and reduce the
schedules to Seller by such quantities, without liability to Seller, or have
Seller provide the goods from other sources in quantities and at times requested
by Buyer, and at the price set forth in this contract. In addition, Seller at
its expense shall take such actions as are necessary to ensure the supply of
goods to Buyer for a period of at least 30 days during any anticipated labor
disruption or resulting from the expiration of Seller's labor contract(s). If
requested by Buyer, Seller shall, within 10 days, provide adequate assurances
that the delay shall not exceed 30 days. If the delay lasts more than 30 days or
Seller does not provide adequate assurance that the delay will cease within 30
days, Buyer may immediately terminate this contract without liability.
9. WARRANTY:
Seller warrants/guarantees that the goods covered by this contract will conform
to the specifications, drawings, samples, or descriptions furnished to or by
Buyer, and will be merchantable, of good material and workmanship and free from
defect. In addition, Seller acknowledges that Seller knows of Buyer's intended
use and warrants/guarantees that all goods covered by this contract that have
been selected, designed, manufactured or assembled by Seller based upon Buyer's
states use will be fit and sufficient for the particular purposes intended by
Buyer. The warranty period shall be that provided by applicable law, except that
if Buyer offers a longer warranty to its customers for goods installed on
vehicles, such longer period shall apply.
10. INGREDIENTS DISCLOSURE; SPECIAL WARNINGS NAD INSTRUCTIONS:
If requested by Buyer, Seller shall promptly furnish to Buyer in such form and
detail as Buyer may direct: (a) a list of all ingredients in the goods; (b) the
amount of all ingredients; and (c) information concerning any changes in or
additions to such ingredients. Prior to and with the shipment of the goods,
Seller agrees to furnish to Buyer sufficient warning and notice in writing
(including appropriate labels on the goods, containers and packing) of any
hazardous material that is an ingredient or a part of any of the goods, together
with special handling instructions as may be necessary to advise carriers,
Buyer, and their respective employees of how to exercise that measure of care
and precaution that will best prevent bodily injury or property damage in the
handling, transportation, processing, use or disposal of the goods, containers
and packing shipped to Buyer.
11. INSOLVENCY:
Buyer may immediately terminate this contract without liability to Seller in any
of the following or any other comparable events: (a) insolvency of Seller; (b)
filing of a voluntary petition in bankruptcy by Seller; (c) filing of any
involuntary petition in bankruptcy against Seller; (d) appointment of a receive
or trustee for Seller; or (e) execution of an assignment for the benefit of
creditors by Seller, provided that such petition, appointment or assignment is
not vacated or nullified within 15 days of such event. Seller shall reimburse
Buyer for all costs incurred by Buyer in connection with any of the foregoing,
including, but not limited to, all attorney's or other professional fees.
12. TERMINATION FOR BREACH OR NONPERFORMANCE:
Buyer reserves the right to terminate all or any part of this contract, without
liability to Seller, if Seller: (a) repudiates or breaches any of the terms of
this contract, including Seller's warranties; (b) fails to perform services or
deliver goods as specified by Buyer; (c) fails to make progress so as to
endanger timely and proper completion of services or deliver of goods; and does
not correct such failure or breach within 10 days (or such shorter period of
time if commercially reasonable under the circumstances) after receipt of
written notice from Buyer specifying such failure or breach.
13. TERMINATION FOR CONVENIENCE:
In addition to any other rights of Buyer to terminate this contract, Buyer, may,
at its option, immediately terminate all or any part of this contract, at any
time and for any reason, by giving written notice to Seller. Upon such
termination, Buyer shall pay to Seller the following mounts without duplication:
(a) the contract price for all goods or services that have been completed in
accordance with this contract and not previously paid for; and (b) the actual
costs of work-in-process and raw materials incurred by Seller in furnishing the
goods or services under this contract to the extent such costs are reasonable in
amount and are properly allocable or apportionable under generally accepted
accounting principles to the terminated portion of this contract; less, however,
the sum of the reasonable value or cost (whichever is higher) of any goods or
materials used or sold by Seller with Buyer's written consent, and the cost of
any damaged or destroyed goods or material. Buyer will make no payments for
finished goods, work-in-process or raw materials fabricated or procured by
Seller in amounts in excess of those authorized in delivery releases nor for any
undelivered goods that are in Seller's standard stock or that are readily
marketable. Payments made under this Paragraph shall not exceed the aggregate
price payable by Buyer for finished goods that would be produced by Seller under
delivery or release schedules outstanding at the date of termination. Except as
provided in this Paragraph, Buyer shall not be liable for and shall not be
required to make payments to Seller, directly or on account of claims by
Seller's subcontractors, for loss of anticipated profit, unabsorbed overhead,
interest on claims, product development and engineering costs, facilities and
equipment rearrangement costs or rental, unamortized depreciation costs, or
general and administrative burden charges from termination of this contract.
Within 60 days from the effective date of termination, Seller shall submit a
comprehensive termination claim to buyer, with sufficient supporting data to
permit Buyer's audit, and shall thereafter promptly furnish such supplemental
and supporting information as Buyer shall request. Buyer or its agents shall
have the right to audit and examine all books, records, facilities, work,
material, inventories and other items relating to any termination claim of
Seller.
14. INTELLECTUAL PROPERTY:
Seller agrees: (a) to defend, hold harmless and indemnify Buyer, its successors
and customers against any claims of infringement (including patent, trademark,
copyright, industrial design right, or other proprietary right, or misuse or
misappropriation of trade secret) and resulting damages and expenses (including
attorney's and other professional fees) arising in any way in relation to the
goods or services contracted, including such claims where Seller has provided
only part of the goods or services; Seller expressly waives any claim against
Buyer that such infringement arose out of compliance with Buyer's
specifications; (b) that Buyer or Buyer's subcontractor has he right to repair,
reconstruct, or rebuilt the specific goods delivered under this contract without
payment of any royalty to Seller; (c) that parts manufactured based on Buyer's
drawings and/or specifications may not be used for its own use or sold to third
parties without Buyer's express written authorization; and (d) to the extent
that this contract is issued for the creation of copyrightable works, the works
shall be considered "works made for hire;" to the extent that the works do not
qualify as "works made for hire," Seller hereby assigns to Buyer all right,
title and interest in all copyrights and moral rights therein.
15. TECHNICAL INFORMATION DISCLOSED TO BUYER:
Seller agrees not to assert any claim (other than a claim for patent
infringement) with respect to any technical information that Seller shall have
disclosed or may hereafter disclose to Buyer in connection with the goods or
services covered by this contract.
16. INDEMNIFICATION:
If Seller performs any work on Buyer's premises or utilizes the property of
Buyer, whether on or off Buyer's premises, Seller shall indemnify and hold Buyer
harmless from and against any liability, claims, demands or expenses (including
attorney's and other professional fees) for damages to the property of or
injuries (including death) to Buyer, its employees or any other person arising
from or in connection with Seller's performance of work or use of Buyer's
property, except for such liability, claim, or demand arising out of the sole
negligence of Buyer.
17. INSURANCE:
Seller shall maintain insurance coverage with carriers acceptable to Buyer and
in the amounts set forth in the Special Terms. Seller shall furnish to Buyer
either a certificate showing compliance with these insurance requirements or
certified copies of all insurance policies within 10 days of Buyer's written
request. The certificate will provide that Buyer will receive 30 days' prior
written notice from the insurer of any termination or reduction in the amount or
scope of coverage, Seller's furnishing of certificates of insurance or purchase
or insurance shall not release Seller of its obligations or liabilities under
this contract.
18. SELLER'S PROPERTY:
Unless otherwise provided to by Buyer, Seller, at its expenses, shall furnish,
keep in good condition, and replace when necessary all machinery, equipment,
tools, jigs, dies, gauges, fixtures, molds, patterns and other items ("Seller's
Property") necessary for the production of the goods. The cost of changes to
Seller's Property necessary to make design and specification changes authorized
by Buyer shall be paid for by Buyer. Seller shall insure Seller's Property with
full fire and extended coverage insurance for its replacement value. Seller
grants Buyer an irrevocable option to take possession of and title to Seller's
Property that is special for the production of the goods upon payment to Seller
of its net book value less any amounts that Buyer has previously paid to Seller
for the cost of such items; provided, however, that this option shall not apply
if Seller's Property is used to produce goods that are the standard stock of
Seller o if a substantial quantity of like goods are being sold by Seller to
others.
19. BUYER'S PROPERTY:
All supplies, materials, tools, jigs, dies, gauges, fixtures, molds, patterns,
equipment and other items furnished by Buyer, either directly or indirectly, to
Seller to perform this contract, or for which Seller has been reimbursed by
Buyer, shall be and remain the property of Buyer and held by Seller on a
bailment basis ("Buyer's Property"). Seller shall bear the risk of loss of and
damage to Buyer's Property. Buyer's Property shall at all times be properly
housed and maintained by Seller, at its expense, shall not be used by Seller for
any purpose other than the performance of this contract; shall be deemed to be
personally; shall be conspicuously marked by Seller as the property of Buyer;
shall not be commingled with the property of Seller or with that of a third
person; and shall not be moved from Seller's premises without Buyer's prior
written approval. Buyer shall have the right to enter Seller's premises at all
reasonable times to inspect such property and Seller's records with respect
thereto. Upon the request of Buyer, Buyer's Property shall be immediately
released to Buyer or delivered to Buyer by Seller, either (i) F.O.B. transport
equipment at Seller's plant, properly packed and marked in accordance with the
requirements of the carrier selected by Buyer to transport such property, or
(ii) to any location designed by Buyer, in which event Buyer shall pay to Seller
the reasonable costs of delivering such property to such location. When
permitted by law, Seller waives any lien or other rights that Seller might
otherwise have on any of Buyer's Property for work performed on such property or
otherwise.
20. SERVICE AND REPLACEMENT PARTS:
Seller will sell to Buyer goods necessary for it to fulfill its current model
service and replacement parts requirements at the price(s) set forth in this
contract. IF the goods are systems or modules, Seller will sell the components
or parts then comprise the system or module at price(s) that shall not, in the
aggregate, exceed the price of the system or module less assembly costs. During
the 15 year period after Buyer completes current model purchases, Seller will
sell goods to Buyer to fulfill Buyer's past model service and replacement parts
requirements. Unless otherwise agreed to by Buyer, the price(s) during the first
3 years of this period shall be those in effect at the conclusion of current
model purchases. For the remainder of this period, the price(s) for goods shall
be as agreed to by the parties. When requested by Buyer, Seller shall make
service literature and other materials available at no additional charge to
support Buyer's service part sales activities.
21. REMEDIES:
The rights and remedies reserved to Buyer in this contract shall be cumulative
with, and additional to, all other or further remedies provided in law or
equity. Without limiting the foregoing, should any goods fail to conform to the
warranties set forth in Paragraph 9, Buyer shall notify Seller and Seller shall,
if requested by Buyer, reimburse Buyer for any incidental and consequential
damages caused by such nonconforming goods, including, but not limited to,
costs, expenses and losses incurred by Buyer (a) in inspecting, sorting,
repairing or replacing such nonconforming goods; (b) resulting from production
interruptions, (c) conducting recall campaigns or other corrective service
actions, and (d) claims for personal injury (including death) or property damage
caused by such nonconforming goods. If requested by Buyer, Seller will enter
into a separate agreement for the administration or processing of warranty
chargebacks for nonconforming goods.
22. CUSTOMS; EXPORT CONTROLS:
Credits or benefits resulting or arising from this contract, including trade
credits, export credits or the refund of duties, taxes or fees, shall belong to
Buyer. Seller shall provide all information necessary (including written
documentation and electronic transaction records) to permit Buyer to receive
such benefits or credits, as well as to fulfill its customs related obligations,
original marketing or labeling requirements and local content origin
requirements, if any. Export licenses or authorizations necessary for the export
of the goods shall be the responsibility of Seller unless otherwise indicated in
this contract, in which event Seller shall provide such information as may be
necessary to enable Buyer to obtain such licenses or authorization(s). Seller
shall undertake such arrangements as necessary for the goods to be covered by
any duty deferral or trade zone program(s) of the country of import.
23. SET OFF/RECOUPMENT:
In addition to any right of setoff or recoupment provided by law, all amounts
due to Seller shall be considered net of indebtedness of Seller and its
affiliates/subsidiaries to Buyer and its affiliates/subsidiaries; and Buyer
shall have the right to setoff against or to recoup from any amounts due to
Seller and its affiliates/subsidiaries from buyer and its
affiliates/subsidiaries.
24. NO ADVERTISING:
Seller shall not, without first obtaining the written consent of Buyer, in any
manner advertise or publish the fact that Seller has contracted to furnish Buyer
the goods or services covered by this contract, or use any trademarks or trade
names of Buyer in Seller's advertising or promotional materials.
25. COMPLIANCE WITH LAWS; FORCE LABOR:
Seller, and any goods or services supplied by Seller, shall comply with all
applicable laws, rules, regulations, orders, conventions, ordinances or
standards of the country(ies) of destination or that relate to the manufacture,
labeling, transportation, importation, exportation, licensing, approval or
certification of the goods or services, including, but not limited to, those
relating to environmental matters, wages, hours and conditions of employment
subcontractor selection,. discrimination, occupational health/safety and motor
vehicle safety. Seller further represents that neither it nor any of its
subcontractors will utilize slave, prisoner or any other form or forced or
involuntary labor in the supply of goods or provision of services under this
contract. At Buyer's request, Seller shall certify in writing its compliance
with the foregoing. Seller shall indemnify and hold Buyer harmless from and
against any liability claims, demands or expenses (including attorney's or other
professional fees) arising from or relating to Seller's noncompliance.
26. NO IMPLIED WAIVER:
The failure of either party at any time to require performance by the other
party of any provision of this contract shall in no way affect the right to
require such performance at any time thereafter, nor shall the waiver of either
party of a breach of any provision of this contract constitute a waiver of any
succeeding breach of the same or any other provision.
27. NON-ASSIGNMENT:
Seller may not assign or delegate its obligations under this contract without
Buyer's prior written consent.
28. RELATIONSHIP OF PARTIES:
Seller and Buyer are independent contracting parties and nothing in this
contract shall make either party the agent or legal representative of the other
for any purpose whatsoever, nor does it grant either party any authority to
assume or to create any obligation on behalf of or in the name of the other.
29. GOVERNING LAW; JURISDICTION:
This contract is to be construed according to the laws of the country (and
state/province, if applicable) from which this contract is issued as shown by
the address of Buyer, excluding the provisions of the United Nations Convention
on Contracts for the International Sale of Goods and any conflict of law
provisions that would require application of another choice of law. Any action
or proceedings by Buyer against Seller may be brought by Buyer in any court(s)
having jurisdiction over Seller or, at Buyer's option, in the court(s) having
jurisdiction over Buyer's location, in which event Seller consents to
jurisdiction and service of process in accordance with applicable procedures.
Any actions or proceedings by Seller against Buyer may be brought by Seller only
in the court(s) having jurisdiction over the location of Buyer from which this
contract is issued.
30. SEVERABILITY:
If any term(s) of this contract is invalid or unforceable under any statute,
regulation, ordinance, executive order or other rule of law, such term(s) shall
be deemed reformed or deleted, as the case may be, but only to the extent
necessary to comply with such statute, regulation, ordinance, order or rule, and
the remaining provisions of this contract shall remain in full force and effect.
31. ENTIRE AGREEMENT:
This contract, together with the attachments, exhibits, supplements or other
terms of Buyer specifically referenced in this contract, constitutes the entire
agreement between Seller and Buyer with respect to the matters contained in this
contract and supersedes all prior oral or written representations and
agreements. This contract may only be modified by a contract amendment issued by
Buyer.
Revised: September 30, 1998
<PAGE> 1
Exhibit 10.15.3
AMENDMENT TO
PRODUCTS USE AND GENERAL SERVICES AGREEMENT
FirePond, Inc. (formerly known as CWC Incorporated), 1983 Premier Drive, P.O.
Box 4459, Mandako, Minnesota 56002-4459, a corporation of the State of
Minnesota, hereinafter called "FirePond," and General Motors Corporation, 3044
West Grand Boulevard, Detroit, Michigan 48202, a corporation of the State of
Delaware, hereinafter referred to as "GM" entered into a Products Use and
General Services Agreement ("Agreement") on August 1, 1994, as amended June 26,
1998. The parties hereby agree to amend the Agreement as follows:
1. Delete Section 3(c) entitled "Services in General" and replace with the
following:
(c) SERVICES IN GENERAL. In connection with the performance of any
Services pursuant to this Agreement:
(i) FirePond will use its best efforts to develop and
provide the deliverables identified in the Statement
of Work at the times indicated by GM. FirePond shall
use its best skills and judgment and shall perform
all services timely, diligently and to the reasonable
satisfaction of GM in an efficient and economical
manner consistent with the best interests of GM.
FirePond agrees to reperform, at no charge to GM, any
work that in the reasonable opinion of GM does not
meet the foregoing standard. Any dispute concerning
the services will be covered by Section 14 of this
Agreement.
(ii) FirePond warrants and agrees that Employees shall
have sufficient skill, knowledge, and training to
perform the Services.
(iii) Employees performing Services in the United States
must be United States citizens or lawfully admitted
in the United States for permanent residence or
lawfully admitted in the United States holding a visa
authorizing the performance of Services on behalf of
FirePond.
(iv) FirePond shall require all persons providing Services
on behalf of FirePond, when at a GM location, to
comply with all applicable regulations and policies
of GM including, but not limited to, security
regulations.
(v) FirePond shall provide for an pay the compensation
and other benefits of Employees including, but not
limited to, salary, health, accident and workers'
compensation benefits and shall pay all taxes and
contributions which an employer is required to pay
relating to the employment of employees.
2. Except as modified by this second Amendment, the Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, GM and FirePond have caused this Amendment to be
executed in multiple counterparts by their duly authorized representatives.
GENERAL MOTORS CORPORATION FIREPOND, INC.
By: [ * * * ] By: Thomas F. Carretta
------------------------------- -------------------------------
Signature: [ * * * ] Signature: /s/ Thomas F. Carretta
------------------------ ------------------------
Title: Sr. Divisional Buyer Title: Secretary
---------------------------- ----------------------------
Date: February 19, 1999 Date: 2/24/99
----------------------------- -----------------------------
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
<PAGE> 1
Exhibit 10.16
[FIREPOND LOGO]
SIGNATURE PLUS SOFTWARE LICENSE AGREEMENT ("AGREEMENT")
This Agreement is made effective this 18th day of December, 1998 by and between
FirePond, Inc., a Minnesota corporation with offices at 1983 Premier Drive,
Mankato, Minnesota, 56001, ("FirePond"), and BCBSM, Inc., dba Blue Cross and
Blue Shield of Minnesota, a corporation having a place of business at 3535 Blue
Cross Road, St. Paul, Minnesota 55122, ("Licensee").
Whereas FirePond desires to grant Licensee and Licensee desires to accept from
FirePond, a license to use Signature Plus Software and the Signature Plus
ToolKit upon the terms and conditions hereinafter set forth. NOW, THEREFORE,
FirePond and Licensee agree as follows:
1. DEFINITIONS
1.1. "Attachment(s)" means any writing that is specifically identified as
attached to this Agreement and forming part of this Agreement and is signed
by authorized representatives of both parties.
1.2. "Documentation" means FirePond's standard documentation, which is
delivered to Licensee under this Agreement, including FirePond's standard
manuals, functional specifications, minimum hardware configuration required
and third party software required.
1.3. "Proprietary Information" means (i) with respect to FirePond, the
Software, Tools and Documentation and any complete or partial copies thereof,
the concepts, techniques, ideas and know-how in such programs, any
third-party software licensed with or as part of the Software or Tools,
benchmark results, and any other information identified or reasonably
identifiable as confidential and proprietary information of FirePond or their
licensors ("FirePond Proprietary Information"); and (ii) with respect to
Licensee, information identified or reasonably identifiable as the
confidential and proprietary information of Licensee ("Licensee Proprietary
Information"), provided that, any part of the FirePond or Licensee
Proprietary Information which: (a) is or becomes publicly available through
no act or failure of the other party; or (b) was or is rightfully acquired by
the other party from a source other than the disclosing party prior to
receipt from the disclosing party; or (c) becomes independently available to
the other party as a matter of right, shall be excluded.
1.4. "Software" means all Signature Plus software including Signature Plus
Sales (for laptops and/or desktops), Signature Plus Web (available via the
Internet), and EBridge identified in the Documentation in machine-readable
form licensed to Licensee hereunder, including all corrections,
modifications, enhancements and updates to the Software.
1.5. "Tools" means the Signature Plus ToolKit software identified in the
Documentation in machine-readable form licensed to Licensee hereunder,
including all corrections, modifications, enhancements and updates to the
Software.
1.6. "Use" means to load, execute, employ, utilize, store, or display the
Software for the limited purpose of helping Licensee salespeople and
customers learn about, sell and/or buy products or services manufactured,
distributed or sold by Licensee and to load, execute, employ, utilize, store,
or display Tools for the limited purpose of supporting the Software and to
maintain, distribute and synchronize Licensee's data to be used in the
Software.
1.7. "Licensee" means those entities set forth in an Attachment "Licensee."
2. GRANT OF LICENSE
2.1. Subject to the terms and conditions of this Agreement FirePond grants
and Licensee accepts a non-exclusive, non-transferable license with rights to
Use the Software, Documentation and other FirePond Proprietary Information
provided by FirePond to Licensee and to sublicense the Software to the number
of individuals identified in an Attachment who are authorized to Use the
Signature Plus Sales version of the Software ("Named Users") and to allow
access to the Software to the number of individuals identified in an
Attachment as allowed access to the Signature Plus Web version of the
Software ("Concurrent Users"). In order to sublicense the Software to Named
Users, Licensee shall have in effect with such Named Users agreements
sufficient to obligate such Named Users to terms substantially similar to the
terms of Exhibit A. Licensee may transfer the Software from one Named User to
another Named User provided the Software is promptly deleted by the Named
User no longer using the Software and provided Licensee shall notify FirePond
quarterly of such transfers.
2.2. Subject to the terms and conditions of this Agreement FirePond grants
and Licensee accepts a non-exclusive, non-transferable license with rights to
Use the Tools at the sites identified in the Signature Plus License Fee
Attachment ("Designated Site(s)"). Licensee may use the Tools on as many
single computer stations as needed at the Designated Site. Licensee may
transfer the Tools from one Designated Site to another Designated Site upon
prior written notice to FirePond. The Tools must be promptly deleted in their
entirety from the Designated Site no longer in use. Licensee may use a
third-party certified by FirePond to Use the Tools on behalf of Licensee.
2.3. Licensee shall maintain accurate records of all Named Users. Upon
FirePond's request, Licensee shall provide FirePond with a copy of such
records and executed agreements. In addition, FirePond shall have the right
to inspect such records for compliance with the terms of this Agreement no
more frequently than annually, during Licensee's normal business hours and
upon reasonable advance notice. Licensee shall cooperate with FirePond to
ensure that each Named User upholds the requirements imposed upon them
through this Agreement or the agreement set forth in Exhibit A and will take
reasonable steps to ensure that such Named Users comply with such terms and
conditions. Licensee shall not be required to track Concurrent Users.
Licensee agrees to notify FirePond immediately after gaining knowledge of the
possession, use, disclosure or reproduction of Software or Tools by any
person or other party not authorized to have the benefit of such possession,
use, disclosure, or reproduction and to cooperate with FirePond and its
representatives in any investigation of and litigation against such
unauthorized use.
2.4. Licensee may make one copy of the Software and Tools for archival
purposes. Licensee may reproduce or copy any portion of the Documentation
into machine-readable or printed form for its internal use and for
distribution to Named Users. Licensee shall not remove any proprietary,
copyright, trademark, or service mark legend from the Software, Tools,
Documentation or FirePond Proprietary Information and shall include such
legends on any complete or partial copies of the Software, Tools,
Documentation or FirePond Proprietary Information.
3. FEES AND PAYMENT TERMS
3.1. In consideration of the licenses granted hereunder, Licensee shall pay
to FirePond license fees for the Software and Tools as set forth in
Attachments. The amount of license fees shall be calculated based on the
total number of Named Users for the Software, the total number of Concurrent
Users accessing the Software, and the number of Designated Sites for Tools.
As set forth in an Attachment, fees for Maintenance Services shall be paid
annually in advance in an amount calculated as a percentage of the License
Fees. FirePond and Licensee shall agree to any other services under a
separate Services Agreement.
3.2. Travel expenses and incidental expenses of FirePond shall be billed in
accordance with the current Blue Cross and Blue Shield of Minnesota Per Diem
Expense Allowance for Consultants Policy, a current copy of which is attached
hereto as Attachment A. FirePond shall bill such fees and expenses monthly.
3.3. Invoices are payable in full upon receipt of invoice. If the payment of
such invoice(s) is subject to a good faith dispute between the parties, the
project managers at FirePond and Licensee shall use their best efforts to
expeditiously resolve the dispute. If the project managers are unable to
resolve the dispute within fifteen (15) days, it shall be referred to a
FirePond executive or his/her designee and a Licensee executive or his/her
designee for mutual resolution. If the dispute is not resolved at the
executive level within fifteen
<PAGE> 2
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(15) days, FirePond shall have the right to bring suit on an open account.
All payments are to be made in U.S. dollars. Licensee shall pay a one and one
half percent penalty per month retroactive to the invoice date for payment(s)
received after thirty (30) days.
4. PROPRIETARY RIGHTS
4.1. Licensee acknowledges ownership of and title in and to all intellectual
property rights, including patent, trademark, service mark, copyright, and
trade secret rights, in the FirePond Proprietary Information are and shall
remain in FirePond and its respective licensors.
4.2. Except as permitted in this Agreement, Licensee shall not copy,
translate, disassemble, or decompile, nor create or attempt to create, by
reverse engineering or otherwise the source code from the object code of the
Software or Tools licensed hereunder or use it to create a derivative work,
unless authorized in writing by FirePond.
4.3. In order to protect the rights of FirePond and Licensee in their
respective Proprietary Information, FirePond and Licensee agree as follows:
4.3.1. Neither party shall, without the other party's prior written consent,
disclose, provide or make available any of the Proprietary Information of the
other party in any form to any person, except to bona fide employees,
officers, directors, or consultants or such party whose access is necessary
to enable such party to exercise its rights hereunder. Each party agrees that
prior to disclosing any Proprietary Information of the other party to any
consultant, it will obtain from that consultant a written acknowledgement
that such consultant will be bound by the same terms as specified in this
Section 4.
4.3.2. Licensee and FirePond acknowledge that any disclosure to third parties
of Proprietary Information may cause immediate and irreparable harm to the
owner of the disclosed Proprietary Information; therefore, each party agrees
to take all reasonable steps and the same protective precautions to protect
the Proprietary Information from disclosure to third parties as with its own
proprietary and confidential information.
4.4. Upon any termination hereunder, Licensee shall immediately cease Use of
the Software, Tools, Documentation and other FirePond Proprietary Information
and shall irretrievably delete and/or remove such items from all machines and
media and return such Software, Tools, Documentation and Proprietary
Information to FirePond within 30 days. Within 30 days after any termination,
FirePond shall return the Licensee Proprietary Information to Licensee.
5. MAINTENANCE SERVICES
Following expiration of the warranty period as defined in Section 7, Licensee
shall purchase and FirePond shall provide Licensee the maintenance services
identified in an Attachment.
6. INDEMNIFICATION
6.1. Subject to Section 6.2, if one party promptly notifies the other party
in writing of a third-party claim against it, the other party shall indemnify
the notifying party against all claims, liabilities, and costs, including
reasonable attorneys' fees reasonably incurred in the defense of any claim
brought against the notifying party by third parties alleging that the
notifying party's Use of the Software, Tools and Documentation or data or
other information supplied by the other party infringes or misappropriates:
(i) any United States patent; or (ii) a United States copyright; or (iii)
trade secret rights, provided that, the notifying party promptly notifies the
other party in writing of any such claim and the other party is permitted to
control fully the defense and any settlement of such claim. The notifying
party shall cooperate fully in the defense and may appear, at its own
expense, through counsel reasonably acceptable to the other party. The other
party may, in its sole discretion, settle any such claim on a basis requiring
FirePond to substitute for the Software, Tools and Documentation alternative
substantially equivalent non-infringing programs and supporting
documentation. The other party alone shall be responsible for taking such
actions which it determines are reasonably necessary or desirable in its sole
discretion in connection with any infringement or alleged infringement by a
third party of any portion of the Software, Tools and Documentation, provided
that should the software, Tools, or Documentation as delivered by licensee
become the subject of an infringement claim: Firepond at its sold expense
either (i) procure for licensee the right to continue to use the Software,
Tools, and Documentation as contemplated hereunder, or (ii) modify the
Software, Tools, or Documentation to eliminate any infringement claim,
provided that the Software and Tools' performance must remain the same as
provided for in the specifications, or (iii) replace the Software and Tools
with an equally suitable, compatible, and functionally equivalent
non-infringing product at no additional charge to licensee. If none of these
options are reasonably available to Firepond after executing its best efforts
to implement such options, then Firepond shall accept return of the Software,
Tools, and Documentation at Firepond's sole cost and expense and FirePond
shall pay to Licensee up to $3,500,000 as liquidated damages, as amortized
over five year useful life measured from the date of delivery..
6.2. FirePond makes no representation with respect to the possibility of
infringement if the claim of infringement is caused by: (1) Licensee's, Named
User's or Concurrent User's misuse or modification of Software, Tools and/or
Documentation; (2) Licensee's, Named User's or Concurrent User's failure to
use corrections or enhancements made available by FirePond; (3) Licensee's,
Named User's or Concurrent User's use of Software, Tools and/or Documentation
in combination with any product or information not owned or developed by
FirePond; or (4) Licensee's distribution, marketing or use for the benefit of
third parties other than Named Users or Concurrent Users of Software, Tools
and/or Documentation or distribution, marketing or use for the benefit of
third parties.
6.3. THE PROVISIONS OF THIS SECTION 6 STATE THE SOLE, EXCLUSIVE, AND ENTIRE
LIABILITY OF FIREPOND AND ITS LICENSORS TO LICENSEE AND LICENSEE'S SOLE
REMEDY WITH RESPECT TO THE INFRINGEMENT OF THIRD-PARTY INTELLECTUAL PROPERTY
RIGHTS.
7. WARRANTY
7.1. FirePond warrants that the Software and Tools will as delivered
materially conform to the functional specifications contained in the
Documentation and Exhibit B-2 ("Small Group Track") for 90 days following
execution of this Agreement. Services to be provided by FirePond during the
warranty period are those maintenance services identified in Section 5.
FirePond also warrants that the Software and Tools as delivered will be
materially free of all viruses, bombs and other self enacting devices that
could impair the functionality of the Software or Tools.
7.2. Should any component of the Software or Tools fail to conform materially
to the functional specifications therefore during the warranty period,
FirePond's sole obligation shall be, at FirePond's option, to correct the
defect by bringing the performance of the Software or Tools into material
compliance with the functional specifications or to replace the defective
component.
FirePond shall use reasonable commercial efforts to correct the defect by
bringing the performance of the Software into material compliance with the
functional specifications or to replace the defective component within thirty
(30) days or such longer period as is reasonable in the circumstances where
FirePond proceeds with all due diligence to cure such defect. In the event
FirePond is unable to correct or replace such defect within the stated time
period, Licensee shall refund the then present value of such Software to
Licensee, as amortized over a five (5) year useful life measured from the
date of delivery.
7.3. FirePond does not warrant that the Software or Tools will operate
uninterrupted nor that they will be free from minor defects or errors which
do not materially affect such performance nor that the applications contained
in the Software or Tools are designed to meet all Licensee's or Named Users'
or Concurrent Users' business requirements. FirePond makes no representation
or warranty as to the third-party software identified in the Documentation as
required to operate the Software or Tools.
7.4. FirePond represents and warrants to Licensee that: (i) the Software and
Tools shall, as delivered: (a) operate correctly and consistently with dates
and times before, during, and after the year 2000, and date and time ranges
before, spanning, and after 0:00 hours on January 1, 2000, and in a
<PAGE> 3
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manner identical to that in which the Software and Tools operate with dates,
times and date and time ranges prior to the year 2000; (b) utilize data
structures (databases, data files, etc.) which accommodate and provide
4-digit date century recognition; (c) operate in a manner which treats the
year 2000 as the year immediately following the year 1999 to 2000 without
material functional or data abnormality; and (d) manage and manipulate data
involving the transition of dates from 1999 to 2000 without material
functional or data abnormality; (ii) the Software and Tools as delivered will
lose no material functionality with respect to the introduction of record
containing dates falling on or after January 1, 2000 provided that all
products (for example, hardware and software) used with the Software and
Tools properly exchange accurate date data with the Software and Tools. The
representations and warranties provided herein shall not be limited to, and
shall survive for so long as maintenance services are purchased. FirePond
shall be responsible for and shall indemnify Licensee from and against all
losses and damages of any kind or nature incurred by Licensee up to the
amount of license fees paid hereunder as a result of any breach of the
foregoing representations and warranties.
7.5. FIREPOND DISCLAIMS ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE EXCEPT TO THE EXTENT THAT ANY WARRANTIES IMPLIED BY LAW
CANNOT BE VALIDLY WAIVED.
8. LIMITATION OF LIABILITY
8.1. Subject to the limited warranty set forth in Section 7, Licensee's sole
and exclusive remedies for any damages or loss in any way connected with the
Software or Tools or services furnished by FirePond, whether due to
FirePond's negligence or breach of any other duty, shall be, at FirePond's
option: (i) replacement of the Software or Tools or performance of services;
or (ii) return or credit of an appropriate portion of any payment made or to
be made by Licensee with respect to the applicable portion of the Software or
Tools or services. The foregoing limitation of liability does not apply to
infringement of the property rights referred to in Section 6, or to personal
injury or death caused solely by the gross negligence or willful misconduct
of FirePond. With respect to damage to tangible property, FirePond will not
be responsible in any amount in excess of the amount by which such damage is
paid by FirePond's liability insurance.
8.2. ANYTHING TO THE CONTRARY HEREIN NOTWITHSTANDING, UNDER NO CIR-CUMSTANCES
SHALL FIREPOND AND ITS LICENSORS BE LIABLE TO LICENSEE OR ANY OTHER PERSON OR
ENTITY FOR SPECIAL, INCIDENTAL, CON-SEQUENTIAL, OR INDIRECT DAMAGES, LOSS OF
GOOD WILL OR BUSINESS PROFITS, WORK STOPPAGE, DATA LOSS, COMPUTER FAILURE OR
MALFUNCTION, ANY AND ALL OTHER COMMERCIAL DAMAGES OR LOSS, OR EXEMPLARY OR
PUNITIVE DAMAGES UNLESS SUCH DAMAGES OR LOSSES ARE DUE TO THE WILLFUL
MISCONDUCT OF FIREPOND.
9. EFFECTIVE DATE, TERM AND TERMINATION
9.1. This Agreement shall become effective upon execution by both parties and
shall continue in effect unless the Agreement is terminated under the terms
of Section 9.2 below.
9.2. This Agreement and the license granted hereunder shall terminate upon
the earliest to occur of the following: (i) thirty days after Licensee gives
FirePond written notice of Licensee's desire to terminate this Agreement, for
any reason, but only after payment of all License and Maintenance Fees then
due and owing; (ii) thirty days after FirePond gives Licensee notice of
Licensee's material breach of any provision of the Agreement (other than
Licensee's breach of its obligations under Section 4 (Proprietary Rights ) or
Section 11 (Assignment), which breach shall result in immediate termination),
including more than thirty days delinquency in Licensee's payment of any
money due hereunder, unless Licensee has cured such breach during such thirty
day period; (iii) immediately if Licensee or FirePond files a petition for
bankruptcy or insolvency, has an involuntary petition filed against it,
commences an action providing for relief under bankruptcy laws, files for the
appointment of a receiver, or is adjudicated a bankrupt concern.
9.3. In the event of any termination hereunder, Licensee shall not be
entitled to any refund of any payments made by Licensee except as otherwise
provided in this Agreement.
9.4. The following sections of this Agreement survive expiration or
termination of this Agreement: Section 4 (Proprietary Rights), Section 6
(Indemnification), Section 7.4 (Warranty Disclaimer), Section 8 (Limitation
of Liability), Section 11.7 (Governing Law), and Section 13 (Export Control).
10. ASSIGNMENT
Licensee may not, without FirePond's prior written consent, assign, delegate,
sublicense, pledge, or otherwise transfer this Agreement, or any of its
rights or obligations under this Agreement, or the Software, Tools or
Documentation, to any party, except as set forth herein. Any permitted
assignment of this Agreement shall provide that the provisions of this
Agreement shall continue in full force and effect and that Licensee shall
guaranty the performance of its assignee and shall remain liable for all
obligations hereunder.
11. GENERAL
11.1. Force Majeure. Neither FirePond nor Licensee shall be deemed to be in
default of any provision of this Agreement for any failure in performance
resulting from acts or events beyond the reasonable control of FirePond or
Licensee.
11.2. No Waiver. If either party should waive any breach of any provision of
this Agreement, it shall not thereby be deemed to have waived any preceding
or succeeding breach of the same or any other provision hereof.
11.3. Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be construed without such provision.
11.4. Agreement Binding/Entire Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement and each Attachment hereto
constitute the complete and exclusive statement of the agreement between
FirePond and Licensee, and all previous representations, discussions, and
writings are merged in, and superseded by, this Agreement. This Agreement may
be modified only by a writing signed by both parties. This Agreement and each
Attachment hereto shall prevail over any additional, conflicting, or
inconsistent terms and conditions which may appear on any purchase order or
other document furnished by Licensee to FirePond.
11.5. Rights to Injunctive Relief. Both parties acknowledge that remedies at
law may be inadequate to provide FirePond or Licensee with full compensation
in the event of Licensee's material breach of Sections 2 (Grant of License),
Section 4 (Proprietary Rights), Section 13 (Export Control), or FirePond's
material breach of Section 4 with respect to Licensee's Proprietary
Information, and that the non-breaching party shall therefore be entitled to
seek injunctive relief in the event of any such material breach.
11.6. Taxes and Duties. Licensee is responsible for all taxes concerning the
Software and Tools, excluding taxes based on FirePond's income. If Licensee
will sublicense Software to Named Users, Licensee shall submit a resale
exemption certificate to FirePond. Licensee will self-asses use tax in the
event Licensee does not sublicense Software or if Licensee provides Software
to Named Users without consideration to Licensee.
11.7. Governing Law. This Agreement shall be governed by and construed under
the State of Minnesota law without reference to its conflicts of law
principles. Any legal action or suit related to this agreement shall be
brought exclusively in the courts of Minnesota. Both parties agree that the
courts of Minnesota are a convenient forum for the resolution of disputes.
11.8. Notices. All notices or reports which are required or may be given
pursuant to this Agreement shall be in writing and shall be deemed duly given
when delivered to the respective executive offices of FirePond and Licensee
at the addresses first set forth above.
11.9. Publicity. Neither party shall use the name of the other in publicity,
advertising, or similar activity, without the prior written consent of the
other.
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12. ARBITRATION
Except for the right of either party to apply to a court of competent
jurisdiction for a Temporary Restraining Order or other provisional remedy to
preserve the status quo or prevent irreparable harm pending the selection and
confirmation of a panel of arbitrators, and for the right of FirePond to bring
suit on an open account for any payments due FirePond hereunder, (after
expiration of the informal dispute resolution as identified in Section 3.3) any
controversy or claim arising out of or relating to this Agreement shall be
settled by arbitration in Minneapolis, Minnesota, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. Arbitration shall be conducted by a panel of three
members, FirePond and Licensee each selecting one member and the third member,
who shall be chairman, selected by agreement between the other two members. The
chairman shall be an attorney-at-law, and the other members shall have a
background or training in computer law, computer science, or marketing of
computer products. The arbitrators shall have the authority to grant injunctive
relief in a form substantially similar to that which would otherwise be granted
by a court of law.
13. EXPORT CONTROL
13.1. Licensee shall comply with United States export rules and regulations
as they relate to Software, Tools and Documentation. Without obtaining any
necessary licenses, Licensee will not export or re-export outside the United
States Software, Tools or Documentation, whether directly or indirectly, and
will not cause, approve or otherwise intentionally facilitate others in so
doing. Licensee shall indemnify FirePond against any claims, losses,
liability, or damages suffered or incurred by FirePond arising out of or
related to any violation by Licensee of any United States or any foreign laws
or regulations relative to the Licensee or Named User use, export, or
re-export of Software, Tools or Documentation to or within any country
outside the United States. Licensee shall ensure that each Named User
complies with United States export rules and regulations as they relate to
Software.
13.2. Licensee shall cooperate with FirePond to protect FirePond's
intellectual property rights in foreign jurisdictions to which Software,
Tools or Documentation are used or distributed as reasonably requested by
FirePond.
13.3. FirePond may require changes in the agreement set forth in Exhibit A
from time to time or with respect to use in a particular country.
13.4 The Licensee acknowledges that the Stated of Direction is an expression
of intent for further development for the health care industry. Licensee
agrees that it has not relied on the potential development in executing this
Agreement and further agrees that the availability of said development shall
not affect Licensee's payment obligation of the license fee set forth in the
License Fee Attachment.
14. ESCROW
FirePond warrants that the source code for the Software as it is or as it
becomes available, will be deposited in an escrow account maintained at Data
Securities International, Inc. (the "Escrow Agent"). FirePond will from time to
time deposit in an escrow account copies of all new releases of the source code
for the Software.
FirePond or FirePond's trustee in bankruptcy shall authorize the Escrow Agent to
make and release a copy of the source code to Licensee upon the occurrence of
any of the following events:
(a) FirePond has ceased its ongoing business operations relating to the
licensing of software; or
(b) FirePond fails to carry out the material maintenance obligations imposed
on it pursuant to this Agreement after reasonable opportunity has been
provided to FirePond to perform such obligations; or
(c) The existence of any one or more of the following circumstances, if
uncorrected for more than ninety (90) days: (i) entry of an order of
relief under Title 11 of the United States Code; the making by FirePond of
the general assignment for the benefit of creditors; (ii) the appointment
of a general receiver or trustee in the bankruptcy of FirePond's business
or property; or (iii) action by FirePond under any state insolvency or
similar law for the purpose of bankruptcy, reorganization or liquidation.
The occurrence of the described events shall not constitute reason for the
release of the source code if, within the specified ninety (90) day
period, FirePond (including its receiver or trustee in bankruptcy)
provides to Licensee's adequate assurances, reasonably acceptable to
Licensee, of its continuing ability and willingness to fulfill all of its
maintenance and support obligations.
In the event of release under this Agreement, Licensee agrees that it will treat
and preserve the source code of the Software as a trade secret of FirePond in
accordance with the same precautions adopted by Licensee to safeguard its own
trade secrets against unauthorized use and disclosure. Release under this
provision shall not extend Licensee any greater rights or lesser obligations
than are otherwise provided or imposed under this Agreement.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly
executed this Agreement to become effective as of the date first above written.
BCBSM, INC., DBA BLUE CROSS AND BLUE SHIELD OF MINNESOTA
By: /s/ John N. Ounjian /s/ Timothy M. Peterson
------------------------------------------------------------
Name: John N. Ounjian Timothy M. Peterson
----------------------------------------------------------
Title: CIO CFO
---------------------------------------------------------
Date: 12/18/98
----------------------------------------------------------
FIREPOND, INC.
By: /s/ Klaus P. Besier
------------------------------------------------------------
Name: Klaus P. Besier
----------------------------------------------------------
Title: CEO
---------------------------------------------------------
Date: 12/18/98
----------------------------------------------------------
<PAGE> 5
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EXHIBIT A
SOFTWARE NAMED USER AGREEMENT
1. DELIVERY
Upon acceptance of these terms, Named User will be provided electronic media
containing Software, as ordered by Named User through Licensee.
2. GRANT OF LICENSE
Subject to becoming effective as set forth above, Named User is hereby granted a
non-exclusive, non-transferable right to use Software for the limited purpose of
helping Named User and Named User's customers learn about, sell and/or buy
products manufactured, distributed or sold by Licensee. Named User agrees that
Software shall be used exclusively by Named User's authorized employees and only
for the limited purpose set forth above. The electronic media and Software shall
remain the property of Licensee and/or its suppliers. All applicable rights in
patents, copyrights, trade secrets and other confidential and proprietary
information, trademarks, and any other intellectual property rights in Software
are and shall remain in Licensee and/or its suppliers. Named User is forbidden
from copying, transferring possession, using, or permitting others to copy,
possess or use the electronic media and/or Software for any purpose not
specifically authorized in this Agreement. Named User warrants that any
individuals authorized by Named User to access Software shall be bound by the
terms and conditions of this Agreement.
3. TERM OF AGREEMENT
The term of this Agreement shall commence upon execution of the Agreement and
shall continue until termination as provided herein.
4. SOFTWARE SUPPORT
4.1 Warranty Disclaimer
LICENSEE AND ITS SUPPLIERS MAKE AND NAMED USER RECEIVES NO REPRESENTATION,
CONDITION OR WARRANTY, EXPRESS OR IMPLIED, IN ANY OTHER PROVISION OF THIS
AGREEMENT OR COMMUNICATION WITH NAMED USERS WITH RESPECT TO SOFTWARE, AND
LICENSEE AND ITS SUPPLIERS SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES
WHETHER AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
MATTER. NAMED USER ASSUMES ALL RESPONSIBILITIES FOR THE SELECTION OF SOFTWARE
TO ACHIEVE NAMED USER'S INTENDED RESULTS. LICENSEE AND ITS SUPPLIERS DO NOT
WARRANT THAT SOFTWARE WILL MEET NAMED USER'S REQUIREMENTS OR THAT SOFTWARE
WILL BE UNINTERRUPTED OR ERROR FREE.
4.2 LIMITATION OF LIABILITY EXCEPT AS PROVIDED BELOW
LICENSEE AND ITS SUPPLIERS SHALL HAVE NO LIABILITY FOR ANY INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR EXEMPLARY DAMAGES OF ANY DESCRIPTION, INCLUDING, WITHOUT
LIMITATION, DAMAGES DIRECTLY OR INDIRECTLY ARISING OUT OF THE INSTALLATION,
REMOVAL, USE OR NON-USE OF SOFTWARE OR LOSS OF PROFITS, WHETHER ARISING OUT OF
WARRANTY OR CONTRACT, NEGLIGENCE, OR OTHER NON-INTENTIONAL TORT OR OTHERWISE.
UNDER NO CIRCUMSTANCES SHALL LICENSEE'S AND ITS SUPPLIERS' LIABILITY EXCEED THE
APPLICABLE LICENSE FEE PAID BY NAMED USER UNDER THIS AGREEMENT, REGARDLESS OF
THE FORM OF THE ACTION. NAMED USER EXPRESSLY AGREES THAT THE LIMITATIONS OF
INCIDENTAL, SPECIAL, CONSEQUENTIAL AND EXEMPLARY DAMAGES SET FORTH ABOVE ARE
AGREED ALLOCATIONS OF RISK, ARE REFLECTED IN THE FEES THAT HAVE BEEN AGREED TO
BETWEEN THE PARTIES HEREIN.
5. RESTRICTIONS ON USE, CONFIDENTIALITY
To the maximum extent permitted by law, Named User agrees not to reverse
compile, disassemble, or otherwise reverse engineer Software or any portion
thereof. Named User further agrees not to disclose, reproduce, publish, release,
transfer, translate, copy or make available any portion of Software code or to
prepare or copy derivative or collective works based upon and/or containing any
portion of Software code. Named User agrees that all materials supplied under
this Agreement shall be kept in a secure place. Named User agrees to and shall
take appropriate action satisfactory to Licensee, by instruction, agreement or
otherwise, with any persons permitted access to Software to ensure continuous
confidentiality. All notices pertaining to use and ownership of the electronic
media and Software will be retained on the electronic media and Software in the
possession of Named User.
6. UNAUTHORIZED ACTS
Named User agrees to notify Licensee of the possession, use, knowledge,
disclosure or reproduction of any electronic media or Software made available to
Named User under this Agreement by any person, firm or organization not
authorized by this Agreement to have the benefit of such possession, use,
knowledge, disclosure or reproduction, and to cooperate with Licensee and its
representatives in any investigation of and litigation against such person, firm
or organization.
7. TERMINATION
Named User may terminate this Agreement without cause by giving Licensee thirty
(30) days written notice of termination. In the event of a material breach of
this Agreement which is not corrected, this Agreement may be terminated in the
following manner. The party complaining of the breach may terminate this
Agreement by serving written notice on the other party of its intention to
terminate the Agreement and stating the breach of the Agreement complained of,
whereupon the other party shall have a period of thirty (30) days to correct the
material breach; and in the event the breach is not corrected, the Agreement
shall stand terminated at the end of said thirty (30) days from service of the
notice. In the event the breach is corrected, the Agreement shall continue as if
no breach had occurred. If this Agreement is terminated at any time, Named User
shall cease use immediately of Software and shall promptly return or destroy all
Licensee originals and all materials related to Software and electronic media
received from Licensee and/or any other material furnished by Licensee to Named
User for use by Named User in connection with this Agreement, including any
modifications, and all supplementary or related program materials and
information, excluding normal printouts or handouts which have been distributed
to customers of Named User.
If for any reason the relationship between Licensee and its supplier of Software
or between Licensee and Named User is terminated, this Agreement will be
concurrently terminated, effective as of the relationship termination date.
8. GENERAL
This Agreement is entered into and shall be construed in accordance with the
laws of the State of Minnesota. This Agreement constitutes the entire agreement
between the parties and supersedes all other communications whether written or
oral. Neither the rights granted herein nor Software or copies thereof may be
licensed, assigned, or transferred by Named User. Any failure by Licensee to
terminate this Agreement for any particular cause shall not be interpreted as a
waiver of Licensee's right to subsequently cancel or terminate the Agreement for
a later similar reason. FirePond and other third-party suppliers of Licensee are
direct and intended third-party beneficiaries of this Agreement and may enforce
this Agreement directly against Named User.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly
executed this Agreement.
Approved as to form:
BCBSM, INC., DBA BLUE CROSS AND BLUE SHIELD OF MINNESOTA
By: /s/ John N. Ounjian /s/ Timothy M. Peterson
------------------------------------------------------------
Name: John N. Ounjian Timothy M. Peterson
----------------------------------------------------------
Title: CIO CFO
---------------------------------------------------------
Date: 12/18/98
----------------------------------------------------------
FIREPOND, INC.
By: /s/ Klaus P. Besier
------------------------------------------------------------
Name: Klaus P. Besier
----------------------------------------------------------
Title: CEO
---------------------------------------------------------
Date: 12/18/98
----------------------------------------------------------
<PAGE> 6
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SIGNATURE PLUS LICENSE FEE ATTACHMENT
This License Fee Attachment is considered an Attachment and is governed by the
provisions of the Signature Plus Software License Agreement dated 12/8/98
(hereinafter Agreement) executed by FirePond, Inc. and BCBSM, Inc. dba Blue
Cross and Blue Shield of Minnesota (for the purpose of this Attachment -
Client).
All amounts in U.S. ($)
================================================================================
================================================================================
LICENSE FEES (SIGNATURE PLUS - ENTERPRISE)
================================================================================
For a fee of $[ * * * ], Client shall receive an Enterprise License, payable
as follows:
$[ * * * ] payable upon execution of this Attachment.
$[ * * * ] payable March 15, 1999.
$[ * * * ] payable June 1, 1999.
- ----------
$[ * * * ] total
Client will be invoiced for the above stated license fee upon execution of this
Attachment with the payment schedule above. The above fees are not subject to
offset for any reason, including any Finder's Fee Client may earn.
================================================================================
================================================================================
LICENSE FEES (SIGNATURE PLUS - TOOLKIT) - DESIGNATED SITE
- --------------------------------------------------------------------------------
Signature Plus Toolkit - Eagan Campuses of BCBSM, Inc. (Included in
above license fees) ........................................................ NA
================================================================================
================================================================================
FINDER'S FEE
- --------------------------------------------------------------------------------
If Client purchases, and FirePond receives payments as described above for an
Enterprise License, and if Client provides substantive Assistance in procuring
binding Signature Plus License Agreements with other Blue Cross Blue Shield
entities (other than those entities listed in Attachment Licensee), Client may
earn a finder's fee (as provided below). For purposes of this Agreement,
"Assistance" shall mean the substantive and documented introduction and
recommendation of FirePond and FirePond products by Client to other Blue Cross
Blue Shield entities, including serving as a reference account and providing
mutually agreed access to Client's installation for purposes of demonstrations
of FirePond's products. In the event Client provides such Assistance and
FirePond executes such agreements, FirePond shall pay Client a finder's fee as
follows:
o For each Blue Cross Blue Shield entity entering binding qualifying license
agreements within two (2) years after execution of this Agreement,
FirePond shall pay Client a finder's fee equal to 15% of such Blue Cross
Blue Shield entities' license fees during that period (excluding any
implementation, maintenance or Service Fees).
o For each Blue Cross Blue Shield entity entering binding qualifying license
agreements after the first two (2) years following execution of this
Agreement but before the beginning of the fourth year after execution of
this Agreement, FirePond shall pay Client a finder's fee equal to 10% of
such Blue Cross Blue Shield entities license fee during that period
(excluding any implementation, maintenance or Service Fees).
o For each Blue Cross Blue Shield entity entering binding qualifying license
agreements after the first four (4) years after execution of this
Agreement but before the beginning of the sixth year after execution of
this Agreement, FirePond shall pay Client a finder's fee equal to 5% of
such Blue Cross Blue Shield entities license fee during that period.
(excluding any implementation, maintenance or Service Fees).
o The finder's fee shall expire five (5) years from the date of Execution of
this Agreement.
================================================================================
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
<PAGE> 7
[FIREPOND LOGO]
================================================================================
LIMITED SEMI EXCLUSIVE USE
- --------------------------------------------------------------------------------
If Client purchases, and FirePond receives payments as described above for an
Enterprise License, and if Client provides substantive Assistance in procuring
binding Signature Plus License Agreements with other Blue Cross Blue Shield
entities (other than those entities listed in Attachment Licensee), FirePond
agrees that it shall not license, for use in Minnesota, to Health Partners,
Alliana, Health Systems of Minnesota, Preferred One or Medica doing business in
Minnesota for the period of December 18, 1998, to December 31, 2000. This
Limited Semi Exclusive Use License does not prohibit FirePond from using the
Software internally during such period, or from licensing the Software to third
parties other than Health Partners, Alliana, Health Systems of Minnesota,
Preferred One or Medica doing business inside and/or outside of Minnesota.
================================================================================
================================================================================
TAXES AND DUTIES
- --------------------------------------------------------------------------------
All duties, taxes and levies (excluding taxes based on FirePond's net income),
if any, shall be borne by Client.
================================================================================
The fees and terms in this Attachment are valid until December 18, 1998. If
Client does not sign this Attachment prior to that date, FirePond may revise
such fees and terms.
================================================================================
SIGNATURES
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties have signed this Attachment by their duly
authorized representatives.
BCBSM, INC. DBA BLUE CROSS AND BLUE FIREPOND, INC.
SHIELD OF MINNESOTA
By: /s/ John N. Ounjian /s/ Timothy M. Peterson By: /s/ Klaus P. Besier
---------------------------------------------- ------------------------
Name: John N. Ounjian Timothy M. Peterson Name: Klaus P. Besier
- ------------------------------------------------- ----------------------
Title: CIO CFO Title: CEO
- ------------------------------------------------- ---------------------
Date: 12/18/98 Date: 12/18/98
-------------------------------------------- ----------------------
<PAGE> 8
[FIREPOND LOGO]
SIGNATURE PLUS MAINTENANCE ATTACHMENT
This maintenance attachment is considered an Attachment and is governed by the
provisions of the Software License Agreement (hereinafter Agreement) executed by
FirePond, Inc. and Licensee ("Licensee").
================================================================================
MAINTENANCE FEE All amounts in U.S.($)
- --------------------------------------------------------------------------------
PLATINUM MAINTENANCE (REQUIRED, 15% OF THE TOTAL LICENSE FEE FOR THE
SOFTWARE AND TOOLS) ................................................$[ * * * ]
Client may purchase maintenance in a prepaid one-year block at a rate of 15% of
the license fee. Client shall elect this option at the time of execution of the
applicable License option.
See chart below for definition of Silver, Gold and Platinum maintenance.
If Licensee decides to buy additional seats, FirePond will calculate the license
fee based on the percentages above and pro-rate to the end of the then-current
Licensee maintenance year.
Maintenance shall start at the end of the warranty period as identified in the
Signature Plus Software License Agreement.
================================================================================
================================================================================
RESPONSE LEVELS
- --------------------------------------------------------------------------------
FirePond shall provide support via a FirePond technical support representative
to research questions and resolve issues for the four Licensee designated
contacts identified in the attached schedule from 8:00 a.m. to 5:00 p.m. Central
Time Monday through Friday (excluding FirePond holidays). This service will also
provide a means for the Licensee designated contacts to provide feedback to
FirePond on the Software and Tools.
Following is a definition of severity levels:
o Critical: Software or Tools are non-operational.
o High: A major function of the Software or Tools is unavailable.
o Medium: The Software or Tools are in substantial non-conformance to the
functional specifications in the Documentation.
o Low: The Software or Tools substantially conform to the functional
specifications in the Documentation but contain minor discrepancies.
Licensee identified problems shall be handled according to the following table.
================================================================================
- -------------------------------------------------------------------------------
Severity Silver Gold Platinum
- -------- ---------------------- ---------------------- ----------------------
Critical FirePond will use best FirePond will use best FirePond will use best
efforts to respond to efforts to respond to efforts to respond to
the Licensee contact the Licensee contact the Licensee contact
within one business within one business within one business
hour of notice and hour of notice and hour of notice and
provide a fix plan provide a fix plan provide a fix plan
within three business within two business within one business
days. days day.
- -------- ---------------------- ---------------------- ----------------------
High FirePond will use best FirePond will use best FirePond will use best
efforts to respond to efforts to respond to efforts to respond to
the Licensee contact the Licensee contact the Licensee contact
within four business within four business within four business
hours of notice and hours of notice and hours of notice and
provide a fix plan provide a fix plan provide a fix plan
within four business within three business within two business
days. days. days.
- -------- ---------------------- ---------------------- ----------------------
Medium FirePond will use best FirePond will use best FirePond will use best
efforts to respond to efforts to respond to efforts to respond to
the Licensee contact the Licensee contact the Licensee contact
within one business within one business within one business
day of notice and day of notice and day of notice and
provide a fix plan provide a fix plan provide a fix plan
within five business within four business within three business
days. days. days.
- -------- ---------------------- ---------------------- ----------------------
Low FirePond will use best FirePond will use best FirePond will use best
efforts to respond to efforts to respond to efforts to respond to
the Licensee contact the Licensee contact the Licensee contact
within two to five within two to five within two to five
business days of business days of business days of
notice and consider notice and consider notice and give
for inclusion in the for inclusion in the priority consideration
maintenance release. maintenance release. for inclusion in the
maintenance release.
- -------------------------------------------------------------------------------
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
<PAGE> 9
[FIREPOND LOGO]
Maintenance includes issuance of upgrades as they become available from
FirePond. Upon issuance of an upgrade, FirePond shall provide the support
identified in this Attachment for the previous upgrade for a period of 12
months.
Maintenance service does not include the delivery of any software and associated
documentation which FirePond offers as separate products which have not been
licensed by Licensee.
Errors attributed to FirePond shall be those that are reproducible by FirePond
on unmodified FirePond software. FirePond will use reasonable efforts to work
with client to obtain corrections or workarounds to problems in third party
implementations/software.
FirePond shall use reasonable commercial efforts to correct the defect by
bringing the performance of the Software into material compliance with the
functional specifications or to replace the defective component within thirty
(30) days or such longer period as is reasonable in the circumstances where
FirePond proceeds with all due diligence to cure such defect. In the event
FirePond is unable to correct or replace such defect within the stated time
period, Licensee shall refund the then present value of such Software to
Licensee, as amortized over a five (5) year useful life measured from the date
of delivery.
All fix plan times begin when FirePond duplicates the problem.
FirePond shall have no obligation to support:
a. altered, damaged or modified (except for standard modifications utilizing
the standard software tools) software or any portion of the software
incorporated with or into other software;
b. Software problems caused by Licensee's negligence, abuse or
misapplication, use of software other than as specified in FirePond's
published and current documentation, or other causes beyond the control of
FirePond;
c. Software installed on or with any Computer Hardware, Operating System,
GUI, or Database Management System that is not specified in the
documentation covering the software.
TAXES AND DUTIES
- --------------------------------------------------------------------------------
All duties, taxes and levies (excluding taxes based on FirePond's net income),
if any, shall be borne by Licensee.
================================================================================
================================================================================
MAINENTANCE FEE RENEWAL
- --------------------------------------------------------------------------------
The renewal fee for the maintenance shall be based on the total license fee for
the Software and Tools as identified in the Signature Plus License Fee
Attachment governed by and attached to the Software License Agreement executed
by FirePond and Licensee.
If payment is not made within thirty (30) days of the due date, support services
will be suspended until payment is received. If payment is not received by
FirePond, within 180 days of the due date, the support services will be
terminated. Licensee will be required to pay a reinstatement fee to reactivate
support. The cost to reactivate will be all maintenance fees in arrears.
- --------------------------------------------------------------------------------
<PAGE> 10
[FIREPOND LOGO]
================================================================================
FEES AND PAYMENT TERMS
- --------------------------------------------------------------------------------
The maintenance identified above is payable as follows:
$[ * * * ] payable upon expiration of the warranty period for the Software.
$[ * * * ] payable March 15, 1999.
$[ * * * ] payable June 1, 1999.
- ------------
$[ * * * ] total
For the initial first year, Licensee will be invoiced for the above stated
maintenance fee upon execution of this Attachment with the payment schedule
above, and annually in advance thereafter. Maintenance fees are subject to
change once during a calendar year upon sixty (60) days notice. This Attachment
shall automatically renew for subsequent one-year terms unless the Agreement is
terminated by sixty (60) days advance written notice prior to the end of the
current maintenance year. If after any period of non-maintenance under a
Signature Plus Maintenance Attachment, Licensee desires to re-establish
maintenance of the Software by FirePond, Licensee shall pay all maintenance at
current list prices calculated from the day maintenance was discontinued. To
stay in compliance with the Agreement, all past due amounts must be paid timely
in accordance with the terms of the Agreement.
Notwithstanding the foregoing, increases in annual maintenance over the initial
base year maintenance shall be limited to ten (10) percentage.
================================================================================
The fees and terms in this Attachment are valid until December 18, 1998. If this
Attachment is not signed by Licensee prior to that date, FirePond may revise
such fees and terms.
================================================================================
SIGNATURES
- --------------------------------------------------------------------------------
BCBSM, INC. DBA BLUE CROSS AND BLUE FIREPOND, INC.
SHIELD OF MINNESOTA
By: /s/ John N. Ounjian /s/ Timothy M. Peterson By: /s/ Klaus P. Besier
---------------------------------------------- ------------------------
Name: John N. Ounjian Timothy M. Peterson Name: Klaus P. Besier
- ------------------------------------------------- ----------------------
Title: CIO CFO Title: CEO
- ------------------------------------------------- ---------------------
Date: 12/18/98 Date: 12/18/98
-------------------------------------------- ----------------------
[ * * * ] Confidential treatment has been requested for the bracketed
portions. The confidential redacted portion has been filed
separately with the Securities and Exchange Commission.
<PAGE> 11
[FIREPOND LOGO]
LICENSEE DESIGNATED CONTACTS
================================================================================
CONTACT #1
- --------------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Business Address:
---------------------------------------------------------------
Business Phone:
-----------------------------------------------------------------
Business Fax:
-------------------------------------------------------------------
E-mail:
-------------------------------------------------------------------------
================================================================================
CONTACT #2
- --------------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Business Address:
---------------------------------------------------------------
Business Phone:
-----------------------------------------------------------------
Business Fax:
-------------------------------------------------------------------
E-mail:
-------------------------------------------------------------------------
================================================================================
CONTACT #3
- --------------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Business Address:
---------------------------------------------------------------
Business Phone:
-----------------------------------------------------------------
Business Fax:
-------------------------------------------------------------------
E-mail:
-------------------------------------------------------------------------
================================================================================
CONTACT #4
- --------------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Business Address:
---------------------------------------------------------------
Business Phone:
-----------------------------------------------------------------
Business Fax:
-------------------------------------------------------------------
E-mail:
-------------------------------------------------------------------------
================================================================================
<PAGE> 1
EXHIBIT 10.17
SUBLEASE
[CB RICHARD ELLIS LOGO]
CB RICHARD ELLIS, INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKERS
1. PARTIES.
This Sublease dated November 2, 1998 is made between DATAWORKS
CORPORATION ("Subleasor"), and FIREPOND, INC. a Minnesota Corporation
("Subleassee").
2. MASTER LEASE.
Subleassor is the leasee under a written lease dated September 6, 1996,
wherein INTERACTIVE GROUP, INC. ("Lessor") leased to Subleesor the real
property located in the City of Bloomington, County of Henneyln, State
of Minnesota described as Riverview Office Tower 8009 34th Avenue South
("Master Premises"). Said lease has been amended by the following
amendments: None. Said lease and amendments are herein collectively
referred to as the "Master Lease" and are attached hereto Exhibit "A".
3. PREMISES.
Subleasee hereby subleeses to Subleasor on the terms and conditions set
forth in this Sublease the following portion of the Master Premises
("Premises"): Suite 1000, an approximate 12,113 square foot office
suite on the 10th floor of Riverview Office Tower.
4. WARRANTY BY SUBLEASOR.
Sublessor warrants and represents to Sublessee that the Master Lease
has not been amended or modified except as expressly set forth herein,
that Sublessor is not now, and as of the commencement of the Term
hereof will not be, in default or breach of any of the provisions of
the Master Lease, and that Sublessor has no knowledge of any claim by
Lessor that Sublessor be in default or breach of any of the provisions
of the Master Lease.
5. TERM.
The term of this Sublease shall commence on December 1, 1998
("Commencement Date"), or when Lessor consents to this Sublease (if
such consent is required under the Master Lease), whichever shall last
occur, and end on January 31, 2002 ("Termination Date"), unless
otherwise sooner terminated in accordance with the provisions of this
Sublease. In the event the Term commences on a date other than the
Commencement Date, Sublessor and Sublessee shall execute a memorandum
setting forth the actual date of commencement of the term. Possession
of the Premises ("Possession") shall be delivered to Sublessee on the
commencement of the Term. If for any reason Subleasor does not deliver
Possession to Sublessee on the actual commencement of the Term,
Subleesor shall not be subject to any liability for such failure, the
Termination Date shall not be extended by the delay, and the validity
of this Sublease shall not be impaired, but rent shall abate until
delivery of Possession. Notwithstanding the foregoing, if Sublessor has
not delivered Possession to Sublessee within thirty (30) days after the
Commencement Date, then at any time thereafter and before delivery of
Possession, Sublessee may give written notice to Sublessor of
Sublessee's intention to cancel this Sublease. Said notice shall set
forth an effective date for such cancellation which shall be at least
ten (10) days after delivery of said notice to Subleasor. If Sublessor
delivers Possession to Sublessee on or before such effective date, this
Sublease shall remain in full force and effect. If Subleasor fails to
deliver Possession to Sublessee on or before such effective date, this
Sublease shall be canceled, in which case all consideration previously
paid by Sublessee to Subleasor on account of this Sublease shall be
returned to Sublessee, this Sublease shall thereafter be of no further
force or effect, and Sublessor shall have no further liability in
Sublessee on account of such delay or cancellation. If Sublessor
permits Sublessee to take Possession prior to the commencement of the
Term, such early Possession shall not advance the Termination Date and
shall be subject to the provisions of this Sublease, including without
hesitation the payment of rent.
6. RENT.
6.1 Minimum First. Sublessee shall pay to Sublessor as minimum
rent, without deduction, setoff, notice, or demand, at
Dataworks Corporation, 5910 Pacific Center Boulevard, San
Diego, CA 92121 or at such other place as Subleasor shall
designate from time to time by notice to Sublessee, the sum of
Eight Thousand Seven Hundred Seventy-One and 83/100 Dollars
($8,771.83) per month, in advance on the first day of each
month of the Term. Sublessee shall pay to Sublessor upon
execution of this Sublease the sum of Eight Thousand Seven
Hundred Seventy-One and 83/100 Dollars ($8,771.83) as rent for
December 1998. If the Term begins or ends on a day other than
the first or last day of a month, the rent for the partial
month shall be prorated on a par diem basis. Additional
provisions:
6.2 Operating Costs. If the Master Lease required Sublessor to pay
to Lessor all or a portion of the expenses of operating the
building and/or project of which the Premises are a part
("Operating Cost"), including but
1
<PAGE> 2
not limited to taxes, utilities, or insurance, then Sublessee
shall pay to Sublessor as additional rent one hundred percent
(100%) of the amounts payable by Sublessor for Operating Costs
incurred during the Term. Such additional rent shall be
payable as and when Operating Costs are payable to Sublessor
to Lessor. If the Master Lease provides for the payment of
Sublessor of Operating Costs on the basis of an estimate
thereof, then as and when adjustments between estimated and
actual Operating Costs are made under the Master Lease, the
obligations of Sublessor and Sublessee hereunder shall be
adjusted in a like manner, and if any such adjustment shall
occur after the expiration or earlier termination of the term,
then the obligations of Sublessor and Sublessee under this
Subsection 6.2 shall survive such expiration or termination.
Sublessor shall, upon request by Sublessee, furnish Sublessee
with copies of all statements submitted by Lessor of actual or
estimated Operating Costs during the Term. The 1998 estimated
Tax and Operating Expenses total $10.31 per rentable square
foot which equates to $10,407.08 per month.
7. SECURITY DEPOSIT.
Sublessee shall deposit with Sublessor upon execution of this Sublease
the sum of Eight Thousand Seven Hundred Seventy-One and 83/100 Dollars
($8,771.83) as security for Sublessee's faithful performance of
Sublessee's obligation hereunder ("Security Deposit"). If Sublessee
fails to pay rent or other charges when due under this Sublease, or
fails to perform any of its other obligations hereunder, Sublessor may
use or apply all or any portion of the Security Deposit for the payment
of any rent or other amount then due hereunder and unpaid, for the
payment of any other sum for which Sublessor may become obligated by
reason of Sublessor's default or breach, or for any loss or damage
sustained by Sublessor as a result of Sublessee's default or breach. If
Subleasor so uses any portion of the Security Deposit, Sublessee shall
within ten (10) days after written demand by Sublessor, restore the
Security deposit to the full amount originally deposited, and
Sublessee's failure to do so shall constitute a default under this
Sublease. Sublessor shall not be required to keep the Security Deposit
deposited from its general accounts, and shall have no obligation or
liability for payment of interest on the Security Deposit. In the event
Sublessor assigns its interest in the Sublease, Sublessor shall deliver
to its assignee so much of the Security Deposit as is then held by
Sublessor. Within ten (10) days after the Term has expired, or
Sublessee has vacated the Premises, or any final adjustment pursuant to
Subsection 6.2 hereof has been made, whichever shall last occur, and
provided Sublessee is not then in default of any of its obligation
hereunder, the Security Deposit or so much hereof as had not therefore
been applied by Sublesssor, shall be returned to Sublessee or to the
last assignee, if any, of Sublessee's interest hereunder.
8. USE OF PREMISES.
The Premises shall be used and occupied only for general office use to
include the development, sales and support of enterprise
sales/marketing software, and for no other use or purpose.
9. ASSIGNMENT AND SUBLETTING.
Sublessee shall not assign this Sublease or further sublet all or any
part of the Premises without the prior written consent of Sublessor
(and the consent of Lessor, if such is required under the terms of the
Master Lease).
10. OTHER PROVISIONS OF SUBLEASE.
All applicable terms and conditions of this Master Lease are
incorporated into and made a part of this Sublease as if Sublessor were
the leasor thereunder, Sublessee the leasee thereunder, and the
Premises the Master Premises, except for the following: (See attached
Addendum). Sublessee assumes and agrees to perform the lessee's
obligations under the Master Lease during the Term of the extent that
such obligations are applicable to the Premises, except that the
obligation to pay rent to Lessor under the Master Lease shall be
considered performed by Sublessee in the extent and in the amount rent
is paid to Sublessor in accordance with Section 6 of this Sublease.
Sublessee shall not commit or suffer any act or omission that will
violate any of the provisions of the Master Lease. Sublessor shall
exercise due diligence in attempting to cause Lessor to perform its
obligations under the Master Lease for the benefit of Sublessee. If the
Master Lease terminates, this Sublease shall terminate and the parties
shall be relieved of any further liability or obligation under this
Sublease, provided however, that if the Master Lease terminates as a
result of a default or breach by Sublessor or Sublessee under this
Sublease and/or the Master Lease, then the defaulting party shall be
liable to the nondefaulting party for the damages suffered as a result
of such termination. Notwithstanding the foregoing, if the Master Lease
gives Sublessor any right to terminate the Master Lease in the event of
the partial or total damage, destruction, or condemnation of the Master
Premises or the building or project of which the Master Premises are a
part, the exercise of such right by Subleasor shall not constitute a
default or breach hereunder.
11. ATTORNEY'S FEES.
If Sublessor, Sublessee, or Broker shall commence an action against the
other arising out of or in connection with this Sublease, the
prevailing party shall be entitled to recover its costs of suit and
reasonable attorney's fees.
12. AGENCY DISCLOSURE.
Subleassor and Sublessee each warrant that they have dealt with no
other real estate broker in connection with this transaction except:
David J. Marsohinke of CB Richard Ellis, Inc. who represents DATAWORKS
CORPORATION and Mark McCarv of CB RICHARD ELLIS, INC., who represents
FIREPOND, INC. In the event that CB RICHARD ELLIS, INC., represents
both Sublessor and Sublessee, Sublessor and Sublessee hereby confirm
that they were timely advised of the dual representation and that they
consent to the same, and that they do not expect said broker to
disclose to either of them the confidential information of the other
party.
2
<PAGE> 3
13. COMMISSION.
Upon execution of this Sublease, and consent thereto by Lessor (if such
consent is required under the terms of the Master Lease), Sublessor
shall pay Broker a real estate brokerage commission in accordance with
Sublessor's contract with Broker for the subleasing of the Premises, if
any, and otherwise in the amount of Fifty-Four Thousand Five Hundred
Eight and 50/100 Dollars ($54,508.50) for services rendered in
effecting this Sublease. Broker is hereby made a third party
beneficiary of the Sublease for the purpose of enforcing its right to
said commission.
14. NOTICES.
All notices and demands which may or are to be required or permitted to
be given by either party on the hereunder shall be in writing. All
notices and demands by the Sublessor to Sublessee shall be sent by
United States Mail, postage prepaid, addressed to the Sublessee at the
Premises, and to the address hereinbelow, or to such other place as
Sublessee may from time to time designate in a notice to the Sublessor.
All notices and demands by the Sublessee to Subleasor shall be sent by
United States Mail, postage prepaid, addressed to the Sublessor at the
address set forth herein, and to such other person or place as the
Sublessor may from time to time designate in a notice to the Sublessee.
To Subleassor: Mr. Jon R. Johnson
Director of Corp. Facilities
Dataworks Corp.
6910 Pacific Center Blvd.
San Diego, CA 92121
To Sublessee: Mr. Tom Carretta
General Counsel
Firepond, Inc.
Riverview Office Tower #1000
8009 34th Avenue South
Bloomington, MN 55425
15. CONSENT BY LESSOR.
THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED TO BY
LESSOR IN ACCORDANCE WITH SECTION 14C OF THE MASTER LEASE.
16. COMPLIANCE.
The parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative
orders having jurisdiction over the parties, property or the subject
matter of this Agreement including, but not limited to, the 198a Civil
Rights Act and all amendments thereof, the Foreign Investment in the
Property Tax Act, the Comprehensive Environmental Response Compensation
and Liability Act, and Americans With Disabilities Act.
SUBLESSOR: DATAWORKS CORPORATION SUBLESSEE: FIREPOND, INC.
By: /s/ [Signature Illegible] By: /s/ Klaus P. Besier
------------------------------ ------------------------------
Title: EVP and CFO Title: President and CEO
--------------------------- ---------------------------
By: By:
------------------------------ ------------------------------
Title: Title:
--------------------------- ---------------------------
Date: 11-9-98 Date: 11-4-98
---------------------------- ----------------------------
LESSOR'S CONSENT TO SUBLEASE (See separate document)
- --------------------------------------------------------------------------------
CONSULT YOUR ADVISORS - This document has been prepared for approval by your
attorney. No representation or recommendation is made by CB Richard Ellis, Inc.
as to the legal sufficiency or tax consequences of this document or the
transaction for which it relates. These are questions for your attorney or
account.
In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
- --------------------------------------------------------------------------------
3
<PAGE> 1
EXHIBIT 10.17.1
ADDENDUM TO SUBLEASE
This Addendum is part of the Sublease Agreement dated November 2, 1998 (the
"Sublease") between Dataworks, Inc. ("Sublessor") and FirePond, Inc.
("Sublessee").
Dataworks, Inc. is the successor in interest to the Tenant in the Lease dated
September 6, 1996 between Appletree Ltd. ("Landlord") and Interactive Group,
Incorporated ("Tenant") (the "Master Lease"). This Addendum is incorporated into
and is a part of the Sublease pursuant to the provisions of Section 10 of the
Sublease.
The parties agree that the following terms and conditions are part of and
incorporated into the sublease:
o Notwithstanding the provisions of Section 10 of the Sublease and Section
14E of the Master Lease, the following provisions of the Master Lease shall
be of no force and effect as between Sublessor and Sublessee and the
parties waive the following:
o Section 3 E;
o Section 19 Personal Property and Tenant Fixtures;
o Section 28 Miscellaneous U Financial Statements;
o Exhibit C.
o Dataworks represents that it has the authority to enter into this Sublease
Agreement and has obtained all necessary consents, if any, required from
the Landlord.
o Sublessor shall deliver the Premises in its current AS IS condition to
Sublessee upon full execution of this Sublease.
o Notwithstanding anything to the contrary herein, Sublessor shall leave all
existing personal property, including cabling and partitions, computer and
phone equipment and related items presently located in the Premises (the
"Personal Property") for the exclusive use of the Sublessee. Provided
Sublessee is not in default of the Sublease, upon expiration of the
Sublease term, Sublessor shall deliver a Bill of Sale for all Personal
Property to Sublessee for the agreed upon residual value of $10.00.
o Sublessor shall immediately provide copies of all notices received by
Sublessor from the Landlord which affect the Sublease in any manner,
including without limitation, updates of operating expenses and notices of
default. Sublessor shall indemnify, defend and hold Sublessee harmless from
all costs and expenses, including reasonable attorney's fees associated
with Sublessor's default of the Master Lease, except such default that is
at the fault of Sublessee. To the extent reasonably possible, Sublessor
agrees to cooperate and not impair Sublessee's right to cure any such
default.
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EXHIBIT 10.18
SUBLEASE AGREEMENT
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THIS SUBLEASE AGREEMENT is made and entered into on the 8th day of
December, 1998, by and between International Poison Center Consortium, Inc. (a
wholly owned subsidiary of Product Safety, Resources, Inc.), a Minnesota
corporation ("Sublessor") and FirePond. Inc., a Minnesota corporation
("Sublessee").
RECITALS
A. By Standard Office Lease dated February 13, 1997 (attached as
Exhibit A and referred to herein as the "Office Lease"), Appletree Ltd. leased
to Institutional Pharmacy Support Services, Inc. ("IPSS"), certain premises
consisting of approximately 2,467 square feet of office space comprising Suite
1050 of the building commonly known as Riverview Office Tower, 8009 34th Avenue
South, Bloomington, Minnesota as more further described in the Office Lease (the
"Premises").
B. The Landlord's interest in the Office Lease was subsequently
assigned to Glenborough Properties, L.P., then to Glenborough Fund V, L.P.
("Owner").
C. By Assignment and Assumption Agreement dated July 16, 1998, IPSS
assigned the Tenant's interest in the Office Lease to International Poison
Center Consortium, Inc. (a wholly owned subsidiary of Product Safety Resources,
Inc.).
D. Sublessee desires to sublease the Premises from Sublessor and
Sublessor desires to sublease the Premises to Sublessee.
THEREFORE, in consideration of the mutual promises of the parties set
forth in this Sublease Agreement and other valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Sublessor and Sublessee
agree as follows:
ARTICLE 1. PREMISES
Sublessor hereby leases to Sublessee and Sublessee hereby takes from
Sublessor the Premises, subject to and together with the benefit of the terms,
covenants, conditions and provisions of this Sublease Agreement.
ARTICLE 2. TERM
The term of this Sublease Agreement (the "Term") shall commence on
December 1, 1998 (the "Commencement Date") and shall terminate on March 31, 2002
unless sooner terminated as
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provided herein. Sublessor shall deliver possession of the Premises to Sublessee
on the date of full execution of this Sublease Agreement. During such time, all
terms and provisions of this Sublease Agreement shall be applicable, except that
Base Rent and Additional Rent shall commence as of the Commencement Date.
ARTICLE 3. USE
The Premises shall be used and occupied only for general office use, to
include the development, sales and support of enterprise sales / marketing
software. Sublessee shall use the Premises only for those purposes permitted in
the Office Lease.
ARTICLE 4. RENT
A. Sublessee agrees to pay Sublessor during the Term the Base Rent as
follows:
PERIOD RENTAL PER SQUARE FOOT MONTHLY BASE RENT
12/1/98 to 3/31/99 $10.50 $2,158.63
4/1/99 to 3/31/00 $11.00 $2,261.42
4/1/00 to 3/31/01 $11.50 $2,364.21
4/1/01 to 3/31/02 $12.00 $2,467.00
B. In addition to the Rent payable pursuant to the Rent Schedule,
Sublessee shall pay to Sublessor together with the monthly installments of Rent
payable by Sublessee hereunder, such additional amounts as Sublessor, in its
capacity as tenant, is obligated to pay under the Office Lease, including, but
not limited to, Sublessor's proportionate share of taxes, insurance, maintenance
charges and other operating expenses ("Additional Rent").
C. All Rent and Additional Rent payable under this Sublease by
Sublessee shall be paid, without notice or prior demand therefor and without any
deduction or set-off whatsoever, to Sublessor at the address set out in Article
15 hereof or at such place as Sublessor may designate from time to time by
written notice to Sublessee given in the manner set out in Article 15 hereof.
All Rent and Additional Rent shall be payable on the first day of each month
during the Term.
ARTICLE 5. OFFICE LEASE
A. Except as inconsistent with the provisions of this Sublease
Agreement, the terms, provisions, covenants and conditions of the Office Lease
are incorporated herein by reference in like manner as though the same were
specifically set forth herein. Except as may be otherwise specifically provided
herein, the Sublessee shall have all rights and privileges and assumes and
agrees to keep and perform all of the obligations, conditions and covenants of
the tenant set forth under the Office Lease as though Sublessee were substituted
as tenant thereunder. It is agreed
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and understood between the parties hereto that the Sublessee obtains and is
granted no more rights and privileges under this Sublease Agreement than
Sublessor as tenant under the Office Lease.
B. The obligations, conditions and covenants of the Owner as the
Landlord under the Office Lease shall remain the Owner's, and Sublessor shall
not be required to perform the same in the event of a default by the Owner.
Notwithstanding the foregoing, the Sublessor shall have all the rights and
privileges of the Owner as Landlord under the Office Lease, except as herein
otherwise specifically provided.
C. Sublessor and Sublessee each agree not to do or suffer or permit
anything to be done which would result in default under the Office Lease or
cause the Office Lease to be terminated or forfeited.
ARTICLE 6. CONDITION OF THE DEMISED PREMISES
Sublessee shall take possession of the Premises in "as-is" condition.
Sublessor represents that to Sublessor's knowledge, the Premises do not contain
asbestos or other hazardous substances, as defined under applicable federal,
state and local statutes, and that the Premises conform to the requirements of
the Americans with Disabilities Act. Sublessor's knowledge is hereby defined as
the actual knowledge of Stephen Swantek as of the date hereof.
ARTICLE 7. PAYMENT OF FEES
Sublessee will pay and discharge all costs, attorneys' fees and
expenses that may be incurred by Sublessor in enforcing the covenants and
agreements of this Sublease Agreement or as may otherwise be required in the
Office Lease.
ARTICLE 8. INSURANCE
Sublessee shall maintain and have Sublessor named as an additional
insured on all insurance required to be maintained by Sublessor, as Tenant under
the Office Lease. The insurance policies maintained by Sublessee shall provide
that the same may not be cancelled, terminated or altered without thirty (30)
days prior written notice sent by registered mail to the Sublessor and Owner.
The insurance maintained by the Sublessee shall contain an endorsement
containing an express waiver of subrogation in favor of Sublessor and Owner and
any additional premium or cost to provide such endorsement shall be paid by
Sublessee.
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<PAGE> 4
ARTICLE 9. INDEMNIFICATION
Sublessee agrees that it will indemnify and hold Sublessor and Owner
forever harmless as provided in paragraph 8.E. of the Office Lease, which
indemnification and agreement to hold harmless shall also include any and all
responsibility or liability which Sublessor may incur by virtue of this Sublease
Agreement arising out of any failure of Sublessee in any respect to comply with
and perform the requirements and provisions of the Office Lease or this Sublease
Agreement.
ARTICLE 10. ASSIGNMENT
Sublessee shall not transfer, sell, assign or pledge this Sublease or
further sublease the Premises, or any part thereof without compliance with the
requirements of the Office Lease relating thereto and obtaining the prior
written consent of the Sublessor and Owner, which approval shall not be
unreasonably withheld or delayed.
ARTICLE 11. ALTERATIONS AND IMPROVEMENTS
Sublessee shall not make any alterations and improvements to the
Premises without complying with the terms of the Office Lease relating thereto
and obtaining the prior written consent of Sublessor and Owner.
ARTICLE 12. SURRENDER OF THE PREMISES
Upon the expiration of the Term of this Sublease Agreement, or any
sooner termination hereof, Sublessee shall remove its equipment and trade
fixtures promptly (repairing any damage caused thereby) and quit and surrender
the Premises.
ARTICLE 13. DEFAULT/REMEDIES
A. If any one or more of the following events occurs, then Sublessee
shall be deemed to be in default under this Sublease Agreement:
1. Sublessee fails to pay, when due, the Base Rent, or
Additional Rent as provided under this Sublease Agreement;
2. Sublessee fails to keep, observe or perform any of the
other terms, covenants and conditions herein to be kept,
observed and performed by Sublessee under this Sublease
Agreement for more than twenty (20) days after written notice
is given to Sublessee specifying the nature of such default.
Notwithstanding the foregoing, if the applicable grace period
set forth in the Office Lease shall be
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shorter than that provided herein, the grace period set forth
in the Office Lease shall supersede the grace period set forth
in this subparagraph.
B. If a default occurs, then Sublessor shall be entitled to exercise
any and all of the rights and remedies provided to the Owner as Landlord under
the Office Lease. Any remedies under this Sublease Agreement shall not be deemed
exclusive, but shall be cumulative and shall be in addition to all other
remedies available to Sublessor existing at law or in equity.
ARTICLE 14. CONSENTS
A. Wherever the Owner's consent as Landlord is required by the
provisions of the Office Lease, the Sublessee must, in addition to securing such
consent, also obtain the prior written consent of the Sublessor, which consent
of the Sublessor shall not be unreasonably withheld or delayed.
B. In no event shall Sublessee be entitled to any damages for any
withholding or delay in giving its consent and the Sublessee understands and
agrees that its sole remedies shall be limited to an action for summary
judgment, an injunction or declaratory judgment.
ARTICLE 15. NOTICES
A. Sublessor shall immediately forward to the Sublessee all billings,
reports, written statements or notices received by Sublessor from Owner as
Landlord under the Office Lease. Sublessee shall forward to Sublessor all
reports and written statements required of the Tenant under the Office Lease at
least ten (10) days prior to the date such reports or written statements are due
under the Office Lease.
B. Any notice, demand, request or other communication which may be or
is required to be given by the Sublessee to the Owner as Landlord under the
Office Lease shall be effective only if a copy of the notice to the Landlord is
either delivered personally or sent to the Sublessor as provided under
subparagraph C below.
C. Any notice which one party wishes or is required to give to the
other party will be regarded as effective if in writing and either delivered
personally to such party or an authorized representative of the party or sent
certified or registered mail, return receipt requested postage pre-paid to the
addresses below, or such other addresses as either party may, from time to time,
designate by written notice to the other party:
SUBLESSOR: Product Safety Resources, Inc. Sublessee: FirePond, Inc.
Attn: Steve Swantek Attn: Klaus Besier, President
1295 Bandana Blvd., Suite 335 25 Burlington Mall Rd., Suite 300
St. Paul, MN 55108 Burlington MA, 01803
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ARTICLE 16. RELATIONSHIP OF THE PARTIES
Nothing contained in this Sublease shall be deemed or construed by the
parties hereto or by a third party to create the relationship of principal and
agent or of partnership or joint venture or of any association whatsoever
between Sublessor and Sublessee. It is hereby expressly understood and agreed
that neither the method of computation of rent or any other provisions contained
in this Sublease Agreement, nor any act or acts of the parties hereto shall be
deemed to create any relationship between Sublessor and Sublessee other than the
relationship of Sublessor and Sublessee.
ARTICLE 17. INVALIDITY
If any part of this Sublease Agreement or any part of any provision
hereof shall be adjudicated to be void or invalid, then the remaining provisions
hereof not specifically so adjudicated to be invalid, shall be executed without
reference to the part or portion so adjudicated, insofar as such remaining
provisions are capable of execution.
ARTICLE 18. IMPORTANCE OF EACH COVENANT
Each covenant and agreement on the part of one party is understood and
agreed to constitute an essential part of the consideration for each covenant
and agreement on the part of the other party.
ARTICLE 19. CONDITIONS
This Sublease Agreement is dependent and conditioned upon the Owner
executing its consent to this Sublease Agreement. In the event such condition is
not satisfied or named by December 1, 1998, then this Sublease Agreement shall
be null and void and neither party hereto shall have any liability or
responsibility to the other, except for such liability as shall have accrued
prior to such termination.
ARTICLE 20. SUCCESSORS AND ASSIGNS
This Sublease Agreement and all covenants and agreements contained
herein shall be binding upon, apply and inure to the benefit of the respective
successors and assigns of the
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<PAGE> 7
parties to this Agreement, subject to the restrictions imposed under this
Sublease Agreement and the Office Lease relating to assignment by the Sublessee.
ARTICLE 21. NON-WAIVER
Sublessor's or Sublessee's failure to insist upon strict performance of
any covenant of this Sublease Agreement or to exercise any option or right
herein contained shall not be a waiver or relinquishment for the failure of such
covenant, right or option, but the same shall remain in full force and effect.
Sublessor is specifically authorized to accept a partial payment (no matter how
such payment may be labeled or conditionally delivered) without such acceptance
being deemed a waiver of the balance of the amount owed.
ARTICLE 22. APPLICABLE LAW
This Sublease Agreement shall be construed under the laws of the State
of Minnesota.
ARTICLE 23. ENTIRE AGREEMENT/AMENDMENTS
This Sublease Agreement and the Exhibits attached hereto (including the
Office Lease) set forth all of the covenants, promises, agreements, conditions
and understanding between Sublessor and Sublessee concerning the Premises and
there are no other covenants, promises, agreements, conditions or
understandings, either oral or written, between them other than those which are
set forth in this Sublease Agreement. Except as otherwise provided herein, no
subsequent alteration, amendment, change or addition to this Sublease Agreement
shall be binding upon the Sublessor or the Sublessee unless reduced to writing
and signed by both parties.
ARTICLE 24. COUNTERPARTS
This Sublease Agreement and the Acknowledgment and Consent attached
hereto may be separately executed as counterparts which shall be then read
together and enforced.
ARTICLE 25.
Sublessee covenants and agrees that Sublessor shall have no
responsibility or liability in any way whatsoever to Sublessee for a breach by
the Landlord under the Prime Lease of its obligations as landlord under the
Prime Lease. If the Landlord under the Prime Lease is in default under the Prime
Lease and as a result of such default Sublessor is entitled to a rent abatement
or reduction, then in such event, said rent abatement or reduction shall be
passed through to Sublessee and Sublessee shall be entitled to a similar rent
abatement or reduction under this Sublease.
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<PAGE> 8
ARTICLE 26.
Sublessor represents and warrants that the Prime Lease is in full force
and effect and in good standing. Sublessor covenants to pay all rent and
additional rent when due under the Prime Lease and to keep the Prime Lease in
good standing during the term of this Sublease provided Sublessee is not in
default hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease
Agreement the day and year first above-written.
SUBLESSOR: PRODUCT SAFETY RESOURCES, INC.
By: /s/ Steve Swantek
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Its: President and CEO
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12/8/98
SUBLESSEE: FIREPOND, INC.
By: /s/ Klaus Besier
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Its: President and CEO
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