<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
X Annual Report Pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934 for the fiscal year ended December 31, 1995
- ----- Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-20710
PEOPLESOFT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 68-0137069
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
4440 Rosewood Drive, Pleasanton, CA 94588
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: 510/225-3000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.01 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of Common Stock on March 14, 1996
as reported on the Nasdaq National Market, was approximately $1,000 million.
Shares of Common Stock held by each officer and director and by each person who
owns 5% or more of the outstanding Common Stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.
As of March 14, 1996, Registrant had 49,884,994 outstanding shares of Common
Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for Registrant's 1996 Annual Meeting of
Stockholders to be held May 21, 1996 are incorporated by reference in Part III
of this Form 10-K Report.
<PAGE> 2
PART IV
ITEM 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this Report:
3. Exhibits.
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3.1(1) Restated Certificate of Incorporation of Registrant.
3.2(2) Certificate of Amendment to Certificate of Incorporation of Registrant.
3.3 Bylaws of Registrant, as amended to date.
10.1(3) Amended and Restated 1989 Stock Plan and forms of option agreements
thereunder.
10.2(3) 1992 Employee Stock Purchase Plan as amended to date, and form of subscription
agreement thereunder.
10.3(3) 1992 Directors' Stock Option Plan and forms of option agreements thereunder.
10.4(4,7) Executive Bonus Plan.
10.5* Amendment and Restatement of PeopleSoft, Inc. 401(k) Plan, dated December 13,
1995, Amendment No. 1 dated December 30, 1994, and Amendment No. 2, dated
August 25, 1995.
10.6(3) Form of Indemnification Agreement entered into between the Registrant and each
of its directors and officers.
10.7* Loan Agreement between the Registrant and West America Bank, N.A. dated
October 31, 1995.
10.8(3) Office Lease for 1331 North California Boulevard dated July 23,
1990 between the Registrant and 1333 North California Boulevard, a
California limited partnership, as amended by the First Amendment
to Lease dated April 24, 1991 and the Second Amendment to Lease
dated June 17, 1992 and related Lease Guarantees dated July 26,
1990 and June 14, 1991 between 1333 North California Boulevard and
David A. Duffield.
10.9(3) Lease dated July 24, 1992 between the Registrant and Glen Pointe Associates.
10.10(3,8) Perpetual License Agreement dated July 1, 1991 between the Registrant and
Norwest Corporation.
10.11(3,8) Software License Agreement dated August 26, 1991 between the
Registrant and Goldman, Sachs & Co. and Addendum One thereto dated
March 6, 1992, and related Software Maintenance Agreement dated
August 26, 1991.
10.12(3,8) Software License and Support Agreement dated June 23, 1992 between the
Registrant and ADP, Inc., as amended by Amendment No. 1 dated September 30,
1992.
10.14(3) Rights Agreement dated April 26, 1991 among the Registrant, Norwest Equity
Partners IV, L.P. and certain of the Registrant's officers.
10.15(3,4,8) OEM Software License Agreement between the Registrant and Gupta
Technologies, Inc.
10.17(3,8) Perpetual License Agreement effective March 6, 1992 between the Registrant and
the Equitable Life Assurance Society of the United States and Addendum One
thereto effective March 6, 1992.
10.18(4) Lease dated June 23, 1993 between the Registrant and Westbrook Corporate
Center.
10.19(4) Lease dated January 17, 1994 between the Registrant and R-H Associates Bldg. III
Corp.
10.20(4) Lease dated March 10, 1994 between the Registrant and Rosewood Associates.
10.21(5) Contract of Sale and Escrow Instructions between the Company and Rosewood
Owner of California (B) LLC, a California limited liability
company, dated October 4, 1995.
10.22(6) Warrant Agreement between the Registrant and The First National Bank of Boston,
as Warrant Agent, dated October 30, 1995.
10.23(6) Warrant Purchase Agreement between the Registrant and Goldman, Sachs & Co.
dated October 30, 1995.
</TABLE>
<PAGE> 3
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10.24(6) Registration Rights Agreement between the Registrant and Goldman, Sachs & Co.
dated October 30, 1995.
10.25 Amendment No. 2 dated September 28, 1994, Amendment No. 3 dated
September 21, 1995 and Amendment No. 4 dated December 28, 1995 to the
Software License and Support Agreement dated June 23, 1992 between the
Registrant and ADP, Inc. (only Amendments No. 2 and No. 4 are being refiled
as the request for Confidential treatment has been withdrawn for Amendment
No. 2 and No. 4).
10.26(9) Amended Software Development Agreement dated December 22, 1995 between
the Registrant and Solutions for Education Administrators, Inc.
10.27(9)* Exclusive Marketing and Distribution Agreement dated December 22,
1995 between the Registrant and SIS Development LLC ("SIS").
10.28* Amendment No. 1 dated September 19, 1994, Amendment No. 2 dated May 15,
1995 and Amendment No. 3 dated June 19, 1995 to the Lease dated March 10,
1994 between the Registrant and Rosewood Associates.
10.29(9) Systems Integrator Agreement dated August 25, 1995 between the Registrant and
Shared Medical Systems Corporation.
10.30* Software Development and End User License and Support Services
Agreement dated September 30, 1994 between the Registrant and
PeopleMan, L.P.
10.31* Exclusive Marketing and Distribution Agreement dated September 30, 1994
between the Registrant and PeopleMan, L.P.
11.1* Computation of per share earnings.
21.1* Subsidiaries.
23.1* Consent of Independent Auditors.
24.1* Power of Attorney (see page 32).
</TABLE>
- ---------------------------
1 Incorporated by reference to Exhibit No. 4.1 filed with the Registrant's
Registration Statement on Form S-8 (No. 333-08575 filed on July 22, 1996).
2 Incorporated by reference to Exhibit No. 4.2 filed with the Registrant's
Registration Statement on Form S-8 (No. 333-08575 filed on July 22, 1996).
3 Incorporated by reference to the exhibit having the same number filed with
the Registrant's Registration Statement on Form S-1 (No. 33-53000) filed
October 7, 1992, Amendment No. 1 thereto filed October 26, 1992, Amendment
No. 2 thereto filed November 10, 1992 and Amendment No. 3 thereto filed
November 18, 1992, which Registration Statement became effective November
18, 1992 and the Registrant's Registration Statement on Form S-1 (No.
33-62356) filed on May 7, 1993, which Registration Statement became
effective May 24, 1993.
4 Incorporated by reference to the exhibit having the same filed number with
the Company's Annual Report on Form 10-K for the year ended December 31,
1994.
5 Incorporated by reference to Exhibit 2.1 filed with the Company's Form 8-K
filed with the Securities and Exchange Commission on December 15,1995.
6 Exhibits 10.22, 10.23, and 10.24 are incorporated by reference to Exhibits
10.1, 10.2, and 10.3, respectively, filed with the Company's Registration
Statement on Form S-3 (No. 33-80755) filed with the Securities and Exchange
Commission on December 22, 1995.
7 This agreement is a compensatory plan or arrangement required to be filed as
an exhibit to this Annual Report on Form 10-K pursuant to Item 14(c).
8 Confidential treatment previously granted.
9 Confidential treatment has been requested in connection with the filing of
this Annual Report on Form 10-K.
* Previously filed with the Company's Annual Report on Form 10-K for the year
ended December 31, 1995.
<PAGE> 4
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Pleasanton, California, on October 8, 1996.
PEOPLESOFT, INC.
By: /s/ Ronald E. F. Codd
-------------------------------------------------------
Ronald E. F. Codd, Senior Vice President of Finance and
Administration and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
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<CAPTION>
SIGNATURE TITLE DATE
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* President, Chief Executive Officer and October 8, 1996
__________________________________ Director (Principal Executive Officer)
David A. Duffield
/s/ Ronald E. F. Codd Senior Vice President of Finance and October 8, 1996
___________________________________ Administration and Chief Financial Officer
Ronald E. F. Codd (Principal Financial and
Accounting Officer)
*
___________________________________ Director October 8, 1996
Dr. Edgar F. Codd
*
___________________________________ Director October 8, 1996
Albert W. Duffield
*
___________________________________ Director October 8, 1996
A. George Battle
*
___________________________________ Director October 8, 1996
George J. Still, Jr.
*
___________________________________ Director October 8, 1996
Cyril J. Yansouni
</TABLE>
*BY: /s/ RONALD E.F. CODD
_______________________________
RONALD E.F. CODD
ATTORNEY-IN-FACT
<PAGE> 1
EXHIBIT 3.3
BY-LAWS
OF
PEOPLESOFT, INC.
(As Amended through February 1995)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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PAGE
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ARTICLE I - CORPORATE OFFICES ........................................ 1
1.1 REGISTERED OFFICE ............................................. 1
1.2 OTHER OFFICES ................................................. 1
ARTICLE II - MEETINGS OF STOCKHOLDERS ................................ 1
2.1 PLACE OF MEETINGS ............................................. 1
2.2 ANNUAL MEETING ................................................ 1
2.3 SPECIAL MEETING ............................................... 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS .............................. 2
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE .................. 2
2.6 QUORUM ........................................................ 2
2.7 ADJOURNED MEETING; NOTICE ..................................... 2
2.8 CONDUCT OF BUSINESS ........................................... 3
2.9 VOTING ........................................................ 3
2.10 WAIVER OF NOTICE .............................................. 3
2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING ....................................................... 3
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING
CONSENTS ...................................................... 4
2.13 PROXIES ....................................................... 5
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE ......................... 5
2.15 ADVANCE NOTICE OF STOCKHOLDER NOMINEES ........................ 5
2.16 ADVANCE NOTICE OF STOCKHOLDER BUSINESS ........................ 6
ARTICLE III - DIRECTORS ............................................... 7
3.1 POWERS ........................................................ 7
3.2 NUMBER OF DIRECTORS ........................................... 7
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF
DIRECTORS ..................................................... 7
3.4 RESIGNATION AND VACANCIES ..................................... 7
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE ...................... 8
3.6 REGULAR MEETINGS .............................................. 9
3.7 SPECIAL MEETINGS; NOTICE ...................................... 9
3.8 QUORUM ........................................................ 9
3.9 WAIVER OF NOTICE .............................................. 10
3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING ............. 10
3.11 FEES AND COMPENSATION OF DIRECTORS ............................ 10
3.12 APPROVAL OF LOANS TO OFFICERS ................................. 10
3.13 REMOVAL OF DIRECTORS .......................................... 10
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
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PAGE
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ARTICLE IV - COMMITTEES .............................................. 11
4.1 COMMITTEES OF DIRECTORS ...................................... 11
4.2 COMMITTEE MINUTES ............................................ 12
4.3 MEETINGS AND ACTION OF COMMITTEES ............................ 12
ARTICLE V - OFFICERS ................................................. 12
5.1 OFFICERS ..................................................... 12
5.2 APPOINTMENT OF OFFICERS ...................................... 12
5.3 SUBORDINATE OFFICERS ......................................... 13
5.4 REMOVAL AND RESIGNATION OF OFFICERS .......................... 13
5.5 VACANCIES IN OFFICES ......................................... 13
5.6 CHAIRMAN OF THE BOARD ........................................ 13
5.7 PRESIDENT .................................................... 13
5.8 VICE PRESIDENTS .............................................. 14
5.9 SECRETARY .................................................... 14
5.10 CHIEF FINANCIAL OFFICER ...................................... 14
5.11 ASSISTANT SECRETARY .......................................... 15
5.12 ASSISTANT TREASURER .......................................... 15
5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS ............... 15
5.14 AUTHORITY AND DUTIES OF OFFICERS ............................. 16
ARTICLE VI - INDEMNITY ............................................... 16
6.1 THIRD PARTY ACTIONS .......................................... 16
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION ................ 16
6.3 SUCCESSFUL DEFENSE ........................................... 17
6.4 DETERMINATION OF CONDUCT ..................................... 17
6.5 PAYMENT OF EXPENSES IN ADVANCE ............................... 17
6.6 INDEMNITY NOT EXCLUSIVE ...................................... 18
6.7 INSURANCE INDEMNIFICATION .................................... 18
6.8 THE CORPORATION .............................................. 18
6.9 EMPLOYEE BENEFIT PLANS ....................................... 18
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES ..................................................... 19
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
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PAGE
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ARTICLE VII - RECORDS AND REPORTS .................................... 19
7.1 MAINTENANCE AND INSPECTION OF RECORDS ........................ 19
7.2 INSPECTION BY DIRECTORS ...................................... 20
7.3 ANNUAL STATEMENT TO STOCKHOLDERS ............................. 20
ARTICLE VIII - GENERAL MATTERS ....................................... 20
8.1 CHECKS ....................................................... 20
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS ............. 20
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES ....................... 21
8.4 SPECIAL DESIGNATION ON CERTIFICATES .......................... 21
8.5 LOST CERTIFICATES ............................................ 22
8.6 CONSTRUCTION; DEFINITIONS .................................... 22
8.7 DIVIDENDS .................................................... 22
8.8 FISCAL YEAR .................................................. 22
8.9 SEAL ......................................................... 22
8.10 TRANSFER OF STOCK ............................................ 23
8.11 STOCK TRANSFER AGREEMENTS .................................... 23
8.12 REGISTERED STOCKHOLDERS ...................................... 23
ARTICLE IX - AMENDMENTS .............................................. 23
</TABLE>
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<PAGE> 5
BY-LAWS
OF
PEOPLESOFT, INC.
(As Amended through February 1995)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The name of the registered
agent of the corporation at such location is The Corporation Trust Company.
1.2 OTHER OFFICES
The board of directors may at any time establish other offices at any
place or places where the corporation is qualified to do business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at any place, within or outside
the State of Delaware, designated by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the registered
office of the corporation.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date
and at a time designated by the board of directors. At the meeting, directors
shall be elected and any other proper business may be transacted.
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<PAGE> 6
2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president. No
other person or persons are permitted to call a special meeting. No business may
be conducted at a special meeting other than the business brought before the
meeting by the board of directors or the chairman of the board or the president.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings with stockholders shall be in writing and shall
be sent or otherwise given in accordance with Section 2.5 of these by-laws not
less than ten (10) nor more than sixty (60) days before the date of the meeting
to each stockholder entitled to vote at such meeting. The notice shall specify
the place, date, and hour of the meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's address as it appears on the records of the
corporation. An affidavit of the Secretary or an Assistant Secretary or of the
transfer agent of the corporation that the notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
2.6 QUORUM
The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum is not present or represented at any
meeting of the stockholders, then either (i) the Chairman of the meeting or (ii)
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum is present or
represented. At such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed.
2.7 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these
by-laws otherwise require, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting the corporation may transact any business
that might have been transacted at the original meeting. If the adjournment is
for more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting,
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a notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
2.8 CONDUCT OF BUSINESS
The chairman of any meeting of stockholders shall determine the order
of business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of business.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.12 of these
by-laws, subject to the provisions of Sections 217 and 218 of the General
Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors
and joint owners of stock and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of
incorporation, each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder.
2.10 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these by-laws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any written
waiver of notice unless so required by the certificate of incorporation or these
by-laws.
2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise provided in the certificate of incorporation, any
action required by this chapter to be taken at any annual or special meeting of
stockholders of a corporation, or any action that may be taken at any annual or
special meeting of such stockholders, may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action
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which is consented to is such as would have required the filing of a certificate
under any section of the General Corporation Law of Delaware if such action had
been voted on by stockholders at a meeting thereof, then the certificate filed
under such section shall state, in lieu of any statement required by such
section concerning any vote of stockholders, that written notice and written
consent have been given as provided in Section 228 of the General Corporation
Law of Delaware.
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING
CONSENTS
In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.
If the board of directors does not so fix a record date:
(i) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held.
(ii) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting, when no prior
action by the board of directors is necessary, shall be the day on which the
first written consent is expressed.
(iii) The record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
2.13 PROXIES
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by a written
proxy, signed by the stockholder and filed with the secretary of the
corporation, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless the proxy provides for a longer period. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy (whether
by manual signature, typewriting, telegraphic transmission or
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otherwise) by the stockholder or the stockholder's attorney-in-fact. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Section 212(c) of the General Corporation Law of
Delaware.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present. Such list shall
presumptively determine the identity of the stockholders entitled to vote at the
meeting and the number of shares held by each of them.
2.15 ADVANCE NOTICE OF STOCKHOLDER NOMINEES
Nominations of persons for election to the Board of directors of the
corporation may be made at a meeting of stockholders by or at the discretion of
the board of directors or by any stockholder of the corporation entitled to vote
in the election of directors at the meeting who complies with the notice
procedures set forth in this Section . Such nominations, other than those made
by or at the direction of the board of directors, shall be made pursuant to
timely notice in writing to the Secretary of the corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation not less than twenty (20) days
nor more than sixty (60) days prior to the meeting; provided, however, that in
the event less than thirty (30) days notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be so received not later than the close of business on the
tenth day following the day on which such notice of the date of the meeting was
mailed or such public disclosure was made. Such stockholder's notice shall set
forth (a) as to each person, if any, whom the stockholder proposes to nominate
for election or re-election as a director: (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
corporation which are beneficially owned by such person, (iv) any other
information relating to such person that is required by law to be disclosed in
solicitations of proxies that is required by law to be disclosed in
solicitations of proxies for election of directors, and (v) such person's
written consent to being named as a nominee and to serving as a director if
elected; and (b) as to the stockholder giving the notice: (i) the name and
address, as they appear on the corporation's books, of such stockholder, and
(ii) the class and number of shares of the corporation which are beneficially
owned by such stockholder, and (iii) a description of all arrangements or
understandings between such stockholder and each nominee and any other person or
persons (naming such person or persons) relating to the nomination. At the
request of the board of
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<PAGE> 10
directors any person nominated by the Board for election as a director shall
furnish to the secretary of the corporation that information required to be set
forth in the stockholder's notice of nomination which pertains to the nominee.
No person shall be eligible for election as a director of the corporation unless
nominated in accordance with the procedures set forth in this Section . The
chairman of the meeting shall, if the facts warrant, determine and declare at
the meeting that a nomination was not made in accordance with the procedures
prescribed by these bylaws, and if he should so determine, he shall so declare
at the meeting and the defective nomination shall be disregarded.
2.16 ADVANCE NOTICE OF STOCKHOLDER BUSINESS
At the annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be: (a) as specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the board of directors, (b) otherwise properly brought before the meeting by or
at the direction of the board of directors, or (c) otherwise properly brought
before the meeting by a stockholder. Business to be brought before an annual
meeting by a stockholder shall not be considered properly brought if the
stockholder has not given timely notice thereof in writing to the secretary of
the corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the corporation not
less than twenty (20) nor more than sixty (60) days prior to the meeting;
provided, however, that in the event that less than thirty (30) days notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the tenth day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. A stockholder's notice to the secretary shall set forth as
to each matter the stockholder proposes to bring before the annual meeting: (i)
a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (ii)
the name and address of the stockholder proposing such business, (iii) the class
and number of shares of the corporation, which are beneficially owned by the
stockholder, (iv) any material interest of the stockholder in such business, and
(v) any other information that is required by law to be provided by the
stockholder in his capacity as a proponent of a stockholder proposal.
Notwithstanding anything in these bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this Section . The chairman of the annual meeting shall, if the facts
warrant, determine and declare at the meeting that business was not properly
brought before the meeting and in accordance with the provisions of this Section
, and, if he should so determine, he shall so declare at the meeting that any
such business not properly brought before the meeting shall not be transacted.
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ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware
and any limitations in the certificate of incorporation or these by-laws
relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
3.2 NUMBER OF DIRECTORS
The Board of Directors shall consist of five (5) persons until changed
by a proper amendment of this Section 3.2.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these by-laws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting unless specified otherwise in the certificate of incorporation.
Directors need not be stockholders unless so required by the certificate of
incorporation or these by-laws, wherein other qualifications for directors may
be prescribed. Each director, including a director elected to fill a vacancy,
shall hold office until his or her successor is elected and qualified or until
his or her earlier resignation or removal.
Elections of directors need not be by written ballot.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon written notice to the
attention of the Secretary of the corporation. When one or more directors so
resigns and the resignation is effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall have power
to fill such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each director so chosen
shall hold office as provided in this section in the filling of other vacancies.
Unless otherwise provided in the certificate of incorporation or these
by-laws:
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(i) Vacancies and newly created directorships resulting from
any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
(ii) Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more directors by the provisions of
the certificate of incorporation, vacancies and newly created directorships of
such class or classes or series may be filled by a majority of the directors
elected by such class or classes or series thereof then in office, or by a sole
remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these by-laws, or may
apply to the Court of Chancery for a decree summarily ordering an election as
provided in Section 211 of the General Corporation Law of Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten (10) percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as aforesaid,
which election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The board of directors of the corporation may hold meetings, both
regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or
these by-laws, members of the board of directors, or any committee designated by
the board of directors, may participate in a meeting of the board of directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
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3.6 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice
at such time and at such place as shall from time to time be determined by the
board.
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two (2) directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. If the notice is mailed, it
shall be deposited in the United States mail at least four (4) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or by telegram, it shall be delivered personally or by telephone or to
the telegraph company at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly communicate
it to the director. The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive office of the
corporation.
3.8 QUORUM
At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum is not present at any meeting of the board of
directors, then the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is present.
A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.
3.9 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these by-laws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such
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meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
directors, or members of a committee of directors, need be specified in any
written waiver of notice unless so required by the certificate of incorporation
or these by-laws.
3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation or
these by-laws, any action required or permitted to be taken at any meeting of
the board of directors, or of any committee thereof, may be taken without a
meeting if all members of the board or committee, as the case may be, consent
thereto in writing and the writing or writings are filed with the minutes of
proceedings of the board or committee.
3.11 FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or
these by-laws, the board of directors shall have the authority to fix the
compensation of directors.
3.12 APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.13 REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the certificate of
incorporation or by these by-laws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided, however,
that, so long as stockholders of the corporation are entitled to cumulative
voting, if less than the entire board is to be removed, no director may be
removed without cause if the votes cast against his or her removal would be
sufficient to elect such director if then cumulatively voted at an election of
the entire board of directors.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.
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ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution passed by a majority of the
whole board, designate one or more committees, with each committee to consist of
one or more of the directors of the corporation. The board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors or in the by-laws of the corporation, shall
have and may exercise all the powers and authority of the board of directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers that may require it; but
no such committee shall have the power or authority to (i) amend the certificate
of incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the board of directors as provided in Section 151(a) of the General
Corporation Law of Delaware, fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption, dissolution, any
distribution of assets of the corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the corporation or
fix the number of shares of any series of stock or authorize the increase or
decrease of the shares of any series), (ii) adopt an agreement of merger or
consolidation under Sections 251 or 252 of the General Corporation Law of
Delaware, (iii) recommend to the stockholders the sale, lease or exchange of all
or substantially all of the corporation's property and assets, (iv) recommend to
the stockholders a dissolution of the corporation or a revocation of a
dissolution, or (v) amend the bylaws of the corporation; and, unless the board
resolution establishing the committee, the by-laws or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.
4.3 MEETINGS AND ACTION OF COMMITTEES
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Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these by-laws,
Section 3.5 (place of meetings and meetings by telephone), Section 3.6 (regular
meetings), Section 3.7 (special meetings and notice), Section 3.8 (quorum),
Section 3.9 (waiver of notice), and Section 3.10 (action without a meeting),
with such changes in the context of those by-laws as are necessary to substitute
the committee and its members for the board of directors and its members;
provided, however, that the time of regular meetings of committees may be
determined either by resolution of the board of directors or by resolution of
the committee, that special meetings of committees may also be called by
resolution of the board of directors and that notice of special meetings of
committees shall also be given to all alternate members, who shall have the
right to attend all meetings of the committee. The board of directors may adopt
rules for the government of any committee not inconsistent with the provisions
of these by-laws.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the corporation shall be a president, a secretary, and
a chief financial officer. The corporation may also have, at the discretion of
the board of directors, a chairman of the board, one or more vice presidents,
one or more assistant vice presidents, one or more assistant secretaries, one or
more assistant treasurers, and any such other officers as may be appointed in
accordance with the provisions of Section 5.3 of these by-laws. Any number of
offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Sections 5.3 or 5.5 of these
by-laws, shall be appointed by the board of directors, subject to the rights, if
any, of an officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or empower the president to
appoint, such other officers and agents as the business of the corporation may
require, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these by-laws or as the board of
directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
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Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
Any vacancy occurring in any office of the corporation shall be filled
by the board of directors.
5.6 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these by-laws. If there is no
president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.7 of these by-laws.
5.7 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction, and control of the business and the officers of the corporation. The
president shall preside at all meetings of the stockholders and, in the absence
or nonexistence of a chairman of the board, at all meetings of the board of
directors. The president shall have the general powers and duties of management
usually vested in the office of president of a corporation and shall have such
other powers and duties as may be prescribed by the board of directors or these
by-laws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or, if not
ranked, a vice president designated by the board of directors, shall perform all
the duties of the president and when so acting shall have all the powers of, and
be subject to all the restrictions upon, the president. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the board of directors, these
by-laws, the president or the chairman of the board.
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5.9 SECRETARY
The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of
directors, committees of directors, and stockholders. The minutes shall show the
time and place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
stockholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares, and the number
and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law or
by these by-laws. The secretary shall keep the seal of the corporation, if one
be adopted, in safe custody and shall have such other powers and perform such
other duties as may be prescribed by the board of directors or by these by-laws.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any director.
The chief financial officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositories as may be designated by the board of directors. The chief financial
officer shall disburse the funds of the corporation as may be ordered by the
board of directors, shall render to the president and directors, whenever they
request it, an account of all his or her transactions as chief financial officer
and of the financial condition of the corporation, and shall have other powers
and perform such other duties as may be prescribed by the board of directors or
these by-laws.
The chief financial officer shall be the treasurer of the corporation.
5.11 ASSISTANT SECRETARY
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The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as may be
prescribed by the board of directors or these by-laws.
5.12 ASSISTANT TREASURER
The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the chief financial officer or in the event of his or
her inability or refusal to act, perform the duties and exercise the powers of
the chief financial officer and shall perform such other duties and have such
other powers as may be prescribed by the board of directors or these by-Laws.
5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, the president, any vice president, the chief
financial officer, the secretary or assistant secretary of this corporation, or
any other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority granted
herein may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
5.14 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from time
to time by the board of directors or the stockholders.
ARTICLE VI
INDEMNITY
6.1 THIRD PARTY ACTIONS
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal,
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administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement (if
such settlement is approved in advance by the corporation, which approval shall
not be unreasonably withheld) actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which such
person reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee or
agent of corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) and amounts paid in settlement (if such settlement is approved in advance
by the corporation, which approval shall not be unreasonably withheld) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper. Notwithstanding any other
provision of this Article VI, no person shall be indemnified hereunder for any
expenses or amounts paid in settlement with respect to any action to recover
short-swing profits under Section 16(b) of the Securities Exchange Act of 1934,
as amended.
6.3 SUCCESSFUL DEFENSE
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by the
person in connection therewith.
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6.4 DETERMINATION OF CONDUCT
Any indemnification under Sections 6.1 and 6.2 (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that the indemnification of the director, officer, employee
or agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in Sections 6.1 and 6.2. Such
determination shall be made (1) by the Board of Directors or the Executive
Committee by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding or (2) or if such quorum is not
obtainable or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders. Notwithstanding the foregoing, a director, officer, employee or
agent of the Corporation shall be entitled to contest any determination that the
director, officer, employee or agent has not met the applicable standard of
conduct set forth in Sections 6.1 and 6.2 by petitioning a court of competent
jurisdiction.
6.5 PAYMENT OF EXPENSES IN ADVANCE
Expenses incurred in defending a civil or criminal action,
suit or proceeding, by an individual who may be entitled to indemnification
pursuant to Section 6.1 or 6.2, shall be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount if it shall ultimately be determined that the individual is not
entitled to be indemnified by the corporation as authorized in this Article VI.
6.6 INDEMNITY NOT EXCLUSIVE
The indemnification and advancement of expenses provided by or granted
pursuant to the other sections of this Article VI shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in their official
capacity and as to action in another capacity while holding such office.
6.7 INSURANCE INDEMNIFICATION
The corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against the
person and incurred by the person in any such capacity or arising out of the
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article VI.
6.8 THE CORPORATION
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For purposes of this Article VI, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under and subject to the provisions of this Article VI (including,
without limitation the provisions of Section 6.4) with respect to the resulting
or surviving corporation as the person would have with respect to such
constituent corporation if its separate existence had continued.
6.9 EMPLOYEE BENEFIT PLANS
For purposes of this Article VI, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this Article
VI.
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VI shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive officer or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these by-laws as amended to date,
accounting books, and other records.
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<PAGE> 23
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent so to act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.
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<PAGE> 24
ARTICLE VIII
GENERAL MATTERS
8.1 CHECKS
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
The board of directors, except as otherwise provided in these by-laws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairman or vice-chairman of
the board of directors, or the president or vice-president, and by the chief
financial officer or an assistant treasurer, or the secretary or an assistant
secretary of such corporation representing the number of shares registered in
certificate form. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if the person were such
officer, transfer agent or registrar at the date of issue.
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<PAGE> 25
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.4 SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
8.5 LOST CERTIFICATES
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and canceled at the same time. The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or the owner's legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate or uncertificated shares.
8.6 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these by-laws. Without limiting the generality of
this provision, the singular number includes the plural, the plural number
includes the singular, and the term "person" includes both a corporation and a
natural person.
8.7 DIVIDENDS
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<PAGE> 26
The directors of the corporation, subject to any restrictions contained
in (i) the General Corporation Law of Delaware or (ii) the certificate of
incorporation, may declare and pay dividends upon the shares of its capital
stock. Dividends may be paid in cash, in property, or in shares of the
corporation's capital stock.
The directors of the corporation may set apart out of any of the funds
of the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
corporation, and meeting contingencies.
8.8 FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.
8.9 SEAL
The corporation may adopt a corporate seal, which shall be adopted and
which may be altered by the board of directors, and may use the same by causing
it or a facsimile thereof to be impressed or affixed or in any other manner
reproduced.
8.10 TRANSFER OF STOCK
Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction in its books.
8.11 STOCK TRANSFER AGREEMENTS
The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the General Corporation Law of Delaware.
8.12 REGISTERED STOCKHOLDERS
The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
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<PAGE> 27
ARTICLE IX
AMENDMENTS
The by-laws of the corporation may be adopted, amended or repealed by
the stockholders entitled to vote; provided, however, that the corporation may,
in its certificate of incorporation, confer the power to adopt, amend or repeal
by-laws upon the directors. The fact that such power has been so conferred upon
the directors shall not divest the stockholders of the power, nor limit their
power to adopt, amend or repeal by-laws.
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<PAGE> 28
CERTIFICATE OF AMENDMENT OF BY-LAWS
OF
PEOPLESOFT, INC.
Certificate by Secretary of Amendment
The undersigned hereby certifies that he is the duly elected,
qualified, and acting Secretary of PeopleSoft, Inc. and that the foregoing
By-Laws, comprising twenty-five (25) pages, were ratified as the Amended and
Restated By-Laws of the corporation by the Board of Directors on February 15,
1995.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and
affixed the corporate seal this ____ day of February, 1996.
-------------------------
Ronald E. F. Codd,
Secretary
<PAGE> 1
AMENDMENT NO. 2 EXHIBIT 10.25
via fax and post
28 September 1994
Mr. Dan Zaccardo
Senior Corporate Counsel
ADP, Inc.
One ADP Boulevard
Roseland, New Jersey 07068-1728
Dear Dan:
It is my understanding that Al Duffield and Tim Lamb have had
discussions concerning a proposed distribution transaction that PeopleSoft is
undertaking with Shared Medical Systems ("SMS"). This letter will formalize
those discussions and shall act as written amendment number 2 to our existing
agreement ("Agreement").
The parties have agreed, without waiving any rights under the Agreement
with respect to future transactions, to work together as agreed herein to
expedite and increase the possibility of closure of a proposed PeopleSoft/SMS
transaction for the mutual benefit of both PeopleSoft and ADP and a proposed
transaction between ADP and GSI (Canada) for the remarketing of GSI's product by
ADP in Canada. The parties agree as follows:
1. PeopleSoft shall have the right to enter into a remarketing
relationship with SMS to enable SMS to remarket PeopleSoft HRMS software
products with SMS' products to SMS' customers and future customers for
implementation in the healthcare industry;
2. Only upon execution of the remarketing agreement between PeopleSoft
and SMS, PeopleSoft will, at ADP's written request, either:
(a) reduce the aggregate maximum amount of License and
Support Fees referenced in Paragraph 6(b)(II)(C) by
$400,000 and therefore the $22,500,000 will be changed
to $22,100,000; or
(b) reduce the Sublicense Fee referenced in Paragraph
6(b)(II)(A) to be paid by ADP for calendar year 1995
by $100,000 and reduce the Sublicense Fee referenced
in Paragraph 6(b)II)(B) to be paid by ADP for calendar
year 1996 by $100,000.
3. As of the date of this letter, and without further notice by notice
or conference required by either party to the other, ADP commits to the minimum
payments in 6(b)(II)(A) for 1995;
4. Upon execution of this letter, PeopleSoft agrees that the
PeopleSoft/Application Group Implementation Partner Agreement dated 1 September
1993, as amended, and the related software license may be assigned to the ADP
entity only for the marketing benefit of The Application Group entity (and not
under the ADP name). Only upon execution of the remarketing agreement between
PeopleSoft and SMS, the term of each of the Implementation Partner Agreement and
the related license shall be extended to 31 December 1997.
<PAGE> 2
Mr. Dan Zaccardo
ADP, Inc.
31 August 1994
Page 2
The intent behind this assignment is to enable The Application Group to
continue to perform work for clients of PeopleSoft and/or ADP and not to enable
ADP to obtain a competitive advantage against PeopleSoft by using or reviewing
PeopleSoft technology to enhance ADP's CSS technology. All payments under the
Implementation Partner Agreement and the related license shall continue.
The parties understand that it is expected that only Application Group
personnel will have access to both the PeopleSoft source code and the ADP CSS
source code in connection with the performance of their implementation services
to PeopleSoft customers and ADP customers. However, Application Group personnel
who have access to the PeopleSoft source code shall not use any PeopleSoft
source code or information derived therefrom to enhance, modify, or further
develop the ADP CSS source code.
The parties further understand that Application Group personnel who
have had access to the PeopleSoft source code may retain certain fragments of
information in their memory and such personnel shall be permitted to use such
fragments of information in connection with the CSS product only after a twelve
(12) month period after last access to the PeopleSoft source code. In no event
shall ADP, The Application Group or its contractors be permitted to copy all or
any portion of any copyrighted portion of the PeopleSoft information without
PeopleSoft's prior written consent, unless otherwise provided in the Agreement;
and
5. Upon execution of this letter, PeopleSoft agrees to permit ADP
(without ADP losing any of its rights or benefits under the Agreement) to: (i)
contract with GSI to enable ADP to sublicense GSI products in Canada; and (ii)
contract with banks in Canada to enable ADP to sublicense such banks' products
in Canada to mutual clients of such banks and ADP, in each case in the same
manner that ADP operates under the Agreement.
6. The parties understand and agree that the specific terms of this
letter amendment are confidential, (particularly the possible or actual
extension of the term of the Implementation Partner Agreement) and neither party
shall disclose any of the specific terms to any third party. However, ADP shall
be permitted to issue general press releases and marketing statements concerning
ADP's acquisition of AG.
Please procure the signature of an authorized ADP signatory and return
the original document to my attention.
Sincerely, PeopleSoft, Inc. ADP, Inc.
/s/ Robert D. Finnell /s/ Ronald E.F. Codd /s/ James B. Benson
_____________________ ____________________ ___________________
Robert D. Finnell Ronald E.F. Codd Signature
Corporate Counsel Sr. Vice President and CFO
James B. Benson
Printed name/title
President
<PAGE> 3
AMENDMENT NO. 4
December 28, 1995
Mr. Al Duffield
Vice President
PeopleSoft, Inc.
1331 North California Boulevard
Walnut Creek, California 94596
Dear Al:
This letter agreement ("Letter Agreement") will serve as Amendment No.
4 to the Software License and Support Agreement dated as of June 23, 1992
between ADP, Inc. ("ADP") and PeopleSoft, Inc. ("PeopleSoft"), as heretofore
amended (the "ADP/PeopleSoft Agreement"). ADP and PeopleSoft hereby agree as
follows:
1. PeopleSoft hereby grants to ADP a perpetual and non-exclusive source
code and object code license to use, modify and relicense PeopleSoft Workflow
and all related workflow tools, all of which are more fully described on Exhibit
A attached hereto ("Workflow"). Except as otherwise indicated herein, such
license shall be governed by the terms and conditions of the ADP/PeopleSoft
Agreement.
2. Promptly after the date hereof and in accordance with the terms and
conditions of the ADP/PeopleSoft Agreement, PeopleSoft shall deliver to ADP the
source code and object code for Workflow release No. 5.0 and all related
end-user materials (including, without limitation, all materials described in
Section 1.12 of the ADP/PeopleSoft Agreement).
3. In accordance with Section 4 of the ADP/PeopleSoft Agreement,
PeopleSoft shall provide to ADP "Product Maintenance Services" (as defined in
Section 4) for Workflow, including, without limitation, providing ADP with (i)
any and all updates, improvements, additions, modifications and/or enhancements
to Workflow release No. 5.xx up to, but not including, the next major release of
Workflow (e.g., release No. 6.0), (ii) any and all releases which are intended
to correct any "Bugs" (as defined in Section 1.6 of the ADP/PeopleSoft
Agreement) in the releases to which ADP is entitled pursuant hereto and (iii)
any and all information on human resource data base changes which are necessary
or required to correct Bugs and to use the updates, improvements, additions,
modifications and/or enhancements described herein. PeopleSoft shall provide ADP
with all such interim 5.xx
<PAGE> 4
releases of Workflow regardless of whether Workflow releases are delivered by
PeopleSoft as part of Product Maintenance Services for Workflow and/or
PeopleTools.
4. As full consideration for PeopleSoft's grant of the license
hereunder and its provision of Product Maintenance Services for Workflow, ADP
hereby notifies PeopleSoft that, in accordance with Section 6(b)(II) of the
ADP/PeopleSoft Agreement, ADP hereby commits to the two minimum payments
provided for in Sections 6(b)(II)(B) and 6(b)(II)(C) of the ADP/PeopleSoft
Agreement; provided, however, that such minimum payments are hereby amended to
be $4,900,000 each (i.e., ADP hereby agrees to pay a total of $1,000,000 as full
consideration for PeopleSoft's grant of the license hereunder and its provision
of Product Maintenance Services for Workflow), subject to Paragraph 6 herein.
The annual notice to be given by ADP to PeopleSoft on or before December 1, 1996
pursuant to Paragraph 6(b)(II) of the ADP/PeopleSoft Agreement is hereby given.
5. In accordance with Paragraph 2(a) of Amendment No. 2 to the
ADP/PeopleSoft Agreement, ADP and PeopleSoft hereby agree that the aggregate
maximum amount of the "Sublicense Fees" and the "License and Support Fees"
referenced in Section 6(b)(II)(C) of the ADP/PeopleSoft Agreement are hereby
reduced by $400,000 and therefore, after taking into effect the $1,000,000
payment referred to in Paragraph 4 herein and the discounting process described
in Paragraph 6 herein, the $22,500,000 referenced in such section is hereby
changed to $22,781,500.
6. Notwithstanding anything to the contrary contained in the
ADP/PeopleSoft Agreement, the payments provided for in Section 6(b)(II)(B) and 6
(b)(II)(C) of the ADP/PeopleSoft Agreement and referred to in Paragraph 4 herein
shall be discounted at six percent (6%) and shall be made as follows (in lieu of
one payment annually in arrears):
<TABLE>
<S> <C>
March 31................................................. $1,157,625
June 30.................................................. $1,176,000
September 30............................................. $1,194,375
December 31.............................................. $1,212,750
----------
Total: $4,740,750
</TABLE>
For example, the $4,900,000 payment that would have been made in February 1997
(i.e., the payment provided for in Section 6(b)(II)(B) of the ADP/PeopleSoft
Agreement, as amended in Paragraph 4 herein) shall instead be discounted to
$4,740,750 and shall be made in four quarterly installments commencing March 31,
1996.
2
<PAGE> 5
7. In connection with PeopleSoft's current efforts to build an
interface between its client/server products and ADP's Autopay II payroll
system, ADP hereby agrees to license and deliver to PeopleSoft a copy of (i) "PC
Payroll" (release No. 6.02) and (ii) "PC Exchange" (release No. 6.02). ADP also
hereby agrees to license and promptly deliver to PeopleSoft all future releases
of both such products until the earlier of (A) the date that PeopleSoft
completes the aforementioned interface and (B) the date that ADP is no longer
entitled to receive Product Maintenance Services for Workflow. PeopleSoft
acknowledges and agrees that such ADP products and any non-public information
related thereto are the proprietary and confidential property of ADP.
Accordingly, PeopleSoft hereby agrees that it will treat as confidential and
will not use, disclose or otherwise make available any such ADP products or
information to any person or entity other than to employees of PeopleSoft who
have a need-to-know in connection with PeopleSoft's current efforts to build the
aforementioned interface. Upon ADP's written request, PeopleSoft shall return to
ADP (within ten days after ADP's request) the ADP products and information
described in this Paragraph 7; provided, however, that, so long as PeopleSoft is
in compliance with the terms and conditions of this Letter Agreement and the
ADP/PeopleSoft Agreement, PeopleSoft shall not be required to return such copies
and information to ADP until the earlier of (A) the date that PeopleSoft
completes the aforementioned interface and (B) the date that ADP is no longer
entitled to receive Product Maintenance Services for Workflow. At no additional
fee to PeopleSoft, ADP shall also provide PeopleSoft with 120 ADP man-hours of
phone/on-site advisory support for PeopleSoft's efforts to build the
aforementioned interface. PeopleSoft shall be responsible for all reasonable
travel expenses incurred by ADP and ADP personnel in connection with such
support. If and to the extent that ADP shall agree with PeopleSoft to provide
additional support, such support shall be provided at ADP's then prevailing
rates.
8. ADP and PeopleSoft have agreed to this Amendment No. 4 without
waiving any other rights under the ADP/PeopleSoft Agreement and this Amendment
No. 4 represents the entire agreement between ADP and PeopleSoft on the subject
matter herein and may only be modified by a written amendment hereto.
3
<PAGE> 6
9. If you agree to be bound by the terms and conditions herein, please
execute below both copies of this Letter Agreement and return one fully executed
copy to my attention.
ADP, INC.
By: /s/ Richard Haviland
_____________________________
Name: Richard Haviland
Title: Vice President
ACCEPTED AND AGREED:
PEOPLESOFT, INC.
By: /s/ Albert W. Duffield
__________________________
Name: Al Duffield
Title: Sr. Vice President
4
<PAGE> 7
EXHIBIT A
Workflow Release 5.0 consists of:
* Workflow Designer: Tools to design and build the business process, rules,
roles and routings. Used to define worklists, message definitions, user roles,
and business processes.
* Workflow Processor: Suite of on-line agents to control and run the business
processes. Includes Message Agent, Application Agent, Database Agent and
Worklist Processor.
* Workflow Administrator: Tools to access, monitor, analyze and control the
workflow in the organization.
5
<PAGE> 1
EXHIBIT 10.26
AMENDED SOFTWARE DEVELOPMENT AGREEMENT
THIS AMENDED SOFTWARE DEVELOPMENT AGREEMENT ("Agreement") is entered into as of
the Amended Effective Date by and between PEOPLESOFT, INC., ("PeopleSoft") a
Delaware corporation having its principal place of business at 1331 North
California Boulevard, Walnut Creek, California 94596, SOLUTIONS FOR EDUCATION
ADMINISTRATORS, INC. ("SEA") a California corporation having its principal place
of business at 15515 San Fernando Mission Boulevard, Suite 6, Mission Hills,
California 91345, and SIS DEVELOPMENT, LLC ("LLC") a California limited
liability company having its principal place of business at 4440 Rosewood Drive,
Pleasanton, California 94588 hereafter collectively referred to as the parties
("Parties").
R E C I T A L S
Whereas, SEA is engaged in computer systems design, software development and the
provision of professional consulting services to the higher education market;
and
Whereas, PeopleSoft, LLC and SEA each desire to enter into an agreement for
development of the Derivative Software upon the terms and conditions set forth
herein; and
Whereas, PeopleSoft and SEA entered into a Software Development Agreement
effective 16 January 1995 ("Original Development Agreement") upon which this
Agreement is principally based and which is intended to terminate and be
superseded by this Agreement upon the Parties' execution of this Agreement; and
Whereas, PeopleSoft and David A. Duffield entered into a Software Development
Funding Agreement effective December 7, 1994 under which Mr. Duffield would fund
the development of the Derivative Software and which agreement has subsequently
been terminated effective December 22, 1995 with Mr. Duffield contributing all
of his rights and interests in the Derivative Software to LLC; and
Whereas, PeopleSoft and LLC have entered into an Exclusive Marketing and
Distribution Agreement ("Marketing Agreement") for PeopleSoft's distribution of
the proposed Derivative Software as specified in the Marketing Agreement;
NOW, THEREFORE, in consideration of the mutual covenants, representations and
warranties of the Parties contained in this Agreement, PeopleSoft, LLC and SEA
hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms shall have
the respective meanings indicated below:
"ACCEPTANCE" means PeopleSoft's and LLC's written statement of acceptance of the
Derivative Software developed by SEA pursuant to this Agreement based on
PeopleSoft's and LLC's determination, in its reasonable judgment, that the
Derivative Software conforms to the Test Plans. Acceptance shall also mean
PeopleSoft's and LLC's written statement of acceptance of each Vested Milestone.
"ACCEPTANCE TESTING" shall have the meaning set forth in Section 15 of this
Agreement.
"AMENDED EFFECTIVE DATE" means 22 December 1995.
"BETA SITES" shall have the meaning set forth in Section 4 of this Agreement.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section 38 of
this Agreement.
"DERIVATIVE SOFTWARE" means all and any portion of the Documentation and Modules
developed by SEA using the PeopleSoft application development environment, and
all other information systems technologies developed or acquired in accordance
with the Test Plans and Project Plans. Without limitation of any other
exclusions, the
Page 1 of 40
<PAGE> 2
following are expressly excluded from the scope of this definition: (i) the
Student Loan Marketing Association's ("Sallie Mae") LineSS software, except as
such product may be adapted for and included in the Financial Aid Module of the
Derivative Software; and (ii) any enhanced free-standing LineSS product
developed by Sallie Mae using PeopleTools; and (iii) any loan management system
incorporating all or part of LineSS that is developed by Sallie Mae.
"DEVELOPMENT ENVIRONMENT" shall have the meaning set forth in Section 5 of this
Agreement.
"DEVELOPMENT TERM" shall have the meaning set forth in Section 3 of this
Agreement.
"DOCUMENTATION" means written materials, and a machine readable copy in Word for
Windows format, developed for use in the training, operation, and maintenance of
the Derivative Software, including instruction manuals and program listings.
"EFFECTIVE DATE" means 16 January 1995.
"FUTURE MODULES" means the functions set forth in Exhibit "B".
"IMPLIED FUNDING LEVEL FORMULA" means the Implied Project Funding set forth in
Section 17.1.
"INTEGRATION" means the process of design and development of the Derivative
Software in a manner that produces a "look and feel characteristic set" that is
consistent with the Software. The Integration shall also mean the incorporation
of (where reasonably practicable) table compositions and field definitions that
are consistent with the Software where the Derivative Software and the Software
can share common information such as department tables or account tables.
"INTERFACE" means the additional programming to the Software and third party
software reasonably necessary for establishing an interface between the
Derivative Software and the Software not otherwise obtainable through
Integration.
"KEY PERSONNEL" means [ * ] who are designated as key personnel for the
performance of the Project during the Development Term.
"MAINTENANCE CONTRACT" means a proposed maintenance and support agreement as
further described in Section 27 and Exhibit "F", respectively.
"MODULES" means five student information system program modules, one each
regarding (i) [ * ], (ii) [ * ], (iii) [ * ], (iv) [ * ] , and (v) [ * ] , in
each case meeting the requirements of the Test Plans and with the expectation
that such Modules shall achieve reasonable marketplace acceptance in the higher
education market. Exhibit "A" lists the functions which will be considered for
inclusion (but not necessarily included) in each of the Modules as of the
Effective Date. The definition of Modules excludes Future Modules, Interfaces,
and Portings.
"MORAL RIGHTS" shall: (i) include any personal, non-proprietary, non-assignable
or inalienable rights with respect to works of authorship, including any alleged
right to prevent others from making changes in a work, or to withdraw a work
from publication if it no longer represents the then-current position of the
author, under the laws of the United States (including the Visual Artists Rights
Act of 1990 or similar state laws) or of any other jurisdiction; and (ii)
expressly exclude the limited right of SEA, and its programmers, solely for
marketing, promotion, publicity and financing purposes, to publicize SEA, and
its programmers, as the designers, developers, consultants and programmers of
the Derivative Software, provided that during the Term such marketing, promotion
and publication rights and activities are consistent with the spirit of this
Agreement.
"NET LICENSE FEES" shall mean the gross revenues earned on an accrual basis in
accordance with generally accepted accounting principles and invoiced by
PeopleSoft, or
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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LLC, or any distributor appointed by PeopleSoft or LLC, from the sale, license,
lease or other transfer of any Module or Derivative Software less any bundled
maintenance, sales taxes, and third-party product royalty payments. Gross
revenues include all fees received from initial licenses, upgrades (excluding
upgrades provided pursuant to Support Services), expanded or enhanced rights to
use the Derivative Software or any Module, and PeopleTools run-time licenses.
However, for the purposes of payment calculations, bundled maintenance fees may
be no more than [ * ] % of the Net License Fees, and third-party product royalty
payments may be no more than [ * ]% of the Net License Fees. Any other fees for
training, professional services, or any other items that are standardly bundled
with the initial license fee will not be deducted from gross revenues when
calculating Net License Fees.
"PAYMENT RATE SCHEDULE" means the payment rates ascribed to a particular Project
Funding Level as set forth in Exhibit D for years one (1) through ten (10)
starting from the Effective Date.
"PEOPLESOFT AFFILIATE" means any entity which at the time of assignment of this
Agreement to such entity meets each of the following three requirements: (a) the
entity is an entity in which PeopleSoft has a material ownership interest (ten
percent or more) or which owns a majority interest in PeopleSoft, (b) the entity
is an entity to which PeopleSoft may assign this Agreement pursuant to Section 2
hereof, and (c) the entity is an entity that PeopleSoft reasonably believes as
of the assignment date has sufficient resources to fund the Project and to pay
payments to SEA as set forth herein, in each case without a significant risk of
bankruptcy or insolvency.
"PEOPLESOFT FINANCIALS" means the PeopleSoft Financials programs, including
applicable source code, as delivered to SEA, including to the extent of
development: PeopleSoft General Ledger, PeopleSoft Accounts Payable, PeopleSoft
Accounts Receivable, PeopleSoft Asset Management, PeopleSoft Budget
Administration, PeopleSoft Purchasing, PeopleSoft Inventory, PeopleSoft Order
Management, PeopleSoft Project Costing and PeopleSoft Billing.
"PEOPLESOFT HRMS" means the standard PeopleSoft HRMS programs, including
applicable source code, as delivered to SEA, including to the extent of
development: PeopleSoft Human Resources, PeopleSoft Payroll, PeopleSoft Benefits
Administration, PeopleSoft Payroll Interface, PeopleSoft FSA Administration,
PeopleSoft Pension Administration, and PeopleSoft Time and Labor.
"PEOPLETOOLS" means all or any portion of the underlying technology, tools and
documentation delivered by PeopleSoft to SEA under this Agreement which serves
as the foundation for PeopleSoft Financials and PeopleSoft HRMS. No portion of
the source code to PeopleTools is included in this definition, except such
limited portions of the source code as may be provided by PeopleSoft in its sole
discretion to SEA as a result of PeopleSoft's Interface or Porting obligations.
"PHASE 1" means the Project Initiation/General Architecture phase, as further
described in Section 3.1.
"PHASE 2" means the Detailed Design and Prototyping phase, as further described
in Section 3.2.
"PHASE 3" means the Development phase, as further described in Section 3.3.
"PORT" or "PORTING" shall mean the additional programming and third party
licenses reasonably necessary to make the Software and the Derivative Software
function on any Targeted Database Platform.
"PROJECT" means the various phases of development of the Derivative Software as
set forth in Section 3, commencing on the Effective Date, and shall include the
respective obligations and duties of SEA, LLC and PeopleSoft with respect to the
funding, design, development, engineering and programming of the Derivative
Software pursuant to this Agreement.
"PROJECT FUNDING" shall have the meaning set forth in Section 7.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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"PROJECT PLANS" means the written project plans developed by SEA, LLC and
PeopleSoft during Phase 1, as refined during Phase 2 and with very limited
refinement during Phase 3, respectively, and covering specific deliverables,
schedules and Vesting Milestones.
"SOFTWARE" means all or any portion of the computer software and standard
documentation for PeopleTools, PeopleSoft HRMS, and PeopleSoft Financials as of
the Effective Date and as provided by PeopleSoft to SEA. The term "Software"
shall also include such corrections and updates to the Software as they are
provided by PeopleSoft to SEA.
"TARGETED DATABASE PLATFORMS" means only those relational database products
selected by PeopleSoft for operation with the Derivative Software after
undertaking a good faith assessment of, and considering technological
feasibility and market demand criteria. The Targeted Database Platforms may
include one or more platforms other than that used in the Development
Environment. The Targeted Database Platforms may not include any database
platforms which are not then-commercially supported by PeopleSoft or any desktop
environment other than Microsoft Windows current or future versions.
"TERM" means the period commencing on the Effective Date and continuing until
January 15, 2005 or as may be extended or earlier terminated under this
Agreement.
"TEST PLANS" means the written requirements to be mutually agreed to by SEA, LLC
and PeopleSoft during Phase 1 and Phase 2 which shall form the basis for the
issuance of Acceptance with each party acting reasonably and in good faith.
"VESTING MILESTONES" shall have the meaning set forth in Section 17.
2. ASSIGNMENT.
All Parties hereby agree to the complete and unconditional assumption by LLC of
certain PeopleSoft rights, responsibilities and obligations as documented
herein, including, but not limited to, the obligation to provide all Project
Funding to SEA. PeopleSoft will continue to retain all rights, responsibilities
and obligations under the Development Agreement which have not been assumed by
LLC. Neither PeopleSoft nor LLC may sell or transfer title to any Module or the
Derivative Software to any customer or entity without paying SEA the applicable
payments set forth in Section 10 of the Development Agreement or negotiating a
lump-sum payment pursuant to Section 11 of the Development Agreement. Any other
amendment, assignment or transfer of the Development Agreement, as amended, by
PeopleSoft, LLC or SEA will require the written consent of all Parties which
will not be unreasonably withheld by any party
3. SCOPE OF AGREEMENT. The Derivative Software is to be developed in accordance
with the Project Plans in three phases, referred to herein as Phase 1, Phase 2,
and Phase 3, as further set forth below. Phase 1 shall commence on the Effective
Date. The combined duration of these three phases, commencing on the Effective
Date, shall hereinafter be referred to as the "Development Term." The Test Plans
will be developed and agreed upon at the end of Phase 1 and the detailed
deliverables will be revisited and refined in Phase 2 with each party acting
reasonably and in good faith.
GENERAL:
SEA shall only use PeopleTools and the third party development software
typically used by other PeopleSoft software as the primary technical foundation
for the development of the Derivative Software. PeopleSoft and LLC shall have
the right to approve or not approve all other software component technologies
which may be utilized by SEA to develop the Derivative Software. The impact, if
any, that such third party technologies will have on the Term, Development Term,
milestones, Vesting Milestones, and payment schedule, and the payment
obligations, Beta Sites obligations, and Development Environment obligations of
PeopleSoft, shall be discussed
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<PAGE> 5
between the Parties and adjusted as mutually agreed upon in writing at such
times. Any costs and expenses incurred for such other software component
technologies shall be negotiated in good faith between the Parties and may be
deemed Project Funding and recoverable by PeopleSoft under Section 12 or
otherwise under this Agreement only as mutually agreed upon in writing by the
Parties at such time, and if no written amendment is reached, then the
incorporation of these software component technologies will not be part of SEA's
responsibilities under this Agreement.
It is not expected that Future Modules will be included in the Project Plans,
although this possibility is not excluded. PeopleSoft may choose to use some of
the time associated with a Maintenance Contract to develop certain Future
Modules relating to [ * ] capabilities or other functions.
PeopleSoft believes that (a) the [ * ] may provide much of the functionality
needed for the [ * ], and (b) that the [ * ] may provide much of the
functionality required for the identification and personal data components of
the [ * ].
Notwithstanding any other clause in Section 3:
The Parties expect that the Integration and Interface scoping will occur in
Phase 1. If there is a need for additional Interface development beyond Phase 1,
the Parties will meet and discuss in good faith a project plan at such time; if
no written amendment is reached, then the incorporation of these technology
changes will not be part of SEA's responsibilities under this Agreement.
With respect to Integration, SEA understands that it should develop the
Derivative Software with the goal of achieving as much Integration as possible
between the Derivative Software and the then current Software.
PeopleSoft may be required to modify the Software to provide the proper hooks to
the Interface. All additional programming and third party licenses as reasonably
determined by PeopleSoft in connection with the Interface shall be performed or
obtained by PeopleSoft at its expense and cost. Any expenses and costs incurred
by PeopleSoft in order to develop the Interfaces shall not be deemed Project
Funding and shall not be recoverable by PeopleSoft under Section 12 or otherwise
under this Agreement.
3.1 PHASE 1. PROJECT INITIATION/GENERAL ARCHITECTURE.
(a) DURATION. The approximate duration of Phase 1 shall be the first [ * ]
commencing on the Effective Date.
(b) RESPONSIBILITIES OF PEOPLESOFT DURING PHASE 1 AT PEOPLESOFT'S COST AND
EXPENSE:
PeopleSoft will:
(i) Be responsible for defining the requirements necessary to support
the Interfaces and Portings.
(ii) Use all reasonable commercial efforts to provide standard and
customary PeopleSoft training in PeopleTools and SQL/SQR on a timely basis to
all existing and new SEA employees assigned by SEA to work on the Project.
(iii) Commence to use all reasonable commercial judgment and efforts to
market the Derivative Software to potential clients.
(iv) Establish and maintain the Development Environment as further set
forth in Section 5 below.
(v) Establish and maintain Beta Sites, only as described in Section 4.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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(vi) Provide technical support in accordance with Section 6.
(vii) Determine the specific requirements for the Documentation.
(c) RESPONSIBILITIES OF LLC DURING PHASE 1
LLC will:
Provide Project Funding in accordance with Section 7 and reimbursement
of the Development Environment as provided in Section 5.
(d) RESPONSIBILITIES OF SEA DURING PHASE 1 TO BE PAID BY SEA WITH PROJECT
FUNDING:
SEA will:
(i) Utilize the services of up to [ * ] SEA employees or subcontractors
(subcontractors must be approved in writing by PeopleSoft) to do the following:
(1) Create a high level data model/database design.
(2) Develop a complete prototype of one or two simple student
information systems functions and data segments to act as a model for systems
development, and as the basis for productivity estimates.
(3) Train a minimum of one of its staff members to perform the
duties of onsite network LAN administration, excluding the cost of class
enrollment and travel.
(4) Define general functions of all system components.
(5) Participate in ongoing Beta Sites review and feedback.
(e) JOINT RESPONSIBILITIES OF PEOPLESOFT, LLC AND SEA DURING PHASE 1.
(i) Preparation of the Project Plans, on or before [ * ] from
the Effective Date, which shall include detailed deliverables, milestones, and
Vesting Milestones.
(ii) Preparation of the Test Plans.
(iii) Determination of an appropriate database to be used as a starting
point for the Derivative Software. The database may be all or a subset of [ * ]
or an empty database.
3.2 PHASE 2. DETAILED DESIGN AND PROTOTYPING.
(a) DURATION. The Parties anticipate that Phase 2 may overlap with Phase 1 and
shall commence during the [ * ] of the Project and end in the [ * ] of the
Project.
(b) RESPONSIBILITIES OF PEOPLESOFT DURING PHASE 2 AT PEOPLESOFT'S COST AND
EXPENSE:
PeopleSoft will:
(i) Use all reasonable commercial efforts to provide all new SEA
personnel involved in the development of Derivative Software who have not
previously been trained by PeopleSoft with standard and customary technical
training in PeopleTools and SQL/SQR on a timely basis.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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(ii) Use all reasonable commercial judgment and efforts to market the
Derivative Software to potential clients.
(iii) Maintain and support Development Environment, as further set
forth in Section 5.
(iv) Maintain and support Beta Sites, only as set forth in Section 4.
(v) Provide technical support in accordance with Section 6.
(c) RESPONSIBILITIES OF LLC DURING PHASE 2
LLC will:
Provide Project Funding in accordance with Section 7 and reimbursement
of the Development Environment as provided in Section 5.
(d) RESPONSIBILITIES OF SEA DURING PHASE 2 TO BE PAID BY SEA WITH PROJECT
FUNDING:
SEA will:
(i) Utilize the services of up to [ * ] SEA employees or subcontractors
to perform the following:
(1) Create all databases.
(2) Develop or create functional prototypes of all modules and
listed functions.
(3) Participate in ongoing Beta Sites review and feedback.
(e) JOINT RESPONSIBILITIES OF PEOPLESOFT, LLC AND SEA DURING PHASE 2:
(i) Refinement of Project Plans, including definition of detailed
requirements for all functions.
(ii) Refinement of Test Plans.
3.3 PHASE 3. DEVELOPMENT.
(a) DURATION. The Parties anticipate that Phase 3 shall commence in the [ * ] of
the Project and end upon Acceptance of the Derivative Software.
(b) RESPONSIBILITIES OF PEOPLESOFT DURING PHASE 3 AT PEOPLESOFT'S COST AND
EXPENSE:
PeopleSoft will:
(i) Complete, as set forth in the Project Plans, the Interfaces between
the Derivative Software and Software.
(ii) Provide all new SEA personnel involved in the development of
Derivative Software who have not previously been trained by PeopleSoft with
standard and customary technical training in PeopleTools and SQL/SQR on a timely
basis.
(iii) Use all reasonable commercial judgment and efforts to market the
Derivative Software to potential clients as provided in the Marketing Agreement.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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(iv) Maintain and support Development Environment as further set forth
in Section 5.
(v) Maintain and support Beta Sites, only as further set forth in
Section 4.
(vi) Provide technical support in accordance with Section 6.
(vii) Provide the publication expertise reasonably necessary as
determined by PeopleSoft, to turn the Documentation and training guide drafts
into final documents ready for delivery to licensees. This effort contemplates
limited textual editing, document formatting and other minor preparations which
are typically expected prior to publication, and which will otherwise conform
the Documentation to PeopleSoft's then current style guides.
(viii) Provide reasonable assistance to SEA in testing the Interfaces
and Derivative Software as may be reasonably requested by SEA from time to time.
(ix) Undertake Acceptance Testing as set forth in Section 15.
(x) Commence Porting activities. In connection with the Porting,
PeopleSoft shall determine the reasonable and necessary additional programming
required to be performed and third party licenses to be obtained by PeopleSoft
at its expense and cost. Porting expenses and costs shall not be deemed Project
Funding and shall not be recoverable by PeopleSoft under Section 12 or otherwise
under this Agreement.
(c) RESPONSIBILITIES OF LLC DURING PHASE 3
LLC WILL:
(i) Provide Project Funding in accordance with Section 7 and
reimbursement of the Development Environment as provided in Section 5.
(ii) To the extent LLC wishes to do so, undertake Acceptance Testing as
set forth in Section 15.
(d) RESPONSIBILITIES OF SEA DURING PHASE 3 TO BE PAID BY SEA WITH PROJECT
FUNDING:
(i) Utilize the services of up to [ * ] SEA employees to perform the
following:
(1) Ongoing prototyping and detail design.
(2) Participate in ongoing Beta Sites review and feedback.
(3) Complete development of the Modules.
(4) Participate in Beta Sites installation and testing.
(5) Complete preparation of Documentation and training guides.
The deliverables contemplated herein shall be a complete draft suitable for
final editing, formatting and publishing.
(6) Complete Derivative Software testing and signoff.
(7) Deliver the Derivative Software to PeopleSoft and LLC.
(8) Provide support for the development of a marketing
strategy and marketing materials. SEA will support marketing activity, but
direct involvement in marketing is outside the scope of the Project. However,
SEA will allocate [ * ] person/days and [ * ] person/days in [ * ] respectively
during the
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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Development Term to assist PeopleSoft (at PeopleSoft's direction) in marketing
activities associated with the licensing of the Derivative Software.
(e) JOINT RESPONSIBILITIES OF PEOPLESOFT, LLC AND SEA DURING PHASE 3:
(i) Finalize Test Plans.
(ii) Derivative Software Acceptance Testing and signoff to occur after
delivery of Software.
4. BETA SITES. PeopleSoft has agreed at its sole expense and cost, which
expenses and costs shall not be deemed Project Funding and shall not be
recoverable under Section 12 or otherwise under this Agreement, to manage
testing sites ("Beta Sites") for the Derivative Software in a manner which is
consistent with beta sites for PeopleSoft Software. The Parties acknowledge that
the quality and involvement of the Beta Sites in the Project is an important
factor in the success of the Project, but it is also a possibility that other
beta-type arrangements will be appropriate, such as a technology council or
consortium. PeopleSoft shall work with SEA's president to identify and qualify
the Beta Sites or other arrangements. All such Beta Site or other arrangement
project management responsibilities typically associated with vendor-packaged
software transactions, and associated fees, costs and expenses shall be the
responsibility of PeopleSoft.
5. DEVELOPMENT ENVIRONMENT. Within the first month following the Effective Date,
PeopleSoft shall, at its sole expense and cost, which expense and costs shall
not be deemed Project Funding and shall not be recoverable under Section 12 or
otherwise under this Agreement, establish a development environment (the
"Development Environment") at SEA's Los Angeles area office, and will support
the Development Environment for the duration of the Development Term and for the
term of any Maintenance Contract. The LLC will reimburse PeopleSoft for all
direct and allocable costs associated with providing and supporting SEA's
Development Environment during the development term. Pursuant to the Marketing
Agreement, all right, title and interest in SEA's Development Environment will
transfer to PeopleSoft upon the earlier of i) the payment of [ * ] in cumulative
payments to LLC or ii) the end of the payment term. SEA shall not (or permit )
transfer, pledge or encumber the Development Environment in any manner.
This Development Environment shall include:
(i) A LAN based network including an RDBMS license (as of the Effective
Date, this shall be Gupta SQLBase), a fully configured server, and [ * ] fully
configured workstations for the developers.
(ii) A complete set of PeopleTools for all developers working on the
Project.
(iii) Any required networking between SEA, PeopleSoft and Beta Sites as
reasonably determined by PeopleSoft.
(iv) Fully installed PeopleSoft Human Resource, PeopleSoft Payroll and
PeopleSoft Financial systems.
(v) Ongoing upgrades to the Development Environment and PeopleSoft's
application systems as reasonably determined by PeopleSoft.
(vi) Any appropriate PeopleSoft technical and applications
documentation as reasonably determined by PeopleSoft.
The Development Environment shall be maintained by PeopleSoft to continue to
incorporate, at PeopleSoft's sole expense and cost, which expense and cost shall
not be deemed Project Funding and shall not be recoverable by PeopleSoft under
Section 12 or otherwise under this Agreement, updated technology, third party
licenses and software relating to all of the foregoing only as determined by
PeopleSoft in its sole judgment and the same may be modified, enhanced or
improved throughout the Term as reasonably determined by PeopleSoft.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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SEA shall be responsible, at its expense and cost, for primary support of the
LAN and shall designate a local SEA LAN administrator who will be the primary
contact between SEA and the PeopleSoft network services group. The cost and
expense of the LAN administrator will be borne by SEA out of the Project
Funding. PeopleSoft shall also: (i) provide local diagnostic support for the
LAN, and (ii) provide backup onsite LAN diagnostic assistance in the event the
network experiences any problems that cannot be corrected remotely or by the
local SEA LAN administrator. During the Development Term and thereafter for as
long as the Maintenance Contract is in force, PeopleSoft will continue to
provide SEA with technical support as specified in Section 6.
6. TECHNICAL SUPPORT. PeopleSoft, with respect to items (ii), (iii), (iv) and
(v), and LLC, with respect to item (i), at their own expense and cost, which
expense and cost shall not be deemed Project Funding and shall not be
recoverable under Section 12 or otherwise under this Agreement, shall provide
SEA with the following technical support:
(i) Involvement on a timely basis, as may be from time to time
reasonably requested by SEA, of senior, knowledgeable personnel for
participation in technical and design reviews, and design consultation.
(ii) Involvement in testing of the Derivative Software pursuant to the
Test Plans.
(iii) Involvement of application specialists only to review the design
of the Derivative Software and to assist only in the review of integrating
existing applications [ * ] with the Derivative Software as may be from time to
time reasonably requested by SEA in writing.
(iv) Mutually agreed upon PeopleTools consulting, including the
enhancement of PeopleTools or other components of the Software if PeopleSoft and
SEA agree such enhancement is required; provided that PeopleSoft shall be solely
responsible for any additional costs and expenses incurred for PeopleSoft's
enhancement of PeopleTools or other components of the Software pursuant to SEA's
reasonable written request, and such additional costs and expenses in any case
shall not be deemed to be Project Funding. The intent behind this subsection is
not to permit a delay in the development of the Derivative Software due to SEA's
request for a PeopleTools enhancement. Rather, the emphasis is only on mutually
agreed upon PeopleTools enhancements that will not delay development of the
Derivative Software.
(v) Porting the Derivative Software to other Targeted Database
Platforms and environments as determined by PeopleSoft.
7. PROJECT FUNDING AND OTHER PEOPLESOFT FUNDING.
7.1 PROJECT FUNDING. The LLC will provide funding (the "Project
Funding") to SEA to finance the Project as set forth in the Funding Schedule
attached hereto as Exhibit "C" and incorporated herein by this reference. SEA
can unilaterally reduce the funding it requires at any time, and if SEA elects
to reduce the funding owed for a particular period, SEA can require that LLC add
the amount of such reduction to any subsequent funding period(s). In no event
shall LLC have an obligation to fund in excess of [ * ] . If the Project Funding
at [ * ] is insufficient to complete the Project, PeopleSoft's and the LLC's
rights shall include termination of this Agreement for convenience under Section
19.1, or obtaining or providing additional funding to keep this Agreement in
effect. The Parties shall negotiate in good faith a commensurate decrease in the
payment rates set forth in Exhibit "D."
Commencing on the Effective Date, the Project Funding payable shall be paid by
LLC (or by PeopleSoft on LLC's behalf) to SEA pursuant to Exhibit "C" to the
following bank account:
[ * ]
All Project Funding is recoverable by PeopleSoft subject to the terms and
conditions of Section 12 hereof.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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7.2 OTHER FUNDING. In addition to the Project Funding, LLC shall be responsible
for items (i) and (ii) and PeopleSoft shall be responsible for items (iii), (iv)
and (v) as follows:
(i) The reasonable costs and expenses of network/phone lines between
SEA, PeopleSoft and the Beta Sites determined to be reasonably required by
PeopleSoft and only as approved in advance by PeopleSoft or LLC in writing.
(ii) All reasonable travel and lodging costs and expenses directly
incurred by SEA during the Development Term in furtherance of this Agreement,
including travel to Northern California (including, without limitation, travel
to Pleasanton and Walnut Creek), to Beta Sites, and to meetings and conferences
as determined by PeopleSoft. All such travel and lodging costs and expenses must
be pre-approved in writing by PeopleSoft or LLC.
(iii) The costs and expenses of programming or obtaining any Interface
to the Software.
(iv) The costs and expenses attributable to any change requested by
PeopleSoft under Section 14.
(v) The costs and expenses attributable to Porting the Derivative
Software to the Targeted Database Platforms.
Nothing contained in this Section 7.2 shall be deemed to be Project Funding, and
nothing contained in this Section 7.2 shall be recoverable by PeopleSoft or LLC
from SEA under Section 12 or otherwise under this Agreement.
8. SEA FUNDING. SEA is responsible for all expenses related to recruiting the
SEA team. In addition, SEA is responsible for all overhead expenses related to
the operation of the development team and the development site, excluding the
costs and expenses borne by PeopleSoft or LLC under Section 7 and the costs and
expenses of the Development Environment borne by PeopleSoft or LLC under Section
5 of this Agreement.
9. KEY PERSONNEL. SEA recognizes that PeopleSoft and LLC have entered into this
Agreement primarily to obtain the services of the Key Personnel. SEA agrees to
use all reasonable efforts to ensure that the Key Personnel will devote
substantially all of their efforts to the Project during the Development Term.
The Parties agree that should any Key Personnel for any reason become
unavailable for more than twenty (20) consecutive days to devote substantially
all of his/her efforts to the Project during the Development Term, SEA shall use
its best efforts (at SEA's sole expense) to expeditiously replace the former
employee with someone else to be approved by PeopleSoft and LLC, which approval
cannot be unreasonably withheld. Should more than two Key Personnel become
concurrently unavailable for more than twenty (20) consecutive days to devote
substantially all of his/her efforts to the Project during the Development Term,
irrespective of whether SEA replaces such Key Personnel, this will constitute a
material breach of this Agreement by SEA. During the thirty day period after
notice of such material breach issued by PeopleSoft or LLC to SEA, SEA shall
have the opportunity to convince PeopleSoft and LLC that this will not
materially affect the Project during the Development Term, which explanation by
SEA can be accepted or rejected by PeopleSoft and LLC in their sole discretion.
10. PAYMENTS/DISTRIBUTORS.
10.1 PAYMENTS. PeopleSoft shall pay SEA during the Term for each sale, license
or other conveyance or transfer of the Derivative Software or any subset thereof
by PeopleSoft based on the appropriate payment percentage set forth in Exhibit
"D." Exhibit "D" states the payment percentages during the Term at nine
different levels of Project Funding. The payment percentage is determined based
on the date that the license contract is signed by a client, not the date that
the fees are invoiced. Except in the event of early termination as set forth in
Section 19, the appropriate payment percentages will be determined at the end of
the Development Term, and will
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be based solely on the Payment Rate Schedule associated with the aggregate
actual funding paid to SEA as of the end of the Development Term. If the actual
Project Funding falls in between two Project Funding Levels, the higher Project
Funding Level amount will be used to determine the applicable Payment Rate
Schedule. Should PeopleSoft's exclusive distribution rights under the Marketing
Agreement terminate, PeopleSoft may continue to distribute the Derivative
Software on a non-exclusive basis (in which case all payment obligations to SEA
will continue) and the LLC may distribute and/or appoint additional distributors
of the Derivative Software subject to SEA's written approval which will not be
unreasonably withheld. In considering such request, SEA is entitled to give full
consideration to the impact that approval of the distributor will have on SEA's
status as the Preferred Implementation Partner per Section 30 hereof and
interest in future payments per this Section 10. Should LLC distribute or
appoint distributors for the Derivative Software during the Term, LLC shall pay
SEA for each sale, license or other conveyance or transfer of the Derivative
Software or any subset thereof by LLC or additional distributors based on the
appropriate payment percentage set forth in Exhibit "D".
The payment rate shall be determined in accordance with Exhibit D based upon the
actual Project Funding received by SEA. Amounts reported and/or paid during the
Development Term will be based on the lowest applicable payment percentage for
that year. When the final actual amount of Project Funding is determined, a lump
sum adjustment will be made if the payment percentage used should have been
higher.
As an example only, if the Project Funding actually paid by LLC to SEA under
Section 7 hereof is [ * ], then the amount to be paid by PeopleSoft to SEA, for
a sale made in the fourth year of the Term, is [ * ] of the Net License Fee
attributable to such sale. Except as expressly set forth elsewhere herein, after
the Term, PeopleSoft and LLC shall have no further payment obligation to SEA.
10.2 DISTRIBUTORS. In the event PeopleSoft or LLC (upon termination of
PeopleSoft's exclusive distribution rights under the Marketing Agreement) wishes
to appoint additional distributors of the Derivative Software, the Parties will
meet and confer regarding such appointment. Any appointment of additional
distributors of the Derivative Software is subject to SEA's written approval
which will not be unreasonably withheld. In considering such a request, SEA is
entitled to give full consideration to the impact that approval of the
distributor will have on SEA's status as the Preferred Implementation Partner
per Section 30 hereof and interest in future payments per this section 10.
Regardless of whether the Derivative Software is distributed by PeopleSoft, LLC
or their distributors, PeopleSoft and LLC will be obligated to pay SEA their
respective payments due on any Net License Fees attributable to the Derivative
Software. In addition, any agreements between PeopleSoft or LLC and their
distributors shall obligate the distributor to pay SEA any amounts due SEA which
PeopleSoft or LLC have failed to pay on the distributors behalf.
11. LUMP SUM PAYMENT. If SEA, LLC and PeopleSoft mutually agree, the Parties may
elect to terminate this Agreement in exchange for the payment by PeopleSoft to
SEA of a lump sum payment, in an amount mutually agreed upon between the Parties
in writing. Payment of the lump sum payment shall terminate all of SEA's and
PeopleSoft's obligations hereunder, except for the obligations of SEA set forth
in Sections 11, 23, 24, and 38 hereof, and except for the obligations of
PeopleSoft set forth in Sections 11, 25 and 30 hereof. If SEA and PeopleSoft are
unable to amicably agree as to the amount of the lump sum payment, or if
PeopleSoft fails to pay such lump sum payment in full to SEA, then this Section
11 shall be of no force or effect and the Agreement shall remain in effect.
12. RECOVERY OF PROJECT FUNDING. All Project Funding will be recoverable
(subject to the terms and conditions set forth below), by PeopleSoft or, upon
termination of PeopleSoft's exclusive distribution rights, LLC from payments
earned by SEA under Section 10 hereof. If PeopleSoft and LLC both distribute the
Derivative Software and prepare a quarterly report pursuant to Section 13.2
which would result in a cumulative recovery of Project Funding which exceeds
total Project Funding, then each party's recovery for that quarter will be
subject to a pro-rata adjustment which would result in cumulative payments equal
to total Project Funding and a recovery of Project Funding for that quarter for
each party equal that party's proportionate share of payments reported for that
quarter. Except as set forth below, PeopleSoft and LLC will retain [ * ] of
payments otherwise payable to SEA under Section 10 hereof, up to the total
amount of Project Funding:
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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(i) During the [ * ] year of the Term, the first [ * ] in payments
payable under Section 10 hereof shall not be subject to recovery by PeopleSoft
and LLC.
(ii) During the [ * ] year of the Term, the first [ * ] in payments
payable under Section 10 hereof shall not be subject to recovery by PeopleSoft
and LLC.
Except as expressly provided in this Agreement, the foregoing represents the
only means under this Agreement by which PeopleSoft and LLC may recover any of
the Project Funding from SEA, its shareholders, directors, officers, employees,
representatives, subcontractors, agents, or any other Project participant (other
than PeopleSoft, LLC or their assigns). If this payback structure does not
recover all Project Funding, SEA, its shareholders, directors, officers,
employees, representatives, subcontractors, agents and all Project participants
(other than PeopleSoft, LLC or their assigns) will bear no liability for
repayment of the Project Funding under this Agreement. PeopleSoft and LLC shall
have no right to recoup any other funds expended by PeopleSoft and LLC under
this Agreement or provided by PeopleSoft and LLC to SEA under this Agreement
other than as set forth above with respect to the Project Funding.
13. RECORDS AND REPORTS/PAYMENTS.
13.1 PEOPLESOFT RECORDS. PeopleSoft and LLC shall keep full, true and accurate
records and accounts in accordance with generally accepted accounting principles
to show the amounts payable to SEA. These records and accounts shall include for
each copy of Derivative Software or any Module licensed, sold, or otherwise
conveyed or distributed:
(i) The name and address of each recipient/purchaser/licensee.
(ii) The date of shipment and date of invoice from each
recipient/purchaser/licensee; and
(iii) A copy of each signed end user license agreement and other
applicable documents of transfer or conveyance.
PeopleSoft and LLC shall keep these records at their principal place of
business. At SEA's direction and expense, an independent certified public
accountant or public accounting firm shall have the right to conduct an audit of
such records once per calendar year to determine PeopleSoft's and LLC's
compliance with this Agreement. In the event any such audit reveals that
PeopleSoft or LLC has understated the amount of fees that PeopleSoft or LLC is
obligated to pay SEA under this Agreement by more than five percent (5%),
PeopleSoft or LLC shall pay, in addition to any fees contractually due all
reasonable costs, expenses and fees associated with the audit.
13.2 PAYMENTS. Except as otherwise provided in Section 10, thirty (30) days
after the end of each calendar quarter during the Term, PeopleSoft and LLC shall
(a) provide SEA with a quarterly report in accordance with its standard
reporting practices that is structured as a summary report and which also
provides the information set forth above in 13.1 (i), (ii) and (iii) above, with
accessibility to detailed backup information, and (b) pay SEA the amounts
associated with all applicable Net License Fees which are invoiced in such
quarter to end user licensees. The quarterly report provided by PeopleSoft and
LLC to SEA hereunder shall in each case set forth information concerning the
Module(s) licensed, customer name, ship date, quantity, standard list price,
actual fee received, reductions for bundled services, Net License Fee applicable
payment rate and the actual amount. All payments and calculations made hereunder
shall be in United States dollars.
The Parties shall proportionately share the risk of Derivative Software end user
licensee bad debts. Therefore, PeopleSoft and LLC shall be entitled to offset
against any future payment due under Section 10 to SEA the amount of any amount
previously paid to SEA for a Derivative Software end user licensee which is
subsequently and reasonably deemed uncollectable by PeopleSoft or LLC with all
collection efforts ceasing.
13.3 SEA RECORDS. SEA shall keep full, true and accurate records and accounts in
accordance with generally accepted accounting principles to show the expenditure
of the Project Funding. SEA shall keep these records at
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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SEA's principal place of business. PeopleSoft or LLC shall have the right to
conduct an audit, at PeopleSoft's or LLC's expense, of such records once per
calendar year.
14. CHANGES. After the completion in Phase 1 of the initial draft of the Test
Plans, PeopleSoft and LLC may from time to time request reasonable changes in
the Project by giving SEA written notice of such requested change. Within a
reasonable number of days, not to exceed five (5) business days following
receipt of such written notice of change, the following procedures shall govern:
(i) SEA will assess the impact of the desired change(s) on the
milestones to be reached, the timeframe for completion, the costs of the
Project, and any further areas which, in the opinion of SEA, are likely to be
affected by the desired change(s).
(ii) SEA will notify PeopleSoft and LLC, in writing, of its estimates
(which estimates shall not be binding on SEA if so labeled) regarding the items
set forth in paragraph (i) above and shall await written instructions from
PeopleSoft and LLC upon whether or not to proceed with the change(s). PeopleSoft
and LLC shall respond in writing within ten (10) days of receipt of such notice,
advising SEA whether or not to proceed with the change(s).
(iii) In the event PeopleSoft or LLC wishes to incorporate PeopleSoft's
or LLC's requested change(s), such change(s) hereunder will be incorporated into
the Project on such terms and conditions as the Parties may agree by a written
amendment to this Agreement duly executed by the Parties hereto. If the Parties
cannot mutually agree in writing on the terms and conditions, then the requested
change(s) will not be incorporated into the Project.
15. ACCEPTANCE TESTING. PeopleSoft's and LLC's Acceptance of the Derivative
Software shall occur after PeopleSoft and LLC review the results of the testing
of the Derivative Software based on the mutually agreed upon Test Plans.
PeopleSoft and LLC will review and approve test results within the time frame to
be reasonably determined in the Test Plans. Within a reasonable time frame not
to exceed ninety (90) days, SEA will fix errors identified during development
and Acceptance Testing. PeopleSoft and LLC grant the following individuals full
authority to agree to test plans, and to review and approve test results: LLC's
General Manager (currently Paul Salsgiver), PeopleSoft's General Manager of
Higher Education (currently Paul Salsgiver), PeopleSoft's Public Sector
Development Manager [ * ] , and PeopleSoft's Student Administration Product Line
Manager [ * ] . Acceptance of the Derivative Software will occur upon the
approval of both the LLC's General Manager and PeopleSoft's General Manager of
Higher Education,
Nothing contained herein shall render SEA liable or responsible for the
correction or cost to correct any errors to the extent directly attributable to
the Software, Interface or Porting. Within a reasonable time period, PeopleSoft
agrees to, at PeopleSoft's expense and cost, which expense and cost shall not be
deemed Project Funding and shall not be recoverable under Section 12 or
otherwise under this Agreement, fix errors identified and agreed upon in writing
between the Parties during development and Acceptance Testing to the extent
directly attributable to the Software, any Interface, or Porting. Nothing in
Section 15 shall limit PeopleSoft's and LLC's right to terminate this Agreement
for convenience as set forth in Section 19.1.
16. MONTHLY PROGRESS REPORTS AND BACKUP. Within thirty (30) days after the end
of each calendar month, SEA shall furnish PeopleSoft and LLC with written
progress reports, reflecting its activity under this Agreement during the prior
month. The monthly progress reports shall contain such information and be in the
format that PeopleSoft and LLC shall reasonably request. SEA will backup the
development databases on the LAN provided by PeopleSoft under Section 5 hereof
daily and every week during the Development Term will provide PeopleSoft and LLC
with a copy of the entire backup.
17. PROJECT MILESTONES/DELAYS.
17.1 During Phase 1 and as refined during Phase 2, both SEA, LLC and PeopleSoft
will define and mutually agree upon development milestones to be set forth in
the Project Plans.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
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SEA, LLC and PeopleSoft will also define and mutually agree in writing upon the
milestones to be set forth in the Project Plans that must be met in order for
SEA to vest in a payment stream ("Vesting Milestones"). The Vesting Milestone
for a particular time in the Project will be based only on the deliverables
actually delivered by SEA to PeopleSoft and LLC.
In the Project Plans, SEA, LLC and PeopleSoft shall set forth the percentage of
the total Project represented by each Vesting Milestone, and SEA will be vested
in that percentage of the payment stream as each Vesting Milestone achieves
Acceptance, with the payment schedule percentage to be determined using the
following implied funding level formula ("Implied Funding Level Formula):
Actual funding to date x [ * ] = Implied Project Funding
Scheduled payments to date
Exhibit "G" provides a hypothetical example for illustrative purposes only.
One of the Vesting Milestones may include PeopleSoft's and LLC's Acceptance of a
functional prototype of all the Module functions.
All Parties agree to work in good faith to ensure that all milestones are
achieved in the jointly agreed upon time frames.
17.2 In the event that SEA or PeopleSoft misses any milestone assigned to them
in the Project Plans, then at the time of missing such milestone, the Parties
will meet and confer to determine the reasonable necessity, if any, for any
extension of the applicable deadlines for any of the other's milestones which
the Parties reasonably believe are dependent on the milestone which was missed.
Any and all such Project Plan modifications and associated agreements must be
agreed upon in a formal written amendment to this Agreement to be effective.
17.3 Notwithstanding Sections 17.1 and 17.2, in the event that SEA or PeopleSoft
misses any milestone assigned to them in the Project Plans and fails to complete
the milestone within thirty (30) days from the milestone's original target date
or subsequently modified target date as set forth in an agreed upon writing,
then unless the Parties otherwise agree in writing within such thirty (30) day
cure period, such missed milestone(s) may be considered to be a material breach
subject to termination as set forth in Section 19.2 or 19.1 and such termination
in accordance with Section 19.2 or 19.1 shall be the sole remedy.
18. PROJECT COMPLETION DATE. SEA and PeopleSoft shall commence the Project on
the Effective Date, and SEA shall use all commercially reasonable efforts to
deliver the Derivative Software to PeopleSoft and LLC for Acceptance Testing in
accordance with the Test Plans on or before [ * ]. Time is of the essence
regarding this Agreement.
19. TERMINATION.
19.1 TERMINATION FOR CONVENIENCE BY LLC.
(i) If LLC, in its sole discretion, terminates this Agreement, for any
reason other than for a material breach on the part of SEA, at any point prior
to thirty (30) days following LLC's receipt of the Project Plans specified in
Phase 1, LLC's sole obligation, other than with respect to the payment of any
vested payments associated with the applicable Vested Milestones as set forth in
Section 17 and payment of any pro-rated Project Funding due but not yet paid
prior to the date of termination, shall be to pay SEA a [ * ] cancellation fee
plus the actual lease cancellation costs paid by SEA for termination of its
office lease up to a maximum of [ * ].
Payments will be calculated using Exhibit "D", the Vesting Milestone
percentage(s) of the Project and the Implied Funding Level Formula. In the event
of a termination for convenience, the [ * ] cancellation fee paid by LLC shall
be recoverable and shall constitute Project Funding. The scheduled Project
Funding payments made by
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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LLC to SEA incurred prior to cancellation are recoverable by PeopleSoft and LLC
against PeopleSoft's and LLC's Section 10 payment obligations.
If LLC terminates this Agreement for convenience due to the failure to agree on
a Project Plan or if LLC terminates this Agreement for convenience with a belief
that an unfavorable market exists for the Derivative Software, PeopleSoft and
LLC will nevertheless negotiate in good faith to offer SEA the ability to act as
a non-exclusive VAR for the Derivative Software in accordance with PeopleSoft's
then current value-added-remarketer program for the higher education market.
(ii) After the thirty (30) day period set forth in paragraph (i) above
has elapsed, if LLC terminates this Agreement for convenience, and not due to a
material breach on the part of SEA, LLC's sole obligation to SEA, other than
with respect to payment of any vested payments set forth in Section 17, and
payment of any pro-rated Project Funding due but not yet paid prior to the date
of termination, will be to pay SEA [ * ] months expense and cost for the Key
Personnel, [ * ] months expense and cost for other developers, and [ * ] month
expense for administrative personnel at the point of termination plus the actual
lease cancellation costs paid by SEA for termination of its office lease up to a
maximum of [ * ]. This expense and cost shall be calculated at [ * ] per month
for each Key Personnel, [ * ] per month for other developers, and [ * ] per
month for administrative personnel. In no event shall such termination amount
exceed [ * ] . All termination payments made by LLC shall be Project Funding and
subject to recovery against future Section 10 payments payable to SEA, but shall
be excluded from the Implied Funding Level Formula.
(iii) LLC shall not be entitled to terminate this Agreement for
convenience after [ * ], which is [ * ] months before the end of the Development
Term. The end of the Development Term is [ * ].
19.2 TERMINATION FOR CAUSE.
(i) Any party may terminate this Agreement and seek any available
remedies at law or equity, in the event one of the other Parties has committed
fraud under this Agreement or intentionally violates any other's intellectual
property rights.
(ii) If any party materially breaches this Agreement and does not
remedy such breach within thirty (30) days after receipt of written notice from
one of the other Parties, the other Parties shall have the right, at its option,
to:
(1) Suspend performance or payment until such breach is remedied, without
excusing the breaching party from any obligation arising prior to the date of
such election;
(2) Cancel this Agreement, if the material breach is not a performance
breach by SEA for failure to achieve any Vesting Milestone, with no further
obligation except for SEA's return to LLC of any unexpended Project Funding and
the Development Environment, without excusing the breaching party from any
obligation arising prior to the date of such cancellation; or
(3) Seek a combination of (1) and (2) and seek those remedies available at
law or equity, except to the extent limited by the terms of this Agreement.
(iii) In the event SEA terminates this Agreement due to a material
breach by PeopleSoft or LLC, and provided SEA is not in material breach, SEA
only retains its rights to any vested payments under this Agreement and SEA's
sole remedy shall only be to retain all Project Funding received by SEA and
LLC's sole obligation to SEA, other than with respect to payment of any vested
payments set forth in Section 17, and payment of any pro-rated Project Funding
due but not yet paid prior to the date of termination, will be only to pay SEA
[ * ] months expense and cost for the Key Personnel, [ * ] months expense and
cost for other developers, and [ * ]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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[ * ] month expense for administrative personnel at the point of termination of
the Agreement, plus the actual lease cancellation costs paid by SEA for
termination of its office lease up to a maximum of [ * ] . This expense shall be
calculated at [ * ] per month for each Key Personnel, [ * ] per month for other
developers, and [ * ] per month for administrative personnel. In no event shall
such termination payment amount exceed [ * ] . All termination payments made by
LLC shall be Project Funding and subject to recovery against future Section 10
Payments to SEA, but shall be excluded from the Implied Funding Level Formula.
In any event, SEA shall not be entitled to terminate this Agreement for
convenience and SEA may only terminate this Agreement for cause as set forth in
this Section 19.2.
(iv) During the Development Term, in the event PeopleSoft or LLC
terminates this Agreement due to SEA's decision to work for another person or
entity to develop software competitive to the Derivative Software, PeopleSoft's
and LLC's damages shall be limited to the amount of Project Funding paid and
SEA's rights to continue to receive future payments shall immediately cease.
(v) During the Development Term, in the event PeopleSoft or LLC terminates
this Agreement due to SEA's failure to achieve any Vesting Milestone within
sixty (60) days of the agreed upon date in the Project Plans, SEA's rights to
continue to receive future payments under this Agreement shall continue, subject
to offset in the amount of the Project Funding paid by LLC to SEA and SEA shall
be entitled to receive payment of any pro-rated Project Funding due under the
Project Plans but not yet paid prior to the date of written notice of default
due to failure to achieve the Vesting Milestone. LLC's obligation to provide
Project Funding is suspended at the time of issuance of a notice of default due
to a failure of SEA to achieve a Vesting Milestone and is revived only upon cure
of the material breach.
20. REPRESENTATION AND WARRANTIES.
20.1 SERVICES. SEA represents and warrants to PeopleSoft and LLC that during the
Development Term and the term of any Maintenance Contract, the services to be
performed by SEA hereunder shall be performed in a timely, good, professional,
workmanlike and competent manner. PeopleSoft represents and warrants to SEA that
during the Development Term and the term of any Maintenance Contract, the
services to be performed by PeopleSoft hereunder shall be performed in a timely,
good, professional, workmanlike and competent manner.
20.2 ORIGINAL DEVELOPMENT. SEA represents and warrants to PeopleSoft and LLC
that the Modules will be of original development by SEA, will be specifically
developed for this Agreement and will not infringe upon or violate any United
States or Canadian patent, copyright, trade secret or other United States or
Canadian proprietary right of any third party. PeopleSoft represents and
warrants to SEA and LLC that the Software, Interfaces and Porting will be of
original development by PeopleSoft and will not infringe upon or violate any
United States or Canadian patent, copyright, trade secret or other United States
or Canadian proprietary right of any third party.
20.3 COMPLIANCE WITH APPLICABLE LAWS. SEA warrants to PeopleSoft and LLC that to
the best knowledge of SEA, the Modules delivered to PeopleSoft and LLC hereunder
and performance by SEA of its obligations hereunder, shall be in compliance with
all applicable laws, rules and regulations as of the date of delivery thereof.
PeopleSoft warrants to SEA and LLC that to the best knowledge of PeopleSoft, the
Software, the Porting, and the Interfaces delivered to SEA hereunder and
performance by PeopleSoft of its obligations hereunder, shall be in compliance
with all applicable laws, rules and regulations as of the date of delivery
thereof.
20.4 NO THREATENED LITIGATION. All Parties represent to the others that to the
best knowledge of such party or its key developers, such party and its key
developers are not involved as a plaintiff or defendant in any litigation and is
not aware of any threatened litigation in which it could become involved that is
likely to materially or adversely affect either party's rights or obligations
under this Agreement.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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20.5 AUTHORITY. All Parties represent and warrant to the others that it has the
full power and authority to enter into this Agreement and that any
representative of such party who signs this Agreement has full power and
authority to enter into this Agreement.
20.6 LLC and PeopleSoft represent and warrant that LLC shall have an initial
capitalization of at least [ * ] and that the LLC will not extend loans to any
member(s), make cash distributions to any member(s) during the Development Term
or engage in any other transactions in which the initial capital of LLC is paid
to its members during the Development Term without the prior written consent of
SEA, such consent not to be unreasonably withheld.
21. MODULES AND DERIVATIVE SOFTWARE PROVIDED BY SEA TO PEOPLESOFT AND LLC ON "AS
IS" BASIS: NO MAINTENANCE, SUPPORT OR WARRANTY OBLIGATIONS OF SEA.
21.1 EXCEPT AS MAY BE EXPRESSLY SET FORTH IN A MAINTENANCE CONTRACT EXECUTED BY
SEA AND PEOPLESOFT OR LLC, AFTER THE EXPIRATION OF THE DEVELOPMENT TERM, THE
MODULES AND DERIVATIVE SOFTWARE ARE PROVIDED TO PEOPLESOFT AND LLC "AS IS"
WITHOUT WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SEA SHALL
HAVE NO OBLIGATION TO PROVIDE ANY MAINTENANCE, SUPPORT OR WARRANTY SERVICE TO
PEOPLESOFT, LLC, ANY THIRD PARTY OR ANY END USER OF THE MODULES AND DERIVATIVE
SOFTWARE OR TO ANY OTHER THIRD PARTY MAKING A CLAIM IN WHOLE OR IN PART BASED
UPON THE MODULES AND DERIVATIVE SOFTWARE.
22. LIMITED LIABILITY.
22.1 EXCEPT FOR THE RESPECTIVE OBLIGATIONS UNDER SECTIONS 24 AND 25, VIOLATIONS
OF ANY PARTY'S INTELLECTUAL PROPERTY RIGHTS FOR WHICH NO LIMITATION ON DAMAGES
SHALL APPLY, AND PEOPLESOFT'S OR LLC'S LIABILITY TO SEA FOR VESTED PAYMENTS
UNDER SECTION 17 AND PROJECT FUNDING THAT IS PAYABLE UNDER SECTION 7 PRIOR TO
ANY TERMINATION OF THIS AGREEMENT, THE LIABILITY OF ANY PARTY FOR DAMAGES UNDER
THIS AGREEMENT SHALL BE LIMITED TO ACTUAL AMOUNTS PAID BY PEOPLESOFT OR LLC TO
SEA UNDER THIS AGREEMENT.
IN NO EVENT SHALL ANY PARTY BE LIABLE TO THE OTHER PARTIES FOR INCIDENTAL,
CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO LOST
PROFITS (OTHER THAN VESTED PAYMENTS UNDER SECTION 17 EARNED BY SEA), EVEN IF THE
OTHER PARTY HAS BEEN INFORMED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING, AND
EVEN IF THE LIMITED REMEDIES STATED HEREIN FAIL IN THEIR ESSENTIAL PURPOSE.
22.2 NO PASS THROUGH OF WARRANTY OBLIGATIONS. SEA AND LLC DO NOT MAKE BY VIRTUE
OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN, AND SEA AND LLC
HEREBY EXPRESSLY DISCLAIM, ANY REPRESENTATION OR WARRANTY TO ANY END USER,
DEALER, DISTRIBUTOR OR THIRD PARTY (INCLUDING, WITHOUT LIMITATION, CUSTOMERS OF
PEOPLESOFT), WITH RESPECT TO ANY MODULE OR ANY DERIVATIVE SOFTWARE ACQUIRED BY
PEOPLESOFT PURSUANT TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
PEOPLESOFT SHALL TAKE ALL MEASURES REASONABLY NECESSARY TO ENSURE THAT NEITHER
IT NOR ANY OF ITS EMPLOYEES OR AGENTS MAKES OR PASSES ON, ANY SUCH
REPRESENTATION OR WARRANTY ON BEHALF OF SEA OR LLC TO ANY END USER, DEALER,
DISTRIBUTOR OR THIRD PARTY (INCLUDING, WITHOUT LIMITATION, CUSTOMERS OF
PEOPLESOFT).
23. OWNERSHIP OF DERIVATIVE SOFTWARE.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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23.1 SEA and PeopleSoft agree that all or any portion of the Modules, Derivative
Software and design documents, flow charts and all other related development
documents, and all patents and copyrights to each of the items therein, shall be
the exclusive property of LLC. PeopleSoft, SEA or any of its agents,
subcontractors or consultants shall have no ownership interest in the Modules,
Derivative Software or development documents. SEA and PeopleSoft agree that the
Derivative Software, Modules and development documents shall be considered a
"work for hire" for the benefit of LLC and any of its assigns pursuant to this
Agreement. Upon LLC's reasonable request, SEA and PeopleSoft agree to execute
documents, including, but not limited to, copyright assignment documents, and to
perform such acts as may be deemed necessary or advisable to confirm in LLC all
right, title and interest of SEA and PeopleSoft in and to the Modules,
Derivative Software and development documents, including all patent
applications, patents and copyrights thereon, and to enable and assist LLC in
procuring, maintaining, enforcing and defending patents, copyrights and other
applicable statutory protection on the Modules, development documents and the
Derivative Software. Except as set forth elsewhere in this Agreement, SEA and
PeopleSoft hereby irrevocably assign to LLC in perpetuity all right, title and
interest in the Derivative Software, Modules and development documents that SEA
and PeopleSoft may now have or later acquire directly through SEA's development
of the Derivative Software and Modules in accordance with the Project Plans,
including any Moral Rights. SEA and PeopleSoft further agree to enter into any
and all necessary agreements with its employees, subcontractors and agents who
perform services under this Agreement and to take any and all other reasonable
and necessary measures to effect such complete ownership in LLC. SEA and
PeopleSoft irrevocably waives and relinquishes, for itself and its employees and
agents, any claims of Moral Rights with respect to any and all uses of the
Derivative Software, Modules and development documents and SEA and PeopleSoft
will take all reasonable actions, including taking legal action against such
employees or agents to ensure that neither it nor its employees/agents shall
assert any such claims with respect to such Moral Rights. Nothing set forth
herein shall prevent PeopleSoft, SEA or their employees from using or exploiting
information which (i) is not Confidential Information, or (ii) is not part of
the Derivative Software, Modules or development documents.
23.2 Pursuant to the Maintenance and Support Services Terms and Conditions
(Exhibit F), all Parties acknowledge that, after the development term, the
Derivative Software will be subject to maintenance, updates and enhancements as
further described in Exhibit F. The Parties anticipate that such maintenance,
updates and enhancements will be so significant that after [ * ] years the
Derivative Software will have evolved to substantially new software as compared
to the Derivative Software released at the end of the Development Term. If the
Maintenance and Support Services and all enhancements are funded principally by
PeopleSoft and PeopleSoft has retained its exclusive distribution rights under
the Marketing Agreement, then, pursuant to the Marketing Agreement, PeopleSoft
will receive all right, title and ownership as described in Section 23.1 to the
Derivative Software upon the earlier of i) the payment of [ * ] in cumulative
payments to LLC (but such title transfer shall not alter PeopleSoft's payment
obligations to LLC under the Marketing Agreement), or ii) the end of the payment
term. If the Maintenance and Support Services and all enhancements are funded by
PeopleSoft and LLC, and/or PeopleSoft is no longer the exclusive distributor of
the Derivative Software, the LLC will continue to have all right, title and
ownership in the Derivative Software as of the end of the Development Term and
PeopleSoft and the LLC will [ * ] ownership interest in any modifications,
enhancements or other changes made to the Derivative Software subsequent to the
Development Term until PeopleSoft has paid [ * ] in cumulative payments to LLC
at which time PeopleSoft will receive all right, title and ownership as
described in Section 23.1 to the Derivative Software
24. INDEMNIFICATION BY SEA. Notwithstanding Section 22.1, SEA shall indemnify
and defend PeopleSoft and LLC against any claims (i) that all or any portion of
the Derivative Software and Modules developed by SEA infringe any United States
or Canadian patent, copyright or trade secret; (ii) attributable to any act of
SEA in its creation of the Derivative Software or Modules; or (iii) relating to
third party licenses or other agreements between SEA and any third party, in
each case provided that SEA is given prompt notice of such claim and is given
information, reasonable assistance, and authority to defend or settle the claim.
In the defense or settlement of the claim, SEA may obtain for PeopleSoft and LLC
the right to continue using and marketing the Derivative Software and Modules or
replace or modify Derivative Software and Modules so that it becomes
noninfringing while giving substantially equivalent performance. SEA shall have
no liability to the extent the alleged infringement is based on: (i) a
modification of Derivative Software or Modules by anyone other than SEA or its
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 20
agents, consultants or subcontractors under SEA's direction; (ii) the use of the
Derivative Software or Modules other than in accordance with the Documentation;
(iii) the Software; (iv) any Interface; (v) any Porting. SEA shall have no
liability to the extent the alleged infringement is based on claims covered by
Section 25 hereof. However, each party shall be liable to the others in the
percentage amount of their determined liability.
25. INDEMNIFICATION BY PEOPLESOFT. Notwithstanding Section 22.1, PeopleSoft
shall indemnify and defend SEA and LLC against any claims (i) that all or any
portion of the Software, the Interfaces or the Porting developed by PeopleSoft
infringe any United States or Canadian patent, copyright or trade secret; (ii)
attributable to any act of PeopleSoft in its creation, distribution or
maintenance of any of the Software, Derivative Software, Documentation, Modules,
Development Environment and Beta Sites; or (iii) relating to third party
licenses or other agreements between PeopleSoft and any third party, in each
case provided that PeopleSoft is given prompt notice of such claim and is given
information, reasonable assistance, and authority to defend or settle the claim.
PeopleSoft shall have no liability to the extent the alleged infringement is
based on claims covered by Section 24 hereof. However, each party shall be
liable to the others in the percentage amount of their determined liability.
26. LICENSE. During the Term only, PeopleSoft and LLC grant SEA a non-exclusive,
nontransferable license to use a reasonable number of copies of the Software
solely for promotion, demonstration or internal use purposes connected with this
Agreement or in conjunction with SEA's development, support, demonstration,
testing (and all other similar supporting tasks) of the Derivative Software.
SEA's use of the Software shall be in accordance with the terms and conditions
of PeopleSoft's standard license agreement, a copy of which is attached hereto
as Exhibit "E" and in the event of conflict between the license in this
Agreement and Exhibit "E", the Agreement shall control.
27. MAINTENANCE CONTRACT. SEA and PeopleSoft and, upon termination of
PeopleSoft's exclusive distribution rights under the Marketing Agreement, LLC
agree to negotiate in good faith the terms and conditions of a Maintenance
Contract for the Derivative Software. The Parties shall use reasonable efforts
to finalize the Maintenance Contract at least six (6) months prior to the
initial shipment of the beta versions of the Derivative Software and may include
terms and conditions similar to those identified in Exhibit F attached hereto.
28. NONCOMPETITION.
This Section 28 shall survive termination of the Agreement only for a period of
one (1) year from termination.
28.1 RESTRICTIONS ON SEA. During the Term, SEA shall not directly or indirectly
(other than with LLC, PeopleSoft or a PeopleSoft Affiliate) develop or
participate in the development or marketing to the higher education market of
any software product being developed for commercial distribution which is
competitive with the Derivative Software. After the Development Term, SEA and
its personnel are not precluded from participating in the custom development of
software or the customization of software packages for internal use only by
individual clients and SEA will undertake all reasonable efforts to ensure that
there is no plan to transfer or convey external use rights in any way to the
custom software and/or the customizations.
28.2 RESTRICTIONS ON PEOPLESOFT AND LLC. During the Term, PeopleSoft and LLC
shall not directly or indirectly (other than with SEA) participate in the
distribution or marketing to the higher education marketplace of any software
product which is directly competitive with the Derivative Software. This Section
28.2 shall immediately cease (with no one year waiting period) in the event SEA
elects to work with another entity or person to develop or market software which
is competitive with the Derivative Software.
29. SALE OF INTEREST IN SEA. PeopleSoft, Inc. shall have a first right of
refusal in connection with each and any sale of a [ * ] interest in the
outstanding or newly issued capital stock of SEA during the Development Term or
any interest once SEA has cumulatively conveyed (via multiple transactions) more
than [ * ] percent. The intent is not to permit SEA to circumvent PeopleSoft's
first right of refusal rights or PeopleSoft's right to terminate Section 30
after the Development Term by SEA selling multiple [ * ] interests which have
the cumulative effect of transferring a cumulative interest of more than [ * ]
percent to a third party or Parties. A [ * ] interest is defined as [ * ] or
more. As used herein, a sale of a [ * ] interest in the
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 21
outstanding or newly issued capital stock of SEA shall expressly exclude any
interest offered or transferred pursuant to an employee benefit plan or to or
between any person(s) who are both employees, directors, shareholders or
controlling persons of SEA. After the expiration of the Development Term and
first year of the Maintenance Contract (or earlier termination of this
Agreement) this Section 29 shall terminate and be of no further force or effect,
except that a sale of a [ * ] interest will act to terminate Section 30
in the event PeopleSoft reasonably determines that (i) SEA's ability to act as a
preferred implementation partner will have a negative impact on PeopleSoft's
Derivative Software marketing activities, (ii) is likely to result in disclosure
of PeopleSoft Confidential Information, (iii) it is likely to adversely impact
PeopleSoft's ability to manage other Derivative Software implementation
partnerships; or (iv) a PeopleSoft competitor has acquired the [ * ] interest in
SEA. Should PeopleSoft not exercise its first right of refusal, LLC shall have
the same first right of refusal as described herein.
30. PREFERRED IMPLEMENTATION PARTNER STATUS. Effective as of the Effective Date,
SEA will be given a preferred implementation partner status associated with the
Derivative Software. PeopleSoft, LLC and SEA will work together during and at
the end of the Development Period to develop a preferred role for SEA within any
PeopleSoft or LLC implementation partners program for the Derivative Software.
In any event, SEA will have the right to acquire and use Derivative Software
licenses for internal use only at no license fee in conjunction with SEA's role
as an implementation partner. As of the Effective Date, PeopleSoft and SEA have
discussed the possibility of a key role for SEA within the Derivative Software
installation process. Such good faith discussions shall continue during and at
the conclusion of the Development Term to define SEA's role. The intent behind
this paragraph is not necessarily to provide SEA with exclusive status as an
implementation partner, but to offer SEA preferential treatment to the extent
reasonably practicable within PeopleSoft's or LLC's (or any distributor
appointed by LLC) then current implementation partners program.
During the Term, neither PeopleSoft nor LLC will enter into any transactions
that contractually limit in a material fashion PeopleSoft's or LLC's continuing
relationship with SEA as a preferred implementor. If PeopleSoft, LLC or any
other distributor appointed by the LLC begins to offer implementation services
themselves, SEA's preferred status will still be in force. SEA will not then be
obligated to pay PeopleSoft or LLC any finder's fees for any implementation
business that SEA may obtain, nor shall PeopleSoft, LLC or any other distributor
appointed by the LLC accept any finder's fees from any other implementation
services providers for assisting PeopleSoft, LLC or any other distributor
appointed by the LLC in obtaining customers. In the event that SEA has proven to
be ineffective as a preferred implementation provider as reasonably indicated by
PeopleSoft's or LLC's client feedback, or does not have sufficient resources
available to provide timely implementation services to new licensee's,
PeopleSoft and LLC shall have the right to terminate the restrictions in this
paragraph.
Both PeopleSoft and LLC recognize SEA's status as the Preferred Implementation
Partner associated with the Derivative Software as defined herein and agree
hereby to meet before the end of the Development and agree upon a regular
schedule of meetings in which the Parties will discuss planned and ongoing
software development efforts, joint marketing plans and any reasonable request
for information regarding End Users.
31. PARTICIPATION ON BOARD OF DIRECTORS. As of the Effective Date and throughout
the Term, SEA shall provide PeopleSoft or LLC with one (1) seat on SEA's board
of directors
32. ASSIGNMENT AND SUBCONTRACTING BY SEA / SUBCONTRACTING BY PEOPLESOFT
32.1 During the Development Term, SEA shall not assign or otherwise transfer any
of its rights or obligations under this Agreement without the prior written
consent of LLC, which consent can be withheld in LLC's sole discretion.
With LLC's prior written consent, SEA will be entitled to subcontract work to be
performed under the Project Plans, provided that such assignment shall not work
a novation and SEA shall remain responsible for all of its duties and
obligations hereunder. SEA is responsible for all costs and expenses associated
with the subcontract and such costs shall be considered Project Funding.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 22
32.2 PeopleSoft will be entitled to subcontract work to be performed under the
Project Plans or otherwise in its discretion, provided that such assignment
shall not work a novation as to PeopleSoft and PeopleSoft shall remain
responsible for all of its duties and obligations hereunder.
32.3 SEA shall not hire or utilize [ * ] without the prior written consent of
PeopleSoft and LLC, which consent may be withheld in PeopleSoft's or LLC's sole
discretion. Once PeopleSoft and LLC provide such written consent, such person
shall be permitted to work for SEA without further consent required, provided
adequate written assurances are received by SEA from such person that they are
not contractually or otherwise prohibited from developing the Derivative
Software. In the event such person is reasonably viewed thereafter by
PeopleSoft, LLC or SEA to have breached their representations to SEA, SEA shall
not be in material breach of this Agreement provided SEA has taken all
reasonable actions to remedy or cure such employee breach which may include
termination of such employee's employment with SEA.
Any assignment or transfer by either party in violation of this Section 32.
shall be deemed to be null and void.
33. PERFORMANCE AUDITS. In order to ensure the proper performance hereunder,
PeopleSoft and LLC shall have the right at anytime upon reasonable notice to
inspect and receive copies of all completed and partially completed portions of
the Derivative Software, programming, printed program source code listings,
narratives, record layouts, file descriptions, computer output, working papers
and other material relating to the Project.
34. ACCESS TO FINANCIAL STATEMENTS. Once every twelve months, SEA, LLC and
PeopleSoft shall provide the Parties with updated and audited financial
statements for its company.
35. INDEPENDENT CONTRACTOR.
SEA shall be deemed to be an independent contractor in the performance of this
Agreement and shall not be considered or permitted to be an agent, servant,
joint venturer or partner of PeopleSoft or LLC. All persons furnished, used,
retained or hired by or on behalf of SEA shall be considered to be solely the
employees or independent contractors of SEA, and SEA at all times shall maintain
such supervision and control over its employees as is necessary to preserve its
independent contractor status. SEA shall be responsible for payment of any and
all unemployment, social security, withholding, and other payroll taxes for its
employees, as applicable, including any related assessments or contributions
required by law.
PeopleSoft shall be deemed to be an independent contractor in the performance of
this Agreement and shall not be considered or permitted to be an agent, servant,
joint venturer or partner of SEA or LLC. All persons furnished, used, retained
or hired by or on behalf of PeopleSoft shall be considered to be solely the
employees of PeopleSoft, and PeopleSoft at all times shall maintain such
supervision and control over its employees as is necessary to preserve its
independent contractor status. PeopleSoft shall be responsible for payment of
any and all unemployment, social security, withholding, and other payroll taxes
for its employees, as applicable, including any related assessments or
contributions required by law.
36. FORCE MAJEURE. No party shall be deemed to be in default of any provision of
this Agreement or liable for failures in performance resulting from acts or
events beyond the reasonable control of such party. Such acts and events shall
include but not be limited to acts of God, civil or military authority, civil
disturbance, war, strikes, fires, earthquakes, other catastrophes, or other
"force majeure" events beyond a party's reasonable control, and shall NOT
include the death or disability of Key Personnel.
37. ARBITRATION; CHOICE OF LAW; FORUM.
37.1 ARBITRATION AUTHORITY. PeopleSoft, LLC and SEA expressly agree that any
dispute, controversy, or claim arising out of or relating to this Agreement or
the formation, breach, interpretation, or enforcement of this Agreement shall be
submitted to and settled by binding arbitration conducted by the American
Arbitration Association ("A.A.A."). The A.A.A. rules notwithstanding, in no
event shall the arbitrator in any arbitration
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 23
under this Agreement have power or authority to add to or detract from the
express agreement of PeopleSoft, LLC and SEA or to award punitive or
consequential damages.
37.2 CHOICE OF LAW. This Agreement was entered into in the State of California,
and its validity, construction, interpretation, and legal effect shall be
determined and governed by the substantive laws and judicial decisions of the
State of California applicable to contracts entered into and performed entirely
within the State of California.
37.3 PLACE OF ARBITRATION; FORUM. PeopleSoft, LLC and SEA expressly agree that
any arbitration pursuant to this Agreement shall be conducted in the county of
the principal place of business where the party NOT requesting arbitration is
located. Any and all functions or proceedings which must or may be performed or
conducted by a court prior to, in conjunction with, or after any arbitration
under this Agreement shall be performed or conducted by the Superior Court of
the State of California located in the same county. Notwithstanding the
foregoing, any award rendered in the arbitration and any order issued by the
Superior Court of the State of California for the same county may be enforced in
any court of competent jurisdiction.
37.4 ARBITRATION HEARING. PeopleSoft, LLC and SEA expressly agree that an oral
hearing will be held in the arbitration. The oral hearing will commence within
sixty (60) days after appointment of the arbitrator and will conclude within
thirty (30) days after it commences. The arbitrator will make every effort to
enforce this requirement strictly, and may extend the time for commencing and/or
concluding the hearing only upon a showing that exceptional circumstances
require extension to prevent manifest injustice.
37.5 COSTS AND FEES. PeopleSoft, LLC and SEA shall bear the expense of
conducting the arbitration in equal proportions, but either PeopleSoft, LLC or
SEA may advance such amounts, subject to recovery as an addition or offset to
any award. PeopleSoft, LLC and SEA expressly agree that each will bear its own
costs and fees incurred in any arbitration hereunder, and that the arbitrator
shall not have the power or authority to award costs or fees to a prevailing
party.
37.6 RELATED ACTIONS. PeopleSoft, LLC and SEA expressly agree that any legal
action relating to the arbitration and any action to stay the arbitration or to
modify or correct any award or otherwise, will be heard in the Superior Court of
the State of California located in the county of arbitration.
Any action for injunctive or interim relief will be heard in either San
Francisco or Los Angeles County as determined by the party bringing the action.
37.7 CONFIDENTIALITY. PeopleSoft, LLC and SEA acknowledge that the progress, and
results of any arbitration, any testimony rendered in any arbitration
proceeding, and any arbitral award (collectively, "Arbitration Information") are
to remain strictly confidential. PeopleSoft, LLC and SEA agree not to publish or
advertise any Arbitration Information by any means and further agree to take
reasonable care, but in no event less care than it takes to protect their own
confidential business information generally, to prevent disclosure and
dissemination of any Arbitration Information.
37.8 ARBITRATION BINDING. The award rendered in any arbitration will be final
and binding, and may be enforced in any court of competent jurisdiction.
PeopleSoft, LLC and SEA expressly waive any right they might have to appeal or
petition for review of any arbitral award.
38. CONFIDENTIAL INFORMATION.
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<PAGE> 24
38.1 SEA and LLC understand and agree that the Software and the Derivative
Software and materials provided by PeopleSoft to SEA under this Agreement
contain trade secrets, confidential and proprietary information of PeopleSoft
(hereinafter referred to as the "Confidential Information"). SEA and LLC shall
exercise all reasonable care to avoid unauthorized disclosure, publication, or
dissemination of the Confidential Information, and will not copy or permit
others to copy the Confidential Information, except for a reasonable number of
copies necessary to perform the services hereunder, all of which shall be
treated in accordance with the foregoing standard. SEA and LLC shall not
disclose, provide, or otherwise make available the Confidential Information, in
whole or in part, except in confidence to SEA's employees in the scope of their
employment for purposes solely related to the performance of services hereunder
by SEA. SEA and LLC shall return such Confidential Information to PeopleSoft at
its request. If LLC, SEA or its employees use, disclose, or attempt to use or
disclose any such Confidential Information in a manner contrary to this
provision, then PeopleSoft shall have the right to seek injunctive relief
against such breach or threatened breach pending arbitration as provided in
Section 37.
38.2 Under no circumstances shall Confidential Information include any
information which:
(i) Was in the public domain at the time it was disclosed.
(ii) Was lawfully known to SEA or LLC prior to the time of
disclosure by PeopleSoft to SEA.
(iii) Is disclosed with the prior written approval of
PeopleSoft.
(iv) Is or becomes publicly known through no wrongful act of
SEA or LLC.
(v) Becomes lawfully known to SEA or LLC from a source other
than PeopleSoft without breach of this Agreement by SEA
or LLC.
(vi) Is disclosed pursuant to the order or requirement of a
court, administrative agency or other governmental body, provided that if SEA or
LLC is required to disclose any Confidential Information pursuant to any
governmental or legal proceedings, SEA or LLC will give PeopleSoft reasonable
advance written notice of such proceeding.
39. RIGHTS UPON TERMINATION. Except as provided otherwise in this Agreement,
upon the termination or expiration of this Agreement, SEA shall return to
PeopleSoft or LLC, as appropriate, (and keep no copies of) any and all papers,
materials and property of PeopleSoft, the Development Environment, all copies of
the PeopleSoft Software, the Derivative Software, Modules, design or development
documents and any portion thereof, held by SEA, its agents, employees or
subcontractors in connection with the performance of this Agreement.
40. NOTICES. All notices given hereunder shall be in writing and deemed duly
given upon personal delivery or on the third business day following the date on
which each such notice is deposited postage prepaid in the U.S. Mail, registered
or certified, return receipt requested. All notices shall be delivered or sent
to the other party at the address shown below or at any other address as the
party may designate by ten (10) calendar days prior written notice given in
accordance with this provision.
IF TO PEOPLESOFT:
PeopleSoft, Inc.
1331 North California Boulevard
Walnut Creek, California 94596
Attention: Legal Department
IF TO SEA:
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<PAGE> 25
Solutions For Education Administrators, Inc.
15515 San Fernando Mission Boulevard, Suite 6
Mission Hills, California 91345
Attention: Geoff Collier
If to LLC:
SIS Development, LLC
4440 Rosewood Drive
Pleasanton, CA 94588
Attention: Paul Salsgiver
41. SURVIVAL. The following provisions shall survive any termination of this
Agreement: Sections 1, 2, 13.1, 19, 21, 22, 23, 24, 25, 27, 28, 35, 37, 38, 39,
40, 41, 43 and 44.
42. SUBSEQUENT CHANGES IN AGREEMENT. This Agreement may be modified only by an
amendment executed in writing by a duly authorized representative for
PeopleSoft, LLC and SEA.
43. DUPLICATE ORIGINALS. This Agreement may be executed in counterparts, each of
which shall be deemed an original but both of which together shall constitute
one and the same instrument. In proving this Agreement it shall not be necessary
to produce more than one (l) such original.
44. ENTIRE AGREEMENT. This Agreement contains the entire understanding and
agreement between the Parties with respect to the subject matter hereof, and
supersedes any and all prior or contemporaneous oral or written communications
with respect to the subject matter hereof, and there are no oral or written
representations, understandings or agreements between the Parties respecting the
subject matter hereof which are not fully expressed herein. All amendments must
be in writing and signed by the Parties' authorized signatories to be effective.
THE TERMS, CONDITIONS, AND PRICING IN THIS AGREEMENT ARE CONFIDENTIAL AND SHALL
NOT BE DISCLOSED BY SEA, LLC OR PEOPLESOFT TO ANY THIRD PARTY WITHOUT THE PRIOR
WRITTEN CONSENT OF ALL OF THE OTHER PARTIES, SUCH CONSENT NOT TO BE UNREASONABLY
WITHHELD.
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<PAGE> 26
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
in duplicate originals by its respective duly authorized representative on the
Amended Effective Date entered below.
<TABLE>
<CAPTION>
<S> <C> <C>
AMENDED EFFECTIVE DATE: 22 DECEMBER 1995.
SOLUTIONS FOR EDUCATION
ADMINISTRATORS, INC. PEOPLESOFT, INC. SIS DEVELOPMENT, LLC
/S/ GEOFFREY R. COLLIER /S/ RONALD E.F. CODD /S/ PAUL H. SALSGIVER JR.
- -------------------------------------------------------------------------------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
GEOFFREY R. COLLIER, PRESIDENT RONALD E.F. CODD - SR. VP CFO PAUL H. SALSGIVER JR., MANAGER
- ------------------------------------------------------------------------------------------------------
PRINTED NAME AND TITLE PRINTED NAME AND TITLE PRINTED NAME AND TITLE
</TABLE>
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<PAGE> 27
EXHIBIT A
FUNCTIONS FOR CONSIDERATION AS OF THE EFFECTIVE DATE
[ * ]
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 28
[ * ]
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 29
[ * ]
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 30
EXHIBIT B
FUTURE MODULES
[ * ]
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 31
[ * ]
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 32
EXHIBIT C
FUNDING SCHEDULE
The following spreadsheet provides the schedule for the Project Funding that LLC
will provide to SEA under the terms of the Agreement. SEA can unilaterally
reduce the Project Funding to be received at any time, and if SEA elects to
reduce the Project Funding SEA receives in a particular funding period, SEA can
require that LLC add the amount of such reduction to any subsequent funding
period(s).
<TABLE>
<CAPTION>
Payment Date (on following
Month During Period Cumulative business day if falls on weekend
Development Term Funding Funding or holiday)
<S> <C> <C> <C>
[ * ]
</TABLE>
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 33
EXHIBIT D
PAYMENT RATE SCHEDULE
<TABLE>
<CAPTION>
Project TARGET
Funding % % % % % % % % % % NET
Level YR YR YR YR YR YR YR YR YR YR PAYMENT
1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
[ * ]
</TABLE>
For the avoidance of doubt, the Target Net Payment is not a guaranteed payment
amount or guaranteed payment stream, rather the Target Net Payment is only a
rough estimation of the possible payment amount.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 34
EXHIBIT E
LICENSE AGREEMENT
(Term of use shall be Term of Software Development Agreement)
SOFTWARE END USER LICENSE AND SERVICES AGREEMENT
This agreement ("Agreement") is made as of ,1994
("Effective Date") by and between PeopleSoft, Inc. ("PeopleSoft"), a Delaware
corporation having its principal place of business at 1331 North California
Boulevard, Walnut Creek, California 94596 and
Name: ("LICENSEE")
------------------------------
Address:
---------------------------
---------------------------
---------------------------
This Agreement and the Schedules constitute the entire agreement between the
Parties concerning Licensee's use of the Software. No purchase order, other
ordering document, or any handwritten or typewritten text which purports to
modify or supplement the printed text of this Agreement or any Schedule shall
add to or vary the terms of this Agreement. All such proposed variations or
additions (whether submitted by PeopleSoft or Licensee) are objected to and
deemed material. This Agreement replaces and supersedes any prior verbal
understandings, written communications, and representations, including any
unsigned license agreement included in any package for PeopleSoft furnished
software, except terms contained in such unsigned license agreement that limit
usage of the Software.
THE TERMS AND CONDITIONS HEREIN ARE ACCEPTED AS PART OF THIS
AGREEMENT.
LICENSEE PEOPLESOFT, INC.
- ----------------------------------- -----------------------------------
Authorized Signature Authorized Signature
- ----------------------------------- -----------------------------------
Printed Name and Title Printed Name and Title
TERMS AND CONDITIONS
1. LICENSE
1.1 During the Term, PeopleSoft grants Licensee a non-exclusive,
nontransferable license to use the licensed number of copies of the
Software, solely for internal data processing operations, on Server(s)
at the Site up to any maximum number of applicable designated Users
specified in the applicable Schedule. Any third party software products
or modules provided by PeopleSoft to Licensee shall be used solely with
PeopleSoft Software. Licensee may use the Software temporarily on a
machine other than the Server in the event that the Server is
inoperable. Licensee may make one (1) copy of the Software solely for
archive or emergency back-up purposes. Licensee may modify or merge the
Software with other software with the understanding that any
modifications, however extensive, shall not diminish PeopleSoft's title
or interest in the Software.
1.2 PeopleSoft shall provide Licensee with one (1) copy of the Software and
two (2) printed sets of Documentation. Licensee may make a reasonable
number of copies of Documentation solely for Licensee's internal use
with the Software provided all copyright notices are reproduced.
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<PAGE> 35
2. LICENSE EXCLUSIONS
2.1 Except as expressly authorized herein, Licensee shall not:
a. copy or modify the Software;
b. cause or permit reverse compilation or reverse assembly of all
or any portion of the Software;
c. distribute, disclose, market, rent, lease or transfer to any
third party any portion of the Software (including
PeopleTools) or the Documentation, or use the Software or
Documentation in any service bureau arrangement or third party
training;
d. disclose the results of Software performance benchmarks to any
third party without PeopleSoft's prior written notice;
e. transfer the Software to a different computer, location or
Site without the prior written consent of PeopleSoft (such
consent not unreasonably withheld) and payment of any
additional fees which may be due;
f. export the Software in violation of U.S. Department of
Commerce export administration regulations;
g. invoke support libraries other than through documented API
calls; and
h. use PeopleTools in a non-PeopleSoft application development
environment.
2.2 No license, right, or interest in any PeopleSoft trademark, trade name,
or service mark is granted hereunder.
3. FEES AND PAYMENT TERMS
3.1 Licensee shall pay PeopleSoft the fees as specified in each
applicable Schedule and all associated shipping costs.
3.2 Unless Licensee provides PeopleSoft with a valid tax exemption or
direct pay certificate, Licensee is responsible for all taxes, duties
and customs fees concerning the Software and/or services, excluding
taxes based on PeopleSoft's income. Overdue payments shall bear
interest at the lesser of twelve percent (12%) per annum or the maximum
rate allowed under applicable law.
4. TITLE AND PROTECTION
4.1 PeopleSoft (or its third-party providers) retains title to all portions
of the Software, any modifications to the Software developed with
PeopleTools, and any copies thereof. Title to the physical media for
the Software vests in Licensee upon delivery. The Software contains
valuable proprietary information, and Licensee shall not disclose the
Software to anyone other than those of its employees or consultants
under nondisclosure obligations who have a need to know for purposes
consistent with this Agreement. Licensee shall affix, to each full or
partial copy of the Software made by Licensee, all copyright and
proprietary information notices as affixed to the original. The
obligations set forth in this paragraph shall survive termination of
this Agreement.
4.2 The Software may be transferred to the U.S. government only with the
separate prior written consent of PeopleSoft and solely with
"Restricted Rights" as that term is defined in FAR 52.227-19(c)(2) (or
DFAR 252.227-7013(c)(1) if the transfer is to a defense-related agency)
or subsequent citation.
5. PATENT AND COPYRIGHT INDEMNITY
PeopleSoft shall indemnify and defend Licensee against any claims that
the Software infringes any United States or Canadian patent or
copyright; provided that PeopleSoft is given prompt notice of such
claim and is given information, reasonable assistance, and sole
authority to defend or settle the claim. In the defense or settlement
of the claim, PeopleSoft may obtain for Licensee the right to continue
using the
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<PAGE> 36
Software, replace or modify the Software so that it becomes
noninfringing while giving equivalent performance. PeopleSoft shall
have no liability if the alleged infringement is based on: (i) a
modification of the Software by anyone other than PeopleSoft; (ii) use
of the Software with equipment not listed in a Schedule; or (iii) the
use of the Software other than in accordance with the Documentation.
6. DEFAULT AND TERMINATION
6.1 Any of the following shall constitute an event of default:
a. Licensee fails to perform any of its obligations under the
sections entitled "License Exclusions" or "Title and
Protection" ; or
b. Either party fails to perform any other material obligation
under this Agreement and such failure remains uncured for more
than thirty (30) days after receipt of written notice thereof.
6.2 If an event of default occurs, the nondefaulting party, in addition to
any other rights available to it under law or equity, may terminate
this Agreement and all licenses granted hereunder by written notice to
the defaulting party. Remedies shall be cumulative and there shall be
no obligation to exercise a particular remedy.
6.3 Within fifteen (15) days after termination of this Agreement, Licensee
shall certify in writing to PeopleSoft that all copies of the Software
in any form, including partial copies within modified versions, have
been destroyed or returned to PeopleSoft.
7. LIMITED WARRANTY
PeopleSoft warrants that it has title to the Software and the authority
to grant licenses to use the Software. PeopleSoft warrants that the
Software will perform substantially in accordance with the
Documentation for a period of one (1) year from the date of
installation. PeopleSoft's sole obligation is limited to repair or
replacement of the defective Software, provided Licensee notifies
PeopleSoft of the deficiency within the one-year period and provided
Licensee has installed all Software updates provided by PeopleSoft's
Software Support Services. PEOPLESOFT DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
8. LIMITATION OF LIABILITY
PEOPLESOFT WILL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST DATA OR LOST
PROFITS, HOWEVER ARISING, EVEN IF IT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. EXCLUDING DAMAGES INCURRED UNDER THE
ARTICLE ENTITLED "PATENT AND COPYRIGHT INDEMNITY", PEOPLESOFT'S
LIABILITY FOR DAMAGES UNDER THIS AGREEMENT SHALL IN NO EVENT EXCEED THE
AMOUNT PAID BY LICENSEE TO PEOPLESOFT FOR THE SOFTWARE OR THE SERVICES
FROM WHICH THE CLAIM AROSE. THE PARTIES AGREE TO THE ALLOCATION OF
LIABILITY RISK WHICH IS SET FORTH IN THIS SECTION.
9. SOFTWARE SUPPORT SERVICES TERMS AND CONDITIONS
On the Schedule Effective Date, PeopleSoft shall provide Licensee with
one (1) year of software support services as described in PeopleSoft's
standard Software Support Services Terms and Conditions (receipt of
which is hereby acknowledged). After the first year, Licensee may elect
to acquire Software Support Services by paying PeopleSoft the then
current applicable fees.
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<PAGE> 37
10. ON-SITE SUPPORT
PeopleSoft shall provide Licensee with support at the Site for the
Software as set forth in the Schedule. For a period of six (6) months
from the Schedule Effective Date, support days not used during the
installation phase may be used for other implementation support.
Licensee shall reimburse PeopleSoft for all reasonable travel and
living expenses associated with any installation and support.
11. TRAINING
PeopleSoft shall provide Licensee with the number of training units set
forth in the Schedule for use at a PeopleSoft Training Facility.
Licensee may use training units for Site training as the Parties
mutually agree in writing. Licensee must use these training units
within one (1) year from the Schedule Effective Date.
12. NOTICES
All notices shall be in writing and sent by first class mail, overnight
mail, courier, or transmitted by facsimile (if confirmed by such
mailing), to the addresses indicated on the first page of this
Agreement, or such other address as either party may indicate by at
least ten (10) days prior written notice to the other party. Notices to
PeopleSoft shall be sent to the Legal Department.
13. ASSIGNMENT
Licensee may not assign this Agreement (by operation of law or
otherwise) or sublicense the Software without the prior written consent
of PeopleSoft, and any prohibited assignment or sublicense shall be
null and void.
14. NONDISCLOSURE OBLIGATION
14.1 The terms, conditions, pricing and any other information clearly marked
"confidential" under this Agreement are confidential and shall not be
disclosed, orally or in writing by Licensee to any third party without
the prior written consent of PeopleSoft.
14.2 Licensee shall protect the Software with at least the same degree of
care and confidentiality which Licensee utilizes for similar Licensee
information which it does not wish disclosed to the public. Licensee
may provide access to and use of the Software only to those third
Parties, (undertaking similar nondisclosure obligations), providing
services concerning Licensee's use of the Software.
15. GENERAL
This Agreement is made in and shall be governed by the laws of the
State of California, excluding choice of law principles. Venue shall be
in San Francisco, California. The section headings herein are provided
for convenience only and have no substantive effect on the construction
of this Agreement. Except for Licensee's obligation to pay PeopleSoft,
neither party shall be liable for any failure to perform due to causes
beyond its reasonable control. If any provision of this Agreement is
held to be unenforceable, this Agreement shall be construed without
such provision. The failure by a party to exercise any right hereunder
shall not operate as a waiver of such party's right to exercise such
right or any other right in the future. Except for actions for
nonpayment or breach of PeopleSoft's proprietary rights in the
Software, no action regardless of form, arising out of this Agreement
may be brought by either party more than one year after the cause of
action has accrued. This Agreement may be amended only by a written
document executed by a duly authorized representative of each of the
Parties. This Agreement may be executed in counterparts. To expedite
order processing, Transmitted Copies are considered documents
equivalent to original documents.
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<PAGE> 38
16. DEFINITIONS
"Documentation" means only technical publications relating to the use
of the Software, such as reference, user, installation, systems
administrator and technical guides, delivered by PeopleSoft to
Licensee.
"PeopleTools" means the underlying architecture from which the Software
is designed, and includes software application programming tools and
code.
"Schedules" means the product schedules which specifically reference
this Agreement and which have been executed by the Parties.
"Server" means a single database or file server which may be accessed
by a network of personal computers.
"Site" means a specific, physical location of Licensee's Server as set
forth in the applicable Schedule.
"Software" means all or any portion of the binary computer software
programs (including corresponding source code) provided by PeopleSoft
or made by Licensee with PeopleSoft's prior written consent, in
machine-readable form and including all listed in the applicable
Schedule and all corrections or updates thereto. Software includes the
third-party software as identified in the Schedule. Software does not
include source code to PeopleTools.
"Transmitted Copies" means this Agreement, Schedules and other ordering
documents which (i) contain no modifications or amendments to this
Agreement; (ii) are copied or reproduced and transmitted via photocopy,
facsimile or process that accurately transmits the original documents;
and (iii) are accepted by PeopleSoft.
"User" means an individual authorized by Licensee to use Software on
the Server.
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<PAGE> 39
EXHIBIT F
MAINTENANCE AND SUPPORT SERVICES TERMS AND CONDITIONS
Prior to the conclusion of Phase 3, SEA and PeopleSoft agree to negotiate in
good faith the terms and conditions of a Maintenance Contract for the Derivative
Software. Such agreement may include terms and conditions similar to those
outlined herein. Upon termination of PeopleSoft's exclusive distribution rights
under the Marketing Agreement, SEA and the LLC agree to negotiate in good faith
the terms and conditions of a Maintenance Contract for the Derivative Software
and all references in this Exhibit F to "PeopleSoft" will change to "PeopleSoft
or the LLC".
In performing its duties under the Maintenance Contract, if any, SEA shall
utilize the equivalent of [ * ] time technical personnel and application
specialists working no more than [ * ] hours each annually, with such hours to
be allocated evenly throughout the term of the Maintenance Contract, to provide
the following services to PeopleSoft and its licensees of the Derivative
Software, in order of their priority:
Ongoing fixes of bugs in Derivative Software. A "bug" is an error in the
Derivative Software that prevents it from performing in accordance with the
Test Plans.
Second level support direct to PeopleSoft for Derivative Software licensees.
Revisions and limited enhancements to existing Derivative Software modules,
limited by the amount of time available from the [ * ] staff members
assigned to the Maintenance Contract, with such efforts to be allocated
evenly throughout the term of the Maintenance Contract. It is assumed that
this would include, as the first priority, the revision of the Financial Aid
system to meet new regulatory requirements, which is estimated to require
from [ * ] man-months of work annually.
Participation in Derivative Software user group conferences and activities.
Participation in appropriate professional groups and conferences in order to
anticipate changing requirements and to identify new opportunities.
Sales support assistance for Derivative Software sales opportunities,
estimated not to exceed [ * ] man days per year.
All response time and fix periods to be negotiated in good faith.
The Maintenance Contract will be for a one year term, and will be renewed
annually if mutually agreed upon by SEA and PeopleSoft. The Maintenance Contract
would commence at the start of the third year after the Effective Date. The cost
of the Maintenance Contract would be negotiated annually based on the number and
seniority of the personnel assigned to the contract by SEA and agreed to by
PeopleSoft.
As a part of the Maintenance Contract, PeopleSoft would continue to provide
complete support for SEA's Development Environment, as described in Section 5 of
this Agreement and the technical support as described in Section 6 of the
Agreement.
Notwithstanding the foregoing, after the Development Term is completed, it is
anticipated that there will be significant ongoing development of new Software
and enhancement of the Derivative Software functions and modules. Ongoing
enhancement is crucial to the continuing expansion of sales. Such ongoing
development activity is expected to be outside the scope of the Maintenance
Contract, except as described above. Separate contracts would be negotiated
between SEA and PeopleSoft for this work.
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 40
EXHIBIT G
VESTED PAYMENT EXAMPLE
The following exhibit is only provided for the purpose of illustrating a
hypothetical payment computation in the event that termination of this Agreement
occurs prior to the end of the Development Term.
Example assumptions:
Contract effective date is January 16, 1995.
Early termination occurs at the end of month 7 (August 15, 1995).
Actual funding paid to SEA as of the date of early termination is [ * ]
Vesting Milestone one is deemed to be [ * ] of the project.
Vesting Milestone two is deemed to be [ * ] of the project.
No other Vesting Milestones have been reached, and therefore are not
relevant to this example.
SEA has completed Vesting Milestones one and two at or prior to the
early termination date, and consequently is [ * ] vested in their
payments.
Subject sale of the Derivative Software is earned in year 4 of the
original term.
Subject sale results in a Net License Fee of [ * ]
To determine the applicable payment percentage to be used, the following steps
must be taken:
1) Determine the applicable funding (and consequent Payment Rate
Schedule). Since the project stopped in month 7, the scheduled project
funding through month 7 paid to SEA would be [ * ] in accordance with
schedule C. Using the Implied Funding Payment Formula and the example
values, the implied total project funding is determined to be [ * ] as
follows:
[ * ]
Note: Since the implied total project funding falls in between the
[ * ] level and the [ * ] level, in accordance with this Agreement, the
higher funding schedule is applicable. Therefore, the applicable
Project Funding Level (Payment Rate Schedule) is [ * ]
2) Select the appropriate annual rate from schedule D using the [ * ]
funding schedule, which is [ * ]
3) Multiply the vesting percentage [ * ] by the payment rate [ * ] by
the Net License Fees to determine the appropriate payment to SEA, as
follows:
[ * ] (payment due SEA subject to Project Funding recovery)
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 1
Exhibit 10.29
[*]
SYSTEMS INTEGRATOR AGREEMENT
(Non-Exclusive Appointment)
This Agreement ("Agreement") is made as of the Effective Date by and between
PeopleSoft, Inc. ("PEOPLESOFT") a Delaware corporation having a place of
business at 1331 North California Boulevard, Walnut Creek, California 94596 and
Shared Medical Systems Corporation ("SMS") a Delaware corporation having a place
of business at 51 Valley Stream Parkway, Malvern, Pennsylvania 19355
1. APPOINTMENT / GRANT OF LICENSES
a) PeopleSoft hereby appoints SMS as its (i) non-exclusive systems
integrator for the sub-licensing of the PeopleSoft HRMS Software, under
the SMS label, throughout the Territory to End Users solely in
conjunction with SMS's simultaneous distribution of SMS's Core
Applications and (ii) exclusive (except for PeopleSoft's distributor,
ADP, and as otherwise stated herein, including, Sections 2.c and 2.d)
systems integrator for the sub-licensing of the PeopleSoft HRMS
Software, under the SMS label, throughout the Territory to SMS End
Users.
b) PeopleSoft hereby appoints SMS as its (i) non-exclusive systems
integrator for the sub-licensing of the PeopleSoft Financial Software,
under the SMS label, throughout the Territory to End Users solely in
conjunction with SMS's simultaneous distribution of SMS's Core
Applications and (ii) exclusive (except as otherwise stated herein,
including, Sections 2.c and 2.d) systems integrator for the
sub-licensing of the PeopleSoft Financial Software, under the SMS
label, throughout the Territory to SMS End Users.
c) PeopleSoft hereby grants to SMS (i) a non-exclusive and nontransferable
license to sub-license the PeopleSoft HRMS Software, under the SMS
label, throughout the Territory solely to End Users in conjunction with
SMS's simultaneous distribution of SMS's Core Applications and (ii) an
exclusive (except for PeopleSoft's distributor, ADP, and as otherwise
stated herein, including, Sections 2.c and 2.d) and nontransferable
license to sub-license the PeopleSoft HRMS Software, under the SMS
label, throughout the Territory solely to SMS End Users, for
installation and use on a Server located in the Territory subject to
the terms and conditions of a License Agreement.
d) PeopleSoft hereby grants to SMS (i) a non-exclusive and nontransferable
license to sub-license the PeopleSoft Financial Software, under the SMS
label, solely to End Users throughout the Territory in conjunction with
SMS's simultaneous distribution of SMS's Core Applications and (ii) an
exclusive (except as otherwise stated herein, including, Sections 2.c
and 2.d) and nontransferable license to sub-license the PeopleSoft
Financial Software, under the SMS label, throughout the Territory
solely to SMS End Users, for installation and use on a Server located
in the Territory subject to the terms and conditions of a License
Agreement.
e) PeopleSoft hereby grants to SMS a perpetual, non-exclusive and
nontransferable license to use the PeopleSoft Software, including third
party software specified on Exhibit C, for its own internal use subject
to the terms and conditions of the PeopleSoft License Agreement
attached hereto as Exhibit E. With regards to SMS's internal use
license only, SMS shall have the right, at no additional PeopleSoft
license fee, to distribute the PeopleSoft manufactured components of
the Software (which excludes third party software identified in
PeopleSoft's then-current Hardware and Software Requirements Document,
a copy of such document as of the Effective Date is attached hereto as
Exhibit H) to multiple other Servers located either inside or outside
the Territory ("Distributed Sites") for the purpose of load balancing
SMS's data volumes and for performance efficiency purposes. SMS shall
support all Distributed Sites through SMS's central site. Support items
such as hotline support and distribution of maintenance Releases will
be conducted and distributed through SMS's central site. SMS is
responsible for obtaining, at its expense, any third party software
necessary to process at the Distributed Sites.
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
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<PAGE> 2
f) SMS's internal use license for PeopleTools for general development, as
specified on Exhibit C, shall be used solely to (i) develop
applications for SMS's internal systems and/or (ii) develop
modifications and/or enhancements to the PeopleSoft Software. SMS shall
not market or distribute the applications developed with PeopleTools
for SMS's internal systems without executing a mutually acceptable
amendment to this Agreement authorizing such extended use and
specifying the royalty associated with such usage. SMS shall have the
right to market or distribute the modifications and/or enhancements to
the PeopleSoft Software developed with PeopleTools to End Users,
provided such modifications and enhancements do not compete with any
application offered by PeopleSoft.
g) Except for the third party software, specified in Section 1.h below,
that is embedded in the application programming code for the PeopleSoft
Software, any third party software required by End Users to operate the
PeopleSoft Software must be licensed directly from the manufacturer or
an authorized dealer. As of the Effective Date, PeopleSoft represents
that the third party software identified in the Hardware and Software
Requirements Document is the third party software necessary to operate
the PeopleSoft Software. The Hardware and Software Requirements
Document as of the Effective Date is attached hereto as Exhibit H.
PeopleSoft agrees to notify SMS of any changes regarding such third
party software in accordance with PeopleSoft's standard notification
procedures for its early release customer base which includes
notification via PS/Forum. The early release customer program is
described in Section 5.a.
h) As of the Effective Date, PeopleSoft represents that the third party
software embedded in the application programming code for the
PeopleSoft Software is as follows:
Halo Image Library
Two MicroSoft DLL Files: XLCALL.DLL and CTL3D.DLL
One 123DLL file from Lotus.
PeopleSoft agrees to notify SMS of any changes regarding such embedded
third party software in accordance with PeopleSoft's standard
notification procedures for its early release customer base which
includes notification via PS/Forum. The early release customer program
is described in Section 5.a.
i) PeopleSoft hereby grants to SMS a non-exclusive and nontransferable
license to use the PeopleSoft Software in the Territory to provide
technical support, training, and sales support, including
demonstrations, to End Users subject to the terms and conditions of the
PeopleSoft License Agreement attached hereto as Exhibit E.
j) PeopleSoft hereby grants to SMS the right to copy or reproduce the
PeopleSoft Software and Documentation or any part thereof only as is
required for the sublicense and distribution purposes as outlined
herein and as otherwise permitted under Section 3(c). SMS shall
reproduce the PeopleSoft Software and Documentation only in the
Territory.
k) PeopleSoft hereby grants SMS the right to sublicense the PeopleSoft
Software under a SMS trade name. However, any such "private labeling"
shall in no way (i) diminish PeopleSoft's rights, title or interest in
the PeopleSoft Software and PeopleTools, (ii) alter SMS's obligation
under this Agreement or (iii) use any part of PeopleSoft trademark or
trade name, including the word "People".
l) In the event PeopleSoft develops and licenses additional PeopleSoft
HRMS Software Modules and/or PeopleSoft Financials Software Modules,
and SMS and PeopleSoft desire to expand the scope of this Agreement to
cover such additional modules, PeopleSoft agrees that the additional
fees (distribution, royalties and maintenance, including telephone
support) shall be proportionate to the fees specified in Exhibit B. The
calculation shall compare PeopleSoft's list price for such additional
modules to the list price for the modules specified in Exhibit A. An
example for illustrative purposes only: if the list price for the
PeopleSoft Software Modules listed on Exhibit A is $1,000,000 and the
list price for a future
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<PAGE> 3
PeopleSoft HRMS Software Module is $100,000, the royalties stated in
Section 4.b of Exhibit B shall increase by ten percent (10%) which is
100,000 divided by $1,000,000.
2. LICENSE VARIATIONS
a) If, after a Substantial "Selling" Effort by SMS, a Health Care Industry
prospect in the Territory that is not a SMS End User decides to license
only the PeopleSoft Software and not SMS's Core Applications,
PeopleSoft agrees that, upon PeopleSoft's prior written approval, which
approval shall not be unreasonably withheld, SMS shall have the right
to license the PeopleSoft HRMS Software and PeopleSoft Financial
Software, respectively, to such prospect for installation and use on a
Server located in the Territory subject to the terms and conditions of
a License Agreement; provided SMS pays PeopleSoft the applicable
royalty specified in Exhibit B. SMS understands and agrees that
notwithstanding anything to the contrary, PeopleSoft may withhold its
consent if PeopleSoft is competing with SMS in order to license the
PeopleSoft Software to the prospect.
b) SMS may not grant any rights or licenses to distribute the PeopleSoft
Software to any computer equipment manufacturers, value added
resellers, sub-distributors or other third party without the separate
prior written approval of PeopleSoft, which approval may be withheld by
PeopleSoft for any reason or may be subject to such conditions as
determined by PeopleSoft in its discretion. In the event PeopleSoft
allows SMS to grant any such sub-distribution rights, SMS shall submit
a copy of the proposed sub-distribution agreement to PeopleSoft for
review and approval prior to appointment of the sub-distributor.
c) PeopleSoft retains the right to distribute the PeopleSoft Software
directly in the Territory by itself or through other then-current
distributors, oems, vars and other channel partners. Except as stated
in Section 2.d below, SMS shall not be entitled to any compensation or
credit for such PeopleSoft related transactions. However, with respect
to SMS End Users, PeopleSoft agrees that PeopleSoft and its
then-current distributors, oems, vars and other channel partners (with
the specific exclusion of ADP as to PeopleSoft HRMS Software) shall
only market the PeopleSoft Software (i) to the SMS End Users listed on
Exhibit L on which PeopleSoft has expended a Substantial "Selling"
Effort and (ii) with SMS's prior written permission, which permission
shall not be unreasonably withheld, to other SMS End Users upon direct
solicitation by such entities. SMS understands and agrees that during
the nine (9) month period following the Effective Date, PeopleSoft has
the exclusive right to market, distribute and license the PeopleSoft
Software to the SMS End Users listed on Exhibit L. PeopleSoft
understands and agrees that after the expiration of the nine (9) month
period following the Effective Date, PeopleSoft must cease to market
the PeopleSoft Software to SMS End Users listed on Exhibit L unless
such SMS End Users directly solicit PeopleSoft and SMS grants
PeopleSoft SMS's prior written permission, which permission shall not
be unreasonably withheld.
SMS understands and agrees that during the twelve (12) month period
following the Effective Date, PeopleSoft has the exclusive marketing,
distribution and licensing rights for the prospects listed on Exhibit L
and SMS shall not market or distribute the PeopleSoft Software to such
prospects during such twelve month period.
SMS understands and agrees that during the Term of this Agreement,
including all subsequent renewals, PeopleSoft has the right to market,
distribute and license the PeopleSoft Software to the entities listed
on Exhibit L that are current PeopleSoft customers and SMS End Users.
With regards to the SMS End Users described in this Section, PeopleSoft
is not obligated to pay royalty or issue any credit to SMS in
conjunction with a license of the PeopleSoft Software to such entities
by PeopleSoft.
d) If, after a Substantial "Selling" Effort by SMS, a SMS End User decides
to license the PeopleSoft Software directly from PeopleSoft, SMS agrees
that, upon SMS's prior written approval, which approval shall not be
unreasonably withheld, PeopleSoft shall have the right to license the
PeopleSoft HRMS Software and
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<PAGE> 4
PeopleSoft Financial Software, respectively, to such SMS End User;
provided PeopleSoft credits to the royalties SMS is obligated to pay
PeopleSoft the amounts specified in Exhibit B. Notwithstanding anything
to the contrary, the credit obligation shall not apply to the SMS End
Users listed on Exhibit L on which PeopleSoft has expended a
Substantial "Selling" Effort. PeopleSoft understands and agrees that
notwithstanding anything to the contrary, SMS may withhold its consent
if PeopleSoft is competing with SMS in order to license the PeopleSoft
Software to the SMS End User.
3. LICENSE EXCLUSIONS
a) SMS shall not license or distribute the Software outside the Territory,
except as expressly provided herein. SMS has no right to exploit
PeopleSoft's intellectual property except as specifically set forth in
this Agreement.
b) Except as otherwise stated herein, SMS shall not license or distribute
the PeopleSoft Software to any entity that (i) is not simultaneously
licensing SMS's Core Applications in conjunction with the PeopleSoft
Software or (ii) is not a SMS End User.
c) SMS shall not (or permit any third party to) copy, translate or modify
the PeopleSoft Software and Documentation, except for sublicense
distribution purposes, normal back-up, disaster recovery testing,
disaster recovery operation, archival copies or as otherwise stated in
this Agreement and/or the License Agreement. Notwithstanding anything
to the contrary in this Agreement, SMS shall have the right to enable
End Users to cause additional facilities and affiliated entities under
contract with End User to access the PeopleSoft Software provided that
PeopleSoft's intellectual property rights are protected.
d) SMS shall not permit any third party to license, sublicense,
distribute, assign, transfer or use the PeopleSoft Software, except as
specifically permitted under this Agreement.
e) SMS warrants that SMS will not export or disclose directly or
indirectly: (i) the PeopleSoft Software or related technical
information, documents or materials; or (ii) any direct product
produced from the PeopleSoft Software or related technical information,
documents, or materials without the prior written consent, if required,
of the Office of Export Administration of the US Department of
Commerce, Washington DC. In the event SMS elects to operate
internationally as specified in Section 8 of Exhibit B, SMS shall use
its best endeavors to ensure its international customers abide by the
terms contained in this clause. Such obligation shall be satisfied by
the inclusion in SMS's License Agreement of a warranty similar to that
contained herein.
f) Neither party shall knowingly make any false or misleading
representations concerning the other party or the other party's
Software.
4. SMS'S OBLIGATIONS
During the Term, SMS agrees to do each of the following :
a) Use all reasonable efforts commensurate with market demand to solicit
licenses of the PeopleSoft Software and provision of Maintenance, as
distributor for PeopleSoft, from End Users located within the
Territory.
b) Enter into, in its own name and not that of PeopleSoft, licenses of the
PeopleSoft Software directly with End Users, pursuant to a License
Agreement. SMS warrants that all end user license agreement shall
contain (i) confidentiality and scope of use provisions substantially
similar to the form attached hereto as Exhibit I and (ii) a third party
beneficiary rights provision that shall allow PeopleSoft the right to
enforce the confidentiality and scope of use provisions.
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<PAGE> 5
c) Offer Maintenance to all End Users pursuant to a Maintenance Agreement.
It is expressly agreed by SMS that all Maintenance Agreements executed
by SMS pursuant to this Agreement are executed by SMS as principal and
not as agent for PeopleSoft.
d) Perform or cause to be performed, the following: (i) the installation
of the PeopleSoft Software, if elected by End User, (ii) the training
of End User personnel in the use of the PeopleSoft Software, (iii) the
provision of Maintenance required under any Maintenance Agreement. Any
expenses associated with such activities shall be paid by SMS and/or
the End User. In no event shall PeopleSoft be responsible for such
activities and the associated expenses.
e) Except as otherwise provided in this subsection 4.e, not directly or
indirectly market or distribute any products in the Territory which
compete with the PeopleSoft Software. As of the Effective Date,
products from Oracle (financials), Dun & Bradstreet Software, SAP, JD
Edwards, Ross Systems (excluding licensees existing on the Effective
Date and additional licenses and/or license extensions to SMS's Allegra
customer base), Integral, Cyborg and Tesseract are competing products.
Notwithstanding anything to the contrary, this restriction shall not
apply to SMS's marketing or distribution (i) to SMS End Users that, on
the Effective Date, have an existing license with SMS for a Ross
Systems application, (ii) of any new license(s) and/or license
extension(s) between SMS and SMS's Allegra customer base for a Ross
Systems application, (iii) of any new license(s) between SMS and SMS's
Allegra prospects for a Ross Systems application during the twelve (12)
month period after the Effective Date, provided SMS has expended a
Substantial "Selling" Effort on such prospect(s) prior to the Effective
Date, and (iv) of SMS's current legacy applications for Human Resources
and Financials, such as UNITY, INVISION, MS4. SMS represents that SMS
does not intend to proliferate the Ross Systems application within
SMS's Allegra customer base. This list may be updated during the Term
to include other products reasonably understood in the marketplace to
be competitors of PeopleSoft's products. This obligation shall not
survive termination of this Agreement. In the event SMS has paid
PeopleSoft the total amount of all the fees specified in Sections 4.a,
4.c and 4.d SMS may elect to market or distribute products in the
Territory which compete with the PeopleSoft Software.
f) Distribute the PeopleSoft Software to End Users properly licensed to
use the PeopleSoft Software.
g) Distribute Releases to End Users properly licensed to use the
PeopleSoft Software and under a current Maintenance Agreement with SMS.
h) Bear and be liable for all costs and expenses initiated and incurred by
SMS in fulfilling its responsibilities under this Agreement.
i) Bear and be liable for all reasonable travel and living expenses
incurred by PeopleSoft personnel performing services pursuant to this
Agreement at the request of SMS. Such expenses shall be reimbursed in
accordance with SMS's then current expense reimbursement policy for its
employees. At copy of such policy as of the Effective Date is attached
hereto as Exhibit M.
j) Be responsible for acquiring the right to distribute and sublicense, or
requiring that End Users acquire, any third party software products or
modules normally provided by PeopleSoft in conjunction with a license
of the PeopleSoft Software. Such third party software products are
described in PeopleSoft's Hardware and Software Requirements Guide, a
copy of such document as of the Effective Date is attached hereto as
Exhibit H. PeopleSoft shall update such guide periodically to identify
the then-current third party software products or modules associated
with the PeopleSoft Software.
k) To oversee the parties relationship under this Agreement, create with
PeopleSoft an Executive Team comprised of one senior management
representative from each organization. The Executive Team will meet at
least twice a year throughout the term of this Agreement and be
responsible for monitoring the progress of the relationship,
recommending and causing improvements to be implemented, and discussing
mutual strategy as it relates to the Agreement. The meetings shall
alternate between PeopleSoft's corporate
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<PAGE> 6
headquarters and SMS's corporate headquarters. In the event of a
deadlock, the Executive Team will submit to dispute escalation
procedures pursuant to Section 19.
5. PEOPLESOFT'S OBLIGATIONS
During the Term, PeopleSoft agrees to do each of the following:
a) Provide SMS with reasonable prior notice concerning PeopleSoft's
release of new or updated software. PeopleSoft agrees that SMS shall be
treated as an "early release" customer, provided SMS has paid the
Software Support Services fee for the then-current year. Accordingly,
SMS shall receive pre-release beta versions of the PeopleSoft Software
to assist SMS with planning its direction. The pre-release beta
PeopleSoft Software is provided "as is" without any Software Support
Services. Provided SMS is a then-current participant in PeopleSoft's
Software Support Services and Maintenance Program as specified in
Sections 4.f and 4.g of Exhibit B and specifically excluding Sections
4.h and 4.i of Exhibit B, PeopleSoft shall deliver to SMS the generally
available Release of the PeopleSoft Software if or when such Releases
are available.
b) Provide SMS with membership in PeopleSoft's Healthcare Advisory Group.
Such group meets periodically to discuss the direction of PeopleSoft's
efforts in the healthcare market. In addition, PeopleSoft agrees to
provide SMS with access to PeopleSoft's strategic marketing group for
the healthcare industry. Such access shall be available based upon a
mutually agreeable schedule.
c) Provide SMS with a copy of software marketing materials, price lists
and updates thereto for SMS's use solely in connection with this
Agreement. For certain software marketing materials, PeopleSoft may
charge SMS PeopleSoft's cost associated with producing and delivering
such marketing materials.
d) Provide SMS with Secondline Support and reasonable access to
PeopleSoft's standard Lotus Notes database or successor database.
PeopleSoft shall have no obligation to directly support SMS's
customers. In the event an End User is experiencing a Priority A Error,
as defined in Exhibit D, within the twelve month period following the
Effective Date (and such period shall continue for as long as SMS has
paid the applicable Software Support Services fee as specified in
Sections 4.f, 4.g, 4.h and 4.i of Exhibit B) and SMS is unable to
correct such error after utilizing all reasonable efforts, PeopleSoft
agrees that such End User may directly contact PeopleSoft for
assistance with such error, provided SMS notifies the PeopleSoft
support representative of the situation.
e) Provide other technical support, as reasonably requested by SMS on a
time and material basis. As of the Effective Date, PeopleSoft's
consulting rates are as follows:
<TABLE>
<S> <C>
Consultant $175/hour
Senior Consultant $200/hour
Manager $225/hour
Product Specialist $225/hour
</TABLE>
On-site consulting services are charged at a minimum increment of four
(4) hours per day.
f) Provide SMS with Releases in accordance with PeopleSoft's then current
commercial practices.
g) For the PeopleSoft Software used exclusively for SMS's internal use,
provide SMS with Maintenance as described in Exhibit F.
h) Provide SMS with [*] training units for use at any PeopleSoft training
facility in order for SMS to become a certified instructor and for
SMS's internal use. The fee for such training units are included in the
fees specified in Sections 4.a, 4.c and 4.d of Exhibit B. SMS must use
these training units within two years from the Effective Date. During
the first year of this Agreement, SMS may only utilize
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 6 of 51
<PAGE> 7
[*] training units which is sixty percent (60%) of the total number of
training units. During the second year of this Agreement, SMS must
utilize the remainder of the training units. One training unit is the
equivalent of one student day of training in a PeopleSoft training
class. As of the Effective Date, the fee associated with on-site
training is as follows: $1,500 per day instructor fee plus the
applicable number of training units per day per on-site training class
plus the reasonable travel and living expenses incurred by PeopleSoft
personnel in association with such training.
i) Provide SMS with [*] site support days to be used during the initial
installation of the PeopleSoft Software. During the first year of this
Agreement, SMS may only utilize nine (9) support days which is
approximately sixty percent (60%) of the total number of support days.
During the second year of this Agreement, SMS must utilize the
remainder of the support days. The fee for such on-site support days
are included in the fees specified in Sections 4.a, 4.c and 4.d of
Exhibit B. The services to be performed during the on-site days will be
the services reasonably requested by SMS.
j) Provide SMS with [*] hours of consulting services to assist with the
installation and/or implementation of the PeopleSoft Software at SMS or
End-User sites. The fee for such consulting services are included in
the fees specified in Sections 4.a, 4.c and 4.d of Exhibit B. SMS must
use these consulting hours within two years from the Effective Date.
During the first year of this Agreement, SMS may only utilize [*] which
is approximately sixty percent (60%) of the total number of consulting
hours. During the second year of this Agreement, SMS must utilize the
remainder of the consulting hours.
k) During the term of this Agreement, not to enter into substantially
similar marketing and distribution agreements for the PeopleSoft
Software in the Territory and in the Healthcare Industry with any SMS
Competitor that markets and/or licenses applications that compete with
SMS's Core Applications. The provisions of this Section 5.k shall be
construed to prevent an SMS Competitor, whether directly under contract
with PeopleSoft, or indirectly through any ownership, management or
contractual relationship, from marketing, distributing and licensing
the PeopleSoft Software in the Territory and in the Healthcare
Industry. One possible example, for illustrative purposes only, of a
permitted marketing and distribution agreement: PeopleSoft may enter
into a substantially similar marketing and distribution agreements for
the PeopleSoft Software in the Territory outside the Healthcare
Industry with an entity whose primary source of revenue is derived
outside the Healthcare Industry from a decision support services
application.
Except as otherwise provided in this Agreement, if SMS elects to market
or distribute products in the Territory which compete with the
PeopleSoft Software (as specified in Section 4.e), the restriction
contained in this Section 5.i shall no longer apply, provided
PeopleSoft gives SMS written notice at least ten (10) days prior to
PeopleSoft removing the restriction contained in this Section 5.i.
l) Bear and be liable for all costs and expenses initiated and incurred by
PeopleSoft in fulfilling its responsibilities under this Agreement,
except for travel and living expenses incurred by PeopleSoft personnel
performing services pursuant to this Agreement at the request of SMS.
m) To oversee the parties relationship under this Agreement, create with
SMS an Executive Team comprised of one senior management representative
from each organization. The Executive Team will meet at least twice a
year throughout the term of this Agreement and be responsible for
monitoring the progress of the relationship, recommending and causing
improvements to be implemented, and discussing mutual strategy as it
relates to the Agreement. The meetings shall alternate between
PeopleSoft's corporate headquarters and SMS's corporate headquarters.
In the event of a deadlock, the Executive Team will submit to dispute
escalation procedures pursuant to Section 19.
6. COMMERCIAL TERMS
a) SMS shall pay PeopleSoft the following amounts: (i) all amounts due to
PeopleSoft in accordance with Exhibit B; and (ii) all related shipping
charges and customs duties. Unless SMS provides PeopleSoft with
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 7 of 51
<PAGE> 8
a valid tax exemption or direct pay certificate, SMS is responsible for
all taxes, duties and customs fees concerning this Agreement and/or
services, excluding taxes based on PeopleSoft's income.
b) SMS is free to set its own prices for the licensing and Maintenance of
the PeopleSoft Software in the Territory. PeopleSoft shall provide SMS
with thirty days prior notice concerning any revisions to the
PeopleSoft price list. As of the Effective Date, PeopleSoft's intent is
to revise the PeopleSoft price list on an annual basis. All outstanding
SMS proposals will be valid for ninety (90) days from SMS's receipt of
PeopleSoft written notice of a revision to the PeopleSoft price list.
c) In the event SMS requires special technical or sales assistance, the
parties shall mutually agree in writing on payment of costs and
compensation on a case by case basis.
7. NOTIFYING AND SHIPMENT OF SOFTWARE
a) SMS shall, no later than fifteen (15) days following the end of each
quarter, inform PeopleSoft of the delivery of any PeopleSoft Software
sublicensed by SMS and shall provide to PeopleSoft a SMS quarterly
report, in the form attached as Exhibit K, containing sufficient
information to allow PeopleSoft to invoice SMS for such licenses. Such
quarterly report shall also contain an update for Exhibit G that
specifies all the entities that executed a license agreement with SMS
for any and all SMS's Core Application during the reporting period.
b) For the purposes of this Agreement, the quarters shall end on the
following dates:
February 28 (or February 29, if applicable)
May 31
August 31
November 30
c) The preprinted terms and conditions of any SMS order shall not
supersede the terms and conditions set forth herein.
d) Unless otherwise agreed, PeopleSoft Software shall be shipped to End
Users by SMS.
8. LIMITED USE OF TRADEMARKS AND TRADENAMES
a) All trademarks, service marks, trade names, logos or other words or
symbols identifying the PeopleSoft Software or PeopleSoft's business
(the "Marks") are and will remain the exclusive property of PeopleSoft,
whether or not specifically recognized or perfected under the laws of
the Territory. SMS will not take any action that jeopardizes
PeopleSoft's proprietary rights or acquire any rights in the Marks,
except the limited use rights specified in paragraph (c) below. Except
as otherwise agreed in writing, SMS will not register, directly or
indirectly, any trademark, service mark, trade name, copyright, company
name or other proprietary or commercial right which is identical or
confusingly similar to the Marks or which are translations thereof in
any other language(s). Upon PeopleSoft's request, SMS will execute such
instruments and take such actions that may be appropriate to register,
maintain or renew the registration of the Marks in PeopleSoft's name in
the Territory and/or protect PeopleSoft's interest in the Marks.
b) All trademarks, service marks, trade names, logos or other words or
symbols identifying SMS Products or SMS's business and specified on
Exhibit N (the " SMS Marks") are and will remain the exclusive property
of SMS, whether or not specifically recognized or perfected under the
laws of the Territory. PeopleSoft will not take any action that
jeopardizes SMS's proprietary rights or acquire any rights in the SMS
Marks, except the limited use rights specified in paragraph (c) below.
Except as otherwise agreed in writing, PeopleSoft will not register,
directly or indirectly, any trademark, service mark, trade name,
copyright, company name or other proprietary or commercial right which
is identical or confusingly similar to the SMS Marks or which are
translations thereof in any other language(s).
Page 8 of 51
<PAGE> 9
c) SMS may use PeopleSoft's Marks which relate to the PeopleSoft Software
solely in connection with SMS's activities under this Agreement,
provided SMS clearly identifies PeopleSoft's ownership of such Marks.
PeopleSoft may use SMS's Marks solely in connection with PeopleSoft's
activities under this Agreement, provided PeopleSoft clearly identifies
SMS's ownership of such Marks. Each party shall submit to the other all
advertising and marketing material using the other party's trademarks,
service marks, trade names, logos or other words or symbols identifying
such party to the owner of such marks for review and approval prior to
release by the non-owner. Such consent shall not be unreasonably
withheld. Furthermore, such consent shall be deemed to have been
obtained if the party seeking approval has not received any objection
to the submitted materials within thirty (30) days after the submission
of the material. Both parties also reserve the right to require the
other party to discontinue use of any advertising and marketing
materials related to the subject matter of this transaction that such
party reasonably believes will have a detrimental effect on its
business.
9. PAYMENTS
a) All payments shall be made in U.S. dollars by payment to PeopleSoft's
bank account specified in Exhibit B or as changed by PeopleSoft from
time to time upon notice to SMS. Unless otherwise specified herein, all
payments are due within thirty (30) days of SMS's receipt of a correct
invoice Overdue payments shall accrue interest at the lesser of twelve
per cent (12%) per annum or the maximum rate permitted by applicable
law. However, if SMS pays PeopleSoft an amount which SMS disputes and
upon settlement of such dispute, it is determined that PeopleSoft is
not entitled to such amounts, PeopleSoft shall pay the amounts to which
it is found not to be entitled to SMS together with interest thereon
payable at a rate of twelve percent (12%) per annum or the maximum rate
permitted by applicable law from the date such amounts were paid to
PeopleSoft through the date of refund of such payments to SMS. SMS
shall pay all taxes and duties associated with this Agreement, other
than taxes based on PeopleSoft's net income.
b) All amounts payable by SMS under this Agreement are exclusive of any
tax, levy or similar governmental charge that may be assessed within
the Territory, whether based on gross revenue, the delivery, possession
or use of the PeopleSoft Software, the execution, delivery and
performance of this Agreement or otherwise. If SMS is legally required
to withhold any income or remittance tax from amounts payable to
PeopleSoft, then (i) SMS will promptly notify PeopleSoft, (ii) the
amount payable will be automatically increased to the full extent
required to offset such tax, so that the amount remitted to PeopleSoft,
net of all taxes, equals the amount stated in the invoice, and (iii)
SMS will promptly furnish PeopleSoft with the official receipt of
payment of such tax to the appropriate taxing authority. SMS agrees to
assume all responsibility for collection and payment of any value added
or sales taxes applicable in the Territory.
10. TERM
This Agreement shall commence on the Effective Date and, unless
otherwise sooner terminated as provided herein, shall terminate and
expire at the end of the Term.
Upon expiration of the Term, this Agreement shall be extended
automatically for a renewal term(s) of one (1) year unless SMS notifies
PeopleSoft, in writing at least thirty days prior to the anniversary of
the Effective Date, of its intention not to renew this Agreement.
PeopleSoft may only terminate this Agreement in accordance with the
terms and conditions of this Agreement, including Sections 16 and 17,
Default and Termination, respectively.
In the event SMS has a Paid Up License as defined in Section 4.e of
Exhibit B and this Agreement is not renewed, SMS may continue to
distribute the PeopleSoft Software as outlined in this Agreement;
however, PeopleSoft shall have no obligation to provide any new
Releases or the like.
Page 9 of 51
<PAGE> 10
11. RECORDS AND REPORTS
a) SMS shall keep full, true and accurate records and accounts in
accordance with generally accepted accounting practices to show all
amounts payable by SMS to PeopleSoft. These records and accounts shall
be retained for a period of at least two (2) years and shall include,
at a minimum, for each License and Maintenance Agreement executed: (i)
the name and address of the End User; (ii) the date of shipment; and
(iii) a copy of each License Agreement and Maintenance Agreement.
b) SMS shall keep all records at SMS's principal place of business. On an
annual basis and with sixty days prior notice to SMS, PeopleSoft shall
have the right to conduct audits of the records to determine SMS's
compliance with this Agreement. PeopleSoft shall bear the expenses of
the audit, however, in the event any such audit reveals that SMS has
understated the amount that SMS is obligated to pay PeopleSoft under
this Agreement by an amount of more than five percent (5%) of the
amount paid to PeopleSoft during the period audited, SMS shall pay, in
addition to the amounts due, all reasonable costs associated with the
audit.
c) PeopleSoft shall keep all records at PeopleSoft's principal place of
business. On an annual basis and with sixty days prior notice to
PeopleSoft, SMS shall have the right to conduct audits of the records
to determine PeopleSoft 's compliance with this Agreement. SMS shall
bear the expenses of the audit, however, in the event any such audit
reveals that PeopleSoft has understated the amount that PeopleSoft is
obligated to credit to SMS under this Agreement in accordance with
Section 5 of Exhibit B by an amount of more than five percent (5%) of
the amount to be credited to SMS during the period audited, PeopleSoft
shall pay, in addition to the amounts due, all reasonable costs
associated with the audit.
12. COMPLIANCE WITH LAWS
a) Each party will, at its expense, obtain and maintain the governmental
and other authorizations, registrations and filings that may be
required under the laws of the Territory to execute or perform this
Agreement. Each party will otherwise comply with all laws, regulations
and other legal requirements that apply to this Agreement, including
tax and foreign exchange legislation.
b) At the expense of the requesting party, either party to this Agreement
may request that the other party provide the requesting party with
assurances and official documents to verify the other party's
compliance with this Section.
13. TITLE AND PROTECTION OF SOFTWARE AND CONFIDENTIAL INFORMATION
a) PeopleSoft retains ownership of all intellectual property rights
(including copyright and trademarks) in and relating to the PeopleSoft
Software. If an enhancement, improvement or other modification is
created with PeopleTools, SMS shall have all right, title and interest
only in such enhancement, improvement or other modification that
remains after PeopleTools has been removed from such enhancement,
improvement or other modification.
b) Each party agrees to take the necessary precautions to maintain the
confidentiality of Confidential Information pertaining to or disclosed
in connection with this Agreement by using at least the same degree of
care as such party employs with respect to its own Confidential
Information of a like-kind or nature, but in no case less than
reasonable care to maintain confidentiality. Each party shall only use
such Confidential Information in connection with its performance of
this Agreement. Confidential Information does not include information
which is generally available to the public on an unrestricted basis;
previously known or independently developed outside this Agreement; or
lawfully disclosed by a third party without restriction.
Page 10 of 51
<PAGE> 11
14. REPRESENTATIONS / LIMITATION OF LIABILITY
a) Each party represents that it has the right to enter into this
Agreement. SMS warrants that it has the authority to bind its
affiliates, subsidiaries and operating divisions to the terms and
conditions of this Agreement.
b) PeopleSoft warrants that it has the authority to grant to SMS all the
rights contained herein, including the right to grant licenses to use
and sublicense the PeopleSoft Software and the third party software
specified in Section 1.h that is embedded in the application
programming code for the PeopleSoft Software. In the event, PeopleSoft
embeds additional third party software in the application programming
code for the PeopleSoft Software, PeopleSoft shall extend this warranty
to cover such additional third party software.
c) PeopleSoft warrants that (i) PeopleSoft uses a reliable virus detection
system, therefore, PeopleSoft represents that to the best of its
knowledge that the PeopleSoft Software contains no computer viruses of
any kind or form and (ii) the PeopleSoft Software does not contain any
procedures or programs which can disable or destroy the PeopleSoft
Software. In addition, PeopleSoft warrants that the PeopleSoft Software
does not and shall not contain any lock, clock, timer, counter, copy
protection feature, replication device or defect ("virus" or "worm" as
such terms are commonly used in the computer industry), CPU serial
number reference, or other device which: (i) might lock, disable or
erase the PeopleSoft Software; (ii) prevent SMS from fully utilizing
the PeopleSoft Software; or (iii) require action or intervention by
PeopleSoft or any other person or entity to allow SMS to utilize the
PeopleSoft Software.
d) PeopleSoft represents that it has the right to enter into this
Agreement. PeopleSoft represents that the PeopleSoft Software does not
infringe any patent, copyright or other third party intellectual
property rights under the laws of any country within the Territory when
used in accordance with the published specifications. PeopleSoft
represents that the PeopleSoft Software will perform substantially in
accordance with PeopleSoft's published specifications for a period of
one (1) year from delivery to SMS and such warranty shall continue for
as long as SMS has paid the applicable Software Support Services fee.
The initial one (1) year warranty is provided at not cost to SMS.
PeopleSoft shall have no responsibility for any modifications or
alterations carried out by the SMS or any party other than PeopleSoft
PeopleSoft's sole obligation to remedy any breach of this warranty
shall be to provide Secondline Support in an effort to remedy the
defect. PeopleSoft does not represent that the PeopleSoft Software is
error-free. SMS shall make no representation or warranty concerning the
PeopleSoft Software which would expand the scope of the representations
made by PeopleSoft in this Agreement.
e) PEOPLESOFT DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
f) Except for the indemnification provided in the section entitled
"Indemnification" below and except for claims for bodily injury or
tangible property damage to extent caused by the proven fault of
PeopleSoft, PeopleSoft's liability for damages under this Agreement
(whether in contract or tort) shall not exceed the amounts paid by SMS
to PeopleSoft. EXCEPT FOR LIABILITY RELATING TO THE BREACHES OF
INTELLECTUAL OR PROPRIETARY RIGHTS, NEITHER PARTY WILL BE LIABLE FOR
ANY LOST DATA, LOST PROFITS, INCIDENTAL, CONSEQUENTIAL OR INDIRECT
DAMAGES OR ANY KIND, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
15. INDEMNIFICATION
a) PeopleSoft shall indemnify and defend SMS against any claim that the
PeopleSoft Software infringes patent, copyright or other third party
intellectual property rights under the laws of any country within the
Territory when used by SMS or its End Users in accordance with the
terms of this Agreement; provided
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<PAGE> 12
SMS gives PeopleSoft prompt notice of such claim and is given
information, reasonable assistance and authority to defend or settle
the claim. Notwithstanding anything to the contrary herein,
PeopleSoft's liability under this Section 15.a is limited to the
amounts award against SMS by a court or agreed to in settlement by
PeopleSoft. PeopleSoft shall have the right, at its option, either to
obtain for SMS the right to continue using the product, substitute
other software with equivalent functional capabilities or modify the
product so that it is no longer infringing while retaining equivalent
functions. If such options are not reasonably available, SMS's remedy
shall be to terminate this Agreement, to cease using and return to
PeopleSoft all infringing copies of the PeopleSoft Software in SMS's
possession and receive the amount of fees paid to PeopleSoft for such
copies depreciated on a five year straight-line method. Notwithstanding
the foregoing, PeopleSoft shall have no obligation or liability for any
claim for infringement of the intellectual property rights of any party
which is based on or arises out of (i) any act or omission on the part
of the SMS, (ii) compliance with designs or specifications provided by
or on behalf of the SMS or any third party, (iii) modifications or
alterations carried out by the SMS or any party other than PeopleSoft,
(iv) the use in connection with the PeopleSoft Software of any software
not supplied by PeopleSoft, (v) the use of the PeopleSoft Software in a
manner not authorized or contemplated by this Agreement, or (vi) the
failure to promptly install any Release. The foregoing states the
entire liability and obligation of PeopleSoft to the SMS for
infringement of the intellectual property rights of any third party.
b) SMS shall indemnify and defend PeopleSoft against any damage, loss,
liability or expense that PeopleSoft may incur (i) with respect to the
acts or omissions of any of SMS's employees or agents while at
PeopleSoft's facilities or (ii) as a result of (1) any modification or
amendment of the prescribed terms of the License Agreement or
Maintenance Agreement that PeopleSoft did not specifically approve, (2)
any warranty, condition, representation, indemnity or guarantee granted
by SMS with respect to the PeopleSoft Software in addition to or in
lieu of the limited warranties specified in the Section of this
Agreement titled "Representations and Limitations of Liability", (3)
any omission or inaccuracy in SMS's advertisements and promotional
materials that relate to PeopleSoft or the PeopleSoft Software, (4) any
customization or other modification of the PeopleSoft Software by SMS
or its employees or agents, including, without limitation, any
customization or other modification made with PeopleTools, or (5) SMS's
failure to comply with the Sections of this Agreement titled "License
Exclusions", "Compliance with Laws" or "Title and Protection of
Software and Confidential Information"; provided PeopleSoft gives SMS
prompt notice of such claim and is given information, reasonable
assistance and authority to defend or settle the claim. Notwithstanding
anything to the contrary herein, SMS's liability under this Section
15.b is limited to the amounts award against PeopleSoft by a court or
agreed to in settlement by SMS. This Section will not be construed to
limit or exclude any other claims or remedies which PeopleSoft may
assert under this Agreement or by law.
16. DEFAULT
a) Any of the following shall constitute an Event of Default: (i) SMS
fails to pay any sum due under this Agreement within thirty (30) days
after the time period specified in this Agreement; or (ii) either party
fails to perform any of its other material obligations under this
Agreement and such failure remains uncured for thirty (30) days after
receipt of written notice thereof.
b) In any Event of Default occurs, the nondefaulting party, in addition to
any other rights available to it under law or equity, may withhold its
performance (other than payment of sums due and owing to the other
party) under and/or may immediately terminate this Agreement and any
rights granted hereunder by written notice to the defaulting party.
Unless otherwise provided in this Agreement, remedies shall be
cumulative and there shall be no obligation to exercise a particular
remedy.
17. TERMINATION
a) All licenses properly granted by SMS to End Users pursuant to this
Agreement shall survive termination of this Agreement. Furthermore,
SMS's internal use license shall survive termination of this Agreement
unless PeopleSoft has terminated the internal use license pursuant to
the terms and conditions of Exhibit E
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<PAGE> 13
attached hereto. In such event, PeopleSoft, in addition to any other
rights available to it under law or equity, may terminate this
Agreement and the internal use licenses granted hereunder by written
notice to SMS.
b) In the event one party hereto merges with, or sells substantially all
of its assets to, or undergoes a Change of Control involving, a
competitor (as the term competitor is described in Section 4.e for
PeopleSoft competitor and Section 18 for SMS Competitor) of the other
party hereto, such other party may terminate this Agreement. An example
for illustrative purposes only: in the event of a Change of Control of
PeopleSoft to an SMS competitor, SMS (not PeopleSoft) may terminate
this Agreement.
c) Except if this Agreement is terminated due to an Event of Default by
PeopleSoft, immediately upon termination of this Agreement, all sums
that are outstanding under this Agreement shall be paid to the
appropriate party, and the due dates of all payments shall be
automatically accelerated to the date of termination.
In the Event of Default by PeopleSoft, SMS may terminate this Agreement
as specified in Section 16.b above and SMS shall immediately cease to
distribute the PeopleSoft Software and shall return all copies of the
PeopleSoft Software except for the copy required to provide support
services to End Users as specified in the paragraph below. The
preceding sentence shall not apply if SMS has a Paid-Up License and
elects to continue to distribute the PeopleSoft Software as outlined in
this Agreement; however, PeopleSoft shall have no obligation to provide
any new Releases or the like.
Except in the event of default by SMS, if this Agreement is terminated,
SMS shall have the right to continue using the PeopleSoft Software to
provide support services to End Users for the remaining of the
then-current term of the SMS End User License Agreement and PeopleSoft
will continue to provide support services to SMS in accordance with
PeopleSoft's then-current rate structure. If the Agreement was
terminated due to SMS's default or if SMS is unable or does not elect
to provide support services to End Users, PeopleSoft agrees, except as
otherwise stated herein, to offer support services to affected End
Users subject to PeopleSoft's then current, generally applicable
support terms and fees, including, without limitation, the requirement
to be on PeopleSoft's current Release of the PeopleSoft Software. SMS
understands and agrees that PeopleSoft's support service offer does not
extend to SMS's Timeshare Operation and the affected End Users.
Except for perpetual licenses specified herein, SMS shall return to
PeopleSoft or its designee, or certify in writing to PeopleSoft that
all copies or partial copies of the PeopleSoft Software in SMS's
possession or control have been destroyed.
d) Upon termination of this Agreement, SMS shall immediately (i) cease to
use any documentation or advertising identifying it as a PeopleSoft
distributor or representative of PeopleSoft, and (ii) remove promptly
all signs, cancel all business listings, and take such other reasonable
action as may be necessary to remove its identification as such a
PeopleSoft distributor or representative.
Upon termination of this Agreement, PeopleSoft shall immediately (i)
cease to use any materials or advertising identifying SMS as a
PeopleSoft distributor, and (ii) remove promptly all signs, cancel all
business listings, and take such other reasonable action as may be
necessary to remove any identification of SMS as a PeopleSoft
distributor.
e) In addition to this section, the sections entitled 'License
Exclusions', 'Title and Protection of Software and Confidential
Information,' and 'Representations / Limitation of Liability', and
'Indemnification', shall survive termination of this Agreement.
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<PAGE> 14
18. DEFINITIONS
"Change of Control" means that a person, firm, company or entity
acquires more than fifty percent (50%) or more of the voting shares or
equity interest in one of the parties to this Agreement.
"Confidential Information" means all written and/or oral information
identified by a party as confidential or otherwise reasonably
understood as confidential by its nature.
"Current Financials ICO User" means any person, firm, company or entity
identified on Exhibit G who is using SMS's General Financials Product
at such entity's in-house computer operation on an IBM or IBM
compatible mainframe.
"Current Financials Non-ICO User" means any person, firm, company or
entity identified on Exhibit G who is using SMS's General Financials
Product in a non- IBM or non-IBM compatible mainframe in-house computer
operation (i.e.: such product is used in a time sharing operation or at
user's in-house computer operation on an non- IBM or non-IBM compatible
mainframe).
"Current HRMS ICO User" means any person, firm, company or entity
identified on Exhibit G who is using SMS's Human Resources Product at
such entity's in-house computer operation on an IBM or IBM compatible
mainframe.
"Current HRMS Non-ICO User" means any person, firm, company or entity
identified on Exhibit G who is using SMS's Human Resources Product in a
non- IBM or non-IBM compatible mainframe in-house computer operation
(i.e.: such product is used in a time sharing operation or at user's
in-house computer operation on an non- IBM or non-IBM compatible
mainframe).
"Designated European Countries" means the countries of the United
Kingdom, France, Germany and the Netherlands.
"Distribution Fee" means the fee paid by SMS to PeopleSoft for the
right to have access to the PeopleSoft Software for purposes of
distribution and sublicensing as set forth in this Agreement. Such fee
does not include royalties associated with SMS's sublicensing of the
PeopleSoft Software.
"Documentation" means only technical publications relating to the use
of the PeopleSoft Software, such as reference, user, installation,
systems administrator and technical guides, delivered by PeopleSoft to
SMS.
"Effective Date" means the date set forth in Exhibit B as the effective
date of this Agreement.
"End User(s)" means any person, firm, company or entity in the Health
Care Industry who is located in the Territory and who acquires a
license to use the PeopleSoft Software from SMS for internal production
end user purposes and not for redistribution in accordance with the
terms and conditions of this Agreement.
"Health Care Industry" means any person, firm, company or entity which
is engaged in the business of providing health services through
entities, including, but not limited to, hospital, infirmary or clinic.
"License Agreement" means a form of end user license agreement
containing (i) confidentiality and scope of use provisions
substantially similar to the form attached hereto as Exhibit I and (ii)
a third party beneficiary rights provision that shall allow PeopleSoft
the right to enforce the confidentiality and scope of use provisions.
Page 14 of 51
<PAGE> 15
"Maintenance" means support services provided by SMS to End Users as
described in the Maintenance Agreement.
"Maintenance Agreement" means a form of end user support services
agreement substantially in the form attached hereto as Exhibit J. SMS
may unilaterally modify Exhibit J as deemed necessary by SMS. SMS shall
provide to PeopleSoft copies of all such changes that affect the
provision of Software support by SMS.
"New Financials ICO User" means (a) an entity who is not a SMS End User
that executes a license with SMS for PeopleSoft Financial Software or
(b) an entity who is a SMS End User but is not a Current Financials ICO
User and such entity executes a license with SMS for PeopleSoft
Financial Software. All such licenses must be issued in accordance with
the terms and conditions of this Agreement and are for use at such
entity's in-house computer operation on an IBM or IBM compatible
mainframe.
"New Financials Non-ICO User" means (a) an entity who is not a SMS End
User that executes a license with SMS for PeopleSoft Financial Software
or (b) an entity who is a SMS End User but is not a Current Financials
Non-ICO User executes a license with SMS for PeopleSoft Financial
Software. All such licenses must be issued in accordance with the terms
and conditions of this Agreement and are for use in a non- IBM or
non-IBM compatible mainframe in-house computer operation (i.e.: such
product is used in a time sharing operation or at user's in-house
computer operation on an non- IBM or non-IBM compatible mainframe).
"New HRMS ICO User" means (a) an entity who is not a SMS End User that
executes a license with SMS for PeopleSoft HRMS or (b) an entity who is
a SMS End User but is not a Current HRMS ICO User executes a license
with SMS for PeopleSoft HRMS Software. All such licenses must be issued
in accordance with the terms and conditions of this Agreement and are
for use at such entity's in-house computer operation on an IBM or IBM
compatible mainframe.
"New HRMS Non-ICO User" means (a) an entity who is not a SMS End User
that executes a license with SMS for PeopleSoft HRMS Software or (b) an
entity who is a SMS End User but is not a Current HRMS Non-ICO User
that executes a license with SMS for PeopleSoft HRMS Software. All such
licenses must be issued in accordance with the terms and conditions of
this Agreement and are for use in a non- IBM or non-IBM compatible
mainframe in-house computer operation (i.e.: such product is used in a
time sharing operation or at user's in-house computer operation on an
non- IBM or non-IBM compatible mainframe).
"PeopleSoft Financial Software" means all or any portion of the
machine-readable and executable source code software programs
identified in Exhibit A as Financial Software and all corrections,
Releases and associated Documentation and updates thereto.
"PeopleSoft HRMS Software" means all or any portion of the
machine-readable and executable source code software programs
identified in Exhibit A as HRMS Software and all corrections, Releases
and associated Documentation and updates thereto.
"PeopleSoft Software" means all or any portion of the machine-readable
and executable source code PeopleSoft HRMS Software and PeopleSoft
Financial Software programs identified in Exhibit A and all
corrections, Releases and associated Documentation and updates thereto;
excluding third party software products remarketed by PeopleSoft.
Software does not include source code to PeopleTools.
"Release" means one (1) copy of all published revisions to the printed
Documentation and one (1) copy of new versions, Releases and other
enhancements to the PeopleSoft Software which enhances the existing
functionality of the PeopleSoft Software but does not create a new
module with separate and distinct functionality to satisfy another
business operation that are designated by PeopleSoft as new products
for which it charges separately.
Page 15 of 51
<PAGE> 16
"Secondline Support" means technical support in accordance with the
terms and conditions of Exhibit D provided by PeopleSoft solely to
SMS's technical support organization.
"Server" means a database or file server which may be accessed by a
network of personal computers.
"SMS Competitor" shall mean any entity in the Territory and in the
Healthcare Industry whose primary source of revenue is derived from
applications that compete with SMS's Core Applications in the Territory
and in the Healthcare Industry.
"SMS's Core Applications" are any of the following SMS application
functionality: human resources, general financial services, provider
billing services, patient management systems, order processing systems,
master patient index repositories, clinical repositories, nursing and
results reporting, electronic data interchange services and decision
support services as such functionality is marketed and distributed by
SMS to the Healthcare Industry.
"SMS End User" means any person, firm, company or entity listed on
Exhibit G (as such Exhibit is revised each quarter) who has acquired
from SMS a license to use SMS's Core Applications for production end
user purposes and not for redistribution.
"Substantial "Selling" Effort" as used herein shall be mutually and
reasonably determined by PeopleSoft and SMS, in writing as evidenced by
the submittal and acceptance of a form substantially similar to Exhibit
O, on a case by case basis based upon industry recognized factors
involved in a software "sales" cycle.
"Term" means the period defined in Exhibit B.
"Territory" means the geographic area(s) listed in Exhibit B and other
countries in which PeopleSoft has granted distribution rights to SMS
pursuant to a mutually agreed upon written amendment to this Agreement.
"Timeshare Operation" means SMS's timeshare business utilizing Human
Resources and General Financial applications (i.e.: multiple clients
operating from a single copy of the Software installed at SMS's
Information Systems Center).
"Release" means one (1) copy of all published revisions to the printed
Documentation and one (1) copy of new versions of the PeopleSoft
Software which enhances the existing functionality of the PeopleSoft
Software but does not create a new module with separate and distinct
functionality to satisfy another business operation that are designated
by PeopleSoft as new products for which it charges separately.
19. DISPUTE ESCALATION PROCEDURES:
During the Term, the parties shall use reasonable efforts and act in
good faith to resolve disputes arising out of the Agreement in an
efficient and amicable manner, as follows. At each level of escalation,
five (5) business days are provided in which to resolve a dispute, and
if the dispute remains unresolved after five (5) business days, the
issue will be raised to the next level.
First notification will be made to:
PeopleSoft SMS
---------- ---
Account Manager GFS Product Owner
If resolution of the dispute cannot be reached at this level, further
escalation will be made to:
PeopleSoft SMS
---------- ---
Regional Vice President of Services Solutions Manager
Page 16 of 51
<PAGE> 17
If resolution of the dispute cannot be reached at this level, further
escalation will be made to:
PeopleSoft SMS
---------- ---
Regional General Manager Vice President
- Health Solutions
If resolution of the dispute cannot be reached at this level, further
escalation will be made to:
PeopleSoft SMS
---------- ---
President President
PeopleSoft and SMS may change the above stated contacts by providing
written notice to the other party.
In addition, legal and technical resources of each party necessary to
resolve the dispute will be contacted and utilized as required.
20. MANDATORY ARBITRATION
a) General: After the Dispute Escalation Procedures set forth in Section
19 have been exhausted and excluding a claim for injunctive relief, any
remaining controversy or claim arising out of or relating to this
Agreement or the existence, validity, breach or termination thereof,
whether during or after its term shall be finally determined by
compulsory arbitration. The arbitration shall be conducted in
accordance with the Commercial Arbitration Rules and Supplementary
Procedures of the American Arbitration Association ("AAA") as modified
or supplemented under this Section, notwithstanding any choice of law
provision in this Agreement.
b) Proceeding: The arbitration proceeding will take place in San
Francisco, California. Each party shall comply with a single request
for production of documents. If disputes arise concerning these
requests, the arbitrators shall have sole and complete discretion to
determine the disputes. The Arbitration panel shall consist of three
arbitrators, each qualified in the distribution of computer products
field. Each party shall have the right to appoint a single Arbitrator,
with the third Arbitrator appointed by mutual agreement between the two
previously appointed arbitrators. The arbitrators shall give effect to
statutes of limitation in determining any claim, and any controversy
concerning whether an issue is arbitrable shall be determined by the
arbitrators. The arbitration panel shall deliver a written opinion
setting forth findings of fact and the rationale for the decision. The
arbitrator shall reconsider the decision once upon the motion and at
the expense of the party requesting reconsideration. The parties
expressly agree that the arbitrators will be empowered to, at
PeopleSoft' request, (i) to issue an interim order or award requiring
SMS to cease distributing and using the PeopleSoft Software pending the
outcome or the arbitration or (ii) grant injunctive relief. The Section
of this Agreement entitled "Confidentiality" shall apply to the
arbitration proceeding, all evidence taken and the opinion. The
institution and maintenance of an action for judicial relief or pursuit
of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such
action for judicial relief.
c) Award: The arbitral award will be the exclusive remedy of the parties
for all claims, counterclaims, issues or accountings presented or plead
to the arbitrators. The award will (i) be granted and paid in U.S.
Dollars exclusive of any tax, deduction or offset and (ii) include
interest from the date of breach or other violation of the Agreement
until the award is fully paid, computed at the then-prevailing LIBOR
rate. Judgment upon the decision rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
d) Fees and Expenses: The fees of the arbitrators and the expenses
incident to the arbitration proceedings shall be borne equally by the
parties to such arbitration. All other expenses shall be borne by
Page 17 of 51
<PAGE> 18
the party incurring such expenses. Any additional costs, fees or
expenses incurred in enforcing the arbitral award will be charged
against the party resisting its enforcement.
e) Notification: The party which intends to initiate an arbitration
proceeding shall notify the other party or parties of such intention by
registered mail, return receipt requested, describing the matter in
dispute, naming its arbitrator and demanding that the other party name
its arbitrator within four weeks from the date of such notification.
f) Failure to Name Arbitrator: If the other party fails to name its
arbitrator within the above period after the giving of such notice, or
if the two arbitrators do not appoint the third arbitrator within four
weeks after the selection of the second arbitrator, then the American
Arbitrator Association shall at the request of one of the parties,
appoint the second or third arbitrator, as the case may be.
21. GENERAL
a) All notices or demands shall be in writing and sent to the address set
forth above by registered mail, return receipt requested or sent by fax
along with a copy sent by US mail posted on the same date as the fax
(SMS fax number 610/219-1931 or PeopleSoft fax number 510/274-9700, as
appropriate) or express courier if delivery is confirmed by such form
of transmission. Either party may change its address by giving ten days
prior written notice. Notices to PeopleSoft shall be sent to the
attention of Vice President and General Counsel. Notices to SMS shall
be sent to the attention of Vice President, Finance.
b) Neither party may assign this Agreement (by operation of law or
otherwise) without the prior written consent of the other party, and
any prohibited assignment shall be null and void. Notwithstanding the
foregoing, either party may assign its rights to (i) its wholly owned
affiliates or subsidiaries or (ii) in the event of a merger,
consolidation or acquisition of all or substantially all of the assets
of a party hereto, to the resulting entity, provided that such entity
is not a competitor (as the term competitor is described in Section 4.e
for PeopleSoft competitor and Section 18 for SMS Competitor) of the
other party.
In the event one party hereto assigns this Agreement or acquires
another entity or merges, consolidates or is acquired by a third party
or undergoes a Change of Control or the like, the scope of this
Agreement, including, without limitation, the rights granted herein, is
not expanded beyond the scope originally intended as of the Effective
Date. An example for illustrative purposes only: if SMS acquires
another entity, the definition of SMS End User shall not be expanded to
include the customers of such acquired entity.
If SMS desires to expand the scope of this Agreement to cover such
Change of Control and the like, PeopleSoft agrees that the add-on
distribution fee shall be proportionate to the initial Distribution Fee
specified in Exhibit B. The calculation shall compare the market
potential of the expanded customer base to the customer base specified
on Exhibit G.
c) Neither party shall be liable for any failure to perform due to causes
beyond its reasonable control.
d) The relationship of the parties is that of independent contractors.
Except as set out in this Agreement nothing shall constitute the
parties as partners, joint venturers or co-owners, constitute SMS as
the agent, employee or representative of PeopleSoft, or empower SMS to
act for, bind or otherwise create or assume any obligation on behalf of
PeopleSoft or any of its parents subsidiaries or affiliates or any
other companies whose business is managed or controlled by PeopleSoft.
e) This Agreement constitutes the entire agreement between the parties and
may only be modified by a written instrument signed by each party's
authorized officers. This Agreement supersedes and replaces any prior
proposals, communications or agreements between the parties concerning
the subject matter hereof.
Page 18 of 51
<PAGE> 19
f) Systems Integrator and PeopleSoft agree that during the term of this
Agreement, except with the prior approval of the other party, neither
party will solicit for employment any employee of the other party who
shall have performed activities under this Agreement.
g) Except as provided in Sections 2.a, 2.b and 2.d, any other consent
and/or approval that is required to be given under this Agreement shall
not be unreasonably withheld by the other party.
The parties have executed this Agreement by their duly authorized
representatives as of the Effective Date.
Shared Medical Systems Corporation PEOPLESOFT, INC.
/s/ Marvin S. Cadwell /s/ Ken Horowitz
- ------------------------------------ ----------------------------
Authorized Signature Authorized Signature
Marvin S. Cadwell, President and CEO Ken Horowitz, Vice President
- ------------------------------------ ----------------------------
Printed Name and Title Printed Name and Title
Page 19 of 51
<PAGE> 20
EXHIBIT A
DISTRIBUTION USE
PEOPLESOFT SOFTWARE
A. PeopleSoft HRMS Software:
PeopleSoft Human Resources
PeopleSoft Benefits Administration
PeopleSoft FSA Administration
PeopleSoft Payroll
PeopleSoft Payroll Interface
PeopleSoft Time and Labor -- If or when such module becomes
commercially available
B. PeopleSoft Financial Software:
PeopleSoft General Ledger
PeopleSoft Accounts Receivable
PeopleSoft Accounts Payable
PeopleSoft Asset Management
PeopleSoft Purchasing
PeopleSoft Inventory -- PeopleSoft shall deliver the pre-release Beta
version of the Software. Such Beta version shall be delivered "as-is".
If or when the module is commercially available, PeopleSoft shall
provide such version to SMS.
Page 20 of 51
<PAGE> 21
EXHIBIT B
TERRITORY, PERFORMANCE AND COMPENSATION SCHEDULE
This document is an Exhibit to the PeopleSoft SMS Agreement ("Agreement")
between PeopleSoft, Inc. ("PeopleSoft") and SMS ("SMS"). Capitalized terms used
herein shall have the same meaning as set forth in the Agreement unless
otherwise defined herein.
1. EFFECTIVE DATE.
The Effective Date of the Agreement is August 25, 1995
2. TERM.
The Term of the Agreement is ten (10) years. Upon the fifth anniversary,
PeopleSoft and SMS agree that the royalties and Software maintenance fee stated
herein shall be adjusted in accordance with the adjustments to such items in
PeopleSoft's Price List. An example for illustrative purposes only: On August
15, 2000, if the license fee for PeopleSoft HRMS Software has increased by
twelve percent (12%), the royalties specified herein for PeopleSoft HRMS
Software shall increase by twelve percent (12%).
Upon the commencement of each renewal term, PeopleSoft and SMS agree that the
royalties and Software maintenance fee stated herein shall be adjusted in
accordance with the adjustments to such items in PeopleSoft's Price List. An
example for illustrative purposes only: On August 15, 2000, if the license fee
for PeopleSoft HRMS Software has increased by twelve percent (12%), the
royalties specified herein for PeopleSoft HRMS Software shall increase by twelve
percent (12%).
3. TERRITORY.
The Territory shall consist only of the following countries as constituted as of
the Effective Date: United States and Puerto Rico.
4. AMOUNTS PAYABLE TO PEOPLESOFT.
a) For SMS's appointment as system integrator pursuant to this Agreement,
SMS shall pay PeopleSoft a one-time Distribution Fee of one million six
hundred thousand dollars ($1,600,000) as shown below. SMS understands
that $1,400,000 of the total $1,600,000 is non-refundable and
non-cancelable.
$1,400,000 within thirty (30) days following the Effective Date;
$200,000 upon commercial availability of the Inventory Software. In the
event PeopleSoft does not deliver the commercial release of the
Inventory Software, SMS may retain this $200,000 as liquidated damages.
b) For each copy of the PeopleSoft Software licensed or copied by SMS
during the Term, SMS shall also pay PeopleSoft a royalty fee per
license as follows:
PeopleSoft HRMS Software licensed by SMS
[*] per each license to a Current HRMS Non-ICO User or a New HRMS
Non-ICO User;
[*] per each license to a Current HRMS ICO User; and
Fifty percent (50%) of PeopleSoft's then current list license fee per
each license to a New HRMS ICO User unless PeopleSoft agrees to lesser
amount.
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 21 of 51
<PAGE> 22
PeopleSoft Financial Software licensed by SMS
[*] per each license to a Current Financials Non-ICO User or a New
Financials Non-ICO User;
[*] per each license to a Current Financials ICO User ; and
Fifty percent (50%) of PeopleSoft's then current list license fee per
each license to a New Financials ICO User unless PeopleSoft agrees to a
lesser amount.
c) In addition to any and all amounts due hereunder, SMS shall pay to
PeopleSoft the non-cancelable and non-refundable guaranteed minimum
royalty amounts shown below:
i) On June 30, 1996, the difference, if any, between [*] and the
royalties paid to PeopleSoft by SMS under Section 4.b above during the
first year of the Agreement.
ii) On June 30, 1997, the difference, if any, between [*] and the
royalties paid to PeopleSoft by SMS under Section 4.b above during the
Term of the Agreement.
iii) On June 30, 1998, the difference, if any, between [*] and the
royalties paid to PeopleSoft by SMS under Section 4.b above during the
Term of the Agreement.
iv) On June 30, 1999, the difference, if any, between [*] and the
royalties paid to PeopleSoft by SMS under Section 4.b above during the
Term of the Agreement.
v) On June 30, 2000, the difference, if any, between [*] and the
royalties paid to PeopleSoft by SMS under Section 4.b above during the
Term of the Agreement.
If, after the twenty-four (24) month period from the Effective Date,
SMS continues to operate the PeopleSoft Software in SMS's Timeshare
Operation, PeopleSoft and SMS agree that the guaranteed minimum
royalties specified in Section 4(c)(iv) above shall be increased to [*]
from [*] and in Section 4(c)(v) above shall be increased to [*] from
[*]. Unless SMS notifies PeopleSoft in writing, within the twenty-four
(24) month period from the Effective Date, that SMS has made an
irrevocable decision not continue to use the PeopleSoft Software in
SMS's Timeshare Operation, it shall be deemed that SMS has elected to
continue to operate the PeopleSoft Software in SMS's Timeshare
Operation.
d) In addition to any and all amounts due hereunder, SMS shall pay to
PeopleSoft the non-cancelable and non-refundable (except for the
[*] specified in Section 4.d.i below) guaranteed minimum royalty
amounts shown below:
i) On June 30, 1996, SMS shall pay PeopleSoft the amount of [*]. In the
event PeopleSoft has not delivered the commercial release of the
Inventory Software on or before June 30, 1996 SMS may retain this [*]
as liquidated damages until PeopleSoft's delivery of the Inventory
Software;
ii) On June 30, 1997, SMS shall pay PeopleSoft the amount of [*]
iii) On June 30, 1998, SMS shall pay PeopleSoft the amount of [*] and
iv) On June 30, 1999, SMS shall pay PeopleSoft the amount of [*].
e) After SMS has paid to PeopleSoft, pursuant to Sections 4.b and 4.c
above and/or a separate lump sum royalty payment, an amount equal to or
in excess of [*] for PeopleSoft HRMS Software and/or PeopleSoft
Financial Software royalties which amount does not include the
royalties associated with (i) New Financials ICO User, New HRMS ICO
User and (ii) Current Financials and HRMS ICO End User after the first
forty (40) Current Financials and HRMS ICO End User that license the
PeopleSoft HRMS Software and/or PeopleSoft Financial Software ("Paid Up
License"), SMS shall not be obligated to pay
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 22 of 51
<PAGE> 23
PeopleSoft any additional royalties associated only with future
licenses of the PeopleSoft HRMS Software and/or PeopleSoft Financial
Software to SMS End Users with a license to use SMS's Human Resources
and/or General Financial products in a Non-ICO environment (ie: such
product is used in a Timeshare Operation or at user's in-house computer
operation on a non- IBM or non-IBM compatible mainframe) In other
words, after SMS has paid PeopleSoft the amount of the Paid Up License,
SMS shall only incur royalties in association with licenses to:
(i) New Financials Non-ICO User, excluding SMS End Users
(ii) New HRMS Non-ICO User, excluding SMS End Users
(iii) New Financials ICO User,
(iv) New HRMS ICO User,
(v) Current Financials ICO User, and
(vi) Current HRMS ICO User
SMS may continue licensing the PeopleSoft HRMS Software and/or
PeopleSoft Financial Software as specified in this Agreement.
Notwithstanding the above, SMS may license the PeopleSoft HRMS Software
and/or PeopleSoft Financial Software to more than forty (40) Current
Financials and HRMS ICO End Users; however, the additional ICO License
Agreements shall not be included in the calculation referenced in this
Section 4.e. SMS shall have a period of seven (7) years (the initial
Term of five years plus the first two years of any applicable renewal
term) to pay PeopleSoft the amounts stated in this Section 4.e.
If, after the twenty-four (24) month period from the Effective
Date, SMS continues to operate the PeopleSoft Software in SMS's
Timeshare Operation, PeopleSoft and SMS agree that the amount stated in
Line 2 in the first paragraph of this Section shall be increased to [*]
from [*]. Unless SMS notifies PeopleSoft in writing, within the
twenty-four (24) month period from the Effective Date, that SMS has
made an irrevocable decision not continue to use the PeopleSoft
Software in SMS's Timeshare Operation, it shall be deemed that SMS has
elected to continue to operate the PeopleSoft Software in SMS's
Timeshare Operation.
f) The first year of PeopleSoft HRMS Software Maintenance (as set forth in
Exhibit D, specifically excluding Section 4 of Exhibit D) is included
in the Software license fees, thereafter, in the event Licensee elects
to continue to receive Software Maintenance, Licensee shall pay
PeopleSoft the annual Software Maintenance fee as set forth in this
Agreement. Should Licensee elect not to renew Software Maintenance and
subsequently request Software Maintenance, PeopleSoft shall reinstate
Software Maintenance only after Licensee pays PeopleSoft the annual fee
due in accordance with this Agreement plus all cumulative fees that
would have been payable had Licensee not suspended Software
Maintenance.
For the PeopleSoft HRMS Software Maintenance provided to SMS by
PeopleSoft as set forth in Exhibit D, excluding Section 4 thereof, SMS
shall pay PeopleSoft, on the first through fourth anniversaries of the
Effective Date, the amounts shown below based upon the number of HRMS
End Users licensed by SMS.
<TABLE>
<CAPTION>
Number of HRMS End First Anniversary -
Users Fourth Anniversary
<S> <C> <C>
0 - 75 [*] per year
76 - 150 [*] per year
151 - 250 [*] per year
Over 250 [*] per year
</TABLE>
g) The first year of PeopleSoft Financials Software Maintenance (as set
forth in Exhibit D, specifically excluding Section 4 of Exhibit D) is
included in the Software license fees, thereafter, in the event
Licensee elects to continue to receive Software Maintenance, Licensee
shall pay PeopleSoft the annual Software Maintenance fee as set forth
in this Agreement. Should Licensee elect not to renew Software
Maintenance and subsequently request Software Maintenance, PeopleSoft
shall reinstate Software Maintenance only
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 23 of 51
<PAGE> 24
after Licensee pays PeopleSoft the annual fee due in accordance with
this Agreement plus all cumulative fees that would have been payable
had Licensee not suspended Software Maintenance.
For the PeopleSoft Financial Software Maintenance provided to SMS as
set forth in Exhibit D , excluding Section 4 thereof, SMS shall pay
PeopleSoft, on the first through fourth anniversaries of the Effective
Date, the amounts shown below based upon the number of Financial End
Users licensed by SMS.
<TABLE>
<CAPTION>
Number of Financial End First Anniversary -
Users Fourth Anniversary
<S> <C> <C>
0 - 75 [*] per year
76 - 150 [*] per year
151 - 250 [*] per year
Over 250 [*] per year
</TABLE>
h) The first year of PeopleSoft HRMS Software Maintenance pursuant to
Section 4 of Exhibit D is included in the Software license fees,
thereafter, in the event Licensee elects to continue to receive such
Section 4 Software Maintenance, Licensee shall pay PeopleSoft the
annual Software Maintenance fee as set forth in this Agreement.
For the PeopleSoft HRMS Software Maintenance provided to SMS by
PeopleSoft pursuant to Section 4 as set forth in Exhibit D (telephone
consultation/hotline support), SMS shall pay PeopleSoft, on the first
through fourth anniversaries of the Effective Date, the amounts shown
below based upon the number of HRMS End Users licensed by SMS.
<TABLE>
<CAPTION>
Number of HRMS End Users First Anniversary -
Fourth Anniversary
<S> <C> <C>
0 - 75 [*] per year
76 - 150 [*] per year
151 - 250 [*] per year
Over 250 [*] per year
</TABLE>
i) The first year of PeopleSoft Financials Software Maintenance pursuant
to Section 4 of Exhibit D is included in the Software license fees,
thereafter, in the event Licensee elects to continue to receive such
Section 4 Software Maintenance, Licensee shall pay PeopleSoft the
annual Software Maintenance fee as set forth in this Agreement.
For the PeopleSoft Financial Software Maintenance provided to SMS by
PeopleSoft pursuant to Section 4 as set forth in Exhibit D (telephone
consultation/hotline support), SMS shall pay PeopleSoft, on the first
through fourth anniversaries of the Effective Date, the amounts shown
below based upon the number of Financial End Users licensed by SMS.
<TABLE>
<CAPTION>
Number of Financial End First Anniversary -
Users Fourth Anniversary
<S> <C> <C>
0 - 75 [*] per year
76 - 150 [*] per year
151 - 250 [*] per year
Over 250 [*] per year
</TABLE>
j) Consulting, training and/or other services beyond those provided
pursuant to License and Maintenance Agreements shall be independently
negotiated with customers. The party providing such efforts shall
retain one hundred percent (100%) of the proceeds therefrom. On such
occasions as SMS and PeopleSoft shall together provide such services,
the allocation between SMS and PeopleSoft of the revenues therefrom
shall be agreed upon in advance.
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 24 of 51
<PAGE> 25
5. AMOUNTS CREDITED TO SMS.
If, after a Substantial "Selling" Effort by SMS, a SMS End User decides
to license the PeopleSoft Software directly from PeopleSoft, SMS agrees
that, upon SMS's prior written approval, which approval shall not be
unreasonably withheld, PeopleSoft shall have the right to license the
PeopleSoft HRMS Software and PeopleSoft Financial Software,
respectively, to such SMS End User; provided PeopleSoft credits to the
royalties SMS is obligated to pay PeopleSoft the amounts specified in
below:
For each such PeopleSoft HRMS license, the credit is fifty percent
(50%) of PeopleSoft's then current list license fee; and For each such
PeopleSoft Financials license, the credit is fifty percent (50%) of
PeopleSoft's then current list license fee .
Notwithstanding anything to the contrary, this credit obligation shall
not apply to the SMS End Users listed on Exhibit L on which PeopleSoft
has expended a Substantial "Selling" Effort.
6. PEOPLESOFT BANK ACCOUNT FOR PAYMENT.
WestAmerica Bank, Walnut Creek Branch
ABA # 121-140-218
Account Number: 0704006964
Account Name PeopleSoft, Inc.
7. CURRENCY FOR PAYMENT.
The currency for all payments to PeopleSoft shall be U.S. Dollars.
8. INTERNATIONAL OPTION.
a) If, during the two (2) year period following the Effective Date, SMS elects
to extend its non-exclusive system integration and licensing rights for the
PeopleSoft Software from the United States to also include the Designated
European Countries, SMS and PeopleSoft must enter into a mutually acceptable
amendment to this Agreement authorizing such extended use for the Designated
European Countries.
PeopleSoft and SMS agree that SMS shall pay PeopleSoft a one-time entry Global
Distribution Fee of [*] upon execution of the Amendment and for each copy of the
PeopleSoft Software licensed by SMS in the Designated European Countries during
the term of the Amendment, SMS shall pay to PeopleSoft a royalty fee per license
as specified below:
[*] per each PeopleSoft International HRMS Software license
excluding a New HRMS ICO User;
[*] per each PeopleSoft International Financial Software license
excluding a New Financials ICO User;
Fifty percent (50%) of PeopleSoft's then current list license fee
per each license to a New HRMS ICO User unless PeopleSoft agrees to
lesser amount; and
Fifty percent (50%) of PeopleSoft's then current list license fee per
each license to a New Financials ICO User unless PeopleSoft agrees to
lesser amount.
If, during the two (2) year period following the Effective Date, PeopleSoft
creates a localized version of the PeopleSoft Software for countries outside of
the Territory and the Designated European Countries, upon SMS's request,
PeopleSoft shall have the unilateral right to expand the option stated in this
Section 8.a to cover such additional localized version of the PeopleSoft
Software. If this option is expanded SMS and PeopleSoft must enter into a
mutually acceptable amendment to this Agreement authorizing such extended use
and specifying the additional distribution fee which shall be proportional to
the distribution fee for the Designated European Countries.
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 25 of 51
<PAGE> 26
SMS understands that (i) the PeopleSoft Software for the Designated European
Countries differs from, and may not contain all the features and functions as,
the PeopleSoft Software for the U.S. market; and (ii) in the Designated European
Countries, SMS will have to work through, and in conjunction with, PeopleSoft's
distributors and channel partners, if any, in such countries. PeopleSoft agrees
to facilitate the introductions between SMS and PeopleSoft's distributors and
channel partners, if any, in such countries.
Software Maintenance under the option specified in this Section 8.a is:
(i) The first year of PeopleSoft HRMS Software Maintenance (as set forth in
Exhibit D, specifically excluding Section 4 of Exhibit D) is included
in the Software license fees, thereafter, in the event Licensee elects
to continue to receive Software Maintenance, Licensee shall pay
PeopleSoft the annual Software Maintenance fee as set forth in this
Agreement. Should Licensee elect not to renew Software Maintenance and
subsequently request Software Maintenance, PeopleSoft shall reinstate
Software Maintenance only after Licensee pays PeopleSoft the annual fee
due in accordance with this Agreement plus all cumulative fees that
would have been payable had Licensee not suspended Software
Maintenance.
For the PeopleSoft HRMS Software Maintenance provided to SMS by
PeopleSoft as set forth in Exhibit D, excluding Section 4 thereof, SMS
shall pay PeopleSoft, on the first through fourth anniversaries of the
Effective Date, the amounts shown below based upon the number of HRMS
End Users licensed by SMS.
<TABLE>
<CAPTION>
Number of HRMS End First Anniversary -
Users Fourth Anniversary
<S> <C> <C>
0 - 25 [*] per year
26 - 50 [*] per year
51 - 100 [*] per year
Over 100 [*] per year
</TABLE>
(ii) The first year of PeopleSoft Financials Software Maintenance (as set
forth in Exhibit D, specifically excluding Section 4 of Exhibit D) is
included in the Software license fees, thereafter, in the event
Licensee elects to continue to receive Software Maintenance, Licensee
shall pay PeopleSoft the annual Software Maintenance fee as set forth
in this Agreement. Should Licensee elect not to renew Software
Maintenance and subsequently request Software Maintenance, PeopleSoft
shall reinstate Software Maintenance only after Licensee pays
PeopleSoft the annual fee due in accordance with this Agreement plus
all cumulative fees that would have been payable had Licensee not
suspended Software Maintenance.
For the PeopleSoft Financial Software Maintenance provided to SMS as
set forth in Exhibit D , excluding Section 4 thereof, SMS shall pay
PeopleSoft, on the first through fourth anniversaries of the Effective
Date, the amounts shown below based upon the number of Financial End
Users licensed by SMS.
<TABLE>
<CAPTION>
Number of Financial End First Anniversary -
Users Fourth Anniversary
<S> <C> <C>
0 - 25 [*] per year
26 - 50 [*] per year
51 - 100 [*] per year
Over 100 [*] per year
</TABLE>
(iii) The first year of PeopleSoft HRMS Software Maintenance pursuant to
Section 4 of Exhibit D is included in the Software license fees,
thereafter, in the event Licensee elects to continue to receive such
Section 4 Software Maintenance, Licensee shall pay PeopleSoft the
annual Software Maintenance fee as set forth in this Agreement.
For the PeopleSoft HRMS Software Maintenance provided to SMS by
PeopleSoft pursuant to Section 4 as set forth in Exhibit D (telephone
consultation/hotline support), SMS shall pay PeopleSoft, on the first
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 26 of 51
<PAGE> 27
through fourth anniversaries of the Effective Date, the amounts shown
below based upon the number of HRMS End Users licensed by SMS.
<TABLE>
<CAPTION>
Number of HRMS End Users First Anniversary -
Fourth Anniversary
<S> <C> <C>
0 - 25 [*] per year
26 - 50 [*] per year
51 - 100 [*] per year
Over 100 [*] per year
</TABLE>
(iv) The first year of PeopleSoft Financials Software Maintenance pursuant
to Section 4 of Exhibit D is included in the Software license fees,
thereafter, in the event Licensee elects to continue to receive such
Section 4 Software Maintenance, Licensee shall pay PeopleSoft the
annual Software Maintenance fee as set forth in this Agreement.
For the PeopleSoft Financial Software Maintenance provided to SMS by
PeopleSoft pursuant to Section 4 as set forth in Exhibit D (telephone
consultation/hotline support), SMS shall pay PeopleSoft, on the first
through fourth anniversaries of the Effective Date, the amounts shown
below based upon the number of Financial End Users licensed by SMS.
<TABLE>
<CAPTION>
Number of Financial End First Anniversary -
Users Fourth Anniversary
<S> <C> <C>
0 - 25 [*] per year
26 - 50 [*] per year
51 - 100 [*] per year
Over 100 [*] per year
</TABLE>
b) If, during the two (2) year period following the Effective Date, SMS elects
to extend its non-exclusive system integration and licensing rights for the
PeopleSoft Software from the United States to the twelve countries specified
below with SMS modifying the United States version of the PeopleSoft Software to
create localized versions of the PeopleSoft Software for such twelve countries,
SMS and PeopleSoft must enter into a mutually acceptable amendment to this
Agreement authorizing such extended use.
Additionally, if, during the two (2) year period following the Effective Date,
SMS elects to extend its non-exclusive system integration and licensing rights
for the PeopleSoft Software from the United States to the twelve countries
specified below with SMS modifying the PeopleSoft Designated European Countries
version(s) of the PeopleSoft Software referenced in Section 8.a of this Exhibit
B to create localized versions of the PeopleSoft Software for such twelve
countries, SMS must (i) enter into a mutually acceptable amendment to this
Agreement authorizing such extended use and (ii) exercise the option specified
in Section 8.a of this Exhibit B and pay PeopleSoft the distribution fee of
[*] specified in such Section 8.a.
COUNTRIES
---------
Belgium United Kingdom
The Czech Republic
France
Germany
Hungary
Ireland
Italy
Luxembourg
Netherlands
Poland
Spain
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 27 of 51
<PAGE> 28
PeopleSoft and SMS agree that (i) SMS shall not pay any additional distribution
fee associated with this Section 8.b (the additional distribution fee is
required if the option specified in Section 8.a of this Exhibit B is exercised)
and (ii) SMS shall pay to PeopleSoft a royalty fee per each modified copy of the
PeopleSoft Software licensed by SMS as specified below:
PeopleSoft HRMS Software licensed by SMS
[*] per each license to a Current HRMS Non-ICO User or a New HRMS
Non-ICO User;
[*] per each license to a Current HRMS ICO User; and
Fifty percent (50%) of PeopleSoft's then current list license fee per
each license to a New HRMS ICO User unless PeopleSoft agrees to lesser
amount.
PeopleSoft Financial Software licensed by SMS
[*] per each license to a Current Financials Non-ICO User or a New
Financials Non-ICO User;
[*] per each license to a Current Financials ICO User ; and
Fifty percent (50%) of PeopleSoft's then current list license fee per
each license to a New Financials ICO User unless PeopleSoft agrees to
a lesser amount.
SMS understands that (i) PeopleSoft will not provide SMS with any maintenance
for licenses granted outside the U.S. pursuant to the option specified in this
Section 8.b and (ii) in the specified twelve countries, PeopleSoft recommends
that SMS works through, and in conjunction with, PeopleSoft's distributors and
channel partners, if any, in such countries. PeopleSoft agrees to facilitate the
introductions between SMS and PeopleSoft's distributors and channel partners, if
any, in such countries.
Upon mutual agreement of the parties, the list of twelve countries specified
herein may be expanded. However, PeopleSoft shall have the right to refuse to
expand the list to any country that PeopleSoft either currently has or is
intending to have an exclusive distributor relationship.
* Certain information on this page has been ommitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the ommitted portions.
Page 28 of 51
<PAGE> 29
EXHIBIT C
INTERNAL USE
<TABLE>
<CAPTION>
PART 1 PRODUCTION TEST & DEVELOPMENT
COPIES COPIES
------ ------
HRMS SOFTWARE
<S> <C> <C>
Human Resources 1 1
- -
Benefits Administration 1 1
- -
FSA Administration 1 1
- -
Payroll 1 1
- -
Payroll Interface 1 1
- -
Time and Labor 1 1
- -
If or when such module becomes
commercially available
FINANCIALS SOFTWARE
General Ledger (incl. PS/nVision) 1 1
- -
Accounts Receivable 1 1
- -
Accounts Payable 1 1
- -
Asset Management 1 1
- -
Purchasing 1 1
- -
Inventory 1 1
- -
If or when such module becomes
commercially available
</TABLE>
Database Version:Oracle Operating System: Hardware Model:
FOR THE ORACLE DATABASE VERSION LICENSED, LICENSEE RECEIVES THE APPLICABLE ITEMS
LISTED BELOW:
<TABLE>
<CAPTION>
QTY. ORACLE
---- ------
<S> <C> <C>
DATABASE 1 N/A
PEOPLETOOLS - RESTRICTED DEV 1 included
DOCUMENTATION 2 included
</TABLE>
ADDITIONAL SOFTWARE/SERVICES / PART TWO
SOFTWARE/SERVICE MANUFACTURER QUANTITY
Workstation Access (includes PeopleSoft, Inc. unlimited
base application access, Sybase, Inc./MITI
Workstation SQR, QueryLink, Crystal Computer Services
Crystal, nVision)
Server SQR Sybase, Inc./MITI 1
-
PeopleTools - General Dev.(1) PeopleSoft, Inc. 10 Seats
--------
- --------
(1) PeopleTools for general development for the internal use license shall be
used solely to develop applications for Licensee's internal systems. Licensee
shall not market or distribute such applications without executing a mutually
acceptable amendment to this Agreement authorizing such extended use and
specifying the royalty associated with such usage. Any third party software
required by Licensee must be licensed directly from PeopleSoft or the
manufacturer.
Page 29 of 51
<PAGE> 30
<TABLE>
- ----------------------------------------- ------------------------------------- ------------------------------------
<S> <C> <C>
LICENSEE SITE ADDRESS BILL-TO-ADDRESS SHIP-TO-ADDRESS
contact name: contact name: contact name:
Phone No. Phone No. Phone No.
Fax No. Fax No. Fax No.
- ----------------------------------------- ------------------------------------- ------------------------------------
</TABLE>
<TABLE>
- --------------------------------------------------------- ----------------------------------------------------------
<S> <C>
LICENSEE TRAINING ADMINISTRATOR CORRESPONDENT
Contact Name: Contact Name:
Phone No. Phone No.
Fax No.
- --------------------------------------------------------- ----------------------------------------------------------
</TABLE>
Page 30 of 51
<PAGE> 31
EXHIBIT D
SECONDLINE SUPPORT
TERMS AND CONDITIONS
Secondline Support Services Terms and Conditions ("Support Services") are
outlined herein. PeopleSoft reserves the right to modify the terms and
conditions of Support Services on an annual basis to reflect current market
conditions.
1. COVERAGE
PeopleSoft provides SMS with Support Services for the PeopleSoft Software in
consideration for SMS's payment of the applicable fees to PeopleSoft as stated
in Sections 4.f, 4.g, 4.h and 4.i of Exhibit B. SMS is solely responsible for
the provision of Support Services to End Users.
2. SOFTWARE MAINTENANCE
The following technical and functional improvements will be issued periodically
by PeopleSoft to improve PeopleSoft Software operations:
a. Fixes to Errors;
b. Updates; and
c. Enhancements contained within new releases.
3. PRIORITY LEVEL OF ERRORS
PeopleSoft shall reasonably determine the priority level of Error. PeopleSoft
uses the following protocols:
Priority A Errors:
PeopleSoft promptly initiates the following procedures: (1) assign
PeopleSoft specialists to correct the Error; (2) provide ongoing
communication on the status of the corrections; and (3) immediately
commence to provide a Workaround or a Fix.
Priority B Errors:
(1) PeopleSoft assigns a PeopleSoft specialist to commence correction of
Error and (2) Provide escalation procedures as reasonably determined by
PeopleSoft support staff. PeopleSoft exercises all commercially reasonable
efforts to include the Fix for the Error in the next PeopleSoft Software
maintenance release.
Priority C Errors:
PeopleSoft may include the Fix for the Error in the next major PeopleSoft
Software release.
4. TELEPHONE SUPPORT
PeopleSoft provides telephone technical support concerning installation and use
of the PeopleSoft Software. Except for designated holidays, standard telephone
support hours are Monday through Friday, 6:00 a.m. to 6:30 p.m. Pacific Time.
Telephone Support is available 24-hour, 7-days a week for in-production
customers who need to resolve critical production problems outside of normal
support hours.
5. ACCOUNT MANAGER
PeopleSoft assigns an account manager to assist the on-going support
relationship. A reasonable amount of account manager on-Site time is included in
the annual Support Services fee. Prior to an account manager conducting an
on-Site visit, such account manager shall obtain SMS's prior approval SMS will
reimburse PeopleSoft for the reasonable travel and living expenses of the
account manager for on-Site activity.
6. PS/FORUM
a. PS/Forum on-line bulletin board system features postings by PeopleSoft
and PeopleSoft Software users regarding technical and non-technical
topics of interest. SMS shall access PS/Forum solely through SMS's
CompuServe services account. At SMS's own expense, SMS shall acquire
the CompuServe service and a license to use Lotus Notes.
Page 31 of 51
<PAGE> 32
b. All maintenance releases and program fixes to the PeopleSoft Software
may be delivered to SMS through PS/Forum. All information specified in
PS/Forum by PeopleSoft is confidential and proprietary to PeopleSoft
and shall only be used in connection with SMS's use of the PeopleSoft
Software and informational communications with other PS/Forum
participants. PeopleSoft reserves the right to modify information
posted to PS/Forum. PeopleSoft shall have the right to publish and
distribute only through PS/Forum in all languages and in association
with SMS's name any material or software programs provided by SMS to
PS/Forum. SMS shall not use PS/Forum for advertising or public
relations purposes and shall only submit information to PS/Forum which
is owned by SMS or which SMS has third party permission to submit to
PS/Forum for use by all other PS/Forum users.
c. In the interest of diminishing exposure to software viruses, PeopleSoft
tests and scans for software viruses all information entered by
PeopleSoft prior to submission of information to PS/Forum. SMS shall
also use a reliable virus detection system on any software or
information posted to PS/Forum, utilize back-up procedures, monitor
access to PS/Forum, promptly notify PeopleSoft of any virus detected
within SMS's systems associated with PS/Forum and generally exercise a
reasonable degree of caution when utilizing information from PS/Forum.
PeopleSoft does not warrant that PS/Forum will operate without
interruption or without errors. PeopleSoft reserves the right to modify
or suspend PS/Forum service in connection with PeopleSoft's provision
for Support Services.
7. EXCLUSIONS
PeopleSoft shall have no obligation to support:
a. Altered, damaged or substantially modified PeopleSoft Software;
b. PeopleSoft Software that is not the then-current or Previous Sequential
Release;
c. Errors caused by SMS's negligence, hardware malfunction or other causes
beyond the reasonable control of PeopleSoft;
d. PeopleSoft Software installed in a hardware or operating environment
not supported by PeopleSoft; and
e. Third party software not licensed through PeopleSoft.
8. GENERAL
All Updates provided to SMS are subject to the terms and conditions of the
Agreement.
PeopleSoft shall not be liable for any failure or delay in performance of the
Support Services due to causes beyond its reasonable control. Any illegal or
unenforceable provision shall be severed from these Terms and Conditions. SMS
agrees that any information received pursuant to these Terms and Conditions
shall be deemed subject to the non-disclosure obligations set forth in the
Agreement. The Support Services Terms and Conditions states the entire agreement
of PeopleSoft's provision of Support Services to SMS and may only be amended by
a written amendment executed by both parties.
9. DEFINITIONS
Unless otherwise defined herein, capitalized terms used herein shall have the
same meaning as set forth in the Agreement and applicable Schedule.
"Enhancement" means technical or functional additions to the PeopleSoft Software
to improve software functionality and/or operations. Enhancements are delivered
with new releases of the PeopleSoft Software.
"Error" means a malfunction in the PeopleSoft Software which significantly
degrades the use of the PeopleSoft Software.
"Fix" means the repair or replacement of source or object or executable code
versions of the PeopleSoft Software to remedy an Error.
"Previous Sequential Release" means the release of PeopleSoft Software for use
in a particular operating
Page 32 of 51
<PAGE> 33
environment. A Previous Sequential Release will be supported by PeopleSoft for a
period of fifteen (15) months after release of the subsequent release.
"Priority A" means an Error that: (1) renders the PeopleSoft Software
inoperative; or (2) causes the PeopleSoft Software to fail catastrophically.
"Priority B" means an Error that significantly degrades performance of the
PeopleSoft Software or materially restricts SMS's use of the PeopleSoft
Software.
"Priority C" means an Error that causes only a minor impact of the use of the
PeopleSoft Software.
"Update" means all published revisions to the printed documentation and one (1)
copy of the new release of the PeopleSoft Software which are not designated by
PeopleSoft as new products for which it charges separately.
"Workaround" means a change in the procedures followed or data supplied to avoid
an Error without significantly impairing performance of the PeopleSoft Software.
Page 33 of 51
<PAGE> 34
EXHIBIT E
The terms and conditions of the Systems Integrator Agreement shall apply to
SMS's internal use license. Unless otherwise provided in the Systems Integrator
Agreement, the terms and conditions of this Exhibit E shall apply.
SOFTWARE END USER LICENSE AND SERVICES AGREEMENT
This agreement ("Agreement") is made as of____________ , 1995 ("Effective Date")
by and between PeopleSoft, Inc. ("PEOPLESOFT"), a Delaware corporation having
its principal place of business at 1331 North California Boulevard, Walnut
Creek, California 94596 and
Name: __________________("LICENSEE")
Address:__________________
__________________
__________________
This Agreement and the Schedules constitute the entire agreement between the
parties concerning Licensee's use of the Software. This Agreement replaces and
supersedes any prior verbal or written understandings, communications, and
representations. No purchase order or other ordering document which purports to
modify or supplement the printed text of this Agreement or any Schedule shall
add to or vary the terms of this Agreement. All such proposed variations or
additions (whether submitted by PeopleSoft or Licensee) are objected to and
deemed material.
THE TERMS AND CONDITIONS HEREIN ARE ACCEPTED AS PART OF THIS AGREEMENT.
LICENSEE PEOPLESOFT, INC.
_____________________ _____________________
Authorized Signature Authorized Signature
_______________________ _______________________
Printed Name and Title Printed Name and Title
TERMS AND CONDITIONS
1. LICENSE
1.1 PeopleSoft grants Licensee a perpetual, non-exclusive, nontransferable
license to use the licensed number of copies of the Software, solely
for internal data processing operations, on each Server at the Site up
to the licensed number of workstations specified in the applicable
Schedule. Any third party software products or modules provided by
PeopleSoft to Licensee shall be used solely with PeopleSoft Software.
Licensee may use the Software temporarily on a machine other than the
Server in the event that the Server is inoperable. Licensee may make a
reasonable number of copies of the Software solely for technical
support, training and sales support, including demonstrations, and
archive or emergency back-up purposes and/or disaster recovery testing
purposes. Licensee may modify or merge the Software with other software
with the understanding that any modifications, however extensive, shall
not diminish PeopleSoft's title or interest in the Software.
34 of 51
<PAGE> 35
1.2 PeopleSoft shall provide Licensee with the licensed number of copies of
the Software and Documentation as specified in the applicable Schedule.
Licensee may make a reasonable number of copies of Documentation solely
for Licensee's internal use with the Software provided all copyright
notices are reproduced.
2. LICENSE EXCLUSIONS
2.1 Except as expressly authorized herein, Licensee shall not:
a. Copy the Software;
b. Cause or permit reverse compilation or reverse assembly of all
or any portion of the Software;
c. distribute, disclose, market, rent, lease or transfer to any
third party any portion of the Software (including
PeopleTools) or the Documentation, or use the Software or
Documentation in any service bureau arrangement, facility
management, or third party training;
d. Disclose the results of Software performance benchmarks to any
third party without PeopleSoft's prior written consent;
e. Transfer the Software to a different Server platform without
the prior written consent of PeopleSoft (such consent not
unreasonably withheld) and payment of any additional fees
which may be due;
f. Transfer the Software to a different Site without prior
written notice to PeopleSoft;
g. Export the Software in violation of U.S. Department of
Commerce export administration regulations;
h. Invoke support libraries other than through documented API
calls; and
i. Use PeopleTools except in conjunction with the licensed
PeopleSoft applications.
2.2 No license, right, or interest in any PeopleSoft trademark, trade name,
or service mark is granted hereunder.
3. FEES AND PAYMENT TERMS
3.1 Licensee shall pay PeopleSoft the fees as specified in each applicable
Schedule and all associated shipping costs.
3.2 Unless Licensee provides PeopleSoft with a valid tax exemption or
direct pay certificate, Licensee is responsible for all taxes, duties
and customs fees concerning the Software and/or services, excluding
taxes based on PeopleSoft's income. Overdue payments shall bear
interest at the lesser of twelve percent (12%) per annum or the maximum
rate allowed under applicable law.
4. TITLE AND PROTECTION
4.1 PeopleSoft (or its third-party providers) retains title to all portions
of the Software, any modifications to the Software developed with
PeopleTools, and any copies thereof. Title to the physical media for
the Software vests in Licensee upon delivery. PeopleSoft represents
that the Software contains valuable proprietary information, and
Licensee shall not disclose the Software to anyone other than those of
its employees or consultants under nondisclosure obligations who have a
need to know for purposes consistent with this Agreement. Licensee
shall affix, to each full or partial copy of the Software made by
Licensee, all copyright and proprietary information notices as affixed
to the original. The obligations set forth in this paragraph shall
survive termination of this Agreement.
4.2 The Software may be transferred to the U.S. government only with the
separate prior written consent of PeopleSoft and solely with
"Restricted Rights" as that term is defined in FAR 52.227-19(c)(2) (or
DFAR 252.227-7013(c)(1) if the transfer is to a defense-related agency)
or subsequent citation.
Page 35 of 51
<PAGE> 36
5. PATENT AND COPYRIGHT INDEMNITY
PeopleSoft shall indemnify and defend Licensee against any claims that
the Software infringes any United States or Canadian patent or
copyright; provided that PeopleSoft is given prompt notice of such
claim and is given information, reasonable assistance, and sole
authority to defend or settle the claim. In the defense or settlement
of the claim, PeopleSoft may obtain for Licensee the right to continue
using the Software, replace or modify the Software so that it becomes
noninfringing while giving equivalent performance. PeopleSoft shall
have no liability to indemnify or defend Licensee if the alleged
infringement is based on: (i) a modification of the Software by anyone
other than PeopleSoft, or (ii) the use of the Software other than in
accordance with the Documentation.
6. DEFAULT AND TERMINATION
6.1 Any of the following shall constitute an event of default:
a. Licensee fails to perform any of its obligations under the
sections entitled "License Exclusions" or "Title and
Protection"; or
b. Either party fails to perform any other material obligation
under this Agreement and such failure remains uncured for more
than thirty (30) days after receipt of written notice thereof.
6.2 If an event of default occurs, the nondefaulting party, in addition to
any other rights available to it under law or equity, may terminate
this Agreement and all licenses granted hereunder by written notice to
the defaulting party. Remedies shall be cumulative and there shall be
no obligation to exercise a particular remedy.
6.3 Within fifteen (15) days after termination of this Agreement, Licensee
shall certify in writing to PeopleSoft that all copies of the Software
in any form, including partial copies within modified versions, have
been destroyed or returned to PeopleSoft.
7. LIMITED WARRANTY
PeopleSoft warrants that it has title to the Software and the authority
to grant licenses to use the Software. PeopleSoft warrants that the
Software will perform substantially in accordance with the
Documentation for a period of one (1) year from the date of
installation. PeopleSoft's sole obligation is limited to repair or
replacement of the defective Software, provided Licensee notifies
PeopleSoft of the deficiency within the one-year period and provided
Licensee has installed all Software updates provided by PeopleSoft's
Software Support Services. PEOPLESOFT DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
8. LIMITATION OF LIABILITY
PEOPLESOFT WILL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST DATA OR LOST
PROFITS, HOWEVER ARISING, EVEN IF IT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. EXCLUDING DAMAGES INCURRED UNDER THE
ARTICLE ENTITLED "PATENT AND COPYRIGHT INDEMNITY", PEOPLESOFT'S
LIABILITY FOR DAMAGES UNDER THIS AGREEMENT (WHETHER IN CONTRACT OR
TORT) SHALL IN NO EVENT EXCEED THE AMOUNT PAID BY LICENSEE TO
PEOPLESOFT FOR THE SOFTWARE OR THE SERVICES FROM WHICH THE CLAIM AROSE.
THE PARTIES AGREE TO THE ALLOCATION OF LIABILITY RISK WHICH IS SET
FORTH IN THIS SECTION.
9. SOFTWARE SUPPORT SERVICES TERMS AND CONDITIONS
Page 36 of 51
<PAGE> 37
On the Schedule Effective Date, PeopleSoft shall provide Licensee with
one (1) year of software support services as described in PeopleSoft's
standard Software Support Services Terms and Conditions (receipt of
which is hereby acknowledged). After the first year, Licensee may elect
to acquire Software Support Services by paying PeopleSoft the then
current applicable fees.
10. ON-SITE SUPPORT DAYS
PeopleSoft shall provide Licensee with support at the Site for the
Software as set forth in the Schedule. For a period of six (6) months
from the Schedule Effective Date, support days not used during the
installation phase may be used for other implementation support.
Licensee shall reimburse PeopleSoft for all reasonable travel and
living expenses associated with any installation and support.
11. TRAINING
PeopleSoft shall provide Licensee with the number of training units set
forth in the Schedule for use at a PeopleSoft Training Facility.
Licensee may use training units for Site training as the parties
mutually agree in writing. Licensee must use these training units
within one (1) year from the Schedule Effective Date.
12. NOTICES
All notices shall be in writing and sent by first class mail, overnight
mail, courier, or transmitted by facsimile (if confirmed by such
mailing), to the addresses indicated on the first page of this
Agreement, or such other address as either party may indicate by at
least ten (10) days prior written notice to the other party. Notices to
PeopleSoft shall be sent to the Legal Department.
13. ASSIGNMENT
Licensee may not assign this Agreement (by operation of law or
otherwise) or sublicense the Software without the prior written consent
of PeopleSoft, and any prohibited assignment or sublicense shall be
null and void.
14. NONDISCLOSURE OBLIGATION
14.1 The terms, conditions, pricing and any other information clearly marked
"confidential" under this Agreement are confidential and shall not be
disclosed, orally or in writing by Licensee to any third party without
the prior written consent of PeopleSoft.
14.2 Licensee shall protect the Software with at least the same degree of
care and confidentiality which Licensee utilizes for similar Licensee
information which it does not wish disclosed to the public. Licensee
may provide access to and use of the Software only to those third
parties, (undertaking similar nondisclosure obligations), providing
services concerning Licensee's use of the Software.
15. GENERAL
This Agreement is made in and shall be governed by the laws of the
State of California, excluding choice of law principles. Venue shall be
in San Francisco, California. The section headings herein are provided
for convenience only and have no substantive effect on the construction
of this Agreement. Except for Licensee's obligation to pay PeopleSoft,
neither party shall be liable for any failure to perform due to causes
beyond its reasonable control. If any provision of this Agreement is
held to be unenforceable, this Agreement shall be construed without
such provision. The failure by a party to exercise any right hereunder
shall not operate as a waiver of such party's right to exercise such
right or any other right in the future. Except for actions for
nonpayment or breach of PeopleSoft's proprietary rights in the
Software, no action regardless of form, arising out of this Agreement
may be brought by either party more than one year after the cause of
action has accrued. This Agreement may be amended only by a written
document
Page 37 of 51
<PAGE> 38
executed by a duly authorized representative of each of the parties.
This Agreement may be executed in counterparts. To expedite order
processing, Transmitted Copies are considered documents equivalent to
original documents.
16. DEFINITIONS
"Documentation" means only technical publications relating to the use
of the Software, such as reference, user, installation, systems
administrator and technical guides, delivered by PeopleSoft to
Licensee.
"PeopleTools" means the underlying architecture from which the Software
is designed, and includes software application programming tools and
code.
"Schedules" means the product schedules which specifically reference
this Agreement and which have been executed by the parties.
"Server" means a single database or file server which may be accessed
by a network of personal computers as set forth in the applicable
Schedule.
"Site" means a specific, physical location of Licensee's Server as set
forth in the applicable Schedule.
"Software" means all or any portion of the United States version of the
binary computer software programs (including corresponding source code)
provided by PeopleSoft or made by Licensee with PeopleSoft's prior
written consent, in machine-readable form and including all listed in
the applicable Schedule and all corrections or updates thereto.
Software includes the third-party software as identified in the
Schedule. Software does not include source code to PeopleTools.
"Transmitted Copies" means this Agreement, Schedules and other ordering
documents which (i) contain no modifications or amendments to this
Agreement; (ii) are copied or reproduced and transmitted via photocopy,
facsimile or process that accurately transmits the original documents;
and (iii) are accepted by PeopleSoft.
Page 38 of 51
<PAGE> 39
EXHIBIT F
The terms and conditions of the Systems Integrator Agreement shall apply to
support services described in this Exhibit F. Unless otherwise provided in the
Systems Integrator Agreement, the terms and conditions of this Exhibit E shall
apply.
SUPPORT SERVICES TERMS AND CONDITIONS
TERMS AND CONDITIONS
Software Support Services Terms and Conditions ("Support Services") are
referenced in and incorporated into the License Agreement between PeopleSoft and
Licensee. PeopleSoft reserves the right to modify the terms and conditions of
Support Services on an annual basis to reflect current market conditions.
1. COVERAGE
PeopleSoft provides Licensee with Support Services for the Software in
consideration for Licensee's payment of the applicable fees to PeopleSoft.
2. SOFTWARE MAINTENANCE
The following technical and functional improvements will be issued periodically
by PeopleSoft to improve Software operations:
a. Fixes to Errors;
b. Updates; and
c. Enhancements contained within new releases.
3. PRIORITY LEVEL OF ERRORS
PeopleSoft shall reasonably determine the priority level of Error. PeopleSoft
uses the following protocols:
Priority A Errors:
PeopleSoft promptly initiates the following procedures: (1) assign senior
PeopleSoft specialists to correct the Error; (2) provide ongoing
communication on the status of the corrections; and (3) immediately
commence to provide a Workaround or a Fix.
Priority B Errors:
(1) PeopleSoft assigns a PeopleSoft specialist to commence correction of
Error and (2) Provide escalation procedures as reasonably determined by
PeopleSoft support staff. PeopleSoft exercises all commercially reasonable
efforts to include the Fix for the Error in the next Software maintenance
release.
Priority C Errors:
PeopleSoft may include the Fix for the Error in the next major Software
release.
4. TELEPHONE SUPPORT
PeopleSoft provides telephone technical support concerning installation and use
of the Software. Except for designated holidays, standard telephone support
hours are Monday through Friday, 6:00 a.m. to 6:30 p.m. Pacific Time. Telephone
Support is available 24-hour, 7-days a week for in-production customers who need
to resolve critical production problems outside of normal support hours.
5. ACCOUNT MANAGER
PeopleSoft assigns an account manager to assist the on-going support
relationship. A reasonable amount of account manager on-Site time is included in
the annual Support Services fee. Licensee will reimburse PeopleSoft for the
reasonable travel and living expenses of the account manager for on-Site
activity.
6. PS/FORUM
Page 39 of 51
<PAGE> 40
a. PS/Forum on-line bulletin board system features postings by PeopleSoft
and PeopleSoft Software users regarding technical and non-technical
topics of interest. Licensee shall access PS/Forum solely through
Licensee's CompuServe services account. At Licensee's own expense,
Licensee shall acquire the CompuServe service and a license to use
Lotus Notes.
b. All maintenance releases and program fixes to the Software may be
delivered to Licensee through PS/Forum. All information specified in
PS/Forum by PeopleSoft is confidential and proprietary to PeopleSoft
and shall only be used in connection with Licensee's use of the
Software and informational communications with other PS/Forum
participants. PeopleSoft reserves the right to modify information
posted to PS/Forum. PeopleSoft shall have the right to publish and
distribute only through PS/Forum in all languages and in association
with Licensee's name any material or software programs provided by
Licensee to PS/Forum. Licensee shall not use PS/Forum for advertising
or public relations purposes and shall only submit information to
PS/Forum which is owned by Licensee or which Licensee has third party
permission to submit to PS/Forum for use by all other PS/Forum users.
c. In the interest of diminishing exposure to software viruses, PeopleSoft
tests and scans for software viruses all information entered by
PeopleSoft prior to submission of information to PS/Forum. Licensee
shall also use a reliable virus detection system on any software or
information posted to PS/Forum, utilize back-up procedures, monitor
access to PS/Forum, promptly notify PeopleSoft of any virus detected
within Licensee's systems associated with PS/Forum and generally
exercise a reasonable degree of caution when utilizing information from
PS/Forum. PeopleSoft does not warrant that PS/Forum will operate
without interruption or without errors. PeopleSoft reserves the right
to modify or suspend PS/Forum service in connection with PeopleSoft's
provision for Support Services.
7. FEES
The first year of Support Services is included in the Software license fees,
thereafter, in the event Licensee elects to continue to receive Support
Services, Licensee shall pay PeopleSoft the then-current annual Support Services
fee. Support Services are billed on an annual basis, payable in advance.
Licensee shall be responsible for all taxes associated with Support Services,
other than taxes based on PeopleSoft's income. Licensee's payment shall be due
within thirty (30) days of receipt of the PeopleSoft invoice.
Should Licensee elect not to renew Support Services and subsequently request
Support Services, PeopleSoft shall reinstate Support Services only after
Licensee pays PeopleSoft the annual then current fee plus all cumulative fees
that would have been payable had Licensee not suspended Support Services.
8. TERM AND TERMINATION
Unless a shorter term is agreed to in writing by both parties, Support Services
shall be provided for one (1) year from the Agreement Effective Date and shall
be extended each additional year unless terminated by either party. Each one (1)
year term shall commence on the anniversary of the Agreement Effective Date.
Either party may terminate the Support Services provisions at the end of the
original term or at the end of any renewal term by giving the other party
written notice at least ninety (90) days prior to the end of any term.
In the event Licensee fails to make payment pursuant to the section titled
"Fees", or in the event Licensee breaches the Support Services provisions and
such breach has not been cured within thirty (30) days of written receipt of
notice of breach, PeopleSoft may suspend or cancel Support Services.
9. EXCLUSIONS
PeopleSoft shall have no obligation to support:
a. Altered, damaged or substantially modified Software;
b. Software that is not the then-current or Previous Sequential Release;
c. Errors caused by Licensee's negligence, hardware malfunction or other
causes beyond the reasonable control of PeopleSoft;
d. Software installed in a hardware or operating environment not supported
by PeopleSoft; and
Page 40 of 51
<PAGE> 41
e. Third party software not licensed through PeopleSoft.
10. GENERAL
All Updates provided to Licensee are subject to the terms and conditions of the
Agreement.
PeopleSoft shall not be liable for any failure or delay in performance of the
Support Services due to causes beyond its reasonable control. Any illegal or
unenforceable provision shall be severed from these Terms and Conditions.
Licensee agrees that any information received pursuant to these Terms and
Conditions shall be deemed subject to the non-disclosure obligations set forth
in the Agreement. The Support Services Terms and Conditions states the entire
agreement of PeopleSoft's provision of Support Services to Licensee and may only
be amended by a written amendment executed by both parties.
11. DEFINITIONS
Unless otherwise defined herein, capitalized terms used herein shall have the
same meaning as set forth in the Agreement and applicable Schedule.
"Enhancement" means technical or functional additions to the Software to improve
software functionality and/or operations. Enhancements are delivered with new
releases of the Software.
"Error" means a malfunction in the Software which significantly degrades the use
of the Software.
"Fix" means the repair or replacement of source or object or executable code
versions of the Software to remedy an Error.
"Previous Sequential Release" means the release of Software for use in a
particular operating environment which has been replaced by a subsequent release
of the Software in the same operating environment. A Previous Sequential Release
will be supported by PeopleSoft for a period of fifteen (15) months after
release of the subsequent release.
"Priority A" means an Error that: (1) renders the Software inoperative; or (2)
causes the Software to fail catastrophically.
"Priority B" means an Error that significantly degrades performance of the
Software or materially restricts Licensee's use of the Software.
"Priority C" means an Error that causes only a minor impact of the use of the
Software.
"Update" means all published revisions to the printed documentation and one (1)
copy of the new release of the Software which are not designated by PeopleSoft
as new products for which it charges separately.
"Workaround" means a change in the procedures followed or data supplied to avoid
an Error without significantly impairing performance of the Software.
Page 41 of 51
<PAGE> 42
SMS - CONFIDENTIAL
EXHIBIT - G
SMS ALLEGRA CUSTOMERS
AS REPORTED FROM THE [*]
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 43
SMS - CONFIDENTIAL
EXHIBIT - G
SMS ALLEGRA CUSTOMERS
AS REPORTED FROM THE [*]
HEALTHCARE ORGANIZATION CITY ST ROSS-HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 44
SMS - CONFIDENTIAL
EXHIBIT - G
SMS INVISION ICO CUSTOMERS
AS REPORTED FROM THE [*]
CORPORATION
SUBSIDIARY/ENTITY CITY STATE GL HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 45
SMS - CONFIDENTIAL
EXHIBIT - G
SMS INVISION ICO CUSTOMERS
AS REPORTED FROM THE [*]
CORPORATION
SUBSIDIARY/ENTITY CITY STATE GL HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 46
SMS - CONFIDENTIAL
EXHIBIT - G
SMS INVISION ICO CUSTOMERS
AS REPORTED FROM THE [*]
CORPORATION
SUBSIDIARY/ENTITY CITY STATE GL HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 47
SMS - CONFIDENTIAL
EXHIBIT - G
SMS INVISION ICO CUSTOMERS
AS REPORTED FROM THE [*]
CORPORATION
SUBSIDIARY/ENTITY CITY STATE GL HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 48
SMS - CONFIDENTIAL
EXHIBIT - G
SMS INVISION ICO CUSTOMERS
AS REPORTED FROM THE [*]
CORPORATION
SUBSIDIARY/ENTITY CITY STATE GL HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 49
SMS - CONFIDENTIAL
EXHIBIT - G
SMS INVISION ICO CUSTOMERS
AS REPORTED FROM THE [*]
CORPORATION
SUBSIDIARY/ENTITY CITY STATE GL HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 50
SMS - CONFIDENTIAL
EXHIBIT - G
SMS INVISION ICO CUSTOMERS
AS REPORTED FROM THE [*]
CORPORATION
SUBSIDIARY/ENTITY CITY STATE GL HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 51
SMS - CONFIDENTIAL
EXHIBIT - G
SMS MEDSERIES4 CUSTOMERS
AS REPORTED FROM THE [*]
HEALTHCARE ORGANIZATION CITY ST GL PP/HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 52
SMS - CONFIDENTIAL
EXHIBIT - G
SMS MEDSERIES4 CUSTOMERS
AS REPORTED FROM THE [*]
HEALTHCARE ORGANIZATION CITY ST GL PP/HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 53
SMS - CONFIDENTIAL
EXHIBIT - G
SMS MEDSERIES4 CUSTOMERS
AS REPORTED FROM THE [*]
HEALTHCARE ORGANIZATION CITY ST GL PP/HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 54
SMS - CONFIDENTIAL
EXHIBIT - G
SMS MEDSERIES4 CUSTOMERS
AS REPORTED FROM THE [*]
HEALTHCARE ORGANIZATION CITY ST GL PP/HR
- --------------------------------------------------------------------------------
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 55
EXHIBIT H
PEOPLESOFT'S HARDWARE AND SOFTWARE REQUIREMENTS DOCUMENT
Pages 43 of 51
<PAGE> 56
EXHIBIT I
LANGUAGE TO BE INCLUDED IN SMS-END USER CONTRACTS
The following provisions are currently included in SMS' end user
license agreements. SMS will require End User agreements to include provisions
substantially as reproduced below. SMS agrees that no modification of such
provisions shall cause (i) PeopleSoft Software to be treated differently than
any SMS Product in such End User license agreement, or (ii) the PeopleSoft
Software to have less protection than as stated herein.
__. CONFIDENTIALITY. Each party shall retain in strict confidence the
terms and conditions of this Agreement and all information and data relating to
the other party's business, development plans, programs, documentation,
techniques, trade secrets, systems, and know-how, and shall not, unless
otherwise required by law, disclose such information to any third party without
the other's prior written consent; provided that SMS shall have the right to
compile and distribute statistical analyses and reports utilizing aggregated
data derived from information and data obtained from Customer, other SMS
customers, and other sources. Such reports and analyses will not identify
Customer or any physician or patient of Customer. Customer shall have the right
to disclose SMS information to Customer's employees, consultants, and agents on
a need-to-know basis, provided that all such consultants and agents have
executed a confidentiality agreement that is acceptable to SMS prior to such
disclosure. Upon SMS' request, Customer shall inform SMS in writing of the
number and location of the original and all copies of each of the Deliverables.
The following provision applies in ICO deals:
__. GRANT OF PERPETUAL LICENSE. SMS grants to Customer a perpetual
license to use one (1) copy of the Applications and the Deliverables to be
operated at the Facility by Customer's employees for the sole purpose of
processing data of the Facility. Customer shall also have the right to make
Modifications and Adaptations and to use them solely for the Facility. Customer
agrees that this Agreement shall bind all users of the System.
Customer may make one (1) copy of the Applications and OAS to be used
solely for emergency purposes at the Facility. Customer shall not transfer its
license nor sublicense the Deliverables. Customer shall not disassemble,
decompile, or otherwise reverse-engineer the Applications. OAS or other
software provided by SMS under this Agreement.
SMS or its suppliers shall have the exclusive title to, copyright and
trade secret right in, and the right to grant additional licenses to, the
Applications and Deliverables. If SMS incorporates the programs of any other
suppliers in the Applications, those suppliers shall be entitled to the benefit
of the obligations incurred by Customer in this Section and in the
Confidentiality Section.
The following provision applies in non-ICO deals:
__. REMOTE COMPUTING SERVICES. SMS shall process the Facility's data
on the System as selected by Customer in accordance with the Documentation.
Customer shall have the right to make Adaptations for use solely by the
Facility. Customer shall not transfer its rights hereunder nor sublicense the
Deliverables.
<PAGE> 57
SMS or its suppliers shall have the exclusive title to, copyright and
trade secret right in, and the right to grant additional licenses to, the
Lan-Based Applications and related Deliverables. If SMS incorporates the
programs of any other suppliers in the Applications, those suppliers shall be
entitled to the benefit of the obligations incurred by Customer in this Section
and in the Confidentiality Section.
<PAGE> 58
EXHIBIT J
SMS SERVICE PLUS PROGRAM
The provisions of this Exhibit may be modified by SMS as any time
during the Term.
SMS will provide a program of support for the SMS Applications and
Custom Programming listed in Exhibit A under the following terms and
conditions. This Support Program shall become effective on the date of this
Agreement and shall remain in force for an Initial Term of ______________ (__)
months from the Delivery Date of the first Application. This Program shall
continue in force thereafter until terminated by Customer or SMS upon six (6)
months' written notice.
1. SMS SUPPORT RESPONSIBILITIES:
(a) Correct, at no additional charge, any failure of the
Applications or SMS' architectural system to perform substantially in
accordance with the Documentation as specified in the warranty section of this
Agreement, and to provide remote telephone warranty support.
(b) Provide Customer with a Monthly Allowance of
______________ (__) hours of remote telephone non-warranty support at no
additional charge. The Monthly Allowance may be used for assistance and advice
on the operation and functions of the Applications, for help with diagnostics
and other problem determination procedures, and for advice and assistance in
problem situations. Any unused portion of this Monthly Allowance cannot be
carried forward to subsequent months.
(c) Initiate work on urgent issues within one hour of
Customer's call for assistance to the Customer Support Center ("CSC"), 24 hours
per day and 7 days per week. Generally urgent issues would be those involving
substantial Application failure or those which, in Customer's reasonable
judgment, are critical to Customer's overall operation. SMS will initiate work
on non-urgent issues, including the correction of non-urgent software problems,
during Customer's normal business hours from SMS' Corporate offices or the local
SMS office, either on a remote basis or on-site, as is most effective and
efficient.
(d) Provide a record in SMS' Events Tracking System ("EVTS")
of telephone requests received at the CSC from an employee or other
representative of Customer including a description of the request, the time
spent and the actions performed in satisfying the request, and the resolution
of the request. Customer may, at its option, access this information to review
the support effort being performed at Customer's request and the status of work
in process.
(e) Provide Customer, on a regular basis, Updates and Releases
to the standard SMS Application functions Customer has obtained and
Documentation of these items at no additional software charge. Updates are
packages of software corrections as well as revisions addressing common
functional and performance issues. Releases are a redistribution of licensed SMS
software containing an aggregation of Updates, and functional, operational
and/or performance improvements.
(f) Provide Customer, when made generally available by SMS,
with new Versions of previously delivered Application functions of UNITY FMS,
INVISION RCO, SIGNATURE RCO Applications or Applications licensed under a SMS
Term License Agreement for no additional software fee during the term of this
Support Program. New Versions of previously delivered Application functions of
SMS Applications licensed under a SMS Perpetual License Agreement will be
charged at SMS' then-current rates. A Version is a delivery of new features
packages as part of existing and/or new Applications.
<PAGE> 59
(g) Meet annually with Customer's management staff to (i) jointly
develop an annual support schedule, (ii) evaluate support performance, and
(iii) review Customer's utilization of the System. The annual support schedule
will state which support services will be provided at no additional charge and
which will be provided for an additional fee.
(h) Provide Customer with all generally applicable federally-mandated
regulatory changes and state-mandated billing changes. Federally-mandated
programming changes to the Payroll and Accounts Payable Applications and to the
Case Mix Groupers/Schemes will be provided at no additional charge. SMS'
charges, if any, for other generally applicable federally-mandated programming
changes or state-mandated billing changes are contingent on the scope of such
changes and are set on a multi-client/fair-share basis for programming. Changes
will be provided to Customer when made generally available to customers of this
System.
(i) Provide Customer with an allowance of thirty-two (32) hours of SMS
Education during the first twelve (12) months of the Initial Term. Thereafter,
the Annual Education Allowance will be as provided in the annual support
schedule developed by the parties.
2. CUSTOMER SUPPORT RESPONSIBILITIES:
(a) Ensure the appropriate Customer personnel have been trained in the
operation, support, and management of the SMS System.
(b) Appoint an SMS System Support Coordinator, a LAN Administrator,
establish a central Help Desk, and, if applicable, a Departmental Help Desk for
the effective support and operation of the SMS Applications and to ensure that
Customer Responsibilities are performed.
(c) During the term of this Support Program, provide SMS with both
on-site access to each Facility and remote access to the System through the SMS
approved network services (minimum 14,400 baud) obtained by Customer to enable
SMS to provide warranty assistance both on-site and remotely. Time spent in
remote telephone support activities will be calculated in minimum time
increments of one-half (1/2) hour.
(d) Maintain up-to-date SMS Documentation at the Facility, and, for
the SMS System located at the Facility, to be solely responsible for
maintaining all necessary backup and recovery procedures.
(e) Complete proper problem determination procedures, as specified in
the Documentation, before contacting SMS and then perform problem definition
activities and remedial actions, as reasonably requested by SMS.
(f) Implement all Updates within sixty (60) calendar days and all
Releases within six (6) months, unless a delay is mutually agreed upon by the
parties.
(g) Remain on the latest Release of either the then-current Version or
next-to-current Version of the SMS Applications covered by Customer's current
Agreement and made available by SMS.
(h) Obtain all additional equipment, operating system software,
third-party software, and professional services required to stay current with
third party changes, and changes made by SMS in response to federal and state
regulatory change.
<PAGE> 60
(i) Obtain all additional equipment, operating system
software, third-party software, and professional services (i) relating to
Updates and Releases provided hereunder, (ii) relating to Custom Programming;
and (iii) relating to any Versions and optional net new function.
(j) Remain on the latest Release and Version of all
third-party software as designated by SMS and obtain support for all
third-party software from the respective vendor.
3. MISCELLANEOUS. If the parties objectively determine a problem
is not an error in the Applications, OAS, or Documentation, or if Customer
elects not to perform the Customer's Responsibilities, any support efforts made
by SMS may result in additional charges which shall be pursuant to SMS'
then-current rates and terms.
Telecommunication services line charges, charges for remote telephone
support in excess of Customer's Monthly Allowance, travel and other expenses
associated with support provided by SMS shall be paid by Customer pursuant to
SMS' then-current rates and terms.
This program shall supersede any other support agreement between SMS
and Customer relating to the Applications listed in Exhibit A.
<PAGE> 61
EXHIBIT K
MONTHLY REPORT FORM
SMS shall, no later than fifteen (15) days following the end of each
quarter, inform PeopleSoft of the delivery of any PeopleSoft Software
sublicensed by SMS and shall provide to PeopleSoft a SMS quarterly
report, in the form shown below, containing sufficient information to
allow PeopleSoft to invoice SMS for such licenses.
For the purposes of this Agreement, the quarters shall end on the
following dates:
February 28 (or February 29, if applicable)
May 31
August 31
November 30
Information required for each End User that licensed PeopleSoft Software from
SMS:
Name:
Address:
PeopleSoft Software licensed:
Royalty due to PeopleSoft:
Type of SMS End User: (Current Financials ICO User, Current Financials Non-ICO
User, New Financials ICO User, New Financials Non-ICO User, etc.)
If new SMS End User, specify SMS's Core Application licensed simultaneous with
PeopleSoft Software:
Exhibit G Update:
Specify all the entities that have executed a license agreement with SMS for any
and all SMS's Core Applications during the reporting period.
Page 46 of 51
<PAGE> 62
EXHIBIT L
1. SMS End Users
SMS understands and agrees that during the nine (9) month period following the
Effective Date, PeopleSoft and its then-current distributors, oems, vars and
other channel partners have the exclusive marketing, distribution and licensing
rights for the PeopleSoft Software to the SMS End Users specified below:
[ * ]
2. Prospects
SMS understands and agrees that during the twelve (12) month period following
the Effective Date, PeopleSoft and its then-current distributors, oems, vars and
other channel partners have the exclusive marketing, distribution and licensing
rights for the prospects specified below and SMS shall not market or distribute
the PeopleSoft Software to such prospects during such twelve month period.
[ * ]
3. SMS End User and Current PeopleSoft Customer
SMS understands and agrees the entities specified below are current PeopleSoft
customers and during Term of this Agreement, including all subsequent renewals,
PeopleSoft and its then-current distributors, oems, vars and other channel
partners may market, distribute and license the PeopleSoft Software to such
entities.
[ * ]
Page 47 of 51
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 63
[ * ]
Page 48 of 51
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 64
EXHIBIT M
SUMMARY OF SMS TRAVEL AND LIVING POLICIES
The following is a summary of the principal provisions of SMS' present
policy for employee reimbursement for United States travel and living expenses.
SMS passes these charges through to Customer.
1. Commercial Air Fare. Coach class, except business class is
reimbursable on coast-to-coast flights if it is not more than twenty percent
(20%) more expensive than coach class.
2. Car Rental. Compact car (unless the number of people being
transported requires a larger car) from a car rental firm that provides SMS
special reduced rates.
3. Use of Personal Automobile. At a rate of $.29 per mile plus
tolls for the United States, except Puerto Rico which is reimbursed at the rate
of $.32 per mile plus tolls.
4. Other Commercial Travel. Coach class for trains and buses.
Airport vans are to be used in preference to taxi cabs for travel to and from
airports where practical.
5. Parking. The maximum amount which is reimbursable for parking
at any airport or train station is the standard per-day rate for remote
parking.
6. Lodging. Lowest-priced, satisfactory accommodation. The use of
hotels which provide SMS special reduced rates is encouraged.
7. Meals. An allowance for breakfast and dinner only Monday
through Friday and additionally for lunch on weekends. The rates for these
allowances are as follows:
<TABLE>
<CAPTION>
New York City Vicinity,
Puerto Rico, Alaska, All Other
Meal and Hawaii Locations
<S> <C> <C>
Breakfast $ 6.00 $ 6.00
Lunch $ 5.00 $ 5.00
Dinner $21.00 $16.00
</TABLE>
Receipts are required for commercial travel, car rental, parking, and
lodging. Where SMS employees visit more than one client on the same trip, the
expenses incurred are apportioned in relation to time spent with each client.
SMS' policy for employee reimbursement may be changed by SMS from time
to time to reflect changes in economic and business factors.
<PAGE> 65
EXHIBIT N
SMS MARKS
TO BE PROVIDED BY SMS AT A LATER DATE (WITHIN THIRTY DAYS OF THE EFFECTIVE DATE)
Page 50 of 51
<PAGE> 66
EXHIBIT O
SUBSTANTIAL SELLING EFFORT
Date:
[On applicable party's letterhead]
Send to: PeopleSoft, Inc. or SMS (as appropriate)
Attn: Regional General Manager or SMS contact (as appropriate)
ALL INFORMATION MUST BE COMPLETED AND SIGNATURE REQUIRED BY EACH PARTY'S
AUTHORIZED REPRESENTATIVE BEFORE ELIGIBILITY FOR CREDIT OF ROYALTY
List the Substantial Selling Effort provided by PeopleSoft or SMS (as
appropriate) to qualify for royalty credit under the Agreement (list all
significant details including end user customer name, dates and locations of
sales presentations, demonstrations, submittal of RFP Responses, etc.)
- ------------------------------
SMS
- ------------------------------
PeopleSoft
This form when executed by the parties authorized representative certifies that
PeopleSoft or SMS (as appropriate) provided the above Substantial Selling Effort
and this license is authorized and qualifies for royalty credit by PeopleSoft to
SMS as set forth in Section 5 of Exhibit B to the Agreement.
Agreed & Acknowledged:
PEOPLESOFT, INC.
- -------------------------------------
Licensee
- ------------------------------------- -------------------------------------
Authorized signature of Sales Authorized signature of Sales
Management Management
- ------------------------------------- -------------------------------------
Printed name and title Printed name and title
Page 51 of 51
