<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 10-K/A NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO _________________
COMMISSION FILE NUMBER 0-20740
------------------------------------
PLATINUM SOFTWARE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-0277592
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
195 TECHNOLOGY DRIVE
IRVINE, CALIFORNIA 92618-2402
(Address of principal executive offices, zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (949) 453-4000
------------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
TITLE OF CLASS
COMMON STOCK, PAR VALUE $.001 PER SHARE
------------------------------------
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 the 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 registrant's voting Common Stock held
by non-affiliates of the registrant was approximately $269,741,181 (computed
using the closing sales price of $13.25 per share of Common Stock on September
3, 1998 as reported by the Nasdaq National Market). Shares of Common Stock held
by each officer and director and each person who owns 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
affiliates. The determination of affiliate status is not necessarily a
conclusive determination for other purposes.
There were 28,369,525 shares of the registrant's Common Stock, par value
$.001 per share, outstanding on September 3, 1998.
------------------------------------
Portions of the registrant's definitive Proxy Statement for the Annual
Meeting of Stockholders scheduled to be held on October 28, 1998, which Proxy
Statement will be filed no later than 120 days after the close of the
registrant's fiscal year ended June 30, 1998, are incorporated by reference in
Part III of this Annual Report on Form 10-K.
<PAGE> 2
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
Index to Financial Statements
-----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors...................................................... 31
Consolidated Balance Sheets as of June 30, 1997 and 1998............................ 32
Consolidated Statements of Operations for the years ended June 30, 1996,
1997 and 1998..................................................................... 33
Consolidated Statements of Stockholders' Equity for the years ended June 30,
1996, 1997 and 1998............................................................... 34
Consolidated Statements of Cash Flows for the years ended June 30, 1996,
1997 and 1998..................................................................... 35
Notes to Consolidated Financial Statements.......................................... 36
(2) Financial Statement Schedules
Index to Financial Statement Schedules
--------------------------------------
Report of Independent Auditors...................................................... 48
Schedule II - Valuation and Qualifying Accounts..................................... 49
</TABLE>
All other schedules are omitted because they are not required or the
required information is included in the consolidated financial statements or
notes thereto.
2
<PAGE> 3
(3) Exhibits
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Location
----------- ----------- --------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization and Merger dated as of June 27, 1997 (9)
among the Company, CSI Acquisition Corp., Clientele Software, Inc., Dale E.
Yocum, Pamela Yocum, William L. Mulert (Schedules not included pursuant to
Rule 601(b)(2) of Reg. S-K)
2.2 Agreement and Plan of Reorganization dated as of November 4, 1997 by and (11)
among the Company, FS Acquisition Corp., FocusSoft, Inc., John Lococo,
Michael Zimmerman and Joseph Brumleve (Schedules not included pursuant to
Rule 601(b)(2) of Reg. S-K)
3.1 Second Restated Certificate of Incorporation of the Company. (1)
3.2 Certificate of Amendment to Second Restated Certificate of Incorporation (10)
of the Company
3.3 Amended and Restated Bylaws of the Company, as currently in effect. (8)
3.6 Specimen Certificate of Common Stock. (2)
4.1 Certificate of Designation of Rights, Preferences and Privileges of (4)
Series A Junior Participating Preferred Stock
4.2 Certificate of Designation of Preferences of Series B Preferred Stock (5)
4.3 Certificate of Designation of Preferences of Series C Preferred Stock (6)
10.1 Platinum Software Corporation Incentive Stock Option, Nonqualified Stock
Option and Restricted Stock Purchase Plan - 1990 (the "1990 Plan"). (2)
10.2 Form of Incentive Option Agreement pertaining to the 1990 Plan. (2)
10.3 Form of Nonqualified Stock Option Agreement pertaining to the 1990 Plan. (2)
10.4 Form of Restricted Share Agreement pertaining to the 1990 Plan. (2)
10.5 Form of Indemnification Agreement for Officers and Directors of the (2)
Company.
10.6 Platinum Software Corporation Employee Stock Purchase Plan, as amended. (2)
10.10 1993 Nonqualified Stock Option Plan (3)
10.11 Form of Nonqualified Stock Option Agreement pertaining to the 1993 (3)
Nonqualified Stock Option Plan.
10.12 1994 Incentive Stock Option, Non-qualified Stock Option and Restricted (5)
Stock Purchase Plan.
10.13 Form of Non-qualified Stock Option Agreement pertaining to the 1994 Plan. (5)
10.28 Stock Purchase Agreement dated September 22, 1994 between the Company and
the Series B Preferred Stock Investors (6)
10.29 Registration Rights Agreement dated September 22, 1994 between the
Company and the Series B Preferred Stock Investors (6)
10.30 Amendment to Stock Purchase Agreement dated May 26, 1995 between the
Company and the Series C Preferred Stock Investors (6)
10.31 Amendment to Registration Rights Agreement dated May 26, 1995 between the
Company and the Series C Preferred Stock Investors (6)
10.33 Employment Offer letter with L. George Klaus dated February 7, 1996. (7)
10.34 Restricted Stock Purchase Agreement between the Company and L. George
Klaus dated as of February 7, 1996. (7)
10.35 Employment Offer letter with William L. Pieser dated February 7, 1996. (7)
10.36 Restricted Stock Purchase Agreement between the Company and William L.
Pieser dated as of February 7, 1996. (7)
10.42 Employment Offer letter with Ken Lally dated as of April 1, 1996. (7)
10.43 Restricted Stock Purchase Agreement between the Company and Ken Lally
dated as of April 10, 1996. (7)
10.44 1996 Nonqualified Stock Plan and Form of Nonqualified Option Agreement. (12)
10.45 Platinum Software Corporation Clientele Incentive Stock Plan. (12)
10.47 1997 Nonqualified Stock Option Plan. (13)
10.48 Amended and Restated 1998 Nonqualified Stock Option Plan.
10.49 Software Distribution License Agreement with FRx Software Corporation, as
amended to date. (Portions of this exhibit have been omitted pursuant to
an application for confidential treatment.)
22.1 Subsidiaries of the Company. (14)
23.1 Consent of Ernst & Young LLP. (14)
24.1 Power of Attorney (included on the signature page of this Annual
Report on Form 10-K).
</TABLE>
3
<PAGE> 4
Executive Compensation Plans and Arrangements
<TABLE>
<CAPTION>
Exhibit No. Description Location
----------- ----------- --------
<S> <C> <C>
10.1 1990 Plan (2)
10.2 Form of Incentive Option Agreement pertaining to the 1990 Plan. (2)
10.3 Form of Nonqualified Stock Option Agreement pertaining to the 1990 Plan. (2)
10.4 Form of Restricted Share Agreement pertaining to the 1990 Plan. (2)
10.10 1993 Nonqualified Stock Option Plan (3)
10.11 Form of Nonqualified Stock Option Agreement pertaining to the 1993
Nonqualified Stock Option Plan. (3)
10.12 1994 Incentive Stock Option, Non-qualified Stock Option and Restricted
Stock Purchase Plan. (5)
10.13 Form of Non-qualified Stock Option Agreement pertaining to the 1994 Plan. (5)
10.33 Employment Offer letter with L. George Klaus dated February 7, 1996. (7)
10.34 Restricted Stock Purchase Agreement between the Company and L. George
Klaus dated as of February 7, 1996. (7)
10.35 Employment Offer letter with William L. Pieser dated February 7, 1996. (7)
10.36 Restricted Stock Purchase Agreement between the Company and William L.
Pieser dated as of February 7, 1996. (7)
10.42 Employment offer letter with Ken Lally dated as of April 1, 1996 (7)
10.43 Restricted Stock Purchase Agreement between the Company and Ken Lally
dated as of April 10, 1996 (7)
10.44 1996 Nonqualified Stock Plan and Form of Nonqualified Option Agreement. (12)
10.45 Platinum Software Corporation Clientele Incentive Stock Plan. (12)
10.47 1997 Nonqualified Stock Option Plan. (13)
10.48 Amended and Restated 1998 Nonqualified Stock Option Plan.
</TABLE>
- -------------------
(1) Incorporated by reference to the referenced exhibit number to the
Company's Registration Statement on Form S-1, Reg. No. 33-57294.
(2) Incorporated by reference to the referenced exhibit number to the
Company's Registration Statement on Form S-1, Reg. No. 33-51566.
(3) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1993.
(4) Incorporated by reference to the referenced exhibit to the Company's
Registration Statement on Form 8-A, dated April 14, 1994.
(5) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1994.
(6) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1995.
(7) Incorporated by reference to the referenced exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.
(8) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1996.
(9) Incorporated by reference to the referenced exhibit to the Company's
Current Report on Form 8-K dated June 30, 1997.
4
<PAGE> 5
(10) Incorporated by reference to the referenced exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ending December 31, 1996.
(11) Incorporated by reference to the referenced exhibit to the Company's
Current Report on Form 8-K dated November 14, 1997.
(12) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1997.
(13) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-8, Reg. No. 333-41321.
(14) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for fiscal year ended June 30, 1998.
(b) Reports on Form 8-K.
The Company filed a current report on Form 8-K dated July 29, 1997 to
report under Item 5, Other Events, the Company's results for the
quarter and year ending June 30, 1997. In addition, the Company filed
a current report on Form 8-K, dated October 29, 1997, to report under
Item 5, Other Events, the Company's results for the quarter ending
September 30, 1997. The Company also filed a Current Report on Form
8-K dated November 25, 1997, to report under Item 2 "Acquisition or
Disposition of Assets", the acquisition of FocusSoft, Inc. The Company
also filed a Current Report on Form 8-K dated January 22, 1998, to
report under Item 5 "Other Events" the Company's results for the
quarter ending December 31, 1997.
The following trademarks may be mentioned in the foregoing Annual Report on
Form 10-K: Platinum, Clientele, and SeQueL to Platinum. Platinum, Clientele and
SeQueL to Platinum are registered trademarks of the Company. All other product
names are trademarks or registered trademarks of their respective companies.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized, in the City of Irvine,
State of California, on November 12, 1998.
PLATINUM SOFTWARE CORPORATION
By: /s/ L. GEORGE KLAUS
---------------------------------
L. George Klaus
President, Chief Executive Officer
and Chairman of the Board
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ L. GEORGE KLAUS Chairman of the Board, November 12, 1998
- ------------------------ Chief Executive Officer
L. George Klaus And President
(Principal Executive Officer)
/s/ Paul G. Mazzarella Vice President, Corporate November 12, 1998
- ------------------------ Controller (Principal Financial
Paul G. Mazzarella Accounting Officer)
* Director November 12, 1998
- ------------------------
W. Douglas Hajjar
* Director November 12, 1998
- ------------------------
L. John Doerr
* Director November 12, 1998
- ------------------------
Arthur J. Marks
* Director November 12, 1998
- ------------------------
Donald R. Dixon
*By: /s/ L. GEORGE KLAUS
- ------------------------
L. George Klaus
</TABLE>
6
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Location
----------- ----------- --------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization and Merger dated as of June 27, 1997 (9)
among the Company, CSI Acquisition Corp., Clientele Software, Inc., Dale E.
Yocum, Pamela Yocum, William L. Mulert (Schedules not included pursuant to
Rule 601(b)(2) of Reg. S-K)
2.2 Agreement and Plan of Reorganization dated as of November 4, 1997 by and (11)
among the Company, FS Acquisition Corp., FocusSoft, Inc., John Lococo,
Michael Zimmerman and Joseph Brumleve (Schedules not included pursuant to
Rule 601(b)(2) of Reg. S-K)
3.1 Second Restated Certificate of Incorporation of the Company. (1)
3.2 Certificate of Amendment to Second Restated Certificate of Incorporation (10)
of the Company
3.3 Amended and Restated Bylaws of the Company, as currently in effect. (8)
3.6 Specimen Certificate of Common Stock. (2)
4.1 Certificate of Designation of Rights, Preferences and Privileges of (4)
Series A Junior Participating Preferred Stock
4.2 Certificate of Designation of Preferences of Series B Preferred Stock (5)
4.3 Certificate of Designation of Preferences of Series C Preferred Stock (6)
10.1 Platinum Software Corporation Incentive Stock Option, Nonqualified Stock
Option and Restricted Stock Purchase Plan - 1990 (the "1990 Plan"). (2)
10.2 Form of Incentive Option Agreement pertaining to the 1990 Plan. (2)
10.3 Form of Nonqualified Stock Option Agreement pertaining to the 1990 Plan. (2)
10.4 Form of Restricted Share Agreement pertaining to the 1990 Plan. (2)
10.5 Form of Indemnification Agreement for Officers and Directors of the (2)
Company.
10.6 Platinum Software Corporation Employee Stock Purchase Plan, as amended. (2)
10.10 1993 Nonqualified Stock Option Plan (3)
10.11 Form of Nonqualified Stock Option Agreement pertaining to the 1993 (3)
Nonqualified Stock Option Plan.
10.12 1994 Incentive Stock Option, Non-qualified Stock Option and Restricted (5)
Stock Purchase Plan.
10.13 Form of Non-qualified Stock Option Agreement pertaining to the 1994 Plan. (5)
10.28 Stock Purchase Agreement dated September 22, 1994 between the Company and
the Series B Preferred Stock Investors (6)
10.29 Registration Rights Agreement dated September 22, 1994 between the
Company and the Series B Preferred Stock Investors (6)
10.30 Amendment to Stock Purchase Agreement dated May 26, 1995 between the
Company and the Series C Preferred Stock Investors (6)
10.31 Amendment to Registration Rights Agreement dated May 26, 1995 between the
Company and the Series C Preferred Stock Investors (6)
10.33 Employment Offer letter with L. George Klaus dated February 7, 1996. (7)
10.34 Restricted Stock Purchase Agreement between the Company and L. George
Klaus dated as of February 7, 1996. (7)
10.35 Employment Offer letter with William L. Pieser dated February 7, 1996. (7)
10.36 Restricted Stock Purchase Agreement between the Company and William L.
Pieser dated as of February 7, 1996. (7)
10.42 Employment Offer letter with Ken Lally dated as of April 1, 1996. (7)
10.43 Restricted Stock Purchase Agreement between the Company and Ken Lally
dated as of April 10, 1996. (7)
10.44 1996 Nonqualified Stock Plan and Form of Nonqualified Option Agreement. (12)
10.45 Platinum Software Corporation Clientele Incentive Stock Plan. (12)
10.47 1997 Nonqualified Stock Option Plan. (13)
10.48 Amended and Restated 1998 Nonqualified Stock Option Plan.
10.49 Software Distribution License Agreement with FRx Software Corporation, as
amended to date. (Portions of this exhibit have been omitted pursuant to
an application for confidential treatment.)
22.1 Subsidiaries of the Company. (14)
23.1 Consent of Ernst & Young LLP. (14)
24.1 Power of Attorney (included on the signature page of this Annual
Report on Form 10-K).
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Exhibit No. Description Location
----------- ----------- --------
<S> <C> <C>
10.1 1990 Plan (2)
10.2 Form of Incentive Option Agreement pertaining to the 1990 Plan. (2)
10.3 Form of Nonqualified Stock Option Agreement pertaining to the 1990 Plan. (2)
10.4 Form of Restricted Share Agreement pertaining to the 1990 Plan. (2)
10.10 1993 Nonqualified Stock Option Plan (3)
10.11 Form of Nonqualified Stock Option Agreement pertaining to the 1993
Nonqualified Stock Option Plan. (3)
10.12 1994 Incentive Stock Option, Non-qualified Stock Option and Restricted
Stock Purchase Plan. (5)
10.13 Form of Non-qualified Stock Option Agreement pertaining to the 1994 Plan. (5)
10.33 Employment Offer letter with L. George Klaus dated February 7, 1996. (7)
10.34 Restricted Stock Purchase Agreement between the Company and L. George
Klaus dated as of February 7, 1996. (7)
10.35 Employment Offer letter with William L. Pieser dated February 7, 1996. (7)
10.36 Restricted Stock Purchase Agreement between the Company and William L.
Pieser dated as of February 7, 1996. (7)
10.42 Employment offer letter with Ken Lally dated as of April 1, 1996 (7)
10.43 Restricted Stock Purchase Agreement between the Company and Ken Lally
dated as of April 10, 1996 (7)
10.44 1996 Nonqualified Stock Plan and Form of Nonqualified Option Agreement. (12)
10.45 Platinum Software Corporation Clientele Incentive Stock Plan. (12)
10.47 1997 Nonqualified Stock Option Plan. (13)
10.48 Amended and Restated 1998 Nonqualified Stock Option Plan.
</TABLE>
- -------------------
(1) Incorporated by reference to the referenced exhibit number to the
Company's Registration Statement on Form S-1, Reg. No. 33-57294.
(2) Incorporated by reference to the referenced exhibit number to the
Company's Registration Statement on Form S-1, Reg. No. 33-51566.
(3) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1993.
(4) Incorporated by reference to the referenced exhibit to the Company's
Registration Statement on Form 8-A, dated April 14, 1994.
(5) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1994.
(6) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1995.
(7) Incorporated by reference to the referenced exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.
(8) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1996.
(9) Incorporated by reference to the referenced exhibit to the Company's
Current Report on Form 8-K dated June 30, 1997.
(10) Incorporated by reference to the referenced exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ending December 31, 1996.
(11) Incorporated by reference to the referenced exhibit to the Company's
Current Report on Form 8-K dated November 14, 1997.
(12) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1997.
(13) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-8, Reg. No. 333-41321.
(14) Incorporated by reference to the referenced exhibit to the Company's
Annual Report on Form 10-K for fiscal year ended June 30, 1998.
<PAGE> 1
EXHIBIT 10.49
SOFTWARE DISTRIBUTION LICENSE AGREEMENT
THIS AGREEMENT ("AGREEMENT") dated as of the day of May, 1996 (the "EFFECTIVE
DATE") is made by and between FRx SOFTWARE CORPORATION, a Colorado corporation
having its principal place of business at 4949 South Syracuse Street, Suite 620,
Denver, Colorado 80237 ("FRx") and PLATINUM SOFTWARE CORPORATION, a California
corporation having its principal place of business at 195 Technology Drive,
Irvine, California 92718-2402 ("PSC").
RECITALS
WHEREAS, FRx has developed and distributed certain Software (as defined below)
and desires to license to PSC the right to market and distribute the Software;
and
WHEREAS, PSC desires to market and distribute the Software directly and through
PSC's reseller channels.
AGREEMENT
Now, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants set forth in this Agreement, FRx and PSC hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "BUNDLED SOFTWARE" means the FRx Standard Edition and the FRx
Advanced Edition to be combined with the PSC Products, with a single
price established for the combined product, as specified in Exhibit A.
1.2 "STAND-ALONE SOFTWARE" means the FRx Advanced Edition of the
Software, Remote DrillDown Viewer and other FRx products to be
distributed by PSC separately to PSC's End Users for use with PSC
Products, as specified in Exhibit A.
1.3 "SOFTWARE" means the Bundled Software and the Stand-Alone Software,
specifically interfaced to PSC products, identified on Exhibit A hereto.
1.4 "DOCUMENTATION" means user manuals and other written material that
relate to the use and operation of a particular version of the Software.
FRx will prepare the Documentation for both the FRx Standard and
Advanced Editions and will deliver such to PSC on diskette in Microsoft
Word or Framemaker format. FRx will also prepare additional
documentation information specific to PSC and deliver on diskette in
Microsoft Word or Framemaker format.
1.5 "PSC PRODUCTS" means general ledger products distributed by PSC as
defined in Exhibit A.
[*] An asterisk indicates that certain material has been omitted pursuant to an
application for confidential treatment. The omitted material has been
separately filed with the Securities and Exchange Commission.
1
<PAGE> 2
1.6 "PSC'S REVENUE" means all revenues, computed on an accrual basis,
from the licensing by PSC of the applicable Software during the
applicable time period, exclusive of any commissions or discounts paid
by PSC to PSC Resellers, less returns, shipping and freight charges,
sales and use taxes, customs, duties or other governmental charges.
Revenue does not include installation, training, consulting or other
similar fees or charges associated with the Software.
1.7 "PSC RESELLERS" means any hardware manufacturer, distributor,
dealer, qualified installer, independent sales organization, marketing
entity, or other third party to or through which PSC elects to market
the Software as well as any sub-dealer or other marketing entity to or
through which a PSC Reseller elects to market or distribute the
Software.
1.8 "END USERS" means those persons, firms, corporations or other legal
entities who are users of the PSC Products and who, under the terms of
this Agreement, will acquire the Software from PSC for its own internal
use rather than for distribution or resale.
1.9 "MINIMUM ROYALTY LEVEL" means the cumulative payment by PCS to FRx,
or cumulative obligation to make payment, of license fees totaling [*]
1.10 "SUPPORT PLAN" means the Platinum Support and Maintenance Plan
(Exhibit H-3) and/or the Platinum SQL NT Support Agreement (Exhibit H-4)
sold by PSC to its End Users.
2. LICENSE GRANT
2.1 GRANT OF LICENSE. Subject to the terms and conditions of this
Agreement and in consideration of the agreement of PSC to pay license
fees hereunder, FRx hereby grants to PSC (subject to satisfaction of
conditions specified in Section 2.1(a)) and PSC accepts a non-exclusive
worldwide license to use, copy, distribute and sublicense the Software
as a component part of the PSC Products for distribution to End Users
and to PSC Resellers for redistribution to End Users. Although the right
to license and distribute the Software generally is non-exclusive, FRx
shall not directly market or license to any other party the right to
license and distribute the Software with interfaces to the PSC Products.
The Software may be licensed by PSC to third parties either as Bundled
Software or Standalone Software as specified on Exhibit A to this
Agreement. For purposes of this Section 2.1 the term Software shall
include upgrades and updates to the Software supplied under Article 9 of
this Agreement.
2.1(a) CONDITIONS PRECEDENT TO GRANT. This grant is specifically
contingent upon PSC payment of obligations described in Section 6.1
(a), 6.1(b) and 6.1(c). PSC shall not be authorized to
distribute Software until such payments are made to FRx.
2.1(b) INTERNATIONAL TRANSLATION AND LOCALIZATION. PSC is hereby
granted the authority to translate the Software into languages other
than U.S. English for distribution in international markets. FRx
shall use all reasonable efforts to provide to PSC at no additional
cost an externalized text file to facilitate such translations no
later than six (6) months from the Effective Date. PSC shall fund
such translation efforts and own all rights to its modifications to
the translation files or tables. Should FRx develop a translated
version for specific international markets at its cost, it shall
make such version(s) available to PSC for use with PSC Products at a
fee to be reasonably negotiated between the parties.
2
<PAGE> 3
2.2 RESERVED RIGHTS. FRx reserves the right to directly license or
distribute the Software, without compensating PSC, as a component of a
multi-site or multi-division financial reporting and consolidation
solution. Such a license would be directed toward larger corporate
clients using other accounting systems in addition to PSC Products. (For
this purpose, PSC Products may not be the primary or controlling
accounting system for the end-user organization, but may be in use at
subsidiary or other levels in the organization) Should PSC assist FRx in
the sale or license of an enterprise-wide reporting and/or consolidation
solution involving non-PSC databases, FRx shall negotiate in good faith
and pay to PSC a sales commission or fee consistent with industry
standards and/or FRx established commission policies for such services.
2.3 TERMS OF LICENSE GRANT.
2.3(a) RIGHT TO USE FRx TRADEMARKS AND TRADE NAMES. In connection
with the distribution or advertising of the Software, PSC may use
trade names or trademarks of FRx, including "FRx" and "FRx: The
Financial Reporting Extender". PSC acknowledges the validity of such
trademarks and trade names and FRx's ownership thereof. All such
marks and names and any additional marks of which FRx may in the
future be the proprietor will bear the designation(TM) or the (R)
designation as specified by FRx. PSC shall not challenge FRx's
rights to use the trademarks or trade names which FRx may apply to
or use in connection with the Software. PSC shall not (nor shall it
attempt to) adopt, use, or register any acronym, trademark, trade
names or other marketing name of FRx or any confusingly similar word
or symbol as part of PSC's own name or the name of any of its
affiliates or the products it markets, except with respect to the
licensing of a prior version of the FRx software as permitted in
Section 10 of this Agreement. PSC agrees to famish to FRx a sample
of each brochure and advertising of any type using FRx trademarks
and trade names for inspection and review. If FRx at any time finds
any brochure or advertising of any type using FRx trademarks and
trade names as prepared by PSC to be inconsistent with its trademark
marketing guidelines, or prepared in a misleading or deceptive
manner, then FRx may notify PSC in writing of such deficiency or
deficiencies, and PSC shall correct or eliminate such deficiency or
deficiencies with 14 days after receipt of such notice.
2.3(b) TERMS OF SOFTWARE SUBLICENSE. Each copy of the Software and
the Documentation shall be sublicensed to End Users pursuant to the
terms and conditions of PSC's end-user license agreement ("END-USER
LICENSE"), which in every instance shall include the language set
forth on Exhibit H-1 and H-2, attached hereto, as applicable.
3. COMMENCEMENT, DURATION AND TERMINATION
3.1 TERM. The term ("Term") of this Agreement shall commence on the
Effective Date of this Agreement and shall continue until the later of
five (5) years thereafter or until the Minimum Royalty Level is
achieved. The term of this Agreement shall be automatically extended for
an additional one (1) year period at the end of the initial term and
each extended term unless either party gives written notice of its
intention not to renew this Agreement at least one (1) year prior to the
end of the then current term. This Agreement may be terminated earlier
as provided below.
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3.2 EARLY TERMINATION.
3.2(a) BREACH OF AGREEMENT. Either party may terminate this
Agreement immediately upon written notice to the other party in the
event that the other party shall be in breach of any obligation on
its part to be performed and shall have failed to remedy such
breach, if such breach is capable of remedy, within thirty (30) days
from the date of written notice specifying the breach and requiring
its remedy; or
3.2(b) BANKRUPTCY OF ANY PARTY. This Agreement shall terminate
immediately should (i) all or a substantial portion of the assets of
either party be transferred to an assignee for the benefit of
creditors, to a receiver or to a trustee in bankruptcy, or (ii) a
proceeding is commenced by or against the other party for relief
under bankruptcy or similar laws and such proceeding is not
dismissed within sixty (60) days.
3.2(b)(1) SOURCE CODE ESCROW. FRx shall deposit the source code
and Documentation for the Software with Data Securities
International, Inc. (DSI) within 30 days of Acceptance of
Software as defined in Section 4.2. PSC shall be named as a
beneficiary under the terms of the "Source Code Escrow
Agreement" form attached as Exhibit 1. Such source code shall be
released to PSC in the event of FRx's bankruptcy, receivership or
assignment for the benefit of creditors pursuant to the attached
agreement. PSC shall pay any incremental costs in connection with
such escrow account in excess of the cost of the standard
"FLEXSAFE" account that FRx currently maintains with DSI.
3.2(c) Upon sixty (60) days prior written notice, PSC may terminate
this Agreement for general economic reasons or customer preferences.
3.3 RIGHTS UPON TERMINATION. Upon termination or expiration of this
Agreement howsoever arising:
3.3(a) all amounts then owed by PSC to FRx shall thereupon become
immediately due and payable; however, if early termination is caused
by FRx or if Agreement terminates under Section 3.1, all amounts
due to FRx shall be payable in accordance with the standard payment
terms provided in Article 6.
3.3(b) FRx shall have no liability or obligation to refund any
unrecovered Prepaid License Fees provided in Section 6.1 on
termination of this Agreement, unless Early Termination is caused by
FRx under Section 3.2.
3.3(c) any provision of this Agreement expressly stated to survive,
or implicitly surviving, termination shall remain in full force and
effect including, but not limited to, the following: Section 5.5
(Proprietary Right), Article 6 (License Fees, Payments, Audit
Rights), Article 7 (Warranties, Limitation of Liability), and
Article 8 (Indemnifications, Trademarks, Confidential Information).
3.3(d) PSC shall, within a reasonable amount of time, return to FRx
all property in PSC's possession which belongs to FRx (including,
without limitation, all Documentation, manuals, software,
specifications, FRx business plans) and shall remove, cancel and/or
cease to use the trademarks, trade names and any signs,
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advertising, or other materials referring either to FRx or to PSC as
a distributor of FRx. FRx shall, within a reasonable amount of time,
return to PSC all property in FRx's possession which belongs to PSC
(including, without limitation, all Documentation, manuals,
software, specifications, PSC business plans) and shall remove,
cancel and/or cease to use the trademarks, trade names and any
signs, advertising, or other materials referring either to PSC or to
PSC as a distributor of FRx. Notwithstanding the above, PSC shall be
authorized to continue to license Software to End Users for a period
not to exceed ninety (90) days following termination for the sole
purpose of liquidating PSC inventory of Software existing at date of
termination and shall be required to pay royalties on such
transactions under the terms of this Agreement.
3.3(e) no rights of either party accrued as of the date of
termination shall be adversely affected or prejudiced; and
3.3(f) no End User License entered into prior to termination shall
be affected, but all licenses FRx granted to PSC hereunder shall
terminate.
3.3(g) In the event of either termination of the Agreement according
to its terms or Early Termination caused by PSC under Section 3.2,
the version of the FRx source code then held by PSC, as provided in
Section 10.1(a), together with any and all rights to use FRx
trademarks, shall be assigned and transferred to FRx without cost or
additional compensation.
3.3 (g)(1) In the event an End User has entered into a source
code escrow agreement with PSC prior to the Effective Date
that included the PSC version of the FRx source code and
such End User has not elected to convert to the FRx version
of Software during this Agreement, PSC shall be permitted to
deliver its version of the FRx source code to such End User,
if and when required by the source code escrow agreement.
3.3(h) PSC and FRx shall issue a joint communication to all
end-users of FRx software products (both DOS and Windows versions)
advising users of options from each company for ongoing technical
support, software maintenance and enhancement plans for existing FRx
products as well as new financial reporting products available
subsequent to termination. Either party shall be authorized to
provide such services and products to existing End Users without
compensation to the other. Notwithstanding the above, FRx is
authorized to continue to provide support services to users then
enrolled in a Support Plan for the FRx product for the duration of
the term of that user's Support Plan and retain the related funds
for providing such services.
3.3 (i) If this Agreement has not terminated under Section 3.2(a)
or (b) caused by PSC, and subject to the continuous timely
performance by PSC of its obligations under this Agreement, FRx
agrees to enter into good faith negotiations with PSC to enter into
a Software Distribution Agreement upon termination of this Agreement
on terms similar to agreements FRx has entered into with other
software vendors. This agreement would authorize PSC to distribute
FRx products, including FRx support and maintenance plans, on a
non-bundled basis to its user base and would include a prohibition
against direct solicitation or marketing by FRx of FRx products to
PSC's customer base as long as PSC actively markets such products.
Further, any unrecovered Prepaid License Fees shall be fully
recoverable against royalties under such a Distribution Agreement at
a recovery
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rate on each license not to exceed 50% of the total License Fee due
to FRx for that license.
3.4 LIMITATION OF RIGHTS UPON TERMINATION
3.4(a) NO CONTINUING RELATIONSHIP. Both parties to this Agreement
acknowledge and agree that, subject to the provisions of Section
3.3(i), they have no expectation and have received no assurances
that their business relationship will continue beyond the stated
term of this Agreement or that either shall obtain any anticipated
amount of profits by virtue of this Agreement.
3.4(b) NO CONTINUING RIGHTS. Neither party to this Agreement shall
have or acquire by virtue of this Agreement or otherwise any vested,
proprietary, or other right in the promotion of the Software or in
any goodwill created by its efforts under this Agreement.
3.5 NO DAMAGES FOR TERMINATION OR EXPIRATION. NEITHER FRx NOR PSC SHALL
BE LIABLE TO THE OTHER FOR DAMAGES OR PAYMENTS OF ANY KIND, INCLUDING
INCIDENTAL, OR CONSEQUENTIAL DAMAGES, ON ACCOUNT OF THE TERMINATION OR
EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH THIS ARTICLE 3.
4. DUTIES OF FRx
4.1 DELIVERY OF DELIVERABLES. FRx agrees to develop interfaces between
the Software and PSC Products as described on Exhibit C and, in this
regard, FRx shall deliver the Deliverables as defined in Exhibit C. PSC
shall be responsible for reproducing and distributing the Delivered
Software to its End Users in accordance with Section 5.3 and for the
paying FRx license fees as specified in Article 6.
4.1(a) PRODUCT TESTING. Testing of Software will be coordinated
between PSC and FRx. All software shall be distributed to test sites
by FRx and be subject to a beta agreement between FRx and test site.
PSC is not authorized to distribute beta Software directly to End
Users.
4.2 ACCEPTANCE OF THE SOFTWARE. Upon delivery by FRx of all of the
Deliverables, PSC will review the Software, including the interface to
PSC Products and Documentation, and notify FRx should the Software not
function substantially as described in the Documentation, the
Integration Program attached as Exhibit D and comply with the Acceptance
Criteria defined in Exhibit J. In such case, FRx shall modify the
Software and Documentation as necessary within a reasonable time after
FRx's receipt of a notice from PSC describing in detail such
deficiencies and shall deliver the revised material to PSC. PSC shall
use all reasonable efforts to perform the necessary software and system
integration testing as soon as practicable upon receipt of Software.
Should PSC encounter technical difficulties in completing such
integration and these difficulties are communicated to FRx, acceptance
of Software will not occur until integration of Software with PSC
Products is complete. Should PSC fail to advise FRx that Software does
not substantially conform to Documentation or the Integration Program
and advise FRx of the specific technical difficulties in completing the
integration of Software to PSC Products within 30 days of receipt,
Software and Documentation shall be deemed to be accepted by PSC.
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4.3 In order to facilitate PSC's distribution of the Software, FRx shall
deliver to PSC a golden master copy of the Software in object code
format and End User documentation in hard copy and diskette format. In
addition, FRx agrees to supply a golden master copy of all updates and
upgrades.
4.4 FRx COVENANTS. FRx agrees:
4.4(a) to allow any use of the Software that is permitted under the
terms of any End-User Licenses that were entered into prior to
termination or expiration of this Agreement; and
4.4(b) to provide training to PSC personnel and support with respect
to the Software, as detailed in Article 9.
4.4(c) to provide technical support of software directly to PSC
Resellers and End-Users as provided in Section 9(1)(a).
4.4(d) to maintain the Software in accordance with the provisions of
Exhibit G relating to Software Problem Resolution.
5. DUTIES OF PSC
5.1 PROMOTION, PRODUCTION AND DISTRIBUTION OF SOFTWARE. PSC agrees to
use all reasonable efforts to promote, produce and distribute the
Software as a part of or for use with the PSC Products and to maintain
adequate facilities in the performance of its obligations under this
Agreement.
5.2 MARKETING AND ADVERTISING. PSC shall be responsible for all costs
and expenses incurred by PSC as a result of PSC's advertising, promotion
and sales of the Software. PSC and FRx shall jointly prepare and release
an initial press release concerning this Agreement at an agreed time.
5.3 DISTRIBUTION TO END USERS. PSC retains all rights to establish the
sales price of the Software. PSC shall be responsible for all costs
incurred in connection with the production and distribution of the
Software and the Documentation. PSC shall be responsible for the
reproduction, printing, packaging and distribution of the Software,
including maintenance releases and upgrades. Should PSC request FRx to
provide copies of the Stand-Alone Software to PSC for redistribution to
its Resellers and End Users, PSC shall pay FRx a production fee of $50
(or other amount to be agreed upon between the parties) for each
Software and Documentation package produced by FRx plus freight (F.O.B.
point of origin). Should FRx's production costs exceed $50 per package,
PSC shall also pay such additional costs upon receipt of written
notification by FRx and submission of reasonable documentation of such
additional costs.
5.4 PSC CODE AND TEST DATABASES. PSC agrees to promptly provide FRx with
an object code copy of its software products and to promptly update
FRx's copy of such program as modifications or enhancements are
implemented. The Software is to be used for testing and development
purposes and not for internal production use. PSC agrees to promptly
establish and
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provide sample test databases adequate to test the functionality of the
Software and the interface to the PSC Products and to update such
databases as needed to reflect changes to PSC Products.
5.5 PROPRIETARY RIGHTS.
5.5(a) TITLE TO THE SOFTWARE. PSC acknowledges that FRx owns and
retains all right, title and interest in and to the Software and the
Documentation including, but not limited, to all copyrights and
trade secret rights embodied therein. PSC's license under this
Agreement includes only the right to use and make copies of the
Software and related Documentation and to distribute copies of the
Software and the Documentation to PSC's End Users, either directly
or through PSC Resellers, under the terms and conditions set forth
herein.
5.5(b) NO REVERSE ENGINEERING. PSC acknowledges that the Software
contains confidential information and trade secrets developed or
acquired by FRx through the expenditure of a great deal of time and
money. PSC agrees not to, and not to authorize or permit any of its
employees to decompile, disassemble or otherwise reverse engineer
the Software or any portion thereof and shall use its best efforts
to prevent its employees from doing the same and to immediately
notify FRx in writing if to its knowledge any employee or third
party under the direction or control of PSC decompiles, disassembles
or otherwise reverse engineers the Software or any portion thereof
or attempts such actions. Because of the unique and proprietary
nature of the Software, it is agreed that remedies at law are
inadequate to compensate FRx in the event of a breach of this
Section by PSC and, therefore, FRx shall, in the event of such
breach, be entitled to equitable relief (including, without
limitation, injunctive relief and specific performance) in addition
to all other remedies provided under this Agreement or available at
law.
5.5(c) PROPRIETARY RIGHTS NOTICES. PSC shall not remove, alter or
conceal any copyright or other proprietary right notice placed by
FRx in or on the Software or the Documentation. PSC agrees to place
such copyright or other notices on all copies of the Software and
the Documentation made or distributed under this Agreement and on
any other materials referencing the Software or the Documentation
and to comply with all directions which may be submitted by FRx from
time to time regarding the form and reasonable placement of
copyright notices and other proprietary rights notices.
5.5(d) NOTIFICATION OF INFRINGEMENTS. PSC recognizes FRx's
legitimate interest in preventing the unauthorized use,
reproduction, publication, disclosure or distribution of the
Software and the Documentation and will take all reasonable steps to
discover and prevent any such unauthorized use, reproduction,
publication disclosure or distribution. PSC hereby agrees to notify
FRx promptly and in writing whenever PSC has knowledge of any
unauthorized possession, use, reproduction, publication, disclosure
or distribution of the Software or the Documentation or any portion
thereof.
5.6 RECORDS. PSC shall maintain for at least three (3) years following
termination or expiration of this Agreement, and shall make available to
FRx for inspection and copying, all of PSC's books and records relating
to its reproduction and sale of the Software and the calculation of
License and Support Fees under Section 6 of this Agreement.
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5.7 PSC COVENANTS. PSC agrees:
5.7(a) to conduct business in a manner that reflects favorably at
all times on the Software, and the good name, goodwill, and
reputation of FRx;
5.7(b) to avoid deceptive, misleading, or unethical practices that
are or might be detrimental to FRx, the Software, PSC dealers, or
the public;
5.7(c) not to publish or employ or cooperate in the publication or
employment of any misleading or deceptive advertising materials;
5.7(d) to honor all End-User Licenses.
5.7(e) to bundle Software with PSC Products as provided in Exhibit A
and offer Software on a Stand-Alone basis to other PSC End Users.
6. LICENSE FEES, TOTAL PAYMENTS, AUDIT RIGHTS
6.1 INITIAL PAYMENT OBLIGATION. PSC agrees to pay FRx the sum of $[ * ]
within 180 days of acceptance of the Software, as follows:
6.1(a) $[ * ] upon completion of Phase I of Deliverables, as
provided in Exhibit C;
6.1(b) $[ * ] upon completion of Phase II of Deliverables;
6.1(c) Upon acceptance of the Software under Section 4.2
(completion of Phase III of Deliverables), PSC shall pay to FRx the
amount, less the $[ * ] paid above, that is recorded by PSC (as of
the Effective Date) for prepaid support and maintenance fees
("Prepaid Support") paid by End Users in connection with the version
of FRx for Windows currently distributed by PSC. Such amount
(including the payments made under Section 6.1(a) and (b))shall
not be less than $[ * ] Should the actual Prepaid Support amount be
less than $[ * ] the difference shall be treated as additional
Prepaid License Fee and recovered by PSC as provided in Section 6.1
(d). Should the actual Prepaid Support amount be greater than $[ * ]
the difference shall be payable to FRx within fifteen (15) days of
determination of the actual Prepaid Support amount.
6.1(d) The difference between (i) the sum of total payments under
Section 6.1(a) through (c) and license fees paid under Section 6.2
during the first 180 days following acceptance of the Software, and
(ii) the amount of $[ * ] shall be paid to FRx 180 days after
acceptance of the Software. Such payment shall constitute a PREPAID
LICENSE FEE that shall be applied at the rate of 100% to subsequent
license fees until fully recovered by PSC.
6.1(e) SECURITY FOR PAYMENT. To secure the payment of this Initial
Payment Obligation, FRx shall obtain a first security interest in
the shares of FRx corporate Stock owned by PSC as of the Effective
Date. PSC shall provide all necessary assistance, including
execution of appropriate documentation as provided in Exhibit L,
required to perfect such security interest. FRx shall release this
security interest upon receipt of the entire Initial Payment
Obligation.
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6.2 LICENSE FEES. The license fee payable by PSC to FRx for each unit of
the Software distributed by PSC is specified in Exhibit B attached
hereto; provided, however, that the license fee submitted by PSC shall
be equal to or greater than the Minimum Royalty, as set forth in Exhibit
B, for each copy of the Software licensed by PSC during the term of this
Agreement.
6.3 SUPPORT AND ENHANCEMENT FEES.
6.3(a) INITIAL SUPPORT FEE PAYMENT. PSC shall pay the amount
provided in Section 6.1(c), in accordance with the payment terms
provided therein.
6.3(b) SUBSEQUENT SUPPORT FEE PAYMENTS. PSC shall use all
reasonable efforts to sell support and maintenance plans for the
Software to new End Users and renewal support and maintenance plans
(the "Support Plans") to existing End Users. PSC shall invoice and
collect funds from End Users for support and maintenance plans and
remit to FRx a percentage of the support and maintenance fees
collected in accordance with Section 6.6. In the case of Support
Plans for Software sold on a Stand-Alone basis, PSC will invoice the
End User at its standard support rate applied to the total license
fee and in such case FRx shall be entitled to receive the entire
maintenance and support fee collected. In the case of support plans
for Software sold as Bundled Software, the allocation rule provided
below shall apply.
6.4 ALLOCATION FORMULA FOR BUNDLED LICENSE AND SUPPORT FEES. In
determining the amount of PSC's Revenue to be paid to FRx in the case
that the Software is licensed as Bundled Software or in the case that
PSC sells Support Plans for the Bundled Software, the allocation factors
provided below shall apply:
FRx Standard Edition bundled with Platinum for Windows [ * ]%
FRx Advanced Edition bundled with Premier Ledger [ * ]%
FRx Advanced Edition bundled with SQL NT [ * ]%
If PSC licenses the Software as Bundled Software, then FRx shall be
entitled to receive the amount of PSC Revenue from the licensing of the
Bundled Software multiplied by the appropriate allocation factor
specified above, multiplied by the applicable royalty rate contained on
Exhibit B. For example, if PSC Revenue from the license of its Platinum
SQL NT General Ledger bundled with the FRx Advanced Edition is $20,000,
PSC shall be obligated to pay to FRx [ * ] as a license fee or royalty.
This amount was determined by taking the $20,000 in revenue and
multiplying it by [ * ] (the applicable allocation percentage) and
multiplying the result by [ * ] (the applicable royalty rate). In the
above example, FRx would also be entitled to receive [ * ] as Support
Plan revenue. This amount is determined by taking the $20,000 in revenue
and multiplying it by 15% (PSC's standard rate for maintenance) and
multiplying the result by [ * ]% (the applicable allocation factor). If
PSC licenses the Software as Stand-Alone Software, then FRx shall be
entitled to receive the amount of PSC Net License Revenue from the
licensing of the Stand-Alone Software multiplied by the applicable
royalty rate contained on Exhibit B. (All amounts payable shall be
subject to the Minimum Royalty payment defined in Exhibit B.) If PSC
materially changes the pricing of the general ledger module relative to
the other modules or if the Software is bundled with different
configurations than reflected above, PSC and FRx will negotiate in good
faith to determine a new allocation percentage that maintains the
reasonable value of FRx relative to the entire system sale.
6.5 DEMONSTRATION, NOT-FOR-RESALE AND EVALUATION COPIES. Royalties or
other charges, such as Support Plan revenues, shall not be payable for
any copies of the Software used for
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demonstration, support or training of End Users, "Not-for-Resale"
software provided to resellers or for copies of the Software distributed
as "evaluation copies" of the PSC Products, which are provided to End
Users on a trial basis not to exceed ninety (90) days and for which no
consideration or other value is received by PSC. In addition, royalties
or other similar charges shall not be payable for any copies which are
provided to End Users or PSC Resellers for development purposes or for
backup or archival purposes or for copies of the Software provided to
End Users for beta testing prior to general release.
6.6 PAYMENT TERMS AND MONTHLY ACCOUNTING.
6.6(a) PSC shall provide a statement within 45 days after the end of
each month that provides details of: (i) Bundled and Stand-Alone
Software licensed by PSC during the month; (ii) the names of all PSC
End Users who have licensed Software during the month; and (iii) the
names of all PSC End Users who have purchased Support Plans and
renewals during the month.
6.6(b) Accounting for license fee and Support Plan revenues will be
computed on an accrual basis.
6.6(c) Payment of the license and support fees detailed in the
statement provided under Section 6.6(a) is to be received by FRx
before the expiration of the 45 day period. Interest charges may be
assessed by FRx on any past due amounts at a rate of 1.0% per month,
from due date of payment until payment in full is received.
6.6(d) All statements and payments shall be made to FRx at the
address of FRx set forth at the beginning of this Agreement, or at
such other address as may be designated by FRx.
6.7 MATERIAL BREACH FOR NON-PAYMENT. Failure by PSC to pay all amounts
due within sixty (60) days of the date payment is due as prescribed in
Sections 6.1 and 6.6(c) shall constitute a material breach of this
Agreement.
6.8 AUDIT RIGHT. PSC shall keep at its principal place of business
complete and accurate books and records, in accordance with Section 5.6,
which contain all information necessary to compute payment due FRx under
the terms of the Agreement. Not more than once per calendar year; FRx
may cause an audit to be made of such books and records in order to
verify statements rendered hereunder, and prompt adjustment shall be
made by the proper party to compensate the other party for any errors or
omissions disclosed by such audit. Any such audit shall be conducted by
an independent certified accountant from a firm selected by FRx during
PSC's regular business hours in such a manner as not to unduly interfere
with PSC's normal business activities. FRx shall pay the cost of such
audit unless the license fees paid to FRx are found to be less than
ninety percent (90%) of the license fees due to FRx, in which event PSC
shall pay the cost of such audit. Also, in the event such deficiency
exceeds 25% of the fees due to FRx, PSC shall pay liquidated damages on
the underpayment amount at a rate of 2.0% per month on a compounded
basis for the duration of the underpayment. FRx shall hold all
information contained in PSC's books and records in confidence and shall
use such information only to verify statements rendered under this
Agreement.
6.9 Notwithstanding the terms of this Agreement, if PSC identifies an
opportunity to market multiple licenses of the Software to an End User
in one transaction and a lower royalty amount is
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deemed by PSC to be required for PSC to be competitive, PSC may request
a lower royalty amount from FRx for such transaction. If FRx, in its
discretion, agrees to such lower royalty amount for the transaction, a
letter amendment specifying such lower royalty amount applicable to only
such transaction shall be executed by corporate officers of PSC and FRx.
7. WARRANTIES, LIMITATION OF LIABILITY
7.1 WARRANTY.
7.1(a) SOFTWARE WARRANTY. FRx warrants solely to PSC that the
Software will perform substantially in accordance with the
specifications contained in the Documentation. In the event FRx is
given written notice during the term of this Agreement, specifying
in detail any failure of the Software to function substantially in
accordance with the Documentation, FRx shall use commercially
reasonable efforts consistent with the standards set forth in
Exhibit G to promptly eliminate such failure or refund related
amounts paid, at its option. SUCH EFFORTS BY FRx SHALL BE THE SOLE
REMEDY FOR FAILURE OF THE SOFTWARE TO PERFORM ACCORDING TO THE
DOCUMENTATION. THE WARRANTY SHALL APPLY ONLY IF THE ALLEGED DEFECTS
ACTUALLY EXIST AND WERE NOT CAUSED BY MISUSE, UNAUTHORIZED
MODIFICATIONS, NEGLECT, IMPROPER INSTALLATION OR TESTING, ATTEMPTS
TO REPAIR OR THE LIKE, OR BY ACCIDENT, FIRE, POWER SURGE OR FAILURE
OR OTHER HAZARD.
7.1(b) DISCLAIMER OF IMPLIED WARRANTIES. OTHER THAN AS SET FORTH IN
THIS ARTICLE SEVEN AND IN ARTICLE EIGHT, FRx DOES NOT MAKE BY VIRTUE
OF THIS AGREEMENT, AND HEREBY EXPRESSLY DISCLAIMS, ANY
REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE SOFTWARE,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7.1(c) NO PASSING ON OF FRX WARRANTY. PSC shall not have the right
to make or pass on, and shall take any measures necessary to insure
that neither it nor its agents or employees makes or passes on, or
attempts to make or pass on, any warranties or representations on
behalf of FRx to any dealer, end-user or any other third party. Any
attempt by PSC to make or pass on any warranties or representations
on behalf of FRx to any dealer, end-user or any third party shall be
void.
7.1(d) OTHER LIMITS ON SOFTWARE WARRANTY. FRx DOES NOT WARRANT THAT
OPERATION OF THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE OR
THAT DATA WILL NOT BE LOST IF FOR ANY REASON OPERATIONS ARE
INTERRUPTED.
7.1(e) FRx warrants that it has the right to enter into this
Agreement and grant the rights and licenses set forth herein without
the consent or approval of any third party and that the terms and
provisions of this Agreement will not breach or violate the terms or
provisions of any other agreement between FRx and any other third
party and that FRx will not be subject to any duty, liability, or
obligation to any third party with respect to the Software. In
addition, FRx warrants that the Software and all other products,
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documentation and other materials required to be delivered to PSC
hereunder and the performance by FRx of its obligations hereunder,
shall be in compliance with all applicable laws, rules and
regulations as of the date of delivery thereof.
7.2 LIMITATION OF LIABILITY. EXCEPT FOR LIABILITY UNDER ARTICLE 8 OF
THIS AGREEMENT, FRx SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO PSC
OR ANY DEALER, END-USER OR ANY OTHER THIRD PARTY FOR CONSEQUENTIAL,
INDIRECT, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN
INCLUDING WITHOUT LIMITATION DAMAGES RELATING TO LOST PROFITS OR LOSS OF
DATA STORED IN THE SOFTWARE, EVEN IF FRx IS APPRISED OF THE LIKELIHOOD
OF SUCH DAMAGES OCCURRING. IN NO EVENT SHALL FRx's LIABILITY TO PSC
HEREUNDER ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
HEREIN, EXCEED THE FEES PAID BY PSC TO FRx HEREUNDER IN THE TWELVE (12)
MONTH PERIOD PRECEDING THE DATE SUCH ACTION OR CLAIM WAS FILED OR THE
FIRST TWELVE (12) MONTHS FOLLOWING EXECUTION OF THIS AGREEMENT,
WHICHEVER AMOUNT IS GREATER.
8. INDEMNIFICATIONS, TRADEMARKS, CONFIDENTIAL INFORMATION
8.1 PROPRIETARY RIGHTS INDEMNITY BY FRx.
8.1 (a) INDEMNIFICATION BY FRx. FRx represents that, subject to the
effect of the agreement discussed in Article 10, it owns (or shall
own by virtue of this Agreement) all right, title and interest in
and to the Software and Documentation, including copyrights and that
the Software does not and will not infringe or violate any
trademark, copyright, patent right or any trade secret or
proprietary information right of any third party. Subject to PSC's
use of the Software in conformance with this Agreement, FRx agrees
to indemnify, hold harmless (including reasonable attorneys' fees)
and defend any suit or proceeding brought against PSC insofar as
such suit or proceeding shall be based upon a claim that the
Software or Documentation, when used in conformance with the terms
of this Agreement, infringes or constitutes wrongful use of any
patent, trademark, copyright or trade secret within the United
States (a "PROPRIETARY RIGHT"). PSC shall notify FRx in writing of
any such suit or proceeding promptly upon PSC's first learning of
such suit or proceeding, and shall provide FRx at no cost with such
assistance and cooperation as FRx may reasonably request in the
defense thereof. FRx shall have sole control over any such suit or
proceeding, including, without limitation, the right to settle on
behalf of PSC, provided that any settlement contains a complete
release of PSC and its Resellers, and End Users, as applicable, for
any liability or obligation and provided that PSC's continued
ability to license the Software to End Users either directly or
indirectly is not materially affected. Subject to PSC's fulfillment
of its obligations under this section, FRx. shall pay all damages
and costs finally awarded against PSC (or payable by PSC pursuant to
a settlement agreement approved by FRx) in connection with any such
suit or proceeding. In the event that use of the Software or
Documentation is enjoined by any court of competent jurisdiction,
FRx shall have the option, at its expense, to: (i) modify Software
to be non-infringing, with no material change in performance and
functionality; (ii) obtain for PSC the right to continue using and
distributing Software at no charge to
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<PAGE> 14
PSC, its Resellers or End Users; or (iii) terminate this Agreement
with respect to the infringing software and refund fees paid to FRx
for such software by PSC.
8.1(b) LIMITATION OF INDEMNITY. OTHER THAN AS EXPRESSLY SET FORTH IN
THIS ARTICLE 8, FRx SHALL HAVE NO LIABILITY TO PSC WHATSOEVER FOR
ANY DAMAGES ARISING OUT OF OR RELATED TO ANY ALLEGATION OR
DETERMINATION THAT PSC's USE OR DISTRIBUTION OF THE SOFTWARE
INFRINGES OR CONSTITUTES WRONGFUL USE OF ANY PROPRIETARY RIGHT.
8.2 INDEMNIFICATION BY PSC. PSC shall be responsible for any and all
losses or damages incurred by FRx arising out of or in connection with
(i) defects in the media or reproduction of the Software or the
packaging for the Software (if PSC provided these goods), and (ii)
warranties or representations concerning the Software made by PSC or its
agents or employees, other than those contained in the End-User License
or otherwise authorized in writing by FRx and (iii) resulting from a
breach of any obligation of PSC under this Agreement. PSC agrees to
indemnify and hold FRx harmless from and with respect to any such loss
or damage (including, without limitation, reasonable attorney's fees and
costs). FRx shall notify PSC in writing of any suit or proceeding
against FRx for any of the reasons listed above promptly upon FRx's
first learning of such suit or proceeding, and shall provide PSC at no
cost with such assistance and cooperation as PSC may reasonably request
in the defense thereof. PSC shall have sole control over any such suit
or proceeding, provided, however, that PSC shall not effect a settlement
on behalf of FRx without FRx's consent, which will not be unreasonably
withheld. Subject to FRx's fulfillment of its obligations under this
Section, PSC shall pay all damages and costs awarded against FRx (or
payable by FRx pursuant to a settlement agreement) in connection with
any such suit or proceeding.
8.3 ACKNOWLEDGMENT AND LICENSE. Except as otherwise provided herein, PSC
acknowledges the exclusive right, title, and interest of FRx in and to
all of the Software (including without limitation any bug fixes,
modifications or enhancements relating thereto), all of the trademarks
and trade names (as defined in Exhibit B) and all of the copyrights,
trade secrets, and other proprietary rights relating thereto.
8.4 CONFIDENTIAL INFORMATION. By operation of and performance under this
Agreement, each party may have access to information that is
confidential to the other party (the "Confidential Information").
Confidential Information shall be limited to information which is marked
confidential or proprietary or information which should reasonably be
understood by the recipient to be confidential. Confidential Information
shall not include information which: (i) is or becomes a part of the
public domain through no act or omission of the recipient; (ii) the
recipient can demonstrate with competent written proof was in the
recipient's lawful possession prior to such access or disclosure; (iii)
is lawfully disclosed to recipient by a third party without restriction
on such disclosure; or (iv) with respect to information that is the same
as or substantially identical to the Confidential Information, is
independently developed and is so documented by the recipient.
8.5 CONFIDENTIALITY OF AGREEMENT. This Agreement shall specifically be
treated as Confidential Information by both parties. If either party is
required to file or disclose this Agreement in its public filings
pursuant to the Securities Act of 1933 or the Securities Exchange Act of
1934, such parties hereto agree that they shall disclose only the
minimum information required by these acts.
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<PAGE> 15
8.6 CONFIDENTIALITY OBLIGATION. The parties agree that both during the
term of this Agreement and for a period of five (5) years after
termination of this Agreement: (i) to hold the other party's
Confidential Information in confidence; (ii) not to disclose or make the
other party's Confidential Information available, in any form, to any
third party; and (iii) not to use the other party's Confidential
Information for any purpose other than as explicitly specified in this
Agreement.
9. TECHNICAL SUPPORT, SOFTWARE MAINTENANCE AND TRAINING
9.1 In order to provide adequate technical support and other services to
End Users of the Software, FRx and PSC agree to the following:
9.1(a) END USER SUPPORT BY FRx.
9.1(a)(1) SUBSCRIBERS TO EXISTING PSC SUPPORT PLANS. Upon
acceptance by PSC of the Software under Section 4.2,
distribution by PSC of Software to End Users subscribing to
Support Plans for the Software and payment to FRx of prepaid
Support Plan fees under Section 6.1 (c), FRx shall assume
direct responsibility for product technical support service
to such End Users in accordance with the performance
standards prescribed in the Support Plans (see Exhibit H).
This shall include all users of both FRx (DOS) and FRx for
Windows products distributed by PSC that are enrolled in a
Support Plan for the products. PSC shall provide to FRx the
information regarding subscribers to such Support Plans that
is detailed in Exhibit C under PSC Deliverables. FRx has no
responsibility to provide technical support services to any
PSC End User not included in such information.
9.1(a)(1)(1) END USERS NOT UTILIZING LATEST FRX SOFTWARE
UPGRADE. PSC acknowledges that technical support
services provided by FRx may be of a limited
nature in the case of End Users that have not
yet installed the Software Upgrade provided in
Section 9.1(c)(1) or FRx (DOS) users have not
upgraded to FRx for Windows. FRx shall provide
services to such users on a reasonable efforts
basis. FRx shall have no liability to provide
software fixes to such users if the problem or
defect has been corrected or would be resolved
through use of the latest software upgrade
provided by FRx. Also, input from such users
shall not be considered in applying the Support
Service Quality Standards of Section 9.1
(a)(5)(1).
9.1(a)(1)(2) SUPPORT FOR INTERNATIONAL END USERS. Within
sixty (60) days of the Effective Date, FRx shall
submit a plan to PSC which describes in detail
the procedures and techniques FRx will utilize
in providing technical support services to PSC's
international (outside North America) End Users.
Such plan may include arrangements with PSC
Resellers in other countries and regions to
provide front line technical support services on
behalf of FRx for a fee paid to such Resellers
by FRx. Should such plan not be satisfactory to
PSC,
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<PAGE> 16
(based upon reasonable quality standards and
similar levels of support previously provided by
PSC in such locations), PSC shall be authorized
to provide, directly or indirectly, support
services to End User in such locations and
retain a fee not to exceed fifty (50) percent of
the annual Support and Maintenance fee
attributable to affected End Users. In the event
Support and Maintenance fees have already been
paid to FRx relating to such End User(s), PSC
shall be authorized to deduct the appropriate
amount from its payment obligation to FRx under
Section 6.1 (c).
9.1(a)(2) NEW AND RENEWAL SUPPORT PLAN SUBSCRIPTIONS. PSC
shall offer Support Plans for the Software to all new end
users of Software as well as offer renewals to existing
Support Plan subscribers no later than sixty (60) days prior
to conclusion of their Support Plan contract.
9.1(a)(3) SUPPORT PLAN PRICING AND END USER IDENTIFICATION.
The pricing and structure of such plans shall be consistent
with support plans PSC markets in connection with other PSC
Products. FRx's applicable percentage of funds collected from
End Users and resellers in connection with such Support Plans
for Software shall be remitted to FRx in accordance with
Section 6.6. PSC shall provide to FRx a listing of names of
all End Users subscribing to Support Plans for the Software,
together with the expiration date of the Support Plan
agreement for each user. FRx shall have no responsibility to
provide technical support services to any PSC End User not
included in such listing or for which payment has not been
received by FRx in accordance with the payment terms of
Section 6.6.
9.1(a)(3)(1) FRx PREMIUM SUPPORT PLANS. FRx shall offer
Premium Support Plans for PSC End Users that
provide a higher level of service and cost, as
defined in Exhibit K. At its discretion, PSC and
its Resellers are hereby authorized to promote
and sell such Premium Support Plans to its End
Users and retain twenty (20) percent of the
sales price of such plans as a sales commission.
9.1(a)(4) DIRECT SOLICITATION OF SUPPORT PLANS BY FRx. PSC
shall have the primary authority and responsibility to market
and solicit enrollment in Support Plans for the Software. FRx
shall not market or solicit such enrollment directly from PSC
End Users, unless PSC fails to actively market and solicit
enrollment in such plans to End Users and timely remit funds
related thereto to FRx. For this purpose, this "active
marketing and solicitation" requirement shall be satisfied if
PSC performs the following in connection with the FRx
software products:
9.1(a)(4)(1) Support Plans are offered to all End Users
licensing Software to operate with other PSC
products.
9.1(a)(4)(2) Information and invoices to renew Support Plans
are provided to all users enrolled in such a
plan at least sixty (60) days prior to
expiration of each End User's plan year.
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<PAGE> 17
9.1(a)(4)(3) Support Plans are marketed and communicated to
resellers and End Users in the same manner,
frequency and format as support plans for other
PSC products and modules.
Should PSC fail to actively market and solicit enrollment in
Support Plans to End User according to the above standards,
FRx may, upon thirty (30) days prior written notice to PSC,
market its own support plans directly to End Users and
directly collect such funds, without compensation to PSC.
9.1(a)(5) SUPPORT SERVICES PROVIDED BY PSC. Subject to
maintenance of the Software according to standards prescribed
in Exhibit G and performance of technical support service
which is considered Acceptable according to standards defined
in Section 9. 1 (a)(5)(1), PSC is not authorized to provide
direct technical support services to PSC End Users in
connection with Software during the term of this Agreement.
Should the performance standards of FRx not be determined as
Acceptable, FRx shall have ninety (90) days to modify its
service quality to conform to the standards of Section 9. 1
(a)(5)(1). Should such services remain deficient according to
those standards after the 90 day period, PSC shall be
authorized to provide direct technical support services to
PSC End Users in connection with Software. Further, FRx shall
no longer be authorized to provide such support services to
PSC End Users without the specific written authorization of
PSC. In such event, all other terms and conditions of this
Agreement shall remain in full force and effect, including
the obligation of FRx to maintain Software in accordance with
Section 9.1(b). PSC shall be entitled to retain 50% of the
support plan revenues from End Users to whom it provides
direct technical support and FRx shall be entitled to the
remaining 50% of such revenues for its services in
maintaining and enhancing the Software. Notwithstanding the
provisions of this subsection, PSC shall be authorized to
provide technical assistance to End Users of a routine nature
so long as no compensation is received or retained by PSC for
such support.
9.1(a)(5)(1) SUPPORT SERVICE QUALITY STANDARDS. FRx agrees to
provide support services to PSC End Users
according to the standards defined in Exhibit H
(Support Plans). Further, PSC is authorized to
perform a survey of all FRx users enrolled in
Support Plans to determine general customer
satisfaction with the level and quality of
support services provided by FRx. Such survey
shall be performed no more frequently than every
twenty four (24) months and shall be jointly
written by PSC and FRx. The survey shall include
a question comparing the general quality level
of FRx services to support services provided by
PSC on other modules. Should fifty per cent
(50%) of users surveyed consider the support by
FRx to be "acceptable" or exceed the
satisfaction level earned by PSC for support of
other modules, the quality of FRx support
services shall be deemed Acceptable. End Users
not utilizing the latest Software as described
in Section 9.1(a)(1)(1) and End Users located
outside North America shall be excluded from
such survey.
9.1(b) SOFTWARE MAINTENANCE. Subject to timely payment to FRx
of the license fees provided in Article 6, FRx will provide
routine software maintenance releases at no cost
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to PSC for distribution to End Users or to PSC Resellers.
Such maintenance releases, when and if released, are intended
to correct defects that render a currently supported version
of the Software incapable of performing substantially in
accordance with the Documentation. All such defects will be
resolved in accordance with the time frames identified in
Exhibit G after they are reported to and are reproducible by
FRx, provided that the End User reporting such defects is
using the most recent version of the Software. FRx agrees to
provide to End Users of the Software the maintenance and
support services that PSC generally provides to End Users of
PSC Products as described in Exhibits H-3 and H-4.
9.1(b)(1) PSC ACCESS TO FRx SOURCE CODE. Should FRx
fail to correct defects in the Software that are
reproducible by FRx in accordance with the time frames
defined in Exhibit G, PSC may, upon thirty (30) days
prior written notice to FRx and upon FRx's continued
failure to correct such a reproducible defect, gain
access to the FRx source code to correct such defect.
If PSC gains access to the source code, PSC shall
obtain a nonexclusive, personal, nontransferable,
nonassignable license, without the right to
sublicense, to use and modify the source code and
Documentation for the sole purpose of supporting its
End Users and insuring the continued distribution and
sublicensing of the Software to End Users. In the
event PSC gains access to the source code under the
provisions of this subsection, PSC's obligations to
pay license fees under Article 6 shall remain in full
force and effect; provided, however, that the license
fees payable may be reduced by the amount of
reasonable, direct costs incurred by PSC to fix or
maintain Software.
9.1(b)(2) PSC AUDIT RIGHT. FRx shall maintain a list
of identified outstanding Software defects ("PTR's")
which affect operation of the Software with PSC
Products. Such listing will be available to PSC on
FRx's Bulletin Board Service (BBS) or Internet site
and will also be provided in other form (including
electronic mail, diskette or printed document) to PSC
upon request. PSC may, not more frequently than three
times per year, audit the listing of PTR's at FRx's
facilities to determine completeness and compliance
with Exhibit G.
9.1(c) SOFTWARE UPGRADES. FRx may develop enhancements or
increased functionality to the Software defined in Exhibit A.
Such enhancements or upgrades, when and if developed, shall
be provided to PSC for distribution to End Users then
subscribing to a Support Plan for the Software at no
additional cost. Such Software Upgrades shall not be provided
to End Users that do not then participate in such a Support
Plan.
9.1(c)(1) Subject to payment by PSC of its Initial
Payment Obligation under Section 6.1 (c), PSC is
authorized to distribute Software at no additional
cost to all PSC End Users enrolled in a Support Plan
for the FRx products as of the Effective Date of this
Agreement. PSC shall be responsible for all packaging
and distribution costs.
9.1(c)(1)(1) In the event an End User has entered into
a source code escrow agreement with PSC
prior to the Effective Date that included
the PSC version of the FRx source code,
PSC shall obtain a release from such End
User that cancels PSC's obligation to
retain such source code in an escrow
account prior to distribution of Software
to such End User FRx does not assume
PSC's source code escrow
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obligations, unless specifically agreed
to by FRx on a case-by-case basis.
9.1(d) FRx TRAINING SERVICES. At a mutually agreeable time,
FRx shall provide two (2) training programs for employees or
resellers designated by PSC for each major product release of
the Software. In conducting the training programs, FRx shall
provide the training instructors at no charge to PSC and PSC
shall be responsible for all reasonable travel and living
expenses incurred by FRx's training instructors while they
are attending the programs.
9.1(e) END USER TRAINING AND CONSULTING SERVICES. FRx agrees
to not actively market and solicit training and consulting
services to PSC resellers and End Users. FRx further agrees
to cooperate with PSC in providing training and consulting
services on a subcontracting basis through PSC to resellers
and/or End Users. Such services will be provided on an "as
available" basis and will compensate FRx at no less than 80%
of its standard billing rates. Notwithstanding the above,
PSC acknowledges that FRx generally markets its consulting
and training services in a manner that may be accessible to
PSC resellers and End Users, including industry publications,
FRx "Home Page" via Internet, FRx bulletin boards and other
methods. FRx is authorized to provide training and consulting
services in response to requests from PSC resellers and End
Users without compensation to PSC so long as FRx has not
intentionally marketed these services in a direct manner to
PSC resellers and End Users.
10. EFFECT ON PRIOR AGREEMENT BETWEEN PSC AND FRx
10.1 AGREEMENT FOR TRANSFER OF SOFTWARE AND MUTUAL RELEASE. PSC and FRx
entered into Agreement for Transfer of Software and Mutual Release on
July 22, 1994. Under terms of that agreement, PSC acquired rights to the
source code of a version of FRx Software which existed at that date and
accessed PSC Products ("PSC-FRx"). PSC's rights in connection with that
source code are hereby modified as provided below. In addition, other
provisions of the prior agreement are also modified to the extent that
they are inconsistent with the terms of this Agreement. By execution of
this Agreement, both parties agree to modify the previous agreement and
its relevant sections as follows, with all other terms and conditions
remaining in full force and effect:
10.1(a) PSC VERSION OF FRx SOURCE CODE (PSC-FRx).
10.1(a)(1) RESTRICTIONS ON PSC USE. Section 4.1 is modified
as follows:
10.1(a)(1)(1) PSC shall not market, license, convey or
otherwise deliver PSC-FRx or executable
versions of the PSC-FRx. code during the term of
this Agreement.
10.1(a)(1)(2) PSC is authorized to maintain and enhance
PSC-FRx during the term of this Agreement only
to the extent necessary to meet prior
commitments to certain End Users. A listing of
those End Users is included in Exhibit E.
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10.1(a)(1)(3) PSC shall not sell, convey or encumber
PSC-FRx source code, but shall be authorized to
deposit in a third-party escrow account only for
the benefit of specified existing End Users
defined in Exhibit E or fulfill commitments made
as of the date hereof to license source code to
certain End Users specified on Exhibit E
10.1(a)(1)(4) PSC shall maintain and protect the
confidentiality of PSC-FRx, in accordance with
the provisions of Section 8.5 and 8.6.
10.1(a)(1)(5) Upon attainment of the Minimum Royalty Level
or upon early termination by PSC under Section
3.2, PSC shall convey all copies of PSC-FRx to
FRx at no cost, together with any and all rights
to use FRx trademarks, and shall retain no
ongoing interest or ownership.
10.1(b) MODIFICATION OF OTHER PROVISIONS
10.1(b)(1) Section 4.3 of the Agreement of Transfer and
Mutual Release is modified to the extent
necessary to allow performance by FRx and PSC
of their respective obligations under this
Agreement.
10.1(b)(2) FRx and PSC agree that the performance by PSC
and FRx of their obligations under this
Agreement (i.e., PSC licensing a Stand-Alone
version of the Software) shall not be a breach
or violation of Section 4.5 of the Agreement of
Transfer and Mutual Release or an event
triggering the voiding of Section 4.3 of such
agreement
10.1(b)(2)(1) Section 4.9 regarding change of control of
PSC is modified to reflect the language in
Section 11.7 of this Agreement.
11. MISCELLANEOUS
11.1 QUARTERLY MEETINGS. Both parties agree to participate in status
meetings to be held on a quarterly basis to ensure close communication
and problem resolution in connection with this Agreement. Unless
otherwise agreed to by the parties, the meetings will rotate between
PSC's Irvine, CA offices and FRx's Denver, CO offices. Each party will
be responsible for identifying the appropriate personnel to attend such
meetings and for its own travel costs. The meetings should generally
address the status of PTRs, future product development plans for each
party and other matters arising in the course of administration of this
Agreement.
11.2 CUMULATIVE REMEDIES. Except as specifically provided herein, no
remedy made available to either party hereunder is intended to be
exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy provided
hereunder or available at law or in equity.
11.3 NOTICES. Except as otherwise expressly specified herein, all
consents, notices, requests or other communications required hereunder
shall be in writing and all such communications and all payments
required hereunder shall be deemed to have been given or made if
delivered
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personally, or mailed, by Certified or Registered mail, return receipt
requested, postage prepaid, to the parties at their respective addresses
first set forth above, or at such other address as shall be specified in
writing by either of the parties to the other in accordance with the
terms and conditions of this section. All notices, requests,
communications or payments shall be deemed effective upon receipt.
11.4 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.5 NO WAIVER. The waiver or failure of either party to exercise in any
respect any right provided for herein shall not be construed as a
continuing waiver of that right nor be deemed a waiver of any further
right granted herein.
11.6 COMPLETE AGREEMENT. The Agreement and the Exhibits and Schedules
attached hereto constitute the entire understanding and agreement
between the parties hereto and supersedes any and all prior or
contemporaneous oral or written representations or communications with
respect to the subject matter hereof, all of which are merged herein.
This Agreement shall not be modified, amended or in any way altered
except by an instrument in writing signed by both of the parties hereto.
All amendments or modification of this Agreement shall be binding upon
the parties despite any lack of consideration so long as the same shall
be in writing and executed by the parties hereto.
11.7 ASSIGNMENT. This Agreement may not be assigned or sublicensed by
either party without the written approval of the other party, such
approval not to be unreasonably withheld, provided, however, that either
party may assign this Agreement in connection with a sale of all or
substantially all of its assets or capital stock. This Agreement shall
be binding upon and inure to the benefit of each of the parties hereto
and, except as otherwise provided herein, their respective heirs, legal
successors and assigns.
11.8 RESTRICTIONS REGARDING SALE OR CHANGE OF CONTROL OF EITHER COMPANY.
In the event of change of control of either FRx or PSC, the terms and
conditions of this contract will remain in effect. In the event of a
change in control of PSC, the successor or surviving entity may continue
to distribute the Software as a component part of PSC products that are
substantially the same as those existing prior to the change in control
and are marketed in a similar manner at generally equivalent pricing
after the change, subject to all terms and conditions of this Agreement,
including the obligation to pay royalties and support fees pursuant to
Article 6. Such rates shall continue to apply to subsequent versions of
PSC products that represent a continuation of the general code and
architectural structure that existed prior to the change in control. The
acquiring company shall not have the right to distribute the Software in
conjunction with the its separate products , although FRx agrees to
negotiate in good faith with the acquiring company to license programs
for such separate products.
11.9 SEVERABILITY. In the event that any provision hereof is found to be
invalid, illegal, or unenforceable pursuant to a judicial decree to
decision, the remainder of this Agreement shall be binding and
enforceable according to its terms.
11.10 FORCE MAJEURE. Neither party shall be deemed to be in default of
or to have breached any provision of this Agreement, except a provision
relating to the payment of money, as a result of any delay, failure in
performance or interruption of service, resulting directly or indirectly
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from its acts of God, acts of civil or military authorities, civil
disturbances, wars, strikes or other labor disputes, fires,
transportation contingencies, laws, regulations, acts or orders of any
government agency or official thereof, other catastrophes or any other
similar circumstances beyond such party's reasonable control.
11.11 ARBITRATION. Any controversy or claim arising out of, or relating
to this Agreement, or its breach, shall be settled by arbitration in the
City of Denver, Colorado, in accordance with the then governing
commercial rules of arbitration of the American Arbitration Association.
Judgment upon any award rendered therein may be entered and enforced in
any court of competent jurisdiction. In assembling a panel of
prospective arbitrators, the American Arbitration Association shall
utilize its best efforts to include individuals educated and/or
experienced in the computer software industry. Arbitration does not
prevent either party from obtaining injunctive relief.
11.12 CHOICE OF LAW AND FORUM. This Agreement shall be construed and
enforced in accordance with the laws of the State of Colorado, without
regard to its conflict of law provisions, and both parties consent to
jurisdiction by courts in the State of Colorado.
11.13 RELATIONSHIP. Nothing contained in this Agreement shall be
construed as creating a joint venture, partnership or employment
relationship between the parties hereto. Except as specified herein,
neither party shall have the right, power or implied authority to create
any obligation or duty, express or implied, on behalf of the other party
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date last written below.
PLATINUM SOFTWARE CORPORATION FRx SOFTWARE CORPORATION
By: MICHAEL J. SIMMONS By: MICHAEL L. ROHAN
----------------------------- ------------------------------
Name: MICHAEL J. SIMMONS Name: MICHAEL L. ROHAN
--------------------------- ----------------------------
Title: CFO Title: President
-------------------------- ---------------------------
Date: 5-7-96 Date: 5-9-96
--------------------------- ----------------------------
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EXHIBIT A
SOFTWARE
The following FRx software products are included in this Agreement. Software to
be provided in executable form (not source code) for production and distribution
by PSC:
FRx FOR WINDOWS STANDARD EDITION (VERSION 4.5) - to be bundled with
every copy of Platinum for Windows (unless bundled with FRx Advanced
Edition). Also available as bundled component of Platinum DOS products.
The features of this Standard Version are detailed below. This product
is not available for distribution on a Stand-Alone basis, but may be
distributed by PSC as an upgrade to End Users who previously licensed
the FRx Standard Edition (DOS) product.
FRx FOR WINDOWS ADVANCED EDITION (VERSION 4.5) - to be bundled with
every copy of Platinum for Windows Premier Ledger, Platinum Premier
Ledger (DOS) and Platinum SQL NT products. Also available on a
Stand-Alone basis to all existing Platinum users.
FRx ENTERPRISE EDITION - New product to be released subsequent to date
of Agreement which may include the following features: FRx Application
Server; Report Manager; OLAP Processing capabilities; FASB 52; and
Automated Electronic Report Distribution. Features and pricing to be
determined upon product release.
ADDITIONAL FRx PRODUCTS - Add-on or ancillary products that are sold
separately on a Stand-Alone basis. This includes the FRx remote
drill-down viewer and any future products that are packaged and sold
separately from current FRx for Windows products.
USER AUTHORIZATION:
BUNDLED AND STAND-ALONE DISTRIBUTION
User Authorization equal to Platinum System Manager user authorization.
(Should the number of authorized General Ledger users for a single
server exceed fifty (50) users, PSC and FRx agree to negotiate in good
faith to determine an equitable revenue allocation to FRx on a
case-by-case basis.)
FEATURES OF FRx STANDARD EDITION:
The FRx Standard Edition shall have the same level of performance and
functionality as FRx Advanced Edition 4.5, including FRx Drill Down viewer,
subject to the following limitations:
Only one reporting tree may be used with two roll-up levels
No multicompany consolidation capability.
Can export to worksheets (i.e., Excel, Lotus 1-2-3) but cannot import data from
worksheets into FRx
Limited to one general ledger link
No row linking capabilities
No FRx independent security
<PAGE> 24
PSC PRODUCTS
o Platinum DOS Ledger 4.la
o Platinum DOS Ledger 2.x; 3.x (to be determined)
o Platinum Premier Ledger 4.la
o Platinum for Windows Premier Ledger 4.3a
o Platinum for Windows Standard Ledger 4.3a
o Platinum SQL NT 3.1 General Ledger
o Platinum SQL NT 3.2a and 3.2b General Ledger
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EXHIBIT B
LICENSE FEES
<TABLE>
<CAPTION>
TIER I* TIER II**
------------------- -------------------
ROYALTY MINIMUM ROYALTY MINIMUM
FRX PRODUCTS RATE ROYALTY RATE ROYALTY
- ------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
FRx Standard Edition*** [ * ] [ * ] [ * ] [ * ]
FRx Advanced Edition:
with PFW Standard Ledger [ * ] [ * ] [ * ] [ * ]
with Premier Ledger [ * ] [ * ] [ * ] [ * ]
with SQL NT Ledger [ * ] [ * ] [ * ] [ * ]
Upgrade to FRx Advanced
from FRx Advanced-DOS**** [ * ] [ * ] [ * ] [ * ]
FRx Enterprise Edition [ * ] [ * ] [ * ] [ * ]
FRx Remote DrillDown Viewer
(per user) [ * ] [ * ] [ * ] [ * ]
All additional FRx products [ * ] [ * ] [ * ] [ * ]
</TABLE>
* Prior To Attainment of Minimum Royalty Level defined in Section 1.8.
** Subsequent To Attainment of Minimum Royalty Level defined in
Section 1.8.
*** Includes upgrades from FRx Standard Edition (DOS). License fee waived if
upgrading End User purchases Support Plan for Software.
**** License fee waived if upgrading End User purchases Support Plan for
Software.
TBD: "To be determined"
Royalty Rate is to be applied to PSC Revenue (Section 1.6) using the following
Allocation Formulas detailed in Section 6.4 for Bundled Products:
FRx Standard Edition bundled with Platinum for Windows [*]
FRx Advanced Edition bundled with Premier Ledger [*]
FRx Advanced Edition bundled with SQL NT [*]
<PAGE> 26
EXHIBIT C
DELIVERABLES
FRx DELIVERABLES
BETA DELIVERABLES:
o FRx application program executables, files and licensed supporting
components (dll, vbx, ocx, etc.)
o Conversion utility program executables, files and licensed supporting
components for conversion of FRx DOS and Platinum FRx for Windows data to
the new release.
o labeled and identified as Beta version X.X on the delivery media and Help
About menu.
o Installation program for installing the beta software.
o Documentation of product, including:
o Beta release notes (wt. installation instructions)
o Conversion utility
o FRx user guide
o Platinum interface guide
o Current PTR list documenting outstanding PSC-specific PTRs and their
severity.
PHASE I*: ABOVE DELIVERABLES FOR THE FOLLOWING PSC PRODUCTS:
o Platinum DOS Ledger 4.1a
o Platinum Premier Ledger 4.la
o Platinum for Windows Premier Ledger 4.3a
o Platinum for Windows Standard Ledger 4.3a
PHASE II*: Above DELIVERABLES FOR THE FOLLOWING PSC PRODUCTS:
o Platinum SQL NT 3.1 General Ledger
o Platinum SQL NT 3.2a and 3.2b General Ledger
26
<PAGE> 27
PHASE III*: FINAL ACCEPTANCE OF SOFTWARE
GENERAL AVAILABILITY DELIVERABLES:
o Application program executables, files and licensed supporting components
(dll, vbx, ocx, etc.)
o Conversion utility program executables, files and licensed supporting
components for conversion of FRx DOS and Platinum FRx for Windows data to
the new release.
o Installation program for installing the software.
o Documentation of product, including:
o GA release notes (with installation instructions)
o Conversion utility documentation
o FRx user guide
o Platinum interface guide
o Current PTR list documenting outstanding PSC-specific PTRs and
their severity.
*See payment requirements in Section 6.1 upon completion of each phase.
PSC DELIVERABLES
Listing of all users enrolled in a PSC Support Plan covering FRx products as of
Effective Date of Agreement. Listing to be provided no later than thirty (30)
days after the Effective Date and prior to distribution of Software to End
Users. The following shall be included for each End User:
o User name and address
o PSC Product version
o FRx Product version
o Expiration date of current plan
o Annual cost of plan
o Remaining Cost to Plan Expiration
o Restrictions or limitations on coverage
o Type of Plan (MP, CSP, PSP, other)
27
<PAGE> 28
EXHIBIT D
INTEGRATION PROGRAM
ISSUES TO BE RESOLVED THROUGH JOINT EFFORTS BY FRx AND PSC SUBSEQUENT TO
EFFECTIVE DATE:
o Software Registration Procedures
o Installation
o Integration with PSC menus
o Security
o Software licensing methods for international distribution
28
<PAGE> 29
EXHIBIT E
LISTING OF END USERS REQUIRING
SOURCE CODE ESCROW/SUPPORT
Information to be provided to FRx by PSC within thirty (30) days of Effective
Date.
29
<PAGE> 30
EXHIBIT F
TRADEMARKS
FRx
FRx: The Financial Reporting Extender
30
<PAGE> 31
EXHIBIT G
SOFTWARE PROBLEM RESOLUTION
During the term of this agreement, FRx will use all reasonable efforts to
correct defects in the Software in accordance with the schedule set forth below.
SEVERITY I ERROR: A severity I error will consist of an Error or group of Errors
that render a significant portion of the program unusable and no immediate means
of circumvention is available, or an Error in which the program is causing
damage to data files or databases. FRx will provide a circumvention to a
Severity I Error within three (3) business days and will provide a resolution
to a Severity I Error within five (5) business days.
SEVERITY II ERROR: A severity II error will consist of an Error or group of
Errors that render certain significant and fundamental features or portions of
the program unusable and no immediate means of circumvention is available. FRx
will provide a circumvention to a Severity II Error within five (5) business
days and will provide a resolution to a Severity II Error within fifteen (15)
business days.
SEVERITY III ERROR: A severity III error will consist of an Error or group of
Errors that render use of the program difficult and for which inconvenient means
of circumvention are available to the user. FRx will provide resolution to a
Severity III Error in thirty (30) business days.
SEVERITY IV ERROR: A severity IV error will consist of an Error or group of
Errors that can be easily circumvented or tolerated by the user of the Program.
FRx will provide resolution to a Severity IV Error in the next upgrade of the
program.
DETERMINATION OF TIME FRAME FOR ERROR CORRECTION.
The time in which FRx will provide a circumvention or resolution of an Error
will be measured from the later of identification of the Error through
communication from PSC, Reseller or End User or delivery to FRx of materials
required by FRx to replicate the Error. Further, should the Error be caused or
directly related to an error or design flaw in any PSC module, the time in which
FRx will provide a circumvention or resolution of an Error will be measured from
the date the error or design flaw is corrected in the related PSC module and
such corrected module is provided to FRx.
CHANGES TO PSC TABLE STRUCTURES OR FILES
Should PSC modify its data model, table structures or files in a manner that
affects the operation of FRx, the above Error correction policies will not
apply. If PSC notifies FRx prior to the change and provides FRx an opportunity
to assess and comment on the impact of such change, then FRx will use all
reasonable efforts to ensure the continued compatibility of Software with PSC
product within 60 days of receipt of all the following items: (i) written
notification of specific changes; (ii) PSC software reflecting such changes; and
(iii) a test PSC database for FRx use in testing changes to its Software. If FRx
does not receive prior notification of and an opportunity to comment on proposed
change, FRx will make a reasonable effort to accommodate change but cannot
commit to a specific time frame for completion.
31
<PAGE> 32
EXHIBIT H
PSC LICENSE AGREEMENTS AND SUPPORT PLANS
EXHIBIT H-1 PLATINUM SOFTWARE LICENSE AGREEMENT
EXHIBIT H-2 PLATINUM SQL NT SOFTWARE LICENSE AGREEMENT
EXHIBIT H-3 PLATINUM SUPPORT AND MAINTENANCE AGREEMENT
EXHIBIT H-2 PLATINUM SQL NT SUPPORT AGREEMENT
<PAGE> 33
EXHIBIT H-1
--------------------------------
PLATINUM SOFTWARE LICENSE
--------------------------------
[LOGO] PLATINUM(R)
PLATINUM [Multi-User Version]
SOFTWARE CORPORATION
BY OPENING THE SEALED PACKET(S) CONTAINING THE SOFTWARE, YOU INDICATE YOUR
ACCEPTANCE OF THE FOLLOWING PLATINUM SOFTWARE LICENSE AGREEMENT ("AGREEMENT").
IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, PROMPTLY RETURN THIS PRODUCT
UNOPENED TO THE PLACE YOU OBTAINED IT FOR A FULL REFUND.
PLATINUM LICENSE AGREEMENT
PLATINUM SOFTWARE LICENSE
1. GRANT OF LICENSE. Platinum Software Corporation or the applicable Platinum
country organization or subsidiary ("Platinum") grants you the following rights
with respect to the Platinum software program identified above (the "SOFTWARE"):
(a) Installation. You may install one (1) copy of the SOFTWARE on a single
computer if you are licensing the single user version or on a single computer
acting as a network server (the "SERVER") if you are licensing the multi-user
version.
(b) Use. SOFTWARE may only be used on one and the same computer or SERVER. As
part of the multi-user version three (3) concurrent users may access the network
and use the services provided by the SERVER. In order to authorize additional
concurrent users a customer must purchase additional user blocks. Concurrent
users are the number of users logged on to and using the SOFTWARE.
(c) Notice to Users. You shall inform all users of the SOFTWARE of the terms and
conditions of this Agreement.
2. COPYRIGHT. You acknowledge and agree that the SOFTWARE and SOFTWARE
documentation are proprietary products of Platinum and are owned by Platinum or
its suppliers and, as such, are protected by United States copyright laws and
international treaty provisions. Therefore, you must treat the SOFTWARE like any
other copyrighted material (e.g. a book or musical recording) except that you
may either (a) make one copy of the SOFTWARE solely for backup or archival
purposes, or (b) transfer the SOFTWARE to a single hard disk provided you keep
the original solely for backup or archival purposes. You may not copy the
written materials accompanying the SOFTWARE. You may copy on-line documentation
for internal business use only provided all copies contain Platinum's
proprietary rights notice. Platinum retains all title and ownership of the
SOFTWARE.
3. OTHER RESTRICTIONS. This Agreement is your proof of license to exercise the
rights granted herein and must be retained by you. You may not rent or lease the
SOFTWARE, but you may transfer your rights under this Agreement on a permanent
basis provided you transfer this Agreement, all copies of the SOFTWARE and all
written materials, and the recipient agrees to the terms of this Agreement. You
may not reverse engineer, decompile, or disassemble the SOFTWARE. Any transfer
of the SOFTWARE must include the most recent update and all prior versions.
4. LIMITED WARRANTY. Platinum warrants that the magnetic media, disk or CD ROM
on which the SOFTWARE is recorded and any SOFTWARE documentation will be free
from defects in material and workmanship under normal use for a period of ninety
(90) days from date of receipt. Other than the media warranty, the SOFTWARE is
licensed on an "AS IS" basis.
10
<PAGE> 34
5. LIMITATION OF LIABILITY. Platinum's entire liability to you or any other
party for any loss or damage resulting from any claims, demands or actions
arising out of this Agreement shall not exceed the license fee paid to Platinum
for the SOFTWARE, net of dealer or distributor margins.
6. NO OTHER WARRANTIES. PLATINUM DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SOFTWARE AND THE
ACCOMPANYING SOFTWARE DOCUMENTATION. THIS LIMITED WARRANTY GIVES YOU SPECIFIC
LEGAL RIGHTS. YOU MAY HAVE OTHERS, WHICH VARY FROM STATE TO STATE.
7. NO LIABILITY FOR CONSEQUENTIAL DAMAGES. In no event shall Platinum or its
suppliers be liable for any indirect, incidental, consequential, special or
exemplary damages whatsoever (including, without limitation, damages for loss of
business profits, business interruption, loss of business information, or other
pecuniary loss) arising out of the use or inability to use the SOFTWARE, even if
Platinum has been advised of the possibility of such damages. Because some
states do not allow the exclusion or limitation of liability for consequential
or incidental damages, the above limitation may not apply to you.
8. EXPORT RESTRICTIONS. You agree that neither you nor your customers intend to
or will, directly or indirectly, export or transmit the SOFTWARE or related
documentation and technical data to any country to which such export or
transmission is restricted by any applicable U.S. regulation or statue, without
the prior written consent, if required, of the Bureau of Export Administration
of the U.S. Department of Commerce, or such other governmental entity as may
have jurisdiction over such export or transmission.
9. TERMINATION. This Agreement is effective until terminated. This Agreement
will terminate automatically without notice from Platinum if you fail to comply
with any provision of the Agreement. Upon termination you shall destroy all
copies of the SOFTWARE, including modified copies, if any.
10. GOVERNMENT RESTRICTED RIGHTS. The SOFTWARE and documentation are provided
with Restricted Rights. Use, duplication or disclosure by the Government is
subject to restrictions as set forth in subparagraph (c) (1) (ii) of the Rights
in Technical Data and Computer Software clause at DFARS 252.227-7013 or
subparagraphs (c) (1) and (2) of the Commercial Computer Software - Restricted
Rights at 48CFR 52.227-19 as applicable. Manufacturer is Platinum Software
Corporation, 195 Technology Drive, Irvine, CA 92718.
If you acquired this product in the United States, this Agreement is governed by
the laws of the State of California.
Should you have any questions concerning this Agreement, or if you desire to
contact Platinum for any reason, please contact your local Platinum sales
office, or write Platinum Software Corporation Sales and Service, 195 Technology
Drive, Irvine, CA 92718.
11
<PAGE> 35
EXHIBIT H-2
--------------------------------
PLATINUM SOFTWARE LICENSE
--------------------------------
[LOGO] PLATINUM(R) SQL NT
PLATINUM [AUTHORIZED CONCURRENT USERS: 5]
SOFTWARE CORPORATION
BY OPENING THE SEALED PACKET(S) CONTAINING THE SOFTWARE, YOU INDICATE YOUR
ACCEPTANCE OF THE FOLLOWING PLATINUM SOFTWARE LICENSE AGREEMENT ("AGREEMENT").
IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, FOR A FULL REFUND, PROMPTLY
RETURN THIS PRODUCT UNOPENED TO THE PLACE YOU OBTAINED IT.
PLATINUM LICENSE AGREEMENT
PLATINUM SOFTWARE LICENSE
1. GRANT OF LICENSE. Platinum Software Corporation ("Platinum") grants you the
following rights with respect to the Platinum software program identified above
(the "SOFTWARE"):
(a) Installation. You may install the server portion of the SOFTWARE on a single
computer acting as a network server (the "SERVER"). You may install the client
portion of the SOFTWARE, which includes client interface libraries and client
utilities on workstations or computers operating on a single computer network
which are connected to the SERVER.
(b) Use. The components of the SERVER portion of the SOFTWARE may only be used
on one and the same SERVER. As part of this license, five (5) concurrent users
may access the network and use the services provided by the SERVER. In order to
authorize additional concurrent users a customer must purchase additional user
blocks. Concurrent users are the number of users logged on to the system manager
module. If one user is logged on to more than one application at the same time,
each application will be counted as a separate concurrent user. In addition, the
SOFTWARE may be used on an additional server, at no additional charge, for the
purpose of training your employees on the use of the SOFTWARE, provided that the
SOFTWARE is removed from the second server once the training session is
completed.
(c) Developer Tools. If you have purchased a license for the developer tools,
you may use the developer tools, in machine-readable form only and for
modification and enhancement of the SOFTWARE for internal business use only. The
developer tools may not be used to design or develop any products to be
sublicensed or distributed.
(d) Notice to Users. You shall inform all users of the SOFTWARE of the terms and
conditions of this Agreement.
(e) License Limitation. The magnetic media, disk or CD-ROM on which the SOFTWARE
is recorded may contain modules or applications for which you do not have a
fully paid license to use. You agree to install and use only those applications
or modules of the SOFTWARE for which you have a fully paid license.
2. COPYRIGHT. You acknowledge and agree that the SOFTWARE and SOFTWARE
documentation are proprietary products of Platinum and are owned by Platinum or
its suppliers and, as such, are protected by United States copyright laws and
international
12
<PAGE> 36
treaty provisions. Therefore, you must treat the SOFTWARE like any other
copyrighted material (e.g. a book or musical recording) except that you may
either (a) make one copy of the SOFTWARE solely for backup or archival purposes,
or (b) transfer the SOFTWARE to a single hard disk provided you keep the
original solely for backup or archival purposes. You may not copy the written
materials accompanying the SOFTWARE. Platinum retains all title and ownership of
the SOFTWARE.
3. OTHER RESTRICTIONS. This Agreement is your proof of license to exercise the
rights granted herein and must be retained by you. You may not rent or lease the
SOFTWARE, but you may transfer your rights under this Agreement on a permanent
basis provided you transfer this Agreement, all copies of the SOFTWARE and all
written materials, and the recipient agrees to the terms of this Agreement. You
may not reverse engineer, decompile, or disassemble the SOFTWARE. Any transfer
of the SOFTWARE must include the most recent update and all prior versions.
4. LIMITED WARRANTY. Platinum warrants that the magnetic media on which the
SOFTWARE is recorded and any SOFTWARE documentation will be free from defects in
material and workmanship under normal use for a period of ninety (90) days from
date of receipt. Platinum also warrants that the original copy of the SOFTWARE
will perform substantially in accordance with the accompanying SOFTWARE
documentation for a period of ninety (90) days from the date of receipt.
Platinum does not warrant that functions contained in the SOFTWARE will meet
your requirements or that the operation of the SOFTWARE will be error-free or
uninterrupted. Your exclusive remedy for breach of Platinum's warranty shall be
(i) in case of defects in the media, the replacement by Platinum of any magnetic
media not meeting the warranty and (ii) in case of any defect in the SOFTWARE,
Platinum shall use reasonable efforts to provide corrections or fixes in a
timely manner, or at its option replace the SOFTWARE, provided the SOFTWARE is
returned with a copy of your receipt. This limited warranty is void if failure
of the SOFTWARE has resulted from accident, abuse, or misapplication. Any
replacement SOFTWARE will be warranted for the remainder of the original
warranty period or thirty (30) days, whichever is longer.
5. LIMITATION OF LIABILITY. Platinum's entire liability to you or any other
party for any loss or damage resulting from any claims, demands or actions
arising out of this Agreement shall not exceed the license fee paid to Platinum
for the SOFTWARE, net of dealer or distributor margins.
6. NO OTHER WARRANTIES. PLATINUM DISCLAIMS ALL OTHER WARRANTIES, TERMS OR
CONDITIONS EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES, TERMS OR CONDITIONS OF MERCHANTABILITY, SATISFACTORY QUALITY AND
FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SOFTWARE AND THE
ACCOMPANYING SOFTWARE DOCUMENTATION. THIS LIMITED WARRANTY GIVES YOU SPECIFIC
LEGAL RIGHTS. YOU MAY HAVE OTHERS, WHICH VARY FROM STATE TO STATE.
7. NO LIABILITY FOR CONSEQUENTIAL DAMAGES. In no event shall Platinum or its
suppliers be liable for any indirect, incidental, consequential, special or
exemplary damages whatsoever (including, without limitation, damages for loss of
business profits, business interruption, loss of business information, or other
pecuniary loss) arising out of the use or inability to use the SOFTWARE, even if
Platinum has been advised of the possibility of such damages. Because some
states do not allow the exclusion or limitation of liability for consequential
or incidental damages, the above limitation may not apply to you.
8. EXPORT RESTRICTIONS. You agree that neither you nor your customers intend to
or will, directly or indirectly, export or transmit the SOFTWARE or related
documentation and technical data to any country to which such export or
transmission is restricted by any applicable U.S. regulation or statue, without
the prior written consent, if required, of the Bureau of Export Administration
of the U.S. Department of Commerce, or such other governmental entity as may
have jurisdiction over such export or transmission.
9. TERMINATION. This Agreement is effective until terminated. This Agreement
will terminate automatically without notice from Platinum if you fail to comply
with any provision of the Agreement. Upon termination you shall destroy all
copies of the SOFTWARE, including modified copies, if any.
10. MAINTENANCE AND SUPPORT. Maintenance, including the provision of upgrades
and updates to the SOFTWARE, and telephone support is available from Platinum
only through a maintenance plan. Upgrades and updates are not available
separately.
The SOFTWARE and documentation are provided with Restricted Rights. Use,
duplication or disclosure by the Government is subject to restrictions as set
forth in subparagraph (c) (1) (ii) of the Rights in Technical Data and Computer
Software clause at DFARS 252.227-7013 or subparagraphs (c) (1) and (2) of the
Commercial Computer Software - Restricted Rights at 48CFR 52.227-19 as
applicable. Manufacturer is Platinum Software Corporation, 195 Technology Drive,
Irvine, CA 92718.
If you acquired this product in the United States, this Agreement is governed by
the laws of the State of California. If you acquired this product in Australia
or New Zealand, this Agreement is governed by the laws of New South Wales and
New Zealand, respectively.
Should you have any questions concerning this Agreement, or if you desire to
contact Platinum for any reason, please contact your local Platinum sales
office, or write Platinum Software Corporation Sales and Service, 195 Technology
Drive, Irvine. CA 92718.
13
<PAGE> 37
EXHIBIT H-3
--------------------------------
PLATINUM SOFTWARE CORPORATION
--------------------------------
[LOGO]
PLATINUM
SOFTWARE CORPORATI0N
MAINTENANCE COMMENCEMENT DATE ____________________________________
REGISTERED USER NAME _____________________________________________
PLATINUM SUPPORT AGREEMENT
(PLATINUM(R) SQL NT)
This document certifies that the registered user identified above is entitled to
receive the following maintenance services for the one year period beginning on
the Maintenance Commencement Date.
1. UNLIMITED TELEPHONE OR FACSIMILE SUPPORT. The hours of operation are 6:00 AM
to 6:00 PM, Pacific Standard Time, during normal business hours (Monday through
Friday), excluding holidays. The registered user shall appoint three (3)
individuals within its organization to serve as the primary contacts between
Platinum and the registered user and to receive support through the telephone
support center.
2. SOFTWARE UPDATES/UPGRADES. Platinum shall provide to the registered user
without additional charge, all updates to the Software Program specified above
(including related documentation) commercially released by Platinum during the
term of the maintenance agreement. Updates consist of new releases of a
particular software version which provide functional enhancements and error
corrections. Platinum shall provide to the registered user without additional
charge, all upgrades to the Licensed Software commercially released by Platinum
during the term of the agreement. Upgrades consist of new releases with a higher
Platinum version number such as from version 1.0 to 2.0.
3. REMOTE DIAGNOSTICS. Platinum may provide remote access software to facilitate
remote diagnostics. In order to take advantage of remote diagnostics, Customer
may be required to purchase a compatible modem.
4. LIMITED WARRANTY. Platinum warrants that the maintenance services will be
performed in a professional workmanlike manner. PLATINUM DISCLAIMS ALL OTHER
WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO THE MAINTENANCE SERVICES. THIS LIMITED WARRANTY GIVES YOU SPECIFIC LEGAL
RIGHTS. YOU MAY HAVE OTHERS, WHICH VARY FROM STATE TO STATE.
PLATINUM SOFTWARE TELEPHONE SUPPORT NUMBER: (800) 285-7877
14
<PAGE> 38
5. LIMITATION OF LIABILITY. Platinum's entire liability to you or any other
party for any loss or damage resulting from any claims, demands or actions
arising out of this Agreement shall not exceed the maintenance fee paid to
Platinum for the SOFTWARE, net of dealer or distributor margins.
6. NO LIABILITY FOR CONSEQUENTIAL DAMAGES. In no event shall Platinum or its
suppliers be liable for any indirect, incidental, consequential, special or
exemplary damages whatsoever (including, without limitation, damages for loss of
business profits, business interruption, loss of business information, or other
pecuniary loss) arising out of the use or inability to use the SOFTWARE or the
performance or failure to perform maintenance services, even if Platinum has
been advised of the possibility of such damages. Because some states do not
allow the exclusion or limitation of liability for consequential or incidental
damages, the above limitation may not apply to you.
7. TERM. The registered user will be invoiced for annual maintenance for
subsequent periods beginning on the anniversary of the Maintenance Commencement
Date, unless the registered user notifies Platinum in writing of its desire to
not renew maintenance 60 days prior to the end of existing maintenance period.
If you acquired the software product in the United States, this Agreement is
governed by the laws of thc State of California.
Should you have any questions concerning this Agreement, or if you desire to
contact Platinum for any reason, please contact your local Platinum sales
office, or write Platinum Software Corporation Sales and Service, 195 Technology
Drive, Irvine, CA 92718.
PLATINUM SOFTWARE TELEPHONE SUPPORT NUMBER: (800) 285-7877
15
<PAGE> 39
EXHIBIT H-4
[LOGO]
PLATINUM
SOFTWARE CORPORATI0N
PLATINUM SUPPORT AND MAINTENANCE AGREEMENT
(PLATINUM(R) AND PLATINUM(R) FOR WINDOWS)
This document certifies that the registered user identified on the attached or
accompanying receipt is entitled to receive the following benefits during the
subscription term specified on the receipt.
1. MAINTENANCE PLAN (MP) BENEFITS. For MP subscribers, Platinum shall provide
the following to the registered user without additional charge: all updates for
the installed and registered Software Program(s) specified above (including
related documentation) commercially released by Platinum during the term of the
subscription (updates consist of new releases of a particular software version
which provide functional enhancements and error corrections); annual tax
updates; a subscription to the on-line Platinum Bulletin Board Service; a 10%
discount on registration for the annual Platinum user conference; a 50% discount
on all version and product upgrades to the Software Programs commercially
released by Platinum during the term of the subscription (version upgrades
consist of new releases with a higher Platinum version number such as from 1.0
to 2.0 and product upgrades are different products within the Platinum(R) line,
such as from Platinum(R) to Platinum(R) for Windows).
2. COMPREHENSIVE SUPPORT PLAN (CSP) BENEFITS. For CSP subscribers, Platinum
shall provide the following to the registered user without additional charge:
all benefits associated with the MP Plan above, plus unlimited telephone and
facsimile support. The hours of support operation are 5:00 AM to 6:00 PM,
Pacific Standard Time, during normal business hours (Monday through Friday),
excluding holidays. The registered user shall appoint up to two (2) individuals
within its organization to serve as the primary contacts between Platinum and
the registered user, and to receive support through the telephone support
center. Additional contacts may be purchased for a fee. Phone support will be
offered for the current version, plus one previous version (e.g., version 4 and
3).
3 . PREMIER SUPPORT PLAN (PSP) BENEFITS. For PSP subscribers, Platinum shall
provide the following to the registered user without additional charge: all
benefits associated with the CSP Plan above, plus the following: all version
upgrades to the Software Programs commercially released by Platinum during the
subscription term. Product upgrades must be purchased separately.
4. LIMITED WARRANTY. Platinum warrants that the support services will be
performed in a professional workmanlike manner. PLATINUM DISCLAIMS ALL OTHER
WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO THE SUPPORT SERVICES. THIS LIMITED WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS.
YOU MAY HAVE OTHERS, WHICH VARY FROM STATE TO STATE.
5. LIMITATION OF LIABILITY. Platinum's entire liability to you or any other
party for any loss or damage resulting from any claims, demands or actions
arising out of this Agreement shall not exceed the support fee paid to Platinum
for the Software, net of dealer or distributor margins.
6. NO LIABILITY FOR CONSEQUENTIAL DAMAGES. In no event shall Platinum or its
suppliers be liable for any indirect, incidental, consequential, special or
exemplary damages whatsoever (including, without limitation, damages for loss of
business profits, business interruption, loss of business information, or other
pecuniary loss) arising out of the use or inability to use the Software or the
performance or failure to perform support services, even if Platinum has been
advised of the possibility of such damages. Because some states do not allow the
exclusion or limitation of liability for consequential or incidental damages,
the above limitation may not apply to you.
7. TERM. The subscription term shall begin on the commencement date specified
above and shall expire annually on March 31. The registered user will be
invoiced for annual renewals unless Platinum receives written notification
canceling the subscription 60 days prior to the expiration date.
8. CONDITIONS. If a subscriber allows its support plan to expire and desires to
resume support, the subscriber shall be required to pay a fee equal to one half
of the annual fee for the maintenance plan that the subscriber is signing up
for. Program maintenance for
16
<PAGE> 40
previous versions may be discontinued with a 1-year advance notice. Maintenance
and support plans are nontransferable. If an end user cancels its subscription
anytime during a subscription period, no refund, pro-rated or otherwise, will be
given. This Agreement is for one plan, per registered user, for all registered
modules. If the use of a specific licensed and registered module is
discontinued, a letter must be sent on company letterhead (signed by an officer
of the company) indicating the company is no longer using the module. Serial
numbers for discontinued modules must be included in the letter. Add-on modules
will be pro-rated to the subscription expiration date for the current plan and
suggested retail price.
This Agreement is governed by the laws of the State of California in the United
States of America.
Should you have any questions concerning this Agreement, or if you desire to
contact Platinum for any reason, please contact your local Platinum sales
office, or write Platinum Software Corporation, Sales and Service, 195
Technology Drive, Irvine, CA 92718. The Platinum Software telephone technical
support number is (800) 333-5242.
17
<PAGE> 41
EXHIBIT I
FORM OF SOURCE CODE ESCROW AGREEMENT
<PAGE> 42
FLEXSAFE
TECHNOLOGY DEPOSIT AGREEMENT
Deposit Account Number 0618024-00001
Recitals
This FlexSAFE Technology Deposit Agreement including any Exhibits ("Agreement")
is effective this 1st day of August 1995, by and between Data Securities
International, Inc. ("DSI") a Delaware corporation, and FRx Software Corporation
("Depositor").
Notices to Depositor and DSI should be sent to the parties at the addresses
identified in the attached Exhibit A.
WHEREAS, Depositor has deposited or will deposit with DSI proprietary data to
provide for retention and controlled access under the conditions specified;
WHEREAS, Depositor desires the Agreement to be supplementary to the license
agreement between Depositor and FlexSAFE Licensee pursuant to 11 United States
Code Section 365(n).
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Deposit Account. Following the execution and delivery of the Agreement and
the payment of the first year escrow fee to DSI, DSI shall open a deposit
account ("Deposit Account") and a FlexSAFE enrollment system for Depositor. The
opening of the Deposit Account means that DSI shall establish an account ledger
in the name of Depositor, calendar renewal notices to be sent to Depositor as
provided in Section 4, and periodically request deposit materials ("Deposit")
from Depositor. Unless and until Depositor makes the Deposit with DSI, DSI shall
have no further obligation to Depositor except as defined by this section.
Depositor agrees to designate one individual to receive notices from DSI and to
act on behalf of Depositor in relation to the performance of its obligations as
set forth in the Agreement and to notify DSI immediately in the event of any
change from one designated contact to another as stipulated in Exhibit A.
2. Exhibit B. Depositor will submit material to DSI for retention and
administration in the Deposit Account together with a completed document
describing the Deposit called a "Description of Deposit Materials", hereinafter
referred to as Exhibit B. Each Exhibit B should be signed by Depositor prior to
submittal to DSI.
<PAGE> 43
3. Deposit Obligations of Confidentiality. DSI agrees to establish a locked
receptacle in which it shall place the Deposit and shall put the receptacle
under the administration of one or more of its officers, selected by DSI, whose
identity shall be available to Depositor at all times. DSI shall exercise a
professional level of care in carrying out the terms of the Agreement.
DSI acknowledges Depositor's assertion that the Deposit shall contain
proprietary data and that DSI has an obligation to preserve and protect the
confidentiality of the Deposit.
Except as provided for in the Agreement, DSI agrees that DSI shall not divulge,
disclose, make available to third parties, nor make any use whatsoever of the
Deposit.
4. Term of Agreement. The initial term of the Agreement is for a period of one
(1) year. Thereafter the Agreement shall automatically renew from year-to-year
unless the Depositor elects not to pay the renewal fee. In the event of the
nonpayment of fees owed to DSI, DSI shall provide written notice of the
delinquency to Depositor. The Depositor shall have the right to make the payment
to DSI to cure the default.
If the past-due payment is not received in full by DSI within one (1) month of
the date of such notice, then DSI shall have the right to terminate the
Agreement any time thereafter by sending written notice of termination to all
parties. DSI shall have no obligation to deliver the Deposit or to take any
other action under the Agreement so long as any payment which is due to DSI
remains unpaid. Upon termination, DSI, at its sole discretion, will either
destroy the Deposit or return the Deposit to Depositor, provided that DSI will
return the Deposit to the Depositor at Depositor's request. IN NO EVENT SHALL
DSI HAVE ANY LIEN ON OR INTEREST IN THE DEPOSIT.
5. FlexSAFE Enrollment System. After DSI's acceptance of the Deposit, Depositor
may enroll one or more licensees as "FlexSAFE Licensee" to the Deposit Account.
Depositor will execute and submit to DSI a "FlexSAFE Licensee Enrollment"
document ("Exhibit T") , listing each licensee to be enrolled as a FlexSAFE
Licensee under the Agreement. Upon DSI's acceptance of an Exhibit T and payment
of the enrollment fee, client will become a FlexSAFE Licensee ("FlexSAFE
Licensee").
6. Other Third Parties. DSI shall have no obligation to any other third party
except FlexSAFE Licensee accepted by DSI. DSI and Depositor shall have the right
to modify or cancel the Agreement without the consent of any third party.
7. FlexSAFE Licensee Account. Following the execution of Exhibit T by Depositor
and DSI, DSI will open a FlexSAFE Licensee Account for FlexSAFE Licensee. The
opening of the FlexSAFE Licensee Account means that DSI shall establish a unique
enrollment number ("FlexSAFE Licensee Number") in the name of FlexSAFE Licensee.
DSI shall issue to FlexSAFE Licensee an enrollment letter, a copy of the
Agreement and an account history.
Page 2
<PAGE> 44
8. Notices and Communications. Notices and invoices (if appropriate) to FlexSAFE
Licensee should be sent to the party at the address identified in Exhibit T.
If the designated contact identified in Exhibit T is not correct, FlexSAFE
Licensee or Depositor will designate another individual ("Designated Contact")
to receive notices from DSI.
9. Term and Renewal of FlexSAFE Licensee Account. Upon receipt by DSI of
Depositor's executed Exhibit T, the FlexSAFE Licensee Account will have an
initial term of one (1) year, unless the Deposit Account terminates earlier,
causing the FlexSAFE Licensee Account to terminate.
After the initial term, the FlexSAFE Licensee Account may be adjusted to a term
coincident with the current term of the Agreement. FlexSAFE Licensee or
Depositor has the right to pay enrollment renewal fees. Only Depositor may pay
Deposit Account fee and other fees related to Deposit Account. In the event
FlexSAFE Licensee pays the enrollment renewal fees and Depositor is of the
opinion that any necessary condition for renewal is not met, Depositor may so
notify DSI and FlexSAFE Licensee in writing. DSI shall then terminate that
FlexSAFE Licensee.
10. Account History. DSI agrees to keep records of the activities undertaken,
and materials prepared pursuant to the Agreement. DSI may issue an account
history to FlexSAFE Licensee profiling the Deposit Account. Such account history
will identify Depositor, FlexSAFE Licensee, current Designated Contact, selected
special services , and Exhibit B history which includes Deposit Material
acceptance and destruction or return dates. Depositor will notify DSI if the
account history is not to be provided to FlexSAFE Licensee.
11. Release of Deposit Copy to FlexSAFE Licensee Upon Depositor Instruction.
Upon receipt by DSI of a valid written instruction directly from Depositor,
Depositor's trustee in bankruptcy, or a court of competent jurisdiction, and
payment to DSI of the deposit copying and delivery fees, DSI will prepare and
release a copy of the Deposit for the FlexSAFE Licensee identified in the
instruction.
12. Filing for Release of Deposit by FlexSAFE Licensee. Upon notice to DSI by
FlexSAFE Licensee of the occurrence of a filing condition as defined in Section
14, DSI shall notify Depositor by certified mail or commercial express mail
service with a copy of the notice from FlexSAFE Licensee. If Depositor provides
DSI with contrary instruction within sixty (60) days, DSI shall not deliver a
copy of the Deposit to FlexSAFE Licensee. "Contrary Instruction" is a notice to
DSI stating that a Contrary Instruction is in effect. DSI shall send a copy of
the notice by certified mail or commercial express mail service to FlexSAFE
Licensee. DSI shall notify both Depositor and FlexSAFE Licensee that there is a
dispute to be resolved.
Page 3
<PAGE> 45
13. Release of Deposit Copy Upon No Contrary Instruction. Depositor and DSI
agree that, pursuant to the terms and conditions of the Agreement, and provided
that Depositor does not provide a Contrary Instruction in accordance with
Section 12, the Deposit shall be held for delivery by DSI to the FlexSAFE
Licensee who provides DSI with all of the following:
a. Copy of a current, valid license agreement between Depositor and
FlexSAFE Licensee;
b. Written demand that a copy of the Deposit be released and delivered to
FlexSAFE Licensee;
C. Written notice that the copy of the Deposit being released to,
FlexSAFE Licensee be used only as permitted under the license
agreement;
d. Specific delivery instructions along with deposit copying and delivery
fees; and
e. Written notice that the release of the Deposit copy is pursuant to,
11 United States Code Section 365(n).
14. Filing Conditions of Deposit to FlexSAFE Licensee. Filing conditions are:
Existence of any one or more of the following circumstances,
uncorrected for more than thirty (30) days: entry of an order for
relief under Title 11 of the United States Code; the making by
Depositor of a general assignment for the benefit of creditors;
the appointment of a general receiver or trustee in bankruptcy of
Depositor's business or property; or action by Depositor under
any state insolvency or similar law for the purpose of its
bankruptcy, reorganization, or liquidation.
15. Indemnification. DSI shall be responsible to perform its obligations under
this Agreement and to act in a reasonable and prudent manner with regard to this
escrow arrangement. Provided DSI has acted in the manner stated in the preceding
sentence, Depositor agrees to indemnify, defend and hold harmless DSI from any
claims, actions, damages, costs, attorney's fees and other liabilities incurred
by DSI relating in any way to this escrow arrangement.
16. General. DSI may act in reliance upon any instruction, instrument, or
signature believed to be genuine and, unless Depositor has informed DSI in
writing that only certain employees of Depositor are authorized to provide
notices or instructions hereunder, DSI may assume that any employee giving any
written notice, request, advice or instruction in connection with or relating to
the Agreement has apparent authority and has been duly authorized to do so. DSI
is not responsible for failure to fulfill its obligations under the Agreement
due to causes beyond DSI's control.
Page 4
<PAGE> 46
The Agreement is to be governed by and construed in accordance with the laws of
the State of California.
The Agreement constitutes the entire agreement between the parties concerning
the subject matter hereof, and supersedes all previous communications,
representations, understandings, and agreements, either oral or written, between
the parties.
Any term or provision of the Agreement may be amended, and the observance of any
term of the Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only by a writing signed by
the party to be bound thereby.
No party may assign or delegate the Agreement or any of its rights, duties, or
obligations hereunder to any person or entity without the prior written approval
of the other parties hereto, which consent shall not be unreasonably withheld,
except that a party may assign and delegate the Agreement in its entirety
incidental to a transfer of all or substantially all of such party's business.
Any assignment which is made in violation of the Agreement shall be void.
If any provision of the Agreement is held by any court to be invalid or
unenforceable, that provision will be severed from the Agreement and any
remaining provisions will continue in full force.
17. Fees. Fees are due upon receipt of signed contracts, receipt of Deposit
materials, or when service is requested, whichever is earliest. Renewal fees
will be due in full upon the receipt of invoice unless otherwise specified by
the invoice. If invoiced fees are not paid within ninety (90) days of the date
of invoice, DSI may terminate the Agreement. If the payment is not timely
received by DSI within thirty (30) days of the date of invoice, which shall not
be earlier than the date of mailing of the invoice, DSI shall have the right to
accrue and collect interest at the rate of one and one-half percent per month
(18% per annum) from the date of the invoice for all late payments.
All service fees and renewal fees will be those specified in DSI's Fee and
Services Schedule in effect at the time of renewal or request for service,
except as otherwise agreed. For any increase in DSI's standard fees, DSI shall
notify Depositor at least ninety (90) days prior to the renewal of the
Agreement. For any service not listed on the Fee and Services Schedule, DSI
shall provide a quote prior to rendering such service.
Data Securities
FRx SOFTWARE CORPORATION International, Inc.
- ---------------------------------- DSI
Depositor
By: /s/ MICHAEL L. ROHAN By: /s/ CHRISTIE WOODWARD
------------------------------- --------------------------------
Name: Michael L. Rohan Name: Christie Woodward
----------------------------- ------------------------------
Title: President Title: Contract Administrator
---------------------------- -----------------------------
Date: July 27, 1995 Date: August 1, 1995
----------------------------- ------------------------------
Page 5
<PAGE> 47
EXHIBIT A
FLEXSAFE
TECHNOLOGY DEPOSIT AGREEMENT
Deposit Account Number 0618024-00001
Designated contact and locations
Notices to Depositor regarding
Agreement terms and conditions Invoices should
should be addressed to: be addressed to:
Depositor: FRx Software Corporation
------------------------ ------------------------------
Address: 4949 So. Syracuse St
------------------------ ------------------------------
Suite 620
------------------------ ------------------------------
Denver, CO 80237
------------------------ ------------------------------
------------------------ ------------------------------
Designated
contact: Michael L. Rohan
------------------------ ------------------------------
Telephone: (303) 741-0900
------------------------ ------------------------------
Facsimile: (303) 741-3335
------------------------ ------------------------------
All requests from Depositor to change the designated contact must be given in
writing and signed by the designated contact or an authorized representative of
Depositor.
Contracts, Deposits and Invoice inquiries and
official notifications to DSI remittance of fees to DSI
should be addressed to: should be addressed to:
DSI DSI
Attn: Contract Administration Attn: Accounts Receivable
Suite 200 Suite 1450
9555 Chesapeake Drive 425 California Street
San Diego, CA 92123 San Francisco, CA 94104
Telephone: (619) 694-1900 (415) 398-7900
Facsimile: (619) 694-1919 (415) 398-7914
Date: July 27, 1995
--------------
Page 6
<PAGE> 48
EXHIBIT T
FLEXSAFE LICENSEE ENROLLMENT
Deposit Account Number ___________________________
Depositor, pursuant to the Technology Deposit Agreement ("Agreement"), hereby
enrolls the following as FlexSAFE Licensee:
Notices and communication, If appropriate, invoices to
including delinquencies to FlexSAFE Licensee should be
FlexSAFE Licensee should addressed to:
be addressed to:
Company Name:_____________________ ______________________________
Address: _____________________ ______________________________
_____________________ ______________________________
_____________________ ______________________________
_____________________ ______________________________
Designated Invoice
Contact:__________________________ Contact:______________________
Telephone:________________________ ______________________________
Facsimile:________________________ ______________________________
__________________________________ Data Securities
Depositor International, Inc.
By:_______________________________ By:___________________________
Name:_____________________________ Name:_________________________
Title:____________________________ Title:________________________
Date:_____________________________ Date:_________________________
<PAGE> 49
EXHIBIT J
SOFTWARE ACCEPTANCE CRITERIA
THE FOLLOWING SOFTWARE ACCEPTANCE CRITERIA WILL BE USED BY PSC IN COMPLETING ITS
ACCEPTANCE OF SOFTWARE DESCRIBED IN SECTION 4.2:
BETA RELEASE
- All currently documented features are fully functional
- Audit and acceptance of FRx's test plan by PSC to insure sufficient
coverage and quality
- Installation and conversion utility testing has been completed on all
platforms identified for beta sites.
- All known Severity 1 Errors are fixed and closed.
- All known Severity 2 Errors are fixed or documented for situations
that unlikely to occur in the test sites.
- No Severity 1 Errors in the week prior to release.
- A minimum of l week testing on latest drop before sending to beta
sites.
- Functional readiness review with members of FRx Software QA,
Development and Platinum Acceptance team. Any functions that don't get
a passing grade must be documented.
GENERAL AVAILABILITY (GA) RELEASE
- All documented features are fully functional.
- Review adequacy and completeness of GA release notes.
- Completion of beta test cycle with 90% of sites signing off evaluation
forms indicating accepting the product as stable, usable and meeting
their functional requirements. For this purpose, functional
requirements applies to functions of the product as defined in product
documentation and excludes issues relating to other PSC modules.
- Installation and conversion utility testing has been completed on all
supported platforms and Platinum products.
- Audit test criteria and results to verify the following:
- The following client and server platforms are supported:
- Clients: Win 3.1, Win 3.11, Win 95, Win NT Workstation
3.51
- File Servers: Novell 3.12 & 4.1, Windows NT 3.51
- All Severity 1 Errors are fixed and closed
- All Severity 2 Errors are fixed and closed
- The Platinum Products described in Exhibit A are supported:
- A minimum of 2 weeks testing on last drop before declaring it GA
- Functional readiness review with members of FRx Software QA,
Development and Platinum Acceptance team. Any functions that have a
Pass with Qualifications grade must be documented.
- Any item in this list which is not met must be fully documented.
<PAGE> 50
EXHIBIT K
FRx PREMIUM SUPPORT PLANS
All Premium FRx Support Plans include software maintenance and enhancements at
no additional charge. In addition to the other performance standards included in
the PSC Support Plans in Exhibit H, FRx will commit to the guaranteed response
times to inquiries as detailed below. Note that response to an inquiry does not
necessarily imply or include resolution of the related issue, which will be
handled on a reasonable efforts basis and consistent with the Software Problem
Resolution standards prescribed in Exhibit G. In addition, Premium Support Plan
subscribers receive a twenty (20%) discount on FRx training classes.
<TABLE>
<CAPTION>
SUPPORT PLAN LIST PRICE*
------------------------
SURCHARGE OVER EXISTING COST OF
SUPPORT PLAN NEW PLAN
------------ --------
<S> <C> <C>
PREMIUM SUPPORT LEVEL A
Guaranteed response to inquiries within FOUR (4) hours 10% 25%
and progress updates every 48 hours.
PREMIUM SUPPORT LEVEL B
Guaranteed response to inquiries within TWO (2) hours 15% 30%
and progress updates every 24 hours.
PREMIUM SUPPORT LEVEL C
Guaranteed response to inquiries within ONE (1) hour 20% 35%
and progress updates every 24 hours.
</TABLE>
* Percentages shown are to be applied to FRx product list price (for Stand-Alone
Software) or to the list price of Bundled Software after application of the
allocation formulas provided in Section 6.4.
<PAGE> 51
EXHIBIT L
STOCK PLEDGE AGREEMENT
<PAGE> 52
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement ("Pledge Agreement") is made and dated as
of this ____ day of May, 1996 by and between Platinum Software Corporation
("Platinum") and Frx Software Corporation (the "Company").
RECITALS
A. Concurrently with the execution and delivery of this Pledge
Agreement, Platinum and the Company are executing a Software Distribution
License Agreement ("License Agreement").
B. It is a requirement of the License Agreement that Platinum execute
and deliver this Pledge Agreement to secure payment under section 6.1 (a)-(d) of
the License Agreement.
AGREEMENT
1. Grant of Security Interest. In order to secure payment by Platinum
of its payment obligations under Section 6.1 (a)-(d) of the License Agreement
Platinum hereby grants the Company a security interest in, and assigns,
transfers to and pledges the Company the following securities and other
property:
(i) 199,000 shares of Company Class B common stock ("Common Stock");
(ii) any and all new, additional or different securities or other
property subsequently distributed with respect to the shares identified in
subparagraph (i).
All securities, property and money so assigned, transferred to and
pledged with the Company shall be herein referred to as the "Collateral" and
shall be accompanied by one or more stock power assignments properly endorsed by
Platinum.
2. Indebtedness Secured. The indebtedness secured by this Pledge
Agreement shall consist of the obligation of Platinum to make payments under
Section 6.1 (a)-(d) of the License Agreement (the "Indebtedness").
3. Warranties. Platinum warrants that the Platinum is the owner of the
Collateral and has the right to pledge the Collateral and that the Collateral,
is free from all liens, adverse claims and other security interests (other than
those created hereby).
<PAGE> 53
4. Rights and Powers. So long as there exists no event of default
under Section 8 of this Agreement, the undersigned may exercise all stockholder
voting rights, if applicable, and be entitled to receive any and all regular
cash dividends paid on the Collateral. Accordingly, until such time as an event
of default occurs under this Agreement, all proxy statements and other
stockholder materials pertaining to the Collateral shall be delivered to the
undersigned at the address indicated below.
5. Duty to Deliver. Any new, additional or different securities that
may now or hereafter become distributable with respect to the Collateral by
reason of (i) any stock dividend, stock split or reclassification of the Common
Stock of the Company, or (ii) any merger, consolidation or other reorganization
affecting the capital structure of the Company, shall, upon receipt by Platinum,
be promptly delivered to and deposited with the Company as part of the
Collateral hereunder. Such securities shall be accompanied by one or more
properly endorsed stock power assignments.
6. Care of Collateral. The Company shall exercise reasonable care in
the custody and preservation of the Collateral. The Company shall not be
obligated to take any action with respect to the Collateral requested by
Platinum unless the request is made in writing and the Company determines that
the requested action will not unreasonably jeopardize the value of the
Collateral as security for the Indebtedness.
The Company may at any time release and deliver all or part of the
Collateral to Platinum, and the receipt hereof by Platinum shall constitute a
complete and full acquittance for the Collateral so released and delivered. The
Company shall accordingly be discharged from any further liability or
responsibility for the Collateral, and the released Collateral shall no longer
be subject to the provisions of this Agreement.
7. Release of Collateral. Provided (i) there does not otherwise exist
any event of default under Section 8 and the pledged shares of Class B Common
Stock together with any additional Collateral that may hereafter be pledged and
deposited hereunder, shall be released from pledge and returned to Platinum in
accordance with he following provisions.
Upon payment or prepayment of the Indebtedness, the shares of the
Class B Common Stock held as Collateral hereunder shall be released to the
undersigned within five (5) days after such payment or prepayment.
8. Events of Default The occurrence of one or more of the following
events shall constitute an event of default under this Agreement:
(a) the failure of the undersigned to pay the Indebtedness when due
under the License Agreement; or
2
<PAGE> 54
(b) the failure of the undersigned to perform a material obligation
imposed upon the undersigned by reason of this Pledge Agreement and the failure
to cure such default within sixty (60) days of written notice of the Company to
the undersigned.
Upon the occurrence of any such event of default, the Company may
exercise any or all of the rights and remedies granted to a secured party under
the provisions of the Colorado Uniform Commercial Code (as now or hereafter in
effect).
9. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado and shall be binding upon
the executors, administrators, heirs and assigns of the undersigned.
10. Severability. If any provision of this Agreement is held to be
invalid under applicable law, then such provision shall be ineffective only to
the extent of such invalidity, and neither the remainder of such provisions nor
any other provisions of this Agreement shall be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PLATINUM SOFTWARE CORPORATION
195 Technology Drive
Irvine, CA 92718
By:_________________________________
Its:________________________________
Dated:______________________________
Agreed to and Accepted by:
FRX SOFTWARE CORPORATION
By:_________________________________
Its:________________________________
Dated:______________________________
3
<PAGE> 55
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement ("Pledge Agreement") is made and dated as
of this ____ day of May, 1996 by and between Platinum Software Corporation
("Platinum") and Frx Software Corporation (the "Company").
RECITALS
A. Concurrently with the execution and delivery of this Pledge
Agreement, Platinum and the Company are executing a Software Distribution
License Agreement ("License Agreement").
B. It is a requirement of the License Agreement that Platinum execute
and deliver this Pledge Agreement to secure payment under section 6.1 (a)-(d)
of the License Agreement.
AGREEMENT
1. Grant of Security Interest. In order to secure payment by Platinum
of its payment obligations under Section 6.1 (a)-(d) of the License Agreement
Platinum hereby grants the Company a security interest in, and assigns,
transfers to and pledges the Company the following securities and other
property:
(i) 199,000 shares of Company Class B common stock ("Common Stock");
(ii) any and all new, additional or different securities or other
property subsequently distributed with respect to the shares identified in
subparagraph (i).
All securities, property and money so assigned, transferred to and
pledged with the Company shall be herein referred to as the "Collateral" and
shall be accompanied by one or more stock power assignments properly endorsed by
Platinum.
2. Indebtedness Secured. The indebtedness secured by this Pledge
Agreement shall consist of the obligation of Platinum to make payments under
Section 6.1 (a)-(d) of the License Agreement (the "Indebtedness").
3. Warranties. Platinum warrants that the Platinum is the owner of the
Collateral and has the right to pledge the Collateral and that the Collateral is
free from all liens, adverse claims and other security interests (other than
those created hereby).
<PAGE> 56
4. Rights and Powers. So long as there exists no event of default
under Section 8 of this Agreement, the undersigned may exercise all stockholder
voting rights, applicable, and be entitled to receive any and all regular cash
dividends paid on the Collateral. Accordingly, until such time as an event of
default occurs under this Agreement, all proxy statements and other stockholder
materials pertaining to the Collateral shall be delivered to the undersigned at
the address indicated below.
5. Duty to Deliver. Any new, additional or different securities that
may now or hereafter become distributable with respect to the Collateral by
reason of (i) any stock dividend, stock split or reclassification of the Common
Stock of the Company, or (ii) any merger, consolidation or other reorganization
affecting the capital structure of the Company, shall, upon receipt by Platinum,
be promptly delivered to and deposited with the Company as part of the
Collateral hereunder. Such securities shall be accompanied by one or more
properly endorsed stock power assignments.
6. Care of Collateral. The Company shall exercise reasonable care in
the custody and preservation of the Collateral. The Company shall not be
obligated to take any action with respect to the Collateral requested by
Platinum unless the request is made in writing and the Company determines that
the requested action will not unreasonably jeopardize the value of the
Collateral as security for the Indebtedness.
The Company may at any time release and deliver all or part of the
Collateral to Platinum, and the receipt hereof by Platinum shall constitute a
complete and full acquittance for the Collateral so released and delivered. The
Company shall accordingly be discharged from any further liability or
responsibility for the Collateral, and the released Collateral shall no longer
be subject to the provisions of this Agreement.
7. Release of Collateral. Provided (i) there does not otherwise exist
any event of default under Section 8 and the pledged shares of Class B Common
Stock together with any additional Collateral that may hereafter be pledged and
deposited hereunder, shall be released from pledge and returned to Platinum in
accordance with the following provisions.
Upon payment or prepayment of the Indebtedness, the shares of the
Class B Common Stock held as Collateral hereunder shall be released to the
undersigned within five (5) days after such payment or prepayment.
8. Events of Default. The occurrence of one or more of the following
events shall constitute an event of default under this Agreement:
(a) the failure of the undersigned to pay the Indebtedness when due
under the License Agreement; or
<PAGE> 57
(b) the failure of the undersigned to perform a material obligation
imposed upon the undersigned by reason of this Pledge Agreement and the failure
to cure such default within sixty (60) days of written notice of the Company to
the undersigned.
Upon the occurrence of any such event of default, the Company may
exercise any or all of the rights and remedies granted to a secured party under
the provisions of the Colorado Uniform Commercial Code (as now or hereafter in
effect).
9. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado and shall be binding upon
the executors, administrators, heirs and assigns of the undersigned.
10. Severability. If any provision of this Agreement is held to be
invalid under applicable law, then such provision shall be ineffective only to
the extent of such invalidity, and neither the remainder of such provisions nor
any other provisions of this Agreement shall be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PLATINUM SOFTWARE CORPORATION
195 Technology Drive
Irvine, CA 92718
By: /s/ [SIG]
--------------------------------
Its: CFO
-------------------------------
Dated: 5-7-96
-----------------------------
Agreed to and Accepted by:
FRX SOFTWARE CORPORATION
By: /s/ [SIG]
--------------------------------
Its: President
-------------------------------
Dated: 5-9-96
-----------------------------
3
<PAGE> 58
FRx SOFTWARE CORPORATION
AND
PLATINUM SOFTWARE CORPORATION
SOFTWARE DISTRIBUTION LICENSE AGREEMENT
SECOND ADDENDUM
This Second Addendum dated 12/12/96 hereby amends and supplements the Software
Distribution License Agreement between FRx Software Corporation ("FRx") and
Platinum Software Corporation ("PSC") dated May 9, 1996 and amended on June 24,
1996 (the "Agreement").
1. PSC hereby accepts, in accordance with Section 4.2 of the Agreement, as of
the date of this Second Addendum ("Acceptance Date") the Phase III
Deliverables (also known as General Availability Deliverables as detailed
in Exhibit C) with respect to all PSC Products defined on Exhibit A.
2. The terms and conditions of the Agreement are hereby modified and amended
as follows:
SECTION 2.1(b), second sentence, is hereby replaced as follows: "FRx shall use
all reasonable efforts to provide to PSC at no additional cost an externalized
text file for FRx Version 5.0 to facilitate such translations (single-byte
character sets) no later than three months after the Acceptance Date. Support
for double-byte character sets will be provided to PSC when developed by FRx."
Section 3.2(b)(1) is hereby modified by changing the term "within 3O days of
acceptance of the Software" to "within 30 days following the Acceptance Date".
SECTION 6.1 is hereby modified by changing the term "within 180 days of
acceptance of the Software" to "within 180 days following the Acceptance Date".
SECTION 6.1(c) is modified in its entirety as follows:
6.1(c)(1) "On the Acceptance Date as defined herein, PSC shall pay to FRx $ [*]
which reflects the estimated amount (less the $ [*] previously paid to FRx under
Section 6.1 (a) and (b)) that is recorded as of the Acceptance Date by PSC for
prepaid support and maintenance ("Prepaid Support") paid by End Users in
connection with the versions of FRx for Windows and FRx (DOS) distributed by PSC
prior to the Acceptance Date.
6.1(c)(2) Within thirty (30) days after the Acceptance Date, PSC shall provide a
listing of all users enrolled in a PSC Support Plan for the FRx products (FRx
for Windows and FRx(DOS)) as of the Acceptance Date and a computation of the
Prepaid Support amount from such users at the Acceptance Date. Should the actual
Prepaid Support amount in the aggregate be less than [*] the difference shall be
treated as additional Prepaid License Fee and recovered by PSC
1
<PAGE> 59
as provided in Section 6.1(d). Should the actual Prepaid Support amount in the
aggregate be greater than [*] the difference shall be payable to FRx at the same
time the Prepaid Support listing is provided to FRx.
SECTION 6.1(d) are hereby modified by changing the term "within 180 days
following acceptance of Software" to "within 180 days following the Acceptance
Date".
SECTION 9.1(a)(1) is modified by deleting the first sentence and replacing it
with the following: "Upon acceptance by PSC of the Software under Section 4.2
and receipt of payment by FRx under Section 6.1 (c)(1), FRx shall assume direct
support responsibility for product technical support services to End Users
enrolled in a Support Plan in accordance with the performance standards
prescribed in the Support Plans (see Exhibit H)."
SECTION 9.1(a)(1)(1) is modified to add the words "received and" after the
phrase "have not yet" in the first sentence.
SECTION 9.1(a)(5)(1), third sentence, is modified to read "Such survey shall be
performed no more frequently than every eighteen (18) months after the
Acceptance Date and shall be jointly written by PSC and FRx.
SECTION 9.1(b) is modified in full to read as follows.
9.1(b) SOFTWARE MAINTENANCE. Subject to timely payment to FRx of the
license fees provided in Article 6, FRx will provide routine software
maintenance releases at no cost to PSC for distribution to End Users or to PSC
Resellers. Such maintenance releases, when and if released, are intended to
correct defects that render a currently supported version of the Software
incapable of performing substantially in accordance with the Documentation. The
maintenance standards for the FRx products are as follows:
(i) FRX FOR WINDOWS. All such defects will be resolved in
accordance with the time frames identified in Exhibit G after they are reported
to and are reproducible by FRx, provided that the End User reporting such
defects is using the most recent version of the Software. FRx agrees to provide
to End Users of the Software the maintenance and support services that PSC
generally provides to End Users of PSC Products as described in Exhibits H-3 and
H-4.
(ii) FRX (DOS). FRx shall use commercially reasonable efforts
to correct Severity I Errors, as defined in Exhibit G, within ninety (90) days
of identification and reproduction of such defect by FRx, and to use
commercially reasonable efforts to correct Severity II Errors, without a
specific time commitment. Such Errors shall be limited to those reported after
the Acceptance Date by current users of FRx (DOS) that are enrolled in a support
and/or maintenance plan for that product. Should FRx be unable to correct such
Severity I and II Errors using such commercially reasonable efforts, the limit
of its liability shall be to provide the affected End Users with an upgrade to
an applicable FRx for Windows version at no cost to PSC or the End User.
FRx makes no commitment regarding correction of Severity III and IV Errors
for FRx (DOS) versions.
2
<PAGE> 60
Section 9.1(c)(1) is modified in its entirety as follows: "Subject to payment
by PSC of its Initial Payment Obligation under Section 6.1(c)(1), PSC is
authorized to distribute Software at no additional cost to all PSC End Users
enrolled in a Support Plan for the FRx for Windows products as of the Acceptance
Date. PSC is not authorized to distribute FRx for Windows versions of the
Software to End Users enrolled in a Support Plan for the FRx(DOS) products
except as provided under the terms of Exhibit B. PSC shall be responsible for
all packaging and distribution costs.
SECTION 10.1(a)(1)(1) is modified to read as follows: Thirty days following the
Acceptance Date, PSC shall cease marketing, licensing, conveying or otherwise
delivering PSC-FRx or executable versions of the PSC-FRx code. During the thirty
day period following the Acceptance Date, PSC may continue to license and ship
the PSC-FRx code to End Users and PSC Resellers until it has completed
duplication, packaging and kitting of the FRx Software products that were
accepted. PSC shall pay License Fees to FRx on all licenses of PSC-FRx during
the thirty day period following the Acceptance Date in accordance with Section 6
of the Agreement. When the End Users who licensed PSC-FRx during the thirty day
period following the Acceptance Date upgrade to the FRx Software, PSC shall not
be obligated to pay an additional license or upgrade fee.
EXHIBITS A AND B ARE modified in their entirety to read as attached.
Except as modified by this Addendum, the terms and conditions of the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Second Addendum as of
the date last written below.
FRx SOFTWARE CORPORATION PLATINUM SOFTWARE CORPORATION
By: /s/ ROBERT C. ROHAN By: /s/ TIMOTHY J. MCMULLEN
-------------------------- -----------------------------------
Name: Robert C. Rohan Name: Timothy J. McMullen
------------------------ ----------------------------------
Title: Vice President Title: CTO and V.P. Product Marketing
----------------------- ---------------------------------
Date: December 12, 1996 Date: Dec. 11, 1996
------------------------ ----------------------------------
3
<PAGE> 61
EXHIBIT A
SOFTWARE
The following FRx software products are in this Agreement. Software to be
provided in executable form (not source code) for production and distribution by
PSC:
FRx FOR WINDOWS STANDARD EDITION (VERSION 4.70) - to be bundled with
every copy of Platinum for Windows Standard Ledger (unless bundled
with FRx Advanced Edition). The features of this Standard Version are
detailed below. This product is not available for distribution on a
Stand-Alone basis, but may be distributed by PSC as an upgrade to End
Users who previously licensed the FRx Standard Edition (DOS) product.
FRx FOR WINDOWS ADVANCED EDITION (VERSION 4.70) - to be bundled with
every COPY of Platinum for Windows Premier Ledger and Platinum SQL
products. Also available on a Stand-Alone basis to all existing
Platinum users.
FRx (DOS) ADVANCED EDITION - to be licensed on Stand-Alone or bundled
basis to users of Platinum Standard and Premier (DOS) Ledgers.
FRx ENTERPRISE EDITION-NEW product to be released subsequent to date
of Agreement which may include the following features: FRx Application
Server; Report Manager; OLAP Processing capabilities; FASB 52; and
Automated Electronic Report Distribution. Features and pricing to be
determined upon product release.
ADDITIONAL FRx PRODUCTS - Add-on or ancillary products that are sold
separately on a Stand-Alone basis. This includes the FRx, remote
drill-down viewer and any future products that are packaged and sold
separately from current FRx for Windows products. Features and pricing
to be determined upon product release.
The FRx Enterprise Edition and Additional FRx Products listed above
are not developed as of the date of this Agreement and inclusion under
this Agreement does not represent an obligation of FRx to develop any
such products. PSC shall not be entitled to any recourse against FRx
or refunds of amounts paid to FRx in the event such products are not
developed. Availability of these products, if developed, is subject to
written agreement between FRx and PSC of the appropriate license fees
for each such product.
4
<PAGE> 62
EXHIBIT A
SOFTWARE
(CONT.)
USER AUTHORIZATION:
BUNDLED AND STAND-ALONE DISTRIBUTION
User Authorization equal to Platinum System Manager user
authorization. (Should the number of authorized General Ledger users
for a single server exceed fifty (50) users, PSC and FRx agree to
negotiate in good faith to determine an equitable revenue allocation
to FRx on a case-by-case basis.)
FEATURES OF FRx STANDARD EDITION:
The FRx Standard Edition shall have the same level of performance and
functionality as FRx Advanced Edition 4.70, including FRx Drill Down viewer,
subject to the following limitations:
Only one reporting tree may be used with two roll-up levels
No multicompany consolidation capability
Can export to worksheets (i.e., Excel, Lotus 1-2-3) but cannot import data from
worksheets into FRx
Limited to one general ledger link
No row linking capabilities
No FRx independent security
PSC Products
- Platinum DOS Ledger 4.la
- Platinum DOS Ledger 2.x; 3.x (to be determined)
- Platinum Premier Ledger 4.la
- Platinum for Windows Premier Ledger 4.3a, 4.4, 4.5
- Platinum for Windows Standard Ledger 4.3a, 4.4, 4.5
- Platinum SQL NT 3.1 General Ledger
- Platinum SQL NT 3.2a and 3.2b General Ledger
- Platinum SQL NT 3.3 General Ledger
5
<PAGE> 63
EXHIBIT B
LICENSE FEES
(SECOND ADDENDUM)
<TABLE>
<CAPTION>
TIER I* TIER II**
------- ---------
ROYALTY MINIMUM ROYALTY MINIMUM
FRx PRODUCTS RATE ROYALTY RATE ROYALTY
------------ ---- ------- ---- -------
<S> <C> <C> <C> <C>
FRx FOR WINDOWS:
FRx Standard Edition*** [*] [*] [*] [*]
FRx Advanced Edition:
with Standard Ledger (PFW and DOS) [*] [*] [*] [*]
with Premier Ledger (PFW and DOS) [*] [*] [*] [*]
with Platinum SQL [*] [*] [*] [*]
Upgrade to FRx Advanced
from FRx Advanced-DOS**** [*] [*] [*] [*]
Upgrade from FRx Advanced for PFW
Standard Ledger to Premier Ledger # [*] [*] [*] [*]
Upgrade from FRx for Premier
Ledger to FRx for Platinum SQL # [*] [*] [*] [*]
FRx Enterprise Edition [*] [*] [*] [*]
FRx Remote DrillDown Viewer (per user) [*] [*] [*] [*]
All additional FRx products [*] [*] [*] [*]
FRx (DOS):
with Platinum DOS Standard Ledgers [*] [*] [*]
with Platinum Premier DOS Ledgers [*] [*] [*]
</TABLE>
NOTES:
* Prior To Attainment of Minimum Royalty Level defined in Section 1.8.
** Subsequent To Attainment of Minimum Royalty Level defined in Section
1.8.
*** Includes upgrades from FRx Standard Edition (DOS). License fee waived
if upgrading End User purchases Support and Maintenance Plan for
Software.
**** License fee waived if upgrading End User purchases Support and
Maintenance Plan for Software.
# End User surrenders existing interface and re-registers upgraded
interface.
TBD: "To be determined"
6
<PAGE> 64
EXHIBIT B
LICENSE FEES
(CONT.)
Royalty Rate is to be applied to PSC Revenue (Section 1.6) using the
following Allocation Formulas detailed in Section 6.4 for Bundled Products:
FRx Standard Edition bundled with Platinum for Windows [*]
FRx Advanced Edition bundled with Standard and Premier Ledger [*]
FRx Advanced Edition bundled with SQL ledgers [*]
7
<PAGE> 65
June 24, 1996
Mr. Michael L. Rohan, President
FRx Software Corporation
4449 So. Syracuse Street, Suite 620
Denver, CO 80237
Re: Platinum Software Corporation; Modifications to
Software Distribution Agreement
Dear Mike:
Platinum Software Corporation ("Platinum") and FRx Software Corporation ("FRx")
recently entered into a Software Distribution License Agreement dated as of May
9, 1996 ("License Agreement") regarding the integration of the FRx product with
Platinum's financial accounting software. I am writing to notify you that
Platinum accepts the Phase I deliverables with respect to the PSC products as
specified on Exhibit C to the License Agreement and considers Phase I to be
satisfied, subject to your agreement with the following, terms:
1. PSC and FRx agree to amend Exhibit C to the License Agreement so that under
Phase II an additional deliverable will include integration of the FRx
standard edition product with Platinum DOS Standard General Ledger, version
4.la and Platinum for Windows Standard General Ledger, versions 4.3a and
4.4a. FRx agrees to allow additional beta sites to participate in the
second beta drop, which is scheduled to be approximately two weeks after
Phase I shipping. The additional beta sites will include customers that
were previously committed by Platinum prior to FRx notifying Platinum of
beta cutoff, which includes four Platinum SQL sites and four Platinum for
Windows sites. Additional beta sites may be added upon request by Platinum
and approval by FRx. The [*] payment specified in Section 6.1(a) of the
License Agreement is modified to be due on or before July 5, 1996.
2. Section 10.1(a)(1) of the license Agreement limits Platinum's ability to
market and license the Platinum version of FRx. Notwithstanding this
clause, FRx agrees to allow Platinum to continue to license the Platinum
version of FRx with its upcoming 4.4 release Of its Platinum for Windows
product so that Platinum may meet its planned delivery dates, subject to
the agreement of Platinum to pay royalties to FRx
<PAGE> 66
Mr. Michael L. Rohan, President
FRx Software Corporation
Page 2
June 24, 1995
on all shipments of the Platinum version of FRx. The royalty will be
calculated in accordance with the fees described on Exhibit B to the
License Agreement and shall be credited against amounts owed by Platinum
under Section 6.1 (d) of the License Agreement. Platinum shall stop
shipping this version of Platinum FRx at such time as the FRx version to be
integrated with Platinum for Windows, version 4.4 is completed, accepted in
accordance with the License Agreement and generally available.
If you have any questions regarding the terms of this letter, please don't
hesitate to contact me. Please evidence your agreement with the terms described
in this letter by signing in the space indicated below and returning a copy of
this letter to me.
Very truly yours,
/s/ TIM MCMULLEN
Tim McMullen
Chief Technology Officer
TM:cl
cc: Tom Clark
Perry Tarnofsky
Agreed and accepted:
FRx Software Corporation
By: /s/ ROBERT C. ROHAN
--------------------
Its: Vice President
-------------------
Date: June 28, 1996
------------------
