Exhibit (e)(20)
M-GROUP SYSTEMS, INC.
SOFTWARE LICENSE AGREEMENT
This License Agreement between M-Group Systems, Inc., a Delaware corporation
("M-Group"), and the Licensee identified below consists of this Part One:
Variable Terms and the attached Part Two: General Terms and conditions, and the
attachments as indicated below.
PART ONE: VARIABLE TERMS
1. Parties
M-Group:
M-Group Systems, Inc. Mailing Address:
0000 Xxxxxxxxxx Xxxxxxxxx X.X. Xxx 000
Xxxxxx, XX 00000 Xxxxxx, XX 00000-0000
Contact: Xxxx Xxxxx, Telephone: (000) 000-0000, Facsimile: (000) 000-0000
Licensee: Peapod, Inc.
0000 Xxxxx Xxxxx
Xxxxxx, XX 00000
Contact: Xxxx Xxxxxx Telephone: 000-000-0000 Facsimile: 000-000-0000
2. Software and Fees
2.1 The Licensed Software to be licensed by M-Group under this Agreement is
described in the Quotation attached as Exhibit "A" ("Quotation").
2.2 Technical support services are provided by M-Group under a separate
M-Group Systems, Inc. Technical Support Agreement, attached as Exhibit "B"
("Technical Support Agreement").
2.3 Fees payable to M-Group hereunder for license fees and the first annual
technical support fee are as described in the Quotation (Exhibit A) and the
Technical Support Agreement (Exhibit B), respectively.
LICENSEE ACKNOWLEDGES BY SIGNING BELOW THAT IT HAS READ THIS AGREEMENT AND
AGREES TO BE LEGALLY BOUND BY ALL TERMS AND CONDITIONS. THIS AGREEMENT SHALL
BECOME EFFECTIVE WHEN ACCOMPANIED BY THE FEE PAYMENTS DESCRIBED IN EXHIBIT A AND
EXECUTED BY M-GROUP.
M-GROUP SYSTEMS, INC. Peapod, Inc.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxx Xxxxxxxxxx
------------------------------ ----------------------------------
Printed Name: Xxxx X. Xxxxx Printed Name: Xxx Xxxxxxxxxx
-------------------- ------------------------
Title: CEO Title: Sr. VP: Chief Financial Officer
--------------------------- -------------------------------
Date: October 11, 1999 Date: October 8, 1999
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Confidential & Proprietary
M-Group Systems, Inc.
1
M-GROUP SYSTEMS, INC.
SOFTWARE LICENSE AGREEMENT
PART TWO: GENERAL TERMS AND CONDITIONS
THESE GENERAL TERMS AND CONDITIONS SHALL GOVERN PART ONE OF THIS SOFTWARE
LICENSE AGREEMENT AND THE FOLLOWING ATTACHMENTS: (1) EXHIBIT "A" (QUOTATION),
(2) EXHIBIT "B" (TECHNICAL SUPPORT AGREEMENT), AND (3) EXHIBIT "C"
(NON-DISCLOSURE AGREEMENT).
1. DEFINITIONS
1.1 "Authorized Computers." The number of AS-400 computers on which the
Licensed Software may be loaded concurrently. Authorized Computers may be
increased from time-to-time by purchasing additional licenses in accordance
with Section 2.2.
1.2 "Licensed Software." Computer programs in object code form only, as
described on the Quotation, together with any additional software modules that
may be licensed in the future under Section 2.2 below.
1.3 "Proprietary Rights." All rights in and to copyrights, rights to
register copyrights, trade secrets, inventions, patents, patent rights,
trademarks, trademark rights, confidential and proprietary information protected
under contract or otherwise under law, and other similar rights or interests in
intellectual or industrial property.
2. GRANT OF LICENSE
2.1 Licensed Software. Subject to the terms and conditions hereof,
M-Group hereby grants to the Licensee, and Licensee hereby accepts, a limited,
non-exclusive license under the Proprietary Rights of M-Group and its licensors
to copy, distribute, and use the Licensed Software, but only to the extent of
Authorized Computers under licenses which have been fully paid hereunder.
M-Group shall deliver the Licensed Software in the form of (i) a master copy in
electronic form, and (ii) procedure manuals both in electronic form and one copy
printed and bound.
2.1.1 Licensee shall use the Licensed Software only for Licensee's
internal business operations including affiliated entities that control, or are
controlled, by Licensee, and Licensee shall not permit the Licensed software to
be used by or for the benefit of third parties, including without limitation,
use as part of a service bureau.
2.1.2 Licensee shall not have the right to relicense or sell the
Licensed Software or to transfer or assign the Licensed Software, except as
expressly provided herein.
2.2 Purchase of Additional Licenses. If Licensee purchases license
rights for additional Authorized Computers from M-Group, such additional
licenses shall be governed by the terms and conditions hereof. Pricing for
additional licenses is provided on the Quotation (Exhibit A). Licensee agrees
that, absent M-Group's express written acceptance thereof, the terms and
conditions contained in any purchase order or other document issued by Licensee
to M-Group for the purchase of additional licenses, shall not be binding on
M-Group to the extent that such terms and conditions are additional to or
inconsistent with those contained in this Agreement.
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2.3 Ownership. Title to the Proprietary Rights embodied in the Licensed
Software shall remain in and be the sole and exclusive property of M-Group and
its licensors.
2.4 Proprietary Notices. Licensee shall not alter, change or remove any
proprietary notices or confidentiality legends placed on or contained within the
Licensed Software. Licensee shall include such notices and legends in all copies
of any part of the Licensed Software made pursuant to this Agreement.
2.5 Notice of Infringement; Misappropriation. In the event either party
becomes aware of any action that may infringe or misappropriate the Proprietary
Rights of the other party, such party shall promptly notify the other party of
such action.
2.6 No Encumbrances. Licensee shall keep the Licensed Software free and
clear of all claims, liens, and encumbrances.
2.7 Copying. Except for purposes of creating a reasonable number of
back-up copies, Licensee shall not copy, duplicate, or print the Licensed
Software, in whole or in part, without the prior written consent of M-Group.
Licensee shall have the right to make copies of the Procedure manuals, in whole
or in part, for its internal use only.
2.8 Modification; Disassembly. Licensee may modify the Licensed Software
for use in its internal operations only. M-Group makes no warranty as to the
impact such modifications will have on the licensed software.
2.9 Right of Access by M-Group. Licensee shall provide the necessary
passwords and protocols to permit M-Group to access the Licensed Software by
modem for purposes of providing technical support services and/or determining
whether the Licensed Software is being used in accordance with the terms and
conditions hereof.
2.10 Reserved Rights. All rights not expressly granted to Licensee herein
are expressly reserved by M-Group.
3. CONFIDENTIALITY
3.1 Licensed Software. Licensee acknowledges M-Group's claim that the
Licensed Software embodies valuable trade secrets consisting of source code,
logic, design, coding methodology, and data models and relational database
schema for logistical planning and execution which are proprietary to M-Group.
Licensee shall use the Licensed Software only for purposes authorized herein.
Licensee shall safeguard the confidentiality of the Licensed Software, using at
least reasonable care. Such care shall include, but not be limited to, taking
reasonable precautions to ensure (i) that the Licensed Software is made
available only to Licensee's employees and contractors who have signed written
non-disclosure in the form attached as Exhibit "C" and who are in direct support
of Licensee's data processing operations, and (ii) that Licensee and its
employees do not make unauthorized use, disclosure, or transfer of the Licensed
Software, documentation and all other materials provided in connection with the
foregoing.
3.2 Licensee Information. All Licensee information submitted to M-Group or
prepared for or in connection with the performance of this Agreement that is
marked "confidential" or "proprietary" shall be held in confidence by M-Group
and shall not, without the prior written consent of Licensee, be disclosed or be
used for any purposes other than the performance of this Agreement. M-Group
shall safeguard the confidentiality of such Licensee information, using at least
reasonable care.
4. WARRANTIES AND LIMITATION OF LIABILITY
4.1 Limited Warranty for the Licensed Software. Commencing with the
installation of the Licensed Software and continuing for a period of twelve (12)
months, M-Group warrants that the Licensed Software (i) will conform as to all
material operational features and performance characteristics of the
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"Requirements Definition" document supplied by M-Group with the Licensed
Software, and (ii) will be free of errors and defects that materially affect the
performance of such features; provided, however, that (i) the Licensed Software
is implemented and operated in accordance with all written instructions supplied
by M-Group, (ii) Licensee notifies M-Group in writing of such nonconformity,
error, or defect within ten (10) days of the appearance thereof, and (iii)
Licensee has promptly and properly installed all fixes, upgrades, updates, and
enhancements made available by M-Group to Licensee. If Licensee timely notifies
M-Group in writing of any such nonconformity, error, or defect, M-Group shall at
its sole and exclusive option repair or replace the Licensed Software. During
the warranty period, M-Group shall provide telephone consultation regarding the
use and operation of the Licensed Software. THE REMEDIES SET OUT IN THIS SECTION
4.1 ARE THE SOLE AND EXCLUSIVE REMEDIES FOR BREACH OF THE LIMITED WARRANTY. THIS
WARRANTY GIVES LICENSEE SPECIFIC LEGAL RIGHTS, AND LICENSEE MAY ALSO HAVE OTHER
RIGHTS WHICH VARY FROM STATE TO STATE. M-GROUP DOES NOT WARRANT THAT THE
LICENSED SOFTWARE WILL MEET LICENSEE'S REQUIREMENTS, THAT THE LICENSED SOFTWARE
WILL OPERATE IN THE COMBINATIONS WHICH LICENSEE MAY SELECT FOR USE, THAT THE
OPERATION OF THE LICENSED SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT
ALL LICENSED SOFTWARE ERRORS WILL BE CORRECTED.
4.2 Warranty Exclusions. Notwithstanding any other provisions of this
Agreement to the contrary, the limited warranty provided in Section 4.1 shall
not apply to nonconformities, errors, or defects due to any of the following:
(i) misuse of the Licensed Software, (ii) modification of the Licensed Software
by Licensee, (iii) failure by Licensee to utilize compatible computer and
networking hardware and software, (iv) interaction with software or firmware not
provided by M-Group, or (v) any change in applicable operating system software.
4.3 Warranty Disclaimer. EXCEPT FOR THE LIMITED WARRANTY PROVIDED IN
SECTION 4.1, TO THE EXTENT ALLOWED BY LAW, M-GROUP HEREBY DISCLAIMS ALL
WARRANTIES, BOTH EXPRESS AND IMPLIED, INCLUDING IMPLIED WARRANTIES RESPECTING
MERCHANTABILITY, TITLE, AND FITNESS FOR A PARTICULAR PURPOSE. SOME STATES DO NOT
ALLOW DISCLAIMERS OF IMPLIED WARRANTIES, SO THE ABOVE LIMITATION MAY NOT APPLY.
LICENSEE ACKNOWLEDGES THAT NO REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT HAVE BEEN MADE RESPECTING THE LICENSED SOFTWARE OR SERVICES TO BE
PROVIDED HEREUNDER, AND THAT LICENSEE HAS NOT RELIED ON ANY REPRESENTATION NOT
EXPRESSLY SET OUT IN THIS AGREEMENT.
4.4 Proprietary Rights Warranty and Indemnification. M-Group represents
and warrants that M-Group has the authority to license the rights to the
Licensed Software which are granted herein. M-Group shall defend, indemnify, and
hold Licensee harmless from any final award of costs and damages against
Licensee for any action based on (i) the lack of right or authority to license
the Third Party Software, or (ii) infringement of any U.S. copyright, trade
secret or patent known to M-Group as a result of the use of a current,
unmodified copy of the Licensed Software; provided, however, that M-Group is
promptly notified in writing of any such suit or claim, and further provided
that Licensee permits M-Group to defend, compromise, or settle same, and
provides all available information and reasonable assistance to enable M-Group
to do so. The foregoing is exclusive and states the entire liability of M-Group
with respect to infringements or misappropriation of any Proprietary Rights by
the Licensed Software.
4.5 Limitation of Damages. M-GROUP'S ENTIRE LIABILITY FOR MONEY DAMAGES
ARISING OUT OF THIS AGREEMENT AND/OR THE LICENSING OF THE LICENSED SOFTWARE
SHALL BE LIMITED TO LICENSE FEES PAID BY LICENSEE UNDER THIS AGREEMENT, AND IF
SUCH DAMAGES ARISE OUT OF LICENSEE'S USE OF THE LICENSED SOFTWARE OR SERVICES
PROVIDED HEREUNDER SUCH LIABILITY SHALL BE LIMITED TO THE FEES PAID FOR THE
RELEVANT PORTION OF THE LICENSED SOFTWARE OR SERVICES GIVING RISE TO THE
LIABILITY, PRORATED OVER A THREE-YEAR TERM FROM THE EFFECTIVE DATE OF THIS
AGREEMENT.
4.6 Disclaimer of Incidental and Consequential Damages. IN NO EVENT SHALL
M-GROUP BE LIABLE TO LICENSEE UNDER ANY THEORY INCLUDING CONTRACT AND TORT
(INCLUDING NEGLIGENCE AND STRICT PRODUCTS LIABILITY) FOR ANY INDIRECT, SPECIAL
OR INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, COSTS OF
PROCUREMENT OF SUBSTITUTE GOODS AND SERVICES, DAMAGES FOR LOSS OF DATA, LOSS OF
USE OF COMPUTER HARDWARE, DOWNTIME, LOSS OF GOODWILL, LOSS OF BUSINESS OR
COMPUTER
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HARDWARE MALFUNCTION, EVEN IF M-GROUP HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF
INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATION OR EXCLUSION MAY
NOT APPLY.
4.7 Limitation on Actions. No action, regardless of form, arising out of
or relating to this Agreement may be brought by either party more than one (1)
year after the cause of action has accrued.
4.8 Allocation of Risks. This Agreement allocates fairly between M-Group
and Licensee the risks of defects to, or failure of, the Licensed Software. This
allocation is the result of negotiation between the parties, is accepted by
both parties, and is reflected in the pricing for the Licensed Software, other
fees payable, the limited warranties provided, the limited remedies provided,
the disclaimer of liability for certain damages including without limitation,
incidental and consequential damages, the limitation of liability, and the
limitation on actions. The parties hereby stipulate that in any proceeding
regarding any dispute under this Agreement, all of these provisions should be
recognized and enforced.
5. TERM; TERMINATION
5.1 Term. The license term and Agreement shall commence upon execution by
M-Group, and shall continue in perpetuity unless sooner terminated as provided
herein.
5.2 Default. Either party shall have the right to terminate this Agreement
in the event the other party breaches or is in default of any material term
hereof, and such default is not cured within thirty (30) days of receipt of
notice of such default (or such additional cure period as may be reasonably
necessary provided the defaulting party is diligently and actively pursuing the
cure thereof).
5.3 Return of Materials. Within ten (10) days of any termination hereof,
Licensee shall return to M-Group the Licensed Software and all copies of all
other materials supplied by M-Group.
6. GENERAL
6.1 Waiver. The failure or forbearance by M-Group or Licensee to enforce
any right or claim against the other party shall not be deemed to be a waiver by
M-Group or Licensee of such right or claim or any right or claim hereunder. The
waiver by M-Group or Licensee of a breach hereof shall not operate or be
construed as a waiver of any subsequent breaches of the same or any other
provision.
6.2 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter thereof and supersedes
all prior proposals, agreements, negotiations, correspondence and all other
communications, whether written or oral, between M-Group and Licensee. No
modification or waiver of any provision hereof shall be effective unless made
in a writing signed by both M-Group and Licensee.
6.3 Severability. If any provision hereof is determined in any proceeding
binding upon the parties to be invalid or unenforceable, that provision shall be
deemed severed from the remainder of such agreement, and the remaining
provisions of such agreement shall continue in full force and effect.
6.4 Applicable Law. This Agreement shall be governed and construed in all
respects in accordance with the laws of the State of Texas without respect to
conflict of laws in Texas.
6.5 Attorney's Fees. In the event it shall become necessary to enforce
this Agreement in a court of law, the prevailing party shall be entitled to
recover its reasonable attorney's fees and costs.
6.6 Notices. Except where provided otherwise, notices hereunder shall be
in writing and shall be deemed to have been fully given and received (i) when
sent and received by facsimile transmission as indicated by a printed notice
generated at the time of transmission, or (ii) when mailed by registered or
certified mail, return receipt requested, postage prepaid, and properly
addressed to the offices of the respective parties as specified in Part One, or
at such address as the parties may later specify in writing for such purposes.
The foregoing shall apply regardless of whether such mail is accepted or
unclaimed.
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6.7 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, any successor to all or substantially all of the business and
assets of M-Group relating to the subject matter of this Agreement, whether by
merger, sale of assets, or other agreements or operation of law. Except for this
limited right of assignment, neither party shall assign this Agreement or any
right or interest under this Agreement, nor delegate any work or obligation to
be performed under this Agreement, without the other party's prior written
consent. Any attempted assignment or delegation in contravention of this
provision shall be void and ineffective.
6.8 Arbitration. Except for the right of either party to apply to a court
of competent jurisdiction for a Temporary Restraining Order, Preliminary
Injunction, or other equitable relief to preserve the status quo or prevent
irreparable harm pending the selection and confirmation of the arbitrator, any
and all disputes, controversies, or claims arising out of or relating to this
Agreement or a breach thereof shall be submitted to and finally resolved by
arbitration under the rules of the American Arbitration Association ("AAA") then
in effect. There shall be one arbitrator, and such arbitrator shall be chosen by
mutual agreement of the parties in accordance with AAA rules. The arbitration
shall take place in Houston, Texas. The arbitrator shall apply the laws of the
State of Texas, to all issues in dispute. The findings of the arbitrator shall
be final and binding on the parties, and may be entered in any court of
competent jurisdiction for enforcement. Legal fees shall be awarded to the
prevailing party in the arbitration.
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EXHIBIT "A" (Revised 9/12/00)
QUOTATION
Product Ordered M-Group Distribution Software Version Number 6.0
----------------------------- ---
Product License Price $495,000 (including Order Processing; Purchasing; Costing,
Pricing, and Promotions; Retail Services; Warehouse Management; Labor Standards
Reporting; RF Support of Put Away, Physical Inventory, Replenishment and
Selection; and Common Elements.) The basic license fee is payable as follows:
. $225,000 Upon the execution hereof; and
. $135,000 Upon delivery of customized system; and
. $135,000 Upon putting the software into production (go-live) and
---
the system performs for one month without a priority A outage.
Authorized Computer IBM AS400. Licensed for use on one production CPU. A second
CPU can operate the software for backup and testing purposes.
Pricing for Additional Licenses: In a centralized environment, one license is
purchased for the host processor and one distribution center, with each
additional distribution center having an additional cost of twenty-five percent
(25%) of the cost of the first license (if it is run on the host processor), in
a decentralized environment, the cost of the first license is the same with each
additional distribution center having an additional cost of fifty percent (50%)
of the cost of the first license. As of the date of the Agreement, the parties
agree that Licensee is operating in a centralized environment.
Based upon the anticipated number of systems, the following discounted software
license fee structure has been established for Peapod, Inc. for additional
licenses:
. Additional Distribution Centers 1-3 $112,500 each
. Additional Distribution Centers 4-12 $100,000 each
. Additional Distribution Centers 13-16 $ 90,000 each
. Additional Distribution Centers 17-20+ $ 80,000 each
Fast Pick Centers (FPC) License Fees
. The license fee for the first FPC will be $35K.
. The license fee for the second FPC will be $20K.
. The license fee for the third and subsequent FPC's will be $1/sq.ft.
with a minimum license fee of $10K/FPC.
Implementation Fees ($750,000--Estimate for host site only, additional
sites billed at actual. When the $750K estimate is reached, any remaining effort
for the host site will be invoiced at cost.)
The following outlines the major deliverable areas and including but not limited
to deliverables in each area:
. Detail Design
Functional requirements and GAP analysis, technical design
specifications for all interfaces
. Data Conversion
Data mapping from AS400 data base interface to SQL Server and
Informix
. Report Customization
Technical specification and development of existing and new
reports
. Customization (includes interfaces)
Technical specifications for all interfaces and requirements
agreed to as part of the GAP and requirements analysis
. Installation Support
Includes on-site installation of all M-Group licensed software,
testing of interfaces described in the above arena, performance
tuning, and on-site training of users)
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Estimated Expenses for travel -- TBD
Training in Temple--$500 day/student (maximum of 8 students/course)
The maintenance fee for the first year after go-live is included in the License
Fee (re: Clause 3.2 of Exhibit B). The maintenance fee after the first year is
scalable as per the following:
. 2nd year 20%
. 3rd year 18%
. 4th year 17%
. 5th year+ 16%
Note: Maintenance Fees are only scalable if there is progression in the number
of systems in production. Even though the maintenance fee shows 18% for the
third year, this percentage does not apply until the fourth remote system is in
production. When the thirteenth remote system is in production, the 17% will
apply. Table 1 on the following page is intended as a clarification:
Table 1
Example of Maintenance Fees
--------------------------------------------------------------------------------
1st Year 2nd Year 3rd Year 4th Year 5th Year
--------------------------------------------------------------------------------
-- $832.5K x 20% $832.5K x 18% $832.5K x 17% $832.5K x 16%
--------------------------------------------------------------------------------
$500K x 20% $500K x 18% $500K x 17%
--------------------------------------------------------------------------------
$400K x 20% $400K x 18%
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$360K x 20%
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Note: The above table assumes that Licensee has added Distribution Centers at
the following rate:
. Host system plus three additional DC's the first year,
($495K + $112.5K x 3 = $832.5K)
. Additional DC's 4-8 the second year, ($100K x 5 = $500K)
. Additional DC's 9-12 the third year, ($100K x 4 = $400K)
. Additional DC's 13-16 the fourth year, ($90K x 4 = $360K)
The calculation for the above maintenance fees begins at the completion of
go-live (i.e. when the software is utilized in production)
Maintenance fees for the FPCs will be as follows:
The first year the maintenance fee is part of the License Fee. Beginning with
the second year, the maintenance fees for the FPC's will be based upon the
number of FPC's rather than the year that they are put into production.
FPC# Yearly rate
----- -----------
1-4 -20%
5-9 -19%
10-14 -18%
15-19 -17%
20-24 -16%
25-29 -15%
30-34 -14%
35-39 -13%
40-44 -12%
45-49 -11%
50+ -10%
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The following rates will be in effect for the first two years of the contract:
Executive Staff Consultation - $200/hour for personnel at the VP level or above.
Software Development - $120/hour for development staff
- $145/hour for technical specifications
Implementation - $60/hr -- Business Analyst
- $85/hr -- Business Analyst II
- $110/hr -- Senior Business Analyst
- $150/hr -- Project Manager
- $175/hr -- Integration Manager
Descriptions of Implementation Positions
Business Analyst - Personnel directly out of college with no experience except
M-Group training.
Business Analyst II - Personnel that have Computer related job background or
business experience.
Senior Business Analyst - Personnel that have MDS system, AS/400, and go-live
experience.
Project Manager - Personnel that are totally responsible for all aspects of a
project.
Integration Manager - Directly responsible for projects and give guidance to
Project Managers.
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EXHIBIT "B" (Revised 9/12/00)
M-GROUP SYSTEMS, INC.
TECHNICAL SUPPORT AGREEMENT
This Agreement is intended to be part of the attached Software License Agreement
made and entered into by and between M-Group, a Delaware corporation and
Licensee.
1. DEFINITIONS
1.1 Capitalized terms used in this Exhibit and not otherwise defined
shall have the same meaning as set forth in the body of the Agreement. As used
herein, the following words shall have the meanings ascribed to them below:
1.2 "Error" means an error in the Licensed Software which
significantly degrades the Licensed Software as compared to documentation
provided by M-Group.
1.3 "Fix" means the repair or replacement of object or executable code
versions of the Licensed Software to remedy an Error.
1.4 "Priority A Error" means an Error which renders the Licensed
Software inoperative or causes the Licensed Software to substantially fall.
1.5 "Priority B Error" means an Error which substantially degrades the
performance of the Licensed Software or materially restricts use of the Licensed
Software.
1.6 "Priority C Error" means an Error which causes only a minor impact
on the use of the Licensed Software.
1.7 "Workaround" means a change in the procedures followed or data
supplied by Licensed Software user to avoid an Error without substantially
impairing use of the Licensed Software.
2. SERVICES
2.1 During the term of this Agreement, M-Group agrees to furnish to
Licensee the technical support services described below; provided, however, that
Licensee provides written documentation of the Error sufficient for M-Group to
reproduce same with M-Group's master copy of the Licensed Software.
2.1.1 Priority A Errors. Notwithstanding anything in this
agreement to the contrary, ninety-five (95%) of the time after receipt of notice
from Licensee, M-Group shall provide Licensee with a Workaround within eight (8)
hours of receipt of such notice. M-Group shall provide Licensee with a Fix
within ten (10) business days. With respect to the other five percent (5%) of
the time, M-Group shall provide Licensee with a Workaround within twenty-four
(24) hours and a Fix within fifteen (15) business days of receipt of notice.
With respect to Priority A Errors, M-Group agrees to provide Licensee with
technical telephone support/consultation seven (7) days per week, twenty-four
(24) hours per day, during the term of this Agreement.
2.1.2 Priority B Errors. Within five (5) calendar days of
receipt of notice from Licensee of a Priority B Error, M-Group shall assign
M-Group engineers to correct the Error; provide Licensee with periodic reports
on the status of the corrections; and initiate work to provide Licensee with a
Workaround or Fix. M-Group shall provide Licensee with such Workaround or Fix
within thirty (30) calendar days, and M-Group shall use commercially reasonable
efforts to include the Fix for the Error in the next regular maintenance release
for the Licensed Software.
2.1.3 Priority C Errors. M-Group shall use commercially
reasonable efforts to include the Fix for the Error in the next major release of
the Licensed Software.
2.2 Errors not Caused by the Licensed Software. If M-Group reasonably
believes that a problem reported by Licensee may not be due to an Error in the
Licensed Software, M-Group will so notify Licensee. At that time, Licensee may
(i) instruct M-Group to proceed with problem determination at its
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possible expense as set forth below, or (ii) instruct M-Group that Licensee does
not wish the problem pursued at its possible expense. If Licensee requests that
M-Group proceed with problem determination at its possible expense and M-Group
reasonably determines that the error was not due to an Error in the Licensed
Software, M-Group shall immediately stop further work and so inform Licensee and
Licensee shall pay M-Group, at M-Group's then-current consulting rates, of all
work performed in connection with such determination, plus reasonable related
expenses incurred therewith. Licensee shall not be liable under this Section 2.2
for problem determination or repair to the extent that problems are due to
Errors in the Licensed Software nor shall Licensee be liable for work performed
under this Section 2.2 in excess of its instructions or after Licensee has
notified M-Group in accordance with the terms hereof that it no longer wishes
work on the problem determination to be continued at its possible expense. If
Licensee instructs M-Group that it does not wish the problem pursued at its
possible expense or if such determination requires effort in excess of Licensee
instructions, M-Group may, in its reasonable discretion, elect not to
investigate the error.
2.3 Upgrades and Enhancements. M-Group shall periodically provide to
Licensee releases containing upgrades, enhancements, or other improvements or
modifications of the Licensed Software. Releases shall be provided on a
quarterly basis and new versions on a 12 to 18 month basis.
2.4 Customizations and On-Site Consultation and Support. Services related
to customization of the Licensed Software and consultation at Licensee's site
are not included in annual fees for technical support. M-Group shall undertake
reasonable efforts to accommodate any written request by Licensee for
customization and/or on-site consultation services. Licensee agrees to pay for
such services at M-Group's then-current rates for time and materials, plus
reimbursement for M-Group's actual and reasonable travel and lodging expenses.
2.5 Telephone Support. Telephone support will be provided as follows:
a) M-Group shall provide reasonable telephone consultation with
respect to the Licensed Software to Licensee during M-Group's
normal business hours 8am-5pm CST, excluding holidays. The intent
of this telephone consultation is to answer "How to" questions and
to report Priority C errors.
b) M-Group shall provide twenty-four hours per day, seven days per
week telephone support to enable the Licensee to report Priority A
and B errors.
2.6 Project Management. M-Group shall assign __________ as its Project
Manager who shall have principal responsibility for overseeing and managing the
performance of Services under this Agreement. Licensee understands that the
Project Manager shall not be totally dedicated to Licensee's project. M-Group
agrees that the M-Group Project Manager shall dedicate such time as is
reasonably needed to perform the Service under this Agreement. The Licensee and
Licensor Project managers will jointly develop an implementation plan.
2.7 Licensee shall assign __________ as the Project Manager who shall have
principal responsibility for overseeing and managing the performance of
Licensee's obligations under this Agreement and who shall be the single point of
contact for Licensee. The Project Manager shall have the right to review the
qualifications of all of the Licensor's implementation personnel prior to their
being assigned to on-site effort. The two project managers will mutually agree
prior to any Licensor personnel being assigned.
2.8 Exclusions. Notwithstanding any other provisions of this Agreement to
the contrary, the technical support obligations of M-Group shall not apply to
Errors due to any of the following: (i) misuse of the Licensed Software, (ii)
modification of the Licensed Software by Licensee, (iii) failure by Licensee to
utilize compatible computer and networking hardware and software, (iv)
interaction with software or firmware not provided by M-Group, or (v) any change
in applicable operating system software.
2.9 Source Code. M-Group will put source code in escrow at the beginning
of the contract and then a revised version when the software is put into
production at time of go-live.
3. TERM; TECHNICAL SUPPORT FEES
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M-Group Systems, Inc.
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3.1 The initial term of this Agreement shall be one (1) year. For so long
as M-Group continues to support the Licensed Software generally in the normal
course of its business, this Agreement shall renew automatically for additional
renewal terms of one (1) year each, provided that Licensee pays the renewal fee
prior to the expiration of the current annual term.
3.2 Annual fees are charged on the basis of the cumulative license fees
for the Licensed Software. The maintenance fee includes on-going telephone
support, quarterly releases, and new version releases every 12-18 months. The
amount of the fee for the first year is $0.00, and is payable according to the
Part One of the Software License Agreement. Renewal fees shall be payable by
Licensee for the Licensed Software prior to renewal according to the scale
described in Exhibit A.
LICENSEE ACKNOWLEDGES BY SIGNING BELOW THAT IT HAS READ THIS AGREEMENT AND
AGREES TO BE LEGALLY BOUND BY ALL TERMS AND CONDITIONS. THIS AGREEMENT SHALL
BECOME EFFECTIVE WHEN ACCOMPANIED BY THE PAYMENT DESCRIBED ON PART ONE OF THE
ATTACHED SOFTWARE LICENSE AGREEMENT AND EXECUTED BY M-GROUP.
M-GROUP SYSTEMS, INC. Peapod, Inc
By: /s/ Xxxx X. Xxxxx By: /s/ Xxx Xxxxxxxxxx
----------------------------- ----------------------------
Printed Name: Xxxx X. Xxxxx Printed Name: Xxx Xxxxxxxxxx
------------------- ------------------
Title: Chief Executive Officer Title: Senior Vice President:
-------------------------- -------------------------
Chief Financial Officer
-------------------------
Date: October 11, 1999 Date: October 8, 1999
--------------------------- --------------------------
Confidential & Proprietary
M-Group Systems, Inc.
12
EXHIBIT "C"
NON-DISCLOSURE AGREEMENT
THIS AGREEMENT is entered into as of October 11, 1999, by and between M-Group
Systems, Inc., a Delaware corporation with its principal office located at 0000
Xxxxxxxxxx Xxxx., Xxxxxx, Xxxxx 00000 ("Licensor") and Peapod, Inc., a Delaware
corporation with its principal office located at 0000 Xxxxx Xxxxx, Xxxxxx, XX
00000 ("Licensee").
WHEREAS, Licensee is the licensee of a certain M-Group Distribution System
software product (the "Software") licensed by M-Group Systems, Inc., a Delaware
corporation with its principal office located at 0000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxxx, XX 00000 ("Licensor"); and
WHEREAS, the parties desire to protect certain valuable trade secrets
proprietary to Licensor that are embodied in the Software and related manuals
and documentation and which are more particularly described in the definition of
"Confidential Information" provided below:
NOW, THEREFORE, in consideration of the foregoing, and in reliance on the mutual
agreements contained herein, the parties agree as follows:
1. "Confidential Information" means trade secrets and other information
proprietary to Licensee which are embodied in the Software and all related
manuals and documentation, including without limitation, the Software source
code and object code, logic, design, coding methodology, and data models and
relational database schema for logistical planning and execution.
2. Licensee may use the Software only for purposes of the direct support of
Licensee's internal data processing requirements, and shall protect the Software
and Confidential Information from disclosure to others, using the same degree of
care used to protect its own proprietary information of like importance, but in
any case using no less than a reasonable degree of care. Licensee may disclose
Confidential Information received hereunder only for the purpose described in
the recital to this Agreement and only to its employees who have a need to know
for such purpose and who are bound by signed, written agreements consistent with
this Agreement to protect the received Confidential Information from
unauthorized use and disclosure.
3. The restrictions of this Agreement on use and disclosure of Confidential
Information shall not apply to information that: (i) is in the possession or
control of Licensee at the time of its disclosure hereunder; (ii) is, or becomes
publicly known, through no wrongful act of Licensee; (iii) is received by
Licensee from a third party free to disclose it without obligation to Licensee;
or (iv) is independently developed by Licensee without reference to Confidential
Information.
4. In the event Licensee is required by law, regulation or court order to
disclose any of Licensor's Confidential Information, Licensee will notify
Licensor in writing prior to making any such disclosure in order to facilitate
Licensor seeking a protective order or other appropriate remedy from the
appropriate body. Licensee further agrees that if Licensor is not successful in
precluding the requesting legal body from reviewing the Confidential
Information, it will furnish only that portion of the Confidential Information
which is legally required and will exercise all reasonable efforts to obtain
reliable assurances that confidential treatment will be accorded the
Confidential Information.
5. Confidential Information disclosed under this Agreement shall be and remain
the property of Licensor. All copies of the Software and information in tangible
form shall be returned to Licensor promptly upon written request and shall not
thereafter be retained in any form by Licensee. No licenses or rights under any
patent, copyright, trade secret, trademark, or other property right are granted
or are to be implied by this Agreement.
6. Licensor shall not have any liability or responsibility for errors or
omissions in, or any business decisions made by Licensee in reliance on, the
Software or any Confidential Information disclosed under this Agreement.
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M-Group Systems, Inc.
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7. This Agreement shall become effective as of the date of execution by
both parties. All obligations hereunder, including without limitation any and
all obligations regarding the use and disclosure of Confidential Information,
shall continue for a period of ten (10) years from the disclosure of the
affected Confidential Information.
8. This Agreement: (i) is the complete agreement of the parties concerning
the subject matter hereof and supersedes any prior such agreements with respect
to further disclosures on such subject matter; (ii) may not be amended or in any
manner modified except in writing signed by the parties; and (iii) shall be
governed and construed in accordance with the laws of the State of Texas without
regard to its conflict of law provisions. If any provision of this Agreement is
found to be unenforceable, the remainder shall be enforced as fully as possible
and the unenforceable provision shall be deemed modified to the limited extent
required to permit its enforcement in a manner most closely representing the
intention of the parties as expressed herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
below.
LICENSOR: M-Group Systems, Inc. LICENSEE: Peapod, Inc.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxx Xxxxxxxxxx
--------------------------- -----------------------------------
Printed Name: Xxxx X. Xxxxx Printed Name: Xxx Xxxxxxxxxx
----------------- -------------------------
Title: Chief Executive Officer Title: Senior Vice President and
------------------------ --------------------------------
Chief Financial Officer
--------------------------------
Date: October 11, 1999 Date: October 8, 1999
------------------------- ---------------------------------
Confidential & Proprietary
M-Group Systems, Inc.
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