EXHIBIT 10.1
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
ALLIANCE AGREEMENT
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This Alliance Agreement (the "Agreement") is entered into as of January 8,
1999 (the "Effective Date"), by and between Microsoft Corporation, a Washington
corporation, located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxx 00000
("Microsoft") and Banyan Systems Incorporated, a Massachusetts corporation
("Banyan"), located at 000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000
(individually, a "Party," and collectively, the "Parties").
RECITALS
WHEREAS, Banyan desires to develop and promote Microsoft Enterprise
Solutions Platform-based Enterprise Services targeting the following specific
market opportunities: Network/Directory Services WAN Internetworking;
Internet/Intranet Infrastructure and Applications; Banyan VINES/StreetTalk to NT
Server Integration and Migration; Integrated Messaging Infrastructure; Banyan
BeyondMail to Exchange Integration and Migration; and
WHEREAS, Microsoft desires to establish a relationship with a global
services and technology company to provide Clients in the Enterprise Market with
Microsoft Enterprise Solutions Platform-based Enterprise Services targeting the
following specific market opportunities: Network/Directory Services WAN
Internetworking; Internet/Intranet Infrastructure and Applications; Banyan
VINES/StreetTalk to NT Server Integration and Migration; Integrated Messaging
Infrastructure; Banyan BeyondMail to Exchange Integration and Migration; and
WHEREAS, In furtherance of their relationship, Microsoft will provide funds
to Banyan for joint marketing, certification and training of Banyan's consulting
personnel in Microsoft technology and other purposes, and Banyan will undertake
certain obligations and to make royalty payments to Microsoft, in each case, on
the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises as stated herein
and for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:
AGREEMENTS
1. DEFINITIONS In addition to those terms defined in the other sections of
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this Agreement, capitalized terms shall have the following meanings:
1.1 "BANYAN BEYONDMAIL TO MICROSOFT EXCHANGE INTEGRATION AND MIGRATION
MARKET" is defined as the business opportunity that is represented by
providing interoperability and migration tools and Enterprise Services
to Clients in the Banyan installed base that currently use Banyan's
BeyondMail and Intelligent Messaging client and server products. This
customer group forms a market that, in aggregate, is potentially
interested in both improving the level of interoperability between
Banyan products and Microsoft Outlook and the combination of Windows
NT Server (and, as available, Windows 2000 Server) and Exchange
server, as well as moving users to the Microsoft Outlook/Exchange
platform.
1.2 "Banyan's Customer Solution Center(s)" is defined as the collection of
physical locations that Banyan designates to present and demonstrate
Microsoft technologies and interoperability and migration capabilities
to Clients.
1.3 "Banyan Microsoft Practice" is defined as the part of Banyan's
professional and support services organizations that provide Microsoft
Enterprise Solutions Platform-centric Enterprise Services to Clients.
The Banyan Microsoft Practice will be staffed by consulting and
management personnel in the field as well as staff at the corporate
headquarters who are focused on the design, deployment, and management
of Microsoft products at Client sites.
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1.4 "Banyan Microsoft Practice Revenue" is defined as the total of all
Enterprise Services revenues generated by Microsoft funded Banyan MCSE
and MCSD certified consultants in the Go-to-Market Focus Areas
recorded by Banyan during each Royalty Period. It is an auditable
figure included as part of Banyan's standard reporting and is computed
in accordance with generally accepted accounting principles
consistently applied.
1.5 "BANYAN SERVICES REVENUE" is defined as Banyan services revenues that
are earned as a result of the billable activity of employees of the
Banyan professional services business and that are broadly supported
by the joint development and marketing activities of the Banyan and
Microsoft alliance.
1.6 "BANYAN VINES/STREETTALK TO MICROSOFT NT SERVER INTEGRATION AND
MIGRATION MARKET" is defined as the business opportunity that is
represented by providing interoperability and migration tools and
Enterprise Services to Clients in the Banyan installed base that
currently use Banyan's VINES and StreetTalk for Windows NT client,
server, and management products. This customer group forms a market
that, in aggregate, is interested in both improving the level of
interoperability between Banyan's VINES and StreetTalk for Windows NT
networking operating system platform and Microsoft Windows NT Server
(and, as available Windows 2000 Server), as well as moving users to
the Microsoft Windows NT Server (and, as available, Windows 2000
Server).
1.7 "BANYAN WEB SITE" is defined as the world wide web site currently
located at xxxx://xxx.xxxxxx.xxx and any successor site that is
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Banyan's primary corporate site.
1.8 "CLIENTS" is defined as existing and prospective customers of Banyan
and/or Microsoft.
1.9 "ENTERPRISE CLASS" is defined as attributes heretofore associated with
mainframe, business critical computing, including scalability,
availability, system and network management, security, very large
database support, transaction processing support, interoperability,
and 7 x 24 support services.
1.10 "ENTERPRISE MARKET" is defined to include organizations with greater
than 1,000 personal computers ("PCs").
1.11 "ENTERPRISE SERVICES" is defined as business process redesign, IT
strategy consulting, analysis, architecture/design, planning,
development, infrastructure installation, solutions deployment,
systems integration, operation, support, training and lifecycle
management services.
1.12 "GO-TO-MARKET FOCUS AREAS" is defined as Network/Directory Services
WAN Internetworking Market; Internet/Intranet Infrastructure and
Applications Market; Banyan Vines/StreetTalk to NT Server Integration
and Migration Market; Integrated Messaging Infrastructure Market;
Banyan BeyondMail to Exchange Integration and Migration Market.
1.13 "INTEGRATED MESSAGING INFRASTRUCTURE MARKET" is defined as the subset
of the information technology product and services market for
electronic mail, fax, voice mail, groupware, and other communication
infrastructure and applications.
1.14 "INTERNET/INTRANET INFRASTRUCTURE AND APPLICATIONS MARKET" is defined
as the subset of the information technology product and services
market for Web (Internet, Intranet and Extranet) infrastructure as
well as n-tier Web applications using server, browser, and various
middleware technologies that support highly scalable, data-driven Web
sites.
1.15 "JOINT BOARD" is defined as the group of an equal number of designated
Banyan executives and Microsoft executives and other appropriate
personnel responsible for the strategic direction of the Relationship,
evaluation of mutually agreed metrics and escalation of issues and
opportunities.
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
1.16 "MCSD" is defined as a Microsoft Certified Solution Developer.
1.17 "MCSE" is defined as a Microsoft Certified Systems Engineer.
1.18 "MICROSOFT ENTERPRISE SOLUTIONS PLATFORM" is defined as Microsoft NT
Server, Exchange Server, SQL Server, SMS Server and Internet
Information Server (as separate products and collectively as Microsoft
BackOffice); complementary BackOffice products; Microsoft SNA Server
and Microsoft Proxy Server; Microsoft Site Server, Microsoft
Commercial Internet Services (MCIS); 32-bit Windows and Microsoft
Office; Windows CE; Internet Explorer; Microsoft Transaction Server;
Microsoft Message Queue Server; Microsoft Wolfpack clustering
technology; Microsoft's visual development tools Visual Basic, Visual
C++, Visual J++ and Visual Interdev (as separate products and
collectively as Microsoft Visual Studio); Windows Distributed interNet
Applications (DNA) and Component Object Model (COM, DCOM and COM+)
architectures; and, as mutually agreed, successor products and
technology focused on the development, deployment and management of
business solutions in the Enterprise Market.
1.19 "MICROSOFT WEB SITE" means the world wide web site currently located
at xxxx://xxx.xxxxxxxxx.xxx and any successor site that is Microsoft's
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primary corporate site.
1.20 "NETWORK/DIRECTORY SERVICES WAN INTERNETWORKING MARKET" is defined as
the subset of the information technology product and services market
for LAN, WAN, internetworking, routing, directory, remote access,
virtual private network (VPN), communications, network management and
network security infrastructure.
1.21 "NORMAL BUSINESS HOURS" is defined as 8 a.m. to 5 p.m. local time,
Monday through Friday, excepting national holidays.
1.22 "RELATIONSHIP" means the arrangement between Banyan and Microsoft
contemplated by this Agreement.
1.23 "ROYALTY PERIODS" are defined as successive periods [**], the first
of which commences on [**].
1.24 "Royalty Rate" is defined as [**] percent. The Royalty Rate will be
applied to the Banyan Microsoft Practice Revenue (the "Projected
Revenue Base", as set forth in Exhibit A) during each Royalty Period.
However, if the cumulative realized Revenue Base is less than [**] of
the cumulative projected Revenue Base for the Royalty Period ending
[**] in Exhibit A (collectively, the "Measurement Threshold"), the
Royalty Rate thereafter will be applied to Banyan's Services Revenues
(which includes the Banyan Microsoft Practice Revenue). The
Measurement Threshold shall be subject to the following adjustments:
(a) If Banyan utilizes greater than [**] of the maximum Royalty
Reduction as defined in Section 7.3(b) by [**], the Measurement
Threshold will increase to [**];
(b) If Banyan utilizes greater than [**] of the maximum Royalty
Reduction as defined in Section 7.3(b) by [**], the Measurement
Threshold will increase to [**];
(c) The Measurement Threshold will be evaluated semi-annually for all
Royalty Periods subsequent to [**].
1.25 "ROYALTY REDUCTION" is defined in Section 7.3.
1.26 "ROYALTY TERM" is defined as the period of time commencing on [**]
and ending on the date on which Banyan has paid Microsoft aggregate
royalties equal to the Total Royalty Payment.
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
1.27 "Target Clients" is defined as the mutually agreed list of 50 to 100
clients that have a minimum of 1,000 Banyan VINES/StreetTalk and/or
BeyondMail seats, and be managed by both the Banyan sales force and
the Microsoft Enterprise Customer Unit team. The list will be
reviewed semi-annually and can be updated on as as-needed basis, and
will include (a) Headquarter location, (b) the number of Banyan
VINES/StreetTalk and/or BeyondMail seats installed.
1.28 "TERM" means the three-year period of time commencing on the
Effective Date and ending three years thereafter.
1.29 "TOTAL ROYALTY PAYMENT" is defined as the sum of [**], subject to the
Royalty Reduction pursuant to Section 7.3.
2. Joint Banyan and Microsoft Obligations
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2.1 GO-TO-MARKET COOPERATION. Microsoft and Banyan will cooperate in
collective activities in connection with marketing, public relations,
sales/services engagement and client engagement ("Go to Market") in
the delivery of Microsoft Enterprise Solution Platform products and
related Enterprise Services offerings to the Enterprise Market in the
Go-to-Market Focus Areas.
2.2 ALLIANCE PLAN. Within the ninety (90) day period immediately
following the Effective Date, the Parties will mutually develop and
document an alliance plan detailing the Target Clients and specific
initiatives supporting each of the Go-to-Market Focus Areas, including
a spending plan for the Marketing Fund and any additional funds (the
"Alliance Plan"). The Alliance Plan will also include, without
limitation, geographic priorities, objectives, metrics,
roles/responsibilities, resource and infrastructure requirements,
critical success factors and risks. All marketing expenditures shall
be made substantially in accordance with the Alliance Plan. Banyan
and Microsoft will each identify and assign at least one individual
responsible for leading the development of the Alliance Plan. Such
individuals shall also be responsible for implementation of the
Alliance Plan throughout the Term. No later than the twelfth month of
each of year one and year two of the Term, the Joint Board will engage
in a formal evaluation of the Go-to-Market Focus Areas, the Marketing
Fund and the Alliance Plan. Following this annual evaluation, and
upon mutual agreement of the Parties, funding may be increased beyond
the minimum allocation identified above.
2.3 MARKETING. Banyan and Microsoft will work together in external
marketing efforts that may include, but not necessarily be limited to,
press releases, advertising, use of logos, white papers, customer
references, case studies, demand generation seminars, industry
conferences and thought leadership initiatives.
2.4 MARKETING FUND. Banyan will establish a marketing fund to support
alliance objectives including both marketing and Client-oriented sales
engagement initiatives (the "Marketing Fund"). The Parties agree that
a minimum of [**] will be allocated and spent by Banyan during the
Term.
2.5 MARKETING PLAN. Within the ninety (90) day period immediately
following the Effective Date, the Parties will mutually develop and
document a joint marketing plan, including how the Marketing Fund and
any additional funds will be spent (the "Marketing Plan"). All such
expenditures shall be made substantially in accordance with the
Marketing Plan. Banyan and Microsoft will each identify and assign at
least one individual responsible for leading the development of the
Marketing Plan. Such individuals shall also be responsible for
implementation of the Marketing Plan throughout the Term. No later
than the twelfth month of each of year one and year two of the Term,
the Parties will engage in a formal evaluation of the Go-to-Market
Focus Areas, the Marketing Fund and the Marketing Plan. Following this
annual evaluation, and upon mutual agreement of the Parties, funding
may be increased beyond the minimum allocation identified above.
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2.6 Press Releases. Banyan and Microsoft will publicize the Relationship
throughout the Term. The Parties shall prepare press releases and
other public announcements, which identify specific Enterprise
Services, Go to Market cooperation and include reciprocal endorsement.
Neither Party will make or release the initial and subsequent press
releases or any other public announcement without the prior written
approval of the other Party as to the content, form and timing of such
press release or announcements, which approval shall not be
unreasonably withheld. The Parties shall develop a description of the
Relationship that may be used without further approval of the other in
any press release of either Party that references the Relationship and
the Go-To-Market Focus Areas.
2.7 SENIOR MANAGEMENT PARTICIPATION. A senior management executive from
each of the Parties will participate in and endorse the joint
announcement of the Relationship by issuing a statement within 30 days
immediately following the Effective Date, as well as in other selected
and mutually agreed events from time to time.
2.8 PUBLIC RELATIONS OPPORTUNITIES. The Parties will exercise
commercially reasonable efforts to take advantage of public relations
opportunities that are expected to occur throughout the Term that
increase the likelihood of Banyan services and Microsoft products
being purchased by Clients in the Enterprise Market. Examples of
these types of opportunities include, without limitation, those that
(a) confirm the quality of Banyan Enterprise Services focused on the
Microsoft Enterprise Solutions Platform, (b) endorse the momentum
behind the Microsoft Enterprise Solutions Platform, (c) support the
implementation of line-of-business solutions on the Microsoft
Enterprise Solutions Platform, (d) accompany the release of Microsoft
product updates including Windows 2000 Server, Microsoft Exchange and
Microsoft Site Server and (e) accompany the release of new Banyan
Enterprise Services offerings. On mutual written agreement, the
Parties will participate together in industry events relevant to the
Relationship.
2.9 WEBSITE CONTENT. During the Term, the Parties agree to publish
marketing content, as each Party deems appropriate, regarding the
Relationship on each Party's external (Internet) and internal
(Intranet) web sites, subject to the approval process set forth in
Section 2.6.
2.10 MICROSOFT AND BANYAN LINK LOGOS. Banyan shall have the right to use
the Microsoft link logo found at xxxx://xxx.xxxxxxxxx.xxx/xxxx/xxxxxx
or any successor thereof, on the Banyan Web Site, subject to the
Microsoft guidelines for use of such logo ("Microsoft Logo
Guidelines") as may be promulgated by Microsoft from time to time, the
current version of which is attached hereto as Exhibit B and
incorporated herein by this reference. Microsoft shall have the right
to use the Banyan link logo found at xxxx://xxx.xxxxxx.xxx or any
successor thereof on the Microsoft Web Site subject to any applicable
Banyan guidelines for use of such logo ("Banyan Logo Guidelines")
provided by Banyan from time to time.
2.11 LINK TO WEB SITES. Microsoft agrees to provide a link from the
Microsoft Web Site to the Banyan Web Site using the Banyan logo
subject to the terms of the Banyan Logo Guidelines. Banyan agrees to
provide a link from the Banyan Web Site to the Microsoft Web Site
using the Microsoft logo subject to the terms of the Microsoft Logo
Guidelines.
2.12 SALES ENGAGEMENT. During the Term, the Parties will cooperatively
engage each other's consulting/field sales organizations in an effort
to educate sales, consulting and marketing management in support of
the Relationship. Activities will include, without limitation,
creating virtual sales and services teams to pursue specific Client
opportunities, exchanging organizational charts and key contact lists,
sponsoring joint seminars and briefings, proactively managing a
cooperative sales funnel of high priority product and services
opportunities, and development of field engagement recommendations and
processes.
2.13 ESCALATION PROCESS. Within the ninety (90) day period immediately
following the Effective Date, the parties will establish an escalation
process to facilitate resolution of critical Client situations in a
timely manner.
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2.14 Banyan Consultation Process. Within the ninety (90) day period
immediately following the Effective Date, the Parties will have
documented an agreed consultation process that will afford Microsoft a
comprehensive, early opportunity to provide input to Banyan personnel
on the benefits of the Microsoft Enterprise Solutions Platform.
2.15 MICROSOFT CONSULTATION PROCESS. Within the ninety (90) day period
immediately following the Effective Date, the Parties will have
documented an agreed consultation process that will afford Banyan a
comprehensive, early opportunity to provide input to Microsoft
personnel on the benefits of Banyan's product and Enterprise Services
offerings.
2.16 PARTICIPATION IN INTERNALLY SPONSORED EVENTS. The Parties will
participate in each other's internally sponsored global and industry-
specific events relevant to the Relationship, subject to terms and
conditions mutually agreed upon in writing. Microsoft will make
opportunities available to Banyan at Microsoft's annual Global Sales
Summit ("MGS") and other appropriate Microsoft events to participate,
sponsor, and present Banyan's services and solutions as they relate to
the Relationship. Banyan will make opportunities available to
Microsoft at Banyan's annual sales meeting and other appropriate
Banyan events to participate, sponsor, and present Microsoft's
products and solution initiatives as they relate to the Relationship.
2.17 SERVICE GUIDES. As appropriate and on mutually agreed terms, Banyan
and Microsoft will work cooperatively to develop Microsoft service
guides and technology consulting blueprints.
2.18 POSITIONING. The Parties will agree upon positioning regarding the
suitability of the Microsoft Enterprise Solutions Platform
(collectively or as separate products) to address the requirements of
the Enterprise Class environment. Suitability considerations may
include, but are not limited to, throughput, availability,
scalability, interoperability, reliability and manageability. The
initial positioning will be developed within the ninety (90) day
period immediately following the Effective Date and will be revised as
appropriate every six months throughout the Term. Participants in
such development efforts will include Microsoft product group and
Microsoft Consulting Services ("MCS") personnel along with
representatives from Banyan. The positioning will be documented in a
manner suitable for presentation and distribution to the Parties'
product groups, sales and consulting personnel, clients, and, as
appropriate, press and analysts.
2.19 OTHER INITIATIVES. The Parties will develop and implement integrated
solution initiatives relevant to the Go-to-Market Focus Areas.
Specifically, the Parties are expected to collaborate on Microsoft's
Windows Distributed interNetwork Architecture ("DNA"), Microsoft's
Digital Nervous System initiatives, messaging
interoperability/migration, enterprise network and directory services
interoperability/migration, and the use of DNA products and
technologies to design and build dynamic, scalable, data-driven Web
applications.
2.20 CENTER VISITATION. The Parties shall encourage any Client that is
visiting either Banyan's Customer Solution Center(s) or Microsoft's
Executive Briefing Center to visit both centers, subject to execution
of appropriate non-disclosure agreements and mutual agreement by the
Parties.
2.21 COOPERATIVE USE OF FACILITIES. Each Party shall make its facilities
(Microsoft's Executive Briefing Center and Banyan's Customer Solution
Center(s)) available to the other Party's personnel according to an
agreed upon predetermined process, to use for, among other purposes,
mock-ups, staging, prototyping, demonstrations and related activities.
Access to such personnel shall be allowed during Normal Business
Hours. Either Party's personnel's use of such facilities shall be
subject to availability and prior written notice by the requesting
Party and approval by the other Party. Each Party shall make all
mutually agreed-upon equipment and utilities available to the other
Party's personnel, so long as such use does not conflict with ongoing
projects.
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
2.22 Metrics. The Parties have developed and documented a set of mutually
defined objectives and metrics to be used to evaluate the success of
the Relationship ("Metrics"). Metrics include, but are not limited
to, the number of Banyan MCSE and MCSD certified consultants, Banyan
Microsoft Practice Revenue, the number of Microsoft Windows NT Server
(and, as available, Windows 2000 Server) and Microsoft Exchange Seats
migrated in Target Clients, the number and results of Client-focused
demand generation events, the number and market acceptance of Banyan's
packaged or replicable Enterprise Services offerings focused on the
Microsoft Enterprise Solutions Platform and, as an acknowledged
priority for Parties, the number of Client references and case
studies.
2.23 JOINT BOARD. The Joint Board will meet at least once per year during
the Term to evaluate the implementation of the Alliance Plan and
discuss appropriate methods to increase the overall value and
performance of the Relationship, [**] the Go-to-Market Focus Areas.
2.24 PROCESS TO REVIEW POTENTIAL BARRIERS. In the event that Banyan
personnel providing Enterprise Services in connection with the Go-to-
Market Focus Areas determine that commercial or technical issues would
appear to prevent a solution development or deployment on the
Microsoft Enterprise Solutions Platform, Banyan will provide Microsoft
with an opportunity to involve, as appropriate, its MCS personnel and
relevant Microsoft product groups for consultation with Banyan
personnel to evaluate the potential barriers and how they may be
resolved. Banyan will exercise commercially reasonable efforts to
consider and implement Microsoft's written response. Microsoft agrees
to coordinate its consultation process with Banyan personnel so as not
to interfere with or delay the Customer's project schedules. Banyan
shall maintain the single point of contact with the Customer and shall
have sole and final responsibility for determining and advising the
Customer on the appropriateness of the Microsoft Enterprise Solutions
Platform in conjunction with an Enterprise Services engagement.
2.25 REFERENCES. Within the ninety (90) day period immediately following
the Effective Date, the Parties will define a process of collaborative
work on securing external and internal Client references to promote
joint solutions wins in the Go-to-Market Focus Areas. The Parties
will agree upon goals for the number and timeframes of references for
each Go-to-Market Focus Area. Banyan shall exercise commercially
reasonable efforts to complete the reference identification process
for each Target Client to ensure that a maximum number of references
are secured.
3. MICROSOFT OBLIGATIONS
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3.1 ENDORSEMENT. Microsoft agrees to publicly and internally endorse
Banyan as a Microsoft alliance partner with a cooperative and
worldwide focus on the Go-to-Market Focus Areas.
3.2 TRAINING AND CERTIFICATION FUNDING. Microsoft will provide funding to
Banyan to partially offset the costs associated with training,
certification and the development of competency with respect to the
Microsoft Enterprise Solutions Platform among Banyan's consulting
personnel as set forth in Section 6.1.
3.3 TRAINING SUPPORT. Microsoft will exercise commercially reasonable
efforts to notify Banyan personnel of key Microsoft-sponsored
technical training events such as TechEd, Fusion, Microsoft Technical
Briefings, and the Professional Developer's Conference and other
Microsoft sponsored technical training events. In addition, Microsoft
will exercise commercially reasonable efforts to make a reasonable
number of spaces available to Banyan personnel at such training
events. Banyan's access to such training events shall be upon
substantially the same terms and conditions as they are made available
to other participants, unless otherwise agreed to by the Parties in
writing. In addition, Microsoft will exercise commercially reasonable
efforts to identify specialized training opportunities made available
by individual products groups within Microsoft to which other network
integrators and alliance partners are invited, for the purpose of
previewing and providing feedback on upgraded Microsoft products,
services or technology strategies.
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Microsoft will work with the appropriate personnel within Microsoft to
try to make such product-group events available to Banyan personnel.
3.4 CONSULTING SERVICES.
(A) MCS PARTNER PROGRAM MANAGER(S). During the Term, Microsoft will
make available to Banyan on a for-fee basis, one full-time
equivalent MCS Partner Program Manager ("PPM") to assist in
activities contemplated by this Agreement, pursuant to the terms
and conditions of the Microsoft Master Services Agreement to be
entered into in accordance with Section 4.8. The current price
for a full-time MCS PPM is approximately [**] per year. Banyan
may, at its sole discretion, elect to engage the services of one
PPM on a full-time basis, or to engage an equivalent level of
services of MCS consulting resources on an appropriate basis to
fulfill specific work orders entered into by Banyan under the
Master Services Agreement.
MCS PPMs perform the following types of services: (i) partner
and customer liaison and advocate; (ii) enterprise planning;
(iii) enterprise assessments; (iv) solution architectures and
design; (v) pilot systems; (vi) migration planning; (vi) legacy
application disposition planning; (vii) disaster recovery
planning; (viii) training programs and related knowledge transfer
activities; (ix) planning and developing support process and
infrastructure; (x) network-planning and design; (xi) project
management/quality assurance; (xii) organizational development;
(xiii) knowledge transfer; (xiv) service readiness; and (xv)
facilitate communication with Microsoft product groups, Premier
support organization and field sales/consulting personnel.
(B) DISCOUNT FOR ADDITIONAL SERVICES. Microsoft will provide Banyan
with a minimum [**] discount off of standard (non Partner) MCS
consulting service rates for any additional MCS resources that
Banyan may purchase pursuant to this Agreement.
3.5 DEMONSTRATION SOFTWARE. Microsoft hereby grants Banyan a non-
exclusive, royalty-free, non-assignable, non-transferable license to
reproduce for internal use only at the Banyan Customer Solution
Center(s) up to the number of copies of each Software Product listed
in Exhibit C, together with a non-exclusive, royalty-free, non-
assignable, non-transferable license to reproduce up to the number of
Upgrades and Successor Products corresponding to the number of copies
of original version of each Software Product identified in Exhibit C,
on the following terms and conditions:
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(A) UPGRADES/SUCCESSOR PRODUCTS. Original copies of the Software
Products must be removed from computers on which the Upgrades and
Successor Products are installed.
(B) LICENSE RESTRICTIONS. Banyan's use of the Software Products,
Upgrades and Successor Products is subject to the following
restrictions: (a) they shall be used exclusively for internal
use at the Banyan Customer Solution Center(s); (b) each product
is provided for use pursuant to the standard terms of the end
user license agreement ""("XXXX") enclosed with the particular
product (except that such licenses may not be transferred or
assigned despite any XXXX provisions to the contrary) the terms
and conditions of which are incorporated herein by this
reference; and (c) all license rights granted under this Section
3.6 shall terminate immediately upon the earlier of expiration or
termination of this Agreement; provided, however, that Banyan
shall have the right to continue to use such licenses after
expiration or termination of this Agreement for so long as Banyan
purchases Upgrade Advantage for such licenses at the end of the
Term for a minimum period of two years.
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(c) AUDIT RIGHTS. Microsoft shall have the right to review and audit
once each year the use by the Banyan sites of such Software
Products, Upgrades and Successor Products upon reasonable notice.
Microsoft agrees to conduct the review in a manner so as not to
unreasonably interfere with Banyan's normal business operations.
3.6 TECHNOLOGY DISCLOSURE. Microsoft shall, as appropriate and for
products included within the Microsoft Enterprise Solutions Platform
and for other products Microsoft and Banyan mutually agree are
important to the Parties' implementation of this Agreement, on a semi-
annual basis disclose to Banyan future product and technology
directions. As available, Microsoft will provide to Banyan beta
releases for products included within the Microsoft Enterprise
Solutions Platform and for other products Microsoft and Banyan
mutually agree are important to the Parties' implementation of this
Agreement. Banyan acknowledges and agrees that Microsoft's
obligations under this Section 3.6 are subject to Microsoft's sole
determination that disclosure of such information and/or providing
such beta releases is appropriate.
3.7 BUSINESS DEVELOPMENT EXECUTIVE. Microsoft will provide, at no charge
to Banyan, a designated Business Development Executive whose purpose
will be (a) to serve on the Joint Board, (b) to act as a contact and
liaison between the Parties in supporting the Relationship, and (c)
to facilitate joint sales activities and provide assistance on
worldwide marketing initiatives.
3.8 PARTICIPATION IN EAP AND RDP. Microsoft agrees to include Banyan in
appropriate Early Adopter Programs, Rapid Deployment Programs and
similar or successor programs aimed at mapping alliance partners to
Microsoft Client opportunity, ensuring comprehensive and early
knowledge transfer and to accelerate the momentum of new product and
services offerings.
3.9 MICROSOFT FACILITIES ACCESS. As appropriate and subject to Microsoft
terms and conditions for such access, Microsoft will grant a limited
number of Banyan personnel access to the relevant facilities at
Microsoft's Xxxxxxx campus. Such Banyan personnel will be housed at a
Banyan facility, and not at Microsoft's facilities.
3.10 CONSULTING SUBCONTRACTING. Microsoft will make commercially
reasonable efforts to work with Banyan to develop and promote a
program to engage, either through leads or MCS sub-contract, Banyan
MCSE/MCSD certified consultants at Microsoft consulting customers.
Such sub-contract engagements, if any, shall be undertaken pursuant to
the standard MCS subcontract terms and conditions in accordance with
statements of work and pricing to be mutually agreed between the
parties.
3.11 BOOTCAMP PARTICIPATION. Microsoft will make commercially reasonable
efforts to include Banyan in appropriate future program offerings
specific to MCS Technology Bootcamps and Internships.
3.12 PRODUCT GROUP RELATIONSHIPS. As appropriate, Microsoft agrees to
facilitate relationships, communication and direct knowledge transfer
between Microsoft product groups and Banyan personnel.
3.13 INTERNAL USE. In order to support Banyan's adoption of the Microsoft
Enterprise Solutions Platform for internal use, Microsoft will grant
Banyan certain Microsoft software licenses as set forth in Exhibit D,
subject to the execution of and under the terms set forth in the
Microsoft Select 4.0 Master Agreement, the Amendment No. 1 to
Microsoft Select 4.0 Master Agreement, and the purchase of
upgrade/maintenance rights in the Microsoft Select 4.0 Enterprise
Enrollment Agreement, to be executed by Banyan pursuant to Section
4.10 (collectively, the "Enterprise License Agreement").
9
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
4. BANYAN OBLIGATIONS
------------------
4.1 PUBLIC ENDORSEMENT. Banyan will publicly and internally endorse the
Microsoft Enterprise Solutions Platform as the preferred Platform for
delivery of Enterprise Services in the Go-to-Market Focus Areas.
Additionally, Banyan will publicly and internally endorse the
Microsoft Enterprise Solutions Platform (with explicit reference to
Microsoft Windows NT Server, Microsoft Internet Information Server,
Microsoft Windows 2000 Server, Microsoft Active Directory, Microsoft
Exchange Server, Microsoft Outlook and Microsoft Site Server) as the
recommended Platform for transition from Banyan's VINES and StreetTalk
for Windows NT network operating system platform and Banyan's
BeyondMail and Intelligent Messaging client and server products.
4.2 MCSES & MCSDS. Banyan will cause a minimum of 500 employees to be
certified as MCSEs or MCSDs during the Term. This level will be
aggressively pursued with a commitment to achieve an incremental
minimum of [**] MCSEs and MCSDs by [**], an incremental minimum of
[**] additional MCSEs and MCSDs in [**] (for a cumulative total of
[**] MCSEs and MCSDs), and an incremental minimum of [**] additional
MCSEs and MCSDs in [**] (for a cumulative total of 500 MCSEs and
MCSDs) of the Term. Banyan employees certified as MCSEs or MCSDs as
of the Effective Date and new employees hired after the Effective Date
with previously earned MCSE or MCSE certification shall not count
toward fulfillment of these minimums. Should a Banyan employee whose
certification has been previously counted according to the
requirements of this Section no longer remain employed by Banyan, such
event shall not reduce the calculation of the number of certifications
Banyan's employees have achieved toward fulfillment of these
requirements. Banyan shall report its achievements on MCSE/MCSD
certifications, including specific tests passed and the location of
MCSE/MCSD certified consultants by state and country twice per
calendar year during the Term, no later than each June 30 and December
31.
4.3 CUSTOMER SOLUTION CENTER(S). Throughout the Term, and where
applicable to meet Banyan's business needs, Banyan will staff, equip
and operate one or more Banyan Customer Solution Center(s). Initial
locations may include but not limited to a location in Westboro,
Massachusetts. Banyan shall be responsible for staffing and all other
day-to-day aspects, costs and effects of the Customer Solution
Center(s). At each such location, an appropriate set of hardware,
software, and marketing materials shall be available to demonstrate
the Banyan product and Enterprise Services capabilities that support
Banyan's alliance with Microsoft. The centers will include, without
limitation, facilities to:
(a) Develop, deliver and support solutions based on the Microsoft
Enterprise Solutions Platform for the Go-to-Market Focus Areas.
(b) Demonstrate the Enterprise Class attributes and business value of
the Microsoft Enterprise Solutions Platform as a basis for the
Go-to-Market Focus Area solutions.
(c) Provide an environment for formal training of both Banyan and
Client personnel as well as less formal knowledge transfer.
(d) Promote interoperability and migration between Microsoft Windows
NT Server and Banyan VINES/StreetTalk, Novell Netware, Unix and
other networking and directory services environments.
(e) Promote interoperability and migration between Microsoft Exchange
and Banyan BeyondMail, Lotus Notes, Microsoft Mail, Lotus ccMail,
Novell Groupwise and other messaging and groupware environments.
(f) Perform stress testing, performance evaluation and scalability.
(g) Client project developments.
10
4.4 JOINT USE OF SOLUTION CENTERS. Given appropriate notice, Banyan will
exercise commercially reasonable efforts to make the Customer Solution
Center(s) available to Microsoft personnel for the purpose of
demonstrating solutions capabilities on the Microsoft Enterprise
Solutions Platform.
4.5 ADOPTION OF MICROSOFT ENTERPRISE SOLUTIONS PLATFORM. Banyan will
explicitly and unambiguously lead with the Microsoft Enterprise
Solutions Platform in the Go-to-Market Focus Areas. Banyan will
develop and deliver to Clients a comprehensive portfolio of Enterprise
Services targeting the Go-to-Market Focus Areas. Specific commitments
include:
(a) Banyan will develop and deliver to market packaged and replicable
Exchange interoperability and migration services including a
specific set of capabilities oriented to Banyan's BeyondMail
base.
(b) Banyan will develop and deliver to market packaged and replicable
Windows NT Server and Windows 2000 Server interoperability and
migration services including a specific set of capabilities
oriented to Banyan VINES networks and StreetTalk directories.
(c) Banyan will develop and deliver to market packaged and replicable
Microsoft Active Directory planning, architecture, design and
implementation and application integration services.
(d) Banyan will develop and deliver to market packaged and replicable
Microsoft Enterprise Solutions Platform based network operation
services including help desk, network monitoring, troubleshooting
and management.
(e) Banyan will acquire, enhance, or develop Exchange
coexistence/migration tools including: Intelligent Messaging
mailbox migration tools; StreetTalk to Windows NT XXX/Exchange
Directory/Active Directory synchronization tools; Banyan
Intelligent Messaging to Exchange mail connector that are built
using Exchange tools and wizards; and BeyondMail to Outlook
address book migration tools.
(f) Banyan will acquire, enhance, or develop Active Directory
migration tools including: StreetTalk to AD migration wizard,
including capability to move file systems and print services
along with user, groups, lists and directory attributes; and
Active Directory synchronization-StreetTalk synchronization tools
that will allow for coexistence during large network migration.
(g) Banyan will acquire, enhance, or develop additional products that
facilitate the interoperability of Banyan and Microsoft products
including: StreetTalk for Windows NT LDAP service enhancements to
ensure compatibility with Active Directory; and IMS server
product updates to ensure compatibility of Outlook 98/2000
through IMAP in order to support network migrations.
4.6 REPORTING DATA. Banyan will provide Microsoft, on a semi-annual
basis, the Target Client Seat Migration Report set forth in Exhibit E.
This report will detail Microsoft products sold or influenced as
components of Banyan's Microsoft Practice engagements.
4.7 BUSINESS DEVELOPMENT EXECUTIVE. Banyan will provide, at no charge to
Microsoft, a designated Business Development Executive whose purpose
will be (a) to serve on the Joint Board, (b) to act as a contact and
liaison between the Parties in supporting the Relationship, and (c) to
facilitate joint sales activities and provide assistance on worldwide
marketing initiatives.
11
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
4.8 MASTER SERVICES AGREEMENT. Banyan is executing a Microsoft Master
Services Agreement simultaneously with the execution of this
Agreement, providing for the purchase the following services:
(a) Banyan shall purchase Premier Support services to support
Banyan's internal use of Microsoft products and to support
solutions development and other Client-related activities in the
Go-to-Market Focus Areas and other agreed areas; and
(b) optionally, at Banyan's sole discretion, Banyan may purchase
Consulting Services for the PPM services referenced in Section
3.4(c) (or related full-time equivalent services).
4.9 INTERNAL DEPLOYMENT OF MICROSOFT PRODUCTS. Banyan will publicly
announce its intent to use, globally deploy and maintain Microsoft
products through the Term. Banyan will globally deploy and maintain
Windows NT Server, Microsoft Exchange, Microsoft Site Server,
Microsoft Windows 9X and/or Windows NT Workstation, Microsoft Office
and Microsoft Internet Explorer as internal standards. Banyan will
deploy Windows 9X, Windows 98 or Windows NT Workstation, Office 2000
and a BackOffice client-access-license to [**] of Banyan user PCs
within [**] from the Effective Date. Banyan will implement an
Exchange Server based messaging and groupware infrastructure deployed
to [**] of Banyan users within [**] from the Effective Date. Banyan
will implement a Windows 2000 Server based networking, print & file,
communications and directory infrastructure deployed to [**] of Banyan
users [**] following commercial availability and to [**] of Banyan
users [**] following commercial availability. In addition, Banyan
agrees to host xxxx://xxx.xxxxxx.xxx/ and successor sites on Microsoft
----------------------
Site Server and any internal sales force automation applications on a
Windows NT Server/SQL Server Platform.
4.10 ENTERPRISE LICENSE AGREEMENT. Within sixty (60) days of the execution
of this Agreement, Banyan shall execute the Enterprise License
Agreement to provide for the terms, conditions and maintenance for the
software licenses provided in Section 3.13 above.
4.11 NON-EXCLUSIVITY. This Agreement shall not preclude Banyan from
offering, promoting and developing other platforms, products and
Enterprise Services offerings that compete with any identified
Microsoft products where it considers that such other platforms or
products better meet the needs of its Clients.
5. NO TRADEMARK LICENSE. Nothing in this Agreement or its performance shall
--------------------
grant either Party any right, title, interest, or license in or to the
other's names, logos, logotypes, trade dress, designs, or other trademarks.
Banyan shall only use the Microsoft xxxx depicted on Exhibit F hereto
during the Term of this Agreement according to the terms, conditions and
specifications set forth or referenced in Exhibit F.
6. DISTRIBUTION AND USE OF MICROSOFT FEES
---------------------------------------
6.1 MICROSOFT FEES. Microsoft shall pay the following amounts to provide
for joint marketing, intellectual property, services engagement, and
training and certification initiatives in an aggregate amount of Ten
Million and No/100 Dollars (US$10,000,000.00) in three annual
installments as summarized below.
PAYMENT DATE AMOUNT
---------------------------------------------------------------
Effective Date $5,900,000
---------------------------------------------------------------
December 31, 1999: $2,500,000
---------------------------------------------------------------
December 31, 2000: $1,600,000
---------------------------------------------------------------
12
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
As a condition of Microsoft disbursing these funds on December 31,
1999 and December 31, 2000, Banyan must have demonstrated attainment
of its cumulative certification commitments per Section 4.2 above,
attainment of [**] of Banyan Microsoft Practice Revenue forecast per
Exhibit A and Royalty Payments in accordance with Section 7 below.
These payments are allocated for the activities set forth in the
following table:
MICROSOFT PRACTICE SUMMARY
------------------------------------------------------------------------------------------------
1999 2000 2001 TOTAL/AVERAGE
------------------------------------------------------------------------------------------------
Training
------------------------------------------------------------------------------------------------
# of MCSE/Ds [**] [**] [**] 500
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Total Training Advance [**] [**] [**] [**]
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Marketing Programs [**] [**] [**] [**]
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Intellectual Property -
Migration Tools, Methods, etc. [**] [**] [**] [**]
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Total MS Advance $5,900,000 $2,500,000 $1,600,000 $10,000,000
------------------------------------------------------------------------------------------------
6.2 PAYMENTS. The first payment is due upon execution and each subsequent
payment provided for under Section 6.1 shall be made within 30 days
after the date on which such payment is due by wire transfer (in
accordance with Banyan's written instructions) of immediately
available funds to the following account:
Beneficiary Name: Banyan Systems Incorporated
Account Number: [**]
Beneficiary Bank: State Street Bank & Trust, 000 Xxxxxxxx Xx, Xxxxxx
XX 00000
SWIFT Code: [**]
ABA#: [**]
or to a different account specified by Banyan's by written notice to
Microsoft at least fifteen business days prior to the date such
payment is due.
7. BANYAN ROYALTY PAYMENTS.
-----------------------
7.1 ROYALTY PAYMENTS. On or prior to each July 31 and January 31 during
the Royalty Term commencing on [**], Banyan shall make a Royalty
Payment as described in Section 7.2 to Microsoft with respect to the
most recently ended Royalty Period by wire transfer (in accordance
with Microsoft's written instructions) of immediately available funds
to the following account:
Beneficiary: Microsoft Corporation
Account #: [**]
Bank: NationsBank of Texas, N.A.
Dallas, Texas
ABA: [**]
SWIFT: [**]
or to a different account specified by Microsoft by written notice to
Banyan at least 15 business days prior to the date such payment is due
(the "Microsoft Account").
13
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
7.2 ROYALTY CALCULATION. During the Royalty Term, Banyan shall pay a
royalty (the "Royalty Payment") on the Banyan Microsoft Practice
Revenue to Microsoft at the Royalty Rate during each Royalty Period.
Banyan shall have no further obligation to make royalty payments once
it has made such payments that are equal in the aggregate to the Total
Royalty Payment.
7.3 ROYALTY REDUCTION. The Total Royalty Payment shall be reduced by the
sum of [**],[**] and [**] in year 1, year 2 and year 3 respectively,
for each Target Clients' VINES/StreetTalk or BeyondMail seat in excess
of the cumulative minimums set forth below that is migrated to
Microsoft Windows NT Server or Microsoft Exchange (the "Royalty
Reduction"), in accordance with the following table and limitations:
1999 (YEAR 1) 2000 (Year 2) 2001 (YEAR 3)
---------------------------------------------------------------------------------------------
[**] per seat [**] per seat [**] per seat
---------------------------------------------------------------------------------------------
[**] [**] [**] [**] [**]
---------------------------------------------------------------------------------------------
Royalty reduction for seats [**] in Reduction Reduction Reduction
the first [**] ([**] seats @ for for [**] for [**]
[**]/seat, [**] seats @ [**]/seat) [**]seats @ seats @ seats @
[**]/seat [**]/seat [**]/seat
---------------------------------------------------------------------------------------------
(a) The amount of Royalty Reductions for [**] migrations that are
within the limitations set forth above in which initial
deployments have been realized by [**] and are completed prior to
[**] will be included as part of the aggregate Royalty Reduction;
(b) The maximum Royalty Reduction shall in no event exceed the sum of
[**].
(c) Qualified seats will be limited to those Target Clients for which
Banyan and/or Microsoft have delivered a migration proposal
including specific details on Banyan's migration services
offerings.
(d) Qualified seats will be limited to those Target Clients for which
Banyan is actually engaged to deliver VINES/StreetTalk to Windows
NT Server and/or BeyondMail to Exchange migration services. An
engagement may be reported multiple times to account for an
increase in the number of Seats associated with the solution.
(e) Banyan will provide a semi-annual report to Microsoft summarizing
incremental seats migrated by Target Client and Microsoft
product.
(f) The aggregate Royalty Reduction amount will be calculated at the
end of each Royalty Period, [**]. The Royalty Reduction offset
will be applied to each Royalty payment until fully used. In the
event that the Royalty Reduction exceeds the Royalty Payment for
a given period, the amount that the Royalty Reduction exceeds the
Royalty Payment for that term will be carried over and credited
as a Royalty Reduction against future Royalty Payment(s).
8. ACCOUNTING.
----------
8.1 TAXES. All taxes levied on account of any payments made or owed to a
Party pursuant to this Agreement will be the sole responsibility of
such Party, including taxes levied on the income of such Party. In the
event taxes are required to be withheld on payments made under this
14
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Agreement by any U.S. (state or federal) or foreign government, the
Party making such payment may deduct such taxes from the amount owed
the other Party and pay them to the appropriate taxing authority. The
Party making such payment shall in turn promptly secure and deliver to
the other Party an official receipt for any taxes withheld. The Party
making such payments will use reasonable efforts to minimize such
taxes to the extent permissible under applicable law.
8.2 AUDIT. During the term of this Agreement and for a period of [**]
years thereafter Banyan will keep complete and accurate records of
Banyan services related to the Microsoft Enterprise Solutions Platform
and related expenditures in sufficient detail to permit Microsoft to
confirm the compliance with Banyan of its obligations under this
Agreement. Microsoft shall have the right to cause an independent
accounting firm to audit such records to confirm Banyan's compliance
with its obligations with respect to the expenditure of Microsoft-
provided funds, compliance with Banyan marketing commitments and other
obligations of Banyan under this Agreement. Such audit rights may be
exercised during Normal Business Hours upon reasonable notice.
Microsoft shall bear the full cost of such audit unless such audit
discloses a variance between actual and required expenditures greater
than three (3.0)% percent. In the event of such variance, Banyan
shall bear the full cost of such audit. The terms of this Section 8.2
shall survive for [**] years following the end of the Term.
9. NON-DISCLOSURE AGREEMENT. The Parties agree that the terms of the
------------------------
Microsoft Reciprocal Non-Disclosure Agreement executed by the parties and
dated May 28, 1998, attached hereto as Exhibit G will be deemed
incorporated herein, and that all terms and conditions of this Agreement
will be deemed Confidential Information as defined in such Non-Disclosure
Agreement. Notwithstanding the foregoing, Banyan may file this Agreement
(and any associated documents contemplated hereby) with the United States
Securities and Exchange Commission if it believes that this Agreement is a
material contract under its reporting obligations pursuant to the
Securities Exchange Act of 1934, as amended and the regulations thereunder.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS.
-----------------------------------------
10.1 BY BANYAN.
(a) Banyan represents and warrants that it has full and exclusive
right and power to enter into and perform according to the terms
of this Agreement.
(b) Banyan represents and warrants that its performance of activities
pursuant to this Agreement will not violate any agreement or
obligation between it and any third party.
(c) Banyan represents, warrants and covenants that it shall comply
with all applicable local, state and federal laws, statutes and
regulations, including specifically all laws prohibiting
harassment of any kind in the workplace and shall comply with
Microsoft's rules for its own employees while on Microsoft's
premises. Banyan assumes all responsibility for providing to its
employees and subcontractors any training that may be required to
ensure compliance with such laws and rules.
(d) Banyan shall have no right to make any other warranties or
promises on behalf of Microsoft with respect to any products or
property owned or provided to it by Microsoft pursuant to this
Agreement which are not contained in written statements or
documents accompanying that item, or the written warranty
document accompanying the Microsoft products.
10.2 BY MICROSOFT.
(a) Microsoft represents and warrants that it has full and exclusive
right and power to enter into and perform according to the terms
of this Agreement.
15
(b) Microsoft represents and warrants that its performance of
activities pursuant to this Agreement will not violate any
agreement or obligation between it and any third party.
(c) Microsoft represents, warrants and covenants that it shall comply
with all applicable local, state and federal laws, statutes and
regulations, including specifically all laws prohibiting
harassment of any kind in the workplace and shall comply with
Banyan's rules for its own employees while on Banyan's premises.
Microsoft assumes all responsibility for providing to its
employees and subcontractors any training that may be required to
ensure compliance with such laws and rules.
10.3 DISCLAIMER OF WARRANTY. THE WARRANTIES SET FORTH IN THIS SECTION 10
ARE THE ONLY WARRANTIES MADE BY THE PARTIES AND ARE IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A
PARTICULAR PURPOSE. THERE IS NO WARRANTY OF TITLE OR NON-INFRINGEMENT
WITH RESPECT TO ANY MICROSOFT PRODUCTS.
11. INDEMNIFICATION.
---------------
11.1 Banyan agrees to defend, indemnify and hold harmless Microsoft and
its successors, officers, directors, partners and employees from any
and all third-party actions, claims, demands, costs, liabilities,
expenses and damages, including reasonable attorney's fees and
expenses associated therewith or with successfully establishing the
right to indemnification hereunder, to the extent that a third-party
claim arises out of or relates to (a) any act or omission of any
Banyan employee, partner, subcontractor or agent in the Banyan
Microsoft Practice and/or Banyan's Customer Solution Center(s), or (b)
for injury to any person, including death, or damage to tangible,
whether real or personal, property in connection with the performance
of this Agreement by Banyan, its employees, agents and its
subcontractors.
11.2 Microsoft agrees to defend, indemnify and hold harmless Banyan and
its successors, officers, directors, partners and employees from any
and all third party actions, claims, demands, costs, liabilities,
expenses and damages, including reasonable attorney's fees and
expenses associated therewith or with successfully establishing the
right to indemnification hereunder, to the extent that a third party
claim arises out of or relates to injury to any person, including
death, or damage to tangible, whether real or personal, property in
connection with the performance of this Agreement by Microsoft, its
employees, agents and its subcontractors.
11.3 The indemnifying party shall indemnify the indemnified party with
respect to third-party claims as set forth above provided that: (a)
the indemnified party promptly notifies the indemnifying party in
writing of the claim; (b) the indemnifying party has sole control of
the defense and all related settlement negotiations with respect to
the claim, provided, however, that the indemnified party has the
right, but not the obligation, to participate in the defense of any
such claim or action through counsel of its own choosing at its own
expense; (c) the indemnified party cooperates fully to the extent
necessary, and executes all documents necessary for the defense of
such claim, and (d) the indemnified party has the right to approve
settlement of any claim, such approval not to be unreasonably withheld
or delayed. In the event the indemnified party and the indemnifying
party agree to settle a claim, the indemnifying party agrees not to
publicize the settlement without first obtaining the indemnified
party's written permission, which permission will not be unreasonably
withheld or delayed.
11.4 This Section 11 shall survive any termination or expiration of this
Agreement.
16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
12. LIMITATIONS OF LIABILITY.
------------------------
12.1 EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 12.2 BELOW, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL EITHER
PARTY, NOR THEIR RESPECTIVE SUPPLIERS, BE LIABLE TO THE OTHER PARTY
FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL
DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION,
OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF THIS AGREEMENT, EVEN IF A
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
12.2 This section 12 shall not apply to either party's indemnification
obligations under Section 11, any infringement of one of the party's
intellectual property rights by the other party, breaches of the
Reciprocal Non-Disclosure Agreement and/or Section 9 and any breach of
the license terms enumerated in the Enterprise License Agreement.
13. TERM AND TERMINATION; ROYALTY PAYMENTS ON TERMINATION.
------------------------------------------------------
13.1 The Term of this Agreement shall begin on the Effective Date and
shall continue in full force and effect until December 31, 2001,
unless terminated pursuant to Sections 13.2, 13.3, 13.4 or 14.4.
13.2 Either Party may terminate this Agreement immediately for cause upon
30 days' prior written notice in the event the other Party is in
material breach of this Agreement and fails to cure the default within
the 30 day period following written notice except that no "cure"
period shall apply to breaches of Section 9 of this Agreement. In the
event of a breach of Section 9, the non breaching Party shall have the
right to terminate this Agreement immediately upon notice to the
breaching Party.
13.3 This Agreement may be terminated immediately upon written notice, by
either Party in the event the other Party (a) becomes insolvent or (b)
admits in writing its inability to pay its debts as they become due or
(c) makes an assignment for the benefit of creditors or (d) if a
petition under any bankruptcy act, receivership statute or the like,
as they now exist or as they may be amended, is filed by the other
Party or by any third party or an application for a receiver is made
by anyone and such application is not resolved favorably to the other
Party within sixty (60) days
13.4 ROYALTY PAYMENTS ON TERMINATION. In the event of a termination of
this Agreement, Banyan shall make the following payments in lieu of
the Royalty Payments provided for under Section 7:
(a) In the event of a termination pursuant to Section 14.4, Banyan
shall pay royalties to Microsoft, in two (2) quarterly
installments (initiated no later than thirty (30) days following
the date of termination), in the aggregate equal to the amount
expended by Microsoft pursuant to Section 6.1 as of the date of
termination, plus interest at an annualized rate of [**] percent
[**], less any Royalty Payments already made by Banyan pursuant
to Section 7. In the calculation of such Royalty Payments,
Banyan shall receive no credit for any Royalty Reduction under
Section 7.3.
(b) In the event of termination by Microsoft that occurs prior to
December 31, 1999 due to Banyan's material and uncured breach of
this Agreement (but not a termination pursuant to Section 14.4),
Banyan shall pay royalties to Microsoft, in twelve (12) monthly
installments (initiated no later than thirty (30) days following
the date of termination), in the aggregate equal to the amount
expended by Microsoft pursuant to Section 6.1 as of the date of
termination, plus interest at an annualized rate of the prime
lending rate as specified by the Wall Street Journal on the date
of termination plus two (2) percent (2%).
17
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(c) In the event of termination by Microsoft on or after December 31,
1999 due to Banyan's material and uncured breach of this
Agreement (but not a termination pursuant to Section 14.4),
Banyan shall pay royalties to Microsoft, in twelve (12) monthly
installments (initiated no later than thirty (30) days following
the date of termination), in the aggregate equal to the amount
expended by Microsoft pursuant to Section 6.1 as of the date of
termination, plus interest at an annualized rate of [**] percent
[**], less any Royalty Payments already made by Banyan pursuant
to Section 7. In the calculation Royalty Payments, "Royalty
Payments already made" will include the amount of any Royalty
Reduction under Section 7.3; provided, however, that in no event
-----------------
will the payments to be made to Microsoft under this Section
13.4(c) be less than an amount equal to the amount expended by
Microsoft pursuant to Section 6.1 as of the date of termination,
plus interest at an annualized rate of the prime lending rate as
specified by the Wall Street Journal on the date of termination
plus two (2) percent (2%), less any Royalty Payments already made
by Banyan pursuant to Section 7.
(d) In the event of termination by Banyan due to Microsoft's material
and uncured breach of this Agreement, Banyan shall pay royalties
to Microsoft, in twenty-four (24) monthly installments (initiated
no later than thirty (30) days following the date of
termination), an amount equal to the amount expended by Microsoft
pursuant to Section 6.1 as of the date of termination, plus
interest at an annualized rate of the prime lending rate as
specified by the Wall Street Journal on the date of termination
less any Royalty Payments already made by Banyan pursuant to
Section 7. In the calculation of such Royalty Payments, Banyan
shall receive no credit for any Royalty Reduction under Section
7.3.
(e) The payments to be made pursuant to this Section 13.4 shall be in
addition to, and not in lieu of, any other remedy provided under
this Agreement or by law.
13.5 Sections 8, 9, 10, 11, 12, 13.4, 13.5 and 14 shall survive termination
or expiration of this Agreement for any reason.
14. GENERAL
-------
14.1 NOTICES. All notices, authorizations, and requests required or
desired to be given or made in connection with this Agreement will be
in writing, given by certified or registered mail (return receipt
requested), or express air courier (charges prepaid), and addressed as
follows (or to such other address as the Party to receive the notice
or request so designates by notice to the other):
To Banyan: To Microsoft:
Banyan, Inc. Microsoft Corporation
000 Xxxxxxxx Xxxx Xxx Xxxxxxxxx Xxx
Xxxxxxxx, XX 00000 Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxxxx Attention: Xxx Xxxxxx
Title: Chief Financial Officer Title: General Manager,
Enterprise Partners
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Copy to: Xxxx X. Xxxxxx, Esq. Copy to: Law & Corporate
Affairs
Xxxx and Xxxx, L.L.P. Fax: (000) 000-0000
00 Xxxxx Xxxxxx
Xxxxxx XX 00000
Fax: (000) 000-0000
18
If a notice is given by either Party by certified or registered mail,
it will be deemed received by the other Party on the third business
day following the date on which it is deposited for mailing. If a
notice is given by either Party by air express courier, it will be
deemed received by the other Party on the next business day following
the date on which it is provided to the air express courier.
14.2 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be
construed as creating an employer-employee relationship, a
partnership, agency, franchise or a joint venture between Microsoft
and Banyan and neither Party shall have the right, power or authority
to obligate or bind the other in any manner whatsoever without its
prior written consent. The non-employing Party will not be
responsible for any of the below-referenced payments, obligations,
taxes or benefits. Each Party shall be responsible with respect to
its own employees and/or subcontractors, including, without
limitation, for (a) withholding and payment of FICA, FUTA and all
other payroll and employment related taxes and amounts relating to
services performed by staff under this Agreement; (b) providing all
insurance or other employment related benefits to staff; (c) proper
payment of wages to staff, including overtime when due, in accordance
with the Fair Labor Standards Act, the Contract Work Hours and Safety
Standards Act, where applicable, and corresponding state law and
regulations; (d) providing any accommodation required under the
Americans with Disabilities Act or corresponding state law and
regulations; (e) verifying that all staff possess valid work
authorization in accordance with the Immigration Reform and Control
Act.
14.3 GOVERNING LAW; ATTORNEYS' FEES. This Agreement shall be governed by
the laws of the State of Washington as though entered into between
Washington residents and to be performed entirely in the State of
Washington. Banyan further consents to exclusive jurisdiction by the
state and federal courts sitting in the State of Washington. Process
may be served on either Party by regular mail, postage prepaid,
certified or registered, return receipt requested. In any action or
suit to enforce any right or remedy under this Agreement or to
interpret any provision of this Agreement, the prevailing Party shall
be entitled to recover its costs, including reasonable attorneys'
fees.
14.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of each Party's respective successors and lawful permitted
assigns. Notwithstanding the foregoing, Banyan may not assign this
Agreement, or any rights or obligations hereunder, whether by contract
or by operation of law, except with the express written consent of
Microsoft, which consent shall be granted or withheld in Microsoft's
sole discretion. Any attempted assignment in violation of this
Section shall be void. For purposes of this Agreement, an
"assignment" under this Section shall be deemed to include, without
limitation, the following: (a) a merger of Banyan where Banyan is not
the surviving entity; (b) any transaction or series of transactions
whereby a third party acquires direct or indirect power to control the
management and policies of Banyan, whether through the acquisition of
voting securities, by contract, or otherwise; or (c) the sale of more
than 50% of Banyan's assets (whether in a single transaction or series
of related transactions). In such an event, either party shall have
the right to immediately terminate this Agreement upon written notice
without being considered in breach of this Agreement.
14.5 CONSTRUCTION. If for any reason a court of competent jurisdiction
finds any provision of this Agreement, or portion thereof, to be
unenforceable, that provision of the Agreement will be enforced to the
maximum extent permissible so as to effect the intent of the parties,
and the remainder of this Agreement will continue in full force and
effect. Failure by either Party to enforce any provision of this
Agreement will not be deemed a waiver of future enforcement of that or
any other provision. This Agreement has been negotiated by the
Parties and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor
of or against either Party.
14.6 Conflict. In the event of any conflict between the terms of this
Agreement and the Reciprocal Non-Disclosure Agreement, the Microsoft
Premier Support Services Agreement, and the Microsoft Consulting
Services Master Services Agreement, the terms of the agreement in
question shall govern, but only with respect to the services, rights,
and obligations set forth therein.
19
14.7 ENTIRE AGREEMENT. This Agreement does not constitute an offer by
either Party and it shall not be effective until signed by both
Parties. This Agreement and the documents referenced herein
constitute the entire agreement between the Parties with respect to
the subject matter hereof and merges all prior and contemporaneous
oral and written communications. It shall not be modified except by a
written agreement dated subsequent to the date of this Agreement and
signed on behalf of Microsoft and Banyan by their respective duly
authorized representatives. Except as otherwise provided herein, the
Reciprocal Non-Disclosure Agreement, the Microsoft Premier Support
Services Agreement and the Microsoft Consulting Services Master
Service Agreement are governed by their own terms.
20
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the
Effective Date written above.
MICROSOFT CORPORATION BANYAN SYSTEMS INCORPORATED
By (sign): /s/ Xxx Xxxxxx By (sign): /s/ Xxxxxxx X. Xxxxx
------------------------- -------------------------
Name (print): Xxx Xxxxxx Name (print) Xxxxxxx X. Xxxxx
---------------------- -----------------------
Title: General Manager, Enterprise Title: Chairman/CEO
Partnerships -----------------------------
Date: January 8, 1998 Date: 1/8/99
------------------------------
EXHIBITS
--------
Exhibit A .......................................... Projected Revenue Base
Exhibit B ....................................... Microsoft Logo Guidelines
Exhibit C ............Microsoft Software License Grant--Development Centers
Exhibit D ...................Microsoft Software License Grant--Internal Use
Exhibit E ........................... Target Customer Seat Migration Report
Exhibit F .................................. Microsoft Trademark Guidelines
Exhibit G ................... Microsoft Reciprocal Non-Disclosure Agreement
21
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asteriks denote omissions.
EXHIBIT A
Projected Revenue Base
----------------------
Banyan
-----------------------------------------------
Date Revenue %
-----------------------------------------------
-----------------------------------------------
12-31-98
-----------------------------------------------
6-30-99 [**] [**]
-----------------------------------------------
12-31-99 [**] [**]
-----------------------------------------------
6-30-00 [**] [**]
-----------------------------------------------
12-31-00 [**] [**]
-----------------------------------------------
6-30-01 [**] [**]
-----------------------------------------------
12-31-01 [**] [**]
-----------------------------------------------
6-30-02 [**] [**]
-----------------------------------------------
12-31-02 [**] [**]
-----------------------------------------------
6-30-03 [**] [**]
-----------------------------------------------
12-31-03 [**] [**]
-----------------------------------------------
6-30-04 [**] [**]
-----------------------------------------------
12-31-04 [**] [**]
-----------------------------------------------
-----------------------------------------------
Total [**] [**]
-----------------------------------------------
22
EXHIBIT B
USING THE MICROSOFT(R) LINK LOGO ON NON-MICROSOFT WEBSITES
----------------------------------------------------------
[LOGO OF MICROSOFT APPEARS HERE]
1. Except as Microsoft may authorize elsewhere, non-Microsoft websites may use
only the logo provided by Microsoft ("Logo"). By displaying the Logo, you
agree to be bound by these Policies.
2. You may only use the Logo on your website, and not in any other manner. It
must always be an active link to Microsoft's Homepage at
xxxx://xxx.xxxxxxxxx.xxx/.
3. The Logo .gif includes the words "To xxx.xxxxxxxxx.xxx", describing the
significance of the Logo on your site (i.e., the Logo is a link to
Microsoft, not an endorsement of your site). You may not remove or alter
this or any other element of the Logo.
4. The Logo may be used only on web pages that make accurate references to
Microsoft or its products or services, and must be displayed adjacent to
the reference or at the bottom of the same page. Your web page title and
other trademarks and logos must appear at least as prominent as the Logo.
You may not display the Logo in any manner that implies sponsorship,
endorsement, or license by Microsoft.
5. The Logo must appear by itself, with a minimum spacing (the height of the
Logo) between each side of the Logo and other graphic or textual elements
on your page. The Logo may not be used as a feature or design element of
any other logo.
6. You may not alter the Logo in any manner, including size, proportions,
colors, elements, etc., or animate, morph or otherwise distort its
perspective or two-dimensional appearance.
7. You may not use the Logo on any site that disparages Microsoft or its
products or services, infringes any Microsoft intellectual property or
other rights, or violates any state, federal or international law.
8. These Policies do not grant a license or any other right in Microsoft's
logos or trademarks. Microsoft reserves the right in its sole discretion to
terminate or modify permission to use the Logo at any time. Microsoft
reserves the right to take action against any use that does not conform to
these Policies, infringes any Microsoft intellectual property or other
right, or violates other applicable law.
9. MICROSOFT DISCLAIMS ANY WARRANTIES THAT MAY BE EXPRESS OR IMPLIED BY LAW
REGARDING THE LOGO, INCLUDING WARRANTIES AGAINST INFRINGEMENT.
23
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asteriks denote omissions.
EXHIBIT C
MICROSOFT SOFTWARE LICENSE GRANT--CUSTOMER SOLUTION CENTER
----------------------------------------------------------
MICROSOFT PRODUCT NAME QUANTITY INITIAL LICENSE ESTIMATED RETAIL INITIAL LICENSE ESTIMATED
PRICE VALUE
--------------------------------------------------------------------------------------------------------------------
BackOffice Server 5 [**] [**]
--------------------------------------------------------------------------------------------------------------------
BackOffice Client Access Licenses 2 [**] [**]
(20 Clients Pak)
--------------------------------------------------------------------------------------------------------------------
Windows 2000 Pro 10 [**] [**]
--------------------------------------------------------------------------------------------------------------------
Windows 9x 10 [**] [**]
--------------------------------------------------------------------------------------------------------------------
Microsoft Site Server Enterprise 2 [**] [**]
--------------------------------------------------------------------------------------------------------------------
Total [**]
--------------------------------------------------------------------------------------------------------------------
The above Microsoft products will be provided to a total of one (1) Banyan site
worldwide including: Westboro, Massachusetts.
24
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asteriks denote omissions.
EXHIBIT D
MICROSOFT SOFTWARE LICENSE GRANT--INTERNAL USE
-----------------------------------------------
INITIAL GRANT OF LICENSES REQUIRED DURING YEAR ENDING DECEMBER 31, 1999
-----------------------------------------------------------------------
MICROSOFT PRODUCT NAME LICENSES GRANTED
--------------------------------------------------------------------------------------------
Microsoft BackOffice Server [**]
--------------------------------------------------------------------------------------------
Microsoft BackOffice Client Access Licenses [**]
--------------------------------------------------------------------------------------------
Microsoft Site Server Enterprise Edition [**]
--------------------------------------------------------------------------------------------
Microsoft Exchange Server Enterprise Edition [**]
--------------------------------------------------------------------------------------------
Microsoft Windows NT Professional [**]
--------------------------------------------------------------------------------------------
Microsoft Windows 98 [**]
--------------------------------------------------------------------------------------------
Microsoft Office 2000 Professional [**]
--------------------------------------------------------------------------------------------
Microsoft Project [**]
--------------------------------------------------------------------------------------------
25
EXHIBIT E
TARGET CLIENT SEAT MIGRATION REPORT
------------------------------------
Please complete the following template below with requested information, and
return to (TBD Microsoft Banyan Business Development Executive) via email or by
fax at (000) 000-0000.
CONTACT: _____________________
TITLE: _____________________
PHONE: _____________________
FAX: _____________________
EMAIL: ____________________________
ADDRESS: ____________________________
____________________________
THIS SALES REPORT IS FOR THE CALENDAR QUARTER: ____________________
THIS SALES REPORT IS FOR THE FOLLOWING PRODUCT LINE(S): ALL
Sales Results. Please estimate the quantities of the following Microsoft
licensed products installed during this quarter. Include licenses delivered by
any authorized Microsoft reseller, to the best of your knowledge, during the
period of or as a direct result of a Banyan consulting engagement.
Microsoft Licensed Products No. Installed NO. CONTRACTED Client BANYAN PRODUCT
MIGRATION (Y/N)
---------------------------------------------------------------------------------------------------------------------------
Microsoft Windows NT Server
---------------------------------------------------------------------------------------------------------------------------
Microsoft Windows NT Client Access Licenses
---------------------------------------------------------------------------------------------------------------------------
Microsoft Windows NT Professional
---------------------------------------------------------------------------------------------------------------------------
Microsoft SQL Server
---------------------------------------------------------------------------------------------------------------------------
Microsoft SQL Server Client Access Licenses
---------------------------------------------------------------------------------------------------------------------------
Microsoft SQL Server Runtime
---------------------------------------------------------------------------------------------------------------------------
Microsoft SQL Server Runtime Client Access Licenses
---------------------------------------------------------------------------------------------------------------------------
Microsoft Exchange Server
---------------------------------------------------------------------------------------------------------------------------
Microsoft Exchange Client Access Licenses
---------------------------------------------------------------------------------------------------------------------------
Microsoft Site Server
---------------------------------------------------------------------------------------------------------------------------
Microsoft BackOffice Server
---------------------------------------------------------------------------------------------------------------------------
Microsoft BackOffice Client Access Licenses
---------------------------------------------------------------------------------------------------------------------------
Signature of Sponsoring Executive. Please have this document signed by Xxxxxx
Xxxxx, Senior VP Worldwide Sales and Service.
Print Name: ____________________________ Title: ____________________________
Signature: _____________________________ Date: ____________________________
26
EXHIBIT F
MICROSOFT TRADEMARK GUIDELINES
------------------------------
The Xxxx:
[LOGO OF MICROSOFT APPEARS HERE]
Specifications:
1. Banyan may only use the Xxxx in connection with services when promoting,
distributing, or selling Microsoft products. Banyan may use the Xxxx solely
in white papers, advertising, collateral, and other marketing materials for
the Enterprise Services, and may not use the Xxxx on any of Banyan's
products or other services.
2. Banyan's company name or logo must appear on any materials where the Xxxx
is used and must be at least as prominent as the Xxxx.
3. Banyan may use the Xxxx only as provided by Microsoft electronically and in
hard copy form. Banyan may not alter the Xxxx in any manner.
4. The Xxxx xxx not be used in any manner that expresses or might imply
Microsoft's affiliation, sponsorship, endorsement, certification, or
approval, other than as contemplated by the Agreement.
5. Banyan may not combine the Xxxx with any other object, including, but not
limited to, other logos, words, graphics, photos, slogans, numbers, design
features, or symbols. The Xxxx must appear by itself, with a minimum
spacing (the height of the Xxxx) between each side of the Xxxx and other
graphic or textual elements.
6. Minimum size for the Xxxx is 3/4" or 2 cm in width.
7. Banyan may not use the Xxxx, in whole or in part, as part of its company
name, domain name, product or service name, logo, trade dress, design,
slogan, or other trademarks.
8. The Xxxx xxx not be used as a design feature on any materials
9. The Xxxx xxx not be imitated in any manner in any materials.
10. The Xxxx shall include the appropriate (R) symbol as shown in this Exhibit.
11. The Xxxx shall be attributed to Microsoft Corporation in all materials
where it is used, with the attribution clause: ""Microsoft is a registered
trademark of Microsoft Corporation in the United States and other countries
and is used by Banyan under "license."
27
EXHIBIT G
(COPY OF MICROSOFT RECIPROCAL NON-DISCLOSURE AGREEMENT)
28
