EXHIBIT 10.19
SOFTWARE TRANSITION AGREEMENT
This Software Transition Agreement (this "Agreement"), dated January
30, 2004 (the "Effective Date") is between United Way of America, ("UWA"), a New
York not-for-profit corporation with a principal place of business located at
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, and Blackbaud, Inc.,
("Blackbaud"), a South Carolina corporation with a place of business located at
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000.
WITNESSETH
WHEREAS, UWA owns all right, title, and interest in and to a computer
program known as the United Way Campaign Management System (the "Program"); and
WHEREAS, the Program also incorporates certain know-how and technical
information ("Technology"); and
WHEREAS, Blackbaud is the owner of a computer program known as
"Raiser's Edge"; and
WHEREAS, UWA desires to discontinue supporting the Program, and further
desires for its customers to license Raiser's Edge (the "Transition"); and
WHEREAS, Blackbaud desires to assist UWA with the Transition by
acquiring the Program and Technology from UWA and providing support for the
Program for a limited period of time in accordance with the terms and conditions
of this agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and more expressly set forth
herein, UWA and Blackbaud, intending to be legally bound, hereby agree as
follows:
SECTION 1
SOFTWARE TRANSFER
1.1 UWA hereby transfers, grants, conveys, assigns, and
relinquishes exclusively to Blackbaud all of UWA's right, title, and interest in
and to both the tangible and the intangible property constituting the Programs
and Technology, in perpetuity (or for the longest period of time otherwise
permitted by law), including, but not limited to the following corporeal and
incorporeal incidents to the Programs and Technology:
(i) title to and possession of the media, devices, and
documentation that constitute all copies of the Programs and Technology, their
component parts, and all documentation relating thereto, possessed or controlled
by UWA, which are to be delivered to Blackbaud pursuant to Section 2 of this
Agreement; and
(ii) all copyright interests owned or claimed by UWA
pertaining to the Program, including (without limitation) any U.S. Copyright
Registrations, together with all other copyright
interests accruing by reason of international copyright conventions and any
moral rights pertaining thereto, including the right to xxx for, settle, or
release any past, present, or future infringement thereof.
1.2 UWA hereby transfers, grants, conveys, assigns, and
relinquishes exclusively to Blackbaud, in perpetuity (or for the longest period
of time otherwise permitted by law), all of UWA's right, title, and interest in
and to the trademark "Campaign Management System," accompanied by the goodwill
of all business connected with the use of and symbolized by such xxxx including
the right to xxx for, settle, or release any past, present, or future
infringement thereof or unfair competition involving the same (the "Trademark
Interests"). UWA covenants not to use or display the Trademark Interests, or any
xxxx confusingly similar thereto, anywhere in the world except by authorization
of Blackbaud, and further covenants not to contest or challenge the validity of
the Trademark Interests, any applicable registrations thereof or the Ownership
of the Trademark Interests by Blackbaud.
SECTION 2
DELIVERY
2.1 Within ten (10) business days after the Effective Date of this
Agreement, UWA will deliver to Blackbaud the following: (i) its entire inventory
of copies of the Programs in object code form; (ii) a master copy of the latest
version of the Programs and Technology (in both source and object code form),
which shall be in a form suitable for copying; (iii) all system and user
documentation pertaining to the latest version of the Programs and Technology,
including design or development specifications, error reports, and related
correspondence and memoranda; and (iv) related data and software schemas and
models, technical designs of applications with associated classes, methods and
properties, any scripts developed in conjunction with the customizations,
procedures for rebuilding and testing the latest version of the customizations,
including which tools and libraries are part of the build, any architecture
documents, development or testing databases and test plans.
SECTION 3
TRANSITION
3.1 Blackbaud shall take such actions as it, in its sole
discretion, deems appropriate in connection with the transition of the Program's
current customers to Raiser's Edge. Such actions may include installing a toll
free phone line dedicated to current customers of the Program, configuring
support systems to include relevant local United Way information; developing
information for support systems including FAQ's, support case tracking and
knowledge base items, and training 2 to 3 support personnel.
3.2 Blackbaud shall make available to UWA annual support
agreements (the "Support Agreements") for distribution to the Program's current
customers (the "Local United Ways"). The Support Agreements shall be between
Blackbaud and each Local United Way, and shall be in a form determined by
Blackbaud in its sole discretion. UWA shall, within five days of the Effective
Date, distribute the Support Agreements to each Local United Way. Such
distribution shall include a cover letter in a form mutually agreed upon by the
parties. UWA shall not have any right
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or authority to assume or create any obligation, express or implied, on behalf
of Blackbaud. No Support Agreement shall be binding upon Blackbaud until it is
executed by Blackbaud.
3.3 UWA hereby agrees to make available the persons set forth
below (the "Designated Consultants") to provide the following transition
services (the "Transition Services"):
(i) make the existing [*] for the Software, [*], available to
Blackbaud on a full time basis for up to six continuous weeks following the
Effective Date, to perform tasks requested by UWA regarding the Programs and
Technology at Blackbaud's offices in Charleston, South Carolina.
(ii) make the Program's [*], [*], available to Blackbaud as
Blackbaud deems necessary for a period of one year following the Effective Date,
to provide remote support via telephone and email regarding the Programs and
Technology.
(iii) should [*] or [*] separate from UWA, UWA will use all
commercially reasonable efforts to replace them with individuals of equal
experience and skill.
3.4 UWA shall be responsible for (i) the payment of, and shall
indemnify Blackbaud against, all federal, state, local and foreign taxes and
withholdings payable with respect to the wages of the Designated Consultants and
all other employer liabilities relating to such personnel as required by law to
be provided, (ii) the maintenance of workers' compensation insurance required by
applicable statutes with respect to the Designated Consultants, and (iii) the
maintenance, payment and provision of all applicable employee benefits for the
Designated Consultants. UWA shall be an independent contractor in connection
with the performance of the Transition Services and the Designated Consultants
shall not be deemed to be employees of Blackbaud.
3.5 UWA hereby assigns and agrees to assign all right title and
interest including all copyrights, patents, trade secrets and other intellectual
property rights, in and to all inventions, works, materials and other
deliverables that result from the Transition Services. UWA agrees to cause each
Designated Consultant to enter into an Invention Assignment and Confidentiality
Agreement in form and substance acceptable to Blackbaud, which shall, among
other things, assign to Blackbaud all right title and interest, including all
copyrights, patents, trade secrets and other intellectual property rights, in
and to all Inventions, works, materials and other deliverables developed by such
Designated Consultant that result from the Transition performed by such
Designated Consultant.
SECTION 4.1
MARKETING SUPPORT
4.1 For a period of two years following the Effective Date, UWA
will endorse and provide reasonable support to Blackbaud in connection with the
marketing of Blackbaud's product, "Raiser's Edge". Such support shall include,
but not be limited to those items set forth on Schedule A attached hereto.
[*] Confidential treatment requested; certain information omitted and filed
separately with the SEC.
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SECTION 5.1
FINANCIAL STRUCTURE
5.1 Upon the execution of this Agreement, UWA shall pay Blackbaud
a transition fee equal to $[*].
5.2 On or before February 1, 2004 (the "Minimum Support Date"),
UWA shall pay Blackbaud all support fees it has collected, but in no event less
than $[*] (the "Minimum Support Threshold"). Monies received by Blackbaud from
Local United Ways in payment for Support Agreements during the first 12 month
period will be forwarded to UWA.
5.3 After the Minimum Support Threshold, UWA shall continue to pay
Blackbaud all support fees that it collects from Local United Ways in excess of
$[*]. If UWA pays Blackbaud at least $[*] in support fees prior to April 1,
2004, Blackbaud shall pay UWA a one-time fee of $[*] to offset any setup
expenses incurred by UWA.
5.4 For the first 12 month period, UWA will xxxx and collect from
Local United Ways Support Agreement fees at the current non-discounted UWCMS
Standard Fee Schedule based on the local United Way's metro size. For the final
12 month period, Blackbaud will xxxx Local United Ways directly for the final
12-month period of the Support Agreements at the same fee rate as the first
12-month period, adjusted for inflation. This inflation adjustment shall not
exceed [*]%. In addition, any Local United Way that desires to cancel
maintenance prior to the end of the twenty-four month term will be obligated to
pay Blackbaud a [*]% cancellation fee. Notwithstanding the foregoing, Blackbaud
may discontinue support in the final 12-month period of the Support Agreements
if the maintenance revenue for the final 12-month period falls below $[*]. This
amount shall include maintenance revenue from any Local United Way that converts
to Raiser's Edge. It shall also include any amount that UWA optionally elects to
pay directly to Blackbaud for the purpose of achieving the $[*] target.
5.5 Blackbaud shall pay UWA a commission equal to: (i) [*]% of the
gross Conversion Fees (defined below) in excess of $[*] received by Blackbaud
from the Local United Ways during the period commencing on February 1, 2004 and
ending on February 1, 2006 (the "Commission Period") and (ii) [*]% of the gross
initial license fees and initial services fees (excluding maintenance and
renewal fees) received by Blackbaud during the Commission Period from other
member United Way organizations that are not licensees of the Program as of the
Effective Date. All commissions due to UWA pursuant to this Section 5.5 shall be
paid on a calendar quarter basis, 30 days following the end of the calendar
quarter in which the applicable fees are received. For the purposes of this
Agreement, "Conversion Fee" shall mean the fee that Blackbaud charges a Local
United Way to convert to Raiser's Edge, and does not include license and support
fees.
5.6 As it pertains to the financial structure of this agreement,
upon reasonable notice and at their expense, each party shall have the right to
audit or to have audited and to copy the books and records of the other which in
any way relate to this agreement. When requested by a party, the other party
shall provide the requesting party's auditors with access to all property and
records and the cooperation of such party's personnel, if any, necessary to
effectuate the audit or audits hereunder. The requesting party's auditors shall
have the right to copy any or all documentation relating to the performance
under this agreement.
[*] Confidential treatment requested; certain information omitted and filed
separately with the SEC.
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5.7 Blackbaud agrees to develop, within the 24-month Commission
Period, a United Way-version of Raiser's Edge software. This version will
incorporate UWCMS features for managing United Way corporate campaigns and donor
designations. Local United Ways can convert to the United Way-version of
Raiser's Edge software for approximately [*]% of the current UWCMS Standard Fee
Schedule based on local United Way metro size. This fee includes a standard
migration of UWCMS data over to the United Way version of Raiser's Edge and
initial training in the use of the software.
SECTION 6
WARRANTIES
6.1 UWA represents and warrants that Blackbaud shall receive,
pursuant to this Agreement as of the Effective Date, complete and exclusive
right, title, and interest in and to all tangible and intangible property rights
existing in the Programs, Technology and Trademark Interests.
6.2 UWA represents and warrants that the Programs, Technology and
Trademark Interests are free and clear of all liens, claims, encumbrances,
rights, or equities whatsoever of any third party.
6.3 UWA represents and warrants that the execution, delivery, and
performance of this Agreement by UWA does not and will not violate any security
agreement, indenture, order, or other instrument to which UWA is a party or by
which it or any of its assets is bound.
6.4 UWA represents and warrants that the consent of any person or
entity under any contract is not required for the execution, delivery and
performance by Buyer of this Agreement and the transactions contemplated hereby.
6.5 UWA represents and warrants that the Programs and Technology
do not infringe any patent, copyright, or trade secret of any third party; that
the Programs and Technology are fully eligible for protection under applicable
copyright law and have not been forfeited to the public domain; and that the
source code and system specifications for the Programs and Technology have been
maintained in confidence.
6.6 UWA represents and warrants that all personnel, including
employees, agents, consultants, and contractors, who have contributed to or
participated in the conception and development of the Programs and Technology
either (1) have been party to a for-hire relationship with UWA that has accorded
UWA full, effective, and exclusive original Ownership of all tangible and
intangible property thereby arising with respect to the Programs and Technology
or (2) have executed appropriate instruments of assignment in favor of UWA as
assignee that have conveyed to UWA full, effective, and exclusive Ownership of
all tangible and intangible property thereby arising with respect to the
Programs and Technology.
[*] Confidential treatment requested; certain information omitted and filed
separately with the SEC.
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6.7 UWA represents and warrants that there are no agreements or
arrangements in effect with respect to the marketing, distribution, licensing,
or promotion of the Programs, Technology and Trademark Interests by any
independent salesperson, distributor, sublicensor, or other remarketer or sales
organization.
SECTION 7
FURTHER ASSURANCES
7.1 UWA shall execute and deliver such further conveyance
instruments and take such further actions as may be necessary or desirable to
evidence more fully the transfer of ownership of all of the Programs, Technology
and Trademark Interests to Blackbaud. UWA therefore agrees:
(i) to execute, acknowledge, and deliver any affidavits
or documents of assignment and conveyance regarding the Programs and Technology;
(ii) to provide testimony in connection with any
proceeding affecting the right, title, or interest of Blackbaud in the Programs
and Technology; and
(iii) to perform any other acts deemed necessary to carry
out the intent of this Agreement.
SECTION 8
PROTECTION OF TRADE SECRETS
8.1 For purposes of this Agreement, "Program and Technology Trade
Secrets" means the whole or any portion or phase of any scientific or technical
information, design, process, procedure, formula, or improvement included in the
Programs and Technology that are valuable and not generally known to the
business concerns engaged in the development or marketing of products
competitive with the Programs and Technology. From and after the date of
execution hereof, and for so long thereafter as the data or information remains
the Programs and Technology Trade Secrets, UWA shall not use, disclose, or
permit any person not authorized by Blackbaud to obtain any Programs and
Technology Trade Secrets (whether or not the Programs and Technology Trade
Secrets are in written or tangible form), except as specifically authorized by
Blackbaud.
SECTION 9
ACKNOWLEDGMENT OF RIGHTS
9.1 In furtherance of this Agreement, UWA hereby acknowledges
that, from and after the Effective Date, Blackbaud has acceded to all of UWA's
right, title, and standing to:
(i) receive all rights and benefits pertaining to the
Program, Technology and Trademark Interests;
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(ii) institute and prosecute all suits and proceedings and
take all actions that Blackbaud, in its sole discretion, may deem necessary or
proper to collect, assert, or enforce any claim, right, or title of any kind in
and to any and all of the Program, Technology and Trademark Interests; and
(iii) defend and compromise any and all such action, suits,
or proceedings relating to such transferred and assigned rights, title,
interest, and benefits, and perform all other such acts in relation thereto as
Blackbaud, in its sole discretion, deems advisable.
SECTION 10
INDEMNIFICATION
10.1 UWA agrees to indemnify and hold harmless Blackbaud, its
successors and assigns, including their affiliates, officers, directors,
employees, agents, contractors, licensees, or customers, from and against any
loss, liability, claim, or damage (including court costs and reasonable attorney
fees) sustained by it or them as a result of: (i) a claim or allegation that the
Program and/or Technology infringe any patent, copyright, trade secret,
trademark, or other intellectual property right of any third party, (ii) a
breach of UWA' representations and warranties hereunder, or (iii) UWA's
ownership, use and marketing of the Software prior to the Effective Date.
Blackbaud agrees to indemnify and hold harmless UWA, its successors and assigns,
including their affiliates, officers, directors, employees, agents, contractors,
licensees, or customers, from and against any loss, liability, claim, or damage
(including court costs and reasonable attorney fees) sustained by it or them as
a result of: (i) a claim or allegation that The Raiser's Edge infringes any
patent, copyright, trade secret, trademark, or other intellectual property right
of any third party, (ii) a breach of Blackbaud's representations and warranties
hereunder, or (iii) Blackbaud's ownership, use and marketing of the Software
subsequent to and including to the Effective Date.
SECTION 11
LIMITATION OF LIABILITY
EXCEPT FOR CLAIMS FOR INDEMNIFICATION HEREUNDER, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES.
SECTION 12
MISCELLANEOUS
12.1 Each party shall bear its own expenses (including, but not
limited to, attorneys' fees) incurred in connection with the preparation and
consummation of the Closing and other transactions contemplated by this
Agreement, unless otherwise specifically provided.
12.2 All notices and other communications required or permitted
under this Agreement shall be in writing and shall be deemed given (i) when
delivered personally or (ii) five (5) business days after being deposited in the
United States mail as certified mail, return receipt requested (whether or not
return receipt is actually received) or (iii) one (1) day after being deposited
with a
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reputable overnight delivery service, overnight delivery specified, prepaid and
addressed to the addresses set forth in the preamble to this Agreement or to
such other address as each party may designate in writing.
12.3 This Agreement together with all exhibits and other related
documents that are incorporated herein by reference, embodies the entire
Agreement and except as otherwise contemplated herein, supersedes all prior
agreements, written and oral, relating to the subject matter hereof. In the
event of a conflict between the provisions of the main body of the Agreement and
any attached exhibits, the Agreement shall take precedence.
12.4 Amendments to this Agreement, including any exhibit hereto,
shall be enforceable only if they are in writing and are signed by authorized
representatives of both parties.
12.5 The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
12.6 The failure of any party hereto to enforce any provision of
this Agreement, or any right with respect hereto, or failure to exercise any
election provided for herein, shall in no way be considered a waiver of such
provision, right, or election, or in any way affect the validity of this
Agreement. The failure of any party hereto to enforce any provision, right or
election shall not prejudice such party from later enforcing or exercising that
provision, right, or election which it has under this Agreement.
12.7 In the event that any provision of the Agreement or any part
thereof is held by a court to be invalid, the remainder of this Agreement shall
be binding on the parties and construed as if the invalid provisions or parts
thereof have been deleted from this Agreement.
12.8 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
12.9 This Agreement will be governed by the laws of the State of
North Carolina without regard to its conflicts of law provisions, provided that
matters affecting copyrights, patents and/or trademarks will be governed by U.S.
federal law. The parties agree that the judicial forum for any actions or
proceedings brought relating to this Agreement shall be the federal or state
courts located in the State of North Carolina.
12.10 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their successors and assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any person not a party
to this Agreement any rights or remedies under or by reason of this Agreement.
Notwithstanding the foregoing, no party to this Agreement may assign or delegate
all or any portion of its rights, obligations or liabilities under this
Agreement without the prior written consent of the other party to this
Agreement.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Software
Transition Agreement as of the date first above written.
BLACKBAUD, INC.
By: /s/ XXXXXXX XXXXXX
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Name: Xxxxxxx Xxxxxx
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Title: Vice President of Services and Development
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UNITED WAY OF AMERICA
By: /s/ XXXXXXX XXXXXXXXX
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Name: Xxxxxxx Xxxxxxxxx
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Title: Chief Technology Officer
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[SIGNATURE PAGE TO SOFTWARE TRANSITION AGREEMENT]
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SCHEDULE A
Marketing Support
1. Assisting with the establishment of a working task force comprised
of current program users. This task force shall conduct reviews of product
design and assist with the development of a Program conversion and training
program with the goal of developing "reference sites" for conversions.
2. Supporting in-house marketing programs.
3. Providing exclusive endorsement of Raiser's Edge as the solution for
Local United Way fundraising and constituent management software. Any public
communication concerning this endorsement shall be subject to the prior written
consent of Blackbaud. This consent shall not be unreasonably withheld.
4. Inviting Blackbaud to the United Way National Conference in May 2004
and 2005 to promote the relationship between them to new Local United Ways and
feature Blackbaud as a favored technology partner
5. Assisting with introducing Blackbaud to influential Local United
Ways and in targeting Local United Ways that use competitive solutions.
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