Exhibit 10.13
AGREEMENT
This Agreement (the "Agreement") is entered as of the _____ day of
September, 1998, by and between Commerce One, Inc. ("C1"), a California
corporation with a principal place of business at 0000 Xxxxxxx Xxxxxx, Xxxxxx
Xxxxx, Xxxxxxxxxx 00000 and PricewaterhouseCoopers LLP ("PwC"), a registered
Delaware limited liability partnership with offices located at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX 00000 (each, a "Party" and together the "Parties").
C1, among other things, develops, markets, sells and supports
enterprise-level software applications and services that enable businesses and
their suppliers to engage in electronic procurement and supplier management over
the Internet and other communications media (the "C1 Software").
PwC, among other things, assists companies like C1 in the development,
marketing, and sale of such software systems and services and implements and
supports these systems for customers who have purchased them.
Because of the complementary knowledge and expertise of the Parties,
the Parties desire to enter into an alliance under which they will work together
to develop, market, sell, implement and support the C1 Software.
Now, therefore, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the Parties agree as
follows:
1. DEFINITIONS
As used herein, the following terms shall have the following meanings:
(a) "Agreement" shall mean this Agreement by and among
the Parties.
(b) "C1 Software" shall mean all software products of
C1, including without limitation, those relating to
electronic procurement and supplier management,
(including their constituent elements and code in
whatever form, whether proprietary to C1 or others) as
they now exist or as they are further developed and
shall include all software, related databases, design
elements, custom applications, preexisting code or
applications, code frameworks, methods and standards,
including without limitation, all documentation (in
whatever form or medium), end user manuals, user's
guides and technical manuals proprietary to C1.
(c) "Confidential Information" means any information
in whatever form, and however delivered or
communicated, including, without limitation, all code,
documentation,
product plans, Trade Secrets, business plans, customer
lists, know-how, and all other information of whatever
nature related to or incorporated into C1 Software or
the business of C1 or PwC or any subsidiary or other
business entity which is an affiliate of C1 or PwC
(such subsidiary or business entity referred to
collectively as "C1" or "PwC", as the case may be) and
which is reasonably understood to be of a confidential
nature. Confidential Information includes information
of others that C1 or PwC has agreed to keep
confidential. Confidential Information of PwC
specifically includes information relating to any bids
or proposals made by PwC in relation to the
implementation of or the provision of consulting
services relating to the C1 Software. Confidential
Information of a Party shall not include information
or materials that is disclosed to the other party (the
"Receiving Party") that is:
(i) otherwise rightfully known to the Receiving
Party;
(ii) in the public domain through no fault of the
Receiving Party;
(iii) lawfully obtained by the Receiving Party
from a third party without breach of such third
party's obligations of confidentiality; or
(iv) that a Receiving Party is required to disclose by
legal process; provided, however, that voluntary
disclosure beyond that which is required by law
shall constitute a violation of this Agreement.
(e) "Trade Secrets" shall mean technical or other
information, designs, processes, procedures,
algorithms, formulas, improvements, or modifications
disclosed to PwC by C1 or to C1 by PwC, that are
commercially valuable and secret. Trade Secrets are
unique assets of C1 or PwC that give C1 or PwC a
competitive advantage over competitors that do not
possess such information. Trade Secrets include, but
are not limited to, system designs and specifications,
programming sequences, algorithms, flow charts, and
formulas, developed in whole or in part by C1 or PwC.
(f) "Upgrades" shall mean a new version of a proprietary
product to which additional or incremental
functionality has been added.
2. COOPERATION IN C1 SOFTWARE DEVELOPMENT AND IMPLEMENTATION
2.1 ESTABLISHMENT OF THE TRC. To enhance the performance,
development and implementation of C1 Software, the Parties will
establish a Technical Review Committee ("TRC"). The intended
objective of the TRC is to provide advice to C1 regarding
functionality, priorities, release schedules, and use of
development resources.
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2.2 SCOPE OF THE TRC'S REVIEW. The TRC shall be charged with
reviewing the performance of the C1 Software, all developments
or potential developments to the C1 Software and the
implementation of the C1 Software.
2.3 MEMBERSHIP OF THE TRC. The TRC shall be composed of three C1
employees selected by C1 who are involved in and knowledgeable
about the performance and development of C1 Software and three
PwC employees selected by PwC who are involved in and
knowledgeable about the implementation of C1 Software. C1 and
PwC may at any time with notice to the other Party change their
employees designated to serve as members of the TRC. Each Party
represents that its designated members of the TRC are
authorized to act on that Party's behalf on all matters that
come before the TRC.
2.4 MEETINGS AND REPORTS. The TRC shall meet at least quarterly to
review and assess the performance of the C1 Software, all
developments or potential developments to that software and the
implementation of that software. At least once every six
months, the TRC shall issue a report to C1 and PwC reviewing
and assessing in detail the above. In the event that the
members of the TRC do not concur in their review and
assessment, the report shall so state and shall set forth
separately the review and assessment of all members.
2.5 OBLIGATION TO PROVIDE INFORMATION TO THE TRC. C1 and PwC shall
each promptly provide to the TRC all material information known
or available to each of them relating to the performance of the
C1 Software, all material developments or potential
developments to the C1 Software, and the implementation of the
C1 Software. This obligation includes but is not limited to
providing the TRC with all Beta releases, with all information
relating to C1 Software Upgrades, and with all information
relating to problems with C1 Software performance or
implementation.
3. OPERATION IN C1 SOFTWARE MARKETING
3.1 ESTABLISHMENT OF MDC. To enhance the marketing of C1 Software,
the Parties will establish a Marketing Development Committee
("MDC").
3.2 SCOPE OF THE MDC'S REVIEW. The MDC shall be charged with
developing and overseeing the joint marketing of C1 Software
based upon the initial marketing plan and budget to be agreed
upon and entered into by the Parties within 30 days of the date
hereof (the "Marketing Plan"). The MDC shall agree upon not
less than five customers to serve as beta integration sites
with respect to the C1 Software. The MDC shall also identify
each party's commitments and obligations, including joint
activities. The MDC shall consider using marketing tools such
as, among other things, magazine inserts in publications such
as Forbes, methodology books (for pre-sale), PwC sponsored
conferences, and training forums.
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3.3 COMMITMENT OF THE PARTIES. The specific monetary and in-kind
commitments of the Parties shall be determined by the MDC in
accordance with the Marketing Plan; provided, however, PwC
agrees that it shall spend a minimum of $250,000 the first year
this Agreement is in effect pursuant to jointly approved plans
for the marketing of the C1 Software. Thereafter, the Parties
shall determine in good faith the amount per year that each
Party shall commit to the marketing of the C1 Software;
provided that in the event that the parties are unable to agree
upon the minimum amount to be spent by PwC for marketing in any
subsequent year, the minimum amount shall be $250,000.
3.4 MEMBERSHIP OF THE MDC. The MDC shall be composed of two C1
employees selected by C1 and two PwC employees selected by PwC,
all of whom are involved in the marketing of C1 Software. C1
and PwC may at any time with notice to the other Party change
their employees designated to serve as members of the MDC. Each
Party represents that its designated members of the MDC are
authorized to act on that Party's behalf on all matters that
come before the MDC; provided that in no event shall the MDC
have the authority to modify the terms of this Agreement
3.5 MEETINGS. The MDC shall meet at least quarterly to develop and
oversee C1 Software marketing.
3.6 PUBLICITY. The MDC shall establish guidelines governing all
news releases, public announcements, or any other mass
publicity, including without limitation, mass-produced
marketing materials, which makes reference to PwC or includes a
Xxxx (as defined below) of PwC or New Xxxx (as defined below)
(collectively, "Publicity") to be released by either Party
relating to C1 Software. Notwithstanding the foregoing, C1
shall not release any Publicity relating to PwC unless such
Publicity is approved by PwC. The MDC shall establish
guidelines governing all news releases, public announcements,
or any other publicity which makes reference to C1 or includes
a Xxxx (as defined below) of C1 (collectively, "C1 Publicity")
to be released by either Party relating to C1 Software.
Notwithstanding the foregoing, PwC shall not release any C1
Publicity relating to C1 unless such C1 Publicity is approved
by C1.
3.7 TRADEMARKS, LOGOS, TRADE NAMES AND SERVICE MARKS. The MDC shall
establish written guidelines governing the use by a Party of
trademarks, logos, trade names and service marks (together
"Marks") of the other Party or any successor entity to either
of the Parties; provided, however, C1 shall not use PwC's Marks
unless the use is approved by PwC and PwC shall not use C1's
Marks unless the use is approved by C1. Notwithstanding any
other provision contained herein or in any guidelines
established by MDC, in the event that PwC gives C1 notice that
it is terminating this Agreement pursuant to Section 11.3.2, C1
shall immediately cease, and in the event the Agreement is
terminated for any other reason, upon termination C1 shall
cease, the use of the names "Price Waterhouse,"
"PricewaterhouseCoopers", the xxxx "PW," "PwC," any derivations
thereof or any other xxxx proprietary to PwC, including without
limitation any other new or successor trade
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name, logo, trademark or service xxxx which evolves as a result
of the recent merger between Price Waterhouse LLP and Coopers &
Xxxxxxx LLP (together, the "New Marks"), in connection with the
marketing, promotion, Publicity and sale of the C1 Software.
Notwithstanding any other provision contained herein or in any
guidelines established by MDC, in the event that C1 gives PwC
notice that it is terminating this Agreement pursuant to
Section 11.3.2, PwC shall immediately cease, and in the event
the Agreement is terminated for any other reason, upon
termination PwC shall cease, the use of the name "Commerce
One," the xxxx "C1", any derivations thereof or any other xxxx
proprietary to C1.
3.8 MARKETING MATERIALS. In addition to any other guidelines set
forth by the MDC, (i) all C1 created brochures and marketing
materials relating to the C1 Software shall contain a statement
that C1 and PwC are strategically aligned and that PwC is a
preferred systems integration and consulting partner, and (ii)
all references to third party integration and consulting
partners shall be made in such a manner as to preserve the
preferred implementor status of PwC. MCI Systemshouse shall be
the only other entity designated or allowed to hold itself out
as a preferred systems integrator and consulting partner of C1.
4. BETA PRODUCTS; BETA INTEGRATION SITES
4.1 BETA PRODUCTS. C1 shall provide to PwC advance copies and beta
releases of all C1 Software as soon as reasonably possible.
4.2 BETA INTEGRATION SITES. The MDC will agree upon not less than
five customers to serve as beta integration sites with respect
to the C1 Software. PwC shall perform the implementation
functions relative to such C1 Software at such beta integration
sites. PwC shall perform such implementation services at a
price necessary to attract the agreed upon customers to
participate in such testing while attempting to minimize the
extent to which billing rates are discounted; however, for the
first three customers, PwC shall use reasonable commercial
efforts to perform such services at discounted rates but shall
not be required to discount such rates below forty five percent
(45%) of PwC's stated rates for such services for the first
three customers, or below fifty-five percent (55%) of PwC's
stated rates for such services for the fourth and fifth
customers. C1 will use reasonable commercial efforts to license
the C1 Software at a price necessary to attract the agreed upon
customers to participate in such integration and will supply
necessary technical expertise and support with respect to the
beta integration site implementations under a mutually agreed
upon timetable.
5. C1 SOFTWARE SALES
5.1 C1 SOFTWARE SALES. C1 may, at its option, sell C1 Software
either directly to clients or sell it to PwC who will resell it
to clients; provided that, direct sales to clients will comply
with the provisions set forth in Section 5.1.1 below and sales
to PwC for resale will comply with the provisions set forth in
Section 5.1.2 below.
5.1.1 DIRECT SALES TO CLIENTS. When C1 sells C1 Software directly to
a client and PwC is to be the implementor of the C1 Software,
the client, C1 and PwC will enter into a client contract. The
client contract will provide that:
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(a) C1 will provide to the client the C1 Software and
related license.
(b) PwC will provide to the client:
(i) assistance and/or management in the
installation, implementation and operation of
C1 Software, including without limitation,
requirements definition, change integration,
process analysis and design;
(ii) assistance in integrating C1 Software into
the client's existing systems; and
(iii) training for client personnel in the use or
maintenance of C1 Software ((i), (ii) and
(iii) together are "C1 Installation and
Related Services").
(c) In exchange for the consideration set forth in
sections (a) and (b) above, the client will pay C1 and
PwC such fees as may be agreed upon from time to time.
(d) C1 will supply to the client any Upgrades to C1
Software under C1's standard maintenance and support
terms.
5.1.2 SALES TO PwC FOR RESALE TO CLIENT. The sale of C1 Software to
PwC and PwC's resale of C1 Software shall occur as follows:
(a) C1 will provide to PwC the C1 Software and related
license. PwC will provide said software and related
license to the client.
(b) PwC will provide to the client C1 Software
Installation and Related Services.
(c) In exchange for the C1 Software and related license,
PwC will pay to C1 an amount equal to C1's standard
list price for such C1 Software, less an agreed upon
discount which shall not be less than any other
reseller's discount, except for SAP; provided,
however, PwC shall be entitled to the same discount
offered to SAP in situations where PwC is in direct
competition with SAP, and provided, further, in no
event shall such discount be less than 30%. PwC may
charge the client such amounts as PwC may determine in
its sole discretion in exchange for the C1 Software
and related license and the C1 Software Installation
and Related Services.
(d) C1 will supply to PwC any Upgrades to C1 Software
under the terms and conditions for its so doing set
forth in the definitive reseller agreement described
in section (e) below. PwC will supply these Upgrades
to the client under the terms and conditions for its
so doing set forth in the PwC's agreement with its
customer.
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(e) Within a reasonable time following the conclusion of
the beta integration projects, PwC and C1 shall enter
into a more detailed Value Added Reseller Agreement
consistent with the terms hereof and containing other
mutually acceptable terms customary for the software
industry. Such agreement shall not diminish C1's
ability to communicate with and survey the licensees
of the C1 Software. Such agreement will also provide
that C1 will always execute a license agreement with
the end-user for C1 Software.
6. PREFERRED IMPLEMENTOR STATUS
6.1 PwC AND MCI SYSTEMSHOUSE. PwC shall be designated as a
preferred implementor or preferred systems integration and
consulting affiliate with respect to the C1 Software. C1 shall
neither name nor allow any other entity to promote itself as a
preferred implementor or preferred systems integration and
consulting partner of C1, except for MCI Systemshouse;
provided, however, in the event that MCI Systemshouse
terminates its status as a preferred implementor or preferred
systems integration and consulting partner of C1, C1 shall have
the right to designate another entity to replace MCI
Systemshouse as a preferred implementor or preferred systems
integration and consulting partner provided, further, however,
the Parties agree that any such replacement entity shall not be
a "Big Five" accounting firm or Xxxxxxxx Consulting and any
such replacement entity shall be required to make an investment
in C1 equal to or greater than the cumulative total investment
in C1 made by PwC up to such time pursuant to this Agreement.
In the event C1 designates such a replacement entity as
provided in this Section 6.1 any provisions herein which
specifically reference MCI Systemshouse shall apply to such
replacement entity.
6.2 PROMOTION OF PARTIES. In furtherance of the Parties' joint
efforts with respect to the C1 Software:
(a) C1 shall publicly designate PwC as a C1 preferred
systems integration and consulting affiliate;
(b) C1 shall notify PwC of all potential implementation
opportunities with respect to the C1 Software of which
C1 becomes aware, except for those opportunities which
are brought to the attention of C1 by another systems
implementor;
(c) C1 shall provide to PwC, on a timely, periodic and
confidential basis, advance information collected by
C1 regarding potential customer prospects with respect
to the C1 Software;
(d) C1 shall not engage in any active pattern of promotion
with respect to any third party, other than MCI
Systemshouse, as an implementor of the C1 Software;
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(e) For one year following the execution of this
Agreement, C1 shall not enter into any joint
development agreement or any similar business
arrangement related to the development of the C1
Software with any other systems implementor other than
MCI Systemshouse with respect to MarketSite,
Electronic Commerce Network, the Commerce One extranet
application that provides the interoperability,
functionality and transactive content that enables an
on-line trading community;
(f) PwC shall publicly designate C1 as its preferred
solution provider for MRO (indirect) Electronic
Procurement Solutions and PwC shall announce C1 as its
preferred solution provider for MRO (indirect)
Electronic Procurement Solutions to PwC's internal
staff directly involved in MRO (indirect) electronic
procurement solutions consulting using its Lotus Notes
communications system or any other system as
determined by PwC in its sole discretion;
(g) No employees, partners or consultants of PwC who
are members ("EPS Members") of PwC's US MRO (indirect)
Electronic Procurement Solutions practice or any
successor practice thereto ("EPS Practice") shall
enter into any agreements or arrangements pursuant to
which such EPS Members will co-develop or co-market a
product which directly competes with C1 in the MRO
(indirect) electronic procurement solutions market;
(h) PwC shall notify C1 of all MRO (indirect)
electronic procurement solution opportunities of which
PwC's EPS Practice becomes aware, except for those
opportunities which are brought to the attention of
PwC by another MRO (indirect) electronic procurement
solutions provider;
(i) PwC shall provide to C1, on a timely, periodic and
confidential basis, advance information collected by
PwC's EPS Practice regarding potential customer
prospects with respect to an MRO (indirect) electronic
procurement solution;
(j) PwC's EPS Practice shall not engage in any active
pattern of promotion with respect to any third party
as an MRO (indirect) electronic procurement solution
provider; and
(k) Within 120 days following the execution of this
Agreement, C1 shall be included in PwC's solution
center network.
6.3 RIGHT OF FIRST REFUSAL. PwC shall have a right of first refusal
with respect to other consulting and systems implementation
firms with respect to any consulting project of total value
greater than $500,000 (i.e. the total billable work for such
project exceeds $500,000) performed for C1 in relation to the
C1 Software; provided that this section 6.3 shall not apply to
any joint development agreement entered into by C1 that
otherwise complies with the terms of this Agreement. This right
of first refusal is not intended to apply to consulting work to
be performed for clients of C1. Within 20 days following a
determination by C1 that C1 requires consulting services, C1
shall notify PwC of such determination and C1 and PwC shall
negotiate in good faith regarding the terms of PwC's
involvement in the consulting project (the "Project"). If C1
and PwC cannot agree upon the terms of PwC's involvement within
30 days of PwC's receipt of such notice, C1 shall be entitled
to enter into an agreement with a third party to perform the
Project on terms and conditions not less favorable to C1 than
those last offered by PwC with respect thereto.
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6.4 ATTENDANCE AT BOARD MEETINGS. Throughout the term of this
Agreement, PwC shall be entitled to observe meetings called or
held by the Board of Directors of C1 and to receive materials
provided or distributed to the Board of Directors of C1 as
provided in the Observers Rights Agreement attached hereto as
Exhibit B.
6.5 Requirements FOR OTHER SYSTEMS IMPLEMENTORS. C1 shall require
each third party systems implementor, other than MCI
Systemshouse, to pass a certification qualification test within
six (6) months of beginning implementation of C1 Software
products. The requirements of such certification tests shall be
jointly agreed upon by C1 and PwC and shall be administered by
C1; provided that in the event the Parties are unable to agree
on such requirements after a period of twenty (20) days, C1
shall develop commercially reasonable requirements.
6.6 MOST FAVORED IMPLEMENTOR STATUS. Except for SAP but subject to
Section 5.1.2(c), the price of the C1 Software sold by C1 to
PwC for resale or for use by PwC shall be equal to or lower
than the lowest price charged by C1 to any other systems
implementor reseller, including MCI Systemshouse with regard to
the prices and other material terms and conditions provided to
such other implementor, when considered collectively.
6.7 OPTIONAL EQUITY INVESTMENT. For 120 days following the
execution of this Agreement, PwC shall have the option, but not
the obligation, to purchase shares of Series D Preferred Stock
at a price equal to 125% of the lowest price paid by the Series
D Preferred Stock investors in the Series D Preferred Stock
financing. Such purchase shall be on the terms and conditions
as set forth in the Series D Preferred Stock financing
agreements. Notwithstanding the foregoing, in no event shall
PwC's investment be less than $2,500,000 or more than
$5,000,000 upon exercise of the rights granted in this Section.
7. PERSONNEL AND TRAINING
7.1 PwC PERSONNEL. For the first year after the Effective Date of
this Agreement and pursuant to and subject to the terms and
conditions set forth in the Human Resources Agreement to be
agreed upon and entered into by the Parties within 30 days of
the date hereof (the "Human Resources Agreement"), PwC shall
provide C1 with a total of 18,000 man-hours to be performed by
various PwC personnel and/or consultants of PwC (the "PwC
Staff") and one partially dedicated PwC partner (the "PwC
Partner") plus certain ancillary support associated with the
employment of these people, including, without limitation,
items such as payment of salaries (including without
limitation, employee benefits and applicable withholding taxes,
such as FICA, worker's compensation, unemployment and other
like items) and provision of laptop computers and computer
software (the "Support"). In the event that C1 does not utilize
all 18,000 hours during such year and this Agreement is still in
effect, C1 shall be entitled to carry over up to 2,700 unused
hours to the next year
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for no additional cost. PwC and C1 shall determine in good faith the amount
of resources required from time to time based upon the needs of C1 and the
availability of the PwC Staff; provided, however, no PwC Human Resources (as
defined below) shall be provided to C1 until such time as the Human Resources
Agreement has been executed by the Parties. The PwC Partner shall devote a
sufficient amount of his/her professional time in order for him/her to carry
out his/her responsibilities under this Agreement. The PwC Staff and the PwC
Partner shall be responsible for assisting C1 with product enhancement,
quality assurance, testing procurement consulting and sales support and
implementation activities. Subject to the terms of the Human Resources
Agreement, PwC shall have the right to rotate various people between the C1
headquarters in Walnut Creek, California (the "C1 Headquarters") and various
client sites. Notwithstanding the foregoing, PwC's obligation to provide the
18,000 hours, the PwC Partner and the Support (collectively, the "PwC Human
Resources") shall cease (i) immediately in the event (a) C1 is dissolved or
liquidated, (b) PwC gives C1 notice of its intention to terminate the
Agreement pursuant to Section 11.3.2, or (c)the Human Resources Agreement is
terminated, or (ii) upon termination, in the event PwC gives C1 75 days'
written notice (the "Termination Notice") of PwC's decision to terminate this
Agreement pursuant to Section 11.3.1; provided, however, in the event that
PwC gives C1 the Termination Notice, PwC shall continue to provide the PwC
Human Resources during the 75 day notice period as is necessary in order to
complete, to the extent possible, any current projects on which the PwC Staff
and/or the PwC Partner are working.
7.2 TRAINING. During the first 12 months of the Agreement, PwC
shall commit to train a minimum of 25 PwC personnel to perform
PwC's obligations hereunder (including both sales-related, and
Services-related obligations). Such training shall be provided
by C1 as part of the complimentary training provided in
accordance with details below, or at PwC's discretion, by a PwC
trainer.
On a schedule reasonably acceptable to both parties, C1 will provide up
to three training days per trainee per calendar year during each year of the
term of the Agreement for no more than 100 trainees in the marketing, sale,
support, use, implementation and operation of the C1 Software. For purposes of
this calculation, a "training day" shall refer to one calendar day of
instruction provided by a C1 instructor for one PwC trainee. A training day
could take place as either structured classroom training or on-site at a client
location. The parties intend to execute a training strategy whereby C1 is
"training the trainers" at PwC. At PwC's option, PwC may purchase additional
training days from C1, in advance, for a reduced fee as follows: (i) for
purchases of 1-299 training days, a discount of 33% off of the then current list
price will apply, (ii) for purchases of greater the 300 training days, a
discount of 40% off of the then current list price will apply. Training priced
under this discount must be purchased at least thirty (30) days in advance. Any
training days purchased but not utilized or any free training days (i.e., the 3
days provided at no charge to PwC for 100 trainees) remaining unused at the end
of the each year will expire. C1 will send to PwC a
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quarterly report on the status/balance of such unused training days. PwC when
ordering training to be applied against the purchased training credit amount
shall quote a reference number from the applicable purchase order to ensure
credit against the prepaid training day balance. The Parties shall agree on a
mutually acceptable cancellation policy for scheduled training classes. It is
understood that all C1 technical training shall be provided at C1's Walnut
Creek, California facilities, at no cost to PwC, and sales training will be
provided at PwC regional offices or other similar facilities which will be made
available by PwC and PwC shall pay the out-of-pocket cost of travel plus lodging
of the C1 representative performing the training.
C1 shall provide to PwC sufficient copies of C1 Software and related
materials as shall be reasonably required for the training of the PwC personnel;
provided that such copies shall be used by PwC solely for internal training
purposes. C1 shall be entitled to receive adequate training by PwC on PwC's full
value procurement system for up to 20 training days per calendar year, at no
cost to C1 if such training takes place at one of PwC's offices as designated by
PwC, or for the out-of-pocket cost of travel plus lodging of the PwC
representative performing the training, if such training is performed at a C1
office or another location designated by C1.
7.3 PWC SERVICES FEE. In consideration of PwC supplying the PwC
Human Resources, after the parties have entered into the Human
Resources Agreement, PwC shall be entitled to receive a fee
equal to 5% of C1's license fee revenues, up to a maximum fee
of $3,500,000. In the event the relationship between license
fees, revenues and other revenues received by C1 from its
licensees (i.e., consulting fees, maintenance fees and support
fees) differs materially from C1's business plan as it exists
on the date hereof and as disclosed to PwC, the parties shall
negotiate the fees due under this Section 7.3 in good faith.
For purposes of this Section 7.3, "license fee revenues" shall
mean license fees, to the extent received in cash by C1, net of
withholding taxes and other deductions, from customers;
provided that it is understood and agreed that "license fee
revenues" shall not include any amounts received by C1 for
maintenance and support services, consulting or professional
service fees, any transaction fees or any other amount or
payment for goods or services not expressly included within the
definition of "license fee revenues" set forth above. Such fee
shall be paid quarterly in arrears; provided, however, in the
event that this Agreement is terminated by C1 or by PwC
pursuant to section 11.3.2 below, or there is a Change of
Control of C1, prior to PwC being paid the full $3,500,000
under this Section 7.3, PwC shall be entitled to be paid a pro
rata amount of $3,500,000 based upon the number of hours of the
PwC Human Resources that have been provided to C1 out of 18,000
hours. For example, if PwC provides 9,000 hours of the PwC
Human Resources, PwC shall be entitled to be paid 5% of C1's
gross revenues, up to a maximum fee of $1,750,000 (or 1/2 of
$3,500,000).
In the event that there is a Change in Control of C1, all remaining
amounts due to PwC under this Section 7.3 shall become immediately due and
payable to PwC regardless of the amount of C1's license fee revenues on that
date.
For purposes of this Agreement, a Change in Control shall mean the
occurrence of one or more of the following events:
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(a) the direct or indirect sale, lease, exchange or other
transfer of all or substantially all of the assets of
an entity to any person or entity or group of persons
or entities acting in concert as a partnership or
other group (a "Group of Persons");
(b) the consummation of any consolidation or merger of an
entity with or into another corporation with the
effect that the stockholders of such entity
immediately prior to the date of the consolidation or
merger hold immediately after such merger or
consolidation less than 51% of the combined voting
power of the outstanding voting securities of the
surviving entity of such merger, or the corporation
resulting from such consolidation, ordinarily having
the right to vote in the election of directors (apart
from rights accruing under special circumstances)
immediately after such merger or consolidation;
(c) the stockholders of an entity shall approve any plan
or proposal for the liquidation or dissolution of such
entity;
(d) a person or entity or Group of Persons acting in
concert as a partnership, limited partnership,
syndicate or other group shall, as a result of a
tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have
become the direct or indirect beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act of
1934, as amended) of securities of an entity
representing 30% or more of the combined voting power
of the then outstanding securities of such entity
ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the
election of the directors; and
(e) a person or entity or Group of Persons, together with
any affiliates thereof, shall succeed in having a
sufficient number of its nominees elected to the Board
of Directors of an entity such that such nominees,
when added to any existing directors remaining on the
Board of Directors of such entity after such election
who are affiliates of such person, entity or Group of
Persons, will constitute a majority of the Board of
Directors of such entity.
8. CONFIDENTIALITY; INTELLECTUAL PROPERTY
8.1 CONFIDENTIALITY GENERALLY. During the term of this Agreement
and for a period of three (3) years from the termination of
this Agreement (and for a period of ten (10) years from the
termination of this Agreement in the case of source code), each
Party hereto shall take all reasonable steps which are
necessary or reasonable to safeguard the secrecy and
confidentiality of, and proprietary rights to, the Confidential
Information disclosed or provided by the other Party, and shall
not disclose the foregoing to any third party (other than any
employee, agent, director, officer, consultant or contractor
and on a "need to know" basis under suitable agreements of
confidentiality with such parties) or use the same for purposes
other than those set forth herein.
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8.1.1 Each Party shall make no use whatsoever, directly or
indirectly, of any Confidential Information of the other Party,
except as required in connection with the performance of its
obligations under this Agreement and in accordance with its
terms.
8.1.2 Upon either Party's request at any time and for any reason,
the other Party shall immediately deliver to the Party so
requesting all materials (including all copies) in its
possession which contain Confidential Information of that Party.
8.2 CONFIDENTIALITY WITH RESPECT TO THE TRC AND THE MDC.
Confidential Information of a Party may be (and in certain
circumstances must be) disclosed by the Party to the TRC or the
MDC. The employees designated as members of the TRC and the MDC
may share with their employers any and all information,
including Confidential Information, disclosed to the TRC or the
MDC; provided, however, that the requirements regarding
Confidential Information set forth in Section 8.1 above will be
observed by the members of the TRC and the MDC, the Parties and
their employees with respect to Confidential Information
disclosed by either Party to the TRC or the MDC.
8.3 INTELLECTUAL PROPERTY. All inventions, development,
improvements, patents, patent applications, trade secrets,
processes, concepts, uses, know how, software applications,
designs, works of authorship, algorithms, lists, marketing and
business plans and other work product and intellectual property
(collectively, "Intellectual Property") relating to C1 Software
shall be the sole property of C1. . At any time or from time to
time on and after the date of this Agreement, PwC shall at the
request of C1 (i) deliver to C1 such records, data or other
documents consistent with the provisions of this Agreement, and
(ii) execute, and deliver or cause to be delivered, all such
assignments, consents, documents or further instruments of
transfer or license, and (iii) take or cause to be taken all
such other actions, as C1 may reasonably deem necessary or
desirable in order for C1 to obtain the full benefits of this
Agreement and the transactions contemplated hereby. C1 shall,
for any Intellectual Property relating to C1 Software owned by
it and not by PwC provide to PwC a temporary, limited,
non-exclusive, non-transferable license co-extensive with the
term of this Agreement to use any and all such Intellectual
Property solely for the purposes set forth in this Agreement
(i.e., demonstration, internal training and support purposes).
8.4 DATA COLLECTION. C1 and PwC may each compile for its own use and
purposes, and shall have exclusive use and ownership of, any
captured cost data or other information. Any such statistical
data or information compiled by either C1 or PwC shall be its
sole property, and it may use, sell or distribute such data or
information for any purposes not prohibited by this Agreement
or any other agreement.
8.5 LICENSE. Following the execution of this Agreement, PwC, on
behalf of PwC's Business Process Outsourcing service line and
C1 shall negotiate in good faith regarding a license to
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the C1 Software for the purpose of allowing PwC to provide Business Process
Outsourcing services. PwC's Business Process Outsourcing service line is not
bound to choose Commerce One as its preferred solution by virtue of the
preceding language.
9. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION BY PwC
9.1 PwC REPRESENTATIONS AND WARRANTIES. PwC hereby represents and
warrants to C1 as follows:
(a) any C1 Software Installation and Related Services
performed by PwC shall be performed in a workmanlike
and competent manner.
(b) PwC has full right, power, and authority to enter into
this Agreement and to carry out its obligations
hereunder.
9.2 INDEMNIFICATION. Subject to the provisions of Section 9.3
below, PwC shall indemnify C1, its employees, agents, officers,
shareholders, directors and affiliates for, defend and hold C1
harmless from and against, any costs (including attorneys'
fees) or damages finally awarded against C1 and payable to a
third party that are attributable to
(a) any breach of the warranties set forth in 9.1; and
(b) any claims by third parties for death, personal injury
or damages resulting from the wrongful acts or
negligence of PwC or its employees, agents, officers
or directors.
(c) C1 shall give PwC prompt written notice of any such
claim or liability, and allow PwC to control the
defense of such claim and all related settlement
negotiations and fully cooperate with PwC in such
defense and negotiations at PwC's expense. In the
event that C1 wishes to participate in the defense of
any such claim, C1 shall be entitled to participate at
C1's own expense.
10. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION BY C1
10.1 C1 REPRESENTATIONS AND WARRANTIES. C1 hereby represents and
warrants to PwC as follows:
C1 has full right, power and authority to enter into this
Agreement and to carry out its obligations hereunder, and the
execution of the terms hereof do not violate any other
agreement to which C1 is a party.
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10.2 INDEMNIFICATION BY C1. Subject to the provisions of Section
10.3 below, C1 shall indemnify PwC and the PwC Affiliates for,
defend and hold each of them harmless from and against, any
costs (including attorneys' fees) or damages finally awarded
against PwC and/or the PwC Affiliates and payable to a third
party that are attributable to
(a) any breach of the warranties set forth in Section 10.1
above; and
(b) arising out of claims by third parties for death,
personal injury or damages resulting from the wrongful
acts or negligence of C1 or its employees, agents,
officers or directors.
PwC and/or the PwC Affiliates, as applicable, shall give C1
prompt written notice of any such claim or liability, and allow
C1 to control the defense of such claim and all related
settlement negotiations and fully cooperate with C1 in such
defense and negotiations. In the event that PwC and/or the PwC
Affiliates wish to participate in the defense of any cash
claim, C1 may allow PwC and/or the PwC Affiliates to
participate at PwC's and/or the PwC Affiliates' own expense.
10.3 THIRD PARTY INFRINGEMENT.
(a) INDEMNITY. C1 shall indemnify PwC and PwC Affiliates
for, defend and hold each of them harmless from and
against, any costs (including attorney's fees) or
damages arising from any claim that the C1 Software
infringes a copyright, United States patent or Trade
Secret and shall pay any settlements entered into or
damages awarded against PwC and the PwC Affiliates to
the extent based on such a claim, provided that (i)
PwC and/or the PwC Affiliates, as applicable, notifies
C1 promptly in writing of the claim; (ii) C1 has sole
control of the defense and all related settlement
negotiations; and (iii) PwC and/or the PwC Affiliates,
as applicable, provides C1 with all necessary
assistance, information, and authority to perform the
above, at C1's sole cost and expense.
(b) EXCLUSIONS. C1 shall have no liability for any claim
of infringement based on (i) PwC's use of other than
the latest release of the C1 Software if the
infringement would have been avoided by use of the
latest release; (ii) PwC's modification of the C1
Software if the infringement would have been avoided
without such modification; or (iii) the combination or
use of the C1 Software furnished hereunder by PwC with
materials not furnished by C1 if such infringement
would have been avoided by use of the C1 materials
alone.
(c) ALTERNATIVES. In the event the C1 Software licensed to
PwC hereunder is held to, or C1 believes is likely to
be held to, infringe a copyright, trade secret or
patent C1 shall have the right at its sole option and
expense to (i) substitute or modify the C1 Software
license to PwC hereunder so that it is noninfringing;
or (ii) obtain for PwC a license to continue using the
C1
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Software as provided in this Agreement; or (iii) if
(i) and (ii) are not reasonably practicable, terminate
the license granted to PwC pursuant to the last
sentence of Section 8.3 hereof.
(d) The foregoing states the sole obligation and exclusive
liability of C1 (express, implied, statutory or
otherwise) for any infringement on claims or claims of
infringement of any patent, copyright or trade secret
by reason of PwC's use of the C1 Software pursuant to
the last sentence of Section 8.3 hereof.
10.4 INSURANCE. C1 shall maintain in full force and effect at all
times the insurance specified in Exhibit A in the minimum
amounts set forth and shall name PwC as an additional named
insured. PwC represents and warrants that it is self insured in
amounts satisfactory to PwC to cover its contractual
obligations hereunder.
11. EFFECTIVE DATE, TERM AND TERMINATION
11.1 EFFECTIVE DATE. This Agreement shall become effective (the
"Effective Date") as of the date hereof.
11.2 TERM. Unless terminated earlier as provided in this Agreement,
this Agreement shall be for an initial term of (i) three years
if PwC does not make an equity investment in C1, or (ii) five
years if PwC makes an equity investment in C1 as provided in
Section 6.6, and thereafter will continue until either party
gives at least 90 days' written notice of termination.
11.3 TERMINATION.
11.3.1 WITHOUT CAUSE. PwC may terminate this Agreement upon 75 days'
written notice to C1.
11.3.2 WITH CAUSE.
(a) C1 may terminate this Agreement for material breach by
PwC upon 30 days' written notice to PwC if said breach
is not cured by PwC within such period. PwC may
terminate this Agreement for material breach by C1
upon 30 days' written notice to C1 if said breach is
not cured by C1 within such period.
(b) Either party may terminate this Agreement effective
immediately if the Parties are not able to negotiate
in good faith and execute the Human Resources
Agreement and the Marketing Plan within 30 days
following the execution of this Agreement, unless
otherwise agreed by the Parties.
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(c) Finally, either Party may terminate this Agreement
effective immediately upon written notice to the
other, if at any time the other Party:
(i) files a voluntary petition for bankruptcy;
(ii) is adjudged a bankrupt;
(iii) has a trustee or receiver is appointed by a court
for all or a substantial portion of its respective
assets;
(iv) has a court assume jurisdiction of its assets
under a reorganization act;
(v) suspends business;
(vi) makes an assignment of its assets for the benefit
of creditors; or
(vii) enters into a composition for the benefit of
creditors.
11.4 EFFECT OF TERMINATION.
11.4.1 Unless the Parties agree to the contrary, the termination of
this Agreement for any reason shall not relieve a Party of its
obligations:
(a) to make payments hereunder which have accrued prior to
termination; and
(b) to complete its obligations to clients or relating to
obligations for clients existing at the termination
date pursuant to Sections 5.1 and 5.2.
11.4.2 SURVIVAL. In addition, the following Sections shall survive
termination or expiration of this Agreement: 1, 8.1, 8.2, 8.3,
8.4, 9, 10, 11.4, 12 and 13.
11.4.3 TERMINATION OF HUMAN RESOURCES AGREEMENT. In the event that PwC
provides notice to C1 that it is terminating this Agreement
pursuant to Section 11.3.1, PwC shall be entitled to terminate
the Human Resources Agreement upon 75 days' written notice to
C1. In the event that PwC provides notice to C1 that it is
terminating this Agreement pursuant to Section 11.3.2, PwC
shall be entitled to terminate the Human Resources Agreement
and cease its provision of the Human Resources immediately.
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GENERAL PROVISIONS
12.1 HEADINGS. The headings in this Agreement and Exhibits are
provided for reference only and shall not be used as a guide to
interpretation.
12.2 SEVERABILITY. If any provision of this Agreement shall be
adjudicated to be invalid or unenforceable, the Agreement shall
be amended to delete such provision and the Agreement shall
otherwise remain in full force and effect as amended unless
such amended Agreement does not reflect the purposes of the
Parties in entering into the Agreement.
12.3 AUTHORITY OF PARTIES. Neither Party shall have any authority,
express or implied, to assume or create any obligation on
behalf of the other Party..
12.4 PARTIES INDEPENDENT. In making and performing this Agreement
the parties act and shall act at all times as independent
contractors and nothing contained in this Agreement shall be
construed or implied to create an agency, partnership or
employee/employer relationship between C1 and PwC or between
any Party hereto and any officer or employee of the other
Party. Each Party shall be responsible for the acts, negligence
and omissions of its employees, agents servants and
subcontractors. Each Party accepts full and exclusive liability
with respect to its own employees for the payment of any and
all contributions and taxes imposed by local, state or federal
law, including but not limited to taxes or contributions for
social security, unemployment insurance, worker's compensation,
old age retirement benefits, pensions and annuities, and agrees
to provide indemnity for any such payment made by the other
Party.
12.5 ASSIGNMENT. This Agreement shall be binding on and inure to the
benefit of the Parties and their respective successors and
assigns, PROVIDED THAT neither PwC nor C1 may assign its rights
or obligations hereunder to any party which is not controlled
by or under common control with the assigning party without the
prior written consent of the other Party.
12.6 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement may be submitted to arbitration by
either party hereto in accordance with the rules of the
American Arbitration Association for Commercial Arbitration,
and judgment upon the award rendered by the arbitrators may be
entered in any court having proper jurisdiction. The Parties to
any such arbitration shall share equally the cost of the
arbitrators, but shall each bear its own legal, accounting and
similar fees and expenses; provided, however, that the
arbitrators shall require the Party or Parties, if any, not
prevailing in such arbitration to pay all costs of the
arbitrators and to reimburse the prevailing Party or Parties,
if any, for their legal, accounting and other similar fees and
expenses in connection with the arbitration. Such arbitration
and determination shall be final and binding on the parties.
Such arbitration shall be held in San Francisco, California or
such other location as the parties may agree.
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12.7 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Exhibits
attached hereto contain the entire agreement between the
parties hereto with respect to the subject matter hereof and
supersedes all prior agreements or understandings between the
parties hereto with respect thereto. This Agreement may be
amended only by an agreement in writing signed by the parties
hereto.
12.8 NOTICES. Any notice required or permitted to be given pursuant
to this Agreement shall be in writing and shall be personally
delivered, delivered by next-day air courier, or mailed (by
registered or certified mail, return receipt requested and
postage prepaid) or delivered by facsimile as follows:
IF TO C1:
Xxxxx Xxxxxxxx
V.P. Marketing
Commerce One
0000 Xxxxxxx Xxx.
Xxxxx 000
Xxxxxx Xxxxx XX
Phone: 000-000-0000
Fax: 000-000-0000
IF TO PRICE WATERHOUSE
Xxxxxx Xxxxx
PricewaterhouseCoopers LLP
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xx. Xxxxx, XX 00000
Fax: (000) 000-0000
WITH A COPY TO
Office of the General Counsel
PricewaterhouseCoopers LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
or to such other addresses as the Party to whom notice is given
may have furnished to the other Party in writing, in accordance
herewith. Any communication shall be deemed to have been given,
in the case of personal delivery or confirmed facsimile, on the
date of delivery; in the case of delivery of air
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courier, on the business day after delivery to the applicable
air-courier service; and in the case of mailing, on the third
business day following the day on which the piece of mail
containing such communication is posted.
12.9 WAIVER. No terms or provisions hereof shall be deemed waived
and no breach consented to or excused, unless such waiver,
excuse or consent shall be in writing and signed by the Party
claimed to have waived or consented. The consent, waiver or
excuse by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by such other Party.
12.10 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State
of New York, excluding its conflicts of laws rules.
12.11 FORCE MAJEURE. Neither Party shall be liable or deemed to be in
default for any delay or failure to perform under this
Agreement or for interruption in the functions of the
proprietary products or services resulting, directly or
indirectly, from any cause beyond such Party's reasonable
control.
13. LIMITATION OF LIABILITY
EXCEPT AS EXPRESSLY SET FORTH ABOVE, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES TO THE OTHER PARTY WITH RESPECT TO ANY SERVICES OR
MATERIALS PROVIDED UNDER THIS AGREEMENT, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SATISFACTORY QUALITY OR
NONINFRINGEMENT OR ANY IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE WITH RESPECT TO SUCH ITEMS. EXCEPT FOR (A) INFRINGEMENT OF
THE OTHER PARTY'S INTELLECTUAL PROPERTY RIGHTS, (B) A MATERIAL BREACH OF SECTION
8, OR (C) A BREACH OF SECTION 6, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY SPECIAL, CONSEQUENTIAL, INDIRECT, OR INCIDENTAL DAMAGES ARISING OUT OF OR
RELATED TO THIS AGREEMENT, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OR IS AWARE OF THE POSSIBILITY OF
SUCH DAMAGES. IN THE EVENT OF A BREACH BY C1 OF ITS OBLIGATIONS UNDER SECTION 6,
C1'S LIABILITY TO PwC BY REASON OF SUCH BREACH SHALL IN NO EVENT EXCEED $3.5
MILLION.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
authorized officers of the respective parties as of the day and year first above
written.
COMMERCE ONE, INC. PRICEWATERHOUSECOOPERS LLP
By: By:
---------------------------------------- ---------------------------
Title: Title:
------------------------------------ ------------------------
Date: Date:
------------------------------------ ------------------------
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EXHIBIT A
---------
Insurance
EXHIBIT B
---------
OBSERVATION RIGHTS AGREEMENT
[COMMERCE ONE LETTERHEAD]
July __, 1998
PricewaterhouseCoopers LLP
[Insert Address]
Attention: [Insert Name]
Re: Agreement entered into as of ____ day of July, 1998 by and
between Commerce One, Inc., a California Corporation (the
"Company"), and PricewaterhouseCoopers LLP ("PwC"), a
registered Delaware Limited Liability Partnership (the
"Agreement")
Gentlemen:
This letter is provided in connection with the Agreement dated as of
July __, 1998 by and between the Company and PwC.
The Company will allow one authorized representative of PwC
("Representative") to attend all meetings of the Board of Directors of the
Company in a non-voting observer capacity, and shall provide the
Representative with such notice of and other information with respect to such
meetings as are delivered to the directors of the Company; provided that the
Company reserves the right to withhold any information or to exclude the
Representative from any meeting or portion thereof if delivery of such
information or attendance by such Representative could adversely affect the
attorney-client privilege between the Company and its counsel. The Company
shall notify the Representative in advance of the taking of any written
action by the Board of Directors of the Company in lieu of a meeting thereof
and shall provide the Representative with a copy of any proposed written
resolutions or unanimous written consents prior to their execution by the
Board of Directors. PwC and the Representative shall maintain the
confidentiality of all financial, confidential and proprietary information of
the Company obtained by them as a result of these rights, and the
Representative agrees that the information provided by the Company pursuant
to these rights shall not be made available to any competitor or customer of,
or vendor to, the Company or any affiliate or associate of any such entity.
The rights granted hereunder shall terminate upon the termination of
the Agreement. The rights granted hereunder may not be assigned or otherwise
conveyed by PwC or by any subsequent transferee of any such rights without
the prior written consent of the Company.
Very truly yours,
Commerce One, Inc.
--------------------------------
By: Xxxx Xxxxxxx, Chief Executive Officer
Agreed to and accepted by PricewaterhouseCoopers LLP this __ day of
July, 1998.
PricewaterhouseCoopers LLP
By: ________________________________
Title: ________________________________
