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EXHIBIT 10.11
STRATEGIC ALLIANCE AGREEMENT
BY AND BETWEEN
EMERALD-DELAWARE, INC.,
A DELAWARE CORPORATION
AND
AT&T SOLUTIONS INC.,
A DELAWARE CORPORATION
EFFECTIVE AS OF
MARCH 15, 2000
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TABLE OF CONTENTS
1. PREAMBLE............................................................................................ 1
2. THE STRATEGIC ALLIANCE.............................................................................. 2
2.1 PURPOSE OF STRATEGIC ALLIANCE.............................................................. 2
2.2 TERM OF THE STRATEGIC ALLIANCE............................................................. 2
2.3 PARTIES' DUTIES............................................................................ 2
(a) Joint Duties......................................................................... 2
(b) AT&T Solutions Specific Duties....................................................... 3
(c) Emerald Solutions' Specific Duties................................................... 3
2.4 PRINCIPAL PLACE OF STRATEGIC ALLIANCE...................................................... 3
2.5 INDEPENDENCE; INDEPENDENT ACTIVITIES; TRANSACTIONS WITH AFFILIATES......................... 3
(a) Parties Otherwise Independent........................................................ 3
(b) Independent Activities............................................................... 4
(c) Appointment of contact person........................................................ 4
3. WARRANT TO PURCHASE EMERALD SOLUTIONS' STOCK........................................................ 4
4. TERMINATION OF STRATEGIC ALLIANCE................................................................... 4
(a) TERMINATION EVENTS......................................................................... 4
(b) EFFECT ON RIGHTS OF PARTIES................................................................ 5
(C) EFFECT OF TERMINATION...................................................................... 5
5. COVENANTS........................................................................................... 6
6. LIMITATION OF LIABILITY............................................................................. 8
7. MISCELLANEOUS....................................................................................... 9
7.1 EACH PARTY TO PAY OWN COSTS................................................................ 9
7.2 NO THIRD-PARTY BENEFICIARIES............................................................... 9
7.3 ENTIRE AGREEMENT........................................................................... 9
7.4 SUCCESSION AND ASSIGNMENT.................................................................. 9
7.5 COUNTERPARTS............................................................................... 9
7.6 HEADINGS................................................................................... 9
7.7 NOTICES.................................................................................... 10
7.8 GOVERNING LAW.............................................................................. 10
7.9 AMENDMENTS AND WAIVERS..................................................................... 11
7.10 SEVERABILITY............................................................................... 11
7.11 CONSTRUCTION............................................................................... 11
7.12 INCORPORATION OF EXHIBIT................................................................... 11
7.13 DISPUTE RESOLUTION......................................................................... 11
EXHIBITS:
Exhibit A - Form of Warrant
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STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement") is made as of this 15th
day of March, 2000, by and between Emerald-Delaware, Inc., a Delaware
corporation ("Emerald Solutions"), and AT&T Solutions Inc., a Delaware
corporation ("AT&T Solutions"), based on the following facts:
RECITALS
A. Emerald Solutions is an Internet and information technology consulting
firm that provides an array of information technology services to its clients,
ranging from technology infrastructure planning to enterprise resource planning
package selection to Web application development.
B. AT&T Solutions has many lines of business, including networking
professional services.
C. To take full advantage of certain goodwill, efficiencies and expertise,
as well as certain market conditions that presently exist, the parties desire to
engage jointly in a strategic business relationship (the "Strategic Alliance")
to focus on leveraging their respective sales channels and functional expertise
in several areas, with a focus on e-business solutions.
D. Each party has expended substantial time and expense to develop the
necessary expertise in their respective businesses and a significant presence in
their respective business community and to develop a client and customer base
and goodwill. Further, each party maintains as confidential its methods of doing
business, and each party desires to maintain such confidentiality except to the
extent that disclosure of it to the other party is necessary for it to perform
its duties hereunder. The parties acknowledge and agree that, as a result of
their joint operation of the Strategic Alliance, and the operation by each of
their respective business, any breach of the restrictive covenants and other
terms and conditions hereof would be severely detrimental to the their separate
business, and that, without agreeing to the restrictive covenants contained in
this Agreement, neither party would enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants herein contained, the parties agree as follows:
1. PREAMBLE.
The foregoing recitals are hereby incorporated into this Agreement
by this reference.
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2. THE STRATEGIC ALLIANCE.
2.1 PURPOSE OF STRATEGIC ALLIANCE.
The parties acknowledge and agree that the purpose of the
Strategic Alliance is to leverage each party's respective sales channels and
functional expertise in the area of e-business solutions among others.
2.2 TERM OF THE STRATEGIC ALLIANCE.
The term of the Strategic Alliance shall commence on the date
hereof and shall continue until the termination of the Strategic Alliance as
provided in Section 4 below.
2.3 PARTIES' DUTIES.
(a) JOINT DUTIES.
Each party shall, in addition to the other agreements
and covenants each makes in this Agreement, perform the following duties for the
Strategic Alliance:
(i) provide a minimum of [*] new customers for
joint account planning by the parties;
(ii) appoint one (1) contact person to facilitate the
Strategic Alliance pursuant to Section (c) below;
(iii) wherever possible for each project undertaken
by the Strategic Alliance, determine that party who will assume the prime
contractor status based upon the appropriate account and strategic relationship,
and the existing branding within the individual joint account. Notwithstanding
the foregoing, AT&T Solutions will be the prime contractor for those customers
it provides unless, at AT&T Solutions' sole discretion, it determines otherwise,
and Emerald Solutions will be the prime contractor for those customers it
provides unless, at Emerald Solutions' sole discretion, it determines otherwise;
(iv) maintain reasonable staffing levels sufficient to
meet the requirements of the business contemplated by this Strategic Alliance in
a timely manner; and
(v) make no representations, guarantees or warranties on
behalf of the other party or any of its suppliers, or regarding the performance
or functional characteristics of the services beyond those stated in the other
party's agreements.
* We have requested confidential treatment by the Commission of those
portions of the exhibit omitted and marked with an asterisk.
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(b) AT&T SOLUTIONS SPECIFIC DUTIES.
AT&T Solutions shall, in addition to the other
agreements and covenants each makes in this Agreement, make reasonable efforts
to bring to Emerald Solutions leads for potential business with partners and
prospective and current customers of AT&T Solutions. AT&T Solutions shall
further provide Emerald Solutions with networking professional services bid
opportunities on those requests for proposal ("RFP") that AT&T Solutions issues,
in support of AT&T Solutions' customers or prospective customers, that AT&T
Solutions reasonably believes Emerald Solutions to be qualified to undertake and
to have the resources to complete. Emerald Solutions will promptly respond to,
or decline interest in, RFPs issued by AT&T Solutions. If Emerald Solutions
declines interest in a particular AT&T Solutions RFP, then AT&T Solutions may
use any other solutions providers.
(c) EMERALD SOLUTIONS' SPECIFIC DUTIES.
Emerald Solutions shall, in addition to the other
agreements and covenants each makes in this Agreement, make reasonable efforts
to bring to AT&T Solutions leads for potential business with partners and
prospective and current customers of Emerald Solutions. Emerald Solutions shall
further provide AT&T Solutions with network management and
bandwidth/connectivity professional services bid opportunities on those RFPs
that Emerald Solutions issues, in support of Emerald Solutions' customers or
prospective customers, that Emerald Solutions reasonably believes AT&T Solutions
to be qualified to undertake and to have the resources to complete. AT&T
Solutions will promptly respond to, or decline interest in, RFPs issued by
Emerald Solutions. If AT&T Solutions declines interest in a particular Emerald
Solutions RFP, then Emerald Solutions may use any other solutions providers. In
addition, Emerald Solutions shall grant AT&T Solutions the first right of offer
for Emerald Solutions internal telecommunications needs.
2.4 PRINCIPAL PLACE OF STRATEGIC ALLIANCE.
The parties agree to conduct the Strategic Alliance from their
respective places of business unless and until they may otherwise agree.
2.5 INDEPENDENCE; INDEPENDENT ACTIVITIES; TRANSACTIONS WITH
AFFILIATES.
(a) PARTIES OTHERWISE INDEPENDENT.
Except for the purposes set forth in this Agreement,
the parties shall not otherwise be considered to have entered into a partnership
or joint venture, it being intended and understood that each party is an
independent contractor of the other party.
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(b) INDEPENDENT ACTIVITIES.
Each party, and any of their respective affiliates
may, notwithstanding this Agreement, engage in whatever activities it may
choose, without having or incurring any obligation to offer any interest in such
activities to the Strategic Alliance or the other party. Neither this Agreement
nor any activity undertaken pursuant hereto shall prevent the parties or any of
their respective affiliates from engaging in such activities, or require a party
or any of its affiliates to permit the Strategic Alliance or the other party to
participate in any such activities, and as a material part of the consideration
for the execution of this Agreement by each party, the parties and their
respective affiliates hereby waive, relinquish, and renounce any such right or
claim of participation.
(c) APPOINTMENT OF CONTACT PERSON.
Each party shall appoint one (1) person to act as a
contact person. The two (2) contact persons shall coordinate all work to be
performed by the Strategic Alliance. Each party may change its contact person by
not less than ten (10) business days advance written notice.
3. WARRANT TO PURCHASE EMERALD SOLUTIONS' STOCK.
Emerald Solutions, for and in additional consideration of the
covenants and agreements of AT&T Solutions under this Agreement, hereby grants
to AT&T Solutions warrants to purchase up to one million five hundred thousand
shares of Emerald Solutions' common stock, at the exercise price per share and
subject to the terms and provisions provided in the form of warrant agreement
(the "Warrant Agreement") attached hereto as Exhibit A.
4. TERMINATION OF STRATEGIC ALLIANCE.
(a) TERMINATIONS EVENTS.
This Agreement shall terminate immediately upon the occurrence
of any of the following events:
(i) after March 15, 2002, upon six (6) months prior written
notice by either party to the other of the notifying party's intent to terminate
this Agreement;
(ii) at the option of either party, upon the filing of a
petition in bankruptcy by or against the other party, whether voluntary or
involuntary, unless such petition is dismissed or discharged within sixty (60)
days from the date of such filing;
(iii) at the option of AT&T Solutions, in the event of a
material breach by Emerald Solutions of this Agreement or the Warrant, that has
not been cured by Emerald So-
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lutions within thirty (30) days after receipt of written notice from AT&T
Solutions setting forth the nature of the breach;
(iv) at the option of Emerald Solutions, in the event of a
material breach by AT&T Solutions of this Agreement which has not been cured by
AT&T Solutions within thirty (30) days after receipt of written notice from
Emerald Solutions setting forth the nature of the breach;
(v) at the option of AT&T Solutions, in the event of a sale of
twenty percent (20%) or more of the voting power of Emerald Solutions to a
material competitor of AT&T or AT&T Solutions;
(vi) AT THE OPTION OF AT&T SOLUTIONS, IN THE EVENT OF THE
APPOINTMENT OF AN INDIVIDUAL TO THE BOARD OF DIRECTORS OF EMERALD SOLUTIONS WHO
IS AN EMPLOYEE, OFFICER OR DIRECTOR OF A MATERIAL COMPETITOR OR AN AFFILIATE OF
A MATERIAL COMPETITOR OF AT&T OR AT&T SOLUTIONS.
For purposes of this Agreement, "Affiliate" of any person shall mean any person
that directly or indirectly controls, or is under common control with, or is
controlled by, such person. As used in this definition, "control" (including its
correlative meanings, "controlled by" and "under common control with") shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a person (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise).
(b) EFFECT ON RIGHTS OF PARTIES.
Termination of this Agreement by either party will not act as
a waiver of any breach of this Agreement and will not act as a release of either
party from any liability for breach of such party's obligations under this
Agreement. Except where otherwise specified, the rights and remedies granted to
a party under this Agreement are cumulative and in addition to, and not in lieu
of, any other rights or remedies which the party may possess at law or in
equity, including without limitation rights or remedies under applicable patent,
copyright, trade secrets, or proprietary rights laws, rules or regulations.
(c) EFFECT OF TERMINATION.
Within thirty (30) calendar days after any termination of this
Agreement, each party will either deliver to the other party or destroy all
copies of the "Confidential Information" (as defined in Section 5 below) and any
other materials provided by the other party hereunder in the delivering party's
possession or under its control, and will furnish to the other party an
affidavit signed by an officer of the delivering party certifying that, to the
best of its knowledge, such delivery or destruction has been fully effected. The
covenants contained in this
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Agreement that, by their terms, require or contemplate performance by the
parties after the termination of this Agreement will be enforceable
notwithstanding said termination.
5. COVENANTS.
During the term of this Agreement and for the two (2) year period
following the termination of this Agreement, neither party shall, directly or
indirectly, for the benefit of anyone other than the Strategic Alliance:
(a) directly solicit the employment of any management employee of
the other party which the party met during the duration of the Alliance. With
respect to nonmanagement employees, the parties shall undertake reasonable
efforts to refrain from soliciting the employment of non management employees of
the other party, and, to accomplish this objective, the parties shall cooperate
with each other's efforts to comply with this provision and, as part of this
effort, Emerald Solutions shall periodically provide AT&T Solutions with a list
of its employees. However, the foregoing prohibition shall not apply to
solicitations via, or employment resulting from, general advertisements for
employment appearing in newspapers, trade journals or other broadly circulated
media or search firms not directed to the management employees; or
(b) improperly solicit, induce or influence any supplier, lender,
lessor or any other person that has a business relationship with the other party
to discontinue or reduce the extent of such relationship with the other party;
or
(c) disclose to anyone, or use or otherwise exploit for its own
benefit or for the benefit of anyone other than the other party, any
Confidential Information; provided, however, neither party shall have any
obligation hereunder to keep confidential any Confidential Information if and to
the extent disclosure of any thereof is required by law, or determined in good
faith by the party to be necessary or appropriate to comply with any legal or
regulatory order, regulation or requirement; further, provided, however, that in
the event disclosure is required by law, the party compelled to disclose the
Confidential Information shall provide the other party with prompt notice of
such requirement, prior to making any disclosure, so that party may seek an
appropriate protective or restrictive order. A party may disclose Confidential
Information to its subcontractors, representatives or agents that have a need to
know the Confidential Information in order to further the purposes of the
Strategic Alliance; provided, however, that any such disclosure, use or
exploitation of Confidential Information by such subcontractor, representative
or agent in violation of this Agreement shall be deemed a breach of this
Agreement by the party. Each party agrees to deliver to the other party upon its
request all Confidential Information that it may possess or control.
For purposes of this Agreement, "Confidential Information" means any
trade secret or proprietary or confidential information, including, without
limitation, records, files, memoranda, reports, price lists, software, customer
lists, drawings, sketches, documents, equipment, and the like relating to a
party's business. Any information known generally to the public
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or any information of a type not otherwise generally considered confidential by
persons engaged in the same business will not be treated as confidential.
(d) Each party shall cooperate and consult with each other with
respect to press releases. No party may issue a press release without the
consent of the other party, which consent shall not be unreasonably withheld.
AT&T Solutions agrees that Emerald Solutions may include an accurate description
of the Strategic Alliance, including a description of the terms of this
Agreement and of the Warrant Agreement, in any registration statement filed with
the Securities and Exchange Commission in connection with any public offering of
common stock of Emerald Solutions.
(e) [*]
i. [*]
ii. [*]
(x) [*]
(y) [*]
iii. [*]
* We have requested confidential treatment by the Commission of those
portions of the exhibit omitted and marked with an asterisk.
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iv. [*]
v. [*]
vi. [*]
vii. [*]
viii. [*]
6. LIMITATION OF LIABILITY.
To the extent allowed by applicable law, under no circumstances will either
party be liable to the other party or to any other person or entity under any
legal theory for any indirect, incidental, special or consequential damages or
substitute goods, lost profits or anticipated revenues, or on account of
expenditures, investments, leases or commitments in connection with the business
or goodwill of the other party or any other party arising in connection with
this agreement or termination hereof, even if
* We have requested confidential treatment by the Commission of those
portions of the exhibit omitted and marked with an asterisk.
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advised of the possibility of such damages and notwithstanding any failure of
essential purpose of any limited remedy.
The foregoing provisions of this Section 6 will not affect either party's
liability, if any, with respect to contribution or indemnity for third party
claims for personal injury, death, or for breach of its confidentiality
obligations hereunder.
7. MISCELLANEOUS.
7.1 EACH PARTY TO PAY OWN COSTS.
Each party shall pay all of its own costs and expenses to
perform its obligations under this Agreement.
7.2 NO THIRD-PARTY BENEFICIARIES.
This Agreement shall not confer any rights or remedies upon
any person other than the parties and their respective successors and permitted
assigns.
7.3 ENTIRE AGREEMENT.
This Agreement (including the documents referred to herein)
constitutes the entire agreement among the parties and supersedes any prior
understandings, agreements, or representations by or among the parties, written
or oral, to the extent they related in any way to the subject matter hereof.
7.4 SUCCESSION AND ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit
of the parties named herein and their respective successors and permitted
assigns. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other party.
7.5 COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
7.6 HEADINGS.
The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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7.7 NOTICES.
All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to AT&T Solutions: Copy to:
AT&T Solutions Inc. Xxxxx Xxxxxxxx
00 Xxxxxxxx Xxxx Managing Partner
Xxxxxxx Xxxx, Xxx Xxxxxx 00000 Interactive Networking Applications
Attention: General Attorney AT&T Solutions Inc.
00 Xxxxxxxx Xxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
If to Emerald Solutions: Copy to:
Emerald-Delaware, Inc. Xxxxxxx X. Xxxxx, Esquire
000 - 000xx Xxxxxx XX Xxxxxxxx & Xxxxxxxx LLP
Suite 1800 00000 XxxXxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000 Suite 1200
Attention: Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000
General Counsel
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
7.8 GOVERNING LAW.
This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York.
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7.9 AMENDMENTS AND WAIVERS.
No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by the parties. No waiver by any
party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
7.10 SEVERABILITY.
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
7.11 CONSTRUCTION.
The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation. The parties intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the party has not breached shall not
detract from or mitigate the fact that the party is in breach of the first
representation, warranty, or covenant.
7.12 INCORPORATION OF EXHIBIT.
The Exhibit identified in this Agreement is incorporated
herein by reference and made a part hereof.
7.13 DISPUTE RESOLUTION.
(a) If a dispute arises between the parties in connection with
this Agreement or any document or instrument delivered in connection herewith,
including without limitation an alleged breach of any representation, warranty
or covenant, or a disagreement regarding the interpretation of any provision
(the "Dispute"), the parties agree to use the following
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procedure in good faith prior to any party pursuing other available judicial or
non-judicial remedies: The parties shall meet in New York City within ten (10)
business days after either party gives written notice of the Dispute to each
other party (the "Dispute Notice") attended by a representative of each party
having decision-making authority regarding the Dispute to attempt in good faith
to negotiate a resolution of the Dispute. If, within ten (10) business days
after the Dispute Notice, the parties have not succeeded in negotiating a
written resolution of the Dispute, either party may commence binding arbitration
as provided in subsection (b), below.
(b) If a dispute arises out of or relates to this Agreement or
its breach and the dispute cannot be settled through negotiation within ten (10)
business days, either party may submit the dispute to binding arbitration.
Unless otherwise agreed by the parties, such arbitration shall be conducted by a
mutually acceptable neutral panel of three individuals designated by the parties
(the "Panel"), or failing agreement, by the CPR Institute for Dispute Resolution
("CPR"). The arbitration will be conducted in accordance with CPR's arbitration
rules, with one (1) of the arbitrators chosen by each of the parties, and the
third arbitrator chosen by the other two arbitrators. The arbitration will be
held at a neutral site in New York City selected by the Panel that is reasonably
convenient to both parties. The Panel will determine issues of arbitrability,
including the applicability of any statute of limitation, but may not limit,
expand or otherwise modify the terms of the Agreement. None of the arbitrators
shall have the power to order pre-hearing discovery of documents or the taking
of depositions, but may compel the attendance of witnesses and production of
documents at the hearing, to the extent provided by the United States
Arbitration Act. The Panel's decision and award will be in writing, setting
forth the legal and factual basis therefor (except with respect to the validity,
infringement or misappropriation of any patents or other proprietary rights of
any party, with respect to which such award will be without findings or any
statement of legal or factual basis.) An arbitration decision and award will not
be subject to review because of errors of law. Each party will bear its own
expenses in connection with the arbitration, but those related to the site and
compensation of the Arbitrator will be borne equally. The parties, other
participants and the arbitrators will hold the existence, content and result of
the arbitration in confidence, except to the extent necessary to enforce a final
settlement agreement or to obtain and enforce a judgment on an arbitration
award. This Section will be governed by and enforced in accordance with the
United States Arbitration Act.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
AT&T SOLUTIONS INC.
/s/ XXXXXXX X. XXXX
--------------------------------------
By: Xxxxxxx X. Xxxx
Title: Director, Strategy & Alliances
EMERALD - DELAWARE, INC.
/s/ XXXXX XXXXXXX
--------------------------------------
By: Xxxxx Xxxxxxx
Title: Vice President
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EXHIBIT A
FORM OF WARRANT
