EX-10.27 2 dex1027.htm SOFTWARE LICENSE AGREEMENT GUIDEWIRE SOFTWARE, INC. SOFTWARE LICENSE AGREEMENT
Exhibit 10.27
GUIDEWIRE SOFTWARE, INC.
THIS SOFTWARE LICENSE AGREEMENT (the “Agreement”), is made effective on May 3, 2007 (“Effective Date”) by and between Guidewire Software, Inc. (“Guidewire”), a Delaware corporation with its principal place of business located at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and MGA Insurance Company, Inc. (“Licensee”), a Texas corporation with its principal place of business located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
Accordingly, the parties agree as follows:
| 1. | Software, License and Ownership. |
| 2. | Fees and Payment. |
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| 7. | Term and Termination. |
| 8. | Indemnification. |
a. Guidewire shall defend or settle at its expense any claim or suit (an “Action”) against Licensee, arising out of or in connection with an assertion that the Software or the use thereof as specifically authorized by Guidewire, infringes any U.S. patent in existence as of the Effective Date, U.S. copyright or trademark rights or misappropriates a trade secret of any third party; provided that Guidewire shall have no obligation under this Section to the extent any claim of infringement or misappropriation results solely from (i) use of the Software in combination with any other hardware or software supplied by any third person or entity other than Guidewire Dependant Products covered in Exhibit B, Section 7.; (ii) any alteration or modification of the Software not provided or authorized by Guidewire; or (iii) use of the Software in a way not intended by Guidewire or not provided for or described in the applicable Documentation, if such infringement would not have occurred but for such combination, alteration, modification or unintended or unauthorized use of the Software (collectively the “Indemnification Exceptions”).
b. Licensee shall defend or settle at its expense any Action against Guidewire, and each of its directors, officers, agents, employees and sublicensees to the fullest extent permitted by law, arising out of or in connection with or related to any of the foregoing Indemnification Exceptions.
c. As an express condition to the foregoing indemnity obligations, the party seeking indemnity shall (i) promptly notify the indemnifying party in writing of any such actual or threatened loss, suit, claim, liability, expense or proceeding, (ii) allow the indemnifying party, at its own expense, to direct the defense of such suit, claim or proceeding, (iii) give the indemnifying party all information and assistance reasonably necessary to defend such suit, claim or proceeding, and (iv) not enter into any settlement of any such suit, claim or proceeding without the indemnifying party’s written consent, which shall not be unreasonably withheld or delayed.
d. Should Software become, or in Guidewire’s opinion be likely to become, the subject of a claim for which Guidewire is required to indemnify pursuant to this Section, Guidewire may, at its discretion, (i) obtain for Licensee, at no additional cost to Licensee, the right to continue using the Software under this Agreement; (ii) modify or replace the Software or part of the Software in a manner so that such modified or replacement software provides the same or better functionality as the Software, at no additional cost to Licensee, to avoid such claim, or (iii) if Guidewire determines that neither (i) or (ii) is commercially feasible, terminate the license to the applicable Software and refund the License Fees paid for the Software, prorated over a five (5) year term from the Effective Date. THIS SECTION 8 STATES GUIDEWIRE’S ENTIRE LIABILITY AND LICENSEE’S EXCLUSIVE REMEDY FOR ANY CLAIMED, POTENTIAL OR ACTUAL INFRINGEMENT.
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| 9. | General Provisions. |
a. Governing Law. This Agreement shall be governed by and construed under the laws of the State of California, without regard to its conflicts of law provisions. In any action to enforce this Agreement, the prevailing party will be entitled to costs and attorneys’ fees from the non-prevailing party. Unless waived by Guidewire in a particular instance, the parties hereby submit to the exclusive personal jurisdiction of, and agree that any legal proceeding with respect to or arising under this Agreement shall be brought in, the United States District Court for the Northern District of California or the state courts of the State of California.
d. Intentionally left blank.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
| Licensee: | MGA Insurance Company, Inc. | Guidewire Software, Inc. | ||||||
| Signature: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | Signature: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Print Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | Print Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Title: | President and Chief Executive Officer | Title: | CFO | |||||
| Date: | May 3, 2007 | Date: | May 3, 2007 |
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EXHIBIT A
SOFTWARE; LICENSE FEES; SUPPORT FEES AND ADDITIONAL TERMS
(Initial Order Form)
| • | Claim Entry and Setup – provides a comprehensive set of capabilities for reporting and triaging losses. A wizard-based direct loss reporting module allows claim handlers, call center operators, and potentially agents to enter loss information directly into ClaimCenter. Loss triage and setup module allows claim handlers to import loss notifications received via multiple channels (external call center systems, call center outsourcers, faxed ▇▇▇▇▇ forms, etc.) and set them up properly in ClaimCenter. |
| • | Segmentation and Assignment – provides for the segmentation and assignment of new claims and exposures. Using the newly entered loss information and the user profiles of available adjusters as inputs, ClaimCenter determines (or prompts the user to decide upon) the appropriate claim handling strategy and adjuster. |
| • | Claim Guidance – provides end-to-end management of all of the activities involved in the claim process. Generates a list of appropriate tasks and assigns to various parties, primarily the adjuster owning the claim or the line. Tracks all activities to ensure that they are completed successfully. Monitors the workplan and other files in the claim record to determine when additional tasks are necessary, and automatically creates these tasks and assigns them to the appropriate internal or external user based on task attributes and user profiles. |
| • | Exception Based Notification and Management – provides automated escalation of overdue activities. Flagging of claims based on any criteria. Automated exception handling. |
| • | Claim Desktop – provides a unified view of all of each user’s work across claims. Includes activity queues, unified activity calendar, configurable search, and ad hoc reporting with data export. |
| • | Claim Dashboard – provides real-time views of team workload. Allows drill down through organization to individual level. Claim and exposure aging. Key metrics for open and closed claims. Financial performance for open and closed claims. |
| • | Claim File – provides the main repository that contains or provides pointers to all information about a claim, including basic fields for the claim and each exposure (suffix) within the claim, claim notes, pointers to documents (including faxes, correspondence, etc.) stored in a separate imaging system or in another application, people involved (claimant, policyholder, witness, etc.), with links to address book entries, vendors (with links to address book entries), imported policy information, tools to help evaluate a claim and manage negotiations, litigation management, association of claims to other related claims, and other features described elsewhere (e.g. ClaimFinancials). |
| • | ClaimFinancials – allows the execution of all standard claim transactions. Reserves are set, adjusted, and managed. Payments are created, managed, and pass to downstream systems. Recoveries from salvage, subrogation, or unclaimed property are accepted, tracked, and optionally reserved. |
| • | ContactCenter – provides a centralized address book for shared contact and vendor information. Includes the ability to link contacts on claims to the central address book and to synchronize contacts between the central address book and the claim file. |
| • | Rules Engine – externalization of most business logic in ClaimCenter, including segmentation, validation, exception, assignment, approval, and other functions. Accessed through an installed rule composer, Guidewire Studio, with functionality for composing, versioning, testing/debugging, and searching rules. |
| • | Other features – various other features, as specified by the documentation, are part of the product. Some examples include a spell checking interface, a productized ISO integration, configurable search and filters, and various administration functions (e.g. add new users and groups). |
| • | Guidewire Platform – rich set of tools and capabilities that allow for configuration, integration, bulk import of converted data, server clustering, and much more. |
| • | Any proprietary tools and software used in conjunction with the Licensed Software, including, but not limited to, Guidewire Studio. |
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| 1. | License and Support Fees; Exhibit Term: |
Licensee shall pay the following License Fees for an initial term of five years from the Effective Date of this Agreement (the “Initial Term”):
| Initial Term License Fee Schedule | |||||
| Annual Term | Support Services | Annual License Fees | |||
| Year 1 | Included | $ | 318,815 | ||
| Year 2 | Included | $ | 318,815 | ||
| Year 3 | Included | $ | 318,815 | ||
| Year 4 | Included | $ | 318,815 | ||
| Year 5 | Included | $ | 318,815 |
This Exhibit shall commence on the Effective Date of the Agreement and shall remain in full force and effect for Initial Term set forth above. This Exhibit shall automatically renew at the end of the Initial Term (and thereafter) for additional periods of twelve (12) months (each a “Renewal Term”) at Guidewire’s then-current fees (provided that Guidewire provides notice of any increase in fees to be applicable during the next Renewal Term at least ninety (90) days prior to the end of the then-current term), unless terminated by either party by written notice no less than thirty (30) days prior to the end of the then-current term. Solely for the purposes of this Exhibit, the Initial Term and any Renewal Term(s) are referred to as the “Exhibit Term”.
The annual License Fee for Year 1 is due on the Effective Date of the Agreement. The annual License Fees for the balance of the Exhibit Term are payable on each applicable anniversary of the Effective Date.
Support Fees are included in the annual License Fees during the Exhibit Term. The annual License Fees are subject to adjustments pursuant to the “Growth Rates” Sections of this Exhibit.
The License Fees in this Exhibit are based on Licensee’s direct written premiums (“DWP”) in a calendar year of $200 Million. The level of DWP which will be the basis of calculating incremental License Fees (if any are required pursuant to the terms hereof) is subject to adjustment from time to time as set forth in this Exhibit A based on the amount of incremental License Fees paid. Such amount as it may be adjusted from time to time is referred to herein as the “DWP Baseline.” Once the annual level of DWP has reached $800,000,000 and Licensee has paid the appropriate fee associated with that level, then no subsequent incremental License Fees shall be imposed for any reason.
If Licensee’s DWP increases less than twenty-five percent (25%) of the then-applicable DWP Baseline, then Licensee will maintain the current License Fees and no incremental license fees will be incurred pursuant to any of the provisions of this Exhibit. For the purposes hereof, the term “Buffer” means the amount which is 125% of the then-applicable DWP Baseline.
| 2. | Incremental License Fees During the Initial Term. |
During the Initial Term, incremental License Fees are only payable based on DWP growth resulting from Licensee acquiring, purchasing, or merging with any other company or entity or acquisition of assets (“Non-Organic Growth”). However, incremental License Fees may be accrued during the Initial Term because of growth not attributable to Non-Organic Growth (“Organic Growth”) and may become payable immediately following the end of the Initial Term. Specifically, at the beginning of the first Renewal Term, if any, or upon the exercise by Licensee of the Perpetual Buyout Option as described in Section 4 hereof, Licensee shall pay, in addition to any other amount then due, the amount of any accrued but unpaid incremental License Fees that would have resulted during the Initial Term as a result of Licensee’s Organic Growth. The additional License Fee will be calculated using the table that appears in Section 5 hereof.
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If during the Initial Term Licensee’s DWP exceeds the Buffer as a result of Non-Organic Growth (after netting out any change in DWP that results from Organic Growth), then (i) Licensee will pay an annual, additional License Fee at the end of the year following Licensee’s initial use of the Licensed Software in conjunction with such added DWP resulting from Non-Organic Growth and each succeeding year in the Initial Term and any Renewal Term(s), and (ii) for all future calculations of incremental License Fees, the amount of the DWP Baseline shall be adjusted by the amount of DWP for which Licensee has paid incremental License Fees. Licensee agrees to report any use of the Software in conjunction with such incremental DWP resulting from Non-Organic Growth to Guidewire within thirty (30) days from initial use. The additional License Fee will be calculated using the table that appears in Section 5 hereof.
3. Incremental License Fees During any Renewal Term.
During any Renewal Term, if Licensee’s DWP surpasses the Buffer for any reason (e.g., Non-Organic Growth or Organic Growth), then (i) Licensee will pay an additional, annual, incremental License Fee at the end of such term and any succeeding Renewal Term following Licensee’s initial use of the Licensed Software in conjunction with such added DWP, and (ii) for all future calculations of incremental License Fees, the amount of the DWP Baseline shall be adjusted by the amount of DWP for which Licensee has paid incremental License Fees. Licensee agrees to report any use of the Software in conjunction with such incremental DWP to Guidewire within thirty (30) days from initial use. The incremental license fee shall apply to all DWP increases once Licensee exceeds the Buffer. The incremental license fee will be calculated using the table that appears in Section 5 hereof.
| a. | One-time, lump sum License Fee equal to 300% of the annual fee during the last year of the term license (i.e., Year 5 of the Initial Term or the last Renewal Term) to be paid upon exercise of the Perpetual Buyout Option, and no subsequent annual License Fees shall ever be payable. |
| b. | Support Services not include included in the perpetual License Fee. Licensee may purchase Support Services for the initial, annual Support Fee in an amount equal 50% the annual fee during the last year of the term license (i.e., Year 5 of the Initial Term or the last Renewal Term). |
| c. | If, after Licensee exercises the Perpetual Buyout Option (the “Perpetual Term”), Licensee’s DWP surpasses the Buffer for any reason (e.g. Non-Organic Growth or Organic Growth), then Licensee will pay a one-time incremental License Fee following Licensee’s initial use the Licensed Software in conjunction with such added DWP. Licensee agrees to report any use of the Software in conjunction with such incremental DWP to Guidewire within thirty (30) days from initial use. The incremental license fee will be calculated using the table that appears in Section 5 hereof. |
| d. | If Licensee is obligated to pay an incremental License Fee as set forth above and purchases Support Services, then Licensee shall also pay incremental Support Fees equal to 20% of such incremental License Fees. Licensee shall pay those Support Fees contemporaneously with such incremental license fee. Guidewire will prorate the incremental Support Fees for the then-current Support Services annual term. |
| e. | Notwithstanding any other term of the Agreement or this Exhibit, if Guidewire consents to the assignment of this Agreement pursuant to Section 9.b. of the Agreement, then Guidewire may condition such consent on the Software license being restricted to use in conjunction with the amount of Licensee’s DWP immediately prior to such assignment |
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| Total DWP greater than the then-applicable DWP Baseline | Incremental license fee is equal to: | |||
| 1st Band | but less than $300,000,000: | amount of DWP above the then-applicable DWP Baseline multiplied by $0.00135 | ||
| 2nd Band | and greater than or equal to $300,000,000 but less than $400,000,000: | amount of DWP above the greater of $300,000,000 or then-applicable DWP Baseline multiplied by $0.00111 | ||
| 3rd Band | and greater than or equal to $400,000,000 but less than $800,000,000: | amount of DWP above the greater of $400,000,000 or then-applicable DWP Baseline multiplied by $0.00087. | ||
| 4th Band | and greater than $800,000,000: | no additional incremental fee is due |
In making the calculations pursuant to the above table, if the applicable DWP is in a higher numbered band than the band of the then-applicable DWP Baseline, then the incremental license fee will be the sum of the amounts determined with respect to each applicable lower-numbered band and the band of the DWP.
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EXHIBIT B
MAINTENANCE AND TECHNICAL SUPPORT SERVICES
| 1. | SUPPORT SERVICES. Support Services consist of (a) E-Mail Support and Telephone Support provided to designated Licensee technical support contact(s) concerning the installation, use, and resolution of Issues relating to Supported Releases of the Software, and (b) the provision of any Updates at no additional cost to Licensee. Licensee may designate up to four (4) Licensee technical support contacts to request Support Services. All Licensee support contacts must be trained in the use of Software. Guidewire provides E-Mail Support and Telephone Support Monday through Friday during the following hours: 9:00 am to 8:00 pm EST (Eastern Standard Time), excluding holidays. In addition, Guidewire provides support 24 hours per day, 7 days per week, for Severity Level 1 issues only. |
| 2. | DEFINITIONS. |
| 2.1. | “Dependent Products” means the third party operating systems, databases or other third party software products with which Software was intended to inter-operate as set forth in the Documentation. |
| 2.2. | “Certified Dependant Products” or “Certify” means Dependant Products that Guidewire has designated for use with Supported Versions of the Software. |
| 2.3. | “E-Mail Support” means electronically generated Support Services provided in response to electronically transmitted inquiries by Licensee. |
| 2.4. | “Issue” means an error, question, or other issue related to Supported Releases of the Software for which Licensee needs Support Services assistance. Guidewire provides Support Services for Issues that are reproducible a Support Release, running unaltered, and on an appropriate hardware, database and operating system configurations, as specified in the Documentation. |
| 2.5. | “Major and Minor Releases.” Guidewire releases the Software with release numbers in the form x.y.z (e.g., 2.1.5). A “Major Release” is defined as all releases with the same first digit in the release number; for example, 2.0.0, 2.0.1 and 2.1.0 are all part of the same Major Release. A “Minor Release” is defined as all releases with the same first and second digits in the release number; for example, 2.1.0, 2.1.1, and 2.1.2 are all part of the same Minor Release. A “Maintenance Release” is defined as an individual release with a unique combination of three digits in the release number; for example, 2.1.5 is a Maintenance Release. |
| 2.6. | “Supported Release” means a Major, Minor or Maintenance Release for which Guidewire provides Support Services as set forth in this Section. Guidewire will support all releases within a given Major Release for twelve months after general availability of the first subsequent Major Release. For example, Guidewire will support all 2.x.y releases for twelve months after 3.0.0 is generally available. Guidewire will also support the last Maintenance Releases within a Major Release until the second subsequent Major Release is generally available. Continuing the previous example, if 2.1.5 is the last Maintenance Release within the 2.x.y Major Release, then Guidewire will support 2.1.5 until 4.0.0 is generally available. |
| 2.7. | “Telephone Support” means Support Services telephone assistance provided by Guidewire to the Licensee technical support contact concerning the installation and use of the Software. |
| 2.8. | “Update(s)” means revisions to the Software that correct defects, errors or bugs or incorporate minor enhancements to the functionality that Guidewire in its discretion makes generally available to its customers who subscribe to Support Services in the form of Major Releases, Minor Releases and Maintenance Releases. Guidewire will notify Licensee of all Updates available for the Software licensed by Licensee. Guidewire will make such Updates and corresponding Documentation available to Licensee at no additional cost. |
| 4. |
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| with Issue determination at Licensee’s possible expense as set forth below, or (2) instruct Guidewire that Licensee does not wish the Issue pursued. If Licensee requests that Guidewire proceed with Issue determination at Licensee’s possible expense and Guidewire reasonably determines that the issue was not due to an Issue in the Software, Licensee shall pay Guidewire’s then-current and standard consulting rates for all work performed in connection with such determination, plus reasonable and necessary related expenses incurred therewith. Licensee shall not be liable for (i) Issue determination or repair to the extent problems are due to an Issue in the Software, (ii) work performed under this paragraph in excess of Licensee’s instructions, or (iii) work performed after Licensee has notified Guidewire that it no longer wishes work on the Issue determination to be continued at its possible expense (such notice shall be deemed given when actually received by Guidewire). |
| 5. | WHAT IS NOT INCLUDED UNDER SUPPORT SERVICES. |
| 5.1. | Training. Support Services do not cover in-depth training. If training in the use of the Software will take more than thirty minutes of a support engineer’s time, Guidewire will refer Licensee to implementation services. Guidewire provides implementation services are on a time and materials basis at Licensee’s request. |
| 5.2. | Assistance in the configuration of the Software. Support Services do not include assistance in developing Licensee’s specific configuration requirements. Depending upon the nature and complexity of the consulting request, Guidewire will refer Licensee to Guidewire implementation services. |
| 5.3. | Information and assistance on technical issues related to the installation, administration, and use of enabling technologies such as databases, computer networks, and communications. Guidewire does not provide these services. |
| 5.4. | Assistance with the installation and configuration of hardware including, but not limited to computers, hard disks, networks, and printers. Guidewire does not provide these services. |
| 5.5. | Support Services for Non-Supported Releases. Guidewire only provides Support Services for Supported Releases. Licensee may request Support Services for a non-supported release on a time and materials basis. |
| 7. | CERTIFIED AND SUPPORTED CONFIGURATIONS. |
| 7.1. | Guidewire shall not be obligated to provide Support Services for an Issue that arises from the use of the Software in conjunction with any third party software product that inter-operates with the Software, unless such third party product is a Dependent Product. |
| 7.2. | For each Major Release and Minor Release of the Software, Guidewire shall Certify at least one version of each of the Dependent Product(s). Such version of each Dependent Product will be generally available for not less than six months and not more than twenty-four months prior to such Major Release or Minor Release of the Software. |
| 7.3. | If a Certified version of a Dependent Product ceases to be maintained or supported by the Dependent Product Developer, such version will remain Certified and supported by Guidewire until sixty days after Guidewire Certifies a subsequent version of such Dependent Product or a substitute Dependant Product. |
| 8. | SUPPORTED RELEASES. |
Guidewire will provide Support Services for specific Releases of the Software as follows:
| 8.1. | Guidewire will support each Major Release for thirty-six months from the initial date of general availability. During this thirty-six month period, Guidewire will support at least one Minor Release or Maintenance Release; not all releases will necessarily be supported for the entire thirty-six month period. |
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| 8.2. | Guidewire will provide Licensee twelve months notification of its intent to decertify a Major Release of the Licensed Software. |
| 8.3. | In the event that Licensee encounters an Issue which has been fixed in a newer Maintenance Release of the same Major Release, Licensee agrees to upgrade to the newer Maintenance Release in lieu of receiving a patch to fix the Issue. |
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APPENDIX A TO EXHIBIT B OF THE GUIDEWIRE SOFTWARE LICENSE AGREEMENT
Severity Level Standards – Gold Support
| Severity | Response Time | Action Plan Delivery | Support Mode | Resolution Target Time | ||||
| 1 | 2 hours | Preliminary: 8 hours
Detailed: 24 hours | Continuous, dedicated until restored. Thereafter, Guidewire will work during standard operating hours until resolved. | As quickly as possible, with updates every 4 hours. | ||||
| 2 | Next business day | Detailed: Next business day | Non-continuous, Dedicated until restored. Thereafter, vendor will work during standard operating hours until resolved. | As quickly as possible, with daily updates. | ||||
| 3 | Next business day | N/A | Non-dedicated, non-continuous. | Corrected with a normal minor or major product release. | ||||
| 4 | 2 Business days | N/A | Non-dedicated, non-continuous. | None, unless escalated. |
Definitions:
Severity Levels:
| • | Severity 1 – The Software is unusable, resulting in a critical impact on the operation. No workaround is available. Severity 1 Issues are limited to production critical events. Most Issues encountered during the development or implementation phase of a project will be classified as Severity 3 or Severity 4. At times it may be appropriate to escalate a development problem to Severity 2. |
| • | Severity 2 – The Software will operate but its operation is severely restricted. No workaround is available to remedy restrictions. |
| • | Severity 3 – The Software will operate with limitations that are not critical to the overall operation. For example a workaround forces a user and/or a systems operator to use a time consuming procedure to operate the system; or removes a non-essential feature. |
| • | Severity 4 – Licensee can use the Software and all functionality with only slight inconvenience. |
Action Plan:
| • | Preliminary – A preliminary action plan consists of a succinct list of tasks to be performed by Guidewire, Licensee, and in some cases, third-party resources. Guidewire delivers he preliminary action plans for Severity 1 Issues to ensure a coordinated response. |
| • | Detailed – A detailed action plan is a detailed list of tasks that includes task descriptions, task owners, and target delivery/follow-up times. |
Support Modes:
| • | Continuous – Guidewire support staff works on the Issue on a 24x7 basis. |
| • | Non-continuous – Guidewire support staff works on the Issue during normal hours of operation. |
| • | Dedicated – Guidewire’s support staff assigned works exclusively on the Issue. |
| • | Non-dedicated – Available Guidewire support staff manages the Issue non-exclusively, simultaneously with other support operation requirements. |
Resolution Status:
| • | Restored – the Software or application that it supports is back up and running, although the underlying problem is not yet resolved. |
| • | Resolved – the Issue has been conclusively fixed. |
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| Escalation Guidelines for Severity Level 1 Technical Support Services Requests | ||
| Elapsed Time | Escalation Contact | |
| > 8 hours | Customer Service Manager | |
| > 24 hours | Vice President of Services | |
| > 48 hours | Vice President of Development |
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