EXHIBIT 10.21
UNIDIRECT CORPORATION
OUTSOURCING SERVICES AGREEMENT
This Outsourcing Services Agreement ("Agreement") is entered as of
July 21, 1997 ("Effective Date") by and between UniDirect Corporation
("UniDirect"), a California corporation, with its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and FTP
Software, Inc. ("FTP"), a Massachusetts corporation, with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
AGREEMENT
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In consideration of the mutual covenants contained in this Agreement
and for other good and valuable consideration, the adequacy and receipt of which
are hereby acknowledged, the parties agree as follows:
1. Definitions.
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a. "Business Unit" shall mean FTP'S VIP Network(TM) Applications
Business Unit, through which copies of Products, including Support Services and
Subscription Services, are sold.
b. "FTP Gross Sales" shall mean the Business Unit's gross
sales in the Territory of Subscription Services, Support Services and Upgrades.
c. "Net Sales" shall mean UniDirect's gross sales made pursuant to
this Agreement less all applicable discounts actually given and returns actually
made.
d. "Products" shall mean, collectively, all software products,
Support Services and Subscription Services offered by the Business Unit for
commercial sale as of the Effective Date or during the term of this Agreement.
e. "Retail Prices" shall mean the prices for the Subscription
Services, Support Services and Upgrades as set forth on Attachment A hereto. FTP
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may amend the Retail Prices from time to time by attaching an amended Attachment
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A and providing such amended attachment to UniDirect, such amendment to be
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effective thirty (30) days after UniDirect's receipt thereof.
f. "Subscription Services" shall mean Business Unit Product
update services whereby the purchaser shall receive from FTP, or an authorized
FTP agent, during the period specified therein, all new versions of the Products
including major releases (including, without limitation, incremented version
numbers to the left of a decimal point), minor releases (i.e., incremented
version numbers to the right of a decimal point), all new or previously released
versions of
the Product for different computer platforms (i.e., different hardware and
system software) and eligibility to participate in certain promotional offers
made by FTP (i.e., any upgrade promotions for new FTP products).
g. "Support Services" shall mean Business Unit Product support
services whereby the purchaser is entitled to receive from FTP, or an authorized
FTP agent, for the period specified therein and during FTP's normal business
hours, technical assistance for the Products. Such support shall be available by
telephone, U.S. mail, electronic mail and fax.
h. "Territory" shall mean the United States and Canada.
i. "Upgrade" shall mean a one-time Product upgrade whereby the
purchaser shall receive from FTP, or an authorized FTP agent, all new versions
of the Products made commercially available by FTP as of the Effective Date
including major releases (including, without limitation, incremented version
numbers to the left of a decimal point), minor releases (i.e., incremented
version numbers to the right of a decimal point), all new or previously released
versions of the Product for different computer platforms (i.e., different
hardware and system software) and eligibility to participate in certain then
effective promotional offers made by FTP (i.e., any upgrade promotion for new
FTP products).
2. Outsourcing Services.
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a. FTP hereby grants to UniDirect for the term of this Agreement,
and UniDirect accepts, a non-sublicenseable, non-assignable, non-transferable
appointment and license to market, sell and distribute Support Services,
Subscription Services and Upgrades to end users of the Products.
b. Beginning thirty (30) days after the Outsource Start Date, the
license granted by FTP to UniDirect in Section 2.a above shall be exclusive with
regard to all sales during the term of this Agreement of Support Services and
Subscription Services which do not occur upon the initial Product license
grants. Such license is non-exclusive with regard to all other sales. During the
thirty (30) days described above, the parties will work in good faith to
transition the outsource services described herein and UniDirect will receive
from FTP payment for the full value of UniDirect's fulfillment discount (as set
forth in Section 4 below) for all FTP sales pursuant to this Section 2.b which,
following such thirty (30) day period, would have been within UniDirect's
exclusive rights hereunder.
c. UniDirect will use its best efforts to successfully market
(including, without limitation, maintaining a well-staffed and Product educated
sales force, adequate inventory and prompt creation of appropriate promotional
materials), sell and distribute the Support Services, Subscription Services and
Upgrades on a continuing basis and to comply with good business practices,
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industry standards and all laws and regulations relevant to this Agreement or
the subject matter hereof.
d. The Support Services, Subscription Services and Upgrades shall be
in every way identical to the support services, subscription services and
upgrades made commercially available by the Business Unit to its customers for
the software Products.
e. FTP acknowledges and agrees that the Support Services and
Subscription Services sold by UniDirect to end user customer hereunder contain
certain terms and conditions between FTP and an end user customer upon such
customer's acceptance thereof. FTP agrees to honor and be bound by the terms and
conditions of all such agreements.
3. FTP Software Services.
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a. FTP hereby grants, and UniDirect accepts, a non-exclusive,
non-sublicenseable, non-assignable, non-transferable, personal, royalty-free
license to use FTP's trademarks, service marks, logos and the trade name "FTP
Software" (collectively the "Marks") in connection with the outsourcing services
performed by UniDirect hereunder in accordance with the license terms set forth
in this Section 3. UniDirect shall submit all materials bearing the Marks,
including without limitation, advertisements, promotional materials and
invoices, to FTP for review and written approval prior to initial release, which
approval shall not be unreasonably withheld or delayed. UniDirect shall
initially perform the services described in this Agreement using the name "FTP
Software Services" ("FTPSS"). UniDirect shall not use any marks confusingly
similar to the Marks during or after the term of this Agreement. It is the
parties' intention that UniDirect will begin performance hereunder as FTPSS six
(6) weeks following the Effective Date, or the earliest commercially reasonable
date, if later (hereinafter, the date on which UniDirect begins its outsourcing
performance as FTPSS shall be referred to as the "Outsource Start Date")).
b. (i) UniDirect shall comply with reasonable standards regarding
the Marks supplied to UniDirect by FTP from time to time in order to maintain
the quality set by, and under the control of, FTP. At FTP's request, UniDirect
shall provide FTP with samples and specimens of all materials bearing the Marks
for FTP's inspection. UniDirect acknowledges FTP's representation of its
ownership of the Marks, agrees that UniDirect shall do nothing inconsistent with
such ownership and agrees that all use of the Marks shall inure to the benefit
of FTP. UniDirect agrees that neither by virtue of this Agreement nor
performance contemplated hereunder does UniDirect acquire any rights, title, or
interest in or to the Marks other than the license granted in this Section 3.
UniDirect shall not attack FTP's title to the Marks. Upon termination or
expiration of this Agreement, the license granted in this section shall
terminate and UniDirect shall immediately
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discontinue all use of the Marks including, without limitation, within
UniDirect's catalog, not later than UniDirect's next printing of its catalog,
which shall in no event occur no later than six (6) months from the date of such
termination or expiration, and shall destroy all printed or other materials
bearing any of the Marks. The goodwill associated therewith shall remain the
property of FTP and shall not be derogated by UniDirect.
(ii) UniDirect shall not remove any FTP or FTP supplier's
markings, logos, colors or other insignia which are affixed to Products at the
time of FTP's shipment. Only Products licensed from FTP shall bear FTP's
markings, logos or other insignia. UniDirect shall not add any additional logos,
markings or other insignia to the Products.
(iii) FTP expressly prohibits any other direct or indirect use,
registration or reference to FTP's name, trademarks, trade names, logos or other
insignia, or any name, trademark, trade name, logo or other insignia confusingly
similar thereto, except as may be explicitly authorized by FTP herein.
4. Fulfillment Discount.
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a. Within ten (10) business days of the Effective Date, the parties
will agree on a "Baseline." For purposes of this Agreement, the Baseline shall
be the average quarterly FTP Gross Sales of Subscription Services and Support
Services during the previous four (4) consecutive quarters calculated by adding
such quarterly FTP Gross Sales figures for the period beginning July 1, 1996 and
ending June 30, 1997 and dividing the result by four (4). To the extent the FTP
Gross Sales figure relied upon by the parties in calculating the Baseline is
subsequently determined to be overstated, the Baseline shall be recalculated
using the FTP Gross Sales for such period as reduced by the overstated amount.
b. Beginning on the Outsource Start Date and continuing until such
time as UniDirect's Net Sales of Subscription Services and Support Services
during a particular calendar quarter exceed the Baseline, UniDirect shall
receive the following discounts from the Retail Prices for the remainder of such
quarter:
(i) For UniDirect's first [***] of Net Sales of Support Services
per calendar month, [***] off the Retail Price; this discount shall increase to
[***] for all sales of Support Services during such month which exceed [***]
(ii) For UniDirect's first [***] combined Net Sales of
Subscription Services and Upgrades per calendar month, [***] off the Retail
Price; this discount shall increase to [***] for all sales of Subscription
Services and
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[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
Upgrades during such month which exceed [***]
(iii) In furtherance of the foregoing, UniDirect shall submit to
FTP monthly reports within five (5) days after the end of such month, which
reports shall each specify, by end user, the Support Services, Subscription
Services and Upgrades sold during such month. Each such report shall be in a
form mutually acceptable to both parties.
c. Beginning on the first day of the first quarter following a
quarter in which UniDirect's Net Sales of Subscription Services and Support
Services exceed the Baseline, and continuing thereafter for duration of this
Agreement, UniDirect shall receive the following discounts from the Retail
Prices:
(i) For UniDirect's first [***] Net Sales of Support Services
per month, [***] off the Retail Price; this discount shall increase to [***] for
all sales of Support Services during such month which exceed [***]
(ii) For UniDirect's first [***] Net Sales of Subscription
Services and Upgrades combined per month, [***] off the Retail Price; this
discount shall increase to [***] for all sales of Subscription Services and
Upgrades during such month which exceed [***]
d. Within six (6) months after the Outsource Start Date and
continuing thereafter, [***] Failure to achieve this milestone at any six (6)
month interval after the Effective Date shall be a material breach of the
Agreement pursuant to which FTP may terminate the Agreement or remove
exclusivity, at its option.
e. (i) For the period beginning on the first (1st) day of the
seventh (7th) month following the Outsource Start Date and ending on the last
day of the twelfth (12th) month following the Outsource Start Date, [***]
Failure to achieve this milestone shall be a material breach of the Agreement
pursuant to which FTP may terminate the Agreement or remove exclusivity, at its
option.
(ii) For the period beginning on the first (1st) day of the
thirteenth (13th) month following the Outsource Start Date and ending on the
last day of each six (6) month period thereafter, [***]
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[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
[***] For each such six (6) month period, failure to achieve this milestone over
the course of such period shall be a material breach of the Agreement pursuant
to which FTP may terminate the Agreement or remove exclusivity, at its option.
5. Payment and Supply Terms.
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a. Each month UniDirect shall order from FTP and store such
quantities of Upgrades and Products required in UniDirect's normal performance
of outsourcing services under this Agreement as are anticipated by UniDirect to
fulfill one (1) month of customer orders; provided, however, that UniDirect
shall limit its orders of such Upgrades and Products from FTP to four (4) such
orders per month during the first six (6) months following the Outsource Start
Date and to three (3) such orders per month thereafter. All such purchases are
on a consignment basis. All right, title and interest in and to the consigned
inventory shall, at all times, remain with FTP. UniDirect shall have no right,
title or interest in such consigned inventory. UniDirect shall have no right to
pledge, mortgage or otherwise encumber, and UniDirect shall keep free of any
pledge mortgage or other encumbrance, all of the Products received by UniDirect.
Except as disclosed prior to FTP, UniDirect will not store or hold any of the
consigned Products at any location other than the UniDirect facility to which
FTP ships such inventory and UniDirect will not locate its executive offices
outside the United States. UniDirect shall keep all Products segregated (whether
physically or electronically) from all other goods and property held by
UniDirect, including, without limitation, any other FTP products which UniDirect
may possess pursuant to other, separate agreements with FTP. UniDirect shall not
open or remove the shrink wrap or other license from the Products. UniDirect
shall deliver to FTP, within five (5) business days after the end of each
calendar month, a purchase order for all such Upgrades and Products sold by
UniDirect during the previous month.
b. For each Upgrade or other Product returned to and accepted by
UniDirect in compliance with FTP's policies and procedures for product returns,
including without limitation, appropriate FTP approvals, UniDirect shall receive
a credit from FTP for such return in an amount equal to UniDirect's Net Sale for
such Upgrade or other Product. FTP shall credit the aggregate amount of returns
for such previous month against amounts due FTP from UniDirect and FTP shall
accordingly reduce FTP's invoice to UniDirect by a corresponding amount.
c. All payments hereunder shall be due and payable thirty (30) days
after the date of FTP invoice and shall be paid in U.S. dollars drawn on a U.S.
bank. All shipments to UniDirect shall be made F.O.B. FTP Collect. Each party
shall be responsible for all taxes (except taxes based on the other party's
income), duties and other governmental assessments applicable to such party.
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__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
6. Cooperative Sales and Marketing.
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a. FTP shall provide UniDirect, within three (3) weeks of the end of
each calendar quarter, with a cooperative marketing advertising credit in the
amount of [***] of UniDirect's Net Sales for copies of Product sold
by Unidirect as reported pursuant to Section 4(b)(iii) and for which UniDirect
has submitted payment to FTP, to be used by UniDirect within one hundred twenty
(120) days after the beginning of the calendar quarter for which the credit was
provided and solely for marketing and promoting the Support Services,
Subscription Services and Upgrades consistent with FTP's Cooperative Marketing
Guidelines. In addition to these advertising credits, FTP may, from time to time
and subject to its prior written approval, provide UniDirect with market
development funds to assist UniDirect in achieving the milestones set forth in
Section 4 above. No later than thirty (30) days after the Effective Date, FTP
shall approve and pay to UniDirect an initial market development fund of [***].
b. UniDirect will keep accurate records of leads forwarded to it by
FTP technical support personnel, including the name of the referring person and
whether or not such referral resulted in a sale by UniDirect. UniDirect shall
deliver such reports to FTP on a monthly basis (within five (5) days after the
end of each month) for FTP's use in connection with its business.
7. Customer/Lead Databases and Information.
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a. The parties acknowledge that access to certain Business Unit's
customer information is critical to UniDirect's ability to meet its obligations
under this Agreement. FTP therefore shall deliver to UniDirect, within four (4)
weeks after the Effective Date, copies of (i) all relevant Business Unit
customer and lead/prospect databases that FTP maintains in connection with the
Business Unit's sales, marketing and promotional activities, including but not
limited to the Business Unit's service, registration, customer, lead/prospect
and credit databases and (ii) all other documents and information relating to
such databases which are reasonably necessary or appropriate for UniDirect's use
of the database information. FTP shall transfer the information specified in
this Section 7.a to UniDirect in electronic format (such format to be as
mutually agreed upon by the parties in good faith). FTP shall provide UniDirect
with reasonable and appropriate assistance in implementing such databases on
UniDirect's data processing system. All information provided by FTP to UniDirect
pursuant to this Section 7.a shall be Proprietary Information (defined below);
provided, however, that such information shall not be deemed Proprietary
Information of FTP to the extent it (a) is or becomes (through no improper
action or inaction of UniDirect) generally available to the public, (b) was
rightfully disclosed to UniDirect by a third party, or (c) was independently
developed by UniDirect's employees who had no access to such information.
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[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
b. In connection with obligations under this Section 7, FTP will
assist UniDirect, and in good faith, in generating and acquiring names,
addresses, telephone numbers and other information regarding new customers and
leads/prospects. FTP shall regularly (at such intervals as agreed upon in good
faith by the parties) update its customer and lead/prospect databases and shall
provide such updated information to UniDirect at such times and in such formats
as requested by UniDirect.
c. Promptly after the Effective Date, the parties will implement a
program and/or process for the exchange of updated information from their
respective customer and lead/prospect databases.
d. Upon termination of this Agreement pursuant to Section 14:
(i) Each party shall retain ownership of the customer and
lead/prospect databases, records and related information which that party
possessed and owned prior to the effectiveness of this Agreement. Each of
UniDirect and FTP shall destroy all records and other information not co-owned
by such party as specified in Section 7.d(ii), below and which are owned by the
other party;
(ii) The parties shall jointly own all records and databases (a)
pertaining to customers who purchase from UniDirect any Support Service,
Subscription Service or Upgrade during the term of this Agreement, where such
customers were not under contract for or did not purchase any Support Services,
Subscription Services and/or Upgrades during the six (6) months prior to the
Effective Date, and (b) which UniDirect creates or modifies as a result of its
performance of outsourcing services under this Agreement during the term of the
Agreement with FTP's prior written consent. UniDirect shall not use any
information in the records and databases described in this Section d(ii) to
solicit or sell products which are competitive with the Products. No further
rights to records or databases as contained in the paragraph shall accrue upon
expiration or other termination of this Agreement.
8. Other Obligations of the Parties.
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a. During the term of this Agreement, UniDirect shall promptly
forward all customer inquiries and requests in connection with the Products to
FTP or an authorized FTP agent or reseller, as designated by FTP. FTP shall
forward all appropriate customer inquiries regarding the Support Services,
Subscription Services and Upgrades to UniDirect. In addition, FTP shall maintain
its toll-free customer service telephone number, (▇▇▇) ▇▇▇-▇▇▇▇, and shall
provide in connection therewith a recorded customer service greeting and an
automatic forwarding option to UniDirect (directly to such telephone number(s)
designated by
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UniDirect or as otherwise agreed to by the parties) for orders for and inquiries
about Support Services, Subscription Services and Upgrades.
b. UniDirect shall be available a minimum of 6:00 a.m. to 5:00 p.m.,
Pacific time, Monday through Friday, on normal business days. UniDirect shall
answer the telephone as "FTP Software Services" and obtain all appropriate
customer information.
c. Upon receipt of a telephone order from an FTP customer, UniDirect
shall process the order, including credit card verification. UniDirect shall be
responsible for all credit card discounts and charge back fees. UniDirect shall
then ship the Products within one (1) business day of such order in accordance
with good commercial practices to, among other things, avoid damage to the
Product. UniDirect shall be solely responsible for all costs and expenses
associated therewith.
d. UniDirect shall not, without FTP's prior written consent, use any
Proprietary Information or Product (including, without limitation, transfers or
use between, by or among UniDirect or any affiliate) received pursuant to this
Agreement regarding FTP customers for any purpose other than as contemplated by
this Agreement. During the term of this Agreement, UniDirect may not sell other
FTP products or other entities' products to FTP prospects and customers without
the prior written consent of FTP.
e. The parties shall each designate on Attachment B a contact person
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("Contact Person"); a party may amend its designation of its Contact Person from
time to time by attaching an amended Attachment B signed by such party and
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providing the amended Attachment B to the other party in accordance with the
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notice provisions of Section 17.d, such amendment to be effective upon receipt
by the party to whom it is being noticed. Each Contact Person shall communicate
on a regular basis with the other Contact Person regarding the marketing, sales
and distribution activities of the parties' hereto and shall seek to determine
ways in which to coordinate the respective marketing, sales and distribution
activities of the parties.
f. For no fewer than sixty (60) days following the Effective Date,
FTP shall designate a product manager or other highly skilled, qualified and
knowledgeable individual capable of providing technical support for and training
regarding the Products and who will, at such times as mutually agreed upon by
the parties, provide Product technical support and training to UniDirect's
employees and contractors.
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g. FTP shall provide and license to UniDirect with a reasonable
number of copies of the Products (as mutually determined by the parties) for use
exclusively in support of UniDirect's performance hereunder and subject to all
the terms and conditions of FTP's end user license as provided therewith.
h. FTP may, in its discretion, make its current and any future
electronic point-of-sale system and electronic distribution system available to
UniDirect in connection with UniDirect's activities hereunder.
i. FTP shall provide, maintain and display on its worldwide web page
a "Buy Button" for the Support Services, Subscription Services and Upgrades. For
purposes of this Agreement, a "Buy Button" means an appropriately labeled
graphical image which may be selected by a user using a worldwide web browser
such as Netscape Navigator or Microsoft Internet Explorer and which contains a
hyperlink to a worldwide web page provided and maintained by UniDirect. FTP
acknowledges and agrees that the Buy Button shall be the exclusive non-point of
sale means for purchasing Support Services, Subscription Services and Upgrades
electronically.
9. Limited Liability; Force Majeure. IN NO EVENT SHALL FTP BE
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LIABLE FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING WITHOUT
LIMITATION LOSS OF INCOME, DATA, USE OR INFORMATION EVEN IF FTP HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL THE LIABILITY OF FTP
EXCEED TWENTY-FIVE THOUSAND DOLLARS ($25,000) OR THE AMOUNT PAID FOR THE PRODUCT
OR SERVICE GIVING RISE TO THE CLAIM, WHICHEVER IS GREATER, REPAIR, REPLACEMENT
OR REFUND (AT FTP'S OPTION) IS THE EXCLUSIVE REMEDY FOR A DEFECT. EXCEPT FOR
PAYMENT OBLIGATIONS HEREUNDER, NEITHER PARTY SHALL BE LIABLE FOR ANY FAILURE OR
DELAY DUE TO MATTERS BEYOND ITS REASONABLE CONTROL.
10. Reports; Examination of Books. No later than the fifth (5th)
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business day of each month, UniDirect shall submit to FTP a written report
detailing UniDirect's FTPSS activities during the previous month, including
UniDirect's sales of Support Services, Subscription Services and Upgrades.
UniDirect shall submit all such reports to FTP in electronic form and in the
ASCII format specified in Attachment C hereto or as otherwise agreed. FTP may,
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at its sole expense, during UniDirect's normal business hours and with seventy
two (72) business hours' prior written notice, but in no event more than two (2)
times each calendar year, have an independent certified public accountant
examine the relevant books and records of UniDirect to verify UniDirect's
compliance with its obligations under this Agreement; provided such accountant
is bound in writing to maintain in strict confidence and not to disclose or use
any UniDirect information except as necessary to disclose to FTP for the above
purposes. Prior to the
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Outsource Start Date, UniDirect shall permit FTP or the authorized
representative to perform an inventory audit consistent with the terms described
above.
11. Indemnification.
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a. Notwithstanding Section 9 above, FTP will indemnify UniDirect for
reasonable costs, damages, and attorney's fees finally awarded against UniDirect
or agreed to by FTP in any settlement resulting from any claim that the Products
infringe a valid United States and/or Canada patent, copyright, trademark or
trade secret, and FTP will, at its option and expense, (i) procure for UniDirect
the right to continue distributing the Products, (ii) replace or modify the
Products so they become non-infringing, or (iii) refund the license fee for the
infringing Products prorated on a straight line basis over five (5) years,
provided UniDirect (a) promptly notifies FTP of the action, (b) immediately
discontinues distributing the Products, and (c) allows FTP sole control of such
action and gives FTP reasonable assistance in the defense of the action. FTP
shall have no liability for any claim based upon (1) the combination, operation
or use of the Products with products not furnished by FTP to the extent such
claim results from such combination or (2) modifications to the Products not
made by FTP or made in compliance with UniDirect's instructions. FTP's
obligation to indemnify UniDirect under this Section 11.a shall be limited to
two hundred fifty thousand dollars ($250,000). This Section 11.a sets forth
FTP's entire liability and sole obligation and UniDirect's exclusive remedy in
the event of any claim of intellectual property infringement.
b. Subject to Section 9 above, FTP will indemnify UniDirect for
reasonable costs, damages, and attorney's fees incurred by UniDirect in
connection with any claim or action brought or threatened against UniDirect due
to its doing business as FTPSS, where such action or claim does not otherwise
arise from the acts or omissions of UniDirect; provided, however, that FTP shall
have no obligations under this Section 11.b unless UniDirect (i) promptly
notifies FTP of the claim or action and (ii) allows FTP sole control of such
claim or action and gives FTP reasonable assistance in the defense thereof.
c. Subject to Section 9 above, UniDirect shall indemnify FTP for
reasonable costs, damages and attorney's fees finally awarded FTP, or agreed to
in any settlement (subject to UniDirect's prior written consent to such
settlement), arising from a claim of UniDirect's negligence or willful
misconduct with respect to its distribution of Products; provided, however, that
the indemnification provided by this Section 9.c shall be conditioned upon FTP
(i) promptly notifying UniDirect of the action and (ii) allowing UniDirect sole
control of such action and gives UniDirect reasonable assistance in the defense
of the action. UniDirect shall have no obligation under this Section 11.c to
indemnify FTP for any claim based upon or arising from any claimed defect in a
Product, Upgrade, Support Service or Subscription Service.
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12. Relationship of Parties. The parties hereto expressly understand
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and agree that UniDirect is an independent contractor in the performance of each
and every part of this Agreement, is solely responsible for all of its employees
and agents and its labor costs and expenses arising in connection therewith and
is responsible for any and all claims, liabilities, damages, debts, settlements,
costs, attorneys' fees, expenses and liabilities of any type whatsoever that may
arise on account of UniDirect's activities, or those of its employees or agents.
FTP is in no manner associated with or otherwise connected with the actual
performance of this Agreement on the part of UniDirect, nor with UniDirect's
employment of other persons or incurring of other expenses.
13. Assignment. Neither party may assign or transfer, in whole or in
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part, this Agreement or its rights and obligations hereunder without the prior
written consent of the non-assigning party, except for an assignment by FTP to
any parent or affiliate of FTP or transferee of all or substantially all of the
Business Unit's assets.
14. Term and Termination.
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a. Unless terminated earlier as provided herein, this Agreement
shall have a three (3) year term commencing with the Effective Date. The Parties
may agree to renew the term of this Agreement for additional one (1) year terms,
by providing the other party written notice ninety (90) days prior to the third
anniversary date or any subsequent anniversary date hereof. If the parties
continue to do business with each other after such termination without full
documentation, the relevant terms hereof will continue to govern the
relationship unless otherwise expressly agreed in writing and except that the
relationship may be terminated (except with regard to payment) unilaterally by
either party merely by ceasing to do business with the other.
b. This Agreement may be terminated by a party for cause immediately
by written notice upon the occurrence of any of the following events:
(i) if the other ceases to do business, or otherwise
terminates its business operations;
(ii) if UniDirect breaches Section 4.d and e hereof; or
(iii) if the other materially breaches any material provision of
this Agreement and fails to fully cure such breach within thirty (30) days of
written notice describing the breach; or
(iv) if the other becomes insolvent or seeks protection under
any bankruptcy, receivership, trust deed, creditors arrangement, composition or
comparable proceeding, or if any such proceeding is instituted against the
other.
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c. Each party understands that the rights of termination hereunder
are absolute. Neither party shall incur any liability whatsoever for any damage,
loss or expenses of any kind suffered or incurred by the other arising from or
incident to any termination of this Agreement by such party that complies with
the terms of this Agreement whether or not such party is aware of any such
damage, loss or expenses.
d. Termination is not the sole remedy under this Agreement and,
whether or not termination is effected, all other remedies will remain
available.
e. In addition to any provisions that survive termination according
to their terms, the following sections shall survive termination of this
Agreement: Sections 1, 9 through 12 and 14 through 17.
15. Confidentiality.
---------------
a. Each party understands that the other party has disclosed or may
disclose information relating to the disclosing party's business including,
without limitation, business, financial, customer and service development,
plans, forecasts and strategies ("Proprietary Information"). Each receiving
party hereby agrees: (i) to treat the disclosing party's Proprietary Information
as strictly confidential and to hold such information in confidence and to take
reasonable precautions to protect such Proprietary Information; and (ii) not to
divulge any Proprietary Information to any third party; and (iii) not to make
any use whatsoever at any time of such Proprietary Information except as
required in the execution of such receiving party's obligations under this
Agreement. Each party agrees that it has or shall obtain written agreements with
all employees and consultants who are, in accordance with the terms of this
Agreement, permitted access to Proprietary Information which agreements impose
confidential obligations sufficient to meet the obligations set forth in this
Section 15. The terms of this Agreement shall be Proprietary Information.
b. Without granting any right or license, the disclosing party agrees
that the obligations of the receiving party in Section 15.a above shall not
apply with respect to any information following three (3) years after such
information's disclosure to the receiving party or which the receiving party can
document: (i) is or becomes (through no improper action or inaction of the
receiving party) generally available to the public; or (ii) was rightfully
disclosed to it by a third party; or (iii) was independently developed by
employees of the receiving party who had no use of or access to the disclosing
party's Proprietary Information.
16. Arbitration. Except that either party may seek equitable or
-----------
similar relief from a court, any dispute, controversy or claim arising out of or
in relation to this Agreement or at law, or the breach, termination or
invalidity
13
thereof, that cannot be settled amicably by agreement of the parties hereto,
shall be finally settled by "expedited arbitration" in accordance with the
arbitration rules of the American Arbitration Association ("AAA"), then in
force; provided, however, that arbitration proceedings may not be instituted
until the party alleging breach of this Agreement by the other party has given
the other party not more than thirty (30) days to remedy any alleged breach and
the other party has failed to do so. Such arbitration must result in a final
binding decision, without a right of appeal, in no more than thirty (30) days
from the date of the notice of a dispute under this section from any party to
another. Such arbitration shall be conducted in English by three (3)
arbitrators. Such arbitrators shall be selected by the mutual agreement of the
parties or, failing such agreement, shall be selected according to the relevant
AAA rules. The parties shall bear the costs of such arbitrators equally. The
prevailing party in any such arbitration or in any judicial enforcement or
review proceeding shall be entitled to its reasonable attorneys' fees and costs
in addition to any other amount of recovery ordered by such arbitrator or court.
The arbitrator may not award punitive or multiple damages. The arbitration will
take place in Santa ▇▇▇▇▇ County, California (if instituted by FTP) or Boston,
Massachusetts (if instituted by UniDirect). The award rendered shall be final
and binding upon both parties. Judgment upon the award may be entered in any
court having jurisdiction, or application may be made to such court for judicial
acceptance of the award and/or an order of enforcement as the case may be.
17. General.
-------
a. Amendment and Waiver - Except as otherwise expressly provided
herein, any provision of this Agreement may be amended and the observance of any
provision of this Agreement may be waived (either generally or any particular
instance and either retroactively or prospectively) only with the written
consent of the parties.
b. Governing Law and Legal Actions - This Agreement shall be governed
by and construed under the laws of the State of California and the United States
without regard to conflicts of laws provisions thereof. The sole jurisdiction
and venue for actions related to the subject matter hereof shall be the state
and U.S. federal courts located in Santa ▇▇▇▇▇ County, California (if such
action instituted by FTP) or Boston, Massachusetts (if such action is instituted
by UniDirect). Both parties consent to the jurisdiction of such courts and agree
that process may be served as allowed by applicable state and U.S. federal law.
In any action or proceeding to enforce rights under this Agreement, the
prevailing party shall be entitled to recover costs and reasonable attorneys'
fees.
c. Headings - Headings and captions are for convenience only and are
not to be used in the interpretation of this Agreement.
14
d. Notices - Notices under this Agreement shall be sufficient only if
personally delivered, delivered by a major commercial rapid delivery courier
service or mailed by certified or registered mail, return receipt requested to a
party at its addresses first set forth herein or as amended by notice pursuant
to this subsection. If not received sooner, notice by mail shall be deemed
received five (5) days after deposit in the U.S. mails.
e. Entire Agreement - This Agreement supersedes all proposals, oral
or written, all negotiations, conversations, or discussions between or among
parties relating to the subject matter of this Agreement and all past dealing or
industry custom.
f. Severability - If any provision of this Agreement is held by a
court of competent jurisdiction to be illegal, invalid or unenforceable, that
provision shall be limited or eliminated to the minimum extent necessary so that
this Agreement shall otherwise remain in full force and effect and enforceable.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date set forth above.
UNIDIRECT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
Title: PRESIDENT, UNIDIRECT CORP.
--------------------------------
FTP SOFTWARE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: President, Network Applications Business Unit
------------------------------------------------
16
ATTACHMENT A
RETAIL PRICES
[to be provided]
17
ATTACHMENT B
CONTACT PERSONS
[to be provided]
18
ATTACHMENT C
ASCII FORMAT FOR REPORTS
[to be provided]
19
Amendment No. 1 to UniDirect Corporation
Outsourcing Services Agreement dated July 21, 1997
THIS AMENDMENT No.1 entered into as of September 12, 1997 ("Amendment") to
the Outsourcing Services Agreement by and between FTP Software, Inc., a
Massachusetts corporation, with a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S.A. ("FTP"), and UniDirect
Corporation, a California corporation, with its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("UniDirect").
WHEREAS, the parties desire to amend the Outsourcing Services Agreement
entered as of July 21, 1997 by and between FTP and UniDirect (the "Agreement")
to, among other things, allow UniDirect to fulfill orders for software product.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound, the parties hereby agree as
follows:
1.The Agreement is hereby amended as follows:
a. Section 1(e): Replace "Support Services and Subscription Services" with
------------
"Products".
b. Delete "Upgrades" wherever it appears.
c. Section 2(a): Delete Section 2(a) in its entirety and replace with the
------------
following: "FTP hereby grants to UniDirect for the term of this
Agreement, and UniDirect accepts, a non-sublicenseable, non-assignable,
non-transferable appointment and license to market, sell and distribute
to end users of the Products (i) Support Services and Subscription
Services and (ii) volume licenses for software Products, in accordance
with FTP's then-current policies. Notwithstanding the foregoing,
UniDirect shall not sell copies of software Product to the named
corporations forwarded to UniDirect in writing by FTP or its resellers
("Protected Accounts"). Should UniDirect fulfill an order for software
Product for any Protected Account, it shall immediately forward any
revenue or purchase orders received from such Protected Account to FTP
or the appropriate reseller. Any breach of the above-mentioned
requirement shall be a material breach of the Agreement with respect to
the outsource of software Product, for which UniDirect shall have thirty
(30) days to cure. In connection with the sale of volume licenses as
described above, UniDirect shall issue license certificates in the form
and format provided by FTP to UniDirect, which form shall not be
modified in any way without FTP's prior written approval, other than to
fill in customer-specific information as required by the form."
d. Section 2(b): Add the following after the first sentence: "Any sale of
------------
Support Services and/or Subscription Services which occur within thirty
(30) days of the initial Product license grant shall be deemed to have
occurred upon the initial Product license grant."
e. Section 2(c): Replace "Support Services, Subscription Services and
------------
Upgrades" with "Products". Add the following at the end of this section:
"Each individual working within the FTPSS operation shall have signed an
employee confidentiality agreement which obligates such individual to
maintain the confidentiality of Proprietary Information."
f. Section 4(b): Add the following as new subclause (iii) and renumber
------------
accordingly: "For all licenses of software Products by UniDirect in
accordance with this Agreement, UniDirect shall receive a discount equal
to [***].
20
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
g. Section 4(b)(iv): Replace "Support Services, Subscription Services and
----------------
Upgrades" with "Products".
h. Section 4(d): Add the following after "UniDirect" in the second line
------------
thereof: "for sales of Support Services and Subscription Services
i. Section 4(e): Add the following after "Net Sales" wherever it appears:
------------
"for the sale of Support Services and Subscription Services
j. New Section 4(f): "On or before October 15, 1997, the parties will agree
----------------
on performance milestones to be achieved by UniDirect in connection with
the sale of copies of software Products. The performance milestones shall
be measured at [***] after the Effective Date. Failure to achieve the
performance milestones at any [***] shall be a material breach of this
Agreement."
k. Section 5(a): In the sixth sentence, add the following after the initial
------------
clause: "UniDirect will maintain appropriate insurance on the consigned
Products consistent with industry standards and". Replace "Products" with
"Support Services and Subscription Services" in the last sentence."
1. Section 5(c): Add the following after "invoice" in the second line: "or
------------
sales out report, as the case may be".
m. Section 6(a): Replace "Product" in the third line thereof with "Support
------------
Services and Subscription Services".
n. Section 10: Replace "Support Services, Subscription Services and
----------
Upgrades" in the fourth line thereof and replace it with "Products".
o. Section 14(a): Replace the first sentence of this section with the
-------------
following: "Unless terminated earlier as provided herein, this Agreement
shall have a three (3) year term with respect to the outsource of Support
Services and Subscription Services and a one (1) year term with respect
to the outsource of software Products, in each case commencing on the
Effective Date."
p. Section 14(b): Add the following immediately preceding the colon: "A
-------------
breach of the software Product outsource shall not automatically be
deemed a breach of the Support Services and Subscription Services
outsource."
q. New Sections 17-20: Add the following before current Section 17 and
------------------
renumber accordingly:
17. Title to Product: UniDirect agrees that the Product contains
----------------
valuable proprietary trade secrets of FTP and/or its suppliers.
Title, ownership and all rights in and to copyrights, patents,
trademarks, trade secrets and all other proprietary rights in the
Products remain in FTP and/or its suppliers. No source code rights
are granted under this Agreement. UniDirect agrees not to (a)
modify, translate, reverse engineer or otherwise alter the Product
or (b) use the Product for any purpose other than as authorized by
this Agreement. Localization or translation of the Product
requires a separate written agreement between the parties.
18. Product Warranty: End User warranties are addressed in the
----------------
applicable FTP license agreement contained within the Product
and/or packaging. EXCEPT AS PROVIDED IN FTP'S LICENSE AGREEMENT,
THE PRODUCT IS PROVIDED
21
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
"AS IS." FTP MAKES NO REPRESENTATIONS OR WARRANTY OF ANY KIND, AND
HEREBY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER
MATTER WITH RESPECT TO THE PRODUCT, WHETHER USED ALONE OR IN
CONJUNCTION WITH ANY OTHER SOFTWARE OR PRODUCT.
19. U.S. Government Restricted Rights: Products described or
---------------------------------
referenced in this Agreement are commercial computer software
programs developed at private expense. Use, duplication or
disclosure by the U.S. Government are subject to the provisions of
the license agreement contained in or with the software product as
prescribed by the applicable provisions of the DOD FAR supplement
and similar regulations of other U.S. Federal agencies applicable
to the delivery of commercial software including the restrictions
set forth in FAR 52.227-19(c)(2).
20. International/Export: UniDirect agrees to comply with U.S. export
--------------------
laws and, in that regard, shall not export or re-export any
Product, including software, documentation or technical data
received from FTP or any direct product thereof, directly or
indirectly, to any country, entity or person prohibited by the
U.S. Government. UniDirect acknowledges that compliance with U.S.
export laws may cause delays in shipments and/or prohibit FTP from
exporting certain Products to certain countries and entities for
certain uses. In no event shall FTP be liable for any such delays
or prohibition. UniDirect shall also comply with the laws and
regulations of other applicable countries which prohibit export or
diversion of certain technical products to certain countries and
individuals and any other applicable law. UniDirect shall comply
with the U.S. Foreign Corrupt Practices Act. The parties expressly
agree that the U.N. Convention on the International Sale of Goods
shall not apply to this Agreement. English shall be the governing
language of this Agreement.
2. All other terms and conditions of the Agreement remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year set forth above.
UNIDIRECT CORPORATION FTP SOFTWARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ [ILLEGIBLE]
---------------------------- ----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ Name: /s/ [ILLEGIBLE]
---------------------------- ----------------------------
Title: President & CEO Title: C.O.O., Net. Apps. By
---------------------------- ----------------------------
22
IP Technology Business Unit Addendum to UniDirect Corporation
Outsourcing Services Agreement dated July 21, 1997
THIS ADDENDUM entered into as of October 1, 1997 ("Addendum") to the
Outsourcing Services Agreement by and between FTP Software, Inc., a
Massachusetts corporation, with a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S.A ("FTP"), and UniDirect
Corporation, a California corporation, with its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("UniDirect"). The
Effective Date for purposes of this Addendum, and the Agreement as amended
hereby, shall be October 1, 1997.
WHEREAS, the parties desire to amend the Outsourcing Services Agreement
entered as of July 21, 1997 by and between FTP and UniDirect (the "Agreement")
to allow UniDirect to fulfill orders for maintenance and conversion products
relating to software products offered by the IP Technology Group Business Unit
of FTP.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound, the parties hereby agree as
follows:
1. This Addendum shall apply to the IP Technology Group Business Unit of FTP
only and not to any other business unit or division of FTP. This Addendum
shall not affect the Agreement, as amended, as it applies to the VIP
Network(TM) Applications Business Unit. To that end, UniDirect represents
that the activities and services performed by it under the Agreement, as
modified by this Addendum (including without limitation, the UniDirect
employees chosen to perform the services described in this Addendum) shall
be separate and distinct from the other activities and services performed
by UniDirect on behalf the VIP Network(TM) Applications Business Unit of
FTP under the Agreement, as amended by Amendment No. 1 or otherwise.
2. The Agreement is hereby amended as follows:
a. For purposes of the Agreement, as amended by the IP Technology
Group Business Unit Addendum, the "Outsource Start Date" shall
mean the date that computer and other systems are fully
operational, which the parties expect to occur on or before
October 31, 1997.
b. Section 1(a): Delete Section 1(a) in its entirety and replace
------------
with the following; "'Business Unit' shall mean FTP's IP
Technology Group Business Unit through which copies of Products,
including Maintenance and Conversions, are sold."
c. Replace "Subscription Services, Support Services and Upgrades"
wherever they appear with "Maintenance and Conversions".
d. Section 1(d): Delete Section 1(d) in its entirety and replace
------------
with the following; "'Products' shall mean the software products,
Maintenance and Conversions offered by the Business Unit for
commercial sale as of the Effective Date or during the term of
this Agreement, as further described on Attachment 2 hereto as
incorporated herewith."
e. Section 1(e): Replace "Attachment A" thereto with Attachment 2
------------
hereto as incorporated herewith.
f. Section 1(f), Section 1(g) and Section 1(i): Delete these
-------------------------------------------
sections in their entirety.
1
g. New Section 1(i): "Conversions" shall mean the software products
----------------
that convert any Nov*ix or Internet Gateway Product to the latest
Internet Gateway version 2.0 product.
h. New Section 1(k): "Maintenance" shall mean the combined telephone
----------------
support and upgrade subscription services which maintain the
Nov*ix or Internet Gateway Products or Conversions, as further
described on Attachment 3 hereto as incorporated herewith."
i. Section 2(b): Replace Section 2(b) in its entirety and replace
------------
with the following: "The license granted by FTP to UniDirect in
Section 2(a) above shall be exclusive with regard to all sales of
Maintenance renewals within the Territory to FTP's installed base
of end users which do not occur within thirty (30) days of the
initial Product license grants. Such license shall be non-
exclusive with regard to all other sales, including without
limitation, all sales of Conversions within the Territory.
Notwithstanding the foregoing, UniDirect shall not sell
Conversions to the named corporations forwarded to UniDirect in
writing by FTP or its resellers ("Protected Accounts"). Should
UniDirect fulfill an order for Conversions for any Protected
Account, it shall immediately forward any revenue or purchase
orders received from such Protected Account to FTP or the
appropriate reseller. Any breach of the above-mentioned
requirement shall be a material breach of the Agreement, for
which UniDirect shall have thirty (30) days to cure."
j. Section 2(c): Add the following at the end of this section: "Each
------------
individual working within the FTPSS operation shall have signed
an employee confidentiality agreement which obligates such
individual to maintain the confidentiality of Proprietary
Information."
k. Section 2(e): Delete this section in its entirety.
------------
l. Section 4(a), Section 4(b)(i) and (ii) and Section 4(c): Delete
-------------------------------------------------------
these sections in their entirety and replace with the following:
"4(a) For the initial term of this Agreement, the "Maintenance
Baseline" shall be $230,000. The "Conversion Baseline" shall be
$70,000. The Maintenance Baseline and the Conversion Baseline
shall be collectively referred to as "Baseline".
4(b) Beginning on the Effective Date and continuing until such time as
UniDirect's Net Sales of Maintenance during a particular calendar
quarter exceed the applicable Baseline, UniDirect shall receive
the following discounts from the Retail Prices for the remainder
of such quarter:
(i) Until UniDirect achieves the Maintenance Baseline, [***];
this discount shall [***] to [***] for UniDirect's
achievement of the Maintenance Baseline. Once UniDirect has
first achieved the Maintenance Baseline, for succeeding
quarters, the initial discount shall be [***], which
discount shall [***] to [***] upon UniDirect again achieving
the Maintenance Baseline in a particular quarter.
(ii) Until UniDirect achieves the Conversion Baseline, [***];
this discount shall [***] to [***] for UniDirect's
achievement of the Conversion Baseline. For succeeding
quarters, the initial discount shall be [***], which
discount shall [***] to [***] upon UniDirect again achieving
the Conversion Baseline in that particular quarter.
4(c) This section is deleted in its entirety.
j. Section 4(e): This section is deleted in its entirety.
------------
k. Section 5(a): In the sixth sentence, add the following after the
------------
initial clause: "UniDirect will maintain appropriate insurance on
the consigned Products consistent with industry standards"
2
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
l. Section 5(c): Add the following after "invoice" in the second
------------
line; "or sales out report, as the case may be".
m. Section 6(a): Replace this section with the following; "FTP shall
------------
provide UniDirect, within one hundred twenty (120) days of the
start of each calendar quarter, with a cooperative marketing
credit in the amount of [***] of UniDirect's Net Sales of
Maintenance and Conversions sold by UniDirect as reported
pursuant to Section 4(b)(iii) and for which UniDirect has
submitted payment to FTP, to be applied solely for marketing and
promoting Maintenance and Conversion in the Territory within one
hundred twenty (120) days from the beginning of the calendar
quarter for which the credit was provided. FTP may, at its
option, provide input and content to the marketing and
promotional activities conducted by UniDirect, which input and
content UniDirect shall reasonably include in any such
activities."
n. Section 6(e): Replace "Attachment B" thereto with Attachment 4
------------
hereto as incorporated herewith.
o. Section 14(a): Replace the first sentence of this section with
-------------
the following; "Unless terminated earlier as provided herein,
this Agreement shall have a one (1) year/term commencing on the
Effective Date."
p. Section 14(b): Add the following immediately preceding the colon:
-------------
"A breach of the Agreement, as amended by Amendment No. 1,
between UniDirect and the VIP Network(TM) Applications Business
Unit, shall not automatically be deemed a breach of the
Agreement, as amended by the Addendum dated October 1, 1997
between UniDirect and the IP Technology Group Business Unit."
q. New Sections 17-20: Add the following before current Section 17
------------------
and renumber accordingly:
17. Title to Product: UniDirect agrees that the Product
----------------
contains valuable proprietary trade secrets of FTP
and/or its suppliers. Title, ownership and all rights
in and to copyrights, patents, trademarks, trade
secrets and all other proprietary rights in the
Products remain in FTP and/or its suppliers. No source
code rights are granted under this Agreement. UniDirect
agrees no to (a) modify, translate, reverse engineer or
otherwise alter the Product or (b) use the Product for
any purpose other than as authorized by this Agreement.
Localization or translation of the Product requires a
separate written agreement between the parties.
18. Product Warranty: End User warranties are addressed in
----------------
the applicable FTP license agreement contained within
the Product and/or packaging. EXCEPT AS PROVIDED IN
FTP'S LICENSE AGREEMENT, THE PRODUCT IS PROVIDED "AS
IS," FTP MAKES NO REPRESENTATIONS OR WARRANTY OF ANY
KIND, AND HEREBY DISCLAIMS ANY AND ALL WARRANTIES,
EXPRESS OR IMPLIED AS TO MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR ANY OTHER MATTER WITH RESPECT TO
THE PRODUCT, WHETHER USED ALONE OR IN CONJUNCTION WITH
ANY OTHER SOFTWARE OR PRODUCT.
19. U.S. Government Restricted Rights: Products described
---------------------------------
or referenced in this Agreement are commercial computer
software programs developed at private expense. Use,
duplication or disclosure by the U.S. Government are
subject to the provisions of the license agreement
contained in or with the software product as prescribed
by the applicable provisions of the DOD PAR supplement
and similar
3
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
regulations of other U.S. Federal agencies applicable to the
delivery of commercial software including the restrictions set
forth in FAR 52.227-19(c)(2).
20. International/Export: UniDirect agrees to comply with U.S. export
--------------------
laws and, in that regard, shall not export or re-export any
Product, including software, documentation or technical data
received from FTP or any direct product thereof, directly or
indirectly, to any country, entity or person prohibited by the
U.S. Government. UniDirect acknowledges that compliance with U.S.
export laws may cause delays in shipments and/or prohibit FTP
from exporting certain Products to certain countries and entities
for certain uses. In no event shall FTP be liable for any such
delays or prohibition. UniDirect shall also comply with the laws
and regulations of other applicable countries which prohibit
export or diversion of certain technical products to certain
countries and individuals and any other applicable law. UniDirect
shall comply with the U.S.Foreign Corrupt Practices Act. The
parties expressly agree that the U.N. Convention on the
International Sale of Goods shall not apply to this Agreement.
English shall be the governing language of this Agreement.
3. All other terms and conditions of the Agreement remain in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum
to be duly executed as of the day and year set forth above.
UNIDIRECT CORPORATION FTP SOFTWARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- -----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------- ---------------------------
Title: Chairman Title: VP NASales IP Tech Bu.
------------------------ --------------------------
4
Effective January 1, 1998
September 13, 1994
Amendment 1
Pricing program adjustments
To encourage the early renewal process to occur, we propose that a late renewal
fee be imposed upon certain levels of delinquency of renewal. This will help to
encourage a sense of urgency from the FTP Customer base, and help increase the
overall renewal rate. Our experience has showed to us the fact that building
these types of re-occurring compelling events are paramount to the success of
any subscription based program. Given the proactive posture of FTPSS in sales,
we feel that we can touch and educate all identified renewable revenue long
before the expiration of the contract. With this "sooner than later" based
program, we should increase the closure rate.
We would like to run the following program, and pricing scheme with an ongoing
90 day review process, where both FTP and FTPSS can determine the success of the
program, and make adjustments to it accordingly.
FTP Maintenance Renewal Matrix
---------------------------------------------------------
Renewal Sales Program
One
Time
Time Parameters Discount Structure charge
---------------------------------------------------------
Regular Renewal Up To Exp Date [***] [***]
Lapsed Renewal Exp +1 to 90 days [***] [***]
Re-Adoption 91 days + [***] [***]
Submitted Approved
Date: 11-11-97 Date: 11-11-97
------------------------ ----------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/
------------------------ ----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ FTP Software Authorized Signature
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
Amendment No.2 to UniDirect Corporation
Outsourcing Services Agreement dated July 21, 1997
THIS AMENDMENT No.2 entered into as of January 21, 1998 ("Amendment") to
the Outsourcing Services Agreement by and between FTP Software, Inc., a
Massachusetts corporation, with a principal place of business at ▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇. ("FTP"), and UniDirect Corporation, a
California corporation, with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("UniDirect").
WHEREAS, the parties desire to amend the Outsourcing Services Agreement
entered as of July 21, 1997 by and between FTP and UniDirect, as amended (the
"Agreement") to, among other things, allow UniDirect to fulfill orders in
competitive and promotional situations.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound, the parties hereby agree as
follows:
1. The parties acknowledge that, as of the date of this Amendment, FTP sells
Support Services and Subscription Services as one product known as
"maintenance" for the Retail Price set forth on the current Suggested Retail
Price List. Accordingly, all references in the Agreement to Support Services
and Subscription Services shall mean "maintenance
2. The Agreement is hereby amended as follows:
a. Section 2(a): Delete subclause (ii) in the first sentence thereof and
------------
the second sentence in its entirety with the following: "(ii) volume
licenses for software Products only where such sale is incidental to,
and a part of, a sale of Support Services and Subscription Services, in
accordance with FTP's then-current policies. In no event shall UniDirect
sell copies of software Product to the named corporations forwarded to
UniDirect in writing by FTP or its resellers ("Protected Accounts")."
b. Section 4(b)(i) and (ii): Delete subclauses (i) and(ii) in their
------------------------
entirety and replace them with the following: "(i) For UniDirect's first
[***] of Net Sales of Subscription and Support Services per calendar
month, [***]; this discount shall [***] to [***] for all sales of
Subscription and Support Services during such month which exceed [***].
c. Section 4(c): Delete subclauses (i) and (ii) in their entirety and
------------
replace them with the following: "(i) For UniDirect's [***] of Net Sales
of Subscription and Support Services per calendar month, [***]; this
discount shall [***] to [***] for all sales of Subscription and Support
Services during such month which exceed [***]."
d. Section 4(f): Delete this section in its entirety.
------------
e. Section 6(a): Replace "Support Services and Subscription Services" with
------------
"Products".
3. The parties acknowledge and agree that the only sale of Support or
Subscription Services permitted to be made by UniDirect to a federal, state
or local government entity or agency under the terms and conditions of the
Agreement shall be on a non-exclusive basis.
4. All other terms and conditions of the Agreement remain in full force and
effect.
1
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year set forth above.
UNIDIRECT CORPORATION FTP SOFTWARE, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/
------------------------ -----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:
---------------------- ---------------------------
Title: CEO Title:
--------------------- --------------------------
2
[LETTERHEAD OF UNIDIRECT APPEARS HERE]
January 27, 1998
Pricing program adjustments
CHANGE IN PRICING NOMENCLATURE
------------------------------
---------------------------------------------------------------------------------------------------------------
One
Time
Time Parameters Discount Structure Charge Current Proposed
---------------------------------------------------------------------------------------------------------------
Up To Exp Date [***] [***] [***] [***]
Exp +1 to 90 days [***] [***] [***] [***]
91 days + [***] [***] [***] [***]
---------------------------------------------------------------------------------------------------------------
[***]
Effective January 27, 1998
Submitted Approved
Date: 1/28/98 Date: 1-28-98
------------------------------------ --------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President /s/
----------------------------------------- ------------------------------
UniDirect Corporation Authorized Signature FTP Software Authorized Signature
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
[LETTERHEAD OF UNIDIRECT APPEARS HERE]
January 27, 1998
FTP Software Services Guidelines
1.) Any "special pricing" requests must be sent through ▇▇▇ ▇▇▇▇▇ via email or
fax and sent to and approved by ▇▇▇▇▇ ▇▇▇▇▇▇. Any order that is processed
without written approval will be invoiced at list price less FTPSS standard
discount.
2.) All daily transactions where maintenance or additional seats to an existing
site are sold must contain the site license number. This must be reported
nightly through the daily transactions report.
3.) Add-on licenses may only be sold in conjunction with the maintenance
renewal sales motion. Due to the nature of our renewal process, potential
renewal opportunities will be contacted up to 60 days prior to the
expiration and the renewal process often extends out 30 days after the
expiration date when the customer does not renew in a timely fashion.
4.) FTP Software Services will sell product (add-on licenses) during this 90-
day window (60 days prior to expiration and 30 days after) and will
reference the maintenance renewal related to the sale in an email to ▇▇▇
▇▇▇▇▇ and ▇▇▇▇ Formalerie.
All potential product opportunities identified by FTPSS that do not meet
the above criteria will be sent out to the channel partners as leads.
Effective January 1, 1998
Submitted Approved
Date: 1/28/98 Date: 1/28/98
------------------------------------ ----------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President /s/
----------------------------------------- ---------------------------------
UniDirect Corporation Authorized Signature FTP Software Authorized Signature
[LETTERHEAD OF FTP SOFTWARE SERVICES APPEARS HERE]
26 May, 1998
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
FTP Software
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇▇▇,
Thank you for taking the time to speak with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and me on
Friday. I am sending this letter to follow up on our discussion. In that
discussion, you agreed to move UniDirect to the [***] margin structure
laid out in the contract (more detail below) in recognition of the revenue
run rate established by UniDirect over the last few quarters. We agreed
that the effective date for the new margin levels was to be June 1, 1998.
Per the contract, (section 4(c)), going forward, the discount for the sales
of Subscription and Support Services will be [***]. The discount for all
Sales of Subscription and Support Services which exceed [***] in a given
month will be [***]. This discount structure shall be in effect June 1,
1998.
Please acknowledge your agreement by signing below
Sincerely,
/s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
Vice President of Sales
Acknowledged: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ 5/26/98
---------------------- -------
▇▇▇▇▇▇ ▇▇▇▇▇ Date
__________
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities & Exchange Commission.
August 11, 1998
Rainmaker Systems Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Amendment No. 3
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇:
Please find following Amendment No. 3 to the agreement between FTP Software Inc.
and UniDirect Corp., regarding the Internet Technology Group Business Unit.
Due to the sale of the Internet Technology Group product line by FTP Software
Inc. to Network Designers Ltd., as of August 1, 1998 FTP Software Services will
no longer sell the Internet Technology product line.
Sincerely,
/s/ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Sales Manager
FTP Software Services
Amendment No. 3 to UniDirect Corporation
Outsourcing Services Agreement dated July 21, 1997
THIS AMENDMENT No. 3 entered into as of____, 1998 ("Amendment") to the
Outsourcing Services Agreement by and between FTP Software, Inc., a
Massachusetts corporation, with a principal place of business at ▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇. ("FTP"), and UniDirect Corporation, a
California corporation, with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("UniDirect").
WHEREAS, the parties desire to amend the Outsourcing Services Agreement
entered as of July 21, 1997 by and between FTP and UniDirect, as amended by
Amendment Number One dated September 12, 1998, IP Technology Business Unit
Addendum dated October 1, 1997 and Amendment Number Two dated January 21, 1998
(the "Agreement") to delete FTP IP Technology Group Business Unit products as
set forth in IP Technology Business Unit Addendum dated October l, 1997;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound, the parties hereby agree as
follows:
1. Reference: IP Technology Group Business Unit Addendum dated October 1, 1997
a. Delete all terms and conditions of the Addenddum in its entirety.
----------------------------------------------------------------
2. All other terms and conditions of the Agreement remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number
Three to be duly executed as of the day and year set forth above.
UNIDIRECT CORPORATION FTP SOFTWARE, INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:________________________
--------------
Name. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:______________________
--------------
Title: President Title:_____________________
---------