Marketing and Distribution Agreement - PeopleSoft Inc. and Momentum Business Applications Inc.
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MARKETING AND DISTRIBUTION AGREEMENT
This marketing and distribution agreement ("Marketing Agreement") is made as of
December ___, 1998 ("Effective Date") by and between PeopleSoft, Inc.
("PEOPLESOFT"), a Delaware corporation having its principal place of business at
4460 Hacienda Drive, Pleasanton, California 94588 and Momentum Business
Applications, Inc., ("MOMENTUM") a Delaware corporation having its principal
place of business at 1301 Harbor Bay Boulevard, Alameda
California 94502.
Whereas the parties have entered into a development and license agreement (the
"DEVELOPMENT AGREEMENT") pursuant to which PeopleSoft has licensed PeopleSoft
Technology to Momentum for the development by Momentum of certain products,
including electronic business applications, analytic applications and
industry-specific applications; and
Whereas, the parties desire to set forth the various marketing and support
requirements for the marketing and distribution of the Momentum Products by
PeopleSoft as set forth herein.
The parties agree as follows:
1. DEFINITIONS
"Development Costs" means the costs incurred by Momentum in developing any
Momentum Product.
"Developed Technology" shall have the meaning assigned to it in the Development
Agreement.
"Documentation" means only technical publications relating to the use of the
PeopleSoft Technology, such as reference, user, installation, training
curriculum, systems administrator and technical guides, delivered by PeopleSoft
to Momentum.
"End User" means any end customer using the Momentum Products.
"Enhancement Costs" means the fully burdened costs (including any costs incurred
for third party contractors hired by PeopleSoft) that PeopleSoft incurs
enhancements, fixes, updates or improvements which improve the functionality and
operations of a Licensed Product.
"Excluded Parties" means those entities that, at the end of the License Option
Term, PeopleSoft reasonably believes are competitors of PeopleSoft. PeopleSoft
shall provide a list of Excluded Parties to Momentum at such time.
"First-Line Support" means only the routing of Momentum Products technical
support telephone inquiries to the Second-Line Support organization. First-Line
Support includes responsibility for handling all PeopleTools technical support
inquiries received from End Users.
"Generally Available Product" means a Momentum Product, which has successfully
completed PeopleSoft release testing (in accordance with PeopleSoft's then
current PeopleSoft release model) with the level of functionality specified in
such product's work plan and which becomes commercially available for production
use.
"License Option" means PeopleSoft's right to acquire an exclusive license for
the commercialization of a Momentum Product pursuant to the section entitled
"License Option" hereof.
"License Option Term" means the period from which a work plan for a product is
approved by Momentum pursuant to the Development Agreement until the end of the
earlier of (i) the thirtieth (30th) day after such Momentum Product becomes a
Generally Available Product or (ii) the expiration of the Purchase Option.
"Licensed Product" means a Momentum Product for which PeopleSoft has exercised
its License Option.
"Momentum Products" shall have the meaning assigned to it in the Development
Agreement.
"Net Revenues" means the actual amount of license fees received by PeopleSoft,
either from an End User or from a third party, for an End User's use of a
Momentum Product or Licensed Product and any Upgrades and Updates
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thereto, net of sales, technology withholding or VAT taxes, imputed fees for
Support Services (such as bundled maintenance), consulting, Enhancement Costs
(if applicable) and any third party PeopleSoft Technology royalties.
"PeopleSoft Technology" shall have the meaning assigned to it in the Development
Agreement.
"PeopleTools" means all or any portion of the underlying technology in object or
source code form, tools and documentation delivered by PeopleSoft to Momentum
under the Development Agreement, and any related extensions or future
enhancements, which serve as the foundation for all PeopleSoft software
products.
"Pre-Release License" means the license granted by Momentum to PeopleSoft in the
section entitled Pre-Release Marketing and Distribution License/
Responsibilities.
"Pre-Release Royalty" means the royalties payable by PeopleSoft as set forth in
Exhibit A (section 2) for any Momentum Product commercialized by PeopleSoft
prior to the exercise of the License Option.
"Pre-Release Term" means the period from which a work plan for a product is
approved by Momentum pursuant to the Development Agreement until the earlier of
(1) PeopleSoft's exercise of the License Option, or (2) the end of the License
Option Term.
"Pricing Addendum" means the separately executed addendum to this Marketing
Agreement which states the commercial terms of this Agreement. The Pricing
Addendum is attached as Exhibit A and is hereby incorporated herein as part of
this Marketing Agreement.
"Product Payments" means the royalties payable by PeopleSoft as set forth in
Exhibit A (section 3(a)) for any Licensed Product.
"Purchase Option" means PeopleSoft's option to acquire all (but not less than
all) of the outstanding Class A Common Stock of Momentum as set forth in
Momentum's Restated Certificate of Incorporation.
"Second-Line Support" means the general level of Support Services without
First-Line Support obligations.
"Support Services" means PeopleSoft's then current technical support and
maintenance services for the PeopleSoft Technology. Support Services for general
customers as of the Effective Date are as set forth in Exhibit B attached
hereto.
"Term" shall mean the exercise or expiration of the Purchase Option.
"Upgrade" means the right to use the Momentum Products on a designated computer
with increased processing power or an increase in the number of users to the
next pricing increment and generally in each case a requirement for a payment of
applicable Upgrade fees to PeopleSoft.
"Updates" means one (1) copy of all published revisions and corrections to the
printed documentation and one (1) copy of corrections and new releases of the
Momentum Products.
2. PRE-RELEASE MARKETING AND DISTRIBUTION LICENSE/RESPONSIBILITIES
2.1 For the Pre-Release Term, Momentum grants to PeopleSoft the exclusive
license to market and distribute pre-release versions of the Momentum
Products to any End Users through its then current worldwide channel
distribution system under the PeopleSoft name or otherwise pursuant to
PeopleSoft's then current general licensing policies and methodologies.
PeopleSoft shall use commercially reasonable efforts to promptly market
and distribute such pre-release versions of Momentum Products to select
customers in accordance with its standard practices. Any customers
licensed by PeopleSoft during the Pre-Release Term must be reasonably
acceptable to Momentum.
2.2 PeopleSoft shall have the right to use a reasonable number of copies of
the Momentum Products, at no royalty to Momentum, for training,
marketing, sales and support purposes.
2.3 PeopleSoft shall have complete responsibility, at its expense, for all
marketing, pre-sales and sales activities associated with the Momentum
Products.
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2.4 PeopleSoft shall establish all then-current commercially reasonable
local country suggested list prices for the Momentum Products and
associated services.
3. ROYALTIES/PAYMENTS FOR PRE-RELEASE TERM
3.1 For each pre-release copy of Momentum Products licensed by PeopleSoft to
an End User, PeopleSoft shall pay Momentum a royalty (the "Pre-Release
Royalty") as set forth in the Pricing Addendum. PeopleSoft may license a
reasonable number of royalty-free copies of the Momentum Products for
End User evaluation purposes.
3.2 PeopleSoft shall pay to Momentum all royalties and fees due to Momentum
under this Marketing Agreement within thirty (30) days of the end of the
calendar quarter in which the Net Revenues are recorded by PeopleSoft.
4. SUPPORT SERVICES FOR PRE-RELEASE TERM
4.1 Momentum and PeopleSoft shall work together to provide joint post-sales
support to End Users.
4.2 PeopleSoft shall provide all support for PeopleTools to End Users,
commensurate with PeopleSoft's then current standard Support Services
terms and conditions. A copy of the Support Services terms and
conditions as of the Effective Date is included as Exhibit B.
4.3 PeopleSoft shall provide the End User with First-Line Support and
Second-Line Support for the Momentum Products and shall retain all
associated support revenues. PeopleSoft's responsibility to provide
Updates and enhancements to End Users is limited only to the
distribution of any releases, Updates and enhancements provided to
PeopleSoft by Momentum, as well as the distribution to End Users of any
new releases, Updates or enhancements of PeopleTools.
5. SUPPORT SERVICES FEES FOR PRE-RELEASE TERM
5.1 As of the Effective Date, PeopleSoft incorporates the first year of
Support Services fees into the license fee. Currently, Support Services
fees are listed at eighteen percent (18%) of the software license fee.
5.2 PeopleSoft shall retain all revenues from such Support Services as set
forth in Exhibit A.
6. LICENSE OPTION
6.1 Momentum hereby grants to PeopleSoft a License Option to acquire a
license to exclusively commercialize each Momentum Product . This
License Option shall be exercisable on a worldwide basis at any time
during the License Option Term. Upon exercise of the License Option,
PeopleSoft shall obtain a perpetual, exclusive license (with the right
to sublicense through multiple tiers of sublicense) to develop, make,
have made, use, support, market, enhance and distribute the Licensed
Product subject to the obligation to make Product Payments as set forth
in Exhibit A (section 3 (a)) hereto. PeopleSoft shall also have the
right to buyout the Product Payments as set forth in Exhibit A (Section
3 (b)).
6.2 Upon exercise of the License Option with respect to a Momentum Product,
sections 2, 3, 4 and 5 above shall no longer apply with respect to such
Momentum Product and PeopleSoft shall assume sole and full
responsibility for any product development, support, training,
consulting, bug fixes, modifications and enhancements with respect to
the Licensed Product.
6.3 At the end of the License Option Term for a Momentum Product, if
PeopleSoft has not exercised its License Option with respect to said
Momentum Product, (1) PeopleSoft shall grant to Momentum a perpetual,
nonexclusive license to market, distribute and sublicense the PeopleSoft
Technology, only to the extent incorporated into such Momentum Product,
to all third parties that are not then Excluded Parties, subject to the
terms and conditions of PeopleSoft's then-standard end user license
agreement. The royalty rate payable by Momentum to PeopleSoft for such
distribution shall be substantially similar to PeopleSoft's then current
royalty rates which PeopleSoft receives from third parties marketing
PeopleSoft Technology; and (2) Momentum shall grant to PeopleSoft a
perpetual, royalty-free, non-exclusive license to (a) license
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the then most recent version of such Momentum Product, and any new
releases, Updates or enhancements thereto, to any End Users granted
licenses by PeopleSoft pursuant to the Pre-Release License, and (b) use
a reasonable number of copies of Momentum Products and any new releases,
Updates or enhancements thereto, for internal use, training and support
purposes.
7. DISTRIBUTION LIMITATION
Regardless of whether PeopleSoft exercises the License Option,
PeopleSoft warrants that it will not, without the prior written consent,
if required, of the U.S. Department of Commerce, export directly or
indirectly Momentum Products to any prohibited country specified in then
current U.S. Department of Commerce Export Administration Regulations.
With regard to the license grant in section 6.3(2) above, Momentum
warrants that it will not, without the prior written consent, if
required, of the U.S. Department of Commerce, export directly or
indirectly PeopleSoft Technology incorporated into Momentum Products to
any prohibited country specified in then current U.S. Department of
Commerce Export Administration Regulations.
8. LICENSE TO USE MOMENTUM TRADEMARKS AND TRADENAMES
Regardless of whether PeopleSoft exercises the License Option, Momentum
provides to PeopleSoft a royalty-free license to use Momentum's
tradenames and trademarks which relate to the Momentum Products in
connection with PeopleSoft's distribution of the Momentum Products or
marketing materials associated with this Marketing Agreement, provided
PeopleSoft clearly identifies Momentum's ownership of such names or
marks.
9. TERM
9.1 This Marketing Agreement shall expire at the Term.
9.2 This Marketing Agreement shall automatically terminate in the event
PeopleSoft acquires all ownership interest to Momentum.
10. RECORDS AND REPORTS/PAYMENTS
10.1 PeopleSoft shall keep full, true and accurate records and accounts in
accordance with generally accepted accounting practices to show the
amount of fees payable to Momentum. These records and accounts shall
include for each copy of Momentum Products distributed:
a. the name and address of the End User;
b. the date of shipment and receipt of payments from End Users;
c. the computation of the net licenses fee; and
d. a copy of each signed end user license agreement.
10.2 PeopleSoft shall keep these records at PeopleSoft's principal place of
business. Momentum shall have the right to conduct an audit of such
records once per calendar year upon the giving of at least five (5)
business days prior written notice to PeopleSoft to determine
PeopleSoft's compliance with this Marketing Agreement. Momentum shall
bear the expenses of the audit, however, in the event any such audit
reveals that PeopleSoft has understated the amount of fees that
PeopleSoft is obligated to pay Momentum under this Marketing Agreement
by more than five percent (5%), PeopleSoft shall pay, in addition to any
fees contractually due, all reasonable costs and fees associated with
the audit.
10.3 Thirty (30) days after the end of each calendar quarter, PeopleSoft
shall develop, implement and provide Momentum with a quarterly royalty
report in accordance with its standard reporting practices that is
structured as a summary report with availability to detailed backup
information. The expectation is that key information concerning the
Momentum Products module(s) licensed, customer name, ship date,
quantity, standard list price, actual fee received, reductions for
bundled services, Net License Fee and actual royalty rate will be
provided in the quarterly report provided to Momentum.
10.4 All payments shall be made in U.S. dollars.
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11. TITLE AND PROTECTION/NON DISCLOSURE
11.1 All right, title and interest to the Momentum Products shall vest in
Momentum, subject to PeopleSoft's underlying right, title and interest
in and to the PeopleSoft Technology.
11.2 PeopleSoft shall affix, to any media containing a copy of all or any
portion of the Momentum Products and to each whole or partial copy of
documentation, all copyright, proprietary information notices and
restricted rights legends as were affixed to the original media or
documents. All Momentum Products Distributed to the federal government
shall contain the correct "Restricted Rights" legend as defined in DFAR
52.227-7013 (c) (1) (ii) or pertinent subsequent citation.
11.3 Title to the physical media for the Momentum Products vests in
PeopleSoft upon delivery. The Momentum Products contains valuable
proprietary information, and other than as set forth herein, PeopleSoft
shall not disclose any such information to anyone other than those of
its employees or consultants under nondisclosure obligations who have a
need to know for purposes consistent with this Marketing Agreement.
PeopleSoft shall affix, to each full or partial copy of Momentum
Products made by PeopleSoft, all copyright and proprietary information
notices as affixed to the original.
11.4 All information (1) clearly marked "confidential" by either party under
this Marketing Agreement and provided to the other party, or (2) which
should reasonably be understood to be confidential in nature by the
receiving party, shall be treated as confidential and shall not be
disclosed, orally or in writing by the receiving party to any third
party without the prior written consent of the disclosing party.
12. LIMITED WARRANTY
12.1 Momentum represents that each of the Momentum Products does not infringe
any patent, copyright or other third party intellectual property rights
when used in accordance with the published specifications for such
Momentum Product. Momentum represents that each of the Momentum Products
and all subsequent major releases thereon will perform substantially in
accordance with the corresponding documentation for such Momentum
Product for a period of one (1) year from the date of installation.
Momentum does not represent that any of the Momentum Products is
error-free. In the event that any of the Momentum Products does not
perform substantially in accordance with the published specifications
for such Momentum Product, Momentum's sole obligation is limited to
repair or replacement of such defective Momentum Product in accordance
with its then current support services terms and conditions, provided
PeopleSoft notifies Momentum of the deficiency within the one-year
period and provided PeopleSoft has installed all Momentum Products
updates provided by Momentum's support services.
12.2 MOMENTUM DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
12.3 PeopleSoft represents that the PeopleSoft Technology does not infringe
any patent, copyright or other third party intellectual property rights
when used in accordance with the published specifications. PeopleSoft
represents that the PeopleSoft Technology and all subsequent major
releases thereon will perform substantially in accordance with the
corresponding documentation for a period of one (1) year from the date
of installation at Momentum. PeopleSoft does not represent that the
PeopleSoft Technology is error-free. In the event the PeopleSoft
Technology does not perform substantially in accordance with the
published specifications, PeopleSoft's sole obligation is limited to
repair or replacement of the defective PeopleSoft Technology in
accordance with its then current Support Services terms and conditions,
provided Momentum notifies PeopleSoft of the deficiency within the
one-year period and provided Momentum has installed all PeopleSoft
Technology updates provided by PeopleSoft's Support Services.
12.4 PEOPLESOFT DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
13. DISCLAIMER OF CONSEQUENTIAL DAMAGES/LIMITATION OF LIABILITY
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13.1 NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL,
SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST
DATA OR LOST PROFITS, HOWEVER ARISING, EVEN IF IT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
13.2 EXCLUDING DAMAGES INCURRED UNDER THE ARTICLE ENTITLED "INDEMNIFICATION",
EACH PARTY'S liability for damages under this MARKETING Agreement shall
in no event exceed the AMOUNT OF ROYALTIES THAT PEOPLESOFT HAS PAID TO
MOMENTUM IN THE PRECEDING TWELVE (12) MONTHS. the parties agree to the
allocation OF LIABILITY RISK WHICH IS SET FORTH IN THIS SECTION.
14. INDEMNIFICATION
14.1 Momentum shall indemnify and defend PeopleSoft against any claims that
the components of the Momentum Products (excluding PeopleSoft
Technology) infringes any patent, copyright or trade secret; provided
that Momentum is given prompt notice of such claim and is given
information, reasonable assistance, and authority to defend or settle
the claim. In the defense or settlement of the claim, Momentum may
obtain for PeopleSoft the right to continue using and marketing the
Momentum Products or replace or modify Momentum Products so that it
becomes noninfringing while giving substantially equivalent performance.
Momentum shall have no liability if the alleged infringement is based
on: (i) a modification of Momentum Products by anyone other than
Momentum or its subcontractors, if any; or (ii) the use of the Momentum
Products other than in accordance with the documentation provided by
Momentum.
14.2 PeopleSoft shall indemnify and defend Momentum against any claims that
the PeopleSoft Technology infringes any patent, copyright or trade
secret; provided that PeopleSoft is given prompt notice of such claim
and is given information, reasonable assistance, and authority to defend
or settle the claim. In the defense or settlement of the claim,
PeopleSoft may obtain for Momentum the right to continue using the
PeopleSoft Technology or replace or modify PeopleSoft Technology so that
it becomes noninfringing while giving substantially equivalent
performance. PeopleSoft shall have no liability if the alleged
infringement is based on: (i) a modification of PeopleSoft Technology by
anyone other than PeopleSoft; or (ii) the use of PeopleSoft Technology
other than in accordance with the Documentation.
15. DEFAULT
15.1 It shall be an event of default if either party (1) fails to perform any
of its material obligations (including any payment obligations) under
this Marketing Agreement or otherwise materially breaches this Marketing
Agreement and such material breach remains uncured for more than thirty
(30) days after receipt of written notice specifying the material breach
thereof, or (2) enters into any proceeding, voluntary or involuntary, in
bankruptcy, reorganization or similar arrangement for the benefit of its
creditors.
15.2 If an event of default occurs, the nondefaulting party in addition to
any other rights available to it under law or equity, may terminate this
Marketing Agreement by written notice to the defaulting party. In the
event this Marketing Agreement is terminated by PeopleSoft in connection
with Momentum's breach of a material obligation under this Marketing
Agreement, PeopleSoft shall be entitled to receive, as liquidated
damages, the Available Funds. If PeopleSoft reasonably believes that
such liquidated damages are inadequate, then PeopleSoft will be entitled
to specific performance of Momentum's obligations under this Marketing
Agreement in connection with such breach. Remedies shall be cumulative
and there shall be no obligation to exercise a particular remedy.
16. TERMINATION
16.1 Any licenses granted pursuant to Sections 6.1, 6.3 and 8 and any
sublicenses granted pursuant to Section 2.1 shall survive the
termination of this Agreement.
16.2 Within thirty (30) days of termination, PeopleSoft shall pay Momentum
all sums due under this Marketing Agreement.
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16.3 Prior to termination, the parties shall meet, discuss and agree on a
transition plan to address technical support plans for existing End
Users and then-current commercially reasonable payments from Momentum to
PeopleSoft for continuing PeopleTools Support Services from PeopleSoft
directly to Momentum.
16.4 In addition to this section, the sections entitled "Distribution
Limitation," "Royalties/Payments," "Records and Reports/Payments,"
"Title and Protection/Non-disclosure," "Limited Warranty," "Disclaimer
of Consequential Damages/Limitation of Liability," and
"Indemnification," shall survive termination of this Marketing
Agreement.
17. NOTICES
All notices shall be in writing and hand-delivered or sent by first
class mail, overnight mail, courier, or transmitted by facsimile (if
confirmed by such mailing), to the addresses indicated on the first page
of this Agreement, or such other address as either party may indicate by
at least ten (10) days prior written notice to the other party. Notices
to PeopleSoft shall be addressed to the Office of the General Counsel,
Corporate Legal Department.
18. GENERAL
18.1 This Marketing Agreement is made in and shall be governed by the laws of
the State of California, excluding choice of law principles. Any actions
brought to enforce any of the provisions of this Marketing Agreement
shall be fully and finally resolved by binding arbitration under the
rules of the American Arbitration Association conducted by a mutually
acceptable independent third party in San Francisco, California. Except
for actions for breach of PeopleSoft's proprietary rights in PeopleSoft
Technology, or Momentum's proprietary rights in the Momentum Products or
Developed Technology, no action regardless of form, arising out of this
Marketing Agreement may be brought by either party more than one year
after the cause of action has accrued.
18.2 The section headings herein are provided for convenience only and have
no substantive effect on the construction of this Marketing Agreement.
If any provision of this Marketing Agreement is held to be
unenforceable, this Marketing Agreement shall be construed without such
provision.
18.3 The failure by a party to exercise any right hereunder shall not operate
as a waiver of such party's right to exercise such right or any other
right in the future. Neither party shall be liable to the other for any
failure to perform due to causes beyond its reasonably foreseeable
control.
18.4 Neither party shall assign this Marketing Agreement, delegate any duty
or assign any right hereunder without the prior written consent of the
other (such consent not to be unreasonably withheld) and any such
attempted assignment or delegation shall be void.
18.5 No agency, partnership or employment is created by this Marketing
Agreement. Momentum shall not use the name of PeopleSoft in any
advertising, public relations or media release without the prior written
consent of PeopleSoft.
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18.6 This Marketing Agreement replaces and supersedes any prior verbal
understandings, written communications, and constitutes the entire
agreement between the parties concerning the subject matter hereof. This
Marketing Agreement may be amended only by a written document executed
by a duly authorized representative of each of the parties. This
Marketing Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Marketing Agreement as of the
Effective Date.
MOMENTUM BUSINESS APPLICATIONS, INC. PEOPLESOFT, INC.
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Authorized Signature Authorized Signature
----------------------------------- --------------------------------
Printed Name and Title Printed Name and Title
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EXHIBIT A
PRICING ADDENDUM
TO
MARKETING AND DISTRIBUTION AGREEMENT
This pricing addendum ("Pricing Addendum") is part of the Marketing and
Distribution Agreement ("Marketing Agreement") between PeopleSoft and Momentum.
1. DEFINITIONS
Unless otherwise defined herein, capitalized terms used in this Pricing Addendum
shall have the same meaning as those referenced in the Marketing Agreement.
2. PRE-RELEASE ROYALTY
THE FOLLOWING SECTION SHALL APPLY ONLY TO MOMENTUM PRODUCTS COMMERCIALIZED BY
PEOPLESOFT PRIOR TO ITS EXERCISE OF THE LICENSE OPTION.
PeopleSoft shall establish competitive list prices for the Momentum Products in
accordance with then-current market conditions.
For each Momentum Product commercialized by PeopleSoft or its channel partners
for use by End Users, prior to the exercise or the License Option with respect
to such Momentum Product, PeopleSoft shall pay Momentum SIX PERCENT (6%) of Net
Revenues.
If PeopleSoft products and Momentum Products are licensed under the same license
agreement as a packaged solution for use by an End User, the Net Revenues
payable to Momentum will be appropriately pro-rated based on the associated
weight of each component's respective list price.
3. PRODUCT PAYMENTS AND PRODUCT PAYMENTS BUYOUT OPTION
THE FOLLOWING SECTION SHALL APPLY ONLY TO MOMENTUM PRODUCTS COMMERCIALIZED BY
PEOPLESOFT SUBSEQUENT TO ITS EXERCISE OF THE LICENSE OPTION.
(a) Product Payments.
PeopleSoft will make Product Payments to Momentum with respect to each Licensed
Product equal to the sum of (i) 1% of Net Revenues plus (ii) an additional 0.1%
of such Net Revenues for each $1 million of Development Costs with respect to
such Licensed Product; provided, however, that the royalty rate shall not exceed
six percent (6%) of Net Revenues. Subject to PeopleSoft's product payment
buy-out option described in section 3(b) below, Product Payments will be payable
until 10 years after General Availability of the Licensed Product.
The parties agree that if PeopleSoft chooses to have a third party
distribute a Licensed Product, the parties will negotiate an appropriate
increase in the royalty rate paid by PeopleSoft.
(b) Product Payments Buyout Option
PeopleSoft will have the right to buy-out Momentum's right to receive Product
Payments for any Licensed Product. The buy-out option may be exercised for any
Licensed Product at any time beginning twelve months after the Licensed Product
is declared a Generally Available Product. The buy-out price will be 15 times
the payment made by or due from PeopleSoft to Momentum with respect to sales of
such Licensed Product for the four quarters immediately preceding the quarter in
which the buy-out option is exercised or, in the event that such Licensed
Product has not been a License Product for all of each of such four quarters,
the buy-out price will be 15 times the annualized payment for such Licensed
Product.
4. SUPPORT SERVICES FEES
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As of the Effective Date, the parties' expectation is that as PeopleSoft
collects Support Services revenue from its End Users, (either on a stand-alone
basis or as part of the license fee revenue) and PeopleSoft retains all such
revenues.
5. PRECEDENCE AND AMENDMENT
In the event of conflict, this Pricing Addendum shall take precedence over the
Marketing Agreement. This Pricing Addendum and the Marketing Agreement and
associated Exhibits are the entire agreement between the parties concerning the
subject matter herein and may only be modified by a written amendment executed
by the parties authorized signatories. This Pricing Addendum is effective as of
the Effective Date.
MOMENTUM BUSINESS APPLICATIONS, INC. PEOPLESOFT, INC.
------------------------------------ --------------------------------
Authorized Signature Authorized Signature
----------------------------------- --------------------------------
Printed Name and Title Printed Name and Title
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EXHIBIT B
SOFTWARE SUPPORT SERVICES TERMS AND CONDITIONS
Software Support Services Terms and Conditions ("SUPPORT SERVICES") are
referenced in and incorporated into the Software License and Services Agreement
("Agreement") between PeopleSoft and Licensee. Capitalized terms have the same
meaning as they do in the Agreement.
1. COVERAGE
PeopleSoft provides Licensee with Support Services for the Software at the Site
in exchange for payment of the applicable Support Services fees. Only designated
Licensee employees may contact PeopleSoft for the provision of Support Services.
Licensee may acquire Support Services for additional Licensee sites by paying
PeopleSoft the applicable annual secondary site Support Services fee.
2. SOFTWARE MAINTENANCE
PeopleSoft will periodically issue the following technical and functional
improvements to Software:
(1) Fixes to Errors; (2) Updates; and (3) Enhancements
3. PRIORITY LEVEL OF ERRORS
PeopleSoft shall address Errors in accordance with the following protocols:
Priority 1-Critical Level: PeopleSoft promptly: (1) designates
PeopleSoft specialist(s) to correct Error; (2) provides expanded
communication on correction status; and (3) escalates troubleshooting a
Workaround or Fix.
Priority 2-Urgent Level: PeopleSoft promptly: (1) designates PeopleSoft
specialist(s) to correct Error; (2) provides ongoing communication on
correction status; and (3) initiates troubleshooting a Workaround or
Fix.
Priority 3-Standard Level: PeopleSoft: (1) assigns PeopleSoft specialist(s) to
commence correction of Error; and (2) exercises all commercially
reasonable efforts to include the Fix for Error in the next Update.
Priority 4-Base Level: PeopleSoft: (1) assigns Error to case management
and tracking; and (2) may include the Fix for Error in the next Update.
4. TELEPHONE SUPPORT
PeopleSoft provides telephone support concerning Software installation and use.
Except for designated holidays, standard telephone support hours are Monday
through Friday, 4:00 a.m. to 6:30 p.m., Pacific Time. Telephone Support is also
available 24-hours-a-day, 7-days-a-week for in-production customers who need to
resolve critical production problems outside of standard support hours.
5. ACCOUNT MANAGER
PeopleSoft assigns an account manager to assist with the support relationship
between PeopleSoft and Licensee. Licensee will reimburse PeopleSoft for the
reasonable travel and living expenses of the account manager for on-site support
activity.
6. PEOPLESOFT CUSTOMER CONNECTION
a. PeopleSoft Customer Connection is an on-line, self-service system that
features postings by PeopleSoft and customers regarding technical and
non-technical topics of interest. Licensee may access PeopleSoft Customer
Connection via Internet access at its own expense.
b. Software Updates, Enhancements, and Fixes may be delivered to Licensee
through PeopleSoft Customer Connection, or by mail from PeopleSoft on
Licensee's written request. PeopleSoft information posted to Customer
Connection is confidential and proprietary and shall only be used in
connection with Licensee's use of the Software and informational
communications with other PeopleSoft Customer Connection participants.
PeopleSoft shall have the right to publish, modify and distribute any
information or software provided by Licensee to Customer Connection in all
languages. Licensee shall not use PeopleSoft Customer Connection for
advertising or public relations purposes and shall only submit information
to PeopleSoft Customer Connection that Licensee owns or has permission to
use in such manner.
c. To diminish exposure to software viruses, PeopleSoft tests and scans all
information entered by PeopleSoft for software viruses prior to submitting
it to PeopleSoft Customer Connection. Licensee shall also use a reliable
virus detection system on any software or information posted to PeopleSoft
Customer Connection, utilize back-up procedures, monitor access to
PeopleSoft Customer Connection, promptly notify PeopleSoft of any virus
detected within Licensee's systems associated with PeopleSoft Customer
Connection and generally exercise a reasonable degree of caution when
utilizing information from PeopleSoft Customer Connection. PeopleSoft does
not warrant that PeopleSoft Customer Connection will operate without
interruption or without errors.
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PeopleSoft reserves the right to modify or suspend PeopleSoft Customer
Connection service in connection with PeopleSoft's provision of Support
Services. PeopleSoft assumes no responsibility for anything posted by anyone
other than PeopleSoft, including, but not limited to, information about
PeopleSoft software, modification code, or portions thereof.
7. FEES
The initial period of Support Services for the Site is indicated in the Schedule
and included in the Software license fee; thereafter, in the event Licensee
elects to continue to receive Support Services, Licensee shall pay PeopleSoft
the annual Support Services fee as set forth in the Schedule. Support Services
are billed on an annual basis, payable in advance. Unless Licensee has provided
proof of tax-exempt status, Licensee is responsible for all taxes associated
with Support Services, excluding taxes based on PeopleSoft's income. Licensee's
payment shall be due within thirty (30) days of receipt of the PeopleSoft
invoice. Should Licensee elect not to renew Support Services and subsequently
requests Support Services, PeopleSoft shall reinstate Support Services only
after Licensee pays PeopleSoft the annual then-current fee plus all cumulative
fees that would have been payable had Licensee not suspended Support Services.
8. TERM AND TERMINATION
Unless otherwise expressly set forth in the Agreement, Support Services shall be
provided for a period of one (1) year from the Schedule Effective Date, and
shall be extended each additional year unless terminated by either party. Each
one (1) year term shall commence on the anniversary of the Schedule Effective
Date.
Either party may terminate the Support Services provisions at the end of any
support term by giving the other party written notice at least ninety (90) days
prior to the end of the term.
If Licensee fails to make payment pursuant to the section titled "Fees", or
Licensee breaches the Support Services provisions and such breach has not been
cured within thirty (30) days of receipt of written notice of breach, PeopleSoft
may suspend or cancel Support Services.
9. EXCLUSIONS
PeopleSoft shall have no obligation to support:
a. Substantially altered, damaged or modified Software;
b. Software that is not the then-current release, or a Previous Sequential
Release;
c. Errors caused by Licensee's negligence, hardware malfunction, or other
causes beyond PeopleSoft's reasonable control;
d. Software installed in a hardware or operating environment not supported
by PeopleSoft; and
e. Third party software not licensed through PeopleSoft.
10. GENERAL
All Updates, Enhancements and Fixes provided to Licensee are subject to the
terms and conditions of the Agreement. PeopleSoft may modify Support Services on
an annual basis to reflect current market condition upon reasonable notice.
11. DEFINITIONS
"ENHANCEMENT" means a technical or functional addition to the Software delivered
with a new Software release to improve functionality and/or operations.
"ERROR" means a Software malfunction that degrades the use of the Software.
"FIX" means the repair or replacement of source, object or executable code
Software versions to remedy an Error.
"PREVIOUS SEQUENTIAL RELEASE" means a Software release for a particular
operating environment that has been replaced by a subsequent Software release in
the same operating environment. PeopleSoft will support a Previous Sequential
Release for a period of eighteen (18) months after release of the subsequent
release. Multiple Previous Sequential Releases may be supported at any given
time.
"PRIORITY 1" means an Error that renders the Software inoperative or causes the
Software to fail catastrophically.
"PRIORITY 2" means an Error that affects performance of the Software and
prohibits Licensee's use of the Software.
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"PRIORITY 3" means an Error that affects performance of the Software, but does
not prohibit Licensee's use of the Software.
"PRIORITY 4" means an Error that causes only a minor impact on the use of the
Software.
"UPDATE" means all published revisions to the Documentation and one (1) copy of
the new Software release not designated by PeopleSoft as new products or
functionality for which it charges separately.
"WORKAROUND" means a change in the procedures followed or data supplied to avoid
an Error without significantly impairing Software performance.
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