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EXHIBIT 10.32
SOFTWARE CONSULTING AGREEMENT dated
December 31, 1997 between Spatial
Technology Inc., a Delaware corporation
("STI") and Three-Space Limited, a
limited company organized under the laws
of England ("TSL").
WHEREAS, TSL is engaged in the business of designing, developing and
producing software;
WHEREAS, STI is engaged in the business of designing, developing and
producing software for geometric modeling for a variety of applications (the
"ACIS Software");
WHEREAS, STI and TSL are parties to that certain Development Agreement
dated June 26, 1987 pursuant to TSL developed software and technology for STI
and retained certain rights to such software and technology (the "Retained
Rights");
WHEREAS, STI and TSL are concurrently entering into a Technology
Purchase Agreement pursuant to which TSL is transferring all of its Retained
Rights to STI; and
WHEREAS, TSL has agreed to enter into this new development agreement
providing that STI is the sole owner of all software and technology developed by
TSL pursuant to the agreement.
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, STI and TSL agree as follows:
ARTICLE I
DEFINITIONS
As used herein:
1.1 ACIS SOFTWARE shall mean STI's proprietary 3D modeling engine and
software development tools, including proprietary husks and other components,
each in their most recent versions.
1.2 CODE shall mean the source code and the object code for the
Software and/or ACIS Software or any component thereof.
1.3 FORCE MAJEURE shall mean a strike, walk-out, other labor dispute,
act of God, failure of power, riot, insurrection, act of government or similar
event beyond the control of TSL, which prevents TSL from performing its
obligations under this Agreement or the disability or demise of Alan Grayer or
Ian Braid which prevents him from rendering services pursuant hereto.
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1.4 TERM shall mean the period commencing with the date of this
Agreement and continuing perpetually through until termination pursuant to
Section 7.1.
1.5 INTELLECTUAL PROPERTY RIGHTS shall mean all patents, trademarks,
service marks, trade names, copyrights, inventions, trade secrets, proprietary
processes and formulae, applications for patents, trademarks and copyrights, and
other industrial and intellectual property rights.
1.6 PAYMENTS shall have the meaning ascribed to such term in Section
3.1 hereof.
1.7 SOFTWARE shall have the meaning set forth in Section 2.1 hereof.
ARTICLE II
DEVELOPMENT OF SOFTWARE
2.1 ENGAGEMENT. STI hereby engages TSL to provide the services of Alan
Grayer and Ian Braid ("Design Services") for the design, development,
production, enhancement and debugging of geometric modeling software and
components (the "Software") as the Company may from time to time request. In
addition, TSL will make Charles Lang available for the testing of the Software
and to assist STI or its subsidiaries in marketing and distributing ACIS
Software and its related components. Representatives of STI and TSL shall
conduct periodic meetings (in person or by teleconference) to establish the
specifications of the Software to be developed and to establish goals,
objectives and budgets, as appropriate.
2.2 REQUIRED MAN-MONTHS. TSL shall provide an aggregate of 1.8
Man-Months of services per calendar month pursuant to this Agreement, at least
1.4 Man-Months of which shall be Design Services. The parties will negotiate in
good faith from time to time modification to the number of Man-Months to be
provided pursuant to this Agreement.
2.3 OWNERSHIP; LIMITED-USE LICENSE GRANT
(a) STI will own all right, title and interest to and in the
Software and documentation, including but not limited to all Intellectual
Property Rights therein. TSL shall, at any time and from time to time following
execution and delivery of this Agreement, upon the request of STI, execute,
acknowledge, and deliver, and cause to be executed, acknowledged, or delivered,
all such further acts, deeds, endorsements, assignments, transactions,
conveyances or assurances as may be required to confirm or effectuate the
foregoing.
(b) ENFORCEMENT OF RIGHTS. Without limiting the generality of the
foregoing, TSL shall assist STI in every proper way to obtain and from time to
time enforce the Intellectual Property Rights in any and all jurisdictions
reasonably requested by STI and to that end will execute all documents for use
in applying for and obtaining such Intellectual Property Rights and enforcing
such Intellectual Property Rights, as STI may reasonably deem appropriate. STI
shall reimburse TSL for all costs incurred by TSL at STI's request in connection
with the enforcement of its rights under Sections 2.3(a) and 2.3(b).
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(c) LICENSES FROM STI TO TSL.
(i) LIMITED LICENSE TO ACIS. During the term of this Agreement
and any extension hereof STI hereby grants to TSL, a non-exclusive,
royalty-free, worldwide, non-transferable license, without any right to
sub-license or distribute, to use and modify STI's ACIS Software for the sole
purpose of providing the Design Services described herein. This ACIS Software
license shall terminate upon termination of this Agreement.
(ii) LIMITED LICENSE TO DEVELOPED SOFTWARE. STI hereby grants
to TSL a perpetual, non-exclusive, royalty-free, worldwide, non-transferable
license, without any right to sub-license or distribute, to use and modify, for
non-commercial purposes only, the Code that was specifically and exclusively
developed by TSL pursuant to this Agreement or the Prior Development Agreement.
ARTICLE III
PAYMENTS
3.1 CONSULTING SERVICES.
(a) CONSULTING FEE. As consideration for the services hereunder,
STI shall pay to TSL, subject to the conditions hereinafter set forth,
10,625 British pounds per Man-Month of services for each month commencing with
January 1, 1998, no later than fifteen (15) days after the beginning of each
month.
(b) CPI ADJUSTMENT. On May 1, 1998 and each anniversary thereafter,
the consulting fee base rate of 10,625 (pound sterling) shall be amended as
follows:
(i) Base index for the United Kingdom, Retail Price Index as
of January 1997 shall be B(O).
(ii) Annual reference rate of the United Kingdom, Retail Price
Index for subsequent years using the January index for each year shall be B(T).
(iii) The rate of increase in the monthly consulting man rate
becomes:
B(T) = R
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B(O)
(iv) The new consulting man month rate = Base Rate
(10,625) X R
(v) However, for each year R shall not be less than zero
percent nor exceed 7.5% in any one year; provided that in the event the R is
greater than 7.5% per year, then the parties shall mutually agree on the rate of
increase.
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3.2 TRAVEL EXPENSES. STI shall reimburse the reasonable travel expenses
of TSL upon presentation of proper documentation in accordance with STI standard
reimbursement policies; provided that, STI shall not be required to reimburse
travel expenses in excess of $1,000 in the aggregate for any trip not approved
by STI in advance.
3.3 FORM, MANNER OF PAYMENT. Each Payment hereunder shall be made in
British Sterling, by delivery of a check payable to the order of TSL or wire
transfer of funds to an account designated by TSL prior to the date such payment
is due or reimbursement is made.
3.4 PURCHASE OF EQUIPMENT AND/OR SOFTWARE. Upon request by TSL, STI
shall purchase for use by TSL such equipment and/or software as STI, in its sole
and exclusive discretion, determines is necessary for the performance of the
services hereunder. Such equipment will remain the property of STI.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TSL
TSL hereby represents and warrants to STI as follows:
4.1 AUTHORITY. TSL is a limited company duly incorporated and validly
existing under the laws of England and has all requisite power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby.
4.2 NO CONFLICT. The performance by TSL of this Agreement, and the
employment by TSL of any person for purposes set forth herein, does not and will
not violate any agreement of TSL or the employees and other persons engaged by
TSL to provide services hereunder with any third party or infringe upon the
rights (including, but not limited to, any patent, copyright, trade secret or
other proprietary rights) of any other person.
4.3 RESOURCES. TSL possesses (or will possess) financial and
organizational capabilities and resources to perform its other obligations
hereunder and there exists no condition, fact or circumstance known to TSL which
could reasonably be expected to impair the ability of TSL to perform its
obligations hereunder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF STI
STI hereby represents and warrants to TSL as follows:
5.1 AUTHORITY. STI is a corporation duly incorporated and validly
existing under the laws of the State of Delaware and has all requisite power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby.
5.2 NO CONFLICT. The performance by STI of this Agreement does not and
will not violate any agreement of STI with any third party, or, to the best
knowledge of STI, infringe upon the rights of any other person.
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ARTICLE VI
ADDITIONAL COVENANTS OF TSL
6.1 ACCESS. During the term of this Agreement, including renewals
thereof, TSL will (i) afford to STI, its employees and authorized
representatives, at all reasonable times, reasonable access to, and the right to
inspect and copy, books, records, worksheets and other documentation relating to
the Software and reasonable access to all employees of TSL, and reasonable
access to the properties of TSL for all reasonable purposes (including, but not
limited to, verification of actual expenses, staffing and progress reports and
monitoring, reviewing and inspecting the progress of the development efforts);
(ii) cause each of its employees engaged in the development of the Software to
be available during reasonable business hours for telephones and in-person
conferences at the reasonable request of STI.
6.2 CONFIDENTIALITY. TSL agrees as follows:
(a) during the term of this Agreement, and at all times thereafter,
it shall, and shall take all such steps as may be reasonably necessary to ensure
that at all times all employees or consultants of TSL shall, safeguard and
strictly maintain the secrecy and confidentiality of and the proprietary rights
to the proprietary information of STI, including, but not limited to the
proprietary rights contained in the Software. This obligation shall survive the
expiration or termination of this Agreement under any and all circumstances.
(b) during the term of this agreement, and at all times thereafter,
it shall safeguard and strictly maintain the secrecy and confidentiality of the
Code and any other software or technology provided by STI or its vendors to TSL.
TSL shall take all such steps as may reasonably be necessary to ensure that all
employees or consultants of TSL shall safeguard and strictly maintain the
secrecy and confidentiality of the Code provided, however, that:
(i) without limiting the generality of the foregoing
Information referred to in clause (a) and (b) above (collectively, the
"Confidential Information") shall include, but not be limited to, the sequence
of developments specified by STI; and
(ii) nothing in this Section 6.2 shall be construed to restrict
the disclosure of information which (aa) is publicly known through no fault of
such party, (bb) is lawfully received by a party from a third party not bound in
a confidential relationship to STI, or (cc) is required by law to be disclosed
by such party.
The obligations of confidentiality of TSL set forth in this
Section 6.2 shall survive the expiration or termination of this Agreement under
any and all circumstances.
6.3 NON-COMPETITION.
(a) COVENANT. During the Term TSL will not, and will use its best
efforts to ensure that no employee or consultant of TSL will, sell, license or
market any software product with geometric modeling applications, any software
which is substantially similar in functionality to, or which is substantially a
subset of or superset containing, the Software or the ACIS Software, or (ii)
documentation for such software.
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(b) ENFORCEMENT. The provisions set forth in this Section 6.3 are
considered by the parties hereto to be reasonable for the purpose of protecting
the business of STI. However, if such restrictions are found by any court having
jurisdiction to be unreasonable because they are too broad, then such
restrictions shall nevertheless remain effective, but shall be considered
amended as to such protected business, time or area (or any one of them, as the
case may be) as may be considered reasonable by such court, and as so amended
shall be enforced.
6.4 AGREEMENTS FOR EMPLOYEES. Each person performing services hereunder
shall execute a competition, proprietary rights and assignment of inventions
agreement with TSL incorporating the terms relating to non-competition,
confidentiality, proprietary rights and ownership provided in this Agreement, in
form reasonably satisfactory to STI. TSL further agrees that, during the term of
this Agreement, including any renewals thereof, it shall at no time approach or
solicit any of the employees of STI to attempt to induce any such employee to
terminate his employment with STI and begin employment by TSL or any affiliate
of TSL.
STI agrees that, during the term of this Agreement, including any
renewals thereof, it shall at no time approach or solicit any of the employees
of TSL to attempt to induce any such employee to terminate his employment with
TSL and begin employment by STI or any affiliate of STI.
6.5 DELIVERY OF DOCUMENTATION UPON EXPIRATION OF AGREEMENT. In the
event of the expiration or termination of this Agreement for any reason, TSL
will deliver to STI copies of all documents, notes, drawings, specifications,
computer programs, data and other materials of any nature pertaining to the Code
or any confidential information of STI.
6.6 INDEMNIFICATION OF STI FOR INFRINGEMENT OF INTELLECTUAL PROPERTY
RIGHTS OF THIRD PARTIES.
(a) INDEMNIFICATION. TSL agrees to hold STI harmless from and
against any claim or liability for infringement of any Intellectual Property
Rights of any third party whatsoever associated with the use of those components
of the Software developed by TSL under the terms of this Agreement or of any
product embodying or derived from those components of the Software developed by
TSL under the terms of this Agreement except to the extent that such liability
arises as a direct result of infringement by STI of the rights of third parties
in connection with the development by STI of components of the Software or ACIS
Software. In the event of any action, suit, proceeding or claim relating to the
foregoing, TSL shall give STI prompt written notice thereof, and TSL shall have
the right and option to control the defense thereof; provided however, that TSL
shall not agree to the terms of any settlement of any such action, suit,
proceeding or claim without the prior written consent of STI which consent will
not be unreasonably withheld.
(b) LIMITATION OF LIABILITY.
(i) TSL does not warrant that the Software is suitable for the
purposes of any third party utilizing the Software and STI hereby covenants to
indemnify TSL against all or any claim, loss, damages or costs made against or
incurred by TSL in connection with any
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claim by any third party arising from the use or sale of any product or
equipment incorporating the Software, save to the extent that such claim arises
from the gross negligence of TSL or by reason of any material breach by TSL of
the warranty contained in Section 4.1 or 4.2.
(ii) Save as expressly provided in this Agreement, TSL shall be
under no liability whatsoever to STI (including without prejudice to the
generality of the foregoing any liability in tort or for consequential damage or
loss of any kind) for any defect in failure of or unsuitability for any purpose
of the Software or any parts thereof and STI hereby accepts the rights conferred
on it by this Agreement in lieu of any other warranty, condition or liability
imposed by common law statute or otherwise relating to the quality or
performance of the Software, with respect to such third party claims; provided,
however, that nothing contained in this Agreement shall exclude or limit or
purport to exclude or limit the liability of TSL in respect of any death or
personal injury caused by the gross negligence of TSL.
ARTICLE VII
TERMINATION OF THE AGREEMENT
7.1 TERMINATION.
(a) BY STI. This Agreement may be terminated by STI, by written
notification from STI to TSL, in any of the following events:
(i) TSL materially breaches any of its obligations under this
Agreement and, if such breach is curable, TSL has not cured such breach within
thirty (30) days following written notice thereof by STI;
(ii) a condition of Force Majeure shall continue to exist for
a period in excess of 60 days;
(iii) an order, judgment or decree is entered adjudicating TSL
bankrupt or insolvent; or TSL shall commence any case, proceeding or other
action relating to it in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up, arrangement, composition or readjustment of its debts,
or for any other relief, under any bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement, composition, readjustment of debt or
other similar act or law of any Jurisdiction, domestic or foreign, now or
hereafter existing or TSL shall apply for a reorganization custodian or trustee
of it or for all or a significant part of its property (save in the case of a
solvent reorganization or reconstruction); or TSL shall make an assignment for
the benefit of creditors; or shall be unable to, or shall admit in writing the
inability to, pay its debts as they become due; or TSL shall take any action
indicating its consent to, approval of, o. acquiescence in, or in furtherance
of, any of the foregoing; or
(iv) any case, proceeding or other action against TSL shall be
commenced in bankruptcy or seeking reorganization, liquidation, dissolution,
winding-up, arrangement, composition or readjustment of its debts, or any other
relief, under any bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement, composition, readjustment of debt or other similar act
or law of any jurisdiction, domestic or foreign, now or hereafter existing; or a
receiver, custodian or trustee of TSL or for all or a substantial part of their
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respective properties shall be appointed; or a warrant of attachment, execution
or distraint, or similar process, shall be issued against any substantial part
of the property of TSL; and in each such case such condition shall continue for
a period of 60 days undismissed, undischarged or unbonded.
(v) The occurrence of any condition, event or act which, with
or without notice or lapse of time or both, could constitute a material breach
of the representations and warranties set forth in Article IV hereof or Ian
Braid, Charles Lang or Alan Grayer shall no longer remain employed by TSL
otherwise than by reason of their disability or demise and rendering services in
connection with the services being performed by TSL for STI hereunder.
(b) BY TSL. This Agreement may be terminated by TSL, by written
notification from TSL to STI, in any of the following events:
(i) STI materially breaches any of its obligations under
Article III of this Agreement and, if such breach is curable, STI has not cured
such breach within thirty (30) days following written notice thereof by TSL;
(ii) an order, judgment or decree is entered adjudicating STI
bankrupt or insolvent; or STI shall commence any case, proceeding or other
action relating to it in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up, arrangement, composition or readjustment of its debts,
or for any other relief, under any bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement, composition, readjustment of debt or
other similar act or law of any Jurisdiction, domestic or foreign, now or
hereafter existing (save in the case of a solvent reorganization or
reconstruction); or STI shall apply for a receiver, custodian or trustee of it
or for all or a substantial part of its property; or STI shall make an
assignment for the benefit of creditors; or STI shall be unable to, or shall
admit in writing the inability to, pay its debts as they become due; or STI
shall take any action indicating its consent to, approval of, or acquiescence
in, or in furtherance of, any of the foregoing; or
(iii) any case, proceeding or other action against STI shall be
commenced in bankruptcy or seeking reorganization, liquidation, dissolution,
winding-up, arrangement, composition or readjustment of its debts, or any other
relief, under any bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement, composition, readjustment of debt or other similar act
or law of any jurisdiction, domestic or foreign, now or hereafter existing; or a
receiver, custodian or trustee of TSL or for all or a substantial part of their
respective properties shall be appointed; or a warrant of attachment, execution
or distraint, or similar process, shall be issued against any substantial part
of the property of STI; and in each such case such condition shall continue for
a period of 60 days undismissed, undischarged or unbonded.
(iv) STI shall sell all or substantially all of its assets or
all right, title and interest to the ACIS Software to a third party, or STI
shall enter into a merger, consolidation or reorganization pursuant to which the
stockholders immediately before the transaction own less than 50% of the
outstanding common stock immediately following such transaction; provided that,
TSL shall provide STI with one year's advanced written notice prior to such
termination.
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(c) BY TSL OR STI. Either party may terminate this agreement for
convenience, with or without cause, by providing the other party advanced
written notice not less than two years prior to termination.
7.2 SUSPENSION. Notwithstanding anything in this Article VIII to the
contrary, in the event of a condition of Force Majeure, TSL may suspend the
development of the Software and STI may suspend any scheduled Payments, for any
period during which the condition of Force Majeure shall continue to exist. TSL
shall use its best efforts to reduce or eliminate the effects of such Force
Majeure. Immediately upon the termination of the condition of such Force
Majeure, the development of the Software shall recommence.
7.3 EFFECT OF TERMINATION. In the event of termination pursuant to
Section 7.1(a) or (b) or upon the expiry of notice under Section 7.1(c), the
development of the Software shall forthwith cease and terminate and, the
obligations of STI hereunder shall immediately cease and terminate; provided,
however, that STI shall continue to remain responsible for any accrued unpaid
Payments pursuant to Article III hereof, and that Sections 6.2, 6.3, 6.6 and
Article 8 hereof shall in any event survive such termination. All other
agreements and covenants of the parties hereto contained herein shall survive or
terminate (as the case may be) in accordance with their respective terms.
Termination pursuant to Section 7 hereof shall not prejudice the rights of the
parties in respect of a breach of this Agreement prior to such termination. The
rights and remedies of the parties hereto under this Agreement are cumulative
and not exclusive of any rights or remedies which such parties would otherwise
have.
ARTICLE VIII
MISCELLANEOUS
8.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
8.2 JURISDICTION. Each of TSL and STI hereby irrevocably submit to the
non-exclusive jurisdiction of the United States District Court for the Southern
District of New York and any court of the State of New York located in the City
of New York, in any action, suit or proceeding arising in connection with this
Agreement, and irrevocably waives any objection which it may now or hereafter
have to the laying of venue or to the jurisdiction of any such court in any such
action, suit or proceeding.
8.3 NO WAIVER. A failure of either party to require performance by the
other party of any obligation hereunder shall not affect its right to require
such performance thereafter. The waiver by either party of a breach by the other
party of any provision hereof shall not be construed as a waiver of any
succeeding breach of such provision or of the provision itself.
8.4 SUCCESSORS AND ASSIGNS. Subject to the provisions of this Section
8.4, this Agreement shall bind and inure to the benefit of TSL and STI, and the
successors of STI by reorganization, merger, consolidation or otherwise, and any
assignee of all or substantially all of the business and properties of STI.
Neither this Agreement nor any rights or benefits hereunder
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may be assigned by TSL without the prior written consent of STI (which consent
shall not be unreasonably withheld).
8.5 ENTIRE AGREEMENT. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous arrangements or understandings with
respect thereto, including, without limitation the Development Agreement dated
June 26, 1987 between TSL and STI and the letter agreement dated December 31,
1997.
8.6 NOTICES. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person, duly sent by first class mail, or
international courier service, postage prepaid, or transmittal by international
telecopy or fax transmission addressed to such party at the address set forth
below or such other address as may hereafter be designated in writing by the
addressee to the addressor listing all parties:
If to STI, to:
Spatial Technology Inc.
2425 55th Street, Suite 100
Boulder, Colorado 80301
Attention: President
Telecopy/Fax: 303-449-0926
If to TSL, to:
Three-Space Limited
70 Castle Street
Cambridge CB3 0AJ
England
Attention: Charles Lang
FAX: 011-44-1223-460268
All such notices, advices and communications shall be deemed to have been
received on the date of confirmation thereof by the addressee, or,
alternatively, (a) in the case of mailing, on the third business day following
the date of such mailing; (b) in the case of delivery by international courier
service, on the second business day following the date of delivery to such
service, and (d) in the case of telecopy/fax transmission, on the business day
next following such transmission.
8.7 CHANGES. The terms and provisions of this Agreement may not be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, except pursuant to the written consent of TSL and STI.
8.8 COUNTERPARTS. This Agreement may be executed any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
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8.9 HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.
8.10 NOUNS AND PRONOUNS. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and
vice-versa.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first
above written.
THREE-SPACE LIMITED
By: /s/ CHARLES LANG
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Name: Charles Lang
SPATIAL TECHNOLOGY INC.
By: /s/ RICHARD SOWAR
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Name: Richard Sowar, Chief Executive
Officer
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