\n1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
\n a. “Affiliate”. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
\n b. “Application Program Interfaces” . . . . . . . . . . . . . . . . . .2
\n c. “Authorized Shipping Outlet” . . . . . . . . . . . . . . . . . . . .2
\n d. “Business Day” . . . . . . . . . . . . . . . . . . . . . . . . . . .2
\n e. “Client Software”. . . . . . . . . . . . . . . . . . . . . . . . . .2
\n f. “Confidential Information” . . . . . . . . . . . . . . . . . . . . .3
\n g. “Critical Defect”. . . . . . . . . . . . . . . . . . . . . . . . . .3
\n h. “Custom Client Software” . . . . . . . . . . . . . . . . . . . . . .3
\n i. “Custom Server Software” . . . . . . . . . . . . . . . . . . . . . .3
\n j. “Custom Software”. . . . . . . . . . . . . . . . . . . . . . . . . .3
\n k. “Dedicated Support Personnel” or “DSP” . . . . . . . . . . . . . . .3
\n l. “Derivative Work”. . . . . . . . . . . . . . . . . . . . . . . . . .3
\n m. “Detailed Design Specifications” . . . . . . . . . . . . . . . . . .4
\n n. “Documentation”. . . . . . . . . . . . . . . . . . . . . . . . . . .4
\n o. “Enhancement”. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
\n p. “Functional Specifications”. . . . . . . . . . . . . . . . . . . . .5
\n q. “Major Defect” . . . . . . . . . . . . . . . . . . . . . . . . . . .5
\n r. “Messaging Service”. . . . . . . . . . . . . . . . . . . . . . . . .5
\n s. “Minor Defect” . . . . . . . . . . . . . . . . . . . . . . . . . . .5
\n t. “Person” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
\n u. “Phase I Software” . . . . . . . . . . . . . . . . . . . . . . . . .5
\n v. “Phase II Software”. . . . . . . . . . . . . . . . . . . . . . . . .5
\n w. “Project”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
\n x. “Server Software”. . . . . . . . . . . . . . . . . . . . . . . . . .5
\n y. “Services” . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
\n z. “Software” . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
\n aa. “Source Code”. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
\n bb. “Specifications” . . . . . . . . . . . . . . . . . . . . . . . . . .6
\n cc. “Standard Software”. . . . . . . . . . . . . . . . . . . . . . . . .6
\n dd. “Supported Datacenter” . . . . . . . . . . . . . . . . . . . . . . .6
\n ee. “Trade Secret” . . . . . . . . . . . . . . . . . . . . . . . . . . .6
\n ff. [ * ] . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
\n gg. “Tumbleweed Marks” . . . . . . . . . . . . . . . . . . . . . . . . .7
\n hh. “UPS Information”. . . . . . . . . . . . . . . . . . . . . . . . . .7
\n ii. “UPS Inventions” . . . . . . . . . . . . . . . . . . . . . . . . . .7
\n jj. “Use”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7<\/p>\n—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
i<\/p>\n
2. Software Development. . . . . . . . . . . . . . . . . . . . . . . . . . .8
\n a. Initial Phases . . . . . . . . . . . . . . . . . . . . . . . . . . .8
\n b. Subsequent Phases. . . . . . . . . . . . . . . . . . . . . . . . . .8
\n c. Functional Specifications for Subsequent Phases. . . . . . . . . . .8
\n d. Detailed Design Specifications . . . . . . . . . . . . . . . . . . .9
\n e. Acceptance of Specifications . . . . . . . . . . . . . . . . . . . .9
\n f. Programming and Tumbleweed Testing . . . . . . . . . . . . . . . . .9
\n g. On-Site Installation Support . . . . . . . . . . . . . . . . . . . .9
\n h. Designation of Project Coordinators. . . . . . . . . . . . . . . . .9
\n i. Progress Reports . . . . . . . . . . . . . . . . . . . . . . . . . 10
\n j. Extensions of Time . . . . . . . . . . . . . . . . . . . . . . . . 10
\n k. Termination of Development Services. . . . . . . . . . . . . . . . 12<\/p>\n
3. Modifications to Specifications . . . . . . . . . . . . . . . . . . . . 13
\n a. Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
\n b. Accepted Changes . . . . . . . . . . . . . . . . . . . . . . . . . 13<\/p>\n
4. Implementation and Acceptance . . . . . . . . . . . . . . . . . . . . . 13
\n a. Implementation Schedule. . . . . . . . . . . . . . . . . . . . . . 13
\n b. Acceptance Testing . . . . . . . . . . . . . . . . . . . . . . . . 13
\n c. Interim Testing. . . . . . . . . . . . . . . . . . . . . . . . . . 15<\/p>\n
5. Licenses and Proprietary Rights . . . . . . . . . . . . . . . . . . . . 15
\n a. Server Software. . . . . . . . . . . . . . . . . . . . . . . . . . 15
\n b. Client Software. . . . . . . . . . . . . . . . . . . . . . . . . . 16
\n c. Ownership of Custom Software . . . . . . . . . . . . . . . . . . . 17
\n i. UPS Inventions. . . . . . . . . . . . . . . . . . . . . . . 17
\n ii. UPS Information . . . . . . . . . . . . . . . . . . . . . . 17
\n d. Ownership of Customer Data . . . . . . . . . . . . . . . . . . . . 18
\n e. Tumbleweed Trademarks and Trade Names. . . . . . . . . . . . . . . 18
\n f. Developer Kits (and Localization Kits) . . . . . . . . . . . . . . 19
\n g. Interface Information. . . . . . . . . . . . . . . . . . . . . . . 20
\n h. Documentation Licences . . . . . . . . . . . . . . . . . . . . . . 21
\n i. UPS Intellectual Property. . . . . . . . . . . . . . . . . . . . . 21
\n j. No Other Licenses. . . . . . . . . . . . . . . . . . . . . . . . . 21<\/p>\n
6. Fees and Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
\n a. License Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
\n b. Royalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
\n c. [ * ]. . . . . . . . . . . . . . . . . . . . . . . . . . 23
\n d. Royalty Payments . . . . . . . . . . . . . . . . . . . . . . . . . 23
\n e. Royalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
\n f. Demonstration and Internal Use . . . . . . . . . . . . . . . . . . 24<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
ii<\/p>\n
g. Initial Phase Development Fee. . . . . . . . . . . . . . . . . . . 24
\n h. Development Fees for Subsequent Phases . . . . . . . . . . . . . . 24
\n i. Software Maintenance and Support Services. . . . . . . . . . . . . 24
\n j. Dedicated Support Personnel. . . . . . . . . . . . . . . . . . . . 25
\n k. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
\n l. Commission for Referrals . . . . . . . . . . . . . . . . . . . . . 25
\n m. Sales and Use Taxes. . . . . . . . . . . . . . . . . . . . . . . . 26
\n n. Payment Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
\n o. Payment Discrepancies. . . . . . . . . . . . . . . . . . . . . . . 26
\n p. Time and Materials Fees. . . . . . . . . . . . . . . . . . . . . . 26<\/p>\n
7. Marketing, Distribution and Offering of Messaging Service . . . . . . . 27
\n a. Marketing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 27
\n b. Distribution of Client Software. . . . . . . . . . . . . . . . . . 27
\n c. Trademark Usage. . . . . . . . . . . . . . . . . . . . . . . . . . 28
\n d. End User Support . . . . . . . . . . . . . . . . . . . . . . . . . 28
\n e. Marketing Flexibility. . . . . . . . . . . . . . . . . . . . . . . 28
\n f. Additional Marketing and Sales Support . . . . . . . . . . . . . . 28<\/p>\n
8. Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
\n a. Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
\n b. Compatibility. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
\n c. Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
\n d. Intentionally omitted. . . . . . . . . . . . . . . . . . . . . . . 29
\n e. Reliability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
\n f. Intentionally omitted. . . . . . . . . . . . . . . . . . . . . . . 30
\n g. Locks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
\n h. Viruses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
\n i. Millennium . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
\n j. Warranty Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . 31<\/p>\n
9. Software Support Services . . . . . . . . . . . . . . . . . . . . . . . 31
\n a. Notification of Defects. . . . . . . . . . . . . . . . . . . . . . 31
\n b. Enhancements . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
\n c. Second Level Support . . . . . . . . . . . . . . . . . . . . . . . 32
\n d. Supported Datacenter Support . . . . . . . . . . . . . . . . . . . 33
\n e. Remedial Efforts by Tumbleweed . . . . . . . . . . . . . . . . . . 33
\n f. Termination of Maintenance . . . . . . . . . . . . . . . . . . . . 36
\n g. Maintenance Exclusions . . . . . . . . . . . . . . . . . . . . . . 36<\/p>\n
10. Confidential Information. . . . . . . . . . . . . . . . . . . . . . . . 36
\n a. Non-Disclosure of Trade Secrets and Confidential Information . . . 36
\n b. Return of Materials. . . . . . . . . . . . . . . . . . . . . . . . 37<\/p>\n
iii<\/p>\n
c. Third Party Materials. . . . . . . . . . . . . . . . . . . . . . . 37
\n d. Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
\n e. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38<\/p>\n
11. Source Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
\n a. Right to Use Source Code . . . . . . . . . . . . . . . . . . . . . 38
\n b. Source Code Escrow . . . . . . . . . . . . . . . . . . . . . . . . 38
\n c. Verification of Escrow Deposit(s). . . . . . . . . . . . . . . . . 39
\n d. Ownership of Modifications Made by UPS . . . . . . . . . . . . . . 39
\n e. Source Code License. . . . . . . . . . . . . . . . . . . . . . . . 39
\n f. Discontinuance of Marketing. . . . . . . . . . . . . . . . . . . . 39<\/p>\n
12. Training Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 39<\/p>\n
13. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 40
\n a. Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . 40
\n b. Changes in Law and Regulations . . . . . . . . . . . . . . . . . . 40<\/p>\n
14. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
\n a. Proprietary Rights Indemnification . . . . . . . . . . . . . . . . 41
\n b. Tumbleweed’s General Indemnity . . . . . . . . . . . . . . . . . . 41
\n c. UPS’s General Indemnity. . . . . . . . . . . . . . . . . . . . . . 42
\n d. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42<\/p>\n
15. Co-Promotion and Co-Advertising . . . . . . . . . . . . . . . . . . . . 42<\/p>\n
16. Term and Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 43
\n a. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
\n b. Termination by Tumbleweed; Escalation. . . . . . . . . . . . . . . 43
\n c. Consequences of Termination. . . . . . . . . . . . . . . . . . . . 44<\/p>\n
17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
\n a. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
\n b. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 45
\n c. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
\n d. Relationship of the Parties. . . . . . . . . . . . . . . . . . . . 45
\n e. Amendments and Modifications . . . . . . . . . . . . . . . . . . . 45
\n f. Personal Pronouns; Headings. . . . . . . . . . . . . . . . . . . . 45
\n g. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
\n h. No Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
\n i. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
\n j. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
\n k. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 47<\/p>\n
iv<\/p>\n
l. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
\n m. Personnel Rules and Regulations. . . . . . . . . . . . . . . . . . 47
\n n. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
\n o. Limitation of Liability. . . . . . . . . . . . . . . . . . . . . . 48
\n p. No Consequential Damages . . . . . . . . . . . . . . . . . . . . . 48
\n<\/c><\/s><\/table>\n
v<\/p>\n
SOFTWARE LICENSE DEVELOPMENT AND SERVICES AGREEMENT<\/p>\n
THIS SOFTWARE LICENSE DEVELOPMENT AND SERVICES AGREEMENT (this “Agreement”)
\nis made and entered into effective as of the 19th day of December, 1997, by and
\nbetween TUMBLEWEED SOFTWARE CORPORATION (“Tumbleweed”), a California corporation
\nwith offices at 2010 Broadway Street, Redwood City, California 94063, and UNITED
\nPARCEL SERVICE GENERAL SERVICES CO. (“UPS”), a Delaware corporation with offices
\nat 55 Glenlake Parkway, Atlanta, Georgia 30328, and which is authorized to
\nconduct business in the State of New York.<\/p>\n
1. DEFINITIONS. For purposes of this Agreement, the following terms have
\nthe meetings set forth below:<\/p>\n
a. “AFFILIATE” means, with respect to UPS, any entity which
\ncontrols, is controlled by or is under common control with UPS, or any
\npartnership, joint venture, consortium or other such entity in which UPS or its
\nAffiliates have any material form of ownership. For purposes of this definition
\nof Affiliate, “material form of ownership” shall be deemed to include
\npartnerships, joint ventures, consortiums or other entities in which UPS or its
\nAffiliates have at least a thirty percent (30%) ownership interest. The
\ndefinition of Affiliate shall specifically exclude [ * ] and any
\nsuccessor entity thereof.<\/p>\n
b. “APPLICATION PROGRAM INTERFACES” OR “APIS” mean those portions of
\nthe Software required to enable external applications to interface into and with
\nthe Software.<\/p>\n
c. “AUTHORIZED SHIPPING OUTLET” means any third party authorized
\nshipping outlet or UPS, or any third party which resells the UPS portfolio of
\nservices, which third party is designated by UPS to provide the Messaging
\nService. UPS shall provide written notice to Tumbleweed of the identity of each
\nsuch Authorized Shipping Outlet from time to time.<\/p>\n
d. “BUSINESS DAY” means (i) with respect to any time period within
\nwhich UPS must respond or otherwise perform some action, Monday through Friday,
\nexcluding any holidays recognized by UPS as company-wide holidays; and (ii) with
\nrespect to any time period within which Tumbleweed must respond or otherwise
\nperform some action, Monday through Friday, excluding any holidays recognized by
\nTumbleweed as company-wide holidays. All time period references in this
\nAgreement to “days” other than Business Days shall be deemed to refer to
\ncalendar days.<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 1 December 18, 1997<\/p>\n
e. “CLIENT SOFTWARE” means the client-based portions of the
\npre-existing computer software programs described in Exhibit A hereto, together
\nwith the Documentation therefor and all Enhancements thereto. The Client
\nSoftware furnished hereunder shall be in machine readable object code form.<\/p>\n
f. “CONFIDENTIAL INFORMATION” shall mean any data or information
\nthat is of value to and is not generally known to competitors of the party which
\nowns and\/or discloses such data or information, and that (i) in the case of data
\nor information which has been reduced to tangible form, is marked clearly and
\nconspicuously with a legend identifying such data or information as confidential
\nor proprietary, or (ii) in the case of data or information communicated orally,
\nis denominated as confidential or proprietary at the time of disclosure and
\nconfirmed in a writing by the disclosing party, summarizing such data or
\ninformation within a reasonable period of time thereafter. Confidential
\nInformation also includes any information described in this subsection (f) which
\neither party obtains from another party under an obligation of confidentiality.<\/p>\n
g. “CRITICAL DEFECT” means the failure of the Software to conform to
\nthe Detailed Design Specifications such that any critical function of the
\nMessaging Service is inoperable and no immediate circumvention is possible.<\/p>\n
h. “CUSTOM CLIENT SOFTWARE” means the client-based portions of the
\ncomputer software programs, and any and all portions thereof, developed by
\nTumbleweed pursuant to this Agreement. The Custom Client Software includes,
\nwithout limitation, the client-based portions of the Phase I Software and the
\nclient-based portions of the Phase II Software, and the Documentation therefor
\nand all Enhancements thereto. Unless otherwise specified in the applicable
\nSpecifications, all Custom Client Software furnished hereunder shall be in
\nmachine readable object code form.<\/p>\n
i. “CUSTOM SERVER SOFTWARE” means the server-based portions of the
\ncomputer software programs, and any and all portions thereof, developed by
\nTumbleweed pursuant to this Agreement. The Custom Server Software includes,
\nwithout limitation, the server-based portions of the Phase I Software and the
\nserver-based portions of the Phase II Software, and the Documentation therefor
\nand all Enhancements thereto. Unless otherwise specified in the applicable
\nSpecifications, all Custom Server Software furnished hereunder shall be in
\nmachine readable object code form.<\/p>\n
j. “CUSTOM SOFTWARE” means the Custom Server Software and the Custom
\nClient Software, collectively.<\/p>\n
k. “DEDICATED SUPPORT PERSONNEL” OR “DSP” means the person(s) who
\nshall be (i) assigned to one (1) or more UPS data centers, (ii) dedicated to
\nassisting UPS with the ongoing support and maintenance of the Software,
\nincluding without limitation, assisting UPS in performance of its first level
\nsupport obligations, and (iii) physically present at the relevant UPS<\/p>\n
UPS\/Tumbleweed Confidential 2 December 18, 1997<\/p>\n
data center(s) during UPS Business Hours and available by pager twenty-four (24)
\nhours per day, seven (7) days per week.<\/p>\n
l. “DERIVATIVE WORK” means a work which is based upon one or more
\npre-existing works, such as a revision, enhancement, modification, translation,
\nabridgement, condensation, expansion, or any other form in which such
\npre-existing work(s) may be recast, transformed, or adapted, and which, if
\nprepared without authorization of the owner of the copyright in such
\npre-existing work(s), would constitute a copyright infringement.<\/p>\n
m. “DETAILED DESIGN SPECIFICATIONS” means the detailed description
\nof the Software to be developed and\/or provided by Tumbleweed during any Phase
\n(as defined in Section 2 below) of the Project, together with the detailed
\ndescription of all Enhancements to such Software (provided that in no event
\nshall Tumbleweed be obligated to prepare Detailed Design Specifications for
\nEnhancements that are not developed specifically for UPS). The Detailed Design
\nSpecifications shall include, at a minimum, system flow charts, program
\ndescriptions, file layouts, database structures, report layouts and screen
\nlayouts, interface requirements and layouts, conversion requirements and
\nlayouts, equipment requirements and acceptance test plans for the Software. For
\nEnhancements that are not developed specifically for UPS, the specifications
\ncreated by Tumbleweed for such Enhancements shall be treated as Detailed Design
\nSpecifications for such Enhancements. Following preparation and acceptance of
\nthe Detailed Design Specifications by UPS with respect to any Phase(s)
\nsubsequent to Phase II of the Project, as provided for in Section 2(d), such
\nDetailed Design Specifications, with respect to such Phase(s), shall supercede
\nand replace the Functional Specifications for such Phase(s). In the event that
\nDetailed Design Specifications are not prepared with respect to any subsequent
\nPhase(s) of the Project, the term “Detailed Design Specifications,” as used
\nherein with respect to such Phase(s), shall be deemed to mean the Functional
\nSpecifications for such Phase(s). The term “Detailed Design Specifications,” as
\nused herein with respect to Phases I and II of the Project, shall be deemed to
\nrefer solely to the Specifications for such Phases set forth in Exhibits A and B
\nhereto. In the event that any Detailed Design Specifications hereunder include
\nany disclaimer or other limitation of warranty or liability which conflicts with
\nany of the terms and conditions of this Agreement, the terms and conditions of
\nthis Agreement shall control and such disclaimers and limitations shall not
\napply.<\/p>\n
n. “DOCUMENTATION” means all detailed user and operational manuals,
\ninstructions and other documentation for the Software, and all training manuals
\nand routines designed to train users in the operation of the Software (including
\nwithout limitation, the Custom Client Software and the Custom Server Software).
\nAll Documentation supplied on disks must be in machine readable form.<\/p>\n
o. “ENHANCEMENT” means any modifications, enhancements, revisions
\n(including, without limitation, revisions to support new releases of any
\noperating system), corrections, updates, upgrades, new versions, additions,
\nextensions, interfaces, new platforms, and improvements of any type made by or
\non behalf of Tumbleweed to the Software (where<\/p>\n
UPS\/Tumbleweed Confidential 3 December 18, 1997<\/p>\n
Tumbleweed has the right to distribute such Enhancements) and which are made
\navailable by Tumbleweed to UPS or which are made generally commercially
\navailable by Tumbleweed to its customers. For the purposes of this Agreement,
\nsoftware shall be “generally commercially available” when Tumbleweed lists such
\nsoftware on a standard price sheet or makes such software available for fee-free
\ndownload by customers or makes such software available to five (5) or more
\nPersons for use on a revenue generating basis.<\/p>\n
p. “FUNCTIONAL SPECIFICATIONS” means the description of the Software
\nto be developed and\/or provided by Tumbleweed during any Phase (as defined in
\nSection 2 below) of the Project. In the event that any Functional
\nSpecifications hereunder include any disclaimer or other limitation of warranty
\nor liability which conflicts with any of the terms and conditions of this
\nAgreement, the terms and conditions of this Agreement shall control and such
\ndisclaimers and limitations shall not apply.<\/p>\n
q. “MAJOR DEFECT” means the failure of the Software to conform to
\nthe Detailed Design Specifications such that either (i) and critical function of
\nthe Software is inoperable, but immediate circumvention is possible, or (ii) any
\nmajor (non-critical) function of the Software is inoperable and no immediate
\ncircumvention is possible.<\/p>\n
r. “MESSAGING SERVICE” means the electronic delivery\/messaging
\nservice to be offered by UPS and\/or any of its Affiliates and Authorized
\nShipping Outlets, for the electronic delivery (and related transaction
\nattestation services) of digital representations, including without limitation,
\ntextual messages, photographic images, audio, video, graphics, computer software
\nand\/or other information or content.<\/p>\n
s. “MINOR DEFECT” means any failure of the Software to conform to
\nthe Detailed Design Specifications in a manner not covered by Critical Defects
\nand\/or Major Defects.<\/p>\n
t. “PERSON” means any individual, or any corporation, limited
\nliability company, partnership, joint venture, association, joint stock company,
\ntrust, incorporated organization or other legal entity.<\/p>\n
u. “PHASE I SOFTWARE” means the computer software programs, and any
\nand all portions thereof, developed by Tumbleweed pursuant to this Agreement, as
\ndescribed in the Phase I portion of the Specifications. Except to the extent
\nspecified in the applicable Specifications, the Phase I Software furnished
\nhereunder shall be in machine readable object code form.<\/p>\n
v. “PHASE II SOFTWARE” means the computer software programs, and any
\nand all portions thereof, developed by Tumbleweed pursuant to this Agreement, as
\ndescribed in the Phase II portion of the Specifications. Except to the extent
\nspecified in the applicable Specifications, the Phase II Software furnished
\nhereunder shall be in machine readable object code form.<\/p>\n
UPS\/Tumbleweed Confidential 4 December 18, 1997<\/p>\n
w. “PROJECT” means the design, development, installation and testing
\nof the Software.<\/p>\n
x. “SERVER SOFTWARE” means the server-based portions of the
\npre-existing computer software programs described in Exhibit A hereto, together
\nwith the documentation therefor and all Enhancements thereto. The Server
\nSoftware furnished hereunder shall be in machine readable object code form.<\/p>\n
y. “SERVICES” means all work to be provided by Tumbleweed under the
\nterms of this Agreement.<\/p>\n
z. “SOFTWARE” means the Standard Software and the Custom Software,
\ncollectively.<\/p>\n
aa. “SOURCE CODE” means a copy of the source code corresponding to
\nthe Software, including all updates to the source code of the Software delivered
\nto the Escrow Agent from time to time pursuant to Section 11 of this Agreement,
\nplus any pertinent associated commentary or explanation that may be necessary to
\nrender the source code understandable and usable by highly-trained computer
\nprogrammers. The Source Code shall be in a format and on a storage medium
\nsuitable for loading onto customary development platforms, and shall not be
\nencrypted. Insofar as the Software includes any computer software programs or
\nother material which are proprietary to Persons other than Tumbleweed, and for
\nwhich Tumbleweed has no right to deposit such source code, the Source Code shall
\nnot include the source code for any such third party computer software programs,
\nbut shall include object code modules therefor where Tumbleweed has the right to
\ndeposit such materials. Insofar as the “development environment” employed by
\nTumbleweed for the development, maintenance and implementation of the Source
\nCode includes any device, programming, or documentation not commercially
\navailable to UPS on reasonable terms through readily known sources other than
\nTumbleweed, the Source Code shall include al such devices, programming, or
\ndocumentation. The foregoing reference to such “development environment” is
\nintended to apply to any programs, including compilers, “workbenches,” tools,
\nand higher-level (or “Proprietary”) languages, used by Tumbleweed for the
\ndevelopment, maintenance and implementation of the Source Code. The Source Code
\nfor the Standard Software shall be deemed to be Tumbleweed’s Trade Secret.<\/p>\n
bb. “SPECIFICATIONS” mean the Functional Specifications and\/or the
\nDetailed Design Specifications, individually and collectively.<\/p>\n
cc. “STANDARD SOFTWARE” means the Server Software and the Client
\nSoftware, collectively.<\/p>\n
UPS\/Tumbleweed Confidential 5 December 18, 1997<\/p>\n
dd. “SUPPORTED DATACENTER” means the UPS data processing
\nfacility(ies) that will use the Software to operate the Messaging Service, for
\nwhich UPS has elected to secure the Services of the Dedicated Support Personnel.<\/p>\n
ee. “TRADE SECRET” shall mean any Confidential Information of the
\nparty which owns and\/or discloses such information, including but not limited to
\ntechnical or non-technical data, a formula, a pattern, a compilation, a program,
\na device, a method, a technique, a drawing, a process, financial data, financial
\nplans, product plans, or a list of actual or potential customers or suppliers,
\nwhich (i) derives economic value, actual or potential, from not being generally
\nknown to and not being readily ascertainable by proper means by other person who
\ncan obtain economic value from its disclosure or use and (ii) is the subject of
\nefforts that are reasonable under the circumstances to maintain its secrecy.
\nTrade Secrets specifically include any Confidential Information described in
\nthis subsection (ee) which either party obtains from another party under an
\nobligation of confidentiality.<\/p>\n
ff. “TRANSACTION” means any [ * ]<\/p>\n
gg. “TUMBLEWEED MARKS” mean the “Tumbleweed” and “Tumbleweed Posta”
\ntrademarks, the ‘Tumbleweed” logo, and any other trademark, trade name or
\nservice mark of Tumbleweed relating to products and\/or services involving
\nInternet or intranet delivery systems.<\/p>\n
hh. “UPS INFORMATION” means those portions of technical information,
\ncomputer or other specifications, documentation, works of authorship and other
\ncreative works, written, oral or otherwise expressed, originated by Tumbleweed
\nor any of its employees, consultants, representatives or agents (collectively,
\n“Associates”) in the course of performing work under this Agreement in
\nconnection with any component or portion of the Custom Software for which the
\napplicable Specifications indicate that UPS will won such component or portion.<\/p>\n
ii. “UPS INVENTIONS” mean those specific inventions, discoveries and
\nimprovements which are conceived, first reduced to practice, made or developed
\nin the course of work performed under this Agreement by Tumbleweed or by one or
\nmore of its Associates in connection with any component or portion of the Custom
\nSoftware for which the applicable Specifications indicate that UPS will own such
\ncomponent or portion.<\/p>\n
jj. “USE” means access, configure reproduce, execute, display,
\nperform, employ, load, process, run and\/or utilize the Software and, upon
\nrelease of the Source Code for<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 6 December 18, 1997<\/p>\n
the software to UPS pursuant to Section 11 hereof and\/or the Escrow Agreement
\nattached hereto as Exhibit F, solely with respect to such Source Code, shall
\nalso include the right to Use such Source Code (solely as permitted by the
\nSource Code License set forth in Section 11(e)). In the event that the
\napplicable Specifications indicate that the Source Code for any portions of the
\nCustom Software developed thereunder will be provided to UPS, the term “Use”
\nshall also include the right to Use, modify, maintain, update and\/or create
\nDerivative Works of the Source Code for such Custom Software, so long as such
\nUse does not disclose any Tumbleweed Trade Secrets.<\/p>\n
2. SOFTWARE DEVELOPMENT. The Software will be developed and\/or provided
\nby Tumbleweed in two or more phases (the “Phases”), in accordance with the
\nfollowing terms and procedures:<\/p>\n
a. INITIAL PHASES. During Phase I of the Project, Tumbleweed will
\nprovide to UPS the development and implementation Services, and the associated
\nSoftware deliverables, identified or described in the Specifications set forth
\nin Exhibit A hereto, covering the Standard Software and the Phase I Software.
\nDuring Phase II of the Project, Tumbleweed will provide to UPS the development
\nand implementation Services, and the associated Software deliverables,
\nidentified or described in the Specifications set forth in Exhibit B hereto,
\ncovering the Phase II Software.<\/p>\n
b. SUBSEQUENT PHASES. Tumbleweed agrees to provide to UPS, as
\nrequested by UPS from time to time, software development and other Services in
\nconnection with subsequent Phases of this Agreement. Except as may be
\nspecifically agreed in writing by the parties, the terms and conditions of this
\nAgreement shall apply to each such subsequent Phase which is proposed by UPS and
\naccepted by Tumbleweed for the furnishing of such Services. Each such Phase
\nwill generally be defined by a set of mutually agreed Functional Specifications,
\nwhich will contain a description of the tasks to be performed by Tumbleweed, the
\nSoftware, Documentation and other deliverables to be provided by Tumbleweed, a
\nschedule of performance and either a schedule of payments (for fixed price work)
\nor a statement of Tumbleweed’s then-current rates (for work performed on a time
\nand materials basis). The Functional Specifications may include such additional
\nterms and conditions as the parties may agree to include.<\/p>\n
c. FUNCTIONAL SPECIFICATIONS FOR SUBSEQUENT PHASES. Within ten (10)
\nBusiness Days after the delivery of any Functional Specifications to Tumbleweed
\n(unless a longer period is reasonably required), Tumbleweed shall either (i)
\naccept the Functional Specifications in writing, or (ii) notify UPS if
\nTumbleweed objects to any part of the Functional Specifications, specifying with
\nparticularity and in good faith the changes which Tumbleweed desires in order to
\naccept the Functional Specifications. The parties agree that Tumbleweed’s
\nconcerns regarding ownership issues relating to any Custom Software to be
\ndeveloped pursuant to the proposed Functional Specifications shall constitute
\n“good faith” concerns of the purposes of this Agreement. Within ten (10)
\nBusiness Days of delivery of any objections to the Specifications, UPS and
\nTumbleweed shall confer in order to resolve Tumbleweed’s objections, and UPS<\/p>\n
UPS\/Tumbleweed Confidential 7 December 18, 1997<\/p>\n
shall resubmit the Functional Specifications to Tumbleweed. Within ten (10)
\nBusiness Days of the delivery of the revised Functional Specifications,
\nTumbleweed shall either (i) accept the revised Functional Specifications in
\nwriting, (ii) notify UPS if it continues to object to any part of the Functional
\nSpecifications, or (iii) decline to perform such Services relating to the
\nproposed Functional Specifications. If the parties are unable to agree in
\nwriting to a set of Functional Specifications within thirty (30) days of the
\ndelivery of the revised Functional Specifications, then any proposed development
\nServices relating to that particular Phase shall be deemed terminated.<\/p>\n
d. DETAILED DESIGN SPECIFICATIONS. With respect to each Phase
\nbeyond Phase II of the Project, Tumbleweed shall, with UPS’s cooperation and at
\nno additional charge to UPS, gather the necessary detailed requirements and
\ndevelop and deliver to UPS a set of Detailed Design Specifications based upon
\nthe Functional Specifications which have been mutually agreed by the parties
\nwith respect to such Phase. The Detailed Design Specifications shall be
\ndelivered to UPS on or before the specified time set forth in the applicable
\nFunctional Specifications. Within ten (10) Business Days of the delivery of the
\nDetailed Design Specifications to UPS, UPS shall notify Tumbleweed in writing of
\nits acceptance or rejection of the Detailed Design Specifications. If the
\nDetailed Design Specifications are rejected, UPS will specify the reasons for
\nsuch rejection and Tumbleweed shall have ten (10) Business Days to revise and
\nre-deliver amended Detailed Design Specifications to UPS for acceptance. Once
\naccepted by UPS, the Detailed Design Specifications shall supersede the
\nFunctional Specifications for that portion of the Project to which the Detailed
\nDesign Specifications relate. If UPS rejects the amended Detailed Design
\nSpecifications, UPS’s sole and exclusive remedy shall be to terminate the
\nparticular phase to which UPS’s rejection relates.<\/p>\n
e. ACCEPTANCE OF SPECIFICATIONS. Upon acceptance of the
\nSpecifications for any Phase of the Project such Specifications shall be deemed
\nto be a part of this Agreement, and Tumbleweed shall perform the Services
\ndescribed in such Specifications within the time frames, in the manner, and for
\nthe fees specified therein.<\/p>\n
f. PROGRAMMING AND TUMBLEWEED TESTING. After approval of the
\nDetailed Design Specifications by UPS pursuant o Section 2(d) hereof, Tumbleweed
\nshall commence program coding and testing to provide the necessary programming
\nof the Software. Upon completion of the program coding and testing, Tumbleweed
\nshall notify UPS in writing that such program coding and testing is completed
\nand that, upon delivery of the Software to UPS (and installation thereof by
\nTumbleweed in the event such installation is at a Supported Datacenter) UPS may
\ncommence its acceptance testing.<\/p>\n
g. ON-SITE INSTALLATION SUPPORT. Upon delivery of the Phase II
\nSoftware, and again upon completion of the upgrade of the Custom Software to
\nreflect version 2.0 of the Standard Software, Tumbleweed shall identify and
\nassign at least one (1) Tumbleweed professional services employee to be on site
\nat UPS’s facilities and devote all of his or her business time for a period of
\nup to three (3) Business Days, the duration of which will be determined by<\/p>\n
UPS\/Tumbleweed Confidential 8 December 18, 1997<\/p>\n
UPS in its sole discretion, to support the installation of the Software. In the
\nevent that UPS requires additional support beyond such three (3) Business Day
\nperiod, and such support is not required as a result of any problems with the
\nSoftware encountered during such installation, UPS shall pay Tumbleweed for such
\nadditional on-site installation support Services on a time and materials basis.<\/p>\n
h. DESIGNATION OF PROJECT COORDINATORS. Tumbleweed shall designate
\nRobert A. Krauss as its Project coordinator (the “Tumbleweed Project
\nCoordinator”), who shall be assigned by Tumbleweed to supervise the Project,
\nshall devote the necessary time to such endeavor, and shall serve as UPS’s point
\nof contact for the resolution of problems. The services of the Tumbleweed
\nProject Coordinator shall be included in the fees provided for herein. UPS
\nshall also designate an employee who shall be assigned by UPS to coordinate
\nUPS’s involvement in the Project (the “UPS Project Coordinator”), who shall
\nserve as Tumbleweed’s point of contact for the resolution of problems. The
\ninitial UPS Project Coordinator is Jack Carrig. Either party may change its
\nProject Coordinator from time to time upon prior written notice to the other
\nparty; provided, however, that Tumbleweed shall not change the Tumbleweed
\nProject Coordinator with respect to any Phase of the Project without the prior
\nwritten consent of UPS, which consent shall not be unreasonably withheld, unless
\nsuch individual shall have left the employment of Tumbleweed.<\/p>\n
i. PROGRESS REPORTS. The UPS Project Coordinator and Tumbleweed
\nProject Coordinator, as well as appropriate additional personnel involved in the
\nparticular task underway, shall arrange a conference call (or schedule a meeting
\nat a mutually agreed site) to discuss the progress made by Tumbleweed and UPS.
\nSuch call or meeting shall take place (i) each week during the period prior to
\nthe Commercial Availability Date, (ii) each month for the first year of the
\nAgreement, and (iii) each quarter for the remainder of the Agreement. Each such
\nconference call (or meeting) shall include a discussion by the parties of any
\nactual or potential events which may give rise to delays in any schedules. In
\norder to facilitate proper project management, UPS shall notify Tumbleweed
\npromptly of any actual or potential events which may give rise to delays of any
\nUPS deliverables or performance of UPS’s obligations (or any obligations of
\nUPS’s Affiliates or Associates) under this Agreement, and Tumbleweed shall, for
\neach such conference call (or meeting), provide UPS with a progress report
\nspecifying in detail:<\/p>\n
(A) Any critical issue encountered by Tumbleweed during the preceding
\n period, including without limitation, the failure of either party to
\n perform, any delay of either party in performing or the inadequate
\n performance of either party, which may prevent or tend to prevent
\n Tumbleweed from completing any task by the completion date;<\/p>\n
(B) An estimated length of any delay which may result from any critical
\n issues; and<\/p>\n
(C) The cause of any critical issue and the specific steps taken or
\n proposed to be taken by Tumbleweed or UPS, as appropriate, to remedy
\n such critical issue.<\/p>\n
UPS\/Tumbleweed Confidential 9 December 18, 1997<\/p>\n
Each progress report provided by Tumbleweed pursuant to this Section
\n2(i) shall include recent critical issues discussed and dealt with, together
\nwith those not yet raised by Tumbleweed, during the preceding period. In any
\nevent, critical issues shall be discussed and dealt with as soon as possible
\nafter identification by Tumbleweed or UPS. In the event Tumbleweed fails to
\nspecify in writing any critical issue with respect to a given period in such
\nmanner and at such time as required pursuant to this Section 2(i), it shall be
\npresumed that no critical issue arose during such period.<\/p>\n
j. EXTENSIONS OF TIME. If Tumbleweed is delayed at any time during
\nPhase I or Phase II of the Project by the failure of UPS or its Affiliates or
\nAssociates to perform the obligations set forth in Exhibit D hereto, then upon
\nnotice from Tumbleweed to UPS, the affected Implementation Schedule date(s) will
\nbe reasonably extended to accommodate such delays, not to exceed a day-for-day
\nextension for each such delay. If Tumbleweed is delayed at any time during
\nPhase I or Phase II of the Project by supervening conditions beyond Tumbleweed’s
\nreasonable control, and arising without its fault or negligence after the
\nexecution hereof, including acts of God, civil commotion, strikes, labor
\ndisputes, or governmental demands or requirements, then upon notice from
\nTumbleweed to UPS, the affected Implementation Schedule date(s) will be
\nreasonably extended to accommodate such delays, not to exceed a day-for-day
\nextension for each such delay and all such extensions pursuant to this sentence
\nnot to exceed, in the aggregate, ten (10) days. If Tumbleweed will be delayed
\nby more than ten (10) days, in the aggregate, during Phase I or Phase II of the
\nProject by supervening conditions beyond Tumbleweed’s reasonable control,
\nincluding acts of God, civil commotion, strikes, labor disputes, or governmental
\ndemands or requirements, then Tumbleweed may request that the affected
\nImplementation Schedule date(s) be further extended. UPS shall review such
\nrequest with Tumbleweed at the appropriate conference call (or meeting) provided
\nfor in Section 2(i) above, and shall grant an extension of time commensurate
\nwith the circumstances, subject to the following conditions:<\/p>\n
(A) The cause of the delay (i) is beyond Tumbleweed’s control and arises
\n without its fault or negligence, and (ii) arises after the execution
\n hereof;<\/p>\n
(B) Tumbleweed demonstrates that the affected Implementation Schedule
\n date(s) will be actually and necessarily delayed; and<\/p>\n
(C) Tumbleweed provides a written request to UPS in conjunction with the
\n next progress report provided for in Section 2(i) above after the time
\n Tumbleweed knows of any cause or circumstances which might, under
\n reasonable foreseeable circumstances, result in a delay. If
\n Tumbleweed shall fail to give the foregoing notice, the right to
\n request an extension for such cause shall be waived.<\/p>\n
If either party is delayed at any time in the performance of its
\nobligations hereunder subsequent to Phase II of the Project by the failure of
\nthe other party to perform its obligations under this Agreement, or by
\nsupervening conditions beyond such party’s reasonable<\/p>\n
UPS\/Tumbleweed Confidential 10 December 18, 1997<\/p>\n
control, including acts of God, civil commotion, strikes, labor disputes, or
\ngovernmental demands or requirements, then the parties shall review the cause of
\nsuch delay at the appropriate conference call (or meeting) provided for in
\nSection 2(i) above, and an extension of time commensurate with the circumstances
\nshall be provided, subject to the following conditions:<\/p>\n
(X) The cause of the delay is beyond the control of the party requesting
\n the extension of time and arises without its fault or negligence; and<\/p>\n
(Y) The party requesting the extension demonstrates that the affected
\n obligation(s) will be actually and necessarily delayed.<\/p>\n
Any delay by Tumbleweed in the performance of its obligations
\nhereunder as a result of (i) any failure by UPS, its Affiliates or Associates to
\nperform their express obligations under this Agreement; or (ii) by any
\nsupervening condition beyond Tumbleweed’s reasonable control, and which failure
\nor condition satisfies the applicable requirement(s) set forth above in this
\nsubsection (j) shall be deemed an “Excusable Delay,” with respect to
\nTumbleweed’s performance. Unless otherwise agreed by the parties, in the event
\nof an Excusable Delay, Tumbleweed shall proceed continuously and diligently with
\nthe performance of the unaffected portions of its obligations under this
\nAgreement.<\/p>\n
Notwithstanding the foregoing, UPS shall have the right to terminate
\nthis Agreement, or any Phase hereunder or Maintenance Services (hereinafter
\ndefined), as applicable, without liability to Tumbleweed (except as expressly
\nset forth in this paragraph), in the event that any Excusable Delay materially
\nadversely affects UPS’s ability to offer the Messaging Service, whereupon (i) if
\nsuch Excusable Delay occurs prior to acceptance of Phase II of the Project, (x)
\nif such Excusable Delay is due to UPS’s or its Affiliates’ or Associates’
\nfailure to perform the obligations set forth in Exhibit D hereto, Tumbleweed
\nshall be entitled to payment of the Initial Phase Development Fee described in
\nSection 6(g) in full, but shall refund to UPS any License Fees previously paid
\npursuant to Section 6(a), in which case all licenses granted hereunder shall
\nterminate, Section 15 terminates, and neither party shall have any further
\nobligations to the other, and (y) if such Excusable Delay is not due to any such
\nfailure by UPS. Tumbleweed shall refund to UPS all amounts paid hereunder, in
\nwhich case all licenses granted hereunder shall terminate, Section 15
\nterminates, and neither party shall have any further obligations to the other;
\n(ii) in the event that such Excusable Delay occurs in connection with any
\nsubsequent Phase of the Project, and if such Excusable Delay is not due to any
\nfailure by UPS or its Affiliates or Associates to perform the obligations set
\nforth in the relevant Specifications, Tumbleweed shall refund to UPS all amounts
\npaid with respect to such Phase; and (iii) in the event that such Excusable
\nDelay involves the provision of Maintenance Services by Tumbleweed, Tumbleweed
\nshall refund to UPS a pro rata amount (calculated on a daily basis) of any
\nannual Maintenance Service fees previously paid by UPS for the period in which
\nsuch termination is effective. Such foregoing termination (and associated
\nrefund, if applicable) shall constitute UPS’s sole and exclusive remedy for any
\nExcusable Delay which materially adversely affects UPS’s ability to offer the
\nMessaging Service.<\/p>\n
UPS\/Tumbleweed Confidential 11 December 18, 1997<\/p>\n
k. TERMINATION OF DEVELOPMENT SERVICES. UPS may terminate the
\nsoftware development Services of Tumbleweed for any reason whatsoever during any
\nPhase beyond Phase II of this Agreement by not less than [ * ] written
\nnotice to Tumbleweed specifying the date upon which termination becomes
\neffective. In the event of any termination during any such Phase, Tumbleweed
\nshall be entitled to payment, on a time and materials basis, for Services
\nrendered by Tumbleweed prior to the effective date of termination; provided,
\nhowever, that payments for such Phase shall not exceed the maximum amount
\nspecified in the applicable Specifications, and such payments shall constitute
\nfull settlement of any and all claims of Tumbleweed of every description arising
\nout of or relating to the termination of such Phase, including without
\nlimitation, claims for lost profits.<\/p>\n
3. MODIFICATIONS TO SPECIFICATIONS.<\/p>\n
a. PROCEDURES. No changes in or deviations from the Specifications
\nshall be permitted unless the UPS Project Coordinator shall submit a written
\nrequest to Tumbleweed setting forth with reasonable specificity any requested
\nchanges to such Specifications. Alternatively, a proposal for such a change or
\ndeviation submitted in writing by Tumbleweed and accepted in writing by UPS
\nshall suffice for this purpose. As soon as reasonably practicable, but in no
\nevent later than ten (10) days following Tumbleweed’s receipt of such request
\n(unless a longer period is reasonably required), Tumbleweed shall provide UPS
\nwith written notice stating any anticipated change in price, schedule, or any
\nother terms of the Specifications resulting from the requested changes. All
\nchanges and adjustments required by Tumbleweed in its notice shall be made by
\nTumbleweed in good faith.<\/p>\n
b. ACCEPTED CHANGES. Unless UPS accepts in writing any changes in
\nprice, schedule, or other terms set forth by Tumbleweed in its notice, the
\nchanges to the Specifications shall not be made. If such changes are accepted
\nin writing by UPS, the changes to the Specifications shall be made, and UPS’s
\nwritten request for such changes and Tumbleweed’s written acceptance thereof
\nshall be deemed to constitute an amendment to the Specifications and shall be
\ndeemed to be a part of this Agreement.<\/p>\n
4. IMPLEMENTATION AND ACCEPTANCE.<\/p>\n
a. IMPLEMENTATION SCHEDULE. The Implementation Schedule attached
\nhereto as Exhibit D sets forth the timing requirements for the various stages of
\nthe completion of Phase I and Phase II of the Project. In the event any
\nmilestone set forth in the Implementation Schedule is not met due to any delay
\ncaused by Tumbleweed, in addition to damages for the delay (if applicable), as
\nprovided for in Section 4(b) below, Tumbleweed shall [ * ].<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 12 December 18, 1997<\/p>\n
Additionally, Tumbleweed shall use commercially reasonable efforts to ensure
\nthat such delay does not result in slippage of later milestones.<\/p>\n
b. ACCEPTANCE TESTING. Tumbleweed shall notify UPS in writing when
\nTumbleweed has completed the final version of the Software associated with any
\nPhase of the Project such that it is ready for acceptance testing by UPS. UPS
\nshall then promptly conduct the acceptance tests provided for in the Detailed
\nDesign Specifications (the “Acceptance Tests”) to determine whether or not the
\nSoftware, Documentation and other deliverables to be provided pursuant to such
\nPhase materially conform to the Detailed Design Specifications (the “Acceptance
\nStandard”). The Acceptance Tests shall be conducted over a period not to exceed
\nthirty-five (35) days (the “Acceptance Test Period”), and may consist both of
\ntesting by UPS in a test environment and beta testing by allowing a limited
\nnumber of customers to process Transactions using the Software in a product
\nenvironment. In the event that the applicable Software, Documentation and other
\ndeliverables materially conform to the Acceptance Standard, UPS shall notify
\nTumbleweed in writing that same have passed the Acceptance Tests. In the event
\nthat UPS does not provide notice of rejection of any Phase of the Project by the
\nend of the Acceptance Test Period for such Phase, such Phase shall be deemed
\naccepted.<\/p>\n
In the event that the Acceptance Tests reveal that the applicable
\nSoftware, Documentation and other deliverables, or any portion thereof, to be
\nprovided pursuant to any Phase do not materially conform to the Acceptance
\nStandard, then UPS shall so notify Tumbleweed in writing specifying the nature
\nof such failure, and Tumbleweed shall have [ * ] to correct such failure
\nafter which UPS shall have [ * ] to repeat the Acceptance Tests
\naccording to the above process; provided, however that UPS will use reasonable
\nefforts to notify Tumbleweed as promptly as possible during the initial
\nAcceptance Test Period when and as such failures are identified. If the
\nSoftware, Documentation and other deliverables again fail to pass the Acceptance
\nTests, UPS’s sole and exclusive remedy shall be to elect one of the following
\noptions in its sole discretion: (i) the parties may mutually agree that
\nTumbleweed shall have an additional [ * ] to correct the failure, in
\nwhich case the above process (including, without limitation, these remedies)
\nshall be repeated; (ii) UPS may accept the applicable Software, Documentation
\nand other deliverables despite the nonconformities; (iii) the Acceptance Tests
\nassociated with either Phase I or Phase II of this Agreement, UPS may terminate
\nthe Agreement, whereupon UPS, at its sole option, may elect one (1) of the
\nfollowing remedies: (X) Tumbleweed will [ * ] which amount is agreed by
\nthe parties to be the deemed<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 13 December 18, 1997<\/p>\n
amount of damages suffered by UPS as a result of such failure and not a penalty,
\nin which event all licenses granted hereunder shall terminate, Section 15 shall
\nterminate, and the provisions of Section 16(c) shall apply, or (Y) Section 15
\nshall continue to apply, in which event all licenses granted hereunder shall
\nterminate and the provisions of Section 16(c) shall apply, but Tumbleweed shall
\nnot be obligated to pay to UPS the aforementioned [ * ] or (iv) for
\nAcceptance Tests associated with Phases beyond Phase II of this Agreement, UPS
\nmay terminate such Phase(s), whereupon Tumbleweed will promptly refund to UPS
\nall amounts paid to Tumbleweed in connection with such Phase(s).<\/p>\n
Notwithstanding anything to the contrary herein, acceptance of
\nPhase II shall be deemed to have occurred when UPS begins using the Software
\nassociated with Phase II of the Project to support revenue generating customers
\nof the Messaging Service. Such date shall be defined as the “Commercial
\nAvailability Date.”<\/p>\n
In the event that Tumbleweed fails to deliver the Software,
\nDocumentation and other deliverables associated with Phase I or Phase II of
\nthis Agreement by the final delivery date set forth in the Implementation
\nSchedule set forth in Exhibit D hereto, or in the event UPS elects option (i)
\nabove with respect to Acceptance Tests associated with either Phase I or
\nPhase II of this Agreement, then as UPS’s sole and exclusive remedy for any
\ndelay in passing the Acceptance Tests associated with Phase I and Phase II of
\nthis Agreement on or before the scheduled acceptance milestone date therefor
\n(as specified in the Implementation Schedule), UPS may elect one of the
\nfollowing options in its sole discretion: (x) UPS may terminate this
\nAgreement, whereupon UPS, at its sole option, may elect one (1) of the
\nfollowing remedies: (A) Tumbleweed [ * ], which amount is agreed by the
\nparties to be the deemed amount of damages suffered by UPS as a result of
\nsuch failure and not a penalty, in which event all licenses granted hereunder
\nshall terminate, Section 15 shall terminate, and the provisions of Section
\n16(c) shall apply, or (B) Section 15 shall continue to apply, in which event
\nall licenses granted hereunder shall terminate and the provisions of Section
\n16(c) shall apply, but Tumbleweed shall not be obligated to pay to UPS the
\naforementioned [ * ]; or (y) the parties may mutually agree that
\nTumbleweed shall continue performing, in which event UPS will be entitled to
\ndeduct from the amounts otherwise payable hereunder, as damages for any delay
\nof up to thirty (30) days (“Delay Damages”), [ * ] for each calendar
\nday that the Software, Documentation and other deliverables associated with
\nPhase I or Phase II of this Agreement fail to pass the Acceptance Tests
\nbeyond the scheduled milestone date therefor (as specified in the
\nImplementation Schedule). The foregoing Delay Damages are agreed by the
\nparties to be the deemed amount of damages suffered by UPS as a result of any
\nsuch delay of up to thirty (30) days and not a penalty. Any failure of the
\nSoftware, Documentation and other deliverables <\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 14 December 18, 1997<\/p>\n
associated with Phase I or Phase II of this Agreement to pass the Acceptance
\nTests within thirty (30) days of the scheduled acceptance milestone date
\ntherefor (as specified in the Implementation Schedule, as such dates may be
\nextended pursuant to Section 2(j)) shall constitute non-delivery by
\nTumbleweed.<\/p>\n
c. INTERIM TESTING. For efficiency and project management purposes,
\ninformal testing, in addition to the acceptance testing provided for herein, may
\nbe conducted at various times as the work progresses, at Tumbleweed’s
\ndiscretion, but neither such informal testing nor any provisional acceptance of
\nthe results thereof by UPS shall constitute acceptance of any aspect of the
\nSoftware by UPS or relieve Tumbleweed of the responsibility to complete
\nsuccessful acceptance tests on the Software, as a whole, as a precondition to
\nits entitlement to certain payments under this Agreement.<\/p>\n
5. LICENSES AND PROPRIETARY RIGHTS.<\/p>\n
a. SERVER SOFTWARE. Tumbleweed hereby grants to UPS a
\nnon-exclusive, worldwide, royalty-bearing, perpetual (subject to termination
\npursuant to the provisions hereof) license (the “License”): (i) to Use
\n[ * ] copies of the Server Software and Custom Server Software to
\nprovide the Messaging Service, and shall include the right to operate the
\nServer Software and Custom Server Software on [ * ] processors and
\n[ * ] data center locations [ * ]; and (ii) to reproduce the Server
\nSoftware and Custom Server Software, and to distribute and sublicense same,
\nwith equivalent rights to those enumerated in (i) to (x) any one or more of
\nUPS’s Affiliates and\/or Authorized Shipping Outlets, and (y) to any third
\nparty which shall have been approved in writing by Tumbleweed in advance,
\nwhich approval shall not be unreasonably withheld, conditioned or delayed,
\nwhere such third party is one to which UPS outsources all or any portion of
\nthe responsibility for operating the Messaging Service (collectively, “Server
\nSublicensees”). All sublicenses granted by UPS under this Section 5(a) shall
\ninclude the minimum terms and conditions which are set out in Exhibit I
\nhereto. Upon request by UPS, Tumbleweed shall offer to provide maintenance
\nand support services to the Server Sublicensees on commercially reasonable
\nterms and conditions (including price). UPS shall not, nor shall it
\nauthorize any third party to, decompile, reverse engineer or disassemble the
\nServer Software and\/or Custom Server Software. UPS shall not remove, modify
\nor obscure any proprietary rights notices in the Server Software and\/or
\nCustom Server Software, or any logos or trademarks displayed in such
\nSoftware, as long as no such notices are visually perceptible to end user
\ncustomers of UPS and its Server Sublicensees under this Section 5(a), except
\nto the extent expressly provided for in Section 7(c) hereof.<\/p>\n
b. CLIENT SOFTWARE. In addition to the rights and licenses provided
\nfor in Section 5(a) above, the License shall also include a License to Use and
\nto distribute and sublicense, either on a standalone basis or bundled with UPS’s
\nproducts or services, and to provide services based upon, the Client Software
\nand Custom Client Software to any end users. Such License includes the right to
\ngrant perpetual licenses to Use, sublicense and distribute copies of the Client
\nSoftware and Custom Client Software for an end user’s use and permits UPS<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 15 December 18, 1997<\/p>\n
to privately label the Client Software and Custom Client Software under UPS’s
\nname and trademarks. Distribution of the Client Software and Custom Client
\nSoftware may be made by any means selected by UPS, including without limitation,
\nby making the Client Software and Custom Client Software available for download
\nfrom one or more FTP sites on the Internet, and by utilizing Affiliates,
\nAuthorized Shipping Outlets, distributors, dealers, VARs, resellers,
\nsubsidiaries or other third parties. To facilitate such distribution, the
\nLicense shall include the right for UPS to grant sublicenses to such Affiliates,
\nAuthorized Shipping Outlets, distributors, dealers, VARs, resellers,
\nsubsidiaries and third parties to Use the Client Software and Custom Client
\nSoftware for demonstration purposes. UPS shall license the Client Software and
\nCustom Client Software to end users in any manner which is commercially
\nacceptable for products distributed over or for use in connection with the
\nInternet, including without limitation, by written license agreements, which may
\nbe either signed by UPS and the end user or included in the package containing
\nthe product, or by the inclusion of license terms within copies of the Client
\nSoftware and\/or Custom Client Software whereby the end user signifies his or her
\nacceptance by “clicking” on an “accept” button or performing some other action;
\nPROVIDED, HOWEVER, that each end user must sign a license agreement, open a
\npackage containing the Client Software and\/or Custom Client Software, “click” on
\nan “accept” button or perform some other action, at a minimum, designed to
\nsignify its acceptance of the license terms and conditions with respect to such
\nSoftware which are set out in Exhibit E hereto. The parties acknowledge that in
\nthe event future versions of the Client Software or Custom Client Software
\nincorporate additional software (which may be royalty-bearing or subject to
\nother limitations on use or distribution), or otherwise requires modification or
\nsupplementation of the terms set forth in Exhibit E in order to reflect the
\nnature of such versions, the parties will mutually agree on any required
\namendments to Exhibit E. Tumbleweed acknowledges that UPS is not guarantying
\nthe enforceability of such terms and conditions against end users nor that the
\nmethods of purported acceptance described above shall ultimately be found to
\nconstitute acceptance of such terms and conditions. UPS shall not, nor shall it
\nauthorize any third party to, decompile, reverse engineer or disassemble the
\nClient Software and\/or Custom Client Software.<\/p>\n
c. OWNERSHIP OF CUSTOM SOFTWARE. Unless otherwise stated in the
\napplicable Specifications, as between UPS and Tumbleweed, Tumbleweed shall own
\nall right, title and interest in and to all developments made during the course
\nof performing any work under this Agreement and UPS shall enjoy those licenses
\nprovided for in this Agreement with respect to such developments. If the
\nparties mutually agree that UPS shall own one or more components of the Custom
\nSoftware produced during the course of Tumbleweed’s performance of a Phase,
\nthen, with respect to such components (and not with respect to any other
\ncomponent), the following terms apply:<\/p>\n
i. UPS INVENTIONS. Tumbleweed assigns and agrees to assign to UPS
\n all of Tumbleweed’s and its Associates’ entire right, title and
\n interest in and to the UPS Inventions, and any patents that may
\n be granted thereon in any country of the world. Tumbleweed shall
\n promptly share with UPS all information relating to such UPS
\n inventions. Tumbleweed also agrees to<\/p>\n
UPS\/Tumbleweed Confidential 16 December 18, 1997<\/p>\n
acquire from its Associates who perform work hereunder, such
\n assignments, rights and covenants as to assure that UPS shall
\n receive the rights provided for in this Section 5(c)(i).
\n Tumbleweed agrees that upon UPS’s request it will promptly have
\n its Associates sign all papers and perform all acts which may be
\n reasonably requested by UPS to enable UPS at its expense to file
\n and prosecute applications for patents on such UPS Inventions,
\n and to maintain patents granted thereon, provided that UPS shall
\n compensate Tumbleweed for the costs incurred by Tumbleweed that
\n are associated with such activities.<\/p>\n
ii. UPS INFORMATION. Tumbleweed agrees to disclose and promptly
\n furnish to UPS any and all UPS Information originated by
\n Tumbleweed or any of its Associated hereunder. UPS shall own all
\n right, title and interest in and to the UPS Information created
\n by Tumbleweed hereunder, including all copyrights and proprietary
\n rights therein. Tumbleweed expressly acknowledges that the
\n parties have agreed that all aspects of the UPS Information and
\n all work in process in connection therewith are to be considered
\n “works made for hire” within the meaning of the Copyright Act of
\n 1976, as amended (the “Act”), and that UPS is to be the “author”
\n within the meaning of such Act. All such copyrightable UPS
\n Information, as well as all copies of such UPS Information in
\n whatever medium fixed or embodied, shall be owned exclusively by
\n UPS as its creation, and Tumbleweed hereby expressly disclaims
\n any interest in any of them.<\/p>\n
In the event (and to the extent) that the UPS Information created by
\n Tumbleweed hereunder or any part or element thereof is found as a
\n matter of law not to be a “work made for hire” within the meaning of
\n the Act, Tumbleweed hereby conveys and assigns to UPS the sole and
\n exclusive right, title and interest in the ownership to all such UPS
\n Information, and all copies of any of them, without further
\n consideration, and agrees to assist UPS to register, and from time to
\n time enforce (at UPS’s expense), all copyrights relating to the UPS
\n Information created hereunder in any and all countries. Tumbleweed
\n shall place a copyright notice in favor of UPS on the UPS Information
\n at UPS’s request.<\/p>\n
d. OWNERSHIP OF CUSTOMER DATA. Tumbleweed agrees that all records,
\nfiles, reports and other data relating to UPS’s customers which are received,
\nused or stored in connection with the Messaging Service or otherwise are the
\nexclusive property of UPS and its customers and that Tumbleweed hereby waives
\nany interest, title, lien or right to any such data or records. Customer
\nrecords and other data shall not be (i) used by Tumbleweed other than in
\nconnection with supporting UPS’s offering of the Messaging Service, (ii)
\ndisclosed, sold, assigned, leased, or otherwise provided to third parties by
\nTumbleweed, or (iii) commercially exploited by or on behalf of Tumbleweed, its
\nemployees, subcontractors or agents.<\/p>\n
UPS\/Tumbleweed Confidential 17 December 18, 1997<\/p>\n
e. TUMBLEWEED TRADEMARKS AND TRADE NAMES. Tumbleweed hereby grants
\nto UPS and its Affiliates and Authorized Shipping Outlets worldwide,
\nnon-exclusive, non-transferable, non-sublicenseable, [ * ] licenses to
\nuse and reproduce the Tumbleweed Marks in their advertising and promotion of the
\nMessaging Service and\/or the Software, including without limitation, the right
\nto brand the Messaging Service by referencing the Tumbleweed Mark “Tumbleweed
\nSoftware.” Tumbleweed acknowledges that (A) the licenses granted pursuant to
\nthis Section 5(e) in no way, form or manner create or infer any obligation on
\nthe part of UPS to use any of the Tumbleweed Marks, and (B) UPS shall have sole
\ndiscretion and control as to the size, location and position of its usage of the
\nTumbleweed Marks, understanding that the Tumbleweed Marks will be prominently
\nand reasonably displayed. UPS acknowledges Tumbleweed’s ownership and exclusive
\nrights in the Tumbleweed Marks, and UPS’s use of the Tumbleweed’s ownership and
\nexclusive rights in the Tumbleweed Marks, and UPS’s use of the Tumbleweed Marks
\nshall inure to the benefit of Tumbleweed. UPS shall not adopt or attempt to
\nregister any of the Tumbleweed Marks, as a whole, or adopt, use or attempt to
\nregister any mark which is confusingly similar to any of the Tumbleweed Marks,
\nas a whole. For the period during which UPS is using any of the Tumbleweed
\nMarks, Tumbleweed shall have the right to monitor and observe UPS’s operation of
\nthe Messaging Service for the purpose of protecting and maintaining the
\nstandards of quality established by Tumbleweed for products sold and services
\nrendered under the Tumbleweeds Marks as of the date UPS exercised its rights.
\nIf UPS does not operate the Messaging Service in a manner consistent with
\nTumbleweed’s standards of quality, UPS shall be in breach of the terms of this
\nSection 5(e). Tumbleweed may immediately terminate this trademark license if
\nUPS breaches any of the terms of this Section 5(e) and does not either (i) cure
\nsuch breach within thirty (30) days after receiving notice thereof, or (ii)
\ndiscontinue any conduct in breach of the terms of this Section 5(e). UPS shall
\ninclude the symbols TM and -Registered Trademark- as appropriate at the first
\ninstance of each use of each Tumbleweed Mark. UPS shall provide, at its own
\nexpense, samples of Tumbleweed Mark usage for Tumbleweed to inspect from time to
\ntime upon written request from Tumbleweed.<\/p>\n
f. DEVELOPER KITS (AND LOCALIZATION KITS). Tumbleweed shall deliver
\nto UPS, at no charge therefor, such number of developer kit(s) and\/or
\nlocalization kit(s) as shall be reasonably requested by UPS, which
\ndeveloper\/localization kit(s) shall be comprised of the Software described in
\nExhibit C hereto and successor versions thereof, and any other
\ndeveloper\/localization kit software made generally commercially available by
\nTumbleweed and successor versions thereof (collectively, the “Developer Kit
\nSoftware”), solely to permit UPS’s development of localized versions of the
\nSoftware and\/or applications to be deployed as part of or in support of the
\nMessaging Service. The License set forth in Sections 5(a) and (b) above
\nincludes the right to modify, maintain, support, update and create Derivative
\nWorks of the Software, to the extent enabled by the Developer Kit Software.
\nTumbleweed grants to UPS a non-exclusive, perpetual, irrevocable right and
\nlicense (the “Developer Kit License”) to Use the Developer Kit Software for
\npurposes of the development of localized versions of the Software and\/or
\napplications to be deployed as part of or in support of the Messaging Service,
\nand for testing the operation of such localized versions and applications to be
\ndeployed in connection with the Messaging Service, and to sublicense such right,
\nsubject to mutually agreed upon<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 18 December 18, 1997<\/p>\n
minimum terms and conditions, solely to permit third party developers working
\ndirectly on UPS’s behalf to create localized versions of the Software and\/or
\napplications for the Messaging Service. The Developer Kit License granted
\nhereunder specifically permits UPS and those third party developers working
\ndirectly on UPS’s behalf, in addition to their other rights hereunder, to
\ndevelop localized versions of the Software and\/or applications for the Messaging
\nService which may utilize or require the use of the Developer Kit Software, or a
\nportion thereof, to operate (“Applications”), and to use or license or otherwise
\npermit third parties to use such Applications without royalty or payment to
\nTumbleweed, except as expressly provided hereunder, even though such
\nApplications may contain portions or Derivative Works of the Developer Kit
\nSoftware. Except as set forth in this subsection (f), UPS shall have no right
\nto further sublicense, transfer, lease, sell, or in any way dispose of the
\nDeveloper Kit Software for any purpose other than as provided for in this
\nsubsection (f), and furthermore agrees to direct any third parties who request
\nsuch Developer Kit Software to create software in support of the Standard
\nSoftware to Tumbleweed in order to procure licenses therefor directly from
\nTumbleweed. UPS shall not, nor shall it authorize any third party to,
\ndecompile, reverse engineer or disassemble the Developer Kit Software.<\/p>\n
Notwithstanding anything to the contrary set forth in this Agreement,
\nneither UPS’s development or localized versions of the Software nor its creation
\nof Applications relating to the Software, in either case prepared utilizing the
\nDeveloper Kit Software and\/or APIs furnished by Tumbleweed, will, in any way,
\nform or manner, reduce or otherwise modify Tumbleweed’s Maintenance Services or
\nother obligations hereunder with regard to the base Software, provided, however,
\nthat Tumbleweed’s obligations shall not extend to support of (i) the
\nApplications, (ii) localizations that have not been successfully certified by
\nTumbleweed as set forth below, or (iii) modifications made to the base Software
\nto the extent not enabled by the Developer Kit Software. For quality control
\npurposes, however, UPS may submit each localized version to Tumbleweed, solely
\nfor the purpose of Tumbleweed’s testing and certification thereof, prior to
\nimplementing same in support of the Messaging Service. Tumbleweed shall perform
\nsuch testing on a mutually agreeable schedule after the delivery of each
\nlocalized version of the Software, for which testing UPS shall reimburse
\nTumbleweed for any costs and\/or expenses (including personnel costs) reasonably
\nincurred by Tumbleweed in connection therewith, and either certify that such
\nlocalized version is in compliance with Tumbleweed’s quality control
\nrequirements (and that UPS may implement the localized version without affecting
\nany of Tumbleweed’s Maintenance Services or other obligations hereunder), or
\nthat such localized version is not in compliance with Tumbleweed’s quality
\ncontrol requirements, in which event Tumbleweed shall so notify UPS in writing
\nspecifying the nature of such non-compliance and including sufficient details to
\npermit UPS to understand such non-compliance.<\/p>\n
Furthermore, UPS may submit Applications to Tumbleweed for the limited
\npurpose of permitting Tumbleweed to test whether such Applications are
\ncompatible with the APIs, and Tumbleweed shall perform such testing on a
\nmutually agreeable schedule, for which testing UPS shall reimburse Tumbleweed
\nfor any costs and\/or expenses (including personnel costs) reasonably incurred by
\nTumbleweed in connection therewith.<\/p>\n
UPS\/Tumbleweed Confidential 19 December 18, 1997<\/p>\n
Tumbleweed agrees to use its commercial discretion to make the
\nDeveloper Kit Software generally commercially available pursuant to a developer
\nsupport program designed to encourage third party developers to develop high
\nquality applications in support of, and localized versions of, the Standard
\nSoftware, and which will be conducted consistent with similar programs
\nmaintained by comparable applications software vendors (e.g., [ * ]<\/p>\n
g. INTERFACE INFORMATION. Tumbleweed will disclose UPS
\n[ * ], any and all APIs, communication protocols, interface
\nspecifications or other such documentation (collectively, “APIs”) necessary
\nto enable UPS to write Applications which interface\/communicate with the
\nSoftware used by UPS to operate the Messaging Service. Tumbleweed grants to
\nUPS a non-exclusive, perpetual, irrevocable right and license (the “API
\nLicense”) to internally Use the APIs solely to develop Applications which
\ninterface\/communicate with the Software used by UPS to operate the Messaging
\nService, and for testing the operation of such Applications and to sublicense
\nsuch right, subject to the minimum terms and conditions of this Agreement
\nsolely to permit third party developers working directly on UPS’s behalf to
\ncreate Applications which interface\/communicate with the Software used by UPS
\nto operate the Messaging Service. The API License granted hereunder
\nspecifically permits UPS and the third party developers working directly on
\nUPS’s behalf, in addition to their other rights hereunder, to develop
\nApplications which may utilize or require the use of any of the APIs to
\ninterface\/communicate with the Software, and to use or license or otherwise
\npermit third parties to use such Applications without royalty or payment to
\nTumbleweed, even though such Applications will take advantage of such APIs to
\ninterface\/communicate with the Software. Except as set forth in this
\nsubsection (g), UPS shall have no right to further sublicense, transfer,
\nlease, sell, or in any way dispose of the APIs for any purpose other than as
\nprovided for in this subsection (g), and furthermore agrees to direct any
\nthird parties who request such APIs to create software in support of the
\nStandard Software to Tumbleweed in order to procure licenses therefor
\ndirectly from Tumblewed. UPS shall not (except as expressly provided above),
\nnor shall it authorize any third party to, disclose, decompile, reverse
\nengineer or disassemble the APIs nor remove, modify or obscure any
\nproprietary rights notices in the APIs (so long as no such notices are
\nvisually perceptible to end user customers (as opposed to third party
\ndevelopers) of UPS).<\/p>\n
Tumbleweed shall have an ongoing duty, during the term of this
\nAgreement, to update its provision of APIs, as required pursuant to this Section
\n5(g), to cover Enhancements to the Software which are made by Tumbleweed from
\ntime to time. In addition, Tumbleweed’s commitment to establish a developer
\nsupport program, as provided for in Section 5(f) above, shall also extend to the
\nAPIs contemplated in this Section 5(g).<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 20 December 18, 1997<\/p>\n
h. DOCUMENTATION LICENCES. Subject to the provisions of Section 10
\nhereof, Tumbleweed further grants to UPS and its Affiliates and Authorized
\nShipping Outlets, during the term of this Agreement, the following
\nnon-exclusive, worldwide rights and licenses: (i) to access, reproduce, display
\nand otherwise use the Documentation and other written materials furnished to UPS
\nhereunder; (ii) to modify, update and\/or create Derivative Works of such
\nDocumentation and other written materials; and (iii) to sublicense, lease,
\nsublease and distribute such Documentation and other written materials and to
\npermit their respective customers to enjoy the same rights and licenses with
\nrespect thereto as are set forth in (i) above.<\/p>\n
i. UPS INTELLECTUAL PROPERTY. UPS hereby grants to Tumbleweed a
\nlimited, non-exclusive, non-transferable, fully-paid license to use those
\nportions of the trademarks, service marks, other indicia of origin, copyrighted
\nmaterial and art work owned or licensed by UPS and any additional technical
\ninformation (the “UPS Intellectual Property”) which are deliverable by UPS to
\nTumbleweed solely to the extent necessary for Tumbleweed to develop the Customer
\nSoftware hereunder. Tumbleweed shall not use the UPS Intellectual Property for
\nany other purpose.<\/p>\n
j. NO OTHER LICENSES. Except as otherwise provided in this
\nAgreement and\/or in the exhibits hereto, both parties and their respective
\nsuppliers shall retain all rights, title and interest in and to all copyrights,
\ntrademarks, trade secrets, patents and all other industrial and intellectual
\nproperty embodied in or appurtenant to the Software and\/or any other materials
\nor information provided by any such parties hereunder. There are no implied
\nlicenses under this Agreement, and any rights no expressly granted hereunder are
\nreserved by the parties or their respective suppliers.<\/p>\n
6. FEES AND PAYMENT.<\/p>\n
a. LICENSE FEE. As consideration for the License to the Software
\ngranted herein, and for the rights granted in Section 15, UPS shall pay to
\nTumbleweed a license fee of [ * ] (the “License Fee”) in the following
\ninstallments:<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 21 December 18, 1997<\/p>\n
i. [ * ] upon the execution and delivery of the memorandum
\n of understanding between the parties, dated [ ]*,
\n receipt of which payment is hereby acknowledged by Tumbleweed;<\/p>\n
ii. [ * ] upon the execution and delivery of this Agreement;<\/p>\n
iii. [ * ] upon UPS’s acceptance of the Software associated
\n with Phase I of this Agreement pursuant to Section 4(b) hereof;
\n and<\/p>\n
iv. [ * ] upon UPS’s acceptance of the Software associated
\n with Phase II of this Agreement pursuant to Section 4(b) hereof.<\/p>\n
All such payments due hereunder shall be invoiced by Tumbleweed to UPS, and
\nshall be payable within fifteen (15) days after its receipt.<\/p>\n
b. ROYALTIES. As additional consideration for the License to the
\nSoftware granted herein, UPS shall pay Tumbleweed as a royalty (the “Royalty”)
\nthe following percentage of the [ * ](hereinafter defined) actually
\nreceived by UPS and\/or its Affiliates for [ * ] by the Messaging Service
\nutilizing the Software, based upon the [ * ] processed during the term
\nof this Agreement:<\/p>\n
[ * ]<\/p>\n
As used in this Section 6(b), [ * ].<\/p>\n
c. [ * ]<\/p>\n
d. ROYALTY PAYMENTS. All Royalties shall be computed and paid to
\nTumbleweed monthly on the fifteenth (15th) day following the end of each
\ncalendar month for Net Fees received by UPS during such calendar month for
\nlicense fees for the Software [ * ]. UPS shall have the right
\nto set off, deduct, retain, or withhold from any<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 22 December 18, 1997<\/p>\n
accrued Royalties or other amounts otherwise payable hereunder, any monies due
\nby Tumbleweed hereunder and\/or credits available to UPS hereunder until such
\nmonies have been paid and\/or credits applied.<\/p>\n
e. ROYALTIES. At least monthly, a report shall be provided to
\nTumbleweed showing the basis of the computation of Tumbleweed’s Royalties. In
\nmaking such report, UPS shall be entitled to report only [ * ], the
\nNet Fees received for licenses granted with respect to the Custom Software, the
\nnumber of end users registered to use the Messaging Service as of the end of the
\napplicable month, [ * ], all of which information shall bee deemed
\nto be the Confidential Information of UPS and its Server Sublicensees.
\nTumbleweed shall be entitled, not more than once annually, to retain one of the
\n“Big 6” public accounting firms (or any other independent certified public
\naccountant, if such other independent certified public accountant is reasonably
\nacceptable to UPS) to review the books and records of UPS and any applicable
\nAffiliates relating to the Messaging Service solely for the purpose of verifying
\nthe accuracy of the Royalties calculated, paid or due to Tumbleweed under this
\nAgreement. Said certified public accountant shall inform Tumbleweed only
\nwhether all Royalties have been paid and the amount of any underpayment or
\noverpayment. Such review shall be conducted during normal business hours upon
\nreasonable notice of at least one (1) month. Upon presentation of reasonable
\nproof of underpayment or overpayment, such underpayment or overpayment shall be
\nreflected in the next monthly Royalty payment. The cost of such audit shall
\nnormally be at Tumbleweed’s expense; provided, however, that UPS will bear the
\ncost of the audit if the audit reveals any underpayment or overpayment which, in
\nthe aggregate, is greater than five percent (5%) of the amount of which was
\nactually due for the period being audited. If the audit reveals an underpayment
\nin excess of five percent (5%) of the amount which was actually due for the
\nperiod being audited, Tumbleweed shall also have the right to conduct another
\naudit within the same twelve (12) month period.<\/p>\n
f. DEMONSTRATION AND INTERNAL USE. Notwithstanding the Royalties
\nprovided for in subsection (b) above, and notwithstanding the minimum message
\nfee provided for in subsection (c) above, UPS shall [ * ]
\nobligation (i) for any [ * ] performed by UPS’s and its Affiliates’
\nemployees sending internally generated documents via the Messaging Service, (ii)
\nfor any [ * ] performed by UPS’s and its Affiliates’ employees,
\ndistributors, dealers, VARs and resellers, and by Authorized Shipping Outlets,
\nsending documents via the Messaging Service for demonstration purposes only, or
\n(iii) for any [ * ] performed by prospective customers sending documents
\nvia the Messaging Service pursuant to limited, pre-defined evaluation plans
\nestablished by UPS from time to time, where such limited evaluation plans are
\ndesigned to increase the number of revenue generating customers of the Messaging
\nService [ * ]<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 23 December 18, 1997<\/p>\n
g. INITIAL PHASE DEVELOPMENT FEE. As consideration for the Phase I
\nand Phase II development Services rendered by Tumbleweed pursuant to Section 2
\nof this Agreement, UPS shall pay to Tumbleweed a fixed price development fee of
\n[ * ] (the “Initial Phase Development Fee”). The Initial Phase
\nDevelopment Fee shall be payable in installments in accordance with the
\nmilestone payment schedule set forth in the Implementation Schedule, and each
\ninstallment shall be payable upon completion of each milestone by Tumbleweed
\nand, if applicable, acceptance by UPS in accordance with Section 4. All such
\npayments due hereunder shall be invoiced by Tumbleweed to UPS.<\/p>\n
h. DEVELOPMENT FEES FOR SUBSEQUENT PHASES. Upon mutual agreement as
\nto terms and conditions (including price) for the development of Software beyond
\nthat required for Phase II of the Project, unless the parties otherwise agree to
\nthe contrary, Tumbleweed will invoice UPS, monthly in arrears, for Services
\nprovided to UPS by Tumbleweed in connection with Phases for which the agreed
\nupon Specifications therefor specify that Services performed in connection
\ntherewith are to be performed on a time and materials basis, in accordance with
\nthe daily rate and work schedule set forth in the Specifications. In the event
\nthat the parties agree to Services on a fixed price basis, Tumbleweed will
\ninvoice UPS in accordance with the schedule of payments set forth in such
\nSpecifications. For Services agreed by the parties to be provided on a time and
\nmaterials basis, Tumbleweed shall submit with each invoice, copies of time
\nreports which relate to the Services being invoiced, together with supporting
\ndocumentation for all associated reimbursable expenses, which shall be limited
\nto reasonable out-of-pocket expenses necessarily and actually incurred by
\nTumbleweed in the performance of such Services. Notwithstanding anything to the
\ncontrary contained herein, UPS shall not be liable for any charges and\/or
\nexpenses in connection with any Phase for work done on a time and materials
\nbasis in excess of the maximum dollar amount specified in the associated
\nSpecifications, unless previously authorized by UPS.<\/p>\n
i. SOFTWARE MAINTENANCE AND SUPPORT SERVICES. As consideration
\nfor the Software maintenance and support Services (excluding the services of
\nthe Dedicated Support Personnel) rendered by Tumbleweed pursuant to Section 9
\nhereof (“Maintenance Services”) for the period ending as of [ * ],
\nUPS shall pay to Tumbleweed a fee of [ * ], [ * ] of which
\nshall be due and payable upon expiration of the Warranty Period for the<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 24 December 18, 1997<\/p>\n
Phase II Software, as provided for in Section 8(a) below, and [ * ] of
\nwhich shall be paid in quarterly installments of [ * ] each, with the
\nfirst such installment becoming due and payable on [ * ]. As
\nconsideration for the Maintenance Services rendered by Tumbleweed for subsequent
\nyears, if so elected by UPS, UPS shall pay to Tumbleweed an annual fee of
\n[ * ] per year, payable in quarterly installments of [ * ]
\neach; provided, however, that in the event such Maintenance Services obligations
\nincrease (whether by inclusion of additional data centers to be supported,
\nadditional software, or the like, as long as the increased burden on
\nTumbleweed’s resources or risk can be substantiated) or the burden of providing
\nsuch Maintenance Services decreases (whether by reduced demand for telephone
\nsupport or otherwise), the parties shall meet to mutually agree upon a
\nreasonably adjustment to such fee. All payments due hereunder shall be invoiced
\nby Tumbleweed.<\/p>\n
j. DEDICATED SUPPORT PERSONNEL. As consideration for the Services
\nof the Dedicated Support Personnel, as such Services are more specifically
\ndescribed in Section 9(d), UPS shall bear [ * ] of Tumbleweed’s actual
\ncosts and expenses (including salary, employment taxes, unemployment insurance,
\nand all fees and costs normally associated with the employment of personnel or
\nhiring of independent contractors) attributable to the employment of such
\nDedicated Support Personnel. Tumbleweed shall invoice UPS on a monthly basis
\nfor the amounts required under this Section 6(j).<\/p>\n
k. EXPENSES. Where this Agreement provides that UPS shall reimburse
\nTumbleweed for various expenses incurred in connection with certain activities
\nhereunder, such expenses shall be limited to reasonable out-of-pocket expenses
\nnecessarily and actually incurred by Tumbleweed in the performance of such
\nactivities, provided that: (i) UPS has given its prior consent for any such
\nexpenses, which consent shall not be unreasonably withheld; (ii) such expenses
\nare consistent with UPS’s then-current travel and expense guidelines; and (iii)
\nif requested by UPS, Tumbleweed submits supporting documentation to UPS for such
\nexpenses. It is understood that any air transportation reimbursable hereunder
\nshall be coach-economy and that entertainment by or on behalf of Tumbleweed
\nshall be at no cost to UPS.<\/p>\n
l. COMMISSION FOR REFERRALS. In the event that UPS refers one of
\nits end user customers who has been using the Messaging Service for a period of
\nless than twenty-four (24) months and who has had a significant presence of
\nindividual users of the Messaging Service at that customer (a “Referral
\nCustomer”) to Tumbleweed, and such Referral Customer licenses software or
\nprocures services from Tumbleweed, Tumbleweed hereby agrees to pay to UPS, for<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 25 December 18, 1997<\/p>\n
such referral, a commission of [ * ] for each individual account
\nthat switches their account from the Messaging Service and [ * ] for the
\nnew accounts, of the fees actually received by Tumbleweed from such Referral
\nCustomer during the first year that such Referral Customer licenses software or
\nprocures services from Tumbleweed. All commissions shall be computed and paid
\nto UPS monthly on the fifteenth (15th) day following the end of each calendar
\nmonth for fees received by Tumbleweed from Referral Customers during such
\ncalendar month. At least monthly, a report shall be provided to UPS showing the
\nbasis of the computation of UPS’s commissions. UPS shall be entitled, not more
\nthan once annually, to retain one of the “Big 6” public accounting firms (or any
\nother independent certified public accountant, if such other independent
\ncertified public accountant is reasonably acceptable to Tumbleweed) to review
\nthe books and records of Tumbleweed relating to such transactions solely for the
\npurpose of verifying the accuracy of the commissions paid or due to UPS under
\nthis Agreement. Said certified public accountant shall inform UPS only whether
\nall commissions have been paid and the amount of any underpayment or
\noverpayment. Such review shall be conducted during normal business hours upon
\nreasonable notice of at least one (1) month. Upon presentation of reasonable
\nproof of underpayment or overpayment, such underpayment or overpayment shall be
\npaid to UPS or refunded by UPS, respectively. The cost of such audit shall
\nnormally be at UPS’s expense; provided, however, that Tumbleweed will bear the
\ncost of the audit if the audit reveals any underpayment or overpayment which, in
\nthe aggregate, is greater than five percent (5%) of the amount which was
\nactually due for the period being audited. If the audit reveals an underpayment
\nin excess of five percent (5%) of the amount which was actually due for the
\nperiod being audited, UPS shall also have the right to conduct another audit
\nwithin the same twelve (12) month period.<\/p>\n
m. SALES AND USE TAXES. All fees stated herein and Royalty payments
\nmade hereunder exclude, and UPS shall pay, any sales, use, or similar tax,
\nfederal state or local, that may be assessable in connection with this
\nAgreement, exclusive of taxes based on or measured by Tumbleweed’s net income.<\/p>\n
n. PAYMENT TERMS. All fees stated in, and shall be made in, U.S.
\nDollars. Unless otherwise specified, all payments hereunder (including, without
\nlimitation, Royalty payments) shall be due and payable within fifteen (15) days
\nof the date of UPS’s receipt of Tumbleweed’s invoice; provided, however, that
\nRoyalty payments shall be made in accordance with Section 9(d).<\/p>\n
o. PAYMENT DISCREPANCIES. UPS shall not be obligated to make
\npayments required hereunder to the extent and for the duration that such
\npayments are in dispute in good<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 26 December 18, 1997<\/p>\n
faith; provided, however, that in the event of any such discrepancy or dispute,
\nUPS shall be required to make payments required hereunder on any undisputed
\nportion of any properly rendered invoice for which payment is due. In the event
\nthat any payment discrepancy or dispute may be resolved by audit, then
\nTumbleweed shall have the right to institute an audit pursuant to subsection (e)
\nabove to verify the accuracy of the amounts paid or due to Tumbleweed under this
\nAgreement. If the audit confirms an underpayment by UPS, UPS shall pay to
\nTumbleweed the amount of such underpayment within thirty (30) days of the date
\nof UPS’s receipt of auditor’s written findings. If UPS fails to make such
\npayment within such thirty (30) day period, Tumbleweed may terminate this
\nAgreement without liability for such termination. In the event such discrepancy
\nor dispute is not susceptible to resolution by accounting audit, the parties
\nshall engage in the escalation procedures set forth in Section 16(b).<\/p>\n
p. TIME AND MATERIALS FEES. For Services provided by Tumbleweed on
\na time and materials basis, the fees for such Services will be at commercially
\nreasonable rates.<\/p>\n
7. MARKETING, DISTRIBUTION AND OFFERING OF MESSAGING SERVICE.<\/p>\n
a. MARKETING PLAN. UPS will, in its sole discretion, develop a
\nmarketing plan for the Messaging Service, including development of brand name
\nidentities, and identifying likely markets, distribution channels, and pricing
\nstructures for the Messaging Services; provided, however, that UPS will consult
\nwith Tumbleweed with respect to the promotion and advertising of the Messaging
\nService and that UPS will not market the Messaging Service as “free.” Subject
\nto the foregoing, UPS shall have the sole determination of the marketing
\nstrategies to be followed, including the extent to which UPS will use the
\nTumbleweed Marks in connection with such marketing; provided, however, that,
\n[ * ] the Tumbleweed Mark “Tumbleweed Software” [ * ]
\nof advertising, collateral and promotional materials published by UPS and\/or its
\nAffiliates and Authorized Shipping Outlets in relationship to UPS’s “Document
\nExchange” service offering, [ * ] shall be within UPS’s sole
\ndiscretion. Notwithstanding the foregoing commitment, UPS shall have the right
\nto immediately discontinue its use of any or all of the Tumbleweed Marks,
\n[ * ] of advertising, collateral and promotional materials, in the
\nevent that any of the Persons or entities identified in Section 15 of this
\nAgreement begin marketing products and\/or services involving Internet or
\nIntranet delivery systems utilizing any of the Tumbleweed Marks, or in the event
\nthat any act, omission or misrepresentation on the part of Tumbleweed or any of
\nits officers, directors, agents or employees directly and negatively impacts
\nupon the goodwill associated with any of UPS’s trade names, trademarks and\/or
\nservice marks, as determined by UPS in its sole but reasonable discretion.
\nTumbleweed agrees to include a direct link to the<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 27 December 18, 1997<\/p>\n
Messaging Service on Tumbleweed’s “Posta” homepage on the World Wide Web. In
\naddition, Tumbleweed agrees to participate in major sales calls by UPS, as
\nreasonably requested by UPS. The foregoing shall not in any way limit UPS’s
\nobligations, pursuant to Section 7(c) below, to display the “Tumbleweed Posta”
\nmark in the Software.<\/p>\n
b. DISTRIBUTION OF CLIENT SOFTWARE. The License granted pursuant
\nto Section 5(b) of the Agreement permits UPS to reproduce the client-based
\nportion of the Software, which reproduction may be in any form and on any media
\ndeemed suitable by UPS for distribution. UPS shall not be obligated to offer
\nthe Messaging Service in all formats, or for all computer systems, but shall
\nselect those which, in its judgment, are deemed most suitable for the Messaging
\nService. All costs of packaging and reproduction of the client-based Software
\nshall be borne by UPS, and subject to compliance with all license restrictions
\nin this Agreement, UPS shall have complete discretion in selecting the parties
\nby whom and the circumstances under which and the means by which the
\nclient-based Software is reproduced for distribution, including without
\nlimitation, by making the client-based Software available for download from one
\nor more FTP sites on the Internet.<\/p>\n
c. TRADEMARK USAGE. Unless and until any of the Persons
\nidentified in Section 15 of this Agreement begin marketing products and\/or
\nservices involving Internet or Intranet delivery systems utilizing any of the
\nTumbleweed Marks, and unless and until any act, omission or misrepresentation on
\nthe part of Tumbleweed or any of its officers, directors, agents or employees
\ndirectly and negatively impacts upon the goodwill associated with any of UPS’s
\ntrade names, trademarks and\/or service marks, as determined by UPS in its sole
\nbut reasonable discretion, UPS agrees Tumbleweed display the Tumbleweed Mark
\n“Tumbleweed Posta” in the Software, and in the HTML pages created thereby,
\nprovided that the manner in which such Tumbleweed Mark appears (e.g., size,
\nlocation, etc.) shall be within UPS’s sole but reasonable discretion, subject to
\nTumbleweed’s reasonable approval.<\/p>\n
d. END USER SUPPORT. UPS shall assume sole responsibility for all
\nfirst level customer support of all sublicensees and end user customers of the
\nMessaging Service, at its own expense; provided, however, that Tumbleweed agrees
\nto promptly provide UPS with second level support to assist UPS with customer
\nsupport problems which cannot be dealt with at the first level due to their
\ncomplexity or their unusual nature, or due to errors or other malfunctions in
\nthe Software which can only be corrected by Tumbleweed. Tumbleweed will
\nredirect to UPS any customer support questions it receives from end user
\ncustomers of the Messaging Service.<\/p>\n
e. MARKETING FLEXIBILITY. UPS shall have full freedom and
\nflexibility in its marketing effort for the Messaging Service, including,
\nwithout limitation, the freedom to decide its methods of marketing and pricing,
\nand to decide whether to market or discontinue marketing the Messaging Service
\nor any particular subset of the Messaging Service. Subject to complying with
\nthe express requirements of this Agreement, Tumbleweed shall have full freedom
\nand flexibility in its support of UPS’s marketing effort for the Messaging
\nService, including, without<\/p>\n
UPS\/Tumbleweed Confidential 28 December 18, 1997<\/p>\n
limitation, the freedom to decide its methods of marketing support, and to
\ndecide whether to support or discontinue supporting UPS’s marketing of the
\nMessaging Service or any particular subset of the Messaging Service. Neither
\nparty makes any guarantee or commitment as to the success of its marketing
\neffort, and each party agrees that the other party has no obligation to it
\nwhatsoever other than as specifically provided in this Agreement.<\/p>\n
f. ADDITIONAL MARKETING AND SALES SUPPORT. For the period ending
\n(1) year after the Commercial Availability Date, in addition to its other
\nmarketing and sales support obligations hereunder, Tumbleweed shall provide the
\nServices set forth in Exhibit G hereto.<\/p>\n
8. WARRANTIES. Tumbleweed hereby warrants and represents to UPS as
\nfollows:<\/p>\n
a. SOFTWARE. All Software and Documentation delivered pursuant to
\nthis Agreement will materially conform to the Detailed Design Specifications
\ntherefor. In the event of any breach of the foregoing warranty, Tumbleweed
\nshall use commercially reasonable efforts to promptly correct or replace the
\nSoftware so that it materially conforms with the Detailed Design Specifications.
\nAs the Internet transmission medium and servers connected thereto are not
\nentirely free form unauthorized access, Tumbleweed does not warrant that
\noperation of the Software will be uninterrupted, secure, or error-free, or that
\nall errors will be corrected, and further does not warrant that the information
\nstored or transmitted by the Software will be free from unauthorized
\nmodification. The warranty set forth in this Section 8(a) shall remain in
\neffect for the period ending [ * ] following acceptance of Phase II
\nof the Project pursuant to Section 4(b) hereof (the “Warranty Period”), and for
\nthe period during which Tumbleweed is providing continuing support for the
\nSoftware pursuant to Section 9 below (the “Support Period”). The foregoing
\nwarranty does not cover non-conformities due to: (a) any modification of the
\nSoftware performed by any Person other than Tumbleweed or any of its Associates
\n(except for localizations certified by Tumbleweed as set forth in Section 5(f)
\nand except for modifications to the base Software enabled by the Developer Kit
\nSoftware ); (b) operation of the Software under environmental conditions outside
\nof normal operating ranges for computer hardware for UPS’s data center; (c) any
\nuse of the Software on a system that does not meet Tumbleweed’s minimum
\nstandards for such Software, to the extent such minimum standards are included
\nin the Specifications; and (d) hardware or non-Tumbleweed software (where such
\nnon-conformity is due solely to the operation of such hardware or non-Tumbleweed
\nsoftware).<\/p>\n
b. COMPATIBILITY. All Enhancements to the Software furnished
\nhereunder will be implemented in such a manner as to maintain backward
\ncompatibility with the immedi-<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 29 December 18, 1997<\/p>\n
ately preceding two (2) versions, and all versions of the Software furnished
\nhereunder and\/or released within the previous year, and with any and all
\nassociated interfaces within the Software to other vendors’; software and
\nhardware, as provided for in Section 5(g) hereof, in Exhibit C hereto, or in the
\nDetailed Design Specifications, so that such previous versions or interfaces
\nshall continue to be operable with the Software as Enhanced, in materially the
\nsame manner and with materially equivalent performance as prior to the
\nEnhancement; provided, however, that Tumbleweed shall have satisfied such
\nobligation with respect to the preservation of an interface if it furnishes to
\nUPS, as an alternative to backward compatibility, the software retrofit(s)
\nnecessary to preserve the functionality of applications written to such previous
\ninterface. As used in this subsection (b), a “version” is any version of the
\nStandard Software designated, in Tumbleweed’s sole but reasonable discretion, by
\na change in the version number to the left of the first decimal point. On a
\ncase by case basis, UPS agrees to consider, in good faith, reducing Tumbleweed’s
\ntwo (2) version backward compatibility commitment to one (1) version for a
\nparticular version release; provided, however, that no such reduction shall be
\ntaken or held to extend to any subsequent version of the Software released by
\nTumbleweed hereunder.<\/p>\n
c. SERVICES. The work to be performed hereunder shall be of
\nprofessional quality and will conform to generally accepted standards for
\nsoftware in the software development and software support fields.<\/p>\n
d. Intentionally omitted.<\/p>\n
e. RELIABILITY. During the Warranty Period and subsequent Support
\nPeriod, when UPS elects to secure the Services of the DSP at the Supported
\nDatacenter(s), in addition to the individual performance standards for the
\nSoftware set forth in the Detailed Design Specifications, Tumbleweed hereby
\nrepresents and warrants to UPS that the Software operating at such Supported
\nDatacenter(s) shall on an ongoing basis, operate without unresolved Critical or
\nMajor Defects (“Uptime”), measured on a monthly basis, for an average of
\n[ * ]. For the purposes of determining Uptime, the following
\nformula shall be used:<\/p>\n
Uptime = Unit Hours of Operation minus Downtime
\n (to be expressed ————————————–
\n as a percentage) Unit Hours of Operation<\/p>\n
For the purposes of this Section 8(e), “Unit Hours of Operation” shall mean
\ntwenty-four (24) hours per day, seven (7) days per week and “Downtime” shall
\nmean that period of time when the Messaging Service at the Supported
\nDatacenter(s) is inoperable (unavailable) for reasons<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 30 December 18, 1997<\/p>\n
attributable to the Software. Downtime for each incident shall commence from
\nthe time UPS has made a BONA FIDE attempt to notify Tumbleweed (or the DSP) that
\nthe Messaging Service at the Supported Datacenter(s) is inoperable for reasons
\nattributable to the Software, and shall continue until the Messaging Service at
\nthe Supported Datacenter(s) is restored to fully operable condition, but
\nDowntime shall specifically exclude any time (x) required to perform scheduled
\nmaintenance upgrades (which shall be scheduled by UPS during non-peak hours for
\nthe Messaging Service), or (y) spent as a result of any delay by UPS in
\nproviding Tumbleweed or its DSP with access to the hardware and software at the
\nSupported Datacenter(s). UPS will consider, in good faith, any recommendations
\nmade by Tumbleweed’s DSP(s) with respect to the operation of the Supported
\nDatacenter(s), where such recommendations shall be limited to the requirements
\nof operating a data center for the Software in a professional manner consistent
\nwith generally accepted standards for data center operation (including, but not
\nlimited to, the operation of redundant “hot” servers for system integrity,
\nmultiple data line access, regular backups, and the like). At a minimum, UPS
\nshall implement (i) the operation of redundant “hot” servers, (ii) automatic
\nregular backups, and (iii) automatic switching to redundant servers in the event
\nof a networking or hardware failure (the “Minimum Conditions”).<\/p>\n
f. Intentionally omitted.<\/p>\n
g. LOCKS. Except to the extent disclosed in the applicable
\nSpecifications, Tumbleweed has not inserted, and will not insert, in the
\nSoftware any lock, clock, timer, counter, copy protection feature, CPU serial
\nnumber reference, “Trojan horse,” or other device which is intended to (i)
\ndisable or erase all or any part of the Software; (ii) prevent UPS or its
\nAffiliates from fully utilizing all or any part of the Software, or prevent
\nUPS’s customers for fully utilizing all or any part of the Client Software
\nand\/or Custom Client Software; or (iii) require action or intervention by
\nTumbleweed or any other Person to allow UPS or its Affiliates, or their
\nrespective customers, to utilize all or any part of the Software on the type of
\ncomputer equipment indicated in Exhibits A and B hereto.<\/p>\n
h. VIRUSES. Tumbleweed has used and will use all commercially
\nreasonable efforts to ensure that each copy of the Software delivered pursuant
\nto this Agreement is free of any computer “viruses.”<\/p>\n
i. MILLENNIUM. Tumbleweed warrants to UPS (and not to any other
\nparties) that Tumbleweed will use commercially reasonable efforts to ensure that
\nthe Software will create, store, process, compare, calculate, sequence and
\noutput data relating to (and including) dates on or after January 1, 2000,
\nwithout producing inaccurate results. The foregoing warranty only applies to
\nerrors that are specifically attributable to date-specific data; if such errors
\nwould be encountered with non-date-specific data, such errors are covered solely
\nby the other warranty and maintenance provisions of this Agreement. While the
\nexclusions applicable to such other warranty and maintenance provisions also
\napply to this warranty, UPS acknowledges that inaccurate results also could be
\ncaused by software and hardware being used with the Software (including without
\nlimitation the BIOS or the operating system), and such inaccurate<\/p>\n
UPS\/Tumbleweed Confidential 31 December 18, 1997<\/p>\n
results are not covered by the foregoing warranty. Any enhancement required to
\nenable that the Software to comply with this warranty will be considered part of
\nand covered under the maintenance provisions of this Agreement at no additional
\ncharge to UPS.<\/p>\n
j. WARRANTY DISCLAIMER. EXCEPT AS SET FORTH IN THIS AGREEMENT,
\nTUMBLEWEED AND ITS SUPPLIERS DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
\nINCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY,
\nFITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.<\/p>\n
9. SOFTWARE SUPPORT SERVICES. Tumbleweed shall provide Maintenance
\nServices pursuant to this Section 9 for the period ending as of December 31,
\n1999, and on a year to year basis thereafter (collectively, the “Support
\nPeriod”), unless and until terminated by UPS upon at least ninety (90) days’
\nwritten notice to Tumbleweed prior to the commencement date of the next annul
\nSupport Period. Tumbleweed agrees to make the Maintenance Services available to
\nUPS for the term of this Agreement.<\/p>\n
a. NOTIFICATION OF DEFECTS. Tumbleweed will promptly (i) notify
\nUPS of any defects or malfunctions in the Software or Documentation of which it
\nlearns from any source and which it reasonably expects to lead to a Critical
\nDefect or Major Defect, (ii) use commercially reasonable efforts to correct any
\nsuch defects or malfunctions, and (iii) upon the earliest availability of such
\ncorrections, provide UPS with corrected copies of same.<\/p>\n
b. ENHANCEMENTS. Tumbleweed will promptly provide to UPS, on or
\nbefore the date on which any such Enhancement is made generally available to any
\nof Tumbleweed’s other customers, copies of the Software and Documentation
\nrevised to reflect any Enhancements to the Standard Software which are to be
\nmade generally available to Tumbleweed’s other customers, including, without
\nlimitation, modifications to the Software which can increase the speed,
\nefficiency or ease of operation of the Software or add additional functionality
\nor capabilities to or otherwise improve the functions of the Software, and
\nmodifications to the Software which support new protocols, new operating systems
\nand\/or new releases of the operating systems and other third party software with
\nwhich the Software is designed to operate or interface. In the event that
\nTumbleweed develops an Enhancement for which it will owe a royalty based on the
\ndistribution of such Enhancement (a “Royalty Enhancement”), Tumbleweed agrees to
\noffer the Royalty Enhancement to UPS on terms [ * ], and UPS
\nagrees to pay such royalty, [ * ] based solely upon UPS’s use
\nof the Royalty Enhancement, in the event UPS elects to license such Royalty
\nEnhancement. Solely<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 32 December 18, 1997<\/p>\n
with respect to the migration from version 1.0 of the Standard Software to
\nversion 2.0 of the Standard Software, Tumbleweed shall perform [ * ]
\nmodifications necessary to the Custom Software furnished hereunder,
\n[ * ] charge to UPS, to ensure that such Custom Software shall
\ncontinue to be operable with the Software as Enhanced, in materially the same
\nmanner and with materially equivalent performance as Custom Software
\nassociated with version 1.0 of the Standard Software. Further, Tumbleweed
\nhereby represents and warrants to UPS that version 2.0 of the Standard
\nSoftware, and the modified version of the Custom Software provided pursuant
\nto the previous sentence, shall have equivalent or greater functionality and
\nperformance as version 1.0 of the Standard Software, and Custom Software
\nassociated therewith, when operated on (A) SUN Ultra servers, with (B) the
\nSUN Solaris 2.6 operating system or above, with (C) Oracle 7.3 database (with
\npatch) or above, with (D) Netscape Enterprise Service 3.0C or above (backward
\ncompatible to 2.01), and must support (E) NFS, and must support (F) separate
\nHTTP components (multiple web servers talking to the same file, system and
\ndatabase), and must provide (G) same custom API services as Tumbleweed built
\nfor UPS in version 1.0 (the functions do not have to be the same, but
\nfunctionality must be), and (H) Tumbleweed must provide expert assistance for
\ndeveloping a distributed implementation using multiple HTTP components, and
\n(I) Tumbleweed must provide expert assistance for developing a redundant data
\ncenter recovery solution (the solution must be approved by the UPS
\narchitecture group). With respect to subsequent Enhancements to the Standard
\nSoftware, subject to Section 8(b) above, UPS acknowledges that any work that
\nthe parties mutually agree that Tumbleweed shall perform to conform the
\nCustom Software to any such subsequent Enhancement shall be performed as part
\nof a new Phase pursuant to Section 2 hereof. With respect to all
\nEnhancements, Tumbleweed shall provide procedures, such as database
\nconversion procedures where applicable, and any computer program(s) required
\nto assure a smooth and timely migration to the new environment (i.e.,
\ntypically capable of being performed overnight).<\/p>\n
c. SECOND LEVEL SUPPORT. UPS shall be solely responsible for
\nproviding all first level support for its end user customers and for all aspects
\nof the Messaging Service which do not involve the Software. Except as set forth
\nin Section 9(d) below UPS shall further be responsible for first level support
\nof the Server Software and Custom Server Software. Tumbleweed will provide to
\nUPS, twenty-four (24) hours per day, seven (7) days per week, all telephone or
\nwritten consultation reasonably requested by UPS in connection with its use and
\noperation of the Software or any problems therewith which cannot be resolved a
\nthe first level. UPS may designate up to two (2) employees per data center
\noperating the Server Software\/Custom Server Software as its support interface(s)
\n(“Support Interfaces”) with Tumbleweed, which employee(s) shall initiate and
\nadminister all requests for telephone consultation hereunder. Each UPS support
\ninterface must complete the training specified in Section 12 hereof, and UPS’s
\nend user support personnel shall have completed either the end user support
\ntraining specified in Section 12 hereof, or subsequent “train the trainer”
\nsessions conducted by UPS regarding end user support. In the event that
\nrequests become excessive or overly burdensome as a result of lack of skill or
\ntraining by the Support Interface(s), or high rate of turnover of such Support
\nInterface(s), UPS and Tumbleweed personnel shall meet to provide solutions to
\nsuch problem.<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 33 December 18, 1997<\/p>\n
d. SUPPORTED DATACENTER SUPPORT. In order to assist UPS in
\nperformance of its first level support obligations for the Server Software and
\nCustom Server Software, Tumbleweed shall make available to UPS for a period of
\n[ * ] from the Commercial Availability Date, one Dedicated Support
\nPersonnel at each Supported Datacenter(s) as UPS may so elect. Following such
\n[ * ] period, Tumbleweed shall continue to make the DSP(s) available to
\nUPS on a month to month basis unless and until UPS shall have provided at least
\nninety (90) days’ prior written notice to Tumbleweed of the termination of such
\nDSP Services with respect to one (1) or more Supported Datacenters. In the
\nevent that UPS elects to discontinue DSP Services with respect to a particular
\nSupported Datacenter, the parties shall meet to mutually agree upon a reasonable
\nadjustment to the Reliability Warranty set forth in Section 8(e) hereof, and the
\nobligations and remedies set forth in Section 9(e)(ii) and (iii) shall no longer
\napply, but be replaced by the obligations set forth in Section 9(e)(iv) and (v)
\nwith respect to any such data center. The DSP(s) shall have as his, her or
\ntheir first priority the ongoing support and maintenance of the Software at the
\nSupported Datacenter, and shall be physically present at the Supported
\nDatacenter(s) during UPS Business Hours, and on call (i.e., available by pager)
\noutside of UPS’s Business Hours. “Business Hours” are 8:00 a.m. to 6:00 p.m.,
\nlocal time, on Business Days. UPS shall provide to the DSP(s) physical access
\nto the server(s) running the Messaging Service at the Supported Datacenter(s),
\nas well as remote access to any other servers running the Messaging Service, in
\nall cases subject to compliance with UPS’s reasonable security measures for such
\naccess, remote or otherwise. To the extent that UPS declines or fails to
\nimplement the Minimum Conditions (as defined above), Tumbleweed shall not be
\nliable for any response time commitments and associated remedies set forth in
\nSections 9(e)(ii) and (iii). During the first five (5) days following
\ninstallation of the Software at each Supported Datacenter, the DSP shall be
\nphysically present during UPS Business Hours to assist with the implementation
\nof the Messaging Service at such Supported Datacenter.<\/p>\n
e. REMEDIAL EFFORTS BY TUMBLEWEED. Tumbleweed will respond to and
\nresolve problems with the Software in accordance with the following procedures:<\/p>\n
i. UPS shall first attempt to identify and rectify the problem in
\n accordance with its first-level support obligations, which may include
\n consulting with the DSP. If such activities are unsuccessful, the DSP
\n (or one of UPS’s Support Interfaces, if UPS is not then covered by
\n Tumbleweed’s DSP Services pursuant to Section 9(d) above) shall
\n contact Tumbleweed to report such problem. If the problem may be
\n solved via a telephone consultation, Tumbleweed (or its DSP) shall
\n proceed to attempt to effect such resolution. If remote access is
\n required to permit Tumble-<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 34 December 18, 1997<\/p>\n
weed to attempt to diagnose the problem, then subject to Tumbleweed’s
\n compliance with UPS’s security procedures then in effect, UPS shall
\n provide remote access to UPS’s servers running the Messaging Service
\n solely for the purpose of enabling Tumbleweed to attempt to diagnose
\n and remedy reported problems remotely. Based on such remote
\n diagnosis, the parties shall confer to determine whether the Software
\n or some other component is responsible for any problems with respect
\n to the Messaging Service.<\/p>\n
In the event that the problem does not arise at a Supported
\n Datacenter, and Tumbleweed informs UPS that the Software is not
\n responsible for the problem, and UPS nevertheless reasonably believes
\n that the Software is responsible for such problem and that such
\n problem is a Critical or Major Defect, and after all possible
\n diagnosis by Tumbleweed and discussion by the parties UPS insists that
\n on-site support is the only reasonable solution, Tumbleweed support
\n personnel shall promptly travel to the other UPS datacenter to attempt
\n to effectuate such repairs. In the event that after such travel it
\n becomes clear that the Software was not responsible for such problems
\n and Tumbleweed had informed UPS of such diagnosis prior to such
\n travel, as provided for above, UPS shall reimburse Tumbleweed for all
\n actual expenses incurred in the course of such service call as well as
\n time and materials charges related to the same. In the event that
\n such on-site service had been necessitated by a Critical or Major
\n defect caused by the Software, Tumbleweed shall bear all expenses
\n associated with such on-site call, but no time and materials charges
\n shall be payable in connection therewith.<\/p>\n
Nothing provided for in this subsection (e)(i) shall have any effect
\n on the remedies available to UPS pursuant to subsections (e)(ii) and
\n (e)(iii) below, provided, however that Tumbleweed’s obligations and
\n UPS’s remedies set forth in subsections (e)(ii) and (e)(iii) below
\n shall apply only to Supported Datacenters;<\/p>\n
ii. For a Supported Datacenter, with respect to Critical Defects, as
\n reasonably determined by UPS, Tumbleweed will respond to UPS’s request
\n for service by telephone response by a qualified and knowledgeable
\n representative within one (1) hour from the time Tumbleweed receives
\n UPS’s call and will complete such repairs expeditiously. Tumbleweed
\n personnel shall render continuous effort with respect to such
\n problems. If Tumbleweed does not respond and remedy such problem in
\n the Software within four (4) hours of receipt of the call , UPS shall
\n be entitled to a credit against future amounts due hereunder of
\n [ * ] the average hourly revenues generated by the Messaging
\n Service (measured over the prior three-month period) for every hour or
\n part thereof after four (4) hours that Tumbleweed fails to remedy such
\n problem. Monies becoming due UPS shall be applied as a credit against
\n any amounts subsequently due from UPS to Tumbleweed. Notwithstanding
\n the foregoing, in the event that Tumbleweed fails to remedy any such
\n problem within fifteen (15) days of receipt of the call, or in the<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 35 December 18, 1997<\/p>\n
event that any such problem occurs four (4) or more times within any
\n six (6) month period, such failure shall be deemed to be a material
\n breach by Tumbleweed of this Agreement, in which event the foregoing
\n credits shall no longer accrue and UPS shall be entitled to pursue
\n such damages and remedies as UPS might have pursuant to this
\n Agreement, at law or in equity, subject to the limitations (including
\n the limitations on liability) set forth herein;<\/p>\n
iii. For a Supported Datacenter, with respect to Major Defects, as
\n reasonably determined by UPS, Tumbleweed will respond to UPS’s request
\n for service by telephone response by a qualified and knowledgeable
\n representative within two (2) hours from the time Tumbleweed receives
\n UPS’s call and will complete such repairs expeditiously. Tumbleweed
\n personnel shall render continuous effort with respect to such
\n problems. If Tumbleweed does not respond and remedy such problem in
\n the Software within twenty-four (24) hours of receipt of the call, UPS
\n shall be entitled to a credit against future amounts due hereunder of
\n [ * ] the average hourly revenues generated by the Messaging
\n Service (measured over the prior three-month period) for every hour or
\n part thereof after twenty-four (24) hours that Tumbleweed fails to
\n remedy such problem. Monies becoming due UPS shall be applied as a
\n credit against any amounts subsequently due from UPS to Tumbleweed.
\n Notwithstanding the foregoing, in the event that Tumbleweed fails to
\n remedy any such problem within thirty (30) days of receipt of the
\n call, or in the event that any such problem occurs six (6) or more
\n times within any six (6) month period, such failure shall be deemed to
\n be a material breach by Tumbleweed of this Agreement, in which event
\n the foregoing credits shall no longer accrue and UPS shall be entitled
\n to pursue such damages and remedies as UPS might have pursuant to this
\n Agreement, at law or in equity, subject to the limitations (including
\n the limitations on liability) set forth herein;<\/p>\n
iv. For locations other than Supported Datacenters, with respect to
\n Critical Defects, as reasonably determined by UPS, Tumbleweed will
\n respond to UPS’s request for service by telephone response by a
\n qualified and knowledgeable representative within one (1) hour from
\n the time Tumbleweed receives UPS’s call and will complete such repairs
\n within eight (8) hours. Tumbleweed personnel shall render continuous
\n effort with respect to such problems;<\/p>\n
v. For locations other than Supported Datacenters, with respect to Major
\n Defects, as reasonable determined by UPS, Tumbleweed will respond to
\n UPS’s request for service by telephone response by a qualified and
\n knowledgeable representative within two (2) hours from the time
\n Tumbleweed receives UPS’s call and will complete such repairs within
\n forty-eight (48) hours. Tumbleweed personnel shall render continuous
\n effort with respect to such problems; and<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 36 December 18, 1997<\/p>\n
vi. With respect to any other problem involving the Software (i.e., Minor
\n Defects), Tumbleweed will respond during Business Hours (hereinafter
\n defined) to UPS’s request for service by telephone response by a
\n qualified and knowledgeable representative within four (4) hours from
\n the time Tumbleweed receives UPS’s call and will use commercially
\n reasonable efforts to correct such Minor Defect(s) in the next
\n Enhancement of the applicable Software.<\/p>\n
f. TERMINATION OF MAINTENANCE. UPS shall have the right to
\nterminate the maintenance provisions of this Agreement, without affecting its
\nLicenses to the Software granted under Section 5 hereof, at any time in the
\nevent of a breach by Tumbleweed of any of its maintenance obligations hereunder
\nif Tumbleweed shall fail to cure such breach within thirty (30) calendar days of
\nreceipt of written notice thereof. Except as expressly provided for in Section
\n9(e) above, any termination of the maintenance provisions of this Agreement by
\nUPS shall be in addition to any and all other legal or equitable remedies which
\nmay be available to UPS. In the event that UPS has terminated the maintenance
\nprovisions of this Agreement, and subsequently desires maintenance services,
\nTumbleweed shall have the right to require that UPS first pay all maintenance
\nfees which would have been otherwise due during the interim and upgrade the
\nSoftware to the currently supported versions of the Software.<\/p>\n
g. MAINTENANCE EXCLUSIONS. Tumbleweed will only provide Maintenance
\nServices for (x) the then-current version of the Software, (y) the immediately
\npreceding two (2) versions of the Software, and (z) all preceding versions of
\nthe Software (in addition to the immediately preceding version) for a period of
\n[ * ] following the release of such preceding version(s). As used in
\nthis subsection (h), a “version” is any version of the Standard Software
\ndesignated, in Tumbleweed’s sole but reasonable discretion, by a change in the
\nversion number to the left of the first decimal point. Furthermore, Maintenance
\nServices do not include any service required as a result of: (a) any
\nmodification of the Software performed by any Person other than Tumbleweed or
\nany of its Associates (except for localizations certified by Tumbleweed as set
\nforth in Section 5(f) and except for modifications to the base Software enabled
\nby the Developer Kit Software); (b) operation of the Software under
\nenvironmental conditions outside of normal operating ranges for computer
\nhardware for UPS’s data centers; (c) any use of the Software on a system that
\ndoes not meet Tumbleweed’s minimum standards for such Software, to the extent
\nsuch minimum standards are included in the Specifications; or (d) the operation
\nof hardware or non-Tumbleweed software (where such non-conformity is due solely
\nto the operation of such hardware or non-Tumbleweed software). In the event
\nthat Tumbleweed provides services that are shown to be due to a factor not
\ncovered by the Maintenance Services enumerated in this Agreement, UPS shall pay
\nTumbleweed’s then-current time<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 37 December 18, 1997<\/p>\n
and materials charges needed to perform such services; provided, however, that
\nTumbleweed shall have informed UPS in advance that such services are not covered
\nby the maintenance provisions hereof, and UPS shall then have expressly
\nrequested that Tumbleweed proceed to perform such services.<\/p>\n
10. CONFIDENTIAL INFORMATION.<\/p>\n
a. NON-DISCLOSURE OF TRADE SECRETS AND CONFIDENTIAL INFORMATION.
\nDuring the term of this Agreement, and indefinitely thereafter, Tumbleweed will
\nnot use, copy, or disclose, or permit any unauthorized person access to, any of
\nUPS’s Trade Secrets, except as expressly directed by UPS or as permitted herein
\nin connection with Tumbleweed’s work hereunder. During the term of this
\nAgreement, and indefinitely thereafter, UPS will not disclose, or permit any
\nunauthorized person access to, any of Tumbleweed’s Trade Secrets, except as
\nexpressly authorized by Tumbleweed or as permitted herein. During the term of
\nthis Agreement and for a period of two (2) years after termination thereof,
\nTumbleweed will not use, copy, or disclose, or permit any unauthorized person
\naccess to, any of UPS’s Confidential Information, except as expressly directed
\nby UPS or as permitted herein in connection with Tumbleweed’s work hereunder.
\nDuring the term of this Agreement and for a period of two (2) years after
\ntermination thereof, UPS will not disclose, or permit any unauthorized person
\naccess to, any of Tumbleweed’s Confidential Information, except as expressly
\nauthorized by Tumbleweed or as permitted herein. The use and disclosure
\nrestrictions in this Section 10(a) shall not apply to Trade Secrets and\/or
\nConfidential Information which (i) are known by the recipient prior to receipt
\nfrom the disclosing party, (ii) are or become, through no act or fault of the
\nrecipient, publicly known or generally utilized by others, (iii) are received by
\nrecipient from a third party without a restriction on disclosure or use, (iv)
\nare independently developed by recipient without reference to the Trade Secrets
\nand\/or confidential Information, or (v) are required to be disclosed by a court
\nor government agency, provided that the recipient shall have given prior written
\nnotice of such required disclosure to the disclosing party promptly upon the
\nrecipient becoming aware of such requirement, and taken reasonable steps to
\nallow the disclosing party to seek to protect the confidentiality of the
\ninformation required to be disclosed.<\/p>\n
b. RETURN OF MATERIALS. Each party acknowledges that all Trade
\nSecrets and Confidential Information of the other party are the property of the
\nother party or its affiliates and their respective licensors. All notes, data,
\nreference materials, sketches, disks, memoranda, tapes, manuals, files,
\ndocumentation and records in any way incorporating or reflecting any of the
\nTrade Secrets or Confidential Information of UPS and\/or its Affiliates shall
\nbelong exclusively to UPS and such Affiliates, and Tumbleweed agrees to turn
\nover all copies of such materials in Tumbleweed’s possession or control to UPS,
\nor certify the destruction thereof, upon request and, in any event, after the
\ntermination or expiration of this Agreement. All notes, data, reference
\nmaterials, sketches, disks, memoranda, tapes, manuals, files, documentation and
\nrecords in any way incorporating or reflecting any of the Trade Secrets or
\nConfidential Information of Tumbleweed or its Associates shall belong
\nexclusively to Tumbleweed or its Associates<\/p>\n
UPS\/Tumbleweed Confidential 38 December 18, 1997<\/p>\n
and upon the termination or expiration of this Agreement, UPS agrees to turn
\nover all copies of such materials in UPS’s possession or control to Tumbleweed,
\nor certify the destruction thereof.<\/p>\n
c. THIRD PARTY MATERIALS. Neither party wishes to incorporate any
\nunlicenced or unauthorized materials into its products. Therefore, each party
\nagrees that it will not knowingly disclose to the other, or cause the other to
\nuse any information or material which is confidential to any third party unless
\nthe disclosing party has a written agreement with such third party permitting
\ndisclosure of such information or material to the receiving party or the
\nreceiving party otherwise has the right to receive and use such information or
\nmaterial. Neither party will incorporate into its work any materials which are
\nsubject to the copyrights of any third party except with the prior written
\nconsent of said third party.<\/p>\n
d. PUBLICITY. Tumbleweed shall not use the name of or refer to UPS
\nor any of its Affiliates directly or indirectly in any advertisement, press
\nrelease or professional or trade publication without receiving prior written
\napproval from UPS. Notwithstanding the foregoing, and subject to Tumbleweed’s
\ncompliance with the applicable restrictions and other obligations hereunder
\n(e.g., restrictions on the disclosure of UPS’s Confidential Information), UPS
\nwill agree to be a reference account for Tumbleweed and will allow Tumbleweed to
\npromote its relationship with UPS in press releases, web pages and other
\ncollateral marketing and sales materials; provided, however, that Tumbleweed
\nmust obtain UPS’s prior written consent with respect to any and all such
\ndescriptions of the relationship between UPS and Tumbleweed, which consent will
\nnot be unreasonably withheld.<\/p>\n
e. REMEDIES. Both parties acknowledge and agree that there may be
\nno adequate remedy at law available to the other party in the event of the
\nbreach of any provision of this Section 10 and that such other party, in
\naddition to any other rights which may be available to it, shall have the right
\nto obtain specific performance or injunctive relief, as applicable, in the event
\nof any breach or threatened breach of these provisions.<\/p>\n
11. SOURCE CODE.<\/p>\n
a. RIGHT TO USE SOURCE CODE. UPS shall be entitled to a copy of the
\nSource Code for the Software, and may use same for its own benefit as set forth
\nin Section 11(c) hereto if (i) Tumbleweed suffers an “Insolvency Event,” as such
\nterm is defined in the Escrow Agreement attached hereto as Exhibit F, and in
\nconnection therewith, Tumbleweed or its trustee or receiver rejects this
\nAgreement; or (ii) Tumbleweed is in material breach of the maintenance
\nprovisions set forth in Section 9 hereof, or of any software maintenance
\nagreement then in effect between the parties relating to the Standard Software
\nand that has replaced the provisions of Section 9 hereof.<\/p>\n
b. SOURCE CODE ESCROW. Within fifteen (15) days after UPS’s
\nacceptance of the Software associated with Phase II of this Agreement, and
\nthereafter no later than the time of Tumbleweed’s delivery to UPS of the
\nSoftware associated with Phases subsequent to Phase II of<\/p>\n
UPS\/Tumbleweed Confidential 39 December 18, 1997<\/p>\n
this Agreement, Tumbleweed shall place the Source Code for such Software in
\nescrow pursuant to an escrow agreement in the form of the escrow agreement
\nattached hereto as Exhibit F (the “Escrow Agreement”), which Escrow Agreement
\nshall be entered into prior to the date of such delivery. Except as set forth
\nherein, Tumbleweed shall be responsible for all charges incurred in establishing
\nand maintaining such escrow account. UPS shall be entitled to receive a copy of
\nsuch Source Code under the circumstances set forth in Section 11(a) above and
\npursuant to the procedures set forth in the Escrow Agreement. If Tumbleweed
\ncorrects any defects in, or provides any revision to, the Software under
\nSection 9 hereof, or under any software maintenance agreement between the
\nparties, Tumbleweed shall simultaneously furnish the escrow agent with a
\ncorrected or revised copy of the Source Code for the Software.<\/p>\n
c. VERIFICATION OF ESCROW DEPOSIT(S). UPS may periodically, but not
\nmore frequently than once per year, trigger fresh escrow deposits. UPS shall
\nreimburse Tumbleweed and the escrow agent under the Escrow Agreement for the
\nreasonable expenses incurred in the preparation of such fresh escrow deposits.
\nIn addition to triggering fresh deposits, UPS shall have the right, either
\nitself or through a third party designated by UPS, to validate the materials on
\ndeposit upon thirty (30) calendar days prior written notice to and in the
\npresence of Tumbleweed, but no more frequently than two (2) times per year. Any
\nthird party designated by UPS to validate the materials on deposit shall be
\nrequired to execute a nondisclosure agreement with Tumbleweed, in a form
\nreasonably satisfactory to Tumbleweed, which nondisclosure agreement shall
\nrequire that such third party’s report to UPS contain only a non-confidential
\ndescription of results of such validation. Verification shall take place at
\nTumbleweed’s convenience during normal business hours on mutually-designated
\nhardware. Such verification shall be at UPS’s expense unless the materials on
\ndeposit have not been deposited at the frequency required in Section 11(b)
\nabove, in which event Tumbleweed shall bear all costs associated therewith.<\/p>\n
d. OWNERSHIP OF MODIFICATIONS MADE BY UPS. Any and all Derivative
\nWorks to the Source code released from escrow which are made by or on behalf of
\nUPS shall be the sole property of UPS. UPS acknowledges that its ownership of
\nsuch Derivative Works in no way, form or manner creates or transfers any right
\nor title in the Source code to the underlying Standard Software, and that its
\nownership rights are limited solely to the Derivative Works.<\/p>\n
e. SOURCE CODE LICENSE. Upon the occurrence of the release events
\nset forth in Section 11(a), Tumbleweed hereby automatically grants to UPS, a
\nnon-exclusive, irrevocable license to Use, reproduce, modify, maintain, support,
\nupdate, make, have made, and create Derivative Works of the Source code, and to
\ncreate object code copies of such software thereby created solely to support and
\nenhance the Messaging Service. UPS shall have the right to employ third party
\ncontractors to exercise the foregoing license, so long as such third parties are
\nbound by terms no less protective of the Source Code than the terms of this
\nAgreement, including an obligation to protect the confidential and proprietary
\nnature of the Source Code and to use the Source Code only on UPS’s behalf and
\nonly to the extent necessary to support the foregoing license. Except as
\nincident to the foregoing grant, UPS may not use, reproduce, distribute, create
\nDerivative Works of, publicly perform, publicly display, digitally perform,<\/p>\n
UPS\/Tumbleweed Confidential 40 December 18, 1997<\/p>\n
make, have made, sell, offer to sell or import the Source Code. UPS shall
\ncontinue to pay Royalties, and UPS’s failure to make such payments when due
\nshall terminate this source code license.<\/p>\n
f. DISCONTINUANCE OF MARKETING. If Tumbleweed ceases to market the
\nStandard Software and such marketing is not continued by another Person, or is
\ncontinued by another Person which UPS for reasonable cause deems unsatisfactory,
\nat UPS’s request, UPS and Tumbleweed will enter into good faith negotiations to
\nlicense the Source code to UPS on commercially reasonable terms.<\/p>\n
12. TRAINING SERVICES. In addition to the training outlined in Exhibit G
\nhereto, the License Fees and development fees specified in Section 6 hereof
\ninclude all costs (other than Tumbleweed’s reasonable and actual travel and
\nliving expenses) for the following training programs: (i) attendance of up to
\nten (10) of UPS’s technical support personnel at Tumbleweed’s two-day system
\nadministrator training course, for which course UPS shall have the right to
\nselect the topics to be covered based upon training materials supplied to UPS by
\nTumbleweed in advance of such training; and (ii) training of up to fifteen (15)
\nof UPS’s end user support personnel on the Use and operation of the Software.
\nPursuant to a mutually agreed upon schedule, Tumbleweed shall provide sufficient
\nexperienced and qualified personnel to conduct such training at the location(s)
\ndesignated by UPS. The parties may mutually agree that Tumbleweed shall perform
\nadditional training for UPS. Such training may be purchased by UPS, in it sole
\ndiscretion, at Tumbleweed’s standard list price and shall be conducted at a
\nmutually agreed upon time. In addition, if the paries agree that such training
\nshall be performed at any site other than Tumbleweed’s Redwood City facility,
\nUPS shall pay all reasonable and actual travel and living expenses incurred by
\nTumbleweed in performing the training.<\/p>\n
13. COMPLIANCE WITH LAWS.<\/p>\n
a. LICENSES AND PERMITS. Tumbleweed (i) is responsible for
\nobtaining all licenses, authorizations and permits required by applicable
\nlegislative enactments and regulatory authorizations, whether United States
\nfederal, state, local or otherwise, which are required in connection with the
\nexport of the Software from the United States to foreign countries which may
\nreasonably be considered to be “major” markets, and\/or in connection with the
\nexercise by UPS and its sublicensees (to the extent of their sublicenses),
\nwithin the United States, of their respective rights derived from this
\nAgreement; and (ii) has financial responsibility for, and shall pay, all fees
\nand taxes associated with such licenses, authorizations and permits. UPS is
\nresponsible for obtaining, and shall pay all fees and taxes associated with, all
\nlicenses, authorizations and permits required by applicable legislative
\nenactments and regulatory authorizations, whether United States federal, state,
\nlocal or otherwise, which are required in connection with the export of the
\nSoftware from the United States to any and all other foreign countries. With
\nrespect to foreign jurisdictions within which UPS will provide the Messaging
\nService, UPS shall also be responsible for obtaining all licenses,
\nauthorizations and permits required by applicable legislative enactments and
\nregulatory authorizations, except with respect to those provided for<\/p>\n
UPS\/Tumbleweed Confidential 41 December 18, 1997<\/p>\n
above in this Section 13(a). Notwithstanding the foregoing, upon UPS’s
\nreasonable request and subject to UPS’s agreement to reimburse any associated
\ncosts and reasonable expenses, Tumbleweed will promptly execute all documents
\nand do all acts which may be necessary, desirable or convenient to enable UPS at
\nits expense to obtain such licenses, authorizations and permits. In the event
\nthat Tumbleweed has expertise in procuring any such licenses, authorizations or
\npermits, Tumbleweed shall cooperate with UPS to share such information regarding
\nthe same.<\/p>\n
b. CHANGES IN LAW AND REGULATIONS. Tumbleweed shall use reasonable
\nefforts to identify the impact of changes in applicable legislative enactments
\nand regulations on the functions performed by the Software, whether such
\nenactments or regulations are foreign or Untied States federal, state, local or
\notherwise. Tumbleweed shall notify UPS of such changes and shall work with UPS
\nto identify the impact of such changes on UPS’s offering of the Messaging
\nService. Tumbleweed shall promptly make any resulting modifications to the
\nSoftware as reasonable necessary as a result of such changes, and shall be
\nresponsible for, and shall pay for, the cost of any such changes directly
\nrelated to Tumbleweed’s business.<\/p>\n
14. INDEMNIFICATION.<\/p>\n
a. PROPRIETARY RIGHTS INDEMNIFICATION. Tumbleweed shall indemnify,
\ndefend and hold UPS and its Affiliates and Server Sublicensees and their
\nrespective officers, directors, agents and employees harmless from and against
\nany and all liabilities, damages, losses, expenses, claims, demands, suits,
\nfines or judgments, including reasonable attorneys’ fees, and costs and expenses
\nincidental thereto, which may be suffered by, accrued against, charged to or
\nrecoverable from UPS or any of its Affiliates or Server Sublicensees, or their
\nrespective officers, directors, agents or employees, arising out of a claim that
\nthe Software or Documentation, or any portion thereof, infringes or
\nmisappropriates any United States or foreign patent, copyright, trade secret or
\nother proprietary right. In the event that the Software or Documentation, or
\nany portion thereof, is held in a suit or proceeding, or Tumbleweed, in its sole
\ndiscretion, believes that the software or Documentation may be held, to infringe
\nany rights of any other Person, and the Use of the Software or Documentation or
\nportion thereof is enjoined, or Tumbleweed, believes that the Software or
\nDocumentation may be enjoined, Tumbleweed shall, at its sole option and expense,
\neither (i) procure for UPS the right to continue using the Software and
\nDocumentation, or (ii) modify the Software and\/or Documentation or replace the
\nsame with non-infringing software or materials of equivalent functionality and
\nperformance. Tumbleweed will not be liable for claims based upon: (w)
\ncompliance with UPS specifications, where such specifications would necessarily
\ngive rise to infringement (i.e. where alternate implementations of substantially
\nthe same functionality would not avoid such infringement); (x) the use or
\ncombination of the Software with software, hardware, or other materials not
\nprovided or approved by Tumbleweed; (y) any use of a version of the Software
\nwhich has been altered or modified other than by Tumbleweed or an authorized
\nrepresentative of Tumbleweed, if infringement would not have occurred but for
\nthe alteration or modification; or (z) any UPS Intellectual Property
\nincorporated into the Custom Software.<\/p>\n
UPS\/Tumbleweed Confidential 42 December 18, 1997<\/p>\n
b. TUMBLEWEED’S GENERAL INDEMNITY. Tumbleweed shall indemnify,
\ndefend and hold UPS and its Affiliates, and their respective officers,
\ndirectors, agents and employees, harmless from and against any and all
\nliabilities, damages, losses, expenses, claims, demands, suits, fines or
\njudgments, including reasonable attorneys’ fees, and costs and expenses
\nincidental thereto, which may be suffered by, accrued against, charged to or
\nrecoverable from UPS or any of its Affiliates, or any of their respective
\nofficers, directors, agents or employees, arising out of or resulting from (i)
\nclaims of bodily injury, including death, or loss or damage to property or
\nphysical destruction of property arising out of or in connection with any act,
\nerror or omission of Tumbleweed or any of its officers, directors, agents,
\nemployees or subcontractors, during the term of this Agreement; (ii) the fault
\nor negligence of Tumbleweed in the course of its performance under this
\nAgreement, including, without limitation, performance, nonperformance, or defect
\nin performance or defect in design, or any failure of any license management
\nsoftware (to the extent placed in the software by Tumbleweed) to operate
\nproperly, or any statement, misstatement, representation or misrepresentation
\nmade by Tumbleweed; or (iii) a reclassification or attempt to reclassify any of
\nTumbleweed’s employees as an employee of UPS, including, without limitation, any
\ntax liability (including interest and penalties) resulting from UPS’s failure to
\npay, deduct or withhold income taxes, Federal Insurance Contribution Act taxes,
\nor Federal Unemployment Tax Act taxes with respect to any of Tumbleweed’s
\nemployees.<\/p>\n
c. UPS’S GENERAL INDEMNITY. Except with respect to matters covered
\nby Sections 14(a) and (b) above, UPS shall indemnify, defend and hold Tumbleweed
\nand its officers, directors, agents and employees harmless from and against any
\nand all liabilities, damages, losses, expenses, claims, demands, suits, fines or
\njudgments, including reasonable attorneys’ fees, and costs and expenses
\nincidental thereto, which may be suffered by, accrued against, charged to or
\nrecoverable from Tumbleweed or any of its officers, directors, agents or
\nemployees, arising out of or resulting from claims by third parties, including
\nend user customers of UPS, based upon (i) any representations made by UPS to
\nsuch third parties which are not supported by the Documentation and\/or any other
\ninformation or materials supplied by Tumbleweed, or (ii) any acts committed by
\nUPS’s end user customers during the course of their use of the Messaging
\nService. IN NO EVENT WILL UPS’S AGGREGATE, CUMULATIVE LIABILITY UNDER THIS
\nSECTION 14 EXCEED [ * ]<\/p>\n
d. LITIGATION. The parties’ respective indemnification obligations
\nhereunder shall require that promptly after a party seeking to be indemnified
\nreceives a threat of any action, or a notice of the commencement or filing of
\nany action which may be subject to the provisions of this Section 14, the party
\nseeking indemnification shall notify the other party in writing and tender the
\nmatter to said party for resolution or litigation. The indemnifying party shall
\nkeep the<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 43 December 18, 1997<\/p>\n
other party reasonably apprized of the continuing status of the claims covered
\nby this Section 14, including any lawsuits resulting therefrom, and shall permit
\nthe other party, upon such party’s written request, to participate (at such
\nparty’s own expense) in the defense or settlement of any such claim. Neither
\nparty shall be required to indemnify for, be bound by, or otherwise incur any
\nliability with respect to, any settlement terms to which it has not agreed; and
\nin such a case, the party has not agreed to the settlement terms shall assume
\nthe cost of defending against any such claim and shall select the attorney(s) to
\ndefend against such claim subject to the other party’s approval, which shall not
\nbe unreasonably withheld.<\/p>\n
15. CO-PROMOTION AND CO-ADVERTISING. Any and all marketing by Tumbleweed
\nshall exclude co-promoting or co-advertising with, or otherwise licensing the
\nuse of any of the Tumbleweed Marks, to:<\/p>\n
(A) [ * ]<\/p>\n
(B) any of the following entities for the period ending [ * ],
\n or (xi) any parent or subsidiary of any entity on the above list which
\n is involved in the transportation industry or any successor of any
\n entity on the above list.<\/p>\n
To the extent that any of the foregoing entities utilize any such Tumbleweed
\nMarks in violation of the foregoing restriction, Tumbleweed will take any and
\nall reasonable steps necessary to enjoin such entity(ies) from using said
\nTumbleweed Marks. The [ * ] date provided for above in this
\nSection 15 shall be extended on a day for day basis for any slippage in any of
\nthe dates set forth in the Implementation Schedule which is caused by
\nTumbleweed.<\/p>\n
16. TERM AND TERMINATION.<\/p>\n
a. TERM. The term of this Agreement shall be [ * ], subject
\nto any earlier termination hereof pursuant to the express terms and conditions
\nof this Agreement.<\/p>\n
b. TERMINATION BY TUMBLEWEED; ESCALATION. Tumbleweed may terminate
\nthis Agreement for UPS’s breach of its payment obligations under Sections 6(a),
\n(b), (c), (d), (g), and may terminate Section 9 of this Agreement for UPS’s
\nbreach of its payment obligations under Section 6(i) and (j), provided that
\nprior to any such termination (i) the parties shall first engage in good faith
\nin the dispute escalation procedures set forth below, and (ii) if the dispute
\ncan be resolved via an accounting audit process, such audit process (as set
\nforth in Sections 6(e) and (o)) shall have been completed. In the event that a
\ndispute arises regarding any payment or withholding of any funds, either party
\nmay give the other notice of the existence of a dispute. If the dispute is not
\nresolved in the normal course of business, then each party shall refer the
\ndispute to the following individuals, which individuals shall attempt to settle
\namicably by good faith discussions such dispute:<\/p>\n
For UPS: Mark A. Rhoney<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 44 December 18, 1997<\/p>\n
For Tumbleweed: Jeffrey C. Smith<\/p>\n
If the designated individuals are unable to resolve the dispute by such
\ndiscussions within thirty (30) days (the “Escalation Period”), and the parties
\nhave not agreed that the dispute can be resolved via an accounting audit process
\n(or if the parties have agreed that the dispute can be resolved via an
\naccounting audit process, such process has been completed, including the thirty
\n(30) day payment period provided for in Section 6(o)), and if UPS has not paid
\nthe disputed amounts within an additional thirty (30) days following the
\nEscalation Period, then Tumbleweed may terminate this Agreement without
\nliability for such termination. No payment by UPS of any disputed amount under
\nthis Agreement, whether pursuant to Section 6(o), this Section 16(b) or
\notherwise, shall constitute a waiver by UPS of its right to pursue any and all
\nclaims relating thereto following such payment, provided, however, that UPS
\nshall have provided Tumbleweed written notice of its continued dispute.<\/p>\n
c. CONSEQUENCES OF TERMINATION. In the event of the termination or
\nexpiration of this Agreement, in addition to the parties’ other obligations
\nhereunder, (i) all licenses granted by either party to the other hereunder shall
\nterminate, (ii) UPS shall promptly remove all copies of the
\nTumbleweed-proprietary Software from all servers in UPS’s control, (iii) both
\nparties shall promptly remove all references to the other party and its products
\nand\/or services from its advertising and other promotional materials, and from
\nits website and any other Internet sites, and (iv) except as otherwise provided
\nto the contrary, all obligations of one party to the other party shall cease.
\nSections 1, 2(j) (only to the extent any amounts remain due and payable), 2(k),
\n4(b) (only to the extent any amounts remain due and payable and\/or restrictive
\ncovenants remain unfulfilled), 5(d), 6 (only to the extent any fees remain due
\nand payable), 10, 13 (only to the extent of any financial obligations
\nthereunder), 14, 15 (except as otherwise expressly provided herein), 16, 17
\n(except for subsections (a) and (h)) shall survive the termination or expiration
\nof this Agreement.<\/p>\n
17. MISCELLANEOUS.<\/p>\n
a. INSURANCE. Tumbleweed shall, at its own cost and expense,
\nobtain and maintain in full force and effect, with sound and reputable
\ninsurers, during the term of this Agreement, the following insurance
\ncoverages: (i) Workers’ Compensation insurance as required by the law of the
\nstate of hire. Tumbleweed shall cause the carrier to provide a waiver of
\nsubrogation in favor of UPS for this coverage; (ii) Employer’s liability
\ninsurance with a minimum limit of [ * ] of liability, and not less than
\n[ * ] aggregate limit of liability per policy year for disease,
\nincluding death at any time resulting therefrom, not caused by accident;
\n(iii) Comprehensive General Liability insurance, including blanket
\ncontractual liability, broad form property damage, and products and completed
\noperations coverage, on an occurrence form insuring against all hazards with
\na minimum limit of liability for bodily injury, including death resulting
\ntherefrom, and property damage in the amount of [ * ] per occurrence.
\nThe coverage should also include coverage for personal and advertising injury
\nliability, United Parcel Service of America, Inc. and each of its
\nsubsidiaries shall be named as “additional insureds”<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 45 December 18, 1997<\/p>\n
under this policy with respect to the Services provided for under this
\nAgreement; (iv) Automobile liability insurance against liability arising from
\nthe maintenance or use of all owned, non-owned and hired automobiles and trucks
\nwith a minimum limit of liability for bodily injury and\/or property damage of
\n[ * ] Combined Single limit. United Parcel Service of America, Inc. and
\neach of its subsidiaries shall be named as “additional insureds” under this
\npolicy with respect to the Services provided for under this Agreement; and (v)
\ninsurance in the minimum amount of [ * ] for coverage of software errors
\nand omissions, including services rendered and intellectual property
\ninfringement claims, with respect to the computer software developed hereunder.
\nTumbleweed’s insurance shall be deemed primary and without right of contribution
\nby UPS. Tumbleweed shall provide UPS with certificates of insurance evidencing
\nthe coverages required hereunder within fifteen (15) days after execution of
\nthis Agreement. Each policy required hereunder shall provide that UPS shall
\nreceive thirty (30) days’ advance written notice in the event of a cancellation
\nor material change in such policy. In the event that any of the Services under
\nthis Agreement are to be rendered by persons other than Tumbleweed’s employees,
\nTumbleweed shall arrange to furnish UPS with evidence of insurance for such
\npersons subject to the same terms and conditions as set forth above and
\napplicable to UPS prior to commencement of service by such person(s).<\/p>\n
b. ENTIRE AGREEMENT. This Agreement, including the Exhibits
\nattached hereto and the Specifications which are agreed to by the parties as
\nprovided in this Agreement, contains the entire understanding and agreement of
\nthe parties with respect to the subject matter hereof, and supersedes any prior
\nwritten or oral agreements between them with respect thereto. Except as set
\nforth herein, there are no representations, agreements, arrangements or
\nunderstandings, written or oral, between the parties with respect to the subject
\nmatter of this Agreement. This Agreement shall control over any conflicting
\nprovisions of any UPS purchase order, Tumbleweed invoice or other business form,
\nand such conflicting provisions are expressly rejected. In the event of any
\nconflict between this Agreement and an Exhibit, the terms of this Agreement
\nshall control.<\/p>\n
c. GOVERNING LAW. This Agreement shall be governed by and construed
\nin accordance with the laws of the State of New York, as such laws are applied
\nto agreements entered into and to be performed entirely within the State of New
\nYork between residents of the State of New York. The parties agree that the
\nexclusive jurisdiction and venue for any action relating to this Agreement shall
\nbe a federal or state court in the State of New York, and the parties hereby
\nconsent to such jurisdiction and venue.<\/p>\n
d. RELATIONSHIP OF THE PARTIES. Tumbleweed acknowledges, agrees,
\nrepresents and warrants that it is and has been engaged as an independent
\ncontractor, and not as an employee, of UPS, and nothing in this Agreement shall
\nbe construed as creating an employer-employee relationship or any partnership or
\njoint venture between UPS and Tumbleweed. Tumbleweed shall be responsible for
\npayment of all federal, state and local business-related and employment-related
\ntaxes, withholding and insurance arising out of Tumbleweed’s and its
\nsubcontractors’ activities, including by way of illustration, but not limited
\nto, federal and state<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 46 December 18, 1997<\/p>\n
income taxes, social security taxes, unemployment insurance taxes, where
\napplicable, and business license fees, where required. Neither party shall
\nincur any liability on behalf of the other party nor in any way represent or
\nbind such other party in any manner or thing whatsoever, and nothing herein
\nshall be deemed to make either party the agent or legal representative of the
\nother.<\/p>\n
e. AMENDMENTS AND MODIFICATIONS. No amendment to or modification of
\nthis Agreement shall be binding upon either party unless such amendment or
\nmodification is reduced to writing, dated and executed by the parties to this
\nAgreement.<\/p>\n
f. PERSONAL PRONOUNS; HEADINGS. All personal pronouns in this
\nAgreement, whether used in the masculine, feminine or neuter gender shall
\ninclude all other genders; the singular shall include the plural and vice versa.
\nTitles of all sections and paragraphs in this Agreement are for convenience only
\nand shall neither limit nor amplify the substantive provisions of this
\nAgreement.<\/p>\n
g. SEVERABILITY. In the event that any one or more of the
\nprovisions of this Agreement is determined by a court of competent jurisdiction
\nto be invalid, unenforceable or illegal, such invalidity, unenforceability or
\nillegality shall not affect any other provisions of this Agreement and this
\nAgreement shall be construed as if the challenged provision had never been
\ncontained herein. The parties further agree that in the event such provision is
\nan essential part of this Agreement, they will immediately begin negotiations
\nfor a suitable replacement provision.<\/p>\n
h. NO ASSIGNMENT. Neither party may assign its rights or delegate
\nits duties under this Agreement without the other party’s prior written consent.
\nAny attempted assignment in violation of the foregoing shall be void and of no
\neffect. Notwithstanding the foregoing, without the consent of the other party,
\n(i) either party may assign its rights and delegate its duties, in whole but not
\nin part, to any successor in interest by asset sale, merger, reorganization,
\nrecapitalization or similar transaction, except that UPS’s prior written consent
\nshall be required with respect to any delegation or assignment by Tumbleweed to
\nany of the entities listed in Section 15 above, during the period specified
\ntherein, and (ii) UPS may assign its rights and delegate its duties to any of
\nits Affiliates. Following any such assignment or delegation by Tumbleweed
\npursuant to the previous sentence, upon written notice to Tumbleweed (or its
\nsuccessor in interest), UPS shall have the right to (i) cancel any outstanding
\ndevelopment Services with respect to any Phase(s) subsequent to Phase II of the
\nProject, (ii) terminate the procurement of Maintenance Services from Tumbleweed
\npursuant to Section 9 hereof, such termination to be effective one (1) year
\nafter the giving of such notice, (iii) convert the licenses granted by
\nTumbleweed hereunder to irrevocable licenses for the remainder of the
\n[ * ]<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 47 December 18, 1997<\/p>\n
term of this Agreement, and (iv) reduce the Royalties payable pursuant to
\nSection 6(b) hereof, for the remainder of the term of this Agreement, to
\n[ * ] actually received by UPS and\/or its Affiliates for license
\nfees for the Software [ * ]. The parties’ rights and obligations
\nwill bind and inure to the benefit of their respective successors and permitted
\nassigns.<\/p>\n
i. NO WAIVER. The failure of either party at any time to require
\nperformance by the other party of any provision of this Agreement shall in no
\nway affect that party’s right to enforce such provisions, nor shall the waiver
\nby either party of any breach of any provision of this Agreement be taken or
\nheld to be a waiver of any further breach of the same provision.<\/p>\n
j. NOTICES. Except as otherwise provided herein, and except for
\nnotices of failures, errors or other problems with the Software, which may be
\ndelivered by phone and confirmed in writing, all notices, requests, demands or
\nother communications required or permitted to be given or made under this
\nAgreement shall be in writing and shall be given by personal service, UPS Next
\nDay Air, telecopy, or by United States certified mail, return receipt requested,
\npostage prepaid to the addresses set forth below, or such other address as
\nchanged through written notice to the other party.<\/p>\n
If to UPS:<\/p>\n
United Parcel Service
\n 55 Glenlake Parkway
\n Atlanta, Georgia 30328
\n Attn: Joseph R. Moderow
\n Telecopy: (404) 828-6619<\/p>\n
With a copy to Joe Pyne (same address); Telecopy: (404) 828-6619<\/p>\n
If to Tumbleweed:<\/p>\n
Tumbleweed Software Corp.
\n 2010 Broadway Street
\n Redwood City, California 94063
\n Attn: President
\n Telecopy: (650) 369-7197<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 48 December 18, 1997<\/p>\n
Notice given by personal service shall be deemed effective on the date
\nit is delivered, notice sent by UPS Next Day Air shall be deemed effective one
\nBusiness Day after dispatch, notice given by telecopy shall be deemed effective
\non the date of transmission, and notice mailed shall be deemed effective on the
\nthird Business Day following its placement in the mail.<\/p>\n
k. COUNTERPARTS. This Agreement may be executed in any number of
\ncounterparts, each of which, when so executed and delivered, shall be deemed an
\noriginal, and all of which shall constitute one and the same Agreement.<\/p>\n
l. CONSTRUCTION. This Agreement shall be construed and interpreted
\nfairly, in accordance with the plain meaning of its terms, and there shall be no
\npresumption or inference against the party drafting this Agreement in construing
\nor interpreting the provisions hereof.<\/p>\n
m. PERSONNEL RULES AND REGULATIONS. While on the other party’s
\npremises, the personnel of each party will comply with all security practices
\nand procedures generally prescribed by such other party. In addition, unless
\notherwise instructed by UPS, Tumbleweed personnel shall observe the working
\nhours, working rules, holiday schedules and policies of UPS while working on
\nUPS’s premises.<\/p>\n
n. EXHIBITS. The following Exhibits are attached hereto and
\nincorporated herein by reference:<\/p>\n
Exhibit “A” – Standard Software and Phase I Software and Services
\n Exhibit “B” – Phase II Software and Services
\n Exhibit “C” – Interface Information and Developer Kits
\n Exhibit “D” – Implementation Schedule
\n Exhibit “E” – End User License Terms
\n Exhibit “F” – Source Code Escrow Agreement
\n Exhibit “G” – Marketing Support Services
\n Exhibit “H” – [Reserved]
\n Exhibit “I” – Server Software Sublicense Terms<\/p>\n
o. LIMITATION OF LIABILITY. EXCEPT WITH RESPECT TO TUMBLEWEED’S
\nOBLIGATIONS UNDER SECTIONS 5, 14(a) (ONLY WITH RESPECT TO THE FIRST SENTENCE
\nTHEREOF), 15 AND 17(p) HEREOF, AND EXCEPT WITH RESPECT TO UPS’S OBLIGATIONS
\nUNDER SECTIONS 5, 14(c) AND 17(p) HEREOF AND ITS OUTSTANDING PAYMENT OBLIGATIONS
\nUNDER SECTION 6 HEREOF, AND EXCEPT IN THE EVENT A PARTY BREACHES ITS
\nCONFIDENTIALITY OBLIGATIONS TO THE OTHER PARTY HEREUNDER, IN NO EVENT SHALL
\nEITHER PARTY’S AGGREGATE CUMULATIVE LIABILITY UNDER THIS AGREEMENT EXCEED (I)
\nDURING THE [<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 49 December 18, 1997<\/p>\n
* ] OF THIS AGREEMENT, [ * ]; OR (II) DURING [ * ]
\nOF THIS AGREEMENT, [ * ] PLUS THE AMOUNTS ACTUALLY RECEIVED BY
\nTUMBLEWEED UNDER THIS AGREEMENT IN [ * ] PERIOD PRECEDING THE DATE
\nTHE CLAIM IS MADE.<\/p>\n
p. NO CONSEQUENTIAL DAMAGES. EXCEPT WITH RESPECT TO EACH PARTY’S
\nOUTSTANDING PAYMENT OBLIGATIONS HEREUNDER, IN NO EVENT SHALL EITHER PARTY BE
\nLIABLE IN THE AGGREGATE IN EXCESS OF [ * ] FOR LOST PROFITS OR LOSS
\nOF BUSINESS, OR FOR PUNITIVE, EXEMPLARY, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
\nDAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (WHETHER FROM BREACH
\nOF CONTRACT OR WARRANTY OR FROM NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE),
\nEVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS
\nLIMITATION OF LIABILITY SHALL APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL
\nPURPOSE OF ANY LIMITED REMEDY HEREIN.<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential 50 December 18, 1997<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
\nbe executed by their duly authorized representatives as of the date first above
\nwritten.<\/p>\n
UPS:<\/p>\n
UNITED PARCEL SERVICE GENERAL SERVICES CO.<\/p>\n
By: \/s\/ Joseph M. Pyne
\n —————————-
\nTitle: Sr. V.P.
\n ————————-
\nPrint Name: Joseph M. Pyne
\n ——————–<\/p>\n
Tumbleweed:<\/p>\n
TUMBLEWEED SOFTWARE CORPORATION<\/p>\n
By: Joseph C. Consul
\n —————————-
\nTitle: V.P. Finance, C.F.O.
\n ————————-
\nPrint Name: Joseph C. Consul
\n ——————–<\/p>\n
UPS\/Tumbleweed Confidential 51 December 18, 1997<\/p>\n
EXHIBIT A<\/p>\n
STANDARD SOFTWARE AND PHASE I SOFTWARE AND SERVICES<\/p>\n
[ * ]<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
EXHIBIT B<\/p>\n
PHASE II SOFTWARE AND SERVICES<\/p>\n
[ * ]<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
EXHIBIT C<\/p>\n
INTERFACE INFORMATION AND DEVELOPER KITS<\/p>\n
[ * ]<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
EXHIBIT D<\/p>\n
IMPLEMENTATION SCHEDULE<\/p>\n
[ * ]<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
EXHIBIT E<\/p>\n
END USER LICENSE TERMS<\/p>\n
United Parcel Service General Services Co. (“UPS”) grants to the end-user
\n(“Customer”), under the terms and conditions set forth herein and for so long as
\nCustomer has a valid Messaging Service account and is not in breach of this
\nAgreement, a personal, non-exclusive and non-transferable right to use (i) all
\ncomputer programs, in any form, provided to the Customer in connection with the
\nMessaging Service (in object code form only), and all updates, enhancements and
\nmodifications thereto which are provided to the Customer; and (ii) all user
\ndocumentation including manuals, handbooks and other written materials relating
\nto such programs which are provided to the Customer (together referred to as the
\n“Software”). Customer shall not use the Software for any purpose other than in
\nconnection with Messaging Service transactions.<\/p>\n
1. All title and ownership rights in the Software remain with UPS
\n and its licensors. Additional copies of the Software must contain the
\n copyright and proprietary notices which are furnished with the original.
\n Customer may not attempt to disable or bypass any functionality or
\n time-limitation mechanisms of the Messaging Service or Software, nor
\n decompile, disassemble, reverse engineer, reverse compile or otherwise
\n reduce the Software to human readable form without prior written consent of
\n UPS; PROVIDED, HOWEVER, that, notwithstanding anything contained herein to
\n the contrary, UPS’s authorization shall not be required where reproduction
\n of the Software and translation of its form are indispensable in the
\n European Union to obtain the information necessary to achieve the
\n interoperability of the Software with other programs, provided that: (A)
\n these acts are performed by the Customer or by another person having a
\n right to use a copy of the Software, or on their behalf by a person
\n authorized to do so; (B) the information necessary to achieve
\n interoperability has not previously been readily available to the persons
\n referred to in subparagraph (A); and (C) these acts are confined to the
\n parts of the Software which are necessary to achieve interoperability.<\/p>\n
2. UPS warrants that the Software provided by it will perform
\n substantially in accordance with applicable written product specifications
\n provided by UPS to Customer at the time of delivery for a period of
\n [ * ] from the date of delivery. UPS does not warrant that
\n Customer’s use of the Software will be uninterrupted or error-free.
\n Customer’s sole remedy shall be replacement of the Software. UPS MAKES NO
\n OTHER WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, IN FACT OR IN LAW,<\/p>\n
—————<\/p>\n
[*]Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
\n PARTICULAR PURPOSE, NON-INFRINGEMENT OR TITLE.<\/p>\n
3. IN NO EVENT WILL UPS OR ANY OF ITS LICENSORS BE LIABLE FOR
\n INCIDENTAL, SPECIAL, CONSEQUENTIAL OR EXEMPLARY PENALTIES OR DAMAGES
\n (INCLUDING LOST PROFITS, OR PENALTIES AND\/OR DAMAGES FOR DELAY IN DELIVERY
\n OR FAILURE TO GIVE NOTICE OR DELAY), EVEN IF UPS HAS BEEN ADVISED OF THE
\n POSSIBILITY OF SUCH DAMAGES. CUSTOMER AGREES THAT ANY LIABILITY OF UPS
\n HEREUNDER FOR DAMAGES, REGARDLESS OF THE FORM OF ACTION, SHALL NOT EXCEED
\n US$10.00.<\/p>\n
4. UPS may terminate this License Agreement after giving written
\n notice to Customer of its failure to satisfy any of its obligations
\n hereunder if Customer then fails to begin taking corrective action within
\n fifteen (15) days after receiving such notice and to resolve such failure
\n within thirty (30) days after receiving such notice. Upon such
\n termination, Customer shall cease all use of all copies of the Software
\n which it received hereunder. In addition, UPS can terminate Customer’s
\n right to use the Software in the event Customer ceases to do business or
\n becomes bankrupt. If UPS terminates this Agreement, Customer agrees to
\n return to UPS all copies of the Software, including all copies or partial
\n copies.<\/p>\n
5. Any change to this License Agreement must be in writing, signed
\n by both parties. Interpretation of this License Agreement will be governed
\n by the laws of the State of Georgia, excluding (i) its conflicts of law
\n principals; (ii) the United Nations Convention on Contracts for the
\n International Sale of Goods; (iii) the 1974 Convention on the Limitation
\n Period in the International Sale of Goods; and (iv) the Protocol amending
\n the 1974 Convention, done at Vienna April 11, 1980.<\/p>\n
6. No rights or licenses with respect to the Software, the names,
\n trademarks, service marks or logos of UPS or any of its licensors, or any
\n other of the intellectual property rights of UPS or any of its licensors,
\n or with respect to rights to offer services provided by the Software to
\n third parties, are granted or deemed granted hereunder or in connection
\n herewith, other than those rights to use the Software which are expressly
\n granted in this Agreement.<\/p>\n
7. The Software is a “commercial item,” as that term is defined at
\n 48 C.F.R. 2.101 (Oct. 1995), consisting of “commercial computer software”
\n or “commercial computer software documentation” as such terms are used in
\n 48 C.F.R. 12.212 (Sept. 1995). If the Customer is a unit or agency of the
\n United States Government, then the United States Government’s rights with
\n respect to the Software are limited by the terms of this Agreement,
\n consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through
\n 227.7202-4 (June 1995), as applicable.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
8. This Agreement is the complete and exclusive statement of the
\n agreement between UPS and Customer, and this Agreement supersedes any prior
\n proposal, agreement, or communication, oral or written, pertaining to the
\n subject matter of this Agreement.<\/p>\n
9. Customer shall comply with all applicable United States export
\n control laws and regulations, and will obtain any export and\/or re-export
\n authorizations required under the Export Administration Regulations of the
\n U.S. Department of Commerce and other relevant regulations controlling the
\n export of the Software or related technical data.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
Exhibit F<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
EXHIBIT F<\/p>\n
SOURCE CODE ESCROW AGREEMENT<\/p>\n
This Agreement is made and entered into as the ___ day of _______, 199__,
\nby and between Tumbleweed Software Corporation, a California corporation with
\noffices at 2010 Broadway Street, Redwood City, California 94063 (hereinafter
\n“Tumbleweed”); United Parcel Service General Services Co., a Delaware
\ncorporation with offices at 55 Glenlake Parkway, Atlanta, Georgia 30328
\n(hereinafter “UPS”); and Data Securities International, a Delaware corporation
\nwith offices at 9555 Chesapeake Drive, San Diego, California 92123 (hereinafter
\n“Escrow Agent”).<\/p>\n
WITNESSETH:<\/p>\n
WHEREAS, Tumbleweed and UPS have entered into a Software License,
\nDevelopment and Maintenance Agreement more particularly described below pursuant
\nto which Tumbleweed has agreed to license to UPS, its Affiliates, and certain
\nother third parties certain proprietary computer programs in object code form;
\nand <\/p>\n
WHEREAS, Tumbleweed and UPS have agreed to place the source code
\ncorresponding to such computer programs in escrow to be released to UPS upon
\nbreach of certain obligations of maintenance and support of such programs
\nundertaken by Tumbleweed, or upon the occurrence of certain other events
\ndescribed herein;<\/p>\n
NOW THEREFORE, in consideration of the premises, and other good and
\nvaluable consideration, the receipt and sufficiency of which are hereby
\nacknowledged, the parties hereby covenant and agree as follows:<\/p>\n
Section 1
\n DEFINITIONS<\/p>\n
For the purposes of this Agreement, in addition to definitions set forth
\nelsewhere in this Agreement, the definitions set forth in this Section shall
\napply to the respective capitalized terms immediately preceding each definition.
\nOther capitalized terms shall have the meanings set forth in the License
\nAgreement.<\/p>\n
1.1 “AGREEMENT.” This Source Code Escrow Agreement, including
\n any exhibits, addenda, amendments and modifications hereto.<\/p>\n
1.2 “INSOLVENCY EVENT.” Any one or more of the following: (1)
\n Tumbleweed’s admission in writing of its inability to pay its debts
\n generally as they become due, or (2) a general assignment for the
\n benefit of creditors by Tumbleweed; or (3) voluntary institution of
\n proceedings by Tumbleweed to be adjudicated as bankruptcy; or (4)
\n Tumbleweed’s consent to the filing of a petition of bankruptcy against
\n it; or (5) adjudication of Tumbleweed <\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
by a court of competent jurisdiction as being bankrupt or insolvent;
\n or (6) Tumbleweed’s application for reorganization under any bankrupt
\n act or law, or Tumbleweed’s consent to the filing of a petition
\n seeking such a reorganization; or (7) the entry of a decree against
\n Tumbleweed by a court of competent jurisdiction appointing a receiver,
\n liquidator, trustee, or assignee in bankruptcy or in insolvency
\n covering all or substantially all of Tumbleweed’s property or
\n providing for the liquidation of Tumbleweed’s property or business.<\/p>\n
1.3 “LICENSE AGREEMENT.” The Software License, Development and
\n Services Agreement entered into by the parties as of the 19th day of
\n December, 1997, pursuant to which Tumbleweed has agreed, INTER ALIA,
\n to license the Software to UPS.<\/p>\n
1.4 “SUPPORT SERVICES.” All warranty, maintenance (customer
\n support), error correction, installation, and other technical
\n assistance respecting the Software required to be performed by
\n Tumbleweed pursuant either to Section 9 of the License Agreement or
\n to any software maintenance agreement(s) then in effect between the
\n parties and that has replaced the provisions of Section 9 of the
\n License Agreement.<\/p>\n
Section 2
\n PURPOSE OF AGREEMENT; DEPOSIT OF SOURCE CODE<\/p>\n
2.1 DEPOSIT OF SOURCE CODE. The deposit of Source Code and the
\n expanded license thereof to UPS pursuant to Section 11(e) of the
\n License Agreement are intended to provide assurance to UPS of access
\n to, and the right to use, the Source Code in the event, INTER ALIA,
\n that Tumbleweed fails to provide Support Services as required under
\n the License Agreement or any software maintenance (customer support)
\n agreement respecting the Software. In connection therewith, Escrow
\n Agent agrees to accept from Tumbleweed and Tumbleweed agrees to
\n deposit with Escrow Agent, within the time frames set forth in
\n Section 11(b) of the License Agreement, a copy of the Source Code.
\n Tumbleweed will furnish to Escrow Agent a list describing all Source
\n Code so deposited. Such description will be supplemented and updated
\n by Tumbleweed with each subsequent deposit of Source Code. For
\n each deposit, Escrow Agent will issue receipts to Tumbleweed.<\/p>\n
2.2 UPDATE AND MAINTENANCE OF SOURCE CODE. During the term of
\n this Agreement, Tumbleweed shall keep the Source Code in escrow fully
\n current by depositing a copy of the Source Code corresponding to each
\n and every Enhancement to the Software licensed to UPS from time to
\n time, such deposits to be completed within the time frames set forth
\n in Section 11(b) of the License Agreement.<\/p>\n
2.3 VERIFICATION AND TESTING OF SOURCE CODE. UPS shall have the
\n right to inspect, compile, test and review the Source Code at the time
\n of the initial deposit and at the time of each subsequent deposit of
\n the Source Code in escrow, and from time to time thereafter, to verify
\n that it corresponds to the Software, provided Tumbleweed is given
\n written notice to such verification and testing of the Source Code and
\n provided Tumbleweed is given the right <\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
to supervise the verification, testing and security of the Source
\n Code. Escrow Agent shall permit such inspections and testing of the
\n same promptly upon request. Such inspections and testing shall be at
\n UPS’s expense and shall be conducted at Tumbleweed’s premises or at
\n such other location as Tumbleweed may approve, which approval shall
\n not be unreasonably withheld.<\/p>\n
Section 3
\n TITLE TO SOURCE CODE<\/p>\n
Title to the Source Code shall remain in Tumbleweed, but title to the media
\nupon which the Source Code is stored to be deposited in escrow hereunder shall
\npass to, and vest in, Escrow Agent immediately upon delivery, and in the event
\nthe Source Code shall be delivered to UPS pursuant hereto, title to the media
\nupon which the Source Code is stored shall thereupon pass to and vest in UPS.
\nNotwithstanding it ownership of a copy of the Source Code in such event, UPS
\nshall remain subject to the terms of the license granted pursuant to Section
\n11(e) of the License Agreement with respect to the Use thereof.<\/p>\n
Section 4
\n RELEASE OF SOURCE CODE TO UPS<\/p>\n
4.1 NOTICE OF DEFAULT; RIGHT TO CURE. If UPS shall conclude in good faith
\nthat a release event set forth in Section 11(a) of the License Agreement has
\noccurred (including Tumbleweed’s failure in any material respect to provide any
\nSupport Services that it is obligated to provide, and such failure has resulted
\nin UPS’s inability to use any of the major functional components of the
\nSoftware), it shall so notify Tumbleweed in writing (the “Initial Notice”).
\nSuch notice shall describe such failure in reasonable detail. A copy of such
\nInitial Notice shall be simultaneously delivered to Escrow Agent. For a period
\nof twenty (20) days after receipt of such Initial Notice, Tumbleweed shall have
\nthe right to cure the identified failure. In the event that, at the conclusion
\nof such cure period, UPS shall conclude in good faith that the identified
\nfailures have not been cured, UPS may so notify both Tumbleweed and Escrow Agent
\nin writing and demand that Escrow Agent release the Source Code to UPS (the
\n“Final Notice”). Notwithstanding the foregoing, in the event that the release
\nevent is an Insolvency Event, and in connection therewith, Tumbleweed or its
\ntrustee or receiver rejects the License Agreement, UPS shall not be obligated to
\nprovide the Initial Notice, and the initial notification by UPS shall be deemed
\nto constitute a Final Notice.<\/p>\n
4.2 DISPUTE BY TUMBLEWEED. If Tumbleweed disputes UPS’s determination
\nthat the identified failure occurred and has not been cured following the
\nexpiration of the allowed period. Tumbleweed may so notify Escrow Agent and UPS
\nin writing within four (4) business days after receipt of UPS’s Final Notice
\ndemanding release of the Source Code. Failure of Tumbleweed to give timely
\nnotice of such an objection shall conclusively establish its consent to the
\nrelease of the Source Code to UPS hereunder, whereupon Escrow Agent shall
\npromptly release a copy of the Source Code to UPS. In the event of a dispute,
\nEscrow Agent will continue to store the Source Code without <\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
release, pending (a) joint instructions from UPS and Tumbleweed, (b) resolution
\npursuant to Section 5, or (c) order of a court.<\/p>\n
4.3 INJUNCTIVE RELIEF. Tumbleweed and UPS acknowledge and agree that UPS
\nmay suffer irreparable harm to its business and operations in the event that
\nrelease of the Source Code to UPS pursuant to the terms hereof is wrongfully
\ndelayed by Tumbleweed, and that UPS may petition for injunctive relief to
\nprevent Tumbleweed from seeking to delay such release.<\/p>\n
Section 5
\n ARBITRATION OF DISPUTES RESPECTING RELEASE OF SOURCE CODE<\/p>\n
5.1 ARBITRATION OF DISPUTES. In the event of any dispute respecting
\nrelease of the Source Code under Section 4 hereof, representatives of Tumbleweed
\nand UPS shall meet no later than five (5) days after delivery of Tumbleweed’s
\nnotice objecting to such release and shall enter into good faith negotiations
\naimed at curing the deficiencies alleged to exist. If such persons are unable
\nto resolve the dispute in a satisfactory manner within the next five (5) days,
\neither Tumbleweed or UPS may seek binding arbitration in accordance with the
\nterms of this Section 5.<\/p>\n
5.2 ARBITRATION PROCEDURE. Upon receipt by Escrow Agent of written notice
\nby Tumbleweed or UPS calling for arbitration with respect to any dispute
\nrespecting release of the Source Code under Section 4 hereof, the matter shall
\nbe submitted to binding arbitration. Such arbitration shall be conducted under
\nthe commercial rules then prevailing of the American Arbitration Association, by
\na single arbitrator appointed by the American Arbitration Association. Insofar
\nas possible, such arbitrator shall be, at the time of his selection, a partner
\nor manager of a national or regional accounting firm (including the information
\nprocessing affiliates thereof) not regularly employed by Tumbleweed or UPS, and
\nsuch arbitrator shall be required to have substantial experience in the field of
\ncomputer software technology and licensing. The sole issue for arbitration
\nshall be whether Tumbleweed has failed in any material respect to provide any
\nSupport Services that it is obligated to provide, in accordance with the terms
\nof the applicable agreement. If the arbitrator shall so determine, he shall
\nforthwith so notify the parties, and Escrow Agent shall forthwith deliver the
\nSource Code to UPS. The decision of the arbitrator shall be final and binding
\non Tumbleweed and UPS and may be entered and enforced in any court in competent
\njurisdiction of either party.<\/p>\n
5.3 COSTS OF ARBITRATION. The prevailing party in the arbitration
\nproceedings shall be awarded reasonable attorney fees, expert witness costs and
\nexpenses, and all other costs and expenses incurred directly or indirectly in
\nconnection with the proceedings, unless the arbitrator for good cause determines
\notherwise.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
Section 6
\n LICENSE OF SOURCE CODE<\/p>\n
6.1 LICENSE. In the event that the Source Code shall be delivered out of
\nescrow to UPS pursuant to the terms of this Agreement, UPS shall be licensed by
\nTumbleweed, and Tumbleweed does so hereby license UPS subject to such condition,
\nto use the Source Code pursuant to the expanded license terms set forth in
\nSection 11(e) of the License Agreement.<\/p>\n
6.2 CONFIDENTIALITY UNDERTAKING. UPS shall treat and preserve the Source
\nCode as a Trade Secret of Tumbleweed in accordance with the terms of Section 10
\nof the License Agreement, and in no event shall UPS’s treatment be less secure
\nthan that of UPS’s own propriety source code of similar importance.<\/p>\n
Section 7
\n FEES OF ESCROW AGENT<\/p>\n
7.1 Tumbleweed shall pay to Escrow Agent, annually in advance during the
\nterm hereof, the fees of Escrow Agent at the rate prescribed on the attached
\nExhibit B for its performance of services hereunder.<\/p>\n
Section 8
\n LIMITATION ON OBLIGATIONS OF ESCROW AGENT<\/p>\n
8.1 LIMITED DUTY OF INQUIRY. Escrow Agent shall not be required to
\ninquire into the truth of any statements or representations contained in any
\nnotices, certificates, or other documents required or otherwise provided
\nhereunder, and it shall be entitled to assume that the signatures on such
\ndocuments are genuine, that the persons signing on behalf of any party thereto
\nare duly authorized to execute the same, and that all actions necessary to
\nrender any such documents binding on the party purporting to be executing the
\nsame have been duly undertaken. Without limiting the foregoing, Escrow Agent
\nmay, in its discretion, require from Tumbleweed or UPS additional documents that
\nit deems to be necessary or desirable to aid in the course of performing its
\nobligations hereunder.<\/p>\n
8.2 RIGHT TO INTERPLEADER. Notwithstanding any other provision of this
\nAgreement, in the event Escrow Agent shall receive conflicting demands from
\nTumbleweed and UPS respecting release of the Source Code to UPS hereunder,
\nEscrow Agent may, in its sole discretion, file an interpleader action with
\nrespect thereto in any court of competent jurisdiction.<\/p>\n
8.3 RELEASE AND INDEMNIFICATION OF ESCROW AGENT. Tumbleweed and UPS,
\nseverally, do hereby release Escrow Agent from any and all liability for losses,
\ndamages, and expenses (including attorney fees) that may be incurred on account
\nof any action taken by Escrow Agent in good faith pursuant to this Agreement,
\nand such parties do hereby severally indemnify Escrow Agent and <\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
undertake to hold harmless Escrow Agent from and against any and all claims,
\ndemands, or actions arising out of or resulting from such performance by Escrow
\nAgent under this Agreement.<\/p>\n
Section 9
\n CONTINUED ABILITY TO PERFORM OBLIGATIONS<\/p>\n
The parties hereto respect and warrant that they have full power and
\nauthority to undertake the obligations set forth in this Agreement and that they
\nhave not entered into, nor will they enter into, any other agreements that would
\nrender them incapable of satisfactorily performing their respective obligations
\nhereunder or that would place them in a position of conflict of interest or be
\ninconsistent or in conflict with their respective obligations hereunder.<\/p>\n
Section 10
\n TERM OF AGREEMENT<\/p>\n
The term of this Agreement shall commence on the effective date hereof and
\nshall continue until the Source Code shall be transferred to UPS pursuant to the
\nterms hereof, or, if such transfer shall not have so occurred, this Agreement
\nshall terminate and the Source Code shall be returned to Tumbleweed upon the
\nexpiration of the License Agreement, including any renewals of the term thereof.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
Section 11
\n MISCELLANEOUS<\/p>\n
11.1 COMPLIANCE WITH LAWS. The parties hereto agree that they will comply
\nwith all applicable laws and regulations of governmental bodies or agencies in
\ntheir respective performance of obligations under this Agreement.<\/p>\n
11.2 NO UNDISCLOSED AGENCY; NO ASSIGNMENT. Each party represents that it
\nis acting on its own behalf and is not acting as an agent for or on behalf of
\nany third party. Escrow Agent may not assign its rights or delegate its duties
\nunder this Agreement without the prior written consent of the other parties
\nhereto. Neither Tumbleweed nor UPS may assign its respective rights or delegate
\nits respective duties hereunder except in connection with a permitted assignment
\nand delegation of such party’s respective rights and duties under the License
\nAgreement. Notwithstanding any substitution of a new escrow agent, all other
\nterms of this Agreement shall remain in effect.<\/p>\n
11.3 NOTICES. All notices, requests, demands or other communications
\nrequired or permitted to be given or made under this Agreement shall be in
\nwriting and shall be given by personal service, UPS Next Day Air, telecopy, or
\nby United States certified mail, return receipt requested, postage prepaid to
\nthe addresses set forth below, or such other address as changed through written
\nnotice to the other party.<\/p>\n
If to UPS:<\/p>\n
United Parcel Service
\n 55 Glenlake Parkway
\n Atlanta, Georgia 30328
\n Attn: Joseph R. Moderow
\n Telecopy: (404) 828-6619<\/p>\n
With a copy to Joe Pyne (same address); Telecopy: (404) 828-6619<\/p>\n
If to Tumbleweed:<\/p>\n
Tumbleweed Software Corp.
\n 2010 Broadway Street
\n Redwood City, California 94063
\n Attn: President
\n Telecopy: (650) 369-7197<\/p>\n
If to Escrow Agent:<\/p>\n
DSI
\n Contract Administration<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
Suite 200
\n 9555 Chesapeake Drive
\n San Diego, CA 92123
\n Facsimile: (619) 694-1919<\/p>\n
Notice given by personal service shall be deemed effective on the date it is
\ndelivered, notice sent by UPS Next Day Air shall be deemed effective one
\nBusiness Day after dispatch, notice given by telecopy shall be deemed effective
\non the date of transmission, and notice mailed shall be deemed effective on the
\nthird Business Day following its placement in the mail.<\/p>\n
11.4 GOVERNING LAW. All questions concerning the validity, operation,
\ninterpretation, and construction of this Agreement shall be governed by and
\ndetermined in accordance with the laws of the State of New York, excluding its
\nconflict of law rules.<\/p>\n
11.5 NO WAIVER. No party shall, by mere lapse of time, without giving
\nnotice or taking other action hereunder, be deemed to have waived any breach by
\nthe other party or parties of any of the provisions of this Agreement. Further,
\nthe waiver by any party of a particular breach of this Agreement by any other
\nparty shall be construed as or constitute a continuing waiver of such breach or
\nof other breaches of the same or other provisions of this Agreement.<\/p>\n
11.6 FORCE MAJEURE. No party shall be in default if failure to perform any
\nobligation hereunder is caused solely by supervising conditions beyond such
\nparty’s control, including acts of God, civil commotion, strikes, labor
\ndisputes, or governmental demands or requirements.<\/p>\n
11.7 PARTIAL INVALIDITY. If any part, term, or provision of this Agreement
\nshall be held illegal, unenforceable, or in conflict with any law of a federal,
\nstate, or local government having jurisdiction over this Agreement, the validity
\nof the remaining portions or provisions hereof shall not be affected thereby.<\/p>\n
11.8 COMPLETE STATEMENT OF AGREEMENT. The parties hereto acknowledge that
\neach has read this Agreement, understands it, and agrees to be bound by its
\nterms. The parties further agree that this Agreement is the complete and
\nexclusive statement of agreement respecting the subject matters hereof, and
\nsupersedes all proposals (oral and written), understandings, representations,
\nconditions, warranties, covenants, and all other communications between the
\nparties relating hereto.<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
\nby their respective duly authorized representatives as set forth below:<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
Tumbleweed Software Corp. United Parcel Service General Services Co.<\/p>\n
By: By:
\n —————————— —————————————-
\nTitle: Title:
\n ————————— ————————————-
\nDate: , 199 Date: , 199
\n ——————— — ——————————- —<\/p>\n
Data Securities International, Inc.<\/p>\n
By:
\n ——————————
\nTitle:
\n —————————
\nDate: , 199
\n ——————— —<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
EXHIBIT G<\/p>\n
MARKETING SUPPORT SERVICES<\/p>\n
[ * ]<\/p>\n
—————<\/p>\n
*Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
Exhibit H<\/p>\n
[Reserved]<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
EXHIBIT I<\/p>\n
SERVER SOFTWARE SUBLICENSE TERMS
\n ——————————–<\/p>\n
Any agreement between UPS and any Server Sublicensee shall contain rights
\nconsistent with those enumerated in the Agreement, except that the agreement
\nmust also include terms at least as protective of Tumbleweed’s interests in
\nthe Server Software and Custom Server Software (collectively, the “Server
\nSoftware”) and in the Client Software and Custom Client Software
\n(collectively, the “Client Software” which, with the Server Software, is
\ncollectively referred to herein as the “Software”) as the following:<\/p>\n
1. RESTRICTIONS. The license grant to use the Server Software and
\nreproduce and distribute the Client Software is not transferable, assignable
\nor sublicenseable. Server Sublicensee shall not, nor shall it authorize a
\nthird party to, decompile, reverse engineer or disassemble the Software
\nexcept where such conduct is explicitly permitted under local law. Server
\nSublicensee agrees to pay all required licensing fees and not to exceed the
\nscope of the licenses granted under the Agreement. Server Sublicensee
\nacknowledges and agrees that Tumbleweed may, at any time without notice,
\nincorporate license management software into the Server Software to prevent
\nServer Sublicensee from exceeding the scope of its license. Neither UPS nor
\nTumbleweed has provided any license of its trademarks to Server Sublicensee.<\/p>\n
2. OTHER RESTRICTIONS. Server Sublicensee shall retain any End User
\nlicense agreements included with the Client Software. Server Sublicensee
\nshall not remove, modify or obscure any proprietary rights notices in the
\nSoftware or logos or trademarks displayed in the Software or any documents
\nautomatically generated by it. Server Sublicensee shall not distribute, in
\nconnection with the Software or in the performance of reselling messaging
\nservices, any viruses, trojan horses, worms, time bombs, cancelbots or other
\nprograms containing computer programming defects which are intended to damage
\nor detrimentally interfere with a user’s system or data.<\/p>\n
3. OWNERSHIP. Except as otherwise provided in this Agreement, UPS and
\nits suppliers (including, without limitation, Tumbleweed) shall retain all
\nrights, title and interest in and to all copyrights, trademarks, trade
\nsecrets, patents and all other industrial and intellectual property embodied
\nin or appurtenant to the Software. There are no implied licenses under this
\nAgreement, and any rights not expressly granted to Server Sublicensee
\nhereunder are reserved by UPS or its suppliers.<\/p>\n
4. AUDIT RIGHTS. Server Sublicensee will keep for 3 years proper
\nrecords and books of account relating to Server Sublicensee’s activities
\nregarding the Software. Once every 12 months, UPS or its designee may
\ninspect such records to verify Server Sublicensee’s statements. Any such
\ninspection will be conducted on Server Sublicensee’s office in a manner that
\ndoes not unreasonably interfere with Server Sublicensee’s business
\nactivities. Server Sublicensee shall immediately make any overdue payments
\ndisclosed by the audit. Such inspection shall be at UPS’s expense; PROVIDED,
\nHOWEVER, if the audit reveals overdue payments in excess of 5% of the
\npayments owed to date, Server Sublicensee shall immediately pay the cost of
\nsuch audit, and UPS may conduct another audit during the same 12 month
\nperiod. Server Sublicensee will make available to UPS all relevant records,
\nincluding but not limited to all records relating to activities outside of
\nthe United States.<\/p>\n
5. DISCLAIMER OF WARRANTY; NO PASS THROUGH. UPS shall be responsible
\nfor any warranties extended to Server Sublicensee regarding the Software,
\nexcept that UPS shall have the <\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
right to pass through to Server Sublicensee the proprietary rights
\nindemnification of Tumbleweed, as set forth in Section 14(a) of the
\nAgreement. TUMBLEWEED AND ITS SUPPLIERS DISCLAIM ALL WARRANTIES, EXPRESS OR
\nIMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF TITLE,
\nMERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.
\nServer Sublicensee shall make no warranties to End Users on behalf of UPS or
\nits suppliers.<\/p>\n
6. SERVER SUBLICENSEE’S INDEMNITY. Server Sublicensee shall indemnify
\nUPS and its suppliers against any and all claims, losses, costs and expenses,
\nincluding reasonable attorneys’ fees, which any of them may incur as a result
\nof claims in any form by third parties, including End Users, based upon (i)
\nany representations made by Server Sublicensee to such third parties which
\nare not supported by the Documentation and\/or any other information or
\nmaterials supplied by UPS and\/or its suppliers, or (ii) any acts committed by
\nServer Sublicensee’s End Users during the course of their use of the Software.<\/p>\n
7. LIMITATIONS ON LIABILITY. EXCEPT FOR ANY BREACHES OF SECTIONS
\nRELATING TO LICENSE GRANTS OR CONFIDENTIALITY, IN NO EVENT SHALL EITHER PARTY
\nBE LIABLE FOR LOST PROFITS OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
\nARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (WHETHER FROM BREACH OF
\nCONTRACT OR WARRANTY OR FROM NEGLIGENCE OR STRICT LIABILITY), EVEN IF SUCH
\nPARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION
\nOF LIABILITY SHALL APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF
\nANY LIMITED REMEDY HEREIN. EXCEPT FOR TUMBLEWEED’S INDEMNIFICATION
\nOBLIGATIONS, IN NO EVENT SHALL TUMBLEWEED’S LIABILITY TO SERVER SUBLICENSEE
\nEXCEED THE AMOUNTS ACTUALLY RECEIVED BY TUMBLEWEED ATTRIBUTABLE TO SERVER
\nSUBLICENSEE.<\/p>\n
8. GENERALLY. At its own expense, Server Sublicensee shall comply
\nwith all applicable laws, regulations, rules, ordinances and orders regarding
\nits activities related to this Agreement. Without limiting the foregoing:<\/p>\n
(a) Server Sublicensee shall fully comply with the relevant export
\nadministration and control laws and regulations, as same may be amended from
\ntime to time, to ensure that the Software is not exported (directly or
\nindirectly) in violation of United States law.<\/p>\n
(b) Server Sublicensee shall comply with the U.S. Foreign Corrupt
\nPractices Act and shall not make any payments to third parties which would
\ncause UPS (or any of its suppliers) or Server Sublicensee to violate such
\nlaws.<\/p>\n
9. GOVERNMENT END USERS. The Software is a “commercial item,”
\nconsisting of “commercial computer software” and “commercial computer
\nsoftware documentation,” and is provided to the U.S. Government only as a
\ncommercial end item.<\/p>\n
UPS\/Tumbleweed Confidential December 18, 1997<\/p>\n
\nEX-10.6
\n10
\nEXHIBIT 10.6
\n<\/p>\n Exhibit 10.6<\/p>\n
Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
(Translation)<\/p>\n
DATE: MAR. 31, 1999<\/p>\n
POSTA LICENSE AND DISTRIBUTION AGREEMENT<\/p>\n
This Agreement is made and entered into by and between K.K. HIKARI TSUSHIN
\n(hereinafter referred to as “Kou”) and Tumbleweed Software, K.K. (Hereinafter
\nreferred to as “Otsu”) in connection with Posta System with respect to which
\nTumbleweed is authorized to license and distribute.<\/p>\n
Article 1 (Grant of License and Distribution Right)<\/p>\n
1. Otsu hereby grants to Kou a non-exclusive license (hereinafter
\nreferred to as the “License”) to provide certain services (hereinafter referred
\nto as the “Services”) to Kou’s users for a consideration by using Posta System
\n(hereinafter referred to as the “Products”). The scope of the Products covered
\nby this Agreement will be separately designated by Tumbleweed.<\/p>\n
2. Otsu hereby grants to Kou a non-exclusive right (hereinafter referred
\nto as the “Distribution Right”) to sell the Products to certain customers (in
\nthis Agreement a customer shall mean a third party who will use the Products for
\nsuch internal purposes as authorized by Tumbleweed). Kou may lease the Products
\nto its customers in place of the sale of the Products at request of such
\ncustomers.<\/p>\n
Article 2 (Payment)<\/p>\n
In consideration of the License and the Distribution Right set forth in
\nArticle I hereof, Kou shall pay the following amounts plus consumption tax
\nthereon at the time of the execution of this Agreement:<\/p>\n
– In consideration of acquisition of the License [ * ] payable
\n to Tumbleweed;<\/p>\n
—————<\/p>\n
*Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
– In consideration of acquisition of the Distribution Right,
\n [ * ]payable to Tumbleweed; and
\n – As a minimum license fee for the initial contract year are
\n [ * ] and [ * ] payable to Tumbleweed as a
\n first payment in this date of contract. After that, three months
\n later, six months later, [ * ]. But, it isn’t kept
\n if this contract ends with the responsibility of Otsu before the
\n payment completes.<\/p>\n
Article 3 (Compliance)<\/p>\n
Kou shall comply with the rules, regulations, instructions, etc. prescribed
\nby Otsu and shall exert its sincere effort to expand the market share for the
\nServices and Products when Kou exercises the rights granted by Article I hereof.<\/p>\n
Article 4 (Restrictions)<\/p>\n
1. Unless otherwise explicitly provided for in this Agreement, Kou shall
\n not transfer, sublicense or loan Kou’s rights.<\/p>\n
2. Kou shall not provide the Services outside of Japan and shall not
\n directly or indirectly sell or distribute the Products outside of
\n Japan.<\/p>\n
3. Kou shall not reproduce, amend source code, reverse engineer or
\n decompile the Products in any method whatsoever. Otsu shall be
\n entitled to insert administration software into the Products without
\n prior notice at any time in order to prevent Kou or Kou’s users or
\n customers from conducting any activities beyond the extent authorized
\n by Otsu in advance.<\/p>\n
4. Any trademarks, copyright indications, advertisements and promotions
\n in relation to the Products and the Services will be subject to
\n mutual agreement both Kou and Otsu.<\/p>\n
Article 5 (Training in relation to the Products)<\/p>\n
—————<\/p>\n
*Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
2<\/p>\n
Kou may receive training in relation to the Products in such method, period
\n and content as designated by Otsu. Under this Agreement, Kou may receive
\n such training free of charge only [ * ] of this
\n Agreement to the extent that three or less persons for each occasion will
\n receive the training for one time each of education of API and Posta
\n administrators. Upon request of Kou, any other training and education
\n than the above-mentioned training will be provided by Otsu for a
\n consideration in such way as separately designated by Otsu.<\/p>\n
Article 6 (Invoice Price)<\/p>\n
The invoice prices of the Products shall be equal to the respective amounts
\n set forth in such invoice price table as separately designated by Otsu plus
\n consumption tax thereupon.<\/p>\n
Article 7 (Appointment of Sub-distributors)<\/p>\n
Kou may appoint a sub-distributors of the Products with notify to Otsu’s.<\/p>\n
Article 8 (Loan of the Products for Providing the Services)<\/p>\n
In the event that Kou intends to provide the Services to its users for a
\n consideration by using the Products, Otsu will loan such number of the
\n Products as necessary for providing the Services free of charge only during
\n the effective term of this Agreement. Provided that the free loan of the
\n Products shall be subject to the completion of the payment set forth in
\n Article 2 hereof.<\/p>\n
Article 9 (Protection of Third Party Licensor’s Copyright)<\/p>\n
Kou acknowledges that such software of a third party licensor (hereinafter
\n referred to as the “Licensor”) as is integrated with the Products shall be
\n used <\/p>\n
—————<\/p>\n
*Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
3<\/p>\n
for the sole purpose of transmission of files by using the Products and
\n that the Licensor’s software shall not be separated from the Products and
\n shall not be used independently. Kou shall make a notification thereof to
\n any customers (who will use the Products) and any users (who will use the
\n Services provided by Kou) and shall have them comply with the above
\n restrictions.<\/p>\n
Article 10 (Payment of Running Royalty)<\/p>\n
1. In the event that any sales volume of Kou exceeds such number of
\n delivery of files or such number of users as is covered by the
\n [ * ] minimum license fees after Kou commences to provide the
\n Services by using the Products, Kou shall pay Otsu such running
\n royalty (plus consumption tax thereupon) as will be separately
\n designated by Otsu.<\/p>\n
2. Kou shall prepare, maintain and provide to Otsu accurate records based
\n upon which the above running royalty shall be calculated. During the
\n effective period of this Agreement and thereafter Otsu and its
\n designee(s) shall be entitled to examine and make each copy of the
\n above records.<\/p>\n
3. In accordance with the terms of this Agreement, Otsu will send Kou an
\n invoice covering the running royalty. Such invoice will be closed at
\n the end of the month in the invoice is received by Kou, who shall pay
\n the amount designated in the invoice by remitting the same to such
\n bank account as separately designated by Otsu no later than the end of
\n the following month.<\/p>\n
Article 11 (Sales Plan)<\/p>\n
Kou shall prepare sales plans for the Products an the Services provided by
\n using the Products in such a form as separately designated by Otsu. Kou
\n shall submit to Otsu such plans every three months on the date separately
\n designated.<\/p>\n
—————<\/p>\n
*Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
4<\/p>\n
Article 12 (Supply of the Products)<\/p>\n
Any individual sales agreement of the Products shall become effective when
\n Kou places an order to Otsu for shipment of the Products and such order is
\n approved by Otsu orally or in writing. Otsu shall deliver the Products to
\n such place as designated by the order.<\/p>\n
Article 13 (Payment of Sales Price of the Products)<\/p>\n
After delivering the Products to such place as designated by Kou, Otsu will
\n send an invoice of sales price of the Products to Kou in accordance with
\n the terms of this Agreement. The invoiced amount shall be closed at the
\n end of the month in which the invoice is received by Kou, who shall pay the
\n amount designated in the invoice by remitting the same to such bank account
\n as separately designated by Otsu no later than the end of the after three
\n month.<\/p>\n
Article 14 (Entrustment of Maintenance Services)<\/p>\n
With respect to maintenance services for the Products to be provided by Kou
\n to a customer, Kou shall enter into a maintenance agreement with such
\n customer with cooperation of Otsu. Kou shall pay Otsu annual maintenance
\n fees which will be separately designated by Otsu.<\/p>\n
Article 15 (Prohibition of Modification)<\/p>\n
Kou shall not modify the Products and shall prevent its customers and users
\n from modifying the Products unless otherwise agreed upon by Otsu in writing
\n and in advance.<\/p>\n
Article 16 (Provision of APIs)<\/p>\n
1. At Kou’s request, Otsu will provide Kou with APIs in order for Kou to
\n integrate the Products into any other software. In such event, Kou
\n shall enter into a separate API license agreement as will be
\n designated by Otsu.<\/p>\n
2. In the event that Kou intends to integrate the Products with any other
\n software by using APIs, Otsu will provide Kou with technical support<\/p>\n
5<\/p>\n
upon Kou’s request. Terms and conditions of supply of such technical
\n support will be determined by both parties upon mutual consultation
\n depending upon the content of technology required by Kou.<\/p>\n
3. The ownership of any media containing APIs belongs to Otsu and any and
\n all rights relating to APIs will be reserved by Otsu or its licensors.<\/p>\n
Article 17 (Termination)<\/p>\n
1. In the event that Kou or Otsu falls under any of the following, the
\n other party shall be entitled to forthwith terminate this Agreement
\n without any demand or notice. In such event, all of Kou’s or Otsu’s
\n debts to the other party shall become due and payable and Kou or Otsu
\n shall forthwith pay all amounts thereof to the other party:<\/p>\n
(a) If the party is subject to any provisional attachment,
\n preliminary injunction, attachment, or any petition for
\n bankruptcy and reorganization or any other legal proceeding which
\n will be likely to interfere with the business of the party;<\/p>\n
(b) If the party transfers any right or obligation arising hereunder
\n to any third party or causes any third party to take over the
\n same; or
\n (c) If the party breaches any of the provisions of this Agreement.<\/p>\n
2. In the event that Otsu’s right to use the Licensor’s software which
\n constitutes components of the Products expires or terminates for
\n whatever reasons, Otsu may forthwith terminate this Agreement.<\/p>\n
3. Upon any expiration or termination of this Agreement, Kou shall not be
\n entitled to request any compensation from Otsu due to loss of the
\n License and the Distribution Right, etc.<\/p>\n
Article 18 (Warranty and Damages)<\/p>\n
1. In the event that there is a defect in media of the Products for any
\n reason attributable to Otsu, Otsu’s liability shall be limited to
\n replacement of the non-defective products or repayment of the purchase
\n price of the Products.<\/p>\n
6<\/p>\n
2. Users of the Products (namely, any of Kou, Kou’s customers and users)
\n shall be responsible for any use, operation and administration of the
\n Products and Otsu shall not be liable for any damage of those users
\n arising from the use of the Products.<\/p>\n
Article 19 (Confidentiality)<\/p>\n
During the effective period of this Agreement and thereafter, Kou shall not
\n disclose to any third party any technical or business confidential
\n information which is obtained by Kou under this Agreement or in connection
\n with any transaction hereunder and shall not use such confidential
\n information for any other purposes than that of this Agreement.<\/p>\n
Upon expiration or termination of this Agreement, Kou shall return to Otsu
\n the Products loaned to Kou hereunder, media containing APIs and any other
\n materials including Otsu’s confidential information (together with all
\n copies thereof).<\/p>\n
Article 20 (Term, etc.)<\/p>\n
This Agreement shall become effective as of the date when both parties have
\n affixed their names and seals hereon and shall remain in force and effect
\n for [ * ] thereafter. Unless otherwise indicated by either
\n party no later than one month prior to any expiration date, this Agreement
\n shall be automatically renewed for additional [ * ] periods under
\n the same conditions hereof. Provided that no initial payment for
\n acquisition of the License and the Distribution Right shall be required in
\n any renewal period and annual minimum license fees applicable to any
\n renewal period shall be agreed upon in advance based upon mutual
\n consultation with Otsu.<\/p>\n
Article 21 (Good Faith)<\/p>\n
1. Kou and Otsu shall cooperate with each other to sincerely perform this
\n Agreement in good faith.<\/p>\n
—————<\/p>\n
*Confidential treatment has been requested with respect to certain
\n information contained in this document. Confidential portions have been
\n omitted from the public filing and have been filed separately with the
\n Securities and Exchange Commission.<\/p>\n
7<\/p>\n
2. With regard to any matters not provided for in this Agreement or any
\n matters that may [be] subject to dispute, both parties shall discuss
\n such matters in good faith.<\/p>\n
In the event any dispute arises between the parties in connection with this
\n Agreement, the Tokyo District Court shall have an exclusive jurisdiction
\n for the first instance.<\/p>\n
Article 22 (Jurisdiction)<\/p>\n
In the event any dispute arises between the parties in connection with this
\n agreement, the Tokyo District Court shall have an exclusive jurisdiction
\n for the first instance.<\/p>\n
IN WITNESS WHEREOF, Kou and Otsu have executed this Agreement by affixing
\ntheir names and seals in duplicate, one copy of which is retained by each of the
\nparties.<\/p>\n
(Kou):<\/p>\n
2-1-1 Otemachi Chiyoda-ku Tokyo
\n K.K. HIKARI TSHUSHIN
\n President Yasumitsu Shigeta<\/p>\n
(Otsu):<\/p>\n
Kanetatsu Bldg. 5F
\n 2-17 Hayabusa-cho Chiyoda-ku Tokyo
\n Tumbleweed Software K.K.
\n Representative Shinji Eura<\/p>\n
8
\n<\/text>
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