**Exhibit 10.39**

 

**SERVICES AGREEMENT [DOMESTIC]**

 

 

THIS SERVICES AGREEMENT (“Agreement”)is made and entered into as of **[DATE]**(the “Effective Date”), by and between Primal Solutions, Inc., a Delawarecorporation, with its principal of business at 18881 Von Karman Avenue, Suite500, Irvine, California 92612 (“Primal”), and **[COMPANYNAME]**, a  **[STATE]****[ENTITYTYPE]** with its principal place of business at **[ADDRESS]**(“Company”).

This Agreement providesthe terms and conditions under which Primal will provide certain services toCompany.  Based on the foregoing, and thecovenants, representations, and warranties contained in this Agreement, theparties agree as follows:

**AGREEMENT**

**1****                                        ****Conditions Precedent****.** Primal’s obligations are expressly conditioned on Primal’s prior receiptof:  (i) a copy of the Agreement executedby an authorized signatory of Company and (ii) any advance payments set forthin Exhibit A.

**2.             Services.**

**2.1****                              **Statements of Work.  Primal shalluse commercially reasonable efforts to render, in a timely and professionalmanner, the services (the “Services”) set forth on the statement(s) of workthat are attached as Exhibit A or that may be executed from time to time by theparties (“Statements of Work”).  Companyshall make available to Primal any data; information; access to facilities,software, or other resources; and any other materials required by Primal toperform the Services.

**2.2****                              **Prerequisites.  Primal shall procure, on Company’s behalf andat Company’s expense, or Company shall purchase, at its sole expense, the thirdparty hardware and software as set forth on Exhibit A (such hardware and software,the “Prerequisites”) at the prices and on the terms set forth on Exhibit A.

**2.3****                              **Change Orders.  Companymay submit to Primal written requests to change the scope of Services describedin a Statement of Work (each such request, a “Change Order Request”).  Primal may, in its discretion, honor suchChange Order Request, but Primal has no obligation to do so.  If Primal elects to honor such a Change OrderRequest, then Primal will promptly notify Company if it believes that theChange Order Request requires an adjustment to the fees or to the schedule forthe performance of the Services.  If so,the parties will negotiate in good faith a reasonable and equitable adjustmentto the fees or schedule, as applicable. Primal will continue to perform Services pursuant to the existingStatement of Work and will have no obligation to honor any Change Order Requestunless and until the parties have agreed in writing to such an adjustment.

**2.4**                               Approvals.  Primal shall submit completed deliverablesunder any Statement of Work (“Deliverables”) to Company for approval asfollows:  Primal shall deliver suchDeliverable(s) to Company (e.g., by notifying Company that such Deliverable(s)are available to be viewed on Company’s servers).  Company shall approve the Deliverable(s) inwriting within two business days of its review. Failure by Company to approve such Deliverable(s) in writing within suchtwo business days:  (i) will be deemed anacceptance of such Deliverable(s) and (ii) may result in delays in productionor delays in delivery of the completed performance of the Services; provided,further, that any use by Company of any Deliverables, other than for testingand acceptance purposes, will constitute Company’s full acceptance of suchDeliverable(s).  If within such twobusiness days, Company notifies Primal in writing that it does not accept anyDeliverable(s), it shall promptly provide to Primal a detailed writing listingCompany’s reasons for not accepting each Deliverable.  Such notice of non-acceptance will contain amutually-agreed on extended completion date for the Services.  Primal shall use commercially reasonableefforts to correct the listed deficiencies and shall re-submit suchDeliverable(s) in accordance with this Section.

**3.****                                     ****Ownership ofIntellectual Property Rights.**

**3.1         **Pre-existing Intellectual Property Rights. Except as expressly provided in this Agreement, neither party will gainany ownership or other interest in or to any of the intellectual property orproprietary information of the other party by reason of this Agreement,operation of law, or otherwise.

**3.2         **Deliverables.  Subjectto Company’s compliance with its payment obligations under this Agreement, Primalhereby assigns and agrees to assign all right, title and interest, includingwithout limitation, all copyrights, patents, trademarks and all otherintellectual property and proprietary rights in the Deliverables (and allrenewals, extensions, reissues and the like thereof) to Company.

**3.3         **Primal Tools. Notwithstanding anything to the contrary in this Agreement and withoutlimitation of Section 3.1, in developing the Deliverables, Primal may usecertain software, objects, textures,scripts, code, and other development tools that existed before the EffectiveDate and may have developed derivatives of the foregoing in developingthe Deliverables that have:  (i) substantially the same functionality as theitem from which they were derived and (ii) general applicability apartfrom the Deliverables, (collectively, the “Primal Tools”).  Primal will own the Primal Tools;provided however, that Primal shall, and hereby does grant Company a 

 

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                                                royalty-free, perpetual, irrevocableworldwide right and license to use, copy, modify, display, perform, andtransmit the Primal Tools as incorporated in the Deliverables, so long as suchuse relates solely to its use of the Deliverables.  Company may freely assign or sublicense suchlicense but only in connection with its assignment or sublicense of theDeliverables.

**3.4         **License Back.  Companyshall, and hereby does, grant Primal a non-exclusive, irrevocable, perpetual, worldwide,royalty-free right and license to use, copy, modify, display, perform andtransmit the Deliverables.  Primal maysublicense these rights, but may not assign them except as permitted inconnection with a permitted assignment of this Agreement in accordance withSection 11.4.

**4.**                                      **Monetary Provisions**.

4.**1****                               **Rate; Invoices; Payments. Company shall pay all invoices, without deduction or offset, within 30days of receipt.  All payments shall beforwarded to “Accounts Receivable” at the Primal address specified above.  Outstanding amounts not paid when due willaccrue interest at the lower of 11⁄2% per month or the highest monthly rateallowed by applicable law, whichever is lower. The obligation to pay and the payment of any such interest will notoperate to extend any payment due date, and Primal waives no rights byaccepting late payment with interest. Company’s payment of all sums due Primal is a condition precedent toCompany’s rights under this Agreement, including, without limitation, thoseunder Section 3.2.

**4.2**                               Expenses.  Company shallreimburse Primal for its reasonable, documented costs and expenses incurreddirectly in connection with the Services (including, without limitation, coachairfare, meals, phone, and lodging).

**4.3**                               Taxes.  All amountspayable by Company are exclusive of (and Company shall be solely responsiblefor) all taxes imposed by any governmental entity on the transactionscontemplated by this Agreement, excluding taxes based on Primal’s netincome.  When Primal has the legalobligation to pay or collect such taxes, it will invoice Company unless Companyprovides Primal with a valid tax exemption certificate authorized by theappropriate taxing authority.

**5.****                                     ****Term; Termination****.**

**5.1****                              **Term.  The term of this Agreement (the “Term”) willcommence on the Effective Date and will continue for five years unless earlierterminated as provided below.  Thereafter,this Agreement will renew automatically for unlimited, successive one yearrenewal Terms until terminated, unless a party gives written notice to theother of its intent not to renew at least 60 days prior to the expiration ofthe then-current Term.

**5.2****                              **Termination by Right.  Either partymay terminate this Agreement at any time upon written notice in the event of amaterial breach by the other party, if such breach remains uncured for 60 daysfollowing such written notice.  Primalmay also terminate this Agreement:  (i) uponwritten notice if Company breaches any of its payment obligations to Primal andsuch breach remains uncured for 30 days following such written notice or (ii) onfive days written notice, as provided in Section 8.2.  Company may also terminate this Agreementimmediately as provided in Section 6.1(b). Termination will be effective immediately and automatically on theexpiration of the applicable notice period, without further notice or action byeither party.

**5.3**                               General Termination Matters.  Allliabilities accruing up to the expiration of the Term or any termination ofthis Agreement will survive such date. Within 30 days of any termination, Company shall pay to Primal the totalamount of all fees and expenses that would have become payable through the endof the then-current Term.  All Statementsof Work will terminate.  The followingprovisions will survive expiration or termination:  1, 3, 4, 5.3, 6.4, 7, 8, 9, 10, and 11.

**6.****                                     ****Representations andWarranties****.**

**6.1**                               Deliverables Warranty.

**6.1(a)****                **Warranty.  For 90 daysafter their acceptance by Company, Primal warrants that:  (i) the Deliverables will operate free ofany material errors and in material conformance with their documentation andspecifications and (ii) the Deliverables will interoperate with thePrerequisites free of any material errors provided that the Prerequisites arefunctioning properly.

**6.1(b)****                **Warranty Claims Procedure. Any failure of the Deliverables to operate in accordance with theforegoing warranty will be deemed an “Error.” Company shall promptly notify Primal of, and adequately describe, theError, and Company’s exclusive remedy and Primal’s sole obligation will be thefollowing:  (i) to provide Companywith a replacement copy of the applicable Deliverable containing any correctionor modification needed to remedy the Error or (ii) to use commerciallyreasonable efforts to correct the Error, which may include consultation withthe manufacturer or licensor of the Prerequisites.  If Primal cannot remedy the Error in 90 daysfrom Company’s notification thereof, Company shall have the right to terminatethis Agreement immediately on written notice to Primal.  Primal shall not be obligated to remedy anyError which cannot be adequately reproduced by Primal.  The warranties set forth in this Section donot apply if the Deliverables have been: (i) altered, except by Primal or in accordance with itsinstructions; (ii) used in conjunction with another product (except for thePrerequisites) resulting in the Error; (iii) damaged by improperenvironment, abuse, misuse, accident or negligence; or (iv) used withoutany update to the Deliverables provided to Company.

**6.2****                              **Prerequisites.  IfPrimal determines that an Error has been caused by the Prerequisites or anyother third-party product, Primal shall inform Company, and Company shall havethe right to engage Primal to attempt to fix such Error, for which it willcompensate Primal in accordance with its standard rates for time andmaterials.  Primal shall reasonablycooperate, at Company’s expense, in assisting Company to enforce 

 

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                                                any warranties provided by themanufacturer or licensor of the Prerequisites.

**6.3****                              **Service Warranty. ** **Primal hereby represents andwarrants to Company that it will perform all Services in a competent,workmanlike manner.

**6.4**                               By Each Party.** **Each party representsand warrants to the other that: (i) it has the full corporate right, power, andauthority to enter into and to perform the acts required of it under thisAgreement; (ii) the execution and delivery of this Agreement and theperformance of its obligations do not and will not violate any agreement towhich it is or will be otherwise bound; and (iii) it will comply with allapplicable laws, rules, and regulations in exercising its rights and performingits obligations under this Agreement.

**7.****                                     ****Disclaimers; Exclusions;Limitations****.**

**7.1**                               DISCLAIMER OF WARRANTIES.  EXCEPT AS EXPRESSLY SET FORTH IN THISAGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY SPECIFICALLY DISCLAIMS, ALLEXPRESS AND IMPLIED WARRANTIES OF EVERY KIND RELATING TO THE SERVICES,PREREQUISITES, AND DELIVERABLES AND USE OF ALL OF THE FOREGOING (INCLUDING,WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULARPURPOSE, AND NON-INFRINGEMENT), AS WELL AS ANY WARRANTIES THAT THE DELIVERABLES,PREREQUISITES, OR SERVICES WILL ACHIEVE A PARTICULAR RESULT, OR WILL BEUNINTERRUPTED OR ERROR-FREE.  OTHER THANAS EXPRESSLY PROVIDED IN SECTION 6.1 AND IN SECTION 6.2, PRIMAL MAKES NOREPRESENTATIONS AND WARRANTIES, AND ASSUMES NO OBLIGATIONS OR LIABILITY,ARISING FROM, RELATING TO, OR CONNECTED WITH THE PREREQUISITES.

**7.2**                               EXCLUSION OF DAMAGES.  EXCEPT INCONNECTION WITH A CLAIM BASED ON AN INFRINGEMENT OF THE OTHER PARTY’SINTELLECTUAL PROPERTY RIGHTS OR UNAUTHORIZED USE OR DISCLOSURE OF ITSCONFIDENTIAL INFORMATION, IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER ANYTHEORY OF LIABILITY FOR ANY INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, ORCONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, ANY SUCHDAMAGES ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM NEGLIGENCE ORSTRICT LIABILITY), INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REVENUE,DATA, OR USE, OR FOR INTERRUPTED COMMUNICATIONS, OR FROM ANY DEFECT, ERROR, ORMALFUNCTION OF THE SERVICES, PREREQUISITES, OR DELIVERABLES, EVEN IF THE OTHERPARTY OR ANY OTHER PERSON HAS BEEN ADVISED OR SHOULD KNOW OF THE POSSIBILITY OFSUCH DAMAGES.

**7.3****                              **LIMITATION OFLIABILITY.  EXCEPT IN CONNECTION WITH A CLAIM BASED ON ANINFRINGEMENT OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS OR UNAUTHORIZEDUSE OR DISCLOSURE OF ITS CONFIDENTIAL INFORMATION, IN NO EVENT WILL THE TOTAL,AGGREGATE LIABILITY OF EITHER PARTY TO THE OTHER ARISING FROM, RELATING TO, ORCONNECTED WITH THIS AGREEMENT EXCEED THE AMOUNT OF THE SUMS OWED PRIMAL UNDERTHIS AGREEMENT.

**7.4****                              **BASIS OF BARGAIN.  THEPARTIES HAVE AGREED THAT THE DISCLAIMERS, EXCLUSIONS, AND LIMITATIONS SPECIFIEDIN THIS AGREEMENT WILL REMAIN IN FULL FORCE AND EFFECT EVEN IF ANY SUCH SECTION(OR PORTION THEREOF) IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.  THE PARTIES ACKNOWLEDGE AND AGREE THAT PRIMALHAS SET ITS PRICES AND ENTERED INTO THIS AGREEMENT IN RELIANCE ON SUCH DISCLAIMERS,EXCLUSIONS, AND LIMITATIONS, WHICH ALLOCATE THE RISK BETWEEN PRIMAL AND COMPANYAND FORM A BASIS OF THE BARGAIN BETWEEN THE PARTIES.

**8.****                                     ****Indemnity****.**

**8.1****                              **By Primal. Primal shall defend, indemnify, and hold Company and its affiliates andeach of their respective shareholders, directors, officers, successors, andassigns harmless from any damage, loss, cost, liability, or expense (includingreasonable attorneys’ and experts’ fees) (collectively, “Losses”) arising from,relating to, or connected with any claim, action, or demand (a “Claim”) broughtby a third party alleging:  (i) that the Deliverablesinfringe any United States copyright or United States patent in force on orbefore the Effective Date; (ii) death or personal injury caused by Primal’snegligence; (iii) violation of applicable law; or (iv) gross negligence orwillful misconduct by Primal.  Primal shall have no obligation to indemnify Companyif Company is more than 30 days late with respect to any fees that it owesPrimal.

**8.2****                              **Infringement Claims.  IfCompany’s right to use the Deliverables, in Primal’s opinion may be enjoineddue to the type of claim specified in Section 8.1(i) above (an “InfringementClaim”), then Primal may, at its sole option and expense:  (i) procure for Company the right tocontinue using the Deliverables; (ii) replace or modify the Deliverablesso that they are non-infringing; or (iii) if options (i) and (ii) abovecannot be accomplished despite Primal’s reasonable efforts, then Primal mayterminate this Agreement on five days written notice.  Primal willhave no obligation whatsoever in connection with an Infringement Claim to theextent that it results from: (i) modifications to the Deliverables made bya party other than Primal, if a claim would not have occurred but for suchmodifications; (ii) the combination, operation or use of the Deliverableswith equipment, devices, software or data that are not Prerequisites orotherwise expressly authorized by Primal, if a claim would not have occurredbut for such combination, operation or use; (iii) Company’s failure to useupdated or modified Deliverables provided by Primal; (iv) Primal’s use of anydesigns or specifications provided by Company; or (v) Company’s use of theDeliverables other than in accordance with this Agreement.  This Section 8 states Primal’scomplete obligation and Company’s 

 

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                                                sole and exclusive remedy with respect toan Infringement Claim.

**8.3****                              **By Company. Company shall defend, indemnify, and hold Primal and its affiliates andeach of their respective shareholders, directors, officers, successors, andassigns from any and all Losses arising from, relating to, or connected withany Claim brought by a third party alleging: (i)  a breach by Company of any ofits representations or warranties under this Agreement; (ii) an act or omissionby Company causing Primal to breach this Agreement or infringe the intellectualproperty rights of a third party; (iii) death or personal injury caused byCompany’s negligence; or (iv) violation of applicable law; or (iv) grossnegligence or willful misconduct by Company.

**8.4**                               IndemnificationProcedure.  A party seeking indemnification pursuant tothe terms of this Section (an “Indemnified Party”) must:  (i) promptly notify the other party (the“Indemnifying Party”) in writing of the Claim; (ii) grant the IndemnifyingParty sole control of the defense and settlement of the Claim, provided thatthe Indemnified Party has the right to reasonably approve the terms of anysettlement before being bound by it, such approval not to be unreasonablywithheld or delayed; and (iii) provide the Indemnifying Party, at suchparty’s expense, with all assistance, information and authority reasonablyrequired for the defense and settlement of the Claim.

**9.****                                     ****Confidentiality****.**

**9.1****                              **Definition. Confidential Information means information and materials (regardless ofwhether in oral, written or electronic form) concerning a party’s operations,business, or intellectual property rights that are designated as confidentialor that, based on its nature or the nature of its disclosure, a reasonableperson would know is confidential, including, without limitation, the terms ofthis Agreement.  “ConfidentialInformation” does not include information that: (i) is known by such party atthe time of receipt from the other party and is not subject to an independentobligation of confidentiality; (ii) is now or becomes generally known in theindustry through no fault of the receiving party; (iii) is acquired from athird party in rightful possession thereof and under no obligation ofconfidentiality; or (iv) is otherwise lawfully and independently developed bysuch party without reference to the other party’s Confidential Information.

**9.2****                              **Obligation. Each party shall:  (a) not use orauthorize the use of the Confidential Information of the other party for anypurpose other than to fulfill its obligations under this Agreement; (b) holdsuch Confidential Information in strict confidence and protect suchConfidential Information with the same degree of care (but no less than areasonable degree of care) normally used to protect its own similarConfidential Information; (c) take all steps as may be reasonably necessary toprevent such Confidential Information from being revealed to any person orentity other than to those of its employees who have a need to know suchConfidential Information to enable it to fulfill its obligations under thisAgreement; and (d) not copy or reproduce any Confidential Information in anymedia (except as may be strictly necessary to enable it to fulfill itsobligations under this Agreement).  Theparties further agree that if either party is directed to disclose any portionof any Confidential Information of the other party by operation of law, rule,or regulation, it shall immediately notify the other party and, at the solecost of the other party, shall assist the other party in seeking a suitableprotective order or assurance of confidential treatment.

**10.****                              ****Enforcement Matters****.**

**10.1****                       **Governing Lawand Jurisdiction.  This Agreement and all matters arising from,relating to, or connected with this Agreement will be governed by the laws ofthe State of California without regard to conflicts of laws principles.  With respect to any litigation arising from,relating to, or connected with this Agreement, each party irrevocably:  (i) submits to the exclusive jurisdiction ofany state or federal court located in Orange County, California and (ii)waives, to the fullest extent permitted by law, the defenses of lack ofpersonal jurisdiction, inconvenient forum, and improper venue.

**10.2****                       **Attorneys’ Fees. The prevailing party in any action or proceeding arising from, relatingto, or connected with this Agreement will be awarded its attorneys’ and experts’fees.  Any award of attorneys’ fees madeunder this Section 10.2 will not accrue towards the Limitation of Liability inSection 7.3.

**10.3****                       **InjunctiveRelief.  Company acknowledges and agrees that Primal’sintellectual property rights are of a unique and extraordinary character andthat the unauthorized use thereof would cause Primal irreparable harm, whichcould not be adequately remedied by monetary damages.  Accordingly, if Company infringes orthreatens to infringe Primal’s intellectual property rights, Primal shall havethe right to obtain injunctive or other equitable relief on an expedited basis,without the need to post a bond or other security.

**11.****                              ****Miscellaneous****.**

**11.1****                       **Notices.  Any notices or other communications permittedor required will be in writing and be deemed given: (i) on delivery, ifpersonally delivered, (ii) on delivery, if delivered by reputable overnightcourier that provides proof of delivery, or (iii) three business daysfollowing deposit in the United States mail, first class, postage prepaid,certified or registered, and return receipt requested.

**11.2****                       **Export Controls.  Both parties shall adhere toall applicable laws, regulations and rules relating to the export of technicaldata.

**11.3****                       **Force Majeure.  Neither party will be liable forany failure or delay in the performance of its obligations (except for thepayment of money) because of strikes, shortages, riots, insurrection, fires,flood, storm, explosions, earthquakes, acts of God, war, terrorism,governmental action, supplier problems, or any other force majeure event.  Each party will use its reasonable efforts tonotify the other party of the occurrence of such an event within three business

 

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                                                days of obtaining knowledge that such eventwill cause such a failure or delay.

**11.4****                       **General Matters.  The parties are independent contractors and no jointventure, partnership, employment, agency or similar arrangement is createdbetween them.  Neither party has theright or power to act for or on behalf of the other or to bind the other in anyrespect.  This Agreement will be binding oneach party and its successors and permitted assigns.  This Agreement may not be assigned by eitherparty without the other party’s prior written consent, except that Primal mayassign this Agreement in connection with a merger, sale of its businessrelating to this Agreement, stock purchase, reorganization or the like.  This Agreement (including the Exhibits andStatements of Work hereto, which are incorporated herein by this reference)contains the entire understanding of the parties regarding its subject matter,and supersedes all prior and contemporaneous agreements and understandingsbetween the parties regarding thereto. If the terms of this Agreement conflict with Exhibit A, this Agreement willgovern and have precedence.  Except asexpressly provided in this Agreement, this Agreement may only be modified,supplemented, amended or waived in a writing signed by both parties.  No failure or delay by a party in exercisingany right, power, or privilege under this Agreement will operate as a waiverthereof.  The invalidity orunenforceability of any provision of this Agreement will not affect thevalidity or enforceability of any other provision of this Agreement, all ofwhich will remain in full force and effect. This Agreement will be construed as if drafted jointly by the parties,and either party’s failure to obtain legal counsel or other advice inconnection with this Agreement, constitutes a waiver of any objection or claimthat may be based on such failure.  This Agreement may be executed in counterparts, bothof which taken together will constitute one and the same document.  Facsimile signatures will be treatedin all respects as having the same effect as an original signature.

 

The parties haveexecuted this Agreement as of the Effective Date.
| **PRIMAL SOLUTIONS, INC.** | ** **        | **COMPANY** |
|----------------------------|-------------------|-------------|
| ** **                 | ** **        | ** **  |
| ** **                 | ** **        | ** **  |
| **By:**               | ** **        | ** **  | **By:** |   |
| * *                   | *(Signature)*     | * *    | ** ** | *(Signature)* |
| **Name:**                  | ** **        | ** **  | **Name:** |   |
| * *                   | *(Print or Type)* | * *    | ** ** | *(Print or Type)* |
| **Title:**            | ** **        | ** **  | **Title:**  |   |
| * *                   | *(Print or Type)* | * *    |   | *(Print or Type)* |

 

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