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 Delaware
corporation, with its principal of business at 18881 Von Karman Avenue, Suite
500, Irvine, California 92612 (“Primal”), and [COMPANY
NAME], a  [STATE]  [ENTITY
TYPE] with its principal place of business at [ADDRESS] (“Company”).


This Agreement provides
the terms and conditions under which Primal will provide certain services to
Company.  Based on the foregoing, and the
covenants, representations, and warranties contained in this Agreement, the
parties agree as follows:


AGREEMENT


1                                         Conditions Precedent. 
Primal’s obligations are expressly conditioned on Primal’s prior receipt
of:  (i) a copy of the Agreement executed
by an authorized signatory of Company and (ii) any advance payments set forth
in Exhibit A.


2.             Services.


2.1                               Statements of Work.  Primal shall
use commercially reasonable efforts to render, in a timely and professional
manner, the services (the “Services”) set forth on the statement(s) of work
that are attached as Exhibit A or that may be executed from time to time by the
parties (“Statements of Work”).  Company
shall make available to Primal any data; information; access to facilities,
software, or other resources; and any other materials required by Primal to
perform the Services.


2.2                               Prerequisites.  Primal shall procure, on Company’s behalf and
at Company’s expense, or Company shall purchase, at its sole expense, the third
party 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.  Company
may submit to Primal written requests to change the scope of Services described
in a Statement of Work (each such request, a “Change Order Request”).  Primal may, in its discretion, honor such
Change Order Request, but Primal has no obligation to do so.  If Primal elects to honor such a Change Order
Request, then Primal will promptly notify Company if it believes that the
Change Order Request requires an adjustment to the fees or to the schedule for
the performance of the Services.  If so,
the parties will negotiate in good faith a reasonable and equitable adjustment
to the fees or schedule, as applicable. 
Primal will continue to perform Services pursuant to the existing
Statement of Work and will have no obligation to honor any Change Order Request
unless and until the parties have agreed in writing to such an adjustment.


2.4                               Approvals.  Primal shall submit completed deliverables
under any Statement of Work (“Deliverables”) to Company for approval as
follows:  Primal shall deliver such
Deliverable(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) in
writing within two business days of its review. 
Failure by Company to approve such Deliverable(s) in writing within such
two business days:  (i) will be deemed an
acceptance of such Deliverable(s) and (ii) may result in delays in production
or delays in delivery of the completed performance of the Services; provided,
further, that any use by Company of any Deliverables, other than for testing
and acceptance purposes, will constitute Company’s full acceptance of such
Deliverable(s).  If within such two
business days, Company notifies Primal in writing that it does not accept any
Deliverable(s), it shall promptly provide to Primal a detailed writing listing
Company’s reasons for not accepting each Deliverable.  Such notice of non-acceptance will contain a
mutually-agreed on extended completion date for the Services.  Primal shall use commercially reasonable
efforts to correct the listed deficiencies and shall re-submit such
Deliverable(s) in accordance with this Section.


3.                                      Ownership of
Intellectual Property Rights.


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


3.2          Deliverables.  Subject
to Company’s compliance with its payment obligations under this Agreement, Primal
hereby assigns and agrees to assign all right, title and interest, including
without limitation, all copyrights, patents, trademarks and all other
intellectual property and proprietary rights in the Deliverables (and all
renewals, extensions, reissues and the like thereof) to Company.


3.3          Primal Tools. 
Notwithstanding anything to the contrary in this Agreement and without
limitation of Section 3.1, in developing the Deliverables, Primal may use
certain software, objects, textures,
scripts, code, and other development tools that existed before the Effective
Date and may have developed derivatives of the foregoing in developing
the Deliverables that have:  (i) substantially the same functionality as the
item from which they were derived and (ii) general applicability apart
from 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, irrevocable
worldwide right and license to use, copy, modify, display, perform, and
transmit the Primal Tools as incorporated in the Deliverables, so long as such
use relates solely to its use of the Deliverables.  Company may freely assign or sublicense such
license but only in connection with its assignment or sublicense of the
Deliverables.


3.4          License Back.  Company
shall, and hereby does, grant Primal a non-exclusive, irrevocable, perpetual, worldwide,
royalty-free right and license to use, copy, modify, display, perform and
transmit the Deliverables.  Primal may
sublicense these rights, but may not assign them except as permitted in
connection with a permitted assignment of this Agreement in accordance with
Section 11.4.


4.                                      Monetary Provisions.


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


4.2                               Expenses.  Company shall
reimburse Primal for its reasonable, documented costs and expenses incurred
directly in connection with the Services (including, without limitation, coach
airfare, meals, phone, and lodging).


4.3                               Taxes.  All amounts
payable by Company are exclusive of (and Company shall be solely responsible
for) all taxes imposed by any governmental entity on the transactions
contemplated by this Agreement, excluding taxes based on Primal’s net
income.  When Primal has the legal
obligation to pay or collect such taxes, it will invoice Company unless Company
provides Primal with a valid tax exemption certificate authorized by the
appropriate taxing authority.


5.                                      Term; Termination.


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


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


5.3                               General Termination Matters.  All
liabilities accruing up to the expiration of the Term or any termination of
this Agreement will survive such date. 
Within 30 days of any termination, Company shall pay to Primal the total
amount of all fees and expenses that would have become payable through the end
of the then-current Term.  All Statements
of Work will terminate.  The following
provisions will survive expiration or termination:  1, 3, 4, 5.3, 6.4, 7, 8, 9, 10, and 11.


6.                                      Representations and
Warranties.


6.1                               Deliverables Warranty.


6.1(a)                 Warranty.  For 90 days
after their acceptance by Company, Primal warrants that:  (i) the Deliverables will operate free of
any material errors and in material conformance with their documentation and
specifications and (ii) the Deliverables will interoperate with the
Prerequisites free of any material errors provided that the Prerequisites are
functioning properly.


6.1(b)                 Warranty Claims Procedure. 
Any failure of the Deliverables to operate in accordance with the
foregoing warranty will be deemed an “Error.” 
Company shall promptly notify Primal of, and adequately describe, the
Error, and Company’s exclusive remedy and Primal’s sole obligation will be the
following:  (i) to provide Company
with a replacement copy of the applicable Deliverable containing any correction
or modification needed to remedy the Error or (ii) to use commercially
reasonable efforts to correct the Error, which may include consultation with
the manufacturer or licensor of the Prerequisites.  If Primal cannot remedy the Error in 90 days
from Company’s notification thereof, Company shall have the right to terminate
this Agreement immediately on written notice to Primal.  Primal shall not be obligated to remedy any
Error which cannot be adequately reproduced by Primal.  The warranties set forth in this Section do
not apply if the Deliverables have been: 
(i) altered, except by Primal or in accordance with its
instructions; (ii) used in conjunction with another product (except for the
Prerequisites) resulting in the Error; (iii) damaged by improper
environment, abuse, misuse, accident or negligence; or (iv) used without
any update to the Deliverables provided to Company.


6.2                               Prerequisites.  If
Primal determines that an Error has been caused by the Prerequisites or any
other third-party product, Primal shall inform Company, and Company shall have
the right to engage Primal to attempt to fix such Error, for which it will
compensate Primal in accordance with its standard rates for time and
materials.  Primal shall reasonably
cooperate, at Company’s expense, in assisting Company to enforce 


 


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                                                any warranties provided by the
manufacturer or licensor of the Prerequisites.


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


6.4                               By Each Party.  Each party represents
and warrants to the other that: (i) it has the full corporate right, power, and
authority to enter into and to perform the acts required of it under this
Agreement; (ii) the execution and delivery of this Agreement and the
performance of its obligations do not and will not violate any agreement to
which it is or will be otherwise bound; and (iii) it will comply with all
applicable laws, rules, and regulations in exercising its rights and performing
its obligations under this Agreement.


7.                                      Disclaimers; Exclusions;
Limitations.


7.1                               DISCLAIMER OF WARRANTIES.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY SPECIFICALLY DISCLAIMS, ALL
EXPRESS 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 PARTICULAR
PURPOSE, AND NON-INFRINGEMENT), AS WELL AS ANY WARRANTIES THAT THE DELIVERABLES,
PREREQUISITES, OR SERVICES WILL ACHIEVE A PARTICULAR RESULT, OR WILL BE
UNINTERRUPTED OR ERROR-FREE.  OTHER THAN
AS EXPRESSLY PROVIDED IN SECTION 6.1 AND IN SECTION 6.2, PRIMAL MAKES NO
REPRESENTATIONS AND WARRANTIES, AND ASSUMES NO OBLIGATIONS OR LIABILITY,
ARISING FROM, RELATING TO, OR CONNECTED WITH THE PREREQUISITES.


7.2                               EXCLUSION OF DAMAGES.  EXCEPT IN
CONNECTION WITH A CLAIM BASED ON AN INFRINGEMENT OF THE OTHER PARTY’S
INTELLECTUAL PROPERTY RIGHTS OR UNAUTHORIZED USE OR DISCLOSURE OF ITS
CONFIDENTIAL INFORMATION, IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER ANY
THEORY OF LIABILITY FOR ANY INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, OR
CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, ANY SUCH
DAMAGES ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM NEGLIGENCE OR
STRICT LIABILITY), INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REVENUE,
DATA, OR USE, OR FOR INTERRUPTED COMMUNICATIONS, OR FROM ANY DEFECT, ERROR, OR
MALFUNCTION OF THE SERVICES, PREREQUISITES, OR DELIVERABLES, EVEN IF THE OTHER
PARTY OR ANY OTHER PERSON HAS BEEN ADVISED OR SHOULD KNOW OF THE POSSIBILITY OF
SUCH DAMAGES.


7.3                               LIMITATION OF
LIABILITY.  EXCEPT IN CONNECTION WITH A CLAIM BASED ON AN
INFRINGEMENT OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS OR UNAUTHORIZED
USE OR DISCLOSURE OF ITS CONFIDENTIAL INFORMATION, IN NO EVENT WILL THE TOTAL,
AGGREGATE LIABILITY OF EITHER PARTY TO THE OTHER ARISING FROM, RELATING TO, OR
CONNECTED WITH THIS AGREEMENT EXCEED THE AMOUNT OF THE SUMS OWED PRIMAL UNDER
THIS AGREEMENT.


7.4                               BASIS OF BARGAIN.  THE
PARTIES HAVE AGREED THAT THE DISCLAIMERS, EXCLUSIONS, AND LIMITATIONS SPECIFIED
IN 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 PRIMAL
HAS SET ITS PRICES AND ENTERED INTO THIS AGREEMENT IN RELIANCE ON SUCH DISCLAIMERS,
EXCLUSIONS, AND LIMITATIONS, WHICH ALLOCATE THE RISK BETWEEN PRIMAL AND COMPANY
AND 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 and
each of their respective shareholders, directors, officers, successors, and
assigns harmless from any damage, loss, cost, liability, or expense (including
reasonable attorneys’ and experts’ fees) (collectively, “Losses”) arising from,
relating to, or connected with any claim, action, or demand (a “Claim”) brought
by a third party alleging:  (i) that the Deliverables
infringe any United States copyright or United States patent in force on or
before the Effective Date; (ii) death or personal injury caused by Primal’s
negligence; (iii) violation of applicable law; or (iv) gross negligence or
willful misconduct by Primal.  Primal shall have no obligation to indemnify Company
if Company is more than 30 days late with respect to any fees that it owes
Primal.


8.2                               Infringement Claims.  If
Company’s right to use the Deliverables, in Primal’s opinion may be enjoined
due to the type of claim specified in Section 8.1(i) above (an “Infringement
Claim”), then Primal may, at its sole option and expense:  (i) procure for Company the right to
continue using the Deliverables; (ii) replace or modify the Deliverables
so that they are non-infringing; or (iii) if options (i) and (ii) above
cannot be accomplished despite Primal’s reasonable efforts, then Primal may
terminate this Agreement on five days written notice.  Primal will
have no obligation whatsoever in connection with an Infringement Claim to the
extent that it results from: (i) modifications to the Deliverables made by
a party other than Primal, if a claim would not have occurred but for such
modifications; (ii) the combination, operation or use of the Deliverables
with equipment, devices, software or data that are not Prerequisites or
otherwise expressly authorized by Primal, if a claim would not have occurred
but for such combination, operation or use; (iii) Company’s failure to use
updated or modified Deliverables provided by Primal; (iv) Primal’s use of any
designs or specifications provided by Company; or (v) Company’s use of the
Deliverables other than in accordance with this Agreement.  This Section 8 states Primal’s
complete obligation and Company’s 


 


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                                                sole and exclusive remedy with respect to
an Infringement Claim.


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


8.4                               Indemnification
Procedure.  A party seeking indemnification pursuant to
the 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 Indemnifying
Party sole control of the defense and settlement of the Claim, provided that
the Indemnified Party has the right to reasonably approve the terms of any
settlement before being bound by it, such approval not to be unreasonably
withheld or delayed; and (iii) provide the Indemnifying Party, at such
party’s expense, with all assistance, information and authority reasonably
required for the defense and settlement of the Claim.


9.                                      Confidentiality.


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


9.2                               Obligation. 
Each party shall:  (a) not use or
authorize the use of the Confidential Information of the other party for any
purpose other than to fulfill its obligations under this Agreement; (b) hold
such Confidential Information in strict confidence and protect such
Confidential Information with the same degree of care (but no less than a
reasonable degree of care) normally used to protect its own similar
Confidential Information; (c) take all steps as may be reasonably necessary to
prevent such Confidential Information from being revealed to any person or
entity other than to those of its employees who have a need to know such
Confidential Information to enable it to fulfill its obligations under this
Agreement; and (d) not copy or reproduce any Confidential Information in any
media (except as may be strictly necessary to enable it to fulfill its
obligations under this Agreement).  The
parties further agree that if either party is directed to disclose any portion
of any Confidential Information of the other party by operation of law, rule,
or regulation, it shall immediately notify the other party and, at the sole
cost of the other party, shall assist the other party in seeking a suitable
protective order or assurance of confidential treatment.


10.                               Enforcement Matters.


10.1                        Governing Law
and Jurisdiction.  This Agreement and all matters arising from,
relating to, or connected with this Agreement will be governed by the laws of
the 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 of
any state or federal court located in Orange County, California and (ii)
waives, to the fullest extent permitted by law, the defenses of lack of
personal jurisdiction, inconvenient forum, and improper venue.


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


10.3                        Injunctive
Relief.  Company acknowledges and agrees that Primal’s
intellectual property rights are of a unique and extraordinary character and
that the unauthorized use thereof would cause Primal irreparable harm, which
could not be adequately remedied by monetary damages.  Accordingly, if Company infringes or
threatens to infringe Primal’s intellectual property rights, Primal shall have
the 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 permitted
or required will be in writing and be deemed given: (i) on delivery, if
personally delivered, (ii) on delivery, if delivered by reputable overnight
courier that provides proof of delivery, or (iii) three business days
following 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 to
all applicable laws, regulations and rules relating to the export of technical
data.


11.3                        Force Majeure.  Neither party will be liable for
any failure or delay in the performance of its obligations (except for the
payment 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 to
notify the other party of the occurrence of such an event within three business



 


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


11.4                        General Matters.  The parties are independent contractors and no joint
venture, partnership, employment, agency or similar arrangement is created
between them.  Neither party has the
right or power to act for or on behalf of the other or to bind the other in any
respect.  This Agreement will be binding on
each party and its successors and permitted assigns.  This Agreement may not be assigned by either
party without the other party’s prior written consent, except that Primal may
assign this Agreement in connection with a merger, sale of its business
relating to this Agreement, stock purchase, reorganization or the like.  This Agreement (including the Exhibits and
Statements 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 understandings
between the parties regarding thereto. 
If the terms of this Agreement conflict with Exhibit A, this Agreement will
govern and have precedence.  Except as
expressly 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 exercising
any right, power, or privilege under this Agreement will operate as a waiver
thereof.  The invalidity or
unenforceability of any provision of this Agreement will not affect the
validity or enforceability of any other provision of this Agreement, all of
which 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 in
connection with this Agreement, constitutes a waiver of any objection or claim
that may be based on such failure.  This Agreement may be executed in counterparts, both
of which taken together will constitute one and the same document.  Facsimile signatures will be treated
in all respects as having the same effect as an original signature.


 


The parties have
executed this Agreement as of the Effective Date.


	
  PRIMAL SOLUTIONS, INC.

  	
   

  	
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