Document:

Prepared by R.R. Donnelley Financial -- Form of Channel Partner Agreement

 Exhibit 10.7 
  

	CHANNEL PARTNER AGREEMENT 
 	

 
 

 
 This agreement is entered into by Pelion Systems, Inc.
(“Pelion”) with primary offices located at 1455 Dixon Avenue, Suite 300, Lafayette, CO and_________________________________________________________________________________(“Partner”) with primary offices located at
_________________________________________________________, under the terms and conditions set forth below. 
  
 1.0 General

  
 Pelion provides software products that assist in the implementation and management of lean flow methods in a
manufacturing environment. Partner is a manufacturing consultant with expertise in the areas of lean manufacturing, demand flow manufacturing or kaizen. 
  
 Pelion’s interest is for Partner to sell Pelion’s Collaborative Flow Manufacturing (“CFM”) software suite to it’s customers or to provide a qualified customer prospect to
Pelion, in return for a commission and for Partner to provide some or all of any professional services required for the customer implementation. 
  
 2.0 Software Products 
  
 The products included in the CFM software suite are defined as
follows: 
  
 
	 Product Name
 
	  	 Basic Functionality
 

	 Go Lean
 	  	 Factory design and optimization.
 
	  	  	     Internal kanban management.
 
	 Go Lean Kanban
 	  	 Internal kanban management.
 
	  	  	     Supplier kanban signaling and tracking.
 
	 Go Lean Supply Chain
 	  	 Factory design and optimization.
 
	  	  	     Internal kanban management.
 
	  	  	     Supplier kanban signaling and tracking.
 
	 Go Lean Value Chain
 	  	 Factory design and optimization.
 
	 (availability TBD)
 	  	     Internal kanban management.
 
	  	  	     Supplier kanban signaling and tracking.
 
	  	  	     Customer demand management.
 

 
  
 Additional products may be offered in the future and can be added
to this agreement by mutual written consent. 

  
 3.0 Pricing 
  
 See Exhibit “A”, Pricing. 
  
 4.0 Commission
Schedule 
  
 Commissions will be based on whether the Partner provides a “Qualified Referral” or a
“License Sale”, as defined in Sections 5.0 and 6.0. For the first three License Sales, Pelion will provide additional sales support which may include webcast presentations, software demos, customer site visits and proposal preparation. To
cover the costs incurred by Pelion for providing additional support for the initial license sales a reduced commission will be paid. See Exhibit “B”, Commission Schedule. 
  
 5.0 Qualified Referral 
  
 A Qualified Referral is defined as
a customer prospect that is referred to Pelion by Partner, with whom Pelion does not have an existing pre-sale or post-sale relationship. Partner will notify the customer prospect that Pelion will be contacting them and provide Pelion with a contact
name and phone number. Pelion will be responsible for all other sales responsibilities. 
  
 6.0 License Sale 
  
 A License Sale is defined as the sale of one or more of Pelion’s software products by Partner, with minimum expense and involvement
by Pelion. After the first three (3) License Sales, Partner will be responsible for all pre-sales activities, including presentations, proposals, software demos and closing. Pelion will provide phone support to answer questions and provide
additional information as required. To the extent that certain opportunities may require greater participation by Pelion, the parties may mutually agree, in writing, to modify the terms of this agreement for each such specific opportunity.

  
 7.0 Post Sale Software Integration, Support and Maintenance 
  
 Pelion is responsible for all contracted post sale software integration, support and maintenance. 
  
 8.0 Professional Services 
  
 Customer engagements will
generally include some or all of the following professional services requirements: 
  
 Software
Integration 
 Software Training 
 Software Maintenance and Support 
 Lean Flow Education 
 Factory Implementation 
  
 Software integration will be provided by
Pelion for a fee as defined in Exhibit “A”. Software Training is included in the software pricing and will be provided by Pelion for the first three (3) license sales. Pelion anticipates that Partner will provide all required professional
services under a separate contract, directly with the customer. Pelion can, at Partner’s option, also provide services under a separate contract with Partner or directly with the customer. 
 

 2 

  
 9.0 Payment Terms 
  
 Commissions will be earned per the Commission Schedule in Exhibit “B” as amounts are received from the customer and paid within ten (10) days of such receipt.

  
 10.0 Partner Training and Support 
  
 Pelion will host three (3) days of Partner sales training and software use training at Pelion’s Lafayette, CO facility. Phone support will be provided by Pelion as required. 

 
 11.0 Reporting 
  
 The parties will mutually agree on the frequency and format of routine reporting of customer and customer prospect status. 
  
 12.0 Term and Termination 
  
 The initial term of this agreement shall be for two years.
Either party may terminate this agreement for any reason by providing thirty (30) days written notice to the other party. Upon termination, certain obligations shall remain in effect as described in Section 13.0. 
  
 13.0 Obligations Upon Termination 
  
 In the event that Partner terminates this agreement, Partner is obligated to complete any remaining customer contract obligations for those customers who have purchased Pelion software. Pelion agrees to pay commissions as described
in Section XX for all business under contract by Partner as customer payments are collected. 
  
 In the event that
Pelion terminates this agreement, Pelion agrees to pay 100% of any outstanding commissions as customer payments are collected for any business under contract on the day of termination. Additionally, Pelion agrees to pay 100% of referral commissions
on any business that is contracted for by Pelion as a result of the submission of a Qualified Referral by Partner, if such business is under contract within ninety (90) days of the termination date. 
  
 In the event of termination, the terms of Sections 14.0 and 15.0 shall remain in effect for a period of three (3) years from the date of
termination. 
  
 14.0 Proprietary Information and Trade Secrets 
  
 No license to the other party, under patents or copyrights, is granted or implied by conveying proprietary information or other information to that party and none of such
information which may be transmitted or exchanged by the respective parties shall constitute any representation, warranty, assurance, guaranty or inducement by either party to the other with respect to the infringement of patents or other rights of
others. 
  
 The receiving party will not utilize any such proprietary information to develop or produce a product
which is similar to or imitates products which are the subject of the proprietary information, or otherwise use the proprietary information for the benefit of the receiving party or other third party. The receiving party shall not reverse engineer
any proprietary information nor any products related to the proprietary information. 
  
 15.0 Confidentiality 

 
 Receipt, review and use of confidential information shall be subject to the following terms and conditions: 

 3 

  
 All software code, drawings and other documents supplied by either party shall
remain the property of the disclosing party and will be promptly returned by the receiving party upon receipt of written request therefore. 
  
 The parties will use their best efforts not to distribute, disclose or disseminate in any way, to anyone, except those employees and customers involved with Pelion’s products on a need to know
basis, information of a proprietary character disclosed to either party concerning the same. 
  
 Neither party shall
be liable for the disclosure of any such information of the other party pursuant to any requirement of any government, or any agency or department thereof, or pursuant to a lawful subpoena or court order. 
  
 This Agreement shall be governed and construed in accordance with the laws of the State of Colorado, and may be modified only by a written
agreement signed by both parties. 
  
 
	 Agreed to by:
 	 	  	 	  
	 
	 Company Name:
 	 	 Pelion Systems, Inc.
 	 	 

	 
	 Signature:
 	 	 
	 	 

	 
	 Name:
 	 	 
	 	 

	 
	 Title:
 	 	 
	 	 

	 
	 Date:
 	 	 
	 	 

 
 

 4 

  
 Exhibit “A” 
  
 Pricing 
  
 
	 Software Product
 
	  	 List Price
 
	 
	 Go Lean
 	  	 $
 	 50,000
 	  
 
	 Go Lean Kanban
 	  	 $
 	 50,000
 	  
 
	 Go Lean Supply Chain
 	  	 $
 	 75,000
 	  
 
	 Go Lean Value Chain
 	  	 $
 	 115,000
 	  
 
	 
	 Annual Software Maintenance
 	  	  
 	 18
 	 %
 
	 
	 Software Integration
 	  	 $
 	 8,500
 	  
 

 
  
 Pricing Is Effective through 12/31/02 
 

 5 

  
 Exhibit “B” 
  
 Commission Schedule 
  
 
	 Qualified Referral
 	  	 10
 	 %
 

 
  
 Commissions will be earned on the full value of any contracts
secured by Pelion from a Qualified Referral for the term of this agreement. 
  
 
	 License Sale
 
	  	  	 
	 1st Factory License
 	  	 25
 	 %
 
	 2nd Factory License
 	  	 30
 	 %
 
	 3rd Factory License
 	  	 35
 	 %
 
	 4th and greater
 	  	 40
 	 %
 
	 
	 Professional Services
 	  	 10
 	 %
 
	     (Provided by Pelion)
 	  	  	  

 
  
 Quick Start Bonus 
  
 Pelion will pay a 50% commission for any License Sale for which a bona fide purchase order is received by August 31, 2002. 
 

 6Prepared by R.R. Donnelley Financial -- Waiver Agreement

  
 Exhibit 10.8 
  
 WAIVER AGREEMENT 
  
 THIS WAIVER
AGREEMENT (this “Agreement”) is entered into on September 30, 2002 (the “Effective Date”), by and between ARTHUR K. STONE, III, a Colorado resident (“Stone”), and PELION SYSTEMS, INC., a Colorado corporation
(“Pelion”). 
  
 Recitals 
  
 A.    Pelion owes Stone $37,917 for salary accrued during the period October 1, 2001 through September 30, 2002 (the “Deferred Salary”).

  
 B.    Stone is the founder of Pelion, the holder of 52,942 shares of Pelion’s common
stock and an employee of Pelion, so its continued success clearly benefits him. 
  
 C.    Stone’s employment position with Pelion has changed, so that he is now on a commission basis. 
  
 D.    Stone has agreed to waive the Deferred Salary in order to assist Pelion and to more accurately reflect his changed duties and compensation structure at Pelion since October 1,
2001. 
  
 NOW, THEREFORE, in consideration of the foregoing, the mutual promises herein made, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed as follows: 
  
 Agreement 
  
 1.    Waiver of Accrued
Salary.    As of the Effective Date, Stone hereby agrees to waive the Deferred Salary, and releases and forever discharges Pelion, its past and present employees, agents, officers, directors, and their heirs, personal
representatives, successors and assigns, from any and all claims and causes of action of any type whatsoever arising, or which may have arisen, out of or in connection with the Deferred Salary. 
  

2.    Recitals.    The above Recitals are hereby incorporated as a material part of this Agreement with the same force
and effect as if fully restated in this paragraph. 
  
 3.    Severability.     The invalidity or partial invalidity of any portion of this Agreement shall not invalidate the remainder thereof, and said remainder shall remain in full
force and effect. Furthermore, in lieu of such invalid or partially invalid provision there will be added automatically as part of this Agreement a provision as similar in terms 

 
to such invalid or partially invalid provision as may be possible, legal, valid and enforceable. 
  
 4.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Colorado without
reference to its conflicts of law provisions. 
  
 5.    Amendment.    This Agreement may not be amended except by a writing signed by Pelion and Stone and is binding upon the heirs, personal representatives, successors and assigns of
Stone and it shall inure to the benefit of Pelion and its successors and assigns. 
  
 
	  	 	  	 	 PELION SYSTEMS, INC.
 
	 
	  	 	 /s/    ARTHUR K. STONE,
III        
 
	 	  	 	 By:
 	 	 /s/    THOMAS PLUNKETT        
 

	  	 	 Arthur K. Stone, III
 	 	  	 	  	 	 Its: Chief Executive Officer
 

 
 

 2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]