Software License, Services, Support and Enhancements Agreement for Red Envelope, Inc.

 

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                                                                   EXHIBIT 10.37

 

                           Software License, Services,

                            Support and Enhancements

                                    Agreement

 

                                        for

 

                               Red Envelope, Inc.

 

                           [MANHATTAN ASSOCIATES LOGO]

 

                        powering supply chain excellence

 

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[MANHATTAN ASSOCIATES LOGO]                               2300 Windy Ridge Parkway

                                                               Atlanta, GA 30339

 

                     SOFTWARE LICENSE, SERVICES, SUPPORT AND

                      ENHANCEMENTS AGREEMENT ("AGREEMENT")

 

Client:      Red Envelope, Inc.

Address:     201 Spear Street, Ste 300

            San Francisco, CA 94105

 

Manhattan Associates, Inc., a Georgia corporation, ("Manhattan"), markets and

supports certain software applications licensed hereunder as "Licensed Products"

and Client is a DELAWARE corporation or having a principal place of business as

noted above and Client is desirous of obtaining a license to use the Licensed

Products, subject to the terms and conditions of this Agreement.

 

NOW THEREFORE, in consideration of the background, the covenants herein

contained, and intending to be legally bound hereby, the parties agree as

follows:

 

                             ARTICLE I. DEFINITIONS

 

For purposes of this Agreement, the following terms shall mean:

 

CONFIDENTIAL INFORMATION

 

Certain confidential technical and business information, including without

limitation, business plans and interests, the Licensed Products and associated

documentation, and this Agreement, including its existence and its terms and

conditions.

 

CUSTOMER SUPPORT

 

Services provided by Manhattan pursuant to this Agreement, for which Client has

elected to subscribe, and related to technical support on Licensed Products.

Software Updates for Licensed Products are included as a part of a Customer

Support subscription.

 

CUSTOMER SUPPORT AND SOFTWARE ENHANCEMENTS FEES

 

The fee(s) defined in Article V, Section 5(C).

 

DESIGNATED PROCESSOR

 

The hardware server(s) identified in any Attachment to this Agreement or a

written notification as described in Article II. Section 1(C). In the case of

non-server based software, the personal computers on which the Licensed Products

are resident.

 

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DESIGNATED SITE

 

The physical location(s) where (a) the Licensed Products are installed upon the

Designated Processor(s); or (b) are otherwise utilized; and which are

specifically identified in any Attachment to this Agreement or a written

notification as described in Article II. Section 1(C).

 

DISCLOSER

 

The party disclosing Confidential Information.

 

LICENSE FEE

 

The fee(s) defined in Article V, Section 5(A).

 

LICENSED PRODUCT(S)

 

The computer programming source and object code for the Licensed Products

identified in each Attachment A to this Agreement, any Software Enhancements,

any Software Updates, the media in which the Licensed Products are delivered,

and the associated documentation. Certain security operational controls,

Warehouse Management System for Windows, Labor Management, Performance

Management and Slotting Optimization are provided in object code only.

 

LICENSED USER(S)

 

Any individual which has accessed the Licensed Products. Licensed Users are

counted concurrently until ceasing use of the Licensed Products and the total

number of Licensed Users simultaneously using the Licensed Products at any one

time may not exceed the total number for which License Fees have been paid.

 

MODIFICATIONS

 

Any mutually agreed upon enhancements, modifications, or substitutions to the

Licensed Products made by or at the direction of Manhattan.

 

PUBLISHED PRODUCT SPECIFICATIONS

 

The User Guides and the Implementation Guides (in whatever media) associated

with the Licensed Products, as they may exist from time to time.

 

RECIPIENT

 

The party receiving Confidential Information.

 

SERVICES

 

Professional services provided to Client by Manhattan pursuant to Article III of

this Agreement and related to the Licensed Products, including programming,

consulting, analysis, and training.

 

SOFTWARE ENHANCEMENTS

 

Subsequent versions and releases of the Licensed Products which Manhattan makes

generally available without payment of additional License Fees during the

Subscription

 

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Period. Software Updates for Licensed Products are included as a part of a

Software Enhancements subscription.

 

SOFTWARE UPDATES

 

Corrections to Client's current version of the Licensed Products.

 

SUBSCRIPTION PERIODS

 

The time periods in annual increments during which Customer Support and/or

Software Enhancements are available under this Agreement.

 

                    ARTICLE II. SOFTWARE LICENSE ("LICENSE")

 

      1. LICENSE GRANT.

 

(A) Manhattan grants to Client a non-exclusive perpetual license to use the

Licensed Products indicated in the Attachments A which may be executed from time

to time by the parties, and to use the Modifications, as follows:

 

(i) only on the Designated Processor(s), at the Designated Site(s), and only by

the Licensed Users, as applicable, identified in Attachments A attendant to this

Agreement;

 

(ii) in the case of the N-Tier version of the Licensed Products, to also utilize

the Licensed Products on personal computers used as clients in conjunction with

the Designated Processor;

 

(iii) to create Modifications to enhance Client's use of the Licensed Products

solely in the manner contemplated by this Agreement and not for any software

development or other independent efforts intended to generate revenues of any

kind;

 

(iv) only by Client and for Client's benefit through its ordinary course of

business and not for the benefit of any third party, including without

limitation, commercial timesharing or service bureau or other rental or sharing

arrangements, data processing or management information or services;

 

(v) only in the country in which they are first installed and may only be moved

to another country with the prior written permission of Manhattan; and,

 

(vi) copy the Licensed Products or Modifications for archival or backup purposes

only, so long as all titles, trademark, copyright, and restriction notices are

reproduced. No other uses are granted hereunder.

 

(B) Client may not:

 

(i) reverse engineer, disassemble, or decompile any part of the Licensed

Products or Modifications, except to the extent required to obtain

interoperability with other independently created or procured software or as

specified by law;

 

(ii) distribute, sell or otherwise transfer any part of the Licensed Products or

Modifications; or

 

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(iii) remove the patent, copyright, trade secret or other proprietary protection

legends or notices that appear on or in the Licensed Products.

 

(C) Client shall notify Manhattan in writing within thirty (30) days of any

model change to a Designated Processor(s), change in Designated Site(s) within

the same country, or desire to reallocate Licensed Users.

 

      2. OWNERSHIP. Manhattan retains all title, copyright and other proprietary

rights in the Licensed Products and Modifications, and all versions of each. Any

developments including inventions relating to the Licensed Products shall be

owned by Manhattan. Client does not acquire any rights, express or implied,

other than those specified in this Agreement. Client agrees to secure and

protect the Licensed Products and Modifications in a manner consistent with

maintaining Manhattan's rights therein. Violation of Manhattan's intellectual

property rights shall be the basis for immediate termination of this Agreement,

which shall be in addition to and not in lieu of any equitable remedies

available to Manhattan. At Manhattan's written request, Manhattan may audit

Client's use of the Licensed Products or Modifications, at Manhattan's expense,

but not more frequently than annually. Such audit shall not unreasonably

interfere with Client's business activities. If an audit reveals that Client has

underpaid fees to Manhattan, Client shall promptly pay any such underpaid fees.

 

3. WRONGFUL POSSESSION OR ACCESS. Upon knowledge of any unauthorized possession,

use of, or access to, any Licensed Products or Modifications, Client shall

promptly notify Manhattan and furnish Manhattan with full details of such

knowledge, assist in preventing any recurrence thereof, and cooperate at

Manhattan's expense in any litigation or other proceedings reasonably necessary

to protect the rights of Manhattan.

 

4. SOURCE CODE ESCROW. By executing an Attachment C attendant to this Agreement,

Client elects to have the remaining source code of the Licensed Products which

it does not receive placed on deposit in Manhattan's master escrow account,

which source code shall be released upon the conditions outlined in said

Attachment. Upon making such election, Client agrees to pay to Manhattan the

then-current annual fee associated with being a beneficiary of such account.

Further, Client will receive written confirmation from the escrow agent of

Client's registration. At least thirty (30) days prior to expiration of Client's

annual subscription to Source Code Escrow, Manhattan shall notify Client of the

applicable escrow fees for the succeeding year, whereupon, unless Client

notifies Manhattan in writing of its desire to terminate its escrow subscription

upon such expiration date, Client's subscription to Source Code Escrow shall be

extended and renewed for an additional period of one (1) year at the

then-current fees specified by Manhattan. If Client fails to remit escrow fees

pursuant to the terms hereof, Manhattan will have no duty to include Client as a

beneficiary of its escrow account.

 

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                              ARTICLE III. SERVICES

 

1. SERVICES PROVISION. Manhattan will provide Services from time to time at

Client's request and under the terms and conditions of this Agreement.

 

2. MODIFICATIONS. As a part of Services, Manhattan will also provide

Modifications at Client's request, as documented by a Detailed Design

Specification or similar mutually agreed upon instrument. Client and Manhattan

agree that the Modifications provided to Client shall not be a "work made for

hire".

 

3. SERVICES TERMINATION. Client may, at its election and upon thirty (30) days

prior written notice, terminate the Services to be provided hereunder. However,

such termination shall not affect any right or claim of either party incurred or

accruing prior to the date of termination, including without limitation, any

right or claim of Manhattan payable for services rendered or reimbursable

expenses incurred prior to such termination date.

 

              ARTICLE IV. CUSTOMER SUPPORT AND SOFTWARE ENHANCEMENTS

 

1. CUSTOMER SUPPORT AND SOFTWARE ENHANCEMENTS. Customer Support and Software

Enhancements shall be provided in accordance with Manhattan's Worldwide Customer

Support and Software Enhancements policies, as they may exist during each annual

Subscription Period. Subscriptions to Customer Support and/or Software

Enhancements are offered for only the Licensed Products and Client may not elect

to exclude any of the Licensed Products or any of the Designated Site(s) from

Manhattan's Customer Support and Software Enhancements subscriptions during the

Subscription Period.

 

2. SUBSCRIPTION PERIOD. The Subscription Period begins upon execution of an

Attachment B attendant to this Agreement. At least thirty (30) days prior to

expiration of a Subscription Period, Manhattan shall notify Client of the

applicable Customer Support and/or Software Enhancements Fees for the succeeding

year. Whereupon, unless Client notifies Manhattan in writing of its desire to

terminate its current subscription (s) on or before the expiration date for that

Subscription Period, Client's subscription(s) to Customer Support and/or

Software Enhancements shall be extended and renewed for an additional period of

one (1) year at the then current subscription fees specified by Manhattan.

 

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                               ARTICLE V. GENERAL

 

1. MUTUAL NONDISCLOSURE.

 

(A) Pursuant to this Agreement, each party may, from time to time, furnish the

other party with certain Confidential Information. The parties agree to hold

each other's Confidential Information in confidence. Each party agrees to take

all reasonable steps to ensure that Confidential Information is not disclosed or

distributed by its employees in violation of this Agreement. The disclosure of

Discloser's Confidential Information does not grant to the Recipient any license

or rights to any trade secrets or under any patents or copyrights, except as

expressly provided by the licenses granted in this Agreement.

 

(B) The obligations of Recipient with respect to any particular portion of

Confidential Information shall terminate or shall not attach, as the case may

be, when such information:

 

(i) was in the public domain at the time of Discloser's communication thereof to

Recipient;

 

(ii) entered the public domain through no fault of Recipient subsequent to the

time of Discloser's communication thereof to Recipient;

 

(iii) was in Recipient's possession free of any obligation of confidence at the

time of Discloser's communication thereof to Recipient;

 

(iv) was independently developed by Recipient as demonstrated by written

records; or,

 

(v) is required to be disclosed by court or government order and Discloser has

been given notice of such order.

 

(C) Discloser understands that Recipient may develop information internally, or

receive information from other parties, that may be similar to Discloser's

information. Accordingly, nothing in this Agreement shall be construed as a

representation or inference that Recipient will not independently develop

products, for itself or for others, that compete with the products or systems

contemplated by Discloser's information. The parties agree that a breach of the

confidentiality obligations by Recipient shall cause immediate and irreparable

monetary damage to Discloser and shall entitle Discloser to injunctive relief in

addition to all other remedies.

 

2. WARRANTIES. Manhattan warrants that it possesses all rights and interests

necessary to enter into this Agreement. In addition, Manhattan extends the

following warranties:

 

(A) LICENSED PRODUCTS. For a period of twenty-four (24) months following

execution of this Agreement or six (6) months following the first commercial use

of the Licensed Products at the initial Designated Site, whichever occurs

earlier, Manhattan warrants that the Licensed Products will materially perform

the functions described in the Published Product Specifications. Manhattan

warrants that the Licensed Products: (i) will completely and accurately address,

present, produce, store and calculate data involving

 

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dates beginning with January 1, 2000, and will not produce abnormally ending or

incorrect results involving such dates as used in any forward or regression date

based functions; and (ii) will provide that all "date"-related functionalities

and data fields include the indication of century and millennium and will

perform calculations which involve a four-digit year field.

 

(B) SERVICES. For a period of ninety (90) days following the date of

performance, Manhattan warrants that the Services supplied hereunder shall be

performed consistent with generally accepted industry standards.

 

(C) CUSTOMER SUPPORT AND SOFTWARE ENHANCEMENTS. During the Subscription Period,

Manhattan warrants that the Licensed Products will materially perform the

functions described in the Published Product Specifications as they may exist

during the Subscription Period.

 

(D) WARRANTY EXCLUSIONS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THERE

ARE NO WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE

IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

Manhattan makes no warranty with respect to and shall have no responsibility or

liability whatsoever for Modifications not made by Manhattan. All Modifications

made by Client shall be made at the sole risk and expense of Client and shall

void any warranties of the Licensed Products to the extent such nonconformity is

caused by such Modification.

 

3. EXCLUSIVE REMEDIES. For any breach of warranties contained in Section 2 of

this Article, Client's exclusive remedy and Manhattan's entire liability shall

be as follows:

 

(A) LICENSED PRODUCTS. The correction of errors in the Licensed Products that

cause breach of warranty, or if Manhattan is unable to provide such correction,

Client shall be entitled to terminate this Agreement as it relates to the

non-conforming Licensed Products and receive a refund of the License Fees paid

for the non-conforming Licensed Products.

 

(B) SERVICES. The reperformance of the Services, or if Manhattan is unable to

perform the Services as warranted, Client shall be entitled to recover the fees

paid to Manhattan for the unsatisfactory Services.

 

(C) CUSTOMER SUPPORT AND SOFTWARE ENHANCEMENTS. The correction of errors in the

Licensed Products that cause breach of warranty, or if Manhattan is unable to

provide such correction, Client shall be entitled to terminate this Agreement as

it relates to the non-conforming Licensed Products and receive a refund of the

Customer Support and/or Software Enhancements Fees paid for the non-conforming

Licensed Products for the then current Subscription Period.

 

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4. INDEMNITIES. INFRINGEMENT. Manhattan, at its sole expense, agrees to defend

and indemnify Client against any claim that the Licensed Products or

Modifications directly infringe a copyright, patent, or other intellectual

property right, provided that: (i) Client notifies Manhattan in writing within

thirty (30) days of the claim; (ii) Manhattan has sole control of the defense

and all related settlement negotiations; and (iii) Client provides Manhattan

with the information, assistance and authority to enable Manhattan to perform

Manhattan's obligations under this paragraph. Manhattan shall have no liability

for any claims of infringement to the extent that such claims result from the

use of the Licensed Products in conjunction with non-Manhattan software or other

non-Manhattan products or upon a use of the Licensed Products in a manner not

contemplated by the Published Product Specifications. Nothing in this provision

shall be construed as a limitation on Client's ability to retain legal counsel

at its own expense to monitor the proceedings.

 

Manhattan further agrees that if Client is prevented from using the Licensed

Product(s) due to an actual or claimed infringement of any patent, copyright or

other intellectual property right, then at Manhattan's option and as its entire

obligation to Client with respect to such claims, Manhattan shall promptly

either:

 

(i) procure for Client, at Manhattan's expense, the right to continue to use the

Licensed Product(s);

 

(ii) replace or modify the Licensed Product(s) at Manhattan's expense so that

the Licensed Product(s) become non-infringing, but substantially equivalent in

functionality; or

 

(iii) in the event that neither (i) or (ii) are reasonably feasible, terminate

the Agreement as to the infringing Licensed Products and return Client's License

Fees for the infringing Licensed Product(s) amortized over a five (5) year

depreciation period from the execution of the Agreement.

 

5. PAYMENT.

 

(A) LICENSE FEES. In consideration for the License granted in Article II, Client

agrees to pay to Manhattan the License Fees designated on any Attachment A

attendant to this Agreement upon the execution of this Agreement and any

Attachment A attendant to this Agreement.

 

(B) SERVICES FEES / EXPENSES. As compensation for performing Services, Client

agrees to pay Manhattan on a time and materials basis which shall be billed at

Manhattan's then-current list prices. Training shall be billed at Manhattan's

then-current list prices. Manhattan will invoice Client every two (2) weeks

while Services are being performed. Client agrees to reimburse Manhattan for all

reasonable out-of-pocket expenses Manhattan incurs in providing Services. If

amounts remain unpaid for thirty (30) days or more, Manhattan may, at its

option, refuse to perform additional Services under this Agreement until such

amounts are paid.

 

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(C) CUSTOMER SUPPORT AND SOFTWARE ENHANCEMENTS FEES. In consideration for the

Customer Support and/or Software Enhancements to be provided hereunder and for

which Client elects to subscribe, Client shall pay Customer Support and/or

Software Enhancements Fees in accordance with any Attachment B attendant to this

Agreement and subsequently as an annual charge. The first payment shall be due

upon execution of any Attachment B attendant to this Agreement. During the

Subscription Period, Client may be billed additional Customer Support and

Software Enhancements Fees resulting from additional Designated Sites,

additional Licensed Products, additional Licensed Users, or from the upgrade of

service level. If Client fails to remit Customer Support and/or Software

Enhancements Fees pursuant to the terms hereof, Manhattan will have no duty to

provide Customer Support and Software Enhancements as specified under Article

IV.

 

(D) TAXES. The fees listed in this Agreement do not include taxes. If Manhattan

is required to pay any sales, use, property, excise, value added, gross

receipts, or other taxes levied on the Licensed Products or Services under this

Agreement or on Client's use thereof, then such taxes shall be billed to and

paid by Client. This Section does not apply to taxes based on Manhattan's net

income or Manhattan's employer contributions and taxes.

 

(E) INVOICES. Client agrees to pay for all amounts due under this Agreement upon

receipt of invoice. Such amounts which remain unpaid for thirty (30) days after

invoice date will bear interest from the invoice date of one and one-half

percent (1 1/2%) per month or the highest rate permitted by law, if less. Time

is of the essence for all payments due under this Agreement, and in the event

any payment due to Manhattan is collected at law, through an attorney-at-law or

a collection agency, Client agrees to pay all costs of collection, including

without limitation, all court costs and reasonable attorney's fees.

 

(F) All payments made hereunder are nonrefundable, except as specifically

provided otherwise in this Agreement.

 

6. LIMITED LIABILITY. EXCEPT FOR a) FAILURE TO COMPLY WITH MANHATTAN'S

PROPRIETARY RIGHTS, b) FAILURE TO COMPLY WITH THE MUTUAL NONDISCLOSURE

PROVISION, OR c) THE INFRINGEMENT INDEMNITY PROVISIONS CONTAINED HEREIN: (A) IN

NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR A MONET