SOFTWARE LEASE AGREEMENT
This Lease Agreement, dated as of April 6, 2004, is between Thunderstone
Software LLC ("Thunderstone") and Bidville, Inc. ("Lessee").
In consideration of the mutual promises set forth below, and intending to be
legally bound, the parties agree as follows:
1.1 "Defect" means a confirmed failure of the Leased Program to perform in
accordance with the Documentation. A "Major Defect" is a Defect that, if not
corrected, substantially deprives the Licensee of the functionality of the
1.2 "Documentation" means all written or electronic technical specifications or
materials provided by Thunderstone for use in connection with the Leased
1.3 "Enhancement" means the addition of a new Leased Program feature or the
modification or change (including, but not limited to, addition of new
functionality, creation of new algorithms, design changes, code changes, ideas,
concepts, know-how, approaches, processes, methodologies or techniques) to an
existing Leased Program feature that immediately prior to the Enhancement was
performing in substantial compliance with Thunderstone's original Documentation.
1.4 "Lease Agreement" means this Agreement.
1.5 "Leased Program" means the machine readable version of one or more of the
following programs: Texis, Vortex Webscript Bridge, Metamorph, 3DB, Metamorph
API, 3DB API, Network API, Browser API, Metabook, Network Code Generator,
Webinator and Postscript Viewer. Only those programs for which you have paid the
applicable Fee shall be Leased Programs under this Lease Agreement.
1.6 "Lessee" means you, the buyer or user of the Leased Program or
1.7 "Major Release" means a release of the Leased Program that includes Software
Updates, selected Enhancements, and other new functionality or capabilities. A
Major Release is designated by the Leased Program version number, which in
comparison to the previous release of the Leased Program has changed in the
digits preceding the second decimal point.
1.8 "Media" means any tape, disk, diskette, CD-rom or electronic delivery method
used to install the Leased Program on a computer.
1.9 "Software Update" means a revision, patch or work-around, that when applied
to the Leased Program, shall enable it to perform in accordance with the
Documentation, or which corrects or repairs a Defect.
1.10 "Technical Support" means commercially-reasonable efforts, undertaken by
Thunderstone, to provide Lessee with answers to questions involving general
usage of the Leased Program. Technical Support does not include consulting or
other services that require Thunderstone to review Lessee's application of the
Leased Program. Consulting services are only provided pursuant to a separate
1.11 "Use" means copying or transmitting any portion of the Leased Program or
Documentation into a computer and processing of the instructions or statements
contained in the Leased Program.
2.1 Subject to the terms and conditions of this Lease Agreement, Thunderstone
leases to Lessee the non-exclusive, non-transferable, non-assignable right to
install and Use the Leased Program and Documentation. This right to install and
use is exclusive to Lessee and does not extend to any affiliates or related
2.2 The Media on which the Leased Program is provided to Lessee may contain
several copies of the Leased Program and Documentation, each of which is
compatible with a different processor architecture (e.g., Unix, Windows NT or
Windows X). Lessee may install one copy of the Leased Program on a single server
(the computer running the Leased Program will be referred to as a server) for
use with only those architectures permitted pursuant to this Lease Agreement.
Lessee may transfer the Leased Program from one server to another server, but
only if the Leased Program is completely removed from the first server.
2.3 In addition to the copy of the Leased Program installed on the server,
Lessee may make another copy of the Leased Program for archival or backup
2.4 If source code is included on Lessee's installation Media solely for the
purpose of recompilation to Lessee's specific operating system, the source code
is on loan to Lessee only as long as necessary to enable Lessee to recompile, or
port, the Leased Program. Under no circumstances does Lessee have the right to
copy, view or modify the source code. The source code, along with a copy of any
newly created object code version, must be returned to Thunderstone immediately
3. LEASE PAYMENTS
3.1 Lessee shall pay to Thunderstone an initial Lease payment of $25,363.
during the term of this Lease and any renewal term, beginning with the calendar
month following execution of this Lease, Lessee shall pay to Thunderstone an
amount each month equal to $2,900. Payment shall be due on the first day of each
calendar month. Any payment not received by the first day of the month will be
assessed a late charge equal to 10% of the amount due. The failure to make
payment by the tenth day of the month in which the payment is due will
constitute an event of default under this Lease Agreement.
3.2 The Lease payments do not include any local, state, federal, use, excise,
personal property or similar taxes, duties or shipping charges, all of which are
the liability of and shall be paid by Lessee. Such amounts may be added to the
invoice and remitted to the proper authorities by Thunderstone. Lessee is
responsible for making its own determination as to the proper tax treatment for
the payments made pursuant to this Lease Agreement.
3.3 Thunderstone will provide Lessee with one set of installation Media and one
set of Documentation. Thunderstone shall replace any defective installation
Media at no cost. Lessee must pay a replacement fee to replace any lost or
damaged installation Media. Additional copies of Documentation are available for
purchase from Thunderstone.
4. DELIVERY AND INSTALLATION
Upon receipt of the initial Lease payment, Thunderstone will deliver the Leased
Program and Documentation to Lessee, FOB Thunderstone's location, on appropriate
Media for installation on Lessee's computer system by Lessee. Lessee is
responsible for all costs associated with installation.
5. TRAINING AND TECHNICAL SUPPORT
5.1 Thunderstone will provide Technical Support to Lessee during the warranty
period at no cost. Thereafter, Technical Support will be provided at
5.2 This Lease Agreement entitles the Lessee to no training or consulting
services from Thunderstone. Training and consulting services are provided, if at
all, only pursuant to a separate agreement between Thunderstone and Lessee.
6. TERM AND TERMINATION
6.1 The term of this Lease Agreement will begin as of the date of this Lease
Agreement and shall terminate 36 months later.
6.2 Lessee may terminate this Lease Agreement upon notice within 30 days after
delivery of the Leased Program or Documentation, provided that (a) Lessee
promptly returns the Leased Program and Documentation to Thunderstone in the
same condition as received, normal wear and tear excepted, (b) Lessee provides
written certification from a duly authorized officer stating that all copies
have been returned or destroyed, and (c) Lessee is not in default of any
provision of this Lease Agreement.
6.3 Either party may terminate this Lease Agreement upon notice if the other
party is in breach of any provision of this Lease Agreement and fails to cure
that breach within 30 days after receiving written notice from the non-breaching
party of the breach.
6.4. Either party may terminate this Lease Agreement upon notice to the other if
(a) the other ceases to carry on its business; or (b) a receiver or similar
officer is appointed for the other and is not discharged within thirty days; or
(c) the other becomes insolvent, admits in writing its inability to pay debts
generally as they become due, is adjudicated bankrupt or insolvent, or makes an
assignment for the benefit of its creditors or another arrangement of similar
import; or (d) proceedings under bankruptcy or insolvency laws are commenced by
or against the other and are not dismissed within thirty days.
6.5 Should Lessee in whole or in part, acquire, be acquired by, or merge with
any legal entity that Thunderstone, in its sole discretion, deems to be
competitive to Thunderstone's business, Thunderstone may immediately terminate
this Lease Agreement upon written notice to Lessee.
6.6 Upon termination pursuant to Section 6.2, Thunderstone shall refund to
Lessee the initial Lease payment, less any expenses incurred by Thunderstone in
connection with this Lease Agreement. Upon termination pursuant to Sections 6.3
or 6.4, Lessee shall immediately pay to Thunderstone an amount equal to the sum
of all remaining monthly Lease payments due under this Lease Agreement as if it
had not been terminated.
6.7 Upon termination of this Lease Agreement, Lessee does not have any option to
purchase the Lease Program. Lessee may, however, acquire from Thunderstone a
fully paid license to continue using the Licensed Program by executing
Thunderstone's then current standard license agreement and by paying to
Thunderstone a License Fee equal to Lessee's monthly Lease payment under this
Lease Agreement multiplied by six. Alternatively, Lessee may enter into a new
lease agreement with Thunderstone pursuant to which Thunderstone will lease to
Lessee the then current version of the Licensed Program. The monthly Lease
payment will be based on Thunderstone's then current upgrade fee. If Licensee
does not acquire a license for the Leased Program, or does not lease an upgrade
to the Leased Program, then, upon termination of this Lease,
(a) the rights granted to Lessee pursuant to this Lease Agreement shall
(b) Lessee shall certify to Thunderstone that all Leased Programs and
Documentation (both original and backup copies) have been removed from Lessee's
equipment and either returned or destroyed; and (c) Lessee shall cease to use
any Leased Programs or Documentation. 6.8 The provisions of Sections 7.8, 7.9,
8, 9.1, 9.2, 9.3, 9.4, and 9.5 shall survive the termination or cancellation of
this Lease Agreement for any reason.
7. WARRANTY AND LIABILITY
7.1 Thunderstone warrants that it is the owner of the Leased Program and that it
has the right to lease the Leased Program to Lessee.
7.2 Thunderstone shall defend Lessee against any claim that the Leased Program
or Documentation infringes a United States patent, copyright, or trade secret,
and shall pay any settlements entered into or damages awarded against Lessee to
the extent based on such a claim, provided that (a) Lessee notifies Thunderstone
promptly in writing of the claim; (b) Thunderstone has sole control of the
defense and all related settlement negotiations; and (c) Lessee provides
Thunderstone with all necessary assistance, information, and authority to
perform the above.
7.3 Thunderstone shall have no liability for any claim of infringement based on
(a) use of other than the latest Major Release of the Leased Program, if
the infringement would have been avoided by use of the latest Major Release;
(b) modification of the Leased Program by Lessee if the infringement would
have been avoided without such modification; or (c) the combination or use of
the Leased Program with software or hardware not furnished by Thunderstone if
the infringement would have been avoided by use of the Leased Program without
that software or hardware.
7.4 In the event the Leased Program is held to, or Thunderstone believes it is
likely to be held to, infringe a United States patent, copyright or trade
secret, Thunderstone shall have the right at its sole option and expense to (a)
substitute or modify the Leased Program so that it is non-infringing; (b) obtain
for Lessee a license to continue using the Leased Program; or (c) if (a) and (b)
are not reasonably practicable, terminate this Lease Agreement.
7.5 The foregoing states Thunderstone's sole obligation and exclusive liability
(express, implied, statutory, or otherwise) for any infringements or claims of
infringement of any patent, copyright, trademark, trade secret, or other
intellectual property right.
7.6 Thunderstone warrants that for a period of ninety days following delivery to
Lessee, the Leased Program, when compiled or installed in accordance with the
Documentation, will operate without Defect. Thunderstone does not warrant that
the Leased Program will be error-free or will operate without interruption.
Thunderstone does not warrant that the Leased Program will meet Lessee's
requirements or will operate in combination with other software. If the warranty
set forth in this Section is breached, Thunderstone's sole obligation will be to
use commercially reasonable efforts to provide Lessee with an alternative method
of achieving the desired functionality (a "work around") or, in Thunderstone's
discretion, a Software Update to correct the Defect. Thunderstone, however, does
not warrant that all Defects can be corrected. If Lessee reports a Defect within
90 days of delivery, and if Thunderstone cannot provide Lessee with a work
around or correct the Defect after making commercially reasonable efforts to so
do, Thunderstone will reduce the Lease payments due pursuant to this Lease
Agreement by an equitable amount to reflect the lessened utility of the Leased
Program, if any. Lessee shall not be entitled to assert any claim for breach of
the limited warranty stated in this Section unless the claim is made in writing
and delivered to Thunderstone within ninety days after delivery of the Leased
Program. Thunderstone has no obligation to repair any Defect that results from
accident, abuse or misapplication.
7.7 THUNDERSTONE HEREBY DISCLAIMS ALL OTHER WARRANTIES TO LESSEE, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE LEASED PROGRAM OR
DOCUMENTATION, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7.8 THE EXPRESS LIMITED WARRANTY AND REMEDY STATED ABOVE IS IN LIEU OF ALL
LIABILITIES OR OBLIGATIONS OF THUNDERSTONE FOR DAMAGES WHATSOEVER INCLUDING, BUT
NOT LIMITED TO, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF
BUSINESS INFORMATION, OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF OR IN
CONNECTION WITH THE USE OR PERFORMANCE OF OR INABILITY TO USE THE LEASED
PROGRAM, EVEN IF THUNDERSTONE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
7.9 IN NO EVENT WILL THUNDERSTONE BE LIABLE TO LESSEE FOR DAMAGES OR ANY OTHER
AMOUNTS THAT EXCEED THE TOTAL OF THE AMOUNTS PAID TO THUNDERSTONE BY LESSEE
PURSUANT TO THIS LEASE AGREEMENT DURING THE TWELVE MONTH PERIOD PRECEDING THE
DATE ON WHICH THUNDERSTONE RECEIVED NOTICE OF THE BASIS FOR THE AWARD.
7.10 All warranties stated in this Lease Agreement are immediately void if
Lessee or any third party makes any changes to the Leased Program. Thunderstone
shall have no obligation to test, debug, repair or certify any Leased Program
that has been modified by Lessee or any third party.
7.11 No Thunderstone employee, agent or representative has the authority to bind
Thunderstone to any oral representations or warranties concerning the Leased
Program or Documentation.
8. LESSEE INDEMNITY
Except for infringement and warranty claims for which Thunderstone is liable
under Section 7, Lessee agrees to indemnify and hold Thunderstone harmless
against any cost, loss, liability or expense (including attorneys' fees) arising
out of third-party claims against Thunderstone relating to Lessee's use of the
Leased Program, including, without limitation, any claim that the use of the
Leased Program in connection with any other software or hardware infringes any
copyright, patent, trade secret or other right of any other person or entity.
9. CONFIDENTIALITY AND OWNERSHIP
9.1 Thunderstone retains all right, title and interest, including all
intellectual property rights, in and to the Leased Program or Documentation.
Lessee may, from time to time, request that Thunderstone create or provide
Enhancements for the Leased Program. Thunderstone may, in its sole discretion,
undertake to create or provide the requested Enhancements and distribute the
Enhancements to all or any of Thunderstone's Lessees. Lessee acknowledges that
any and all Enhancements are the exclusive property of Thunderstone, whether or
not authored, discovered or invented by Lessee or Thunderstone, and Lessee
hereby assigns to Thunderstone all of Lessee's right, title and interest in and
to any Enhancement. Lessee further agrees to execute any and all documents
requested by Thunderstone to perfect Thunderstone's rights in the Enhancements.
9.2 Lessee shall include reproductions of the Thunderstone copyright notices and
other proprietary legends on each copy of the Leased Program and Documentation.
Lessee shall not remove, efface or obscure any copyright notices or other
proprietary notices or legends from any Leased Program, Documentation or other
Thunderstone materials. Upon request, Lessee shall update its Leased Program and
Documentation with any changes to Thunderstone's proprietary notices.
9.3 Lessee shall not disclose the Leased Program's object code, source code or
Documentation to any third parties. Lessee will use all reasonable precautions
and take all necessary steps to prevent the Leased Program and Documentation, in
whole or in part, from being acquired by unauthorized parties.
9.4 Lessee shall not, nor will it assist others in attempting to, decompile,
reverse engineer or otherwise create the source code for the Leased Program.
9.5 Lessee shall not use the Leased Program and Documentation for the purpose of
developing any similar or competitive product, or assisting a third party to
develop a similar or competitive product.
10.1 Lessee may not assign this Lease Agreement or any of its rights or
obligations under this Lease Agreement, by operation of law or otherwise,
without Thunderstone's prior written consent, which may be withheld for any
reason, or which may be granted upon certain conditions, including the payment
of a transfer fee. Thunderstone shall have the right to freely assign this Lease
Agreement, by operation of law or otherwise, without Lessee's permission. This
Lease Agreement shall be binding upon and inure to the benefit of the parties
and their permitted successors and assigns.
10.2 In making and performing this Lease Agreement, the parties act and shall
act at all times as independent contractors and nothing contained in this Lease
Agreement shall be construed or implied to create an agency, partnership or
employer and employee relationship between Lessee and Thunderstone or between
any party to this Lease Agreement and any officer or employee of the other
party. At no time shall any party make commitments or incur any charges or
expenses for or in the name of the other party.
10.3 Thunderstone shall not be liable for any delays in the performance of any
of its obligations under this Lease Agreement due to causes beyond its
reasonable control, including but not limited to, fire, strike, war, riots, acts
of any civil or military authority, judicial action, acts of God, or other
casualty or natural calamity.
10.4 This Lease Agreement shall be governed by the laws of the State of Ohio,
without reference to its conflict of laws principles. All disputes arising out
of this Lease Agreement or the parties' business relationship shall be subject
to the exclusive jurisdiction of and venue in the Courts of Ohio, including
federal district courts, and the parties consent to the personal and exclusive
jurisdiction of those courts. Any action against Thunderstone for breach of this
Lease Agreement must be brought within one year of the cause of action arising.
10.5 The illegality or invalidity of any term or provision of this Lease
Agreement shall not affect the remainder of this Lease Agreement.
10.6 Lessee acknowledges that Thunderstone is subject to regulation by agencies
of the U.S. government which prohibit export or diversion of certain technical
products to certain countries. Lessee warrants that it will comply in all
respects with the export and re-export restrictions applicable to the Leased
10.7 The waiver of, or failure to enforce, any breach or default hereunder shall
not constitute the waiver of any other or subsequent breach or default.
Thunderstone's rights and remedies under this Lease Agreement shall not be
exclusive, but shall be in addition to any and all rights it may have under
10.8 At Thunderstone's request, Lessee shall execute and deliver any financing
statements or other documents that may, in Thunderstone's opinion, be necessary
to protect Thunderstone's interests in the Lease Programs.
10.9 This document, and any Addendums to it, sets forth the entire Lease
Agreement between the parties and supersedes any and all prior proposals,
agreements, and representations between them, whether written or oral. This
Lease Agreement may be changed only by mutual agreement of the parties in
Thunderstone Software LLC Lessee: Bidville, Inc.
By: /s/ John Turnbull By: /s/ Michael Palandro
John Turnbull, General Manager Michael Palandro, CEO
Date: April 8, 2004 Date: April 6, 2004