RESTRUCTURING AGREEMENT
Xxxxx Systems Corporation ("Xxxxx Systems") and TenFold Corporation ("TenFold")
enter into this Restructuring Agreement ("Agreement") as of December 8, 2000
(the "Effective Date"). (Xxxxx Systems and TenFold may be referred to herein
each as a "Party" and together as the "Parties".)
Whereas effective May 1, 1999, the Parties entered into a Strategic Alliance
Agreement; and
Whereas effective June 30, 1999, the Parties entered into a Master Services
Agreement; and
Whereas effective April 10, 2000, TenFold and Xxxxx Systems Healthcare Services
Corporation ("PSHS") entered into a Master Services Agreement and Task Order No.
TF/PSHS-001; and
Whereas effective April 10, 2000, TenFold, PSHS, and Cedars-Sinai Medical Center
("Cedars") entered into a Rebate Agreement; and
Whereas effective April 10, 2000, Data Securities International, Inc., TenFold,
and Cedars entered into a Preferred Escrow Agreement for the Universal
Application ("Escrow Agreement"); and
Whereas effective June 30, 2000, the Parties entered into an Amended and
Restated Strategic Alliance Agreement ("ARSAA"), a Reseller Agreement, and an
Amended and Restated Master Services Agreement; and
Whereas effective June 30, 2000, TenFold and PSHS entered into an Amended and
Restated Master Services Agreement; and
Whereas as of the Effective Date hereof, the Parties are entering into a Second
Amended and Restated Master Services Agreement and a Task Order No. TF/Xxxxx-005
thereunder; and
Whereas as of the Effective Date hereof, TenFold and PSHS are entering into a
Second Amended and Restated Master Services Agreement (together with the Second
Amended and Restated Master Services Agreement between the Parties, the "Second
Amended and Restated Master Services Agreements"); and
Whereas the Parties do not intend this Agreement or any of the other agreements
of even date herewith recited above to alter the rights and liabilities of the
parties to the Rebate Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
agree as follows:
1. Termination of ARSAA. The Parties hereby terminate the ARSAA; provided,
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however, that Section 2.5 of the ARSAA shall revive upon the occurrence of the
circumstances set forth Section 4 hereof below; and further provided that
notwithstanding Section 9.5 ("Survival of Certain Provisions") of the ARSAA,
only Sections 6.1 ("Pre-Existing Works") and 6.5 ("Confidential Information")
shall survive.
2. Termination of Reseller Agreement. The Parties hereby terminate the
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Reseller Agreement; provided, however, that notwithstanding Section 6.5
("Survival") of the Reseller Agreement, only Section 2.7 ("Title"), paragraph
(a) of Section 6.3 ("Rights upon Termination or Expiration"), and Section 8.1
("Nondisclosure") shall survive. Upon the execution of this Agreement, Xxxxx
Systems shall return to TenFold all materials (and any copies thereof) delivered
to Xxxxx Systems by TenFold in connection with the Reseller Agreement.
3. Mutual Release. Each Party forever releases the other Party from any and
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all claims, whether or not matured, pending, or asserted, whether based in
contract, tort, or other cause of action, whether foreseen or unforeseen,
arising out of or related to any representation, action, omission, or event
occurring in the past or future with respect to the Strategic Alliance
Agreement, the ARSAA, or the Reseller Agreement, except for claims arising after
the Effective Date under this Agreement.
4. Payments. TenFold shall pay $2,000,000 to Xxxxx Systems on the following
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schedule:
Date Amount
---- ------
Feb. 15, 2001 $236,000
Mar. 15, 2001 $441,000
Apr. 16, 2001 $441,000
May 15, 2001 $441,000
June 15, 2001 $441,000
The payments set forth in this paragraph shall be on or before the date
specified, without demand or invoice from Xxxxx Systems. Payment shall be made
by wire transfer to:
Receiving Bank: Bank of America, San Francisco
ABA Routing #: 000000000
Beneficiary: Xxxxx Systems Corporation
Account #: 12339-26853
Interest shall accrue on any amounts received late at 1.5% per month, pro-rated
for partial months on the basis of a 30-day month, or the maximum rate allowed
by law if less.
If TenFold obtains financing enabling it to raise at least $20,000,000 in cash
prior to making the payments set forth in this Section 4, whether or not it
actually draws down the cash, it will repay half of the then-outstanding balance
of the $2,000,000 within 30 days of closing such financing transaction. If
TenFold obtains financing enabling it to raise at least $30,000,000 in cash
prior to making the payments set forth in this Section 4, whether or not it
actually draws down the cash, it will repay the entire outstanding balance of
the $2,000,000 within 30 days of closing such financing transaction.
If any payment under this Section 4 or under Section 2(c) of the Second Amended
and Restated Master Services Agreement between the Parties is more than 30 days
overdue in whole or in part, Section 2.5 of the ARSAA shall automatically
revive. The first time that any such payment is more
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than 30 days overdue, if TenFold pays the unpaid amount together with accrued
interest within 60 days after it was due, Section 2.5 shall again xxxxx.Section
2.5 shall not xxxxx on a second or subsequent occasion of any such payment being
more than 30 days overdue.
5. Deposit Materials; Hiring. If Cedars rightfully obtains access under the
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Escrow Agreement to the "deposit materials" as defined therein: (i) if Cedars
request that Xxxxx Systems or PSHS have access to the deposit materials, TenFold
will not object to PSHS or Xxxxx Systems having access to the deposit materials
solely for the purpose of supporting Cedars' use of applications that Cedars
licensed from TenFold, and (ii) notwithstanding anything to the contrary in the
Second Amended and Restated Master Services Agreements, TenFold will permit PSHS
and/or Xxxxx Systems to solicit and hire employees or former employees of
TenFold who performed work for Cedars.
6. Statute of Limitations. Neither Party may assert a claim against the other
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Party under this Agreement more than two years after the date that such claim
arose.
7. Waiver. No change, waiver, or discharge hereof shall be valid unless in
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writing and signed by the Party against which it is sought to be enforced. No
delay or omission by either Party to exercise any right or power hereunder will
impair such right or power or be construed as a waiver thereof. A waiver by
either Party of any of the obligations to be performed by the other Party or any
breach thereof will not be construed to be a waiver of any succeeding breach
thereof or of any other obligation herein contained.
8. Severability. If any provision of this Agreement is declared or found to be
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illegal, unenforceable or void, then the Parties will be relieved of all
obligations arising under such provision, but only to the extent that such
provision is illegal, unenforceable or void, it being the intent and agreement
of the Parties that this Agreement will be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting another
provision that is legal and enforceable and achieves the same objective. If
such illegal, unenforceable or void provision does not relate to the payments to
be made to Xxxxx Systems hereunder and if the remainder of this Agreement will
not be affected by such declaration or finding and is capable of substantial
performance, then each provision not so affected will be enforced to the extent
permitted by law.
9. Governing Law. The substantive laws of the State of Delaware will govern
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all questions concerning the construction, validity and interpretation of this
Agreement and the performance of the obligations imposed hereunder. Any dispute
between the Parties to this Agreement, either with respect to the interpretation
of any terms hereof or with respect to the performance by a Party of its
obligations hereunder, will be resolved as provided in this Section 9. The
Parties will diligently seek to resolve all disputes pursuant to this Section 9,
without resort to the more formal proceedings described herein. If any
continuing dispute between the Parties is not resolved after reasonable attempts
to resolve such dispute are made by either Party, then, prior to initiating
arbitration or litigation under this Agreement, upon request of either Party,
each Party will appoint a senior manager who does not spend most of his or her
time directly involved in performance of this Agreement to meet with the other
Party's designee to endeavor to resolve such dispute. These senior managers will
meet as often as they deem appropriate and will negotiate in good faith to
resolve the
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dispute without the necessity of any formal proceeding. During the course of
such negotiations, all reasonable requests made by one Party to the other for
information will be honored. Both Parties agree to continue performing their
respective obligations under this Agreement while the dispute is being resolved,
except to the extent that such obligations are in dispute, unless and until this
Agreement expires or is terminated in accordance with its terms. Each Party
shall be responsible for its own costs and expenses, including attorney's fees,
associated with these meetings. Any dispute that is not resolved through
negotiation pursuant to this Section 9 will be settled exclusively by final and
binding arbitration in accordance with the following:
(a) American Arbitration Association Rules. Except as specified below or
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otherwise agreed in writing, the arbitration will be conducted in
accordance with the then-current Commercial Arbitration Rules of the
American Arbitration Association.
(b) Demands and Counterclaims. Any demand for arbitration or any
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counterclaim will specify in reasonable detail the facts and legal grounds
forming the basis for the claimant's request for relief, and will include a
statement of the total amount of damages claimed, if any, and any other
remedy sought by the claimant.
(c) Panel and Location. The arbitration will be conducted by an
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arbitration panel consisting of a single neutral arbitrator selected in
accordance with those Commercial Arbitration Rules. The arbitration
proceedings will take place in Wilmington, Delaware.
(d) Panel Actions. The arbitration panel may render awards of monetary
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damages, direction to take or refrain from taking action, or both. However,
the arbitration panel may not and does not have the power to make awards in
contravention of an express limitation or release in this Agreement. The
arbitration panel may, at its discretion, require any Party to the
arbitration to reimburse any other party to the arbitration for all or any
part of the expenses of the arbitration paid by the other party and the
attorneys' fees and other expenses reasonably incurred by the other party
in connection with the arbitration. Judgment upon the award rendered in the
arbitration may be entered in any court of competent jurisdiction.
The Parties agree that the provisions of this Section 9 will not apply when a
Party makes a reasonable determination in good faith that a breach of the terms
of this Agreement by the other Party is such that the damages to the determining
Party resulting from the breach will be so immediate, so large or severe, and so
incapable of adequate redress after the fact that a temporary restraining order
or other immediate injunctive relief is the most appropriate remedy, and that
Party seeks such relief. This Section 9 will not be construed to prevent a Party
from instituting, and a Party is authorized to institute, litigation solely and
exclusively (i) to toll the expiration of any applicable limitations period;
(ii) to preserve a superior position with respect to other creditors in a
bankruptcy proceeding; (iii) to seek immediate injunctive relief with respect to
an infringement or alleged infringement of such Party's intellectual property
rights; (iv) to enforce an arbitration award under this Section 9; or (v) as
permitted under this Section 9. Subject to the foregoing, this Section 9 will
provide the exclusive procedure for resolving disputes under this Agreement. Any
litigation under this Agreement or any Task Order will be brought in a state or
federal court sitting in Wilmington, Delaware. Each Party will continue
performing its respective obligations under this Agreement while any dispute
submitted to arbitration or litigation under this Section 9 is being
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resolved until such obligations are terminated by the expiration or termination
of this Agreement or by a final and binding arbitral award, order, or judgment
to the contrary under this Section 9.
10. Media Releases. Neither Party will use the other Party's name, trademarks
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or service marks or refer to the other Party directly or indirectly in any media
release, public announcement or public disclosure relating to this Agreement to
the extent the materials in such media release, announcement or disclosure have
not previously been made publicly available without the other Party's prior
written approval which shall not be unreasonably withheld. Neither Party shall
use the other Party's trademarks or service marks without the other Party's
prior review of the quality of such project or product or otherwise in
accordance with the other Party's instructions. Notwithstanding the other
provisions set forth in this Section 10, either Party may make such public
announcements and disclosures relating to this Agreement as are required, based
on the advice of such disclosing Party's counsel, by applicable law or
regulations governing NASDAQ.
11. Assignment. This Agreement will be binding upon and inure to the benefit
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of each Party and its respective successors and permitted assigns, but neither
this Agreement nor any of the rights, interest or obligations hereunder may or
can be assigned by either Party without the prior written consent of the other
Party, except that either Party may assign this Agreement to (a) any affiliate
of such Party, or (b) the surviving entity in connection with the merger,
consolidation, or sale of substantially all of the assets of such Party.
12. Notices. All consents, notices, requests, demands, and other
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communications to be given or delivered under or by reason of this Agreement
will be in writing and will be deemed given when delivered personally against
receipt, on the next business day when sent by overnight courier, and on the
fifth business day after being mailed by certified U.S. mail, return receipt
requested, to each Party at the following address (or to such other address as
that Party may have specified by notice given to the other Party pursuant to
this provision):
Client: TenFold Corporation Xxxxx Systems Corporation
000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000 00000 Xxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxx 00000 Xxxxxx, Xxxxx 00000
Attn: General Counsel Attn: General Counsel
13. Entire Agreement. This Agreement, the Second Amended and Restated Master
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Services Agreement between TenFold and Xxxxx Systems together with Task Order
No. TF/Xxxxx-005, and the Second Amended and Restated Master Services Agreement
between TenFold and PSHS constitute the final, entire, and exclusive agreement
between the Parties with respect to the subject matter hereof. This Agreement
may be amended or modified only by a written instrument duly executed by or on
behalf of each Party.
[Signatures appear on next page.]
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Agreed by TenFold: Agreed by Xxxxx Systems:
TENFOLD CORPORATION XXXXX SYSTEMS CORPORATION
By: _____________________ By: __________________________
Name: Xxxxxx X. Xxxxxxxx Name:_________________________
Title: January 8, 2001 Title: January ___, 2001
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