1.1 “Cap Table Platform” means third-party cap table management software, transfer agent services, etc. The services and software may be those provided by eShares, Inc. DBA Carta, Inc., Prolific Labs Incorporated (Pulley), Solium Capital ULC (Shareworks), LTSE Equity (CapTable.io), among others.
1.2 “Cap Table Audit Service” means Company’s service for verifying data points within Customer’s cap table by cross-checking with provided legal documentation. The Cap Table Audit Service is described in greater detail on Exhibit A hereto.
1.3 “Customer Data” means any and all data owned by Customer or its End Users and provided to the Company by or on behalf of Customer, including in connection with the Services.
1.4 “Equity Administration Service” means Company’s service for maintaining capitalization tables to keep them up-to-date on the Cap Table Platform. The Equity Administration Service is described in greater detail on Exhibit A hereto.
1.5 “Fees” means, individually and collectively, the fees and expenses set forth in each Order.
1.6 “Intellectual Property Rights” means all forms of proprietary rights, titles, interests, and ownership relating to patents, copyrights, trademarks, trade dresses, trade secrets, know-how, mask works, droit moral (moral rights), and all similar rights of every type that may exist now or in the future in any jurisdiction, including without limitation all applications and registrations therefore and rights to apply for any of the foregoing.
1.7 “Order” means each document executed by authorized representatives of each party and which may set forth applicable Services to be provided by Company and the Fees due to Company.
1.8 “Premier Onboarding Service” means Company’s service for assisting onboarding onto the Cap Table Platform, and includes, filtering through Customer’s legal documents to build and upload a capitalization table onto the Cap Table Platform. The Premier Onboarding Service is described in greater detail on Exhibit A hereto.
1.9 “Services” mean, collectively, the Premier Onboarding Service, the Equity Administration Service, and the Cap Table Audit Service, as well as any additional services offered by Company from time to time as agreed by the parties in an Order.
1.10 "Person" means an individual, corporation, partnership, joint venture, limited liability entity, governmental authority, unincorporated organization, trust, association or other entity
2.1 Services. Company shall make commercially reasonable efforts to provide Customer the applicable Services under each applicable Order in accordance with this Agreement and Company’s documentation for the applicable Services as provided to Customer from time to time (“Documentation”).
2.2 Orders. The parties may agree from time to time that Company shall perform additional Services for Customer pursuant to an Order. No changes to an Order will be effective unless and until memorialized in a written change order or additional Order signed by both parties. Customer’s rights with respect to any tangible deliverables that are provided to Customer shall be as set forth in the applicable Order. To the extent an Order does not provide for such rights, Customer shall be deemed to have been granted, upon payment of all fees due under the applicable Order, a limited, non-exclusive license during the Term to internally use such deliverable solely in direct connection with its authorized use of the Services.
2.3 Performance of Services. Customer acknowledges that the Services will be performed on the basis of Company using its reasonable efforts and judgment based on the information available to Company. To the extent Company utilizes subcontractors in the performance of the Services, it shall remain liable for their performance hereunder.
2.4 Customer Resources. Customer shall provide, maintain and make available to Company, at Customer’s expense and in a timely manner, the following resources, and such other additional resources as Company may from time to time reasonably request in connection with Company’s performance of the Services: (i) qualified Customer personnel or representatives who will be designated by Customer to consult with Company on a regular basis in connection with the Services and provide Company with documentation or other information necessary to perform the Services; (ii) access to Customer’s premises and appropriate systems and/or workspace for Company personnel at Customer’s premises if necessary for performance of portions of the Services to be performed at Customer’s premises; and (iii) access to Customer Data (collectively, the “Customer Resources”).
2.5 Effect of Customer Failure or Delay. Company is not responsible or liable for any late delivery or delay or failure of performance caused in whole or in part by Customer's delay in performing, or failure to perform, any of its obligations under this Agreement. In the event of any such delay or failure, Company may, by written notice to Customer, extend all or any subsequent due dates for the Services that Company deems reasonably necessary. The foregoing is in addition to, and not in lieu of, all other remedies Company may have for any such failure or delay by Customer.
2.6 Cap Table Platform. Company may require access to Customer’s account on the Cap Table Platform in order to provide the Services. Without limiting Section 2.4 and Section 2.5, Customer agrees to timely provide all access credentials necessary for such access. Any such access will be pursuant to the terms and conditions governing Customer’s access to the Cap Table Platform, which Company does not control (“Cap Table Platform Terms”). Company shall have no liability with respect to any modification, suspension or termination of the Cap Table Platform Terms. Customer is responsible for ensuring that Company’s use of the Cap Table Platform in connection with the Services complies with the Cap Table Platform Terms. Without limitation, Customer agrees that any breach of the Cap Table Platform Terms or any other liability arising from or related to Company’s use of the Cap Table Platform on Customer’s behalf is Customer’s responsibility, and also included within Customer’s obligation under Section 8.1(d).
3.1 Control. Customer acknowledges and agrees that, as between the parties, Customer is solely responsible for the Customer Data, including without limitation, its format, integrity, accuracy, maintenance, and its compliance with all applicable laws, rules, and regulations.
3.2 Customer Data. As between the parties, Customer shall own all right, title and interest in and to Customer Data. Customer hereby grants Company a non-exclusive, worldwide license to use, reproduce, modify, create derivative works of, display, perform and transmit the Customer Data in connection with: (i) providing the Services and for otherwise performing its obligations hereunder; (ii) improving the Services and Company’s products and services; and (iii) as may be required by law or legal process. Except as expressly provided for in the foregoing sentence, Company will not, share or transmit any Customer Data in any form or format to any third party without the prior written consent of Customer, except that Company may provide Customer Data to its third-party contractors and service providers for use on behalf of Company as contemplated hereunder.
4.1 Fees. Customer shall pay Company the Fees as set forth in each Order. All recurring Fees under an Order shall be due and payable in advance of the applicable billing period. All other Fees are due and payable in advance of service except to the extent otherwise set forth in an Order. Company may modify the Fees on an annual basis, effective on forty-five (45) days written notice to Customer (“Company’s Notice”), provided that Customer shall have the right to terminate this Agreement on notice to Company on thirty (30) days’ notice delivered no more than fifteen (15) after Company’s Notice.
4.2 Payment Terms. Unless otherwise stated by the parties in an Order, Company shall invoice Customer for Fees on an annual basis. Customer agrees to pay each invoice within thirty (30) days of the invoice date, provided that recurring annual fees under an Order must be received by Company in advance of the applicable billing period regardless of the invoice date. All payments will be made in U.S. dollars. Any amounts due Company under this Agreement not received by the date due will be subject to a late fee of 1.5% per month, or the maximum charge permitted by law, whichever is less. Customer shall pay the amounts due under each invoice without deducting any taxes that may be applicable to such payments. Customer is responsible for paying any and all withholding, sales, value added or other taxes, duties or charges applicable to this Agreement, other than taxes based on Company’s income.
5.1 Company. As between the parties, Company owns all right, title and interest (including all Intellectual Property Rights) in and to the Services and any software, technology, materials and information (i) owned by Company prior to the Effective Date or (ii) created, authored, developed, made, conceived, or reduced to practice by Company after the Effective Date (collectively, the “Company Materials”). Nothing herein shall be construed to transfer any rights, title or ownership of Company Materials or any Company software, technology, materials, information or Intellectual Property Rights to Customer. Customer is not required to provide any ideas, feedback or suggestions regarding any of Company’s products or services (“Feedback”) to Company. To the extent Customer does provide any Feedback to Company, Customer agrees to assign and hereby does assign all right, title and interest in and to such Feedback to Company and acknowledges that Company may freely use, reproduce, modify, distribute, make, have made, sell, offer for sale, import and otherwise exploit in any manner such Feedback without payment of any royalties or other consideration to Customer.
5.2 Customer. As between the parties, Customer owns all right, title and interest (including all Intellectual Property Rights) in and to the Customer Data, and any software, technology, materials and information owned by Customer prior to the Effective Date or created, authored, developed, made, conceived or reduced to practice solely by Customer and without Company’s assistance after the Effective Date (collectively, “Customer Materials”). Nothing herein shall be construed to transfer any rights, title or ownership of the Customer Materials or Intellectual Property Rights therein to Company.
6. TERM; TERMINATION
6.1 Term. This Agreement shall be effective as of the Effective Date, and shall continue in full force and effect until the expiration or termination of all Orders (the “Term”).
(a) Either party may terminate an individual Order in accordance with the termination provisions (if any) described in the applicable Order.
(b) Either party may terminate this Agreement or any applicable Order effective immediately if the other party is in material breach of any obligation, representation or warranty hereunder and fails to cure such material breach (if capable of cure) within thirty (30) days (or ten (10) days in the event of breach of payment obligations) after receiving written notice of the breach from the non-breaching party.
(c) Either party may terminate this Agreement immediately upon written notice at any time if: (i) the other party files a petition for bankruptcy or is adjudicated as bankrupt; (ii) a petition in bankruptcy is filed against the other party and such petition is not removed or resolved within sixty (60) calendar days; (iii) the other party makes an assignment for the benefit of its creditors or an arrangement for its creditors pursuant to bankruptcy law; (iv) the other party discontinues its business; (v) a receiver is appointed over all or substantially all of the other party’s assets or business; or (vi) the other party is dissolved or liquidated.
6.3 Effect of Termination. All rights and obligations of the parties hereunder shall terminate upon expiration or termination of this Agreement, provided that Sections 1, 3, 4 (with respect to accrued but unpaid Fees), 5, 6.3, 8, 9, 10, 11 and 12 shall survive expiration or termination of this Agreement. Company may retain copies of the Customer Data for the uses specified in Section 3.2. In addition, upon any termination, Customer will pay Company for all Services rendered by Company prior to the effective date of such termination, and will reimburse Company for any out-of-pocket third-party expenses incurred by Company in the performance of any Order which expenses cannot be mitigated by Company through commercially reasonable efforts.
7. REPRESENTATIONS AND WARRANTIES
7.1 Mutual. Each party represents and warrants to the other party that: (i) it has the full power and authority to enter into this Agreement; (ii) the execution of this Agreement and performance of its obligations under this Agreement does not violate any other agreement to which it is a party; and (iii) this Agreement constitutes a legal, valid and binding obligation when executed and delivered.
7.2 Customer. Customer represents and warrants to Company that: (i) it has all right, title, and interest in and to the Customer Data necessary for its use in connection with the Services and the Cap Table Platform; (ii) it will not use the Services or any outputs or insights generated from use thereof, or any deliverables resulting from the Services in a manner or in connection with any activity that would violate any law, rule or regulation; (iii) it has obtained all necessary consents and permissions required for its collection of the Customer Data and use of the Customer Data as contemplated under this Agreement; and (iv) the Customer Data (including the storage, reproduction, transfer, and use thereof as contemplated hereunder) does not and will not (x) infringe upon, violate, or misappropriate the Intellectual Property Rights of any third party, (y) slander, defame, or libel any person, or (z) violate any applicable laws, rules, or regulations.
7.3 Company. Company represents and warrants to Customer that it shall perform the Services in a professional and workmanlike manner. Customer’s sole remedy, and Company’s exclusive liability, with respect to any breach of the representation and warranty set forth in this Section 7.3 is, at Company’s election, (i) Company’s re-performance of the non-compliant Services such that they are compliant or (ii) termination of the applicable Order to the extent it relates to such non-compliant Services and refund of a proportionate amount of the Fees paid under such Order to the extent such amount relates to such non-compliant Services.
8.1 Customer Indemnity. Customer agrees to, at its own expense, indemnify, hold harmless, defend and/or settle any claim, action or suit brought by a third party (including a Customer’s client) against Company or its directors, officers or employees (“Company Indemnitees”) arising out of or relating to: (a) Customer’s gross negligence, willful misconduct, breach of representations and warranties set forth in Section 7.2; (b) alleging that Customer Data or Customer’s use of the Services in breach of this Agreement, infringes or misappropriates such third party’s Intellectual Property Rights or violates applicable laws, rules, or regulations; (c) Customer’s of the Services; or (d) any claim in connection with Customer’s or Company’s use of the Cap Table Platform in connection with Services, including without limitation any breach of Third-Party Terms applicable to the Cap Table Platform, except to the extent arising from or related to Company’s gross negligence or willful misconduct (a “Claim”).
8.2 Indemnification Procedure. Company shall promptly notify Customer in writing of any action for which Company believes it is entitled to be indemnified pursuant to Section 8.1. Company shall cooperate with Customer at the Customer’s sole cost and expense. Customer shall immediately take control of the defense and investigation of such Claim and shall employ counsel reasonably acceptable to Company to handle and defend the same, at Customer's sole cost and expense. Company's failure to perform any obligations under this Section 8.2 will not relieve Customer of its obligations under this Section 8 except to the extent that Customer can demonstrate that it has been materially prejudiced as a result of such failure. Company may participate in and observe the proceedings at its own cost and expense with counsel of its own choosing. Customer may settle a Claim so long as any settlement (i) does not, without Company’s prior written approval, (x) involve the admission of any wrongdoing by any Company Indemnitee, (y) restrict any Company Indemnitee’s future actions, or (z) require any Company Indemnitee to take any action, including the payment of money, and (ii) includes a full release of the Company Indemnitees.
9. DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, Company MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, AND Company EXPRESSLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR PERFORMANCE. Company and ITS SUPPLIERS, LICENSORS, PARTNERS AND SERVICE PROVIDERS DO NOT WARRANT THAT THE SERVICES WILL BE CORRECT, OR ERROR-FREE OR THAT DEFECTS WILL BE CORRECTED. Company DOES NOT WARRANT THE RESULTS OF USE OF THE SERVICES, OR ANY Company MATERIALS. WITHOUT LIMITING THE GENERALITY OF the FOREGOING, CUSTOMER ACKNOWLEDGES THAT NOTHING IN THIS AGREEMENT NOR ANY COMMUNICATION OF ANY KIND BY ANY Company PERSONNEL SHALL BE CONSTRUED TO BE A REPRESENTATION OR WARRANTY THAT THE RESULTS PROVIDED BY THE SERVICES OR Company MATERIALS SHALL BE ACCURATE.
10. CONFIDENTIALITY. Each party shall keep confidential the terms of this Agreement, all information and materials provided or made available by the other party, whether or not marked as confidential or proprietary, (for orally disclosed information) that the receiving party knows or should have reasonably known is confidential or proprietary at the time of disclosure (“Confidential Information”). For clarity, the features, functionality and content of the Services, Documentation, the Fees charged hereunder and any information regarding planned modifications or updates to the Services or other Company products and services constitutes Confidential Information of Company. The Confidential Information of Customer includes the Customer Data. Each party shall keep and instruct its employees and agents, and in the case of Company, its third-party contractors, to keep Confidential Information confidential by using at least the same care and discretion as used with that party’s own confidential information, but in no case less than a prudent and reasonable standard of care. Neither party shall use Confidential Information other than for purposes of performing its obligations hereunder or as authorized by the disclosing party. Notwithstanding the foregoing, Company makes nor representations that any Customer Data that is subject to attorney-client privilege or confidentiality will retain such privilege and/or confidentiality pursuant to the use of such Customer Data in connection with the Services and Company disclaims any and all liability in connection with the loss or diminishment of any such privilege or confidentiality. Customer should consult its legal counsel prior to providing any such Customer Data to Company. Information or materials shall not constitute Confidential Information if it is: (i) in the public domain through no fault of the receiving party, (ii) known to the receiving party prior to the time of disclosure by the disclosing party, (iii) lawfully and rightfully disclosed to the receiving party by a third party on a non-confidential basis, (iv) developed by the receiving party without reference to Confidential Information or (v) required to be disclosed by law or legal process, provided that the receiving party promptly provide notice to the disclosing party of such request or requirement so the disclosing party may seek appropriate protective orders. If any party, its employees or agents breaches or threatens to breach the obligations of this Section 10, the affected party may seek injunctive relief from a court of competent jurisdiction, in addition to its other remedies, as the inadequacy of monetary damages and irreparable harm are acknowledged.
11. Limitation of Liability.
11.1 DAMAGES. EXCEPT WITH RESPECT TO SECTION 8 OR EITHER PARTY’S BREACH OF SECTION 10, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY HEREUNDER FOR ANY PUNITIVE, INCIDENTAL, INDIRECT, SPECIAL, RELIANCE OR CONSEQUENTIAL DAMAGES, INCLUDING LOST BUSINESS, REVENUE, OR PROFITS, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR NOT THE PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES. EXCEPT WITH RESPECT TO SECTION 8 OR EITHER PARTY’S BREACH OF SECTION 10, IN NO EVENT WILL EITHER PARTY’S LIABILITY AND DAMAGES UNDER THIS AGREEMENT EXCEED THE SUM OF THE TOTAL FEES PAID TO COMPANY UNDER THIS AGREEMENT DURING THE SIX MONTHS IMMEDIATELY PRECEDING THE DATE OF THE FIRST SUCH CLAIM. THE PARTIES AGREe THAT THE LIMITATIONS AND DISCLAIMERS OF LIABILITY SET FORTH IN THIS SECTION 11 WILL APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE AND REGARDLESS OF THE THEORY OF LIABILITY.
12.1 Relationship of the Parties. The parties are independent contractors with respect to each other. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture among the parties hereto, or an employee-employer relationship. No party shall have any right to obligate or bind any other party in any manner whatsoever.
12.2 Non-Exclusivity. This Agreement is non-exclusive and does not restrict or prevent Company in any way from (a) entering into similar relationships with third parties and (b) providing similar or identical materials, information, data (excluding Customer Data), products, services, or technologies to other parties.
12.3 Third-Party Beneficiaries. Except as expressly set forth in this Agreement, nothing herein shall give, or is intended to give, any rights of any kind to any third parties.
12.4 Assignment. Neither party may assign any of its rights or obligations under this Agreement without the prior written consent of the other party, except that Company may assign its rights and obligations under this Agreement without the consent of Customer in connection with any merger (by operation of law or otherwise), consolidation, reorganization, change in control or sale of all or substantially all of its assets related to this Agreement or similar transaction. This Agreement inures to the benefit of and shall be binding on the parties’ permitted assignees, transferees and successors.
12.5 Force Majeure. Except for payment obligations, neither party will be responsible for any failure or delay in its performance under this Agreement due to causes beyond its reasonable control, including, but not limited to, labor disputes, strikes, lockouts, internet or telecommunications failures, shortages of or inability to obtain labor, energy, or supplies, war, terrorism, riot, acts of God or governmental action, acts by hackers or other malicious third parties and problems with the Internet generally, and such performance shall be excused to the extent that it is prevented or delayed by reason of any of the foregoing.
12.6 Notices. All notices under the terms of this Agreement shall be given in writing and sent by registered or certified mail, with postage prepaid and return receipt requested, to the addresses noted in the signature section of this Agreement. All notices shall be presumed to have been given three business days following deposit in the mail as set forth in the foregoing.
12.7 Amendments. An amendment of this Agreement shall be binding upon the parties so long as it is in writing and executed by both parties. No regular practice or method of dealing between the parties shall modify, interpret, supplement or alter in any manner the express terms of this Agreement.
12.8 Construction. In the event of a conflict between the terms of this Agreement and any Order, the terms of this Agreement shall control unless the parties explicitly state otherwise in an Order, and in such instances the terms of such Order will control only as to the subject matter discussed and only for that Order. This Agreement shall be fairly interpreted and construed in accordance with its terms and without strict interpretation or construction in favor of or against either party. Each party has had the opportunity to consult with counsel in the negotiation of this Agreement. Section headings are for reference purposes only, and should not be used in the interpretation hereof.
12.9 Severability; Waiver; Counterparts. If any provision, or portion thereof, of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, such determination will not impair or affect the validity, legality, or enforceability of the remaining provisions of this Agreement, and each provision, or portion thereof, is hereby declared to be separate, severable, and distinct. A waiver of any provision of this Agreement will only be valid if provided in writing and will only be applicable to the specific incident and occurrence so waived. The failure by either party to insist upon the strict performance of this Agreement, or to exercise any term hereof, will not act as a waiver of any right, promise or term, which will continue in full force and effect. This Agreement may be signed in counterparts. Each of them is an original, and all of them constitute one agreement.
12.10 Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without reference to conflicts of laws principles. The parties agree that the state and federal courts in Delaware will have exclusive jurisdiction and venue under this Agreement, and the parties hereby agree to submit to such jurisdiction exclusively.
12.11 Publicity. Subject to Customer’s prior written consent, which shall not be unreasonably withheld, Company may use Customer’s name and logo for the purpose of listing Customer as a client of Company in external communications, marketing materials, on Company’s website and as specified in Section 3.2.
12.12 Entire Agreement. This Agreement constitutes the complete, final and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any and all prior or contemporaneous oral or written representations, understandings, agreements or communications between them concerning the subject matter hereof. Neither party is relying upon any warranties, representations, assurances or inducements not expressly set forth herein.
DESCRIPTION OF SERVICES
i) Premier Onboarding Service
a) Checkmate Equity’s Premier Onboarding Service means Checkmate Equity’s service for assisting onboarding onto the Cap Table Platform, and includes, filtering through Customer’s legal documents to build and upload a capitalization table onto the Cap Table Platform. More specifically, this service includes the assistance with the following on the Cap Table Platform:
· Coordination throughout onboarding via phone, video chat, and email
· Document collection and filtration
· Extraction of data points from documentation to import of company cap table data onto the Cap Table Platform
· Input of governing charters into the Cap Table Platform library
· Setting current and historic authorized share amounts in the Cap Table Platform per governing charters
· Setting current and historic fair market values based upon board resolutions and 409a valuations
· Creation of document sets in the Cap Table Platform utilizing templated documentation provided
· Attachment of document sets or executed documentation to applicable securities
· Clearing all Cap Table Platform health checks
· Reconciliation to current cap tables
· Preparation of heads-up emails to be sent to shareholders prior to Cap Table Platform account activation
· Drafting board consent for Cap Table Platform go-live authorizing the Cap Table Platform provider as transfer agent
· Setup of Cap Table Platform integrations (HR integrations and/or Bookkeeping)
· Close out call including a detailed product demo of the Cap Table Platform
ii) Equity Administration Service
a) Checkmate Equity’s Premier Onboarding Service means Checkmate Equity’s service for maintaining capitalization tables to keep them up-to-date on the Cap Table Platform. More specifically, this service includes the assistance with the following on the Cap Table Platform:
· Drafting new issuances (certificates, equity awards, warrants, notes, etc.
· Heads-up emails to stakeholders prior to issuances
· Equity award exercises
· Secondary transactions
· Stakeholder termination modeling and execution
· Board meeting management
· Fair market value inputs (board determined and 409a)
· Expense accounting coordination
· Form 3921 preparation
· Monthly cap table reporting
· Scenario modeling
· Stock splits
· Share class conversions
· Authorized share amount amendments
· Option pool amendments
· Account user management
· Cap table information sharing
iii) Cap Table Audit Service
a) Checkmate Equity’s Cap Table Audit Service means Company’s service for verifying data points within Customer’s cap table by cross-checking with provided legal documentation. More specifically, this service provides assistance with the following on the Cap Table Platform:
· Verification of cap table data points, including:
-Fair market value inputs
-Historic and current option pool amounts
-Historic and current authorized share amounts
-Proof of payments
· At the conclusion of the verification stage, a detailed audit report will be provided which will outline all red flags in addition to our recommended remedies
· Upon receiving sign off on our recommended remedies, our team will apply cap table remediation based upon report recommendations