Drafting Guarantee Contract
I have a startup software company and we build financial transaction software that are used by financial institutions. We have been in business for three years, but our balance sheet is very small, and one of our prospect is concerned about it and worried about not having the services and products supported. I have worked out a deal with a larger firm to provide guarantee, but I need to create a tri-party contract that lists the obligations, and duties. I have been working with local law firm, but my attorney is out of station and I need this quickly. I have drafted the following points, and can answer if you need more information....
1. Licensee's main business relationship is with the Licensor, and the Licensor has obligation to meet the service level standards agreed in the master agreement.
2. If Licensor is not able to perform its duty repeatedly and meet the service level standards set forth in the Master Agreement between Licensor and Licensee, Licensee agrees to notify both Licensor and Guarantor, in writing about its dissatisfaction of the service provided. If the Licensor is not able to address the concerns to Licensee's satisfaction, within 30 calendar days from the date of written notice, Guarantee Event (??? Not sure what will you call this event as – should it be assignment event) will be enacted and the following terms would apply.
3. Once Guarantor is called upon to provide the services, Guarantor agrees to provide the services directly to Licensor, and invoice exactly the same software licensing fee, per the schedule in the agreement.
4. Licensor agrees to provide all human and technical resources to Guarantor to perform the services required to support the Licensee's business.
5. Licensor agrees to provide the same copy of the licensed source code installed in Licensee's location(s), programming techniques, programming concepts, methods of processing, system designs embodies in the software, manuals, data structures, flow charts, discoveries, inventions, concepts, content partners, product pricing, technical drawings, algorithms, product specifications relating the Licensed Software. Licensor is and remains the sole owner of the software, patents, inventions, drawings, algorithms, documents and all the rights embedded within the licensed software, but transfers the right to use the intellectual properties to Guarantor only for the purpose of rendering the services to Licensee and meet the service level standards described in Section-3.
6. When Licensor provides the services directly to Licensee, Licensor will pay 10% of the licensing fee to Guarantor, as compensation towards providing the guarantee. Licensee has no obligation
7. When Guarantor is called upon to provide the services directly to Licensee, Guarantor will use all available Licensor's resources, and augment its own technical resources if required. If Guarantor is using its own technical resources, Guarantor will first deduct the compensation cost of those resources, keep 20% of the remaining, and pay 80% the remaining amount to Licensor.