Presented at InnoTech San Antonio 2016. All right reserved.

1. WHAT I WISH I KNEW
BEFORE I SIGNEDTHAT
CONTRACT
LINES OF RESPONSIBILITY AND COMMON PITFALLS

2. TODAY’S SPEAKERS
Gregory S.Weiss
CEO
GTW Management, LLC
Blake K. Holman
CIO / CSO
St. David’s Foundation

3. KEY ELEMENTS OF A CONTRACT
“Legal” “Both” “Business”
Indemnification PaymentTerms / Milestones Term
Warranties / Representations Termination Price
IP Ownership / Residual rights Data Security / Security Compliance Scope of work / Services to be
rendered
Termination charges / fees
Auto-renewal
Marketing / Promotion rights
Exclusivity / Non-Compete

4. WHAT MAKES FOR A GOOD CONTRACT?
• COLLABORATION between Legal and Business
• READ what you’re agreeing to
• UNDERSTAND / CONFIRM what you’re agreeing to
• NEGOTIATE what you don’t like in what you READ / UNDERSTAND
• Be willing toWALK AWAY from the negotiations
• MAINTAIN your contract after it’s signed

5. FINER POINTS OF NEGOTIATION
• 2Tools – Knowledge and Leverage
• You may not to be able to improve your leverage; but
• You can always improve your knowledge
• Believe it or not . . .
• Legal can (sometimes) help improve your knowledge!

6. ART OR SCIENCE?

7. DON’T FORGETTHE MAINTENANCE

8. SAMPLE COLLABORATIVE CONTRACT PROCESS
• Business engages in initial negotiations
• Business seeks Legal support:
• After initial read of contract, while negotiations still ongoing
• Legal review focuses on “Legal” areas, but confirms mutual understanding of all points
• Legal can participate in negotiations, or simply review and confirm final draft of contract before
execution
• Consider bringing Legal in early if there are any disagreements or concerns after contract is signed
(ideally before work is complete)
• Could be informational only
• Could be to assist with resolution

9. EXAMPLES
• Enterprise-level HRIS – poor negotiation
• Enterprise Cloud Storage agreement – effective negotiation
• Services agreement for large financial institution – successful collaborative negotiation
• AcquisitionTSA – effective collaborative process
• Enterprise-level ERP system – poor maintenance

10. ONE – POOR NEGOTIATION
• Business operated independently of legal in negotiations
• Scope of work was “understood”, but not clearly defined – very general
• Payment milestones equally vague
• Vendor failed to deliver what client expected – but, no clear breach of agreement
• Legal involved only after vendor and client reached standstill – end result:
• Led to over 12 months of frustration and rework
• Client didn’t receive effective solution, and had to spend substantially more time and effort in
implementation
• Vendor didn’t get paid for over a year

11. TWO – EFFECTIVE NEGOTIATION
• Started with standard language, pushed back on several points, prior to involving Legal
• Bandwidth restrictions
• Storage of data outside the United States at provider’s discretion
• No liability clause for deletion (related to recoverability)
• Unilateral ability to change vanity id on URL
• Ability to market using our name without any consent
• Clarity around service level (99.9%, on what basis) and Support hours (definition of local)
• Renewal term same as initial term, rather than month to month
• Successfully clarified / negotiated desired position on all but one point withVendor
• Collaborated with Legal on final product to ensure both Legal and Business term requirements met

12. THREE – EFFECTIVE COLLABORATIVE
NEGOTIATION
• Financial institution had many specific requirements, including robust data security
• Some “requirements” were unreasonable based on company’s technology configuration
• Business and Legal collaborated beginning early in negotiations – end result:
• They worked together to identify:
• Key contract requirements
• Capabilities of company
• Effective work-around solution
• Negotiations focused on making sure final agreement was consistent with the solution

13. FOUR – EFFECTIVE COLLABORATIVE PROCESS
• TSA can be a critical component of any acquisition
• Effective collaborative process – cross-functional collaboration across entire company
• Designated leads from each discipline (including from target company)
• Met regularly to identify and hone key dependencies
• Each iteration viewed in light of existing business operations to capture essential services and
appropriate pricing
• Final agreement subject to regular maintenance through integration process
• Regular, cross-functional meetings for extended period after closing
• Follow up negotiations with seller, as necessary

14. FIVE – POOR MAINTENANCE
• Business and Legal collaborated on contract negotiations
• Result was specific and detailed agreement, with appropriate concessions on both sides
• Payment milestones were specifically outlined and clear
• Problems arose in implementation – company requested substantial customization
• Vendor objected, declared milestone completed
• Business did not collaborate with Legal until after it (reluctantly) agreed milestone was complete
• Legal involved after payment dispute – end result:
• Implementation substantially delayed (vendor ceased work)
• Opportunity costs for both client and vendor were much higher
• Negotiated settlement ultimately led to delay in date milestone deemed complete, but payment still required
before solution was fully usable by client

15. Q&A
Gregory S.Weiss
CEO
GTW Management, LLC
Blake K. Holman
CIO / CSO
St. David’s Foundation