[Board] [OSGeo-Conf] 2017 Boston agreement & seed funding - IMPORTANT

Wed Mar 9 04:24:20 PST 2016

Michael

The additional guarantee for Bonn was based upon a risk analysis at different points in the build up to the conference and an estimate of the maximum exposure if the event had to be cancelled or proceeded with a lower than viable attendance. It was not automatically equal to the seed funding.

I don’t want to just negotiate you down to a lower figure. Can you and your PCO consider the exposure at different points and come up with a revised additional guarantee that you need. If you will be offsetting any additional risk through an insurance policy it might be worth exploring the premium versus excess ratios to come up with the most efficient balance between an OSGeo additional guarantee and insurance.

In my motion to the CC I asked for approval for the seed funds but did not mention the ‘additional guarantee’. Given time pressures I am going to submit a proposal to the Board for consideration at tomorrow meeting for seed funds of $70k and an additional guarantee of up to $45k i.e. a total exposure of $115k which is the same level of guarantee offered to Bonn for this year. If you come up with a different level of additional guarantee or the CC objects I will have to go back to the board and ask them to adapt the motion subsequently.

Darrell has suggested, in a separate mail in this thread, that the additional ‘legal’ paras are standard clauses, unless someone else objects I am happy to forward the agreement (with additional guarantee amended) to the board for approval.

Darrell also raised the question of how OSGeo can limit it’s liability in the event that the PCO or the LOC undertakes irrevocable commitments in excess of the agreed sum. My understanding is that the agreement is primarily between OSGeo and the PCO with the LOC acting as our agent, the PCO by signing this agreement accepts that OSGeo liability is limited to $115k (or whatever sum we agree) and will take necessary steps (i.e. insurance to mitigate any risks). While we there is some uncertainty about the enforceability of this agreement or its outcome, it is a lot better than we had previously where nearly everything was done on the basis of a ‘gentleman’s agreement’ - that said, so far no global FOSS4G has had to call on OSGeo to bail them out.

I have copied the Board into this mail so that they are fully aware of the background and our discussions.

Cheers

______
Steven

> On 8 Mar 2016, at 20:42, Michael Terner <mgt at appgeo.com> wrote:
> 
> Totally fair questions. Here's where these things came from:
> Regarding the "advance" and the guarantee: We followed the form of how Bonn was setup. In the Bonn template "schedule" that was shared with us there was $57,500 for the "advance" and $57,500 for the "additional guarantee". Then the schedule identified $115,000 for the "Maximum total OSGeo financial exposure.".  The previous threads had identified our total "maximum advance" as $70,000 (that we would seek in two installments). Since the "additional guarantee" had not been discussed explicitly I followed the "Bonn model" and had the additional guarantee match the advance payment, i.e., the $70,000; for a total exposure of $140,000. If that's not appropriate, or the "additional guarantee"; or "total exposure" needs to back down we will figure it out with your guidance.
> Regarding the "legal" language: In reviewing the Bonn agreement we were both pleased and a little surprised that there weren't more "terms and conditions". We're all for simplicity and clarity. That said, our PCO, Delaney Meeting & Event Management (DMEM) made these suggestions as they will be a signatory to the agreement. In short, these are common sense protections that are routine in almost all contracts. We certainly understand and respect your potential need to have additional review, and we certainly reviewed the language but did not feel that engaging legal counsel was necessary due to the fact that these clauses are so commonplace (i.e., I have seen this language many times before) and because they protect both parties to the agreement. Here's my layman's summary of what they mean and why they are important (and this is in no way is designed to dissuade you from getting the reviews OSGeo thinks are necessary):
> Mitigation Clause/Force Majeure: If something terrible and beyond the control of either of us happens (e.g., crazy weather; terrorism that locks down travel; etc.) that causes the event to be cancelled late in the game, there is a means to do that. As per later in the document, we will have "cancellation insurance" so that if this happens neither party loses already spent $'s.
> Indemnification: Is a mutual protection that if either party is acting in bad faith or shows negligence or blatant incompetence, that causes damage and as a result the other party (i.e., the one that did not cause the problem) is sued, the party at fault is responsible for those damages and must indemnify the non-responsible party.
> Arbitration: If there is a dispute, this clause indicates that it will be resolved through arbitration, as opposed to a lawsuit. Arbitration is generally a quicker and less costly process (at least in the USA).
> Event insurance: We will obtain insurance to cover both cancellation exposure and liability that may result from this event. This is commonplace and our PCO is familiar with these types of policies and affordable means of obtaining them. These costs are included in our budget.
> Even with these additions, this agreement remains very lean. Obviously, we do not want to add unnecessary complexity or slow things down. Rather, our intent is to have a solid agreement that protects both parties and helps to cement a productive and collaborative partnership.
> 
> Please let us know if there's any other information you require; or anything else we can do to clarify things. If this needs more thorough and time consuming review we regret that, but also accept it.
> 
> Please let us know what comes next, and in particular whether we should revise our request for the size of the "additional guarantee".
> 
> Thanks to all for the work you're putting into this...
> 
> MT
> 
> 
> 
> On Tue, Mar 8, 2016 at 3:04 PM, Steven Feldman <shfeldman at gmail.com <mailto:shfeldman at gmail.com>> wrote:
> Michael
> 
> The overall guarantee including seed funding is $140k - I do not recall this high a number being advised previously. Could you clarify.
> 
> While I do not have any fundamental disagreement with the clauses that you have added at the end, they will need to be reviewed by someone more legally qualified than me which may incur both costs and delay. 
> ______
> Steven
> 
> 
>> On 8 Mar 2016, at 16:43, Michael Terner <mgt at appgeo.com <mailto:mgt at appgeo.com>> wrote:
>> 
>> Conference Dev Committee:
>> Thank you very much for your support of the motion to provide our team seed funding.
>> 
>> As promised earlier in the thread, attached is a "draft agreement" between OSGeo and the Boston Location Organizing Committee (BLOC), as well as with our PCO, Delaney Meeting & Event Management (DMEM). We are hopeful that this is on target and can be passed on to the Board in time for their meeting on Thursday. We are assuming that Conference Dev will bring this to the Board's attention.
>> 
>> Here's what you will find in the attached document (attached as .DOC, .ODT and .PDF):
>> Our re-work of the Bonn Template Agreement to include our specific requests for advance and guarantees; as well as our "percentage of profits returned to OSGeo" language that was also contained in our proposal (and is slightly different than 90%).
>> Some common-sense legal terms that were suggested by DMEM for things like Force Majeur, mutual indemnification and arbitration of disputes. We also affirm our commitment to purchase our own cancellation and liability insurance.
>> Attachment 1 which is structured as a PCO contract between OSGeo and DMEM on behalf of the BLOC, allowing DMEM to serve as our financial agent and as the entity that would sign the commitment with our venue (this was distributed earlier).
>> Given the nature of this arrangement we have three signature lines for OSGeo, the BLOC, and also DMEM, on behalf of the BLOC.
>> 
>> Please let us know if you have any question, or need anything further. And again, thanks in advance for carrying this forward to the Board.
>> 
>> Sincerely,
>> 
>> MT & the BLOC
>> 
>> 
>> 
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> 
> 
> -- 
> Michael Terner
> Executive Vice President
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> Applied Geographics, Inc.
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