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Exhibit 2.11
MULTI-YEAR STRATEGIC SERVICES AGREEMENT
THIS MULTI-YEAR STRATEGIC SERVICES AGREEMENT (this "Agreement") is made
and entered into this 20th day of January, 1999, by and between Xxxxxx
International Inc. (hereinafter "Xxxxxx"), an Ohio corporation and Component
Software International, Inc. (hereinafter "CSI"), an Ohio corporation.
WITNESSETH:
WHEREAS, Xxxxxx desires to engage CSI from time to time pursuant to one
or more Work Statements to develop, create, test, and deliver certain
programming materials and consulting services for use in Xxxxxx'x drug
development/contract research business, and CSI is interested in accepting such
engagements, subject to the parties' further agreement on the scope and terms of
each such Work Statement; and
WHEREAS, Xxxxxx and CSI mutually desire to set forth in this Agreement
certain terms applicable to all such engagements;
NOW, THEREFORE, Xxxxxx and CSI, intending to be legally bound, hereby
agree as follows:
SECTION 1
DEFINITIONS
When used in this Agreement and in each Work Statement issued
hereunder, the capitalized terms listed in this Section 1 shall have the
following meanings:
1.1 CODE -- shall mean computer programming code. If not otherwise
specified, Code shall include both Object Code and Source Code. Code shall
include any Maintenance Modifications or Enhancements thereto created by CSI
from time to time, and shall include Enhancements thereto when added to the Code
in connection with a Work Statement issued hereunder.
1.1.1 OBJECT CODE -- shall mean the machine-readable form of
the Code.
1.1.2 SOURCE CODE -- shall mean the human-readable form of the
Code and related system documentation including all comments and any procedural
code such as job control language.
1.2 CONFIDENTIAL INFORMATION -- shall mean: (i) the specifications, the
Product, the CSI-Owned Software, the Xxxxxx-Specific Software and any trade
secrets related to any of the foregoing, including but not limited to any
information relating to either party's product plans, designs, costs, prices and
names, finances, marketing plans, business opportunities, personnel, research,
development or know-how; (ii) any information designated in writing by the
disclosing party as confidential or, if disclosed orally, designated as
confidential at the time of disclosure and reduced
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to writing and designated as confidential in writing within thirty (30) days;
and (iii) the terms, conditions and existence of this Agreement; provided,
however that "Confidential Information" will not include information that: (a)
is or becomes generally known or available by publication, commercial use or
otherwise through no fault of the receiving party; (b) is known and has been
reduced to tangible form by the receiving party at the time of disclosure and is
not subject to restriction; (c) is independently developed by the receiving
party without use of the disclosing party's Confidential Information; (d) is
lawfully obtained from a third party who has the right to make such disclosure;
or (e) is released for publication by the disclosing party in writing.
1.3 CONTRACT YEAR -- shall mean each 365 day period of January, 20
through January, 19 during the term of this Agreement.
1.3 CSI -OWNED SOFTWARE -- shall mean all elements or portions of
software included within a Product which are acquired or developed by CSI
outside the scope of this Agreement.
1.4 DELIVERABLES -- shall mean all Code, Documentation, and other
materials developed for or delivered to Xxxxxx by CSI under this Agreement and
under any Work Statement issued hereunder.
1.5 DERIVATIVE WORK -- shall mean a work that is based upon one or more
preexisting works, such as a revision, modification, translation, abridgement,
condensation, expansion, or any other form in which such preexisting works may
be recast, transformed, or adapted, and that, if prepared without authorization
of the owner of the copyright in such preexisting work, would constitute a
copyright infringement. For purposes hereof, a Derivative Work shall also
include any compilation that incorporates such a preexisting work.
1.6 DOCUMENTATION -- shall mean user manuals and other written
materials that relate to particular Code, including materials useful for design
(e.g., logic manuals, flow charts, and principles of operation). Documentation
shall include any Maintenance Modifications or Enhancements thereto created by
CSI from time to time, and shall include Enhancements thereto when added to the
Documentation in connection with a Work Statement issued hereunder.
1.7 ENHANCEMENTS -- shall mean changes or additions, other than
Maintenance Modifications, to Code and related Documentation, including all new
releases, that improve functions, add new functions, or significantly improve
performance by changes in system design or coding.
1.8 ERROR -- shall mean any error, problem, or defect resulting from
(1) an incorrect functioning of Code, or (2) an incorrect or incomplete
statement of diagram in Documentation, if such an error, problem, or defect
renders the Code inoperable, causes the Code to fail to meet the specifications
thereof, causes the Documentation to be inaccurate or incomplete in any material
respect, causes incorrect results, or causes incorrect functions to occur when
any such materials are used.
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1.9 XXXXXX-SPECIFIC SOFTWARE -- shall mean all elements or portions of
software included within a Product which were specifically developed by CSI for
Xxxxxx under this Agreement.
1.10 MAINTENANCE MODIFICATIONS -- shall mean any modifications or
revisions, other than Enhancements, to Code or Documentation that correct
Errors, support new releases of the operating systems with which the Code is
designed to operate, support new input/output (I/O) devices, or provide other
incidental updates and corrections.
1.11 PRODUCT -- shall mean the software program(s), including all
Deliverables, Enhancements, Documentation and Code developed by CSI under this
Agreement for Xxxxxx.
1.12 WORK STATEMENT -- shall mean a written instrument that meets the
following requirements:
1. Includes substantially the following statement: "This is a
Work Statement under the Multi-Year Strategic Services
Agreement dated January 20, 1999."
2. Is executed by both parties by their authorized
representatives
3. Contains the following five mandatory items:
a. Description and/or specifications of the services to
be performed and the Deliverables to be delivered to
Xxxxxx under the various phases of the work
(typically: Needs Analysis, Design and Development);
b. The name and address of a Project Manager for each
of Xxxxxx and CSI;
c. The anticipated fees;
d. The time schedule for performance and for delivery
of the Deliverables during each phase of work; and
e. Completion and acceptance criteria for the
Deliverables under each phase of work.
In addition, when applicable, the Work Statement may include:
1. Provisions for written and/or oral progress reports by the
CSI;
2. Detailed functional and technical specifications and
standards for all services and Deliverables, including
quality standards;
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3. Documentation standards;
4. Lists of any special equipment to be procured by CSI or
provided by Xxxxxx for use in performance of the work;
5. Test plans and scripts; and
6. Such other terms and conditions as may be mutually
agreeable between parties.
SECTION 2
CSI SERVICES
2.1 SERVICES. During the term of this Agreement, CSI agrees to provide
the following services as requested by Xxxxxx: software design and development,
software consulting, information technology industry strategic consulting,
quality assurance planning, management, software testing, and project planning
and management services. These services shall be consistent with CSI's existing
skills and expertise including any new or additional skills and expertise that
CSI elects to provide at CSI's sole discretion.
2.2 EXCLUSIVITY. During the term of this Agreement and for six months
after the expiration of the four year term of this Agreement, provided that this
Agreement has not been terminated prior to the expiration of the four year term
for any reason other than the uncured breach hereof by CSI, CSI agrees that it
will not provide customized information technology development services for the
direct competitors of Xxxxxx as listed or described on the attached Exhibit A.
Notwithstanding the foregoing, nothing within this Agreement shall in any way
limit or restrict CSI's right or ability to continue to provide services and
products for any former or current client of CSI listed on the attached Exhibit
B. In addition, if a then current CSI customer is acquired (whether by sale of
stock, assets, merger or otherwise) by a Xxxxxx direct competitor, CSI shall be
permitted to continue to provide services for such customer under the terms of,
and for the then remaining term of, the then existing agreement or then existing
work statement with said customer (but for no longer period) and in such event
CSI hereby expressly agrees not to disclose any Xxxxxx proprietary information
to such customer.
SECTION 3
CONTRACT ADMINISTRATION
3.1 PROJECT MANAGER. Upon execution of this Agreement, each party shall
notify the other party of the name, business address, and telephone number of
its Project Manager. The Project Managers of each party shall be responsible for
arranging all meetings, visits, and consultations
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between the parties and for technical and performance matters. The Project
Managers shall also be responsible for receiving all notices under this
Agreement and for all administrative matters such as invoices, payments, and
amendments.
3.2 ISSUANCE OF WORK STATEMENTS. The initial Work Statement(s) agreed
to by the parties are set forth as attachments to this Agreement. Additional
Work Statements, regardless of whether they relate to the same subject matter as
the initial Work Statement(s), shall become effective upon execution by
authorized representatives of both parties. Work Statements may be issued on a
time and materials or a fixed bid basis, as agreed to by the parties on a case
by case basis.
SECTION 4
CHANGES
Changes in any Work Statement or in any of the Specifications or
Deliverables under any Work Statement shall become effective only when a written
change request is executed by authorized representatives of both parties. All
other change requests with respect to this Agreement, any Work Statement, or any
Specifications or Deliverables must be requested and/or accepted by an
authorized officers of CSI and Xxxxxx.
SECTION 5
NOTICE OF DELAY
CSI agrees to notify Xxxxxx promptly of any factor, occurrence, or
event coming to its attention that may affect CSI's ability to meet the
requirements of any Work Statement issued under this Agreement, or that is
likely to occasion any material delay in delivery of Deliverables, whether or
not the delay would be excused under the provisions of Section 14.1 hereof. Such
notice shall be given in the event of any loss or reassignment of key employees,
threat of strike, or major equipment failure.
SECTION 6
COMPENSATION
6.1 TIME AND MATERIALS. Unless otherwise provided within a Work
Statement, Xxxxxx shall pay CSI on the basis of time and materials. Payment
under this method shall be determined according to the hourly rates set for
CSI's employees by skill level and listed in the then current Statement of
Strategic Rates a true, complete, correct and current copy of which has been
delivered separately to Xxxxxx. CSI may change its Statement of Strategic Rates
for each Contract Year with such increases not to exceed: (a) the corresponding
annual percentage increases of the 75th Percentile in the Total Earning category
for Senior Software Developer positions as reported in the
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annual Xxxxxxxxx Software Industry Pay Library (1998 as base year), or (b) the
Strategic Rates charged by CSI to any other customers for similar services at
comparable volume levels.
6.2 MINIMUM FEES.
6.2.1 In light of the commitments made by CSI hereunder
including CSI's obligation to have resources available to serve
Xxxxxx'x information technology needs, Xxxxxx agrees to incur and pay
certain minimum fee obligations to CSI during the term of this
Agreement (the "Annual Minimum"). Specifically, prior to the completion
of the second Contract Year Xxxxxx shall have requested and incurred
liability to CSI for services with a minimum aggregate value of
$3,500,000 (excluding expense reimbursements), with a least $1,000,000
of such services requested and incurred during the first Contract Year.
The Annual Minimum amount for the third and fourth Contract Years shall
each be $1,750,000.
6.2.2 Fees incurred by Xxxxxx under the Software License and
Development Agreement dated July 5, 1998, shall be applied against the
Annual Minimum amount for the first Contract Year hereunder to cover
Xxxxxx'x Annual Minimum payment obligation for the first Contract Year.
In addition, if CSI obtains a new client(s) during a Contract Year due
to the introduction by and the active assistance of Xxxxxx, the fees
(not expense reimbursements) incurred by such new client(s) ("New
Client Fees") during the Contract Year shall be applied on a
dollar-for-dollar basis to cover Xxxxxx'x Annual Minimum payment
obligation for the Contract Year.
6.2.3 If the sum of New Client Fees and the fees for which
Xxxxxx incurs liability in a given Contract Year for CSI services in
excess of the Annual Minimum for such Contract Year, such excess may be
divided by the number of Contract Year(s) remaining with such pro-rata
amount available for use by Xxxxxx to cover Xxxxxx'x Annual Minimum
payment obligation for each of the remaining Contract Year(s).
6.2.4 To compensate CSI for the loss (or perceived loss) in
company value due to Xxxxxx'x failure to reach its Annual Minimum
payment obligation, within thirty (30) days after the completion of a
Contract Year in which Xxxxxx does not meet its Annual Minimum
obligation, Xxxxxx shall pay to CSI an amount equal to such deficiency
as an additional capital contribution for the shares of CSI common
stock acquired by Xxxxxx pursuant to the Option Agreement dated
September 9, 1998, without the receipt of any additional CSI common
shares.
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SECTION 7
INVOICING
CSI shall submit invoices to Xxxxxx for payment for work on a monthly
basis. All invoices shall specifically refer to the Work Statement to which they
relate. The invoice shall indicate the names, skill levels, and hours of the
employees performing the work. Each invoice shall separately set forth travel
expenses, if any, authorized by Xxxxxx for reimbursement. Supporting
documentation (e.g., receipts for air travel, hotels, and rental cars) called
for by Xxxxxx'x standard reimbursement policies shall accompany any such
invoice. In addition, after the conclusion of each Contract Year CSI shall
submit a statement to Xxxxxx for payment of the additional capital contribution
amount, if any, which shall be equal to the difference between: (x) the Annual
Minimum; and (y) the aggregate amount of fees incurred by Xxxxxx for services
CSI rendered during the prior Contract Year plus all New Client Fees incurred
during the prior Contract Year. All Invoices shall be net 30 days and shall be
addressed to Xxxxxx'x Project Manager.
SECTION 8
EXPENSES
Except as expressly agreed otherwise by Xxxxxx in a Work Statement: (i)
Xxxxxx shall reimburse CSI for any expenses associated with CSI's procurement of
any additional hardware requested by Xxxxxx and approved by Xxxxxx in writing
and reasonable travel related expenses in accordance with CSI's then existing
travel policies; and (ii) CSI shall bear other expenses arising from its
performance of its obligations under this Agreement and each Work Statement
issued hereunder, including (without limitation) expenses for facilities, work
spaces, utilities and management.
SECTION 9
DELIVERY AND ACCEPTANCE
CSI shall deliver all Deliverables, upon completion, to Xxxxxx'x
Project Manager for testing and acceptance. CSI shall memorialize such delivery
in a Delivery Confirmation that sets forth the nature and condition of the
Deliverables, the medium of delivery, and the date of their delivery. Xxxxxx'x
Project Manager shall countersign such Delivery Confirmation so as to indicate
its receipt of the contents described therein, and the Delivery Confirmation
shall thereupon be transmitted to the parties' Project Managers. Unless a
different procedure for testing and acceptance is set forth in a Work Statement,
Xxxxxx'x Project Manager shall commence acceptance testing following its receipt
of the Deliverables to determine whether the Deliverable conforms to the
specification for such Deliverable. Upon completion of such testing, Xxxxxx
shall issue to CSI's Project Manager notice of acceptance or rejection of the
Deliverables. A Deliverable will be deemed accepted by Xxxxxx if CSI does not
receive Xxxxxx'x written acceptance or a Statement of Errors within fifteen
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(15) business days after the date of delivery of the Deliverable. In the event
of rejection, Xxxxxx shall give its reasons for rejection to CSI's Project
Manager in reasonable detail. CSI shall use all reasonable effort on the same
time and materials payment basis to correct any deficiencies or nonconformities
and resubmit the rejected items as promptly as possible; provided, however, that
CSI's fee for additional time to correct a deficiency or nonconformity shall not
exceed two percent (2%) of the total effort hours expended by CSI to develop and
test the Deliverable at issue.
SECTION 10
OWNERSHIP AND RIGHTS
10.1 CSI-OWNED SOFTWARE. CSI hereby grants to Xxxxxx a perpetual,
royalty-free license to use, modify, reproduce and distribute the CSI-Owned
Software only as a component of the Product or a Derivative Work. However, in no
event shall Xxxxxx be entitled to distribute or otherwise disclose the source
code versions of the CSI-Owned Software. All CSI-Owned Software source code
shall be considered to be Confidential Information and protected as such as
provided under this Agreement.
10.2 XXXXXX-SPECIFIC SOFTWARE. CSI and Xxxxxx agree that upon full
payment of all fees to CSI hereunder, or payment of all fees incurred by Xxxxxx
prior to a breach by CSI of this Agreement, Xxxxxx will own the Xxxxxx-Specific
Software. Subject to such payment obligation by Xxxxxx, CSI hereby grants and
assigns to Xxxxxx, without reservation, all worldwide ownership rights, title
and interest in and to the Xxxxxx-Specific Software including, but not limited
to, patent rights, copy rights, trade secret rights, trademark rights and other
proprietary rights in the Xxxxxx-Specific Software. Xxxxxx and CSI recognize
that the Xxxxxx-Specific Software comprises a number of functional blocks of
code, each of the functional blocks of code performing a function different from
the function of the Xxxxxx-Specific Software. Xxxxxx hereby grants back to CSI a
perpetual, royalty-free-license to use, modify, reproduce and distribute
separate functional blocks of code of the Xxxxxx-Specific Software insofar as
the functional blocks of code used, modified, reproduced or distributed are used
only in connection with products that are not directly competitive with the
Product as reasonably determined by Xxxxxx.
10.3 CSI'S ASSISTANCE. During and subsequent to the term of this
Agreement, and entirely at Xxxxxx'x request and expense and without further
consideration, CSI will document the assignment to Xxxxxx of all rights, title,
and interest in and to the Xxxxxx-Specific Software and any Derivative Works
prepared by CSI and assist Xxxxxx and its nominees in every proper way to
secure, maintain, protect and defend for Xxxxxx'x own benefit all copyrights,
patents and other proprietary rights in any and all countries. As part of CSI's
obligation, CSI will execute, at the time of final acceptance of the
Xxxxxx-Specific Software, a document in a form satisfactory to the parties
transferring the copyright rights granted herein to Xxxxxx.
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SECTION 11
CONFIDENTIAL INFORMATION
Each party will protect the other's Confidential Information from
unauthorized dissemination and use with the same degree of care that each such
party uses to protect its own like information. Neither party will use the
other's Confidential Information for purposes other than those necessary to
directly further the purposes of this Agreement. Except as required by
applicable laws or regulations or by court order or by the rules of any national
securities exchange on which the securities of either Xxxxxx or CSI are quoted
or listed, neither party will disclose to third parties the other's Confidential
Information without the prior written consent of the other party.
SECTION 12
REPRESENTATIONS, WARRANTIES AND INDEMNITIES
CSI makes the following representations and warranties for the benefit
of Xxxxxx, as a present and ongoing affirmation of facts in existence at all
times when this Agreement or any Work Statement issued hereunder is in effect:
12.1 NO CONFLICT. Xxxxxx represents and warrants that it is under no
obligation or restriction, nor will it assume any such obligation or restriction
that does or would in any way interfere or conflict with, or that does or would
present a conflict of interest concerning, the work to be performed by CSI under
this Agreement and each Work Statement issued hereunder.
12.2 OWNERSHIP RIGHTS. With respect to all subject matter, including
the CSI-Owned Software, ideas, inventions, creations, works, processes, designs
and methods, that CSI will disclose or use in its performance of the Services or
the granting of any rights under this Agreement, CSI warrants that it has the
right to make such disclosure, use and grant without liability to others. CSI
further warrants that: (i) the Product is or will be original with CSI; (ii) the
Product does not and will not infringe any U.S. patent rights, copyrights, mask
work rights, trade secret rights or other proprietary rights of others; (iii)
CSI will be the sole and exclusive owner of the Product and any Derivative Works
prepared by CSI pursuant to this Agreement and the rights granted to Xxxxxx in
this Agreement; (iv) CSI has not previously granted and will not grant any
rights in the Product or its Derivative Works to any third party that are
inconsistent with the rights granted to Xxxxxx herein; (v) each of CSI's
employees, consultants, contractors, partners or agents who has been or will be
involved in the development of the Product or its Derivative Works will have
signed an agreement with CSI conveying all proprietary rights in the Product to
CSI and agreeing to maintain in confidence all trade secrets embodied in the
Product and its Derivative Works; (vi) CSI has full power to enter into this
Agreement, to carry out its obligations under this Agreement and to grant the
rights granted to Xxxxxx; and (vii) to CSI's knowledge the product provided
under this agreement does not infringe or violate any United States or foreign
patent, copyright, trademark, trade secret or other proprietary right of a third
party.
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12.3 CONFORMITY, PERFORMANCE, AND COMPLIANCE. CSI represents and
warrants (1) that all Deliverables shall be prepared in a workmanlike manner and
with professional diligence and skill; (2) that all Deliverables will function
on the machines and with operating systems for which they are designed for a
period of one hundred eighty (180) days after acceptance by Xxxxxx; (3) that all
Deliverables will conform to the specifications and functions set forth in the
Work Statements relating thereto for a period of one hundred eighty (180) days
after acceptance by Xxxxxx; and (4) that CSI will perform all work called for by
each Work Statement issued hereunder in compliance with applicable law.
12.4 YEAR 2000 WARRANTY. CSI warrants that all Products provided
pursuant to this Agreement include, at no additional cost to Xxxxxx, both design
and performance so that Xxxxxx shall not experience the Product(s) abnormally
ending and/or invalid and/or incorrect results from the Product(s) in the
operation of said Product(s) prior to, during and after the Year 2000, and that
the Product(s) shall be otherwise "Year 2000 Compliant". "Year 2000 Compliant"
means the Product(s) is capable of recording and maintaining all dates in a
format which includes a 4-digit year representing century and year and which
will allow a date value of at least 2050. Year 2000 Compliant also means that
the Product(s) shall be designed to include, but not be limited to, date data
century recognition, mutually agreed upon calculations that accommodate same
century and multi-century formulas and date values, and date data values, and
data interface values that reflect the century. As Xxxxxx'x exclusive remedy for
a breach of this Year 2000 Warranty, CSI shall promptly modify, repair or
replace the Product(s) at no additional charge so as to provide Xxxxxx with
Product(s) which conform to the Warranty; or, if CSI is unsuccessful after
utilizing its best efforts within a reasonable time, refund all fees paid by
Xxxxxx pursuant to this Agreement upon return of said defective Product(s) to
Vendor.
12.5 CSI'S INFRINGEMENT INDEMNITY AND DUTY TO CORRECT.
12.5.1 Infringement Indemnity. CSI will, at its expense and at
Xxxxxx'x request defend any claim or action brought against Xxxxxx, and
Xxxxxx'x subsidiaries, affiliates, directors, officers, employees,
agents and independent contractors, to the extent it is based on a
claim that a Product provided under this Agreement infringes or
violates any United States patent, copyright, trademark, trade secret
or other proprietary right of a third party, and CSI will indemnify and
hold Xxxxxx harmless from and against any costs, damages and fees
reasonably incurred by Xxxxxx, including but not limited to fees of
attorneys and other professionals, that are attributable to such claim
or action; provided, however, that:
(i) Xxxxxx gives CSI reasonably prompt notice in writing of
any such claim or action and permits CSI, through counsel of
its choice, to answer the charge of infringement and defend
such claim or action;
(ii) Xxxxxx provides CSI information, assistance and
authority, at CSI's expense, to enable CSI to defend such
claim or action; and
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(iii) CSI will not be responsible for any settlement made by
Xxxxxx without CSI's written permission. CSI may not settle
any claim or action on Xxxxxx'x behalf without Xxxxxx'x
written permission and in the event Xxxxxx and CSI agree to
settle a claim or action, CSI agrees not to disclose the
settlement nor to permit the party claiming infringement to
disclose the settlement without first obtaining Xxxxxx'x
written permission.
12.4.2 Duty to Correct. If a Product becomes or is likely to
become the subject of a claim or action covered by Section 12.5.1, CSI
will, at CSI's option and expense: (i) procure for Xxxxxx the past
right to make, use and sell and the future right to continue to make,
use and sell the Product; (ii) replace or modify the Product to make
such non-infringing, provided that the same function is performed by
the replacement or modified Product to Xxxxxx'x reasonable
satisfaction; or (iii) if the past and future rights to continue to
make, use and sell cannot be procured or the Product cannot be replaced
or modified at reasonable expense, reimburse Xxxxxx for the total
amount paid under this Agreement for such Product.
12.5.3 Exceptions. CSI shall have no liability under this
Section 12.5 for any claim or action where: (i) infringement is
attributable to CSI's incorporation of Xxxxxx-supplied Specifications,
software, information, devices, parts or designs into the Product; and
(ii) such claim or action would have been avoided but for the
combination, operation, or use of the Product with such item(s)
supplied by Xxxxxx.
12.6 XXXXXX'X INFRINGEMENT INDEMNITY AND DUTY TO CORRECT.
12.6.1 Infringement Indemnity. Xxxxxx will, at its expense and
at CSI's request defend any claim or action brought against CSI, and
CSI's affiliates, directors, officers, employees, agents and
independent contractors, to the extent it is based on a claim that the
Xxxxxx supplied specifications, software, information, devices, parts
or designs incorporated into a Product infringes or violates any United
States patent, copyright, trademark, trade secret or other proprietary
right of a third party, and Xxxxxx will indemnify and hold CSI harmless
from and against any costs, damages and fees reasonably incurred by
CSI, including but not limited to fees of attorneys and other
professionals, that are attributable to such claim or action; provided
however that:
(i) CSI gives Xxxxxx reasonably prompt notice in writing of
any such claim or action and permits Xxxxxx, through counsel
of its choice, to answer the charge of infringement and defend
such claim or action;
(ii) CSI provides Xxxxxx information, assistance and
authority, at Xxxxxx'x expense, to enable Xxxxxx to defend
such claim or action; and
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(iii) Xxxxxx will not be responsible for any settlement made
by CSI without Xxxxxx'x written permission. Xxxxxx may not
settle any claim or action on CSI's behalf without CSI's
written permission and in the event Xxxxxx and CSI agree to
settle a claim or action, Xxxxxx agrees not to disclose the
settlement nor to permit the party claiming infringement to
disclose the settlement without first obtaining CSI's written
permission.
12.6.2 Exceptions. Xxxxxx shall have no liability under this
Section 12.6 for any claim or action where: (i) infringement is
attributable to CSI-Owned Software, CSI-supplied Specifications,
information, devices, parts or designs into a Product; and (ii) such
claim or action would have been avoided but for the combination,
operation, or use of the Product with such item(s) supplied by CSI.
12.7 DISCLAIMERS AND LIMITATIONS. EXCEPT AS EXPRESSLY PROVIDED IN THIS
SECTION 12, CSI MAKES NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED,
REGARDING ANY PRODUCT OR SERVICE HEREUNDER AND CSI FURTHER DISCLAIMS ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.
SECTION 13
TERM AND TERMINATION
13.1 TERM OF AGREEMENT. This Agreement shall be effective upon the
date specified at the beginning hereof and shall remain in force for a period
of four (4) years, unless otherwise terminated as provided herein. However,
this Agreement shall continue to remain in effect with respect to any Work
Statements already issued hereunder at the time of such termination, until
such Work Statements are themselves terminated and performance thereunder is
completed.
13.2 TERMINATION OF WORK STATEMENTS. Each Work Statement will identify
points, if any, within each phase whereby Xxxxxx and/or CSI may terminate the
Work Statement. Such Work Statements shall also identify the consequences of
such termination. In no event, however, shall the termination of a Work
Statement (other than as a result of an uncured breach thereof by CSI) reduce
Xxxxxx'x Annual Minimum payment obligation hereunder; provided, however, that
payments made by Xxxxxx under a Work Statement prior to termination may be
applied against Xxxxxx'x Annual Minimum payment obligation.
13.3 TERMINATION FOR CAUSE. This Agreement shall terminate in the
event that either party defaults in the performance or observance of any of
the material terms, covenants or conditions to be performed or observed by it
under this Agreement and such default is not cured within thirty (30) days
after written notice thereof has been given by the other party. Xxxxxx may
terminate this
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Agreement for cause in the event that a competitor(s) of Xxxxxx identified on
Exhibit A owns, directly or indirectly: (i) if CSI shares are not publicly
traded, any of CSI's issued and outstanding capital stock; and (ii) if CSI
shares are publicly traded, five percent (5%) or more of CSI's issued and
outstanding capital stock. In addition, Xxxxxx may terminate this Agreement
for cause if for any calendar year during the term of this Agreement more than
thirty percent (30%) of CSI's annual gross revenues from operations are
obtained from the provision of services and/or sale of products unrelated to
the health care industry.
13.4 TERMINATION FOR CONVENIENCE. At any time after July 20, 2000,
Xxxxxx may terminate this Agreement for convenience by delivering written
notice of termination to CSI. Unless CSI agrees otherwise, termination of this
Agreement shall take effect no earlier than six (6) months after the date that
CSI receives the written notice from Xxxxxx. Xxxxxx'x Annual Minimum payment
obligation shall be pro-rated through the effective date of the termination.
13.5 SURVIVAL. Except as may be provided within a Work Statement, in
the event of any termination of this Agreement, Sections 10, 11, and 14 hereof
shall survive and continue in effect and shall inure to the benefit of and be
binding upon the parties and their legal representatives, heirs, successors,
and assigns.
13.6 CALL RIGHTS. In addition to any other rights or remedies that CSI
may have under this Agreement, at law or in equity, upon and at any time or
times after CSI's termination of this Agreement under Section 13.3 above due
to Xxxxxx'x uncured default CSI shall have the right to call for repurchase
all or any portion of the shares of CSI stock owned by Xxxxxx at a per share
price equal to the per share price paid by Xxxxxx for such CSI stock.
13.7 PUT RIGHTS. In addition to any other rights or remedies that
Xxxxxx may have under this Agreement, at law or in equity, upon and at any
time or times after Xxxxxx'x termination of this Agreement under Section 13.3
above due to CSI's uncured default Xxxxxx shall have the right to put for
repurchase all or any portion of the shares of CSI stock owned by Xxxxxx at a
per share price equal to the per share price paid by Xxxxxx for such CSI
stock. Notwithstanding any provision to the contrary hereunder, Xxxxxx'x
rights under this Section 13.7 shall automatically expire upon the date of any
public offering by CSI of its securities pursuant to an underwritten
registration.
SECTION 14
MISCELLANEOUS
14.1 FORCE MAJEURE. Either party shall be excused from delays in
performing or from its failure to perform hereunder to the extent that such
delays or failures result from causes beyond the reasonable control of such
party (excluding delays due to loss of employees, strikes or other work
stoppages); provided that, in order to be excused from delay or failure to
perform, such party must act diligently to remedy the cause of such delay or
failure. Upon an excused delay the parties shall
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equitably adjust Xxxxxx'x Annual Minimum payment obligation and the timetables
and fees under outstanding Work Statements.
14.2 NO AGENCY. CSI, in rendering performance under Work Statements
issued hereunder from time to time, is acting solely as an independent
contractor. Xxxxxx does not undertake by this Agreement or otherwise to
perform any obligation of CSI, whether by regulation or contract. In no way is
CSI to be construed as the agent or to be acting as the agent of Xxxxxx in any
respect, any other provisions of this Agreement or any Work Statements issued
hereunder notwithstanding.
14.3 MULTIPLE COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which taken together shall constitute one single
Agreement between the parties.
14.4 SECTION HEADINGS; EXHIBITS. The section and subsection headings
used herein are for reference and convenience only, and shall not enter into
the interpretation hereof. The exhibits referred to herein and attached
hereto, or to be attached hereto, including all Work Statements issued
hereunder from time to time, are incorporated herein to the same extent as if
set forth in full herein.
14.5 REQUIRED APPROVALS. Where agreement, approval, acceptance, or
consent by either party is required by any provision of this Agreement, such
action shall not be unreasonably delayed or withheld.
14.6 NO WAIVER. No delay or omission by either party hereto to
exercise any right or power occurring upon any noncompliance or default by the
other party with respect to any of the terms of this Agreement shall impair
any such right or power or be construed to be a waiver thereof. A waiver by
either of the parties hereto of any of the covenants, conditions, or
agreements to be performed by the other shall not be construed to be a waiver
of any succeeding breach thereof or of any covenant, condition, or agreement
herein contained. Unless stated otherwise, all remedies provided for in this
Agreement shall be cumulative and in addition to and not in lieu of any other
remedies available to either party at law, in equity, or otherwise.
14.7 AUTHORITY OF CSI. CSI has the sole right and obligation to
supervise, manage, contract, direct, procure, perform, or cause to be
performed all work to be carried out by CSI hereunder unless otherwise
provided herein.
14.8 GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Ohio.
Any and all disputes arising out of or in connection with the execution,
interpretation, performance, or non-performance of this Agreement or any
agreement or other instrument between, involving or affecting the parties
(including the validity, scope and enforceability of this arbitration clause),
shall be submitted to and resolved by arbitration. The arbitration shall be
conducted pursuant to the terms of the Federal Arbitration Act and the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be conducted by three arbitrators, who shall be appointed
pursuant to the rules of the American Arbitration Association. Either party
may notify the other
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party at any time of the existence of an arbitrable controversy by certified
mail and shall attempt in good faith to resolve their differences within
fifteen (15) days after the receipt of such notice. If the dispute cannot be
resolved within the fifteen day period, either party may file a written demand
for arbitration with the American Arbitration Association. The determination
of the arbitrators shall be final and binding on the parties. The place of
arbitration shall be Cincinnati, Ohio. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction.
14.9 EMPLOYEES. During the term of this Agreement and for a period of
two years thereafter, Xxxxxx shall not: (i) hire or engage any current or
former employees or independent contractors of CSI; nor (ii) knowingly
solicit, entice, or persuade any employees or independent contractors of CSI
to terminate their employment or engagement with CSI for any reason.
Similarly, during the term of this Agreement and for a period of two years
thereafter, CSI shall not (i) hire or engage any current or former employees
or independent contractors of Xxxxxx; nor (ii) knowingly solicit, entice, or
persuade any employees or independent contractors of Xxxxxx to terminate their
employment with Xxxxxx for any reason. Notwithstanding the foregoing, if
Xxxxxx terminates this Agreement under Section 13.3 above due to an uncured
default by CSI and Xxxxxx did not cause or contribute to such default by CSI
nor was Xxxxxx in default under any provision of the Agreement as of the date
of termination of the Agreement, then Xxxxxx may make employment offers to and
hire those CSI employees who were working on Xxxxxx projects as of the date of
the Agreement's termination, or who worked on Xxxxxx projects in the past.
14.10. NOTICES. Under this Agreement if one party is required to give
notice to the other, such notice shall be deemed given if mailed by U.S. mail,
first class, postage prepaid, and addressed as follows (or as subsequently
noticed to the other party):
If to CSI:
Component Software International, Inc.
0000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxxx, Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, CEO
with a copy (which shall not constitute notice) to:
Xxxxxxx, Head & Xxxxxxx
0000 Xxxxx Xxxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
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If to Xxxxxx:
Xxxxxx International Inc.
000 Xxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, CFO
with a copy (which shall not constitute notice) to:
Xxxxxx International Inc.
000 Xxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L.
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
14.11. NO ASSIGNMENT. Neither party may, without the prior written
consent of the other party, assign or transfer this Agreement or any
obligation incurred hereunder, except by merger, reorganization,
consolidation, or sale of all or substantially all of such party's assets and
except that Xxxxxx may assign this Agreement to a wholly owned (directly or
indirectly) subsidiary of Xxxxxx upon at least seven (7) business days' prior
written notice to CSI. Any attempt to do so in contravention of this Section
shall be void and of no force and effect.
14.12 ENTIRE AGREEMENT. This Agreement and the Schedules and Exhibits
annexed hereto, together with the Work Statements issued from time to time
hereunder, constitutes the entire agreement between the parties.
14.13 COUNTERPARTS; EXECUTION. This Agreement may be executed in as
many counterparts as may be required, and each such counterpart hereof shall
be deemed to be an original instrument, but all such counterparts together
shall constitute but a single agreement. This Agreement shall be deemed to
have been executed at the time when and location at which the last signature
of any of the parties is affixed hereto or to any counterpart hereof.
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IN WITNESS THEREOF, Xxxxxx and CSI have caused this Agreement to be
signed and delivered by their duly authorized officers, all as of the date
first hereinabove written.
COMPONENT SOFTWARE
INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Title: President and CEO
----------------------
XXXXXX INTERNATIONAL INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Vice President and CFO
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