EXHIBIT 10.2
HTRG CONSULTING AGREEMENT
SOFTWARE DEVELOPMENT AGREEMENT
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THIS AGREEMENT ("Agreement") is hereby entered into between HTRG Consulting,
Inc., with offices at 0000 Xxxxxxxxxxx Xxxxxx, Xxxxxx Xxxxxx, XX 00000-0000
("Contractor") and Xxxxxxxxxxx.xxx, with offices at 00000 Xxxxx Xxxx Xx,
Xxxxxxxxxx, XX 00000 ("Customer") on the following terms and conditions:
1. General Undertaking. The Contractor shall perform the following services
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at the prices set forth in Section 3(a)("Contractor Services") according to this
Agreement:
(a) Software Design. The Contractor is being hired to design, develop
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and implement computer software to automate and improve certain business
operations of the Customer in accordance with the attached Statement of Work.
Contractor shall analyze the business operations specified in the Statement of
Work and prepare written recommendations and a functional design of software to
automate and improve those operations (the "Functional Design"). The Functional
Design shall be reviewed by Customer and then refined by Contractor into a
detailed "Technical Design" for the "Software" (including, e.g., input and
output formats, screen layouts, program descriptions, data and file layouts,
flowcharts, security features, telecommunications requirements, error conditions
and messages, documentation requirements, development schedule and any third
party software or equipment).
(b) Software Development. Upon Customer's approval of the Technical
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Design, the Contractor shall proceed with actual development, testing and
implementation of the Software in accordance with the Technical Design and
Section 2 ("Project Management").
(c) Training Services. In consideration of Customer's payment of the
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Training Fee described in the Schedule of Prices plus reimbursement for travel
costs authorized under Section 3(c)("Out-of-Pocket Costs & Taxes"), the
Contractor shall provide Customer the number of Training Days at the locations
identified in the Statement of Work for the training of Customer's staff in the
use and operation of the Software.
(d) User Documentation. The Contractor shall, no later than sixty (60)
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calendar days after final delivery and Customer's acceptance of the Software,
provide Customer one (1) copy of "Documentation" describing in reasonable detail
understandable by an operator of general proficiency the use and operation of
the Software. The Documentation shall be supplied in magnetic and printed form
and may be reproduced by Customer for purposes authorized herein.
(e) Software Maintenance. Any support or maintenance of the Software
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beyond any warranty coverage described in Section 8 ("Warranties") shall be
provided under a separate agreement negotiated in good faith by the parties.
2. Project Management.
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(a) Project Coordinators. Each party shall appoint a project coordinator
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having day-to-day responsibility for overseeing and coordinating the activities
contemplated herein, including scheduling and presiding over meetings,
design/review sessions, coordinating its staff and conducting testing and
acceptance of deliverables. The initial project coordinator for Customer shall
be Xxxxx Xxxxxxxxxx; the project coordinator for Contractor shall be H. Xxxxxx
Xxxxx. Each party acknowledges the importance of maintaining a stable work force
and shall make reasonable effort to retain their respective project coordinators
for the duration of this project.
(b) Certain Customer Responsibilities. The Customer shall make every
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reasonable effort to maintain a stable scope of work and shall provide timely
feedback and approval of all work product delivered hereunder. In addition, the
Customer shall ensure that (i) any associated software and equipment are
installed and operated according to applicable manufacturer specifications and
recommendations; (ii) all upgrades, new releases and engineering changes to
associated software and equipment specified or recommended by Contractor or the
applicable manufacturer have been procured by Customer and properly installed;
(iii) a continuous, uninterrupted and suitable power supply and temperature,
humidity and other environmental conditions recommended by the manufacturer or
Contractor have been implemented and maintained; (iv) no other associated
software or equipment having an adverse impact on the performance of the
Software have been introduced; (v) no changes to any source code, configuration
parameters or other user-adjustable features for the Software have been made
without the express consent of Contractor, and (vi) Customer periodically makes
and stores in a safe place archival copies of the Software, other software or
valuable data affected by the operation or malfunction of the Software.
(c) Testing & Acceptance.
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(i) Test Procedure. Contractor shall install and provide Customer
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reasonable on-site assistance in testing the Software. Following delivery and
installation, Customer shall have ten (10) business days (the "Test Period") to
conduct reasonable testing of the Software to determine whether it performs
substantially in accordance with the Technical Design. Customer shall provide
reasonable access to its premises, proper environmental and site conditions, any
required test data in proper format and the cooperation of its staff and any
other contractors to assist Contractor during installation and testing of the
Software. On-site testing shall be conducted by reference to a written "Test
Plan" approved by Contractor. Customer shall provide Contractor contemporaneous
"sign-offs" as each function on the Test Plan is demonstrated.
(ii) Correction of Defects. If no material variances from the Test
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Plan are identified in writing during the Test Period, the Software shall be
deemed accepted by Customer. If material defects are identified during the Test
Period, Customer shall provide a written "punchlist" identifying the particular
specification at issue and providing detailed reasons why the tested feature
does not meet the specification. Contractor shall not be required to correct
minor imperfections or defects that do not materially impair the operation of
the Software. Contractor shall have a reasonable opportunity to correct, replace
or provide functional "workarounds" for all punchlist items or to commence
corrective action reasonably acceptable to Customer and proceed with reasonable
diligence to completion.
(iii) Acceptance of Software. The Software shall be deemed accepted if
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Customer does not notify Contractor of any material defects during the Test
Period or, if Customer makes beneficial use of the Software, it shall
conclusively be deemed accepted and any outstanding punchlist items shall be
covered to the extent provided under Section 8 ("Warranties"). Customer shall
not reject Software containing nonconformities without first attempting in good
faith to make beneficial use of the Software in its diminished capacity in
exchange for an equitable adjustment to the Agreement.
(d) Project Schedule. The parties shall prepare a Project Schedule for
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the work contemplated herein. Unless otherwise agreed in writing, any Project
Schedule prepared by the parties shall be considered a reasonably accurate
estimate, subject to revision.
3. Price & Payment.
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(a) Contractor Services. Contractor shall accept 100,000 shares of the
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companies common stock as compensation for any software design and development
services referenced in Section 1 ("General Undertaking"). Any excess cost of
labor for completing the Statement of Work shall be borne by Contractor. It is
further agreed by the parties that the company will register 50,000 shares of
such common stock in the next registration statement to be filed by the company
with the Securities and Exchange Commission.
(b) Certain Other Charges. Any services performed outside the scope of the
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work described in Section 1 ("General Undertaking") shall be subject to a
separate work order and, unless otherwise agreed, shall be compensated at
Contractor's then current reasonable rates.
(c) Out-of-Pocket Costs & Taxes. Except as otherwise set forth in this
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Agreement, prices quoted for services do not include and Customer shall
reimburse Contractor for its cost of travel (air & cab fare, lodging, auto
rental or local mileage, standard per diem, etc.) and out-of-pocket costs for
photocopying, overnight courier, long-distance telephone and the like. Unless
separately stated on invoices paid hereunder, Customer shall indemnify and hold
Contractor harmless from all sales, use, gross receipts, value-added, GST,
personal property or other tax or levy (including interest and penalties)
imposed on the services or technology delivered hereunder, other than taxes
based on the net income of Contractor.
4. Proprietary Rights.
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(a) Custom Work Product Defined. "Custom Work Product" means any
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Functional Design, Technical Design and any software (including programs,
modules, code, algorithms, flowcharts, data diagrams, documentation and the
like) created by Contractor after the effective date of this Agreement on behalf
of Customer and in furtherance of the Statement of Work. Custom Work Product
does not include any preexisting software owned by Contractor or by any third
party and incorporated or "embedded" into the Custom Work Product ("Embedded
Software").
(b) Ownership, Licensing of Technology.
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(i) Ownership. Contractor shall own all right, title and interest to
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the Custom Work Product. Customer expressly acknowledges and agrees that none of
the Custom Work Product shall be deemed to constitute "work made for hire" under
the Federal copyright laws (17 U.S.C. Sec. 101) and, alternatively, Customer
hereby irrevocably assigns to Contractor all ownership rights and irrevocably
waives all other rights (including moral rights) it might have in Custom Work
Product.
(ii) Single Machine License. Customer is granted with respect to
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each copy of the Software (including Custom Work Product and any Embedded
Software) for which the applicable license fee has been paid, a paid-up,
perpetual, nonexclusive license to install, store, load, execute and display
(collectively, "Use") the Software solely in support of its internal business
operations on the single CPU on which it was originally installed. The Software
may be relocated to another single CPU of Customer, provided no more than one
(1) copy per license is installed or Used on more than one CPU at any one time.
This license may not be transferred by Customer without Contractor's prior
written consent (which shall not unreasonably be withheld) and may not be
sublicensed by Customer without Contractor's prior written consent.
(c) Source Code License. The technology licensed under Subsection (b) is
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being provided in source code form strictly for internal Use by Customer and
subject to the restrictions set forth in Section 5 ("Confidential Information").
Unless otherwise agreed, the source code shall contain comments and annotations
reasonably needed by a programmer of general proficiency to perform maintenance
and compile the source code into an object code version, and shall be
accompanied by a description of relevant hardware and operating environments,
functional copies of all test programs and information about utilities and
compilers.
5. Confidential Information.
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(a) Acknowledgment of Confidentiality. Each party hereby acknowledges
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that it may be exposed to confidential and proprietary information belonging to
or supplied by the other party or relating to its affairs including, without
limitation, Custom Work Product, any Embedded Software and other technical
information (including any Functional Design, Technical Design, drawings,
analysis, research, processes, computer programs, methods, ideas, "know how" and
the like), business information (sales and marketing research, materials, plans,
accounting and financial information, personnel records and the like) and other
information designated as confidential expressly or by the circumstances in
which it is provided ("Confidential Information"). Confidential Information does
not include (i) information already known or independently developed by the
recipient outside the scope of this project by personnel not having access to
Confidential Information; (ii) information in the public domain through no
wrongful act of the recipient, or (iii) information received by the recipient
from a third party who was free to disclose it.
(b) Covenant Not to Disclose. With respect to the other party's
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Confidential Information, and except as expressly authorized herein, the
recipient hereby agrees that during the Term hereof and at all times thereafter
it shall not use, commercialize or disclose such Confidential Information to any
person or entity, except to its own employees having a "need to know" (and who
are themselves bound by similar nondisclosure restrictions), and to such other
recipients as the other party may approve in writing; provided, that all such
recipients shall have first executed a confidentiality agreement in a form
acceptable to the owner of such information. Neither party nor any recipient
may: (i) alter or remove from any Software or associated Documentation owned or
provided by the other party any proprietary, copyright, trademark or trade
secret legend, or (ii) attempt to decompile, disassemble or reverse engineer the
other party's Confidential Information (and any information derived in violation
of such covenant shall automatically be deemed Confidential Information owned
exclusively by the owner of the original source materials). Each party shall use
at least the same degree of care in safeguarding the other party's Confidential
Information as it uses in safeguarding its own confidential information, but in
no event shall less than due diligence and care be exercised.
6. Nonsolicitation. During the Term hereof and for a period of one (1) year
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thereafter, Customer agrees not to hire, solicit, nor attempt to solicit, the
services of any employee or subcontractor of Contractor without the prior
written consent of Contractor. Violation of this provision shall entitle
Contractor to assert liquidated damages against the Customer equal to one
hundred (100) percent of the solicited person's annual compensation.
7. Injunctive Relief. The parties acknowledge that violation by one party of
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the provisions of Section 4 ("Proprietary Rights"), Section 5 ("Confidential
Information") or Section 6 ("Nonsolicitation") would cause irreparable harm to
the other party not adequately compensable by monetary damages. In addition to
other relief, it is agreed that temporary and permanent injunctive relief should
be available without necessity of posting bond to prevent any actual or
threatened violation of such provisions.
8. Warranties.
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(a) Noninfringement Warranty. Contractor represents and warrants to the
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best of its knowledge and belief that the Software, when properly used as
contemplated herein, will not infringe or misappropriate any United States
copyright, trademark, patent, or the trade secrets of any third persons. Upon
being notified of a claim contrary to such warranty, Contractor shall (i) defend
through litigation or obtain through negotiation the right of Customer to
continue using the Software; (ii) rework the Software so as to make it
noninfringing while preserving the original functionality, or (iii) replace the
Software with functionally equivalent software. If none of the foregoing
alternatives provide an adequate remedy, Customer may terminate all or any part
of this Agreement and recover amounts paid hereunder with respect to the
infringing Deliverable.
(b) Limited Warranty. Contractor represents and warrants for a period
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of one (1) year from the date of delivery ("Warranty Period") that it will make
its best effort to ensure the Software operates substantially in accordance with
the Technical Design; provided, that (i) the Software is installed, implemented
and operated in accordance with all instructions supplied by Contractor; (ii)
Customer notifies Contractor of any such defect within ten (10) calendar days
after the appearance thereof; (iii) Customer has properly installed all updates
made available with respect to the Software, and updates recommended by
Contractor with respect to any third party software products (including
operating system software) that materially affect the performance of the
Software; (iv) Customer has properly maintained all associated equipment,
software and environmental conditions in accordance with applicable
specifications and industry standards; (v) Customer has not introduced other
equipment or software creating an adverse impact on the Software; (vi) Customer
has paid all amounts due hereunder and is not in default of any provision of
this Agreement; (vii) any Functional Design or Technical Design provided by
Customer is an accurate and complete rendering of the relevant features,
applicable interfaces and associated operating environment, and (viii) Customer
has made no changes (nor permitted any changes to be made other than by or with
the express approval of Contractor) to the Software source code. ANY
UNAUTHORIZED CHANGES TO SOFTWARE SOURCE CODE WILL VOID THE WARRANTY PROVIDED
UNDER THIS SECTION.
(c) Year 2000 Standards. Contractor represents and warrants that
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during the Warranty Period and for so long as Customer continuously subscribes
to any available Software support services it will make its best effort to
ensure the Software records, stores, recognizes, interprets, processes and
presents both 20th and 21st century dates using four digit years substantially
according to formats and assumptions specified in the Technical Design. This
warranty is subject to the same conditions specified in subsection (b) above.
This warranty does not apply insofar as the Software derives date functions from
other programs (e.g., operating system run-time libraries, databases or
firmware) nor does it require Contractor to workaround or accommodate other
programs that are not compliant with Year 2000 Standards.
(d) No Undocumented Features. Contractor represents and warrants that
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(i) none of the Software will contain any timer, counter, lock or similar device
(other than security features specifically approved by Customer in the
specifications) that inhibits or in any way limits its ability to operate, and
(ii) it will scan the Software with commercially available anti-virus software
and shall use due diligence to remove viruses capable of being detected with
such software. All corrections shall be as fully warranted as the original work
through expiration of the original Warranty Period.
(e) Warranty Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION
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("WARRANTIES") THE CONTRACTOR HEREBY DISCLAIMS WITH RESPECT TO ALL SERVICES,
SOFTWARE, CUSTOM WORK PRODUCT OR OTHER DELIVERABLES PROVIDED HEREUNDER, ALL
EXPRESS AND IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, TITLE, ACCURACY, INTEGRATION OR FITNESS FOR A PARTICULAR
PURPOSE. STATEMENTS REGARDING YEAR 2000 ARE "YEAR 2000 READINESS DISCLOSURES"
ENTITLED TO CERTAIN PROTECTIONS UNDER FEDERAL LAW.
9. Limitation of Remedies & Liabilities. The parties acknowledge that the
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following provisions have been negotiated by them and reflect a fair allocation
of risk:
(a) Remedies. Except for certain injunctive relief authorized under
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Section 7 ("Injunctive Relief"), Customer's sole and exclusive remedies for
Contractor's default hereunder shall be (i) to obtain the repair, replacement or
correction of the defective Software, services or deliverable to the extent
warranted under Section 8 ("Warranties") or, if Contractor reasonably determines
that such remedy is not economically or technically feasible, (ii) to obtain an
equitable partial or full refund of amounts paid with respect to the defective
Software, services or deliverable.
(b) Liabilities. CONTRACTOR SHALL NOT BE LIABLE FOR ANY AMOUNT EXCEEDING
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THE TOTAL PORTION OF THE CONTRACT PRICE ACTUALLY PAID BY CUSTOMER. IN NO EVENT
SHALL CONTRACTOR BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
SAVINGS, LOST PROFIT OR BUSINESS INTERRUPTION EVEN IF CONTRACTOR IS NOTIFIED IN
ADVANCE OF SUCH POSSIBILITY) ARISING OUT OF OR PERTAINING TO THE SUBJECT MATTER
OF THIS AGREEMENT.
10. Notices. Notices sent to either party shall be effective when delivered
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in person or transmitted by telecopier ("fax") machine, one (1) day after being
sent by overnight courier, or two (2) days after being sent by first class mail
postage prepaid. A facsimile of this Agreement and notices generated in good
form by a fax machine (as well as a photocopy thereof) shall be treated as
"original" documents admissible into evidence unless a document's authenticity
is genuinely placed in question.
11. Term, Termination. The term of this Agreement (the "Term") shall
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commence upon the date last below written and shall continue in full force and
effect until work described in Section 1 ("General Undertaking") is completed
according to its terms. Either party may, in addition to other relief, terminate
this Agreement if the other party breaches any material provision hereof and
fails within ten (10) days after receipt of notice of default to correct such
default or to commence corrective action reasonably acceptable to the aggrieved
party and proceed with due diligence to completion. Either party shall be in
default hereof if it becomes insolvent, makes an assignment for the benefit of
its creditors, a receiver is appointed or a petition in Bankruptcy is filed with
respect to the party and is not dismissed within thirty (30) days. Termination
shall have no effect on the parties' rights or obligations under Section 5
("Confidential Information"), Section 6 ("Nonsolicitation") or Section 7
("Injunctive Relief").
12. Disputes, Choice of Law. Except for certain emergency judicial relief
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authorized under Section 7 ("Injunctive Relief") which may be brought at any
time, the parties agree that all disputes between them shall first be subject to
the procedures in Section 11 ("Term, Termination") and then shall be submitted
for informal resolution to their respective chief operating officers. Any
remaining dispute shall be submitted to a panel of three (3) arbitrators, with
each party choosing one (1) panel member and the third member chosen by the
first two (2) panel members. The proceedings shall be conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
The award of the arbitrators shall include a written explanation of their
decision, shall be limited to remedies otherwise available in court and shall be
binding upon the parties and enforceable in any court of competent jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE UNITED STATES AND MARYLAND, AND ANY ACTION SHALL BE
INITIATED AND MAINTAINED IN A FORUM OF COMPETENT JURISDICTION IN SUCH DESIGNATED
STATE.
13. Independent Contractor Status. Each party and its people are independent
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contractors in relation to the other party with respect to all matters arising
under this Agreement. Nothing herein shall be deemed to establish a partnership,
joint venture, association or employment relationship between the parties. Each
party shall remain responsible, and shall indemnify and hold harmless the other
party, for the withholding and payment of all Federal, state and local personal
income, wage, earnings, occupation, social security, worker's compensation,
unemployment, sickness and disability insurance taxes, payroll levies or
employee benefit requirements (under ERISA, state law or otherwise) now existing
or hereafter enacted and attributable to themselves and their respective people.
14. Security, No Conflicts. Each party agrees to inform the other of any
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information made available to the other party that is classified or restricted
data, agrees to comply with the security requirements imposed by any state or
local government, or by the United States Government, and shall return all such
material upon request. Each party warrants that its participation in this
Agreement does not conflict with any contractual or other obligation of the
party or create any conflict of interest prohibited by the U.S. Government or
any other government and shall promptly notify the other party if any such
conflict arises during the Term.
15. Insurance, Indemnity. Each party shall maintain adequate insurance
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protection covering its respective activities hereunder, including coverage for
statutory worker's compensation, comprehensive general liability for bodily
injury and tangible property damage, as well as adequate coverage for vehicles.
Each party shall indemnify and hold the other harmless from liability for bodily
injury, death and tangible property damage resulting from the acts or omissions
of its officers, agents, employees or representatives acting within the scope of
their work.
16. Compliance with Export Regulations. Customer has or shall obtain in a
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timely manner all necessary or appropriate licenses, permits or other
governmental authorizations or approvals; shall indemnify and hold Contractor
harmless from, and bear all expense of, complying with all foreign or domestic
laws, regulations or requirements pertaining to the importation, exportation, or
Use of the technology to be developed or provided herein. Customer shall not
directly or indirectly export or re-export (including by transmission) any
regulated technology to any country to which such activity is restricted by U.S.
regulation or statute, without the prior written consent, if required, of the
Bureau of Export Administration of the U.S. Department of Commerce. This
provision and the assurances made herein shall survive termination of this
Agreement.
17. Miscellaneous. This document and the accompanying Statement of Work
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constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all other communications, whether written or oral.
This Agreement may be modified or amended only by a writing signed by the party
against whom enforcement is sought. Except as specifically permitted herein,
neither this Agreement nor any rights or obligations hereunder may be
transferred or assigned by Customer without Contractor's prior written consent
and any attempt to the contrary shall be void. Contractor reserves all rights
not specifically granted herein. Neither party shall be liable for delays caused
by events beyond its reasonable control. Any provision hereof found by a
tribunal of competent jurisdiction to be illegal or unenforceable shall be
automatically conformed to the minimum requirements of law and all other
provisions shall remain in full force and effect. Waiver of any provision hereof
in one instance shall not preclude enforcement thereof on future occasions.
Headings are for reference purposes only and have no substantive effect.
IN WITNESS WHEREOF, for adequate consideration and intending to be legally
bound, the parties hereto have caused this Agreement to be executed by their
duly authorized representatives.
HTRG Consulting, LLC. Xxxxxxxxxxx.xxx
By: By:
Name: Name:
Title: Title:
Date: Date:
