SIERRA SYSTEMS CONSULTANTS, INC.
CONSULTING AND DEVELOPMENT CONTRACT
AGREEMENT # __________________
This Consulting and Development Contract (the "Agreement") is made as of
September 15, 1999 between WordCruncher Internet Technologies, Inc.
("WordCruncher") and Sierra Systems Consultants, Inc. ("Sierra").
To the extent that prior to the date of this Agreement Sierra has begun,
performed or completed any Services, Deliverables or other work or performance
called for by this Agreement, all such Services, Deliverables, work and
performance shall be governed by this Agreement.
1. Services. Sierra agrees to perform for WordCruncher the services listed
in Attachment A ("Services") and to develop, test, debug and deliver to
WordCruncher the computer programs and other deliverables identified in
Attachment A ("Deliverables"). WordCruncher agrees that Sierra will
have ready access to WordCruncher's staff and resources as necessary to
perform the Services. Where such access is not consistently provided,
WordCruncher agrees to accept any resulting delays in the Time Schedule
included in Attachment A.
A. Development of the Deliverables. Sierra agrees to develop
Deliverables which conform to the Specifications. The
"Specifications" are the features, compatibility,
functionality, performance, descriptions, requirements and
other specifications set forth in Attachment A and in the
Sierra document, "Spyhop Architecture and Design," dated
October 4, 1999, the Sierra document, "Project Charter,"
dated October 1, 1999, the Digital Boardwalk document,
"Project Plan," dated November 11, 1999, the WordCruncher
document, "Spyhop Product Requirements Document," version
0.8, and the WordCruncher document, "Spyhop Search Engine
Design Document," version 1.6. The Specifications may be
changed by WordCruncher, provided that if such changes cause
a net increase in development cost or time to Sierra, then
Sierra shall be entitled to a reasonable increase in
compensation under Section 2 below. If the increase in
compensation is unacceptable to WordCruncher, then
WordCruncher may withdraw the changes to the Specifications
and the compensation shall not be increased. If and when
WordCruncher presents Specification changes to Sierra,
Sierra will promptly consult with WordCruncher on the
increase in compensation, if any, caused by the changes. Any
changes by WordCruncher to the Specifications will be
reduced to writing and added to this Agreement.
B. Development and Delivery Schedule. The development and
delivery of the Deliverables and the performance of the
Services shall proceed in accordance with the Time Schedule
in Attachment A.
C. Progress Reports. Sierra shall provide written progress
reports to WordCruncher when requested by WordCruncher
describing the status and progress of the Services and
Deliverables.
D. Delivery, Testing and Correction. When Sierra has completed
a working version of the Deliverables, the Deliverables will
be delivered to WordCruncher for review and testing.
Nonconformities with the Specifications, programming errors
and other problems with the Deliverables shall be promptly
corrected by Sierra and then the corrected Deliverables
shall re-delivered to WordCruncher. Review, testing and
correction will be repeated until all discovered
nonconformities with the Specifications and all programming
errors and other problems have been corrected to
WordCruncher's reasonable satisfaction. When review and
testing by WordCruncher show that all corrections have been
made and that the Deliverables are satisfactory to
WordCruncher, WordCruncher shall accept the Deliverables.
WordCruncher shall not unreasonably withhold acceptance.
E. Source Code and Development Environment. Sierra shall
deliver to WordCruncher any and all source code, object
code, executable code, pseudo code, designs, programming
documentation, flow charts, logic diagrams, specifications,
and other works of authorship that may be written or created
as part of or in connection with the Services or the
Deliverables or their development, testing or correction and
all of the foregoing are deemed part of the "Deliverables"
for the purposes of this Agreement. Sierra shall include
comments in the source code. The source code comments and
organization and the programming documentation given to
WordCruncher shall be in conformance with professional
standards of computer programming and shall be sufficient to
enable programmers employed by WordCruncher to maintain and
enhance the Deliverables. Sierra shall also deliver to
WordCruncher the "Development Environment" for the
Deliverables. The "Development Environment" means the
software tools, utilities, development automation software,
and other code materials and items used by Sierra's
programmers to design, develop, compile, build, test,
maintain, and enhance the Deliverables. Anything needed to
compile or build the Deliverables (other than commercially
available operating systems, compilers, tool kits and
products) shall be included in and with the Development
Environment. If a component of the Development Environment
is commercially available to the public, Sierra need only
identify the component in a written document included with
the Development Environment. The Development Environment
does not include any Deliverables (i.e., it is in addition
to the Deliverables).
2. Payment. Subject to the other provisions of this Agreement,
WordCruncher agrees to pay Sierra for Services and Deliverables in
accordance with the payment schedule in Attachment B. WordCruncher
shall reimburse Sierra for all reasonable travel expenses outside the
Los Angeles area incurred by Sierra in the performance of Services, at
Sierra's net cost. Travel must be approved in advance by WordCruncher.
Invoices will be issued in accordance with the payment schedule of
Attachment B, and will include travel expenses incurred. Travel
expenses that are covered by this contract are shown in Attachment C.
Payment is due within 30 days of invoice date. Sales taxes, if any, are
additional.
3. Confidential Information. Sierra shall not disclose to any other
organization or individual any confidential information that Sierra may
obtain from WordCruncher or any of the other contractors, vendors, and
third party content providers working with WordCruncher. Confidential
information means information, technology, plans, documents, research,
development, financial information, information about the Spyhop Site,
trade secrets or business affairs, but does not include information
which is generally known to the public or to individuals or
organizations of ordinary skill in computer design and programming.
A. Deliverables and source Code. Sierra shall not disclose or
transfer to any third party any Deliverables or any source
code or documentation for the Deliverables.
B. Restrictions on Use. Except as necessary in the performance
of the Services or the development, testing or debugging of
the Deliverables, Sierra shall not use any of said
confidential information.
C. Return of Materials. Any and all designs, templates,
documents, code, items and other materials provided by
WordCruncher or any of the other contractors, vendors, and
third party content providers working with WordCruncher in
connection with this Agreement and all copies and
embodiments thereof shall be returned or delivered by Sierra
to WordCruncher upon WordCruncher's request, and Sierra
shall retain no copy thereof. Upon WordCruncher's request,
Sierra shall certify in writing its compliance with this
Section 3.
D. Rights of Other Persons. Sierra shall not disclose to
WordCruncher or use in the Services or the development of
any Deliverables any code, work of authorship, technology or
intellectual property which is proprietary to any other
person, company or entity, except as permitted by
WordCruncher (e.g., the designs, templates, content and
contributions from WordCruncher or its contractors such as
Digital Boardwalk, Inc. and Xxxxxxx Xxxxxxxx).
E. Injunctive Relief. Sierra agrees that a breach by Sierra of
this Agreement will cause irreparable injury to WordCruncher
not adequately compensable in monetary damages alone or
through other legal remedies. Therefore, in the event of a
breach, WordCruncher shall be entitled to preliminary and
permanent injunctive relief and other equitable relief in
addition to damages and other legal remedies.
4. Staff. Sierra's staff is not and shall not be deemed to be employees of
WordCruncher. Sierra shall take appropriate measures to insure that its
staff who perform Services are competent to do so and that they do not
breach or act inconsistent with this Agreement. Sierra agrees that for
a period of twelve months following the termination of the Services and
any other work for WordCruncher under this Agreement, Sierra will not
solicit or offer employment to WordCruncher's employees engaged in any
efforts under this Agreement without WordCruncher's prior written
approval. WordCruncher will have final approval on all Sierra staff
assigned to the Services.
A. Development by Employees. The development of the
Deliverables shall be done only by employees of Sierra
within the scope of their employment (with the exception of
designs, templates, content and contributions from
WordCruncher or its contractors such as Digital Boardwalk,
Inc. and Xxxxxxx Xxxxxxxx). If Sierra must engage the
services of any independent contractor, sierra shall first
obtain WordCruncher's written approval and a written
contract satisfactory to WordCruncher with the independent
contractor. The contract must include an assignment to
WordCruncher all of the independent contractor's right,
interest and title in and to the Deliverables (including
copyrights, trade secrets and other intellectual property),
reasonable non-disclosure and non-use provisions binding on
the independent contractor, and such other provisions as
WordCruncher reasonably requests.
5. Use and Ownership of Work Product. WordCruncher shall have ownership
of the Deliverables and other work product of Sierra under this
Agreement. Sierra hereby assigns to WordCruncher the copyrights and
other intellectual property and rights in and to the Deliverables and
other work product. In the event that the Deliverables contain any
Development Objects (as defined below), then such Development Objects
are licensed on a nonexclusive, unlimited, irrevocable, worldwide
basis to WordCruncher. Such license includes the right to grant
sublicenses and includes the right to use, copy, publish, distribute,
display, modify, enhance, create derivative works and commercialize.
"Development Objects" shall mean any code, objects, algorithms or
subroutines which have been used repeatedly by programmers in the
development of other computer programs and which are intended to be
used repeatedly in the development of future computer programs.
Furthermore, the Development Environment and all of Sierra's
intellectual property and rights in and to the Development Environment
are licensed on a non-exclusive, unlimited, irrevocable, world-wide
basis to WordCruncher for use in connection with the Deliverables and
their maintenance and enhancement, including the right to grant
sublicenses.
A. Registration of Copyrights. WordCruncher may register the
copyright(s) to the Deliverables with the U.S. Copyright
Office. Sierra shall cooperate in all respects with the
reasonable requests of WordCruncher necessary to facilitate
such registration.
B. Recordation. WordCruncher may record this Agreement or, at
WordCruncher's election, a notice and/or description of this
Agreement or any assignment or license herein, with the U.S.
Copyright Office, U.S. Patent and Trademark Office, and/or
any other government agencies, entities or offices. Sierra
shall provide any cooperation reasonably requested by
WordCruncher to facilitate such recordation.
C. Enforcement and Defense. Sierra shall cooperate with all
reasonable requests by WordCruncher in connection with the
enforcement or defense of any copyrights or other
intellectual property assigned by Sierra to WordCruncher, or
any litigation, arbitration, mediation or settlement
proceedings or meetings relating to the Deliverables or such
copyrights or other intellectual property.
D. Moral Rights. For purposes of this Agreement, "Moral Rights"
shall mean any rights of paternity or integrity, any right
to claim authorship of the Deliverables, to object to any
distortion, mutilation or other modification of, or other
derogatory action in relation to, the Deliverables, whether
or not such would be prejudicial to Sierra's or the author's
honor or reputation, and any similar right, existing under
judicial or statutory law of any country in the world, or
under any treaty, regardless whether or not such right is
denominated or generally referred to as a "moral" right.
Sierra hereby irrevocably transfers and assigns to
WordCruncher any and all Moral Rights that sierra or any of
its employees may have in or to the Deliverables. Sierra, on
behalf of itself and its employees, also hereby forever
waives and agrees never to assert any and all Moral Rights
it or its employees may have in or to the Deliverables, at
any time. Notwithstanding anything herein to the contrary,
this Section D is subject to the following: (1) This Section
D applies only if and to the extent that it is valid and
enforceable under, and not in conflict with, applicable law
and applicable international copyright treaties. (2) This
Section D shall require no assignment or transfer that is in
conflict with applicable law or any applicable international
copyright treaties.
E. Further Assurances. Sierra shall execute and deliver to
WordCruncher such documents, assignments and further
assurances as are reasonably requested by WordCruncher to
better evidence or document any assignment, license or
rights under this Agreement or to further or support any of
the purposes or provisions of this Agreement.
6. WordCruncher and Sierra representatives. Xx. Xxxxxx Xxxx (or a
replacement designated by WordCruncher) will represent WordCruncher
during the performance of this Agreement with respect to the Services
and Deliverables or any other matter under this Agreement and has
authority to execute written modifications or additions to this
Agreement on behalf of WordCruncher. Xx. Xxxx XxXxxx (or a replacement
designated by Sierra) will represent Sierra during the performance of
this Agreement with respect to the Services and Deliverables or any
other matter under this Agreement and has authority to execute written
modifications or additions to this Agreement on behalf of Sierra.
7. Limited Warranty. Sierra warrants that it shall perform the Services
and this Agreement in accordance with the standards of care and
diligence normally practiced by recognized software companies and
professionals performing similar services. Except for the warranties
expressly stated in this Agreement, Sierra makes no other warranties,
whether written, oral, statutory or implied, including without
limitation the implied warranties of fitness for a particular purpose
and merchantability. In no event except for a breach of an express
warranty in this Agreement, shall either Party be liable to the other
Party for special or consequential damages, whether or not the
possibility of such damages has been disclosed in advance or could
have been reasonably foreseen.
A. Right to Enter Into Agreement. Each Party warrants that it
has the right to enter into this Agreement and that this
Agreement is not in conflict with any other agreement or
obligation of said Party.
B. Deliverables. Sierra warrants that the Deliverables will
conform to their Specifications and that any
nonconformities, defects or errors will be promptly remedied
by Sierra.
C. Year 2000 Compliance. Sierra represents and warrants that
the Deliverables delivered by Sierra to WordCruncher will be
properly designed and coded to be used prior to, during, and
after the calendar year 2000 A.D., and that the Deliverables
will operate during each such time period without error
relating to date data, specifically including, without
limitation, any error relating to, or the product of, date
data which represents or references different centuries or
more than one century. Without limiting the generality of
the foregoing, Sierra further represents and warrants the
following for the Deliverables:
(i) The Deliverables will not abnormally end or provide
invalid or incorrect results as a result of date
data, specifically including date data which
represents or references different centuries or more
than one century.
(ii) The Deliverables will be designed and coded to ensure
year 2000 compatibility, including, but not limited
to, date data century recognition, calculations which
accommodate same century and multi-century formulas
and date values, and date data interface values that
reflect the century.
(iii) All date-related interfaces and data fields will
include an indication of century.
(iv) All date processing by the Deliverables will include
a four digit year format and will recognize and
correctly process dates for leap years.
(v) The Deliverables will require that all date data
(whether received from users, systems, applications
or other sources) include an indication of century i
n each instance.
(vi) All date output and results, in any form, will
include an indication of century in each instance.
The term "date data" shall mean any data, output or input
which includes an indication of or reference to date.
D. No Self-Help Code or Unauthorized Code. Sierra warrants to
WordCruncher that no copy of the Deliverables provided by
Sierra under this Agreement will contain or be accompanied
by any Self-Help Code or Unauthorized Code (as defined
below).
"Self-Help Code" means any back door, time bomb, drop dead
device, or other routine, code, algorithm or hardware
component designed or used: (i) to disable, erase, alter or
harm the Deliverables or any computer system, program,
database, data, hardware or communications software,
automatically with the passage of time, or under the control
of, or through some affirmative action by, a person other
than WordCruncher, or (ii) to access any computer system,
program, database, data, hardware or communications system of
WordCruncher. "Self-Help Code" does not include any code in
the Deliverables or any accompanying hardware component
designed and used to permit Sierra to obtain access to th e
Deliverables on WordCruncher's computer system (e.g., remote
access via modem) solely for purposes of providing
maintenance or technical support to WordCruncher, provided
that such code or hardware component is first disclosed to
WordCruncher and approved by WordCruncher in writing.
"Unauthorized Code" means any virus, Trojan horse, worm, or
other routine, code, algorithm or hardware component designed
or used to disable, erase, alter, or otherwise harm any
computer system, program, database, data, hardware or
communications system, or to consume, use, allocate or disrupt
any computer resources.
E. Infringement. Sierra warrants that the Deliverables will be of
original development and design and will not infringe,
misappropriate or violate any copyright, patent, trade secret,
intellectual property, privacy or other right of a third
party.
F. Indemnification. Sierra shall indemnify WordCruncher and its
officers, directors, shareholders, affiliates, contractors,
licensees, customers, employees and representatives against,
and hold them harmless from, any claim by a third party that
the Deliverables (or their reproduction, sale, distribution or
use) constitutes an infringement of said third party's
copyright, patent, trade secret, intellectual property,
privacy or other right, and all litigation, arbitration,
judgments, awards, settlements, damages, costs, expenses,
attorneys' fees, losses, liabilities, penalties and fines
resulting from or relating to such claim. Sierra shall have no
obligation under the preceding sentence for infringement based
upon any modification or addition by WordCruncher to the
Deliverables. Sierra shall indemnify and hold harmless
WordCruncher and WordCruncher's officers, directors,
shareholders, affiliates, employees, contractors, licensees,
customers, and representatives from and against any and all
claims, litigation, arbitration, judgments, awards,
settlements, damages, costs, expenses, attorneys' fees,
losses, liabilities, penalties and fines resulting from or
relating to Sierra's (or its employees') fault, negligence,
willful misconduct, fraud or strict liability.
8. Additional Work. If WordCruncher requests additional services,
Sections 3 through 11 of this Agreement will apply to the extent
reasonable, unless a new written Agreement is entered into by
WordCruncher and Sierra. Such additional services will be covered on
additional Attachments or statement of work.
A. Available at WordCruncher's Request. For at least two years
following acceptance of the Deliverables by WordCruncher,
Sierra shall be available to provide WordCruncher and its
designees with such additional technical support,
consultation, training, maintenance and enhancement as may
be requested from time to time by WordCruncher. Such
technical support, consultation, training, maintenance and
enhancement shall be at Sierra's then-current standard fees
and charges, which shall not be unreasonable. However, prior
to and during the first year of said two year period there
shall be no fee or other charge for any correction by Sierra
of any nonconformity of the Deliverables with the
Specifications or any programming errors, unless the
correction is for a version of the Deliverables where the
source code has been modified by WordCruncher or its other
contractors. WordCruncher is not obligated to request any
additional technical support, consultation, training,
maintenance or enhancement. This Section 8 does not require
WordCruncher to pay any additional fees or charges for the
Services or Deliverables as they are included in the
$500,000 fixed fee of Appendix B.
9. Delays. Examples of WordCruncher actions which may affect scheduled
success include change requests, changes in Specifications or
standards, or unavailability of test data, test computer, information
staff or technical support needed by Sierra. In these and similar
cases, the term for completion of the Services will be extended by a
mutually agreed upon period not to exceed a period equal to the time of
delay. Sierra will use its best efforts to overcome delays and complete
the Services and Deliverables on schedule.
10. Arbitration. Any claim or controversy between WordCruncher and
Sierra arising out of or relating to this Agreement shall be resolved
in the following manner:
A. Notice. Prior to filing any claim in a court of competent
jurisdiction or initiating any arbitration proceeding, a Party
shall give the other Party at least 10 days' advance written
notice of its intention to do so. Each Party agrees to make
its representative reasonably available to meet (either in
person or by teleconference) with the other Party to resolve
the claim controversy.
B. Meeting. If the other Party desires to have such a meeting,
neither Party may file a claim or begin arbitration prior to
the occurrence of such meeting. The Parties shall meet in good
faith at the offices of the other Party or the other Party's
attorney.
C. Arbitration. In the event the other Party does not agree
within the 10 days to such meeting or if after such meeting
the Parties are still unable to resolve their differences, any
claim or controversy shall be finally decided by arbitration
in accordance with the Commercial Arbitration Rules of the
American Arbitration Association by a single arbitrator
appointed in accordance with such rules. Such arbitration
shall be conducted in Los Angeles if brought by WordCruncher
or in Salt Lake County if brought by Sierra. The award
rendered by the arbitrator shall be final, and judgment may be
entered upon it at any court having jurisdiction.
11. Miscellaneous.
-------------
A. Entire Agreement. This Agreement (including its Attachments)
contains the entire Agreement between WordCruncher and Sierra
with respect to the matters covered herein. Each Party
acknowledges that, in entering into this Agreement, it is not
relying on any other representations of the other Party other
than the representations contained or referenced herein.
B. Force Majeure. Neither WordCruncher nor Sierra will be
responsible for any failure by it to perform its obligations
under this Agreement, if failure is due to causes beyond the
non-performing party's reasonable control, including, without
limitation, acts of God, war and labor disputes. The
non-performing Party shall give prompt written notice to the
other Party of the cause and its effects on performance and
shall diligently exercise all best efforts to overcome the
cause and resume performance. The other Party may cancel this
Agreement if the performance is not resumed within five days.
C. Assignment. This Agreement may not be assigned by Sierra
without the prior written consent of WordCruncher.
WordCruncher may assign or transfer this Agreement to any
person or entity who acquires substantially all of
WordCruncher's intellectual property in or to the Spyhop web
site. Except for this prohibition on assignment, the Agreement
shall be binding upon the heirs, successors and assigns of
WordCruncher and Sierra.
D. Severability. If any provision of this Agreement is found to
be invalid, illegal or unenforceable by a court of competent
jurisdiction, the remaining provisions shall not be affected
and will continue in full force and effect.
E. Notices.
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(i) Notices to WordCruncher should be (ii) Notices to Sierra should be sent
to: to:
President Xxxx XxXxxx
WordCruncher Technologies Inc. Sierra Systems Consultants Inc.
000 Xxxx 00000 Xxxxx, Xxxxx X 00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxxx 00000 Xxxxxx, XX 00000
or to such substitute address as the Party to receive such
notice designates by written notice to other Party.
F. Costs and Expenses. Each Party shall be responsible for the
costs and expenses incurred by it and its employees and
representatives, except as otherwise stated herein.
G. Relationship. Neither Party is the partner, joint venturer,
agent or representative of the other Party. Neither Party has
the authority to make any representations or warranties or
incur any obligations or liabilities on behalf of the other
Party. Neither Party shall make any representation to a third
party inconsistent with this Section G.
H. Construction. This Agreement represents the wording selected
by the Parties to define their agreement and no rule of strict
construction shall apply against any Party. Whenever the
context reasonably permits, the singular shall include the
plural, the plural shall include the singular, and the whole
shall include any part thereof.
I. Waiver. Any waiver of, or promise not to enforce, any right
under this Agreement shall not be enforceable unless evidenced
by a writing signed by the Party making said waiver or
promise.
J. Execution and Authority. This Agreement may be executed in any
number of duplicate counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument. The persons signing
below represent that they are duly authorized to execute this
Agreement for and on behalf of the Party for whom they are
signing.
The signatures below of the authorized representatives of WordCruncher and
Sierra indicate their acceptance of the terms and conditions of this Agreement.
WordCruncher Internet Technologies Sierra Systems Consultants, Inc.
Inc.
/s/ /s/
---------------------------------- --------------------------------
Xxxxxx Xxxxx, Vice President Xxxx XxXxxx, Vice President
ATTACHMENT A: SCOPE OF SERVICE
DATE: __Jan 6, 2000________
WORDCRUNCHER INITIALS: ______/s/____________
SIERRA INITIALS: ______/s/____________
AGREEMENT #: ___________________
Services:
Services will be provided to WordCruncher as proposed in the Sierra letter to
WordCruncher dated September 22, 1999, and in the Sierra document, "Spyhop
Architecture and Design," dated October 4, 1999, the Sierra document, "Project
Charter," dated October 1, 1999, the Digital Boardwalk document, "Project Plan,"
dated November 11, 1999, the WordCruncher document, "Spyhop Product Requirements
Document," version 0.8, and the WordCruncher document, "Spyhop Search Engine
Design Document," version 1.6. Services also include the development, delivery,
testing and debugging of the Deliverables. These services will be provided in
support of the development of the Spyhop web site.
Deliverables:
Deliverables will be provided to WordCruncher as proposed in the same documents
listed above under "Services." The deliverables include but are not limited to
HTML templates, data bases, scripts, integration modules, and any other Sierra
or Digital Boardwalk software components required to deliver a fully functioning
web site that conforms to the specifications set forth in the above referenced
documents. It is understood that certain other software licenses for products
required to build the Spyhop site (i.e., NAS, NES, Oracle, and Solaris) will be
acquired by WordCruncher separate from this contract.
Specifications:
The specifications for the deliverables are defined in the same documents listed
above under "Services."
Time Schedule:
The time schedule for this project is defined by the Digital Boardwalk document,
"Project Plan," dated November 4, 1999. As of November 30, 1999, it has been
agreed between the involved parties that the target release date is now February
15, 2000.
