EXHIBIT 14.07
XXXXXX BEAUMONT
SERVICES VENDOR AGREEMENT
INCORPORATING: NON-DISCLOSURE & CONFIDENTIALITY CLAUSES
This SERVICES VENDOR AGREEMENT, encompasses the NON-DISCLOSURE and
CONFIDENTIALITY clauses intended to be enacted via this AGREEMENT, and in
EXHIBITS "A"," indicating payments; buy-rates and schedules thereof, related to
all services, products and programs of the XXXXXX BEAUMONT project described in
Exhibit "A", and any, and all, associated, related and/or enhanced product
programs developed hereafter, hereinafter to be referred to in whole as the
"AGREEMENT". This Agreement is made effective this date: September 1, 2004 by
and between TRANSACTION MANAGEMENT, LLC a Texas Limited Liability Company whose
principal place of business is 0000 Xxxxxx Xx., Xxxx Xxxxx, Xxxxx, 00000, AND
SECURITY BANK a Texas Corporation whose principal place of business is 000 Xxxx
Xx., Xxxxx, Xxxxx, 0000, hereinafter collectively referred to as the "SERVICES
VENDOR", and XXXXXX BEAUMONT INC., a Florida corporation whose principal place
of business is 0000 Xxxxx Xxxx Xx. Xxxxx 000, Xxxxxxxx, Xxxxxxx, 00000,
hereinafter referred to as the "COMPANY", and all parties herein mutually agree
as follows:
1. DEFINITIONS
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(a) ACCESSIBLE shall mean being freely accessed for use at any time.
(b) CASH Currency shall mean U.S. government issued currency.
(c) DEBIT OR ATM NETWORK shall mean a Cirrus, Maestro, Star, Pulse,
MasterCard, Visa, Interlink network for conducting cash transactions
on.
(d) DEBIT OR ATM CARD shall mean a plastic or laminate card with a magnetic
strip for holding information embossed with identifying account numbers
to be used to conduct cash currency transaction that is PIN (Personal
Identification Number) based for access and use.
(e) STORED VALUE CARD shall mean a plastic or laminate card with a magnetic
strip for holding information embossed with identifying account numbers
to be used to conduct cash currency transaction that has a Visa,
MasterCard, American Express or Discover card hologram logo on the
front of the card which must be pre funded with cash prior to use.
(f) CASH LOAD NETWORK shall mean locations nationwide (50 states) where a
consumer may load cash onto an ATM Card, Debit Card or Stored Value
Card for a fee.
(g) LOAD FEE shall mean the money charged a consumer for loading cash onto
a Debit Card, ATM Card or Stored Value Card.
(h) CUSTOMER SERVICE shall mean people and resources available to consumer
to address questions as desired in Exhibit A.
(i) DOMESTIC shall mean within the 00 Xxxxxx Xxxxxx.
(j) PROGRAM shall mean any program defined in EXHIBIT "A" of this
Agreement.
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(k) WRITTEN APPROVAL shall mean documents submitted to parties in writing
requiring a signature, such approval not to be unreasonably withheld or
delayed.
(1) CARDHOLDER means an individual or entity which has established a
Cardholder Account with the Issuing Bank.
(m) CARDHOLDER ACCOUNT means an arrangement between a Cardholder and the
Issuing Bank, through which the Issuing Bank provides the Cardholder
with the right to use one or more ATM Cards, Debit Cards or Stored
Value Cards issued through the Issuing Bank under the Program.
(n) CARDHOLDER DATA means all personally identifiable information regarding
a Cardholder and transactions a Cardholder makes with an ATM Card,
Debit Card or Stored Value Card.
(o) GOVERNMENTAL REQUIREMENTS means collectively all statutes, codes,
ordinances, laws, regulations, rules, orders and decrees of all
governmental authorities (including without limitation federal, state
and local governments, governmental agencies and quasi-governmental
agencies) having jurisdiction over a party.
(p) INTELLECTUAL PROPERTY RIGHTS shall mean any and all (by whatever name
or term known or designated) tangible and intangible and now ]mown or
hereafter existing (a) rights associated with works of authorship
throughout the universe, including but not limited to copyrights, moral
rights, and mask-works, (b) trademark and trade name rights and similar
rights, (c) trade secret rights, (d) patents, designs, algorithms,
software programs or processes, and other industrial property rights,
(e) all other intellectual and industrial property rights (of every
kind and nature throughout the universe and however designated)
(including logos, "rental" rights and rights to remuneration), whether
arising by operation of law, contract, license, or otherwise, and (f)
all registrations, initial applications, renewals, extensions,
continuations, divisions or reissues hereof now or hereafter in force
(including any rights in any of the foregoing).
(q) ISSUING BANK means a member bank of one or more of the credit card
associations or Debit or ATM Networks which has agreed to sponsor the
Program.
(r) OPERATING RULES means, collectively, the regulations and procedures
issued by American Express, Discover, MasterCard, Visa, the Debit or
ATM Networks, NACHA, SWACHA and the Issuing Bank, as amended from time
to time.
The terms defined in Section I include the plural as well as the
singular. Unless otherwise expressly stated, the words "herein,"
"hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular section, subsection
or other subdivision. The words "include" and "including" shall not be
construed as terms of limitation. The word "or" shall mean "and/or"
unless the context requires otherwise. The words "day," "month," and
"year" mean, respectively, calendar day, calendar month and calendar
year. Other terms used in this Agreement are defined in the context in
which they are used and shall have the meanings there indicated.
2. DECLARATION OF INTENT
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(a) The COMPANY seeks to establish a working relationship with the SERVICES
VENDOR in all respects as determined herein, and hereafter, regarding
the opportunity as noted, and the SERVICES VENDOR seeks in turn
likewise to develop such a working relationship.
(b) The COMPANY seeks to acquire the services, of the SERVICES VENDOR,
and/or additionally, and/or alternatively, services, products and
programs of the SERVICES VENDOR'S third party vendors, via the Services
Vendor's contracts thereof secured for said purposes. Attached
hereunder via the EXHIBIT "A" are a description of the services
(collectively "Services"), schedules indicating payments and buy-rates
thereof.
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(c) MARKETING MATERIALS. Company shall be solely responsible for
developing, at its own expense, all of the marketing and advertising
materials to advertise, market and promote the Product; provided,
however, that Company shall not engage in any solicitation of the
product until the proposed materials have been reviewed by Company's
legal counsel and the Services Vendor has provided its Written Approval
of all such materials.
3. OBLIGATIONS COMPANY AND SERVICES VENDOR
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(a) During the term and subject to the terms and conditions contained
herein, Services Vendor agrees to provide Company the Services, as
described in Exhibit "A" and in such additional services schedules
which are executed and delivered by the parties from time to time
during the term of this Agreement (each, a "Services Schedule").
Detailed procedures and practices to be followed while performing the
Services shall be as set forth in a Services Schedule. The Services
Schedule shall further specify the term during which the Services shall
be provided by Services Vendor, the commencement date for the
performance of the Services, the fees payable for such Services,
specifications applicable to the Program, and other applicable terms.
(b) Company or Services Vendor may deem it necessary or appropriate from
time to time to add other services or increase, reduce, or change the
Services under one or more Programs (a "Service Change"). )Dither party
may make a proposal for a Service Change, whereupon the parties shall
mutually evaluate feasibility, manner and timing for implementation,
impact on pricing, impact on performance requirements and all other
relevant matters. A Service Change shall not be implemented unless and
until the Service Change is approved by both parties. If the Service
Change is approved by the parties, the Service Change shall be
implemented by Services Vendor as expeditiously as possible on a
mutually agreed upon schedule. An approved Service Change shall be set
forth in a written amendment to the applicable Services Schedule, which
amendment shall be signed by authorized representatives of the parties.
(c) Services Vendor shall maintain complete and accurate records of and
supporting documentation for all transactions, financial and
non-financial, that result from or are created in connection with
Services Vendor's performance of the Services and its other material
obligations under this Agreement and that are in sufficient detail to
enable the performance of its obligations hereunder to be substantiated
("Services Vendor Records"). With respect to the amounts chargeable to
and payments made by Company under this Agreement, Services Vendor
Records shall be kept in accordance with generally accepted accounting
principles applied on a consistent basis. Services Vendor shall retain
Services Vendor Records in accordance with this Agreement until the
later of (i) the minimum period of time period required to meet
statutory obligations, including, without limitations the Governmental
Requirements or Operating Rules, or, in the absence of a statutory
minimum, (ii) for a period of five (5) years after creation.
(d) Services Vendor shall provide to Company (and internal and external
auditors, inspectors, regulators and other representatives that Company
may designate from time to time) access at reasonable hours to Services
Vendor personnel and to Services Vendor Records and other pertinent
information, all to the extent relevant to the performance of Services
Vendor's financial and non-financial obligations under this Agreement
and to the extent permitted by applicable Governmental Requirements and
Banking Regulations. Such access shall be provided for the purpose of
performing audits and inspections to, without limitation, (i) verify
the accuracy and completeness of Services Vendor's invoices, (ii)
examine Services Vendor's performance of its other financial
obligations to Company under this Agreement, and (iii) enable Company
to meet applicable legal, regulatory and contractual requirements.
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4. CONFIDENTIAL INFORMATION.
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(a) DEFINITION. For purposes of this Section 4, the term "Confidential
Information" means all information concerning a party (the "Disclosing
Party") that is provided to, or otherwise obtained by, one of the other
parties (the "Receiving Party") that may not be accessible or known to
the general public, whether or not specifically designated as
"confidential" or "proprietary." Confidential Information shall
include, without limitation, all non-public nod proprietary information
pertaining to the past, present or potential business, operations,
financial information, affairs, properties, personnel, products,
suppliers, rights, and consumers of the Disclosing Party and any other
information not generally known that may be of value.
(b) EXCEPTIONS. Notwithstanding the above paragraph, Confidential
Information does not include information that is (i) or becomes
generally available to the public without violation of this Agreement
or any other obligation of confidentiality (including, but not limited
to, the posting of information on any Internet website intended for
access by a third party), (ii) already known by the Receiving Party and
not subject to an obligation of confidentiality, (iii) independently
developed by the Receiving Party without reference to the Confidential
Information, and/or (iv) disclosed without restriction to the Receiving
Party by a third party rightfully in possession of such Confidential
Information where the disclosure by the third party does not violate
any obligation of confidentiality. In addition, a party shall not be
considered to have breached its obligations under this Section 4 for
disclosing Confidential Information of the other party if in the
opinion of such party's counsel, such disclosure is required by legal
process or pursuant to any applicable statute, rule or regulation,
provided that, except with respect to securities laws disclosure
obligations, such party advises the other party prior to making such
disclosure in order that the other party may object to such disclosure,
take action to assure confidential handling of the Confidential
Information, or take such other appropriate action to protect the
Confidential Information.
(c) PROTECTION, USE AND DISCLOSURE. The Receiving Party shall cause its
employees, agents and every other person and entity that it permits to
have access to the Disclosing Party's Confidential Information to
protect the Disclosing Party's Confidential Information by using the
same degree of care, but no less than a reasonable degree of care, to
prevent the unauthorized use or disclosure of the Disclosing Party's
Confidential Information as the Receiving Party uses to protect its own
confidential information of like nature. Except as otherwise permitted
herein, without the prior, express, and written consent of the
Disclosing Party, the Receiving Party shall never disclose or use any
Confidential Information of the Disclosing Party in any manner other
than by disclosing such Confidential Information to employees, agents
or independent contractors of the Receiving Party who have a need to
know such Confidential Information to perform services contemplated by
this Agreement, provided that they have been informed of the
confidential nature of such information. Furthermore, the Receiving
Party shall promptly advise the Disclosing Party if the Receiving Party
learns of any unauthorized use or disclosure of any Confidential
Information of the
(d) COURT ORDER. The Receiving Party may disclose Confidential Information
pursuant to court order, subpoena or similar legal process. The
Receiving Party, however, to the extent not prohibited by law, must
give written notice of any such order to the Disclosing Party at least
fifteen (15) days prior to the date of compliance with it (unless the
Receiving Party has less than fifteen (15) days notice itself, in which
case the Receiving Party shall give the disclosing party as much notice
as is practicable under the circumstances). In all cases, the Receiving
party agrees to take such steps as the Disclosing Party may direct to
further protect Confidential Information from disclosure, provided,
however, that the Receiving Party shall not be required to incur any
additional expense to do so.
(e) OWNERSHIP. The Disclosing Party shall continue to own all of its
Confidential Information disclosed pursuant to this Agreement, and,
except as otherwise expressly provided, nothing in this Agreement shall
be deemed to grant the Receiving Party any right to license,
sublicense, or otherwise exploit such Confidential Information, except
pursuant to a written Agreement executed by both parties.
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(f) RETURN OF CONFIDENTIAL INFORMATION. The Receiving Party shall promptly
return to the Disclosing Party, at the Disclosing Party's sole cost and
expense, all Confidential Information of the Disclosing Party upon
written request by the Disclosing Party.
(g) RETAINED KNOWLEDGE. Nothing in this Agreement shall restrict any
employees or representatives of a party who retain solely in intangible
form after performing the obligations of such party under this
Agreement, general ideas, concepts, know-how, or techniques relating to
data processing or network management which either party, individually
or jointly, develops or discloses to such employee or representative
while such employee or representative is performing the obligations, or
exercising the rights, of a party under this Agreement, from using such
ideas, concepts, know-how, or techniques for the benefit of either
party, except to the extent that such use infringes upon any
Intellectual Property Right of a Party or its affiliates; provided,
however, that this Section shall not be deemed to limit either Party's
obligations under this Agreement with respect to the disclosure or use
of Confidential Information.
(h) INTELLECTUAL PROPERTY RIGHTS. Except as expressly specified in this
Agreement, nothing in this Agreement shall be deemed to grant to one
party, by implication, estoppels or otherwise, license rights,
ownership rights or any other Intellectual Property Rights in any
materials owned by or Confidential Information of the other party or
any affiliate of the other party.
(i) EQUITABLE REMEDIES. Each party acknowledges that, if it breaches (or
attempts or threatens to breach) its obligations under this Section 4,
the other party will be irreparably harmed. Accordingly, if a court of
competent jurisdiction should find that a party has breached (or
attempted or threatened to breach) any such obligations, such party
will not oppose the entry of an appropriate order compelling
performance by such party and restraining it from any further breaches
(or attempted or threatened breaches).
(j) CONFIDENTIALITY OF AGREEMENT. Both parties agree that the terms and
conditions of this Agreement shall be treated as confidential
information and that no reference to the terms and conditions of this
Agreement or to activities pertaining thereto can be made in any form
without the prior written consent of the other party; provided,
however, that the general existence of this Agreement shall not be
treated as confidential information and that either party may disclose
the terms and conditions of this Agreement: (a) as required by any
court or other governmental body; (b) as otherwise required by law
including a party's obligations under applicable securities laws; (c)
to legal counsel of the parties; (d) in confidence, to accountants,
banks, ratings agencies. proposed investors, and financing sources and
their devisors; (e) in confidence, in connection' with the enforcement
of this Agreement or rights under this Agreement; or (f) in confidence,
in connection with a merger or acquisition or proposed merger or
acquisition, or the like.
(k) SECURITY OF CARDHOLDER DATA. Company and Services Vendor each
acknowledge and agree that this Agreement constitutes an agreement for
Services Vendor to perform services for Company as contemplated in
Title V of the Xxxxx-Xxxxx-Xxxxxx Financial Modernization Act (the
"Act") and Regulation P issued under the Act ("Regulation P"), Without
limiting the generality of the terms of this Agreement, Services Vendor
agrees that it shall protect the privacy of Cardholder's non-public
personal information, as such terms are defined in the Act and in
Regulation P ("Consumer Information") to at least the same extent that
Client must maintain that confidentiality under the Act and Regulation
P. Without limiting the generality of the foregoing sentence, Services
Vendor shall not disclose any non-public personal information to any
third person except as required in the performance of Services under
this Agreement, and Services Vendor shall not use any non-public
personal information except to perform the Services described under
this Agreement. Services Vendor shall establish administrative,
technical and physical safeguards for Company's customer records and
information in Services Vendor's control or possession from time to
time. Such safeguards shall be designed for the purpose of: (a)
insuring the security of such records and information, (b) protecting
against any anticipated threats or hazards to the security or integrity
of such records and information; and (c) protecting against
unauthorized access to or use of such records and information that
would result in substantial harm or
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inconvenience to any Cardholder. Such safeguards shall be established in
accordance with Section 501 of the Act and the Interagency Guidelines
Establishing Standards for Safeguarding Customer Information adopted
pursuant to Section 501 of the Act. Company shall provide Services Vendor
with a copy of its privacy policy established in accordance with the Act
and Regulation P.
5. REPRESENTATIONS. WARRANTIES AND COVENANTS OF THE PARTIES.
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5.1 MUTUAL REPRESENTATIONS, WARRANTIES, AND COVENANTS. Each party represents,
warrants and covenants to the other and acknowledges that the other Party has
relied upon the completeness and accuracy of such representations, warranties
and covenants in entering into this Agreement:
(a) It has the corporate capacity to enter into this Agreement and to
perform each of its obligations hereunder.
(b) It has duly authorized, executed and delivered this Agreement and
this Agreement constitutes a legally valid and binding obligation of it
enforceable against it in accordance with its terms except as such enforcement
may be limited by applicable bankruptcy, insolvency and other laws of general
application affecting the enforcement of creditors' rights and subject to
general equitable principles.
(c) It is not under any obligation of a contractual or other nature to
any person or entity which is inconsistent or in conflict with this Agreement or
which would prevent, limit or impair in any way the performance of its
obligations hereunder.
5.2 SERVICES VENDOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. Services
Vendor further represents, warrants and covenants to Company the following:
(a) Financial Information. Services Vendor shall provide Company (i) as
soon as practicable after the end of cacti fiscal year of Services Vendor, and
in any event within ninety (90) days thereafter, a consolidated balance sheet of
Services Vendor, as at the end of such fiscal year, and audited consolidated
statements of income and cash flows of Services Vendor, for such year, all
prepared in accordance with generally accepted accounting principles
consistently applied and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail (the "Year-End
Financial Report'), (ii) quarterly, unaudited consolidated balance sheets and
related statements of income of Services Vendor.' Each Year-End Financial Report
shall be accompanied by report and unqualified opinion thereon by independent
public accountants of national standing selected by Services Vendor's board of
directors.
(b) Compliance with Governmental Requirements and Operating Rules.
Services Vendor shall comply with all Governmental Requirements and the
Operating Rules which are applicable to Services Vendor's business, Services
Vendor's provision of the Services and/or Services Vendor's other
responsibilities under this Agreement, including without limitation securing any
licenses, permits, registrations or other authorizations from such governmental
authorities as Services Vendor may need in order to provide the Services and
carry out Services Vendor's other responsibilities under this Agreement,
including but not limited to any licenses required under federal or state laws
governing money transmission, sale of checks or sale of payment instruments
(collectively, the "Services Vendor Requirements"). Services Vendor acknowledges
and agrees that it is solely responsible for monitoring legal developments
applicable to the operation of its business, the Services and the Services
Vendor systems, and interpreting Services Vendor Requirements applicable
thereto, determining the requirements for compliance with all such applicable
Services Vendor Requirements. Services Vendor is responsible for any applicable
State licensing, statutes, regulations or guidelines.
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(c) Performance Warranty. The Company, the Services and Services Vendor
System will comply, operate, perform and be performed in accordance with this
Agreement and the applicable Services Schedules. All Services hereunder shall be
performed in a competent, professional and workmanlike manner and by personnel
who possess sufficient knowledge, skill and training to accomplish their
assigned tasks.
(d) Authority. The Company and Services Vendor are in xxxx standing in
the state of their organization, are qualified to do business in each state in
which it proposes to provide products and services and where qualification is so
required, and has all licenses and permits necessary or required to provide such
products and services. The Company and Services Vendor shall provide copies or
other evidence thereof to each other upon request. Any fees for licenses and
permits required by law or regulation that may be necessary for Services
Vendor's performance hereunder shall be the responsibility of Services Vendor.
(e) Employee Matters. Services Vendor is not an employee, agent, or
partner of Company, and shall perform its obligations hereunder as an
independent contractor. Services Vendor's personnel shall not be considered
employees of Company within the meaning or application of any federal, state, or
local laws or regulations. Services Vendor shall be responsible for the payment
of wages, salaries, and other amounts due its personnel in connection with their
performance hereunder, and shall be responsible for all payroll reports and
obligations, including but not limited to withholding, social security,
unemployment insurance, workers' compensation, immigration and naturalization,
and similar items. The Company is not an employee, agent, or partner of the
Services Vendor, and shall perform its obligations hereunder as an independent
contractor. The Company's personnel shall not be considered employees of the
Services Vendor within the meaning or application of any federal, state, or
local laws or regulations. The Company shall be responsible far the payment of
wages, salaries, and other amounts due its personnel in' connection with their
performance hereunder, and shall be responsible for all payroll reports and
obligations, including but not limited to withholding, social security,
unemployment insurance, workers' compensation, immigration and naturalization,
and similar items.
5.3 COMPANY'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. Company further
represents, warrants, and covenants to Services Vendor the following:
(a) Cooperation. Company will reasonably cooperate with Services Vendor
in the performance of Company's activities contemplated by this Agreement by,
among other things, making available, as reasonably 'requested by Services
Vendor, such volume and other forecasts, updated information, management
decisions and approvals so that Services Vendor may fulfill its obligations
under this Agreement in a timely and efficient manner.
(b) Compliance with Governmental Requirements and Operating Rules.
Company shall comply with all Governmental Requirements and the Operating Rules
which are applicable to Company's business and Company's other responsibilities
under this Agreement, including without limitation securing any licenses,
permits, registrations or other authorizations from such governmental
authorities as Company may need in order to market and issue Stared Value Cards
to Cardholders and to carry out Company's other responsibilities under this
Agreement (collectively, the "Company Requirements'). Company acknowledges and
agrees that it is solely responsible for monitoring legal developments
applicable to the operation of its business and Stored Value Card operations,
and interpreting applicable Company Requirements, determining the requirements
for compliance with all applicable Company Requirements, and maintaining an
ongoing compliance program,
5.4 Warranty Exclusion. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY
MADE IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, TO THE OTHER, ANY CARDHOLDER, OR TO ANY OTHER PERSON,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING THE MERCHANTABILITY,
SUITABILITY, ORIGINALITY,
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QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OR OTHERWISE
(IRRESPECTIVE OF ANY PREVIOUS COURSE OF DEALINGS BETWEEN THE PARTIES OR CUSTOM
OR USAGE OF "TRADE), OR RESULTS TO BE DERIVED FROM THE USE OF ANY SOFTWARE,
SERVICES, HARDWARE OR OTHER MATERIALS PROVIDED UNDER TI-[IS AGREEMENT.
6. INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY
(a) INDEMNIFICATION BY COMPANY. Company agrees to indemnify and defend
Services Vendor and its directors, officers, employees and agents, and hold them
harmless from and against any and all actual or threatened claims, losses,
proceedings, actions, liabilities, judgments, awards or costs (including
reasonable attorneys fees and expenses)(collectively, "Losses") by any third
party arising out of or related to (i) the breach by Company of any of its
representations or warranties contained in this Agreement; (ii) the failure by
Company to fully perform any of its obligations hereunder; or (iii) the failure
by Company to comply with any Governmental Requirements or Operating Rules in
connection with the performance of its obligations hereunder.
(b) INDEMNIFICATION BY SERVICES VENDOR. Services Vendor agrees to
indemnify and defend Company and their respective directors, officers, employees
and agents, and hold them harmless from and against any and all Losses by any
third party arising out of or related to (i) the breach by Services Vendor of
any of its representations or warranties contained in this Agreement; (ii) the
failure by Services Vendor to fully perform any of its obligations hereunder-,
or (iii) the failure by Services Vendor to comply with any applicable
Governmental Requirements or Operating Rules in connection with the performance
of its obligations hereunder.
(c) INDEMNIFICATION PROCEDURE. In the event that any claim is made or
asserted against a party entitled to indemnification under this Agreement (the
"Indemnified Party"), the Indemnified Party shall with reasonable promptness
notify the other Party with an indemnification obligation (the "Indemnifying
Party") of such claim (the "Claim Notice"), specifying the nature of such claim
and the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such claim). The
Indemnifying Party shall have 30 days from the receipt of the Claim Notice (the
"Notice Period") to notify the Indemnified Party (i) whether or not the
Indemnifying Party disputes liability to the Indemnified Party hereunder with
respect to such claim and (ii) if the Indemnifying Party does not dispute such
liability, whether or not the Indemnifying Party desires, at the sole cost and
expense of the Indemnifying Party, to defend against such claim, provided that
the Indemnified Party is hereby authorized (but not obligated) prior to and
during the Notice Period to file any motion, answer or other pleading and to
take any other action that the Indemnified Party shall deem necessary or
appropriate to protect the Indemnified Party's interests. In the event that the
Indemnifying Party notifies the Indemnified Party within the Notice Period that
the Indemnifying Party does not dispute the Indemnifying Party's obligation to
indemnify hereunder and desires to defend against such claim, except as
hereinafter provided, the Indemnifying Party shall have the right to defend by
appropriate proceedings, which proceedings shall be promptly settled or
prosecuted by the Indemnifying Party to a final conclusion; provided that,
unless the Indemnified Party otherwise agrees in writing, the Indemnifying Party
may not settle any matter (in whole or in part) unless such settlement includes
a complete and unconditional release or the Indemnified Party. If the
Indemnified Party desires to participate in, but not control, any such defense
or settlement the Indemnified Party may do so at its sole cost and expense. If
the Indemnifying Party elects not to defend the Indemnified Party against such
Claim, whether by not giving the Indemnified Party timely notice as provided
above or otherwise, then, without waiving any rights against the Indemnifying
Party, the Indemnified Party may settle or defend against any such claim or
demand in the Indemnified Party's sole discretion and, if it is ultimately
determined that the Indemnifying Party is responsible therefore under this
Section 5, then the Indemnified Party shall be entitled to recover from the
Indemnifying Party the amount of any settlement
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or judgment and all indemnifiable costs and expenses of the Indemnified
Party with respect thereto, including, without limitation, interest from
the date such costs and expenses were incurred.
(d) INSURANCE. Each party shall obtain and maintain, at its own cost,
Errors and Omissions insurance coverage's which are described on Exhibit ___ as
being its respective responsibility. These insurance coverage's do not create or
imply any limitation of liability. The party which is responsible for obtaining
and maintaining certain insurance coverage's shall provide the other party with
certificates of such insurance coverage's promptly following the date that this
Agreement has been executed by both parties. Each insurance certificate shall
provide that the insurance policy shall not be subject to termination without at
least thirty (30) days prior written notice to the certificate holder. A party
responsible for obtaining and maintaining property insurance coverage shall use
all reasonable efforts to ensure that the policy contains a provision or
endorsement which waives the insurance company's right of subrogation against
the other party and its employees, agents, directors and officers in the event
of any loss or damage from events within the coverage of the insurance policy.
(e) DIRECT DAMAGES. If a party shall during the term of this Agreement
be liable to the other party or any affiliate, as a result of any disputes,
controversies or claims of any kind or nature arising under or in connection
with this Agreement or the transactions contemplated hereby (whether any such
breaches, disputes, controversies or claims are based upon contract, tort
(including negligence) or any other legal theory), all damages from all such
breaches, disputes, controversies or claims are limited to actual, direct and
out-of-pocket damages which are reasonably incurred by the injured party.
(f) CONSEQUENTIAL DAMAGES EXCLUSION. It is agreed that in no event,
shall a party be liable to the other Party for consequential, indirect, special,
punitive or incidental damages, or for any lost profits, lost revenues, or
damage to good will.
(g) LIMITATION ON DAMAGES.
(1) Exceptions. Notwithstanding the foregoing provisions of
Section 6(e) and 6(f), the liability limitations set forth therein
shall not apply with respect to (i) the indemnification obligations of
a party under this Agreement, (ii) damages caused solely and directly
by a party's gross negligence, intentional misconduct or fraud, (iii)
damages arising under a breach of Section 4; (iv) damages arising with
respect to obligations in connection with the Intellectual Property
Rights of the other party; and (v) either Party's liability, if any,
for contribution or indemnity with respect to claims for bodily injury
to, or the death of any person.
(2) Subject to the exceptions set forth in Section 6(g)(1),
the limitations set forth in Sections 6(e) and 6(1) shall apply whether
or not the alleged breach or default is a breach of a fundamental
condition or term, or a fundamental breach, or if any limited warranty
or limited remedy fails of its essential purpose,
7. FORCE MAICURE
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Neither Party shall be liable to the other by reason of failure or delay in the
performance of its obligations herein on account of Acts of God, fires, storms,
war, terrurist attacks, governmental action, labor conditions, earthquakes,
natural disasters, interruption in intereet service or any other cause which is
beyond the reasonable control of such Party. In the event of such disability,
the disabled party will immediately notify the other of the disabling event and
will take every reasonable effort to overcome the disability and resume
performance under this Agreement as soon as practicable.
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8. TERM
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(a) For the purposes of this Agreement, there shall be an initial term
of 2 years from the signing of this agreement. Should the Company and Services
Vendor mutually agree to an extension of this Agreement beyond the initial 2
your term day, the Agreement shall be renewed for a 2 year period.
(b) This Agreement shall benefit and be binding upon the parties hereto
and their respective successors and assigns. As defined in Definitions of this
Agreement the obligations of the Services Vendor and Customer herein noted shall
be effective immediately from the date of execution of this Agreement.
(c) Termination for Cause. In the event of a material breach of this
Agreement by a party (the `Breaching Party"), the other party (the
"Non-Breaching Party") may give written notice of such material breach
specifying in reasonable detail the nature of the breach and, if the breach may
be cured, the curative action which needs to be taken by the Breaching Party
(the `Breach Notice"). If the Breaching Party fails to cure, to the extent
curable, the material breach within thirty (30) days after receipt of the Breach
Notice, then the Non-Breaching Party shall have the right to terminate this
Agreement immediately upon notice; provided, however, that if the Breaching
Party has commenced a cure of the breach within such 30 day period after receipt
and thereafter diligently and in good faith pursues the completion of such cure,
the Non-Breaching Party shall not have the right to terminate this Agreement
unless the breach is not fully cured as of sixty (60) days after receipt of the
Breach Notice,
(d) Insolvency. Except as otherwise provided by law, either party may
terminate this Agreement by written notice to the other party if one of the
parties (a) is insolvent or otherwise is unable to meet its debts as they become
due, (b) commences a voluntary proceeding under any Federal or state bankruptcy,
insolvency or reorganization law, (c) has such a proceeding filed against it and
fails to have such proceeding stayed or vacated within sixty (60) days, or (d)
upon the end of any such stay, fails to have such involuntary proceeding vacated
within thirty (30) business days thereafter, (e) admits the material allegations
of any petition in bankruptcy filed against it, (f) is adjudged bankrupt, (g)
makes a general assignment for the benefit of its creditors, or if a receiver is
appointed ror all or n substantial portion of such party's assets and is not
discharged within thirty (30) business days after the appointment of the
receiver, or (h) ceases its business operations. Any termination of this
Agreement pursuant to this Section 8(d) shall be considered to be by reason of
anticipatory breach of contract by the non-terminating party, and such
termination shall be without prejudice to any rights the terminating party may
have by reason of such anticipatory breach. All rights granted under or pursuant
to this Agreement by Services Vendor to Company are, and shall otherwise be
deemed to be, for purposes of Section 365(n) of the United States Bankruptcy
Code (as now constituted or hereafter amended, the "Code"), rights to
"intellectual property" as defined under the Code. The parties hereto agree that
Company shall retain and may fully exercise all of its rights and elections
under the Code.
(e) Termination for Certain Legal Changes. If either party reasonably
concludes that this Agreement cannot be performed without violating applicable
Governmental Requirements and Operating Rules or if the application of such
Governmental Requirements and Operating Rules impose material, additional and
reasonably unavoidable costs to be incurred by either party, the parties will
negotiate in good faith to modify this Agreement to the extent necessary to
ensure that the parties will be in full compliance with all applicable
Governmental Requirements and Operating Rules. If the parties cannot agree to
any required changes, either party may, by giving written notice to the other
party, terminate this Agreement as of a date specified in such notice, without
liability for any termination fee or other penalty. In addition, if any
governmental authority or third party initiates any action asserting that
actions by parties under this Agreement violates any Governmental Requirements
or Operating Rules, either party may, by giving written notice, terminate this
Agreement as of n date specified in such notice.
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