EXHIBIT 10.63
MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT ("AGREEMENT") is between Appiant Technologies,
Inc., a Delaware corporation, with a principal place of business at 0000 Xxxxx
Xxxxx, Xxxxxxxxxx, XX 00000 ("APPIANT") and InPhonic,Inc., a Delaware
corporation, with a principal place of business at 0000Xxxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx X.X. 00000 ("CLIENT"), dated as of March 22, 2001 ("EFFECTIVE
DATE"). Appiant and Client shall be referenced to separately as "Party" and
collectively as the "Parties".
BACKGROUND.
WHEREAS, Appiant wants to deliver and Client wants to receive certain
unified communications and information application products and services (the
"INUNISON(TM) SERVICES"); and
WHEREAS, Client wants to make certain inUnison(TM) Services available to
Client's customers ("SUBSCRIBERS") to offer to end users (the "END USERS") by an
Internet-based portal ("PORTAL"); and
WHEREAS, the inUnison(TM) Services that Client may order hereunder are
identified in the features set forth on the attached Exhibit A, entitled
"INUNISON(TM) FEATURES"; and
WHEREAS, the inUnison(TM) Services requested by Client to be provided by
Appiant together with any related services or products will be submitted by
Client to Appiant in accordance with this Agreement on the standard purchase
order form, attached as Exhibit B (the "PURCHASE ORDER"); and
WHEREAS, a jointly developed detailed description of the inUnison(TM)
Services and any related services and products that are ordered by Client and
accepted by Appiant (the "DESIGNATED SERVICES") for provisioning will be set
forth in a statement of work, as more particularly described below ("SOW").
NOW THEREFORE, in consideration of the foregoing and of the mutual promises
contained herein, the Parties agree as follows:
AGREEMENT.
1. TERM.
a. Initial Term and SOW Term. The initial term of this Agreement is three
-------------------------
years from the Effective Date (the "INITIAL TERM"). The term of each
SOW, as more particularly described below, will begin on the date
specified in the SOW (each a "SOW Effective Date") and will be
coterminous with this Agreement unless a shorter term is specified in
the applicable SOW.
b. Renewal. Client will notify Appiant 90 days prior to the expiration of
-------
the Initial Term if Client wants to renew this Agreement (and all
selected SOWs), with the Initial Term and any renewal period being
referred to herein as the "Term".
2. SERVICES.
a. Designated Services. Prior to initiating any work in connection with
-------------------
the development of an SOW, InPhonic must issue and Appiant must accept
in writing a Purchase Order for those services to be set forth in the
applicable SOW. Should InPhonic terminate the Purchase Order after
Appiant has accepted the Purchase Order in writing but before the
Parties are delivering Designated Services to Subscribers, then
Appiant will invoice InPhonic for all reasonable expenses incurred by
Appiant in reliance upon such Purchase Order. InPhonic will pay such
invoice within 30 days from the date it is received by InPhonic, as
long as Appiant has given InPhonic written notice of such expenses
prior to incurring them and InPhonic has not reasonably denied them in
written response to Appiant. All Designated Services are set for in a
SOW and incorporated by reference into this Agreement.
i. Modifications. Appiant reserves the right to modify the
-------------
Designated Services from time to time, provided that Appiant will
not modify them in a manner that would (i) materially impact (for
purposes of this Section, the Parties recognize that the term
"materially impact" means a modification in the Designated
Services that would render Client in breach of an Agreement with
its customer) a Purchase Order still in effect or (ii) have a
significant adverse affect on Client's' use of or ability to use
the Designated Services, as long as Appiant provides Client with
at least 30 days prior written notice to Client of any such
modification.
ii. Co-Branded Portal. Appiant will develop and deliver a co-branded
-----------------
Portal, containing certain elements ("CO-BRANDED ELEMENTS")
pursuant to a jointly developed SOW ("CO-BRANDED PORTAL"). Such
Co-Branded Portal will have a dual-branded URL , as agreed upon
by the Parties in the relevant SOW. The Parties will agree and
set forth in each SOW who will own, manage and approve the
advertising inventory on the Co-Branded Portal. Parties can
promote or sell advertising inventory that does not interfere or
compete with any Parties' products or services, based on the
relevant SOW. Approval for advertising is required by all Parties
and will not be unreasonably withheld.
iii. Co-Branded Elements. Client warrants and represents to Appiant
-------------------
that Client has full power and authority to provide to Appiant,
and to authorize Appiant's use of, the Co-Branded Elements.
Client grants to Appiant a non-exclusive, nontransferable (unless
expressly provided for herein), worldwide, royalty-free,
irrevocable (during the Term) license to reproduce, display,
perform, modify, prepare derivative works of and otherwise use
the Co-Branded Elements for the purpose of branding Client's
Co-Branded Portal and making such Co-Branded Portal available as
User Services.
b. Use of Designated Services.
--------------------------
i. Storage Capacity. Client may provide or resell to Subscribers
----------------
certain agreed upon Designated Services ('USER SERVICES") and
such Subscriber's authorized end users ("USERS"), in accordance
with the terms and conditions of this Agreement.
ii. Portal. Each User will have access to a Portal that enables
------
access to the User Services. Each Portal provided hereunder will
have the storage capacity as agreed upon in the applicable SOW.
1. Maximum Limit. Appiant will notify User when User's Portal
-------------
is approaching or exceeds the maximum limit. Thereafter, if
such User exceeds the maximum storage capacity, Appiant may
(i) provide additional storage to Client at the fees set
forth in the applicable SOW (or if no fees indicated, at
Appiant's then-current standard rates); or (ii) bounce email
messages, fax messages, voice-mail messages, calendar
content, and other content, as applicable, from the affected
User's Portal, at Appiant's discretion.
2. Storage Limitation. Notwithstanding the foregoing, if Client
------------------
or its Users are exceeding the maximum storage limit,
Appiant will provide notice to the Client or its Users that
it must either purchase more storage or Appiant will be
required to limit such storage where necessary to protect
the Appiant System (as defined below), with Appiant
providing notice to Client (by e-mail or otherwise).
3. Additional Storage. At any time during the Term, Client may
-------------------
purchase additional storage for all Portals on a particular
domain or all domains, at the fees set forth in the
applicable SOW (or if no fees indicated, at Appiant's
then-current standard rates.
iii. Acceptable Use Policy: Client agrees to adhere to Appiant's
---------------------
policy regarding acceptable use of the inUnison(TM) services, a
copy of which is attached to this Agreement and may be viewed at
xxx.xxxxxxx.xxx ("ACCEPTABLE USE POLICY"). Client agrees that
prior to each User's initial use of the User Services, Client
will obtain, or will ensure that its Subscriber obtains, binding
consent from such User to adhere to terms of use that are no less
restrictive than the Acceptable Use Policy. Upon 10 days notice
(through e-mail notification or otherwise) to Client, Appiant, in
its sole discretion, may modify the Acceptable Use Policy
provided such does not materially impact a Purchase Order still
in effect. Client will be responsible for communicating such
modifications to Users within 10 days of Client's receipt of such
modification.
iv. Unlawful Use. If Appiant becomes aware of or suspects any
------------
violation of the Acceptable Use Policy, Appiant will attempt to
notify Client and provide reasonable detail of such violation.
1. However, Appiant reserves the right to immediately suspend
or terminate any portion of the Designated Services, in
whole or in part, to Client or any User if Appiant
reasonably determines, in its sole discretion, may be in
violation of the Acceptable Use Policy. Appiant may also
take such action when it believes it is reasonably necessary
to protect Appiant's interests or the interests of other
customers or users.
2. If a User uses the User Services in violation of the
Acceptable Use Policy, and thereby causes damage or added
expense to Appiant, Client will be liable to Appiant for
such damage or added expense.
3. Client agrees to notify Users that the use of the User
Services, including the initiation or delivery of any spam,
will use or cause to be used Appiant's equipment in the
State of California and that violations of the Acceptable
Use Policy may subject User, as applicable, to criminal or
civil liability, including without limitation liability
under California Business & Professions Code Section
17538.45. Client will cooperate with Appiant in
investigations and other actions taken for suspected or
known violations of the Acceptable Use Policy.
v. Additional Restrictions. Client agrees that it will not, and will
-----------------------
not permit any third party to, (i) sell, transfer, lease, license
or sublicense any of the rights granted under this Agreement
except as expressly permitted herein; (ii) attempt to download or
otherwise obtain a copy of any software on the Appiant System (as
described below); or (iii) allow access to the Designated
Services to any third party other than as expressly permitted in
this Agreement.
vi. Privacy. Client agrees that prior to each User's initial use of
-------
the User Services, Client will obtain, or will ensure that its
Subscriber obtains, binding consent from such User to adhere to a
privacy policy that allows Appiant to use and disclose all
information regarding Users that is disclosed, collected or
generated in connection with the Designated Services, including
without limitation any information transmitted in connection with
the User Services ("USER INFORMATION") as follows: (a) as
required by law, (b) to provide the Designated Services, (c) to
operate or maintain the Appiant System, (d) to monitor the usage
of the Designated Services and any trends, or patterns related
thereto, (e) for other purposes that may be identified by Appiant
from time to time upon 10 days notice to Client (via e-mail or
otherwise), as mutually agreed upon by the Parties.
vii. Change Management Procedure. Either Client or Appiant can submit
----------------------------
a request to change the services under an SOW (a "SERVICE CHANGE
REQUEST") or (a "SERVICE CHANGE ORDER") as described below:
1. Service Change Request. Appiant and Client may submit a
Service Change Request provided the change is to be made
within the scope of the current SOW and will not result in a
change in fees to Client. If Appiant determines that the
Service Change Request will result in a fee change, it will
be processed as a Service Change Order.
2. Service Change Order. Appiant and Client may submit a
written Service Change Order to initiate a change to the
service deliverables that are not within the scope as
defined in the relevant SOW. The Service Change Order must
include:
a. A description of the requested change;
b. The purpose for the change;
x. Xxxx of requested implementation;
d. Signature of authorized requester.
3. Appiant will advise Client of the resultant impact of a
Service Change Request or Service Change Order on fees and
Service Fee Schedule for the relevant SOW. Prior to
implementation, the Parties must mutually agree upon all
Service Change Orders. Pending such agreement, Appiant shall
continue to perform and to be paid as if such Service Change
Order had not been requested or recommended, provided that
if either Party proposes a Service Change Order which
represents a material change in the Operations Services in
the other Party's reasonable judgment, and such Service
Change Order remains outstanding for 30 days or is rejected
by the other Party, either Party shall have the right to
terminate the relevant SOW, provided the escalation
procedures under this Master Agreement have been completed
and have failed to resolve this issue.
4. Once a Service Change Order is implemented, the fees to
Client will be adjusted accordingly.
c. Additional Services.. "ADDITIONAL SERVICES" will mean those services
--------------------
requested by Client of Appiant that are outside the scope of the
Designated Services. If Client requests provision of Additional
Services, Appiant will review such written request, and if the Parties
agree upon a written Purchase Order for such Additional Services,
including any fee adjustments, then Appiant may provide such
Additional Services as set forth in a jointly developed SOW.
d. Equipment. If Client requires the use of any Equipment not set forth
---------
in the applicable SOW, then the Parties will agree upon the details of
identification and use of such Equipment and attach an exhibit
entitled Equipment to the applicable SOW. Both Parties must have a
duly authorized representative sign such an Equipment exhibit.
3. RESPONSIBILITIES.
a. Client's Responsibilities.
-------------------------
i. Client will appoint an individual ("Client's Contract Manager")
who from the Effective Date will serve as the primary Client
representative under this Master Agreement. The Client's Contract
Manager will (a) have overall responsibility for managing and
coordinating the performance of Client's obligations under this
Master Agreement and (b) be authorized to act for and on behalf
of Client with respect to all matters relating to this Master
Agreement.
ii. As of the Effective Date and continuing for so long as Appiant
requires the same for the performance of the Services, Client
will provide to Appiant, at no charge to Appiant those resources
listed in the relevant SOW.
iii. Client is solely responsible for any written or oral
representations it provides to Users with respect to the Appiant
Technology, including, without limitation, the inUnison(TM)
service and the Appiant System.
b. Appiant's Responsibilities.
--------------------------
i. Appiant will appoint an individual ("Appiant's Contract Manager")
who from the Effective Date will serve as the primary Client
representative under this Master Agreement. Appiant's Contract
Manager will (a) have overall responsibility for managing and
coordinating the performance of Appiant's obligations under this
Master Agreement and (b) be authorized to act for and on behalf
of Appiant with respect to all matters relating to this Master
Agreement.
ii. Appiant will use any agreed upon Client resources or facilities
only in connection with its obligations hereunder to Client.
4. PROPRIETARY RIGHTS.
a. Appiant Technology. For purposes of this Agreement, "APPIANT
------------------
TECHNOLOGY" will mean Appiant's proprietary technology, including,
without limitation, any hardware designs, algorithms, designs,
libraries, know-how, trade secrets, instruction manuals, on-line help
files, the inUnison(TM) service, the computer system used by Appiant
to provide the inUnison(TM) service ("APPIANT SYSTEM"), all software
(in source and object code form), specifications, processes,
techniques, concepts, ideas, improvements, discoveries, inventions,
and other technology made or developed in connection with the
Services, all derivatives, improvements, enhancements or extensions
thereof conceived, reduced to practice, or developed during the Term
of this Agreement, and all intellectual property rights related
thereto, provided, however, Client will have the right, title and
ownership to certain information as set forth in a relevant SOW,
including but not limited to local DID access numbers, 800 access
numbers, URLs, and Subscriber information to the extent it does not
interfere with Appiant's obligations in connection with the Designated
Services.
i. Subject to the terms and conditions of this Agreement, Appiant
grants Client a non-exclusive, non-transferable, royalty-free
limited license to use the Appiant Technology solely in
connection with Designated Services during the Term. Appiant and
its licensors retain all rights, title and interest in and to the
Appiant Technology.
ii. Except as permitted by applicable law, Client may not decompile,
reverse engineer, disassemble, modify, rent, lease, loan,
distribute, reproduce, sublicense, assign, transfer or create
derivative works of the Appiant Technology. Client may not
remove, deface or obscure any of Appiant's or its licensors'
proprietary rights notices on or in the Appiant Technology or on
output generated by the Appiant Technology. If a license
agreement is included with any Appiant Technology provided
hereunder, to the extent such license agreement is inconsistent
with this Agreement, Client will be subject to the terms and
conditions of such license agreement with respect to such Appiant
Technology. Client agrees that any violation of such license
agreement will constitute a material breach of this Agreement.
b. User Information. Notwithstanding anything to the contrary herein,
----------------
Appiant may use and disclose the User Information in connection with
exercising its rights and performing its obligations under, or as
otherwise expressly permitted by, this Agreement, including, without
limitation, (i) as required by law, (ii) to provide the Designated
Services, (iii) to operate or maintain the Appiant System, and (iv)
for its own internal purposes to monitor the usage of the Designated
Services and any trends, or patterns related thereto.
c. Enabling Technology. Client understands that the Designated Services
-------------------
are enabling technology with evolving functions. Client acknowledges
that Appiant owns the inUnison(TM) services and related documentation,
and all authorized or unauthorized copies or Appiant modifications
thereof, as well as all rights contained in or evidenced by any
copyright, trade secret, patent or other intellectual or industrial
property rights. All physical copies of the Appiant Technology in any
form, including but not limited to diskette or tape media, and related
documentation remain Appiant property.
d. Trademarks. Each Party ("LICENSOR") hereby grants to the other Party
----------
("LICENSEE") a revocable, non-exclusive, non-transferable (unless
expressly provided for herein), non-sublicensable (except to
independent contractors performing work on behalf of Licensee),
worldwide, royalty-free, fully paid-up license during the Term to use
the trademarks, service marks, slogans and logos ("MARKS") designated
by Licensor in any SOW solely for the purposes set forth therein.
Licensor reserves all of its rights in the Licensor Marks and Licensee
claims no rights whatsoever in the Licensor Marks other than those
granted by this Agreement. Any use of the Licensor Marks by Licensee
will be pursuant to and in compliance with Licensor's guidelines for
trademark usage that may be provided by Licensor from time to time.
All goodwill attributed to the Licensor Marks will inure to the
benefit of Licensor exclusively.
e. Client Technology. Client agrees that in the course of performing the
-----------------
Designated Services Appiant may reasonably determine it needs access
to Client's tangible equipment or Client's proprietary technology
("CLIENT TECHNOLOGY"). Therefore, Client hereby grants to Appiant a
nonexclusive, royalty-free license, during the Term, to use the Client
Technology solely for the purposes of delivering the Designated
Services to Client. To the extent that Client or its employees or
contractors participate in the creation or development of technology
with Appiant, Client and Appiant will set forth in a relevant SOW the
determination of rights, title and interest, including all
intellectual property rights in such jointly developed technology.
f. Appiant Tools. Notwithstanding anything in this Agreement to the
-------------
contrary, any license to Appiant Technology is granted to Client
exclusive of any and all development tools used by appiant in
performing the Designated Services which are based on trade secrets or
proprietary information of Appiant or are otherwise owned or licensed
by Appiant (each, an "APPIANT DEVELOPMENTAL TOOL"). Appiant retains
all right, title and interest in and to each Appiant Developmental
Tool.
g. Further Assurances. Each Party shall, at its own expense, promptly
------------------
execute and deliver such further documents and take any and all other
action reasonably requested by the other Party from time to time, for
the purpose of fully effectuating the intent and purposes of this
Agreement, including, without limitation, each SOW, and to protect the
interests of the other Party, its successors and assignees.
5. CONFIDENTIAL INFORMATION.
a. DEFINITION. "CONFIDENTIAL INFORMATION" of a Party means (i) any
----------
Appiant Technology, the terms and pricing under this Agreement, and
all information clearly marked as confidential by the disclosing Party
at the time of disclosure or, if disclosed orally, summarized in
writing, marked as confidential and delivered to the receiving Party
within 30 days of disclosure. Confidential Information will not
include information that: (a) is in or enters the public domain
without breach of this Agreement; (b) the receiving Party lawfully
receives from a third party without restriction on disclosure and
without breach of a nondisclosure obligation; or (c) the receiving
Party knew prior to receiving such information from the disclosing
Party or develops independently.
b. RESTRICTIONS. Each Party agrees: (i) that it will not use any
------------
Confidential Information of the other Party for any purpose other than
to exercise its rights and perform its obligations under this
Agreement, (ii) that it will not disclose to any third party any
Confidential Information of the other Party except as expressly
permitted in this Agreement, provided, however, that either Party
("RECIPIENT") may (a) disclose the Confidential Information of the
other Party ("DISCLOSER") to Recipient's employees and contractors who
need to know such information and who are bound in writing by
restrictions regarding disclosure and use of such Confidential
Information comparable to those set forth herein, and (b) use or
disclose such Confidential Information to the extent Recipient is
legally compelled to disclose such Confidential Information, provided,
however, that prior to any such compelled disclosure, Recipient will
give Discloser reasonable advance notice of any disclosure and will
cooperate with Discloser in protecting against any such disclosure
and/or obtaining a protective order narrowing the scope of such
disclosure and/or use of the Confidential Information, and (iii) that
it will take all reasonable measures to maintain the confidentiality
of all Confidential Information of the other Party in its possession
or control, which will in no event be less than the measures it uses
to maintain the confidentiality of its own confidential or proprietary
information of a similar nature
6. MOST FAVORED CLIENT AND NON-COMPETE. During the Term, Appiant will not give
more favorable prices to any substantially similarly situated customer than
available to Client hereunder, except for government or non-profit
organizations. In return, Client will not enter into an agreement with any
party except Appiant with regard to services substantially similar to the
Designated Services. If Client does enter into an agreement with a third
party in connection with services substantially similar to the Designated
Services, Client will immediately pay to Appiant any sum Appiant provided,
including the amount referenced in the letter dated February 10, 2001.
7. PAYMENT.
a. Fees. Client will pay Appiant the fees more particularly described on
----
an exhibit attached to the relevant SOW (the "SERVICE FEE SCHEDULE").
The Parties will agree in writing to features and related prices prior
to presenting them to prospective Subscribers. During the first 12
months of the Initial Term, Appiant will issue to InPhonic warrants to
acquire 2 shares for each Subscriber up to a total of 200,000 shares.
As previously agreed in the letter dated February 10, 2001, executed
by Messrs. Xxxx and Xxxxxxxxx, the terms and conditions of such
warrants will be set forth in a Warrant Agreement, which is subject to
approval by the Board of Directors of Appiant.
b. General Payment Terms. Monthly recurring charges will be billed in
---------------------
advance of the provision of Designated Services. All other charges for
Designated Services provided and expenses incurred during a month
(e.g., professional services, and additional bandwidth), subject to
the prior written approval (which shall not unreasonably be withheld)
by the Client, will be billed at the end of the month in which the
Designated Services were provided. All payments are due 30 days after
invoice. Appiant may charge a late fee of one and 1.5% per month, or,
if less, the maximum amount allowed by applicable law, for payments
made by Client after the due date. Client will cooperate with Appiant
to arrange for electronic payment of each monthly invoice.
c. Taxes. Except as specifically stated to the contrary in a relevant
-----
SOW, all amounts payable under this Agreement will be made in U.S.
dollars, and are exclusive of any sales, use, excise, property or any
other taxes associated with the provision of the Designated Services
or User Services. Client is responsible for payment of any and all
such taxes (excluding taxes based on Appiant's net income). If Client
is required by law to deduct or withhold any taxes, levies, imposts,
fees, assessments, deductions or charges from or in respect of any
amounts payable hereunder to Appiant, (i) Client will pay the relevant
taxation authority the minimum amounts necessary to comply with the
applicable law, (ii) Client will make such payment prior to the date
on which interest or penalty is attached thereto, and (iii) the
amounts payable hereunder will be increased as may be necessary so
that after Client makes all required deductions or withholdings,
Appiant will receive amounts equal to the amounts it would have
received had no such deductions or withholdings been required.
8. WARRANTIES.
a. Appiant Disclaimer. ALL DESIGNATED SERVICES, AND SERVICES RENDERED OR
------------------
EQUIPMENT SUPPLIED IN CONNECTION WITH THIS AGREEMENT, ARE RENDERED AND
SUPPLIED "AS IS," UNLESS SPECIFICALLY NOTED TO THE CONTRARY. APPIANT
AND ITS SUPPLIERS MAKE NO WARRANTY OF ANY KIND, WHETHER EXPRESS OR
IMPLIED, REGARDING THE DESIGNATED SERVICES, AND SERVICES RENDERED OR
EQUIPMENT SUPPLIED IN CONNECTION WITH THIS AGREEMENT AND SPECIFICALLY
DISCLAIM THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS, TO THE
MAXIMUM EXTENT PERMITTED BY LAW.
b. Authorization. Each Party represents and warrants to the other Party
-------------
that it has the right to enter into and perform this Agreement and
that performance by such Party of its obligations hereunder will not
cause it to be in breach of any other agreement to which it is a
party.
c. Pass-Through Warranties. To the extent it is allowed, Appiant will
-----------------------
pass through to Client rights it obtains under warranties or
indemnities given by any subcontractors or suppliers in connection
with any work or product provided by Appiant pursuant to this
Agreement.
d. Client's Responsibilities. Client will be solely responsible for any
-------------------------
warranties it provides to Users with respect to the Designated
Services, including, without limitation, the inUnison(TM) service and
the Appiant System.
9. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY'S LIABILITY ARISING
OUT OF OR RELATING TO THIS AGREEMENT FOR ANY DAMAGES OR LIABILITY FROM ANY
CAUSE WHATSOEVER, REGARDLESS OF FORM OF ACTION, WHETHER IN CONTRACT,
NEGLIGENCE OR OTHERWISE, EXCEED THE AMOUNT PAID BY CLIENT TO APPIANT
HEREUNDER IN THE 12 MONTHS PRIOR TO ANY CLAIM. EXCEPT WITH RESPECT TO
EITHER PARTY'S INDEMNIFICATION OBLIGATIONS, IN NO EVENT WILL EITHER PARTY,
OR ITS SUPPLIERS, BE LIABLE TO THE OTHER PARTY, OR TO ANY THIRD PARTY, FOR
CONSEQUENTIAL, EXEMPLARY, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL
DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST PROFITS, EVEN IF THE PARTY
OTHERWISE LIABLE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
NEITHER PARTY WILL BE LIABLE FOR ANY ACTUAL OR ALLEGED INFRINGEMENT BY ANY
THIRD PARTY MATERIALS ACCESSED, TRANSMITTED OR OTHERWISE MADE AVAILABLE
THROUGH THE DESIGNATED SERVICES OR APPIANT OR CLIENT TECHNOLOGY.
10. INDEMNIFICATION.
a. Appiant Indemnity. Appiant will defend Client from and against any and
-----------------
all third-party claims, actions or demands ("CLAIM") against Client
and pay all related damages, costs and other liabilities finally
awarded against Client by a court of competent jurisdiction or
obtained through settlement, to the extent such Claim is based on a
claim that the Appiant Technology infringes any valid United States
patent, copyright or trade secret or that the Appiant Marks infringe
any valid trademark or copyright of a third party. These obligations
do not include any claims to the extent they are based on use of the
Appiant Technology in violation of this Agreement or in combination
with any other software or hardware, or any modification to the
Appiant Technology, either by Clients or Users or by Appiant, pursuant
to Client's specifications (including without limitation branding of
the Co-Branded Portal). If any portion of the Appiant Technology
becomes, or in Appiant's reasonable opinion is likely to become, the
subject of a claim of infringement, then Appiant may, at its option
and expense, (i) procure for Client the right to continue using such
Appiant Technology or (ii) replace or modify the Appiant Technology so
that it becomes non-infringing. The indemnity obligations set forth in
this Section 10 are contingent upon: (a) Client giving prompt written
notice to Appiant of any such claim(s); (b) Appiant having sole
control of the defense or settlement of the claim; and (c) at
Appiant's request and expense, Client cooperating in the investigation
and defense of such claim(s). THE FOREGOING STATES APPIANT'S SOLE AND
EXCLUSIVE LIABILITY AND CLIENT'S SOLE AND EXCLUSIVE REMEDY FOR CLAIMS
INVOLVING INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS.
b. Client Indemnity. Client will defend Appiant from and against any and
----------------
all Claims against Appiant and pay all related damages, costs and
other liabilities finally awarded against Appiant by a court of
competent jurisdiction or obtained through settlement, (i) resulting
from Client's marketing or resale of the inUnison(TM) service under
this Agreement, (ii) to the extent such Claim is based on a claim that
the Client Technology infringes any valid United States patent,
copyright or trade secret, and (iii) to the extent such Claim is based
on a claim that the Client Marks infringe any valid trademark or
copyright of a third party; provided that Client will not be liable
with respect to any claims, actions or demands for which Appiant is
liable under Section10(a). The indemnity obligations set forth in this
Section 10(b) are contingent upon: (i) Appiant giving prompt written
notice to Client of any such claim(s); (ii) Client having sole control
of the defense or settlement of the claim; and (iii) at Client's
request and expense, Appiant cooperating in the investigation and
defense of such claim(s). ). THE FOREGOING STATES CLIENT'S SOLE AND
EXCLUSIVE LIABILITY AND APPIANT'S SOLE AND EXCLUSIVE REMEDY FOR CLAIMS
INVOLVING INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS.
11. DISPUTE RESOLUTION.
a. Initial Step. All disputes, controversies, or claims arising out of or
-------------
relating to a Subscriber (each a "Dispute", collectively "Disputes")
shall be referred to the Appiant Project Manager and the Client
Project Manager prior to escalation to Appiant's COO and Client's COO,
with the ultimate escalation to each other's CEO.
b. Second Step. If the Appiant Project Manager and the Client Project
-----------
Manager are unable to resolve the Dispute within 7 business days after
referral of the matter to them, notice shall be given to Appiant's COO
and Client's COO about the matter, who will than have 4 business days
to resolve the Dispute, otherwise the matter will then be referred to
each other's CEO for resolution.
c. Final Step. If the CEOs are unable to resolve, or do not anticipate
----------
resolving, the dispute within 3 days after referral of the matter to
them, the Parties will submit the Dispute to arbitration.
d. No Legal Proceedings. Neither Party will institute legal proceedings
--------------------
against the other with respect to a Dispute until after the Dispute
has been considered by the CEOs of each respective Party, without
prejudice to the legal position of either Party.
e. Payment Provisions During Dispute. Client will not withhold payments
---------------------------------
during a dispute, but instead, pay Disputed amounts into an escrow
account, which will be promptly dispersed to the appropriate party
upon resolution of the Dispute.
f. Discussions and Documents. Discussions and correspondence among the
-------------------------
representatives referenced in this Section 11 and prepared for
purposes of the dispute negotiations shall be treated as confidential
information developed for purposes of settlement, shall be exempt from
discovery and production, and shall not be admissible in any
arbitration or judicial proceeding initiated after the completion of
such discussions. Documents identified in or provided with such
communications, which are not prepared for purposes of the
negotiations, are not so exempted and may, if otherwise admissible, be
admitted in evidence in any subsequent proceeding.
12. TERMINATION.
a. Termination for Breach Other than Non-Payment Either Party, except for
---------------------------------------------
failure to pay, may terminate this Agreement by giving to the other
Party notice of such termination upon the occurrence of any of the
following events (each a "DEFAULT"): (i) the other Party materially
breaches or defaults in any of the material terms or conditions of
this Agreement and fails to cure such breach or default within 60 days
of receipt of written notice thereof or as such other period as agreed
upon in a particular SOW, (ii) the other Party makes any assignment
for the benefit of creditors, is insolvent or unable to pay its debts
as they mature in the ordinary course of business, or (iii) any
proceedings are instituted by or against the other Party in bankruptcy
or under any insolvency laws or for reorganization, receivership or
dissolution.
b. Termination for Non-Payment. If Client defaults in the payment when
---------------------------
due of any amount due to Appiant pursuant to this Agreement and does
not cure such default within 30 days after being given written notice
of such default, Appiant may, by giving written notice thereof to
Client, terminate this Agreement as of the date of receipt by Client
of such notice or as of a future date specified in such notice of
termination.
c. Termination for Convenience. After the Initial Term hereof, either
---------------------------
Party may terminate this Agreement for any reason by providing 90 days
prior notice to the other.
d. Effect of Termination. Upon any termination of this Agreement: (i)
---------------------
Client will immediately destroy all copies of the Appiant Confidential
Information in its possession or under its control; and (ii) Appiant
will destroy any Client Confidential Information in its possession or
under its control. Within 30 days of termination or expiration of this
Agreement, Client will pay Appiant all accrued and unpaid fees and
charges.
e. Migration Upon Termination. Upon notice of termination for any reason
--------------------------
other than Client's material breach, Appiant will provide reasonable
assistance to Client in the migration of the inUnison(TM) service to a
third party service provider as reasonably requested and paid for by
Client, and Client further agrees to pay for all inUnison(TM) services
rendered to Client until the migration is complete. If termination of
this Agreement is due to Client's breach, Client will, in addition to
payment of all inUnison(TM) service fees, pay for Appiant's assistance
in such migration at Appiant's then-current time and materials rate
and will pay any out-of-pocket expenses incurred by Appiant in
connection with such migration. After migration, Appiant may delete
all stored messages and content of Client and Users on the Appiant
System and will cease providing all Designated Services and access by
Client and Users to the Appiant System.
f. Survival. Sections 8(a) ("Appiant Disclaimer"), 9 ("Limitation of
--------
Liability"), 5 ("Confidential Information"), 10 ("Indemnification"),
12 ("Term and Termination") and 13 ("Miscellaneous") will survive any
expiration or termination of this Agreement.
13. MISCELLANEOUS.
a. Notices. Notices under this Agreement will be in writing and will be
-------
deemed given when delivered personally, by facsimile (with
confirmation of receipt), or conventional mail (registered or
certified, postage prepaid with return receipt requested). Notices
will be addressed to the Parties at the addresses appearing in the
introductory paragraph of this Agreement, but each Party may change
the address by written notice in accordance with this paragraph.
b. Assignment. This Agreement will be binding upon and inure to the
----------
benefit of the Parties, their successors and permitted assigns.
Neither Party may transfer or assign this Agreement without the other
party's prior written consent, which consent will not be unreasonably
withheld. Notwithstanding the foregoing, either Party may assign this
Agreement without the other Party's consent (i) to any entity in which
the Party has a greater than fifty-percent (50%) equity ownership
interest or of which the Party has voting control, (ii) to any entity
that buys fifty percent (50%) or more of that Party's stock or all or
substantially all of that Party's assets, or (iii) as part of a
merger, reorganization or re-incorporation, by operation of law or
otherwise.
c. Relationship of the Parties. In providing the Designated Services,
---------------------------
Appiant is acting only as an independent contractor. Except as
expressly set forth in this Agreement, neither Party undertakes to
perform any obligation of the other Party or any other person, whether
regulatory or contractual, or to assume any responsibility for the
business or operations of the other Party or any other person. Appiant
will not be considered or be deemed to be an employee, joint-venture
or partner of Client or any other person, and no other similar
relationship is intended or created by and between Appiant and Client.
Appiant has the sole right to supervise, mandate, contract, direct,
procure, provide or cause to be provided all Designated Services.
Neither Party will make any representation, express or implied, that
such Party is an employee, agent or legal representative of the other
Party, nor will either Party assume or incur liabilities or
obligations of any kind to a third party in the name or on behalf of
such Party. Nothing contained in this Agreement is intended or is to
be construed to create a partnership, employment, joint venture or
agency relationship between Appiant and Client.
d. Force Majeure. Appiant will not be deemed to be in default of, or to
-------------
have breached, any provision of this Agreement as a result of, or be
liable for any loss, damage or penalty resulting from, any act,
omission or condition beyond Appiant's reasonable control, including
without limitation acts of God, strikes, lockouts, riots, acts of war,
governmental regulations, fire, power failure, earthquakes, severe
weather, floods or other natural disaster or Client's, Users' or any
third party's actions, hardware, software or communications equipment
or facilities (each a "FORCE MAJEURE EVENT").
e. Press Release. Any press release, public announcement or other
-------------
disclosure pertaining to this Agreement or the association of the
Parties with respect to the subject of this Agreement shall be subject
to the prior written approval of the other Party, which such approval
shall not be unreasonably withheld when disclosure is deemed by the
disclosing Party to be legally required of such Party; provided,
however, upon execution of the Agreement the Parties will work
together to agree upon a press release regarding the relationship
between the Parties hereunder.
f. General Provisions. This Agreement will be governed by and construed
------------------
in accordance with the laws of the State of Delaware without giving
effect to any choice of law rule that would cause the application of
the laws of any jurisdiction other than the internal laws of the State
of Delaware to the rights and duties of the parties. The Parties
hereby waive and disclaim the applicability of the provisions of the
United Nations Convention on the International Sale of Goods
g. Export Regulations. This Agreement is expressly made subject to any
------------------
United States government laws, regulations, orders or other
restrictions regarding export from the United States of hardware,
software, technical data or products thereof. Notwithstanding anything
to the contrary in this Agreement, neither party will directly or
indirectly export (or re-export), or permits the transshipment of ,
any hardware, software, technical data or products thereof (i) to any
country or destination for which the United States government or a
United States governmental agency requires an export license or other
approval for export without first having obtained such license or
other approval or (ii) otherwise contrary to United States law. Except
as specifically stated in a relevant SOW to the contrary, Client bears
the obligation for its Subscribers and Users for any export of such
items and all taxes, fees, and issues that flow therefrom.
h. Subject Headings. The subject headings or captions of the sections and
----------------
subsections of this Agreement are included solely for purposes of
convenience and reference only and will not be deemed to explain,
modify, limit, amplify or aid in the meaning, construction or
interpretation of any of the provisions of this Agreement.
i. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
j. Entire Agreement. This Agreement sets forth the entire understanding
----------------
of the Parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous letters of intent,
agreements, covenants, negotiations, arrangements, communications,
representations, understanding or warranties, whether oral or written,
by any officer, employee, or representative of either party relating
thereto. There are no other understandings, statements, promises or
inducements, oral or otherwise, contrary to the terms of this
Agreement. No representations, warranties, covenants or conditions,
express or implied, whether by statute or otherwise, other than as set
forth herein have been made by either Party hereto.
k. Waiver. No delay or omission by either party to exercise any right or
------
power provided under this Agreement, whether by conduct or otherwise,
in any one or more instances, will impair any such right or power or
be deemed to be a waiver or release thereof of any other right or
power, whether or not similar. No waiver will be binding unless
executed in writing by the Party making the waiver. Except as
otherwise expressly provided herein, all remedies for this Agreement
will be cumulative and in addition to, not in lieu of, any other
remedies available to either Party at law, in equity or otherwise.
l. Reformance/Severability. If any provision of this Agreement is
------------------------
declared invalid by any court of competent jurisdiction, then such
provision will be deemed automatically adjusted to the minimum extent
necessary to conform to the requirements for validity as declared at
such time and, as so adjusted, will be deemed a provision of this
Agreement as though originally included herein. If the provision
invalidated is of such a nature that it cannot be so adjusted, the
provision will be deemed deleted from this Agreement as though such
provision had never been included herein. In either case, the
remaining provisions of this Agreement will remain in effect.
m Order of Precedence. Any inconsistency between this Agreement and a
--------------------
SOW shall be resolved by giving priority and precedence in the
following order: (a) first to the relevant SOW(s) including all
attachments thereto, (b) the Master SOW, and (c) then to this Master
Agreement, provided that the Master Agreement terms and conditions
will met to the fullest extent possible.
n. Inspection. Client has the right to audit or otherwise examine (or
----------
have audited or examined) all applicable books, records, documents,
and other data of the other Party (including computations and
projections) directly relating to Subscribers under a particular SOW.
Appiant has the right to audit or otherwise examine (or have audited
or examined) all applicable books, records, documents, and other data
of the other Party (including computations and projections) directly
relating to Appiant's obligations under a particular SOW. The Party
allowing the audit shall make available at its office at all
reasonable times the materials described in the preceding paragraph of
this Section for examination, audit, or reproduction for a period of
three (3) years after termination of this Master Agreement or the
applicable SOW.
o. Insurance. Appiant and Client shall maintain the following insurance
---------
coverage: statutory workers' compensation, employer's liability,
comprehensive automobile liability with a combined single limit of
$1,000,000 for each occurrence for bodily injury and property damage
liability, and comprehensive commercial general liability in an amount
not less than $1,000,000.00 per occurrence and $2,000,000.00 in the
aggregate, and errors and omission insurance in an amount not less
than $2,000,000.00. The Parties shall immediately notify each other
upon receipt of notice of cancellation of any policy.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.
APPIANT TECHNOLOGIES, INC. INPHONIC, INC.
By By
--------------------------- ----------------------------
