EXHIBIT 10.10
Contract No. LHL-101E
SOFTWARE DEVELOPMENT AGREEMENT
SECTION I
THIS AGREEMENT made as of this first day of May, 1993, by and between AMERICAN
TELEPHONE AND TELEGRAPH COMPANY, a New York corporation having a place of
business at 00 Xxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000 ("Company") and
EVOLVING SYSTEMS, INC., a Colorado corporation having a place of business at
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Supplier").
WHEREAS, Company desires to retain Supplier to furnish the programming,
training, consulting or other services (the "Services") specified in Work
Authorization Letters (each an "Authorization Letter") to be issued from time to
time and executed by both parties; and
WHEREAS, Company also desires to obtain certain license rights to the Pre-
existing Software created and/or owned by Supplier as provided in the
Authorization Letter; and
WHEREAS, Supplier is willing to grant such rights and perform such Services
based upon the terms and conditions set forth in this Agreement and in the
Authorization Letter applicable thereto;
NOW, THEREFORE, in consideration of the foregoing recitals and the terms and
conditions set forth in this Agreement and in the Authorization Letters issued
hereunder, the parties agree as follows:
DEFINITIONS. As used in this Agreement, the following terms have the following
meaning, unless the context indicates otherwise:
"SOFTWARE". The lower case noun "software" means, depending on context,
(a) one or more software works, (b) one or more of such works together with
one or more software media providing representations of copies of such
work(s), or (c) an aggregate of (a) and (b). The adjective "software"
means the term qualifies a subject which is or pertains to software.
"SOFTWARE MEDIA". The terms "Software media" or "software media" refer to
a physical means or manifestation primarily adapted to convey, record,
store or carry software, a representation of a copy of such software being
provided by details of such media. The terms include any tape, document,
semiconductor memory, wave(s) or other physical means or manifestation
comprising one or more such media and primarily adapted to convey such
software to means external thereto or to persons, but the terms do not mean
software or copy.
"OBJECT PROGRAM" or "OBJECT CODE". The term "object program" or "object
code" means the fully compiled or assembled series of instructions, written
in machine language, ready to be loaded into the computer, that guides the
operation of the computer, in printed out form as well as stored in
software media compatible with any equipment described in this Agreement.
"SOURCE PROGRAM" or "SOURCE CODE". The term "source program" or "source
code" means the computer program expressed in a source language that
operates on the computers identified in the Specifications, and includes
such other information or documentation identified as source code in an
Authorization Letter. Such source code shall consist of a full source
language statement of the programs comprising the Software.
"DOCUMENTATION". The term "documentation" means the documentation relating
to the Software as set forth in the Authorization Letter. Subject to the
terms of the Authorization Letter, Documentation may include complete
program maintenance, documentation, procedures, flow charts, schematic
diagrams and annotations which comprise the precoding detail design
specification, and all other material necessary to allow a reasonably
skilled programmer or analyst to maintain and enhance the Software without
the assistance of Supplier or reference to any other materials.
"PRE-EXISTING SOFTWARE". Supplier's or third-party software, in object
code and source code form, including all related documentation, as
described in the Authorization Letter.
"DEVELOPED SOFTWARE". The modifications to the Pre-existing Software and
any custom software, in object code and source code form, including all
related documentation, which Supplier will develop in accordance with an
Authorization Letter.
"SOFTWARE". The upper case term "Software" means the Pre-existing Software
combined with the Developed Software.
"WORK". The term "Work" as used in this Agreement shall have the same
meaning as the term "Services."
STATEMENT OF WORK. Supplier shall provide the Services described in the
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Authorization Letter and deliver the Pre-existing Software and the Developed
Software (collectively referred to as "Software") and all other Deliverables
described in the Authorization Letter to Company at Company's location in
accordance with the Work schedule set forth in the Authorization Letter. The
Software and such other Deliverables shall perform and comply with the
specifications set forth in the Authorization Letter (the "Specifications").
REPRESENTATIVES. Company's Technical Representative(s) for each project shall
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be designated in the Authorization Letter.
Supplier's Representative for each project under this Agreement shall be
designated in the Authorization Letter.
DELIVERABLES. Supplier shall provide to Company the Deliverables described in
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the Authorization Letter for each project.
PERFORMANCE OF WORK. All Work under this Agreement shall be completed in
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accordance with the schedule identified in the Authorization Letter.
SOFTWARE TITLE AND RIGHTS. For purposes of this clause, the term "Developed
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Information" shall mean the Developed Software and other Deliverables developed
under or in anticipation of Work specified in the Authorization Letter by or in
behalf of Supplier for Company.
Supplier agrees, and shall obligate Supplier's employees and subcontractors
to agree, that all such Developed Information shall be kept in confidence by
Supplier and Supplier's employees, shall be used only in the performance of this
Agreement or work as specified in the Authorization Letter, and may not be used
for other purposes except upon such terms as may be agreed upon between the
parties in writing. If Supplier has the right to use any of the Developed
Information owned by Company, all copies of the Developed information shall bear
such copyright notices and other legends regarding ownership of the property as
may be requested by Company.
Company shall not acquire under this Agreement any title to any portion of
the Software or any portion of any other Deliverable which was not developed by
or in behalf of Supplier for Company under or in anticipation of this Agreement
(collectively referred to as the "Background Information"). The term
"Background Information" includes the Pre-existing Software. Supplier agrees to
grant to Company a license to use such Background Information as provided in the
Authorization Letter. If Company has the right to use
any of the Background Information, all copies of the Background information
shall bear such copyright notices and other legends regarding ownership of the
property as may be requested by Supplier.
Company agrees to protect and maintain the confidentiality of the
Background Information and to use the Background Information only for the
purposes set forth in the applicable Authorization Letter. Unless otherwise
provided in the applicable Authorization Letter, Company shall not sublicense,
assign, transfer, disclose or distribute any Background Information to any third
party. Without limiting the foregoing, Company shall require any of its
employees, agents, customers or assigns who may receive disclosure of any
Background Information to agree to protect the confidentiality and use of such
information in the manner provided above. Company agrees to use best efforts to
enforce such agreements on behalf of Supplier.
Subject to the limitations of the preceding paragraphs, Company shall
acquire title upon its delivery to all Software media and other information
communication media copies of the other Deliverables delivered under this
Agreement to Company, whether or not Company owns any portion of such Software
or other information fixed on the media or on the other Deliverables, provided
that Supplier shall retain risk of loss and damage to any such Deliverables and
media and any software or other information fixed therein until acceptance of
the Software and other Deliverables by Company. Supplier agrees, for itself and
its affiliates, not to assert any patent or copyright owned or controlled by
Supplier or any affiliate thereof against Company, its affiliates and its and
their direct or indirect customers in connection with any of the Software or
other Deliverables or any other subject matter directly or indirectly containing
or derived from Work done under or in anticipation of this Agreement, unless
Company or its customers violate(s) the terms of the license or other
restrictions relating to the use, possession, disclosure or ownership of such
Software, Deliverables, or other subject matter.
COMPENSATION. In full compensation for the Work performed and any rights
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transferred, assigned or granted to Company under this Agreement and any and all
expenses Supplier might incur and for complying with all of the terms and
conditions contained in this Agreement, Company shall pay Supplier as provided
in the Authorization Letter.
INVOICING AND PAYMENT. Separate invoices shall be rendered in duplicate in
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accordance with milestone activities or as otherwise provided in the
Authorization Letter.
Invoices shall be sent in duplicate to the address set forth in the
Authorization Letter.
Company shall pay properly rendered invoices within thirty (30) days of
receipt thereof.
NOTICES. Any notice or demand which under the terms of this Agreement or under
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any statute must or may be given or made by Supplier or Company shall be in
writing and shall be given or made by telegram, tested telex, confirmed
facsimile, or similar communication or by certified or registered mail addressed
to the respective parties as follows:
To Company: American Telephone and Telegraph Company
X.X. Xxx 0000 (101 XXX Xxxxxxx)
Xxxxx Xxxx, XX 00000-0000
Attn: Purchasing Manager
Technical Services/Projects
To Supplier: Evolving Systems, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
with a copy to:
Evolving Systems, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Such notice or demand shall be deemed to have been given or made when sent by
telegram, telex, of facsimile, or other communications or when deposited,
postage prepaid in the U.S. mail.
The above addresses may be charged at any time by giving prior
written notice as above provided.
TERM. The term of this Agreement shall be five (5) years from the effective
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date unless earlier terminated pursuant to this Agreement. Company may extend
such term for successive one (1) year periods by providing written notice to
Supplier at least thirty (30) days' prior to the expiration of the initial five
(5) year term or any one (1) year renewal thereof. No termination of this
Agreement shall effect the performance of either party under an Authorization
Letter unless the Authorization Letter is terminated in accordance with the
provisions of the Authorization Letter.
THE DOCUMENTS FORMING THIS AGREEMENT. This Agreement consists of the following:
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A. This SECTION I, attached hereto and made a part of this Agreement.
B. SECTION II, "General Provisions of a Software Development Contract",
attached hereto and made a part of this Agreement.
C. Authorization Letters which will be issued from time to time.
If any provision in Section II is inconsistent with any provision of SECTION I
of this Agreement, SECTION I shall govern. If any provision of an Authorization
Letter is inconsistent with Sections I or II, the Authorization Letter shall
govern.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which is
effective as of the day and year first above written.
EVOLVING SYSTEMS, INC. AMERICAN TELEPHONE AND
TELEGRAPH COMPANY
By:_____________________ By:_______________________
Name:___________________ Name:_____________________
Title:__________________ Title:____________________
Date:___________________ Date:_____________________
GENERAL PROVISIONS OF A SOFTWARE DEVELOPMENT CONTRACT
SECTION II
ACCEPTANCE
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A. Company shall evaluate the Software and each other Deliverable (individually
and collectively referred to in this clause as "Deliverable") furnished under an
Authorization Letter for compliance with the Specifications and shall submit a
written acceptance or rejection to Supplier within thirty (30) days after the
receipt by Company of the complete Deliverable associated with each task.
Company shall have the right to extend said period in writing if necessary.
Such written acceptance or rejection shall be made only by Company's Technical
Representative. A rejection shall state in detail which Specifications have not
been met by the Deliverable and how the Deliverable fails to meet the
Specifications. In no event shall early turnover of the Deliverable by Supplier
to Company constitute acceptance of such Deliverable by Company. Company shall
have the right to accept portions of the Software or of any other Deliverable.
Company's acceptance of the Software or of any other Deliverable or any portion
thereof shall occur only upon a formal written acceptance sent by the
aforementioned Company Representative or upon payment of the invoice associated
with the Deliverable or Software as detailed in the Authorization Letter.
B. If a Deliverable evaluated pursuant to paragraph A of this clause is
rejected, Supplier agrees to correct, at its expense, each error leading to such
rejection and resubmit the corrected Deliverable to Company within fifteen (15)
days after receipt of notice from Company of such error. Company shall have
thirty (30) days after the resubmitting of such corrected Deliverable to accept
or reject such Deliverable in the same manner as provided in paragraph A above.
If the corrected Deliverable complies with the Specifications, Supplier shall
incorporate the corrections in the Deliverables.
C. If the errors in a rejected Deliverable are not corrected within the fifteen
(15)-day period specified n paragraph B of this clause or if a resubmitted
Deliverable rested or re-evaluated by Company during the thirty (30) day re-
evaluation period is again rejected, then Company may, at it is option: (1)
retain the Deliverable at an equitable adjustment in price as may be agreed by
the parties, in which case that Deliverable shall be deemed accepted; (2) afford
Supplier one or more correction extensions for a period or periods to be
specified by Company without prejudice to Company's rights to thereafter
exercise its option under either clause (1) or (3) of this paragraph without
further notice to Supplier, if the errors have not been corrected; or (3) if the
defect is material in nature, terminate the Authorization Letter and pay all
expenses incurred by Supplier up to the termination date of the Authorization
Letter. If option (3) is exercised, Company shall have no further obligation to
Supplier under the Authorization Letter.
AFFILIATED COMPANY. An affiliated corporation, partnership or venture
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("affiliate") is an entity that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the entity specified.
ARBITRATION. Should any dispute arise under this Agreement or under an
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Authorization Letter, such matters shall be determined by arbitration in the
following manner: Upon written request from either party to the other that such
dispute be referred to arbitration, the parties shall endeavor to select an
arbitrator within ten (10) days of such request. If no selection is made within
that period, immediately thereafter the parties shall jointly request the
American Arbitration Association to designate an arbitrator. The parties agree
to abide by such rules respecting the time, place and frequency of arbitration
meetings, and the procedure governing the presentation and hearing of the
disputed matter, as shall be adopted by the arbitrator. The direct expenses of
the arbitration, including the compensation and expenses of the arbitrator and
fees of the Association, but not including the parties' expenses or the expenses
of the parties' witnesses, shall be borne equally between the parties. The
decision of the arbitrator shall be final and the parties agree to abide by such
decision.
ASSIGNMENT BY COMPANY. Company shall have the right to assign this Agreement
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and to assign its rights and delegate its duties under this Agreement either in
whole or in part ("assignment"), at any time and without Supplier's consent, to
any of its present or future affiliated companies, or to any combination of the
foregoing. Company shall give Supplier written notice of any assignment. Upon
acceptance of the assignment and assumption of the duties under this Agreement
by assignee, Company shall be released and discharged, to the extent of the
assignment, from all further duties under this Agreement as to material so
assigned, provided that the assignee maintains a net worth at least equal to the
value of the Services to be provided under any uncompleted Authorization
Letters. If Company requests that Supplier waive the net worth condition set
forth in the preceding sentence, Supplier shall not unreasonably deny such
request.
ASSIGNMENT BY SUPPLIER. Supplier shall not assign any right or interest under
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this Agreement (excepting monies due or to become due) or delegate or
subcontract any Work or other obligation to be performed or owed under this
Agreement without prior written consent of Company. Any attempted assignment or
delegation in contravention of the above provisions shall be void and
ineffective. Any assignment of monies shall be void and ineffective to the
extent that (1) Supplier shall not have given Company at least thirty (30) days
prior written notice of such assignment and (2) such assignment attempts to
impose upon Company obligations to the assignee additional to the payment of
such monies, or to preclude Company from dealing solely and directly with the
Supplier in all matters pertaining to this Agreement including the negotiation
of amendments or settlements of charges due. All Work performed by Supplier's
subcontractor(s) at any tier shall be deemed Work performed by Supplier.
Supplier may assign or otherwise transfer its rights under this Agreement
to a party or a successor in interest by merger, by operation of law, or by the
acquisition of capital stock, or to a party acquiring substantially all of the
business of Supplier, provided that the transferee shall have a net worth after
such transaction at least as large as the net worth of Supplier at the time this
Agreement was executed. Supplier shall provide Company with prior written
notice of Supplier's assignment or transfer under the preceding sentence.
Notwithstanding the above provisions, Supplier shall not assign or transfer its
rights under this Agreement to any company which competes in a business in which
the Company's Network Wireless Systems Business Unit is engaged as of the date
of this Agreement without Company's prior written consent (which consent shall
not be unreasonably withheld).
AUDIT. Supplier shall maintain accurate and complete records of all hours of
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direct labor employees engaged in work for which payment under this Agreement is
to be computed on the basis of actual time worked, at a fixed rate per unit of
time and all other costs, if any, payable by Company under this Agreement. Such
records shall be maintained in accordance with recognized commercial accounting
practices so they may be readily audited. Supplier shall permit Company to
examine and audit these records and all supporting records at all reasonable
times. All payments, if any, made under this Agreement by Company shall be
subject to final adjustments as determined by such audit(s). Supplier shall
retain all such records for a period not less than one (1) calendar year after
completion of this Agreement.
CHANGES. Company may at any time during the progress of the Work require
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additions to or alterations of or deductions or deviations (all hereinafter
referred to as a "Change") from the Work called for under an Authorization
Letter, subject to the terms of the applicable Authorization Letter. Except as
provided for in the Authorization Letter, no Change shall be considered as
additions to or deductions from the Work called for under the Authorization
Letter, nor shall Supplier be entitled to any compensation for work done
pursuant to, or in contemplation of, a Change, unless made pursuant to a written
Change Order issued by Company and executed by both parties. Supplier shall be
paid for any work performed in preparing a Change at Company's request.
CHOICE OF LAW. The construction, interpretation and performance of this
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Agreement and all transactions under it shall be governed by the laws of the
state of New Jersey, excluding its choice of laws rules and excluding the
Convention of the International Sales of Goods. Supplier agrees to submit to
the jurisdiction of any court wherein an action is commenced against Company
based on a claim for which Supplier has agreed to indemnify Company under this
Agreement.
COMPLIANCE WITH LAWS. Supplier and all persons furnished by Supplier shall
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comply at their own expense with all applicable federal, state, local and
foreign laws, ordinances, regulations and codes, including the identification
and procurement of required permits, certificates, licenses, insurance,
approvals and inspections in performance under this Agreement. Supplier agrees
to indemnify Company and its customers for any loss or damage that may be
sustained by reason of any failure to do so.
CONTINUING SUPPORT. Supplier shall provide the support and maintenance in
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connection with Services as set forth in the Authorization Letter for the
Services. Supplier represents that any personnel it supplies to assist Company
shall be fully qualified to provide the necessary assistance.
ENTIRE AGREEMENT. This Agreement shall incorporate the typed or written
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provisions on Company's orders issued pursuant to this Agreement and shall
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and the order(s) and shall not be modified or
rescinded, except by a writing signed by Supplier and Company. All references
in these terms and conditions to this Agreement or to Work services, material,
equipment, products Software or information furnished under, in performance of,
pursuant to, or in contemplation of, this Agreement shall also apply to any
orders pursuant to this Agreement. Printed provisions on the reverse side of
Company's orders and all provisions on Supplier's forms shall be deemed deleted.
Additional or different terms inserted in this Agreement by either party, or
deletions thereto, whether by alternations, addenda, or otherwise shall be in
force and effect unless expressly consented to by both parties in writing.
Estimates or forecasts furnished by Company shall not constitute commitments.
The provisions of this Agreement and of the Authorization Letters issued
hereunder supersede all contemporaneous oral agreements and all prior oral and
written quotations, communications, agreements, and understandings of the
parties with respect to the subject matter of this Agreement and such
Authorization Letters.
EXPORT CONTROL. In addition to Supplier's obligation under the USE OF
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INFORMATION CLAUSE or any restrictive legends, both parties assure each other
that it does not intend to and will not knowingly, without prior written consent
of the Office of Export Licensing of the United States Department of Commence,
P. O. Xxx 000, Xxxxxxxxxx, XX 00000, transmit directly or indirectly:
(1) Any technical data, including software, furnished by either party;
(2) Any immediate product (including processes, materials, and services)
produced directly by the use of the technical data furnished by either
party; or
(3) Any commodity produced by such immediate product if the immediate product
of the technical information or software furnished by either party is a
plant capable of producing a commodity or is a major component of such
plant;
to Afghanistan, the People's Republic of China or to any Group Q, S, W, Y or Z
country as listed in Supplement No. 1 to Part 770 of the Export Administration
Regulations issued by the U. S. Department of Commerce. Upon request, Company
will furnish Supplier a copy of the current Supplement. Both parties agree to
promptly inform the other in writing of any such written consent issued by the
Office of Export Licensing. Both parties assure the other that it will not
transmit directly or indirectly, any information or software furnished hereunder
or any portion thereof without the prior written consent of the other to any of
the above-mentioned countries.
FORCE MAJEURE. Neither party shall be held responsible for any delay or failure
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in performance of any part of this Agreement or an Authorization Letter to the
extent such delay or failure is caused by fire, flood, explosion, war, strike,
embargo, government requirement, civil or military authority, act of God, act or
omission of carriers or other similar causes beyond its control and without the
fault or negligence of the delayed or nonperforming party or its subcontractors
("force majeure conditions"). Notwithstanding the foregoing, Supplier's
liability for loss or damage to Company's material in Supplier's possession or
control shall not be modified by this clause. If any force majeure condition
occurs, the party delayed or unable to perform shall give immediate notice to
the other party, stating the nature of the force majeure condition and any
action being taken to avoid or minimize its effect, and the party affected by
the other's delay or inability
to perform may elect to: (1) suspend this Agreement or an Authorization Letter
for the duration of the force majeure condition and (i) at its option buy, sell,
obtain or furnish elsewhere material or services to be bought, sold, obtained or
furnished under this Agreement or an Authorization Letter (unless such sale or
furnishing is prohibited under this Agreement) and deduct from any commitment
the quantity bought, sold, obtained or furnished or for which commitments have
been made elsewhere and (ii) once the force majeure condition ceases, resume
performance under this Agreement or an Authorization Letter with an option in
the affected party to extend the period of this Agreement or an Authorization
Letter up to the length of time the force majeure condition endured; and/or (2)
when the delay or nonperformance continues for a period of at least fifteen (15)
days, terminate, at no charge, this Agreement or an Authorization Letter or the
part of it relating to material not already shipped and services not already
performed. Unless written notice is given within forty-five (45) days after the
affected party is notified of the force majeure condition, (1) shall be deemed
selected.
IDENTIFICATION. Without Company's written consent, Supplier shall make no use
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of any identification of Company or Company's affiliated companies in its
advertising or promotional efforts in reference to activities undertaken by
Supplier under this Agreement without Company's prior written consent. The term
"identification" includes any trade name, trademark, service xxxx, insignia,
symbol, or any simulation thereof, and any code, drawing, specification, or
evidence of Company's inspection. Supplier agrees to remove any such
identification prior to any sale, use disposition of material or equipment
rejected or not purchased by Company, and shall indemnify Company and its
affiliated companies against any claim arising out of Supplier's failure to do
so. Nothing in this Agreement shall require Supplier to obtain prior approval
to state in a presentation or a proposal that company is a customer of Supplier
and, once Supplier and Company's relationship with respect thereto has been
announced, that Supplier is performing or has performed the projects specified
in Authorization Letters. This clause does not modify the USE OF INFORMATION
clause. With respect to matters requiring Company's consent, Company agrees to
respond promptly to Supplier's request for consent (usually within ten (10)
days) and shall not deny unreasonably such requests.
INDENTIFICATION CREDENTIALS. Company may, at its discretion, require Supplier's
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employees to exhibit identification credentials, which Company may issue, in
order to gain access to Company's premises for performance of the work. If, for
any reason, any of Supplier's employees are no longer performing Work, Supplier
shall immediately inform Company's Representative in the speediest manner
possible. Notification shall be followed by prompt delivery to Company's
Representative in the speediest manner possible. Notification shall be followed
by prompt delivery to Company's Representative of the identification credentials
involved or a written statement of the reasons why the identification
credentials cannot be returned. Supplier shall be liable for any damage or loss
sustained by Company if such identification credentials are not returned to
Company.
IMPLEADER. Supplier shall not implead or bring an action against Company or its
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customers or the employees of either based on any claim by any person for
personal injury or death that occurs in the course or scope of employment of
such person by Company or its customers and that arises out of material or
services furnished by Supplier under this Agreement.
INDEMNITY. All persons furnished by Supplier shall be considered solely
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Supplier's employees or agents or subcontractors. Supplier shall be responsible
for payment of all unemployment, social security and other payroll taxes for its
employees, including contributions when required by law. Supplier agrees to
indemnify and save harmless company, its affiliates and its customers and their
officers, directors, employees, successors and assigns (all hereinafter referred
to in this clause as "Company") from and against any losses, damages, claims,
demands, suits, liabilities and expenses (including attorneys' fees) that arise
out of or result from: (1) injuries or death to persons or damage to property,
including theft, caused or alleged to have been caused by the performance of the
Work or services performed by Supplier or persons furnished by Supplier; (2)
assertions under Workers' Compensation or similar acts made by persons furnished
by Supplier or by any subcontractor, or by reason of any injuries to such
persons for which Company would be responsible under Worker's Compensation or
similar acts if the persons were employed by Company; (3) any failure on the
part of the Supplier to satisfy all claims for labor, equipment, materials, and
other obligations relating directly or indirectly to the performance of the
Work; or (4) any failure by Supplier to perform Supplier's obligations under
this clause of the INSURANCE clause. Supplier agrees to defend Company, at
Company's request, against any such claim, demand or suit. Company agrees to
notify
Supplier within a reasonable time of any written claims or demands against
Company for which Supplier is responsible under this clause.
INFRINGEMENT. The following terms apply to any infringement, or claim of
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infringement, of any patent, trademark, copyright, trade secret or other
proprietary interest based on the manufacture, installation, normal use, lease,
license or sale of any equipment, software, documentation, service or material
("material") furnished to Company by Supplier under this Agreement or an
Authorization Letter or in contemplation of this Agreement or an Authorization
Letter. Supplier shall indemnify Company and its customers for any loss,
damage, expense or liability that may result by reason of any such infringement
or claim except to the extent such infringement or claim (a) arises from
Supplier's adherence to Company's written instructions or directions which
involve the use of material other than (1) commercial material which is
available on the open market or is the same as such material, or (2) material of
Supplier origin, design or selection, or (b) arises from the combination of
materials supplied by Supplier with materials provided by Company or any other
source not obtained by Supplier, or (c) arises from the modification(s) by
Company or its customers of any materials provided by Supplier, or (d) arises
from the failure of Company or its customers to use any materials or information
in accordance with the terms of a license or other restrictions applicable to
the materials or information; and Company shall so indemnify Supplier in such
excepted cases. Each party shall defend or settle, at its own expense, any
action or suit against the other for which it is responsible under this clause.
Each party shall notify the other promptly of any claim of infringement for
which the other is responsible, and shall cooperate with the other in every
reasonable way to facilitate the defense of any such claim.
If Company's or its customer's use of the material shall be prevented by
injunction or court order because of any infringement for which Supplier is
liable hereunder, Supplier shall at no expense, loss or damage to Company and
its customers (1) replace such material with equally suitable material free of
infringement, or (2) modify such material so that it will be free of
infringement and substantially no less capable than the material originally
furnished, or (3) by license or other release from claim of infringement procure
for Company's and its customers' benefit the right to use such material, or (4)
after Supplier has demonstrated to Company its good faith to achieve the
foregoing without success, accept the return of the material from Company and
its customers, refund the Company any charges paid therefor, less a reasonable
amount for use, and restore the premises and associated equipment as nearly to
their original condition as is reasonably possible.
INSPECTION. Company's Representatives shall at reasonable and with appropriate
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notice have access to the Work for the purpose of inspection and Supplier shall
provide safe and proper facilities for such inspection.
INSURANCE. Supplier shall maintain and cause Supplier's subcontractors to
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maintain during the term of this Agreement: (1) Workers Compensation insurance
as prescribed by the law of the state or nation in which the Work is performed;
(2) employer's liability insurance with limits of at least $300,000 each
occurrence; (3) hired and non-owned automobile liability insurance if the use of
motor vehicles is required, with limits of at least $1,000,000 combined single
limit for bodily injury and property damage for each occurrence; and (4)
Comprehensive General Liability ("CGL") insurance, including Contractual
Liability and Broad Form Property damage, with limits of at least $5,000,000
combined single limit for personal injury and property damage for each
occurrence. All CGL insurance shall designate company, its affiliates and their
officers, directors, and employees as an additional insured. Any portion of the
insurance coverage hereunder may be maintained by Supplier under an umbrella
policy.
Supplier agrees that Supplier, Supplier's insurer(s) and anyone claiming
by, through, under, or in Supplier's behalf shall have no claim, right of action
or right of subrogation against Company and its customers based on any loss or
liability insured against under the foregoing insurance. Supplier and
Supplier's subcontractors shall furnish within ten (10) days after execution of
this Agreement, certificates or adequate proof of the foregoing insurance,
including, if specifically requested by Company, a provision stating that
Company shall be notified in writing at least thirty (30) days prior to
cancellation of or any change in the policy.
LIMIT OF EXPENDITURE. See Work Authorization Letter, if applicable.
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LIMITATION OF LIABILITY. The monetary liability of Supplier to Company under
-----------------------
this Agreement, whether for negligence, infringement, indemnification, breach of
warranty, or for any default whatsoever (excluding defaults for payment of
amounts due to Company under this Agreement or any Authorization Letter), for
all claims, losses, demands, damages, suits and liabilities (including costs,
expenses and reasonable attorney's fees of Supplier or reimbursed by Supplier)
relating or arising from this Agreement or any Authorization Letter (hereinafter
referred to as "claims"), shall be limited to (i) the amount of insurance
covering the claim if the claim is covered under the insurance Supplier itself
is required to maintain under "Insurance" above, and (ii) if the claim is not
covered under the insurance Supplier itself is required to maintain under
"Insurance" above, $1,000,000. The monetary liability of Company to Supplier
under this Agreement, whether for negligence, infringement, indemnification, or
for any default whatsoever (excluding defaults for payment of amounts due to
Supplier under this Agreement or any Authorization Letter), for all claims
(including costs, expenses and reasonable attorney's fees of company or
reimbursed by Company) relating or arising from this Agreement or any
Authorization Letter shall be limited to $5,000,000. The limitations set forth
in the preceding sentences are hereinafter referred to as the "Liability Cap."
A Liability Cap shall apply to each Authorization Letter. The existence of more
than one claim or suit arising under an Authorization Letter shall not enlarge
or extend the limit of the Liability Cap for that Authorization Letter. Each
party hereby releases the other party from all claims in excess of the Liability
Cap, subject to the stated exceptions herein. The parties acknowledge that the
other parts of this Agreement rely upon the inclusion of this liability
limitation in this Agreement.
Notwithstanding the foregoing, the parties expressly agree that the
liability of a party to the other party for the intentional failure to maintain
the confidentiality of such other party's confidential information or
intellectual property as required under this Agreement or an Authorization
Letter, or for the intentional failure to limit the use of confidential
information or intellectual property as required under this Agreement or an
Authorization Letter, shall not be limited by the Liability Cap. Furthermore,
the parties agree that nothing in this clause shall be deemed to excuse or
otherwise limit (i) a party's non-monetary duties under any express provision of
this Agreement or an Authorization Letter, including, but not limited to,
Supplier's and Company's non-monetary duties under "INDEMNIFICATION" and
"INFRINGEMENT" above, and (ii) the express payment provisions of any
Authorization Letter. For purposes of (i) above, the parties expressly agree
that Supplier's obligations under the second paragraph of "INFRINGEMENT" above
shall be deemed to be non-monetary duties.
Unless expressly provided to the contrary in an Authorization Letter,
Supplier's sole liability for any deficiency in the Work provided under this
Agreement or under an Authorization Letter shall be the correction of defects
under the warranty provided in the subsection titled "Warranty" in this
Agreement, but nothing herein shall be deemed to bar any claim for damages or
losses to a party's tangible property resulting from the negligence of the other
party (subject to the terms of the Liability Cap).
SUBJECT ONLY TO THE LIMITATIONS BELOW, IN NO EVENT SHALL EITHER PARTY BE
LIABLE UNDER THIS AGREEMENT OR ANY AUTHORIZATION LETTER FOR ANY INDIRECT,
CONSEQUENTIAL OR INCIDENTAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR
LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION OR LOSS OF BUSINESS INFORMATION)
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
The limitation of liability in the immediately preceding paragraph is
subject to the following exceptions: (1) Such limitation shall not apply to
damages or losses to a party's tangible property resulting from the negligence
of the other party, and (2) Such limitation shall not apply to third party
claims for which Supplier would be responsible under "INDEMNIFICATION" above or
to claims for which Supplier or Company would be responsible under
"INFRINGEMENT" above, and such limitation shall not be deemed to excuse or
otherwise limit (i) a party's non-monetary duties under any express provision of
this Agreement or an Authorization Letter, including, but not limited to, the
parties' non-monetary duties under `INDEMNIFICATION" and `INFRINGEMENT" above,
and (ii) the express payment provisions of any Authorization Letter. For
purposes of (i) above, the parties expressly agree that Supplier's obligations
under the second paragraph of "INFRINGEMENT" above shall be deemed to be non
monetary duties. However, all
claims falling under (1) or (2) above shall be subject to the Liability Cap for
Supplier stated above (subject to the applicable exceptions).
This clause is intended to establish the maximum monetary liability of the
parties under this Agreement and the Authorization Letters issued hereunder.
Nothing herein shall prevent the parties from establishing lower liability
limits and/or from limiting the remedies available to either party in an
Authorization Letter. In such event, the liability limits and limited remedies
provided in the Authorization Letter shall prevail.
MAINTENANCE. Subject to the terms of the Authorization Letter, Supplier agrees
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to promptly provide Company at the cost set forth in the applicable
Authorization Letter with (1) any modifications, in object and source code form,
to the Pre-existing Software made by Supplier where such modifications have been
announced by Supplier to be generally available and (2) any such modifications,
in object and source code form, made by Supplier to the Developed Software.
Supplier makes no warranty that such modifications will integrate or function
with other software used by Company or its customers. Supplier agrees to
undertake any integration and testing required for such modifications at its
standard rates then in effect, plus actual expenses. Company may discontinue
purchasing maintenance of the Software at any time.
As used in this clause, the term "modifications" or "maintenance" shall
include updates, enhancements and new releases. Supplier agrees to notify
Company of the pending availability of all Pre-existing Software modifications
as soon as the modifications are ready for distribution. Supplier shall
promptly provide to Company any revisions to the associated documentation to
reflect the modifications purchased by Company. All such modifications shall be
considered Software subject to the ownership provisions in the appropriate
Authorization Letter. Company may incorporate the modifications into the
Software in its possession or continue using previous versions of the Software
at Company's option. Supplier agrees to provide, at Company's request,
maintenance for at lease two (2) previous releases of the Software, provided
such releases are in active use by Company or its customers.
MARKETING. See Authorization Letter, if applicable.
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NO LIENS. The Work shall be delivered free from all claims, liens and charges
--------
of third parties whatsoever. Company reserves the right to require, before
making payment, proof that all third parties furnishing labor and materials for
the Work have been paid.
NONEXCLUSIVE MARKET RIGHTS. It is expressly understood and agreed that, except
--------------------------
as provided for in this Agreement, this Agreement does not grant to Supplier any
exclusive privileges or rights and Company may contract with other manufacturers
and suppliers for the procurement of comparable materials, products and
services.
RELEASES VOID. Neither party shall require (1) waivers or releases of any
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personal rights or (2) execution of documents which conflict with the terms of
this Agreement, from employees, representatives or customers of the other in
connection with visits to its premises and both parties agree that no such
releases, waivers or documents shall be pleaded by them or third persons in any
action or proceeding.
REPRESENTATIONS. Supplier represents to Company and its customers that the Work
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will be performed in a workerlike manner in accordance with professional
standards in the field and subject to the acceptance criteria established in
this Agreement or the Authorization Letter.
RIGHT OF ENTRY AND PLANT RULES. Each party shall have the right to enter the
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premises of the other party during normal business hours with respect to the
performance of this Agreement, subject to all plant rules and regulations,
security regulations and procedures and U. S. Government clearance requirements
if applicable. Company is not responsible for the safekeeping of Supplier's
property on Company premises.
SHIPPING. Supplier shall, at its expense: (a) ship the material to the site
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designated in the Authorization Letter by the date set forth in the
Authorization Letter in accordance with specific shipping instructions; (b)
place the number of this Agreement on all subordinate documents; (c) enclose a
packing memorandum with
each shipment, and when more than one (1) package is shipped, identify the one
containing the memorandum; and (d) xxxx the number on all packages and shipping
papers. Adequate protective packing shall be furnished at no additional charge.
SUPPLIER EMPLOYEES. The term Supplier employee means anyone performing the Work
------------------
furnished by Supplier under this Agreement, including but not limited to the
Supplier's employees, consultants, representatives, agents, subcontractors and
subcontractors' subcontractors at all tiers. It is agreed that all persons
provided by Supplier to perform the Work are not employees or agents of Company,
and Company shall not exercise any direct control or supervision over Supplier
employees but Company's Representative will be available for consultation.
Supplier shall be responsible for its own labor relations with any trade or
union which represents its employees and shall be responsible for negotiating
and adjusting all disputes. Supplier shall be the sole entity responsible for
receiving complaints from Supplier employees of the termination or change of
their assignments.
Whenever the Supplier has knowledge that any actual or potential labor
dispute is delaying or threatens to delay the timely performance of this
Agreement, the Supplier shall immediately give notice thereof, including all
relevant information with respect thereto, to the Company's Purchasing
Representative.
Company has the right at any time for reasonable cause (prior to and after
assignment to Company's Work) to reject or have Supplier remove Supplier's
employee(s) from the Work under this Agreement upon notice to Supplier. Upon
such notice, Supplier shall, at company's request, replace the Supplier
employee(s). In the event of any staffing change, the Company shall not be
charged for the time required to train the replacement. The amount of
noncompensatory training time, if any, shall be mutually determined by Supplier
and Company's Representative.
Supplier further agrees that any of Supplier employees, who are or become a
"leased employee"(as define in Section 414(n) of the Internal Revenue Code) of
Company during the term of this Agreement, shall not be covered by, and shall be
excluded from participation in, any employee benefit plan maintained by Company.
Supplier shall indemnify and save Company harmless from and against any losses,
damages, claims, demands, suits and liabilities that arise out of, or result
from, any failure by Supplier to perform its obligations under this clause.
Supplier shall also indemnify and save Company harmless from entitlement,
assertion or claim, which any of Supplier employee might have or might make
relative to rights or privileges in any Company employee benefit plan and which
arises, in whole or in part, out of Work rendered under this Agreement.
SUPPLIER'S INFORMATION. Except for information owned by Company, the Pre-
----------------------
existing Software, and information identified as confidential or proprietary by
Supplier, no specifications, drawings, sketches, models, samples, tools,
computer or other apparatus programs, technical or business information or data,
written, oral or otherwise, furnished by Supplier to Company under this
Agreement, or in contemplation of this Agreement, shall be considered by
Supplier to be confidential and proprietary. This does not alter or affect
Supplier's continuing obligations regarding Software or other Deliverables
exclusively licensed to Company under this Agreement.
SURVIVAL OF OBLIGATIONS. The obligations of the parties under this Agreement or
-----------------------
under an Authorization Letter, which by their nature would continue beyond
termination, cancellation or expiration of this Agreement or the applicable
Authorization Letter, including, by the way of illustration only and not
limitation, those in the clauses COMPLIANCE WITH LAWS, IDENTIFICATION,
IMPLEADER, INFRINGEMENT, LIMITATION OF LIABILITY, RELEASES VOID, SOFTWARE TITLE
AND RIGHTS, SUPPLIER EMPLOYEES, USE OF INFORMATION AND WARRANTY (and INSURANCE
and INDEMNITY in included in this Agreement), shall survive termination,
cancellation or expiration of this Agreement. In addition, the parties'
obligations to maintain the confidentiality of any information shall survive the
termination of this Agreement.
TAXES. Company shall reimburse Supplier only for the following tax payments
-----
with respect to transactions under this Agreement unless Company advises
Supplier that an exemption applies: state and local sales and use taxes,
privilege and property taxes, any other taxes or amounts levied in lieu of any
of the foregoing, or any other taxes or charges based on use by Company or its
customers of any Software or other Deliverables, but in all events excluding any
tax based on Supplier's net income, as applicable. Taxes payable by Company
shall be billed as separate items on Supplier's invoices and shall not be
included in Supplier's prices. Company shall have the right to have Supplier
contest any such taxes that Company deems improperly levied at Company's expense
and subject to Company's direction and control.
TERMINATION. Company may at any time terminate this Agreement by written notice
-----------
to Supplier, subject to the provisions of the clause TERM above. An
Authorization Letter may be terminated in accordance with the provisions of the
Authorization Letter.
TIMELY PERFORMANCE. If Supplier has knowledge that anything prevents or
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threatens to prevent the timely performance of the Work under this Agreement,
Supplier shall immediately notify Company's Representative thereof and include
all relevant information concerning the delay or potential delay.
TOOLS AND EQUIPMENT. Unless otherwise specifically provided in an Authorization
-------------------
Letter, Supplier shall provide all labor, tools, software programs, materials
and equipment (the "tools") for performance of this Agreement. Should Supplier
actually use tools owned, rented or licensed by Company, Supplier acknowledges
that Supplier accepts the tools "as is where is", that Company has no
responsibility for the condition or state of repair of the tools and that
Supplier shall have risk of loss and damage to such tools incurred after
delivery of them to Supplier. Unless otherwise specifically provided in this
Agreement or authorized in writing by Company's Representative, Supplier agrees
not to remove tools from Company premises and Supplier agrees to use the tools
only in the performance of this Agreement.
Supplier agrees to return the tools to Company upon completion of use, or
at such earlier time as Company may request, in the same condition as when
received by Supplier, reasonable wear and tear excepted.
USE OF INFORMATION. Any specifications, drawings, sketches, models, samples,
------------------
tools, computer or other apparatus programs, technical or business information
or data, written, oral or otherwise, owned or controlled by Company
("Information") and furnished to Supplier under this Agreement or order, or in
contemplation of this Agreement or order, shall remain Company's property. All
copies of such Information in written, graphic or other tangible form shall be
returned to Company at its request if no longer needed by Supplier for work
under an Authorization Letter. Unless such Information was previously known to
Supplier free of any obligation to keep it confidential, or has been or is
subsequently made public by Company or a third party, it shall be kept
confidential by Supplier, shall be used only in filling of orders or in
performing under this Agreement or order, and may not be used for other purposes
except upon such terms as may be agreed upon between Supplier and Company in
writing.
WAIVER. The failure of either party at any time to enforce any right or remedy
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available to it under this Agreement or otherwise with respect to any breach or
failure by the other party shall not be construed to be a waiver of such right
or remedy with respect to any other breach or failure by the other party.
WARRANTY. Supplier shall provide such warranties for the repair of errors or
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defects in the Work as may be provided in the Authorization Letter applicable to
such Work.
Supplier warrants that there are no copy protection or similar mechanisms
within the Software which, either now or in the future, will interfere with the
grants made in this Agreement. Supplier also warrants that Supplier shall not
install, either now or in the future, any malicious code, program, or other
internal component (e.g. software virus, software worm, software time bomb or
similar component), which is designed to damage, destroy, or alter software,
firmware, or hardware or which is designed, in any manner, reveal, damage,
destroy, or alter any data or other information accessed through or processed by
the Software in any manner or which is designed to adversely affect the
operation of a computer or its memory. Supplier shall immediately advise
Company, in writing, upon reasonable suspicion or actual knowledge that
the Software provided under this Agreement may result in the harm described
above. Supplier shall indemnify and hold Company and its customers harmless from
any damage resulting from Supplier's failure to comply with this paragraph.
All warranties shall survive inspection, acceptance and payment.
EXCEPT AS EXPRESSLY SET FORTH IN THIS SUBSECTION TITLED "WARRANTY",
SUPPLIER DISCLAIMS ALL WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
WORK DONE BY OTHERS. If any part of the Work is dependent upon work done by a
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subcontractor or supplier of Supplier, Supplier shall inspect and promptly
report to Company's Representative any defect that renders such other work
unsuitable for Supplier's proper performance. Supplier's silence shall
constitute approval of such work done by other as fit, proper and suitable for
Supplier's performance of the Work.
