EXHIBIT 10.5
7X24 AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 26th day of June, 2001,
between UNITED PARCEL SERVICE GENERAL SERVICES CO., including its parent company
and any now-existing or future direct or indirect subsidiaries of such parent
company and any authorized agents of such parent (collectively, "UPS") having
offices at 00 Xxxxxxxx Xxxxxxx, Xxxxxxx, XX, 00000, and VISaer, Inc., a Delaware
Corporation, having offices at 000 Xxxxxxx Xx., Xxxxxxxxxx, XX 00000
("Company").
WHEREAS, Company is the sole owner of, or has the right to sublicense, its
proprietary software product known as the VISaer System, including source code,
object code (referenced below), Company provided databases, related
documentation and any enhancements, modifications and upgraded versions, data
and information, (collectively the "Licensed Software"), which UPS wishes to
license from Company in order to enhance its maintenance systems; and
WHEREAS, UPS desires Company to provide consulting services ("Consulting
Services") to UPS in order for Company to make certain enhancements and
modifications to the Licensed Software (the Licensed Software modifications
funded by UPS to be hereinafter referred to as the "Jointly Owned Software") as
further described in Section 1 a.) to meet UPS's specific system requirements;
and
WHEREAS, Company desires to provide support services ("Support Services") to UPS
for the System, as that term is defined in this Agreement; and
WHEREAS, UPS desires that Company provide UPS with documentation for, and
training in the use and operation of the System (the "Operations Manual"); as
well as recommendations of Third Party Hardware (defined below) on which the
System will run; and
WHEREAS, UPS, on the basis of representations contained in Company's proposal
dated February 4, 2000, (the "Proposal") and in reliance upon Company's
expertise in analyzing, designing and providing software systems appropriate for
specific applications, desires to engage Company to provide the Licensed
Software, Consulting Services, Jointly Owned Software, Support Services and
Operations Manual, and Company desires to enter into this Agreement to provide
such goods and services, all in accordance with the terms and conditions set
forth in this Agreement; and
WHEREAS, in summary, UPS desires that Company develop and deliver to UPS a
customized system conforming to UPS's requirements as stated in RFP 99-9573,
attached hereto as Exhibit "A" (the "Requirements) and any Design Document,
developed pursuant to this Agreement, which is attached hereto as Exhibit "B"
(the "Design Document") which shall include all necessary Licensed Software,
Jointly Owned Software, Third Party Software (defined below) and Third Party
Hardware, (all of the foregoing being collectively referred to as the "System").
If there are any inconsistencies among any document relating to this project,
including this Agreement and the Requirements, the Requirements will prevail.
NOW, THEREFORE, for good and valuable mutual consideration and the foregoing
recitals, the receipt and sufficiency of which are hereby acknowledged, UPS and
Company hereby agree as follows:
1. License Grant.
Except for the software developed pursuant to this Agreement i.e., the
Jointly Owned Software, which shall be owned jointly by UPS and Company, as
provided for in Section 1(a) below, and except for the Third Party Software, as
provided for in Section 1(b) below, Company hereby grants, and shall require
that any subcontractors grant, to UPS a direct, irrevocable, nonexclusive, fully
paid up, perpetual worldwide, subject to U.S. export laws, licenses to (i) make,
have made, (ii) use, reconstruct, repair, modify, (iii) prepare derivative
works, (iv) reproduce, publish, and distribute (for UPS's internal use only),
(v) and install the Licensed Software furnished hereunder, in
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object code form and source code together with the associated documentation,
including any and all updates to any of the foregoing. If UPS modifies the
Licensed Software through others, Company shall not be obligated to support the
Licensed Software, and UPS assumes full support responsibility therefore, unless
such modification was authorized in writing by Company.
a. JOINTLY OWNED SOFTWARE
The parties shall own jointly all work created by Company under the
terms of this Agreement pursuant to rendering to UPS Consulting
Services. Such work shall include computer programs, derivative works
developed from the Company's Property, as defined below, software
modifications and related documentation, whether patentable or
unpatentable, which are first conceived or made or first actually or
constructively reduced to practice during the term of this Agreement or
within six (6) months following the expiration or cancellation hereof,
whether preliminary or final, and on whatever media rendered
(collectively, the "Jointly Owned Software"). Such work shall not
include for (i) Company Property, (ii) Licensed Software documentation
and other VISaer intellectual property developed by Company before,
during and after this Agreement unless such intellectual property is
directly commissioned and paid for by UPS. Accordingly, each party
shall have an unrestricted, irrevocable, nonexclusive, worldwide, fully
paid up, perpetual license, with right to sublicense, in and to the
Jointly Owned Software and shall have the unlimited right to make, have
made, use, reconstruct, repair, modify, reproduce, publish, distribute,
and sell the Jointly Owned Software subject to the restrictions set
forth in this Section, in whole or in part, or combine the Jointly
Owned Software with another matter without any obligation to account to
the other party therefore, or not use the Jointly Owned Software at
all, as such party sees fit except that (i) UPS shall not use Jointly
Owned Software for the purposes of conducting a business consisting of
licensing software programs to third parties or of running a software
service bureau;(ii) notwithstanding the foregoing, UPS shall be
permitted to allow other airlines or maintenance providers to access
the System for the purposes of providing maintenance services and other
activities to such airlines or maintenance providers; and such
permitted access shall not constitute the running of a service bureau
by UPS; (iii) UPS shall be permitted to allow airlines or maintenance
providers to access the System for the purposes of providing
maintenance services and other activities to UPS and such permitted
accesse shall not constitute the running of a service bureau by UPS;
(iv) Company shall not use the Jointly Owned Software in any software
product sold or licensed to customers listed in Exhibit "C", (the
"Competitor List") and (v) Company must notify UPS of the sale of the
Company Product, defined in Exhibit "I", to any third party within
thirty (30) days from the date of sale and pay to UPS royalty fees
within sixty (60) days from the date such sale is recognized by Company
as revenue under U.S. GAAP and in accordance with the terms attached as
Exhibit "D" or as otherwise mutually agreed to by the parties in
writing. Company will provide to UPS a report of all sales on a
quarterly basis. Such report is to be utilized solely for tracking
royalties and will not be required after royalties paid exceed the cap
described in Exhibit "D". Prior to providing services under this
Agreement, Company shall identify to UPS in writing any technology,
information, computer programs, other documentation or intellectual
property owned by, or licensed to, Company prior to the commencement of
such services which will be useful or necessary to the Jointly Owned
Software (collectively, "Company Property"). UPS shall be permitted to
grant sublicenses to use the System to Third Parties, provided that UPS
or such Third Party pays to Company its license fees therefor then in
effect and such Third Parties agree to be bound by all of Company's
then current license terms and conditions.
b. THIRD PARTY SOFTWARE
Company shall secure, transfer to or administer for UPS, in UPS's name and at
UPS' option, any and all necessary sublicenses or direct licenses for all or any
portion of the System owned by third parties (the "Third Party Software"), that
may be identified as such in any System Deliverable, as defined in Section 8.1
of this Agreement. Company shall provide to UPS such Third Party Software with
such license agreements containing terms consistent with those set forth in
Section 1 of this Agreement as between UPS and Company. Company represents
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that all of the Third Party Software identified or referenced in the System
Deliverable are standard, commercially available products, and that the
associated licenses therefore are perpetual in duration. Should UPS desire to
obtain additional licenses or maintenance services for the Third Party Software,
Company shall use its best efforts to cause the suppliers of such Third Party
Software to grant licenses and/or provide maintenance services at the best
commercial rates available from such suppliers.
Notwithstanding the terms of the Third Party Software license agreements,
Company shall remain primarily liable to UPS for all of Company's obligations
under this Agreement. In addition, the terms in such Third Party Software
license agreements which may be inconsistent with the provisions of this
Agreement shall in no way limit Company's obligations hereunder. Accordingly,
such license agreements may not be used by Company to: (i) reduce or otherwise
limit any of the provisions of this Agreement; or (ii) relieve Company from any
of its obligations under this Agreement. Company warrants that all Third Party
licenses are standard and perpetual.
c. THIRD PARTY HARDWARE
Company represents that the Licensed Software and Jointly Owned Software will
operate on any and all equipment specified by Company for use in any portion or
all of the System that is sold by third parties ("Third Party Hardware") and
that is identified as such in any System Deliverable, as defined in Section 8.1
of this Agreement, and that such hardware is a standard, commercially available
product as long as the Third Party Hardware works according to the published
specifications. Company shall assist UPS in obtaining any configuration
information, operating manuals, instructions and associated documentation
pertaining to such Third Party Hardware. Should UPS desire to obtain additional
maintenance or support of Third Party Hardware, Company shall use its best
efforts to cause the suppliers of such Third Party Hardware to provide
maintenance or support services at the best commercial rates available from such
suppliers.
Notwithstanding the terms of the Third Party Hardware agreements, Company shall
remain primarily liable to UPS for all of Company's obligations under this
Agreement. In addition, the terms in such Third Party Hardware agreements which
may be inconsistent with the provisions of this Agreement shall in no way limit
Company's obligations hereunder. Accordingly, such agreements may not be used by
Company to: (i) reduce or otherwise limit any of the provisions of this
Agreement; or (ii) relieve Company from any of its obligations under this
Agreement.
2. COMMITMENT TO DEVELOP SYSTEM.
On the terms and conditions set forth herein, Company agrees to develop
for the benefit of, and deliver to, UPS a system capable of providing UPS with
the data processing services and capabilities described in the Requirements and
to provide the training, support services and Operations Manual necessary to
enable UPS employees to effectively use the System with a reasonable amount of
instruction.
3. SYSTEM PARAMETERS AND COMPANY RESPONSIBILITY.
3.1 System Timetable and System Deliverables.
In order to facilitate completion of the System on a timely basis, a
timetable (the "System Timetable") has been established and is attached hereto
as Exhibit "E". The System Timetable sets forth the System Deliverables, defined
in Section 8.1 of this Agreement, which must be completed by Company as part of
its obligations with respect to the System development. Certain System
Deliverables are specifically identified and described in other sections of this
Agreement, while others are identified and described only in the System
Timetable. The System Timetable may be amended only as provided in this
Agreement or pursuant to an express written agreement executed by UPS and
Company. Company acknowledges that UPS has an urgent need to have the System
operating in a "live" production environment by the end of the time frames
contained in Exhibit "E" and that time therefore is of the essence with respect
to this Agreement. Company shall therefore adhere to, and perform its
obligations within, the time frames contained in Exhibit "E".
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3.2 Completion Dates.
The System Timetable lists the milestone events representing certain
key System Deliverables and the dates on which Company represents that these
events will occur. UPS and Company recognize and acknowledge that the System
Timetable contemplates that Company may, at various times during the System
development, be concurrently performing more than one (1) System Deliverable.
The dates set forth in the System Timetable for completion of all tasks
necessary to bring about the milestone event are hereinafter referred to as the
"Completion Date(s)". The System Timetable also sets forth the dates by which
Company has represented that it will complete all System Deliverables which it
is required to perform hereunder in order to complete the System.
3.3 Representations Referencing Completion Dates.
Company hereby represents and warrants to UPS that:
(a) The System Timetable and the Completion Dates have been represented by
Company based upon Company's expertise and experience in developing
software systems comparable to the System and upon UPS's
representations and specifications being accurate and complete; and
(b) Each of the System Deliverables will, subject to the fulfillment by UPS
of its obligations hereunder, be completed by Company by such
deliverable's Completion Date. A copy of the complete project plan,
showing UPS' obligations and dependencies, will be made available to
Company.
The representations and warranties contained in this Section 3.3 shall
not be construed as modifying or qualifying any express obligation of Company
pursuant to any other provision of this Agreement.
3.4 Commitment by Company of Additional Personnel.
Without limitation of Company's other obligations hereunder or any
other rights or remedies which UPS may have hereunder or at law or in equity, in
the event that UPS determines in the reasonable exercise of its business
judgment that any System Deliverable may not be completed by its Completion Date
without the commitment by Company of additional personnel to the System
development, UPS shall provide Company with a written notice specifying the
additional personnel which UPS believes should be committed to the System
development, and Company shall commit such personnel to the System as soon as
practicable (but in no event to exceed fifteen (15) days) from receipt of such
notice. Should Company disagree with UPS's requested allocation of personnel, it
will so indicate to UPS within five (5) days of receiving notice thereof. The
parties will then promptly meet and work diligently and in good faith to reach
agreement on the issue.
3.5 Work Performed on UPS Facilities.
Company recommends that during the course of this Agreement, UPS shall
permit employees of Company to be present, when reasonable, as observers or
participants while various tasks are being conducted and to consult with UPS's
personnel. UPS shall provide, at no additional cost, office space and facilities
commensurate with that provided to its own employees for a minimum of seven (7)
Company personnel who will be engaged in the work associated with this
Agreement. Company recommends that one (1) training and one (1) conference room
with conference phone be made available at the UPS facilities where work is
being performed. With respect to all work performed by, or for, the Company at
UPS facilities, the Company shall comply with all applicable state, local and
Federal government laws and regulations in effect where such work is being
performed and applicable to such work and shall comply with all UPS security and
safety regulations in effect at such facilities.
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3.6 Work Performed on Company Facilities
During the course of this Agreement, Company shall permit employees of
UPS to be present, when reasonable, as observers or participants while various
tasks are being conducted and to consult with Company's personnel. Company shall
provide, at no additional cost, office space and facilities commensurate with
that provided to its own employees for a minimum of two (2) UPS personnel who
will be engaged in the work associated with this Agreement. UPS shall comply
with all applicable state, local and Federal government laws and regulations in
effect where such work is being performed and applicable to such work and shall
comply with all Company security and safety regulations in effect at such
facilities
4. MECHANISMS FOR AVOIDING AND IDENTIFYING SYSTEM PROBLEMS.
4.1 Project Managers.
UPS and Company shall each designate in writing one (1) individual to
serve as its project manager for the System through successful completion of the
System Acceptance Procedure, as defined in Section 8, which individual shall be
deemed to have authority to grant or provide approvals that relate to the
day-to-day performance and technical and other project issues that may arise
which do not affect the terms and conditions or costs hereunder (each a "Project
Manager"). UPS hereby designates Xxxx Xxxxx as the UPS Project Manager and
Company hereby designates Xxxxx Xxxxxxxx as the Company Project Manager.
4.2 Contract Managers.
UPS and Company shall each designate in writing one (1) individual to
serve as its contract manager for the System through final acceptance which
individual shall be deemed to have the authority to issue, execute, grant or
provide any approvals, requests, notices, contract amendments or other
communications required hereunder or requested by the other party hereto (each a
"Contract Manager"). UPS hereby designates Xxxx Xxxxxxxx as the UPS Contract
Manager and Company hereby designates Xxxxx Xxxxxxxx the Company Contract
Manager.
4.3 Review Meetings and Project Reports.
Not less than once per month until and no later than 30 days after
completion of the final System Deliverable, UPS's Project Manager and Company
Project Manager, as well as appropriate additional personnel involved in the
particular task underway, shall meet via telephone or televideo conference or in
person to discuss the progress made by Company and UPS in the performance of
their respective obligations hereunder during the preceding month. The UPS
Project Manager and Company Project Manager will jointly produce a meeting
schedule that will reflect but is not limited to the Completion Dates set forth
in the System Timetable. To facilitate proper Project management, once every
month Company shall provide UPS with a written status report ("Progress Report")
specifying in detail:
4.3.1 Any problem or circumstance ("Project Problem") encountered by
Company, or of which Company gained knowledge, during the
preceding month which Company could reasonably expect to
prevent Company's completing any System Deliverable by the
date specified in the System Timetable for such System
Deliverable (any such projected delay being hereinafter
referred to as a "Project Delay");
4.3.2 The estimated length of any Project Delay and estimated amount
of any project cost overrun which may result from any Project
Problem specified pursuant to Section 4.3.1 hereof;
4.3.3 The cause of any Project Problem specified pursuant to Section
4.3.1 hereof and the specific steps taken or proposed to be
taken by Company to remedy such Project Problem; and
4.3.4 The Licensed Software, Third Party Software, Jointly Owned
Software, Third Party Hardware, Pre-Existing Technology
(defined in Section 13D), Inventions (defined in 13C) and
Technical Information (defined in 13B) developed or used by
Company in the prior month in its performance under this
Agreement.
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4.4 Effect of Company's Failure to Identify and Specify Project Problems.
In the event that Company fails to specify in writing any Project
Problem of which it was aware with respect to a given period in the appropriate
Progress Report and in such manner and at such time as required pursuant to
Section 4 hereof (an "Unidentified Project Problem"), it shall be conclusively
presumed for purposes of this Agreement that no Project Problem arose during
such period and Company shall not be entitled to rely upon such Unidentified
Project Problem as a purported justification for either;
(a) claiming that it is entitled to receive any additional amounts with
respect to a System Deliverable, or
(b) failing to complete any System Deliverable by such deliverable's
respective Completion Date. Reports submitted pursuant to Section 4.3
and the implications thereof shall reasonably be taken into account by
UPS in consideration of deviations from the System Timetable or from
the project budget.
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5. CHARGES PAYABLE BY UPS.
5.1 Billing by Company of Fixed Price.
. Company shall provide UPS with a valid invoice in accordance with the
fixed payment schedule as defined in Exhibit "F" only after receiving written
notification of acceptance of the System Deliverables required to complete a
Milestone from UPS's Contract Manager.
Company shall not invoice UPS for services or expenses in excess of the
maximum compensation amount of set forth in Exhibit F of this
Agreement. If additional projects are entered into between UPS and Company
during the term of this Agreement, those additional projects may, at UPS's
option, be governed by separately negotiated agreements. Company shall xxxx UPS
at rates not to exceed Company Hourly Rates identified in Exhibit F for services
provided in connection with any additional projects.
5.2 UPS shall not pay to Company any travel expenses or time and material
work necessarily and actually incurred by Company in connection with
providing such services other than what is stated in the Fixed Price
Schedule in Exhibit F. UPS shall pay only those fix price amounts
indicated in Exhibit F, unless Company is given written notification in
accordance with Section 10, Changes, of this Agreement.
All invoices prepared by Company pursuant to this Agreement shall be
itemized, shall reference the Contract Number of this Agreement and shall
substantiate charges therein set forth. Company shall maintain complete and
accurate accounting records, in a form in accordance with generally accepted
accounting practices, to substantiate Company's charges and expenses hereunder.
Company shall retain records for a period of one (1) year from the date of final
payment. UPS shall pay all valid invoices, except for any amounts disputed by
UPS, within thirty (30) days after UPS's receipt thereof.
Invoices are to be sent to:
United Parcel Service
0000 X. Xxxxxxxxxxx Xxxx 0-x
Xxxxxxxxxx, XX 00000
Attn.: IT Contracts
5.3 Offsets for Damages Suffered by UPS.
In addition to any other rights or remedies UPS may have hereunder or
at law or in equity, UPS shall be entitled to offset the amount of any damages
it suffers or incurs as a result of the breach by Company of any of its
obligations, warranties or representations hereunder against the amount of any
charges becoming due and payable to Company hereunder; provided that prior to
any such offset or other delay in any payment, whether invoiced or scheduled,
UPS will give Company fifteen (15) days notice thereof, and shall either (i)
receive written acceptance of such offset from VISaer or (ii) shall have such
offset authorized by via the Dispute Resolution procedure specified in this
Agreement.
5.4 Taxes
UPS will pay all United States federal, state, local, sales, use,
excise, and other similar sales and use taxes based on this Agreement and the
purchase of services hereunder (except those based on Company's net or gross
income, license, occupation, or property taxes, or worth) unless UPS furnishes
Company with a valid resale or exemption certificate.
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6 PROJECT PERSONNEL.
6.1 Company Project Personnel
Company shall provide UPS with such information regarding individual
project personnel or proposed Project Personnel which UPS may reasonably
request. In the event that Company proposes to have any services under this
Agreement performed by personnel other than employees of Company, Company shall
so notify UPS in advance. Any such personnel shall be deemed subcontractors of
Company. UPS reserves the right to reject any and all subcontractors with
respect to any or all projects to be conducted pursuant to this Agreement
6.2 Continuity of Project Personnel.
Attached hereto as Exhibit "G" is a schedule setting forth certain
specific employees of Company who will be assigned by Company as Project
Personnel in the specific capacities indicated next to their respective names.
Company shall not have the right to remove any Project Personnel (or any
permissible replacement for such Project Personnel) unless such Project
Personnel leave the employ of Company or the Project Personnel have received a
promotion to another position. In the event Project Personnel are removed due to
receiving a promotion to another position, Company shall provide access to such
personnel for questions related to the development of the System for a period of
sixty (60) days. Company shall not remove project personnel strictly for the
purposes of staffing projects not related to the development of the System. The
replacement for such Project Personnel must be acceptable to UPS in the exercise
of UPS's discretion. Project Personnel may be temporarily replaced by Company
for vacations, absences due to illness, accident, other events outside of
Company's control and other events scheduled with UPS's prior written approval,
which approval shall not be unreasonably withheld, conditioned or delayed.
Without limiting the foregoing, UPS may not replace UPS Project Manager except
upon prior written notice to Company.
6.3 Replacement of Project Personnel Upon UPS's Request.
Upon at least five (5) days prior written notice to Company from UPS,
which notice identifies work performance problems with respect to a member of
the Project Personnel, UPS shall be entitled to require Company to replace such
person upon the conclusion of such five (5) day period.
6.4 Indemnification of UPS by Company.
Company shall defend, indemnify, and hold UPS, and its parent company
and any and all subsidiaries of UPS and its parent company, and their respective
directors, officers, employees, and agents (the "UPS Indemnified Parties"),
harmless from and against any and all claims, losses, damages, judgments, costs,
and expenses (including attorneys' fees and disbursements) which UPS Indemnified
Parties may suffer or incur arising out of or in connection with injuries to
persons (including death) or loss of, or damage to, property, occasioned by the
negligence, unlawful act, or willful misconduct of Company, or of Company's
personnel, subcontractors, or agents.
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Company shall, at its own cost and expense, obtain and maintain in full
force and effect, with sound and reputable insurers, during the term of this
Agreement, the following insurance coverage's: Worker's Compensation as required
by applicable law; employer's liability with a minimum limit of $100,000.00 of
liability, and not less than $100,000.00 aggregate limit of liability per policy
year for disease, including death at any time resulting therefrom, not caused by
accident; Comprehensive General Liability insurance against all hazards with a
minimum limit of liability for personal injury, including death resulting
therefrom, on an occurrence basis of $1,000,000.00 in the aggregate, and with a
minimum limit of liability for property damage on an occurrence basis of
$1,000,000.00 in the aggregate; and Automobile Liability insurance against
liability arising from the maintenance or use of all owned, non-owned and hired
automobiles and trucks with a minimum limit of liability for bodily injury of
$1,000,000.00 in the aggregate, and with a minimum limit of liability for
property damage of $500,000.00 per accident. Company's insurance shall be deemed
primary. Company shall provide UPS with certificates of insurance evidencing the
coverage required hereunder and naming UPS as an additional insured as its
interests may appear
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within thirty (30) days after execution of this Agreement. Each policy required
hereunder shall name UPS as an additional insured as its interests may appear
and shall provide that UPS shall receive thirty (30) days' advance written
notice in the event of a cancellation or material change in such policy. In the
event that any service under this Agreement is to be rendered by persons other
than Company's employees, prior to commencement of service by such person(s),
Company shall arrange to furnish UPS with evidence of insurance for such persons
subject to the same terms and conditions as set forth above and applicable to
Company.
In the event of inability or refusal to furnish such certificates or notice of
the cancellation of any required insurance, UPS may immediately terminate this
Agreement.
UPS warrants that it will maintain similar levels of insurance on behalf of UPS
employees visiting Company locations and shall, upon request by Company, provide
copies of insurance certificates or other appropriate documentation.
8. DELIVERY AND APPROVAL OF SYSTEM DELIVERABLES.
8.1 General Obligations of Company with Respect to System Deliverables.
In accordance with the System Timetable and this Section 8, Company
shall develop, complete and deliver to UPS the system deliverables outlined in
the Requirements and Design Document, attached in Exhibit "E" ("System
Deliverable(s)").
8.2 Delivery and Acceptance of System Deliverables.
In accordance with the System Timetable attached as Exhibit E, Company
shall develop, complete and deliver to UPS, each System Deliverable.
Prior to September 1 2001, each System Deliverable shall be classified
as either a Standard System Deliverable or a Critical System
Deliverable and for each Critical System Deliverable, a written,
mutually agreeable Acceptance Plan shall be developed. If this
requirement is not completed by September 1 2001, UPS may terminate
this Agreement, in accordance with Section 16.2, upon notice thereof to
Company without any further obligation to Company hereunder. Upon
receipt of such notice Company shall immediately refund to UPS all
monies paid by UPS under this Agreement.
8.2.1 Based upon adherence to the Acceptance Plan, UPS shall accept or reject
each such Critical System Deliverable within fifteen business (15) days
or if the timing of UPS's acceptance or rejection is not critical in
the sense of delaying work on other project components, such time that
UPS deems appropriate but in no event longer than thirty (30) business
days from receipt thereof. In the event that UPS rejects any Critical
System Deliverable, it shall notify Company in writing specifying the
nature of the deficiencies or inadequacies contained in such Critical
System Deliverable, in which event the following provisions shall
apply:
8.2.1.1 Company shall have a period of fifteen (15) business days from
receipt of notice in which to correct all deficiencies or inadequacies
specified by UPS in such document and to resubmit a revised Critical
System Deliverable to UPS. When timing is not critical in UPS's
judgment, the preceding requirement shall be a thirty (30) business
days instead of fifteen (15) business days.
8.2.1.2 Based upon adherence to the Acceptance Plan, UPS shall accept
or reject such revised Critical System Deliverable within fifteen (15)
business days or if the timing is not critical, such time that UPS
deems appropriate, but in no event longer than thirty (30) business
days from receipt thereof. In the event that UPS rejects such revised
Critical System Deliverable, UPS shall notify Company in writing
specifying the nature of the deficiencies or inadequacies contained in
such revised draft and further revisions thereof shall continue in
accordance with this Section 8.2 hereof until such time as UPS approves
in writing the latest Critical System Deliverable submitted by Company
(any such time spent by UPS in retesting such
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Critical System Deliverable shall be itemized and reimbursed to UPS by
Company upon written notice to Company by UPS. In the event that UPS
rejects such revised Critical System Deliverable a third time, UPS
shall either notify Company in writing specifying the nature of the
deficiencies or inadequacies contained in such revised draft and
further revisions thereof shall continue in accordance with this
Section 8.2 hereof until such time as UPS approves in writing the
latest Critical System Deliverable submitted by Company (any such time
spent by UPS in retesting such Critical System Deliverable shall be
itemized and reimbursed to UPS by Company upon written notice to
Company by UPS), or UPS may terminate this Agreement, in accordance
with Section 16.2, upon notice thereof to Company without any further
obligation to Company hereunder. Upon receipt of such notice Company
shall immediately refund to UPS all monies paid by UPS under this
Agreement.
8.2.2 UPS shall accept or reject each such Standard System Deliverable in the
reasonable exercise of its discretion within fifteen business (15) days
or if the timing of UPS's acceptance or rejection is not critical in
the sense of delaying work on other project components, such time that
UPS deems appropriate but in no event longer than thirty (30) business
days from receipt thereof. In the event that UPS rejects any Standard
System Deliverable, it shall notify Company in writing specifying the
nature of the deficiencies or inadequacies contained in such Standard
System Deliverable, in which event the following provisions shall
apply:
8.2.2.1 Company shall have a period of fifteen (15) business days from
receipt of notice in which to correct all deficiencies or inadequacies
specified by UPS in such document and to resubmit a revised Standard
System Deliverable to UPS. When timing is not critical in UPS's
judgment, the preceding requirement shall be a thirty (30) business
days instead of fifteen (15) business days.
8.2.2.2 UPS shall accept or reject such revised Standard System
Deliverable in the reasonable exercise of its discretion within fifteen
(15) business days or if the timing is not critical, such time that UPS
deems appropriate, but in no event longer than thirty (30) business
days from receipt thereof. In the event that UPS rejects such revised
Standard System Deliverable, UPS shall notify Company in writing
specifying the nature of the deficiencies or inadequacies contained in
such revised draft and further revisions thereof shall continue in
accordance with this Section 8.2 hereof until such time as UPS approves
in writing the latest Standard System Deliverable submitted by Company
(any such time spent by UPS in retesting such Standard System
Deliverable shall be itemized and reimbursed to UPS by Company upon
written notice to Company by UPS . In the event that UPS rejects such
revised Standard System Deliverable a third time, UPS shall either
notify Company in writing specifying the nature of the deficiencies or
inadequacies contained in such revised draft and further revisions
thereof shall continue in accordance with this Section 8.2 hereof until
such time as UPS approves in writing the latest Standard System
Deliverable submitted by Company (any such time spent by UPS in
retesting such Standard System Deliverable shall be itemized and
reimbursed to UPS by Company upon written notice to Company by UPS), or
UPS may elect to fulfill the deliverable using its own internal
resources and / or other third parties, in which case UPS's cost will
be deducted from the Total Project Cost specified in Exhibit F.
8.2.3 UPS's approval of any System Deliverable, including without limitation
all statements of requirements, specifications, designs, plans, codes
and procedures, shall not constitute a waiver or modification of
Company's obligations under this Agreement unless any such waiver or
modification is expressly stated by the UPS Contract Manager in
writing.
9. SYSTEM ACCEPTANCE.
9.1 System Acceptance.
In accordance with the System Timetable, but not later than September
1, 2001, UPS and Company shall develop a written system acceptance procedure
(the "System Acceptance Procedure"), which will be incorporated
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into this Agreement as Exhibit "H", which describes all criteria that System
Deliverables must meet to be acceptable and the procedure that will be applied
by UPS to determine whether each criterion is met. If a mutually agreed upon
System Acceptance Test Procedure cannot be developed prior to the completion of
the System development, the parties shall promptly meet and work diligently
until the parties reach mutual agreement on the Acceptance Procedure. If the
parties cannot agree after a reasonable amount of time, UPS may, at its option,
terminate this Agreement in Accordance with Section 16.2 of this Agreement.
9.2 System Acceptance Procedure.
Upon acceptance by UPS of all System Deliverables required for Go-Live,
UPS shall carry out the System Acceptance Procedure. In the event the System
passes the System Acceptance Procedure, the UPS Project Manager and UPS Contract
Manger shall provide Company written notification thereof. At this point, the
System will be deemed ready for Go-Live. Final Acceptance shall occur when the
System has operated in successful, live operation for a period of 30 days,
("Final Acceptance"), at which point, the UPS Project Manager and UPS Contract
Manger shall provide Company written notification thereof stating the Final
Acceptance of the System. Any respect in which the System fails to meet the
acceptance criteria provided in the System Acceptance Procedure will be referred
to as a Specification Non-Conformity. The UPS Project Manager and UPS Contract
Manager will provide Company with a written description of any Specification
Non-Conformities. Any Specification Non-Conformities revealed by such test or
re-test after correction by Company shall be promptly corrected, (and
appropriate documentation for such correction produced and delivered to UPS) but
in any event, within ten (10) days, by Company, and as soon as practicable
thereafter, the System shall be resubmitted to testing pursuant to this Section
9.2. In the event that the System fails to pass successfully the System
Acceptance Procedure on the first or any subsequent re-test, the UPS Contract
Manager shall either notify Company in writing specifying the Specification
Non-Conformities and further correction to the System shall be made by Company
in accordance with this Section 9.2 hereof until such time as UPS approves in
writing the latest System Deliverable submitted by Company (any such time spent
by UPS in retesting such System Deliverable shall be itemized and reimbursed to
UPS by Company upon written notice to Company by UPS), or UPS may terminate this
Agreement, in accordance with Section 16.2,upon notice thereof to Company
without any further obligation to Company hereunder. Upon receipt of such notice
from UPS, Company shall immediately refund to UPS all monies paid by UPS under
this Agreement.
9.3 Contract Completion.
Contract Completion shall occur when System Acceptance and all System
Deliverables scheduled for post Go-Live completion have been accepted by UPS in
accordance with the System Acceptance Procedure.
10. CHANGES.
No change order shall be valid unless in writing and signed for UPS, by
the UPS Project Manager and UPS Contract Manager and for Company, by the Company
Contract Manager and Company Project Manager. No additional payment by UPS shall
be due to Company for any change from the agreed upon Requirements, Design
Document, specifications or scope of the System or the work plans, or project
schedules unless the change affects Company's cost of the System in excess of
_____________and is set forth in a change order signed by the Project Manager
and Contract Manager of each party.
11 PARTICIPATION OF UPS PERSONNEL.
11.1 Assistance by UPS Personnel.
In order to facilitate the development by UPS personnel of an
understanding of the System, UPS shall have the right, but not the obligation,
to direct any number of its employees to assist Company in the performance of
any of Company's obligations hereunder; provided, however, that any such
assistance shall not relieve Company of
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responsibility for the performance of any such obligation. Company shall
cooperate fully with UPS in carrying out the intent of this Section 11.1. To the
extent Company finds UPS's exercise of this Paragraph 11.1 a cause for delay or
additional costs in fulfilling its obligations under this Agreement, it will so
inform UPS, requesting appropriate adjustments. If UPS does not agree thereto,
the parties will promptly meet and work diligently and in good faith to reach
agreement on the issue. If no agreement can be met, the Dispute Resolution
procedure defined within this Agreement shall prevail.
11.2 UPS Audit Rights.
UPS shall have the right from time to time upon five business days notice to
Company to inspect all of the books and records of Company necessary to verify
the accuracy of any invoice submitted by Company, such inspection being only for
such verification. Any such audit shall be conducted at Company's place of
business on at least 15 business days prior written notice, during Company's
normal business hours and at UPS's expense, provided that all costs incurred by
UPS in conducting any such audit shall be reimbursed by Company in the event
that such audit reveals an aggregate discrepancy in any invoice or cumulative
invoices not previously audited by UPS pursuant to this Section of more than ten
thousand Dollars ($10,000.00). Personnel performing such audits will be subject
to the confidentiality provisions of this Agreement
12. WARRANTY
12.1 Company warrants that: (a) Company is the owner of the Licensed
Software or has the absolute right to license or sublicense the Licensed
Software in accordance with this Agreement; (b) neither the Licensed Software or
the System or UPS's use of the Licensed Software or System will infringe any
copyright, trademark, trade secret, U.S. patent or any other proprietary right
of any third party; (c) the version of the Licensed Software or System delivered
to UPS is an accurate copy of the most current version of the Licensed Software
or System as of the date of delivery.
The Company warrants that the System shall be free from defects in
title.
12.2 In addition to the warranties set forth in paragraph 12.1, which shall
be unlimited as to time, Company hereby warrants and represents to UPS that for
a period of twelve (12) months from successful completion of the System
Acceptance Procedure (the "Warranty Period"):
(a) the System shall operate without Specification Non-Conformities and
that the system shall be free from defects in title, material,
workmanship and design and of no less than the highest quality
standards in the industry;
(b) the System shall be in compliance with the Requirements and the
quality, description, and functional requirements set forth in or
applicable to this Agreement; and shall be merchantable and fit for the
purpose and use specified in this Agreement.
(c) the System shall satisfy all Acceptance Criteria identified in the
Acceptance Test Procedure as described in Exhibit "H".
(d) UPS shall look to the providers of the Third Party Software and
Third Party Hardware for warranty coverage with respect to those items;
however, Company warrants that when functioning in accordance with
their respective specifications, the Third Party Software and Third
Party Hardware will adequately perform their functions within the
System.
(e) The Company warrants that all services provided hereunder shall be
provided in a xxxxxxx-like and responsive manner and shall conform to
the highest industry standards. The Company makes no warranty under
this Agreement, however, with respect to any software programming or
development services performed by UPS or any third party.
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12.3 If, within the Warranty Period, UPS gives Company written notice of a
Specification Non-Conformity contained in the System, Company will, upon receipt
of such notice and at Company's expense, investigate such Specification
Non-Conformity according to the Service Levels specified in Exhibit J. In the
event Company is unable to correct a Specification Non-Conformity within
specified Service Levels, Company will so notify UPS and provide details of the
circumstances that prevent correction.
If Third Party Software or Third Party Hardware is the cause for Specification
Non-Conformities, Company will, use reasonable commercial efforts to design and
implement a fix to the Specification Non-Conformities. If such fix is not
sufficient to allow the System to operate without Specification
Non-Conformities, Company will recommend and assist UPS in identifying,
procuring, and implementing alternate Third Party Software or Third Party
Hardware within ten (10) days.
In the event Company does not or cannot correct such Specification
Non-Conformity within the Service Levels specified in Exhibit J and fails to
reasonably justify such inability, UPS may either make such correction or
contract therefor with others, and Company shall pay UPS the proven costs
thereof.
12.4 Support
Company shall make available to UPS Company Project Personnel approved
by UPS to support the System on an on going basis. Those Project Personnel or
UPS approved substitute personnel will be made available to UPS for a period not
less than seven (7) years and subject to the rates and other terms specified in
Exhibit F.
12.5 Miscellaneous.
12.5.1. (a) In addition to the foregoing, Company warrants that:
(i) The Licensed Software and System, as delivered by Company, do not
and will not contain any codes, commands or instructions, including
viruses, time bombs, worms, and trojan horses, that may, or may be used
to, access, alter, delete, damage or disable the Licensed Software or
System, other products, UPS information or other UPS property.
(ii) The media on which the Licensed Software or System resides will be
free from defects in material and workmanship when delivered by
Company.
(b) Company warrants and represents that all products and services provided by
Company to UPS or used by Company pursuant to this Agreement are or will be Year
2000 Compliant prior to the date of this Agreement regardless of whether such
Systems are owned by Company or by third party providers or suppliers.
Definitions.
12.5.2. For the purposes of the Agreement, "Year 2000 Compliant" and "Year 2000
Compliance" mean:
(a) the interface functionality, calculations, comparisons,
extraction, management, manipulation, output, sequencing,
recording, storing, processing and other computing processes
provided by the System (collectively, "Processes") accurately
perform in a consistent manner regardless of the date in time
on which the Processes are actually performed and regardless
of any data or input which represents a date or includes an
indication of or reference to a date, part of a date or time
period ("Date Data") whether such Processes are performed
before, on, during or after January 1, 2000;
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(b) the Processes respond to two-digit year-date input in a manner
that resolves any ambiguities as to century in a defined and
predetermined manner; and
(c) the Processes store and display date information in ways that
are unambiguous as to the determination of the century.
12.5.3. All of Company's critical internal systems and all interfaces
with all of Company's critical Systems do now, or prior to the date of
the Agreement will be able to, manage and manipulate Date Data without
causing an abnormal ending scenario or generating incorrect value
involving such dates; and Company has identified its critical supply
chain and has obtained reasonable assurances from critical suppliers
that they will be able to continue to supply Company products and
services as the Year 2000 is approached and reached.
12.5.6. Compliance Indemnity. If the System interfaces or is used in
conjunction with the products, services, software or other technology
of a third party (the "Third Party Interface"), and the System causes
the Third Party Interface to fail as a result of Company's breach of
the warranties contained herein, Company agrees to indemnify and hold
UPS and its shareholders, officers, directors, employees, agents,
successors, and assigns harmless from and against any and all claims,
suits, actions, liabilities, losses, costs, reasonable attorneys' fees,
expenses, judgments or damages, whether ordinary, special or
consequential, resulting from any third party claim made or suit
brought against the UPS or such persons. This remedy shall be in
addition to UPS's other indemnification rights set forth in the
Agreement.
12.5.7. Corrections. Company shall, at its expense, commit the
resources necessary to correct any nonperformance, error or defect in a
timely manner as specified in Exhibit J and commensurate with the
nature of harm to UPS caused by the nonperformance, error or defect,
and shall deliver the correction to UPS in accordance with the Service
Levels specified in Exhibit J. If Company fails to correct the
nonperformance, error or defect within the Service Levels specified in
Exhibit J, after UPS has apprised Company of the problem, in writing,
or if the Systems do not meet the Year 2000 Compliance as determined by
UPS in its sole discretion, then UPS may terminate, without liability
on behalf of UPS, part or all of UPS's obligations under the Agreement.
Year 2000 Compliance shall be deemed included under any maintenance and
support provisions contained in the Agreement or in a separate
maintenance agreement, if any, all at no additional charge to UPS.
13 INTELLECTUAL PROPERTY RIGHTS
A. PROPRIETARY RIGHTS
Except for (i) Company Property, (ii) Licensed Software, documentation and other
VISaer intellectual property developed by Company before, during and after this
Agreement unless such intellectual property is directly commissioned and paid
for by UPS as Custom Software, and (iii) Jointly Owned Software for which the
rights defined herein shall equally vest with Company and UPS , all right, title
and interest in and to the software (source and object codes) and documentation,
including, but not limited to drawings, plans, and specifications, and copies
thereof prepared and furnished by Company hereunder (for the purposes of this
Agreement, the Software (source and object codes), documentation and other items
referenced above shall be collectively referred to as "Documents") including all
copyright and other proprietary rights therein, shall vest in UPS. Neither
Company nor any of its employees, agents, subcontractors, suppliers or vendors
shall, without the prior written consent of UPS, use such Documents on any other
project in which such Party is or may become engaged. Company expressly
acknowledges that the parties have agreed that all aspects of the Documents and
all work in process in connection therewith are to be considered "works made for
hire" within the meaning of the U.S. Copyright Act, (the "Act"), and that UPS is
to be the "author" within the meaning of such Act. All right, title, and
interest in the Documents shall vest in UPS upon creation thereof and shall be
owned exclusively by UPS at its creation, and Company hereby expressly disclaims
any interest in any of them. In the event (and to the extent) that the Documents
created by Company hereunder or any part or element thereof is found as a matter
of law not to be a "work made for hire"
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within the meaning of the Act, Company hereby conveys and assigns to UPS the
sole and exclusive right, title and interest to all such Documents without
further consideration, and agrees to assist UPS (at UPS's cost) to register, and
from time to time to enforce, all copyrights and other rights and protections
relating to the Documents created hereunder in any and all countries. With the
exception of Licensed Software, Company acknowledges and agrees that UPS and its
licensors, licensees, or other persons, as applicable, retain all right, title
and interest in and to all other software incorporated into the System, as
identified or described in the Requirements, together with the technology
incorporated therein, and including all patent, copyright, trademark and other
proprietary rights therein.
B. DEVELOPED TECHNICAL INFORMATION
Except for (i) Company Property, (ii) Licensed Software documentation and other
VISaer intellectual property developed by Company before, during and after this
Agreement unless such intellectual property is directly commissioned and paid
for by UPS, , and (iii) Jointly Owned Software for which the rights defined
herein shall equally vest with Company and UPS, Company agrees to disclose and
promptly furnish UPS any and all information developed in furthering the
Requirements and in developing the System Deliverables, computer or other
specifications, documentation, works of authorship or other creative works,
ideas, knowledge, or data, written, oral or otherwise expressed, originated by
Company or by one or more of Company's employees, subcontractors, consultants,
representatives or agents ("Associates") as a result of work ("Work") performed
under or in anticipation of this Agreement ("Technical Information"). UPS shall
own all right, title and interest in and to the Technical Information created by
Company hereunder, including all copyrights and proprietary rights therein.
Company expressly acknowledges that the Parties have agreed that all aspects of
the Technical Information and all work in process in connection therewith are to
be considered "works made for hire" within the meaning of the Act, and that UPS
is to be the "author" within the meaning of such Act. All such copyrightable
Technical Information, as well as all copies of such Technical Information, in
whatever medium fixed or embodied, shall be owned exclusively by UPS as its
creation, and Company hereby expressly disclaims any interest in any of them.
In the event (and to the extent) that the Technical Information created by
Company hereunder or any part or element thereof is found as a matter of law not
to be a "work made for hire" within the meaning of the Act, Company hereby
conveys and assigns to UPS the sole and exclusive right, title and interest
in/and to all such Technical Information, and all copies of any of them, without
further consideration, and agrees to assist UPS to register, and from time to
time to enforce, all copyrights and other rights and protections relating to the
Technical Information created hereunder in any and all countries. Company shall
place a copyright notice in favor of UPS on the Technical Information at UPS's
request.
C. INVENTIONS
Except for (i) Company Property, (ii) Licensed Software documentation and other
VISaer intellectual property developed by Company before, during and after this
Agreement unless such intellectual property is directly commissioned and paid
for by UPS, , and (iii) Jointly Owned Software for which the rights defined
herein shall equally vest with Company and UPS, Company agrees that if any
inventions, discoveries, or improvements are conceived, first reduced to
practice, made or developed as a direct result of the work performed under this
Agreement by Company or by one or more of Company's Associates, Company hereby
assigns and agrees to assign to UPS all of Company's and its Subcontractors'
entire right, title and interest in and to such inventions, discoveries or
improvements, and any patents that may be granted thereon in any country of the
world ("Inventions"). Company shall promptly share with UPS all information
relating to any Inventions. Company agrees that it will promptly have its
Associates sign all papers and, without charge to UPS, do all acts which may be
necessary, desirable or convenient to enable UPS at its expense to file and
prosecute applications for patents on such Inventions, and to maintain patents
granted thereon. Company also agrees to acquire from its Associates who perform
Work hereunder, such assignments, rights and covenants as may be necessary to
assure that UPS shall receive the rights provided for in this Section 13(C).
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D. LICENSE TO PRE-EXISTING TECHNOLOGY
If the System includes or requires the use of inventions or materials previously
made, developed or copyrighted by Company or others, and not originated or
developed for purposes of the Agreement ("Pre-existing Technology"), then
Company hereby grants to UPS a fully paid-up, world-wide, perpetual,
non-exclusive license to make, use, have made, copy, modify, display,
reconstruct, repair, prepare derivative works, reproduce, publish, distribute
(for UPS' use only), install and perform the Pre-existing Technology, to the
extent necessary to effectively use the System. The license so granted to UPS
includes, subject to the License Grant defined within this Agreement, the right
to grant to any affiliate of UPS royalty-free licenses to make, use, have made,
copy, modify, display and perform the Pre-existing Technology, consistent with
the provisions of this Section 13(D).
13.2 Confidentiality
Both parties acknowledge that Company and UPS are the owners of
valuable trade secrets and are in possession of other confidential information
licensed from third parties. Company and UPS shall not disclose to third parties
or use any non-public information and data obtained in connection with this
Agreement or otherwise, except to the extent permitted by the owner of such
trade secrets and/or confidential information or to the extent necessary for UPS
or its affiliates to effectively use the System or for Company to develop the
System for use by UPS.
14 RESTRICTIONS ON PUBLICITY AND RIGHT OF COMPANY TO DEVELOP COMPARABLE
SYSTEMS.
14.1 Prohibition on Publicity.
Company shall not use the name or logo of UPS, or any abbreviation or
adaptation thereof, in any advertising, trade display, client list, or public
statement, or for any other commercial purposes without the prior written
consent of UPS.
14.2 Exclusivity
During the term of this Agreement and for a period of three (3) years
following the termination of this Agreement for any reason whatsoever, Company
shall not provide consulting or other services to the list of companies
identified on Exhibit C as it relates to Jointly Owned Software. UPS reserves
the right to modify the list contained in Exhibit C every three months to
include other companies whose primary business is similar to and directly
competitive to those companies listed in Exhibit C.
14.2.1 The restrictions set forth in this clause shall be included in
all subcontracts entered into for the performance of any services under this
Agreement. Any such subcontractors shall be approved by UPS prior to starting
work. Company shall identify any subcontractors that does not agree to be bound
by the clause, at which point, UPS may elect to have the subcontractor removed
from the project, but must do so with the understanding that deliverable
schedules may need to be revised.
14.3 Survival of Obligations and Right to Equitable Relief.
Company's obligations and UPS's rights under this Section 14 shall
survive any expiration or termination of this Agreement for any reason
(including without limitation termination by Company for a material breach by
UPS of its obligations hereunder) unless this Agreement is terminated by reason
of a default by UPS. Company hereby acknowledges and agrees that UPS's remedies
at law for a breach by Company of its obligations under this Section 14 will be
inadequate and that UPS shall, in the event of any such breach, be entitled to
equitable relief (including without limitation preliminary and permanent
injunctive relief and specific performance), in addition to all other remedies
provided hereunder or available at law.
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15 PROPRIETARY RIGHTS INDEMNITY.
If any third party claims or asserts in any suit, action, proceeding,
or otherwise, that UPS's or any UPS affiliate's use of the System or any portion
thereof infringes or violates any copyright trademark, trade secret, U.S.
patent, or other third party proprietary right, UPS shall promptly notify
Company thereof, and Company shall, at its own expense, defend such action and
indemnify and hold harmless UPS or such UPS affiliate from and against any and
all claims, losses, damages, judgments, costs, and expenses (including
attorneys' fees and disbursements) arising therefrom or caused thereby. Company
shall permit UPS to participate in such defense at UPS' expense, if UPS so
desires, and Company shall not settle any such action without the prior written
consent of UPS, which consent shall not be unreasonably withheld, conditioned or
delayed. If UPS or any UPS affiliate is enjoined from using the System or any
portion thereof, Company shall promptly, at its expense, either (a) procure for
UPS or such UPS affiliate the right to use the System or portion thereof, the
use of which is enjoined; or (b) modify the same so that it is no longer
infringing, but still performs the same functions.
If, despite exercising its best efforts, Company is unable to
accomplish one of the foregoing measures, UPS may immediately terminate this
Agreement effective upon written notice to Company, reserving cumulatively all
other rights and remedies available at law and in equity, and Company shall
promptly refund to UPS all monies paid for the System reduced by the reasonable
value of the period of use of the System determined by amortizing the monies
paid over a period of ten (10) years using straight line depreciation method.
The foregoing indemnity is subject to the following requirements: (a)
that Company is given prompt notice of the claim, but the failure to give such
notice shall only relieve Company from liability hereunder to the extent of the
actual damage suffered by Company as a result of such failure; (b) Company is
given immediate and complete control over the defense and/or settlement of the
claim, and UPS fully cooperates with Company in such defense and/or settlement;
(c) UPS does not prejudice in any manner Company's conduct of such defense; and
(d) the alleged infringement is not based upon the use of the System in a manner
prohibited under this Agreement, in a manner for which the System was not
designed, or in a manner not in accordance with its specifications.
Company shall have no liability for any claim of infringement based on
(a) the use of a superseded or altered version of the System if infringement
would have been avoided by the use of a current or unaltered version of the
System which Company made available to UPS; or (b) the combination, operation or
use of the System with software, hardware or other materials not furnished or
recommended by Company.
The foregoing states Company's entire obligation and liability with
respect to the infringement of any property right.
16 TERMINATION
16.1 Termination for Convenience
UPS shall have the right to terminate this Agreement with or without
cause at any time whether or not Company is in default. Such termination will be
effective within five (5) days of receipt of written notice of termination by
Company. Company shall forward to UPS all completed or uncompleted work
products, documentation and deliverables within fifteen days of receiving such
notice. Company shall be entitled to payment with respect to provable charges
and fees earned and reimbursable expenses incurred (including those for which
Company is reasonably contractually bound) up to the effective date of the
termination, provided that Company agrees to stop all work to the extent
specified in the notice, and incur no further expense beyond those authorized in
such notice. Provable charges shall include hours worked billed at the company
hourly rate, defined in Exhibit F,
17
plus any reimbursable out of pocket expenses approved per Section 5. Provable
charges with respect to any Company staff terminated due to UPS's decision to
terminate this Agreement shall be limited to salary necessary to give fifteen
(15) calendar days notice. If expenses are less than amounts prepaid by UPS,
Company shall promptly return the difference to UPS.
16.2 Termination for Default
In the event that either party;
(a) breaches a material provision of this Agreement and fails to cure such
breach within thirty (30) days after the non-breaching party notifies
the breaching party thereof;
(b) ceases conducting business in the ordinary course;
(c) becomes insolvent;
(d) makes a general assignment for the benefit of creditors;
(e) suffers or permits the appointment of a receiver for its business or
assets;
(f) avails itself of, or becomes subject to, any proceeding under the
federal bankruptcy laws or any statute of any state relating to
insolvency or the protection of the rights of creditors (and, in the
case of an involuntary bankruptcy, insolvency or receivership
proceeding there is entered an order for relief, an order appointing a
receiver or some similar order or decree and the affected party does
not succeed in having such order lifted or stayed within sixty (60)
days from the date of its entry),
(g) discontinues support services as provided for herein.
then the non-breaching party may terminate this Agreement by notifying the
breaching party thereof, and this Agreement shall, from that time on, terminate
and be of no further force or effect. Unless a refund has been awarded to UPS
pursuant to Sections 8 or 9 of this Agreement, Company shall forward to UPS all
completed or uncompleted work products, documentation, System Deliverables,
Licensed Software, Jointly Owned Software, Third Party Software, Technical
Information and Inventions, and Third Party Hardware for which UPS has made
payment within fifteen days of receiving such termination notice.
16.3 Termination by UPS
For a period of one (1) year from the Final Acceptance as defined in Section 9.2
of this Agreement, without the written consent of UPS, which consent shall not
be unreasonably withheld, conditioned or delayed, Company shall not (a) sell
substantially all of its assets or business to an unrelated third party; (b)
sell more than 50% of the capital stock or other securities of Company on a
fully diluted basis having voting power to an unrelated third party; or (c)
merge with an unrelated third party in a transaction in which Company is not the
surviving entity.
16.4 Effect of Termination
UPS may terminate this Agreement upon the occurrence of those events
described in, and in accordance with, Sections 3.4, 8.2, 9, 11.1, 12.3,
15, 16.1, 16.2 and 16.3.
17. NO ASSIGNMENT.
Neither party may assign any of its rights or delegate any of its
duties pursuant to this Agreement without the prior written consent of the
other, and any attempted assignment without such consent shall be void.
Notwithstanding the foregoing, (i) UPS may assign this Agreement to its parent
company or any now-existing or
18
future direct or indirect subsidiary of such parent company upon prior notice to
Company without such consent and (ii) with prior UPS written consent, which such
consent shall not be unreasonably withheld, conditioned or delayed, Company may
assign this Agreement to any person or entity acquiring all or substantially all
of the business of the Company.
18 MISCELLANEOUS.
18.1 Cumulative Remedies.
No remedy made available to either party hereunder is intended to be
exclusive of any other remedy (unless explicitly so provided), and each and
every remedy shall be cumulative and shall be in addition to every other remedy
provided hereunder or available at law or in equity.
18.2 Notices.
Except as otherwise expressly specified herein, any notice required or
permitted to be given hereunder shall be given in writing to the parties at
their respective addresses first set forth above, or at such other addresses as
shall be specified in writing by either of the parties to the other by personal
delivery, registered or certified mail, return receipt requested, telegram,
telex, telecopier or UPS Next Day Air in accordance with the terms and
conditions of this Section 18.2. If by personal delivery, registered or
certified mail, return receipt requested, or UPS Next Day Air, the date upon
which such notice is so personally delivered (or if notice is given by
registered or certified mail, the date that is three (3) business days from
sending, or if by telegram or telex or telecopier, the date of receipt) shall be
deemed to be the date of such notice, irrespective of the date appearing
thereon.
18.3. Captions.
Captions used herein are for convenience only and shall not be deemed a
part of this Agreement or be used to construe the meaning of any of the
provisions hereof.
18.4 Counterparts.
This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
18.5 Waiver
Performance of any obligation required of a party hereunder may be
waived only by a written waiver signed by the other party, which waiver shall be
effective only with respect to the specific obligation described therein.
18.6 Entire Agreement.
This Agreement and all attachments designated herein constitute the
entire understanding and contract between the parties hereto and supersede any
and all prior or contemporaneous oral or written representations or
communications with respect to the subject matter hereof, all of which
communications are merged herein. This Agreement shall not be modified, amended
or in any way altered except by an instrument in writing signed by both of the
parties hereto. All amendments or modifications of this Agreement shall be
binding upon the parties despite any lack of consideration so long as the same
shall be in writing and executed by the parties hereto.
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18.7 Severability of Provisions.
In the event that any provision hereof is found invalid or
unenforceable pursuant to judicial decree or decision of arbitrators pursuant to
Section 20(B), the remainder of this Agreement shall remain valid and
enforceable according to its terms to the fullest extent possible.
18.8 Benefit of Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and, except as otherwise provided herein, their respective
legal successors and assigns.
18.9 Relationship of Parties.
Nothing contained in this Agreement shall be construed as creating a
joint venture, partnership or employment relationship between the parties
hereto, nor shall either party have the right, power or authority to create any
obligations or duty, express or implied, on behalf of the other party hereto.
Notwithstanding the above, Company grants UPS the right to attend and observe
the Company's Board of Directors meetings other than executive sessions. Company
shall extend UPS an invitation to attend and participate in such meetings that
will occur a minimum of 4 times per year. Company agrees that UPS can recommend
an industry expert to be such observer.
18.10 Excused Performances.
Neither party shall be deemed to be in default of or to have breached
any provision of this Agreement as a result of any delay, failure in performance
or interruption of service, resulting directly or indirectly from acts of
nature, acts of God, acts of civil or military authority, civil disturbance,
war, fires, laws, regulations, acts or order of any government agency or
official thereof.
18.11 Governing Law.
This Agreement shall be construed and enforced in accordance with the
laws of the State of Georgia, excluding any choice of law, rules or provisions.
18.12 Attorneys' Fees.
The prevailing party shall be entitled to recover its reasonable
attorneys' fees and costs actually incurred in connection with any action or
proceeding between Company and UPS arising out of or related to this Agreement.
19 GENERAL SERVICES.
19.1 Support Services.
Company shall during the first year following the Warranty Period provide the
Support Services as set forth in this Section 19 to those UPS employees
specifically authorized by UPS, in writing, to request support services
("Authorized Support Contacts"). UPS will cause Authorized Support Contacts to
trained in and familiar with the use of the System.
Company shall provide UPS with the Support Services described in this Section
19, and further described in Exhibit J, via a US toll free telephone number
twenty-four (24) hours per day.
For the purposes of this Agreement, if the Licensed Software and/or the System
fails to perform in accordance with its published documentation and
specifications, a "Specification Non-Conformity" shall be deemed to exist.
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Company shall provide Support Services, appropriate to the level of Severity as
defined in Exhibit J, required to correct such Specification Non-Conformity,
which includes, but is not limited to, correcting, revising or replacing the
Licensed Software and/or the System if either Company or UPS discovers a
Specification Non-Conformity.
Company shall provide all Support Services required to successfully resolve any
request for assistance of any nature in connection with, but not limited to, the
use, operation, or business functionality of, the Licensed Software and/or the
System ("Request for Assistance") that may arise.
Upon receipt of UPS's oral or written notification of a Specification
Non-Conformity in a current unaltered release of the Licensed Software and/or
the System, Company will provide support and problem resolution services
according to the Service Levels defined in Exhibit J.
Support Services shall include the provision to UPS of all updates and
enhancements to the Licensed Software and/or the System within 90 days of the
date when such updates and enhancements have been made generally available to
the public.
Support Services provided hereunder shall automatically terminate at the end of
the twelve- (12) month period stated above unless UPS authorizes renewal.
Notwithstanding the foregoing, Company shall provide UPS ninety (90) days' prior
written notice of the expiration of each Support Services term. Such notice
shall include the applicable renewal fees. Any such renewal fee shall not
increase more than five percent (5%) of the previous term.
19.2 Training.
Training shall be provided as described in the Proposal.
20. Dispute Resolution.
(A). Mediation. If a dispute arises out of or related to this Agreement or the
breach thereof and if the dispute cannot be settled through negotiation, the
parties agree first to try in good faith to settle the dispute by mediation
administered by the American Arbitration Association ("AAA") under its
Commercial Mediation Rules before resorting to arbitration.
(B). Arbitration. In the event that a settlement cannot be reached through
Mediation, and subject to the limitations imposed by all applicable statutes of
limitation, either party shall have the right to submit the dispute to
arbitration by serving a demand for arbitration in writing on the other party
and filing same with the AAA.
The parties agree that all disputes, claims or causes of action arising out of
or relating to this Agreement, or the validity, interpretation, breach,
violation, or termination thereof, shall be finally and solely determined and
settled by arbitration to be conducted in Kentucky in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the date of execution of this Agreement.
Any arbitration commenced pursuant to this Section 20(B) shall be conducted by a
panel of three neutral arbitrators. These arbitrators shall have a minimum of
three years' commercial experience with information systems contracts and
Intellectual Property, including, but not limited to, Patents, Trade Secrets,
Trademarks and Copyrights.
In the event of any inconsistencies between the terms and conditions of this
Agreement and those of the Commercial Arbitration Rules of the AAA, the terms
and conditions of this Agreement shall control.
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21. FUTURE PRICING.
UPS may at any time, up to one (1) year after "Go-Live", purchase the
Company owned software products or services from Company, as described in the
Proposal, at the price defined in Exhibit F below.
22. SURVIVAL
Notwithstanding the termination or expiration of this Agreement, the
following Sections, Attachments and Exhibits of this Agreement shall survive any
such termination or expiration:
6.4 Indemnification of UPS by Company
12 Warranty
13 Intellectual Proprietary Rights
14 Restrictions on Publicity and Rights of Company to Develop Comparable
Systems
15 Proprietary Rights Indemnity
18.1 Cumulative Remedies
18.5 Waiver
18.7 Severability of Provisions
18.8 Benefit of Successors and Assigns
18.11 Governing Law
20 Dispute Resolution
23. LIMITATION OF LIABILITY
UPS shall not be liable to Company for any special, direct, indirect,
punitive, or consequential damages arising out of this Agreement, even if
advised in advance of the possibility of such damages.
24. DELIVERY OF SYSTEM
Company shall deliver to UPS the System via an electronic data
interface. In the event that an electronic data interface is not
available, Company shall deliver the System to the following address:
United Parcel Service
000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx, UPS 7x24 Project Manager
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
UNITED PARCEL SERVICE VISAER, INC.
GENERAL SERVICES CO.
--------------------------- --------------------------------------
Signature Signature
--------------------------- --------------------------------------
Name Name
--------------------------- --------------------------------------
Title Title
--------------------------- --------------------------------------
Date Date
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LIST OF EXHIBITS
NOTE: THE FOLLOWING EXHIBITS ARE NOT FILED HEREWITH BUT WILL BE PROVIDED
SUPPLEMENTALLY BY THE REGISTRANT ON THE REQUEST OF THE SECURITIES AND EXCHANGE
COMMISSION.
The following described documents, whether attached hereto or not, are hereby
incorporated into this Agreement as though fully set forth herein.
Exhibit "A" Requirements
Exhibit "B" Design Document
Exhibit "C" Competitor List
Exhibit "D" UPS Incentives (VISaer Letter Oct. 11, 2000)
Exhibit "E" System Timetable
Exhibit "F" Pricing
Exhibit "G" Project Personnel
Exhibit "H" System Acceptance Procedure
Exhibit "I" Definitions
Exhibit "J" Response Time Metrics for VISaer 7 x 24 Support
Reference Document Project Plan
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