EXHIBIT 10.16B
BASIC OPERATING AGREEMENT
WITH
U.S. INTERACTIVE
THIS AGREEMENT is made and entered into as of September 1, 1999 by and
between XXXXXXXXXX.XXX, INC., a Delaware limited liability company, with offices
at 0000 Xxxx Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter
referred to collectively as "CZ") and U.S. INTERACTIVE, INC., a Delaware
corporation, with offices at 00000 Xxx Xxxxxxxx Xxxx., Xxx Xxxxxxx, XX 00000
(hereinafter referred to as "USI").
RECITALS
A. CZ is in the business of developing and operating all types of electronic
commerce, video, Internet and Interactive applications and services.
B. USI is in the business of enabling electronic enterprise, including digital
marketing, knowledge management consulting, graphical and interface design,
Internet systems design, and Internet systems management, and has agreed to
assist CZ in the development of software and processes as are more fully
set forth in those mutually approved Statement(s) of Work prepared from
time to time.
NOW, THEREFORE, based on the foregoing facts and in consideration of
the mutual covenants and conditions contained in this Agreement, CZ and USI
agree as follows:
1.0 Definitions
"Affiliate" means any person which either directly or indirectly
controls a party to this Agreement, is controlled by such party, or is under
common control with such party. As used herein, the term "control" means the
possession of the power to direct or cause the direction of management and
policies of such person, whether through the ownership of voting securities, by
contract or otherwise.
"Change Order" means a written document signed by both CZ and USI
pursuant to Section 6, below, which amends this Agreement and/or involves an
addition to, deduction from, or other revision to the Work which may result in
an alteration to the timing and/or compensation.
"Confidential Information" shall mean information, including systems,
programs, compilations, devices, methods, techniques, processes, concepts,
designs, trade secrets, financial data, customer information, general business
information, strategies and/or know-how that provides actual or potential
economic value to its owner by not being generally known to the public and is
the subject of reasonable efforts under the circumstances to maintain its
secrecy. "Confidential Information" as defined herein shall not include
information that: (a) is or becomes known to the public through no fault of the
receiving party; (b) is known to the receiving party prior to its receipt or
becomes known to the receiving party by disclosure from a third party who has a
lawful right to disclose the information; (c) is authorized to be disclosed by
prior written consent of the disclosing party; (d) is independently developed as
demonstrated by written record, without reference to Confidential Information;
or (e) is required by law to be disclosed, provided recipient gives the
disclosing party prompt notice of the required disclosure.
"Indemnifiable Claims" means any and all claims, suits, judgments,
damages, losses and/or expenses (including, without limitation, costs,
design-professional fees, and reasonable attorney's fees and expenses incurred
in connection with any such claims, suits, judgments, damages, losses and/or
expenses, and in proving the right to indemnification), and/or demands,
including demands arising from injuries or death of persons (including, without
limitation, the parties' employees) and damage to property.
"Intellectual Property Rights" means worldwide patent, copyright, trade
secret, trademark, service xxxx, trade dress and trade name rights, rights in
industrial designs, rights of publicity or privacy, moral rights, rights of
attribution or integrity and any other intellectual property or proprietary
rights, along with all rights of publication, registration, extension and
renewal associate with each of the foregoing and all related rights and causes
of action, including, without limitation, for infringement, dilution or
misappropriation.
"Licensed Technology" means any Preexisting Technology which USI has
licensed from a third party not controlling, controlled by, or under common
control with USI which USI has (i) incorporated into the Work or Deliverables
and/or (ii) delivered to CZ hereunder.
"Preexisting Technology" means any items which (i) USI is able to prove
were owned, leased or licensed by USI prior to commencement of the work under
any Statement of Work, (ii) USI is able to prove have been developed, leased or
licensed by USI independently of the work under any Statement of Work, (iii) are
protected by any Intellectual Property Rights of USI secured prior to
commencement of the work under any Statement of Work, or (iv) are identified to
CZ in writing as is more specifically discussed in Section 5.4 below.
"Results and Proceeds" means: (i) any results or proceeds of any Work
that are accumulated, authored, made, developed, conceived or first reduced to
practice by USI in connection with performance of the Work under this Agreement,
in any language, format or medium now existing or hereafter developed, whether
or not patentable or copyrightable, including without limitation, any and all
notes, abstracts, summaries, calculations, algorithms, computer programs,
software (including source codes), concepts, designs, drawings, ideas,
processes, procedures, methods, know-how, materials, products, discoveries,
inventions, technologies, improvements, models, molds, tools, literary works,
musical compositions, pictorial, graphic and sculptural works (including images,
artwork, logos and insignia), plans, reports, scripts, sound and special
effects, audiovisual displays, multimedia works, pilots, themes, characters,
renderings, story lines, scenes, specifications, sketches, trade secrets,
treatments, intangible work product, tangible deliverables and other results or
proceeds of any Work; and (ii) all Intellectual Property Rights associated with
any of the foregoing items or with any Work, but excluding for all of the above,
however, the Preexisting Technology and any Intellectual Property Rights
associated with the Preexisting Technology.
"Statement of Work" means the descriptions of and specifications for
the Work to be performed by USI, as set forth in such statements of work as may
be mutually agreed upon in writing between the parties.
"Work" means all the work described in the attached Statement(s) of
work, as such may be amended from time to time by Change Orders, regardless of
the extent to which it is completed, and includes all other labor, materials,
equipment and services provided or to be provided by USI to fulfill its
obligations.
2.0 Term of Agreement
This Agreement shall commence on the date set forth above and shall continue
until the acceptance, by CZ, of the services set forth in the Statement(s) of
Work, unless sooner terminated in accordance with the terms of this Agreement.
All provisions which by their nature should survive termination, including,
without termination, any warranties made by USI regarding the Results and
Proceeds and/or Deliverables and any intellectual property indemnification made
by USI, shall so survive.
3.0 Scope and Timing of Services
3.1 During the term of this Agreement, USI will provide materials and
perform services described in each Statement of Work. The services will be
performed in accordance with the general schedule set forth in the initial, and
in any subsequent, Statement(s) of Work that may be executed by the parties for
other services.
3.2 Time limits stated in this Agreement are of the essence of this
Agreement. By executing this Agreement, USI acknowledges and confirms that the
schedule provides for a sufficient period of time for performing the Work. USI
agrees to proceed competently, diligently, and expeditiously with adequate
resources and shall complete the Work in accordance with the schedule. USI shall
furnish sufficient resources, and shall work such hours, including night shifts,
overtime operations and weekend and holiday work, as may be necessary to insure
the production and completion of the Work in accordance with the schedule.
4.0 Acceptance of Deliverables
USI will provide the deliverables described and scheduled in the attached
Statement(s) of Work ("Deliverables", which term shall also include all Work and
all Results and Proceeds). within 15 business days after receipt of each
Deliverable, CZ will test and evaluate the Deliverable. In the event the
Deliverable meets the specifications in the respective Statement(s) of Work, CZ
shall notify USI in writing that such Deliverable has been tested and accepted.
In the event that a Deliverable fails to meet such specifications, CZ will
advise USI in writing as to which aspects of the Deliverable do not meet the
specifications. USI shall, at no cost of CZ, remedy such failure and deliver the
corrected Deliverable to CZ for review as soon as feasible following receipt by
USI of notice of the failure to meet the specifications. Following receipt of
the corrected Deliverable, the test and evaluation procedures set forth in this
Section 4 shall commence anew. In the event that CZ does not notify USI of
acceptance or failure to meet specifications of a Deliverable within 15 business
days after its receipt of such Deliverable, USI shall notify CZ (both via
telephone and via at least one form of the appropriate notice methods set forth
herein) that 15 business days have elapsed from delivery and that USI has not
received notice of acceptance or rejection of the Deliverables. In the vent that
CZ does not notify USI of acceptance or rejection within 15 business days of
such second notice, the underlying Deliverable shall be deemed accepted.
5.0 Title to Property
5.1 Property of USI. USI shall retain ownership of its Preexisting
Technology. CZ agrees that it will not, directly or through others, disassemble,
reverse engineer or decompile property of USI, or otherwise attempt to discover
any portion of the source code or trade secrets which are part of the USI
Preexisting Technology.
5.2 Property of CZ.
(a) All materials provided to USI by or through CZ, including
but not limited to al artwork, screen presentations, drawings, pictorial works,
motion pictures, audiovisual works, images, text and displays viewable on any
internet site, shall be and remain the property of CZ.
(b) CZ shall own upon their creation all right and title to, and
interest in and to, all Work, Deliverables and Results and Proceeds, and all
associated Intellectual Property Rights, to use in any language and in any
medium whether now existing or developed in the future, throughout the universe
in perpetuity, regardless of any close-out or prior termination of this
Agreement, and USI agrees to promptly disclose and furnish all Work,
Deliverables and Results and Proceeds to CZ. To the extent that the Work,
Deliverables and/or Results and Proceeds include copyrightable materials or
designs, they shall be deemed "works for hire" for CZ under all applicable
copyright laws (including the United States Copyright Act) with CZ as the
author, creator, or inventor upon creation of these materials. CZ shall own all
rights pertaining to the Work, Deliverables and Results and Proceeds as "works
for hire" and CZ shall have the right to apply for and obtain in its name or in
the name of its designee(s) all copyrights and copyright renewals and any other
protections in connection with the protection of these copyrights. To the extent
that any Work, Deliverables and/or Results and Proceeds (including any
patentable inventions) do not constitute "works for hire," USI expressly assigns
and agrees to assign CZ, without separate compensation, all right, title and
interest in and to such Work, Deliverables and/or Results and Proceeds and all
associated Intellectual Property Rights, for CZ to use, in its sole discretion,
in any language and in any medium whether now existing or developed in the
future, throughout the universe in perpetuity. USI acknowledges that as between
USI and CZ, CZ has the exclusive right to any and all Intellectual Property
Rights associated with any Work, Deliverables and Results and Proceeds
conceived, developed and/or produced by USI under this Agreement. USI agrees
that it will communicate to CZ any facts known to USI respecting the Work,
Deliverables and Results and Proceeds and any associated Intellectual Property
Rights, testify in any legal proceedings when called upon by CZ, sign all lawful
papers considered by CZ as expedient to vest in it the legal title being
conveyed (including, without limitation, patent applications and declarations,
if applicable) or for the filing and prosecution of all copyrights and other
Intellectual Property Rights, United States and foreign, and otherwise
reasonably cooperate with and assist CZ and its successors and Assigns in
obtaining full copyright and other Intellectual Property Right protection for
any Work, Results and Proceeds and Deliverables, and in enforcing proper
protection under these Intellectual Property Rights, but in every instance at
CZ's expense.
5.3 License to CZ. In the event that any of the Results and Proceeds,
Work or Deliverables developed under this agreement are improvements to, or rely
upon for their exploitation, and USI Preexisting Technology, whether or not
identified by USI, USI hereby grants to CZ, its subsidiaries and Affiliates and
its and their successors and assigns, as applicable, an irrevocable, fully-paid
and non-assessable, royalty-free, nonexclusive, worldwide right and license to
use, execute, reproduce, display, perform, distribute internally and externally,
sell copies of, and, unless expressly limited as disclosed pursuant to Section
5.4, below, prepare derivative works of the Preexisting Technology in
conjunction with the work, Deliverables and Results and Proceeds developed under
this Agreement, without cost beyond any payments otherwise required by this
Agreement. All rights granted and obligations incurred under this Section 5.3
shall survive and continue in effect following any close-out or sooner
termination of this Agreement. USI agrees to take all action reasonably
requested by CZ (including, without limitation, execution of affidavits and
other documents) to evidence, perfect, confirm or vest the rights granted to CZ
herein.
5.4 Preexisting Technology Disclosure. USI shall make best efforts to
provide CZ with a full and complete list of all Preexisting Technology
(including Licensed Technology) which USI has incorporated into the Work or
Deliverables and/or delivered to CZ hereunder, as soon as practicable, and to
continue to update the list as such may change. Such disclosures shall not be
deemed dispositive as to the issue as to whether any listed item meets the
specifications of the definition of Preexisting Technology. To the extent any
Licensed Technology has been incorporated into the Work or Deliverables and/or
delivered to CZ hereunder, and prior to USI's incorporation of Licensed
Technology into the Deliverables, USI shall disclose the name and version number
of such Licensed Technology, and any limitations which may be imposed by the
underlying license agreement for such Licensed Technology on the rights granted
under Section 5.3 above. In the event that CZ does not agree with the
incorporation of Licensed Technology whose license terms would affect CZ's
rights to use, execute, reproduce, display, perform, distribute internally and
externally, sell copies of and/or prepare derivative works, the parties shall
discuss, in good faith, alternate software to fulfill the functions of such
disputed Licensed Technology.
6.0 Changes
CZ may, at any time, by written notice advise USI of its intent to make changes
in, or additions to, or reductions from, the work to be performed by USI under
this Agreement. If such intended changes cause an increase or decrease in the
amount or character of the work under the Agreement, or in the time required for
performance as determined by USI, USI shall promptly so advise CZ in writing,
specifying the impact of such change on the price and/or the time required for
performance. Thereafter, if CZ elects in writing to make such changes, an
equitable adjustment to all appropriate terms and conditions, including the
amount to be paid to USI and the time for performance, shall be made and this
Agreement modified accordingly with an amendment executed by both parties.
7.0 Confidential Information
7.1 Ownership. All Confidential Information shall remain the property
of the disclosing party and shall be returned to the disclosing party no later
than the termination of this Agreement.
7.2 Nondisclosure. Each party agrees and acknowledges that it shall
have no proprietary interest in the Confidential Information of the other party
and will not disclose, communicate or publish the nature or content of such
information to any person or entity, or use, except as contemplated by this
Agreement, any of the Confidential Information it produces, receives, acquires
or obtains from the disclosing party. Each party shall take reasonable steps
under the circumstances to ensure that the Confidential Information is securely
maintained but, in no event, less than a reasonable standard of care.
7.3 Remedies. The parties acknowledge and agree that the other party's
remedy at law for breach or threatened breach of any of the provisions of this
Section 7 would be inadequate and, in recognition of this fact, in the event of
breach or threatened breach by such party of any of the provisions of Section 7,
the parties agree that, in addition to its remedy at law, the disclosing party,
without any obligation to post bond, shall be entitled to equitable relief in
the form of specific performance, temporary restraining order, preliminary or
permanent injunction, or any other equitable remedy that may then be available.
Nothing herein contained shall be construed as prohibiting the disclosing party
from pursuing any other remedies available to it based on such breach or
threatened breach. Pursuit of any remedy at law or in equity shall not be deemed
an election of remedies.
8.0 Warranty/Maintenance Provisions
8.1 Representations
(a) USI hereby represents and warrants to CZ that:
(i) USI has, and at all times during the performance of the
work will continue to have, the professional experience
and skill to perform the Work required to be performed
under this Agreement;
(ii) USI will, at all times during the performance of the
Work, comply with all applicable laws, statutes,
regulations, codes, ordinances and orders of all
countries, states, provinces, counties, cities and any
other governing bodies in any country having jurisdiction
over the Work;
(iii) USI will, at all times during performance of the Work,
perform such Work in accordance with generally accepted
professional standards;
(iv) there is no claim, litigation, or proceeding pending or,
to USI's knowledge, threatened, that will prevent or
impair USI form performing and delivering the Work,
Deliverables and the Results and Proceeds when and as
required under this Agreement;
(v) USI has, and at all times, during the performance of the
Work will continue to have, sufficient capital assets and
be adequately financed to meet all financial obligations
USI may be required to incur in the performance of the
Work under this Agreement;
(vi) USI is the sole author, creator, or inventor of the Work
and the Results and Proceeds, other than as may be
tendered by CZ and except for such third parties'
properties which USI is authorized to incorporate into
the Work and Deliverables;
(vii) USI has the legal authority to make, use and/or sell the
Work, Deliverables and Results and proceeds and to grant
all rights granted to CZ under this Agreement; and
(viii) the Work, Deliverables, Results and proceeds and the
components of each do not infringe upon or violate any
Intellectual Property Rights of any third party;
(ix) the Deliverables shall be free from defects in materials
and workmanship for a period of six (6) months following
acceptance by CZ (pursuant to Section 4.0 above). During
such six (6) month period, USI shall promptly correct, at
USI's expense, any defects reported by CZ provided such
defects arise from systems meeting the minimum operating
specifications as are set forth in the Statement(s) of
Work.
(b) Each party represents to the other that it is authorized to
execute, deliver and perform its obligations under this Agreement, that the
person signing this Agreement on behalf of such party is authorized to do so,
and that this Agreement is enforceable against such party in accordance with its
terms.
8.2 Unless otherwise specified in a written Statement of work for a
particular project, USI shall not be responsible to maintain any Work.
Maintenance services, if any, will be provided by separate contract. Nothing
contained in this Section 8.2 is intended by the parties to limit any warranty
set forth in this Agreement.
8.3 USI represents and warrants that the Deliverables (other than any
portion of any Deliverable provided by or through CZ) are and shall be capable
of performing all functions, specifications, user requirements and/or
documentation both prior to and following January 1, 2000. The software
programming design and performance capabilities to ensure year 2000
compatibility shall include, but shall not be limited to, date data century
recognition, calculations which accommodate same century and multi-century
formulas and data values, and date data interface values which reflect the
correct century and recognize the year 2000 as a leap year. In the event that at
any time such software is found not to function as specified herein as a result
of the date change from December 31, 1999 to January 1, 2000, notwithstanding
any other obligation or any remedy for breach thereof, at no additional charge,
USI shall immediately upon receipt of a report of defect, correct any such
defect so as to enable the software to fully function in accordance with this
Section and the relevant specifications, user requirements and/or documentation.
In doing so, USI shall not require CZ to make any changes to the software except
to install such changes provided by USI. The USI shall indemnify and hold CZ,
its subsidiaries and affiliates, as well as their respective directors,
officers, employees, consultants and assigns, harmless from and against any
cost, loss, damage or expense (including reasonable attorney's fees) incurred by
CZ or its parent, affiliates or subsidiaries, as a result of a breach of the
foregoing warranty.
8.4 USI represents and warrants that it will not knowingly, without the
express prior written consent of CZ, insert or program into any Deliverable
provided any program, routine, device or other undisclosed feature, including,
without limitation, a time bomb, virus, software lock, drop dead device,
malicious logic, worm, Trojan horse, or trap door, which is (a) designed to
delete, disable, deactivate, interfere with or otherwise harm the Results and
Proceeds or the Deliverables, CZ's (or a subsidiary's or affiliate's) hardware,
data or software, or (b) intended to provide unauthorized access or produce
unauthorized modifications to such Deliverables (collectively, "disabling
procedures"). If CZ incorporates programs or routines supplied by other vendors,
licensors or contractors into the deliverables, USI shall obtain comparable
warranties from such providers or USI shall be entitled to take appropriate
action to ensure that such programs or routines are free of disabling
procedures. Notwithstanding any other limitations in this Agreement, USI agrees
to notify CZ immediately upon discovery of any disabling procedures which are or
may be included in deliverables. If disabling procedures are discovered or
reasonably suspected to be present in the Results and Proceeds and/or the
Deliverables, USI agrees to take action immediately, at its own expense, to
identify and eradicate (or to have CZ do so on its behalf or to equip CZ to
identify and eradicate) such disabling procedures and carry out any recovery
necessary to remedy any impact of such disabling procedures.
8.5 USI HEREBY DISCLAIMS ANY GENERAL WARRANTY OF "MERCHANTABILITY" OR
"FITNESS FOR A PARTICULAR PURPOSE". There are no warranties provided by USI
except as expressly set forth in this Agreement. CZ's remedies for breach of
warranty or based on any other legal theory are limited to the reasonable cost
of correction of the critical fault, and do not include any rights to indirect,
special, exemplary, punitive, incidental or consequential damages. Any action
for breach of any warranty, or based on any other legal theory, must be
commenced within one (1) year after the cause of action has accrued.
9.0 Payment
Every project to be performed pursuant to this Agreement will begin with a
"kickoff payment" equal to such amount as is specifically set forth in the
associated Statement of Work. All xxxxxxxx after that will be provided by USI to
CZ on a monthly basis at the end of each month, with payment due net thirty (30)
days except with respect to currently outstanding amounts which shall be paid in
accordance with the Statement of Work. The amount billed monthly will be the
balance of the agreed budget over the number of months for the project as set
forth in the respective Statement(s) of Work. Payment of all amounts due,
including expenses, will be made within thirty days after the date of invoice.
Interest of 10% per annum will accrue on overdue amounts form the date of
invoice. If any collection action is commenced, the prevailing party will be
entitled to a reasonable attorney's fee equal to at least 25% of the amount at
issue.
10.0 Expense Policy
CZ agrees to reimburse or pay directly all reasonable and pre-authorized
expenses, without xxxx-up, actually incurred by USI in connection with the
services to be provided under this Agreement. All such expenses, including
travel costs, where practical, shall be estimated in writing by USI (plus or
minus 15%) and approved in writing by CZ prior to such expenses being incurred.
USI shall present an invoice representing the actually incurred expenses,
without xxxx-up, together with appropriate receipts to CZ on a monthly basis for
routine expenses, and will invoice expense for major trips as they are
completed. CZ will pay such expenses or provide reimbursement within thirty (30)
days of receipt of any such invoice. USI may require CZ to incur or pay major
project expenses directly provided the timing and amounts of such are approved
in advance, in writing, by CZ. Any expenses incurred by USI which do not comply
with this Section 10 will not be paid or reimbursed by CZ.
11.0 Indemnification
Upon final payment required under this Agreement, to the fullest extent
permitted by applicable law, and subject to the following conditions, USI shall,
at its sole cost and expense, defend, indemnify and hold harmless CZ (and its
Affiliates) from and against any and all Indemnifiable Claims of whatever nature
arising out of or resulting from (i) the gross negligence or willful misconduct
of USI; (ii) property damage caused by USI, its employees, agents, and
consultants, (iii) any failure of any of the representations made by USI in this
Agreement to be true when made, (iv) any actual breach by USI of any of its
obligations under this Agreement; or (v) any infringement of any of the Work,
Deliverables and Results and Proceeds upon any intellectual property rights of
any third party, and USI will, promptly upon written request, fully reimburse CZ
for expenses incurred by CZ (or its Affiliates) by reason of any of the
foregoing Indemnifiable Claims. CZ shall defend, indemnify and hold harmless USI
for any Indemnifiable Claim arising out of any items supplied by or through CZ
in connection with USI's performance of its obligations under this Agreement.
12.0 Announcements
Provided USI is not in breach of this Agreement, and upon issuance by CZ of
prior written approval of the content of such disclosure, USI may mention CZ in
connection with USI speaking engagements, USI web sites, and nonpublic
communications sent by USI to existing and potential clients and others,
indicating the CZ client relationship with USI, and generally what USI is doing
or has done for CZ, without disclosing strategic information about CZ. Written
approval from CZ must be obtained before disclosing any details about specific
engagements by CZ of USI. USI may issue a press release, provided to and
approved in writing in advance by CZ, disclosing the client relationship between
CZ and USI.
13.0 Personnel
13.1 Each party agrees not to knowingly hire or knowingly solicit for
employment or otherwise knowingly engage the services of any individual known to
the soliciting party to be employed by or under contract with the other party
and utilized to complete any of the projects contemplated by this Agreement,
without the other party's consent, for a period of twelve (12) months after the
completion of the work specified in the Statement(s) of Work or termination of
this Agreement; provided, however, a party may accept applications received in
connection with an open recruitment for employment opportunities.
13.2 With respect to any portion of the Work done in the United States,
and solely for purposes of complying with the Immigration Reform and Control Act
of 1986 and its regulations ("IRCA"), USI warrants to CZ and agrees that, to the
best of USI's ability, USI will (i) not assign any individual to perform work
hereunder who is an authorized alien under IRCA, (ii) immediately remove any
alien discovered to be unauthorized from such work and replace him/her with
someone who is not an unauthorized alien, and (iii) to the extent permitted by
law, indemnify, defend and hold CZ harmless from and against all liabilities,
damages, losses or expenses and reasonable attorneys' fees arising out of USI's
breach of this Section 13.2.
14.0 Status
14.1 It is the express intention of the parties that, in the performance
of the Work to be provided under this Agreement, USI is an independent
contractor and not an employee, agent, franchisee, joint venturer or partner of
CZ, and USI shall have complete control over and responsibility for all
personnel performing the Work. USI shall have no authority to act for, bind, or
commit CZ in any way. Nothing in this Agreement will be interpreted as creating
the relationship of employer and employee or of agent and principal between CZ,
on the one hand, and USI or any employee or agent of USI, on the other hand, and
USI will retain the right to perform services for others during the term of this
Agreement. Further, both parties acknowledge that USI is not a CZ employee for
city, county, province, state, federal or national (or other governing body
having jurisdiction over the Work) tax purposes and USI is solely responsible
and liable for paying all applicable taxes and social insurance levied by any
competent authorities and/or any governing bodies in any country having
jurisdiction over the Work, and shall pay such in a timely manner. USI shall be
responsible for maintaining xxxxxxx'x compensation insurance coverage for its
employees.
14.2 USI shall supervise and direct all Work, using USI's best skills
and attention. USI shall be solely responsible for and have control over means,
methods, techniques, sequences, assembly details and procedures and for
coordinating all portions of the Work under this Agreement.
15.0 Termination
15.1 Termination by CZ. Upon thirty (30) days advance written notice to
USI by CZ, CZ may terminate all of the services called for by this Agreement. In
the event of such termination, and so long as USI is not in default hereunder,
CZ shall be obligated to pay USI, upon termination, the agreed price for all
Work performed by USI through the effective date of termination plus any
approved third party expenses incurred by USI in reliance on the Statement(s) of
Work undertaken in compliance with the expense provisions set forth above. Upon
receipt of such termination, USI immediately will stop all Work, place no
additional orders, attempt to return goods which have been already received on
the best possible terms and immediately cancel any existing orders on the best
possible terms. USI will preserve and protect materials on hand, work in
progress, data and completed Work, whether in USI's facilities or otherwise. CZ
will have an immediate right of possession, and as promptly as possible, USI
will provide to CZ all Work then completed or partially completed including all
materials, equipment, receipts and records, and originals and copies of all
computer generated designs on all electronic storage media, as well as all
calculations, specifications and all other information then performed by USI. In
no event will USI be entitled to any payment under this Section 15.1 until USI
complies with these obligations.
15.2 Termination by Either. Either party may terminate this Agreement
upon written notice if the other party breaches any of its material obligations
hereunder, if the breach is not cured (if reasonably curable at all) within
thirty (30) days of receipt of written notice of such breach if such breach is
capable of being cured.
16.0 Notices
The agents for receipts of notices hereunder, including any necessary legal
summons or other sorts of legal papers, are as follows:
To CZ: Xxxxxxxxxx.xxx, Inc.
Attention: Xxxx Xxxxxxx
0000 Xxxx Xxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, XX 00000
Facsimile: 818-526-5000
With a copy to: Attention: Legal Department
To USI: U.S. Interactive, Inc.
Attention: Xxx Xxxxx
00000 Xxx Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
All such notices, including legal summons or legal papers, shall be given in
writing and may be provided (a) by personal delivery, (b) by nationally
recognized overnight courier, or (c) by facsimile followed by postage prepaid
first-class mail. Notices will be considered to have been given at the time of
the actual delivery in person, three (3) business days after deposit into the
United States mail, two (2) business days after delivery to an overnight air
courier service, or the moment of completion of transmission if sent by
facsimile. Either party may change its notice address by a notice given in the
manner provided for in this Section.
17.0 Force Majeure
Neither party shall be held responsible for any delay or failure in performance
of any part of this Agreement to the extent such delay or failure is caused by
act of God (including, without limitation, hurricane, flood, tsunami, tidal wave
or earthquake), war, fire, riot, acts of public enemies, or actions of any
governmental authorities in any country (other than any such actions that result
in any laws, ordinances, regulations, judgments or decrees with which such party
must comply) or other similar causes beyond its control and without the fault or
negligence or failure to act of the delayed or non-performing party ("Force
Majeure Condition"). If any Force Majeure Condition occurs, the party affected
by the other party's delay or inability to perform may elect to (a) suspend this
Agreement for the duration of the Force Majeure Condition and, once the Force
Majeure Condition ceases, resume performance under this Agreement with an option
in the affected party to extend the period of this Agreement up to the length of
time the Force Majeure Condition was endured; or (b) when the delay or
non-performance continues for a period of at least thirty (30) continuous days,
terminate the part of this Agreement relating to material not already shipped or
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,
election (a) shall be deemed selected.
18.0 Dispute Resolution
Any claim, controversy, or dispute, whether sounding in contract, statute, tort,
fraud, misrepresentation or other legal theory, whenever brought and whether
between the parties to this Agreement or between one of the parties to this
Agreement and the employees, agents or affiliated businesses of the other party,
shall be resolved by arbitration as prescribed in this paragraph. A single
arbitrator engaged in the practice of law shall conduct the arbitration under
the then current commercial arbitration rules of the American Arbitration
Association ("AAA"). The arbitrator shall be selected in accordance with AAA
procedures from a list of qualified people (i.e., knowledgeable in the industry
to which this Agreement applies) maintained by AAA. The arbitration shall be
conducted in Los Angeles, California, and all expedited procedures prescribed by
the AAA rules shall apply. The arbitrator shall have authority to award
compensatory damages only and shall not have authority to award incidental,
consequential, exemplary or punitive damage, or non-compensatory damages
(including, without limitation, damages for loss of business, profits or
revenues, loss of goodwill, business interruption, or failure to realize
expected savings) or any other form of relief; provided, however, either party
may apply to any court having jurisdiction thereof solely for the entry of
injunctive relief to maintain the status quo until such time as the arbitration
award is rendered or the controversy is otherwise resolved. Each party shall
bear its own costs and attorney's fees and the parties shall share equally the
fees and expenses of the arbitration. The arbitrator's decision and award shall
be final and binding, and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. If any party files a
judicial or administrative action asserting claims subject to arbitration, as
prescribed herein, and another party successfully stays such action and/or
compels arbitration of said claims, the party filing said action shall pay the
other party's costs and expenses incurred in obtaining such stay and/or
compelling arbitration, including reasonable attorneys' fees and court costs.
19.0 Source Code
USI will provide to CZ, as part of the Deliverables, any and all source code for
all Preexisting Technology which is not Licensed Technology.
20.0 General Provisions
20.1 Entire Agreement. Each party acknowledges that it has read this
Agreement, understands it and agrees to be bound by its terms and conditions and
further agrees that this Agreement, together with any and all exhibits,
attachments, riders and schedules referred to therein is the complete and
exclusive statement of this Agreement between the parties, superseding all
proposals, negotiations, or prior arrangements, oral or written, and all other
communications between the parties relating to the subject matter of this
Agreement, all of which are expressly merged herein and there are no terms,
conditions, representations, warranties or covenants other than those set forth
therein.
20.2 Governing Law. The Agreement shall be governed by and construed in
accordance with the laws of the State of California pertaining to contracts made
and to be performed entirely therein, without regard to its choice of law or
conflict of law provisions. The parties exclude the application of the United
States Convention on Contracts for the International Sale of Goods.
20.3 Amendment and Modification. No term or provision of this Agreement
may be amended, waived, released, discharged or modified in any respect, except
in writing signed by a duly authorized officer of each of the parties hereto.
20.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and will become
effective and binding upon the parties at such time as all of the signatories
hereto have signed each counterpart of the Agreement. Copies of this Agreement
may be transmitted via telefax for signature and each mutually executed fax copy
may be used for all purposes as an original by either party.
20.5 Captions. Paragraph titles or captions contained in this Agreement
are used for reference only and are not intended to and shall not in any way
enlarge, define, limit, extend or describe the rights or obligations of the
parties or affect the meaning or construction of the Agreement or any provision
hereof.
20.6 Severability. If any term or provision of the Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder or this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and all other
terms and provisions of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. Except as otherwise expressly provided, the
remedies available under this Agreement will be cumulative and in addition to
any other remedies provided at law and in equity.
20.7 Waiver. No failure or delay on the part of any party to the
Agreement in exercising any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power, or remedy hereunder. No waiver, amendment or
modification, including those by custom, usage of trade or course of dealing, of
any provision of this Agreement will be effective unless in writing and signed
by the party against whom such waiver, amendment or modification is sought to be
enforced. No waiver by any party of any default in performance by the other
party under the agreement or of any breach of series of breaches by the other
party of any of the terms or conditions of this Agreement shall constitute a
waiver of any subsequent default in performance under the Agreement or any
subsequent breach of any terms or conditions of the Agreement. Performance of
any obligation required of a party under this Agreement may be waived only by a
written waiver signed by a duly authorized officer of the other party, and such
waiver shall be effective only with respect to the specific obligation described
in that waiver.
20.8 Assignment. This Agreement may not be assigned or otherwise
transferred by either party, in whole or in part, voluntarily, involuntarily, by
operation of law or otherwise, without the prior written consent of the other
party; and any purported attempt to do so shall be deemed void. Notwithstanding
the foregoing, CZ may assign or otherwise transfer this Agreement to a successor
entity to CZ or to an entity controlling, controlled by, or under common control
with, CZ without requiring consent provided that CZ shall remain liable for any
money's owed to USI in the event of a default in the payment of such by such
success or assignee. The Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and, as applicable, their permitted respective
heirs, executors, administrators, representatives and successors.
20.9 Construction of Language. The language in all parts of this
Agreement will be interpreted simply, according to its fair meaning and not
strictly for or against any of party. Each party acknowledges that the language
contained in this Agreement is the product of an arms length negotiation
conducted by that party's duly appointed legal counsel. As a result, neither
party (i) shall be deemed to have drafted this Agreement nor (ii) shall be
entitled to construe this Agreement, either in whole or in part, against the
other party on the theory that contract provisions are construed against the
party that drafted it.
20.10 Audit. USI shall keep complete and accurate records of the
charges for services rendered pursuant to this Agreement. USI shall allow CZ, or
its representative and its auditors and regulators, during office hours and at
CZ's expense, to inspect and copy the books and records and all other documents
and materials in the possession or under the control of USI with respect to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XXXXXXXXXX.XXX, INC. U.S. INTERACTIVE, INC.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Title: President & COO Title: Sr. Vice President/COO
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Date: 12/16/99 Date: 12/17/99
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