EXHIBIT 10.13
Sun Professional Services
Subcontractor Master Consulting Agreement SPS: 7787
----
This Subcontractor Master Consulting Agreement ("Agreement") is entered into on
1-18-2000, 19__ (the "Effective Date"), by and between Sun Microsystems, Inc.,
---------
with its principal place of business at 000 Xxx Xxxxxxx Xxxx, Xxxx Xxxx, XX
00000 (hereinafter referred to as "Sun") and Logical Design Solutions with its
------------------------
principal place of business at 00 Xxxxxxxx 00xx Xxxxx, XX, XX 00000 (hereinafter
------------------------------------
referred to as "Subcontractor"). This Agreement contains the full agreement of
the parties and supersedes any prior agreements, written or oral, between the
parties relating to this subject matter.
RECITALS
WHEREAS, Sun Microsystems, Inc. by and through its business unit, Sun
Professional Services, is in the business of providing integration services to
its various Customers; and
WHEREAS, Subcontractor is in the business of providing technical consulting
services; and
WHEREAS, the parties desire to enter into a contractual relationship for the
provision of Services to Sun Customers as described herein; and
WHEREAS, the parties acknowledge that Sun shall act as the prime contractor for
the delivery of Services to its Customers, and that _______________ shall act as
a Subcontractor under said prime contract(s) for the delivery of the Services
described herein.
1. Definitions
1.1. "Services" shall include, but not be limited to, programming, software
analysis, project analysis, project management, facilities management,
document development, testing and technical support.
1.2. "Customer" shall mean Sun's customer to whom the Services under this
Agreement shall be provided.
1.3. "Prime Contract" shall mean Sun's contract with the Customer for which
purchase orders under this Agreement will be issued.
1.4. "Prime Contractor" - Sun is the Prime Contractor with the primary
responsibility for the provision of Services to the Customer.
1.5. "Subcontractor" shall mean the person or firm contracting to perform
the Services defined herein.
2. Terms and Conditions
2.1. This Agreement contains the terms and conditions which apply to all
purchases of Services made pursuant to this Agreement, notwithstanding
any terms or
Page 1 of 14
conditions contained in any acknowledgment or other business forms
transmitted by Subcontractor. All Subcontractor acknowledgments and
transmittals must reference this Agreement and Sun's applicable
purchase order.
2.2. This Agreement does not constitute a purchase order or other
commitment. Purchases of Services shall be evidenced by purchase
orders issued by Sun's purchasing department. Sun shall be liable
under this Agreement only for those purchases of Services covered by
such a purchase order.
2.3. Upon request of Sun, Subcontractor shall furnish to Sun written
evidence of Subcontractor's compliance with its obligations of this
Agreement. Subcontractor further agrees to provide in a format
acceptable to Sun any and all reports and cooperate with any audits
which Sun may request.
3. Term of the Agreement
The term of this Agreement shall commence upon the Effective Date as
defined herein and shall continue until one (1) year after the Effective
Date ("Initial Term"). Thereafter, this Agreement shall be automatically
renewed for additional one (1) year periods unless either party gives
written notice of termination at least sixty (60) days before any
anniversary of the Effective Date, unless sooner terminated in accordance
with the provisions hereof (the "Term").
4. Services
4.1. Subcontractor, as an independent contractor and not as an agent, shall
provide the Services described herein on a case-by-case basis in
support of Sun Prime Contracts.
4.2. Sun, by issuance of a purchase order, shall request that Subcontractor
provide the services defined in the Statement of Work (SOW), which
will be made a part of this Agreement as Exhibit A. The Services shall
conform to the scope of work described in the SOW(s) and corresponding
purchase order(s) issued by Sun.
4.3. In the event Subcontractor anticipates at any time that it will not
reach one or more milestones or complete one or more assignments
within the prescribed timetable, Subcontractor shall immediately so
inform Sun by written notice.
4.4. Sun may at any time, and for any reason, terminate the Services of any
person or persons provided by Subcontractor to Sun. Subcontractor
shall act promptly to remove such individual(s) from either Sun's or
the Customer's premises. Sun's sole liability in such event shall be
to pay Subcontractor, in accordance with the applicable purchase
order, for the Services actually performed by such individual(s) prior
to the termination.
Page 2 of 14
5. Changes
Subcontractor agrees that it will, upon the request of Sun, negotiate
in good faith to amend this Agreement to incorporate additional provisions
herein and to change the provisions hereof, as Sun may reasonably deem necessary
in order to comply with the provisions of the Prime Contract or with the
provisions of amendments to the Prime Contract. If any such amendment to this
Agreement causes an increase in the cost of, or the time required for,
performance under this Subcontract, an equitable adjustment shall be made in the
Agreement price or delivery schedule, or both. No claim by the Subcontractor for
such an adjustment will be valid unless asserted within fifteen (15) calendar
days from the date of the Subcontractor's receipt of the change request.
6. Additional Terms and Conditions
Both parties agree that from time to time it will be necessary to negotiate
additional terms and conditions which shall be attached hereto and
incorporated herein by reference as Exhibit B. In the event that any
inconsistency exists between this Agreement and the additional terms and
conditions, the additional terms and conditions will take precedent.
7. Interim Review
7.1. At each milestone Sun will review the progress of the project, provide
written direction for any revisions that may be desired by Sun, or its
Customer, to the Agreement, and authorize Subcontractor, in writing.
If changes in the work are required due to the errors or omissions of
Subcontractor, Subcontractor shall, at its expense, make any revisions
requested by Sun to make the Services conform to the SOW.
7.2. Sun reserves the right to reject the Services anytime, if the Services
were not delivered in a timely manner in accordance with the SOW. If
Sun determines that the Services do not conform to the SOW, Sun shall
notify Subcontractor in writing, and Subcontractor shall have ten (10)
working days to submit new Deliverables and/or perform new Services
conforming to the SOW.
8. Payment
8.1. As full compensation and consideration for the Services and other
obligations of Subcontractor set forth herein, Sun will pay
Subcontractor in accordance with the applicable purchase order. Sun's
payment terms are 2%15 Net 45. Payment check will be issued according
to terms of payment upon receipt of invoice in Sun's Accounts Payable
Department. Payments are considered made by Sun on date of mailing as
evidenced by postmark. Any out-of-pocket expenses (e.g. travel)
incurred by Subcontractor in connection with providing the Services
will be the sole responsibility of Subcontractor, unless otherwise
approved in writing by Sun prior to Subcontractor incurring such
expense. Sun shall only pay for
Page 3 of 14
actual expenses incurred by Subcontractor's employees at fair and
reasonable rates.
8.2. For time and material efforts, timecards are to be submitted, by
Subcontractor personnel, to the applicable Sun Project Manager each
Friday via FAX for the respective week's work. An example of the
Consultant Timecard is set forth as Exhibit C.
8.3. Subcontractor shall each month submit duplicate invoices to Sun for
the Services performed and any approved expenses incurred in the
immediately preceding month. Subcontractor shall include with each
invoice: (1) Time Cards for each employee of Subcontractor performing
Services hereunder, showing the amounts of billable time expended, and
a description of the work performed; (2) Receipts or other
documentation supporting reimbursable expenses previously approved by
Sun.
8.4. Subcontractor shall promptly pay its employees for all work performed.
If Subcontractor does not pay its employees on a current basis for
work performed on behalf of Sun, such nonpayment shall be deemed a
material breach of this Agreement and shall entitle Sun, in addition
to all other remedies, to withhold all further payments to
Subcontractor under the applicable purchase order and contract
directly with such employee(s) to complete the Services.
9. Ownership
9.1. With the exception of modifications to Subcontractor specific
products, all right, title and interest in and to any code developed
by Subcontractor and all right, title and interest in and to all
patents, copyrights, mask work rights, trade secrets, trademarks and
other intellectual property developed hereunder are hereby, upon
Subcontractor's creation thereof, transferred and assigned to Sun or
otherwise vested therein. Subcontractor shall obligate its employees
and/or agents to provide and shall supply Sun at no additional cost,
all such assignments, rights and covenants as Sun deems appropriate to
assure and perfect such transfer, assignment or other vesting. All
code or information developed under this Agreement shall be deemed to
be a "work made for hire" to the extent allowed by law. Subcontractor
agrees, and shall obligate Subcontractor's employees to agree, that
all code or information developed hereunder shall be kept in
confidence by Subcontractor and Subcontractor's employees and shall be
used only in the performance of this Agreement, and may not be used
for other purposes except upon such terms as agreed to under this
Agreement. Sun shall have all right, title and interest to such
modifications. Sun shall acquire title, upon its delivery, to all
software media and other information, communication, and copies of the
code developed hereunder.
9.2. Notwithstanding the above, Sun grants Subcontractor a perpetual,
royalty-free, non-exclusive, non-transferable, worldwide license to
use and reproduce the code
Page 4 of 14
developed under this Agreement in object code form only and solely
for use on Sun hardware platforms.
10. Warranty
10.1. Subcontractor warrants that the Services provided hereunder will
substantially conform to the SOW. In the event that the Services
provided hereunder fail to conform to the SOW, Subcontractor's
obligation hereunder at Sun's option will be to promptly (a) bring
work performed hereunder into compliance with the SOW, or (b) grant
Sun a refund of the compensation paid by Sun relating to the
nonconforming work.
10.2. Subcontractor represents and warrants that Subcontractor is the sole
developer of any work products produced hereunder, that such work
product is original, does not infringe upon or violate any patent,
mask work rights, copyright, trade secret, trademark or other
proprietary right of any third party and that Subcontractor has the
right to make disclosure and use of all such information used by
Subcontractor in the performance of the Services.
10.3. Subcontractor warrants that: a) all versions of its products and
services which are sold and licensed to Sun ("Products") and
comprising the Deliverables (in whole or in part) have been or will
be tested for, and will be documented for Sun and its customers as
meeting the Year 2000 Compliant definition set out below; and b) if
Products incorporate inferencing rules, Subcontractor will notify Sun
of the specific rules applied and ensure that they are unambiguous.
Sun's remedies for Subcontractor's breach of the warranty in this Section 10.3,
will be for Sun at its option to require Subcontractor, free of charge to Sun:
(a) to use all reasonable efforts to make Products Year 2000 Compliant; or (b)
to supply functionally equivalent Products which are Year 2000 Compliant; or (c)
to refund to Sun the full purchase price or license fees paid by Sun for
non-complaint Products.
In addition to the above remedies, Sun may also require Subcontractor, free of
charge to Sun: (a) to provide Sun with the source code to software Products; (b)
to permit Sun or its contractors to access and modify such source code, to the
extent required for Sun or its contractors to create Year 2000 Compliant
products and services; and (c) to distribute modified source code and license it
to Sun's customers, to the extent required for them to have Year 2000 Compliant
products and services.
Subcontractor further represents and warrants to Sun that the data processing
and business systems on which Subcontractor relies to operate its business and
to supply Products to Sun are Year 2000 Compliant and that the date change from
December 31, 1999 to January 1, 2000 and the occurrence of any leap year will
not materially affect Subcontractor's ability to provide Sun with Products.
Page 5 of 14
For the purposes of this Agreement "Year 2000 Compliant" means that
Products will not produce errors in the calculation or processing of date
data related to the year change from December 31, 1999 to January 1, 2000.
Date calculation or representation, including leap years, will be accurate
when products are used in accordance with their accompanying documentation,
provided that all hardware and software products used in combination with
Year 2000 Compliant Products properly exchange date data with them.
11. Personnel
Subcontractor shall secure all personnel required to perform Services
pursuant to this Agreement. Subcontractor's employees and agents shall
observe the working hours, working rules and holiday schedule of the
Customer while working on the Customer's premises. Sun reserves the right
to direct the replacement of any personnel assigned by Subcontractor to
perform the services. If Sun determines that the presence of such person is
detrimental to the progress of the work, Subcontractor shall replace such
personnel with properly qualified personnel as soon as is reasonably
practical. The parties agree that Subcontractor is an independent
contractor and in no event shall any temporary personnel hired by
Subcontractor and provided to Sun hereunder be considered an employee or
agent of Sun. Subcontractor agrees and understands that it assumes all
responsibility for, and liability arising form, any employment or payroll
tax withholding obligations for personnel provided to Sun, indulging,
without limitation, federal and state income tax withholding, FICA, FUTA,
SDI and state payroll taxes. Nothing herein shall be construed to grant to
Subcontractor any right or authority to create any obligation, expressed or
implied, on behalf of Sun, or to bind Sun or its Customers in any manner
whatsoever.
12. Employment Taxes and Benefits
12.1. Subcontractor shall be responsible for the payment of any and all
taxes due as a result of the performance of the Services or the
payment, thereof, Subcontractor acknowledges and agrees that it is
solely the responsibility of Subcontractor to report as income all
compensation received hereunder and Subcontractor shall indemnify and
hold harmless Sun and its Customers from any obligation to pay any
sales or withholding taxes, social security, unemployment or
disability insurance or similar charges or impounds, including any
interest or penalties thereof, in connection with any payments made
to Subcontractor hereunder.
12.2. Subcontractor shall comply with all applicable state, federal and
local laws including, but not limited to, laws and regulations
covering wages, hours of work and payroll withholding.
13. Employee Conversion
During the period commencing on the date Subcontractor employee or
contractor commences to provide Services to Sun under this Agreement and
continuing for twelve (12) months, Sun may not convert Subcontractor
employee or contractor to Sun's payroll.
Page 6 of 14
After twelve (12) months Sun will have the right to convert said
Subcontractor employee or contractor to Sun's payroll. After twelve (12)
months Sun will have the right to convert said Subcontractor employee or
contractor at no further cost.
14. Direct Contracting Fee
Both parties acknowledge that Sun has made a major sales investment in
those contractual relationships where Subcontractor has worked under this
Agreement and the parties further acknowledge that there may be occasions
when the Customer may desired to contract directory with the Subcontractor.
In those situations where the Subcontractor has worked previously under
subcontract with Sun and is requested by the Customer during the
subcontract effort or the twelve (12) month period following the
termination by the Customer during the subcontract effort or the twelve
(12) month period following the termination of its contractual relationship
with Sun, the Subcontractor shall pay Sun an amount equal to and not to
exceed twenty percent (20%) of the contract amount between the
Subcontractor and Customer. The Direct Contracting Fee does not apply in
instances where a previous relationship exists, or where the
Subcontractor's sales force has been working Sun Customer on an un-related
effort.
15. Discrimination
Subcontractor shall not discriminate in any manner against any individual
because of race, color, religion, national origin, age, sex or handicap.
Subcontractor, in performing Services under this Agreements, shall comply
with all applicable laws, rules and regulations concerning the prohibition
of discrimination in employment.
16. Confidentiality
16.1. The parties acknowledge and agree that, in the course of performing
under this Agreement, each party may be provided with or given access
to information, in verbal or written form, that is proprietary and
confidential to the other party ("Information") including by way of
illustration only and without limitation, the management and business
of the other party, the organizational structure, policies and
procedures of the other party, information concerning the business
relationships of the other party and information relating to and/or
proprietary to the clients of the other party. For the purposes of
this provision each party will be deemed to be (i) the "Recipient"
with regard to the information that it receives from the other party
(ii) the "Disclosure" with regard to the Information that it provides
to the other party. Recipient shall employ the same degree of care in
preventing the disclosure of the Information to any third party(ies)
as it uses with regard to its own information of similar importance,
provided, however, that in no event shall Recipient employ less than
a reasonable degree of care. Recipient shall only disclose
Information to those of its employees who have a need to know the
Information for the purposes of performing under this Agreement. The
term "Information" as used herein shall not include, and neither
party shall have any obligation of confidentiality with respect to,
information that; (a) is in or
Page 7 of 14
comes into the public domain (except as a result of a breach of this
provision); (b) is received by Recipient from a third party not under
an obligation of confidentiality with respect thereto; (c) is
independently developed by the Recipient's personnel who have not had
access to the Information of the Discloser; (d) is required to be
disclosed by Recipient under operation of law or (e) is approved for
disclosure by Recipient in writing executed by the Discloser.
16.2. It is understood and agreed that in the event of a breach of this
Section, damages may not be an adequate remedy that the Discloser
shall be entitled to injunctive relief to restrain any such breach,
threatened or actual.
17. SunScreen Requirement
Subcontractor agrees and warrants that for each Subcontractor employee whom
it identifies for a Sun project, Subcontractor will provide the Sun
security department a SunScreen form as attached as Exhibit D. Only after
Sun's approval of the SunScreen form can Subcontractor assign said employee
to any Sun project.
18. Indemnification
18.1. Subcontractor shall defend Sun and/or the Customer against any claim
that Services furnished hereunder infringe any U.S. Patent, trade
secret or copyright and will indemnify Sun and/or the Customer
against any loss, damage or liability arising from final award
against Sun and/or the Customer, provided that Sun notifies the
Subcontractor promptly in writing of the claim and provides
Subcontractor with reasonable assistance and sole authority to defend
or settle such claims, at Subcontractor's sole expense. Subcontractor
shall not be liable for any claim of infringement arising from
Subcontractor's conformance with specifications provided by Sun
and/or the Customer. THIS PARAGRAPH STATES THE ENTIRE LIABILITY OF
SUBCONTRACTOR WITH RESPECT TO INFRINGEMENT OF PATENTS, TRADE SECRETS
OR COPYRIGHTS AND SUBCONTRACTOR SHALL HAVE NO ADDITIONAL LIABILITY
WITH RESPECT TO ANY ALLEGED OR PROVEN INFRINGEMENT.
18.2. Subcontractor shall indemnify and hold harmless Sun, its officers,
directors, employees, agents and attorneys from and against any
claims or actions brought by third parties and from any and all
damages, losses, expenses, including reasonable attorneys' fees and
costs of litigation, arising out of or resulting from acts, errors or
omissions by Subcontractor or any of its agents, employees, or
subcontractors.
19. Limitation of Liability
Except for express undertakings to indemnify under this Agreement, and/or
breach of the Confidential Information obligations:
Page 8 of 14
a. Each party's liability to the other for claims relating to this
Agreement, whether for breach or in tort, shall be limited to ONE
HUNDRED THOUSAND DOLLARS ($100,000.00) or the value of the applicable
purchase order, whichever is greater.
b. In no event will either party be liable for any indirect, punitive,
special, incidental or consequential damage in connection with or
arising out of this Agreement (including loss of profits, use, data, or
other economic advantage), however it arises, whether for breach of this
Agreement, including breach of warranty, or in tort, even if that party
has been previously advised of the possibility of such damage. Further,
liability for such damage shall be excluded, even if the exclusive
remedies provided for in this Agreement fail of their essential purpose.
20. Insurance
20.1. Subcontractor agrees to maintain insurance in accordance with the
following:
Workers Compensation & Employer's Liability:
-------------------------------------------
As required under the laws of the states in which the work is
performed with Employer's liability limit not less than $500,000 per
occurrence/annual aggregate.
Commercial General Liability:
----------------------------
Covering all operations of the Subcontractor including product and
completed operations and contractual liability against claims for
personal bodily injury and property damage with a liability limit not
less than $2,000,000 per occurrence/annual aggregate.
Automobile Liability Insurance:
------------------------------
Covering bodily injury and property damage liability arising out of
the use by or on behalf of the Subcontractor, its agents and
employees of any owned, non-owned or hired automobile with combined
limits not less than $100,000.
Errors & Omission Insurance:
---------------------------
Covering loss or damage arising out of negligent acts or errors or
omissions which arise from professional Services provided by
Subcontractor under this Agreement with limits no less than
$1,000,000 per occurrence.
20.2. Such insurance coverage as is required under this Agreement shall be
in form and with insurance carriers satisfactory to Sun and without
additional cost to Sun, unless otherwise provided herein. As evidence
of said coverage, Subcontractor shall forward Certificates of
Insurance, or copies of insurance policies, to Sun, which shall
contain a provision to notify Sun in writing of a cancellation or
non-renewal of said coverages not less than thirty (30) days before
its effective dates.
Page 9 of 14
20.3. The foregoing statements as to the types and limits of insurance
coverage to be maintained by Subcontractor, and any approval or
waiver of said insurance by Sun, is not intended to and shall not in
any manner limit or qualify the liabilities and obligations otherwise
assumed by Subcontractor pursuant to this Agreement, including but
not limited to the provisions concerning indemnification.
21. Termination
This Agreement, or any Purchase Orders issued hereunder, may be
terminated upon the occurrence of any of the following:
a. The liquidation or dissolution of Sun or the Subcontractor;
b. Termination by Sun for Subcontractor's material breach of this
Agreement where such breach continues for a period of thirty (30)
business days following Sun's written notice thereof;
c. Termination by Sun for Subcontractor's failure to remedy any
defect in the Services provided under this Agreement, where such
defect is not cured within thirty (30) business days following
Sun's written Notice of such defect;
d. Termination by Subcontractor for Sun's material breach where such
breach continues for thirty (30) business days following Sun's
receipt of Subcontractor's written notice;
e. The termination of Sun's Customer Contract;
f. Amendment of Sun's Customer Contract such that the specific
Services are no longer required.
22. Assignment
Subcontractor may not assign or delegate obligations under this Agreement,
either in whole or in part, without the prior written consent of Sun. Any
unauthorized assignment or delegation by Subcontractor shall be null and
void, and shall give Sun the right immediately to terminate this Agreement
without liability for Services performed after such terminations. The
rights and liabilities of the parties hereto shall be binding upon and
inure to the benefit of their respective successors, permitted assigns,
executors, and administrators.
23. Permits
Subcontractor shall acquire and maintain in good standing, and at its sole
expense, all permits, licenses and other entitlements required of it in the
performance of Services under this Agreement.
Page 10 of 14
24. No Use of Sun's Name
Subcontractor shall not use Sun's name in any form of publicity or release
without Sun's prior written approval.
25. Dispute Resolution
Any action related to this Subcontract will be governed by California law,
excluding choice of law rules.
26. Attorneys' Fees
In the event that any dispute arises between the parties hereto with regard
to any of the provisions of this Agreement or the performance of any of the
terms and conditions hereof, the prevailing party in any such dispute shall
be entitled to recover costs and expenses associated with resolving such
dispute, including reasonable attorneys' fees.
27. Waiver
The failure of Sun to enforce at any time the provisions of this
Subcontract, to exercise any election or option provided herein, or to
require at any time the performance by Subcontractor of any provisions
herein will not in any way be construed to be a waiver of such provisions.
28. Notices
Any notice required under this Agreement shall be in writing and shall be
sent to the individuals listed below. Notices shall be effective when
received and shall be sent via FAX, certified or registered mail, return
receipt requested, or via overnight carrier.
Sun:
Sun Professional Services
000 Xxx Xxxxxxx Xxxx
Mail Stop: MTV19-220
Xxxx Xxxx, XX 00000
Attn:
Phone:
FAX: 000-000-0000
CUSTOMER:
Attn:
Phone:
FAX:
Email:
Page 11 of 14
29. Severability
If any provision of this Agreement shall be held illegal, unenforceable, or
in conflict with any law of a federal, state, or local government having
jurisdiction over this Agreement, the validity of the remaining portions or
provisions hereof shall not be affected thereby.
30. Entire Agreement
This Agreement and the Exhibits hereto constitutes the entire agreement of
the parties and supersedes all prior or contemporaneous oral or written
communications, proposals and representations with respect to its subject
matter and prevails over any conflicting or additional terms of any quote,
order, acknowledgment, or similar communication between the parties during
the term of this Agreement.
Page 12 of 14
Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Subcontract as of the
day and year first above written.
SUN MICROSYSTEMS, INC. [SUBCONTRACTOR]
By: By:
------------------------------- -------------------------------
(Signature) (Signature)
------------------------------- -------------------------------
(Typed Name) (Typed Name)
------------------------------- -------------------------------
Sun Professional Services
(Title) (Title)
EXHIBIT A - STATEMENT OF WORK
EXHIBIT B - ADDITIONAL TERMS & CONDITIONS
EXHIBIT C - TIMECARD
EXHIBIT D - SUNSCREEN FORM
Page 13 of 14
Exhibit A-(#) -- STATEMENT OF WORK
SUN CUSTOMER NAME: ------------------------------------------------------
SUBCONTRACTOR STATE DATE: ------------------------------------------------------
Page 14 of 14
