EXHIBIT 10.2
PREFERRED PROVIDER AGREEMENT
THIS AGREEMENT entered into as of the 3rd day of June, 1998
AMONG:
MCI SYSTEMHOUSE CORP., a corporation organized pursuant to the
laws of Delaware, together with SHL SYSTEMHOUSE CO., a
corporation continued pursuant to the laws of Nova Scotia, SHL
COMPUTER INNOVATIONS INC., a corporation continued pursuant to
the laws of New Brunswick and SHL TECHNOLOGY SOLUTIONS
LIMITED, a United Kingdom corporation.
(collectively referred to hereinafter as "SYSTEMHOUSE")
AND:
GENERAL PHYSICS CORPORATION, a corporation incorporated under
the laws of Delaware.
(hereinafter referred to as "General Physics ")
WHEREAS the parties SYSTEMHOUSE and General Physics (collectively referred
to as the "Parties" and individually referred to as "Party") have entered into
an Asset Purchase Agreement of even date hereof which contemplates the provision
of training services by General Physics to SYSTEMHOUSE's Customers;
WHEREAS as the Parties have complementary capabilities, products, and
services, and it is to their mutual benefit to cooperate and work together for
the purposes of General Physics providing Services as defined herein to
Customers;
WHEREAS the Parties intend to submit Proposals to Customers in an
effort to secure Contracts with Customers;
WHEREAS SYSTEMHOUSE and General Physics each desire to define their mutual
rights and obligations in connection with any joint marketing efforts, the
preparation and submission of Proposals and in connection with certain matters
which may arise if the Customer enters into a Contract;
NOW THEREFORE, in consideration of the mutual premises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1.0 INTERPRETATION
1.1 In this Agreement the following expressions shall, unless the subject
matter or context is inconsistent therewith, have the respective following
meanings:
"Act of Insolvency" means that:
(i) a Party institutes proceedings for its winding-up, liquidation,
or dissolution or consents to the filing of any petition with
respect thereto or files a petition seeking reorganization,
readjustment, arrangement, composition or similar relief under
applicable law, or consents to the filing of any such petition or
to the appointment of a receiver, liquidator, trustee or similar
officer of itself or any part of its property or makes an
assignment for the benefit of creditors; or
(ii) a court having jurisdiction enters a decree or order for a
Party's winding up, liquidation or dissolution or adjudges it to
be insolvent or enters a decree or order which remains in force,
undischarged or unstayed, for a period of 20 Business Days or
more approving, as properly filed, a petition seeking
reorganization, readjustment, arrangement, composition or similar
relief for any such Party under applicable law, or the
appointment of any receiver, liquidator, trustee or similar
officer of any such party or all or any part of its property; or
(iii) an application is made with respect to a Party under chapter 7 or
chapter 11 of Title 11 of the U. S. Code or similar or replacement
legislation or if a proceeding is instituted for its winding up or a
petition in bankruptcy is presented against it under a bankruptcy or
similar act and such application, proceeding or petition is not
dismissed, stayed or withdrawn within 20 Business Days after such
Party has notice or knowledge of the institution thereof.
"Affiliate" means, with respect to any Person, any other Person which
controls, is controlled by, or is under common control with the subject
entity; a Person which controls an Affiliate under the foregoing shall
also be deemed to be an Affiliate of such entity. For purposes hereof, the
term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of any
such entity whether through the ownership of voting securities, by
contract, or otherwise.
"Agreement" means this agreement, any Schedule or Exhibit hereto, and all
amendments or modifications hereto and thereto.
"Asset Purchase Agreement" means that certain Asset Purchase Agreement
dated as of
the date hereof by and among SHL Systemhouse Co., SHL Computer
Innovations Inc., MCI Systemhouse Corp., SHL Technology Solutions
Limited and General Physics Corporation.
"Business" has the meaning ascribed to it in the Asset Purchase
Agreement.
"Business Day" means a day other than Saturday, Sunday or any day on which
banks located in Toronto, Ontario or New York, New York or London, UK are
not open for business.
"Commission Amounts" means those commission amounts to be paid by General
Physics to SYSTEMHOUSE as set out in Schedule "D".
"Confidential Information" means confidential or proprietary information
disclosed by a Party pursuant to this Agreement, as defined in the
Non-Disclosure Agreement between the Parties attached hereto as Schedule
"B".
"Contract" means a contract entered into by either or both Parties with a
Customer.
"Customer" means an existing or potential customer or end-user of
SYSTEMHOUSE, for whom Services may be performed.
"Customer Opportunity(ies)" means Customer needs for Services rendered by
the Business as of the Closing Date. For the avoidance of doubt, the term
Business shall explicitly exclude custom training and support provided by
SYSTEMHOUSE which is ancillary to the delivery of outsourcing and systems
integration services provided by SYSTEMHOUSE.
"Effective Date" means the Closing Date under the Asset Purchase
Agreement.
"Exhibit(s)" means the attachments to the Schedules listed in Section
1.7.
"Including" means "including without limitation" and is not to be
construed to limit any general statement which it follows to the specific
or similar items or matters immediately following it.
"Master Subcontract Agreement" means the Master Subcontract Agreement to
be entered into by the Parties in the form attached as Schedule "E" on the
Effective Date.
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust,
union, association or governmental or regulatory authority.
"Proposal" means a proposal for the provision of Services pursuant to
this Agreement made by either or both Parties to a Customer.
"Schedule(s)" means the attachments to this Agreement listed in Section
1.7.
"Services" means the training products and services to be provided by
General Physics through the cooperation of the Parties as described
herein
"Subcontractor" means a permitted subcontractor of General Physics
pursuant to Section 3.4 for the execution or supply of all or any portion
of the Services subject to this Agreement.
"Territory" means Canada, the United States and the United Kingdom.
"Transition Services Agreement" means the Transition Services Agreement
between the Parties to be entered into on the Effective Date.
"Work Product" means all original literary, artistic, technical, or other
material made, prepared, developed or produced by either party in the
performance of its obligations pursuant to this Agreement including
documentation, reports, manuals, and flow charts, but excluding ideas,
concepts, know-how or techniques.
1.2 Headings. The division of this Agreement into Sections and the insertion
of recitals and headings are for convenience of reference only and shall
not constitute a part hereof.
1.3 Singular, Plural, Gender. Wherever in this Agreement the context so
requires, the singular number shall include the plural number and vice
versa and any gender herein used shall be deemed to include the feminine,
masculine or neuter gender.
1.4 Agreement. The terms "hereof", "hereto", "herein", "hereunder" and similar
expressions refer to this Agreement and not to any particular Section or
other portion hereof and include any agreement supplemental hereto.
1.5 Entire Agreement. This Agreement, together with the Master Subcontract
Agreement, the Asset Purchase Agreement and the Transition Services
Agreement contain the entire agreement between the Parties with respect to
the transactions contemplated hereunder and thereunder and supersede all
prior arrangements or understandings with respect thereto, written or
oral, other than documents referred to herein. The Parties hereto in
executing and delivering, and in carrying out the provisions of this
Agreement are relying solely on the representations, warranties and
covenants contained in this Agreement or in any writing delivered pursuant
to provisions of this Agreement, and not upon any representation,
warranty, covenant, or information, written or oral, made by any person
other than as specifically set forth herein or therein.
1.6 Amendment or Supplement. This Agreement shall not be modified except by a
subsequently dated written amendment signed on behalf of the Parties
hereto by their duly authorized representatives, and any purchase order
purporting to supplement the provisions hereof shall be void.
1.7 Schedules. The following are the Schedules attached to and forming part of
this Agreement:
Schedule "A" - Co-Marketing Obligations
Schedule "B" - Non-Disclosure Agreement
Schedule "C" - List of Customers and Leads
Schedule "D" - Commission Amounts
Schedule "E" - Master Subcontract Agreement
The terms and conditions of any Schedule or Exhibit are in addition to the
terms and conditions set forth in this Agreement, except where such terms
and conditions of any Schedule conflict or are inconsistent with the terms
and conditions of the main body of this Agreement, in which case the terms
and conditions of the main body of this Agreement shall prevail in all
respects, and those of the Schedules shall prevail over those of the
Exhibits.
1.8 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated herein is not affected in
any manner materially adverse to any party hereto. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in a mutually acceptable manner.
1.9 Governing Law. This Agreement and the legal relations between the Parties
hereto shall be governed by and construed in accordance with the laws of
the State of New York, without reference to conflict of law provisions.
The Parties agree that the United Nations Convention on Contracts for the
International Sale of Goods is specifically excluded from application to
this Agreement.
1.10 Date for Action. In the event that any date on which any action is
required to be taken hereunder by any of the Parties is not a Business
Day, such action shall be required to be taken on the next succeeding day
which is a Business Day unless otherwise provided in this Agreement.
1.11 Currency. All references to currency are deemed to mean United States
dollars unless expressed to be in some other currency.
2.0 TERM
2.1 This Agreement shall be deemed effective as of the Effective Date and
shall continue in full force and effect for an initial term of three (3)
years unless earlier terminated in accordance with Section 10.0 herein.
Upon expiration of the initial three-year term this Agreement shall renew
for an additional two (2) year term (the "Renewal Term"), under the same
terms and conditions as the initial term, except for the Commission
Amounts defined in Schedule "D", provided General Physics' performance
during the initial term is deemed satisfactory. The Parties agree prior to
the expiration of the initial term to negotiate, in good faith, mutually
agreeable Commission Amounts defined in Schedule "D" for Services for the
Renewal Term and failing such agreement the Agreement will terminate. For
those Customer Opportunities for which a Proposal has been submitted to
the Customer prior to the termination of this Agreement (for purposes of
this sub-Section), the terms of this Agreement will survive and apply to
Proposals accepted by a Customer within six (6) months from the date of
termination of this Agreement unless the Parties otherwise mutually agree
to extend such period.
3.0 RELATIONSHIP OF THE PARTIES
3.1 The Parties hereby agree to collaborate in order to mutually identify and
develop, subject to the terms and conditions of this Agreement, suitable
Customer Opportunities. Customer Opportunities will be pursued pursuant to
the requirements set forth in Schedule "A" hereto.
3.2 The Parties hereto shall be deemed to be independent contractors, and the
employees of one shall not be deemed to be employees of the other. Neither
party shall act as the agent of the other, and neither party shall have
any authority to, or shall attempt to, bind or commit the other party for
any purposes except as expressly provided herein. This Agreement is not
intended by the Parties, and shall not be deemed, to constitute or create
a joint venture, joint enterprise, partnership, or formal business
organization of any kind whatsoever.
3.3 Each Party expressly understands and agrees that the other Party may,
subject to the terms and conditions of this Agreement, sell its respective
products and services in the ordinary course of its business to third
parties.
3.4 General Physics shall not subcontract any of its obligations hereunder to
any Person without the prior written approval of SYSTEMHOUSE save and
except, with prior written notice to SYSTEMHOUSE, to an Affiliate. Any
such Subcontractor must agree in writing in advance to be bound by
confidentiality standards no less restrictive than those set forth in
Schedule "B" - Non-Disclosure Agreement. General Physics shall be liable
for the acts or omissions of its Subcontractors under this Agreement.
3.5 Nothing in this Agreement shall be construed as providing for the sharing
of profits or losses arising out of the efforts of the Parties.
3.6 Neither Party shall make any warranties, express or implied, concerning
the performance of the products or services of the other Party, including
without limitation fitness for a particular purpose.
4.0 RESPONSIBILITIES OF THE PARTIES
4.1 In addition to the responsibilities set forth in this Agreement, the
Parties agree to the additional responsibilities set out in the Schedules.
4.2 General Physics shall use commercially reasonable efforts to formulate
Proposals and do all things appropriate and necessary to secure the award
of a Contract in accordance with the responsibilities outlined herein.
4.3 General Physics will provide to SYSTEMHOUSE for SYSTEMHOUSE's use to
assist, as necessary, in preparing a Proposal or in responding to
subsequent inquiries from the Customer, the following:
(i) such business information as a Customer, acting in a commercially
reasonable manner, deems necessary for selecting General Physics as
a supplier;
(ii) technical data and information related to the Proposal;
(iii) drafts of relevant portions of a Proposal, if applicable;
(iv) prototypes and working demonstrations of its products and services
where the cost of same is reasonable;
(v) reasonable cost and pricing data for its portion of the Proposal as
requested by Customer, if applicable; and
(vi) commercially reasonable access to key General Physics' personnel.
4.4 The Parties agree to work with each other in all applicable areas,
including but not limited to Proposal preparation, demonstration,
submission and presentations to Customer, if applicable.
4.5 General Physics will designate one or more individuals within its
organization as their representative(s) responsible to direct performance
of General Physics' obligations under this Agreement (respectively, the
"Proposal Contacts"). The following Proposal Contacts, who may be replaced
or changed upon written notice to SYSTEMHOUSE from time to time, are named
for the purposes herein:
For General Physics: Name: Roger St. Germain
Address: 10025 Governor Warfield Parkway
Suite 400, 1 Mall North
Columbia, Maryland
21044
Phone: 410-910-8600
Fax: 410-910-8601
And: Name: John McAuliffe
Address: 6700 Alexander Bell Drive, Suite 400
Columbia, Maryland 21046
Phone: 410-290-2300
Fax: 410-290-2646
4.6 Each Party will advise the other Party in a timely manner of any changes
in a Customer Opportunity which may affect any Party's areas of
responsibility. In the event of such changes, the Parties will enter into
good faith negotiations to revise a Proposal to increase or decrease the
proposed obligations to be performed by each Party thereunder and the
associated impacts on pricing.
5.0 DISPUTE RESOLUTION
5.1 The Parties hereto agree to attempt to settle any dispute, controversy or
difference which may arise between or among them in connection with this
Agreement or any Schedule or Exhibit attached hereto (except as otherwise
expressly contemplated by this Agreement or any such Schedule or Exhibit)
by good faith discussions between or among representatives designated by
the Parties to the dispute. During the course of the discussions between
or among such representatives, the Parties will comply with all reasonable
requests for access to relevant information. The specific format for such
discussions will be left to the discretion of the designated
representatives but may include the preparation of agreed upon statements
of fact or written statements of position furnished to the other Party.
5.2 If resolution cannot be achieved by the Parties within five (5) Business
Days of referral to such representatives, then arbitration may be
conducted upon written notice to the other Party demanding arbitration in
accordance with Section 5.3 below.
5.3 Without prejudice to either Party's right to seek equitable relief
(including, but not limited to, injunction) from a court, any dispute
arising out of or related to this Agreement, which cannot be resolved by
negotiation, shall be settled by binding arbitration in accordance with
the J.A.M.S./ENDISPUTE arbitration rules and procedures ("Endispute
Rules") and in accordance with the terms of this Article 5. The costs of
arbitration, including the fees and expenses of the arbitrator, shall be
shared equally by the Parties unless the arbitration award provides
otherwise. Each Party shall bear the cost of preparing and presenting its
case. The Parties agree that this provision and the Arbitrator's authority
to grant relief shall be subject to the United States Arbitration Act, 9
U.S.C. 1-16 et seq.("USAA"), the provisions of this Agreement, and the
ABA-AAA Code of Ethics for Arbitrators in Commercial Disputes. The Parties
agree that the arbitrator shall have no power or authority to make awards
or issue orders of any kind except as expressly permitted by this
Agreement, and in no event shall the arbitrator have the authority to make
any award that provides for punitive or exemplary damages. The
arbitrator's decision shall follow the plain meaning of the relevant
documents, and shall be final and binding. The award may be confirmed and
enforced in any court of competent jurisdiction. All post-award
proceedings shall be governed by the USAA.
5.4 No action, claim or proceeding arising out of this Agreement, regardless
of the form thereof, may be brought by either Party more than one (1) year
following the later of (i) the termination of this Agreement, or (ii) the
date upon which the cause of action became known to the Party initiating
such action.
6.0 REPRESENTATIONS AND WARRANTIES
6.1 SYSTEMHOUSE represents, warrants and covenants to General Physics that:
(i) the entering into and performance of this Agreement is not
restricted or limited by, and, subject to obtaining the consents
specified in Schedule "C", will not result in a breach by
SYSTEMHOUSE of, any other material obligations, duties, or agreement
to or with any Person;
(ii) it has the authority, unencumbered right, and full corporate power,
to enter into and perform this Agreement; and
(iii) this Agreement has been duly authorized, executed and delivered by
SYSTEMHOUSE and constitutes a valid, binding and legally enforceable
agreement of SYSTEMHOUSE.
6.2 General Physics represents, warrants and covenants to SYSTEMHOUSE that:
(i) the entering into and performance of this Agreement is not
restricted or limited by, and will not result in a breach by General
Physics of, any other material obligations, duties, or agreement to
or with any Person;
(ii) it has the authority, unencumbered right, and full corporate power,
to enter into and perform this Agreement;
(iii) this Agreement has been duly authorized, executed and delivered by
General Physics and constitutes a valid, binding and legally
enforceable agreement of General Physics; and
(iv) notwithstanding any other provision in this Agreement, throughout
the term and any renewals or extensions of this Agreement, the
pricing to SYSTEMHOUSE for a Customer Opportunity(ies) shall be
equal to or less than pricing otherwise made available by General
Physics to Customers, and all other customers, end-users, or
resellers unless such Person has, as it relates to similar
products and services of the Business, an annual volume of sales
of products and services materially greater than SYSTEMHOUSE's
projected annual volume of sales unless otherwise mutually agreed
upon by both SYSTEMHOUSE and General Physics.
6.3 THE OBLIGATIONS OF GENERAL PHYSICS EXPRESSLY STATED IN THIS AGREEMENT ARE
IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS EXPRESS OR IMPLIED. WITHOUT
LIMITATION, TO THE FULLEST EXTENT ALLOWABLE BY LAW, THIS EXCLUSION OF ALL
OTHER WARRANTIES AND CONDITIONS EXTENDS TO IMPLIED WARRANTIES OR
CONDITIONS OF NON-INFRINGEMENT, SATISFACTORY QUALITY, MERCHANTABLE QUALITY
AND FITNESS FOR A PARTICULAR PURPOSE, AND THOSE ARISING BY STATUTE OR
OTHERWISE IN LAW, OR FROM A COURSE OF DEALING OR USAGE OF TRADE.
7.0 AUDITS AND REPORTS
7.1 SYSTEMHOUSE shall have the right upon reasonable notice to audit the
records of General Physics to ensure that General Physics is in compliance
with this Agreement. Any such audit shall be conducted during regular
business hours at General Physics' offices, in such a manner as not to
interfere with General Physics' normal business activities and only by a
third party independent auditor (chosen by SYSTEMHOUSE) who is a certified
public accountant. Such independent auditor shall hold all information
obtained from General Physics in confidence and shall report to
SYSTEMHOUSE only to verify that General Physics' pricing to SYSTEMHOUSE is
in accordance with sub-Section 6.2 (iv) and on the accuracy of any amounts
due and payable to SYSTEMHOUSE hereunder. In no event shall audits be
conducted more frequently than semi-annually. Within sixty (60) days of
receipt of a request from SYSTEMHOUSE, the independent auditor shall
provide SYSTEMHOUSE and General Physics with a report as to the amount, if
any, payable to SYSTEMHOUSE according to the provisions of this Agreement,
for the period specified in SYSTEMHOUSE's request. Any amount shown to be
payable which has not yet been paid to SYSTEMHOUSE pursuant to this
Agreement, shall be paid forthwith. In making the report, the independent
auditor shall be deemed for all purposes to be acting as an expert and not
an arbitrator and the determination of the independent auditor shall be
final and shall not be disputed by either Party unless shown to be
materially in error within thirty (30) days of such determination.
7.2 If any such audit reveals that any amount is owed to SYSTEMHOUSE, General
Physics shall immediately pay such amount together with any interest due.
If the amount is within five percent (5%) of the amount previously
reported by General Physics, SYSTEMHOUSE shall pay for such audit and if
the number is greater than five percent (5%), then General Physics shall
pay the reasonable costs of such audit.
7.3 General Physics shall maintain complete, true and accurate accounting and
business books and records regarding its activities under this Agreement
in accordance with generally accepted accounting principles. General
Physics shall retain such books and records for not less than two (2)
years following the date of final payment hereunder.
8.0 INTELLECTUAL PROPERTY RIGHTS
8.1 Except as expressly provided herein, ownership of any Work Product or
other intellectual property developed or otherwise arising pursuant to
this Agreement shall be treated as prescribed by the Master Subcontract
Agreement.
8.2 Subject to Schedule "A" - Co-Marketing Obligations, this Agreement shall
not preclude the Parties from developing materials or providing services
which are competitive to the Work Product irrespective of their similarity
to documentation or other materials or Services which might be delivered
pursuant to this Agreement, except to the extent any of same may infringe
any of the other party's or its Subcontractors' or suppliers' patent,
copyright or other proprietary rights or Confidential Information.
9.0 PUBLICITY
9.1 Except as may be required by law or by the rules, regulations or by-laws
of any stock exchange or securities regulator, neither Party will make any
news release, public announcement, advertisement, or publicity concerning
the existence or contents of this Agreement, a Proposal, any resulting
Contract, or any subcontract, without the prior written approval of the
other Party and Customer as may be required. Any such publicity shall give
due credit to the contributions of each Party.
9.2 Each Party will:
(i) conduct business in a manner that reflects favorably at all times on
the good name, goodwill and reputation of the other Party;
(ii) not engage or cooperate in deceptive, misleading or unethical
practices or representations that are or might be detrimental to the
other Party or reflect adversely on the other Party's products or
services;
(iii) not make any representations to anyone with respect to the
specifications, features or capabilities of the other Party's
products or services that are inconsistent with the literature
distributed by the other Party, including all disclaimers contained
in such literature, this Agreement or any Schedule or Exhibit
hereunder;
not make any warranty or representation in respect of the subject
matter of this Agreement to anyone that would give the recipient any
claim or right of action against the other Party;
(v) not infringe any patent, copyright, trade secret, trade mark or
other proprietary right in connection with any published advertising
or promotional materials produced by such Party and provided to the
other Party pursuant to this Agreement; and
(vi) shall discharge all of its obligations hereunder in a proper,
efficient and business-like manner using persons with skills and
experience appropriate to their function.
10.0 TERMINATION AND CHANGE OF CONTROL
10.1 This Agreement shall automatically expire and be deemed terminated
effective upon the date of the occurrence of any one of the following
events, whichever shall first occur:
(i) mutual agreement of the Parties to terminate the Agreement;
(ii) any Act of Insolvency by or in respect of any Party;
(iii) material breach of this Agreement by any Party with such breach
remaining unremedied within thirty (30) days after written notice to
the breaching Party specifying the nature of the breach.
10.2 In the event of termination of this Agreement for any reason whatsoever,
General Physics shall immediately, at SYSTEMHOUSE's option and request,
document the status of the Work Product and Services that have been
terminated and either deliver or cause to be delivered to SYSTEMHOUSE or,
alternatively, dispose of in accordance with SYSTEMHOUSE's instructions,
all Work Product, documentation in progress in its or in any
Subcontractor's possession. Except for termination by reason of General
Physics' material breach of this Agreement, SYSTEMHOUSE shall pay General
Physics for the portion of unpaid Services performed prior to the
effective date of termination.
10.3 Notwithstanding anything to the contrary contained herein, in the event of
a change of control of SHL Systemhouse Co. or MCI Systemhouse Corp. to a
non-affiliated Person (excepting only SHL Systemhouse Co.'s and MCI
Systemhouse Corp.'s parent company's pending acquisition by WorldCom,
Inc.), who owns, manages or is a participant (other than a stockholder
holding less than 1% of the total number of outstanding shares of any
class of stock) in any business which competes with the Business, as it is
conducted on the Effective Date, on the date the change in control occurs,
the terms of this Agreement and the Schedules and Exhibits hereto shall be
automatically amended, as follows:
(i) with respect to those Customers for whom General Physics is
providing Services on such date or to whom they have submitted a
Proposal which remains open or to whom General Physic have provided
Services in the six months prior to the date the change in control
occurs General Physics shall have the right to continue to provide
Services to all such Customers on a right of first refusal basis
pursuant to the terms of this Agreement. Such right shall continue
until the expiration of this Agreement, unless it is earlier
terminated in accordance with Section 10.0 hereof.
(ii) with respect to all other Customers, SYSTEMHOUSE, may in its sole
discretion, utilize General Physics or any other third party,
including an Affiliate, to provide Services to such Customers.
(iii) General Physics will no longer be identified within the Territory as
SYSTEMHOUSE's "Preferred Provider".
10.4 The Parties' rights and obligations under Section 1.0 "Interpretation",
Section 2.0 "Term", sub-Section 5.4, sub-Section 6.2, sub-Section 6.3,
"Section 7.0 "Audits and Reports", Section 8.0 "Intellectual Property
Rights", sub-Section 9.1, Section 10.0 "Termination", Section 11.0
"Liability", Section 12.0 "Indemnity" and Section 13.0 "General" and those
provisions of the Non-Disclosure Agreement, Schedule B, that survive in
accordance with the terms thereof, shall survive termination or expiration
of this Agreement for any reason.
11.0 LIABILITY
11.1 NEITHER PARTY NOR ITS AFFILIATES OR SUPPLIERS WILL BE LIABLE FOR ANY LOSS
OF USE, INTERRUPTION OF BUSINESS, OR ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND REGARDLESS OF THE FORM OF ACTION WHETHER
IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR ANY
OTHER LEGAL OR EQUITABLE THEORY EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
11.2 IN NO EVENT WILL EITHER PARTY'S OR THEIR RESPECTIVE AFFILIATES' AGGREGATE
CUMULATIVE LIABILITY TO THE OTHER PARTY FOR ANY CLAIMS ARISING OUT OF OR
RELATED TO THIS AGREEMENT EXCEED THE AMOUNTS PAID TO OR EARNED BY SUCH
PARTY PURSUANT TO THIS AGREEMENT.
11.3 The limitations on SYSTEMHOUSE's and its Affiliates' liability set forth
in sub-Section 11.2 shall not apply to claims relating to or arising under
SYSTEMHOUSE's obligation to protect the Confidential Information of
General Physics or its Affiliates arising under this Agreement and to
claims relating to or arising from damage to real or tangible property or
personal injury or death caused by the intentional or negligent acts or
omissions of SYSTEMHOUSE, its Affiliates or their respective personnel in
performance of any Services hereunder
11.4 The limitations on General Physics' and its Affiliates' liability set
forth in sub-Section 11.2 above shall not apply to claims relating to or
arising under General Physics' obligation to protect the Confidential
Information of SYSTEMHOUSE or its Affiliates arising under this Agreement
and to claims relating to or arising from damage to real or tangible
property or personal injury or death caused by the intentional or
negligent acts or omissions of General Physics, its Affiliates or their
respective personnel in performance of any Services hereunder.
11.5 THE PARTIES HAVE AGREED THAT THE LIMITATIONS SPECIFIED IN THIS SECTION 11
WILL SURVIVE AND APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS
AGREEMENT IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.
12.0 INDEMNITY
12.1 General Physics' Indemnity. General Physics, at General Physics' own
expense, shall defend, hold harmless and indemnify SYSTEMHOUSE, its
Affiliates, and its and their respective directors, officers, employees
and agents, from and against any and all claims, costs, liabilities,
damages, losses or expenses (including without limitation reasonable
attorneys' fees) arising from: (i) any breach of a representation or
warranty or nonfulfillment of or failure to perform any covenant or
agreement on the part of General Physics contained in this Agreement, (ii)
third party claims of injury to or death of any person or loss of or
damage to any real and tangible property to the extent caused by the
intentional or negligent acts or omissions of General Physics, its
Affiliates or their respective personnel in the performance of any
Services hereunder; or (iii) any General Physics personnel being declared
to have "employee" status with respect to SYSTEMHOUSE. SYSTEMHOUSE or the
applicable SYSTEMHOUSE Affiliate shall: (i) promptly notify General
Physics in writing of the claim; (ii) grant General Physics sole control
of the defense and all related settlement negotiations; and (iii) provide
General Physics with the assistance, information and authority necessary
to perform General Physics' obligations under this Section 12.1. General
Physics will reimburse SYSTEMHOUSE's and its Affiliates' reasonable
out-of-pocket expenses incurred in providing such assistance. To the
extent any failure by SYSTEMHOUSE or its Affiliate to perform any of the
foregoing directly has an adverse impact on General Physics' liability to
the applicable third party, General Physics shall be entitled to reduce
the amount of its indemnification exposure hereunder by the amount of such
adverse impact. SYSTEMHOUSE or its Affiliate may, at its own expense, be
represented in such defense.
12.2 SYSTEMHOUSE Indemnity. SYSTEMHOUSE, at SYSTEMHOUSE's own expense, shall
defend, hold harmless and indemnify General Physics, its Affiliates, and
its and their respective directors, officers, employees and agents, from
and against any and all claims, costs, liabilities, damages, losses or
expenses (including without limitation reasonable attorneys' fees) arising
from (i) any breach of a representation or warranty or nonfulfillment of
or failure to perform any covenant or agreement on the part of SYSTEMHOUSE
contained in this Agreement, or (ii) third party claims of injury to or
death of any person or loss of or damage to any real of tangible property
to the extent caused by the intentional or negligent acts or omissions of
SYSTEMHOUSE, its Affiliates or their respective personnel in the
performance of any Services hereunder. General Physics or the applicable
General Physics Affiliate shall: (i) promptly notify SYSTEMHOUSE in
writing of the claim; (ii) grant SYSTEMHOUSE sole control of the defense
and all related settlement negotiations; and (iii) provide SYSTEMHOUSE
with the assistance, information and authority necessary to perform
SYSTEMHOUSE'S obligations under this Section 12.2. SYSTEMHOUSE will
reimburse General Physics' and its Affiliates' reasonable out-of-pocket
expenses incurred in providing such assistance. To the extent any failure
by General Physics or its Affiliate to perform any of the foregoing
directly has an adverse impact on SYSTEMHOUSE's liability to the
applicable third party, SYSTEMHOUSE shall be entitled to reduce the amount
of its indemnification exposure hereunder by the amount of such adverse
impact. General Physics or its Affiliate may, at its own expense, be
represented in such defense.
13.0 GENERAL
13.1 Notices. All notices or reports permitted or required under this Agreement
shall be in writing and shall be by personal delivery, facsimile
transmission, or by certified or registered mail, return receipt
requested, and shall be deemed given upon personal delivery, five (5) days
after deposit in the mail, or upon acknowledgment of receipt of facsimile
transmission. Notices shall be sent to the addresses set forth below, or
such other address as either Party may specify in writing.
For SYSTEMHOUSE: 100 University Avenue
11th Floor
Toronto, Ontario, Canada M5J 1V6
Telephone: (416) 813-1315
Facsimile: (416) 813-1398
Attn: Jim Laramie
with a copy to: 100 University Avenue
11th Floor
Toronto, Ontario, Canada M5J 1V6
Telephone: (416) 813-1313
Facsimile: (416) 813-1399
Attn: John LaCalamita
For General Physics: General Physics Corporation
6700 Alexander Bell Drive, Suite 400
Columbia, Maryland 21046
Telephone: 410-290-2300
Facsimile: 410-290-2646
Attn: John McAuliffe
with a copy to: Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Telephone: 212-309-6000
Facsimile: 212-309-6273
Attn: David W. Pollak
13.2 Force Majeure. Neither Party shall be liable hereunder by reason of any
failure or delay in the performance of its obligations hereunder (except
for the payment of money) on account of strikes, riots, insurrection,
fires, flood, storm, explosions, acts of God, war, governmental action,
labor conditions, earthquakes, material shortages or any other cause which
is beyond the reasonable control of such Party.
13.3 Assignment. Neither this Agreement nor any rights or obligations of
General Physics or SYSTEMHOUSE hereunder may be assigned by such Party in
whole or in part without the prior written approval of the other Party
provided each of the Parties shall have the right to transfer or assign
any of its rights and obligations under this Agreement, either in whole or
in part, to an Affiliate without the prior written consent of the other
Party but with prior written notice, provided that no such assignment or
transfer shall relieve a Party of any obligation or liability under this
Agreement. Any assignment in violation of this Section shall be void and
of no effect.
13.4 Waiver. The failure of either Party to require performance by the other
Party of any provision hereof shall not affect the full right to require
such performance at any time thereafter; nor shall the waiver by either
Party of a breach of any provision hereof be taken or held to be a waiver
of the provision itself. No failure on the part of any Party hereto to
exercise and no delay in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy by any Party preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy. No express waiver or consent by any Party hereto to any breach of
or default in any term or condition of this Agreement shall constitute a
waiver or an assent to any succeeding breach of or default in the same or
any other term or condition hereof.
13.5 Warranty. Each Party acknowledges that it has read this Agreement,
understands it and agrees to be bound by it.
13.6 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be considered an original, but all of
which together will constitute one and the same instrument.
13.7 No Third Party Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of each Party hereto and their respective
successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person
other than any Person entitled to indemnity under Article 12.
13.8 Further Assurances. Each Party agrees that upon the written request of the
other Party, it shall do all such acts and execute all such further
documents, conveyances, deeds, assignments, transfers and the like, and
shall cause the doing of all such acts and shall cause the execution of
such further documents as are within its powers to cause the doing and
execution of, as the other Party hereto may from time to time reasonably
request be done and/or executed as may be necessary or desirable to give
effect to this Agreement.
13.9 Time of Essence. Time is of the essence of this Agreement.
13.10 Governmental Alteration or Modification. If, at any time during the term
of this Agreement, any government or agency of any jurisdictions of the
Territory should, directly or indirectly, alter or modify any term or
condition of this Agreement by legislation or by-law, in a manner which is
material or materially adverse to any Party hereto, or if any Party is
unable to receive any payments contemplated by this Agreement as the
result of any such governmental action, then such Party may, in its sole
discretion, terminate this Agreement forthwith in its entirety by giving
written notice to that effect to the other Party hereto. It is expressly
understood and agreed by the Parties hereto that in the event of such
termination the Party electing to terminate this Agreement pursuant to
this sub-Section shall incur no liability whatsoever to the other Party
hereto for any alleged default or breach in the performance of this
Agreement arising from the exercise of the right herein provided to
terminate this Agreement.
13.11 Compliance with Laws. Each Party shall comply with, and abide by, all
consents, licenses, and permits that may exist concerning its activities
and/or performance obligations under this Agreement, and each Party shall
perform its obligations under this Agreement and otherwise conduct its
affairs and business in any connection with this Agreement in strict
compliance with all laws, by-laws, regulations, orders, judgments and
governmental rulings and decrees. Without limiting the foregoing, neither
Party shall attempt, or otherwise undertake, to influence the award of a
Contract through any unethical, illegal, fraudulent, deceptive nor
misrepresentative means whatsoever. Each Party hereby represents, warrants
and covenants that it is not an agent or employee of any customer or
client of the other Party, and that it shall not receive, be paid, or have
any entitlement to any commission, reward, payment, advantage, benefit or
consideration of any kind from any Person other than the other Party in
any connection with the performance of this Agreement or any Contract.
13.12 Due Diligence. Each Party hereto acknowledges (i) the risks of its
undertakings hereunder; (ii) the uncertainty of the benefits and
obligations hereunder; and (iii) its assumption of such risks and
uncertainty.
13.13 The Parties agree and confirm that the restrictions set out in this
Agreement, including the preferred status conferred herein: (i) are fair
and reasonable in the commercial circumstances of this Agreement; (ii)
reasonably protect the legitimate business interests of the Parties and do
not constitute any undue restraint of trade; (iii) are fair and reasonably
in the interests of the Parties because (a) the consideration provided to
each Party under this Agreement adequately and fairly compensates such
Party in connection with such restrictions, and (b) neither Party would
have entered into this Agreement but for the other Party's agreement with
such restrictions and that such restrictions have been an inducement to
enter into this Agreement.
13.14 Merger. The Parties agree and acknowledge that none of the warranties,
representations and covenants contained in this Agreement shall merge upon
either the execution and delivery of this Agreement by both Parties, or
upon the full payment (or any partial payments) of any monies that are due
and payable hereunder and that all such warranties, representations, and
covenants shall continue in full force and effect throughout the term.
13.15 Compliance with UK Restrictive Trade Practices Act 1976. If there is any
provision of this Agreement or of any agreement or arrangement of which
this Agreement forms part which causes or would cause this Agreement or
that agreement or arrangement to be subject to registration under the UK
Restrictive Trade Practices Act 1976, then that provision shall not take
effect until the day after particulars of this Agreement or that agreement
or arrangement (as the case may be) have been furnished to the UK Director
General of Affair Trading pursuant to Section 24 of the Restrictive Trade
Practices Act 1976.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives.
SHL SYSTEMHOUSE CO.
By: _________________________
Name: _________________________
Title: _________________________
Date: _________________________
SHL TECHNOLOGY SOLUTIONS LIMITED
By:
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Name:
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Title:
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Date:
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MCI SYSTEMHOUSE CORP.
By:
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Name:
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Title:
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Date:
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SHL COMPUTER INNOVATIONS INC.
By:
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Name:
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Title:
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Date:
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GENERAL PHYSICS CORPORATION
By: _________________________
Name: _________________________
Title: _________________________
Date: _________________________