Exhibit 10.13
[Letterhead of Celerity Systems]
3/31/93
Letter of Agreement
Celerity Systems, Inc. is hereby contracted by Herzog, Heine, and Geduld, Inc.
to develop the Back Office System Proposal of January 21, 1993.
The overall scope of the project is provided in the aforementioned proposal. The
first step of the project will provide detailed specifications of the project.
A timeline will be developed as a part of the first step, which will show the
chronology of the steps and related deliverables. Each step of the overall
project will be considered complete upon approval of Herzog, Heine, and Geduld.
/s/ Mahmoud Youssefi /s/ Herzog, Heine, and Geduld, Inc.
- -------------------- -----------------------------------
Mahmoud Youssefi Herzog, Heine, and Geduld, Inc
Managing Director
Celerity Systems, Inc.
DEVELOPMENT AGREEMENT
TABLE OF CONTENTS
PAGE
----
1.0 DEFINITIONS.......................................................... 1
2.0 STATEMENT OF WORK.................................................... 3
3.0 MAINTENANCE SERVICES................................................. 3
4.0 OWNERSHIP OF MATERIALS............................................... 4
5.0 PRICE AND PAYMENT.................................................... 4
6.0 ACCEPTANCE........................................................... 5
7.0 CHANGES.............................................................. 7
8.0 COPYRIGHT............................................................ 8
9.0 WARRANTY............................................................. 8
10.0 INDEMNIFICATION...................................................... 9
11.0 TERM AND TERMINATION................................................. 10
12.0 CONFIDENTIAL INFORMATION............................................. 11
13.0 COMPLIANCE WITH LAWS................................................. 12
14.0 GENERAL.............................................................. 12
ATTACHMENTS
Attachment I -- REQUIREMENTS ANALYSIS
Attachment II -- SCHEDULE
Attachment III -- DOCUMENTATION
Attachment IV -- MAINTENANCE AGREEMENT
SOFTWARE-DEVELOPMENT AGREEMENT
This Development Agreement (hereinafter "Agreement") is made effective as of the
____ day of ______________, ____, by and between Celerity Systems, Inc.,
incorporated under the laws of the State of Tennessee, U.S.A., having an office
for the transaction of business at 9051 Executive Park Drive, Knoxville,
Tennessee 37923 (hereinafter referred to as "CSI"), and Herzog Heine Geduld,
Inc., organized under the laws of the State of __________, having an office for
the transaction of business at _________________ (hereinafter referred to as
"Herzog").
1.0 DEFINITIONS
The definitions set forth in this Section shall apply to the following
capitalized words and terms when used in this Agreement.
1.1 "Code" shall mean that computer program code, in source, object and
load executable form, licensed to Herzog, and more fully described
in Attachment III, and Support thereof, and any additional computer
program code provided by CSI to Herzog hereunder. Code shall include
newly created sounds and visuals, including screens music and
characters, displayed or heard as a result of the execution of the
Code.
1.2 "Documentation" shall mean written materials itemized in Attachment
III, and Support thereof, furnished hereunder to Herzog by CSI.
1.3 "Derivative Work" shall mean a work which is based upon one or more
preexisting work(s), such as a revision, modification, translation,
abridgement, condensation, expansion, collection, compilation or any
other form in which such preexisting works may be recast,
transformed or adapted, and which, if prepared without authorization
by the owner of the preexisting work, would constitute a copyright
infringement.
1.4 "Error" shall mean any one or more of the following conditions:
(a) a function described in Attachment I which is omitted from the
Code; or
(b) a function of the Code which does not operate or gives
incorrect results; or
(c) a function or user interface in the Code which does not
operate satisfactorily in the environment for which it was
designed; or
(d) a failure of the Documentation to accurately describe a
function contained in Attachment III; or
(e) a failure of the Documentation to enable the intended user to
correctly operate Code.
1.5 "Maintenance" shall mean modifications, revisions or additions which
provide Error corrections for Code or Documentation.
1.6 "Modifications" shall mean modifications, revisions or additions
made to the Code or Documentation other than Maintenance.
1.7 "Work" shall mean the goods, products, services, supplies,
performance, documents, software, data, drawings or other items
constituting the subject matter of this Agreement which are
furnished by CSI to Herzog.
1.8 "Object Code" shall mean the machine-readable form of computer
program code.
1.9 "Source Code" shall mean the human-readable form of computer program
code and related system documentation, including all comments and
any procedural code such as job control language.
1.10 "Subsidiary" shall mean a corporation, company or other entity: 1)
more than (50%) of whose outstanding shares or securities
(representing the right, other than as affected by events or
default, to vote for the election of directors or other managing
authority) are; or 2) which does not have outstanding shares or
securities, as may be the case in a partnership, joint venture or
unincorporated association, but more than (50%) of the ownership
interest representing the right to make the decisions for such
corporation, company or other entity is; now or hereafter, owned or
controlled, directly or indirectly, by a party hereto; but such
corporation, company or other entity shall be deemed to be a
Subsidiary only so long as such ownership or control exists.
2.0 STATEMENT OF WORK
CSI agrees to perform the Work set forth in this Section, only pursuant to
Herzog Purchase Orders issued hereunder for the compensation specified in
Section 5.0.
CSI shall design, develop, code, integrate and test the Code in accordance
with the specifications of the approved Requirements Analysis.
CSI shall deliver one (1) copy of the Object Code and Source Code of the
Code to Herzog for Herzog's testing and approval.
CSI shall deliver Documentation as set forth in Attachment III in
preliminary form sufficient for Herzog's verification of the Code design,
and then in final form after Herzog's approval. Such information shall be
in a format suitable for Herzog's preparation of an End User's Manual.
CSI shall provide technical assistance to Herzog during Code verification
testing. CSI shall debug the Code as required in order to pass these
tests, and revise the design documentation accordingly.
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Within ten (10) days of Herzog's request, and at no additional charge, CSI
shall deliver to Herzog such data necessary to maintain and operate the
Code delivered hereunder or to conduct further development efforts with
respect to the Code.
CSI shall integrate and test additional specific software, as indicated in
Attachment I, along with the Code.
3.0 MAINTENANCE SERVICES
3.1 CSI agrees to maintain the ability to provide Maintenance to Herzog,
and agrees to provide such Maintenance at terms, conditions and
prices substantially as set forth in Attachment V. Herzog is under
no obligation to utilize or purchase such Maintenance from CSI.
4.0 OWNERSHIP OF MATERIALS
4.1 All Code and Documentation delivered to Herzog hereunder, shall
belong exclusively to CSI.
4.2 CSI hereby grants Herzog an irrevocable, nonexclusive, royalty-free,
paid-up license to use, execute, reproduce, display, distribute
internally and prepare Derivative Works of the Code and
Documentation.
5.0 PRICE AND PAYMENT
5.1 Price
Subject to the terms and conditions of this Agreement, and in
consideration for the rights and licenses granted to Herzog herein,
Herzog will pay to CSI the fixed price of Two Hundred Twenty-Five
Thousand Dollars ($210,000.00).
5.2 Payment
Without limiting the obligation of CSI to comply with all the
requirements of this Agreement, CSI will submit invoices and Herzog
will pay for Work completed according to this Agreement on the
following schedule:
DATE DESCRIPTION AMOUNT PERCENT
---- ----------- ------ -------
6/13/93 Requirements Analysis $ 15,000 7.14%
7/19/93 LAN/HUB 3270 $ 35,000 16.67
Connectivity
8/26/93 Phase 1 Prototype 45,000 21.43
9/20/93 Phase 1 Completion 55,000 26.19
12/16/93 Phase 2 $ 60,000 28.57
-------- ------
Total $210,000 100.00%
======== ======
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All payments are exclusive of any tariffs, duties, or taxes imposed or
levied by any government or governmental agency. Herzog shall be
responsible for payment of all such taxes, however designated, levied, or
based upon Herzog's possession or use of the Code and the Documentation,
or in this Agreement, including without limitation, state or local sales,
use and personal property taxes.
5.3 Herzog shall reimburse CSI for actual and reasonable travel and
living expenses incurred by CSI employees while performing Work at
Herzog facilities. Such Work shall be authorized by Herzog prior to
CSI incurring any expenses. CSI shall invoice such authorized travel
and living expenses at cost. Copies of all receipts shall accompany
any invoice submitted to Herzog.
5.4 Herzog shall pay to CSI the applicable amount within fifteen (15)
days net after receipt of an invoice in which CSI has certified that
the Work that is the subject of the invoice has been completed in
accordance with the requirements of this Agreement, and that all
conditions established by this Agreement as prerequisite to payment
of the invoice have been fulfilled.
6.0 ACCEPTANCE
6.1 CSI shall deliver to Herzog the Code and Documentation in accordance
with the schedule in Attachment II. Herzog will promptly notify CSI
of any Errors which it identifies prior to final delivery.
CSI shall promptly correct all Errors so identified by Herzog prior
to CSI's final delivery of the Code and Documentation.
6.2 After final delivery of all installments of the Code and
Documentation, Herzog may perform evaluation and test for a period
of thirty (30) days after receipt (hereinafter called "Evaluation
Period"). During the Evaluation Period, Herzog shall promptly notify
CSI of Errors identified by Herzog. CSI shall promptly correct all
Errors and deliver the corrected items to Herzog.
6.3 Within ten (10) days after the end of the Evaluation Period, CSI
shall provide to Herzog corrections for all Errors found during the
Evaluation Period and/or a statement identifying those Errors CSI
has been unable to correct, together with a schedule for delivering
the corrected items to Herzog.
6.4 Herzog shall furnish written notice to CSI within thirty (30) days
after receipt of the corrected Code and Documentation of acceptance
or rejection. Herzog may reject the Code and Documentation, if any
one or more Errors are not corrected and CSI's schedule for
correcting Errors is unacceptable to Herzog; Herzog may treat such
rejection as a material breach by CSI and terminate this Agreement
in accordance with the Section entitled "TERM AND TERMINATION."
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6.5 CSI recognizes that Herzog relies on CSI to fully test and correct
all Errors in the Code and Documentation. Accordingly, should Herzog
elect to accept the Code and Documentation with any one or more
System Critical Error(s), Herzog may withhold all payment due upon
or after their acceptance, as provided in the Section entitled
"PRICE AND PAYMENT" until all such Error(s) are corrected. Should
Herzog elect to accept the Code and Documentation with any one or
more Conditional Error(s), Herzog may withhold forty percent (40%)
of any such payments until all such Error(s) are corrected.
"Error Severity Level" as used herein shall mean classifications of
Errors as assigned by Herzog according to the following definitions:
(a) "System Critical Error" shall mean an emergency condition
which causes critical impact or significantly affects a Herzog
schedule or which makes the performance or continued
performance of any one or more functions difficult or
impossible.
(b) "Conditional Error" shall mean a condition which is not
critical in that no loss of data occurs and which may be
circumvented or avoided on a temporary basis by the intended
user.
6.6 If no written notice of acceptance or rejection is furnished to CSI
by Herzog within the time period set forth in Subsection 6.4, CSI
shall provide Herzog with written notice stating that if Herzog does
not accept or reject within five (5) days after Herzog's receipt of
such notice, Herzog shall be deemed to have accepted the Code and
Documentation. Herzog's failure to accept or reject within five (5)
days after receipt of such notice shall be deemed to be acceptance.
6.7 If any one (1) item is rejected by Herzog pursuant to this Section,
Herzog may, at its option, reject all items regardless of whether or
not any of those items were previously accepted by Herzog.
7.0 CHANGES
7.1 Herzog may, by written change order, make reasonable changes within
the general scope of this Agreement in drawings, designs,
specifications, procedures, quantities, or time or place of
delivery; require additional Work; or direct the omission of Work
and CSI shall promptly proceed with the change(s). All change orders
will be specifically identified as a change order to this Agreement
and will be signed by the Herzog Contract Administrator. If any such
change causes an increase or decrease in the cost of, or the time
required for performance of the Work, an equitable adjustment shall
be made in the price(s), or delivery date(s), or both; and this
Agreement shall be amended in writing accordingly. Any claim for
adjustment by CSI shall be deemed waived unless asserted in writing
within ten (10) days from the date of receipt by CSI of the Herzog
written change order. The amount of claim shall be stated when it is
submitted.
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7.2 If CSI or Herzog claims a right to adjustment pursuant to this
Section, CSI shall prepare and furnish to Herzog the evidence
necessary to establish the amount of any increase or decrease in the
cost of, or the time required for, Work affected by the change
order. The amount of any cost increase or decrease shall be
determined in accordance with CSI's regularly established accounting
practices and shall, if requested by Herzog, be verified by an
independent Certified Public Accounting firm.
7.3 Herzog technical personnel may from time to time render technical
assistance or give advice to, or effect an exchange of information
with CSI personnel concerning the Work to be furnished hereunder.
Such advice, assistance or exchange of information shall not be
deemed to be a change order requiring deviation from the Work
described in this Agreement, unless submitted to CSI in writing
pursuant to Subsection 7.1.
8.0 COPYRIGHT
All Code, Documentation, or Derivative Works thereof, developed or
produced by CSI shall contain an appropriate copyright notice in the name
of CSI, or other author in a manner to be determined by CSI.
9.0 WARRANTY
CSI represents and warrants to Herzog that the Code shall be fit for its
intended use, conforming to the Documentation and Requirements Analysis
attached to this Agreement and:
9.1 that CSI shall endeavor to eliminate Errors in the Code and
Documentation, but CSI does not warrant that these items shall be
delivered to Herzog Error free; and
9.2 that if within a period of six (6) months from the date of
installation, Herzog notifies CSI of any Error in the Code or
Documentation, CSI agrees to use its best efforts to correct the
Error(s) on a timely basis at no charge to Herzog. Herzog agrees to
use proper skill and care to follow the fault-finding procedures
specified by CSI and will cooperate with CSI in diagnosing the
Error; and
9.3 that CSI is or will be the author of, or has or will have exclusive
right, title and interest (including the right to grant licenses and
other rights granted herein) in the Code and Documentation; and
9.4 that to the best of CSI's knowledge, the Code and Documentation do
not infringe any copyright or other non-patent intellectual property
right (including trade secret), privacy or similar right, of any
third party; and
9.5 that to the best of its knowledge no claim, whether or not embodied
in any action past or present, of infringement of any copyright,
patent, or other intellectual property right, privacy or similar
right, has been made or is pending against CSI relative to the Code
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or Documentation. Each party shall promptly notify the other in the
event it becomes aware of such a claim.
The warranties contained in this Section are in lieu of all other
warranties express or implied, including, but not limited to the implied
warranties of merchantability and fitness for a particular purpose.
10.0 INDEMNIFICATION
10.1 CSI agrees to protect, defend, hold harmless and indemnify Herzog
and/or Herzog Subsidiaries from and against any and all suits,
claims, losses and the like, arising out of any alleged or actual:
(a) infringement by Code or Documentation of a patent, copyright,
trademark, trade name, product name, or other intellectual
property right, privacy or similar right of any third party in
any country of the world;
(b) breach of CSI's warranties under this Agreement;
(c) damage to property, personal injury, death, resulting or
claimed to result, in whole or in part, from any actual or
alleged defect(s) in the Code or Documentation;
(d) failure of CSI to comply with any governmental law, statute,
ordinance, administrative order, rule or regulation including
those related to unfair competition.
10.2 CSI shall pay all damages, expenses and costs, including but not
limited to, attorneys' fees, resulting from such suits, claims,
losses and the like against Herzog and/or Herzog Subsidiaries,
provided that either Herzog and/or Herzog Subsidiaries:
(a) notify CSI in writing of any such claim, suit, loss or the
like;
(b) cooperate with CSI, at CSI's expense, in defending such claim,
suit, loss or the like;
(c) allow CSI to control the litigation; and
(d) obtain CSI's prior written approval of any settlement, which
approval CSI agrees not to unreasonably withhold.
10.3 Notwithstanding the foregoing, CSI shall have no obligation to
defend Herzog and/or Herzog Subsidiaries, or to pay costs, damages,
or attorneys' fees for any infringement claim based upon the
combination, operation, or use of the Code or Documentation, with
programs or data not supplied by CSI if such infringement would have
been avoided but for the combination, operation, or use of the Code
or Documentation with other programs or data.
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10.4 If any suits, claims, losses or the like arise and require
indemnification under this Section, CSI may, at its own expense,
either procure the right for Herzog and/or Herzog Subsidiaries, to
continue using the Code and Documentation, trademarks, trade names
or product names, or replace or modify the same so they become
non-infringing without impairment of function.
11.0 TERM AND TERMINATION
11.1 This Agreement shall be effective upon execution by both parties and
shall have full force and effect for the term of performance of the
Work required hereunder and any extension thereof.
11.2 CSI shall have the right to terminate this Agreement at any time in
the event of a material breach by Herzog of its obligations under
this Agreement. Termination shall be made by written notice to
Herzog and shall be specific, and become effective ninety (90) days
after the giving of such notice, unless Herzog shall have corrected
the breach.
11.3 Herzog shall have the right to terminate this Agreement, in whole or
in part, without cause, at any time prior to Herzog's acceptance of
the Code and Documentation. In the event of termination pursuant to
this Subsection, Herzog's sole liability shall be to pay CSI one
hundred percent (100%) of its actual, reasonable and verifiable
expenses incurred prior to the effective date of termination, and
one hundred percent (100%) of its actual, reasonable and verifiable
costs associated with close-out of the Work for a period of time not
to exceed thirty (30) calendar days after notice of termination. Any
Herzog payment hereunder shall be less the amount already paid to
CSI by Herzog under this Agreement; provided, however, that in no
event shall such amount exceed the total amount payable by Herzog in
accordance with the Section entitled "PRICE AND PAYMENT." CSI agrees
to take steps to minimize termination costs for Work terminated
hereunder, to the extent reasonable and practical, including, prompt
discontinuation of Work and prompt cancellation of purchased
services and material.
11.4 In the event of any expiration or termination of this Agreement:
(a) the representations, rights, warranties and obligations in the
Sections entitled "OWNERSHIP OF MATERIALS," "COPYRIGHT,"
"WARRANTY," "INDEMNIFICATION," "CONFIDENTIAL INFORMATION," AND
"GENERAL" shall survive and continue and shall bind the
parties and their legal representatives, successors and
assigns; and
(b) Herzog and/or its Subsidiaries shall have no obligation to
return to CSI any copies of the Code, Documentation or
Derivative Works thereof then in the possession of Herzog
and/or its Subsidiaries, or any sublicensee or purchaser; and
(c) CSI shall deliver to Herzog, copies of Code and Documentation,
developed as of the effective date of termination, whether
completed or in progress, and Herzog
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shall have a paid-up license to such Code and Documentation as
provided in paragraph 4.3 of the Section entitled "OWNERSHIP
OF MATERIALS."
12.0 CONFIDENTIAL INFORMATION
12.1 Confidential information disclosed to CSI by Herzog hereunder is
subject to the terms of the Confidential Disclosure Agreement dated
___________ between the parties.
12.2 Confidential information disclosed to Herzog by CSI hereunder is
subject to the terms of the Confidential Disclosure Agreement dated
___________ between the parties.
13.0 COMPLIANCE WITH LAWS
Both parties agree to comply and do all things necessary to enable the
other party to comply with all applicable federal, state and local laws,
regulations and ordinances including but not limited to the regulations of
the United States Government as they relate to this Agreement and the
services provided hereunder.
14.0 GENERAL
14.1 CSI and Herzog shall participate at Herzog's request in monthly
meetings, prior to acceptance by Herzog of the Code and
Documentation, to review the status of Work performed under this
Agreement. Such meetings shall be held at Herzog and CSI facilities.
Herzog will reimburse CSI's travel and related expenses to attend
such meetings as it may schedule.
14.2 Nothing contained herein shall be deemed to authorize or empower
either party to act as agent for the other party or to conduct
business in the name of the other party. No agency, partnership,
joint venture or other joint relationship is created by this
Agreement.
14.3 Neither party shall be liable to the other for any lost revenue,
lost profits, special, indirect, incidental, consequential, or
punitive damages, even if advised of the possibility of such
damages, by reason of any performance or non-performance under this
Agreement. The responsibilities of both parties for any delays,
losses or other damages which may result from the furnishing of
equipment, programs, publications, information, or services under
this Agreement shall be limited to the remedies specified in this
Agreement.
14.4 Each party's liability to the other arising out of the claims
arising from breach of contract shall not exceed the total value of
this Agreement.
14.5 Disputes arising under this Agreement shall be referred immediately
to, and settled by, binding arbitration. The arbitration panel shall
consist of three persons. Each of the parties hereto shall appoint
one arbitrator and two arbitrators thereby appointed shall elect a
third arbitrator. The arbitration shall be conducted in New York
City in
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accordance with the rules of the American Arbitration Association.
The costs of arbitration shall be borne equally by CSI and Herzog.
Judgment upon the award rendered may be entered in any Court having
jurisdiction thereof.
14.6 Except as expressly provided herein, Herzog may in its sole
discretion assign any of its rights hereunder to a Subsidiary. The
rights and privileges of Herzog under this Agreement shall also
inure to the benefit of any successor in interest to Herzog by
acquisition or merger. Otherwise, neither party shall sell,
transfer, assign or subcontract any right or obligation hereunder,
without the prior written consent of the other party. Any act in
derogation of the foregoing shall be null and avoid.
14.7 CSI may use the services of consultants or other third parties who
are not employees of CSI in the performance of this Agreement.
14.8 CSI will have an appropriate agreement with each of its employees or
others whose services CSI may require sufficient to enable it to
comply with all of the terms of this Agreement.
14.9 CSI, all subcontractors of CSI, and their employees, agents or
servants shall not be considered to be employees, agents or servants
of Herzog, and they will in no way represent themselves as agents,
servants or employees of Herzog.
14.10 CSI shall maintain comprehensive general liability insurance for
claims for damages because of bodily injury (inclusive of death) and
property damage caused by, or arising out of, acts or omissions of
its employees. The minimum limits of such insurance shall be three
hundred thousand dollars ($300,000.00) for each individual; and five
hundred thousand dollars ($500,000.00) for each accident because of
bodily injury, and one million dollars ($1,000,000.00) because of
property damage for each accident. Certificates of such insurance
shall be furnished to Herzog at the commencement of this Agreement
and at the renewal date of such insurance policy until this
Agreement is terminated or has expired, whichever occurs first. In
no event shall insurance be canceled during such period without
thirty (30) days prior written notice to Herzog.
14.11 Any notice required or permitted to be made or given to either party
hereto pursuant to this Agreement shall be sufficiently made or
given on the date of mailing, if sent to such party by certified
mail, postage prepaid, addressed to it at its address set forth
below, or to such other address as it shall designate by written
notice given to the other party:
For Herzog: For CSI:
Herzog Heine Geduld, Inc. Celerity Systems, Inc.
26 Broadway 9051 Executive Park Drive
New York, New York 10004 Knoxville, TN 37923
Attn: Andrew DaPonte Attn: Mahmoud Youssefi
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14.12 CSI shall promptly provide Herzog written notification of, including
a description of, the impending and/or actual occurrence of any of
the following events:
(a) Changes in the assignment of key employees working on the Code
and Documentation
(b) Changes in the designated place(s) of performance of the Work
contemplated by this Agreement
(c) Insolvency proceedings
(d) Labor disputes involving employees of CSI or other parties
which may adversely affect CSI's performance under this
Agreement.
(e) Any other factor or event which may detrimentally affect CSI's
ability to meet the requirements of this Agreement.
14.13 Neither party hereto shall be in default by reason of any failure in
the performance of this Agreement in accordance with its terms if
such failure is due to acts of God or of the public enemy, acts of
the government in either its sovereign or contractual capacity,
fires, floods, epidemics, quarantine restrictions, freight
embargoes, or for unavailability of transportation of materials or
similar reasons beyond such party's control.
14.14 No amendment or modification of any provision of this Agreement
shall be effective unless it is in a document which refers to this
Agreement and is signed by both parties. No waiver of any provision
of this Agreement will be effective unless it is in writing signed
by the party waiving its rights hereunder. No failure or delay by
either party in exercising any right, power or remedy under this
Agreement, except as specifically provided herein, will operate as a
waiver of any such right, power or remedy.
14.15 If any provision or provisions of this Agreement shall be held to be
illegal, invalid or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
14.16 The headings of the Sections are inserted for convenience and
reference only and are not intended to be part of or to affect the
meaning or interpretation of this Agreement.
14.17 In the event of any ambiguity and/or inconsistency in this
Agreement, the ambiguity and/or inconsistency shall be resolved by
giving precedence in the following order:
1. Terms and Conditions of this Agreement
2. Attachments I through V to this Agreement
3. Purchase Orders issued hereunder.
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14.18 This Agreement is deemed to be made under and shall be construed in
accordance with the laws of the State of Tennessee and constitutes
the entire understanding between the parties hereto with respect to
the subject matter of this Agreement.
14.19 This Agreement supersedes all previous communications,
representations, and understandings between the parties with respect
to the subject matter of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representations.
HERZOG HEINE GEDULD, INC. CELERITY SYSTEMS, INC.
By: By:
--------------------------------- ---------------------------------
Title: Title:
------------------------------ ------------------------------
Date: Date:
------------------------------- -------------------------------
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ATTACHMENT I
REQUIREMENTS ANALYSIS
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ATTACHMENT II
SCHEDULE
CSI and Herzog agree that the Work called for under this Agreement shall be
completed in accordance with the following schedule:
MILESTONE DESCRIPTION DATE
- --------- ----------- ----
[ATTACH GANNT CHART]
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ATTACHMENT III
DOCUMENTATION
Open Fiche User Manual
Open Fiche Administrator's Manual
Herzog Heine Geduld Back Office
System Configuration Manual
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ATTACHMENT IV
CELERITY SYSTEMS, INC.
AGREEMENT FOR MAINTENANCE SERVICES
This Agreement is entered into effective the ____ day of ___________________,
1993, by and between Celerity Systems, Inc., a Tennessee corporation with its
principal place of business at 9051 Executive Park Drive, Knoxville, Tennessee
37923 (hereinafter "CSI"), and ___________, a ___________ corporation with its
principal place of business in ________________ (hereinafter "Customer").
1. Definitions. As used in this Agreement, the listed terms are
defined as follows:
a. "Regular Business Hours" shall mean from 8:00 a.m. to 4:00
p.m. Monday through Friday, except for the following holidays:
New Years Day
Memorial Day
Independence Day
Labor Day
Thanksgiving Day
Day After Thanksgiving
Christmas Day
b. "Covered Software" shall mean all CSI software covered by
Full Service Program maintenance under this Agreement. A listing of
covered software is attached on Exhibit A to this Agreement.
c. "Full Service Program" maintenance shall provide phone
contact and problem isolation within four (4) regular business hours of a
customer service request, and for a system critical malfunction shall
provide CSI technical personnel on-site at the Customer location if
necessary within eight (8) regular business hours, and shall provide an
operational solution to the service request in no more than sixteen (16)
regular business hours; for other than system critical service requests,
CSI service personnel shall appear on-site if necessary within twenty-four
(24) regular business hours, and shall resolve the service request in no
more than forty (40) regular business hours.
d. "Systems Integration" maintenance shall provide Full
Service Program maintenance for any of Customers hardware and/or software
installed by CSI. Systems Integration maintenance is optional and must be
designated on Exhibit C. Systems Integration maintenance does not preclude
the Customer from obtaining maintenance from other sources, and third
party maintenance programs may be required by some vendors.
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e. "System Critical" malfunctions shall mean conditions which
significantly affect a Customer schedule or which makes the performance or
continued performance of any one or more functions of the Covered Software
impossible.
2. Maintenance Service.
a. During the term of this Agreement, CSI agrees to provide
Customer with the following maintenance services and materials:
(i) Full Service Program maintenance for the Covered
Software;
(ii) updates and improvements to Customer's version of
the Covered Software including new releases, when
and if developed;
(iii) written, telephone, and on-site consultations
reasonably necessary to resolve or correct any
errors in the software; and
(iv) reasonable efforts to remedy deficiencies in the
Covered Software.
However, Customer agrees that maintenance service does not require CSI to
correct any and every perceived deficiency Customer may identify with the
Covered Software.
b. The Maintenance Service provided in subpart a. does not
include the following:
(i) the addition of new functionality which Customer
may wish to add to the Covered Software;
(ii) maintenance and support of any software which has
been modified without CSI's written permission.
c. If elected by Customer, CSI will also provide Systems
Integration maintenance for the entire hardware and software system, or
any designated subsystem, installed by CSI and designated in Exhibit C.
Systems Integration maintenance is provided on a time and materials basis
with a minimum quarterly retainer. Charges for time are first billed
against the quarterly retainer. Charges for materials, travel expense and
other out-of-pocket costs are billed in addition to the quarterly
retainer.
Systems Integration maintenance is a cooperative
maintenance plan focused on providing timely service and answer to all
questions related to all systems hardware and software whether purchased
directly from CSI or from third party vendors and integrated by CSI. Under
Systems Integration maintenance, CSI will:
o Provide unlimited phone support either with Customer or
with the manufacture of the product in question.
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o Stay current on the present version and future versions
of the products listed in Exhibit C. On certain
occasions when the product in use is no longer the best
option, CSI will also be required to make
recommendations on other as yet specified products.
o Supervise the installation of upgrades or "fixes" as the
case may be of the listed products.
o Provide on-site support under the following schedule of
costs set forth on Exhibit B.
o Upon request of Customer, write simple work orders
detailing any features Customer may wish to add to the
system. The work order will identify the objective,
approach, and cost of the addition.
3. Pricing Changes. Rates as set forth in Exhibits A and B will be
fixed for the first twelve (12) months of this maintenance Agreement.
Thereafter, if CSI finds it necessary to revise the rates on Exhibits A or B for
the services provided herein, CSI will provide Customer with written notice
thereof at least sixty (60) days prior to the effective date for such revised
rates. In the event that the revised rates are not acceptable to Customer,
Customer may terminate this contract and receive a full pro rata refund of any
payments for future services.
4. Payment Terms.
a. CSI shall invoice Customer quarterly, in advance, for
maintenance charges, and monthly for any other charges payable to CSI
under this Agreement. Such invoices shall itemize charges by dates that
service was provided and shall be due net fifteen (15) days from the date
of invoice.
b. Customer shall be responsible for the payment of any
federal, state or local tax, other than a tax on net income now or
hereafter in effect, which is or becomes applicable to any payment due
under this Agreement.
5. Term. This Agreement shall commence on the date stated on the
face of this Agreement and shall continue for an initial term of three (3)
years. Thereafter, the Agreement shall renew automatically for successive
one-year terms unless either party shall give written notice of intent not to
renew at least sixty (60) days in advance of the current term.
6. Termination. In the event either party shall neglect or fail to
perform any of its obligations under this Agreement, the other party shall have
the right to institute the following resolution or termination procedure:
a. The aggrieved or concerned party shall provide written
notice of its grievance or concerns to the other;
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b. A meeting shall be scheduled within two (2) weeks of such
written notice between the Customer's information services manager and the
CSI manager of customer service in an attempt to reach resolution;
c. If no resolution is reached, the aggrieved party may
terminate this Agreement in its sole discretion upon thirty (30) days'
written notice.
d. In the event of termination, Customer's sole liability
shall be to pay CSI all maintenance charges and any other charges payable
under this Agreement which have accrued through the effective date of
termination. CSI's sole liability shall be to refund any maintenance or
other charges paid in advance, as of the effective date of termination.
7. Limitation of Liability.
a. CSI shall indemnify and hold harmless Customer, its
divisions and subsidiaries, agents, representatives and employees from and
defend at CSI's expense against every claim, damage, loss, liability and
suit (including interest, reasonable attorneys' fees and cost), arising
out of any injury (including death) to persons and damage to tangible
property caused or alleged to have been caused by any breach of warranty
or by negligent acts or omissions of CSI.
b. CSI's liability for actual damages from any cause
whatsoever will be limited to the greater of 1) $40,000 or 2) an amount
equal to twelve (12) months' maintenance charges for the individual
software that caused the damage or that is the subject matter of, or is
directly related to, the cause of action. Such charges will be those in
effect for such software when the cause of action arose. This limitation
will apply, except as otherwise stated in this Section, regardless of the
form of action, whether in contract or in tort including negligence. This
limitation will not apply to claims by or against Customer for bodily
injury or damage to real property or tangible personal property for which
CSI is legally liable, or to a claim for infringement of any U.S. patent,
copyright, or other intellectual property right.
c. Customer agrees that CSI will not be liable for any
special, incidental, indirect, or consequential damages hereunder,
including the loss of data or information of any kind and loss of profits.
8. Confidentiality. CSI acknowledges that in the course of providing
services under this Agreement, its employees and agents may be exposed to
confidential information of Customer. CSI will implement reasonable security and
confidentiality procedures to see that no such confidential information is
disclosed or misused by its employees and agents. In the event of the expiration
or termination of this Agreement, the obligations of this paragraph shall
continue and bind CSI and its legal representatives, successors and assigns.
9. Notices. Any notice required or permitted to be made or given to
either party hereto pursuant to this Agreement shall be sufficiently made or
given on the date of mailing, if sent to such party by certified mail, postage
prepaid, addressed to the address set forth below, or to such other address as
shall be designated by written notice provided to the other party:
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For Customer: For CSI:
_______________________________ Customer Service Manager
_______________________________ Celerity Systems, Inc.
_______________________________ 9051 Executive Park Drive
_______________________________ Knoxville, Tennessee 37923
Attn: ______________________
10. Governing Law. This Agreement will be construed in accordance
with the laws of the State of Tennessee, U.S.A.
11. Disputes. Disputes arising under this Agreement shall be
referred immediately to, and settled by, binding arbitration. The arbitration
panel shall consist of three persons. Each of the parties hereto shall appoint
one arbitrator and two arbitrators thereby appointed shall elect a third
arbitrator. The arbitration shall be conducted in a city and place mutually
agreed to by the parties (or, if there is no agreement, by the arbitration
panel) in accordance with the rules of the American Arbitration Association. The
costs of arbitration shall be borne jointly by CSI and Customer. Judgment upon
the award rendered may be entered in any Court having jurisdiction thereof.
12. Force Majeure. Neither party hereto shall be in default by
reason of any failure in the performance of this Agreement in accordance with
its terms if such failure is due to acts of God or of the public enemy, acts of
the government in either its sovereign or contractual capacity, fires, floods,
epidemics, quarantine restrictions, freight embargoes, or similar reasons beyond
such party's control.
13. Severable. If any provision or provisions of this Agreement
shall be held to be illegal, invalid or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
14. Amendments in Writing. No amendment or modification of any
provision of this Agreement shall be effective unless it is in a document which
refers to this Agreement and is signed by both parties. No waiver of any
provision of this Agreement will be effective unless it is in writing signed by
the party waiving its rights hereunder. No failure or delay by either party in
exercising any right, power or remedy under this Agreement, except as
specifically provided herein, will operate as a waiver of any such right, power
or remedy.
15. No Agency. Nothing contained herein shall be deemed to authorize
or empower either party to act as agent for the other party or to conduct
business in the name of the other and CSI, subcontractors of CSI, and their
employees, agents or servants shall not be considered to be employees, agents or
servants of Customer and they will in no way represent themselves as agents,
servants or employees of Customer.
16. Compliance with Laws. Both parties agree to comply and do all
things necessary to enable the other party to comply with all applicable
federal, state and local laws, regulations and
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ordinances including but not limited to the regulations of the United States
Government as they relate to this Agreement and the services provided hereunder.
CELERITY SYSTEMS, INC.
BY:
---------------------------------
ITS:
---------------------------------
[CUSTOMER]
BY:
---------------------------------
ITS:
---------------------------------
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EXHIBIT A
ANNUAL
COVERED CSI SOFTWARE LIST PRICE MAINTENANCE
- -------------------- ---------- -----------
Open Fiche $40,995.00 $ 4,099.50
Automatic Report Download 21,000.00 2,100.00
Jukebox Software 40,000.00 4,000.00
----------
$10,199.50
==========
Full Service Maintenance for Covered Software:
$2,549.88 per quarter
EXHIBIT B
Systems Integration Maintenance for Software
and Hardware on Exhibit C:
Retainer $2,500.00 per quarter.
Labor rates (1 hour minimum) -- $125.00 per hour plus travel charges of $75.00
per hour, if necessary.
Labor charges each quarter will first be offset against the retainer, and in the
event CSI's labor charges should exceed the retainer amount, CSI will bill
Customer for the excess.
Any travel expenses, materials or other out-of-pocket expenses will be billed
monthly in addition to the quarterly retainer.
EXHIBIT C
Hardware and/or Software Covered by Systems
Integration Maintenance
The Herzog Heine Geduld back office system as described in the Back Office
System Requirements Analysis of May 27, 1993
CELERITY SYSTEMS, INC.
BY:
---------------------------------
ITS:
---------------------------------
[CUSTOMER]
BY:
---------------------------------
ITS:
---------------------------------