Agreement for Licensed Programs and Purchase of Equipment
This Agreement for Licensed Programs and Purchase of Equipment is entered into by and between Computer Guidance Corporation (“CGC”), an Arizona corporation, and CUSTOMER, with reference to the facts set forth in the Recitals below and effective as of the date of the execution of related agreements and/or exhibits by CUSTOMER and CGC (“Effective Date”). CGC and CUSTOMER agree that the following terms and conditions will apply to the purchase by CUSTOMER of International Business Machines Corporation ("IBM") machines, and non-IBM machines, and for the licensing of IBM licensed programs and CGC licensed programs listed in the Exhibits or in any future Amendment to this Agreement. Any reference in this Agreement to CUSTOMER refers to the CUSTOMER, their affiliated or related entities as well as their related successors or related assigns.
The CUSTOMER agrees to accept machines, licensed programs, programming service, training and warranty service under the terms and conditions of this Agreement.
I. CGC Program License.
CGC when and only when CUSTOMER and CGC executes Exhibit A, hereby grants and CUSTOMER hereby accepts, upon the following conditions, a non-exclusive, nontransferable license to use the licensed programs set forth in Exhibit A for the Term of this Agreement.
II. Scope of License.
This Agreement authorizes the CUSTOMER to:
(a) use the licensed programs in machine readable form solely on the central processing unit (CPU) designated in Exhibit C or any replacements thereof (subject to any additional license fees because of additional users) and any associated remote terminals or units which have the capacity to utilize or call into use the licensed programs, and CUSTOMER agrees not to use the licensed programs on any other CPU except pursuant to a further license from CGC; provided, however, CUSTOMER shall be permitted to temporarily transfer the License granted hereby and to use the licensed programs on a back-up CPU when the designated CPU is temporarily inoperable until the designated CPU is restored to operable status, at which time the licensed programs shall be immediately removed from the back-up CPU; (b) utilize the licensed program materials in the form provided by CGC in support of the use of the licensed programs; and (c) copy the licensed program materials in machine readable form into any machine readable or p rinted form to provide sufficient copies to support CUSTOMER's authorized use of the licensed programs.
III. Term of Agreement
The Agreement herein shall continue for three years from the Effective Date (the “Initial Term”), and shall automatically renew for additional one-year terms (a “Renewal Term”) unless either party provides written notice to the other not less than 30 days prior to the end of the Initial Term or any subsequent Renewal Term of its intent not to renew this Agreement (the Initial Term and any Renewal Terms, collectively, the “Term”). The parties agree that this auto-renewal provision is a negotiated provision of this Agreement, constitutes part of the consideration of the Agreement, and is reasonable. Upon termination of this Agreement CGC shall have no obligation to provide any further Licenses, Services or Support to CUSTOMER. Upon termination by CUSTOMER, CUSTOMER shall return the licensed programs to CGC. CGC may terminate this Agreement if CUSTOMER fails to comply with any of the material terms and conditions of this Agreement upon written notice to CUSTOMER and failure by CUSTOMER to cure within th irty (30) days of such notice. If the CUSTOMER fails to comply with any of the material terms and conditions of the Agreement and CGC does not elect to terminate this Agreement, CGC may suspend performance of its obligations hereunder until such time as the CUSTOMER complies with the material terms and conditions of the Agreement.
IV. Terms of Payment and Termination.
Unless CUSTOMER terminates this Agreement by written notice no less than thirty (30) days prior to installation, it shall pay CGC the balances in accordance with the terms listed on the Exhibits. CGC agrees that in the event of such termination, the portion of the fees received upon execution of this Agreement shall constitute damages and CGC shall make no further claims against CUSTOMER.
CUSTOMER agrees to be responsible for the payment of any state or local sales taxes, use, transaction privilege or similar taxes resulting from this Agreement or any activities hereunder, excluding taxes based on CGC's net income.
CGC will schedule each machine in accordance with IBM's or other manufacturer's (vendor's) shipment schedule, confirm the CUSTOMER's schedule and amend it as necessary. CGC shall use its best efforts to insure timely delivery. IBM, another vendor or CGC shall install all licensed programs, hardware and other software listed in exhibits subject to installation charges in the Agreement. CUSTOMER agrees to pay any charge levied upon CGC by IBM or another vendor if CUSTOMER alters, defers or cancels a machine after the minimum notice period specified by the vendor.
VII. Destination Charges.
Transportation charges for machines will be paid by CUSTOMER. Any special shipment request by CUSTOMER will be at CUSTOMER's expense. If CGC licensed programs are lost, damaged or destroyed during shipment from CGC, CGC will replace such CGC licensed programs at no expense to CUSTOMER. If CGC licensed programs are lost, damaged or destroyed while in possession of CUSTOMER, CGC will replace such CGC licensed programs; provided, however, that CUSTOMER shall reimburse CGC for the cost of duplication of the licensed programs.
The CUSTOMER agrees to provide a suitable installation environment as specified in the vendor's installation manual for the machines ordered. Machines designated by the manufacturer as CUSTOMER set-up will be set up by the CUSTOMER in accordance with the instructions furnished by the manufacturer. Machines not designated as CUSTOMER set-up will be installed by the manufacturer.
IX. CUSTOMER's Use of CGC Systems.
CGC and CUSTOMER agree that the following terms and conditions will apply to CUSTOMER's order for CGC licensed programs, as listed in Exhibit A of this Agreement, or in the future that is accepted by CGC. Under these terms and conditions, CGC will (a) furnish such CGC licensed programs to the CUSTOMER, and, (b) grant to CUSTOMER a nontransferable and non-exclusive License to use the CGC licensed programs. CUSTOMER agrees with respect to the CGC licensed programs to accept all responsibility for (a) their selection to achieve CUSTOMER's intended results, (b) their use, and (c) the results obtained there from. CGC represents and warrants that the CGC licensed programs perform according to the specifications in the CGC licensed materials. The CUSTOMER also has the responsibility for the selection and use of, and results obtained from, any other programs, machines, or services used with the CGC licensed programs. CGC represents and warrants that the hardware, software and other supplies listed in Exhibit C are compatible with the CGC licensed programs.
X. Program Modifications.
The scope of work and cost associated with any program modification(s) will be defined and accepted only on a CGC Agreement.
XI. Conversion Assistance.
The scope of work and cost associated with any automated conversion assistance will be defined and accepted only on a CGC Agreement.
XII. Licensed Program Support.
For an annual charge CGC shall provide to CUSTOMER support for the CGC licensed programs as described in Exhibit A. The current annual charge for Application Support is listed in Exhibit A. Application Support is required for the Term of the Agreement. At the end of each year of the Term, CUSTOMER agrees that the Application Support Fee will increase for the upcoming year of the Term by an amount equal to any increase in the Consumer Price Index-United States City Average-All Urban Consumers-All items published by the U.S. Dept. of Labor Bureau of Labor Statistics (the CPI) as of such date over the CPI in effect one year prior to such date. If the CPI is discontinued or revised during the term of this Agreement, such other government index or computation with which it is replaced shall be utilized to obtain substantially the same results as would be obtained if the index had not been so discontinued or revised.
XIII. CUSTOMER's Obligation.
CUSTOMER acknowledges that the continued integrity of the licensed programs and the warranty of CGC are dependent upon the installation of all updates in the program logic and documentation provided to CUSTOMER by CGC. CGC may be unable to support its licensed programs if the CUSTOMER fails to install the updates provided by CGC for the CGC licensed programs or by IBM for the IBM iSeries licensed programs.
XIV. CUSTOMER Requests.
CGC's policy is to acknowledge online written requests from CUSTOMER to provide assistance identifying and detecting problems, errors, and malfunctions arising in connection with CUSTOMERs' use of licensed programs. CUSTOMER shall use reasonable efforts to furnish to CGC adequate supporting documentation and details to substantiate, and to assist CGC in the identification and detection of problems, errors, and malfunctions arising from CUSTOMER's use of the CGC licensed programs. CGC will provide support consistent with CGC’s Software Support Guidelines document.
XV. Source Code Escrow.
CGC will deposit its Source Code with the Escrow Agent below and annually replace that Source Code with an updated version of the Source Code used to create CGC’s licensed programs. Except as otherwise provided in the Agreement between CGC and CUSTOMER, CGC shall retain ownership of the Source Code and all copies thereof, including all copyright, trade secret, patent or other intellectual property ownership rights subsisting therein. The Escrow agent will provide a copy of Source Code to CUSTOMER if CGC has become insolvent, made a general assignment for the benefit of its creditors, filed a voluntary petition of bankruptcy, suffered or permitted the appointment of a receiver for its business or assets, become the subject to any proceeding under any bankruptcy or insolvency law, whether domestic or foreign, or has wound up or liquidated its business, voluntarily or otherwise.
Escrow Agent: ARIZONA ESCROW & FINANCIAL CORPORATION
3700 North 24th Street, Suite 130
Phoenix, AZ 85016
Attention: DE Graham
CGC represents and warrants to CUSTOMER that CGC licensed programs conform to and function consistently with the specifications contained in CGC licensed program materials delivered to CUSTOMER pursuant to this Agreement.
CGC represents and warrants that it has the full right and authority to grant the License to CUSTOMER and that CUSTOMER's use of the licensed programs will not infringe upon any patent, copyright, trademark, trade secret, or other proprietary rights of any third party. CGC shall indemnify CUSTOMER and hold CUSTOMER harmless from and against any and all claims of third parties relating to CGC's rights with respect to the CGC licensed programs including its right to grant the License or alleging that CUSTOMER's use of the CGC licensed programs is in violation of the rights of any such third party provided the CUSTOMER gives CGC reasonable notice of the claim and allows CGC to control the litigation with the CUSTOMER's full cooperation.
CGC represents and warrants that the CGC licensed programs will operate on the iSeries CPU in Exhibit C of this Agreement.
Machines purchased under this Agreement are warranted by the manufacturer(s) and not CGC. CGC warrants that it has the right to assign and hereby assigns all IBM and other manufacturers' warranties to CUSTOMER. The hardware warranty period commences on the date of installation or other date specified by the terms of the manufacturer(s) warranty.
The foregoing warranties are in lieu of all other warranties, express or implied, including but not limited to implied warranties of merchantability and fitness for a particular purpose.
XVII. Protection of CGC licensed programs.
Protection of CGC licensed programs. CUSTOMER will take reasonable action, by instruction, agreement or otherwise, with any persons permitted access to CGC licensed programs to satisfy CUSTOMER's obligations under this Agreement. All copies of CGC licensed programs made by CUSTOMER including translations, compilations, partial copies within modifications and updated works are the property of CGC.
XVIII. Limitation of Remedies.
Because of the difficulty of ascertaining damages hereunder, it is agreed that any losses or damages whether direct or indirect, arising out of this Agreement, shall not exceed the amount that CUSTOMER has paid for charges hereunder. In no event shall either party be liable for any indirect, special, or consequential damages such as loss of anticipated profits or other economic loss in connection with or arising out of the services provided for in this Agreement with the exception of property damage and personal injury claims, breach of confidentiality provisions and any negligent or fraudulent acts or willful misconduct.
XIX. Circumstances Beyond Direct Control.
Circumstances Beyond Direct Control. If the performance of either party of any obligation imposed upon it hereunder shall be delayed by reason of, or attributable to, any event or circumstance beyond its own direct control, including but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, government regulations superimposed after the fact, fires, communication line failures, power failures, earthquakes or other disasters and such delay could not have reasonably been circumvented through the use of alternate sources, work-around plans, or other means, then such party shall be excused from any further performance or observance of its obligation(s) so affected for as long as such circumstances prevail and such party uses its best efforts to recommence performance to whatever extent possible without delay. If any of the above enumerated circumstances prevent, hinder, or delay performance of either party's obligations hereunder for more than four (4) months, the party not preven ted from performing may at its option terminate this Agreement without penalty as of a date specified by such party in written notice of termination to the other party.
CGC and CUSTOMER acknowledges that much of the material and information which will come into the possession or knowledge of each in connection with this Agreement or its performance consists of confidential and proprietary data, the disclosure of which or use by third parties will be damaging. Such confidential material and information includes, but is not limited to, the CGC licensed programs and all business information of the CUSTOMER, including all financial and other business information, identities of customers and prospective customers, pricing information, project status and project management techniques. Such confidential information does not include material and information that is (i) in the public domain or enters the public domain through no fault of the party charged to keep it confidential, (ii) independently developed by such party, or (iii) rightfully disclosed to such party by a third party without continuing restriction on its use.
Both parties, therefore, agree to hold such material and information in strictest confidence, not to make use thereof other than for the performance of this Agreement, to release it only to employees acting on behalf of the receiving party who have a reasonable need for such information in the course of their work, and not to release it or disclose it to any other party.
Notwithstanding the foregoing, CUSTOMER will have the right to disclose the CGC licensed programs to third parties assisting CUSTOMER in its business.
All notices by either party to the other shall be in writing and sent by registered or certified mail, return receipt requested, or delivered by hand or courier service.
Any disputes arising hereunder including the construction or application of the Agreement shall be settled by arbitration in Phoenix, Arizona, in accordance with the Commercial Industry Rules of the American Arbitration Association. The decision of the arbitrator shall be final and binding upon the parties both as to law and to fact, and shall be enforceable in any court of record having jurisdiction.
XXIII. Non-Solicitation of Employees.
CUSTOMER acknowledges and agrees that CGC personnel have been acquired and trained by CGC at considerable expense. CUSTOMER, therefore, agrees that if CUSTOMER, or any affiliate of CUSTOMER, (including any company that is under common ownership and/or control of CUSTOMER) should employ any CGC employee, or any employee of an affiliate of CGC (in any capacity, including any rendering of personal services as an employee, contractor, or agent),within one year after such employee’s leaving of CGC or CGC’s affiliates, then CUSTOMER agrees to pay CGC a placement fee of 100% of the former employee’s projected first year earning (including projected bonuses and commissions) from CUSTOMER. CUSTOMER acknowledges and agrees that CGC will not provide any support or services to or through this former employee for a period of 60 months from the date the former employee terminated from CGC or an affiliate of CGC. Additionally, CUSTOMER agrees to pay CGC the placement fee in one lump sum within 15 days of demand.
XXIV. General Provisions.
(a) No action, regardless of form, arising out of this Agreement may be brought by either party more than one year after the cause of action has arisen, or in the area of non-payment, more than two years from the date of the last payment.
(b) This Agreement will be governed by the laws of the State of Arizona.
CUSTOMER and CGC each acknowledges that it has read this agreement, understands it and agrees to be bound by its terms and conditions. Further, customer and CGC agree that this agreement, including all amendments and exhibits, is the complete and exclusive agreement between the parties which supersedes all proposals or prior agreements, oral or written, and all other communications between the parties relating to the subject matter of this agreement.