Exhibit 10.10
Services Agreement
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This Services Agreement (the "Agreement"), documents the business relationship
between each of xxxxxxxxxxxxx.xxx Corp., a Delaware corporation
("driversshield"), driversshield's parent, First Priority Group, Inc., a New
York corporation ("FPG"), Electronic Data Systems Corporation, a Delaware
corporation ("EDS"), and EDS Information Services L.L.C., a Delaware limited
liability company ("EIS"), and describes the terms and conditions under which
EDS will perform for driversshield the website design and website hosting
services described below. The obligations of EDS set forth in this Agreement
will be performed by EDS, itself and through its direct and indirect
wholly-owned subsidiaries, including EIS. All references to EDS in this
Agreement will be deemed to include all such subsidiaries, and EDS and
driversshield may be referred to in this Agreement individually as a "party" and
together as the "parties".
1. Term, Definitions, and Exhibits. The term of this Agreement will begin
on September 15, 1999 (the "Effective Date"), and, unless earlier
terminated as provided in Section 11 of this Agreement, will continue
through December 31, 2003. Such original term may be extended by mutual
written agreement of the parties. Unless defined elsewhere in this
Agreement, or the context clearly indicates otherwise, all capitalized
terms used in this Agreement shall have the definitions set forth in
Exhibit A. This Agreement shall consist of the terms and conditions set
forth herein, as well as the following Exhibits, which are incorporated
herein:
Exhibit A: Definitions
Exhibit B: Description of EDS Services
Exhibit C: driversshield's Role
Exhibit D: Compensation
Exhibit E: Confidentiality
Exhibit F: Warranties and Covenants
Exhibit G: Indemnities
2. EDS Services. The EDS Services to be provided by EDS hereunder shall
consist of the Design and Development Services, the Operational
Services, and the Additional Services, and will be performed in two
separate phases, as set forth below:
(a) Design and Development Services. During the period from
September 15, 1999 through the Operational Date, the EDS
Services will consist of design and development services (the
"Design and Development Services") to provide driversshield
with an internet website and underlying database management
application in accordance with a jointly developed and
mutually agreeable technical specification (the "Website
Specification"). Upon completion of joint acceptance testing
by both parties in accordance with mutually agreeable
acceptance criteria, driversshield will transition the Website
from a test environment to an operational environment by
making the Website available for operational use (processing
"live" Repair data) by insurance carriers.
(b) Operational Services. After the Operational Date, the EDS
Services will consist of the basic and, if required, the
incremental services generally described in Exhibit B (the
"Operational Services").
(c) Additional Services. From time to time, driversshield may
request, and EDS may provide, services in addition to those
expressly required to be provided hereunder (the "Additional
Services").
3. Representatives. During the term of this Agreement, EDS and
driversshield will each maintain a representative who will be its
primary point of contact in dealing with the other under this Agreement
and will have the authority and power to make decisions with respect to
actions to be taken by it under this Agreement. Either party may change
its representative by giving notice to the other of the new
representative and the date upon which such change will become
effective. In performing its obligations under this Agreement, EDS will
be entitled to rely upon any routine instructions, authorizations,
approvals or other
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information provided to EDS by driversshield's representative or, as to
areas of competency specifically identified by such representative, by
any other driversshield personnel identified by driversshield's
representative, from time to time, as having authority to provide the
same on behalf of driversshield in such person's area of competency.
Unless EDS knew of any error, incorrectness or inaccuracy in such
instructions, authorizations, approvals or other information, EDS will
incur no liability or responsibility of any kind in relying on or
complying with any such instructions, authorizations, approvals or
other information.
4. driversshield's Role. During the term of this Agreement and in addition
to the other obligations of driversshield described herein,
driversshield will, at its own cost and expense, have the obligations
to EDS described in Exhibit C. driversshield acknowledges and agrees
that EDS' ability to perform the EDS Services in accordance with this
Agreement is contingent upon driversshield's timely performance of
those obligations assigned to driversshield hereunder. driversshield
agrees and acknowledges that it shall not use the Website to process,
track or record any collision repair information of any other person or
entity (including its Affiliates) deriving revenue therefrom until
driversshield and EDS have agreed upon an equitable adjustment in EDS'
compensation hereunder.
5. Payment.
(a) Design and Development Services. In consideration for the
performance of the Design and Development Services as
described in Section 2(a) above, driversshield will pay EDS
the lesser of (i) Three Hundred and Fifty Thousand Dollars
($350,000.00), or (ii) the rate of One Hundred and Twenty Five
Dollars ($125.00) per hour (which rate will be increased to
One Hundred and Fifty Dollars ($150.00) per hour effective
January 1, 2000) for each hour of Design and Development
Services provided. EDS will submit a written invoice to
driversshield monthly in arrears reflecting the amount owed to
EDS by driversshield for Design and Development Services
provided during the previous month, with such supporting
documentation as driversshield reasonably requests, and
driversshield will pay the invoiced amount by the 15th day
following receipt by driversshield of the invoice.
(b) Operational Services. Within the first ten (10) days of each
month of this Agreement beginning with the Operational Date,
in consideration for the performance of the Operational
Services as described in Section 2(b) above, driversshield
will pay EDS the EDS Percentage applicable to the prior month,
as set forth on Exhibit D. The EDS Percentage covers all of
EDS' out of pocket expenses related to providing the services
that EDS is expressly required to perform hereunder.
(c) Additional Services. For any Additional Services provided by
EDS hereunder, EDS will (unless otherwise set forth in
Sections B-1(a), B-2(b)(i), or B-3(b)(i) of Exhibit B),
invoice driversshield therefor at the EDS Labor Rate, plus any
expenses associated therewith, which amounts shall be paid in
accordance with Section 5(d); provided, however, that the
Fulfillment Services and the transition services described in
Section 11(d) will be invoiced at EDS' then current commercial
billing rates.
(d) Invoicing. Unless expressly agreed otherwise, driversshield
shall pay all invoiced amounts by the fifteenth (15th) day
following receipt by driversshield of EDS' invoice. For all
EDS Services provided, driversshield will pay or reimburse EDS
for all taxes, assessments, duties, permits and fees, however
designated, that are levied upon this Agreement, the EDS
Services or the software, equipment, materials or other
property, or their use, provided hereunder, excluding income
or franchise taxes that are based on or measured by EDS' net
income. EDS will submit a written invoice to driversshield
monthly in arrears reflecting the amount owed to EDS by
driversshield for such expenses or taxes incurred during the
previous month, with such supporting documentation as
driversshield reasonably requests, and driversshield will pay
the invoiced amount by the 15th day following receipt by
driversshield of the invoice. Any past due amounts hereunder
will bear interest until paid at a rate of interest equal to
the lesser of (i) the prime rate established from time to time
by Citibank of New York plus two percent or (ii) the maximum
rate of interest allowed by applicable law.
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(e) Audit Rights. Upon EDS' request, driversshield will provide
EDS or its designee with access to its facilities, books and
records, for audit as reasonably necessary to determine the
amounts due to EDS hereunder. Upon driversshield's request,
EDS will provide driversshield or its designee with access to
its facilities, books and records, for audit as reasonably
necessary to determine the amounts due to driversshield
hereunder; provided, however, that in no event will EDS be
required to disclose its internal costs.
6. Employees. The EDS personnel performing the EDS Services will be and
remain the employees of EDS, and EDS will provide for and pay the
compensation and other benefits of such employees, including salary,
health, accident and workers' compensation benefits and all taxes and
contributions which an employer is required to pay relating to the
employment of employees. During the term of this Agreement and for a
period of 12 months thereafter, neither party will solicit, directly or
indirectly, for employment or employ any employee of the other who is
or was involved in the performance of the EDS Services without the
prior written consent of the other.
7. Confidentiality and Announcements. EDS and driversshield will have the
confidentiality obligations set forth in Exhibit E. Neither party will
make any media release or other public announcement relating to or
referring to this Agreement without the other's prior written consent.
8. Warranties and Additional Covenants. EDS and driversshield will have
the obligations relating to warranties and additional covenants set
forth in Exhibit F.
9. Ownership. Each party will retain all rights in any software, ideas,
concepts, know-how, development tools, techniques or any other
proprietary material or information that it owned or developed prior to
the Effective Date, or acquired or developed after the Effective Date
without reference to or use of the intellectual property of the other
party. All software that is licensed by a party from a third party
vendor will be and remain the property of such vendor. EDS shall obtain
any applicable third party consents or licenses necessary for EDS to
host the Website as required hereunder, and, thereafter, such consents
or licenses shall be the responsibility of driversshield. Subject to
any third party rights or restrictions and the other provisions of this
Section 9, driversshield will own the deliverables that (a) are
developed and delivered by EDS under this Agreement and (b) are paid
for by driversshield (the "Deliverables"). Notwithstanding anything to
the contrary in this Agreement, EDS (i) will retain all right, title
and interest in and to all software development tools, know-how,
methodologies, processes, technologies or algorithms used in performing
the EDS Services which are based on trade secrets or proprietary
information of EDS or are otherwise owned or licensed by EDS
(collectively, "tools"), (ii) will be free to use the ideas, concepts,
methodologies, processes and know-how which are developed or created in
the course of performing the EDS Services and may be retained by EDS'
employees in intangible form and (iii) will retain ownership of any
EDS-owned software or tools that are used in producing the Deliverables
and become embedded in the Deliverables. EDS hereby grants to
driversshield a perpetual (subject to compliance with this sentence),
royalty-free, nontransferable, nonexclusive license to use such
embedded software and tools (if any) solely in connection with
driversshield's internal use and exploitation of the Deliverables and
only so long as such software and tools (if any) remain embedded in the
Deliverables and are not separated therefrom. No licenses will be
deemed to have been granted by either party to any of its patents,
trade secrets, trademarks or copyrights, except as otherwise expressly
provided in this Agreement. Nothing in this Agreement will require EDS
or driversshield to violate the proprietary rights of any third party
in any software or otherwise. The provisions of this Section 9 will
survive the expiration or termination of this Agreement for any reason.
10. Mediation; Arbitration. Any dispute, controversy or claim arising
under, out of, in connection with or in relation to this Agreement, or
the breach, termination, validity or enforceability of any provision
hereof (a "Dispute"), if not resolved informally through negotiation
between the parties, will be submitted to non-binding mediation. The
parties will mutually determine who the mediator will be from a list of
mediators obtained from the American Arbitration Association office
located in the city determined as set forth below in this Section 10
(the "AAA"). If the parties are unable to agree on the mediator, the
mediator will be selected by the AAA. If any Dispute is not resolved
through mediation, it will be resolved by final and binding arbitration
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conducted in accordance with and subject to the Commercial Arbitration
Rules of the AAA then applicable. One arbitrator will be selected by
the parties' mutual agreement or, failing that, by the AAA, and the
arbitrator will allow such discovery as is appropriate, consistent with
the purposes of arbitration in accomplishing fair, speedy and cost
effective resolution of disputes. The arbitrator will reference the
rules of evidence of the Federal Rules of Civil Procedure then in
effect in setting the scope of discovery, except that no requests for
admissions will be permitted and interrogatories will be limited to
identifying (a) persons with knowledge of relevant facts and (b) expert
witnesses and their opinions and the bases therefor. Judgment upon the
award rendered in any such arbitration may be entered in any court
having jurisdiction thereof. Any negotiation, mediation or arbitration
conducted pursuant to this Section 10 and initiated by driversshield
will take place in Plano, Texas, and in Plainview, New York if
initiated by EDS. Other than those matters involving injunctive relief
or any action necessary to enforce the award of the arbitrator, the
parties agree that the provisions of this Section 10 are a complete
defense to any suit, action or other proceeding instituted in any court
or before any administrative tribunal with respect to any Dispute or
the performance of the EDS Services by EDS. Each party acknowledges and
agrees that the other party may seek injunctive relief in order to
enforce the covenants set forth in Section 16(b) and (c). Nothing in
this Section 10 prevents the parties from exercising their right to
terminate this Agreement in accordance with Section 11.
11. Termination.
(a) Default. If either party materially defaults in the
performance of any of its obligations under this Agreement,
which default (a) if of a non-monetary nature, is not
substantially cured within 60 days after notice is given to
the defaulting party specifying the default or, with respect
to those defaults that cannot reasonably be cured within 60
days, should the defaulting party fail to proceed within 60
days to commence curing the default and thereafter to proceed
with all reasonable diligence to substantially cure the
default, or (b) if of a monetary nature, is not cured within
10 days after notice is given to the defaulting party
specifying the default, the party not in default may, by
giving written notice thereof to the defaulting party,
terminate this Agreement as of a date specified in such notice
of termination.
(b) Other Than Default. This Agreement may be terminated for
reasons other than default as set forth below:
(i) If, during the final two (2) calendar months of the
First Contract Year, the Contracted Net Revenue
averages less than Two Hundred and Twenty Five
Thousand Dollars ($225,000.00) per month, then either
party shall have the option to terminate this
Agreement upon thirty (30) days' prior written
notice, which option must be exercised within thirty
(30) days following the date that driversshield
provides EDS with such information as set forth in
Section C-1 of Exhibit C; or
(ii) If the EDS Revenues for the Second Contract Year are
less than Three Million, Two Hundred and Fifty Five
Thousand Dollars ($3,255,000.00), then EDS shall have
the option to terminate this Agreement upon thirty
(30) days' notice, which option must be exercised
within sixty (60) days following the end of the
Second Contract Year; or
(iii) If the EDS Revenues for the Third Contract Year are
less than Twelve Million, Eight Hundred Thousand
Dollars ($12,800,000.00), then EDS shall have the
option to terminate this Agreement upon thirty (30)
days' notice, which option must be exercised within
sixty (60) days following the end of the Third
Contract Year; or
(iv) If, during any two (2) consecutive calendar months
after EDS begins to provide the incremental services
that are described in Sections B-2(b), B-3(b) or
B-4(b) of Exhibit B, the Contracted Net Revenue or
the EDS Revenues, as applicable, fall below the
amounts that "triggered" EDS' provision of such
additional services, EDS may terminate this Agreement
upon sixty (60) days' written notice; provided,
however, that (A) during this 60-day period
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the parties will negotiate in good faith an amendment
to this Agreement in lieu of such termination, and
(B) if the parties are unable to agree to such an
amendment, EDS will provide the transition services
described in subparagraph 11(d) below.
(c) Effect of Termination or Expiration. Upon expiration or
termination of this Agreement for any reason, (i) EDS will
cease to perform the EDS Services for driversshield; and (ii)
driversshield will pay to EDS all sums due to EDS as a result
of the EDS Services performed through the effective date of
such expiration or termination, including the then current EDS
Percentage applicable to any Repair, or data relating thereto,
that was processed, tracked, or otherwise recorded using the
Website prior to such expiration or termination. Expiration or
termination of this Agreement for any reason will not release
either party from any liabilities or obligations set forth in
this Agreement which (i) the parties have expressly agreed
will survive any such expiration or termination or (ii) remain
to be performed or by their nature would be intended to be
applicable following any such expiration or termination.
(d) Transition Services. In connection with the termination of
this Agreement, EDS will, at driversshield's request and at
EDS' then current commercial billing rates, assist in the
orderly transition and migration to driversshield of the
Deliverables and the EDS Services then being performed by EDS,
including assisting driversshield in the installation of any
hardware and/or software or equipment purchased by
driversshield in connection with the transition.
12. Indemnities. EDS and driversshield will have the indemnity obligations
set forth in Exhibit G.
13. Liability.
(a) General Limitation. Neither party's liability to the other
(and any Affiliate) for any damages arising out of or related
to this Agreement, whether based in contract, equity,
negligence, tort or otherwise (excluding willful misconduct),
will be limited to and will not exceed, in the aggregate for
all claims, actions and causes of action of every kind and
nature, the lesser of (i) the sum of the payments to EDS
hereunder during the six (6) months prior to the event giving
rise to the liability, or (ii) Five Million Dollars
($5,000,000.00).
(b) Limitation on Other Damages. In no event will the measure of
damages payable by either party include, nor will either party
be liable for, any amounts for loss of income, profit or
savings or indirect, incidental, consequential, exemplary,
punitive or special damages of any party, including third
parties, even if such party has been advised of the
possibility of such damages in advance, and all such damages
are expressly disclaimed.
(c) Contractual Statute of Limitations. No claim, demand for
mediation or arbitration or cause of action which arose out of
an event or events which occurred more than two years prior to
the filing of a demand for mediation or arbitration or suit
alleging a claim or cause of action may be asserted by either
party against the other. The provisions of this Section 13
will survive the expiration or termination of this Agreement
for any reason.
14. Excused Performance. Neither party will be deemed to be in default
hereunder, or will be liable to the other, for failure to perform any
of its non-monetary obligations under this Agreement for any period and
to the extent that such failure results from any event or circumstance
beyond that party's reasonable control (each, a "force majeure event"),
including natural disasters, riots, war, civil disorder, court orders,
acts or omissions of the other party or third parties, acts or
regulations of governmental bodies, labor disputes or failures or
fluctuations in electrical power, heat, light, air conditioning or
telecommunications equipment or lines, or other equipment failure, and
which it could not have prevented by reasonable precautions or could
not have remedied by the exercise of reasonable efforts.
15. Export Regulations. This Agreement is expressly made subject to any
United States government laws, regulations, orders or other
restrictions regarding export from the United States of computer
hardware, software, technical data or derivatives of such hardware,
software or technical data. Notwithstanding
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anything to the contrary in this Agreement, neither party will directly
or indirectly export (or reexport) any computer hardware, software,
technical data or derivatives of such hardware, software or technical
data, or permit the shipment of same: (a) into (or to a national or
resident of) Cuba, North Korea, Iran, Iraq, Libya, Syria or any other
country to which the United States has embargoed goods; (b) to anyone
on the U.S. Treasury Department's List of Specially Designated
Nationals, List of Specially Designated Terrorists or List of Specially
Designated Narcotics Traffickers, or the U.S. Commerce Department's
Denied Parties List; or (c) to any country or destination for which the
United States government or a United States governmental agency
requires an export license or other approval for export without first
having obtained such license or other approval. Each Party will
reasonably cooperate with the other and will provide to the other
promptly upon request any end-user certificates, affidavits regarding
reexport or other certificates or documents as are reasonably requested
to obtain approvals, consents, licenses and/or permits required for any
payment or any export or import of products or services under this
Agreement. The provisions of this Section 15 will survive the
expiration or termination of this Agreement for any reason.
16. Right to Engage in Other Activities; Limited Restrictions; Exclusivity.
(a) General Right to Engage in Other Activities. driversshield
acknowledges and agrees that EDS may provide information
technology services for third parties at any EDS facility that
EDS may utilize from time to time for performing the EDS
Services. Except as expressly set forth in Section 16(b),
nothing in this Agreement will impair EDS' right to acquire,
license, market, distribute, develop for itself or others or
have others develop for EDS similar technology performing the
same or similar functions as the technology and EDS Services
contemplated by this Agreement.
(b) Limited Restrictions. In consideration of driversshield's
exclusivity covenant described in Section 16(c), EDS agrees
that:
(i) it will not, prior to January 17, 2001, enter into an
agreement with any party to design, develop and
operate a website with functionality substantially
similar to that of the Website, and the purpose of
which is to provide insurance carriers with the
ability to offer its individual insureds (as opposed
to its corporate or fleet customers) collision repair
management services in the United States of America,
Canada, Mexico or Puerto Rico (collectively, "North
America") via the internet; and
(ii) it will not, prior to January 17, 2001, dedicate any
of the three (3) key Website developers (Xxxxx
Xxxxxxx, Xxx Xxxxxxx and Xxxxxxxxx Xxxxxxxx), to the
design and development of a website with
functionality substantially similar to that of the
Website for an EDS client that is in the business of
providing insurance carriers with the ability to
offer its individual insureds (as opposed to its
corporate or fleet customers) collision repair
management services in North America via the
internet; and
(iii) it will not, prior to January 17, 2004, enter into an
agreement with any party under which (i) EDS is
required to design, develop and operate a website
with functionality substantially similar to that of
the Website, and the purpose of which is to provide
insurance carriers with the ability to offer its
individual insureds (as opposed to its corporate or
fleet customers) collision repair management services
in North America via the internet, and (ii) EDS'
compensation under for such services is based upon a
percentage of the client's revenues;
provided, however, that the restrictions enumerated in this
Section 16(b) shall lapse upon termination or expiration of
this Agreement for any reason.
(c) Exclusivity. driversshield shall market, promote and utilize
the Website exclusively to support its respective clients
providing individual insureds (as opposed to corporate or
fleet customers) with collision repair management services in
North America via the internet.
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17. Notices. All notices under this Agreement will be in writing and will
be deemed to have been duly given if delivered personally or by a
nationally recognized courier service, faxed or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the
parties at the addresses set forth herein. All notices under this
Agreement that are addressed as provided in this Section 17, (a) if
delivered personally or by a nationally recognized courier service,
will be deemed given upon delivery, (b) if delivered by facsimile, will
be deemed given when confirmed and (c) if delivered by mail in the
manner described above, will be deemed given upon receipt. Either party
may change its address or designee for notification purposes by giving
notice to the other of the new address or designee and the date upon
which such change will become effective.
18. FPG Guarantee. From the Effective Date through the Operational Date,
FPG hereby unconditionally guarantees the performance by driversshield
of all of driversshield's duties and obligations under this Agreement
(including payment for the Design and Development Services), which
guarantee is an absolute, present and continuing guaranty of
performance. Beginning with the Operational Date and ending with the
earlier of the first date that (i) driversshield's voting stock is
publicly traded over a nationally recognized exchange, or (ii) the
percentage of FPG's ownership of driversshield's voting stock falls
below fifty percent (50%), or (iii) FPG controls less than fifty
percent (50%) of the total voting rights of driversshield, FPG shall
guarantee the performance of driversshield's duties and obligations
hereunder (including payment of the EDS Percentage) in proportion to
the percentage of FPG's equity in driversshield. The guarantee shall
remain in full force and effect without regard to, and the obligations
of FPG shall not be affected or impaired by: (a) any amendment or
modification of or addition or supplement to any of the respective
guaranteed obligations; (b) any extension, indulgence or other action
or inaction in respect of any of the respective guaranteed obligations;
(c) any exercise or nonexercise of any right, remedy, power or
privilege in respect of such guarantee, or any of the respective
guaranteed obligations; (d) any transfer of assets to, or any
consolidation or merger with or into, any person corporation,
partnership or other entity; (e) any bankruptcy, insolvency,
reorganization or similar proceeding: (f) any assignment or subcontract
by driversshield; or (g) any other circumstance, whether or not FPG
shall have had notice or knowledge of any of the foregoing. FPG
unconditionally waives (i) notice of any of the matters referred to in
the preceding sentence and (ii) all notice which may be required by
statute, rule of law or otherwise to preserve the rights thereof,
including, without limitation, the right to notice of default,
presentment to and demand of payment and protest for non-payment or
dishonor. Any notice to FPG must be in writing and delivered in
accordance with the terms, and to the address of such party, originally
set forth in this Agreement.
19. Other. Where agreement, approval, acceptance or consent of either party
is required by this Agreement, such action will not be unreasonably
withheld or delayed. The Parties are independent contractors, and this
Agreement will not be construed as constituting either party as
partner, joint venturer or fiduciary of the other. If any provision
(other than a provision relating to any payment obligation) of this
Agreement or the application thereof to any persons or circumstances
is, to any extent, held invalid or unenforceable, the remainder of this
Agreement or the application of such provision to persons or
circumstances other than those as to which it is invalid or
unenforceable will not be affected thereby, and each provision of this
Agreement will be valid and enforceable to the extent permitted by law.
Nothing in this Agreement may be relied upon or will benefit any party
other than EDS and driversshield. This Agreement (a) will be governed
by the substantive laws of the State of Texas (without giving effect to
any choice-of-law rules that may require the application of the laws of
another jurisdiction), (b) may not be assigned by either party without
the prior written consent of the other (except that EDS will have the
right to perform the EDS Services itself and through its direct and
indirect wholly-owned subsidiaries and to subcontract to unaffiliated
third parties portions of the EDS Services, so long as EDS remains
responsible for the obligations performed by any of its subsidiaries or
subcontractors to the same extent as if such obligations were performed
by EDS employees), (c) may not be changed or modified orally or through
a course of dealing, but only by a written amendment or revision signed
by the parties and (d) together with the exhibits attached hereto (each
of which is incorporated into this Agreement by this reference),
constitutes the entire agreement of the parties with respect to the
subject matter hereof, superseding any previous or contemporaneous
representations, understandings or agreements with respect thereto.
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In Witness Whereof, the parties have duly executed and delivered this Agreement
as of the date first set forth above.
xxxxxxxxxxxxx.xxx CORP. ELECTRONIC DATA SYSTEMS
CORPORATION
By: By:
----------------------------- -------------------------------
Title: Title:
-------------------------- ----------------------------
Address:51 East Bethpage Rd. Address: 0000 Xxxxxx Xxxxx; Mail Stop
Plainview, NY 11803-4224 Xxxxx, XX 00000
Date: Date:
---------------------------- -------------------------------
FIRST PRIORITY GROUP, INC. EDS INFORMATION SERVICES L.L.C.
[For purposes of Section 18 only]
By: By:
------------------------------ ----------------------------------
Title: Title:
--------------------------- -----------------------------
Address: Address: 0000 Xxxxxx Xxxxx; Mail Stop
------------------------- Xxxxx, XX 00000
Date: Date:
---------------------------- -------------------------------
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Exhibit A
Definitions
As used in this Agreement, the following terms shall be defined as follows:
Affiliate shall mean every corporation or other entity directly or indirectly
controlling, controlled by or under the direct or indirect common control with
driversshield. A corporation or other entity shall be deemed to control a
corporation or other entity if such corporation or other entity possesses
directly or indirectly the power to (i) vote 10% or more of the securities
having ordinary voting power for the election of the directors of such other
corporation or (ii) direct or cause the direction of the management and policies
of such other corporation or other entity whether through the ownership of
voting securities, by contract or otherwise.
Contract Year shall mean, as applicable, the First Contract Year, and each
one-year period thereafter.
Contracted Net Revenue shall mean that portion of the Net Revenue that is
received, recognized or accrued by driversshield from a driversshield client
pursuant to an agreement that does not contain a clause permitting the
termination of such agreement, without cause, or such clause has expired without
cancellation of that agreement.
Cost of Sales shall mean (i) payments by driversshield to a Vendor for a Repair,
and (ii) the direct cost to driversshield of the Fulfillment Services, whether
such services are performed by driversshield, or performed by EDS and invoiced
to driversshield as set forth in Section B-5 of Exhibit B, and (iii) any
Additional Services that are paid for by driversshield in accordance with
Sections B-1(a), B-2(b)(i), or B-3(b)(i) of Exhibit B.
EDS Labor Rate shall mean eighty percent (80%) of EDS' then current commercial
billing rates (which rates shall be subject to adjustment in accordance with
Section D-5 of Exhibit D), discounted by the amount of the then current EDS
Percentage.
EDS Percentage shall mean, for each calendar month of this Agreement after the
Operational Date, the percentage of Net Revenue that is received, recognized or
accrued by driversshield applicable to the prior calendar month, and payable to
EDS in accordance with the terms of this Agreement.
EDS Revenue shall mean the amounts, derived from the EDS Percentage, actually
paid to EDS hereunder.
First Contract Year shall mean the period of time beginning with the Operational
Date, and ending on the last day of the twelfth (12th) calendar month
thereafter. For example, if the Operational Date is January 15, 2000, the last
day of the First Contract Year will be January 31, 2001.
Fulfillment Services shall mean the printing, assembly, material insertion, and
postage to deliver the Driver's Shield(R) membership kit (which, as of the
Effective Date, driversshield represents costs approximately Five Dollars
($5.00) per kit).
Net Revenue shall mean an amount determined, for any applicable period of time,
by subtracting Cost of Sales from Total driversshield Revenue.
Operational Date shall mean the first date that the Website is made available
for access by insurance carriers.
Repair shall mean a claim for the physical damage or mechanical repair of a
motor vehicle that is processed, tracked or otherwise recorded on the Website.
Second Contract Year shall mean the one-year period beginning on the day after
the last day of the First Contract Year.
A-1
Third Contract Year shall mean the one-year period beginning on the day after
the last day of the Second Contract Year.
Total driversshield Revenue shall mean, for any applicable period of time, all
revenues that are received, recognized or accrued by driversshield (and any
Affiliate that EDS and driversshield may agree, pursuant to Section 4, may
utilize the Website to process, track or otherwise record any data relating to a
Repair) following the Operational Date, including but not limited to all: Repair
payments from insurance carriers; Website listing fees; and driversshield
membership fees (including renewal thereof) derived solely from memberships that
were originated following the completion of a Repair processed, tracked, or
otherwise recorded on the Website.
Vendor shall mean a motor vehicle repair facility, rental agency, appraiser,
glass replacement company, salvage facility or other facility providing
Repair-related services.
Website shall mean the internet website developed pursuant to the Website
Specification.
A-2
Exhibit B
Description of EDS Services
The EDS Services to be provided hereunder shall consist of (i) the Design and
Development Services generally described in Section 2(a) of this Agreement, for
which EDS shall be compensated as set forth in Section 5(a) of this Agreement,
and (ii) the Operational Services, as described below, for which EDS shall be
compensated as set forth in Section 5(b) of this Agreement.
B-1. First Contract Year.
(a) Basic Services. During the First Contract Year, EDS will generally be
responsible for providing the following items:
o EDS will use reasonable efforts to introduce driversshield to EDS'
customers that provide auto insurance to its insureds.
o EDS will provide an account manager responsible for:
o Coordinates and prioritizes resources to meet driversshield business
requirements, ongoing and incremental
o Accountable for deliverables
o driversshield communications
o Advises driversshield on IT aspects of its business plan
o Escalation of relevant issues within EDS
o Web hosting and help desk - as described in the Website Specification
o Website enhancements - up to 100 hours monthly
o EDS will provide additional website enhancements, as mutually agreed, above
100 hours and, in consideration thereof, driversshield will pay for such
additional hours at the lesser of (i) EDS' then current commercial billing
rates, or (ii) an adjustable rate that shall start, as of the Effective
Date, at One Hundred and Fifty Dollars ($150.00) per hour, and shall be
subject to adjustment in accordance with Section D-5 of Exhibit D, which
amount shall be invoiced by EDS and payable by driversshield in accordance
with Section 5(d), and then, upon payment, included in the Cost of Sales.
o Implementation support to insurance carrier - up to 40 hours per carrier,
with roles and responsibilities to be mutually agreed upon between EDS and
driversshield, which may include:
o Documentation / creation of training materials
o Training tech support of carrier MIS department on:
o Firewall / network issues
o Password administration
o EDS will provide additional implementation support to insurance carriers,
as mutually agreed, above 40 hours and, in consideration thereof,
driversshield will pay for such additional hours at the lesser of (i) EDS'
then current commercial billing rates, or (ii) an adjustable rate that
shall start, as of the Effective Date, at One Hundred and Fifty Dollars
($150.00) per hour, and shall be subject to adjustment in accordance with
Section D-5 of Exhibit D, which amount shall be invoiced by EDS and payable
by driversshield in accordance with Section 5(d), and then, upon payment,
included in the Cost of Sales.
(b) Incremental EDS Services During the First Contract Year. If the trigger
described in Section B-2(b) is satisfied during the First Contract
Year, then EDS agrees to perform, during the first two (2) months after
such trigger is satisfied, up to One Thousand (1,000) hours of the
additional services described in Section B-2(b)(i) below. Additionally,
if during the First Contract Year the Contracted Net Revenue exceeds
Four Hundred Thousand Dollars ($400,000.00) during any calendar month,
then EDS will provide (during the two (2) months immediately following
the completion of the first One Thousand (1,000) hours of services
described in the preceding sentence), an additional One Thousand
(1,000) hours to begin implementing some of the incremental services
described in Section B-2(b)(i) below.
It is understood and agreed that (i) nothing in this Section
B-1(b) shall require EDS to provide, during the First Contract Year, more than
Two Thousand (2,000) hours of the incremental services
B-1
described in Section B-2(b) below; and (ii) the services performed by EDS
pursuant to this Section B-1(b) shall be credited toward EDS' obligations
described in Section B-2(b).
B-2. Second Contract Year.
(a) Basic Services. During the Second Contract Year, EDS will generally be
responsible for providing the basic services described in Section
B-1(a) above.
(b) Trigger for Incremental EDS Services. If during the First Contract
Year, either (i) the Contracted Net Revenue exceeds Three Hundred and
Eight Thousand, Three Hundred and Thirty Three Dollars ($308,333.00)
for two (2) consecutive calendar months, or (ii) the Net Revenue
exceeds Five Hundred Thousand Dollars ($500,000.00) for two (2)
consecutive calendar months, EDS will provide, during the Second
Contract Year, the following incremental services:
(i) up to Six Thousand (6,000) hours of implementation and/or
development services (less any hours provided by EDS pursuant
to Section B-1(b)), to be used as mutually agreed for
activities including but not limited to developing and
implementing call center services similar to those provided by
driversshield during the First Contract Year; additional
definition and/or development work on the website; development
and/or implementation of additional services like iBilling,
financial EDI, or EDS*FAX; or a carrier interface (similar to
informational website developed by EDS prior to the
commencement of the Design and Development Services). If
driversshield requests additional hours of support,
driversshield will pay for such additional hours at the lesser
of (i) EDS' then current commercial billing rates, or (ii) an
adjustable rate that shall start, as of the Effective Date, at
One Hundred and Fifty Dollars ($150.00) per hour, and shall be
subject to adjustment in accordance with Section D-5 of
Exhibit D, which amount shall be invoiced by EDS and payable
by driversshield in accordance with Section 5(d), and then,
upon payment, included in the Cost of Sales; and
(ii) up to 25 total people to staff the call center, assuming up to
4,000 Repairs per month and based upon driversshield's
estimate that each Repair will require an average of fifty
(50) minutes. Should the average amount of call minutes
required per Repair exceed fifty (50), then EDS shall have the
right to add additional personnel and invoice driversshield
therefor at the EDS Labor Rate, which amount shall be due and
payable in accordance with Section 5(d) of this Agreement. So
long as the average amount of call minutes required per Repair
does not exceed fifty (50), EDS agrees to increase the
staffing of the call center (over the original 25) at no
additional charge, at the rate of one additional person per
each additional 160 Repairs per month; and
(iii) up to 3 total Account Executives; and
(iv) An accounting system with a maximum cost of Fifty Thousand
Dollars ($50,000.00) for acquisition/development and
implementation, with driversshield and EDS to mutually define
functionality/scope.
B-3. Third Contract Year.
(a) Basic Services. During the Third Contract Year, EDS will generally be
responsible for providing the Operational Services performed during the
Second Contract Year.
(b) Trigger for Incremental EDS Services. If, during the final two (2)
calendar months of the Second Contract Year, the EDS Revenue averages
more than Three Hundred and Twelve Thousand, Two Hundred Dollars
($312,200.00) per month, then EDS will provide, during the Third
Contract Year, the following incremental services:
(i) up to Three Thousand (3,000) hours of implementation and/or
development services to be
B-2
used as mutually agreed for such activities as developing and
implementing enhancements to the website. If driversshield
requests additional hours of support, driversshield will pay
for such additional hours at the lesser of (i) EDS' then
current commercial billing rates, or (ii) an adjustable rate
that shall start, as of the Effective Date, at One Hundred and
Fifty Dollars ($150.00) per hour, and shall be subject to
adjustment in accordance with Section D-5 of Exhibit D, which
amount shall be invoiced by EDS and payable by driversshield
in accordance with Section 5(d), and then, upon payment,
included in the Cost of Sales; and
(ii) up to 43 total people to staff the call center, assuming up to
9,333 Repairs per month and based upon driversshield's
estimate that each Repair will require an average of forty
(40) minutes. Should the average amount of call minutes
required per Repair exceed forty (40), then EDS shall have the
right to add additional personnel and invoice driversshield
therefor at the EDS Labor Rate, which amount shall be due and
payable in accordance with Section 5(d) of this Agreement. So
long as the average amount of call minutes required per Repair
does not exceed forty (40), EDS agrees to increase the
staffing of the call center (over the original 43) at no
additional charge, at the rate of one additional person per
each additional 217 Repairs per month; and
(iii) up to 4 total Account Executives.
B-4. Fourth Contract Year.
(a) Basic Services. During the Fourth Contract Year, EDS will generally be
responsible for providing the Operational Services performed during the
Third Contract Year.
(b) Trigger for Incremental EDS Services. If, during the final two (2)
calendar months of the Third Contract Year, the EDS Revenue averages
more than One Million, Nine Hundred and Thirty Three Thousand, Three
Hundred and Thirty Three Dollars ($1,933,333.00) per month, then EDS
will provide, during the Fourth Contract Year, the following
incremental services:
(i) up to 66 total people to staff the call center, assuming up to
20,000 Repairs per month and based upon driversshield's
estimate that each Repair will require an average of thirty
(30) minutes. Should the average amount of call minutes
required per Repair exceed thirty (30), then EDS shall have
the right to add additional personnel and invoice
driversshield therefor at the EDS Labor Rate, which amount
shall be due and payable in accordance with Section 5(d) of
this Agreement. So long as the average amount of call minutes
required per Repair does not exceed thirty (30), EDS agrees to
increase the staffing of the call center (over the original
66) at no additional charge, at the rate of one additional
person per each additional 303 Repairs per month; and
(ii) up to 5 total Account Executives.
B-5. Fulfillment Services. The parties anticipate that EDS will assume
responsibility for performing the Fulfillment Services (the mailing of
the driversshield membership kits) during the Second Contract Year;
however, since EDS has not had the opportunity to estimate the
resources required for such performance, the parties will negotiate in
good faith a mutually agreeable price therefor, which amount will be
invoiced to driversshield on a monthly basis and included in the Cost
of Sales.
B-3
Exhibit C
driversshield's Role
C-1. Data Transfers. Within five (5) days following the end of each month of
this Agreement, driversshield will transmit to EDS, in a mutually
agreed upon format, an updated file containing the current status of
all Repair-related activity (including but not limited to Cost of
Sales, Total driversshield Revenue, Contracted Net Revenue and Net
Revenue), as necessary for EDS to (i) perform the EDS Services, and
(ii) verify the amounts due EDS hereunder.
C-2. DELETED
C-3. Software. driversshield will provide, or cause to be provided, to EDS
the right to access driversshield-owned software (including any
Deliverables) and software licensed to driversshield or a customer of
driversshield by a vendor if such is required for EDS to perform the
EDS Services, but for no other purpose. EDS will assist driversshield
in determining whether driversshield will need to obtain any consents,
licenses or other rights from vendors as contemplated by this Section
C-3. driversshield will be responsible for obtaining any such consents,
licenses or other rights and for finding an alternative solution in the
event a vendor refuses consent.
C-4. Inability to Access. Notwithstanding C-3, if for any reason (including
a determination that the costs and expenses associated with obtaining
consents, licenses or other rights or with finding an alternative
solution are unreasonable) driversshield declines or is unable to
provide to EDS the right to access any hardware, related equipment or
software for any reason, EDS will be relieved of those of its
obligations under this Agreement that are affected by such lack of
access rights, and the parties will mutually agree in writing on any
appropriate adjustments to this Agreement, whether with respect to the
scope of the EDS Services, EDS' charges or otherwise.
C-5. Personnel Resources. driversshield will provide and make available to
EDS appropriate management and technical personnel of driversshield who
will work with EDS and will perform, on a timely basis, those
activities referenced in this Agreement, the responsibility for which
is required therein to be assumed by driversshield. In addition,
driversshield will cooperate with EDS through making available such
personnel, management decisions, information, authorizations, approvals
and acceptances in order that EDS' performance of the EDS Services may
be properly, timely and efficiently accomplished.
C-6. Other Resources. Unless this Agreement specifically states otherwise,
driversshield will provide and be responsible for all:
o Call center staff including:
Shop management personnel
Account executive personnel
Accounting workstation / system
o Fulfillment services
o Sales and marketing
o Fax servers and support
o Implementation support to insurance carrier (to be determined by
EDS & driversshield)
C-1
Exhibit D
Compensation
D-1. First Contract Year.
During the First Contract Year, the EDS Percentage shall be
Thirty Percent (30%) of Net Revenue; provided, however, that
(i) driversshield shall be entitled to retain for itself one
hundred percent (100%) of the Net Revenue until it has
recouped the amount that it paid EDS for the Design and
Development Services pursuant to Section 5(a) of this
Agreement; and
(ii) after driversshield has recouped the amount set forth in (i)
above, EDS shall be paid one hundred percent (100%) of the Net
Revenue until it has recouped an amount equal to $100 per hour
for each hour in excess of 2,800 that it expended performing
the Design and Development Services (up to 3,600 hours).
D-2. Second Contract Year.
For each month of the Second Contract Year, the EDS Percentage shall be
Thirty Five Percent (35%).
D-3. Third Contract Year.
For each month of the Third Contract Year, the EDS Percentage shall be
Forty Two Percent (42%).
D-4. Fourth Contract Year.
For each month of the Fourth Contract Year, the EDS Percentage shall be
Forty Two Percent (42%).
D-5. Annual Adjustment to Charges Using Xxxxxx Index. The Parties
acknowledge and agree to use the percent change in "Total Cash
Compensation" for Systems Integration Job Families (the "Percent
Change") as the basis for annual adjustments to all charges to be paid
by driversshield to EDS under this Agreement as being subject to this
Section D-5 (the "Xxxxxx Index Adjustable Charges"), as the Percent
Change is either reported in the Xxxxxx Associates Index for Total Cash
Compensation (the "Index") or as such Systems Integration Job Families
information is otherwise made available by the management consulting
firm of Xxxxxx Associates LLC (or another comparable measure published
or made available by a mutually agreeable source should the Index no
longer be published, the content or format of the Index substantially
change or Xxxxxx Associates LLC no longer make comparable Systems
Integration Job Families information available). If, on any September 1
during the term of this Agreement, the most recently published or
available Percent Change is positive, an adjustment to the Xxxxxx Index
Adjustable Charges will be made by increasing the Xxxxxx Index
Adjustable Charges by such Percent Change. If an adjustment is not made
on a September 1 for any reason, then the basis for measuring the
Percent Change for the following September 1 will be same as the basis
for measuring the Percent Change for the September 1 on which no
adjustment was made. The Parties acknowledge and agree that EDS will
adjust the Xxxxxx Index Adjustable Charges and will advise
driversshield of such adjustment in writing so that the new charges
will amend this Agreement and become effective on the applicable
September 1. If no adjustment is made on a September 1 for any reason,
EDS will advise driversshield in writing of such fact.
D-1
Exhibit E
Confidentiality
E-1. Scope of Obligation. Except as otherwise expressly provided in this
Agreement, EDS and driversshield each agrees that (a) all information
communicated to it by the other and identified as confidential, whether
before or after the date hereof, (b) all information identified as
confidential to which it has access in connection with the EDS
Services, whether before or after the date hereof, and (c) this
Agreement and the parties' rights and obligations hereunder, will be
and will be deemed to have been received in confidence and will be used
only for purposes of this Agreement, and each of EDS and driversshield
agrees to use the same means as it uses to protect its own confidential
information, but in no event less than reasonable means, to prevent the
disclosure and to protect the confidentiality thereof. No such
information will be disclosed by the recipient party without the prior
written consent of the other party; provided, however, that each party
may disclose this Agreement and the other party's confidential
information to those of the recipient party's attorneys, auditors,
insurers (if applicable), subcontractors and full time employees who
have a need to have access to such information in connection with their
employment (or engagement, if applicable) by the recipient party, so
long as the recipient party requires, in the case of its attorneys,
auditors and insurers, that each of them execute a confidentiality
agreement containing terms and conditions no less restrictive than
those set forth in this Exhibit E and advises, in the case of its
subcontractors and employees, each such subcontractor and employee of
the confidentiality obligations set forth in this Exhibit E. In any
event, compliance by each of the persons referenced in the preceding
sentence with the confidentiality obligations set forth in this Exhibit
E will remain the responsibility of the party employing or engaging
such persons.
E-2. Exceptions. The foregoing will not prevent either party from disclosing
information that belongs to such party or (i) is already known by the
recipient party without an obligation of confidentiality other than
under this Agreement, (ii) is publicly known or becomes publicly known
through no unauthorized act of the recipient party, (iii) is rightfully
received from a third party, (iv) is independently developed without
use of the other party's confidential information or (v) is disclosed
without similar restrictions to a third party by the party owning the
confidential information. If confidential information is required to be
disclosed pursuant to a requirement of a governmental authority, such
confidential information may be disclosed pursuant to such requirement
so long as the party required to disclose the confidential information,
to the extent possible, provides the other party with timely prior
notice of such requirement and coordinates with such other party in an
effort to limit the nature and scope of such required disclosure;
provided, however, that, in the event of a tax audit, (A) notice of a
disclosure requirement in connection therewith will not be given prior
to the commencement of the audit, and (B) the parties will use
commercially reasonable efforts to ensure that any confidential
information that is subject to a valid request for delivery of a copy
of such information (including a copy of this Agreement) to the taxing
authority is not subject to further disclosure by it (such as by
marking such information as a trade secret). If confidential
information is required to be disclosed in connection with the conduct
of any mediation or arbitration proceeding carried out pursuant to
Section 10 of this Agreement, such confidential information may be
disclosed pursuant to and in accordance with the approval and at the
direction of the mediator or arbitrator, as the case may be, conducting
such proceeding. Upon written request of the disclosing party at the
expiration or termination of this Agreement for any reason, all
documented confidential information (and all copies thereof) of the
disclosing party will be returned to the disclosing party or will be
destroyed, with written certification thereof being given to the
disclosing party. The provisions of this Exhibit E will survive the
expiration or termination of this Agreement for any reason.
Notwithstanding anything to the contrary herein, the parties
acknowledge that certain disclosure of this Agreement may be required
to be filed with the U.S. Securities and Exchange Commission ("SEC")
and/or an exchange on which the party's common stock is traded, and
nothing in this Agreement shall prevent either party from making such
required disclosures upon advice of their respective counsel.
Additionally, the terms of this Agreement may be disclosed to potential
investors of driversshield so long as driversshield requires such
potential investors to execute a confidentiality agreement containing
terms and conditions no less restrictive than those set forth in this
Exhibit E.
E-1
Exhibit F
Warranties and Additional Covenants
F-1. Performance. EDS represents and warrants that all EDS Services will be
performed in a professional and workmanlike manner.
F-2. driversshield Information. driversshield represents and warrants that,
to the best of its knowledge, the information furnished by
driversshield to EDS on which EDS based the description of the EDS
Services and the charges to be paid by driversshield therefor, in each
case as set forth in this Agreement, is accurate and complete in all
material respects.
F-3. Viruses. Each party will use commercially reasonable measures to screen
any software provided or made available by it to the other party
hereunder for the purpose of avoiding the introduction of any "virus"
or other computer software routine or hardware components which are
designed (i) to permit access or use by third parties to the software
of the other party not authorized by this Agreement, (ii) to disable or
damage hardware or damage, erase or delay access to software or data of
the other party or (iii) to perform any other similar actions.
F-4. Disabling Codes. EDS will not, without informing driversshield's
Representative, knowingly insert into the software used by it hereunder
any code or other device which would have the effect of disabling,
damaging, erasing, delaying or otherwise shutting down all or any
portion of the EDS Services or the hardware, software or data used in
performing the EDS Services. EDS will not invoke such code or other
device at any time, including upon expiration or termination of this
Agreement for any reason, without driversshield's prior written
consent.
F-5. Year 2000. driversshield acknowledges and agrees that EDS will not be
responsible for:
(a) Changes, modifications, updates or enhancements to, and
any inaccuracies, delays, interruptions or errors caused by,
interfaces between any EDS-proprietary system and any system
that EDS does not operate under this Agreement;
(b) Any inaccuracies, delays, interruptions or errors
occurring as a result of incorrect data or data from other
systems, including telecommunications systems, software,
hardware, processes or third parties provided in a format that
is inconsistent with the format and protocols established for
any EDS-proprietary system, including date data in two digit
format, even if such data is required for the operation of
that system; and
(c) any inaccuracies, delays, interruptions or errors
occurring as a result of incorrect data or data from
telecommunication systems.
F-6. Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS EXHIBIT F,
EDS MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING ANY MATTER, INCLUDING THE MERCHANTABILITY, SUITABILITY,
ORIGINALITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, OR RESULTS TO BE
DERIVED FROM THE USE, OF ANY INFORMATION TECHNOLOGY SERVICE, SOFTWARE,
HARDWARE OR OTHER MATERIALS PROVIDED UNDER THIS AGREEMENT. EDS DOES NOT
REPRESENT OR WARRANT THAT THE OPERATION OF ANY SOFTWARE WILL BE
UNINTERRUPTED, ERROR-FREE OR YEAR 2000 COMPLIANT.
F-1
Exhibit G
Indemnities
G-1. Claims Relating to Personal Injury and Property Damage.
(a) General. EDS and driversshield each will be responsible for
any and all claims, actions, damages, liabilities, costs and
expenses, including reasonable attorneys' fees and expenses
(collectively, "Losses"), to their respective tangible
personal or real property (whether owned or leased), and each
party agrees to look only to its own insuring arrangements (if
any) with respect to such Losses. EDS and driversshield each
will be responsible for Losses for the death of or personal
injury to any person (including any employee of either party)
and Losses for damages to any third party's tangible personal
or real property (whether owned or leased), in accordance with
the law of the jurisdiction in which such Loss is alleged to
have occurred. Subject to Section 13 of this Agreement and the
procedures set forth below in Section G-4, each party will
indemnify and defend the other party and hold the other party
harmless from any and all Losses arising out of, under or in
connection with claims for which the indemnitor is responsible
under the preceding sentence.
(b) Waiver of Subrogation. EDS and driversshield waive all rights
to recover against each other for any Loss to their respective
tangible personal property (whether owned or leased) from any
cause covered by insurance maintained by each of them,
including their respective deductibles or self-insured
retentions. EDS and driversshield will cause their respective
insurers to issue appropriate waivers of subrogation rights
endorsements to all property insurance policies maintained by
each Party. Each Party will give the other written notice if a
waiver of subrogation is unobtainable or obtainable only at
additional expense. If the Party receiving such notice agrees
to reimburse the other Party for such additional expense, the
other Party will obtain such waiver of subrogation. If a
waiver is unobtainable or if a Party elects not to pay the
additional expense of a waiver, then neither Party nor their
insurers will waive such subrogation rights.
G-2. Infringement Claims.
(a) General. Subject to Section 13 of this Agreement, the
limitations set forth below in this Section G-2 and the
procedures set forth below in Section G-4, EDS and
driversshield each agrees to defend the other party against
any action to the extent that such action is based upon a
claim that the software (other than third party software) or
confidential information provided by the indemnitor, or any
part thereof, (i) infringes a copyright perfected under United
States statute, (ii) infringes a patent granted under United
States law or (iii) constitutes an unlawful disclosure, use or
misappropriation of another party's trade secret. The
indemnitor will bear the expense of such defense and pay any
Losses that are attributable to such claim finally awarded by
a court of competent jurisdiction.
(b) Exclusions. Neither EDS nor driversshield will be liable to
the other for claims of indirect or contributory infringement.
The indemnitor will have no liability to the indemnitee
hereunder if (i) the claim of infringement is based upon the
use of software provided by the indemnitor hereunder in
connection or in combination with equipment, devices or
software not supplied by the indemnitor or used in a manner
for which the software was not designed, (ii) the indemnitee
modifies any software provided by the indemnitor hereunder and
such infringement would not have occurred but for such
modification, or uses the software in the practice of a
patented process and there would be no infringement in the
absence of such practice, or (iii) the claim of infringement
arises out of the indemnitor's compliance with specifications
provided by the indemnitee and such infringement would not
have occurred but for such compliance.
(c) Additional Remedy. If software or confidential information
becomes the subject of an infringement claim under this
Section G-2, or in the indemnitor's opinion is likely to
become the subject of such a claim, then, in addition to
defending the claim and paying any damages and attorneys' fees
as required above in this Section G-2, the indemnitor may, at
its option and in its sole discretion, (A) replace or modify
the software or confidential information to make it
noninfringing or cure any claimed misuse of another's trade
secret or (B) procure for the indemnitee the right to continue
using the software or confidential information pursuant to
this Agreement. Any costs associated with
1
implementing either of the above alternatives will be borne by
the indemnitor but will be subject to Section 13 of this
Agreement. If neither alternative is pursued by, or (if
pursued) is available to, the indemnitor, (x) the indemnitee
will return such software or confidential information to the
indemnitor and (y) if requested by the indemnitee in good
faith, the parties will negotiate, pursuant to Section 10 of
this Agreement but subject to Section 13 of this Agreement, to
reach a written agreement on what, if any, monetary damages
(in addition to the indemnitor's obligation to defend the
claim and pay any damages and attorneys' fees as required
above in this Section G-2) are reasonably owed by the
indemnitor to the indemnitee as a result of the indemnitee no
longer having use of such software or confidential
information. The payment of any such monetary damages will be
the indemnitee's sole and exclusive remedy for the inability
of the indemnitor to implement either of the above
alternatives.
G-3. Claims Relating to Internet Usage. driversshield warrants that the
publication of any material delivered by or through it hereunder will
not violate the copyright laws of the United States or any other
jurisdiction, unlawfully infringe or interfere in any way with the
literary property or rights of another or contain libelous or indecent
matter. Subject to Section 13 of this Agreement and the procedures set
forth below in Section G-4, driversshield will indemnify and defend EDS
and hold EDS harmless from any and all Losses, including those
associated with claims for indirect or contributory infringement,
arising out of, under or in connection with any claims relating to (i)
content, whether of an editorial, advertising or other nature, (ii) the
provision, use, alteration or distribution thereof, the accessibility
thereto or the exchange of information over the Internet in connection
therewith, including copyright infringement, libel, indecency, false
light, misrepresentation, invasion of privacy or image or personality
rights, (iii) statements or other materials made or made available by
readers of the content or by persons to whom the content is linked at
the request of driversshield or (iv) the conduct of driversshield's
business.
G-4. Procedures. The indemnification obligations set forth in this Exhibit G
will not apply unless the party claiming indemnification: (a) notifies
the other promptly in writing of any matters in respect of which the
indemnity may apply and of which the notifying party has knowledge, in
order to allow the indemnitor the opportunity to investigate and defend
the matter; provided, however, that the failure to so notify will only
relieve the indemnitor of its obligations under this Exhibit G if and
to the extent that the indemnitor is prejudiced thereby; and (b) gives
the other party full opportunity to control the response thereto and
the defense thereof, including any agreement relating to the settlement
thereof; provided, however, that the indemnitee will have the right to
participate in any legal proceeding to contest and defend a claim for
indemnification involving a third party and to be represented by legal
counsel of its choosing, all at the indemnitee's cost and expense.
However, if the indemnitor fails to promptly assume the defense of the
claim, the party entitled to indemnification may assume the defense at
the indemnitor's cost and expense. The indemnitor will not be
responsible for any settlement or compromise made without its consent,
unless the indemnitee has tendered notice and the indemnitor has then
refused to assume and defend the claim and it is later determined that
the indemnitor was liable to assume and defend the claim. The
indemnitee agrees to cooperate in good faith with the indemnitor at the
request and expense of the indemnitor.
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