1
EXHIBIT 10.13
BASIC ORDERING AGREEMENT
THIS AGREEMENT ("Agreement") is hereby entered into between Alta Software,
Inc., 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000X, Xxxxxx, XX 00000 ("Alta") and
Classified Ventures, L.L.C., 00 Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000 (the "CV") on the following terms and conditions:
1. General Undertaking. The parties are entering into this
Agreement to establish a relationship whereby CV may, from time to time,
commission Alta to perform certain technical consulting, feasibility analysis,
software design, prototyping, development, training, support or other
professional or technical services agreed to by the parties. Alta's
development approach contemplates that libraries of generic codes may be drawn
from Alta's object- oriented software framework whenever feasible and that
generic portions of Custom Work Product developed for particular projects will
be added to Alta's accumulated framework and reused by Alta on future,
unrelated projects, provided, however, that the parties agree in writing to the
specific portions of Custom Work Product which may be reused by Alta (such
approval will not be unreasonably withheld). In no event will Alta reuse any
portion of the code which contains any data relating to CV, its clients,
customers or their respective business.
2. Task Orders. Work performed under this Agreement shall be
described in a Task Order ("TO"), which in each instance shall be incorporated
herein as an Addendum to this Agreement and governed by the terms hereof at the
time it is signed by Xxxxxx Xxxxxxxxx and an authorized representative of the
CV. Execution of a TO shall be considered a commitment by CV to commission and
pay for the services described therein according to the hourly rates, terms and
subject to the conditions of the TO and this Agreement. The terms of a TO, if
in conflict with this Agreement, shall supersede this Agreement. Alta's
workers shall maintain contemporaneous daily time records of hours and tasks
performed; Alta will provide all such time records to CV along with its invoice
to CV. Any total dollar amounts or time schedules referenced in a TO shall be
considered reasonably accurate estimates, and work shall not exceed such amount
unless otherwise agreed in writing. A TO may be modified by a change order by
CV's written notice to Alta. The parties must agree in writing as to the terms
of any such change order, which shall be treated as a new and superseding TO.
3. Term and Termination.
(a) Term. The term of this Agreement ("Term") shall be effective
on the date last below written and, unless terminated earlier
in accordance with Section 12 ("Default"), shall continue in
full force and effect for a period of one (1) year and shall
automatically be renewed for successive one (1) year periods
unless either party notifies the other within thirty (30) days
prior to expiration of the then current Term
2
that the Agreement shall not be renewed. Except for
nonpayment brought to the attention of CV's management in
writing, Alta may not suspend or terminate work under a
particular TO at any time without CV's written permission.
(b) Termination.
1. The parties will have the right to terminate this
Agreement, or any TO, in the event of a material
breach of any provision of this Agreement by the
other party, unless such breach is cured within
thirty (30) days of the breaching party's receipt of
notice of such breach, or the filing of a bankruptcy
petition by the other party or the execution by the
other party of an assignment for the benefit of its
creditors.
2. Either party may terminate this Agreement or any TO,
effective upon written notice of termination, in the
event that the other party fails to perform any
material obligation, warranty, duty or responsibility
hereunder, or materially breaches any provision of
this Agreement, and such failure and/or breach has
not been cured within thirty (30) days after written
notice thereof.
(c) Effect of Termination.
1. Upon any termination of this Agreement: (i) all TOs
will automatically terminate, effective as of the
date of termination of this Agreement; (ii) each
party will return to the other all materials
embodying or disclosing the Confidential Information
of such other party; (iii) CV will promptly pay Alta
for all work performed by Alta prior to such
termination and not then paid for, provided that Alta
is not in breach of the Agreement with respect to
such services; and (iv) Alta will deliver all work in
process relating to any TO to CV, including but not
limited to all software relating thereto.
2. Survival. Any provisions of this Agreement that by
their sense and context are intended to survive
termination of this Agreement, including, but not
limited to, provisions regarding payment and
confidentiality, will so survive this Agreement.
Specifically, termination shall have no effect on the
provisions of Section 7 ("Nonsolicitation"), Section
9 ("Warranty, Indemnification and Disclaimer") and
Section 10 ("Limitation of Remedies & Liabilities").
4. Invoices, Payment, Certain Costs & Taxes. All services are
rendered on a time & materials basis and shall be invoiced monthly as work
progresses, provided
-2-
3
that such services shall not exceed the estimate set forth in each TO without
CV's written agreement. Invoices shall be submitted monthly and shall be paid
within thirty (30) days from date of invoice. Extension of trade credit is
conditioned upon prompt payment. Any late payment shall be subject to any
costs of collection (including reasonable legal fees) and shall bear interest
at the rate of one (1) percent per month or fraction thereof until paid.
Unless otherwise stated in a TO, prices quoted do not include costs of travel;
CV shall reimburse Alta for its pre-authorized cost of travel (air & cab fare,
lodging, auto rental) and out-of-pocket costs for overnight courier,
long-distance telephone and the like. CV shall pay, indemnify and hold Alta
harmless from all federal, state or local sales, use, value-added, gross
receipts, personal property or similar tax, duty or other levy (other than
taxes imposed on the net income or profits of Alta), and any interest or
penalties imposed thereon, with respect to the services or deliverables,
provided that ALTA includes such tax, duty or levy in its invoice(s) to CV or
promptly notifies CV of any notice of tax deficiency it may receive from
applicable authorities.
5. Proprietary Rights to Software.
(a) Custom Work Product Defined. "Custom Work Product" means the
resulting work product (including all functional and technical
designs, software prototypes, programs, modules, code,
algorithms, flowcharts, data diagrams, documentation and the
like) created by Alta after the effective date of this
Agreement on behalf of CV and in furtherance of a specific TO.
Custom Work Product does not include any of Alta's proprietary
software that is separately identified and acknowledged in
writing by the parties, including preexisting software
frameworks, libraries or code incorporated or "embedded" into
the Custom Work Product ("Embedded Software").
(b) Ownership of Custom Work Product. Subject to payment for work
performed in due course, CV shall own all right, title and
interest to all Custom Work Product. Alta expressly
acknowledges and agrees that subject to such payment, all such
Custom Work Product constitutes "work made for hire" under the
Federal copyright laws (17 U.S.C. Sec. 101) owned exclusively
by CV and, Alta hereby irrevocably assigns all ownership or
other rights it might have in Custom Work Product to CV. CV
will irrevocably xxxxx Xxxx a royalty-free, perpetual,
nonexclusive license in source code form to add agreed-upon
certain elements of Custom Work Product to Alta's "framework"
and libraries of code and to modify, sublicense and reuse on
unrelated projects any Custom Work Product of a generic nature
(such approval will be determined on a case-by-case basis and
will not unreasonably be withheld). The agreement must be in
writing for any such license to be effective.
-3-
4
(c) License to Embedded Software. Except as otherwise
specifically set forth in a TO addressing the subject: (i)
this Agreement conveys no ownership rights to CV with respect
to Embedded Software, and (ii) subject to payment for work
performed in due course, CV is granted a paid-up perpetual,
nonexclusive, nontransferable license to modify and use the
Embedded Software as an integral part of the Custom Work
Product and as it may relate to CV's internal business
operations and operations of its online site. The license may
not be sublicensed or distributed by CV to third parties, but
it may be transferred to a corporate successor-in-interest or
purchaser that acquires the stock or business assets
pertaining to CV operations utilizing the licensed Embedded
Software. The license granted by this Section will include
the right to modify and create derivative works of such
Embedded Products, provided, however, that: (i) no
modification or derivative work shall affect the right, title
and/or interest of Alta in and to such Embedded Software; (ii)
CV shall own the derivative work only to the extent of
substantial new authorship and subject to Alta's right to
create independently a derivative work in substantially the
same form, and (iii) Alta makes no warranty with respect to
code materially affected by the creation by CV of such
derivative works. CV grants Alta a nonexclusive, royalty free
and paid-up license to use and reproduce all such
modifications and derivative works, though CV will have no
duty to disclose or deliver to Alta any such modifications and
derivative works. Alta reserves all rights not expressly
granted. Embedded Software, (particularly any provided in
source code form) will not be disclosed by CV, except to CV
employees and consultants having a legitimate "need to know"
and who are bound by written nondisclosure restrictions and
will not be disassembled, decompiled or reverse engineered.
Embedded Software shall generally be licensed to CV in source
code form subject to confidentiality restrictions of this
Agreement, unless "executables only" are specified in the
applicable TO or unless Alta does not have the source code or
is otherwise legally restricted from delivering it (e.g.,
because the code is licensed from a third party in executable
form or distributable in runtime applications only as
executables).
6. Confidential Information.
(a) Acknowledgment of Confidentiality. Each party hereby
acknowledges that it may be exposed to confidential or
proprietary information belonging to the other party or
relating to its affairs including, without limitation, Custom
Work Product, Embedded Software and other technical
information (including functional and technical
specifications, designs, drawings, analysis, research,
processes, computer programs, methods, ideas, "know how" and
the like),
-4-
5
business information (sales and marketing research, materials,
plans, accounting and financial information, personnel records
and the like) and other information ("Confidential
Information"). Confidential information does not include (i)
information already known or independently developed by the
recipient; (ii) information in the public domain through no
wrongful act of the recipient, or (iii) information received
by the recipient from a third party who was free to disclose
it. For these purposes, Custom Work Product shall be
considered the Confidential Information of each party.
(b) Obligation to Keep Confidential. During and after the term of
this Agreement and at all times thereafter, the parties will:
(i) hold Confidential Information in confidence and trust;
(ii) not divulge or convey Confidential Information to any
third party other than personnel of the party having a
reasonable need to know such Confidential Information in the
course of their employment or work for the receiving party and
who are obligated to keep such Confidential Information
confidential; (iii) not publish or divulge Confidential
Information of the disclosing party to any third party or in
such a way that it is likely to become part of the public
domain or known in the trade. Nothing in this Agreement shall
limit CV's right to use Embedded Software to further develop,
modify or commercialize its software, and CV may disclose
Embedded Software under customary confidentiality restrictions
to appropriate consultants providing services to CV. A
violation of this Section will be a material violation of this
Agreement and will justify legal and/or equitable relief.
(c) Confidential Information Previously Disclosed. All
Confidential Information obtained by either party prior to the
Effective Date, whether in conjunction with the Project or
otherwise, is subject to this Agreement.
7. Nonsolicitation. During the Term and for one (1) year thereafter,
each party agrees not to hire, solicit, nor attempt to solicit the services or
business of any teaming partner, employee, or subcontractor (or employee/second
tier subcontractor thereof) of the other party without the written consent of
such other party. Nonsolicitation restrictions are not breached merely by
placement of "help wanted" advertisements directed to the public at large
(provided that the no-hire restriction shall continue to apply). A knowing
violation of this provision shall entitle the aggrieved party to assert
liquidated damages against the offending party equal to one hundred fifty (150)
percent of the affected party's annual compensation or expected annual gross
revenue from the relationship, together with enforcement costs (including
reasonable legal fees).
-5-
6
8. Injunctive Relief. The parties acknowledge that violation of one
party of the provisions of Section 5 ("Proprietary Rights to Software"),
Section 6 ("Confidential Information") or Section 7 ("Nonsolicitation") would
cause irreparable harm to the other party not adequately compensable by
monetary damages. In addition to other relief, it is agreed that temporary and
permanent injunctive relief shall be available, without necessity of posting
bond, to prevent any actual or threatened violation of such provisions.
9. Warranty, Indemnification and Disclaimer.
(a) Ownership of Alta Materials. Alta hereby represents and
warrants to the best of its knowledge and belief that: (i)
Alta will own, or will have obtained from the owners the right
to use, Custom Work Product; (ii) use of the Custom Work
Product and Embedded Software will not violate any applicable
law, regulation, rule or order, or infringe upon or violate
the United States intellectual property rights of any third
party and that Alta is not aware of any actual or threatened
litigation to the contrary; (iii) Alta will provide CV with
all necessary third party licenses prior to delivery of any
deliverable to CV containing third party software, and (iv)
Alta has or will require that all persons who perform services
relating to any TO execute work-for-hire agreements conveying
all rights relating thereto to Alta. The foregoing warranty
does not apply to the extent any infringement is caused by
Alta's adherence to CV technical specifications that dictate a
particular method.
(b) No Surreptitious Code. Alta represents and warrants that to
the best of its knowledge and belief. (i) the Custom Work
Product will not contain any timer, counter, lock or similar
device (other than security features specifically described in
the specifications) that deliberately inhibits or in any way
limits its ability to operate, and (ii) it will scan the
Custom Work Product with commercially available anti-virus
software and shall use due diligence to remove viruses capable
of being detected with such software.
(c) Year 2000 Warranty. Alta represents and warrants it will use
due diligence, to ensure the Custom Work Product records,
stores, recognizes, interprets, processes and presents both
20th and 21st century dates using four digit years
substantially according to formats and assumptions specified
in the Documentation. This warranty does not apply insofar as
the Custom Work Product derives date functions from other
programs (e.g., operating system run-time libraries,
databases or firmware) nor does it require Alta to workaround
or accommodate other programs or data that are not compliant
with Year 2000 standards. Alta reserves its right to
reasonable compensation for
-6-
7
reported Year 2000 defects that are later determined to
originate in other programs or data.
(d) Products and Services Warranty. Alta represents and warrants
that: (i) it will use its best efforts to complete its work
within Alta's estimated development schedule (which are
provided in good faith, but are subject to revision); (ii) it
will use due diligence to ensure all services rendered by it
in connection with the Project will be performed by qualified
personnel in a diligent and professional manner, and (iii)
that deliverables created by Alta will, as determined at final
acceptance testing, be free from material defects, in good
working order and will materially conform to specifications
contained in the TO at issue. During testing, the parties
will establish a prioritized list of defects and Alta will be
provided a reasonable opportunity to make corrections. Should
material defects persist, Alta's highest management will
ensure the issues are given highest priority and attention.
After final acceptance, Alta shall continue to be available at
its previously existing rates for a period of at least one (1)
year to provide ongoing maintenance and support for Custom
Work Product delivered to CV. Alta's executive management
shall be accessible to CV's executive management to ensure
that Alta's technical personnel respond promptly (no later
than 72 hours) to requests for maintenance service (including
on-site visits by technical personnel to CV's Chicago
facility, as reasonably requested by CV, subject to
reimbursement for any long distance travel).
(e) Certain Conditions. Alta does not warrant that the
deliverables will be entirely free from error or defect. The
foregoing warranties assumes CV has accurately specified all
relevant programming interfaces, has provided prompt and
accurate feedback during testing, that components, software,
data and services not provided or developed by Alta are
properly installed, configured, formatted and operated without
material defect, and no changes have been made to Alta's
source code without Alta's prior written consent. Normal
maintenance and support services beyond final acceptance shall
be addressed in a TO.
(f) Indemnification by Alta. Alta will indemnify CV and its
officers, directors, employees, agents and affiliates from and
against any and all suits, actions, claims, penalties,
liabilities or obligations ("Claims") arising from (i) a
breach of Section 9(a)(" Ownership of Alta Materials") or (ii)
use by Alta of any information retrieved or compiled by or on
behalf of Alta through use of Custom Work Product or any
Embedded
-7-
8
Product. CV will give Alta prompt notice of each such Claim
and reasonable cooperation in connection with the defense of
each such Claim. Sole control of defense and/or settlement of
each such Claim will reside with Alta. CV may appear at its
own expense and participate in all settlement discussions
through counsel of its choice.
(g) Indemnification by CV. CV will indemnify Alta and its
officers, directors, employees, agents and affiliates from and
against any and all Claims caused by: (i) additions or
alterations by CV to Alta Materials; and (ii) a breach of any
representation or warranty of CV under this Agreement. CV
will give Alta prompt notice from Alta of each such Claim and
reasonable cooperation in connection with the defense of each
such Claim. Sole control of defense and/or settlement of each
such Claim Will reside with CV.
(h) DISCLAIMER OF WARRANTIES. THE WARRANTIES SET FORTH IN SECTION
9 ARE THE ONLY WARRANTIES ALTA MAKES WITH RESPECT TO THE
SERVICES PROVIDED BY ALTA, THE PRODUCT(S) AND THE ALTA
MATERIALS. ALTA HEREBY DISCLAIMS ALL OTHER WARRANTIES,
WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES
PROVIDED BY ALTA, THE PRODUCT(S) AND THE ALTA MATERIALS OR
OTHERWISE, INCLUDING TITLE, MERCHANTABILITY, INTEGRATION,
ACCURACY, AND FITNESS FOR A PARTICULAR PURPOSE. ANY CHANGES
BY CV TO SOURCE CODE FOR AN ALTA DELIVERABLE (SUCH AS WHEN
CREATING A DERIVATIVE WORK) SHALL RELEASE ALTA'S WARRANTY FOR
MATERIALLY AFFECTED CODE.
10. Limitation of Remedies & Liabilities. The parties acknowledge the
following provisions have been negotiated and reflect a fair allocation of
risk:
(a) Remedies. Except for certain injunctive relief authorized
under Section 8 ("Injunctive Relief'), CV's sole and exclusive
remedies for Alta's default hereunder shall be (i) to obtain
the repair, replacement or correction of the defective
services or deliverable to the extent warranted under Section
9 ("Warranties") or, if such remedy is not economically or
technically feasible, (ii) to obtain an equitable partial or
full refund of amounts paid with respect to the defective
services or deliverable under the TO at issue.
(b) Liabilities. NEITHER PARTY SHALL BE LIABLE FOR ANY AMOUNT
EXCEEDING THE TOTAL CONTRACT PRICE UNDER THE TO AT ISSUE.
EXCEPT FOR A PARTY'S VIOLATION OF ITS NONINFRINGEMENT WARRANTY
OR INDEMNITY SET FORTH
-8-
9
ABOVE, NEITHER PARTY SHALL BE LIABLE, WHETHER IN CONTRACT,
TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, FOR ANY INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST SAVINGS,
PROFITS OR BUSINESS INTERRUPTION EVEN IF NOTIFIED IN ADVANCE
OF SUCH POSSIBILITY) ARISING OUT OF OR PERTAINING TO THE
SUBJECT MATTER OF THIS AGREEMENT.
11. Notices. Notices sent to either party shall be effective when
delivered in person or transmitted by telecopier ("fax") machine, one (1) day
after being sent by overnight courier, or two (2) days after being sent by
first class mail postage prepaid to the other party's principal place of
business. A facsimile of this Agreement and notices generated in good form by
a fax machine (as well as a photocopy thereof) shall be treated as "original"
documents admissible into evidence unless a document's authenticity is
genuinely placed in question.
12. Default. Either party may be declared in default of this
Agreement if it breaches any material provision hereof and fails within ten
(10) days after receipt of notice of default to correct such default or to
commence corrective action reasonably acceptable to the other party and proceed
with due diligence to completion. Either party shall be in default hereof if
it becomes insolvent, makes an assignment for the benefit of its creditors, a
receiver is appointed or a petition in Bankruptcy if filed with respect to it
and is not dismissed within thirty (30) days.
13. Disputes, Choice of Law. Except of certain emergency judicial
relief authorized under Section 8 ("Injunctive Relief') which may be brought at
any time, the parties agree that all disputes between them shall first be
subject to the procedures in Section 12 ("Default") and then shall be submitted
for informal resolution to their respective chief information officers. If the
parties are still unable to reconcile their differences, the dispute may then
be taken to court by either party. This agreement shall be governed by and
construed in accordance with the substantive laws of Illinois without regard to
principles of conflicts of laws. The federal or state courts in Chicago,
Illinois shall, be the exclusive venue for any dispute relating to this
Agreement.
14. Independent Contractor Status. Each party and its people are
independent contractors in relation to the other party with respect to all
matters arising under this Agreement. Nothing herein shall be deemed to
establish a partnership, joint venture, association or employment relationship
between the parties.
15. Compliance with Export Regulations. CV has or shall obtain in
a timely manner all necessary or appropriate licenses, permits or other
governmental authorizations or approvals; shall indemnify and hold Alta
harmless from, and bear all expense of, complying with all foreign or domestic
laws, regulations or requirements pertaining to the importation, exportation,
or use of the technology to
-9-
10
be developed or provided herein. CV shall take no action, nor omit to take any
required action, which would cause either party to violate the Foreign Corrupt
Practices Act of 1977 or the U.S. Export Administration Regulations. The
provisions of this section and assurances made herein shall survive termination
of this Agreement.
16. Miscellaneous. This document and any TO from time to time
executed in accordance with Section 1 ("General Undertaking") constitute the
entire agreement between the parties with respect to the subject matter hereof
and supersede all other communications, whether written or oral. This
Agreement may be modified or amended only by a writing signed on behalf of Alta
by Xxxxxx Xxxxxxxxx and by an authorized representative of CV. Except as
specifically permitted herein, neither this Agreement nor any rights or
obligations hereunder may be transferred or assigned by Alta without CV's prior
written consent and any attempt to the contrary shall be void, except Alta may
subcontract portions of the work under a TO. Neither party shall be liable for
delays caused by events beyond its reasonable control. Any provision hereof
found by a tribunal of competent jurisdiction to be illegal or unenforceable
shall be automatically conformed to the minimum requirements of law and other
provisions shall remain in full force and effect. Waiver of any provision
hereof in one instance shall not preclude enforcement thereof on future
occasions. Headings are for reference purposes only and have no substantive
effect.
IN WITNESS WHEREOF, for adequate consideration and intending to be legally
bound, the parties hereto have caused this Agreement to be executed by their
duly authorized representatives.
Alta Software, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------------------------------
Xxxxxx Xxxxxxxxx, President
Classified Ventures, L.L.C.:
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------------------------
Name/Title: Xxxxxxx X. Xxxxx,
Interim General Counsel
-10-
11
Date: August 18, 1998
-----------------------------------------------------
-11-
