Software Development & Consulting Services Agreement

EXHIBIT 10.6


SOFTWARE DEVELOPMENT & CONSULTING SERVICES AGREEMENT


THIS AGREEMENT is effective on the 23 day of March 1999, by and between the National Law Library, Inc. (hereinafter Purchaser), having an office at One Park Ten Place, Suite 220, Houston, Texas, 77084 and, and IT/IS, Inc. (hereinafter Vendor), having an office at One Park Ten Place, Suite 200, Houston, Texas 77084.


WHEREAS Purchaser wishes to develop and utilize the Litidex(R) search engine and indexing software for the provision of Internet legal data, and;


WHEREAS Purchaser wishes Vendor to develop these custom software Packages and manage the development of its software, and;


WHEREAS Vendor desires to develop and manage this custom software package for Purchaser:


NOW THEREFORE, the parties hereto hereby agree as follows:


1. CONSULTING SERVICES DEFINED. The term "Consulting Services" when used in this Agreement means the performance of professional services that include but are not limited to system analysis, program development, personnel training, testing, documentation writing and general business consulting.


2. SCOPE & SERVICES. Vendor shall provide and deliver to Purchaser custom software and consulting services in regards thereto as outlined in Paragraph 3. This software development shall result in software products which may be used for search engine and indexing technology and software applications including but not limited to applications on the Internet as well as other areas of Purchaser's operation as mutually agreed between the parties.


3. VENDOR RESPONSIBILITIES.


(A) Vendor shall develop custom software which will modify, customize, amend, enhance or otherwise change the pre-existing Vendor software packages to fulfill the requirements of Purchaser:


Litidex(r) search engine software
Litidex(r) indexing software


(B) The requirements to be fulfilled by the custom programming to the above listed packages are presently undefined. The defining of Purchaser requirements shall occur in Phases as requested by the Purchaser in writing.


(C) Each Phase and Sub-phase shall be designed, approved, programmed, delivered, tested, and accepted pursuant to the procedures listed below.


I. As for each Sub-Phase or Phase: "Phase" shall mean Phase or Sub-phase.


(a) Vendor shall consult with Purchaser personnel for the purpose of designing programming specifications. Specifications shall contain those items listed on Attachment A.


(b) Once Vendor has designed said programming specifications, they will be delivered to Purchaser together with their operation performance estimates (OPE) for every program mentioned in the specifications. The OPE will indicate any limitations on the program, e.g. size, and the estimated response times for on- line programs or runtimes for the programs.


(c) Upon receipt of said programming specifications, Purchaser will either approve or disapprove of said specifications. Such approval will be at the sole discretion of Purchaser.


(i) Upon approval of the programming specifications, Vendor will design, in conjunction with Purchaser, an Acceptance test for these specifications. The Acceptance test will follow those standards listed in Attachment B. The specifications, OPE's and the Acceptance test will be incorporated into a Phase- Agreement to be signed by both parties.


(ii) If Purchaser does not approve said specifications, Vendor and Purchaser will again consult and restart the procedure at Section I.(a) above.


(d) After the creation of the Acceptance Test, the parties shall create the
Phase Agreement.


(i) The Phase Agreement shall contain the following:


The fixed price for the Phase. The functional names of the applications to be created.


The date of delivery, and that time is of the essence.


(ii) The Phase Agreement will also have the following items attached thereto:


The Functional Specifications which is a narrative explanation of the operation of the programs, containing Exhibits of all screen and reports.


The Programming Specifications to be used by the programmers creating the software for Purchaser.


File layouts for all files used or created in that Phase, including record and/or data field descriptions.


The operation performance estimates. The Acceptance Tests, including test data.


(iii) The Phase Agreement will make explicit and express reference to this agreement, and the date this agreement was executed.


(iv) Upon the signing of the Phase Agreement by both Purchaser and Vendor, Purchaser shall pay to Vendor 30 percent of the fixed cost indicated in the Phase Agreement.


(v) Vendor will then proceed to write the programming for that phase.


(e) (i) On the delivery date specified in the Phase Agreement, Vendor shall deliver to Purchaser the completed programming for that phase. For delivery on or before the delivery date specified in the Phase Agreement, Purchaser shall pay to Vendor the next 40 percent of the price for that Phase. For delivery after the date specified in the Phase Agreement, but prior to the expiration of a grace period of 30 days,


Purchaser shall pay to Vendor 30 percent of the price for that Phase.


(ii) Failure by Vendor to deliver the completed programming by the end of the 30 days after the delivery date specified in the Phase Agreement, Purchaser shall pay to Vendor 30 percent of the price for that Phase. Failure by Vendor to deliver the completed programming by the end of the 30 days after the delivery date specified in the Phase Agreement will entitle Purchaser to a 10 percent reduction in the cost of the entire Phase for each 30 day period in which Vendor is late. The delivery date may only be modified by written amendment to the Phase Agreement signed by both parties.


(iii) In the event that Vendor fails to deliver the completed programs five (5) months after the original delivery date, and the delivery date was not modified, Purchaser may cancel that Phase Agreement. In the event of such cancellation, Vendor shall deliver to Purchaser all work in progress, program specifications, etc., then in Vendor's possession. Cancellation pursuant to such failure to deliver shall not require any further payments to Vendor as normally required pursuant to Article 15.


(f) Upon delivery, Purchaser shall conduct the acceptance test that was created by Vendor and Purchaser in section I(c)(i) above.


(i) Upon passing the acceptance test, Purchaser shall pay to Vendor an additional 30 percent of the price of the phase, Vendor was paid 40 percent for the delivery of the programs, of the 30%, 10% will be withheld for 90 days. Purchaser shall pay to Vendor 20 percent for the passing of the Acceptance Test. Purchaser shall retain the final 10 percent until the successful completion of 90 days of actual live use of said phase.


(ii) If the programs fail to perform the acceptance tests, the parties shall follow the following procedure:


(1) Purchaser shall immediately notify Vendor by telephone of the failure of the test. Purchaser shall then confirm such notice by sending written confirmation of the failure plus proper documentation of said failure to Vendor by certified mail, return receipt requested.


(2) Vendor may immediately begin reprogramming to remedy the failure.


(3) If the failure can be remedied within five (5) days, then the Acceptance testing shall continue.


(4) In the event that the failure cannot be remedied after the fifth day, Vendor shall notify Purchaser within an additional five (business days of the new delivery date for that Phase. In no event shall the new delivery date be more than thirty (30) days after the original delivery date. The rescheduling of the delivery date shall not invoke the penalty provisions for late delivery set forth above.


(g) After Purchaser has used the phase programs for a period of 90 consecutive days of uptime as defined in paragraph 10, without failure, Purchaser shall pay to Vendor the final 10 percent payment.


II. Nothing in this procedure shall be construed to prevent several Phases and Sub-phases to be commenced simultaneously.


4. SOFTWARE DOCUMENTATION DELIVERABLES. Vendor shall deliver to Purchaser software documentation products as required in each Phase Agreement.


5. PURCHASER'S RESPONSIBILITIES. Purchaser shall furnish information requested by Vendor that is


necessary for Vendor to fulfill their responsibilities under this Agreement. Purchaser shall provide adequate work space and telephone for Vendor personnel when such persons are performing on-site services for Purchaser. Purchaser shall provide data entry services and computer test time if required for Vendor to fulfill their responsibilities under this agreement. Unnecessary or unreasonable delays attributable directly to Purchaser which result in additional costs to Vendor are subject to negotiation for additional compensation to Vendor and may extend the delivery date.


6. TERM OF THE AGREEMENT. This Agreement is effective as of the date it is signed by both parties. The terms and conditions of the Agreement will remain in effect until Vendor has delivered and Purchaser has accepted all software to be developed hereunder. In no event shall this Agreement be in effect for more than five (5) years unless both parties execute an amendment which extends the term of this Agreement. The expiration of this Agreement shall not affect the obligations of either party to the other with respect to those obligations established under this Agreement. Either party may terminate this Agreement for good cause upon thirty (30) days prior written notice.


7. SURVIVAL BEYOND COMPLETION. The provisions of this Agreement and Software developed under this Agreement as well as confidentiality, indemnification, use, assignment, reproduction, warranty, ownership, return or destruction shall survive the delivery of the software and the payment of associated charges.


8. WARRANTIES.


(A) Vendor warrants that the software systems developed hereunder will be capable of being integrated with e ...