Development Master Services Agreement

SYSTEM INTEGRATION AND DEVELOPMENT

MASTER SERVICES AGREEMENT





This SYSTEM INTEGRATION AND DEVELOPMENT MASTER SERVICES AGREEMENT (this "Master Agr eement") is effective as of November 11, 1996, is made by and between NETVALUE, INC., a Delaware corporation (hereafter "Customer"), with its principal office located at One Stamford Landing, Stamford, Connecticut 06902, and DMR TRECOM, INC., a Delaware c orporation (hereafter "TRECOM"), with its principal office located at 333 Thornall Street, Edison, New Jersey 08837-2246.



WITNESSETH:



WHEREAS, Customer and TRECOM have entered into a System Integration and Develo pment Agreement dated November 22, 1996 (the "SIDA"); and a first amendment dated February 14, 1997 (the "First Amendment") to the SIDA (collectively, the "Existing Agreement"); and



WHEREAS, TRECOM has provided the services called for under the Existing Agreement; and



WHEREAS, Customer and TRECOM wish to prolong their relationship; and



WHEREAS, capitalized terms used in this Master Agreement are used as defined in ss. 14 of this Master Agreement.



NOW, THEREFORE, TRECOM and Customer, intending to be legally bound, hereby agree as follows:





Section 1.





a. Mutual Commitment and Cooperation. Subject to the terms and conditions of this Master Agreement, TRECOM shall provide services (the "Development Services") to develop consulting, computer programming, and other services as necessary to impleme nt the Work. Customer shall cooperate with TRECOM in every reasonable way and in keeping with the Work Documents and the Project Schedule to enable TRECOM to provide the Development Services.











Customer shall also cooperate to accept the System based on the Acceptance Criteria.



1.1.1 The parties anticipate that the Development

Services will include incidental deliverables or

goods, to be provided to Customer from time to

time, as authorized and specified in one or more

Statements of Work.



1.1.2 Customer and TRECOM will enter into a written

Statement of Work for each Project, and a copy of

each Statement of Work will be attached to this

Master Agreement as an exhibit, but failure to

attach any Statement of Work will not vitiate,

affect, diminish or impair any obligation of

Customer or TRECOM under any such Statement of



1.1.3 This Master Agreement does not authorize or commit

either Customer or TRECOM to any quantity or dollar

amount of Development Services. TRECOM may not

perform any Development Services without a

Statement of Work authorizing the Development

Services, signed by both Customer and TRECOM.



1.1.4 Customer shall be deemed to have received and

accepted Work Result provided under a Statement of

Work fifteen (15) days after delivery in the case

of Work Result other than a System unless

explicitly rejected by Customer as not

substantially conforming to a Statement of Work; in

cases where Work Result involves delivery of a

System, acceptance will be governed by the terms

and conditions of Section 3 of this Master



1.1.5 From time to time or from one Project to the next,

Customer and TRECOM may vary the terms of this

Master Agreement by means of any Statement of Work,

and in the event of any contradiction between the

terms and conditions of any Statement of Work and

this Master Agreement, the terms and conditions of

such Statement of Work shall prevail.



b. Pr oject Directors. Each of TRECOM and Customer shall name a project director for each Project. All responsibilities of the parties under this Master Agreement shall be supervised and coordinated by TRECOM's project director and by Customer's project directo r , or by such other person or persons as the foregoing representatives may designate from time to time. No change contemplated by ss. 7 hereof with respect to any Project shall be effective unless evidenced by a writing signed by project directors of both p arties. Customer's project director shall not exercise direct control or supervision over TRECOM's personnel but shall be available for consultation; each party hereto shall be responsible for selection, supervision, direction and control of its own perso nnel, including selection of such party's project director.















Section 2.



THE SYSTEM



a. Operational Environment. Any Statement of Work will provide that one of the parties will provide the computing environment for the Development Services for phases of any Project. TRECOM is not responsible for production or support of any Work Result after acceptance, other than pursuant to ss. 11 of this Master Agreement.



b. System Implementation. Development Services in respect of any Project will be carried out substantially according to the applicable Statement of Work and Project S chedule, subject to any Excusable Delay. Customer shall be responsible for installation of software on Customer's computer environment, from time to time. TRECOM shall make training and technical assistance available to Customer in connection with such in s tallation, at Customer's expense at TRECOM's regular rates. Customer and TRECOM acknowledge and agree that any change may affect the Project Schedule and may increase or decrease the price of the Development Services and agree that an evaluation and revis ion of the Project Schedule and the Project Fee will be made and approved each time a change request is made.





Section 3.



SOFTWARE DEVELOPMENT



a. Development Undertaking. TRECOM shall



3.1.1 commit and utilize sufficient resources to complete

any Project in a skilled, workmanlike manner and in

accordance with the Statement of Work therefor;



3.1.2 employ competent and skilled personnel having a

level of skill and experience in the area

commensurate with the requirements of the Work to

be performed;



3.1.3 use commercially reasonable, diligent efforts to

start, perform and complete all Development

Services in a timely manner and substantially in

accordance with each aspect of the Work Documents

and the Project Schedule;



3.1.4 notify Customer of any circumstances, when and as

they arise, that may reasonably be anticipated to

lead to a material deviation from the Project

Schedule for any Project; and



3.1.5 incorporate into the final version of any System

such modifications as normal and customary software

tests indicate are necessary.













b. Customer Access. Customer may inspect TRECOM's performance, and TRECOM will facilitate inspection, upon reasonable notice and at reasonable times. TRECOM's inspection (or lack of inspection) will not be an acceptance of any Work Result or a waiver of any right or warranty or preclude Customer from rejecting defective Work Result. Without limiting the generality of the forego i ng, Customer shall, upon reasonable advance notice to TRECOM, have access during normal business hours to the premises where Development Services are performed for the purposes of design review, "Walk Throughs," and discussions between Customer's and TREC OM's management and personnel concerning the status and conduct of the Work being performed and to monitor the progress of Work.



c. Subcontractors. TRECOM may retain third parties to furnish services in connection with any Project, provided that s uch third parties have executed appropriate Confidentiality and/or Non-Disclosure Agreements with Customer and with TRECOM. No such retention shall relieve TRECOM from any of its obligations under this Master Agreement, including its obligation to perform Development Services substantially in accordance with the Project Schedule. Nothing in this Master Agreement shall be deemed to prevent or limit TRECOM's use of commercially available software tools. TRECOM's use, if any, of any subcontractor for any prog ramming services shall not be the reason of any Excusable Delay, but an Excusable Delay that affects such subcontractor shall be deemed an Excusable Delay of TRECOM.



d. Delivery/Acceptance. Immediately upon the completion of the Development Servic es to be performed at TRECOM's facilities in respect of any Project, TRECOM shall deliver to Customer and Customer shall install any System or software, and TRECOM shall simultaneously deliver therewith all documentation and other materials required to be provided at such time. TRECOM shall notify Customer in writing of the availability of the software or System for testing by Customer. The date of such notice referred to in this Master Agreement as the "Acceptance Test Date" for any Project. On or before t he second business day after any Acceptance Test Date for any Project, Customer shall begin a ten (10) business day (unless the parties mutually agree in writing upon a length of days that is different) Customer Acceptance Test phase during which time Cus tomer will have the opportunity to exercise the software or System to determine whether the software or System meets the functional requirements and satisfies the Acceptance Criteria.



e. Certain Conditions. On or prior to the Start Date,



3.5.1 Each of TRECOM and Customer shall have executed and

delivered a Statement of Work with respect to the

Project in question; and



3.5.2 Customer shall have delivered to TRECOM the initial

payment of the Project Fee for such Project, in

accordance with the terms and conditions of the

applicable Statement of Work, which shall be in

full force and effect on the Start Date; and



3.5.3 Customer shall have satisfied any other conditions

that may be required in













advance of the Start Date in respect of any Project.





Section 4.



SYSTEM COMPLETION AND ACCEPTANCE



a. Acceptance Criteria. Customer is responsible for the devel opment of the Acceptance Criteria Project by Project. TRECOM will consult with, support and review Customer's Acceptance Criteria to ensure Customer's ability to adequately assess and accept Work Result. The Acceptance Criteria must be submitted to TRECOM ' s project director for review at least thirty (30) days (unless the parties mutually agree in writing otherwise) prior to the anticipated delivery date of any software or System. The test or tests for such assessment and acceptance in respect of any Proje ct are referred to in this Master Agreement as the "Acceptance Test."



In the event that Customer shall have developed Acceptance Criteria or any Acceptance Test in respect of any Project that does not conform to that Project's Work Docume nts, Customer's project director and TRECOM's project director shall negotiate in good faith to complete the Acceptance Criteria or the Acceptance Test to so conform. If they shall prove unable to agree, then they shall select a mediator familiar with the industry to assist them in preparing Acceptance Criteria and Acceptance Tests that conform to the Work Documents for such Project. Customer and TRECOM shall bear the costs of such mediation equally.



During any Acceptance Test period, Cus tomer shall notify TRECOM in writing, or by other mutually agreeable means, of items not conforming to the Acceptance Test plan. Upon completion of the 10-day period, testing shall cease and TRECOM will make outstanding corrections to such Work Result suc h that it conforms with the Acceptance Criteria for the Project. Once the corrections are complete and the software or System passes the Acceptance Test, the creation, installation and implementation of the Work Result shall be considered complete and acce pted by Customer.



The following describes the period, process and procedures of the quality assurance testing phase of the Development Services for any Project:



4.1.1 Acceptance Testing - During the Acceptance Testing,

Customer will test the application and submit items

for corrections to TRECOM as they are discovered.

TRECOM will periodically produce updated releases

of the application that address such identified

items. This process shall iterate for a period of

ten (10) business days.



4.1.2 Final Corrections - After the Acceptance Testing

period has been completed, Customer shall compile a

final list of outstanding items. At that time,

TRECOM will estimate the time required to implement

a final testing release,













which will be the date this release will be

available for final testing. For scheduling

purposes, the date of availability of the final

testing release will be no less than two (2)

business days from the time TRECOM provides

Customer with such date.



4.1.3 Final Testing Release - TRECOM will then use all

commercially reasonable efforts to make the

necessary corrections to produce the Final Testing

release as soon as reasonably practicable. Unless

agreed by TRECOM project management, no additional

Acceptance Testing may be conducted by Customer

during TRECOM's development of the Final Testing



4.1.4 Final Testing - Having received two (2) business

days advanced notice of availability of the final

testing release, Customer will immediately begin

testing the final testing release to ensure all

items from the final corrections list were properly

addressed. If final corrections are still

outstanding, steps 2 through 4 will be repeated

except for the two (2) business day notice.



b. Completion and Acceptance. At such time as the Acceptance Test demonstrates that the software or System functions substantially in accordance with each aspect of the Project's Work Documents, Customer shall be considered to have accepted the fully implemented and complete Work Result. Customer shall promptly sign and deliver to TRECO M an Acceptance Certificate evidencing acceptance. If after repeated attempts, TRECOM is unable to remedy each item on the final corrections list, then Customer's exclusive remedy and TRECOM's entire liability in contract, tort, or otherwise shall be as se t out in ss.ss. 11 and 12 of this Master Agreement.





Section 5.



WORK DOCUMENTS AND PROJECT SCHEDULE



a. Work Documents and Project Schedule. The Work Documents and Project Schedule for a par ticular Project will set forth the projected work effort and schedule for creation, installation, and implementation of the Work Results. All statements and warranties concerning time are merely good faith estimates based upon factors existing at the time they were made, and are subject to equitable adjustment, such as, by way of example only, if Customer or others fail adequately to perform the tasks required of them to be performed or if Customer changes the scope, timing or level of work to be performed by TRECOM. Customer agrees to provide working space and facilities, and any other services, materials and tools that TRECOM or its personnel may reasonably request in order to perform the work assigned to them.



b. Excusable Delays. Either party s hall be excused from delays in performing, or from its failure to perform, hereunder to the extent that such delays or failures result from causes beyond the reasonable control of such party, including delays in the Project Schedule caused by













unavailability, or delays in preparation or shipment, of third-party hardware or software; provided that, in order to be excused from delay or failure to perform, the party responsible for the matter causing the delay shall act diligently to remedy the ca u se of such delay or failure and shall promptly notify the other party of such delay, the causes thereof and the anticipated length of any such delay. Customer acknowledges that delays by Customer in completing tasks required of Customer or performing Cust omer's obligations under this Master Agreement may impede or delay completion of the Development Services.



c. Adjustments. TRECOM and Customer shall meet at periodic intervals to adjust the Work Documents and Project Schedule in respect of any Pro ject to take account of permitted or Excusable Delays in the Work Documents and Project Schedule that relate to such Project.





Section 6.





a. Prices, Charges, and Reimbursable Items. Subject to compliance by TRE COM with the terms and conditions of this Master Agreement and the Work Documents in respect of any Project, Customer shall pay to TRECOM the Project Fee in accordance with the Payment Schedule. Customer acknowledges that each portion of the Project Fee i s due on the due date set forth in the Work Documents in respect of any particular Project.



Customer and TRECOM have agreed that Customer may pay any amount due to TRECOM by delivery to TRECOM of a Letter of Credit at least 10 days prior to the date on which a payment is due.



Any Letter of Credit shall name TRECOM as beneficiary and shall be a form reasonably satisfactory to TRECOM and shall be issued by a bank reasonably satisfactory to TRECOM. Any Letter of Credit shal l be an absolute and unconditional obligation for an amount not less than the amount due and payable. Any Letter of Credit shall permit TRECOM to draw such amount immediately by presentation of a certificate of a responsible officer of TRECOM to the effec t that the amount drawn is then due and payable. TRECOM shall deliver to Customer notice of any draw under any Letter of Credit, but failure to deliver any such notice shall not limit or diminish in any way TRECOM's right to any such draw.



TRECOM shall have no obligation to perform or continue any Development Services when any amount required to be paid on the Payment Schedule remains due and unpaid; Customer acknowledges that TRECOM has advised Customer that TRECOM intends to accomplish n one of the Development Services that would otherwise be accomplished in any month if Customer has not paid all amounts then due on the first day of such month or if Customer has failed to deliver a Letter of Credit in a manner that permits a draw by TRECO M, as beneficiary, of such amounts on or prior to the first day of any month. Any such discontinuity in the delivery services shall extend the due













dates of deliverables, as shown on the Project Schedule, by the period during which work was stopped due to lack of payment.



Reimbursable items are stated in the Payment Schedule; Customer shall be responsible for out-of-pocket travel and entertainment expense incurred in connection with travel in connection with the Development Services previously approved by Customer.



b. Invoices; Payments. TRECOM shall have no obligation to invoice Customer for any regularly scheduled Project Fee payment. Customer shall pay each regularly scheduled Project Fee pay ment promptly when due. TRECOM shall invoice Customer for other prices, charges and reimbursable items payable to TRECOM as they come due upon satisfaction of the conditions to payment. Customer shall pay the invoiced amount in full within thirty (30) day s of receipt of invoice. Customer shall pay interest at the rate of 1.5% per month on the amount shown on any invoice that is paid later than 30 days after such date of receipt and on any regularly scheduled Project Fee payment that is paid later than 30 d ays after the due date thereof.



c. Taxes. Unless tax exempt, Customer agrees to pay amounts equal to any taxes resulting from this Master Agreement or any Work Documents, or any components or services provided by TRECOM to Customer pursuant to thi s Master Agreement or any Work Documents, exclusive of taxes based on TRECOM's net income.



d. No Other Payment. Except as expressly provided in this Master Agreement or any Appendix or attachment to this Master Agreement, TRECOM and Customer shall each bear all of its own expenses arising from the performance of its obligations under t his Master Agreement or any Work Documents, including personnel, facilities, utilities, equipment, supplies, clerical, and the like. Customer shall be responsible for all charges and expenses incurred in connection with any Letter of Credit.





Section 7.





a. Review of Proposed Changes. It is mutually acknowledged that changes in the functional scope of any software deliverable, Work Documents, Project Schedule or Acceptance Criteria may affect the Project Fee, pric ing and payment structure or schedule for the Development Services. Such changes may be deemed desirable in light of actual experience gained in the course of creation, installation and integration of any System, or as Customer redefines its needs. Accord i ngly, either party shall be entitled to propose changes to such terms by written notice at any time delivered to the other party. The parties agree to consider such a proposed change in good faith and to make a good faith effort to accept equitable adjust ments where appropriate to accomplish the mutual objectives of the parties. All response to proposed changes shall be made promptly but not later than five (5) business days of receipt of such proposed change. If such a proposed change is













accepted, it shall be reduced to a written amendment to Work Documents signed by both parties. Any such amendment shall be deemed "Work Documents" and shall be attached to this Master Agreement in the same manner as any other Work Documents. Customer acknowledges t h at changes may delay completion of the Development Services and the amount payable therefor. Any such amendment may change the Development Services by additional or revised drawings, specifications, exhibits or written change of the Work Documents. TRECOM and Customer shall continue performance under the original Work Documents pending mutual agreement regarding any requested change.



b. Termination by Customer if Necessary Change Declined. If Customer proposes a change upon which the parties canno t reach agreement, and Customer in good faith believes its change is feasible and necessary for the System to meet its operational objectives, Customer may (in its discretion) terminate any particular Project, provided that it compensates TRECOM in an equ i table manner for all services rendered and items ordered, procured or delivered, through the date of such termination. In no event, however, shall Customer be required to pay TRECOM more than the amounts that have become due and payable through the date o f termination pursuant to ss. 6 hereof plus the amounts that would otherwise have become due and payable through the first day of the next month, as well as any third-party termination, cancellation and pass-through charges incurred by TRECOM in connection with such Project. TRECOM shall deliver to Customer any third-party contract that provides for any such third-party termination, cancellation and pass-through charges at such time as TRECOM shall have determined that the Development Services involve such t hird-party contract. In the event of any such termination of a Project, TRECOM shall cooperate with Customer and shall deliver or assign to Customer the results of the Development Services for such Project, including all paper and electronic documentation for both the source code and the design elements of the Development Services, through the date of such termination. Customer shall compensate TRECOM on a time-and-materials basis, at TRECOM's regular rates, in respect of such cooperation and delivery. Exc ept to the extent of any assignment to Customer of any third-party product, at the time of any such termination, TRECOM shall terminate any third-party agreement that may then be in effect with respect to the Development Services for such Project.



c. No Termination if TRECOM's Change Declined. If TRECOM proposes a change in respect of any Project upon which the par ...