Software Development Agreement

SOFTWARE DEVELOPMENT AGREEMENT


This Software Development Agreement (this "AGREEMENT") is entered into as of February 24, 1997 between Software Technology International ("STI") and Client Server Programs Ltd. ("CSP").


RECITALS


A. Each party engages in research, development and consulting activities in the field of software engineering.


B. STI has ongoing research, development and software engineering projects for which it would like CSP to provide software consulting services (the "PROJECTS"; each a "PROJECT"), which are or shall be described in Exhibit A, as attached hereto and as amended by the parties from time to time.


AGREEMENT


The parties agree as follows:


1. DEFINITIONS. As used herein:


(a) The term "SOFTWARE" shall mean the results and products (interim and/or final) of the consulting services performed by CSP, its employees or representatives, for STI, whether pursuant to this Agreement or otherwise, whether tangible or intangible, including, without limitation, each and every invention, discovery, formula, trade secret, software program (including without limitation, object source code, flow charts, algorithms and related documentation), listing, routine, manual, specification, technique, product, concept, know-how, or similar property, whether or not patentable or copyrightable and whether or not embodied in any products, that are made, developed, perfected, designed, conceived or first reduced to practice by CSP, either solely or jointly with others, in the course and scope of the consulting services performed under this Agreement or otherwise, including all of the above that has come into being prior to the date of this Agreement.


(b) The term "CONFIDENTIAL INFORMATION" shall mean all information developed by or disclosed or made available to CSP, its employees or representatives, whether in connection with this Agreement or prior to the date of this Agreement, which STI protects against unrestricted disclosure to others and information which is developed by or for CSP specifically for STI under this Agreement, including all Proprietary Information.


(c) The term "PROPRIETARY INFORMATION" shall refer to any and all information or material of a confidential, proprietary or secret nature which is or may be applicable to, or related in any way to: (i) the past, present or future business of STI or of any corporation in control of STI (a "PARENT") or any majority-owned subsidiary (a "SUBSIDIARY") of STI; (ii) the research and development or investigations of STI or any Parent or any Subsidiary; or (iii) the business of any client, supplier or customer of STI or of any Parent or Subsidiary. Proprietary Information shall include, without limitation, trade secrets, processes, formulas, data, know-how, improvements,


inventions and techniques relating to the Projects and information pertaining to customer lists, marketing plans and strategies, personnel directories and files and information concerning customers or vendors of STI or any Parent or Subsidiary.


2. ENGAGEMENT AND PERFORMANCE OF SERVICES.


(a) ENGAGEMENT. STI hereby engages CSP to perform software engineering consulting services (the "SERVICES") in accordance with the terms and conditions of this Agreement. This Agreement will govern all services performed by CSP for STI, whether or not such services are Services as defined in this Agreement.


(b) IDENTIFICATION OF PROJECTS AND SERVICES. EXHIBIT A contains a description of the Projects for which CSP initially may perform Services under this Agreement. In addition, STI may request specific consulting services from CSP for individual tasks relative to these projects or for tasks which are not related to any specific project. STI may also request that CSP participate or undertake other Projects. Project work or specific consulting services will be done by providing CSP with a detailed project specification and Project/Work Approval Form that has been signed by an authorized company representative. The Project/ Work Approval Forms and the list of those who are authorized to approve projects are set forth as Exhibit B (the "PROJECT/WORK APPROVAL FORM"). CSP may accept or decline each additional Project or assignment at its discretion. Compensation for additional Projects shall be on the terms set forth in Section 3, unless the parties agree otherwise.


(c) PERFORMANCE STANDARDS. CSP shall perform the Services in accordance with the specifications and project timetables and under the direction of the STI Project Manager. The STI Project Manger will be responsible for assigning tasks for each Project and will be the ultimate evaluator of performance by a contract resource. Performance will be governed by the terms and conditions set forth in Exhibit C.


(d) DELIVERY. CSP or its designates will deliver all interim and final software products, including source code and other related materials developed under this Agreement (the "SOFTWARE"), by ensuring that all current and active project sources and materials are available from the Source Code Repository Site (Star Team) on no less than a weekly basis. When the Source Code Repository Site (Star Team) is not available, or otherwise at STI's request, source code shall be delivered to STI or its designees in a standard medium (disk, Zip Disk, CD, etc.).


(e) ACCESS SECURITY. CSP will, and will ensure that each of its employees, contractors and agent will, comply with STI's security procedures for control and management of source code or proprietary information and access to STI's installation sites and computer equipment, as set forth in Exhibit D, but shall not be responsible for any delays resulting from delays in obtaining access.


(f) SUBCONTRACTING. With STI's consent, CSP may subcontract all or part of the Services to be performed by CSP for STI, provided that all such subcontractors must agree to and abide by terms and conditions substantially similar to those contained in this Agreement. Further, CSP shall require all such subcontractors to agree in writing that all of the work they perform for CSP shall be owned by STI in accordance with the provisions of Section 6.


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(g) ACKNOWLEDGMENT OF PROPERTY RIGHTS. CSP shall require each of its employees, contractors and agents who perform any part of the Services to agree in writing that all of the Services he, she or it performs for CSP shall be owned by STI in accordance with the provisions of Section 6.


3. PAYMENT.


(a) COMPENSATION FOR SERVICES; PAYMENT.


(i) CSP will be paid for the Services on an hourly-rate basis, as specified in Exhibit E and any Project/Work Approval Form. Hourly and other charges regarding a specific Project may be changed by agreement of the parties upon 30 days notice. In no event will STI be obligated to pay CSP for any Services not specifically identified in Exhibit A or a Project/Work Approval Form.


(ii) CSP will submit invoices for Services performed on a monthly basis, within 10 days of the end of each month. STI must notify CSP within 5 (five) working days after the date it receives the invoice of any disagreement with regard to the amount invoiced. If no notification of such disagreement is received from STI during such period, the invoice will be deemed accepted and shall be paid. STI will pay the amounts invoiced within 15 days of its receipt of the invoice. If an invoice is not paid on time, STI will pay to CSP a late payment fee of 0.1% of the invoiced amount per day. CSP will separately state the amount of any late payment fee on its next invoice.


(b) REIMBURSEMENT OF EXPENSES. STI will not be obligated to pay to CSP the amounts of any expenses incurred in connection with the Services or otherwise unless such expenses are approved by STI in advance. CSP shall report such agreed-upon expenses separately on a CSP invoice to STI.


(c) PURCHASES OF HARDWARE AND SOFTWARE. STI may request that CSP purchase specific hardware or software necessary to perform the Services under this Agreement. The cost of such purchase will be agreed upon in advance by STI and reported separately on an CSP invoice to STI. STI will reimburse CSP the agreed-upon cost of any such purchase.


4. TERM AND TERMINATION. This Agreement will continue in effect until terminated by either party in writing; provided that such termination will be effective on the last day of the sixth full calendar month following the date on which the terminating party gives the other party written notice of its intent to terminate this Agreement. If termination is initiated by CSP, CSP will continue to perform the Services under this Agreement until the date of the effectiveness of the termination, but monthly payments to CSP will not be less than 50% of average amount paid for each of the three months prior to CSP's notification of cancellation.


5. WARRANTIES. CSP warrants to STI as follows:


(a) CSP will provide highly skilled programming staff which is experienced in programming for the Microsoft Windows operating systems and major Database Management systems using different programming languages, and possesses the additional expertise needed to perform the Services. CSP acknowledges that STI is relying upon the skill and expertise of CSP for the performance of the Services.


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(b) The Software will be of original development by CSP and will not infringe upon or violate any patent, copyright, trade secret or other property right of any third party. Third-party software will not be incorporated in the Software without STI's prior written consent. If STI so consents, it shall be STI's responsibility to secure any necessary licenses for such third-party software.


(c) CSP will use its best efforts to make such additions, modifications or adjustments to the Software as may be necessary to correct in the shortest possible time any problems or defects in the Software or related documentation discovered by CSP or reported to CSP by STI. This warranty shall be null and void in the event that STI modifies any part of the Software without the prior approval of CSP. CSP disclaims any warranties of merchantability and fitness for a particular purpose.


6. PROPERTY RIGHTS. All right, title and interest in and to the Software, and all products derived from the Software, shall at all times be and remain the sole and exclusive property of STI. The Software and all products developed by or for CSP for STI or derived therefrom, in the past or under this Agreement, shall be deemed to be works made for hire. Any patents, trademarks, copyrights or other intellectual property rights that may arise in connection with any products developed by or for CSP for STI or derived therefrom, in the past or under this Agreement, and all of the Software, shall be in the name of, and, if necessary, will be assigned by or for CSP and its employees and contractors to, STI. STI shall own all Proprietary Information related to all of the Projects, and all Proprietary Information created by or for CSP for or on behalf of STI prior to the effective date hereof.


(a) CSP agrees to disclose promptly to STI any and all Software and Proprietary Information, whether or not patentable and whether or not reduced to practice, conceived or learned by CSP, its employees, contractors and other agents, either alone or jointly with others, which relate in any manner to the past, present or anticipated business, work, research or investigations of CSP on behalf of STI or any Parent or Subsidiary.


(b) CSP further agrees to assist STI in every way (at STI's expense) to obtain and, from time to time, enforce patents on and other intellectual property rights in the Software in any and all countries. To that end, by way of illustration, but not limitation, CSP shall cause its employees, contractors and other agents to testify in any suit or other proceeding involving any of the Software, execute all documents which STI reasonably determines to be necessary or convenient for use in applying for and obtaining patents thereon and enforcing the same, and execute all necessary assignments thereof to STI or persons designated by it. CSP's obligation to assist STI in obtaining and enforcing patents for the Software in any and all countries shall continue beyond the termination of this Agreement.


(c) The parties acknowledge that all Software developed by or for CSP in connection with each Project has been or is being created at the instance of STI, and further agree that such Software shall be deemed a work made for hire under the United States copyright laws and that STI shall have the unlimited right to supervise and control CSP and to direct CSP as to all aspects of the creation of such software. STI may alter ...