SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 1, 1995
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LCS INDUSTRIES, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-12329 13-2648333
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(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
120 Brighton Road, Clifton, New Jersey 07012-1694
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (201) 778-5588
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On September 1, 1995, the registrant, LCS Industries, Inc. ("LCSI"),
entered into an agreement to provide computer services through the building of a
marketing database for a major non-U.S. communications company. Total expected
revenues from the agreement, subject to early termination, will approximate $40
million to be realized by LCSI through June 1998.
Reference is made to the form of Agreement dated September 1, 1995
filed as Exhibit 1 hereto for a more complete description of the terms.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibit
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1 Redacted Contract between LCS Industries, Inc. and a major
non-U.S. communications company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LCS INDUSTRIES, INC.
Dated: September 8, 1995 By: /s/ PAT R. FRUSTACI
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Pat R. Frustaci
Vice President - Finance
INDEX TO EXHIBITS
Exhibit
No. Description
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1 Redacted Contract between LCS Industries, Inc.
and a major non-U.S. communications company
<PAGE>
DATED September l, 1995
XX
- and -
LCS INDUSTRIES, INC.
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AGREEMENT
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[Confidential portions of this Exhibit have been omitted and filed with the
Commission. Omitted portions are indicated by the notation " XX ".]
<PAGE>
CONTENTS
DEFINITIONS
1. Definitions
SCOPE OF THE WORK
2. Description of the Work
3. Project Plan
4. Pricing and Payment Information
MANAGEMENT OF THE WORK
5. Contract Performance
6. Change Control Procedure
7. Marketing Database System
8. Personnel
9. Access to the Premises
10. Observance of XX Site and other Regulations
11. Security
12. Inspection and Testing During Development
MANAGEMENT OF THE CONTRACT
13. Confidentiality
14. Notices
15. Force Majeure
16. Assignment and Subcontracting
17. Breach
18. LCS Non-Default
19. Duration and Termination
20. Other Consequences of Termination
21. Competition
INTELLECTUAL PROPERTY RIGHTS
22. XX Intellectual Property
23. LCS Intellectual Property
GENERAL
24. Virus Protection
25. Indemnity - General
26. Electronic Repossession
27. XX Property
28. Waiver
29. Enforceability
30. Headings and Interpretation
31. Entire Agreement
32. Law and Jurisdiction
33. Order of Precedence
34. Limitation of Liability
35. Counterparts
36. No Third Party Beneficiaries and Relevant Contractors
<PAGE>
This Contract is made September 1, 1995.
BETWEEN
(1) XX whose registered office is at XX, XX XX (hereinafter called "XX" which
shall include its successors and permitted assigns); and
(2) LCS INDUSTRIES, INC. whose principal office is at 120 Brighton Road,
Clifton, New Jersey, USA 07012 (hereinafter called "LCS" which shall include
its successors and permitted assigns).
WHEREAS XX has a need for the creation and supply of XX services which will
deliver a marketing database which includes all the customer behavior and
attitudinal information required to enable XX to become more dynamic and
competitive in the XX telecommunications market;
WHEREAS XX has a need for a computer platform on which such marketing database
will be created, updated and operated;
WHEREAS LCS has expertise and skill in designing computer platforms on which
marketing databases can be created, updated and operated, and in the creation
and supply of marketing database systems and associated XX services;
WHEREAS the parties understand that the substance of their relationship is
likely to change over the duration of the contract, and to that end have agreed
to hold monthly meetings between themselves to plan and manage the services to
be provided to XX by LCS;
WHEREAS XX has procured from one or more third parties the Computer Platform (as
defined below) at its own cost and expense to meet the specifications previously
defined by LCS;
WHEREAS XX wishes to rely on LCS's skill and expertise and wishes to enter into
a contract on the terms hereinafter contained.
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS
In the Contract, the following expressions shall, unless the context
requires otherwise, have the following meanings:-
1.1 "Acceptance" shall mean that the Software has been supplied in
accordance with the Contract, and shall occur when the
Software meets the Marketing Database Design, and "Accept" and
"Accepted" in the context of "Acceptance" shall be construed
accordingly;
1.2 "Affiliate" shall mean any company, partnership or other
entity which from time to time directly or indirectly
Controls, is Controlled by or is under common Control with XX,
including as a subsidiary or holding company or subsidiary
with the same holding company as defined in XX (as amended),
and "Control" shall mean the beneficial ownership of more than
50% of the issued share capital or the legal power to direct
or cause the direction of the general management and policies
of the entity in question (and "Controls" and "Controlled"
shall be construed accordingly);
1.3 "XX" shall mean XX;
1.4 "XX Background Information" shall mean all Information
obtained from XX or provided by XX in connection with the
performance of the Contract, and all Information in relation
to XX's affairs, business, business practices, customer data
and customer information which comes to LCS's knowledge during
the period of this Contract including but not limited to the
existence of this Contract and any provisions of this
Contract;
1.5 "XX Dependencies" shall mean the matters set out in Appendix
A;
1.6 "XX Fiscal Year" shall mean a period of 12 months commencing
the XX
1.7 "XX Foreground Information" shall mean Foreground Information
relating specifically to the business of XX and which cannot
be used or otherwise exploited by LCS without thereby
unavoidably disclosing Information relating to XX;
1.8 "XX Requirements" shall mean XX's requirements set out in
Appendix B, as they have been amended by agreement between the
parties at the Commencement Date by the Scope of Work, and,
after that Date, as amended by agreement between the parties
under Condition 6;
1.9 "XX Supplied Items" shall mean all items supplied to LCS by or
on behalf of XX in connection with the Contract;
1.10 "Commencement Date" shall mean the date these Conditions have
been signed by both XX and LCS; 1.11 "Computer Platform" shall
mean the hardware and software as set out in Appendix C to be
acquired by XX at its own cost and expense;
1.12 "Contract" shall mean the agreement made between XX and LCS
for the execution of the Work, including these Conditions and
Appendices A to I;
1.13 "Contract Price" shall mean the amount stated in Condition 4.1
together with any additions or deductions agreed in writing
under the Contract;
1.14 "Data Center" shall mean the premises owned or occupied by XX
at XX, XX;
1.15 "Deliverable" shall mean an output of any kind delivered, or
to be delivered, under the Contract;
1.16 "Foreground Information" shall mean all Information generated
by LCS in the course of or arising from the performance of the
Contract, excluding the LCS Background Information;
1.17 "Information" shall mean all information (other than the
business records of the parties) whether written or oral or in
any other form, including but not limited to software,
documentation, specifications, reports, data, notes, drawings,
models, patterns, samples, computer outputs, designs and
circuit diagrams, inventions and know-how;
1.18 "Intellectual Property Rights" shall mean any patent, XX,
registered design, copyright, design right, XX, know-how, or
any similar right exercisable in any part of the world and
shall include any application for the registration of any
patents or registered designs or similar registrable rights in
any part of the world;
1.19 "XX XX Area" shall mean the geographical area comprised in a
circle the center of which is XX and the radius of which is
XX;
1.20 "LCS Background Information" shall mean Information which at
the Commencement Date is owned or controlled by or licensed to
LCS, including third party Information, and is supplied to XX
in connection with the Work;
1.21 "LCS Foreground Information" shall mean all Foreground
Information which is not XX Foreground Information;
1.22 "Marketing Database Design" shall mean the data input and
report output requirements to be procured by XX for the
Marketing Database System in order for that System when
properly used to be capable of producing the reports and other
data allowing analysis thereof to be undertaken by a suitably
qualified person, as such reports and data are described in
the XX Requirements;
1.23 "Marketing Database System" shall mean a computer system
comprising the Computer Platform and the Software;
1.24 "Premises" shall mean the place or places other than LCS's
premises to which the Software is to be delivered or where
Work is to be done;
1.25 "Project Plan" shall mean the Deliverables and the timing and
sequence of events for the performance of the Contract, which
at the Commencement Date is set out in Appendix D, as updated
under Condition 3 and altered from time to time in accordance
with Conditions 5 or 6;
1.26 "Scope of Work" shall mean the items to be performed by LCS
described in the document dated XX entitled CMG/LCS Response
to XX and all appendices to it, which documents are hereby
incorporated in this Contract as Appendix E;
1.27 "Software" shall mean the software to be developed and
supplied by LCS under the Contract in order to meet the
Marketing Database Design and the User Interface Design,
including all object code, source code, and technical and
other documentation;
1.28 "XX" shall mean the person duly appointed by XX and notified
in writing to LCS, to act as XX's representative for the
purpose of the Contract, or, in default of such notification,
XX, who at the Commencement Date is XX;
1.29 "Termination Costs" shall mean an amount equal to the total
costs which LCS is obliged to pay third parties, having taken
all reasonable steps to mitigate the amount of those costs,
during the period from the date of early termination of this
Contract until 30 June 1998 and which LCS reasonably incurred
(whether before or after the Commencement Date) in connection
with or for the performance of this Contract, including office
utilities, leases of office space, residential accommodation
and vehicles;
1.30 "User Interface Design" shall mean the requirements to be
procured by XX for delivery systems for accessing data in the
Marketing Database System;
1.31 "Work" shall mean the services to be performed by LCS under
Condition 2.1.
2. DESCRIPTION OF THE WORK
2.1 Subject to the terms of this Contract, LCS shall:
2.1.1 by XX develop, install and commission the Software on
the Computer Platform in order to meet the Marketing
Database Design;
2.1.2 develop, install and commission the Software in order
to meet the User Interface Design;
2.1.3 define the specifications for the Computer Platform;
2.1.4 integrate the Computer Platform and Software to form
the Marketing Database System;
2.1.5 maintain and support the Software and manage the
Marketing Database System;
2.1.6 provide certain training and information technology
services during the term of this Contract, all as
more particularly described in the Scope of Work and
the Project Plan.
2.2 LCS warrants that:
2.2.1 it shall use reasonable care and skill in performing
the Work and in seeking to meet the time scales set
out in the Project Plan; and
2.2.2 the Marketing Database System will meet the Marketing
Database Design and the XX Requirements subject to
Condition 2.5.
2.3 XX acknowledges that LCS has already delivered to XX the
specifications for the Computer Platform.
2.4 LCS shall liaise and co-operate with such other XX contractors
as XX may notify to LCS provided LCS need not do so to the
extent it would interfere with the timely performance of its
obligations under the Contract.
2.5 LCS is not liable for defects or shortcomings in the Computer
Platform (other than in the specifications therefor (without
affecting Condition 7.9) and/or in the Software), including
inadequate size or capacity, and telecommunications failures.
Nothing in this Condition 2.5 affects XX's right to terminate
the Contract under Condition 7.7.
3. PROJECT PLAN
3.1 At the Commencement Date the parties have agreed a Project
Plan up to XX relating to the development of that part of the
Software to which the Marketing Database Design refers, but
they still need to agree the matters to be included in one or
more updated Project Plans covering the remainder of the
Contract, and will seek to do as follows:
3.1.1 no later than XX LCS shall submit an updated Project
Plan to XX for approval by XX covering the Work to be
undertaken up to XX, and no later than 2 months
before the end of each subsequent XX Fiscal Year
during the term of the Contract LCS shall submit an
updated Project Plan to XX covering the Work to be
undertaken during the following XX Fiscal Year or
part thereof during the term of the Contract (such
period from XX to XX and the 2 months before the
beginning of the relevant XX Fiscal Year being the
"Approval Period");
3.1.2 during the Approval Period the parties shall seek to
agree the updated Project Plan, but if agreement is
not reached by the end of the Approval Period, LCS
shall perform the Scope of Work in a reasonable time;
3.1.3 if XX does not notify LCS in writing of any comments
on an updated Project Plan proposed by LCS by the end
of the Approval Period, the updated Project Plan
shall be deemed to be approved by XX;
3.1.4 where an updated Project Plan has been or is deemed
to be approved by XX, the updated Project Plan shall
become the Project Plan for the purposes of the
Contract.
3.2 The parties shall implement the Project Plan.
3.3 XX shall provide such resources, assistance and Information as
may reasonably be needed by LCS in order to perform its
obligations under the Contract in a timely fashion, and LCS
shall notify XX as soon as reasonably practicable in advance
of such need arising.
3.4 Without affecting Condition 3.3, at the request of LCS and
otherwise as required in the Project Plan, XX shall provide
and otherwise make available to LCS the XX Dependencies.
3.5 LCS shall provide the Deliverables (other than the Software
developed to meet the Marketing Database Design and the
Project Plan) to the reasonable satisfaction of XX.
3.6 LCS shall keep the Project Plan up to date and provide XX with
copies of new issues thereof.
3.7 Each party shall notify the other at the earliest opportunity
of any identified changes likely to impact on the quality or
delivery of the Work.
3.8 XX acknowledges that the performance of LCS's obligations
under Conditions 2.1.1 and 2.1.4 and the satisfaction of the
warranty in Condition 2.2.2 depends on the XX Dependencies
being provided by XX when required (as notified in writing in
advance by LCS as being critically required) in order for the
events which have to take place in sequence for the Software
to be delivered by XX and for the timely integration of the
Computer Platform and the Software, to take place in that
sequence; LCS shall not be liable for breach of those
provisions where the XX Dependencies are not made available
accordingly.
3.9 If the nature or volume of the services of a third party to be
procured by XX which are necessary for the timely performance
of the Work (a "Relevant Contractor") are altered to an extent
which adversely affects the continued performance of the Work
in accordance with the Contract, then XX and LCS shall seek to
agree the changes (if any) to the Contract in order to ensure
that LCS can continue to perform its obligations under the
Contract; if the parties are unable to agree those changes,
then LCS shall try to perform its obligations but shall not be
liable to XX for a failure to do so.
3.10 Any date referred to in this Contract for the performance
thereof may only be changed under Condition 6.
4. PRICING AND PAYMENT INFORMATION
4.1 In consideration of the Work and the Software being provided
by LCS, XX will pay LCS the fixed Contract Price of
$40,226,000. The Contract Price shall be paid in full without
set-off monthly in arrears, and in accordance with the
following schedule:
4.1.1 the total amount to be paid during the XX Fiscal Year
1995/1996 is XX less (a) XX already invoiced to XX
under work covers for the period from XX to XX which
is due XX and (b) XX under work cover for the period
from XX to XX which is invoicable on or after XX and
due on XX (assuming invoiced on XX). The balance
shall be paid as follows:
i. XX being invoicable on or after XX; and
ii. XX being payable in 7 monthly sums of XX,
the first such payment being invoicable on
or after XX.
4.1.2 During XX's Fiscal Year 1996/97, 12 monthly sums of
XX, the first such payment being invoicable on or
after XX.
4.1.3 During XX's Fiscal Year 1997/98, XX shall pay 12
monthly sums of XX, the first such payment being
invoicable on or after XX.
4.1.4 During XX's Fiscal Year 1998/99, 3 monthly sums of
XX, the first such payment being invoicable on or
after XX.
4.2 In addition to the fixed Contract Price payable pursuant to
Condition 4.1, XX will pay or provide without cost to LCS, or
reimburse LCS, for all of the following out-of-pocket costs
incurred by LCS in connection with performing its obligations
under this Contract:
4.2.1 travel and reasonable subsistence expenses outside
the XX XX Area;
4.2.2 communications costs and facilities incurred in
linking computer systems located on XX and LCS sites
in XX and on XX sites in XX and LCS sites in the
United States of America;
4.2.3 postage, freight and overnight courier expenses
incurred in shipping XX's data;
4.2.4 such other items, if any, as the parties may agree
under Conditions 5 or 6.
4.3 All prices in Conditions 4.1 shall be held fixed and firm for
the duration of the Contract, but they exclude costs for
office equipment (including photocopies, fax machines,
personal computers and printers, mobile telephones, pagers and
overhead projectors) and office furniture.
4.4 All prices shown in the Contract shall be exclusive of XX at
the rate prevailing from time to time and all other XX
leviable in connection with performing the Work, which shall
be for XX's account.
4.5 XX will settle all invoices submitted in accordance with this
Contract within 15 days from the date of receipt of a valid
invoice. All payments shall be made by wire transfer of
immediately available US Dollar funds to such account or
accounts as LCS shall specify in writing to XX.
4.6 When payment becomes due LCS shall forward invoices to the XX
at XX, XX XX.
4.7 Each invoice shall:
4.7.1 specify the Contract number;
4.7.2 specify the period for which payment is due if
relevant;
4.7.3 if it relates to out-of-pocket expenses reimbursable
to LCS pursuant to Condition 4.2, include copies of
actual receipts for traveling expenses for trips
outside the XX XX Area and for other reimbursable
expenses referred to in Condition 4.2.
4.8 If XX without cause has not paid any amount due under this
Contract within 30 days of the date of the applicable invoice,
compound interest shall be payable on the unpaid amount
accruing daily from the due date for payment to the date of
actual payment at the annual rate of interest of 2% above the
base lending rate of The Bank of New York applicable at the
relevant time. This Condition 4.8 shall survive termination or
expiry of the Contract.
4.9 Where this Contract terminates early on a day other than the
last day of a calendar month, the amount to be paid by XX
under Condition 4.1 in respect of Work done since the
beginning of that month and the date of termination, shall be
calculated by applying the following formula:
X = A x B/C
Where:
A is monthly sum to which Condition 4.1 refers
B is the number of days from the beginning of the calendar month
to the date of termination (inclusive)
C is the number of days in the calendar month
X is the amount to be paid.
5. CONTRACT PERFORMANCE
5.1 LCS shall deliver to XX a report each month, in such format as
shall be reasonably required by XX, detailing the performance
of LCS against the Project Plan.
5.2 Progress meetings shall take place at monthly intervals at XX
or LCS's premises in the XX. The meetings shall be attended by
the following people or their nominated representative who
shall be fully empowered to undertake decisions on behalf of
their companies:
<PAGE>
XX
XX - XX Project Director
XX - XX Project Manager
XX - XX Commercial Representative
XX - XX Technical Representative
Plus representative of XX
LCS
Mr. Arnold J Schiene - LCS - Project Director
Mr. Peter Weinbrecht - LCS - Project Manager - Revenue Feeds
5.3 LCS and XX may discuss and agree at the progress meetings any
matters relevant to the performance of their rights and
obligations under this Contract (including acceptance of
Deliverables (other than the Project Plan and the Software
developed to meet the Marketing Database Design) or
identification of shortfalls in such Deliverables), and any
such agreement shall amend the Contract accordingly except
that any change to the Contract Price, the XX Requirements or
the Scope of Work may only be made under Condition 6. Minutes
of the meetings shall be kept by XX and agreed with LCS.
5.4 XX and LCS will endeavor to identify joint business
opportunities in XX during the period of this Contract.
6. CHANGE CONTROL PROCEDURE
6.1 This Condition 6 applies to all variations to the Contract
proposed by either party except permitted variations agreed at
progress meetings held under Condition 5.
6.2 All such variations to the Contract proposed by either party
shall be processed by means of the change control procedure
detailed below and by use of a variation proforma set out in
Appendix F.
6.3 Except as otherwise may be agreed in writing, the Commercial
Representatives of XX and LCS (as nominated below) shall be
the only people who may make or receive a formal proposal for
a variation to the other party. Other managers within both
parties may discuss the viability of a proposal before a
variation proforma is raised, and shall be consulted by the
Commercial Representatives as necessary after the proforma is
raised.
6.4 Copies of any relevant correspondence and Information
(including man-day rates and resource allocation) shall be
attached to the proforma to assist the other party in
evaluating the proposed variation.
6.5 XX will allocate a variation reference number to each proforma
and shall be responsible for progressing the proforma.
6.6 Where it is confirmed by LCS that a proposed variation will
have no effect on the Contract Price or time scales or the
performance of the Work, then, with the agreement of XX, which
shall not be unreasonably withheld or delayed, the change may
be introduced immediately and the proforma circulated within
14 days.
6.7 No variation will be considered to be effective unless the
proforma is signed in the relevant place by XX and LCS. LCS
shall complete the confirmation part of the proforma, and
return it to XX within 10 days of receipt of an instruction
from XX to proceed with a variation.
6.8 Following agreement of a variation XX will arrange the issue
of an amendment to Contract as necessary.
6.9 The Commercial Representatives who shall manage and authorize
changes to the Contract will be:
XX LCS
XX Mr. Arnold J. Scheine
Manager Software Procurement CEO, LCS
XX 120 Brighton Road
XX Clifton
XX New Jersey
XX 07012
XX USA
XX Fax: 201 778 7485
Fax: XX Tel: 201 778 5588
Tel: XX
7. MARKETING DATABASE SYSTEM
7.1 During the period identified in the Project Plan (the "Test
Period") for testing the Software developed to meet the
Marketing Database Design (the "Tested Software"), LCS shall
submit sample reports produced using the Marketing Database
System as it then exists to the XX for approval against the XX
Requirements.
7.2 The XX shall notify LCS of any defects in the reports
submitted.
7.3 Defects in the reports shall be corrected by LCS, working as
required with Relevant Contractors, by enhancing or modifying
the Tested Software, and this shall be undertaken at no
additional charge to XX.
7.4 After the Tested Software has been corrected pursuant to
Condition 7.3, LCS shall re-submit additional sample reports
to the XX for approval against the XX Requirements.
7.5 The procedure described in Condition 7.1 to 7.4 shall continue
throughout the Test Period until no defects in the reports are
identified by the XX.
7.6 Where no defects are identified in the reports and XX has been
provided with at least one version of each of the completed
reports meeting the XX Requirements:
7.6.1 the Tested Software shall be Accepted by XX; and
7.6.2 LCS shall have satisfied Conditions 2.1.1, 2.1.3 and
2.1.4 and the warranty in Condition 2.2.2.
7.7 If by XX all the reports to be available at that date meeting
the XX Requirements are not available from the Marketing
Database System within the response times required by the XX
Requirements (the "Response Times") and that is due either to
a defect in the Marketing Database Design, the Tested
Software, and/or the specifications of the Computer Platform
provided by LCS, then the following shall apply:
7.7.1 XX shall no earlier than XX serve LCS with a notice,
specifying the defects in the reports and any
response times of the Marketing Database System and
requiring LCS during the 90 days after receipt of the
notice (working with Relevant Contractors as
required) to enhance or modify the Tested Software
and/or the specifications of the Computer Platform
(but not the Computer Platform itself) so that all
the reports are available within the Response Times;
i. during the 90 days LCS shall re-submit
revised reports to the XX for approval
against the XX Requirements;
ii. if the reports still do not meet the XX
Requirements whether or not within the
Response Times at the end of the 90 days,
and that is due to a defect in the Marketing
Database Design or the enhanced or modified
version of the Tested Software, XX is
entitled to terminate the Contract with
immediate effect by notice in writing to LCS
or seek to agree changes to the XX
Requirements under Condition 6;
7.7.2 in the event that enhancement or modification to the
specification of the Computer Platform would (if
implemented) result in XX having to procure
additional hardware and/or associated system software
to that specified in Appendix C (the "Additional
Items") then:
i. XX and LCS shall obtain as soon as possible
separate estimates from reputable suppliers
representing their respective opinions of
the lowest total cost method of buying (or
licensing in the case of software) the
Additional Items, and the period of 90 days
shall be suspended and further performance
of this Condition 7.7 shall be postponed
until their respective estimates have been
obtained;
ii. if both estimates are greater than
$1,000,000 (excluding XX or any equivalent
XX), XX is entitled to terminate the
Contract with effect from the end of the 90
days referred to in Condition 7.7.1 as
extended under Condition 7.7.2(i);
7.7.3 if XX decides to procure the Additional Items, then:
i. the 90 days shall be further suspended and
further performance of this Condition 7.7
shall be further postponed until the
Additional Items have been delivered and
installed such that the procedure can
continue;
ii. once the Additional Items have been
installed, during the remainder of the 90
days (following the suspension thereof) LCS
shall re-submit revised reports to the XX
for approval against the XX Requirements;
iii. if the reports still do not meet the XX
Requirements within the Response Times at
the end of the 90 days, and that is due to a
defect in the Marketing Database Design, or
the enhanced or modified versions of the
Tested Software and/or the specifications of
the Computer Platform, XX is entitled to
terminate the Contract with immediate effect
by notice in writing to LCS or to seek to
agree changes to the XX Requirements under
Condition 6;
7.7.4 if XX decides not to procure the Additional Items and
does not terminate or is not entitled to terminate
the Contract under Condition 7.7.2 then:
i. during the remainder of the 90 days
(following suspension thereof), LCS shall
re-submit revised reports to the XX for
approval against the XX Requirements;
ii. if the reports still do not meet the XX
Requirements whether or not within the
Response Times at the end of the 90 days,
and that is due to a defect in the Marketing
Database Design or the enhanced or modified
version of the Tested Software, XX is
entitled to terminate the Contract with
immediate effect by notice in writing to LCS
or seek to agree changes to the XX
Requirements under Condition 6;
7.7.5 where any estimate to which Condition 7.7.2(i) refers
is in a currency other than United States Dollars,
the Dollar amount of the estimate shall be determined
by applying the appropriate exchange rate published
in the XX (or any replacement service) published in
the XX immediately before the date of the estimate.
7.8 XX acknowledges that there are aspects of the Marketing
Database System and its design for which LCS is not
responsible, so that it is conceivable XX may have a right to
terminate the Contract under Condition 7.7 as a result of
events which are beyond LCS's control; accordingly, the
provisions of Condition 7.7 are XX's only remedy for breach of
contract, negligence or otherwise (except for fraud) where the
reports required by the XX Requirements at XX are unavailable
from the Marketing Database System within the Response Times,
for defects in the Tested Software, its integration with the
Computer Platform, and/or in the specifications for the
Computer Platform, and/or otherwise where the Marketing
Database System (or any part of it) fails in any way to meet
the XX Requirements therefor prevailing at XX. Thereafter XX's
remedies in respect of other aspects of the Marketing Database
System and LCS's performance of the Contract will be in
accordance with the Contract.
7.9 In no circumstances is LCS liable to pay for new hardware, or
associated systems software and/or other computing equipment
or services needed by XX in connection with the Computer
Platform.
7.10 Until the Contract is terminated by XX under Condition 7.7,
LCS shall continue to perform its obligations under the
Contract and shall be paid under Condition 4 accordingly.
8. PERSONNEL
8.1 LCS shall ensure that any personnel engaged in the performance
of this Contract have appropriate qualifications and
competence.
8.2 LCS shall take all reasonable steps to avoid changes of
personnel who have been assigned to perform the Work.
8.3 LCS and XX shall be responsible to the other for all loss or
damage to property of the other, or injury caused by any of
its employees, agents or sub-contractors in the course of or
arising out of the performance of the Contract.
8.4 XX shall have the right to refuse admittance to, or order the
removal from, its property of any person employed by or acting
on behalf of LCS whose behavior, at the time he or she is
seeking admittance to or is present at the property, renders
that person at the relevant time in the reasonable opinion of
XX (which shall be final) unfit to be on XX property. Action
taken under this Condition 8.4 shall be notified in writing to
LCS by XX. Such notice shall describe in reasonable detail the
behavior which gave rise to such action by XX and shall list
the names and titles of all XX employees who witnessed the
alleged behavior. This Condition 8.4 shall be deemed to be
reciprocal subject to Condition 11.
8.5 Key personnel to be engaged on the Work are as follows:
<TABLE>
<S> <C> <C>
Mr. Arnold J Scheine - LCS Project Director
Mr. Peter Weinbrecht - LCS Project Manager - Revenue Feeds
Mr. Tom Maggio - LCS Project Manager - Other Feeds
Mr. Bernie Kane - LCS Project Manager - Delivery Systems
Mr. Tony Volpe - LCS Project Manager - Data Processing and Systems Programming
Mr. Joe Maier - LCS Project Manager - All Business analysts Programmers
Mr. Brian Levine Project Manager - Client Coordination and Relations
Mr. Marvin Cohen - LCS Senior Developer
Mr. Joe Garretson - LCS Project Coordinator - Customer Grouping
Mr Joseph Minelli - LCS Project Coordinator - Customer Grouping
</TABLE>
8.6 XX shall also be at liberty to request additional key
personnel throughout the Contract which shall be added to the
list set out in Condition 8.5 by way of variation, as detailed
in Condition 6.
8.7 LCS shall, if possible, give XX at least 30 days prior
notification of any changes to the key personnel assigned to
this Contract. LCS shall demonstrate that the qualifications
of the prospective personnel are equal to or better than the
qualifications of the personnel being replaced. XX shall be at
liberty to reject such prospective personnel proposed by LCS
having first given reasonable reasons for such rejection. In
the event of rejection, LCS shall re-propose alternative
personnel within 5 working days of XX's rejection. This
process shall be repeated until the personnel are acceptable
to XX, provided that if LCS reasonably believes that the
refusal by XX to approve replacement personnel may adversely
affect its ability to perform its obligations in a timely
fashion, LCS is entitled to appoint replacement personnel
regardless of whether they are acceptable to XX (without
affecting Conditions 2.2.1 or 8.1).
8.8 LCS shall use reasonable endeavors to ensure that the key
personnel are required to fulfill LCS's obligations under the
Contract for the term thereof.
9. ACCESS TO THE PREMISES
XX shall afford such access to the Premises as LCS deems necessary for
the provision of the Work, at all reasonable times on or after the date
stated in the Contract on which the Work is to commence or such earlier
date as may be agreed in writing between XX and LCS.
10. OBSERVANCE OF XX SITE AND OTHER REGULATIONS
10.1 LCS shall at its own expense comply with all XX site
regulations applicable to the performance of the Contract
which have been notified in advance thereof to LCS and take
and comply with such other measures as may be reasonably
necessary in respect of precautions for safeguarding all
persons and property as may be affected by the performance of
the Contract.
10.2 Subject to Condition 10.1, XX shall provide the officers,
employees, agents and sub-contractors of LCS with a safe
working environment.
11. SECURITY
11.1 LCS shall ensure that the Software shall meet the security
requirements set out at Appendix G. Upon XX's reasonable
request, LCS shall ensure that the Software shall comply with
such additional security requirements specified by XX from
time to time during the Contract, provided that LCS is
entitled to charge XX for the incremental services necessary
to provide such security requirements at the hourly rate of
$200.
11.2 Whenever LCS has access (including remote access) to or
custody, care or control of Premises or property in which XX
has an interest, LCS shall;
11.2.1 comply with all site regulations; and
11.2.2 limit its access to the Premises or property
necessary for the purposes of the Contract; and
11.2.3 provide all security measures XX deems necessary at
XX's cost; and
11.2.4 provide to XX the names and addresses of all LCS's
personnel or sub-contractors engaged on the Contract;
and
11.2.5 submit itself to any search required by XX, provided
that any search of equipment owned or used or
premises owned or occupied by LCS shall be subject to
reasonable notice and confined to those parts thereof
which relate to the performance of LCS's obligations
under the Contract; and
11.2.6 ensure that all its personnel, sub-contractors
engaged on the Contract do not without due authority
remove any property in which XX has an interest from
the Premises; and
11.2.7 take reasonable care of property in which XX has an
interest and which is in the custody, care or control
of LCS and, on request, inform XX of the whereabouts
of such property; and
11.2.8 retain and make available to XX a log of all access.
11.3 XX is entitled on reasonable notice to inspect premises owned
or occupied by LCS to assess whether the security features at
the premises meet XX's security requirements and to require
LCS at XX's cost and expense to install and maintain such
additional features as XX may require within a reasonable time
frame and in a manner which minimizes the disruption to LCS's
business.
11.4 If LCS has remote access to property in which XX has an
interest, such remote access shall:
11.4.1 be accessible to XX personnel on reasonable notice;
and
11.4.2 be liable to be disconnected by XX at any time
subject to Condition 11.7; and
11.4.3 not degrade the service or functionality of the
property.
11.5 LCS shall ensure that all Software upgrades and Software or
data back-ups can be effected remotely.
11.6 The obligations of LCS in this Condition 11 shall include
LCS's employees and LCS shall take reasonable steps to procure
that its agents and sub-contractors also take the necessary
measures to ensure compliance.
11.7 This Condition 11.7 provides for the circumstances in which XX
is entitled to disconnect any remote access of LCS pursuant to
Condition 11.4.2 and the consequences of doing so.
11.7.1 XX must give LCS as much notice as reasonably
possible before the access is disconnected.
11.7.2 If the disconnection is permanent, then this Contract
shall terminate immediately.
11.7.3 If the disconnection proposed by XX is temporary and
LCS considers that it may not as a result be able to
fulfill its obligations under the Contract in a
timely fashion, then the parties shall seek to agree
changes to the Contract under Condition 6 in order to
allow XX to disconnect the access for the time scale
proposed; in default of agreement, LCS shall try to
perform its obligations under the Contract, but shall
not be liable to XX for failing to do so.
12. INSPECTION AND TESTING DURING DEVELOPMENT
XX shall, subject to reasonable notice and at all times during the
Contract period, be entitled to inspect and test the materials,
workmanship and performance of the Software, provided that such
inspection and testing may not be made if it would cause unreasonable
delay to the timely performance of the Contract.
13. CONFIDENTIALITY
13.1 Subject to Condition 13.4, LCS shall keep confidential all XX
Background Information and XX Foreground Information and shall
not without the prior written consent of XX:-
13.1.1 use it for any purpose other than is necessary for
the performance of its obligations under the
Contract; or
13.1.2 disclose it to any person other than a person
directly employed or engaged by LCS in the
performance of the Contract. Disclosure to all
persons shall be made in confidence and only to the
extent necessary for the performance of LCS's
obligations under the Contract;
provided that LCS may disclose this Contract and any relevant
Information to its legal or professional advisers to the
extent necessary for the purpose of receiving legal or other
advice, and provided further that such disclosure is under
terms of confidentiality.
13.2 Subject to Condition 13.4 LCS shall not publicize the
existence of the Contract without the prior written agreement
of XX which shall not be unreasonably withheld or delayed,
provided that LCS may describe to third parties the general
nature of the Work in connection with seeking business
arrangements with such third parties.
13.3 Subject to Conditions 13.4 and 23.2, XX shall keep
confidential the LCS Foreground Information and all LCS
Background Information provided always that XX:
13.3.1 shall procure that its employees who are engaged
wholly or mainly in connection with the Contract and
who are reasonably nominated by LCS shall sign a
separate agreement with LCS substantially in the form
set out at Appendix H, amended accordingly;
13.3.2 may disclose it to third parties providing to XX
services exclusively for the benefit of the internal
business purposes of XX, provided that XX:
i. notifies the third party of the confidential
nature of the LCS Background and LCS
Foreground Information and takes reasonable
steps to ensure that each third party is
subject to obligations of confidence
comparable to this Condition 13;
ii. notifies LCS of any unauthorized or
suspected unauthorized use by any third
party of the LCS Background or LCS
Foreground Information as soon as possible
after XX becomes aware thereof; and
iii. provides LCS with reasonable assistance in
preventing or stopping the unauthorized use.
13.4 Neither party to the Contract shall be bound by the above
provisions of this Condition 13 in relation to Information
that is:
13.4.1 published or comes into the public domain otherwise
than by a breach of the Contract; or
13.4.2 lawfully known to it before commencement of the Work
or any preliminary work in connection with the
Contract, and is not subject to a previous obligation
of confidentiality binding that party; or
13.4.3 lawfully obtained by it from a third party which is
free to divulge that Information; or
13.4.4 replicated by development independently carried out
by or for it by an employee or other person without
access to, or knowledge of, such Information; or
13.4.5 required to be disclosed by law or regulation
(including the rules of the SEC in the United States
of America), but only to the extent and for the
purpose of such disclosure.
13.5 LCS acknowledges that it will have access to sensitive
business information which would severely damage XX if the
obligations specified in this Condition 13 are breached. LCS
shall not give XX Background or XX Foreground Information in
connection with the Work to any of its employees, agents or
contractors unless the persons concerned have signed a
separate agreement directly with XX in the format set out at
Appendix H, and LCS has 30 days from the Commencement Date to
do so with respect to such relevant persons as at the
Commencement Date.
13.6 The provisions of this Condition 13 shall survive the expiry
or termination of the Contract.
13.7 LCS shall abide by all XX and the XX as detailed in Appendix
I.
13.8 LCS shall not without the express written permission of XX
give access to any XX Background or XX Foreground Information
to any agency staff or contract workers.
14. NOTICES
Notices required under the Contract to be given in writing shall be
delivered by hand, or facsimile transmission confirmed by pre-paid
first class airmail, to the Commercial Representative of the party to
whom the notice is sent at the address specified in the condition
headed 'Change Control Procedure.' Notices delivered by hand shall be
deemed to be given upon receipt, and notices sent by facsimile shall be
deemed to be given upon transmission.
15. FORCE MAJEURE
15.1 Neither party is liable for delay or failure to perform any of
its obligations under this Contract insofar as the performance
of such obligation is prevented by a force majeure event.
15.2 Each party shall notify the other party of the occurrence of
such a force majeure event, and use all reasonable endeavors
to continue to perform its obligations hereunder for the
duration of such force majeure event. However, if any such
event prevents a party from performing all of its obligations
hereunder for an unreasonable period, the other party may
terminate this Contract by notice in writing.
15.3 For the purposes of this Contract, a force majeure event means
any event which is beyond the reasonable control of the party
liable to effect performance, and shall include but not be
limited to acts of God, riots, acts of war, epidemics,
governmental regulations superimposed after the fact, fire,
communication line failures, power failures or natural
disasters, but excludes the performance or non-performance of
any Relevant Contractors and/or early termination of their
terms of engagement or reduction in the nature or scope of the
services provided by them (the "Excluded Matters"); except
that the Excluded Matters do not affect XX's rights under
Condition 7.
16. ASSIGNMENT AND SUBCONTRACTING
16.1 LCS shall not without the permission in writing of XX assign
or subcontract the whole or any part of the Contract.
16.2 At the option of LCS this Contract shall be transferred by
novation to company Controlled by LCS, and the parties agree
to execute such deeds or other documents as may be necessary
to effect that novation provided that XX need not do so unless
LCS delivers to XX a guarantee signed by LCS of the
obligations of such company (in such form as XX may reasonably
require).
17. BREACH
17.1 Subject to Condition 17.2, where one party (the "Defaulting
Party") has committed a breach of this Contract (other than
non-payment of amounts due under the Contract) or a tortious
act or omission in connection with it, in each case which is
capable of remedy (a "Default"), the other XX unless:
17.1.1 the Defaulting Party has been notified of the Default
and been required to remedy it within 90 days of the
date of the notice; and
17.1.2 the Default has not been remedied within the 90 days.
17.2 The restriction on the non-Defaulting Party from XX under
Condition 17.1 shall apply and the non-Defaulting Party shall
continue to perform its obligations under this Contract, only
as long as the Defaulting Party has taken reasonable steps to
remedy the Default within the notice period.
18. LCS NON-DEFAULT
18.1 XX acknowledges that LCS has incurred certain costs solely in
connection with or for the performance of this Contract, which
would, in the absence of this Condition 18, only be recovered
if the Contract remains in force until XX; except for
termination by either party under Condition 15 or by XX under
Conditions 7.7, 19.2 or 19.5, the parties intend that,
according to this Condition 18, LCS shall not suffer any
financial disadvantage as a result of early termination of the
Contract or suspension of its performance.
18.2 Whenever notice is given by either party to terminate this
Contract, other than under Conditions 15 or 19.2 or by XX
under Conditions 7.7 or 19.5 or by LCS under Condition 19.4,
or the Contract terminates under Condition 11.7.2, XX shall
within 15 days of being invoiced by LCS, pay the Termination
Costs, and LCS shall as far as is reasonable, perform its
obligations (if any) under the Contract throughout the notice
period; provided that XX shall pay the amounts under Condition
4 which LCS shall be entitled to invoice during the notice
period notwithstanding that LCS need render no performance at
all or performance substantially different from that expected
by XX at the Commencement Date.
18.3 Where this Contract terminates under Condition 11.7.2 or
whenever notice is given by LCS to terminate the Contract
under Conditions 19.2 or 19.4, XX shall (without affecting
LCS's other rights) pay LCS, in addition to all outstanding
payments an amount equal to:
18.3.1 the total of the monthly sums which would have been
payable under Condition 4.1 over the 9 months
following the date of LCS's notice or from that date
until the expiry of the Contract, whichever is the
shorter; and
18.3.2 the Termination Costs.
18.4 Whenever the performance by LCS is suspended or prevented for
any period (under Condition 15 or otherwise), other than as a
result of LCS's negligence (but save as provided in Condition
7) or willful default, XX shall continue to pay the relevant
amounts under Condition 4 during the period in question,
notwithstanding that Work is not or may not be performed
during that period or may be performed in a manner
substantially different from that expected by XX at the
Commencement Date.
19. DURATION AND TERMINATION
19.1 The Contract shall commence on the Commencement Date and
unless terminated in accordance with its terms shall continue
until XX, except that LCS is entitled to invoice XX under
Condition 4.5 for the amount invoicable on or after XX under
Condition 4.1.4, which shall be paid by XX accordingly.
19.2 Either party may at any time by notice in writing to the other
terminate this Contract as from the date of service of the
notice if:
19.2.1 the other party is unable to pay its debts or enters
into liquidation (except for the purposes of an XX)
or makes an arrangement with its creditors or has an
XX or an administrator or similar officer appointed
of all or any of its assets or takes or suffers to be
taken any similar action in consequence of a debt or
ceases or threatens to cease trading; or
19.2.2 the other party commits a material breach of this
Contract (other than non-payment of amounts due under
the Contract) which is not remedied within 90 days
after the non-breaching party has given written
notice requiring such breach to be remedied, provided
that the obligations of the non-breaching party under
this Contract remain to be performed only as long as
the party in breach takes reasonable steps to remedy
the breach.
19.3 Condition 19.2.2 does not apply to any breach of contract by
LCS where Condition 7 applies.
19.4 LCS is entitled to terminate the Contract by notice in writing
to XX where XX has failed without cause to pay any 2
consecutive monthly amounts due under the Contract within 30
days of the date of the second invoice.
19.5 Without prejudice to any other rights or remedies it may have,
XX shall have the right to terminate the Contract if the
ownership or Control of LCS is materially changed, by
transferring Control to a competitor of XX, within 30 days of
such change of Control.
19.6 If the contract between XX and a Relevant Contractor is
terminated by either party to it on or before XX, then XX and
LCS shall seek to agree the changes to this Contract under
Conditions 5 or 6; provided that if such agreement is not
reached within a reasonable time after the date of termination
of the relevant contract, either XX or LCS can terminate this
Contract by 9 months notice in writing to the other.
20. OTHER CONSEQUENCES OF TERMINATION
20.1 Termination or expiry of this Contract does not affect the
rights and obligations of the parties which have accrued on or
before termination or expiry, including the right to claim
damages for breach of the Contract and payment of amounts due
to LCS, including the Termination Costs.
20.2 Where LCS is entitled to terminate this Contract under
Condition 19.2.2 on the grounds that XX has exceeded the scope
of a licence under Condition 23.2 or Condition 19.4, then all
licences granted to XX by LCS shall be suspended pending
correction of the relevant breach by XX, in which case the
licences will revive.
21. COMPETITION
21.1 Neither party shall at any time, without the prior written
consent of the other, either during or for a period of six
months from the termination of this Contract either on its own
behalf or any other person, firm, company or organization:
21.1.1 directly or indirectly induce or seek to induce any
person, firm or company who at any time during or at
the time of the termination of this Contract are or
were customers of or in the habit of dealing with the
other and with whom the other has had dealings during
the course of this Contract to remove their business
from the other; or
21.1.2 directly or indirectly induce or seek to induce any
employees of the other to leave the other's
employment.
21.2 The provisions of Condition 21.1 shall survive the termination
of the Contract.
22. XX INTELLECTUAL PROPERTY
22.1 All XX Background Information and any copies thereof and all
Intellectual Property Rights therein shall remain the property
of XX. LCS shall return the XX Background Information (except
the Contract) to XX upon expiry or termination of the
Contract, or earlier upon request by XX except if it would
prevent the performance by LCS of its obligations in a timely
manner.
22.2 Except as expressly set out in the Contract no assignment of
or licence under any Intellectual Property Right or trade mark
or service mark, whether registered or not, owned or
controlled by XX is granted to LCS.
22.3 XX hereby grants LCS a non-exclusive licence to use and copy
the XX Background Information for the purpose of or in
connection with the Contract.
22.4 XX warrants to LCS that it has the right and power to grant
the licences under the Contract.
22.5 The provisions of this Condition 22 shall survive the expiry
or termination of the Contract.
23. LCS INTELLECTUAL PROPERTY
23.1 All Foreground Information and the LCS Background Information,
any copies thereof and all Intellectual Property Rights
therein shall remain the property of LCS.
23.2 Subject to Condition 20.2, LCS hereby grants from the
Commencement Date to XX and its Affiliates an irrevocable,
royalty free non-transferable:
23.2.1 non-exclusive licence to use, copy, modify and have
modified and use as copied or modified the LCS
Background Information and the LCS Foreground
Information; and
23.2.2 perpetual exclusive licence to use, copy, modify and
have modified and use as copied or modified the XX
Foreground Information,
in each case, for the internal purposes of their respective
businesses.
23.3 LCS warrants to XX that it has the right and power to grant
the above licences.
23.4 Except as expressly set out in the Contract, no assignment of
or licence under any Intellectual Property Rights or trade
mark or XX, whether registered or not, owned or controlled by
LCS is granted to XX.
23.5 LCS shall defend or settle in its sole discretion all actions,
claims and proceedings ("Claims"), that the LCS Background or
the Foreground Information infringes Intellectual Property
Rights of any third party.
23.6 Subject to Conditions 23.7 and 34.4, LCS shall indemnify XX in
respect of any direct costs and damages (including reasonable
legal fees) incurred or sustained by XX as a result of a
breach of Condition 23.3.
23.7 Where XX seeks to be indemnified pursuant to Condition 23.6,
the indemnity is conditional on XX:
23.7.1 giving notice to LCS of the Claim promptly;
23.7.2 LCS has full control over the conduct of the Claim;
23.7.3 XX must not make or suffer or permit to be made any
admission of liability, nor act or omit to act or
suffer or permit any act or omission to take place
which would prejudice the ability of LCS to defend or
settle the Claim; and
23.7.4 XX must give LCS all reasonable assistance in
connection with the Claim.
23.8 In the event of any Claim, LCS shall at its own expense and
option either:
23.8.1 secure a royalty free licence authorizing XX to
continue use of the LCS Background and the Foreground
Information and to exercise its other rights granted
under the Contract in respect of such Information; or
23.8.2 modify or replace the Software, so as to meet the
Marketing Database Design and the User Interface
Design and avoid the claim of infringement and any
injunction or court order.
23.9 The indemnity in Condition 23.6 shall not apply to Claims:
23.9.1 arising directly from LCS's use of or compliance with
the XX Background Information or any other
instructions of XX unless LCS ought to be aware of
the risk of infringement;
23.9.2 relating to XX's use of the LCS Background or the
Foreground Information in combination with other
software or goods not supplied by LCS where such use
is not contemplated by the Contract or otherwise
agreed to by LCS, unless such infringement would have
arisen independently of such combination;
23.9.3 arising from modifications to the Computer Platform
or the Foreground Information made by XX or by third
parties on behalf of XX, excluding modifications
specified or recommended by LCS; or
23.9.4 attributable to a failure or refusal by XX to use a
modified or replacement item supplied under Condition
23.8.2.
23.10 The provisions of this Condition 23 shall survive the expiry
or termination of the Contract.
24. VIRUS PROTECTION
24.1 LCS shall virus check using XX supplied packages the Software
prior to delivery to XX and shall remove any virus identified
or re-deliver the Software without the virus.
24.2 If LCS fails to check the Software for viruses in breach of
Condition 24.1 or fails to identify a virus which would have
been identified had the test been run correctly, then LCS
shall indemnify XX for any loss or damage caused by the virus.
25. INDEMNITY - GENERAL
25.1 Each party (the "Indemnifier") shall indemnify the other (the
"Indemnitee"), without prejudice to any other rights or
remedies available to the Indemnitee, against:-
25.1.1 all loss of or damage to any property belonging to
the Indemnitee to the extent arising as a result of
the negligence or willful acts or omissions of the
Indemnifier, its employees, agents, or
sub-contractors (or their employees or agents) in
relation to the performance of the Contract;
25.1.2 all claims and proceedings, damages, costs and
expenses arising or incurred in respect of:
i. death or personal injury of any employee of
the Indemnifier, its agents or
sub-contractors (or their employees or
agents) employed in or in connection with
the performance of the Contract, except to
the extent caused by the negligence or
willful default of the Indemnitee; or
ii. death or personal injury of any other person
to the extent arising as a result of the
negligence or willful acts or omissions of
the Indemnifier, its employees, agents or
sub-contractors (or their employees or
agents) in relation to the performance of
the Contract; or
iii. loss of or damage to any property to the
extent arising as a result of the negligence
or willful acts or omissions of the
Indemnifier, its employees, agents or
sub-contractors (or their employees or
agents) in relation to the performance of
the Contract;
25.1.3 all claims and proceedings under XX in relation to
the Work and all related damages, costs and expenses.
25.2 The provisions of this Condition 25 shall survive the expiry
or termination of the Contract.
26. ELECTRONIC REPOSSESSION
26.1 Without prejudice to its other liabilities under the Contract,
LCS shall indemnify XX against all claims, demands, damages,
costs and expenses suffered by XX and all damage or loss to XX
property arising from any Electronic Repossession.
26.2 For the purpose of this condition, "Electronic Repossession"
shall mean any function (but excluding viruses) in the
Software which prevents XX from continuing to use the
Software.
27. XX PROPERTY
27.1 In respect of all XX Supplied Items and other property of XX
in the possession or control of LCS, LCS shall:
27.1.1 keep them safe, in good condition and clearly marked
as the property of XX; and
27.1.2 notify XX of any defect or deficiency in them within
14 days of receipt and realization; and
27.1.3 use them only as is required for the performance of
the Contract and return them to XX when no longer
required or requested by XX except if to do so would
adversely affect LCS's ability to perform its
obligations under the Contract in a timely fashion;
and
27.1.4 if LCS (or any third party in possession of them)
becomes insolvent, notify XX, inform any relevant
official that they are the property of XX, and allow
XX access to repossess them.
27.2 The provisions of this Condition 27 shall survive expiry or
termination of the Contract.
28. WAIVER
28.1 No delay, neglect or forbearance on the part of either party
in enforcing against the other any provision of the Contract
shall be deemed to be a waiver or in any way prejudice any
rights of the other under the Contract.
28.2 No waiver by either party shall be effective unless made in
writing.
28.3 No waiver by either party of a breach of the Contract shall
constitute a waiver of any subsequent breach.
29. ENFORCEABILITY
The invalidity or unenforceability for any reason of any provision of
the Contract shall not prejudice or affect the validity or
enforceability of its other provisions.
30. HEADINGS AND INTERPRETATION
The headings to these Conditions are for ease of reference only and
shall not affect their interpretation, and references to the words
"includes" or "including" are to be construed without prejudice to the
generality or limitation to the preceding words.
31. ENTIRE AGREEMENT
The Contract shall be the entire agreement between XX and LCS in
respect of the subject matter of the Contract and no prior
negotiations, representations, or agreements in relation to such
subject matter shall have effect. Nothing in this Condition 31 affects
the liability of either party for fraud.
32. LAW AND JURISDICTION
The Contract shall be governed by XX law and subject to the
non-exclusive jurisdiction of the XX courts.
33. ORDER OF PRECEDENCE
To the extent which the following documents form part of or apply to
the Contract, they shall in the case of conflict have the order of
precedence in which they are listed below:
1. the Conditions of the Contract
2. the Appendices to these Conditions
34. LIMITATION OF LIABILITY
34.1 The following provisions of this Condition 34 set out the
entire liability of each party to the other, including any
liability for the acts and omissions of its employees, agents,
and contractors in respect of:
34.1.1 any claim for an indemnity under this Contract;
34.1.2 any breach of its contractual obligations arising
under this Contract;
34.1.3 any representation statement or tortious act or
omission including negligence arising under or in
connection with this Contract; and
34.1.4 any breach of statutory duty; any and all other
liability is excluded; provided that nothing in this
Contract affects the liability of either party to the
other for death or personal injury or for fraud.
34.2 Anything falling within Condition 34.1 except non-payment by
XX of the Contract Price or any part thereof shall for the
purposes of this Condition 34 be known as an "Event of
Default".
34.3 The total liability of each party to the other arising from or
in connection with any Event of Default of that party shall be
limited to the sum of XX per Event of Default and in no
circumstances shall the total liability of that party for all
Events of Defaults under this Contract exceed XX.
34.4 In determining the extent or quantum of any liability of
either party to the other no account shall be taken in any
circumstances of any special, indirect, consequential or pure
economic loss, including loss of XX, profits, goodwill, or
loss of data, whether or not the party in question has been
notified of the prospect of such loss or damage.
34.5 These Conditions set out all the express terms of this
Contract concerning the quality, manner and time for
performance of the Work and the quality of the LCS Background
Information and the Foreground Information, and all implied
conditions, warranties or undertakings (other than those
relating to the title of any goods to be supplied as part of
the Work) which would be incorporated in this Contract in the
absence of this Condition 34.5 by reason of statute, common
law or otherwise are excluded, including implied conditions,
warranties or undertakings relating to merchantable or
satisfactory quality or fitness for purpose of the LCS
Background or the Foreground Information.
34.6 Neither party shall be liable to the other in respect of any
Event of Default unless the recoverable amount in respect of
that Event of Default exceeds XX and the other has served
notice of the same within 1 year of the date the other became
aware of the circumstances giving rise to the Event of Default
or the date when it ought reasonably to have become so aware.
34.7 The provisions of this Clause 34:
34.7.1 are in addition to XX's liability for non-payment of
the Contract Price or any part thereof; and
34.7.2 survive expiry or termination of the Contract.
35. COUNTERPARTS
This Contract may be executed in two counterparts, both of which taken
together constitute one single agreement between the parties.
36. NO THIRD PARTY BENEFICIARIES AND RELEVANT CONTRACTORS
36.1 This Contract has been made for the benefit of the parties to
it only and is not intended to confer any legal rights or
benefits on any third party.
36.2 For the avoidance of doubt, under no circumstances shall LCS
be jointly or joint and severally liable with any Relevant
Contractor for the supply of any goods or services to XX.
<PAGE>
AS WITNESS the hands of the duly authorized representatives of the parties have
executed this Contract on the date stated above.
SIGNED for and on behalf of
XX
in the presence of:
By: XX
Name: XX
Title XX
SIGNED for and on behalf of
LCS INDUSTRIES, INC.
in the presence of:
By: /s/ Arnold J. Scheine
Name: Arnold J. Scheine
Title CEO & President
