SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A-1
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
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: March 5, 1996 By: /s/PAT R. FRUSTACI
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Pat R. Frustaci
Vice President - Finance
INDEX TO EXHIBITS
Exhibit
No. Description
1 Redacted Contract between LCS Industries, Inc.
and a major non-U.S. communications company
<PAGE>
DATED September 1, 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>
LIST OF APPENDICES
A XX Dependencies
B XX Requirements
C Computer Platform
D Project Plan at the Commencement Date
E Scope of Work
F Change Control Proforma
G Security Requirements
H Confidentiality Agreement
I Data Protection Codes of Conduct
<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:
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
estimatesfrom 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>
<CAPTION>
<S> <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 June 30,
1998 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 US$2,000,000 per Event of Default and in no circumstances
shall the total liability of that party for all Events of Defaults
under this Contract exceed US$10,000,000.
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
