Master Services Agreement

Master Services Agreement

This Master Services Agreement (the “Agreement”) is entered into as of the ______ day of _______, 20___ (“Effective Date”) by and between Verity IT, LLC, an Illinois limited liability company, with an office at 2001 Butterfield, Suite 102, Downers Grove, Illinois 60515 (“Verity IT”) and __________ a __________ corporation, with an office at __________ (“Client”).

WHEREAS, Verity IT is in the business of providing technology advisory and consulting services (“Services”), and Client desires to engage Verity IT to provide such Services and Verity IT desires to be so engaged.

THEREFORE, in consideration of the mutual agreements below, and intending to be legally bound, the parties agree:

1. Services

1.1       Services under Statement(s) of Work.  Client is engaging Verity IT to provide Services as described in the relevant, duly executed statements of work, which shall be incorporated herein and made part of this this Agreement (hereinafter, “SOWs”).  Neither party will have any obligation with respect to any draft SOW unless and until it is executed by both parties.  Except as otherwise provided herein, if any of the terms or conditions of this Agreement conflict with any of the terms or conditions of any SOW, the terms or conditions of such SOW will control solely with respect to the Services covered under such SOW.

1.2       Cooperation.  At all times during the term, Client shall promptly and fully cooperate with Verity IT, and shall promptly make competent, qualified personnel available to assist and answer questions of Verity IT, as necessary and appropriate and as reasonably requested by Verity IT.  Verity IT shall bear no liability or otherwise be responsible for delays in the provision of the Services or any portion thereof caused by Client’s failure to timely provide information requested by Verity IT.

1.3       Third Party Equipment.  Except as expressly set forth in any SOW, Verity IT has not provided an estimate for, and is not responsible for, the selection or procurement of any hardware or equipment, operating system software, database software, or other third party software, connectivity, data transport, or other IP rights required to perform the Services.  Client is solely responsible for the selection, procurement, costs, and expenses of acquiring the same, and any other infrastructure required to support Client’s use of the Services.

1.4       Verity IT may, in its sole and absolute discretion, decline provision of Service to Client and to immediately suspend, without notice, access to the Services and applicable products to Client in the event Client (i) is in violation of the SOW and/or Agreement (ii) poses a threat to the security or operation of the Services and related products and/or Verity IT and/or its licensors system; or (iii) expose Verity IT to potential damages.

2. Confidentiality

2.1       “Confidential Information” includes (i) all information related to the business of one party (“Disclosing Party”) and any of its affiliates, clients and other third parties, to which the other party (“Receiving Party”) has access, whether in oral, written, graphic or machine-readable form, in the course of or in connection with the Services; (ii) all Work Product as described in Article 3 below; (iii) all notes, analyses and studies prepared by the Receiving Party incorporating any of the information described in this Article 2, and (iv) the terms and conditions of this Agreement.

2.2       The Receiving Party will keep the Confidential Information confidential, and may disclose the Confidential Information to its officers, directors, employees, agents and subcontractors (and their employees) (“Representatives”) who have a need to know such Confidential Information solely in connection with this Agreement.  The Receiving Party will cause such Representatives to comply with this Agreement and will assume full responsibility for any failure to comply with the terms of this Agreement.  The Receiving Party will not transfer or disclose any Confidential Information to any third party without the Disclosing Party’s prior written permission and without such third party having a contractual obligation (consistent with this Article 2) to keep such Confidential Information confidential.  The Receiving Party will not use any Confidential Information for any purpose other than to perform its obligations under this Agreement.

2.3       Exclusions.  Confidential Information does not include information that: (i) is obtained by the Receiving Party from the public domain without breach of this Agreement and independently of the Receiving Party’s knowledge of any Confidential Information; (ii) was lawfully and demonstrably in the possession of the Receiving Party prior to its receipt from the Disclosing Party; (iii) is independently developed by the Receiving Party without use of or reference to the Disclosing Party’s Confidential Information; or (iv) becomes known by the Receiving Party from a third party independently of the Receiving Party’s knowledge of the Confidential Information and is not subject to an obligation of confidentiality.

2.4       Legal Requirements.  If the Receiving Party is requested or required to disclose any of the Disclosing Party’s Confidential Information under a subpoena, court order, statute, law, rule, regulation or other similar requirement (a “Legal Requirement”), the Receiving Party will, if lawfully permitted to do so, provide prompt notice of such Legal Requirement to the Disclosing Party so that the Disclosing Party may seek an appropriate protective order or other appropriate remedy or waive compliance with the provisions of this Agreement.  If the Disclosing Party is not successful in obtaining a protective order or other appropriate remedy and the Receiving Party is legally compelled to disclose such Confidential Information, or if the Disclosing Party waives compliance with the provisions of this Agreement in writing, the Receiving Party may disclose, without liability hereunder, such Confidential Information solely to the extent necessary to comply with the Legal Requirement.

2.5       In the event that the Receiving Party learns or has reason to believe that Confidential Information has been disclosed or accessed by an unauthorized party, the Receiving Party will immediately give notice of such event to the Disclosing Party.

2.6       Disposition of Confidential Information on Termination.  Upon termination of this Agreement or upon the Disclosing Party’s written request, the Receiving Party will return to the Disclosing Party all copies of Confidential Information already in the Receiving Party’s possession or within its control.  Alternatively, with Disclosing Party’s prior written consent, the Receiving Party may destroy such Confidential Information; provided that the Confidential Information is (i) destroyed in accordance with applicable law, rule or regulation and (ii) is rendered unreadable, undecipherable and otherwise incapable of reconstruction, in which case an officer of the Receiving Party will certify in writing to the Disclosing Party that all such Confidential Information has been so destroyed.

2.7       Each party acknowledges that a breach of this Article 2 may result in irreparable and continuing damage to the Disclosing Party for which monetary damages may not be sufficient, and agrees that the Disclosing Party will be entitled to seek, in addition to its other rights and remedies hereunder or at law, injunctive or all other equitable relief, and such further relief as may be proper from a court of competent jurisdiction.

3.               Ownership

3.1               Intellectual Property.  “IP” means all intellectual property including without limitation all patents, inventions, trademarks, service marks, trade names and trade dress, copyrights and copyrightable works, trade secrets, know-how, design rights and database rights.

3.2               Ownership of Work Product.  All works, materials, software, documentation, methods, apparatus, systems and the like prepared, developed, conceived, or delivered as part of or in connection with the Services, and all tangible embodiments thereof, shall be considered “Work Product”.  Verity IT shall have exclusive title and ownership rights including all IP rights, throughout the world in all Work Product.  Notwithstanding anything herein to the contrary, in the event (i) such Work Product is conceived, developed, compiled, assembled and/or prepared by Verity IT specifically and uniquely for Client in accordance with the terms of this Agreement and/or SOW, and (ii) such Work Product specifically includes Client Content, then such Work Product shall be deemed to be and referred to herein as “Client Work Product”.  Upon Verity IT’s receipt of payment in full for the fees set forth in the applicable SOW, Verity IT hereby assigns and agrees to assign to Client all of Verity IT’s right, title and interest, including IP and ownership rights, in the Client Work Product developed in connection with any SOW.  To the fullest extent permissible by applicable law, all copyrightable aspects of the Client Work Product developed in connection with any SOW will be considered “works made for hire” (as that term is used in Section 101 of the U.S. Copyright Act, as amended).  Client hereby grants to Verity IT a perpetual, irrevocable, royalty-free license to publish, reproduce, distribute and display the Client Work Product and Client’s IP solely in connection with the provision of the Services.

3.3               Pre-Existing Materials.  Verity IT or its licensors retain, on an exclusive basis, all right, title and interest, and all IP rights, throughout the world in and to any and all Pre-Existing Materials.  Pre-Existing Materials shall be considered Verity IT’s Confidential Information. “Pre-Existing Materials” means, in any form or media, any software (in source code or object code format) libraries, tools, products, algorithms, subroutines, applets, know-how, ideas, derivative works, techniques, materials, architecture, methodologies, concepts, trade secrets and other proprietary information, any other pre-existing materials, and records or documentation of each of the foregoing, that were owned or licensed by Verity IT independent of or prior to entering into the applicable SOW or developed independently of the SOW.  Verity IT hereby grants, subject to Verity IT’s receipt of full payment under each applicable SOW, to Client a non-exclusive, non-transferrable, royalty-free, and limited license under Verity IT’s IP rights in and to the Pre-Existing Materials to use solely those Pre-Existing Materials actually embedded or included within such Work Product, solely for the purposes set forth in the applicable SOW, solely as so embedded or included in conjunction with the Services.

3.4               Restrictions on use of Pre-Existing Materials and/or Work Product.

(a)                No right is granted to Client hereunder to permit, authorize, license and/or sublicense any third party to view and/or use the Pre-Existing Materials and/or Work Product.

(b)                No right is granted to Client hereunder to (and/or to authorize others to) sell, distribute and/or otherwise transfer the Pre-Existing Materials and/or Work Product.

(c)                No right is granted to Client to tape or permit the taping of any training program or engagement related to Pre-Existing Materials and/or Work Product and, except as otherwise set forth in a SOW, Client shall not provide any training with respect to the Pre-Existing Materials and/or Work Product without the prior written consent of Verity IT.

Client shall not use the Pre-Existing Materials and/or Work Product in any manner not specifically permitted under this Article 3.

3.5               Verity IT Trademarks. Verity IT retains all right, title and interest in and to all trademarks, service marks, and trade names owned or licensed by Verity IT, and no right, title or interest in or to Verity IT’s trademarks, service marks, or trade names is granted to Client hereunder.  All uses of Verity IT’s trademarks, service marks, or trade names shall inure solely to the benefit of Verity IT or its licensors.

3.6               Open Source.  OSS may be included in, or necessary for Client to use, the Work Product and/or Client Work Product. Verity IT may (i) obtain such OSS on Client’s behalf, (ii) incorporate such OSS into the Work Product and/or Client Work Product, and (iii) submit back to open source libraries any improvements made to the OSS during the course of performing the Services, to the extent such submissions do not violate the confidentiality obligations set forth herein.  Notwithstanding anything herein to the contrary, OSS is licensed to Client under such OSS’s own applicable license terms. Client is responsible for complying with any third party terms and conditions applicable to such OSS.  The OSS license terms shall take precedence over this Agreement and/or SOW to the extent that this Agreement and/or SOW imposes greater restrictions on Client than the applicable OSS license terms, solely with respect to such OSS.  “OSS” means software components that are licensed under a license approved by the ‘Open Source Initiative’ or similar open source or freeware license and which are included in, embedded in, utilized by, provided or distributed with the Work Product.

3.7               Client Content.  “Client Content” means any elements of text, graphics, images, photos, designs, artwork, logos, video, trademarks, service marks, data, software and other materials and/or content which Client provides in connection with any Services.  Client Content excludes any content available in the public domain; and any content owned or licensed by Verity IT, whether in connection with providing Services or otherwise.  Client hereby grants Verity IT a worldwide, non-exclusive right and license to reproduce, distribute and display the Client Content solely as necessary to provide the Services.  Client represents and warrants that all Client Content is owned by Client, or that Client has permission from the rightful owner to use each of the elements of Client Content; and that Client has all rights necessary for Verity IT to use the Client Content in connection with the Services.  Client and its licensors retain title, all ownership rights, and all IP rights, in and to the Client Content, and reserve all rights not expressly granted to Verity IT hereunder. Verity IT will not take any action that jeopardizes Client’s proprietary rights or acquire any rights in the Client Content.  When accessing and using the Services, Client and its employees and agents shall not include Client Content that is obscene, offensive, inappropriate or that violates any applicable law or regulation, contract, or privacy or other third party right, or that otherwise exposes Verity IT and/or its licensors or its resellers to civil or criminal liability.

4. Fees

4.1       Fees.  In consideration of the provision of the Services described herein and/or in any SOW, Client agrees to pay Verity IT the fees set forth in the duly executed SOW.   All fees due and payable by the Client to Verity IT under this Agreement must be paid in full without any deduction, set-off, counterclaim or withholding of any kind unless required by law.  The fees reflected in such SOW(s) shall be in U.S. dollars.

4.2       Taxes.  All fees due and payable under this Agreement are exclusive of taxes, which will be added at the prevailing rate from time to time.

4.3       Expenses.  Reasonable travel and out-of-pocket expenses are not included in the fees set forth in the relevant SOW’s and will be invoiced separately.

4.4       Savings, Credits & Refunds:  If Verity IT identifies any savings, credits and/or refunds not previously expressly identified in writing or obtained by Client, Client shall pay Verity IT a 50% fee for procurement of each credit, refund and/or identified and verified savings. Savings can constitute but not limited to invoicing or contractual inconsistencies and errors.

Savings Not Guaranteed; Estimates.  Although Verity IT does not guarantee savings, Verity IT will estimate (but such estimates do not become guarantees) savings when applicable and other benefits to client for all actions recommended.  V96 will provide Client with a “cost savings/credits” summary periodically (e.g., quarterly) or on an “as needed” basis.  Any fee associated with this service will be verified in writing prior to or at the time of invoicing by Verity IT.

4.5       Invoices. Verity IT will provide Client with an invoice for fees that become due hereunder.  Unless otherwise set forth in an SOW, each invoice shall be due and payable by Client within thirty (30) days after Client’s receipt of such invoice.  Invoices submitted by Verity IT to Client are deemed accepted and approved unless disputed by Client in accordance with the terms and conditions contained herein.

4.6       Late Payments and Suspension.  If the Client does not make payment on or before the date on which it is due to be paid, simple interest will be due and payable and calculated daily at a rate of three percent (3%) per month (or such lower rate as shall be the highest permissible contract rate under applicable law).  In the event Verity IT receives payment from Client more than seven (7) days after the date of the invoice, Company may, in its sole discretion, either (i) suspend Services until payment is made in full without incurring any liability or (ii) terminate the applicable SOW, or any remaining balance thereof. In either event, Client shall remain liable to pay for any products already received, and any services already performed.  If Client has not paid an invoice for more than sixty (60) days, Verity IT may refer collection of the unpaid amount to an attorney or collections agency.  If Client’s unpaid invoices are referred to an attorney or collections agency, Client shall pay all reasonable attorney’s fees or collections agency fees related thereto.

4.7       Invoice Dispute Process.

(a)        If Client has a bona fide dispute in relation to any portion of the fees invoiced, Client must pay all invoiced fees and shall provide notice to Verity IT in writing within fourteen (14) calendar days from the date of the invoice.  Such notice shall set forth the details surrounding the dispute.  The parties shall discuss the disputed fees and shall use commercially reasonable efforts to resolve the dispute within twenty (20) calendar days of such initial meeting.  If the dispute is not resolved within such time period, then either party may at any time thereafter submit such dispute to a court of competent jurisdiction as set forth in Article 12 herein.

(b)     When the dispute is resolved, (a) if a payment is owed to Verity IT, such payment shall be made within five (5) calendar days of the resolution of such dispute or (b) if an amount is owed to Client, Verity IT, in its sole discretion, shall either (i) credit such amount to Client’s account within twenty (20) calendar days of the resolution of such dispute (or within such other timeframe as mutually agreed upon by the parties in writing), or (ii) apply a pro-rated credit amount to Client’s account for the remainder of the then-current term.

(c)     For avoidance of doubt, all negotiations pursuant to this Section 4.6 shall be treated as confidential compromise and settlement negotiations.  Nothing said or disclosed, nor any document produced, in the course of such negotiations which is not otherwise independently discoverable shall be disclosed to any third party nor offered or received as evidence or used for impeachment or for any other purpose in any current or future arbitration or litigation.

(d)     Client waives the right to dispute any fees not disputed within fourteen (14) days of the date of the applicable invoice.

5. Term

5.1       Term.  This Agreement shall commence on the Effective Date and will continue until terminated in accordance with the terms and conditions contained herein.

5.2       SOWs.  The Services will commence on the date set forth in a SOW and continue thereafter as set forth in such SOW, unless otherwise terminated earlier in accordance with the terms and conditions of such SOW or this Agreement.

6. Termination

6.1       Termination for Breach.  If a party materially breaches this Agreement and/or any SOW (the “Defaulting Party”), and the Defaulting Party does not cure such breach within thirty (30) days after its receipt of written notice of material breach, the non-defaulting party may terminate this Agreement and/or the relevant SOW upon written notice to the Defaulting Party.  Termination of a SOW and/or this Agreement will be without prejudice to any other rights and remedies that the non-defaulting party may have under this Agreement or at law or in equity.

6.2       Termination for Convenience.  Unless otherwise set forth in an applicable SOW, Client or Verity IT may terminate this Agreement for convenience upon thirty (30) days prior written notice to the other party; provided that Verity IT is not providing any Services pursuant to a SOW.

6.3       Effect of Termination.

(a)       In the event Verity IT terminates this Agreement pursuant to Section 6.2 (Termination for Convenience) or if Client terminates this Agreement and/or any SOW pursuant to Section 6.1 (Termination for Breach), upon termination Client will pay all outstanding fees, charges and expenses incurred through the effective date of termination.

(b)        In the event Client terminates this Agreement pursuant to Section 6.2 (Termination for Convenience), Verity IT terminates this Agreement and/or any SOW pursuant to Section 6.1 (Termination for Breach), upon termination Client will pay, all of the outstanding fees, charges and expenses owed through the effective date of termination and as liquidated damages, Company shall further pay the remaining fees, charges and expenses owed through the term of this Agreement and/or relevant SOW, if applicable, as if this Agreement and/or SOW had not been terminated.

(c)        Upon any termination, Client’s right to use and access the Services shall immediately cease.

7. Representations & Warranties

7.1       Each party represents and warrants that it (i) is a duly organized, validly existing and in good standing under the laws of the State of organization; (ii) has the power and authority to enter into this Agreement and (iii) has full authority and sufficient rights to grant and convey the rights granted to the other party under this Agreement.

7.2       Verity IT warrants that Services will performed in a good and workmanlike manner in accordance with applicable industry standards and practices.

7.3       Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, VERITY IT AND/OR ITS LICENSOR DOES NOT REPRESENT AND/OR WARRANT THAT (I) THE SERVICES, THE PRODUCTS, ANY PRE-EXISTING MATERIALS, WORK PRODUCT, CLIENT WORK PRODUCT, AND/OR THE CLIENT’S TECHNOLOGY ENVIRONMENT WILL BE UNINTERRUPTED AND/OR ERROR-FREE, (II) THE CLIENT CONTENT WILL NOT BE LOST OR CORRUPTED IN CONNECTION WITH THE PERFORMANCE OF THE SERVICES, AND/OR (III) SUCH SERVICES, PRODUCTS AND EQUIPMENT ARE THE MOST ADVANCED, AVAILABLE, AND/OR WILL REMAIN ‘CURRENT’ FOR ANY PERIOD OF TIME.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND/OR FITNESS FOR A PARTICULAR PURPOSE. NO ORAL OR WRITTEN INFORMATION, MARKETING OR PROMOTIONAL MATERIALS, OR ADVICE GIVEN BY VERITY IT AND/OR ITS LICENSORS SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THE EXPRESS WARRANTIES PROVIDED HEREIN.  CERTAIN PRODUCTS MAY BE USED TO ACCESS AND TRANSFER INFORMATION OVER THE INTERNET. CLIENT ACKNOWLEDGES AND AGREES THAT VERITY IT AND/OR ITS LICENSORS DO NOT OPERATE OR CONTROL THE INTERNET AND THAT: (A) VIRUSES, WORMS, TROJAN HORSES, OR OTHER UNDESIRABLE DATA OR SOFTWARE; OR (B) UNAUTHORIZED USERS (E.G., HACKERS) MAY ATTEMPT TO OBTAIN ACCESS TO AND DAMAGE CLIENT CONTENT, WEB‑SITES, COMPUTERS, OR NETWORKS. VERITY IT AND/OR ITS LICENSORS WILL NOT BE RESPONSIBLE FOR THOSE ACTIVITIES. FURTHER, EACH PARTY DISCLAIMS ALL LIABILITY AND INDEMNIFICATION OBLIGATIONS FOR ANY HARM OR DAMAGES CAUSED BY ANY THIRD-PARTY HOSTING PROVIDERS.

7.4       Exclusive Remedy.  Client’s sole and exclusive remedy and Verity IT’s sole and exclusive liability for any breach of the warranty set forth in Section 7.2 shall be for Verity IT to re-perform the Services at no cost to Client.  This sole and exclusive remedy is available only if Verity IT is promptly notified in writing within thirty (30) days after the performance of such Services that do not conform to the warranty set forth in Section 7.2.  For avoidance of doubt, this Section shall not be deemed to limit either party’s rights or remedies under any other Section of this Agreement.

8. Limitation of Liability

EACH PARTY’S TOTAL AND CUMULATIVE LIABILITY FOR DIRECT DAMAGES ARISING OUT OF AND/OR IN CONNECTION WITH THIS AGREEMENT AND/OR ANY SOW SHALL IN NO EVENT EXCEED THE FEES PAID BY CLIENT TO VERITY IT UNDER THE APPLICABLE SOW THAT GAVE RISE TO SUCH CLAIM.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND/OR ANY SOW, IN NO EVENT WILL CLIENT OR VERITY IT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL AND/OR PUNITIVE DAMAGES (INCLUDING WITHOUT LIMITATION LOST PROFITS) EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  NOTWITHSTANDING THE FOREGOING, NO LIMITATION OR EXCLUSION OF EITHER PARTY’S LIABILITY WILL APPLY WITH RESPECT TO ANY CLAIMS ARISING OUT OF OR RELATING TO ARTICLE 2 ARTICLE 3, AND ARTICLE 9 OF THIS AGREEMENT AND/OR ITS WILLFUL MISCONDUCT AND/OR GROSS NEGLIGENCE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND/OR ANY SOW, THE EXCLUSIONS AND LIMITS STATED IN THIS AGREEMENT DO NOT APPLY TO ANY OF CLIENT’S OBLIGATIONS TO PAY FEES AND COSTS TO VERITY IT UNDER THIS AGREEMENT AND/OR ANY SOW.

9. Indemnification

9.1       Verity IT Indemnification Obligations.  Verity IT shall indemnify, defend and hold harmless Client and its officers, directors, employees, contractors and agents against any damages awarded in respect of any claims, judgments, actions, suits, proceedings, demands, liabilities, costs, losses, damages and expenses (including reasonable attorneys’ fees) (“Infringement Claim”) arising out of and/or relating to any claim that the Pre-Existing Materials constitute an infringement, violation, trespass, contravention and/or breach in the United States of any patent, copyright, trademark, license and/or other property or proprietary right of any third party, or constitutes the unauthorized use or misappropriation of any trade secret of any third party.  The indemnity in this Section 9.1 shall not apply (i) to an Infringement Claim arising from any modification of the Verity IT Pre-Existing Materials, and/or from the use of the Pre-Existing Materials in combination with any other items not provided by Verity IT, to the extent such modification and/or use in combination resulted in the Infringement Claim and/or (ii) if such Infringement Claim results from any breach of the Client’s obligations under this Agreement, and/or the use of the Pre-Existing Material other than in connection with this Agreement, and/or in a manner not reasonably contemplated by this Agreement.   In the event of an Infringement Claim, Verity IT shall be entitled at its own expense and option to either (a) procure the right for the Client to continue utilizing the Pre-Existing Materials which are at issue; (b) modify the Pre-Existing Materials to render such Pre-Existing Materials non-infringing; or (c) replace the Pre-Existing Materials with an equally suitable, functionally equivalent, compatible, non-infringing IP.

9.2       Client Indemnification Obligations.  Client, at its expense and to the maximum extent permitted by law, will indemnify, defend and hold harmless Verity IT and its licensors and any of their officers, directors, employees, agents, consultants and other representatives from all claims, judgments, actions, suits, proceedings, demands, liabilities, costs, losses, damages and expenses (including reasonable attorneys’ and experts’ fees and expenses as well as interparty damages caused by Client or third parties) and will reimburse such fees and expenses as they are incurred, including in connection with any claim and/or action threatened and/or brought against Verity IT, arising out of and/or relating to (i) any claim that the provision and/or utilization of any Client Content or any portion thereof constitutes an infringement, violation, trespass, contravention or breach of any patent, copyright, trademark, license or other property or proprietary right of any third party, or constitutes the unauthorized use or misappropriation of any trade secret of any third party; (ii) any claim that Client is not in compliance with any applicable law, rule, regulation, order of any governmental (including any regulatory or quasi-regulatory) agency or contract, including any financial disclosure or encryption law; (iii) Client’s unauthorized use of Verity IT’s Pre-Existing Materials, Services and/or Work Product; and/or (iv) any breach of Section 7.1(iii).

9.3       The indemnity set forth in this Article 9 shall only be given on condition that (i) the indemnified party gives notice to the indemnifying party of any claim immediately upon becoming aware of the same; (ii) the indemnified party gives the indemnifying party the sole right to conduct the defense of any claim or action, or the negotiation of any settlement, in respect of a claim and does not at any time admit liability or otherwise settle or compromise or attempt to settle or compromise the said claim or action except upon the express written instructions of the indemnifying party; and (iii) the indemnified party acts in accordance with the reasonable instructions of the indemnifying party and gives the indemnifying party such assistance as it shall reasonably require in respect of the conduct of the said defense including without prejudice to the generality of the foregoing the filing of all pleadings and other court processes and the provision of all relevant documents.

9.4       This Article 9 sets forth the indemnified party’s sole and exclusive remedy from the indemnifying party for any claim, demand, proceeding or action by a third party in relation to an Infringement Claim under Section 9.1 and 9.2(i).

10. Force Majeure

Notwithstanding any other provision of this Agreement, neither party is liable for any failure to perform, or delay in performing, any particular obligations under this Agreement where the failure or delay arises from any cause or causes beyond its reasonable control, including without limitation fire, flood, earthquake, elements of nature, epidemics, communication line failures, power failures, acts of God, acts of war, terrorism, riots, civil disorders or rebellions (“Force Majeure Event”).  In the event of a Force Majeure Event, the parties agree to meet and discuss how to resolve the issue. Either party may terminate this Agreement by giving the other party written notice if the other party fails to perform those obligations for one (1) month due to such Force Majeure Event.  This Section does not apply to Article 2, or any obligation to pay money, or any obligation that is unaffected by the Force Majeure Event.

11. Independent contractor

Verity IT is an independent contractor and will determine the method, details and means of performing the Services.  No party shall have the authority to bind, represent or commit the other.  Nothing in this Agreement shall be deemed or construed to create a joint venture or agency relationship between the parties for any purpose.  Nothing contained herein shall give or is intended to give any rights of any kind to any third persons.

12. Governing law, Venue, Language

This Agreement will be governed by, and construed in accordance with, the internal laws of the State of Illinois, without regard to its choice of laws principles.  The United Nations convention on contracts for the international sale of goods shall not apply to this Agreement.  The governing language for this Agreement shall be English, and no concurrent or subsequent translation of this Agreement into any language shall modify any term of this Agreement.  Any action related to or arising from this Agreement shall take place exclusively in the courts situated in the City of Chicago, Cook County, Illinois and the parties hereby submit to the venue of the courts situated therein.

13. Solicitation

13.1     Employees. During the term of this Agreement and for a period of one (1) year thereafter, Client shall not, without the prior written consent of Verity IT, directly, indirectly or through any other party solicit Verity IT’s employees. Notwithstanding the foregoing, either party may hire the other’s employees who respond to public advertisements.  In the event of a breach of this Article 13.1, the breaching party’s sole and exclusive liability and the non-breaching party’s sole and exclusive remedy shall be for the breaching party to pay the non-breaching party fifty percent (50%) of the employee’s first year salary.

13.2     Business Relationship.  Client agrees that during the term of this Agreement and for a period of one (1) year after the effective date of termination, Client shall not interfere in, or solicit or induce any change in or cessation of, the business relationship between Verity IT and any of its clients, independent contractors, agents, representatives, contract manufacturers, suppliers or investors.

14. Assignment

Client may not assign, as a result of a change of control or by operation of law or otherwise, its rights or obligations under this Agreement without the prior written consent of Verity IT.  This Agreement will be binding upon the parties and their respective legal successors and permitted assigns.

15. Notices

All notices and other communications given or made pursuant to this Agreement must be in writing, sent to the persons designated herein or to such other persons and addresses as the parties may designate from time to time and will be deemed to have been given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile or electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt.

16. Insurance

The parties will, and will cause its subcontractors to, during the term of this Agreement and/or SOW, at their sole cost and expense, obtain and maintain in full force and effect, a policy or policies of insurance covering (a) workers compensation insurance not less than the statutory minimum for any jurisdiction in which Services are to be performed; (b) broad form comprehensive general liability insurance in an amount of at least One Million Dollars ($1,000,000); and (c) Error and Omissions Insurance in an amount of at least One Million Dollars ($1,000,000).  Nothing in this Article 16 will be construed as limiting either party (or any subcontractor’s and/or agent’s) liability to the other party and/or any third party.  The mere purchase and existence of insurance does not reduce and/or release either party from liability incurred and/or assumed within the scope of this Agreement.   The parties’ obligation to maintain insurance coverage shall be in addition to, and not in substitution for, the party’s other obligations hereunder and liability shall not be limited to the amount of coverage required hereunder.  Upon request, the other party shall provide a certificate of insurance evidencing the amounts set forth herein within ten (10) days after such request.

17. General

17.1     No Waiver by Conduct.  No waiver of any of the terms of this Agreement and/or any SOW will be valid unless in writing and designated as such.  Any forbearance or delay on the part of either party in enforcing any of its rights under this Agreement will not be construed as a waiver of such right to enforce same for such occurrence or any other occurrence.

17.2     Severability.  If any one or more of the provisions of this Agreement are for any reason held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement will be unimpaired and will remain in full force and effect.

17.3     Counterparts; Method of Amendment.  This Agreement, each SOW and any amendments hereto and/or thereto may be executed in counterparts and will not be effective or enforceable unless and until it is executed with the signature of an authorized representative of each of the relevant entities.  The exchange of a fully executed Agreement by fax, electronic or computer image shall be sufficient to bind the parties to the terms and conditions of this Agreement and signatures affixed hereto shall be considered for all purposes as originals.

17.4     Headings.  The headings and titles of the paragraphs of this Agreement are not part of this Agreement, but are for convenience only and are not intended to define, limit or construe the contents of the provisions contained herein.

17.5     Recitals.  The recitals are hereby incorporated into the body of this Agreement for all intents and purposes as if fully set forth herein.

17.6     Accrued Rights.  The termination of this Agreement shall not effect or prejudice either party’s accrued rights hereunder.

17.7     Third-Party Beneficiaries.  Nothing contained in this Agreement is intended to confer nor shall confer upon any person (other than the parties hereto and their permitted assigns) any rights, benefits or remedies of any kind or character whatsoever, and no such person shall be deemed a third party beneficiary under or by reason of this Agreement.

17.8     Third Parties.  Verity IT may, in its sole and absolute discretion, use subcontractors or any other third party to perform the Services or process Client’s Confidential Information and/or Client Content.  Verity IT shall remain responsible for the performance of the Services by a subcontractor and Verity IT’s obligations hereunder.
17.9     Survival.  Any provision of this Agreement which, by its nature, would survive termination of this Agreement will survive any such termination on of this Agreement.

17.10   Entire Agreement.  This Agreement and each SOW constitutes the complete agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings between the parties.

17.11   Attorney Fees.  If either party brings legal action to enforce its rights under this Agreement, the prevailing party will be entitled to recover all fees, costs and expenses (including without limitation reasonable attorneys’ fees) incurred in connection with the action.

17.12   Export/Import Control Compliance. The sale, resale or other disposition of Services, products and any related technology or documentation may be subject to the export control laws, regulations and orders of the United States and may be subject to the export and/or import control laws and regulations of other countries. Client is solely responsible for complying with all such laws, regulations and orders and acknowledges that it shall not directly or indirectly export or import any products to any country to which such export or transmission is restricted or prohibited. Client understands and acknowledges its responsibility to obtain any license to export, re-export or import as may be required. Each party will at all times comply with all applicable laws and regulations relating to its performance of this Agreement and/or applicable SOW.

17.13   Construction.  The language in all parts of this Agreement will be construed, in all cases, according to its fair meaning, and not for or against either party hereto. The parties acknowledge that they have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement.