DEVELOPMENT SERVICES AGREEMENT
------------------------------
This Development Services Agreement (hereinafter the "Agreement"), is
hereby executed on this 26th day of January, 2005, by and between VSUS
Technologies, Inc., a Delaware corporation ("VSUS") having its principal
executive offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, c/o
Great Court Capital, and ViVaVu Systems Ltd., an Israeli corporation ("ViVaVu")
founded by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇, an individual residing in Israel ("Amiram") who,
prior to today, was the founder and Chief Executive Officer of VSUS.
WHEREAS, VSUS is the owner of software and related intellectual
property originally developed by an affiliate of ViVaVu and obtained by VSUS
when it acquired certain assets of that affiliate, and as further developed
through January 25, 2005 (the "Original IP");
WHEREAS, in settlement of a dispute between VSUS and Amiram, among
other consideration, Amiram is now leaving the employ of VSUS, and licensing
from VSUS the Original IP, and retaining exclusive rights, subject to the terms
and conditions of the various agreements being executed simultaneously herewith
(including without limitation the agreement in accordance with which the Source
Code is being placed into escrow (the "Source Code Escrow")), to access the
source code thereof, as the same may be supplemented and amended from time to
time (the "Source Code"), and acquiring ownership of certain Internet sites used
for hosting certain applications facilitated by the Original IP; and
WHEREAS, VSUS expects in the very near future to acquire 1stAlerts
Inc., a Delaware corporation ("First Alerts") and requires the assistance of
ViVaVu and its employees and/or agents to assist it in providing customer
service and support in the form of responding to e-mails from customers of First
Alerts regarding technical problems they encounter in using the services of
First Alerts (such responses referred to herein as "Customer Support Services");
and
WHEREAS, VSUS also may require the help of ViVaVu in developing
applications of the Original IP as may be useful in that business, as well as,
if VSUS so desires, to help VSUS develop ancillary businesses utilizing the
Original IP, subject to the Software License Agreement between the parties
hereto of even date herewith; which services may include software design,
programming, maintenance, training and/or debugging, among other things
(collectively, the "Development Services"), even though ViVaVu has cautioned
VSUS that such services may involve considerable expense and time delays,
depending upon the scope thereof; and may therefore not be economically prudent
(but nevertheless is willing to provide them if VSUS so demands); and
WHEREAS, VSUS also may wish to avail itself of ViVaVu's capability to
provide certain Internet-based email hosting services managed by ViVaVu (the
"Hosting Services"); and
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WHEREAS, ViVaVu is willing to provide such Development Services,
Customer Support Services and Hosting Services (collectively, the "Services")
upon the terms and subject to the conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties, intending to be legally bound, hereby covenant and agree as
follows:
1. PROVISION OF SERVICES
---------------------
(a) Development Service Orders. VSUS shall notify ViVaVu, not less than
ten (10) Israeli Business Days in advance, to request any Development Services
which VSUS may require from time to time. For purposes of this Agreement,
"Israeli Business Days" are Sunday through Thursday, except the entire Jewish
holidays of Passover and Sukkot, in both cases as observed in Israel. When and
if VSUS is unable to give the requisite notice, ViVaVu nevertheless will attempt
in good faith to accommodate VSUS's needs so long as doing so would not
materially interfere with other previously arranged business commitments. Such
notice shall specify the type of Development Services needed, including the
specific problems to be remedied (detailing the symptoms) and/or the features
desired to be added. ViVaVu then shall deploy, for the consideration and subject
to the terms and conditions set forth herein, the necessary personnel to perform
such Development Services for VSUS, commencing not later than the tenth (10th)
Israeli Business Day after the aforesaid notice.
If such Development Services require travel outside of Israel, an additional ten
(10) Israeli Business Days' notice (for a total of twenty days) shall be
required. In no event shall ViVaVu be required to have more than one of its
employees be deployed outside of Israel due to performance of the Services at
the same time. Also, in the event that more than 180 person-hours per month are
required of ViVaVu by VSUS, any additional time in such month shall be billed at
150% of the otherwise applicable rates, in deference of the additional expense
ViVaVu may incur due to hiring and training additional personnel.
(b) Personnel. ViVaVu and/or such of its employees or agents as Amiram
reasonably believes are competent to provide the necessary assistance to VSUS,
shall make themselves available to perform the Services hereunder. However, the
parties understand that ViVaVu will be attempting to establish its own business,
and cannot permit its employees to devote an unreasonable amount of time and
attention to the Services. Therefore, no personnel of ViVaVu shall be required
to devote more than 50% of their normal monthly time to the Services, nor shall
any such personnel be required to spend more than two consecutive weeks out of
every month outside of Israel performing the Services.
(c) Hosting Services. Hosting services shall be comprised of those
services described on ViVaVu's web site (▇▇▇.▇▇▇▇-▇▇▇▇.▇▇▇) from time to time
for business users. ViVaVu shall provide such Hosting Services for VSUS and its
affiliates, including service and support (even if the other hosting services
are provided at a location other than ViVaVu), at the rates and upon
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the terms and conditions to which the parties mutually may agree; except that
such rates, terms and conditions to VSUS shall be at least as favorable as the
most favorable rates, terms and conditions then offered by ViVaVu to any
unaffiliated third party business customer for comparable services.
(d) Customer Support Services. ViVaVu shall, at the request of VSUS,
perform Customer Support Services for First Alerts or any other affiliate of
VSUS, by responding directly to emails sent from customers of such affiliate,
and by return email offering technical advice and assistance to the extent
reasonably feasible by e-mail. Unless the parties mutually otherwise agree in
writing, telephone support is not contemplated as part of the Customer Support
Services. Upon request from First Alert, ViVaVu shall train, at ViVaVu's
facility in Israel, a First Alert employee or agent to perform Customer Support
Services at First Alert (to the extent technically feasible to do so), provided
that ViVaVu shall not be responsible for providing any food, lodging or other
expenses of such person while in Israel, and shall be paid as Customer Support
Services for all time spent in such training, which shall be carried out, as
time reasonably permits, by the ViVaVu person who normally would perform the
Customer Support Services. ViVaVu shall charge VSUS the sum of Forty-Two Dollars
and Fifty Cents ($42.50) per hour for Customer Support Services, and may deploy
such of its personnel, during regular Israeli business hours, as Amiram
reasonably believes are appropriate to perform such functions, but in any event
shall use commercially reasonable efforts to respond to any such emails from
customers by the end of the following Israeli Business Day.
If additional personnel are required to perform the Customer Support Services,
ViVaVu shall so advise VSUS or its affiliate (as the case may be) and shall have
up to thirty (30) days to obtain each such additional person. At the
commencement of any Customer Support Service for an application (including that
of First Alerts) for which ViVaVu has not previously provided support, an
advance payment of One Thousand Dollars ($1,000.00) shall be paid to ViVaVu to
compensate it for necessary familiarization with the system. If ViVaVu is still
providing such support for that system six months later, then the $1,000 shall
be credited towards the fees due ViVaVu for such Customer Support Services in
the sixth month or thereafter.
(e) No Obligation to Share New Technology. The parties acknowledge that
ViVaVu, besides providing Services hereunder, expects to be primarily engaged in
development of his own technology and applications based upon the Original IP.
Nothing herein shall be deemed to oblige ViVaVu to disclose to VSUS, or to
utilize in rendering the Services, any such proprietary technology, know-how or
applications belonging to ViVaVu which is not contained within the Original IP
(even if it may be based upon it). VSUS may use other software engineers and
others, unaffiliated with ViVaVu, to develop various applications and technology
and, if such require adjustments to or recourse to the Source Code for
implementation or adjustment of any kind, ViVaVu shall make its personnel
available to perform such services, which shall be deemed Development Services
hereunder. If VSUS requires ViVaVu to solve a technological need for which
ViVaVu has developed its own solution, even if based upon the Original IP, it is
understood and agreed that ViVaVu shall have no obligation to do so, but instead
shall endeavor
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to devise a different solution therefor, even if less efficient or otherwise
less preferable than his own proprietary solution (provided that VSUS desires it
to do so as Development Services hereunder).
(f) Proprietary Rights to ViVaVu's Work. Work performed by ViVaVu for
VSUS hereunder, and paid for by VSUS on a timely basis, shall belong to VSUS
(subject to the restrictions contained in Section 7 hereof) and may be patented
or copyrighted by VSUS, if it so desires; subject to a non-transferable right on
the part of ViVaVu to use such technology in its own business and operations,
but not to transfer, assign or sublicense it to any third parties (other than
such sublicense as may be necessary to use it internally for the benefit of
customers for whom ViVaVu is providing services). ViVaVu shall cooperate with
VSUS in any such patenting or copyrighting, provided that its employees' time in
doing so is paid for at the rates specified herein.
(g) Professional Standards. ViVaVu hereby covenants and agrees that the
Services performed hereunder by its employees and/or agents shall be performed
in good faith to the best of their abilities, with the same degree of care and
professionalism that they devote to ViVaVu's own business efforts. Anything
herein to the contrary notwithstanding, however, simple and unintentional
negligence shall not constitute a breach of this agreement.
2. PRICING AND PAYMENT FOR SERVICES
--------------------------------
(a) Pricing for Development Services. Development Services shall be
billed to VSUS and its affiliates at rates ranging from $75 per hour for the
most junior personnel to $200 per hour for senior personnel such as Amiram
himself, which rates may change on a yearly basis. Necessary travel time outside
of Israel will be billed at the same rates as time spent on the Development
Services; provided that no such travel shall be incurred on behalf of VSUS
unless VSUS is informed of same in advance and is willing to incur that expense.
Notwithstanding the above rates, if at any time ViVaVu extends lower rates than
these to regular unaffiliated customers of services similar to the Development
Services (other than services ancillary to Hosting Services), VSUS then shall
have the benefit of such lower rates for so long as ViVaVu offers them to any
such unaffiliated customer.
(b) Travel & General Business Expenses. VSUS will be responsible for all
travel and reasonable general business expenses for all on-site Development
Services which it requests of ViVaVu personnel. ViVaVu will invoice VSUS the
actual cost of these expenses. Such expenses are likely to include airfare,
hotel, car rental, taxis, and meals, among other things.
(c) Payment Procedures. Hosting Services shall be paid in the same manner
required of ViVaVu's public business customers for such services, from time to
time. Any other Services shall be paid as follows: invoices shall be rendered on
a weekly basis by ViVaVu (or such less frequent basis as it may decide), and
shall be paid within ten (10) days of their receipt by VSUS; provided that,
prior to any trip outside of Israel at the request and for the benefit of VSUS,
an
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amount equal to ViVaVu's good faith estimate of the reasonable expenses of such
trip, plus half of the estimated time charges therefor, shall be paid in advance
by VSUS at least ten (10) business days prior to such trip. Interest shall
accrue on all such amounts not paid by VSUS at a rate, calculated upon the
unpaid balance, of the lesser of (i) l% per month or (ii) the highest rate
allowed by applicable law. ViVaVu may refuse to provide Services hereunder while
any amounts due for prior Services remain unpaid, and no such refusal shall
constitute a breach hereof.
3. WARRANTY AND INDEMNITY
----------------------
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE SERVICES, AND ANY
SOFTWARE DELIVERED IN ACCORDANCE THEREWITH, AND ANY AMENDMENTS OR IMPROVEMENTS
TO THE SOURCE CODE, ARE BY THEIR NATURE "AD HOC" AND THEREFORE NO WARRANTY OR
ASSURANCE OF SUCCESS CAN BE PROVIDED. THEREFORE, ViVaVu MAKES NO WARRANTIES,
EITHER EXPRESS OR IMPLIED, AS TO THE SUCCESS OF ANY SERVICES OR THE UTILITY,
ROBUSTNESS, EFFICICIOUSNESS OR SATISFACTORY PERFORMANCE OF ANY SOFTWARE
RESULTING THEREFROM OR OTHERWISE FURNISHED BY ViVaVu; AND IN NO EVENT, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, SHALL ViVaVu BE LIABLE FOR ANY IMPLIED
WARRANTY WITH RESPECT TO SUCH SERVICES AND/OR SOFTWARE, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR
PURPOSE. THIS DISCLAIMER SHALL BE IN ADDITION TO, AND NOT SUPERSEDING, ANY
DISCLAIMERS REGARDING THE HOSTING SERVICES CONTAINED ON ViVaVu's WEB SITE IN
CONNECTION THEREWITH.
4. LIMITATION OF LIABILITY
-----------------------
NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL,
INDIRECT, OR THIRD PARTY DAMAGES (INCLUDING LOST PROFITS OR SAVINGS, BUSINESS
INTERRUPTION, LOSS OF DATA, OR SIMILAR CLAIMS), WHETHER IN AN ACTION IN CONTRACT
OR IN TORT, OR OTHERWISE, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL ViVaVu's LIABILITY FOR DAMAGES
HEREUNDER, IF ANY, EXCEED THE REVENUES ACTUALLY PAID TO ViVaVu BY VSUS FOR
SERVICES HEREUNDER.
5. CONFIDENTIALITY AND NONDISCLOSURE OBLIGATIONS
---------------------------------------------
(a) Obligations. During the term of this Agreement and for five (5) years
after the termination or expiration of this Agreement, neither party hereto
shall disclose to any third party or use any confidential technical, business or
market information disclosed to it by the other party hereto in the course of
performance of the Services (collectively, "Confidential Information"),
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except as expressly permitted in this Agreement, and will take all reasonable
measures to maintain the confidentiality of all Confidential Information in its
possession or control, which will in no event be less than the measures it uses
to maintain the confidentiality of its own information of similar importance
(b) Exceptions. "Confidential Information" does not include information
that: (i) is in or enters the public domain without breach of this Agreement;
(ii) a party lawfully receives from a third party without restriction on
disclosure and without breach of a nondisclosure obligation; or (iii) a party
develops independently, which it can document with written evidence.
6. TERM, TERMINATION; EFFECT OF TERMINATION
----------------------------------------
(a) Term. The initial term of this Agreement will commence as of the date
hereof and shall continue indefinitely for so long as ViVaVu has access to the
Source Code and this Agreement is not terminated as provided below.
(b) Termination. Either party may immediately terminate this Agreement
upon written notice to the other party if: (1) the other party commits or
permits any material breach of this Agreement and fails to remedy such breach
within thirty (30) days after written notice of such breach is given by the
non-breaching party; or (2) VSUS incurs a Bankruptcy Event.
As used herein, the term "Bankruptcy Event" shall mean that a party has filed
for protection under the bankruptcy laws of any jurisdiction, or is
involuntarily subjected to such laws or otherwise has been adjudicated a
bankrupt, or makes an assignment for the benefit of creditors, or voluntarily or
involuntarily becomes the subject of any similar laws, or has a trustee or
receiver appointed for its business or property and either acquiesces in same or
fails to remove such trustee or receiver within ninety (90) days, or has
substantially ceased business operations.
(c) No Damages in Account of Termination. In the event this Agreement is
terminated in accordance with the provisions hereof, neither ViVaVu nor VSUS
will be liable to the other because of such termination, including without
limitation for any damages, reimbursements, loss of prospective or anticipated
profits based upon any expenditure, investments of capital, leases, licenses or
commitments made by either ViVaVu or VSUS for any reason whatsoever. VSUS has no
expectation that it will obtain any anticipated amount of profits by virtue of
this Agreement.
(d) Survival. The provisions of Sections 5, 6 and 7 hereof shall survive
any termination or expiration of this Agreement.
7. LICENSING LIMITATIONS ON WORKS FOR HIRE
---------------------------------------
The parties agree that, notwithstanding the rights granted to VSUS with respect
to the results of the services in Section 1(e) hereof, VSUS agrees not to
provide or license such results to companies engaged in software development
which is competitive with ViVaVu or his then
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affiliated companies prior to December 31, 2006. Any such licensee of such
results shall agree with VSUS not to further sublicense or assign it without
permission of VSUS, which VSUS shall only grant after ascertaining that such
further sublicensee or assignee is not competitive with ViVaVu and cannot yet
further sublicense or assign it prior to December 31, 2006.
8. NON-ASSIGNABILITY
-----------------
This Agreement, and the obligation to perform Services hereunder, is
personal to VSUS and is non-assignable, but shall extend to any majority-owned
or controlled affiliates of VSUS, as well as any third party who acquires VSUS
by purchase of all or substantially all of its assets, stock purchase, merger,
consolidation or similar means.
9. SOURCE CODE ADJUSTMENTS
-----------------------
To the extent that ViVaVu modifies the Original IP in providing
development services to VSUS, ViVaVu shall modify the source code in escrow (but
need not do so with respect to improvements or modifications which the ViVaVu
may make on its own, for its own business, rather than in the process of
providing development services to VSUS).
10. REPRESENTATIONS AND WARRANTIES
------------------------------
The parties each further represent and warrants to each other than they
are not subject to any agreement, judgment or decree which would prohibit or be
violated by the execution or delivery of this Agreement or by the performance by
a party of its obligations hereunder.
11. MISCELLANEOUS
-------------
(a) This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof, and supersedes any and all written
and oral agreements and understandings with respect to the subject matter
hereof. This Agreement shall not be construed as creating an agency,
partnership, franchise, joint venture or other relationship between the parties
other than one of independent contractors. Neither party has the right to bind
the other, to act as agent for or with the other, or to conduct business in the
other's name or for the other's account. Neither party shall contract
obligations in the name of, or on behalf of, the other, nor make any
representation, guaranty or warranty with respect to the other's personnel or
services except as authorized in writing by such other party in advance. This
agreement shall be binding upon the parties and their respective successors and
assigns, but any such assignment shall not relieve a party hereto from
responsibility hereunder.
(b) This Agreement shall be modified or amended only by means of a
written agreement executed by both parties. No waiver of any part of this
Agreement shall be effective unless made in writing and signed by the waiving
party. No waiver of any breach of this Agreement shall
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constitute a waiver of any subsequent breach of the same or any other provision
of this Agreement.
(c) The parties recognize and acknowledge that they would not have any
adequate remedy at law in the event of a breach of this Agreement, and a party
may suffer irreparable damage and injury and/or damages which would be
practically impossible to ascertain, and accordingly the parties hereby agrees
that, in the event of a breach hereof, the other party, in addition to any other
available rights and remedies, shall be entitled to equitable relief with
respect thereto.
(d) In the event any provision of this Agreement shall be held invalid
or unenforceable, such provision shall be deemed modified in time, geography,
scope or otherwise, but only to the extent necessary to make it enforceable. To
effect such modification, the said provision shall be deemed supplemented and/or
rewritten (or deleted if such provision is incapable of such addition and/or
rewriting), whichever shall most fully preserve the intentions of the parties as
originally expressed herein.
(e) This agreement shall be governed by the law of the State of New
York but, in deference to the likely location of evidence and the convenience of
witnesses, any disputes or claims hereunder shall be resolved exclusively by the
courts of the State of Israel, and the parties hereby submit to the jurisdiction
of said forum.
(f) Notices and other communications hereunder shall be deemed given
when received at the addresses set forth after the signatures of the parties
below, or at such other address as a party may notify the other party hereto in
accordance herewith. Electronic notification hereunder shall be valid only if
receipt is acknowledged by the recipient.
(g) Paragraph headings herein are for convenience only and shall not be
considered in the interpretation of this Agreement.
(h) This agreement was thoroughly negotiated by competent counsel for
both parties to their respective satisfaction. Therefore, the parties agree
that, in the interpretation hereof, no weight or consideration should be given
with respect to which party's attorneys prepared the initial draft hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives.
VSUS TECHNOLOGIES, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇ ▇▇▇▇▇▇, President
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
c/o Great Court Capital
ViVaVu SYSTEMS, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇, President
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Israel
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