EXHIBIT 10.16
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SYSTEM DEVELOPMENT, MAINTENANCE AND INFORMATION TECHNOLOGY SERVICES AGREEMENT
BETWEEN
FIDELITY NATIONAL FINANCIAL, INC.
AND
MICRO GENERAL CORPORATION
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TABLE OF CONTENTS
1. Definitions and Construction ..............................................1
1.1 Definitions...................................................................1
1.2 References....................................................................6
1.3 Headings......................................................................6
1.4 Interpretation of Agreement and Project Scope Documents.......................6
1.5 Agreement and Schedules.......................................................7
2. Scope of Work; Services and Commitments.......................................7
2.1 Execution of Project Scope Documents..........................................7
2.2 Maintenance and Support.......................................................7
2.3 Website Hosting...............................................................8
2.4 Out-of-Scope Services.........................................................8
2.5 Systems Development Projects..................................................8
2.6 Consulting....................................................................9
2.7 Equipment Procurement.........................................................9
2.8 Acceptance Procedure.........................................................10
2.9 Change Orders................................................................11
2.10 Subcontracting...............................................................11
2.11 Licenses and Permits.........................................................11
2.12 Service Locations............................................................11
2.13 Data Migration...............................................................12
2.14 Third-Party Services.........................................................12
3. Contract Administration and Project Team.....................................12
3.1 Project Coordinators.........................................................13
3.2 Project Staff................................................................13
3.3 Restricted Positions. ......................................................13
3.4 Performance Review...........................................................13
3.5 Dispute Resolution...........................................................13
4. Service Levels...............................................................14
4.1 Service Levels...............................................................14
4.2 Measurement and Monitoring Tools.............................................14
4.3 Service Level Failures.......................................................14
4.4 Critical Failures............................................................14
4.4 Failure......................................................................14
4.5 Continuous Improvement and Best Practices....................................14
5. License and Other Grants.....................................................15
5.1 License to MGEN Software and Intellectual Property Rights....................15
5.2 Third Party Software.........................................................17
5.3 Delivery of Source Code; Use of Source Code..................................17
5.4 Facility Requirements........................................................17
5.5 Third Party Services.........................................................17
6. Access Rights and Prohibited Changes.........................................17
6.1 Fidelity System Access.......................................................17
6.2 Prohibited Changes to Software...............................................18
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7. Fidelity Obligations.........................................................18
8. Safeguarding Fidelity Data, Confidentiality and Audit Rights.................18
8.1 Safety and Security Procedures...............................................18
8.2 Data Security................................................................19
8.3 Security Relating to Shared MGEN Environments................................19
8.4 Conduct of MGEN Personnel....................................................19
8.5 Fidelity Data................................................................19
8.6 Definition of Confidential Information.......................................20
8.7 Disclosure Of Confidential Information.......................................20
8.8 Protection of Confidential Information.......................................20
8.9 Exceptions...................................................................21
8.10 Return of Confidential Information...........................................21
8.11 Audit Rights. ...............................................................21
8.12 Third Party Discovery........................................................21
9. Payments to MGEN.............................................................21
9.1 Fees. ......................................................................20
9.2 Time and Manner of Payment...................................................22
9.3 Detailed Invoices............................................................22
9.4 Expenses.....................................................................23
9.5 Pricing Adjustments..........................................................23
9.6 Most Favored Customer Pricing. ..............................................23
9.7 Taxes... ....................................................................23
9.8 Proration....................................................................23
9.9 Rights of Set-off............................................................23
10. Representations And Warranties...............................................23
10.1 By Fidelity..................................................................24
10.2 By MGEN......................................................................24
10.3 Disclaimer...................................................................25
11. Term And Termination.........................................................26
11.1 Term ......................................................................26
11.2 Termination for Cause........................................................26
11.3 Termination for Nonpayment...................................................26
11.4 Transition Assistance on Termination.........................................27
11.5 Right of Immediate Payment...................................................27
11.6 Survival.....................................................................27
12. Indemnities..................................................................27
12.1 Indemnity by Fidelity........................................................27
12.2 Indemnity by MGEN............................................................28
12.5 Indemnification Procedures...................................................28
12.6 Subrogation..................................................................29
12.7 Non-Exclusive Remedy.........................................................29
13. Insurance....................................................................29
13.1 Insurance Maintained by MGEN.................................................29
13.2 Insurance Documentation......................................................30
14. General Provisions...........................................................30
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14.1 Binding Nature and Assignment................................................30
14.2 Notices......................................................................30
14.3 Counterparts.................................................................31
14.5 Relationship of Parties......................................................31
14.6 Approvals and Similar Actions................................................31
14.7 Force Majeure................................................................31
14.8 Severability.................................................................31
14.9 Waiver ......................................................................31
14.10 Attorneys' Fees..............................................................32
14.11 Media Releases...............................................................32
14.12 No Third Party Beneficiaries.................................................32
14.13 Entire Agreement.............................................................32
14.14 Governing Law and Dispute....................................................32
Schedule ▇.▇▇▇▇▇▇▇....................................................................i
Schedule ▇.▇▇▇▇▇▇▇ Services..........................................................ii
Schedule ▇.▇▇▇▇▇▇▇▇▇▇ Proposal......................................................iii
Schedule 4.Project Scope Documents...................................................iv
Schedule 7.List of Project Coordinators and Project Area Managers...................vii
Schedule 8.Rate Schedule...........................................................viii
Schedule 9.Maintenance and Support Charges (Year One)................................ix
Schedule ▇▇.▇▇▇▇▇▇▇ Hosting Fees (Year One)...........................................x
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SYSTEM DEVELOPMENT, MAINTENANCE AND
INFORMATION TECHNOLOGY SERVICES AGREEMENT
This Agreement is made and entered into as of this 23d day of May, 2001
(the "Effective Date"), by and between Fidelity National Financial, Inc., a
Delaware Corporation, and its Members, as defined below (collectively,
"Fidelity"), on the one hand, and Micro General Corp., a Delaware Corporation,
on behalf of itself and any subsidiary performing services hereunder
(collectively, "MGEN"), on the other hand.
WHEREAS, Fidelity is a real estate service company that provides title
insurance and performs other title-related services such as escrow, collection
and trust activities, real estate information and technology services, trustee
sales guarantees, appraisals, credit reporting, attorney services, flood
certification, real estate tax service, reconveyances, recordings, foreclosure
publishing and posting services and exchange intermediary services (the
"Business");
WHEREAS, MGEN is a comprehensive provider of business communications and
information technology solutions including electronic data processing,
facilities management, systems integration, systems development,
telecommunications and related services;
WHEREAS, the purpose of this Agreement is to establish and memorialize
the general terms and conditions whereby MGEN would provide certain
communications and information technology services to Fidelity; and
WHEREAS, MGEN is willing to offer and provide to Fidelity, and Fidelity
shall be entitled, but not obligated, to obtain from MGEN the communications and
information technology services described in this Agreement on the terms and
conditions set forth in this Agreement and in the accompanying Project Scope
Documents (as hereinafter defined).
NOW, THEREFORE, for and in consideration of the agreements of the
parties set forth below, the parties hereby agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS
"Affiliate" means any corporation, partnership, limited liability
company or other entity directly or indirectly controlled by or under
the common control of Fidelity. Notwithstanding the foregoing, the term
shall not include MGEN (or any entity controlled by MGEN).
"Best Practices" shall have the meaning set forth in Section 4.5.
"Business" shall have the meaning provided in the first Recital. With
respect to Fidelity, the term "Business" includes business areas into
which Fidelity may expand in the future.
"Change" shall mean any modification or change to System Software,
Equipment or Services that would materially alter the functionality,
performance standards or technical environment of such System, Software
or Equipment, the manner in which the Services are provided, the
composition of the Services, or the cost of the Services to Fidelity.
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"Confidential Information" shall have the meaning provided in Section
8.6.
"Deliverables" means the deliverable items (a) specified for each
Milestone in an applicable Project Scope Document, or (b) otherwise
identified as items to be delivered by MGEN to Fidelity.
"Designated Services" shall have the meaning set forth in Section 2.1.
"Developed System" means any System created in connection with a Systems
Development Project or for which MGEN undertakes responsibility for the
development effort, pursuant to this Agreement or any Project Scope
Document. Notwithstanding anything to the contrary, the SIMON System
shall not be considered a Developed System; provided, however, that any
new System or Software developed by MGEN in accordance with this
Agreement or any Project Scope Document which includes or incorporates
any part of the SIMON System shall be considered a Developed System.
"Documentation" means those operating manuals, users' manuals,
programming manuals, modification manuals, flow charts, drawings and
software listings designed to assist a user's understanding or
application of MGEN Software, Third Party Software or such other
software as the context may contemplate.
"Enhancements" shall mean all improvements, additions, and any
modifications to a technology. The term "Enhancements" shall include all
upgrades; bug fixes; work-arounds; software patches and other fixes;
Improvements; changes or additions required to integrate the technology
into other applications, operating systems, or computer hardware
configurations; and all works of authorship, data, know-how, technology,
information, inventions and/or discoveries related thereto which are
conceived, or conceived and reduced to practice by a Party, but
excluding all modifications or improvements developed with third parties
to the extent the right to license such modifications or improvements is
not obtained, after reasonable efforts to do so.
"Equipment" shall have the meaning set forth in Section 2.8.
"Existing Services" means those Services that are currently being
provided to Fidelity and its Affiliates, and that are listed on Schedule
5.
"Fees" shall mean, collectively, fees payable to MGEN in connection with
its performance of Services hereunder or pursuant to a Project Scope
Document, and any other amounts payable to MGEN hereunder or pursuant to
a Project Scope Document.
"Fidelity Data" shall mean all data or information regarding Fidelity's
business, including information relating to customers, employees,
technology, operations, facilities, consumer markets, products,
capacities, systems, procedures, security practices, research,
development, business affairs and finances, innovations, inventions,
designs, business methodologies, improvements, trade secrets,
copyrightable and patentable subject matter and other similar
information obtained by or disclosed to or submitted to MGEN by or on
behalf of Fidelity in connection with the performance of this Agreement
or any applicable Project Scope Document. It is expressly agreed and
understood that Fidelity Data is "Confidential Information" under
Section 8.6.
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"Fidelity Regulatory Requirements" shall mean the laws, rules and
regulations on an international, federal, state and local level to which
Fidelity is required to submit or to which it voluntarily submits.
"Fidelity Service Location" shall mean any site or facility owned,
leased or controlled by Fidelity, and where Services shall be performed
in connection with this Agreement or any Project Scope Document.
"Fidelity Systems" means Systems that are being operated by or on behalf
of Fidelity immediately prior to the Effective Date. Notwithstanding
anything to the contrary, the SIMON System is not a Fidelity System.
"Help Desk" means the service of telephone support for assisting in
resolving information technology and communications problems of
Fidelity.
"Hosting Environment" shall mean the physical configuration, and the
database environment, which is necessary to operate the Fidelity Website
or a Fidelity Network in accordance with the terms and conditions of
this Agreement, and any applicable Project Scope Document including
without limitation descriptions of the hardware and software platforms,
ancillary software, site security, and telecommunications capabilities.
The Specifications for the Hosting Environment shall be as set forth in
the applicable Project Scope Document.
"Improvement" shall mean (i) for copyrightable or copyrighted material,
any modification, correction, addition, extension, upgrade, improvement,
compilation, abridgement, or other form in which an existing work may be
recast, transformed, or adapted; (ii) for patentable or patented
material, any improvement thereon; and (iii) for material which is
protected by trade secret, any new material derived from such existing
trade secret material, including new material which may be protected by
copyright, patent, and/or trade secret.
"Intellectual Property Rights" shall mean any and all rights existing
now or in the future under patent law, copyright law, industrial design
rights law, semiconductor chip and mask work production law, moral
rights law, trade secret law, trademark law, unfair competition law,
publicity rights law, privacy rights law, and any and all similar
proprietary rights, and any and all renewals, extensions, and
restorations thereof, now or hereafter in force and effect worldwide.
"Internet" shall mean the global Network of interconnected computer
Networks (or any part thereof), using TCP/IP or such other Network
interconnection or communications protocols as may be adopted from time
to time, which is used to deliver data to a computer or other digital
electronic device, whether such data is delivered through on-line
browsers, off-line browsers, or through electronic mail, broadband
distribution, satellite, wireless or otherwise.
"Losses" means all losses, liabilities, damages and claims (including
taxes) to third persons or entities, and all related costs and expenses
(including any and all attorneys and expert witness fees and costs of
investigation, litigation, settlement, judgment, interest and
penalties).
"Maintain" or "Maintenance" means, collectively, the activities,
services and functions identified in Section 2.2.
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"Member" means any entity that is an Affiliate of Fidelity.
"MGEN Service Location" shall mean any location owned, leased, or
controlled by MGEN and from or at which MGEN provides services in
connection with this Agreement or any applicable Project Scope Document,
other than Fidelity Service Locations.
"MGEN Software" shall mean all Software used, useful or developed by
MGEN in connection with the performance of its obligations pursuant to
this Agreement or any Project Scope Document, including the SIMON
System.
"MGEN Tools" shall mean any software development and performance
testing, know-how, methodologies, processes, technologies or algorithms
used by MGEN in providing Services, and based upon trade secrets or
Confidential Information of MGEN, or otherwise based on Intellectual
Property Rights owned or licensed by MGEN.
"Milestone" means an individual task or set of tasks to be completed by
a certain date as described in any Project Scope Document.
"Network" shall mean a group of computers or other digital electronic
devices connected by communications facilities, either through long-term
connections, such as cables, or through more temporary connections, such
as by telephone, by satellite, or other communications links. The term
"Network" encompasses, but is not limited to, Local Area Networks
("LANs") and Wide Area Networks ("WANs"), and includes user-to-user as
well as distributed communications.
"New Project" shall mean any Services to be rendered by MGEN in
connection with an undertaking that is not a Project as of the Effective
Date.
"New Project Scope Documents" shall mean any Project Scope Document
executed in connection with the rendering of Services relating to a New
Project.
"New System" shall have the meaning set forth in Section 2.6.1.
"Out-of-Scope Services" shall have the meaning set forth in Section 2.5.
"Other Service Location" shall mean any location, other than an MGEN
Service Location or a Fidelity Service Location, permitted in accordance
with this Agreement or an applicable Project Scope Document from which,
or to which, Services are provided.
"Party" shall mean either Fidelity or MGEN, as the case may be.
"Project" means each of the discrete tasks or undertakings to be
performed by MGEN pursuant to Section 2.1 of this Agreement. This term
shall include, when the context allows, all New Projects.
"Project Manager" shall have the meaning set forth in Section 3.1.
"Project Scope Document" shall mean the various individual written
documents executed by an authorized signatory of each Party documenting
the deliverables, Milestones, tasks, and other relevant responsibilities
with respect to a Project Area. This term shall include, when
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the context allows, all New Project Scope Documents executed in
accordance with the procedure set forth in Section 2.6.
"Project Budget" shall mean a written document that contains (a) a
long-range plan and budget for a Project and (b) an annual plan and
budget for a Project.
"Project Coordinator" shall have the meaning set forth in Section 3.1.
"Service Levels" shall have the meaning set forth in Section 4.1.
"Service Location" shall mean any Fidelity Service Location, MGEN
Service Location or Other Service Location.
"Services" shall mean those services, activities, functions or
undertakings to be performed by MGEN in connection with the discharge of
its obligations hereunder and under any Project Scope Document,
including, Designated Services and the general services, activities and
functions outlined in Section 2.
"SIMON System" means the S.I.M.O.N. system as described in the attached
Schedule 3, entitled "Technology Proposal," and includes, when the
context allows, future versions of such System.
"Software shall mean the MGEN Software and Third Party Software,
collectively.
"Source Code" means computer programs, instructions and related material
written in a human-readable source language in form capable of serving
as the input to a compiler or assembler program, and in form capable of
being modified, supported and enhanced by programmers reasonably
familiar with the source language.
"Specifications" means the descriptions of the technical requirements,
component parts, features, functionality, performance criteria,
operating conditions, interfaces, data transfer, processing parameters,
and protocols, associated with the undertaking by MGEN of Services, as
may be specifically set forth herein or in a Project Scope Document.
"Support" shall have the meaning set forth in Section 2.2.3.
"Systems" means computer programs, the tangible media on which they are
recorded, their supporting documentation, including input and output
formats, program listings, narrative descriptions and operating
instructions, as well as the hardware upon which such computer programs
are run or stored.
"Systems Development Project" means, collectively, the activities,
services and functions identified in Section 2.6, as well as any other
work performed by MGEN with regard to a System that exceeds Maintenance
or Support in terms of scope or level of effort. Systems Development
Projects initially shall consist of those Projects identified in the
attached Schedule 3 entitled "Technology Proposal."
"Technology Proposal" shall mean the outline of Services to be performed
by MGEN, together with its descriptive provisions and estimates,
attached hereto as Schedule 3.
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"Third Party Services Contracts" means the contracts pursuant to which
Fidelity receives services as of the Effective Date for use in providing
the Existing Services or pursuant to which Fidelity receives Third Party
services during the Term.
"Third Party Software" shall mean all software and related Documentation
owned by a third party, validly licensed to, and used by, MGEN in
connection with the performance of its obligations pursuant to this
Agreement or any Project Scope Document.
"Third Party System" means any System which (1) is not a Fidelity System
or the SIMON System, and (2) is acquired or licensed from a third party
for operation by MGEN on behalf of Fidelity under this Agreement.
"Website" shall mean a series of interconnected Web Pages residing in a
single directory on a single server.
"Web Page" means a document or file that is intended to be accessible by
Internet users.
Other capitalized terms used in this Agreement are defined in the
context in which they are used and shall have the meanings indicated by
such use.
1.2 REFERENCES. In this Agreement and the Schedules to this
Agreement, including the Project Scope Document(s) and any
schedules attached thereto:
1.2.1 the Schedules to this Agreement shall be incorporated
into and deemed a part of this Agreement and all
references to this Agreement shall include the Schedules
to this Agreement;
1.2.2 this Agreement shall be incorporated into and deemed a
part of any Project Scope Documents hereafter executed
by the Parties;
1.2.3 the schedules to any Project Scope Document shall be
incorporated into and deemed a part of such Project
Scope Document and all references to such Project Scope
Document shall include the schedules to such Project
Scope Document;
1.2.4 references to any law or regulation shall mean
references to the law or regulation in changed or
supplemented form to a newly adopted law or regulation
replacing a previous law or regulation; and
1.2.5 references to the word "including" or the phrase "e.g."
in this Agreement shall mean "including, without
limitation."
1.3 HEADINGS. The article and Sections headings and the table of
contents are for reference and convenience only and shall not be
considered in the interpretation of this Agreement or any
Project Scope Document.
1.4 INTERPRETATION OF AGREEMENT AND PROJECT SCOPE DOCUMENTS. The
terms and conditions set forth in this Agreement shall govern
MGEN's provision of Services to Fidelity under the Project Scope
Documents, except as otherwise expressly set forth herein. In
the event of a conflict between the terms of this Agreement and
any
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Project Scope Document, unless otherwise provided herein [or
expressly stated in the Project Scope Document], the terms of
this Agreement shall prevail. In the event of a conflict between
a Project Scope Document and the schedules to a Project Scope
Document, the terms of the Project Scope Document shall prevail.
1.5 INTERPRETATION OF AGREEMENT AND SCHEDULES. In the event of any
conflict between (a) the terms of this Agreement or a Project
Scope Document, on the one hand, and (b) any Schedule to this
Agreement (including the Technology Proposal) on the other hand,
the terms of this Agreement or the Project Scope Document shall
prevail.
2. SCOPE OF WORK; SERVICES AND COMMITMENTS
2.1 EXECUTION OF PROJECT SCOPE DOCUMENTS. MGEN agrees to perform
Services in connection with each Project (including any New
Project) described herein or in any Project Scope Document
attached hereto. Following execution of this Agreement, the
Parties agree to utilize their best efforts to promptly
negotiate and execute Project Scope Documents not inconsistent
with the provisions of this Agreement and the Schedules hereto.
Each Project Scope Document shall identify (i) the Services to
be performed with respect to such Project (the "Designated
Services"), (ii) the time frames and Milestones for the
performance of the Designated Services, (iii) any special terms
and conditions applicable to Designated Services (including
Service Levels and Specifications, as appropriate) and (v) such
other provisions as the Parties may agree.
2.2 MAINTENANCE AND SUPPORT. MGEN shall provide the following
Support and Maintenance Services for a fixed annual fee, as
specified in Section 9.1.2.
2.2.1 SYSTEMS MAINTENANCE. MGEN shall update Systems in order
to meet changing information requirements, including,
changing data formats, fixing bugs, adapting Software to
interface with new hardware devices where feasible, and
performing required file maintenance.
2.2.2 HARDWARE MAINTENANCE. MGEN shall maintain, support, and
periodically test the Equipment , except where such
obligations are the responsibility of an identified
third party.
2.2.3 SUPPORT. MGEN shall provide Support with respect to
Systems, Software, data Networks, voice Networks and
platforms used or useful in connection with Fidelity's
Business. The term "Support" shall include (a)
inputting, connecting, and manipulating data, (b)
formulating queries (c) designing and revising reports,
(d) providing operator services, (e) administering a
Help Desk, (f) dispatching technical service engineers,
(g) revising and updating web pages, (h) training
Fidelity employees (consistent with Section 2.3) and (i)
such other tasks that are customarily performed by
service providers similarly situated or as specified in
a Project Scope Document. In addition, such Support
shall include the Services specified on the attached
Schedule 1, entitled "Support."
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2.3 TRAINING. The terms and conditions regarding onsite training for
Fidelity's Project Coordinator and other such employees or
agents as Fidelity may select with respect to each Project shall
be mutually agreed upon in good faith by the Parties in the
applicable Project Scope Documents
2.4 WEBSITE HOSTING. MGEN shall provide and Maintain a Hosting
Environment to host the Fidelity Website, and shall provide
website hosting services for the Fidelity Website, which
services may be detailed in a Project Scope Document but shall
not be inconsistent with Schedule 2 ("Hosting Services"). MGEN
shall be responsible for obtaining and Maintaining the computer
hardware and software utilized in connection with the Hosting
Services hereunder. MGEN shall be entitled to a fixed annual
charge for such Hosting Services, in accordance with Section
9.1.2
2.5 OUT-OF-SCOPE SERVICES. Each Party agrees and acknowledges that
the performance of Maintenance and Support Services by MGEN
under Section 2.2 and Hosting Services under Section 2.4 shall
be provided at fixed fees pursuant to Section 9.1.2 of this
Agreement. Each Party further agrees and acknowledges, however,
that during the course of MGEN's performance of Maintenance and
Support Services hereunder, unforeseen circumstances could
compel MGEN to propose, or Fidelity to request, that certain
services not otherwise contemplated by the Parties as of the
Effective Date be performed ("Out-of-Scope Services"). To allow
Fidelity to manage all such Out-of-Scope Services, MGEN agrees
that (a) it shall perform no Out-of-Scope Service without first
obtaining Fidelity's written approval and (b) it shall detail
all costs and fees for Out-of-Scope Services in accordance with
Section 9.3.
2.6 SYSTEMS DEVELOPMENT PROJECTS. MGEN shall undertake Systems
Development Projects in accordance with this Section 2.6. Either
Party may determine that implementation of a New Project is
advisable (and MGEN shall have a duty to bring such advisable
New Projects to the attention of Fidelity). Accordingly, upon
the initiative of either Party, and upon reasonable notice, the
Parties shall meet and confer, and exchange information
concerning the potential New Project. Upon completion of such
information exchange, the Parties shall conduct good faith
negotiations concerning (a) the scope of Services to be provided
by MGEN, and (b) the projected costs of such Services and
Developments, in accordance with this Section 2.6. To the extent
such Project rises to the level of a New Project, the Parties
agree to execute appropriate additional New Project Scope
Documents.
2.6.1 SYSTEMS ANALYSIS AND DESIGN. Upon Fidelity's request,
and in exchange for consulting fees provided under
Section 9.1.1, MGEN shall analyze and assess all aspects
of any project contemplating the addition of a new
System (a "New System"), the Enhancement to an existing
System, or the creation or substantial Enhancement to an
Internet Website, including, undertaking a feasibility
study, proposing a general design, prototyping, creating
an architectural design, establishing Specifications,
and preparing a detailed statement of work
(collectively, "Design").
2.6.2 DEVELOPMENT. Upon completion of the Design, and upon
Fidelity's acceptance of such Design in accordance with
Section 2.9, MGEN shall prepare a Quote for the
Development and Implementation (as such terms are
defined below) of such Design, as provided in Section
2.6.4, below. Upon
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Fidelity's acceptance of the Quote, MGEN shall code,
develop, and test ("Development") the referenced New
System that shall add the required functionality,
features or Enhancements.
2.6.3 IMPLEMENTATION. Upon completion of any Development
obligations it may have, MGEN shall (subject to the
Quote Procedure set forth in Section 2.6.4) train
appropriate Fidelity employees, convert any existing
Systems to the New System and install the New System
("Implementation").
2.6.4 MGEN QUOTES; BID PROCEDURE. In connection with any
Development or Implementation work requested by Fidelity
or required to complete a Systems Development Project,
and notwithstanding anything to the contrary in any
Schedule hereto or in any Project Scope Document, MGEN
shall provide Fidelity with a quote for charges it
reasonably expects to incur in performing such work (a
"Quote"). Consistent with Section 2.15 hereunder,
Fidelity shall thereafter have the option to contract
for the provision of such services with any third-party
in its sole and absolute discretion. In the event
Fidelity selects MGEN as its service provider, MGEN
shall be bound by its Quote, Fidelity shall be entitled
to rely on such Quote, and Fidelity shall be bound by
such Quote under Section 9.1.3; provided, however, that
adjustments to the Quote may be submitted for approval
in connection with the Change Order Process specified in
Section 2.10.
2.6.5 COST REDUCTION. In a situation in which MGEN is
providing a fixed cost service to Fidelity, and MGEN is
able to sell identical or similar services to a third
party such that MGEN's fixed cost of providing such
service is shared by Fidelity and such third party, then
MGEN shall inform Fidelity of such eventuality and the
parties shall mutually agree to a reduction of the
amount paid by Fidelity for such services by an agreed
amount.
2.7 CONSULTING. In addition to Maintenance, Support, Hosting,
Design, Implementation and Development Services, upon Fidelity's
request and in exchange for the fees set out in Section 9.1.1,
MGEN shall provide Fidelity with Consulting Services. Such
Consulting Services shall include, but not be limited to (at
Fidelity's direction): (a) a review of Fidelity's technology
needs in light of Fidelity's business plan; (b) interviewing
Fidelity executives to determine and clarify Fidelity's business
objectives and associated technology needs; (c) advising
Fidelity on its future technology needs; (d) evaluating
alternative or emerging technologies, (e) preparing a technology
plan integrating Fidelity Systems and Developed Systems with new
technology; (f) advising Fidelity with respect to its
Networks,(g) identifying and advising Fidelity with respect to
Best Practices (as such term is defined in Section 4.5), and (h)
such other Consulting Services (including Out of Scope Services,
as appropriate) mutually agreed to by the Parties.
2.8 EQUIPMENT PROCUREMENT. At Fidelity's request and at MGEN's
reasonable and good faith discretion, MGEN shall obtain on
behalf of Fidelity equipment and hardware that are related to
the Services ("Equipment").
2.8.1 PROCUREMENT SERVICES. MGEN shall (1) identify suppliers
with the most favorable terms (including the lowest cost
supplier) for any Equipment and
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(2) upon Fidelity's selection and approval, acquire the
Equipment on Fidelity's behalf or lease, or coordinate
the leasing of, such Equipment to Fidelity.
2.8.2 PROCUREMENT COMPENSATION. MGEN shall be compensated for
such procurement services at MGEN's hourly rates, in
accordance with Section 9.1.1, and Fidelity shall pay to
MGEN, the supplier, or any third party lessor, as
applicable, the purchase or lease fees in respect of the
Equipment. Except as otherwise agreed in writing by the
Parties or as otherwise provided in an applicable
Project Scope Document, all rights in and title to any
Equipment purchased by MGEN on behalf of Fidelity
pursuant to this Agreement or any Project Scope Document
shall belong to Fidelity.
2.9 ACCEPTANCE PROCEDURE. The following acceptable procedure shall
apply to all Deliverables MGEN provides to Fidelity under this
Agreement.
2.9.1 VERIFICATION PERIOD. Following timely receipt of
Deliverables from MGEN, Fidelity shall have not less
than thirty (30) or more than forty-five (45) calendar
days (the "Verification Period") in which to review,
examine and verify such Deliverables and notify MGEN (a)
of any material failure thereof to meet applicable
Specifications or (b) of a material failure thereof
otherwise to meet Fidelity's needs, as Fidelity may
determined in the exercise of commercially reasonable
judgment (a "Deliverable Failure"). Fidelity agrees to
use commercially reasonable efforts to provide MGEN with
all information reasonably available regarding any
Deliverable Failure. If Fidelity fails to accept or
reject a Deliverable within the Verification Period
specified above, the Deliverable shall be deemed
accepted; provided, however, that any failure by
Fidelity to discover or notify MGEN of defects within
any Verification Period shall not negate any of MGEN'
representations or warranties, nor waive any of
Fidelity's rights or remedies.
2.9.2 CORRECTION BY MGEN. Upon receipt of notice regarding the
Deliverable Failure, MGEN shall use its best efforts, at
MGEN's sole cost and expense, to correct any such
Deliverable Failure and to resubmit the corrected
applicable Deliverables to Fidelity as soon as
commercially and technically practicable, but in all
cases within forty-five (45) days or such time as the
parties mutually agree, following MGEN's notice of a
Deliverable Failure. Subject to Fidelity's rights under
Section 11 of this Agreement, MGEN shall repeat the
process of correction and resubmission of an applicable
Deliverable until Fidelity's acceptance.
2.9.3 REMEDY. In the event MGEN is unable to provide Fidelity
with an acceptable Deliverable in a timely manner and in
accordance with this Section 2.9, upon request MGEN
shall reimburse Fidelity for all fees, costs, and
expenses Fidelity has incurred in connection with the
Deliverable and associated development. The parties
further agree that failure to timely correct a
Deliverable Failure shall be deemed a material breach of
this Agreement.
10
2.9.4 ALTERATIONS TO ACCEPTANCE PROCEDURES. A Project Scope
Document may specify standards, criteria and procedures
relating to the acceptance of Services or Deliverables
provided that such Document is not inconsistent with
this Section 2.9.
2.10 CHANGE ORDERS. All Changes shall be controlled using the
following formal change control process: (1) the Party proposing
a Change will document it in writing, provide technical and cost
justification for the Change, and specify a desired
implementation date; (2) the Party receiving the proposed Change
will assess the impact of the proposed Change, considering
resources required, technological implementation and other
contemplated and in-process changes; (3) the Parties shall
negotiate in good faith toward a mutually acceptable proposal,
and shall memorialize such proposal in writing; (4) the
completed proposal shall be presented to the Project
Coordinators for written approval; (5) no Changes will be
implemented without (a) such written approval and (b) a written
agreement setting forth and defining Specifications, schedules,
resources to be utilized, responsibilities of both Parties and
the criteria for successful implementation of such Change. MGEN
shall be responsible for ensuring that the Change Control
Process established by this Section 2.10 is followed, and
Fidelity shall not be obligated to pay for Changes undertaken by
MGEN which do not fully comply with this Section. Additional
provisions with respect to the Change Control Process for any
Project may be specified in any Project Scope Document, provided
such provisions are not inconsistent herewith.
2.11 SUBCONTRACTING. Prior to subcontracting any portion of the
Services, MGEN shall notify Fidelity of the proposed
subcontract. Fidelity shall have the right to approve such
subcontractor, which approval shall not be unreasonably withheld
or delayed. No subcontracting shall release MGEN from its
responsibility for its obligations under this Agreement or under
any Project Scope Document. MGEN shall be responsible for the
work and activities of each of its subcontractors, including
compliance with the applicable terms and provisions of this
Agreement. MGEN shall be responsible for all payments of fees
and expenses, as appropriate, to its subcontractors.
2.12 LICENSES AND PERMITS. MGEN shall obtain and maintain all
necessary licenses (including, but not limited to, Software
licenses), consents, approvals, and permits and any
authorizations required by legislative enactments and
regulations applicable to it that are legally required for MGEN
to provide the Designated Services. Fidelity shall be primarily
responsible for authorizations relating to Fidelity Regulatory
Requirements. Subject to the foregoing, and upon request, each
Party shall cooperate with and provide reasonable assistance to
the other Party in obtaining any such licenses, consents,
approvals, permits and authorizations.
2.13 SERVICE LOCATIONS. Unless otherwise agreed by Fidelity, the
Designated Services shall be provided at (1) the Fidelity
Service Locations, and (2) the MGEN Service Locations.
2.13.1 OTHER SERVICE LOCATIONS. In addition, MGEN may provide
the Designated Services from Other Service Locations,
upon prior approval by Fidelity provided that MGEN
demonstrates to Fidelity's reasonable satisfaction that
the provision of the Designated Service from such Other
Location will not
11
result in any additional cost to Fidelity and that there
are no increased risks to Fidelity regarding the
security of Fidelity Data or the disclosure of Fidelity
Confidential Information. If MGEN provides the
Designated Services from an Other Service Location in
accordance with this Agreement or any applicable Project
Scope Document, such Other Service Locations shall be
deemed to be a "MGEN Service Location" for purposes of
this Agreement. MGEN and MGEN agents, representatives
and subcontractors, may not provide or market services
to a third party from a Fidelity Service Location
without Fidelity's consent.
2.13.2 SHARED ENVIRONMENT. In the event that MGEN desires to
migrate services or technology subject to this Agreement
to a shared environment or from one shared environment
to another shared environment, MGEN will, prior to
migrating such services or technology, (1) advise
Fidelity of such desire; (2) consult with Fidelity on a
proposal and transition plan; (3) demonstrate to
Fidelity's reasonable satisfaction that the use of such
shared environment will not result in any additional
cost or decreased Service Levels to Fidelity and that
there are no increased risks to Fidelity regarding
security of Fidelity Data or the disclosure of
Fidelity's Confidential Information in contravention of
Section 8; (4) when commercially reasonable, operate in
parallel to demonstrate that there are no such increased
risks to security, confidentiality, Service Levels or
user interfaces; (5) work with Fidelity to mitigate any
identified risks to Fidelity's Business; (6) review with
Fidelity the effect of such migration on Fidelity
Regulatory Requirements and contractual obligations and
(7) obtain Fidelity's consent to the transition plan to
the shared environment, as presented.
2.14 DATA MIGRATION. MGEN agrees that Fidelity Data shall be stored
in industry-standard formats, and shall be readily portable to
industry-standard, off-the-shelf database applications.
2.15 THIRD-PARTY SERVICES. Notwithstanding any request made to MGEN
by Fidelity, Fidelity shall have the right to contract with any
third party for the performance of Services. In the event
Fidelity contracts with a third party to perform any Service,
MGEN shall cooperate in good faith with Fidelity and any such
third party to the extent reasonably required by Fidelity. To
the extent such cooperation requires additional Services by
MGEN, MGEN shall provide such Services and shall be compensated
consistent with the provisions of this Agreement or any
applicable Project Scope Document.
2.16 EMERGENCY PROJECTS. From time to time it may be necessary for
Fidelity to request MGEN to undertake a Project on an emergency
basis. The parties understand and acknowledge that the
exigencies of such situations may mandate that MGEN take action,
including commitment of time, resources and effort, to address
the Project. The parties shall honor commitments and actions
that were reasonable under the circumstances, and shall endeavor
to comply with the New Project provisions set out above as soon
as practicable.
3. CONTRACT ADMINISTRATION AND PROJECT TEAM
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3.1 PROJECT COORDINATORS. Each Party shall appoint an individual
(the "Project Coordinator") who, from the Effective Date, shall
serve on a dedicated basis as the primary representative for
such Party under this Agreement. A Party's appointment of a
Project Coordinator shall be subject to the other Party's
reasonable approval. The Project Coordinator shall (1) have
overall responsibility for managing and coordinating the
performance of such Party's obligations under this Agreement and
the Project Scope Documents, (2) be authorized to act for and on
behalf of such Party with respect to all matters relating to
this Agreement and the Project Scope Documents and (3) appoint
the individuals ("Project Managers") who shall be primarily
responsible for supervising performance under the Project Scope
Documents. A current list of Project Coordinators and Project
Managers shall be maintained as Schedule 7, as such Schedule may
be amended from time to time.
3.2 PROJECT STAFF. Each Party, through its Project Coordinators and
Project Managers, shall only assign employees who possess the
requisite training and skills to perform the Designated Services
contemplated under any Project Scope Document ("Project Staff").
3.3 RESTRICTED POSITIONS. MGEN acknowledges that certain MGEN
employees, including those assigned as (i) the MGEN Project
Coordinator, (ii) the MGEN Project Managers, (iii) any MGEN
employee who spends over thirty percent (30%) of his or her time
on Fidelity matters; and (iv) such other MGEN employees as the
parties may mutually designate in writing (collectively or
individually, as appropriate "Restricted Positions") may result
in such MGEN employees ("Restricted Position Employees") being
knowledgeable of sensitive Confidential Information. MGEN shall
use its best efforts to ensure that Restricted Position
Employees safeguard Fidelity confidential information.
3.4 PERFORMANCE REVIEW. The MGEN Project Coordinator and the
Fidelity Project Coordinator will meet at least monthly to
review the performance of both Parties under this Agreement, and
shall meet when reasonably requested by either Party to review
the performance of either party under this Agreement. At the
request of either Party, written or taped minutes of such
meetings may be kept.
3.5 DISPUTE RESOLUTION. If there is any dispute or disagreement
between the Parties either in interpreting any provision of this
Agreement or about the performance of either Party, then upon
the written request of either Party, each of the Parties,
through their respective Project Coordinators, will meet and
confer to negotiate in good faith in an effort to resolve the
dispute without any formal proceeding. During the course of such
negotiation(s), all reasonable requests made by one Party to the
other for information, including copies of relevant documents,
will be honored. The specific format for such discussions will
be left to the discretion of the Project Coordinators. If the
Project Coordinators are unable to resolve the dispute within 30
days after their first meeting, each Party will appoint a
designated officer of its corporation to attempt to resolve the
dispute. No litigation for the resolution of such disputes may
be commenced until the designated officers have met and either
Party has concluded in good faith that amicable resolution
through continued negotiation does not appear likely (unless
either party fails or refuses to schedule such a meeting of
officers within a reasonable time after a request to do so by
the other Party).
13
4. SERVICE LEVELS.
4.1 SERVICE LEVELS. Commencing on the Effective Date, MGEN shall
perform the Designated Services at the performance levels and
standards (collectively, the "Service Levels") (a) set forth in
the applicable Project Scope Documents, provided the same are
not inconsistent with this Article 4, and (b) established by the
warranties set forth in Sections 10.2.4 and 10.2.5.
4.2 MEASUREMENT AND MONITORING TOOLS. MGEN shall measure and monitor
its compliance with the Service Levels. Such measurement and
monitoring shall permit reporting at a level of detail
sufficient for Fidelity to verify compliance with the Service
Levels. On a schedule set by the parties in applicable Project
Scope Documents, MGEN shall provide periodic performance and
status reports to Fidelity, in a form mutually agreed by the
parties, indicating the level of achievement of the Service
Levels. Fidelity shall have the right to require MGEN to
outsource its responsibilities with respect to monitoring any
Service Level established hereunder or pursuant to any Project
Scope Document. Fidelity shall have the right to audit MGEN's
compliance with the Service Levels hereunder at any Service
Location upon reasonable written notice.
4.3 SERVICE LEVEL FAILURES. In the event that either party
identifies a failure during any calendar month of the Term to
provide any of the Designated Services in accordance with the
applicable Service Levels (each such failure, a "Service Level
Failure"), the applicable MGEN Project Coordinator promptly
shall arrange a meeting with the Fidelity Project Coordinator
and provide a plan, reasonably satisfactory to Fidelity, to
address and correct such failures within the timeframe set forth
in such plan. Failure by MGEN to so provide and effect such plan
shall be deemed a material breach of this Agreement.
4.4 CRITICAL FAILURES. In the event that a Service Level Failure
either (a) has a material adverse business impact upon
Fidelity's Business, or (b) represents a continued failure to
correct non-critical Service Failures over a three-month period
(in each case a "Critical Failure"), then MGEN shall submit a
written report to the Fidelity Project Manager detailing the
cause of such incident and the remedial measures taken with
respect thereto within 15 business days of the Critical Failure.
Failure by MGEN to provide and effect such remedial measures
within such 15 business day period shall be deemed a material
breach of this Agreement. In the event of any interruption in a
Critical Service that does not cause a Critical Failure, the
MGEN Project Manager shall submit a written report to the
Fidelity Project Manager detailing the cause of the incident and
the remedial measures taken with respect thereto within 30
business days thereafter. Failure by MGEN to provide and effect
such remedial measures within such 30 business day period shall
be deemed a material breach of this Agreement.
4.5 CONTINUOUS IMPROVEMENT AND BEST PRACTICES. MGEN agrees to use
commercially reasonable efforts to: (1) on a continuous basis,
as part of the total quality management processes, identify ways
to improve the Service Levels, and (2) identify and apply proven
techniques and MGEN Tools from other installations within
operations that would benefit Fidelity either operationally or
financially (collectively such efforts shall be hereinafter
referred to as "Best Practices").
14
5. LICENSE AND OTHER GRANTS
5.1 LICENSE TO MGEN SOFTWARE AND INTELLECTUAL PROPERTY RIGHTS. In
consideration of Fidelity's payment of fees and other
obligations hereunder, MGEN hereby grants to Fidelity during the
Term and Transition Period a nonexclusive, royalty-free,
irrevocable and perpetual (except as expressly limited elsewhere
herein) license as follows:
5.1.1 to use all MGEN Software in connection with its
Business;
5.1.2 to reproduce MGEN Software and Documentation for
internal Business purposes, subject to charges assessed
on a per-office basis and previously agreed to by the
Parties in writing prior to the Effective Date for
particular MGEN Software;
5.1.3 to execute MGEN Software on Equipment owned or
controlled by Fidelity;
5.1.4 to perform and display (whether publicly or otherwise)
MGEN Software and Documentation (subject to the
nondisclosure obligations contained herein) for Business
purposes;
5.1.5 After the termination of this Agreement, Fidelity will
have the following additional rights:
5.1.5.1 to create Improvements to any MGEN Software or
Documentation and to use and enjoy such
Improvements; and
5.1.5.2 to create translations to other computer
languages or otherwise of MGEN Software for
Business purposes.
5.1.6 The licenses granted herein shall survive any
termination or expiration of this Agreement, even if
such termination or expiration is attributable to
Fidelity's breach of a provision hereunder.
5.2 LICENSE TO NGS SOFTWARE. In accordance with Schedule 4, the
Parties contemplate that MGEN will develop a "Net Global
Solutions" System (the "NGS System"), such development to be
governed by the procedures set out herein.
5.2.1 NGS System development and acceptance procedures shall
follow the provisions set out above.
5.2.2 Fidelity shall own all right, title and interest in and
to the NGS System. Inventions, processes, discoveries or
the like, whether patentable or not, identified by MGEN
during development of the NGS System, including software
tools used solely in the production of the NGS System
("MGEN Discoveries"), shall not be considered part of
the NGS System. MGEN shall grant to Fidelity any and all
licenses to MGEN Discoveries as may be required to
permit Fidelity the full use of the NGS System.
15
5.2.3 Fidelity hereby grants and MGEN hereby accepts a
perpetual worldwide license of all rights in and to the
NGS System (the "NGS License"), excepting only those
rights set out in Paragraph 5.2.4 below. The NGS License
shall be exclusive, with continuing exclusivity
determined as follows:
5.2.3.1 If this Agreement is terminated due to an
uncured breach by Fidelity, then the NGS License
shall remain exclusive in perpetuity.
5.2.3.2 Upon the termination of this Agreement due to an
uncured breach by MGEN, then the NGS License
shall convert to a nonexclusive license, all
other terms remaining in full force and effect.
5.2.3.3 Upon the termination of this Agreement for any
reason except an uncured breach by a party, the
NGS License shall convert to a nonexclusive
license on the tenth anniversary of the
completion of beta testing of NGS Version 1.0.
5.2.4 Fidelity does not license the following rights in the
NGS System to MGEN but rather retains such rights for
its internal use. Fidelity specifically does not retain
the right to sell or license the NGS System to third
parties. Retained rights are as follows:
(i) to use the NGS System in connection with
its Business;
(ii) to reproduce the NGS System and
Documentation for internal Business
purposes, subject to charges assessed on
a per-office basis and previously agreed
to by the Parties in writing;
(iii) to execute the NGS System on Equipment
owned or controlled by Fidelity;
(iv) to perform and display (whether publicly
or otherwise) the NGS System and
Documentation (subject to the
nondisclosure obligations contained
herein) for Fidelity Business purposes;
5.2.5 Without Fidelity's prior written consent, which consent
may be granted or denied in Fidelity's sole discretion,
MGEN will neither sublicense nor otherwise allow access
and/or utilization of the NGS System nor negotiate or
enter into any agreements in any way pertaining to the
NGS System with [i] Old Republic Title (or any of its
affiliates, successors or assigns) for a period of 90
days following the completion of the Fidelity roll-out
of the NGS System at all sites within the state where
such sale is contemplated, as set forth in the
applicable Project Scope Document (the "Fidelity
Roll-Out"); or (ii) First American (or any of its
respective affiliates, successors or assigns) for a
period of 3 years following the completion of the
Fidelity Roll-Out in such state.
5.2.6 Except as provided in Section 5.2.5 above, MGEN has the
unfettered ability to sublicense the NGS System. In
consideration of the rights granted herein, MGEN shall
pay to Fidelity a "Royalty", defined as a percentage of
revenue
16
apart from any development, hardware, support or
maintenance charges received by MGEN related to a
sublicense of the NGS System ("License Revenue") from
entities in the real estate title industry. The Royalty
percentage shall be 10% of License Revenue until the
aggregate sum of all Royalties equals the aggregate
amount paid by Fidelity to MGEN for development of the
NGS System through the completion of Version 1.0,
extending to the completion of beta testing at
Fidelity's Inland Empire site (the "NGS Development
Cost"); thereafter, the Royalty percentage shall be 2%
of License Revenue until the aggregate sum of all
Royalties equals 125% of the NGS Development Cost, after
which the Royalty percentage shall be zero.
5.3 THIRD PARTY SYSTEMS. MGEN grants to Fidelity solely for the
purposes of this Agreement a non-exclusive license to access,
use, and enjoy all of MGEN's rights in the Third Party Systems
and accompanying Documentation, during the Term and during the
Transition Period.
5.4 DELIVERY OF SOURCE CODE; USE OF SOURCE CODE MGEN shall, within
thirty (30) days after the acceptance of NGS Version 1.0, enter
into an agreement with a provider of software escrow services
reasonably acceptable to Fidelity, providing that (i) MGEN shall
deposit a copy of the MGEN Software into escrow; (ii) that MGEN
shall maintain a current copy of the MGEN Software in escrow by
refreshing such deposit at least every calendar year, or upon
issuance of a major upgrade release, whichever occurs more
often; and (iii) that such escrow provider shall release such
deposit to Fidelity upon a reasonable showing that the NGS
License has converted to a nonexclusive license. Such escrow
agreement shall be in the form attached hereto as Exhibit A.
Upon acquisition of the MGEN Software from the escrow agent,
Fidelity shall have the unfettered right to use such MGEN
Software, in any manner that it desires, including the right to
create derivative works thereto, subject to the then-applicable
terms of the NGS License.
5.5 FACILITY REQUIREMENTS. During the Term, Fidelity will provide to
MGEN, at no cost to MGEN except as specified below, access to
and use of all of the facilities wherein any computing or
telecommunications resources are located and where such access
is necessary for MGEN to provide the Services hereunder. Any
Member may limit such access in any reasonable manner to allow
for the smooth operation of such Member.
5.6 THIRD PARTY SERVICES. During the Term, Fidelity will provide to
MGEN contact information regarding access to and use of all of
the third party services governed by the Third Party Services
Contracts to enable MGEN to fulfill its obligations hereunder.
MGEN shall provide Fidelity with similar contact information
regarding Third Party Services Contracts, Third Party Software,
and Third Party Systems.
6. ACCESS RIGHTS AND PROHIBITED CHANGES
6.1 FIDELITY SYSTEM ACCESS. Fidelity grants to MGEN a nonexclusive,
royalty-free right to use the Fidelity Systems or Developed
Systems to the extent necessary to verify, analyze and
troubleshoot problems on Fidelity owned or controlled Equipment
as part of performing its Maintenance obligations hereunder.
Nothing in this Section
17
shall grant MGEN the right to use any Fidelity System or
Developed System for any other purpose.
6.2 PROHIBITED CHANGES TO SOFTWARE. Except as may be approved by
Fidelity, MGEN shall not make any changes or modifications to
MGEN Software or to the Third Party Software that would alter
the functionality of any Fidelity System or degrade the
performance of the Fidelity Systems or Services, except as may
be necessary on a temporary basis to maintain the continuity of
the Services.
7. FIDELITY OBLIGATIONS
7.1 Fidelity will, on a timely basis:
7.1.1 Appoint a Project Coordinator and Project Managers as
set forth in this Agreement.
7.1.2 Maintain any procedures manuals provided to Fidelity by
MGEN by distributing and inserting updates provided by
MGEN.
7.1.3 Use commercially reasonable efforts to provide MGEN with
reasonable notification of, and lead time, to respond to
service requests, including changes to the number or
format of required management reports, study requests,
and requests to modify or Enhance any Systems.
8. SAFEGUARDING FIDELITY DATA, CONFIDENTIALITY AND AUDIT RIGHTS
8.1 SAFETY AND SECURITY PROCEDURES.
8.1.1 Fidelity shall maintain and enforce at the Fidelity
Service Locations reasonable physical safety and
security procedures. Fidelity shall be responsible for
any failures of Fidelity or its agents to comply with
reasonable Fidelity physical safety and security
procedures then in effect at the applicable Fidelity
Service Locations or reasonable physical safety and
security procedures then in effect at the applicable
MGEN Service Locations, to the extent that such
non-compliance causes damages to MGEN.
8.1.2 MGEN shall maintain and enforce at the MGEN Service
Locations reasonable physical safety and security
procedures. MGEN shall be responsible for any failures
of MGEN or its agents to comply with reasonable MGEN
physical safety and security procedures then in effect
at the applicable MGEN Service Locations or reasonable
physical safety and security procedures then in effect
at the applicable Fidelity Service Locations, to the
extent that such non-compliance causes damages to
Fidelity.
8.1.3 MGEN shall comply at the Fidelity Service Locations with
Fidelity's physical safety and security procedures. MGEN
shall be responsible for any failures of MGEN or its
agents to comply with Fidelity's physical safety and
security procedures then in effect at the applicable
Fidelity Service Locations, to the extent that such
non-compliance causes damages to Fidelity.
18
8.1.4 Fidelity shall comply at MGEN Service Locations with
MGEN's physical safety and security procedures. Fidelity
shall be responsible for any failures of Fidelity or its
agents to comply with MGEN's physical safety and
security procedures then in effect at the applicable
MGEN Service Locations, to the extent that such
non-compliance causes damages to MGEN.
8.2 DATA SECURITY. Except to the extent otherwise agreed by the
Parties in a Project Scope Document, MGEN shall establish and
maintain good and sound safeguards against the destruction, loss
or alteration of the Fidelity Data in the possession of MGEN. In
the event MGEN or MGEN agents, representatives and
subcontractors, discover or are notified of a breach or
potential breach of security relating to the Fidelity Data, MGEN
shall immediately (1) notify the Fidelity Project Coordinator
and Project Manager, as the case may be, of such breach or such
potential breach and (2) if the applicable Fidelity Data was in
the possession of MGEN or MGEN agents, representatives and
subcontractors, at the time of such breach or such potential
breach, MGEN shall (a) investigate such breach or such potential
breach and (b) inform Fidelity of the results of such
investigation.
8.3 SECURITY RELATING TO SHARED MGEN ENVIRONMENTS. If MGEN provides
the Designated Services to Fidelity from an MGEN Service
Location that also provides services to or processes data for
any other MGEN customer, MGEN shall, in addition to its
obligations under Section 2.13.2, at Fidelity's request,
demonstrate to Fidelity's reasonable satisfaction that
Fidelity's Confidential Information and Fidelity Data will not
be disclosed to any such other MGEN customer.
8.4 CONDUCT OF MGEN PERSONNEL. While at any Fidelity Service
Location, the Project Staff shall (1) comply with the requests,
rules and regulations of Fidelity regarding personal and
professional conduct (including the wearing of an identification
badge or personal protective equipment and adhering to
Fidelity's facilities regulations and general safety practices
or procedures) applicable to such Fidelity Service Locations and
(2) otherwise conduct themselves in a professional and
businesslike manner. MGEN shall cause the Project Staff to
maintain and enforce the confidentiality provisions of this
Agreement and any confidentiality provisions of any applicable
Project Scope Document. In addition, as soon as reasonably
practicable after the Effective Date, MGEN shall cause each of
its employees to execute a confidentiality agreement covering
the Confidential Information in a form substantially similar to
that attached hereto as Exhibit B. In the event that Fidelity
determines that a particular member of the Project Staff is not
conducting himself or herself in accordance with this Section
8.4, Fidelity may notify MGEN of such conduct. Upon receipt of
such notice, MGEN shall promptly (a) investigate the matter and
take appropriate action which may include (i) removing such
employee from the Project Staff and providing Fidelity with
prompt notice of such removal and (ii) replacing such employee
with a similarly qualified individual or (b) take other
appropriate disciplinary action to prevent a recurrence. In the
event there are repeat violations of this Section by a
particular member of the Project Staff, MGEN shall promptly
remove the individual from the Project Staff as set forth above.
8.5 FIDELITY DATA. Fidelity Data shall be and remain the property of
Fidelity, and shall be "Confidential Information" under Section
8.6. Upon the termination of this Agreement for any reason, or
on such date that the same shall no longer be required
19
by MGEN in order to provide the Services, Fidelity Data shall be
either erased from the data files maintained by MGEN or, if
Fidelity so elects, returned to Fidelity by MGEN at MGEN's
expense. Fidelity Data shall not be used by MGEN for any purpose
other than that of providing Services, nor shall such data or
any part of such data be disclosed, sold, assigned, leased or
otherwise disposed of to third parties by MGEN or commercially
exploited by or on behalf of MGEN, its employees or agents. MGEN
hereby acknowledges that disclosure of some such data may be
governed by various state and federal laws and regulations, and
MGEN hereby agrees to comply with all such laws and regulations.
8.6 DEFINITION OF CONFIDENTIAL INFORMATION. The term "Confidential
Information" shall mean all (a) non-public information and
materials (in any medium), including but not limited to any
business, financial or strategic plans and information and
software Source Code, in each case, of the Disclosing Party (as
defined in Section 8.7) or its Affiliates; (b) information
subject to an obligation of confidence to a third party of which
the Receiving Party (as defined in Section 8.7) has been advised
in writing; and (c) any information marked confidential,
restricted or proprietary by either Party or any other person to
whom such party has an obligation of confidence; provided,
however, that the failure of either Party to so ▇▇▇▇ any
material shall not relieve the Receiving Party of the obligation
to maintain the confidentiality of any unlegended material which
the Receiving Party knows or should reasonably know contains
Confidential Information. Each Party's know-how, network design
and equipment configurations and techniques relating to network
and network management developed or utilized during the course
of this Agreement are Confidential Information of such Party.
The terms of this Agreement, including pricing and financial
data, discussions, negotiations and proposals from one Party to
the other Party related directly hereto; and invoices and
service records shall be Confidential Information of both
Parties.
8.7 DISCLOSURE OF CONFIDENTIAL INFORMATION. In carrying out the
Services contemplated by this Agreement, each party (the
"Disclosing Party") may from time to time during the term of
this Agreement disclose to the other party (the "Receiving
Party") certain information regarding the Disclosing Party's
business, delivery mechanisms, personnel, technical, marketing,
financial, employee, planning, and other confidential or
proprietary information ("Confidential Information").
8.8 PROTECTION OF CONFIDENTIAL INFORMATION. The Receiving Party will
not use any Confidential Information of the Disclosing Party for
any purpose not expressly permitted by this Agreement, and will
disclose the Confidential Information of the Disclosing Party
only to those employees or contractors of the Receiving Party
who have a need to know such Confidential Information for
purposes of this Agreement and who are under a duty of
confidentiality no less restrictive than the Receiving Party's
duty hereunder. The Receiving Party will protect the Disclosing
Party's Confidential Information from unauthorized use, access,
or disclosure in the same manner as the Receiving Party protects
its own confidential or proprietary information of a similar
nature and with no less than reasonable care.
8.8.1 EXECUTION OF NON-DISCLOSURE AGREEMENTS BY MGEN
EMPLOYEES. In addition, MGEN shall insure that each of
its employees who qualifies as a "Restricted Position
Employee" under Section 3.3 shall execute a non-
20
disclosure agreement in a form reasonably satisfactory
to Fidelity's counsel prior to commencing work on any
Project.
8.9 EXCEPTIONS. The Receiving Party's obligations hereunder with
respect to any Confidential Information of the Disclosing Party
will terminate if and when the Receiving Party can document that
such information: (a) was already known to the Receiving Party
at the time of disclosure by the Disclosing Party; (b) was
disclosed to the Receiving Party by a third party who had the
right to make such disclosure without any confidentiality
restrictions; (c) is or through no fault of the Receiving Party
has become, generally available to the public; or (d) is
independently developed by the Receiving Party without access
to, or use of, the Disclosing Party's Confidential Information.
In addition, the Receiving Party will be allowed to disclose
Confidential Information of the Disclosing Party to the extent
that such disclosure is (i) approved in writing by the
Disclosing Party, (ii) necessary for the Receiving Party to
enforce its rights under this Agreement in connection with a
legal proceeding; or (iii) required by law or by the order of a
court or similar judicial or administrative body, provided that
the Receiving Party notifies the Disclosing Party of such
required disclosure promptly and in writing and cooperates with
the Disclosing Party, at the Disclosing Party's reasonable
request and expense, in any lawful action to contest or limit
the scope of such required disclosure.
8.10 RETURN OF CONFIDENTIAL INFORMATION. The Receiving Party will
return to the Disclosing Party or destroy all Confidential
Information of the Disclosing Party in the Receiving Party's
possession or control promptly upon the written request of the
Disclosing Party on the earlier of the expiration or termination
of this Agreement. At the Disclosing Party's request, the
Receiving Party will certify in writing that it has fully
complied with its obligations under this Section.
8.11 AUDIT RIGHTS. Fidelity shall have the right to have an
independent certified public accounting firm conduct an audit at
any time during the Term hereof, or within three years
thereafter, to verify any of the Fees or charges hereunder. If
such audit determines that MGEN has overcharged Fidelity, MGEN
shall immediately credit or pay (as directed by Fidelity)
Fidelity the amount of the overcharge. If the audit determines
that MGEN has undercharged Fidelity, Fidelity shall immediately
pay MGEN the amount of the undercharge. If the audit discloses
an underpayment or overpayment of more than five percent in any
month covered by the audit, MGEN shall pay for the cost of the
audit. In all other cases, the cost of any audit hereunder shall
be borne by Fidelity.
8.12 THIRD PARTY DISCOVERY. If any governmental agency or any third
party shall seek in any way to discover or otherwise gain access
to, ("Discovery") any System, Confidential Information or any
other data or records of one party that may be in the possession
of the other party, the other party shall immediately notify the
first party and shall, at the first party's written request and
at the first party's expense, and cooperate with the first party
in the first party's efforts to preclude, quash, limit or impose
protective orders or similar restrictions on such Discovery.
9. PAYMENTS TO MGEN
21
9.1 FEES. With respect to each Project, Fidelity shall pay Fees to
MGEN commencing upon the Effective Date of the relevant Project
Scope Document. A Project Scope Document may, at Fidelity's
election, contain provisions for the determination of the amount
of Fees in respect of Services performed for a specific Project
and such provisions shall be controlling; provided, however, the
methodology for such determination shall not be inconsistent
with this Section. In the absence of an applicable Project Scope
Document, the amount of Fees owing to MGEN shall be determined
as set forth below.
9.1.1 HOURLY RATES. Fees for Consulting Services, Out of Scope
Services and Design Services shall be computed based on
the hourly rates of each MGEN employee or contractor
performing the underlying Services. Such hourly fees
shall be in accordance with the Rate Schedule, attached
as Schedule 8. MGEN shall track and record hours
expended in performing such Services, and shall include
a breakdown of such hours on its invoices, as provided
in Section 9.3.
9.1.2 FIXED ANNUAL CHARGES. Fees relating to Maintenance and
Support Services shall be fixed and shall be based on
the number of users during the billing period in
question, irrespective of the actual Services rendered
during such period. Maintenance and Support fees under
this Section 9.1.2 for Year One shall be as specified on
Schedule 9. Fees for Website Hosting shall similarly be
fixed for the billing period in question, and such fees
for Year One shall be as specified on Schedule 10
9.1.3 DEVELOPMENT QUOTES. Fees relating to Systems Development
Projects (other than Design Services, which shall be
billed and paid as Consulting Services under 9.1.1)
shall be determined in accordance with the Bid Procedure
set forth in Section 2.6.4.
9.2 TIME AND MANNER OF PAYMENT. Unless otherwise provided, at
Fidelity's option, in an applicable Project Scope Document,
Fidelity will pay MGEN, by wire transfer to a bank account
designated in writing by MGEN any sum due MGEN hereunder or
pursuant to a Project Scope Document on or before the thirtieth
calendar day after receipt by Fidelity of an invoice from MGEN
for such sums, such invoices to be submitted to Fidelity in
accordance with Section 9.3 and no sooner than the end of the
calendar month to which the invoiced sums apply. Any sum due
MGEN that is not paid within the time specified above shall
accrue interest until paid at a rate of interest equal to the
lesser of nine tenths of one percent (0.9%) per month, or the
maximum rate of interest allowed by applicable law. For purposes
of this Section 9.2, "day of receipt" shall be the day the
invoice is delivered by hand or transmitted electronically to
Fidelity's premises, the next business day after it is deposited
with an overnight delivery service, or three business days after
it is deposited in the U.S. mail.
9.3 DETAILED INVOICES. MGEN shall provide invoices that include
sufficient pricing detail to enable Fidelity to validate the
Fees charged. Notwithstanding the foregoing, each invoice shall
conspicuously reference the applicable Project and contain a
detailed narrative of the Services actually rendered. Upon
Fidelity's request, MGEN shall provide customized invoices to
satisfy individual billing
22
requirements of Fidelity, such requirements to be reasonably
determined by Fidelity in its sole discretion.
9.4 EXPENSES. Neither Party shall be responsible for any expenses
incurred by the other Party in connection with the provision of
the Services, unless specifically set forth in this Agreement,
any Project Scope Document or as agreed in advance by the Party
to be charged. If the Parties agree that Fidelity shall be
responsible for any of MGEN's out-of-pocket expenses incurred in
connection with this Agreement or any Project Scope Document,
all reimbursements shall be made in accordance with Fidelity's
reimbursement policy.
9.5 PRICING ADJUSTMENTS. MGEN shall have the right on an annual
basis (a) to adjust the hourly rates for the Project Staff and
other employees performing Services hereunder or pursuant to any
Project Scope Document, and (b) to adjust the annual charge for
Maintenance and Support (as provided in Schedule 9) and/or for
Website Hosting (as provided in Schedule 10) provided that any
such increases during the Initial Term shall be limited to the
cumulative percentage increase in the U.S. Consumer Price Index
for all prior years since the last rate increase or since the
execution of this Agreement, whichever is later. In the event
that MGEN can demonstrate that industry-wide price increases are
greater than increases permissible under the previous sentence,
then the parties shall negotiate in good faith to determine an
appropriate price level. During any Renewal Term MGEN may adjust
rates to its then-current standard rates.
9.6 MOST FAVORED CUSTOMER PRICING. The prices that MGEN shall charge
Fidelity with respect to any Services rendered or to be rendered
hereunder, or under any Project Scope Document, shall be no
higher than those offered to any direct competitor of Fidelity
for substantially similar Services. In the event MGEN is in
breach of the foregoing, such lower prices shall apply to
Fidelity effective as of the date such lower rate were first
offered to such other customer, and appropriate adjustments
shall thereafter be reflected on all appropriate Project
invoices.
9.7 TAXES. Fidelity shall pay, or reimburse MGEN for payment of, any
taxes or amounts paid in lieu of taxes, including privilege or
excise taxes based on the gross revenue of MGEN, however
designated or levied, based upon this Agreement, the charges of
MGEN or the Systems, the Services or materials provided under
this Agreement. MGEN is only responsible for the payment of
franchise taxes, state and local personal property taxes,
employment taxes for its employees and taxes based on the net
income of MGEN.
9.8 PRORATION. All periodic charges under this Agreement are to be
computed on a calendar month basis, and will be prorated for any
partial month.
9.9 RIGHTS OF SET-OFF. With respect to any amount to be reimbursed
or paid by one Party to the other pursuant to this Agreement,
the Party owing such reimbursement or payment may, at its
option, pay or reimburse that amount offsetting amounts already
owed to such Party under this Agreement.
10. REPRESENTATIONS AND WARRANTIES
23
10.1 BY FIDELITY. Fidelity represents and warrants to MGEN as
follows.
10.1.1 CORPORATE POWER. Fidelity and each Member (a) is a
corporation duly incorporated, validly existing and in
good standing under the State of Delaware (for Fidelity)
or under the laws of the state of incorporation of such
other Member and (b) has full corporate power to own,
lease, and operate its properties and assets, to conduct
its business as such business is currently being
conducted, and to consummate the transactions
contemplated by this Agreement.
10.1.2 AUTHORITY. This Agreement has been duly authorized,
executed and delivered and constitutes a valid and
binding agreement, enforceable against Fidelity in
accordance with this Agreement's terms, subject to the
effect of bankruptcy, insolvency, moratorium and other
laws now or hereafter in effect relating to and
affecting the rights of creditors generally and to
equitable principles of general application.
10.1.3 NO BREACHES. Neither the execution or delivery of this
Agreement, nor the consummation of any of the
transactions contemplated herein, will result in the
breach of any term or provision of, or constitute a
default under, any charter provision or bylaw, or
material agreement (subject to any applicable required
consent), order, law, rule or regulation to which it is
a party or which is otherwise applicable to it.
10.2 BY MGEN. MGEN represents and warrants to Fidelity as follows:
10.2.1 CORPORATE POWER. MGEN (a) is a corporation duly
incorporated, validly existing and in good standing
under the laws of the state of its incorporation and (b)
has full corporate power to own, lease, and operate its
properties and assets, to conduct its business as that
business is currently being conducted, and to consummate
the transactions contemplated by this Agreement.
10.2.2 AUTHORITY. This Agreement has been duly authorized,
executed and delivered and constitutes a valid and
binding agreement, enforceable against MGEN in
accordance with this Agreement's terms, subject to the
effect of bankruptcy, insolvency, moratorium and other
laws now or hereafter in effect relating to and
affecting the rights of creditors generally and to
equitable principles of general application.
10.2.3 NO BREACHES. Neither the execution or delivery of this
Agreement, nor the consummation of any of the
transactions contemplated herein, will result in the
breach of any term or provision of, or constitute a
default under, any charter provision or bylaw, or
material agreement (subject to any applicable required
consent), order, law, rule or regulation to which it is
a party or which is otherwise applicable to it.
10.2.4 COMMERCIAL PRACTICE WARRANTY. The Services shall be
rendered by qualified MGEN personnel, and shall be
consistent with the highest commercial practice.
24
10.2.5 WARRANTY OF COMPLIANCE. In addition to fulfilling the
warranties set forth in Section 10.2.4, all Services and
Developed Systems shall comply in all material respects
to (a) the Technology Proposal (as it may be amended
from time to time), (b) Specifications, (c)
Documentation, (d) applicable Service Levels, and (d)
the Parties' discussions, as embodied in written and
approved design and functional layout documents.
10.2.6 NON-INFRINGEMENT. The Software shall not infringe the
Intellectual Property Rights of any third party as may
now or in the future exist and MGEN has the right to
grant all of the licenses to Fidelity hereunder, free
from all claims, liens, security interests or other
encumbrances. To the best of MGEN's knowledge, the
Software shall not infringe the Intellectual Property
Rights of any third party as may now or in the future
exist. MGEN shall not place on any of such Software any
liens, security interest or other encumbrances that
would in any manner affect Fidelity's licenses under
this Agreement.
10.2.7 NO VIRUSES. The Software does not and shall not contain,
at the time of installation, any timer, clock, counter,
or other limiting design or routine, nor (to the best of
MGEN's knowledge) any virus, that causes or could cause
any Fidelity Systems, Developed System or Fidelity Data
(or any portion thereof) to become erased, inoperable,
impaired, or otherwise incapable of being used in the
full manner for which it was designed and licensed
(including, without limitation, any design or routine
that would impede copying thereof) after being used or
copied a certain number of times, or after the lapse of
a certain period of time, or after the occurrence or
lapse of any similar triggering factor or event, or for
any other reason. Furthermore, the Software does not and
shall not contain any virus, limiting design or routine
that causes or could cause any of them to become erased,
inoperable, impaired, or otherwise incapable of being
used in the full manner for which it was designed and
licensed pursuant to this Agreement because it has been
installed on or moved to a hardware unit or system that
has a serial number, model number, or other
identification different from the identification of the
one on which it was originally installed.
10.2.8 COMPLIANCE. In performing its obligations hereunder,
MGEN shall comply in all material respects with
requirements all applicable Federal, state and local
statutes, regulations and ordinances, including, without
limitation, the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
10.3 DISCLAIMER. EXCEPT AS SPECIFIED IN THIS SECTION 10, NEITHER
PARTY MAKES ANY OTHER WARRANTIES AND EXPLICITLY DISCLAIMS ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A SPECIFIC
PURPOSE.
10.4 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY, OR ANY
OF ITS AFFILIATES, PARTNERS, OFFICERS, EMPLOYEES, DIRECTORS,
AGENTS, CONTRACTORS, REPRESENTATIVES, SUCCESSORS OR ASSIGNS, AS
SUCH, BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INCIDENTAL,
INDIRECT,
25
CONSEQUENTIAL OR SPECIAL DAMAGES UNDER OR IN CONNECTION WITH
THIS AGREEMENT. IN ANY EVENT, THE TOTAL LIABILITY OF EITHER
PARTY, AND ITS AFFILIATES, PARTNERS, OFFICERS, EMPLOYEES,
DIRECTORS, REPRESENTATIVES, SUCCESSORS AND ASSIGNS, TO THE OTHER
PARTY FOR ANY LOSSES, IN CONNECTION WITH THIS AGREEMENT SHALL
NOT EXCEED THE TOTAL COMPENSATION PAID BY FIDELITY TO MGEN FOR
THE SERVICES, DURING THE CONSECUTIVE THREE (3) MONTH PERIOD
IMMEDIATELY PRECEDING THE OCCURRENCE OF THE EVENT(S) GIVING RISE
TO SUCH LIABILITY, PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL
NOT APPLY TO MGEN BREACHES OF SECTIONS 5.2.4, 5.2.5, 8, 9.6,
10.2.6 AND 10.2.8.
11. TERM AND TERMINATION
11.1 TERM. This Agreement shall begin on the Effective Date and
unless sooner terminated pursuant to the terms hereof, shall
expire on three years from the Effective Date ("Expiration
Date") ("Initial Term"), except as provided in this Section
11.1. Fidelity shall enjoy an irrevocable option to elect to
extend the Initial Term for an additional three-year period, and
Fidelity shall exercise this option by giving MGEN written
notice of such election no later than thirty (30) days before
the expiration of the Initial Term (the "Optional Term"). After
expiration of the Optional Term, or expiration of the Initial
Term (if Fidelity elects not to exercise its option to extend),
this Agreement shall automatically renew for up to three terms
of one year each (each, a "Renewal Term"), unless (a) in the
case of notice by Fidelity, at least ninety days prior to the
expiration of the Term Fidelity notifies MGEN in writing of its
decision not to renew, or (b) in the case of notice by MGEN, at
least six (6) months prior to the expiration of the Term MGEN
notifies Fidelity in writing of its decision not to renew. It is
agreed and understood that "Term" shall refer to the Initial
Term, the Optional Term, Renewal Terms, or some combination, or
all, of these items, as the context permits.
11.2 TERMINATION FOR CAUSE. If either party materially or repeatedly
defaults in the performance of any of its duties or obligations
under this Agreement (except for a default in payments to MGEN,
which is governed by Section 11.3), which default is not
substantially cured with fifteen (15) days after written notice
is given to the defaulting party specifying the default, or,
with respect to those defaults which cannot reasonably be cured
within such fifteen (15) days, if the defaulting party fails to
proceed within such fifteen (15) days to commence curing said
default and to proceed with all due diligence substantially to
cure the default, then the party not in default may, by giving
written notice of termination to the defaulting party, terminate
this Agreement as of a date specified in the notice of
termination and no termination charge shall be due or payable in
such event.
11.3 TERMINATION FOR NONPAYMENT. If Fidelity defaults in the payment
when due of any amount due to MGEN and does not, within fifteen
(15) days after being given written notice, cure such default,
or, if Fidelity in good faith disputes the amount due, but does
not deposit the disputed amount in escrow in a major U.S.
commercial bank to be designated by MGEN, with interest to be
allocated to the party entitled to the principal upon resolution
of the dispute, then MGEN may, by giving written
26
notice to Fidelity, terminate this Agreement as of a date
specified in the notice of termination.
11.4 TRANSITION ASSISTANCE ON TERMINATION. Upon termination of this
Agreement for any reason, including the breach hereof by
Fidelity, MGEN shall, if so requested by Fidelity, provide
assistance to Fidelity as hereinafter set forth.
11.4.1 TRANSITION ASSISTANCE. MGEN shall provide Fidelity with
reasonable training and other assistance to minimize
disruption in the transition of the Services to Fidelity
or a third-party. Training may be provided from the time
of Fidelity's request to the date of termination or
expiration and for up to six additional months (the
"Transition Period") following termination or
expiration. All such training services shall, for
purposes of this Agreement, be deemed Consulting
Services, and shall be compensated in accordance with
Section 9.1.1. If the termination was caused by
Fidelity's breach, at MGEN's request, Fidelity shall pay
to MGEN prior to the commencement of such transition
services the reasonable estimated costs of such
services.
11.4.2 FIDELITY'S RIGHT TO HIRE MGEN EMPLOYEES. MGEN
acknowledges that the persons who may be most valuable
to Fidelity upon any termination or expiration of this
Agreement are members of the MGEN Project Staff. MGEN
agrees that upon termination or expiration of this
Agreement or any applicable Project Scope Document,
Fidelity shall have the right to solicit members of the
MGEN Project Staff for employment by Fidelity. MGEN
agrees that it shall not interfere with any such
solicitation efforts by Fidelity and shall cooperate by
executing appropriate waivers with respect to any
contractual or other non-solicitation or non-competition
rights it might have with respect to its Project Staff,
or other documents reasonably requested by Fidelity.
11.5 RIGHT OF IMMEDIATE PAYMENT. If MGEN terminates this Agreement
for Fidelity's default, and Fidelity has not disputed such
breach, Fidelity shall immediately pay MGEN for all Services
rendered and Equipment procured through the termination date.
Notwithstanding anything to the contrary, the failure of
Fidelity to make any payments hereunder shall not relieve MGEN
from its required performance after the termination of this
Agreement.
11.6 SURVIVAL. The following provisions shall survive the termination
or expiration of this Agreement: Section 5.1, Section 5.2,
Section 5.4, , Section 8.8, Section 8.11, Section 10.2, Section
10.3, Section 10.4, Section 12, and Section 13.
12. INDEMNITIES
12.1 INDEMNITY BY FIDELITY. Fidelity agrees to indemnify, defend and
hold harmless MGEN, and its respective officers, directors,
shareholders, employees, agents, successors and assigns, in
accordance with the procedures described in Section 12.3, from
any and all Losses arising from or in connection with:
12.1.1 The inaccuracy as of the Effective Date of any of the
representations or warranties by Fidelity set forth in
this Agreement; and
27
12.1.2 Any claims of infringement made against MGEN of any
United States letters patent, or a trade secret, or any
copyright, trademark, service ▇▇▇▇, trade name or
similar proprietary rights conferred by contract or by
common law or by any law of the United States or any
state, alleged to have occurred because of Systems or
other resources or items provided to MGEN by Fidelity.
12.2 INDEMNITY BY MGEN. MGEN agrees to indemnify, defend and hold
harmless Fidelity and its officers, directors, shareholders,
employees, agents, successors and assigns, in accordance with
the procedures described in Section 12.3, from any and all
Losses arising from or in connection with:
12.2.1 The breach of any representation, warranty or covenant
by MGEN set forth in this Agreement;
12.2.2 Any claims of infringement made against Fidelity of any
United States letters patent, or a trade secret, or any
copyright, trademark, service ▇▇▇▇, trade name or
similar proprietary rights conferred by contract or by
common law or by any law of the United States or any
state, arising from Fidelity's use of MGEN Software or
the NGS System or other resources or items provided to
Fidelity by MGEN; and
12.3 INDEMNIFICATION PROCEDURES.
12.3.1 NOTICE. Promptly after receipt by any person entitled to
indemnification under Sections 12.1 or 12.2 (an
"Indemnified Party") of notice of the commencement (or
threatened commencement) of any civil, criminal,
administrative or investigative action or proceeding
involving a claim in respect of which the Indemnified
Party will seek indemnification, the Indemnified Party
shall notify the party which is obligated to provide
such indemnification (an "Indemnifying Party") of such
claim in writing.
12.3.2 EFFECT OF FAILURE TO PROVIDE TIMELY NOTICE. No failure
to notify the Indemnifying Party shall relieve it of its
obligations under this Agreement except to the extent
that it can demonstrate damages attributable to the
Indemnified Party's failure to notify.
12.3.3 CONTROL BY INDEMNIFYING PARTY. The Indemnifying Party
shall be entitled to have sole control over the defense
and/or settlement of such claim, provided that, within
15 days after receipt of such written notice, the
Indemnifying Party notifies the Indemnified Party of its
election to so assume full control, and provided further
that the Indemnifying Party can demonstrate to the
reasonable satisfaction of the Indemnified Party that
the Indemnifying Party has the financial capability to
indemnify the Indemnified Party (such satisfactory
demonstration is sometimes hereinafter referred to as
"Demonstrated Fiscal Ability"). In that event: (1) the
Indemnified Party shall be entitled to participate in
the defense of such claim and to employ counsel at the
Indemnifying Party's reasonable expense to assist in the
handling of such claim; (2) the Indemnifying Party shall
obtain the prior written approval of the Indemnified
Party before entering into any
28
settlement of such claim or ceasing to defend against
such claim if such settlement or cessation would cause
injunctive or other relief to be imposed against the
Indemnified Party; and (3) the Indemnified Party shall
be free to enter direct discussions with some or all
claimants for purposes of settlement, and shall be free
to enter into such settlement(s) on terms agreeable to
the Indemnified Party (upon provision of reasonable
notice to and consultation with the Indemnifying Party);
provided, however, that Fidelity as the Indemnifying
Party shall not be required to reimburse MGEN's expenses
if Fidelity has assumed control over the defense, and
provided further that if MGEN is the Indemnified Party
it shall not engage in or consummate any settlement
discussions without the written approval and authority
of Fidelity.
12.3.4 PARTICIPATION BY INDEMNIFIED PARTY. If the Indemnifying
Party does not assume sole control over the defense of
such claim as provided in this Section 12.3, the
Indemnifying Party may participate in such defense and
the Indemnified Party shall have the right to defend the
claim in such manner as it may deem appropriate, at the
cost and expense of the Indemnifying Party. The
Indemnifying Party shall promptly reimburse the
Indemnified Party for such costs and expenses, in
accordance with the applicable Section of this Section
12. An Indemnifying Party shall not be required to
indemnify any Indemnified Party for any amount paid or
payable by such Indemnified Party in the settlement of
any such claim which was agreed to without the written
consent of the Indemnifying Party.
12.3.5 FINANCIAL CAPACITY. The Indemnified Party may request,
from time to time, that the Indemnifying Party
demonstrate that it continues to have the financial
capability to indemnify the Indemnified Party, and if
the Indemnifying Party is unable to demonstrate such to
the Indemnifying Party's reasonable satisfaction, the
Indemnified Party may assume full control of the defense
of such claim, but the Indemnifying Party shall continue
to be responsible for indemnifying the Indemnified
Party.
12.4 SUBROGATION. In the event that an Indemnifying Party shall be
obligated to indemnify an Indemnified Party pursuant to Section
12.1 or Section 12.2, the Indemnifying Party shall, upon payment
of such indemnity in full, be subrogated to all rights of the
Indemnified Party with respect to the claims to which such
indemnification relates.
12.5 NON-EXCLUSIVE REMEDIES. The rights (where applicable) of either
Party (a) to indemnification under this Section 12, (b) to
terminate this Agreement under Section 11, (c) to Performance
Credits under Section 4; or (d) to other remedies set forth in
this Agreement, are not exclusive, and are in addition to and
not in place of any other rights and remedies that one Party may
have against the other Party for any act, failure to act, or
breach of this Agreement.
13. INSURANCE
13.1 INSURANCE MAINTAINED BY MGEN. During the term of this Agreement,
MGEN shall maintain at its own expense, and require MGEN agents,
representatives and
29
subcontractors, to maintain at their own expense or MGEN'
expense, commercial general liability insurance (including
contractual liability insurance), business interruption
insurance, and insurance appropriate to cover risks presented by
the Websites, the Software, the Systems, and Fidelity Data
(collectively "Insurance Coverage"). Such Insurance Coverage
during the Term shall be in an amount not less than $50,000,000.
MGEN shall maintain insurance for such period after the Term,
and in such amount as Fidelity may reasonably determine, in
light of continuing insurable risks (if any) presented by MGEN's
services hereunder.
13.2 INSURANCE DOCUMENTATION. MGEN shall, upon Fidelity's request,
furnish Fidelity with certificates of insurance and other
appropriate documentation (including evidence of renewal of
insurance) evidencing all coverage referenced herein. Such
certificates and other documentation shall include a provision
whereby 30 days' notice must be received by Fidelity prior to
coverage cancellation or material alteration of the coverage by
MGEN or the applicable insurer. Such cancellation or material
alteration shall not relieve MGEN of its continuing obligation
to maintain insurance coverage in accordance with this Section
13.
14. GENERAL PROVISIONS
14.1 BINDING NATURE AND ASSIGNMENT. This Agreement shall bind the
parties and their successors and permitted assigns. Neither
party may assign this Agreement without the prior written
consent of the other, which consent shall not be unreasonably
withheld or delayed. Any other assignment attempted without the
written consent of the other party shall be void.
14.2 NOTICES. When one party is required or permitted to give notice
to the other, such notice shall be deemed given when delivered
by hand or when mailed by United States mail, registered or
certified mail, return receipt requested, postage prepaid, and
addressed as follows:
MGEN: Micro General Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Fidelity: Fidelity National Financial, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Either party may change its address for notification purposes by
giving the other party written notice of the new address and the
date upon which it will become effective.
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14.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
single agreement between the parties.
14.4 RELATIONSHIP OF PARTIES. MGEN in furnishing services to Fidelity
under this Agreement is acting only as an independent
contractor. Except where this Agreement expressly provides
otherwise, MGEN does not undertake by this Agreement or
otherwise to perform any obligation of Fidelity, whether
regulatory or contractual, or to assume any responsibility for
Fidelity's business or operations. MGEN has the sole right and
obligation to supervise, manage, contract, direct, procure,
perform or cause to be performed, all work to be performed and
resources used by MGEN under this Agreement, except where it is
specifically stated that Fidelity must give approval or consent.
14.5 APPROVALS AND SIMILAR ACTIONS. Where agreement, approval,
acceptance, consent or similar action by either party is
required by any provision of this Agreement, such action shall
not be unreasonably delayed or withheld, unless specifically
permitted by this Agreement.
14.6 FORCE MAJEURE. Each party shall be excused from performance
under this Agreement and shall have no liability to the other
party for any period it is prevented from performing any of its
obligations (other than payment obligations), in whole or in
part, as a result of delays caused by the other party or by an
act of God, war, civil disturbance, court order, labor dispute,
third party performance or nonperformance, or other cause beyond
its reasonable control, including failures or fluctuations, in
electrical power, heat, light, or telecommunications, and such
nonperformance shall not be a default under, or grounds for
termination of, this Agreement.
14.7 SEVERABILITY. If any provision of this Agreement is held to be
unenforceable, then both parties shall be relieved of all
obligations arising under such provision, but only to the extent
that such provision is unenforceable, and this Agreement shall
be deemed amended by modifying such provision to the extent
necessary to make it enforceable while preserving its intent or,
if that is not possible, by substituting another provision that
is enforceable and achieves the same objective and economic
result. If such unenforceable provision does not relate to the
payments to be made to MGEN, and if the remainder of this
Agreement is capable of substantial performance, then the
remainder of this Agreement shall be enforced to the extent
permitted by law. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT
EACH PROVISION OF THIS AGREEMENT WHICH PROVIDES FOR A LIMITATION
OF LIABILITY, DISCLAIMER OF WARRANTIES, INDEMNIFICATION OR
EXCLUSION OF DAMAGES OR OTHER REMEDIES IS INTENDED TO BE
SEVERABLE AND INDEPENDENT OF ANY OTHER PROVISION AND TO BE
ENFORCED AS SUCH. FURTHER, IT IS EXPRESSLY UNDERSTOOD AND AGREED
THAT IN THE EVENT ANY REMEDY UNDER THIS AGREEMENT IS DETERMINED
TO HAVE FAILED OF ITS ESSENTIAL PURPOSE, ALL LIMITATIONS OF
LIABILITY AND EXCLUSIONS OF DAMAGES OR OTHER REMEDIES SHALL
REMAIN IN EFFECT.
14.8 WAIVER. No delay or omission by either party to exercise any
right or power it has under this Agreement shall impair or be
construed as a waiver of such right or power. A waiver by either
party of any covenant or breach shall not be construed to
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be a waiver of any succeeding breach or of any other covenant.
All waivers must be in writing and signed by the party waiving
its rights.
14.9 ATTORNEYS' FEES. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable
attorneys fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be
entitled.
14.10 MEDIA RELEASES. All media releases, public announcements and
public disclosures by Fidelity or MGEN or their employees or
agents relating to this Agreement or its subject matter,
including promotional or marketing materials shall be
coordinated with and approved by the other party prior to
release. This restriction does not apply (1) to any announcement
intended solely for internal distribution within Fidelity or
within MGEN or (2) any disclosure required by legal, accounting
or regulatory requirements beyond the reasonable control of the
disclosing party.
14.11 NO THIRD PARTY BENEFICIARIES. The parties agree that this
Agreement is for the benefit of the parties hereto and is not
intended to confer any legal rights or benefits on any third
party and that there are no third party beneficiaries to this
Agreement or any part or specific provision of this Agreement,
except for any Member.
14.12 ENTIRE AGREEMENT. This Agreement, including all of its
Schedules, each of which is incorporated into this Agreement, is
the entire agreement between the parties with respect to its
subject matter, and there are no other representations,
understandings or agreements between the parties relative to
such subject matter. No amendment to, or change, waiver or
discharge of any provision of this Agreement shall be valid
unless in writing and signed by an authorized representative of
the party against which such amendment, change, waiver or
discharge is sought to be enforced.
14.13 GOVERNING LAW AND DISPUTE. This Agreement shall be governed by
the laws, other than choice of law rules, of the State of
California.
IN WITNESS WHEREOF, MGEN and Fidelity have each caused this Agreement to
be signed and delivered by its duly authorized representative.
FIDELITY: FIDELITY NATIONAL FINANCIAL, INC.
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and COO
MGEN: MICRO GENERAL CORP.
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By:
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CEO and President
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