EXHIBIT 10.23
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
MASTER SOFTWARE SERVICES AGREEMENT
BETWEEN
PERITUS SOFTWARE SERVICES, INC.
AND
BULL HN INFORMATION SYSTEMS INC.
DATED
AS OF FEBRUARY 3, 1992
TABLE OF CONTENTS
-----------------
MASTER SOFTWARE SERVICES AGREEMENT
BETWEEN
PERITUS SOFTWARE SERVICES, INC.
AND
BULL HN INFORMATION SYSTEMS INC.
DATED
FEBRUARY 3, 1992
Section Heading Page No.
------- ------- --------
1. Definitions..............................................................................................4
-----------
2. Term.....................................................................................................9
----
3. Services to be Provided by Peritus/Additional Obligations of Peritus....................................10
--------------------------------------------------------------------
4. Limitation on Services; Availability of Additional Services.............................................13
-----------------------------------------------------------
5. Charges.................................................................................................15
-------
6. Obligations of Bull.....................................................................................15
-------------------
7. Non-Solicitation and Non-Competition....................................................................17
------------------------------------
8. Property Rights and Confidentiality.....................................................................18
-----------------------------------
9. Contract Management.....................................................................................21
-------------------
10. Additional Remedies Under Certain Circumstances.........................................................22
-----------------------------------------------
11. Warranties and Indemnification; Including Limitation of Liability and
---------------------------------------------------------------------
Remedies................................................................................................27
--------
12. Force Majeure...........................................................................................29
-------------
13. Headings................................................................................................30
--------
14. Successors and Assigns..................................................................................30
----------------------
15. Notices.................................................................................................30
-------
-2-
16. Entire Agreement........................................................................................30
----------------
17. Governing Law...........................................................................................31
-------------
18. Time of the Essence.....................................................................................31
-------------------
19. Due Incorporation, Valid Existence, Good Standing and Due
---------------------------------------------------------
Authorization...........................................................................................31
-------------
20. Severability............................................................................................32
------------
-3-
MASTER SOFTWARE SERVICES AGREEMENT
Agreement made effective as of the 3rd day of February, 1992 (the
"Effective Date") by and between Peritus Software Services, Inc., a
Massachusetts corporation having a business address of ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Peritus"), and Bull HN Information Systems
Inc., a Delaware corporation having a business address of Technology Park,
Billerica, MA 01821 ("Bull"). Peritus and Bull agree that, except as the parties
may agree from time-to-time, in individual project Statements of Work (as
hereinafter defined), the general terms and conditions set forth in this
Agreement shall apply to all software services to be provided by Peritus to Bull
during the term of this Agreement. In the event of any inconsistency between a
Statement of Work, signed by authorized representatives of the parties, and this
Agreement, this Agreement shall prevail, provided however that if a provision in
a Statement of Work expressly refers to this Agreement and specifically sets
forth the extent to which it is intended to modify this Agreement, then, for
purposes of such Statement of Work, such provision in the Statement of Work
shall prevail.
1. Definitions - The following definitions shall apply to this Agreement
-----------
and all Statements of Work agreed to by the parties.
(a) Assigned Component. A Software Component assigned to Peritus for
------------------
on-going maintenance support pursuant to a Statement of Work.
(b) Overdue Backlog. STARs and ISNs that have not been resolved within
---------------
the specified time period for the relevant priority (see definition of
"Performance Criteria" at subsection (n) below). For purposes of calculating
Backlog, each STAR/ISN shall be counted as an equivalent unit.
(c) Bull Software Maintenance Group. The Bull organization that is
-------------------------------
responsible for the generation of corrections to System Technical Action
Requests (STARs) and Internal Software Notifications (ISNs).
(d) Bull Software Support Group. The Bull organization that is
---------------------------
responsible for communicating software maintenance priorities in response to
critical situations reported by external sales networks.
(e) Bull Systems Products. The Bull engineering organization
---------------------
responsible for the complete life cycle of a Software Component.
(f) Continuation and Fix (C & F). The process by which the life of a
----------------------------
Software Component is usefully extended. This function comprises the following
tasks:
-1-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(i) analysis and Resolution of Reported Defects (as defined in
subsection (p) below);
(ii) giving necessary assistance to users of the Software
Component as to how to obtain the maximum utility from the Software Component in
situations where the Software Specifications are unclear or ambiguous;
(iii) necessary assistance to users in the recovery of lost data
where data is lost due to a defect in either the Software Component or the
clarity of the end-user documentation;
(iv) evaluation of System Change Proposals (SCP) and
implementation of selected System Change Proposals; and
(v) implementation of Minor Enhancements. These may include SCP,
changes to improve supportability, maintainability, performance, to reduce
ambiguity in implementation. or to reduce impact on customers of ambiguity of
the Software Specification as in (ii) above.
(g) Correction. A Correction prepared by Peritus in response to a
----------
STAR/ISN shall be provided in the form of both source code and object code,
and/or to the extent appropriate in the form of suggested changes (in terms of
substance rather than final text) to be made in end user documentation, in
formats and on media as required by Bull policies then in effect; all corrected
files supplied by Peritus will include all previous Corrections therein.
(h) Enhancement. A modification to a Software Component that results in
-----------
a new feature being made available to the user of the Software Component, or an
improvement in the implementation of an existing feature. An example of a new
feature is the addition of a new command or option to an existing Software
Component. An example of an improved implementation is the redesign or
reimplementation to reduce the run-time resource utilization in either terms of
memory usage or time taken to execute.
(i) ****************************. The
************************************************ ************* of the fixed
annual maintenance fee that shall be **************** from the next or any
subsequent invoice from Peritus under a Statement of Work after a determination
*********************************************************** during any
Performance Measurement Period.
-2-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(j) ISN. Abbreviation for Bull "Internal Software Notification," which
---
is the vehicle by which problems and enhancement requests are communicated to
the relevant Bull engineering organization by the Bull Level 2, Level 3 and
Level 4 QA organizations and other engineering organizations.
(k) Major Enhancement. An enhancement that requires 60 or more than 60
-----------------
person hours' worth of effort for design, design review, implementation, Level 1
and Level 2 testing, inspections and development of any necessary documentation.
(l) Minor Enhancement. An enhancement that requires less than 60 person
-----------------
hours' worth of effort for design, design review, implementation, Level 1 and
Level 2 testing, inspections and development of any necessary documentation.
(m) PRS. The Bull problem reporting system now or hereafter used for
---
management of STARs and ISNs.
(n) Performance Criteria. The criteria to be applied in determining
--------------------
Peritus' compliance with goals for responses to STARs/ISNs are as follows,
except as expressly modified in a Statement of Work:
(i) STAR/ISN
Completion Period in Calendar Days
----------------------------------
Priority Current Release Prior Releases
-------- --------------- --------------
A/1 ************** **************
B/2 ************** **************
C/3, 4 ************** **************
and, in addition,
(ii) Overdue Backlog not to exceed *** of average monthly intake of
STARs/ISNs during a Performance Measurement Period.
(o) Performance Measurement Period. A rolling period of six (6)
------------------------------
consecutive whole calendar months, commencing monthly, during the term of a
Statement of Work. For example, if the first Performance Measurement Period
during the term of a Statement of Work is from January through June, the second
-3-
Performance Measurement Period will be the period from February through July of
the same year.
(p) Resolution of Reported Defects. STARs/ISNs and enhancement
------------------------------
requests may be resolved in any of the following manners:
(i) A valid defect was reported and a correction has been
generated.
(ii) A valid defect was reported and a correction has not been
generated because the correction is not feasible within the constraints of the
design and/or implementation. This disposition is valid only with the documented
consent of the author of the defect report.
(iii) The Software Component conforms to specification and need
not be changed.
(iv) The Software Component conforms to specification and the
defect report will be treated as an enhancement and will be considered for
future implementation.
(v) The Software Component conforms to specification and will
not be changed, but the end-user documentation will be clarified.
(vi) The reported defect is caused by a hardware malfunction.
This disposition is valid only with the documented consent of the author of the
defect report.
(vii) The reported defect has only occurred once and could not
be repeated.
(viii) Any other disposition permitted by Bull's PRS.
(q) Software Component. A specific computer program (i.e., an
------------------
individual software product identified by a single Bull Software Technical
Identifier) and associated documentation marketed or utilized by Bull on or
after the effective date of the applicable Statement of Work and any functional
or maintenance updates delivered with respect thereto during the term of such
Statement of Work. A functional update shall mean new functionality and
significant changes to a Software Component, including major and minor bug fixes
and error corrections. A maintenance update shall mean major and minor bug fixes
and error corrections to a Software Component.
(r) Software Maintenance Period. A period of twelve consecutive
---------------------------
months commencing on the effective date of a Statement of Work or an anniversary
thereof.
-4-
(s) Software Specification. A formal description of the
----------------------
externally visible behavior of Software Components. From a customer's
perspective, a Software Specification is either explicitly or implicitly
contained in the software documentation provided to the customer by Bull.
(t) STAR. Abbreviation for Bull "System Technical Action Request,"
----
which is the vehicle by which problems and enhancement requests are communicated
from the sales networks to the relevant Bull engineering organizations. For
purposes of this Agreement, ISNs and STARs are synonymous.
(u) STAR Coordinator. The employees designated from time to time
----------------
by the Bull Software Support Group and Peritus, respectively, pursuant to a
Statement of Work to be such respective organization's point of contact and
representative responsible for addressing STAR/ISN assignments and transfers
within the subject area covered by such Statement of Work.
(v) Statement of Work. A written statement, executed and delivered
-----------------
by authorized representatives of the parties pursuant to this Agreement,
identifying one or more Software Components as Assigned Components and
containing the agreed term for such Statement of Work and such other details as
the parties shall agree upon for purposes of such Statement of Work. It is
intended that a Statement of Work shall contain only the particular business and
technical details relevant to the project described in the Statement of Work,
and that except to the extent modified or superseded by the terms of a Statement
of Work or otherwise, the general terms and conditions contained in this
Agreement shall be deemed incorporated by reference therein without further
action by the parties. Ordinarily, in addition to identifying the Assigned
Component and the term, a Statement of Work should include:
(i) the names, telephone numbers and locations of STAR
Coordinators,
(ii) the fixed and other charges for services under such
Statement of Work,
(iii) any equipment and systems to be provided or made
available to Peritus by Bull or to which Peritus otherwise shall have access for
purposes of such Statement of Work, and
(iv) any provisions intended to modify, supersede or
supplement the terms and conditions of this Agreement that otherwise would be
incorporated by reference into such Statement of Work in accordance with the
terms hereof.
-5-
(w) System Change Proposals (SCP). Change requests submitted to Bull
-----------------------------
from the various Bull Users' Societies.
(x) Quality Management System. A documented Bull quality system to
-------------------------
insure that a product conforms to specified requirements which (i) includes
documented quality procedures and instructions, and (ii) is applicable to and
implemented by the cognizant Bull Software Maintenance Group.
2. Term.
----
(a) This Agreement. The term of this Agreement shall commence on the
--------------
Effective Date and, unless sooner terminated as otherwise provided in this
Agreement or by the mutual agreement of the parties, shall continue in effect
for three years from the Effective Date and from year to year thereafter until
terminated by either party's giving written notice of termination to the other
not less than one hundred eighty (180) days prior to the effective date of
termination. The expiration or termination of this Agreement shall not operate
to terminate any Statement of Work executed and delivered by the parties during
the term of this Agreement, and each such Statement of Work (including without
limitation the terms and conditions of this Agreement which are deemed to have
been incorporated therein by reference) shall continue in full force and effect
until its expiration or termination in accordance with its terms, unless
otherwise provided herein.
(b) Statements of Work.
------------------
(i) Commencement. Peritus shall promptly begin and
------------
diligently provide software service for Assigned Components on the effective
date of the Statement of Work applicable thereto.
(ii) Continuation. With respect to each Assigned Component,
------------
Statement of Work shall remain in effect for successive Software Maintenance
Periods until terminated by notice from one party to the other in accordance
with subsection 2(iii) below or as otherwise expressly provided in such
Statement of Work.
(iii) Termination. Except as otherwise provided herein,
-----------
(1) Without Cause. Either party may terminate the
-------------
term of a Statement of Work as of the end of such
Software Maintenance Period as may be specified therein
by giving written notice to the other, such notice to
be given by ▇▇▇▇▇▇▇ or Bull not later than one hundred
eighty (180) days before the end of such Software
Maintenance Period.
-6-
(2) For Cause. Except as otherwise provided in
---------
Section 10, in the event of any failure by either party
to perform any of its obligations under a Statement of
Work, continuing for 60 days after written notice
specifying such failure in reasonable detail, without
being cured, or cure thereof commenced and diligently
prosecuted at all times thereafter, or in the event
that a party ceases to carry on its business, a
receiver or similar officer is appointed for a party
and is not discharged within 30 days, a party becomes
insolvent, admits in writing its inability to pay debts
as they mature, is adjudicated bankrupt, or makes an
assignment for the benefit of its creditors or another
arrangement of similar import, or proceedings under any
bankruptcy or insolvency law are commenced by or
against a party and are not dismissed within 30 days,
the other party may at its election by written notice
terminate such Statement of Work as of any date
thereafter, and such termination shall remain effective
notwithstanding any cure of the effect of such failure
prior to the effective date thereof.
3. Services to be Provided by Peritus/Additional Obligations of Peritus.
--------------------------------------------------------------------
Peritus shall provide the following services to Bull, and in doing so,
shall adhere to or exceed the Quality Management System implemented by Bull at
the time of the delivery of the services to Bull; Peritus shall also be
responsible for the following additional obligations to Bull during the term of
a Statement of Work:
(a) Software C & F. Peritus shall use all technically feasible means to
--------------
provide C & F for an Assigned Component when problems are reported to Peritus.
The following procedures shall apply:
(i) Assignment by Bull. Each assignment of a software defect
------------------
requiring resolution by Peritus shall be in the form of a STAR/ISN, as currently
utilized by Bull, and shall be reported and monitored as such. Without
limitation of the foregoing, each assignment shall specify the Performance
Criteria Priority assigned to the STAR/ISN and shall be accompanied by all
relevant documents and records relating to the problem to be resolved,
including, but not limited to, the designation of the Assigned Component and
release level, the sequence of operations that produced the problem and the
exact text of any error messages. In the event that Peritus objects to the
Performance Criteria Priority assigned by Bull, ▇▇▇▇▇▇▇ shall nevertheless
process the STAR/ISN at the higher priority assigned by Bull unless Bull
otherwise agrees. To facilitate transmission and receipt of STARs/ISNs, Peritus
shall be assigned a PRS coordinator queue, which Peritus shall scan at least
twice each business day for incoming STARs/ISNs. A STAR/ISN shall be deemed
assigned to
-7-
Peritus at the time of its entry into the Peritus queue by Bull regardless of
when Peritus actually accesses the same.
(ii) Processing and Response by ▇▇▇▇▇▇▇. Following receipt
----------------------------------
by Peritus through appropriate channels of a STAR/ISN acknowledged by Peritus to
pertain solely to one or more Assigned Components, Peritus shall promptly
analyze the STAR/ISN and such other available information as Peritus determines
to be relevant and shall:
(1) Provide the designated Bull software integration
department with a Correction, with simultaneous
notification thereof, through the PRS, to the author
of the STAR/ISN, it being understood and agreed that
Corrections shall be inspected by Peritus prior to
Level 1 testing (as defined in the Bull SEPA
document) and that after satisfactory inspection and
Level 1 testing, Level 2 testing with an appropriate
set of systems shall promptly be performed by
Peritus. Any further testing will be the
responsibility of Bull;
(2) Notify the Bull Software Support Group STAR
Coordinator that ▇▇▇▇▇▇▇ has concluded that the
Assigned Component conforms to its Software
Specifications and that no Correction is necessary;
(3) Notify the Bull Software Support Group STAR
Coordinator that ▇▇▇▇▇▇▇ has concluded that the
Assigned Component conforms to its Software
Specifications but that the end-user documentation
will be clarified;
(4) Notify the Bull Software Support Group STAR
Coordinator that ▇▇▇▇▇▇▇ has concluded that the
Assigned Component conforms to its Software
Specifications and that the STAR constitutes a Major
Enhancement request;
(5) Notify the Bull Software Support Group STAR
Coordinator that ▇▇▇▇▇▇▇ has concluded that
correction of the problem is not feasible within the
constraints of the design and/or implementation,
specifying in reasonable detail in such notice the
reasons for such conclusion, and requesting the Bull
Software Support Group STAR Coordinator's concurrence
or further guidance, it being agreed that this
response shall be valid only upon the consent of the
author of the STAR/ISN;
-8-
(6) Notify the Bull Software Support Group STAR
Coordinator that the reported defect is caused by a
hardware malfunction;
(7) Notify the Bull Software Support Group STAR
Coordinator that the reported defect has occurred
only once and cannot be repeated, specifying in
reasonable detail in such notice the reasons for such
conclusion, and requesting the Bull Software Support
Group STAR Coordinator's concurrence or further
guidance; and/or
(8) Respond with any PRS response code valid as of
the Effective Date (or as the parties may otherwise
agree).
The time of transmission by Peritus to Bull of any of the foregoing responses
shall be the relevant time for purposes of determining Peritus' compliance with
the Performance Criteria. Any incoming STARs/ISNs that do not obviously (to
Peritus) pertain solely to Assigned Components shall be referred for disposition
to the next Bull STAR screening meeting, and shall be processed thereafter as
mutually determined by the parties.
(iii) Releases (Updates and/or Adjustments). Upon request from
-------------------------------------
Bull from time to time, Peritus shall notify Bull of all Corrections required to
be included in maintenance releases, updates or adjustments for Assigned
Components, which releases, updates or adjustments shall, unless otherwise
agreed, include all fixes up to a cut-off date mutually determined by Bull and
Peritus. Peritus shall send its input for such releases, updates or adjustments
to the Bull Software Maintenance Group.
(iv) Tools and Utilities. Peritus shall, without additional
-------------------
charge, provide Bull (solely for internal use, by or for Bull, in Bull's and
other Group Bull companies' business and not for disclosure, transfer or
licensing by Bull or such companies to third parties) with copies of all tools
and utilities, and all modifications, enhancements and improvements with respect
thereto, which Peritus develops during the term of this Agreement for the
purpose of developing and testing Corrections to Assigned Components; PROVIDED,
HOWEVER, THAT THE PARTIES UNDERSTAND AND AGREE THAT SUCH TOOLS AND UTILITIES
SHALL BE PROVIDED "AS IS" AND WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. In those cases where such
tools and utilities are used by third parties for the benefit of Bull or other
Group Bull companies, such third parties shall have entered into a
confidentiality agreement consistent with the provisions of subsection 8.(b) of
this Agreement. The rights and obligations under this subsection shall survive
any termination or expiration of this Agreement.
-9-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(v) Ownership of Corrections. Ownership of and all right and
------------------------
title in and to Corrections and the intellectual property comprised thereby
(including without limitation the source code, object code and all related
documentation) shall be in Bull. Peritus agrees that, except with the express
written consent of Bull, which may be withheld without liability, Peritus shall
maintain the confidentiality of all source code and related documentation owned
by Bull and to which Peritus is given access, shall use the same only in
connection with Statements of Work and shall not disclose any part thereof to
any third party (other than such disclosure to third parties as may be necessary
or useful in the performance of a Statement of Work, and then on terms requiring
each such third party similarly to maintain the confidentiality thereof).
(b) STARs Unresolved as of the Effective Date of a Statement of Work.
----------------------------------------------------------------
The backlog of STARs existing and unresolved prior to the effective date of a
Statement of Work shall be addressed by Peritus in accordance with a schedule
and priority (and, in the case of STARs constituting Major Enhancement requests,
for compensation) to be mutually determined by the parties as soon as reasonably
practicable after such effective date.
(c) Additional Obligations of Peritus. In addition to Peritus's
---------------------------------
obligations under Section 8, for purposes of this Agreement, Peritus agrees with
the following conditions in order to preserve the security of Bull information
and systems:
(i) Bull shall have the right to locate the telecommunications
equipment identified in Schedule E, subject to change as reasonably required by
Bull, at Peritus's place of business, for which Peritus shall provide Bull with
reasonable access in order to enable Bull to configure and maintain such
equipment, and for which Peritus shall provide the required electrical power
********************;
(ii) Peritus shall reconfigure, at Bull's request
************************, the applicable equipment and software in order to be
operable with such telecommunications equipment;
(iii) Peritus shall not connect any other communications
facility, including any modem or network, to the network of the systems used to
access other Bull systems, except with the prior written consent of Bull in each
instance;
(iv) Peritus, at Bull's request, shall allow Bull ********
*******************************************************************************
****** to be
-10-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
maintained by Peritus for a period of at least ************ from the date of
generation thereof; and
(v) Peritus shall provide a communications coordinator for the
purpose of immediately investigating any network security breaks, which
coordinator shall be available for such purpose *******************************
****************************.
4. Limitation on Services; Availability of Additional Services.
-----------------------------------------------------------
(a) Limitation on Services. The services contemplated by Section 3
----------------------
above pertain only to Assigned Components being used in their proper
environments and being run on operating system releases and hardware platforms
which have been certified by Bull to correctly operate with the Assigned
Components. Peritus shall not be obligated to provide support for any operating
systems or operating systems functions or components which are not specifically
provided for in a Statement of Work. The services to be provided by Peritus
pursuant to Section 3 above do not include services such as application design,
consulting (other than as necessary in connection with the performance of
Continuation and Fix with respect to Assigned Components), custom configuration,
Major Enhancement of the Assigned Components or recovery of lost data (other
than as necessary in connection with the performance of Continuation and Fix
with respect to Assigned Components). Such services, however, may be provided by
Peritus, at Peritus' then published prices for such support, subject to (i) a
schedule agreeable to Peritus and Bull and (ii) the availability of Peritus
personnel.
(b) Availability of Additional Services. Without limitation of the
-----------------------------------
foregoing, upon request by Bull from time to time, Peritus may provide
supplemental software engineering services on the basis of bid prices, time and
materials, or such other basis as the parties shall agree upon, for Major
Enhancements to Assigned Components in each of the following cases, subject to
prior written approval of the senior Bull employee identified in subsection
9.(b):
(i) STARs mutually determined to be requests for Major
Enhancements;
(ii) Major Enhancements requested by Bull;
(iii) Major Enhancements identified by ▇▇▇▇▇▇▇ and agreed
to by Bull; and
-11-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(iv) Major Enhancements requested by third parties through Bull
(regardless of whether such third parties may contribute to Bull any or all of
the funding for such Major Enhancement).
In each of such cases, ownership of and all right and title in and to the Major
Enhancement and the intellectual property comprised thereby (including without
limitation the source code, object code and all related documentation) shall be
in Bull. Peritus agrees that, except with the express written consent of Bull,
which may be withheld without liability, Peritus shall maintain the
confidentiality of all source code and related documentation, shall use the same
only in connection with Statements of Work and shall not disclose any part
thereof to any third party (other than such disclosure to third parties as may
be necessary or useful in the performance of a Statement of Work, and then on
terms requiring each such third party similarly to maintain the confidentiality
thereof).
5. Charges.
-------
(a) Payment. ▇▇▇▇ agrees to pay ▇▇▇▇▇▇▇ the charges for software services
-------
and other fees set forth in each Statement of Work. Except as otherwise provided
in this Agreement, no invoice under any Statement of Work shall be subject to
credit for any period of non-use by Bull for any reason, including defects in
any Assigned Component. Peritus shall invoice Bull for the fixed portion of the
annual maintenance fees under each Statement of Work on a quarterly basis in
advance at the beginning of each quarter during a Software Maintenance Period.
Other fees and charges shall be invoiced monthly or as otherwise agreed. All
invoices, issued by either Peritus or Bull, shall be payable within 45 days. If
Bull fails to pay any charges when due and payable, ▇▇▇▇ agrees that ▇▇▇▇▇▇▇
shall have the right to invoice and Bull shall pay a late payment charge equal
to the then existing prime rate of interest at the Bank of Boston, plus one
point, monthly, prorated on the unpaid balance. If ▇▇▇▇▇▇▇ fails to pay any
charges when due and payable, ▇▇▇▇▇▇▇ agrees that Bull shall have the right to
invoice and ▇▇▇▇▇▇▇ shall pay a late payment charge equal to the then existing
prime rate of interest at the Bank of Boston, plus one point, monthly, prorated
on the unpaid balance.
(b) Changes. Except for the fixed portion of the annual maintenance charges
-------
specified in a Statement of Work for the maintenance services to be performed by
Peritus pursuant thereto, Peritus may change the charges specified in a
Statement of Work ************************* for all or any services by giving at
least ************************************* to Bull prior to the effective date
of the change. The
-12-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
adjusted charges will not exceed Peritus' list price to commercial customers on
the effective date of such adjustment.
(c) Taxes. Unless Bull provides satisfactory evidence of exemption to
-----
Peritus from such taxes, all charges and fees are exclusive of all federal,
state, municipal or other political subdivision excise, sales, use, property,
occupational, or like taxes now in force or enacted in the future and are
therefore subject to an increase equal to any such taxes Peritus may be required
to collect or pay upon the sale or shipment or use of any product or service
provided hereunder, except taxes based exclusively on Peritus' net income, and
use or personal property taxes levied on tangible personal property used by
▇▇▇▇▇▇▇ in performing software services under this Agreement.
6. Obligations of Bull.
-------------------
Without limitation of any other obligations provided for elsewhere in this
Agreement or in any Statement of Work, Bull shall at all times during the term
of this Agreement and any Statement of Work, solely at Bull's cost and expense
and without charge to Peritus:
(a) Provide Peritus a PRS coordinator queue and, in the event that the
method of reporting STARs and ISNs should be changed, provide Peritus with
appropriate access, software licenses and training for the replacement method so
as to permit Peritus to continue to perform its obligations under Statements of
Work;
(b) Provide Peritus (at Peritus' site) with necessary access, via
electronic means, to all systems within Bull which contain STAR/ISN
documentation relevant to Assigned Components, subject, however, to the
implementation of such appropriate security measures as reasonably required by
Bull in order to prevent unauthorized access, which measures may include,
without limitation, the assignment to Peritus of a separate password or
passwords; and provided, further, that in no event shall Peritus be provided
access to Bull customer sites or systems without the prior written consent of
Bull; in addition, Peritus will be responsible for and pay all charges for
communication lines between Peritus and Bull; and, further, Bull shall be
responsible for and pay the planned current charge of ********* for a
communications node which may be required to establish communications between
Peritus and Bull. Should the ******** communications node charge increase
substantially following the Effective Date, then Peritus, upon request by ▇▇▇▇,
agrees to discuss an equitable alternative with Bull or a
******************************************.
-13-
(c) Provide Peritus (solely for Peritus' use in Peritus' business in
connection with Statements of Work and not for licensing by Peritus to third
parties) with copies of all tools and utilities, existing on the Effective Date
or created thereafter, and all modifications, enhancements and improvements with
respect thereto, which Bull has legal right to provide to Peritus and which are
necessary or useful in the development or testing of Corrections; provided,
however, that the parties understand and agree that Bull shall have no
obligation to Peritus under this provision affirmatively to expend funds or
allocate resources to the development or improvement of any such tools or
utilities; and provided further, that all right title and interest to any
modifications, enhancements and improvements made by Peritus to such tools and
utilities, whether made at Bull's, ▇▇▇▇▇▇▇'s or any other party's expense, shall
be solely in Bull and shall be subject to the provisions of Section 8.
(d) Use its best efforts to provide Peritus with reasonable access to Bull
development and software maintenance personnel (including personnel in France)
for purposes of limited consultation from time to time as necessary to permit
Peritus to perform its obligations under Statements of Work;
(e) Provide Peritus personnel with contractor status access to designated
Bull sites, and provide at each such site a secure area for Peritus personnel
and equipment, as necessary to permit Peritus to perform its obligations under
Statements of Work;
(f) Provide Peritus with access, on both a read and write basis, to
specifically agreed to source codes for Assigned Components, and on a read-only
basis to such other source code as specifically agreed to and as necessary or
useful to Peritus in the performance of its obligations under Statements of
Work;
(g) Provide Peritus (at Peritus' home office), for use solely in connection
with Statements of Work, with the items of equipment (on maintenance contracts
complying with the terms specified in a Statement of Work), software,
documentation, licenses, specifications, maintenance documents and other items
specified in each Statement of Work;
(h) Provide Peritus with access to specifically agreed to support,
development and test environments necessary to permit Peritus to perform its
obligations under Statements of Work based on the priority scheduling determined
jointly by Bull and Peritus STAR Coordinators;
(i) Provide Peritus with reasonable access to Bull Software Maintenance
Group systems as necessary in connection with any Statement of Work based on
priority scheduling determined jointly by Bull and Peritus STAR Coordinators;
-14-
(j) Provide Peritus with the name and telephone number of each STAR
Coordinator assigned under a Statement of Work by each of Bull Software
Maintenance Group and Bull Software Support Group;
(k) Conduct STAR screening meetings on a weekly basis (or with such other
frequency as the parties may agree), keep Peritus advised of the schedule
therefor and permit Peritus personnel to attend such meetings if and when
Peritus should elect to do so, or require Peritus personnel to attend such
meetings at Bull's request; and
(l) To the extent necessary to permit Peritus to perform its obligations
under any Statement of Work, coordinate with Peritus and with Bull customer
personnel regarding information required by Peritus in connection with such
Statement of Work; provided, however, that in no event shall Peritus make direct
contact with any Bull customer for such purpose without the prior written
consent of Bull.
7. Non-Solicitation and Non-Competition.
------------------------------------
In consideration of the sensitive and confidential nature of the
information and access provided by Bull to Peritus and the sensitive and
confidential nature of the services to be performed by Peritus under this
Agreement;
(a) Each of the parties agrees that it shall not, directly or indirectly,
solicit or induce, or attempt to solicit or induce, other than through normal
public advertising for employees, any person who is then an employee of the
other to leave such employment for any reason whatsoever, or hire any person who
is then an employee of the other; and
(b) ▇▇▇▇▇▇▇ agrees that it shall not, directly or indirectly, solicit,
divert or accept any business from any person, firm or entity who at the time is
a direct customer of Bull, otherwise than expressly permitted pursuant to a
Statement of Work or as otherwise expressly agreed by Bull in writing. Requests
for permission, in each case, shall be made by Peritus in accordance with the
provisions of Section 15. In response to each such request, ▇▇▇▇ will respond
within thirty (30) days from the date of receipt with an approval or a
disapproval. The failure of Bull to respond within such thirty (30) day period
shall constitute an approval by Bull of the request by ▇▇▇▇▇▇▇. Any disapproval
shall not be subject to challenge by ▇▇▇▇▇▇▇. The senior employee of Peritus may
contact the senior employee of Bull, in accordance with the provisions of
subsection 9.(b), in order to further explain the reasons and purposes of the
request. This subsection 7.(b) shall be limited in time and geographical scope
to (i) a period of five (5) years from the Effective Date of this Agreement or
for the term of an applicable Statement of Work, whichever is longer; and (ii)
the United States and Canada.
-15-
8. Property Rights and Confidentiality
-----------------------------------
(a) Peritus Obligations. In view of the confidential relations
-------------------
contemplated hereunder between ▇▇▇▇▇▇▇ and ▇▇▇▇ and the payments to be made to
Peritus as herein set forth, ▇▇▇▇▇▇▇ agrees:
(i) that Peritus and its employees shall communicate promptly and
fully in writing to Bull all inventions, designs, including mask works, ideas,
processes, discoveries, improvements and inventions and technical or business
innovations (hereinafter "Developments") conceived or made by Peritus or its
personnel and all writings, software, firmware, databases or other works of
authorship (hereinafter "Works") created by Peritus or its personnel during the
term of this Agreement and for six months thereafter, (whether or not patentable
or copyrightable and whether made solely by Peritus or its personnel, or jointly
with others) which result from or are suggested by any work which Peritus or its
personnel may do pursuant to this Agreement or which result from information
derived from Bull or its employees;
(ii) that such Developments shall be deemed the sole and exclusive
property of and owned by Bull or its nominees whether or not patentable, and
that Peritus assigns all right, title and interest in and to the same to Bull
and without regard to any termination of this Agreement; that ▇▇▇▇▇▇▇ agrees
that any Work created by Peritus or its employees in the performance of services
for Bull during the term of this Agreement has been commissioned by Bull and
that such commissioned Work shall be deemed a "work made for hire" under the
U.S. Copyright Laws. If any Work is determined by a court of competent
jurisdiction not to be "a work made for hire" under the U.S. Copyright Laws,
this Agreement shall operate as an irrevocable assignment by Peritus of the
copyright in such Work, including all rights of every kind in such Work for the
entire duration of such copyright, and that no rights are reserved to Peritus;
(iii) that ▇▇▇▇▇▇▇ will assist Bull (or its successors, assigns or
nominees) in every proper way during and subsequent to the term of this
Agreement (entirely at Bull's expense) to perfect Bull's or its nominees' right,
title, and interest in any developments, patents, patent applications (including
continuations, continuations-in-part and divisions), copyrights of any and all
types or other forms of legal protection for such Developments and Works in any
and all countries of the world, by executing and delivering all papers and
instruments, including assignment forms, and to perform such further acts,
including giving testimony or furnishing evidence relating to such interests, as
may be deemed necessary by ▇▇▇▇ (or its successors, assigns or nominees);
-16-
(iv) that ▇▇▇▇▇▇▇ will maintain adequate and current written
records of all such Developments and Works, in the form of notes, sketches,
drawings or reports relating thereto, which records shall be available to Bull
at all times and such written records shall be turned over to Bull at the end of
the term of this Agreement or upon termination of the Agreement, whichever
occurs earlier;
(v) that except as an authorized representative of Bull may
otherwise consent in writing, Peritus shall maintain in confidence and not
disclose at any time either during or subsequent to the term of this Agreement,
any information, software, knowledge or data of Bull which Peritus or its
employees may receive, acquire or obtain during the Term, relating to such
Developments or Works being conducted under this Agreement or business plans and
information systems, or other proprietary matters, including that prepared,
produced or developed by Peritus or its employees in the performance of this
Agreement, and that Peritus and its personnel shall not use such information,
knowledge or data outside this Agreement except as an authorized representative
of Bull may otherwise consent in writing, unless Peritus can demonstrate to the
satisfaction of Bull that such information was actually known to Peritus prior
to this Agreement, or was properly obtained or developed by Peritus
independently of such information and apart from any connection with Bull or its
employees, directly or indirectly, all without breach of any confidential
relationship, or became publicly available through no act of Peritus or its
employees;
(vi) all data, designs, drawings, plans, layouts,
specifications, software, etc. and any and all other tangible information or
works, including, but not limited to, any and all information, written or
otherwise, which may be or has been furnished to Peritus or its personnel shall
remain the exclusive property of Bull. Peritus shall not make copies of any such
materials, except to the extent reasonably required to enable Peritus or its
personnel to perform the services specified under this Agreement. Upon the
termination or completion of the services hereunder or upon earlier request by
▇▇▇▇ (subject to the provisions of Sections 3 and 6 of this Agreement), any and
all materials referred to in this Section 8, together with all copies and
reproductions in Peritus's possession, custody, or control, shall be promptly
delivered to Bull, and Peritus shall make no further use or utilization, either
directly or indirectly, of any such materials;
(vii) that with respect to any information, software,
knowledge, or data disclosed to Bull hereunder, ▇▇▇▇▇▇▇ shall inform ▇▇▇▇ in
writing if the services being performed by ▇▇▇▇▇▇▇ or its personnel, in the
opinion of Peritus, are likely to infringe any patent, copyright, trade secret,
trademark or other proprietary right of a third party or of Peritus. Peritus
agrees that it shall not furnish or make use of any patent, copyright, trade
secret, trademark or other proprietary right in the performance of this
Agreement without the prior written consent of Bull and, as provided in Section
11, ▇▇▇▇▇▇▇ agrees to indemnify and hold harmless Bull as to any claim of
infringement or alleged infringement resulting therefrom. A failure to
-17-
provide Bull with such advance written notice concerning the likeliness of the
infringement of ▇▇▇▇▇▇▇'s property rights shall confer upon Bull the
unrestricted right to use or to publish any and all information, software,
knowledge, or data disclosed to Bull by Peritus under ▇▇▇▇▇▇▇'s applicable
patents, copyrights, trade secrets or trademarks;
(viii) that Peritus shall not communicate or otherwise
disclose to Bull or its employees any confidential or trade secret information
of any third party; and
(ix) that all tools and materials necessary for the
performance of the services of Peritus shall, except as provided in this
Agreement, be supplied by Peritus. Any tools or materials supplied by Bull to
Peritus during the term of this Agreement shall at all times remain the property
of Bull and be returned to Bull upon demand (subject to the provisions of
Sections 3 and 6 of this Agreement) or at the end of the term of this Agreement.
(b) Bull Obligations In view of the confidential relations
----------------
contemplated hereunder,
(i) except as an authorized representative of Peritus may
otherwise consent in writing, Bull shall maintain in confidence and not disclose
at any time either during or subsequent to the term of this Agreement, any
information, software, knowledge or data of Peritus which Bull or its employees
may receive, acquire or obtain during the term of this Agreement from Peritus
and that Bull and its employees shall not use such information, software,
knowledge or data outside this Agreement except as an authorized representative
of Peritus may otherwise consent in writing, unless Bull can demonstrate to the
satisfaction of Peritus that such information was actually known to Bull prior
to this Agreement, or was properly obtained or developed by Bull independently
of such information and apart from any connection with Peritus or its employees,
directly or indirectly, all without breach of any confidential relationship, or
became publicly available through no act of Bull or its employees; and
(ii) Bull shall not communicate or otherwise disclose to
Peritus or its employees any confidential or trade secret information of any
third party.
(c) Peritus Further Obligations In view of the extremely sensitive
---------------------------
nature of the Bull computer systems and the information therein which systems
Peritus will be allowed to access on a worldwide basis, Peritus agrees that it
will access only that information which it must necessarily access in order to
perform its obligations under any Statement of Work, that it will hold Bull
access codes in strict confidence and shall not provide any such codes to any of
its employees except those authorized to perform under any Statement of Work,
that it will keep a log of the persons so given such access codes and the date,
and the computer system each and every time so
-18-
accessed, and that Peritus will comply with such other security measures which
Bull may reasonably require. Peritus understands and agrees that any
unauthorized access of such computer systems or any Bull sensitive information
may cause irreparable harm to Bull and its affiliated companies and their
customers. Should Peritus suspect that there has been any such unauthorized
access, Peritus shall immediately take all steps to limit the consequences
thereof and shall immediately inform Bull in writing identifying the specific
details of such unauthorized access. Peritus shall cooperate with Bull, at
Peritus expense, in order to enforce Bull's rights hereunder.
(d) Survival. This Section 8 shall survive any termination or
--------
expiration of this Agreement.
9. Contract Management.
-------------------
(a) Day-to-Day Management. Bull and Peritus will each assign an
---------------------
employee to coordinate the day-to-day management of issues arising between the
parties under this Agreement and Statements of Work hereunder. The parties have
initially designated for this purpose the employees identified below:
Peritus: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bull: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Resolution of Serious Problems. Bull and Peritus will each assign a
------------------------------
senior employee to act as its representative for purposes of resolving disputes
that are not resolved by the persons designated in subsection (a) above. Either
of such senior employees may request a meeting with his or her counterpart
whenever he or she determines that it is necessary or appropriate to do so in
order to resolve a matter of significance to either party's performance under a
Statement of Work, and in such event both parties shall endeavor in good faith
to arrive at a practical solution consistent with both the requirements of the
Statement of Work and the reasonable expectations of both parties to the maximum
extent possible. The parties have initially designated for this purpose the
senior employees identified below:
Peritus: ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇. 01803
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-19-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Bull: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
Billerica, Mass. 01821
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The parties also agree that the senior employees shall endeavor to meet at least
quarterly to review generally performance under Statements of Work then in
effect and other issues of mutual interest.
(c) Notice of Change. Each party shall give notice to the other of
----------------
any change in the persons designated by it for purposes of this Section 9.
10. Additional Remedies Under Certain Circumstances.
-----------------------------------------------
(a) Financial Penalties. Compliance with the Performance Criteria shall
-------------------
be determined with respect to each Performance Measurement Period. The parties
agree that Bull's sole and exclusive remedy for any failure by ▇▇▇▇▇▇▇ to meet
the Performance Criteria during any one or more Performance Measurement Periods
shall be as provided in this Section 10. The parties agree that, subject to a
review of these provisions to be conducted in good faith before the first
anniversary of the Effective Date, the following shall be the Financial
Penalty Percentages applicable during the term of this Agreement:
(i) Overdue Backlog for STARs/ISNs
(1) If Overdue Backlog during a Performance
Measurement Period
**********************************************************
********** shall be *** unless Overdue Backlog shall
have ************ during each of the *** immediately
preceding Performance Measurement Periods, in which
case the
*****************************************;
(2) If Overdue Backlog during a Performance
Measurement Period ****************************************
***********************;
(3) If Overdue Backlog during a Performance
Measurement Period ****************************************
************************;
-20-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(4) If Overdue Backlog during a Performance
Measurement Period ****************************************
***********************; and
(5) If Overdue Backlog during a Performance
Measurement Period ***********, the parties shall, at
the request of either party, meet as promptly as
reasonably practicable to determine and discuss the
causes for such level of performance, specific
measures to ensure improvement and whether the
Statement of Work should be terminated or modified.
(ii) Completion of STAR/ISN Priorities
(1) If during a Performance Measurement Period,
completion of STAR/ISN response goals for priority
A/1 and B/2 as defined in the Performance Criteria
(hereinafter "STAR Priority") is
***********************************************************
***********************, unless the STAR Priority
completion is less than *** during each of the ***
immediately preceding Performance Measurement
Periods, in which case the **********
******************************;
(2) If during a Performance Measurement Period, STAR
Priority completion is ************************************
***********************************************;
(3) If during a Performance Measurement Period, STAR
Priority completion is ************************************
******************************************;
(4) If during a Performance Measurement Period, STAR
Priority completion is ********************************
**************************************************; and
(5) If during a Performance Measurement Period, STAR
Priority completion is *************, the parties
shall, at the request of either party, meet as
promptly as reasonably practicable to determine and
discuss the causes for such level of performance,
-21-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
specific measures to ensure improvement and whether the
Statement of Work should be terminated or modified;
(iii) Penalties Not Cumulative - Notwithstanding the above, in no
event shall Financial Penalty Percentages for Overdue Backlog and STAR Priority
be cumulative and exceed the highest applicable penalty for one category. In
addition, for purposes of determining the Financial Penalty Percentage for
Overdue Backlog, the STAR Priorities A, B and C shall be summed to provide a
STAR Overdue Backlog Percentage, and the ISN Priorities 1, 2, 3 and 4 shall be
summed to provide an ISN Overdue Backlog Percentage. The least satisfactory
percentage of such two measurements, i.e., the STAR Overdue Backlog Percentage
and the ISN Overdue Backlog Percentage, shall be used in determining the
financial penalty for Overdue Backlog as provided in subsection 10. (a)(i)
above. Further, for purposes of determining the Financial Penalty Percentage for
completion of STAR/ISN Priorities, the completion percentages for STAR
Priorities A and B shall be weighted equally to provide an Average STAR Priority
Percentage and the completion percentages for ISN Priorities 1 and 2 shall be
weighted equally to provide an Average ISN Priority Percentage. The least
satisfactory percentage of such two measurements, i.e., the Average STAR
Priority Percentage and the Average ISN Priority Percentage, shall be used in
determining the financial penalty for STAR/ISN Priorities as provided in
subsection 10. (a)(ii) above.
(iv) Preexisting STARs/ISNs - For purposes of this subsection,
"Overdue Backlog" and "STAR Priority" shall not include those STARs/ISNs
existing prior to the effective date of the Statement of Work unless otherwise
agreed in such Statement of Work.
(v) Detailed Description of Calculations
(1) Calculation of STAR Overdue Backlog Percentage -The
******************** Percentage shall be calculated as follows:
The number of STARs, irrespective of priority, that constitute
the STAR Overdue Backlog on the last day of a Performance
Measurement Period will be ************************************
********** during the Performance Measurement Period. This
result will be ***************** to generate the *************
*****************. The average monthly intake is the *********
********************, irrespective of priority, during a
Performance Measurement Period ******************.
-22-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(2) Calculation of ISN Overdue Backlog Percentage -The ISN
Overdue Backlog Percentage shall be calculated as follows: The
number of ISNs, irrespective of priority, that constitute the
******************* on the last day of a Performance
Measurement Period will be ************************************
********* during the Performance Measurement Period. This
result will be ***************** to generate the *************
*****************. The average monthly intake is the total
number of *************, irrespective of priority, during a
Performance Measurement Period ******************.
(3) Calculation of Average STAR Priority Percentage -The
Average STAR Priority Percentage shall be calculated as
follows:
For each Performance Measurement Period the following will be
counted for STARs of priority A:
Item Description
---- -----------
(A) ************************.
(B) ******************************************
******************.
(C) **************************************.
(D) ******************************************
***************
The STAR priority completion percentage for priority A
STARs shall be the number counted in item ************** the
result of *********** the number obtained in item *** from the
*** of the number counted in items *********** with the result
***********************.
For each Performance Measurement Period the following will be
counted for STARs of priority B:
Item Description
---- -----------
(A) ************************.
(B) ********************************************
********************.
-23-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(C) ****************************************.
(D) **********************************************
*******************.
The STAR priority completion percentage for priority B
STARs shall be the number counted in item *********** by the
result of *********** the number obtained in item *** from the
*** of the numbers counted in items *********** with the result
***********************.
The two percentages calculated above shall then be averaged
(summed and divided by two (2)) to determine the Average STAR
Priority Percentage.
(4) Calculation of Average ISN Priority Percentage -The Average
ISN Priority Percentage shall be calculated as follows:
For each Performance Measurement Period the following will be
counted for ISNs of priority 1:
Item Description
---- -----------
(A) ***********************.
(B) ***************************************
*********************.
The ISN priority completion percentage for ISNs of
priority 1 shall be the number counted in item *********** by
the number counted in item *** and the result
*****************.
For each Performance Measurement Period the following
will be counted for ISNs of priority 2:
Item Description
---- -----------
(A) ***********************.
(B) **********************************************
**************.
-24-
Confidential materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
The ISN priority completion percentage for ISNs of
priority 2 shall be the number counted in item *********** by
the number counted in item *** and the result
*****************.
The two percentages calculated above shall then be averaged
(summed and divided by two (2)) to determine the ISN Priority
Completion Percentage.
(b) Right to Designate Management. In the event that, due to a serious
-----------------------------
failure of Peritus to perform its obligations under a Statement of Work, which
failure continues unremedied after 60 days' written notice by Bull specifying
such failure in reasonable detail, Bull should suffer severe disruption in
Bull's daily operations and material damage to Bull's customer goodwill and
reputation, or in the event that prior to the expiration of thirty months from
the Effective Date ▇▇▇▇▇▇▇ ▇▇▇▇, for any reason other than temporary physical or
mental disability, shall cease to be a senior executive officer of Peritus with
responsibilities including oversight of Peritus' performance under Statements of
Work executed and delivered pursuant to this Agreement, then Bull shall have the
right, at its option, exercisable by written notice to Peritus, to designate one
or more qualified senior executive managers to function as the chief executive
and chief operating officers of the unit or units of Peritus having
responsibility for Statements of Work. For purposes of this subsection a
"serious failure" shall not include a failure to achieve the Performance
Criteria, unless Overdue Backlog shall have *********************** successive
Performance Measurement Periods. Unless Bull expressly consents in writing, any
employee of Bull who transfers to become an employee of Peritus shall work at
Peritus only in performance of services under this Agreement on behalf of Bull.
(c) Right to Audit. Bull shall have the right upon reasonable notice
--------------
to Peritus to audit, or have audited through an independent accounting firm, the
books and records of Peritus, at Bull's expense, to verify performance of
Peritus under this Agreement and all Statements of Work. Such books and records
shall be maintained and made available by Peritus for the term of the applicable
Statement of Work *****************.
-25-
11. Warranties and Indemnification, Including Limitation of Liability and
---------------------------------------------------------------------
Remedies.
--------
(a) Warranties and Indemnification:
------------------------------
(i) PERITUS REPRESENTS AND WARRANTS THAT THE WORK PRODUCT AND
SERVICES TO BE PROVIDED UNDER THIS AGREEMENT SHALL CONFORM TO THE DESCRIPTION
AND SOFTWARE SPECIFICATIONS THEREFOR, AND THAT THE OPERATION OF SUCH WORK
PRODUCT SHALL EQUAL OR EXCEED THE PERFORMANCE LEVEL(S) SET FORTH IN THE
APPLICABLE SOFTWARE SPECIFICATIONS. PERITUS'S SOLE LIABILITY AND BULL'S SOLE
REMEDY FOR FAILURE TO MEET THE REPRESENTATIONS AND WARRANTIES IS FOR PERITUS TO
REMEDY ANY DEFECTS AS PROVIDED IN SECTION 3, THE IMPOSITION OF FINANCIAL
PENALTIES, AS MAY BE APPLICABLE, AS PROVIDED IN SECTION 10, AND TERMINATION FOR
CAUSE AS PROVIDED IN SUBSECTION 2. (b)(iii)(2).
(ii) PERITUS FURTHER REPRESENTS AND WARRANTS THAT PERITUS HAS
GOOD AND CLEAR TITLE OR RIGHT TO THE WORK PRODUCT TO BE PROVIDED HEREUNDER, AND
TO ALL RIGHT, TITLE AND LICENSES WITH RESPECT THERETO GRANTED TO BULL. PERITUS
FURTHER WARRANTS THAT PERITUS HAS NOT MADE AND WILL NOT MAKE ANY COMMITMENTS TO
OTHERS INCONSISTENT WITH OR IN DEROGATION OF THE RIGHT, TITLE AND LICENSES
GRANTED TO BULL, AND THAT PERITUS IS FREE OF ANY OBLIGATION THAT WOULD PREVENT
IT FROM ENTERING INTO THIS AGREEMENT.
(iii) PERITUS FURTHER WARRANTS THAT, TO THE BEST OF ITS
KNOWLEDGE, THE WORK PRODUCT TO BE PROVIDED UNDER THIS AGREEMENT DOES NOT
INFRINGE ANY PATENT, COPYRIGHT, TRADE SECRET, TRADEMARK OR OTHER LEGAL OR
EQUITABLE RIGHTS OF ANY THIRD PARTY.
(iv) PERITUS AGREES TO INDEMNIFY, HOLD HARMLESS AND DEFEND
BULL, ITS DISTRIBUTORS AND THEIR CUSTOMERS FROM AND AGAINST ANY AND ALL SUITS,
PROCEEDINGS AT LAW OR IN EQUITY, AND ANY AND ALL LIABILITY, LOSS, CLAIMS, COSTS,
DAMAGES OR EXPENSES, INCLUDING REASONABLE ATTORNEY'S FEES, ARISING OUT OF OR IN
CONNECTION WITH ANY CLAIM BY ANY PERSON THAT THE EXERCISE OF ANY RIGHT GRANTED
BY PERITUS HEREUNDER TO SUCH WORK PRODUCT TO BE PROVIDED UNDER THIS AGREEMENT
INFRINGES ANY RIGHT, TITLE OR INTEREST, INCLUDING PATENT, COPYRIGHT, TRADE
SECRET, TRADEMARK OR OTHER PROPRIETARY RIGHTS OF THIRD PARTIES. ▇▇▇▇ SHALL
PROMPTLY NOTIFY PERITUS IF ▇▇▇▇ BECOMES AWARE OF ANY SUCH
-26-
ALLEGED INFRINGEMENT OR CLAIM. IF THE CLAIM HAS OCCURRED OR IN PERITUS'S OPINION
IS LIKELY TO OCCUR, PERITUS MAY AT ITS ELECTION AND EXPENSE EITHER OBTAIN FOR
BULL THE RIGHT TO CONTINUE USING SUCH WORK PRODUCT OR REPLACE OR MODIFY SUCH
WORK PRODUCT SO THAT IT IS NOT INFRINGING SO LONG AS THE PERFORMANCE OF SUCH
REPLACEMENT OR MODIFIED WORK PRODUCT EQUALS OR EXCEEDS THE PERFORMANCE OF THE
ORIGINAL WORK PRODUCT. PERITUS IS NOT LIABLE IF ANY INFRINGEMENT CLAIM IS BASED
UPON (i) SPECIFIC DETAILED DESIGN SPECIFICATIONS PROVIDED BY BULL TO PERITUS FOR
THE PURPOSE OF PERITUS IMPLEMENTATION OF A WORK PRODUCT SO LONG AS SUCH
INFRINGING IMPLEMENTATION WAS NECESSITATED BY SUCH DETAILED DESIGN
SPECIFICATIONS, (ii) THE INTERCONNECTION, OPERATION OR USE OF THE WORK PRODUCT
IN COMBINATION WITH EQUIPMENT, SOFTWARE OR OTHER DEVICES WITH WHICH SUCH WORK
PRODUCT WAS NOT INTENDED TO OPERATE, (iii) USE OR OPERATION OF THE WORK PRODUCT
IN A MANNER FOR WHICH IT WAS NOT DESIGNED OR RECOMMENDED BY PERITUS, OR (iv)
ALTERATION, ADAPTATION OR MODIFICATION OF THE WORK PRODUCT OTHER THAN BY
PERITUS. PERITUS SHALL PAY DAMAGES FINALLY AWARDED OR FOR ANY SETTLEMENT MADE
WITH PERITUS'S PRIOR WRITTEN AUTHORIZATION.
(b) Limitation of Remedy. IF PERITUS FAILS TO FULFILL ITS
--------------------
OBLIGATIONS UNDER A STATEMENT OF WORK, EXCEPT AS PROVIDED IN THIS AGREEMENT,
BULL'S SOLE AND EXCLUSIVE REMEDIES SHALL BE THOSE EXPRESSLY PROVIDED FOR IN SUCH
STATEMENTS OF WORK (BY INCORPORATION BY REFERENCE OR OTHERWISE). UPON ANY
TERMINATION OF SUCH STATEMENT OF WORK, PERITUS SHALL NOT HAVE ANY OBLIGATION TO
REFUND ANY FEES PAID TO IT UNDER THE TERMS THEREOF EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED THEREIN.
(c) Limitation of Damages. EXCEPT FOR THE WILLFUL MISCONDUCT OR
---------------------
GROSS NEGLIGENCE OF A PARTY HERETO, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL OR TORT DAMAGES EVEN IF IT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH, INCLUDING BUT NOT LIMITED TO LOSS OF
REVENUE, LOSS OF PROFITS, OR LOSS OF USE. IN ANY EVENT, EXCEPT AS PROVIDED IN
THE IMMEDIATELY PRECEDING SENTENCE HEREOF AND EXCEPT AS PROVIDED IN SUBSECTION
11. (a)(iv), EACH PARTY'S MAXIMUM LIABILITY UNDER ANY STATEMENT OF WORK SHALL BE
LIMITED TO THE AMOUNTS ACTUALLY PAID BY BULL TO PERITUS THEREUNDER DURING THE
THEN CURRENT SOFTWARE MAINTENANCE PERIOD.
(d) Mutual Disclaimer. EXCEPT AS OTHERWISE STATED IN THIS AGREEMENT,
-----------------
OR A STATEMENT OF WORK, NEITHER BULL NOR PERITUS
-27-
MAKES ANY WARRANTIES WITH RESPECT TO THIS AGREEMENT OR THE PRODUCTS OR SERVICES
PROVIDED HEREUNDER, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
12. Force Majeure. If the whole or any part of the performance by either
-------------
party of any part of their respective obligations hereunder is prevented or
delayed by causes, circumstances or events beyond the control of such party,
specifically limited to the following: delays of third parties in
transportation, strikes, labor troubles, floods, fires, earthquakes, riots,
explosions, wars, hostilities, acts of government, custom barriers, the
bankruptcy or other insolvency of subcontractors, or other causes of like
character beyond the control of such party, then to the extent such party shall
be prevented or delayed from performing all or any part of its obligations
hereunder by reason thereof despite due diligence and reasonable efforts to do
so notwithstanding such causes, circumstances or events, then such party shall
be excused from performance hereunder for so long as such causes, circumstances
or events shall continue to prevent or delay such performance, so long as such
party shall, promptly after the commencement of any such delay, give the other
party written notice specifying such delay and estimating the duration thereof.
13. Headings. Section headings contained in this Agreement are for
--------
convenient reference only and do not constitute part of this Agreement and shall
not affect the interpretation hereof.
14. Successors and Assigns. This Agreement and each Statement of Work
----------------------
hereunder shall be binding upon and inure to the benefit of the parties hereto
and thereto and their respective successors and assigns, but neither Bull nor
Peritus may assign a Statement of Work or its rights or obligations thereunder
without the prior written consent of the other.
15. Notices. Any notice, request or other communication required or
-------
permitted to be sent under this Agreement or any Statement of Work shall be
delivered by hand or mailed by registered or certified mail, return receipt
requested, or by fax subject to return fax acknowledgement of receipt, to the
respective addresses of the parties as set forth in subsection 9.(b) of this
Agreement, with a copy to the other party's legal counsel. Notice shall be
deemed effective when received. The address of each party's legal counsel is as
follows:
▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Fish
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇. 02110-2699
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-28-
Bull: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Bull HN Information Systems Inc.
Technology Park MA02-408N
Billerica, Mass. 01821
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
16. Entire Agreement. This Agreement, including any Statement of Work
----------------
attached hereto and a part hereof, contains the entire understanding and
agreement of the parties with respect to the subject matter of this Agreement
superseding all prior proposal and communications and there are no promises,
covenants or undertakings other than those expressly set forth herein. This
Agreement may not be modified except by a Statement of Work or another writing
signed by authorized representatives of both parties.
17. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the Commonwealth of Massachusetts (without reference
to its law of conflicts-of-law).
18. Time of the Essence. The parties agree that time is of the essence of
-------------------
this Agreement.
19. Due Incorporation, Valid Existence, Good Standing and Due Authorization:
-----------------------------------------------------------------------
(a) Peritus, by its execution and delivery of this Agreement and by
its execution and delivery of each Statement of Work hereunder, hereby and
thereby represents and warrants to Bull that it is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and duly qualified and in good standing as a foreign corporation
in each other jurisdiction where a failure to be so qualified and in such
standing would have a material adverse effect upon its business, assets or
prospects or upon its ability to perform its obligations under this Agreement or
any Statement of Work, and that the execution and delivery of this Agreement or
such Statement of Work, as the case may be, has been duly authorized by all
necessary corporate action on its part, requires no approval or consent of any
other party or any governmental authority that has not been obtained, does not
and with the passage of time, the giving of notice, or both, will not,
constitute a violation or breach of, or give rise to the creation of any lien or
encumbrance upon any of the properties or assets of Peritus under any contract,
agreement or instrument to which it is a party or by which it is bound, or any
judgment, order or decree of any court or any law, rule or regulation of any
governmental authority having jurisdiction, and is the valid and binding
obligation of Peritus, enforceable against it in accordance with its terms.
-29-
(b) Bull, by its execution and delivery of this Agreement and by its
execution and delivery of each Statement of Work hereunder, hereby and thereby
represents and warrants to Peritus that it is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and duly qualified and in good standing as a foreign corporation
in each other jurisdiction where a failure to be so qualified and in such
standing would have a material adverse effect upon its business, assets or
prospects or upon its ability to perform its obligations under this Agreement or
any Statement of Work, and that the execution and delivery of this Agreement or
such Statement of Work, as the case may be, has been duly authorized by all
necessary corporate action on its part, requires no approval or consent of any
other party or any governmental authority that has not been obtained, does not
and with the passage of time, the giving of notice, or both, will not,
constitute a violation or breach of, or give rise to the creation of any lien or
encumbrance upon any of the properties or assets of Bull under any contract,
agreement or instrument to which it is a party or by which it is bound, or any
judgment, order or decree of any court or any law, rule or regulation of any
governmental authority having jurisdiction, and is the valid and binding
obligation of Bull, enforceable against it in accordance with its terms.
(c) Peritus represents and warrants to Bull that it has reviewed and
will carefully review the services to be performed under this Agreement and each
Statement of Work, and that each Peritus employee is qualified and experienced
in education, training and knowledge to perform such work, it being understood
and agreed by ▇▇▇▇▇▇▇ that Bull has an independent reputation in the software
service industry and with its customers which must be preserved.
20. Severability. If any term or provision of this Agreement or a Statement
------------
of Work or the application thereof shall be determined to be invalid or
unenforceable, the same shall not affect the enforceability of any other
provision contained herein or therein. In addition, if one or more of the
provisions in this Agreement or a Statement of Work shall for any reason be held
to be unenforceable, such provision or provisions shall be construed by limiting
it or them so as to be enforceable to the full extent then permitted by
applicable law.
WITNESS the execution and delivery hereof as an instrument under seal as of the
date first above written.
PERITUS SOFTWARE SERVICES, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Its
-30-
Bull HN INFORMATION SYSTEMS, INC.
By: illegible
----------------------------------
Its
-31-
SCHEDULE E
List of Bull Telecommunications Equipment to be Installed at Peritus for the
Benefit of Bull (see subsection 3.(c)(i))
----------------------------------------------------------------------------
-- One (1) Telematics CPNet ACP30 PAD with 4 synchronous and
8 asynchronous ports
-- One (1) CSU/DSU Datatel 56kb modem