PRODUCTS USE AND GENERAL SERVICES
AGREEMENT
This Agreement dated as of this 1st day of August, 1994 is entered
into by and between Clear with Computors, Inc., 1983 Premiere Drive, P.O. Box
4459 Mankato, Minnesota, 56002-4459, a corporation of the State of Minnesota,
hereinafter called "CWC", and General Motors Corporation, 3044 West Grand
Boulevard, Detroit, Michigan 48202, a corporation of the State of Delaware,
hereinafter referred to as "GM".
WHEREAS GM has heretofore acquired the services of CWC in developing
electronic sales and training systems.
WHEREAS CWC is now willing to develop, and GM is willing to procure, an
electronic sales and training system known as GM PROSPEC and related Products
and Services pursuant to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by CWC and GM, it is hereby agreed as follows:
1. DEFINITIONS. The following terms shall have the indicated meanings when
used with initial capital letters in this Agreement or any Statements
of Work entered into hereunder.
(a) "APPLICABLE SPECIFICATIONS" shall mean the functional,
performance, operational and compatibility characteristics of
the Product(s) as more fully set forth in the Statement of
Work.
(b) "ACCEPTANCE DATE" shall mean the date when all necessary
Documentation has been received, and the Product(s) have
successfully completed any relevant "Acceptance Test(s)"
conducted pursuant to a Statement of Work.
-1-
2
(c) "ACCEPTANCE TESTS" shall mean the tests developed in
accordance with a Statement of Work used to demonstrate that
the Products perform in accordance with the Applicable
Specifications.
(d) "GM PROSPEC" shall mean the GM Sales Assistance Manager
Product as more fully described in the Statement of Work.
(e) "PRODUCTS" shall mean GM PROSPEC and such other computer
programs including, where applicable, object code (including
micro-code), source code, Documentation and any refinements,
enhancements, modifications, revisions, derivative works,
updates or releases related thereto, provided by CWC pursuant
to this Agreement.
(f) "DOCUMENTATION" shall mean Applicable Specifications, user
manuals, training materials, product descriptions, technical
manuals and supporting materials, and other printed
information relating to the Products, whether fully or
partially completed or distributed in print, electronic, or
video format, provided by CWC pursuant to this Agreement.
(g) "SERVICES" shall include, but not be limited to, consulting,
development, installation, training, support and maintenance
services, as the case may be, provided or to be provided by
CWC as more fully described in a Statement of Work.
(h) "STATEMENT(S) OF WORK" shall mean the documents substantially
in the format contained in Exhibit 1(h) which are mutually
agreed upon by the parties describing the detailed obligations
of the parties with respect to a Project.
(i) "PROJECT" shall mean an undertaking by CWC to develop a
Product(s) for GM.
(j) "COMPETITOR OF GM" shall be any entity doing business as a
motor vehicle manufacturer, assembler, or distributor anywhere
in North America, which entity, if required to report same,
would report revenues in any Standard Industrial
Classification Industry code or product class code published
by the Census Bureau ("SIC Code") in which GM is then
reporting revenues in the area of motor vehicle manufacturing
and assembly. As of the effective date of this Agreement GM is
reporting revenues in the following SIC Codes in the area of
-2-
3
motor vehicle manufacturing and assembly (37111, 37116, 37117,
37118, 37119, 5012). Provided that the companies listed on
Exhibit 1(j) which are current clients of CWC reporting
revenues in SIC Code 37117, 37118, and 37119 shall not be
considered Competitors of GM for the medium and heavy duty
truck business covered by those SIC codes.
(k) "AUTHORIZED PURCHASING PERSONNEL" shall mean the members of
GM's Worldwide Purchasing and does not include GM's Project
Manager and, with respect to CWC, an executive identified by
CWC other than the CWC Project Manager.
(l) "PURCHASE ORDER" shall mean an order by GM which includes
terms and pricing which have been negotiated by Authorized
Purchasing Personnel of GM and CWC and references this
Agreement and a Statement of Work, and shall be effective upon
execution by a CWC Authorized Purchasing Personnel. "Purchase
Order" does not include any preprinted terms not expressly
negotiated by the parties and reference to this Agreement on
an Purchase Order shall be deemed to delete all standard terms
and conditions of GM's purchase order form, if such form is
used to transmit an Purchase Order, and all standard terms and
conditions found on CWC's acknowledgement form, if such form
is used to acknowledge a Purchase Order.
(m) "PROPRIETARY INFORMATION" shall mean information that relates
to the subject matter of this Agreement (i) which is in
written or other tangible form and is clearly and
conspicuously marked as confidential and proprietary or its
equivalent by the party which provides it to the other party,
or (ii) if disclosed in oral, visual or other non-written
form, is reduced to writing by the disclosing party and
transmitted to the recipient party, clearly and conspicuously
marked as confidential and proprietary within thirty (30) days
after such disclosure.
(n) "ORIGINAL INTENDED PURPOSE" shall mean the use of the
Product(s) for the purpose of helping Users learn about, sell
and/or buy products manufactured, distributed or sold by GM.
(o) "USER(S)" shall mean any GM employee, dealer, dealer
salesperson, customer, vendor or supplier who is authorized
under this Agreement to use Product(s) and who is operating at
retail, wholesale or any other level of distribution and
-3-
4
is marketing, selling and/or buying products manufactured,
distributed or sold by GM.
(p) "DATA" means product data, algorithms or other product
information provided by GM for incorporation into Product(s).
2. SCOPE OF AGREEMENT AND ORDER OF PRECEDENCE
(a) SCOPE OF THIS AGREEMENT. This Agreement embodies the terms and
conditions negotiated by the parties which shall apply to each
Purchase Order or Statement of Work placed hereunder.
(b) ORDER OF PRECEDENCE. The parties intend that the provisions of
each Statement of Work and Purchase Order will be consistent
with those contained in this Agreement. However, in the event
such construction is not possible, the terms and conditions of
this Agreement shall prevail over those in the Statement of
Work (except where this Agreement has specifically stated that
the Statement of Work takes precedence) or Purchase Order and
the terms and conditions of a Statement of Work shall prevail
over those in a Purchase Order unless the conflicting
provision: in a Statement of Work or Purchase Order expressly
references the provision herein or in a Statement of Work to
be superseded or modified, and unless such Statement of Work
or Purchase Order has been signed by both GM and CWC
Authorized Purchasing Personnel.
3. PROVISION OF PRODUCTS AND SERVICES.
(a) GENERAL. CWC understands and acknowledges that any GM entity
may obtain Products and Services in accordance with this
Agreement.
(b) TIME AND MATERIALS SERVICES. Subject to a Statement of Work,
if available from CWC, GM may obtain on a time and materials
basis from CWC certain consulting, development and other
Services (excluding maintenance and support Services) agreed
upon by the parties in accordance with the following terms and
conditions:
(i) GM may specify on a Purchase Order the number and
names or skill levels of CWC employees ("Employees")
required to perform Services.
-4-
5
In the event GM requests replacement of an Employee
or a proposed Employee, CWC shall, within ten (10)
working days of receipt of such notification from GM,
provide a substitute Employee of sufficient skill,
and training to perform the applicable Services. In
the event GM requests replacement of any Employee
within the first ten (10) days of such Employee's
commencement of Services, GM shall not be required to
pay for Services provided by such Employee and CWC
shall refund to GM all amounts paid for such
Employee's Services. If GM otherwise requests
replacement of an Employee, GM shall not be required
to pay for and shall be entitled to a refund of any
sums paid to CWC for such Employee's Services from
the date of GM's requested replacement of such
Employee.
(ii) CWC shall not replace any Employee, who has been
designated as a key Employee by GM ("Key Employee")
then currently performing Services without GM's
consent until the Statement of Work or Purchase Order
pursuant to which such Key Employee is providing
Services expires or is terminated. Notwithstanding
the foregoing, CWC may replace any Key Employee for
reasons relating to the Employee's termination with
CWC, promotion, illness, death, or causes beyond
CWC's control.
(iii) GM shall reimburse CWC for the reasonable direct
expenses (excluding overhead and fringe benefits) of
its Employees incurred in the performance of Services
if requested in advance and approved by GM. Expenses
related to travel, lodging, and meals shall be
reimbursed in accordance with GM's guidelines for its
own employees, as set forth in Exhibit 3(b)(iii).
(iv) CWC shall maintain records, for a period of three (3)
years following the performance of time and materials
Services, which adequately substantiate the
applicability and accuracy of charges for such
Services and related expenses to GM and shall, upon
receipt of reasonable advance notice from GM, produce
such records for audit by GM.
(v) Purchase Orders for Services provided or to be
provided under this Section may be canceled with a
thirty (30) day notice without charge or penalty,
upon written notice to CWC.
-5-
6
(c) SERVICES IN GENERAL. In connection with the performance of any
Services pursuant to this Agreement:
(i) CWC warrants and agrees that Employees shall have
sufficient skill, knowledge, and training to perform
the Services and that the Services shall be performed
in a professional and workmanlike manner in
accordance with the highest reasonable commercially
applicable standards of the computer software
development industry.
(ii) Employees performing Services in the United States
must be United States citizens or lawfully admitted
in the United States for permanent residence or
lawfully admitted in the United States holding a visa
authorizing the performance of Services on behalf of
CWC.
(iii) CWC shall require all persons providing Services on
behalf of CWC, when at a GM location, to comply with
all applicable regulations and policies of GM
including, but not limited to, security regulations.
(iv) CWC shall provide for and pay the compensation and
other benefits of Employees including, but not
limited to, salary, health, accident and workers'
compensation benefits and shall pay all taxes and
contributions which an employer is required to pay
relating to the employment of employees.
(d) TIME OF PERFORMANCE. To the extent provided in a Statement of
Work, time is hereby expressly made of the essence with
respect to the specific items so provided for in the Statement
of Work. Therefore, to the extent necessary with respect to a
specific project, GM and CWC shall consider the use of
liquidated damages to help ensure timely performance.
4. PROJECT MANAGEMENT. For each Project, CWC and GM shall each designate a
project manager (the "Project Managers") who shall have the
responsibilities set forth herein and otherwise agreed upon by the
parties in the Statement of Work. Each Project Manager shall be
responsible for providing timely management decisions as required or
requested relating to the Project. The CWC Project Manager shall
provide to the GM Project Manager a written report of the status of the
Project as set forth in the
-6-
7
Statement of Work. GM may also designate Divisional Representatives to
work with CWC on a specific Project.
5. APPROVAL OF DELIVERABLES. The CWC Project Manager shall submit each
item or task to be performed by CWC which must be approved by GM or
performed to the satisfaction of GM ("Deliverable") to the GM Project
Manager on or before the mutually agreed delivery date. within the time
frame mutually agreed upon by the parties in the Statement Of work, GM
shall approve or disapprove the Deliverable by providing written notice
to CWC. Any disapproval shall describe the ways in which the
Deliverable is unacceptable to GM and what corrections or improvements
are required by GM. CWC shall resubmit the Deliverable to GM for
approval as set forth herein, modified in accordance with GM's
directions, within the mutually established cure period. GM may extend
the period of time for resubmission of the Deliverable if CWC submits a
written request setting forth the specific reasons why CWC cannot
comply with the requirements together with a schedule of when CWC will
be able to resubmit the Deliverable. The parties agree that in order to
expedite the approval process, CWC may submit draft versions of a
Deliverable prior to the required date for the informal comment of the
GM Project Manager and any other relevant GM personnel. By approving a
Deliverable, GM represents only that it has reviewed the Deliverable
and detected no errors or omissions sufficient enough to warrant the
withholding or denial of payment, if any, for such Deliverable. GM's
approval of a Deliverable does not discharge CWC's obligation to
provide a completed Product that as a whole conforms to the Applicable
Specifications.
6. ACCEPTANCE OF PRODUCT(S).
(a) DELIVERY AND INSTALLATION. Immediately upon the completion of
each phase of a Project excluding maintenance services
enumerated and described in the Statements of Work, CWC shall
deliver the Product(s) and/or deliver all Documentation and
other materials required to be provided under such phase
including the Program Report provided for in Section 4
hereof). CWC shall notify GM when products are ready for
testing by GM.
(b) ACCEPTANCE TESTS. Within the time frame as set forth in the
Statement of Work after receipt of such notice, GM shall
perform the Acceptance Tests of the Product(s). In addition,
if applicable, upon completion of final phase of a Project,
the Acceptance Tests shall be performed on all products
comprising a
-7-
8
Project as a whole in order to determine whether the
integration of the Product(s) and any necessary equipment
meets the Applicable Specifications and Acceptance Test
completion criteria for the Project set forth in the Statement
of Work and operates with internal consistency. If the
Products fail to meet any applicable Acceptance Tests, GM
shall forthwith notify CWC, and CWC shall, within the time
period set forth in the Statement of Work hereto, modify or
improve the Product(s) delivered to GM to ensure that the
Product(s) and the Project as a whole meet the Acceptance
Tests. GM shall thereafter have an additional test period of
equal duration to reconduct the Acceptance Tests. After a
reasonable number of acceptance tests failure of the
Product(s) to meet the aforesaid specifications and
performance standards after the additional set of Acceptance
Tests shall constitute a default by CWC under Section 14
hereof.
(c) ACCEPTANCE. GM shall notify CWC upon the Acceptance Date which
shall constitute Acceptance of the Products.
7. CHARGES, PRICES, AND FEES FOR PRODUCTS AND SERVICES.
(a) DETERMINATION. Charges, prices, and fees ("Charges") and
discounts, if any, for Products and Services related to each
Project shall be determined as set forth in the applicable
Statement of Work, in a Purchase Order, or as otherwise agreed
upon by the parties, unless modified as set forth herein, in
no event shall Charges exceed CWC's then current established
Charges.
(b) MODIFICATION TO CHARGES. Except as otherwise provided in the
Statement of Work, CWC shall provide to GM at least sixty (60)
days' prior written notice of a change in an established
Charge for Products or Services.
(i) Except as otherwise set forth herein, any increase in
a Charge 9a) shall not occur during the first twelve
(12) months of this Agreement, during the term of the
applicable Purchase Order or during the specified
period for performance of Services, whichever period
is longer, or occur more than once annually
thereafter, and (b) shall not exceed the percent
increase in the Consumer Price Index, U.S. city
Average, All Items published by the Bureau of Labor
Statistics of the United States
-8-
9
Department of Labor "CPI" during the most recent
calendar year for which the CPI is available.
(ii) All Purchase Orders issued by GM prior to the end of
the required notice period will be honored at the
then current Charges so long as the scheduled
delivery date of the applicable Products or Services
is within ninety (90) days after the effective date
of the increase.
If CWC's established Charge on the scheduled delivery date is lower
than the established Charge for such Product or Service stated in the
applicable Purchase Order, then GM shall be entitled to obtain such
Product or Service at such lower Charge, less any applicable discount.
(c) PAYMENT. Payment by GM of the purchase price of Products or
Services for each Project shall be made to CWC in accordance
with the applicable Statement of Work. Provided, however, that
all payments for Product development Services shall be made to
CWC only upon successful completion of milestones and/or
deliverables for a Project, unless the GM Authorized
Purchasing Personnel specifically agrees otherwise. Payment
terms are Net 25th Prox. and payment will be made by
Electronic Data Interchange to the extent CWC qualifies for
such in accordance with GM" established policies and
procedures.
(d) INVOICES. A "correct" invoice shall contain (i) CWC's name and
invoice date, (ii) the specific Purchase Order number, (iii)
description, price, and quantity of the Products or Services
actually delivered or rendered, (iv) credits (if applicable),
(v) name (where applicable), title, phone number, and complete
mailing address of responsible official to whom payment is to
be sent. A correct invoice must be submitted to the
appropriate invoice address listed on the Purchase Order.
(e) TAXES. Unless GM provides CWC with a valid tax exemption
number or as otherwise provided herein, GM shall pay directly
or reimburse CWC for all taxes, assessments, permits, and
fees, however designated, which are levied upon this Agreement
or the Products and Services, or their use, excluding
franchise taxes and taxes based upon CWC's income.
-9-
10
(f) RIGHT TO AUDIT. CWC hereby grants to the GM Audit Staff or
independent Auditors a right to audit direct labor hours and
expenses related to work authorized under this Agreement. CWC
shall maintain a separate account which shall be subject to
such audit by GM at any time during the progress of work and
after completion of work upon two (2) business days notice.
CWC further agrees to maintain the records in a manner to
facilitate an audit and agrees that such audit may be used as
a basis for settlement of charges for work authorized under
this Agreement.
8. PROVISION OF MOST FAVORABLE TERMS. Except as otherwise agreed in a
Statement of Work or in a fixed price contract, CWC warrants and agrees
that each of the Charges, terms, warranties, or benefits granted to GM
pursuant to this Agreement or in any Purchase Order are comparable to
or better than the equivalent Change, term, warranty, or benefit being
offered by CWC to any customer of CWC for similar services under
similar conditions. If CWC shall enter into arrangements with any
customer of CWC (except the United States Government) providing for
such similar more favorable Charges, terms, warranties, or benefits,
then this Agreement or the applicable Purchase Order or Statement of
Work shall thereupon be deemed amended to incorporate the more
favorable Charges, terms, warranties, or benefits and CWC shall
immediately notify GM of such more favorable Charges, terms,
warranties, or benefits.
9. CHANGE ORDERS.
(a) CHANGE REQUESTS. The GM Project Manager shall immediately
notify the CWC Project Manager in writing of changes that will
expand or reduce the scope of a Purchase Order or alter the
Applicable Specifications. CWC Authorized Purchasing Personnel
shall notify GM Authorized Purchasing Personnel in writing as
soon as practicable of technical problems/events/new
information/program changes that could result in an increase
or decrease in costs or dates. A log of such change requests
is to be maintained by the CWC Project Manager and the GM
Project Manager.
(b) IMPLEMENTING CHANGES. If GM and CWC desire to make such
changes described above, CWC Authorized Purchasing Personnel
will document the change and provide a written proposal for
incorporating the change with supporting information to the GM
Authorized Purchasing Personnel for
-10-
11
consideration. Approval of both GM and CWC Authorized
Purchasing Personnel must be obtained in writing in order to
implement the changes necessitating the changes in costs,
changes in schedules, or changes to Deliverables. The
Statement of Work will be amended by GM and CWC Authorized
Purchasing Personnel to reflect the agreed upon changes. No
agreements or actions communicated during a technical contact
shall change the responsibilities, cost, schedules, or
requirements of the Statement of Work to either party, unless
reduced in writing and signed by both GM and CWC Authorized
Purchasing Personnel.
10. NONCOMPETITION. During the performance of this Agreement, CWC agrees
not to perform any Services or provide any Product(s), directly or
indirectly through third parties, for any Competitor of GM, unless
bidding for Products or Services against other suppliers who are not so
constrained.
11. LICENSE OF PRODUCT(S); OWNERSHIP OF DOCUMENTATION.
(a) Upon Acceptance of the Product(s) by GM, CWC will grant to GM
an exclusive, perpetual, irrevocable, non-transferable,
worldwide, royalty free, paid-up, license to use, modify or
permit others to do so, and create derivative works for GM to
use but only for the Original Intended Purpose under any
patents, copyrights, or other proprietary rights of CWC.
(b) GM acknowledges and agrees that the Product(s) shall be and
remain the property of CWC and that this Agreement grants GM
no title or rights of ownership in the Products except as set
forth herein. GM further agrees that selected subroutines and
modules contained within the Products are, and will continue
to be, used by other CWC customers, and said subroutines and
modules shall be considered nonexclusive to GM.
(c) Transfer of Products. The rights and license granted to GM
hereunder may not be assigned, subleased, sold, offered for
sale, disposed of, encumbered or mortgaged, except in the
event that CWC shall cease directly licensing Users, in which
case CWC hereby grants to GM the right to sublicense the
executable version of the Products to Users pursuant to the
terms and conditions attached hereto as Exhibit 11(c);
provided that each User signs such agreement prior to their
receipt of the Product.
-11-
12
(d) Overseas Use. Ninety (90) days before the distribution of the
Products in any non-U.S. country, GM shall notify CWC so that
CWC can (i) approve of distributing the Products in the
non-U.S. country and (ii) obtain review if appropriate by
counsel in the non-U.S.country of this Agreement or the
applicable Statement of Work.
CWC may require changes in this Agreement or the applicable
Statement of Work from time to time or with respect to use in
a particular country.
(e) Provision of Source Code.
(i) Within thirty (30) days of the Acceptance Date for a Product,
CWC shall place with the GM Legal Staff one complete set of
source code with associated documentation for the Product
("Source Materials"). The Source Materials shall include
machine-readable, high level language code for the Product, as
well as machine-readable listings, tables and references
required to use the high level language code and shall be in
the form of 3 1/2 inch floppy disks. CWC represents and
warrants to GM that:
(1) the Source Materials constitute the source code and
documentation for the Product licensed to GM pursuant
to this Agreement or a Statement of Work; and
(2) the Source Materials are in a form suitable for
reproduction by computer and/or photocopy equipment,
and consist of a full source language statement of
the program or programs comprising the Product and
complete program maintenance documentation, including
all flow charts, schematics and annotations which
comprise the precoding detailed design
specifications, and all other material necessary to
allow a reasonably skilled third party programmer or
analyst to maintain or enhance the Product without
the help of any other person or reference to any
other material. The Source Materials shall be
delivered under seal for safekeeping to the GM Legal
Staff at P.O. Box 33122, New Center One Building,
3031 West Grand Boulevard, Detroit, Michigan 48232.
Source Materials shall not
-12-
13
be made available to anyone outside the GM Legal
Staff unless and until the occurrence of a Triggering
Event (as defined below). CWC agrees to update and
maintain the Source Materials held in safekeeping to
reflect all changes made thereto through maintenance,
enhancements, revisions or otherwise. All such
changes to the Source Materials shall also be
delivered in the required form to the GM Legal Staff
under seal.
(ii) GM may break the seal and use the Source Materials five (5)
days after written notice to CWC that the GM Legal Staff has
made a finding that one of the following "Triggering Events"
has occurred:
(1) it has established by clear and convincing evidence
that CWC is unable to meet its material obligations
to develop and/or maintain the Product(s) under any
Statement of Work for a running period of thirty (30)
days after notice to CWC in writing.
(2) CWC has been declared bankrupt, has voluntarily
petitioned a court for relief under any bankruptcy
laws, has been declared insolvent, has made an
assignment for the benefit of creditors, suffers or
permits the appointment of a receiver for its
business or assets, becomes subject to any proceeding
under any bankruptcy or insolvency law, whether
domestic or foreign, or has wound up or liquidated
its business voluntarily or otherwise and GM has
compelling reasons to believe that such event(s) will
cause CWC to fail to meet its obligations under this
Agreement or a Statement of Work in the foreseeable
future.
(3) after the applicable period of time identified in a
Statement of Work, under which GM has contracted for
CWC to provide maintenance, GM decides to use a party
other than CWC to maintain the Product. In such
event, CWC shall have the right of last refusal to
match any lower bids received by GM for such
maintenance services.
(4) the sale, assignment, or other transfer by CWC,
without the prior written consent of GM, of such of
CWC's rights in the Product
-13-
14
as would prevent CWC from the discharge of its
obligations with respect to the performance of the
Product under the Statement of Work; or
(5) the termination of this Agreement or the applicable
Statement of Work for the Product by GM for CWC's
material default. In the event that CWC shall contest
any such finding by the GM Legal Staff, GM shall
nevertheless have the use of the Source Materials as
permitted herein, and the matter shall be immediately
submitted to the dispute resolution procedures
identified in Section 14 of this Agreement.
(iii) GM shall retain a copy of the Source Materials as they existed
when unsealed and shall use a copy of the Source Materials
only to complete or maintain such Product as may be defined in
an applicable Statement of Work or to cause such Product to be
completed or maintained by a third party. In the event GM
causes a third party to use the Source Materials, GM shall
cause such third party to agree in writing that the Source
Materials shall be maintained in confidence in accordance with
the confidentiality provisions of this Agreement and shall be
used only for the Original intended purpose. If GM uses the
Source Materials or causes a third party to complete or
maintain any Product, unless otherwise determined during
dispute resolution proceedings requested by GM, CWC is
relieved of all warranties, liabilities and indemnification
provisions of this Agreement with respect to the Product to
the extent such modifications are the cause of a warranty
defect or infringement claim.
(iv) Following release of the Source Materials as permitted above,
GM shall seal the Source Materials as they existed when
unsealed and as they exist after any modifications reflecting
the permitted use and return them to the GM Legal Staff, where
they shall be secured until dispute resolution proceedings, if
any, shall determine the further use, if any, of the Source
Materials.
12. WARRANTIES. CWC hereby represents and warrants that:
-14-
15
(a) CWC has not entered into agreements or commitments which are
inconsistent with or conflict with the rights granted to GM
herein;
(b) Except for any security interest established by GM herein, the
Products shall be free and clear of all liens and
encumbrances, and GM shall be entitled to use the Products
without disturbance;
(c) Except as provided for in the Statement of Work, all Products
shall comply with all applicable provisions of standards or
draft standards issued by the international Standards
Organization (ISO);
(d) Each Product (i) shall be free from defects in manufacture,
materials, and design, (ii) shall be manufactured in a good
and workmanlike manner using a skilled staff fully qualified
to perform their respective duties, and (iii) shall function
properly under ordinary use and operate in conformance with
its Applicable Specifications and Documentation or CWC shall
repair or replace the defective Product at no charge to GM
during any period when GM is making maintenance payments to
CWC.
(e) Where applicable as indicated in a Statement of Work, the
Products are, and shall continue to be, data, program, and
upward compatible with any other Products available or to be
available from CWC so that data files created for a Product
can be utilized without adaptation of the other Products and
so that programs written for Products will operate on the
other Products and not result in the need for alteration,
emulation, or the loss of efficiency. Where applicable, as
indicted in a Statement of Work each Product is, and shall
continue t be, compatible with other Products provided by CWC
and each Product contained within a Project shall be fully
integrated, compatible, and operable with all other Products
contained within the Project. CWC shall provide to GM at least
ninety (90) days prior written notice to discontinue any
Product. If the course of the evolution of the technology,
conditions outside CWC's control limit CWC from compliance
with the condition, GM will release CWC from its
responsibility to meet this provision.
THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES WHETHER
EXPRESSED, IMPLIED OR STATUTORY INCLUDING IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
-15-
16
13. INDEMNIFICATION
(a) Proprietary Rights Indemnification. If notified promptly in
writing of any judicial action brought against GM based on an
allegation that GM's use of the Products infringes any patent,
copyright, trademark, mask work or any rights of a third party
or constitutes misuse or misappropriation of a trade secret
(Infringement), CWC will defend such action at its expense and
will pay the costs and damages awarded in any such action or
the cost of settling such action. CWC shall have sole control
of the defense of any such action and all negotiations for its
settlement or compromise. If notified promptly in writing of
any informal claim (other than a judicial action) brought
against GM based on an allegation that GM's use of the
Products constitute Infringement, CWC will pay the costs
associated with resolving such claim and will pay the
settlement amount (if any), provided that CWC shall have sole
control of the resolution of any such claim and all
negotiations for its settlement. In the event a final
injunction shall be obtained against GM's use of the Products
by reason of infringement, or in CWC'
(i) procure for GM the right to continue to use the
Products as contemplated hereunder, or
(ii) replace or modify the Products to make its use
hereunder non-infringing while being capable of
performing the same function. If neither option as
reasonably available to CWC, then the applicable
Purchase Order or relevant part of such Purchase
Order may be terminated at the option of either party
hereto without further obligation or liability other
than as provided in Section 16 hereof, except as
follows: (i) Periodic Payment License, CWC shall
promptly refund to GM a monthly prorated amount of
the prepaid fees for the unexplored portion of the
applicable payment period; (ii) Lump Sum Payment
License. CWC shall promptly refund to GM a sum equal
to one thirty-sixth (1/36) or extension, if
applicable, of the lump sum fee paid for each month
remaining of a three (3) year period beginning from
the Acceptance Date of the Products by GM, plus a pro
rata amount of the prepaid charges for services for
the period then in effect, if any, paid by GM.
-16-
17
GM shall have the right to participate in the defense
of any such claim at its own expense through counsel
of its choice.
CWC will not indemnify GM, however, if the claim of
infringement is caused by (1) GM's misuse or
modification of the Products, (2) GM's failure to use
corrections or enhancements made available by CW, (3)
GM's use of the Product in combination with any
product or information not owned or developed by CWC,
(4) GM's distribution, marketing or use for the
benefit of third parties other than Users of the
Product; or Data.
(b) If notified promptly in writing of any judicial action brought
against CWC based on al allegation that CWC's use of the Data
infringes any patent, copyright, trademark, mask work or any
rights of a third party or constitutes misuse or
misappropriation of a trade secret (infringement), GM will
defend such action at its expense and will pay the costs and
damages awarded in any such action or the cost of settling
such action. GM shall have sole control of the defense of any
such action and all negotiations for its settlement or
compromise.
(c) Cross Indemnification. While at the facilities of the other
party, in the event any act or omission of a party or its
employees, servants, agents, or representatives causes or
results in (i) loss, damage to or destruction of property of
the other party or third parties, and/or (ii) death or injury
to persons including, but not limited to, employees or
invitees of either party, then such party shall indemnify,
defend, and hold the other party harmless from and against any
and all claims, actions, damages, demands, liabilities, costs,
and expenses, including reasonable attorneys' fees and
expenses, resulting therefrom. The indemnifying party shall
pay or reimburse the other party promptly for all such loss,
damage, destruction, death, or injury.
14. DISPUTE AND TERMINATION.
(a) NEGOTIATIONS OF DISPUTES. In the event of any dispute or
disagreement between GM and CWC to the Agreement with respect
to the interpretation of any provision of the Agreement or the
performance of CWC or GM under the Agreement, upon the written
request of either party, the applicable GM and CWC Project
Managers, or a designated representative of either of them,
will meet for the purpose of resolving such dispute or
negotiating an adjustment or
-17-
18
modification to such provision of the Agreement. The GM and
CWC Project Managers or designated representatives shall meet
as often as the parties reasonably deem necessary in order to
furnish to the other all information with respect to the
matter in issue which the parties believe to be appropriate
and germane in connection with its resolution. The GM and CWC
Project Managers or designated representatives will discuss
the problem and negotiate in good faith without the necessity
of any formal proceeding relating thereto. During the course
of such negotiation, all reasonable requests made by one party
to the other for information will be honored in order that
each of the parties may be fully advised in the premises. The
specific format for such discussion will be left to the
discretion of the GM and CWC Project Managers or designated
representatives but may include the preparation of agreed upon
statements of fact or written statements of position furnished
to the other party.
(b) RESOLUTION OF DISPUTES. Any dispute relating to the Agreement
which cannot be resolved by the respective GM and CWC Project
Managers or their designated representatives within thirty
(30) days of a written notice of such a dispute from one party
to the other party will be referred to the GM Director of
Dealer Communications and Systems and CWC President or their
designees for resolution within an additional thirty (30) day
period.
(c) TERMINATION. After exhausting the dispute resolution
procedures set forth above, either party shall have the right
to terminate this Agreement as follows:
(i) In the event CWC materially defaults in the
performance of a Project and fails to cure or ails to
make substantial progress to cure such default within
the sixty (60) day time period set forth in Section
14.(b) above for dispute resolutions, GM may, in its
sole discretion, elect to:
(1) terminate the Project, return to CWC all
Documentation and receive a pro-rata refund
from CWC of all amounts paid to CWC with
respect to the Project.
(2) extend the time for CWC performance at no
additional charge to GM;
-18-
19
(3) continue development itself or in
conjunction with a third party. In the event
GM elects to continue development itself or
utilizing a third party, CWC shall provide
to GM all Documentation or other CWC
Proprietary Information reasonably required
to complete such development to include
appropriate updates to the Source Materials
provided under Section 11(e). GM agrees that
any third parties pursuing such development
with GM shall agree in writing to comply
with the Restrictions on Use, and
Confidentiality obligations set forth in
Section 16 of this Agreement to protect
CWC's Proprietary Information. GM agrees and
any such third parties shall agree in
writing that they may use the information
only for the Original Intended Purpose and
as necessary in order to complete the
Project but for no other development beyond
the specific Project.
Upon any such termination under this Section
GM shall also be entitled to recover
reprocurement costs from CWC in excess of
amounts payable to CWC under this Agreement.
(ii) CWC shall have the right to terminate this Agreement
if GM commits any material breach of this Agreement
and fails to remedy or make substantial progress in
remedy such breach within the sixty (60) day time
period set forth in Section 14(b) above for dispute
resolution.
15. MAINTENANCE AND SUPPORT
(a) Mandatory Support Services. Except as otherwise set forth in
the Statement of Work, CWC shall provide the following support
Services and Products:
(i) Improvements. Improvements in the Products (which
shall mean any additions or modifications made by CWC
to or in the Products at any time after the
Acceptance Date) which will improve the efficiency
and effectiveness of this basic program function(s)
described in the Purchase Order and which do not
change such function or create one (1) or more new
functions, shall be furnished to GM at no charge.
-19-
20
(ii) Program Changes. If, at any time after the Acceptance
Date, CWC shall develop any changes in the Products
which change the basic program functions of the
Products or add one (1) or more new functions, GM
shall have the right to obtain such program changes
at the lesser of (i) CWC's standard prices then in
effect for installing such changes, or (ii) the
difference between the then current price of the
Products including such changes and the applicable
fees and charges for the Products reflected herein.
(b) Additional Support Services. AT GM's request, CWC shall
provide additional support Services for the Products as set
forth in a Statement of Work;
(c) If for any reason GM decides to have maintenance and support
services performed by a third party, CWC shall have the right
of last refusal to match any third party proposal for
maintenance and other services.
16. RESTRICTION ON USE CONFIDENTIALITY
(a) This Agreement, the Products, GM pricing data, competitive
pricing data, and all other information exchanged by the
parties under this Agreement, specifically identified in
writing as confidential and proprietary or its equivalent and
transmitted by either party to the other shall be maintained
in confidence by the receiving party and the receiving party
shall use the Products and such information only as authorized
by this Agreement and for no other purpose. CWC and GM agree
to take reasonable precautions to protect against unauthorized
disclosure of the Products and such information to third
parties other than Users.
(b) Neither CWC nor GM shall be obligated to maintain any
information received from the other party as confidential and
refrain from use, if the information:
(i) becomes publicly known through no fault of the
receiving party;
(ii) is learned by the receiving party from a third party
entitled to disclose it;
-20-
21
(iii) is already known by the receiving party prior to
obtaining the information from the disclosing party;
(iv) is independently developed by the receiving party
without utilization of the information of the
disclosing party;
(v) is or becomes available on an unrestricted basis to a
third party from the disclosing party or from someone
acting under its control; or
(vi) is required to be disclosed under an order created by
a court or government agency, provided that prior
written notification of the order and opportunity to
oppose the order is provided to the owner of the
information to be disclosed.
(c) GM shall cooperate with CWC to help ensure that each User
upholds the confidentiality and use requirements imposed upon
them through the agreement set forth in Exhibit 11(c); GM
agrees to notify CWC immediately after gaining knowledge of
the possession, use, disclosure or reproduction of the
Products by any party not authorized reproduction and to
cooperate with CWC and its representatives in any
investigation of and litigation against such user.
17. NOTICES. Except as otherwise specifically provided for herein, all
notices required or permitted to be given by either party under or in
connection with this Agreement shall be in writing and shall be deemed
duly given when personally delivered or sent by registered or certified
mail, return receipt requested, postage prepaid, or by prepaid
recognized overnight delivery service, or if confirmed by letter, by
facsimile, or by cable, to the other party at the address set forth in
Exhibit 17, or such other address as may be requested by either party
by like notice.
18. MODIFICATIONS AND AMENDMENTS. No addition to, deletion from or
modification of any of the provisions of these terms and conditions
shall be binding upon the parties unless made in writing and signed by
the Authorized Contracts Personnel of each party. Any such additions,
deletions or modifications shall refer specifically to this Agreement
and shall also state that it is an amendment hereof.
-21-
22
19. FORCE MAJEURE. Any delay or failure of either party to perform its
obligations hereunder shall be excused if, and to the extent that it is
caused by an event or occurrence beyond the reasonable control of the
party and without its fault or negligence, such as, by way of example
and not by way of limitation, acts of God, actions by any governmental
authority (where valid or invalid), fires, floods, windstorms,
explosions, shots, natural disasters, wars, sabotage, labor problems
(including lockouts, strikes and slowdowns), inability to obtain power,
material, labor, equipment or transportation, or court injunction or
order; provided that written notice of such delay (including the
anticipated duration of the delay) shall be given by the affected party
to the other party within ten (10) days.
20. LIMITATION OF LIABILITY AND REMEDIES. Except for the indemnification
set forth in Section 13 (with the exception of foreign patents which
shall be subject to this limitation of liability:
(a) LIMITATION OF LIABILITY. In no event shall either party be
liable for any loss of profit or revenue by the other party or
for any consequential, incidental, indirect or economic
damages incurred or suffered by either party arising as a
result of or related to this Agreement, whether arising in
contract, tort (including without limitation, negligence or
strict liability) or otherwise, even though either party has
been advised of the possibility of such loss or damages.
(b) LIMITATION OF REMEDY. The total liability of either party for
all claims of any kind arising from, or related to, this
Agreement, whether based on contract, tort including, but not
limited to, strict liability and negligence, warranty or on
other legal or equitable grounds, shall be limited to general
money damages and shall not exceed an amount equal to
$500,000.
21. INSURANCE. CWC shall remain insurance coverage in amounts not less than
the following:
(a) Worker's Compensation - Statutory Limits for the state or
states in which this Agreement is to be performed (or evidence
of authority to self-insure);
(b) Employer's Liability - $250,000;
-22-
23
(c) Comprehensive General Liability (including Products/Completed
Operations and Blanket Contractual Liability) - $1,000,000 per
person, $1,000,000 per occurrence Personal Injury, and
$1,000,000 per occurrence Property Damage, or $1,000,000 per
occurrence Personal Injury and Property Damage combined single
limit; and
(d) Automobile Liability (including owned, non-owned and hired
vehicles) - $1,000,000 per person, $1,000,000 per occurrence
Personal Injury and $1,000,000 per occurrence Property Damage,
or $1,000,000 per occurrence Personal Injury and Property
Damage combined single limit. At GM's request, CWC shall
furnish to GM certificates of insurance or other adequate
proof of self-insurance setting forth the amount(s) of
coverage, policy number(s) and date(s) of expiration for
insurance maintained by CWC and, if further requested by GM,
such certificates will provide that GM shall receive thirty
(30) days' prior written notification from the insurer of any
termination or reduction in the amount or scope of coverages.
GM shall allow CWC, upon proof of adequate self-insurance, to
self-insure the above insurance requirements. CWC's purchase
of appropriate insurance coverage or the furnishing of
certificates of insurance shall not release CWC
