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HomeMy WebLinkAbout2011-055 Tax Administration - Farragut Systems, Inc. for Tax Software, Licensing and Fees $15,000~ .~s FARRAGUTTm SOFTWARE LICENSE AND SUPPORT AGREE1111ENT This Software license and Support Agreement ("Agreement") is entered into by and between Farragul Systems, inc., a NaRh Carolina corporation having a place of business In Durham, North Catalina 27793 ("Farragul"), and Orange County {"Customer'), a governmental agency with a mailing address of its executive offrces aE P O Box $189, Hillsborough, NC 27278. This Agreement, including the attached Software License and Support Terms, sets #orth the terms of Customer's license of the Software from Farragut and Farragut's support services to be provided to Customer. The following Schedules are attached to this Agreement and made a part hereof: Schedule A Software Description, licensed location, and Fees Schedule B Software Support Customer acknowledges it has read and understands this Agreement (including all Schedules and exhibits as applicable) and is entering into this Agreement only on the basis of the terms expressly set forth in this Agreement. Any executed copy of this Agreement made by reliable means {e.g. photocopy or facsimile) )s considered an original. The "Effective Data" of this Agreement is January 18, 2011. Agreed and Accepted: t=arragut Systems, inc. Customer; Orange By; By: Name: t j Name: Tllle: Vic/efPresident of local Gov Solutions Title: _____.~'~~ Dafe: ~ ~ a~ ~ j ~ Date: ~~.,_~ FARRAGUT SYSTEMS SOFTWARE LICENSE AND SUPPORT TERMS 1. Software License. 1.1 License. Subject to the terms of ibis Agreement, Farragut grants to Customer a non- exclusive, non-transferable, perpetual license to use the Software in executable code form only for Customer's internal business purposes. The Software maybe installed only on the Computers} or server(s) located at the Licensed Location specified in Schedule A, which may be amended from time io time to specify additional locations as required. Customer may temporarily install the Software on a Computer(s) or server{s} at an alternative location as a disaster recovery site for fasting or other similar purposes, provided Customer promptly provides Farragut written notice of such temporary installation, including the physical address of the alternative location. 1.2 Delivery: lnstailation and Training; The Software will be deemed accepted by Customer on the Delivery Date. Customer will be responsible for ins#allation of the Software and training of its employees unless there is a separate written agreement between Customer and Farragut providing for installation and/or training by Farragut. Documentation will be in the English language and provided in printable electronic soft copy. i .S Protection of Software. appear on the copies of the Software provided to Customer. Customer shall notify Farragut of the following: (i) the location of all Software and ail copies thereof, and {ii) alt circumstances known to Customer regarding any unauthorized possession or use of the Software. c} Upon termination of this Agreement, Cus#omer's license will terminate, and Customer shall immediately discontinue ail use of the Software and return to Farragut and/or destroy {inciuding, without limitation, deleting alt electronic copies in a manner that eannof be recovered), at Farragu#'s option, the Sofrivare and all archival, disaster recovery, back-up and other copies thereof, and provide written certification #o Farragut of such return and destruction. d) Customer agrees that Farragut and its representatives may, during the term of the Agreement, inspect and/or conduct an audit of the Customer's computer site, computer systems, and/or equipment and appropriate records of Customer, in order to verify Customer's compliance with the terms of the license granted to Customer by Farragut. Farragut will provide Customer with at feast 15 calendar days prior written notice of a proposed inspection and/or audit, which will be conducted no more often than once per calendar year, at mutually agreed upon times during Customer's normal business hours. a} Customer may not, directly or indirectly: (i) cause or permit any reverse engineering, disassembly or de-compilation of the Software, or to otherwise ascertain, derive, and/or appropriate for any reason, the source code, design, architecture, logic or algorithms far the Software; (ii} create derivative works based on the Software; (iii) use the Software for application development purposes or to modify or custamize other software; (iv) modify or custamize the Software; or {v) assign, transfer, sublicense, time- share, distribute, rent, or grant any rights to the Software or use as a service bureau. b) Customer may make up to two copies of the Software for archival, disaster recovery, or backup purposes. Otherwise, Customer shaii not copy or duplicate the Software. All copies of the Software must contain all of Farragut's proprietary notices and tegends {inciuding government restricted rights) as they 1.4 IVo Transfer of Title. The So#tware and any and alt related algorithms, database structures, reports and screen layouts, and all associated intellectual property rights, are the property of Farragut. 1.5 Limited Riahts. Customer's rights in the Software will be limited to those expressly granted in this Agreement. Farragut reserves ail rights and licenses in and to the Software not expressly granted to Customer under this Agreement. 1.6 Government Users. If Customer is an agency, department, or other entity of the United States Government ("Government"}, the use, duplication, reproduction, release, modification, disclosure or transfer of the Software, manuals, or any technical specifications, or any related documentation of any kind, including technical data ("Software and documentation"j, is restricted in accordance with Federal Acquisition Regulation ("FAR") 12.212 for civilian agencies and Defense Federal Acquisition Regulation Supplement ("DEARS") 227.7202 for military agencies. The Software and documentation is commercial computer software and commercial computer software documentation. The use of the Software and documentation is further restric#ed in accordance with the terms of this Agreement, or any mad'ification thereto. 2. Software Support. 2.i Scope of Software Suap_ort. Farragut will provide Customer with support services as set forth in this Section 2 and Schedule B in accordance wish Farragut's s#andard policies, as adopted by Farragut from time to -time ("Sot ar u o "). Software Support is subject to Customer's proper use of the Software, Customer's cooperation with Farragut as provided in Section 5.4, the Exclusions from Warranty and Support Coverage set forth in Section 3.2, Customer's payment of the required Annual Support Fees, and Customer's continued compliance in ail material respects with the terms of this Agreement. 2.2 Tgrm of Software- Support. Annual Support Fees will be invoiced upon i2 month periods, as furti~er described in Section 4.2. !f Customer does not pay the invoice for the next annual Software Support period, then Software Support will not be renewed. if Customer elects to purchase Software Support, then Customer must purchase Software Support with respect to ail of the Software licensed by Customer. Ali Annual Support Fees are nonrefundable except as expressly provided herein 2.3 Termination. fay notifying the other party in wri#ing at feast 30 days before expiration of the Software Support period, a party may elect to terminate Software Support for the Software. If this Agreement is terminated, then Software Support also will terminate. 2.4 Modifications. Farragut may modify its Software Support upon written notice to Customer, except that in no event may Farragut make any moth#icafions io its Software Support that would materially reduce the level of Software Support that Farragut provides to Customer hereunder during the then-current term for which Customer has paid Annual Support Fee. 3, Limtted Warranties. 3.i Software Limited Warranty. Farragut warrants that during the Warranty Period the Software will perform, during normal and proper use, substantially as described in the specifications set forth in the then-current Documentation accompanying the Software, when the Software has been property installed. Due to the complex nature of computer software, Farragut does not warrant that the functions contained in the Software or in any Software Maintenance Release wilt meet the requirements of Customer or that the operation of the Software, including Software Maintenance Releases, will be uninterrupted or error free. Failure to conform to the warranty must be reported by Customer to Farragut in writing within the Warranty Pertod and must be accompanied with sufficient written detail to enable Farragut to reproduce or verify the error and provide a solution or suitable waric-around. If the Software does not conform to this warranty and Farragut is properly notified of non- conformance during the Warranty Pertod, Farragut will make commercially reasonable efforts to provide a remedy or suitable workaround, at no additional charge to Customer. Customer acknowledges and agrees that Phis warranty is contingent upon and subject to Customer's proper use of tire- Software in accordance with the then- current Documentation, and the Exclusions from Warranty and Support Coverage set forth in Section 3.2. The remedies set forth in this Sec ion 3.1 are the full extent of Customer's remedies and Farragut's obligations regarding this warranty. 3.2 Exclusions from Warren#v and Support ver e, The warranties under this Se io 3 and Software Support under Section 2 do not cover defects, errors, or malfunctions that are caused by any external causes, including, but not limited to, any of fhe following: {a) Customer's failure to follow operational, support, or storage instructions as set forth in applicable Documentation; (b} the use of non-compatible media, supplies, parts, or components; (c) modificaticn or alteration of the Software or its components, by Customer or any third party; (d} use of software not supplied or authorized by Farragut; (e) external factors (including, without limitation, power failure, surges or electrical damage, fire or water damage, air conditioning failure, humidity control failure, or corrosive atmosphere harmful to electronic circuitry); (f} failure to maintain proper site specifications and environmental conditions; (g} negligence, accidents, abuse, neglect, misuse, or tampering; -2- including attacks by malicious software such as viruses, Trojan horses, worms, time bombs, cancelbots or other similar harmful or deleterious software. routines; (h} improper or abnormal use or use under abnormal conditions; (i} use in a manner not authorized by this Agreement or use inconsistent with Farragut's Documentation; (j) use of Software on equipment #hat is not in good operating condition or defects in Customer infrastructure; (k) acts of Customer, its agents, servants, employees, or any .third party; (I) servicing or support by any third party, or without written authorization by Farragut; or (m) Force Majeure. Farragut reserves the right to charge for repairs on atime-and-materials basis at Farragut's then-prevailing rates, plus expenses, and for replacements at Farragut's standard prices caused by these exclusions from warranty and support coverage. 3.3 Disclaimer. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EXCEPT FOR THE WARRANTIES IN THIS SECTION 3, {A) THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE UNDER THIS AGREEMENT OR IN CONNECTION WITH THE LICENSE, SOFTWARE SUPPORT OR PERFORMANCE OF OTHER SERVICES, AND (B) FARRAGUT DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, TITLE, AND NONINFRINGEMENT FOR ALL SOFTWARE, SOFTWARE SUPPORT AND OTHER SERVICES. THE irXPRESS WARRANTIES EXTEND SOLELY TO CUSTOMER. 4. Fees. 4.1 License Fees. Upon execution of this Agreement, Customer will pay Farragut the License Fees (the °License Fees") in the amount set forth on Schedule A. Farragut will invoice Customer, for the License Fees, and the License Fees are due within 30 days after the date of invoice. 4.2 Annual Suoport Fees. Customer will pay Farragut the Annual Support Fee in the amount set forth on Schedule A on or before each Anniversary Date of this Agreemenf. Farragut will use reasonable efforts to invoice Customer for the Annual Support Fee at feast 60 days before the due date. Customer will pay the support fee within thirty (30} days of receipt of a correct invoice from Farragut. 4.3 Additional Charges. Additional charges may apply for services and products not included in So€tware Support or for services rendered outside contracted hours or beyond normal. coverage at Customer's request, e.g., travel expenses, premium and minimum charges. Any additional charges must be mutually agreed to in advance by Customer and Farragut and documen#ed in writing wish a letter signed by Farragut's President and the Burke County Manager {or their designees), and, subject to budgeted funds, a purchase order may then be issued by the County to cover such charges, except for charges resulting from defects in Customer Infrastructure as given in Section 2.5~e} of Schedule B. Farragut wilt invoice Customer for additional charges Incurred under this Agreement. Payment is due on these invoices within 30 days after the date of invoice. 4.4 Pa ent. Unless otherwise stated herein, Customer will pay Farragut any fees due under this Agreement within 30 days after the invoice date. Cusfomer shall pay Farragut all amounts due in U.S. dollars. Ali payments are to be made to Farragut at its office In Durham, North Carolina ar to such other location as is designated by Farragut by written notice to Customer. Unless otherwise expressly set forth in this Agreement, ail fees paid or due hereunder by Customer are non- refundable. If any payments are past due and the Customer has not disputed an invoice, Farragut may, withcut waiving any other available rights or remedies, (a) suspend performance under any or ail of this Agreement until payments are current, {b) decide not to accept additional SOW's or other orders from Customer under other agreements, if any, between Cus#omer and Farragut, andior (c) seek collection of alt amounts due. In the event the amount c# an invoice is disputed, County may withhold payment until the dispute is resolved by the parties, without being in material breach of this Agreemen#. 4.5 Taxes and Duties. Cus#omer shalt be responsible for paying all taxes and duties in connection with this Agreement, including taxes paid or payable by Farragut or which Farragut is required to collect, in connection with the products or services provided by Farragut to Customer hereunder, or arising from Customer's use, 3- operation or possession of the Software, or any part thereof, but excluding any taxes based upon Farragut's income. This provision does not apply to any taxes for which Customer is exempt and for which Customer has furnished Farragut with a valid tax exemption certificate authorized by the appropriate taxing authority. 5. Customer's Responsibilities. 5.1 Independent Determination. Customer has independently determined that the Software provided under this Agreement currently meets Customer's requirements. 5.2 Cooperation. a) Customer agrees to cooperate with Farragut and promptly perform Customer's responsibilities under this Agreement. Customer will provide timely access to its key personnel and will timely respond to Farragut's questions relating to this Agreement or Farragut's performance under this Agreement. b) Customer wilt, as applicable, (i) provide Farragut adequate, timely, safe and hazard-free access to its personnel, facilities, equipment, hardware, software, network and information, subject to Customer's reasonable security rules; (ii) provide adequate working and storage space for use by Farragut personnel near Customer's hardware, software and systems; (iii) provide Farragut full access to the Software and sufficient computer time; (iv} follow Farragut's procedures for placing warranty and Software Support service requests and determining if warranty or Software Support remedial service is required; (v} follow Farragut's instructions for obtaining support and warranty services; (vi) reproduce suspected detects, errors or malfunctions in Software at the request of Farragut; (vii} provide Farragut with access to the Software through the internei, VPN or other connection acceptable to Farragu# that will permit Farragut to provide warranty and support services remotely; and, (viii} timely make decisions, notify Farragut of relevant issues and information, and grant necessary approvals and/or permissions to Farragu#. 5.3 Site Maintenance; Proper Storage. Customer shaii maintain the appropriate operating environment for the Software in accordance with normally accepted Industry standards for an office. environment. Customer shall also maintain all communications equipment, telephone lines, electric fines, cabling, modems, air conditioning and all other equipment and utilities necessary for the Software to operate properly. 5.4 Use. Customer is exclusively responsible for supervising, managing and controlling its use of the Software, including but not limited to, establishing operating procedures, appropriate access and permissions, and audit controls, supervising its employees, providing adequate network security, making daily backups, inputting data, ensuring the accuracy and security of data input and data output, monitoring the accuracy of information obtained, and managing the use of information and data obtained. Customer will ensure that its personnel are, at all times, educated and trained in the proper use and operation of the Software. Customer wiA ensure that the Software is used in accordance with its Documentation. Customer shah comply with ail applicable laws, rules and regulations with respect to its use of the Software. 5.5 8ackuos. CUSTOMER iS RESPONSiBlrE FOR BACKING UP CUSTOMER'S DATA, SOFTWARE AND SYSTEMS. Customer wilt maintain back-up data, software and systems necessary to replace critical Customer data, software and systems in the event of loss, corruption or damage to data, software or systems from any cause. 6. Conffdentiallnformation. 6.1 Confidentiality. Customer shalt keep in confidence and protect Farragut Confidential lrtformaiion from disclosure to third parties and will restrict its use to uses expressly permitted under this Agreement. Customer shaii take ail reasonable steps to ensure that the Confidentiat Information is not disclosed, copied, misappropriated or used in any manner not expressly permitted by the terms of this Agreement. Customer shall keep the Confidential Information and all tapes, diskettes, CDs and other physical embodimenls of the Confidential Information, and alt copies thereof, ai a secure location and limit access to those employees who must have access to enable Customer to use the Software. Each permitted copy of Confidential Information, Including its storage media, must be marked by Customer to include alt notices that appear on the original. Title, copyright and all other proprietary rights in and to the Confidential Information at all times remains vested` exclusively in Farragut. If 4- Customer is compelled by subpoena or court order to disclose Farragut Confidential Infarmation, Customer shall promptly notify Farragut upon receipt of the subpoena or court order and shat! reasonably cooperate with Farragut, at Farragut's election and expense, in contesting or limiting the subpoena or court order. Customer shall limit its disclosure to the extent and terms required by the subpoena or court order and related protective orders. 6.2 Return of Confidential information. Upon termination or cancellation of this Agreement or, if earlier, upon termination of Customer's permitted access to or possession of Confidential Information, Customer shall return to Farragut and/or destroy (including, without limitation, deleting .all electronic copies in a manner that cannot be recovered}, at Farragut's option, alt copies of the Confidential Information in Customer's possession, and provide certification to Farragut of such return and destruction. 6.3 lntellectuai Properties. All ideas, concepts, know-how, data processing techniques, documentation, diagrams, schematics, firmware, equipment architecture, software, improvements, bug fixes, upgrades and trade secrets developed by Farragut personnel {alone or jointly with Customer) in connection with Confidential tnformation will be the exclusive property of Farragut. 6.4 Support and Maintenance Materials. Customer. acknowledges that all support materials are the property of Farragut and include Confidential tnformation of Farragut. Customer agrees that it wiii not permit anyone other than Farragut installation and support personnel and authorized Customer employees to use such materials. 6.5 Customer Employees. Customer wiii inform its employees of their obligations under this Section to ensure that such obligations are met. ti.6 Public Information Act. Notwithstanding anything else to the contrary in this Agreement, the confidentiality terms and provisions of this Agreement are subject to the applicable requirements of the Public Informa#ion Aci. if Customer is asked to disclose Farragut Confidential Information, Customer shall seek confidential treatment for such information in accordance with the applicable Public Information Act. Customer shall promptly no#ify Farragut in writing of ail requests for Farragut Confidential information and shalt notify Farragut in writing before releasing any Farragut Confidential Information. 7. Term of Agreement; Terminaifon. 7.1 Term. This Agreement wilt commence on the Effective Date set forth. above the parties' signatures and wiii continue in full force and effect, unless otherwise kerminated as provided herein. 7.2 Tg_rmination. a) Either party may terminate this Agreement by giving 30 days prior written notice of termination to the other party.. !f defaulf occurs, the parties will have all remedies provided in this Agreement and otherwise available by statute, law or equity, subject to the other terms of this Agreement. b) Farragut may terminate its Software Support and other support obligations, if any, under this Agreement, by providing at feast 30 days prior written notice of such termination to Customer, if Farragut determines that any modifications to the Software that are not made by Farragut or Customer's failure to install a Saftware Maintenance Release will materially interfere with the provision of Software Support or Farragut's other obligations. 7.3 Farragut acknowledges that Customer is a governmental entity, and the validity of this Agreement is based upon the availability of public funding under the authority of its statutory mandate. In the event that publle funds are unavailable and not appropriated for the performance of Customer's obligations under this Agreement, then this Agreement shalt automatically expire without penalty to .Customer immediately upon written notice to Farragut of the unavailability and non-appropriation of public funds. it is expressly agreed that Customer shall not activate this non-appropriation provision for its convenience or to circumvent the requirements of this Agreement, but only as an emergency fiscal measure during a substantial fiscal crisis. !n the event of a change in the Cus#omer's statutory authority, mandate and/or mandated functions, by state and/or federal legislative or regulatory action, which adversely affects Customer's authority to continue its obligations under this Agreement, then this Agreement shall automatically terminate without penalty to Customer upon written notice to Farragut of such limitation or change in -5- Customer's legal authority. 7.4 Defaults. The following events will be deemed to be defaults: a) A party committing a material breach of any term of this Agreement if such breach has not been cured within 30 days after written notice of such breach has been given by the non-defaulting party to thetiefaulting party; b) A party failing to comply in any material respect with any federal, state or local laws applicable to the party's performance under this Agreement if such breach has not been cured within 30 days after written notice of such breach has been given by the non-defaulting party to the defauiting party. 7.5 Effect of Termination. The Software license, Software Support, and Farragut's other obligations, if any, under this Agreement will automatically terminate upon the termination of this Agreement. in such an event, Customer's use of the Software must immediately cease and Customer must comply with the provisions of Section 1.3fc). 7.6 urviv 1. Upon termination of this Agreement, all rights and obligations of the parties under this Agreement will automatically terminate except for rights of action accruing prior to termination, paymen# obligations, and any other obligations that expressly or by implication are intended to survive termination including, without limitation Sections 1.3. 3.3, 4, 6, 7.4, 7.5, 7.8. 7.7, 8. 10 and 11. 7.7 Nonexclusive Remedv. Except as otherwise set forth in this Agreement, termination of this Agreement by e'sther party will be a nonexclusive remedy for breach and will be without preyudice to any other right or remedy of such party. Termination of ibis Agreement wilt not relieve Customer of its obligation to pay alt fees and expenses that accrued before such termination. 7.8 Amendment. The terms of this Agreement may only be amended with a written Amendment executed by both Parties. 8. Limitation of Damages. 8.1 Back-Uos: Customer Data. Customer is responsible for assuring and maintaining the backup of all Customer data, software and network systems. UNDER NO CIRCUMSTANCES WILL fARRAGUT BE LIABLE TO CUSTOMER OR ANY THIRD PARTY FOR THE LOSS OF, CORRUPTION OF, OR DAMAGE TO CUSTOMER DATA, SOFTWARE OR NETWORK SYSTEMS 8.2 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY !N THIS AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, FARRAGUT WILL NOT BE LIABLE TO CUSTOMER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) OR FOR LOST DATA SUSTAINED OR INCURRED IN CONNECTION WITH THIS AGREEMENT, THE SOFTWARE, SOFTWARE SUPPORT, OR ANY OTHER SERVICES, EVEN EF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, REGARDLESS OF THE FORM OF ACTION AND WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE. IN ADDITION, FARRAGUT'S TOTAL LIABILITY TO CUSTOMER FOR DIRECT DAMAGES BRIBING OUT OF OR RELATING TO THIS AGREEMENT, THE SOFTWARE, SOFTWARE SUPPORT, OR ANY OTHER SERVICES WILL IN NO EVENT EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CUSTOMER TO FARRAGUT UNDER THIS AGREEMENT DURING THE TWELVE MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT CAUSING SUCH DAMAGES. 8.3 Fiioh Risk Aoofication Disclaimer. Farragut has not tested or certified its Software for use in high-risk applications including, without limitation, medical transport, 911 response, nuclear facilities, weapon systems, mass transit and air transporta#ion control, medical applications, or any other life critical uses or inherently dangereus activities. Customer understands and agrees That Farragut makes no assurances that the Software is suitable for any high-risk uses or inherently dangerous activities. 8.4 Referrals. FARRAGUT IS NOT PROVIDING TO CUSTOMER ANY THIRD PARTY PRODUCTS, SOFTWARE OR SERVICES PURSUANT TO THIS AGREEMENT. Farragut may direct Customer to third parties having products, software or services that may be of interest to Customer for use in conjunction with the Software. Notwithstanding any Farragut -6- recommendaticn, referral or introduction, Customer will independently investigate and test third parry products, software and services and will have sole responsibility for determining suitability for use of third party praducis, software and serolces. FARRAGUT HAS NO LIABILITY FOR CLAIMS RELATING TO OR ARISING FROM USE OF THIRD PARTY PRODUCTS, SOFTWARE OR SERVICES. FARRAGUT 'DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES RELATING TO THIRD PARTY PRODUCTS, SOFTWARE AND SERVICES, INCLUDING BUT NOT LIMITED TO ALL IMPLIED WARRANTIES CONCERNING THE PERFORMANCE, MERCHANTABILITY, SUITABILITY, NON- INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE OF THIRD PARTY PRODUCTS, SOFTWARE AND SERVICES. 9. Infringement Indemnity, 9.1 Indemni . a} Farragut, at its own expense, will defend and indemnify Customer agains# claims that the So#tware infringes a United States patent or copyright, or misappropriates trade secrets, protected under United States law, provided Customer (a} gives Farragut prompt written notice of such claims, (b) permits Farragut to control the defense and settlement of the claims, and (c) provides all reasonable assistance to Farragut in defending or settling the claims. b} Farragut shall operate as an independent contractor for all purposes. The Parties agree to each be solely responsible for their own acts or omissions in the performance of each of their individual duties hereunder, and shall be financially and legally responsible for all liabilities, cos#s, damages, expenses and attorney fees resulting from, or attributable to any and ail of their individual acts or omissions to the extent allowable by law. 9.2 Remedies. As to Software which is subject to a claim of infringement or misappropriation specified in Section 9.1, Farragut may (a) obtain the right of continued use of the Software for Customer or (b) replace or modify the Software to avoid the claim. If neither alternative is available, then, at the request of Farragut, any applicable Software license will terminate, Customer will stop using the Software, and Customer will return to Farragut and/or destroy (including, without limitation, deleting all electronic copies in a manner that cannot be recovered), at Farragut's option, all copies of the applicable Software, and will certify in writing to Farragut that such return and destruction has been completed. Upon Farragut's receipt of such certification, Farragut will give to Customer a credit for the price paid to Farragut, less a reasonable offset for use and obsolescence. 9.3 Exclusions. Farragut will not defend or indemnify Customer, and Farragut will not be liable to Customer, if any claim of infringement or misappropria#lon: (a) results from Customer's design, alteration, modification, maintenance or support of Software, (b) results from the combination, operation or use of any Software supplied hereunder with Customer or third party equipment, devices or software to the extent such a claim would have been avoided if the Software were not used in such combination, (c} relates to any Customer products or services, or third party products or third party services, (d) failure of Customer to use Software Maintenance Releases provided by Farragut to avoid infringement; or (d) arises from Customer-specified customization work undertaken by Farragut or its designees in response to Customer specs#ications. 9.4 EXCLUSIVE REMEDIES. THIS SECTION 9 STATES THE ENTIRE LIABILITY OF FARRAGUT AND CUSTOMER'S SOLE AND EXCLUSIVE REMEDIES FOR INFRINGEMENT AND TRADE SECRET MISAPPROPRIATION. i0. bispute Resolution. 10.1 Disputes and .Demands. The parties agree to attempt to resolve any controversy, claim or dispute ("Dispute") arising out of or relating to this Agreement by means of good faith discussion and negotiation. In the event that a Dispute cannot be resolved a# the project level, #hen designated senior executives of the parties shall meet and enter into further good faith settlement negotiations. If such senior executives cannot resolve the Dispute within thirty (30) days, the parties agree to try in good faith to settle the dispute by mediation administered by a mutually agreed third-party mediator before resorting to arbitration. If the parties do not reach such solution within a period of sixty {60} days after engagement of a mediator, then, upon notice by either party to the other, any Dispute shall be finally settled by binding, arbitration administered by a single arbitrator under the rules of the American Arbitration Association. The venue for any mediation or arbitration shall be -7- in Durham, North Carolina. This Agreement shall be interpreted, construed, and governed by the laws of the Slate of North Carotina, without regard to conflic# of law provisions. 10.2 Time Limit. Neither mediation under #his section nor any legal action, regardless of its form, related to or arising out of this Agreement may be brought more than two (2) years after the cause of action first accrued. 11. General Provlsfons. 11.1 Entire Agreement. This Agreement and the attachments, schedules and exhibits hereto are the entire agreemen# and supersede ail prior negotiations and oral agreements. Farragut has made no representations or warranties with respect to this Agreement, the Software, Software support or any other services that are no# included herein. This Agreement may not be amended or waived except in writing signed by an officer of the party #o be bound thereby. There are no oral agreements between the parties. 11.2 Preprinted Forms. The use of preprinted forms in connection wish this Agreement is for convenience only and all preprinted terms and conditions stated thereon are void and of no effect. If any conflict exists between this Agreement and any terms and conditions on a purchase order, acknowledgment or other preprinted form, the terms and conditions of this Agreement will govern and the conflicting terms and conditions in the purchase order, acknowledgment or preprinted form will be void and of no effect. The terms and conditions of this Agreement, including but not limi#ed to this Section 11.2, cannot be amended, modified or altered by any conflicting preprinted terms or conditions in a preprinted form. 11.3 Interpretation. This Agreement will be construed according to its fair meaning and not for or against either party. Headings are for reference purposes only and are not to be used in construing the Agreement. 11.4 GOVERNING tAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS, UNLESS CUSTOMER IS A GOVERNMENTAL SUBDIVISION OF ANOTHER STATE, IN WHICH CASE 7HE LAWS OF THE STATE IN WH1CH CUSTOMER IS A GOVERNMENTAL SUBDIVISION WILL CONTROL. 11.5 Severability. Whenever possible, each provision of this Agreement will be interpreted to be effective and .valid under applicable law. If any provision is found to be invalid, illegal or unenforceable, then such provision or portion thereof will be modified to the extent necessary to render it legal, valid and enforceable and have the intent and economic effect as close as passible to the invalid, illegal or unenforceable provision. If it is not possible io modify the provision to render it legal, valid and enforceable, then the provision will be severed from the rest of the Agreement and ignored. The invalidity, illegality or unenforceability of any provision will not affect the vaiidify, legality ar enforceability of any other provision of ibis Agreement, which will remain valid and binding. i 1.6 Force Majeure. "Force Majeure" means a delay encountered by a parry in the performance of its obligations under this Agreement which is caused by an event beyond the reasonable control of the party, but does not include any delays in the payment of monies due by either party. Without limiting the generality of the foregoing, "Force Majeure" will include but is not restricted to the #ollowing types of events: acts of God or public enemy; acts of governmental or regulatory authorities (other than, with respect to Customer's performance, Customer and its governing entities); tires, floods, epidemics or serious accidents; unusually severe weather conditions; strikes, lockouts, or other labor disputes. If a Force Majeure occurs, the affected party will not be deemed to have violated its obligations under this Agreement, and time for performance of any obligations of that party wilt be extended by a period of time necessary to overcome the effects of the Force Majeure. 11.7 Compliance wi#h taws. Customer and Farragut shall comply with all federal, state and local laws in the performance ofi this Agreement, including those governing use of the Software. Software provided under this Agreement may be subject to U.S. and other government export control regulations. Customer shall not export or re-export any Software in violation of such export regulations. 11.8 Assignmen#s. Farragut may assign this Agreement or its interest in the -8- Software, or may assign the right to receive payments, without Customer's consent. Customer will be notified in writing if Farragut makes an assignment of this Agreement. Gustomer shall not assign this Agreement without the express written consent of Farragut, such consent not to be unreasonably withheld. In the event of any permitted assignment of this Agreement, the assignee shall assume in writing the liabilities and responsibilities of the assignor. Any attempted assignment in violation of this section will be void. Subject to the foregoing, this Agreement wilt bind and inure to the benefit of the parties, their respective successors and permit#ed assigns. ii.9 Third-Party Rights. The enforcement of the terms and conditions of this Agreement and all rights of action relating to such enforcement will be strictly reserved to Customer and Farragut, and nothing contained in this Agreement wilt give ar allow any claim or right of action whatsoever by any third person. It is the express intent of the parties to this Agreement that any person, other than Customer or Farragut, receiving services or benefits under this Agreement will be deemed an incidental beneficiary only and will not have any rights under this Agreement. 11.10 Independent Contractors. The parties are independent contractors. Neither party will have any right, power or authority to act or create an obligation, express or implied, on behalf of the other party except to the extent, if any, as speci#Ically proyided by this. Agreement. No#hing in this Agreement will be construed to create any partnership, association, joint venture or employment relationship between the parties. 1 i.i 1 Notices. A notice required or permitted to be given under this Agreement by one party to the other. must be in writing, addressed to the parry to wham the notice is given at their address set forth on the Signature Page, and shall be given by: (i) actual delivery, in which case the notice will be deemed given upon delivery, or (ii) deposit in the United Stales Mail, postage prepaid, by registered or cer#ified matt with return receipt requested, in which case the notice will be deemed given on the fifth business day following such deposit. Each party may change its address for notice by giving written notice of the change to the other party. 11.12 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together wilt constitute one and the same instrument. 12. 17eflnltlons. "Anniversary Date" means each anniversary of the Effective Date of this Agreement. " muter" means the single computer unit, regardless of platform or operating environment, on which Customer loads the Software covered by this Agreement. "Confidential Information" means the Software, Documentation, designs and configurations of the Software, trade secrets and related documentation, and all other in#ormation confidential to Farragut or its suppliers or licensors. "Delivery Date" means the date the Software is delivered or made available to Customer (including by making the Software available for download}. "Documentation' means all user documen#ation relating to the Software provided or made available to Customer by Farragut, whether as hard copy or as electronic copy, including but not limited to operating manuals, user documentation, environmental specifications and other documentation. "Key Operator" means an employee of Customer who has been trained in the proper use of the Software and has been designated by Customer as their Key Operator. The initial Key Operator(s) are iden#ified in Schedule 13 of this Agreement. "Software" means the software code and associated support files of the Software described on Schedule A and its Documentation., including all Software Maintenance Releases, and other modifications, including custom modifications created by Farragut, if any, to such computer programs and code, and ail copies of the foregoing, delivered to Customer hereunder. "Warranty Period" means the 90 day period beginning with the Delivery Date. -9- .SCHEDULE A SOFTWARE DESCRIPTION, LICENSE LOCATION, AND FEES QUANTITY: SOFTWARE Dt;SCRIPTION: INITIAL LICENSE FEE: ANNUAL SUPPORT FEE One Farragut ListSync $15,000 $3,000 One fourth a# the license feels} of $3,750 is due at signing and the balance of $11,250 is upon final acceptance. The support feels} of $3,000 is due upon Final acceptance. Licensed Location: 228 S Churton St., Hillsborough, NC 27278. Support service will begin as of the date the Software is in production use by the Customer. -10- SCHEDULE B SOFTWARE SUPPORT This Schedule further describes Farragut`s Software Support as referenced in the Software Ucense and Support Agreement (the "Agreerent"}, by and between Farragut and Customer. Unless otherwise specified, terms defined in the Agreement riuill apply to this Schedule. (n consideration for the Annual Support Fee paid by Customer, Farragut will use commercially reasonable efforts to provide the Software Support set forth herein below for the Software licensed by Farragut to Customer. Farragut may, where appropriate, prorate the Annual Support Fees so that Annual Support Fees for all Software is renewable on the same date, even 'rf all Software was not ordered at the same time. Contact Informs#ion. The following contact information is to be used by Customer for submitting Software Support requests, as welt as any other Software support requests, to Farragut: Customer Support Center; 9i 9-599-6003 Customer Support Center Fax: 919-572-0783 e-mail address: support@farragut.com Farragut Sys#ems, Inc. Switchboard: 919-572-0901 The following contact information is to be used by Farragut far contacting Customer on Software Support requests, as well as any other Software support requests: Primary Customer Contact Point ("CCP"): First Alternate CCP: Customer Key Operator(s): Customer or Farragut may change their respective Support Con#act Information by providing notice of such change to the other party by email, fax or pursuant to the notice provisions in Section 11.11 of the Agreement. 1.1 Customer Support Center. The Customer Support Center (CSC) is the primary point of Customer contact far ail support', CSC consultants will provide responses to support requests received from a Customer CCP. i .2 Methods for cor#tacfina the CSC. Email -Customer contacts the CSC by email at support@farragut.com. When an issue is communicated via email, the CSC will log the ticket and return an email to the email recipien# designbted in the account along with the issue tracking number. Customers may provide contact email addresses that route to an email distribution list established and managed by Customer. Tetephone -Customer contacts the CSC by phone at 919-599-6003. When an issue is reported by phone, the CSC staff will open a new ticket and the ticket number will be verbally communicated 1!o the person calling. For calls received outside of the CSC operation hours, Customer may leave a voice message stating the issue and contact information. CSC staff will check the voicemail message and contact Customer the following business. All telephone calls concerning support requests must be made by calling the regular CSC telephone numtaer and must be followed by a written request. -~t- 1.3 CSC Hours of 'Operation. Normal operating hours for the CSC are 8:00 AM to 4:00 PM Mountain Time, Monday through Friday, except for Farragut company holidays. 2. Correction of Software Defects _Errors or Malfunction 2.1 mineral Descrption. So#tware Support will include Farragut's commercially reasonable efforts to provide a solution or siuitable work-around for de#ects, errors or malfunctions in the Software that prevent the Software from performing, during normal and proper use, substantially as described in the specifications set forth in the then-current Documentation accompanying the Software, when properly instalEed on the Customer's Cotnpuier. Software Support will not include or cover any defects, errors or malfunctions in the Software that are caused by any external causes, including, but not limited to, any of the Exclusions from Warranty and Support Coverage described in Section 3.2 of the Agreement. Software Support also will not include or cover modifications made to the Software by anyone other than Farragut staff. Because not all defects, errors or malfunctions can or need to be corrected, it is possible that not ail defects, errors or malfunctions will be corrected. 2.2 Support Reauests. All support requests must be made in accordance with Farragut's standard support procedures atad accompanied with sufficient detail to enable Farragut to verify the error and provide a solution or suitable work-around. All telephone calls concerning support requests must be made by calling the regular CSC telephone number and must be followed by a written request. Farragut is not responsible for responding to support requests placed by a person other than the Customer CCP's. Farragut is not responsible for support caps from Customer placed to a Farragut telephone number other than the established CSC telephone number or for written requests that are not made to Farragut's GSC. 2.3 Support Process for Reported Issues. After receiving a written report of a Software error from a Customer CCP, Farragut will commence its efforts to resolve the reported Software error by: {a) Answering the Key Operator's or Customer CCP's questions and diagnosing the Software error during Farragut's normal service hours by telephone, by a-mail and/or through Farragut Web Support, or; (b) Troubleshooting, diagnosing and providing a solution or suitable work-around during Farragut's normal service hours; or (c) If Farragut determines in its discretion that !t is necessary or appropriate to efficiently and promptly resolve any reported software error on-site, Farragut may provide service at Customer's sife during regular business hours. Farragut reserves the right to charge for on-site service as provided for in Section 2.5(cl of this Schedule; or (d) If Farragut determines the reported issue is related to a defec# in the Software, Farragut will determine its Severity Level (as defined below) and take the appropriate level of action pursuant to the terms below. The resolution of aA defects is addressed through Software Maintenance Releases. (e) Timely commencement. If Customer reports any suspected Software error that causes the Software to be inoperative or significantly impairs its functionality, Farragut will begin the froubfeshooting and diagnosis of the problem within one business day after Farragut receives the written report. For other reported problems, Farragut will begin the troubleshooting and diagnosis as promptly as is reasonably practical. 2.4 Software Maintenance Releases. "Softwgre Maintenance Release" means all .error corrections, bug fixes and minor modifications to the Software and Documentation, as developed by Farragut and made generally auailabte without a separate charge to licensees of the Software who have -i2- purchased Software Support for such Software, and are indicated by a change in the numeric identifier to the Software in the digit to the right of the decimal point. Software Support will include standard periedic Software Maintenance Releases, if any, that are provided by Farragut from time to time. If Farragut determines, at its awn discretion, that a reported Software defect requires a programmatic change fo the Software, Farragut shall provide the Software correction in the form of a Software Maintenance Refiease- Customerpromptly will install alt Software Maintenance Releases provided by Farragut. Software Support will also include reasonable assistance, upon request, during Farragut's normal business hours by #efephone, a-mail, web, or Farragut's CSC for the installation of any new Software Maintenance Releases for the Software. On-site installation of Software Maintenance Releases and any Customer staff training specific to those Software Maintenance Releases are not included under Software Support. !f Customer requires on-site installation of Software Maintenance Releases by a Farragut technician, those services must be requested in writing in advance to Farragut by Customer. Any such services wilt be invoiced to Customer by Farragut on a timd and materiats basis, plus reasonable and aclual expenses. Modifications to the Software by anyone, other than Farragut staff may render the Software Maintenance Releases incompatible with the Software. 2.5 Services Not 1r)cluded. Software Support does not include: (aj Software Installation Implementation and Trainin4 Services. Farragut wiii not provide Software installation, implementation or training services pursuant to ibis Agreement. Farragut may provide these services io Customer by separate written agreement specifying the terms and conditions of installation, implementaticn and/or training services and reiafed fees and cf:arges. {b) Custom Programming Services. Custom programming services are not included In Software Support. Farragut may provide custom programming services to Customer by separate written agreameni between Farragut and Customer specifying fhe custom programming services and related fees and charges. Custom programming services could include development of custom computer programs, custom programming related to the Software, and installation, training and maintenance with respect io such custom computer programs and custom programming. (c} On-Biqa Support. On-site support is not Included in Software Support. At Farragut's discretion as provided in Section 2.3(c) of this Schedule or upon receipt of a written request from Customer, Farragut wilt provide Customer on-site support at a mutually agreed upon time. Customer agrees to pay Farragut for on-site support on a time and materials basis at Farragut's then prevailing rates, plus expenses (including but not limited to travel, lodging and miscellaneous expenses}, and for replacements at Farragut's list prices, unless otherwise agreed in writing by Farragut and Customer. (d) Hardvyare. Third-Party Software and Related Supplies. Farragut will not provide any hardware, third party software or related supplies pursuant to this Agreement. Farragut may provide hardware, third-party software and related supplies to Customer by separate written agreement between Farragut and Customer specifying the terms and related fees and. charges. (e) Customer Infrastructure Defects. Trouble-shooting, diagnosing or otherwise identifying defects that are a result of Customer's hardware and/or software systems (°C~u tourer Infrastructure") that the Software has been installed on for operation era not covered by Software Support. Any defect that is reported against the Software and which is subsequently determined by Farragut to be caused by Customer lnfras#ruciure shall be the responsibility of Customer and any time extended by Farragut to trouble-shoot, diagnose ar otherwise identify the cause of said defect shalt be chargeable to Customer at Farragut's prevailing rates prevailing rates, plus expenses (including but not limited to travel, lodging and miscellaneous expenses), and for replacements at Farragut's fist prices, unless otherwise agreed in writing by Farragut and Customer. Customer agrees to waive the requirement for prior written approval in the case of a Customer Infrastructure defect. (f) Other Support Services. If Farragut, in ifs discretion, provides other support, in addition to the Software Support described under this Schedule, Customer will pay Farragut for the services on a time and materials basis at Farragut's than prevailing rates, .plus expenses, and for' t3- replacements at Farragut's list prices, unless otherwise agreed in writing by Farragut and Customer. At Customer's request, Farragut will provide to Customer a written schedule of Farragut's then prevailing rates and list prices. Before undertaking such work, Farragut will notify Customer if there will be any additional charges for support services. 3. CSC Resr~onse Goals. 3.1 Upan receipt of a support request from Customer, a CSC consultant wilt review the information and assign a sevedty for urgency of response according to the following list: 1 Major critical functionality is not operating. 2 Non-critical but major functionality ' is inoperative. _ 3 y Sys#em feature is malfunctioning or inoperative. 4 ~ Cosmetic in nature. 3.2 A CSC consultant will communicate to Customer a Response based upon the severity of the problem. "Response" is defir7ed as a communication with Customer of the status of problem, analysis or potential remedies, or workarounds. The Response goats for a support request received during normal working hours are shown in the f©Ilowing cable: 1 Within 1 business hour 2 Within 1 business day 3 ~ Within 2 business days 4 Will determine if it should be included in a future maintenance release. 3.4 CSC Reques# Escalation. (a) Upon receipt of a Severity 1 support request, the CSC manager will be notified to ensure tha# appropriate Farragut resources are focused on returning the affec#ed system to operation as soon as possible. (b) Cus#omer will be notified of the curren# status and projected closure target on each unresolved support request, which will be tracked and reported until resolved. 3.5 Remote Diagno~ttcs. The CSC consultant, subject matter expert, accounf manager, or other Customer support personnel may utilize remote access capability to assist with system diagnosis and/or corrective action. Customer direct participation may or may not be required during remote access operations. However, in either case, all use of remote access capability will be coordinated with Customer in advance. 4. Customer Res nno sibilities. 4.i Systems Oper~iion. Customer retains responsibili#y for the day-today management of the system and Software, including tine backup system. 4.2 Customer CCP who will serve as the primary interface between Farragut's support team and Customer. The responsibilities of the Customer CCt' include the following: -14- (i} Provide Customer contact information and inform Farragut of any changes before they occur. (ii) Insure basic troubteshaoiing and a complete analysis of system problems using internal Customer resources prior to referring a problem to Farragut. (iii) Before subtnitiing a support request to the CSC, gather and record the information needed to document request. (iv) Contact the,CSC and provide the support request information and any amplifying data #o the CSC consultant. {v} Coordinate Customer activities required to assist the CSC in resolving the problem. (vi) Serve as a liaison and primary point of Customer contact for the account manager. (vii) Submit change request and provide them to the account manager to initiate system or software modiiicatlons. {viii} Insure a PWrchase Order (PO) or other suitable form of Customer financial obligation authorization is generated and approved prior to requesting additional support not speciticalty included in the Agreement. 4.3 System Access, Security, and Sof#ware Licenses. {i} Throughout the term of Software Support, Farragut requires continuous remote access io all of Customer's Computers for the purpose of providing Software Support. Such access is typically handled by VPN access provided by Customer. Customer will ensur that appropriate' primary and alternate means are available for Farragut support personnel to gain remote access io Customer's system (when appropriately coordinated with Cus#omer) far the purpose of providing Software Support. (ii) Customer will maintain system passwords and will notify Farragut, prior io implementation, of any changes that may affect Farragut's ability to provide support under the Agreement. (iii) Customer will maintain a record of all user workstations running any portion of the licensed Software, if any, (including any associated Internet applications). Customer will provide this information to Farragut upon request and will advise Farragut of any changes in the system that a#fect the currency of this information. 5. Upon the release of a new Software Maintenance Release, the Software Support for the current Software release will terminate in two years from the release date of the new Software Maintenance Release. -15-