MASTER SERVICES AGREEMENT
This Master Services Agreement (the “Agreement”) is entered into as of the date first set forth on the signature page hereto (the “Effective Date”) by and between Verity IT, LLC, an Illinois limited liability company (“Verity IT”) and that certain counterparty set forth on the signature page hereto (“Client”).
WHEREAS, Verity IT is in the business of providing managed information technology (“IT”) services, including, without limitation, cybersecurity services, IT advisory services, cloud services and solution services (the “Managed IT Services”), and Client desires to engage Verity IT to provide such Services and Verity IT desires to be so engaged.
THEREFORE, in consideration of the mutual agreements below, and intending to be legally bound, the parties agree:
1.1 Services under Statement(s) of Work. Client is engaging Verity IT to provide the Managed IT Services as described in the relevant, duly executed statements of work, which shall be incorporated herein and made part of this this Agreement (hereinafter, “SOWs”). In addition to the Managed IT Services, upon agreement of the parties, Verity IT may provide professional services, including, without limitation, design and configuration services (the “Additional Services,” and together with the Managed IT Services sometimes referred to as the “Services”). Verity IT will provide only those Additional Services enumerated on one or more SOWs. Neither party will have any obligation with respect to any draft SOW unless and until it is executed by both parties. Except as otherwise provided herein, if any of the terms or conditions of this Agreement conflict with any of the terms or conditions of any SOW, the terms or conditions of such SOW will control solely with respect to the Managed IT Services or Additional Services (if any) covered under such SOW. Verity IT may, in its sole and absolute discretion, use subcontractors or any other third party to perform any Services or process Client’s Confidential Information and/or Client Data. Verity IT shall remain responsible for the performance of any services performed by a subcontractor and Verity IT’s obligations hereunder.
1.2 Excusable Non-Performance. Verity IT may, in its sole and absolute discretion, decline provision of any Services to Client and to immediately suspend, without notice, any Services in process and applicable products to Client in the event (i) Client is in violation of the SOW and/or Agreement (ii) Client poses a threat to the security or operation of the Managed IT Services or Verity IT; (iii) Client exposes Verity IT to potential damages; (iv) Verity IT, in good faith, believes such action would be illegal, immoral or unethical or (v) Verity IT determines, in its sole discretion, such action may violate any policy or agreement of an internet service provider or any other third party vendor with whom Verity IT has a contractual relationship.
2. Client’s Responsibilities
2.1 Responsibility for Client’s IT Systems. Client is and will remain during the term of this Agreement the owner of Client Content and/or Client’s IT Systems (as each is defined below) and all of the data contained or processed by Client’s IT Systems (collectively, “Client Data”). Client is responsible for all Client Data, and unless and until Verity IT provides any Additional Services related thereto, Client is responsible for the design and configuration of Client’s IT Systems, including, without limitation, any existing vulnerabilities, regardless of whether such vulnerabilities have been communicated to, or are known by, Verity IT. Client shall not provide Client Content or Client Data that is obscene, offensive, inappropriate or that violates any applicable law or regulation, contract, or privacy or other third party right, or that otherwise exposes Verity IT and/or its licensors or its resellers to civil or criminal liability. For the purposes of this Agreement, “IT Systems” shall mean Client’s electronic data processing, information, recordkeeping, communications and other computer systems (including all computer programs, software, databases, firmware, hardware and related documentation) and Internet website(s) (“Client’s Websites”), and “Client Content” shall mean all content on Client’s Websites and any elements of text, graphics, images, photos, designs, artwork, logos, video, trademarks, service marks, data, software and other materials and/or content which Client provides in connection with any Services, but specifically excluding any content available in the public domain and any content owned or licensed by Verity IT, whether in connection with providing any Services or otherwise.
2.2 Cooperation. At all times during the term, Client shall promptly and fully cooperate with Verity IT, and shall promptly make competent, qualified personnel available to assist and answer questions of Verity IT, as necessary and appropriate and as reasonably requested by Verity IT. Client shall provide Verity IT with reasonable access to Client’s IT Systems. Further, Client shall promptly notify Verity IT of any updates, modifications or other changes to Client’s IT Systems or its users (including changes to Client’s personnel or any personnel’s access rights). Verity IT shall bear no liability or otherwise be responsible for delays in the provision of any Services or any portion thereof caused by Client’s failure to timely provide such information or notification of any updates or changes to Client’s IT Systems or number of users.
2.3 Equipment. Except as expressly set forth in any SOW, Verity IT has not provided an estimate for the selection or procurement of any hardware or equipment, operating system software, database software, or other third party software, connectivity, data transport, or other intellectual property rights required to perform any Services or to support Client’s IT Systems (collectively, the “Third Party Products/Services”). Client is solely responsible for the selection, procurement, costs, and expenses of acquiring the same, and any other infrastructure required to support Client’s IT Systems and Client’s use of any Services. Any Third Party Products/Services are subject to their availability and procurement upon commercially reasonable terms. Verity IT shall not be responsible or liable for any Third Party Products/Services, including in the event that such are unavailable or interrupted, and shall not be obligated to procure any replacement of the same. In addition to paying for such Third Party Products/Services, Client shall be responsible for: (a) verifying that such software (including any software-as-a-service) is properly licensed and available for (i) Client’s use and (ii) storage by Verity IT, and (b) monitoring Client’s equipment for the installation of unlicensed software. For any equipment that Client provides in connection with any Services, Client shall provide: (x) equipment that is compatible with any equipment utilized by Verity IT in providing the applicable Services, (y) a suitable working environment for any such equipment, and (z) sufficient access to such equipment (including the premises where such equipment is stored) for Verity IT and its personnel.
3.1 Fees. Client will pay Verity IT the following (collectively, the “Fees and Expenses”):
(a) Client shall pay Verity IT for the Managed IT Services and any Additional Services in accordance with the fees established in the relevant SOW.
(b) Client shall reimburse Verity IT for actual expenses incurred by Verity IT in performing the Managed IT Services and the Additional Services (if any).
(c) All other fees charged by third parties for Third Party Products/Services, including, without limitation, cloud computing services, Internet service providers, domain name registrars, licensing fees and other similar fees, will be due at the time any such Third Party Products/Services are ordered. For the avoidance of doubt, Client shall, immediately upon the incurrence thereof, pay Verity IT the full amount of any fees, penalties or other costs incurred as a result of, or associated with, any change, reduction or cancellation of any Third Party Products/Services, including, without limitation: (a) any fee or penalty charged due to a reduction in the quantity of licenses utilized in connection with any Third Party Products/Services; (b) any fee or penalty charged, or acceleration of future fees, due to a cancellation of any Third Party Products/Services subscription; and (c) any fee or penalty charged in connection with changing or downgrading any Third Party Products/Services.
3.2 Payment Terms. Fees and Expenses will be periodically invoiced by Verity IT, with payment due from Client within seven days of receipt, unless otherwise set forth in an SOW. Client shall be deemed to have received such invoice in accordance with Section 14, based on Verity IT’s delivery method. Invoices submitted by Verity IT to Client are deemed accepted and approved unless disputed by Client in accordance with Section 3.4 below. Client’s failure to pay any invoice when due shall be deemed a breach of this Agreement. Client agrees to pay a late charge of 3% per month or the maximum lawful rate, whichever is less, for all amounts not paid within 60 days of the date of invoice. Client shall be responsible for any costs incurred by Verity IT in exercising any of its rights under this Agreement or applicable law with respect to Client’s payment default, including reasonable attorneys’ fees and the fees of any collection agency retained by Verity IT. Verity IT may deny or cease performing any Services while any amount remains more than seven days past due. Charges for any ongoing Services, as well as any charges for Third Party Products/Services, will continue to accrue and be invoiced during any such period. Fees and Expenses paid via credit card may be subject to a processing fee equal to 3%.
3.3 Taxes. Amounts payable by Client are exclusive of local, state, or federal sales, use, value-added, or other taxes or tariffs of the United States of America or other countries based on the licenses or services provided under this Agreement or Client’s use thereof. Client shall pay all such taxes or tariffs as may be imposed upon Verity IT or Client, except income taxes imposed on Verity IT by the United States of America or any state or local government therein. Client shall be invoiced for, and shall pay, any such taxes and tariffs if Verity IT is required to pay them on Client’s behalf.
3.4 Disputes. Client may, in good faith, withhold any payment of disputed charges by providing prior notice to Verity IT detailing the basis of, and support for, such dispute, which specifies the amount in dispute. Client shall pay any undisputed amounts in accordance with Section 3.2. The parties shall work together to resolve any such dispute in an expedited manner in accordance with the dispute resolution provisions set forth herein. Any invoice or charge not disputed within 30 days after receipt thereof shall be deemed to be accepted by Client, and Client shall waive any dispute right with respect to such invoice or charge.
4. Term; Termination
4.1 Term. This Agreement shall commence on the Effective Date and will continue until terminated in accordance with the terms and conditions contained herein.
4.2 SOWs. The Managed IT Services or the Additional Services, as applicable, will commence on the date set forth in an SOW and continue thereafter as set forth in such SOW, unless otherwise terminated earlier in accordance with the terms and conditions of such SOW or this Agreement.
4.3 Termination for Breach. If a party materially breaches this Agreement and/or any SOW (the “Defaulting Party”), and the Defaulting Party does not cure such breach within 30 days after its receipt of written notice of material breach, the non-defaulting party may terminate this Agreement and/or the relevant SOW upon written notice to the Defaulting Party. Termination of an SOW and/or this Agreement will be without prejudice to any other rights and remedies that the non-defaulting party may have under this Agreement or at law or in equity.
4.4 Effect of Termination. Termination of this Agreement by either party shall not limit either party from pursuing any other remedies available to it, including injunctive relief, nor shall such termination release Client from any obligation to pay all outstanding fees, charges and expenses incurred through the effective date of termination. Upon any termination, Client’s right to any Managed IT Services or Additional Services shall immediately cease. Any provision of this Agreement which, by its nature, would survive termination of this Agreement will survive any such termination on of this Agreement.
4.5 Post-Termination Transition Services. Upon termination, at Client’s request, which shall be made no more than 15 days after termination, Verity IT will: (a) store Client’s data (in the then-current, standard format) on a data medium prior to deletion for a period to be agreed to by the parties in writing, but that in no event will be longer than 60 days after the effective date of such termination, provided that Client pays in full all fees and charges due to Verity IT as of the effective date of such termination by Verity IT and pays monthly data storage fees to Verity IT for its retention of such data, pursuant to Verity IT’s standard rates for such data storage in effect at the time, or if such standard rates are not in effect, such reasonable prevailing industry rates as may be agreed to by the parties in writing; and (b) at Client’s expense pursuant to Verity IT’s standard rates in effect at the time, or if such standard rates are not in effect, such reasonable prevailing industry rates as may be agreed to by the parties in writing, immediately upon the conclusion of such retention period, return such data to Client’s IT Systems, taking all steps required or reasonably requested to make an orderly transition of the services similar to those services being provided by Verity IT at the time of termination to the Client’s IT Systems and to assist Client and any of Client’s designees in migrating such data to the Client’s IT Systems in both Verity IT’s data format and a platform-agnostic format. The relevant expenses (in particular, the data storage and preparation costs and dispatch of the data medium) must be discussed and agreed upon by the parties in advance and will be charged separately to Client by Verity IT.
5.1 Confidential Information. In the course of the Agreement, either party (“Disclosing Party”) may provide, or provide access to, certain of its Confidential Information to the other party (“Receiving Party”). For purposes of this Agreement, “Confidential Information” shall mean written, confidential and proprietary information of a Disclosing Party that is not available in the public domain, including, without limitation, (i) all information related to the Disclosing Party’s business, whether in oral, written, graphic or machine-readable form; (ii) all notes, analyses and studies prepared by the Receiving Party incorporating any of the information described in this Section 5, and (iii) the terms and conditions of this Agreement. All Disclosing Party Confidential Information shall remain the property of the Disclosing Party. For purposes of the Agreement, software, documentation, other materials or tools used by Verity IT in the performance of its obligations hereunder, including all Verity IT IP (as defined in Section 6.1) shall be considered Verity IT’s Confidential Information. Confidential Information shall not include information that (i) is obtained by the Receiving Party from the public domain without breach of this Agreement and independently of the Receiving Party’s knowledge of any Confidential Information; (ii) was lawfully and demonstrably in the possession of the Receiving Party prior to its receipt from the Disclosing Party; (iii) is independently developed by the Receiving Party without use of or reference to the Disclosing Party’s Confidential Information; or (iv) becomes known by the Receiving Party from a third party independently of the Receiving Party’s knowledge of the Confidential Information and is not subject to an obligation of confidentiality.
5.2 Obligations. The Receiving Party will keep the Confidential Information confidential, and may disclose the Confidential Information to its officers, directors, employees, agents and subcontractors (and their employees) (“Representatives”) who have a need to know such Confidential Information solely in connection with this Agreement. The Receiving Party will cause such Representatives to comply with this Agreement and will assume full responsibility for any failure to comply with the terms of this Agreement. The Receiving Party will not transfer or disclose any Confidential Information to any third party without the Disclosing Party’s prior written permission and without such third party having a contractual obligation (consistent with this Section 5) to keep such Confidential Information confidential. The Receiving Party will not use any Confidential Information for any purpose other than to perform its obligations under this Agreement. In the event that the Receiving Party learns or has reason to believe that Confidential Information has been disclosed or accessed by an unauthorized party, the Receiving Party will immediately give notice of such event to the Disclosing Party.
5.3 Legal Requirements. If the Receiving Party is requested or required to disclose any of the Disclosing Party’s Confidential Information under a subpoena, court order, statute, law, rule, regulation or other similar requirement (a “Legal Requirement”), the Receiving Party will, if lawfully permitted to do so, provide prompt notice of such Legal Requirement to the Disclosing Party so that the Disclosing Party may seek an appropriate protective order or other appropriate remedy or waive compliance with the provisions of this Agreement. If the Disclosing Party is not successful in obtaining a protective order or other appropriate remedy and the Receiving Party is legally compelled to disclose such Confidential Information, or if the Disclosing Party waives compliance with the provisions of this Agreement in writing, the Receiving Party may disclose, without liability hereunder, such Confidential Information solely to the extent necessary to comply with the Legal Requirement.
5.4 Disposition. Upon termination of this Agreement or upon the Disclosing Party’s written request, the Receiving Party will return to the Disclosing Party all copies of Confidential Information already in the Receiving Party’s possession or within its control. Alternatively, with Disclosing Party’s prior written consent, the Receiving Party may destroy such Confidential Information; provided that the Confidential Information is (i) destroyed in accordance with applicable law, rule or regulation and (ii) is rendered unreadable, undecipherable and otherwise incapable of reconstruction, in which case an officer of the Receiving Party will certify in writing to the Disclosing Party that all such Confidential Information has been so destroyed.
6. Intellectual Property
6.1 Ownership. The parties acknowledge and agree that all works, materials, software, documentation, methods, apparatus, systems and the like prepared, developed, conceived, or delivered as part of or in connection with any Services, and all tangible embodiments thereof, shall be considered “Work Product.” The parties further acknowledge and agree that Verity IT may use Pre-Existing Materials (as defined below) and that Verity IT may also create additional intellectual property in the form of Work Product in the performance of its obligations hereunder (all of the foregoing, the “Verity IT IP”). Client agrees that any and all proprietary rights to the Verity IT IP, as it existed as of the date hereof and as it may be modified or created in the course of this Agreement, including patent, copyright, trademark, and trade secret rights, to the extent they are available, are the sole and exclusive property of Verity IT, free from any claim or retention of rights thereto on the part of Client, and Client hereby assigns to Verity IT any rights it may have in any of the foregoing. For the purposes of this Agreement, “Pre-Existing Materials” means, in any form or media, any software (in source code or object code format) libraries, tools, products, algorithms, subroutines, applets, know-how, ideas, derivative works, techniques, materials, architecture, methodologies, concepts, trade secrets and other proprietary information, any other pre-existing materials, and records or documentation of each of the foregoing, that were owned or licensed by Verity IT independent of or prior to entering into the applicable SOW or developed independently of the SOW.
6.2 License. Verity IT hereby grants, subject to Verity IT’s receipt of full payment under each applicable SOW, to Client a non-exclusive, non-transferrable, revocable, and limited license in and to the Verity IT IP solely, and only to the extent necessary, to use in conjunction with the Managed IT Services or Additional Services (if any), as applicable.
6.3 Restrictions on use of Pre-Existing Materials and/or Work Product. Client shall have only those rights in and to the Verity IT IP as are expressly granted to it pursuant to this Agreement. Client shall not copy, use, modify, or distribute any Verity IT IP except as expressly licensed in this Agreement. Client shall not cause or permit the modification, distribution, reverse engineering, decompilation, disassembly or other translation of the Verity IT IP. Client shall not alter, change, or remove from the Verity IT IP any identification, including copyright and trademark notices, and further agrees to place all such markings on any copies thereof. No right is granted to Client to tape or permit the taping of any training program or engagement related to Pre-Existing Materials and/or Work Product and, except as otherwise set forth in a SOW, Client shall not provide any training with respect to the Pre-Existing Materials and/or Work Product without the prior written consent of Verity IT.
6.4 Client Content. Client hereby grants Verity IT a worldwide, non-exclusive right and license to reproduce, distribute and display the Client Data solely as necessary to provide the Services. Client and its licensors retain title, all ownership rights, and all other intellectual property rights, in and to the Client Data, and reserve all rights not expressly granted to Verity IT hereunder.
7. Representations & Warranties
7.1 Joint Representations. Each party represents and warrants that it (i) is a duly organized, validly existing and in good standing under the laws of the State of organization; (ii) has the power and authority to enter into this Agreement and (iii) has full authority and sufficient rights to grant and convey the rights granted to the other party under this Agreement.
7.2 Verity IT Representations. Verity IT warrants that the Managed IT Services and Additional Services (if any) will performed in a good and workmanlike manner in accordance with applicable industry standards and practices.
7.3 Client Representations. Client represents and warrants to Verity IT that (a) all Client Data is owned by Client, (b) Client has all rights necessary for Verity IT to use the Client Data in connection with its performance under this Agreement, (c) the Client Content and the Client’s IT Systems do not infringe upon or violate any copyright, patent, trade secret, trademark or property rights of any third party, (d) that the Client Content and the Client’s IT Systems are and will at all times be in compliance with all applicable federal, state and local laws and regulations, and (e) the Client Content and the Client’s IT Systems do not and will not contain any Destructive Elements. If Client breaches this subsection, Client shall use reasonable and continuous efforts (at Client’s sole expense) to eliminate any and all Destructive Elements. For the purposes of this Agreement, “Destructive Elements” means computer code, programs or programming devices that are intentionally designed to disrupt, modify, access, delete, damage, deactivate, disable, harm or otherwise impede in any manner, including aesthetic disruptions or distortions, the operation of the Managed IT Services or the Additional Services (if any) or any other associated software, firmware, hardware, computer system or network (including without limitation “Trojan horses,” “viruses,” “worms,” “time bombs,” “time locks,” “devices,” “traps,” “access codes,” or “drop dead” or “trap door” devices) or any other harmful, malicious or hidden procedures, routines or mechanisms that would cause services to cease functioning or to damage or corrupt data, storage media, programs, equipment or communications, or otherwise interfere with operations.
7.4 Risks Inherent to the Internet. CLIENT ACKNOWLEDGES (A) THAT THE INTERNET IS A WORLDWIDE NETWORK OF COMPUTERS, (B) THAT COMMUNICATION ON THE INTERNET MAY NOT BE SECURE, (C) THAT THE INTERNET IS BEYOND THE CONTROL OF VERITY IT, AND (D) THAT VERITY IT DOES NOT OWN, OPERATE OR MANAGE THE INTERNET. CLIENT ALSO ACKNOWLEDGES THAT THERE ARE INHERENT RISKS ASSOCIATED WITH HOSTING THE CLIENT’S IT SYSTEMS AND THE CLIENT CONTENT THROUGH THE INTERNET, INCLUDING, WITHOUT LIMITATION, THE RISK OF LOSS OF DATA, THE RISK OF BREACH OF SECURITY, THE RISK OF EXPOSURE TO COMPUTER VIRUSES AND THE RISK OF INTERCEPTION, DISTORTION, OR LOSS OF COMMUNICATIONS. CLIENT ASSUMES THESE RISKS KNOWINGLY AND VOLUNTARILY AND INDEMNIFIES AND HOLDS VERITY IT HARMLESS FROM ALL LIABILITY FROM ALL SUCH RISKS.
7.5 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES AND ANY MATERIALS OR PRODUCTS USED IN THE PROVISION OF SUCH SERVICES (COLLECTIVELY, “VERITY IT MATERIALS”) ARE PROVIDED STRICTLY “AS IS,” AND VERITY IT MAKES NO WARRANTIES, EXPRESS, IMPLIED, ARISING FROM COURSE OF DEALING OR USAGE OF TRADE, OR STATUTORY, AS TO THE VERITY IT MATERIALS PROVIDED HEREUNDER, OR ANY MATTER WHATSOEVER. IN PARTICULAR, ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT ARE HEREBY DISCLAIMED BY VERITY IT AND ARE EXCLUDED BY THE PARTIES. VERITY IT AND/OR ITS LICENSOR DOES NOT REPRESENT AND/OR WARRANT THAT (I) ANY SERVICES OR PRODUCTS WILL BE UNINTERRUPTED AND/OR ERROR-FREE, (II) THE CLIENT DATA WILL NOT BE LOST OR CORRUPTED IN CONNECTION WITH THE PERFORMANCE OF ANY SERVICES, AND/OR (III) ANY SERVICES, PRODUCTS AND EQUIPMENT ARE THE MOST ADVANCED, AVAILABLE, AND/OR WILL REMAIN ‘CURRENT’ FOR ANY PERIOD OF TIME.
7.6 Exclusive Remedy. Client’s sole and exclusive remedy and Verity IT’s sole and exclusive liability for any breach of the warranty set forth in Section 7.2 shall be for Verity IT to re-perform the Managed IT Services or Additional Services (if any), as applicable, at no cost to Client. This sole and exclusive remedy is available only if Verity IT is promptly notified in writing within 30 days after the performance of such Managed IT Services or Additional Services (if any) that do not conform to the warranty set forth in Section 7.2. For avoidance of doubt, this Section shall not be deemed to limit either party’s rights or remedies under any other Section of this Agreement.
8. Limitation of Liability
VERITY IT’S TOTAL AND CUMULATIVE LIABILITY FOR DIRECT DAMAGES ARISING OUT OF AND/OR IN CONNECTION WITH THIS AGREEMENT AND/OR ANY SOW SHALL IN NO EVENT EXCEED THE FEES PAID BY CLIENT TO VERITY IT UNDER THE APPLICABLE SOW THAT GAVE RISE TO SUCH CLAIM. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND/OR ANY SOW, IN NO EVENT WILL VERITY IT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL AND/OR PUNITIVE DAMAGES (INCLUDING WITHOUT LIMITATION LOST PROFITS) EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NO LIMITATION OR EXCLUSION OF EITHER PARTY’S LIABILITY WILL APPLY WITH RESPECT TO ANY CLAIMS ARISING OUT OF OR RELATING TO SECTION 5, SECTION 6 AND SECTION 9 OF THIS AGREEMENT AND/OR ITS WILLFUL MISCONDUCT AND/OR GROSS NEGLIGENCE. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND/OR ANY SOW, THE EXCLUSIONS AND LIMITS STATED IN THIS AGREEMENT DO NOT APPLY TO ANY OF CLIENT’S OBLIGATIONS TO PAY FEES AND COSTS TO VERITY IT UNDER THIS AGREEMENT AND/OR ANY SOW.
THE FOREGOING LIMITATIONS OF LIABILITY ARE INDEPENDENT OF ANY EXCLUSIVE REMEDIES FOR BREACH OF WARRANTY SET FORTH IN THIS AGREEMENT AND SHALL SURVIVE AND APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDIES SPECIFIED HEREIN. CLIENT ACKNOWLEDGES AND AGREES THAT THE FEES CHARGED BY VERITY IT IN THIS AGREEMENT REFLECT THE OVERALL ALLOCATION OF RISK BETWEEN THE PARTIES, INCLUDING BY MEANS OF THE PROVISIONS FOR LIMITATION OF LIABILITY AND EXCLUSIVE REMEDIES DESCRIBED IN THIS AGREEMENT. SUCH PROVISIONS ARE AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN THE PARTIES AND A MODIFICATION OF SUCH PROVISIONS WOULD AFFECT SUBSTANTIALLY THE FEES CHARGED BY VERITY IT HEREUNDER. IN CONSIDERATION OF SUCH FEES, CLIENT AGREES TO SUCH ALLOCATION OF RISK AND HEREBY WAIVES ANY AND ALL RIGHTS, THROUGH EQUITABLE RELIEF OR OTHERWISE, TO SUBSEQUENTLY SEEK A MODIFICATION OF SUCH PROVISIONS OR ALLOCATION OF RISK.
9.1 Verity IT Indemnification Obligations. Verity IT shall indemnify, defend and hold harmless Client and its officers, directors, employees, contractors and agents against any damages awarded in respect of any claims, judgments, actions, suits, proceedings, demands, liabilities, costs, losses, damages and expenses (including reasonable attorneys’ fees) (“Infringement Claim”) arising out of and/or relating to any claim that the Verity IT IP constitute an infringement, violation, trespass, contravention and/or breach in the United States of any patent, copyright, trademark, license and/or other property or proprietary right of any third party, or constitutes the unauthorized use or misappropriation of any trade secret of any third party. The indemnity in this Section 9.1 shall not apply (i) to an Infringement Claim arising from any modification of the Verity IT IP, and/or from the use of the Verity IT IP in combination with any other items not provided by Verity IT, to the extent such modification and/or use in combination resulted in the Infringement Claim and/or (ii) if such Infringement Claim results from any breach of the Client’s obligations under this Agreement, and/or the use of the Verity IT IP other than in connection with this Agreement, and/or in a manner not reasonably contemplated by this Agreement. In the event of an Infringement Claim, Verity IT shall be entitled at its own expense and option to either (a) procure the right for the Client to continue utilizing the Verity IT IP which is at issue; (b) modify the Verity IT IP to render such Verity IT IP non-infringing; or (c) replace the Verity IT IP with an equally suitable, functionally equivalent, compatible, non-infringing intellectual property.
9.2 Client Indemnification Obligations. Client, at its expense and to the maximum extent permitted by law, will indemnify, defend and hold harmless Verity IT and its licensors and any of their officers, directors, employees, agents, consultants and other representatives from all claims, judgments, actions, suits, proceedings, demands, liabilities, costs, losses, damages and expenses (including reasonable attorneys’ and experts’ fees and expenses as well as interparty damages caused by Client or third parties) and will reimburse such fees and expenses as they are incurred, including in connection with any claim and/or action threatened and/or brought against Verity IT, arising out of and/or relating to (i) any claim that the provision and/or utilization of any Client Content or Client’s IT Systems or any portion thereof constitutes an infringement, violation, trespass, contravention or breach of any patent, copyright, trademark, license or other property or proprietary right of any third party, or constitutes the unauthorized use or misappropriation of any trade secret of any third party; (ii) any claim that Client is not in compliance with any applicable law, rule, regulation, order of any governmental (including any regulatory or quasi-regulatory) agency or contract, including any financial disclosure or encryption law; (iii) any amount owed in connection with any Third Party Products/Services used by Client or by Verity IT in providing the Services to Client, including, without limitation, any claim arising from an actual or alleged violation, breach or default under an agreement related to such Third Party Products/Services; (iv) Client’s unauthorized use of Verity IT IP, the Services; and/or (v) any breach of Sections 7.1 or 7.3.
9.3 Indemnification Procedure. The indemnity set forth in this Section 9 shall only be given on condition that (i) the indemnified party gives notice to the indemnifying party of any claim promptly upon becoming aware of the same; (ii) the indemnified party gives the indemnifying party the sole right to conduct the defense of any claim or action, or the negotiation of any settlement, in respect of a claim and does not at any time admit liability or otherwise settle or compromise or attempt to settle or compromise the said claim or action except upon the express written instructions of the indemnifying party; and (iii) the indemnified party acts in accordance with the reasonable instructions of the indemnifying party and gives the indemnifying party such assistance as it shall reasonably require in respect of the conduct of the said defense including without prejudice to the generality of the foregoing the filing of all pleadings and other court processes and the provision of all relevant documents.
9.4 Exclusive Remedy. This Section 9 sets forth the indemnified party’s sole and exclusive remedy from the indemnifying party for any claim, demand, proceeding or action by a third party in relation to an Infringement Claim under Section 9.1 and 9.2.
10.1 Verity IT Insurance. Verity IT will maintain and keep in full force and effect, the insurance policies (“Verity IT Insurance Policies”), with insurers with an AM Best Rating of A- or better, with policy types and limits are set forth in Schedule 10.1, including reasonably similar limits, forms, endorsement, and retroactive dates, if applicable. Upon the reasonable request of Client, Verity IT will furnish Client with copies of the Verity IT Insurance Polices (including the declaration page or other evidence of insurance) upon execution of this Agreement, and following each renewal of such policy, within a reasonable period of time following any such request. Except to the extent that Client is responsible for the claim at issue, the Verity IT Insurance Policies will be primary and non-contributory, and shall name Client as additional insureds, and contain a waiver of subrogation, in favor of Client, and its managers, employees, officers, affiliates, partners, parent organizations, subsidiaries, and assigns.
10.2 Client Insurance. Client will maintain and keep in full force and effect, the insurance policies (“Client Insurance Policies”), with insurers with an AM Best Rating of A- or better, with policy types and limits are set forth in Schedule 10.2, including reasonably similar limits, forms, endorsement, and retroactive dates, if applicable. Upon the reasonable request of Verity IT, Client will furnish Verity IT with copies of the Client Insurance Polices (including the declaration page or other evidence of insurance) upon execution of this Agreement, and following each renewal of such policy, within a reasonable period of time following any such request. Except to the extent that Verity IT is responsible for the claim at issue, the Client Insurance Policies will be primary and non-contributory, and shall name Verity IT as additional insureds, and contain a waiver of subrogation, in favor of Verity IT, and its managers, employees, officers, affiliates, partners, parent organizations, subsidiaries, and assigns.
11. Equitable Relief. Each party acknowledges (a) any use or disclosure of the Disclosing Party’s Confidential Information in violation of the terms of this Agreement or (b) any use or disclosure of the other party’s intellectual property in violation of the terms of this Agreement may cause immediate and irreparable injury, loss and/or damage to the non-breaching party for which an adequate remedy at law may not exist. Therefore, in the event of an actual or threatened violation, through any means whatsoever, the non-breaching party may seek to obtain from a court of competent jurisdiction specific performance and/or temporary or permanent injunctive relief without having to post a bond.
12. Restrictive Covenants. During the term of this Agreement and for a period of one year thereafter, Client shall not, without the prior written consent of Verity IT, directly, indirectly or through any other party (a) solicit Verity IT’s employees or (b) interfere in, or solicit or induce any change in or cessation of, the business relationship between Verity IT and any of its clients, independent contractors, agents, representatives, contract manufacturers, suppliers or investors. Notwithstanding the foregoing, either party may hire the other’s employees who respond to public advertisements. In the event of a breach of subsection (a), the breaching party’s sole and exclusive liability and the non-breaching party’s sole and exclusive remedy shall be for the breaching party to pay the non-breaching party 50% of the employee’s first year salary.
13. Export/Import Control Compliance. The sale, resale or other disposition of Services, products and any related technology or documentation may be subject to the export control laws, regulations and orders of the United States and may be subject to the export and/or import control laws and regulations of other countries. Client is solely responsible for complying with all such laws, regulations and orders and acknowledges that it shall not directly or indirectly export or import any products to any country to which such export or transmission is restricted or prohibited. Client understands and acknowledges its responsibility to obtain any license to export, re-export or import as may be required. Each party will at all times comply with all applicable laws and regulations relating to its performance of this Agreement and/or applicable SOW.
14. Notices. All notices and other communications given or made pursuant to this Agreement must be in writing, sent to the persons designated herein or to such other persons and addresses set forth on the signature page hereto (as may be updated from time to time) and will be deemed to have been given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. The parties designate the individuals set forth on Schedule 15 as each party’s respective point of contact.
15. Assignment. Client may not assign, as a result of a change of control or by operation of law or otherwise, its rights or obligations under this Agreement without the prior written consent of Verity IT. This Agreement will be binding upon the parties and their respective legal successors and permitted assigns.
16. Independent Contractor. Verity IT is an independent contractor and will determine the method, details and means of performing the Services. No party shall have the authority to bind, represent or commit the other. Nothing in this Agreement shall be deemed or construed to create a joint venture or agency relationship between the parties for any purpose. Nothing contained herein shall give or is intended to give any rights of any kind to any third persons.
17.1 No Waiver by Conduct. No waiver of any of the terms of this Agreement and/or any SOW will be valid unless in writing and designated as such. Any forbearance or delay on the part of either party in enforcing any of its rights under this Agreement will not be construed as a waiver of such right to enforce same for such occurrence or any other occurrence.
17.2 Force Majeure. Notwithstanding any other provision of this Agreement, neither party is liable for any failure to perform, or delay in performing, any particular obligations under this Agreement where the failure or delay arises from any cause or causes beyond its reasonable control, including without limitation fire, flood, earthquake, elements of nature, epidemics, pandemics, communication line failures, power failures, acts of God, acts of war, terrorism, riots, civil disorders or rebellions (“Force Majeure Event”). In the event of a Force Majeure Event, the parties agree to meet and discuss how to resolve the issue. Either party may terminate this Agreement by giving the other party written notice if the other party fails to perform those obligations for one month due to such Force Majeure Event. This Section does not apply to Section 5, or any obligation to pay money, or any obligation that is unaffected by the Force Majeure Event.
17.3 Construction; Headings; Severability. The language in all parts of this Agreement will be construed, in all cases, according to its fair meaning, and not for or against either party hereto. The parties acknowledge that they have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement. The headings and titles of the paragraphs of this Agreement are not part of this Agreement but are for convenience only and are not intended to define, limit or construe the contents of the provisions contained herein. If any one or more of the provisions of this Agreement are for any reason held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement will be unimpaired and will remain in full force and effect.
17.4 Third-Party Beneficiaries. Nothing contained in this Agreement is intended to confer nor shall confer upon any person (other than the parties hereto and their permitted assigns) any rights, benefits or remedies of any kind or character whatsoever, and no such person shall be deemed a third party beneficiary under or by reason of this Agreement.
17.5 Governing Law, Venue, Language. This Agreement will be governed by, and construed in accordance with, the internal laws of the State of Illinois, without regard to its choice of laws principles. The United Nations convention on contracts for the international sale of goods shall not apply to this Agreement. The governing language for this Agreement shall be English, and no concurrent or subsequent translation of this Agreement into any language shall modify any term of this Agreement. Any action related to or arising from this Agreement shall take place exclusively in the courts situated in the City of Chicago, Cook County, Illinois and the parties hereby submit to the venue of the courts situated therein.
17.6 Attorney Fees. If either party brings legal action to enforce its rights under this Agreement, the prevailing party will be entitled to recover all fees, costs and expenses (including without limitation reasonable attorneys’ fees) incurred in connection with the action.
17.7 Entire Agreement. This Agreement and each SOW constitutes the complete agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings between the parties. The recitals are hereby incorporated into the body of this Agreement for all intents and purposes as if fully set forth herein.
17.8 Counterparts; Method of Amendment. This Agreement, each SOW and any amendments hereto and/or thereto may be executed in counterparts and will not be effective or enforceable unless and until it is executed with the signature of an authorized representative of each of the relevant entities. The exchange of a fully executed Agreement by fax, electronic or computer image shall be sufficient to bind the parties to the terms and conditions of this Agreement and signatures affixed hereto shall be considered for all purposes as originals.
[signature page to follow]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.
VERITY IT, LLC
Address: Address: 2001 Butterfield, Suite 102, Downers Grove, IL 60515
Verity IT Insurance Policies
Client Insurance Policies
Points of Contact
Verity IT Point of Contact:
Attn: President, Verity IT, LLC
2001 Butterfield Road, Suite 102
Downers Grove, IL 60515
Client Point of Contact: