-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L9G1+AQN6bo3kZOFPIF+ElywxVt5M/YTm8MrYwfA7/G/VdauDo2NrZHYDj8hwwEm E13xPY2/Aw0PDcqT79Zr9g== 0000914317-96-000047.txt : 19960311 0000914317-96-000047.hdr.sgml : 19960311 ACCESSION NUMBER: 0000914317-96-000047 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950901 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960308 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LCS INDUSTRIES INC CENTRAL INDEX KEY: 0000058151 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DIRECT MAIL ADVERTISING SERVICES [7331] IRS NUMBER: 132648333 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-12329 FILM NUMBER: 96532545 BUSINESS ADDRESS: STREET 1: 120 BRIGHTON RD CITY: CLIFTON STATE: NJ ZIP: 07012 BUSINESS PHONE: 2017785588 MAIL ADDRESS: STREET 1: 120 BRIGHTON RD STREET 2: 120 BRIGHTON RD CITY: CLIFTON STATE: NJ ZIP: 07012-1694 FORMER COMPANY: FORMER CONFORMED NAME: LISTFAX COMPUTER SERVICES INC DATE OF NAME CHANGE: 19711013 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------- FORM 8-K/A-1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) of the SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) September 1, 1995 --------------------------- LCS INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 0-12329 13-2648333 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS employer of incorporation) file number) identification no.) 120 Brighton Road, Clifton, New Jersey 07012-1694 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (201) 778-5588 --------------------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. On September 1, 1995, the registrant, LCS Industries, Inc. ("LCSI"), entered into an agreement to provide computer services through the building of a marketing database for a major non-U.S. communications company. Total expected revenues from the agreement, subject to early termination, will approximate $40 million to be realized by LCSI through June 1998. Reference is made to the form of Agreement dated September 1, 1995 filed as Exhibit 1 hereto for a more complete description of the terms. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. Exhibit 1 Redacted Contract between LCS Industries, Inc. and a major non-U.S. communications company. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LCS INDUSTRIES, INC. Dated: March 5, 1996 By: /s/PAT R. FRUSTACI ------------------------------- Pat R. Frustaci Vice President - Finance EX-1 2 INDEX TO EXHIBITS Exhibit No. Description 1 Redacted Contract between LCS Industries, Inc. and a major non-U.S. communications company DATED September 1, 1995 XX - and - LCS INDUSTRIES, INC. ---------------------------------------- AGREEMENT ---------------------------------------- [Confidential portions of this Exhibit have been omitted and filed with the Commission. Omitted portions are indicated by the notation " XX ".] CONTENTS DEFINITIONS 1. Definitions SCOPE OF THE WORK 2. Description of the Work 3. Project Plan 4. Pricing and Payment Information MANAGEMENT OF THE WORK 5. Contract Performance 6. Change Control Procedure 7. Marketing Database System 8. Personnel 9. Access to the Premises 10. Observance of XX Site and other Regulations 11. Security 12. Inspection and Testing During Development MANAGEMENT OF THE CONTRACT 13. Confidentiality 14. Notices 15. Force Majeure 16. Assignment and Subcontracting 17. Breach 18. LCS Non-Default 19. Duration and Termination 20. Other Consequences of Termination 21. Competition INTELLECTUAL PROPERTY RIGHTS 22. XX Intellectual Property 23. LCS Intellectual Property GENERAL 24. Virus Protection 25. Indemnity - General 26. Electronic Repossession 27. XX Property 28. Waiver 29. Enforceability 30. Headings and Interpretation 31. Entire Agreement 32. Law and Jurisdiction 33. Order of Precedence 34. Limitation of Liability 35. Counterparts 36. No Third Party Beneficiaries and Relevant Contractors LIST OF APPENDICES A XX Dependencies B XX Requirements C Computer Platform D Project Plan at the Commencement Date E Scope of Work F Change Control Proforma G Security Requirements H Confidentiality Agreement I Data Protection Codes of Conduct This Contract is made September 1, 1995. BETWEEN (1) XX whose registered office is at XX, XX XX (hereinafter called "XX" which shall include its successors and permitted assigns); and (2) LCS INDUSTRIES, INC. whose principal office is at 120 Brighton Road, Clifton, New Jersey, USA 07012 (hereinafter called "LCS" which shall include its successors and permitted assigns). WHEREAS XX has a need for the creation and supply of XX services which will deliver a marketing database which includes all the customer behavior and attitudinal information required to enable XX to become more dynamic and competitive in the XX telecommunications market; WHEREAS XX has a need for a computer platform on which such marketing database will be created, updated and operated; WHEREAS LCS has expertise and skill in designing computer platforms on which marketing databases can be created, updated and operated, and in the creation and supply of marketing database systems and associated XX services; WHEREAS the parties understand that the substance of their relationship is likely to change over the duration of the contract, and to that end have agreed to hold monthly meetings between themselves to plan and manage the services to be provided to XX by LCS; WHEREAS XX has procured from one or more third parties the Computer Platform (as defined below) at its own cost and expense to meet the specifications previously defined by LCS; WHEREAS XX wishes to rely on LCS's skill and expertise and wishes to enter into a contract on the terms hereinafter contained. THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. DEFINITIONS In the Contract, the following expressions shall, unless the context requires otherwise, have the following meanings:- 1.1 "Acceptance" shall mean that the Software has been supplied in accordance with the Contract, and shall occur when the Software meets the Marketing Database Design, and "Accept" and "Accepted" in the context of "Acceptance" shall be construed accordingly; 1.2 "Affiliate" shall mean any company, partnership or other entity which from time to time directly or indirectly Controls, is Controlled by or is under common Control with XX, including as a subsidiary or holding company or subsidiary with the same holding company as defined in XX (as amended), and "Control" shall mean the beneficial ownership of more than 50% of the issued share capital or the legal power to direct or cause the direction of the general management and policies of the entity in question (and "Controls" and "Controlled" shall be construed accordingly); 1.3 "XX" shall mean XX; 1.4 "XX Background Information" shall mean all Information obtained from XX or provided by XX in connection with the performance of the Contract, and all Information in relation to XX's affairs, business, business practices, customer data and customer information which comes to LCS's knowledge during the period of this Contract including but not limited to the existence of this Contract and any provisions of this Contract; 1.5 "XX Dependencies" shall mean the matters set out in Appendix A; 1.6 "XX Fiscal Year" shall mean a period of 12 months commencing the XX 1.7 "XX Foreground Information" shall mean Foreground Information relating specifically to the business of XX and which cannot be used or otherwise exploited by LCS without thereby unavoidably disclosing Information relating to XX; 1.8 "XX Requirements" shall mean XX's requirements set out in Appendix B, as they have been amended by agreement between the parties at the Commencement Date by the Scope of Work, and, after that Date, as amended by agreement between the parties under Condition 6; 1.9 "XX Supplied Items" shall mean all items supplied to LCS by or on behalf of XX in connection with the Contract; 1.10 "Commencement Date" shall mean the date these Conditions have been signed by both XX and LCS; 1.11 "Computer Platform" shall mean the hardware and software as set out in Appendix C to be acquired by XX at its own cost and expense; 1.12 "Contract" shall mean the agreement made between XX and LCS for the execution of the Work, including these Conditions and Appendices A to I; 1.13 "Contract Price" shall mean the amount stated in Condition 4.1 together with any additions or deductions agreed in writing under the Contract; 1.14 "Data Center" shall mean the premises owned or occupied by XX at XX, XX; 1.15 "Deliverable" shall mean an output of any kind delivered, or to be delivered, under the Contract; 1.16 "Foreground Information" shall mean all Information generated by LCS in the course of or arising from the performance of the Contract, excluding the LCS Background Information; 1.17 "Information" shall mean all information (other than the business records of the parties) whether written or oral or in any other form, including but not limited to software, documentation, specifications, reports, data, notes, drawings, models, patterns, samples, computer outputs, designs and circuit diagrams, inventions and know-how; 1.18 "Intellectual Property Rights" shall mean any patent, XX, registered design, copyright, design right, XX, know-how, or any similar right exercisable in any part of the world and shall include any application for the registration of any patents or registered designs or similar registrable rights in any part of the world; 1.19 "XX XX Area" shall mean the geographical area comprised in a circle the center of which is XX and the radius of which is XX; 1.20 "LCS Background Information" shall mean Information which at the Commencement Date is owned or controlled by or licensed to LCS, including third party Information, and is supplied to XX in connection with the Work; 1.21 "LCS Foreground Information" shall mean all Foreground Information which is not XX Foreground Information; 1.22 "Marketing Database Design" shall mean the data input and report output requirements to be procured by XX for the Marketing Database System in order for that System when properly used to be capable of producing the reports and other data allowing analysis thereof to be undertaken by a suitably qualified person, as such reports and data are described in the XX Requirements; 1.23 "Marketing Database System" shall mean a computer system comprising the Computer Platform and the Software; 1.24 "Premises" shall mean the place or places other than LCS's premises to which the Software is to be delivered or where Work is to be done; 1.25 "Project Plan" shall mean the Deliverables and the timing and sequence of events for the performance of the Contract, which at the Commencement Date is set out in Appendix D, as updated under Condition 3 and altered from time to time in accordance with Conditions 5 or 6; 1.26 "Scope of Work" shall mean the items to be performed by LCS described in the document dated XX entitled CMG/LCS Response to XX and all appendices to it, which documents are hereby incorporated in this Contract as Appendix E; 1.27 "Software" shall mean the software to be developed and supplied by LCS under the Contract in order to meet the Marketing Database Design and the User Interface Design, including all object code, source code, and technical and other documentation; 1.28 "XX" shall mean the person duly appointed by XX and notified in writing to LCS, to act as XX's representative for the purpose of the Contract, or, in default of such notification, XX, who at the Commencement Date is XX; 1.29 "Termination Costs" shall mean an amount equal to the total costs which LCS is obliged to pay third parties, having taken all reasonable steps to mitigate the amount of those costs, during the period from the date of early termination of this Contract until 30 June 1998 and which LCS reasonably incurred (whether before or after the Commencement Date) in connection with or for the performance of this Contract, including office utilities, leases of office space, residential accommodation and vehicles; 1.30 "User Interface Design" shall mean the requirements to be procured by XX for delivery systems for accessing data in the Marketing Database System; 1.31 "Work" shall mean the services to be performed by LCS under Condition 2.1. 2. DESCRIPTION OF THE WORK 2.1 Subject to the terms of this Contract, LCS shall: 2.1.1 by XX develop, install and commission the Software on the Computer Platform in order to meet the Marketing Database Design; 2.1.2 develop, install and commission the Software in order to meet the User Interface Design; 2.1.3 define the specifications for the Computer Platform; 2.1.4 integrate the Computer Platform and Software to form the Marketing Database System; 2.1.5 maintain and support the Software and manage the Marketing Database System; 2.1.6 provide certain training and information technology services during the term of this Contract, all as more particularly described in the Scope of Work and the Project Plan. 2.2 LCS warrants that: 2.2.1 it shall use reasonable care and skill in performing the Work and in seeking to meet the time scales set out in the Project Plan; and 2.2.2 the Marketing Database System will meet the Marketing Database Design and the XX Requirements subject to Condition 2.5. 2.3 XX acknowledges that LCS has already delivered to XX the specifications for the Computer Platform. 2.4 LCS shall liaise and co-operate with such other XX contractors as XX may notify to LCS provided LCS need not do so to the extent it would interfere with the timely performance of its obligations under the Contract. 2.5 LCS is not liable for defects or shortcomings in the Computer Platform (other than in the specifications therefor (without affecting Condition 7.9) and/or in the Software), including inadequate size or capacity, and telecommunications failures. Nothing in this Condition 2.5 affects XX's right to terminate the Contract under Condition 7.7. 3. PROJECT PLAN 3.1 At the Commencement Date the parties have agreed a Project Plan up to XX relating to the development of that part of the Software to which the Marketing Database Design refers, but they still need to agree the matters to be included in one or more updated Project Plans covering the remainder of the Contract, and will seek to do as follows: 3.1.1 no later than XX LCS shall submit an updated Project Plan to XX for approval by XX covering the Work to be undertaken up to XX, and no later than 2 months before the end of each subsequent XX Fiscal Year during the term of the Contract LCS shall submit an updated Project Plan to XX covering the Work to be undertaken during the following XX Fiscal Year or part thereof during the term of the Contract (such period from XX to XX and the 2 months before the beginning of the relevant XX Fiscal Year being the "Approval Period"); 3.1.2 during the Approval Period the parties shall seek to agree the updated Project Plan, but if agreement is not reached by the end of the Approval Period, LCS shall perform the Scope of Work in a reasonable time; 3.1.3 if XX does not notify LCS in writing of any comments on an updated Project Plan proposed by LCS by the end of the Approval Period, the updated Project Plan shall be deemed to be approved by XX; 3.1.4 where an updated Project Plan has been or is deemed to be approved by XX, the updated Project Plan shall become the Project Plan for the purposes of the Contract. 3.2 The parties shall implement the Project Plan. 3.3 XX shall provide such resources, assistance and Information as may reasonably be needed by LCS in order to perform its obligations under the Contract in a timely fashion, and LCS shall notify XX as soon as reasonably practicable in advance of such need arising. 3.4 Without affecting Condition 3.3, at the request of LCS and otherwise as required in the Project Plan, XX shall provide and otherwise make available to LCS the XX Dependencies. 3.5 LCS shall provide the Deliverables (other than the Software developed to meet the Marketing Database Design and the Project Plan) to the reasonable satisfaction of XX. 3.6 LCS shall keep the Project Plan up to date and provide XX with copies of new issues thereof. 3.7 Each party shall notify the other at the earliest opportunity of any identified changes likely to impact on the quality or delivery of the Work. 3.8 XX acknowledges that the performance of LCS's obligations under Conditions 2.1.1 and 2.1.4 and the satisfaction of the warranty in Condition 2.2.2 depends on the XX Dependencies being provided by XX when required (as notified in writing in advance by LCS as being critically required) in order for the events which have to take place in sequence for the Software to be delivered by XX and for the timely integration of the Computer Platform and the Software, to take place in that sequence; LCS shall not be liable for breach of those provisions where the XX Dependencies are not made available accordingly. 3.9 If the nature or volume of the services of a third party to be procured by XX which are necessary for the timely performance of the Work (a "Relevant Contractor") are altered to an extent which adversely affects the continued performance of the Work in accordance with the Contract, then XX and LCS shall seek to agree the changes (if any) to the Contract in order to ensure that LCS can continue to perform its obligations under the Contract; if the parties are unable to agree those changes, then LCS shall try to perform its obligations but shall not be liable to XX for a failure to do so. 3.10 Any date referred to in this Contract for the performance thereof may only be changed under Condition 6. 4. PRICING AND PAYMENT INFORMATION 4.1 In consideration of the Work and the Software being provided by LCS, XX will pay LCS the fixed Contract Price of $40,226,000. The Contract Price shall be paid in full without set-off monthly in arrears, and in accordance with the following schedule: 4.1.1 the total amount to be paid during the XX Fiscal Year 1995/1996 is XX less (a) XX already invoiced to XX under work covers for the period from XX to XX which is due XX and (b) XX under work cover for the period from XX to XX which is invoicable on or after XX and due on XX (assuming invoiced on XX). The balance shall be paid as follows: i. XX being invoicable on or after XX; and ii. XX being payable in 7 monthly sums of XX, the first such payment being invoicable on or after XX. 4.1.2 During XX's Fiscal Year 1996/97, 12 monthly sums of XX, the first such payment being invoicable on or after XX. 4.1.3 During XX's Fiscal Year 1997/98, XX shall pay 12 monthly sums of XX, the first such payment being invoicable on or after XX. 4.1.4 During XX's Fiscal Year 1998/99, 3 monthly sums of XX, the first such payment being invoicable on or after XX. 4.2 In addition to the fixed Contract Price payable pursuant to Condition 4.1, XX will pay or provide without cost to LCS, or reimburse LCS, for all of the following out-of-pocket costs incurred by LCS in connection with performing its obligations under this Contract: 4.2.1 travel and reasonable subsistence expenses outside the XX XX Area; 4.2.2 communications costs and facilities incurred in linking computer systems located on XX and LCS sites in XX and on XX sites in XX and LCS sites in the United States of America; 4.2.3 postage, freight and overnight courier expenses incurred in shipping XX's data; 4.2.4 such other items, if any, as the parties may agree under Conditions 5 or 6. 4.3 All prices in Conditions 4.1 shall be held fixed and firm for the duration of the Contract, but they exclude costs for office equipment (including photocopies, fax machines, personal computers and printers, mobile telephones, pagers and overhead projectors) and office furniture. 4.4 All prices shown in the Contract shall be exclusive of XX at the rate prevailing from time to time and all other XX leviable in connection with performing the Work, which shall be for XX's account. 4.5 XX will settle all invoices submitted in accordance with this Contract within 15 days from the date of receipt of a valid invoice. All payments shall be made by wire transfer of immediately available US Dollar funds to such account or accounts as LCS shall specify in writing to XX. 4.6 When payment becomes due LCS shall forward invoices to the XX at XX, XX XX. 4.7 Each invoice shall: 4.7.1 specify the Contract number; 4.7.2 specify the period for which payment is due if relevant; 4.7.3 if it relates to out-of-pocket expenses reimbursable to LCS pursuant to Condition 4.2, include copies of actual receipts for traveling expenses for trips outside the XX XX Area and for other reimbursable expenses referred to in Condition 4.2. 4.8 If XX without cause has not paid any amount due under this Contract within 30 days of the date of the applicable invoice, compound interest shall be payable on the unpaid amount accruing daily from the due date for payment to the date of actual payment at the annual rate of interest of 2% above the base lending rate of The Bank of New York applicable at the relevant time. This Condition 4.8 shall survive termination or expiry of the Contract. 4.9 Where this Contract terminates early on a day other than the last day of a calendar month, the amount to be paid by XX under Condition 4.1 in respect of Work done since the beginning of that month and the date of termination, shall be calculated by applying the following formula: X = A x B/C Where: A is monthly sum to which Condition 4.1 refers B is the number of days from the beginning of the calendar month to the date of termination (inclusive) C is the number of days in the calendar month X is the amount to be paid. 5. CONTRACT PERFORMANCE 5.1 LCS shall deliver to XX a report each month, in such format as shall be reasonably required by XX, detailing the performance of LCS against the Project Plan. 5.2 Progress meetings shall take place at monthly intervals at XX or LCS's premises in the XX. The meetings shall be attended by the following people or their nominated representative who shall be fully empowered to undertake decisions on behalf of their companies: XX XX - XX Project Director XX - XX Project Manager XX - XX Commercial Representative XX - XX Technical Representative Plus representative of XX LCS Mr. Arnold J Schiene - LCS - Project Director Mr. Peter Weinbrecht - LCS - Project Manager - Revenue Feeds 5.3 LCS and XX may discuss and agree at the progress meetings any matters relevant to the performance of their rights and obligations under this Contract (including acceptance of Deliverables (other than the Project Plan and the Software developed to meet the Marketing Database Design) or identification of shortfalls in such Deliverables), and any such agreement shall amend the Contract accordingly except that any change to the Contract Price, the XX Requirements or the Scope of Work may only be made under Condition 6. Minutes of the meetings shall be kept by XX and agreed with LCS. 5.4 XX and LCS will endeavor to identify joint business opportunities in XX during the period of this Contract. 6. CHANGE CONTROL PROCEDURE 6.1 This Condition 6 applies to all variations to the Contract proposed by either party except permitted variations agreed at progress meetings held under Condition 5. 6.2 All such variations to the Contract proposed by either party shall be processed by means of the change control procedure detailed below and by use of a variation proforma set out in Appendix F. 6.3 Except as otherwise may be agreed in writing, the Commercial Representatives of XX and LCS (as nominated below) shall be the only people who may make or receive a formal proposal for a variation to the other party. Other managers within both parties may discuss the viability of a proposal before a variation proforma is raised, and shall be consulted by the Commercial Representatives as necessary after the proforma is raised. 6.4 Copies of any relevant correspondence and Information (including man-day rates and resource allocation) shall be attached to the proforma to assist the other party in evaluating the proposed variation. 6.5 XX will allocate a variation reference number to each proforma and shall be responsible for progressing the proforma. 6.6 Where it is confirmed by LCS that a proposed variation will have no effect on the Contract Price or time scales or the performance of the Work, then, with the agreement of XX, which shall not be unreasonably withheld or delayed, the change may be introduced immediately and the proforma circulated within 14 days. 6.7 No variation will be considered to be effective unless the proforma is signed in the relevant place by XX and LCS. LCS shall complete the confirmation part of the proforma, and return it to XX within 10 days of receipt of an instruction from XX to proceed with a variation. 6.8 Following agreement of a variation XX will arrange the issue of an amendment to Contract as necessary. 6.9 The Commercial Representatives who shall manage and authorize changes to the Contract will be: XX LCS XX Mr. Arnold J. Scheine Manager Software Procurement CEO, LCS XX 120 Brighton Road XX Clifton XX New Jersey XX 07012 XX USA XX Fax: 201 778 7485 Fax: XX Tel: 201 778 5588 Tel: XX 7. MARKETING DATABASE SYSTEM 7.1 During the period identified in the Project Plan (the "Test Period") for testing the Software developed to meet the Marketing Database Design (the "Tested Software"), LCS shall submit sample reports produced using the Marketing Database System as it then exists to the XX for approval against the XX Requirements. 7.2 The XX shall notify LCS of any defects in the reports submitted. 7.3 Defects in the reports shall be corrected by LCS, working as required with Relevant Contractors, by enhancing or modifying the Tested Software, and this shall be undertaken at no additional charge to XX. 7.4 After the Tested Software has been corrected pursuant to Condition 7.3, LCS shall re-submit additional sample reports to the XX for approval against the XX Requirements. 7.5 The procedure described in Condition 7.1 to 7.4 shall continue throughout the Test Period until no defects in the reports are identified by the XX. 7.6 Where no defects are identified in the reports and XX has been provided with at least one version of each of the completed reports meeting the XX Requirements: 7.6.1 the Tested Software shall be Accepted by XX; and 7.6.2 LCS shall have satisfied Conditions 2.1.1, 2.1.3 and 2.1.4 and the warranty in Condition 2.2.2. 7.7 If by XX all the reports to be available at that date meeting the XX Requirements are not available from the Marketing Database System within the response times required by the XX Requirements (the "Response Times") and that is due either to a defect in the Marketing Database Design, the Tested Software, and/or the specifications of the Computer Platform provided by LCS, then the following shall apply: 7.7.1 XX shall no earlier than XX serve LCS with a notice, specifying the defects in the reports and any response times of the Marketing Database System and requiring LCS during the 90 days after receipt of the notice (working with Relevant Contractors as required) to enhance or modify the Tested Software and/or the specifications of the Computer Platform (but not the Computer Platform itself) so that all the reports are available within the Response Times; i. during the 90 days LCS shall re-submit revised reports to the XX for approval against the XX Requirements; ii. if the reports still do not meet the XX Requirements whether or not within the Response Times at the end of the 90 days, and that is due to a defect in the Marketing Database Design or the enhanced or modified version of the Tested Software, XX is entitled to terminate the Contract with immediate effect by notice in writing to LCS or seek to agree changes to the XX Requirements under Condition 6; 7.7.2 in the event that enhancement or modification to the specification of the Computer Platform would (if implemented) result in XX having to procure additional hardware and/or associated system software to that specified in Appendix C (the "Additional Items") then: i. XX and LCS shall obtain as soon as possible separate estimatesfrom reputable suppliers representing their respective opinions of the lowest total cost method of buying (or licensing in the case of software) the Additional Items, and the period of 90 days shall be suspended and further performance of this Condition 7.7 shall be postponed until their respective estimates have been obtained; ii. if both estimates are greater than $1,000,000 (excluding XX or any equivalent XX), XX is entitled to terminate the Contract with effect from the end of the 90 days referred to in Condition 7.7.1 as extended under Condition 7.7.2(i); 7.7.3 if XX decides to procure the Additional Items, then: i. the 90 days shall be further suspended and further performance of this Condition 7.7 shall be further postponed until the Additional Items have been delivered and installed such that the procedure can continue; ii. once the Additional Items have been installed, during the remainder of the 90 days (following the suspension thereof) LCS shall re-submit revised reports to the XX for approval against the XX Requirements; iii. if the reports still do not meet the XX Requirements within the Response Times at the end of the 90 days, and that is due to a defect in the Marketing Database Design, or the enhanced or modified versions of the Tested Software and/or the specifications of the Computer Platform, XX is entitled to terminate the Contract with immediate effect by notice in writing to LCS or to seek to agree changes to the XX Requirements under Condition 6; 7.7.4 if XX decides not to procure the Additional Items and does not terminate or is not entitled to terminate the Contract under Condition 7.7.2 then: i. during the remainder of the 90 days (following suspension thereof), LCS shall re-submit revised reports to the XX for approval against the XX Requirements; ii. if the reports still do not meet the XX Requirements whether or not within the Response Times at the end of the 90 days, and that is due to a defect in the Marketing Database Design or the enhanced or modified version of the Tested Software, XX is entitled to terminate the Contract with immediate effect by notice in writing to LCS or seek to agree changes to the XX Requirements under Condition 6; 7.7.5 where any estimate to which Condition 7.7.2(i) refers is in a currency other than United States Dollars, the Dollar amount of the estimate shall be determined by applying the appropriate exchange rate published in the XX (or any replacement service) published in the XX immediately before the date of the estimate. 7.8 XX acknowledges that there are aspects of the Marketing Database System and its design for which LCS is not responsible, so that it is conceivable XX may have a right to terminate the Contract under Condition 7.7 as a result of events which are beyond LCS's control; accordingly, the provisions of Condition 7.7 are XX's only remedy for breach of contract, negligence or otherwise (except for fraud) where the reports required by the XX Requirements at XX are unavailable from the Marketing Database System within the Response Times, for defects in the Tested Software, its integration with the Computer Platform, and/or in the specifications for the Computer Platform, and/or otherwise where the Marketing Database System (or any part of it) fails in any way to meet the XX Requirements therefor prevailing at XX. Thereafter XX's remedies in respect of other aspects of the Marketing Database System and LCS's performance of the Contract will be in accordance with the Contract. 7.9 In no circumstances is LCS liable to pay for new hardware, or associated systems software and/or other computing equipment or services needed by XX in connection with the Computer Platform. 7.10 Until the Contract is terminated by XX under Condition 7.7, LCS shall continue to perform its obligations under the Contract and shall be paid under Condition 4 accordingly. 8. PERSONNEL 8.1 LCS shall ensure that any personnel engaged in the performance of this Contract have appropriate qualifications and competence. 8.2 LCS shall take all reasonable steps to avoid changes of personnel who have been assigned to perform the Work. 8.3 LCS and XX shall be responsible to the other for all loss or damage to property of the other, or injury caused by any of its employees, agents or sub-contractors in the course of or arising out of the performance of the Contract. 8.4 XX shall have the right to refuse admittance to, or order the removal from, its property of any person employed by or acting on behalf of LCS whose behavior, at the time he or she is seeking admittance to or is present at the property, renders that person at the relevant time in the reasonable opinion of XX (which shall be final) unfit to be on XX property. Action taken under this Condition 8.4 shall be notified in writing to LCS by XX. Such notice shall describe in reasonable detail the behavior which gave rise to such action by XX and shall list the names and titles of all XX employees who witnessed the alleged behavior. This Condition 8.4 shall be deemed to be reciprocal subject to Condition 11. 8.5 Key personnel to be engaged on the Work are as follows:
Mr. Arnold J Scheine - LCS Project Director Mr. Peter Weinbrecht - LCS Project Manager - Revenue Feeds Mr. Tom Maggio - LCS Project Manager - Other Feeds Mr. Bernie Kane - LCS Project Manager - Delivery Systems Mr. Tony Volpe - LCS Project Manager - Data Processing and Systems Programming Mr. Joe Maier - LCS Project Manager - All Business analysts Programmers Mr. Brian Levine Project Manager - Client Coordination and Relations Mr. Marvin Cohen - LCS Senior Developer Mr. Joe Garretson - LCS Project Coordinator - Customer Grouping Mr Joseph Minelli - LCS Project Coordinator - Customer Grouping
8.6 XX shall also be at liberty to request additional key personnel throughout the Contract which shall be added to the list set out in Condition 8.5 by way of variation, as detailed in Condition 6. 8.7 LCS shall, if possible, give XX at least 30 days prior notification of any changes to the key personnel assigned to this Contract. LCS shall demonstrate that the qualifications of the prospective personnel are equal to or better than the qualifications of the personnel being replaced. XX shall be at liberty to reject such prospective personnel proposed by LCS having first given reasonable reasons for such rejection. In the event of rejection, LCS shall re-propose alternative personnel within 5 working days of XX's rejection. This process shall be repeated until the personnel are acceptable to XX, provided that if LCS reasonably believes that the refusal by XX to approve replacement personnel may adversely affect its ability to perform its obligations in a timely fashion, LCS is entitled to appoint replacement personnel regardless of whether they are acceptable to XX (without affecting Conditions 2.2.1 or 8.1). 8.8 LCS shall use reasonable endeavors to ensure that the key personnel are required to fulfill LCS's obligations under the Contract for the term thereof. 9. ACCESS TO THE PREMISES XX shall afford such access to the Premises as LCS deems necessary for the provision of the Work, at all reasonable times on or after the date stated in the Contract on which the Work is to commence or such earlier date as may be agreed in writing between XX and LCS. 10. OBSERVANCE OF XX SITE AND OTHER REGULATIONS 10.1 LCS shall at its own expense comply with all XX site regulations applicable to the performance of the Contract which have been notified in advance thereof to LCS and take and comply with such other measures as may be reasonably necessary in respect of precautions for safeguarding all persons and property as may be affected by the performance of the Contract. 10.2 Subject to Condition 10.1, XX shall provide the officers, employees, agents and sub-contractors of LCS with a safe working environment. 11. SECURITY 11.1 LCS shall ensure that the Software shall meet the security requirements set out at Appendix G. Upon XX's reasonable request, LCS shall ensure that the Software shall comply with such additional security requirements specified by XX from time to time during the Contract, provided that LCS is entitled to charge XX for the incremental services necessary to provide such security requirements at the hourly rate of $200. 11.2 Whenever LCS has access (including remote access) to or custody, care or control of Premises or property in which XX has an interest, LCS shall; 11.2.1 comply with all site regulations; and 11.2.2 limit its access to the Premises or property necessary for the purposes of the Contract; and 11.2.3 provide all security measures XX deems necessary at XX's cost; and 11.2.4 provide to XX the names and addresses of all LCS's personnel or sub-contractors engaged on the Contract; and 11.2.5 submit itself to any search required by XX, provided that any search of equipment owned or used or premises owned or occupied by LCS shall be subject to reasonable notice and confined to those parts thereof which relate to the performance of LCS's obligations under the Contract; and 11.2.6 ensure that all its personnel, sub-contractors engaged on the Contract do not without due authority remove any property in which XX has an interest from the Premises; and 11.2.7 take reasonable care of property in which XX has an interest and which is in the custody, care or control of LCS and, on request, inform XX of the whereabouts of such property; and 11.2.8 retain and make available to XX a log of all access. 11.3 XX is entitled on reasonable notice to inspect premises owned or occupied by LCS to assess whether the security features at the premises meet XX's security requirements and to require LCS at XX's cost and expense to install and maintain such additional features as XX may require within a reasonable time frame and in a manner which minimizes the disruption to LCS's business. 11.4 If LCS has remote access to property in which XX has an interest, such remote access shall: 11.4.1 be accessible to XX personnel on reasonable notice; and 11.4.2 be liable to be disconnected by XX at any time subject to Condition 11.7; and 11.4.3 not degrade the service or functionality of the property. 11.5 LCS shall ensure that all Software upgrades and Software or data back-ups can be effected remotely. 11.6 The obligations of LCS in this Condition 11 shall include LCS's employees and LCS shall take reasonable steps to procure that its agents and sub-contractors also take the necessary measures to ensure compliance. 11.7 This Condition 11.7 provides for the circumstances in which XX is entitled to disconnect any remote access of LCS pursuant to Condition 11.4.2 and the consequences of doing so. 11.7.1 XX must give LCS as much notice as reasonably possible before the access is disconnected. 11.7.2 If the disconnection is permanent, then this Contract shall terminate immediately. 11.7.3 If the disconnection proposed by XX is temporary and LCS considers that it may not as a result be able to fulfill its obligations under the Contract in a timely fashion, then the parties shall seek to agree changes to the Contract under Condition 6 in order to allow XX to disconnect the access for the time scale proposed; in default of agreement, LCS shall try to perform its obligations under the Contract, but shall not be liable to XX for failing to do so. 12. INSPECTION AND TESTING DURING DEVELOPMENT XX shall, subject to reasonable notice and at all times during the Contract period, be entitled to inspect and test the materials, workmanship and performance of the Software, provided that such inspection and testing may not be made if it would cause unreasonable delay to the timely performance of the Contract. 13. CONFIDENTIALITY 13.1 Subject to Condition 13.4, LCS shall keep confidential all XX Background Information and XX Foreground Information and shall not without the prior written consent of XX:- 13.1.1 use it for any purpose other than is necessary for the performance of its obligations under the Contract; or 13.1.2 disclose it to any person other than a person directly employed or engaged by LCS in the performance of the Contract. Disclosure to all persons shall be made in confidence and only to the extent necessary for the performance of LCS's obligations under the Contract; provided that LCS may disclose this Contract and any relevant Information to its legal or professional advisers to the extent necessary for the purpose of receiving legal or other advice, and provided further that such disclosure is under terms of confidentiality. 13.2 Subject to Condition 13.4 LCS shall not publicize the existence of the Contract without the prior written agreement of XX which shall not be unreasonably withheld or delayed, provided that LCS may describe to third parties the general nature of the Work in connection with seeking business arrangements with such third parties. 13.3 Subject to Conditions 13.4 and 23.2, XX shall keep confidential the LCS Foreground Information and all LCS Background Information provided always that XX: 13.3.1 shall procure that its employees who are engaged wholly or mainly in connection with the Contract and who are reasonably nominated by LCS shall sign a separate agreement with LCS substantially in the form set out at Appendix H, amended accordingly; 13.3.2 may disclose it to third parties providing to XX services exclusively for the benefit of the internal business purposes of XX, provided that XX: i. notifies the third party of the confidential nature of the LCS Background and LCS Foreground Information and takes reasonable steps to ensure that each third party is subject to obligations of confidence comparable to this Condition 13; ii. notifies LCS of any unauthorized or suspected unauthorized use by any third party of the LCS Background or LCS Foreground Information as soon as possible after XX becomes aware thereof; and iii. provides LCS with reasonable assistance in preventing or stopping the unauthorized use. 13.4 Neither party to the Contract shall be bound by the above provisions of this Condition 13 in relation to Information that is: 13.4.1 published or comes into the public domain otherwise than by a breach of the Contract; or 13.4.2 lawfully known to it before commencement of the Work or any preliminary work in connection with the Contract, and is not subject to a previous obligation of confidentiality binding that party; or 13.4.3 lawfully obtained by it from a third party which is free to divulge that Information; or 13.4.4 replicated by development independently carried out by or for it by an employee or other person without access to, or knowledge of, such Information; or 13.4.5 required to be disclosed by law or regulation (including the rules of the SEC in the United States of America), but only to the extent and for the purpose of such disclosure. 13.5 LCS acknowledges that it will have access to sensitive business information which would severely damage XX if the obligations specified in this Condition 13 are breached. LCS shall not give XX Background or XX Foreground Information in connection with the Work to any of its employees, agents or contractors unless the persons concerned have signed a separate agreement directly with XX in the format set out at Appendix H, and LCS has 30 days from the Commencement Date to do so with respect to such relevant persons as at the Commencement Date. 13.6 The provisions of this Condition 13 shall survive the expiry or termination of the Contract. 13.7 LCS shall abide by all XX and the XX as detailed in Appendix I. 13.8 LCS shall not without the express written permission of XX give access to any XX Background or XX Foreground Information to any agency staff or contract workers. 14. NOTICES Notices required under the Contract to be given in writing shall be delivered by hand, or facsimile transmission confirmed by pre-paid first class airmail, to the Commercial Representative of the party to whom the notice is sent at the address specified in the condition headed 'Change Control Procedure.' Notices delivered by hand shall be deemed to be given upon receipt, and notices sent by facsimile shall be deemed to be given upon transmission. 15. FORCE MAJEURE 15.1 Neither party is liable for delay or failure to perform any of its obligations under this Contract insofar as the performance of such obligation is prevented by a force majeure event. 15.2 Each party shall notify the other party of the occurrence of such a force majeure event, and use all reasonable endeavors to continue to perform its obligations hereunder for the duration of such force majeure event. However, if any such event prevents a party from performing all of its obligations hereunder for an unreasonable period, the other party may terminate this Contract by notice in writing. 15.3 For the purposes of this Contract, a force majeure event means any event which is beyond the reasonable control of the party liable to effect performance, and shall include but not be limited to acts of God, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, power failures or natural disasters, but excludes the performance or non-performance of any Relevant Contractors and/or early termination of their terms of engagement or reduction in the nature or scope of the services provided by them (the "Excluded Matters"); except that the Excluded Matters do not affect XX's rights under Condition 7. 16. ASSIGNMENT AND SUBCONTRACTING 16.1 LCS shall not without the permission in writing of XX assign or subcontract the whole or any part of the Contract. 16.2 At the option of LCS this Contract shall be transferred by novation to company Controlled by LCS, and the parties agree to execute such deeds or other documents as may be necessary to effect that novation provided that XX need not do so unless LCS delivers to XX a guarantee signed by LCS of the obligations of such company (in such form as XX may reasonably require). 17. BREACH 17.1 Subject to Condition 17.2, where one party (the "Defaulting Party") has committed a breach of this Contract (other than non-payment of amounts due under the Contract) or a tortious act or omission in connection with it, in each case which is capable of remedy (a "Default"), the other XX unless: 17.1.1 the Defaulting Party has been notified of the Default and been required to remedy it within 90 days of the date of the notice; and 17.1.2 the Default has not been remedied within the 90 days. 17.2 The restriction on the non-Defaulting Party from XX under Condition 17.1 shall apply and the non-Defaulting Party shall continue to perform its obligations under this Contract, only as long as the Defaulting Party has taken reasonable steps to remedy the Default within the notice period. 18. LCS NON-DEFAULT 18.1 XX acknowledges that LCS has incurred certain costs solely in connection with or for the performance of this Contract, which would, in the absence of this Condition 18, only be recovered if the Contract remains in force until XX; except for termination by either party under Condition 15 or by XX under Conditions 7.7, 19.2 or 19.5, the parties intend that, according to this Condition 18, LCS shall not suffer any financial disadvantage as a result of early termination of the Contract or suspension of its performance. 18.2 Whenever notice is given by either party to terminate this Contract, other than under Conditions 15 or 19.2 or by XX under Conditions 7.7 or 19.5 or by LCS under Condition 19.4, or the Contract terminates under Condition 11.7.2, XX shall within 15 days of being invoiced by LCS, pay the Termination Costs, and LCS shall as far as is reasonable, perform its obligations (if any) under the Contract throughout the notice period; provided that XX shall pay the amounts under Condition 4 which LCS shall be entitled to invoice during the notice period notwithstanding that LCS need render no performance at all or performance substantially different from that expected by XX at the Commencement Date. 18.3 Where this Contract terminates under Condition 11.7.2 or whenever notice is given by LCS to terminate the Contract under Conditions 19.2 or 19.4, XX shall (without affecting LCS's other rights) pay LCS, in addition to all outstanding payments an amount equal to: 18.3.1 the total of the monthly sums which would have been payable under Condition 4.1 over the 9 months following the date of LCS's notice or from that date until the expiry of the Contract, whichever is the shorter; and 18.3.2 the Termination Costs. 18.4 Whenever the performance by LCS is suspended or prevented for any period (under Condition 15 or otherwise), other than as a result of LCS's negligence (but save as provided in Condition 7) or willful default, XX shall continue to pay the relevant amounts under Condition 4 during the period in question, notwithstanding that Work is not or may not be performed during that period or may be performed in a manner substantially different from that expected by XX at the Commencement Date. 19. DURATION AND TERMINATION 19.1 The Contract shall commence on the Commencement Date and unless terminated in accordance with its terms shall continue until June 30, 1998 except that LCS is entitled to invoice XX under Condition 4.5 for the amount invoicable on or after XX under Condition 4.1.4, which shall be paid by XX accordingly. 19.2 Either party may at any time by notice in writing to the other terminate this Contract as from the date of service of the notice if: 19.2.1 the other party is unable to pay its debts or enters into liquidation (except for the purposes of an XX) or makes an arrangement with its creditors or has an XX or an administrator or similar officer appointed of all or any of its assets or takes or suffers to be taken any similar action in consequence of a debt or ceases or threatens to cease trading; or 19.2.2 the other party commits a material breach of this Contract (other than non-payment of amounts due under the Contract) which is not remedied within 90 days after the non-breaching party has given written notice requiring such breach to be remedied, provided that the obligations of the non-breaching party under this Contract remain to be performed only as long as the party in breach takes reasonable steps to remedy the breach. 19.3 Condition 19.2.2 does not apply to any breach of contract by LCS where Condition 7 applies. 19.4 LCS is entitled to terminate the Contract by notice in writing to XX where XX has failed without cause to pay any 2 consecutive monthly amounts due under the Contract within 30 days of the date of the second invoice. 19.5 Without prejudice to any other rights or remedies it may have, XX shall have the right to terminate the Contract if the ownership or Control of LCS is materially changed, by transferring Control to a competitor of XX, within 30 days of such change of Control. 19.6 If the contract between XX and a Relevant Contractor is terminated by either party to it on or before XX, then XX and LCS shall seek to agree the changes to this Contract under Conditions 5 or 6; provided that if such agreement is not reached within a reasonable time after the date of termination of the relevant contract, either XX or LCS can terminate this Contract by 9 months notice in writing to the other. 20. OTHER CONSEQUENCES OF TERMINATION 20.1 Termination or expiry of this Contract does not affect the rights and obligations of the parties which have accrued on or before termination or expiry, including the right to claim damages for breach of the Contract and payment of amounts due to LCS, including the Termination Costs. 20.2 Where LCS is entitled to terminate this Contract under Condition 19.2.2 on the grounds that XX has exceeded the scope of a licence under Condition 23.2 or Condition 19.4, then all licences granted to XX by LCS shall be suspended pending correction of the relevant breach by XX, in which case the licences will revive. 21. COMPETITION 21.1 Neither party shall at any time, without the prior written consent of the other, either during or for a period of six months from the termination of this Contract either on its own behalf or any other person, firm, company or organization: 21.1.1 directly or indirectly induce or seek to induce any person, firm or company who at any time during or at the time of the termination of this Contract are or were customers of or in the habit of dealing with the other and with whom the other has had dealings during the course of this Contract to remove their business from the other; or 21.1.2 directly or indirectly induce or seek to induce any employees of the other to leave the other's employment. 21.2 The provisions of Condition 21.1 shall survive the termination of the Contract. 22. XX INTELLECTUAL PROPERTY 22.1 All XX Background Information and any copies thereof and all Intellectual Property Rights therein shall remain the property of XX. LCS shall return the XX Background Information (except the Contract) to XX upon expiry or termination of the Contract, or earlier upon request by XX except if it would prevent the performance by LCS of its obligations in a timely manner. 22.2 Except as expressly set out in the Contract no assignment of or licence under any Intellectual Property Right or trade mark or service mark, whether registered or not, owned or controlled by XX is granted to LCS. 22.3 XX hereby grants LCS a non-exclusive licence to use and copy the XX Background Information for the purpose of or in connection with the Contract. 22.4 XX warrants to LCS that it has the right and power to grant the licences under the Contract. 22.5 The provisions of this Condition 22 shall survive the expiry or termination of the Contract. 23. LCS INTELLECTUAL PROPERTY 23.1 All Foreground Information and the LCS Background Information, any copies thereof and all Intellectual Property Rights therein shall remain the property of LCS. 23.2 Subject to Condition 20.2, LCS hereby grants from the Commencement Date to XX and its Affiliates an irrevocable, royalty free non-transferable: 23.2.1 non-exclusive licence to use, copy, modify and have modified and use as copied or modified the LCS Background Information and the LCS Foreground Information; and 23.2.2 perpetual exclusive licence to use, copy, modify and have modified and use as copied or modified the XX Foreground Information, in each case, for the internal purposes of their respective businesses. 23.3 LCS warrants to XX that it has the right and power to grant the above licences. 23.4 Except as expressly set out in the Contract, no assignment of or licence under any Intellectual Property Rights or trade mark or XX, whether registered or not, owned or controlled by LCS is granted to XX. 23.5 LCS shall defend or settle in its sole discretion all actions, claims and proceedings ("Claims"), that the LCS Background or the Foreground Information infringes Intellectual Property Rights of any third party. 23.6 Subject to Conditions 23.7 and 34.4, LCS shall indemnify XX in respect of any direct costs and damages (including reasonable legal fees) incurred or sustained by XX as a result of a breach of Condition 23.3. 23.7 Where XX seeks to be indemnified pursuant to Condition 23.6, the indemnity is conditional on XX: 23.7.1 giving notice to LCS of the Claim promptly; 23.7.2 LCS has full control over the conduct of the Claim; 23.7.3 XX must not make or suffer or permit to be made any admission of liability, nor act or omit to act or suffer or permit any act or omission to take place which would prejudice the ability of LCS to defend or settle the Claim; and 23.7.4 XX must give LCS all reasonable assistance in connection with the Claim. 23.8 In the event of any Claim, LCS shall at its own expense and option either: 23.8.1 secure a royalty free licence authorizing XX to continue use of the LCS Background and the Foreground Information and to exercise its other rights granted under the Contract in respect of such Information; or 23.8.2 modify or replace the Software, so as to meet the Marketing Database Design and the User Interface Design and avoid the claim of infringement and any injunction or court order. 23.9 The indemnity in Condition 23.6 shall not apply to Claims: 23.9.1 arising directly from LCS's use of or compliance with the XX Background Information or any other instructions of XX unless LCS ought to be aware of the risk of infringement; 23.9.2 relating to XX's use of the LCS Background or the Foreground Information in combination with other software or goods not supplied by LCS where such use is not contemplated by the Contract or otherwise agreed to by LCS, unless such infringement would have arisen independently of such combination; 23.9.3 arising from modifications to the Computer Platform or the Foreground Information made by XX or by third parties on behalf of XX, excluding modifications specified or recommended by LCS; or 23.9.4 attributable to a failure or refusal by XX to use a modified or replacement item supplied under Condition 23.8.2. 23.10 The provisions of this Condition 23 shall survive the expiry or termination of the Contract. 24. VIRUS PROTECTION 24.1 LCS shall virus check using XX supplied packages the Software prior to delivery to XX and shall remove any virus identified or re-deliver the Software without the virus. 24.2 If LCS fails to check the Software for viruses in breach of Condition 24.1 or fails to identify a virus which would have been identified had the test been run correctly, then LCS shall indemnify XX for any loss or damage caused by the virus. 25. INDEMNITY - GENERAL 25.1 Each party (the "Indemnifier") shall indemnify the other (the "Indemnitee"), without prejudice to any other rights or remedies available to the Indemnitee, against:- 25.1.1 all loss of or damage to any property belonging to the Indemnitee to the extent arising as a result of the negligence or willful acts or omissions of the Indemnifier, its employees, agents, or sub-contractors (or their employees or agents) in relation to the performance of the Contract; 25.1.2 all claims and proceedings, damages, costs and expenses arising or incurred in respect of: i. death or personal injury of any employee of the Indemnifier, its agents or sub-contractors (or their employees or agents) employed in or in connection with the performance of the Contract, except to the extent caused by the negligence or willful default of the Indemnitee; or ii. death or personal injury of any other person to the extent arising as a result of the negligence or willful acts or omissions of the Indemnifier, its employees, agents or sub-contractors (or their employees or agents) in relation to the performance of the Contract; or iii. loss of or damage to any property to the extent arising as a result of the negligence or willful acts or omissions of the Indemnifier, its employees, agents or sub-contractors (or their employees or agents) in relation to the performance of the Contract; 25.1.3 all claims and proceedings under XX in relation to the Work and all related damages, costs and expenses. 25.2 The provisions of this Condition 25 shall survive the expiry or termination of the Contract. 26. ELECTRONIC REPOSSESSION 26.1 Without prejudice to its other liabilities under the Contract, LCS shall indemnify XX against all claims, demands, damages, costs and expenses suffered by XX and all damage or loss to XX property arising from any Electronic Repossession. 26.2 For the purpose of this condition, "Electronic Repossession" shall mean any function (but excluding viruses) in the Software which prevents XX from continuing to use the Software. 27. XX PROPERTY 27.1 In respect of all XX Supplied Items and other property of XX in the possession or control of LCS, LCS shall: 27.1.1 keep them safe, in good condition and clearly marked as the property of XX; and 27.1.2 notify XX of any defect or deficiency in them within 14 days of receipt and realization; and 27.1.3 use them only as is required for the performance of the Contract and return them to XX when no longer required or requested by XX except if to do so would adversely affect LCS's ability to perform its obligations under the Contract in a timely fashion; and 27.1.4 if LCS (or any third party in possession of them) becomes insolvent, notify XX, inform any relevant official that they are the property of XX, and allow XX access to repossess them. 27.2 The provisions of this Condition 27 shall survive expiry or termination of the Contract. 28. WAIVER 28.1 No delay, neglect or forbearance on the part of either party in enforcing against the other any provision of the Contract shall be deemed to be a waiver or in any way prejudice any rights of the other under the Contract. 28.2 No waiver by either party shall be effective unless made in writing. 28.3 No waiver by either party of a breach of the Contract shall constitute a waiver of any subsequent breach. 29. ENFORCEABILITY The invalidity or unenforceability for any reason of any provision of the Contract shall not prejudice or affect the validity or enforceability of its other provisions. 30. HEADINGS AND INTERPRETATION The headings to these Conditions are for ease of reference only and shall not affect their interpretation, and references to the words "includes" or "including" are to be construed without prejudice to the generality or limitation to the preceding words. 31. ENTIRE AGREEMENT The Contract shall be the entire agreement between XX and LCS in respect of the subject matter of the Contract and no prior negotiations, representations, or agreements in relation to such subject matter shall have effect. Nothing in this Condition 31 affects the liability of either party for fraud. 32. LAW AND JURISDICTION The Contract shall be governed by XX law and subject to the non-exclusive jurisdiction of the XX courts. 33. ORDER OF PRECEDENCE To the extent which the following documents form part of or apply to the Contract, they shall in the case of conflict have the order of precedence in which they are listed below: 1. the Conditions of the Contract ` 2. the Appendices to these Conditions 34. LIMITATION OF LIABILITY 34.1 The following provisions of this Condition 34 set out the entire liability of each party to the other, including any liability for the acts and omissions of its employees, agents, and contractors in respect of: 34.1.1 any claim for an indemnity under this Contract; 34.1.2 any breach of its contractual obligations arising under this Contract; 34.1.3 any representation statement or tortious act or omission including negligence arising under or in connection with this Contract; and 34.1.4 any breach of statutory duty; any and all other liability is excluded; provided that nothing in this Contract affects the liability of either party to the other for death or personal injury or for fraud. 34.2 Anything falling within Condition 34.1 except non-payment by XX of the Contract Price or any part thereof shall for the purposes of this Condition 34 be known as an "Event of Default". 34.3 The total liability of each party to the other arising from or in connection with any Event of Default of that party shall be limited to the sum of US$2,000,000 per Event of Default and in no circumstances shall the total liability of that party for all Events of Defaults under this Contract exceed US$10,000,000. 34.4 In determining the extent or quantum of any liability of either party to the other no account shall be taken in any circumstances of any special, indirect, consequential or pure economic loss, including loss of XX, profits, goodwill, or loss of data, whether or not the party in question has been notified of the prospect of such loss or damage. 34.5 These Conditions set out all the express terms of this Contract concerning the quality, manner and time for performance of the Work and the quality of the LCS Background Information and the Foreground Information, and all implied conditions, warranties or undertakings (other than those relating to the title of any goods to be supplied as part of the Work) which would be incorporated in this Contract in the absence of this Condition 34.5 by reason of statute, common law or otherwise are excluded, including implied conditions, warranties or undertakings relating to merchantable or satisfactory quality or fitness for purpose of the LCS Background or the Foreground Information. 34.6 Neither party shall be liable to the other in respect of any Event of Default unless the recoverable amount in respect of that Event of Default exceeds XX and the other has served notice of the same within 1 year of the date the other became aware of the circumstances giving rise to the Event of Default or the date when it ought reasonably to have become so aware. 34.7 The provisions of this Clause 34: 34.7.1 are in addition to XX's liability for non-payment of the Contract Price or any part thereof; and 34.7.2 survive expiry or termination of the Contract. 35. COUNTERPARTS This Contract may be executed in two counterparts, both of which taken together constitute one single agreement between the parties. 36. NO THIRD PARTY BENEFICIARIES AND RELEVANT CONTRACTORS 36.1 This Contract has been made for the benefit of the parties to it only and is not intended to confer any legal rights or benefits on any third party. 36.2 For the avoidance of doubt, under no circumstances shall LCS be jointly or joint and severally liable with any Relevant Contractor for the supply of any goods or services to XX. AS WITNESS the hands of the duly authorized representatives of the parties have executed this Contract on the date stated above. SIGNED for and on behalf of XX in the presence of: By: XX Name: XX Title XX SIGNED for and on behalf of LCS INDUSTRIES, INC. in the presence of: By: /s/ Arnold J. Scheine Name: Arnold J. Scheine Title CEO & President -----END PRIVACY-ENHANCED MESSAGE-----