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EXHIBIT 10.2
This Base Agreement ("BASE AGREEMENT")
dated as of August 11, 2004 ("EFFECTIVE
DATE"), between International Business
Machines Corporation ("BUYER") and First
Virtual Communications ("SUPPLIER"),
establishes the basis for a multinational
procurement relationship under which
Supplier will provide Buyer the
Deliverables and Services described in
Statements of Work ("SOW") issued under
this Base Agreement. Deliverables and
Services acquired by Buyer or Customer on
or after the Effective Date will be covered
by this Base Agreement. This Base
Agreement will remain in effect until
terminated.
1.0 DEFINITIONS
All definitions set forth in this Base
Agreement apply to their singular and
plural forms, as the context may require.
All references to "SECTION" refer to
sections in this Base Agreement. Unless
otherwise expressly noted, "I/INCLUDING"
means "including without limitation."
"H/HEREIN," "HEREUNDER," "HEREOF," and
similar expressions refer to this Base
Agreement. Buyer or Supplier are
sometimes referred to herein as a "PARTY"
and collectively as "PARTIES."
"AFFILIATES" means entities that control,
are controlled by, or are under common
control with, a party to this Base
Agreement.
"AGREEMENT" means this Base Agreement and
any relevant Statements of Work
("SOW"), Work Authorizations ("WA"), and
other attachments or appendices
specifically referenced in this Base
Agreement.
"BUSINESS PARTNER AGREEMENT" means an
agreement executed between Buyer and
Supplier to promote, market, and support
certain products and services.
"CUSTOMER" means Buyer's customer.
"DELIVERABLES" means items that Supplier
prepares for, or provides to Buyer or
Customer, pursuant to a SOW. Deliverables
consist of Program Products, Developed
Works, Preexisting Materials and Tools.
"DEVELOPED WORKS" (i) means all work
product (including object and source code
of software) and Inventions developed
pursuant to this Base Agreement as
described in a SOW, and (ii) does not
include (x) Preexisting Materials, Tools,
Program Products or (y) other items
specifically excluded from the definition of
"Developed Works" in a SOW.
"ELECTRONIC SELF-HELP" means a process
where Supplier electronically disables,
removes, or otherwise prevents the use of
its software product without the
Buyer's or Buyer's Customer's cooperation
or consent. Electronic Self-Help could
be done through electronic or other means
(for example: remotely through "back
doors" or hidden entrances in the software
or through hidden shut-down commands
in the software that can be activated by
phone or in other ways).
"EXTERNALS" means any pictorial, graphic,
audiovisual works, reports or data
generated by execution of code and any
programming interfaces, languages or
protocols implemented in the code to enable
interaction with other computer
programs or end users. Externals do not
include the code that implements them.
Form Title: Software; Services Engagement
Agreement
Form Release: 05/01
Form Owner: Global Procurement
Revisions: 3/04
Page 1 of 14
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"INVENTIONS" means ideas, designs,
concepts, techniques, inventions, discoveries
or improvements, whether or not patentable,
conceived or reduced to practice by
Supplier Personnel in performance of this
Base Agreement.
"PARTICIPATION AGREEMENT" or "PA" means an
agreement signed by one or more
Affiliates which incorporates by reference
the terms and conditions in this Base
Agreement, any relevant SOW, and other
attachments or appendices specifically
referenced in the PA.
"PERSONNEL" means agents, employees or
subcontractors engaged or appointed by
Buyer or Supplier.
"PREEXISTING MATERIALS" means items
including their Externals, contained within
a Deliverable, in which the copyrights are
owned by a third party or that
Supplier prepared or had prepared outside
the scope of this Base Agreement.
Preexisting Materials exclude all Program
Products and Tools, but may include
material that is created by the use of
Tools.
"PRICES" means the agreed upon payment and
currency for Deliverables and
Services, including all applicable fees,
payment terms and schedules, payment
amounts and taxes, all as specified in the
relevant SOW and/or WA.
"PROGRAM PRODUCTS" means Supplier's
commercially available software and the
documentation required to install, support,
use, and maintain it.
"SERVICES" means work that Supplier
performs for Buyer as described in a SOW.
"STATEMENT OF WORK" or "SOW" means any
document that:
1. identifies itself as a statement of
work;
2. is signed by both parties;
3. incorporates by reference the terms and
conditions of this Base Agreement;
and
4. describes the Deliverables, Services and
Prices, including any requirements,
specifications or schedules.
"TAXES" means any and all applicable taxes,
charges, fees, levies or other
assessments imposed or collected by any
governmental entity worldwide or any
political subdivision thereof and however
designated or levied on sales of
Deliverables or Services, or sales, use,
transfer, goods and services or value
added tax or any other duties or fees
related to any payment made by Buyer to
Supplier for Deliverables and/or Service
provided by Supplier to Buyer under or
pursuant to this Base Agreement; exclusive,
however, of taxes imposed upon the
net income or capital of Supplier or taxes
in lieu of such net income taxes or
such other taxes which are to be borne by
the Supplier under law. Supplier shall
also bear sole responsibility for all
taxes, assessments, or other levies on its
own leased or purchased property, equipment
or software.
"TOOLS" means software that is not
commercially available, and its Externals,
required for the development, maintenance
or implementation of a software
Deliverable other than a Program
Product.
"WORK AUTHORIZATION" or "WA" means Buyer's
authorization in either electronic or
tangible form for Supplier to conduct
transactions under this Base Agreement in
accordance with the applicable SOW (i.e., a
purchase order, bill of lading, or
other Buyer designated document). A SOW is
a WA only if designated as such in
writing by Buyer and it is agreed to and
signed by Supplier.
2.0 STATEMENT OF WORK
Supplier will provide Deliverables and
Services as specified in the relevant SOW
only when specified in a WA. Supplier will
begin work only after Supplier signs
and sends Buyer a WA, which had been signed
by Buyer. Buyer or Supplier may
request changes to a SOW. Supplier will
submit to Buyer the impact of such
requested changes in terms of Pricing,
delivery, schedule and other factors.
Changes requested by Supplier and accepted
by Buyer will be specified in an
amended SOW signed by both
Form Title: Software; Services Engagement
Agreement
Form Release: 05/01
Form Owner: Global Procurement
Revisions: 3/04
Page 2 of 14
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parties. Changes requested by Buyer and
accepted by Supplier shall be set forth
in a WA document signed by both
parties.
3.0 PRICING
Supplier will provide Deliverables and
Services to Buyer for the Prices. The
Prices for Deliverables and Services
specified in a SOW and/or WA and accepted
by Buyer plus the payment of applicable
Taxes will be the only amount due to
Supplier from Buyer. The relevant SOW or WA
shall contain Prices for each
country receiving Deliverables and Services
under this Base Agreement. Supplier
is not entitled to payment under this Base
Agreement for activities also covered
by a Business Partner Agreement with
Buyer.
4.0 TAXES
Supplier's invoices shall state applicable
Taxes owed by the Buyer, if any, by
Tax jurisdiction and with a proper
breakdown between taxable and non-taxable
Deliverables and Services. Supplier shall
remit such Tax payments to the
appropriate jurisdiction. Supplier agrees
to use all commercially reasonable
efforts to properly calculate any
applicable Taxes at the time of invoice.
Supplier and Buyer agree to cooperate to
minimize any applicable Taxes,
including reasonable notice and cooperation
in connection with any audit. Any
incremental Taxes shall be Supplier's
responsibility. If Buyer provides
certification of an exemption from Tax or
reduced rate of Tax imposed by an
applicable taxing authority, then Supplier
shall not invoice for nor pay over
any such Tax unless and until the
applicable taxing authority assesses such Tax,
at which time Supplier shall invoice and
Buyer shall pay any such Tax that is
legally owed.
Buyer shall withhold Taxes, if required
under the law to be withheld on payments
made to Supplier hereunder and shall be
required to remit to Supplier only the
net proceeds thereof. Buyer shall remit the
Taxes withheld to the appropriate
government authority and agrees to provide
Supplier in a timely manner with
properly executed documentation or other
information or receipts or certificates
evidencing Buyers payment of any such
withholding tax.
Supplier will indemnify Buyer from any
claims by any jurisdiction relating to
Taxes paid by Buyer to Supplier; and for
any penalties, fines, additions to tax
or interest thereon imposed on Buyer, as a
result of Supplier's failure to
timely remit the Tax payment to the
appropriate taxing jurisdiction. Supplier
also shall indemnify Buyer for any claims
made by a taxing jurisdiction for
penalties, fines, additions to tax and the
amount of interest thereon imposed
with respect to Supplier's failure to
invoice Buyer for the correct amount of
Tax.
5.0 PAYMENTS AND ACCEPTANCE
5.1 PAYMENTS AND ACCEPTANCE TERMS
Terms for payment will be specified in the
relevant SOW and/or WA. Payment of
invoices will not be deemed acceptance of
Deliverables or Services, but rather
such Deliverables or Services will be
subject to inspection, test, acceptance or
rejection in accordance with the acceptance
or completion criteria as specified
in the relevant SOW and/or WA. As to be
specified in a SOW or WA, Buyer may, at
its option, either reject Deliverables or
Services that do not comply with the
acceptance or completion criteria for a
refund, or require Supplier, upon
Buyer's written instruction, to repair or
replace such
Form Title: Software; Services Engagement
Agreement
Form Release: 05/01
Form Owner: Global Procurement
Revisions: 3/04
Page
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Deliverables or re-perform such Service,
without charge and in a timely manner.
Buyer reserves all rights available to it
under law or equity.
Unless otherwise provided by local law
without the possibility of contractual
waiver or limitation, Supplier will submit
invoices, corrected invoices, or
other such claims for reimbursement, to
Buyer no later than (1) year following
the date of acceptance of Deliverables or
the satisfactory completion of
Services. Exceptions must be specifically
authorized by Buyer.
5.2 OUTSOURCING LICENSE
In the event Buyer provides outsourcing
services to licensees of a Program
Product, Buyer will not owe Supplier an
extra fee for access to or assignment of
a license to such Program Product or for
transfer of the applicable Program
Product to a Buyer computer system which is
of like configuration as the
computer system for which the Program
Product was licensed. The foregoing is
subject to Buyer providing Supplier notice
of such Program Product to be managed
by Buyer.
For those Program Products acquired
directly by Buyer from Supplier, Buyer shall
be free to continue to use such Program
Products in support of its business
needs, including in support of the
provision of Services to Buyer's Customers,
at no additional fee, subject to the
continued compliance with the terms of the
Agreement. Buyer shall have the right to
assign the license it has acquired from
Supplier under this Section 5.2 to its
Customer at no additional cost, provided
that Buyer gives Supplier thirty (30) days
prior written notice of its intent to
assign such rights, and provided further
that Buyer's Customer signs Supplier's
license, and/or such other contractual
document as may be reasonably required
for such Program Product support.
6.0 ELECTRONIC COMMERCE
To the extent permitted by local law, the
parties may conduct transactions using
an electronic commerce approach under which
the parties may electronically
transmit and receive legally binding
purchase and sale obligations
("DOCUMENTS"), including electronic credit
entries transmitted by Buyer to the
Supplier account specified in the relevant
SOW and/or WA. The parties may enter
into a separate agreement governing the
transmission of such electronic
transactions and associated
responsibilities of the parties.
7.0 WARRANTIES
7.1 ONGOING WARRANTIES
Supplier makes the following ongoing
representations and warranties:
1. it has the right to enter into this Base
Agreement and its performance of
this Base Agreement will comply, at its own
expense, with the terms of any
contract, obligation, including any between
Supplier and its end-users; or any
law, regulation or ordinance to which it is
or becomes subject;
2. it is incorporated or organized as a
partnership;
3. no claim, lien, or action exists or is
threatened against Supplier that would
interfere with Buyer's rights under this
Base Agreement;
4. Deliverables and Services do not
infringe any privacy, publicity, reputation
or intellectual property right of a third
party;
5. Deliverables and Services will conform
to the warranties, specifications and
requirements in this Base Agreement for one
(1) year from the date of each
Deliverable's or Service's acceptance
pursuant to the applicable SOW or WA,
except that if there is a conflict between
the warranties in this Base
Form Title: Software; Services Engagement
Agreement
Form Release: 05/01
Form Owner: Global Procurement
Revisions: 3/04
Page 4 of 14
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Agreement and Supplier's standard warranty
for Program Products, then Supplier's
standard warranty for Program Products
shall apply unless otherwise expressly
set forth in a SOW or WA;
6. it will not engage in Electronic
Self-Help;
7. Deliverables are safe for use in that
they are consistent with the
warranties, specifications and requirements
in this Agreement;
8. Supplier has exercised all commercially
reasonable efforts using current
technology to ensure Deliverables do not
contain harmful code;
9. Services will be performed using
reasonable care and skill and in accordance
with the relevant SOW and/or WA;
10. Deliverables and Services which
interact in any capacity with monetary data
are euro ready such that when used in
accordance with their associated
documentation they are capable of correctly
processing monetary data in the euro
denomination and respecting the Euro
currency formatting conventions (including
the euro sign) provided that products and
systems not provided by Supplier are
capable of interacting with Supplier's Euro
ready Deliverables and Services;
11. it is knowledgeable about, and is and
will remain in full compliance with,
all export and import laws, regulations,
orders, and policies which are
applicable to this Agreement (including
securing all necessary clearance
requirements, export and import licenses
and exemptions from, and making all
proper filings with appropriate
governmental bodies and/or disclosures relating
to the release or transfer of technology
and software to non U.S. nationals in
the U.S., or outside the U.S., release or
transfer of technology and software
having U.S. content or derived from
U.S.-origin software or technology); it is
knowledgeable about applicable supply chain
security recommendations issued by
applicable governments and industry
standards organizations and will make all
commercially reasonable efforts to comply
with such recommendations;
12. it will not export, directly or
indirectly, any technology, software or
commodities of U.S. origin or having U.S.
content provided by Buyer or their
direct product to any of the countries or
to nationals of those countries,
wherever located, listed in U.S. Export
Administration Regulations, as modified
from time to time, unless authorized by
appropriate government license or
regulations, and
13. it will not use, disclose, or transfer
across borders any
information that is processed for Buyer
that may identify an individual
(personal data), except to the extent
necessary to perform under this Base
Agreement or otherwise authorized by such
individual, Supplier or applicable
law.
7.2 STANDARD WARRANTIES
(A) If Buyer markets Program Products,
Services and/or Deliverables
(collectively, the "Products") to the
Customer under Supplier's brand, then
Buyer may pass Supplier's standard warranty
for such Products through to the
Customer. The Customer may deal directly
with Supplier under such warranty, and,
if Supplier's standard warranty for Program
Products is more favorable than the
warranties in this Agreement, Supplier's
standard warranty for Program Products
will apply to such Products.
(B) If Buyer markets Products to the
Customer under Buyer's or its Affiliate's
brand, then: (i) Supplier's warranty is to
the Buyer only, (ii) Buyer may not
pass Supplier's standard warranty for
Program Products through to the Customer,
(iii) Customer shall have no warranty claim
or recourse against Supplier, and
(iv) Buyer shall be responsible for all
warranty claims or services.
(C) THE WARRANTIES SET FORTH IN SECTION 7.1
AND 7.2 ARE IN LIEU OF ALL OTHER
WARRANTIES OR REPRESENTATIONS, WHETHER
EXPRESS, IMPLIED,
Form Title: Software; Services Engagement
Agreement
Form Release: 05/01
Form Owner: Global Procurement
Revisions: 3/04
Page 5 of 14
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STATUTORY OR OTHERWISE,INCLUDING THOSE
WARRANTIES OR CONDITIONS OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7.3 WARRANTY REDEMPTION
Sub
