Software Development Agreement

This Software Development Agreement (“Agreement”), and the policies, terms and procedures outlined herein, has been set down in order to establish the mutual expectations of Habanero Computing Solutions, Inc, a Missouri Corporation (“Developer” or “Habanero”) and “Client” (as defined in any executed Statement of Work or Services Agreement) regarding the design and development of customized software by Developer for Client. This Agreement applies to all design, development, implementation and support performed by Developer for Client.

This Agreement is entered into after full investigation with neither party relying upon any non-written statement or representation made by the other party not embodied in this Agreement, and there are no other agreements or understandings, verbal or written, changing or modifying the terms. No waiver, change, amendment or discharge of any term or condition hereof on the part of Developer shall be of any force or effect unless made in writing, attached to this agreement, and signed by a duly authorized officer or agent of the Developer and Client.

In consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, Developer and Client agree as follows:

Developer Responsibilities

Developer will design, develop, deliver and install software code (the “Software”) in accordance with the Statement of Work attached as Exhibit A to this Agreement. All services will be performed by Developer in accordance with the terms and conditions of this Agreement. Developer will use its best efforts to undertake and complete all services under this Agreement on a timely basis after the Effective Date of this Agreement, as specified in the Statement of Work.

Project Management 

Developer and Client shall each be responsible for the management of the project and each will appoint a Project Manager (or primary / single point of contact) who will together share responsibility to:

•    Coordinate information sharing between Developer consultants and Client staff
•    Verify that necessary project tasks have been completed, either by Developer consultants or Client staff
•    Provide logistical support to help overcome unforeseen project complications
•    Prepare deliverable task lists
•    Break task lists down to individual task lists and assign tasks accordingly
•    Routinely contact the project team, update all task lists, and redistribute updated task lists
•    Organize and file project documents
•    Participate in the development of project plans, tasks, and deadlines
•    Meet with project members regularly to receive status updates
•    Prepare agendas for project status meetings
•    Prepare project scopes 
•    Prepare Change Orders for Client approval
•    Assist  in preparing functional and technical specification documents as required 
•    Prepare status reports for the project team and decision-makers including status and recommendations
•    Collect consultant recommendations (issue/resolution/control comments)
•    Notify all parties in writing of projected estimate overruns prior to overrunning
•    Review outstanding trouble logs and verify schedule and completion by consultants

Client Responsibilities

Client will assign a person to act as the single point of contact and project liaison with Developer. As needed according to approved scope, Client will provide Developer remote access to Clients’ network for the purposes of installing the Software and will provide Developer with details regarding Client’s network topology, workstation configurations, output devices, and mission-critical software applications. If Developer personnel are require to perform services onsite at Client’s facilities, Client will provide Developer with internet access and a reasonable work area and work tools.

Software Development

Upon the execution of this Agreement, Developer will commence work upon and diligently proceed with the development of the Software in conformity with the Statement of Work. Developer will commit and utilize sufficient resources to complete development of the Software within the time frame forth in the Statement of Work. Developer will provide Client with detailed information regarding the status of the services performed under this Agreement and estimated completion date on a regular basis (no less frequently than bi-monthly) and upon Client’s request.

Developer will perform its services under this Agreement in a professional and workmanlike manner; adhering to applicable written standards where available and using the best business and technology skills of Developer where written standards are not available. Developer will act in good faith in performing its services and in all other dealings with Client.

Developer will ensure that all services are provided by personnel skilled in the development of computer software applications and systems. Developer will make its personnel available for meetings with Client as reasonably requested by Client and in accordance with the number of meetings anticipated and factored into the approved project cost (meetings scheduled in excess of the budgeted meeting time will be billed on a time-and-materials basis). Developer will perform its obligations (and cause its personnel to perform services) under this Agreement in a professional and workmanlike manner and in accordance with the usual and customary standards of accuracy, proficiency and care for software professionals.

Subject to the terms and conditions of this Agreement, Developer will determine the method, details, and means of performing the services under this Agreement. Developer has the right to engage subcontractors to perform any of the services hereunder; provided that any person so engaged will be subject to the terms and conditions of this Agreement. 

Change Orders

If at any time during the term of this Agreement either party should desire to recommend an addition, modification or change to the Software, or to add additional projects to the terms of this Agreement, the parties shall agree in writing as to the modifications to be made and the cost and timetable for such modifications (a “Change Order”). Notwithstanding the foregoing, Developer agrees that Client shall have final authority to accept or reject any proposed addition, modification or change made by Developer, and to direct reasonable additions, modifications or changes to the Software. 

Client acknowledges that Change Orders require work effort in addition to previously agreed project deliverables and timeframes.   These will increase the budgeted costs and the required time to complete the project.   Except if otherwise agreed to in writing, in an avoid undue disruptions to prior project work flow plans, Client agrees that any Change Orders, extensions to the project scope or other kinds of alteration to the initial project plan will automatically become scheduled in an additional, secondary phase and executed after the conclusion of the original project as defined in the prior project plans. 

Any Change Order(s), while approached with distinct deliverables, timelines and scope, shall amend and become part of the Statements of Work and shall be invoiced to Client and such invoice shall be paid upon receipt. 

Deliverables

Upon completion of the development Software, Developer will deliver and install the Software on Developer’s computer(s) for acceptance testing. Developer will provide Client remote access to Developer’s network for the purposes of installing the Software.

Upon delivery and installation of the Software for acceptance testing, Client shall have thirty (30) days to perform acceptance tests to determine whether the Software design and programming conform to the specifications as set forth in the Statement of Work. Client may (i) accept the Software as delivered (“Acceptance”) or (ii) reject the Software by reason of a reproducible error, problem, defect or non-conformance with the specifications as set forth in the Statement of Work. Client will notify Developer of any such rejection promptly in writing and will provide all available information in reasonable detail to enable Developer to correct the Software. If Client does not accept or reject the Software within thirty (30) days after delivery and installation of the Software for acceptance testing, the Software will be automatically deemed accepted.

Upon notification of rejection as specified above, Developer will correct the Software without additional charge to Client and reinstall the Software on Developer’s computer(s), in which case the procedure for the review and Acceptance of such the Software shall be repeated until Acceptance of the Software. 

Upon Acceptance of the Software by Client, and payment in full for all amounts due, Developer will deliver to Client the final source code, object code, executable code and all associated documentation (including setup/compile instructions and all technical documentation required for modification and/or maintenance of the Software and all operator and user documentation) for the Software (the “Final Product”) on a CD / DVD, or other electronic medium. 

Third Party Software

In the event that Developer integrates any Third Party Software (as hereinafter defined) into the Software, Developer will so advise Client and will take such steps as are reasonably necessary to preserve any warranty rights with respect thereto. Developer will provide Client with copies of all relevant license and warranty documents for any such Third Party Software. Developer will not integrate any Third Party Software into the Software unless Developer has an appropriate license to do so from the owner of the Third Party Software. “Third Party Software” means software which is owned by a company or individual other than Developer and Client, and is generally available to the public under published license terms.

Payment

Client shall pay Developer the amount outlined in the Statement of Work for the services performed under this Agreement according to the payment terms outlined in such Statement of Work.   If no payment schedule is otherwise defined payment is to be made as follows:

(a) Fifty Percent (50%) upon the Effective Date of this Agreement and prior to the commencement of any work;

(b) Twenty-Five Percent (25%) at the half-point of the project timeline as outlined in the Statement of Work; 

(c) Twenty Percent (20%) upon deployment of the Software to Developer’s servers for acceptance testing; and

(d) Five-Percent (5%) upon delivery of the Final Product

Payment for any services beyond the scope of this Agreement shall be based on Developer’s standard billing rate in effect at the time of such services which, unless otherwise agreed in writing, shall be $125.00 per hour.

Client acknowledges that it has certain responsibilities under this Agreement which may include, but not be limited to, creating content, entering content into the website, approving final design and creating custom content.   In the event that Developer has completed substantially all its work and the project is unable to be completed due to requirements or approval of Client (or any other party but Developer) the project shall be deemed complete and all payments shall be due and payable. 

Term and Termination

This Agreement will be effective when signed by both parties (the “Effective Date”) and will remain in effect until Developer delivers the Final Product, unless sooner terminated pursuant to this Section. Without limiting the effect of the foregoing, the parties acknowledge that certain terms and conditions in this Agreement shall survive the termination of this Agreement, as noted herein. 

In the event Client defaults in the payment of any amount due to Developer under this Agreement and does not cure such default within 5 days after the date of the notice of default, then Developer has the right, by giving written notice to Client, to terminate this Agreement and all services under this Agreement as of a date specified in such notice of termination, and Client will be obligated to pay Developer for all services satisfactorily rendered through the effective date of such termination.

Client agrees and acknowledges that any late payment may result in a work stoppage causing a delay in the project timeline.  This delay may be substantially longer than the number of days the payment was late due to Developer’s reassignment of consultants to other projects.   If there is such a work stoppage, Client agrees and acknowledges that the same consultants that had previously been assigned to the project might not be reassigned to the project and that bringing new consultants up-to-speed on the project may cause additional delays.   Any delays caused by a work-stoppage shall constitute an agreed extension of the project timeline as outlined in the Statement of Work. 

Notices

Any notice required or permitted to be given under this Agreement shall be in writing and shall be sent by personal delivery, certified United States mail or any nationwide overnight delivery service and deemed given and effective upon delivery to the primary business address or any effective legal address of the party.  If notice is sent to Developer it must include a copy to Phil Ruben, Levenfeld Pearstein, 400 Skokie Blvd, Suite 700, Northbrook, IL 60062. 

Confidentiality and Non-Solicitation

The parties may disclose to one another certain information which is considered by the disclosing party to be proprietary or confidential information (the “Confidential Information”). Confidential Information is defined as any information, communication or data, in any form, including, but not limited to, oral, written, graphic or electromagnetic forms, models or samples, which the disclosing party identifies as confidential or which is of such a nature that the receiving party should reasonably understand that the disclosing party desires to protect such information, communication or data against unrestricted disclosure or use, including, without limitation, business information, customer information, financial and marketing data and other information as may be disclosed to Developer by accessing Client’s network and data. 

All Confidential Information shall remain the sole property of the disclosing party and its confidentiality shall be maintained and protected by the receiving party with the same degree of care as the receiving party uses for its own confidential and proprietary information. The receiving party shall not use the Confidential Information of the other party except as necessary to fulfill its obligations under the Agreement, nor shall it disclose such Confidential Information to any third party without the prior written consent of the disclosing party. 

The restrictions on the use or disclosure of any Confidential Information shall not apply to any Confidential Information: (i) after it has become generally available to the public without breach of the Agreement by the receiving party; (ii) that is rightfully in the receiving party’s possession prior to disclosure to it by the disclosing party; (iii) that is independently developed by the receiving party; (iv) that is rightfully received by the receiving party from a third party without a duty of confidentiality; or (v) that is disclosed under operation of law. The provisions of this section shall survive termination of this Agreement.

Client agrees that, during the time it is working with Developer and for two (2) years immediately following the termination of its work with Developer, for any reason whatsoever, Client will not, directly or indirectly, solicit, induce or recommend any employee, consultant or agent of Developer to leave the employ of Developer or hire any employee, consultant or agent of Developer.

Intellectual Property

Developer retains full and exclusive rights and ownership in the Software and all related intellectual or proprietary rights therein and, upon and not before full payment of all sums due Developer, hereby grants Company a non-exclusive, fully-paid license to use, copy and modify the Software in association with Company’s Business. In the course of performing services under this Agreement, Developer may use enhancements, processes, methods, designs and know-how, whether or not copyrightable or patentable, that Developer conceived during the course of other engagements. In addition, Developer may independently develop enhancements, processes, methods, designs or know-how during the term of this engagement and Company acknowledges that Developer may use such enhancements, processes, methods, designs or know-how in its business operations with other customers provided that such usage does not utilize any of Company’s Confidential Information. Company agrees not to reverse engineer, decrypt, extract, disassemble or decompile the Software, or permit anyone else to do so, except as required by applicable law or court order. The provisions of this section shall survive termination of this Agreement.

Warranties and Representations

Developer warrants that the Software will be developed to the agreed upon specifications and will be free from defects in function and design. Specifically, Developer warrants that the Software will be fully functional as defined by the Statement of Work.  Developer will repair any defect in the Software which renders it impossible to use; i.e., crashing, or abending due to errors, or design that prevents Client access to features as defined in Statement of Work. In no event will Developer be responsible for providing software features or functionality that were not identified in the Statement of Work, or in any subsequent written Change Order or amendments. No software design features or functions are warranted that must be assumed or extrapolated from the Statement of Work, no matter how obvious. There will be no charge for the correction of inconsistencies or bugs found in the Software for a period of thirty (30) calendar days following Acceptance of the Software; thereafter, any inconsistencies or bugs found in the Software will be corrected by Developer at Client’s request, but Client will be billed based on Developer’ standard Client Billing Policies in effect at the time of such services.

DEVELOPER MAKES NO WARRANTIES REGARDING THE DESIGN, FUNCTION OR OPERATION OF ANY THIRD PARTY SOFTWARE. DEVELOPER DOES NOT WARRANTEE FEATURES OR PERFORMANCE OF HARDWARE OR SOFTWARE THAT IS NOT PROVIDED BY IT. DEVELOPER DOES NOT WARRANTEE THE COMPATIBILITY OR PROPER PERFORMANCE OF ANY PIECE OF HARDWARE OR SOFTWARE WITH ANY OTHER PIECE OF HARDWARE OR SOFTWARE EXCEPT WHERE SPECIFICALLY IDENTIFIED IN WRITING. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, INCLUDED BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AS TO THE FUNCTIONALITY OR CAPABILITIES OF ANY SOFTWARE AND HARDWARE PRODUCTS RECOMMENDED BY DEVELOPER. ALL WARRANTIES PROVIDED BY DEVELOPER WILL BECOME NULL AND VOID THE SOFTWARE HAS BEEN ALTERED, RECONFIGURED, REVERSE-ENGINEERED, OR TAMPERED WITH IN ANY MANNER.

Developer represents and warrants that it will access Client’s network only for the purposes of performing its services under this Agreement, and that it will not intentionally cause disruption or damage to Client’s network as a result of such access. Client will hold Developer harmless in the event damages are incurred due to Developer’ use of Client’s network, unless Developer was negligent in such use or such use was intended to causes such damages. In any event, Client agrees that damages will be limited to the amount paid to Developer under this Agreement. 

Developer further represents and warrants that it has sufficient right, title, interest or permission in and to content and materials incorporated in the Software for Client to make use of the Software as contemplated by this Agreement. Developer also represents and warrants that, to the best of its knowledge, the Software and the Final Product will not infringe any copyrights, patents, trade secrets, trademarks, service marks, rights of privacy or publicity of any third party, nor will they to Developer’ knowledge defame or libel any person or entity. Developer further represents and warrants that the Software will be of original development by Developer and will be developed expressly for fulfillment of this Agreement, and that, upon and not before full payment of all sums due Developer, Client shall have all right, title and interest therein free and clear of any claims of Developer or any third parties. 

Developer hereby agrees to defend, indemnify, and hold harmless Client, its principals, agents, officers, directors and employees from and against any and all claims arising from or related to Developer’ breach of any of the foregoing representations and warranties. Additionally, in the event that the Software may be held to infringe a third-party proprietary right, and that the use of the Software is enjoined, Developer, at its sole option and expense shall: (1) procure for Client the right to continue using the Software or portion thereof; or (2) replace the same with non-infringing software or equivalent functions and efficiency. The provisions of this section shall survive termination of this Agreement.

Miscellaneous

Neither party shall be liable to the other for any act of God, delay or failure to perform any of the services set forth in the Statement of Work or obligations set forth in this Agreement due to causes beyond its control. Performance times shall be considered extended for a period of time equivalent to the time lost because of such delay. This Agreement shall be governed by and construed solely and exclusively in accordance with the laws of the State of Missouri, without reference to its conflicts of law principles. Client and Developer hereby consent to the jurisdictions of the United States District Court for the Eastern District of Missouri or in the Circuit Court of St. Louis County, Missouri, and irrevocably waive any objections thereto, including without limitation, on the basis of improper venue or forum non conveniens. In addition to any other relief awarded, Client agrees it shall be responsible for interest on all unpaid balances and all costs of collection incurred by Habanero including but not limited to its reasonable attorneys’ fees and costs. Client agrees that, in the event there is an unpaid balance due Developer, whether disputed or otherwise, it shall not have the right to use the Software, in whole or in part, until such dispute is resolved. Client agrees that the responsibilities it is to perform as part of this Agreement are special and unique, that damages cannot compensate in the event of a violation of the above covenants and agreements (including but not limited to payment of all amounts due under this Agreement or any Statement of Work or Services Agreement) and that injunctive relief shall be essential for the protection of the Developer and its successors and assigns. Accordingly, Employee agrees and consents that, in the event it shall violate or breach any of said covenants and responsibilities (including payment of all sums due Developer), Developer shall be entitled to obtain (and Client hereby consents thereto) injunctive relief against Client, without bond, but upon due notice, in addition to such further or other relief as may appertain at equity or law. Obtainment of such an injunction by Developer shall not be considered an election of remedies or a waiver of any right by Developer to assert any other remedies Developer has at law or in equity.  Nothing in this Agreement shall be construed to make the parties partners, joint venturers, representatives or agents of each other, nor shall either party so represent to any third person. If any of the provisions of this Agreement is or becomes illegal, unenforceable, or invalid (in whole or in part for any reason), the remainder of this Agreement shall remain in full force and effect without being impaired or invalidated in any way. Nothing in this Agreement is intended to, or shall create any third-party beneficiaries, whether intended or incidental and neither party shall make any representations to the contrary. The provisions of this section shall survive termination of this Agreement.

Exhibit A
Statement of Work

The Project Requirements Document (PRD) or Implementation Proposal (and all change orders and additional requests for services) as executed by both Client and Habanero shall serve as this Exhibit