Human Capital Resources Software Solutions

Annual Software Service agreement

Annual Software Service Agreement and Exhibits annexed hereto (collectively, the “Agreement”) dated October 22, 2012, (the “Effective Date”) is between Human Capital Resources Software Solutions, a Delaware Corporation with its principal place of business located at 13400 Sutton Park Place, Suite 1102, Jacksonville, Fl 32224, (“HCRSS”) and Client, whose name, principal place of business, and jurisdiction of incorporation are set forth below (each, a “Party” and, collectively, the “Parties”).

In consideration of the mutual obligations assumed under this Agreement, HCRSS and Client agree to the terms and conditions attached to this Agreement and represent that this Agreement is executed by duly authorized representatives.

IN WITNESS WHEREOF, the Parties hereunto, intending to be legally bound, have executed this Agreement as of the date set forth.

Definitions

    1. “Client Data” means all data provided by Client including data generated through or modified by the Products.
    1. “HCRSS Technology” means the CompensationXL Product and the Intellectual Property Rights associated.
    1. “Documentation” means all documentation relating to the Products, whether in machine-readable or printed form, provided by HCRSS to Client, including any updates, revisions, New Versions, and supplements to the Documentation.
    1. “Enhancements” means any upgrades, modifications or enhancements to the Products that are distributed by HCRSS to Client in Support of the Products.
    1. “Intellectual Property Rights” means all copyrights, trade secret rights, trademark rights, patent rights and other intellectual property rights in and to the Products, or any portion thereof including, by way of example and not of limitation, the ideas, methodologies, methods of operation, processes, know-how, aesthetic aspects, sub-systems and modules included in the Products, the graphical user interfaces for the Products, and the look and feel of the Products.
    1. “Internal Use” means the use of the Products by Client for Client’s internal business purposes. Internal Use does not permit distribution or the provision of access to the Products for the use of any Third Party.  Internal use also excludes the use of the Products for the provision of any outsourcing, service bureau or other forms of services or on-line offerings.
    1. “License” means the license referred to in Section 3.1.
    1. “Minimum Service Fee” is as defined in Exhibit A.
    1. “Annual Service Fee” means the annual fee for the Services provided under this Agreement, in accordance with the payment terms defined in Exhibit A.
    1. “New Versions” means new versions of the Software and any related Documentation and Media as designated by HCRSS that may be offered by HCRSS to Client for License pursuant to this Agreement.
    1. “Number of Employees” means the number of active records in the employee master file provided by Client, including full-time and part-time employees as well as any contingent labor or contractors, or any other individual who may be providing services to Client, for whom compensation planning recommendations and/or approvals are being recorded in the Products.
    1. “Product Warranty” means the warranty set forth in Section 10.1
    1. “Products” means the Software and Documentation.
    1. “Software” means the software program(s) set forth in Exhibit A to this Agreement in object code, any Enhancements provided through Support and, as applicable, New Versions provided to Client under the License pursuant to this Agreement.
    1. “Support” means the support and maintenance services provided by HCRSS to Client in accordance with this Agreement.
    1. “Taxes” means any sales, use, excise, value-added, withholding taxes or other taxes based upon this Agreement, excluding taxes based on HCRSS’s net income.
    1. “Third Party” means a party other than HCRSS, Client and Client’s affiliated companies.
  1. Scope of Service
    1. HCRSS shall provide ongoing support for its proprietary Products and supported Third Party products. The Support to be provided as a part of this Agreement is described in Section 9.   The services to be provided by HCRSS (“Services”) shall consist of one vendor hosted production instance of HCRSS’s application consisting of: (i) the license provided in Section 3 below; (ii) professional services for initial implementation and configuration of the Software; (iii) upgrading the Software for all Enhancements (iv) providing Support and service levels in accordance with Section 9.  The Service includes all Third Party components which are essential to Client’s use of the Software, and certain Third Party integration software which the Client may deploy within its operations to develop and maintain integrations or manage business processes between the Software and other systems managed by Client or Third Party.  The Software shall process and make Client Data available to Client and its employees in accordance with this Agreement.
    1. HCRSS will provide to Client professional services associated with the implementation and integration of the Products pursuant to the Statement of Work attached hereto.
  1. License
    1. Subject to all the terms and conditions of this Agreement, HCRSS hereby grants to Client a temporary, personal, non-exclusive, and non-transferable License to enable internal use of the vendor hosted CompensationXL Product.  This License is for the Internal Use of the Products for the Number of Employees and for the period of time designated.  Client agrees that any change in the Number of Employees may result in a corresponding prospective change in the Annual Service  HCRSS agrees that Internal Use of the Products for a number of employees that exceeds the Number of Employees shall not constitute a breach of this Agreement or a violation of the terms of the License, provided that the Number of Employees then in effect was established in accordance with the applicable procedures for doing so as of the most recent measurement period. Client may not distribute or disclose the Products, or any portion thereof, by transfer, lease, loan or any other means, or make them available for use by others in any manner.  The resale of services based on this License, or the utilization of the Products as a component of services provided to a Third Party through a commercial arrangement are strictly prohibited. This License is an intellectual property license subject to 11 U.S.C. Section 365(n).
  1. Payment

4.1 Client shall pay HCRSS the Annual Service Fee, as set forth on the Order Form. Taxes may be excluded from such payments if the Client provides HCRSS with a valid certification indicating it is exempt from the payment of Taxes on this service, or by providing documentation acceptable to state and local taxing authorities that all required Taxes have been remitted for the duration of the Term. Client agrees to report any changes in the Number of Employees on an annual basis and to pay the appropriate corresponding Annual Service Fee for that Number of Employees, with the understanding that irrespective of the Number of Employees, the Annual Service Fee will not be less than the Minimum Service Fee defined on the Order Form.   In the event of a dispute regarding payments due from Client, HCRSS shall continue to provide the Services hereunder and the Parties shall negotiate in good faith the resolution of such dispute.

  1. Term
    1. This Agreement commences on the Effective Date and terminates two (2) years thereafter (the “Term”) unless extended by mutual written agreement or terminated earlier as provided in this Agreement. 
    1. Client shall have the right to extend this Agreement at the end of the Term (and at the end of each subsequent extension of the Term) upon written notice to HCRSS not less than 30 days prior to the expiration of such term.  Each extension of the Term shall, unless otherwise mutually agreed, be for a period of one (1) year on the same terms and conditions as provided herein, provided that HCRSS and Client shall mutually agree on any increase or decrease in the fees payable hereunder that are justified in light of then-current business conditions.  If the Parties are not able to mutually agree on any modified pricing, then Client shall continue to pay fees based on the foregoing Annual Fee Per Employee, Per Year, (as that term is used in Exhibit A) and the current Number of Employees as determined in accordance with Section 4.1, subject to the Minimum Service Fee, and HCRSS shall continue to provide the Services in accordance with this Agreement and the Parties shall continue to negotiate or otherwise collaborate in good faith to reach a resolution of such issue.
  1. Intellectual Property Rights
    1. The HCRSS Technology and any derivatives or improvements to any of the foregoing, shall be and remain at all times the exclusive property of HCRSS, and Client shall have no right, title or interest therein except as expressly provided in this Agreement. 
  1. Confidentiality
    1. For purposes hereof, “HCRSS Proprietary Information” shall mean the HCRSS Technology and any and all information, data and materials related thereto, and any other information, data and materials disclosed by HCRSS to Client pursuant to or in connection with this Agreement, provided that HCRSS Proprietary Information shall not include any such information that (i) is generally known to the public or in the trade, or becomes so generally known without breach of this Agreement by Client; (ii) is shown by written record to have been rightfully known to Client without an obligation of confidentiality to HCRSS prior to its disclosure to Client hereunder; or (iii) is disclosed to Client without restriction of confidentiality by a Third Party who is not in breach of an obligation of confidentiality to HCRSS  in making such disclosure. 
    1. Client acknowledges that the HCRSS Proprietary Information constitutes trade secrets and proprietary information of great value to HCRSS.  Client shall keep confidential the HCRSS Proprietary Information and all copies or physical embodiments thereof in its possession, through consistent implementation of security measures at least as protective as those used by Client to maintain the security of its own proprietary information of a similar nature and value and, in any event no less than a reasonable degree of care.
    1. For purposes hereof, “Client Proprietary Information” shall mean Client Data and any and all information, data and materials related thereto, and any other information, data and materials disclosed by Client pursuant to or in connection with this Agreement. 
    1. HCRSS shall not use, modify or disclose any Client Proprietary Information to any Third Party.  HCRSS shall keep confidential the Client Proprietary Information and all copies or physical embodiments thereof in its possession, through consistent implementation of security measures at least as protective as those used by HCRSS to maintain the security of its own proprietary information of a similar nature and value and, in any event no less than a reasonable degree of care.
    1. HCRSS will indemnify, defend and hold harmless Client to the extent any unauthorized access to or use of the Client Proprietary Information is caused by HCRSS’s actions or failure to act. 
    1. With respect to the Client Proprietary Information and the HCRSS Proprietary Information (collectively, the “Proprietary Information”), HCRSS and the Client (a) shall limit access to the Proprietary Information to those of their personnel who have a demonstrable need for such access in connection with use of the Products pursuant to this Agreement, and (b) shall take all reasonable precautions to safeguard the Proprietary Information consistent with the precautions taken to safeguard their own proprietary information of a similar nature.  Either Party may disclose the Proprietary Information of the other as required by law, but must give immediate notice to the other Party upon receipt of a demand to produce such Proprietary Information and in any case before such disclosure is made.
    1. Client shall not seek to reverse engineer, reverse assemble or decompile any part of the HCRSS Proprietary Information in an attempt to discover any of the proprietary algorithms, source code or techniques or other trade secrets of HCRSS embodied therein or used in the development thereof, and Client shall not permit any of its personnel or clients or any other person to do so.
  1. Infringement
    1. HCRSS shall, at its expense, defend any Third Party suit or claim alleging that Client’s Internal Use of the Product or its associated Documentation or training materials in accordance with this Agreement infringes a patent, copyright, trademark or trade secret right (a “Claim”), and shall indemnify Client against an award of damages and costs against Client pursuant to a court judgment based on a Claim, including Client’s attorneys’ fees related thereto, provided that Client: (a) notifies HCRSS in writing of the Claim within ten (10) days after Client receives notice thereof; (b) gives HCRSS sole authority to defend or settle the Claim; (c) provides HCRSS with all data, information and materials in Client’s control concerning the Claim;  and  (d) reasonably cooperates and assists HCRSS with defense of the Claim.
    1. If any Product becomes, or in HCRSS’s reasonable opinion is likely to become, the subject of a Claim then HCRSS shall, at its own cost, obtain the right for Client to continue Internal Use of the Product.
    1. HCRSS shall have no liability to Client under this Section 8 if any Claim is based upon the use of the Product: (a) in a modified state not authorized by HCRSS; or (b) in a manner other than as specified in the Documentation or for which it was designed, if such Claim would have been avoided without such use of the Product.  The foregoing states the entire liability of HCRSS for any infringement by the Product or the Intellectual Property Rights.
  1. Support
    1. During the Term of this Agreement, or any extension of the Term under Section 5.2, HCRSS shall provide Support in accordance with this Section 9. 

HCRSS will correct any malfunction, defect or non-conformity in the operation of the Software relative to the Documentation (each, a “Defect”) to enable the Software to substantially perform in accordance with the Documentation in effect as of the Effective Date as amended corresponding to the release of Enhancements.  Client shall report to HCRSS any Defects and HCRSS shall provide Support to correct such Defects. Client shall submit to HCRSS all relevant information and documentation in its possession, and shall provide reasonable technical and other assistance to assist HCRSS in correcting the Defect.  HCRSS will take commercially reasonable steps to ensure that delivery timeframes approximate: (1)Severity level one software defects which render the application un-usable or severely impaired, 24 hours. (2)Low impact software defects which may cause mild annoyance or require some manual work-around shall be resolved within 6 weeks.

    1. HCRSS shall not be obligated to provide Support to correct a Defect solely to the extent that such Defect is caused by use or configuration of the Products by Client or a Third Party in a manner inconsistent with the Documentation.  If HCRSS is reasonably capable of correcting such Defect, HCRSS may at the Client’s sole option correct the Defect and Client shall reimburse HCRSS for such correction at HCRSS’s then current hourly rates.  HCRSS shall discuss any such situation with Client and provide its best estimate of the cost of correcting any such Defect.
    2. HCRSS will provide telephone support, which includes general technical information and assistance with problem determination, isolation, verification, and resolution during the hours of 9:00 A.M. to 9:00 P.M. Eastern Time, excluding weekends and holidays.
    1. A maximum of two (2) named persons (as indicated on the help line access list provided from time-to-time by Client to HCRSS) trained on the installation and operation of the Products may have access to the HCRSS help line for problem resolution.  HCRSS agrees that Client may from time to time designate other persons (in addition to the maximum number specified above) that may have access to the HCRSS help line, but Client will use reasonable efforts to consolidate questions and requests for assistance.  In addition, Client agrees to designate one (1) individual who shall be Client’s representative with authority to make decisions on system configuration and similar matters.
  1. Warranties.
    1. HCRSS warrants that for the Term of this Agreement the Products shall substantially perform in accordance with the Documentation in effect as of the Effective Date as amended corresponding to release of Enhancements.  The Client’s exclusive remedies for breach of the Product Warranty are: (a) the Client may request Support from HCRSS, and (b) if the Support requested by the Client does not enable the Products to comply with the Product Warranty within a reasonable period of time, the Client may (i) seek direct damages for the affected Products subject to the limitations in Section 11 and (ii)  pursuant to Section 20.1, consider such failure to correct a breach of the Product Warranty to be a material breach and cause for termination of the Agreement.  HCRSS shall not be liable to remedy any claimed breach of the Product Warranty due to the acts or omissions of the Client or any Third Party.
    1. EXCEPT FOR THE LIMITED WARRANTY SET FORTH IN SECTION 10.1, THE PRODUCTS AND DOCUMENTATION ARE PROVIDED “AS-IS” AND “AS-AVAILABLE.”  THE EXPRESS LIMITED WARRANTIES IN THIS SECTION 10 ARE IN LIEU OF ALL OTHER WARRANTIES AND CONDITIONS EXPRESSED OR IMPLIED, CONTRACTUAL OR STATUTORY, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT. 
  1. Limitations of Liability
    1. IN NO EVENT SHALL HCRSS BE LIABLE FOR SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, REVENUES OR SAVINGS, EVEN IF HCRSS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE. 
    1. CLIENT ACKNOWLEDGES THAT THE LIMITATIONS ON LIABILITY IN THIS SECTION 11 ARE REASONABLE AND THAT The provisions of this Section 11 allocate the risks under this Agreement between HCRSS and CLIENT and the parties have relied upon the limitations set forth herein in determining whether to enter into this Agreement. THE REMEDIES PROVIDED TO CLIENT IN THIS AGREEMENT ARE EXCLUSIVE. 
  1. Assignment

Neither Party shall be permitted to assign this Agreement or any of its respective rights or obligations under this Agreement unless approved by the other Party in writing prior to such assignment, such approval to not be unreasonably withheld.  Permission shall not be required under the circumstance where all or substantially all of one of the Party’s assets have been acquired by another entity provided that the surviving entity must agree to abide by the terms, conditions and limitations of this Agreement.  Any assignment in contravention of this section shall be null and void.

  1. Waiver

No term or provision of this Agreement shall be deemed waived and no breach shall be deemed excused, unless such waiver is in writing and signed by the Party claimed to have waived.

  1. Governing Law and Dispute Resolution
    1. This Agreement is governed by and construed in all respects in accordance with the laws of the State of Delaware, U.S.A. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods is expressly excluded from application to this Agreement.   
    1. Client acknowledges and agrees that a breach or threatened breach of any of the terms and conditions of this Agreement related to the HCRSS Technology or HCRSS’s Proprietary Information and Intellectual Property Rights, including breaches or threatened breaches of Sections 3, 6, or 7 would cause HCRSS irreparable harm and injury that will be difficult to ascertain and will not be compensable by monetary damages, and, accordingly, HCRSS will, in addition to all other remedies available under this Agreement, at law or in equity, be entitled to seek immediate injunctive relief against such breach or threatened breach by Client without the necessity of posting a bond or other security.
    1. HCRSS acknowledges and agrees that a breach or threatened breach of any of the terms and conditions of this Agreement related to Client’s Proprietary Information, including breaches or threatened breaches of Sections 3, 6, or 7 would cause Client irreparable harm and injury that will be difficult to ascertain and will not be compensable by monetary damages, and, accordingly, Client will, in addition to all other remedies available under this Agreement, at law or in equity, be entitled to seek immediate injunctive relief against such breach or threatened breach by HCRSS without the necessity of posting a bond or other security.
  1. Independent Contractor

HCRSS is providing the Products, Support and Services under this Agreement as an independent contractor, and its personnel shall not be considered employees or agents of Client.

  1. Severability and Interpretation

If any provision of this Agreement is found to be unenforceable, such provision shall be deemed to be deleted or narrowly construed to such extent as is necessary to make it enforceable and this Agreement shall otherwise remain in full force and effect.  If an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of authorship of any of the provisions of this Agreement.

  1. Notices

All notices required or permitted under this Agreement, and all requests for approvals, consents and waivers must be delivered by a method providing for proof of delivery.  Any notice or request shall be deemed to have been given on the date of delivery.  Notices and requests must be delivered to the Parties at the addresses on the first page of this Agreement until a different address has been designated by notice to the other Party.

  1. Non-Solicitation of Employees

Neither Party shall directly, or indirectly through a Third Party, solicit the services or employment of any employee or agent of the other Party during the Term of this Agreement.  For purposes hereof, the use of non-targeted advertisements shall not be deemed to be a direct or indirect solicitation. 

  1. Termination
    1. Either Party may terminate this Agreement upon written notice to the other Party if the other Party materially breaches any obligation and fails to cure such breach (but only if such breach can be cured) within thirty (30) days after receiving notice.
    1. In the event the Client terminates this agreement without cause by means of a material breach by HCRSS, the balance of the fees for the contract term are due and payable to HCRSS.
    1. Termination of this Agreement does not affect any legal or equitable remedies available to either Party.  Unless otherwise provided in this Agreement, Sections 3 (LICENSE & OWNERSHIP RIGHTS), 4 (PAYMENTS), 7 (CONFIDENTIALITY), 8 (INDEMNITY), and 9 (LIMITATION OF LIABILITY) survive termination.
    1. Within fifteen (15) days of expiration or termination of this Agreement for any reason, (a) Client shall return to HCRSS all tangible portions of the Products provided by HCRSS, and (b) HCRSS shall deliver to Client all Client Proprietary Information in a digital media format specified by Client. The Parties will also return to one another, within thirty (30) days of a request, any Proprietary Information of the other Party, in whatever form or media to the other Party.
    1. In the event of expiration or termination of this Agreement for any reason, in addition to any other obligations of HCRSS hereunder, HCRSS shall provide Transition Assistance.  “Transition Assistance” means (i) HCRSS will perform all functions and services necessary to accomplish without any material interruption the successful transition of the Services and any Client Data to Client or Client’s designee, (ii) HCRSS will assist in transferring any necessary Third Party software to Client or Client’s designee, (iii) HCRSS will facilitate a direct relationship between any of HCRSS’s subcontractors and Client or Client’s designee, and (iv) HCRSS will provide any other reasonable assistance as requested by Client. 
    1. In the event that this Agreement is terminated by Client due to breach by HCRSS, then HCRSS shall, in addition to the Transition Assistance and any other legal or equitable remedies available to Client, pay for or reimburse Client for the cost of such migration and transition.
  1. Entire Agreement

This Agreement and the Exhibits listed below and included herein by reference, together with any addenda signed by the Parties, constitute the entire agreement between HCRSS and Client with respect to the Products, Support, and other subject matter of this Agreement, and may only be modified by a written amendment or addendum signed by both HCRSS and Client.  No employee, agent, or other representative of either HCRSS or Client has authority to bind the other with regard to any statement, representation, warranty, or other expression unless it is specifically included within the express terms of this Agreement or a written addendum signed by both HCRSS and Client.  All purchase orders, prior agreements, representations, statements, proposals, negotiations, understandings, and undertakings with respect to the subject matter of this Agreement are superseded by this Agreement.  To the extent of any conflicts between this Agreement and its Exhibits, this Agreement shall take precedence.

SYSTEM AVAILABILITY UNDER THE ANNUAL SOFTWARE SERVICE AGREEMENT

System Availability

HCRSS represents and warrants that, except for Planned Maintenance, the Core Services shall be available not less than 99.9% of each Measurement Period (“System Availability Standard”). 

Failure to comply with the System Availability Standard during a Measurement Period means that HCRSS will grant a credit to Client equal to five (5) percent of the Service Fee for the applicable Measurement Period, provided that, Client shall not be entitled to any credit to the extent that any failure to meet the System Availability Standard arises due to Client’s failure to meet its obligations hereunder.  Such credits may be applied to future invoices and do not represent a refund of any kind.

If the System Availability Standard is not met for any two months during the Term (whether consecutive or nonconsecutive months), Client may terminate this Agreement without any fees or charges except for fees or charges already accrued before the termination. 

HCRSS shall notify Client of all additional Planned Maintenance at least twenty-four (24) hours in advance. HCRSS shall immediately notify Client of any Outage, which is expected to last more than thirty (30) minutes.

Client Responsibilities

Client shall continue to have all responsibilities set forth in the Agreement and, in addition, shall further ensure that: (i) all data and other materials provided to HCRSS for purposes of providing the ASP Service shall be accurate and ready for processing, and (ii) it makes available such resources as are reasonably necessary to support HCRSS’s provision of ASP Service.

Defined Terms

“Core Services” means the Web-based application interface that will be accessed through a Client URL.

“HCRSS Measurement Center” means the locations from which Monitoring Systems will initiate Test and Measurement Requests.

“Measurement Period” means peak time during one calendar month during the Term.

“Monitoring System” means a software system that simulates Client requesting access to the Core Services by attempting to access a Client URL, waiting for a response and then creating a record of whether the Core Services responded to the Client request.

“Outage(s)” means a period of time (excluding Planned Maintenance) during which Core Services are not responsive to a Test and Measurement Request initiated by a HCRSS Measurement Center.

“Planned Maintenance” means intentional downtime for the Core Services when non-critical maintenance will be conducted.  Planned Maintenance is normally scheduled currently Mondays and Thursdays between 9:00 p.m. and 1:00 a.m. ET.  Planned Maintenance is subject to the provisions of Section 9 of this Agreement.

”System Availability” means the percentage of time during of a Measurement Period, excluding Planned Maintenance that has been scheduled and for which HCRSS has timely notified Client in accordance with the Agreement, in which the Core Services respond to a Test and Measurement Request initiated by a HCRSS Measurement Center

”Test and Measurement Request” means an automated request for the Core Services initiated by the Monitoring System from a HCRSS Measurement Center.

EXHIBIT 2

REQUIRED TERMS
1. This Agreement is between Developer and the Customer.

2. Developer, and not ADP or its vendors, is solely responsible for providing, maintaining, supporting
and updating the Application and its associated services. Developer shall provide product support for
the Application. Customer may access support via the following means:[ ]

3. DEVELOPER HEREBY DISCLAIMS ON BEHALF OF ADP AND APPDIRECT ANY EXPRESS,
IMPLIED OR STATUTORY REPRESENTATIONS OR WARRANTIES, AND ALL OTHER
WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE,
NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.

4. Customer’s and End Users’ sole and exclusive remedies shall be against Developer. ADP and
AppDirect shall have no liability or obligation to Customers or End Users.

5. Customers and End Users will not (i) decompile or reverse engineer the ADP Marketplace or take any
other action to discover the source code or underlying ideas or algorithm of any components thereof,
(ii) copy the ADP Marketplace, (iii) post, publish or create derivative works based on the ADP
Marketplace, or (iv) remove any copyright notice, trade or service marks, brand names and the like
from the ADP Marketplace or related documentation.

6. ADP and AppDirect are third party beneficiaries of the above described terms and each are entitled to
enforce such terms as if they each were a party to this agreement.

7. Subject to the remainder of this Section 7, Developer shall indemnify, defend and hold harmless
Customer and its employees from and against any and all suits, actions, damages, costs, losses,
expenses (including reasonable outside attorneys’ fees) and other liabilities (each, a “Claim”) arising
from or in connection with allegations that the Application or any related services violates or infringes
any intellectual property right of a third party, invades or infringes any right of privacy, or right of
publicity, of any person or entity. Developer shall, at its sole expense, conduct the defense of any
such Claim and all negotiations for its settlement or compromise; provided, however, that: (a) no
settlement or compromise of such a Claim shall be entered into or agreed to without Customer’s prior
approval (not to be unreasonably withheld or delayed): and (b) Customer shall have the right to
participate, at its own expense, in the defense and/or settlement of any such Claim to the extent
necessary to protect its own interests.

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