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Exhibit 10.2
 

 
 
 
Licensed & Developed Works Agreement
Statement of Work
 
 
Base Agreement #4900PC0033
 
SOW# 4906FL0032

This Statement of Work (“SOW”) # 4906FL0032 adopts and incorporates by reference
the terms and conditions of Licensed and Developed Works Agreement #
4900PC0033/PDSC-99-1146 (“Base Agreement”) between International Business
Machines (“Buyer”) and Pacific Decision Sciences Corporation (“Supplier”). This
SOW is effective beginning on 1 May 2006 and will remain in effect until
terminated. Transactions performed under this SOW will be conducted in
accordance with and be subject to the terms and conditions of this SOW, the Base
Agreement, and any applicable Work Authorizations (“WAs”). This SOW is not a WA.
 
This SOW supersedes and replaces SOW # 4900PC0034/PDSC-99-9198 dated March 31,
1999 and all amendments thereto.
 
1.0   Scope Of Work
Under the terms of SOW 4906FL0029, Buyer licensed from Supplier a computer
software program known as PDSC Service Management System, Version: 7.4 (Base
Software) and all PDSC Service Modules currently installed at Buyer, including
RF and Web Interfaces. This SOW describes the Services that will be provided by
Supplier in support of implementing the Licensed Works into the SCM Project.
 
2.0   Definitions
The following definitions are applicable to this SOW and are in addition to or
in place of, the definitions listed in Section 1.0 of the Base Agreement:
 
Strategic Call Management Application– (hereinafter “SCM”) means web-based Call
Center application to support Buyer’s Global Service Delivery Process (“GSDP”)
by improving customer service, reducing the dependency on multiple legacy
environments, consolidating systems where appropriate, and enabling business
changes to be introduced and delivered quickly on a global basis. The solution
will introduce a service oriented architecture utilizing Buyer and Supplier
services components.
 
3.0   Description Of Deliverables And Services
 
3.1      Supplier personnel, working in conjunction with Buyer personnel, will
be provided to support the implementation of the SCM Project.
 
Buyer will supply project management and administration, testing, and a
percentage of programming support while Supplier will provide programmers and
system architects that will transfer knowledge of Supplier’s Licensed Works and
Modules to Buyer’s personnel to help build self sufficiency and skill balance
within Buyer’s personnel. Supplier personnel will provide professional services
and support to Buyer in the areas of design, development, testing, maintenance,
and training on the Licensed Works and Developed Works.
 
SCM project implementation is divided into three releases.
 
 
 
 
•
Release 0
 
•
Release 0.5
 
•
Release 1.0

 
An External Design Document (“EDD”) will be produced for each SCM release that
defines the functionality that will be built and delivered for each release,
along with the deployment dates for each release.
 
SCM Project Implementation Support Fee
Buyer will commit to utilize a minimum of ten (10) personnel from Supplier.
Additional resources may be added at the request of Buyer for the duration of
the following development stages:
 
 
 
 
•
Customization Identification,
 
•
External Design creation,
 
•
Internal Design,
 
•
Coding, System Test support
 
•
Production Implementation.

 

 
 
 
Licensed and Developed Works Agreement Statement
          Page 1 of 7
of Work (LDWA_SOW)
 

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Licensed & Developed Works Agreement
Statement of Work
 
 
 
Base Agreement #4900PC0033
 
SOW# 4906FL0032

 
Buyer requests that the following Supplier personnel be assigned, by name, to
the SCM project implementation effort described herein: David Dorret, David
Englund, John Musgrave, Mike King, Matt Deguzman, Liz Dorrett, Rajesh Amenon,
Sonny Vo. Buyer reserves the right to reject the assignment of any individual
Supplier may assign to this SOW for any reason.
 
It is estimated that these Supplier personnel will be required for 12 to 18
months from the Effective Date of this SOW for SCM implementation. During this
timeframe, and at Buyer’s discretion for future efforts, the ten (10) committed
personnel resources under this contract may be used for any other projects
involving use of the Licensed Works within Buyer’s organization.
 
The fee for each Supplier resource (person) provided here under is * per month
per person.
 
All Supplier resources will submit weekly timesheets to Buyer’s project managers
for the various projects they are working on. The timesheets will include: Name,
Project(s) worked on, Date range of timesheet, Hours worked by day, and Total
hours for week. Travel by all Supplier resources for Buyer’s projects will be
governed by Section 6.2 of this SOW and must be approved by Buyer prior to
travel taking place. Supplier will submit all receipts to Buyer for approval
prior to invoicing for travel expenses.
 
4.0   Supplier’s Responsibilities
4.1 In addition to delivering Deliverables and Services on schedule, Supplier
will:
 
 
 
 
•
participate in progress reviews, as requested by Buyer, to demonstrate
Supplier’s performance of its obligations;
 
•
maintain records to verify authorship of Licensed Works and Developed Works for
four (4) years after the termination or expiration of this SOW. On request,
Supplier will deliver or otherwise make available this information in a form
specified by Buyer;
 
•
as part of Supplier’s importation requirements, provide to Buyer on the
commercial invoice:
1. the Harmonized Tariff Code of the importing country for every Product; and
2. an invoice description that provides enough detail to verify the categorical
classification of every Product.
 
•
for all Licensed Works, supply Buyer with a report outlining the current version
numbers and anticipated cessation of support dates for that Software. This
report must be provided on a biannual basis or more frequently if required by
Buyer

 
4.2   Supplier’s Use of Subcontractors
Supplier may subcontract Services to be performed hereunder. Notwithstanding
this subsection, Supplier’s use of subcontractors will not relieve Supplier of
the responsibility for the subcontractor’s performance, and Supplier’s
obligations and responsibilities assumed under this Agreement will be made
equally applicable to subcontractors. Buyer reserves the right to reject
Supplier’s use of a subcontractor in performance of this Agreement for any
reason.
 
4.3   Third Party Code Warranty
Supplier represents and warrants on an ongoing basis that, before entering into
this SOW, Supplier has disclosed to Buyer in writing the existence of any third
party code, including without limitation open source code and freeware, (“Third
Party Code”) that is included in or is provided in connection with the
Deliverables and that Supplier and the Deliverables are in compliance with all
licensing agreements applicable to such Third Party Code. Supplier further
represents and warrants on an ongoing basis that, 1) before including any Third
Party Code in any modifications, new releases, or new versions of the
Deliverables under this SOW, Supplier will disclose to Buyer in writing the
existence of such Third Party Code and 2) modified Deliverables or new releases
or new versions of the Deliverables including Third Party Code will be in
compliance with all licensing agreements applicable to such Third Party Code.
Supplier will not provide to Buyer any Deliverables or modifications to or new
releases or versions of Deliverables, that include Third Party Code, unless
Buyer has approved the inclusion of such Third Party Code.
 
* Confidential Treatment Requested
 
 
 
Licensed and Developed Works Agreement Statement
          Page 2 of 7
of Work (LDWA_SOW)
 

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Licensed & Developed Works Agreement
Statement of Work
 
 
 
Base Agreement #4900PC0033
 
SOW# 4906FL0032

 
5.0   Buyer’s Responsibilities
 
 
5.1
Buyer will provide project management and other project resources required to
successfully deliver each of the SCM releases

 
5.2     Acceptance Testing
5.2.1     Acceptance Testing of Developed Works
Buyer may commence acceptance testing, and perform such tests as Buyer deems
appropriate to determine if:
a. the Developed Works meet the specifications described in the EDD;
b. the Developed Works execute repetitively within the environment defined by
Buyer; and
c. Buyer can successfully execute to completion all functional and system test
scenarios conducted by Buyer. Buyer’s testing does not relieve Supplier of its
obligations under this Agreement.
 
5.2.2     Error Correction and Acceptance
In the event Buyer encounters any errors in the Developed Works during such
testing, Buyer will notify Supplier and may provide Supplier with the test
results and other available documentation of the errors. Notwithstanding
anything that may be construed to the contrary, Buyer is under no obligation to
identify any errors or to provide Supplier with notice of any errors. Within 30
days from Buyer’s notification of errors, Supplier will correct all such errors
and resubmit the Developed Works to Buyer. Buyer will then restart its
acceptance testing of the Developed Works. Upon Buyer’s successful completion of
its acceptance testing, Buyer will provide notice to Supplier of its acceptance
of the Developed Works. Acceptance of the Developed Works by Buyer does not
relieve Supplier of any of its responsibilities under the Agreement, including
but not limited to warranty responsibility, applicable quality requirements,
infringement or product liability.
 
5.2.3     Waiver of Acceptance Testing
Buyer may, at its sole discretion, waive requirements for its acceptance testing
of the Developed Works. Any such waiver must be in writing and signed by Buyer.
Buyer’s testing does not relieve Supplier of its obligations under this
Agreement. Buyer has no obligation to identify errors.
 
6.0   Payments
6.1     Payment Terms
The terms of payment are net 60 days either after receipt of Supplier’s valid
invoice for Services.
 
6.2    Travel Expense Guidelines
Buyer will reimburse Supplier for the following travel expenses only, provided
they are incurred in the performance of this Agreement and with Buyer’s prior
written approval: (i) tolls, parking fees, taxis, buses or auto rentals fees for
autos rented from a Buyer designated rental company; (ii) personal automobile
use under the applicable automobile allowance plan, excluding normal
commutation; (iii) air transportation at the economy, tourist or coach class
rate for the most direct route of a scheduled airline; (iv) reasonable lodging
charges commensurate with the average rates charged for the immediate area, not
to exceed $125.00 per day; (v) reasonable and actual meal expenses up to $35.00
per day; (vi) necessary business calls made on Buyer’s behalf; (vii) reasonable
tipping; (viii) reasonable valet and laundry charges if a trip extends beyond
four (4) days. All reservations made by Supplier must be made through Buyer’s
designated travel agency as specified by the Buyer Travel Expense Guidelines.
Any exception to the Buyer Travel Expense Guidelines must be approved by Buyer
prior to travel. Supplier must submit an invoice listing all travel expenses,
and all applicable receipts for lodging, airline travel, rental cars or any
other reimbursable expenditures to the Technical Coordinator listed in this SOW.
Buyer will not reimburse Supplier for personal expenses.
 
7.0 Communications
All communications between the parties will be carried out through the following
designated coordinators. All notices required in writing under this Agreement
will be made to the appropriate contact listed below at the following addresses
and will be effective upon actual receipt. Notices may be transmitted
electronically, by registered or certified mail, or courier. All notices, with
the exception of legal notices, may also be provided by facsimile.
 
 
 
 
Licensed and Developed Works Agreement Statement
          Page 3 of 7
of Work (LDWA_SOW)
 

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Licensed & Developed Works Agreement
Statement of Work
 
 
Base Agreement #4900PC0033
 
SOW# 4906FL0032

 
 
 
 
 
 
 
 
Business Coordinators
 
 
 
 
 
FOR SUPPLIER
 
FOR BUYER
 
 
 
Name
 
Mike Feder
 
Name
 
Mark Carey
 
Title
 
President
 
Title
 
SCM Project Executive
 
Address
 
400 Royal Palm Way
 
Address
 
3039 Cornwallis Rd
 
 
Suite 410
 
 
RTP, NC 27709
 
 
Palm Beach, FL 33480
 
 
 
 
 
Phone
 
561-805-8028
 
Phone
 
919-543-3540
 
Fax
 
 
Fax
 
919-486-2768
 
E-mail
 
mfeder@adsx.com
 
E-mail
 
mcarey@us.ibm.com
 
 
 
 
 
 
 
 
 
Legal Coordinators
 
 
 
 
 
FOR SUPPLIER
 
FOR BUYER
 
 
 
Name
 
Michael Krawitz
 
Name
 
Ron Leviner
 
Title
 
Executive VP, General Counsel
 
Title
 
Staff Attorney
 
Address
 
400 Royal Palm Way
 
Address
 
294 ROUTE 100 SOMERS,
 
 
Suite 410
 
 
 
NY 10589
 
 
Palm Beach, FL 33480
 
 
 
 
 
Phone
 
561-805-8005
 
Phone
 
914-766-4562
 
Fax
 
 
Fax
 
(Fax notice shall be valid only when verbal confirmation of receipt is
obtained.)
 
E-mail
 
mkrawitz@adsx.com
 
E-mail
 
rleviner@us.ibm.com
 
 
 
 
 
 
 
 
 
Technical Coordinators
 
 
 
 
 
FOR SUPPLIER
 
FOR BUYER
 
 
 
Name
 
David Dorret
 
Name
 
David Nusbaum
 
Title
 
Chief Technology Officer
 
Title
 
SCM Architect
 
Address
 
180 South Prospect
 
Address
 
3605 HWY 52 N
 
 
Suite 250
 
 
 
ROCHESTER MN 55901
 
 
Tustin, CA 92780
 
 
 
 
Phone
 
(714) 832-2200 ext 52
 
Phone
 
507-286-6323
 
Fax
 
 
Fax
 
507-253-0389
 
E-mail
 
david.dorret@PDSC.COM
 
E-mail
 
nusbaum@us.ibm.com
 

 
8.0   On Premises Guidelines
Supplier will ensure that Supplier Personnel assigned to work on Buyer’s
premises will comply with this Section
 
8.1 Access to Premises
Supplier will:
 
 
1.
to the extent permitted by local law, ensure that Supplier Personnel assigned to
work on Buyer’s premises will participate in a pre employment criminal
background check covering the counties in which the person was employed or
resided for the past seven years (or longer as required by State legislation),
and inform Buyer of any negative findings;
2.
maintain a current and complete list of the persons’ names and social security
numbers;
3.
obtain for each person a valid identification badge from Buyer and ensure that
it is displayed to gain access to and while on Buyer’s premises (it is Buyer’s
policy to deactivate any such badge if not used in ninety days);
4.
maintain a signed acknowledgment that each person will comply with Buyer’s
Safety & Security Guidelines;

 

 
 
 
Licensed and Developed Works Agreement Statement
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Licensed & Developed Works Agreement
Statement of Work
 
 
Base Agreement #4900PC0033
 
SOW# 4906FL0032

 
 
5.
ensure that each person with regular access to Buyer’s premises complies with
all parking restrictions and with vehicle registration requirements if any;
6.
inform Buyer if a former employee of Buyer will be assigned work under this
Agreement, such assignment subject to Buyer approval;
7.
at Buyer’s request, remove a person from Buyer’s premises and not reassign such
person to work on Buyer’s premises (Buyer is not required to provide a reason
for such request); and
8.
notify Buyer immediately upon completion or termination of any assignment and
return Buyer’s identification badge.

Upon Buyer’s request, Supplier will provide documentation to verify compliance
with this Subsection.
 
8.2   General Business Activity Restrictions
Supplier will ensure that Supplier Personnel assigned to work on Buyer’s
premises:
 
 
1.
will not conduct any non-Buyer related business activities (such as interviews,
hirings, dismissals or personal solicitations) on Buyer’s premises;
2.
will not conduct Supplier’s Personnel training on Buyer’s premises, except for
on-the-job training;
3.
will not attempt to participate in Buyer benefit plans or activities;
4.
will not send or receive non-Buyer related mail through Buyer’s mail systems;
and
5.
will not sell, advertise or market any products or distribute printed, written
or graphic materials on Buyer’s premises without Buyer’s written permission.

 
8.3   Buyer’s Safety and Security Guidelines
Supplier will ensure that Supplier Personnel assigned to work on Buyer’s
premises:
 
 
1.
do not bring weapons of any kind onto Buyer’s premises;
2.
do not manufacture, sell, distribute, possess, use or be under the influence of
controlled substances (for non-medical reasons) or alcoholic beverages while on
Buyer’s premises;
3.
do not have in their possession hazardous materials of any kind on Buyer’s
premises without Buyer’s authorization;
4.
acknowledge that all persons, property, and vehicles entering or leaving Buyer’s
premises are subject to search; and
5.
remain in authorized areas only (limited to the work locations, cafeterias, rest
rooms and, in the event of a medical emergency, Buyer’s medical facilities).

Supplier will promptly notify Buyer of any accident or security incidents
involving loss of or misuse or damage to Buyer’s intellectual or physical
assets; physical altercations; assaults; or harassment and provide Buyer with a
copy of any accident or incident report involving the above. Supplier must
coordinate with Buyer access to Buyer’s premises during non-regular working
hours.
 
8.4   Asset Control
In the event Supplier Personnel has access to information, information assets,
supplies or other property, including property owned by third parties but
provided to Supplier Personnel by Buyer (“Buyer Assets”), Supplier Personnel:
 
 
1.
will not remove Buyer Assets from Buyer’s premises without Buyer’s
authorization;
2.
will use Buyer Assets only for purposes of this Agreement and reimburse Buyer
for any unauthorized use;
3.
will only connect with, interact with or use programs, tools or routines that
Buyer agrees are needed to provide Services;
4.
will not share or disclose user identifiers, passwords, cipher keys or computer
dial port telephone numbers; and
5.
in the event the Buyer Assets are confidential, will not copy, disclose or leave
such assets unsecured or unattended.
Buyer may periodically audit Supplier’s data residing on Buyer Assets.

 
8.5   Supervision of Supplier’s Personnel
Suppliers will provide consistent and effective supervision of its Personnel
provided under this Agreement, at no additional cost to Buyer. Consistent and
effective supervision shall include regular interaction and communication with
Supplier’s Personnel either in person or through other effective means.
Supplier’s supervisor shall be responsible for exercising full supervisory
authority over all day-to-day employment relationship decisions relating to
Supplier’s Personnel, including those decisions relating to: wages, hours, terms
and conditions of employment,
 
 
 
Licensed and Developed Works Agreement Statement
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Licensed & Developed Works Agreement
Statement of Work
 
 
 
Base Agreement #4900PC0033
 
SOW# 4906FL0032

 
hiring, discipline, performance evaluations, termination, counseling and
scheduling. Supplier’s supervisors responsible for each work location will be
responsible to know that work location’s planned holiday (and other closing)
schedules and the impacts all such schedules have on Supplier’s Personnel.
Supplier will conduct orientation sessions with its Personnel before placement
on an assignment with Buyer, during which orientation such Personnel will be
told who their supervisor is and how that supervisor can be contacted. Supplier
will, from time to time, ensure that all of its Personnel working under this
Agreement continue to be aware of this information. Supplier shall also be
responsible for training its Personnel that any employment related issues should
be brought forward in the first instance to Supplier and not Buyer. Where such
issues relate to actions which are alleged to have been taken by Buyer or
Buyer’s Personnel, Supplier will notify Buyer immediately in order that
appropriate investigative action can be taken. Notwithstanding any other
language or agreement to the contrary, Buyer will not, and Supplier agrees that
Buyer has no responsibility to approve any Supplier Personnel’s time sheets. If
Buyer should review, sign and/or submit Supplier Personnel’s timesheets, whether
manually or electronically, as part of Buyer’s billing verification processes,
the parties acknowledge and agree that such review, signature and/or submittal
shall in no way constitute concurrence or approval of such timesheets, nor
create any other commitment or obligation on the part of Buyer to Supplier or
Supplier Personnel.
 
9.0 Additional Provisions
The following are additional provisions that modify the referenced Sections of
the Base Agreement as follows:
 
Section 1.0 – Definitions– Add the following definitions:
“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).
 
“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 Services provided by Supplier to Buyer under or
pursuant to this Agreement; exclusive, however, of any taxes imposed upon the
net income or capital of Supplier, any taxes in lieu of such net income taxes
and any other taxes which are to be borne by Supplier under law.
 
Section 7.0 – Ongoing Warranties– Add the following ongoing representations and
warranties:
Supplier makes the following ongoing representations and warranties:
 
 
 
 
•
Supplier will not engage in Electronic Self-Help;
 
•
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);
 
•
Supplier is knowledgeable with, and is and will remain in full compliance with
all applicable export and import laws, regulations, orders, and policies
(including, but not limited to, 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
with applicable supply chain security recommendations issued by applicable
governments and industry standards organizations and will make best efforts to
comply with such recommendations;
 
•
Unless authorized by applicable government license or regulation, including but
not limited to any U.S. authorization, Supplier will not directly or indirectly
export or reexport, at any time, any technical information, technology,
software, or other commodity furnished or developed under this, or any other,
agreement between the parties, or any other product that is developed or
produced from or using Buyer’s technical information, technology, software, or
other commodity provided under this Agreement to any

 
 
 
Licensed and Developed Works Agreement Statement
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Licensed & Developed Works Agreement
Statement of Work
 
 
 
Base Agreement #4900PC0033
 
SOW# 4906FL0032

 
 
 
 
 
prohibited country (including release of such technical information, technology,
software, or other commodity to nationals, wherever they may be located, of any
prohibited country) as specified in applicable export, embargo, and sanctions
regulations;
 
•
Supplier 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 Agreement; and
 
•
Supplier will comply with all applicable data privacy laws and regulations, will
implement and maintain appropriate technical and other protections for the
Personal Data, will report any breaches of protection of Personal Data, and will
cooperate fully with Buyer’s requests for access to, correction of, and
destruction of Personal Data in Supplier’s possession.

 
Section 11.0 – Limitation of Liability – Add the following:
In no event will either party be liable for the respective actions or omissions
of its Affiliates under this Agreement.
 
Supplier acknowledges and agrees that all WA’s or PA’s issued by Buyer’s
Affiliate(s) are independent agreements between Supplier or Supplier Affiliate
and the Buyer Affiliate. Buyer shall not be liable to Supplier or Supplier
Affiliate(s) for any actions or inactions of any Buyer Affiliate(s) under a WA
or PA, nor shall any actions or inactions by Buyer’s Affiliate(s) constitute a
breach of the Agreement between Buyer and Supplier.
 
Section 14.0 – General – Add the following:
Supplier will be familiar and will strictly comply with all laws and regulations
on bribery, corruption, and prohibited business practices. Supplier and its
Affiliates have not and will not offer, promise or make or agree to make any
payments or gifts (of money or anything of value) directly or indirectly to
anyone for the purpose of influencing, or inducing anyone to influence decisions
in favor of, Buyer or any of its Affiliates.
 
 
 
 
 
 
 
ACCEPTED AND AGREED TO:
 
ACCEPTED AND AGREED TO:
International Business Machines Corp.
 
Pacific Decision Sciences Corporation
By:
 
/s/ Howard Nicholas                                              5/10/06
 
By:
 
/s/ David Englund                                                5/9/06
Buyer Signature                               Date
 
Supplier Signature                              Date
 
 
 
Howard Nicholas
 
David Englund
Printed Name
 
Printed Name
Enterprise Software Procurement Relationship Manager – IBM Global Procurement
 
Executive Vice President
Pacific Decision Sciences (Corporation)
Title & Organization
 
 
Title & Organization
 
Buyer Address:
 
Supplier Address:
11400 Burnet Road
 
180 South Prospect Avenue
Austin, TX 78758
 
Suite 250
 
 
Tustin, CA 92780
 
 
 

 

 
 
 
Licensed and Developed Works Agreement Statement
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