Appendix A – Terms and Conditions
These standard terms and conditions (“Terms and Conditions”) govern the services (“Services”) to be provided by MorganFranklin Consulting, LLC (“MorganFranklin”) for client (the “Customer”) pursuant to the above proposal (the “Proposal). These Terms and Conditions shall be in addition to the terms and conditions set forth in the Proposal. The applicable Proposal, together with these Terms and Conditions, shall hereinafter collectively be referred to as the “Agreement.” In the event of any inconsistency or conflict between these Terms and Conditions and the terms and conditions of the applicable Proposal, the terms and conditions of the applicable Proposal shall control.
Customer Responsibilities: Customer agrees to provide MorganFranklin with all documentation and information, access to Customer’s offices, facilities, equipment, computer systems, files, codes and software, and access to Customer’s employees and consultants whom MorganFranklin believes necessary to complete Services. If MorganFranklin, in good faith, believes that any failure to make reasonably requested information or persons available materially impairs its ability to complete Services in accordance with the mutually agreed upon time frames, MorganFranklin will so notify Customer. In such event, Customer will not hold MorganFranklin responsible and all fees and expenses will be paid to MorganFranklin in accordance with the terms of the Agreement. Customer is responsible for all management functions and decisions relating to the scope of Services provided, including evaluating and accepting the adequacy of Services provided by MorganFranklin in addressing Customer’s needs. It is Customer’s responsibility to establish and maintain internal controls and to authorize all persons who supervise MorganFranklin or give MorganFranklin instruction or sign or deliver any documentation on Customer’s behalf. MorganFranklin will not accept responsibility for any errors contained in data or documents Customer provides to MorganFranklin for MorganFranklin’s use in providing Services.
Customer resource availability is critical to completing the deliverables within the specified time frames. All deliverables will be reviewed in a timely manner. Customer will be able to meet with MorganFranklin and review deliverables or drafts within a timely manner of the request for review. All issues, questions, requests for feedback, and action items assigned to Customer team members will need to be completed in a timely manner in keeping with the project schedule. Requests that cannot be completed in a timely manner will be tracked at the executive management level to determine the impact on the project timeline and may result in delay of the final deliverable.
Members of the Customer project team will have the ability and authority to make timely decisions and commitments. Customer will provide full availability of information and personnel required for MorganFranklin to complete the activities.
Personnel: The personnel, including subcontractor personnel, assigned to perform Services shall be determined solely by MorganFranklin, except that Customer shall have the right to reasonably request that changes be made to such personnel, including subcontractor personnel. In such event, MorganFranklin shall reasonably consider such request and make such changes as it shall determine, in its sole discretion, as reasonably appropriate under the circumstances.
Facilities: Unless otherwise specified in the applicable Proposal, Services shall be performed at the facilities of Customer or at a MorganFranklin office location, as reasonably determined by MorganFranklin from time to time
Compensation: In consideration for the performance of the Services, Customer will pay to MorganFranklin the charges set forth in the Proposal, and such charges will be subject to periodic and annual adjustment.
Expenses: Unless otherwise specified in the applicable Proposal, Customer shall reimburse direct costs incurred by MorganFranklin in performing Services. Such direct costs shall include (without limitation) all postage, shipping, and lodging costs incurred by MorganFranklin in performing Services. Customer agrees to pay MorganFranklin for travel time and expenses incurred in performing Services, and MorganFranklin agrees to take reasonable measures and good manner to ensure travel time is used productively with Services and deliverables.
Administrative Fee: In addition to the fees and expenses otherwise stated, MorganFranklin will charge Customer a three percent (3%) monthly Administrative Fee for additional costs associated with administrating this Agreement, including, but not limited to, administrative, IT support, conference rooms, IT security, digital and cloud assets, and other indirect labor costs. The Administrative Fee percentage is only applicable to amounts actually billed by MorganFranklin under this Agreement.
Invoicing: Unless otherwise specified in the applicable Proposal, MorganFranklin shall invoice Customer monthly for fees and expenses in connection with Services performed. Customer shall pay any such invoice in full within thirty (30) days of Customer’s receipt of the invoice.
Late Charges: In addition to any other rights and remedies of MorganFranklin, any undisputed invoiced amount which is not paid by Customer when due shall be increased by a late charge equal to one and a half percent (1.5%) for each month (or portion thereof) in which such invoiced amount is due and not paid.
Taxes: The fees payable under the Agreement shall not include local, state or federal sales, use, value-added, excise or personal property or other similar taxes or duties imposed, and any such taxes shall be assumed and paid by Customer.
Payment Upon Termination: Termination of the Agreement shall not terminate Customer’s obligation to pay any and all amounts accrued prior to such termination. Upon any termination for any reason whatsoever, Customer agrees to fully pay any amounts due to MorganFranklin at such time.
Collection Expenses: Customer agrees to pay MorganFranklin on demand all costs and expenses incurred, including costs of collection and reasonable attorneys’ fees, in connection with any attempt by MorganFranklin to collect any amounts owed by Customer to MorganFranklin pursuant to the Agreement or any other agreement between the parties.
Express Warranties: MorganFranklin hereby represents and warrants that (i) it has all necessary rights, interests and authority to enter into and perform the Services required and (ii) Services shall be performed in accordance with applicable law and in a workmanlike manner by trained and qualified personnel in accordance with standard industry practices for the type of services performed.
Warranty Limitation: The warranties set forth in the Agreement are in lieu of all other representations or warranties, expressed or implied, including but not limited to implied warranties of fitness for a particular purpose and warranties of merchantability, whether arising by custom of usage or operation of law.
Limitation of Liability: Except in the case of MorganFranklin’s gross negligence or willful misconduct, in no event shall MorganFranklin be liable to Customer or any of its authorized employees or to any other third party, whether a claim be in tort, contract or otherwise, for any amount in excess of the total amount of professional fees, and under no circumstances including any out-of-pocket costs or expenses, paid by Customer for Services performed under the Agreement in the twelve (12) months prior to the claimed damage or injury. In no event shall MorganFranklin be liable for any special, incidental, consequential, indirect, exemplary, punitive or similar damages, including, without limitation, loss of business and loss of profits, whether foreseeable or not, even if MorganFranklin was advised of the possibility of such damages in advance, arising out of, caused by or in connection with the performance or non-performance of Services under the Agreement. It is further understood and agreed that MorganFranklin shall not be liable for any claim in the event that MorganFranklin was not: (i) notified promptly upon Customer’s becoming aware of the existence of such claim and (ii) given an opportunity to cure or mitigate such claim, if possible. It is understood and agreed that this limitation of liability provision shall survive the termination of the Agreement.
Indemnification: Customer agrees to indemnify, defend and hold MorganFranklin, its directors, officers, employees and agents harmless from and against all losses, claims, damages, liabilities, obligations, demands, costs and expenses, joint or several (including reasonable legal counsel fees) arising out of or related to the Agreement or the performance of Services contemplated by the Agreement, including, without limitation any costs arising out of any dispute, whether or not MorganFranklin is a party to such dispute. It is agreed that this indemnity shall not apply to any claims resulting from gross negligence or willful misconduct on the part of MorganFranklin in the performance of Services. In consideration for Services, Customer agrees to pay MorganFranklin reasonable fees and expenses to reimburse MorganFranklin for its costs (including legal counsel fees and a reasonable estimate of its time) in preparing for, producing documents for, or testifying in any legal proceeding to which Customer may be a party (except in the event that such matter involves a claim by Customer against MorganFranklin and Customer prevails in such claim). It is understood and agreed that this indemnification provision shall survive the termination of the Agreement.
Third Party Proceedings. Unless expressly provided for, MorganFranklin’s services do not include giving testimony or appearing or participating in discovery proceedings, in administrative hearings, in court, or in other legal or regulatory inquiries or proceedings. Moreover, MorganFranklin’s costs, expenses and time spent in legal and regulatory matters or proceedings arising from this Proposal to which MorganFranklin is not a party and the services are not at issue, such as subpoenas, testimony, bankruptcy filings or proceedings, consultation involving private litigation, arbitration, government or industry regulation inquiries, whether made at Customer’s request or the request of a third party or by subpoena or equivalent, will be billed to Customer separately at MorganFranklin’s then current rates.
Insurance: Each party shall carry and maintain in force at all times relevant hereto insurance of the types and minimum coverage amounts as are reasonable under the circumstances considering the scope of Services, and as reasonably required to conduct its business, and will provide evidence of the same upon request. This includes Workers’ Compensation and Employer Liability coverage at applicable statutory limits, Commercial General Liability coverage, Errors and Omissions and Professional Liability coverage, and Business and Automobile coverage. All such insurance shall be issued by a financially responsible company or companies authorized to issue such policy or policies.
AICPA Standards for Accounting Services: Although MorganFranklin is not a public accounting firm, it will perform Services in accordance with Standards for Consulting Services established by the American Institute of Certified Public Accountants (“AICPA”). Accordingly, MorganFranklin will provide no opinion, attestation of or other form of assurance with respect to Services or the information upon which its work is based. Services performed by MorganFranklin will not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards. MorganFranklin will not audit or otherwise verify the information supplied to MorganFranklin in connection with the Agreement, from whatever source, except as may be specified in the applicable Proposal.
The responsibility to establish and maintain Customer’s internal controls lies solely on the Customer. In addition, the Customer has sole responsibility in determining the procedures deemed necessary in connection with its compliance with the provisions of the Sarbanes-Oxley Act of 2002 (the “Act”) and related SEC rules and regulations, to execute those procedures and to assess the results of its procedures’ adequacy thereof. MorganFranklin provides no opinion or other form of assurance with respect to Customer’s compliance with the Act, related SEC rules and regulations, or Customer’s procedures. MorganFranklin makes no representation as to whether Customer’s procedures are sufficient for Customer’s purposes. Services should not be taken to supplant inquiries and procedures that Customer should undertake for purposes of obtaining and using the information necessary in conjunction with Customer’s compliance with the provisions of the Act and related SEC rules and regulations.
Accounting principles and their application vary from industry-to-industry, and the application of various accounting principles is often based upon facts and circumstances. Similarly, internal controls systems and procedures are often specially designed and implemented. The in-depth evaluation of internal controls is relatively new, and testing procedures continue to evolve. Unless expressly engaged for such purpose by Customer, MorganFranklin will not be responsible for identifying material weaknesses or significant deficiencies in internal controls, or identifying material errors, fraud or illegal acts. However, if any such matters come to MorganFranklin’s attention in the course of our work, MorganFranklin will so notify the appropriate Customer representative(s). Customer understands that MorganFranklin is not qualified to provide legal, tax, accounting or regulatory advice in connection with any Services. Customer agrees that it will rely on its own advisors, not MorganFranklin, for advice in these areas.
Accordingly, (1) there can be no assurance that Customer’s independent auditors, financial institutions, governmental agencies (including without limitation, the U.S. Securities and Exchange Commission) or any self-regulatory organization (e.g., securities exchange) will not challenge, perhaps successfully, financial reporting positions taken by Customer after considering our reports; (2) Customer agrees that neither MorganFranklin, nor any of its personnel shall be liable, accountable or responsible, in damages or otherwise, to Customer or its successors and assigns for any loss, damages, liability costs, or expense incurred or sustained that are attributable to any financial reporting position taken by the Customer in reliance upon MorganFranklin’s reports or Services; and (3) Customer shall indemnify, defend and hold harmless MorganFranklin and its personnel from and against any loss, liability, damage, cost or expense (including reasonable attorney’s’ fees) sustained or incurred as a result of any act or omission by Customer, whether or not in reliance upon MorganFranklin’s reports or Services. The Customer, through its President, Chief Executive Officer, Chief Financial Officer or other officers, is solely responsible for the accuracy of the information included in any of Customer’s U.S. Securities and Exchange Commission filings and board packages.
Assignment: The Agreement may not be assigned by either party without the consent of the non-assigning party, which consent shall not be unreasonably withheld, provided, however, that the Agreement is assignable by either party with notice to, but without prior written consent of, the other party if such assignment is to any Affiliate of the assigning party or to any entity which may acquire all or substantially all of such party’s assets and business, any entity with or into which such party may be consolidated or merged, or any entity that is the successor entity to such party in a share exchange; provided that any such assignee agrees in writing to assume all obligations of the assigning party under the Agreement.
Amendment: Alterations, supplements, modifications, amendments or addendums of any provisions of the Agreement shall not be binding on any party unless such alterations, supplements, modifications, amendments or addendums are in writing and signed by authorized representatives of both MorganFranklin and Customer.
Non-solicitation: During the term of the Agreement or any other agreement between the parties and for a period of one (1) year after the termination or expiration thereof, Customer will not solicit or hire any MorganFranklin employees without MorganFranklin’s prior written consent. If Customer does solicit or hire any MorganFranklin employees, Customer agrees that actual damages will be difficult to determine and therefore agrees to pay liquidated damages in the amount of two (2) times the yearly compensation of the employee hired. Customer agrees that this amount of liquidated damages is fair and reasonable and is not a penalty of any kind.
Right to Provide Services: Customer understands and agrees that MorganFranklin employees providing Services to Customer may perform similar professional services for other parties and nothing shall prevent MorganFranklin from using the employees and other resources provided to Customer under any agreement for professional services for such purposes.
Right to Subcontract: MorganFranklin reserves the right to subcontract all or part of Services provided; provided, however, that MorganFranklin shall remain responsible for the performance of Services by its subcontractors.
Intellectual Property: Each party will retain all rights in any software, ideas, concepts, know-how, development tools, techniques or any other proprietary material or information that it owned or developed prior to the date of the Agreement, or acquired or developed after the date of the Agreement without reference to or use of the intellectual property of the other party. All software that is licensed by a party from a third party vendor will be and remain the property of such vendor. It is understood and agreed that this provision shall survive the termination of the Agreement.
Governing Law: The Agreement, and all matters in dispute between the parties, whether arising from or relating to the Agreement or arising from any other alleged tort or violation of contract, shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Virginia, without regard to any rules of conflict or choice of law which requires the application of laws of another jurisdiction. The parties agree that all actions and proceedings shall be resolved exclusively by a state or federal court of competent subject matter jurisdiction in Fairfax County, Virginia. Each party herby waives (i) any objection which it may have at any time to the venue of the actions and proceedings in any such court, (ii) any claim that such actions and proceedings have been brought in an inconvenient forum and (iii) the right to object, with respect to such actions and proceedings, that such court does not have any jurisdiction over such party. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without the necessity for service by any other means provided by law.
Enforceability: The Agreement has been duly executed and delivered by each of MorganFranklin and Customer and constitutes the legal, valid and binding obligations of each party, enforceable against each party in accordance with the terms thereof, subject to applicable bankruptcy, insolvency and similar laws affecting the rights of creditors generally, and general principles of equity.
The terms and conditions of this Agreement shall control for MorganFranklin’s Services in the event of any conflict with the terms and conditions of any other agreement between the parties.
Notices: Except as otherwise expressly provided in the applicable Proposal, any notice, request, consent, demand or other communication required or permitted is to be given in writing to the following authorized representatives of MorganFranklin:
MorganFranklin Consulting, LLC
Name: Eric D. Reicin
Title: VP, General Counsel & Corporate Secretary
Address: 7900 Tysons One Place, Suite 300, McLean, VA 22012
Agency: The business relationship between the parties shall not be construed as creating a partnership, a joint venture, an employment relationship or any agency relationship between the parties, or as authorizing either party to act as an agent for the other. The parties hereto are independent contractors for all purposes. Neither party shall have any authority to act for or to bind the other party in any respect.
Severability: Wherever possible, each provision of the Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of the Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable under applicable law, such provision shall be ineffective to the extent of such invalidity or unenforceability, without invalidating or rendering unenforceable the remaining provisions of the Agreement. Such remaining provisions shall remain in full force and effect.
Counterparts. The Agreement may be executed in any number of counterparts and by the parties thereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts shall constitute one and the same agreement between the parties. Facsimile or electronic copies of signatures shall be deemed equally binding as originals.
Waivers: A waiver by either party of a breach or violation of any provision of the Agreement will not constitute or be construed as a waiver of any subsequent breach or violation of that provision or any other provision of the Agreement.
No Third Party Beneficiaries: Nothing in the Agreement shall confer any rights upon any person or entity other than the parties hereto and their respective successors and permitted assigns.
Publicity: The parties agree that MorganFranklin may issue a press release within thirty (30) days of beginning services for a specific client engagement, announcing the award and any agreement. MorganFranklin may also use Customer’s name and a high level description of the project in its customer lists, marketing materials and website. Additionally, in consideration for Services rendered by MorganFranklin, Customer grants MorganFranklin a limited, non-transferrable license to use Customer’s company logo in the following two contexts: (i) in a client list to appear on MorganFranklin’s website and (ii) in a customer list to appear in presentations to be given to individual current or prospective clients of MorganFranklin.
Advice and Reports: Any advice given, or report issued by MorganFranklin is provided solely for Customer’s use and benefit and only in connection with the purpose in respect of which the Services are provided. Unless required by law, Customer shall not provide any advice given or reports issued by MorganFranklin to any third party or refer to MorganFranklin or the Services without MorganFranklin’s prior written consent. In no event, regardless of whether consent has been provided, shall MorganFranklin assume any responsibility to any third party to which any advice or report is disclosed or otherwise made available.
Confidential Information: Each party will only use the other’s Confidential Information in the performance or enforcement of Services. The receiving party shall treat the disclosing party’s Confidential Information as confidential to and as the property of the disclosing party and use a degree of care not less than the degree of care it uses with respect to its own information of like nature to prevent unauthorized access, use or disclosure, which in any event shall be no less than a reasonable degree of care. The receiving party shall not, except as may be authorized by the disclosing party in advance in writing, or as may be required by law or as requested or required by any governmental, judicial, or regulatory body asserting jurisdiction, use or disclose any Confidential Information in any form to any third party other than: (i) to the receiving party’s officers, directors, employees, subcontractors or agents that have been informed of the confidential nature of the Confidential Information and have been required to exercise the same degree of care in protecting the Confidential Information as is contemplated above, (ii) to employees or officers of the firms identified by the disclosing party from time to time as its external accountants, legal or other advisors in the ordinary course of the receiving party’s performance of services or (iii) as instructed orally or in writing by the disclosing party’s employees, officers, external accountants, legal or other advisors, to third parties in connection with the receiving party’s performance of services on the disclosing party’s behalf. The receiving party shall be entitled to assume that any external accountants, legal or other advisors have been obligated by the disclosing party to safeguard any Confidential Information of the disclosing party’s and that disclosure by the receiving party to such external accountants, legal or other advisors shall be permitted. Nothing above shall restrict the right of either party to disclose Confidential Information that is ordered, required, requested or subpoenaed by a court or governmental or legislative or regulatory body asserting jurisdiction over such party. In such cases, Confidential Information may only be disclosed to the extent so ordered, required, requested or subpoenaed, and each party agrees: (i) to seek such body’s confidential treatment of the Confidential Information to the extent legally available and (ii) to give the other party written notice of the order, requirement, request or subpoena within five (5) days of receipt or, in the event that such party has been advised by its legal counsel that providing such notice to the other party is not permissible under the circumstances, then as soon as such disclosure to the other party is legally permissible. The provision of Confidential Information to MorganFranklin shall not prohibit MorganFranklin from being engaged by any third party to provide professional services to such party.
As used above, the term “Confidential Information” shall include (i) information relating to market, financial, statistical or other data (whether historical or current), code, algorithms, software, prototypes, process, techniques, specifications, costs, prices, finances, business opportunities or know-how of either party, (ii) information in written, oral, electronic or other tangible or intangible forms, which may include, but is not limited to, financial data, marketing plans, non-public business information, customer names and financial information, which is either designated as confidential or proprietary or ought reasonably under the circumstances be treated as confidential or proprietary, and (iii) any other content inputs or information requested provided by Customer in the course of provision of Services pursuant to the Agreement. Confidential Information shall not include information that: (i) is known to the receiving party prior to the time of disclosure by the disclosing party, as evidenced by contemporaneous dated written records; (ii) is received by the receiving party from independent sources having the right to such information without any obligation of confidence or non-disclosure to the disclosing party, and without such information having been solicited or obtained by any use of the Confidential Information received by the receiving party; (iii) is independently developed by the receiving party (other than in connection with the Agreement or any other agreement between the parties); or (iv) is in the public domain, or later becomes public, unless such information is made public by the receiving party in violation of the Agreement or by any other party directly or indirectly under an obligation of confidentiality or non-disclosure to the disclosing party.
MorganFranklin shall be obligated to keep and maintain all Confidential Information received from Customer in accordance this confidentiality provision until one (1) year after the termination of the Agreement. If so requested by Customer, following the termination of the Agreement, MorganFranklin shall destroy all written or descriptive material, papers and documents that contain any Confidential Information (except to the extent that MorganFranklin is required to maintain copies of same in compliance with the Agreement, legal or regulatory requirements or solely for archival purposes in accordance with MorganFranklin’s internal policies and compliance requirements).
Pursuant to 18 U.S.C § 1833(b)(1): An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.