This Subscription Agreement (the “Agreement”) is between OS Group, LLC dba Covalent Technologies (“Covalent”) and any purchaser or user of the Covalent products and services that accepts the terms of this Agreement (“Customer” or “You”).

PLEASE READ THIS AGREEMENT CAREFULLY BEFORE PURCHASING OR USING COVALENT PRODUCTS AND SERVICES. BY USING OR PURCHASING COVALENT PRODUCTS OR SERVICES, YOU SIGNIFY YOUR ASSENT TO THIS AGREEMENT. IF YOU ARE ACTING ON BEHALF OF AN ENTITY, THEN YOU REPRESENT THAT YOU HAVE THE AUTHORITY TO ENTER INTO THIS AGREEMENT ON BEHALF OF THAT ENTITY. IF YOU DO NOT ACCEPT THE TERMS OF THIS AGREEMENT, THEN YOU MUST NOT USE OR PURCHASE COVALENT PRODUCTS OR SERVICES.

The Effective Date of this Agreement is the earlier of the date that Customer accepts this Agreement or the date that Customer uses the Covalent products or services.

Whereas Covalent and Customer desire to establish certain terms and conditions under which Customer will, from time to time, license software and obtain services from Covalent;

Now, therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Customer and Covalent agree as follows:

1. Subscription

1.1 Software License; Support Services. Subject to the terms and conditions of this Agreement, including Customer’s obligation to pay the Subscription Fees as specified on the “Sales Quote” (the price quotation provided by Covalent to Customer for the Subscription purchased hereunder), Customer elects to purchase a “Subscription,” which includes the Software (as defined below and any Error Corrections as defined in Section 5.1), and Support Services (as defined in Section 5.2). Covalent hereby grants to Customer a limited, non-exclusive, non-transferable, royalty-bearing, worldwide term license to download, install, execute and use Covalent’s software bundle that Customer has licensed from Covalent (the “Software”) (in machine-readable object code form only) on the Designated CPU(s) or Machines (as specified on the Sales Quote) and its associated end-user documentation (“Documentation”) solely for Customer’s internal business purposes and in accordance with the Documentation and any other limitations set forth in this Agreement. Customer is entitled to make copies of the Software for archival, backup, or disaster recovery purposes only, provided that Customer reproduces all copyright and proprietary rights notices (“Notices”) included in the original copy of the Software.

1.2 Term. The Term of this Agreement shall be for the duration of the “Services” (which includes all Support Services, Training Services, and Professional Services) provided under the Subscription, as specified on the Sales Quote or applicable Services Exhibit. The initial term shall continue for a period of one (1) year. Thereafter, the term for the Services shall renew for successive terms of one (1) year each unless a different term is agreed to by the parties upon renewal or either party gives written notice to the other of its intention not to renew the Agreement at least thirty (30) days prior to the commencement of the next term. All fees for the Subscription and any Services are due and payable upon termination.

1.3 Transfers. Customer may transfer the Software from one (1) Designated CPU or Machine to another after initial installation of the Software if at the time of such transfer, Customer removes all copies of the Software from the initial Designated CPU or Machine.

1.4 Subscription Reporting and Audit. If Customer elects to increase the number of licenses of Software, then Customer must purchase from Covalent additional Subscriptions, including the desired number of licenses and Support Services therefore. During the Term of this Agreement and for one (1) year thereafter, Customer expressly grants to Covalent the right to audit Customer’s facilities and records from time to time in order to verify Customer’s compliance with the terms and conditions of this Agreement.

1.5 Ownership. As between the parties, Customer acknowledges and agrees the Software, including its sequence, structure, organization, and source code constitute certain valuable intellectual property rights of Covalent and its suppliers. The Software is licensed under the Subscription and not actually sold to Customer. No title or ownership passes as a result of this Agreement or any act under this Agreement. Covalent owns all copies of the Software however made. All rights in and to the Software not expressly granted to Customer in this Agreement are reserved by Covalent and its suppliers. Nothing in this Agreement will be deemed to grant, by implication, estoppel or otherwise, a license under any of Covalent’s existing or future patents (or the existing or future patents of its suppliers).

2. Restrictions on Use; Confidentiality. The Software and the structure, organization, and code thereof are the confidential and proprietary information of Covalent. Customer agrees to take adequate steps to protect the Software from unauthorized disclosure or use. The source code for the Software remains a confidential trade secret of Covalent and/or its suppliers. Customer acknowledges and agrees that the Software and their sequence, structure, organization, and source code constitute valuable trade secrets of Covalent and its suppliers. Accordingly, Customer agrees not to: (a) use the Software except as expressly allowed under Section 1, as applicable; (b) separate the component programs of the Software for use on different computers; (c) modify, adapt, alter, publicly perform, publicly display, translate, or create derivative works from the Software; (d) merge the Software with other software; (e) sublicense, lease, rent, loan, distribute or otherwise transfer the Software to any third party; or (f) reverse engineer, de-compile, disassemble, or otherwise attempt to derive the source code for the Software.

3. Delivery, Installation, and Acceptance. Covalent will provide Customer with the access necessary to download the Software after Customer accepts the terms and conditions of this Agreement and pays all fees for the Software (“Subscription Fees”). Customer will be responsible for installing the Software on its computers as permitted under this Agreement. “Delivery” will mean either: (a) for media, the transfer to Customer of the first copy of Software, or (b) for electronic delivery, when the Customer is provided with the appropriate access codes to download the Software. The Software will be deemed accepted upon Delivery.

4. Subscription Fees and Payment. Customer will pay the Subscription Fees as specified on the Sales Quote provided to Customer by Covalent. Customer acknowledges that by paying the preceding fees or downloading the Software that Customer agrees to such terms and conditions. All payments must be made in U.S. dollars. The Subscription Fees exclude all applicable sales, use, and other taxes and all applicable export and import fees, customs duties and similar charges, and Customer will be responsible for payment of all such taxes (other than taxes based on Covalent’s net income), fees, duties, and charges, and any related penalties and interest, arising from the payment of the Subscription Fees or the Delivery or license of the Software to Customer.

5. Support Services.

5.1 Error Corrections. In the event the Software contains an “Error” (a reproducible failure of the Software to perform in substantial conformity with its Documentation), Covalent will provide Customer with Error Corrections for the Software. “Error Corrections” means the release of the Software subsequent to the initial Delivery in which Covalent has incorporated any bug fixes and maintenance corrections excluding any added functionality or enhancements. An Error Correction is indicated in the Licensed Software by version number changes to the third digit in the version number string (i.e., x.y.z, where an increment in the value of z identifies an Error Correction). In the event of a dispute as to whether a particular release is an Error Correction, a new version, or new product, Covalent’s categorization will be dispositive.

5.2 Support Services. Covalent will provide Customer support services regarding the installation and configuration of the Software (“Support Services”) during the Term of this Agreement. Support Services consists of: (i) answering questions regarding the installation and operation of the Software; (ii) attempting to identify causes of suspected Errors occurring in the Software; (iii) addressing confirmed Errors in the Software in accordance with the Service Levels and Procedures, as specified in Section 5.4 or the applicable Support Services Exhibit.

5.3 Support Coordinators. Covalent will provide Support Services only to those designated Support Coordinators, which Customer may re-designate up to three (3) times during any one (1) year period.

5.4 Service Levels and Procedures. When Support Coordinators notify Covalent of a suspected Error or if Covalent identifies an Error in the Software, Covalent will use commercially reasonable efforts to reproduce and correct such suspected Error within a reasonable time.

5.5 Exclusions. Covalent will have no obligation to correct Errors caused by: (a) improper installation of the Software; (b) changes that Customer has made to the Software; (c) use of the Software in a manner inconsistent with its Documentation; (d) combination of the Software with hardware or software not approved by Covalent; or (e) where Customer has failed to provide backups of the Software in accordance with Customer’s internal procedures regarding backups of other software.

5.6 Customer Obligations. As a condition to Covalent’s support obligations under this Agreement, Customer must assist Covalent in identifying and correcting Errors, including executing reasonable diagnostic routines in accordance with instructions provided by Covalent and providing free and reasonable access to the Software as requested by Covalent for diagnostic and maintenance purposes.

5.7 Limitations. Notwithstanding any provision in this Agreement to the contrary, Covalent will only support the most current version of the Software and its two (2) immediately prior “Releases,” provided that no version will be supported for fewer than eighteen (18) months. For purposes of this Agreement “Release” means any upgrade, enhancement or new version of the Software that Covalent makes commercially available to Customer. A Release of the Software is indicated by version number changes to the first or second digit in the version number string (i.e., x.y.z, where an increment in the value of x or y identifies the release of a new Release; Releases do not include new products.

5.8 Training Services. As requested by Customer Covalent may provide training services, if any, in accordance with terms specified on the Sales Quote or Training Services Exhibit.

5.9 Professional Services. As requested by Customer Covalent may provide professional services, if any, in accordance with terms specified on the Sales Quote or Professional Services Exhibit.

6. Warranties.

6.1 Warranty. For a period of ninety (90) days after Delivery during the initial Term (“Warranty Period”), Covalent warrants that the Software as specified on the Sales Quote, and any media on which the Software is contained, when used as permitted under this Agreement and in accordance with the instructions in the Documentation, will operate substantially as described in the Documentation. Covalent does not warrant that Customer’s use of the Software will be error-free, virus-free or uninterrupted. Covalent will use commercially reasonable efforts to correct any reproducible error in the Software reported to Covalent by Customer during the Warranty Period. If Covalent determines that it is unable to correct the error, Covalent will refund to Customer the Subscription Fees actually paid for the initial Term, in which case this Agreement and Customer’s right to use the Software will be terminated. Any Error Correction provided to Customer will not extend the original Warranty Period.

6.2 Disclaimer. COVALENT PROVIDES THE SUBSCRIPTION (INCLUDING THE SOFTWARE, ERROR CORRECTIONS AND THE SUPPORT SERVICES) AND THE SERVICES ON AN “AS IS” BASIS. THE EXPRESS WARRANTY IN SECTION 6.1 IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SUBSCRIPTION, AND THE SERVICES INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, ACCURACY, RESULT, TITLE, AND NON-INFRINGEMENT. THERE IS NO WARRANTY THAT ANY SUBSCRIPTION OR SERVICES WILL BE ERROR FREE, WILL OPERATE WITHOUT INTERRUPTION OR WILL FULFILL ANY OF CUSTOMER’S PARTICULAR PURPOSES OR NEEDS. THERE ARE NO WARRANTIES THAT THIS INFORMATION, COVALENT’S EFFORTS OR THE SUBSCRIPTON OR SERVICES WILL FULFILL ANY OF CUSTOMER'S PARTICULAR PURPOSES OR NEEDS. THE SUBSCRIPTION AND SERVICES ARE PROVIDED WITH ALL FAULTS, AND THE ENTIRE RISK AS TO SATISFACTORY QUALITY, PERFORMANCE, ACCURACY, EFFORT AND RESULTS OBTAINED IS WITH CUSTOMER. CUSTOMER ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT AND THAT NO WARRANTIES ARE MADE BY ANY OF COVALENT’S SUPPLIERS OR DISTRIBUTORS. IF COVALENT CANNOT DISCLAIM SUCH WARRANTIES UNDER THE APPLICABLE LAW, THE SCOPE AND DURATION OF SUCH WARRANTIES WILL BE THE MINIMUM PERMITTED UNDER SUCH LAW. CUSTOMER’S SOLE REMEDY FOR BREACH OF SUCH EXPRESS WARRANTIES SHALL BE AN ERROR CORRECTION OR REFUND AS SET FORTH IN SECTION 6.1.

7. Limitation of Liability. NEITHER PARTY WILL BE LIABLE TO ANY OTHER PARTY FOR ANY CONSEQUENTIAL, INDIRECT, EXEMPLARY, SPECIAL, OR INCIDENTAL DAMAGES, INCLUDING ANY LOST DATA AND LOST PROFITS OR BUSINIESS INTERRUPTION, ARISING FROM OR RELATING TO THIS AGREEMENT UNDER ANY LEGAL THEORY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF, KNOWS OF, OR SHOULD KNOW OF THE POSSIBILITY OF SUCH DAMAGES; AND (II) FOR ANY CLAIM ATTRIBUTABLE TO ERRORS, OMISSIONS, OR OTHER INACCURACIES IN OR DESTRUCTIVE PROPERTIES OF THE SUBSCRIPTION (INCLUDING THE SOFTWARE, ERROR CORRECTIONS AND SUPPORT SERVICES) OR ANY SERVICES. REGARDLESS OF THE CAUSE OF ACTION, COVALENT’S TOTAL CUMULATIVE LIABILITY IN CONNECTION WITH THIS AGREEMENT AND THE SUBSCRIPTION OR ANY OTHER SERVICES PROVIDED HEREUNDER, WHETHER IN CONTRACT OR TORT OR OTHERWISE, WILL NOT EXCEED THE AMOUNT OF THE SUBSCRIPTION FEES PAID TO COVALENT ACCORDING TO THIS AGREEMENT. THE LIMITATIONS OF THIS SECTION 7 WILL NOT APPLY TO OR OTHERWISE LIMIT CUSTOMER’S BREACH OF SECTION 2. THE PARTIES ACKNOWLEDGE THAT THIS SECTION 7 REFLECTS THE ALLOCATION OF RISK SET FORTH IN THIS AGREEMENT AND THAT NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT WITHOUT THESE LIMITATIONS ON ITS LIABILITY. THIS LIMITATION OF LIABILITY WILL APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY SET FORTH HEREIN.

8. TERMINATION. Customer may terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to Covalent. This Agreement will terminate without notice if Customer breaches any provision in Section 1.1 or 2 or if Customer fails to pay any portion of the Subscription Fees when due. Upon termination of this Agreement for any reason, all Services will immediately cease, all licensed rights granted in this Agreement will immediately cease to exist, and Customer must promptly stop all use of the Software and erase all copies of the Software from Customer’s computers.

9. General. Notices. All notices, consents demands and approvals under this Agreement must be delivered in writing by courier, by fax, or by certified or registered mail (postage prepaid and return receipt requested) to the other party at the address set forth on the Sales Quote and will be effective upon receipt or three (3) business days after being deposited in the mail as required above, whichever occurs sooner.  Relationship of the Parties.  The parties hereto are independent contractors.  Neither party (nor any agent or employee of that party) is the representative of the other party for any purpose, and neither party has the power or authority as agent, employee or in any other capacity to represent, act for, bind or otherwise create or assume any obligation on behalf of the other party for any purpose whatsoever.  Export Control.  Customer will comply with all applicable export and import control laws and regulations of the United States and the foreign jurisdiction in which the Software is used and, in particular, Customer will not export or re-export the Software without all required United States and foreign government licenses.  Customer acknowledges and understands that the Software contains encryption technology that may require an export license from the U.S. State Department and that export or re-export of Software to certain entities and certain countries is prohibited.  Customer will defend, indemnify, and hold harmless Covalent from and against any violation of such laws or regulations by Customer or any of its agents, officers, directors, or employees.  Assignment.  Customer may not assign or transfer, by operation of law or otherwise, any of its rights under this Agreement (including its licenses with respect to the Software) to any third party without Covalent’s prior written consent.  Any attempted assignment or transfer in violation of the foregoing will be void.  No Waivers.  All waivers must be in writing.  Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.  U.S. Government End Users.  The Software is a “commercial item” as that term is defined at 48 C.F.R. 2.101, consisting of “commercial computer software” and “commercial computer software documentation” as such terms are used in 48 C.F.R. 12.212.  Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4, all U.S. Government end users acquire the Software with only those rights set forth therein.  Choice of Law.  This Agreement will be governed by the laws of the State of California in the United States of America, as such laws apply to contracts between California residents negotiated, executed and performed entirely within California.  The United Nations Convention on Contracts for the International Sale of Goods does not apply to this Agreement.  Any action or proceeding arising from or relating to this Agreement must be brought exclusively in a federal court in the Northern District of California or in state court in Contra Costa County, California, and each party irrevocably submits to the exclusive personal jurisdiction and venue of any such court in any such action or proceeding.  This Agreement will be written and construed in the English language.  Survival.  Sections 1.5 (Ownership), 2 (Restrictions on Use; Confidentiality), 6.2 (Disclaimer), 7 (Limitation of Liability), 8 (Termination) and 9 (General) will survive the expiration or termination of this Agreement.  Customer acknowledges and agrees that Section 9 will remain in full force and effect notwithstanding the failure of any essential purpose in Section 6.  Entire Agreement.  This Agreement constitutes the entire agreement between the parties regarding the subject hereof and supersedes all prior or contemporaneous agreements, understandings, and communication, whether written or oral.  This Agreement may be amended only by a written document signed by both parties.  The terms on any purchase order or similar document submitted by Customer to Covalent will have no effect.

© 2006 OS Group, LLC dba Covalent Technologies, All Rights Reserved.