Service Agreement



ISMs Global ("the Company") agrees to provide XXXXXXX ("the Customer") with all necessary licensing, software and maintenance services provided under the terms and conditions of this agreement to fulfill its obligations in abiding to the agreed scope of services detailed in Schedule One annexed hereto on the terms and conditions contained in this Agreement.

1.0 Definitions & interpretation

1.1 Defintions

In this Agreement unless otherwise indicated by the context or subject matter the following terms have the following meanings:

"Commencement Date" means the date of execution of the Agreement by ISMs Global as inserted in Schedule One;

"Customer" means the party described as the Customer in Schedule One;

"Equipment" means the equipment described in Schedule One;

"Maintenance Period" means the period specified in Schedule One (Agreement Term) during which maintenance service will be provided at the Site;

"Minor faults" means equipment failures that produce minor capacity degradation, although the core system continues to function.

Examples of this are: multiple users unable to access system, major loss of network bandwidth, peripheral equipment is down or degraded, system based feature is unavailable to all system users. This classification includes a system being in a vulnerable state due to redundant component failure.

"ISMs Care package" means the package selected by the Customer from the table of packages described in Attachment A, then listed in Schedule One.

"Response Time" means the time within which ISMs Global shall respond to the Customer's notification of a fault condition.

"Routine Faults" means a minor system fault, a condition where the system is functioning with only a minor degradation in capacity or functionality, and results in little or no impact on a customer‟s business.

"Software" means those software items specified in Schedule One and includes third party software.

"Site" means the location of the Software and/or Equipment as specified in Schedule One.

"Urgent Faults" means the failure of software that is performing a critical or core function within the overall system, resulting in a severe business impact. Examples of the severity of this are: communications system is unable to process any voice calls, data transactions, IP traffic, billing transactions or directory functions.

2.0 Term of agreement

2.1 This Agreement comes into effect on the Commencement Date and shall continue for the period specified in Schedule One ("Initial Term").

2.2 Unless a party has given at least 90 days‟ notice of its intention and desire to terminate prior to the end of the Initial Term, this Agreement will continue subject to the terms and conditions contained herein for further successive terms of 12 months ("Successive Term").

2.3 The Agreement can be terminated at the end of a Successive Term provided that a party gives to the other, at least 90 days prior written notice of its intention and desire to terminate the Agreement and in accordance with clause 10.

3.0 Maintenance services

3.1 Subject to, and in consideration for, the payment of the maintenance charge specified in Clause 5 hereof, ISMs Global shall, during the Maintenance Period, perform the maintenance service outlined herein.

3.2 ISMs Global will provide maintenance service for the registered Software based upon the service option selected by the Customer as described in Schedule One. ISMs Global‟s minimum maintenance service pursuant to this Agreement is as follows:

3.2.1 ISMs Global shall supply software "patches‟, labour, materials and service necessary to maintain the application according to its design specifications;

3.2.2 ISMs Global shall dispatch service personnel to the Site to perform any necessary repairs within such elapsed time so as to allow the service personnel to arrive at the site within the Response Time, unless ISMs Global is able to perform the repairs by remote access via ISDN card or internet;

3.3 Maintenance services provided under this agreement will only be performed at the Site address shown on this agreement.

4.0 Excluded items

ISMs Global's maintenance service does not include:

4.1 services connected with relocation of the Equipment, the addition or removal of accessories, attachments and other devices;

4.2 repair of any equipment not specified in Schedule One;

4.3 repair of any third party software not specified in Schedule One;

4.4 repair or replacement of any battery back-up associated with the Equipment;

4.5 repair of any malfunction or damage whatsoever caused, in ISMs Global 's opinion, by incorrect operation of the Equipment or from the Customer's (or its servants or agents) misuse of the Equipment in accordance with ISMs Global's published written instructions, or by the Customer's failure to perform its obligations pursuant to Clause 6 hereof;

4.6 repair of any malfunction or damage whatsoever caused by lightning, electrostatic interference, electromagnetic interference or power surges of any type howsoever caused;

4.7 repair of any malfunction or damage whatsoever caused by the failure or fluctuation of electrical power, air-conditioning or humidity control;

4.8 repair of any malfunction or damage whatsoever caused by war, fire, flood or any Act of God;

4.9 (a) correction of errors or defects caused by operation of the Software in a manner other than that expressly authorised by ISMs Global representatives;

(b) rectification of errors caused by misuse or incorrect use or changes or amendments made to the Software by the Customer not strictly authorised by ISMs Global or its representatives; or

4.10 If the customer requests in writing, ISMs Global may provide any of the services referred to in clause 4 provided that ISMs Global is entitled to charge the Customer reasonable fees for providing such services.

5.0 Fees

Remuneration and payment

5.1 Where no fixed price has been agreed, all services – i.e. hours of work, travel times as well as other services, including costs of travel and stay – shall be invoiced as incurred in accordance with the Sales Agreement.

5.2 Travel times and costs as well as costs of stay shall be invoiced on the basis of the ISMs Global staff member‟s customary place of work. Travel times and costs shall be incurred for travel between the staff member‟s customary place of work or, if after hours, to the staff members home address and the Customer‟s relevant place of employment or between the Customer‟s various places of employment respectively. In the event that the Company does not or cannot make available appropriate accommodation and food at a cost, the relevant costs shall be invoiced to the Company.

5.3 No discount shall be granted.

5.4 License and service invoices are payable on the due date without discount. The terms of payment as per the "ISMs Global Sales Agreement" are as follows:

- 75% at the time of contract signing or the order placed respectively

- 25% at the completion of installation

5.5 The fees and charges payable under this Agreement are exclusive of all Government sales tax, goods and services tax, or other Import or duties. Should such tax be or become applicable to the services provided, such fees and charges shall be adjusted to include all Government introduced sales tax, goods and services taxes, and Import or duties.

5.6 For invoices aged 30 days from their due date and over, ISMs Global charges interest at the statutory interest rate applicable for default payments at the relevant time.

5.7 Only claims which are not contested or which have been determined in a legally valid manner may be offset against ISMs Global‟ claims for remuneration or reimbursement of expenses.

Maintenance fees

5.0.1 In consideration for the maintenance service provide hereunder the Customer shall pay to ISMs Global the maintenance fee specified in Schedule One, and as varied from time to time, in advance, on the billing cycle as specified in Schedule One.

5.0.2 The Customer agrees to pay to ISMs Global any additional fees as specified in Schedule One and as varied from time to time, for any maintenance service provided outside the Maintenance Period.

5.0.3 The Customer will be invoiced for annual fees on each anniversary of the Commencement Date during the term of the Agreement pursuant to Schedule One.

5.0.4 All fees payable to ISMs Global by the Customer pursuant to this Agreement shall be paid within 30 days of the date of ISMs Global's invoice ("the due date") or immediately if via direct debit. If the Customer defaults in payment by the due date, ISMs Global reserves the right to suspend its obligations to provide maintenance service pursuant to this Agreement and charge a late payment fee at a rate per annum being 3% in excess of the then current interest rate charged by the Emirates National Bank on overdraft accounts of its corporate customers in excess of $100,000.00 (which rate is known as the Bench Mark Rate) on the unpaid balance from the due date until payment is received by ISMs Global and the Customer agrees to pay to ISMs Global such late payment fee.

5.0.5 The Customer acknowledges that ISMs Global shall be entitled to vary the fees for maintenance service upon the following basis; annual fees - by giving the Customer 30 days prior written notice of the proposed increase, which increase will then apply from the next due date for payment of the annual fees;

5.0.6 The obligations of the Customer pursuant to this Clause 5 shall remain in full force and effect after the termination of this Agreement and shall not be deemed to have been waived, merged or extinguished upon such termination.

24 hour service & maintenance agreement (optional)

5.0.7 This 24 hour support & maintenance agreement is applicable supplementarily to the standard support & maintenance agreement and regulates maintenance outside standard business hours.

5.0.8 The agreement incorporates the rectification of faults on the telephone or by means of a workaround solution in the event of operational downtime or shutdown of the ISMs Global application program.

5.0.9 If the malfunction cannot be rectified or if only an interim solution has been arrived at, the rectification will be carried out no later than the next business day following the reporting of the malfunction.

5.0.10 ISMs Global shall provide a telephone number for the 24 hour hotline. The Customer may contact this number in the event of serious system malfunctions. If ISMs Global supplies support that does not relate to any of its products provided, it will charge its usual hourly rate for its service.

5.0.11 ISMs Global charges a calculated rate fee, pursuant to Annexure 1, for providing 24 hour support & maintenance.

5.0.12 Invoicing for the costs of using the 24 hour service & maintenance agreement will be effected monthly, together with a written record of the services rendered in accordance with the prices outlined in Annexure 1.

5.0.13 In order to avoid unnecessary costs, the Customer explicitly nominates the persons who are authorised to call the 24 hour hotline. If no such nomination is effected, ISMs Global staff may assume that any of the Customer's employees are authorised accordingly.

6.0 Customer co-operation

During this Agreement, the Customer shall:

6.1 make available the system environment to which the service refers (e.g. hardware and operating system) in accordance with ISMs Global‟ stated requirements. The Customer undertakes to keep the system environment and the staff required for its servicing available at all times in a manner which ensures disruption-free operation.

6.2 support ISMs Global comprehensively in providing the services, in particular by providing detailed specifications of the requirements in writing, responding to questions without delay, performing intermediate tests and tests of work results etc.

6.3 provide the relevant requirements for the services to be performed (work space, processor time, access to hardware and software, use of telecommunications facilities, authorisations etc.).

6.4 nominate a contact person who is capable of providing ISMs Global with necessary information and making decisions or causing decisions to be made without delay.

6.5 be responsible for backing up its data in a manner consistent with the state of the art. Unless expressly notified otherwise in writing, ISMs Global staff members may always rely on all data with which they come into contact having been backed up.

6.6 allow ISMs Global, its servants and agents, full, free and safe access on and off site and all relevant documentation to permit ISMs Global to fulfill its obligations pursuant to this Agreement;

6.7 immediately notify ISMs Global of any malfunction of the Software or Equipment;

6.8 operate the Software in the manner for which it is designed and maintain, to the best of its ability, the appropriate operational conditions as specified by ISMs Global for associated Equipment;

6.9 provide adequate on-Site facilities and assistance to enable ISMs Global to fulfill its obligations pursuant to this Agreement;

6.10 not, without the prior written consent of ISMs Global, allow any adjustments, modifications, alterations, repairs or servicing to the Equipment to be carried out by persons other than authorised Company personnel;

6.11 not, without the prior written consent of ISMs Global, move, alter, modify, add to, detach from or interface additional programs, applications or third-party software to ISMs Global property. The Customer acknowledges that if ISMs Global's consent is given pursuant to this sub-clause, ISMs Global is entitled to revise the maintenance fee as a pre-requisite of giving its consent.

6.12 bear sole responsibility for any disadvantage or additional costs arising from a breach of its duties pursuant to clause 6.0; subsections 6.1 - 6.11.

7.0 Warranty for products provided, particularly hardware and software installation

7.1 ISMs Global warrants that the services to be provided shall be performed in accordance with the contract.

7.2 The warranty period shall be twelve months. It commences with the Customer accepting the product/s or, in case the Customer fails to accept the product/s, with the expiry of the acceptance period as per clause 8.4.

7.3 The Customer shall notify ISMs Global of any faults in writing, in a comprehensible manner, without delay and indicating the information appropriate for rectifying the fault.

7.4 To the extent that restricted usability or defects are or may be (partially) caused by the Customer due to inappropriate operation, Customer interference or the Customer‟s existing system environment, the warranty shall be voided, unless and to the extent that the Customer is able to demonstrate that these are not causative factors for the defect occurring. The Customer‟s rights under the warranty shall further be voided if no notice of defects has been issued as per paragraph 8.3. If ISMs Global provides services regardless and it is subsequently revealed that these were not covered by warranty, such services shall be invoiced according to the ISMs Global schedule of prices and fees valid at the time.

7.5 ISMs Global may fulfill its warranty duties primarily by rectifying defects. The actual nature and/or extent of the rectification is determined by the degree the operation is affected.

7.6 The Customer shall support ISMs Global in rectifying defects to the extent required.

7.7 If the defect cannot be rectified – if applicable following several attempts – the Customer shall be entitled to reduce the remuneration payable or cancel the agreement or terminate it without notice respectively depending on statutory prerequisites.

8.0 Acceptance of works performed, particularly of hardware and software installation

8.1 In the event that a contract for works to be performed relates to several individual products which can be utilised independently of each other, these individual products shall be accepted separately and independently of each other.

8.2 Once ISMs Global has fully completed its services to be performed, it shall submit to the Customer the product of its services for full acceptance. Acceptance shall take place following installation and a test run or go-live. The date of acceptance shall be the date on which the Customer signs the acceptance sheet without reservations. To the extent that the acceptance sheet sets out defects or missing functions or disruptions respectively, the date of acceptance shall be the first date on which the last defect has been rectified. If the Customer refuses to sign the acceptance sheet, it must issue a written notice of defects within seven working days. If the Customer fails to provide such a notice within this period, the products shall be considered to have been accepted.

8.3 If the Customer submits a written notice of defects within the applicable deadline, ISMs Global shall rectify the defects listed in the relevant notice, taking into account the project plan, and shall resubmit the product of its services for full acceptance. The Customer shall check the product within a deadline of five working days. If the Customer fails to submit a notice within the new acceptance period, the product shall be considered to have been fully accepted.

8.4 If a Customer has started using individual products or the entire product, these shall be considered to have been accepted after a period of seven working days following start of use.

9.0 Deadlines, force majeure

9.1 Deadlines are not binding unless they have been expressly described as binding.

9.2 ISMs Global shall bear no responsibility for disruptions due to strikes, lock-outs, force majeure, and unavailability of staff members without negligence, default of its own suppliers, official intervention or similar circumstances. In the event that ISMs Global suffers disruptions in the completion of an order due to such circumstances or due to Customer input or information not being provided in a timely manner, deadlines shall be considered extended by the duration of the disruption as well as by a reasonable start-up period once the disruption has been rectified. ISMs Global shall notify the Customer of disruptions in a timely manner.

9.3 In the event that ISMs Global defaults, the Customer may terminate the contract partially or in its entirety once an extended deadline has been granted without success. Reminders and extensions of deadlines must be in writing. Extensions of deadlines must always be for at least twelve working days. Services already provided shall be invoiced as per clause 5.

10.0 Termination

10.1 If either party ceases to perform or fails to comply with any of the terms and conditions of this Agreement or such failure is not remedied within 30 days of receipt of written notice thereof then the other party shall have the right to terminate this Agreement without further liability to the defaulting party.

10.2 ISMs Global may terminate this Agreement at any time upon giving the Customer 3 months written notice if it is of the opinion that the supporting hardware cannot be maintained in proper working order and has so advised the Customer in writing.

11.0 Amendments to services

11.1 During the term of an individual contract, both contractual partners may make written suggestions for amendments to the services to be provided as agreed, both in relation to various stages of development and in relation to the timescale or in any other manner.

11.2 If the Customer suggests a software amendment, ISMs Global shall, within ten working days of the specifications of works being available, inform the Customer in writing, indicating whether the amendment is feasible and how it will affect the existing contract, taking into particular account the timescale, additional expenditure and rescheduling of deadlines.

11.3 Within a period of another five working days, the Customer shall inform ISMs Global in writing whether it wishes to pursue its suggested amendment or whether it wishes to uphold the prior contract with its existing terms. If assessing a suggested amendment involves significant expenditure, ISMs Global may separately invoice the expenditure incurred due to the assessment.

11.4 If ISMs Global suggests an amendment, the Customer shall inform it within ten working days whether or not it agrees to the suggested amendment.

11.5 As long as the Customer has not agreed to an amendment, works shall be continued as per the existing contract or shall be suspended partially or in their entirety upon the Customer‟s relevant instructions.

12.0 Liability

12.1 ISMs Global shall only pay damages in the following cases, regardless on which legal basis they are claimed (e.g. failure to perform, impossibility, warranty, default, culpa in contrahendo, breach of secondary duties or tort):

- in case of intent, to the full amount; in case of negligence and in cases where an assured property is lacking only to the amount of the foreseeable damage which was to be prevented by the duty of care or the assurance of the relevant property; this measure of liability does not apply to cases of damages arising from injury to life, body or health;

- in other cases: only if an essential duty has been breached, placing the contractual purpose at risk; on the basis of default and impossibility only ever to a maximum of AUD 50,000.00 per event and to a total maximum of AUD 150,000.00 for the individual contract, provided the contractual amount exceeds this amount, otherwise to a total maximum of the contractual amount;

- in the remainder: to the extent that ISMs Global is insured against the damages incurred, to the extent of insurance coverage and subject to the condition precedent of insurance payment.

12.2 The objection of co-liability shall remain open. Statutory liability for personal damages and in accordance with product liability regulations shall remain unaffected.

12.3 A period of limitation of one year shall apply for Customer claims due to a failure to perform, impossibility, default, culpa in contrahendo, breach of secondary duties or cancellation of the contract. This period shall begin with the date on which the Customer becomes aware of the claim.

13.0 Exclusion of warranty and liability

13.1 All warranty and liability shall be excluded for functional defects caused by inappropriate operation, inappropriate use, unsuitable hardware or data media, system-related software components (e.g. operating systems and operating system parts, databases, server software, virus scanners, firewalls, drivers etc.), viruses of any kind or inappropriate operating or transport conditions on the Customer‟s side, unless and to the extent that the Customer is able to demonstrate that these are not causative factors for the defect occurring.

13.2 The Company‟s rights under the warranty shall further be voided if no notice of defects has been issued for an obvious defect as per paragraph 8.3.

13.3 If ISMs Global provides services regardless and it is subsequently revealed that these were not covered by warranty, such services shall be invoiced according to the ISMs Global schedule of prices and fees valid at the time.

14.0 Confidentiality and mutual loyalty

14.1 The contractual parties undertake that they shall hold confidential for an unlimited period of time all knowledge of confidential information and business secrets obtained from the respective other contractual partner within the terms and conditions of fulfilling the contract and that they shall use such information and secrets for the purposes of fulfilling the contract.

14.2 The Customer undertakes that it shall not make the objects of the contract available to third parties. Staff members who have access to the objects of the contract shall be notified of essense‟ copyright and the duty of confidentiality.

14.3 ISMs Global shall oblige its staff members to comply with privacy laws.

14.4 The obligations pursuant to paragraphs (1) and (2) above shall not extend to information:

- which was already obvious and therefore easily and freely available to any third person at the time it was transmitted by the respective other contractual partner or which became obvious following its transmission by the respective other contractual partner without the contractual partner‟s negligence; or

- which was already known to a contractual partner at the time it was transmitted by the respective other contractual partner and which was neither directly nor indirectly derived from the other contractual partner; or

- which, following its transmission by the respective other contractual partner, was legally made available to a contractual partner by a third person who was not subject to a duty of secrecy towards the other contractual partner; or

- which was independently developed by the parties without recourse to confidential information of the other contractual partner; or

- which must be disclosed by the contractual partner on the basis of statutory obligations.

14.5 The Customer and ISMs Global undertake that they shall act loyally towards each other. In particular they shall not hire or otherwise employ staff members or former staff members who previously worked on the mutual contractual services until a period of twelve months has expired following the termination of the cooperation.

14.6 The Customer shall not assign, transfer or otherwise dispose of its rights or obligations under this Agreement to any other person, firm or company other than with the prior written consent of ISMs Global.

15.0 Reservation of title

ISMs Global retains ownership of the supplied products and the licence rights until full payment of all existing and future claims such as the purchase price, default interest and legal costs, irrespective of the legal basis for the claims.

16.0 Written form, right to amend, applicable law, jurisdiction, severability clause, miscellaneous

16.1 Any amendments or supplements to these terms and conditions must be made in writing. This also applies to the written form requirement being cancelled or amended. To the extent that written form has been agreed on, electronic or messaging form shall not be sufficient.

16.2 ISMs Global staff members are not authorised to conclude/amend or cancel contractual agreements. ISMs Global can therefore only accept agreements deviating from the “ISMs Global Sales Agreement” and the existing framework terms which are detrimental to ISMs Global if these have been confirmed in writing by Company‟ legal representatives.

16.3 ISMs Global is authorised to save and process personal data within the framework of the Customer relationship.

16.4 Should individual clauses of these terms and conditions (General or Specific Terms) be legally ineffective or should they become legally ineffective due to later circumstances or should the contract as concluded be revealed to be incomplete, the remaining conditions shall remain legally effective. The ineffective or incomplete clause shall be replaced by an appropriate clause which is as close as possible to the legal intent of the contractual parties, had they considered the relevant issue.

17.0 Special terms and conditions for software licensing

Software Licensing and the accompanying documentation

17.1 ISMs Global grants the Customer an indefinite, non-transferable and non-exclusive right to use its Software applications as detailed in Schedule One in accordance with the defined scope of use. ISMs Global will make available to the Customer the accompanying documentation for its systems. The Customer will take precautions for an indefinite period to ensure that the software and the accompanying documentation, including versions that have been adapted, upgraded or modified, are not made accessible to any third party without the written consent of ISMs Global management.

17.2 ISMs Global undertakes to service and maintain its software in accordance with its standard conditions and prices. The continued use of the system is dependent on the payment of the obligatory support & maintenance fees.


17.3 The software warranty covers:

- error-tracing;

- error and bug fixing for the duration of the contracted term.

17.4 Errors, i.e. deviations from the program specification detailed in the product sheet, will be fixed by supplying a new update of the software. The foregoing is preconditioned on the error being reproducible and in each case arising in the latest update adopted by the Customer. The Customer will provide ISMs Global with all of the documents and information necessary to rectify the error. ISMs Global will furnish the Customer with a workaround solution until the new update is delivered.

18.0 Special Terms and conditions for support & maintenance

Scope of application

The following terms and conditions shall apply between ISMs Global and the Customer for the support and maintenance of its software systems, unless otherwise agreed in writing.

18.1 Support & maintenance performance generally refers to one unit of the software product as determined by contract and installed at the Customer's site. A software "unit" means that the software is installed and used on a particular computer system and under a particular operating system (single-user application).

18.2 The contractual relationship commences upon the installation of the software and is entered into for an indefinite period of time. The contractual relationship may be terminated by the end of each calendar year subject to three months' prior notice.

Scope and duration of support & maintenance performance

Basic support & maintenance performance, covered by the flat-rate maintenance fee, includes:

18.3 Enhancements and improvements of purchased software from ISMs Global.

18.4 Supply or adaptation of existing documentation records.

18.5 Remedying of any faults and the associated documentation records provided which ISMs Global is responsible for and which negate or substantially diminish the value of or the suitability for the use stipulated by the licence agreement.

18.6 ISMs Global shall perform the maintenance during business hours on business days from 9am to 5pm.

18.7 Throughout the support & maintenance period, the Customer will receive telephone advice and support in the application of ISMs Global software programs as well as with respect to operating errors and program bugs.

18.8 Telephone-based training is not included. The prerequisite for the performance of maintenance on the system is remote maintenance via ISDN card or internet.

18.9 In the event of a software program breakdown, the Customer will be given a replacement operational version.

18.10 ISMs Global support and maintenance does not extend to in-house developments, software by other manufacturers (e.g. pcAnywhere, MS Office, anti-virus scanner etc.) that may be supplied to the Customer. Such software is covered by the support and maintenance agreements expressly enter into with their respective suppliers.

19.0 Additional services subject to fees

Additionally, the Customer may avail itself of the following services, which are subject to a fee charged according to the extent of usage:

19.1 Installation of the most recent version of ISMs Global standard edition software in accordance with this clause (12).

19.2 Adaptation and installation of ISMs Global standard edition software in keeping with substantial changes of statutory or other binding provisions.

19.3 Remedying of any faults, which essense is not responsible for.

19.4 Performance of any additional training required due to modifications/enhancements made or arranged for by ISMs Global.

19.5 Changeover/conversion of ISMs Global standard edition software to another operating system, a different hardware system or programming language, to the extent that a corresponding version is offered by ISMs Global.

19.6 Advice on all issues relating to the use or application of the software product, including passing on any use and application experience by other users.

19.7 Installation on a different computer system.

19.8 Adjustment of Configuration, Master Data and/or Interfaces.

20.0 Entire agreement

This Agreement, Schedule One and Annexure incorporated herein constitute the whole of the Agreement and understanding between ISMs Global and the Customer. Any additions or modifications hereto shall be made in writing and shall only be effective if signed by the duly authorised signatories of the parties.

21.0 Governing law

This Agreement is to be governed by, and construed in accordance with, the laws of Australia.

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