Professional Services Agreement - Vested Development Inc. and Datawatch Corp.
PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement ("Agreement") is entered into on May
16, 2002 ("Effective Date"), by and between:
1. VESTED DEVELOPMENT INC. ("VDI"), whose offices are at 5 New
England Executive Park, 1st Floor, Burlington, MA 01803.
2. DATAWATCH CORPORATION ("DATAWATCH"), whose offices are at 175
Cabot Street, Suite 503, Lowell, MA 01854
OPERATIVE PROVISIONS
1 TERM
This Agreement is effective from Effective Date until terminated pursuant
to, and in accordance with the provisions of this Agreement.
2 THE SERVICES
2.1 VDI has cooperated with Datawatch to develop specifications (the
"Specifications") for software for a new version of Monarch ES (the
"Software") as set forth as part of the Statement of Work ("SOW") to be
agreed upon and executed by both parties.
2.2 Datawatch may in its sole and absolute discretion amend the Specifications
from time to time.
2.3 VDI shall design, create, develop, test and document the Software in
accordance with the Specifications.
2.4 VDI shall test the Software so as to verify that the Software complies
with, and functions and performs fully in accordance with, the
Specifications and test plans developed by VDI and any additional test
plans provided by Datawatch as provided in Sections 2.4.1 and 2.4.2 of this
Agreement before delivering the source code and executable code form of the
Software in electronic form to Datawatch. All test plans developed by VDI
must be approved in writing by Datawatch.
2.4.1 VDI shall provide "Black Box" testing (as defined on Schedule C
hereto) of the Software so as to verify that the Software
functions and performs in accordance with the Specifications and
in accordance with any additional scenario test plans ("Black Box
Test Plans") to be developed by Datawatch and delivered to VDI
within thirty (30) days of the Effective Date of this Agreement.
2.4.2 VDI shall provide "White Box" testing (as defined on Schedule C
hereto) so as to verify that the Software functions and performs
in accordance with the Specifications and in accordance with any
additional scenario test plans ("White Box Test Plans") to be
developed by Datawatch and delivered to VDI within fifteen (15)
days of the delivery of the first beta version of the Software to
Datawatch.
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2.5 VDI shall develop and deliver to Datawatch complete product documentation
as specified in the SOW and, as requested, shall explain to Datawatch's
nominated representative, the Software and its functions, features and use.
2.6 All of the Services to be provided to Datawatch by VDI hereunder shall be
hereinafter referred to collectively as the "Services". All Services to be
performed by VDI shall be performed by employees of VDI acting within the
scope of their employment.
3 PROVISION OF THE SERVICES
3.1 VDI and Datawatch shall agree upon the SOW that defines a work package for
the Software to be designated for the purposes of this contract version
3.1. The SOW includes the Specifications for the Software to be developed
which shall be developed according to such Specifications. The SOW contains
a timetable and milestones for development of the Software. Each time VDI
delivers Software to Datawatch, VDI shall also deliver a copy of the
current source code for the Software.
3.2 VDI shall ensure that the Services will be performed with all due care,
skill and attention and in accordance with best industry practices or in
accordance with development standards as may be agreed between the parties
from time to time.
3.3 VDI shall ensure that the Services are provided in accordance with the plan
and timetable as set forth in the SOW. Where delays in agreed timetable are
attributable to Datawatch and VDI promptly notifies Datawatch in writing of
such delays, the timetable shall be adjusted accordingly.
3.4 VDI shall deliver alpha, beta and release candidate version of the Software
to Datawatch in accordance with the timetable set forth in the SOW. Upon
each delivery, Datawatch shall have a period of up to 7 days (in the case
of the alpa and beta versions) and 30 days (in the case of the release
candidate version) to determine if such version of the Software in
acceptable. If the Software is not acceptable, Datawatch shall notify VDI
of the defects in the Software, and VDI shall have a period of up to 30
days to correct such defects.
3.5 When the release candidate version of the Software performs in accordance
with the Specification and has been developed in accordance with the SOW,
Datawatch shall formally accept the Software.
3.6 Other than for the agreed SOW, there is no obligation on Datawatch to
provide work for VDI. There is no obligation on VDI to provide Services
outside of the SOW.
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4 CHARGES:
4.1 VDI shall develop and deliver the Software to Datawatch in consideration of
the payment of commissions on the Net License Revenue (as hereinafter
defined) generated by Datawatch (the "Commissions") for the sale of the
Software developed under this Agreement in the twelve (12) calendar months
beginning with the calendar month immediately following written acceptance
by Datawatch of the "RELEASE TO MANFACTURING"(RTM) build of the Software.
The Commission rate shall be calculated as follows:
4.1.1 A Commission of 10% shall be paid on Net License Revenue up to
and including one million five hundred thousand dollars
($1,500,000).
4.1.2 A Commission of five percent (5%) shall be paid to VDI on Net
License Revenue in excess of one million five hundred thousand
dollars ($1,500,000).
4.1.3 "Net License Revenue" shall mean license revenues recognised by
Datawatch with respect to the Software (but not prior versions of
the Software), net of returns and credits.
4.2 Datawatch shall provide to VDI a monthly commissions report within thirty
(30) days after the month in which the Net License Revenue was generated.
4.3 Datawatch shall pay VDI accumulated Commissions within sixty (60) days
after the end of the month in which the Net License Revenue was generated.
4.4 VDI shall provide Datawatch with a time and materials report on a monthly
basis for work completed as part of this Agreement for the purposes of
calculating the alternative payment amount which may be payable by
Datawatch to VDI as provided in Section 9.3.2 upon termination of this
Agreement.
4.5 If the Software is not in acceptable form within 60 days after the date
scheduled in the SOW for delivery to Datawatch of the release candidate
version of the Software, the period for the payment of Commissions shall be
reduced by one month for each month from the end of such 60 day period
until acceptance.
4.6 Datawatch shall assign a "primary point of contact" for technical questions
related to the Services as defined in the SOW. As a necessary function to
provide the Services, VDI must present technical questions related to the
SOW to this point of contact. Datawatch understands and agrees that
excessive non-responsiveness to these questions can have a significant
impact on VDI's ability to meet the timetable set forth in the SOW. VDI
shall clearly warn Datawatch in advance in writing if excessive
non-responsiveness will cause such changes. VDI shall also designate a
"primary point of contact" for issues related to this Agreement and the
SOW. The initial primary point of contact for Datawatch and VDI is
specified in the SOW.
5 INTELLECTUAL PROPERTY RIGHTS
5.1 If at any time during the term of this Agreement VDI should in the course
of providing the Services create any design or copyright work (including
the Software and any other computer program), (all of the aforesaid being
collectively "the Development") in each case whether or not capable of
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protection in any part of the world by patent or registration and whether
or not relating directly or indirectly to the business of Datawatch, VDI
shall treat the Development and all information relating to it as
"work-for-hire" and confidential to Datawatch and shall promptly disclose
full details of the Development, including all drawings and models (if
any), to a director of Datawatch.
5.2 All ownership and other intellectual property rights whatsoever (including,
without limitation, all intellectual property rights together with the
right to any revival, renewal or extension of any such rights) and property
in the Development anywhere in the world, whether those rights exist or are
of a nature or type which exist at the time of this Agreement or shall only
come into existence afterwards, (collectively the "Rights') shall belong to
and (to the maximum extent possible) vest in Datawatch absolutely for their
full terms (including any revival, renewal or extension).
5.2.1 Certain software programs or routines developed and/or owned by
VDI through the course of it's regular business activities may be
incorporated and/or utilized in the Development provided to
Datawatch. Notwithstanding the terms in Section 5.2 VDI hereby
grants to Datawatch a non-exclusive, perpetual, worldwide
royalty-free license to such programs in the case that ownership
is not transferred.
5.3 By way of confirmation, and for the avoidance of doubt, in consideration of
Datawatch entering into this Agreement VDI hereby assigns to Datawatch
(including, to the extent necessary, by way of assignment of future
copyright) in each part of the world all Rights which are in that part of
the world capable of assignment, for their full terms (including any
revival, renewal or extension).
5.4 VDI hereby irrevocably and unconditionally waives any and all Rights, which
cannot be assigned to Datawatch and grants to Datawatch a general,
perpetual, worldwide royalty-free license of all such Rights.
5.5 Notwithstanding any prior termination of this Agreement, at the request and
expense of Datawatch VDI shall:
5.5.1 Execute, acknowledge, seal and deliver all documents, including
but not limited to all instruments of assignment, patent and
copyright applications and supporting documentation, and perform
all acts, that Datawatch may reasonably request to perfect,
secure, defend and maintain Datawatch's rights hereunder and to
carry out the intent of this Agreement. VDI agrees to assist
Datawatch, at Datawatch's expense, in every proper way to obtain
for Datawatch's sole benefit, in any and all countries, patents,
trademarks, copyrights or other legal protection for all
deliverables and intellectual property rights that by virtue of
Section 5 hereof are the sole property of Datawatch. Datawatch
shall reimburse VDI for its reasonable expenses incurred in the
foregoing.
5.5.2 Provide to Datawatch all such assistance as Datawatch may require
in relation to the resolution of any questions or disputes
concerning the Development or the Rights.
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5.6 Decisions as to the procuring of any protection for any Development
(including patent or registration), and the exploitation of any
Development, shall be in the sole and absolute discretion of Datawatch.
6 WARRANTY & LIMITATION OF LIABILITY
6.1 Datawatch shall be responsible for implementation, installation, and
operational acceptance of the Software product developed under this
agreement. Reasonable telephone support will be provided by VDI to
Datawatch during initial testing, implementation and deployment. After the
warranty period, VDI, under T&M billing, shall act as an "escalated
technical support" for technical questions generated by Datawatch staff on
behalf of Datawatch customers during the duration of this contract. At the
conclusion of work specified by the SOW, Datawatch shall have the exclusive
option to sign an ongoing T&M agreement for ongoing escalated technical and
development support.
6.2 VDI hereby warrants (a) that the Software and Services provided hereunder
shall at all times conform to the specifications of the SOW and (b) that
VDI has and will have title to the goods and agrees to indemnify and hold
Datawatch harmless from any and all damages, liability, loss, costs or
expenses, including, but not limited to, reasonable attorney's fees and
costs, arising out of or resulting from any actual patent, copyright, or
trade secret claim or action regarding the goods, or from any breach of
warranty or misrepresentation under the terms of this Agreement. THERE ARE
NO OTHER EXPRESS WARRANTIES OF VDI'S SOFTWARE PRODUCTS OR SERVICES
FURNISHED HEREUNDER. VDI DISCLAIMS WITH REGARD TO SUCH SOFTWARE PRODUCTS
AND SERVICES ALL OTHER WARRANTIES WHETHER EXPRESS OR IMPLIED, ORAL OR
WRITTEN, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
6.3 DATAWATCH'S EXCLUSIVE REMEDY FOR A DEFECT IN VDI'S SOFTWARE MARKETED AND
DISTRIBUTED UNDER THIS AGREEMENT SHALL BE THAT IF ANY DEFECTS MATERIALLY
AFFECT THE PERFORMANCE OF THE SPECIFIED FEATURES OR FUNCTIONS, AS DEFINED
BY THE SOW AND THE ASSOCIATED PROJECT DOCUMENTS (INCLUDING BUT NOT LIMITED
TO THE REQUIREMENTS DOCUMENT(S), THE FUNCTIONAL DESIGN DOCUMENT(S), THE
TECHNICAL DESIGN DOCUMENT(S) AND/OR THE TEST PLAN(S) ) AFTER THE FINAL
WRITTEN ACCEPTANCE OF A "RELEASE TO MANFACTURING"(RTM) BUILD OF THE PRODUCT
BY DATAWATCH, THE DEFECT WILL BE REPAIRED OR THE SOFTWARE WILL BE REPLACED.
IF AFTER VDI HAS BEEN PROVIDED REASONABLE OPPORTUNITIES TO REPAIR THE
DEFECT, THIS LIMITED REMEDY FAILS OF ITS ESSENTIAL PURPOSE WITH REGARD TO
THE SOFTWARE OR A UNIT OF SOFTWARE WITHIN A PERIOD OF TIME NOT TO EXCEED 90
DAYS FROM DATAWATCH'S ACCEPTANCE OF THE SOFTWARE, VDI WILL REFUND TO
DATAWATCH THE PRICE PAID FOR THE DEFECTIVE SOFTWARE OR UNIT OF SOFTWARE AND
COMMISSIONS OR OTHER AMOUNTS PAYABLE WITH RESPECT TO THE SOFTWARE WILL BE
REDUCED TO REFLECT THE DEFECTIVE UNIT. EXCEPT FOR A CLAIM FOR
INDEMNIFICATION UNDER 6.2(B) OR 7.3, VDI'S LIABILITY FOR DAMAGES TO
DATAWATCH
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RELATED TO ANY SOFTWARE FOR ANY CAUSE WHATSOEVER, REGARDLESS OF THE FORM OF
ANY CLAIM OR ACTION, SHALL NOT EXCEED THE AGGREGATE PRICE PAID FOR THE
SOFTWARE UNDER THIS AGREEMENT. VDI SHALL IN NO EVENT BE LIABLE FOR ANY LOSS
OF DATA, PROFITS OR USE OF THE SOFTWARE, OR FOR ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF THE SOFTWARE.
6.4 IN NO EVENT SHALL VDI BE LIABLE TO DATAWATCH FOR ANY DAMAGES (i) CAUSED BY
ALTERATIONS OR MODIFICATIONS TO THE SOFTWARE WITHOUT VDI'S WRITTEN
APPROVAL; (ii) DUE TO DETERIORATION DURING PERIODS OF STORAGE OR USE OF THE
SOFTWARE. EXCEPT FOR A CLAIM FOR INDEMNIFICATION UNDER 6.2(B) OR 7.3,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER.
7 CONFIDENTIAL INFORMATION
7.1 VDI acknowledges that it may on occasion have access to, and be entrusted
with, information in respect of the business of Datawatch and its
customers, suppliers, dealings, transactions, affairs, plans and proposals,
which information is secret or confidential and important to Datawatch or
the subject of an obligation of confidence owed to a third party or
protected by legislation. In this Agreement such information is called
"Confidential Information" and includes, without limitation, confidential
or secret information relating to Datawatch's
>> ideas
>> business methods
>> finances
>> prices
>> business, financial, marketing, development or manpower plans
>> customer lists or details
>> computer systems and software
>> know-how or other matters connected with the products (and their
operation) or Services used, marketed, provided, created or obtained
by Datawatch, including designs, structures, source code and object
code for any computer programs produced or used by Datawatch,
including, without limitation, the Software.
>> confidential or secret information concerning its relationships with
actual or potential clients or customers and the needs and
requirements of such persons
7.2 VDI acknowledges that the disclosure of Confidential Information (whether
directly or indirectly) to actual or potential competitors of Datawatch
would place Datawatch at a competitive disadvantage and that any
unauthorized disclosure or misuse of Confidential Information would
irreparably and immediately harm Datawatch and that in such event Datawatch
could not be made whole by monetary damages alone. In the event of such a
breach and without prejudice to any rights and remedies otherwise available
to Datawatch, Datawatch shall be entitled to seek equitable relief by way
of injunction without the requirement of posting any bond in connection
therewith.
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7.3 VDI shall not other than in the proper performance of their duties under
this Agreement, either during the term of this Agreement or at any time
after its termination:
7.3.1 disclose Confidential Information to any person except as
authorized by Datawatch; or
7.3.2 use Confidential Information for their own purposes or for any
purposes other than those of Datawatch; or
7.3.3 through any failure to exercise all due care and diligence, cause
or permit any unauthorized disclosure of any Confidential
Information
7.4 The restrictions in clause 7.3 shall cease to apply to information other
than Personnel Data which (otherwise than through the default of VDI)
becomes available to the public generally, with effect from the time that
any such information becomes available to the public generally.
7.5 VDI shall indemnify Datawatch and keep it indemnified in respect of any
breach of the obligations and restrictions in clause 7.3.
7.6 Each of the restrictions set out above, and each of the categories of
Confidential Information set out above, are separate and severable and
enforceable accordingly. If any one or more of such restrictions (or part
of a restriction) or categories (or part of a category) is held to be
against the public interest, or unlawful or in any way unenforceable, the
remaining restrictions (or remaining part of the restriction) and
categories (or the remaining part of the category) shall continue in full
force and effect and shall bind VDI.
7.7 All computer programs and other software, notes, memoranda, records,
papers, documents, correspondence and writing (which, without limitation,
shall collectively include information recorded or stored in writing or on
optical or magnetic tape or disc or otherwise recorded or stored for
reproduction whether by mechanical or electronic or optical means and
whether or not such reproductions will result in a permanent record being
made) relating to the business of Datawatch which from time to time may be
delivered to, or otherwise come into the possession of, VDI (whether made
by it or not), shall be and shall remain the property of Datawatch and VDI
shall procure the delivery of them to Datawatch immediately upon request
and shall not make or keep any copies or extracts of them.
8 NON-SOLICITATION OF STAFF
8.1 During the term of this Agreement, Datawatch shall not solicit or entice
away from Vested Development, Inc., any individual in the employment of VDI
in a managerial supervisory or technical capacity who has had personal
contact or dealings with Datawatch or its representatives in relation to
the Services.
8.2 During the term of this Agreement and for a period of six months following
its termination, VDI shall not employ any individual who was employed by
Datawatch in a managerial supervisory or technical capacity at any time
during the immediately preceding period of six months who at any time
during that period of employment with Datawatch had personal contact or
dealings with VDI or its representatives in relation to the Services.
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9 TERMINATION
9.1 Either party to this agreement shall have the right to terminate this
Agreement upon 30 days written notice if the other has materially failed to
comply with the terms and conditions of this Agreement or if all agreed
SOWs have been delivered and outstanding fees or invoices which are not the
subject of a genuine dispute have been paid.
9.2 Notwithstanding 9.1 above, Datawatch shall have the right to terminate the
Agreement or the work on SOW if VDI, despite repeated attempts, is unable
to make the developed Software perform in accordance with the
Specifications. In such event any monies paid to VDI for the SOW will be
returned and no further monies against the SOW will be payable. Datawatch
shall retain its ownership of the Software and all Rights.
9.3 Upon termination of the Agreement except under clause 9.2, within ten
business days thereafter, Datawatch shall elect one of the following:
9.3.1 Datawatch shall surrender its ownership of the Software with no
further payment obligation to VDI, and must either deliver to VDI
or, at Datawatch's option, destroy the original and all copies of
the Software and Documentation confirming in writing that it has
fully complied with this provision and VDI shall return any
amounts paid to VDI prior to such termination by Datawatch
hereunder; or
9.3.2 Datawatch shall retain its ownership of the Software and all
Rights, and in lieu of payment of the fees set forth in Section
4.1, shall pay to VDI the aggregate time and materials amount
incurred reduced by the aggregate amount of Commissions paid or
as determined in Section 6.3.
9.4 Termination of this Agreement, howsoever caused, does not free either party
from their respective obligations to comply with all the terms of the
Agreement which call for performance prior or subsequent to the termination
date, including the VDI's obligation to protect Confidential Information
and to return such confidential information as provided in this Agreement.
10 EFFECTS OF TERMINATION
10.1 Termination of this Agreement is without prejudice to any rights or duties
or liabilities of either party against the other which may have accrued up
to the date of such termination.
10.2 Upon termination of this Agreement for any reason, all rights and
obligations of the parties under this Agreement shall cease, except as
follows:
10.2.1 Datawatch' liability for fees and other charges accrued prior to
the termination date shall not be extinguished by termination of
this Agreement, and such amounts shall be due and payable as and
to the extent provided in Section 9.3. Any credits to the
Datawatch will be paid in full.
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10.2.2 Datawatch shall retain all Rights and shall have the right to
market, distribute or use any Software, for which is has paid the
applicable fee as and to the extent provided in Section 9.3.
10.3 Rights granted by VDI to Datawatch under this Agreement shall continue in
full force with respect to any software for which it has paid the
applicable fee.
11 FORCE MAJEURE
11.1 Neither party shall be in breach of this Agreement nor liable to the other
party in any way whatsoever for any failure or delay in performing any of
its obligations under this Agreement due to any cause beyond the reasonable
control of that party ("Force Majeure") provided always that:
11.1.1 the date performance of the obligation, which has been delayed by
the Force Majeure, shall be deemed suspended only for a period
equal to the delay caused by that Force Majeure;
11.1.2 the party seeking to exempt itself from liability by virtue of
the provisions of clause 11.1. has given written notice to the
other party within 14 days of becoming aware of the Force Majeure
event;
11.1.3 the party seeking to exempt itself from liability by virtue of
the provisions of clause 11.1 shall at all times use its
reasonable endeavors to mitigate the severity of the Force
Majeure;
11.1.4 if the delay caused by the Force Majeure continues for a
continuous period of 3 months the party not seeking to exempt
itself from liability will have the right to terminate this
Agreement forthwith by notice at any time after the expiry of
such 3 month period without incurring any liability to the other
party as a result;
11.1.5 the party seeking to exempt itself from liability by virtue of
the provisions of clause 11.1 will not be entitled to payment in
respect of extra costs and expenses incurred by virtue of the
Force Majeure.
12 VARIATIONS
No variation to this Agreement will be effective unless it is in writing and
signed by an officer of Datawatch and Vested Development, Inc. This Agreement
sets forth the entire agreement of the parties regarding the subject matter
hereof, and supersedes all prior promises, agreements or representations,
whether written or oral, regarding such subject matter.
13. INDEMNIFICATION
VDI agrees to indemnify and hold harmless Datawatch and its officers, directors,
employees, agents, and representatives from any and all losses, liabilities
damages, reasonable costs or expenses, whatsoever as incurred, including
reasonable attorneys' fees, based on a claim that any software owned by VDI as
described in Section 5.2.1 and incorporated in the Development, for which
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Datawatch has been granted pursuant to Section 5.2.1 a non-exclusive perpetual
license, infringes any United States copyright or patent, or is defamatory or
slanderous, provided that Datawatch provides to VDI (a) notice in writing of the
claim within twenty-one (21) days after Datawatch's discovery or notification of
same, (b) all information in Datawatch's control regarding the claim, (c)
reasonable cooperation and assistance in defending the claim of VDI's expense,
and (d) the opportunity to exercise sole control of the defense, and all
negotiations pertaining to the claim. VDI shall have the right, at its expense,
either to procure the right for the Datawatch to continue to use the software,
or to replace or modify it so it becomes non-infringing. If neither of the
foregoing alternatives is available on terms that VDI, in its sole discretion,
deems commercially reasonable, Datawatch shall, upon written request of VDI,
return the infringing software in its possession, in which event VDI shall
refund to Datawatch the price paid by Datawatch for such software.
14 GENERAL
14 (a) Independent Parties, No Third Party Beneficiaries. The parties hereto are
independent contractors, and are not partners, co-venturers, agents or
representatives of the other party. Nothing in this Agreement will be
interpreted to create any obligations except between the parties hereto, and no
person or entity will be regarded as a third-party beneficiary hereunder.
14 (b) Governing Law, Jurisdiction, Severability. This Agreement shall be
governed by and construed and enforced in accordance with the substantive laws
of the Commonwealth of Massachusetts, without regard to its principles of
conflicts of laws. All litigation arising from or relating to this Agreement
will be filed and prosecuted before any court of competent subject matter
jurisdiction in Massachusetts. The parties hereto consent to the jurisdiction of
such courts over them, stipulate to the convenience, efficiency and fairness of
proceeding in such courts, and covenant not to allege or assert the
inconvenience, inefficiency or unfairness of proceeding in such courts. If any
provision of this Agreement is found to be invalid or unenforceable, this
Agreement will remain in full force and effect and will be reformed to be valid
and enforceable while reflecting the intent of the parties to the greatest
extent permitted by law.
14 (c) Assignment: Datawatch may assign this Agreement and any rights granted
under this Agreement in the context of its merger or acquisition of all or
substantially all of its assets relating to the subject matter of this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized representatives as of the Effective Date.
COMPANY: CLIENT:
VESTED DEVELOPMENT, INC. DATAWATCH CORPORATION
By: /s/ Brian Phelps By: /s/ Alan R. MacDougall
---------------------------- ------------------------------------
Printed: Brian Phelps Printed: Alan R. MacDougall
---------------------- ------------------------------
Title: CEO Title: Vice President of Finance & CFO
------------------------- ---------------------------------
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SCHEDULE C
Black Box Testing
Software testing technique whereby the internal workings of the item being
tested are not known by the tester. Testing focuses on the functional aspects of
the software product. In a black box tests on a software product the tester only
knows the inputs and what the expected outcomes should be and not how the
program arrives at those outputs. The tester does not ever examine the
programming code and does not need any further knowledge of the program other
than its specifications. Black box testing is performed by developing a testing
script, or test plan, that lists EXACT test procedure and an expected result.
Only items on the test script are covered and any behavior outside the expected
result is noted. Items, scenarios, configurations or behaviors not covered in
the test script or plans will, by definition, not be tested.
White Box Testing
A software testing technique whereby explicit knowledge of the internal workings
of the item being tested are used to select the test data. Unlike black box
testing, white box testing uses specific knowledge of programming code to
examine outputs. The test is accurate only if the tester knows what the program
is supposed to do and has access and understanding of the source code and
supporting design documentation. With this understanding, the tester can then
see if the program diverges from its intended goal. White box testing does not
account for errors caused by omission. White box testing is characterized by
"free testing" - pushing the product in areas not intended by the original
design specifications, but areas where a "reasonable user" might attempt to
direct the product.
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