THIS MASTER SERVICES AGREEMENT (“Agreement”) is entered into as of the date of the most recent signed statement of work (“Effective Date”) by and between Anchor Group LLC, a Wisconsin limited liability company (“Anchor”), and Client, as identified in the most recent signed Statement of Work (“Client”) (each a “Party” and together, the “Parties”), and states as follows:
During the term of this Agreement, Anchor will provide to Client, and Client will accept from Anchor, the services and work product (the “Services” or the “Work”) as described in any statement of work entered into in writing by the Parties pursuant to this Agreement (each, a “SOW”), each of which is incorporated into this Agreement. Anchor will render the Services in accordance with the terms and conditions of this Agreement and any related SOW, unless otherwise specifically agreed to in writing between the Parties.
The term of this Agreement (the “Term”) is indefinite, and will continue until terminated pursuant to Section 6 of this Agreement.
Services and Work will be priced either as fixed price (a “Fixed Bid Project”), or time and materials (a “Time and Materials Project”). A SOW may have a Fixed Bid Project and a Time and Materials Project.
a. Fees.
Client agrees to pay Anchor for the Services and the Work, as set forth herein and in the SOW(s). In the event a SOW does not specifically state that it is a “Fixed Bid Project,” “fixed-bid,” or some similar designation, Services and Work will be billed on a time and materials basis, and the payment for such is referred to as “Fees”.
i. Time and Materials Projects. Time and Materials Projects means that Fees are billed by the hour. For all Time and Materials Projects, the following will be tracked and billed: (i) all hours spent in completion of Services and Work, including research and communication; and (ii) travel time, including all time spent from departure at origination to arrival at destination, inbound and outbound. Anchor’s hourly rate will appear on any applicable SOW, and the rate will automatically increase by 5% annually from the Effective Date, rounded up to the nearest $5 increment. An invoice for Time and Materials Projects will have a total that reflects the number of hours worked times Anchor’s hourly rate.
ii. Fixed-Bid Projects. Fixed Bid Projects means that Fees are billed using a flat rate as indicated in the SOW. For any Fixed-Bid Project, Client agrees to pay Anchor the total amount indicated in the SOW, and Anchor will not provide Client with a breakdown of hours worked.
b. Expenses.
Client agrees to reimburse Anchor for all expenses including, without limitation: (i) travel expenses including lodging, airfare, mileage, meals, rental cars, app-taxis; and (ii) fees or costs for non-party software/hardware products or services that Anchor procures on behalf of Client, and that Client approves (together, “Expenses”). Anchor will provide estimates of all expenses in advance. Client will pay for all Expenses for both Time and Materials Projects as well as Fixed Bid Projects unless otherwise specified in writing.
c. Invoicing.
Anchor will provide invoices to Client as follows:
i. Time and Materials Projects. Anchor will issue invoices at the beginning of each successive month for Services and Work completed the prior month, to the extent such fees and charges are known to Anchor at the time of billing, and otherwise, such fees and expenses will appear on a future invoice. Client agrees to pay each invoice by the due date indicated on the invoice, which will be 15 days from the date of issuance unless otherwise specified on the SOW.
ii. Fixed Bid Projects. Anchor will issue invoices pursuant to the payment schedule on the SOW. Client agrees to pay each invoice on or before the date indicated on the payment schedule and the invoice. In the event a payment schedule is not indicated on any SOW, Client agrees to pay each invoice within 15 days of receipt of the same.
iii. Invoice Disputes. If Client disputes any charge(s) on an invoice, Client shall provide Anchor with written notice of such dispute within 10 days of the date of issuance of the invoice or Client’s right to raise such dispute is waived.
d. Taxes.
All fees charged by Anchor are exclusive of any taxes. All applicable and required taxes, fees or charges explicitly related to the Service(s) are Client’s responsibility.
e. Interest.
Any invoiced amounts not received by Anchor on or prior to the date due will accrue interest at a rate of 1.5% per month, or the highest rate allowed by applicable law, whichever is lower.
f. Delinquent Payments.
Without prejudice to Anchor’s other legal and equitable rights and remedies under this Agreement, if Client is delinquent on any payment, Anchor may, at its sole discretion, do any one or more of the following: (i) terminate this Agreement pursuant to Section 7; (ii) suspend providing Services, in whole or in part, until payment in full has been received; or (iii) require other assurances to secure Client’s payment obligations. Client shall reimburse Anchor for any expense incurred by Anchor in protecting or enforcing its rights under this Agreement, both before and after judgment, including Anchor’s reasonable attorneys’ fees and legal expenses in connection with the collection, or attempts to collect, any sums due.
a. Additional Work.
In the course of completing the Services, Client may request additional work from Anchor for a new feature or modification, which was not included in any SOW, but is necessary to build a functional, high-performing end product (hereinafter, “Additional Work”). Any communication labeled as a “Change Order” will be deemed an Additional Work request. Client agrees to pay for all Additional Work at Anchor’s hourly rate as indicated in the SOW, or at an alternative rate as agreed in writing between the Parties.
i. Additional Work 2 hours or less. Additional Work which is estimated by Anchor to require 2 hours or less to complete will require only verbal approval from Client.
ii. Additional Work over 2 hours. Additional Work which is estimated to require over 2 hours to complete will be documented in writing by Anchor to Client, including a description of the Additional Work, and an estimate of hours to completion. Client agrees to respond to the Additional Work request in writing within two business days, specifying whether the Additional Work is approved in whole or in part, or not approved.
iii. New SOW. At Anchor’s discretion, depending on the type of Additional Work requested, Anchor may require Client to sign a new SOW or a Change Order before commencing the Additional Work, regardless of the number of estimated hours expected.
b. Estimates.
i. Cost Estimates. Any cost estimates for Time and Materials Projects are Anchor’s best approximation of the resources needed to complete the Services and the Work and are not guaranteed. Various circumstances may affect the cost estimates, and Anchor agrees provide updated cost estimates as circumstances change. Anchor will provide a suggested contingent cost range on its SOWs to assist Client with budgeting.
ii. Timeline Estimate. Any estimates as to the expected timeline to complete the Services and the Work are an approximation based off of Anchor’s experience and the information it has available and are not guaranteed. Anchor will communicate with Client regarding any expected deviations from the estimated timeline.
iii. Client agrees that the provision of an inaccurate estimate does not absolve Client of the requirement to pay any invoice.
c. After Hours. Regular business hours are 8am to 5pm CST Monday through Friday. Work and Services requested and approved to be performed outside of these hours will be billed at a rate of 1.5 times the highest hourly rate in the applicable SOW unless otherwise approved, in writing, by Anchor.
d. Permitted Delays. Anchor’s time of performance will be enlarged, if and to the extent reasonably necessary, in the event (i) Client fails to submit information, instructions, approvals, or any other required element in the prescribed form or in accordance with the agreed upon schedules; (ii) of a special request by Client or any governmental agency authorized to regulate, supervise, or impact Anchor’s normal performance schedule; (iii) Client fails to provide any equipment, software, software license, access, premises, or information called for by this Agreement and the same is necessary for Anchor’s performance; (iv); of any nonparty’s failure to release or modify expected features, implementations, or other elements necessary for the performance of the Services or completion of the Work; or (v) in the event of a Force Majeure Event as described in Section 10.
Anchor is dedicated to successfully completing the Services and the Work for Client. In order to achieve this goal, Anchor requires Client cooperation. To that end, Client agrees as follows:
a. Client will appoint an internal project manager (“Client Project Manager”) who will serve as the main point of contact for Anchor. Client Project Manager must have decision-making authority on project direction, Additional Work requests, and other issues that may arise from the provision of the Services or completion of Work.
b. Client and Client Project Manager will respond within a reasonable time to all Anchor communications.
c. Client and Client Project Manager agree to provide all requested information within the timeline provided by Anchor, including without limitation: login information, access information, content, data, text and graphics.
d. Client and Client Project Manager agree to attend all scheduled meetings.
e. Client and Client Project Manager will ensure the committed participation of all necessary technical and user personnel throughout the completion of the Services.
Client understands that Anchor spends significant resources on training its employees, and has a business need to keep and retain its employees. As such, Client will not, either directly or indirectly (except with Anchor’s consent), solicit, hire, or contract with any Anchor employee during the employee’s employment with Anchor, plus a one-year period following the termination of this Agreement for any reason without Anchor’s written authorization. For purposes of this paragraph, the term “Anchor employee” refers to any employee of Anchor who has provided a Service to Client or completed Work for Client during the Term. In the event Anchor grants Client the option to directly hire an Anchor employee, and the Anchor employee accepts an offer of employment from Client, (a) the Anchor employee’s start date with Client will be mutually agreed upon by Anchor and Client in writing; and (b) Client shall, on or before the employee’s start date, pay Anchor a placement fee of no less than 40% of offered annual salary. If Client hires an Anchor employee without the consent of Anchor, Client shall pay Anchor an amount equal to 100% of the Anchor employee’s most recent annual salary working for Anchor. Any violation of this provision allows for accelerated termination rights under Section 7(b) of this Agreement.
a. Dispute Resolution Procedure. If either Party (the “Non-Breaching Party”) believes that the other Party (the “Breaching Party”) has breached its obligations under this Agreement, then the Non-Breaching Party shall provide written notice to the Breaching-Party describing: (i) the alleged breach in reasonable detail including the provisions of this Agreement that the Breaching party violated; and (ii) actions reasonably necessary to cure the breach. Anchor may continue to perform Service(s) and complete Work during any notice period unless otherwise mutually agreed upon by the Parties in writing.
i. For any dispute involving Client’s failure to pay an invoice, Client shall have 10 calendar days after written notice from Anchor to cure the default. If Client fails to cure within 10 calendar days, then Anchor may immediately terminate this Agreement.
ii. For any other dispute, the Breaching Party shall have 30 calendar days after written notice to cure the default. If the Breaching Party fails to cure within 30 calendar days, then the Non-Breaching Party may immediately terminate this Agreement.
b. Termination By Anchor.
i. Anchor may terminate this Agreement without use of the Dispute Resolution procedure, immediately, upon written notice to Client, for the following reasons:
a. Client fails to pay an invoice after moving through the Dispute Resolution Procedure for failing to pay an invoice at any point in the prior 12-month period;
b. Client’s breach of Sections 6 of this Agreement;
c. Client uses aggressive, profane, abusive, humiliating or discriminatory language in communicating with Anchor, any Anchor employee, or any Anchor subcontractor; or
d. Client becomes insolvent, enters into receivership, is the subject of a voluntary or involuntary bankruptcy proceeding, or makes an assignment for the benefit of creditors, or a substantial part of Client’s property becomes subject to any levy, seizure, assignment for sale or by any creditor or government agency.
c. Termination By Client. Client may terminate this Agreement upon 30 days’ written notice to Anchor, if Client pays to Anchor 80% of the estimated fees which would have been payable, assuming termination had not occurred, for the remainder of any current SOW(s).
d. Mutual Termination. If both Parties agree that all Work and Services have been completed pursuant to all outstanding SOWs, either Party may terminate this Agreement upon written notice to the other Party.
e. Payments Due. The termination of this Agreement does not release Client from the obligation to make payment of all amounts for Fees and Expenses. In the event this Agreement terminates, and a Fixed Bid Project is incomplete, Client agrees to pay to Anchor an amount equal to the sum of (i) all Expenses, and (ii) the number of hours expended by Anchor times the highest hourly rate indicated in the SOW for the incomplete Fixed Bid Project. Upon the termination of this Agreement: (i) Anchor will immediately cease providing the Service(s) and completing any Work; (ii) with the exception of any licenses provided by Anchor pursuant to Section 12, any licenses granted from Anchor to Client with respect to the terminated Service(s) will immediately terminate; and (iii) any and all payment obligations of Client, will immediately become due, including all reasonable fees or costs for non-party products or services that Anchor has procured on behalf of Client. Client also agrees to pay Anchor any early-termination penalty or surcharge charged to Anchor by a non-party as a result of the termination of this Agreement. To the extent such non-party product or service cannot be cancelled, Client shall immediately pay Anchor all fees and costs for that product or service until such product or service can be cancelled or expires.
a. Each Party warrants and represents that it has the legal right to enter into this Agreement and perform its obligations hereunder, and that the individual that executes this Agreement has the authority to do so.
b. Anchor warrants that all Services performed pursuant to this Agreement will be performed in accordance with the general standards and practices of the information technology industry in existence at the time the Services are being performed.
c. Except for the warranties specifically and expressly made in this Agreement, Anchor makes no warranties, either express or implied.
a. Mutual. Neither Party will be liable to the other for punitive damages or any breach of contract Damages that the breaching party could not have reasonably foreseen upon entry into this Agreement.
b. Anchor. Anchor’s liability for any Claim will be limited to the largest aggregate amount of fees paid by Client to Anchor in any six-month time period. Anchor will not be liable to Client for any Damages caused in whole or in part by any non-party with which Client has an executed agreement.
c. Client. With the exception of Client’s failure to pay any invoice or Client’s violation of Section 6 or 15(a), which are not subject to any limitation of liability, Client’s liability for any Claim is limited to the largest aggregate amount of fees paid by Client to Anchor in any six-month time period.
d. Definitions applicable to this Limitation of Liability Section.
i. Claim means an assertion based on a set of facts arising under this Agreement that creates an enforceable right.
ii. Damages means any out-of-pocket expense incurred as a result of any Claim or in any related investigation or negotiation, including court costs and attorney’s fees.
Each Party shall indemnify, defend, and hold harmless the other from and against any Indemnifiable Losses resulting from any Proceeding brought by any non-party caused by the negligence or intentional conduct of the indemnifying party. Anchor shall have no requirement to indemnify where such Proceeding arises, in whole or in part, from the conduct of any non-party with which Client has an executed agreement.
a. Definitions applicable to this Indemnification Section:
i. Indemnifiable Losses means any out-of-pocket expense or loss incurred in defending a Proceeding or in any related investigation or negotiation, including court costs and attorney’s fees.
ii. Proceeding means any judicial, administrative, or arbitration action, suit, claim, investigation or proceeding.
b. For any Indemnifiable Losses arising out of any single Proceeding, the indemnifying party is not required to spend more than the largest aggregate amount of fees paid by Client to Anchor in any six-month time period.
c. To receive the foregoing indemnities, the Party seeking indemnification must promptly notify the other in writing of a claim or suit and provide reasonable cooperation (at the indemnifying Party’s expense) and full authority to defend or settle the claim or suit. The indemnifying Party shall have no obligation to indemnify the indemnified Party under any settlement made without the indemnifying Party’s written consent.
a. If a Force Majeure Event occurs, the Party that is prevented by that Force Majeure Event from performing any one or more obligations under this Agreement (the “Nonperforming Party”) will be excused from performing those obligations, on condition that (i) the Nonperforming Party used reasonable efforts to perform those obligations, (ii) the Nonperforming Party’s inability to perform those obligations is not due to its failure to take reasonable measures to protect itself against the event or circumstance giving rise to the Force Majeure Event, (iii) the Nonperforming Party complies with its obligations under Section 10(c), and (iv) the obligation is not to pay money, which is not excusable.
b. For purposes of this agreement, “Force Majeure Event” means, with respect to a party, any event or circumstance, regardless of whether it was foreseeable, that was not caused by that Party and that prevents a Party from complying with any of its obligations under this agreement, other than an obligation to pay money.
c. Upon occurrence of a Force Majeure Event, the Nonperforming Party shall promptly notify the other Party of occurrence of that Force Majeure Event, its effect on performance, and how long that party expects it to last. Thereafter the Nonperforming Party shall update that information as reasonably necessary. During a Force Majeure Event, the Nonperforming Party shall use reasonable efforts to limit damages to the other party and to resume its performance under this Agreement.
a. Anchor. During the Term, Anchor will maintain, at its expense, the following minimum insurance coverages: (i) Commercial General Liability insurance with limits of not less than $1,000,000 each occurrence, $2,000,000 general aggregate; (ii) $2,000,000 cyber.
b. Client. During the Term, Client will maintain, at its expense, the following minimum insurance coverages: (i) Commercial General Liability insurance with limits of not less than $1,000,000 each occurrence, $2,000,000 general aggregate; (ii) $2,000,000 cyber.
a. Work Product. Anchor agrees that, excluding Anchor IP, all intellectual property and all work product, made by Anchor, solely or in collaboration with others, during the Term, for the benefit of Client and pursuant to the terms of this Agreement and/or any SOW (collectively, “Work Product”), and any intellectual property rights in such Work Product (collectively, “Rights”) will be the sole property of Client. Anchor will assign (or cause to be assigned) and does hereby assign fully to Client all Work Product and Rights.
b. Anchor IP and License. Anchor will retain all rights, title, and interest in and to all intellectual property incorporated into the Work Product to the extent such intellectual property: (i) was developed by Anchor prior to developing the Work Product; (ii) was conceived and reduced to practice by Anchor entirely on Anchor’s own time without using equipment, supplies, facilities, trade secrets, or Confidential Information of Client; (iii) was provided to Anchor by a non-party; (iv) contains generically applicable solutions built by Anchor, without any specification for exclusive use by Client; or (v) does not include or reference Client’s Confidential Information (collectively, the “Anchor IP”). If Anchor incorporates any such Anchor IP into any Work Product, Anchor hereby grants Client a perpetual, nonexclusive, irrevocable, license in and to such Anchor IP to use such Anchor IP as needed for Client’s use of the Work Product.
c. License to Use Work Product. Subject to the terms herein, Client hereby grants to Anchor a perpetual, nonexclusive, irrevocable license in and to such Work Product to use such Work Product for any purpose, at Anchor’s discretion.
a. Each Party, to the extent that it receives Confidential Information of the other Party, will take reasonable steps, and exercise reasonable care, to hold such Confidential Information in confidence, and not use it or disclose it (or willingly allow it to be used or disclosed) to any other person or entity.
b. “Confidential Information” means: (i) any non-public information of a Party learned or accessed through the provision of Services or completion of Work; (ii) other information of a Party that is disclosed in writing and is conspicuously designated as “Confidential” at the time of disclosure; and (iii) the terms and conditions of this Agreement. Notwithstanding the foregoing, Confidential Information does not include information that: (i) is or becomes generally known or available by publication, commercial use or otherwise through no fault of the receiving Party; (ii) was in the receiving party’s possession at the time of disclosure without violation of any confidentiality restriction and without any restriction on the receiving Party’s further use or disclosure; or (iii) is independently developed by the receiving Party without use of the disclosing Party’s Confidential Information.
c. If either Party is served with a subpoena requiring the production of documents or information which is deemed confidential, the Party will immediately notify the other Party in writing and provide a copy of the subpoena to the other Party in sufficient time for it to attempt to quash, or take other action in relation to, the subpoena.
d. The Parties’ respective duties under this Section shall survive the expiration or termination of this Agreement.
To the extent of any conflict between this Agreement and any related communication between the Parties, the terms set forth in this Agreement control.
a. Non-Disparagement. The Parties agree to refrain from making any disparaging remarks about the other Party, including through social media or online reviews, and further agree not to take any actions which may be reasonably expected to adversely affect the reputation or goodwill of the other Party or any of its affiliates. Both Parties agree that a breach of this provision would cause the non-breaching Party losses that could be difficult to precisely estimate. As such, the Parties agree that in the event of a breach of this provision of this Agreement, the non-breaching Party will receive from breaching Party a sum equal to $20,000. The Parties agree that this payment represents a sum of liquidated damages and the amount bears a reasonable relationship to the damages the non-breaching Party would likely incur. In addition, to receipt of such damages, the Parties agree that the breaching Party is entitled as a matter of right to an injunction stopping the disparaging behavior. Such rights under this provision are cumulative and in addition to any other remedies that may be available to the non-breaching Party as a result of such breach.
b. Subcontractors. Anchor may, at its discretion, use subcontractors to complete all or some of the Services and Work. If Anchor uses subcontractors, Anchor accepts liability for any Services performed and Work completed by such subcontractors and the quality, accuracy, and completeness thereof.
c. Statute of Limitations. Any claim or cause of action arising under this Agreement must be brought within two years from the date the claim accrues, otherwise, such claim is waived.
d. Entire Agreement. This Agreement constitutes the entire agreement between the Parties regarding its subject matter. This Agreement will not be construed against the drafter.
e. Modifications. The terms of this Agreement may not be waived, modified, amended, or supplemented except in writing and signed by all Parties.
f. Non-Restrictive Relationship. Anchor may provide the same or similar services to other clients, regardless of whether those clients are competitive with Client. Likewise, Client may utilize other consultants that are competitive with Anchor, so long as Client discloses such relationship to Anchor
g. Notices. All notices required or permitted by this Agreement or under applicable law shall be in writing and shall be deemed to have been given by email, as of the date of submission, by hand delivery as of the date of delivery, or U.S. Mail as of the date of the postmark. Each such notice shall be addressed as follows, with notices to Anchor to the attention of the designated project manager, unless and until such Party notifies the other Party of a change of address in writing:
If to Client: As defined on the Statement of Work.
If to Anchor: Anchor Group LLC
Attn: Caleb Schmitz
121 S Bristol St, Suite 201
Sun Prairie, WI 53590
Copy to: [email protected] and [email protected]
The Parties agree that the addresses provided in this Section may be used for service of process.
h. Severability. In the event any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, such holding will not affect the validity or enforceability of any other provision.
i. Assignability. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, and their respective successors and assigns.
j. Governing Law and Venue. This Agreement shall be governed by and shall be construed in accordance with the laws of the State of Wisconsin (irrespective of such state’s choice of laws rules) and the Circuit Court for Dane County, Wisconsin shall be the appropriate venue for any legal action.
k. Counterparts. This Agreement shall become effective when counterparts have been signed by each party and delivered to the other party.