EXHIBIT 10.13
SOFTWARE LICENSE AGREEMENT
This Software License Agreement is made as of this 3rd day of June,
1999, between Preferred Voice, Inc., a Delaware corporation ("Licensor") and KMC
Telecom Holdings, Inc., a Delaware corporation, on behalf of itself and its
wholly owned subsidiaries and affiliates ("Licensee"). Licensor and Licensee are
collectively referred to in this Agreement as the "Parties."
Background Information
Licensor has developed a system (the "System") that when interconnected
with a telephone switching system is capable of performing the services
described in Exhibit A attached hereto and incorporated herein by reference (the
"Services"). Each System consists of the hardware described in Exhibit B
attached hereto and incorporated herein by reference (the "Designated
Hardware"), certain third party software (the "Third Party Software") and
certain proprietary application software developed by Licensor (the "Application
Software"). The Third Party Software and the Application Software are
collectively referred to in this Agreement as the "Software." Licensee is a
licensed competitive local exchange carrier that is currently providing
telecommunications service in 23 local calling areas (the "Current Markets")
serving a population of up to 750,000 persons ("Tier III Markets"). Licensee has
plans to enter 27 additional Tier III Markets and to deploy remote satellite
switching and offer services in up to 70 smaller local calling areas serving a
population of less than 100,000 persons, located within 60 miles of the Tier III
Markets ("Tier IV Markets"; together with Tier III Markets, the "Markets").
Licensee wishes to offer the Services to end users ("End Users") under its own
brand in conjunction with its telecommunications services.
In consideration of the mutual promises made in this Agreement,
Licensor and Licensee agree that the terms and conditions set forth as follows
will apply to the license of Application Software.
ARTICLE 1. LICENSE AND PROCUREMENT
1.01 License and Procurement. Pursuant to this Agreement, Licensor
hereby grants to Licensee a nontransferable, non-exclusive (except as otherwise
provided below) license to use the Application Software, together with all
subsequent improvements thereto in the 37 Tier III Markets set forth on Exhibit
C attached hereto, as such Exhibit C may be amended from time to time pursuant
to this Agreement, and two (2) Tier IV Markets (collectively, the "Licensed
Markets"). Licensee shall be permitted to replace a Licensed Market, other than
the Current Markets (which are designated on Exhibit C with an asterisk), with
another Market up to sixty (60) days prior to the scheduled installation of a
System in such Licensed Market. In the event that Licensee so replaces a Tier
III Market, Exhibit C shall be revised to reflect the change; and in the event
that Licensee so replaces a Tier IV Market, Licensee shall give Licensor at
least thirty (30) days' prior written notice thereof. Licensee also shall be
permitted to add up to 13 Tier III Markets and up to 68 Tier IV Markets to the
Licensed Markets on at least thirty (30) days' prior written notice thereof to
Licensor, provided, that Licensee adds a minimum of thirty (30) Markets to the
Licensed Markets on each occasion on which it adds Markets.
Licensor also shall procure for Licensee the Designated Hardware from
third party manufacturers, a list of which Licensor shall provide to Licensee.
**[Confidential Treatment] indicates portions of this document that have been
deleted from this document and have been seperately filed with the Securities
and Exchange Commission.
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1.02. Exclusivity. Licensor agrees that it will not install Systems or
license any third party to install Systems within Licensee's local calling areas
of the switch locations set forth in Exhibit C, as amended from time to time
pursuant to Section 1.01, or any Tier IV Markets that-Licensee designates as a
future location for a System, as those local calling areas are defined in
Licensee's network map as of March 29, 1999, and that it will not set up a
distributor or agent in those areas to sell Services competitive with those that
Licensee provides. This exclusivity provision will be limited with respect to
any Market that is added to Exhibit C after the date hereof to the extent of any
contractual obligation to which Licensor is subject on the date of the addition.
1.03. Specifications. Licensor may from time to time furnish Licensee
with specifications, the form of which is initially attached hereto as Exhibit
A-1 (the "Specifications"), relating to the use and servicing of the System. The
Specifications may include a detailed description of functionality and related
processes and procedures for the System provided by Licensor to Licensee,
including without limitation user manuals, diagrams, drawings, etc. and all
updates, revisions, new versions, and supplements to the Specifications, and any
test plans or performance criteria mutually agreed upon by the parties hereto
for purposes of determining the System's conformity to the Specifications during
the testing period.
ARTICLE 2. LIMITATIONS ON USE
2.01 General Use. Licensee agrees to use the Application Software
solely to provide the Services to End Users. Licensee may private brand the
Services it offers.
2.02 Location.
(a) Use of Application Software. The Application Software may
be used only on Designated Hardware at Licensee's switch location in the
Licensed Markets.
(b) Temporary Use of Non-Designated Hardware. Licensee may
temporarily install and use the Application Software on hardware other than
Designated Hardware, but only if the Designated Hardware cannot be used because
of hardware, software or other malfunction and only until the Designated
Hardware is returned to operation. Licensee shall not install or use the
Application Software on such replacement hardware without the prior verbal
consent of Licensor. Licensor shall not unreasonably withhold this consent if
the proposed replacement hardware meets or exceeds the Specifications for the
Designated Hardware.
2.03 Licensor's Use. Licensee shall permit Licensor to use its Systems
to provide Services to its own end users ("Licensor End Users") where efficient
networking would be promoted by such use by Licensor End Users. In exchange
therefor, Licensor shall pay Licensee a fee of $1.25 per month per Licensor End
User that is homed on Licensee's Systems. Such fee shall be payable monthly upon
invoice by Licensee to Licensor therefor, and shall be payable within thirty
(30) days following receipt of the applicable invoice.
2.04 Copies. Licensee may make one "backup copy" of the Application
Software for archival purposes at each location; any such archival copy may be
stored at the location where the products are installed and operational or at
any such reputable off-site storage facility or facilities, as
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the case may be, which Licensee, in its reasonable judgment, shall select to
maintain and protect such archival copy for purposes of disaster recovery.
Licensee shall not otherwise copy any portion of the Software. Licensee shall
reproduce and include Licensor's applicable copyright notice, patent notice,
trademark, or service xxxx on any copies of the Application Software.
2.05 Licensee's User Responsibilities. Licensee shall be ex-
clusively responsible for the supervision, management, and control of its use of
the Designated Hardware, including:
(a) Assuring proper configuration of the Designated Hardware,
related equipment and devices to provide the grade of service
determined by Licensee at its discretion;
(b) Maintaining, repairing and replacing Designated Hardware
as required, except as otherwise provided herein or agreed to by the
parties;
(c) Establishing adequate operating methods;
(d) Implementing procedures sufficient to satisfy its
obligations for security under this Agreement, including appropriate
control of its employees to prevent misuse, unauthorized copying,
modification, or disclosure of the Software.
2.06 Term. The initial term of this Agreement shall be ten (10) years,
subject to the provisions of Section 7.01 hereof. Upon expiration of the initial
term specified above, the Agreement shall automatically renew for successive one
(1) year terms unless either party gives the other notice of its intention not
to renew the license at least sixty (60) days prior to the expiration of the
then current term. As further described in Section 1.01 hereof, Licensee may
from time to time amend Exhibit C hereof, which amendment may include deletion
of certain Markets set forth on Exhibit C in lieu of termination of this
Agreement.
ARTICLE 3. PROPERTY RIGHTS
3.01 Title to Software. Title to the Application Software is reserved
for Licensor. Licensee acknowledges and agrees that Licensor is and shall remain
the owner of the Application Software and shall be the owner of all copies of
the Application Software made by Licensee.
3.02 Confidentiality of Software. Licensee acknowledges that the
Application Software is confidential in nature and constitutes a trade secret
belonging to Licensor. Licensee agrees to hold the Application Software in
confidence for Licensor and not to sell, rent, license, distribute, transfer, or
disclose the Application Software or its contents, including methods or ideas
used in the Application Software, to anyone except to employees of Licensee when
disclosure to employees is necessary to use the license granted in this
Agreement. Licensee shall instruct all employees to whom any such disclosure is
made that the disclosure is confidential and that the employee must keep the
Application Software confidential by using the same care and discretion that
they use with other data designated by Licensee as confidential. The
confidentiality requirements of this Section shall be in effect both during the
term of this Agreement and after it is terminated, provided, that the foregoing
restrictions shall not apply to information: (a) generally known to the public
or obtainable from public sources; (b) readily apparent from the keyboard
operations, visual display, or output reports of the
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Application Software; (c) previously in the possession of Licensee or
subsequently developed or acquired without reliance on the Application Software;
or (d) approved by Licensor for release without restriction.
3.03 Security. Licensee agrees to keep the Software in a secure place,
under access and use restrictions designated to prevent disclosure of the
Software to unauthorized persons. Licensee agrees to at least implement the
security precautions that it normally uses to protect its own confidential
materials and trade secrets.
3.04 Disclosure as Breach. Licensee agrees that any disclosure of the
Software to a third party constitutes a material breach of this Agreement,
entitling Licensor to the benefit of Section 7.01 hereof.
3.05 Removal of Markings. Licensee agrees not to remove, mutilate, or
destroy any copyright, patent notice, trademark, service xxxx, other proprietary
markings, or confidential legends placed on or within the Software.
ARTICLE 4. PAYMENT
4.01 License Initiation Fee. Licensee shall pay Licensor a license
initiation fee for each Licensed Market, including each Market that is added to
the Licensed Markets hereafter pursuant to the terms of Section 1.01, in
accordance with the schedule set forth in Exhibit D attached hereto and
incorporated herein by reference. Such fee will be due for the initial 39
Licensed Markets upon execution of this Agreement and will be due for Markets
that are added hereafter at the time notice is given adding the Markets.
4.02 Recurring License Fee. Licensee shall pay Licensor a recurring
license fee for each Licensed Market each month commencing 24 months following
acceptance of the System in that Licensed Market based on the schedule set forth
in Exhibit D. The recurring fee shall be paid monthly on the fifteenth day of
each month.
4.03 Support Fee. Licensee shall pay Licensor for training and other
support in accordance with charges set forth in Exhibit E attached hereto and
incorporated herein by reference.
4.04 Fee Payable by Licensor. As described in Section 2.03 hereof,
Licensor shall pay Licensee a fee for certain uses by Licensor of the Systems
installed hereunder.
ARTICLE 5. INSTALLATION AND SERVICE
5.01 Delivery of Software and Materials. Licensor shall deliver (a) one
copy of the Application Software in object code and one copy of Specifications
and any other documentation to the Licensee at each switch site in accordance
with a schedule on which the parties agree and (b) literature relating to the
Systems allowing Licensee to private brand the Services it offers relating to
the System.
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5.02 Source Code Escrow. Licensor will escrow the source code of the
Application Software under the terms of a Source Code Escrow Agreement
substantially in the form of Exhibit F attached hereto and incorporated herein
by reference.
5.03 Installation Services. The Designated Hardware will be shipped to
Licensor's site for assembly and installation of the Application Software and
preinstallation testing. Licensor will then bring the System to Licensee's site
for installation. Licensee shall prepare the site in accordance with the
Specifications for installation of the Designated Hardware by Licensor. Licensor
shall provide technical services in connection with the installation of the
Systems at Licensee's site for five (5) days. Installation of Systems in the
Current Markets will be completed within 120 days, and additional Systems shall
be installed concurrently with the installation of Licensee's switching systems,
in each case subject to Licensee's capabilities at the applicable site(s).
Licensor agrees that it will use best efforts to comply with all
Licensee's security, confidentiality and regulatory requirements in relation to
the System installed at any site. In addition, Licensor agrees to use all
reasonable efforts to install Systems so that they shall comply in all material
respects with all federal, state, and local laws and regulations in force on the
date hereof, which directly impose obligations upon Licensor or the applicable
manufacturer.
5.04 Testing. Licensor shall test the Systems to ensure that they meet,
without material deviation, the standards contained in the Specifications. The
testing period shall (i) commence promptly upon the completion of installation
of the System at the sites, but in no event later than five (5) days following
such completion of installation (the "Commencement Date"), and (ii) conclude
upon acceptance by Licensee's delivery to Licensor of the Acceptance Certificate
(defined below).
Should material deviations arise in the performance of the System
relative to the Specifications, Licensor agrees to inform Licensee promptly
thereof by submitting notice, including a written, reasonably detailed
description of each deviation from the Specifications, to Licensee. Licensor
shall then have the longer of (i) the remainder of the testing period, (ii)
thirty (30) days or (iii) some other period of time mutually agreed upon by the
parties to cure the noncompliance. Licensee shall use its best efforts to assist
Licensor in curing such noncompliance. Upon completion of such cure, Licensor
shall give notice to Licensee thereof. The total period of time that may be
spent on the testing period shall not exceed ninety (90) days from the
Commencement Date, after which time Licensee shall no longer be obligated to
accept such corrections from Licensor.
If Licensor, using commercially reasonable efforts, is unable to cure
any noncompliance of the System during the testing period, then following notice
thereof either party may give the other party thirty (30) days' written notice
of its election to terminate this Agreement and the reasons therefor. If either
party terminates this Agreement pursuant to this Section, Licensor shall refund
to Licensee any monies previously paid by Licensee relating thereto (less
one-sixtieth (1/60th) thereof for each month (or portion thereof) from the
installation to the date of termination pursuant hereto); and the license
granted hereunder shall be terminated.
5.05 Acceptance. Licensor shall inform Licensee in writing of the
completion of Licensor's testing under Section 5.04. Licensee will thereupon
commence testing of the System, and shall have ten (10) days in which to test
the functionality of the System with employees. Upon completion of
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the ten (10) day test period, Licensee shall either provide Licensor with
written notice of any problems revealed in its tests or deliver Licensor an
acceptance certificate, substantially in the form attached hereto as Exhibit G
(the "Acceptance Certificate"). In the event Licensee identifies any problems,
Licensor will have fifteen (15) days in which to resolve the problems and after
receiving notification that the problem is resolved, Licensee will have another
fifteen (15) day test period. The Software shall be deemed to have been accepted
by Licensee upon execution and delivery by Licensee to Licensor of an Acceptance
Certificate, executed by an authorized representative of Licensee or failure of
Licensee to provide written notice to Licensor of any problems Licensee
discovers within the ten (10) day period it is conducting tests.
5.06 Technical Support. During the term of this Agreement, Licensor
shall provide a technical support help desk that Licensee may call to report
System troubles twenty-four (24) hours per day, seven (7) days per week basis.
Licensor shall troubleshoot the problems and contact the appropriate vendor to
resolve problems that cannot be resolved by actions Licensee may take on
Licensor's instruction. During the term of this Agreement, Licensor shall
provide (i) remote, dial-up System support, on a twenty-four (24) hours per day,
seven (7) days per week basis, and (ii) packages, generally containing
corrections of known software defects and updates or patches to increase or
improve performance and occasionally also containing minor feature enhancements
of existing software, relating to a current Software platform. Licensee shall
provide permanent digital connectivity to each System for the purpose of
off-site software revision and maintenance. Licensor also shall provide
additional technical support services to Licensee on request and as available at
its then standard rates.
5.07 Training. Licensor shall, as described on Exhibit E attached
hereto by Licensor, provide Licensee's personnel with training and instruction
concerning the operation and use of the System by conducting training sessions
at a mutually convenient time at Licensee's facility. Xxx Xxxxxx, the President
of Licensor, shall perform at least two (2) of the Voice Recognition Training
sessions. Licensee shall be deemed to be satisfied with each training session
unless written notice is otherwise sent to Licensor within five (5) days of the
end of such session. Any additional training services not described on Exhibit E
that are requested by Licensee shall be invoiced to Licensee in accordance with
Licensor's then prevailing hourly rates. Licensee shall be responsible for all
travel and other expenses of its personnel attending such training sessions.
ARTICLE 6. WARRANTY PROVISIONS
6.01 Warranties
(a) Designated Hardware. Licensee shall be entitled to the benefit of
all warranties provided by the manufacturers of the Designated Hardware.
Licensor shall provide Licensee with copies of all such warranties.
(b) Application Software.
i. General. Licensor warrants that (i) it has good title
to the Application Software and the right to license its use to Licensee free of
any proprietary rights, liens, or encumbrances of any other party, (ii) the
Application Software will permit the System to provide
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Services when properly interconnected to Licensee's functioning Lucent 5ESS
switch (provided, that ANY MODIFICATION OF THE APPLICATION SOFTWARE BY ANY
PERSONS OTHER THAN LICENSOR SHALL VOID THE WARRANTY IN THIS CLAUSE (ii)), (iii)
commencing on installation thereof, and for a period of ninety (90) days
thereafter, (1) the Software (A) shall conform in all material respects to the
Specifications and (B) shall be free of viruses, bugs or contaminants which may
cause damage to Licensee's systems or interrupt Licensee's utilization of a
System; and (2) the media in which the Software is contained shall be free of
material defects in materials or workmanship.
ii. Year 2000. Licensor warrants that the Application
Software delivered or modified by Licensor is, or will be, Year 2000 Compliant
(as defined below). Year 2000 Compliant Software that is intended to
interoperate with third party products (including Third Party Software) as
described in herein will be compatible and interoperate in such manner as to
process between them, as applicable, date related data correctly as described in
the definition of "Year 2000 Compliant." Except as set forth in the preceding
sentence, (i) Licensor assumes no responsibilities or obligations to cause third
party products (including Third Party Software) to function with the Application
Software; and (ii) Licensor will not be in breach of this warranty for any
failure of the Application Software to be Year 2000 Compliant if such failure
results from the inability of any software, hardware, or systems of Licensee or
any third party to be Year 2000 Compliant. "Year 2000 Compliant" means that (a)
neither the performance nor functionality of the Application Software will be
affected by dates prior to, during and after the year 2000, (b) no value for
current date will cause any interruption in the operation of the Application
Software; (c) the year 2000 is recognized as a leap year; (d) in all interfaces
and data storage the century, in any date, is specified either explicitly or by
unambiguous algorithms or inferencing rules; and (e) date-based functionality of
the Application Software behaves and will behave consistently for dates prior
to, during and after the year 2000.
6.02 Remedies. In the event of any nonconformity or defect in the
Application Software (or any other breach with respect to the condition or
operation of the Application Software) for which Licensor is responsible,
Licensor shall, during the foregoing respective warranty periods, (A) provide
reasonable efforts to correct or cure such nonconformity, defect, contaminant or
breach (which may include a workaround for system errors), (13) at Licensor's
option, replace the relevant part of the Application Software in lieu of curing
such nonconformity, defect, contaminant or breach, or (C) if Licensor determines
that neither of the foregoing is commercially practicable, refund all sums paid
to Licensor by Licensee with respect to nonconforming, defective or breaching
Application Software less one-sixtieth (1/60th) thereof for each month (or
portion thereof) that has ensued following acceptance of the Application
Software. In addition, with respect to any defect or nonconformity in the
Designated Hardware during the warranty period, Licensor shall cooperate with
Licensee in attempting to provide Licensee with the benefit, if any, of the
support commitment of any third-party manufacturers and suppliers of the
Designated Hardware.
6.05 Warranty Disclaimer. LICENSOR DOES NOT REPRESENT OR WARRANT
THAT ALL ERRORS WILL BE CORRECTED. LICENSEE AGREES THAT LICENSEE'S SOLE AND
EXCLUSIVE REMEDY FOR THE DEFECTS DESCRIBED IN THIS SECTION SHALL BE LIMITED TO
THE CORRECTIVE ACTION DESCRIBED IN THIS SECTION. THE EXPRESS WARRANTIES SET
FORTH IN THIS AGREEMENT ARE IN LIEU OF
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ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6.06 Limitation of Remedies. LICENSEE AGREES THAT ITS EXCLUSIVE
REMEDIES, AND LICENSOR'S ENTIRE LIABILITY WITH RESPECT TO THE SOFTWARE IS AS SET
FORTH IN THIS AGREEMENT. LICENSEE FURTHER AGREES THAT LICENSOR SHALL NOT BE
LIABLE TO LICENSEE FOR ANY DAMAGES, INCLUDING ANY LOST PROFITS, LOST SAVINGS, OR
OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES, ARISING OUT OF ITS USE OR INABILITY
TO USE THE SOFTWARE OR THE BREACH OF ANY EXPRESS OR IMPLIED WARRANTY.
6.07 Indemnification.
(a) Infringement. Licensor agrees to indemnify and hold
Licensee and its directors, officers, employees and agents, harmless against any
and all claims, demands, actions, losses, liabilities, judgments, settlements,
awards and costs (including reasonable attorneys' fees and expenses)
(collectively, "Liabilities") arising out of or related to any claim against
Licensee by a third party that Licensee's use or possession of the Application
Software (or the license granted to Licensee hereunder with respect thereto),
infringes or violates any United States patent, copyright or other proprietary
right of any third party; provided that Licensee gives Licensor prompt notice of
any such claim of which it has actual knowledge and cooperates fully with
Licensor in the defense of such claim. Licensor shall have the exclusive right
to defend and settle at its sole discretion and expense all suits or proceedings
arising out of the foregoing. Licensee shall not have the right to settle any
action, claim or threatened action without the prior written consent of Licensor
(at Licensor's sole and absolute discretion). In case use of the Application
Software is forbidden by a court of competent jurisdiction because of
proprietary infringement, Licensor shall promptly, at its option, (i) procure
for Licensee the rights to continue using the Application Software; (ii) replace
the infringing Application Software with non-infringing Application Software of
equal performance and quality which are materially the functional equivalent of
the infringing Application Software; (iii) modify the infringing Application
Software so it becomes non-infringing while materially maintaining the
functionality thereof, or (iv) if none of the foregoing are commercially
practicable, refund all sums paid to Licensor by Licensee with respect to the
infringing Application Software less one-sixtieth (1/60th) thereof for each
month or portion thereof that has ensued following acceptance of the infringing
Application Software. Licensor will then be released from any further obligation
whatsoever to Licensee with respect to the infringing part of the Application
Software. Nothing in this Section shall be deemed to make Licensor liable for
any patent or copyright infringement suits that arise in connection with (a)
designs, modifications, use, integration or data furnished by Licensee if
infringement would have been avoided by not using or combining the Application
Software with such other programs or data or (b) if infringement would have been
avoided by the use of an updated version made available to Licensee.
(b) Other. Licensor agrees to indemnify and hold Licensee
harmless against any and all Liabilities arising out of Licensor's negligent
acts or omissions, intentional torts, or material breach of this Agreement.
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ARTICLE 7. TERMINATION
7.01 Cause for Termination. The license granted in this Agreement shall
terminate automatically and without further notice upon the occurrence of
expiration of the term, specified in Section 2.06 or of any, renewal term in the
absence of a subsequent renewal in accordance with the terms of this Agreement.
Licensor may terminate this Agreement in the event that Licensee (a) discloses
the Software to a third party, whether directly or indirectly and whether
inadvertently or purposefully or (b) attempts to use, copy, license, or convey
the Software in any manner contrary to the terms of this Agreement or in
derogation of Licensor's proprietary rights in the Application Software, and in
either case fails to cure such breach within such five (5) day period following
notice by Licensor. Licensee may terminate this Agreement on any anniversary of
the date hereof upon at least ninety (90) days prior written notice. In
addition, either party may terminate this Agreement (and all licenses granted
hereunder) at any time if (a) the other party breaches any term hereof (other
than breaches by Licensee pursuant to the preceding sentence) and fails to cure
such breach, (b) the other party engages in any business activity that, in the
non-breaching party's reasonable determination, has or may have an adverse
effect upon the non-breaching party's business or reputation, (c) the other
party shall be or becomes insolvent, (d) the other party makes an assignment for
the benefit of creditors, (e) there are instituted by the other party
proceedings in bankruptcy or under any insolvency or similar law or for
reorganization, receivership or dissolution, (f) there are instituted against
the other party proceedings in bankruptcy or under any insolvency or similar law
or for reorganization, receivership or dissolution, which proceedings are not
dismissed within 60 days, or (g) the other party ceases to do business;
provided, however, that no party shall be deemed to be in breach until the
non-breaching party gives written notice to the breaching party and the
breaching party shall fail to remedy such breach within thirty (30) days (or ten
(10) days in the case of a failure to pay any sum due) after receipt of such
written notice. In the event that Licensor terminates this Agreement pursuant to
this Section, Licensor may (i) invoke all rights Licensor possesses upon
termination and (ii) if Licensee remains liable for any monetary obligation
created under this Agreement, accelerate and declare all obligations of Licensee
created under this Agreement to be immediately due and payable by Licensee.
7.02 Effect of Termination. Licensee agrees that on termination under
Section 7.01, it shall immediately destroy all copies of the Application
Software, certify (on Licensor's request) to Licensor that it has retained no
copies of the Application Software, and acknowledge that it may no longer use
the Application Software. Upon termination of the license, Licensor's
obligations under this Agreement shall cease. The termination or expiration of
this Agreement shall in no way relieve either party from its obligation to pay
the other any sums accrued hereunder prior to such termination or expiration.
Upon such termination or expiration, the provisions of Section 2.04 and Articles
3, 6, 7 and 9 shall survive.
ARTICLE 8. PERSONNEL & SUBCONTRACTORS; INSURANCE
8.01 Assignment and Substitution. Licensor reserves the right to
assign, reassign and substitute its personnel with personnel having comparable
qualifications at any time during the term of this Agreement, so long as no such
action results in an interruption of service.
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8.02 Subcontractors. Licensor reserves the right to subcontract any or
all services to qualified and experienced third parties and/or to use
independent consultants, so long as such use of subcontractors and/or
consultants does not cause any interruption of services to Licensee. Services
supplied by such third parties shall be subject to the terms and conditions of
this Agreement as if supplied directly by Licensor. Any such subcontracting
shall not relieve Licensor from liability (if any) or obligations under this
Agreement and Licensor shall be responsible for the services performed as well
as the acts of any subcontractor or Consultant (and any agents thereof) as fully
as if they were the acts of Licensor (or such agents). Licensor shall require
that its subcontractors comply with the provisions of this Agreement, insofar as
they apply to the subcontracted work. Should any subcontractor fail to perform
in a satisfactory manner work undertaken by it, Licensor shall investigate and
take any appropriate action. Nothing contained in this Agreement shall create
any contractual relationship between any subcontractor of Licensor and Licensee
and no subcontractor is intended to be or shall be deemed a third party
beneficiary of this Agreement.
8.03 Qualifications. Licensor represents that it and its subcontractors
performing services are and will continue to be experienced and qualified to
perform the services and all of their respective obligations under this
Agreement.
8.04 Licensee Rights. At Licensee's request, Licensor shall provide
Licensee with the resume of a subcontractor whom Licensor intends to designate
to perform onsite work. Licensee shall have the right to interview and approve
or reject the assignment by Licensor of any subcontractors to positions of
on-site work, provided that Licensee may not exercise its right to reject any
subcontractors on grounds unrelated to job performance or in a manner that
obligates Licensor to commit an unlawful act. If Licensee does not exercise its
right to interview and approve or reject any such assignment within fifteen (15)
days of submittal of a resume by Licensor to Licensee, then Licensee shall be
deemed to have agreed to such assignment. Licensee agrees not to make an offer
of employment to any subcontractor rejected by Licensee; and Licensee shall
treat the resume and any interview information as confidential information.
8.05 Acceptance. Licensee may notify Licensor when it finds any
Licensor onsite subcontractor unacceptable to provide services at a site for any
lawful reason, including Licensee's reasonable determination that subcontractor
is not qualified to perform the work to which subcontractor is assigned. Upon
receipt of such notice Licensor shall, within ten (10) business days (or earlier
if Licensee specifically so requests), review the matter with Licensee and take
appropriate action as necessary. Licensor shall have a reasonable time to
replace any such subcontractor.
8.06 Insurance. Each party hereto shall maintain, during the term of
this Agreement, the following insurance coverage as well as all other insurance
required by law in the jurisdictions where the work is performed: (a) worker's
compensation and related insurance as required by law; (b) employer's liability
insurance with a limit of at least five hundred thousand ($500,000) dollars for
each occurrence; (c) comprehensive general liability insurance, with a limit of
at least one million ($1,000,000) dollars per occurrence; and (d) comprehensive
motor vehicle liability insurance with limits of at least one million
($1,000,000) dollars for bodily injury including death, to any one person, three
hundred thousand ($300,000) dollars for each occurrence of property damage, and
one million ($1,000,000) dollars for each occurrence. Each party shall (i)
furnish the other prior to the start of the relevant work, if requested by the
other, certificates or adequate proof of the insurance required
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by this Section and (ii) notify the other in writing at least thirty (30) days
prior to cancellation of or any material change in the policy. Notwithstanding
the above, each party shall have the option where permitted by law to
self-insure any or all of the foregoing.
ARTICLE 9. MISCELLANEOUS
9.01 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, EXCEPT THAT ANY
CONFLICTS OF LAW RULES OR PRINCIPLES OF THE STATE OF NEW JERSEY THAT WOULD
REQUIRE REFERENCE TO THE LAWS OF ANOTHER JURISDICTION SHALL BE DISREGARDED.
9.02 Headings. Headings used in this Agreement are to facilitate
reference only, are not a part of this Agreement, and will not in any way affect
the interpretation hereof The use herein of the word "including," when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not non-limiting
language (such as "without limitation," or "but not limited to," or words of
similar import) is used with references thereto, but rather shall be deemed to
refer to all other items and matters, that reasonably could fall within the
broadest possible scope of such general statement, term or matter.
9.03 Assignment. This Agreement, and all rights and obligations
hereunder, are personal as to the parties hereto and may not be assigned, in
whole or in part, by any of the parties to any other person, firm or corporation
without the prior written consent thereto by the other party hereto, which
consent will not be unreasonably withheld; except that either party may freely
assign any or all of its rights and obligations hereunder to any affiliate. An
affiliate is (a) an entity that owns all or substantially all of the outstanding
stock of the entity so assigning, (b) an entity all or substantially all of
whose stock is owned by the entity so assigning, or (c) an entity under common
ownership with the entity so assigning. Such assignee entity shall thereupon be
free to assign the rights and obligations under this Agreement to any other
affiliate. Any assignment contrary to the terms hereof shall be null and void
and of no force or effect.
9.04 Failure or Partial Exercises. No failure on the part of any party
to exercise, and no delay in exercising, any right or remedy hereunder shall
operate as a waiver thereof. Nor shall any single or partial exercise of any
right or remedy hereunder exclude any other or further exercise thereof or the
exercise of any other right hereunder.
9.05 Entire Agreement Amendments. This Agreement and all schedules and
exhibits annexed hereto constitute the entire agreement among the parties
respecting the subject matter hereof and supersedes all prior agreements among
the parties relative to the subject matter hereof. In entering this Agreement,
Licensee did not rely on any representations or warranties of Licensor or its
employees or agents other than those set forth in this Agreement. This Agreement
may not be modified or amended except by a writing that states that it is an
amendment to this Agreement and which is signed by duly authorized
representative of the parties.
11
9.06 Notices. All notices required or permitted to be given hereunder
shall be in writing and shall be valid and sufficient if dispatched either (i)
by hand delivery, (ii) by telex, cable or facsimile transceiver, with confirming
letter mailed promptly thereafter by first class mail, postage prepaid, (iii) by
reputable overnight express courier or (iv) by certified mail, postage prepaid,
return receipt requested, deposited in any post office in t , he United States,
in any case, addressed to the addresses set forth on the signature page of this
Agreement, or such other addresses as may be provided from time to time in the
manner set forth above. When sent by cable or facsimile as aforesaid, notices
given as herein provided shall be considered to have been received at the
beginning of recipient's next business day following their confirmed
transmission; otherwise, notices shall be considered to have been received only
upon delivery or attempted delivery during normal business hours.
9.07 Partial Invalidity. If any clause or provision of this Agreement
is held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Agreement, then and in that event, it is the
intention of the parties hereto that the remainder of this Agreement shall not
be affected thereby, and it is also the intention of the parties to this
Agreement that in lieu of each clause or provision of this Agreement that is
held to be illegal, invalid, or unenforceable, there be added as a part of this
Agreement a clause or provision as similar in terms to such illegal, invalid, or
unenforceable clause or provision as may be possible and still be legal, valid,
and enforceable.
9.08 Attorneys Fees. The prevailing party in any litigation,
arbitration or other proceedings arising out of this Agreement shall be
reimbursed by the other party for all costs and expenses incurred in such
proceedings, including reasonable attorneys' fees.
9.09 Force Majeure. No party hereto shall be liable for delay or
default in performing hereunder, other than a delay or default in payment of any
monies due to the other party, if such performance is delayed or prevented by a
Force Majeure Condition. "Force Majeure Condition" shall mean any condition or
event beyond the reasonable control of the party affected thereby, including
fire, explosion, or other casualty, act of God, war or civil disturbance, acts
of public enemies, embargo, the performance or non-performance of third parties,
acts of city, state, local or federal governments in their sovereign,
regulatory, or contractual capacity, labor difficulties, and strikes, but
specifically excluding a party's failure to be Year 2000 Compliant. If a Force
Majeure Condition occurs, the party delayed or unable to perform shall give
prompt notice of such occurrence to the other party. The party affected by the
other party's inability to perform may, after sixty (60) days, elect to either
terminate this Agreement or continue performance with the option of extending
the terms of the Agreement up to the length of time the Force Majeure Condition
endures. The party experiencing the Force Majeure Condition must inform the
other party in writing when such a condition ceases to exist. Each party shall,
with the cooperation of the other, exercise all reasonable efforts to mitigate
the extent of a delay or failure resulting from a Force Majeure Condition.
9.10 Consequential Damages. THE PARTIES HERETO AGREE THAT NEITHER PARTY
HERETO SHALL BE LIABLE TO THE OTHER PARTY HERETO FOR ANY DAMAGES, INCLUDING ANY
LOST PROFITS, LOST SAVINGS, OR OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES,
ARISING OUT OF THIS AGREEMENT.
12
9.11 Independent Contractor. The relationship of the parties
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement will be construed (a) to give either party the power
to direct and control the day-to-day activities of the other, (b) to constitute
the parties as partners, joint venturers, owners or otherwise as participants in
a joint or common undertaking, or (c) to allow either party to create or assume
any obligation on behalf of the other for any purpose whatsoever.
PREFERRED VOICE, INC. KMC TELECOM HOLDINGS, INC.,
on behalf of itself and its wholly owned
subsidiaries and affiliates
By: By:
------------------------- -----------------------------------
Name: Name:
------------------------- -----------------------------------
Title: Title:
------------------------- -----------------------------------
0000 Xxxxxxxxxx Xxxxxx 0000 Xxxxx 000
Xxxxx 000 Xxxxx 000
Xxxxxx, Xxxxx 00000 Xxxxxxxxxxx, Xxx Xxxxxx 00000
Fax No.: 000-000-0000 Fax No.: 000-000-0000
Phone: 000-000-0000 Phone: 000-000-0000
13
EXHIBIT A
PREFERRED VOICE, INC.
Product Descriptions
VIP EMMA 888 Services
Each EMMA 888 service was specifically designed to combine all the following
existing Telco services with the convenience of speech independent dialing. Each
of these services offer specific benefits and features designed to satisfy the
communication needs of the end user.
1-888 Number dedicated to one user
Long Distance Calling Card
Selective Call Screening
One Number "Locate" EMMA
Voice Activated Dialing
Voice Directory
(1) EMMA. The "SMART" Business Line and EMMA PA (Personal Assistant):
The "SMART" Business Line has a local number on the front and can
receive calls dialed from the public switched telephone network. In
addition to the local number each subscriber may be assigned a
dedicated 888 number giving them not only local but national presence.
In addition unlike the traditional telephone line that is connected to
a specific telephone the SBL floats and can be pointed to ring at any
telephone the subscriber selects. This feature is usually referred as
"single number locate." This service may be offered as a supplement to
existing business lines.
One Number Locate:
The subscriber to this service is assigned his own personal
888 number. When that number is dialed the calling party is
greeted by a prompt. The call will then be sent to whatever
number the user has programmed in his Locate file (i.e.
cellular phone, hotel, pager, etc.) anywhere in the world.
Telephone Calling Card:
The subscriber can use the Sl3L as a telephone calling card.
During the forwarding prompt, the user touch-tones any key on
his phone and speaks his Personal Identification Number; at
the next prompt he may speak a name from his personal voice
directory. The Voice Directory may contain 100 names with
their corresponding numbers. For numbers not in the voice
directory, the subscriber simply says, "Dial Number" and SBL
will prompt "Number please". The user then may voice dial the
number or touch-tone using the DTMF pad.
1
Intelligent Call Screening:
This feature can be turned on or off by the subscriber. When a
caller dials the subscriber's 888 number SBL will prompt for
the callers name and present the name to the subscriber. The
subscriber has the option of accepting the call or sending the
call to their voice mail.
(2) EMMA CD (corporate direct):
Businesses that have multiple, individuals with EMMA PA numbers can
avoid having to remember or look-up everyone's personal EMMA PA number
by using the EMMA CD. The caller dials the dedicated EMMA CD number and
simply speaks the called person's name and the call is quickly
forwarded to his current programmed locate number.
(3) XXXX XX (Virtual Office)
This service configuration was designed for the group that does not
have a single physical office or whose members are out of their offices
consistently. XXXX XX allows the group to have a single number. When
there is a call for a member, EMMA will forward the call to the
member's office. If he is out of the office, EMMA will locate a member
if so desired or will take a message. EMMA provides all of the SO/HO
type of business requirements including single number, Locate, personal
directory and access to voice mail.
(4) EMMA FF (Family and Friends):
This service was developed to allow anyone that has the subscriber's
dedicated 888 number to access the subscriber's Voice Directory. This
allows the subscriber to give their number to a son in college, a
daughter in a distant city, etc. At the subscriber's discretion, each
one of the callers can call anyone whose name is in the Voice
Directory.
EMMA FF. "Locate":
This service also allows the owner to program any number in
his Locate file. The caller speaks "Locate" and the call is
instantly sent to the owner's cell phone, pager, office, or
any number he desires.
EMMA FF. "Telephone Calling Card":
The owner turns the service into a fully functional Telephone
Calling Card by speaking "Dial Number". EMMA will prompt for a
PIN. Once the PIN has been verified, the service prompts
"Number please" and the user may then speak the number or use
DTMF from the telephone pad.
2
VIP EMMA
Inbound Corporate extension directory - This directory stores the subscriber's
internal names and extensions. When Emma receives a call, she compares the
caller's request to the stored names and extensions and forwards the calls
accordingly. The directory is customized for each subscriber and can include
names, departments, and even branches at different locations.
Outbound corporate directory - (optional service) One or more outbound corporate
directories can be created to facilitate outbound calling. For example, a
company could create directories for branches, vendors, clients, etc. The user
accesses Emma through an extension number or DID and simply speaks the directory
listing and the call is connected, eliminating the need to look-up or dial the
number.
Outbound personal directory - (optional service) A personal directory is a
directory created for an individual user and is accessed with the use of an
authorization code or ANI. Individuals within the Company may want a directory
of their personal frequently called names.
Telephone Calling Card - Any company utilizing Emma can issue, track, and
terminate calling cards on a real-time basis. Calling cards are activated
instantaneously.
Effectively, an Emma user becomes a "virtual long-distance company." This
service can be restricted to specific users or specific phone numbers only.
This document and its attachments are confidential and proprietary information,
the exclusive rights to which are the sole property of Preferred Voice, Inc.
Upon receipt and acceptance of these materials, the recipient agrees not to
reproduce or distribute copies electronic, xerographic, verbal, or otherwise)
without the express written permission of Preferred Voice, Inc.
3
EXHIBIT A-1
-----------
Specifications
--------------
4
EMMA
[Graphic - Flow Chart of Call Flow]
EMMA USER FLOW
[GRAPHIC - Flow Chart of Emma User Flow]
SBL FUNCTIONAL CALL FLOW -
INCOMING CALL
[Graphic - Flow Chart of Smart Business Line Call Flow]
OUTGOING CALL
[Graphic - Flow Chart of Outgoing Call Flow]
REMOTE CALLING
CARD FUNCTION
[Graphic - Flow Chart of Remote Calling Card Function]
"LOCATE" FUNCTION
[Graphic - Flow Chart of "Locate" Function]
PROGRAM FUNCTION
[Graphic - Flow Chart of Program Function]
Power Requirements
o -48v 40 amp DC Power terminating at the Rack Space.
o Power Inverter then wired to a dual plug AC junction box.
Terminating Connections
o T-1's will be terminated with a male RJ-45 Connector
o POTS lines will be terminated with a male RJ-11 Connector
o ISDN BRI will be terminated with a male RJ-45 Connector
Space Required
o The PFVI System requires a 19" Rack
o The Inverter Requires a 19" Rack
o The Master switch requires a 19" Rack
o All other components will be placed on a shelf
The Monitor Mouse and Keyboard will be connected to a intelligent switch box.
Rack Layout:
[Graphic of Rack Layout]
EXHIBIT B
HARDWARE CONFIGURATION (24 PTS)
ITEM DESCRIPTION
FTU-2000A CUSTOM COMPUTER
PIIBX40P38 PENT 11 400MHz CPU
PIIBX33P38 PENT 11 333MHz CPU
64M040 64MB DIMM RAM
FD015 3.5" FDD, BLACK
HD91S 9.1GB HDD, SCSI
ALM-100B-H 4.3GB HDD, SCSI
CDKIT1 ALARM BOARD
CDT240A DUAL SLIM CD-ROM
SCSR03 SLIM LINE CD-ROM
MD566A JUMPERABLE FAX/MDM
MNT40 MS WIN NT 4.0
240SCT1 PORT RESOURCE
ANTARES VOICE RESOURCE
PRO 2V ALARM RESOURCE
PORT FEE VOICE REC RESOURCE
Optional Hardware Components
48v Inverter
Master Switch
Traffic Engineering
Users Ports
1000 11
2000 20
3000 26
Spare Kit
EXHIBIT C
---------
Additional 13 Tier III & 70 1 Tier IV Licensee Markets and Switches
-------------------------------------------------------------------
[to be added]
-------------
EXISTING 23
-----------
Ann Arbor, MI*
Augusta, GA*
Baton Rouge, LA*
Brevard, FL*
Corpus Christi, TX*
Xxxxxxx Xxxxx, XX*
Xxxxxxxxxxxx, XX*
Fort Xxxxx, FL*
Fort Xxxxx, IN*
Greensboro, NC*
Hampton Roads, VA*
Huntsville, AL*
Longview, TX*
Madison, WI*
Duluth, MN*
Pensacola, FL*
Roanoke, VA*
Sarasota, FL*
Savannah, GA*
Shreveport, LA*
Tallahassee, FL*
Topeka, KS*
Winston-Salem, NC*
Board Approved
--------------
Akron, OH
Charleston, SC
Dayton, OH
Toledo, OH
Lansing, MI
Xxxxxx, XX
Xxxxxxxxxxx, XX
Xx. Xxxxxxxxxx/Xxxxxxxxxx, XX
Pending (subject to change)
------------------------------
Beaumont, TX
Columbus, GA
Del Ray Beach, FL
Lakeland, FL
Macon, GA
Naples, FL
EXHIBIT D
---------
License Fees
------------
License Initiation Fee
Tier III Market = [Confidential Treatment Requested]**
Tier IV Market = [Confidential Treatment Requested]**
Monthly Recurring License Fee
Tier III Market = [Confidential Treatment Requested]**
Tier IV Market = [Confidential Treatment Requested]**
EXHIBIT E
---------
PVI Services Integration
1. Services Training - [Confidential Treatment Requested]**/day plus travel
and material expenses (Est. time 3 days).
o Target Audience
- Product Manager
- Product Marketing
o Contents
- Complete review of each PVI service description and application
- Market Position
- Target Market
2. Sales Training - [Confidential Treatment Requested]**/day plus travel and
material expenses. (Est. time 2 days).
o Service Descriptions
o Licensee Needs
o Sell to End User
- Business
- Residential
o Closing Techniques
o Role Playing
3. System Installation and Maintenance Training - [Confidential Treatment
Requested]**/day plus travel and material expenses (Est. time 4 days).
Installation
o Hardware Installation
o T-1 Configuration
o VIP Programming
- SCC
- DID
Maintenance
o Alarm Systems
o Hardware Replacement
o Hardware Expansion
4. Voice Recognition Training - [Confidential Treatment Requested]**/day plus
travel and material expenses. (Est. time 3 days).
o Voice Recognition Overview
o Cut Thru Sensitivity
o Speaker Dependent
o Speaker Independent
o Continues
o Discreet
o Phonetics
o Voice Print
o Product Design
o Limitations / Expectations
o Language
1
5. Licensee Customer Provisioning - [Confidential Treatment Requested]**/hour
plus system access connection charges.
6. Technical Support Help Desk. On a time and materials basis.
2
EXHIBIT F
SOURCE CODE ESCROW AGREEMENT
This Source Code Escrow Agreement is made as of this 3rd day of June,
1999, among Preferred Voice, Inc., a Delaware corporation ("Licensor"), KMC
Telecom Holdings, Inc., a Delaware corporation, on behalf of itself and its
wholly owned subsidiaries and affiliates ("Licensee"), and Chase Bank of Texas,
N.A. ("Escrow Agent").
The parties hereto hereby agree as follows:
1 Definitions.
(a) The "License Agreement" means the Software License
Agreement between Licensor and Licensee dated as of June 3, 1999.
(b) The "Source Code" means the source code listings in
magnetic media form and related programmer-level documentation for the computer
programs licensed to Licensee under the License Agreement and defined therein as
Software, together with any Updates as defined in this Agreement.
2. Escrow.
Pursuant to the terms of this Agreement, Licensor shall deposit the
Source Code in escrow with Escrow Agent to be released by Escrow Agent to
Licensee as authorized by this Agreement.
3. Ownership of Source Code.
Licensor warrants to Licensee that it possesses all of the rights in
the Source Code necessary to enter into this Agreement and to deposit the Source
Code with the Escrow Agent pursuant to its terms.
4. Initial Deposit of Source Code.
Licensor agrees to deposit with Escrow Agent, within ten (10) days of
the date the customer accepts the programs licensed to Licensee pursuant to the
License Agreement (collectively the "Licensed Software") a copy of the Source
Code corresponding to the Licensed Software.
5. Updates.
During the term of this Agreement, Licensor shall deposit with the
Escrow Agent the source code, listings, and related programmer-level
documentation for every update, correction, or new release of the Licensed
Software (collectively "Updates") released to Licensee in object code form.
Source code, listings and related programmer-level documentation shall be
deposited concurrently with each Update, but no more frequently than monthly nor
less frequently than quarterly (which quarterly deposits shall be made on or
about each January 1, April 1, July 1 and October 1 of each year during the term
of this Agreement).
1
6. Title.
Title to the Source Code will remain in Licensor. The rights of Escrow
Agent and Licensee in the Source Code are limited to the rights specifically
granted in this Agreement and will remain subject to the terms and conditions of
this Agreement.
7. Release of Source Code to Licensee.
If Licensee concludes that Licensor has failed in any material respect
to comply with the License Agreement or to update the Source Code pursuant to
Section 5 of this Agreement (which failure may include Licensors failure to be
Year 2000 Compliant (as defined in the License Agreement) and failure to remedy
such breach), or upon Licensor's making of an assignment for the benefit of its
creditors, or the institution by or against Licensor of proceedings in
bankruptcy looking towards the liquidation of Licensor or under any insolvency
or similar law or for receivership or dissolution, or Licensor's cessation of
business, it may notify Licensor in writing, specifying in reasonable detail the
matters that Licensor has failed to perform. For a period of twenty (20) days
after receipt of the notice, Licensor will have the right to cure the identified
breaches. In the event that Licensee concludes that the identified breaches have
not been cured within that period of time, Licensee may notify both Licensor and
Escrow Agent and demand that Escrow Agent release the Source Code to Licensee.
If Licensor disagrees that its obligations have been and remain breached,
Licensor may, within fifteen (15) days after receipt of Licensee's notice and
demand for release, notify both Escrow Agent and Licensee that it objects to
release of the Source Code. The failure of Licensor to furnish timely notice
objecting to the immediate release of the Source Code will conclusively
establish its consent to the immediate release of the Source Code to Licensee,
and the copy of the Source Code deposited in escrow in accordance with this
Agreement shall be released to Licensee. In the event of Licensor's timely
objection to release of the Source Code, representatives of Licensor and
Licensee shall meet no later than five (5) days after delivery of the objection
to attempt to resolve the dispute. If Licensor and Licensee are unable to
resolve the dispute within the following five (5) days, then either party may
commence arbitration under Section 8 to resolve the dispute.
8. Arbitration
(a) Licensee and Licensor agree that all disputes arising
hereunder between them that cannot be resolved by negotiation shall be resolved
through binding arbitration. Such arbitration will be conducted in Dallas,
Texas, or such other place as may be agreed to by the parties. These parties
further agree that this agreement to arbitrate may be enforced by an application
to any court having jurisdiction over the parties and the controversy.
(b) Unless otherwise agreed, the arbitration shall be
conducted by a three (3) arbitrators, one (1) of whom shall be selected by
Licensor, one (1) of whom shall be selected by Licensee and one (1) of whom
shall be selected by the arbitrators chosen by Licensor and Licensee to agree
upon an arbitrator. If a party (including the designated arbitrators) does not
select an arbitrator within ten (10) days of election to arbitrate, the other
party or parties may apply to the American Arbitration Association ("AAA") to
select an arbitrator who is reasonably familiar with the computer industry.
(c) The arbitrators shall set a time for a hearing of the
dispute not later than 10 days after their appointment, and a decision shall be
rendered no later than 30 days after the last hearing date, unless the parties
agree otherwise.
2
(d) The arbitration shall be conducted using the then
prevailing rules of the AAA for commercial arbitrations, including rules
relating to discovery; provided, however, that the arbitration will not be
conducted under the auspices of the AAA and the fee schedule of the AAA will not
apply unless AAA-appointed arbitrators are used or the parties agree to do so.
(e) The arbitrators will be limited to interpreting or
construing the applicable provisions of the License Agreement and this
Agreement, and will have no authority or power to alter, amend, modify, revoke
or suspend any condition or provisions of the License Agreement or this
Agreement.
(f) The arbitrators will be empowered to compel Licensor to
comply with its obligations under Sections 4 or 5 of this Agreement or to
prevent Licensor from wrongfully preventing or delaying the release of the
Source Code to Licensee.
(g) If the arbitrators find Licensor breached its obligations
but also find that it did so as part of a good faith dispute of its obligations
under the License Agreement or this Agreement, then the arbitrators shall order
Licensor to perform its obligations within fifteen (15) days, and may only order
release of the Source Code in the event Licensor does not so perform.
(h) The decision of the arbitrators will be binding on the
parties and will be enforceable in any court having jurisdiction over the
parties and the controversy.
(i) The arbitration costs shall be borne by the losing party,
and the prevailing party in the arbitration will be reimbursed for the
reasonable costs and expenses it incurs in the arbitration.
(j) In the event Escrow Agent institutes a petition for
interpleader in accordance with Section 12 or otherwise invokes the jurisdiction
of any court, then any party may petition such court to refer the dispute to
arbitration in accordance with this Section 8 and the court shall enforce the
decision of the arbitrator in disposing of such interpleader or other action.
9. License of Source Code.
Effective upon the delivery of the Source Code to Licensee in
accordance with the terms of this Agreement, Licensor grants to Licensee a
personal, nonexclusive, and nontransferable license only to use, modify,
maintain, and update the Source Code, solely for Licensee's internal business
and exclusively for the purpose of maintaining and updating the Licensed
Software. All modifications, enhancements, maintenance and updates to the
Licensed Software will be the property of Licensor, subject to Licensor
reimbursing Licensee for its costs of such work. Escrow Agent and Licensee shall
treat and preserve the Source Code as a trade secret of Licensor in accordance
with the same practices employed by Escrow Agent and Licensee to safeguard their
respective trade secrets against unauthorized use and disclosure. This Section
will survive the termination of this Agreement.
10. Scope of Understanding.
Escrow Agent's duties and responsibilities in connection with this
Escrow Agreement shall be purely ministerial and shall be limited to those
expressly set forth in this Escrow Agreement. Escrow Agent is not a principal,
participant or beneficiary in any transaction underlying this Escrow Agreement
and shall have no duty to inquire beyond the terms and provisions hereof. Escrow
Agent
3
shall have no responsibility or obligation of any kind in connection with this
Escrow Agreement or the Source Code and shall not be required to deliver the
Source Code or take any action with respect to any matters that might arise in
connection therewith, other than to receive, hold and deliver the Source Code as
herein provided. Without limiting the generality of the foregoing, it is hereby
expressly agreed and stipulated by the parties hereto that Escrow Agent shall
not be required to exercise any discretion hereunder. Escrow Agent shall not be
liable for any error in judgment, any act or omission, any mistake of law or
fact, or for anything it may do or refrain from doing in connection herewith,
except for, subject to Section 11 herein, its own willful misconduct or gross
negligence. It is the intention of the parties hereto that Escrow Agent shall
never be required to use, advance or risk its own funds or otherwise incur
financial liability in the performance of any of its duties or the exercise of
any of its rights and powers hereunder.
11. Reliance; Liability.
Escrow Agent may rely on, and shall not be liable for acting or
refraining from acting Upon, any written notice, instruction or request or other
paper furnished to it hereunder or pursuant hereto and believed by it to have
been signed or presented by the proper party or parties. Escrow Agent shall be
responsible for holding and delivering the Source Code pursuant to this Escrow
Agreement; provided, however, that in no event shall Escrow Agent be liable for
any lost profits, lost savings, or other special, exemplary, consequential, or
incidental damages in excess of Escrow Agent's fee hereunder and provided,
further, that Escrow Agent shall have no liability for any loss arising from any
cause beyond its control, including, but not limited to, the following: (a) act
of God, force majeure, including, without limitation, war (whether or not
declared or existing), revolution, insurrection, riot, civil commotion,
accident, fire, explosion, stoppage of labor, strikes and other differences with
employees; (b) the act, failure or neglect of either Licensor or Licensee or any
agent or correspondent or any other person selected by Escrow Agent; (c) any
delay, error, omission or default of any mail, courier, telegraph, cable or
wireless agency or operator; or (d) the acts or edicts of any government or
governmental agency or other group or entity exercising governmental powers.
Escrow Agent is not responsible or liable in any manner whatsoever for the
sufficiency, correctness, genuineness or Validity of the subject matter of this
Escrow Agreement or any part hereof or for the transaction or transactions
requiring or underlying the execution of this Escrow Agreement, the form or
execution hereof or for the identity or authority of any person executing this
Escrow Agreement or any part hereof or depositing the Source Code.
12. Right of Interpleader.
Should any controversy arise involving the parties hereto or any of
them or any other person, firm or entity with respect to this Escrow Agreement
or the Source Code, or should a substitute escrow agent fail to be designated as
provided in Section 17 hereof, or if Escrow Agent should be in doubt as to what
action to take, Escrow Agent shall have the right, but not the obligation,
either to (a) withhold delivery of the Source Code until the controversy is
resolved, the conflicting demands are withdrawn or its doubt is resolved or (b)
institute a petition for interpleader in any court of competent jurisdiction to
determine the rights of the parties hereto. In the event Escrow Agent is a party
to any dispute, Escrow Agent shall have the additional right to refer such
controversy to binding arbitration. Should a petition for interpleader be
instituted, or should Escrow Agent be threatened with litigation or become
involved in litigation or binding arbitration in any manner whatsoever in
connection with this Escrow Agreement or the Source Code, then, as between (a)
Licensor and Licensee on the one hand and (b) Escrow Agent on the other,
Licensor and Licensee hereby jointly
4
and severally agree to reimburse Escrow Agent for its attorneys' fees and any
and all other expenses, losses, costs and damages incurred by Escrow Agent in
connection with or resulting from such threatened or actual litigation or
arbitration prior to any disbursement hereunder.
13. Indemnification.
Licensor and Licensee hereby jointly and severally indemnify Escrow
Agent, its officers, directors, partners, employees and agents (each herein
called an "Indemnified Party") against, and hold each Indemnified Party harmless
from, any and all expenses, including, without limitation, attorneys' fees and
court costs, losses, costs, damages and claims, including, but not limited to,
costs of investigation, litigation and arbitration, tax liability and loss on
investments suffered or incurred by any Indemnified Party in connection with or
arising from or out of this Escrow Agreement, except such acts or omissions as
may result from the willful misconduct or gross negligence of such Indemnified
Party. IT IS THE EXPRESS INTENT OF EACH OF LICENSOR AND LICENSEE TO INDEMNIFY
AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM THEIR OWN NEGLIGENT ACTS
OMISSIONS.
14. Compensation and Reimbursement of Expenses.
As between (a) Licensor on the one hand and (b) Licensee on the other,
Licensee hereby agrees to pay Escrow Agent for its services hereunder in
accordance with the Fee Schedule I attached hereto by Escrow Agent and to pay
all expenses incurred by Escrow Agent in connection with the performance of its
duties and enforcement of its rights hereunder and otherwise in connection with
the preparation, operation, administration and enforcement of this Escrow
Agreement, including, without limitation, attorneys' fees and related expenses
incurred by Escrow Agent. The foregoing notwithstanding, as between (a) Licensor
and Licensee on the one hand and (b) the Escrow Agent on the other, Licensor and
Licensee shall be jointly and severally liable to Escrow Agent for the payment
of all such fees and expenses.
15. Consultation with Legal Counsel.
Escrow Agent may consult with its counsel or other counsel satisfactory
to it concerning any question relating to its duties or responsibilities
hereunder or otherwise in connection herewith and shall not be liable for any
action taken, suffered or omitted by it in good faith upon the advice of such
counsel.
16. Choice of Laws; Cumulative Rights.
This Escrow Agreement shall be construed under, and governed by, the
laws of the State of Texas, excluding, however (a) its choice of law rules and
(b) the portions of the Texas Trust Code Sec. 111.001, et seq. of the Texas
Property Code concerning fiduciary duties and liabilities of trustees. All of
Escrow Agent's rights hereunder are cumulative of any other rights it may have
at law, in equity or otherwise.
17. Resignation.
Escrow Agent may resign hereunder upon ten (10) days' prior notice to
Licensor and Licensee. Upon the effective date of such resignation, Escrow Agent
shall deliver the Source Code to any substitute escrow agent designated by
Licensor and Licensee in writing. If Licensor and Licensee fail to designate a
substitute escrow agent within ten (10) days after the giving of such notice,
Escrow Agent may, at its option, institute a petition for interpleader. Escrow
Agent's sole
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responsibility after such 10-day notice period expires shall be to hold the
Source Code and to deliver the same to a designated substitute escrow agent, if
any, or in accordance with the directions of a final order or judgment of a
court of competent jurisdiction, at any which time of delivery Escrow Agent's
obligations hereunder shall cease and terminate.
18. Severability.
If one or more of the provisions hereof shall for any reason be held to
be invalid, illegal or unenforceable in any respect under applicable law, such
invalidity, illegality or unenforceability shall not affect any other provisions
hereof, and this Escrow Agreement shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein, and the remaining
provisions hereof shall be given full force and effect.
19. Assignment.
This Escrow Agreement shall not be assigned by either Licensor or
Licensee (except to affiliates thereof) without the prior written consent of
Escrow Agent, which consent shall not be unreasonably withheld.
20. Term of Agreement.
The term of this Agreement commences on its effective date and will
continue until the Source Code is delivered to Licensee pursuant its terms; or
if the transfer has not occurred, this Agreement will terminate and the Source
Code will be destroyed upon Licensee's termination of this Agreement or upon
termination of the License Agreement, whichever occurs first.
21. Notices.
All notices required or permitted to be given hereunder shall be in
writing and shall be valid and sufficient if dispatched either (i) by hand
delivery, (ii) by telex, cable or facsimile transceiver, with confirming letter
mailed promptly thereafter in accordance with clause (iv) hereof, (iii) by
reputable overnight express courier or (iv) by certified mail, postage prepaid,
return receipt requested, deposited in any post office in the United States, in
any case, addressed to the addresses set forth on the signature page of this
Agreement, or such other addresses as may be provided from time to time in the
manner set forth above. When sent by cable or facsimile as aforesaid, notices
given as herein provided shall be considered to have been received when sent
during normal business hours; otherwise, notices shall be considered to have
been received only upon delivery or attempted delivery during normal business
hours.
22. General.
This Agreement contains the complete and exclusive agreement between
the parties, supersedes any and all prior or oral written communications,
proposals, and agreements, and may not be waived or modified except by the
parties' written agreement. The paragraph headings in this Agreement are for
convenience only; they form no part of the Agreement and will not affect its
interpretation. No delay or failure of any party in exercising any right under
this Agreement and no partial or single exercise of a right will be deemed to
constitute a waiver of that right or any other right under the agreement.
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IN WITNESS WHEREOF, the parties, by their duly authorized officers, have
executed this Escrow Agreement.
PREFERRED VOICE, INC. KMC TELECOM HOLDINGS, INC.
By: on behalf of itself and its wholly owned
---------------------------- subsidiaries and affiliates
Name: By:
---------------------------- -----------------------------------
Title: Name:
---------------------------- -----------------------------------
Title:
0000 Xxxxxxxxxx Xxxxxx -----------------------------------
Suite 570 0000 Xxxxx 000
Xxxxxx, Xxxxx 00000 Suite 300
Fax: 000-000-0000 Xxxxxxxxxxx, Xxx Xxxxxx 00000
Phone: 000-000-0000 Fax: 000-000-0000
Phone: 000-000-0000
Chase Bank of Texas, N. A.
Escrow Agent
By:
----------------------------
Its:
----------------------------
Address:
----------------------------
----------------------------
Fax:
----------------------------
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EXHIBIT G
Form of Acceptance Certificate
The undersigned, an authorized representative of KMC Telecom Holdings, Inc., a
Delaware corporation, on behalf of itself and its wholly owned subsidiaries and
affiliates ('Licensed'), in his/her capacity as , does hereby certify that (a)
the testing period (as such term is defined in the Software License Agreement,
dated as of May ___, 1999 (the "Agreement"), by and between Preferred Voice,
Inc. ("Licensor") and Licensee with respect to the System (as defined in the
Agreement) purchased or licensed by Licensee has been successfully completed,
(b) the System satisfies the requirements of the Specifications (as defined in
the Agreement) and (c) the System is hereby accepted by Licensee.
Date: KMC TELECOM HOLDINGS, INC.
--------------------------
By:
-----------------------------------
Printed Name:
-----------------------------------
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SCHEDULE 1
ESCROW AGENT FEES
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