CONTRACT FOR DELIVERY OF COMPUTER SYSTEM
This Contract for delivery of a computer system is made as of September 29,
1997, by and between ACE*COMM Corporation ("ACE*COMM"), located at 000 Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, and KMC Telecom Inc., KMC Telecom
II, Inc., and KMC Telecom of Virginia, Inc., collectively the "Customer" with
offices at 0000 Xxxxx 000, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx 00000.
RECITALS
Whereas ACE*COMM is a supplier of computer-based telephone billing products and
services and KMC is a competitive local exchange carrier and ACE*COMM intends to
sell and KMC intends to purchase certain telephone billing products and
services, ACE*COMM and KMC are entering into the following two agreements:
1. This CONTRACT FOR DELIVERY OF COMPUTER SYSTEM whereby ACE*COMM will provide
computer hardware, software, and documentation for KMC's customer billing
requirements.
2. A DATA PROCESSING SERVICES AND SUPPORT AGREEMENT whereby ACE*COMM will
provide computer processing services and support regarding billing and
additional services.
Now, therefore, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
ARTICLE I Purpose
The purpose of this Contract is to provide Customer with a computer system that
can handle current business requirements and that can be expanded in the future
to handle additional business and technical tasks. The system consists of
computer machinery, hereinafter referred to as "hardware", and computer
programs, hereinafter referred to as "software", and associated training and
documentation.
ARTICLE II Scope of Work
A. Deliverables -
1. ACE*COMM will deliver to Customer at Customer's designated
locations, items consisting of the hardware and software
components specified in Attachment A hereto, to be delivered in
accordance with the schedule set forth in Article V.A. and
detailed in the Functional Rollout Schedule ("the Schedule")
detailed in the Data Processing Services and Support Agreement,
which may be revised by Customer and ACE*COMM under mutual
agreement.
2. Documentation - ACE*COMM will provide to Customer one copy of
documentation on the computer hardware, operating system
reference manuals, and one copy of the user's manual for each
application software package. ACE*COMM will provide updates as
they are available.
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CONTRACT FOR DELIVERY OF COMPUTER SYSTEM
B. Independent Contractor Status. Each, party and its people are
independent contractors in relation to the other party with respect to
all matters arising under this Agreement. Nothing herein shall be
deemed to establish a partnership, joint venture, association or
employment relationship between the parties. Each party shall remain
responsible, and shall indemnify and hold harmless the other party,
for the withholding and payment of all Federal, state and local
personal income, wage, earnings, occupation, social security, worker's
compensation, unemployment, sickness, and disability insurance taxes,
payroll levies or employee benefit requirement (under ERISA, state law
or otherwise) now existing or hereafter enacted and attributable to
themselves and their respective people.
C. Installation and Training
1. Installation - ACE*COMM will install the software in accordance
with Article V.A.
2. Training - ACE*COMM will provide training for Customer on the
operations of the application software at ACE*COMM's facility.
As of the date hereof the parties anticipate the training shall
include a minimum of two (2) days planning and thirteen (13) days
of instruction which includes a maximum of twelve (12) attendees
per day. Parties will cooperate to determine whether the
training days are adequate. The training schedule will be
subject to mutual agreement and availability during normal
working hours.
ARTICLE III Compensation
A. Compensation - In return for the hardware, software, and services
provided by ACE*COMM under this Contract, Customer agrees to pay a
total fixed price listed in Attachment A. ACE*COMM reserves the right
to revise the price if Customer order Optional items contained in
Attachment A or alters the scope of any software package beyond that
mutually negotiated and agreed to in writing at the time this Contract
is signed in any material way, provided that ACE*COMM shall document
the basis for the prices, which shall correspond to the actual
additional work required minus any work value deleted.
B. Taxes - In addition to any other sums payable hereunder, Customer is
responsible for amounts equal to any sales or similar taxes related to
this sale however designated arising from or based upon the fees, this
Agreement, the licensed software and associated media and system
reference and user manual(s) furnished for their use, including any
sales and/or use tax, local privilege or excise tax, tariff, duty,
property tax or assessment (but excluding income taxes of ACE*COMM or
its employment related taxes) and related interest and penalties, if
any are imposed by any governmental authority at any time.
C. ACE*COMM is not responsible for any expenses incurred for
installation, testing, or operation of the system and its features
except for these expenses specifically and expressly set forth herein
as ACE*COMM's responsibility.
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CONTRACT FOR DELIVERY OF COMPUTER SYSTEM
D. Payments - All payments shall be made to ACE*COMM at:
ACE*COMM
Attn: Accounts Receivable
P. O. Xxx 00000
Xxxxxxxxx, XX 00000-0000
Or if by courier to:
ACE*COMM
Attn: Accounts Receivable
000 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
ARTICLE IV Project Management
A. Customer Project Manager - Customer will designate a Project Manager
with the responsibility and authority to perform the necessary
interface approval functions.
B. ACE*COMM Project Manager - ACE*COMM will designate a Project Manager
with the responsibility and authority to successfully complete the
project. ACE*COMM may use additional personnel as required under the
direction of the ACE*COMM Project Manager. If higher tier approval is
required, it shall be resolved expeditiously.
C. Reviews - ACE*COMM will provide to Customer weekly written reports
reviewing project status and setting forth any delays and plans to
mitigate the delays. Additional reviews will be scheduled as needed.
ARTICLE V Delivery and Payment Schedule
The Delivery and Payment Schedule is as follows:
A. Delivery Schedule - As defined in Data Processing Services and Support
Agreement N97-1257.
Contract Milestones
1. Contract Signed September 29, 1997
2. Phase 1 and Hardware On or before October 4,1997
3. Phase 2 On or before December 31,1997
4. Phase 3 On or before March 31, 1998
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B. Payment Schedule - Customer agrees to pay ACE*COMM when invoiced in
accordance with the schedule outlined in Attachment A and as follows:
At Contract 20%
At Installation (Base) 20%
At Acceptance (Base) 20%
At Phase 2 Installation 10%
At Phase 2 Acceptance 10%
At Phase 3 Installation 10%
At Phase 3 Acceptance 10%
Additional and Optional hardware shall be installed as ordered and on
a mutually agreed schedule.
C. Late Payment - Payments not received within thirty days of the date of
invoice will be assessed a late payment penalty of 1 % per month.
ARTICLE VI Installation of Hardware and Software
A. Hardware - The hardware specified in Attachment A hereto will be
delivered F.O.B. Gaithersburg, directly to Customer's specified
location by a transport carrier. Within two (2) days after receipt of
the hardware, Customer and ACE*COMM will immediately arrange for the
installation of the hardware in accordance with Article V.A.
B. Software - ACE*COMM will install the software programs and
modifications in accordance with the mutually developed implementation
schedule in accordance with Article V.A.
ARTICLE VII Maintenance of Software and Hardware
A. Hardware - Customer is entitled to field service as provided under
Data Processing Services and Support Agreement which presently is
Monday through Friday, 8:00 am to 10:00 pm, EST, excluding holidays,
and at the current prevailing yearly field service costs under said
Agreement.
B. Applications Software - ACE*COMM will immediately create an action
plan to correct all software errors to the purchased application
software for the period of three (3) months from acceptance of each
phase by Customer of the application software at no additional cost to
Customer. Following the three-month period, a software maintenance
and subscription service will be available. Dispute resolution
procedures will be followed for remedy.
Under no circumstances shall Customer withhold payment or part of a
payment beyond the schedule provided in Section V because of errors or
inconsistencies in the hardware or software system. ACE*COMM will
remedy any such problem in accordance with the preceding paragraph.
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ARTICLE VIII Inspection and Acceptance of Hardware and Software
A. Inspection and Acceptance of Hardware or Software- ACE*COMM shall
provide an Acceptance Test Plan for KMC's review and approval for
each phase. ACE*COMM will execute the acceptance test procedures
in the presence of the Customer. Customer shall have ten (10)
working days from the date ACE*COMM notifies Customer that
installation of the hardware or software is complete. By the end
of such ten (10) day period, Customer shall either submit a
written acceptance certificate or notice of any test failures to
ACE*COMM. ACE*COMM shall correct any failure and repeat the
appropriate test procedure, and notify Customer when complete.
The software shall be accepted when any of the following events
occur:
1. Customer submits a written acceptance.
2. The acceptance test has been completed with no failures as signed off
by the parties.
3. Customer uses the software in a production mode provided that if there
are errors or defects they will be corrected promptly and if such
defects are material, warranty shall commence on the date the
corrections are complete.
After acceptance, any failures that occur shall be corrected under the warranty
provisions.
ARTICLE IX General Terms and Conditions
A. Proprietary Consideration
1. Server Software Program License - Customer agrees to the
following terms and conditions of the following Software
Program License.
Software is provided under license for installation on a
single site (Central Processing Unit ("CPU") identified by
manufacturer, model and serial number) for use by Customer
to process its own administrative, accounting and/or
management information. Software may only be copied, in
whole or in part, for installation and use on the identified
CPU. Copies in whatever form shall include the copyright or
proprietary rights notice. Customer understands that the
licensed software is proprietary to ACE*COMM. Customer is
authorized to make modified versions of the Programs
provided the originals and copies thereof: (1) acknowledge
copyrights; and (2) are installed and used on the CPU
identified by manufacturer, model and serial number.
Customer agrees not to provide or otherwise make available
the software or modified originals or copies of either to
anyone. Software may not be assigned, sublicensed, or
otherwise transferred; title or ownership of software is not
transferred to Customer. Use of software or modified
versions, for purposes other than specified herein, will
require the prior execution of a separate license agreement.
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2. Client Software Program License - Customer agrees to the
following terms and conditions of the following Software
Program License.
Software is provided under license for installation on a
single CPU (identified by manufacturer, model and serial
number at installation) for use by Customer to process its
own administrative, accounting and/or management
information. Software may only be copied, in whole or in
part, for installation and use on the identified CPU or
other Customer client workstations in accordance with
Article V.A. within the purchased licensed limit. Copies in
whatever form shall include the copyright or proprietary
rights notice. Customer understands that the licensed
software is proprietary to ACE*COMM. Customer is authorized
to make modified versions of the Programs provided the
originals and copies thereof: (1) acknowledge copyrights;
and (2) are installed and used on Customer's CPU identified
by manufacturer, model and serial number, (on a, as
requested basis, by ACE*COMM with not less than 30 days
notice for audit purposes). Customer agrees not to provide
or otherwise make available the software or modified
originals or copies of either to anyone. Software may not
be assigned, sublicensed, or otherwise transferred; title or
ownership of software is not transferred to Customer, except
as provided in Section I. Use of software or modified
versions, for purposes other than specified herein, will
require the prior execution of a separate license agreement.
3. "Execute Only" Form - The system software will be delivered
in an "execute only" form that cannot be modified by
Customer. The licensed applications software will also be
delivered in an "execute only" form that cannot be modified
by Customer.
4. Protection of Customer Data - Since in the course of this
Contract ACE*COMM may obtain access to Customer's
proprietary technical and business information, ACE*COMM
will take firm measures to assure that this information is
handled in a business confidential manner and not released
to third parties (i.e. in accordance with Section 7 of the
Data Processing Services and Support Agreement).
B. Warranties
1. Licensed Application Software Warranty - ACE*COMM warrants
that the licensed applications software, when delivered,
will perform as represented herein; however, Customer
acknowledges that the licensed applications software may
have immaterial residual documentation or programming errors
provided, however, that none of the Software shall be
subject to failure on account of any such errors, whether
individually or in the aggregate, during the warranty
period, ACE*COMM will provide all reasonable services to
correct such errors reported and documented by Customer
which ACE*COMM's diagnosis indicates are caused by a defect
in a version unaltered by Customer of the delivered licensed
applications software. For each licensed applications
software package, this warranty is valid for a period of
three months from the date each licensed application
software package is accepted by Customer ("Warranty
Period").
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CONTRACT FOR DELIVERY OF COMPUTER SYSTEM
2. Hardware Warranties - All hardware warranties from the
hardware manufacturer will be passed through to Customer.
ACE*COMM makes no warranty on its own behalf either explicit
or implicit and Customer does hereby waive any and all
claims, suits or actions which it or they may have for
damages including incidental or consequential damages
arising thereunder; and, ACE*COMM makes no further or
additional warranties as to the hardware: except that
ACE*COMM warrants software provided hereunder will operate
correctly on the hardware provided. While hardware is under
warranty, ACE*COMM will work with hardware manufacturers to
effect necessary repairs. Thereafter, these services shall
be provided under the Data Processing Services and Support
Agreement.
3. No Hardware Schedule Warranty - ACE*COMM cannot warrant the
hardware delivery schedule quoted by the hardware
manufacturer. All ACE*COMM's schedules will slip on a
day-to-day as delivery of the hardware slips. Consequently,
Customer's Hardware and System Software payments will slip
also.
4. Customer Held Harmless from Infringement Claims - ACE*COMM
warrants to Customer the applications software contains no
Customer components that have not been duly acquired by
ACE*COMM for resale, or otherwise infringe upon the rights
of any others. Customer is held harmless from any
infringement claims.
5. Funding Available - Customer warrants that funds have been
planned and will be available for payment in accordance with
the payment schedule in Contract Article V (B).
6. Liability - ACE*COMM will make its best effort to meet the
schedule milestones.
C. Other Liability - ACE*COMM shall not be liable to Customer for any
incidental or consequential damages arising from Customer's use of
ACE*COMM supplied equipment, software programs, or services.
D. Nonexclusive Agreement - This contract is nonexclusive. Nothing
contained in this contract shall be construed to prohibit ACE*COMM
from selling or leasing the same or similar equipment and software to
others.
E. Excusable Delays and Failures - ACE*COMM shall not be responsible for
any failure to perform due to causes that are not foreseeable and
which are beyond its reasonable control provided that such cause is
not the fault of ACE*COMM and further provided that ACE*COMM endeavors
to the extent it is commercially reasonable to do so, mitigate and
schedule around the delay.
F. Indulgences - Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power, or privilege under this
Contract shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude
any other or further exercise of the same or of any other right,
remedy, power, or privilege with respect to any other occurrence.
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CONTRACT FOR DELIVERY OF COMPUTER SYSTEM
G. Controlling Law - This Contract and all questions relating to its
validity, interpretation, performance and enforcement shall be
governed by and construed in accordance with the laws of the State of
New York, without reference to principles of conflicts of law.
H. Notices - All notices, requests, demands, and other communications
required or permitted under this Contract and the transactions
contemplated herein shall be in writing and shall be deemed to have
been duly given, made and received when delivered in person or
transmitted by telecopier ("fax") machine (answerback confirmation
received), one (1) day after being sent by nationally reputable
overnight courier, or when received after being sent by first-class
mail postage prepaid to the addresses set forth below, or to such
other address as the parties may from time to time give notice:
KMC Telecom Address: ACE*COMM Address
Xx. Xxxxxxx Xxxxxxxx Mr. S. Xxxxxx Xxxx
Chief Financial Officer Vice President, NET*COMM
KMC Telecom Inc. ACE*COMM, Corporation
0000 Xxxxx 000 000 Xxxxxx Xxxxxxx Xxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
Tel (000) 000-0000 Tel (000) 000-0000
Fax (000) 000-0000 Fax (000) 000-0000
I. Binding Nature of Agreement; Assignment. - This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no party may assign or
transfer its rights or obligations under this Agreement without the
prior written consent of the other party hereto, which shall not be
unreasonably withheld. Customer may assign this Agreement either (i)
to a direct affiliate which is the Project company pursuing one or
more cities, provided such assignee is under common ownership and
control with Customer and establishes it is creditworthy to the
reasonable satisfaction of ACE*COMM or (ii) to its lenders for
purposes of meeting lenders' collateral security requirements.
Consent of assignment shall not require additional payment except to
the extent that ACE*COMM's costs increase.
J. Separable Provisions - The provisions of this Contract are independent
of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable
in whole or in part.
K. Entire Contract - This Contract contains the entire understanding
between the parties hereto with respect to the subject matter hereof,
and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or
written, except as herein contained. The express terms hereof control
and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms other than by an agreement in
writing. This Contract supersedes and replaces in all respects and
relates back to that certain Letter Agreement between the parties
dated as of August _____ 1997.
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CONTRACT FOR DELIVERY OF COMPUTER SYSTEM
L. Default. Either party shall be in default of this Agreement if:
(i) it breaches any material provision hereof and fails within thirty
(30) days after receipt of notice of default to correct such default
or to commence corrective action reasonably acceptable to the
aggrieved party and proceed with due diligence to completion; provided
that Customer shall not be in breach for purposes of giving a notice
of breach on account of late payment until payments are at least
thirty (30) days past due and the customer shall have ten (10) days to
correct such default; or (ii) it becomes insolvent, makes an
assignment for the benefit of its creditors, a receiver is appointed
or a petition in Bankruptcy is filed with respect to the party and is
not dismissed within thirty (30) days. Upon default by a party, the
non-breaching party may terminate this Agreement at the end of the
applicable grace period by giving written notice of the intent to
terminate and specifying the date of termination.
M. Modification - This Contract may be amended or modified at any time by
mutual agreements of the parties, in writing.
N. Term of Agreement. This Agreement shall be effective from the date
indicated above and, unless terminated earlier under Section L
("Default"), shall continue in full force and effect until all work is
complete and all payments are made. Such termination shall have no
effect on Customer's obligation to pay for all amounts due hereunder
or the parties' rights, obligation under Proprietary Considerations,
or limitations on remedies and liabilities.
ARTICLE X Signatures
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Contract by their duly authorized representative as of the day and
year written above.
KMC Telecom Inc. ACE*COMM Corporation
By:_________________________________ By:________________________________
Title:______________________________ Title:_____________________________
KMC Telecom II, Inc. KMC Telecom of Virginia, Inc.
By:_________________________________ By:_________________________________
Title:______________________________ Title:______________________________
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