LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is entered into this day of
February 15, 1999 between H.O. SYSTEMS, INC., a corporation having its offices
at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxx XX. 00000, hereafter referred to as
"H.O." and Xxxxxx Communications Corporation, having its principal office at
00000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000 Xxxxxxxx Xxxx, XX 00000, hereafter
referred to as "Customer".
WHEREAS, Customer desires to obtain a limited nonexclusive license right to
use the H.O. Cellular Information Management System known as H.O. CIMS billing
and information management licensed software (the "Licensed Software") as
described below, operated by Customer, and
WHEREAS, H.O. desires to license the Licensed Software to Customer upon the
terms and conditions set forth in the Agreement, for use in each and every
Cellular Market operated by Customer.
THEREFORE, in consideration of the above declarations and the covenants and
conditions set forth in this Agreement, the parties agree as follows:
1. GRANT: LICENSE FEE. In consideration of the payment of a one time license
fee of $1.00 H.O. hereby grants to Customer, a nontransferable,
nonexclusive license to use the Licensed Software. The initial term of this
Agreement will commence upon the first invoice for month end date
reflecting 100,000 phones or more, ("the Effective Date") and will end on
the 4th anniversary of the Effective Date, unless terminated earlier in
accordance with the provisions of this Agreement. Thereafter, the term of
this Agreement will automatically extend for successive 1 year periods
after such anniversary date unless either of the parties notifies the other
party in writing at least 90 days prior to such anniversary date, or 90
days prior to the end of any such one year extension period as the case may
be, that this Agreement will not be so extended.
2. LIMITATIONS ON USE. Customer shall use the Licensed Software only on
Central Processing Units provided and designated by H.O. (the "Designated
CPU"). Customer may make (1) backup copy of the Licensed Software, for
backup purposes, which must display the copyright notice and information
relating to the proprietary rights as they appear in the Licensed Software.
Customer shall not decompile, disassemble, or reverse engineer any portion
of the Licensed Software. Customer shall not allow the Licensed Software to
be used for time-sharing or service bureau, or any similar purpose. In the
event the Designated CPU fails, Customer may use the Licensed Software on
another processing unit at the same location upon notification to H.O.
3. CONFIDENTIALITY.
A. Both parties acknowledge that they will possess Confidential
Information of the other party, including the other's proprietary or
business information, the other's trade secrets as well as, the
Licensed Software, and other vital data on the Customer's
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business. Each party will use commercially reasonable efforts, but
not less stringent than the means that it uses to protect its own
confidential information, to prevent the disclosure and to protect
the confidentiality of written information received from the other
party which is marked or identified as confidential, or which
relates to the number of subscribers (collectively, "Confidential
Information"). Each party will use Confidential Information
received from the other party only in connection with the purposes
of this Agreement. The provisions of this Paragraph (3) will not
prevent either party from disclosing its own Confidential
Information or from disclosing Confidential Information which is
(a) already known by the recipient party without an obligation of
confidentiality; (b) publicly known or becomes publicly known
through no unauthorized act of the recipient party; (c) rightfully
received from a third party; or (d) required to be disclosed
pursuant to a requirement of a governmental agency or law so long
as the disclosing party provides the other party with notice of
such requirement prior to any such disclosure. This provision shall
survive the termination or expiration of this Agreement. Specific
pricing terms of this Agreement shall be considered Confidential
Information by both parties.
B. The term "Confidential Information" as used above shall also
include any and all terms and provisions of this Agreement, including,
without limitation, the pricing terms set forth in or related to this
Agreement (the "Pricing Terms"). In addition to Customer's
obligations set forth in Paragraph A above, Customer shall at all
times use its best efforts to prevent the disclosure and protect the
confidentiality of the Pricing Terms. Customer shall not disclose any
Pricing Term or aspect thereof whatsoever to any person whatsoever
unless (a) expressly authorized in writing by H.O., or (b) Customer is
legally compelled to make such disclosure and Customer has furnished
H.O. prompt notice of such fact (so that H.O. may seek an appropriate
protective order or other remedy) and a written opinion of its counsel
reasonably acceptable to H.O. opining that Customer is required to
make such a disclosure or else stand liable for contempt or suffer
other material censure or material penalty. In the event disclosure is
permitted under clause (b), Customer shall use its best efforts to
obtain reliable assurance that confidential treatment will be accorded
the Confidential Information so disclosed.
C. H.O. and Customer acknowledge and agree that it may be difficult,
if not impossible, to accurately determine the amount of damages that
H.O. will incur if Customer breaches or otherwise fails to comply with
Paragraph B above. Accordingly, the parties agree that as liquidated
damages for such breach or noncompliance Customer shall pay
immediately an amount equal to 2 times the xxxxxxxx charged by H.O.
under the Agreement for the month immediately preceding the month
during which the breach or noncompliance occurred. In addition to such
liquidated damages or any other remedy available to H.O. and in
addition to and notwithstanding Section 10 below, upon such breach or
noncompliance with Paragraph B, H.O. shall have the right to
immediately (without opportunity to cure) terminate this Agreement
including, without limitation, all licenses granted thereunder, at its
sole discretion upon notice to Customer as of the date specified in
such notice of termination; provided, however, that if H.O. fails to
exercise such
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termination right, Customer shall remain obligated to pay the
liquidated damages in addition to any other amounts due H.O. under
the Agreement, and neither the failure nor the delay in exercising
any right, power or privilege under this Paragraph C will operate
as a waiver of such right, power or privilege and no single or
partial exercise of any such right, power or privilege by H.O. will
preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
D. Customer agrees to indemnify and hold H.O. harmless from any
damages, loss, cost, or liability (including legal fees and the
cost of enforcing this indemnity) arising out of or resulting from
any unauthorized use or disclosure by Customer or Customer's
employees or agents of the Confidential Information or other
violation of this Section 3. In addition, because an award of money
damages (whether pursuant to the foregoing sentence or otherwise)
would be inadequate for any breach of this Agreement by Customer of
Customer's employees or agents and any such breach would cause H.O.
irreparable harm, Customer also agrees that, in the event of any
breach or threatened breach of this Agreement, H.O. will also be
entitled, without the requirement of posting a bond or other
security, to equitable relief, including injunctive relief and
specific performance. No right or remedy conferred upon H.O. by any
provision of this Agreement is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or thereafter
existing at law or in equity or otherwise.
4. WARRANTY. H.O. warrants that it has the power and authority to grant this
License to Customer and that the Licensed Software will be free from
material errors. H.O. also warrants that the Licensed Software will perform
substantially in compliance with the specifications of the cellular
telephone industry standards applicable to the services to be performed,
including roaming clearinghouse standards for the processing of roaming
records as promulgated from time to time contained in the software. THE
FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESSED OR
IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE AND WARRANTIES OF MERCHANTABILITY.
5. INSTALLATION AND TRAINING.
X. X.X. shall provide initial training, free of charge, for each new
market at each new cluster or call center acquired by Customer, or
where deemed appropriate by Customer and H.O., in the operation and
use of the Licensed Software and associated systems either at the
Customer's site or in Savannah, Georgia, as requested by Customer.
Reasonable out of pocket expenses, such as travel, meals and lodging,
shall be paid by Customer. Training shall consist of the following:
Installation and optimization of all computer network components.
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Understanding accounting, monthly, and daily reports.
Administration of A/R collection procedures.
Work order, payment, and adjustment processing.
Switch Manager (if applicable)
Table updates and changes.
Roamer distribution (incollects and outcollects).
Documentation.
B. Any additional training, after initial training, requested by Customer
shall be at the hourly rate of $100.00. The Customer shall reimburse
H.O. for all reasonable out of pocket expenses, such as travel, meals
and lodging, incurred by H.O. in connection with any additional
training requested by Customer.
C. H.O. shall invoice Customer on a monthly basis following the final
xxxx run for the month, a maintenance fee equal to the greater of:
i) the sum of:
(1) $1.60 for each active phone from 0 to 100,000
(2) $1.50 for each active phone from 100,001 to 200,000
(3) $1.40 for each active phone from 200,001 to 300,000
(4) $1.30 for each active phone from 300,001 to 400,000
(5) $1.20 for each active phone from 400,001 to 500,000
(6) $1.10 for each active phone from 500,001 to 600,000
(7) $1.00 for each active phone from 600,001 to 1,000,000
(8) $0.90 for each active phone above 1,000,001
(volumes are tiered discounts)
(6) $.50 for each non-cellular service, i.e. paging & internet
or
ii) $3,000.00 per file server site.
6. MAINTENANCE. The maintenance pricing fee covers (a) all updates and
modifications as requested by Customer which H.O. furnishes without charge
to all Customers of the Licensed Software (software releases) and (b)
telephone support from 8:00 AM Eastern Standard Time - 8:00 PM Pacific
Standard Time, Monday through Friday, except holidays. After hours
emergency support shall be through the use of a 24 hour pager. Maintenance
shall be performed from remote location through the use of one, or more if
necessary, frame relay or equivalent connection to H.O. offices. The
expense of such lines shall be passed through to, and paid for by the
Customer. All updates and modifications will be furnished in operable
condition. The maintenance fee does not cover "customizations".
Customizations are substantial modifications to the Licensed Software made
on behalf of Customer and not furnished to all other H.O. clients.
Customizations, if feasible, shall be made at Customers written request, at
the rate of $100.00 per man-hour. Customer shall not make any modifications
or additions to the Licensed Software or derivative works of the Licensed
Software without the prior written consent of H.O. H.O. shall not be
responsible for maintenance or support of any portion of the Licensed
Software affected by modifications, additions, or derivative works made
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by the Customer. H.O. shall have sole and exclusive rights in and ownership
of all additions to, modifications, derivative works, and customizations of
the Licensed Software. Customer will afford to the representatives of H.O.
access, during normal business hours, to Customer's premises sufficient to
enable H.O. to inspect, repair, replace or remove any equipment or other
assets of H.O. installed or otherwise present on Customer's premises.
X. X.X. Software shall provide roaming distribution for Customer at no
additional charge. Roaming distribution is considered the processing
of Customer outcollects, timely delivery of those records to the
appropriate clearinghouse, and timely delivery of incollects as they
are received from the appropriate clearinghouse for inclusion in
Customers monthly billing process. Timely is defined as the submission
of outcollect messages to the appropriate clearinghouse within 30 days
of the call occurrence, or the industry standard as defined by
Cibernet Corp. of Washington DC, whichever is shorter.
B. H.O. Software will contract with a third party vendor for print and
mail services for Customers' monthly xxxx processing (including
postage, printing, stuffing, mailing, micro fiche/CD Rom). Customer
may also transmit xxxxxxx messages to the printing vendor supplying
print and mail services. Upon receipt of the printers xxxx image tape
or electronic transmission from Customer, H.O. guarantees a turnaround
time of three (3) days if the tape or electronic transmission is in
readable format. In the event H.O. is unable to provide printing
services, Customer shall, in addition to any other rights it may
possess, have the right to contract directly with any third party,
including H.O.'s vendor, for printing services. All costs, as
referenced in Addendum B, associated with this Paragraph B shall be
the responsibility of the Customer.
C. H.O. will provide the necessary computer equipment for Customer use
during the term or terms of the Agreement. This equipment does not
include any adjunct processors needed for communication to or from the
switch for call collection and/or service provisioning or any
point-of-sale equipment. The right to title of ownership of the
equipment shall be retained by H.O. Software. Provision of the
computer hardware shall include the Designated CPU; printer;
necessary tape drive devices; I/0 terminal device server for remote
offices and a high-speed modem for maintenance communications. H.O.
will not provide cables or cabling services, back up tapes,
terminals or paper stock for reports and/or xxxxxxx notices. H.O.
shall be responsible for the maintenance, repair, up grades, and
replacement of the computer hardware in the event of failure or
factory defects (excluding misuse, abuse, neglect, or natural
disaster) during the term of this Agreement. In the event of a
failure, replacement components shall be shipped via overnight
carrier to Customer. Client will use best efforts to assist H.O. in
its maintenance, repair up grades, and replacement of computer
parts. If Customer is unable to provide the necessary assistance
H.O. will dispatch support personnel or dispatch contracted support
personnel.
D. H.O. will maintain enough memory (RAM) and disk drive space to provide
on line retrieval of six (6) months call detail and 12 months account
level detail inclusive of
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memos and work orders. Postage and shipping charges shall be paid
by the shipping party in all cases for the shipment of repaired or
replacement parts. All costs arising from the maintenance, repair
or replacement of the hardware resulting from lightning, electrical
surges or Acts of God shall be the responsibility of the Customer.
7. LIMITATION OF LIABILITY. H.O.'s LIABILITY FOR ALL DAMAGES OCCURRING UNDER
THIS AGREEMENT FROM ANY CAUSE OF ACTION WHATSOEVER EXCEPT INTENTIONAL,
WILLFUL MALFEASANCE SHALL NOT EXCEED THE AVERAGE OF THE THREE PREVIOUS
MONTHS MAINTENANCE FEES PAID BY CUSTOMER. NOTWITHSTANDING ANY OTHER
PROVISION CONTAINED HEREIN, H.O. SOFTWARE SHALL IN NO WAY BE LIABLE FOR
LOST PROFITS, LOST COMPUTER TIME, OR ANY OTHER INCIDENTAL OR CONSEQUENTIAL
DAMAGES. THE OCCURRENCE OF ANY LOSS REIMBURSED TO CUSTOMER UNDER THIS
PROVISION SHALL BE IN THE FORM OF CREDITS AGAINST OUTSTANDING INVOICE
BALANCES DUE TO H.O.
8. INFRINGEMENT INDEMNITY. Notwithstanding anything to the contrary in this
Agreement, H.O. will, at its own expense, defend any action brought against
Customer to the extent such action is based on a claim that the Licensed
Software, used within the scope of the license granted herein, infringes a
copyright perfected under United States statute, infringes a patent granted
under United States law, or constitutes an unlawful disclosure, use, or
misappropriation of another party's trade secrets or similar property
right. H.O. Software will bear the expense of such defense and pay any
damages and attorneys' fees finally awarded by a court of competent
jurisdiction which are attributable to such claim, provided that Customer
notifies H.O. Software promptly in writing of the claim, and that Customer
allows H.O. Software to fully direct the defense or settlement of such
claim. H.O. will not be responsible for any settlement or compromise made
without its consent. Should the Licensed Software, or any component
thereof, become, or in H.O.'s reasonable opinion, be likely to become, the
subject of a claim subject to the provisions of this Section 8, then H.O.
may, at its option, use commercially reasonable means to procure for the
Customer the right to continue using the Licensed Software so that it
becomes non-infringing provided that the level of services rendered to
Customer will be materially equivalent to the services rendered prior to
such replacement or modification.
9. NO TRANSFER OR EXPORT. Except to a wholly owned subsidiary, Customer shall
not assign, sub license, or otherwise transfer, in whole or in part, this
Agreement or any license or right granted hereunder, and Customer shall not
permit any such assignment, sub license, or other transfer without H.O.'s
written consent. Customer shall not export the Licensed Software outside of
the United States without the prior written consent of H.O. H.O. may at
its sole discretion assign or otherwise transfer its rights and obligations
under this Agreement to any third party, whether of not affiliated with
H.O., upon notice to Customer of such assignment or transfer, with such
assignment or transfer being effective as of the date specified in such
notice.
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10. DEFAULT AND TERMINATION.
A. Termination for cause. Except as provided in Section 3, in the event
that either party hereto materially defaults in the performance of any
of its duties or obligations hereunder, which default shall not be
substantially cured within 30 days after written notice is given to
the defaulting party specifying the default, or, with respect to any
default which cannot be reasonably cured within 30 days, if the
defaulting party fails to proceed within 30 days to commence curing
said default and thereafter to proceed expeditiously to substantially
cure the same, then the party not in default may, by giving written
notice thereof to the defaulting party, terminate this Agreement as of
a date specified in such notice of termination.
B. If Customer fails to comply with Paragraphs 2, 3.A, or 9, then the
provisions of Section 10.A apply, except to the extent a different
remedy is otherwise specified. Upon termination of the Agreement
pursuant to Section 3 or Section 10.A, the License granted hereunder
shall cease and Customer shall immediately destroy the Licensed
Software and any related materials, equipment or other assets, unless
H.O. requests, in writing, the return of any such materials. In this
event, such materials shall be immediately returned. Customer shall
furnish H.O. with a written certificate stating that the original
Licensed Software and any backup copies of the Licensed Software in
the Customer's possession have been destroyed. Notwithstanding any
provisions contained herein, if notification to terminate this
Agreement is received from the Customer during the first year, the
Customer agrees to reimburse H.O. for hardware purchases, start up
expenses, and installation expenses incurred by H.O.
11. GENERAL. This Agreement shall constitute the entire agreement between the
parties and supersedes all prior agreements and understandings between the
parties with respect to the subject matter hereof. This Agreement shall be
binding on the parties and their respective successors and assigns. The
parties acknowledge that this Agreement shall remain in full force and
effect in accordance with its terms notwithstanding any merger of Customer
with or into any other person. Customer shall not sell, assign, transfer or
otherwise dispose of all or substantially all of its assets to any person,
in any transaction or series of related transactions, unless the transferee
or assignee of Customer's assets shall assume all obligations of Customer
hereunder. This Agreement shall not be modified except by written document
signed by both parties. ThIs Agreement shall be governed by the laws of the
State of Georgia. Any waiver of any breach of any provision of this
Agreement shall not operate as a waiver of any subsequent breach. If any
provisions of this Agreement are held invalid or unenforceable, the
validity and enforceability of the remaining provisions shall in no way be
affected or impaired thereby.
12. So long as all electronic interfaces with the HO CIMS application
(including but not limited to the MTSO) are Y2K compatible, HO Software
warrants that its HO CIMS application will be capable of: 1) accurately
processing date information
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before, during, and after midnight, December 31, 1999, including but not
limited to accepting date input, providing date output, and performing
calculations and comparisons on dates or portions of dates. Date
interpretation and manipulation must be correct for all valid date
values within the application domain; 2) function accurately and without
interruption before, during, and after January 1, 2000, without any
change in operations associated with the advent of the new century; 3)
respond to two-digit year-date input in a new way that resolves the
ambiguity of the century in a disclosed, defined and predetermined
manner. Interfacing software must make the same century assumptions when
processing two-digit years; 4) process 2000 as a leap year; 5) and
correctly process any date with a year specified as "99" and "00".
13. H.O. and Customer agree that each others employees shall not be hired,
induced or otherwise persuaded to become an employee or agent of the other
without the written consent of the other party.
14. Escrow of Software
Within 90 days of the execution of this license agreement, HO Software shall
contract with a third party Escrow Provider for the on-going storage and
protection of the source code and related documentation for all products made
available to Customer under this License Agreement. The Escrow provider shall be
mutually agreed to by HO Software and the Customer. Immediately following the
execution of the contract HO shall deposit, with the Escrow provider, a copy of
the source code and related documentation for the release or releases of
software being made available to the Customer. Further, as additional versions
of the software are created and issued by HO, HO will provide copies of source
code and related documentation to the Escrow Provider within 30 days of the new
version being utilized by the Customer. The term of the Escrow agreement shall
coincide with the term of this license agreement.
The Escrow contract will be established such that deposited materials may only
be released to the Customer under the following conditions:
HO Software or any subsequent acquirer of HO Software ceases operation
as a provider of the HO Cellular Information Management System (HO
CIMS);
HO Software ceases to provide Maintenance as defined in paragraph 6
for a period of 12 consecutive months;
It is understood that the release of deposited materials shall be solely to
allow the Customer to continue using the software for the originally intended
purposes as defined else where in this license agreement. Under no circumstances
will the release of deposited materials to Customer be for any purpose other
than for Customer to use for internal processing of the Customer's transactions.
Customer represents that it has read this Agreement and understands and agrees
to all terms and conditions stated herein.
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ACCEPTED: ACCEPTED:
H.O. SYSTEMS, INC. Xxxxxx Communications Corporation
------------------------------ -----------------------------------
SIGNATURE: /s/ Xxxxxx Xxxxx SIGNATURE /s/ G. Xxxxxx Xxxxx
------------------------------ -----------------------------------
Name: Xxxxxx Xxxxx Name: G. Xxxxxx Xxxxx
------------------------------ -----------------------------------
Title: President Title: President
------------------------------ -----------------------------------
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Addendum A
1. H.O. Software covenants that a Graphical User Interface (GUI) to Customer
in release 19.0 subject to design specifications to be determined by H.O.
Software. The GUI interface is a "front end" to the core HOCIMS system and
will be used to access customer data, support customer service and execute
workorders and adjustments to accounts. H.O. Software agrees to commit
necessary resources in order to complete the release of a GUI.
2. H.O. agrees to supply a Fax on demand product for reprints of customer xxxx
images.
3. H.O. agrees to interface with an AVR system that will be selected by
Customer to support automated voice response system for customer service
inquiry regarding payments, usage, due dates, etc.
4. H.O. agrees to provide an on-site representative to be trained in Savannah
for assignment in Oklahoma City for a period of one year. Expenses and
salary to be paid for by Customer. Salary to be capped at 50,000 annually.
Benefits and moving expenses are to be paid by H.O.
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