EXHIBIT 10.26
SOFTWARE LICENSE AGREEMENT
This Software License Agreement is made as of this 25th day of
September, 1999, between Preferred Voice, Inc., a Delaware corporation
("Licensor") and Rural Cellular Corporation, a Minnesota 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 telecommunications switching system is capable of performing the services
(the "Services") described in a Marketing Agreement between Licensor and
Licensee of even date (the "Marketing Agreement"). Each System consists of the
hardware, certain third party software (the "Third Party Software") and certain
proprietary application software developed by Licensor (the "Application
Software"). Licensee is a wireless carrier that is currently providing
telecommunications service in areas described in the Marketing Agreement (the
"Service Areas"). Licensee wishes to offer the Services to end users ("End
Users") under its own brand in conjunction with its telecommunications services,
and Licensor has agreed to install its System in Licensee's location for that
purpose pursuant to the Marketing Agreement.
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. Pursuant to this Agreement, Licensor hereby grants to
Licensee a nontransferable, non-exclusive license to use the Application
Software, together with all subsequent improvements thereto in the Service Area.
Licensor also grants to Licensee a non-transferable, non-exclusive sublicense to
use the Third Party Software, solely in connection with operation of the System.
1.02 Term. The initial term of this Agreement shall be co-terminus with
the Marketing Agreement.
ARTICLE 2. LIMITATIONS ON USE
2.01 General Use. Licensee agrees to use the Application Software and
Third Party 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 the hardware provided by Licensor ("Designated Hardware") at
Licensee's switch locations in the Licensed Areas.
SOFTWARE LICENSE AGREEMENT - PAGE 1
(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 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 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.
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 for a period of seven (7) years 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 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.
SOFTWARE LICENSE AGREEMENT - PAGE 2
3.04 Disclosure as Breach. Licensee agrees that any disclosure of the
Software to a third party, except as set forth above, constitutes a material
breach of this Agreement, entitling Licensor to the benefit of Section 5.01
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. WARRANTY PROVISIONS
4.01 Warranties
(a) 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) it has
the right to sublicense the Third Party Software to Licensee for its use in the
System; (iii) the Application Software will permit the System to provide
Services when properly interconnected to Licensee's functioning switches
described in the Marketing Agreement (provided, that any modification of the
Application Software by any persons other than Licensor shall, unless pursuant
to Licensor's instruction, void the Warranty in this clause (II);
(iii)commencing on installation thereof, and for a period of 90 days thereafter,
(I) the Software 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.
b. 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 herein
will be compatible and inter-operate 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 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.
4.02 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
SOFTWARE LICENSE AGREEMENT - PAGE 3
(which may include a workaround for system errors), (B) 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, remove the System and
terminate the Marketing Agreement and this License Agreement.
4.03 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 ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
4.04 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 INDIRECT 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,
EXCEPT AS SET FORTH IN SECTION 4.05.
4.05 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 Third Party
Software or Application Software (or the license or sublicense 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 Third Party Software or 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 Third Party Software and
Application Software; (ii) replace the infringing Third Party Software or
Application Software with non-infringing Third Party Software or Application
Software of equal performance and quality which are materially the functional
equivalent of the infringing Third Party Software or 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, remove the System and terminate the
Marketing Agreement and this License Agreement Licensor will then be released
from any further
SOFTWARE LICENSE AGREEMENT - PAGE 4
obligation whatsoever to Licensee with respect to the infringing part of the
Third Party Software or 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 (except
the Third Party Software) 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.
ARTICLE 5. TERMINATION
5.01 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 1.02 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 (a) Licensee discloses
the Software to a third party, whether directly or indirectly and whether
inadvertently or purposefully, or (b) Licensee 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. 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) or the Marketing
Agreement and fails to cure such breach within 30 days after receipt of written
notice, (b) the other party shall be or becomes insolvent, (c) the other party
makes an assignment for the benefit of creditors, (d) there are instituted by
the other party proceedings in bankruptcy or under any insolvency or similar law
or for reorganization, receivership or dissolution, (e) 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 (f) the other party ceases to
do business.
5.02 Effect of Termination. Licensee agrees that on termination under
Section 5.01, Licensor may recover all copies of Application Software that have
been delivered to or made by Licensee, and (on Licensor's request) Licensee
shall destroy all copies of the Application Software that are not recovered by
Licensor, certify 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.
ARTICLE 6. MISCELLANEOUS
6.01 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT THAT ANY CONFLICTS OF
LAW RULES OR PRINCIPLES OF THE STATE OF TEXAS THAT WOULD REQUIRE REFERENCE TO
THE LAWS OF ANOTHER JURISDICTION SHALL BE DISREGARDED.
SOFTWARE LICENSE AGREEMENT - PAGE 5
6.02 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.
6.03 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 or
any person acquiring all or substantially all of that party's stock or assets.
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.
6.04 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.
6.05 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.
6.06 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 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 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 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.
SOFTWARE LICENSE AGREEMENT - PAGE 6
6.07 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.
6.08 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.
6.09 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" means 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.
6.10 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
SOFTWARE LICENSE AGREEMENT - PAGE 7
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. RURAL CELLULAR
CORPORATION
on behalf of itself and its wholly owned
subsidiaries and affiliates
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
--------------------------- -----------------------------------
Name; Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Vice President Market Development
0000 Xxxxxxxxxx Xxxxxx Address: 0000 Xxxxxx Xx., X.X.
Xxxxx 000 0000 Xxxxxx Xxxxxx XX
Xxxxxx, Xxxxx 00000 Xxxxxxxxxx, XX 00000 XXX
Fax No: 000-000-0000 Fax No: (000) 000-0000
Phone: 000-000-0000 Phone: (000) 000-0000
SOFTWARE LICENSE AGREEMENT - PAGE 8
