EXHIBIT 10.48
PILOT PROGRAM AGREEMENT
This agreement is entered into between Portland General Electric
Company, an Oregon corporation with offices at One World Trade Center 1300, 000
XX Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 ("PGE") and Group Long Distance, Inc.,
a Florida corporation with offices at 0000 Xxxxxx Xxx, Xxxxxx, Xxxxxxxxxx
00000-0000 ("GLDI").
RECITALS
GLDI has developed or licensed a proprietary system, technology,
content, and services which will allow a licensee to operate a GLDI network
accessible via certain web-enabled telephone devices and other Internet
appliances such as personal computers.
PGE is a utility company that provides electricity and electricity
related products and services to homes and business in and around Portland,
Oregon. PGE desires to implement a pilot program to test the feasibility of
licensing the technology, content, and services from GLDI for purposes of
wide-spread deployment of a GLDI network in the Territory, as defined in Section
5 below. This agreement sets forth the terms and conditions for implementation
of the pilot program.
NOW, THEREFORE, the parties agree as follows:
1. TERM. This agreement will commence on the effective date as defined in
Section 19 below and will continue until the pilot program is
concluded, but in no event longer than December 31, 2001.
2. GLDI NETWORK. The package of software, technology, content, and
services owned or licensed by GLDI, which may be licensed to PGE on a
long term basis should the pilot program be successful and should PGE
elect to proceed with a long term license agreement, is described in
the attached Exhibit B.
3. PILOT PROGRAM. PGE has ordered from GLDI, pursuant to Purchase Order
No. 20000540, dated July 28, 2000, 1,500 GLDI Internet Appliances for
deployment in the pilot program. As part of the pilot program, PGE will
deploy these appliances to certain of its residential customers in the
Portland metropolitan area. Target customers will initially be renters
and the pilot program will be marketed to these customers, in part, by
agreements with landlords. The pilot program may also be marketed to
home owners. GLDI will host the network on its servers, and will
provide certain content and other services for purposes of implementing
the pilot program. The pilot program, including, levels of service,
content, vendor arrangements, and other elements of the pilot program
are described more particularly in the attached Exhibits A, B, and C.
GLDI grants PGE a license to use the GLDI software, technology and
content, as described in the attached Exhibit B, during the term of
this agreement in connection with operation of the pilot program.
4. Intentionally left blank.
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5. TERRITORY/PROTECTION OF TERRITORY. The territory to be covered by any
long term agreement between the parties will be the state of Oregon
with an option to extend the program to the states of Washington and
Nevada (the "Territory"). During the term of this agreement or any
follow-on long-term agreement, GLDI will not itself implement or
sub-license implementation of, nor will it license any third-party to
implement, any "HomeAccess" type network or similar network within the
Territory.
6. TRADEMARKS. The pilot program network will be branded with PGE
trademarks designated by it and PGE will provide GLDI with artwork or
media in appropriate form to communicate over the network. The location
and appearance of PGE marks will be specified by PGE. The network may
also include use of the GLDI trademark, in which case the form and
location of such usage will be mutually agreed to by the parties. Each
party will comply with the reasonable trademark protection practices
and policies of the other party, as may be in effect from time to time,
including without limitation use of the (R) and (TM) symbols, and each
party will comply with quality standards as may be reasonably imposed
by the respective trademark owner in order to protect the reputation
and goodwill associated with the applicable trademarks.
7. OBLIGATIONS OF PGE
7.1 PGE will deliver GLDI Internet Appliances to network consumer
subscribers participating in the pilot program and will sign
such subscribers up to a trial participation in the network.
7.2 PGE will arrange with local providers of products and services
to offer such products and services and will arrange to have
advertising or content with respect to such goods and services
provided to GLDI, in such form as may be reasonably requested
by GLDI, for inclusion in network content. PGE will determine
the number, selection, and types of local goods and services
to be offered, with the idea of having a sufficient offering
to properly test the network concept.
7.3 PGE will promote the pilot program through such advertising
and public relations campaigns as it deems appropriate.
7.4 PGE will accept and include in the pilot program such national
content as may be offered and furnished by GLDI. The parties
will consult with respect to appropriate national content to
be included and PGE will have the right to approve such
content, which approval will not unreasonably be withheld.
7.5 PGE will provide telephone customer support to subscribers to
the pilot program to the extent that subscribers have problems
with the GLDI Internet Appliance or use of the network.
7.6 PGE will make appropriate arrangements for pilot program
subscribers to be able to sign up for, check the status of,
and pay for PGE's electricity services via the network.
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7.7 PGE will make appropriate arrangements with a bank or a
financial services institution to accommodate automatic funds
transfer and credit card payment for goods and services
ordered via the network.
8. GLDI OBLIGATIONS
8.1 GLDI will host the network on its server and will provide
appropriate software, technology, know-how and services to
implement the network pilot program as described more
particularly in the attached Exhibit B.
8.2 GLDI will maintain the network in accordance with the service
level commitments set forth in the attached Exhibit C.
8.3 GLDI will be responsible for national content provided over
the network.
8.4 GLDI will confer and consult with PGE with respect to
desirable forms of promotion of the pilot program.
8.5 GLDI will promptly correct errors or defects in the GLDI
software, technology, and content without cost to PGE. Changes
or new features requested by PGE will be done at PGE's expense
on a time and materials basis, except for the development work
covered by the purchase order attached as Exhibit G.
8.6 GLDI will provide periodic reports to PGE of the pilot program
transactions over the network, and placement of advertising,
and GLDI will allow PGE to audit the proper handling of
transactions on the system. These reports will include the
minimum information categories set forth in Exhibit E.
8.7 GLDI will, without cost to PGE, assist PGE in evaluating
problems and formulating and implementing appropriate
resolutions for subscriber complaints or problems with the
GLDI Internet appliances or use of the network. GLDI will
warrant the Internet phone appliances with the same warranty
as provided by the original equipment manufacturer.
8.8 GLDI will procure and maintain in effect during the term of
this agreement comprehensive general liability insurance and
errors and omissions insurance in customary forms and amounts,
and will name PGE as an additional insured under such
insurance, and certificates evidencing such insurance will be
delivered to PGE concurrent with execution of this agreement.
9. COMPENSATION TO GLDI/DEVELOPMENT WORK/STOCK.
9.1 COMPENSATION. For the pilot program services provided to PGE
by GLDI pursuant to this agreement, PGE will pay to GLDI the
sum of $1,050,000 as follows: $300,000 already paid to GLDI;
$250,000 to be paid to GLDI upon execution of this agreement;
$250,000 to be paid to GLDI on September 15, 2001; and
$250,000 to be paid to GLDI on October 15, 2001.
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9.2 DEVELOPMENT WORK. In return for this compensation, GLDI will,
in addition to providing the services called for by this
agreement, perform the development work set forth in the
Purchase Order No. 20000801, Supplement No. 3, issued by PGE
to GLDI dated July 19, 2001, attached to this agreement as
Interim Exhibit A (but other than incorporating the
description of development work, this Purchase Order
Supplement No. 3 will not otherwise be applicable). The
results of the development work will be made available to and
licensed to PGE as part of the pilot program and as part of
any agreement that arises out of the option set forth in
Section 20 below, or any other long term agreement entered
into between the parties. Ownership of intellectual property
rights arising out of the development work will be governed by
provisions of Section 5 of the Interim Agreement referred to
in Section 20 below. Notwithstanding the payment obligations
set forth in Section 9.1 above, PGE may at any time, upon ten
days notice to GLDI, terminate further development work as
called for by Exhibit G, in which event PGE will not be
obligated to make any further payments, as called for by
Section 9.1, to GLDI; provided, however, if PGE does not pay
the full $1,050,000 called for by Section 9.1, PGE will not
have any right to the warrant to purchase stock as provided in
Section 9.3 below.
9.3 WARRANT. On payment to GLDI of the $1,050,000 referred to in
Section 9.1 above, GLDI will issue to PGE, and conditioned
upon execution and delivery to GLDI of an investment letter
and such other documents as may be reasonably necessary to
ensure compliance with applicable federal and state securities
laws, a warrant to purchase 310,000 shares of common stock of
GLDI for $1,050,000 and PGE will have a credit of $1,050,000
to apply to such purchase price. The warrant may be exercised,
by written notice by PGE to GLDI, anytime within 6 months of
the end of the pilot program.
10. EXPENSES. Except as expressly provided in Exhibits B or C, both parties
will bear all of their own expenses in connection with the pilot
program and will not charge the other party for any services rendered,
including without limitation conferring, consulting, assisting with, or
otherwise implementing any of the pilot program services. PGE will
reimburse GLDI for all third party costs directly applicable to the
operation of the network, including but not limited to, T1 line
charges, EFT banking fees and monthly charges, and ISP access charges
(but not including third party software fees such as those referred to
in Section C-2 of Exhibit C); provided, however, that such third party
costs must be preapproved in writing by PGE, which approval will not
unreasonably be withheld. If either party requests the other party to
provide services beyond those specified in this agreement, such
services will be made available on a time and materials basis or for an
agreed upon fee, and will be specified in a written addendum to this
agreement.
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11. WARRANTIES/INDEMNITY.
11.1 GLDI warrants that the software, technology, and services
provided or used by it in connection with implementing the
pilot program network do not infringe any intellectual
property rights of any third party and it will defend,
indemnify and hold PGE harmless against any such infringement
claims. If an infringement claim is made, or in GLDI' opinion
is likely to be made, PGE will permit GLDI to procure for PGE
the past and future rights granted to PGE hereunder with
respect to the allegedly infringing portion of the GLDI
intellectual property, or to replace or modify the allegedly
infringing portion to make such portion non-infringing,
provided the replacement or modified portion provides
substantially the same functionality. If neither of the
foregoing is reasonably available, GLDI will, if requested by
PGE, terminate this agreement and refund all monies paid by
PGE to GLDI hereunder.
11.2 Both parties warrant that any content contributed by or
through them for use in the pilot program does not infringe or
misappropriate the intellectual property, privacy, publicity
or other similar rights of any third party and is not
defamatory, and each party agrees to defend, indemnify and
hold the other party harmless from any such claims.
11.3 Each party warrants that it is authorized to enter into this
agreement, that entering into this agreement is not contrary
to any agreement previously entered into by it, and that its
performance under this agreement will not violate the
intellectual property or other rights of any third party.
11.4 PGE indemnifies and holds GLDI harmless from any claim,
liability, cost or expense (including attorney's fees) arising
from GLDI's operation on PGE's behalf, the EFT financial
servicing network for consumer xxxx pay and merchant
purchasing; provided, however, this obligation excludes claims
or liabilities caused by GLDI, and claims or liabilities which
are the responsibility of third parties under any agreement
entered into between GLDI or its affiliates and such third
party (including without limitation, agreements with
CyberSource and PaymenTech).
11.5 Each party will defend, indemnify and hold the other party
harmless from any claim, liability, cost or expense (including
attorney's fees) arising out of acts or omissions of its
agents or employees in connection with this agreement or
breach of any of its obligations under this agreement.
11.6 Neither party's indemnity liability will extend to any claim,
loss, liability, or expense to the extent that it results from
the negligence, gross negligence, willful misconduct, or bad
faith of the indemnitee.
11.7 Each party's indemnity obligations under this paragraph 11 are
conditioned on (i) prompt written notification from the
indemnified party to the indemnifying party of the claim for
which indemnity is sought; (ii) sole control in the
indemnifying party of the defense or settlement of the claim;
and (iii) cooperation and assistance from the party seeking
indemnification, with the expenses of such cooperation and
assistance to be paid by the indemnifying party.
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12. DISCLAIMER. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY SORT ARISING OUT OF OR
RELATING TO THIS AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES OF ANY SORT,
EXPRESS OR IMPLIED, AND EACH PARTY EXPRESSLY EXCLUDES ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE.
13. CONFIDENTIALITY. The parties acknowledge that in connection with this
agreement they will have access to certain confidential and proprietary
information of the other party ("Confidential Information").
Confidential Information includes information either marked as
confidential or information known by the receiving party as being
treated by the disclosing party as confidential. Each party agrees to
keep Confidential Information confidential and not to use such
information except as authorized by the this agreement or otherwise
authorized by the disclosing party, and to accord such information the
same standards and protections that it uses to protect its own
confidential business information. Each party will limit dissemination
of Confidential Information to its employees, contractors, or agents
who reasonably require access in order to carry out the terms of this
agreement and who have been informed of and obligated to maintain
confidentiality. Except for Confidential Information necessary to
performance of obligations or exercise of rights under this agreement,
materials or documents containing Confidential Information will be
returned to the disclosing party promptly following written request
therefor. Confidential Information will not include information: (i)
that is now or becomes generally available to the public through no
fault or breach by the receiving party; (ii) that the receiving party
can document was already known to it prior to disclosure by the
disclosing party; (iii) that was independently developed by the
receiving party without use of any of the other party's Confidential
Information; and (iv) that the receiving party rightly obtained from a
third-party who had the right to transfer or disclose it. If the
receiving party is subpoenaed or ordered by any court or governmental
agency to disclose Confidential Information, it will provide prompt
written notice to the other party so as to allow that party to seek a
protective order to protect the confidentiality of such information.
The obligations of this paragraph 13 will survive expiration or
termination of this agreement.
14. INTELLECTUAL PROPERTY OWNERSHIP. Each party retains ownership of any
intellectual property owned by it at the time they entered into this
agreement as well as any intellectual property thereafter created by it
pursuant to this agreement or otherwise and except as expressly
provided in this agreement, this agreement creates no license to use
the other party's intellectual property. PGE will retain ownership of
all information created or generated by PGE in connection with the
pilot program, including without limitation, focus group research,
survey questions and responses, customer lists, test plans and results,
user guides or other instructional materials, program implementation
processes, financial plans, program content agreements with
participants, and evaluation or analysis of the pilot program and such
information will be kept confidential. GLDI will retain ownership to
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all information supplied to PGE from prior GLDI deployments including
business and financial plans, market research, and software
architecture designs. GLDI will further retain ownership of all
information created or generated by GLDI in connection with the pilot
program, including without limitation, software source code, network
architecture diagrams, screen shots, user documentation, training
manuals, software and hardware vendor and supplier contacts, and system
operational logs. Upon expiration or termination of this agreement,
except if PGE elects to proceed to full rollout of the program, each
party will return to the originating party, or at the originating
party's election destroy, any materials containing such information,
and the non-originating party will not make any further use of such
information.
15. ACCESS TO DATA.
15.1 GLDI USE OF DATA. Upon expiration or termination of this
agreement, GLDI will destroy all customer identifiable
information including, names, street addresses, phone numbers
and all account numbers including those for billers, merchants
and financial institutions. GLDI will retain for business
model testing and system design analysis, the right to use
non-consumer-identifiable information including, gender,
date-of-birth, zip-plus-four, rent/own demographics, financial
account types (checking, savings, Visa, Mastercard, American
Express, Discover), and purchase transaction product
information, for a period of 90 days following expiration or
termination of this agreement.
15.2 PROTECTION OF CUSTOMER DATA. GLDI will protect, in accordance
with section 13, the confidentiality of personally
identifiable customer data, will not disclose such data to
third party, will not use such data except in connection with
the pilot program, and will otherwise comply with PGE's
privacy policy and commitments to the customers of the pilot
program, which may be amended from time to time. These
commitments will be posted on the GLDI Web site used for the
pilot program. GLDI will not disclose to third parties, nor
will it use for solicitation purposes, any customer specific
or aggregated data arising from the pilot program.
15.3 INSPECTIONS. All work performed by GLDI under this agreement
will be subject to inspection, examination and testing by PGE
for its authorized representatives at any reasonable time or
times during the term of this agreement. The inspection,
examination or testing by PGE shall not relieve GLDI from its
responsibility to provide services, software, or content, in
accordance with this agreement.
16. TERMINATION.
16.1 FOR CAUSE. Either party may terminate this agreement based
upon any breach by the other party which is not cured within
ten (10) days' written notice thereof.
16.2 WITHOUT CAUSE. PGE may terminate this agreement at any time,
without cause, upon thirty (30) days' written notice to GLDI.
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16.3 CONSEQUENCES OF TERMINATION. Upon expiration or termination of
this agreement: (i) GLDI will pay PGE back the cost of such
GLDI Internet appliances as may be returned by PGE to GLDI in
good working order, provided that such return must occur
within thirty (30) days of the expiration or termination of
this agreement, and provided that PGE will pay a restocking
fee as set forth in Exhibit D; (ii) GLDI will promptly return
all Confidential Information and purge all PGE pilot program
customer information and other PGE information from its
network and database and will retain no copies of such
information; and (iii) PGE will purge or return to GLDI any
GLDI software, specifications, documentation, or business
plans and will retain no copies of such information, (except
to the extent that PGE may be entitled to use the software or
documentation pursuant to section 17 of this agreement).
Nothing in this agreement will be deemed to prevent PGE,
following expiration or termination of this agreement, from
creating or operating a network similar to the GLDI network,
provided PGE does not make use of any intellectual property of
GLDI.
17. SOURCE CODE ESCROW. GLDI will, at its expense, deposit a complete set
of the source code and documentation for its software, with an escrow
agent mutually agreed to by the parties, pursuant to a customary form
of source code escrow agreement. The escrowed materials will be
released to PGE upon GLDI' insolvency, discontinuation of business
(that is not immediately continued by a successor or assign), or filing
or having filed against it a bankruptcy proceeding or in the event that
GLDI breaches support or other obligations to PGE under this agreement,
or any Long Term Agreement, and does not cure such breaches as provided
in such agreements. Upon receipt by PGE of the source materials, it
will have the perpetual right to use such materials to modify, correct,
and otherwise support the software and will have the right to use the
software in connection with operating the GLDI program, as may be
modified from time to time by PGE, in the States of Washington, Oregon,
and Nevada. PGE will in like fashion escrow a complete set of the
source code and documentation for its software used in connection with
the MyLocalAccess program, including any software and documentation
that may be licensed by PGE to GLDI pursuant to Section 7 of the
Interim Agreement, should the parties execute the Interim Agreement as
provided in Section 20, below. The escrowed materials will be released
to GLDI in the event that PGE breaches support or other obligations to
GLDI under this agreement, the Interim Agreement, or any Long Term
Agreement (or any separate license agreement as provided in Section 7
of the Interim Agreement) and does not cure such breaches as provided
in such agreements. Upon receipt by GLDI of the deposited materials, it
will have perpetual right to use such materials in connection with
operating other GLDI HomeAccess deployments.
18. MISCELLANEOUS.
18.1 ASSIGNMENT. This agreement shall not be assigned or otherwise
transferred by either party without the prior written consent
of the other, which consent shall not unreasonably be
withheld; provided, however, that either party may assign in
connection with a merger or sale of all or substantially all
of its assets or to a company controlling, controlled by, or
under common control with it.
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18.2 CONSTRUCTION. This agreement is the result of negotiation
between sophisticated parties and no provision hereof shall be
construed against a party solely because that party was
responsible for drafting the provision.
18.3 ENTIRE AGREEMENT. This agreement constitutes the entire
agreement between the parties with respect to its subject
matter. They supersede all prior or contemporaneous
agreements, understandings, or representations with respect to
the subject matter thereof. This agreement may not be modified
or amended except in writing signed by both parties
18.4 SEVERABILITY. If any term or provision of this agreement shall
to any extent be invalid or unenforceable, the remainder of
this agreement shall not be affected thereby and each term and
provision of the agreement shall be valid and enforced to the
fullest extent permitted by law.
18.5 WAIVER. No waiver of any violation or nonperformance of this
Agreement in one instance shall be deemed to be a waiver of
any subsequent violation or nonperformance. All waivers must
be in writing.
18.6 NOTICES. All notices under this agreement will be in writing
and will be deemed to have been duly given if delivered
personally or by a nationally recognized courier service,
faxed or mailed by registered or certified mail, return
receipt requested, postage prepaid, to the parties at the
addresses set forth herein. Either party may change its
address or designee for notification purposes by giving notice
to the other of the new address or designee and the date upon
which such change will become effective.
18.7 SURVIVAL. The provisions contained in this agreement that by
their sense and context are intended to survive the
cancellation or termination of this agreement shall survive
such cancellation and termination. effective.
18.8 CHOICE OF LAW. This agreement shall be governed by, and
construed, interpreted and enforced in accordance with, the
substantive law of the State of Oregon, excluding any conflict
of laws principles. Further, the parties stipulate that this
agreement is deemed to have been made and entered into by them
in the State of Oregon. With respect to any suit, action or
proceedings relating to this agreement ("Proceedings"), each
party irrevocably submits to the exclusive jurisdiction of the
courts of the State of Oregon and the United States District
Court located in Multnomah County, Oregon, and irrevocably
waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court,
waive any claim that such Proceedings have been brought in an
inconvenient forum and further waives the right to object,
with respect to such Proceedings, that such court does not
have jurisdiction over such party. Nothing in this agreement
precludes either party from enforcing in any jurisdiction any
judgment, order or award obtained in any such court.
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18.9 MEDIATION. Prior to litigation, the parties will make a good
faith attempt to negotiate a resolution of any dispute,
including meetings of appropriate executives of the two
companies. If such efforts do not resolve the dispute, the
parties agree to mediate the dispute and will jointly appoint
a mutually accepted mediator, not affiliated with either of
the parties, seeking assistance in such regard from the
American Arbitration Association if they have been unable to
agree upon such appointment within ten days from a call for
mediation. All fees in connection with the mediation will be
shared equally with the parties. Unless otherwise agreed to by
the parties, mediation will take place no more than 30 days
following selection of the mediator and will be held in
Portland, Oregon.
18.10 RELATIONSHIP OF PARTIES. The relationship of the Parties
hereto is that of independent contractor, and this agreement
shall not create a partnership, joint venture, employment, or
agency relationship between the parties. Neither party hereto
shall have any power or authority to bind or obligate the
other party in any respect whatsoever.
18.11 NO THIRD PARTY BENEFICIARIES. Nothing in this agreement shall
provide any benefit to any third party or entitle any third
party to claim, cause of action, remedy or right of any kind,
it being the intent of the parties that this agreement shall
not be construed as a third party beneficiary contract.
19. EFFECTIVE DATE. This agreement will be effective when signed by both
parties.
20. OPTION. Attached to this agreement as Exhibit H is an Interim Agreement
(the "Interim Agreement"), under discussion between the parties. It has
not been signed and it is not binding on the parties, other than to
reflect the terms of this option. GLDI grants to PGE an option,
exercisable at any time within six months following the end of the
pilot program, to enter into the Interim Agreement (with the exception
of Section 4.2 of the Interim Agreement "Development Fees," as these
amounts will already have been paid pursuant to Section 9, above; and
with the exception of Section 2 of the Interim Agreement "Stock," which
is replaced by Section 9.3 "Warrant," above). If at any time following
December 31, 2001 and during the term of the option set forth in this
Section 20, PGE desires to continue to operate the pilot program, GLDI
will continue to host the pilot program on its servers (and in
connection therewith will comply with its obligations under Section 8
of this agreement) and PGE will pay GLDI its standard hosting services
charges for such services.
21. INTELLECTUAL PROPERTY REPRESENTATION. GLDI represents that it owns or
has the right to license any intellectual property licensed by it to
PGE under this agreement, that entering into this agreement is not
inconsistent with any agreement previously entered into by it, and that
exercise by PGE of rights licensed to it under this agreement will not
otherwise violate the intellectual property rights of any third party.
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22. REVENUE SPLIT. Section 4.3 of the Interim Agreement "Revenue Split" as
well as the referenced Exhibit D from the Interim Agreement is
incorporated into this agreement; that is, during the pilot program Net
Revenues, as defined in Exhibit D to the Interim Agreement will be
split between the parties as set forth in Exhibit D.
GROUP LONG DISTANCE, INC. PORTLAND GENERAL ELECTRIC COMPANY
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxxxx
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Its: President Its: Vice President
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Date: 8/29/01 Date: 8/29/01
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