1
EXHIBIT 10.28
US/INTELICOM INC.
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT, made and entered into as of the seventh day of April,
1998, by and between US/INTELICOM, Inc. (hereinafter referred to as
"US/INTELICOM") and Xxxxxxx Cellular, LLC (hereinafter referred to as the
"Licensee").
RECITALS:
A. US/INTELICOM is engaged in developing and licensing application
software for cellular telephones to produce prepaid cellular telephones
(hereinafter referred to as the "Phone" or "Phones"), as well as the development
of programs, systems and services intended to support such prepaid cellular
telephones (hereinafter referred to as the "Business").
B. US/INTELICOM has the exclusive right, title and interest in and to
said application software for prepaid cellular telephones (hereinafter referred
to as the "Software").
C. US/INTELICOM has agreed with Licensee to provide the Software to
Licensee for installation of the Software on the Phones and to sell, lease and
distribute the Phones to Licensee's customers, subject to the terms and
conditions of this Agreement.
D. The Licensee is engaged in the marketing, sale, lease and
distribution of prepaid cellular telephones.
E. The Licensee desires to sell and market Phones installed with the
Software, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt, sufficiency
and adequacy of which the parties conclusively acknowledge, the parties agree as
follows:
1. Grant of License.
US/INTELICOM hereby grants to Licensee, a limited, worldwide,
nontransferable, nonexclusive, conditional right and license to use the Software
solely with the Phones and to reproduce the Software in connection with such
use, and Licensee hereby accepts said right, license and privilege, in
accordance with the terms of this Agreement. US/INTELICOM agrees to provide the
Software in executable form and any specifications and instructions required to
install the Software on the Phones to enable Licensee to sell, lease and
distribute prepaid cellular telephones to Licensee's customers, which customers
shall have the perpetual right to use the software in connection with their use
of their Phones.
Page 1 of 15 Confidential
2
2. Term of License.
The term of this license shall be for an initial period of
forty-eight (48) months ("initial term"), commencing on the date of execution of
this Agreement. This license shall thereafter automatically renew on the
anniversary of this execution date for additional terms of twelve (12) months
("subsequent terms"), unless Licensee sends written notification to US/INTELICOM
of Licensee's intention not to renew. Such notification must be received by
US/INTELICOM not less than ninety (90) days preceding the automatic annual
renewal.
3. Fees.
As consideration for the rights granted and services provided
hereunder, Licensee shall remit fees to US/INTELICOM according to the fee
schedule and conditions described in the attached Addendum A, which is hereby
included within and made an integral part of this agreement. All fees,
reimbursements, and other financial figures referenced in this Agreement are
expressed in United States dollars.
(a) The fee amounts described in Schedule A shall remain
constant throughout the initial term of this
Agreement.
(b) These fees shall be subject to a modification during
each subsequent term. At each subsequent renewal of
this Agreement, the fee amounts shall be modified by
the change in the Consumer Price Index (CPI) over the
preceding calendar year (the "preceding year"). This
change shall not exceed five percent (5%) for any
year. Should Licensee have sold or leased a minimum
of two hundred thousand (200,000) Phones containing
the Software during a "preceding year", the fee
modification for the ensuing subsequent term will be
permanently waived.
4. Use of License.
During the term of this Agreement, Licensee covenants and
agrees to:
(a) use the Software only for the Phones covered under
the terms of this License;
(b) adhere precisely to any instructions and policies
furnished by US/INTELICOM regarding the use of the
Software, which instructions and policies may be
updated by US/INTELICOM from time to time consistent
with the terms of this License;
(c) comply with all applicable local and federal laws and
regulations governing Licensee's use, sale or rental
of the Software with respect
Page 2 of 15 Confidential
3
to the Phones;
(d) inform US/INTELICOM immediately if any third party
claims any infringement on any of US/INTELICOM's
proprietary rights or interest by the use of the
Software; and
(e) refrain from modifying, translating, reproducing,
reverse engineering, disseminating, distributing or
determining the source code of the Software or any
enhancements or modifications thereto except as
provided in this Agreement. However, Licensee shall
be permitted to disseminate and distribute the
Software to its agents, employees and independent
contractors solely in connection with the sale and/or
lease of the Phones by Licensee.
5. Assignment.
Licensee's rights and interest under this Agreement shall not
be subject to assignment or transfer in any manner whatsoever without the prior
express written consent of US/INTELICOM, which shall not be unreasonably
withheld, and which consent shall be granted if the within license is conveyed
in connection with Licensee's sale of substantially all of its assets. If
Licensee is a corporation, partnership or limited liability company, the
transfer (in one or more transactions) of equity interests in Licensee which
possess a majority of the voting power in Licensee shall not constitute an
assignment for the purposes of this Agreement.
6. Representations and Warranties.
(a) Licensee warrants, represents and agrees that:
(i) it has the authority to enter into and to
consummate the transactions contemplated
hereby, and the Licensee is not under any
restriction or obligation which will impair
its full performance under this Agreement;
(ii) neither the execution of this Agreement nor
the performance of the obligations of the
Licensee require the consent, waiver or
approval of any party, or create a breach
of, violate or conflict with any contract,
agreement or other instrument or any
judgement or order to which the Licensee is
a party or otherwise subject; and
(iii) this Agreement, when duly executed, will
constitute the legal, valid and binding
obligation of the Licensee in accordance
with the terms of this Agreement.
Page 3 of 15 Confidential
4
(b) US/INTELICOM warrants, represents and agrees that:
(i) the Software, all upgrades and versions now
existing or hereafter developed and all
rights thereto are owned by US/INTELICOM and
are free and clear of any and all security
interests and other liens and encumbrances;
(ii) it has the authority to enter into and to
consummate the transactions contemplated
hereby, and US/INTELICOM is not under any
restriction or obligation which will impair
its full performance under this Agreement;
(iii) the Software and its use by Licensee
pursuant to this Agreement do not violate
the copyright, patent, trade secret or other
proprietary rights of any third party;
(iv) neither the execution of this Agreement nor
the performance of the obligations of
US/INTELICOM require the consent, waiver or
approval of any party, or create a breach
of, violate or conflict with any contract,
agreement or other instrument or any
judgment or order to which US/INTELICOM is a
party or otherwise subject; and
(v) this Agreement, when duly executed, will
constitute the legal, valid and binding
obligation of US/INTELICOM in accordance
with the terms of this Agreement.
(c) In addition, US/INTELICOM warrants that the Software
is free of defects in material and workmanship and
the Software will operate correctly and for the
purpose intended on the Phones for a period of twelve
(12) months of normal use from the date of delivery
to Licensee's customers of the Software on any Phone.
EXCEPT FOR THE FOREGOING, THE SOFTWARE IS PROVIDED
"AS IS" WITHOUT WARRANTY BY US/INTELICOM, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7. Termination.
(a) US/INTELICOM shall have the right to terminate this
Agreement immediately upon written notice to Licensee
in the event of any one or more of the following:
(i) Licensee does not sell or lease a minimum of
five thousand
Page 4 of 15 Confidential
5
(5,000) Phones containing the Software in
any twelve (12) month period following the
sale or lease of the 100,000 Phones
containing the Software as described in
Addendum B, Prepayment of License Fees.
(ii) the breach by Licensee of any other term,
covenant or condition of this Agreement in
the event that Licensee fails to cure such
breach within (30) days after receipt of
written notice from US/INTELICOM specifying
such breach; or
(iii) If there is a final adjudication that
Licensee has materially failed to comply
with any statute, requirement, rule,
regulation, order or decree, of any federal,
state, municipal or other governmental
authority relating to the marketing, sale or
lease of prepaid cellular telephones.
(b) Upon any termination of this Agreement or the expiry
of the term of this Agreement, Licensee shall
immediately cease to use any and all versions,
components and aspects of the Software, and shall
immediately return to US/INTELICOM all tangible and
electronic representations or reproductions in
Licensee's possession or which Licensee has received
or acquired, provided, however, that Licensee shall
be permitted to (1) sell any Phones in its possession
or on order based on Purchase Orders issued at the
time of such termination, unless such sale would
violate any applicable law, regulation or court order
and (2) provide continued support of Phones
previously sold by Licensee under this Agreement.
(c) In the event of termination hereunder, any unused
portion of the Prepayment of License Fees described
in Addendum B shall be payable to Licensee. In such
event, the parties shall retain all such rights and
remedies as provided by law.
8. Relationship of Parties and Indemnification.
(a) Licensee is not, and shall not represent or hold
itself out as, an agent, legal representative, joint
venturer, partner, employee or servant of
US/INTELICOM for any purpose whatsoever. Licensee is
an independent contractor and is not authorized to
make any contract, agreement, commitment, warranty or
representation on behalf of US/INTELICOM, or to
create any obligation, express or implied, on behalf
of US/INTELICOM. Licensee hereby agrees to indemnify
and hold harmless US/INTELICOM from and
against any loss, claims, demands, actions, causes of
action, costs and expenses, including without
limitation all reasonable attorney's fees, expenses
of
Page 5 of 1 Confidential
6
litigation, court costs and damages, arising from
or incurred in connection with either a breach by
Licensee of any term, condition, warranty, or
covenant set forth in this Agreement or the
performance, or failure to perform, services to any
customer of Licensee or US/INTELICOM, or the
collection of fees for services rendered by Licensee.
(b) US/INTELICOM hereby agrees to indemnify and hold
harmless Licensee from and against any loss, costs,
claims or judgments, including without limitation
attorney's fees and costs, incurred by Licensee as a
result of any third party claiming infringement on
the Software, or US/INTELICOM's breach of the License
or express warranty.
(c) Additional Terms and Conditions
US/INTELICOM and Licensee agree to the terms and
conditions, if any, described in the attached
Addendum B, which is hereby included within and made
an integral part of this agreement.
9. Covenants Against Disclosure of Trade Secrets and Confidential
Information.
(a) Licensee and US/INTELICOM acknowledge that in the
course of this license, they will become acquainted
with each other's proprietary and confidential
information concerning the Software and the Business,
including "Trade Secrets" and "Confidential
Information", as defined below. Both parties further
acknowledge that they each expend substantial
resources in time and money in the development of
their software, marketing, sales strategies,
programs, and in developing relationships with
customers.
(b) As used herein, the term "Trade Secrets" shall mean
any and all information of either party, including
without limitation, the Software, and other technical
and non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans,
product plans, or lists of actual or potential
customers or suppliers, which (i) derive economic
value, actual or potential, from not being generally
known to, and not being readily ascertainable by
proper means by, other persons who can obtain
economic value from their disclosure or use; and (ii)
are the subject of efforts that are reasonable under
the circumstances to maintain their secrecy. "Trade
Secrets" excludes however, information in the public
domain or readily ascertainable from third parties.
Page 6 of 15 Confidential
7
(c) As used herein, the term "Confidential Information"
shall mean proprietary and confidential information
or data, other than Trade Secrets, which is valuable
to, and related to the Software and the Business and
the details of which are generally unknown to the
competitors of either party. Confidential Information
shall include the following information, without
limitation, to the extent such information is not
already included in the definition of Trade Secrets
either at the time of the execution of this Agreement
or any time thereafter: (i) confidential financial,
business, marketing programs, strategies, and
services of either party; and (ii) such other
materials and items as the parties may designate,
xxxx or otherwise identify as confidential from time
to time. Any such information shall cease to be
Confidential Information for the purposes of this
Agreement at such time as that specific information
becomes generally known to the public unless such
disclosure is in violation of this Agreement or
another agreement of a similar purpose between
US/INTELICOM or Licensee and any third party.
(d) Licensee and US/INTELICOM hereby covenant and agree
that they shall not at any time, directly or
indirectly, misappropriate, take, use, divulge or
disclose any of the Trade Secrets of the other party
to any person, company, firm or entity for so long as
an item which is a Trade Secret remains a trade
secret under applicable law.
(e) Licensee and US/INTELICOM hereby covenant and agree
that during the tem of this Agreement and for a
period of thirty-six (36) months after the
termination of this engagement for any reason, they
shall not misappropriate, take, use, divulge or
disclose any of the Confidential Information of the
other party.
(f) Licensee and US/INTELICOM further covenant and agree
that all the Trade Secrets and Confidential
Information owned by each party shall remain the
property of that party and that, upon any termination
of this Agreement for any reason, each party shall
immediately return to the other party any tangible or
electronic representations or reproductions of any
Trade Secret or Confidential Information in their
possession or which they have received or acquired.
(g) Licensee and US/INTELICOM acknowledge the
confidential status of the Trade Secrets and the
Confidential Information.
11. Enforcement.
(a) Licensee and US/INTELICOM acknowledge and agree that
(i) the foregoing covenants set forth in Section 10
above are an essential part
Page 7 of 15 Confidential
8
of this Agreement; (ii) the terms of the covenants
are reasonable; (iii) any breach of a covenant would
result in immediate and irreparable harm to the other
party; and (iv) such damages would be difficult to
ascertain and would not be entirely measurable in
money damages. Therefore, Licensee and US/INTELICOM
agree that, in the event of a breach or threatened
breach of a covenant, either party shall be entitled
to an injunction or other equitable relief to
restrain any breach or threatened breach of a
covenant, in addition to the right of either party to
an award of damages or other relief that the parties
may have under the law, including without limitation
reasonable attorney's fees and expenses incurred by
the other party in enforcing any claim hereunder,
regardless of any claim that either party may have or
assert against the other party.
(b) Licensee and US/INTELICOM agree that the covenants
and agreements contained in this Agreement are
separate, severable and independent of each other, as
each term and condition is based on viable and
independent consideration and is of great importance
to each party and should be enforceable as if each
were made the subject of a separate agreement between
US/INTELICOM and Licensee. Therefore, should any
court of competent jurisdiction declare any covenant
or provision of this Agreement invalid or
unenforceable for any reason, the remaining covenant
and other terms this Agreement shall continue in full
force and effect as if this Agreement had been
executed initially without the covenant or provision.
12. Force Majeure.
If the performance of all or any part of this Agreement by
US/INTELICOM or the Licensee is prevented or delayed by acts of civil or
military authority, flood, fire, epidemic, war or riot, which cannot be averted
or overcome by diligence (hereinafter referred to as a "Force Majeure Event"),
the party affected shall be excused from such performance, to the extent that
party is necessarily prevented or delayed thereby, only during the continuance
of any such Force Majeure Event; provided, however, that if such delay in
performance extends for more than thirty (30) days, the other party, at its
discretion, upon giving written notice, may terminate this Agreement.
13. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties and their respective
successors and assigns.
(b) This Agreement constitutes the entire agreement and
understanding of the parties with respect to the
subject matter of this Agreement. No revision,
modification or change in this Agreement whatsoever
Page 8 of 15 Confidential
9
shall be claimed or become valid unless the same is
in writing and executed by the parties.
(c) The failure of a party to insist, in one or more
instances, on the performance by the other in strict
compliance with the terms and conditions of this
Agreement, shall not be deemed to be a waiver or
relinquishment of any right granted hereunder or of
any term or condition of this Agreement unless such
waiver is in writing and executed by the parties.
(d) Any notice or other communication required or
permitted hereunder shall be in writing and delivered
personally or by registered mail, return receipt
requested, with sufficient postage, to the best
available address of the party to be notified, and
shall be deemed to be effective on the earlier of
actual receipt of four (4) days after postmarking by
the U.S. Postal Service.
(e) The obligations of the parties created by the
provisions of this Agreement shall survive any
termination of this Agreement.
(f) The headings or captions used in this Agreement are
inserted for convenience or reference purposes only
and shall neither constitute a part hereof nor effect
the interpretation of any provision of this
Agreement.
(g) This Agreement is for the benefit of only the parties
hereto and no person, firm or entity that is not a
party to this Agreement shall have any rights or
claims under or by virtue of this Agreement.
(h) As used herein, the singular shall include the plural
and the neuter gender shall include the masculine or
the feminine as the context requires.
(i) In the event of adjudication, this Agreement shall be
governed by the laws of the State of the Plaintiff.
Page 9 of 15 Confidential
10
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, on the date first set forth above.
US/INTELICOM Licensee
by: /s/ Xxxxxxx X. Xxxxxx by:
------------------------------- ------------------------------
Xxxxxxx X. Xxxxxx
------------------------------- ------------------------------
Print Name Print Name
President
------------------------------- ------------------------------
Title Title
4-7-98
----------------------------------- ----------------------------------
Date Date
Page 10 of 15 Confidential
11
ADDENDUM A
FEES
SOFTWARE LICENSE FEE
Licensee agrees to pay to US/INTELICOM a software license fee of twelve ($12.00)
per Phone on which the Software is loaded, and sold or leased by Licensee.
PIN UPDATE FEE
The "PIN update" method of adding additional prepaid cellular airtime to a Phone
involves entering a unique 10 or 12 digit number directly into the Phone via the
keypad. Such PINs can be divided into two separate types:
a) Mass Production PINs - Licensee creates collections of PINs as
part of a mass PIN production process. As a rule, such PINs are
then packaged, distributed and sold via a variety of retail
channels.
b) On-demand PINs - Licensee creates individual PINs on an ad hoc
basis that are then supplied to the customer over the telephone.
Licensee may create and supply as many on-demand PINs as
indicated.
Licensee agrees to also pay to US/INTELICOM a fee of two dollars ($2.00) per PIN
code generated for use in adding additional units of airtime to Licensee's
Phones. Mass Production PINs are restricted to a maximum of 120 units each.
REAL TIME PREPAID FEE
The "Real Time PrePaid (RTPP)" method of adding additional prepaid cellular
airtime to a Phone does NOT require the use of a PIN code. Under this method,
the Phone will automatically place a call to Licensee's computer system and
request Licensee's permission to add a specified amount of airtime to the Phone.
Licensee's computer system will either approve or deny this request.
Licencee agrees to pay to US/INTELICOM an ongoing fee of two dollars ($2.00) per
Real Time PrePaid (RTPP) addition of units of airtime to Licensee's Phones.
PROMOTIONAL DISCOUNTS
US/INTELICOM agrees to offer a promotional discount of its fees for certain of
Licensee's Phones.
Page 11 of 15 Confidential
12
- To be eligible for this promotional discount, a Phone must "qualify" by
being sold or leased by Licensee to a customer directly acquired by
Licensee in the normal course of Licensee's telemarketing, direct
marketing and telesales business.
- Any Phone sold or leased by Licensee that uses a Mass Production PIN in
adding additional units or airtime usage will not qualify for
promotional discount.
- Promotional discounts shall be used to offset all license fees due
hereunder.
US/INTELICOM agrees to the following promotional discounts:
1. Nine dollars ($9.00) to be applied against its Software License
fee for each qualified Xxxxxx XXX0000 and each qualified Kodenshi
T-100 Phone containing the Software sold or leased by Licensee.
2. Seven dollars ($7.00) to be applied against its Software License
fee for any other qualified prepaid Phone sold or leased by
Licensee.
3. Two dollars ($2.00) to be applied against each Real Time PrePaid
(RTPP) fee incurred by Licensee in adding additional airtime to
qualified Phones of Licensee.
4. Two dollars ($2.00) to be applied against each PIN Update fee
incurred by Licensee in adding additional airtime to qualified
Phones of Licensee via On-demand PINs.
Page 12 of 15 Confidential
13
ADDENDUM B
OTHER TERMS AND CONDITIONS
CONFIDENTIALITY
Licensee understands and agrees that the unauthorized disclosure of certain
details contained within this License Agreement could cause irreparable harm to
US/INTELICOM. Licensee therefore agrees to treat this License Agreement as
confidential and will not disclose any details of this License Agreement to any
third party without the expressed written permission of US/INTELICOM, except
that Licensee shall be free to make such disclosures as is necessary to fulfill
legal obligations.
SOFTWARE SOURCE NON-DISCLOSURE
Licensee and US/INTELICOM agree to treat as confidential and not disclose the
fact that Licensee is acquiring its prepaid Software from US/INTELICOM, except
that Licensee shall be free to make such disclosures as is necessary to fulfill
legal obligations. US/INTELICOM may, however, request from Licensee a disclosure
of relevant facts and opinions to specified individuals and/or organizations in
order to assist US/INTELICOM's sales and marketing efforts. Such a request for
disclosure may be declined by Licensee if it feels there is a reasonable chance
that such disclosure would have a materially negative impact on its own sales
and marketing effort. Unless specifically authorized in writing, Licensee agrees
not to use the US/INTELICOM name, logo or other identification of US/INTELICOM
in any of its sales, marketing, promotional, product, or technical information,
whether printed, verbal, or provided via any other media.
COMPUTING FACILITIES
US/INTELICOM agrees to install certain computer programs relating to the support
of its prepaid cellular Software onto computer systems by Licensee. Licensee
acknowledges that it has requested such programs be installed on Licensee's
computer systems, and Licensee agrees to bear all costs associated with
providing and maintaining these systems subject to Licensee's prior written
approval and authorization for such systems. Licensee agrees to provide
US/INTELICOM with continuous and appropriate Internet access to such systems for
billing, monitoring, updating, and other purposes. Licensee agrees to compensate
US/INTELICOM for any out-of-pocket expenses incurred in supporting Licensee's
systems, including any related travel and accommodation expenses.
PAYMENT TERMS
Licensee agrees to remit payment to US/INTELICOM for all fees and other charges
described
Page 13 of 15 Confidential
14
herein within fifteen (15) days following initial receipt of invoices detailing
such fees and other charges, subject to offsets for promotional discounts that
Licensee is entitled to receive hereunder.
PREPAYMENT OF LICENSE FEES
Licensee agrees to remit to US/INTELICOM a nonrefundable prepayment of Software
License fees within three (3) business days following the date of execution of
this Agreement. The amount of this prepayment is agreed to be three hundred
thousand dollars ($300,000.00), which sum shall offset and be applied against
any License fees, less any applicable promotional discounts, otherwise due from
Licensee hereunder.
PURCHASE OF CELLULAR TELEPHONES
In the event that Licensee enters into a business arrangement in which it
acquires the right to purchase cellular telephones and other cellular
accessories, US/INTELICOM shall have the right to acquire such equipment, either
directly or for another business entity not engaged in direct response
marketing, under the same pricing and terms as Licensee, subject to availability
and vendor approval. It is explicitly understood and agreed that the price for
such equipment will be the lowest price available under Licensee's arrangement
and will be net of any and all discounts, rebates and other incentives.
CONVERSIONS OF PREPAID SOFTWARE
In the event that Licensee shall request that US/INTELICOM convert its prepaid
cellular software so that the application can be made available on a specified
cellular phone, US/INTELICOM agrees to use its best reasonable efforts to effect
such a conversion in a mutually acceptable timeframe. Licensee understands and
agrees that US/INTELICOM shall have the right to reject a software conversion
request from Licensee in the event that US/INTELICOM determines that the
specified cellular phone does not adequately meet the minimum technical and
operational standards determined by US/INTELICOM. Licensee agrees to reimburse
US/INTELICOM for the actual cost of any such conversion request received from
Licensee, based upon a cost schedule approved by Licensee.
RESTRICTIVE COVENANT
US/INTELICOM agrees not to compete with Licensee by engaging in the sale of
prepaid cellular phones directly to end-user customers through direct response
marketing for as long as this Agreement is active.
Page 14 of 15 Confidential
15
MAINTENANCE AND SUPPORT
Licensee acknowledges and agrees that it is both desirable and necessary for
US/INTELICOM to provide ongoing professional services to Licensee for
installation assistance, operational support and continued maintenance of
software installed and running on computer hardware and cellular telephones
controlled and/or sold by Licensee.
US/INTELICOM agrees to provide reasonable support and maintenance services to
Licensee under a Full Time Equivalent ("FTE") arrangement. US/INTELICOM agrees
to initially provide Licensee with one (1) FTE of appropriate professional
services. A Full Time Equivalent is any combination of support and maintenance
time provided by Licensee by US/INTELICOM personnel. Any FTE is limited to one
hundred and sixty-seven (167) hours of professional time per month.
Licensee agrees to pay to US/INTELICOM a monthly fee of ten thousand dollars
($10,000.00) per FTE of maintenance and support (the "FTE fee"). Licensee also
agrees to reimburse US/INTELICOM for all out-of-pocket expenses incurred in
providing support and maintenance services.
This monthly maintenance and support arrangement will have an initial term of
six (6) months. The arrangement will then automatically renew for an additional
twelve (12) months at the above rates and conditions unless written notification
to US/INTELICOM of Licensee's intent to cancel the arrangement is received no
later than September 1, 1998. Unless Licensee elects to cancel this arrangement
at the end of the first six months, the "initial term" of the arrangement will
be through September 30, 1999.
Following the initial term, this arrangement will automatically renew for an
additional twelve (12) months ("subsequent renewals") beginning each September
1st (the "renewal date") unless written notification to US/INTELICOM of
Licensee's intent to cancel the arrangement is received no later than sixty (60)
days prior to the renewal date. Each subsequent renewal will include an annual
ten percent (10%) increase in the monthly FTE fee.
Licensee may elect to increase the number of FTEs available for the support and
maintenance of Licensee's business by sending a written request to US/INTELICOM.
US/INTELICOM agrees to utilize its best reasonable efforts to provide such
additional FTEs upon such terms as the parties agree at that time.
Page 15 of 15 Confidential
