CONFIDENTIAL
AGREEMENT FOR VOICE MESSAGE SYSTEMS
This agreement is made as of September 1, 1995 between WORK/FAMILY
DIRECTIONS, INC. ("W/FD"), a corporation organized under the laws of the
Commonwealth of Massachusetts, whose address is 000 Xxxxxxxxxxxx Xxxxxx Xxxx,
Xxxxxx, XX 00000-0000, and ADVANCED VOICE TECHNOLOGIES, INC. ("AVT"), a
corporation organized under the laws of Delaware whose address is 000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
WHEREAS, AVT is in the business of providing and installing equipment
(hardware and software) to educational institutions and providing certain
services, including training, maintenance and upkeep, and written communications
materials to develop and support telephonic voice message communications systems
for school systems; and
WHEREAS, W/FD is in the business of providing services for business and
industry to assist employees with work and family issues, and, as part of such
business, manages funds for businesses wishing to develop services in
communities where their employees live and work, and disburses such funds as
agent for such businesses; and
WHEREAS, W/FD, on behalf of its business clients, wishes to engage AVT to
provide and install AVT's Homework Hotline Communications System, more fully
described in AVT's Proposal to W/FD dated March 1995 and in a facsimile
transmission dated June 15, 1995, (a revised version of such Proposal is
attached hereto and incorporated herein as Exhibit A) at certain designated
schools (as listed on Exhibit B attached hereto and made a part hereof), to
train school personnel and parents in its use, and to provide ongoing technical
assistance, maintenance and upgrades for three years after installation and
acceptance of each system on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and other good and valuable consideration, the parties agree as follows:
1. Statement of Work.
AVT shall provide all hardware, software, training programs, written
communication materials designed, respectively, for teachers, parents and
administrators, and ongoing technical assistance services to schools ("Schools")
located in each of the school systems named in Exhibit B (as such Exhibit may be
amended from time to time by agreement of the parties hereto) to this Agreement
("School Systems") as described in: (1) AVT's March 1995 "Proposal for A
Comprehensive Voice Messaging Communication System and Parental Involvement
Program"; in a brochure entitled "Homework Hotline Communications System
Features"; and in a facsimile transmission dated June 15, 1995, describing the
"WORK/FAMILY DIRECTIONS" system features as compared to other systems available
through AVT (collectively, the "Proposal"). Schools are identified by W/FD and
listed in Exhibit B to this Agreement, which may be amended from time to time by
agreement of the parties hereto. The Proposal (as revised) is attached to this
agreement and incorporated herein in all particulars not inconsistent with the
body of this Agreement as Exhibit A. (In the case of any inconsistency between
the Proposal and any provision found in the body of this Agreement, the
Agreement shall control.) AVT shall deliver all goods and perform all services
described in Exhibit A to both W/FD's and School Systems' reasonable
satisfaction. AVT shall commence working with Schools immediately and shall
complete installment and training for all School Systems by on or before
November 30, 1995.
2. Compensation.
For the equipment installed and services rendered by AVT hereunder, W/FD
will pay to AVT an aggregate of $1,212,500 (based upon the installation of 97
Systems) as follows:
a. Upon execution of this Agreement, W/FD shall pay (i) $97,000 to AVT and
(ii) $727,500 to an escrow agent pursuant to an Escrow Agreement, a form of
which is attached hereto as Exhibit xx;
b. Within ten (10) days of receipt of an invoice, together with
documentation showing:
(i) the numbers, dates and locations of Systems installed to date; and
(ii) the numbers, expected dates of installation and locations of
Systems to be installed within the three week period following the
invoice, W/FD shall pay to AVT the amount of the invoice, not to
exceed an aggregate of $97,000 (based on the installation of 97
Systems);
c. Within ten (10) days following the installation of the last System, W/FD
shall pay to AVT the sum of $48,500;
d. Within ten (10) days following the Live Date of any System, W/FD shall
pay to AVT an amount equal to $2,000 (the "Live Date Payment"); and
e. Within ten (10) days after receipt of AVT's March 1996 report W/FD shall
pay to AVT $500 per System, toward AVT's costs of developing training materials.
W/FD shall have no obligation to make any payment to AVT under this
Agreement in connection with any equipment or services other than those
specified in this Agreement and Exhibit A or unless first approved by an
authorized representative of W/FD. AVT shall have no obligations under this
Agreement other than those specified in this Agreement, including Exhibit A.
3. Definitions. For purposes of this Agreement:
a. "American Business Collaboration for Quality Dependent Care" (or "ABC")
shall mean a business collaboration, comprised of a number of W/FD's clients,
aimed at increasing the supply and enhancing the quality of a broad range of
dependent care programs.
b. "Downtime percentage" shall mean unavailable time divided by time
available (based upon a day of 12 hours). "Unavailable time" is time involved
while a hardware or software component of the System is inoperative or operates
inconsistently or erratically or is in the process of being maintained or
repaired. For purposes of this Section, no more than one consecutive weekend day
of downtime in any weekend shall be counted as Unavailable time.
c. "Live Date" with respect to a specific System shall mean the date upon
which all of the following shall have been completed:
(i) all hardware components of the System as listed in the Proposal
shall be installed and ready for use;
(ii)the software licensed hereunder is installed; and
(iii) the System shall have successfully been operated in the normal
course of the School's business for a period of 30 calendar days
during which period the Downtime Percentage shall be less than 5%.
d. "School" shall mean any school identified in Appendix B to this
Agreement to receive the System.
e. "System" shall mean any system installed at a specific location
consisting of the equipment, software, service support and maintenance described
in the Proposal, with sufficient hardware and phone lines to ensure that parents
and teachers will access the System with few busy signals in the ordinary course
of business.
4. Transfer of Title
Title to all hardware components of the System shall not pass to a
receiving School System and the System shall not be deemed accepted by such
School System
until Live Date, except that risk of loss with respect to the equipment shall
pass from AVT to School Systems upon delivery. Payment by W/FD of any fees under
this Agreement prior to Live Date shall not constitute acceptance of the System
or be evidence thereof. On and after AVT's receipt of Live Date Payment with
respect to such System, all rights, title and interest in such hardware
components shall pass to the receiving School System.
5. Equipment.
a. AVT hereby expressly warrants and represents to W/FD that:
(i) the title to be conveyed to all hardware supplied to Schools in
accordance with this Agreement shall be good and marketable and the
equipment shall be free from any security interest or other lien or
encumbrance; and
(ii) all equipment supplied to a School hereunder will be new.
b. AVT shall be responsible for unpacking, uncrating and installing the
hardware including the installation of all necessary cabling.
c. W/FD will require School Systems to use Systems supplied under this
Agreement only for the use intended and in accordance with the owner's manuals
and related documentation applicable to such Systems. If a School improperly
uses the hardware or the software supporting its System and thereby causes a
breakdown or malfunction in such System, or if a School causes damage to the
System by its negligence or intentional misconduct, AVT may charge such School
its customary hourly rate for any services it provides to repair such breakdown
notwithstanding the provisions of Section 7 of this Agreement, after which
repair AVT's obligations under such Section 7 to maintain and repair without
charge shall be reinstated.
6. Software.
a. AVT shall grant to each School System a non-transferable and
non-exclusive license or sublicense to use the software delivered and installed
under this Agreement, provided, however, that if after Live Date full payment is
not made, such license or sublicense shall be deemed revoked and of no further
effect.
b. AVT agrees that if at any time during the first three (3) years this
license is in effect hardware of the type specified in the Proposal shall be
generally unavailable for use with the software identified in such Proposal
(whether due to unavailability of spare or replacement parts, discontinuance of
manufacture or otherwise and whether or not such cause is within the reasonable
control of AVT) then AVT at its sole expense shall adapt, upgrade and modify the
software to
operate with then available hardware of comparable features and capabilities, so
that data files created for the System can be utilized without substantial
adaptation on such other hardware and software will operate without loss of
efficiency or function.
c. AVT represents and warrants with respect to the software that AVT is the
sole owner of the software and has full power and authority to grant the rights
granted to W/FD and the receiving School Systems without the consent of any
other person. Neither the software or any of its elements nor the use by Schools
thereof will, to AVT's best knowledge, violate or infringe any copyright, trade
secret or other proprietary right of any other person.
d. AVT hereby agrees to keep and maintain a current copy of the source code
for the software. Release of the source code to W/FD and the receiving School
Systems is contemplated in the event of AVT's cessation, for any reason, to do
business, its insolvency, reorganization, bankruptcy or other proceeding for
relief of debtors or for failure to provide the continuing obligation of support
required in connection with the perpetual license granted hereunder.
e. AVT agrees that all future documentation, and revisions of existing
documentation developed for the System or similar systems which may be useful to
the receiving School Systems shall be furnished to the School Systems and W/FD
without charge.
f. AVT shall repair or replace damaged or lost software in machine-readable
object code. If the damage or defect is caused by AVT, or becomes apparent prior
to Live Date, such repair or replacement shall be at AVT's production costs for
such replacement and freight costs, if any.
g. For a period of three years following installation at each School, AVT
shall provide any and all software which it may develop or acquire to upgrade
the communication system together with any remote site training and technical
assistance necessary to install and operate the upgraded system as and when
upgrades become available at no additional cost to W/FD or to the receiving
School System. AVT shall offer and, if accepted, provide any and all such
upgrades to Schools and School Systems before offering and providing the
upgrades to any other AVT customers.
7. Maintenance.
a. For a period of three years from Live Date, and at no additional charge,
AVT agrees to provide all necessary maintenance and repair services to enable
the System to operate in each School, so long as W/FD has complied with the
compensation provisions contained in Section 2 of this Agreement with respect to
any such System and subject also to the provisions of Section 5c with respect to
any
such System.
b. AVT may not assign its obligations to maintain the System without W/FD's
prior written consent, not to be unreasonably withheld or delayed. No assignment
shall relieve or discharge AVT of any liability in the event of non-performance
or breach by the assignee. Notwithstanding the foregoing, AVT may engage third
parties to assist it in its performance of such maintenance obligations.
c. AVT at its expense shall, upon request by a School, immediately replace
with new substitute components any component being maintained whose operating
characteristics exceed the following Downtime percentages: 10% in any 90 day
period.
d. AVT shall coordinate scheduling of preventative maintenance service with
Schools to coincide with periods of nonessential use.
e. AVT shall cause an adequate supply of replacement parts and an
adequately trained maintenance staff for the System to be available for each
receiving School System. AVT shall provide an off-site qualified maintenance
technician to respond to a telephone request by a School System within 6 hours
of notification in all instances; AVT shall use its best efforts to provide such
technician within 2 hours of such notice.
f. Failure by a School System to promptly notify AVT of a System failure or
inoperation shall not relieve AVT of any obligation to repair or replace the
System upon notice to AVT.
8. Communications Materials and Training.
a. AVT shall submit all written materials referring to this Agreement or
intended to publicize its activities under this Agreement to W/FD for its review
and approval, not to be unreasonably withheld or delayed, prior to AVT's use of
such materials and shall make no oral statements concerning the Agreement or any
activity under this Agreement without W/FD's specific prior review and
authorization, not to be unreasonably withheld or delayed. Without limitation
thereof, AVT may not offer or provide information to representatives of any news
media pertaining to this Agreement or to the activities contemplated under this
Agreement, or to ABC's, W/FD's or any individual company's potential or actual
involvement with AVT or with Schools or School Systems identified in this
Agreement, and AVT shall immediately notify W/FD about any inquiries by
representatives of any news media and make no response to such inquiries without
W/FD's prior approval, not to be unreasonably withheld or delayed.
Notwithstanding this provision, in response to inquiries about the Systems
installed under this Agreement, AVT may, without prior consultation with W/FD,
provide general information orally concerning the System, including describing
the numbers
of Systems installed, the locations of the Systems and the uses to which Schools
intend to put the Systems.
b. AVT shall customize the Parent Communication Materials described in the
Proposal for each School with the name of the School, the telephone number for
hotline information, and a prominent statement crediting American Business
Collaboration for Quality Dependent Care and/or individual businesses identified
by W/FD using a format and text to be provided by W/FD in each case. AVT's
trademark(s) and/or logos, including but not limited to "Homework Hotline," may
appear on communications materials so long as AVT obtains W/FD's prior written
approval of the format and configuration of the appearance in each case, which
shall not be unreasonably withheld or delayed. Such materials shall be produced
in sufficient numbers for each student to have individual copies.
c. During the first year of implementation of this Agreement, AVT shall
provide the following elements of the training and communications services
described in the Proposal on an exclusive basis to Schools and School Systems
and to no other AVT customers:
(i) Newsletter; and
(ii)Customized materials (including, for example, refrigerator
magnets, tip booklet on how to help parents help their children and
stamp and ink pads for teachers).
d. Nothing contained in this Agreement shall be construed as conferring on
either party any right or license to use in writing or for public broadcast any
name, trade name, trademark, service xxxx, logo or other designation of the
other party or, in AVT's case, that of ABC, or any company which is a member of
ABC, or any contraction, abbreviation or simulation of any of the foregoing,
without the specific prior written permission of such entity.
9. Reports.
AVT shall submit to W/FD quarterly reports from September 30, 1995 through
March 31, 1996. Such reports shall include such information as may reasonably be
requested by W/FD from time to time in writing and at least fourteen (14) days
in advance of the date upon which such report is to be submitted to W/FD. Such
reports shall describe the status of all installations and training performed by
AVT under this Agreement during the previous month and the schedule for
installations and training for the following month, including a description of
any major problems or obstacles encountered in implementation of the Agreement,
how they were resolved and with what success. In addition, AVT shall provide
information on a continuing basis in response to such reasonable inquiries as
W/FD may make from time to time by telephone.
AVT shall continue to provide information after the termination of this
Agreement in response to occasional reasonable inquiries from W/FD concerning
the work performed under this Agreement and the ongoing results of such work. In
such event, if AVT will incur material expense in formulating a response to any
such inquiries AVT and W/FD will negotiate in good faith to provide for
reimbursement to AVT for reasonable expenses.
10. Non-Disclosure of Information.
a. "Confidential Information" in the case of W/FD means all materials and
information given or disclosed to AVT by W/FD or prepared by AVT for W/FD under
this Agreement, (whether proprietary to W/FD or to others), all matters not
generally known outside W/FD and not readily ascertainable by someone outside
W/FD, such as, but not limited to, the existence and content of this Agreement,
the identities of any W/FD clients providing funds for services under this
Agreement, the identity of School Systems or Schools under this Agreement, the
schedule of any activities to be performed under this Agreement, developments
relating to existing and future materials, programs and services marketed or
used by W/FD, business methods, business plans, financial data, research
findings, identities of subcontractors, client relations, methods of operation,
formulas, design specifications, procurement specifications, procedures,
marketing plans, customer information, and other information relating to the
business of W/FD, regardless of whether in tangible form. Without limitation of
the foregoing, AVT agrees that W/FD and/or ABC and member companies of ABC shall
have the sole right to announce the installation of and/or intent to install the
System at any School or School System and AVT shall not disclose any information
whatsoever about this Agreement or any activities or intended activities
pursuant to this Agreement without W/FD's prior written permission and in no
event prior to announcement(s) by W/FD and/or ABC or its member companies. AVT
agrees to keep W/FD's Confidential Information strictly confidential and not to
disclose such information other than for the implementation of this Agreement or
in the course of privileged consultation with an attorney or accountant in a
professional relationship with AVT at any time, before or after the term of this
Agreement, without W/FD's prior written consent. AVT acknowledges that
unauthorized disclosure of such information poses a substantial risk of
irreparable harm to W/FD. In performing AVT's obligations under this Agreement,
AVT may learn information pertaining to others that has been provided to W/FD in
confidence. Any information provided to W/FD by a third party is presumed to be
proprietary and confidential to such third party and shall be treated in the
same manner as confidential information of W/FD itself.
b."Confidential Information" in the case of AVT means all matters not
generally known outside AVT and not readily ascertainable by someone outside
AVT, such as, developments relating to existing and future AVT materials,
programs and services marketed or used by AVT, business methods, business plans,
financial data, research findings, identities of subcontractors, client
relations, methods of operation, formulas, design specifications, procurement
specifications, procedures, marketing plans, customer information, and other
information relating to the business of AVT, regardless of whether in tangible
form. W/FD agrees to keep AVT's Confidential Information strictly confidential
and not to disclose such information other than for the implementation of this
Agreement or in the course of privileged consultation with an attorney or
accountant in a professional relationship with W/FD at any time, before or after
the term of this Agreement, without AVT's prior written consent. W/FD
acknowledges that unauthorized disclosure of such information poses a
substantial risk of irreparable harm to AVT. W/FD may learn information
pertaining to others that has been provided to AVT in confidence. Any
information provided to AVT by a third party is presumed to be proprietary and
confidential to such third party and shall be treated in the same manner as
confidential information of AVT itself. Notwithstanding this provision, W/FD may
disclose Confidential Information to its clients and prospective clients as
necessary to implement this Agreement.
11. Independent Contractor Status.
It is expressly agreed and understood that AVT is performing services under
this Agreement as an independent contractor and not as an employee, agent,
servant, partner, joint venturer or representative of W/FD. W/FD shall not be
responsible for AVT's acts or omissions and AVT shall not have the authority to
make any representations or incur any obligations on behalf of W/FD. AVT agrees
to pay all applicable taxes that may arise as a result of this
Agreement, including but not limited to social security, income tax
withholding, disability and other payroll tax requirements. AVT shall maintain
Worker's Compensation and/or Employer's Liability Insurance in the amount of at
least One Hundred Thousand Dollars ($100,000) covering any of AVT's employees as
required by statute in the applicable jurisdiction and shall provide to W/FD a
certificate of that insurance.
12. Conflict of Interest.
Neither AVT nor any of AVT's personnel shall engage, directly or
indirectly, in any work or undertaking that may conflict with AVT's performance
under this Agreement. AVT represents and warrants that there is no such present
conflict of interest to AVT's performance under this Agreement. So long as AVT
is not in breach of this Agreement, W/FD will do nothing to prevent AVT from
performing its obligations under this Agreement.
13. Indemnification.
AVT shall, at AVT's expense, indemnify, defend and hold harmless W/FD
from and against all losses, costs, damages and expenses, including reasonable
attorney's fees, resulting directly or indirectly from AVT's performance of or
failure to perform its obligations under this Agreement; use of hardware and
related equipment provided by AVT; use of software or enhancements developed or
provided by AVT; or claims by third parties that any work product or service
provided by AVT to any School or School System under this Agreement is
infringing. This provision shall not limit any rights, damages or other relief
based on personal injury, death or damage to property.
14. Insurance.
AVT will maintain Commercial General Liability insurance in the amount of
at least one million dollars ($1,000,000.00) per occurrence, two million dollars
($2,000,000.00) aggregate. AVT shall provide certificates of such insurance to
W/FD upon execution of this Agreement.
15. Term and Termination.
This Agreement shall be effective as of September 1, 1995 and shall
continue in effect until at least December 31, 1998 or until all services have
been completed to W/FD's reasonable satisfaction or until terminated by W/FD
upon notice, with or without cause. Upon termination of the Agreement, AVT will
turn over to W/FD all materials obtained from or prepared exclusively for W/FD
under this Agreement including but not limited to databases, software, models,
partially completed work, descriptions and all other papers. Sections 5a, 6, 10,
11 and 13 shall survive termination of this Agreement.
16. Additional Restriction on Announcement.
The parties anticipate that ABC will formally announce the installation of
the System at Schools and School Systems pursuant to this Agreement by September
22, 1995. AVT shall not issue any written or oral statements announcing the
availability of any of its "Homework Hotline" products and services prior to
ABC's announcement of the Systems to be installed under this Agreement.
Notwithstanding this provision, AVT may issue such statements as it may be
required to make by law provided that it is so advised in writing by counsel.
17. Marketing Coordination.
a. AVT shall not market to or accept as a client for the purposes of
providing education-related services including but not limited to
voice-messaging systems (the "Services") any current W/FD client ("W/FD Client")
without first providing written notice, no less than fifteen (15) business days
prior to such contact, to Xxxxx Xxxxxxxxx, W/FD's Director of Development. In
the event that a W/FD client contacts AVT without AVT first contacting such
client, AVT shall
promptly notify W/FD of such contact and offer to coordinate marketing with W/FD
as provided herein. Such notice shall fully describe the project and/or services
with respect to which AVT desires to contact a W/FD Client, the W/FD Client
contact person (including name, title, and telephone number), and the
communities to be served. Upon W/FD's request to AVT during such notice period,
AVT agrees to attempt to reasonably coordinate its marketing efforts with W/FD.
For purposes of this Paragraph 17, the term "market" shall mean any efforts by
AVT, directly or indirectly, as principal, agent, consultant or employee, to
promote, sell or obtain funding for its Services, including AVT's provision of
the System or System components to a school and/or school system. For purposes
of this Paragraph 17, "W/FD Clients" shall mean those companies listed on
Exhibit D hereto. W/FD will, from time to time, update such client list as a
revised Exhibit D. If, after W/FD receives notice from AVT under this provision
that AVT wishes to market to a W/FD Client, W/FD advises a competitor of AVT of
the content of the notification, W/FD shall so notify AVT and the obligations of
AVT under this Paragraph 17 (a) shall terminate immediately.
b. Except as to the coordinated marketing efforts described in Paragraph
17(a), above, AVT shall not describe, promote or represent W/FD or W/FD services
to any W/FD Client without prior written approval by W/FD. Further, AVT shall
develop its own business contacts at W/FD Clients, and shall not use for its own
purposes any contacts and client lists it may acquire from W/FD during the
course of its performance under this Agreement. In particular, and without
intending to limit the foregoing, with respect to any services provided
hereunder to which particular W/FD Clients provide funding, AVT shall not under
any circumstances approach such W/FD Clients for continuation funding.
c. AVT warrants that the charges to W/FD for its services under this
Agreement will not be greater than those charged by AVT to any other entity for
substantially the same rights, services or products. AVT agrees that if, while
this Agreement is in effect, AVT offers to any other entity substantially the
same rights, services or products at lesser charges, thereupon and thereafter
W/FD shall be afforded the opportunity to purchase such goods and/or services at
such lesser charges. AVT shall notify W/FD at the time it begins charging such
lesser charges to other entities. If, during the first year of this Agreement,
AVT offers the System or a comparable System to any purchaser at a price below
the System price charged to W/FD under this Agreement (including the price of
services rendered by AVT under this Agreement), then AVT will reimburse to W/FD
an amount equal to the difference between the price charged to W/FD and such
lower price.
18. Miscellaneous.
a. Except to the extent that the provisions of the Agreement are clearly
inconsistent therewith, the Agreement shall be governed by any applicable
provisions of the Uniform Commercial Code. To the extent this contract entails
delivery or performance of services, such services shall be deemed "goods"
within the meaning of the Uniform Commercial Code, except when to so deem such
services as "goods" would result in an absurdity.
b. This Agreement represents our entire understanding and may only be
amended in writing and signed by an authorized representative of each party. No
waiver shall be effective unless in writing signed by the waiving party.
c. This Agreement may be assigned by W/FD in its discretion. AVT shall not
assign this Agreement or any right or obligation hereunder without W/FD's prior
written consent which will not be unreasonably withheld, and any attempted
assignment without such written consent shall be deemed void.
d. This Agreement shall be binding upon and inure to the benefit of the
successors in business and assigns of W/FD and AVT's successors in business.
e. This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts, excluding its conflict of laws rules.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
Advanced Voice Technologies, Inc. Work/Family Directions, Inc.
By: By:
Title: Title:
