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EXHIBIT 10(vv)
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LICENSE AGREEMENT
BETWEEN
LHS COMMUNICATIONS SYSTEMS, INC
AND
POWERTEL, INC.
DATED
AUGUST 2,1996
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SOFTWARE LICENSE AGREEMENT
This Agreement (the "Agreement") is made as of this 2nd day of August,
1996, by and between LHS Communications Systems, Inc., a Delaware corporation
with its principal offices at 000 Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("LHS"), and Powertel, Inc., a Delaware
corporation with its principal offices located at 0000 X.X. Xxxxxxx Xxxxx, Xxxx
Xxxxx, Xxxxxxx 00000 ("Licensee").
1. DEFINITIONS
"Acceptance Date" has the meaning in Section 4.3(a).
"Acceptance Test" has the meaning given to it in Section 4.3(b).
"Acceptance Testing Period" has the meaning given to it in Section 4.3(b)(i).
"Affiliate" means, as to a party hereto, any corporation or other entity which
directly or indirectly through one or more intermediaries, controls (i.e., the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of an entity, whether through
ownership of voting securities, by contract or otherwise), is controlled by,
or is under common control with, such party.
"Authorized User" means any Majority-Owned Subsidiary, or any employee, agent
or consultant of Licensee or any Majority-Owned Subsidiary that needs to use the
Licensed Software in connection with the performance of his duties for Licensee
or any Majority-Owned Subsidiary.
"Bankruptcy" has the meaning given to it in Section 6.2(c).
"BSCS" means that certain business support and control software known as
"BSCS/GSM."
"BSCS Kernel" means the components of BSCS Version 4.0 set forth in Schedule 2
providing the functionality and conforming to the specifications set forth in
the Documentation applicable thereto.
"Category 1 Error" means a Software Defect that prevents or would prevent
Licensee's utilization of the Data Processing System in a commercial
production environment (e.g., the entire system is inoperative).
"Category 2 Error" means a Software Defect which renders or would render the
Data Processing System unusable in a commercial production environment because a
major subsystem/module is not functioning in accordance with the Documentation
applicable thereto (e.g., the message processing subsystem is inoperative).
"CCBS" means a customer care and billing system for the Network.
"Data Processing System" has the meaning given to it in Section 2.1(a)(i).
"Default" has the meaning given to it in Section 6.2.
"Designated Location" means the offices of Licensee set forth on Schedule 1.
"Documentation" means the manuals and related materials LHS ordinarily
distributes to its customers with the Licensed Software, including user
manuals, help files and batch operation manuals. LHS shall deliver the
Documentation on a CD-Rom or similar electronic media.
"Escrow Agreement" has the meaning given to it in Section 10.
"Finally Determined" has the meaning given to it in Section 2.1(a)(iv)(D).
"Indemnified Claim" has the meaning given to it in Section 8.3.
"Licensed Software" means the BSCS Kernel and all other LHS software delivered
to Licensee under this Agreement, under any development and services agreement
between LHS and Licensee, or under any maintenance agreement between LHS and
Licensee.
"Maintenance Agreement" has the meaning given to it in Section 7.3.
"Majority-Owned Subsidiary" means any direct or indirect subsidiary of Licensee
which owns and operates a Network and of which Licensee holds more than fifty
percent (50%) of the outstanding voting and economic interests and as to which
Licensee exercises management control over the operations of such Network.
"Network" means the network of mobile telecommunications services described on
Schedule 3.
"Nonconformance Description" has the meaning given to it in Section 5.3(b)(ii).
"Off-Line System" has the meaning given to it in Section 2.1(a)(i).
"Products" means the Licensed Software and the Documentation provided
to Licensee by LHS pursuant to this Agreement.
"Proprietary and Confidential LHS Information" means (i) the Products and any
elements thereof, (ii) all other information relating to LHS' business or
affairs, including, but not limited to, technical or nontechnical data,
formulae, patterns, plans, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, lists of actual or potential
customers or suppliers, marketing plans and business strategies, provided that,
Proprietary and Confidential LHS Information shall not include (i) information
that becomes generally available to the public other than as a result of
unauthorized disclosure by Licensee or persons to whom Licensee has made such
information available, (ii) information that was available to Licensee on a
nonconfidential basis prior to receipt from LHS or is received thereafter from
a third party lawfully entitled to such information without continuing
restrictions on use, and (iii) information that is disclosed to the public
pursuant to a requirement of a court or government agency, provided, however,
that, prior to any disclosure pursuant to this clause (iii), the disclosing
party shall have given LHS
PROPRIETARY AND CONFIDENTIAL
LHS/LICENSEE INFORMATION SOLELY FOR AUTHORIZED PERSONS
HAVING A NEED TO KNOW OR USE PURSUANT TO LHS OR LICENSEE INSTRUCTIONS
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notice of any proposed disclosure and a reasonable opportunity to interpose
an objection or obtain a protective order requiring that the Proprietary and
Confidential LHS Information to be disclosed be used only for the purposes for
which the order was issued. Subject to the foregoing sentence, the content of
this Agreement constitute Proprietary and Confidential LHS Information. LHS
shall have no obligation to identify specifically Proprietary and Confidential
LHS Information.
"Proprietary And Confidential Licensee Information" means all information
relating to Licensee's business or affairs, including, but not limited to,
technical or nontechnical data, formulae, patterns, plans, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
lists of actual or potential customers or suppliers, marketing plans and
business strategies, provided that, Proprietary and Confidential Licensee
Information shall not include (i) information that becomes generally available
to the public other than as a result of unauthorized disclosure by LHS or
persons to whom LHS has made such information available, (ii) information that
was available to LHS on a nonconfidential basis prior to receipt from Licensee
or is received thereafter from a third party lawfully entitled to such
information without continuing restrictions on use, (iii) information that is
disclosed to the public pursuant to a requirement of a court or government
agency, provided, however, that, prior to any disclosure pursuant to this
clause (iii), the disclosing party shall have given Licensee notice of any
proposed disclosure and a reasonable opportunity to interpose an objection or
obtain a protective order requiring that the Proprietary and Confidential
Licensee Information to be disclosed be used only for the purposes for which
the order was issued, (iv) information that is made available to LHS pursuant to
a confidentiality agreement with an Affiliate of Licensee, but only to the
extent such information is used and handled in compliance with such
confidentiality agreement and (v) the Products or any elements thereof.
Subject to the foregoing sentence, the content of this Agreement constitute
Proprietary and Confidential Licensee Information. Licensee shall have no
obligation to identify specifically Proprietary and Confidential Licensee
Information.
"Software Defect" has the meaning given to it in Section 7.1(a)(i).
"Subscriber" means one SIM or ESN card or similar identification device as
recorded in the database of the CCBS.
"System Environment" means the hardware, operating system software and data
base platform described on Schedule 4.
"Warranty Period" has the meaning given to it in Section 7.1(a)(i).
"Warranty Services" has the meaning given to it in Section 7.1(b).
2. GRANT OF LICENSE
2.1. Scope of License
(a) (i) LHS hereby grants Licensee, subject to the terms
and conditions of this Agreement, a non-exclusive, non-transferable perpetual
license to use, and to allow Authorized Users to use, the Products at the
Designated Location as follows: (A) one copy of the Licensed Software, in object
code form only, in connection with the data processing operations of the CCBS
performed by Licensee (the "Data Processing System"), (B) one copy of the
Licensed Software, in object code form only, for "off-line" training and
testing purposes (the "Off-Line System") and (C) the Documentation solely in
connection with the use of the Licensed Software authorized hereunder.
(ii) Prior to its use (or use by any employee, agent or
consultant employed or retained by it) of the Licensed Software, Licensee shall
cause each Majority Subsidiary to execute and deliver to LHS a written
undertaking in the form of Schedule 7, and Licensee shall provide LHS with a
copy thereof. All rights of the Authorized Users are derived from Licensee and
are not independent. Such rights shall terminate upon the termination of
Licensee's rights hereunder. At such time as any Authorized User ceases to be
an Authorized User, Licensee shall cause such person or entity to, and such
person or entity shall, (i) cease to use the Licensed Software in any manner
whatsoever, and (ii) return to Licensee all copies of the Licensed Software or
any portion thereof and all Documentation in its possession or control. Such
person or entity shall continue to be bound by all the provisions of this
Agreement which survive the termination of this Agreement, including without
limitation, the provisions of Section 2.8.
(iii) Unless and until Licensee exercises the options
provided in Section 2.2, the total number of Subscribers (as hereinafter
defined) to the Network which may be serviced by the Data Processing System
shall be limited to the number set forth in Schedule 5.
(iv) Subject to the terms and conditions set forth in
this Agreement, in the event of the occurrence of any of the following events
prior to the expiration of the Warranty Period or the termination of the
Maintenance Agreement, Licensee shall be granted a non-exclusive, perpetual
license to use, and to allow its employees (but no other persons or entities)
to use, one copy of the Source Code and Commentary (as defined in the Escrow
Agreement), including all revisions thereto delivered to the Escrow Agent (as
defined in the Escrow Agreement), solely in connection with the maintenance of
the Licensed Software in connection with the use of the Licensed Software
permitted under this Agreement:
(A) An order for relief under Chapter 7 of Title 11 of
the United States Code, or any similar or successor statute, has been entered
in a case commenced by or against LHS, and LHS (or its bankruptcy trustee) has
not: (I) assumed the License Agreement and the Maintenance Agreement as
executory contracts, or (II) assumed and assigned the License Agreement and the
Maintenance Agreement as executory contracts, or (III) undertaken to assume or
to assume and assign the License Agreement and the Maintenance Agreement as
executory contracts, within 60 days after the entry of such order for relief or
within such additional time as the bankruptcy court, for cause, within such 60
day period fixes;
(B) LHS has made a general assignment for the benefit
of its creditors; LHS has admitted in writing to Licensee the general inability
of LHS to pay its debts as
PROPRIETARY AND CONFIDENTIAL
LHS/LICENSEE INFORMATION SOLELY FOR AUTHORIZED PERSONS
HAVING A NEED TO KNOW OR USE PURSUANT TO LHS OR LICENSEE INSTRUCTIONS
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they mature; or LHS has ceased operating in the normal course of its business
without an intention to resume normal operations.
(C) A trustee or receiver in liquidation of LHS, or of
all or substantially all of LHS' assets has been appointed by a court of
competent jurisdiction, and which trustee or receiver has not been discharged
or dismissed within 60 days of such appointment, or
(D) There exists a Category 1 or Category 2 Error or
Software Defect of problem severity 1 or 2 (as defined in the Maintenance
Agreement) and it has been Finally Determined (as defined below) that LHS has
materially breached its obligations under Section 7.1 of this Agreement or
paragraph (a) or (b) of Schedule 3 of the Maintenance Agreement and such breach
was irremediable or continued unremedied for a period of at least thirty (30)
days following Licensee's notice to LHS that such breach has occurred. For
purposes of this Section 2.1(a), "Finally Determined" means that an order of an
arbitral body has been issued pursuant to Section 11.19(c) hereof or Section
7.18(c) of the Maintenance Agreement with respect to any claim of Licensee of
the type described in the foregoing sentence, the time for appealing such order
shall have expired and no party shall have appealed such order, or there shall
be no such appeal right.
(b) The computer programs licensed hereunder as part of the
Products shall be used only on a single central processing unit and peripheral
devices located at the Designated Location. Use of a program shall consist of
either copying any portion of the programs from storage units or media into a
central processing unit, or the processing of data with the programs, or both.
(c) Licensee shall not distribute, license or otherwise
transfer the Products directly or through third parties. Except as permitted by
Section 2.3, Licensee has no right to use the Licensed Software to provide data
processing services to any third party on a service bureau, time-sharing or
facilities management basis or otherwise.
2.2. Option To Increase Number of Subscribers
LHS grants Licensee the option, at any time or times during the
term of this Agreement, to increase the total number of subscribers serviced by
the Data Processing System. Licensee may exercise its option hereunder by
delivery of written notice to such effect to LHS. The rights afforded to
Licensee pursuant to such options shall be effective immediately upon payment
of the applicable fees.
2.3. Data Processing Services for Third Parties
Upon written notice to LHS and upon payment to LHS of the fees
provided in Section 4.3, Licensee shall have an option to use the Licensed
Software, subject to the terms and conditions of this Agreement, in object code
form, in connection with the Data Processing System for billing the retail
customers of any person or entity who operates a Network and to sublicense the
Licensed Software, in object code form, to such person or entity for such
purpose. Such sublicense shall be reasonably acceptable in form and substance
to LHS. Unless terminated earlier, each such sublicense shall expire upon the
termination of this Agreement for any reason.
2.4. Inspection of Designated Location
LHS shall have the right, upon three (3) days prior notice, to
inspect any of Licensee's premises, including without limitation the Designated
Location, during normal business hours, to verify that the Products are being
used and protected as specified herein.
2.5. Limited Copying Right
Licensee may make two copies of the Licensed Software solely for
backup, archival or disaster recovery purposes. Licensee may copy the
Documentation for any use authorized in Section 2.1 and for any of the purposes
described in the foregoing sentence. Any copy which Licensee makes of any
Product, in whole or in part, is the property of LHS. Licensee agrees to
reproduce and include in their entirety and without alteration LHS' copyright,
trademark and other proprietary rights notices on any copy of any Product.
2.6. Reservation of Rights
The Products are the sole and exclusive property of LHS. LHS
reserves all rights not expressly granted pursuant to this Agreement, including
without limitation, all rights to derivative works (as defined under U.S.
copyright law) of the Products. This Agreement is not a sale of the Products or
any copy or part thereof, and Licensee shall have no title to or ownership in
the Products, or any copies or part thereof, regardless of the form on which
the original and any copies may exist. Licensee acknowledges that the Products
are protected by copyright law, including international treaties, and other
laws protecting intellectual property.
2.7. Prohibited Actions by Licensee
(a) Except as permitted under Section 2.3, Licensee may not
use (or cause to be used) the Licensed Software for rental, as a part of a
commercial time-sharing or service bureau operation, or for any similar purpose
which would violate any of the provisions of this Agreement, including, without
limitation, the provisions of Section 2.1. Licensee shall not (i) decompile,
disassemble, reverse-assemble, analyze or otherwise examine the Licensed
Software for reverse engineering thereof, (ii) copy or otherwise duplicate the
Licensed Software except as permitted by Section 2.5 or (iii) modify the
Licensed Software in any manner. Except as permitted by Section 2.3, any
sublicensing of the Products, or any part thereof, is prohibited.
(b) Licensee shall not disclose to third parties the results
of any benchmark tests on the Licensed Software unless LHS consents to such
disclosure in writing.
PROPRIETARY AND CONFIDENTIAL
LHS/LICENSEE INFORMATION SOLELY FOR AUTHORIZED PERSONS
HAVING A NEED TO KNOW OR USE PURSUANT TO LHS OR LICENSEE INSTRUCTIONS
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2.8. Licensee's Confidentiality Obligations
(a) Licensee acknowledges that the Proprietary and
Confidential LHS Information constitutes valuable assets and trade secrets of
LHS and its Affiliates, has not been published and is protected by civil and
criminal law and that the use and disclosure thereof must be carefully and
continuously controlled. Accordingly, during the term of this Agreement and at
all times thereafter, Licensee agrees that:
(i) it will hold the Proprietary and Confidential LHS
Information in strict confidence and will use its commercially reasonable best
efforts to protect the Proprietary and Confidential LHS Information from any
use, reproduction, publication, disclosure, or distribution except as
specifically authorized by this Agreement;
(ii) it will not, and will cause employees, agents or
consultants of Licensee or any Majority-Owned Subsidiary which is an Authorized
User not to, sell, lease, assign, transfer, disclose or otherwise make
available any Proprietary and Confidential LHS Information, or the benefit
thereof, to others, except as authorized by the terms and conditions of this
Agreement;
(iii) it will not remove or permit to be removed from
any item embodying Proprietary and Confidential LHS Information any notice
placed thereon indicating the confidential nature and/or the proprietary right
of LHS or other parties in such items;
(iv) it will honor, reproduce and include the copyright
notice and other proprietary notices (in the form specified by LHS) on all
copies, in any form, including partial copies and excerpts, of the Proprietary
and Confidential LHS Information;
(v) it will (A) limit access to the Proprietary and
Confidential LHS Information to employees, agents or consultants of Licensee or
any Majority-Owned Subsidiary which is an Authorized User who have a need to
use the Products in connection with their employment or engagement by Licensee
or such Majority-Owner Subsidiary, (B) prohibit access to the Proprietary and
Confidential LHS Information by any other third party without the prior written
consent of LHS and (C) require the foregoing persons (other than Majority
Subsidiaries) to execute nondisclosure agreements to the same effect as this
Section 2.8 in all material respects; and
(vi) in the event Licensee becomes aware that any
person or entity (including, but not limited to, any employee, agent or
consultant of Licensee or any other Authorized User) is taking, threatens to
take or has taken any action which would violate any of the foregoing
provisions were that person or entity a party to this Agreement, Licensee shall
promptly and fully advise LHS (with written confirmation as soon as
practicable thereafter) of all facts known to Licensee concerning such action
or threatened action. Licensee shall not in any way aid, abet or encourage any
such action or threatened action. Licensee agrees to use its best efforts to
prevent such action or threatened action, including, but not limited to,
assigning any cause of action it may have related to the violation of the
foregoing provisions to LHS, and Licensee agrees to do all reasonable things
and cooperate in all reasonable ways as may be requested by LHS to protect the
trade secret and proprietary rights of LHS, its Affiliates and other parties
in the Proprietary and LHS Confidential Information.
(b) Licensee's "commercially reasonable best efforts"
obligations as provided in this Section 2.8 shall include, but not be limited
to, employing procedures with respect to the Proprietary and Confidential LHS
Information which are no less restrictive than the strictest procedures
established or employed by Licensee to protect its own confidential
information, trade secrets or know-how.
2.9. Licensee's Responsibility For Authorized Users
Licensee shall be responsible for any failure of any employee,
agent, consultant or other Authorized User in complying with the terms and
conditions of this Agreement.
3. LHS' CONFIDENTIALITY OBLIGATIONS
(a) LHS acknowledges that the Proprietary and Confidential
Licensee Information constitutes valuable assets and trade secrets of Licensee
and its Affiliates, has not been published and is protected by civil and
criminal law and that the use and disclosure thereof must be carefully and
continuously controlled. Accordingly, during the term of this Agreement and at
all times thereafter, LHS agrees that:
(i) it will hold the Proprietary and Confidential
Licensee Information in strict confidence and will use its commercially
reasonable best efforts to protect the Proprietary and Confidential Licensee
Information from any use, reproduction, publication, disclosure, or distribution
except as specifically authorized by this Agreement;
(ii) it will not, and will cause its employees, agents,
consultants and subcontractors not to, sell, lease, assign, transfer, disclose
or otherwise make available any Proprietary and Confidential Licensee
Information, or the benefit thereof, to others, except as authorized by the
terms and conditions of this Agreement;
(iii) it will not remove or permit to be removed from
any item embodying Proprietary and Confidential Licensee Information any notice
placed thereon indicating the confidential nature and/or the proprietary right
of Licensee or other parties in such items;
(iv) it will honor, reproduce and include the copyright
notice and other proprietary notices (in the form specified by Licensee) on all
copies, in any form, including partial copies and excerpts, of the Proprietary
and Confidential Licensee Information;
PROPRIETARY AND CONFIDENTIAL
LHS/LICENSEE INFORMATION SOLELY FOR AUTHORIZED PERSONS
HAVING A NEED TO KNOW OR USE PURSUANT TO LHS OR LICENSEE INSTRUCTIONS
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(v) it will (A) limit access to the Proprietary and
Confidential Licensee Information to those of its employees, agents,
consultants or subcontractors who have a need to use such information in
connection with their employment or engagement by LHS, (B) prohibit access to
the Proprietary and Confidential Licensee Information by any other third party
without the prior written consent of Licensee and (C) require the foregoing
persons to execute nondisclosure agreements to the same effect as this SECTION 3
in all material respects; and
(vi) in the event LHS becomes aware that any person
or entity (including, but not limited to, any employee, agent, consultant or
subcontractor of LHS) is taking, threatens to take or has taken any action
which would violate any of the foregoing provisions were that person or entity
a party to this Agreement, LHS shall promptly and fully advise Licensee (with
written confirmation as soon as practicable thereafter) of all facts known to
LHS concerning such action or threatened action. LHS shall not in any way aid,
abet or encourage any such efforts to prevent such action or threatened action,
including, but not limited to, assigning any cause of action it may have
related to the violation of the foregoing provisions to Licensee, and LHS
agrees to do all reasonable things and cooperate in all reasonable ways as may
be requested by Licensee to protect the trade secret and proprietary rights of
Licensee, its Affiliates and other parties in the Proprietary and Licensee
Confidential Information.
(b) LHS's "commercially reasonable best efforts"
obligations as provided in this SECTION 3 shall include, but not be limited to,
employing procedures with respect to the Proprietary and Confidential Licensee
Information which are no less restrictive than the strictest procedures
established or employed by LHS to protect its own confidential information,
trade secrets or know-how.
(c) LHS shall be responsible for any failure of any of LHS'
employees, agents, consultants or subcontractors in complying with the terms of
this SECTION 3.
4. PAYMENTS
4.1. SOFTWARE LICENSE
In consideration for the license of the Licensed Software,
Licensee shall pay LHS a license fee as set forth in item 1 on Schedule 6.
4.2. OPTION FEES
Upon exercise by Licensee of the option granted to it
under SECTION 2.2. in consideration of the rights granted to Licensee in
respect thereof, Licensee shall pay LHS the fees set forth on Schedule 6.
4.3. FEES FOR ADDITIONAL LICENSES UNDER SECTION
For each sublicense granted by Licensee under SECTION 2.3
Licensee shall pay LHS a fee equal to eighty-percent (80%) of LHS' then-current
published list price applicable to the number of Subscribers covered by the
corresponding sublicense granted by Licensee. Such fee shall be payable upon
the execution of the corresponding sublicense.
4.4. SHIPPING FEES
All shipments are FOB Atlanta and all shipping fees shall be
prepaid by LHS and billed to Licensee.
4.5. TAXES
Licensee shall be responsible for payment of all sales, use,
property, value-added, or other federal, state or local taxes based on the
license granted hereunder or otherwise related to Licensee's, any Authorized
User's or any permitted sublicensee's use of the Products, except for taxes
based solely on LHS' net income. If LHS is required to pay any such taxes
based on the license granted hereunder or on Licensee's use of the Products,
then such taxes shall be billed to and paid by Licensee. If Licensee is
required by law to withhold from and amount owed to LHS, then the amount
payable to LHS shall be increased to the extent necessary to ensure that, after
such withholding, LHS receives the net amount that it otherwise would have
received in the absence of such withholding. Licensee shall withhold any
amount required to be withheld and shall pay such amount to the applicable tax
authority when due and provide LHS with an original receipt from the such tax
authority for the amount so withheld and paid.
4.6. INTEREST CHARGE
Any payments due under this Agreement which are not made when
due will be subject to an interest charge equal to the prime rate on corporate
loans published by The Wall Street Journal in effect from time to time plus
three percent (3%), or the maximum rate allowed by applicable law, whichever is
less.
5. INSTALLATION AND DELIVERY/
ACCEPTANCE
5.1. LICENSED SOFTWARE
LHS shall deliver and install the BSCS Kernel at the Designated
Location on or prior to the date set forth in Schedule 1, subject to Licensee's
satisfaction of the conditions set forth in SECTION 5.2.
PROPRIETARY AND CONFIDENTIAL
LHS/LICENSEE INFORMATION SOLELY FOR AUTHORIZED PERSONS
HAVING A NEED TO KNOW OR USE PURSUANT TO LHS OR LICENSEE INSTRUCTIONS
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5.2. PROVISION OF SYSTEM ENVIRONMENT
Prior to the installation of the BSCS Kernel, Licensee shall
install at the Designated Location the System Environment and all other
hardware and software components necessary to run the Licensed Software. Such
installation shall be in accordance with the operational configuration and
other environmental conditions mutually agreeable to LHS and Licensee.
5.3. ACCEPTANCE OF BSCS KERNEL
(a) The BSCS Kernel shall be deemed to have been accepted
by Licensee upon the earlier of (i) any commercial use thereof, in whole or in
part, by Licensee or (ii) the completion of acceptance tests in accordance with
the provisions of SECTION 5.3(B) (the "ACCEPTANCE DATE").
(b) An acceptance test of the BSCS Kernel (the "ACCEPTANCE
TEST") shall be conducted on the following terms:
(i) During the period commencing on the date on
which the BSCS kernel is installed and ending on October 1, 1996 (the
"ACCEPTANCE TESTING PERIOD"), software contains no Category 1 or Category 2
Errors. The Acceptance Test shall be conducted in a manner which is mutually
acceptable to LHS and Licensee.
(ii) During the Acceptance Testing Period, Licensee
shall deliver to LHS a written description of any Category 1 or Category 2
Error promptly following its discovery thereof (a "NONCONFORMANCE
DESCRIPTION"). Upon receipt of a Nonconformance Description, LHS shall
determine whether any of the defects described therein are reproducible, and,
if so, shall proceed promptly to remedy the same, whereupon LHS shall notify
Licensee that it has completed its remedial work and the formal test procedure
may be run again. Licensee shall provide reasonable assistance to LHS,
including making available error reports and additional computer runs in order
to reproduce the conditions existing at the same time the defect appeared. To
enable LHS to perform its obligations hereunder, Licensee shall grant LHS
access to data files, console logs, listings and similar items, and make
competent personnel available to assist LHS.
(iii) Upon the expiration of the Acceptance Testing
Period, Licensee shall either certify to LHS that such software contains no
Category 1 or Category 2 Errors or deliver a Nonconformance Description
describing all Category 1 or Category 2 Errors previously reported to LHS which
remain unremedied and any new Category 1 or Category 2 Errors discovered by
Licensee. If Licensee delivers a Nonconformance Description, LHS shall proceed
promptly to remedy the defects described therein, and Licensee shall assist
LHS, as described in SECTION 5.3(B)(II). Certification by Licensee that such
software contains no Category 1 or Category 2 Errors or, in the absence of such
certification, the failure of Licensee to provide LHS, on or prior to the
expiration of the Acceptance Testing Period, or within two (2) weeks of the
notice by LHS of its completion of any remedial work, of a Nonconformance
Description, shall constitute completion of the Acceptance Test.
(iv) In the event that such software is deemed to be
accepted prior to the completion of the Acceptance Test as a result of use of
such software under the circumstances described in clause (i) of SECTION
5.3(A), the parties' respective rights and obligations to correct any errors in
such software shall be governed by the provisions of SECTION 7.1 and any
maintenance agreement between them.
(v) Licensee's sole remedy for failure of
Acceptance Testing to be completed shall be the repair or replacement of such
software containing Category 1 or Category 2 Errors, provided that, if such
repair or replacement cannot be completed within sixty (60) days following the
expiration of the Acceptance Testing Period, Licensee may terminate this
Agreement immediately and shall promptly return the Products to LHS, and LHS
shall refund to Licensee within thirty (30) days all monies paid to LHS under
this Agreement except for any of LHS' expenses reimbursed by Licensee
hereunder. In such event, Licensee shall have no liability to LHS for further
payments and LHS shall have no further liability under this Agreement provided
that LHS complies with any obligations which survive such termination.
6. TERM AND TERMINATION
6.1. TERM
This Agreement shall remain in effect unless terminated as
provided therein.
6.2. TERMINATION EVENTS; OTHER REMEDIES
This Agreement may be terminated at any time by mutual consent
or by either party upon written notice of termination for Default by the other
party. A party shall be deemed to be in "DEFAULT" of this Agreement if:
(a) such party has breached or otherwise failed to
observe a material obligation imposed upon such party by this Agreement, and
such breach is irremediable or has continued unremedied for a period of at
least thirty (30) days following the other party's written notice to such party
that such breach or failure occurred;
(b) if a written notice has been provided pursuant
to clause (a) above, in the event the party commits within the 12-month period
following such notice a material breach of the same term or condition for which
such notice had been given, and such breach is irremediable or has continued
unremedied for a period of at least ten (10) days following the nondefaulting
party's written notice to such party that such breach or failure has recurred;
or
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(c) such party shall commit an act of "BANKRUPTCY",
which for the purposes of this SECTION 6.2(C) shall mean, (i) the entry of a
decree or order for relief of such party by a court of competent jurisdiction
in any involuntary case involving such party under any bankruptcy, insolvency,
or other similar law now or hereafter in effect; (ii) the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, or other
similar agent for such party or for any substantial part of such party's assets
or property; (iii) the filing with respect to such party of a petition in any
such involuntary bankruptcy case, which petition remains undismissed for a
period of ninety (90) days or which is dismissed or suspended pursuant to
Section 305 of the Federal Bankruptcy Code (or any corresponding provision of
any future United States bankruptcy law or any applicable non-U.S. bankruptcy
law); (iv) the commencement by such party of a voluntary case under any
bankruptcy, insolvency, or other similar law now or hereafter in effect; (v)
the making by such party of any general assignment for the benefit of
creditors; or (vi) the failure by such party generally to pay its debts as such
debts become due.
In addition, (i) Licensee shall have the right to terminate
this Agreement as provided in SECTION 5.3(B)(V) and SECTION 8.1 and (ii) LHS
shall have the right to terminate this Agreement if Licensee shall fail to pay
when due any payment or other amount due hereunder within twenty (20) days of
the due date thereof.
(d) Except as set forth in this Agreement, each
party's right to termination shall be in addition to any and all rights and
remedies as shall be available to it at law or in equity.
6.3 OBLIGATIONS UPON TERMINATION
(a) Upon termination of this Agreement for any reason,
Licensee shall discontinue use, and shall cause each Authorized User to
discontinue use, of the Products, and any portion thereof, and return all such
Products and any and all other Proprietary and Confidential LHS Information in
its possession or the possession of any Authorized User to LHS, or, at LHS'
option, destroy all such Products and such other Proprietary and Confidential
LHS Information, including all copies or partial copies thereof. Termination
of this Agreement does not free Licensee from any of its obligations under this
Agreement that call for performance after the termination date.
(b) Upon termination of this Agreement for any reason, LHS
shall return any and all Proprietary and Confidential Licensee Information in
its possession or the possession of any agent, consultant or subcontractor to
Licensee, or, at Licensee's option, destroy all such Proprietary and
Confidential Licensee Information, including all copies or partial copies
thereof. Termination of this Agreement does not free LHS from any of its
obligations under this Agreement that call for performance after the
termination date.
7. WARRANTIES/MAINTENANCE
7.1 WARRANTY OF PERFORMANCE
(a) (i) LHS warrants that, for one hundred eighty (180)
days following the Acceptance Date (the "WARRANTY PERIOD"), the BSCS Kernel,
under normal use and service on the System Environment shall conform, as to
substantial operational features and in all other material respects, to the
Documentation, (the failure of such conformance being a "SOFTWARE DEFECT")
provided, however, that LHS will not be obligated to remedy any Software Defect
caused by Licensee's modification or misuse of the Licensed Software or any
nonreproducible reported error and provided, further, that LHS will not be
obligated to remedy any Software Defect in the Off-Line System.
(ii) LHS does not warrant that the operation of the
Products will be uninterrupted or error-free, or that all non-material
programming errors will be corrected.
(b) During the Warranty Period, LHS shall, at its sole
expense except as otherwise provided in subparagraph (ii), provide the
following services in complete satisfaction of LHS' obligations arising from
any Software Defect (the "WARRANTY SERVICES"):
(i) LHS shall use its reasonable efforts,
consistent with industry standards, as reasonably applied to the circumstances,
to respond to and investigate suspected Software Defects, provided Licensee
complies with its obligations described in subparagraphs (c)(ii) and (iii)
below and provided that LHS can successfully reproduce the suspected Software
Defect. Suspected Software Defects will be investigated and corrected by LHS'
personnel at LHS' offices. Resolution may take the form of a written response,
supplementary documentation, work-around, coding change, product patch,
postponement to the next release (in the case of a Category 1 or 2 Error, such
postponement will be permitted only if acceptable to Licensee) or other
correctional aids. LHS will use commercially reasonable best efforts to
respond to a request for assistance within a reasonable time following the
initial contact from Licensee; provided that LHS' response times shall be within
LHS' normal support hours (9 a.m. to 6 p.m. Eastern Time, Monday through
Friday). A request for assistance received overnight, on a weekend or on a
holiday during which LHS' offices are closed will be considered received at 9
a.m. on the next business day. Error reports may be submitted by telephone or
telecopy.
(ii) If LHS, in its reasonable judgment, determines
that the suspected Software Defect was attributable to a cause other than a
programming error by LHS or if LHS performs Warranty Services outside LHS'
normal business hours or outside LHS' offices at Licensee's request, then
Licensee shall pay LHS for the correction of such Software Defect, or such
Warranty Services, as the case may be, on a time and materials basis at LHS'
then prevailing rates and shall reimburse LHS for all reasonable travel, meals
and lodging expenses.
(c) LHS' obligations to provide Warranty Services is
subject to the following:
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(i) Licensee shall appoint one person to receive
telephone and E-mail assistance from LHS. Licensee may change the appointed
support contact person no more frequently than every thirty (30) days by
providing written notice to LHS of such change.
(ii) Licensee shall provide LHS at no charge with
access to and use of the Designated Location, as well as all utilities and data
communications sources, as reasonably necessary for LHS to provide the Warranty
Services. Licensee further agrees to allow LHS to use upon its request at no
charge (to the extent not prohibited by Licensee's agreements with third
parties) all required diagnostic programs and all documentation available which
pertain to the data processing systems on which the Products are installed.
(iii) When reporting an error, Licensee shall use
commercially reasonable best efforts to: (A) ensure that the use of the
Licensed Software is in accordance with its Documentation, (B) use reasonable
efforts to eliminate any hardware, operating system software and third party
application software deficiencies, (C) capture all relevant data and
documentation on all operating conditions and other operating information and
fully supply LHS' maintenance and support service representatives with
requested diagnostic information necessary to reproduce the error, and (D)
implement recommended remedial, corrective or work-around procedure(s) and
fully describe any limitations imposed by such corrections or work-arounds.
7.2 DISCLAIMERS OF WARRANTIES
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE
PRODUCTS AND THE SERVICES PROVIDED BY LHS HEREUNDER ARE LICENSED AND PROVIDED
"AS IS" WITHOUT ANY WARRANTY AS TO THEIR PERFORMANCE, ACCURACY, OR FREEDOM FROM
ERROR, OR AS TO ANY RESULTS GENERATED THROUGH THEIR USE, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
7.3 MAINTENANCE
Simultaneously herewith the parties have entered into a
maintenance agreement with respect to the Licensed Software (the "Maintenance
Agreement").
8. INDEMNIFICATION
8.1 BY LHS
LHS agrees to indemnify and hold harmless Licensee from and
against any fine, penalty, loss, liability or expense (including reasonable
attorneys' fees and court costs) incurred by Licensee as a result of any claim,
demand or action against Licensee based on, related to or arising out of any
claim that any Product infringes any patent, copyright, trade secret, or
similar proprietary right of a third party; provided, however, that LHS shall
have no liability pursuant to this SECTION 8.1 or otherwise for any claim of
infringement to the extent such a claim is proximately caused by (i) the misuse
or unapproved modification of the Licensed Software by Licensee, (ii) the
failure by Licensee to use corrections or enhancements made available to
Licensee by LHS at no cost to Licensee or pursuant to a maintenance,
development services or other agreement between LHS and Licensee or (iii) the
use of the Products in combination with programs or data not provided by LHS.
If such claim has occurred, or in LHS' judgment is likely to occur, LHS may, at
its option and expense, or if a nonappealable final judgment against Licensee
with respect to such a claim is entered or in connection with such a claim a
temporary restraining order or injunction is issued against Licensee's use of
any Product, LHS shall, at its expense (i) procure the right for Licensee to
continue copying and using such Product in accordance with this Agreement, or
(ii) replace or modify it in a functionally equivalent manner so that it
becomes non-infringing. In the event that the above remedies are not available
within ninety (90) days of the date any judgment described in the foregoing
sentence becomes final and nonappealable or of the date of the issuance of any
temporary restraining order or injunction described in the foregoing sentence,
Licensee shall have the option to terminate this Agreement upon thirty (30)
days' notice to LHS, in which event LHS shall refund to Licensee an amount
equal to the depreciated license fee paid by Licensee (calculated on a straight
line basis over a five-year life). Such refund shall be Licensee's sole remedy
in connection with such termination.
8.2 BY LICENSEE
Licensee agrees to indemnify and hold harmless LHS from and
against any fine, penalty, loss, liability and expense (including reasonable
attorneys' fees and court costs) incurred by LHS as a result of any claim,
demand or action against LHS based on, related to or arising out of (i) any
claim that any modification or development of any Product (other than a
modification or development made solely by LHS) infringes any patent,
copyright, trade secret or similar proprietary right of a third party of (ii)
any breach by Licensee of SECTION 11.10.
8.3 CONDITIONS TO INDEMNIFICATION
The foregoing indemnities shall be contingent upon (i) the
indemnified party giving prompt written notice to the other party of any
claim, demand or action for which indemnity is sought (an "INDEMNIFIED CLAIM");
and (ii) the indemnified party fully cooperating in the defense or settlement
of any Indemnified Claim at the expense of the indemnifying party. The
indemnifying party shall have sole control over the defense of any Indemnified
Claim, provided that the indemnifying party shall obtain the prior written
consent indemnified party to any settlement thereof.
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9. LIMITATIONS OF LIABILITY/LIQUIDATED DAMAGES
9.1 EXCLUDED DAMAGES
EXCEPT FOR MATTERS SUBJECT TO INDEMNIFICATION UNDER SECTION 8.
CLAIMS OF LHS OR ITS AFFILIATES ARISING UNDER SECTION 2 OR 9.2 AND CLAIMS OF
LICENSEE OR ANY OF ITS AFFILIATES ARISING UNDER SECTION 3, NEITHER PARTY SHALL
HAVE ANY LIABILITY TO THE OTHER FOR INDIRECT, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES), SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED
PROFITS, OR LOST BUSINESS. EXCEPT FOR MATTERS SUBJECT TO INDEMNIFICATION
UNDER SECTION 8, LHS' TOTAL LIABILITY TO LICENSEE AND ANY THIRD PARTIES
(INCLUDING WITHOUT LIMITATION LICENSEE'S CUSTOMERS) FOR BREACH OF CONTRACT AND
FOR ALL OTHER CLAIMS (INCLUDING TORT CLAIMS) ARISING IN CONNECTION WITH THIS
AGREEMENT, OR THE PRODUCTS, SHALL NOT EXCEED THE TOTAL AMOUNT OF ALL PAYMENTS
MADE BY LICENSEE TO LHS PLUS ANY ATTORNEYS' FEES IMPOSED UPON LHS HEREUNDER.
9.2. LIQUIDATED DAMAGES
(a) Licensee understands and acknowledges that if it
breaches its obligations under SECTION 2, LHS and its Affiliates will suffer
serious damages that are difficult to value with precision. Licensee hereby
agrees that in the event any unaffiliated third party obtains a copy of any
Product or part thereof where the copy was obtained as a result of the breach
by Licensee of its obligations under SECTION 2, Licensee shall pay LHS
immediately on demand, as liquidated damages and not as a penalty, an amount
equal to the license fee for a permanent site license for such Product
(according to LHS' then current fee schedule) multiplied by the number of sites
at which the Product or part thereof has been used or has been made available
for use, in any way, whatsoever. The above remedy shall be in addition to
LHS' other remedies at law and in equity or under this Agreement, including
those specified in SECTION 6.
(b) Licensee further agrees that if a copy of any Product
or part thereof is used or is made available for use, in any way whatsoever, by
Licensee or any of its Affiliates, at a site other than the Designated Location
without authorization from LHS, Licensee shall pay LHS immediately on demand,
as liquidated damages and not as a penalty, an amount equal to the license fee
for a permanent site license for such Product (according to LHS' fee schedule
then in effect) multiplied by the number of unauthorized sites at which the
Product or part thereof has been so used or has been so made available for use.
The above remedy is in addition to LHS' other remedies at law and equity or
under this Agreement, including those specified in SECTION 6.
9.3 LIMITATION ON ACTIONS
Notwithstanding any statute of limitations that would otherwise
be applicable, no action, regardless of form, arising out of this Agreement may
be brought by either party hereto more than the later of (i) one (1) year after
the cause of action arose or (ii) one (1) year after the cause of action could
have been discovered with the exercise of reasonable care.
10. SOURCE CODE ESCROW
Within thirty (30) days from the date hereof, LHS and Licensee
shall enter into a Source Code Escrow Agreement substantially in the form
attached as Schedule 8 (the "Escrow Agreement").
11. MISCELLANEOUS
11.1 AMENDMENT
No amendment, modification or discharge of this Agreement, and
no waiver hereunder, shall be valid or binding unless set forth in writing and
duly executed by the party against whom enforcement of the amendment,
modification, discharge or waiver is sought.
11.2 ASSIGNMENT; SUBCONTRACTING
(a) This Agreement shall not be assignable by either party
without the prior written consent of the other party hereto, except that LHS
may assign this Agreement to any Affiliate, Licensee may assign this Agreement
to any Majority-Owned Subsidiary and either party may assign this Agreement to
a successor-in-interest in the event of a change in control, a merger or
consolidation to which such party is a party or a sale of all or substantially
all of the assets of such party, provided, however, that, in the case of
Licensee, no such assignment shall be made to any person or entity, including
without limitation, a Majority-Owned Subsidiary or successor-in-interest,
without LHS' prior consent (which may be withheld in LHS' sole discretion) if
the proposed transferee (i) is a competitor of LHS, (ii) has violated any
obligations under any agreements with LHS, or, with respect to the use of any
of LHS' products, any agreements with any other party or (iii) based on the
experience of LHS or any of its customers, is not qualified to use the Licensed
Software because of technical or management deficiencies, poor credit rating or
similar deficiencies.
(b) LHS may subcontract the performance of any of its
obligations hereunder, provided that, LHS shall be responsible (i) for all of
LHS' duties and obligations hereunder performed by its subcontractors as if
such duties and obligations were performed by LHS and (ii) for any payment to
any subcontractor for the performance of services hereunder.
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11.3. ATTORNEYS' FEES
In the event any party (i) obtains from a court of competent
jurisdiction injunctive relief of any nature with respect to any matter arising
under this Agreement or (ii) seeks judicial intervention to obtain enforcement
of any arbitral award relating to any matter arising under this Agreement, such
party shall be entitled to recover from the other party its reasonable
attorneys' fees and costs (as determined by a court of competent jurisdiction).
11.4. BINDING EFFECT
Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
11.5. CONSENTS AND APPROVALS
Except as expressly provided otherwise in this Agreement, if
either party requires the consent or approval of the other party for the
taking of any action under this Agreement, such consent or approval shall not
be unreasonably withheld or delayed.
11.6. CONSTRUCTION
Each party hereto hereby acknowledges that all parties hereto
participated equally in the negotiation and drafting of this Agreement and
that, accordingly, no court construing this Agreement shall construe it more
stringently against one party than against the other.
11.7. COUNTERPARTS
For the convenience of the parties, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signature of or on behalf of each party appears on each counterpart,
but it shall be sufficient that the signature of or on behalf of each party
appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
11.8. ENTIRE AGREEMENT
This Agreement (including the Schedules hereto) constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and it supersedes all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein.
11.9. EXPENSES
Except for costs and expenses specifically assumed by a party
under this Agreement or imposed upon a party pursuant to SECTION 11.3 or
SECTION 11.19, each party hereto shall pay its own expenses incident to this
Agreement and the transactions contemplated hereunder, including all legal and
accounting fees and disbursements.
11.10. EXPORT OF PRODUCTS
Licensee agrees that it will not, directly or indirectly,
export or re-export, or knowingly permit the export or re-export of, the
Products, or any technical information about the Products, to any country for
which the United States Export Administration Act, any regulation thereunder,
or any similar United States law or regulation, requires an export license or
other United States Government approval, unless the appropriate export license
or approval has been obtained.
11.11. FORCE MAJEURE
Each party is excused from performance of this Agreement and
shall not be liable for any delay in whole or in part caused by the occurrence
of any contingency beyond the reasonable control of such party. These
contingencies include, without limitation, war, sabotage, insurrection, riot or
other act of civil disobedience, act of public enemy, failure or delay in
transportation, act of government or any agency or subdivision thereof affecting
the terms of this Agreement or otherwise, judicial action, labor dispute,
accident, fire, explosion, flood, severe weather or other act of God, shortage
of labor, or hardware failure. Notwithstanding the foregoing, Licensee shall
not be relieved of its payment obligations to LHS in the event of a force
majeure occurrence.
11.12. GOVERNING LAW AND FORUM SELECTION
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of Georgia (but not
including the choice of law rules thereof). Each party hereby consents to the
jurisdiction of any federal or state court in the State of Georgia with
respect to any action by the other party seeking injunctive relief.
11.13. HEADINGS
All headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
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11.14. INDEPENDENT CONTRACTORS
The relationship between LHS and Licensee under this Agreement
is that of independent contractors only. Nothing in this Agreement shall be
construed so as to constitute LHS and Licensee as partners or joint venturers,
or either party hereto as the employee or agent of the other party hereto, or in
any other manner other than as independent contractors. Neither party shall
have any power or authority to bind the other party in any transaction with a
third party.
11.15. NOTICES
All notices, demands, requests, or other communications which
may be or are required to be given, served, or sent by any party to any other
party pursuant to this Agreement shall be in writing and shall be mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery (including delivery by courier),
telegram or facsimile, addressed as follows:
(i) If to LHS:
LHS Communications Systems, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, XX, President
Fax: 770/000-0000
with a copy (which shall not constitute notice)
to
Xxxxx & Xxxxxxx, L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxxx Xxxxxxxxx, Esq.
Fax: 202/000-0000
(ii) If to Licensee, as set forth in
Schedule 1.
Each party may designate by notice in writing a new address to
which any notice, demand, request or communication may thereafter be so given,
served or sent. Each notice, demand, request, or communication which shall be
mailed, delivered or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time as
it is delivered to the addressee (with the return receipt, the delivery
receipt, the affidavit of messenger, or, with respect to a facsimile, the
answerback, being deemed conclusive (but not exclusive) evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
11.16. SEVERABILITY
If any part of any provision of this Agreement or any other
agreement, document or writing given pursuant to or in connection with this
Agreement shall be invalid or unenforceable under applicable law, said part
shall be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of said provision or the
remaining provisions of said agreement.
11.17. SURVIVAL
The provisions of SECTIONS 2.6, 2.7, 2.8, 2.9, 3, 6.2(d), 6.3,
8, 9, 11.3, 11.9, 11.12, 11.19 and 11.20 of this Agreement shall survive the
termination of the Agreement, regardless of the reason for termination.
11.18. WAIVER
Neither the waiver by any of the parties hereto of a breach of
or a default under any of the provisions of this Agreement, nor the failure of
any of the parties, on one or more occasions, to enforce any of the provisions
of the Agreement or to exercise any right or privilege hereunder shall
thereafter be construed as a waiver of any subsequent breach or default of a
similar nature, or as a waiver of any of such provisions, rights or privileges
hereunder.
11.19. ARBITRATION
(a) Other than with respect to any party's rights to seek
injunctive relief and subject to the provisions of SECTIONS 11.19(b) and (c)
and with respect to the type of dispute described in SECTION 11.19(c), disputes
under this Agreement that cannot be mutually settled shall be submitted, upon
notices by any party to the other party, to binding arbitration to be held in
Atlanta, Georgia pursuant to the Commercial Arbitration Rules of the American
Arbitration Association by three arbitrators appointed in accordance with such
rules, at least one of whom shall have experience with software license and
development matters. English shall be the language of the arbitration. Costs
of the arbitration shall be shared equally by the parties and each party shall
pay its own attorneys' fees and other expenses, except that the arbitrators
may impose all or part of the defending party's costs, fees and expenses
against the party bringing a claim if the arbitrators determine that there was
no reasonable basis for pursuing such a claim. All testimony shall be
transcribed, any award shall be accompanied by written findings of fact and a
written statement of reasons for the decision and such findings and a written
materials shall be deemed to be Proprietary and Confidential LHS and Licensee
Information, except as otherwise may be necessary for a party to enforce its
rights under the following sentence. Judgment upon any award made in such
arbitration may be entered and enforced in and by any court of competent
jurisdiction.
(b) Within thirty (30) days after the commencement of the
Acceptance Testing Period or thirty (30) days after any arbitrator appointed
pursuant to this SECTION 11.19(b) notifies the parties that he is no longer
willing or able to serve herunder, the parties shall by agreement appoint an
arbitrator to
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resolve any disagreements with respect to any dispute described in SECTION
11.19(C). If the parties fail to agree upon the appointment of an arbitrator
within thirty (30) days after execution of this Agreement of thirty (30) days
after any arbitrator appointed pursuant to this SECTION 11.19(b) notifies the
parties that he is no longer willing or able to serve hereunder, then the
parties shall promptly request that the American Arbitration Association
immediately appoint an arbitrator pursuant to its Commercial Arbitration
Rules, except for any rule regarding the time allowed for appointing same and
any requirement of an existing dispute. Any arbitrator appointed by the
American Arbitration Association shall be an independent third-party technical
expert with at least three years' experience with customer care and billing
software.
(c) If Licensee has given LHS notice of a breach of this
Agreement of the type described in SECTION 2.1(a)(iv)(D) and the parties cannot
agree upon a resolution of the alleged breach within three (3) business days
following the expiration of thirty (30) days from the date of such notice, the
parties shall immediately submit their dispute to arbitration. Such submission
shall be limited to a written explanation (not to exceed three (3) pages) by
each party of such party's position. The parties shall require the arbitrator
to render his decision, in form which complies with SECTION 11.19(a), within
five (5) business days thereafter.
11.20. BENEFIT OF THIS AGREEMENT
It is the explicit intention of the parties hereto that no
person or entity other than the parties hereto is or shall be entitled to
bring any action to enforce any provision of this Agreement against either of
the parties hereto, and that the covenants, undertakings, and agreements set
forth in this Agreement shall be solely for the benefit of, and shall be
enforceable only by, the parties hereto or their respective successors and
assigns as permitted hereunder, except that it is the intent of the parties
that (i) the provisions set forth in SECTION 2 shall be for the benefit of, and
shall be enforceable by, LHS' Affiliates and (ii) the provisions set forth in
SECTION 3 shall be for the benefit of, and shall be enforceable by, Licensee's
Affiliates.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement, or have duly caused this Agreement to be duly executed on their
behalf, as of the date first written above.
LHS COMMUNICATIONS SYSTEMS, INC.
By: /s/ XXXXXXX X. XXXX, XX
------------------------------------
Name: XXXXXXX X.XXXX, XX
----------------------------------
Title: PRESIDENT
---------------------------------
POWERTEL, INC.
By: /S/ XXXXXXX X. XXXX
-----------------------------------
Name: XXXXXXX X. XXXX
----------------------------------
Title: VICE PRESIDENT OF
--------------------------------
INFORMATION TECHNOLOGY
--------------------------------
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Schedule 1
______________
Designated Location/Licensee Address for Notice/Delivery and
Installation Date for BSCS Kernel
1. Designated Location
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
2. Licensee Address for Notice:
Powertel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Powertel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
3. Delivery and Installation Date for BSCS Kernel - July 1, 1996
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SCHEDULE 2
____________
COMPONENTS OF BSCS VERSION 4.0 COMPRISING THE BSCS KERNEL
_________________________________________________________
The following is a list of server processes:
ABBREVIATION DESCRIPTION
ACM ACM Handler
AIH Assemble Input Handler
BCH Xxxx Cycle Handler
CAS Customer Administration Service
CIH Card Input Handler
DEH Data Exchange Handler
DUH Debit Card Unit Handler
DIH Device Input Handler
DOH Device Output Handler
DWH Xxxxxxx and Welcome Handler
ERH Error Report Handler
FDH Fraud Detection Handler
GMD Generic Mediation Device
HCH HLR Conversion Handler
IDH Interest Deposit Handler
MLD Message Logger & Dispatcher
PBCH Pre Xxxx Cycle Handler
PCS PC Server
PPH Prepaid Card Payment Input Handler
PMH Profile Maintenance Handler
RIH Rate Input Handler
RLH Rate Load Handler
SPR Supervisory Process
SAH Switch Audit Handler
TEH Table Extraction Handler
CSH Credit Scoring Handler
BMH Batch Mode Handling
AVH Address Validation Handler
CCH Credit Card Authorization Handler
The following is a list of client processes:
ABBREVIATION DESCRIPTION
MP Services and Tariffs
RA Resource Administration
SY System Administration
ES External Interfaces
TP Tariff Planer
VV Sales Administration
DB Accounts Receivable
HB General Ledger
IR International Roaming
SP Reference Data
KV Customer Administration
EC External Carrier
TR Translation Administration
RM Report Manager
ER Local EIR Administration
REQMON Request Monitor
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Schedule 3
__________
Description of Network
A network of wireless telephone services based on PCS 1900 standards.
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Schedule 4
__________
System Environment
Hardware: HPT T500
Operating System Software: HP UX 10.1.0
Data Base Software: Oracle Database Server Software Version 7.3.2.
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Schedule 5
__________
Number of Subscribers
The total numbers of Subscribers to be serviced by the Data Processing System
shall not exceed 100,000.
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Schedule 6
__________
License Fee
1. Licensee shall pay LHS the sum of $1,050,000 as follows: (i) $525,000 upon
execution of this Agreement; (ii) $262,500 upon delivery and installation of
the BSCS Kernel and (iii) $265,500 on the Acceptance Date.
2. Upon notice to LHS of the exercise of its option under Section 2.2 at any
time during the thirty-six (36) month period commencing on the date hereof,
Licensee shall pay LHS an amount equal to the difference between (i) the
license fee set forth below applicable to the number Subscribers for which
Licensee has exercised its option and (ii) the total of all Licensee fees paid
by licensee to LHS pursuant to Sections 4.1 and 4.2 prior to the exercise of
such option.
Number of Subscribers License Fee
--------------------- -----------
100,001 - 300,000 $1,650,000
300,001 - 500,000 $2,250,000
500,001 - 800,000 $3,000,000
800,001 - 1,200,000 $3,900,000
1,200,001 - 2,000,000 $5,500,000
2,000,001 and over $5,500,000 plus $2 per each Subscriber
over 2,000,000
Following the expiration of the thirty-six (36) month period commencing on the
date hereof, upon exercise of the option granted to it under Section 2.2,
Licensee shall pay LHS fees in accordance with LHS' standard fees for runtime
licenses then in effect.
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Schedule 7
__________
Form of Undertaking Pursuant to Section 2.1
LHS Communications Systems, Inc.
000 X. Xxxxxxxxx Xxxxxx Xxxxxxx
Xxxxx Terraces, Suite 575
Atlanta, Georgia 30304
Attention: Xxxxxxx X. Xxxx, XX, President
Software License and Services Agreement
dated as of August 2, 1996
between Powertel, Inc. ("Licensee") and
LHS Communications Systems, Inc. ("LHS")
(the "License Agreement")
Dear Sir:
In consideration of the undersigned's rights as an Authorized User to
use the Licensed Software as set forth in the License Agreement, the
undersigned hereby acknowledges the terms of the License Agreement and agrees
that (i) for as long as it is an Authorized User, it shall be bound by the
restrictions and obligations upon Licensee or any Authorized User set forth
therein, including without limitation, the provisions of Section 2 thereof, and
shall be liable to LHS for any breach thereof and (ii) after it is no longer an
Authorized User, it shall be bound by the provisions of Section 2.1(a)(ii) of
the License Agreement and of all other provisions of the License Agreement
which survive the termination of the License Agreement and shall be liable to
LHS for any breach thereof. The undersigned further agrees that the
undersigned shall indemnify, protect and defend and hold harmless LHS, its
Affiliates and their respective directors, shareholders, agents and employees
from and against any fine, penalty, loss, cost, damage, injury, claim, expense,
including without limitation, court costs and reasonable attorney fees, or
liability incurred by any of the foregoing as a result of any claim for which
Licensee is obligated to indemnify LHS under the License Agreement.
The undersigned acknowledges that any and all rights it has under the
License Agreement are derived from Licensee and that such rights shall
terminate upon the termination of Licensee's rights thereunder.
Capitalized terms not defined herein have the meaning given to them in
the License Agreement.
Executed this ________ day of ____________, 199_.
[NAME OF COMPANY]
By:___________________________
Accepted:
LHS COMMUNICATIONS SYSTEMS, INC.
By:_____________________________
Date:___________________________
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Schedule 8
__________
SOURCE CODE ESCROW AGREEMENT
This Escrow Agreement is entered into and effective as of the ____ day
of _______________, 1996 by and among LHS Communications Systems, Inc., a
Delaware corporation with its principal offices at 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("LHS") and
Powertel, Inc., a Delaware corporation with its principal offices located at
0000 X.X. Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000 ("Licensee") and
____________________, a ________________________ with its principal offices at
_________________________________ ("Escrow Agent").
WHEREAS, LHS has granted a license to Licensee to use certain computer
software pursuant to the terms and conditions of a Software License Agreement
(the "License Agreement"), annexed hereto as Exhibit A; and
WHEREAS, LHS and Licensee have entered into a maintenance agreement
(the "Maintenance Agreement"); and
WHEREAS, the uninterrupted availability of all forms of the Licensed
Software (as defined in the License Agreement) is critical to Licensee in the
conduct of its business; and
WHEREAS, LHS has agreed to deposit in escrow a copy of the source code
form of the Licensed Software, including without limitation for all
corrections, new releases and versions obtained pursuant to the Maintenance
Agreement, to be held by the Escrow Agent in accordance with the terms and
conditions of this Escrow Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1. CERTAIN DEFINED TERMS
Capitalized terms not otherwise defined herein shall have the meaning
given to them in the License Agreement.
2. DEPOSIT
LHS has concurrently herewith deposited with the Escrow Agent a copy of
the source code form of the BSCS Kernel (the "Source Code"), including all
relevant commentary, explanations, and other documentation relating to the
Source Code (collectively, "Commentary"). LHS shall also deposit with the
Escrow Agent, on December 31st and June 30th of each year, commencing on
December 31, 1996, a copy of all revisions to the Source Code or Commentary
encompassing all corrections, new releases and versions to the object code form
of all software delivered by LHS to Licensee pursuant to the Maintenance
Agreement. Promptly after any such corrections, new releases and versions are
deposited with the Escrow Agent, both LHS and the Escrow Agent shall give
written notice thereof to Licensee.
3. TERM
This Agreement shall remain in effect during the pendency of the
Warranty Period and for so long as the Maintenance Agreement shall remain in
effect, unless terminated in accordance with the terms hereof. Termination is
automatic upon (i) delivery of the deposited Source Code and Commentary to
Licensee in accordance with the provisions hereof; (ii) the failure of Licensee
to pay the fees of the Escrow Agent pursuant to Section 8 hereof, in which case
the Escrow Agent shall give notice of such failure to LHS and Licensee and
shall return all deposited Source Code and Commentary to LHS; or (iii) joint
notification by LHS and Licensee to the Escrow Agent stating that both the
Warranty Period has expired and the Maintenance Agreement has been terminated,
whereupon the Escrow Agent shall return all deposited Source Code and
Commentary to LHS.
4. DEFAULT
A default by LHS shall be deemed to have occurred under this Escrow
Agreement if prior to the expiration of the Warranty Period or the termination
of the Maintenance Agreement:
(i) An order for relief under Chapter 7 of Title 11 of the United
States Code, or any similar or successor statute, has been entered in a case
commenced by or against LHS, and LHS (or its bankruptcy trustee) has not: (a)
assumed the License Agreement and the Maintenance Agreement as executory
contracts, or (b) assumed and assigned the License Agreement and the
Maintenance Agreement as executory
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contracts, or (c) undertaken to assume or to assume and assign the License
Agreement and the Maintenance Agreement as executory contracts, within 60 days
after the entry of such order for relief or within such additional time as the
bankruptcy court, for cause, within such 60 day period fixes;
(ii) LHS has made a general assignment for the benefit of its
creditors; LHS has admitted in writing to Licensee the general inability of LHS
to pay its debts as they mature; or LHS has ceased operating in the normal
course of its business without an intention to resume normal operations;
(iii) A trustee or receiver in liquidation of LHS, or of all or
substantially all of LHS' assets has been appointed by a court of competent
jurisdiction, and which trustee or receiver has not been discharged or dismissed
within 60 days of such appointment; or
(iv) There exists a Category 1 or Category 2 Error or Software Defect
of problem severity 1 or 2 (as defined in the Maintenance Agreement) and it has
been Finally Determined that LHS has materially breached its obligations under
Section 7.1 of the License Agreement or paragraph (a) or (b) of Schedule 3 of
the Maintenance Agreement and such breach was irremediable or continued
unremedied for a period of at least thirty (30) days following Licensee's notice
to LHS that such breach has occurred.
5. NOTICE OF DEFAULT AND RELEASE OF
SOURCE CODE AND COMMENTARY
Licensee shall give written notice (the "Default Notice") to the Escrow
Agent and LHS of the occurrence of a default hereunder. The Default Notice
shall be in the form of Exhibit C hereto. The Escrow Agent shall thereupon
deliver to Licensee in accordance with Licensee's instructions the Source Code
and Commentary then being held by the Escrow Agent.
6. ARBITRATION
Other than with respect to any party's rights to seek injunctive
relief, disputes under this Agreement that cannot be mutually settled shall be
submitted, upon notice by any party to the other parties, to binding
arbitration to be held in Atlanta, Georgia pursuant to the Commercial
Arbitration Rules of the American Arbitration Association by three arbitrators
appointed in accordance with such rules, at least one of whom shall have
experience with software license and development matters. English shall be the
language of the arbitration. Costs of the arbitration shall be shared equally
by the parties and each party shall pay its own attorneys' fees and other
expenses, except that the arbitrators may impose all or part of the defending
party's costs, fees and expenses against the party bringing a claim if the
arbitrators determine that there was no reasonable basis for pursuing such a
claim. All testimony shall be transcribed, any award shall be accompanied by
written findings of fact and a written statement of reasons for the decision
and such findings and written materials shall be deemed to be Proprietary and
Confidential LHS and Licensee Information, except as otherwise may be necessary
for a party to enforce its rights under the following sentence. Judgment upon
any award made in such arbitration may be entered and enforced in and by any
court of competent jurisdiction.
7. CONFIDENTIALITY AND USE LIMITATIONS
RELATING TO RELEASED INFORMATION
In the event the Source Code and Commentary are released to Licensee
pursuant to this Agreement, the Source Code and Commentary shall remain the
sole and exclusive property of LHS and any such release shall not be deemed to
be a grant or transfer of any proprietary interests relating thereto to
Licensee.
Licensee agrees to use any Source Code and Commentary released pursuant
to this Agreement solely for the purposes of the maintenance of the Licensed
Software and subject to all the limitations on the use thereof set forth in the
License Agreement. Licensee agrees to use the object codes translated from the
Source Code only as authorized pursuant to the License Agreement.
Licensee acknowledges and agrees that the Source Code and Commentary
constitute Proprietary and Confidential LHS Information and shall be afforded
all protection relating thereto set forth in the License Agreement.
8. COMPENSATION
As compensation for the services to be performed by the Escrow Agent
hereunder, Licensee shall pay to the Escrow Agent, in advance, fees at the
standard rate prescribed from time to time by the Escrow Agent for performance
of services hereunder.
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9. LIABILITY
The Escrow Agent shall not, by reason of its execution of its
Agreement, assume any responsibility or liability for any transaction between
LHS and Licensee, other than the performance of its obligations as the Escrow
Agent, with respect to the Source Code and Commentary held by it in accordance
with this Agreement.
10. CONFIDENTIALITY
Except as provided in this Agreement, the Escrow Agent agrees that it
shall not divulge or disclose or otherwise make available to any third person
whatsoever, or make any use whatsoever, of the Source Code or Commentary,
without the express prior written consent of LHS.
11. NOTICES
All notices or other communications required or contemplated herein
shall be in writing, sent by certified mail, return receipt requested,
addressed to another party at the address indicated below or as same may be
changed from time to time by notice similarly given:
If to LHS:
LHS Communications Systems, Inc.
000 X. Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, XX, President
Fax: 770/000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx, L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxxx Xxxxxxxxx, Esq.
If to Licensee:
Powertel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
with a copy (which shall not constitute notice) to:
Powertel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
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If to Escrow Agent:
___________________________________
___________________________________
___________________________________
12. ASSIGNMENT
Neither this Escrow Agreement, nor any rights, liabilities or
obligations hereunder, may be assigned by (i) the Escrow Agent without the
prior written consent of Licensee and LHS, (ii) Licensee, without the prior
written consent of LHS or (iii) LHS, without the prior written consent of
Licensee; provided, however, that each of Licensee and LHS shall be entitled
to assign all of its respective rights, obligations and liabilities hereunder
in connection with a permitted assignment of is respective rights, obligations
and liabilities under the License Agreement.
13. GOVERNING LAW AND FORUM SELECTION
This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed in
accordance with the laws of the State of Georgia (but not including the choice
of law rules thereof). Each party hereby consents to the jurisdiction of any
federal or state court in the State of Georgia with respect to any action by
any other party seeking injunctive relief.
14. COUNTERPARTS
For the convenience of the parties, this Agreement may be executed in
as many counterparts as may be required. It shall not be necessary that the
signature of or on behalf of each party appears on each counterpart, but it
shall be sufficient that the signature of or on behalf of each party appears on
one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in any proof of this
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of or on behalf of all the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
[ESCROW AGENT] POWERTEL, INC.
By:________________________ By:________________________________
Name:______________________ Name:______________________________
Title:_____________________ Title:_____________________________
LHS COMMUNICATIONS SYSTEMS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT C
DEFAULT NOTICE
POWERTEL, INC.
(OFFICER'S CERTIFICATE)
THE UNDERSIGNED DOES HEREBY CERTIFY, that he is the duly elected,
qualified and acting ______________ of POWERTEL, INC., a Delaware corporation
(the "Company"), and DOES FURTHER CERTIFY on behalf of the Company and in
connection with the Source Code Escrow Agreement (the "Agreement"), dated as of
____________, between and among the Company, LHS Communications Systems, Inc.
and [Escrow Agent] (the "Escrow Agent"):
1. A default pursuant to Section __ of the Agreement has occurred.
Specifically, [provide details regarding the default event];
2. The Company therefore requests that the Escrow Agent release the
Source Code and Commentary (as such terms are defined in the Agreement) to the
Company pursuant to Section 5 of the Agreement; and
3. The Company acknowledges and agrees to abide by the provisions set
forth in Section 7 of the Agreement with respect to confidentiality and use
limitations relating to the Source Code and Commentary released by the Escrow
Agent pursuant to the Agreement.
IN WITNESS WHEREOF, the undersigned has hereunto set his hands and
affixed the seal of the Company this _________ day of, 19__.
______________________________
(name)
(title)
[CORPORATE SEAL]
PROPRIETARY AND CONFIDENTIAL
LHS/LICENSEE INFORMATION SOLELY FOR AUTHORIZED PERSONS
HAVING A NEED TO KNOW OR USE PURSUANT TO LHS OR LICENSEE INSTRUCTIONS
