1
Exhibit 10.14
Execution Copy
▇▇▇▇▇▇▇ SYSTEMS INC
Software License Agreement
BIRCH TELECOM, INC.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Thank you for choosing ▇▇▇▇▇▇▇ SYSTEMS INC. ("▇▇▇▇▇▇▇"). The terms appearing
below and on the attached Schedule A, which is incorporated by this reference,
form ▇▇▇▇▇▇▇'▇ Agreement with BIRCH TELECOM, INC. ("Customer") for licensing
software and documentation. Please read carefully and sign this Agreement in
duplicate. Both executed copies (including Schedules) should be returned to
▇▇▇▇▇▇▇ for written acceptance. Once accepted, ▇▇▇▇▇▇▇ will sign both copies and
then return one of those copies to you.
1. License Term:
The license term starts on the date on which ▇▇▇▇▇▇▇ executes this Agreement and
shall continue for a period of ninety-nine (99) years unless terminated earlier
in accordance with this Agreement.
2. License Grant:
▇. ▇▇▇▇▇▇▇ grants Customer a license to use ▇▇▇▇▇▇▇'▇ software in object code
form (the "Software"), and the associated user documentation (the
"Documentation" and, collectively with the Software, the "Software
Products") described in Schedule A under the terms of this Agreement. This
license is non-exclusive. Customer may not make any copies unless Customer
has paid the applicable fees and is otherwise authorized by Schedule A to
do so, except that Customer may make one complete backup copy of the
Software Products for emergency or archival use. Customer may not use more
than the number of copies nor utilize the Software Products to ▇▇▇▇ more
than the number of Subscribers (which shall mean the monthly aggregate
number of billing telephone numbers or call record identifiers as
applicable), which Customer has licensed hereunder. Initially, the
Customer's license shall include up to **** Subscribers. If upon quarterly
review of the number of Subscribers, Customer exceeds the number of
Subscribers licensed hereunder at that time, Customer shall so notify
▇▇▇▇▇▇▇ of its need to increase the number of Subscribers licensed
hereunder (the "Additional Subscriber Notification") and shall pay the
applicable additional License Fee in accordance with Paragraph 3 hereof.
Customer agrees to keep records of the number and location of copies in
its possession and to permit ▇▇▇▇▇▇▇ to audit such records and Customer's
use of the Software Produce during normal business hours upon reasonable
notice to Customer. Customer shall not remove or alter any trademark,
copyright, or other proprietary notice contained on or in any Software
Product. ▇▇▇▇▇▇▇'▇ copyright notice and other proprietary legends and
labels affixed on the Software Product as delivered by ▇▇▇▇▇▇▇ must also
be affixed on and in all copies. The inclusion of a copyright notice on
any software product or documentation shall not cause, or be construed to
cause, it to be a published work.
1
2
b. Use of the Software Products is restricted to residence and use on the
equipment on Schedule A. Customer may use the Software Products in
multi-processor environments, provided that Customer has paid all
applicable License Fees. All installation and use of the Software Products
is restricted to the locations specified in Schedule A or at such other
locations as may be approved by ▇▇▇▇▇▇▇ in writing (the "Permitted
Locations"); provided that use at any such Permitted Location shall
include reasonable remote access to such Software Products installed at
such Permitted Location. ▇▇▇▇▇▇▇ will not unreasonably withhold its
consent to the movement to or use of the Software Products at another
location or on different equipment. All Software Products may only be used
with the operating environment specified in the Documentation. These
restrictions are in addition to any set forth in the Schedules.
c. This license may not be transferred or sublicensed by Customer, except
that Customer may sublicense the Software Products (without making any
additional copies, except as permitted in this Agreement) to its
Affiliates so long as: (i) each such Affiliate acknowledges in writing
that it will comply with all terms and conditions of this Agreement and
will use the Software Products only for the same application as Customer;
(ii) ▇▇▇▇▇▇▇ immediately receives a copy of that acknowledgement; and
(iii) Customer remains fully liable for such Affiliate's compliance. As
used in this Section, "Affiliate" shall mean an entity controlled by,
controlling or under common control with Customer. Any other attempted
assignment, sublicense or transfer by Customer of this Agreement or the
Software Products shall be void. Customer may use the Software Products
only to process its own data and only for internal operations. Customer
may not use the Software Products to offer timesharing or other
computer-based services to third parties.
▇. ▇▇▇▇▇▇▇ may terminate Customer's license only in the event of a material
breach by Customer not cured within 30 days after ▇▇▇▇▇▇▇ gives notice of
such breach to Customer. However, no notice will be required in the event
of a material breach by Customer of Paragraph 8 below (Ownership and
Confidentiality). Upon termination for any reason, Customer shall
immediately return the Software Products, destroy all copies (including
those in computer memory), and stop all usage.
e. Customer agrees to allow ▇▇▇▇▇▇▇ to monitor compliance with these
conditions in a manner which does not interfere with normal business
operations.
3. Pricing and Payment Terms:
Schedule A sets forth the current fees that apply to Customers license of the
Software Products (the "License Fees"), exclusive of applicable taxes. The
Initial License Fee, as defined in Schedule A, shall be invoiced upon shipment
of the Software Products. Unless otherwise provided in Schedule A hereto, all
additional license fees shall be invoiced at ▇▇▇▇▇▇▇'▇ then current License Fees
upon ▇▇▇▇▇▇▇'▇ receipt of the Additional Subscriber Notification. Fees for
services hereunder, including installation or training, shall be invoiced
monthly during rendition of such services. In addition, Customer will be
responsible for reimbursing ▇▇▇▇▇▇▇ for reasonable out-of-pocket travel and
living expenses related to on-site services for installation or training. Other
than the Initial License Fee which shall be due fifteen (15) days from the date
of invoice, all payments hereunder shall be due thirty (30) days from the date
of the applicable
2
3
invoice. Customer agrees to pay all sales, use, personal property, value added
or other taxes associated with this Agreement or the Software Products and
services, except taxes on ▇▇▇▇▇▇▇'▇ net income. Past due payments bear interest
from the due date at the rate of the lesser of 1 1/2% per month or the highest
rate permitted by applicable law. All amounts due shall be paid in U.S. Dollars.
All other pricing and payment terms are as described in the applicable separate
agreement, if and when executed by ▇▇▇▇▇▇▇ and Customer.
4. Delivery and Installation:
a. Schedule A sets forth the delivery dates for the Software Products. Risk
of loss will not pass to Customer until delivery to Customers designated
address. Software Products cannot be returned once shipped. Replacement
copies of the Software Products may be obtained on ▇▇▇▇▇▇▇'▇ standard
media with a physical preparation charge if Customer's copies become lost
or damaged while in Customer's possession.
b. If Customer chooses to have ▇▇▇▇▇▇▇ install the Software Products, such
installation work shall be charged to Customer based on ▇▇▇▇▇▇▇'▇ hourly
rates then in effect, plus reimbursement for materials and other related
expenses incurred by ▇▇▇▇▇▇▇ in performing such work. During any such
installation work, Customer will let ▇▇▇▇▇▇▇ use Customer's system and
equipment in order to test and install the Software Products. Customer
must provide the necessary operating environment, as specified in the
Documentation. The rendition of services hereunder shall not confer upon
Customer any greater rights in the Software Products nor enlarge any of
▇▇▇▇▇▇▇'▇ liabilities or warranties beyond those which are specified under
this Agreement. ▇▇▇▇▇▇▇ reserves the right to provide similar services for
others.
5. Maintenance and Training:
Support Services, as defined in the Software Maintenance Agreement attached as
Schedule B hereto (the "Maintenance Agreement"), are provided at no cost for the
initial period of one hundred eighty (180) days beginning with the first day of
the month in which the Software Product was delivered to the Customer (the
"initial Period"). After the Initial Period, Customer may purchase Support
Services at the prices and on the terms set forth in the Maintenance Agreement.
The foregoing and the Maintenance Agreement, if and when executed, set forth
▇▇▇▇▇▇▇ entire maintenance obligation. ▇▇▇▇▇▇▇ shall have the right to charge
reasonable fees if ▇▇▇▇▇▇▇ spends time investigating or fixing a problem which
is not caused by a current standard release of a Software Product. Due to
difficulties in providing maintenance on a piecemeal or component basis, ▇▇▇▇▇▇▇
reserves the right to refuse to provide maintenance for less than all systems
and components under license. See Schedule A for information on training.
6. Customization Services:
Customization services will not be performed unless ▇▇▇▇▇▇▇ and Customer enter
into a separate written Customization Services Agreement in the form which is
attached as Schedule C hereto.
7. Warranty and Remedy:
▇. ▇▇▇▇▇▇▇ warrants that it has the right to grant Customer this license.
▇▇▇▇▇▇▇ further warrants that the Software Products delivered to Customer
will at time of delivery (or
3
4
installation if ▇▇▇▇▇▇▇ installs it) perform substantially in accordance
with the Documentation, provided that Customer supplies the operating
environment specified in the Documentation. If ▇▇▇▇▇▇▇ is unable, after
reasonable efforts, to correct or replace such non-conforming Software
Product, Customer's sole remedy shall be the refund of an amount not to
exceed the actual payments received by ▇▇▇▇▇▇▇ for such non-conforming
Software Product, and Customer shall have no rights in respect of such
non-conforming Software Product. If ▇▇▇▇▇▇▇ determines that the Software
Product for which Customer's requested warranty service is not eligible
for warranty service, for any reason, Customer shall pay or reimburse
▇▇▇▇▇▇▇ for all costs of investigating and responding to such request at
▇▇▇▇▇▇▇'▇ then prevailing time and materials rates. ▇▇▇▇▇▇▇ shall have no
obligation to make repairs, replacements or corrections which result, in
whole or in part, from normal wear and tear, catastrophe, fault or
negligence of Customer, improper or unauthorized use of the Software
Products, causes external to the Software Products or use of the Software
Products in a manner for which they were not designed.
▇. ▇▇▇▇▇▇▇ represents and warrants that the Software Products licensed under
this Agreement are designed to be used prior to, during, and after the
calendar year 2000 A.D., and without human intervention will correctly
recognize, calculate, process, sequence, store and transmit Date Data
without error or interruption, including leap years, and including errors
or interruptions from functions which may involve Date Data from more than
one century. The term "Date Data" shall mean any data or input which
includes an indication of or reference to date and that is stored
information and internal to fructionality. Date calculations involving
either a single century or multiple centuries will neither cause an
abnormal ending nor generate incorrect or unexpected results. When sorting
by date, all records will be sorted in accurate sequence and when the date
is used as a key, records will be read and written in accurate sequence.
As used in the previous sentence, accurate sequence means, by way of
example, that records will be read, written, and sorted in ascending order
so that the year 1999 is before the year 2000. The Software Products will
calculate, process, and display leap year information according to the
following algorithm: (i) a leap year will have twenty-nine (29) days in
the month of February; and (ii) a leap year occurs in all years divisible
by 400 and all years evenly divisible by 4 and not evenly divisible by
100. ▇▇▇▇▇▇▇ makes no representation or warranty nor takes any
responsibility for errors or omissions caused by third party systems,
devices, interfaces or software.
▇. ▇▇▇▇▇▇▇'▇ SOLE OBLIGATION AND CUSTOMER'S EXCLUSIVE REMEDY FOR ANY WARRANTY
FAILURE IS THE CORRECTION OR REPLACEMENT OF THE NONCONFORMING SOFTWARE
PRODUCTS OR SERVICES OR THE REFUND OF AN AMOUNT NOT TO EXCEED THE ACTUAL
PAYMENTS RECEIVED BY ▇▇▇▇▇▇▇ FOR SUCH SOFTWARE PRODUCTS, ALL AS PROVIDED
IN SECTION 7(a).
c. THE WARRANTIES CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE. THEY ARE IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT, OR ARISING BY STATUTE OR
OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE.
4
5
8. Ownership and Confidentiality:
a. All Software Products and the media on which they are delivered to
Customer remain the sole and exclusive property and trade secret of
▇▇▇▇▇▇▇ and its licensors. Customer shall not modify, adapt, translate,
reverse engineer, decompile, disassemble, or create derivative works based
on the Software Products.
Customer agrees to take reasonable security precautions to prevent
disclosure of the Software Products to third parties and to protect and
maintain confidentiality of the Software Products. Customer shall
immediately notify ▇▇▇▇▇▇▇ of any unauthorized disclosures. ▇▇▇▇▇▇▇ will
have the same confidentiality obligation to Customer for any specific
confidential information Customer supplies to ▇▇▇▇▇▇▇.
b. The recipient of confidential material or information will have no
confidentiality obligations with regard to such material or information to
the extent it is: (i) generally disclosed by the disclosing party without
restrictions on confidentiality, (ii) rightfully supplied to the recipient
by a third party without restrictions on confidentiality; or (iii)
otherwise becomes generally publicly known without any fault on the part
of the recipient.
c. Injunctive relief, in addition to any other right or remedy, shall be an
appropriate remedy to enforce the provisions of this Paragraph 8.
9. Responsibility:
a. Customer will be responsible for establishing reasonable backups, accuracy
checks, and security precautions to guard against possible malfunctions,
loss of data or unauthorized access.
b. Subject to ▇▇▇▇▇▇▇ obligations under Paragraph 11, Customer agrees to
indemnify and hold ▇▇▇▇▇▇▇ harmless from any claim, loss or liability
arising out of Customer's use of the Software Products or services, except
to the extent caused by ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ negligence or willful misconduct.
10. LIMITATION OF LIABILITY:
a. EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH 11, ▇▇▇▇▇▇▇'▇ LIABILITY AND THAT
OF ITS AGENTS, REPRESENTATIVES, AND EMPLOYEES TO CUSTOMER FOR DAMAGES WITH
RESPECT TO THIS AGREEMENT, THE SOFTWARE PRODUCTS, OR SERVICES SHALL NOT
EXCEED IN THE AGGREGATE THE FEE OR PRICE FOR THE PARTICULAR SOFTWARE
PRODUCTS OR SERVICES INVOLVED IN THE CLAIM. IN NO EVENT SHALL ▇▇▇▇▇▇▇ HAVE
ANY LIABILITY FOR INCIDENTAL, CONSEQUENTIAL OR, SPECIAL DAMAGES INCLUDING,
WITHOUT LIMITATION, LOST REVENUES, DATA OR PROFITS. THE LIMITATIONS AND
EXCLUSIONS IN THIS PARAGRAPH SHALL APPLY TO ALL CLAIMS OF EVERY NATURE,
KIND AND DESCRIPTION WHETHER ARISING FROM BREACH OF CONTRACT, BREACH OF
WARRANTY, NEGLIGENCE OR OTHER
5
6
TORT, OR OTHERWISE. DAMAGES AS LIMITED BY THIS PARAGRAPH IS CUSTOMER'S
SOLE AND EXCLUSIVE ALTERNATIVE REMEDY IN THE EVENT THAT ANY OTHER REMEDY
PROVIDED IN THIS AGREEMENT FAILS OF ITS ESSENTIAL PURPOSE.
▇. ▇▇▇▇▇▇▇ will not be responsible for any delay or failure in performance
for causes beyond its reasonable control, including without limitation,
acts of God, any government, its suppliers, or any other similar or
dissimilar cause.
11. Patents and Copyrights:
▇. ▇▇▇▇▇▇▇ will defend and indemnify Customer, at ▇▇▇▇▇▇▇'▇ expense, against
any claim or suit against Customer based on alleged violation of a United
States patent or copyright through Customer's use of the Software Products
in accordance with this Agreement and will pay all costs, settlements, or
judgement finally awarded, provided ▇▇▇▇▇▇▇ has the right to control the
defense of the litigation, Customer takes such actions as ▇▇▇▇▇▇▇ may
reasonably request at ▇▇▇▇▇▇▇'▇ expense, and Customer gives ▇▇▇▇▇▇▇ prompt
and timely written notice of any claim. If a judgement is obtained against
Customer's use of any part of the Software Products, or if a lawsuit has
been filed or threatened against ▇▇▇▇▇▇▇ or any of its customers and
▇▇▇▇▇▇▇ believes in good faith that there is a likelihood of an adverse
judgment, ▇▇▇▇▇▇▇ shall, at in option and expense: (i) modify or
substitute the Software Products (but provide Customer with substantially
the same functionality); (ii) obtain for Customer the right to continued
use of the Software Products; or (iii) upon written notice to Customer as
much before such termination as is reasonably practical in the given
situation, terminate the license and take back the Software Products. In
the event of termination, ▇▇▇▇▇▇▇ will refund Customer its license fees,
less a reasonable charge for use to the date of termination. ▇▇▇▇▇▇▇ will
have no obligation to defend and indemnify Customer to the extent that
the claim or liability is based upon use of a noncurrent release of the
Software Products and could have been avoided by use of a current release,
or if the claim or liability is based upon modifications made by Customer
or work performed to Customer's specifications.
b. THIS PARAGRAPH 11 STATES ▇▇▇▇▇▇▇'▇ ENTIRE LIABILITY FOR PATENT AND
COPYRIGHT INFRINGEMENT.
12. Employees:
In the event that either party directly or indirectly (other than through the
other party) hires, whether as an employee, independent contractor, or in any
other capacity, any person who was, within one year prior to the hiring an
employee of the other party or any of its subsidiaries, such party agrees to pay
the other party a finder's fee equal to 26 times that employee's bi-weekly gross
compensation at the time he or she left the employment of the other party or its
subsidiary. This provision shall apply only to those employees who either worked
for the other party in some capacity or worked with software or applications
which were in some fashion generally similar to any offered or provided
hereunder.
6
7
13. General:
a. This Agreement shall be governed by and construed under the laws of the
Commonwealth of Massachusetts, exclusive of its choice of law rules. This
is an integrated Agreement. It contains the full understanding of the
parties and supersedes all other understandings, agreements,
representations or correspondence, written or oral, regarding its subject
matter. This Agreement may be amended, modified or waived only by another
writing signed by the authorized representatives of both parties. Headings
are for convenience; they shall not be used to construe this Agreement. In
the event Customer issues a purchase order or other document covering the
subject matter of this Agreement, it is agreed that in the event of a
discrepancy between such purchase order and this Agreement, the terms and
conditions of this Agreement shall prevail. No license under this
Agreement, including the initial license, shall be effective unless
accepted in writing by an authorized representative of ▇▇▇▇▇▇▇, Paragraphs
7(c) through 13 and the record keeping and audit provisions of Paragraph 2
shall survive termination of this Agreement. Any action against ▇▇▇▇▇▇▇
under this Agreement or related to its subject matter must be brought
within one year after the cause of action accrues.
b. All notices shall be in writing and shall be sent by personal delivery, by
a reputable nationwide overnight courier service, or by facsimile with
confirmed answerback. Notices to Customer shall be sent to Customer's
billing address shown above, attention Senior Vice President Business
Development with a copy to General Counsel at the same address. Notices to
▇▇▇▇▇▇▇ shall be sent to the attention of the President, ▇▇▇▇▇▇▇ Systems,
▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Notices shall be
effective upon delivery in the case of personal delivery, on receipt in
the case of facsimile, and one day after it is sent via overnight courier.
Unless otherwise provided in Schedule A hereto, prices of the Software
Products and other items and services are subject to change in the future
with thirty (30) days prior notice. Current pricing schedules will be
supplied upon request.
c. All disputes arising out of or relating to this Agreement shall be finally
settled by arbitration conducted in Boston, Massachusetts, U.S.A. under
the rules of commercial arbitration of the American Arbitration
Association ("Rules"). Both parties shall bear equally the cost or the
arbitration (exclusive of legal fees and expenses, all of which each party
shall bear separately). All decision, of the arbitrator(s) shall be final
and binding on both parties and enforceable in any court of any court of
competent jurisdiction. Notwithstanding the foregoing, in the event of
breach by a party of its obligations hereunder, the non-breaching party
may seek injunctive or other equitable relief in any court of competent
jurisdiction.
d. Nothing in this license shall be construed to constitute or create a joint
venture, partnership, or formal business organization of any kind and the
rights and obligations of each party shall be only those expressly set
forth herein. Neither party shall have authority to bind the other, and
neither party assumes any liabilities of the other party.
e. If during the term of this Agreement, ▇▇▇▇▇▇▇ agrees to license, transfer
or otherwise provide to any other customer products, including without
limitation Software, (a) with substantially similar specifications as the
software provided to Customer under this Agreement, (b) at quantities
equal to or less than the quantities being purchased by
7
8
Customer hereunder, (c) under substantially similar circumstances as
provided hereunder and (d) for selling prices lower than the prices to
Customer for products hereunder, then the prices to Customer for such
products under this Agreement shall be automatically reduced to such lower
prices for that period of time which ▇▇▇▇▇▇▇ is offering the lower prices
to such other customer.
THE ABOVE TERMS AND CONDITIONS ARE AGREED TO AND ACCEPTED AND ARE HEREBY
EXECUTED BY THE PARTIES UNDER SEAL.
(Please sign and return two copies of this agreement).
BIRCH TELECOM, INC. Accepted at ▇▇▇▇▇▇▇ Systems Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By:
--------------------------- ---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President Title: Senior Vice President
Date: June 9, 1998 Date:
8
9
Customer hereunder, (c) under substantially similar circumstances as
provided hereunder and (d) for selling prices lower than the prices to
Customer for products hereunder, then the prices to Customer for such
products under this Agreement shall be automatically reduced to such lower
prices for that period of time which ▇▇▇▇▇▇▇ is offering the lower prices
to such other customer.
THE ABOVE TERMS AND CONDITIONS ARE AGREED TO AND ACCEPTED AND ARE HEREBY
EXECUTED BY THE PARTIES UNDER SEAL.
(Please sign and return two copies of this agreement.)
BIRCH TELECOM, INC. Accepted at ▇▇▇▇▇▇▇ Systems Inc.
By: By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------- ---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President Title: Senior Vice President
Date: June 9, 1998 Date:
8
10
Schedule A
I. Licensed Software Products
▇▇▇▇▇▇▇ CBP AS/400 3.2 for up to **** Subscribers, including Updates as
described in the Software Maintenance Agreement, if such Software Maintenance
Agreement is in full force and effect between ▇▇▇▇▇▇▇ and Customer at the time
of the release of such Update, and all associated Documentation License for
greater than **** Subscribers will be granted upon payment of the applicable
additional License Fees as provided in Section 3 of the License Agreement.
II. Equipment Operating Environment and Permitted Location
IBM AS/400 at Customer's premises located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other equipment or locations as may
be approved by ▇▇▇▇▇▇▇, in writing.
III. License Fees
North America
Number of Subscribers* License Fee**
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
* Subscriber counts will be reviewed quarterly for the life of the contract.
** All License Fees are in United States Dollars and apply cumulatively, i.e.,
the additional License Fee to move from one Subscriber level to the next is the
difference between the previous level and the new level. The above License Fees
shall be in effect for two years from the date of execution of this Agreement
and shall not increase by more than 10% in each of the third and fourth years
after the date of execution of this Agreement. Thereafter, License Fees shall be
at ▇▇▇▇▇▇▇'▇ then current levels.
*** The "Initial License Fee."
9
11
IV. Delivery
▇▇▇▇▇▇▇ shall deliver ▇▇▇▇▇▇▇ AS/400 3.2 for up to **** Subscribers to
Customer's principal place of business within seven (7) days after the date of
execution of this Agreement.
V. Training
This will be delivered in the Statement of Work.
VI. Permitted Use
Except as may otherwise be agreed to by ▇▇▇▇▇▇▇ and Customer in writing,
Customer shall be permitted to use three (3) copies of the Software Products -
one for production, one for training and testing and one for backup or archiving
to be integrated with Customer's disaster recovery system.
10
12
Schedule B
SOFTWARE MAINTENANCE AGREEMENT
BIRCH TELECOM, NC.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Thank you for choosing ▇▇▇▇▇▇▇ SYSTEMS INC. ("▇▇▇▇▇▇▇") to provide you
("Customer") with maintenance services. The terms appearing below form our
Agreement for maintaining the Software Products, as that term is defined in a
Software License Agreement between ▇▇▇▇▇▇▇ and Customer (the "Software License
Agreement"). Please read carefully, and sign this Agreement in duplicate. Both
copies should be returned to ▇▇▇▇▇▇▇ for written acceptance. Once accepted,
▇▇▇▇▇▇▇ will sign both copies and then return one of those copies to you.
These maintenance services will be provided by ▇▇▇▇▇▇▇ only with respect to
Software Products.
1. Definitions. Capitalized terms used herein that are not defined shall have
the meaning given to such term in the Software License Agreement.
(a) Commencement Date. The later of (i) the date upon which ▇▇▇▇▇▇▇ and
Customer have executed this Agreement and (ii) the date following the expiration
of the Initial Period as such term is defined in Section 5 of the Software
License Agreement.
(b) Licensed Software. All Software Products licensed to Customer under
the Software License Agreement.
(c) Maintenance Period. A period of twelve (12) consecutive months
commencing on the Commencement Date of this Agreement, and each twelve month
period thereafter.
(d) Support Service. The Licensed Software support service ordered by
Customer and furnished under this Agreement, as such service is available and
constituted from time to time in accordance with this Agreement.
(e) Updates. Product updates, problem corrections, modifications or
enhancements to the Licensed Software.
2. Term. The term of this Agreement shall commence on the Commencement Date and
shall be for a period of one year. This Agreement shall continue thereafter in
full force and effect on a year-to-year basis unless sooner terminated in
accordance with Section 4 hereof.
3. Services to be Provided.
▇▇▇▇▇▇▇ shall provide the following services during a Maintenance Period:
(a) Problem Correction. ▇▇▇▇▇▇▇ shall use reasonable efforts to diagnose
and correct documented problems which Customer reports in using the Licensed
Software. However, under
11
13
no circumstances does ▇▇▇▇▇▇▇ warrant or represent that all problems can or will
be connected. ▇▇▇▇▇▇▇ will respond to Customer and initiate problem resolution
activities within one hour of a reported CRITICAL problem, within 24 hours of a
MAJOR problem, within 48 hours of a SERIOUS problem, prior to the next Update
for a MINOR problem;
(i) A CRITICAL problem is one which causes a substantial system
failure or renders the Software Products substantially unusable, and an
immediate fix is required;
(ii) A MAJOR problem is one which causes a system or Software
Products feature failure that cannot be avoided by alternate methods by the
user;
(iii) A SERIOUS problem is one which causes a Software Products
feature or system failure that can be avoided by alternate methods by the user;
and
(iv) A MINOR problem is one which causes an inconvenience to the
user of the Software Products, including but not limited to message and
Documentation errors.
The following sets forth the escalation of ▇▇▇▇▇▇▇ management involvement
during the period a CRITICAL problem that has not been corrected. The Involved
Manager Listed below will present Customer's designated representative with a
status update on the CRITICAL problem at the time listed next to such Involved
Manager's name.
HOURS AFTER REPORTED CRITICAL PROBLEM INVOLVED ▇▇▇▇▇▇▇ MANAGER
------------------------------------- ------------------------
4 Customer Service Manager
8 Project Manager
12 Consulting Manager
16 Vice President Operations
20 Senior Vice President Operations
24 Chief Operating Officer
The following sets forth the escalation of ▇▇▇▇▇▇▇ management involvement
during the period a MAJOR problem has not been corrected. The Involved Manager
listed below will present Customer's designated representative with a status
update on the MAJOR problem at the time listed next to such Involved Manager's
name.
HOURS AFTER REPORTED MAJOR PROBLEM INVOLVED ▇▇▇▇▇▇▇ MANAGER
---------------------------------- ------------------------
8 Customer Service Manager
16 Project Manager
24 Consulting Manager
32 Vice President Operations
40 Senior Vice President Operations
48 Chief Operating Officer
If Customer reports a problem to ▇▇▇▇▇▇▇, Customer shall give ▇▇▇▇▇▇▇
reasonable access to the equipment on which the Licensed Software operates, the
Licensed Software and all relevant documentation and records, and shall provide
such reasonable assistance as ▇▇▇▇▇▇▇ may request, including sample output and
other diagnostic information in order to assist ▇▇▇▇▇▇▇ in providing maintenance
service.
12
14
(b) Updates. ▇▇▇▇▇▇▇ shall provide Customer, at no additional cost,
Updates for the Licensed Software under maintenance when such Updates are
developed or published by ▇▇▇▇▇▇▇. Any other software or documentation developed
or published by ▇▇▇▇▇▇▇ will be offered to Customer at ▇▇▇▇▇▇▇'▇ ten current
published rates. All Updates shall become part of the Licensed Software.
Any changes to program logic made under this Agreement shall be provided
to Customer on any machine-readable media specified by ▇▇▇▇▇▇▇. All work carried
out by ▇▇▇▇▇▇▇ under this Maintenance Agreement will be chargeable to Customer
at ▇▇▇▇▇▇▇'▇ then current hourly rate if it is found that no problem or
programming error in the Licenses Software exists.
(c) Hotline Service. From 07:00 to 19:00 Eastern Time, ▇▇▇▇▇▇▇ shall
provide Customer remote access to ▇▇▇▇▇▇▇ personnel to help Customer in
answering routine questions with respect to use of the Licensed Software.
Customer's access to ▇▇▇▇▇▇▇ personnel shall include both telephone access and
access by means of ▇▇▇▇▇▇▇'▇ electronic mail service when made available by
▇▇▇▇▇▇▇, provided, however, that all common carrier charges incurred by Customer
and all costs of telephone and terminal equipment incurred by Customer shall be
the responsibility of Customer. ▇▇▇▇▇▇▇ shall make available to Customer a
reasonable mechanism for prompt notification of CRITICAL and MAJOR problems 24
hours per day.
4. Support Service Term.
(a) Commencement. ▇▇▇▇▇▇▇ will begin Support Service for the Licensed
Software on the Commencement Date.
(b) Continuation. ▇▇▇▇▇▇▇ will furnish Support Service for the Licensed
Software for successive Maintenance Periods until terminated by written notice
from one party to the other.
(c) Termination. Except as otherwise provided herein.
(i) Notice. Either party may terminate this Agreement as of the end
of any Maintenance Period by giving written notice to the other, such notice to
be given by the party wishing to terminate this Agreement at least sixty (60)
days prior to the end of any Maintenance Period.
(ii) Default. Either party may terminate this Agreement at any time
if the other party fails or default, in the performance of any of its
obligations hereunder, effective upon such party giving written notice of
termination to the defaulting party. In the event Customer terminates this
Agreement under this Section 4(c)(ii), ▇▇▇▇▇▇▇ shall reimburse Customer the
Maintenance Charge associated with the remaining months in the Maintenance
Period, such reimbursement to be calculated as the number of months remaining in
the Maintenance Period at the time of the termination divided by 12 multiplied
by the Maintenance Charge.
(iii) License Expiration. This Agreement shall terminate
automatically upon termination or expiration of the software license that is the
subject of the Software License Agreement.
13
15
5. Customer Responsibilities
(a) Interface. Except as otherwise provided in this or any other written
agreement between Customer and ▇▇▇▇▇▇▇, Customer shall be responsible for the
interface between Licensed Software for which Support Service is available and
all other software used by Customer.
(b) Installation and Operation. Except as otherwise provided in this or
any other written agreement between Customer and ▇▇▇▇▇▇▇, Customer is
responsible for installing, managing and operating the Licensed Software.
(c) Software License Limitations. Customer agrees that the rights granted
to Customer, the use limitations and Customer's responsibilities to prevent
unauthorized disclosure specified in the Software License Agreement apply
equally to all Support Services and the end product of such support services,
such as corrective code, enhancements end Updates furnished under this
Agreement.
(d) Modifications by Customer. In no event shall ▇▇▇▇▇▇▇ have any
responsibility to correct any problems or damage resulting from changes to or
modification of Licensed Software made by Customer.
(e) Uninstalled Updates. ▇▇▇▇▇▇▇ shall not be responsible for correcting
any alleged problem if Customer fails to incorporate in Licensed Software any
Update that ▇▇▇▇▇▇▇ has provided to Customer other than the two most recent
updates that ▇▇▇▇▇▇▇ has provided to Customer as part of the Support Services.
6. Charges.
(a) The charge for Support Service pursuant to this Agreement for each
Maintenance Period (the "Maintenance Charge") will be eighteen percent (18%) of
the aggregate License Fee charged pursuant to the Software License Agreement.
The Maintenance Charge shall be invoiced at the commencement of the Maintenance
Period to which such Maintenance Charge applies, with all payments hereunder due
thirty (30) days from the date of the applicable invoice. Past due payments bear
interest from the due date at the rate of the lesser of 1 1/2% per month or the
highest rate permitted by applicable law. All amounts due shall be paid in U.S.
Dollars.
(b) Maintenance Charges and all other fees in this Agreement are exclusive
of all taxes and Customer shall pay any sales, use, goods and services, personal
property, consumption VAT or other tax and any duties or tariffs that may be
assessed whether based upon the delivery, possession, sale or use of these
maintenance services or otherwise, except for tax based on the income of
▇▇▇▇▇▇▇.
(c) Unless otherwise specified, all charges are exclusive of customs or
brokers fees or duties for tools and repair or replacement parts which must be
exported from the United States of America and imported into another country to
enable ▇▇▇▇▇▇▇ to fulfill its responsibilities as defined in Sections 3 hereof.
▇▇▇▇▇▇▇ reserves the right to ▇▇▇▇ Customer for such charges.
14
16
7. Warranty; Limitation of Remedies.
(a) ▇▇▇▇▇▇▇ warrants that the Support Service rendered hereunder shall be
performed in a professional and workmanlike manner consistent with this
Agreement. The Customer's remedy hereunder is correction of such Support
Service, provided that if ▇▇▇▇▇▇▇ is unable, after reasonable efforts, to
correct such Support Service, Customer's sole remedy shall be the refund of an
amount equal to payments made by Customer to ▇▇▇▇▇▇▇ under this Agreement for
such Support Service.
(b) EXCEPT FOR THIS EXPRESS WARRANTY, ▇▇▇▇▇▇▇ GRANTS NO WARRANTIES, EITHER
EXPRESSED OR IMPLIED, ON ANY SERVICES INCLUDING, BUT NOT BY WAY OF LIMITATION,
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE OR
TRADE. THE STATED EXPRESS WARRANTY IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS
OF ▇▇▇▇▇▇▇ FOR DAMAGES INCLUDING, BUT NOT LIMITED TO, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, OCCURRING OUT OF OR IN CONNECTION
WITH THE SERVICES HEREUNDER, EVEN IF ▇▇▇▇▇▇▇ HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
(c) ▇▇▇▇▇▇▇'▇ ENTIRE LIABILITY FOR DAMAGES FOR ANY CAUSE WHATSOEVER AND
REGARDLESS OF THE FORM OF ACTION SHALL BE LIMITED TO THE AGGREGATE AMOUNT OF
FEES (EXCLUDING REIMBURSED EXPENSES) PAID TO ▇▇▇▇▇▇▇ FOR SERVICES RENDERED
HEREUNDER.
8. General.
(a) This Agreement shall be governed by and construed under the laws of
the Commonwealth of Massachusetts, exclusive of its choice of law rules. This is
an integrated Agreement. It contains the full understanding of the parties and
supersedes all other understandings, agreements, representations, or
correspondence, written or oral, regarding its subject matter. This Agreement
may be amended, modified, or waived only by another writing signed by the
authorized representatives of both parties. In the event Customer issues another
document covering the subject matter of this Agreement, it is agreed that in the
event of a discrepancy between such other document and this Agreement, the terms
and conditions of this Agreement shall prevail. Any action against ▇▇▇▇▇▇▇ under
this Agreement or related to its subject matter must be brought within one year
after the cause of action accrues.
(b) All disputes arising out of or relating to this Agreement shall be
finally settled by arbitration conducted in Boston, Massachusetts, U.S.A. under
the rules of commercial arbitration of the American Arbitration Association
("Rules"). Both parties shall bear equally the cost of the arbitration
(exclusive of legal fees and expenses, all of which each party shall bear
separately). All decisions of the arbitrator(s) shall be final and binding on
both parties and enforceable in any court of competent jurisdiction.
Notwithstanding the foregoing, in the event of breach by a party of its
obligations hereunder, the non-breaching party may seek injunctive or other
equitable relief in any court of competent jurisdiction.
(c) Paragraph 2(c) (assignments) of the Software License Agreement shall
also apply to this Agreement.
15
17
IN WITNESS WHEREOF Customer and ▇▇▇▇▇▇▇ have executed this Software Maintenance
Agreement under seal.
BIRCH TELECOM, INC. Accepted at ▇▇▇▇▇▇▇ Systems Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By:
------------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President Title: Senior Vice President
Date: June 9, 1998 Date:
16
18
IN WITNESS WHEREOF Customer and ▇▇▇▇▇▇▇ have executed this Software Maintenance
Agreement under seal.
BIRCH TELECOM, INC. Accepted at ▇▇▇▇▇▇▇ Systems Inc.
By: By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President Title: Senior Vice President
Date: Date:
16
19
Schedule C
Customization Services Agreement
Terms and Conditions
BIRCH TELECOM, INC.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Thank you for choosing ▇▇▇▇▇▇▇ SYSTEMS INC. ("▇▇▇▇▇▇▇") to provide you
("Customer") with customization services (the "Project"). The terms appearing
below and on the attached appendices (Appendices 1 and 2), which are
incorporated by this reference, form our Agreement for developing software and
documentation. Please read carefully, and sign this Agreement in duplicate. Both
copies (including Appendices) should be returned to ▇▇▇▇▇▇▇ for written
acceptance. Once accepted, ▇▇▇▇▇▇▇ will sign both copies and then return one of
those copies to you.
▇▇▇▇▇▇▇ and Customer have also entered into a Software License Agreement
commencing on ______________ (the "Software License").
1. DEFINITIONS
When used in this Agreement, the following terms shall have the meaning
specified below:
1.1 "Base Software" means the Software Products, as that term is defined in
the Software License.
1.2 "Billing System" means the Software Products and the Software
Developments.
1.3 "Documentation" means any printed material in the English language related
to the Software Developments provided by ▇▇▇▇▇▇▇ for use in connection
with the Billing System.
1.4 "Future Software Developments" means any future developments to the
Billing System specifically requested by Customer in accordance with
Section 2.2 hereof.
1.5 "Intellectual Property" means all intellectual and industrial property,
including copyright, trademarks, patents, industrial designs, mask works
and integrated circuit topographies, created, developed or reduced by
practice by a Party under this agreement.
1.6 "Project Plan" means the timetable for accomplishing the Project, as set
out in the Statement of Work.
1.7 "Software Developments" means the enhancements and developments made by
▇▇▇▇▇▇▇ in order to adapt the Base Software to the specific requirements
of Customer, all as listed in the Statement of Work.
17
20
1.8 "Statement of Work" means the initial statement of work to be
completed and mutually agreed by the parties pursuant to Appendix 1
hereto.
1.9 "Technical Specifications" means the detailed design specifications for
the Software Developments as listed in the Statement of Work, as well as
the detailed description of the other services to be provided by ▇▇▇▇▇▇▇
under this Agreement.
2. SOFTWARE DEVELOPMENTS
2.1. Initial Implementation
(a) Based on the Technical Specifications, ▇▇▇▇▇▇▇ shall develop the Software
Developments. These will be done at ▇▇▇▇▇▇▇'▇ premises end at Customer's
premises as required.
(b) After acceptance of the Statement of Work by Customer, this document and
the Statement of Work shall supersede all other definitions or
descriptions of the Software Developments, both written or oral, whether
made by Customer or ▇▇▇▇▇▇▇.
(c) Each Party shall appoint a primary contact and a secondary contact, who
shall be the contact point for every issue concerning the Project and who
shall be informed of the progress of the Project. The names of the
contacts will be exchanged in writing by the Parties. Using the contacts,
the Parties shall report to each other as mutually agreed upon as to the
progress being made by each of them in relation to their various
responsibilities set our in the Project Plan, any delays being encountered
and the actions being taken to recover from such delays.
All Software Developments must be authorized by the primary contact - or
the secondary contact in the absence of the primary contact. The
authorization will initially be a verbal notification, with a written
follow-up within 24 hours for sizable developments (i.e. in excess of
5,000 U.S. Dollars).
All other work must be authorized by the primary contact - or the
secondary contact in the absence of the primary contact. The authorization
will initially be a verbal notification, with a written follow-up within
24 hours for sizable support request (i.e., in excess of 5,000 U.S.
Dollars).
(d) Any additions, modifications or changes to the Technical Specifications
requested by Customer shall first be submitted to ▇▇▇▇▇▇▇ by Customer.
Within fourteen (14) days, ▇▇▇▇▇▇▇ shall reply setting forth the effort,
if any, on the Project Plan, on the performance of the Billing System end
on any additional fees payable by Customer. If Customer notifies ▇▇▇▇▇▇▇
within seven days of receipt from ▇▇▇▇▇▇▇ of such reply of its desire that
such additions, modifications or changes be implemented, this Agreement
shall be deemed to be amended to reflect any change to the Project Plan
and to the fees to be paid.
(e) Customer will certify full acceptance of all Software Developments no
later than thirty (30) days after delivery of the Software Developments,
provided that the Software Developments perform substantially in
conformance with the Statement of Work. In this respect, it is understood
and agreed upon by both Parties that all Software Developments
18
21
shall have been tested by ▇▇▇▇▇▇▇ prior to delivery and by Customer after
delivery in accordance with the testing schedule set forth in the
Statement of Work.
2.2. Future Software Developments
(a) Customer may in the future determine that Future Software Developments
should be made to the Billing System. Customer will initiate Future
Software Developments by delivering a draft set of user requirements to
▇▇▇▇▇▇▇ detailing the general functionality required of the Future
Software Developments and any other general requirements to be met.
(b) ▇▇▇▇▇▇▇ shall respond within thirty (30) days, unless otherwise agreed by
the parties, to user requirements received by it under Section 2.2(a)
above by providing Customer with a written best estimate of the days of
effort required to carry out the Future Software Developments, together
with any general comments on the user requirements that may be
appropriate. The days of effort estimate shall be inclusive of the time
required to produce Documentation as required under this Agreement,
project management consultancy work and all ▇▇▇▇▇▇▇ internal testing.
(c) Upon receipt of ▇▇▇▇▇▇▇'▇ estimate under Section 2.2(b) above, Customer
will review the user requirements for the Future Software Developments and
shall make any changes that it deems necessary. Customer will then prepare
a detailed functional specification and a project timetable specifying
dates for completion of the relevant phases of the Future Software
Developments based on ▇▇▇▇▇▇▇'▇ days of effort estimate. Customer, may, at
its discretion, request ▇▇▇▇▇▇▇ to complete the project timetable on its
behalf based on Customer's delivery requirements.
(d) Upon receipt of the functional specification for the Future Software
Developments (as prepared under Section 2.2(c) above) and upon completion
of the project timetable, ▇▇▇▇▇▇▇ shall review its days of effort estimate
and shall advise Customer of the extent to which it can comply with the
functional specification and the project timetable. The parties shall then
agree upon any changes to the functional specification or to the project
timetable which may be necessary to enable ▇▇▇▇▇▇▇ to complete the Future
Software Developments in accordance with both of those documents.
(e) Upon completion and written agreement by the Parties of the documentation
referred to in Section 2.2(d) above in the form of a statement of work,
▇▇▇▇▇▇▇ shall carry out and implement the Future Software Developments in
accordance with the agreed functional specification and project timetable
all as set forth in such statement of work.
(f) The work carried out by ▇▇▇▇▇▇▇ to produce a statement of work for Future
Software Developments will be charged to Customer on a time and material
basis at an hourly rate equal to ▇▇▇▇▇▇▇'▇ then-current rate for producing
such quotations.
(g) Customer will certify full acceptance of all Future Software Developments
no later than thirty (30) days after the delivery of the Future Software
Developments, provided that the Future Software Developments perform
substantially in conformance with the applicable statement of work. In
this respect, it is understood and agreed upon by both Parties that all
Future Software Developments shall have been tested by ▇▇▇▇▇▇▇ prior to
19
22
delivery and by Customer after delivery in accordance with the testing
schedule set forth in the applicable statement of work.
3. DEVELOPMENTS AND TESTING EQUIPMENT - SPACE
Customer agrees to provide facilities for ▇▇▇▇▇▇▇, the equipment, Billing System
and the Future Software Developments, at no charge, and Customer will ensure
that ▇▇▇▇▇▇▇ has sufficient access to such equipment, Billing System and Future
Software Developments, so long as the security requirements of Customer are met.
Each Party will also provide reasonable work space for the other party's
employees who require work space to furnish the services to be provided under
this Agreement. If development work requires the use of ▇▇▇▇▇▇▇ provided
software or hardware environment, there will be an additional charge of $l0 per
developer hour.
4. CUSTOMER ASSISTANCE
Customer shall assist ▇▇▇▇▇▇▇ in the performance of its services under this
Agreement by making available all equipment, software, documentation,
information and personnel required for the execution of this Agreement on a
timely basis. Customer shall also ensure that those of its personnel who are
assigned to assist ▇▇▇▇▇▇▇ are familiar with Customer's requirements and have
the expertise and capabilities necessary to permit ▇▇▇▇▇▇▇ to undertake and
complete the services under this Agreement.
5. OWNERSHIP OF SOFTWARE DEVELOPMENTS AND FUTURE SOFTWARE DEVELOPMENTS
5.1 Upon payment of the amounts specified in Section 7, the Software
Developments and all Intellectual Property related to it and, in accordance with
Section 2 of this Agreement, the Future Software Developments and all
Intellectual Property related to it, shall belong and become the joint ownership
of Customer and ▇▇▇▇▇▇▇.
5.2 This ownership by both Parties shall imply that each party will be entitled
to exercise all Intellectual Property rights on these Software Developments and
Future Software Developments (including without Limitation the rights to
disclose, use, sell, license, and adapt) without any interference of the other
Party or any duty to account to the other Party, except that Customer shall not
license any third party to use any of the Software Developments, the Future
Software Developments or the Intellectual Property rights related to them.
6. DELIVERY SCHEDULE
6.1 The Billing System shall be tested and implemented according to the time
schedule provided in the Statement of Work, on the understanding that if any of
the time-frames are delayed, the other time-frames will be postponed by an equal
number of days.
6.2 From the date of delivery of the Billing System and from the date of
delivery of any Future Software Developments until the end of the Warranty
Period, as defined under Section 9.2 hereof, ▇▇▇▇▇▇▇ will immediately correct at
Customer's request free of charge, all reported, reproducible errors, bugs or
any other problems because of which the Billing System and/or any Future
Software Developments does not conform to the applicable statement of work
("Problems") upon notification by Customer.
20
23
6.3 On the date of the delivery of the Billing System and on the date of
delivery of any Future Software Developments, Customer will initiate acceptance
testing. If Customer is satisfied with the results of the Billing System on the
date which is 15 days after such delivery, a statement of provisional receipt
will be drawn up and signed by Customer and delivered to ▇▇▇▇▇▇▇. In any event
Customer will certify full acceptance of the Billing System no later than thirty
(30) days after delivery of the Billing System or the Future Software
Development as the case may be, provided that the Billing System or Future
Software Developments perform substantially in conformance with the applicable
statement of work.
7. PRICES, PAYMENT AND PENALTIES
7.1 Fee for Software Developments
Subject to the Statement of Work, work to be performed by ▇▇▇▇▇▇▇ on Software
Developments shall be charged to Customer based on ▇▇▇▇▇▇▇'▇ hourly rates which
are from time to time in effect, plus reimbursement for materials and other
related expenses reasonably incurred by ▇▇▇▇▇▇▇ in performing such work.
▇▇▇▇▇▇▇'▇ current hourly rates are set forth in Appendix 2 attached hereto. To
the extent that the aggregate hourly fees charged by ▇▇▇▇▇▇▇ for the Software
Developments set forth in the Statement of Work, are greater than **** of the
estimate set forth in the Statement of Work due solely to the acts or omissions
of ▇▇▇▇▇▇▇, the hourly fees set forth in Appendix 2 shall be reduced by **** for
all customization work required to complete such Software Developments beyond
such aggregate expenditure. In addition, provided that no delay or overrun is
caused by the acts or omissions by a party other than ▇▇▇▇▇▇▇ or, provided
further that the Statement of Work is not amended or expanded by the parties
hereto, ▇▇▇▇▇▇▇ agrees that the aggregate hourly fees charged by it for the
Software Developments in the Statement of Work shall not exceed ****
7.2 Fee for Future Software Developments
Subject to any then effective statement of work or agreement, work to be
performed by ▇▇▇▇▇▇▇ on Future Software Developments shall be charged to
Customer based on ▇▇▇▇▇▇▇'▇ hourly rates which are from time to time in effect,
plus reimbursement for materials and other related expenses incurred by ▇▇▇▇▇▇▇
in performing such work. ▇▇▇▇▇▇▇'▇ current hourly rates are set forth in
Appendix 2 attached hereto.
7.3 Expenses
(a) Customer agrees to reimburse ▇▇▇▇▇▇▇ for the cost of travel, at coach
class or equivalent rate, and time involved in necessary visits to its
premises to carry out and/or to install the Software Developments and
future Software Developments, subject to a maximum limit of four (4) hours
for travel to and from ▇▇▇▇▇▇▇ to Customer. Travel time charges will be
paid at ▇▇▇▇▇▇▇'▇ then-current hourly rate for travel related to
customization services for its other customers.
(b) All reasonable accommodation and subsistence expenses incurred by ▇▇▇▇▇▇▇
will also be reimbursed by Customer. Such expenses must be expressly
requested by Customer in relation with the Project and for the services
provided by ▇▇▇▇▇▇▇.
21
24
(c) All telecommunication expenses incurred by ▇▇▇▇▇▇▇ in relation with the
Project and for services provided by ▇▇▇▇▇▇▇ will also be reimbursed by
Customer upon presentation by ▇▇▇▇▇▇▇ of sufficient written proof of
reasonable expenses incurred.
(d) These expenses, except telecommunication expenses, must receive Customer's
prior written authorization and will be reimbursed upon receipt of an
invoice with the related vouchers.
7.4 Taxes
Prices in this Agreement are exclusive of all taxes and Customer shall pay any
sales, use, goods and services, personal property, consumption, VAT or other tax
and any duties or tariffs that may be assessed whether based upon the delivery,
possession, sale or use of these customization services or otherwise, except for
tax based on the net income of ▇▇▇▇▇▇▇.
7.5 Invoicing and Payment Terms
(a) Any payments due ▇▇▇▇▇▇▇ from Customer will be invoiced monthly in arrears
and will be paid thirty (30) days after Customer's receipt of such
invoice, provided that the payment of the invoice for the final full
calendar month of implementation of the Software Developments under the
Statement of Work, shall be due at the end of user acceptance pursuant to
the Statement of Work, but no later than December 15, 1998. If payment is
delayed by Customer, other than in accordance with Section 7.5(b) below,
▇▇▇▇▇▇▇ shall be entitled to charge interest at a rate equal to the lesser
of: (i) eighteen (18%) per annum; or (ii) the maximum lawful interest rate
under applicable law. Each such invoice delivered to Customer will provide
details of the charges to Customer, including Agreement reference numbers,
applicable rates and hours of ▇▇▇▇▇▇▇ personnel providing services to
Customer and will be supported by proper invoices and vouchers in respect
of all expenses for which reimbursement is claimed.
(b) All payments under this Agreement shall be made in U.S. Dollars, and
Customer shall have the right to withhold payments for any amounts under
dispute by Customer, but shall pay any other amounts invoiced that are not
in dispute. If such dispute is resolved in favor of ▇▇▇▇▇▇▇, Customer
shall pay interest on such disputed amount from the date it originally
became due until the date it is paid to ▇▇▇▇▇▇▇ at a rate equal to the
lesser of: (i) eighteen percent (18%) per annum; or (ii) the maximum
lawful interest rite under applicable law.
8. DURATION AND TERMINATION
8.1 This Agreement may be terminated forthwith by either Party on written notice
if the other Party is in significant breach of its obligations and fails to
remedy the breach within thirty (30) days of receipt of notice in writing
thereof. In the event that the terminating Party can demonstrate that such
breach has involved it in additional costs, then it shall have the right to
recover such costs from the breaching Party.
8.2 Either Party may terminate this Agreement forthwith on written notice if the
other Party shall become insolvent or bankrupt or make an arrangement with its
creditors or go into liquidation.
22
25
8.3 Upon termination of this Agreement, howsoever occasioned, ▇▇▇▇▇▇▇ shall
forthwith deliver to Customer (without retaining copies of the same) all
correspondence, drawings, specifications, accounts documents and papers of any
description elating to affairs and business of Customer (or any subsidiary or
associated company) whether or not the same were prepared by ▇▇▇▇▇▇▇, were
supplied by Customer (or any subsidiary or associated company), and all other
property of Customer or any subsidiary or associated company (other than
property jointly owned of ▇▇▇▇▇▇▇ or Customer) within its possession or under
its control.
8.4 Termination of this Agreement shall not prejudice any rights of either Party
which have arisen on or before the date of termination and shall not prejudice
the Software License Agreement or any rights of either Party thereunder.
9. WARRANTY
9.1 ▇▇▇▇▇▇▇ warrants and represents to Customer that it has full right and
authority to enter into this Agreement.
9.2 ▇▇▇▇▇▇▇ warrants that the Software Developments and the Future Software
Developments will perform the facilities and functions set out in their
respective statements of work as of the date of acceptance, and shall continue
to provide such facilities and functions and shall be free from programming
errors for a period of ninety (90) days from the date of acceptance of such
Software Development or Future Software Development, as the case may be (the
"Warranty Period").
Notwithstanding anything contained in this Agreement to the contrary, ▇▇▇▇▇▇▇
shall not be liable for any correction of programming errors or non-conformity
of the Billing System and/or the Future Software Developments required because
of:
(a) any changes made to the Billing System and/or the Future Software
Developments which were not authorized by ▇▇▇▇▇▇▇ nor carried out under
the supervision and control of ▇▇▇▇▇▇▇; or
(b) any computer program created by Customer or any third pasty retained by
Customer, which computer program adversely affects the performance of the
Billing System and/or the Future Software Developments; or
(c) accident, neglect, misuse of the Billing System and/or the Future Software
Developments by Customer.
During the Warranty Period, ▇▇▇▇▇▇▇ shall, at its own cost, immediately correct
and remedy any Problem and any programming errors notified to it by Customer and
shall carry out modification to and/or correction of the Billing System and/or
any Future Software Developments, such that these will be able to provide the
facilities and functions set out in the applicable statement of work. If ▇▇▇▇▇▇▇
is unable, after reasonable best efforts, to correct any Problem with a Software
Development or Future Software Development under this warranty, Customer's sole
remedy shall be the refund of an amount not to exceed the actual payments
received by ▇▇▇▇▇▇▇ for the hourly fees relating to such non-conforming Software
Development or Future Software Development. This shall constitute Customer's
exclusive remedy for any such Problem.
23
26
Notification by Customer under the terms of this Section shall include a listing
of output and such data as ▇▇▇▇▇▇▇ may reasonably require in order to reproduce
the operating conditions in which the Problem, the programming error or
non-conformity was discovered. All work carried our by ▇▇▇▇▇▇▇ under this
warranty will be chargeable to Customer at ▇▇▇▇▇▇▇'▇ then-current hourly rate if
it is found that no Problem or programming error exists.
9.3 ▇▇▇▇▇▇▇ warrants that the Software Developments and Future Software
Developments developed under this Agreement will be designed to be used prior
to, during, and after the calendar year 2000 A.D., and without human
intervention will correctly recognize, calculate, process, sequence, store and
transmit Date Data without error or interruption, including leap years, and
including errors or interruptions from functions which may involve Date Data
from more than one century. The term "Date Data" shall mean any data or input
which includes an indication of or reference to date and that is stored
information and internal to functionality. Date calculations involving either a
single century or multiple centuries will neither cause an abnormal ending nor
generate incorrect or unexpected results. When sorting by date, all records will
be sorted in accurate sequence and when the date is used as a key, records will
be read and written in accurate sequence. As used in the previous sentence,
accurate sequence means, by way of example, that records will be read, written,
and sorted in ascending order so that the year 1999 is before the year 2000. The
Software Developments and Future Software Developments will calculate, process,
and display leap year information according to the following algorithm; (i) a
leap year will have twenty-nine (29) days in the month of February; and (ii) a
leap year occurs in all years divisible by 400 and all years evenly divisible by
4 and not evenly divisible by 100. ▇▇▇▇▇▇▇, however, makes no representation or
warranty nor takes any responsibility for errors or omissions caused by third
party systems, devices, interfaces or software, or for errors or omissions
caused by functional or technical requirements specified by Customer.
9.4 THE WARRANTIES CONTAINED IN THIS AGREEMENT ARE IN LIEU OF ANY OTHER
WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE OR NON-INFRINGEMENT, AND THOSE ARISING BY STATUTE OR OTHERWISE IN
LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE.
10. LIABILITY
10.1 ▇▇▇▇▇▇▇ is liable for the Software Developments and the Future Software
Developments performed under this Agreement. HOWEVER, IN ANY CASE ▇▇▇▇▇▇▇'▇
ENTIRE LIABILITY UNDER ANY PROVISION OF THIS AGREEMENT WITH RESPECT TO A
SOFTWARE DEVELOPMENT OR A FUTURE SOFTWARE DEVELOPMENT SHALL BE LIMITED TO THE
AGGREGATE AMOUNT OF HOURLY FEES (EXCLUDING REIMBURSED EXPENSES) PAID TO ▇▇▇▇▇▇▇
FOR SUCH SOFTWARE DEVELOPMENT OR FUTURE SOFTWARE DEVELOPMENT, AS THE CASE MAY
BE, IN ACCORDANCE WITH THIS AGREEMENT.
10.2 In no event shall ▇▇▇▇▇▇▇ be liable fur indirect damages (even if ▇▇▇▇▇▇▇
have been advised of the possibility of such loss) including, but not limited
to, lost business revenue, lost data, failure to realize expected profits or
savings or other commercial or economic loss of any kind.
24
27
11. GENERAL
11.1 Paragraph 2(c) (assignments and sublicenses) and 8(b) and (c)
(confidentiality) of the Software License Agreement shall also apply to this
Agreement.
11.2 This Agreement shall be governed by and construed under the laws of the
Commonwealth of Massachusetts, exclusive of its choice of law rules. This is an
integrated Agreement. It contains the full understanding of the parties and
supersedes all other understandings, agreements, representations, or
correspondence, written or oral, regarding its subject matter. This Agreement
may be amended, modified, or waived only by another writing signed by the
authorized representatives of both parties. Headings are for convenience; they
shall not be used to construe this Agreement. Any action against ▇▇▇▇▇▇▇ under
this Agreement or related to its subject matter must be brought within one year
after the cause of action accrues.
11.3 All notices shall be in writing and shall be sent by personal delivery, by
a reputable nationwide overnight courier service prepaid, or by facsimile with
confirmed answerback. Notices to Customer shall be sent to Customer's billing
address shown above, attention Senior Vice President Business Development, with
a copy to General Counsel at the same address. Notices to ▇▇▇▇▇▇▇ shall be sent
to the attention of the President, ▇▇▇▇▇▇▇ Systems, ▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Notices shall be effective upon delivery in the
case of personal delivery, on receipt in the case of facsimile, and one day
after it is sent via overnight couriers.
11.4 All disputes arising out of or relating to this Agreement shall be finally
settled by arbitration conducted in Boston, Massachusetts, U.S.A. under the
rules of commercial arbitration of the American Arbitration Association
("Rules"). Both parties shall bear equally the cost of the arbitration
(exclusive of legal fees and expenses, all of which each party shall bear
separately). All decisions of the arbitrator(s) shall be final and binding on
both parties and enforceable in any court of competent jurisdiction.
Notwithstanding the foregoing, in the event of breach by a party of its
obligations hereunder, the non-breaching party may seek injunctive or other
equitable relief in any court of competent jurisdiction.
11.5 ▇▇▇▇▇▇▇ employees shall be deemed not to be at any time employees or
servants of Customer and ▇▇▇▇▇▇▇ is and shall remain an independent contractor
for all purposes. Unless otherwise agreed to in a written agreement, ▇▇▇▇▇▇▇
does not undertake to perform any obligation of Customer, whether regulatory or
contractual, or to assume any responsibility for Customer's business or
operations.
11.6 Nothing in this Agreement shall be construed to constitute or create a
joint venture, partnership, or formal business organization of any kind and the
rights and obligations of each Party shall be only those expressly set forth
herein. Neither Party shall have authority to bind the other Party, and neither
Party assumes any liabilities of the other Party.
11.7 Neither Party shall be liable for any delay or failure to perform its
obligations, other than payment obligations, due to any case of "force majeure".
11.8 Each Party agrees not to hire their respective staff members assigned to
perform the services listed in this Agreement, without the prior and written
agreement of the other Party,
25
28
even if the request for hiring is initiated by the staff member her/himself.
This non-hiring covenant is valid for the period of the Project increased by a
period of one (1) year.
11.9 The Parties have requested that this Agreement and all communications and
documents relating hereto be expressed in the English language.
IN WITNESS WHEREOF Customer and ▇▇▇▇▇▇▇ have executed this Software Maintenance
Agreement under seal.
BIRCH TELECOM, INC. Accepted at ▇▇▇▇▇▇▇ Systems Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By:
------------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President Title: Senior Vice President
Date: June 9, 1998 Date:
26
29
even if the request for hiring is initiated by the staff member her/himself.
This non-hiring covenant is valid for the period of the Project increased by a
period of one (1) year.
11.9 The Parties have requested that this Agreement and all communications and
documents relating hereto be expressed in the English language.
IN WITNESS WHEREOF Customer and ▇▇▇▇▇▇▇ have executed this Software Maintenance
Agreement under seal.
BIRCH TELECOM, INC. Accepted at ▇▇▇▇▇▇▇ Systems Inc.
By: By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President Title: Senior Vice President
Date: Date:
26
30
APPENDIX 1: STATEMENT OF WORK
Specification Study: **** plus travel and living expenses (payment terms
are 30 days from completion of Study)
The Specification Study will enable our companies to fully define the BIRCH
TELECOM requirements and ▇▇▇▇▇▇▇ CBP AS/400 convergent billing solution. This
on-site Study and Operational Review will provide a report summarizing the
findings and recommendations regarding the functional scope of the project and
the standard capabilities of the System. This review will clearly define the
deliverables and potential modifications and/or customizations related to the
scope of the project. This Study will establish a clear definition of the
project to include the cost and time frames for the delivery of the component
pieces.
The Specification Study will result in a Statement of Work, complete with the
required hardware/software architecture, and a firm investment proposal for the
BIRCH TELECOM solution. It is anticipated that the Study would be completed
within one month from commencement. The start date is anticipated to be June 8,
1998. As discussed, we will require active participation from BIRCH TELECOM
within the period during which we are completing the Study.
The parties hereby agree that the Project Statement attached to this Agreement
as Appendix shall be the basis for the Statement of Work and that the not to
exceed price of **** set forth in Section 7.1 of this Agreement applies to the
functionality set forth in such Project Statement.
27
31
APPENDIX 2: CURRENT HOURLY RATES
TITLE DESCRIPTION HOURLY DAILY
Executive **** ****
Industry Consultant **** ****
Consulting Manager **** ****
Consultant - Project Leader **** ****
Consultant - Level IV **** ****
Consultant - Level III **** ****
Consultant - Level II **** ****
Consultant - Level I **** ****
Project Administrator **** ****
Daily rates based on an 8 hour day
28