1
EXHIBIT 10.02
SOFTWARE LICENSE AGREEMENT
This Software License Agreement (the "Agreement") is made and entered into as of
this 18th day of February, 2000 (the "Effective Date"), by and between Summus,
Ltd., a Delaware corporation ("Licensor"), and High Speed Net Solutions, Inc., a
Florida corporation ("Customer"), with reference to the following facts and
circumstances:
A. Licensor has developed certain software programs and anticipates developing
certain software programs and will promote licensing of such programs through
the distribution of materials substantially in the form as those attached to
this Agreement as Exhibit A.1 ("Description Materials"). In reliance on such
Description Materials, Customer desires to license such software.
B. Licensor and Customer envision a close working relationship with respect to
Licensor's software such that Customer anticipates regularly: (i) acting as a
beta-version user of Licensor's software; (ii) providing prospective licensees
for Licensor's software; and (iii) providing references for or demonstrations of
Licensor's software. Licensor desires to create an incentive for Customer to
participate in these activities and, as such, Customer desires that Licensor
share with Customer revenues received from third party users of Licensor's
software and pay Customer for certain agency activities. To effect these
incentives, Licensor and Customer have entered into a Revenue Sharing Agreement
simultaneously with executing this Agreement.
C. Licensor desires to grant certain software license rights to Customer in
return for certain fees and on the terms and conditions contained in this
Agreement.
NOW THEREFORE, based on the above premises and in consideration of the mutual
covenants and agreements contained herein, the parties agree as follows:
1. DEFINITIONS. As used herein, the following terms, when used in the
singular, plural, or possessive form shall have the respective meanings set
forth below:
1.1 "Designated Activities" shall mean operating the MaxxSystem, any of the
MaxxSystem functional components, or the Reader Software, either alone or in any
combination, to perform any of the activities described by Exhibit A.1 or the
functional equivalents thereof, for clients/customers of Customer or for
Customer's own benefit, including but not limited to, creating content for,
developing, sending, tracking, viewing, receiving, reading cataloging,
distributing and streaming Rich Media Messages or other digital content as may
be supported, and distributing Reader Software to clients/customers and members
of the public.
1.2 "Documentation" shall mean the complete set of operating manuals necessary
to enable Customer to properly use the Licensed Software. The initial
documentation to be provided by Licensor shall include a Users Manual and a
2
Reference Manual for each of the components of the Licensed Server Software and
Reader Software. Such manuals may be provided in electronic form as help files
or in other electronic format.
1.3 "Fees" shall mean the total of the following fees (all as defined either in
this Section 1.3 or below in the text of this Agreement, including Exhibits):
"License Fee," "Software Maintenance Fee," and "Revenue Based Fee."
1.4 "License Fees" shall have the meaning given in Section 3.1.
1.5 "Licensed Server Software" shall mean the Licensed Software other than the
Reader Software.
1.6 "Licensed Software" shall mean the Licensed Server Software and Reader
Software collectively, consisting of the first generally available version of
the MaxxSystem program, as more fully described on Exhibit A, in Object Code
form, and any released New Versions provided under this Agreement.
1.7 "New Versions" shall mean any versions of the Licensed Software that
Licensor releases after the Effective Date of this Agreement including (a) error
corrections, maintenance releases, and major and minor releases and products
that supersede the Licensed Software; (b) any migration aids for users migrating
from the prior version of the Licensed Software; and (c) any Documentation
related to either (a) or (b). A product shall be considered to supersede the
Licensed Software if (i) Licensor ceases actively marketing the Licensed
Software, (ii) persons inquiring about licensing the Licensed Software are
offered the new product instead, and (iii) the new product handles creation
and/or delivery of Rich Media Messages.
1.8 "Object Code" shall mean the code that can be executed directly or
indirectly by a computer's central processing unit, which may include without
limitation such things as compiled machine readable binary code, human readable
scripts, and interpreted code or other code that does not need to be compiled
before execution. Object Code shall not include code in human-readable form that
would normally be compiled before execution on a computer.
1.9 "Premier Partner" shall mean a customer, including Customer, with whom we
envision a close working relationship and with whom the Licensor desires to
create incentives to participate in certain activities to such as beta testing
or demonstration of the Licensed Software. The incentives may include certain
exclusive and non-exclusive marketing benefits or payments.
1.10 "Quarterly Period" shall mean each calendar quarter (i.e., a period of
three (3) consecutive calendar months commencing on January 1, April 1, July 1
or October 1 of each year) during the term of this Agreement, with the exception
of the first Quarterly Period, which shall commence on the Effective Date and
end on the last day of that calendar quarter. The last Quarterly Period shall
end on the date of expiration or termination of this Agreement, thereby possibly
comprising fewer than three (3) months.
3
1.11 "Reader Software" shall mean any version of any part or component of the
MaxxSystem program or a separate program designed to be used in conjunction with
MaxxSystem or inter-operate with MaxxSystem, in Object Code form and any
released New Versions and/or Software Updates, that is: (i) distributed or
intended to be distributed by the Licensed Server Software with a Rich Media
Messages or other digital content as may be supported; (ii) is downloaded or
sent from the Licensed Server Software to a remote computer or
internet-connected device for execution in connection with viewing or
interacting with a Rich Media Messages or other digital content as may be
supported; or (iii) installable or required to be installed on the recipient's
computer or internet-connected device to enable the recipient of the Rich Media
Messages to view Rich Media Content, including but not limited to a 'thin' or
'thick' client player, any self-extracting executable files with embedded Rich
Media Content, any plug-ins or applets, or any similar viewing technology.
1.12 "Related Agreements" shall mean agreements between Licensor and Customer
related to or incorporated by the MLA and agreements based on either Licensor or
Customer's rights and obligations under the MLA, including, but not limited to,
the Letter Agreement incorporated by the MLA and any agreements relating to or
arising from the Samsung opportunity.
1.13 "Revenue Based Fee" shall have the meaning given in Section 3.2 of this
Agreement.
1.14 "Rich Media Content" shall mean any visual or graphic or multi-media
content and user interaction metaphor beyond a plain ASCII text representation
of information, including but not limited to video, still images of any format
or type, audio, streaming content, compressed content, animation, and color
graphics, any of which may contain interactive controls, user response/selection
targets and hotspots, dialog and information display capabilities, voice
response capability, and similar user interaction features.
1.15 "Rich Media Message" shall mean electronic Rich Media Content delivery
transmitted in any manner and through any portion of the Internet or any
entities' internal network that delivers and presents Rich Media Content for the
intended recipient.
1.16 "Software Maintenance Agreement" shall mean the agreement for maintenance
of the Licensed Software entered into between Customer and Licensor concurrently
with this Agreement.
1.17 "Software Maintenance Fee" shall mean the Maintenance Fee payable under the
Software Maintenance Agreement.
1.18 "Source Code" shall mean the human-readable code that produces the compiled
machine readable form of Object Code.
1.19 "Use Level Percentage" shall mean ten percent (10%).
1.20 "Virus" shall mean any computer code intentionally designed to disrupt,
disable, harm, or otherwise impede in any manner, including aesthetical
disruptions or distortions, the operation of the computer program, or any other
associated software, firmware, hardware, or computer system (including local
area or wide-area networks), in a manner not intended by its creator(s).
4
1.21 "Volume of Use" shall mean unlimited use of the Licensed Software for the
Designated Activities
2. LICENSE.
2.1 LICENSED SERVER SOFTWARE. Subject to Customer fulfilling its
obligations hereunder, Licensor hereby grants to Customer a world-wide,
non-exclusive, irrevocable (subject to the termination provisions set forth
herein) license (1) to use the Licensed Server Software in Object Code form
only, and Documentation to perform the Designated Activities at the Volume of
Use; (2) to use the Licensed Server Software and the Documentation in connection
with backup and disaster recovery procedures in the event of destruction or
corruption of the Licensed Server Software or disasters or emergencies which
require Customer to initiate disaster recovery procedures; and (3) to make,
reproduce and internally distribute copies of the Licensed Server Software and
related Documentation, either electronically or otherwise, as reasonably
required to support Customer's use of the Licensed Server Software for backup
purposes. Customer shall not have the right or license to make any derivative
works (within the meaning of 17 U.S.C 101) incorporating or based on any of the
Licensed Server Software, or any portion thereof, except as may be necessary for
the use of the Licensed Server Software for its normal, intended use.
2.2 READER SOFTWARE LICENSE. Subject to the Customer fulfilling its
obligations hereunder, Licensor hereby grants to Customer a world-wide,
non-exclusive, non-transferable irrevocable license to (1) to use the Reader
Software, in Object Code form only, to perform the Designated Activities at the
Volume of Use; (2) to use the Reader Software and the Documentation in
connection with backup and disaster recovery procedures in the event of
destruction or corruption of the Reader Software or disasters or emergencies
which require Customer to initiate disaster recovery procedures; (3) to make,
reproduce and distribute to the public-at-large an unlimited number of copies of
the Reader Software and any related Documentation, either electronically or
otherwise, to the extent necessary to fully utilize the license rights granted
in (1) through (2); and (4) to authorize third party vendors to make, reproduce
and distribute to the public-at-large an unlimited number of copies of the
Reader Software and any related Documentation, either electronically or
otherwise, together with the products of such third party vendors. Customer
shall not have the right or license to make any derivative works (within the
meaning of 17 U.S.C 101) incorporating or based on any of the Reader Software,
or any portion thereof, except as may be necessary for the use of the Reader
Software for its normal, intended use.
2.3 NEW VERSIONS. New Versions will be provided to Customer under the
terms of the Software Maintenance Agreement. When provided to Customer under the
Software Maintenance Agreement, New Versions will be treated as Licensed
Software under this Agreement.
5
2.4 OUTSOURCING. Customer shall not have the right to sublicense to
third parties any or all of the license rights granted to Customer hereunder;
provided, however, that Customer may outsource to a third party performance of
Designated Activities for Customer under Customer's license.
2.5 SOFTWARE PLATFORM PORTABILITY. Customer shall have the right, under
the grant of license rights in this Article 2, to operate the Licensed Software
on any operating systems for which Licensor makes a generally available version
of the Licensed Software generally available to its customers. Customer shall
have the right to receive the Licensed Software version for each such operating
system. At Customer's request Licensor shall promptly deliver the Licensed
Software version for such operating systems to Customer.
2.6 READER SOFTWARE MODIFICATIONS. Upon request of Customer, Licensor
shall perform in prompt commercial fashion modifications of the Reader Software
requested by Customer in order to allow the Reader Software to function in
integrated fashion with the software products of a customer of Customer.
Customer shall pay Licensor's standard consulting fees for such service, subject
to the Most Favored Customer clause of this Agreement.
3. LICENSE FEE.
3.1 LICENSED SOFTWARE. In partial consideration of licenses granted
hereunder, Customer shall pay to Licensor a one- time license fee of One Million
Dollars ($1,000,000) at the Volume of Use (the "License Fee").
3.2 REVENUE BASED FEE. In addition to the License Fee, Customer shall
pay to Licensor an ongoing use fee (the "Revenue Based Fee") for the Licensed
Software in an amount equal to the greater of: (a) the gross revenues generated
by Customer with the Licensed Software multiplied by the Use Level Percentage;
or (b) the amount equal to Three Cents (3(cent)) multiplied by the number of
Rich Media Messages actually delivered to recipients. The Customer shall
reconcile accounts each Quarterly Period and shall pay the Revenue Based Fee
within one month following the end of the Quarterly Period. The Customer shall
have the right at its sole discretion to apply any Customer Credit amounts in
lieu of paying the Revenue Based Fee until any such Customer Credit as defined
in the Master Agreement amounts are exhausted.
4. DELIVERY.
4.1 DELIVERABLES; TIMETABLE. For each of the components of MaxxSystem,
as described in Exhibit A.1, on the "Release Dates" described in Exhibit A.3
Licensor shall deliver to Customer the Licensed Software and Documentation in a
form and with sufficient reliability to constitute a commercial release of the
Licensed Software ("Deliver" or "Delivery").
4.2 OBLIGATION AND RIGHT TO TEST. If before the Release Date Licensor
requests Customer to perform tests of the software in alpha version, and tests
of the software in beta version, Customer shall use its best efforts to perform
6
such tests, provided, however, Customer shall not be required to perform more
than one such test in a one (1) month period. Regardless of whether Licensor
requests Customer to perform such tests, Customer shall have the right to
perform one (1) test of a beta version of the Licensed Software before the
Release Date. Customer shall promptly notify Licensor in writing of the results
of any tests performed pursuant to this Section 4.2. During such "beta" test
period, Licensor shall dedicate Level III support resources to Customer;
4.3 DELIVERY DELAY. In the event that Licensor fails to Deliver each
component of the Licensed Software within 90 days of the date stipulated in
Exhibit A.3, , Licensor shall be deemed in material breach of this Agreement and
Customer shall have the option at its sole discretion to terminate this
Agreement.
5. MARKETING BENEFITS.
5.1 TIME TO MARKET. In consideration of the Customer being a Premier
Partner:
o Licensor shall provide the "beta" version of MaxxSystem, under
licensing instructions appropriate to beta testing, to
Customer for a period of not less than 30 days prior to
production (general) availability. During such "beta" test
period, Licensor shall dedicate Level III support resources to
Customer;
o Licensor shall use its commercially reasonable efforts to
cause all other licensees of the Licensed Software to be
limited as to the date upon which such licensees can publicly
announce their use of the Licensed Software. Licensor shall
further provide Customer with the right and opportunity to
publicly announce Customer's use of the Licensed Software,
such announcement being on or before a date two weeks in
advance of the date upon which Licensor allows such other
licensees to announce their use.
6. COMPLIANCE WITH LAWS. Licensor shall modify the Licensed Software on a
timely basis in the event that any change in the laws, rules, or
regulations reflected in any features of the Licensed Software make
such modification necessary and shall provide such modification to
Customer as a New Version.
7. TERMINATION OF MLA AND RELATED AGREEMENTS.
7.1 TERMINATION OF PRIOR AGREEMENTS. By this Agreement, Licensor and
Customer specifically terminate the MLA and the Related Agreements and all
obligations, rights and interests of the parties thereunder; provided, however,
that provisions related to confidentiality and limitation of liability shall
survive.
7
8. PROPRIETARY RIGHTS.
8.1 SCOPE. All right, title, and interest to the Licensed Software
shall remain with Licensor and Customer obtains only the license as specified in
Article 2 hereof.
8.2 LEGENDS. Customer shall not remove, deface, or otherwise obscure
any copyright, patent, trademark, service xxxx, or other proprietary legend
("Proprietary Legends") on either the Licensed Software or Documentation.
Furthermore, Customer shall include such Proprietary Legends in any
reproductions of either the Licensed Software or Documentation that Customer is
permitted to make. Customer's obligation under this Section 8.2 shall survive
the expiration or termination of this Agreement for any reason.
9. INDEMNIFICATION.
9.1 SCOPE. Licensor shall indemnify and hold harmless Customer, and its
directors, officers, employees, agents, successors, assigns, licensees and
customers against any and all claims, penalties, losses, liabilities, judgments,
settlements, awards, damages and costs (including but not limited to reasonable
legal fees, expert witness fees and expenses) arising out of or related to any
claim of patent, trademark or copyright infringement and claims of unfair
competition or trade secret violation, and any other claim arising out of the
sale, possessions or use of the Licensed Software (collectively "Claims") and
will reimburse Customer from time to time for any reasonable legal fees, expert
witness fees or other expenses (including the reasonable value of the services
of in-house counsel) reasonably incurred by Customer in connection with
investigating any such action or Claim as such expenses are incurred.
Customer shall indemnify and hold harmless Licensor, and its directors,
officers, employees, agents, successors, assignees, licensees and customers
against any and all claims, penalties, losses, liabilities, judgements,
settlements, awards, damages and costs (including but not limited to reasonable
legal fees, experts witness fees and expenses) arising out of or related to its
use of the Licensed Software, except for Claims covered by the preceding
paragraph, unless such Claims are Excepted Claims (as defined below). Customer
expressly indemnifies Licensor for any and all claims, penalties, losses,
liabilities, judgements, settlements, awards, damages, and costs (including but
not limited to reasonable legal fees, experts witness fees and expenses) arising
our of or related to any claim of patent, trademark or copyright infringement
and claims of unfair competition or trade secret violation, and any other claim
arising out of the development, sale, possession, use or distribution of
MaxxNote or MaxxAd content, Customer's web site content and the like. Customer
will reimburse Licensor from time to time for any legal fees, expert witness
fees or other expenses (including the reasonable value of the services of
in-house counsel) reasonably incurred by Licensor in connection with
investigating any such action or claim as such expenses are incurred.
9.2 ADDITIONAL INDEMNITY TERMS. Moreover, Licensor shall defend, at its
expense, any action or proceeding brought against Customer based upon a Claim,
including the payment of reasonable attorney's fees, expert witness fees and
costs of suit incurred thereby. In defending or settling any such Claim,
8
Licensor may elect to (i) obtain the right of continued use of Licensed
Software, or part thereof, which is alleged to be infringing, or (ii) replace or
modify the Licensed Software, or part thereof, so as to avoid such Claim and
thereupon Customer shall cease to use the version of the Licensed Software, or
part thereof, that was replaced or modified. Licensor will not be obligated to
indemnify, defend or settle any Claim resulting from or related to any
additions, modifications, or changes to the Licensed Software made by Customer,
its affiliates, successors or assigns, or resulting from the use of the Licensed
Software with any third party materials (collectively, the "Excepted Claims").
Licensor shall have the option to control such defense with counsel of its
choice, but shall not settle any such Claim without the consent of Customer,
which shall not be unreasonably withheld, unless such settlements involve only
the payment of money damages for which Customer is fully indemnified. Customer
shall provide reasonable cooperation, at Licensor's expense, to Licensor with
respect thereto. Customer may participate in such defense at its own expense
subject at all times to Licensor's right to control the defense of the
proceeding.
9.3 FAILURE OF INDEMNIFICATION PROVISIONS. If for any reason the
foregoing indemnification is unavailable to Customer or insufficient to hold it
harmless, then Licensor shall reimburse Customer for all amounts paid or payable
by Customer as a result of such Claims, which shall include, for example, the
costs of defending against any Claims because of Licensor's failure to provide
the defense specified in Section 9.2 above.
9.4 DUTIES. Each party's right to indemnification under Sections 9.1
and 9.2 above is conditioned upon the indemnified party (i) promptly notifying
the indemnifying party in writing of any Claim, (ii) providing the indemnifying
party with all reasonable assistance for the defense or settlement of such
Claims, (iii) with respect to Claims, Customer granting to Licensor reasonable
authority and control for the defense or settlement of such Claims, and (iv)
each party fully observing all material terms and conditions of this Agreement.
9.5 WORK AROUND. With respect to a Claim, if a final injunction is
obtained against Customer, Licensor will, at Licensor's option and expense,
either (i) procure for Customer the right to continue using the Licensed
Software or (ii) replace or modify the infringing portion of the Licensed
Software so that it becomes non-infringing yet functionally equivalent, or, if
the foregoing options are not available without undue expense, or (iii) refund
all monies paid by Customer to Licensor with respect to that portion of the
Designated Activities affected by such injunction under this Agreement; provided
that any such procurement, modification or refund by Licensor will not relieve
it of any other liability under this Agreement.
10. WARRANTIES.
10.1 TITLE. Licensor represents and warrants that it has full title to
and ownership of the Licensed Software, Reader Software, and Documentation and
all intellectual property rights embodied in or used in connection therewith,
free and clear of liens (except those that may be established by this
Agreement), claims and encumbrances, and that it has full power and authority to
grant the licenses in Article 2 above.
9
10.2 CONFORMITY TO REPRESENTATIONS. Licensor represents and warrants
that the Licensed Software is in material compliance with all specifications and
all other statements or claims found in the Description Materials of Licensor
given in Exhibit A.1, and found in the Documentation. The Documentation fully
describes the proper procedure for using the Licensed Software and is
comprehensive enough to enable a person of average intelligence to operate the
Licensed Software in an efficient manner.
10.3 WARRANTY. Licensor represents and warrants that the Licensed
Software shall operate and function in material compliance with the
Documentation. Notwithstanding the foregoing, Licensor makes no warranty that
all errors have been or can be eliminated from the Licensed Software.
10.4 PHYSICAL MEDIA. Licensor represents and warrants each copy of the
Licensed Software, including New Versions, is and will be free from physical
defects in the media that tangibly embodies the Licensed Software for a period
of ninety (90) days after delivery.
10.5 VIRUS FREE; NO DISABLING CODE. Licensor hereby represents,
warrants and covenants that the Licensed Software delivered under this Agreement
shall contain no Viruses. Licensor hereby represents, warrants and covenants
that the Licensed Software does not and will not contain any computer code that
would disable the Licensed Software or impair in any way its operation based on
the elapsing of a period of time, exceeding an authorized number of copies,
advancement to a particular date or other numeral, or other similar self-
destruct mechanisms (sometimes referred to as "time bombs", "time locks", or
"drop dead" devices) or that would permit Licensor to access the Licensed
Software to cause such disablement or impairment (sometimes referred to as a
"trap door" device). Licensor agrees that in the event of a breach or alleged
breach of this Section 10.5 that Customer shall not have an adequate remedy at
law, including monetary damages, and that Customer shall consequently be
entitled to seek a temporary restraining order, injunction, or other form of
equitable relief against the continuance of such breach, in addition to any and
all remedies to which Licensor shall be entitled.
10.6 MOST FAVORED CUSTOMER. Licensor represents and warrants that,
taken in the aggregate, all prices, charges, benefits, credits, warranties and
terms granted to Customer pursuant to this Agreement are comparable to, or more
favorable to, Customer than the prices, charges, benefits, credits, warranties
and terms in the aggregate that Licensor has heretofore offered to any person or
entity for the Licensed Software, maintenance for the Licensed Software, and
Documentation covered by this Agreement. If at any time during this Agreement,
Licensor shall contract with any other person or entity for (a) license fees for
service bureau use of Licensed Software; (b) maintenance fees for maintenance of
licensed software; (c) warranty and/or indemnity terms; or (d) prices, charges,
benefits, warranties or other terms taken in the aggregate; that are more
favorable to such person or entity than the corresponding provisions of this
Agreement or the Software Maintenance Agreement, Licensor shall notify Customer
of such more favorable provisions and Customer, at its option, may require that
such more favorable provisions be available to Customer under this Agreement or
the Software Maintenance Agreement.
10
10.7 NO OTHER WARRANTIES. OTHER THAN AS PROVIDED IN THIS ARTICLE 10,
LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE LICENSED SOFTWARE, SOFTWARE UPGRADES, AND THE
DOCUMENTATION. 11. LIMITATION OF LIABILITY.
11.1 EXCLUDED LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY, ITS AFFILIATES, OR ANY THIRD PARTY BENEFICIARY, FOR CONSEQUENTIAL DAMAGES
OF ANY KIND (INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS INTERRUPTION, OR LOSS OF BUSINESS INFORMATION), REGARDLESS OF WHETHER
THE PARTY LIABLE OR ALLEGEDLY LIABLE WAS ADVISED, HAD REASON TO KNOW, OR IN FACT
KNEW OF THE POSSIBILITY THEREOF.
12. ESCROW AGREEMENT.
12.1 FORM OF ESCROW AGREEMENT. The parties hereto will promptly upon
the execution of this Agreement enter into an escrow agreement in a form
substantially similar to the one attached to this Agreement as Exhibit A.4
("Escrow Agreement") with Fort Xxxx Escrow Services as an escrow agent.
13. CONFIDENTIALITY. This Article 13 sets forth the procedures by which
information regarded as confidential by one party hereto (a "Disclosing Party")
may be disclosed to the other party hereto (the "Receiving Party").
13.1 GENERAL REQUIREMENTS AND EXCLUSIONS. During the term of this
Agreement and at all times thereafter, the parties will not, except as permitted
by the terms of this Agreements, disclose or use, either for itself or for the
benefit of any third party (whether in competition with Licensor of Customer or
otherwise), any confidential information of the other party or its business or
affairs, nor will any party assist any person or entity other than the
Disclosing Party to secure any benefit from such confidential information. Any
oral, written, graphic, or electronically transmitted information not generally
available to the public shall be construed as confidential for purposes of this
Agreement, which information shall include, without limitation, information
relating to a Disclosing Party's products, processes, techniques, technology,
formulas, research data, passwords, passcodes, user identification numbers,
e-mail addresses, programming methods, know-how, trade secrets, customers and
suppliers, information relating to sales and profits, other financial data, and
the terms and conditions of this Agreements. All such information shall be
collectively referred to herein as "Confidential Information." The provisions of
this paragraph, however, shall not prevent the Receiving Party from use or
disclosure of information (i) as necessary in the ordinary course of such
party's performance under this Agreement, (ii) that is in the public domain
(other than information in the public domain as a result of a violation of this
Agreement by the Receiving Party), (iii) that the Receiving Party can
11
demonstrate that it acquired outside of its affiliation with the disclosing
Party from a third party in rightful possession of such information and who was
not prohibited from disclosing such information, or (iv) disclosure of which is
required by law or court order. The parties acknowledge that the Object Code of
generally available versions of the Licensed Software are not required to be
treated as Confidential Information, but that Object Code of versions not
generally available to the public of Licensed Software will be Confidential
Information. In the event that the Receiving Party is requested or required (by
oral question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose Confidential Information, the Receiving Party will notify the
Disclosing Party promptly of such request or requirement so that the Disclosing
Party may seek an appropriate protective order, and if, in the absence of a
protective order, the Receiving Party is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand liable for
contempt, the Receiving Party may disclose Confidential Information to such
tribunal; provided, however, that the Receiving Party shall use its best efforts
to obtain an order or other assurance that confidential treatment will be
accorded to such portion of the Confidential Information required to be
disclosed. Customer shall be entitled to file this Agreement as an exhibit to
one or more filings with the SEC, as recommended by its counsel, in which case
Customer shall consult with Licensor concerning the redaction of terms of this
Agreement under a confidentiality request associated with such filing, but the
implementation of any such redaction shall be at the SEC's discretion. The
obligation of confidentiality stated above shall survive termination of this
Agreement.
13.2 OUTSOURCERS. Notwithstanding Section 13.1 above, Customer shall
have the right to discuss the scope of the license granted by Licensor under
this Agreement and the maintenance obligations of Licensor under the Software
Maintenance Agreement with any third party that potentially may perform
information processing services for Customer.
13.3 NO UNAUTHORIZED COPYING. Except as may be otherwise permitted by
this Agreement, the Receiving Party shall not copy, duplicate, reverse engineer,
reverse compile, disassemble, record, or otherwise reproduce any part of the
Disclosing Party's Confidential Information or any of the Licensed Software, nor
attempt to do any of the foregoing, without the prior written consent of the
Disclosing Party. Any tangible embodiments of the Disclosing Party's
Confidential Information that may be generated by a Receiving Party, either
pursuant to or in violation of this Agreement, will be deemed to the sole
property of the Disclosing Party and fully subject to the obligation of
confidence set forth in this Article 13.
13.4 NO REMOVAL OF PROPRIETARY LEGENDS. No Receiving Party shall
remove, obscure, or deface any proprietary legend relating to the Disclosing
Party's rights, on or from any tangible embodiment of any of the Disclosing
Party's Confidential Information, without the Disclosing Party's prior written
consent.
13.5 REPORTS OF THIRD-PARTY MISAPPROPRIATION. A Receiving Party shall
immediately report to the Disclosing Party any attempt by any third party of
which the Receiving Party has knowledge to use or disclose any of the Disclosing
Party's Confidential Information without authorization from the Disclosing
Party.
12
13.6 POST-TERMINATION PROCEDURES. Upon any termination of the Receiving
Party's right to possess and/or use Confidential Information through either
termination or expiration of this Agreement, the Receiving Party shall turn over
to the Disclosing Party (or, if agreed by the Disclosing Party, destroy) any
disks, tapes, Documentation, drawings, blueprints, notes, memoranda,
specifications, devices, documents, or any other tangible embodiments of any
Confidential Information of the Disclosing Party, except for Source Code
available to Customer under the terms of the Escrow Agreement described in
Section 12.
14. TERM AND TERMINATION.
14.1 TERM. This Agreement shall become effective as of the Effective
Date hereof and shall continue in force until the sixth (6th) anniversary of the
Effective Date, unless earlier terminated in accordance with this Article 14.
After this initial term, this Agreement shall be automatically renewed for
additional one (1) year periods unless thirty (30) days prior to the expiration
of this Agreement, either party provides written notice to the other party of
its intent to terminate this Agreement.
14.2 DEFAULT. Subject to the dispute resolution procedures set forth in
Exhibit A.5, the non-defaulting party shall be entitled to terminate this
Agreement at any time prior to the expiration of its term upon written notice to
the defaulting party if the defaulting party breaches any material obligation
hereunder, which breach continues or remains uncured for a period of sixty (60)
days after receipt of written notice from the non-defaulting party, unless such
breach cannot by its nature be cured, in which event the defaulting party shall
be deemed in default hereof upon the occurrence of such breach. Notwithstanding
the foregoing, if Customer shall be in breach of its obligation to make any
payment owing to Licensor hereunder, Licensor may terminate this Agreement upon
ten (10) days prior written notice to Customer. Any such termination shall not
relieve Customer of any such obligation to pay.
14.3 FAILURE TO DELIVER. Customer shall be entitled to terminate this
Agreement in the event Licensor has not Delivered the Licensed Software within
sixty (60) days after the date specified in this Agreement.
14.4 EFFECT OF TERMINATION. Upon the expiration or termination, for any
reasons, of this Agreement, the license and rights granted hereunder shall
immediately terminate as of the effective date of such expiration or
termination. Survival of any provisions of this Agreement shall be set forth in
Section 17.8 hereof.
15. EXPORT CONTROLS. Customer shall cooperate with Licensor as reasonably
requested and at Licensor's expense to permit Licensor to comply with the laws
and administrative regulations of the United States controlling the export of
commodities and technical data ("Export Laws"). Licensor shall prepare
13
reasonable instructions for its licensees concerning actions licensees of the
Licensed Software should take to comply with all Export Laws prior to exporting
the Licensed Software, whether by remote access or otherwise, to a destination
outside the United States. Customer shall comply with Licensor's reasonable
instructions concerning such Export Laws. Notwithstanding any other provision of
this Agreement, Customer agrees not to export, directly or indirectly, any
United States source technical data acquired from Licensor or any products
utilizing such data to any countries outside of the United States, if such
export would be in violation of the United States Export Control Laws or
Regulations then in effect.
16. SALES TAXES; SHIPPING; RISK OF LOSS. In addition to all other amounts
due to Licensor hereunder, Customer shall pay to or reimburse Licensor for all
federal, state, local, or other taxes (exclusive of income, business privilege,
or similar tax) including, but not limited to, sales, use, value added, lease,
or similar taxes or assessments, based on the License Fee(s) or other charges
payable hereunder, the Licensed Software's use, or services performed hereunder.
Customer shall have the right to contest the imposition of any such taxes or
assessments and Licensor shall provide Customer with reasonable cooperation in
contesting such taxes or assessments. Licensor shall, however, pay for all
shipping or transportation costs for delivery of all Licensed Software and all
copies of the Documentation purchased by Customer. Prior to Delivery of the
Licensed Software, Licensor and its insurers shall accept responsibility for
loss or damage.
17. GENERAL PROVISIONS.
17.1 CONSTRUCTION AND VALIDITY; DISPUTE RESOLUTION. This Agreement
shall be construed and enforced in accordance with the laws of the State of
North Carolina (including its Uniform Commercial Code), but without giving
effect to its laws or rules relating to conflicts of laws or to the United
Nations Convention on Contracts for the International Sale of Goods. In the
event of any conflict or inconsistency between the provisions of this Agreement
and the provisions of any Exhibit annexed hereto or any document referred to in
this Agreement or in any Exhibit hereto, the provisions of this Agreement shall
prevail and govern its interpretation and construction. In the event of any
dispute or controversy arising under or in connection with this Agreement, the
dispute resolution procedures set forth in Exhibit A.5 shall be followed.
Pending resolution of any such dispute or controversy, both parties will
continue their performance under this Agreement including but not limited to the
payment of all amounts due to the other party that are not in dispute (provided
that Customer may make such payments under protest, reserving any rights it may
have to seek reimbursement from Licensor).
17.2 ATTORNEYS' FEES. In the event of any dispute, controversy,
litigation or other proceedings (including proceedings in bankruptcy) concerning
or related to this Agreement, the prevailing party shall be entitled to
reimbursement of all of its costs, including reasonable attorney and expert
witnesses fees and costs (including the reasonable value of the services of
in-house counsel), and court or arbitration fees and costs.
17.3 VENUE. Any dispute or controversy arising under or in connection
with this Agreement shall be settled in Wake County, North Carolina. The parties
hereby generally submit to the in personam jurisdiction of the Superior Court of
the State of North Carolina and the Federal District Court for the Eastern
District of North Carolina.
14
17.4 NO JOINT VENTURE. Nothing contained in this Agreement shall be
construed as creating a joint venture, partnership or employment relationship
among the parties hereto nor shall any party have the right, power or authority
to create any obligation or duty, express or implied, on behalf of any other
party.
17.5 ASSIGNMENT. Neither party hereto shall assign any of its rights
under this Agreement nor delegate its duties hereunder to another person or
legal entity without the prior written consent of the other party, which consent
shall not be unreasonably withheld. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their respective trustees, successors,
permitted assigns and legal representatives.
17.6 NON-WAIVER. A failure of any party hereto to exercise any right
given to it hereunder, or to insist upon strict compliance by another party of
any obligation hereunder, shall not constitute a waiver of the first party's
right to exercise such a right, or to exact compliance with the terms hereof.
Moreover, waiver by any party of a particular default by another party shall not
be deemed a continuing waiver so as to impair the aggrieved party's rights in
respect to any subsequent default of the same or a different nature.
17.7 CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used in this Agreement are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
17.8 SURVIVAL. Any terms or conditions of this Agreement which by their
express terms extend beyond termination or expiration of this Agreement or which
by their nature should so extend shall survive and continue in full force and
effect after any termination or expiration of this Agreement. Without limiting
the generality of the foregoing, the following articles and sections shall
survive this Agreement: 2.2, 7, 8, 9, 10.1, 10.5, 10.7, 11, 13, 15, and 17.
17.9 AUTHORIZATION. Customer and Licensor represent that all necessary
corporate proceedings have been taken by each party to authorize the
transactions contemplated by this Agreement and that this Agreement has been
executed by a duly-authorized representative of each party and upon such
execution shall constitute a valid and binding Agreement.
17.10 EXHIBITS INCORPORATED. All Exhibits referenced in this Agreement
are hereby incorporated into this Agreement by this reference and made part of
this Agreement.
17.11 NOTICES. All notices or other communications that shall or may be
given pursuant to this Agreement, shall be in writing, in English, shall be sent
by certified or registered air mail with postage prepaid, return receipt
requested, by facsimile, telex or cable communication, or by hand delivery. Such
communications shall be deemed given and received upon confirmation of receipt,
if sent by facsimile, telex, or cable communication; or upon delivery if hand
delivered; or upon receipt of mailing, if sent by certified or registered mail,
and shall be addressed to the parties to such addresses as the parties may
designate in writing from time to time.
15
17.12 INVALIDITY. Should any of the non-material provisions of this
Agreement, or portions thereof, be found invalid by any court of competent
jurisdiction, the remainder of this Agreement shall nonetheless remain in full
force and effect.
17.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17.14 ENTIRE AGREEMENT. This Agreement and the Revenue Sharing
Agreement contain the full understanding of the parties and supersedes all prior
or contemporaneous agreements and understandings, written or oral, between the
parties with respect to the subject matter hereof; and there are no
representations, warranties, agreements or understandings other than those
expressly contained herein. No alteration, modification, variation or waiver of
this Agreement, or any of the provisions hereof shall be effective unless
executed by both parties in writing.
(The remainder of this page is left intentionally blank.)
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the dates indicated below.
SUMMUS, LTD. ("LICENSOR") HIGH SPEED NET SOLUTIONS, INC. ("CUSTOMER")
By: /s/ Xx. Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxx
(Signature) (Signature)
Date: March 13, 2000 Date: February 18, 2000
Name: Xx. Xxxxx Xxxxxxx Name: Xxxxxx X. Xxx
Title: CEO Title: Acting President and CEO,
Executive Vice President
17
EXHIBIT A.1
LICENSOR'S DESCRIPTION MATERIALS
MAXXSYSTEM SUMMARY
The Summus Ltd. online advertising microcast media product suite,
MaxxSystem, provides digital content management solutions for targeted
media distribution. The product suite establishes an easily integrated
infrastructure to increase the effectiveness of digital advertising,
direct marketing, campaigns and content distribution. While these
products showcase the benefits of faster wavelet technology, they also
integrate well with existing media compression, streaming and
manipulation tools in the marketplace. In addition, other forms of
media such as flash, animations, and audio content will be fully
integrated into the product suite over time.
These products are based on a `permission marketing' approach.
Customers opt in to participate and are encouraged to do so because
they have self-solicited interest in the content provided. The user
experience is enhanced through faster downloads and adaptive
transmission of media to the user's environment. All media is
distributed through a single player, regardless of media type. The
player can be customized (`re-skinned') to meet the needs of the
client.
The MaxxSystem product suite version 1.0 will have five components.
Refer to the diagram below for more information:
1. MAXXNOTE Version 2.5 - this is the currently
available Summus video e-mail software. MaxxNote
allows the user to import, create and compress
content, bundle a player, then e-mail it via a MAPI
compliant software program to distribution lists.
MaxxNote Version 2.5 is available for Windows
95/98/NT
2. The MAXXAD itself - this will be the advertisement
that is built and sent to an end user via e-mail.
MAXXADS are targeted e-mails that encapsulate rich
media (images, video, slide shows, text) with
electronic commerce capabilities, web site referrals
and campaign effectiveness measurement collection. A
maxxAd is rendered directly in an e-mail, therefore
no executable (.exe) files are sent. The MaxxAd
contains content and code streamed to the client on
demand. MaxxAd Version 1.0 will be available for
Windows 95/98/NT.
3. MAXXSHOW Version 1.0 is a completely integrated media
presentation, designed to be launched from a web
site. It encapsulates rich media (images, video,
slide shows, text) with electronic commerce
capabilities, web site referrals and e-commerce sales
effectiveness measurement collection. MaxxShow is
rendered directly from product selection on a web
page, delivered via caching (release 1) and streaming
based on bandwidth (release 2). MaxxShow is available
for the Windows NT/95/98 platforms with support for
Internet Explorer 4.0, Netscape 4.05 and AOL 4.0
browsers and above. Support for the Macintosh
platform is planned for late 2Q00.
18
4. The MAXXSERVER infrastructure - MaxxServer will
stream and cache JAVA-code and media content to
MaxxAd. The server will collect and process
measurement information, handle opt-in and opt-outs,
integrate with existing online advertising tools and
process e-commerce transactions and links to web
sites. Additionally, the MaxxServer infrastructure
may handle forwarding of MaxxAdvertisements to ensure
measurement tracking for forwarded MaxxAds is counted
and measured. As needed, advertisements will be
cached for faster rendering and distribution of
content.
5. The MAXXORCHESTRATOR product will allow the content
creators to format existing content into MaxxAds,
allowing them to combine text, images, slide shows
and video into a compelling advertisement utilizing
the benefits of Summus wavelet technology or
inserting banners and flash as required. It will
allow the user to test the MaxxAd and request
distribution through an e-mail list server.
MaxxOrchestrator Version 1.0 will be available for
Windows 98/NT
The MaxxSystem also includes related Reader Software to the extent not
included above.
19
EXHIBIT A.2
VOLUME-BASED PRICING STRUCTURE FOR THE LICENSED SOFTWARE
SERVICE BUREAU USE
LICENSE TERRITORY - WORLDWIDE
-----------------------------------------------------------------------------------------------------------------
VOLUME OF USE LICENSE FEE USE LEVEL PERCENTAGE
(Rich Media Messages) (one-time licensing payment) (multiply by gross revenue)
------------------------------------------ ----------------------------------------------------------------------
the right to deliver an unlimited number $1,000,000 10.0%
per month
-----------------------------------------------------------------------------------------------------------------
Any licensee of the License Software for Service Bureau use shall pay the
License Fee to Licensor to initially gain the rights to use the Licensed
Software, and shall also pay an ongoing Revenue Based Fee to the Licensor, which
shall be the greater of: (a) the gross revenues generated by the Licensee with
the Licensed Software multiplied by the Use Level Percentage; or (b) the amount
equal to Three Cents ($.03) multiplied by the number of Rich Media Messages
actually delivered to recipients.
20
EXHIBIT A.3
DELIVERY SCHEDULE
Product Delivery
1. MaxxNote Version 2.5 Upon the execution of this agreement
2. MaxxAd Version 1.0 September 1, 2000
3. MaxxServer Version 1.0 July 1, 2000
4. MaxxOrchestrator Version 1.0 September 1, 2000
5. MaxxShow Version 1.0 July 1, 2000
21
EXHIBIT A.4
ESCROW AGREEMENT
22
EXHIBIT A.5
DISPUTE RESOLUTION PROCEDURES
1. With respect to any dispute or disagreement between the parties arising out
of this Agreement other than a claim for rescission of the Agreement (a
"Disputed Matter"), the following internal mediation procedures shall be
followed:
(a) Either party shall have the right to submit a Disputed Matter to
Licensor's Chief Operating Officer and Customer's Chief Operating Officer or
such other senior executives as may be mutually agreed upon by the parties from
time to time. Such submission shall be delivered to such executives for both
parties in writing with a reasonably detailed explanation of the nature of the
Disputed Matter and its impact on the obligations under the Agreement. If such
executives do not agree upon a decision within fifteen (15) business days after
submission of the Disputed Matter to them by the party submitting the Disputed
Matter, then
(b) The Disputed Matter may be escalated by either party by submitting
it to Licensor's Chief Executive Officer and Customer's Chief Executive Officer
or such other senior executives as may be mutually agreed upon by the parties
from time to time. If such senior executives do not agree upon a decision within
ten (10) business days after submission of the Disputed Matter to them, then
(c) either party may initiate the binding arbitration procedures set
forth below.
ARBITRATION PROVISIONS
1. Rules; Jurisdiction. Any Disputed Matter shall be settled by final and
binding arbitration in the County of Wake, and, except as herein specifically
stated, in accordance with the commercial arbitration rules of the American
Arbitration Association ("AAA Rules") then in effect, subject to the provisions
of the United States Arbitration Act, 9 U.S.C. ss. 1 et seq. ("Title 9"). To the
extent the AAA Rules conflict with, or are supplemented by, the provisions of
Title 9, the provisions of Title 9 shall govern and be applicable. However, in
all events these Arbitration Provisions shall govern over any conflicting rules
which may now or hereafter be contained in either the AAA Rules or Title 9. Any
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction of the subject matter thereof. The arbitrators shall have
the authority to grant any equitable and legal remedies that would be available
in any judicial proceeding instituted to resolve a disputed matter. The parties
hereby submit to the in personam jurisdiction of the Superior Court of the State
of North Carolina and the Federal District Court for the Eastern District of
North Carolina for purposes of confirming any such award and entering judgment
thereon.
2. Compensation of Arbitrators. Any such arbitration shall be conducted before a
panel of three arbitrators who shall be compensated for their services at a rate
to be determined by the parties, or lacking such determination by the American
23
Arbitration Association, but based upon normal and reasonable hourly or daily
consulting rates for the neutral arbitrator in the event the parties are not
able to agree upon his or her rate of compensation.
3. Selection of Arbitrators. Within five (5) business days of notice by a party
seeking arbitration under this provision, the party requesting arbitration shall
appoint one person as an arbitrator and within fifteen (15) business days
thereafter the other party shall appoint the second arbitrator. Within twenty
(20) business days after the appointment of the second arbitrator, the two
arbitrators so chosen shall mutually agree upon the selection of the third
impartial and neutral arbitrator, who must be a partner or principal of a
nationally recognized firm of independent certified public accountants from the
management advisory services department (or comparable department or group) of
such firm; provided, however, that such firm cannot be the firm of certified
public accountants then auditing the books and records of either party or
providing management or advisory services for either party.
In the event the chosen arbitrators cannot agree upon the selection of the third
arbitrator, the AAA Rules for the selection of such an arbitrator shall be
followed, except that the selection shall be from such departments or groups and
certified accounting firms as are described in the immediately preceding
paragraph. If the other party shall fail to designate the second arbitrator, the
sole arbitrator appointed shall have the power to appoint, in his or her sole
discretion, both the second and third arbitrators. If a party fails to appoint a
successor to its appointed arbitrator within ten (10) business days of the
death, resignation or other incapacity of such arbitrator, the remaining two
arbitrators shall appoint such successor. The majority decision of the
arbitrators will be final and conclusive upon the parties hereto.
4. Payment of Costs. Each party hereby agrees to pay one-half (1/2) of the
compensation to be paid to the arbitrators in any such arbitration and one-half
(1/2) of the costs of transcripts and other expenses of the arbitration
proceedings; provided, however, that the prevailing party in any arbitration
shall be entitled to an award of attorneys' fees and costs, arbitrators' fees
and costs, fees and costs of expert witnesses and all other costs of arbitration
(including the reasonable value of the services of in-house counsel) to be paid
by the losing party.
5. Evidence and Discovery. The arbitrators shall be instructed to conduct the
arbitration in as expeditious a manner as reasonably possibly, consistent with
the parties' intention to have a full and fair hearing on the merits of the
dispute. Each party agrees to supply the arbitrators in accordance with a
timetable to be established by the arbitrators such materials as the arbitrators
may reasonably require in order to render a decision, including those requested
by either party which the arbitrators determine are appropriate to consider, but
subject to appropriate claims of privilege. Each party shall supply to the other
party hereto copies of any and all materials which are supplied to the
arbitrators concurrently with delivery of such materials to the arbitrators.
Upon the written request of either party, the arbitrators shall conduct a
hearing at which representatives of both parties shall have the right to be
present and to make oral presentations to the arbitrators. Each party shall
supply to the other party at least twenty (20) business days prior to the
commencement of any arbitration proceeding copies of any and all documents which
such party intends to introduce or upon which such party intends to rely in
connection with such proceeding, as well as a list of any and all witnesses
whose testimony such party intends to introduce in connection with such
proceeding. Additional documents or witnesses may be introduced only if the
24
arbitrators determine that good cause has been shown. Deposing of witnesses in
advance of such proceeding shall be permitted to the extent determined by the
arbitrators. Each party shall also have the right to submit written briefs to
the arbitrators in accordance with a timetable to be established by the
arbitrators. To the extent either party maintains in good faith that any
documents submitted or testimony introduced in connection with such arbitration
contain confidential information or trade secrets, the parties shall negotiate
in good faith in an effort to reach agreement regarding terms and conditions for
keeping such materials and testimony confidential. If the parties are unable to
agree upon such terms, the arbitrators shall have the right to impose
appropriate restrictions to maintain the confidentiality of any confidential
information or trade secrets in connection with the arbitration.
6. Burden of Proof. For any claim submitted to arbitration, the burden of proof
shall be as it would be if the claim were litigated in a judicial proceeding.
All testimony of witnesses shall be taken under oath and shall be subject to the
Federal Rules of Evidence.
7. Judgment. Upon the conclusion of any arbitration proceedings, hereunder, the
arbitrators shall render findings of fact and conclusions of law and a written
opinion setting forth the basis and reasons for any decision reached by them and
shall deliver such documents to each party to the Agreement along with a signed
copy of the award.
8. Terms of Arbitration. The arbitrators chosen in accordance with these
provisions shall not have the power to alter, amend or otherwise affect the
terms of these arbitration provisions or the provisions of the Agreement. 9.
Exclusive Remedy. Except as specifically provided in this exhibit or in the
agreement to which it is attached, arbitration shall be the sole and exclusive
remedy of the parties for any disputed matter arising out of such agreement.
9. Exclusive Remedy. Except as specifically provided in this exhibit or in the
agreement to which it is attached, arbitration shall be the sole and exclusive
remedy of the parties for any disputed matter arising out of such agreement.
