EXHIBIT 10.11
IXplus LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement"), dated as of April 23, 1991, (the
"Effective Date"), is by and between ELECTRONIC DATA SYSTEMS CORPORATION, a
Texas corporation ("EDS") and MATRIX Telecom, a Texas general partnership
("Licensee").
WHEREAS, Licensee desires to use certain software
proprietary to EDS; and
WHEREAS, EDS is willing to license such software to Licensee upon the terms
and conditions set forth herein.
NOW, THEREFORE, EDS and Licensee hereby agree as follows:
ARTICLE I - GRANT
1.1 Grant of License to the Licensed Program. Subject to the terms and
conditions set forth in this Agreement, EDS grants to Licensee, a non-exclusive,
non-transferable license:
(a) to use (as provided in this Article I) on the equipment
designated by type, model and serial number on Schedule
1.1 hereto (the "Designated Equipment") and at the
location designated on Schedule 1.1 hereto (the
"Designated Location") one copy, in object code form,
of EDS' proprietary computer software program known as
the IXplus software, which software program is more
specifically described on Schedule 1.1 (such program,
including all new releases and modifications made
thereto which are provided to Licensee pursuant to this
Agreement, is referred to herein as the "Licensed
Program"); and
(b) to use (as provided in this Article I) one copy of the documentation
relating to the Licensed Program, including a user's guide and
examples of menu screens and reports, setting forth specifications for
the Licensed Program provided to Licensee by EDS (the
"Documentation").
1.2 Delivery. EDS shall deliver to Licensee the Licensed
Program [as modified pursuant to Section 3.1(a)] and the
Documentation at the Designated Location on or before the
Delivery Date. For the purposes of this Agreement, the
Delivery Date shall be the fifth working day after the date
on which the later of the following occurs: (a) the testing
of the modifications to the Licensed Program made pursuant
to Section 3.1(a) is completed, or (b) the improvements to
the Designated Location required in order to adequately
accommodate the Designated Equipment are completed.
1.3 Ownership. For purposes of Section 117 of the Copyright Act
of 1976, as amended, and for all other purposes, EDS shall
be considered the owner of the Licensed Program and
Documentation and all modifications made thereto, any copies
thereof, and of all copyright, trade secret, patent and
other intellectual or industrial property rights contained
or evidenced therein. Physical copies of the Licensed
Program (in diskette, tape or other form provided by EDS)
and Documentation shall remain the property of EDS and such
copies shall be deemed to be on loan to Licensee during the License Term
(defined in Section 2.1 below).
1.4 Restrictions on Use.
(a) Data. The Licensed Program and Documentation shall be utilized only to
process Licensee's data and shall be operated only by Licensee's
employees.
(b) Designated Equipment and Location. Further, the Licensed
Program shall be operated only on the Designated
Equipment and at the Designated Location, unless Licensee
obtains EDS' prior written approval of a change in the
Designated Equipment (including a change in any one or
more of the following: the manufacturer, description,
model number or serial number of the Designated
Equipment) or the Designated Location, which approval
shall not be unreasonably withheld. EDS' approval
regarding a change in the Designated Equipment which
increases the processing capacity of the Designated
Equipment or which involves the replacement of the
Designated Equipment with different equipment which has
greater processing capacity than the Designated Equipment
shall be subject to payment by Licensee of the fees
described in Section 5.3. Any EDS-approved change in the
Designated Equipment or the Designated Location shall be
documented by amending Schedule 1.1 to reflect such
change.
(c) Temporary Backup. Licensee shall have the limited right
without obtaining EDS' prior written approval, in the
event that the Designated Equipment is inoperative due to
(i) malfunction or (ii) engineering changes or similar
occurrences, to temporarily use the Licensed Program on
backup equipment until the Designated Equipment is
restored to operative status. In such case, the backup
equipment shall, for all purposes hereunder, be deemed to
be the Designated Equipment. In no event shall
Licensee's right to temporarily use the Licensed Program
on backup equipment continue for a period exceeding
thirty (30) days, unless Licensee obtains EDS' prior
written approval, which approval shall not be
unreasonably withheld.
1.5 Confidentiality.
(a) Non-disclosure. The Licensed Program and Documentation
will be disclosed by EDS to Licensee in confidence, and
Licensee shall not cause or permit disclosure, display,
loan, publication, transfer of possession (whether by
sale, exchange, gift, operation of law or otherwise),
sublicensing or other dissemination of the Licensed
Program or Documentation, in whole or in part, to any
third party without the prior written consent of EDS.
Licensee shall limit use of and access to the Licensed
Program to such of Licensee's employees as are directly
involved in the utilization of the Licensed Program and
who are bound to comply, with the confidentiality
obligations set forth in this Agreement.
(b) Copying or Modifying. Licensee shall not reverse assemble, reverse
compile or otherwise copy, reproduce, recreate or modify the Licensed
Program. Licensee may
make one copy of the Licensed Program to be used as a backup which
will be placed in archival storage. Licensee shall not copy or
reproduce the Licensed Program or Documentation except as expressly
provided for in this Agreement. Licensee may copy or reproduce the
Documentation for distribution only to those employees of Licensee who
are directly involved in the use of the Licensed Program and who are
bound to comply with the confidentiality obligations set forth in this
Agreement.
(c) Safeguards. Licensee shall exercise reasonable
precautions, no less vigorous than those Licensee uses to
protect its own confidential information, to safeguard
the Licensed Program and Documentation and to ensure that
no unauthorized persons have access to the Licensed
Program and Documentation, and to ensure that no persons
authorized to have such access shall take any action
which would be in violation of Sections 1.4 or 1.5 of
this Agreement if taken by Licensee. Licensee shall
promptly report to EDS any actual or suspected violation
of Sections 1.4 or 1.5 and Licensee shall, at its
expense, take such further steps as may reasonably be
requested by EDS to prevent or remedy any such violation
and shall reimburse EDS for all reasonable expenses EDS
incurs related to the remedy of such violation.
1.6 Licensee's Responsibilities.
Licensee accepts responsibility, financial and otherwise, for (i) the
selection of the Licensed Program to achieve the desired result, (ii) the
acquisition of a license from CCMI/McGraw Hill for the Q-TEL 9000 software
and installation of such software prior to the Delivery Date and,
thereafter, for maintaining the license for such software during the
License Term (as defined in Section 2.1), (iii) the installation of the
Licensed Program [with assistance from EDS as provided pursuant to Section
3.1(b)], (iv) the use of the Licensed Program, and (v) the results obtained
from the Licensed Program.
1.7 Copyright. Licensee shall not alter or remove any copyright,
trade secret, patent, proprietary and/or other legal notices
contained on or in copies of the Licensed Program and
Documentation. Licensee shall include on all copies of the
Licensed Program or the Documentation which it may have in its
possession, or create, whatever type of designation EDS may
reasonably require to indicate that such material is the
proprietary property of EDS or another party.
1.8 Verification. At least twice each year during the License
Term (as defined in Section 2.1), Licensee shall permit EDS
access to Licensee's premises, computer systems and records
related to this Agreement and the use of the Licensed Program
and Documentation so that EDS may conduct, at EDS' expense,
an investigation to determine Licensee's compliance with the
terms of this Agreement. EDS shall notify Licensee at least
10 days prior to the date EDS desires such access, and
Licensee shall provide such access during Licensee's normal
business hours on the date indicated in the notice.
1.9 Injunctive Relief. Licensee acknowledges and agrees that the
Licensed Program and the Documentation are the valuable
property and trade secrets of EDS or other parties, that any
violation by Licensee of the provisions of Article I would cause EDS or
such other parties irreparable injury for which they would have no adequate
remedy at law, and that, in addition to any other remedies which EDS may
have, it shall be entitled to preliminary and other injunctive relief
against any such violation.
1.10 Survival. Notwithstanding anything to the contrary herein, the restrictions
set forth in this Article I shall survive any termination of the License
Term, the Maintenance Service Term (as defined in Section 2.2) and any
Extension Period (as defined in Section 2.2) until the provisions of
Section 7.4 of this Agreement have been fully complied with or have been
waived in writing by EDS.
ARTICLE II - TERM
2.1 Term of License. The term of the license granted under this Agreement
pursuant to Section 1.1 shall commence on the Delivery Date and shall
continue in perpetuity, unless terminated pursuant to Article VII of this
Agreement (the "License Term").
2.2 Term of Maintenance Service. The term during which the
maintenance services described at Section 3.3 of this
Agreement shall be provided shall consist of two phases: the
Free Maintenance Service Period and the Maintenance Service
Term, unless earlier terminated pursuant to Article VII of
this Agreement. The Free Maintenance Service Period shall
commence on the Installation Date [as defined in Section
3.1(b)] and shall continue for six months after the
Installation Date. The Maintenance Service Term shall
commence on the first day of the seventh month after the
Installation Date (the first "Maintenance Service Fee Date")
and shall end on the fifth anniversary of the Maintenance
Service Fee Date; provided, however, the Maintenance Service
Term shall be automatically extended for additional one year
periods (each such one-year period is referred to herein as
an "Extension Period") unless either EDS or Licensee shall
have given written notice of its desire to not extend the
Maintenance Service Term at least thirty (30) days prior to
the end of the Maintenance Service Term or prior to the end
of any Extension Period.
ARTICLE III - CUSTOMIZATION, INSTALLATION, TRAINING AND
MAINTENANCE
3.1 Customization and Installation Assistance.
(a) Customization. EDS and Licensee shall jointly develop
and implement a plan ("Customization Plan") to modify the
Licensed Program in accordance with those requirements of
Licensee which are agreed upon by EDS. The Customization
Plan shall identify the tasks required to be performed by
each party in connection with the definition and analysis
of Licensee's requirements and the design, construction
and testing of the modifications to the Licensed Program.
To perform those tasks anticipated to be assigned to EDS
in the Customization Plan, the parties estimate that the
effort required will be 6 Person-Months (as defined in
Section 5.4); notwithstanding the foregoing, the parties
acknowledge and agree that such estimate was determined
for planning purposes only and shall not be binding on
either party.
(b) Installation. Commencing on the Delivery Date and
continuing until the Installation Date (as defined
herein) , EDS shall provide to Licensee up to the number
of hours of installation assistance set forth on Schedule
3. 1; provided, however, EDS shall be relieved of its
obligation to provide installation assistance until and
unless Licensee has fulfilled its obligation to acquire
and install the Q-TEL 9000 software pursuant to Section
1.6(ii). For the purposes of this Agreement, the
"Installation Date" shall be the earlier of (i) the date
on which the first bills of Licensee are produced for
delivery or mailing using the Licensed Program (bills
produced for testing purposes only would not be
considered to be produced for delivery or mailing), or
(ii) the date on which the last hour of the amount of
installation assistance set forth on Schedule 3.1 is
expended. If Licensee requests that EDS provide
installation assistance in addition to the amount of
installation assistance set forth on Schedule 3.1, such
assistance would be provided as an Additional Service
pursuant to Section 3.4.
3.2 Training. EDS shall provide to Licensee up to the number of hours of
training set forth on Schedule 3.1 regarding the use and operation of the
Licensed Program. If Licensee requests that EDS provide additional
training, such training would be provided as an Additional Service pursuant
to Section 3.4.
3.3 Maintenance.
(a) Maintenance Service.
(i) During the Maintenance Service Term and any
Extension Period, EDS will use all reasonable
efforts to repair or replace the then current
release of the Licensed Program if it is not
performing substantially in accordance with the
Documentation, upon receiving written notice of the
nonperformance from Licensee in accordance with
Section 3.3(b). The methods and techniques for
resolving nonperformance will be at the sole
discretion of EDS. If the Designated Equipment can
be accessed remotely through dial-up capability or
otherwise, Licensee shall make such remote access
capability available to EDS for use in performing
maintenance services.
(ii) If after reasonable efforts to repair or replace the Licensed
Program which is not performing substantially in accordance with
the Documentation, EDS is unable to make such repairs or
replacement, Licensee's sole remedy shall be the refund of an
amount not to exceed the actual payments received by EDS from
Licensee pursuant to this Agreement.
(iii) EDS shall have no obligation to repair or replace the Licensed
Program if the nonperformance is found by EDS to have been caused
or contributed to by computer equipment malfunction, Licensee's
negligence or fault, Licensee's failure to follow
instructions as set forth in the Documentation, improper or
unauthorized use of the Licensed Program, unauthorized hardware
changes, changes in any software not provided by EDS,
modifications made by or on behalf of Licensee, or any other
cause beyond the control of EDS. However, if requested by
Licensee, EDS will provide Licensee with assistance in resolving
any nonperformance resulting from such causes as an Additional
Service pursuant to Section 3.4.
(b) Notice. To obtain the maintenance services described
in Section 3.3(a), Licensee must provide EDS with the
following during the Maintenance Service Term and any
Extension Period: (i) written notice to the maintenance
service address set forth on Schedule 9.3 of the
operating problem which includes the information
described in this Section 3.3(b) or notice by telephone
to the maintenance service telephone number set forth on
Schedule 9.3 of the information described in this Section
3.3(b) which information is documented in a written
notice delivered to the maintenance service address by
facsimile transmission or overnight mail within 24 hours
after the telephone notice was given, (ii) a detailed
description of the failure to perform substantially in
accordance with the Documentation, (iii) a detailed
description of the operating conditions, including the
specific hardware/software configuration, under which
such failure to perform occurred, and (iv) a
representative sample of inputs and outputs for
replicating and analyzing such failure to perform.
(c) New Releases. From time to time, EDS may make updates,
improvements or changes to the Licensed Program in
separate releases to the Licensed Program which are
designed to enhance operating performance without
changing the basic functions of the Licensed Program.
During the Maintenance Service Term and any Extension
Period and in consideration of the Maintenance Service
Fee, EDS will make all new releases available to Licensee
which are generally made available to EDS 1, other
licensees of the Licensed Program and will provide
revisions to the Documentation necessary to reflect the
updates, improvements or changes included in such new
releases. EDS may discontinue maintenance services as
described in Section 3.3(a) for a prior release of the
Licensed Program replaced by a new release one hundred
eighty (180) days after the date such new release is
first made available. EDS will provide to Licensee
maintenance services as described in Section 3.3(a) for
prior releases of the Licensed Program which Licensee
elects to continue to use as an Additional Service
pursuant to Section 3.4, so long as Licensee continues to
pay for and receive maintenance services for the most
current release of the Licensed Program in anticipation
of eventually using the most current release.
(d) Requested Changes. Any changes to the Licensed Program or
Documentation requested by Licensee which EDS, in its sole discretion,
has not or does not intend to make part of a new release would be
provided as an Additional Service pursuant to Section 3.4.-3.4
Additional Services. Licensee may from time to time request that EDS
provide
support or services which are beyond the scope or amount of the
support or services provided pursuant to this Agreement ("Additional
Services"). Any requested Additional Services will be provided by EDS
to Licensee on such terms as are mutually agreed upon by Licensee and
EDS and documented in writing, including without limitation the
description of the Additional Services to be provided, the price to be
paid, and any other appropriate terms and conditions.
ARTICLE IV - WARRANTY
4.1 Rights in Licensed Program. EDS hereby represents and warrants that from
the Effective Date until the expiration of the License Term it has all
rights, title, ownership interest and/or marketing rights necessary to
grant the rights and license to Licensee set forth herein.
4.2 Nonperformance of Licensed Program. EDS further warrants that on the
Delivery Date the Licensed Program shall be capable of performing
substantially in accordance with the Documentation. EDS shall resolve any
failure of the Licensed Program to perform substantially in accordance with
the Documentation pursuant to the terms and conditions of Section 3.3.
4.3 Limitation on warranty. EDS does not warrant that the
functions contained in the Licensed Program will meet
Licensee's requirements or that the operation of the Licensed
Program will be uninterrupted or error free. Further, EDS
shall have no responsibility with respect to Licensee's data
files. The remedies of Licensee set forth in Sections 3.3(a)
and in Section 8.1 shall be exclusive and EDS' liability for
all matters relating to the warranties set forth in this
Article IV shall be limited as provided in Sections 3.3(a),
8.1 and 8.2.
4.4 No Other Warranties. THE WARRANTIES CONTAINED IN THIS ARTICLE
IV ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES MADE BY
EDS. EDS MAKES AND LICENSEE RECEIVES NO OTHER WARRANTY
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE
STATED EXPRESS WARRANTIES ARE IN LIEU OF ALL LIABILITIES OR
OBLIGATIONS OF EDS FOR DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THE DELIVERY, USE OR PERFORMANCE OF THE
LICENSED PROGRAM.
ARTICLE V - PAYMENTS TO EDS
5.1 License Fee. Licensee shall pay to EDS for the grant of the license
pursuant to Section 1.1 hereunder a license fee in the amount indicated on
Schedule 5.1 ("License Feel') payable as follows:
(a) Licensee shall pay to EDS one-half of the License Fee on
the Delivery Date, and
(b) Licensee shall pay to EDS one-half of the License Fee on the
Installation Date.
5.2 Maintenance Service Fee.
(a) Amount of Fee. For each year during the Maintenance
Service Term and any Extension Period, Licensee shall pay
to EDS for the maintenance services provided pursuant to
Section 3.3 the applicable annual maintenance service fee
("Maintenance Service Fee") at the time for payment
indicated in Section 5.2(b). The applicable Maintenance
Service Fee shall be determined in accordance with the
following procedures:
(i) Fee for First Year. Subject to Section 5.3(b) the Maintenance
Service Fee applicable for the first year of the Maintenance
Service Term is indicated on Schedule 5.1.
(ii) Fee for Subsequent Years. Subject to Section 5.3(b), the
Maintenance Service Fee applicable for the remaining years of the
Maintenance Service Term and any Extension Periods shall be the
lesser of: (x) the amount of the Maintenance Service Fee
indicated on EDS' License and Maintenance Service Fee Schedule in
effect on the Maintenance Service Fee Date for the then current
year for the Designated Equipment in use on such date, or (y) the
sum of the amount of the Maintenance Service Fee indicated on EDS
License and Maintenance Service Fee Schedule in effect on the
Maintenance Service Fee Date for the prior year for the
Designated Equipment in use on the Maintenance Service Fee Date
for the then current year, plus 10% of such amount.
The License and Maintenance Service Fee Schedule in effect on the
Effective Date is attached to this Agreement as Schedule 5.2. The
License and Maintenance Service Fee Schedule may be amended or
replaced by a new schedule from time to time by EDS in its sole
discretion, which new schedule shall be deemed to amend and replace
the License and Maintenance Service Fee Schedule attached as Schedule
5.2. The new schedule shall be provided to Licensee at least 45 days
before the day the new rates are effective.
(b) Payment of Fee. Licensee shall pay the first annual Maintenance
Service Fee on the first Maintenance Service Fee Date, and subsequent
annual Maintenance Service Fees shall be paid each year on the
anniversary of the first Maintenance Service Fee Date (each such
anniversary is also referred to herein as a "Maintenance Service Fee
Date").
5.3 Upgrade in Designated Equipment.
(a) Upgrade Fee. If during the License Term Licensee
upgrades the Designated Equipment to increase its
processing capacity or replaces the Designated Equipment
with different equipment which has greater processing
capacity than the Designated Equipment, Licensee shall
pay to EDS on or before the upgrade or replacement of the
Designated Equipment occurs an upgrade fee ("Upgrade
Fee") in an amount equal to the difference resulting when
the amount of the License Fee paid by Licensee is
subtracted from the amount of the then current licensee
fee applicable to the upgraded or replaced Designated
Equipment as indicated on EDS' License and Maintenance Service Fee
Schedule then in effect. The following illustrates the calculation of
the Upgrade Fee:
Then Current License
Fee Applicable to
Upgraded or Replaced - Amount of = Upgrade
Designated Equipment License Fee Fee
Per Schedule 5.2 Paid
As provided in Section 5.2, the License and Maintenance Service Fee
Schedule in effect on the Effective Date is attached to this Agreement
as Schedule 5.2, and may be amended from time to time by EDS in its
sole discretion.
(b) Change in Maintenance Service Fee. If the upgrade or
replacement of the Designated Equipment occurs on or
before the first Maintenance Service Fee Date, Licensee
shall pay on such date the Maintenance Service Fee
applicable for the upgraded or replaced Designated
Equipment as indicated on EDS' License and Maintenance
Service Fee Schedule in effect on the first Maintenance
Service Fee Date. If the upgrade or replacement of the
Designated Equipment occurs at any time after the first
Maintenance Service Fee Date, Licensee shall pay on the
next Maintenance Service Fee Date occurring on or after
the upgrade or replacement of the Designated Equipment,
the sum of (i) an amount equal to: the difference between
the amount of the Maintenance Service Fee paid on the
immediately previous maintenance Service Fee Date and the
Maintenance Service Fee applicable for the upgraded or
replaced Designated Equipment as indicated on EDS'
License and Maintenance Service Fee Schedule in effect at
the time the upgrade or replacement of the Designated
Equipment occurs, multiplied by the number of months
which would occur from the time the upgrade or
replacement until the next Maintenance Service Fee Date,
and divided by 12, as illustrated in the following
formula:
Months from
Then Current Maintenance upgrade to
Service Fee Applicable Maintenance Service Maintenance
to Upgraded/Replaced - Fee Paid X Service Fee
Designated Equipment Previously Date
Per Schedule 5.2 12
= Change Amount
plus (ii) the Maintenance Service Fee applicable for the upgraded or
replaced Designated Equipment as determined in accordance with
Sections 5.2(a)(i) and (ii). Subsequent Maintenance Service Fees shall
be determined in accordance with Section 5.2(a)(ii).
5.4 Customization Charge. In addition to the other fees described
in Article 5, Licensee shall pay to EDS a monthly charge
("Customization Charge") of $12,000 per Person-Month (as
defined herein) for the services performed by EDS pursuant to
Section 3.1(a). For the purposes of this Section 5.4, the
term "Person-Month" shall mean one person provided for that
number of working days which occur during the applicable
month. The Customization Charge for any partial month shall
be prorated on a per them basis.
5.5 Out-of-Pocket Expenses. In addition to the other fees
described in Article 5, Licensee shall pay, or reimburse EDS
for, the reasonable out-of-pocket expenses incurred by EDS
with the approval of Licensee, including but not limited to,
the travel, meals and lodging expenses incurred by EDS
personnel performing the installation assistance, training,
maintenance service and any Additional Services described in
this Agreement.
5.6 Time for Payment. Except as otherwise provided herein, any
sum due EDS hereunder shall be due and payable within thirty
days after receipt by Licensee of an invoice from EDS. Any
sum due EDS hereunder that is not paid to EDS within thirty
calendar days after its due date shall thereafter bear
interest until paid at the lesser of (i) two percent per annum
more than the prime rate established from time to time by
Citibank N.A., New York, or (ii) the maximum rate of interest
allowed by applicable law.
5.7 Taxes. There will be added to any charges hereunder, and
Licensee shall pay to EDS, all taxes, assessments, duties,
permits and fees, however designated or levied, which are
based upon any charges under this Agreement, or upon this
Agreement or the Licensed Program, services or materials
provided hereunder, or their use, including without limitation
state and local privilege or excise taxes based on gross
revenue, sales and use taxes, and any taxes or amounts in lieu
thereof paid or payable by EDS in respect of the foregoing,
but excluding franchise taxes and taxes based on the net
income of EDS.
ARTICLE VI - ARBITRATION
6.1 Arbitration. In the event that the parties are not able to resolve any
dispute or controversy through informal discussions, the parties agree as
follows:
(a) Procedures. All disputes and controversies between the
parties of every kind and nature, including but not
limited to, those arising under or in connection with
this Agreement, including the creation, validity
interpretation, breach or termination of the License
Term, Maintenance Service Term or any Extension Period,
shall be submitted to arbitration using the following
procedure:
(i) Either party may demand arbitration in writing, stating the
nature of the controversy and naming the arbitrator selected by
it.
(ii) Within thirty days after such demand, the other
party shall name its arbitrator, and the two named
arbitrators shall, within sixty days thereafter,
select the third arbitrator to serve on the
arbitration panel. The two arbitrators named by the
parties may have prior relationships with the
naming party, which in a judicial setting would be
considered a conflict of interest. The third
arbitrator, selected by the first two, should be a
neutral participant, with no prior working
relationship with either party.
(iii) The arbitration shall be governed by the Commercial Arbitration
Rules of the American Arbitration
Association.
(iv) The arbitration shall be conducted in Dallas, Texas.
(v) Each party shall bear its own arbitration costs and expenses;
provided, however, the arbitrators may modify the allocation of
fees, costs and expenses in the award in those cases where
fairness dictates other than an equal allocation between the
parties.
(vi) The arbitrators shall allow such discovery as is appropriate to
the purposes of arbitration in accomplishing fair, speedy and
cost effective resolution of disputes. The arbitrators shall
reference the rules of evidence of the Federal Rules of Civil
Procedure then in effect insetting the direction of such
discovery.
(vii) The award shall be final and binding on the parties, and judgment
on the award may be entered in and enforced by any court of
competent jurisdiction.
(b) Exclusive Remedy. Other than those matters involving
injunctive relief as a remedy, or any action necessary to
enforce the award of the arbitrators, the parties agree
that the provisions of this Section 6.1 are a complete
defense to any suit, action or other proceeding
instituted in any court or before any administrative
tribunal with respect to any dispute or controversy
arising out of or in connection with this Agreement. The
provisions of this Section 6.1 will survive termination
of the License Term, the Maintenance Service Term and any
Extension Period. Nothing in this Section prevents the
parties from exercising their rights to terminate the
License Term, the Maintenance Service Term or any
Extension Period as specified in this Agreement.
(c) Continued Performance. Unless EDS is bringing an action
under this Section for nonpayment by Licensee, EDS shall
continue to provide services, if applicable, under this
Agreement during the arbitration proceedings and Licensee
shall continue to make payments to EDS in accordance with
this Agreement. Any disputed payments shall be paid into
an interest-bearing escrow account, structured by
agreement of the parties, or as ordered by the
arbitrators if agreement can not be reached, for
distribution in accordance with the arbitrators' award.
If a disputed payment is paid into an escrow account on
or before its due date, the interest accruing on the
escrow account shall be paid to the party to whom the
arbitrators award the disputed amount.
ARTICLE VII - TERMINATION
7.1 Termination for Cause. If either party hereto materially defaults in the
performance of any of its obligations
hereunder (other than a payment obligation) and if such default continues
for more than thirty (30) days after written notice specifying the default
is given to the defaulting party, then the other party may, by giving the
defaulting party written notice thereof, terminate the License Term and/or
the Maintenance Service Term or any Extension Period as of a date specified
in such notice of termination.
7.2 Termination for Adverse Change in Business. If (i) Licensee
ceases to carry on its business, (ii) a receiver or similar
officer is appointed for Licensee, (iii) Licensee makes an
assignment for the benefit of, or a composition with, its
creditors, or another arrangement of similar import, or (iv)
if proceedings under any bankruptcy or insolvency law are
commenced by or against Licensee, then in such event EDS may,
by giving Licensee written notice thereof, terminate the
License Term and/or the Maintenance Service Term or any
Extension Period as of a date specified in such notice of
termination.
7.3 Termination for Nonpayment.
(a) License Fees. In the event Licensee defaults in the payment when due
of the License Fee or the Upgrade Fee due to EDS hereunder and does
not cure such default within fifteen (15) days after being given
written notice of such default, then EDS may, by giving written notice
thereof to Licensee, terminate the License Term as of a date specified
in such notice of termination.
(b) Maintenance Service and Other Fees. In the event
Licensee defaults in the payment when due of any
Maintenance Service Fee or any other amount due to EDS
hereunder and does not cure such default within fifteen
(15) days after being given written notice of such
default, then EDS may, by giving written notice thereof
to Licensee, terminate the Maintenance Service Term or
any Extension Period as of a date specified in such
notice of termination.
7.4 Rights Upon Termination. Upon termination of the License Term
for any reason, then, in addition to any other rights which
either party may have, Licensee shall promptly return to EDS
all copies of the Licensed Program and the Documentation in
Licensee's possession and completely erase the Licensed
Program and all elements thereof from the Designated Equipment
and any other computer system of Licensee and upon EDS'
request, shall execute and deliver to EDS a written
certification that Licensee has complied with the provisions
of this Section and no longer retains any material relating to
the Licensed Program or the Documentation.
ARTICLE VIII - INDEMNIFICATION, REMEDIES AND LIABILITY
8.1 Infringement Indemnity.
(a) Defense of Claim. EDS will defend any action brought against Licensee
to the extent that such action is based on a claim that the Licensed
Program or Documentation used within the scope of the license granted
herein, in whole or in part infringes (i) a copyright perfected under
United States statute, (ii) a patent granted under
United States law, or (iii) constitutes an unlawful disclosure, use or
misappropriation of another party's trade secret. EDS will bear the
expense of such defense and pay any costs and damages which are
finally awarded as a result of such claim, provided that Licensee
notifies EDS promptly in writing of the claim and that Licensee allows
EDS to fully direct the defense or settlement of such claim. EDS shall
not be responsible for any settlement or compromise made without its
consent.
(b) Continued Right to Use. Should the Licensed Program or
the Documentation become, or in EDS' opinion be likely to
become, the subject of a claim of infringement of a
copyright or patent, EDS will attempt to procure for
Licensee the right to continue using the Licensed Program
or Documentation, or replace or modify the Licensed
Program or Documentation to make its use hereunder
non-infringing. If with respect to the Licensed Program
neither option is reasonably available in EDS' judgment,
(i) Licensee shall return the Licensed Program and the
Documentation to EDS, and (ii) the License Term, the
Maintenance Service Term and any Extension Period and all
of the rights granted hereunder shall terminate.
(c) Infringement Caused by Licensee. EDS shall have no
liability to Licensee under this Section 8.1 or under any
other provision of this Agreement, if any claim of
infringement is based upon the use of the Licensed
Program or Documentation delivered hereunder in
combination with equipment, devices or software not
supplied by EDS, the use of the Licensed Program in an
application or environment for which it was not designed
or was not contemplated under this Agreement, or the
modification of the Licensed Program by anyone other than
EDS or its employees or agents. Further, Licensee shall
indemnify and hold EDS harmless from any liability, loss,
claim or damage to persons or property arising out of
Licensee's possession, operation, use or modification of
the Licensed Program or arising out of the fault or
negligence of Licensee, its employees or agents, and
shall indemnify EDS from any expense or cost incurred if
any such claims are made.
(d) Entire Obligation. This Section 8.1 states EDS' entire obligation to
Licensee regarding infringement.
8.2 Remedies and Limit of Liability. For all claims relating to
this Agreement, whether in contract or in tort, Licensee's
exclusive remedy shall be (i) for a breach of any warranty,
the correction of such breach at no charge to Licensee as
described in Section 4.3, and (ii) for any other claim,
including a claim of a failure to correct a breach of
warranty, the recovery of Licensee's actual, direct damages up
to, in the aggregate, an amount equal to the total amount of
all fees paid to EDS by Licensee under this Agreement. This
limitation will apply regardless of the form of action,
whether in contract or in tort, including negligence. EDS
shall have no liability for any punitive, indirect or
consequential damages, including lost profits, lost income or
lost savings, or for any claim against Licensee by any other
party [except as provided in Section 8.1(a)]. Further,
neither party may assert any cause of action against the other
party which accrued more than two (2) years prior to the filing of a suit
alleging such cause of action. The limitations described in this Section
8.2 will not apply to the payment of costs and damages referred to in
Section 8.1(a).
8.3 Acknowledgement. The parties acknowledge that each of the
provisions of this Agreement including the fees for the
license and services were based in part on the limitations
contained in Section 8.2 and that each party fully understands
and accepts the obligations and limitations described in this
Agreement. The parties further acknowledge and agree that the
obligations and limitations described in Section 8.2 shall
survive the termination of the License Term, the Maintenance
Service Term and any Extension Period.
ARTICLE IX - MISCELLANEOUS
9.1 Other Confidential Information. In addition to the provisions
of Section 1.5, each party shall use the same means as it uses
to protect its own confidential information, but in any event
not less than reasonable means, to prevent the disclosure and
to protect the confidentiality of both (i) written information
received from the other party which is marked or identified as
confidential; and (ii) oral or visual information identified
as confidential at the time of disclosure. The information
described in the preceding sentence at (i) and (ii) shall be
referred to in this Agreement as "Confidential Information".
Each party shall use Confidential Information received from
the other party only in connection with the purposes of this
Agreement. The foregoing shall not prevent either party from
disclosing Confidential Information which belongs to such
party or is (i) already known by the recipient party without
an obligation of confidentiality; (ii) publicly known or
becomes publicly known through no unauthorized act of the
recipient party; (iii) rightfully received from a third party;
(iv) independently developed by the recipient party without
use of the other party's Confidential Information; (v)
disclosed without similar restrictions to a third party by the
party owning the Confidential Information; (vi) approved by
the other party for disclosure; or (vii) required to be
disclosed pursuant to a requirement of a governmental agency
or law so long as the disclosing party provides the other
party with notice of such requirement prior to any such
disclosure. The provisions of this Section 9.1 will survive
the expiration or termination of the Maintenance Service Term,
or if extended, the last Extension Period, for a period of
three years.
9.2 Assignment. This Agreement shall be binding on the parties hereto and their
successors and assigns, but Licensee may not assign this Agreement or the
license granted pursuant to this Agreement without the prior written
consent of EDS, which consent shall not be unreasonably withheld. The
parties acknowledge and agree that the following includes, without
limitation, circumstances in which it shall be reasonable for EDS to
withhold its consent to the proposed assignment of this Agreement: the
proposed assignment to a competitor of EDS or to an entity which is a
higher credit risk than Licensee. Notwithstanding the foregoing, EDS will
have the right to subcontract portions of the services to be performed by
it pursuant hereto; provided, however, no such subcontract will
relieve EDS of any of its obligations hereunder.
9.3 Notice. Wherever under this Agreement one party is required
to give notice to the other, such notice shall be deemed given
if actually delivered or on the third day after mailing, if
mailed by United States mail, first-class, postage prepaid,
and addressed as provided on Schedule 9.3. Either party may at
any time change its address for notification purposes by
mailing a notice stating the change and setting forth the new
address.
9.4 Headings. The article and section headings and the table of contents used
herein are for reference and convenience only and shall not enter into the
interpretation hereof.
9.5 Relationship of Parties. EDS, in furnishing services to Licensee, is
providing services only as an independent contractor. EDS does not
undertake by this Agreement or otherwise to perform any obligation of
Licensee, whether regulatory or contractual.
9.6 Force Majeure. Each party hereto shall be excused from
performance hereunder (other than the performance of payment
obligations) for any period and to the extent that it is
prevented from performing pursuant hereto, in whole or in
part, as a result of delays caused by the other party or an
act of God, war, civil disturbance, court order, labor
dispute, third party nonperformance, or other cause beyond its
reasonable control, including failures, fluctuations or
non-availability of electrical power, heat, light, air
conditioning or telecommunications equipment, and such
nonperformance shall not be a default hereunder nor a ground
for termination of the License Term, Maintenance Service Term
or any Extension Period.
9.7 Severability. If any provision of this Agreement is declared
or found to be illegal, unenforceable or void (other than a
provision relating to a payment obligation) then both parties
shall be relieved of all obligations arising under such
provision, but if the remainder of this Agreement shall not be
affected by such declaration or finding, then each provision
not so affected shall be enforced to the extent permitted by
law.
9.8 Attorneys' Fee. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be
entitled.
9.9 Media Releases. All media releases, public announcements and
public disclosures by Licensee or its employees or agents
relating to this Agreement or its subject matter, including
without limitation promotional or marketing material, but not
including any announcement intended solely for internal
distribution at Licensee or any disclosure required by legal,
accounting or regulatory requirements beyond the reasonable
control of Licensee, shall be coordinated with and approved by
EDS in writing prior to the release thereof, which approval
shall not be unreasonably withheld.
9.10 No Third Party Beneficiary. Nothing in this Agreement may be relied upon or
shall benefit any party other than the parties hereto.
9.11 Waiver. No delay or omission by either party hereto to exercise any right
or power accruing upon any noncompliance or default by the other party with
respect to any of the terms of this Agreement shall impair any such right
or power or be construed to be a waiver thereof. A waiver by either of the
parties hereto of any of the covenants, conditions, or agreements to be
performed by the other shall not be construed to be a waiver of any
succeeding breach thereof or of any other covenant, condition or agreement
herein contained.
9.12 Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. There are no
understandings or agreements relative hereto which are not fully expressed
herein and, except as provided herein, no change, waiver or discharge
hereof shall be valid unless in writing and executed by the party against
whom such change, waiver or discharge is sought to be enforced.
9.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS, OTHER THAN CHOICE OF LAW RULES, OF THE STATE OF
TEXAS. IN WITNESS WHEREOF, EDS and Licensee have caused this Agreement to
be signed by their duly authorized representatives as of the Effective
Date.
ELECTRONIC DATA SYSTEMS MATRIX TELECOM
CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------- -------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Regional Vice President Managing Partner
AMENDMENT NUMBER ONE TO IXplus LICENSE AGREEMENT
BETWEEN
ELECTRONIC DATA SYSTEMS CORPORATION
AND
MATRIX TELECOM
THIS AMENDMENT NUMBER ONE, dated as of the 1st day of October, 1992, is
between Electronic Data Systems Corporation ("EDS") and MATRIX Telecom
("Licensee"), and is an amendment of that certain IXplus License Agreement
between EDS and Licensee dated as of April 23, 1991 (the "Agreement").
For and in consideration of the mutual agreements of the parties herein
contained and other good and sufficient consideration the receipt of which is
hereby acknowledged, EDS and Licensee agree as follows:
1. Effective as of the date of the Agreement and at no additional cost to
Licensee, Section 1.1(a) of the Agreement is amended to read in its
entirety as follows:
"to use (as provided in this Article I) on the equipment designated by type
and model on Schedule 1.1 hereto (the "Designated Equipment") and at the
location designated on Schedule 1.1 hereto (the "Designated Location")
multiple copies, in object and source code form, of EDS' proprietary
computer software program known as the IXplus software, which software
program is more specifically described on Schedule 1.1 (such program,
including all new releases and modification made thereto which are provided
to Licensee pursuant to this Agreement is referred to herein as the
"Licensed Program"); and"
2. Effective as of the date of this Amendment, Section 5.2 of the Agreement is
amended to read in its entirety as follows:
"Maintenance Service Fee. For each year during the Maintenance Service Term
and any Extension Period, Licensee shall pay to EDS for the right to
receive new releases to the Licensed Program pursuant to Section 3.3, a
maintenance service fee ("Maintenance Service Fee") equal to the total
aggregate number of billable messages processed by Licensee each month,
multiplied by $.00075 per Billable Message. A "Billable Message" shall mean
any group of data which represents the statistical nature of a single long
distance telephone call for the purpose of billing and/or reporting such
telephone calls on behalf of the company providing such long distance
telephone service to its customers, and can be identified with a valid
customer account, rated, taxed and presented to a customer for payment. The
monthly Maintenance Service Fee to be paid by Licensee shall be adjusted
bi-annually based on Licensee's highest Billable Message volume for any one
month during the prior six-month period, multiplied by $.00075 per Billable
Message. At the end of each six month period, Licensee shall provide EDS
with the actual number of Billable Messages processed by Licensee during
such period. Any overpayment or underpayment of the actual Maintenance
Service Fee during any such six-month period will be reflected as an
adjustment on the next monthly invoice payable by Licensee to EDS. During
the Maintenance Service Term, Licensee shall provide EDS with such reports
and
information as EDS reasonably requests for the purpose of verifying the
number of Billable Messages processed by Licensee, including but not
limited to, a monthly rating summary report of all Billable Messages rated
through Licensee's system."
3. Effective as of the date of the Agreement, Section 5.3 of the Agreement
shall be deleted in its entirety. Furthermore, the parties acknowledge and
agree that the waiver of the Upgrade Fee shall apply to Licensee's current
use of the AS/400 equipment, Models E10, D35 and E50.
4. Effective as of the date of this Amendment, a new Section 1.11 is added to
the Agreement as follows:
"Licensee's Purchase Obligations. Licensee shall purchase its requirements
for any upgrades, replacements and/or additional IBM AS/400 equipment
through EDS. Upon notification from Licensee of its IBM equipment needs,
EDS will use commercially reasonable efforts to cause IBM to provide such
equipment to EDS on behalf of Licensee. Any IBM equipment purchased by EDS
on behalf of Licensee will be offered to Licensee at a price equal to EDS'
then current cost for such equipment, plus 10%."
5. Pursuant to Section 1.4(a), EDS and Licensee hereby acknowledge and agree
that, in addition to operation by Licensee's employees, the Licensed
Program shall be operated by EDS acting on behalf of Licensee.
6. The Agreement is hereby amended by deleting the Designated Equipment and
Designated Location Sections of Schedule 1.1 and substituting therefor the
Designated Equipment and Designated Located Sections set forth on Exhibit A
attached to this
Amendment.
Except as expressly provided by this Amendment, the Agreement remains in
full force and effect and except as expressly amended by this Agreement the
Agreement remains unchanged.
IN WITNESS WHEREOF, EDS and Licensee have executed and delivered this
Amendment to be effective as of the date set forth above.
ELECTRONIC DATA SYSTEMS
CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Regional Vice President
MATRIX TELECOM
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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General Partner
