Exhibit 10.13
LICENSE , MAINTENANCE AND
UPDATE SERVICES AGREEMENT
THIS
LICENSE, MAINTENANCE AND UPDATE SERVICES AGREEMENT
(“ Agreement
”) is entered into this 31st day of March, 2008 between
Aequus (as defined in Exhibit X hereto) and WorldGate (as
defined in Exhibit X hereto).
WHEREAS, Aequus and WorldGate
have entered into a certain Master Agreement dated the Effective
Date pursuant to which the Parties agreed to enter into certain
Related Documents, as that term is defined in the Master Agreement,
including this Agreement.
NOW THEREFORE, in
consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged by the Parties, the Parties agree as
follows:
1.
Definitions.
Unless otherwise defined
herein, capitalized terms used in this Agreement shall have the
meaning ascribed to those terms set forth in Exhibit X
attached hereto. The following capitalized terms shall have
the following corresponding meanings:
1.1.
“ Aequus Data
” shall have the meaning set forth in
Section 5.2.
1.2.
“ Authorized
Sub-Licensee ” shall mean a third party to whom Aequus
grants a sub-license in accordance with Section 2.2;
provided , however that in no event may a
Competitor be an Authorized Sub-Licensee.
1.3.
“ Confidential
Information ” shall have the meaning ascribed to that
term in the Mutual Confidentiality Agreement.
1.4.
“Contract
Year” shall mean (a) the period
commencing on the Effective Date and ending on April 1, 2009
and (b) the twelve-month period ending on April 1 of each
calendar year during the Term.
1.5.
“ License Fee
” shall mean one quarter percent (0.25%) of the VRS
Reimbursement Revenue; provided , however , that in
no event shall the License Fee be less than five thousand dollars
($5,000), or more than fifty thousand dollars ($50,000), in any
Contract Year when due.
1.6.
“ Licensed IP
” means all Intellectual Property owned or held under license
by WorldGate which has been used by WorldGate (i) immediately
prior to the Effective Date or at any time thereafter during the
term of the Reseller Agreement in connection with the use and
operation of Purchased Phones purchased by Aequus thereunder, or
(ii) in the performance of Support Services hereunder,
including in each case Intellectual Property developed or acquired
by WorldGate pursuant to an SOW.
1.7.
“ Maintenance and
Update Services Fee ” shall mean one and three quarters
percent (1.75%) of the VRS Reimbursement Revenue; provided ,
however , that in no event shall the Maintenance and Update
Services Fee exceed three hundred fifty thousand dollars ($350,000)
in any Contract Year.
1.8.
“ Mutual
Confidentiality Agreement ” shall mean that certain
Mutual Confidentiality Agreement which is a Related
Document.
1.9.
“ Service Month
” shall have the meaning ascribed to such term in
Section 2.7 hereof.
1.10.
“ Software Support
Services ” shall mean the services specified on
Exhibit A hereto.
1.11.
“ Support
Services ” shall mean the Software
Support Services and Tier 2 Support Services.
1.12.
“ Term ”
shall mean the period from the Effective Date until the termination
of this Agreement in accordance with Section 13.
1.13.
“ Tier 2 Support
Fee ” shall mean $1.00 per calendar month for each Aequus
Customer that has generated VRS Reimbursement Revenue during such
month.
1.14.
“ Tier 2 Support
Services ” shall mean the services specified on
Exhibit B hereto.
1.15.
“ Workaround
” shall mean a procedure for minimizing the effect of an
error in the Software so that such error does not materially
interfere with Aequus’ use of the Software.
2.
Scope of
License
2.1
License. WorldGate
hereby grants to Aequus, the following licenses to use the Licensed
IP:
(a)
an exclusive (except as
set forth in the proviso to this clause (a)) transferable (only
pursuant to an authorized sub-license or assignment as set forth
herein) and
2
perpetual and
irrevocable (except as otherwise specified herein) license, under
the Licensed IP, to use, support and operate Purchased Phones
solely in providing the Services in the Territory to Customers (the
“Services Support License”) and; provided ,
however , that the Services Support License shall become
non-exclusive in the event that either (i) Aequus’s
rights under the Reseller Agreement which is a Related Document
become non-exclusive or (ii) such Reseller Agreement
terminates; and
(b)
a non-exclusive
transferable (only pursuant to an authorized sub-license or
assignment as set forth herein) and perpetual and irrevocable
(except as otherwise specified herein) license, under the Licensed
IP, to manufacture or to have manufactured for Aequus and on its
behalf any Purchased Phone (and, in connection therewith to create
derivative works) (the “Manufacturing License”);
provided , however , that Aequus agrees that it shall
not use or otherwise exploit the Manufacturing License unless and
until a Release Event has occurred and provided ,
further , that if WorldGate has exercised its right to
terminate the Reseller Agreement which is a Related Document in
accordance with the terms thereof effective prior to the occurrence
of a Release Event, then the Manufacturing License shall
simultaneously terminate.
2.2
Sub-licenses.
Aequus may grant to
Authorized Sub-Licensees one or more sub-licenses of all or any
part of the licensed rights exercisable by it hereunder solely for
purposes of and as reasonably necessary to effectuate
Aequus’s rights to use the Licensed IP in a manner consistent
with the terms of this Agreement.
2.3
Escrow Deposit.
(a)
To ensure Aequus’s
ability to exercise the licenses described in this Section 2
without material interruption which may result from a Release
Event, WorldGate shall deliver into escrow, in accordance with the
Software Escrow Agreement included as a Related Document,
(i) copies of all Source Code and Object Code for all Programs
or other Software relating to the operation and manufacture of each
Purchased Phone, (ii) all processes necessary for assembling
such Object Code into executable form in order to permit Full
Usability Testing as provided in the agreement with the escrow
agent and (iii) all Manufacturing Documentation. As
further set forth in the Software Escrow Agreement, unless
otherwise agreed by the Parties, such escrowed copies (the
“Escrow Materials”) shall be released from escrow and
delivered to Aequus only upon written notice by Aequus to WorldGate
and the Escrow Agent that one or
3
more Release
Events has occurred. The Software Escrow Agreement sets forth
in greater detail Aequus’s rights and obligations with
respect to the use and disclosure of Escrow Materials following a
Release Event.
(b)
Aequus hereby agrees that
the delivery to it of the Escrow Materials in accordance with the
Escrow Agreement shall be deemed a disclosure by WorldGate of its
Confidential Information and that further disclosure and use of
such Escrow Materials shall be subject in all respects to the
provisions of the Mutual Confidentiality Agreement, except where
otherwise expressly agreed by the Parties in writing, including in
another Related Document. Furthermore, notwithstanding
anything to the contrary contained in any other Related Document,
Aequus’s rights to utilize the Escrow Materials in connection
with the design, configuration, manufacture, operation or
maintenance of Purchased Phones shall be limited as
follows:
(i)
If the Release Event is an
SOW Disruption, then Aequus’s rights shall be limited to
using relevant Escrow Materials for the sole purpose of
accomplishing the technical and operational goals which gave rise
to the need for a particular Mandated SOW.
(ii)
If the Release Event is a
Foreclosure Disruption or an Insolvency Disruption, then Aequus
shall have all rights, subject to the restrictions in this
Agreement, to use the Escrow Materials to design, configure,
manufacture, operate and maintain Purchased Phones (as well as
other video phones based on or derived from Purchased Phones) (as
the same may be modified by new developments).
(iii)
If the Release Event is a
Nine-Month Disruption, the Aequus’s rights shall be limited
to using relevant Escrow Materials for the sole purpose of
manufacturing, operating and maintaining any model of Purchased
Phone which is the subject of the Nine-Month Disruption.
(c)
The delivery of the Escrow
Materials to Aequus shall not imply the grant of any right or
license to use the Escrow Materials except as set forth above and
such uses shall be authorized only to the extent necessary to
permit Aequus to continue providing Services in the Territory to
Customers.
2.4
No Conflicting Grants.
WorldGate will not knowingly (i) grant, transfer or assign to
any person any right or interest in any Licensed IP or related
Documentation or (ii) grant to any third party any right to
use or exploit any Licensed IP or related Documentation, which in
either
4
case would conflict with
Aequus’s exclusive rights under Section 2.1(a) and
its non-exclusive rights under Section 2.1(b) to use such
Licensed IP and related Documentation in connection with the
exercise of such rights in accordance with the terms
hereof.
2.5
Limitations
and Exclusions on License. The Parties acknowledge and agree
that, among other things, nothing contained in this Agreement, in
the Master Agreement or in any Related Document shall imply that
Aequus or any other person or entity has any license, right or
interest in the Licensed IP except as expressly provided herein or
therein and, except as expressly set forth in this Agreement or
otherwise expressly agreed by WorldGate in writing, WorldGate
expressly reserves all rights to its intellectual property, and
shall not be restricted from developing, manufacturing, selling
and/or distributing any product or service, whether alone or
jointly with others, or from licensing any technology or
intellectual property to any third party. In
particular, except as may be expressly agreed by the Parties in
another Related Document or as otherwise expressly agreed in
writing, Aequus shall have no right to use, reproduce or modify the
Licensed IP (or to sublicense any third party to do so) in order
(i) to manufacture, provide or facilitate the use of Purchased
Phones other than as expressly permitted under this Agreement or to
manufacture, provide or facilitate the use of video phone products
other than Purchased Phones, or (ii) to facilitate or control
the access by and/or operation of Purchased Phones with other
products and services, including without limitation other video
phone services and/or VoIP services. Aequus shall not, either
directly or through any third party, (x) decompile,
disassemble or otherwise reverse engineer any Licensed Proprietary
Materials, (y) remove any proprietary legends and/or copyright
legends or restrictions which are in the Licensed Proprietary
Materials as originally supplied to Aequus hereunder, or
(z) except as expressly authorized under the Master Agreement
and in connection with a release of Escrowed Materials to Aequus
pursuant to the Software Escrow Agreement which is one of the
Related Documents, make any copies of, alterations to, or other
derivatives of the Licensed IP
2.6
Treatment of the License Under
Section 365(n) of the Bankruptcy Code. The Licensed
IP licensed under this Agreement consists of, and shall be deemed
for all purposes to be, “intellectual property” within
the meaning of Section 101(35A) of title 11, United States
Code (the “Bankruptcy Code”). Upon commencement
of a case under the Bankruptcy Code by or against WorldGate, the
license of the Licensed IP granted under or pursuant to this
Agreement shall be
5
governed by
Section 365(n) of the Bankruptcy Code, and Aequus shall
be entitled to the protections of Section 365(n). If the
Agreement is rejected under Section 365 of the Bankruptcy Code
in a case commenced by or against WorldGate, then Aequus, as the
licensee of the Licensed IP under this Agreement, shall retain and
may fully exercise, in its sole discretion, all of the rights and
entitlements granted or afforded under Section 365(n) of
the Bankruptcy Code, including any election which it is entitled to
make thereunder.
2.7
License Fee. Commencing
with the Second Contract Year, Aequus shall pay the License
Fee to
WorldGate in accordance with Section 3.3 no later than three
(3) days after receipt by Aequus of the VRS Reimbursement
Revenue for any month in which Customers utilize video relay
services (each a “Service Month”); provided ,
however , that the amount of the License Fee which shall be
paid with respect to any Contract Year of the Term shall not exceed
fifty thousand dollars ($50,000) .
3.
Software
Support Services
3.1
During the first Contract
Year, and thereafter so long as Aequus pays the Maintenance and
Update Services Fee, WorldGate shall provide to Aequus all Software
Support Services. In consideration of all Software Support
Services provided hereunder, commencing with the second Contract
Year, Aequus shall pay the Maintenance and Update Services Fee to
WorldGate in accordance with Section 3.3 no later than
three
(3) days after receipt of the VRS Reimbursement Revenue for
any Service Month; provided , however , that the
amount of the Maintenance and Update Services Fee which shall be
paid with respect to any Contract Year shall not exceed three
hundred fifty thousand dollars ($350,000) .
3.2
During the Term, so long
as Aequus pays the Tier 2 Support Services Fee, WorldGate shall
provide the Tier 2 Support Services. In consideration of the
Tier 2 Support Services, commencing after the Effective Date,
Aequus shall pay the Tier 2 Support Fee to WorldGate in accordance
with Section 3.3 no later
than thirty (30) days after the last day of each Service
Month.
3.3
In
order to account and pay for the License Fee, the Maintenance and
Update Services Fee and the Tier 2 Support Fee, Aequus
shall:
6
(i)
following the close of
each calendar month during the Term, commencing with the Second
Contract Year, notify WorldGate either (A) when Aequus has
submitted an invoice to the National Exchange Carrier Association
(NECA) for VRS Reimbursement Revenue earned during such month if
such month is a Service Month, including in such notice a copy of
such invoice or (B) that no Customers utilized video relay
services for such month;
(ii)
within thirty (30) days
after the last day of each Service Month during the term of this
Agreement and within thirty (30) days after the date of termination
hereof, deliver to WorldGate a written statement setting forth the
Tier 2 Support Fee due and payable to WorldGate, together with
payment of the amount of the Tier 2 Support Fee shown to be due and
payable to WorldGate; and
(iii)
not
later than three (3) days after receipt of any VRS
Reimbursement Revenue, send a statement reflecting the amount of
VRS Reimbursement Revenue received, together with payment of the
License Fee and the Maintenance and Update Services Fee due in
connection with such VRS Reimbursement Revenue.
(B)
All
payments to WorldGate under this Agreement shall be made in United
States dollars and shall be transmitted by wire transfer directly
to the bank or place designated in writing by WorldGate.
7
(C)
Aequus shall keep and maintain accurate
books and records with respect to all VRS Reimbursement Revenues
License Fees, and Tier 2 Support Fees. Said books and records
shall be available for inspection and copying by an independent
auditor specified by WorldGate and reasonably acceptable to Aequus,
not more frequently than once each Contract Year during the Term
and once during the one year period following the termination of
this Agreement, during ordinary business hours upon a minimum of
thirty (30) days prior written notice from WorldGate to
Aequus. In the event that any such review reveals an
underpayment, Aequus shall immediately remit payment to WorldGate
in the amount of such underpayment plus interest calculated at the
rate of one percent (1%) per month, accruing from the date such
payment(s) was actually due until the date when such
payment(s) is actually made. Should any review establish an
underpayment in an amount greater than or equal to five percent
(5%) of the amount properly due, Aequus shall pay all reasonable
costs, expenses and fees incurred by WorldGate in connection with
the audit. Aequus shall keep such accounts and records for at
least three (3) years after termination of this Agreement or
four (4) years after the end of the Contract Year to which
they relate, whichever is earlier. The individual or entity conducting any
audits hereunder shall be bound by reasonable obligations of
confidentiality in respect of any information disclosed by such
audits. Notwithstanding the foregoing, WorldGate shall not
have any audit rights with respect to VRS Reimbursement Revenue and
related fees based on such revenue with respect to any Contract
Year during the Term for which Aequus has paid both the maximum
License Fee of fifty thousand dollars ($50,000), and the maximum
Maintenance and Update Services Fee of three hundred fifty thousand
dollars ($350,000).
(D)
A mounts properly due and owing but not
timely paid to WorldGate pursuant to this Agreement shall bear
interest calculated at the rate of one percent (1%) per month
accruing from the date the relevant payment(s) were actually
due until the date when such payment(s), including interest
thereon, are actually made.
4.
Service
Coordinator
WorldGate and
Aequus will each designate a service coordinator (each a
“Service Coordinator”), who will have primary
responsibility for communicating with respect to that
8
Party’s
performance hereunder. Each Party may replace its Service
Coordinator with a comparable replacement by giving the other Party
as much advance written notice as practicable of such
replacement. Each Party shall be entitled to rely on all
decisions and approvals of the other Party communicated by the
other Party’s Service Coordinator. The general
responsibilities of the Service Coordinator shall be to:
(a) establish a formal communication forum between WorldGate
and Aequus with respect to the work hereunder; and (b) monitor
the general progress of the performance of such work.
5.
Work
Product.
5.1
Ownership of
Work Product . Unless
otherwise specifically agreed
in an SOW, each Party will retain all right, title and interest in
its own Work Product; provided that such ownership rights
will not
|