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LICENSE , MAINTENANCE AND UPDATE SERVICES AGREEMENT

Consulting Services Agreement

LICENSE , MAINTENANCE AND UPDATE SERVICES AGREEMENT | Document Parties: Aequus Technologies Corp | Ojo Service, LLC | Snap Telecommunications Inc | WorldGate Communications, Inc You are currently viewing:
This Consulting Services Agreement involves

Aequus Technologies Corp | Ojo Service, LLC | Snap Telecommunications Inc | WorldGate Communications, Inc

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Title: LICENSE , MAINTENANCE AND UPDATE SERVICES AGREEMENT
Governing Law: Pennsylvania     Date: 4/17/2008
Industry: Broadcasting and Cable TV     Sector: Services

LICENSE , MAINTENANCE AND UPDATE SERVICES AGREEMENT, Parties: aequus technologies corp , ojo service  llc , snap telecommunications inc , worldgate communications  inc
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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

 

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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

 

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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

 

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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

 

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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:

 

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(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.

 

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(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

 

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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

















 
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