License Agreement - FairPoint Communications Inc. and Artera Group Inc.
LICENSE AGREEMENT
License Agreement made as of August 15, 2002 by and between FairPoint
Communications, Inc., a Delaware corporation ("Licensee" or "FAIRPOINT"), and
Artera Group, Inc., a Delaware corporation ("ARTERA").
WHEREAS Licensee is engaged in the marketing of Internet services to the
customers of the Incumbent Local Exchange Carrier companies and Internet Service
Provider companies that Licensee owns ("FAIRPOINT ILECs" and "FAIRPOINT ISPs",
respectively); and
WHEREAS Artera Group, Inc. is engaged in the development and distribution of
Internet infrastructure technology called "Artera Turbo" that adds value to the
services sold by FAIRPOINT and its Affiliates; and
WHEREAS Licensee is desirous of obtaining a license from ARTERA to use and sell
the "Artera Turbo" technology;
NOW THEREFORE, in consideration of the mutual covenants contained herein, as
well as other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
ARTICLE 1. DEFINITIONS
As used herein, the terms described below have the following meanings.
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1.1 "Affiliate" shall mean any legal entity that, directly or indirectly, is
controlled by, in control of, or under common control with the legal entity
with reference to which the term "Affiliate" is used.
1.2 "ARTERA Technology License" shall mean the license to the Licensed Patents
and the Licensed Technology granted by ARTERA to Licensee under Article 2
of this Agreement.
1.3 "Confidential Information" shall mean the information described in Article
5 below and shall include the Deliverables and any and all samples, models,
prototypes, drawings, specifications, formulas, algorithms, software,
operating techniques, processes, data, technical and other information,
including any information relating to the status of research or other
investigations being conducted, whether given in writing, orally, or in
magnetic or other electronic processing form to the extent that such
information is not in the public domain through other than a breach of this
Agreement.
1.4 "Deliverables" shall mean the models, specifications, codes and other
documentation and materials described on Schedule A hereto to be delivered
by ARTERA to Licensee under Section 4.3 of this Agreement.
1.5 "Know-how", in general, will have its usual and accepted meaning, that is,
inter alia, all factual knowledge and information not capable of precise,
separate description but which, in an accumulated form, after being
acquired as the result of trial and error, gives to the one acquiring it an
ability to produce and market something which one otherwise would not have
known how to produce and market with the same accuracy or precision
necessary for commercial success.
1.6 "Licensed Patents" shall mean all those patents relating to "Artera Turbo"
that are owned by ARTERA together with those patents issued under patent
applications filed or to be filed relating to "Artera Turbo" including any
continuations, continuations-in-part,
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divisions, extensions, reissues, re-examinations or renewals of any of the
foregoing. Such Licensed Patents as pending as of the hereof are set forth
on Schedule D hereto.
1.7 "Licensed Product" shall mean a product embodying or employing all or part
of the Licensed Patents or Licensed Technology, sold as a bundled or
unbundled add-on subscription product or service, including, but not
limited to, "Artera Turbo" and all updates, enhancements and/or derivatives
thereof.
1.8 "Licensed Technology" shall mean that unpatented technology relating to
"Artera Turbo" and owned by ARTERA now or in the ----------------------
future.
1.9 "Market" shall mean any residential or business users of Internet access in
the United States of America..
1.10 "Technical Information" shall mean technical, design, engineering, and
manufacturing information and data pertaining to the design, manufacture,
commercial production and distribution of Licensed Products in the form of
designs, prints, plans, material lists, drawings, specifications,
instructions, reports, records, manuals, other written materials, computer
programs and software and other forms or media relating thereto.
ARTICLE 2. LICENSES
2.1 The ARTERA Technology License - License to Licensed Products, Licensed
Patents and Licensed Technology. Subject to the terms and conditions of
this Agreement, ARTERA hereby grants to Licensee and its Affiliates a
license to use, distribute and sell Licensed Products that incorporate,
embody or are based on a Licensed Patent or Licensed Technology.
2.2 Limitations. The ARTERA Technology License shall be limited to the Market,
and shall be non-exclusive against all others only as to the use,
distribution and sale of Licensed Products in the Market.
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2.3 Assignments and Sublicensing. The rights and licenses granted hereunder may
not be sublicensed, conveyed, assigned or otherwise transferred by Licensee
to any third party.
2.4 Acceptance. Licensee hereby (i) accepts the rights under the ARTERA
Technology License granted to it by ARTERA under this Article 2, and (ii)
acknowledges that the rights that ARTERA has granted to Licensee hereunder
are non-exclusive and limited to the use, distribution and sale of Licensed
Products in the Market subject to the limitations set forth herein.
2.5 Patents and Copyright Notices. Licensee shall mark each Licensed Product
sold, leased, distributed or otherwise transferred and shall cause all
licenses, contracts and agreements with other parties for the sale, lease,
distribution, use or other disposition of Licensed Products to contain a
provision requiring, if feasible in Licensee's reasonable opinion, such
other parties to mark each Licensed Product with a suitable legend
identifying the Licensed Patents and Licensed Technology with the
appropriate patent or copyright notice, as the case may be, in the form
provided to Licensee by ARTERA. If, in Licensee's reasonable opinion, the
Licensed Product is too small to have a legend placed on it, Licensee will
use all reasonable efforts to have a legend placed on the software and/or
packaging.
ARTICLE 3. FEES AND ROYALTIES
3.1 Upfront Fees. FAIRPOINT shall pay no upfront license fees under this
Agreement.
3.2 Unit Royalties for Residential Subscribers. For each Licensed Product unit
sold to an end user by or through FAIRPOINT, FAIRPOINT shall pay ARTERA a
unit royalty as follows: (a) If the price of the unit on ARTERA's standard
price sheet for the month of the sale to the end user by or through
FAIRPOINT (the "Standard Price") is $10.00 or more, the unit royalty is the
greater of 50% of the price of the unit to the end user in the sale by or
through FAIRPOINT (the "FAIRPOINT Price") or $5.00; and (b) if the
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Standard Price is less than $10.00, the unit royalty is the greater of 50%
of the Standard Price or 50% of the FAIRPOINT Price. ARTERA's "Standard
Price" to Licensee for each Licensed Product shall be the most favorable
price offered to any customer or licensee or otherwise by ARTERA.
3.3 Unit Royalties for Business Subscribers. For each Licensed Product unit
sold to a business user by or through FAIRPOINT, FAIRPOINT shall pay ARTERA
a unit royalty as follows: (a) If the price of the unit on ARTERA's
standard price sheet for the month of the sale to the business by or
through FAIRPOINT (the "Standard Price") is $55.00 or more, the unit
royalty is the greater of 50% of the price of the unit to the end user in
the sale by or through FAIRPOINT (the "FAIRPOINT Price") or $27.50; and (b)
if the Standard Price is less than $55.00, the unit royalty is the greater
of 50% of the Standard Price or 50% of the FAIRPOINT Price. ARTERA's
"Standard Price" to Licensee for each Licensed Product shall be the most
favorable price offered to any customer or licensee or otherwise by ARTERA.
3.2 Payment. FAIRPOINT shall pay the royalties owed ARTERA on the fifteenth day
after the end of each calendar month.3.4
3.5 Customer Support Services. Except as set forth in Schedule B hereto,
FAIRPOINT agrees to support all FAIRPOINT customer subscribers in a
commercially reasonable manner.
3.6 Residential Subscriber Threshold Requirement. Licensee agrees that as of
February 1, 2003 it shall have 7,500 subscribers and as of June 1, 2003 it
shall have 15,000 subscribers. If Licensee fails to meet these thresholds,
then the unit royalties set forth in subsection 3.2 shall be altered as
follows until such date as such thresholds are met:
(a) If the price of the unit on ARTERA's standard price sheet for the
month of the sale to the end user by or through FAIRPOINT (the
"Standard Price") is $10.00 or more, the unit royalty is the
greater of 60% of the price of the
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unit to the end user in the sale by or through FAIRPOINT (the
"FAIRPOINT Price") or $6.00; and (b) if the Standard Price is
less than $10.00, the unit royalty is the greater of 60% of the
Standard Price or 60% of the FAIRPOINT Price.
ARTICLE 4. DISCLOSURE OF INFORMATION, DATA AND KNOW-HOW
4.1 Disclosure. The parties shall disclose to each other such appropriate
Technical and/or Confidential Information as may be reasonably required to
accomplish the purposes of this Agreement. It is agreed, however, that
neither party shall be obligated to disclose information, the disclosure of
which has been restricted by a third party.
4.2 Treatment. All disclosed Technical Information which is Confidential
Information (as defined in Article 5 below) shall be kept confidential by
the receiving party in accordance with the further provisions of Article 5
below and will remain the property of the disclosing party.
4.3 Deliverables. ARTERA shall deliver the Deliverables to Licensee and in
accordance with the delivery dates set forth on Schedule A hereto.
ARTICLE 5. CONFIDENTIALITY
5.1 Definitions. Each party possesses and will continue to possess confidential
information relating to its business and technology, which has substantial
commercial and scientific value in the business in which it is engaged
("Confidential Information"). Subject to Section 5.4, Confidential
Information includes, but is not limited to: Deliverables, Technical
Information, trade secrets, processes, formulas, data and Know-how,
discoveries, developments, designs, improvements, inventions, techniques,
marketing plans, strategies, forecasts, new products, software
documentation, unpublished financial statements, budgets, projections,
licenses, prices, costs, customer lists, supplier lists and any other
material marked "Confidential Information", "Proprietary Information" or in
some other reasonable manner to indicate it is confidential. Any
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Confidential Information disclosed between the parties hereto orally or
visually, in order to be subject to this Agreement, shall be so identified
to the receiving party at the time of disclosure and confirmed in a written
summary appropriately marked as herein provided within ten (10) days after
such oral or visual disclosure.
5.2 Treatment. Each party shall during the term of this Agreement and for a
period of five (5) years thereafter, hold in confidence and not disclose to
third parties except as specifically permitted under this Section 5.2 and
Section 5.4 below any and all Confidential Information of the other party
disclosed directly or indirectly to it by the other party.
Each party shall take the following minimum safeguards with respect to the
Confidential Information of the other party:
(a) only those of its employees who need to receive the other party's
Confidential Information in order to carry out the purposes of this
Agreement shall have access to such information and such access shall
be limited to only so much of such information as is necessary for the
particular employee to properly perform his or her duties;
(b) all documents, drawings, writings and other embodiments which contain
Confidential Information of the other party shall be maintained in a
prudent manner in a secure fashion separate and apart from other
information in its possession and shall be removed therefrom only as
needed to carry out the purposes of this Agreement;
(c) all documents, drawings, writings and other embodiments of information
the security or safekeeping of which are subject to governmental
regulations shall be kept in accordance with those regulations;
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(d) all employees and contractors who shall have access to Confidential
Information of the other party shall be under written obligation to it
(i) to hold in confidence and not disclose all Confidential
Information made available to them in the course of their employment
or services; (ii) to use such Confidential Information only in the
course of performing their duties; and (iii) to assign to their
employer or the party retaining them all inventions or improvements
relating to such entity's business and conceived while in such
entity's employ or retained by such entity unless such assignment is
prohibited by applicable law.
Notwithstanding the foregoing, a party receiving Confidential Information
of the other party may disclose to its subcontractors and material and
component suppliers so much of such Confidential Information as is
necessary to enable such party to perform its duties and obligations
related to the accomplishment of the purposes of this Agreement provided
that such subcontractors and suppliers are obligated to such party in
writing (i) to hold in confidence and not disclose such information; and
(ii) not to use such information except as authorized by such party.
In no event shall the party receiving Confidential Information of the other
party disassemble, reverse engineer, re-engineer, redesign, decrypt,
decipher, reconstruct, re-orient, modify or alter any Confidential
Information of the disclosing party or any circuit design, algorithm, logic
or program code in any of the disclosing party's products, models or
prototypes which contain Confidential Information or attempt any of the
foregoing without first obtaining written consent of the disclosing party
in each instance.
5.3 Return. All documents, drawings, writings and other embodiments of a
party's Confidential Information, as well as those produced, created or
derived from the disclosing party's Confidential Information which
incorporate the disclosing party's Confidential Information, and all copies
thereof, shall be returned promptly to it by the other party upon the
termination of this Agreement provided that the parties shall continue to
be bound by the provisions of Section 5.2 above.
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5.4 Exclusions. Confidential Information shall not include information that:
(a) was at the time of disclosure in the public domain through no fault of
the party receiving it;
(b) becomes part of the public domain after disclosure to the party
receiving it through no fault of such party;
(c) was in the possession of the party receiving it (as evidenced by
written records) at the time of disclosure and was not acquired
directly or indirectly from the other party, or a third party, as the
case may be, under a continuing obligation of confidence of which the
party receiving it was aware;
(d) was received by the party receiving it (as evidenced by written
records) after the time of disclosure hereunder from a third party who
did not require it to be held in confidence and who did not acquire it
directly or indirectly from the other party under a continuing
obligation of confidence of which the party receiving it was aware;
(e) is required by law, governmental regulations, court order or the rules
of any relevant securities exchange to be disclosed, but only to the
extent of such required disclosure; provided, that a party required to
so disclose Confidential Information shall use best efforts to notify
the other party of such potential disclosure as soon as practicable so
that such party may seek a protective order or other remedies to
maintain in confidence any such Confidential Information;
(f) was developed independently by the receiving party and without the use
of any Confidential Information received from the disclosing party
under this Agreement; or
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(g) was or is disclosed by the party owning it to third parties without
restrictions on use or disclosure comparable to those contained
herein.
ARTICLE 6.
[Intentionally Blank]
ARTICLE 7. TERM
The term of this Agreement shall begin on the date hereof and, unless extended
or earlier terminated by the written agreement of the parties or the provisions
of Article 8 below, shall expire immediately upon the later of either: (i) with
respect to rights granted under any patent hereunder, the expiration of that
patent under applicable law; or (ii) with respect to the other rights granted
hereunder, upon the expiration of the last to expire of the patents licensed
hereunder, or (iii) ten years.
ARTICLE 8. TERMINATION
8.1 General. This Agreement may be terminated prior to the end of the term
provided in Article 8 above under any of the following provisions of this
Article.
8.2 Breach. In the event of a material breach of this Agreement, if the
defaulting party fails to cure the breach within thirty (30) days after
written notice thereof, in the case of a breach involving non-payment of
amounts to be paid hereunder, or sixty (60) days, in the case of any other
kind of breach following its receipt of written notice from the
non-defaulting party specifying the nature of the breach and the corrective
action to be taken, then the non-defaulting party may terminate this
Agreement forthwith by delivering its written declaration to the defaulting
party that this Agreement is terminated; provided any payment default will
require the defaulting party to pay interest in order to cover the default
at the rate of the then current prime rate at The Chase Manhattan Bank N.A.
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8.3 Insolvency. If one of the parties becomes bankrupt or insolvent, or files a
petition therefor, or makes a general assignment for the benefit of
creditors, or otherwise seeks protection under any bankruptcy or insolvency
law, or upon the appointment of a receiver of the assets of a party
("defaulting party"), then the other party shall have the right to
immediately terminate this Agreement upon written notice to the defaulting
party provided, in any such instance, that said right of termination shall
be postponed for as long as the defaulting party continues to conduct its
business in the ordinary course.
8.4 Survival of Certain Terms. Notwithstanding the termination of this
Agreement under any of the provisions of this Article 8, the terms and
conditions of Section 4.2 and Article 5 shall survive termination of this
Agreement and shall continue to be applicable and govern the parties with
respect to the subject matter thereof.
8.5 Document Return. Each party shall return to the other party within thirty
(30) days of the date of termination under either Article 7 or this Article
8 all of the Confidential Information, other secret information, patent
applications and Know-how received pursuant to this Agreement together with
all other tangible property loaned to the returning party for the
implementation of this Agreement.
ARTICLE 9. FORCE MAJEURE
In the event of enforced delay in the performance by either party of obligations
under this Agreement due to unforeseeable causes beyond its reasonable control
and without its fault or negligence, including, but not limited to, acts of God,
acts of the government, acts of the other party, fires, floods, strikes, freight
embargoes, unusually severe weather, or delays of subcontractors due to such
causes (an "Event of Force Majeure"), the time for performance of such
obligations shall be extended for the period of the enforced delay; provided
that the party seeking the benefit of the provisions of this Article 9 shall,
within ten (10) days after the beginning of any such enforced delay, have first
notified the other party in writing of the causes and requested an extension for
the period of the enforced delay and shall use all reasonable endeavors to
minimize the effects of any Event of Force Majeure.
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ARTICLE 10. APPLICABLE LAW
The terms and conditions of this Agreement and the performance thereof shall be
interpreted in accordance with and governed by the laws of the State of Delaware
and the United States of America.
ARTICLE 11. DISPUTE RESOLUTION
The parties agree to attempt in good faith to resolve any dispute arising out of
or in connection with the performance, operation or interpretation of this
Agreement promptly by negotiation between the authorized contacts of the parties
(which authorized contacts shall be named in writing at the time of the
dispute). If a dispute should arise, the authorized contacts will meet at least
once and will attempt to resolve the matter. Either authorized contact may
request the other to meet within fourteen (14) days of any dispute, at a
mutually agreed time and place. If the matter has not been resolved within
thirty (30) days of a request being made for such a meeting, the authorized
contacts shall refer the matter to the representatives of the parties (which
representatives shall be named in writing at the time of the dispute) who are
responsible for matters at the policy or strategic level who shall meet within
fourteen (14) days of the end of the thirty (30) day period referred to above,
at a mutually agreed time and place. If the matter has not been resolved within
thirty (30) days of a request being made for this meeting, the parties shall
proceed as follows:
(a) Any action, suit or proceeding where the amount in controversy as to
at least one party, exclusive of the interest and costs, exceeds One
Million Dollars (a "Summary Proceeding"), arising out of or relating
to this Agreement or the breach, termination or validity thereof,
shall be litigated exclusively in the Superior Court of the State of
Delaware (the "Delaware Superior Court") as a summary proceeding
pursuant to Rules 124-131 of the Delaware Superior Court, or any
successor rules (the "Summary Proceeding Rules"). Each of the parties
hereto hereby irrevocably and unconditionally (i) submits to the
jurisdiction of the Delaware Superior Court for any Summary
Proceeding, (ii) agrees not to
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commence any Summary Proceeding except in the Delaware Superior Court,
(iii) waives, and agrees not to plead or to make, any objection to the
venue of any Summary Proceeding in the Delaware Superior Court, (iv)
waives, and agrees not to plead or to make, any claim that any Summary
Proceeding brought in the Delaware Superior Court has been brought in
an improper or otherwise inconvenient forum, (v) waives, and agrees
not to plead or to make, any claim that the Delaware Superior Court
lacks personal jurisdiction over it, (vi) waives its right to remove
any Summary Proceeding to the federal courts except where such courts
are vested with sole and exclusive jurisdiction by statute and (vii)
understands and agrees that it shall not seek a jury trial or punitive
damages in any Summary Proceeding based upon or arising out of or
otherwise related to this Agreement and waives any and all rights to
any such jury trial or to seek punitive damages.
(b) In the event any action, suit or proceeding where the amount in
controversy as to at least one party, exclusive of interest and costs,
does not exceed One Million Dollars (a "Proceeding"), arising out of
or relating to this Agreement or the breach, termination or validity
thereof is brought, the parties to such Proceeding agree to make
application to the Delaware Superior Court to proceed under the
Summary Proceeding Rules. Until such time as such application is
rejected, such Proceeding shall be treated as a Summary Proceeding and
all of the foregoing provisions of this Section relating to Summary
Proceedings shall apply to such Proceeding.
(c) In the event a Summary Proceeding is not available to resolve any
dispute hereunder, the controversy or claim shall be settled by
arbitration conducted on a confidential basis, under the then current
Commercial Arbitration Rules of the American Arbitration Association
(the "Association") strictly in accordance with the terms of this
Agreement and the substantive law of the State of Delaware. The
arbitration shall be conducted at the Association's office in the
State of Delaware
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by three arbitrators, at least one of who shall be knowledgeable in
the field of Internet technology and at least one of who shall be an
attorney. Judgment upon the arbitrators' award may be entered and
enforced in any court of competent jurisdiction. Neither party shall
institute a proceeding hereunder unless at least sixty (60) days prior
thereto such party shall have given written notice to the other party
of its intent to do so. Neither party shall be precluded hereby from
securing equitable remedies in courts of any jurisdiction, including,
but not limited to, temporary restraining orders and preliminary
injunctions to protect its rights and interests but such shall not be
sought as a means to avoid or stay arbitration.
ARTICLE 12. ANNOUNCEMENTS & PUBLICITY; INDEPENDENT CONTRACTORS
Except for any disclosure that may be required by law (including filings with
the Securities and Exchange Commission), neither party may use the other's name
or disclose the terms of this Agreement without the consent of the other, which
consent shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, upon the execution of this Agreement ARTERA may issue a press release
in ARTERA's customary format and manner reporting the execution of this
Agreement and its general subject matter provided ARTERA shall have received
Licensee's prior written approval thereof which approval shall not be
unreasonably withheld or delayed. Each party to this Agreement is an independent
contractor and neither shall be considered the partner, employer, agent or
representative of the other.
ARTICLE 13. SEVERABILITY
If any part of this Agreement for any reason shall be declared invalid or
unenforceable, such decision shall not affect the validity or enforceability of
any remaining portion, which shall remain in full force and effect; provided,
however, that in the event a part of this Agreement is declared invalid and the
invalidity or enforceability of such part has the effect of materially altering
the obligations of any party under this Agreement, the parties agree, promptly
upon such declaration's being made, to negotiate in good faith to amend this
Agreement so as to put such party in a position substantially similar to the
position such party was in prior to such declaration.
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ARTICLE 14. RIGHTS OF ASSIGNMENT; SUCCESSORS AND ASSIGNS
Neither ARTERA nor Licensee shall have any right to assign this Agreement or any
of their respective rights or obligations under this Agreement to any third
party except by operation of law, or pursuant to Article 2 of this Agreement, or
with the prior written consent of the other party. In the event Licensee wishes
to assign any of its rights or obligations under this Agreement to an Affiliate
of Licensee, ARTERA's consent will not be unreasonably withheld. In the event
ARTERA wishes to assign any of its rights or obligations under this Agreement to
an Affiliate of ARTERA, Licensee's consent will not be unreasonably withheld.
The provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors and assigns of each party hereto.
ARTICLE 15. NOTICES
Any notices under this Agreement shall be in writing and shall be deemed
delivered on the date of delivery if delivered by personal service, telecopy
(and confirmed by first class mail) or recognized commercial courier service
with postage or charges prepaid, and on the third day following dispatch if sent
only by registered or certified mail with postage or charges prepaid. Unless
subsequently notified in writing in accordance with this Article 15 by the other
party, any notice or communication hereunder shall be addressed:
If to ARTERA, as follows:
Artera Group, Inc.
20 Ketchum Street
Westport, CT 06880
Attn: Chief Executive Officer
Telecopy No.: 203-226-3123
If to Licensee, as follows:
FairPoint Communications, Inc.
521 East Morehead Street
Suite 250
Charlotte, NC 28202
Attn: Senior Vice President, Corporate Development
Telecopy No.: 704-344-8143
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ARTICLE 16. TAXES
Licensee shall be solely responsible for any sales, use, occupational or
privilege taxes, duties, fees or other similar charges imposed by any
governmental authority in connection with the manufacture, sale, lease,
distribution, use or other disposition by Licensee of Licensed Products or the
Licenses granted hereunder. Any other taxes, including income taxes based on
royalties and other payments to ARTERA, shall be the responsibility of ARTERA.
ARTICLE 17. INDEMNIFICATION
Each of ARTERA and Licensee agrees to indemnify, defend, and hold harmless the
other party and each of its officers, directors, employees, agents, successors
and assigns (collectively, the "Indemnified Party") against any and all losses,
claims, damages, liabilities, costs and expenses (including without limitation,
reasonable attorneys' fees and other costs of defense of every kind whatsoever
and the aggregate amount of reasonable settlement of any suit, claim or
proceeding) which the Indemnified Party may incur or for which the Indemnified
Party may become liable on account of any suit, claim or proceeding purporting
to be based upon a failure to perform obligations under this Agreement to be
performed by the other party (the "Indemnifying Party") and/or its employees or
agents. The Indemnified Party shall promptly advise the Indemnifying Party of
any such suit, claim or proceeding and shall cooperate with the Indemnifying
Party in the defense or settlement of such suit, claim or proceedings providing
no settlement shall be made without the consent of the Indemnified Party, which
consent shall not be unreasonably withheld. In any event, the Indemnified Party
shall furnish to the Indemnifying Party such information relating to such suit,
claim or proceeding as the Indemnifying Party shall reasonably request for use
in defending the same.
ARTICLE 18. MAINTENANCE AND DEFENSE OF LICENSED PATENTS
18.1 Enforcement of Patents. Throughout the term of this Agreement, ARTERA shall
maintain in force the Licensed Patents. The Licensed Patents are all the
patents and/or other filings necessary to protect ARTERA's ownership of the
Licensed Products. In this
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connection, ARTERA shall promptly pay all costs of any and all
continuations, continuations-in-part, divisions, extensions, reissues,
re-examinations, or renewals of the Licensed Patents, including, without
limitation, the costs and expenses of any and all attorneys, experts or
other professionals engaged in connection with any of the foregoing. In
addition, ARTERA shall actively protect the Licensed Patents and shall
institute all such suits, actions or proceedings for infringement of any of
the Licensed Patents as may be necessary in this regard. Unless ARTERA
shall have received the advice of counsel that success on the merits is
reasonably certain, ARTERA shall be excused from its duty to commence
and/or may withdraw from any enforcement action under the Licensed Patents
and Licensee shall then be free to pursue enforcement of the Licensed
Patents in its own name and at its sole expense and risk, but only to the
extent such infringement occurs in the Market. In the event ARTERA fails to
commence an enforcement action or otherwise protect the Licensed Patents as
aforesaid after notice of possible infringement from Licensee, Licensee
shall be entitled by itself to institute proceedings in the name of and
with the cooperation of ARTERA to restrain any such infringement at
Licensee's expense and for Licensee's benefit. Where Licensee proceeds
alone and achieves an award from the official enforcement forum in such an
action brought by it, Licensee shall be entitled to retain such award.
However, any compromise of such enforcement action or concession of
invalidity or priority of invention of any patent, whether in connection
with an enforcement action or any other proceeding, shall require ARTERA's
participation and express prior written approval. If ARTERA has elected to
participate in and share in the expense of any such enforcement action,
ARTERA and Licensee shall share any award in the same percentage as the
parties shared the expenses of any such enforcement action.
18.2 Infringement. ARTERA shall defend and save harmless Licensee against any
suit, damage claim or demand, and any loss, cost or expense suffered as a
result thereof (including reasonable attorneys' fees), based on actual or
alleged infringement of any patent or trademark or any unfair trade
practice resulting from the exercise or use, in accordance with this
Agreement, of any right or license granted under this Agreement, provided
that Licensee (a) promptly notifies ARTERA of such suit, claim or demand
and (b) provides ARTERA
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with such assistance as ARTERA may reasonably request for the defense or
settlement of such suit, claim or demand. Notwithstanding the foregoing,
ARTERA shall have no liability to defend or pay damages or costs to
Licensee with respect to any claim of infringement that is based on an
implementation designed or modified by any third party or Licensee's use of
the Licensed Patents or the Licensed Technology for any purpose other than
the design, manufacture, use or sale of Licensed Products pursuant to this
Agreement.
ARTICLE 19. WARRANTIES
ARTERA represents and warrants that it has the right, power and authority to
enter into this Agreement and to grant the licenses and other rights contained
herein to Licensee as herein provided and that none of the same will breach or
be in violation of any agreement, license, or grant made with or to any other
party by ARTERA or otherwise violate the rights of any third party and that to
the best of ARTERA's knowledge and belief the Licensed Patents and the Licensed
Products are valid and do not infringe any other patent issued prior to the date
hereof. ARTERA represents and warrants that it owns all right, title and
interest in and to the Licensed products free and clear of all encumbrances.
ARTERA represents and warrants that the Licensed Products will conform in all
material respects with the product and technical specifications set forth on
Schedule C and Exhibit 2 hereto, subject only to the operating environment
limitations set forth on Schedule C and Exhibit 2 hereto.
ARTICLE 20. DISCLAIMER
EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, ARTERA HEREBY DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTY OF THE ACCURACY, RELIABILITY, TECHNOLOGICAL OR
COMMERCIAL VALUE, COMPREHENSIVENESS OR MERCHANTABILITY OF THE LICENSED PATENTS
OR THE LICENSED PRODUCTS, OR THEIR SUITABILITY OR FITNESS FOR ANY PURPOSE
WHATSOEVER. ARTERA DISCLAIMS ALL OTHER WARRANTIES OF WHATEVER NATURE, EXPRESS OR
IMPLIED. ARTERA DISCLAIMS ALL LIABILITY FOR ANY LOSS OR DAMAGE RESULTING,
DIRECTLY OR INDIRECTLY, FROM THE USE OF THE LICENSED PATENTS OR THE LICENSED
PRODUCTS, OTHER THAN THOSE
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ARISING FROM CLAIMS OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THIS DISCLAIMER
EMBRACES CONSEQUENTIAL DAMAGES, LOSS OF PROFITS OR GOODWILL, EXPENSES FOR
DOWNTIME OR FOR MAKING UP DOWNTIME, DAMAGES FOR WHICH LICENSEE MAY BE LIABLE TO
OTHER PERSONS, DAMAGES TO PROPERTY AND INJURY TO OR DEATH OF ANY PERSONS.
ARTICLE 21. SUPPORT SERVICES
ARTERA shall provide Licensee with engineering, maintenance and sales support
with respect to Licensed Products to be sold, leased, distributed or otherwise
transferred by Licensee under this Agreement to the extent set forth in Schedule
B hereto.
ARTICLE 22. SCOPE OF AGREEMENT
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior oral or written agreements
or understandings of the parties with regard to the subject matter hereof. No
interpretation, change, termination or waiver of any provision hereof shall be
binding upon a party unless in writing and executed by the other party. No
modification, waiver, termination, recession, discharge or cancellation of any
right or claim under this Agreement shall affect the right of any party hereto
to enforce any other claim or right hereunder.
IN WITNESS WHEREOF, FAIRPOINT and ARTERA have executed this Agreement as of the
date first written above.
FAIRPOINT COMMUNICATIONS, INC. ARTERA GROUP, INC.
By: /s/ Peter G. Nixon By: /s/ Michael J. Parrella
-------------------------------------- ------------------------------
Name: Peter G. Nixon Name: Michael J. Parrella
-------------------------------------- ------------------------------
Title: Sr. VP of Corporate Development Title: Chairman & CEO
-------------------------------------- ------------------------------
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SCHEDULE A
----------
DELIVERABLES
Pursuant to Section 4.3 of this Agreement, ARTERA will supply Licensee with
the following Deliverables on or before the dates set forth below:
Deliverable within 30 days of signing
-------------------------------------
1. Artera Turbo products that function as described in Schedule C.
2. Artera Turbo Software downloadable from the Internet.
3. Documentation downloadable from the Internet.
4. Reproducible Artera Turbo Installation CD, which includes documentation.
5. Sales Presentations and literature in electronic form.
6. Technical presentations in electronic form.
Deliverable with target date of January 1, 2003
-----------------------------------------------
The "Artera Turbo" product for POP 3 and FTP.
Virtual Private Networks.
Road Warrior Option.
Deliverable upon request
------------------------
Micro Data Centers at negotiated prices.
Deliverable within 30 days of general availability
--------------------------------------------------
Artera Turbo products, as enhanced or updated from time to time with all
derivatives thereof.
Artera Operation under the Linux operating system.
Apple Mac version.
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SCHEDULE B
----------
SUPPORT SERVICES
ARTERA will provide Licensee with engineering, maintenance and sales support
services as described below.
Services
--------
1. Regional Data Centers sized appropriately to handle subscription base
that agree to the Service Level Agreement (SLA) defined in Exhibit 1.
2. Micro Data Center support at negotiated prices.
3. Artera Turbo Technical Support for FairPoint Customer support
services.
4. Artera Turbo technical training.
5. Artera Turbo sales training.
6. Artera Turbo web-based customer support system.
ARTERA will also provide API interfaces from its CRM to FairPoint's support
customer systems that exist from time to time.
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SCHEDULE C
----------
ARTERA TURBO PRODUCT DESCRIPTION
Artera Turbo Products and Service Offerings
-------------------------------------------
Artera's service offerings address both the residential and business markets and
are packaged and priced for both single-PC and multiple-PC environments.
As a service offering, every user must be a registered subscriber in order to
enable the Artera software. Subscription and authentication for each of the
products is through the Artera CRM systems via either the publicly accessible
Internet web site or the private extranet available to each Artera channel
partner. This prevents unauthorized use and allows Artera partners to freely
distribute Artera client software without fear of piracy.
Single-PC Products
Artera's single-PC residential subscriber product includes client-side Artera
Turbo software packaged as a self-installing software-only product that is
loaded on the subscriber's computer.
In the case of a dial-up user, the phone line may be either shared (i.e. the
subscriber has only one line to the home) or dedicated where a second line is
used exclusively for data communications.
-------------------------- ---------------------------- ------------------------
Single-PC Artera Turbo Artera Turbo
Configuration ONE DIAL LINE TWO DIAL LINES
-------------------------- ---------------------------- ------------------------
Achieved Speed >256K bps >512K bps
-------------------------- ---------------------------- ------------------------
The Single-PC offering is the principal product for the residential market. It
is also an important offering for small businesses and traveling professionals.
Multiple-PC Products
Artera's multiple-PC product is comprised of two components:
o Artera software a self-installing software-only product that is loaded
on the subscriber's computer (the same software as the single-PC
product)
o Artera software, which is installed on a PC, designated as a
communication gateway for the office.
Multiple-PC systems support the use of two or four dedicated phone lines, which
are connected to the Artera gateway PC. These lines are shared by all of the PCs
at the site. The multiple-PC product is the principal offering to businesses
with more than one PC and to the growing multi-PC residential marketplace.
-------------------------- ---------------------------- ------------------------
Multiple-PC Artera Turbo Artera Turbo
Configuration TWO DIAL LINES TWO DIAL LINES
-------------------------- ---------------------------- ------------------------
Achieved Speed >512K bps >1,000K bps
-------------------------- ---------------------------- ------------------------
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Residential and Business Product Features
-----------------------------------------
The following matrix highlights the different features of the business and
residential product offerings.
Established Communications Platform
-----------------------------------
--------------------------------------------------------------------------------
Feature Corporate Corporate Residential Residential Residential
Set Gateway Client Gateway User 2-line User 1-line
--------------------------------------------------------------------------------
VPN
E-Mail Saver X X n/a n/a n/a
Net Switcher X n/a X n/a n/a
User Accounting X X n/a X X
Sight Blocking X X X X X
Ad Optimization X X X X X
Content Control X X X X X
DHCP Server X n/a X n/a n/a
Line Teaming 16 2 2 2 1
Firewall X X X X X
PC Sharing X n/a X n/a n/a
SmartHost X X X X X
Max. Users 250 1 5 1 1
--------------------------------------------------------------------------------
* This is the
Road Warrior
Version
The Artera Turbo technology has been integrated into a complete Internet access
platform provided by a NCT Group subsidiary, MidCore Software, Inc. This
platform, includes everything required to connect to the Internet, such as
router, firewall, content control, usage accounting, email server and many more
features in a single plug-and-play solution - all optimized for speed. This
platform is currently installed in over 5,000 locations with in excess of 60,000
users.
This combination is ideally suited to end users and organizations that have
limited or no access to IT expertise. Artera's full service IT solution
offerings address the needs of small and medium businesses for connectivity,
security, managed Internet applications, accountability, capability and
standards compliance. Many competitive platforms solutions have bolted together
software from different sources to provide a solution. In contrast, Artera Turbo
and all of its features were written from the ground up to ensure maximum
performance and compatibility.
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Some of the important features provided by Artera include:
> PC sharing
> Firewall protection
> Virtual private networking
> Secure email server
> Connection Teaming(TM)
> Usage accounting
> Site blocking
> Content control
> DHCP server
> Road Warrior
Source: Artera Group, Inc.
--------------------------------------------------------------------------------
PC Sharing: Establishing Internet access involves connecting multiple computers
together to share the network connection. Artera's integrated router eliminates
the need to purchase or install additional router hardware.
Firewall Security: Ultra-secure firewall protects businesses from unwanted
access from the Internet. Gartner Group reported that 60% of small and medium
businesses with always on Internet connections are accessed by unauthorized
third parties and that less than 50% of those are aware of any intrusion. Full
security protection is a requirement for both residential and business
subscribers.
Secure Internet Communication - Virtual Private Networking: Businesses with
multiple locations look for solutions to interconnect offices in order to
transfer data between locations. Traditionally, these networks were built with
private communications lines. While this ensured security, it was very
expensive. Virtual Private Network allows businesses to achieve the same
security over Artera's shared network using state of the art encryption. This
provides the highest level of security at a fraction of the cost of a private
network.
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Managed Internet Email: Artera's secure email server is a full-featured,
easy-to-administer part of the integrated solution. This eliminates the cost and
technical skills required to integrate and operate standalone email servers,
such as Microsoft Exchange Server.
Site Blocking and Usage Accounting: Many productivity gains won with shared
access for all employees and managed Internet applications are too often
countered with unproductive Internet activities by employees. Non-productive
Internet activities are avoided by blocking undesirable sites on a user basis
(for example, management may be allowed to look at stock quote sites, but not
employees) and by specifying industry standard content control filtering (much
like what is done on television). Maintaining access records for all Internet
traffic provides complete accountability. Management can use these records to
enforce company Internet access policies. Site blocking and usage accounting are
also important residential features to protect children.
Scalability and Standards Compliance: Residential and business customers have
standardized on Microsoft Windows platforms to ensure scalability and
compatibility with future applications. The vast majority of all new
applications and services are developed on Windows and will continue to be so
for the foreseeable future.
Hardware and Software Requirements.
Residential.
Software: Win98, Win Me, Win2000, Win XP, Win NT
Hardware: Intel PII, PIII, PIV, Celeron, 486, 386
200 MB disk space
Broadband connection or dial up
Business. The individual user PCs have the same requirements as the Residential
users.
Software for Appliance: Win98, Win2000
Hardware for Appliance: Intel PII, PIII, PIV, Celeron 750
2 gigabytes disk space
Broadband connection or 2 (or more) dialup lines.
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SCHEDULE D
----------
ARTERA TURBO INTELLECTUAL PROPERTY
1. System And Method For Increasing the Effective Bandwidth of a
Communications Network - Attorney Docket No. 20275-06.
2. A System and Method for Reducing the Time to Deliver Information from
a Communications Network to a User - Attorney Docket No. 20275-07.
3. A System and Method for Modifying a Data Stream using Element Parsing
- Attorney Docket No. 20275-08.
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Exhibit 1
---------
Service Level Agreement for Artera Regional Data Centers
I. General
------------
Artera shall provide the agreed to service levels (as described below)
seven (7) days a week, twenty-four (24) hours a day, consisting of
monitoring, notification, repair of service outages and maintenance, as set
forth in this SLA.
For the term and all renewal periods the evaluation of Artera's performance
against this SLA will be evaluated on a quarterly basis beginning ninety
(90) days from the start of the term or any renewal period.
If Artera fails to meet 99.5% Systems Availability, excluding scheduled
maintenance windows, as set forth in Section VI below, the Customer will be
credited according Section X.
This agreement excludes events resulting from acts of God, war, acts by
civil or military authorities, energy shortages, acts or omissions on
behalf of the Customer or other causes beyond Artera's control, whether or
not similar to the foregoing.
II. Monitoring
---------------
In an effort to detect potential problems before they impact the
availability and performance of the system or services, Artera monitors the
status of the systems using both automated and manual tools employed in its
24 by 7 system monitoring and administration.
This monitoring includes but is not limited to:
System availability
Service availability
Database connectivity and performance
System load
Network availability and performance
System Usage
III. System Availability
------------------------
System Availability is defined as the operable state of Artera's Regional
Data Center Platform in that service functionality is Availability to the
Customer and its Users as described in this Agreement. System Availability
does not take into account the performance or inability of such Users to
access Artera's systems as a result of such Users' Internet/network
connection nor does it take into effect Artera's vendors ability to update
content. Due to the architectural design of the Internet, occasions may
arise that prohibit access to Artera's system based on the user's Internet
Service Provider's (ISP) fault or failure or by the path (route) traveled
27
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in accessing Artera's systems. These system accessibility issues will be
analyzed, however, resolution may be out of the control of Artera.
IV. Data Integrity
-------------------
Artera will provide a minimum of 99.5% integrity of system and User data.
In addition, Artera will maintain the highest level of data security and
confidentiality as is commercially reasonable in this industry.
V. Security
-------------
Artera's Systems Security Department is expected to maintain the security,
stability and integrity of Artera's systems as well as to ensure proper
conduct by the users.
System Intrusion - In the event of a system intrusion by a "cracker" or
"hacker", the affected party (ies) will be notified and a solution will be
implemented. Notification will occur upon identification of intrusion.
VI. Scheduled Maintenance Windows
----------------------------------
Artera has reserved a two (2) hour window from 1:30 am - 3:30am EST every
Sunday evening - Monday morning for weekly maintenance, should the need for
such maintenance arise. In the event that this window will be needed in a
given week, Artera will notify the Customer no less than forty-eight (48)
hours prior to the window. If it is determined during the window that the
scheduled maintenance will run over the two (2) hour window, the Customer
will be notified immediately and receive regular updates until the period
is complete. During these scheduled maintenance periods, the system and
services may be unavailable to Customer and Customer's Users. Scheduled
Maintenance Windows are not counted against the 99.5% System Availability
guarantee in Section X.
VII. Emergency Maintenance Notification
---------------------------------------
In the event that emergency maintenance is required, during which time the
system and services will be unavailable to Customer and Customer's Users.
Artera will make commercially reasonable efforts to notify the customer
during this window where practical and as not to prolong of negatively
effect system service or it's availability. Emergency maintenance windows
are counted against the 99.5% System Availability guarantees in Section X.
IX. Incident Management
------------------------
Artera's Customer Support Group will be fully responsible for the control
and management of incident calls and their assignment of priority and
escalation to resources within Artera in their sole and absolute
discretion.
28
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When analyzing a case, it is important that the partner or the Users
understand that the Customer Support Group will expect the partner or the
Users to aid in the analysis by providing any information and performing
any actions or tasks requested by the analyst. The partner and any User who
is not willing to assist the analyst must understand that the case may take
longer to solve and will not be included in the measurement of this service
level agreement.
The following priority allocations will apply:
---------------------------------------------------------------------------
Priority 1 - These cases are defined as an Artera system condition where
50% or more of the User population is affected in their ability to access
services as a result of outage across a service location.
Time Frame - Response to the partner within fifteen (15) to thirty (30)
minutes of identification or receipt of notification
Follow-up - Provide updates to the partner at appropriate intervals until
problem is resolved.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Priority 2 - These cases are defined as an Artera system condition where
less than 25% of the user population is affected in their ability to access
services as a result of partial functionality.
Time Frame - Response to the partner within four (4) hours of
identification or receipt of notification
Follow-up - Provide updates to the partner every four (4) hours until
problem is resolved.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Priority 3 - These cases are problems other than those meeting the
specifications of Priority 1 or Priority 2.
Time Frame - Response to the partner within twenty-four (24) hours of
identification or receipt of notification
Follow-up - Provide updates to the partner at appropriate intervals until
problem is resolved.
---------------------------------------------------------------------------
Upon the identification of a system event, Artera will make every
commercially reasonable effort to correct the system or service event if
the most expeditious manner possible.
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X. Reporting
--------------
During the term and any extension or renewal period, upon the Customer's
request, Artera shall provide an SLA evaluation report via e-mail within
fifteen (15) days of the request by the customer. The Customer shall not
request more than one report every 90 days. SLA credits shall be given if
the following service metrics are not met.
99.5% Availability (Uptime): For each 0.2% less than 99.5%, ARTERA would
provide a 5% discount on that given month's monthly per user fees.
Data Integrity: For each .1% less than 99.5% monthly, ARTERA would provide
a 5% discount on that given month's monthly per user fee
30
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Exhibit 2
---------
FairPoint Presentation - Tech Overview 8/15/2002
This document is included
31