Exclusive Marketing License Agreement - FairPoint Broadband Inc. and Artera Group Inc.
EXCLUSIVE MARKETING LICENSE AGREEMENT
This Exclusive Marketing License Agreement ("Agreement") dated as of October 11,
2002 (the "Effective Date") by and between FairPoint Broadband, Inc.
("FAIRPOINT"), a Delaware corporation and a wholly owned subsidiary of FAIRPOINT
Communications, Inc., and Artera Group, Inc. ("ARTERA"), a Delaware corporation.
WHEREAS FAIRPOINT is engaged in the marketing of Internet services to Incumbent
Local Exchange Carriers ("ILECs"), Rural Local Exchange Carriers ("RLECs"),
Competitive Local Exchange Carriers ("CLECs") and Internet Service Providers
("ISPs"); and
WHEREAS ARTERA is engaged in the development, distribution and operation of
Internet infrastructure technology and services designed to enhance the speed of
Internet connections and communications ("ARTERA TURBO"). ARTERA TURBO is
currently marketed by ARTERA for use on residential and business computers.
ARTERA is currently developing additional products and technology derived from
and related to ARTERA TURBO, including but not limited to similar technology and
service for switchable use on lap top computers ("ROAD WARRIOR") and for
creating virtual private local area networks (LANs) and virtual private wide
area networks (WANs) using public access systems (Virtual Private Networks, or
"VPNs"); and
WHEREAS ARTERA's technology and services can add value to the services sold by
FAIRPOINT and FAIRPOINT is desirous of obtaining from ARTERA the right to market
ARTERA TURBO products and services on a wholesale basis, including the exclusive
right to market ARTERA TURBO products on a wholesale basis to certain ILECs and
RLECs and to
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certain specifically identified ISPs, as well as a non-exclusive
right to market to other wholesale markets with ARTERA's consent; and
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.
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 "Aggregate Net Revenue" shall mean the total revenue received by
FAIRPOINT from its Customers or End Users pursuant to this Agreement
less (a) all Unit Royalties paid or payable to ARTERA; (b) all Support
Fees paid or payable to, or retained by, FAIRPOINT Customers; and (c)
all taxes paid or payable by FAIRPOINT under Article 18 and not
recovered by FAIRPOINT from the Customer or End User.
1.3 "ARTERA Business License" shall mean a single or multi-seat ARTERA
License granted to a Small Business to allow the use of the Licensed
Products by multiple users within that Small Business. An ARTERA
Business License includes the right to use the technology and
equipment provided to the Small Business by ARTERA to provide for the
business environment, as well as the End User Software for each
licensed seat.
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1.4 "ARTERA License" or "ARTERA End User License" shall mean the license
to use the Licensed Product(s), the Licensed Patents and the Licensed
Technology granted by ARTERA to an End User to allow the End User to
use the Licensed Product(s) on its computer(s). "ARTERA License" and
"ARTERA End User License" shall include ARTERA Business Licenses.
1.5 "Business End User" shall mean a user and licensee of the Licensed
Products pursuant to an ARTERA Business License. The term "Business
End User" refers to the Small Business entity that is the licensee
under an ARTERA Business License and not to the individual users
within that business entity.
1.6 "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.
1.7 "Customer" or "FAIRPOINT's Customer" shall mean a wholesale customer
of FAIRPOINT through whom FAIRPOINT markets the Licensed Products for
licensing to End Users, or to whom FAIRPOINT has sublicensed its
rights under this Agreement. FAIRPOINT's Customers include, but are
not limited to, FAIRPOINT's Market Members. Customers other than
Market Members may include, for example, computer retailers, CLECs,
business software developers, or similar businesses whose service or
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product represents a potential wholesale conduit of Licensed Products
to End Users, and to whom FAIRPOINT markets the Licensed Products with
ARTERA's consent pursuant to Section 2.1 below.
1.8 "CRM System" shall mean the accounting and functional interface system
provided by ARTERA that as a part of the ARTERA TURBO support system
allows End Users of FAIRPOINT or its Customers to be uniquely
identified from other End Users of the Licensed Product, and, through
the ARTERA reseller center, allows FAIRPOINT and ARTERA to interface
with ARTERA's records and systems for the purpose of initiating ARTERA
End User Licenses pertaining to FAIRPOINT or its Customers, activating
or deactivating those End Users' access to the Internet Platform,
billing or invoicing those End Users and otherwise providing first
level support to those End Users, all as more specifically described
on Schedule 1.8.
1.9 "Deliverables" shall mean the models, specifications, codes and other
documentation and materials described on Schedule 4.3 hereto to be
delivered by ARTERA to FAIRPOINT under Section 4.3 of this Agreement.
1.10 "End User" shall mean a user and licensee of the Licensed Product(s)
pursuant to an ARTERA License, including an ARTERA Business License.
1.11 "End User License Fee" shall mean the monthly license and/or service
fees paid by an End User of a FAIRPOINT Customer for the use of the
Licensed Product.
1.12 "End User Software" shall mean the Licensed Product software resident
or installed on the End User's personal computer(s) or at the End
User's location.
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1.13 "Initial License Installment" shall mean the first monthly installment
payment of the License Fee paid by FAIRPOINT upon execution of this
Agreement pursuant to Section 3.1.
1.14 "Internet Platform" shall mean all of the software and hardware (not
including the End User Software) owned, leased or otherwise controlled
by, or licensed to, ARTERA which make up the established
communications platform described in Schedule 21.3, and used by ARTERA
or otherwise necessary to the operation of the Licensed Products,
including the Platform Hardware and the Platform Software.
1.15 "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.
1.16 "Level I Support" shall mean those support services described on
Schedule 1.16.
1.17 "Level II Support" shall mean those support services described on
Schedule 1.17.
1.18 "License" shall mean, inclusively, all licenses and rights granted to
FAIRPOINT in this Agreement.
1.19 "Licensed Patents" shall mean all those patents and pending patents
relating to the Licensed Products that are owned by or licensed to
ARTERA, together with those patents issued under patent applications
filed or to be filed relating to the Licensed Products,
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including any continuations, continuations-in-part, divisions,
extensions, reissues, re-examinations or renewals of any of the
foregoing. Such Licensed Patents pending as of the date hereof are set
forth on Schedule 1.19 hereto, which Schedule shall be updated from
time to time by ARTERA to reflect new or additional patents or patent
applications and the status of pending patent applications.
1.20 "Licensed Products" shall mean the software embodying or employing all
or part of the Licensed Patents or Licensed Technology, licensed to
Residential and Small Business End Users as a bundled or unbundled
add-on subscription product or service, including, but not limited to,
"Artera Turbo", "Road Warrior", "Virtual Private Network", "SmartHost"
and all updates, enhancements and/or derivatives thereof, together
with the right to use such software and Licensed Products in
connection with the Internet Platform. "Licensed Products" includes
all software products and Internet access systems or services
developed and commercially implemented by ARTERA during the term of
this Agreement that incorporate the Licensed Patents or the Licensed
Technology or any modifications or derivatives thereof or are
otherwise based upon Licensed Products existing as of the Effective
Date.
1.21 "Licensed Technology" shall mean that unpatented technology relating
to the Licensed Products and owned by or licensed to ARTERA.
1.22 "License Fee" shall mean the total License Fee payable by FAIRPOINT to
ARTERA pursuant to Section 3.1 below.
1.23 "Market" or "FAIRPOINT's Market" shall mean (a) all ILECs and RLECs
based in the United States and Canada, except for the Reserved ILECs;
and (b) the Selected ISPs.
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1.24 "Market Member" or "Member of FAIRPOINT's Market" shall mean an
individual ILEC, RLEC or Selected ISP within the Market.
1.25 "Monthly License Installment(s)" shall mean the monthly installment
payments towards the License Fee paid by FAIRPOINT after the Initial
License Installment pursuant to Section 3.1 below.
1.26 "Payment Breach" shall mean the failure by FAIRPOINT to pay any
Monthly License Installment or Unit Royalties when due.
1.27 "Platform Hardware" shall mean all servers, computer data centers,
host computers, communication systems and switches and all other
hardware owned, leased or operated by ARTERA and necessary to the
operation and functioning of the Internet Platform and the Licensed
Products.
1.28 "Platform Software" shall mean all software owned, leased, licensed to
or used by ARTERA and necessary to the operation and functioning of
the Internet Platform and the Licensed Products, but not including the
End User Software.
1.29 "Reserved ILECs" shall mean those ILECs identified on Schedule 1.29,
to whom ARTERA has reserved the exclusive right to market the Licensed
Products.
1.30 "Reserved ISPs" shall mean those twenty-two ISPs identified on
Schedule 1.30, to whom ARTERA has reserved the exclusive right to
market the Licensed Products.
1.31 "Reserved Market" shall mean the Reserved ISPs and the Reserved ILECs,
collectively.
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1.32 "Residential End User" shall mean an End User pursuant to an ARTERA
License that is not an ARTERA Business License.
1.33 "Selected ISPs" shall mean those fifty (50) ISPs selected by FAIRPOINT
from among all United States based ISPs (except for the Reserved ISPs)
to be a part of the Market, identified on Schedule 1.33, as it may be
amended or supplemented by FAIRPOINT in writing from time to time in
accordance with its terms. FAIRPOINT's Selected ISPs list shall be
subject to the approval of ARTERA, which approval shall not
unreasonably be withheld.
1.34 "Small Business" shall mean a business that either (a) has 200 or
fewer employees or (b) has or uses 100 or fewer computers or computer
terminals.
1.35 "Support Fees" shall mean all amounts paid by FAIRPOINT to its
Customer (or retained by its Customer from amounts otherwise payable
to FAIRPOINT that would not have been payable by FAIRPOINT to ARTERA
under this Agreement ) as consideration from FAIRPOINT for the
Customer's marketing to and support of End Users.
1.36 "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.
1.37 "Territory" shall mean the United States and Canada.
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1.38 "Unit" shall mean a one-month period of an End User's license and use
of a Licensed Product.
1.39 "Unit Royalties" shall mean the royalty payable by FAIRPOINT to ARTERA
on each Unit licensed to an End User by or through a FAIRPOINT
Customer, as more particularly described in Article 3 below.
Article 2. GRANT OF LICENSE AND RIGHTS
2.1 License. Subject to the terms and conditions of this Agreement
(including but not limited to Section 8.2 below), ARTERA hereby grants
to FAIRPOINT and its Affiliates during the term of this Agreement (a)
an exclusive license to market the Licensed Products through the
Market to End Users in the Territory; and (b) a non-exclusive license
to market the Licensed Products to End Users through Customers in the
Territory other than Market Members, subject to ARTERA's consent
pursuant to Section 2.2 below. FAIRPOINT's License with respect to the
Market shall be exclusive as to all others, including ARTERA. For
purposes of the exclusive license granted by clause (a) above, a CLEC
that is an Affiliate of a Market Member shall be considered a Market
Member subject to FAIRPOINT's exclusive rights. This License is
intended to grant to FAIRPOINT all rights necessary for it to market
the Licensed Products to End Users through FAIRPOINT's Customers,
including the right to make copies of the End User Software to be
provided to End Users; to be paid and retain all End User License Fees
(including the right to be paid and retain all continuing monthly End
User License Fees paid for the entire term of an End User's ARTERA
License so long as ARTERA's End User License was entered into during
the term of FAIRPOINT's License under this
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Agreement); to enter into sublicenses or other agreements with its
Customers consistent with this Agreement; to reproduce, copy and
distribute ARTERA's Licensed Product(s) documentation, product
descriptions and promotional materials; and to modify such materials
as requested by Customers (subject to the limitations and requirements
of Sections 2.6 and 2.7 below) for the purpose of providing necessary
access through the CRM System or identifying the Customer in
connection with the Licensed Product. This License conveys no right to
modify the Licensed Products, to prepare derivative works of or
modifications to the Licensed Products, to use the Licensed Products
for FAIRPOINT's own purposes, or to sell or copy the Licensed Products
for any purpose other than for delivery to FAIRPOINT's Customers or
their End Users, as contemplated by this Agreement.
2.2 ARTERA's Consent to Non-Market Customers. FAIRPOINT may enter into a
sublicense or agreement to market the Licensed Products with a
Customer in the Territory who is not a Market Member only with the
prior written consent of ARTERA, which consent shall not unreasonably
be withheld. It is the purpose and intent of this Section 2.2 to allow
ARTERA to ensure that all marketing of the Licensed Products to retail
customers be consistent with ARTERA's development and marketing plans
for the retail market outside of the Market, and ARTERA's consent
shall be granted or withheld in light of those plans and goals.
Notwithstanding the foregoing, ARTERA shall have the unfettered right
(a) with respect to the Reserved Market or entities to or through
which ARTERA or another of its distributors then markets Licensed
Products, to withhold its consent and (b) with respect to entities not
in the Market or the Reserved Market and to or through which ARTERA or
another of its distributors does not then market Licensed
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Products, to condition its consent on FAIRPOINT's securing a
distribution commitment from such entity for the Licensed Products
within as little as six months from the effective date of ARTERA's
consent (which period may be extended by Artera in its sole
discretion). During the term of this Agreement, ARTERA will not enter
into any agreement with any other wholesale licensee, reseller or
distributor of Licensed Products in the Territory that grants to such
wholesale licensee, reseller or distributor a right to add new
subdistributors not distributing Licensed Products at the time that is
less restrictive to such wholesale licensee, reseller or distributor
than clause (b) above is to FAIRPOINT.
2.3 Scope of Marketing Rights. FAIRPOINT's License includes the right for
its Customers to market the Licensed Products directly to End Users on
a retail basis, through mass mailing, mass e-mail or otherwise,
regardless of what ISP such End User may be subscribed to, provided
that neither FAIRPOINT nor its Customers shall market the Licensed
Products on a wholesale basis to any Reserved ISP or Reserved ILEC, or
to any Customer who is not a Market Member without ARTERA's consent
pursuant to Section 2.2.
2.4 Assignment and Sublicensing. The rights granted to FAIRPOINT hereunder
may be sublicensed, conveyed, assigned or otherwise transferred by
FAIRPOINT, to the fullest extent necessary to market the Licensed
Products, to FAIRPOINT's Customers and their End Users as contemplated
under this Agreement.
2.5 Acceptance. FAIRPOINT hereby (i) accepts the rights granted to it by
ARTERA under this Agreement; and (ii) acknowledges that the rights
that ARTERA has granted to FAIRPOINT hereunder are limited to the
marketing and distribution of Licensed
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Products through FAIRPOINT's Customers or otherwise, and are subject
to the other limitations set forth in this Agreement.
2.6 Patent and Copyright Notices. Each copy of the End User Software and
all documentation or marketing materials sold, leased, distributed or
otherwise transferred by or through FAIRPOINT shall be marked with a
suitable legend identifying ARTERA as the owner of the Licensed
Patents and Licensed Technology, and as the owner and developer of the
Licensed Product, with the appropriate patent, copyright or trademark
notice, as the case may be. FAIRPOINT shall not remove any such notice
from any End User Software or other Deliverables provided to it by
ARTERA. In marketing the Licensed Products, FAIRPOINT or its Customers
may reference their own names or brands, but only if in conjunction
with a reference to ARTERA as the owner and developer of such Licensed
Products, or words to similar effect.
2.7 Trademark and Copyright. FAIRPOINT shall have the right to use and
copy any and all marks, trademarks, service marks, images and
copyrights of ARTERA pertaining to the Licensed Products in connection
with marketing the Licensed Products, and may grant this right to its
Customers for that limited purpose. Unless otherwise agreed by ARTERA
in writing in advance, all literature or materials used by FAIRPOINT
or its Customers shall prominently display the trademark and logo of
ARTERA, and where applicable, any copyright or patent notices of
ARTERA, and, subject to the last sentence of Section 2.6 above, shall
identify ARTERA as the owner and developer of the Licensed Products.
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2.8 Sublicenses and Marketing Agreements by FAIRPOINT. FAIRPOINT shall
market the Licensed Products only to or through its Customers. For
purposes of marketing to its Customers, FAIRPOINT may sublicense or
assign (on a non-exclusive basis) its rights hereunder to its
Customers to allow and assist its Customers to sell the Licensed
Products to the Customer's End Users, and may enter into such
sublicenses or written agreements with its Customers, not inconsistent
with this Agreement, as are reasonably necessary to allow its
Customers to do so. Unless otherwise agreed to by ARTERA in advance in
writing, all such sublicenses or agreements between FAIRPOINT and its
Customers shall prohibit wholesale marketing of the Licensed Products
by the Customer, and shall prohibit the Customer from operational
bundling (as opposed to price bundling, which is permitted) of the
Licensed Products with any other service, product or software.
2.9 No License between End User and FAIRPOINT. Notwithstanding anything to
the contrary in this Agreement, all licenses with End Users to use the
Licensed Products shall be an ARTERA License, entered into solely
between ARTERA and the End User. Neither FAIRPOINT nor any of its
Customers shall be a party to or have any rights or obligations to
ARTERA or to an End User under an ARTERA License, excepting only that
the subscription agreement or terms of service for such ARTERA License
may provide for payment of the End User License Fee directly to
FAIRPOINT or the Customer.
Article 3. FEES AND CERTAIN SUPPORT SERVICES
3.1 License Fees. FAIRPOINT shall pay to ARTERA a License Fee in the total
amount of two million sixteen thousand dollars ($2,016,000.00),
payable in monthly installments in
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the amount of eighty-four thousand dollars ($84,000.00) each,
beginning with the Initial License Installment paid on the Effective
Date, and continuing with twenty-three additional consecutive Monthly
License Installments on the first day of each following month until
paid in full.
3.2 Royalties to ARTERA for Residential End Users.
(a) Residential End Users Within Six (6) Months. For each Unit
initially licensed to a Residential End User by or through a
FAIRPOINT Customer within six (6) months of the Effective Date,
FAIRPOINT shall pay to ARTERA Unit Royalties equal to 40% of the
price of the Unit on ARTERA's standard residential user price
sheet for the month of the license to the Residential End User
(the "Standard Residential Price"). For purposes of this Section
3.2(a) only, a Residential End User shall be deemed to have been
initially licensed to use the Licensed Product on the date the
Residential End User begins any free trial period if the
Residential End User then continues an ARTERA License immediately
after the end of the free trial period.
(b) Residential End Users After Six (6) Months. For each Unit
licensed to a Residential End User by or through a FAIRPOINT
Customer more than six (6) months after the Effective Date,
FAIRPOINT shall pay ARTERA Unit Royalties equal to 50% of the
Standard Residential Price.
3.3 Unit Royalties for Business End Users. For each Unit licensed to a
Business End User through a FAIRPOINT Customer, FAIRPOINT shall pay
ARTERA Unit Royalties equal to 50% of the price of the Unit on
ARTERA's standard business user price sheet for the
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month of the license to the End User through a FAIRPOINT Customer (the
"Standard Business Price").
3.4 Collection of End User License Fees and Payment of Royalties.
FAIRPOINT has the right to collect and owns all End User License Fees
upon collection thereof. End User License Fees shall be collected and
Unit Royalties shall be paid in accordance with the collection and
payment terms set forth on Schedule 3.4. Schedule 3.4 may be amended
in writing by the parties from time to time as reasonably necessary to
reflect the actual or then desired billing and collection methods of
the parties, either generally or with respect to one or more specific
Customers.
3.5 Certain Finder's Fees. ARTERA has previously committed to pay finder's
fees to certain entities in connection with ARTERA End User Licenses
licensed through certain companies that otherwise are FAIRPOINT
Customers. Schedule 3.5 hereto identifies the specific
Customers/companies for whom finder's fees are to be paid by ARTERA,
the identity of the finder, and certain terms of ARTERA's agreement
with that finder. With respect to the companies listed on Schedule
3.5, FAIRPOINT will pay ARTERA, in addition to the Unit Royalty, an
additional finder's fee equal to 50% of the finder's fee agreed to by
ARTERA, for the term of ARTERA's commitment to the finder, both as set
forth on Schedule 3.5.
3.6 Competitors of FAIRPOINT. ARTERA and FAIRPOINT both recognize that
some Members of FAIRPOINT's Market are competitors of FAIRPOINT in the
telecommunications industry, and may be reluctant or prefer not to do
business through or with FAIRPOINT. ARTERA and FAIRPOINT shall use
their best efforts to cause
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such entities to do business through FAIRPOINT; however, ARTERA and
FAIRPOINT further agree that to the extent it becomes necessary to
allow a Member of FAIRPOINT's Market to contract or do business
directly with ARTERA in order to secure such Market Member's business,
ARTERA may effect such contract directly, provided that FAIRPOINT
shall be compensated by ARTERA or such Market Member for each Licensed
Product Unit licensed through such Market Member in a manner to be
agreed upon by ARTERA and FAIRPOINT, consistent with the intent of
this Agreement and consistent with the terms of FAIRPOINT's own
agreements with similarly situated Market Members.
3.7 Standard Prices. Schedule 3.7 hereto sets forth ARTERA's suggested
retail prices (including the Standard Residential Price and the
Standard Business Price) for the Licensed Products as of the Effective
Date. ARTERA shall provide to FAIRPOINT an amended or updated Schedule
3.7 not less than sixty (60) days prior to ARTERA's proposed effective
date for any changes to its standard prices, or every six (6) months,
whichever is sooner. Within thirty (30) days of the Effective Date,
FAIRPOINT shall provide ARTERA a description of FAIRPOINT'S standard
pricing formula to its Customers, and thereafter shall provide to
ARTERA an updated description of its standard pricing formula on a
schedule no less frequent than that required of ARTERA pursuant to the
preceding sentence.
3.8 Effect of Merger of Certain Entities. In the event of a merger,
acquisition or combination of separate entities, one of which is a
Customer of FAIRPOINT, and the other of which is a direct wholesale
customer of ARTERA or of another licensee of ARTERA in the Territory
(or an acquisition of one by the other) the respective rights of
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FAIRPOINT and ARTERA, or its other licensee (as used in this Section
3.8 only, "ARTERA" shall hereafter mean and refer to ARTERA or its
other wholesale licensee, as the case may be) shall be governed by
this Section 3.8. Examples of the above might be, for instance, if a
Reserved ISP acquires a Selected ISP or a Market Member acquires a
Reserved ISP.
(a) If the Primary Entity (as defined below) in the merger,
acquisition or combination was the Customer of FAIRPOINT, then
the surviving entity shall become a FAIRPOINT Customer for all
purposes under this Agreement; if the Primary Entity was the
direct wholesale customer of ARTERA or another licensee of ARTERA
in the Territory, then the surviving entity shall become an
ARTERA customer for all purposes under this Agreement. The
"Primary Entity" shall be determined as follows: (i) If it is
reasonably clear that one entity is acquiring the other entity,
then the Primary Entity is the acquiring entity; or (ii) if it is
not reasonably clear that one entity is acquiring the other
entity or if the transaction is a merger of equals, then the
Primary Entity is the one that has more End User licensees of
Licensed Products as of the date of the relevant transaction.
(b) Notwithstanding the provisions of clause (a) above, ARTERA or
FAIRPOINT, as the case may be, shall retain all rights to collect
and retain all End User License Fees for all End Users that were
originally licensed through their customer prior to the effective
date of such merger, acquisition or combination (subject to
payment of Unit Royalties by FAIRPOINT, if applicable). Rights to
License Fees pertaining to additional, new End Users following
the merger, acquisition or combination shall be apportioned
between ARTERA and FAIRPOINT in the
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same ratio as the number of End Users that existed through the
two respective customers prior to the merger, acquisition or
combination. In the event it is or becomes not possible to
identify which End Users were originally licensed through which
entity or which End Users were added after the merger,
acquisition or combination, ARTERA and FAIRPOINT shall make such
other equitable arrangements with respect to ownership of End
User License Fees and payment of Unit Royalties as are consistent
with the intent of this Agreement, including this Section 3.8.
Article 4. DISCLOSURE OF INFORMATION, DATA AND KNOW-HOW;
DELIVERY OF PRODUCTS
4.1 Disclosure. The parties shall disclose to each other and ARTERA shall
disclose to FAIRPOINT's Customers such appropriate Technical
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 agrees that the Licensed Products shall be
available for marketing and licensing by FAIRPOINT and its Customers
and completely functional to an End User, and that the CRM will be
fully functional to FAIRPOINT and to its
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Customers, in accordance with the availability dates set forth on
Schedule 4.3 hereto. Time is of the essence with respect to the
delivery and availability dates for those items set forth in Sections
I and II of Schedule 4.3 (the "Critical Deliverables"). In the event a
Critical Deliverable is not delivered on or before the guaranteed
delivery date set forth on Schedule 4.3, each subsequent Monthly
License Installment shall be reduced by an amount equal to ten percent
(10%) thereof for each month or part thereof that such Critical
Deliverable remains undelivered, and the total License Fee shall be
reduced to an amount equal to the total of the Monthly License
Installments, as reduced hereby.
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 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.
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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. With respect to Confidential Information that constitutes a
trade secret, as defined by the Uniform Trade Secrets Protection Act,
a party's obligations of confidentiality under this Section 5.2 shall
not expire after five (5) years, but shall terminate only if, and
when, such information otherwise becomes generally known to others who
can benefit from its use or otherwise no longer qualifies as a trade
secret.
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;
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(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;
(d) All employees and contractors who shall have access to
Confidential Information of the other party shall be under
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;
and
(e) FAIRPOINT may disclose ARTERA's Confidential Information to
FAIRPOINT's Customers as necessary to carry out the purposes of
this Agreement; provided, however, that FAIRPOINT shall cause
each such Customer to execute a non-disclosure agreement in a
form substantially equivalent to the terms hereof.
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)
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to hold in confidence and not disclose such information; and (ii) not
to use such information except as authorized by such party.
For purposes of this Article 5, delivery by FAIRPOINT to an End User,
whether directly or through a FAIRPOINT Customer, of the End User
Software shall not constitute a disclosure by FAIRPOINT of
Confidential Information of ARTERA.
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.
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;
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(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. MARKETING AND SUPPORT OBLIGATIONS
6.1 FAIRPOINT's Marketing Obligations. During the term of this Agreement,
FAIRPOINT shall use commercially reasonable efforts to market the
Licensed Products to FAIRPOINT's Market. Nothing in this Agreement,
however, shall be deemed to obligate FAIRPOINT to market the Licensed
Products to every Member of its Market, or to any specific Member of
its Market. FAIRPOINT shall have the right, but not the obligation, to
market the Licensed Products to Customers other than Market Members,
subject to the limitations set forth in this Agreement.
6.2 FAIRPOINT's Support Obligations. FAIRPOINT shall be responsible for
ensuring that Level I Support is provided and available to End Users
of its Customers not less than twelve (12) hours per day, five (5)
days per week (Monday through Friday). FAIRPOINT may fulfill this
obligation (and the parties contemplate that it will do so) by a
contractual requirement with its Customers for the Customer to provide
Level I Support to End Users.
6.3 ARTERA's Marketing Obligations. ARTERA shall provide for FAIRPOINT
such marketing assistance as may be reasonably requested by FAIRPOINT
from time to time, including but not limited to marketing and
advertising materials; identification of FAIRPOINT on ARTERA's Web
site and marketing materials as an authorized licensee and reseller of
the Licensed Products; providing personnel for demonstrations and
marketing presentations to FAIRPOINT Customers; assisting FAIRPOINT in
contract
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negotiations with Customers and providing to Customers and prospective
Customers such information or assistance as may be reasonably
requested in connection with the Customer's due diligence; providing
market intelligence, including advice as to how best to position the
Licensed Products and compete against other providers of enhanced
Internet access products. ARTERA shall provide to FAIRPOINT at all
times the same or greater level of assistance and information that it
provides to other licensees or wholesale or retail resellers of the
Licensed Products in the Territory. FAIRPOINT and ARTERA agree that
this Section 6.3 requires ARTERA to incur only reasonable costs and
expense in connection with Customer marketing and contract
negotiation, taking into consideration such factors as the assistance
previously provided with respect to that Customer, the number of End
Users potentially connected with that Customer, the actual prospects
of contracting with the Customer and other such factors that ARTERA
might reasonably consider in determining whether to allocate resources
to market to that Customer. In the event of disagreement over the
reasonableness of a request by FAIRPOINT, the parties shall confer and
attempt in good faith to resolve such disagreement.
6.4 ARTERA's Support Obligations. ARTERA shall be solely responsible for
providing Level II Support, which shall be available at no cost or
charge on a reasonable basis to FAIRPOINT, its Customers, and its
Customer's End Users twelve (12) hours per day, five (5) days per week
(Monday through Friday), plus on-call support available to FAIRPOINT
and its Customers twenty-four (24) hours per day, seven (7) days per
week. Access to Level II Support shall be by online methods, and by
toll free telephone, at no cost to FAIRPOINT, its Customers or its
Customer's End Users. ARTERA shall provide
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all updates, enhancements, improvements ("Upgrades") or modifications
to the Licensed Products to FAIRPOINT or its Customers and its
Customers' End Users at no cost via online downloads, and shall
provide to FAIRPOINT a master CD for each such Upgrade and
modification for copying and distribution to FAIRPOINT'S Customers.
6.5 Training and Support by ARTERA. ARTERA shall provide FAIRPOINT, its
Market Members and Customers, and each of their End Users, with
engineering, maintenance and sales support with respect to the CRM,
the Internet Platform, and the Licensed Products to be sold, leased,
distributed or otherwise transferred by FAIRPOINT under this Agreement
to the extent set forth in Schedule 6.5 hereto. Training may be
provided by ARTERA by regularly scheduled classroom training at its
offices.
6.6 Most Favored Customer. ARTERA shall at all times provide the Licensed
Products, product support related thereto and marketing support to
FAIRPOINT and to its Customers on financial terms (including
FAIRPOINT's License Fee) and at prices no less favorable than the best
price and financial terms (including initial license fees) available
to other customers, licensees or resellers of the Licensed Products in
the Territory. ARTERA warrants that the Unit Royalties payable by
FAIRPOINT under Article 3 hereof are equal to or less than any
royalties or equivalent consideration charged by ARTERA to others in
the Territory, and agrees that in the event it enters into any
agreement with any other party (not including any Affiliate of ARTERA)
that provides to that party lower royalties for the Licensed Products
(or a lower net cost for the Licensed Product after payment of
royalties or similar charges) in the Territory, this Agreement shall
be automatically amended to provide the same or lower royalty or net
cost to FAIRPOINT.
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6.7 Sales by ARTERA. Except as set forth in Section 3.6 above, ARTERA
shall not market the Licensed Products in the Territory on a wholesale
basis to the Market. ARTERA further agrees that it will not sell or
license the Licensed Products in the Territory except on a wholesale
basis to FAIRPOINT or to other licensees or resellers as set forth in
this Section 6.7. All End Users in the Territory who request service
or licenses directly from ARTERA will be referred or assigned to
FAIRPOINT or other wholesale licensees or resellers of ARTERA on an
equitable basis to ensure as nearly as possible that FAIRPOINT and
other licensees or resellers receive the full benefit of their
respective licenses or agreements with ARTERA. End Users who can be
identified by reasonable means by ARTERA as a subscriber of a Selected
ISP or others known by ARTERA to be Customers of FAIRPOINT shall be
referred to FAIRPOINT or to that Customer for licensing and service;
and End Users who can be identified by reasonable means by ARTERA as a
subscriber of a customer of any other licensee or reseller of ARTERA
shall be referred to that licensee or reseller or its customer. End
Users who cannot be so identified will be referred to FAIRPOINT and
other licensees or resellers of ARTERA on some other equitable basis.
Article 7. TERM
The term of this Agreement shall begin on the Effective Date and, unless
extended or earlier terminated by the written agreement of the parties or
pursuant to the provisions of Article 8 below, shall expire ten years
thereafter.
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Article 8. TERMINATION
8.1 General. This Agreement may be terminated prior to the end of the Term
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 delivery of written notice thereof, in the case of a breach
involving Payment Breach, or sixty (60) days, in the case of any other
kind of material breach following delivery 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 notice to
the defaulting party that this Agreement is terminated; provided any
Payment Breach will require the defaulting party to pay, in addition
to any amounts payable under Article 3 hereof, interest on the
defaulted amount calculated at the rate of six percent (6%) per annum
from the date of Payment Breach until paid. In the event of any
Payment Breach not cured by FAIRPOINT within thirty (30) days after
delivery of written notice, ARTERA, in its sole discretion, may elect
to terminate FAIRPOINT's exclusivity under clause (a) of Section 2.1
in lieu of complete termination of this Agreement.
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 may
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
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defaulting party continues to conduct its business in the ordinary
course, and to make or remit all payments when due and otherwise
timely fulfill its obligations under this Agreement.
8.4 Optional Termination by FAIRPOINT. FAIRPOINT may terminate this
Agreement at any time by giving 30 days' prior written notice to
ARTERA of its intention to do so, and specifying the effective date of
its termination. If FAIRPOINT so terminates this Agreement during the
first twenty-four (24) months of the Agreement, FAIRPOINT shall not be
required to pay any remaining unpaid Monthly License Installment or
any unpaid balance due on the License Fee (or any prorated portion
thereof) that would otherwise accrue after the effective date of
termination by FAIRPOINT.
8.5 License Fees and Royalties Upon Termination:
(a) Upon Termination Under Section 8.4 Prior to Payment of All
Monthly License Installments. If FAIRPOINT terminates this
Agreement under Section 8.4 more than sixty (60) days after the
Effective Date, but prior to payment of the entire License Fee
set forth in Section 3.1, and the total amount of the Initial
License Installment plus all Monthly License Installments
FAIRPOINT has paid to ARTERA under Section 3.1 (in total, the
"Paid License Fee") exceeds FAIRPOINT's Aggregate Net Revenue,
FAIRPOINT shall continue to collect and retain all End User
License Fees, subject only to Unit Royalties and finder's fees
paid under Article 3 hereof, until its Aggregate Net Revenue
equals the Paid License Fee, at which time FAIRPOINT's right to
collect End User License Fees shall terminate and revert to
ARTERA. To any extent FAIRPOINT has assigned
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its right to collect End Users License Fees to a Customer, then
all royalties or payments otherwise due FAIRPOINT from the
Customer shall instead be paid to ARTERA in accordance with the
terms of FAIRPOINT's contract with the Customer.
(b) Termination by FAIRPOINT Within Sixty (60) Days. If this
Agreement is terminated by FAIRPOINT within sixty (60) days of
the Effective Date, then its right to collect End User License
Fees shall immediately terminate and revert to ARTERA.
(c) Other Termination. If this Agreement is terminated (a) by
expiration of the Term under Article 7; (b) by FAIRPOINT at any
time after payment of the entire License Fee; (c) by ARTERA for
any reason; or (d) by reason of any default by ARTERA, FAIRPOINT
shall be entitled to continue to receive all End User License
Fees for the duration of the specific ARTERA License, subject
only to its obligation to pay Unit Royalties to ARTERA.
8.6 Survival of Certain Terms. Notwithstanding the termination of this
Agreement under Article 7 or under any of the provisions of this
Article 8, the terms and conditions of Section 3.4, Section 4.2,
Article 5, Sections 6.4 and 6.5, Sections 8.7 and 8.8 and Article 19
shall survive termination of this Agreement and shall continue to be
applicable and govern the parties with respect to the subject matter
thereof.
8.7 End User Support Upon Termination. Termination of this Agreement shall
not terminate any ARTERA End User License, and all ARTERA End User
Licenses shall remain in effect in accordance with their terms, and
ARTERA shall continue to provide such
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service and support to such End User as it provides to other End Users
in the Territory. Upon any termination of FAIRPOINT's right to collect
and retain End User License Fees under Section 8.5(a) above,
FAIRPOINT's Customers shall have the right, at their election, to
either continue to provide Level I Support and to market licenses to
their End Users pursuant to their agreement with FAIRPOINT, but paying
all sums otherwise due FAIRPOINT directly to ARTERA; or to terminate
their Level I Support and assign all End User License Fees from their
End Users to ARTERA.
8.8 Transfer of Customers to ARTERA Upon Termination. Upon termination of
this Agreement for any reason ARTERA shall become the owner of any
then existing contracts or agreements between FAIRPOINT and its
Customers, subject only to FAIRPOINT's rights under Section 8.5(a),
and to the remainder of this Section 8.8. All contracts and agreements
entered into by FAIRPOINT with any Customer shall provide for the
transfer of FAIRPOINT's rights thereunder to ARTERA or its designee or
assignee upon termination of this Agreement, and shall impose no
obligations upon ARTERA not undertaken by it pursuant to this
Agreement. ARTERA will continue to provide Level II support to such
Customers, but otherwise will have no obligation to such Customers
unless explicitly assumed or agreed to in writing by ARTERA.
8.9 Document Return. Each party shall return to the other party within 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; provided, however,
that FAIRPOINT may retain such
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Confidential Information as is necessary for it to continue to support
then existing End Users of its Customers.
Article 9. FURTHER ASSURANCES
9.1 Inspection of Books and Records. Upon request of either party hereto,
and upon no less than ten (10) days notice, the other party hereto
shall make available for review and inspection by the requesting party
such books and records as are reasonably required to demonstrate
compliance with the obligations of this Agreement (including all
Schedules). With respect to ARTERA's demonstrating compliance with
Sections 2.2, 6.3, 6.6 and 21.3, ARTERA's obligation shall be subject
to any confidentiality obligations ARTERA may then have to third
parties; provided, however, that, to the extent that ARTERA denies
access to its books and records to FAIRPOINT because of such a third
party confidentiality obligation, ARTERA shall in lieu thereof deliver
to FAIRPOINT an officer's certificate of compliance with Sections 2.2,
6.3, 6.6 and 21.3, as such Sections pertain to ARTERA's arrangements
with such third parties. The obligations of this Section 9.1 are in
addition to and not in replacement of FAIRPOINT's and its Customers'
access to Customer and End User account records maintained by ARTERA
and pertaining to FAIRPOINT and such Customers, including billing and
payment records, via the CRM System, as described on Schedule 1.8.
9.2 Recovery Plan. To assure FAIRPOINT's ability, if necessary, to operate
the Internet Platform and support its Customers' End Users in the
event of ARTERA's inability to do so, the parties shall, within sixty
(60) days of the Effective Date, enter into a separate written
agreement that sets forth in detail an agreement, plan and procedure
for FAIRPOINT to assume the operation and control of the Internet
Platform and the CRM
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System, to the extent that they pertain to FAIRPOINT, its Customers or
their End Users, and to otherwise continue the support of FAIRPOINT's
Customers' End Users. Such agreement is hereafter referred to as the
"Recovery Plan". The Recovery Plan, upon its completion and execution
by the parties, shall become an integral part of this Agreement. It is
anticipated by the parties that the Recovery Plan will include, at a
minimum, the establishment of a separate or backup data center by
ARTERA, fully operational and capable of supporting all of the End
Users of FAIRPOINT's Customers; a procedure whereby FAIRPOINT assumes
the operation and control of such backup data center from ARTERA,
including any necessary premises or equipment contracts or leases; an
articulation of the circumstances under which such assumption by
FAIRPOINT is triggered; a formula to compensate FAIRPOINT for the
operation of that backup data center from Unit Royalties otherwise
payable to ARTERA; and a software escrow in customary form, providing
for the escrow and release of all software, contracts and information
necessary to the operation of the Internet Platform and the CRM System
and the support of End Users, which escrow shall include, but not
necessarily be limited to, a current copy of all End User Software and
Platform Software, the CRM System and all associated software, current
documentation and technical manuals, copies of all patents or patent
applications for the Licensed Patents, copies of all contracts with
third parties for services, software or equipment necessary to the
operation or functionality of the backup data center, the Internet
Platform and the Licensed Products (as they pertain to FAIRPOINT, its
Customers and their End Users), and all other software, source and
object code, algorithms, processes and documentation necessary to
replicate and operate the backup data center, the Internet Platform,
the Licensed Products and the CRM System
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(as they pertain to FAIRPOINT, its Customers and their End Users). The
parties each acknowledge that the Recovery Plan is an integral and
material part of this Agreement; that they will each act expeditiously
and in good faith to design and agree to the Recovery Plan within
sixty (60) days of the Effective Date; and that the failure to do so
shall be an event of default that will allow FAIRPOINT (but not
ARTERA) to immediately terminate this Agreement by written notice to
ARTERA, notwithstanding the provisions of Section 8.2. Nothing in this
Section 9.2 shall be interpreted to require FAIRPOINT to exercise its
rights hereunder or under the Recovery Plan or any software escrow
agreement.
Article 10. INSURANCE
ARTERA shall at all times during the Term of this Agreement maintain (a)
Commercial General Liability Policy including products/completed operations with
limits no less than $2,000,000 per occurrence and $5,000,000 aggregate, (b)
Workers Compensation and Employers Liability per state statute and (c) property
insurance including extended coverage in amounts at least equal to its
replacement cost, providing coverage for the Platform Hardware and all of the
other properties and facilities of ARTERA in the Territory necessary to the
operation and use of the Licensed Products and the CRM System. The insurance
maintained pursuant to this Article 10 shall (x) provide to FAIRPOINT thirty
(30) days written notice of cancellation or lapse in coverage, (y) contain an
appropriate clause in, or an endorsement upon, each policy pursuant to which the
insurance company waives subrogation and (z) provide that any losses shall be
payable notwithstanding negligence of ARTERA. Furthermore, all such policies
shall be placed with an A- or better Best's Rated carrier and shall list
"FairPoint Communications, Inc. and its wholly owned Subsidiaries" as Additional
Insured. Upon signing of this Agreement and every
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year during the term of this Agreement, ARTERA shall provide proof of these
policies by issuing a certificate of insurance and/or sending copies of
insurance policies to the attention of the Risk Management Department at
FAIRPOINT.
Article 11. 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 not caused or contributed to by
the party seeking relief under this Article, 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 11 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.
Article 12. APPLICABLE LAW
Except as may be set forth in any Schedule hereto or otherwise agreed by the
parties in writing, 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 Connecticut and the United States of America.
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Article 13. DISPUTE RESOLUTION
13.1 Scope. To the extent permitted by law, all questions concerning the
validity, operation and interpretation of this Agreement and the
performance of the obligations imposed upon the parties hereunder
shall be resolved by mediation and binding arbitration, as set forth
in Section 13.3 below, and shall be governed by the substantive laws
of the State of Connecticut, as applicable, without regard to any
rules of conflict of laws.
13.2 Waiver of Trial by Jury. Each party hereto waives, to the fullest
extent permitted by applicable law, the right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
13.3 Procedures. If any controversy, dispute, or claim related to this
Agreement ("Claim") arises between the parties, they shall each
attempt, in good faith, to resolve such dispute. If they are unable to
resolve such Claim to their mutual satisfaction within thirty (30)
days after written notice from one to the other of the existence of
such Claim, then the Claim shall first be submitted to mediation under
the auspices of the American Arbitration Association ("AAA").
Mediation shall be conducted not more than thirty (30) days after
initiation by a party, unless a longer time is agreed to in writing by
the parties. If such Claim is not resolved by mediation, the mediator
shall issue a report setting forth each party's final demand or offer
at mediation, and the Claim shall then immediately be submitted to
binding arbitration in accordance with the Commercial Arbitration
Rules of the AAA (the "Rules") then in effect, as modified by this
Section 13.3. Unless the parties are able to agree upon an arbitrator
or arbitrators within fifteen (15) days of the issuance of a notice of
demand for arbitration by any of the parties, the
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arbitration shall be conducted by three (3) arbitrators selected by
the AAA in accordance with the Rules; provided, however, that any
Claim which meets the criteria under the AAA Rules for Expedited
Arbitration shall be so conducted, and any claim for an amount less
than $250,000.00 shall be conducted by a single arbitrator. The
arbitrator(s) shall have the power to subpoena witnesses and
documents, and the parties shall be entitled to conduct reasonable
discovery, including depositions and requests for production of
documents, in accordance with the Federal Rules of Civil Procedure,
under applicable local rules of practice. The arbitrator(s) shall
determine the extent and type of permissible discovery and deadline
for completing discovery. The arbitrator(s) shall render a decision
and award in writing setting forth in reasonable detail the findings
of fact and conclusions of law of the arbitrator(s), and stating the
amount, if any, to which the prevailing party is entitled, and such
other relief, if any, to which the prevailing party is entitled. The
decision and award of the arbitrator(s) shall be rendered as soon as
practicable following the commencement of proceedings. The decision
and award of the arbitrator(s) shall be final, binding and conclusive,
and the prevailing party shall be entitled to have the decision and
award of the arbitrator(s) entered in any court of competent
jurisdiction, and to have the decision and award enforced to the
fullest extent permitted by law. The parties hereby consent to the
jurisdiction of the arbitrator(s), and to the jurisdiction of any
local, state or federal court available to any of the parties for the
purpose of enforcing the decision and award of the arbitrator(s). The
parties agree that all service of process may be made on any party by
personal delivery, or by registered or certified mail addressed to
such party, or by other recognized commercial courier at the address
of such party set forth in this Agreement. The fees, costs and
expenses of the
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prevailing party, in any arbitration, including but not limited to its
reasonable attorneys' fees, shall be awarded to the prevailing party,
payable by the non-prevailing party, as part of the decision and award
of the arbitrator(s). For this purpose, a "prevailing party" shall
mean the party which substantially prevails in its position in the
arbitration; provided, however, that a party shall not be considered a
"prevailing party" unless it is awarded an amount which is equal to or
greater than 110% of its final demand at mediation, or ordered to pay
an amount which is equal to less than 90% of its final offer at
mediation; as set forth in the mediator's report.
Article 14. ANNOUNCEMENTS & PUBLICITY; INDEPENDENT CONTRACTORS
Except for any disclosure that may be required by law (including filings with
the Securities and Exchange Commission), or as necessary to perform their
obligations and exercise their rights hereunder, neither party may use the
other's name or disclose the terms of this Agreement without the prior consent
of the other, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, upon the execution of this Agreement ARTERA or
its Affiliates may issue a press release in ARTERA's or its Affiliates'
customary format and manner reporting the execution of this Agreement and its
general subject matter, provided ARTERA shall have received FAIRPOINT'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 15. 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
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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 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.
Article 16. RIGHTS OF ASSIGNMENT; SUCCESSORS AND ASSIGNS
Neither ARTERA nor FAIRPOINT shall have any right to assign this Agreement or
any of their respective rights or obligations under this Agreement to any third
party except with the prior written consent of the other party, which consent
shall not unreasonably be withheld, or by FAIRPOINT pursuant to Sections 2.1 and
2.4 of this Agreement. The provisions of this Agreement shall inure to the
benefit of and be binding upon any successor or assignee to which assignment has
been consented to pursuant to this Article 16.
Article 17. 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 or
facsimile (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 17 by
the other party, any notice or communication hereunder shall be addressed:
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If to ARTERA, as follows:
Artera Group, Inc.
20 Ketchum Street
Westport, CT 06880
Attn: Chairman & President
Facsimile No.: 203-226-3123
With a copy to:
Artera Group, Inc.
20 Ketchum Street
Westport, CT 06880
Attn: General Counsel
Facsimile No.: 203-226-4338
If to FAIRPOINT, as follows:
FairPoint Broadband, Inc.
c/o FairPoint Communications, Inc.
521 East Morehead Street
Suite 250
Charlotte, NC 28202
Attn: Peter G. Nixon, Senior Vice President
Facsimile No.: 704-344-8143
With a copy to: Shirley J. Linn, General Counsel
FairPoint Communications, Inc.
521 East Morehead Street,
Suite 250
Charlotte, NC 28202
Facsimile No.: 704-344-1594
Article 18. TAXES
As between ARTERA and FAIRPOINT, FAIRPOINT 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 sale,
lease, distribution, licensing, use or other disposition by FAIRPOINT of
Licensed Products or the License granted hereunder. Any other
40
<PAGE>
taxes, including income taxes based on royalties and other payments to ARTERA,
shall be the responsibility of ARTERA.
Article 19. INDEMNIFICATION
19.1 Mutual Indemnification. ARTERA and FAIRPOINT each agrees to indemnify,
defend, and hold harmless the other party, its Affiliates, 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 any 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 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. The Indemnifying Party shall select, retain and pay
counsel in connection with any suit, claim or proceeding, subject to
the Indemnified Party's consent, which shall not unreasonably be
withheld. No settlement shall be made by the Indemnifying Party
without the consent of the Indemnified Party, which consent shall not
be unreasonably withheld. In any event, the Indemnified Party shall
fully participate and cooperate in the defense of any Indemnified
Claim and 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.
41
<PAGE>
19.2 Indemnification by ARTERA. In addition to its obligations under
Section 19.1, ARTERA shall indemnify, hold harmless and defend
FAIRPOINT, its Affiliates, and each of their officers, directors,
employees, agents, successors and assigns from and against any and all
claims, demands, losses, damages, costs and expenses (including
without limitation FAIRPOINT's attorney fees and costs of defense of
every kind whatsoever, and the aggregate amount of any settlement by
FAIRPOINT of any claim or demand) arising out of or in any way related
to (a) the use or operation of the Licensed Products by any End User
of a FAIRPOINT Customer, including without limitation of any claim
related to the operation or function or failure to operate or function
of the End User Software, or of the Licensed Products; the failure,
non-availability or reliability of the Internet Platform; the failure
of the Licensed Product to perform as represented by ARTERA; or any
viruses, bugs, or any other claimed damage to any software or hardware
of any End User or third party allegedly caused or contributed to by
the Licensed Product or the End User Software; or (b) any claim by any
person for finder's fees or commissions related to FAIRPOINT's or its
Customers' marketing and grant of licenses to the Licensed Products,
regardless of whether the person claiming the finder's fee or
commission is identified on Schedule 3.5.
Article 20. MAINTENANCE AND DEFENSE OF LICENSED PATENTS
20.1 Enforcement of Patents. Throughout the term of this Agreement, ARTERA
shall maintain in force the Licensed Patents in the Territory. In this
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
42
<PAGE>
professionals engaged in connection with any of the foregoing. In
addition, ARTERA shall actively protect the Licensed Patents in the
Territory and shall institute all such suits, actions or proceedings
for infringement of any of the Licensed Patents as may be necessary in
this regard. In the event ARTERA fails to commence an enforcement
action or otherwise protect the Licensed Patents as aforesaid after
notice of possible infringement from FAIRPOINT, FAIRPOINT shall be
entitled by itself to take proceedings in the name of and with the
cooperation of ARTERA to restrain any such infringement, and ARTERA
shall promptly reimburse FAIRPOINT for its costs and expense,
including attorneys' fees. Where FAIRPOINT proceeds alone and achieves
a monetary award from the official enforcement forum in such an action
brought by it, FAIRPOINT 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.
20.2 Infringement Indemnity. ARTERA shall indemnify, hold harmless and
defend FAIRPOINT from and 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, trademark, copyright or other actual or claimed
intellectual property right of any third party, or any actual or
alleged unfair trade practice arising out of, related to or resulting
from the exercise or use by FAIRPOINT, its Customers or its Customers'
End Users, in accordance with this Agreement, of any right or license
granted pursuant to this Agreement, provided that FAIRPOINT (a)
promptly notifies ARTERA of such suit, claim or demand and (b)
provides ARTERA with such
43
<PAGE>
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 FAIRPOINT with respect to any claim of infringement that is
based upon or arises out of modification to the Licensed Products by
any third party without ARTERA's consent, or FAIRPOINT's use of the
Licensed Patents or the Licensed Technology for any purpose other than
the marketing, support, design, manufacture, use, licensing or sale of
Licensed Products in accordance with this Agreement. In the event any
part of a Licensed Product is determined to be infringing, or any
temporary or permanent restraining order or injunction is entered that
enjoins any rights granted under this Agreement or any use or
limitation upon the use of the Licensed Product(s) by FAIRPOINT or by
any of its Customer's End Users, ARTERA shall immediately undertake to
modify the Licensed Product(s) so as to make it non-infringing, or
secure from such claimant the rights necessary for FAIRPOINT to
exercise its rights under this Agreement, including the rights of
FAIRPOINT's Customers and End Users of FAIRPOINT's Customers.
Article 21. WARRANTIES
21.1 Right to License. ARTERA represents and warrants that it is the owner
or licensee of the Licensed Products, the Licensed Patents, the
Licensed Technology, the End User Software and all related software
and products, free and clear of any liens or encumbrances of any kind
that would interfere with the License, or would prevent ARTERA from
performing its obligations under this Agreement or would interfere
with FAIRPOINT's or its Customers' rights under this Agreement; that
it has the right, power and authority to enter into this Agreement and
to grant the licenses and other rights
44
<PAGE>
contained herein to FAIRPOINT as herein provided; 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; that to the best of
ARTERA's knowledge and belief the Licensed Patents are valid; and that
neither the Licensed Patents and the Licensed Technology nor the
Licensed Products infringe any other patent issued prior to the date
hereof, or any other right or claimed right in any third party known
to ARTERA.
21.2 Access to Internet Platform. ARTERA represents and warrants that it is
the owner, lessee or otherwise has the right to use the Internet
Platform, the Platform Hardware and the Platform Software, and it is
not materially in arrears or in default on any payment or obligation
to any third party for the use thereof.
21.3 Performance. ARTERA represents and warrants that the Licensed Products
will perform and conform in all material respects with the ARTERA
TURBO PRODUCT DESCRIPTION set forth in Schedule 21.3 and the Service
Level Agreements set forth on Exhibit 1 of Schedule 6.5, subject only
to the operating and environment limitations also set forth therein;
and that the Internet Platform will be maintained at all times to meet
the service level criteria set forth on such Exhibit 1. ARTERA further
represents and warrants that all contracts or agreements between it
and any third party in the Territory related to the support and
operation of the Internet Platform contain service level agreements or
requirements no less stringent than those set forth on Schedule 6.5,
Exhibit 1.
21.4 Form of ARTERA Licenses. ARTERA represents and warrants that every
ARTERA License entered into between ARTERA and an End User of a
FAIRPOINT Customer
45
<PAGE>
shall be in a form not materially different from that form attached as
Schedule 21.4 hereto; shall be a license solely between the End User
and ARTERA and/or its Affiliates and shall impose no obligations or
liabilities upon FAIRPOINT or its Customers; shall contain limitations
of liability and warranty disclaimers consistent with those set forth
in this Agreement; shall expressly exclude any liability of FAIRPOINT
or its Customers; and, unless required by applicable law, shall allow
no greater rights or warranties to the End User thereunder against
ARTERA than are allowed to FAIRPOINT by ARTERA under this Agreement.
Article 22. DISCLAIMER
Except as specifically set forth in this Agreement or in its ARTERA Licenses to
End Users, 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. Except as otherwise set forth
in this Agreement (including its indemnity obligations under Articles 19 and
20), 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 arising from claims of infringement of intellectual property
rights of third parties. This disclaimer embraces special, incidental, punitive
or consequential damages and damages for interruption of use or loss or
corruption of data. This Article 22 shall not be read or interpreted to in any
way modify, limit or effect any obligations ARTERA may have under any other part
of this Agreement to indemnify, hold harmless and defend FAIRPOINT from and
against claims by Customers, End Users or third parties.
46
<PAGE>
Article 23. 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.
Notwithstanding the preceding sentence, this Agreement shall not supercede or
otherwise in any way affect that certain License Agreement between FAIRPOINT and
ARTERA dated August 15, 2002. 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 BROADBAND, INC. ARTERA GROUP, INC.
By: /s/ Peter G. Nixon /s/ Michael J. Parrella
--------------------------- ------------------------------
Peter G. Nixon Michael J. Parrella
Senior Vice President, Chairman & President
Corporate Development
47
<PAGE>
SCHEDULE 1.8
-------------
CRM SYSTEM
SPECIFICATIONS
Artera Turbo Support System
(including CRM System)
All aspects of Artera revolve around a central repository of information which
is accessed by all components within the Artera family including:
o Artera Turbo Client Software - the software that an End User runs on
their PC.
o Artera Data Centers - the server software residing on the Internet
that the Artera Turbo client software connects to...
o Artera Customer Relations Management (CRM) System - the management
tool used internally by Artera Group, Inc. employees for sales,
customer, product, usage, billing, etc.
o Artera Web Site - the Internet presence providing information,
support, trials, and purchase opportunities.
o Artera Reseller Center - a customized version of the Artera CRM made
available via the web to Artera Resellers and Master Distributors
(including FAIRPOINT and its Customers).
[GRAPHIC OMITTED][GRAPHIC OMITTED]
The Artera Reseller Center, available at resellercenter.arteragroup.com,
provides authorized Artera Resellers and Master Distributors access to the same
information about Artera End Users that is available to Artera Group, Inc.
employees. The only difference is that the Reseller Center
<PAGE>
offers a view of End Users that is limited to those belonging to the Reseller.
In the case of a Master Distributor, the view of End Users includes all
Resellers that have been signed up by the Master Distributor.
The Artera Reseller Center is password protected and exists on a secure server.
In order to access the Reseller Center, a Web browser with 128-bit encryption is
required. It is strongly recommended that the Reseller use 1024x768 screen
resolution when accessing the Reseller Center for simplified navigation.
Specifically, the type of information currently available via the Artera
Reseller Center includes customer contact information that is updatable by the
Reseller. This includes name, address, telephone number, e-mail address, etc.
The Reseller has reports available which show (separately) Artera Turbo trials
and orders in a year-to-date format as well as monthly format. From these
reports, the Reseller can "drill-down" into the details of a specific order and
the product associated with that order. Two very useful features here are the
ability to see an End User's Artera Turbo activity (i.e.
connections/disconnections) to provide that a product is in use and the ability
to disable or terminate a copy of Artera Turbo programmatically in the event
that an End User is not paying their bill.
The Reseller Center also provides the Reseller with the ability to take orders
for Artera Turbo Subscriptions or Trials and submit these orders immediately to
the Artera CRM for processing. This is accomplished via Web-based wizards that
walk the Reseller through the questions to ask an End User while on the
telephone.
Versions of the above mentioned wizards are available for the Reseller to add as
links onto their Web site so that the End Users may assist themselves in setting
up a trial or making an online purchase without interaction by the Reseller. In
both cases, the Reseller Center order forms and the "self-serve" order forms for
placement on the Reseller's Web site, the orders are automatically flagged as
belonging to the Reseller so that proper credit and commissions (as applicable)
are made to the Reseller.
The Artera CRM System will also contain the following elements:
o Outside certifications and security audits at least annually;
o Back-up protection via at least two copies of the CRM System's data at
different physical locations; and
o A written disaster recovery plan.
(Note: Currently, the Artera CRM System is fully redundant and
resilient. The details of the CRM System's back-up protections and
disaster recovery plans will be contained in the
Recovery Plan referred to in Section 9.2 of this Agreement.).
<PAGE>
SCHEDULE 1.16
-------------
LEVEL I SUPPORT RESPONSIBILITIES
The purpose of Level I Support is to assist the end-user in
the basic installation and usage of ARTERA Turbo. This can
include answering some general questions to help the user
understand what ARTERA Turbo is, and how it provides a
benefit to them. While these questions may be more
"marketing" in nature, they will allow the end-user to have
a better overall experience with ARTERA Turbo and our
"support services".
Level I is responsible for assisting the customer with the following. It is
presumed that this list will be refined as experience is gained and the product
evolves over time.
1. Establishing an Internet connection (typically via Windows Dial-Up
Networking).
2. Launching a web browser and surfing to various web sites on the Internet.
3. Answering basic questions about the system configuration needed for running
ARTERA turbo (i.e. Windows version, memory, hard disk space) as documented
on ARTERA's web site.
4. Assisting the customer in downloading ARTERA Turbo.
5. Running ARTERA Turbo's Setup program and installing it to their PC.
6. Launching/running ARTERA Turbo.
7. Answering basic questions about navigating within ARTERA Turbo's user
interface.
8. Answering basic questions about showing the user how to know if ARTERA
Turbo is working. This includes pointing out the Network View, Activity
View and the SpeedBar.
9. Diagnosing that the end user's browser is actually forwarding its requests
to ARTERA Turbo. This is accomplished by reviewing the Activity View and
the browser's proxy settings.
10. Assisting an end-user who is using a propriety dialer (non-Dial-up
Networking) such as Juno or NetZero.
11. Assisting an end-user who is using a browser other than Internet Explorer.
This will require telling the end-user how to manually set the browser's
proxy settings.
12. Verify if the customer has an ARTERA Data Center connection online.
13. Assist the customer in how to uninstall ARTERA.
14. Assisting the customer in opening additional ports in ARTERA's Firewall.
<PAGE>
15. Assisting the customer in adding sites into the Site Blocking list.
16. Assisting the customer in adding sites into the Ad Blocking list.
17. Helping customers to understand how Ad Blocking removes ads and replaces
them with "place holder" graphics. This can result in what appears to be
"missing" elements on the page. The customer can be informed of how to turn
off Ad Blocking if they do not like this behavior (understanding that this
will reduce the speed benefits of ARTERA Turbo).
18. Helping customers to understand how to change the Image Quality within
ARTERA Turbo. This includes explaining how to refresh the page once quality
has been set to "Best Quality". The customer should be informed of how to
revert back to "Best Speed" image quality setting. The customer should
understand that if they do not revert back to Best Speed, this will reduce
the speed benefits of ARTERA Turbo.
19. Helping customers to understand what ARTERA's firewall is and how to
disable it if they desire. The customer should be told that they should not
run the ARTERA Firewall with any other firewall. The customer should be
helped to understand the ramifications of disabling ARTERA's firewall.
20. Tell the end-user how to get to the ARTERA web site.
21. Explain to the customer what a cache is, and how to adjust its settings
within ARTERA Turbo.
22. Explain to the customer what settings in their browser are changed when
ARTERA Turbo is running. This includes the change to the proxy settings,
the number of requests that the browser will issue at one time and the
disablement of the browser's cache. Importantly, the customer should be
told that when ARTERA Turbo is not running, or is uninstalled, these
settings in the browser are changed back to their original values.
23. Answer questions about obtaining (i.e. downloading) product updates and
installing them.
<PAGE>
SCHEDULE 1.17
-------------
LEVEL II SUPPORT RESPONSIBILITIES
The purpose of Level II Support is to assist the end-user with the
ARTERA-specific configuration settings of a more technical nature. Level II will
assume that the customer has a functioning Internet connection and can surf to
various web sites when ARTERA is not running.
Level II is responsible for assisting the customer with the following. It is
presumed that this list will be refined as experience is gained and the product
evolves over time.
1. Establishing a connection to the ARTERA Data Center.
2. ARTERA Turbo abnormal termination conditions ("abends") or severe
errors.
3. Handling situations where web pages display inaccurately when ARTERA
Turbo is running (as opposed to viewing the same web page without
ARTERA Turbo running). This should not include questions regarding the
normal changes that occur when compression and ad blocking are
enabled.
4. Assisting the end-user in using Support Mode and taking "traces" of
activities to help diagnose a problem. The customer will be informed
of how to deliver the traces and logs to ARTERA Level II.
5. Advising FAIRPOINT and its Customers regarding their assistance of End
Users in diagnosing and resolving problems with ARTERA Turbo,
including an option for ARTERA, in its sole discretion, upon request
by FAIRPOINT or its Customers, to have direct contact with the End
User in furtherance of such diagnosis and resolution.
<PAGE>
SCHEDULE 1.19
-------------
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.
<PAGE>
SCHEDULE 1.29
-------------
RESERVED ILECs:
--------------
1. Verizon
2. SBC Communications
3. Bellsouth
4. QWEST
5. Puerto Rico Tel
6. Sprint
<PAGE>
SCHEDULE 1.30
-------------
RESERVED ISPs:
-------------
1. AOL Time Warner (including America Online, CompuServe and RoadRunner)
2. Microsoft (including MSN)
3. United Online (including NetZero and Juno Online)
4. EarthLink
5. AT&T (including AT&T Broadband and AT&T WorldNet)
6. Comcast Communications
7. Cox Communications
8. Charter Communications
9. People PC
10. Cablevision (including Optimum Online)
11. RCN
12. Covad
13. Volaris Online
14. Hughes (including DirecPC)
15. Bluelight
16. CoreComm
17. NTT/Verio
18. Millennium Digital Medium
19. Worldcom/UUNet
20. Concentric/XOCommunications
21. Internet America
22. Adelphia Communications
<PAGE>
SCHEDULE 1.33
-------------
SELECTED ISPs
[FAIRPOINT SHALL PROVIDE TO ARTERA FAIRPOINT'S LIST OF 50 SELECTED
ISPs, NONE OF WHICH MAY BE RESERVED ISPs, WITHIN 30 DAYS OF THE
EFFECTIVE DATE.]
* FAIRPOINT shall be entitled to retain no less than fifty (50) Selected
ISPs at all times. Accordingly, in the event a Selected ISP ceases to do
business by reason of merger, insolvency, bankruptcy, liquidation or otherwise,
FAIRPOINT shall be entitled to replace that Selected ISP with another,
non-Reserved ISP. FAIRPOINT's choice of replacement Selected ISPs shall be in
writing, and is subject to the approval of ARTERA, which approval shall not
unreasonably be withheld.
<PAGE>
SCHEDULE 3.4
------------
COLLECTION AND PAYMENT PROCEDURES
Consistent with the purpose and intent of the Agreement, the parties agree that
End User License Fees shall be collected, and Unit Royalties shall be paid
generally in accordance with the following:
A. When an End User of a FAIRPOINT Customer subscribes to or licenses a
Licensed Product, ARTERA shall assign a Serial Number and Key Code
that uniquely identifies each such End User.
B. Unless otherwise agreed between the parties, if the FAIRPOINT Customer
is not an RLEC, ILEC or CLEC, ARTERA will bill the End User each month
using its online credit card billing system and shall retain its Unit
Royalties and remit the balance to FAIRPOINT by wire transfer no less
frequently than two times monthly, on the 15th and 30th of each month,
together with an accounting for all receipts by ARTERA. FAIRPOINT will
be responsible for remitting the proper portion to the FAIRPOINT
Customer. FAIRPOINT, with the prior written consent of ARTERA, may
agree with specific ISPs to allow the ISP to direct bill the End User
by bundling the price of the ARTERA End User License with the ISP's
regular monthly subscription fee or otherwise, and in that event, End
User License Fees will be collected and Unit Royalties shall be paid
in accordance with paragraphs C through E below. ARTERA's consent will
not unreasonably be withheld.
<PAGE>
C. If the FAIRPOINT Customer is an RLEC, ILEC or CLEC (or an ISP
consented to by ARTERA) then the following two billing options apply,
as agreed between FAIRPOINT and its Customer:
1. ARTERA's Subscription Agreement or Terms of Service for all End
Users of such FAIRPOINT Customers shall require that all End User
License Fees be payable to FAIRPOINT or to its Customer, as
determined between them, either (a) by monthly charges to a valid
credit card account or automatic monthly debit from a checking
account in the name of the End User; or (b) by adding the End
User License Fee to the End User's monthly billing with the
FAIRPOINT Customer.
2. ARTERA will bill the End User each month using its online credit
card billing system and remit FAIRPOINT's portion to FAIRPOINT,
as set forth in paragraph B above. FAIRPOINT will be responsible
for remitting the proper portion to the FAIRPOINT Customer.
D. ARTERA agrees to provide a two-week trial at no charge to End Users or
to FAIRPOINT or its Customer.
E. The following End User billing practices apply:
(a) the billing is pro rata for any End User who licenses a Licensed
Product for a partial period for the prior month (net of the
two-week trial);
<PAGE>
(b) the billing is full month for each End User who licenses a
Licensed Product billed in advance for the current one month
period;
(c) if a FAIRPOINT Customer bills the End User then payments shall be
due from such Customer 20 days from date of bill from FAIRPOINT;
F. If ARTERA is not billing the End User, ARTERA will bill FAIRPOINT the
first of each month using the same criteria in E above with payment
due 30 days from date of bill. FAIRPOINT will remit to ARTERA its Unit
Royalties, including pro rata Unit Royalties for a partial month for
the prior period, for each End User where FAIRPOINT has received
payment from the Customer. F. If a Customer is late in its payment to
FAIRPOINT, FAIRPOINT will send to ARTERA a recommended course of
action within five (5) days of due date and ARTERA and FAIRPOINT will
agree on a course of action within five (5) days of receipt of
recommendation.
G. The risk of uncollectibility from End Users shall be borne by the
party hereto that performs the billing with respect to the End User in
question (or, if performed by a FAIRPOINT Customer, then as between
FAIRPOINT and ARTERA, by FAIRPOINT). FAIRPOINT's agreements with its
Customers shall require that, if such Customers perform the End User
billing, they remit the End User License Fee for all Units to
FAIRPOINT, regardless of whether the Customer has actually collected
the End User License Fee from the End User. Without limitation to the
final sentence of paragraph F above, the risk of uncollectibility from
FAIRPOINT's Customers (as opposed to from End Users) shall be borne by
<PAGE>
FAIRPOINT and ARTERA on a pro rata basis in proportion to ARTERA's
Unit Royalties vs. FAIRPOINT's net per Unit revenue from that Customer
(after subtracting Support Fees).
H. The parties may agree in writing, from time to time, to modify the
collections and payment procedures set forth herein, consistent with
the purposes and intent of this Agreement.
I. FAIRPOINT and ARTERA acknowledge and agree that by providing credit
card billing services under this Agreement and Schedule (for instance,
as provided in paragraphs B and C.2) ARTERA is acting solely as a
collection agent for FAIRPOINT, and as such it holds all End User
License Fees received in trust for FAIRPOINT. ARTERA is authorized, in
its role as collection agent, to cause itself to be paid its Unit
Royalties on all Units for which it collects End User License Fees, in
a manner consistent with this Schedule 3.4, the balance of collected
End User License Fees, after subtracting the Unit Royalties due.
J. In the event either party fails to remit to the other when due any
amounts payable under this Schedule 3.4, within five (5) days of the
due date, such other party shall have the right to offset or withhold
any amounts unpaid from any payments otherwise due from it to the
party failing to remit under this Schedule 3.4.
<PAGE>
SCHEDULE 3.5
-------------
ARTERA TURBO LIST OF FINDERS FOR CERTAIN COMPANIES
CCG terms: 5% of End User License Fees for first two years from date of
FAIRPOINT's agreement with Customer; 2.5% for following two years
C&C Partners terms: 5% of End User License Fees for two years from date of
FAIRPOINT's agreement with Customer; 2.5% for following two years; 1.75% for
next two following years
Telecomworx terms: 5% of End User License Fees for two years from date of
FAIRPOINT's agreement with Customer; 2.5% for following two years
Lombardo terms: 7% of End User License Fees for term of ARTERA End User License
Name of Company Finder
--------------- ------
Century Telephone CCG
North State Telephone CCG
TXU Communications CCG
Citizens Communications C&C Partners
Campti-Pleasant Hill Tele CCG
Champaign Telephone Co. CCG
Comtel CCG
E-Ritter Communications CCG
Eatel CCG
Germantown Telephone CCG
Hiawatha Telephone CCG
Iowa Telecom CCG
Kaplan Telephone CCG
LaFourche Telephone CCG
Monon Telephone CCG
Northeast Louisiana Telephone CCG
Oxford Telecom CCG
Telapex CCG
Townes Telecommunications CCG
Excecom Telecomworx
Bryant Communications Telecomworx
Lynch Interactive Lombardo
Hector Communications Lombardo
<PAGE>
SCHEDULE 3.7
-------------
ARTERA STANDARD PRICE SHEET
Residential Subscription Prices (per month):
Residential Pricing
-------------------
Monthly Users Number of Lines Monthly Fee
-------------------------------------------
1 1 $ 9.99
-------------------------------------------
1 2 $15.00
-------------------------------------------
up to 5 1 $20.00
-------------------------------------------
Business Subscription Prices (per month):
Business Prices
--------------------------------
Monthly Ueses Monthly Fee
------------- -----------
1 $ 10.00
--------------------------------
3 $ 55.00
--------------------------------
5 $ 75.00
--------------------------------
10 $115.00
--------------------------------
25 $225.00
--------------------------------
50 $300.00
--------------------------------
100 $325.00
--------------------------------
250 $400.00
--------------------------------
<PAGE>
SCHEDULE 4.3
-------------
DELIVERABLES
Pursuant to Section 4.3 of this Agreement, ARTERA will supply FAIRPOINT
with the following Deliverables on or before the date(s) set forth below.
I. Delivery Guaranteed within 30 days of the date of this Agreement:
1. Artera Turbo products that function as described in Schedule 21.3
(except as set forth below in this Schedule 4.3).
2. Artera Turbo End User software downloadable from the Internet.
3. Artera Turbo documentation downloadable from the Internet.
4. Reproducible Artera Turbo End User Software installation CD, which
includes documentation.
5. Sales presentations and literature in electronic form.
6. Technical presentations in electronic form.
7. Fully Functional Customer Relations Management System and associated
user documentation to specifications of Schedule 1.8.
II. Deliverable targeted on or before January 1, 2003; Delivery Guaranteed
by June 30, 2003:
1. Artera Turbo product for POP 3 and FTP.
2. Virtual Private Networks.
3. Road Warrior option.
III. Deliverable within 30 days of general availability:
1. Artera Turbo products, as enhanced or updated from time to time with all
derivatives thereof.
2. Artera Turbo operation under Linux operating system.
3. Artera Turbo operation under Apple Mac operating system.
<PAGE>
SCHEDULE 6.5
-------------
SUPPORT SERVICES
ARTERA will provide FAIRPOINT with engineering, maintenance and sales
support services as described below.
Services:
--------
1. Artera Turbo regional data centers sized appropriately to handle
subscription base that agree to the Service Level Agreement (SLA) defined
in Exhibit 1.
2. Artera Turbo technical support for FAIRPOINT's support services.
3. Artera Turbo technical training.
4. Artera Turbo sales training.
5. Artera Turbo Web-based customer support system.
<PAGE>
EXHIBIT 1
---------
SERVICE LEVEL AGREEMENT (SLA)
FOR ARTERA TURBO REGIONAL DATA CENTERS
I. General
Artera shall provide the agreed to service levels 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 IX.
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 in accessing Artera's systems. These system
accessibility issues will be analyzed, however, resolution may be out of the
control of Artera.
<PAGE>
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 - 3:30 am Eastern time
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 benchmark in Section IX.
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 benchmark in Section IX.
VIII. 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.
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:
<PAGE>
--------------------------------------------------------------------------------
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.
IX. 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.
<PAGE>
SCHEDULE 21.3
-------------
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.
1. 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.
2. Multiple-PC Products
Artera's multiple-PC product is comprised of two components:
a.) Artera software a self-installing software-only product that is
loaded on the subscriber's computer (the same software as the single-PC
product)
b.) 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
------------------------- --------------------------- --------------------------
<PAGE>
Residential and Business Product Features
The following matrix highlights the different features of the business and
residential product offerings.
Established Communications Platform
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Feature Corporate Corporate Residential Residential Residential Residential
Set Gateway Client Gateway User 2-line User 1-line DTB
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VPN X X n/a n/a n/a n/a
E-Mail Server X n/a X n/a n/a n/a
Net Switcher (Road Warrior) X X n/a X X X
User Accounting X X X X X n/a
Sight Blocking X X X X X n/a
Ad Optimization X X X X X X
Content Control X X X X X n/a
DHCP Server X n/a X n/a n/a n/a
Line Teaming 16 2 2 2 1 1
Firewall X X X X X n/a
PC Sharing X n/a X n/a n/a n/a
SmartHost X X X X X X
Max. Users 100 1 5 1 1 1
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
The Artera Turbo technology has been integrated into a complete Internet access
platform provided by a NCT Group, Inc. 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.
Some of the important features provided by Artera include:
> PC sharing
> Firewall protection
> Virtual private networking
<PAGE>
> 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.
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
<PAGE>
Hardware: Intel PII, PIII, PIV, Celeron, 486, 386
200 MB disk space
Broadband connection or dial up
Business. The individual user PCs has the same requirements as the Residential
users.
Software for Corporate Gateway: Win98, Win2000
Hardware for Corporate Gateway: Intel PII, PIII, PIV, Celeron 750
2 gigabytes disk space
Broadband connection or 2 (or more) dial up lines
<PAGE>
SCHEDULE 21.4
-------------
ARTERA TURBO TERMS OF SERVICE
(business users)
These Artera Turbo Terms of Service (the "Terms of Service") form Exhibit A to
the Subscription Agreement between Artera Group, Inc. ("Artera") and you (the
"Subscription Agreement") pertaining to the provision by Artera to you of the
Artera Turbo service (the "Service").
1. Use of Service. You may use the Service only for the number of users
(i.e., computers) specified in the Subscription Agreement.
2. Software and Documentation. In connection with your use of the Service
and subject to the terms and conditions contained herein and in the Subscription
Agreement, Artera grants to you, and you accept from Artera, a limited,
non-exclusive, non-sublicensable and non-transferable license to install and use
the Service's software (the "Software") and accompanying documentation (the
"Documentation" and, collectively with the Software, the "Materials"). You may
make one copy of the Software for backup and archival purposes, provided that
you accurately reproduce and include the copyright and trademark notices and any
other notices that appear on the original Software. You shall not (and shall not
allow any third party to) (a) "unlock," reverse translate, decompile,
disassemble or otherwise reverse engineer, or attempt to reconstruct or discover
any source code, underlying ideas, algorithms, file formats or programming or
interoperability interfaces of the Software by any means whatsoever, (b) remove
any identification, copyright, trademark or other notices from the Materials or
(c) modify or create a derivative work of any part of the Materials or
incorporate any part of the Materials into any other software or materials.
3. Ownership. The Service and the Materials are the sole and exclusive
property of Artera. This is a service arrangement and not a sale. Your only
rights to use the Service and the Materials are specified in the Subscription
Agreement (including these Terms of Service), and Artera retains all rights not
expressly granted to you therein or herein.
4. User Responsibilities. You assume full responsibility for the selection
of the Service to achieve your intended results and for the use and results
obtained from the Service and the Materials. You assume responsibility for the
installation of the Software. You shall use your best efforts to protect the
Service and the Materials from unauthorized use, illegal reproduction or illicit
distribution, and you shall promptly report to Artera any such wrongful use by
third parties of which you become aware. You acknowledge that certain technology
may be subject to regulation by agencies of the U.S. government, including the
U.S. Department of Commerce, which prohibit export or diversion of certain
technologies to certain countries. You warrant to Artera that you will comply in
all respects with the export restrictions applicable to any materials or
technologies provided to you as part of or in connection with the Service and
will otherwise comply with the Export Administration Regulations and other
United States laws and regulations in effect from time to time that relate to
the Service, the Materials or your use of either thereof. Any use of the Service
or the Materials by the U.S. Government shall be governed by these
<PAGE>
Terms of Service and the Subscription Agreement, shall be prohibited except to
the extent expressly permitted by these Terms of Service and the Subscription
Agreement and shall be further subject to the restrictions set forth in Federal
Acquisition Regulation (FAR) Section 52.227-14 and Defense Federal Acquisition
Regulation (DFAR) Section 252.227-7015. On Artera's written request, you shall
furnish Artera with a signed statement certifying that the Service and the
Materials are being used in accordance with these Terms of Service and the
Subscription Agreement, including any copy and user limitations. With reasonable
advance notice, Artera or its agents may examine the copies of the Materials in
your possession and may audit your use of the Service and the Materials, all
during regular business hours.
5. Warranties. Artera warrants to you that the Service, when used as
directed, will substantially achieve the functionality described in the
Documentation. Artera also warrants that any Software media provided to you will
be free from defects in material and workmanship for 90 days from the date you
receive such Software media. ARTERA DOES NOT WARRANT, HOWEVER, THAT YOUR USE OF
THE SERVICE WILL BE UNINTERRUPTED OR THAT THE OPERATION OF THE SERVICE WILL BE
ERROR-FREE OR SECURE. ARTERA'S SOLE LIABILITY (AND YOUR EXCLUSIVE REMEDY) FOR
ANY BREACH OF THESE WARRANTIES SHALL BE FOR ARTERA TO USE COMMERCIALLY
REASONABLE EFFORTS, IN ARTERA'S SOLE DISCRETION, TO REINSTATE THE FUNCTIONALITY
OF THE SERVICE, TO REPLACE DEFECTIVE SOFTWARE OR SOFTWARE MEDIA, TO ADVISE YOU
HOW TO ACHIEVE SUBSTANTIALLY THE SAME FUNCTIONALITY THROUGH A PROCEDURE
DIFFERENT FROM THAT SET FORTH IN THE DOCUMENTATION OR, IF THE ABOVE REMEDIES ARE
IMPRACTICABLE, TO REFUND THE SUBSCRIPTION FEE AND TERMINATE THE SUBSCRIPTION
AGREEMENT. If you use the Service in an unauthorized fashion, if you make any
modifications to the Software, if the Software media is subjected to accident,
abuse or improper use, or if you violate these Terms of Service or the
Subscription Agreement, this warranty is void. This warranty shall not apply if
the Service is used on or in conjunction with hardware or software other than
the unmodified version of hardware and software with which the Service was
designed to be used, as described in the Documentation. To make a claim under
these warranties, you must send a written description of the claim to Artera's
office as shown in the heading of these Terms of Service (Attention: Warranty
Service Department). If the claim relates to defective Software, you must send
Artera the defective Software media as well (including any copies you have made
and all Documentation accompanying the Software). You assume the risk of loss in
transit for any Materials shipped to Artera. If Artera confirms the defect or
warranty claim, Artera will, within a reasonable time after receipt of the claim
(and any required Materials), provide you with one of the remedies set forth
above. If you have any questions concerning warranty claims, you may call Artera
at 203-577-5374. THIS IS A LIMITED WARRANTY. IT IS THE ONLY WARRANTY MADE BY
ARTERA, AND ARTERA MAKES NO OTHER REPRESENTATION OR WARRANTY OF ANY KIND,
WHETHER EXPRESS OR IMPLIED (EITHER IN FACT OR BY OPERATION OF LAW), WITH RESPECT
TO THE SERVICE OR THE MATERIALS. NO LICENSEE, DEALER, DISTRIBUTOR, RESELLER,
AGENT OR EMPLOYEE OF ARTERA IS AUTHORIZED TO MAKE ANY MODIFICATIONS, EXTENSIONS
OR ADDITIONS TO THIS LIMITED WARRANTY, AND NO LICENSEE, DEALER, DISTRIBUTOR,
AGENT OR RESELLER OF ARTERA SHALL HAVE ANY LIABILITY TO YOU FOR THE
FUNCTIONALITY OR
<PAGE>
PERFORMANCE OF THE SERVICE OR THE SOFTWARE OR FOR ANY WARRANTIES OR BREACHES
UNDER THE SUBSCRIPTION AGREEMENT OR THESE TERMS OF SERVICE. ARTERA EXPRESSLY
DISCLAIMS ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. YOU MAY HAVE OTHER STATUTORY RIGHTS. HOWEVER, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE DURATION OF STATUTORILY REQUIRED
WARRANTIES, IF ANY, SHALL BE LIMITED TO THE ABOVE LIMITED WARRANTY PERIOD.
MOREOVER, IN NO EVENT SHALL WARRANTIES PROVIDED BY LAW, IF ANY, APPLY UNLESS
THEY ARE REQUIRED TO APPLY BY STATUTE.
6. Liabilities. NOTWITHSTANDING ANYTHING IN THESE TERMS OF SERVICE TO THE
CONTRARY, IN NO EVENT SHALL ARTERA OR ANY LICENSEE, DEALER, DISTRIBUTOR, AGENT
OR RESELLER OF ARTERA BE LIABLE OR OBLIGATED, UNDER CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR ANY OTHER LEGAL OR EQUITABLE THEORY, FOR ANY AMOUNTS IN EXCESS OF
THE AGGREGATE OF THE SUBSCRIPTION FEES PAID BY YOU TO ARTERA WITH RESPECT TO THE
SERVICE DURING THE 12-MONTH PERIOD PRIOR TO YOUR COMMUNICATING YOUR CLAIM TO
ARTERA AS DESCRIBED HEREIN, OR FOR ANY SPECIAL, PUNITIVE, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED TO ANY COST OF PROCUREMENT OF
SUBSTITUTE GOODS, SERVICES, TECHNOLOGIES OR RIGHTS), OR FOR INTERRUPTION OF USE
OR LOSS OR CORRUPTION OF DATA, LOSS OF BUSINESS, OPPORTUNITIES OR PROFITS, OR
FOR ANY MATTER BEYOND ARTERA'S REASONABLE CONTROL. Some jurisdictions do not
allow the exclusion or limitation of incidental or consequential damages, so the
above exclusions and limitations may not apply to you. You shall indemnify and
hold harmless Artera and its directors, officers, employees, agents, affiliates
and distributors for and against any losses, damages, claims and expenses
relating to or arising out of any breach by you of these Terms of Service or the
Subscription Agreement or relating to or arising out of your use of the Service
or the Materials.
7. Termination. Either party may terminate the Subscription Agreement
(including these Terms of Service) for a material breach by the other party if
such breach is not cured within 30 days after written notice thereof to the
breaching party; provided, however, that, with respect to a breach by you of the
obligation to pay subscription fees, termination may be made by Artera if such
breach is not cured within ten days after written notice thereof to you. Upon
any termination of the Subscription Agreement (including these Terms of
Service), your right to use the Service and the Materials shall terminate and
you shall immediately destroy all originals and copies of the Materials then in
your possession or control and, if requested by Artera, provide certification
that no originals or copies of the Materials remain in your possession or
control. Without limiting the foregoing, upon any termination of the
Subscription Agreement (including these Terms of Service), Artera may terminate
your ability to use the Service by any reasonable means.
8. Miscellaneous. The Subscription Agreement (including these Terms of
Service) represents the entire agreement between Artera and you relating to the
subject matter thereof and hereof, and supersedes any other prior or
contemporaneous documents or written or oral
<PAGE>
communications relating to such subject matter. These Terms of Service may not
be amended except by Artera via written notice to you or via publication on
Artera's Web site. No sublicense, assignment or transfer of the Subscription
Agreement (including these Terms of Service) or of any of your rights or
obligations thereunder or hereunder, whether by operation of law or otherwise,
may be made by you without the prior written consent of Artera, and any
purported sublicense, assignment or transfer by you shall be void. The failure
of Artera to insist, in any one or more instances, upon the performance of any
of the terms, covenants or conditions of the Subscription Agreement or these
Terms of Service, or to exercise any rights thereunder or hereunder, shall not
be construed as a waiver of the future performance of any obligations by you,
and your obligations with respect to such future performance shall continue in
full force and effect. The Subscription Agreement (including these Terms of
Service) shall be governed by and construed in accordance with the laws of the
State of Connecticut, U.S.A., without giving effect to the conflict of law
principles thereof. Jurisdiction for any action under the Subscription Agreement
(including these Terms of Service) shall lie solely in the Federal or state
courts located in the State of Connecticut, and venue in any such action shall
be proper only therein. No action for any claim against Artera under the
Subscription Agreement (including these Terms of Service), including but not
limited to breach of warranty, may be commenced more than one year after the
earlier of (a) the termination of the Subscription Agreement or (b) the date
Artera is notified of the applicable claim. References herein to "written"
notice shall include fax, e-mail and Web-based communications. No provision of
the Subscription Agreement (including these Terms of Service) shall be construed
against Artera solely due to the fact that Artera or its agent drafted such
provision. You agree that the Subscription Agreement (including these Terms of
Service) is the result of arms-length negotiations.
<PAGE>
ARTERA TURBO TERMS OF SERVICE
(residential users)
These Artera Turbo Terms of Service (the "Terms of Service") form Exhibit A to
the Subscription Agreement between Artera Group, Inc. ("Artera") and you (the
"Subscription Agreement") pertaining to the provision by Artera to you of the
Artera Turbo service (the "Service").
1. Use and Ownership of Service. You may use the Service only for the number of
users (i.e., computers), and for the number of lines, specified in the
Subscription Agreement, and only for residential (i.e., non-business) purposes.
In connection with your use of the Service, Artera grants you a limited license
to use the Service's software (the "Software") and documentation (the
"Documentation") and, together with the Software, the "Materials"). You may make
one copy of the Software for backup purposes. You may not (a) "unlock," reverse
translate, decompile, disassemble or otherwise reverse engineer, or attempt to
reconstruct or discover any source code, underlying ideas, algorithms, file
formats or programming or interoperability interfaces of the Software, (b)
remove any identification, copyright, trademark or other notice from the
Materials or (c) modify or create a derivative work of any part of the Materials
or incorporate any part of the Materials into other software or materials. The
Service and the Materials are the property of Artera. This is a service
arrangement and not a sale. Artera retains all rights in and to the Service and
the Materials that are not expressly granted to you herein.
2. User Responsibilities. You are responsible for the results obtained from the
Service and the Materials. You are responsible for the installation of the
Software. You will use best efforts to protect the Service and the Materials
from unauthorized or illegal use. You will comply with all export restrictions
and other laws relating to the Service and the Materials. You may have
additional responsibilities under the Subscription Agreement, under other
agreements with Artera or under applicable law.
3. Warranties and Limitation of Liabilities. Artera warrants that the Service,
when used as directed, will substantially achieve the functionality described in
the Documentation. Artera warrants that any Software media provided to you will
be free from defects for 90 days from date of receipt. ARTERA DOES NOT, HOWEVER,
WARRANT THAT THE SERVICE WILL BE ERROR-FREE OR SECURE. ARTERA'S SOLE LIABILITY
FOR BREACH OF THESE WARRANTIES IS A COMMERCIALLY REASONABLE EFFORT, IN ARTERA'S
DISCRETION, TO REINSTATE THE FUNCTIONALITY OF THE SERVICE, TO REPLACE DEFECTIVE
SOFTWARE OR SOFTWARE MEDIA, TO ADVISE HOW TO ACHIEVE SUBSTANTIALLY THE SAME
FUNCTIONALITY THROUGH A PROCEDURE DIFFERENT FROM THAT IN THE DOCUMENTATION OR,
IF THESE REMEDIES ARE IMPRACTICABLE, TO REFUND THE SUBSCRIPTION FEE AND
TERMINATE THE SUBSCRIPTION AGREEMENT. If you use the Service in an unauthorized
fashion, if you modify the Software, if the Software media is subjected to
accident, abuse or improper use, or if you violate these Terms of Service or the
Subscription Agreement, this warranty is void. This
<PAGE>
warranty shall not apply if the Service is used on or in conjunction with
hardware or software other than the unmodified version of hardware and software
with which it was designed to be used. To make a claim under this warranty, send
a written description of the claim to Artera's office as shown in the heading of
these Terms of Service (Attention: Warranty Service Department). If the claim
relates to defective Software, send Artera the defective Software media as well
(including any copies made and all Documentation accompanying the Software). You
assume the risk of loss in transit for any Materials shipped to Artera. If
Artera confirms the defect or warranty claim, Artera will provide you with one
of the remedies set forth above. For questions on warranty claims, call Artera
at 203-577-5374. THIS IS A LIMITED WARRANTY. IT IS THE ONLY WARRANTY MADE BY
ARTERA, AND ARTERA MAKES NO OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE
SERVICE OR THE MATERIALS. NO LICENSEE, AGENT, DISTRIBUTOR OR RESELLER OF ARTERA
IS AUTHORIZED TO MODIFY THIS WARRANTY AND NO LICENSEE, AGENT, DISTRIBUTOR OR
RESELLER OF ARTERA SHALL HAVE ANY LIABILITY TO YOU FOR THE FUNCTIONALITY OR
PERFORMANCE OF THE SERVICE OR THE SOFTWARE OR FOR ANY WARRANTIES OR BREACHES
UNDER THE SUBSCRIPTION AGREEMENT OR THESE TERMS OF SERVICE. IN NO EVENT SHALL
ARTERA OR ANY LICENSEE, AGENT, DISTRIBUTOR OR RESELLER OF ARTERA BE LIABLE FOR
ANY AMOUNTS IN EXCESS OF THE SERVICE SUBSCRIPTION FEES PAID BY YOU TO ARTERA
WITH RESPECT TO THE 12-MONTH PERIOD PRIOR TO YOUR COMMUNICATING YOUR CLAIM TO
ARTERA AS DESCRIBED HEREIN, OR FOR ANY SPECIAL, PUNITIVE, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, OR FOR INTERRUPTION OF USE OR LOSS OR CORRUPTION OF DATA,
OR FOR ANY MATTER BEYOND ARTERA'S REASONABLE CONTROL. Some jurisdictions do not
allow the exclusion or limitation of certain damages, so the above exclusions
and limitations may not apply to you. You may have other statutory rights, but
in no event shall warranties provided by law, if any, apply unless they are
required to apply by statute. You shall indemnify Artera for any losses,
damages, claims and expenses arising out of any breach by you of these Terms of
Service or the Subscription Agreement, or arising out of your use of the Service
or the Materials.
4. Termination. You may terminate the Subscription Agreement (including these
Terms of Service), effective as of the end of any monthly subscription period,
via prior written notice to Artera. In addition, either party may terminate the
Subscription Agreement (including these Terms of Service) at any time if the
other party has materially breached the Subscription Agreement or these Terms of
Service and not cured such breach within ten days after written notice thereof.
For purposes hereof, any breach by you of the obligation to pay subscription
fees shall be deemed a material breach. Upon termination of the Subscription
Agreement (including these Terms of Service), your right to use the Service and
the Materials shall terminate and you shall immediately destroy all originals
and copies of the Materials in your possession. Upon termination of the
Subscription Agreement (including these Terms of Service), Artera may terminate
your ability to use the Service by any reasonable means.
5. Miscellaneous. The Subscription Agreement (including these Terms of Service)
represents the entire agreement between Artera and you relating to the subject
matter thereof and hereof, and supersedes any other prior or contemporaneous
documents or communications relating to such subject matter. You may not assign
or transfer your right to use the Service or the Materials
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without the prior written consent of Artera. The failure of Artera to insist
upon the performance of any of these Terms of Service shall not be a waiver of
the future performance of obligations by you. These Terms of Service may not be
amended except by Artera via written notice to you or via publication on
Artera's Web site. The Subscription Agreement (including these Terms of Service)
is governed by the laws of the State of Connecticut, U.S.A. Jurisdiction for any
lawsuit under the Subscription Agreement (including these Terms of Service) lies
solely in the Federal or state courts located in Connecticut, and venue in any
such action shall be proper only therein. No lawsuit for a claim against Artera
under the Subscription Agreement (including these Terms of Service) may commence
more than one year after the earlier of (a) the termination of the Subscription
Agreement or (b) the date Artera is notified of the claim. References herein to
"written" notice shall include fax, e-mail and Web-based communications. No
provision of the Subscription Agreement (including these Terms of Service) shall
be interpreted against Artera solely because Artera or its agent drafted the
provision.