Webb Interactive Services Inc. Contracts
Sample Business Contracts
Long-Term Equipment Sale and Software License Agreement - Online System Services Inc. and FiberTel TCI/2/ SA
LONG-TERM EQUIPMENT SALE AND
----------------------------
SOFTWARE LICENSE AGREEMENT
--------------------------
LONG-TERM EQUIPMENT SALE AND SOFTWARE LICENSE AGREEMENT ("Agreement") dated this
third day of October, 1997 by and between Online System Services, Inc. ("OSS") a
Colorado corporation with its principal place of business located at 1800
Glenarm Place, Denver, Colorado and FiberTel TCI/2/ S.A., an Argentinean
corporation, with its principal place of business located at Amenabar 23, 1414
Buenos Aires Argentina ("FiberTel").
WHEREAS, OSS is a company generally engaged in the business of providing
Internet related equipment software and services such as hardware and software
selection, installation, initial training, consulting and general assistance in
the implementation and operation of a turn-key Internet Service Provider ("ISP")
business as well as documentation and supporting materials for administration,
marketing, sales and web site design and development support for ISP systems;
WHEREAS, OSS provides and/or has the right to license a package of OSS
proprietary programs developed by OSS including but not limited to the
"Community Access Partner" ("CAP") Web site software, with future versions to
include, without limitation, "Electronic Banking" and "Electronic Commerce"
functionality, and user documentation (hereinafter collectively described as the
"Application Program"). The basic CAP web site software is a multi-faceted
software program allowing the operator to provide customer service information,
link to pertinent local, national and international World Wide Web sites as well
as develop local user generated content. The CAP software also allows operators
to develop advertising revenues. Schedule "G" details the CAP software
functionality as of the date of this Agreement as well as the future
enhancements features and associated release dates.
WHEREAS, OSS sells the non-proprietary software, Equipment, and related
materials and services as specifically set forth on Schedules "A" (except CAP
and other proprietary software to be released in the future), "B" and "C",
respectively attached hereto and made a part hereof and which may be modified by
the parties from time to time (collectively referred to as the "Equipment") for
use with the Application Program. The Equipment and the Application Program are
hereinafter collectively referred to as the "System";
WHEREAS, FiberTel has licensed the Application Program (the "Software License")
and purchased certain Equipment from OSS to establish an Internet point of
presence, to design web pages for customers to perform such services and,
generally, to enable FiberTel to become an Internet Service Provider to its own
customers in Argentina (the "Territory"); and to that end have incorporated the
essential terms of their agreement into a "Memorandum of Agreement" dated August
8, 1997 [the "MOA"].
NOW THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
1. PURPOSE: OSS shall provide to FiberTel all the software and services and,
-------
generally, all the know-how and software technology owned, developed, or
licensed to OSS, to develop the Internet content related business in Argentina.
OSS further undertakes to channel all its Internet content related business
activities in the Territory via FiberTel, subject to the provisions set forth in
section 16.6.
1
<PAGE>
2. TERM: The term of the Agreement shall commence on the date set forth above,
----
and shall continue for a period of five (5) years unless sooner terminated in
accordance with the terms of this Agreement including but not limited to Section
16 hereunder (the "Term").
3. PROVISIONS APPLICABLE TO EQUIPMENT SALE AND PURCHASE
-------------------------------------------------------
3.1 Purchase and Sale: Pursuant to the MOA, FiberTel has previously purchased
---------------------
from OSS the Equipment set forth as items 1-46 on Schedule "B" (attached hereto)
along with the materials and services set forth on Schedule "C" (attached
hereto), which delivery is partially pending at the time of execution of this
Agreement, at the price set forth on Schedule "B" ("Equipment Purchase Price").
3.2 Payment:
-----------
(a) Receipt of payment of fifty (50%) percent of the Equipment Purchase
Price for items 1 - 46 of Schedule "B" and the items on Schedule "C" is hereby
acknowledged by OSS. The remaining fifty (50%) percent shall be paid to OSS upon
Acceptance by FiberTel of the Equipment which shall be deemed to be granted
within thirty (30) days of delivery by OSS, unless within that thirty (30) days
FiberTel provides OSS with documentation that OSS has failed to comply with a
material term of the MOA, in which event payment will be made within ten (10)
days of OSS' rectification of such material term. For purposes hereof,
Acceptance shall mean that either: (i) all of the Equipment has been delivered
and complies with and functions in accordance with the acceptance criteria set
forth in Item 6 of Schedule "D" hereto; or (ii) in the case of a "partial
delivery", the accepted Equipment complies with and functions in accordance with
such criteria and has been placed in commercial use by FiberTel for purposes
other than testing.
(b) OSS shall provide a written invoice to FiberTel for all amounts due.
No rights in or title to any separately invoiced Equipment shall pass to
FiberTel unless and until FiberTel has fully satisfied all payments required to
be made for such Equipment already purchased. Notwithstanding anything to the
contrary contained herein, in the case of FiberTel's Acceptance of a Partial
Delivery of Equipment, FiberTel agrees to make partial payments to OSS based on
the amounts set forth on Schedule "B" for the respective pieces of Equipment.
3.3 Shipping: The cost of all shipping charges, including insurance, shall be
------------
borne by FiberTel.
4. PROVISIONS APPLICABLE TO LICENSE OF THE APPLICATION PROGRAM
-----------------------------------------------------------
4.1 Grant of Software License: During the Term in the Territory and subject
-----------------------------
to FiberTel's compliance with the terms and conditions herein, OSS hereby grants
to FiberTel a Software License granting FiberTel the right to use and execute
the Application Program and its future releases and versions throughout the
Term, with no further costs to FiberTel than those set forth in Section 7.
Except for the license herein granted to FiberTel, it is hereby acknowledged and
agreed to by the parties that as between OSS and FiberTel all rights of any
nature whatsoever in and to the Application Program and any other intellectual
property relating to Cable Access America are retained exclusively by OSS. The
License shall be non-exclusive to FiberTel, subject to the provisions set forth
in Section 1 and 16.6.
4.2 Reservation of Rights: The Software License may not, under any
-------------------------
circumstances whatsoever be considered a transfer, either direct or indirect of
the intellectual and/or industrial property rights of the licensed software and
FiberTel shall not have the right to assign, sub-license, rent, lease, sell,
encumber, or otherwise transfer ("Assign") any of the rights granted hereunder.
Notwithstanding the foregoing, FiberTel shall have the right to Assign any of
the rights granted hereunder to any "Affiliate". For
2
<PAGE>
purposes hereof, Affiliate shall mean any person or entity controlling,
controlled by or under common control with FiberTel. Any person or entity owning
at least twenty (20%) percent of the equity interest in an entity shall be
deemed to control that entity. FiberTel hereby waives any "moral" or other
rights of authorship (droit moral) which may accrue or have accrued to it under
any laws of any jurisdiction, including, without limitation, any right to
publish or withhold publication, to be or not be associated with the Application
Program or to preserve the integrity of the Application Program (the droit de
divulgation, droit a la paternite and droit de retrait ou de repentir,
respectively).
Notwithstanding the above, in case that FiberTel enhances, modifies or
jointly develops with OSS any of the Application Program, as between OSS and
FiberTel, ownership of such modifications, enhancements or developments rest
jointly with the parties. Regarding the non proprietary software provided by OSS
to FiberTel hereunder ownership rest exclusively with FiberTel. Except for the
rights expressly granted herein, any and all rights in and to the Application
Program are hereby reserved to OSS.
4.3 Continued Licensing: Notwithstanding anything contained in Section 16.3
-----------------------
to the contrary, upon the termination of this Agreement for any reason, except
FiberTel's material breach of this Agreement, or in the event OSS ceases to do
business during the Term hereof, FiberTel shall obtain the source code developed
by OSS for the Application Program, and shall have the right to modify it and
utilize it subject to the rates set forth below. In that case, OSS agrees to
provide FiberTel with a copy of all source code relating to the Application
Program. OSS further agrees to provide that the license to FiberTel devolves to
OSS' successors in interest.
Date of Termination Annual License Fee
-------------------------------------------------------------------
After the beginning of Year 4,
or more, of the Term $ 20,000
After the beginning of Year 3 of the Term $ 40,000
After the beginning of Year 2 of the Term $ 80,000
After the beginning of Year 1 of the Term $160,000
Should the Agreement be terminated by OSS or OSS's material breach of this
Agreement, FiberTel shall not be obliged to pay any annual License Fee for the
continued licensing of the Application Program.
In case of expiration of the Term or termination of this Agreement, the
parties undertake to agree a fair market value for the continuous upgrading of
the Application Program licensed pursuant to this provision. In case of the
parties' failure to reach an agreement on the above mentioned fair market value,
this value will be determined by one of the consultants set forth in Schedule I.
5. RESPONSIBILITIES OF FIBERTEL:
----------------------------
5.1 Ancillary Services: FiberTel shall be solely responsible for the
----------------------
provision of telecommunication services provided by the local telephone company,
interchange carriers and any other telecommunications company which may be
necessary for the FiberTel's use of the System. In addition, FiberTel shall be
responsible for insuring for the provision of adequate 110/220 volt power
circuits for the System, including backup (uninteruptible power supply, if
desired) power.
3
<PAGE>
6. OSS INSTALLATION
-------------------
6.1 Installation Plan and Acceptance: With respect to Equipment purchased by
------------------------------------
FiberTel from OSS, OSS agrees that it shall promptly provide on-site
installation assistance comprised of the installation and other services
described in the Installation Plan set forth in Schedule "D" attached hereto and
such other services as the parties mutually agree are necessary to permit
FiberTel to begin use of the System in accordance with such Installation Plan in
compliance with the timetable set forth therein. An OSS technician shall be
responsible to demonstrate to FiberTel the successful material operation of all
functions of the installed System prior to certifying in writing that the
installation has been completed.
6.2 Passage of Title/Risk of Loss/Equipment Delivery: Title to the System
----------------------------------------------------
shall not pass to FiberTel until the issuance of the certification of the
Installation Plan and payment of the Equipment Purchase Price and any related
installation fees due and owing. Until such time as title passes to FiberTel
hereunder, OSS shall bear the risk of loss or damage to the System, or any part
thereof. Unless otherwise determined by OSS, OSS shall deliver all Equipment to
FiberTel F.O.B. OSS' or manufacturer's principal place of business, whichever is
least expensive. OSS reserves the right to make partial deliveries and to ship
the Equipment as it becomes available. Delivery dates are approximate. FiberTel
shall provide an acceptable installation and operation environment suitable for
computer equipment.
6.3 FiberTel Responsibilities: FiberTel shall promptly perform all
-----------------------------
responsibilities it is assigned under the Installation Plan. FiberTel shall also
furnish to OSS, free of charge, for the period of time required for installation
of the System: 1) access during normal business hours to the location in which
the Equipment is to be placed; 2) the cooperation of a management-level employee
(hereinafter the Project Leader) knowledgeable in aspects of FiberTel's business
and technical operations.
7. OSS SUPPORT
-----------
7.1 FiberTel Support: OSS agrees to furnish FiberTel with on-going support.
--------------------
The parameters of such on-going support and the establishment of a Buenos Aires
office by OSS are defined in Schedule "E" attached hereto.
7.2 Training: Prior to commencing use of the System, FiberTel and OSS shall
------------
determine a mutually acceptable training schedule during normal business hours
for OSS training of FiberTel's Personnel ("Training Services"), as specified in
the MOA. During the Training Services, FiberTel shall provide employees who are
technicians familiar with computers, computer networks, communications and data
protocols and who shall be competent to handle routine questions from current
and potential customers obtaining Internet access from FiberTel. OSS will
provide FiberTel and or its chosen representative with said training set forth
in Schedule "F" attached hereto. FiberTel shall be responsible for training on
FiberTel's internal systems used in conjunction with the Application Program.
Schedule "F" of this Agreement identifies what ongoing training will be
provided at OSS' expense.
7.3 Marketing Support: OSS shall provide FiberTel with pre-existing and
---------------------
ongoing marketing support materials developed for other markets at no additional
cost and OSS shall use best efforts to effect delivery of such materials within
two (2) weeks of development.
4
<PAGE>
7.4 OSS Professional Management and Intellectual Property Fees: In
--------------------------------------------------------------
consideration of the rights and licenses granted hereunder, FiberTel shall
pay to OSS:
(a) The following percentage of all "Internet Access Gross Receipts"
which shall be defined as all fees received by FiberTel or its Assignees
attributable to the provision of "Internet Access" to be defined for the purpose
of this Agreement as dial-up, telco return and two way cable modem Internet
residential access revenues (including residential webhosting revenues) minus
uncollectible billings, equipment related revenues (to be calculated based on a
three year amortization period for the equipment - i.e. cable modem costs),
installation charges, value added, sales and other transactional taxes (other
than those taxes which FiberTel is legally obligated to pay on its own behalf):
Contract Year Billed Percentage of Gross Receipts
-------------------- ----------------------------
Year One 2%
Year Two 2%
Year Three 1%
Year Four 1%
Year Five 1%
(b) Eleven (11%) Percent of all "Content Related Gross Receipts" which
shall be defined as all fees received by FiberTel or its Assignees attributable
to all content directly related activities, including but not limited to
sponsorships, electronic advertising, electronic banking and electronic commerce
minus custom software and web-design development cost, uncollectible billings,
installation charges, value added, sales and other transactional taxes (other
than those taxes which FiberTel is legally obligated to pay on its own behalf).
OSS's rights to receive payment of the percentage foreseen in this
paragraph is conditioned upon the use by FiberTel of OSS' proprietary software.
(c) In addition, FiberTel shall be responsible for payment to OSS of
those percentages of Internet Access Gross Receipts and Content Related Gross
Receipts set forth above for any expansion of FiberTel's offering of the OSS
products and services to the Affiliates.
7.5 Escrowed OSS Professional Management and Intellectual Property Fees: The
-----------------------------------------------------------------------
Professional Management and Intellectual Property Fee of US$170,000 paid into an
escrow account by FiberTel for the benefit of OSS pursuant to Section 4.3 of the
MOA shall be released to FiberTel upon the full execution of this Agreement.
7.6 Additional Professional Management Fees: Pursuant to Section 4.4 of the
-------------------------------------------
MOA, FiberTel has agreed to pay to OSS One Hundred Sixty Thousand ($160,000)
U.S. Dollars, in consideration for the rendition by OSS of the additional
Professional Management Service set forth on Schedule F of the MOA. OSS hereby
acknowledges receipt of Fifty (50%) percent of such payment. The remaining fifty
(50%) percent shall be paid by FiberTel to OSS in scheduled installments upon
the completion of the individual services listed in Schedule "E of the MOA. Such
payments shall be made in the Argentine Peso (the legal currency in force as of
the date hereof), or such other legal currency that may be in force at the time
payment is due to OSS hereunder, equivalent of the amounts set forth in U.S.
Dollars and are net of any and all value added, sales or transactional taxes
(other than those taxes which FiberTel is legally obligated to pay on its own
behalf), duties, customs, deductions or withholdings or any other
5
<PAGE>
monies required to be withheld by any other government regulation which FiberTel
shall bear on its own account and pay.
7.7 Payment of Professional Management and Intellectual Property Fee: The
--------------------------------------------------------------------
Professional Management and Intellectual Property Fees provided for in Section
6.4 shall be paid by FiberTel on or before the forty-fifth day following each
month for Gross Receipts collected by FiberTel, with respect to the FiberTel
Business during the previous month.
8. MANNER OF PAYMENT:
-----------------
All payments required to be made hereunder shall be made in the Argentine
Peso and shall be payable by electronic wire transfer to OSS' account at the
Argentine Bank of OSS' choice or, at OSS' election, to OSS' account at NORWEST
BANK, COLORADO, N.A., Account #101 8048688, ABA #102000076. OSS, or its
Argentinean affiliate, shall provide a written invoice to FiberTel for all
amounts due. FiberTel will provide OSS with a statement of revenues and expenses
as set forth in this Agreement on or before the thirtieth day following each
month of FiberTel business.
9. TAXES
-----
9.1 General taxes: Except as provided in Section 7.6, FiberTel shall have the
-----------------
right to deduct the amount of any withholding taxes, value added taxes, sales
and other transactional taxes (other than those taxes which FiberTel is legally
obligated to pay on its own behalf) from the monies due to OSS hereunder;
provided, however, that FiberTel shall furnish to OSS, at FiberTel's expense,
the following information and documents: (a) an original receipt from taxing
authority with respect to the tax paid (and if such receipt is in a language
other than English, a certified English translation thereof); (b) a report
setting forth the fees with respect to which the tax is paid, including the
statutory citations and general description of the provision; and (c) such other
information as OSS may from time to time reasonably request to evidence OSS'
right to credit such tax against its income tax liability in the United States.
9.2 Stamp Tax: The Stamp tax imposed by the Argentine Government outside the
-------------
city of Buenos Aires shall be jointly borne by the parties on a 50/50 basis.
10. AUDITS/INSPECTIONS
------------------
FiberTel and its Assignees shall prepare and maintain complete and accurate
records of all matters directly relating to this Agreement, in accordance with
generally accepted accounting principles, on a calendar annual basis, throughout
the Term and for not less than two years thereafter. During each calendar year
of the Term, and within one year after the expiration of this Agreement, OSS, or
its designated representative, may inspect and audit such books and records,
once per year, upon at least sixty (60) business days prior notice to FiberTel
for the purpose of verifying and confirming the accuracy of the payments made to
OSS. Under no circumstance shall OSS be entitled to audit the books and records
of FiberTel corresponding to the second precedent year which will be considered
accepted if not challenged in due time. In the event that any audit reveals any
error in the calculation of the amounts due to OSS, FiberTel shall immediately
pay or be refunded the difference unless FiberTel contests such audit in good
faith. In the event that the amount due to OSS exceeds five (5%) percent of the
total amount due to OSS for such audited period, FiberTel shall pay the costs
associated with the audit unless FiberTel contests such audit in good faith. In
the event FiberTel contests such audit, the dispute shall be subject to Section
18.5 hereunder.
6
<PAGE>
11. FORCE MAJEURE
-------------
11.1 If OSS' or FiberTel's performance of any of its obligations hereunder
are delayed or impaired by reason of any Act of God, civil disturbance, strike,
adverse weather condition, inability to arrange for or delays in transportation,
unavoidable casualty, inability to acquire or delays in acquiring any component
from a manufacturer or supplier, inability to obtain or delays in obtaining any
permits or any law, rule or order of any governmental agency or official or any
cause not reasonably within OSS' or FiberTel's control including without
limitation the non-renewal or termination of or inability to obtain an OSS
license of any of the Application Program, and not due to any fault, neglect,
act or omission on the part of OSS or FiberTel, then OSS or FiberTel, as the
case may be shall be entitled to an extension of time for completion of same for
a period equivalent to the time lost by reason thereof; provided, however, that
such party gives the other party notice thereof within five (5) business days
(unless circumstances require immediate notification) of the commencement of
such claim of delay or impairment. In the event any delay or impairment
continues for a period of one month, either party shall have the right to
terminate this Agreement in accordance with Section 16 below.
11.2 Withdrawal and Replacement: Subject to Section 11.1 above, and
-------------------------------
notification to and approval by FiberTel, at anytime during the Term, OSS shall
have the right to withdraw the Application Program or any component and upon
FiberTel's consent replace same with another comparable application program.
12. INSURANCE: Prior to commencement of any work associated with the
---------
Installation Plan, OSS shall be responsible for the procurement of adequate
liability insurance and worker's compensation insurance with limits of no less
than $1,000,000 per each casualty along with a certificate of insurance
evidencing same, naming FiberTel as additional insured. OSS shall maintain the
insurance for as long as the Equipment is utilized.
13. PERMITS: FiberTel and OSS shall jointly, at FiberTel's sole cost, obtain all
-------
consents, licenses, permits, approvals, authorizations, and inspections from
Argentine federal, state, and local governmental authorities, agencies, or
officials required for the execution and completion of the installation and
construction work to be performed hereunder. FiberTel and OSS shall also be
responsible for and correct any violations of any such laws resulting from or in
connection with their performance of the work hereunder. FiberTel and OSS shall
furnish each other such proof of its compliance as either party may reasonable
request by giving the other party notice thereof.
14. CONFIDENTIALITY/PUBLIC DISCLOSURE/PROPRIETARY RIGHTS:
----------------------------------------------------
The parties hereto agree to execute a Non-Disclosure Agreement substantially
in the form of Schedule "H" attached hereto.
14.1 Public Disclosure: OSS and FiberTel shall obtain the others consent
----------------------
prior to making any press release, announcement or other public disclosure
concerning this Agreement, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, each party shall be free to discuss with third
parties Internet services and the design and development of ISP business,
subject to the Non-Disclosure Agreement between the parties, and to Section 16.6
hereunder.
7
<PAGE>
14.2 Proprietary Rights: As between FiberTel and OSS, FiberTel acknowledges
-----------------------
that OSS is the sole owner of all "System Information", defined as all
proprietary information of OSS relating to the System or OSS' services, and
FiberTel shall not, by reason of disclosure or access to any System Information
during the course of the parties' relationship or otherwise, acquire any right,
title, or interest in or to any System Information. No license, or other right
in or to the System Information is intended to be granted to FiberTel pursuant
to this Agreement or otherwise and no license or other right shall be
incorporated herein by reference, implication, or any other means with respect
to or under any invention, patent, copyright, trademark, (or any pending
application for same) trade secret, or other proprietary right contained in or
in any way relating to the System Information disclosed pursuant to this
Agreement or to which FiberTel may be given or have access. FiberTel shall not
itself, nor shall it permit, by way of carrying out its reasonable commercial
efforts, any third parties to remove any copyright except as specifically
authorized hereunder.
15. WARRANTIES AND INDEMNITIES/SPECIFICATIONS AND CAPACITY
------------------------------------------------------
15.1 Services Warranty: OSS warrants that the services to be supplied under
----------------------
this Agreement will be provided by qualified senior technical personnel, agreed
to by FiberTel in advance, in a professional and timely manner and will conform
to the highest generally accepted industry standard practices.
15.2 Assignment of Warranty: OSS hereby assigns to FiberTel (to the extent
---------------------------
OSS has the right to so assign) the benefits of any warranties or guarantees
provided to OSS by the manufacturer(s) of the System or any parts, replacements,
or additional units and agrees to provide a detailed description of same to
FiberTel within thirty (30) days as of the date hereof. Said assignment is not
intended to deprive OSS of its rights under said warranties and shall not be
construed to do so.
15.3 Compatibility:
------------------
a. OSS warrants and represents that the Equipment being sold to FiberTel
by OSS and the Software being Licensed to FiberTel by OSS hereunder are
compatible.
b. FiberTel acknowledges that certain software and equipment may not be
compatible with the System and FiberTel therefore agrees that it shall not use
any equipment on which the Application Program is run other than the Equipment,
the Application Program and other software provided hereunder without first
consulting OSS. In the event that FiberTel fails to inform OSS of such use, any
damages to the Equipment or otherwise as a result of such use shall be borne by
FiberTel.
8
<PAGE>
15.4 System Functions: The System shall accommodate and/or perform in an
---------------------
efficient and cost effective manner in accordance with generally accepted
industry standards, including but not limited to, the following primary and
commonly used Internet functions: Domain Name Service; Internet E-Mail
processing; World Wide Web Access, News Groups, File Transfer Protocol (ftp),
Telnet, and dialup user access and perform all accounting and control functions
of FiberTel.
15.5 Repair of Manufacturer Defects: OSS shall use best efforts to assist
-----------------------------------
FiberTel in obtaining the repair of any operational deficiencies from third
party manufacturer in accordance with manufacturer's warranty assigned to
FiberTel herein. Nothing contained in this section shall be deemed to require
OSS to maintain the Equipment or to repair any defect caused by FiberTel's
failure to properly maintain the Equipment. Notwithstanding the above, all
repair, replacement and restoration of any Equipment manufactured by OSS will be
done by OSS without extra costs or charges to FiberTel.
15.6 OSS Indemnification: OSS shall indemnify and hold FiberTel harmless
------------------------
from and against any claims, liabilities, damages and expenses, including,
without limitation, reasonable attorney's fees relating to or arising out as
OSS' breach of any of its material obligations under this Agreement. OSS shall
not be liable for any third party claims based upon or arising from FiberTel's
negligent operation of the System or for any indirect, incidental or
consequential damages arising from the use of or inability to use the System
attributable to FiberTel's negligence, provided that OSS is not also negligent.
15.7 FiberTel Indemnification: FiberTel shall indemnify and hold harmless
-----------------------------
OSS from and against any claims, liabilities, damages and expenses, including,
without limitation, reasonable attorney's fees relating to or arising out of a
breach of any of FiberTel's material obligations hereunder. FiberTel shall not
be liable in front of any third party for any indirect, incidental or
consequential damages arising from the use of or inability to use the System
attributable to OSS's negligence, provided that FiberTel is not also negligent.
FiberTel agrees, on a best effort basis, to secure an agreement from each of its
commercial and residential customers releasing and holding harmless OSS,
FiberTel, their Affiliates, officers and employees form any liability resulting
from the business contemplated hereunder.
16. DEFAULT/PERFORMANCE REVIEWS/TERMINATION
---------------------------------------
16.1 Default: Either party may immediately terminate this Agreement upon
------------
thirty (30) days prior written notice to the other party (the "Non-Terminating
Party") and upon the occurrence of any of the following events of default by the
Non-Terminating Party and the Non-Terminating Party's failure to cure same
within fifteen (15) days of notice: the Non-Terminating Party's breach of any
material obligation under this Agreement; the Non-Terminating Party's failure to
make timely payment to OSS in accordance with the payment obligations set forth
in this Agreement; the Non-Terminating Party ceases to do business or sells all
or a portion of its assets used in the business of providing Internet service
using the System:, or the Non-Terminating Party files for bankruptcy or a
trustee or receiver is appointed or the Non-Terminating Party makes an
assignment for the benefit of creditors.
9
<PAGE>
16.2 Performance Review: As from the first yearly anniversary of this
-----------------------
Agreement and on each subsequent yearly anniversary of the same, and for an
extra thirty (30) day period, FiberTel shall have the option to request OSS to
meet so as to have a performance review carried out by an independent and well-
known consultant from the list of those firms attached hereto under Exhibit 1.
Failing the parties' agreement to the same, the appointment of the independent
consultant will be made by FiberTel. The independent consultant's performance
review will be aimed to address the quality of the services provided under this
agreement by OSS and to inform if the same are substantially similar to those
provided by the three top-rank companies dedicated to providing the same
services. Only if the reports of the independent consultant indicates that said
level of compliance and services is below the said threshold, can FiberTel place
a notice to OSS so that within a thirty (30) day period, it take appropriate
steps in order to have the services provided by OSS hereunder, meet the said
level of compliance. If at the end of the said thirty-day period, OSS has not
duly updated its level of services, FiberTel will be authorized to declare a
material breach of contract in which case FiberTel's remedies will be expressly
limited to termination of this Agreement without any indemnification or
obligation towards OSS, subject with respect to the Application Program, to what
is provided under Section 4.4. In the event of such termination, OSS will have
to pay the consultant fees.
16.3 Effect of Termination: Upon the termination of this Agreement: 1) the
--------------------------
Non-Terminating Party, its receivers, trustees, assigns or other representatives
shall immediately surrender all rights, licenses and privileges granted under
this Agreement, cease using or displaying the other party's trademarks, service
marks or logos, shall cease to identify itself with the other party in any way,
shall immediately pay any and all outstanding payments due to the other party;
and shall return to the other party any and all property belonging to such other
party including without limitation, all manuals, billing, and other proprietary
software and informational materials furnished by the other party to the
breaching party, subject, with respect to the Application Program, to what is
provided under Section 4.3.;. and 2) Any Equipment fully paid for shall remain
FiberTel Equipment; provided, however, that as to any Equipment for which
FiberTel has made partial payment, FiberTel shall: provide full payment
immediately upon termination and the Equipment shall be delivered to FiberTel
upon full payment; or such Equipment shall be returned to OSS and OSS shall
refund FiberTel the difference between the fair market value of the returned
Equipment (after deduction of costs of retrieving and shipping such Equipment)
and the total amount due for the purchase of the Equipment.
16.4 Non Release of Obligations: No termination of this Agreement shall
-------------------------------
release FiberTel from any obligation to pay OSS any amounts accrued or become
payable prior to the date of termination.
16.5 Survival: The provisions of Sections 14, 15, 16.3, 16.5 and 18.1 shall
-------------
survive the expiration or termination of this Agreement.
10
<PAGE>
16.6 Good Faith Negotiation: During the term of the Agreement, neither party
---------------------------
shall participate in any business which is effectively capable of being
developed through the Application Program within the Territory without first
offering the other party the right to collaborate in such business under the
terms set forth in this Agreement. The only exception to the preceding rule will
be all those businesses which, although effectively capable of being developed
through the Application Program from time to time, may not be accepted by a
client of FiberTel, in which case, FiberTel would be able to provide the
services to the said client without OSS. FiberTel will under all circumstances
have a first right of refusal to accept and/or participate in all other Internet
related businesses other than those covered by this agreement which OSS may wish
or plan to introduce into the Territory. To this effect, FiberTel will be
granted an exclusive ten-day negotiation period, to commence upon written
notification served by OSS, during which period neither party shall discuss such
business with any third party. In the absence of the parties reaching an
agreement within such ten-day period, OSS shall be free to deal with third
parties but not on overall economic terms more favorable than those offered to
FiberTel without first re-offering such terms to FiberTel and allowing FiberTel
an additional three business day period to accept such more favorable terms. The
entire commercial management of all business either developed or capable of
being developed through the Application Program will be conducted within the
Territory by FiberTel. Should FiberTel not reach an understanding with a certain
client, then OSS will be able to approach said potential client directly.
16.7. Out clause: After the second yearly anniversary of this Agreement, the
----------------
parties may at their sole discretion, and without needing to invoke any specific
grounds for termination, decide to terminate this Agreement. Should this option
be exercised by either of the parties, the terminating party will have to render
a hundred and twenty (120) day prior written notice to the non-terminating
party. In the event that FiberTel is the terminating party an indemnification
calculated as $ 3.400.000 less all amounts already paid by FiberTel to OSS under
the terms of this Agreement and the MOA, excluding payments set forth in
Schedule B of the MOA, multiplied by 0.60, will be payable by FiberTel to OSS as
sole, full and complete compensation for the termination of this Agreement as
per this paragraph. In the event of OSS is the terminating party the following
indemnification will be payable by OSS to FiberTel as sole, full and complete
compensation for the termination of this Agreement as per this paragraph:
Termination date Compensation
Within month 25 and 30 of the Term $1.000.000
Within month 31 and 36 $1.200.000
Within month 37 and 42 $1.400.000
Within month 43 and 48 $1.800.000
Within month 49 and 60 $2.000.000
11
<PAGE>
17. INTELLECTUAL PROPERTY
---------------------
17.1 Infringement Claims: If FiberTel receives a claim that any Equipment or
------------------------
Application Program manufactured or provided by OSS infringes upon any patent,
copyright, or other intellectual property interest, FiberTel shall immediately
notify OSS in writing. OSS shall have the exclusive authority to handle any such
claims and, at its sole option will: 1) settle or defend the claim; 2) procure
for FiberTel the right to use the Equipment and Application Program or
compatible Equipment and Application Program; 3) replace or restore the
Equipment and Application Program. OSS will maintain FiberTel harmless from all
and any liability arising from any of the foregoing without limitation.. In the
event that any Equipment or Application Program is not manufactured nor provided
by OSS, OSS shall not be required to indemnify FiberTel except to the extent
such infringement arises from OSS' integration of such Equipment or Application
Program or the System. OSS shall also not be required to indemnify FiberTel for
any claims of infringement relating to Equipment or Application Program modified
or altered in any way or made to FiberTel's designs or specifications without
OSS consent.
18. MISCELLANEOUS
-------------
18.1 Non Waiver: A failure by either party to enforce any right hereunder
---------------
shall not constitutes a waiver of such right or any other right, and shall not
modify the rights or obligations of either party under this Agreement; 18.2
----
Notice: Any standard notice required to be given under this Agreement shall be
-------
provided in writing and delivered by letter or fax, to the parties address
indicated herein. Any non standard notice required to be given under this
Agreement shall be provided in writing and delivered by certified mail (carta
documento) to the parties address indicated herein; 18.3 Severability: The
------------------
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision, the remaining
provisions being deemed to continue in full force and effect; 18.4 Governing
--------------
law: The Agreement shall be governed by and construed under the laws of
----
Argentina; 18.5 Dispute Resolution: The parties hereby agree and consent to the
------------------------
exclusive jurisdiction and venue of the state courts situated in Buenos Aires
for resolution of any dispute arising from this Agreement 18.6 Entire Agreement:
----------------------
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and communications, whether oral or in writing,
between the parties with respect to the subject matter of this Agreement. No
amendment or modification of this Agreement shall be effective unless made in
writing and signed by OSS and FiberTel. Notwithstanding the above, the MOA will
continue applying to the relations between the parties insofar it does not
contradict or otherwise conflict with any of the provisions of this Agreement;
18.7 Relationship of Parties: There is no intent within this Agreement to grant
-----------------------------
a franchise, create a partnership, joint venture, or business relationship
between the parties other than that described within this Agreement. FiberTel
and OSS are and at all times shall remain independent contractors and shall have
no authority to bind the other to any commitments of any kind; 18.8 Assignment:
----------------
This Agreement is nonassignable except to any Affiliate. Any assignment by
either party hereto, except as provided above, shall require the written
approval of the other party, such approval not to be unreasonably withheld; 18.9
----
Successors in Interest: This Agreement shall inure to the benefit of
-----------------------
and be binding upon the successors in interest to either of the parties.
12
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered
this Agreement as of the date first written above.
ONLINE SYSTEM SERVICES [Corporate Seal]
By: /s/ R. STEVEN ADAMS
-------------------
R. Steven Adams, President and Chief Executive Officer
Date: 10/3/97
-------
Date Accepted: 10/3/97
-------
FIBERTEL [Corporate Seal]
By: /s/ GEORGE Y. STEWART - C.O.O.
------------------------------
(Print Name and Title of Authorized Signatory)
Date: 10/3/97
-------
Date Accepted: 10/3/97
-------
13
<PAGE>
SCHEDULE "A" APPLICATION PROGRAMS
---------------------------------
1 Windows 95 Software for Administrative Computer
1 Microsoft Front Page Software
6 NT Server 4.0 Software (w 10 Client Licensees)
1 Community Access Partners (CAP) web site software
To include:
-Electronic Commerce module for CAP when completed
-Electronic Banking module for CAP when completed
-Any and all kinds of software related to the Internet content business,
developed produced, owned by or licensed to OSS during the Term of this
Agreement, duly customized to the Territory.
14
<PAGE>
SCHEDULE "B" EQUIPMENT AND EQUIPMENT PRICE
------------------------------------------
Item # Qty. Item Code Description Price
------ ---- --------- ----------- -----
1 1 Adaptec SCSI Controller $ 113
2 1 710167 ARCserve Enterprise Backup (NT) $ 781
3 2 667406 Bay Networks 100BaseT Hub (24-Port) $ 3,960
4 2 718481 Bay Networks 100BaseT Module (2 Port) $ 2,827
5 1 718468 Bay Networks 10BaseT Module (8 Port) $ 1,309
6 1 718467 Bay Networks 28200 Ethernet Switch $ 1,760
7 1 Bi-directional Printer Cable (6") $ 4
8 1 CISMEM-NPE-64 Cisco 64MB Memory Upgrade $ 2,640
9 1 CIS7206 Cisco 7206 Chasis $ 4,510
10 1 CISMEM-I/0-8 Cisco 8MB Flash Memory $ 605
11 1 CISPA-8T-V35 Cisco 8-Port V.35 Interface Card $ 7,260
12 1 CISC7200-I/0-FE Cisco IO Controller with 100Base T Port $ 2,750
13 1 CISFR-IR72 Cisco Interdomain Routing Protocals $ 3,025
14 1 CISSW72C- 11.2 Cisco IOS 11.2 (IP Only) $ 2,750
15 1 CISNPE-150 Cisco Network Processing Engine $ 4,510
16 1 CISCAB-OCT Cisco Octal Serial Cable $ 715
17 5 Compaq 250OR Server $ 67,078
18 1 Compaq 250OR Server $ 13,416
19 2 Compaq 4.3GB Pluggable Hard Drive (Spares) $ 2,688
20 1 Compaq 4/8GI3 4mm, DAT Tape Drive $ 1,159
21 6 Compaq Netflex 3 Ethernet Card $ 601
22 1 Compaq Rail Kit (for tape drive) $ 6
23 1 Cybex 19" Rack Mount Kit $ 28
24 1 Cybex Autoboot Commander (8-Port) $ 1,540
25 8 Cybex Video/Keyboard/Mouse Cable $ 660
26 7 742348 DAT Tape (120 length) $ 85
27 1 DAT Tape (5-Pack 90 length) $ 40
28 1 DNEWS Server Software (Electronic Key) $ 550
29 1 703595 HP OpenView Professional $ 990
30 1 796303 ICVerify for Windows $ 292
31 1 633004 Lexmark Laser Printer $ 429
32 1 M25-Pin to F25-Pin Serial Cable (6') $ 3
33 1 Management Consol (Rack-Mount) $ 3,417
34 1 752232 Microsoft FrontPage 97 $ 138
35 1 794803 Microsoft SQL Server 6.5 (10 User) $ 1,870
36 1 499459 Panasonic 17" Monitor $ 593
37 1 Post.Office E-Mail Server Software (Electronic Key) $ 2,200
38 2 TYONS-153E-1-1 Tylink ONS153 (E1 CSU/DSU) $ 2,420
39 1 499459 US Robotics V.Everything Modem $ 263
40 3 USR0668-0 USR Fan Tray $ -
41 6 USR0790-0 USR Quad Modem Card $ 11,220
42 3 USR2059-0 USR Total Control 48-Port Bundle $ 61,545
43 1 USR1091 USR Total Control Management Software $ 1,485
44 5 Windows NT Server (5-User) $ 2,745
45 1 Windows NT Workstation $ 219
46 1 Accounting & Control Software $ 2,500
TOTAL $219,696
15
<PAGE>
SCHEDULE "C" MATERIALS AND SERVICES
-----------------------------------
System Documentation:
--------------------
1. General ISP Operations Manual
2. Tier 1 Customer Service Manual
3. Tier 2 Customer Service Manual
4. Start up Manual for Cable Operators
5. Instruction Manual
Consulting Assistance on the following:
--------------------------------------
6. Internet Backbone Services
7. Initial Telephone Connections
8. General Telecommunications Issues
9. Pricing of Services
10. Financial Models
11. Domain Name Registering
12. Equipment Installation & Testing
13. Initial Technician & Administrative Training
14. Brochures, Flyers Ad Formats
15. FiberTel Contracts & Agreements
16. Administrative Procedures
16
<PAGE>
SCHEDULE "D" INSTALLATION PLAN
------------------------------
OSS will provide the following services at Installation on or before October 1,
1997 or date that is mutually agreed to by the parties in addition to providing
written documentation in the form of an Instruction Manual for FiberTel:
1. OSS will prepare and design an Internet Point of Presence (POP) consisting of
computers, network, servers, data termination and routing equipment, modems,
software and all wiring. The POP will provide the connection from FiberTel to
the Internet backbone network. OSS will prepare an equipment hardware and
software list with specific manufacturer, model number, serial number and
estimate of the cost, shipping fees and delivery interval.
2. OSS will order, configure and interconnect all of the above elements which
comprise the FiberTel Internet POP, including routers, servers and network.
3. OSS will deliver, install and test all of the equipment and software at times
agreed to between the parties.
4. OSS will connect the dialup telephone lines to the FiberTel's modem bank.
5. OSS will connect the Internet backbone provider's line to the FiberTel's
equipment.
6. OSS will conduct an overall acceptance test, with the assistance of the
FiberTel's technician(s) which will demonstrate that all elements of the ISP POP
are working satisfactorily. The tests will include DNS, e-mail, Web services,
News Groups, ftp, ping, dialup access, dedicated access (if installed), and any
other Internet related services provided at the FiberTel's POP.
7. FiberTel will provide access to installation site during regular business
hours and, upon OSS' request, for extended hours up to twenty-four hours seven
days per week
8. FiberTel will provide network administrators to be present during the
installation who are experienced with Microsoft NT servers and who will be
responsible for maintaining the equipment post the installation.
9. FiberTel will be responsible for the provision of adequate 110/120 volt power
circuits for the system including backup (uninterruptible power supply; if
desired) power.
10. FiberTel is responsible for the provision of all telecommunications,
Internet and all other external connectivity necessary for the operation of the
System.
17
<PAGE>
SCHEDULE "E" CUSTOMER SUPPORT
-----------------------------
OSS agrees to open a Buenos Aires office to support FiberTel in the content
related business. This office will be opened within sixty (60) days of the
execution of this Long-Term Agreement. OSS, with the approval of FiberTel, may
use a pre-existing Buenos Aires corporation in association with OSS senior
management oversite to provide said support. OSS agrees to provide support in
the following areas:
1. Technical Support (OSS software): OSS will support the Application Program
--------------------------------
with one full time technical Resource trained by OSS on CAP software. This
full time Resource will be resident in Buenos Aires, Argentina. The Resource
will be available during Buenos Aires business hours (generally 9:00 a.m. - 7:00
p.m. Buenos Aires time) Monday through Friday. This Resource will be able to be
contacted via telephone at the local OSS office or via cellular phone when away
from the office. After hours and on recognized Argentine holidays, support will
be via pager and is intend for emergency situations only. OSS and FiberTel will
jointly agree on the specific Resource for this position.
2. General Business and Marketing Consulting: OSS will provide a Senior OSS
-----------------------------------------
business Resource to provide consulting on general business and marketing issues
on five (5) full business days in each month. This Resource will be resident in
Buenos Aires, Argentina at the OSS Office. Additional days of consulting will be
available to FiberTel at a rate of One Thousand ($70) Dollars per hour. OSS and
FiberTel will jointly agree on the specific Resource for this position.
3. SQL Web Server Support: OSS will support the FiberTel SQL Web Server(s)
----------------------
with one full time technical Resource trained by OSS on SQL Servers. This full
time Resource will be resident in Buenos Aires, Argentina. The Resource will be
available during Buenos Aires business hours (generally 9:00am-7:00pm Buenos
Aires time) Monday thru Friday. This Resource will be able to be contacted via
telephone at the local OSS office or via cellular phone when away from the
office. After hours and on recognized Argentine holidays, support will be via
pager and is intend for emergency situations only. OSS and FiberTel will jointly
agree on the specific Resource for this position.
Response Time: OSS will respond to FiberTel's on-site problems associated with
-------------
the CAP software and SQL Server within sixty (60) minutes of initial call.
18
<PAGE>
SCHEDULE "F" TRAINING
---------------------
INITIAL TRAINING
----------------
CSR TIER ONE TRAINING
OSS will instruct FiberTel's customer representatives in the sales and basic
customer service techniques to allow FiberTel's representatives to answer
Frequently Asked Questions (FAQ's) specific to FiberTel's service and the Buenos
Aires marketplace, service options, additions of subscribers, deletions of
subscribers.
OSS will also train FiberTel's representatives on how to troubleshoot
insignificant problems that may arise with FiberTel's customers using the
System. OSS and FiberTel will determine parameters of these problems and develop
documented methods and procedures to escalate problem resolution to a more
technical resource (tier 2) to achieve final resolution. Travel for this
training will be handled per the provisions of the Memorandum of Agreement dated
August 8, 1997.
CSR TIER TWO HELP DESK TRAINING
OSS will train FiberTel's representatives in the standard Internet Service
Provider (ISP) problem resolution techniques. OSS will assist FiberTel's cable
modem vendors in supporting technical problem resolution associated with cable
modems. OSS will document common ISP problems and provide this documentation to
FiberTel. In addition, role plays of these problems will be conducted during
training. Travel for this training will be handled per the provisions of the
Memorandum of Agreement dated August 8, 1997.
SALES TRAINING
OSS will provide basic sales training (for designated CSRs or sales personnel)
related to Internet access and the sale of business web pages which businesses
can purchase on the FiberTel CAP Web site.
CAP SYSTEM ADMINISTRATION TRAINING
OSS will provide on-site training of the CAP software system administration
tools that enable FiberTel personnel to manage and update the content of Web
site and the access rights of users and forum moderators.
ONGOING TRAINING
----------------
TRAINING AND SUPPORT MATERIALS
Documentation and training materials related to the Application Program
Management software will be provided. As OSS develops online documentation and
training, FiberTel will be given access to these materials. As new releases of
the CAP software become available, FiberTel will be provided new release
software and documentation. OSS would be available for on-site training of new
release software. Ongoing training provided to FiberTel by OSS will be at OSS'
expense.
19
<PAGE>
SCHEDULE "G" - CAP WEBSITE DEFINITION
-------------------------------------
Application Program Development Schedule
----------------------------------------
CAP PRODUCT (V.1.0) Provided to BA 9/30/97 (final install)
----------------------------------------------------------
Features include:
* Site tailored to include visual design elements of client
* User registration system with security
* Personal home page generation system that users create after registration
* Business listings (Yellow Pages) system where businesses can add their
information to a database
* OSS preloads approximately 1,100 business listings to the listings system
* Event listing system where local events can be added and searched for by users
* Business Web page generation system that businesses can sign up for and then
create their pages with a wizard
* CableVision movie database search and retrieval system
* Movie video preview system where users can watch streaming video clips
* Links to numerous Web sites
* Cable channel program guide system (searchable)
* Online forums with conferences, threads and message capabilities
* System administration system where FiberTel can add/modify forums and forum
moderators; verify and add/delete users from the system; add content, images
and videos to the site; system administration can add additional links for
users to visit other sites; system administration can add/update the
CableVison channel program guide
CAP PRODUCT (V2.0) Ready by 12/30/97
------------------------------------
Features include:
-----------------
* Ad server system
* Additional personalization of content for users
* Chat system for user chat sessions
* Polling/voting system that can tally and present results of polls created by
system administrator
* Listserver
CAP PRODUCT (v3.0) Ready by 4/31/98
-----------------------------------
Features Include:
-----------------
* Electronic Commerce where the site can personalize advertising and just -in-
time purchase opportunities to users based upon their profiles and the
content of the site. Online stores and produce sales system with secure online
ordering
CAP PRODUCT (v4.0) Ready by 8/30/98
-----------------------------------
Features Include:
-----------------
* Electronic Banking capabilities in place (launch date of specific online
banking projects determined after project requirements and system integration
issues are resolved)
OSS's obligations include the provision of any future version enhancement of the
above detailed features and all new features created to be included in the
Application Program, duly tailored to FiberTel in accordance to the latter's
requirements.
OSS shall provide FiberTel with a Beta version of any software to be delivered
hereunder with at least a thirty (30) day period to the final release.
20
<PAGE>
SCHEDULE "H" - NON-DISCLOSURE AGREEMENT
---------------------------------------
THIS NON-DISCLOSURE AGREEMENT (the "Agreement") is entered into as of the ___
day of 199_, by and between Online System Services, Inc. ("OSS") a Colorado
corporation with its principal place of business located at 1800 Glenarm Place,
Denver, Colorado and FiberTel, an Argentinean corporation and wholly owned
subsidiary of Cablevision/FiberTel, with its principal place of business located
at Amenabar 23, 1414 Buenos Aires Argentina ("FiberTel").
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth in this Agreement, and other good and valuable consideration, FiberTel and
OSS agree as follows:
1. Definition of Confidential Information. For purposes of this Agreement,
--------------------------------------
"Confidential Information" means any non-public information of either FiberTel
or OSS (the "Parties"), disclosed by either Party to the other Party in the
following forms:
a. information originally disclosed in written, graphic, machine-readable or
any other tangible medium to the extent conspicuously marked with a
"confidential," "proprietary" or similar legend; and
b. information originally disclosed orally or by way of observation, to the
extent identified as Confidential Information at the time of such original
disclosure; and (ii) summarized in reasonable detail and confirmed as being
Confidential Information in a written notice delivered to the receiving Party
within 30 days after original disclosure, which notice includes a reference to
the date of the original disclosure and a reference to this Agreement.
2. Exceptions. Confidential Information shall not include information which:
----------
a. was acquired by a Party prior to the time of its disclosure by the other
Party, as shown by files of the receiving Party in existence at the time of
disclosure, and at a time when the receiving Party was under no obligation to
the disclosing Party to keep such information confidential;
b. is or becomes available in the public domain through no act of the
receiving Party that violates this Agreement;
c. is received by the receiving Party from a third person or entity that is
not known by the receiving Party to be sharing such information in violation of
rights of the disclosing Party;
d. is developed by or on behalf of the receiving Party without any access to
or use of Confidential Information of the disclosing Party; or
e. is at any time furnished to a third party by the disclosing Party without
restrictions on the third party's rights to disclose.
The Party claiming that any of the foregoing exceptions applies shall have the
burden of proving such applicability.
21
<PAGE>
3. Obligations. Each Party shall:
-----------
a. treat Confidential Information of the other Party with the same degree of
confidentiality with which it treats its own Confidential Information, in no
case less than a reasonable degree of confidentiality;
b. use Confidential Information only for the purposes of evaluating the
Confidential Information and determining whether the Parties will pursue further
negotiations with each other, and in the performance of obligations under
subsequent agreements between the Parties, if any;
c. refrain from copying Confidential Information, in whole or in part, except as
required in furtherance of the uses thereof permitted by this Agreement, and
except with accurate reproduction of all proprietary legends and notices located
in the originals;
d. limit dissemination of Confidential Information to employees and agents of
such Party or of such Party's affiliates who have a need to know the
Confidential Information in furtherance of the uses thereof permitted by this
Agreement; provided, however, that a receiving Party shall in all events be
responsible to the disclosing Party for any action or inaction of such employees
and agents, and former employees and agents, that would violate this Agreement,
had the action or inaction been that of the receiving Party directly;
e. comply with all applicable U.S. export and all other applicable laws, rules
and regulations with respect to the Confidential Information; and
f. destroy or return to the disclosing Party any Confidential Information
received in written or other tangible media, including all copies and records
thereof, upon any request by the disclosing Party, except for a single set of
copies which the receiving Party may retain solely as an archival record of
materials submitted.
4. Legally Required Disclosure. If a Party becomes compelled to disclose any
---------------------------
Confidential Information of the other Party pursuant to applicable laws, rules
or regulations, or pursuant to rules and regulations of any stock exchange or
stock association on which securities of the receiving Party may be traded from
time to time (collectively, the "Requirements"), the receiving Party shall
provide the disclosing Party with prompt notice of any such Requirement and
shall cooperate with the disclosing Party, at the disclosing Party's sole
expense, in seeking to obtain any protective order or other arrangement pursuant
to which the confidentiality of the Confidential Information is preserved. If
such an order or arrangement is not obtained, the receiving party shall disclose
only that portion of the Confidential Information as is required pursuant to
such Requirements. Any such required disclosure shall not, in and of itself,
change the status of the disclosed information as Confidential Information under
the terms of this Agreement.
5. Term. This Agreement shall commence on the date first above written and shall
----
continue in effect for a period of six months thereafter.
6. Survival. The restrictions and obligations of Paragraphs 3 and 4 of this
--------
Agreement shall survive the expiration of this Agreement, and shall continue to
bind the Parties, their successors, heirs and assigns, for a period of two years
after the date first above written.
22
<PAGE>
7. Ownership of Confidential Information. Each of the Parties acknowledges that
-------------------------------------
Confidential Information of the other Party is and shall remain the exclusive
property and a valuable trade secret of the other Party. Nothing in this
Agreement shall be construed as granting any license or other rights under any
patents or copyrights of either Party, or any rights in or to Confidential
Information of either Party except for the limited rights to use and disclose
such Confidential Information expressly granted to the other Party in this
Agreement.
8. No Agency. Neither this Agreement nor the disclosure or receipt of
---------
Confidential Information shall constitute or imply any promise or intention to
enter into a partnership, agency, employment or joint venture relationship
between the Parties, to make or purchase any products or services by any Party
or to make any commitment by any Party with respect to the present or future
marketing of any product or service. Nothing in this Agreement shall be
construed to limit either Party's rights to independently develop or acquire
products or services without use of the other Party's Confidential Information.
9. No Warranty. No Party shall disclose information to the other that such
-----------
Party is not entitled to disclose under applicable laws, rules or regulations,
or under applicable agreements binding upon the disclosing Party. Subject to the
foregoing, all information disclosed by either Party to the other is provided
"AS IS" without any warranty whatsoever, including without limitation any
warranty as to the accuracy, reliability or fitness of such information for any
particular purpose.
10. No Assignment. Neither Party may assign any of its rights or delegate any of
-------------
its obligations under this agreement, except upon the prior written consent of
the other party, and except as provided for in the Long Term Equipment Sale
Software License Agreement executed by the parties simultaneously herewith.
11. Equitable Relief. Each of the Parties acknowledges that a disclosing Party
----------------
may be irreparably injured by a breach of this Agreement by the receiving
Parties, and that a disclosing Party, in addition to any other remedies
available at law or in equity, shall be entitled to equitable relief, including
injunctive relief and specific performance, in the event of any breach of the
provisions of this Agreement by the receiving Party.
12. Invalid Provisions. If any provision of this Agreement is held to be
------------------
illegal, invalid or unenforceable, the remaining provisions shall remain in full
force and effect. Should any provision be held to be illegal, invalid or
unenforceable as being too broad with respect to the duration, scope or subject
matter thereof, such provisions shall be automatically modified to reflect the
maximum duration, scope or subject matter allowable by law..
13. Notices. Any notices or other communications contemplated or required under
-------
this agreement, in order to be valid, shall be in writing and shall be given via
personal delivery, telefax or overnight courier, or via U.S. Certified Mail,
Return Receipt Requested, at the following addresses:
23
<PAGE>
If to FiberTel: Amenabar 23 With carbon copy to:
(1426) Buenos Aires Marcello Bombau
Argentina Suipacha 268
Attn: General Manager (1355) Buenos Aires
If to OSS: Online System Services, Inc. With carbon copy to:
1800 Glenarm Place, #800 Stephen Stim & Assoc
Denver, CO 80202 200 West 57th St., #1005
Attn: Steve Adams, Pres. & CEO New York, NY 10019
or at such other addresses as either party may designate by notice to the other.
Such notices or other communications shall be deemed received when actually
delivered (where given via personal delivery, telefax or overnight courier) or
three business days after mailing (where given via U.S. Certified Mail).
14. Integration. This Agreement supersedes all previous oral and written
-----------
agreements, if any, among the Parties regarding the confidentiality of
information disclosed to
each other.
15. Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with the laws of the State of Colorado.
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which, taken together, shall constitute the Agreement.
IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of
the date first above written.
FIBERTEL:
By: /s/ GEORGE Y. STEWART
---------------------
Name: George Y. Stewart
-------------------
Title: C.O.O.
------------------
ONLINE SYSTEM SERVICES, INC.:
By: /s/ R. STEVEN ADAMS
---------------------
Name: R. Steven Adams
-------------------
Title: President/CEO
------------------
24
<PAGE>
SCHEDULE "I" PERFORMANCE BENCHMARKS
-----------------------------------
1. KPMG Peat Marwick
2. Forrester
3. Gartner
4. Andersen Consulting
5. Paul Kagan and Associates
25