BILLING CONCEPTS SYSTEMS, INC.
MASTER LICENSE AGREEMENT
Customer Effective Date:
KMC TELECOM HOLDINGS, INC. _____________________________________
Agreement Number:
_____________________________________
BILLING CONCEPTS SYSTEMS, INC.
MASTER LICENSE AGREEMENT
This Master License Agreement (this "License") is made and entered into
this 31st day of December, 1998 (the "Effective Date"), by and between Billing
Concepts Systems, Inc., a Delaware corporation ("BCS"), and KMC Telecom
Holdings, Inc., a Delaware corporation ("Customer").
WHEREAS, Customer desires to license from BCS the proprietary software
system known as the Modular Business Application System (the "MBA System"); and
WHEREAS, BCS has agreed to license the MBA System to Customer, subject to
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
BCS and Customer agree as follows:
ARTICLE I
DEFINITIONS
1.1 CURRENT RELEASE shall mean, at any time, the MBA System as described in
the MBA System Specifications in effect on the date of the most recent major,
formal software release (e.g., Version 3.0). Current Release does not include
modifications made by BCS pursuant to an agreement between BCS and Customer,
modifications made by Customer to the MBA System, or Optional Applications
Software as defined herein.
1.2 MBA BASE SYSTEM shall mean Version 3.0 of the MBA System and related
documentation as described in Exhibit A of this License.
1.3 MBA SYSTEM shall mean the MBA Base System, together with any and all
future System Releases, PTFs and modifications that may be acquired in the
future by Customer through a product support agreement or other agreement
between BCS and Customer.
1.4 MBA SYSTEM SPECIFICATIONS shall mean the documentation of the MBA
System on file at BCS' offices in San Antonio, Texas, and which is delivered to
Customer in Exhibit A. The MBA System Specifications also include the minimum
hardware and software configuration recommended by BCS for the operation of the
MBA System.
1.5 PROGRAM TEMPORARY FIX (PTF) shall mean the program and/or documentation
changes and associated installation instructions which at Customer's request are
made available to Customer at no charge in advance of the next System Release to
correct a specific problem reported by Customer during the term of this License.
1.6 SYSTEM RELEASE shall mean a collection of program and documentation
changes (revisions, deletions and/or additions) and associated installation
instruction which are periodically made available to Customer at a price
determined by BCS for the purpose of updating a Current Release to produce a new
Current Release.
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1.7 CUSTOMER as used herein shall mean both KMC Telecom Holdings, Inc. and
any of its Affiliates. An Affiliate of Customer shall mean any entity that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with Customer. For purposes of this
Section, "control" means the ownership of over 50% of the voting capital
securities of an entity.
ARTICLE II
MBA SYSTEM LICENSE
2.1 TERM. The license granted herein shall be for a perpetual term
commencing as of the Effective Date, and continuing until terminated as provided
herein.
2.2 GRANT OF LICENSE. Subject to all of the terms and conditions of this
License, BCS hereby grants to Customer, and Customer hereby accepts, a
nonexclusive, non-transferable and perpetual license to use the software listed
in Exhibit A of this License (the "Licensed Software"). This License authorizes
the use of the Licensed Software solely for the purpose of processing its
internal business data and/or external data as required to perform normal
operations for Customer's business. Customer may not use the Licensed Software
for any purpose other than those expressly authorized hereunder. Customer shall
not: (i) use the Licensed Software to act as a service bureau or provide data
processing services to any third persons; (ii) make copies of the Licensed
Software for distribution to third parties; (iii) reverse-engineer or decompile
the Licensed Software for the purpose of designing, or developing for
distribution, license or sale to third parties a software system competitive
with the Licensed Software; and/or (iv) sublicense or resell the Licensed
Software or any license rights granted hereunder.
No transfer of title to the Licensed Software is effected by this License,
and BCS shall retain sole and exclusive title to the Licensed Software and all
modifications thereto and all intellectual property rights associated therewith.
This License is limited to use of the Licensed Software by Customer for
processing of Customer's own internal data (and/or external data as required to
perform normal operations for Customer's business) and files at a data
processing facility owned and controlled by Customer or BCS. Customer may make
copies of the Licensed Software only for Customer's internal use in training,
testing, development, backup and disaster recovery purposes.
2.3 SUBLICENSING AND ASSIGNMENT. This License may not be sublicensed by
Customer to any other person, firm or organization without the prior written
consent of BCS. This License shall be binding on the parties hereto and their
respective successors and assigns. Neither party may assign or transfer its
rights or obligations under this License without the prior written consent of
the other party, except that a party may assign this License without the prior
written consent of the other party if such assignment is made to a person or
entity acquiring substantially all of the assets of such assigning party.
Notwithstanding the foregoing, however, Customer shall have the right, without
the consent of BCS, to collaterally assign this License to any lender providing
financing to Customer; provided, however, that any such assignment shall
expressly provide that: (i) Customer shall remain jointly and severally liable
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with the assignee for all obligations arising under this License unless
expressly released therefrom by BCS; (ii) the assignee shall have no right to
further assign this License to any person or entity without the prior written
consent of BCS, which shall not be unreasonably withheld; and (iii) any breach
by the assignee or Customer of any of the terms of this License shall constitute
a breach entitling BCS to terminate this License as to both Customer and the
assignee (subject to the conditions set forth in Article III hereof. Any
collateral assignment by Customer to a lender which does not comply with the
conditions of the preceding sentence shall be null and void. Within a reasonable
time after receiving a written request from Customer, BCS will issue a consent
to a collateral assignment of this License to a lender of Customer without any
further consideration so long as such collateral assignment complies with the
conditions provided herein.
2.4 LICENSE. Upon the Effective Date, Customer shall pay to BCS the initial
license fee referenced on Exhibit B for the Licensed Software. The initial
license fee shall entitle Customer to use the licensed software components up to
the capacities referenced in Exhibit B. If any of the licensed software
components are used by Customer in excess of the capacities referenced in
Exhibit B, then Customer shall pay to BCS additional license fees as set forth
in Exhibit B.
2.5 MODIFICATION OF THE LICENSED SOFTWARE. BCS shall have the sole and
exclusive right to design and develop any derivative works from or modifications
to the Licensed Software. Any and all modifications and/or derivative works made
from the Licensed Software, including any and all intellectual property rights
associated therewith, shall be the sole and exclusive property of BCS regardless
of whether those modifications or derivative works are prepared at the request
of Customer.
2.6 USE OF PROPRIETARY MATERIALS BY CUSTOMER. Following execution of this
License by BCS and Customer, BCS shall deliver to Customer certain confidential
and proprietary documentation of BCS concerning the Licensed Software
(collectively, the "Confidential Materials"). Customer shall be permitted to use
the Confidential Materials in order to operate the Licensed Software, or for any
other purpose for which Customer has been licensed to use the Licensed Software.
Customer shall not be permitted to use the Confidential Materials for any
purpose for which Customer is not licensed to use the Licensed Software.
Customer represents and warrants to BCS that it will establish and maintain
reasonable procedures to protect the Confidential Materials from unauthorized
disclosure or use. Customer shall not disclose the Confidential Materials to any
third persons without the advance written consent of BCS.
2.7 BCS INSPECTION OF LICENSED SOFTWARE. In order to assure compliance with
the provisions of this License, BCS and its representatives, employees and
agents will have the right to inspect, at BCS' expense, the use of the Licensed
Software at Customer's site (and at any backup or disaster recovery sites) from
time to time during normal business hours. Customer will assist BCS in making
such inspections in such manner as BCS may reasonably request. Such inspections
shall be conducted with at least twenty four (24) hours prior notice and shall
not unduly disrupt the conduct of Customer's business.
2.8 INFRINGEMENT. BCS represents and warrants that BCS is the sole owner of
the MBA System. BCS also represents and warrants that BCS has the right to
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license the MBA System and that this License does not and will not infringe upon
any United States copyrights, United States patent or other proprietary interest
of any person, firm or organization.
2.8.1 NOTICE OF CLAIM. If any action, claim or suit is threatened,
brought or made against Customer based upon infringement of a United States
copyright, United States patent, or other proprietary right under the laws of
the United States, in connection with the use of the MBA System by Customer,
Customer will promptly notify BCS in writing of such action, claim or suit of
which it has actual knowledge and the failure to so notify shall relieve BCS of
its obligations hereunder.
2.8.2 DEFENSE. BCS shall at BCS' expense take charge of the defense of
any infringement action through attorneys of BCS' selection. If any infringement
action is instituted against BCS and Customer jointly, BCS will at BCS' expense
defend such action on behalf of both parties. Customer will cooperate at its own
expense in such defense as reasonably requested by BCS. Customer will have the
right to participate in the defense of such action, at Customer's expense,
and/or take its own position in any litigation. If BCS appeals an adverse
decision it will obtain judicial relief for Customer or post a bond protecting
Customer from liability for judgment on the adverse decision pending the final
determination of the appeal. BCS will pay in full any settlement negotiated by
BCS relating to a claim under this Section 2.8, which settlement shall provide a
full release of Customer from all claims. BCS will indemnify and hold harmless
Customer of and from all costs and expenses of litigation hereunder, as well as
the amount of any adverse judgment rendered against Customer as a result of a
finding of infringement in favor of any third party as a result of Customer's
use of the Licensed Software.
2.8.3 REMEDIAL ACTION. If BCS anticipates an action, claim or suit for
such infringement, or if such an action, claim or suit has been made and the MBA
System, or any part of thereof, has been held to constitute an infringement and
the use of the MBA System or any part of it is enjoined, BCS will, at its
expense, either: (i) obtain for the Customer the right to continue to use the
MBA System, or (ii) replace the MBA System, or part of the MBA System, with a
noninfringing functionally equivalent substitute reasonably acceptable to
Customer, or (iii) modify the MBA System so as to be non-infringing,
functionally equivalent and reasonably acceptable to Customer.
A replacement or partial replacement of, or a modification to, the MBA
System shall be acceptable to Customer if Customer remains able to process its
business in substantially the same manner as before such replacement, partial
replacement or modification, and the effect of such replacement, partial
replacement or modification is not to require the expenditure of substantial
additional effort by Customer in the day to day conduct of Customer's business.
If, however, BCS is unable, despite diligent efforts, to effect any of
these options, Customer may then terminate the License granted herein by
notifying BCS in writing thereof. In the event of such termination, Customer
shall:
i. return the MBA System and all Confidential Materials to BCS; and
ii. be relieved of any further obligation to pay license fees to BCS
hereunder.
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In any event, BCS agrees to provide Customer with reasonable transition
assistance should the License be terminated for patent or copyright
infringement.
2.8.4 LIMITATION OF LIABILITY FOR INFRINGEMENT. BCS will have no
liability for any claim of infringement of copyright, patent or proprietary
interest to the extent such claim is based on either (i) use of any version
other than the unmodified version of the MBA System, except as modified by
enhancements and pre-release enhancements provided by BCS which become part of
the MBA Base System at a later date if infringement could have been avoided by
use of such unmodified version; or (ii) use or combination of the MBA System
with other than BCS provided or approved programs, if infringement could have
been avoided by not using the MBA System in combination with other than such
programs.
2.9 CUSTOMER'S OBLIGATIONS UPON TERMINATION. Upon termination of this
License for any reason whatsoever, Customer agrees to return to BCS the Licensed
Software and all Confidential Materials, including all copies of object code,
documentation, programs and other materials delivered by BCS under this License,
and to certify to BCS in writing within thirty (30) days after termination that
Customer has not retained any copies of those items. Following any such
termination, Customer agrees to cease and permanently refrain from any and all
use whatsoever of the Licensed Software, and all Confidential Materials and any
other information supplied by BCS pursuant to this License.
2.10 SPECIAL WARRANTY AND LIMITATION OF LIABILITY.
2.10.1 SPECIAL WARRANTY. BCS warrants that for 90 days following
installation of the MBA Base System: (i) the MBA Base System will conform in all
material respects to the MBA System Specifications; and (ii) the media in which
the Licensed Software is contained shall be free of material defects in
materials and workmanship. During the 90 day warranty period, Customer may
request the services of BCS to analyze any apparent failure of the MBA Base
System to conform to the MBA System Specifications. Any failure to conform must
be reported to BCS on a System Problem Report in the format specified by BCS.
On or before July 31, 1999: (a) BCS shall install upgrades to the MBA System
licensed by Customer (including any enhancements) which will render the MBA
System Year 2000 Compliant, as defined below; and (b) BCS will provide Customer,
at BCS' expense, an independent certification certifying to such compliance.
Year 2000 Compliant means that:
(1) date data from at least 1900 through 2100 will process without error or
interruption in the MBA System, including leap year calculations; and
(2) there will be no loss of any functionality of the MBA System with respect
to the introduction, processing or output of records containing dates
falling on or after January 1, 2000.
Year 2000 Compliance does not include any processing failure resulting from or
related to any operating system software, hardware, microcode, firmware, system
interface not developed by BCS, or failure of any hardware, software, firmware
or other program used in combination with the MBA System to properly exchange
date data with it.
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The Year 2000 Compliance Systems(s) shall be provided to Licensee as part of
BCS's regular maintenance and support services, subject to Licensee's timely
payment of maintenance and support fees, except as otherwise provided in Section
5.4 of the Product Support Agreement.
Customer's sole and exclusive remedy for any breach of these warranties
shall be to require BCS to cause the MBA Base System to conform to the
applicable System Specifications; provided, however, that in the event that BCS
cannot remedy such breach and such failure to so remedy such breach materially
impacts Customer's ability to use the Licensed Software, then BCS shall refund
to Customer all license fees paid for the Licensed Software on a pro-rata basis
based on a straight line basis over a sixty (60) month period.
BCS' LIABILITY FOR BREACH OF THE WARRANTIES PROVIDED IN THIS SECTION IS LIMITED
TO THE REMEDIES SET FORTH HEREIN. THE WARRANTIES PROVIDED HEREIN ARE IN LIEU OF
ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. BCS
EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR
A PARTICULAR PURPOSE. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE
DESCRIPTION HEREIN.
2.10.2 LIMITATION OF LIABILITY. BCS' LIABILITY TO CUSTOMER UNDER THIS
LICENSE, SHALL NOT EXCEED, AND SHALL BE LIMITED TO, ALL PAYMENTS MADE BY
CUSTOMER UNDER THIS LICENSE. BCS WILL NOT BE LIABLE FOR ANY OTHER DAMAGES
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, INCIDENTAL DAMAGES, LOSS OF PROFITS
AND OTHER CONSEQUENTIAL DAMAGES AND ANY CLAIMS OR DEMANDS AGAINST CUSTOMER BY
ANY OTHER PARTY, EVEN IF BCS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
ARTICLE III
TERMINATION
3.1 TERMINATION FOR CAUSE. In the event that Customer breaches the terms of
this License by making any unauthorized use of the Licensed Software or engaging
in any other conduct which could impair BCS' copyrights and intellectual
property rights in the Licensed Software, then following five (5) days' notice
of such breach by BCS and failure of Customer to cure such breach within such
five (5) day period, BCS shall have the right to terminate this License without
notice immediately and require Customer to return to BCS the Licensed Software,
all Confidential Materials, and all object code and documentation. In the event
of any other kind of material breach of this License by either party hereto
(except for nonpayment by Customer which is controlled by Section 3.2 of this
License), and the breaching party fails to cure such breach within sixty (60)
days after its receipt of a written notice specifying the details of the breach
or, with respect to any material breach which cannot reasonably be cured within
sixty days, should the breaching party fail to proceed within sixty days to
commence curing the breach and thereafter to proceed with all due diligence to
cure the breach, the party not in breach of this License may terminate this
License by giving prompt written notice of termination.
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3.2 TERMINATION FOR NONPAYMENT. In the event that Customer fails to pay all
amounts due BCS in accordance with the terms of this License, then following ten
(10) days' notice of such breach by BCS and failure to remedy such breach within
such ten (10) day period, BCS may terminate this License upon written notice to
Customer.
3.3 TERMINATION DUE TO INSOLVENCY. In the event either party to this
License becomes or is declared insolvent, becomes subject to a voluntary or
involuntary bankruptcy or similar proceeding, or makes an assignment for the
benefit of all or substantially all of its creditors, then in such event the
other party to this License may terminate this License by giving written notice
thereof to such party which notice shall specify the date of termination.
3.4 BANKRUPTCY OF BCS. In the event that BCS becomes subject to bankruptcy
proceedings, this License shall continue in full force and effect, and Customer
shall continue to enjoy all License rights granted herein subject to Customer's
continued compliance with all of the terms and conditions of this License. BCS
acknowledges that if BCS as a debtor-in-possession (or a trustee in bankruptcy
in a case under the United States bankruptcy code) rejects this License or any
agreement supplementary hereto, Customer may elect to retain its rights under
this License or any agreement supplementary hereto as provided in Section 365(n)
of the bankruptcy code.
Upon written request of the Customer to BCS or the bankruptcy trustee, BCS or
such bankruptcy trustee shall not interfere with the rights of Customer as
provided in this License or any agreement supplementary hereto to obtain the
Confidential Materials from BCS or the bankruptcy trustee and shall, if
requested, cause a copy of the Confidential Materials to be made available to
Customer at no additional charge.
ARTICLE IV
OWNERSHIP OF PROGRAMS, CONFIDENTIALITY
AND AUDIT RIGHTS
4.1 ACKNOWLEDGMENT OF INTELLECTUAL PROPERTY RIGHTS AND TRADE SECRETS.
Customer acknowledges that the Licensed Software (including, without limitation,
the database, data model and any modifications to the MBA System and any work
product of BCS which is related to the MBA System) is a commercially valuable
proprietary product of BCS, the design and development of which has involved the
expenditure of substantial amounts of money and the use of skilled development
experts over a long period of time and which affords BCS a commercial advantage
over its competitors, and that loss of this competitive advantage due to
unauthorized disclosure or use of such proprietary information would cause great
injury and harm to BCS. Customer acknowledges that the Licensed Software
(specifically including, but not limited to, the documentation thereof)
constitute intellectual property and TRADE SECRETS, disclosed to Customer on the
basis of the confidential relationship between Customer and BCS under this
License, to be used only as may be expressly permitted by the terms and
conditions of this License, and that the restrictions imposed upon Customer by
this Section 4.1 are necessary to protect the secrecy of such proprietary
information and prevent the occurrence of such injury and harm to BCS.
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Customer covenants that it will not, without the prior written consent of BCS,
disclose, divulge, publish to others or employ to its own advantage, other than
as herein provided, the Licensed Software or any proprietary information of BCS
relating thereto and that it will reveal the same only to those of its
employees, employees of Customer's affiliates, attorneys or auditors who require
it for the purpose of Customer's use of the Licensed Software hereunder and only
if such employees, attorneys or auditors are subject to use and disclosure
restrictions as complete as those assumed by Customer hereunder.
The obligations of Customer in this Section 4.1 shall survive any termination of
this License.
4.2 CONFIDENTIALITY. BCS and Customer agree that all proprietary
information in whatever form delivered by one party to the other shall be deemed
of proprietary and trade secret status and shall be held in strict confidence
and shall be used only for purposes of this License. Each party agrees to
exercise at least the same standard of care to protect the other party's
proprietary information as is used to protect its own such proprietary
information from unauthorized disclosures (but no less than a reasonable
standard of care). No such information shall be disclosed by the recipient
party, its agents or employees without the prior written consent of the other
party, except as may be necessary to enforce this License or by reason of legal,
accounting or regulatory requirements beyond the reasonable control of the
recipient party. Notwithstanding the foregoing, proprietary information shall
not include such information that: (a) is or becomes generally available to the
public other than as a result of a disclosure by the receiving party; (b) is or
becomes available to the receiving party on a non-confidential basis from a
source (other than the disclosing party or one if its agents, representatives or
employees) that is not prohibited from disclosing such information by a legal,
contractual or fiduciary obligation; or (c) was known to the receiving party on
a non-confidential basis prior to its disclosure to the receiving party by the
disclosing party. The provisions of this Section shall survive termination of
this License for any reason.
ARTICLE V
MISCELLANEOUS
5.1 TAXES. Customer shall be solely responsible for all state, local or
federal taxes, however designated, levied or based on any fees payable hereunder
(excluding those taxes based on net income derived from BCS), including but not
limited to state and local privilege and excise taxes based on gross revenue,
and any sales taxes or amounts in lieu thereof, paid or payable by BCS in
respect of the foregoing. Customer shall pay any such taxes to BCS no later than
thirty (30) days after Customer's receipt of invoice from BCS. Customer hereby
indemnifies and holds BCS harmless from and against any losses caused by
Customer's failure to pay any such taxes, including any penalties or interest
thereon incurred with respect to such taxes. BCS will inform Customer of any
audit by any governmental authority regarding such taxes, will allow Customer to
control any challenge to, settlement of or payment of any amounts deemed payable
by such government authority as a result of such audit or inquiry, and will
cooperate with all reasonable requests by Customer for BCS to assist in
challenging, settling and paying such amounts. Customer's obligations pursuant
to this Section 5.1 shall survive any termination or expiration of this License.
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5.2 EXCUSED PERFORMANCE. Except for Customer's obligation to pay BCS
hereunder, Customer and BCS shall be excused from performance, and shall have no
liability, for any period and to the extent that either of them is prevented,
hindered or delayed from performing any services or other obligations under this
License, in whole or in part, as a result of acts, omissions or events beyond
the reasonable control of such party, including by way of illustration and not
limitation, acts or omissions of Customer; failure or malfunction of computer or
telecommunications hardware, equipment or software, beyond the reasonable
control of such party (other than the telecommunications hardware, equipment or
software that is the subject of this License); breach or other nonperformance by
BCS' or Customer's vendors and suppliers; strikes or labor disputes; riots; war;
fire; acts of God or governmental regulations (excluding any problems due to the
Licensed Software's failure to be Year 2000 Compliant as required under the
License).
5.3 EMPLOYEES. Customer and BCS acknowledge that their success in their
respective industries is largely dependent on the performance of their personnel
and that, therefore, Customer and BCS expend substantial resources in connection
with employment and training. Accordingly, neither Customer nor BCS shall hire
or retain, either as an employee or independent contractor, any person who was a
Restricted Employee of the other party at any time during the twelve (12) months
preceding such hiring or retention, without obtaining the advance written
consent of such other party. A Restricted Employee of Customer or BCS is any
employee or third party independent contractor of Customer or BCS, except a
member of the clerical staff. This undertaking by Customer and BCS shall be
deemed an essential element of this License and shall survive its termination.
5.4 NO WAIVER. No failure of either party to exercise any power or right
given either party hereunder or to insist upon strict compliance by either party
with its obligations hereunder, and no custom or practice of the parties at
variance with the terms hereof shall constitute a waiver of either party's right
to demand exact compliance with the terms hereof.
5.5 RIGHTS CUMULATIVE. All rights, powers, and privileges conferred
hereunder upon the parties shall be cumulative and shall not restrict those
given by law.
5.6 SINGULAR INCLUDES PLURAL. The singular of any word in this License
includes the plural.
5.7 NOTICES. Whenever under this License one party is required or permitted
to give notice to the other, such notice shall be deemed given when delivered in
hand or three (3) business days after the date mailed by United States mail,
certified mail, return receipt requested, postage prepaid, or one business day
after deposit with Federal Express where the notice has been designated for next
day priority delivery, and addressed as follows:
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In the case of BCS:
Billing Concepts Systems, Inc.
7411 John Smith Drive
San Antonio, Texas 78229
Attention: Mike Hancock
cc: General Counsel
Facsimile: (210) 949-4375
In the case of Customer:
KMC Telecom Holdings, Inc.
1545 Route 206, Suite 300
Bedminster, New Jersey 07921
Attention: Paul DiMarco
Facsimile: (908) 719-8775
Either party may change its address for notification purposes by giving the
other three (3) days prior written notice of the new address and the date upon
which it will become effective.
5.8 DISPUTE RESOLUTION. This Section 5.8 governs any dispute, disagreement,
claim or controversy between Customer and BCS arising from or related to this
License (a "Disputed Matter"). All Disputed Matters shall be submitted to the
following dispute resolution process:
(a) INTERNAL ESCALATION. First, the Disputed Matter shall be referred
jointly to senior executives of each of the parties. If such
executives do not agree upon a resolution within ten (10) business
days after referral of the matter to them, the complaining party shall
proceed to the next stage of this dispute resolution procedure.
(b) MEDIATION. The complaining party shall, upon written notice and within
ten (10) business days after the conclusion of the internal escalation
procedure, elect to have the Disputed Matter referred to non-binding
mediation before a single impartial mediator to be jointly agreed upon
by the parties. The mediation hearing shall be attended by executives
of both parties possessing authority to resolve the Dispute Matter,
and shall be conducted no more than thirty (30) business days after a
party serves a written notice of an intention to mediate. Customer and
BCS shall share equally all costs of such mediation. If the Disputed
Matter cannot be resolved at mediation, the complaining party shall
proceed to the next stage of this dispute resolution procedure.
(c) ARBITRATION. In the event that a Disputed Matter has not been resolved
through mediation, the complaining party shall submit the Disputed
Matter to binding arbitration pursuant to the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA"). The
arbitration panel shall have the authority to render any award or
remedy allowed by law. The arbitration panel shall consist of three
neutral arbitrators selected from the AAA's Panel of Arbitrators, and
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the arbitration hearing shall be conducted in Dallas, Texas. Within
ten (15) days after receipt of notice by a party of submission to
arbitration, each party shall designate in writing one (1) neutral
arbitrator from the AAA's Panel of Arbitrators, and the two (2)
arbitrators named by the parties shall select the third arbitrator
from the AAA's Panel of Arbitrators. If the two arbitrators selected
cannot agree upon a third arbitrator, the third arbitrator will be
selected by the AAA in accordance with the AAA Rules. Each party shall
be entitled to conduct not more than three (3) depositions, not to
exceed 8 hours each, within thirty (30) days after the third
arbitrator has been selected. The parties shall diligently attempt to
schedule the arbitration hearing for a time within one hundred and
twenty (120) days after the demand for arbitration hereunder has been
issued. Following the hearing, the arbitrators shall issue a written
decision specifying the basis of their decision, and the award made,
if any. The cost of the arbitration proceeding shall be shared equally
by the parties, but the prevailing party in any arbitration proceeding
shall be entitled to recover its reasonable and necessary attorneys'
fees and expenses incurred in connection with the arbitration.
Provided that Customer continues to timely pay BCS for services
rendered under this License, BCS shall continue to provide such
services during the pendency of any Disputed Matter before
arbitration. The arbitrators shall have no authority to award punitive
or exemplary damages or to award damages in excess or in contravention
of this License.
(d) INJUNCTIVE RELIEF PENDING ARBITRATION. NOTWITHSTANDING THE FOREGOING,
HOWEVER, IT IS AGREED THAT ANY BREACH OF THIS LICENSE BY CUSTOMER
MAKING ANY UNAUTHORIZED USE OF THE LICENSED SOFTWARE OR ENGAGING IN
ANY OTHER CONDUCT WHICH COULD IMPAIR BCS' COPYRIGHTS OR INTELLECTUAL
PROPERTY RIGHTS IN THE LICENSED SOFTWARE WILL CAUSE IMMEDIATE AND
IRREPARABLE HARM TO BCS. IN THE EVENT OF ANY SUCH BREACH BY CUSTOMER,
BCS SHALL BE ENTITLED TO PURSUE IMMEDIATE AND INTERIM INJUNCTIVE
RELIEF FROM ANY COURT OF COMPETENT JURISDICTION TO RESTRAIN SUCH
UNAUTHORIZED USE OR CONDUCT, AND OBTAIN OTHER INJUNCTIVE RELIEF AS MAY
BE NECESSARY TO PROTECT BCS' COPYRIGHTS AND INTELLECTUAL PROPERTY
RIGHTS.
5.9 RELATIONSHIP OF PARTIES. In licensing the Licensed Software to
Customer, BCS is acting only as an independent software licensor. Except as
expressly set forth in this License, BCS does not undertake by this License or
otherwise to perform any obligation of Customer, whether regulatory or
contractual, or to assume any responsibility for Customer's business or
operations. This License shall not be deemed to create a partnership, joint
venture or fiduciary relationship between the parties.
5.10 CONSEQUENTIAL DAMAGES OF BCS. Customer shall not be liable to BCS for
any loss of profits, any incidental, special, exemplary, or consequential
damages of any kind in connection with this License.
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5.11 SEVERABILITY. In the event any provision of this License is held to be
unenforceable or invalid by any court of competent jurisdiction, the validity
and enforceability of the remaining provisions of this License shall not be
affected and, in lieu of such invalid or unenforceable provision, there shall be
added automatically as part of this License one or more provisions as similar in
terms as may be valid and enforceable under applicable law.
5.12 ENTIRE AGREEMENT. This License and all Exhibits and attachments
hereto, together with the Hardware and Software Procurement Agreement, Product
Support Agreement, Outsourcing Agreement and the Consulting Services Agreement,
all dated as of the date hereof, between BCS and Customer (collectively the
"Other Agreements"), constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous representations, understandings or agreements, whether oral or
written, relating to the subject matter hereof. All prior or contemporaneous
representations, understandings or agreements, whether oral or written, that are
not expressly set forth within the four corners of this License or the Other
Agreements are hereby deemed waived, superseded and abandoned.
5.13 AMENDMENTS. No amendment or modification of this License will be
binding on either of the parties to this License unless such Amendment is
contained in a written document which expresses an intention to amend this
License and is executed by both the parties.
5.14 COUNTERPARTS. This License may be executed in several counterparts all
of which taken together shall constitute one single agreement between the
parties.
5.15 HEADINGS. The article and section headings included in this License
are for reference and convenience only and shall not enter into the
interpretation of this License.
5.16 GOVERNING LAW AND VENUE. This License shall be governed and construed
in accordance with the laws of the State of Texas, without regard to the choice
of law rules of Texas. All suits concerning any and all matters related to or
arising under or by virtue of this License shall be commenced exclusively in
either the State Courts located in Dallas, Texas or the federal courts located
in Dallas, Texas, and venue of any such action shall rest exclusively in Dallas,
Texas.
5.17 CURRENCY. All monetary amounts stated in this License are stated in
United States Dollars, and all amounts due hereunder shall be paid by Customer
in United States Dollars.
5.18 TERMS CONFIDENTIAL. The terms and conditions of this License are
confidential and shall be treated as such by Customer and BCS. Neither Customer
nor BCS will disclose the terms of this License to third parties, including the
amount of fees to be paid hereunder, except as may be required for the filing of
reports and forms with governmental agencies under applicable statutes and
regulations. Notwithstanding the foregoing, however, BCS may disclose that it
has entered into this License in a press release (previously approved by
Customer, such approval not to be unreasonably withheld) and in sales
presentations to third parties, and BCS may generally describe the services
provided to Customer without disclosing the pricing terms contained herein.
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IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have executed this License on the dates indicated below.
BILLING CONCEPTS SYSTEMS, INC. KMC TELECOM HOLDINGS, INC
By: /S/ MICHAEL A. HARRELSON By: /S/ MICHAEL STERNBERG
(Signature-Authorized Officer) (Signature-Authorized Officer)
Name: Michael A. Harrelson Name: Michael Sternberg
Title: President/COO Title: President
Date: 12/31/98 Date: December 31, 1998
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EXHIBIT A
MBA SYSTEM
LICENSE SCHEDULE
Customer is licensing the BCS system known as the MBA Base System, Release
No. 3.0, which includes the following Standard Modules: Customer Acquisition,
Customer Care, Product and Rate Definition, Invoice Preparation, Accounts
Receivable and Payments Processing.
Customer is also licensing the following MBA Base Options:
Travel Card Processing
Switch Interface
Customer is also licensing the following MBA Item Rating Modules:
Local
Data
Private Line
Internet
Customer is also licensing the following Usage Rating Modules:
Usage
Carrier Access Billing
Customer is also licensing the following Non-MBA Software: Seagull (GUI), at the
license fees reflected in Exhibit B.
In addition to the above-listed software, BCS grants to Customer a
non-exclusive, nontransferable and perpetual license to use: (i) any System
Releases or PTFs for the above-listed software obtained by Customer from BCS
pursuant to a product support or other agreement entered into by BCS and
Customer; and (ii) any modifications made by BCS for Customer to the
above-listed software. Customer shall be entitled to use such additional
software items at no additional license fee.
Customer acknowledges that it will be necessary for Customer to enter into
separate licensing arrangements at Customer's expense with Vertex and Bellcore
to license related software necessary to process Customer's data using the MBA
System.
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EXHIBIT B
THE LICENSE FEES
Customer shall pay to BCS an initial license fee of $1,749,166 which shall
entitle Customer to use the licensed software components up to the maximum usage
levels indicated below:
MBA LICENSED SOFTWARE COMPONENT MAXIMUM USAGE LEVEL LICENSE FEE
MBA Base System 125,000 Accounts $250,000
Travel Card Processing 125,000 Accounts $12,500
Switch Interface 125,000 Accounts $25,000
Local Item Rating Module 125,000 Billed Items Per $375,000
Month
Data Item Rating Module 50,000 Billed Items Per Month $50,000
Private Line Item Rating Module 50,000 Billed Items Per Month $35,000
Internet Item Rating Module 25,000 Billed Items Per Month $35,000
Usage Rating Module 50,000,000 Billed Records $933,333
Per Month]
CABS Usage Rating Module 2,500,000 Billed Records Per $33,333
Month]
================================================================================
GRAND TOTAL OF MBA LICENSE FEE $1,749,166
NON-MBA LICENSED SOFTWARE MAXIMUM USAGE LEVEL LICENSE FEE
Seagull GUII Software Copies 150 Seats $37,750
================================================================================
GRAND TOTAL OF NON-MBA LICENSE FEE $37,750
In the event that Customer's usage of any of the licensed software components
exceeds the maximum usage levels indicated above for any three (3) consecutive
calendar monthly periods, then Customer shall pay to BCS an additional license
fee for the licensed software component(s) involved at the prices set forth
below, and for the maximum usage levels set forth below:
A. MBA BASE SYSTEM
MAXIMUM USAGE LEVEL (TOTAL NUMBER OF ACCOUNTS) LICENSE FEE
250,000 $500,000
350,000 $700,000
500,000 $1,000,000
650,000 $1,300,000
800,000 $1,600,000
1,000,000 $2,000,000
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B. MBA BASE OPTIONS
1. TRAVEL CARD PROCESSING
5% of the applicable license fee set forth in subsection A above.
2. SWITCH INTERFACE
10% of the applicable license fee set forth in subsection A above.
C. MBA ITEM RATING MODULES
1. LOCAL
BILLED ITEMS PER MONTH LICENSE FEE
250,000 $750,000
350,000 $1,050,000
500,000 $1,500,000
650,000 $1,950,000
800,000 $2,400,000
1,000,000 $3,000,000
2. DATA
BILLED ITEMS PER MONTH LICENSE FEE
125,000 $125,000
250,000 $250,000
350,000 $350,000
500,000 $500,000
650,000 $650,000
800,000 $800,000
1,000,000 $1,000,000
3. PRIVATE LINE
BILLED ITEMS PER MONTH LICENSE FEE
125,000 $93,750
250,000 $187,500
350,000 $262,500
500,000 $375,000
650,000 $487,500
800,000 $600,000
1,000,000 $750,000
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4. INTERNET
BILLED ITEMS PER MONTH LICENSE FEE
50,000 $50,000
125,000 $125,000
250,000 $250,000
350,000 $350,000
500,000 $500,000
650,000 $650,000
800,000 $800,000
1,000,000 $1,000,000
D. USAGE RATING MODULES
1. USAGE
BILLED RECORDS PER MONTH LICENSE FEE
75,000,000 $2,000,000
2. CABS
BILLED RECORDS PER MONTH LICENSE FEE
5,000,000 $66,667
10,000,000 $133,333
20,000,000 $266,667
35,000,000 $466,667
50,000,000 $666,667
75,000,000 $1,000,000
E. CALCULATION OF SEAGULL NON-MBA LICENSE FEES
BCS will procure for Customer the Seagull GUI software at a rate of $225
per seat.
INITIAL SEATS ORDERED LICENSE FEE
150 $33,750
F. CALCULATION OF ADDITIONAL LICENSE FEES.
When Customer exceeds the appreciable maximum usage level for any of the
software components for three (3) consecutive calendar months, Customer shall be
required to pay the difference between its currently licensed maximum usage
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level and the new maximum usage level license fee. For example, if Customer's
total number of accounts increases to 175,000, then Customer shall be required
to pay an additional license fees calculated as follows:
MBA Base System Additional License Fee = $250,000 ($500,000 - $250,000)
Travel Card Processing Additional License Fee = $12,500 ([$500,000 -
$250,000] * .05)
Switch Interface Additional License Fee = $25,000 ([$500,000 - $250,000] * .
10)
Similarly, if Billed Internet Items Per Month increases from 25,000 to 130,000,
then the additional license fee would be $220,000 ($250,000 - $35,000).
Payment by Customer of any additional license fees due to BCS shall be made
within thirty (30) days after the end of the third consecutive calendar monthly
period in which usage has exceeded the capacity for which the software has been
licensed. Thereafter, further increases in usage of the licensed software
components by Customer over any three (3) consecutive calendar monthly periods
shall require Customer to pay further additional license fees as set forth in
Exhibit B.
Customer shall in no event be entitled to receive any refunds or credits for
license fees in the event that Customer's maximum usage levels decrease for any
period of time.
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