<PAGE>
As filed with the Securities and Exchange Commission on November 16, 1998.
Registration No. 333-52731
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
POST-EFFECTIVE AMENDMENT NO. 1
TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ROCKY MOUNTAIN INTERNET, INC.
---------------------------------------------
(Name of small business issuer in its charter)
DELAWARE 7375 84-1322326
- ----------------------------- ---------------------------- ------------------
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
1099 18TH STREET, SUITE 3000, DENVER, COLORADO 80202 (303) 672-0700
----------------------------------------------------------------------
(Address and telephone number of principal executive offices)
THE PRENTICE HALL CORPORATION SYSTEM, INC.,
1013 CENTRE ROAD, WILMINGTON, DELAWARE 19805
----------------------------------------------------------------------
(Name and address of agent for service)
(800) 927-9800
-----------------------------------------------------------------------
(Telephone Number of agent for service)
--------------------------------------------------------------
Copies to:
Peter J. Kushar Jeffrey Bartholomew
Rocky Mountain Internet, Inc. Hall & Evans, L.L.C.
1099 Eighteenth Street 1200 Seventeenth Street
30th Floor Suite 1700
Denver, CO 80202 Denver, CO 80202
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act, check the following box. X
---
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ----
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ----
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ----
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
a) Exhibits
Number Description of Exhibits
<TABLE>
<S> <C>
3.1 Certificate of Incorporation (1)
3.2 Bylaws of Rocky Mountain Internet, Inc. (1)
3.3 Certificate of Amendment of Certificate of Incorporation of Rocky
Mountain Internet, Inc. (12)
4.1 Form of Warrant Agreement dated September 5, 1996 between Rocky
Mountain Internet, Inc. and American Securities Transfer, Inc. (1)
4.2 Form of Subordinated Convertible Promissory Note (1)
4.3 Form of Lock-Up Agreement for Shareholders (1)
4.4 Form of Lock-Up Agreement for Preferred Stockholders (1)
4.5 Form of Lock-Up Agreement for Debenture Holders (1)
4.6 Form of Stock Certificate (1)
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
4.7 Form of Warrant Certificate (1)
4.8 Warrant Agreement between Rocky Mountain Internet, Inc. and Douglas H.
Hanson dated October 1, 1997 (8)
4.9 1996 Employees' Stock Option Plan (6)
4.10 1996 Non-Employee Directors' Stock Option Plan (6)
4.11 Rocky Mountain Internet Inc. 1997 Non-Qualified Stock Option Plan (7)
4.12 1997 Stock Option Plan (9)
4.12.1 First Amendment to Non-Qualified Stock Option Agreement pursuant to the
Rocky Mountain Internet, Inc. 1997 Stock Option Plan (12)
4.12.2 First Amendment to Incentive Stock Option Agreement pursuant to the
Rocky Mountain Internet, Inc. 1997 Stock Option Plan (12)
4.13 Rocky Mountain Internet, Inc. 1998 Employees' Stock Option Plan (10)
4.14 Rocky Mountain Internet, Inc. 1998 Non-Employee Directors' Stock Option
Plan (11)
5.2 Opinion and Consent of Hall & Evans, L.L.C. as to legality of
securities being registered (12)
10.1 Agreement of Lease between Denver-Stellar Associates Limited
Partnership, Landlord and Rocky Mountain Internet, Inc., Tenant (2)
10.2 Asset Purchase Agreement - Acquisition of CompuNerd, Inc. (2)
10.3 Confirmation of $2.0 million lease line of credit (2)
10.4 Agreement between MCI and Rocky Mountain Internet, Inc. governing the
provision of professional information system development services for
the design and development of the MCI internal Intranet project
referred to as Electronic Advice. (2)
10.5 Sublease Agreement-February 26, 1997-1800 Glenarm, Denver, Co. (4)
10.6 Acquisition of The Information Exchange (4)
10.7 Asset purchase of On-Line Network Enterprises (4)
10.8 1996 Incentive Compensation Plan - Annual Bonus Incentive (4)
10.9 1997 Incentive Compensation Plan - Annual Bonus Incentive (4)
10.10 TERMINATION AGREEMENT of joint venture between Rocky Mountain Internet,
Inc. and Zero Error Networks, Inc. (5)
10.11 Private Placement Memorandum (5)
10.12 Carrier Services Switchless Agreement Between Frontier Communications
of the West, Inc. and Rocky Mountain Broadband, Inc.*
10.13 Wholesale Usage Agreement Between PSINet Inc. and Rocky Mountain
Internet, Inc. (12)
10.14 PacNet Reseller Agreement between PacNet Inc. and Rocky Mountain
Internet, Inc.* (12)
10.15 Operating Agreement of The Mountain Area EXchange LLC (12)
10.16 Software License and Consulting Services Agreement Between Rocky
Mountain Internet, Inc. and Novazen Inc.* (12)
16.1 Letter re change in certifying accountant (3)
23.1 Consent of Baird, Kurtz & Dobson
23.2 Consent of McGladrey & Pullen, LLP
23.7 Consent of Aidman, Piser & Company, P.A.
27.1 Financial Data Schedule
</TABLE>
*Portions of these documents have been omitted pursuant to a request for
confidential treatment. The omitted portions have been filed seperately with
the Securities and Exchange Commission.
(1) Incorporated by reference from the Company's registration statement on
Form SB-2 filed with the Commission on August 30, 1996, registration
number 333-05040C.
II-3
<PAGE>
(2) Incorporated by reference from the Company's Quarterly Report on Form
10-QSB filing dated September 30, 1996.
(3) Incorporated by reference to the Company's Current Report on Form 8-K
filing dated January 28, 1997.
(4) Incorporated by reference to the Company's Annual Report on Form 10-
KSB dated December 31, 1996.
(5) Incorporated by reference to the Company's Quarterly Report on Form
10-QSB dated June 30, 1997.
(6) Incorporated by reference to the Company's documents filed with
Initial Public Offering.
(7) Incorporated by reference to the Company's Form S-8 Registration
Statement filed on September 26, 1997.
(8) Incorporated by reference to the Company's Current Report on Form 8-K
dated October 6, 1997.
(9) Incorporated by reference to the Definitive Proxy Statement (Appendix
A) filed on Schedule 14A on February 13, 1998.
(10) Incorporated by reference to the Definitive Proxy Statement (Appendix
B) filed on Schedule 14A on February 13, 1998.
(11) Incorporated by reference to the Definitive Proxy Statement (Appendix
C) filed on Schedule 14A on February 13, 1998.
(12) Previously filed.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Post-Effective Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and County of Denver, State of
Colorado, on December 11, 1998.
ROCKY MOUNTAIN INTERNET, INC.
By: /s/ Douglas H. Hanson
---------------------------------------
Douglas H. Hanson, President, Chief Executive Officer,
and Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Douglas H. Hanson Principal Executive Officer and December 11, 1998
- --------------------- Chairman of the Board of Directors
Douglas H. Hanson
/s/ Peter J. Kushar Chief Financial Officer, Secretary, December 11, 1998
- ------------------- Treasurer, and Principal Accounting
Peter J. Kushar Officer
/s/ D. D. Hock Director December 11, 1998
- --------------
D. D. Hock
/s/ Robert W. Grabowski Director December 11, 1998
- -----------------------
Robert W. Grabowski
/s/ Lewis H. Silverberg Director December 11, 1998
- -----------------------
Lewis H. Silverberg
/s/ Mary Beth Vitale Director December 11, 1998
- --------------------
Mary Beth Vitale
</TABLE>
II-5
<PAGE>
Exhibit 10.13
[LOGO]
WHOLESALE USAGE AGREEMENT
PSINet Inc. Purchaser: Rocky Mountain
510 Huntmar Park Drive Address: Internet, Inc.
Herndon, VA 20170 1099 18th St.
Suite 3000
Denver, CO 80202
Phone:703.904.4100 Phone: 303. 672.0706
Facsimile:703.397.5318 Facsimile: 303. 672.0711
[email protected] Electronic Mail: [email protected]
Business Contact: Julie Gillespie Business Contact: Kevin Loud
Title: Regional Sales Manager Title: VP, Operations
Phone: 703.904.4100 x1375
Technical Contact: Bob Conant Technical Contact: Richard Dingess
Title: ISP Support Engineer
Phone: 518.283.8860 Title: Vice President
Phone: 303. 672.0727
Fax 303. 672.0711
- --------------------------------------------------------------------------------
THIS AGREEMENT is made by and between PSINet Inc., a corporation incorporated
under the laws of the State of New York, ("PSINet") and Rocky Mountain Internet,
Inc. ("Retailer") in order for Retailer to obtain from PSINet access to the
PSINet's network and the Internet for the benefit of Retailer's individual
customers desiring dialup or "switched" network access ("Access") as further
described below. In consideration of the mutual promises and covenants contained
herein, the parties agree, intending to be legally bound, as follows:
1. Definitions. The following terms shall have the following meanings for
purposes of this Agreement:
1.1 "Authorized User" shall mean any person authorized by a Subscriber to
have an account on a Host. Retailer may not permit any person or entity
other than an Authorized User to Access to the Network, except with the
written consent of PSINet. No person may be authorized to use the Network by
means of a connection between a Host owned or leased by a Subscriber and a
Host owned or leased by a person other than a Subscriber.
1.2 "Effective Date" of this Agreement is the date accompanying the last
party to sign's signature.
1.3 "Forecast" shall be the four (4) month rolling forecast Retailer
provides to PSINet on a monthly basis of the estimated number of Subscribers
that will be served by each POP.
1.4 "Host" shall mean a computer with a network (or IP) address.
1.5 "Mark" is any name, logo, trade name, trademark, copyright, service mark
or other intellectual property right owned by PSINet or its Retailer.
1.6 "Network" shall mean the combination of computer hardware, computer
software programs and data transmission facilities operated by PSINet (or
its duly authorized subcontractors) which will permit computers operated by
Subscribers to communicate with computers at remote locations which are
operated by others via the TCP/IP communications protocol and to provide
access to Internet.
1.7 "POP" shall mean a Network point-of-presence where PSINet equipment will
be located and these POPs will be positioned throughout the world in order
to provide Authorized Users Access via telephone calls.
<PAGE>
1.8 "Subscriber" shall mean any individual person authorized by Retailer to
have Access to the Network, although this Access is not to be used with
Local Area Network (LAN) applications. Retailer may not permit any entity
other than a Subscriber to have Access to the Network, except with the
written consent of PSINet.
2. PSINet Obligations.
2.1 General. PSINet agrees to provide Retailer with Access for Subscribers
to the Network and the Internet. The fees to be paid by Retailer to PSINet
for such Access services are set forth below in Section 4.
2.2 Provision of Access. Throughout the term of this Agreement, PSINet shall
provide Subscribers with Access at the levels then provided and supported by
PSINet. A recent estimated listing of Network POPs can be retrieved through
access to PSINet's world-wide web site at 'http://www.psi.net'. PSINet
reserves the right to install new POPs and/or to close existing POPs as it,
in its sole discretion, deems appropriate. In the event PSINet deems it
necessary to close an existing POP, PSINet shall provide Retailer with sixty
(60) days written notice thereof. Retailer may order such Access on behalf
of its present or future Subscribers and there shall be no limit on the
number of Subscribers who may use the Network; provided, however, that
PSINet may refuse service to Retailer because there is insufficient capacity
on the Network or in the POP to provide the Access amount requested. In the
event PSINet determines there to be such lack of capacity, then the
provisions of Section 4.10 herein do not apply to the effected POP during
any month for which such insufficient capacity occurs.
2.3 ISDN Service. PSINet shall also make ISDN 64k and 128k Internet
connection services available to Retailer for Subscribers. The fees to be
paid by Retailer for such services are set forth below.
2.4 Quality of Service. PSINet shall provide to Retailer (for its
Subscribers) Internet connection services that meet reasonable commercial
standards, including, but not limited to, accessibility, latency, packet
loss, and throughput. PSINet shall keep and maintain its Network in good
condition and repair. The Network shall be properly maintained, serviced and
upgraded by PSINet as it, in its sole discretion, shall determine is
necessary in order to ensure connectivity to Subscribers. Any deviation
from these terms will be considered a material breach.
2.5 Reports and Information Regarding Service.
2.5.1 Access to Network Monitoring Systems. PSINet shall provide
Retailer with read-only access to all applicable network monitoring
systems used by PSINet to monitor the Network.
2.5.2 PSINet Network Outages. PSINet shall provide to Retailer prompt
notification of any Network outages that affect Subscribers. When
possible, at least three days in advance notice of planned outages shall
be given to Retailer so that Subscribers may be alerted.
2.6 PSINet Technical Support. PSINet agrees to provide Retailer, at no
additional charge, reasonable back-end technical support and problem
escalation support for Access and Network problems. However, PSINet is not
obligated to provide technical support and problem escalation support to
Subscribers.
2.7 Termination of Access. PSINet shall terminate the Access rights of any
Subscriber as soon as is reasonably practicable upon written notice from
Retailer to do so or upon mutually agreed upon electronic process with
receipt confirmed, but shall have no liability in connection therewith.
Further, Retailer and its Subscribers are required to comply with PSINet's
Net-Abuse Policy ("Policy") as currently set forth on PSINet's Web site
(http://www.psi.net) and as the Policy may be modified by PSINet in its sole
discretion from time to time. Any content, material, message, or data made
available or transmitted through the Network, wherever it is sent from,
viewed, received, or retrieved, that is in violation of (i) any local,
state, federal or international law, regulation or treaty; (ii) the Policy;
or (iii) any community standard or accepted Internet policy is prohibited.
In the event of violation of the foregoing by any Subscriber, PSINet will
advise Retailer accordingly, and PSINet reserves the right, in its sole
discretion, to terminate such Subscribers Access immediately with written
notice to Retailer. In the event of violation of the foregoing by Retailer,
PSINet may deem such violation a material breach of this Agreement and may,
in its sole discretion, terminate this Agreement with written notice to
Retailer, but without the cure period specified in Section 5 below.
3. Retailer Obligations.
3.1 Retailer Responsibility for Its Subscribers. Retailer shall be
responsible for all customer support, pricing and service plans, billing and
collections with respect to its own Subscribers.
3.2 Retailer Connection to the Network. Retailer shall provide, at its own
expense, the telecommunications circuit for its connection to the Network
which shall run between the best suited PSINet POP (as determined by
<PAGE>
PSINet) and the Retailer's operations center (which includes the local
telephone company or Competitive Access Provider circuits). In addition,
Retailer shall provide an estimate of the traffic it anticipates between
Retailer's network and PSINet's Network.
3.3 Subscriber Equipment. PSINet shall not be responsible for the
installation, operation or maintenance of any computer equipment or computer
software programs provided by Retailer or any Subscriber.
3.4 Optional Peering. In addition to the connection of Retailer's network
and PSINet's Network as set forth in Section 3.2, Retailer may, but shall
not be obligated to, provide telecommunications circuits interconnecting
Retailer's network with the Network at a location or locations agreed upon
by the parties. The parties will use these circuits only for traffic
originating within one party's network (or the networks of its
Subscribers) and destined only to the other party's network (or the
networks of its Subscribers) in accordance with PSINet's "ISP Peering
Agreement" which shall be incorporated herein in the event of such
optional peering.
3.5 Use of Marks. Neither party is authorized through this Agreement to use
the other party's Marks in connection with their sales, advertisements and
promotion of its services to Subscribers, except in materials either
provided or approved by the authorized user of the mark prior to it's use.
Each party shall send to the other party a copy of any printed material
using the other party's Mark or other copyrighted material, and the
authorized party shall have the right to disapprove such use (although
approval shall not be unreasonably withheld). Upon termination of this
Agreement, each party shall cease to use any of such Marks or copyrighted
material and shall, within a reasonable time agreeable to the authorized
party, remove any reference to authorized party from its advertising and
promotional material.
3.6 Traffic Forecast. Retailer shall work closely with their distributors
and PSINet to make their best efforts in predicting product demand in their
geographic markets and implement a forecasting model based on trending and
previous sales for the purpose of allowing PSINet to adequately provide
facilities for the increased demand. The Purchaser shall provide this
forecasting information to PSINet beginning in the first full month
following the date of this agreement. Retailer shall use its best efforts
to provide reasonably accurate forecasts, but both parties acknowledge
and agree that such forecasts are not binding in any way.
4. Price and Pricing Terms.
Advanced Payment. Retailer agrees to pay to PSINet in advance of Retailer's
first Subscriber subscribing to the Network a one-time, non-refundable fee of
$15,000 US. This fee shall be applied to future, monthly Base Charge payments
after the third full month following the Effective Date of this Agreement.
4.2 Base Charge. Upon the Effective Date, and on the first day of each month
thereafter throughout the initial or any successive terms of this Agreement,
Retailer agrees to pay PSINet for each Subscriber who is then or was at any
time during the immediately preceding month authorized to use the Network a
Base Charge pursuant to the following schedule and subject to adjustments as
provided below:
<TABLE>
<CAPTION>
Total # of Subscribers Applicable Base Charge
---------------------- ----------------------
using the Network
----------------------
<S> <C>
Up to 75,000 $10.50
75,001 - 150,000 $10.50
150,001 or more Additional Adjustment
</TABLE>
<TABLE>
<CAPTION>
Additional ISDN Charges:
------------------------
<S> <C>
Initial-B-channel ISDN line (64Kbps)
for up to 100 hours per month $10.00
Additional Hours (above 100) $0.50 per hour*
Second B-channel ISDN line (128Kbps) additional $10.00 plus
$0.50 per hour (all usage)*
</TABLE>
* in one-minute increments rounded upwards
**ISDN pricing will be in addition to the applicable Base Charges
The applicable Base Charge above is to be applied to all Subscribers
irrespective of the rate that previously was applied to that group of
Subscribers. For example, if there are a sufficient number of Subscribers to
satisfy the second-tier pricing requirement, the applicable Base Charge shall
apply to all Subscriber Base Charges. Should the amount of Subscribers
subsequently fall below such tier, incurring a higher Base Charge, the
applicable Base Charge shall be adjusted to the higher Base Charge for all
Subscribers as indicated in this section.
The payment to be made for the initial month of Access for any Subscriber shall
include (i) an amount equal to the applicable Base Charge for such initial
month, prorated in the case of a partial month, and (ii) an amount equal to such
Base Charge as payment in advance for the next month of Access. If one of the
Subscribers cancels service within any month, there will either be no charge or
a pro-rated charge depending upon the time of that Subscriber's service
cancellation within that month.
4.3 Adjustments to Base Charge.
4.3.1 International Charges. Retailer and its Subscribers may also have
Access from any PSINet POP in Canada for an additional fee of $2.25 US per
hour added to the Base Charge (calculated in one minute increments
<PAGE>
rounded upward), and from any PSINet POP outside of the US and Canada for an
additional fee of $5.00 US per hour added to the Base Charge (calculated in
one minute increments rounded upward).
4.3.2 "Toll-Free" Charges. Retailer and its Subscribers may also access the
Network using a "toll free" PSINet POP (for example, using an 800 or 888
number) within the contiguous 48 states of the United States for an
additional fee of $6.00 US per hour added to the Base Charge (calculated in
one minute increments rounded upward).
4.3.3 Additional Adjustment. Once the number of Subscribers using the
Network exceeds 150,000, the parties will negotiate in good faith to agree
upon an appropriate adjustment to the applicable Base Charge.
4.4 Minimum Commitment.
4.4.1 Ramp Period. The initial seven (7) months from the Effective Date
hereinafter defines the "Ramp Period". The minimum number of Subscribers
on a monthly basis during the Ramp Period shall be projected as follows:
Month 1: ________ Month 2: _______ Month 3: _______ Month 4: _______
Month 5: ________ Month 6: _______ Month 7: _______
PSINet and Retailer agree that these numbers will serve as a gauge of the
success of the program during the Ramp Period.
4.4.2 Minimum Amounts. The minimum monthly revenue from Retailer for Access
provided by PSINet for Subscribers pursuant to this Agreement shall be
$12,000 US after the Ramp Period mentioned above. In the event PSINet's
gross revenues from Retailer in any month thereafter shall be less than the
required minimum, Retailer, at its discretion, shall either promptly (i)
remit to PSINet an amount equal to the difference between the aforesaid
minimum monthly revenue amount and such gross revenues; or (ii) give PSINet
the right of first refusal to purchase from Retailer all its Subscribers who
receive Access to the Network pursuant to the terms of this Agreement at the
lower of (i) the lowest rate offered by any bona fide third party purchaser
; or (ii) the rate of $4.00 US per Subscriber.
In the event that PSINet chooses not to purchase the Subscribers and
Retailer chooses not to remit to PSINet the amount stated above in
subparagraph (a), this Agreement shall be terminated; provided, however,
that PSINet shall continue to service, and Retailer shall continue to pay
for, the Subscribers at the highest Base Charge specified in Section 4.2
hereof for a period of ninety (90) days following such failure by Retailer
to provide the minimum monthly revenue payment in order to assure a smooth
transition for said Subscribers.
4.5 Taxes. Retailer shall be liable for and shall reimburse PSINet for all
taxes and related charges however designated resulting from the transactions
contemplated hereby (except those relating to PSINet's gross income),
including federal, state, provincial or local sales, use or value-added
taxes (VAT) and excise taxes, imposed in connection with or arising from the
provision of Access.
4.6 Invoices. PSINet shall invoice Retailer monthly in advance for all
charges under this Agreement. All invoices will be payable within thirty
(30) days of date of invoice. Invoices not paid by their due date shall be
subject to a 1.5% per month interest fee, or the maximum extent allowed by
applicable laws, whichever is less, on all past-due
<PAGE>
balances. In the event PSINet incurs additional fees as a result of any
collection activity, such as collection agencies or legal fees, Retailer
shall reimburse PSINet for all such fees. In the event Retailer shall fail
to pay PSINet any amount due under this Agreement, PSINet, in addition to
charging applicable delinquency fees, may discontinue providing Access to
Retailer and its Subscribers upon ten (10) days prior written notice by
overnight courier or certified mail to Retailer and chance to cure. PSINet
shall resume providing Access immediately upon receipt of such payment, and
in such event Retailer shall pay PSINet a reasonable reconnection fee.
4.7 Subscriber Charges. Retailer is solely responsible for establishing and
collecting its Subscriber charges for services it offers its Subscribers
through the Network and for preparing and mailing invoices to its
Subscribers. Retailer is responsible for payment of the total amounts
invoiced it by PSINet (except for any amounts disputed by Retailer in good
faith) regardless of whether Retailer is paid by its Subscribers.
5. Term/Extensions/Termination. The term of this Agreement shall be three (3)
years, commencing on the last day of the Ramp Period as defined above, and,
unless either party notifies the other in writing not less than one-hundred
eighty (180 days) prior to the end of the initial term or any extension thereof,
this Agreement shall be automatically renewed annually thereafter for a period
of one year.
Either party may terminate this Agreement if such other party has materially
breached this Agreement and has failed to cure such breach within thirty (30)
days after receiving written notice clearly specifying such breach; provided,
however, that this notice period shall not apply to a termination by PSINet in
accordance with the provisions of Section 2.7, 4.4.2 and/or 4.6.
6. Warranties Excluded. EXCEPT AS EXPRESSLY PROVIDED HEREIN, PSINET MAKES NO
WARRANTIES IN CONNECTION WITH ITS NETWORK OR THE PROVISION OF ACCESS AS
CONTEMPLATED HEREIN, WHETHER WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION THE WARRANTY OF MERCHANTABILITY, THE WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE OR USE AND NON-INFRINGEMENT OF THIRD PARTY
RIGHTS. RETAILER'S SOLE AND EXCLUSIVE REMEDY SHALL BE PSINET'S OBLIGATION TO
ADJUST THE FEES PAYABLE BY RETAILER AS SET FORTH ELSEWHERE HEREIN.
7. Limitation of Liability. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT
TO THE CONTRARY, THE PARTIES AGREE THAT PSINET SHALL IN NO EVENT BE LIABLE TO
RETAILER, ITS SUBSCRIBERS OR ANY OTHER PERSON FOR ANY ACTUAL, DIRECT, INDIRECT,
CONSEQUENTIAL, SPECIAL, INCIDENTAL, RELIANCE, PUNITIVE OR ANY OTHER DAMAGES OF
ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR THE
LOSS OF DATA, GOODWILL OR PROFITS) REGARDLESS OF THE FORESEEABILITY THEREOF,
ARISING OUT OF THE PROVISION OF ACCESS OR IN ANY WAY ARISING OUT OF THIS
AGREEMENT, WHETHER IN AN ACTION ARISING OUT OF BREACH OF CONTRACT, BREACH OF
WARRANTY, DELAY, NEGLIGENCE, STRICT TORT LIABILITY, PATENT MATTERS OR ANY OTHER
THEORY. NO ACTION OR PROCEEDING AGAINST PSINET MAY BE COMMENCED MORE THAN TWO
YEARS AFTER THE SERVICES ARE RENDERED. THIS CLAUSE SHALL SURVIVE FAILURE OF AN
EXCLUSIVE REMEDY. PSINET'S TOTAL LIABILITY FOR GROSS NEGLIGENCE DURING THE
LIFETIME OF THIS AGREEMENT SHALL IN NO EVENT EXCEED ONE HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($125,000) IN THE AGGREGATE.
8. Indemnification of PSINet. RETAILER SHALL INDEMNIFY AND HOLD HARMLESS PSINET
AND PSINET'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ADVISORS FROM AND
AGAINST ANY AND ALL CLAIMS OF OTHER PERSONS OR ENTITIES ARISING OUT OF MATERIAL,
DATA, INFORMATION OR OTHER CONTENT TRANSMITTED BY SUBSCRIBERS OR OTHER ACTS OR
OMISSIONS OF RETAILER AND/OR ITS SUBSCRIBERS.
9. Confidential Information. The provisions in the Bilateral Nondisclosure
Agreement executed between the parties shall apply to the terms of this
Agreement ands shall survive the execution and termination of this Agreement for
any reason.
10. Miscellaneous.
10.1 Independent Parties/No Agency. The relationship of PSINet and Retailer
shall be that of independent third parties. Except as otherwise expressly
provided in this Agreement, this Agreement does not constitute either party
as the agent or legal representative of the other party and does not create
a partnership or joint venture between the parties. Except as otherwise
expressly provided in this Agreement, neither party shall have any authority
to contract for or bind any other party in any manner whatsoever. This
Agreement confers no rights of any kind upon any third party.
<PAGE>
10.2 Force Majeure. PSINet shall not be liable for failure to fulfill its
obligations hereunder if such failure is due to causes beyond its reasonable
control, including, without limitation, actions or failures to act of
Retailer or any Subscriber, acts of God, fire, catastrophe, governmental
prohibitions or regulations, viruses which did not result from the acts or
omissions of PSINet, its employees or agents, national emergencies,
insurrections, riots or wars, or strikes, lockouts, work stoppages or other
labor difficulties. The time for any performance required hereunder shall be
extended by the delay incurred as a result of such act of force majeure, and
PSINet shall act with diligence to correct such force majeure.
10.3 Delays or Omissions. No delay or omission to exercise any right, power
or remedy accruing to a party under this Agreement shall impair any such
right, power or remedy of such party nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or
in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of either party of any breach
or default under this Agreement, or any waiver on the part of either party
of any provisions or conditions of this Agreement must be made in writing
and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to a party, shall be cumulative and not alternative.
10.4 Benefit and Assignment. No party hereto shall assign this Agreement, in
whole or in part, whether by operation of law or otherwise, without the
prior written consent of the other parties hereto (which consent shall not
be unreasonably delayed or withheld); and any purported assignment in
violation of the foregoing shall be void. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns as permitted hereunder. No person or
entity other than the parties hereto is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of the parties
hereto, and the covenants and agreements set forth in this Agreement shall
be solely for the benefit of, and shall be enforceable only by, the parties
hereto or their respective successors and assigns as permitted hereunder.
10.5 Additional Actions, Documents and Information. Each of the parties
hereto agrees that it will, at any time, prior to, at or after the date
hereof, take or cause to be taken such further actions, and execute, deliver
and file or cause to be executed, delivered and filed such further documents
and instruments and obtain such consents, as may be reasonably requested in
order to fully effectuate the purposes, terms and conditions of this
Agreement.
10.6 Notices.
(a) All notices and other communications required or permitted hereunder
shall be in writing and shall be mailed by certified or registered mail
(return receipt requested), express air courier, charges prepaid, or
facsimile addressed as follows:
To Retailer: as specified above.
To PSINet:
PSINet Inc. with copy to: PSINet Inc.
510 Huntmar Park Drive 510 Huntmar Park Drive
Herndon, Virginia 20170 Herndon, Virginia 20170
Facsimile: 703.397.5318 Facsimile: 703.904.4200
Attn: John Kraft, Vice President, Attn: General Counsel
Carrier & ISP Services
or to such other address as either party shall have furnished to the other
in writing.
(b) If a notice is given by either party by certified or registered mail, it
will be deemed received by the other party on the third business day
following the date on which it is deposited for mailing. If a notice is
given by either party by air express courier, it will be deemed received by
the other party on the next business day following the date on which it is
provided to the air express courier. If a notice is given by facsimile, it
will be deemed received by the other party after confirmation of receipt.
Notwithstanding the foregoing, any payments made under this Agreement shall
be deemed received only when actually received.
10.7 Compliance with Law. Retailer is responsible for complying with all
applicable rules, regulations, statutes, codes, ordinances and other
requirements, whether federal, state, provincial, local, international or
otherwise in connection with the matters contemplated by this Agreement.
10.8 Severability/Survival/Waivers. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, such provision shall be
construed so as to render it enforceable and effective to the maximum
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extent possible in order to effectuate the intention of this Agreement; and
if such provision shall be wholly invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby. The parties' rights and
obligations that, by their nature, would continue beyond the termination,
cancellation, or expiration of this Agreement, shall survive such
termination, cancellation or termination. The waiver or failure of either
party to exercise in any respect any right provided for in this Agreement
shall not be deemed a waiver of any further right under this Agreement.
10.9 Titles and Subtitles. The titles of the Sections of this Agreement are
for convenience of reference only and are not to be considered in construing
this Agreement.
10.10 Governing Law and Venue. Customer agrees to the non-exclusive
jurisdiction of the federal and state courts of the Commonwealth of Virginia
for any action or proceeding arising out of or in relation to this
Agreement. This Agreement shall be governed by the substantive law of the
Commonwealth of Virginia.
10.11 Entire Agreement/Amendments. This Agreement represents the complete
agreement and understanding of the parties with respect to the subject
matter herein, and supersedes any other agreement or understanding, written
or oral. In the event of any conflict arising between Customer's purchase
order terms and this Agreement, this Agreement shall take precedence. This
Agreement may be modified only in writing signed by both parties.
Both PARTIES REPRESENT AND WARRANT THAT THEY HAVE FULL CORPORATE POWER AND
AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT AND TO PERFORM THEIR OBLIGATIONS
HEREUNDER, AND THAT THE PERSON WHOSE SIGNATURE APPEARS BELOW IS DULY AUTHORIZED
TO ENTER INTO THIS AGREEMENT ON BEHALF OF THE PARTY.
IN WITNESS WHEREOF, THE PARTIES HAVE ENTERED INTO THIS AGREEMENT AS OF THE DATE
SET FORTH:
- --------------------------------------------------------------------------------
Authorized Retailer Representative/Title (please type or print)
- --------------------------------------------------------------------------------
Retailer Signature Date
- --------------------------------------------------------------------------------
Authorized PSINet Representative (please type or print)
- --------------------------------------------------------------------------------
PSINet Representative Signature Date
<PAGE>
Exhibit 10.16
Note: Certain material, indicated by three asterisks (***), has been omitted
from this document pursuant to a request for confidential treatment
filed with the Securities and Exchange Commission. The omitted
material has been filed separately with the Securities and Exchange
Commission.
SOFTWARE LICENSE AND CONSULTING SERVICES AGREEMENT
This Software License and Consulting Services Agreement ("Agreement") is
between Novazen Inc. ("Novazen") and Rocky Mountain Internet ("Rocky Mountain
Internet"). The Terms of this Agreement shall apply to the Program License
granted to Rocky Mountain Internet and to all consulting services provided by
Novazen under this Agreement.
A. DEFINITIONS
A.1 "Program" means the software in object code form, capable of performing
the functions identified in Schedule A as defined at Major Milestone P,
and the media, and Documentation.
A.2 "Documentation" means the user guides and manuals for installation and
use of the Program. Documentation will be provided electronically, in
HTML or similar printable format.
A.3 "Maintenance Release" means a subsequent release of the Program, which
Novazen generally makes available for Program licensees at no
additional license fee other than media and handling charges. A
Maintenance Release shall not include any release, option or future
product that Novazen licenses separately.
A.4 "Designated System" means the Rocky Mountain Internet computer
hardware, software, Rocky Mountain Internet operating system, and Rocky
Mountain Internet customer platforms or functional equivalents
designated in Schedule E.
A.5 "Commencement Date" of the Program License means the earlier of the two
following dates:
(a) the date on which the final functional component is accepted
by Rocky Mountain Internet as set forth in Schedule B-1 (Major
Milestone P)
(b) 30 days after the final component is delivered to Rocky
Mountain Internet as set forth in Schedule B-1 (Major
Milestone M).
A.6 "Intellectual Property" refers to all Intellectual Property now or
later owned by Novazen, including patents, trade secrets, copyrights
and trademarks.
A.7 "Bug" means a Program software, media, or documentation error. Bugs can
be either "material" or "non-material." Material Bugs cause software
functions to not be performed as designed. Non-material Bugs are
cosmetic in nature and do not prevent software functions from
performing as desired.
A.8 "Invoiced Account" means an individual, business, association, company,
or organization that would receive a bill, regardless of media, from
the Program. This includes sub-accounts that may be established under a
single major account. For example, The Acme Company may choose to be
the major account while its East Coast, West Coast, and mid-west
offices are established as sub-accounts and invoiced seperately. For
the purposes of this definition, this arrangement equals three (3)
Invoiced Accounts.
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A.9 "Functional Upgrade" means a new release of the Program, as specified
in Schedule A, within 12 months from the commencement date.
B. THE SOFTWARE PROGRAM LICENSE
B.1 Rights Granted
(a) Novazen grants to Rocky Mountain Internet a non-exclusive,
perpetual license to use the Program specified under this
Agreement, as follows:
i. to use the Program solely for Rocky Mountain
Internet's operations on the Designated System
consistent with the use as defined in Schedule A
(limitations specified or referenced in this
Agreement, or the Documentation). Rocky Mountain
Internet has the right to use the license for the
fees paid for a maximum of *** Invoiced Accounts.
Additional Invoiced Accounts can only be added for an
additional license fee. Rocky Mountain Internet would
receive most favored customer pricing in establishing
this additional fee. Most favored customer pricing is
defined as the best price for a Novazen Program sold
within the prior six months, exclusive of this
Agreement. If no Novazen Programs have been sold
within that period, the fee will be established
according to the then outstanding Novazen price list.
The purpose of the Invoiced Account cap is to ensure
Novazen's economic rights should Rocky Mountain
Internet be acquired by a major company.
ii. Rocky Mountain Internet may not relicense, rent or
lease the Program or use the Program for third-party
training, commercial time-sharing or service bureau
use.
iii. Rocky Mountain Internet may only transfer the license
to an affiliate or wholly-owned or controlled
subsidiary or parent company by giving written notice
of such transfer to Novazen. The *** Invoiced Account
limit will also apply in the case of a transfer.
a. In the event the new organization (i.e., the
transferee) is an affiliate or wholly-owned or
controlled subsidiary, the new organization has
the right to use the license for the fees paid
for a maximum of 1,000,000 Invoiced Accounts.
Additional Invoice Accounts can only be added
for an additional license fee. The fee will be
established according to most favored customer
pricing. Most favored customer pricing is
defined as the best price for a Novazen Program
sold within the prior six months, exclusive of
this Agreement. If no Novazen Programs have
been sold within that period, the fee will be
established according to the then outstanding
Novazen price list.
b. In the event the new organization (i.e., the
transferee) is a parent company, the new
organization has the right to use the license
for the fees paid for a maximum of *** Invoiced
Accounts. Additional Invoiced Accounts can only
be added for an additional license fee.
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The fee will be established according to the
then outstanding Novazen price list.
iv. to use the Documentation provided with the Program in
support of Rocky Mountain Internet authorized use of
the Program;
v. to copy the Program only for archival or backup
purposes. All titles, trademarks, and copyright and
restricted rights notices shall be reproduced in such
copies;
vi. Rocky Mountain Internet shall not copy or use the
Program (including the documentation) except as
specified in this Agreement.
(b) Rocky Mountain Internet may not cause or permit the reverse
engineering, disassembly or decompilation of the Program.
(c) Novazen shall retain all title, copyright and other property
rights in the Program and its Intellectual Property. Except as
specified herein, Rocky Mountain Internet does not acquire any
rights, express or implied, in the Program or in the software
created pursuant to the Consulting Services Section of this
Agreement, or in the Intellectual Property.
(d) Novazen shall place a copy of the application source code with
the law firm of Lee, Fishman, and Issac in Boulder, Colorado
as escrow agent. The escrow agent shall hold the code for five
years. If, at any time in the five year period, Novazen
declares bankruptcy, or is involuntarily bankrupt, upon notice
from Rocky Mountain Internet, the escrow agent will transfer
the source code to Rocky Mountain Internet. Possession of the
source code does not give Rocky Mountain Internet any rights
superior to those included in this license.
(e) Rocky Mountain Internet may make non-compiled HTML changes to
the Program only as these changes relate to the "look and
feel" of the Program (i.e., cosmetic changes). Novazen neither
warrants nor indemnifies Rocky Mountain Internet against
infringement for any non-compiled HTML changes that Rocky
Mountain Internet makes.
(f) The fee for the purchase of the Program source code is set at
*** should Rocky Mountain Internet choose to purchase the
source code in the future. Rocky Mountain Internet is awarded
the right to purchase the Program source code at any time in
the future subject to the terms of this Agreement.
B.2 Verification.
At Novazen's written request, not more frequently than semi-annually,
Rocky Mountain Internet shall furnish Novazen with a signed certification
verifying that the Program is being used pursuant to the provisions of
this Agreement.
Novazen may audit Rocky Mountain Internet's use of the Program, not more
frequently than semi-annually. Any such audit shall be conducted, with
reasonable advance notice, during regular business hours at Rocky
Mountain Internet's facilities and shall not unreasonably interfere with
Rocky Mountain Internet's business activities.
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This audit will include examination of the online and hardcopy
statistical reports generated by the Program. Novazen agrees that any
additional audit information needed will be presented to Rocky Mountain
Internet in writing for their approval. Novazen shall be responsible for
all costs, both labor and expenses, incurred by Novazen employees in
conducting this audit.
INDEMNITY, WARRANTIES, REMEDIES
B.3 Infringement Indemnity.
Novazen will defend and indemnify Rocky Mountain Internet against a claim
that the Program, or any subsequent modification or Bug-fix performed by
Novazen, infringes a copyright or patent or other intellectual property
right, provided that: (a) Rocky Mountain Internet notifies Novazen in
writing within 30 days of the claim; (b) Novazen has sole control of the
defense and all related settlement negotiations; and (c) Rocky Mountain
Internet provides Novazen with the assistance, information and authority
necessary to perform Novazen obligations under this Section.
If the Program, or any subsequent modification or Bug-fix performed by
Novazen, is held or is believed by Novazen to infringe, Novazen shall
have the option, at its expense, to (a) modify the Program to be
noninfringing; or (b) obtain for Rocky Mountain Internet a license to
continue using the Program, or if options (a) and (b) are not reasonably
available, then (c) Novazen may terminate the license for the infringing
Program and refund the license fees paid for the Program pursuant to
Schedule C. This Section B.3 states Novazen's entire liability and Rocky
Mountain Internet's exclusive remedy for infringement.
B.4 Warranties and Disclaimers
(a) Program Warranty: Novazen warrants for a period of 1 year from
the Commencement Date that the Program will perform the
functions described in Schedule A, subject to B.4(c).
(b) Media Warranty: Novazen warrants that the delivered tapes,
diskettes or other media will be free of defects in materials
and workmanship under normal use for 90 days from the
Commencement Date.
(c) Disclaimers
i. THE WARRANTIES ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL
OTHER WARRANTIES, WHETHER EXPRESSED OR IMPLIED,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
ii. The Program, as warranted under this Agreement, is
both Year 2000 and leap year compliant.
iii. Novazen does not warrant that the Program will
operate other than as specified in the Schedules
hereto or that the operation of the Program will be
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<PAGE>
uninterrupted or error-free or that the Program will
run, in combination with other programs or inputs
free from problems caused by the year 2000 event.
iv. Rocky Mountain Internet acknowledges that Novazen is
installing the software for the first time in the
Rocky Mountain Internet operations center or in the
Rocky Mountain Internet contracted service bureau
operations center and that Bugs (as defined in A.7)
are common in complex, commercial software.
B.5 Exclusive remedies for any breach of the warranties contained in
Section B.4, above, Rocky Mountain Internet's exclusive remedy, and
Novazen's entire liability, shall be:
(a) For the Software Program
The correction of Program errors that cause breach of the
Program warranty in B.4(a), or if Novazen is unable to make
the Program operate as warranted in B.4(a), Rocky Mountain
Internet shall be entitled to terminate the Program license
and recover the fees paid to Novazen for the Program license,
which are more fully described in Schedule C. Rocky Mountain
Internet acknowledges that all software has Bugs and Novazen
is not required to correct non-material Bugs in the Program.
The determination of whether a Bug exists, whether that Bug is
material or non-material, and the severity of the Bug will be
determined by the Change Management process as set forth in
memorandum NO-0009_v1_MEM.
If Rocky Mountain Internet is entitled to terminate and does
terminate the Program license within 30 days after the
Commencement Date, Rocky Mountain Internet is entitled to a
refund of all software license fees as well as consulting fees
associated with the customization of software for Rocky
Mountain Internet, subject to the terms of Schedule C.
(b) For Media
The replacement of defective media returned within 90 days of
the Commencement Date.
B.6 Limitation of Liability for Any Breach of the License Section of this
Agreement
In no event shall Novazen be liable for any indirect, incidental,
special or consequential damages, or Rocky Mountain Internet's expenses
incurred in installing or operating the Program, damages for Rocky
Mountain Internet's loss of business profits, lost revenue, lost
customers, lost data or lost uses, incurred by Rocky Mountain Internet
or any third party, whether in an action in contract or tort, even if
Novazen has been advised of the possibility of such damages.
Novazen's liability for damages hereunder shall in no event exceed the
amount of fees paid by Rocky Mountain Internet under this Agreement,
with refunds only as set forth in B.5(a) above.
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B.7 The provisions of this Agreement totally allocate the risks between
Novazen and Rocky Mountain Internet. Novazen pricing reflects this
allocation of risk and the limitation of liability specified herein.
C. CONSULTING SERVICES.
C.1 Novazen will provide to Rocky Mountain Internet the Consulting Services
specified in Schedules B and B-1.
C.2 The consulting services shall be performed over the period of time
specified in Schedule B and B-1. Novazen will provide formal, written
notification when each milestone is complete. Each milestone will be
deemed to be complete when Rocky Mountain Internet provides a signed
Agreement that it has been properly satisfied.
C.3 Intellectual Property Created by Consulting Services. Novazen does not
grant Rocky Mountain Internet any ownership, security or other interest
in any of the Intellectual Property created by Novazen's consulting
engineers, nor does Novazen grant Rocky Mountain Internet any right to
grant a sublicense of any kind to any other party. Rocky Mountain
Internet will have full intellectual property rights to any ideas,
concepts, or software created principally by Rocky Mountain Internet
personnel in connection with their work on non-Program software and
independent of the Consulting Services identified in this Agreement
C.4 Novazen will own all patents, trade secrets, copyrights and trademarks
and other Intellectual Property created by Novazen's consulting
engineers alone or jointly with Rocky Mountain Internet personnel in
connection with Novazen's work in performing its consulting services
with respect to the Program. Rocky Mountain Internet will own all
patents, trade secrets, copyrights, and trademarks and other
intellectual property created principally by Rocky Mountain Internet
personnel in connection with their work on non-Program software and
independent of the Consulting Services identified in this Agreement.
C.5 Rocky Mountain Internet assigns to Novazen all right, title, and
interest in and to all patents, trade secrets, copyrights and
trademarks and other intellectual property created by Rocky Mountain
Internet in connection with Novazen in its work performing its
consulting services with respect to the Program. Rocky Mountain
Internet will have full intellectual property rights to any ideas,
concepts, or software that they introduce, independent of the
Consulting Services identified in this Agreement, for the purpose of
implementing the non-Program software at Rocky Mountain Internet.
C.6 At the other party's request, each party will execute all assignments
and other documents necessary to perfect each party's rights in its
intellectual property, and will otherwise assist Novazen as needed in
perfecting the other party's right in this intellectual property.
C.7 Target Dates. Novazen has set forth a description of Consulting
Services and a "Milestone Chart" in Schedules B and B-1. The "target
dates" in the Milestone Chart are targets only. Should Novazen fail to
complete the services or goals set forth in the
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Milestone Chart by the target date, that failure shall not constitute a
breach of this Agreement.
C.8 Rocky Mountain Internet reserves the right to terminate this Agreement
prior to the conclusion of the Requirements Definition approval phase
(Major Milestone E) should Rocky Mountain Internet conclude that the
requirements as defined by Novazen do not meet their business needs. In
case of such termination, Rocky Mountain Internet is entitled to a
refund of all software license fees as well as consulting fees
associated with the customization of the Program for Rocky Mountain
Internet, subject to the terms in Schedule C. Furthermore, Rocky
Mountain Internet shall own all requirements documentation received to
date.
Novazen and Rocky Mountain Internet agree to make all reasonable
efforts to ensure that all Requirements Definition documents leading to
the fulfillment of Major Milestone E are delivered according to
Schedule B-1.
C.9 Final Delivery Date. Novazen agrees to deliver all functional
components to Rocky Mountain Internet, as per Schedules A, B, and B-1,
no later than April 30, 1999. In the event that Novazen fails to
deliver the final functional component by April 30, 1999,and Novazen is
principally responsible for such delays, Rocky Mountain Internet shall
have the right to terminate this Agreement and therefore is entitled to
a refund of all software license fees as well as consulting fees
associated with the customization of the Program for Rocky Mountain
Internet, subject to the terms in Schedule C. This final delivery date
may be adjusted as specified in section C.10.
C.10 Cooperation. If events that Novazen is not responsible for causes
Novazen delays that cause Novazen to miss a milestone, the dates in the
Milestone Chart (Schedule B-1) shall be adjusted to reflect those
delays. In the event that Novazen is not responsible for delays to the
project that cause Novazen to miss a milestone, Novazen must provide
written notice immediately (within 3 business days) after missing the
milestone. The parties shall meet and discuss the alleged deficiencies
within 2 days of the receipt of notice. If the parties are thereafter
unable to agree whether Rocky Mountain Internet has missed a milestone,
Rocky Mountain Internet has the option of seeking arbitration on any
disputed delay and to continue work under this Agreement until a
decision is reached by the Arbitrator. As described in C.2, Novazen
shall notify Rocky Mountain Internet in writing when each milestone is
completed. All Rocky Mountain Internet challenges or complaints that
Novazen has not met milestone targets must be provided to Novazen in
writing and reviewed and discussed by both parties: for Novazen,
Director of Consulting Services; for Rocky Mountain Internet, Vice
President of Operations. Rocky Mountain Internet must provide such
written notice immediately (within 3 business days) after learning of
the event (an event is defined as the missing of a milestone as
specified on Schedule B-1). The parties shall meet and discuss the
alleged deficiencies within 2 business days of the receipt of notice.
If the parties are thereafter unable to agree whether Novazen has
missed a milestone, or whether Rocky Mountain Internet is entitled to
terminate this agreement, Novazen shall have the option to seek
arbitration and to continue work under this Agreement until a decision
is reached by the Arbitrator.
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C.11 After Rocky Mountain Internet accepts delivery and acknowledges
completion of the tasks in the Milestone Chart by signing off on each
notice that the milestone in Schedule B-1 has been met, Rocky Mountain
Internet's sole remedy for Novazen's failure to meet any of the
requirements of Schedule B-1 for a period of 1 year will be correction
by Novazen of defects in the work performed under this Consulting
Services section of the Agreement. Such defects in the Consulting
Services work must be identified in writing by Rocky Mountain Internet.
During that first year, Novazen will correct material defects (which
are not cosmetic changes) as part of the original price. Rocky Mountain
Internet again acknowledges that all software has Bugs and Novazen is
not required to correct non-material Bugs in the software created
pursuant to the consulting services. After 1 year, Rocky Mountain
Internet must pay the agreed upon maintenance fees for any requested
changes or remediation to correct defects created in the performance of
consulting services.
C.12 NO CONSEQUENTIAL DAMAGES: In no event will Novazen be liable for
damages of any kind arising out of its work under this Consulting
Services section of the Agreement in whole or in part, including (a)
indirect, incidental, special or consequential damages, or (b) Rocky
Mountain Internet's expenses incurred in installing or operating the
software created pursuant to the consulting services, (c) damages for
loss of business profits, lost revenues, costs of employees engaged in
the project or (d) costs otherwise incurred, business interruption,
loss of business information, Rocky Mountain Internet's loss of
customers, or (e) other pecuniary loss incurred by Rocky Mountain
Internet or any third party whether the claim is brought in an action
for contract or tort, even if Novazen has been advised of the
possibility of those damages.
C.13 The provisions of this Agreement totally allocate the risks between
Novazen and Rocky Mountain Internet. Novazen pricing reflects this
allocation of risk and the limitation of liability specified herein.
C.14 Warranties. Novazen disclaims all warranties expressed or implied with
respect to its work under this Consulting Services section of this
Agreement in whole or in part; this disclaimer includes but is not
limited to implied warranties of title, non-infringement,
merchantability, and fitness for any purpose, whether arising by law,
by reason of custom or usage in the trade, or by course of dealing.
C.15 Novazen indemnifies and holds Rocky Mountain Internet harmless from and
against all liability, costs, and expenses for bodily injury, including
death, and property damage resulting from the wrongful or negligent
acts of Novazen employees while present on the RMI site. All Novazen
employees shall follow the rules and regulations established by RMI
while present at RMI facilities.
C.16 Termination. This Consulting Services section of the Agreement will
terminate immediately if Rocky Mountain Internet becomes insolvent,
admits to a general inability to pay its debts, files a petition in
bankruptcy, or is the subject of an involuntary petition in bankruptcy
that is not dismissed within 30 days after its effective filing date.
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D. PAYMENT PROVISIONS FOR THE SOFTWARE LICENSE AND CONSULTING SERVICES.
D.1 Payment. For the Program license and for the Consulting Services
provided under this Software License and Consulting Services Agreement,
Rocky Mountain Internet will pay Novazen in accordance with the terms
and conditions contained in Schedule C hereof. Any amounts payable by
Rocky Mountain Internet hereunder which remain unpaid *** days after
the invoice date shall be subject to a late charge equal to *** per
month from the invoice date until such amount is paid.
D.2 Payment for Consulting Services, as set forth in Schedule C, does not
include any expenses incurred by Novazen consulting engineers during
the performance of consulting services, including, but not limited to,
travel, lodging, and meals. These expenses will be billed separately.
D.3 Taxes. The fees listed in this Agreement do not include taxes; if
Novazen is required to pay sales, use, property, value-added or other
taxes based on the licenses or services granted in this Agreement or on
Rocky Mountain Internet's use of Program or services, then such taxes
shall be billed to Rocky Mountain Internet and paid by Novazen. Rocky
Mountain Internet shall pay any taxes due in cash. This Section shall
not apply to taxes based on Novazen income. As per this Agreement,
Rocky Mountain Internet reserves the right to dispute any levied taxes
provided that Novazen's tax status or credit rating is not affected
Rocky Mountain Internet will pay Novazen for all taxes levied while it
dispute such taxes. All expenses incurred in such a dispute are the
sole responsibility of Rocky Mountain Internet.
E. GENERAL TERMS.
E.1 Nondisclosure. By virtue of their activities under this Agreement, each
party may have access to confidential information of the other
("Confidential Information"). Confidential Information shall be limited
to the Program including the Documentation, the results of any
benchmark tests of the Program, the terms and pricing under this
Agreement, and all information clearly identified as confidential.
A party's Confidential Information shall not include information that:
(a) is or becomes a part of the public domain through no act or
omission of the other party; (b) was in the other party's lawful
possession prior to the disclosure and had not been obtained by the
other party either directly or indirectly from the disclosing party;
(c) is lawfully disclosed to the other party by a third party without
restriction on disclosure or (d) is independently developed by the
other party.
The parties agree to hold each other's Confidential Information in
confidence during the term of this Agreement and for a period of two
years after termination of this Agreement. The parties agree, unless
required by law, not to make each other's Confidential Information
available in any form to any third party for any purpose other than the
implementation of this Agreement. Each party agrees to take all
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reasonable steps to ensure that Confidential Information is not
disclosed or distributed by its employees or agents in violation of the
terms of this Agreement.
E.2 Severability. If any provision of this Agreement is held to be invalid
or unenforceable, the remaining provisions of this Agreement will
remain in full force.
E.3 Waiver. The waiver by either party of any default or breach of this
Agreement shall not constitute a waiver of any other or subsequent
default or breach. Except for actions for nonpayment or infringement of
Novazen's Intellectual Property, no action, regardless of form, arising
out of this Agreement may be brought by either party more than one year
after the cause of action has occurred.
E.4 Export Administration. Rocky Mountain Internet agrees to comply fully
with all relevant export taxes and regulations of the United States
("Export Laws").
E.5 Entire Agreement. This Agreement constitutes the complete Agreement
between the parties and supersedes all prior contemporaneous Agreements
or representations, written or oral, concerning the subject matter of
this Agreement. This Agreement may not be modified or amended except in
a writing signed by a duly authorized representative of each party; no
other act, document, usage or custom shall be deemed to amend or modify
this Agreement. All material changes to Schedules A, B, B-1, and C of
this Agreement shall be made in accordance with the Change Management
process memo NO_0009_v1_MEM.
It is expressly agreed that the terms of this Agreement shall supersede
the terms in any documents previously presented to Rocky Mountain
Internet or in written or oral presentations made by Novazen to Rocky
Mountain Internet.
Rocky Mountain Internet acknowledges and agrees it has not, in
executing this Agreement, relied upon any Novazen oral or documentary
representations other than those contained in this Agreement. E.6
Notice. Written notice under this Agreement shall be sent to a party by
overnight courier (signature for receipt required) or certified mail at
the applicable address specified below.
Novazen's designated address and telephone numbers are as follows:
Until September 30, 1998
Novazen, Inc.
1800 38th Street, Suite 200
Boulder, Colorado 80301
Tel: (303) 583-3100
Fax: (303) 939-8742
ATTN: Vincent T. Jordan
After September 30, 1998
10
<PAGE>
Novazen, Inc.
6328 Monarch Park Place
Niwot, Colorado 80501
E.7 Rocky Mountain Internet's designated address and telephone numbers are
as follows:
Until notification by Rocky Mountain Internet of name change
Rocky Mountain Internet
ATTN: VP of Operations
1099 18th Street
30th Floor
Denver, Colorado 80202
After notification by Rocky Mountain Internet of name change
Internet Communications Company
ATTN: VP of Operations
1099 18th Street
30th Floor
Denver, Colorado 80202
E.8 Any written notice will be deemed effective on the date actually
received.
E.9 The Consulting Services section of the Agreement does not create any
relationship of employment, partnership, or joint venture between the
parties.
E.10 Neither party will make any use of any of the other's trademarks,
service marks, trade names, or trade dress without written consent.
E.11 The failure of a party to require performance by the other party of any
provision of this Agreement will not diminish the right of that party
later to require performance of that provision.
E.12 Arbitration.
(a) Any and all disputes arising out of or in connection with this
Agreement shall be referred to and finally resolved by
arbitration under the Rules of the American Arbitration
Association. There shall be one arbitrator. The law governing
this Agreement is the law of Colorado, excluding its conflict
of laws. The venue of the arbitration shall be Denver,
Colorado. The arbitrator shall not have the authority or power
to impose punitive damages.
(b) In the event that both parties enter into separate contracts
with CyberCash Inc, if any claims arise under or in connection
with this Agreement and either party to this Agreement raises
a claim or defense involving CyberCash, then each party hereto
consents to arbitrate any such related claim or defense with
CyberCash.
11
<PAGE>
It is the intention of both parties to hereby consent to third
party arbitration with CyberCash. Both parties also consent
to:
i. allowing the sole arbitrator appointed in the venue
where the original demand is filed by any one of the
three parties (Novazen, Rocky Mountain Internet and
CyberCash) to determine whether a claims is related,
and
ii. to determine any and all issues relating to venue.
The arbitrator shall not have the authority or power
to impose punitive damages.
12
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate copies by their authorized representatives on the dates
specified below:
Novazen, Inc. Rocky Mountain Internet
By: By:
--------------------------- ------------------------------
Title: Title:
------------------------ ---------------------------
Date: Date:
------------------------- ----------------------------
13
<PAGE>
SCHEDULE A - PROGRAM FUNCTIONALITY
The Novazen, Inc. software delivery will contain the following functionality and
will be delivered by April 30, 1999, according to the Milestone Chart in
Schedule B-1:
- Centralized Customer Data
- Provide the ability for company data, customer data, agent data,
bill data, order data, trouble ticket data, product data, and
commissioning data to be entered in one place, stored in one
place, and accessed from each user's desktop
- Provide the framework within which Rocky Mountain Internet may
define security levels with respect to accessing the data within
the central customer data store
- Billing System Integration
- Interface with the MacroLogic billing system (or other equivalent
billing platform)
- Integrate the MacroLink functionality, including taxing
- Electronic Bill Presentment and Payment
- Provide the ability for Customers to receive and view their
invoices on-line
- Provide the ability for Customers to pay their
invoices on-line with credit cards
- Provide the ability to interface with the Rocky Mountain
Internet designated invoice printer.
- Provide the ability to deliver invoices via the following media:
- Browser (Microsoft Internet Explorer 3.x or higher; Netscape 3.x
or higher)
- Email
- Paper.
- Provide the framework to support delivery of invoices via other
electronic media CD-ROM Diskette and magnetic tape.
- Bill Consolidation
- Consolidate "bill ready" charges ("bill ready" means the
charges--both usage and non-usage--have been rated and taxed) as
standard format input data from the following sources external to
the Program:
14
<PAGE>
- US West data
- Local access charges
- OC&Cs
- Local usage detail
- Frontier data
- Long Distance detail
- IP Telephony
- IP CDRs
- Dial-Up CDRs
- Web Hosting/Web Production (via Order Entry)
- Dedicated Services (via Order Entry)
- T1
- ISDN
- 56K
- Other Usage Based Services.
- One-time Charges including, but not limited to, equipment
sales, consulting services, and set-up fees (via Order
Entry)
- Consolidate "bill ready" payments as standard format input data
from the A/R system. Types of payments include credit cards and
manually entered payments.
- Internet-based Customer Self Care
- Provide the ability for customers to maintain their own account
information, preferences, and user settings.
- Order Entry
- Provide the ability for customers to configure their products and
services mix via Internet browser
- Provide the ability for CSRs to maintain products and services
mix for each customer
- Provisioning
- Create an output file of Frontier customers to be provisioned,
formatted per Frontier specifications
- Create an output file of US West customers to be provisioned,
formatted per US West specification
- Provide an interface to Rocky Mountain Internet's Radius servers
in order to provision IP customers
- Load into the Program a standard formatted file from Frontier of
provisioned customers
- Load into the Program a standard formatted file from US West
of provisioned customers.
15
<PAGE>
- Trouble Ticketing
- Provide an integrated trouble ticket platform
- Provide automated Trouble Ticket notification, escalation, and
interest registry
- Create an output file of Trouble Tickets to
be forwarded to US West or Frontier.
- Product Management
- Maintain Product catalog and simple rate assignments
- Make product catalog available on-line.
- ACD Integration
- The Program should be integrated with the Rocky Mountain Internet
ACD system to ensure that Internet-based calls are processed
successfully.
- Accounts Receivable Integration
- The Program should be integrated with Rocky Mountain Internet's
chosen accounts receivable platform in order to communicate
payment, billing (including credit and debit charges), and aging
data.
- Commissions
- Provide a user interface for the definition of commission rates
on a per product or service basis
- Store the commission rates in a central data store
- Provide commission rate data to billing system (MacroLogic) for
the calculation of commissions
The functionality listed above will be delivered sequentially as set forth in
the Milestone Chart in Schedule B-1.
CHANGE MANAGEMENT
The Change Management process is detailed in memorandum NO_0009_v1_MEM as an
attachment to this agreement.
16
<PAGE>
SCHEDULE B - CONSULTING SERVICES
Novazen will perform the consulting services for Rocky Mountain Internet. The
services will result in the definition of Rocky Mountain Internet's current and
future business requirements, as they relate to the implementation of the
Program. The Novazen consultants shall be responsible for implementing the
project according to the schedule set forth in the Milestone Chart, Schedule
B-1.
- Target Dates: Novazen agrees to use commercially reasonable efforts to
staff the consulting team and to attempt to reach target dates on the
Milestone Chart. Failure to reach a target date on the Milestone
Chart, Schedule B-1, will not constitute a breach of the agreement.
17
<PAGE>
SCHEDULE B-1 - MILESTONE CHART
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MAJOR MILESTONE A (BEGIN
PHASE 1) *** *** Novazen/Rocky Mountain Internet
Milestone A.1 *** *** MacroLogic
Milestone A.2 *** *** Rocky Mountain Internet
Milestone A.3 *** *** Rocky Mountain Internet
Milestone A.4 *** *** Novazen/Rocky Mountain Internet
Milestone A.5 *** *** MacroLogic
MAJOR MILESTONE B (END OF
PHASE 1) *** *** Novazen/MacroLogic
MAJOR MILESTONE C (BEGIN
PHASE 2) *** *** Novazen/Rocky Mountain Internet
Milestone C.1 *** *** Novazen/Rocky Mountain Internet
Milestone C.2 *** *** Novazen/Rocky Mountain Internet
Milestone C.3 *** *** Novazen/Rocky Mountain Internet
Milestone C.4 *** *** Novazen/MacroLogic
Milestone C.5 *** *** Novazen/Rocky Mountain Internet
Milestone C.6 *** *** Novazen/Rocky Mountain Internet
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone C.7 *** *** Novazen/Rocky Mountain Internet
Milestone C.8 *** *** Novazen/Rocky Mountain Internet
Milestone C.9 *** *** Novazen/Rocky Mountain Internet
Milestone C.10 *** *** Novazen/Rocky Mountain Internet
Milestone C.11 *** *** Novazen/Rocky Mountain Internet
Milestone C.12 *** *** Novazen/Rocky Mountain Internet
MAJOR MILESTONE D *** *** Novazen
Milestone D.1 *** *** Novazen
Milestone D.2 *** *** Novazen
Milestone D.3 *** *** Novazen
Milestone D.4 *** *** Novazen
Milestone D.5 *** *** Novazen
Milestone D.6 *** *** Novazen
Milestone D.7 *** *** Novazen
Milestone D.8 *** *** Novazen
Milestone D.9 *** *** Novazen
Milestone D.10 *** *** Novazen
Milestone D.11 *** *** Novazen
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone D.12 *** *** Novazen
MAJOR MILESTONE E *** *** Rocky Mountain Internet
Milestone E.1 *** *** Rocky Mountain Internet
Milestone E.2 *** *** Rocky Mountain Internet
Milestone E.3 *** *** Rocky Mountain Internet
Milestone E.4 *** *** Rocky Mountain Internet
Milestone E.5 *** *** Rocky Mountain Internet
Milestone E.6 *** *** Rocky Mountain Internet
Milestone E.7 *** *** Rocky Mountain Internet
Milestone E.8 *** *** Rocky Mountain Internet
Milestone E.9 *** *** Rocky Mountain Internet
Milestone E.10 *** *** Rocky Mountain Internet
Milestone E.11 *** *** Rocky Mountain Internet
Milestone E.12 *** *** Rocky Mountain Internet
MAJOR MILESTONE F *** *** Rocky Mountain Internet/Novazen
Milestone F.1 *** *** Rocky Mountain Internet/Novazen
Milestone F.2 *** *** Rocky Mountain Internet/Novazen
Milestone F.3 *** *** Rocky Mountain Internet/Novazen
Milestone F.4 *** *** Rocky Mountain Internet/Novazen
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone F.5 *** *** Rocky Mountain Internet/Novazen
Milestone F.6 *** *** Rocky Mountain Internet/Novazen
Milestone F.7 *** *** Rocky Mountain Internet/Novazen
Milestone F.8 *** *** Rocky Mountain Internet/Novazen
Milestone F.9 *** *** Rocky Mountain Internet/Novazen
Milestone F.10 *** *** Rocky Mountain Internet/Novazen
Milestone F.11 *** *** Rocky Mountain Internet/Novazen
Milestone F.12 *** *** Rocky Mountain Internet/Novazen
MAJOR MILESTONE G *** *** Novazen
Milestone G.1 *** *** Novazen
Milestone G.2 *** *** Novazen
Milestone G.3 *** *** Novazen
Milestone G.4 *** *** Novazen
Milestone G.5 *** *** Novazen
Milestone G.6 *** *** Novazen
Milestone G.7 *** *** Novazen
Milestone G.8 *** *** Novazen
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone G.9 *** *** Novazen
Milestone G.10 *** *** Novazen
Milestone G.11 *** *** Novazen
Milestone G.12 *** *** Novazen
MAJOR MILESTONE H *** *** Novazen
Milestone H.1 *** *** Novazen
Milestone H.2 *** *** Novazen
Milestone H.3 *** *** Novazen
Milestone H.4 *** *** Novazen
Milestone H.5 *** *** Novazen
Milestone H.6 *** *** Novazen
Milestone H.7 *** *** Novazen
Milestone H.8 *** *** Novazen
Milestone H.9 *** *** Novazen
Milestone H.10 *** *** Novazen
Milestone H.11 *** *** Novazen
Milestone H.12 *** *** Novazen
MAJOR MILESTONE I *** *** Novazen
Milestone I.1 *** *** Novazen
Milestone I.2 *** *** Novazen
Milestone I.3 *** *** Novazen
Milestone I.4 *** *** Novazen
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone I.5 *** *** Novazen
Milestone I.6 *** *** Novazen
Milestone I.7 *** *** Novazen
Milestone I.8 *** *** Novazen
Milestone I.9 *** *** Novazen
Milestone I.10 *** *** Novazen
Milestone I.11 *** *** Novazen
Milestone I.12 *** *** Novazen
MAJOR MILESTONE J *** *** Novazen
Milestone J.1 *** *** Novazen
Milestone J.2 *** *** Novazen
Milestone J.3 *** *** Novazen
Milestone J.4 *** *** Novazen
Milestone J.5 *** *** Novazen
Milestone J.6 *** *** Novazen
Milestone J.7 *** *** Novazen
Milestone J.8 *** *** Novazen
Milestone J.9 *** *** Novazen
Milestone J.10 *** *** Novazen
Milestone J.11 *** *** Novazen
Milestone J.12 *** *** Novazen
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MAJOR MILESTONE K *** *** Rocky Mountain Internet
MAJOR MILESTONE L *** *** Novazen
Milestone L.1 *** *** Novazen
Milestone L.2 *** *** Novazen
Milestone L.3 *** *** Novazen
Milestone L.4 *** *** Novazen
Milestone L.5 *** *** Novazen
Milestone L.6 *** *** Novazen
Milestone L.7 *** *** Novazen
Milestone L.8 *** *** Novazen
Milestone L.9 *** *** Novazen
Milestone L.10 *** *** Novazen
Milestone L.11 *** *** Novazen
Milestone L.12 *** *** Novazen
MAJOR MILESTONE M *** *** Novazen
Milestone M.1 *** *** Novazen
Milestone M.2 *** *** Novazen
Milestone M.3 *** *** Novazen
Milestone M.4 *** *** Novazen
Milestone M.5 *** *** Novazen
Milestone M.6 *** *** Novazen
Milestone M.7 *** *** Novazen
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone M.8 *** *** Novazen
Milestone M.9 *** *** Novazen
Milestone M.10 *** *** Novazen
Milestone M.11 *** *** Novazen
Milestone M.12 *** *** Novazen
MAJOR MILESTONE N *** *** Novazen
MAJOR MILESTONE O *** *** Rocky Mountain Internet
MAJOR MILESTONE P *** *** Rocky Mountain Internet
Milestone P.1 *** *** Rocky Mountain Internet
Milestone P.2 *** *** Rocky Mountain Internet
Milestone P.3 *** *** Rocky Mountain Internet
Milestone P.4 *** *** Rocky Mountain Internet
Milestone P.5 *** *** Rocky Mountain Internet
Milestone P.6 *** *** Rocky Mountain Internet
Milestone P.7 *** *** Rocky Mountain Internet
Milestone P.8 *** *** Rocky Mountain Internet
Milestone P.9 *** *** Rocky Mountain Internet
Milestone P.10 *** *** Rocky Mountain Internet
Milestone P.11 *** *** Rocky Mountain Internet
Milestone P.12 *** *** Rocky Mountain Internet
MAJOR MILESTONE Q *** *** Rocky Mountain Internet
Milestone Q.1 *** *** Rocky Mountain Internet
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone Q.2 *** *** Rocky Mountain Internet
Milestone Q.3 *** *** Rocky Mountain Internet
Milestone Q.4 *** *** Rocky Mountain Internet
Milestone Q.5 *** *** Rocky Mountain Internet
Milestone Q.6 *** *** Rocky Mountain Internet
Milestone Q.7 *** *** Rocky Mountain Internet
Milestone Q.8 *** *** Rocky Mountain Internet
Milestone Q.9 *** *** Rocky Mountain Internet
Milestone Q.10 *** *** Rocky Mountain Internet
Milestone Q.11 *** *** Rocky Mountain Internet
Milestone Q.12 *** *** Rocky Mountain Internet
MAJOR MILESTONE P (END OF
PHASE 2) *** *** Rocky Mountain Internet
MAJOR MILESTONE Q *** *** Novazen
Milestone Q.1 *** *** Novazen
Milestone Q.2 *** *** Novazen
Milestone Q.3 *** *** Novazen
Milestone Q.4 *** *** Novazen
Milestone Q.5 *** *** Novazen
Milestone Q.7 *** *** Novazen
Milestone Q.8 *** *** Novazen
Milestone Q.9 *** *** Novazen
Milestone Q.10 *** *** Novazen
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Milestone Q.11 *** *** Novazen
Milestone Q.12 *** *** Novazen
Milestone Q.13 *** *** Novazen
MAJOR MILESTONE R *** *** Novazen
Milestone R.1 *** *** Novazen
Milestone R.2 *** *** Novazen
Milestone R.3 *** *** Novazen
Milestone R.4 *** *** Novazen
Milestone R.5 *** *** Novazen
Milestone R.6 *** *** Novazen
Milestone R.7 *** *** Novazen
Milestone R.8 *** *** Novazen
Milestone R.9 *** *** Novazen
Milestone R.10 *** *** Novazen
Milestone R.11 *** *** Novazen
Milestone R.12 *** *** Novazen
MAJOR MILESTONE S *** *** Novazen/Rocky Mountain Internet
Milestone S.1 *** *** Rocky Mountain Internet
Milestone S.2 *** *** Novazen
Milestone S.3 *** *** Rocky Mountain Internet
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
MILESTONE MILESTONE DESCRIPTION TARGET DATE RESPONSIBILITY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MAJOR MILESTONE T *** *** Novazen
MAJOR MILESTONE U *** *** Novazen
</TABLE>
28
<PAGE>
SCHEDULE C - PAYMENT TERMS AND CONDITIONS
Rocky Mountain Internet agrees to pay for the Program License Fees and
Consulting Services, as set forth in Schedules B and B-1, in a combination of
cash and shares of Rocky Mountain Internet common stock, according to the
following payment schedule:
Payment 1: *** on contract signing
- Payment 2: 25,000 shares of Rocky Mountain Internet common
stock on contract signing or within two weeks thereafter.
The shares of Rocky Mountain Internet, Inc. common stock,
issuable pursuant to the terms hereof, will be restricted
(and not registered) upon issuance provided however that
Rocky Mountain Internet, Inc. shall cause such shares to be
registered for resale under the Securities Act of 1933 no
later than October 1, 1998. If Rocky Mountain Internet, Inc.
fails to register such shares for resale on or before
October 1, 1998, Novazen shall have the right to require
Rocky Mountain Internet, Inc. to buy the shares at any date
beyond October 1, 1998 for the per share price at which
Rocky Mountain Internet, Inc.'s common stock is trading on
the close of business on the day prior to the request made
by Novazen.
The payment terms specified above entitle Rocky Mountain Internet to a cap of
*** Invoiced Accounts. Additional subscribers can only be added for an
additional license fee. Rocky Mountain Internet would receive most favored
customer pricing in establishing this additional fee. Most favored customer
pricing is defined as the best price for a Novazen Program sold within the prior
six months, exclusive of this agreement. If no Novazen Programs have been sold
within that period, the fee will be established according to the then
outstanding Novazen price list.
FUNCTIONAL UPGRADE
Under the terms and conditions of this software license and consulting services
agreement, Rocky Mountain Internet is entitled to functional upgrade software
releases, within 12 months from the commencement date, in addition to the
software delivery as specified in Schedule A. Rocky Mountain Internet agrees to
pay Novazen on a time and materials basis for the cost of applying the new
functionality to the RMI code base for each functional upgrade software release,
according to the following billing rates:
<TABLE>
<CAPTION>
CONSULTANT TYPE/TITLE CODING SYMBOL DAILY RATE* HOURLY RATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CEO, President CEO/P *** ***
Vice President VP *** ***
Director DIR *** ***
Senior Consultant SCON *** ***
29
<PAGE>
Senior Engineer SENG *** ***
Senior Architect SARC *** ***
Consultant CON *** ***
Engineer ENG *** ***
System Administrator SYSAD *** ***
Office Administration OADM *** ***
Graphics Artist GA *** ***
Web Engineer WEB *** ***
Technical Writer TW *** ***
</TABLE>
*Daily Rate is based on a minimum of 8 hours and
is fixed regardless of additional hours worked
over 8 hours in a single calendar day.
The consulting services for each subsequent functional release should not exceed
a total maximum cost of *** (excluding expenses).
30
<PAGE>
SCHEDULE D - OBLIGATIONS OF ROCKY MOUNTAIN INTERNET
Rocky Mountain Internet, Inc. will have the following obligations to support
Novazen's performance of the services:
- Provide the necessary specialists in the current project to participate
in any necessary project activities
- Provide adequate work space at the customer site for Novazen to perform
the services to the extent that they are commercially reasonable
including:
- Lockable desks
- Telephones (with local and long distance access)
- Internet connections
- Filing cabinets
- After-hours and weekend access to the customer site
- LAN connections with access to printers
- Personal directory structures on the LAN
- LAN Technical support staff
- Access to and use of photocopiers
- Access to and use of fax machines
- Test Data
- Interface and Legacy System Record Layouts
31
<PAGE>
SCHEDULE E - HARDWARE/SOFTWARE REQUIREMENTS
In order to evaluate whether Novazen has achieved contract performance and/or
any milestone target date, Rocky Mountain Internet agrees to implement the
Program according to the following hardware and software requirements:
<TABLE>
<CAPTION>
REQUIRED HARDWARE/SOFTWARE REQUIREMENTS (IF APPLICABLE) RECOMMENDED SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Server Software(1) - Netscape Enterprise, or
- Apache HTTP, or
- Microsoft IIS, or
- Sun Java
- ------------------------------------------------------------------------------------------------------------------------------------
Print Server
- ------------------------------------------------------------------------------------------------------------------------------------
Server Operating System - Microsoft Windows NT, or
- Unix (Sun Solaris, HP-UX) Unix
- ------------------------------------------------------------------------------------------------------------------------------------
Hardware Disk Array - 60 GB capacity, with 32 MB cache
- ------------------------------------------------------------------------------------------------------------------------------------
Database Software - Oracle 8.0, or Oracle 8.0
- Sybase, or
- SQL Server, or
- Informix
- ------------------------------------------------------------------------------------------------------------------------------------
Application Framework Software - WebObjects 3.5.1 or higher WebObjects
- Enterprise Objects (2)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
(1) Several server configurations are possible with the Program. For example, a
larger enterprise server could house the Web, database, and print functions,
rather than using a separate server for each function as detailed above. The
decision depends on the scalability needs of the client and the availability of
the hardware components.
(2) Enterprise Objects is included with the WebObjects package.
E-32 of 33
<PAGE>
<TABLE>
<CAPTION>
REQUIRED HARDWARE/SOFTWARE REQUIREMENTS (IF APPLICABLE) RECOMMENDED SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Printing Framework Software - Report Mill (3) Report Mill
- ------------------------------------------------------------------------------------------------------------------------------------
Client Operating System - Windows 95 or higher, or
- Windows NT, or
- Unix, or
- Any OS that supports browsers
- ------------------------------------------------------------------------------------------------------------------------------------
Client Web Browser - Netscape 3.x or higher, or Netscape or Internet Explorer 4.x or
higher
- Internet Explorer 3.x or higher, or
- WebTV
- ------------------------------------------------------------------------------------------------------------------------------------
Online Payment Interface Software - Any online payment (credit card and CyberCash
electronic bank draft) service
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------
(3) Required only if client wants the Program to create a paper print stream of
bill data.
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