LICENSE AGREEMENT
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THIS LICENSE AGREEMENT (the "Agreement"), effective as of September 1,
2000, is made by and between DATA TRANSMISSION NETWORK CORPORATION, a Delaware
corporation (hereinafter "DTN"), and SMARTSERV ONLINE, INC., a Delaware
corporation (hereinafter "SSOL").
W I T N E S S E T H:
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WHEREAS, SSOL and DTN have previously entered into a Software License
and Service Agreement (the "License Agreement") dated as of May 1, 1998, which
was amended by an agreement effective as of May 1, 1999 (the "Amendment"),
source code escrow agreements relating thereto and executed from time to time
(the "Source Code Escrow Agreements") and all other executed addendums and
amendments to the above agreements (the "Other Agreements" and together with the
License Agreement, the Amendment and the Source Code Escrow Agreements, the
"Prior Agreements");
WHEREAS, SSOL and DTN desire to enter into this Agreement to provide
for the license by SSOL to DTN of the intellectual property covered by the Prior
Agreements upon the terms and conditions set forth herein and desire for this
Agreement to supercede and replace the Prior Agreements in their entirety;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants set forth in this Agreement, the parties do hereby agree as
follows:
SECTION 1
DEFINED TERMS
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1.1 Hardware means the DTN equipment located on SSOL's premises as of
the date of this Agreement and set forth on Exhibit A hereto.
1.2 Intellectual Property means all intellectual property rights
worldwide arising under statutory law, common law or by contract, and whether or
not perfected, with respect to the software described on Exhibit B hereto
including, without limitation, (i) all patents, patent applications and patent
rights; (ii) the Source Code, Object Code and related supporting documentation;
(iii) all rights associated with works of authorship including copyrights,
copyright applications, copyright registrations, mask work rights, mask work
applications, mask work registrations; (iv) all rights relating to the
protection of trade secrets and confidential information; (v) all technical data
and information in SSOL's possession necessary or helpful for DTN to make, have
made and use the software and any documentation thereto, including, but not
limited to, techniques, methods, formulations, plans, specifications, programs,
schematics, designs and other similar information; (vi) any other proprietary
rights relating to such intangible property; and (vii) divisions, continuations,
renewals, reissues and extensions of the foregoing (as and to the extent
applicable) now existing, hereafter filed, issued or acquired.
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1.3 Object Code means the form of software resulting from the
translation or processing of the Source Code (as defined herein) by a computer
into machine language or intermediate code in a form that is not convenient to
human understanding but which is appropriate for execution or interpretation by
a computer, together with related user documentation.
1.4 Source Code means, with respect to the DTNIQ and TRADE IQ (Review
and Release) modules set forth on Exhibit B, the program instructions and codes
written by humans with the intention that the instructions and codes be compiled
and interpreted by a computer, including all existing commentary, explanations,
control procedures, record layouts for all files and program listings-source
codes, design documentation, user manuals, programmers' guides, system guides,
current compilation instructions, and all other user documentation and
programmer documentation, including data flows, data structures, control logic,
flow diagrams, and principles of operation, useful for design, modification and
maintenance of the code by a programmer.
SECTION 2
LICENSE
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2.1 SSOL hereby grants to DTN and its successors and assigns a
perpetual, royalty-free, irrevocable and world-wide right, with rights to
sublicense, to reproduce, make derivative works of, digitally perform, publicly
perform, digitally display and publicly display in any form or medium, whether
now known or later developed, distribute, make, use and sell the Intellectual
Property for the purpose of developing and marketing products and services (the
"License").
2.2 The License shall be exclusive to DTN (even as against SSOL) until
September 1, 2001; provided however, from and after December 1, 2000, SSOL may
license, sell, convey or otherwise transfer the Intellectual Property for use
solely outside of North America. From and after September 1, 2001, the License
shall be non-exclusive to DTN and its successors and assigns.
SECTION 3
SOURCE CODE TRANSFER
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3.1 On or before October ___, 2000, SSOL shall deliver to DTN a
tangible beta copy of the Source Code.
3.2 On or before December 1, 2000, SSOL shall deliver to DTN a tangible
production copy of version 1.8 of the Source Code.
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3.3 DTN shall have the right to duplicate, alter, reverse engineer,
reverse compile, modify, disassemble, decompile, recreate, generate enhance or
otherwise change or supplement any copy of the Source Code in its possession.
3.4 Time is of the essence of this Agreement.
SECTION 4
CONSIDERATION
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In consideration of SSOL entering into this Agreement and performing
the obligations to be performed by SSOL pursuant to the terms and provisions of
this Agreement, DTN agrees to pay to SSOL twelve (12) consecutive monthly
payments of $83,000 each, without interest, commencing with September 2000 and
ending with August 2001. Such monthly payments shall be due in arrears on or
before the twentieth day of the month following the calendar month to which it
relates.
SECTION 5
SUPPORT DUTIES OF SSOL
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5.1 From the date of this Agreement to September 1, 2001, SSOL shall
provide to DTN, at no additional cost to DTN, the support services (the "SSOL
Services") specified in Section 5.2; provided, however, the maximum number of
hours needed to perform the SSOL Sevices described in clauses 5.2 (iii) and (iv)
shall not exceed 2,560 in the aggregate. SSOL shall provide to DTN on a monthly
basis (or more frequently as reasonably requested by DTN) a detailed accounting
of the SSOL Services including the number of hours expended by SSOL in the
performance of the SSOL Services. SSOL shall provide to DTN documentation
supporting such hours as reasonably requested by DTN.
5.2 As part of the SSOL Services, SSOL agrees to (i) correct any
failures or defects in the beta version of the Source Code delivered to DTN
pursuant to Section 3.1; (ii) correct any failures or defects in the production
version of the Source Code delivered to DTN pursuant to Section 3.2; (iii)
conduct such training as may reasonably be requested by DTN to enable DTN to use
the Source Code, which training shall be conducted at SSOL's Stamford, CT
offices; and (iv) provide back-up systems support as requested by DTN after
December 1, 2000. The SSOL Services described in clauses (i) and (ii) above
shall be provided with professional due diligence consistent with industry
standards.
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SECTION 6
HARDWARE
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6.1 On or after August 31, 2001, DTN has the right to move or dispose
of all of DTN's Hardware physically located at SSOL 's facilities.
6.2 If DTN's Hardware is not moved or disposed of by September 30,
2001, SSOL shall acquire all of DTN's right, title and interest in the same.
SECTION 7
WARRANTIES AND INDEMNIFICATION.
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7.1 SSOL represents and warrants to DTN that (i) SSOL has the right,
power and authority to grant the License granted in this Agreement and to
perform its obligations hereunder; (ii) the Intellectual Property does not
infringe any U.S. or foreign patent, trademark or copyright of any third party,
nor is SSOL aware of any threatened claim of any such infringement; (iii) SSOL
is not ware of any third-party products which infringe on its proprietary rights
in the Intellectual Property; (iv) SSOL is the owner of all right, title and
interest in and to the Intellectual Property and has not granted licenses
thereunder to any other entity; and (v) the Source Code is free from known
material defects and materially performs in accordance with any documentation
provided therewith.
7.2 In the event that the Source Code does not perform as warranted in
Section 6.1(v), SSOL agrees to use its best efforts to promptly make the Source
Code perform as so warranted.
7.3 SSOL hereby indemnifies and agrees to hold harmless DTN from and
against any and all claims, demands, and actions, and any liabilities, damages,
or expenses resulting therefrom, including court costs and reasonable attorneys'
fees, resulting from a breach of SSOL's representations and warranties or
covenants set forth herein. SSOL's obligations under this Section 7.3 shall
survive the expiration or termination of this Agreement for any reason. DTN
agrees to give SSOL prompt notice of any such claim, demand, or action and to
cooperate in the defense and settlement of such claim, demand, or action as
reasonably requested by SSOL.
SECTION 8
TERMINATION OF PRIOR AGREEMENTS
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8.1 The Parties agree that, effective immediately, the Prior Agreements
are terminated and are of no further force or effect.
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8.2 DTN and SSOL do hereby fully and absolutely release and forever
discharge each other and their affiliates, officers, directors, employees and
agents (the "Released Parties") from any and all claims, demands and causes of
action of any kind whatsoever, whether known or unknown at the present time,
which either Party may have against any of the Released Parties with respect to
or arising out of the prior agreements set forth in Section 8.1. The foregoing
release is intended and shall be construed as a full and complete release of all
claims, demands, and causes of action referred to above. This release shall
inure to the benefit of the Released Parties and their respective heirs,
representatives, successors and assigns.
SECTION 9
ADDITIONAL OBLIGATIONS
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DTN agrees to provide SSOL with twenty (20) subscriptions to its DTNIQ
and TRADE IQ internet products through August 31, 2001 for use only by SSOL's
employees and officers. SSOL will be required to execute DTN's standard
subscription agreements for such products. Such subscriptions will be provided
free of DTN's subscription fees; provided, however, SSOL will be required to pay
applicable exchange fees.
SECTION 10
MISCELLANEOUS
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10.1 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware, without regard to
principles of conflicts of laws.
10.2. Relationship between the Parties. DTN and SSOL are not agents,
partners or joint ventures under this Agreement, and nothing herein shall be
construed as causing them to be such.
10.3 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given and
delivered (i) when personally delivered, (ii) five business days after mailed by
certified or registered mail, postage prepaid, return receipt requested, (iii)
when sent by telecopier with electronically verified answer back, or (iv) the
first business day after sent by a recognized major overnight courier service
(such as Federal Express, UPS or Express Mail) which requires the addressee to
acknowledge receipt thereof, in any such case addressed as follows, or to such
other address as any party shall have designated by notice to the other given
pursuant hereto:
To DTN: Data Transmission Network Corporation
9110 West Dodge Road, Suite 200
Omaha, NE 68114
Attention: President of Financial Services
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To SSOL: Chief Technology Officer
SmartServ Online, Inc.
One Station Place
Stamford, CT 06902
With a copy to SSOL's General Counsel at
the same address.
A business day is a day other than Saturday, Sunday or a day in which banks in
the State of Delaware are authorized or required to close.
10.4. Severability of Provisions. In case any of the provisions
contained in this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, (i) any such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, (ii) the
particular provision, to the extent permitted by law, shall be reasonably
construed and equitably reformed to be valid and enforceable and (iii) this
Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.
10.5. Waiver. No omission or delay of either party hereto in requiring
due and punctual performance by the other party of the obligations of such other
party hereunder shall be deemed to constitute a waiver of the right to require
such due and punctual performance thereafter or a waiver of any of other
obligation hereunder.
10.6 Assignability; Binding Effect.
(a) This Agreement may be assigned by either party, without the prior
written consent of the other party; provided, however, (i) the assigning party
shall not be released from primary liability under this Agreement and (ii) in no
event may this Agreement be assigned by DTN or any of its successors or assigns
to Aether, 724 Solutions, W-Trade or any of their subsidiaries, successors or
assigns. Any attempted assignment in violation of this provision shall be void
and of no force or effect.
(b) Subject to the foregoing, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
10.7. Force Majeure. Neither party shall be liable to the other for
failure or delay in the performance of a required obligation (other than the
payment of amounts due hereunder) if such failure or delay is caused by strike,
riot, fire, flood, natural disaster or other similar cause beyond such party's
reasonable control.
10.8. Taxes. Any taxes which SSOL or DTN may be required to pay or
collect, under any existing law, upon or with respect to the sale, purchase,
delivery, processing, use or consumption of the goods and services provided
pursuant to this Agreement, exclusive of taxes based solely on SSOL's net
income, shall be borne by DTN.
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10.9 Entire Agreement. This Agreement, including the Exhibits hereto,
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all previous proposals, both oral and written,
negotiations, representations, commitments, writings and all other
communications between the parties. This Agreement may not be released,
discharged, modified or amended except by an instrument in writing signed by a
duly authorized representative of each of the parties.
10.10. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart.
10.11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and
permitted assigns.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.
DATA TRANSMISSION NETWORK SMARTSERV ONLINE, INC.,
CORPORATION, a Delaware a Delaware corporation
corporation
By:__________________________ By:____________________________
Title:_________________________ Title:___________________________
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EXHIBIT A
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EXHIBIT B
