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Sample Business ContractsHome: Sample Business Contracts:
REVENUE SHARING,
SERVICE DEVELOPMENT,
AND
JOINT MARKETING ALLIANCE
AGREEMENT
BY AND BETWEEN
IXC COMMUNICATION SERVICES, INC.
AND
e-NET, INC.
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SIGNATURE PAGE
THIS AGREEMENT has an Effective Date of September 14, 1999, and is made by and
between:
IXC Communication Services, Inc. "IXC")
with offices located at:
1122 Capital of Texas Highway South
Austin, TX 78746-6426
Telephone: (512) 231-5188
Facsimile: (512) 231-5287
AND
e-Net Inc. and ZeroPlus.com, Inc., (hereinafter collectively referred to as
"E-NET")
with offices located at:
12800 Middlebrook Rd.
Suite 400
Germantown, MD 20874
Telephone: (301) 601-8700
Facsimile: (301) 601-3221
IXC and E-NET (hereinafter collectively referred to as the "parties") agree to
collaborate to provide the hereinafter defined services on the terms and
conditions contained in this Agreement, including this Signature Page, the
General Terms & Conditions, and Appendices A, B, C, and D, attached hereto and
incorporated herein by reference.
E-NET, INC. IXC COMMUNICATION SERVICES, INC.
By: /s/ Robert A. Veschi By: /s/ Dominick DeAngelo
--------------------------------- ------------------------------
(Authorized Signature) (Authorized Signature)
Name: Robert A. Veschi Name: Dominick DeAngelo
Title: President and CEO Title: SVP Product Marketing
Date: Date:
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GENERAL TERMS & CONDITIONS
I. PURPOSE OF THIS AGREEMENT AND AGREEMENT TERM.
A. This non-exclusive Agreement is intended to provide a framework for
E-NET and IXC to be able to provide joint telephony services to
Market Associates, as defined below, utilizing E-NET's ZeroPlus.com
technology, as defined below, in combination with certain IXC
services (such joint telephony services are hereinafter referred to
as the "Conjoined Service"). This Agreement is also intended to
provide the structural framework for revenue sharing, joint
marketing, and joint sales activities to IXC and E-NET existing and
potential customers. This Agreement will attempt to outline the
specific details required to perform these activities, the
responsibilities they entail to both companies, and to outline each
party's liabilities associated with these responsibilities. Since
the specifics of this relationship can not fully be outlined in this
contract, both sides agree to make efficient use of informal
arbitration, performance review meetings, and other operational
discussions to make a best effort to outline a mutually beneficial
operating arrangement. It is intended that additional operating
procedures will be added to this document over time in appendices to
further enhance the relationship and operating mechanisms.
B. The initial term of this Agreement is for two (2) years, and
commences as of the Effective Date notwithstanding the date(s)
signed by a party's authorized representative ("Initial Term"). This
Agreement shall automatically renew for additional twelve (12) month
terms (each a "Renewal Term") unless either party notifies the other
party in writing at least ninety (90) days prior to the expiration
of the Initial Term or the then current Renewal Term, of its
intention not to renew.
II. DEFINITIONS.
A. "ZeroPlus.com" shall mean the wholly owned subsidiary of E-NET,
ZeroPlus.com, Inc., which provides internet telephony services to
end users by facilitation of a "0 plus 10 digit" dialing method
similar to the way traditional telephone calls are made.
ZeroPlus.com shall also refer to the proprietary voice-over-data
technology including specifically, for purposes of clarification and
not limitation, algorithms, electronic computer protocols, routines,
subroutines or programs developed by or on behalf of E-NET, or
otherwise owned by or in custody of E-NET, to facilitate the
internet telephony strategy embodied by E-NET and its wholly-owned
subsidiary.
B. "Gemini 2000" shall mean the fully redundant U.S.-based internet
protocol network ("IP network") offering dedicated IP transport
services, as well as access to other internet service providers' IP
networks. Gemini 2000 employs an OC-48 POS (Packet over SONET)
backbone to route traffic hierarchically between core site regions.
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Access to this IP network is via private line, frame relay, ATM, or
SDSL where available. Access speeds are offered from 56kbps through
OC12; data transmission provides speeds approximately twenty (20)
times faster than that available from other service providers. IXC's
IP network is built and owned by IXC, and is fully managed by its
dual, redundant IXC IP network operations centers.
C. "Gross Revenues" shall mean the gross billings as earned and
collected on the Conjoined Service provided hereunder, including
off-net telephone charges, enhanced messaging charges, advanced
feature charges and advertising.
D. "Market Associate" shall mean an internet portal, internet service
provider, carrier, end user or any other party (other than E-NET or
IXC) utilizing or promoting others to use the ZeroPlus.Com
application over the Gemini 2000 network for on-net or off-net
telephony services.
E. "Losses" shall mean negative Qualifying Net Revenue as defined in
Section VII.
F. "IXC Internet Services, Inc." shall mean the wholly owned subsidiary
of IXC Communication Services, Inc.
III. E-NET RESPONSIBILITIES.
E-NET shall be responsible for making available for the Conjoined Service,
or otherwise delivering to IXC for the purpose of the Conjoined Service,
the following elements:
A. A designate will serve as the E-NET point of contact. The E-NET
point of contact noted below in Section XXII (J), shall be
responsible for coordinating performance reviews, detailing
compliance with Service Level Agreement ("SLA") requirements
contained in Appendix C, providing requested financial information,
and coordinating the performance of this Agreement with the IXC
point of contact.
B. T2000 Gatekeeper software, installation and technical support for
three servers (which servers shall be included in the equipment that
IXC shall lease to E-NET hereunder) to be located at the IXC
locations agreed to by the parties pursuant to the engineering plan
to be developed pursuant to this Agreement. Software shall be
installed at such locations no later than January 1, 2000.
C. 25 ISA-based NetConnect cards to be delivered for use under this
Agreement for end-users as necessary;
D. Long distance routing capability inbound from an IP data network
(including the internet), and outbound to an IP data network
(including the internet). The foregoing will be based upon E-NET's
VoIP (Voice over Internet Protocol) Products, as the term `Products'
is defined in Section XIX, below;
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E. ZeroPlus.com subscriber base information;
F. Registration of ZeroPlus.com users via web interface;
G. Customer and technical support for E-NET provided elements as
defined in Appendix B;
H. Back office billing systems, and related support necessary to
invoice customers for services covered under this Agreement; and
I. Joint sales and marketing support.
IV. IXC RESPONSIBILITIES.
IXC is responsible for making available for the Conjoined Service, or
otherwise delivering to E-NET for the duration of this Agreement as
specified herein, the following elements:
A. A designate who shall serve as IXC's point of contact. IXC's point
of contact noted below in Section XXII J, shall be responsible for
ensuring each party's performance of its duties in support of the
Conjoined Service, coordinate E-NET's and IXC's corporate resources
involved in the Conjoined Service, maintain records related to the
Conjoined Service, and coordinate the performance of this Agreement
with E-NET's point of contact;
B. Joint sales and marketing support to offer the Conjoined Service to
IXC's retail and wholesale customers;
C. Climate controlled, UPS powered, co-location space for all T2000
Gatekeeper software, web servers, SQL servers, and related routers
that are required to provide the Conjoined Service, and access to
Gemini 2000, in the facilities located at the IXC locations agreed
to by the parties pursuant to the engineering plan to be developed
pursuant to this Agreement;
D. Leasing to E-NET certain equipment necessary for the Conjoined
Service, the aggregate cost (that is, the total acquisition cost to
IXC) of which shall not exceed one million dollars ($1,000,000.00)
unless otherwise agreed to by IXC in its sole discretion. Subject to
the above, the exact description and quantity of such equipment is
to be designated by the parties in the engineering plan, which is to
be developed pursuant to this Agreement; and
E. Termination of switched minutes with respect to the Conjoined
Service, as more fully set out below.
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V. JOINT RESPONSIBILITIES.
E-NET and IXC are responsible for making available for the Conjoined
Service, or otherwise delivering to each other for the duration of this
Agreement as specified herein, the following elements:
A. Customer service support for services covered under this Agreement
as defined in Appendix B.
B. IXC and E-NET points of contact shall make best efforts and be
jointly responsible for delivering a detailed engineering plan to
IXC and E-NET senior management by no later than October 1, 1999,
which will define the network architecture necessary to provide a
robust, reliable, and scalable operating structure.
C. Interoperability testing of E-NET software on IXC provided and
monitored hardware.
D. IXC and E-NET points of contact shall make best efforts and be
jointly responsible for delivering a detailed operating plan to IXC
and E-NET senior management by no later than October 1, 1999, which
will define all of the standard reports, calculations and other
service parameter calculations provided pursuant to this Agreement.
E. IXC and E-NET points of contact shall make best efforts and be
jointly responsible for delivering a detailed capital planning
analysis to IXC and E-NET senior management by no later than October
1, 1999, which will define all of the equipment required by IXC and
E-NET to deliver a superior service offering as outlined in
paragraph B above. This equipment will be leased to E-NET as defined
in Section VI below.
F. Each party, individually, shall be responsible for collecting and
paying to the appropriate tax authorities any charges, assessments,
surcharges, levies, fees, sales or use taxes, or similar items, if
any, assessed by any governmental entity ("Applicable Taxes") that
are due with respect to its share of Qualifying Net Revenue or its
performance under this Agreement. The parties are individually
liable for and shall indemnify the other from and against losses,
claims, damages and expenses including, but not limited to,
reasonable attorneys' fees, arising out of or resulting from its
payment of or failure to pay all Applicable Taxes properly
chargeable to it or relating to the purchase, use, resale, or lease
of the Conjoined Service, and/or any penalty and interest thereon if
assessed by the applicable governmental entity. Each party shall be
responsible for payment of its respective corporate franchise and
income taxes to the extent based upon income derived from
performance of this Agreement.
VI. E-NET EXPENSE OBLIGATIONS.
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A. Lease of Equipment Required to Deliver the Conjoined Service.
The parties each agree that certain equipment will be required for
E-NET to provide the Conjoined Service over the IXC network. IXC
shall lease such equipment to E-NET in accordance with the terms and
conditions of IXC's standard Master Service Agreement and applicable
Customer Premise Equipment supplement, attached hereto at Appendix D
and incorporated herein by reference, except as provided in this
paragraph and otherwise agreed to in writing by the parties. The
lease rate for such equipment shall be at IXC's cost, as determined
by IXC in its good faith discretion. With respect to such equipment
lease rates, IXC's costs shall be calculated in accordance with
IXC's then current standard cost model for such equipment, which
shall include, but not be limited to, all acquisition costs, any
applicable taxes and IXC's then current standard financing/carrying
cost; upon taking all such equipment costs into consideration, the
applicable lease rates shall be calculated in the same manner as
depreciation, using the straight line method over a sixty (60) month
period. In the event of either the termination of this Agreement or
a debt or equity offering by E-NET other than in connection with the
rights granted to IXC pursuant to Section XI, IXC may, in its sole
discretion, direct E-NET to purchase (at which point E-NET shall be
obligated to purchase) all of such equipment at its then book value
(i.e., the un-depreciated value), as determined by IXC in its sole
good faith discretion. The lease payments for such equipment shall
be considered an operational expense reimbursable to IXC under the
revenue sharing plan outlined herein. Subsequent to the Effective
Date hereof, E-NET and IXC agree to negotiate in good faith to
determine the exact description, quantity and location of the
equipment to be leased by E-NET from IXC pursuant to this Agreement.
In any event, the title to and risk of loss for the equipment
provided hereunder shall remain with IXC unless such equipment is
purchased by E-NET at the direction of IXC pursuant to this
paragraph.
B) Collocation and Usage Based Bandwidth Calculation.
The parties each agree that collocation space and bandwidth via
IXC's network will be required for E-NET to provide the Conjoined
Service. IXC shall provide collocation (in the locations set out in
this Agreement) and bandwidth services to E-NET in accordance with
the terms and conditions of IXC's standard Master Service Agreement
and applicable Data Collocation & Bandwidth Services supplement,
attached hereto as Appendix D and incorporated herein by reference,
except as provided in this paragraph and otherwise agreed to in
writing by the parties. The collocation and bandwidth rates shall be
priced at IXC's cost, as determined by IXC in its good faith
discretion and such collocation and bandwidth charges associated
with the Conjoined Service shall be considered an operational
expense reimbursable to IXC under the revenue sharing plan outlined
herein. With respect to such collocation and bandwidth rates, IXC's
costs shall be calculated in accordance with IXC's then current
standard cost model for such services. With respect to collocation,
such cost model shall include, but not be limited to, capital cost
per square foot, power, HVAC, and monitoring costs. With respect to
bandwidth, such cost model
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shall include, but not be limited to, costs of fiber, optronics,
access to the Gemini 2000 network, maintenance of such forementioned
items, and off-net back up circuits.
C) Termination of Switched Minutes.
With respect to the switch minute terminations originating from
customers of the Conjoined Service IXC shall provide switched
services to E-NET, at IXC's cost, in accordance with the terms and
conditions of IXC's standard Master Service Agreement and applicable
IXC Switched Service supplement, attached hereto as Appendix D and
incorporated herein by reference, except as provided in this
paragraph and otherwise agreed to in writing by the parties. The
charges for such switched services provided in connection with the
Conjoined Service shall be an operational expense reimbursable to
IXC under the revenue sharing plan outlined herein. With respect to
such charges for switched services, IXC's costs shall be calculated
in accordance with IXC's then current standard cost model for such
switched services, which shall include, but not be limited to,
termination charges from applicable LECs, backhaul bandwidth into
IXC's closest point of presence, and applicable federal and state
charges, taxes and fees.
VII. REVENUE SHARING.
With respect to the Conjoined Service provided hereunder, IXC and E-NET
agree to share net revenue and to allocate certain expenses in the
following manner:
A. IXC Expenses for Joint Service Delivery of ZeroPlus.com.
As part of the revenue sharing plan, IXC will be incurring certain
operational expenses described above in Section VI and designated
below as `at IXC Cost', and shall submit the expenses to E-NET for
reimbursement and calculation of the monthly Qualifying Net Revenue
as follows:
1. Charges for leasing of equipment from IXC to E-NET, at IXC
Cost,
2. Bandwidth Usage related to IXC's Gemini 2000 Network at IXC
Cost,
3. Co-location charges for facilities in the IXC locations agreed
to by the parties pursuant to the engineering plan to be
developed pursuant to this Agreement, at IXC Cost, and
4. Charges for switched services provided by IXC to E-NET in
connection with the Conjoined Service, at IXC Cost.
IXC shall not be reimbursed for expenses associated with SG&A
overhead for sales support of ZeroPlus.com.
B. E-NET Operational Expenses For Joint Service Delivery of
ZeroPlus.com.
As part of the revenue sharing plan, E-NET will be incurring
expenses for certain operational expenses and shall include these
reimbursable expenses in its calculation
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of the monthly Qualifying Net Revenue, which are designated below as
'at E-NET Cost', as follows:
1. SG&A overhead for billing operations support at E-NET Cost
2. SG&A overhead for customer care L1 & L2 at E-NET Cost
3. SG&A overhead for corporate administration at E-NET Cost
4. SG&A overhead for sales support at E-NET Cost
5. SG&A overhead for software development at E-NET Cost
6. SG&A overhead for hardware development at E-NET Cost
7. Marketing expenses for Conjoined Service at E-NET Cost
E-NET shall not be reimbursed for (i) any overhead, marketing
expense, or other costs or charges that are not attributable to the
Conjoined Service or (ii) any costs or charges associated with
ZeroPlus.com software, other Products or T2000 Gatekeeper software.
C. Market Associate Percentages.
A Market Associate, as defined herein, which agrees to use, promote
and, under certain circumstances, install ZeroPlus.com on its web
site for convenient and efficient access to its market base, will be
paid a percentage of gross revenue with respect to the Conjoined
Service attributed to such Market Associate. This percentage is
currently roughly fifteen percent (15%) of gross revenue, however,
it may vary up to maximum twenty-five percent (25%) of gross revenue
depending on the portal in question. Any Market Associate requesting
more than a 25% gross margin for access to their customer base, must
be considered an exception and all such requests shall be denied
unless otherwise approved in writing by IXC `s primary point of
contact and E-NET's primary point of contact as defined in this
Agreement.
D. Calculation of Qualifying Net Revenue.
Qualifying Net Revenue of the Conjoined Service delivered by E-NET
and IXC shall be defined in the following manner: Qualifying Net
Revenue shall equal Gross Revenues from the Conjoined Service
including advertising revenue related thereto, minus Market
Associate percentages as defined in paragraph C, above, and minus
both IXC's operational expenses as defined in paragraph A, above,
and E-NET's operational expenses as defined in paragraph B, above
(which operational expenses are reimbursed to the respective parties
in accordance with paragraph E, below). In performing this
calculation both parties agree to follow all standards of generally
accepted accounting practices or (GAAP) as defined by the Federal
Accounting Standards Board. The parties further agree that their
operational expenses shall be reimbursable only to the extent that
such expenses are consistent with this Agreement, commercially
reasonable and justifiable, and properly documented in writing.
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E. Revenue Split.
IXC and E-NET agree that Gross Revenues from the Conjoined Service
shall be allocated and paid in accordance with the following
priorities throughout the duration of this Agreement:
o First, to pay all Marketing Associates their applicable
percentage of the Gross Revenues attributable to each
respective Marketing Associate;
o Second, fifty percent (50%) to E-NET and 50% to IXC, which
shall be applied to each respective party's reimbursable
operational expenses, until the FIRST of either party is FULLY
reimbursed for such expenses;
o Third, one hundred percent (100%) to the party who has NOT
been fully reimbursed for its reimbursable operational
expenses, until such party is also fully reimbursed for such
expenses; and
o Fourth, thereafter (that is, to the extent Qualifying Net
Revenue, as defined in paragraph D above, is greater than
zero), fifty percent (50%) to E-NET and fifty percent (50%) to
IXC.
F. Ceiling on E-NET's SG&A.
Since a large relative SG&A expense to overall Gross Revenues could
affect the calculation of Qualifying Net Revenue as defined in
paragraph D above, and thereby reduce the proceeds due to IXC as
part of this Agreement, E-NET agrees that its SG&A expenses shall be
reimbursable only to the extent that such expenses are consistent
with this Agreement, commercially reasonable and justifiable,
consistent with Generally Accepted Accounting Principles, and
properly documented in writing. Furthermore, the total SG&A expenses
that may be reimbursed to E-NET shall not exceed the higher amount
of either (i) thirty percent (30%) of the monthly Gross Revenues, or
(ii) one million dollars ($1,000,000) a month. Any additional SG&A
over and above the greater of either 30% of the monthly Gross
Revenues or $1,000,000 a month will not be reimbursed to E-NET and
will not be considered relevant to the calculation of the monthly
Qualifying Net Revenue as defined in paragraph D, above.
G. Ceiling on E-NET Marketing Expenses.
Since a large marketing expense to overall Gross Revenues could
affect the calculation of the Qualifying Net Revenue as defined in
paragraph D above, and thereby reduce the proceeds due to IXC as
part of this Agreement; E-NET agrees that its marketing expenses
shall be reimbursable only to the extent that such expenses are
consistent with this Agreement, commercially reasonable and
justifiable, consistent with Generally Accepted Accounting
Principles, and properly documented in writing. Furthermore, the
total marketing expenses that may be reimbursed to E-NET shall not
exceed the higher amount of either (i) five percent (5%) of the
monthly Gross Revenues or (ii) three hundred thousand dollars
($300,000) a month. Any additional
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marketing expense over and above the greater of either 5% of the
monthly Gross Revenues or $300,000 a month will not be reimbursed to
E-NET and will not be considered relevant to the calculation of the
monthly Qualifying Net Revenue as defined in paragraph D, above.
Should E-NET wish to consider higher SG&A or marketing expenses
associated with the Conjoined Service, IXC and E-NET have the
ability to jointly consider raising the limitations associated with
these operational expenses during quarterly planning meetings noted
in Section XXII, below.
H. Termination of Other Carrier Traffic.
If E-NET enters into agreements with other telephony service
providers to terminate switched voice traffic on IXC's facilities,
IXC shall receive compensation for traffic generated from these
third party carriers onto IXC's Network. IXC and E-NET agree to
require that such third party carriers compensate IXC for this
additional traffic in accordance with IXC's then current charges for
IP transit peering connections. IXC will use commercially reasonable
efforts to facilitate termination of other carrier traffic. To the
extent traffic that will be generated by other carriers utilizes any
of IXC's services provided hereunder, including, but not limited to,
access to the Gemini 2000 network, IXC shall be compensated
accordingly by such carriers at its then current rates. IXC will
contract with and subsequently invoice such other telephony service
providers directly for transit peering circuits and E-NET shall not
be responsible in any way for these peering circuit charges;
provided, however, that E-NET shall, in its written agreement with
any third party telephony service provider, provide that any default
in payment to IXC for peering circuit charges shall be deemed to be
a default in payment under such agreement between E-NET and such
third party telephony service provider, as well. Upon written notice
from IXC to E-NET of any such payment default by a third party
telephony service provider, E-NET shall use commercially reasonable
efforts to enforce the above referenced default provision in the
same manner that it would any other payment default.
I. Extended Losses.
Subject to the revenue sharing provisions contained in this
Agreement, (i) neither party shall be responsible for the other
party's Losses (i.e., negative Qualifying Net Revenue) associated
with this Agreement, (ii) both parties have the sole responsibility
for funding their individual day-to-day operations and (iii) each
party shall bear its own costs and expenses incurred by it in
connection with performing its obligations under this Agreement.
J. Ancillary Revenue and Services Rendered.
Ancillary IXC services sold to E-NET, Market Associates or end users
(which IXC is not required to provide pursuant to this Agreement)
are considered proprietary revenue streams of IXC (and revenue
sharing shall not apply). E-NET and IXC mutually recognize that IXC
has offered sales support to the Conjoined Service in
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exchange for the ability to enter into additional contracts with
Market Associates as defined in this Agreement.
Additionally, ancillary E-NET services sold to IXC, Market
Associates or end users (which E-NET is not required to provide
pursuant to this Agreement) are considered proprietary revenue
streams of E-NET (and revenue sharing shall not apply).
K. Choice of Terminating Carrier and Default Vendor.
E-NET agrees that IXC will be the default vendor for off-net
telephony traffic and advertising from Market Associates.
Additionally, if an external carrier brings additional customers
to the attention of E-NET as an additional revenue source, AND, if
E-NET provides service to such additional customers through such
external carrier and without any contribution by IXC (that is, the
service provided to such additional customer does not utilize any
of IXC's services provided hereunder, including, but not limited
to, access to Gemini 2000, and thus, is separate and apart from
the Conjoined Service, as contemplated hereunder), then IXC will
not be entitled to share in this additional revenue and such
customers, external carriers and revenue will be treated
externally from this Agreement. Notwithstanding anything herein,
the expenses required to support external carrier contracts and
externally referred Market Associates will not be included in
E-NET's operational expenses calculation defined in paragraph B
above.
In addition, the parties acknowledge and agree that E-NET may, at
its sole discretion, operate parallel networks to provide
ZeroPlus.com pursuant to other contracts it may enter into with
third party carriers (i.e., carriers other than IXC), as long as
such third party contracts do not violate any terms or provisions
of this Agreement. Notwithstanding the foregoing, if pursuant to
the equity provisions contained in Section XI, IXC exercises the
full Call Right as defined therein, E-NET agrees that (i) the
Initial Term of this Agreement shall be deemed to be extended such
that the Initial Term shall expire two (2) years from and after
such exercise date, and (ii) excluding any third party carrier
contracts entered into in advance of such exercise of the equity
provisions contained in Section XI, IXC shall, for such two (2)
year period commencing on the exercise date, be the sole provider
of network capacity, termination and other network elements which
provide ZeroPlus.com. This shall preclude E-NET from terminating
traffic to a third party carrier during the remainder of the
Initial Term, as extended by this paragraph, without the express
prior written consent of IXC. If IXC exercises equity provisions
contained in Section XI and acquires less than the full Call Right
granted thereunder, the parties agree to negotiate limited
exclusivity conditions to be determined in due course.
L. Calculation of Operational Expenses.
E-NET and IXC agree that Section VI and Section VII, paragraphs A
and B, outline the operational expenses required to calculate the
Qualifying Net Revenue. Since these calculations can be fairly
subjective, both parties agree to submit background information on
cost elements, performance data, and other such factors which
affect
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this calculation at the quarterly review meetings noted in Section
XXIII, below. Like any other dispute that may arise hereunder, IXC
and E-NET agree to subject these elements to the arbitration
provisions set out herein after conducting negotiations in good
faith to resolve any related disagreements.
VIII. PAYMENT TERMS AND PRICES.
IXC will submit to E-NET monthly, in accordance with Section IX, below,
the operational expenses noted above in Section VII A (and described in
detail in Section VI) of this Agreement incurred during the prior month.
E-NET shall, within thirty (30) days from date of receipt of IXC's
operational expenses, pay IXC, the undisputed amounts for, (i)
reimbursement of IXC's operational expenses (including any accrued and
unpaid operational expenses from previous months) and (ii) IXC's share,
if any, of the Qualifying Net Revenue, in accordance with the revenue
sharing priorities set out in Section VII E, above. With respect amounts
to IXC's operational expenses and any applicable Qualifying Net Revenue,
any such amounts disputed by E-NET pursuant to Section IX(C), below, and
resolved in favor of IXC shall be paid by E-NET to IXC within five (5)
days of the resolution of such dispute.
IX. INFORMATION EXCHANGE.
In order to properly calculate revenue sharing elements, both IXC and
E-NET must provide information to each other in a timely and accurate
manner and on a regular basis. This provision is designed to outline the
requirements of this exchange.
A. Revenue Sharing Elements Provided by E-NET.
In light of the revenue sharing elements contained in Section VII
above, E-NET shall make a best effort to provide the following
information to IXC no later than the 15th day of the month
following the end of the previous calendar month.
1. Total Gross Revenues.
E-NET shall report the Gross Revenues attributed to the
Conjoined Service and such report shall include a breakdown
of the Gross Revenues attributable to each Market Associate
(excluding individual end users) and such Market Associate's
applicable Market Associate percentage, if any.
2. Total Qualifying Net Revenue.
E-NET shall report the Qualifying Net Revenue, to include
calculations and the individual breakdown of the elements
for IXC's operational expenses, E-NET's operational expenses
and the individual Market Associate percentages that were
deducted from the monthly Gross Revenues and attributed to
the Conjoined Service.
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3. SG&A by Expense Elements.
E-NET shall report SG&A associated with providing the
Conjoined Service, by expense element, as those SG&A expense
elements are listed in Section VII, paragraph B, above.
4. Marketing Expenses.
E-NET shall submit a marketing expense report for
ZeroPlus.com attributed to the Conjoined Service.
5. External Carrier and Market Associates.
E-NET shall report to IXC the names of, and fully disclose
applicable contracts with, its third party carriers and
Market Associates for ZeroPlus.com that are not attributed
to the Conjoined Service, as well as report the Gross
Revenue from ZeroPlus.com that is attributed to such third
party carriers and Market Associates, for the purpose of
allowing IXC to monitor E-NET's compliance with the default
vendor and exclusivity provisions hereunder.
B. Revenue Sharing Elements Provided by IXC.
As a result of the revenue sharing elements seen in Section VII A,
above, IXC shall make a best effort to provide the following
information to E-NET no later than the 15th day of the month
following the end of the previous calendar month.
1. Total Collocation & Bandwidth Usage Report.
IXC will report to E-NET total collocation charges &
bandwidth usage and charges associated with the E-NET server
components located in IXC co-location spaces.
2. Off-Net Termination Report.
IXC will report to E-NET total number of minutes terminated
off-net and the cost associated with this termination.
3. Equipment Lease Report.
IXC will report to E-NET the total expense associated with
equipment leased to E-NET pursuant to this Agreement.
C. Settlement of Qualifying Net Revenue Calculation.
Both IXC and E-NET will calculate Qualifying Net Revenue
applicable to this Agreement no later than one week from the
exchange of data as defined in paragraphs A and B, above. Using
the calculation found in Section VII, above, both parties will
jointly agree upon the amount of Qualifying Net Revenue under this
Agreement. Any
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disagreement that cannot be resolved within thirty (30) days from
the date of submission of the data outlined above between the
parties will be eligible for arbitration proceeding as defined in
this Agreement after the parties have conducted good faith
negotiations to resolve the disputed issues.
D. Other Service Parameters.
Both parties agree to deliver no later than the 15th of the month
following the close of the previous period, a detailed analysis of
the following parameters.
1. Service Level Agreement Information.
All parameters defined in Section VII must be reported to
the other party in monthly, and year-to-date formats.
2. Customer Care Information.
Hold times, call volumes, and total e-mail notices received
shall be reported in standard professional formats.
3. In addition, E-NET shall report the following other
operational statistics about the Conjoined Service such as:
a. Collections Information,
b. Subscriber Summary Information, and
c. Other Business Indicators.
E. Other Parameters.
Since IXC and E-NET will most likely require other additional
information to evaluate this Agreement's performance, both sides
will furnish other relevant information as deemed reasonably
necessary to fulfill this Agreement.
F. Audit.
Upon reasonable prior written notice from either party to the
other, the other party will, within three (3) business days of its
receipt of such notice, provide the requesting party with
reasonable access to and the right to examine the information and
records (including original traffic logs) relied upon in preparing
any submission required under either this Section or Section VII,
including, but not limited to, supporting documentation for
disputed costs or charges and information related to compliance
with the default vendor and carrier exclusivity provisions
hereunder, at the premises of the audited party; provided,
however, that any such review by either party shall be at the
requesting party's expense and shall be undertaken without undue
disruption of the other party's normal operations.
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X. ENGINEERING PROVISIONS.
Both parties agree to jointly engineer the Conjoined Service in a manner
that shall provide a scalable, robust, and easily maintainable service.
As part of this Agreement, E-NET shall retain the primary ownership of
driving engineering requirements for the Conjoined Service. Any disputes
shall be associated with the arbitration mechanism defined herein after
the parties have conducted good faith negotiations to resolve the
disputed issues.
XI. EQUITY RIGHTS.
A. Equity Rights.
E-NET hereby grants IXC Internet Services, Inc. ("Internet")
the right to acquire up to such number of shares of E-NET's
common stock equal to one (1) share less than twenty percent
(20%) of the outstanding shares of E-NET common stock (the
"Call Right") after giving effect to the issuance of the
shares of E-NET common stock to Internet pursuant to the Call
Right on the date that Internet exercises the Call Right (the
"Call Right Exercise Date") at a per share price equal to the
closing price of a share of common stock of E-NET as reported
on the Nasdaq SmallCap Market ("NSM") on the last trading day
prior to the Call Right Exercise Date, subject to a minimum
per share price of one and one-fourth (1.25) times the closing
price of a share of common stock of E-NET as reported on the
NSM on the Effective Date (the "Minimum Price") and a maximum
per share price of $7.50 per share (the "Maximum Price"). In
the event of any change in the capitalization of E-NET
affecting its common stock (e.g., a stock split, reverse stock
split, stock dividend, recapitalization, combination, or
reclassification) on or after the Effective Date, a
corresponding adjustment in the Minimum Price and Maximum
Price shall be made. In addition, in the event after the
Effective Date and prior to the issuance of shares to Internet
pursuant to the Call Right the shares of common stock of E-NET
have been changed into or exchanged for a different number or
kind of shares or other securities through any issuance,
reorganization, recapitalization, reclassification, merger,
consolidation, share exchange or similar transaction, than a
proportionate adjustment in the number (and in the Minimum
Price and Maximum Price) and an appropriate adjustment in the
kind of securities issuable pursuant to the Call Right shall
be made. Internet or its designee may exercise the Call Right
by payment to E-NET of the purchase price therefor during the
period beginning from the Effective Date until the earlier of
(i) thirty (30) days after the closing date of Cincinnati
Bell's acquisition of IXC or (ii) January 31, 2000.
The Call Right Exercise Date shall be the date Internet gives
E-NET written notice (the "Call Right Notice") of its exercise
of the Call Right, at which time the exercise price shall be
determined as indicated above. Internet (or its designee)
shall have up to 30 days following the Call Right Exercise
Date (45 days in the
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event Internet exercises the Call Right for less than all of
the shares subject thereto) to deliver the exercise price for
the shares of E-NET common stock specified in the Call Right
Notice at which time E-NET shall deliver to Internet (or its
designee) a stock certificate representing such shares. In the
event Internet exercises the Call Right for less than all of
the shares subject thereto, the parties shall have 15 days
from E-NET's receipt of the Call Right Notice to conclude good
faith negotiations regarding exclusivity, as indicated in
Section VII Paragraph K.
B. Registration Rights.
E-NET will, if requested by Internet at any time one hundred
and eighty (180) days after the Call Right Exercise Date and
from time to time thereafter until three (3) years after the
Call Right Exercise Date, as expeditiously as possible prepare
and file up to three (3) registration statements under the
Securities Act of 1933, as amended (the "Securities Act") if
such registration is necessary in order to permit the sale or
other disposition of any or all shares or securities that have
been acquired by or are issuable to Internet upon exercise of
the Call Right in accordance with the intended method of sale
or other disposition stated by Internet, including a "shelf"
registration statement under Rule 415 under the Securities Act
or any successor provision, and E-NET will use its best
efforts to qualify such shares or other securities under any
applicable state securities laws and to cause such shares to
be listed on such exchanges or otherwise designated for
trading in the same manner as similar securities issued by
E-NET are then listed or designated. E-NET will use its best
efforts to cause each such registration statement to become
effective, to obtain all consents or waivers of other parties
which are required therefor, and to keep such registration
statement effective for such period not in excess of one
hundred and twenty (120) calendar days from the day such
registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition.
Any registration statement prepared and/or filed under this
Section, and any sale covered thereby, will be at E-NET's
expense except for underwriting discounts or commissions,
brokers' fees and the fees and disbursements of Internet's
counsel related thereto. Internet will provide all information
reasonably requested by E-NET for inclusion in any
registration statement to be filed hereunder.
If, during the time period referred to in the first sentence
of this Section, E-NET effects a registration under the
Securities Act of E-NET common stock for its own account or
for any other stockholders of E-NET (other than on Form S-4 or
Form S-8, or any successor form), it will allow Internet the
right to participate in such registration, and such
participation will not affect the obligation of E-NET to
effect demand registration statements for Internet under this
Section; provided that, if the managing underwriters of such
offering advise E-NET in writing that in their opinion the
number of shares of E-NET common stock requested to be
included in such registration exceeds the number which can be
sold in such
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offering, E-NET will include the shares requested to be
included therein by Internet pro rata with the shares intended
to be included therein by E-NET. In connection with any
registration pursuant to this Section, E-NET and Internet will
provide each other and any underwriter of the offering with
customary representations, warranties, covenants,
indemnification, and contribution in connection with such
registration.
Notwithstanding the other provisions hereof, (i) E-NET may
postpone the filing of a registration statement for an
additional period of up to one hundred and eighty 180 days if
such postponement is necessary to avoid the necessity of
preparing audited financial statements as of a date other than
the end of a fiscal year or (ii) the obligations of E-NET
hereunder to file a registration statement may be suspended
for up to one hundred and twenty (120) days in the aggregate
if the Board of Directors of E-NET shall have determined that
the filing of such registration statement would require
premature disclosure of material nonpublic information that
would materially and adversely affect E-NET or otherwise
interfere with or adversely affect any pending or proposed
offering of common stock of E-NET or any other material
transaction involving E-NET. Notwithstanding the other
provisions hereof, E-NET shall not be obligated to file any
registration statement pursuant hereto (i) if E-NET delivers
to Internet an opinion of qualified counsel, selected by E-NET
(with such opinion also addressed to, delivered to, and
acceptable to E-NET's transfer agent), that under the
circumstances in which Internet contemplates selling its E-NET
shares an exemption from registration under the Securities
Act, including but not limited to the exemption provided by
assuming compliance with the conditions stated in Rule 144
(except paragraph (c) of Rule 144), is available (Internet
shall cooperate with E-NET and its counsel in investigating
and assessing the availability of any such exemption), (ii) if
E-NET has previously filed a registration statement pursuant
hereto during the most recent twelve-month period, provided
that such registration statement either became effective or
was withdrawn before becoming effective at the request of
Internet; (iii) during the period (the "Lock-Up Period")
commencing with the date of filing of a registration statement
under the Securities Act pertaining to an underwritten public
offering of securities to be sold solely by or for the account
of E-NET and ending 180 days after the effective date of such
registration statement, provided that during such period E-NET
in good faith uses reasonable efforts to cause such
registration statement to become effective and to complete the
public offering covered by such registration statement
provided further that the Lock-Up Period shall be reduced to
the extent any other insider of E-NET has agreed to lock-up
its shares of E-NET common stock for a lesser period in
connection with such public offering.
XII. TERMINATION.
A. Extended Losses & Failure to Make Payment.
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If either party incurs cumulative Losses which extend beyond the
end of the calendar year 2000, or if off-net calling is not
established by June 30, 2000, and such failures remain uncured
after thirty (30) days' written notice by either party to the
other, the party(s) providing such written notice may, in addition
to such other rights or remedies that either party may have under
this Agreement, at law or in equity, terminate this Agreement upon
thirty (30) days' notice to the other as defined in Section XXII,
"Notices".
If E-NET fails to make any payment required hereunder to IXC and
such failure remains uncured after ten (10) days written notice,
IXC may, subject to Section IX and in addition to such other
rights or remedies that IXC may have under this Agreement, at law
or in equity, terminate this Agreement upon thirty (30) days'
notice to E-NET as defined in Section XXII, "Notices".
B. Failure to Meet Service Level Agreements.
Failure on the part of either party to meet Service Level
agreements (as defined in Appendix C) after thirty (30) days'
written notice and opportunity to cure is also grounds for
termination by the other party.
C. Default Termination.
Upon any Event of Default (as hereinafter defined), either party
may, upon written notice to the defaulting party (the "Defaulting
Party"), terminate this Agreement without liability to the
Defaulting Party for such termination. Each of the following
constitutes an Event of Default: (i) an admission by the
Defaulting Party of an inability to pay its debts, (ii) the
entering into by the Defaulting Party of a composition or
arrangement with its creditors, (iii) the appointment of a trustee
or receiver, with or without consent, for the Defaulting Party or
all or any substantial part of its property, (iv) the filing of a
petition for relief by or against the Defaulting Party under the
Bankruptcy Code or any similar federal or state statute now or
hereafter in effect, (v) failure on the part of either party to
remedy a major service disruption of the Conjoined Service within
thirty (30) days of notification of the other party of such a
disruption (for purposes of this paragraph C, a major service
disruption shall mean any condition in which ten percent (10%) or
more of the end users of the Conjoined Service are experiencing a
major degradation or interruption of ZeroPlus.com caused by
defects or deficiencies in either the facilities or areas of
responsibility of an identifiable party to this Agreement), (vi) a
failure by IXC or E-NET on three (3) or more occasions occurring
within any ninety (90) day period to respond to requests by the
other party for technical support services within a reasonable
timeframe, or (vii) failure by the Defaulting Party to perform any
material obligation imposed upon it by or pursuant to this
Agreement not otherwise detailed in this Section XII, provided
that such breach is not corrected within thirty (30) days after
written notice to the Defaulting Party specifying the nature of
such breach or such longer period as may be required to correct
such breach, if, within said thirty
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(30) days, the Defaulting Party shall commence the correction
of such breach and thereafter diligently pursue the correction
thereof.
D. EARLY TERMINATION FOR REGULATORY REASONS.
This Agreement shall terminate automatically, and without
liability or further obligation of either party to the other in
the event termination is required or mandated by any federal or
state law, rule, or regulation, or valid order of a court of
competent jurisdiction (including, without limitation, the
application of any restrictions which may be applicable to E-NET
or its affiliates or IXC or its affiliates pursuant to the
Communications Act of 1934, as amended, the Telecommunications Act
of 1996, and the rules and regulations of the FCC promulgated,
from time to time, in connection therewith (as subsequently
modified and interpreted from time to time). In the event that the
offering or provisioning of any particular Conjoined Service
hereunder requires either party to procure any necessary
authorization from any state or federal authority, including the
FCC, the parties shall in good faith negotiate the course of
action to be taken with respect to such procurement, including any
appropriate sharing or reimbursement of applicable costs. Nothing
herein shall be construed to require either E-NET or IXC to seek a
waiver of any law, rule, regulation, or restriction, or to seek
judicial review or appeal of any court order, or to file, or
abstain from filing, any particular tariff or amendment to any
tariff.
XIII. OTHER TERMINATION CONSIDERATIONS
In the event that IXC directs E-NET to purchase the equipment leased
hereunder upon termination of this Agreement and pursuant to Section
VI(A), both parties agree to handle the resolution of provisions herein
as follows:
A. E-NET shall pay IXC in full within ten (10) days of termination of
this Agreement for the equipment leased hereunder in accordance
with the equipment lease obligations set out in Section VI.
B. Upon receipt of such payment in full for the equipment, the
parties shall coordinate the removal of such equipment from IXC's
facilities in a commercially reasonable manner.
XIV. OWNERSHIP AND PROPRIETARY RIGHTS
A. OWNERSHIP. All rights, title and interest in each party's Products
shall at all times remain the exclusive property of the respective
party. All applicable copyrights, trade secrets, patents,
processes and other intellectual property rights in each party's
Products shall remain the exclusive property of the respective
party. No title to any Products shall be transferred under this
Agreement by a party to the other party. Neither party shall
remove or alter the copyright, trademark and propriety rights
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notices of the other party, and each shall prohibit any such
removal or alteration by its officers, agents, employees, and
contractors from any materials of the other.
Unless otherwise agreed in writing, any Product, service or
process developed by IXC as a result of the Conjoined Service
shall belong to IXC. Any Product, service or process developed by
E-NET as a result of the Conjoined Service shall belong to E-NET.
B. PROPRIETARY RIGHTS. Both parties acknowledge that their respective
Products are proprietary and confidential and constitute valuable
trade secrets. Each party agrees to safeguard the other party's
Products with not less than the same degree of care as is
exercised in connection with its own most proprietary and
confidential materials.
All aspects of each party's respective financial, cost and revenue
data and Products, including without limitation, programs, methods
of processing, specific design and structure of individual
programs, their interaction, and unique programming techniques
employed therein, if any, shall remain the sole and exclusive
property of their respective owner, and shall not be used, sold,
revealed, disclosed or otherwise communicated, directly or
indirectly, by the other party to any person, company, or
institution other than as set forth herein. The safeguards
established in this Section shall not prohibit (i) such technical
and business development communications, Product demonstrations,
and detailed technical discussions as deemed reasonably necessary
to perform the Conjoined Service duties described herein, either
between the parties or with third parties if consented to between
the parties; or (ii) use of a party's Products in the intended
operational environment, where the operation of the same may be
observed by persons other than the parties and their officers,
agents, employees, and contractors.
C. USE OF LOGOS & TRADEMARKS. NEITHER PARTY SHALL DISTRIBUTE TO THIRD
PARTIES ANY MATERIALS, INFORMATION OR WRITINGS DESCRIBING THE
PRODUCTS OR SERVICES OF THE OTHER, OR USE ANY LOGOS, TRADEMARKS,
SERVICE MARKS, TRADE NAMES, OR THE COMPANY NAME OF THE OTHER PARTY
WITHOUT THE OTHER PARTY'S PRIOR WRITTEN CONSENT.
XV. PUBLICITY.
Any and all publicity or disclosure of any kind whatsoever with regard to
this Agreement and/or the transactions contemplated hereby shall be
determined by the parties based upon mutual agreement and approval signed
in writing by both parties, which approval shall not be unreasonably
withheld or delayed by either party, except that any disclosures required
to be made by a party under any applicable federal or state securities
laws shall not require approval of the other party. Notwithstanding the
foregoing, E-NET shall cooperate with IXC to obtain a protective order or
request confidential treatment with respect to any terms of this
Agreement and/or the transactions contemplated hereby as requested by IXC
in any filing with the Securities and Exchange Commission, any other
governmental authority, or any securities exchange or stock market. In
the event that any publicity or disclosure generates inquiries into the
nature of this Agreement, the relationship between the parties
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hereto, the resulting financial prospects of either party pursuant to
this Agreement, or any other related inquiry, IXC and E-NET each may, in
such respective party's sole discretion, designate a single
"public/investor relations" contact for their respective companies to
facilitate all such inquiries and generate any appropriate responses.
XVI. INDEPENDENT CONTRACTORS.
IXC and E-NET shall at all times be, and represent themselves to be,
solely independent contractors each acting on their own account in all
transactions involving this Agreement. Nothing in this Agreement shall be
construed to make either party (or any person employed by either party)
an employee of the other party. Neither party shall have any authority to
bind or commit the other party in any respect or to accept legal process
on behalf of the other party. Without limiting the generality of the
foregoing, neither party shall be liable to any agent, subcontractor,
supplier, employee, or customer of the other party for any commission,
compensation, remuneration, benefit, damage, or claim of any nature
whatsoever. It is not the intention of the parties to create, nor shall
this Agreement be construed as creating, a joint venture or other
partnership or association or render the parties liable as joint
venturers or partners.
XVII. YEAR 2000 COMPLIANCE.
Each party represents that its software, hardware, equipment and services
will operate on and after January 1, 2000, in the same manner, and with
the same functionality, as the same would and do on or before December
31, 1999. Each party represents that its monitoring and maintenance
capabilities accommodate the four-digit data field requirement for the
year 2000 and beyond and will lose no functionality with respect to the
introduction of records containing dates falling on or after January 1,
2000.
XVIII. INSURANCE AND INDEMNITY.
A. Insurance. Throughout the term of this Agreement and any extension
thereof, each party shall maintain and, upon written request,
shall provide to the other proof of Worker's Compensation coverage
with statutory limits and adequate comprehensive general liability
insurance with a limit of not less than one million dollars
($1,000,000) per occurrence for bodily injury liability and
property damage liability, including coverage extensions for
blanket contractual liability, personal injury liability and
products and completed operations liability.
B. Indemnity
1. To the fullest extent permitted by law and subject to
Section XXI, below, each party shall indemnify, defend,
release and hold harmless the other party and all of its
officers, agents, directors, shareholders, subcontractors,
subsidiaries,
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employees and other affiliates (collectively "Affiliates")
from and against any action, claim, court cost, damage,
demand, expense, liability, loss, penalty, proceeding or
suit, (collectively, together with related attorneys' fees;
including costs and disbursements, referred to as "Claims")
imposed upon either party by reason of damages to property
or injuries, including death, as a result of an intentional
or a negligent act or omission on the part of the
indemnifying party or any of its Affiliates in connection
with: (i) the performance of this Agreement; or (ii) other
activities relating to the property or facilities which are
the subject of this Agreement, whether or not the Claims
result from a sole negligent act or omission on the part of
the indemnifying party, whether the Claims result from the
concurrent negligent act or omission on the part of both
parties, or whether the Claims result from the negligent
act or omission of the indemnifying party and some other
third party. In the event a Claim relates to the negligence
of both parties, the relative burden of the Claim shall be
attributed equitably between the parties in accordance with
the principles of comparative negligence.
2. In the event any action shall be brought against the
indemnified party, such party shall immediately notify the
indemnifying party in writing, and the indemnifying party,
upon the request of the indemnified party, shall assume the
defense thereof on behalf of the indemnified party and its
Affiliates and shall pay all expenses and satisfy all
judgments which may be incurred by or rendered against the
indemnified party or its Affiliates in connection therewith,
provided that the indemnified party shall not be liable for
any settlement of any such action effected without its
written consent.
3. Notwithstanding the termination of this Agreement for any
reason, this indemnity Section shall survive such
termination.
XIX. PATENT, COPYRIGHT AND TRADE SECRET INDEMNIFICATION.
The parties represent and warrant to each other that their software,
firmware, hardware, equipment, products, and any other items provided
pursuant to this Agreement (collectively, the "Products"), when properly
used as contemplated herein, will not infringe or misappropriate any
copyright, trademark, patent, or the trade secrets of any third party.
Either party shall defend and hold the other harmless from any and all
damages, settlements, attorneys' fees and expenses related to any claim
of infringement or misappropriation by its Products of any copyright,
trademark, or patent, or the trade secret of any third party, provided
either party is promptly notified by the other of any and all threats,
claims and proceedings related thereto and given reasonable opportunity
to assume sole control over defense and settlement.
XX. DISPUTE RESOLUTION
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A. The parties will attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement promptly through
discussions between themselves at the operational level. Upon the request
of either party, a meeting between the parties' respective points of
contact (or substitute designee) shall be scheduled within seven (7) days
of such request. In the event a resolution cannot be reached, such
controversy or claim shall be negotiated between appointed counsel or
senior executives of the parties who have authority to settle the
controversy.
B. The disputing party shall give the other party written notice of the
dispute. If the parties fail to resolve such controversy or claim within
thirty (30) days of the disputing party's notice, either party may seek
arbitration as set forth below.
C. Any controversy or claim arising out of or relating to this Agreement, or
a breach of this Agreement, shall be finally settled by arbitration in
Austin, Texas and shall be resolved under the laws of the State of Texas.
The arbitration shall be conducted before a single arbitrator in
accordance with the commercial rules and practices of the American
Arbitration Association then in effect.
D. The arbitrator shall have the power to order specific performance if
requested. Any award, order, or judgment pursuant to such arbitration
shall be deemed final and binding and may be enforced in any court of
competent jurisdiction. The parties agree that the arbitrator shall have
no power or authority to make awards or issue orders of any kind except
as expressly permitted by this Agreement, and in no event shall the
arbitrator have the authority to make any award that provides for
punitive or exemplary damages. All such arbitration proceedings shall be
conducted on a confidential basis. The arbitrator may, as part of the
arbitration award, permit the substantially prevailing party to recover
all or part of its attorneys' fees and other out-of-pocket costs incurred
in connection with such arbitration.
E. No arbitration proceeding or legal action, regardless of its form,
related to or arising out of this Agreement, its making, performance or
interpretation, may be brought by either party more than two (2) years
after the cause of action first accrued.
XXI. DISCLAIMERS & LIMITATION OF REMEDIES.
A. The Parties' Mutual & Reciprocal Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IN NO EVENT SHALL
EITHER PARTY OR ITS AGENTS, REPRESENTATIVES OR EMPLOYEES BE LIABLE
TO THE OTHER PARTY, or ITS AGENTS,
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REPRESENTATIVES, EMPLOYEES, CUSTOMERS OR ANY THIRD PARTY, AND THE
PARTIES HEREBY WAIVE THE RIGHT TO CLAIM, ANY INDIRECT,
CONSEQUENTIAL, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES, OF ANY
KIND OR NATURE WHATSOEVER, DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO A BREACH OF THIS AGREEMENT, REGARDLESS OF THE FORM
OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE),
STRICT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT SUCH DAMAGES
WERE FORESEEN OR UNFORESEEN, EVEN IF EITHER PARTY HAS BEEN ADVISED
OF THE POSSIBILITY THEREOF. EITHER PARTY'S MAXIMUM AND SOLE
LIABILITY, IF ANY, TO THE OTHER PARTY SHALL IN NO EVENT EXCEED
FIFTY PERCENT (50%) of THE TOTAL AMOUNT OF GROSS REVENUE, AS
DEFINED IN THIS AGREEMENT, FOR THE SERVICES AND PRODUCTS DELIVERED
pursuant to THIS AGREEMENT.
B. E-NET'S AND IXC'S LIMITATION OF LIABILITY.
EFFECTIVE OCTOBER 1, 1999, BOTH PARTIES SHALL INCLUDE IN THEIR
CONTRACTS WITH A MARKET ASSOCIATE A PROVISION SUBSTANTIALLY
CONSISTENT WITH THE FOLLOWING LANGUAGE, ALL OF WHICH SHALL BE IN
CAPITAL LETTERS, AND NO LANGUAGE INCONSISTENT THEREWITH (PROVIDED,
HOWEVER, THAT WITH RESPECT TO CONTRACTS EXECUTED PRIOR TO OCTOBER
1, 1999, THE PARTIES SHALL HAVE UNTIL NOVEMBER 1, 1999 TO CAUSE
SUCH CONTRACTS TO INCLUDE SUCH LANGUAGE):
"In no event shall either E-NET, INC. ("e-net"), as provider of
INTERNET TELEPHONY SERVICES KNOWN AS ZEROPLUS.COM, or IXC
Communication Services, Inc. ("IXC"), as PROVIDER of any services
which support zeroplus.com (zeroplus.com AND such supporting
services are HEREINAFTER COLLECTIVELY REFERRED TO AS THE
"SERVICES"), BE LIABLE FOR, AND (MARKET ASSOCIATE'S NAME HERE)
("MARKET ASSOCIATE") HEREBY WAIVES THE RIGHT TO CLAIM, ANY
INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING
LOST PROFITS) DIRECTLY OR INDIRECTLY RELATING TO OR ARISING OUT OF
THE BREACH OF THIS CONTRACT, OR MARKET ASSOCIATE'S INABILITY, OR
THAT OF ANY OF ITS MEMBERS, CUSTOMERS, OR END USERS HEREUNDER, TO
USE THE SERVICES OR ANY PART THEREOF, EITHER SEPARATELY OR IN
COMBINATION WITH OTHER SERVICES, PERFORMED OR NOT PERFORMED UNDER
THIS CONTRACT, OR FOR ANY OR ALL LOSS OR DAMAGE DIRECTLY OR
INDIRECTLY RELATING TO OR ARISING OUT OF A THIRD PARTY'S
UNAUTHORIZED ACCESS TO MARKET ASSOCIATE'S DATA, OR THAT OF ANY OF
ITS MEMBERS, CUSTOMERS, OR END USERS HEREUNDER, TRANSMITTED OVER
OR VIA THE SERVICES, REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR
OTHERWISE, AND WHETHER OR NOT SUCH DAMAGES WERE FORESEEN OR
UNFORESEEN, EVEN IF E-NET OR IXC HAVE BEEN ADVISED OF THE
POSSIBILITY THEREOF. E-NET'S
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AND IXC'S MAXIMUM AND SOLE COLLECTIVE LIABILITY, IF ANY, TO MARKET
ASSOCIATE OR ANY OF ITS MEMBERS, CUSTOMERS, OR END USERS
HEREUNDER, SHALL IN NO EVENT EXCEED THE TOTAL AMOUNT OF THE
CHARGES BILLED BY E-NET TO MARKET ASSOCIATE OR ANY OF ITS MEMBERS,
CUSTOMERS, OR END USERS FOR THE SERVICES AND PRODUCTS PROVIDED
PURSUANT TO THIS CONTRACT. Market Associate shall include in its
contract, if any, with any of its Market Associates, members,
customers or end users a provision substantially consistent with
the aforementioned language, all of which shall be in capital
letters, and no language inconsistent therewith."
XXII. MISCELLANEOUS PROVISIONS.
A. Governing Law. This Agreement shall be deemed to have been entered
into and shall be governed by and construed in accordance with the
laws of the State of Texas without regard to its principles of
choice of law.
B. No Waiver. Any failure or delay by either party in exercising any
right or remedy shall not constitute a waiver. The parties may at
any time waive any of the provisions of this Agreement, but any
such waivers shall be reduced to writing and duly executed and
delivered by duly authorized representatives of the parties
hereto.
C. Severability. If any provision of this Agreement shall be invalid
or unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entirety of this Agreement,
but rather, unless a failure of consideration would result, the
entirety of this Agreement shall be construed as if not containing
the particular invalid or unenforceable provision, and the rights
and obligations of the parties shall be construed and enforced
accordingly.
D. Force Majeure. Neither party shall be liable to the other party,
its customers or any other third party for any failure of
performance hereunder due to causes beyond its reasonable control,
including, but not limited to: acts of God, fire, explosion,
vandalism, cable cut, storm or other similar catastrophes; any
law, order, regulation, direction, action or request of the United
States government, or of any other government, including state and
local governments having jurisdiction over either of the parties,
or of any department, agency, commission, court, bureau,
corporation or other instrumentality of any one or more of said
governments, or of any civil or military authority; national
emergencies; insurrections; riots; wars; or strikes, lock outs,
work stoppages or other labor difficulties.
E. Entire Agreement. This Agreement, including the Signature Page,
the General Terms & Conditions, any Appendices and documents
incorporated herein by reference or attached hereto, constitutes
the entire and exclusive statement of Agreement between the
parties with respect to its subject matter and there are merged
herein all prior and
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collateral representations, promises, and conditions in connection
with the subject matter hereof. Any representation, promise, or
condition not incorporated herein shall not be binding upon either
party and this Agreement supersedes and is in lieu of all prior or
contemporaneous agreements or arrangements between the parties
with respect to the subject matter hereof. This Agreement may be
modified only by a writing signed by a duly authorized
representative of each party.
F. Failure to Assert a Right. The failure of either party to enforce
at any time any of the provisions of this Agreement shall not
constitute or be construed to be a waiver of such provisions or of
the right of such party thereafter to enforce any such provisions.
G. Assignment. Neither party hereto may assign this Agreement without
the prior written consent of the other party, and any such
attempted assignment shall be void and without effect.
Notwithstanding the foregoing, this Agreement may be assigned to
an affiliate or to any third party acquiring substantially all of
the assets of either of the parties provided such entity agrees in
writing, which is delivered to the other party within thirty (30)
days of the date of such assignment or delegation, to be bound by
and perform in accordance with this Agreement as if it were an
original party hereto.
H. Compliance with Export/Technology Laws. Both E-NET and IXC shall
comply with the export laws and regulations of the United States
relating to the export of Products and technical data originating
in the United States. Such compliance includes restrictions on
providing technical data to certain foreign nationals within the
United States.
I. Notices. All notices and other formal communications hereunder
shall be in writing and shall be deemed to have been duly given as
of the date of delivery or confirmed legible facsimile
transmission. If mailed, notice shall be sent first class postage
prepaid, certified or registered mail, return receipt requested
and becomes effective upon confirmed delivery. Notices will be
delivered or sent to the parties' respective addresses set forth
on the Signature Page of this Agreement to the attention of the
following persons:
IF TO IXC:
Attention: Dominick DeAngelo, Senior Vice President, Marketing and
Product Services
with copy to:
Attention: Legal Department: General Counsel
Fax: 512-328-7902
IF TO ENET:
Attention: Director of Contracts
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J. Designated Points of Contact. For communications other than
notices and other formal communications, the following shall be
the designated points of contact:
IXC PRIMARY CONTACT:
John Stritzinger
Phone:(302) 283-2800
Fax: (302) 283-2801
IXC ALTERNATE CONTACT:
Geoff Heath
Phone:(302) 283-2800
Fax: (302) 283-2801
E-NET PRIMARY CONTACT:
Don Shoff
Phone:(301) 601-8700 Ext 205
Fax: (301) 601-3221
E-NET ALTERNATE CONTACT:
Christina Swisher
Phone:(888)-FON-ENET Ext. 212
Fax: (301) 601-8777
K. No Third Party Beneficiaries. Except as may be otherwise
specifically provided in this Agreement, this Agreement is not
intended to and shall not confer upon any other person or business
entity, other than the parties hereto, any rights or remedies with
respect to the subject matter hereof.
L. Execution in Counterparts. This Agreement may be executed in any
number of counterpart copies, each of which shall be deemed an
original, but which taken together shall constitute a single
instrument. The parties expressly authorize the use of facsimile
counterparts, as a valid method of execution; however, the parties
agree to cooperate in good faith to provide each other with a
fully executed original of this Agreement within five (5) calendar
days of any facsimile counterpart execution.
M. Headings. All section and paragraph headings and captions used
herein and in the Appendices attached hereto are for the
convenience of the parties only and shall not be part of the text
hereof or deemed in any way to limit or affect the meaning of this
Agreement.
N. Subcontractors. Both parties expressly reserve the right to
subcontract performance of the services to qualified agents and
subcontractors. Each party warrants to the other that personnel
assigned to provide services will have the requisite expertise to
perform the ordered services and the work performed hereunder
shall conform to all applicable industry standards.
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O. Successors. This Agreement shall inure to the benefit of, and be
binding upon, E-NET and IXC, their successors and assigns provided
such entity agrees in writing, delivered to the other party within
thirty (30) days of the date of such assignment or delegation, to
be bound by and perform in accordance with this Agreement as if it
were an original party hereto.
P. Survival. The terms, conditions and warranties contained in this
Agreement that by their sense and context are intended to survive
the performance hereof by either or both parties hereunder, shall
so survive the completion of performance or termination of this
Agreement.
XXIII. PERFORMANCE REVIEW AND IMPROVEMENT MEETINGS
The parties agree that during the first year of this Agreement,
management reviews will be conducted every ninety (90) days to evaluate
the performance of this Agreement by each of the parties. All outstanding
issues will be discussed and the parties will seek to resolve any
outstanding problems to the mutual satisfaction of both parties. Action
plans shall be agreed, in writing, to address specific issues that have
arisen and may in the future arise. After the first year, performance of
this Agreement will be reviewed on a bi-annual basis. Each party shall
promptly report to the other recurring Product defects or problems and
keep each other informed of end user complaints.
Review Meetings will specifically discuss the following joint operating
issues:
1. SLA Performance (As Defined in Appendix C)
2. IXC Network Cost Elements
3. E-NET Expense Analysis
4. Joint Engineering Topics
5. Customer Service Satisfaction Elements
6. Revenue Sharing Performance
7. Provided that the exclusivity provisions of Section VII(H) are in
effect, any proposed third party carrier contracts or exceptions
to default vendor/exclusive carrier provisions
XXIV. NON-SOLICITATION.
E-NET agrees that throughout the duration of this Agreement and for one
(1) year following expiration or termination of this Agreement, E-NET
will not target IXC end users or engage in marketing aimed specifically
at IXC end users, for the purpose of persuading such end users to
transfer services provided by IXC to E-NET. This provision shall not,
however, prohibit E-NET from engaging in general marketing and promotion
of its service or other businesses, or prohibit E-NET from accepting
service business from IXC end users.
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XXV. ORDER OF PRECEDENCE.
The Appendices attached hereto and incorporated herein are to read in
conjunction with these General Terms & Conditions and the Signature Page.
Where similar provisions are contained in the Appendices, these General
Terms & Conditions and the Signature Page, they are intended to
supplement one another. In the event of a conflict between or among the
provisions of this Agreement, the conflict shall be resolved by giving
precedence in the following order:
1. Revenue Sharing, Service Development, and Joint Marketing Alliance
Agreement General Terms & Conditions.
2. Signature Page.
3. Appendices, with no particular order of precedence assigned
between or among any of the various Appendices.
APPENDIX A
ZEROPLUS.COM/IXC JOINT PRODUCT DESCRIPTION (IXC FORMAT)
PRODUCT/SERVICE DESCRIPTION
On June 22, 1999, ZeroPlus.com, Inc., a wholly owned subsidiary of e-Net,
Inc., unveiled a revolutionary Internet phone service. The service allows
users to make free long distance phone calls from PC to PC, by dialing a
"0" plus 10 digits, similar to the way phone calls are made on the
traditional phone network. The goal of this service is to make Internet
telephony easy to use, so that mainstream users of the Internet begin to
use the Internet for phone service.
While the initial service offering calls for PC to PC service, future
offerings will allow users to call from a PC to a regular phone, and
ultimately from phone to phone and phone to PC. This will be the first
service to truly and seamlessly integrate the Public Switched Telephone
Network (PSTN) and the Internet for voice communications.
APPENDIX B.
CUSTOMER SERVICE MODEL & SCOPE OF WORK
I. CUSTOMER SERVICE MODEL.
The customer service model with be made of three (3) levels of customer
support.
a) Level One (1) will provide the following:
o Entering customer information into trouble ticket system.
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o Identification of customer problem/issue.
o Resolution of Level One (1) problem/issue.
o Notification of resolution or escalation to the customer.
o Escalation of customer problem/issue to Level Two (2) support if
unable to resolve.
b) Level Two (2) will provide the following:
o Identification of customer problem/issue.
o Resolution of Level Two (2) problem/issue.
o Notification of resolution or escalation to the customer.
o Escalation of customer problem/issue to Level Three (3) support if
unable to resolve and determination is made that problem is not
related to client software or gatekeeper software.
*Determination of other than Level Two (2) problem
must be made within two hours from original customer
call.
c) Level Three (3) will provide the following:
o Identification of customer problem/issue.
o Resolution of Level Three (3) problem/issue.
o Notification of resolution to customer and E-NET customer service.
*Resolution of Level Three (3) problem/issue must
occur within 4 hours of escalation.
II E-NET RESPONSIBILITIES
a) E-NET will provide Level One (1) customer service support. This would
include, but not limited to entering customer information into customer
service system and generating a "trouble ticket", and preliminary
trouble-shooting (i.e....password changes or forgotten user id).
b) E-NET will provide Level Two (2) customer service support. This would
include determination of problems that corrected by Level One (1)
support, and also resolution of problems relating to E-NET client
software or gatekeeper software.
c) If problem is other than Level One (1) or Level Two (2), E-NET must
identify type of problem within two (2) hours of initial customer call
and notify IXC NOC to address resolution. IXC will then assume
ownership of the customer call and will determine exact problem and
correct within four (4) hours of original call from E-NET customer
service.
III. IXC RESPONSIBILITIES
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a) IXC will provide Level Three (3) customer service support. IXC will be
required to determine the exact problem and resolve within four (4)
hours of original call from E-NET customer service. IXC representative
will contact E-NET when problem resolution has occurred.
b) IXC NOC will monitor all gateway servers associated with the joint
E-NET/IXC effort.
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APPENDIX C
SERVICE LEVEL AGREEMENTS
SERVICE LEVEL AGREEMENT (SLA) SUGGESTIONS:
E-NET SERVICE
------------------------------------- ----------------------------------- -----------------------------------
SLA CATEGORY BUSINESS HOUR COVERAGE 24 X 7 COVERAGE
(8:00 AM TO 8:00 PM, M-F)
------------------------------------- ----------------------------------- -----------------------------------
e-mail Support for Basic Mean time response e-mailed Mean time response e-mailed
Subscribers within 20 hours within 2 hours
------------------------------------- ----------------------------------- -----------------------------------
e-mail Support for Extended Mean time response e-mailed Mean time response e-mailed
Subscribers within 20 hours within 1 hour
------------------------------------- ----------------------------------- -----------------------------------
Limited Telephone Support for Mean time response return Mean time on hold less than 5
Extended Subscribers telephone call within 1 hour for minutes
calls outside business hour
coverage
------------------------------------- ----------------------------------- -----------------------------------
Mean time on hold less than 5
minutes for calls inside business
hour coverage
------------------------------------- ----------------------------------- -----------------------------------
Note: E-NET is currently supporting an existing external customer and its own
internal products on a business hour coverage basis and will require some time,
as well as funds, to ramp-up to a full 24x7 coverage capability. 24x7 coverage
capability is for extended service.
IXC SERVICE
------------------------------------- ----------------------------------- -----------------------------------
SLA CATEGORY BUSINESS HOUR COVERAGE 24 X 7 COVERAGE
(8:00 AM TO 8:00 PM)
------------------------------------- ----------------------------------- -----------------------------------
Server & IT Operations Support N/A Mean time return to service for
non-hardware related outages is
within 4 hours
(Within 30 minutes of
notification unresolved outages
are automatically escalated to
Level III support for resolution).
------------------------------------- ----------------------------------- -----------------------------------
Note: IXC is assumed to be currently supporting existing external customers and
its own internal products on a full 24x7 coverage capability.
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APPENDIX D
MASTER SERVICE AGREEMENT
This Agreement for telecommunications services is made as of the date of last
execution below (the "Effective Date") and entered into by and between IXC
COMMUNICATIONS SERVICES, INC., a Delaware corporation with its principal place
of business at 1122 Capital of Texas Hwy. South, Austin, Texas 78746-6426
("Supplier"), and , a corporation with its principal place of business at
("Customer").
WHEREAS, Customer desires to obtain telecommunications services as described
below (the "Service") from Supplier, and Supplier is willing to provide the
Service for the rates attached hereto.
NOW, THEREFORE, Customer and Supplier hereby mutually agree as follows:
CREDIT REQUIREMENTS:
Supplier agrees to provide and Customer agrees to purchase Service(s) indicated
below. A Service Supplement for each Service Type checked is attached hereto and
incorporated herein. All Services ordered under this Agreement are subject to
credit approval.
SERVICE TYPE:
SWITCHED SERVICE: BROADBAND SERVICE:
_______________ Xclusive _______________ ATM
_______________ Xnet LATA _______________ Frame Relay
_______________ Xnet LEx _______________ Virtual Private Line
_______________ Network Management Services (NNI)
IXPLUS SERVICE: _______________ Training
_______________ Retail Billing
_______________ Back Office INTERNET SERVICE:
_______________ Internet Service Provider
PRIVATE LINE SERVICE: _______________ Telecommunications Provider
_______________ Digital / Optical _______________ Data Collocation & Bandwidth
CUSTOMER INTERFACE: CUSTOMER PREMISE EQUIPMENT:
_______________ Rack Space & Power _______________ CPE Services
(Collocation)
This Agreement, including any terms and conditions, addenda, schedules, riders,
supplements or exhibits which are attached hereto and incorporated herein,
constitutes the entire agreement (the "Agreement") by Supplier and Customer
pertaining to the subject matter(s) hereof and supersedes all prior and
contemporaneous agreements and understandings in connection herewith.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date last
written below.
IXC COMMUNICATIONS SERVICES, INC.
BY: BY:
------------------------------- -------------------------------
NAME: NAME:
----------------------------- -----------------------------
TITLE: TITLE:
---------------------------- ----------------------------
DATE: DATE:
----------------------------- -----------------------------
FULL BUSINESS ADDRESS: FULL BUSINESS ADDRESS:
1122 CAPITAL OF TEXAS HWY. SOUTH
AUSTIN, TEXAS 78746-6426
TELEPHONE: 512-427-3700 TELEPHONE:
FACSIMILE: 512-328-7902 FACSIMILE:
BILLING CONTACT:
------------------
TELEPHONE:
------------------------
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1. PAYMENT TERMS. Invoices for Services are due and payable in U.S.
dollars within thirty (30) days of Customer's receipt of invoice
(unless otherwise indicated in the Credit Requirements Supplement),
without demand or set off by Customer. Payments not received within
thirty (30) days of Customer's receipt of invoice are considered past
due. In addition to Supplier undertaking any of the actions set forth
in this Agreement, if any invoice is not paid when due: (i) a late
charge shall accrue equal to 1-1/2% (or the maximum legal rate, if
less) of the unpaid balance per month; (ii) Supplier may require a
Security Deposit or other forms of security acceptable to Supplier;
and/or (iii) Supplier may take any action in connection with any other
right or remedy Supplier may have under this Agreement in law or in
equity.
2. BILLING DISPUTES. If Customer in good faith disputes any portion of any
Supplier invoice, Customer shall submit to Supplier, within thirty (30)
days following Customer's receipt of the invoice full payment of the
undisputed portion of the invoice and written documentation identifying
and substantiating the disputed amount. If Customer does not report a
dispute within thirty (30) days following Customer's receipt of an
invoice, Customer shall have waived its dispute rights for that
invoice. Supplier and Customer agree to use their respective best
efforts to resolve any dispute within thirty (30) days after Supplier
receives written notice of the dispute from Customer. Any disputed
amounts resolved in favor of Customer shall be credited to Customer's
account on the next invoice following resolution of the dispute. Any
disputed amounts determined to be payable to Supplier shall be due
within ten (10) days of the resolution of the dispute.
Any dispute arising out of or relating to this Agreement which has not
been resolved by the good faith efforts of the parties will be settled
by binding arbitration conducted expeditiously in accordance with
Section 14.
3. ADDITIONAL ASSURANCES. If at any time during the term of this Agreement
there is a material and adverse change in Customer's financial
condition or business prospects, which shall be determined by Supplier
in its sole and absolute discretion, then Supplier may demand that
Customer deposit with Supplier a security deposit or increase the
amount of deposit (the "Security Deposit"), as the case may be,
pursuant to Supplier's standard terms and conditions, as security for
the full and faithful performance of Customer of the terms, conditions
and covenants of this Agreement; provided, however, that in no event
shall the amount of the Security Deposit ever exceed two (2) months'
estimated Usage Charges and other amounts payable by Customer to
Supplier hereunder.
4. CERTIFICATION. Customer hereby represents and warrants that it is
certified to do business in all jurisdictions in which it conducts
business and is in good standing in all such jurisdictions. Customer
further represents and warrants that it is certified by the proper
regulatory agencies to provide interstate, intrastate and international
long distance services to End-Users in those jurisdictions where such
services are to be provided by Customer. Customer shall keep current
during the term of this Agreement, copies of its Certificates of Public
Convenience and Necessity or similar documents certifying Customer's
interstate, intrastate, or international operating authority in any
local, state, or federal jurisdiction (collectively, "Service
Compliance Certificates") and furnish copies thereof to Supplier within
ten (10) days of written request by Supplier. Supplier reserves the
right to refuse or withhold Service in any jurisdiction in which
Customer's Service Compliance Certificate has not been furnished to
Supplier in a timely manner. Customer shall defend and indemnify
Supplier from any losses, expenses, demands and claims in connection
with Customer's failure to provide Supplier with such Service
Compliance Certificates. Such indemnification includes costs and
expenses (including reasonable attorney's fees) incurred by Supplier in
settling, defending or appealing any claims or actions brought against
it relating to Customer's failure to provide such Service Compliance
Certificates.
5. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the validity and performance hereof, shall be
governed by the laws of the State of Texas without regard to its
principles of choice of law.
6. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given as of the date of
delivery or confirmed facsimile transmission. If mailed, notice shall
be sent first class postage prepaid, certified or registered mail,
return receipt requested and becomes effective upon confirmed delivery.
Notices will be delivered or sent to the parties' respective addresses
set forth on the signature page of this Agreement to the attention of
the following persons:
IF TO SUPPLIER:
Attention: Contract Administration
IF TO CUSTOMER:
Attention:
--------------------------------------
7. WAIVER OF BREACH OR VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provision of this
Agreement shall not operate as or be construed to be a waiver of any
subsequent breach hereof.
8. BANKRUPTCY. In the event of the bankruptcy or insolvency of either
party hereto or if either party hereto shall make an assignment for the
benefit of creditors or take advantage of any act or law for relief of
debtors, the other party to this Agreement shall have the right to
terminate this Agreement without further obligation or liability on its
part.
9. BUSINESS RELATIONSHIP. This Agreement shall not create any agency,
employment, joint venture, partnership, representation, or fiduciary
relationship between the parties. Neither party shall have the
authority to, nor shall any party attempt to, create any obligation on
behalf of the other party.
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10. INDEMNITY.
A. Each party shall indemnify, defend, release and hold harmless the
other party and all of its officers, agents, directors, shareholders,
subcontractors, subsidiaries, employees and other affiliates
(collectively "Affiliates") from and against any action, claim, court
cost, damage, demand, expense, liability, loss, penalty, proceeding or
suit, (collectively, together with related attorneys' fees; including
costs and disbursements, "Claims") imposed upon either party by reason
of damages to property or injuries, including death, as a result of an
intentional or a negligent act or omission on the part of the
indemnifying party or any of its Affiliates in connection with: (i) the
performance of this Agreement; or (ii) other activities relating to the
property or facilities which are the subject of this Agreement, whether
or not the Claims result from a sole negligent act or omission on the
part of the indemnifying party, whether the Claims result from the
concurrent negligent act or omission on the part of both parties, or
whether the Claims result from the negligent act or omission of the
indemnifying party and some other third party. In the event a Claim
relates to the negligence of both parties, the relative burden of the
Claim shall be attributed equitably between the parties in accordance
with the principles of comparative negligence.
B. In the event any action shall be brought against the indemnified
party, such party shall immediately notify the indemnifying party in
writing, and the indemnifying party, upon the request of the
indemnified party, shall assume the defense thereof on behalf of the
indemnified party and its Affiliates and shall pay all expenses and
satisfy all judgments which may be incurred by or rendered against the
indemnified party or its Affiliates in connection therewith, provided
that the indemnified party shall not be liable for any settlement of
any such action effected without its written consent.
C. Notwithstanding the termination of this Agreement for any reason,
this Section 10 shall survive such termination.
11. INSURANCE. Throughout the term of this Agreement and any extension
thereof, each party shall maintain and, upon written request, shall
provide to the other proof of adequate comprehensive general liability
insurance with a limit of not less than $1,000,000 per occurrence for
bodily injury liability and property damage liability, including
coverage extensions for blanket contractual liability, personal injury
liability and products and completed operations liability.
12. AUTHORIZED USE OF SUPPLIER NAME. Without Supplier's prior written
consent, Customer shall not: (i) refer to itself as an authorized
representative of Supplier in promotional, advertising or other
materials; or (ii) use Supplier's logos, trade marks, service marks,
carrier identification codes (CICs) or any variations thereof in any of
its promotional, advertising or other materials or in any activity
using or displaying Supplier's name or the Services to be provided by
Supplier. Customer agrees to change or correct, at Customer's expense,
any such material or activity which Supplier, in its sole judgment,
determines to be inaccurate, misleading or otherwise objectionable in
relation to using or marketing Supplier's services. Customer is
explicitly authorized to only use the following statements in its sales
literature: (i) "Customer utilizes the Supplier's network"; (ii)
"Customer utilizes Supplier's facilities"; (iii) "Supplier provides
only the network facilities"; and (iv) "Supplier is our network
services provider".
13. ASSIGNMENT. Neither party hereto may assign this Agreement without the
express written consent of the other party hereto, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing: (i) a
security interest in this Agreement may be granted by Supplier to any
lender to secure borrowings by Supplier or any of its Affiliates
(herein defined as any entity controlled by, in control of, or under
common control with the assigning party hereunder); (ii) either party
may assign all its rights and obligations hereunder to any Affiliate;
and (iii) any subsidiary of Supplier may assign any amounts due from
Customer under any Supplement to Supplier for billing purposes.
14. BINDING ARBITRATION. The parties will attempt in good faith to resolve
any controversy or claim arising out of or relating to this Agreement
promptly through discussions between themselves at the operational
level. In the event a resolution cannot be reached, such controversy or
claim shall be negotiated between appointed counsel or senior
executives of the parties who have authority to settle the controversy.
The disputing party shall give the other party written notice of the
dispute. If the parties fail to resolve such controversy or claim
within thirty (30) days of the disputing party's notice, either party
may seek arbitration as set forth below.
Any controversy or claim arising out of or relating to this Agreement,
or a breach of this Agreement, shall be finally settled by arbitration
in Austin, Texas and shall be resolved under the laws of the State of
Texas. The arbitration shall be conducted before a single arbitrator in
accordance with the commercial rules and practices of the American
Arbitration Association then in effect.
The arbitrator shall have the power to order specific performance if
requested. Any award, order, or judgment pursuant to such arbitration
shall be deemed final and binding and may be enforced in any court of
competent jurisdiction. The parties agree that the arbitrator shall
have no power or authority to make awards or issue orders of any kind
except as expressly permitted by this Agreement, and in no event shall
the arbitrator have the authority to make any award that provides for
punitive or exemplary damages. All such arbitration proceedings shall
be conducted on a confidential basis. The arbitrator may, as part of
the arbitration award, permit the substantially prevailing party to
recover all or part of its attorney's fees and other out-of-pocket
costs incurred in connection with such arbitration. Customer may, at
its option, continue to accept what it considers to be below-standard
Services and pay the charges hereunder relating thereto during such
pendency of such arbitration, without prejudice thereto.
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15. LEGAL CONSTRUCTION. In the event one or more of the provisions
contained in this Agreement shall, for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
In the event of any conflict between the provisions of these
Terms & Conditions and the applicable Supplement and Exhibits,
the conflict shall be resolved by reference to the following order
of priority of interpretation: a) Exhibits; b) Supplement; and
c) Terms & Conditions. Notwithstanding the foregoing no Exhibit
requiring execution shall be binding unless and until such Exhibit
has been executed by an authorized officer of Customer.
16. NO PERSONAL LIABILITY. Each action or claim of any party arising under
or relating to this Agreement shall be made only against the other
party as a corporation, and any liability relating thereto shall be
enforceable only against the corporate assets of such party. No party
shall seek to pierce the corporate veil or otherwise seek to impose any
liability relating to, or arising from, this Agreement against any
shareholder, employee, officer or director of the other party. Each of
such persons is an intended beneficiary of the mutual promises set
forth in this Section and shall be entitled to enforce the obligations
of this Section.
17. NOTICE OF BREACH OF AGREEMENT. To be effective, written notice of any
material breach (except Payment Default) must prominently contain the
following sentences in capital letters: "THIS IS FORMAL NOTICE OF A
BREACH OF CONTRACT. FAILURE TO CURE SUCH BREACH WILL HAVE SIGNIFICANT
LEGAL CONSEQUENCES."
18. LIMITATION OF LIABILITY. Supplier's liability arising out of delays in
restoration of the Services to be provided under this Agreement or out
of mistakes, accidents, omissions, interruptions, or errors or defects
in transmission in the provision of Services or any other
telecommunications services, shall be subject to the limitations set
forth below and in the applicable Tariff |
