EXHIBIT 10.24
SERVICE BUREAU AGREEMENT
Xxxxxxx:
XXXXXXX SYSTEMS INC. Effective Date: September 30, 1998
One Van de Graaff Drive Term of Agreement: 39 months
Xxxxxxxxxx, XX 00000
Customer:
CHOICE ONE COMMUNICATIONS INC.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxx, XX 00000
CHOICE ONE COMMUNICATIONS INC. (the "Customer") agrees to purchase and
XXXXXXX SYSTEMS INC. ("Xxxxxxx") agrees to furnish on the following terms and
conditions the Services described herein.
1. INTERPRETATION
1.1 Definitions
Unless otherwise defined, the words and phrases defined in this
Agreement shall have the meanings ascribed to them herein, and the following
words and terms shall have the respective meanings ascribed to them as follows:
(a) "Base Software" means Xxxxxxx'x Convergent Billing Platform (CBP)
AS/400 billing and record keeping computer software in existence at the date of
this Agreement, but not less than Release 3.2.2, and includes any Maintenance
Release (including Release 3.5 no later than when such release is first provided
to any other customer of Xxxxxxx) used on behalf of Customer.
(b) "Business Day" means any day excepting a statutory holiday in the
Province of Ontario, Canada, which holidays are set forth in Schedule E attached
hereto, or a Saturday or a Sunday.
(c) "Confidential Information" means all information marked
"confidential", "restricted" or "proprietary" by either party and information
disclosed orally, visually or otherwise by either party which is considered
proprietary by such party and delivered to the party receiving such proprietary
information, including, without limitation, source codes, other Software owned
or licensed to, or used by either party, security measures adopted or used by
either party, data processing ideas, techniques, concepts, know-how, Customer
Data, and business practices which are proprietary and confidential to either
party and the terms and conditions of this Agreement and all Schedules hereto.
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(d) "Critical Operation Problems" means problems with the delivery of
the Services that will likely have a material negative financial impact to the
Customer if not resolved and that must be resolved on an expedited basis.
(e) "Customer Data" means all data and information, however recorded,
provided to Xxxxxxx by Customer to enable Xxxxxxx to provide Services under this
Agreement and includes computer databases and computer related data.
(f) "Customer Site" means the site owned, controlled or leased by
Customer at which the Customer Systems are located. The Customer Site is
presently located at the address first written above. Customer may add, delete
or change Customer Sites in the United States with Xxxxxxx'x prior written
consent, which consent shall not be unreasonably withheld or delayed.
(g) "Customer Systems" means the computer facilities of Customer and
includes all Software and Equipment including all minicomputers, front-end
processors, workstations, computers, terminals, local area network ("LAN")
servers and associated peripheral equipment, lines and cabling used for data
communication between the Customer Site and the Data Center or any third party
necessary to the solution.
(h) "Data Center" means the data center of Xxxxxxx described in
Schedule A.
(i) "Effective Date" in relation to this Agreement means the date first
written above.
(j) "End-User" or "End-Users" means any person or persons that Customer
has authorized to access any part of the Host System.
(k) "Equipment" means all equipment, hardware, computers and devices,
whether for use for data processing or to provide telecommunications services,
tools and associated operating system Software.
(l) "Host System" means the IBM AS/400 computer and related operating
system software, peripherals, and communications equipment used by Xxxxxxx at
the Data Center to provide Processing Services under this Agreement.
(m) "Hours of Service" means 6:00 a.m. to midnight Eastern Standard
Time or Eastern Daylight Time, as applicable, 365 days per year during which the
Host System will be available to End Users in accordance with the Service Levels
agreed to by the Customer and Xxxxxxx.
(n) "Maintenance Release" means any updates, changes, modifications, or
enhancements made to the Base Software by Xxxxxxx that are made generally
available to customers of Xxxxxxx at no additional charge, under Xxxxxxx'x
maintenance program and any correction of a documented Programming Error made
specifically for Customer.
(o) "Message" or "Messages" means the Customer Data representing
billable or non-billable telecommunication or other services, such as long
distance messages contained on the message toll tapes or other media received
from time to time from Customer.
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(p) "Processing Services" means the services described in Schedule A
under the heading "Processing Services".
(q) "Programming Error" means any error in the Base Software that
materially and adversely affects the operation of the Base Software due to a
failure of the Base Software to conform to the Specifications therefor.
(r) "Xxxxxxx Consulting Rates" means the applicable rates and charges
established by Xxxxxxx from time to time for the provision of services. Such
rates and charges will increase no more than eight percent (8%) per calendar
year and will not exceed the rates charged by Xxxxxxx to its most favored
customer in the United States who purchases similar services, in similar
quantities, under similar circumstances.
(s) "Service Levels" means the service levels for Processing Services
specified in Schedule B, as amended from time to time as provided for in this
Agreement.
(t) "Services" means the Processing Services, Support Services,
Technical Services and such other services as Xxxxxxx shall perform or be
required to perform under this Agreement, as more fully described on Schedule A,
but not including Software Development Services.
(u) "Software" means computer programs and related documentation and
includes application programs, operating system programs, utilities, templates,
parameter tables and settings, interfaces to external programs, tools, program
related data, and local area network management software and related
documentation.
(y) "Software Development Services" means the services described in
Schedule C attached to this Agreement.
(w) "Specifications" means, the associated user and operations
documentation for the Base Software.
(x) "Support Services" means the services described in Schedule A under
the heading "Support Services".
(y) "Technical Services" means the services described in Schedule A
under the heading "Technical Services".
(z) "Initial Network" means the five (5) switch network to be used by
Customer to support its initial entry into the marketplace, with such network
and markets to be confirmed during the Specification Study to be performed under
the Customization Agreement.
(aa) "Future Network" means that network which Customer may put into
place to address new markets, which network shall not include any switch that is
or was used in the Initial Network until such time as may be permitted under
Section 8.3(a) hereof.
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1.2 Incorporation of Schedules
(a) The following Schedules (the "Schedules"), annexed hereto, are
incorporated in this Agreement and are deemed to be a part hereof:
Schedule A - Services Description
Schedule B - Service Levels
Schedule C - Customization Services Agreement
Schedule D - Pricing
Schedule E - Ontario Holidays
(b) The parties intend that Schedules will be amended and updated as
necessary or appropriate during the term of this Agreement.
2. PROVISION OF SERVICES
2.1 Services
During the term of this Agreement, Xxxxxxx will provide Customer and
Customer will obtain from Xxxxxxx the Services, subject to the provisions
hereof.
2.2 Documentation
Xxxxxxx agrees to supply Customer with three (3) copies of the
Specifications for the Base Software for use in connection with the Processing
Services. Customer may make a reasonable number of copies of the Specifications
for its internal use subject to the confidentiality provisions hereof.
2.3 Capacity Planning
From time to time, Customer and Xxxxxxx shall meet to review issues
pertaining to capacity planning. Customer will use reasonable efforts to provide
Xxxxxxx with projections concerning future traffic volumes, number of customers,
and number of Messages to be processed.
2.4 Software Development Services
Software Development Services will not be performed by Xxxxxxx unless
and until Xxxxxxx and Customer enter into a separate written Customization
Services Agreement in the form which is attached as Schedule C hereto.
2.5 Customer Responsibilities
Subject to the provisions of Schedules A or B, or any other written
agreement between the parties, Customer also agrees to:
(a) provide support and training to End Users;
(b) provide Customer Data to Xxxxxxx in a form and pursuant to a
schedule to be mutually agreed to by the parties;
(c) follow standards and security procedures reasonably required by
Xxxxxxx for the turnover of Customer Data to the Data Center as furnished by
Xxxxxxx;
(d) not make any changes to the Customer Systems which may affect the
delivery of the Services or Service Levels;
(e) be responsible for creation and administration of application-level
user access and password management security programs, and comply with Xxxxxxx
security procedures regarding same; and
(f) provide all paper forms and supplies required to provide the output
services described in Schedule A.
(g) select, provide, operate, configure, support and maintain the
Customer Systems.
2.6 Customer Assistance
Customer shall assist Xxxxxxx in the performance of the Services by
making available an Equipment, Software, documentation, Customer Data,
information and personnel reasonably required by Xxxxxxx on a timely basis.
Customer shall also ensure that those of its personnel who are assigned to
assist Xxxxxxx are familiar with Customer's requirements and have the expertise
and capabilities necessary to permit Xxxxxxx to undertake and complete the
Services.
2.7 Security of Data
During the term of this Agreement, Xxxxxxx agrees to use security
measures as such measures exist as at the Effective Date in respect of the
facilities at the Data Center used to deliver the Processing Services, or such
other measures as Xxxxxxx determines will improve security in respect of such
facilities. All Xxxxxxx data centers currently have card controlled security
access and are manned seven (7) days a week twenty-four (24) hours per day.
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All Customer Data is also duplicated off site for additional security.
Disaster recovery services shall be provided by a nationally recognized provider
(i.e., Comdisco).
2.8 Inspection by Customer
Subject to Xxxxxxx'x reasonable access, security, and confidentiality
requirements, Customer shall have the right to make visits to the Data Center to
review security measures relating to Customer Data, with reasonable prior
written notice during normal business hours. If deficiencies are identified by
Customer, Xxxxxxx shall implement such additional security practices as Xxxxxxx,
after due consideration, deems necessary or desirable to eliminate such
deficiencies.
2.9 Records
Xxxxxxx will keep, in accordance with U.S. generally accepted
accounting principles, books and records pertaining to the Processing Services
(the "Service Records"). Xxxxxxx shall preserve the Service Records for a period
of three (3) years after the expiration or termination of this Agreement.
Xxxxxxx agrees, upon request of Customer, to permit Customer to have access to
the Service Records on Business Days, not more than four (4) times in any
calendar year, on five (5) days' prior written notice, to determine the adequacy
and accuracy thereof. Customer's right to inspect any year's Service Records
shall continue for a period of two (2) years following the end of the year for
which those records relate. All costs associated with such audit and storage
shall be the responsibility of Customer. Notwithstanding the foregoing, Xxxxxxx
shall be entitled to provide copies of the Service Records in a mutually agreed
to format to Customer following the expiration or termination of this Agreement.
Upon doing so, Xxxxxxx shall have no further obligations to Customer under this
Section.
2.10 Changes
At any time during the term of this Agreement, Customer or Xxxxxxx may
request changes by submitting such requests in writing. Within a reasonable
time, but in any event not more than fifteen (15) days after receiving written
notice of a Customer request Xxxxxxx will advise Customer whether the change can
be made and the effect the change will have on this Agreement. Within a like
period after receiving Xxxxxxx'x request for a change, Customer will notify
Xxxxxxx whether it authorizes the implementation of the change under the revised
terms or rejects the change proposed. Pending authorization to implement
changes, Xxxxxxx shall proceed in accordance with the latest authorized terms of
this Agreement. However, notwithstanding the foregoing, Xxxxxxx shall implement
changes on an equitable basis if such change requests are reasonably requested
by Customer, are within the general scope of Services and do not increase
Xxxxxxx'x costs in providing the Services, unless Customer agrees to pay all
such increased costs.
3. PRICE AND PAYMENT
3.1 Price
Other than charges relating to Software Development Services, which
shall be governed by the Customization Services Agreement attached hereto as
Exhibit C, if and when executed, Customer agrees to pay Xxxxxxx'x transaction
fees for the Services pursuant to Schedule D hereto,
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including any minimums provided therein. If Customer requests Xxxxxxx to
provide Services at a place other than Xxxxxxx'x premises, then Customer shall
be responsible for and shall reimburse Xxxxxxx for all travel (coach class),
lodging, meals and other reasonable out-of-pocket expenses incurred by Xxxxxxx.
3.2 Invoicing
(a) Any payments due Xxxxxxx from Customer will be invoiced and
will be due and payable thirty (30) days after Customer's
receipt of such invoice, which may be sent by facsimile and
deemed received with confirmed answerback. If payment is
delayed by Customer, other than in accordance with Section
3.2(b) below, Xxxxxxx shall be entitled to charge interest at
a rate equal to the lesser of: (i) eighteen (18%) per annum;
or (ii) the maximum lawful interest rate under applicable law.
(b) All payments under this Agreement shall be made in U.S.
Dollars, and Customer shall have the right to withhold
payments for any amounts under dispute by Customer, but shall
pay any other amounts invoiced that are not in dispute. If
such dispute is resolved in favor of Xxxxxxx, Customer shall
pay interest on such disputed amount from the date it
originally became due until the date it is paid to Xxxxxxx at
a rate equal to the lesser of (i) eighteen percent (18%) per
annum; or (ii) the maximum lawful interest rate under
applicable law.
3.3 Estimated Price
Where an estimated price is specified, it is not warranted by Xxxxxxx,
and it represents Xxxxxxx'x commercially reasonable efforts, based on
information made available, to estimate the Services which will be required to
accomplish the tasks described.
3.4 Accountability
Whenever a Xxxxxxx charge is to be based on Xxxxxxx'x cost (such as
pass-through expenses), Xxxxxxx will provide to Customer, if so requested,
information and documentation sufficient to substantiate Xxxxxxx'x costs with
respect to such charge.
3.5 Proration
All periodic charges are to be computed on a calendar month basis, and
will be prorated for any partial month, unless specifically stated otherwise.
3.6 Taxes
Prices are exclusive of all taxes and Customer shall pay any sales,
use, goods and services, personal property, consumption, value-added or other
tax and any duties or tariffs that may be assessed whether based upon the
delivery, possession, sale or use of the Services or otherwise, except for tax
based on the income of Xxxxxxx.
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4. OWNERSHIP
All Customer Data, Customer Systems and Customer's Confidential
Information shall be and remain the property of Customer. The Base Software,
Host System, and Xxxxxxx'x Confidential Information shall be and remain the
property of Xxxxxxx.
5. CONFIDENTIAL INFORMATION
5.1 Confidential Obligation
Each party acknowledges that Confidential Information will be exchanged
between the parties in the course of performance of the Services hereunder. Each
party shall use no less than the same means it uses to protect its similar
confidential and proprietary information, but in any event not less than
commercially reasonable means, to prevent the disclosure and to protect the
confidentiality of the Confidential Information of the other party. Except as
otherwise provided herein, each party agrees that it will not use the
Confidential Information of the other party except for the purposes of this
Agreement and will not disclose such Confidential Information or make it
available to third persons other than to its full-time employees or consultants
having a need for access to such Confidential Information in connection with
their employment with such party and with respect to whom such party takes
steps, no less rigorous than those it takes to protect its own proprietary
information, but in any event not less than commercially reasonable means, to
prevent such employees from acting in a manner inconsistent with the terms of
this Agreement.
5.2 Publicly Known Information
Section 5.1 shall not prevent either party from disclosing or using
Confidential Information which is (i) already known by the recipient party
without an obligation of confidentiality, provided that the recipient party can
establish that such information was already known to the recipient party, (ii)
publicly known or becomes publicly known through no unauthorized act of the
recipient party, (iii) rightfully received from a third person, (iv)
independently developed by the recipient party without use of the other party's
Confidential Information, provided that the recipient party can establish that
the applicable Confidential Information was independently developed by the
recipient party without use of the other party's Confidential Information, (v)
approved by the other party for disclosure, or (vi) required to be disclosed
pursuant to a requirement of a governmental agency, regulation or law so long as
the disclosing party provides the other party with notice of such requirement as
soon as practicable prior to any such disclosure.
5.3 Return of Confidential Information
Upon written request or at the termination or expiration of this
Agreement, each party will return to the other all documents and information and
all copies thereof, however recorded, including but not limited to drawings,
specifications, descriptions, or other papers, tapes, or any other media marked
or stamped as being confidential, which contain any of the other's Confidential
Information.
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5.4 Third Party Information
Each party agrees not to disclose or deliver to the other any
proprietary, confidential, secret or private information or intellectual
property (including any Software) of any third person which it is under a duty
or has contracted not to disclose, without the prior written consent of such
third person.
5.5 Loss of Confidential Information
In the event of any unauthorized disclosure or loss of, or inability to
account for, Confidential Information of the furnishing party, the receiving
party will notify the furnishing party promptly.
5.6 Right to Perform Services for Others
Customer recognizes that Xxxxxxx is in the business of providing
computer and information technology services and may perform services for other
persons similar to the Services. Xxxxxxx retains the right to use, and nothing
shall prevent Xxxxxxx from using, the ideas, concepts, methods, processes,
know-how, organization, techniques or any Software or Equipment owned, leased or
licensed by Xxxxxxx in providing services to any third person, provided no
Confidential Information of Customer is made available or released to such third
person, except as may be allowed under Section 5.2.
5.7 Enforcement of Confidentiality Obligation
Each of Customer and Xxxxxxx acknowledges and agrees that irreparable
injury may result to the other party if such party breaches the provisions of
this Agreement relating to Confidential Information and that damages may be an
inadequate remedy in respect of such breach. Each party hereby agrees in advance
that, in the event of such breach, the other party shall be entitled, in
addition to such other remedies, damages and relief as may be available under
applicable law, to the granting of injunctive relief in such party's favor.
6. OBLIGATIONS OF CUSTOMER
6.1 Customer Personnel
Customer shall from time to time provide Xxxxxxx with a list of
Customer employees to whom Xxxxxxx may deliver data or information in the
provision of Services.
6.2 Customer Data
Customer shall provide all Customer Data to Xxxxxxx in the manner
prescribed herein, in the Specifications or as the parties may agree. Xxxxxxx
will not be responsible or liable for any loss, damage or inconvenience suffered
by Customer or by any third person arising out of Xxxxxxx'x inability to perform
the Services to the extent due to failure of Customer to provide all necessary
Customer Data when required or by reason of any deficiencies in such Customer:
Data.
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6.3 Space
Customer agrees to provide reasonable facilities and security for
Xxxxxxx Equipment and Software which must reside on Customer premises, at no
charge, and Customer will ensure that Xxxxxxx has sufficient access to such
Equipment and Software. Customer will also provide reasonable work space on
Customer premises for employees of Xxxxxxx who require work space to furnish the
Services under this Agreement.
7. WARRANTIES
7.1 Quality of Services
Xxxxxxx warrants that the Services will be performed by qualified
persons authorized by Xxxxxxx to perform the Services, in a professional,
workmanlike manner, with its reasonable best skill, diligence and care in
accordance with the applicable standards currently recognized in Xxxxxxx'x
profession and industry. To the extent not otherwise set forth herein, Xxxxxxx
shall be solely responsible for all means, methods, and procedures in performing
the Services and for coordinating the performance of all of its obligations
hereunder, whether performed by Xxxxxxx or others under Xxxxxxx'x direction or
control. In performing the Services hereunder, Xxxxxxx shall comply with all
applicable laws, rules, and regulations. Xxxxxxx will use its reasonable best
efforts to minimize any disruption or interference with the Services. For any
breach of this warranty or the failure of Xxxxxxx to perform Services as
required by this Agreement (a "Claim"), Customer's sole and exclusive remedies
and Xxxxxxx'x entire obligations hereunder and under this Agreement shall be to
perform or re-perform the Services that are the subject of the Claim, or, if
Xxxxxxx is unable to re-perform the Services within a reasonable time period, to
provide Customer with a refund of an amount not to exceed the lesser of the
amount paid by Customer for the Services during the last twelve calendar months
or $1,000,000.. The remedies in this Section 7.1 are expressly in lieu of any or
all other remedies which may be available to Customer resulting from the
furnishing, the failure to furnish or the quality of any Service. Xxxxxxx does
not wan-ant the accuracy of any data or information furnished to Customer which
is created from Customer Data or Software supplied by Customer.
7.2 Year 2000 Readiness
Xxxxxxx represents and warrants that the Base Software through which
Xxxxxxx shall provide the Services under this Agreement are designed to be used
prior to, during, and after the calendar year 2000 A.D., and without human
intervention will correctly recognize, calculate, process, sequence, store and
transmit Date Data without error or interruption, including leap years, and
including errors or interruptions from functions which may involve Date Data
from more than one century. The term "Date Data" shall mean any data or input
which includes an indication of or reference to date and that is stored
information and internal to functionality. Date calculations involving either a
single century or multiple centuries will neither cause an abnormal ending nor
generate incorrect or unexpected results. When sorting by date, all records will
be sorted in accurate sequence and when the date is used as a key, records will
be read and written in accurate sequence. As used in the previous sentence,
accurate sequence means, by way of example, that records will be read, written,
and sorted in ascending order so that the year 1999 is before the year 2000. The
Base Software will calculate, process, and display leap year
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information according to the following algorithm: (i) a leap year will have
twenty-nine (29) days in the month of February; and (ii) a leap year occurs in
all years divisible by 400 and all years evenly divisible by 4 and not evenly
divisible by 100.
7.3 Disclaimer
THE WARRANTIES CONTAINED IN THIS AGREEMENT ARE IN LIEU OF ANY OTHER
WARRANTIES OR CONDITIONS EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABLE QUALITY, FITNESS FOR A
PARTICULAR PURPOSE, AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A
COURSE OF DEALING OR USAGE OF TRADE.
7.4 Limit on Liability
(a) FOR BREACH OR DEFAULT BY XXXXXXX OF ANY OF THE PROVISIONS OF THIS
AGREEMENT, XXXXXXX'X ENTIRE LIABILITY, REGARDLESS OF THE FORM OF ACTION, WHETHER
BASED ON CONTRACT OR TORT, INCLUDING, WITHOUT LIMITATION, NEGLIGENCE, OR THE
FURNISHING, THE FAILURE TO FURNISH, OR THE QUALITY OF ANY SERVICE, SHALL IN NO
EVENT EXCEED THE LESSER OF THE AMOUNT PAID BY CUSTOMER FOR THE SERVICES DURING
THE LAST TWELVE CALENDAR MONTHS OR $1,000,000. NOTHING IN THIS AGREEMENT SHALL
EXCLUDE OR RESTRICT SAVIELLE'S LIABILITY FOR DEATH OR PERSONAL INJURY ARISING
FROM EITHER THE NEGLIGENCE OF XXXXXXX OR ITS EMPLOYEES WHILE ACTING IN THE
COURSE OF THEIR EMPLOYMENT.
(b) IN NO EVENT WILL XXXXXXX BE LIABLE FOR DAMAGES HEREUNDER IN RESPECT
OF SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, OR CONSEQUENTIAL LOSS (EVEN IF
XXXXXXX HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS) INCLUDING, BUT NOT
LIMITED, LOST BUSINESS REVENUE, LOSS OF PROFITS, LOSS OF DATA, FAILURE TO
REALIZE EXPECTED PROFITS OR SAVINGS OR OTHER COMMERCIAL OR ECONOMIC LOSS OF ANY
KIND OR ANY CLAIM AGAINST CUSTOMER BY ANY OTHER PERSON.
(c) A party shall not be responsible or liable for any loss, damage or
inconvenience suffered by the other party or by any third person, to the extent
that such loss, damage or inconvenience is caused by the failure of the other
party to comply with its obligations under this Agreement.
7.5 Limitation Period
Neither party may bring an action (other than by Xxxxxxx to collect
charges due hereunder) against the other party arising out of or related to the
Services to be provided under this Agreement more than three (3) years after the
cause of action has arisen.
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8. TERM AND TERMINATION
8.1 Term
The term of this Agreement will commence on the Effective Date and will
continue for the term of Agreement set out on the first page hereof. The
agreement will continue following the expiration of such time period until
terminated by either party by giving the other no less than six (6) months prior
written notice. However, regardless of the reason for any termination or
expiration of this Agreement, Xxxxxxx shall in good faith support the transition
of Customer to a new service provider for not less than 12 months after such
expiration or termination pursuant to Section 8.4 hereof, provided that Customer
pays any applicable transaction fees during such period.
8.2 Termination for Cause
(a) In the event either party:
(i) materially breaches any of its duties, obligations or
responsibilities under this Agreement, unless (A) the breaching party cures such
breach within thirty (30) days after written notice is given to such breaching
party specifying the breach, or, (B) in the event such breach is not so cured,
the breaching party has used best efforts (and no less thm industry standards)
during such 30-day period and thereafter continues to use best efforts to cure
such breach, or
(ii) repeatedly materially breaches any of its duties,
obligations or responsibilities for payment under this Agreement and fails to
cure and cease committing such repeated breaches within thirty (30) days after
being given written notice specifying the breach, or
(iii) commits an Act of Insolvency (as defined below),
then the party not in breach or insolvent as the case may be, may, by promptly
giving notice thereof to the other party, terminate this Agreement as of the
date specified in such notice of termination. Xxxxxxx shall have the right, at
its sole option in lieu of giving notice to terminate this Agreement for cause
under this Section, to delay or suspend its performance of the Services until
such material breach by Customer is remedied.
(b) For the purposes of this Section 8.2, a party shall be deemed to
have committed an Act of Insolvency if (i) a receiver, trustee, administrator,
or administrative receiver should be appointed for the party or its property,
(ii) the party makes an assignment for the benefit of creditors, (iii) any
proceedings should be commenced. Against the party under any bankruptcy,
insolvency, or debtor's relief law, and such proceedings shall not be vacated or
set aside within thirty (30) days from the date of commencement thereof, or (iv)
the party should be liquidated or dissolved.
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8.3 Termination to Enter a License Agreement
(a) At any time on or before September 30, 2000, Customer may notify
Xxxxxxx that it wishes to obtain a license to use the Base Software in a billing
system for the Future Network (the "Future Network System"). Upon such
notification, Xxxxxxx and Customer shall enter into a license agreement for the
Base Software with terms and conditions mutually agreed upon by the parties,
including (i) a license fee based on the total number of subscribers to be
billed through the Future Network System, at Xxxxxxx'x then current published
license fee for such number of subscribers, (ii) payment of such license fee by
Customer at any time on or before September 30, 2000, (iii) a provision stating
that the Future Network System may not be put into production prior to April 1,
2000 (although Customer may use it for testing, development and other
pre-production functions prior to such date), and (iv) a provision stating that
no subscriber on the Initial Network may be billed through the Future Network
System prior to October 1, 2000. Any and all customization services necessary
for the Future Network System shall be developed pursuant to mutually agreed
upon statements of work as Future Software Developments under the Customization
Services Agreement, provided that Xxxxxxx shall provide Customer with a copy of
the Software Developments and Future Software Developments developed for
Customer under the Customization Services Agreement. Upon such notification,
Xxxxxxx and Customer shall also enter a maintenance and support agreement for
the Base Software with terms and conditions mutually agreed upon by the parties,
including a term of thirty six (36) months from a date no earlier than September
30, 2000, at fees equal to Xxxxxxx'x then current fees for providing
maintenance, the fees for the first twelve (12) months of which shall be payable
by Customer at any time on or before September 30, 2000. For the absence of
doubt and provided that the license and maintenance agreements as described
above are executed, (x) Customer shall not pay Service Bureau transaction fees
hereunder for subscribers billed through the Future Network System and (y)
Customer shall pay Service Bureau transaction fees (and no less than the monthly
minimums set forth in Schedule D hereto) in respect of all subscribers and
transactions on the Initial Network until September 30, 2000, at which time
Customer may migrate all subscribers from the Initial Network to the Future
Network System (provided any additional license fee owed in respect of such
additional subscribers is paid), and, notwithstanding Section 8.1, terminate
this Service Bureau Agreement.
(b) Provided Customer has given no notice under Section 8.3(a) above,
on or after October 1, 2000, notwithstanding Section 8.1, Customer may terminate
this Agreement upon thirty (30) days prior written notice to Xxxxxxx provided
that Customer enters into (i) a license agreement for the Base Software with
terms and conditions mutually agreed upon by the parties, including a license
fee based on the total number of subscribers to be billed through the Base
Software, at Xxxxxxx'x then current published license fee for such number of
subscribers, and (ii) a maintenance and support agreement for the Base Software
with terms and conditions mutually agreed upon by the parties, including a term
of thirty six (36) months from the date of the license agreement and fees equal
to Xxxxxxx'x then current fees for providing maintenance. Upon notification by
Customer pursuant to this Section 8.3, Xxxxxxx shall, as soon as practicable,
produce a statement of work setting forth the steps required to convert the
existing service bureau to a Base Software license with all work to be done
relating to such conversion considered Future Software Developments under the
Customization Services Agreement. During this conversion period, Customer may
xxxx end user customers both on the service bureau provided hereunder and under
the license of the Base Software described above, provided that
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Customer pay the applicable service bureau transaction fees provided
hereunder during such conversion period and Customer pays the applicable license
fee within thirty days of the execution of the license agreement described
above.
(c) Upon execution of a license agreement pursuant to Sections 8.3(a)
or 8.3(b) above, Xxxxxxx will designate Customer as a Preferred Beneficiary
under its Master Preferred Software Escrow Agreement with DSI Technology Escrow
Services.
8.4 Termination Assistance
(a) It is the intent of the parties that at the expiration or
termination of this Agreement, regardless of the reason, Xxxxxxx shall cooperate
with Customer and provide Customer with assistance in moving to a substitute
provider to have its message processing performed with minimal disruption.
Therefore, upon any notice of termination or expiration, Xxxxxxx will, to the
extent possible, upon written request by Customer, provide Customer promptly
(and in any event within fourteen (14) days) with a copy of the most recent
Customer Data in its possession in a non-proprietary format agreed to by Xxxxxxx
and Customer or the new service provider, and provide such other services as may
be mutually agreed to by the parties (the "Transitional Services"). Xxxxxxx
shall also inform Customer of the format or organization of the transferred
Customer Data, and no such information shall be considered confidential.
(b) If any Transitional Services require the utilization of additional
resources or cause Xxxxxxx to incur expenses that Xxxxxxx would not otherwise
use or incur, as the case may be, in the performance of this Agreement, Customer
will pay Xxxxxxx for such usage at the then prevailing Xxxxxxx Consulting Rates
and reimburse Xxxxxxx for the expenses incurred. All Transitional Services shall
be provided in accordance with a statement of work to be agreed upon by the
parties in accordance with the Customization Services Agreement.
9. GENERAL
9.1 Headings
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof," "hereunder" and similar expressions in this Agreement
refer to this Agreement and not to any particular Article, Section or other
portion and include any agreement supplemental hereto. Unless something in the
subject matter or context is inconsistent therewith, references herein to
Articles and Sections are to Articles and Sections of this Agreement.
9.2 Extended Meanings
In this Agreement, words importing the singular number only shall
include the plural and vice versa, and words importing persons shall include
individuals, partnerships, associations, trusts, unincorporated organizations
and corporations. The terms provision and provisions in this Agreement refer to
terms, conditions, provisions, covenants, obligations, undertakings, warranties
and representations in this Agreement.
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9.3 Notices
All notices shall be in writing and shall be sent by personal delivery,
by a reputable nationwide overnight courier service prepaid, or by facsimile
with confirmed answerback. Notices shall be sent to the respective addresses set
forth above, attention President, with a copy to General Counsel. Notices shall
be deemed received and effective upon delivery in the case of personal delivery,
on receipt in the case of facsimile, and one day after it is sent via overnight
courier. No change of address shall be binding upon the other party hereto until
written notice thereof is received by such party at the address shown above.
9.4 Accounting Terms
All accounting terms not specifically defined herein shall be construed
in accordance with U.S. generally accepted accounting principles.
9.5 Currency
All references to currency herein are deemed to mean lawful money of
United States unless expressed to be in some other currency.
9.6 Force Majeure
To the extent the performance of this Agreement, or any obligations
hereunder (except the making of payments hereunder) is prevented, restricted, or
interfered with by reason of fire, flood, earthquake, explosion or other
casualty or accident or act of God; strikes or labor disputes; inability to
procure or obtain delivery of parts, supplies, power, Equipment or Software from
suppliers, war or other violence; any law, order proclamation, regulation,
ordinance, demand or requirement of any governmental authority; or any other act
or condition whatsoever beyond the reasonable control of the affected party, the
party so affected, upon giving prompt notice to the other party, shall be
excused from such performance to the extent of such prevention, restriction or
interference; provided, however, that the party so affected shall take all
reasonable steps to avoid or remove such cause of non-performance and shall
resume performance hereunder with dispatch whenever such causes are removed; and
provided further that, in the event such cause is not removed within a period of
two (2) weeks, the other party may terminate this Agreement for cause. Customer
and Xxxxxxx shall make best efforts to comply with the disaster recovery program
to be agreed prior to excusing performance under this Section 9.6.
9.7 Severability
If any provision of this Agreement is declared or found to be illegal,
unenforceable or void, then both parties shall be relieved of all obligations
arising under such provision, but only to the extent that such provision is
illegal, unenforceable or void and does not relate to the payments to be made to
Xxxxxxx. If the remainder of this Agreement shall not be affected by such
declaration or finding and is capable of substantial performance, then each
provision not so affected shall be enforced to the extent permitted by law.
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9.8 Insurance and Risk of Loss
When this Agreement requires performance by Xxxxxxx'x or Customer's
employees on the other party's premises, the performing party shall carry and
maintain worker's compensation and employer's liability insurance covering its
employees engaged in such performance. Each party shall bear the risk of loss or
damage to Equipment and Software of the other while in the care, possession or
control of such party and shall carry insurance against such loss. Each party
shall also carry insurance which is required against losses or damages caused by
the performing party's negligence.
9.9 Assignment
Neither party may, without the other party's prior written consent,
which consent shall not be unreasonably withheld or delayed, assign or transfer
this Agreement, or any of its rights or obligations under this Agreement to any
third person (in this Section, an "Assignee") except to an affiliate wholly
owned by, or that wholly owns, or that is under common control with, such party,
or as part of the sale, merger, or other transaction involving all or
substantially all of the assets of the party, provided that the Assignee
undertakes to the party not making the assignment to fully perform and be bound
by the provisions of this Agreement. Xxxxxxx may delegate to affiliates of
Xxxxxxx and to agents, suppliers and contractors of Xxxxxxx any of the
obligations herein imposed upon Xxxxxxx and Xxxxxxx may disclose to any such
persons any information required by them to perform the duties so delegated to
them, but such delegation shall not relieve Xxxxxxx of its performance
obligations hereunder.
9.10 Waiver
No modification, addition to or waiver of any rights, obligations or
defaults shall be effective unless in writing and signed by the party against
whom the same is sought to be enforced. One or more waivers of any right,
obligation or default shall not be construed as a waiver of any subsequent
right, obligation or default. No delay or failure of Xxxxxxx in exercising any
right hereunder and no partial or single exercise thereof shall be deemed of
itself to constitute a waiver of such right or any other rights hereunder.
9.11 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, excluding its conflict of laws
principles.
9.12 Dispute Resolution
(a) All controversies or claims arising out of or relating to this
Agreement or breach thereof, including any billing dispute (a "Dispute"), shall
be resolved in accordance with the procedures set forth in this Section.
(b) Initially the Dispute shall be referred to the Customer's Vice
President familiar with the Services pursuant to this Agreement and a Xxxxxxx
Vice President to resolve the Dispute.
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(c) In the event that one of the individuals specified above is
unavailable, the Dispute shall be referred to that individual's immediate
superior or designee.
(d) If the Dispute cannot be resolved by such individuals within thirty
(30) days, it shall be finally settled by expedited arbitration by one
arbitrator chosen-by the American Arbitration Association and in accordance with
the commercial arbitration rules of the American Arbitration Association, and
judgments upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereover. The arbitrator shall be ethically neutral and
agree to be bound by the American Bar Association's rules of ethics in this
regard. Both parties shall bear equally the cost of the arbitration (exclusive
of legal fees and expenses, all of which each party shall bear separately). The
place of arbitration shall be Albany, New York and the language of arbitration
will be English.
9.13 Survival
Articles 3, 4, 5, 7, 8 and Sections 2.9, 9.11, 9.12, 9.13, and 9.15
shall survive the expiration or termination of this Agreement.
9.14 Independent Contractor
Xxxxxxx employees shall be deemed not to be at any time employees or
servants of Customer. Xxxxxxx is and shall remain an independent contractor for
all purposes. Unless otherwise agreed to, Xxxxxxx does not undertake to perform
any obligation of Customer, whether regulatory or contractual, or to assume any
responsibility for Customer's business or operations.
9.15 Solicitation of Employees
In the event that either party directly or indirectly hires, whether as
an employee, independent contractor, or in any other capacity, any person who
was, within six months prior to the hiring, an employee of the other party or
any of its subsidiaries, such party agrees to pay the other party a finder's fee
equal to 26 times that employee's bi-weekly gross compensation at the time he or
she left the employment of the other party or its subsidiary. This provision
shall apply only to those employees who either worked on Customer's account in
some capacity or worked with software or applications which were in some fashion
generally similar to any offered or provided to Customer.
9.16 Further Assurances
Each of the parties hereto shall from time to time execute and deliver
all such further documents and instruments and do all acts and things as the
other party may reasonably require to effectively carry out or better evidence
or perfect the full intent and meaning of this Agreement.
9.17 Incorporation of Schedules
Schedules A, B, C, D and E annexed hereto are incorporated in this
Agreement and are deemed to be a part hereof and any references to this
Agreement shall mean this Agreement and include Schedules A, B, C, D and E.
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9.18 English Language
The parties have requested that this Agreement and all communications
and documents relating hereto be expressed in the English language.
9.19 No Relationship
Nothing in this Agreement shall be construed to constitute or create a
joint venture, partnership, or formal business organization of any kind and the
rights and obligations of each party shall be only those expressly set forth
herein. Neither party shall have authority to bind the other, and neither party
assumes any liabilities of the other party.
9.20 Entire Agreement
This Agreement constitutes the entire Agreement between the parties
hereto with respect to the subject matter hereof and cancels and supersedes any
prior understandings and agreements between the parties hereto with respect
thereto. There are no provisions, representations, undertakings, agreements, or
collateral agreements between the parties other than as set out herein and the
parties agree that no obligations or duties not set out expressly herein shall
be imposed upon the parties or implied by law. Unless otherwise agreed to in
writing by the parties, Customer's orders for Services shall be governed by the
terms of this Agreement and nothing contained in any purchase order shall in any
way modify, vary, change or add any term or condition hereto.
9.21 Publicly
All media releases, public announcements and public disclosures by the
parties or their employees or agents relating to this Agreement or its subject
matter, including without limitation widely disbursed promotional or marketing
material, but not including any announcements intended solely for the internal
distribution of either party, or any disclosure required by legal, accounting or
regulatory requirements beyond the reasonable control of either party, shall be
sent in advance to the other party at least five (5) days before it is released.
Any further publicity of substantially the same import need not be sent in
advance to the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of September 30, 1998.
CHOICE ONE COMMUNICATIONS INC. XXXXXXX SYSTEMS INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxxx
Title: Senior Vice President Title: Senior Vice President
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Schedule A
SERVICES DESCRIPTION
Within the scope of this Agreement and the Specifications, Xxxxxxx
shall provide to Customer the following Services:
Processing Services
Support Services
Technical Support Services
1. Processing Services
Processing Services consists of the following:
(a) Data Center Facilities
Xxxxxxx will provide the Data Center and the Host System used for the
message processing described below during the Hours of Service in accordance
with the Service Levels. Customer acknowledges that Xxxxxxx makes no commitments
to any Service Levels outside of the Hours of Service, when Data Center and Host
System availability will be degraded due to backups and other maintenance tasks.
The Data Center will be located in Xxxxxxx, Xxxxxxx, or such other location as
Xxxxxxx shall operate to provide Services to Customer hereunder. Xxxxxxx shall
provide at least thirty (30) days prior written notice of the movement of the
Data Center.
(b) Message Processing
Xxxxxxx shall process Message and Customer Data provided by Customer
using the Host System and the Base Software to meet the call processing, call
rating, billing, customer interface, and audit and control requirements as
agreed between the parties.
(c) Tape and Tape Librarian Operations
Xxxxxxx will retrieve, mount and refile tape library volumes. All
deliveries coming into and leaving the Data Center are logged and will have
proper paperwork attached to facilitate correct delivery and to permit prompt
tracing.
(d) Back-up of Data
Xxxxxxx shall provide backup and recovery of Customer Data as directed
by Customer to protect against damage or loss of integrity to Customer Data.
Xxxxxxx will ship tapes to offsite storage as per Customer's defined procedures.
This is limited to one (1) courier run per day, five (5) days per week. Customer
is responsible for all other tape shipments to and from the Data Center and
related costs.
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(e) Output Production
Output production consists of the output production services as agreed
between the parties. Xxxxxxx shall not provide any pre-printed form stock,
except as may be otherwise provided herein, or be responsible for any
transportation, courier or mail charges associated with the distribution of this
output. Customer is responsible for all report shipments to and from the Data
Center and related costs. Print jobs will be set up, scheduled and processed
according to Customer's specifications.
(f) Service Outages and Changes
Xxxxxxx shall schedule and perform planned service outages outside
Hours of Service. Xxxxxxx shall provide reasonable advance notice to Customer of
planned service outages.
2. Support Services
Support Services, which shall be provided in accordance with mutually
agreed upon Service Levels, consist of the following:
(a) Software Training
Xxxxxxx will provide user application training for the Base Software.
Such training will consist of Xxxxxxx providing employees of Customer with up to
an aggregate of three (3) man-weeks of training at location(s) to be mutually
agreed upon.
(b) Telephone Message Desk
From 2:00 a.m. to 7:00 p.m. Eastern Standard Time or Eastern Daylight
Time, as applicable, during Business Days, Xxxxxxx will provide a telephone
message desk for Customer to report problems and answer "how-to" questions, to
the extent possible. The service will determine the nature of the problem and
handle the problem if possible, or direct the problem to appropriate personnel
who will attempt to handle the problem.
Outside the hours set forth in the immediately preceding paragraph,
Xxxxxxx will make available a paging mechanism to report Critical Operation
Problems. The person so paged will determine the nature of the problem and
handle the problem if possible, or direct the problem to appropriate personnel
who will attempt to handle the problem.
If the problem reported by Customer is determined by Xxxxxxx to have
been caused by Customer or a third party, Xxxxxxx will inform Customer of such
fact and may charge Customer for such investigation, in accordance with the
Xxxxxxx Consulting Rates then in effect for such investigation. Customer may
request that Xxxxxxx make reasonable efforts to resolve such problem at such
Consulting Rates.
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3. Technical Services
Xxxxxxx will answer how-to question as set forth above and will provide
technical services requested by Customer on a mutually agreed upon basis in
accordance with the Customization. Services Agreement.
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Schedule B
SERVICE LEVELS
Subject to the provisions of this Agreement, Xxxxxxx shall use
reasonable best efforts to meet or exceed the following Service Level target:
Host System Availability of 99.5.% during the Hours of Service. In addition,
during the period of the Specification Study provided under the Customization
Agreement Customer and Xxxxxxx shall agree upon additional Service Levels, in
accordance with which Xxxxxxx shall provide the Services during the Hours of
Service.
For the purposes of this Schedule B, "Host System Availability" means
the number of hours during Hours of Service in any calendar quarter that the
Host System is scheduled to be available to perform Processing Services less the
amount of time in the calendar quarter the Host System cannot be so used due to
hardware failure of the AS/400 or Programming Errors, divided by the number of
hours during Hours of Service in the calendar quarter that the Host System is
scheduled to be available to perform Processing Services, expressed as a
percentage.
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Schedule C
Customization Services Agreement
Terms and Conditions
CHOICE ONE COMMUNICATIONS INC.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxx, XX 00000
Thank you for choosing XXXXXXX SYSTEMS INC. ("Xxxxxxx") to provide you
("Customer") with customization services (the "Project"). The terms appearing
below and on the attached appendices (Appendices 1 and 2), which are
incorporated by this reference, form our Agreement for developing software and
documentation. Please read carefully, and sign this Agreement in duplicate. Both
copies (including Appendices) should be returned to Xxxxxxx for written
acceptance. Once accepted, Xxxxxxx will sign both copies and then return one of
those copies to you.
Xxxxxxx and Customer have also entered into a Service Bureau Agreement
commencing on September 30, 1998 (the "Service Bureau Agreement").
1. DEFINITIONS
When used in this Agreement, the following terms shall have the meaning
specified below:
1.1 "Base Software" means the Base Software, as that term is defined in
the Service Bureau Agreement.
1.2 "Billing System" means the Base Software and the Software Developments.
1.3 "Documentation" means any printed material in the English language
related to the Software Developments provided by Xxxxxxx for use in
connection with the Billing System.
1.4 "Future Software Developments" means any future developments to the
Billing System specifically requested by Customer in accordance with
Section 2.2 hereof.
1.5 "Intellectual Property" means all intellectual and industrial property,
including copyright, trademarks, patents, industrial designs, mask
works and integrated circuit topographies, created, developed or
reduced by practice by a party under this Agreement.
1.6 "Project Plan" means the timetable for accomplishing the Project, as
set out in the Statement of Work.
1.7 "Software Developments" means the enhancements and developments made by
Xxxxxxx in order to adapt the Base Software to the specific
requirements of Customer, all as listed in the Statement of Work.
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1.8 "Statement of Work" means the initial statement of work to be completed
and mutually agreed upon by Xxxxxxx and Customer pursuant to Appendix 1
hereto.
1.9 "Technical Specifications" means the detailed design specifications for
the Software Developments as listed in the Statement of Work, as well
as the detailed description of the other services to be provided by
Xxxxxxx under this Agreement.
2. SOFTWARE DEVELOPMENTS
2.1 Initial Implementation
(a) After acceptance of the Statement of Work by Customer, this Agreement
and the Statement of Work shall supersede all other definitions or
descriptions of the Software Developments, both written or oral,
whether made by Customer or Xxxxxxx.
(b) Based on the Technical Specifications, Xxxxxxx shall develop the
Software Developments. These will be done at Xxxxxxx'x premises and at
Customer's premises as required.
(c) Each party shall appoint a primary contact and a secondary contact who
shall be the contact point for every issue concerning the Project and
who shall be informed of the progress of the Project. The names of the
contacts will be exchanged in writing by the parties. Using the
contacts, the parties shall report to each other as mutually agreed
upon as to the progress being made by each of them in relation to their
various responsibilities set out in the Project Plan, any delays being
encountered and the actions being taken to recover from such delays.
(d) Any additions, modifications or changes to the Technical Specifications
contained in the Statement of Work shall be deemed Future Software
Developments and covered under Section 2.2 below.
2.2. Future Software Developments.
(a) Customer may in the future determine that Future Software Developments
should be made to the Billing System. Customer will initiate Future
Software Developments by delivering a draft set of user requirements to
Xxxxxxx detailing the general functionality required of the Future
Software Developments and any other general requirements to be met.
(b) Xxxxxxx shall respond within a reasonable timeframe (but not more than
thirty (30) days) to user requirements received by it under Section
2.2(a) above by providing Customer with a written best estimate of the
days of effort required to carry out the Future Software Developments,
together with any general comments on the user requirements that may be
appropriate. The days of effort estimate shall be inclusive of the time
required to produce Documentation as required under this Agreement,
project management, consultancy work and all Xxxxxxx internal testing.
(c) Upon receipt of Xxxxxxx'x estimate under Section 2.2(b) above, Customer
will review the user requirements for the Future Software Developments
and shall make any changes that
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it deems necessary. Customer will then prepare a detailed
functional specification and a project timetable specifying dates for
completion of the relevant phases of the Future Software Developments
based on Xxxxxxx'x days of effort estimate. Customer, may, at its
discretion, request Xxxxxxx to complete the project timetable on its
behalf based on Customer's delivery requirements.
(d) Upon receipt of the functional specification for the Future Software
Developments (as prepared under Section 2.2(c) above) and upon
completion of the project timetable, Xxxxxxx shall review its days of
effort estimate and shall advise Customer of the extent to which it can
comply with the functional specification and the project timetable. The
parties shall then agree upon any changes to the functional
specification or to the project timetable which may be necessary to
enable Xxxxxxx to complete the Future Software Developments in
accordance with both of those documents.
(e) Upon completion and written agreement by the parties of the
documentation referred to in Section 2.2(d) above in the form of a
statement of work Xxxxxxx shall carry out and implement the Future
Software Developments in accordance with the agreed functional
specification and project timetable all as set forth in such statement
of work.
(f) The work carried out by Xxxxxxx to produce a statement of work for
Future Software Developments will be charged to Customer on a time and
material basis at an hourly rate equal to Xxxxxxx'x then-current rate
for producing such statements of work.
3. DEVELOPMENTS AND TESTING EQUIPMENT - SPACE
Customer agrees to provide facilities for Xxxxxxx, the equipment, Billing System
and the Future Software Developments, at no charge, and Customer will ensure
that Xxxxxxx has sufficient access to such equipment, Billing System and Future
Software Developments, so long as the security requirements of Customer are met.
Each party will also provide reasonable work space on the other party's premises
for its employees who require work space to furnish the services to be provided
by Xxxxxxx under this Agreement.
4. CUSTOMER ASSISTANCE
Customer shall assist Xxxxxxx in the performance of its services under this
Agreement by making available all equipment, software, documentation,
information and personnel reasonably required for the execution of this
Agreement on a timely basis after Xxxxxxx has provided Customer with any such
requirement. Customer shall also ensure that those of its personnel who are
assigned to assist Xxxxxxx are familiar with Customer's requirements and have
the expertise and capabilities necessary to permit Xxxxxxx to undertake and
complete the services under this Agreement.
5. OWNERSHIP OF SOFTWARE DEVELOPMENTS AND FUTURE SOFTWARE DEVELOPMENTS
5.1 Upon payment of the a-mounts specified in Section 7, the Software
Developments and all Intellectual Property related to them and, in accordance
with Section 2 of this Agreement, the Future Software Developments and all
Intellectual Property related to them, shall be jointly
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owned by Customer and Xxxxxxx, i.e., each party shall grant the other a
royalty-free, perpetual license to use, modify and create derivative works of
all of the foregoing.
5.2 This ownership and grant of license by each party shall imply that each
party will be entitled to exercise all Intellectual Property rights on these
Software Developments and Future Software Developments (including without
limitation the rights to disclose, use, sell, license, and adapt) without any
interference of the other party or any duty to account to the other party,
except that Customer shall not license any third party to use any of the
Software Developments, the Future Software Developments or the Intellectual
Property rights related to them.
6. DELIVERY SCHEDULE
-----------------
6.1 Any Software Development or Future Software Development shall be tested and
implemented according to the time schedule provided in the applicable statement
of work, with the understanding that if any of the time-frames in such statement
of work are delayed, the other time-frames will be postponed by an equal number
of days.
6.2 On the date of the delivery of the Software Developments and on the date of
delivery of any Future Software Developments, Customer will initiate user
acceptance testing. If Customer is satisfied with the results of the Billing
System on the date which is fifteen (15) business days after such delivery, a
statement of provisional receipt will be drawn up and signed by Customer and
delivered to Xxxxxxx. In any event, Customer will certify full acceptance of the
Billing System no later than thirty (30) business days after delivery of the
Billing System or the Future Software Development, as the case may be, for user
acceptance testing.
7. PRICES, PAYMENT AND PENALTIES
-----------------------------
7.1 Fee for Software Developments
-----------------------------
Work to be performed by Xxxxxxx on Software Developments pursuant to the
Statement of Work shall be charged to Customer based on Xxxxxxx'x then-current
hourly rates, plus reimbursement for materials and other related expenses
reasonably incurred by Xxxxxxx in performing such work. Xxxxxxx'x current hourly
rates rates are set forth in Appendix 2 attached hereto.
7.2 Fee for Future Software Developments
------------------------------------
Work to be performed by Xxxxxxx on Future Software Developments shall be charged
to Customer based on Xxxxxxx'x then-current hourly rates, plus reimbursement for
materials and other related expenses incurred by Xxxxxxx in performing such
work.
7.3 Expenes
-------
(a) Customer agrees to reimburse Xxxxxxx for the cost of travel, at coach class
or equivalent rate, and time involved in necessary visits to carry out
and/or to install the Software Developments and Future Software
Developments, subject to a maximum limit eight (8) hours for travel to and
from Xxxxxxx to Customer. Travel time charges will be paid at Xxxxxxx'x
then-current hourly rate for travel related to customization services for
its other customers.
(b) All reasonable accommodation and subsistence expenses incurred by Xxxxxxx
will also be reimbursed by Customer. Such expenses must be expressly
requested by Customer in relation to the Project and for the services
provided by Xxxxxxx.
(c) All telecommunication expenses incurred by Xxxxxxx in relation to the
Project and for services provided by Xxxxxxx will also be reimbursed by
Customer upon presentation by Xxxxxxx of sufficient written proof of
reasonable expenses incurred.
(d) These expenses, except telecommunication expenses, must receive Customer's
prior written authorization and will be reimbursed upon receipt of an
invoice with the related vouchers.
7.4 Taxes
Prices in this Agreement are exclusive of all taxes and Customer shall pay any
sales, use, goods and services, personal property, consumption, value-added or
other tax and any duties or tariffs that may be assessed whether based upon the
delivery, possession, sale or use of these customization services or otherwise,
except for tax based on the net or gross income of Xxxxxxx.
7.5 Invoicing and Payment Terms
(a) Any payments due Xxxxxxx from Customer will be invoiced and wil be due and
payable thirty (30) days after Customer's receipt of such invoice, which
may be sent by facsimile and deemed received with confirmed answerback. If
payment is delayed by Customer, other than in accordance with Section
7.5(b) below, Xxxxxxx shall be entitled to charge interest at a rate equal
to the lesser of: (i) eighteen (18%) per annum; or (ii) the maximum lawful
interest rate under applicable law. Each such invoice delivered to Customer
will provide details of the charges to Customer, including Agreement
reference numbers, applicable rates and hours of Xxxxxxx personnel
providing services to Customer and will be supported by proper invoices and
vouchers in respect of all expenses for which reimbursement is claimed.
(b) All payments under this Agreement shall be made in U.S. Dollars, and
Customer shall have the right to withhold payments for any amounts under
dispute by Customer, but shall pay any other amounts invoiced that are not
in dispute. If such dispute is resolved in favor of Xxxxxxx, Customer shall
pay interest on such disputed amount from the date it originally became due
until the date it is paid to Xxxxxxx at a rate equal to the lesser of: (i)
eighteen percent (18%) per annum; or (ii) the maximum lawful interest rate
under applicable law.
8. DURATION AND TERMINATION
8.1 This Agreement may be terminated forthwith by either party on written notice
if the other party is in significant breach of its obligations and fails to
remedy the breach within thirty (30) days of receipt of notice in writing
thereof. In the event that the terminating party can demonstrate that such
breach has involved it in additional costs, then it shall have the right to
recover such costs from the breaching party.
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8.2 Either party may terminate this Agreement forthwith on written notice if the
other party shall become insolvent or bankrupt or make an arrangement with its
creditors or go into liquidation.
8.3 Notwithstanding anything contained in this Agreement to the contrary, in no
event shall the Statement of Work be terminated once it has been accepted
pursuant to Section 2.1(a).
8.4 Upon termination of this Agreement, however occasioned, Xxxxxxx shall
forthwith deliver to Customer (without retaining copies of the same) all
correspondence, drawings, specifications, accounts documents and papers of any
description relating to affairs and business of Customer (or any subsidiary or
associated company) whether or not the same were prepared by Xxxxxxx, were
supplied by Customer (or any subsidiary or associated company), and all other
property of Customer or any subsidiary or associated company (other than
property jointly owned of Xxxxxxx or Customer) within its possession or under
its control.
8.5 Termination of this Agreement shall not prejudice any rights of either party
which have arisen on or before the date of termination and shall not prejudice
the Service Bureau Agreement or any rights of either party thereunder.
9. WARRANTY
9.1 Xxxxxxx warrants and represents to Customer that it has full right and
authority to enter into this Agreement.
9.2 Xxxxxxx warrants that the Software Developments and the Future Software
Developments will perform the facilities and functions set out in their
respective statements of work (including all technical, functional and other
specifications contained therein) as of the date of acceptance, and shall
continue to provide such facilities and functions and shall be free from
programming errors for a period of ninety (90) days from the, date of acceptance
(the "Warranty Period"). Notwithstanding anything contained in this Agreement to
the contrary, Xxxxxxx shall not be liable for any correction of programming
errors or non-conformity of the Billing System and/or the Future Software
Developments to the extent required because of:
(a) any changes made to the Billing System and/or the Future Software
Developments which were not authorized by Xxxxxxx nor carried out under
the supervision and control of Xxxxxxx; or
(b) any computer program created by Customer or any third party retained by
Customer, which computer program adversely affects the performance of
the Billing System and/or the Future Software Developments; or
(c) accident, neglect, misuse of the Billing System and/or the Future
Software Developments by Customer.
During the Warranty Period, Xxxxxxx shall, at its own cost, immediately correct
and remedy any reported, reproducible programming errors, bugs or any other
problems because of which the Billing System and/or any Future Software
Developments do not conform to the applicable statement of work ("Problems")
notified to it by Customer and shall carry out modification to
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and/or correctionof the Billing System and/or any Future Software Developments,
such that these will be able to provide the facilities and functions set out in
the applicable statement of work. If Xxxxxxx is unable, after using commercially
reasonable efforts, to correct any Problem with a Software Development or Future
Software Development under this warranty, Customer's sole remedy shall be the
refund of an amount not to exceed the actual payments received by Xxxxxxx for
the hourly fees relating to such non-conforming Software Development or Future
Software Development. This shall constitute Customer's exclusive remedy for any
such Problem. Notification by Customer under the terms of this Section shall
include a listing of output and such data as Xxxxxxx may reasonably require in
order to reproduce the operating conditions in which the Problem, the
programming error or non-conformity was discovered. All work carried out by
Xxxxxxx under this warranty will be chargeable to Customer at Xxxxxxx'x
then-current hourly rate if it is found that no Problem or programming error
exists.
9.3 Xxxxxxx warrants that the Software Developments and Future Software
Developments developed under this Agreement will be designed to be used prior
to, during, and after the calendar year 2000 A.D., and without human
intervention will correctly recognize, calculate, process, sequence, store and
transmit Date Data without error or interruption, including leap years, and
including errors or interruptions from functions which may involve Date Data
from more than one century. The term "Date Data" shall mean any data or input
which includes an indication of or reference to date and that is stored
information and internal to functionality. Date calculations involving either a
single century or multiple centuries will neither cause an abnormal ending nor
generate incorrect or unexpected results. When sorting by date, all records will
be sorted in accurate sequence and when the date is used as a key, records will
be read and written in accurate sequence. As used in the previous sentence,
accurate sequence means, by way of example, that records will be read, written,
and sorted in ascending order so that the year 1999 is before the year 2000. The
Software Developments and Future Software Developments will calculate, process,
and display leap year information according to the following algorithm: (i) a
leap year will have twenty-nine (29) days in the month of February; and (ii) a
leap year occurs in all years divisible by 400 and all years evenly divisible by
4 and not evenly divisible by 100. Xxxxxxx, however, makes no representation or
warranty nor takes any responsibility for errors or omissions caused by third
party systems, devices, interfaces or software, or for errors or omissions
caused by functional or technical requirements specified by Customer.
9.4 Xxxxxxx warrants that to the best of its knowledge, at the time of delivery,
no portion of the Software Developments or Future Software Developments as
delivered shall contain any software "Virus" as defined herein. For the purposes
of this Agreement, "Virus" shall mean a set of computer instructions which are
self-replicating or self-propagating and are designed to contaminate the
Software Developments or Future Software Developments, consume computer
resources, or modify, destroy, record or transmit data or programming without
the intent or permission of the user. Xxxxxxx further warrants that prior to the
delivery of any Software Product to Customer, Xxxxxxx will use reasonable
commercial efforts to detect and screen out any virus through the use of the
current version of one or more commercially available virus detection programs.
Xxxxxxx warrants that to the best of its knowledge, at the time of delivery, no
portion of the Software Developments or Future Software Developments as
delivered shall contain any "Disabling Device," as defined herein. For the
purposes of this Agreement, "Disabling Device" shall mean any software routines
or hardware components designed by Xxxxxxx to permit unauthorized access to, or
to disable or erase software, hardware or data, or to
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perform any other such actions which will have the effect of purposefully
materially impeding the normal and expected operation of the Software
Developments or Future Software Developments.
9.5 THE WARRANTIES CONTAINED IN THIS AGREEMENT ARE IN LIEU OF ANY OTHER
WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE OR NON-INFRINGEMENT, AND THOSE ARISING BY STATUTE OR OTHERWISE IN
LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE.
10. LIABILITY
10.1 Xxxxxxx is liable for the Software Developments and the Future Software
Developments performed under this Agreement. HOWEVER, EXCEPT FOR INDEMNIFICATION
PROVIDED UNDER SECTION 11 HEREOF, IN ANY CASE XXXXXXX'X ENTIRE LIABILITY UNDER
ANY PROVISION OF THIS AGREEMENT WITH RESPECT TO A SOFTWARE DEVELOPMENT OR A
FUTURE SOFTWARE DEVELOPMENT SHALL BE LIMITED TO THE AGGREGATE AMOUNT OF HOURLY
FEES (EXCLUDING REIMBURSED EXPENSES) PAID TO XXXXXXX FOR SUCH SOFTWARE
DEVELOPMENT OR FUTURE SOFTWARE DEVELOPMENT, AS THE CASE MAY BE, IN ACCORDANCE
WITH THIS AGREEMENT.
10.2 In no event shall Xxxxxxx be liable for indirect damages (even if Xxxxxxx
have been advised of the possibility of such loss) including, but not limited
to, lost business revenue, lost data, failure to realize expected profits or
savings or other commercial or economic loss of any kind.
11. INDEMNIFICATION
Xxxxxxx or Customer, as the case may be ("Indemnitor"), will defend and
indemnify the other ("Indemnitee") against any claim or suit against the
Indemnitee based on the alleged violation of a copyright trademark, trade secret
or other proprietary right enforceable within the United States or Canada
through Indemnitee's use in Indemnitee's own internal operations or research and
development program or through Indemnitee's use in the Billing System, of a
portion of a Software Development or Future Software Development, the
responsibility for which was that of the Indemnitor, and will pay all costs,
settlements, or judgments finally awarded, and any reasonable costs or expenses
incurred by Indemnitee prior to any prompt and timely written notice of such
claim as provided below (including, but not limited to reasonable attorneys'
fees, whether required as a result of a third party claim or a claim to enforce
this provision) provided that (i) Indemnitor has the right to control the
defense of the litigation, (ii) Indemnitee takes such actions as Indemnitor may
reasonably request to assist in such defense, at Indemnitor's expense, and (iii)
Indemnitee gives Indemnitor prompt notice of any such claim. Indemnitee may have
its own counsel participate in, but not control, the defense of any such matter,
provided that the cost of such counsel shall be borne exclusively by Indemnitee.
Indemnitor will have no obligation to defend and indemnify Indemnitee hereunder
to the extent that any such claim is based upon modifications to such Software
Development or Future Software Development made by a party
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other than the Indemnitor or such Software Development or Future Software
Development is used in a way or in combination with software for which it was
not designed.
12. GENERAL
12.1 Confidentiality
Section 5 (confidentiality) of the Service Bureau Agreement shall also apply to
this Agreement.
12.2 Headings
The division of this Agreement into Articles and Sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The terms "this Agreement",
"hereof," "hereunder" and similar expressions in this Agreement refer to this
Agreement and not to any particular Article, Section or other portion and
include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles and
Sections are to Articles and Sections of this Agreement.
12.3 Extended Meaning
In this Agreement, words importing the singular number only shall include the
plural and vice versa, and words importing persons shall include individuals,
partnerships, associations, trusts, unincorporated organizations and
corporations. The terms provision and provisions in this Agreement refer to
terms, conditions, provisions, covenants, obligations, undertakings, warranties
and representations in this Agreement.
12.4 Notices
All notices shall be in writing and shall be sent by personal delivery, by a
reputable nationwide overnight courier service prepaid, or by facsimile with
confirmed answerback. Notices shall be sent to Customer at the address set forth
above, attention President, with a copy to General Counsel. Notices shall be
sent to Xxxxxxx at 0 Xxx xx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000,
attention President, with a copy to General Counsel. Notices shall be effective
upon delivery in the case of personal delivery, on receipt in the case of
facsimile, and one day after it is sent via overnight courier. No change of
address shall be binding upon the other party hereto until written notice
thereof is received by such party at the address shown above.
12.5 Accounting Terms
All accounting terms not specifically defined herein shall be construed in
accordance with U.S. generally accepted accounting principles.
12.6 Currency
All references to currency herein are deemed to mean lawful money of United
States unless expressed to be in some other currency.
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12.7 Force Majeure
To the extent the performance of this Agreement or any obligations hereunder
(except the making of payments hereunder) is prevented, restricted, or
interfered with by reason of. fire, flood, earthquake, explosion or other
casualty or accident or act of God; strikes or labor disputes; inability to
procure or obtain delivery of parts, supplies, power, Equipment or Software from
suppliers, war or other violence; any law, order proclamation, regulation,
ordinance, demand or requirement of any governmental authority; or any other act
or condition whatsoever beyond the reasonable control of the affected party, the
party so affected, upon giving prompt notice to the other party, shall be
excused from such performance to the extent of such prevention, restriction or
interference; provided, however, that the party so affected shall take all
reasonable steps to avoid or remove such cause of non-performance and shall
resume performance hereunder with dispatch whenever such causes are removed, and
provided further that, in the event such cause is not removed within a period of
two (2) weeks, the other party may terminate this Agreement for cause.
12.8 Severability
If any provision of this Agreement is declared or found to be illegal,
unenforceable or void, then both parties shall be relieved of all obligations
arising under such provision, but only to the extent that such provision is
illegal, unenforceable or void and does not relate to the payments to be made to
Xxxxxxx. If the remainder of this Agreement shall not be affected by such
declaration or finding and is capable of substantial performance, then each
provision not so affected shall be enforced to the extent permitted by law.
12.9 Assignment
Neither party may, without the other party's prior written consent, which
consent shall not be unreasonably withheld or delayed, assign or transfer this
Agreement, or any of its rights or obligations under this Agreement to any third
person (in this Section, an "Assignee") except to an affiliate wholly owned by,
or that wholly owns, or that is under common control with, such party, or as
part of the sale, merger or other transaction involving all or substantially all
of the assets of the party, provided that the Assignee undertakes to the party
not making the assignment to fully perform and be bound by the provisions of
this Agreement. Xxxxxxx may delegate to affiliates of Xxxxxxx and to agents,
suppliers and contractors of Xxxxxxx any of the obligations herein imposed upon
Xxxxxxx and Xxxxxxx may disclose to any such persons any information required by
them to perform the duties so delegated to them, but such delegation shall not
relieve Xxxxxxx of its performance obligations hereunder.
12.10 Waiver
No modification, addition to or waiver of any rights, obligations or defaults
shall be effective unless in writing and signed by the party against whom the
same is sought to be enforced. One or more waivers of any right, obligation or
default shall not be construed as a waiver of any subsequent right, obligation
or default. No delay or failure of Xxxxxxx in exercising any right hereunder and
no partial or single exercise thereof shall be deemed of itself to constitute a
waiver of such right or any other rights hereunder.
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12.11 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts, excluding its conflict of laws principles.
12.12 Dispute Resolution
(a) All controversies or claims arising out of or relating to this
Agreement or breach thereof, including any billing dispute (a
"Dispute"), shall be resolved in accordance with the procedures set
forth in this Section.
(b) Initially the Dispute shall be referred to the Customer's Vice
President familiar with the Services pursuant to this Agreement and a
Xxxxxxx Vice President to resolve tile Dispute.
(c) In the event that one of the individuals specified above is
unavailable, the Dispute shall be referred to that individual's
immediate superior or designee.
(d) If the Dispute cannot be resolved by such individuals within thirty (30)
days, it shall be finally settled by expedited arbitration by one arbitrator
chosen by the American Arbitration Association and in accordance with the
commercial arbitration rules of the American Arbitration Association, and
judgments upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereover. The arbitrator shall be ethically neutral and
agree to be bound by the American Bar Association's rules of ethics in this
regard. Both parties shall bear equally the cost of the arbitration (exclusive
of legal fees and expenses, all of which each party shall bear separately). The
place of arbitration shall be Albany, New York and the language of arbitration
will be English.
12.13 Independent Contractor
Xxxxxxx employees shall be deemed not to be at any time employees or servants of
Customer. Xxxxxxx is and shall remain an independent contractor for all
purposes. Unless otherwise agreed to, Xxxxxxx does not undertake to perform any
obligation of Customer, whether regulatory or contractual, or to assume any
responsibility for Customer's business or operations.
12.14 Solicitation of Employees
In the event that either party directly or indirectly hires, whether as an
employee, independent contractor, or in any other capacity, any person who was,
within six months prior to the hiring, an employee of the other party or any of
its subsidiaries, such party agrees to pay the other party a finder's fee equal
to 26 times that employee's bi-weekly gross compensation at the time he or she
left the employment of the other party or its subsidiary. This provision shall
apply only to those employees who either worked for the other party or its
subsidiary on the Project in some capacity or worked with software or
applications which were in some fashion generally similar to any offered or
provided to Customer.
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12.15 Further Assurances
Each of the parties hereto shall from time to time execute and deliver all such
further documents and instruments and do all acts and things as the other party
may reasonably require to effectively carry out or better evidence or perfect
the full intent and meaning of this Agreement.
12.16 English Language
The parties have requested that this Agreement and all communications and
documents relating hereto be expressed in the English language.
12.17 No Relationship
Nothing in this Agreement shall be construed to constitute or create a joint
venture, partnership, or formal business organization of any kind and the rights
and obligations of each party shall be only those expressly set forth herein.
Neither party shall have authority to bind the other, and neither party assumes
any liabilities of the other party.
12.18 Entire Agreement
This Agreement constitutes the entire Agreement between the parties hereto with
respect to the subject matter hereof and cancels and supersedes any prior
understandings and agreements between the parties hereto with respect thereto.
There are no provisions, representations, undertakings, agreements, or
collateral agreements between the parties other than as set out herein and the
parties agree that no obligations or duties not set out expressly herein shall
be imposed upon the parties or implied by law. Unless otherwise agreed to in
writing by the parties, Customer's orders for Services shall be governed by the
terms of this Agreement and nothing contained in any purchase order shall in any
way modify, vary, change or add any term or condition hereto.
IN WITNESS WHEREOF, Customer and Xxxxxxx have executed this Agreement under
seal.
CHOICE ONE COMMUNICATIONS INC. XXXXXXX SYSTEMS INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxxx
Title: Senior Vice President Title: Senior Vice President
Date: September 30, 1998 Date: September 30, 1998
